Substantial compliance with statutory provisions ensures the legality of auctioning flats by a cooperative society, fulfilling the legislative intent while safeguarding member interests.

JUDGMENT

Vipin Sanghi, J. (Oral Judgment)

CM APPL. 12818/2021 (for exemption)

1. Exemption allowed, subject to all just exceptions.

2. The application stands disposed of.

FAO(OS) 13/2021 & CM APPL. 12816/2021 (for condonation of delay of 111 days in filing)

3. By the aforesaid application (CM APPL. 12816/2021), the appellant/Registrar Cooperative Society (RCS) seeks condonation of 111 days' delay in filing the present appeal. We have heard Mr. Munjal, learned senior counsel appearing for the appellant on merits and do not find any merit in the present appeal. Consequently, we do not consider it necessary to go into the justification provided by the RCS for the delay in filing the appeal.

4. The present appeal is directed against the order dated 03.11.2020 passed by the learned Single Judge in CS (OS) 308/2018 titled Deepak Tyagi and Ors. Vs. Pragya Cooperative Group Housing Limited & Anr. and the IA 7176/2020 filed therein. The background in which the impugned order came to be passed is that the plaintiffs, arrayed as respondent nos.1 to 6 in the present appeal, filed the aforesaid suit to seek refund of Rs.1,60,12,306/- alongwith interest from the defendant no.1-Pragya Cooperative Group Housing Society Limited, which is arrayed as respondent no.7 in the present appeal.

5. The plaintiffs in the suit had deposited varying amounts with the respondent/society towards allotment of flats constructed by the society. The particulars of the amounts deposited by each of them have been set out in the impugned order itself. It appears that, thereafter, the RCS raised objections to grant of membership to the plaintiffs in the society and eventually held that they were not entitled to be enrolled as members of the said cooperative society. This issue was finally decided against the plaintiffs by the Supreme Court. Consequently, each of the respondents/plaintiffs became entitled to receive refund of the amounts deposited by them with the respondent/society. Since the amounts were not refunded, they preferred the aforesaid suit collectively to seek refund of amounts deposited by them, alongwith interest applicable thereon.

6. Before the learned Single Judge, the respondent/society really had no defence. They only expressed their inability to refund the amount since they did not have sufficient funds to satisfy the claims of the plaintiffs. It was then that the respondent/society suggested that the 6 vacant flats lying unallotted could be publicly auctioned and the amounts realised from the said auction could be utilised to meet their liabilities towards the plaintiffs. The 6 flats which the respondent/Society offered for public auction were the following:

7. Pursuant to the said offer made by the respondent/society, various steps were taken from time to time, in pursuance of the orders passed by the Court. In the impugned order itself, the learned Single Judge has taken note of the earlier orders passed in the suit proceedings. The order dated 19.12.2018 reproduced in the impugned order reads as follows:

"1. This is a suit for recovery filed by six plaintiffs who are seeking refund of Rs.1,60,12,306/- along with interest thereon from defendant No. 1 Pragya Cooperative Group Housing Society Limited.

2. The President and Secretary of defendant No. 1, Pragya Cooperative Group Housing Society Limited are present in Court and submit, without prejudice to their rights and contentions, that they have no objection to the refund of the money if the Society is permitted to sell these six flats which were to