n No 340 of 1972
Under article 32 of the Constitution of India
PH Parekh and Miss Manju Jetlcy for the petitioners in WP 34072 excepting petitioner No 59 and for petition ers in WP 1526 73
Petitioner No 59 in WP No 34072 in person
Yogeshwar Prasad SK Bagga Mrs section Bagga and Miss Yesh Bagga for the petitioner in WP No 28674
Niren De Attorney General in writ petition 340 Sardar Bahadur Saharya and Vishnu Bahadur Saharya for respondents Nos 1 3 4 5 and 15 in WP 34072 and respondents in all the WPs
KJ John for Ms J B Dadachanji  Co for RR 2 6 8 10 and 12 in WP 340  1526 and RR 6 8 9 11 and 12 in WP 28674
SK Mehta KR Nagaraja and PN Puri for RR 13 178 in WP 152673
The Judgment of the Court was delivered by RAY CJ
This Court on 29 August 1974 appointed Shri Debabrata Mookerjee Chairman to convene fix the date and hold the meeting of New Friends Cooperative House Build ing Society Ltd referred to as the Society in accordance with the provisions of the Delhi Co operative Societies Act 1972
This meeting was direct 374 ed to be held for the purpose of electing the members of the New Managing Committee The Chairman was directed to look into each and every disputed question of membership
The Chairman was further directed to decide whether the persons had been rightly or wrongly declared to be defaulters
The order further directed that if the Chairman came to the conclusion that the person had been wrongly declared to be a defaulter the Chairman would include him or her in the list of members
The Chairman was also asked to give effect to all orders of this Court already made in regard to persons who were declared defaulters and who according to orders of this Court on payment of moneys are not and cannot be treat ed defaulters
The Chairman was asked to go into cases where money had been sent and not accepted
If the Chairman came to the conclusion that money had been wrongly not accepted the Chairman would decide the same in accordance with Rules and Bye laws of the Society
There are further details in the order dated 29 August 1974
In the order dated 29 August 1974 Brij Mohan Malhotra was given liberty to adduce proof before the Chairman that the money was tendered Within time
If the Chairman came to the conclusion that it was tendered in time he would decide in accordance with Rules and Bye laws of the Society
The Chairman was entitled to scrutinise whether any person had been either illegally brought in as a member or illegally removed having regard to the rules bye laws and regulations of the Society
Inder Bir Kaur alleged that she had been illegally removed from membership
The Chairman was directed to go into the question
The order was made in two writ petitions No 340 of 1972 and 1526 of 1973 and in a number of miscellaneous applica tions
On 6 July 1971 the Lt Governor passed an award direct ing the Society to pay Rs22 lakhs to the Delhi Administra tion
On 9 July 1971 the Lt Governor by a notification removed the elected Managing Committee and appointed a nominated  Managing Committee under Rule 56 of the Rules made under the Bombay Cooperative Societies Act 1925 here inafter referred to as the Bombay Act which applied to Delhi
The term of the Managing Committee was for one year
On 23 October 1971 the nominated Managing Committee passed a resolution to make the award rule of the Court
On 18 December 1971 the nominated Managing Committee passed a resolution for having direct sub leases
On 22 January 1972 the nominated Managing Committee called for more funds
On 5 July 1972 the Lt Governor issued second notification extending the term of the nominated Managing Committee by two years
The Society was the subject matter of two writ peti tions
287 members of the Society filed writ petition No 340 of 1972 hereinafter referred to Raj Rani s petition
The members challenged 375 the vires of Rule 56 of the Society on the ground that the rulewas ultra rites section 71 of the Bombay Act and fur ther that the rule was bad on account of excessive delega tion
The petitioners contended that action under Rule 56 could not
be taken without complying with the provisions of section 46A of the Bombay Act which was applicable to
Delhi at the relevant time
The petitioners also challenged some notifications on the ground that the Lt Governor having exercised his powers once could not extend the term In short it was said that the power of the Lt Governor was exhausted
The other challenges were that the notifications were not speaking order and were made malafide
The broad challenge in the petition was against the extension of term of the Managing Committee
On 29 August 1972 Rule Nisi was issued
On 30 April 1973 the nominated Chairman of the Managing Committee issued a circular asking the members of the Socie ty to pay certain amount
On 6 July 1973 this Court restrained the Society and its Chairman from declaring any member a defaulter On 13 August 1973 this Court directed that all the interim orders passed in the writ petition should be confined to the petitioners in Raj Rani s peti tion
On 16 August 1973 KV Johar filed a writ petition in a representative capacity under Order I Rule 8 of the Code of Civil Procedure
This is writ petition No
1526 of 1973 hereinafter referred to as Johar s petition
On 20 August 1973 this Court issued Rule Nisi in Johar s petition
On 17 August 1973 the nominated Managing Committee declared 321 members as defaulters
This Court on 21 Sep tember 1973 restrained the Society from taking any steps in pursuance of the resolution dated 17 August 1973 against the petitioners and all other members of the Society
On 29 November 1973 respondent No 6 filed an applica tion in Johar s petition for vacating the stay order granted on 21 September 1973
An application for vacating the stay order granted on 6 July 1973 in Raj Rani s petition was not pursued
This Court vacated the stay granted on 21 Septem ber 1973 in Johar s petition and granted a fortnight s time to make the requisite payment
On 6 January 1974 the nominated Managing Committee declared 39 members as defaulters for non payment of dues 42 members as defaulters for not submitting the affidavits
This was one of the controversies which formed the subject mattter of the enquiry made by the Chairman
On 25 January 1974 the nominated Managing Committee decided to enrol 60 new members
On 26 January 1974 a confidential letter was addressed by respondent No 6 to the Lt Governor seeking his approval to the enrolment of 60 new members and allotment of plots to them
On the same day the Lt Governor addressed a letter to respondent No 6 giving his approval
