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2007 Supreme(Bom) 119

2007(3) ALL MR (JOURNAL) 6
(DELHI HIGH COURT)
Dr. MUKUNDAKAM SHARMA, C.J. & Ms. HIMA KOHLI, J.
Smt. Kusum Lata Gupta & Ors.- Petitioners
Versus
Registrar Co-operative Societies & Anr.- Respondent
Writ Petition (C) 14758-66 of 2004
Decided on 29th January, 2007.
Advocates appeared
Ms. MALA GOEL, NEMO, NAVIN KUMAR, ASHIS AGGARWAL with GURU KAMAL, SANJAY GOYAL, S. K. AGARWAL, SANJAY PODDAR, D. K. RUSTOGI, for Petitioners.
M. P. SIDDIQUI, Ms. SANGEET A CHANDRA, Adv. for DDA, V. K. TANDON Advocate for RCS and Govt. of NCT of Delhi Ms. SA VITA RUSTAGI, V. K. TANDON Advocate, For RCS, VIPUL SRIVASTAVA, Ms. ZUBEDA BEGUM, Advocate, for RCS SATYA MITRA GARG, RAKESH MUNJAL, Sr. Counsel, With Ms. SHAZIA. NARESH K. SHARMA, D. P. SINGH, for SUNIL BAGAR. RAJENDRA DUTT. P. S. MAHENDRU. AMIET ANDELY, Ms. P. BATRA SINGH, ANJU BHATTACHARYA with RAJIV DEWAN, for Respondents.

The main legal point established in the judgment is that cooperative societies cannot charge excessive gate money/entry fee/development fund/transfer fee/common good fund from purchasers of flats, and the Registrar, Co-operative Societies has the power to issue directives under Rule 77.

Headnote:

Gate Money - Charging of Entry Fee by Cooperative Societies - Delhi Co-operative Societies Act, 1972, Rule 77 - The court discussed the legality of charging gate money/entry fee/development fund/transfer fee/common good fund from purchasers of flats by cooperative societies. The court referred to notifications dated 14-12-1999, 10-10-2001, and 9-10-2002 issued by the Registrar, Co-operative Societies, and analyzed the provisions of Rule 77 of the Delhi Co-operative Societies Rules, 1973. The court also considered Section 91 of the Delhi Co-operative Societies Act, 2003, which provides for special provisions for co-operative housing societies and the transfer fee for becoming a member.

Fact of the Case:

The petitioners purchased flats from the original members of the respondent societies and were charged gate money/entry fee/development fund/transfer fee/common good fund by the societies. They challenged these charges as violative of directives issued by the Registrar, Co-operative Societies. The societies argued that the Registrar had no power to scrutinize the demands made by the societies from its members.

Finding of the Court:

The court found that the charging of gate money/entry fee/development fund/transfer fee/common good fund by the societies was illegal and in violation of the directives issued by the Registrar, Co-operative Societies. The court held that the Registrar had the power to issue directives under Rule 77 and directed the societies to refund the excess amount charged to the petitioners.

Issues: The principal issue was whether the societies could charge gate money/entry fee/development fund/transfer fee/common good fund from purchasers of flats. Another issue was the power of the Registrar, Co-operative Societies to issue directives under Rule 77.

Ratio Decidendi: The court held that the charging of excessive amounts by the societies was unjustified and illegal, and the Registrar had the power to issue directives under Rule 77. The court also emphasized the need for the societies to charge reasonable amounts for providing common facilities to the members.

Final Decision: The court directed the petitioners to pay a reasonable transfer fee and ordered the societies to refund the excess amount charged, with interest, within a specified period.

Dr. MUKUNDAKAM SHARMA, CJ.:- These writ petitions are similar in nature and they involve identical questions of law and facts and, therefore, they are being disposed of by this common judgment and order.

2. The principal issue which arises for consideration in these writ petitions is whether or not the respondent societies could charge any gate money/entry fee/development fund /transfer feel common good fund from the bona fide purchasers, who had purchased the flats from the original members of the society, Almost all the respondent societies concerned have charged from the petitioners herein, who are purchasers of flats from the original members of the society, charges of the aforesaid nature of various amounts ranging upto about a lac of rupees, from each of the purchasers of the flats so as to make them members of the society.

3. The petitioners herein have purchased flats on execution of relevant documents/conveyance deeds from the original members of the respondent societies. Their contention is that they had purchased the aforesaid flats as bona fide purchasers on payment of consideration/amount and upon execution of relevant documents/conveyance deeds as required. Their further contention is that the vendors, namely, the original owners and allottees of the flats had transferred all their rights in the aforesaid flats to them by executing relevant documents/conveyance deeds and that the said petitioners have stepped into the shoes of the original members. It is stated that despite the aforesaid fact, a demand has been made on behalf of the various societies for payment of gate money/entry fee /development fund / transfer feel common good fund from the said purchasers of the flats before letting them in. The aforesaid action on the part of the societies is challenged in these writ petitions on the ground that they are violative of the directives issued by the Registrar, Co-operative Societies on 14-12-1999 and 10-10-2001, apart from being otherwise illegal and without authority of law. The reliefs that are sought for by the petitioners are of quashing of the aforesaid demands made from the petitioners by the societies and for refund of the entire amount paid by them, amounting to one lac of rupees or more, each with interest accrued thereon. Various societies, who are also parties herein, have taken up a plea in all these writ petitions that the directives issued by the Registrar, Cooperative Societies on 14-12-1999 and 10-10-2001 are without jurisdiction as there is no power vested on the Registrar, Co-operative Societies to issue such directives under the provisions of Rule 77 of "The Delhi Co-operative Societies Rules, 1973."

4. It was submitted on behalf of the societies, that the societies are not carrying out any business in construction and allotment of the flats and also in carrying out the maintenance of the said flats, particularly, when no profit making is involved in carrying out such activity, It is also the case of the societies that the General Body of the society is the supreme authority as envisaged under the provisions of the Act and, therefore, the Registrar has no power and authority to sit over or to scrutinise the demands made by the societies from its members, which is an internal matter of the societies and their members.

5. We have heard the learned counsel appearing for the parties, who have taken us through the pleadings of the parties and also the relevant laws including the various decisions, which they have relied upon, during the course of their arguments.

6. Having analysed and scrutinised all the facts and circumstances and the laws relied upon by the counsel appearing for the parties, we propose to dispose of all these writ petitions by giving our reasons.

7. In order to appreciate the contentions of the counsel for the parties, it would be appropriate to refer to and extract the relevant portions of the notifications dated 14-12-1999, 10-10-2001 and 9-10-2002.

Notification dated 14-12-1999

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