Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2019 Supreme(SC) 94

SUPREME COURT OF INDIA
A.M. KHANWILKAR, AJAY RASTOGI, JJ.
Delhi Dayalbagh Cooperative House Building Society Ltd. – Appellant
Versus
Registrar Cooperative Societies & Ors. – Respondents
Civil Appeal Nos. 1313, 1314 & 1315 of 2019 (Arising out of SLP(Civil) Nos. 8138 of 2013; 9015 & 26905 of 2010)
Decided On : 30-01-2019

Advocates Appeared:
For Petitioner: Mr.Shekhar Naphade, Sr. Adv. Ms. Garima Prashad, AOR Mr. Nishit Agarwal, Adv.
For Respondent(s): Mr. Praveen Agrawal, AOR Mr. Ashwani Kumar, AOR Ms. Iti Sharma, Adv. Mr.Jay Kumar, Adv. Mr. Puneet Sharma, Adv. Mr. Baij Nath Patel, Adv. Ms. Sweta, Adv. Ms. Romila, Adv. Mr. Pashupathi Nath Razdan, AOR Mr. Krishna Kumar, AOR Mr. Dhruv Mehta, Sr. Adv. Mr. Vipin Nair, AOR Mr. P.B.Suresh, Adv. Mr. Udayaditya Banerjee, Adv. Mr. Vikrant Yadav, Adv. Mr. Prakash Baghel, Adv. Mr. Karthik Jayashankar, Adv. Mr. Abhay Pratap Singh, Adv. Mr. Anshumaan Bahadur, Adv. Mrs. Anil Katiyar, AOR

IMPORTANT POINTS
After the peaceful possession free from encumbrances, was handed over by the State Government to the society, all rights of the said land stood vested with the society free from encumbrances.
In case the Rules or bye-laws framed under the Act are inconsistent with the Act, the Act will prevail.
Transfer of plot by the member by registered sale deed, not contravening any law cannot be held void.
Registered sale deed by a member can only be challenged before a civil court, not under the Cooperative Societies Act.
After the land stood vested in society free from encumbrances, section 44A of Land acquisition Act, 1894 will have no application.

Headnote:(a) Land Acquisition Act, 1894 – Section 41 and 42 – Society fulfilling all conditions of section 41 – Notification u/s 42 published in gazette – Government handing over possession free from encumbrances – Held, all rights of the land stood vested with the society free from encumbrances and transferred to its members – Provisions of Government Grants Act not applicable. (Para 32, 33, 46)
       (1975) 2 SCC 122 – Distinguished
       (b) Interpretation of statute – Rules framed under the Act or bye-laws framed under the Rules – In case inconsistent with the Act, the Act will prevail – Instantly clause 51 of the byelaws framed under putting restriction on member to transfer or a sale or otherwise to a nonmember of the society without permission of the society held, inconsistent with Delhi Cooperative Societies Act, 2003 and Delhi Cooperative Societies Rules, 2007 – Such provision cannot have the force of law. (Para 40, 41)
       (c) Interpretation of document – Clauses 2 and 3 of the sale deed between the society and the original allottee – Reserving presumptive rights of the society to have a cooling period of six months for a member top sell his plot – Provision of notice to the society and the cooling period of six months enabling society to purchase the plot on the market value – On failure of society to purchase, member will be at liberty to alienate the plot – Instantly transfer of member’s plot by registered sale deed, not contravening any law cannot be held void. (Para 42)
       (d) Delhi Cooperative Societies Act, 2003 – Section 70 – Registered sale deed by a member – Can only be challenged before a civil court – Not u/s 70. (Para 45)
       (e) Land Acquisition Act, 1894 – Section 44A – Rights of the parties governed by law after the land stood vested in society free from encumbrances – The land now regulated under Delhi Cooperative Societies Act, 2003 and Delhi Cooperative Societies Rules, 2007 – Section 44A has no application. (Para 47)
       Facts of the case:
       The appellant Society in fulfilment of its obligations and in terms of the agreement dated 13th May, 1955 allotted plots to its members within the stipulated period of 15 years by a separate registered sale deed executed on certain terms and conditions.
       Mr. Manocha, the member concerned, had initially constructed a single storey house but later constructed a multi storey structure for his own needs and requirements. He advertised for sale of a basement, four bedroom apartments on each of the upper four floors of the building constructed on the plot in question. The society published a notice informing the public in general that the residential plots in Soami Nagar cannot be sold to persons who are not the members and who are not eligible to be members of the society and violation of the society byelaws and the sale deed even if registered shall be at his own risk and peril.
       A claim petition was filed at the instance of society under Section 70 of the Act, 2003 seeking declaration of the sale/transfer of the property in question by the allottee to a nonmember without prior notice or permission, as illegal and void being in violation of clauses 2 & 3 of the sale deed and clause 51 of the byelaws and it was prayed that the same may be cancelled and the property be referred back to the society.
       The award was passed in favour of the appellant society and against the respondent no. 2 holding that sale/transfer was violative of clauses 2 & 3 of the sale deed and byelaw 51 directing the impleaded respondent (member of the society) to hand over the property within the stipulated time to the appellant society. But no order was passed against the transferees/purchasers including the respondents being nonmembers of the society. When the proceedings were initiated in execution of the award and property was stated to be attached, the respondents who were stated to be the parties and claiming to be the purchasers and occupants filed separate appeals against the award before the Cooperative Tribunal. At the same time, the appellant society also filed appeal assailing the award to the limited extent with regard to deletion of names of the impleaded respondent nos. 3 and 4 with a prayer for reinstatement. The appeals filed by the impleaded respondents and of the appellant society were heard by the Tribunal and disposed of by a common judgment. The appeal of the appellant society was allowed but the award passed by the Arbitrator dated 1st December, 2006 was set aside which was the subject matter of challenge before the Delhi High Court and after being affirmed on dismissal of the writ petition preferred by the appellant society
       Finding of the Court:
       The registered sale deed is not void.
       Result: Appeals dismissed.