The enrolment of 8 1546SCI76 376 new members on 25 January 1974 the approval of the Lt Governor on 26 January 1974 and the allotment of plots to those 60 new members formed a big controversy which was also enquired into by the Chairman
Two Civil Miscellaneous Petitions No 1683 and 1072 of 1974 challenging the declaration of defaulters and the enrolment of new members were filed in this Court in February 1974
CMPNo1683 of 1974 is in Raj Rani s petition and CMPNo
1072 of 1974 is in Johar s petition
This Court on 29 March 1974 directed that all the papers including resolutions original applications original allotments should be produced in this Court on 4 April 1974
This Court also restrained the Managing Committee by an injunc tion from talking any steps in any manner
On 4 April 197 4 this Court passed directions in respect of persons who had made part payments within the time prescribed or even beyond the time prescribed not to be treated as defaulters
This Court mentioned in its order that the allotment of plots to 60 new members who were characterised by the petitioners as very important persons appeared to have been made in undue haste and the persons in the Waiting list were not considered and that no notice was given to persons inviting application
This Court directed that the said list of 60 new members had to await final adjudication by
this Court
This Court also directed that in case of 60 allot tees no further steps should be taken
This Court directed that the case of 24 defaulters would be considered if it came to the conclusion that the allotment in favour of 60 new members would be treated as defaulters
In the order dated 4 April 1974 petitioners No 60 46 216 171 and 165 in Raj Rani s petition who paid in part after due date were not to be treated as defaulters and they were given four weeks time to pay the balance
It was said that if they failed to pay the balance within the time granted they would be treated as defaulters
Petitioners No 1118 43 and 287 in Raj Rani s petition were stated to have paid in full but after the due date
They were not to be treated as defaulters
It was also said that if they had not paid the full amount they were also given four weeks time for paying the balanceif any
If they did not pay the balance within the time granted they would be treated as defaulters
In Johar s petition section Diwan Virendra Singh Dalip Singh and Hari Singh were stated to have made payments in part beyond time
Iqbal Khanna and H Bhatia were stated to have made payments in part within time
They were all given four weeks time from the date of the order and in default of payment within the time they would be treated so defaulters
Ten other persons in Raj Rani s petition and 14 persons in Johar s petition were said not to have paid within time
A list of 31 sons was handed up to this Court by the petitioners
These 31 persons were alleged to have been admitted as members and to have been allotted plots
It was contended that this allotment is irregular
These allotments were made on 26 January 1974 to which reference has already been made
It was 377 said that the list of 31 persons would await final adjudica tion
Ten defaulters in Raj Rani s petition and 14 de faulters in Johar s petition aggregating 24 defaulters were to be considered at the time of final adjudication
It was said that if the allotment in respect of 31 per  sons could not be allowed to stand then the cases of these 24 persons would be considered
In this back ground on 29 August 1974 when the two writ petitions filed by Raj Rani and KV Johar came up for heating this Court appointed Shri Debabrata Mookerjee as Chairman of the Society
It may be stated here that some time in 1975 some one started a suit against the Chairman to stop the enquiry by him
The matter was brought to the notice of this Court
Some malicious and baseless allegations were made against the Chairman
Under these circumstances this Court direct ed notice to the respondent who filed the suit to show cause why he should not be committed for contempt
The Chairman was in the meantime asked to continue and he was directed to look into each and every matter as mentioned in the earlier orders
The Chairman between 17 March 1975 and 5 August 1975 restored the membership of the alleged defaulters
On 26 April 1976 tentative voters list was published
On 14 May 1976 the Chairman informed the parties that election would be held on 29 August 1976
On 12 July 1976 the Chairman informed the parties that the election would be held on 29 August 1976 at Mavalankar Hall
On 27 July 1976 the Chairman declared that of the 60 new members who had been described as very important persons 21 did not have applications for membership and 38 were not legally admitted members and could not be included in the list
The Chair man said that the allotment of plots in their favour could not be upheld
On 28 July 1976 the list of members was published
On 17 August 1976 there was scrutiny of the ballot papers
On 24 August 1976 11 persons out of the 60 persons who were enrolled members on 25 January 1974 and allotted plots on 26 January 1974 filed two Civil Miscellaneous praying for an order restraining the Chairman from holding the election on 29 August 1976 These applications were held without serving any party to the proceedings contrary to the rules and practice of this Court
On 25 August 1976 coun sel for those petitioners mentioned the applications before the Court presided over by Khanna J asking that the applications filed might be heard
It was also mentioned without informing the parties
On 27 August 1976 this Court further adjourned the applications
On 29 August 1976 the meeting was held and voting took place at Mavalankar Hall
On 23 September 1976 the Chairman submitted his report and give copies to the parties
On 15 October 1976 11 persons who 378 had made the two applications for restraining of holding of the election filed an application for adjournment of the case for two months
This Court cannot help observing two features
One is that an attempt was made some time in the year 1975 to restrain the Chairman from proceeding with the enquiry by filing a suit against him and making baseless allegations
It is only because this Court took immediate notice of the matter that the frivolous suit which had been filed in abuse of process of court was put an end to
The second is that on the eve of the election another attempt was made to
restrain the Chairman from holding the election
These facts
