The main legal point established in the judgment is the interpretation and application of the Delhi Cooperative Societies Act, 1972 and related rules in determining membership transfer, outstanding dues, and possession of the flat.

SANJIV KHANNA, J:

1. This case has a very long history of litigation. Late Mr. V.K. Gupta was enrolled as a member of the Mother Dairy Cooperative Group Housing Society Ltd. vide membership number 151. He had deposited Rs.9,46,530/- towards cost of land and construction of the flat being constructed by the Cooperative Society at Plot No.34, Sector – 10, Dwarka Phase – I, New Delhi. Mr. V.K. Gupta expired on 10.06.2000 leaving behind a widow and 6 other legal heirs. The children had executed relinquishment deeds in favour of their mother Lajjawati Gupta. Lajjawati thereafter applied for transfer / transmission of membership in her name vide her application dated 27.07.2000 alongwith the death certificate, indemnity bond and other documents. This was followed by her letter dated 19.09.2000. Lajjawati Gupta had agreed to pay legitimate dues of the society and to complete the formalities required.

2. The Cooperative Society by their letter dated 14.02.2001 raised a demand of Rs.9,62,501.45/- and, at the same time, averred that they had initiated expulsion proceedings against V.K. Gupta before the Registrar, Cooperative Societies.

3. As the Cooperative Society was not ready and willing to accept Lajjawati as a member, initiated proceedings under Rule 35(7) of the Delhi Cooperative Societies Rules, 1973. By the order dated 31.05.2002, the Registrar, Cooperative Societies held and directed that Lajjawati would apply to the Cooperative Society afresh and complete all required formalities as per law within one month. The Cooperative Society were directed to transfer V.K. Gupta's membership in Lajjawati's name after completing all the legal formalities within one month after receiving her application. The Cooperative Society was further directed to raise a demand, if any, towards the cost of construction of the flat and Lajjawati would clear all dues demanded by the Cooperative Society. The Registrar, Cooperative Societies dismissed the proposal of the Cooperative Society for expulsion of V.K. Gupta. The consequence thereof was that V.K. Gupta’s membership remained valid and intact.

4. In a nutshell, V.K. Gupta’s expulsion was rejected and this would mean that Lajjawati had stepped into his shoes, being his wife and legal representative. Pertinently, Lajjawati was the nominee of V.K. Gupta as per the records of the Cooperative Society.

5. Consequent to the order dated 31.05.2002, Lajjawati applied for transfer of membership in her name vide letter dated 14.06.2002. The Cooperative Society, by their letter dated 29.06.2002 raised a demand of Rs.6,55,641/-. In the meanwhile, the Cooperative Society filed a revision petition before the Financial Commissioner under Sections 80 and 81 Delhi Cooperative Societies Act, 1972 impugning the order dated 31.05.2002 passed by the Registrar, Cooperative Societies. During the pendency of the said revision petition, Lajjawati expired on 21.12.2004 and his legal heirs were brought on record. The revision petition remained pending for about 5 years and was disposed of vide order dated 06.02.2007. Paragraph 8 of the said order reads as under:

“8. The Lower Court record clearly shows that an inquiry was instituted under section 59(1) of the Act against Sh. V.K. Gupta, which was concluded with a finding of a liability of Rs.1.98 lacs being fixed on Sh. V.K. Gupta. The inquiry is dated 10th November, 1997. The petitioner society has not denied that respondent no.2 had applied for transfer of membership after the death of late Sh. V.K. Gupta, on grounds that she was valid nominee. It is the petitioner society’s case that respondent no.2 has to clear the liability of the original member because she had stepped into the shoes of late Sh. V.K. Gupta, but the petitioner has simultaneously maintained that they would transfer the membership only after the outstanding amount is cleared. Section 59(2) of the Act pro