IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Smt. Sunita Datta - Appellant
Versus
The Sukhi Pariwar Cghs Ltd. & Ors. - Respondents
W.P.(C) 2408 of 2024 and CM APPL. 9914 of 2024
Decided On : 19-02-2024
Membership Dispute - Cooperative Society - Delhi Cooperative Societies Act, 1973, Rules, 1973 - Bye-law 5(i)(b) - Rules 24(1)(ii), 30, 33 - The court discussed the provisions of the Delhi Cooperative Societies Act, 1973, Rules, 1973, and Bye-law 5(i)(b) of the Society. It highlighted the requirements for membership approval, deposit of membership fee, and compliance with affidavit and declaration rules. The court emphasized that the membership of the petitioner was not in compliance with the legal provisions, and the petitioner failed to dispute the anomalies in the documents.
Fact of the Case:
The petitioner sought to quash an award and orders upholding the rejection of their membership claim in a cooperative housing society. The petitioner claimed to have fulfilled the membership requirements by depositing a sum and obtaining a share certificate, but the society disallowed the membership, leading to arbitration and subsequent dismissal of the appeal.
Finding of the Court:
The court found that the petitioner's membership was not in accordance with the law and that there was no ground for interference in the writ jurisdiction. The court also noted that the petitioner failed to encash a refund cheque offered by the society.
Issues: Dispute over membership approval and entitlement to allotment of flats, validity of deposit and documents submitted, and the payment of interest on the deposit.
Ratio Decidendi: The court held that the petitioner's membership did not comply with the legal provisions, and there was no basis for interference in the matter of interest payment. The petitioner's failure to dispute the anomalies in the documents further supported the court's decision.
Final Decision: The petition and application were dismissed.
JUDGMENT
Manmohan, A.C.J. (Oral)
1. The present petition has been filed under Article 226 of the Constitution of India seeking to quash the award dated 22nd September, 2014 passed by the Registrar (`Arbitrator') as well as orders dated 3rd April, 2019 and 14th September, 2023 passed by the Delhi Co-operative Tribunal (`DCT') upholding the impugned award to the extent that it rejects the claim of the Petitioner for membership of the Respondent No.1, Sukhi Parivar Co- operative Group Housing Society Ltd. (`Society').
2. The facts of the case to the extent relevant for the present petition are that Petitioner claims to be a member of the Respondent No.1, Society in pursuance to a resolution dated 9th September, 2022, having deposited a sum of Rs 2,16,000/- towards membership fee, share money and cost of land etc.
It is asserted that Respondent No.1, Society had issued a Share certificate no. 423- A on 17th January, 2023.
3. It is stated that the disputes arose in 2003, when Respondent No.1, Society forwarded the list of the members to the office of the Registrar for verification and draw of lot for allotment of flats, however, as the name of the Petitioner was not recommended, therefore, the Petitioner had filed arbitration case no. 2480/AR/ARB/2002-03 against the Respondent No.1, Society. The Arbitrator has disallowed the claim of membership of the Petitioner holding that the membership was granted in violation of the applicable law. The appeal filed against the said award has been dismissed by the DCT. However, both the Arbitrator and DCT have directed the Society to refund the amount deposited by the Petitioner with interest from the date of the issuance of the award passed by the Arbitrator.
4. Learned counsel for the Petitioner states that the Arbitrator and DCT failed to consider the documents i.e., the application on the prescribed form, affidavit dated 17th December, 2002, receipt towards deposit of payment of Rs. 2,16,000/- towards membership fee, share fee and cost of flat as demanded by the Society as well as the share certificate dated 17th January, 2003 issued to the Petitioner. He states that the cheque for a sum of Rs. 2,16,000/- was duly encashed by the Society. He fairly states that there is no demand notice issued by the Society to the Petitioner calling upon her to deposit Rs. 2,16,000/-.
5. He states that it is a matter of record that seven other members were admittedly enrolled subsequently in the year 2003 and were allotted flats. He states that in view of the order dated 4th April, 2006 passed in W.P.(C) No. 5945-46/2004, the allotments made in favour of the junior members ought to have been cancelled and the Petitioner was entitled to an allotment. He states that the handing over of possession to the subsequent seven members i.e., Respondent Nos. 2 to 8 is illegal.
6. In the alternative, he contends that the direction issued by the Arbitrator and DCT in its order dated 14th September, 2023 awarding interest at 24% per annum yearly compounded from the date of the award should be modified and instead it be directed that the interest shall be payable from the date of deposit i.e., 16th September, 2002.
7. We have considered the submissions of learned counsel for the Petitioner and perused the record.
8. The Arbitrator and the DCT have returned concurrent finding of fact to the effect: (i) the membership of the Petitioner is not in accordance with the Delhi Cooperative Societies Act, 1973 (`DCS Act, 1973') and the Delhi Cooperative Societies Rules, 1973 (`DCS Rules, 1973') and the bye-law 5(i)(b) of the bye-laws of the Society: (ii) no letter of approval of the application for membership in favour of Petitioner as mandated under Rules 24(1)(ii) and 30 of the DCS Act, 1973 has been placed on record; (iii) the deposit of the cheque dated 16th September, 2002 for Rs. 2,16,000/- was made by the Petitioner of her own accord without receipt of any demand letter from the Society; (iv) the DCT held that the Petitioner appears
Compliance with the legal provisions for membership approval, deposit, and documentation is crucial, and failure to dispute anomalies in the documents can weaken the petitioner's case.
Membership claims in cooperative societies must be substantiated with evidence of eligibility and compliance with cooperative rules.
The finality of the award and the obligation of the Society to implement it.
The court upheld the liability of the petitioner to pay the loan amount to the society and applied the limitation period under Section 70(4) of the Delhi Co-operative Societies Act, 2003 to dismiss t....
The main legal point established in the judgment is the interpretation and application of Rule 20(1)(c)(i) of the Delhi Cooperative Societies Rules, 2007, in determining the disqualification of a mem....
The main legal point established in the judgment is that fraudulent and illegal acquisition of membership and possession in a cooperative society, including suppression of material facts and circumve....
Membership entitlements under cooperative society laws can be upheld even with delayed contributions if ratified by the society's governing body and presence of equitable factors.
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