along with the attempt on the part of those 11 peti tioners to keep the matter adjourned for two months indicate the persistent attitude on the part of some of those persons to mark time for some oblique purposes
In view of the importance of issues involved and the gravity of the situation where interest of ordinary citizens was sacrificed to meet the interest of persons of importance and influence that this Court took the aforesaid steps in order to put an end to the litigation and the controversies It was to be kept in the forefront that the Society is not yet the lessee of the Government in respect of the land which is to be allotted to the members
In Volume II in Raj Rani s petition No 340 of 1972 appears the printed memorandum agreement to be entered into between the Society and the President of India in respect of land which will be allotted to the members of the Society On 3 August 1967 the Deputy Secretary Delhi Administration wrote to the Secretary of the Society inter alia as follows I am desired to make it clear that the list of members submitted with your letter  has been treated as final and no change in that list can be made without prior written permission of the Delhi Administration The printed memorandum of agreement has three recitals
One of the racitals is that whereas the Society has depos ited with the Chief Commissioner the sum of Rs41 62 45661 and has further agreed to deposit with the Chief Commissioner the additional sum or sums as hereinafter provided being the amounts agreed to be paid by the Society to the President by way of premium for the grant to the Society of the lease hereinafter mentioned which amounts pending the grant of the said lease are to be a security to the President for due performance by the Society of the terms of the Agreement
It is agreed between the parties inter alia as follows 1
The President hereby grants f0r a period of three years commencing from 13 February 1973 a licence to the Society to enter upon the said land only for the purposes of making surveys and taking measurements and levels for preparing a lay out plan
Upon the completion of the development of the land in accordance with the provisions contained herein and to the satisfaction of the Chief Commissioner and issue by him of a certificate to that effect 379 and provided that the other conditions of the Agreement have been duly observed the President will in considera tion of the expenses incurred by the Society on the develop ment of the land and the payment of the premium and of the yearly rent as herein provided and of the covenants on the part of the Society to becontained in the lease grant to the Society and the Society shall accept a lease of such of the residential plots as may be determined by the Chief Commissioner in his absolute discretion
XVa
After the execution and registration of the lease the Society shall sub lease within such time and on such premium and yearly rent as may be fixed by the President one residential plot to each of its members who or whose wifehusband or any of hisher dependent relatives including unmarried children does not own in full or in part on the free hold or lease hold basis any residential plot or house in the urban areas of Delhi New Delhi or Delhi Can tonment and who may be approved by the Chief Commissioner
Reference to the Agreement is necessary to show that the Society is not yet lessee of the Government in respect of the land
This is a mere agreement for the grant to the Society of the lease
The Government refused to grant lease
Thereafter the matter was referred to the arbi tration of the Lt Governor
The Lt Governor made an award directing the Society to pay Rs2245742 as the balance amount representing the cost of land
In 1972 a supplementary agreement was made between the President of India and the Society
One of the recitals in that agreement mentions that the Society has not completed the development of the land and the members of the Managing Committee resolved that the Lt Governor of Delhi be re quested to allow the members to pay their individual dues to the Administration to evacute their sub teases
This recital indicates that there was an attempt on the part of individual members to pay dues to the Society as well as to the Government
It can therefore be seen that membership of the Society and the allotment of lands are different matters
One of the main contentions before the Chairman was in regard to membership of 60 persons
These 60 persons were admitted to membership on 25 January 1974
The Lt Governor approved of their membership on 26 January 1974
The Chairman found that of these 60 persons 21 had at one time or another withdrawn their membership
10 out of those 21 had either never applied or never paid the requi site membership fee
The result according to the Chair man was that the cases of 39 persons were to be consid ered
The Chairman noticed that many of these 60 persons were highly placed Government officials and friends and relations of persons prominent in public life Another allegation was that many of them happened to be close relations or friends and members of the nominated Managing Committee
 At the meeting held on 27 July 1976 the Chairman re ferred to Rules 24 and 30 of the 1973 Delhi Cooperative Societies Rules
These 380 rules were under the Delhi Co operative Societies Rules 1972 which replaced the Bombay Act 1925 in relation to the Union Territory
These rules relate to conditions to be complied with for admission to membership
Bye law 5 of the Society Bye laws was also referred to by the Chairman
Broadly stated Rule 24 requires a person to apply in writing in the form laid down by the Society for membership
His application is to be approved by the Committee of the Society
He has to fulfil other conditions laid down in the Act the Rules and the Bye laws
Rule 25 of the Delhi Co operative Societies Rules 1973 provides toter alia that no person shall be eligible for admission as member of a co operative society if in the case of membership of a housing society 1  he owns a residential house or a plot of land for the construction of a residential house in any of the approved or up approved colonies or other localities in the Union Territory of Delhi in his own name or in the name of his spouse or any of his dependent children on lease hold or free hold basis 2 he deals in purchase or sale of immovable property either as principal or as agent in the Union Territory of Delhi or 3 he or his spouse or any of his dependent children is a member of any other housing society except otherwise permitted by the Registrar