JUDGMENT :

Rastogi, J.

Civil Appeals arising out of SLP (Civil) No. 8138 of 2013, SLP (Civil) No. 9015 of 2010, SLP (Civil) No. 26905 of 2010

1. Leave granted.

2. The above noted appeals are directed against the orders separately passed by the High Court of Delhi in writ petitions filed at the instance of the present appellant Society which came to be dismissed upholding the order of the Cooperative Tribunal setting aside the award passed by the Registrar Cooperative Societies holding that the Arbitrator had no jurisdiction to examine the validity and legality of the registered sale deed which can be questioned only by availing a remedy in the Civil Court holding jurisdiction. Orders were separately passed by the Tribunal in the cases of the individual members in whose favour sale deed was executed by the society, having been separately decided by the High Court, which has been challenged in these batch of appeals.

3. The facts that emerge from the multitude and collateral and exhaustive pleadings in brief are that the appellant is a house building Society originally registered with the Registrar, Cooperative Societies, Delhi (“hereinafter being referred to as “RCS”) under the provisions of the Bombay Cooperative Societies Act, 1925. On enactment of the Delhi Cooperative Societies Act, 1972, the provisions of the Act, 1972 and the rules framed thereunder came to govern the field. However, the Act of 1972 came to be repealed by the Delhi Cooperative Societies Act, 2003(hereinafter being referred to as the “Act 2003”) as amended by the Delhi Cooperative Societies(Amendment Act), 2006 which now governs the field along with Delhi Cooperative Societies Rules, 2007 framed thereunder.

4. The Society framed its byelaws, namely, Delhi Dayalbagh Cooperative House Building Society Ltd., Soami Nagar, New Delhi, with the primary object to acquire the land either through outright purchase or on lease for construction of houses for its members, either on rent or on hire purchase system or by outright sale with a stipulation that no member shall be permitted to transfer, sell or mortgage his house to any person other than the members of the society or the society itself as referred to under byelaw 51 and after the object being achieved for which the Society has been formed, the procedure may be followed for its liquidation as referred to under byelaw 65. Para 5, 51 and 65 of byelaws which are relevant for the purpose are reproduced as under:-

“5. (i) Any person shall be eligible to be a member of the society provided:
(a) he is a follower of Radha Soami faith and a member of Radha Soami Satsang affiliated to Radha Soami Sabha, Dayalbagh, Agra;
(b) He, at the time of enrolment as a member, is domiciled in the Union Territory of Delhi or has been resident in the Union Territory of Delhi for two years or more; provided that this condition shall not apply to members of All India Services and employees of the Central Government and the Delhi Administration.
(c) his written application for membership has been approved by a majority of the Managing Committee.
(d) his age is more than 18 years, except in the case of minor heir of a deceased member;
(e) he is not a member of any other house building society;
(f) he or his wife (she or her husband in case of a woman) or any of his/her dependents does not own a dwelling house or a plot for building a house in Delhi;
(g) directly or indirectly he does not deal in purchase or sale of house or land for construction of houses either himself or through any of his dependents.
(h) he has carried out the provisions of byelaw.
(ii) Every person seeking membership of the society shall sign a declaration to the effect that he or his wife(she or her husband) or any of his/her dependents does not own a dwelling house or plot in Delhi and that he/she is not a member of any other cooperative house building society.
(iii) Every member on admission shall pay Rs.10/as admission fee which shall not be refunded in any case.
(iv) When a pers

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2019 Supreme(SC) 94

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