1. Challenge to cancellation of membership of a housing cooperative society member on ground of spouse owning property. (Para 2 , 3 , 4 )
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2026 Supreme(Online)(Del) 16828
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Vikas Mahajan, JJ
S.P. Parashar – Appellant
Versus
Registrar Cooperative Societies – Respondent
W.P.(C) 6435/2016
Advocates:
For the Appellants/Petitioners: Rajiv Nanda, Manish Kumar, Vikkey, Loveleen Kaithwas
For the Respondents: Rachita Garg, Manika Tripathy, Aman Kumar, S. K. Sharma
For the Appellants/Petitioners: Rajiv Nanda, Manish Kumar, Vikkey, Loveleen Kaithwas
For the Respondents: Rachita Garg, Manika Tripathy, Aman Kumar, S. K. Sharma
Disqualification under Rule 25(1)(c)(i) of the DCS Rules, 1973, is attracted only if a member owns property "Benami" in the name of a spouse or child; genuine ownership by a spouse using their own independent funds does not disqualify the member.
Headnote:(A) Cooperative Societies - Membership Disqualification - Rule 25 of DCS Rules, 1973 - Ownership of a residential house by a spouse in her own right and through her own independent funds does not attract disqualification; the rule is intended to prevent members from holding properties "Benami" in the name of a spouse or dependent children. (Para 29, 33)
(B) Administrative Law - Order of Financial Commissioner - An order upholding the cancellation of membership that ignores settled legal precedents regarding the independent ownership of property by a spouse is unsustainable and liable to be set aside. (Para 34)
(C) Property Law - Allotment Cancellation - Where the primary order of the Registrar of Cooperative Societies is found to be unsustainable, the consequential order of cancellation of allotment by the DDA based on such order also loses effect and must be set aside. (Para 41)
Issues: Whether the membership of Dr. Jitender Rai was validly cancelled under Rule 25 of the DCS Rules, 1973, and whether the Petitioner is entitled to a No Objection Certificate for the allotment of the flat.
Legal Category Hierarchy
Table of Contents
2. Petitioner argued no disqualification as spouse owned property independently; Society contended disqualification was valid. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 )
3. Rule 25 disqualification requires benami ownership; genuine independent ownership by spouse does not trigger it. Financial commissioner erred. (Para 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 )
4. Rule 25(1)(c)(i) disqualification applies only where property is held benami; not where spouse owns property from own funds. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 )
5. Impugned orders set aside; Society directed to issue NOC; RCS and DDA to process allotment and conversion. (Para 43 , 44 , 45 , 46 )
6. What is the scope of disqualification under Rule 25(1)(c)(i) of the Delhi Co-operative Societies Rules, 1973?
Disqualification applies only where the member owns property benami in spouse's name; not where spouse owns property from own funds. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 )
7. Can an executing court refuse to execute a decree on grounds of it being per incuriam?
No, an executing court cannot refuse execution because it considers the decree incorrect; only a void or nullity decree can be challenged. (Para 12 )
8. What is the effect of a stay order on subsequent actions taken by authorities?
Actions taken during a stay order, such as cancellation of allotment, are unsustainable if the underlying order is later set aside. (Para 35 , 41 )
9. Does a property transaction by GPA and agreement to sell before a Supreme Court ruling remain valid?
Such transactions prior to the ruling in Suraj Lamp may be considered valid and not automatically bad. (Para 19 , 20 )
JUDGMENT
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. The present writ petition has been filed by Dr. S.P. Parashar, wife of Dr. C. D. Parashar, seeking the following reliefs:-
“a) Issue appropriate writ and directions quashing setting aside the impugned order dated 18.11.2010, passed by Ld Financial commissioner Delhi, in Case No 322/2001-CA.
b) Issue appropriate writ and directions to hold, that cancellation of membership of Respondent no. 3 by order dated 19-11-2001, was illegal and bad.
c) Pass any other order or orders or writs or directions which are necessary in the facts of the case and
d) Allow the present Petition with costs.”
Factual Background
3. The background of this case is that sometime in 1995 the Respondent No. 3 - Dr Jitender Rai had applied for the membership of Suraksha Sadhan CGHS Limited, also known as Krishna Apartments, (hereinafter “the Society”). At the initial stage, Dr. Jitender Rai was given a share certificate dated 10th November 1995, bearing serial number SS/024, and thereafter Flat No. 210 in the Society was allotted to him on 3rd April 1999.
4. After the allotment, Dr. Jitender Rai was issued a Show Cause Notice by the Registrar of Cooperative Societies (hereinafter “RCS”) on 19th November 1999. The allegation in the said notice was that the allotment to Dr. Jitender Rai was liable to be cancelled under Rule 25 of the Delhi Co- operative Rules, 1973 (hereinafter “DCS Rules, 1973”), on the ground that the spouse of Dr Jitender Rai already owned a property in Delhi bearing A-1/35, Panchshilla Enclave, New Delhi.
5. The said show cause notice was replied to by Dr. Jitender Rai and the stand taken by him was that he had not incurred any disqualification as his wife had obtained the said property in Panchshilla Enclave, in her own right and with her own funds, as she was working as a nursing officer with the Director General Health Services, Govt. of India. On the other hand, Dr. Jitender Rai himself had enrolled as a member of the Society in his own right and had paid all the dues to the Society from his own funds. Thus, the stand of Dr. Jitender Rai was that the property of his wife at Panchshilla was not a benami property and was a property purchased by his wife from her own earnings. In support thereof, certain documents were also submitted by Dr.Jitender Rai.
6. The RCS, however, vide order dated 19th November, 2001, cancelled the membership of Dr. Jitender Rai on various grounds. The said order of the RCS was challenged before the Financial Commissioner. Initially, the Financial Commissioner had stayed the impugned order of the RCS on 22nd January, 2002. However, the Society appears to have written a letter dated 21st January, 2002 to the DDA informing the DDA of the order of RCS dated 19th November, 2001 cancelling the membership of Dr. Jitender Rai. Pursuant thereto, the DDA had cancelled the allotment of flat to Dr. Jitender Rai on 11th April, 2002. This cancellation was, however, not in the knowledge of the Petitioner or Dr. Jitender Rai at the relevant point in time.
7. During the pendency of the appeal before the Financial Commissioner, Dr. Jitender Rai sold the subject flat in the Society to Dr. C.D. Parashar who in turn sold it to his wife - Dr. S.P. Parashar i.e., the Petitioner herein. The documents which were executed in favour of the Petitioner were General Power of Attorney, Special Power of Attorney, Will, and an Agreement to Sell. It is stated that the Petitioner was not aware of the letter issued by the Society to the DDA, at the time when the flat was purchased.
8. The appeal was finally decided by the Financial Commissioner almost 8 years later and vide order dated 18th November, 2010, the Financial Commissioner upheld the order passed by the RCS cancelling the membership of Dr. Jitender Rai.
9. Thereafter, certain execution proceedings were filed by the Society seeking to give effect to the cancellation of membership. In the said execut