Rule 252 provides that if a member becomes or has already become subject to any disqualifications specified in sub rule 1 he shall be deemed to have ceased to be a member from the date when the disqualifications were incurred
Rule 30 deals with the disposal of application for admission of members
The rule provides that on receipt of an application for membership the co operative society shall enter particulars of the application in the register of applications in the form mentioned therein
The co opera tive society shall dispose of an application received for admission as member as early as possible and in no case later than the expiration of a period of one month from the date of receipt of the application by the Society
In case of refusal to admit such society shall communicate its decision together with reasons thereof
The appeal to the Registrar lies against the order for refusal to admit a member
An important feature in rule 30 is the date of receipt of application for membership because the applica tion is to be dealt with within one month
Rule 304 provides that the person whose membership has been approved by the Managing Committee of a co operative society shall deposit the membership fee and the amount of the qualify ing shares necessary to become a member within 14 days of the passing of the resolution of the Managing Committee approving the membership of the person concerned
Bye law 5 inter alia provides that every person seek ing membership of the Society shah sign a declaration to the effect that he or his wife she or her husband or any of hisher dependents does not own a dwelling house or plot in Delhi and that heshe is not a member of any other coopera tive house building society
381 Judged by these rules and considering the rival conten tions of the parties the Chairman found that of the 39 cases there was only one case of NK Mukherjee M No 1526 which fulfilled the requirements of the rules and the bye laws and the Chairman in his report declared him as having been validly accepted as member
Out of those 39 persons 20 applications did not bear any date
The date of an applica tion the prescription of time for deposit of the membership fee and the amount of qualifying share and the filing of the requisite declaration arc formalities which could not be disregarded
The Chairman rightly came to the conclusion that out of 39 persons except NK Mukherjee the other 38 were not legally admitted to the membership and therefore they could not be treated as members
The Chairman in paragraphs 9 to 16 of the Report consid ered the cases of several persons who had been declared defaulters
He rightly came to the conclusion that 108 persons mentioned in Annexure C  should be restored to membership
The Chairman next considered whether there should be a waiting list
A list of 102 persons described as the wait ing list was forwarded and endorsed by the officers of the Delhi Administration
The Chairman came to the conclusion that of the 102 persons on the list only a few prosecuted their claims before the Chairman and the rest appeared to him to be no more interested in the membership of the Socie ty
In an annexure marked G  the Chairman rightly included in the waiting list the names of such persons who could be considered
The Chairman said that 38 persons whose membership was cancelled by him at the meeting held on 27 July 1976 could apply afresh so that their applications could be considered
The Chairman said that 24 persons made applications for membership
The Chairman rightly said that it would be fair to leave the consideration of the applications of these 24 persons to the new Managing Committee and that their names should be kept in a waiting list
The Chairman next found that the Society had received from 4 persons deposits towards the price of the land more than a decade ago but took no steps to return the moneys or to admit them to the benefit of membership
Again there were 4 other persons whose land had been acquired by the Delhi Administration
There was an agreement which required the Society to offer membership to these persons upon their fulfilling the conditions of membership
The Chairman found that those 4 persons whose land had been acquired had made applications
The Chairman tightly came to the conclu sion that these 8 persons namely 4 from whom moneys had been received and the other 4 whose land had been acquired should be accepted as members
Out of 38 persons whose membership was cancelled by the Chairman on 27 July 11 applied to this Court in CMP No 2065 of 1976 for an order that admission of 124 members mentioned in 382 Annexure C  to the petition is illegal and for further declaration of revocation of membership of 38 members as mentioned in Annexure B  to the said petition
These petitioners also asked for an order directing the Chairman not to proceed with the meeting of the Society and the holding of elections on 29 August 1976
These 11 persons also made applications CMPs
No 8485 and 8486 for filing objections to the report of the Chair man
They wanted two months to file objections
It should be stated here that 11 applicants wanted to prevent the holding of the meeting and the election for the purpose of prolonging litigation
This Court rightly did not prevent the holding of the meeting and the election
The report of the Chairman shows that the meeting as well as the election was lawfully and validly held
These 11 persons were given full opportunity to make their submissions by way of objection to the report
Coun sel appeared and made their submissions
These 11 persons submitted that no relief can be sought by the petitioners in the writ petitions against the Society and that Article 19 cannot now be invoked for the enforce ment of rights
Their further submissions were these
On 6 January 1974 39 persons were declared defaulters by the Managing Committee for non compliance with the order of this Court passed on 11 December 1973
One of those 39 defaulters made an application to this Court on 9 February 1974 for condonation of delay and for restoration of his membership
The application was dismissed on 25 February 1974
On 4 April 1974 this Court granted four weeks time to 15 persons out of the 39 declared defaulters and there fore the default of 24 persons was confirmed
The Chairman re considered the cases of 24 defaulters including the one whose application was dismissed
These 11 persons submitted that their membership and allotment should have been restored
The Chairman was also in error in considering the cases of 8 persons because records were not available
It is significant that out of 1100 members and the several parties to the writ petitions none has taken objec tion to the report of the Chairman
The only persons who objected are out of the 24 persons those membership and allotment on 26 January 1974 was cancelled
These 24 per sons have however been put by the Chairman in a waiting list
The membership as well as the allotment of plots to these 38 persons is rightly rejected by the Chairman
The Chairman based his finding on facts of tabulated statements prepared in the presence of counsel and parties in open public hearings
No challenge can be taken to the dates and facts
The Chairman rightly found that even if the date of the eligibility certificate is taken as the effective date of application the position cannot be otherwise
The Chairman rightly found that the records do not indicate that the payment was 383 made within 14 days of the date of resolution
The Chairman rightly found that the requirement of payment is not proved and there has not been substantial compliance
The conclu sion is correct and inescapable that the enrolment of 38 persons was not only rushed but was done with unseemly haste
It also appears from the report of the Chairman that persons the waiting list were not considered before these 38 persons were enrolled as members
Reference may be made to clause 7 of the Award of the Lt Governor which was made the rule of Court
The award is dated 6 July 1971
Clause 7 made it encumbent on the Society to act in ac cordance with the award
There were some persons who were treated by the new Managing Committee as defaulters and these 38 persons were taken by the new Managing Committee unlawfully as members
The Chairman in Annexure C  restored 108 persons to membership
These 108 persons had been declared defaulters by the nominated Managing Committee
This Court by order dated 29 August 1974 required the Chairman to look into each and every disputed question of membership and to decide as to whether a member has been rightly or wrongly declared a defaulter
The nominated Managing Committee on 6 January 1974 declared a number of persons to be defaulters
The declara tion of defaulters could not have been made except by the General Body with a special majority and with the approval of the Registrar
The nominated Managing Committee could not have functioned after 1 April 1973 in view of the provisions of section 92 read with section 32 of the Delhi Co operative Societies Act 1972
In view of the award of the Lt Governor dated 6 July 1971 the Committee had there after no jurisdiction to declare any member a defaulter
This Court by order dated 4 April 1974 observed that the case of 24 defaulters would be considered if it transpired that the list of new allottees could not be allowed to stand
The act of declaration of defaulters on 6 January 1974 cannot be dissociated from the enrolment of new allottees on 25 and 26 January 1974
The report of the Chairman in restoring 108 alleged defaulters to membership is just and correct
This Court by Order dated 29 August 1974 required the Chairman to look into each and every disputed question of membership and to decide whether a person has been tightly or wrongly declared a defaulter
The order further stated that if the Chairman came to the conclusion that the person has been declared to be a defaulter the Chairman will include him or her in the list of members
The report of the Chairman is lucid and direct to the point
The report noticed that there was widespread discontent as to the way in which the affairs of the Society were conducted
The report said Allegations of favouritism want of fairplay mal administration deliberate suppression of the rights of members were freely made against the nominated Managing Committee in 1971
The Chairman noticed that there was nothing to 384 choose between the old elected Committee which was super seded and the nominated Managing Committee which came to take its place
Letters were hardly replied to
En quiries were rarely attempted to
Cheques were hardly ever cashed in time
Sudden declarations of default were made without following the prescribed procedure laid down in the Act and the Rules
The nominated Managing Committee issued a circular dated 30 April 1973 demanding Rs6 per sq yard and threatened the members that in case they did not pay the said amount they would be declared defaulters
This circular is not a notice within the meaning of the bye laws of the Society and declaration of defaulters on the basis of the circular is illegal and contrary to bye laws of the Society
Further the said circular was despatched after the time for payment mentioned therein was over
No opportunity was given tog member as required by the mended bye laws to show cause why his right to a plot would not be forefeited for non payment of deposit
Figures of alleged dues were not mentioned in the circular in most of the case
In view of the award of the Lt Governor dated 6 July 1971 the nominated Managing Committee could not declare any member to be a defaulter
Further the order of this Court dated 6 July 1973 continued to be in force in so far as the petitioners in Raj Rani s petition are concerned
The declaration of defaulters from amongst the petitioners in Raj Rani s petition was unjustified
The action of the Managing Committee declaring defaulters was in bad faith because they wanted to confer benefits on other persons under the guise of declaration of defaulters
This Court in the order dated 4 April 1974 observed that the cases of 24 defaulters would be considered if it transpired that the list of allottees on 26 January 1974 could not be allowed to stand
The Chairman has rightly dealt with the cases of 24 defaulters in view of his right conclusion that the allotments on 26 January 1974 were bad
The Chairman considered the cases of 42 persons who had been declared defaulters
The Chairman rightly came to the conclusion that 30 persons had genuine grievances and he accepted them as members on their submitting fresh affida vits with a view to putting an end to all controversies whether they filed affidavits of not
R was admitted before the Chairman that all these persons had field their affidavits originally while seeking membership
The ques tion was whether they filed any fresh affidavits as required by the subsequent direction of the Delhi Development Author ity
Some of the members contended before the Chairman that they filed amended affidavits
Some members contended that in spite of their request to give the proforma of the amend ed affidavit the nominated Managing Committee did not give the proforma of the affidavit
Under these circumstances the Chairman rightly accepted the contentions of 30 out of the 42 persons
385 The Chairman rightly held that 4 persons whose money was lying with the Society should be made members
The Chairman also rightly held that 4 persons whose lands had been ac quired by the Society should be accepted as members
The Chairman in paragraph 37 of the report has indicated that the new Managing Committee should fix priorities in the order mentioned in sub paragraph a to e
These in sub paragraphs a to b belong to classes of members in whose favour there was specific allotment as early as the year 1957
Due communication was made to them about the specific allotment of plots
They were persons who had paid more than Rs17000
They were declared defaulters for non payment of Rs3000 or less by the nominated Managing Com mittee as late as the year 1974
The Chairman rightly put persons in sub paragraphs a and b in order of priority
Persons in sub paragraph c in paragraph 37 of the Chairman s report comprise those who were declared default ers round about the year 1962 63
The amounts paid by persons in sub paragraph c are less than the amounts paid by persons in sub paragraphs a and b
There was no specific allotment of plots in favour of persons mentioned in sub paragraph c
Persons in sub paragraph c there fore cannot claim priority over persons in sub paragraphs a and b
In sub paragraph c only one person objected regarding priority
The other 47 persons accepted their places in sub paragraph c
This also shows the justness of the report
Subject to the following directions the report of Mr D Mookerjee dated 23 September 1976 is accepted and con firmed
The Managing Committee of the New Friends Co opera tive Society Ltd hereinafter called the new Managing Committee elected at the meeting held on 29 August 1976 shall assume charge with effect from the date of this order
The new Managing Committee shall send to all persons referred to in sub paragraphs a to eof paragraph 37 of Mr Mookerjee s report through Mr Mookerjee a letter stating that membership fee and the amount of qualifying share necessary to become a member of the Society and also copies of this order as well as the appropriate forms of application for membership of the Society and of the affida vits to be sent by the applicants to the new Managing Com mittee within one month from the date of this order
Each person referred to in sub paragraphs a to e of paragraph 37 shall if he desires to have any plot allot ted to him apply for membership of the Society
All such applications for membership of the Society shall be sent to Mr Mookerjee within 30 days
from the date of receipt of the documents referred to in the next preceding paragraph hereof
If any application is not received by Mr Mooker jee within the said period or if the affidavit referred to in the next preceding paragraph is not enclosed with the application or if any application or affidavit be found by Mr Mookerjee to be 386 not in compliance with the form of the application and the affidavit sent to the applicant Mr Mookerjee shah reject such application
Such rejection by Mr Mookerjee shall be final
All applications for membership along with affida vits found by Mr Mookerjee to be in order will be for warded by Mr Mookerjee to the new Managing Committee upon the expiry of the said period of 30 days
Mr Mookerjee will make a list of the persons whose applications are so forwarded by him to the new Managing Committee
The new Managing Committee shall convene a meeting of the Committee within 30 days from the receipt of the appli cations along with the affidavits sent by Mr Mookerjee to the new Managing Committee as aforesaid and pass a resolu tion accepting all such applicants for membership as members of the Society
The new Managing Committee shall convey to Mr Moo kerjee its said resolution within 14 days of the passing of such resolution and shall send to Mr Mookerjee at least as many copies of the resolution as the number of persons who are admitted as members of the Society by virtue of that resolution
Mr Mookerjee will thereafter send a copy of the said resolution to each of the applicants Who is admit ted as a member of the Society by virtue of the said resolu tion
On receipt of the said communication from
Mr Mookerjee each person who has been admitted as member of the Society by virtue of the said resolution shall within 14 days from the receipt of the communication from Mr Mooker jee pay to Mr Mookerjee by Bank Draft drawn in favour of New Friends Co operative House Building Society Ltd an amount including the membership fee and the amount of quali fying share necessary to become a member of the Society
Mr Mookerjee will thereafter forward the Bank Drafts to the new Managing Committee
Regarding the allotment of plots the suggestions of Mr Mookerjee contained in sub paragraphs a and b of paragraph 37 of his report will be given effect to by the new Managing Committee subject to the availability of plots and subject also to each person referred to in the said two sub paragraphs and to whom any plot is allotted complying with the direction contained in the preceding paragraph 7 hereof and further subject to each such person paying his full share of the money payable to the Delhi Development Authority under the Supplementary Agreement entered into between the President of India and the Society on 1 Febru ary 1972 by a Bank Draft drawn in favour of the Delhi Development Authority
The allotment of plots among persons referred to in sub paragraphs aand b of paragraph 37 of Mr Mookerjee s report shall be in the order of priority mentioned there and already earmarked for them
If plots which are already earmarked for persons in subparagraphs a and b are not available then there will be allotments to those persons by draw of lots first among those in sub 387 paragraph c and thereafter among those in sub pargraph b
Mr Mookerjee will prepare a list of persons to whom plots are so allotted and send copies ofthe list of the new
Managing Committee andthe Delhi Development Authority and inform the persons to Whom such allotments are made
Each person referred to in the said
sub paragraphs
a and b of paragraph 37 and to whom any plot is allotted shall within b days from the receipt of the communication from Mr Mookerjee as referred to reparagraph 6 hereof enquire from the Delhi Development Authority as to the sum payable by him to the Delhi Development Authority as afore said and upon receipt of the reply from the Delhi Develop ment Authority pay the sum to the latter by a Bank Draft within 15 days from the date of the receipt of the reply
In default of such payment the allotment to him will stand cancelled
In the event of any such cancellation allotment may be made to the next person if any in this sub para graph
Thereafter if any plot or plots remain to be allotted the allotment or allotments shall strictly be in accordance with the order of priority laid down in paragraph 37 of Mr Mookerjee s report
Such allotments shall be made by Mr Mookerjee by means of draw of lots first among the persons referred to in sub paragraph c thereafter among those in sub paragraph d and thereafter among those in sub paragraph e of paragraph 37 of his report
Mr Moo kerjee will prepare a list of persons to whom the plots are so allotted and send copies of the list to the new Managing Committee and the Delhi Development Authority and inform the persons to whom such allotments are made
Any person referred to in sub paragraphs c d and e of Mr Moo kerjee s report who is allotted any plot shall within 14 days from the receipt of the communication from Mr Moo kerjee to the effect that a particular plot has been allot ted to him enquire from the Delhi Development Authority as to the sum payable by him to the Delhi Development Authority as aforesaid and upon receipt of the reply from the Delhi Development Authority pay the sum to the latter by a Bank Draft within 15 days from the date of the receipt of the reply
In default of such payment the allotment to him will stand cancelled
In the event of any such cancellation allotment may be made to next person if any in that subparagraph
Each allotment of plot referred to in this order shall be in accordance with the application of each appli cant for membership referred to in paragraph 3 hereof that is to say will not be entitled to any allotment of any land the area whereof is different from the area mentioned in his application form
If any person referred to in any of the sub para graphs of paragraph 37 of Mr Mookerjee s report has al ready paid any money to the Society and proves such payment to Mr Mookerjee the money so paid and proved shall be appropriated towards payment of the amounts mentioned in paragraphs No 7 8 mad 11 hereof
388 14
Upon allotment of land to any person mentioned in this Report each allottee shall pay to the Society a sum of Rs1000 within one month from the date of such allotment as and by way of costs relating to these proceedings
In default of payment of such sum the allotment to such person shall stand cancelled
In the event of any such default the procedure laid down in paragraph 10 and 11 hereof shall be followed
To sum up
In the event of any lucia default the allotment may be made to the next person if any in the sub paragraph group of the defaulting persons and thereafter to next sub paragraph group of persons
No lease shall be granted to any allottee until and unless all directions contained in this order are fully complied with by him
The Society shall pay to Mr Mookerjee a further sum of Rs45000 as his remuneration for the work done by him so far
The Society shall also pay Mr Mookerjee a further stun of Rs5000for the work to be done by him under this order and also such further sum or sums as he may intimate to the new Managing Committee as extra expenses including remuneration for his staff postage etc
for the work to be done under this order
Mr Mookerjee s Personal Assistant Mr Jain will be paid Rs300 per month
This order shall not apply to such members of the Socie ty who have already obtained leases from the President of India
This order will govern only the affairs of this Society and will not be a precedent for the affairs of any other co operative society
Some persons have deposited monies with the Registrar of this Court
The Registrar may hand over the money to the Society
Writ Petition No 340 of 1972 1526 of 1973 and 286 of 1974 and all proceedings in these writ petitions are dis posed of accordingly
All parties will pay and bear their own costs
PHP Petitions allowed


Summary:
On 6 7 1971 the Lt Governor of Delhi passed an award directing the New Friends Co operative House Building Socie ty Limited to pay Rs22 lacs to the Delhi Administration
On 9 7 1971 the Lt Governor by a notification removed the elected Managing Committee and appointed a nominated Manag ing Commitee under rule 56 of the Delhi Cooperative Socie ties Rules 1950 framed under the Bombay Cooperative Socie ties Act 1925 as applied to Delhi
The term of the Manag ing Committee was for one year
On 23 10 1971 the nominated Managing Committee passed a resolution to make the award of the Lt Governor a rule of the court
In December 1971 the nominated Managing Committee passed a resolution for having direct sub leases and in January 1972 called for more funds
In July 1972 the Lt Governor issued a second notification extending the term of the nominated Managing Committee by further two years
287 members of the Society filed writ petition No 340 of 1972 challenging the rites of rule 56 and challenging the action of the Lt Governor in superseding the elected Managing Committee and in extending the term of the nominat ed Managing Committee by a further period of 2 years
On 30 4 1973 the nominated Managing Committee issued a circu lar asking the members of the Society to pay certain amounts
On 6 7 1973 this Court restrained the Society and its Chairman from declaring any member a defaulter
On 13 8 1973 this Court directed that all the interim orders passed in the writ petition should be confined to the 287 petitioners
On 16 8 1973 KV Johar filed a writ petition in a representative capacity under Order 1 rule 8 of the CPC on behalf of all the members of the Society
On 17 8 1973 the nominated Managing Committee declared 321 members as defaulters
On 21 9 1973 this Court restrained the Society from taking any steps in pursuance of the said resolution
On an application made by respondent No 6 the stay granted in KV Johar s petition was vacated
However application for vacating the stay order in Raj Rani s petition was not pursued
On 6 1 1974 the nominated Managing Committee declared 39 members as defaulters for non payment of dues and 42 members as defaulters for not submitting the affidavits
On 25 1 1974 the nominated Managing Committee decided to enrol 60 new members
On 26 1 1974 a confidential letter was ad dressed by respondent No 6 to the Lt Governor seeking his approval to the enrolment of 60 new members and allotment of plots to them
On the same day the Lt Governor gave his approval
Two CM Ps were filed by the writ petitioners challenging the declaration of the members as defaulters and enrolment of 60 new member
This Court on 29 3 1971 di rected that all the papers including resolutions original applications and original allotments should be produced in the Court
This Court also restrained the nominated Manag ing Committee by an injunction from taking any steps in any manner
On 4 4 1974
this Court passed direction in respect of some members who were declared defaulters and who had made part payments either within the time prescribed or even beyond the time prescribed
This Court also mentioned that the allotment of plota to 60 new metalera who were cha racterised as very important persons appeared 372 to have been made in undue haste and the persons on the waiting list were not considered and that no notice was given to persons inviting applications
This Court directed that the list of 60 new members had to await final adjudica tionand also directed that no further steps should be taken in the case of those 60 allottees
The Court also directed that the cases of remaining 24 defaulters would be consid ered if it came to the conclusion that the allotment in favour of 60 new members could not be allowed to stand
Rule 24 of the Delhi Cooperative Societies Rules 1973 requires a person to apply for membership in writing in the form prescribed by the Society
His application is to be ap proved by the Managing Committee of the Society
He has to fulfil other conditions laid down in the Act the Rules and the Bye laws
Rule 25 provides that a person shall not be eligible for admission as a member if he owns a residential house or a plot of land for the construction of a residen tial house in Delhi
Rule 30 provides that on receipt of an application for membership the Cooperative Society shall enter particulars of the application in the register of applications in the form mentioned therein
It also re quires the Society to dispose of the application received as early as possible and in no case later than the expiration of a period of one month from the date of receipt of the application
Rule 30 further provides that the person whose membership has been approved by the Managing Committee of a Cooperative Society shall deposit the membership fee and the amount of qualifying shares necessary to become a member within 14 days of the passing of the resolution of the Managing Committee approving the membership of the person concerned
Bye law 5 provides that every person seeking membership of the Society shall sign a declaration to the effect that he or his wife or any of his dependants does not own a dwelling house or a plot in Delhi
When the writ petitions came up for final hearing along with the CMPs
on 29 8 1974 this Court appointed Shri Deb Brat Mukherjee as Chairman of the Society
The Chairman was asked to scrutinise whether any person had been either illegally brought in as a member or illegally removed having regard to the rules the bye laws and the regulations of the Society
The Chairman restored the membership of the alleged default ers and published a tentative voters  list
The Chairman declared that out of the 60 new allottees 21 did not have applications for membership and 38 were illegally admitted and could not be included in the voters  list
The chairman said that the allotment of plots in their favour could not be upheld
11 persons out of the 60 new allottees filed two CMPs
in August 1976 praying for an injunction restraining the chairman from holding elections
These applications were filed without serving any party to the proceedings contrary to the rules and practice of the court
On 23 9 1976 the Chairman submitted his report
Allowing the writ petitions HELD 1
The date of the application prescription of time for deposit of membership fee and the amount of qualifying shares and the filing of the requisite declaration are formalities which cannot be disregarded
The Chairman rightly came to the conclusion that the new allottees could not be treated as members
The new allottees were taken in without considering the persons on the waiting list
It was incumbent on the Society to act in accordance with clause 7 of the Lt Governor s award
The Managing Committee took 38 persons as members unlawfully
The declaration of default ers could not have been made except by the General Body with a special majority and with the approval of the Regis trar
The nominated Managing Committee could not have functioned after 1st April 1973 in view of the provisions of section 92 read with section 32 of the Delhi Cooperative Societies Act 1972
In view of the award of the Lt Governor dated 6 7 1971 the Committee had no jurisdiction to declare any member a defaulter
The act of declaration of defaulters of 6 1 1974 cannot be dis associated from the enrolment of new allottees on 25th and 26th January 1974
The report of the chairman in restoring membership to the 108 alleged defaulters is just and correct
The circular dated 30 4 1973 issued by the nominated Managing Committee is not a notice within the meaning of 373 the bye laws of the Society and the declaration of default ers on the basis of the circular is illegal and contrary to the bye laws of the Society
The circular was despatched after the time for payment mentioned therein was over
No opportunity was given to a member as required by the amended bye laws to show cause why his right to a plot would not be forfeited
The order of this court dated 6 7 1973 continued to be in force in so far as the petitionrs in Raj Rani s petition are concerned
Therefore the declaration of defaulters from amongst the petitioners in Raj Rani s peti tion was unjustified
The action of the nominated Managing Committee declaring defaulters was in bad faith because they wanted to confer benefits on other persons in the guise of declaration of defaulters
381 A B D E H The Chairman rightly came to the conclusion that out of the 42 declarations of defaulters for not submitting affidavit 30 members had genuine grievances
384 F The Chairman rightly held that the 4 persons whose money was lying with the Society should be made members
The Chairman also rightly held that the 4 persons whose lands had been acquired by the Society should be accepted as members 385A B The priority fixed by the Chairmaan about allotment of plots is just
385 C The Court with a view to ensuring that the persons mentioned in the Chairman s report should get the reliefs mentioned in the report held that those persons should make fresh applications with affidavits through the Chairman and the allotment of plots should be made in accordance with the priority laid down by the Chairman