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HIGH COURT OF DELHI
Date of Decision: 22.04.2025 MAHENDRA KUMAR SEHGAL AND ORS .....Petitioners
Through: Mr. Satyajit Sarna, Mr. S. Juneja and
Mr. Debarchan De, Advs.
WELFARE ASSOCIATION AND ANR & ANR. .....Respondents
Through: Mr. Shirin Khajuria, Sr. Adv., Mr. Udian Sharma, Ms. Akshaya Jeba
Kumar, Ms. Swati Tiwari, Mr. Manav Mitra and Mr. Gopal, Advs.
JUDGMENT
1. The present petition has been filed by the petitioners being aggrieved by the amended Memorandum of Greater Kailash-II Resident Welfare Association (hereinafter ‘the amended MoA’) and the ‘Guidelines for Builders’ (hereinafter ‘the Builders Guidelines’) sought to be framed and enforced by the Greater Kailash -II Resident Welfare Association (GK-II RWA / respondent no.1).
2. In the present case, the petitioners are the residents at Greater Kailash- II, New Delhi and members in the respondent no.1 association which is registered under the Societies Registration Act, 1860.
3. Prior to 30.03.2025, the functioning of the respondent no.1 association was governed by the Constitution of the respondent no.1 which has been appended as Annexure P-2 to the present petition (hereinafter ‘the erstwhile Constitution’).
4. In terms of Rule 5 of the erstwhile Constitution, the ‘Executive Committee’ of the respondent no.1 was entrusted with the power to manage the affairs of the respondent no.1. The said clause reads as under – “5. Executive Committee: The management of the affairs of the Association shall be vested in the Execution Committee which shall consist of the President, two Vice- Presidents, the General Secretary, the Jt. General Secretary, the four Secretaries (one from each Block), the treasurer and fourteen other members of the four Blocks, viz: 5 from Block E 4 from Block S 3 from Block M 2 from Block W The office bearers, viz, the President, the two Vice-Presidents, the General Secretary, the Jt. General Secretary, the four Secretaries from the four Blocks and the Treasurer and the members shall be elected atleast a week before the Annual General meeting every two years. Any vacancy occurring during the course of two years shall be filled up by the Executive Committee itself. No member of the Executive Committee shall continue in the committee for more than two terms viz, 4 years. Should, however, a member wish to contest for a post different from the earlier one even after two terms, he/she would be free to do so.”
5. Pursuant to Rule 24 of the erstwhile Constitution, the authority to make amendments in the rules thereunder was conferred on the General Body and the same could only be carried out in terms of Rule 24. The same reads as under –
shall have to be given in writing at least 21 days before the meeting.”
6. On 31.03.2025, a circular bearing reference no. GKIIWA-2024-26/07 came to be issued by the respondent no.1 stating that pursuant to the decisions taken in the ‘Extraordinary General Meeting’ held on 30.03.2025, the motions regarding amendment of the erstwhile Constitution of the respondent no.1 for replacing the same with an ‘amended Memorandum of Association’ and the issuance of ‘Guidelines for Builders’ had passed.
7. In terms of the amended MoA, the functioning of the Executive Committee is provided under Clause 8 which reads as under – “8. Executive Committee
8.1. The management of the affairs of the Association shall be vested in the Executive Committee. which shall consist of the President, 2 (two) Vice- Presidents, the General Secretary, the Joint General Secretary, the Treasurer, the 4 (four) Secretaries (one from each Block), and 14 (fourteen) Representatives of the 4 (four) Blocks, that is: (i) 5 Representatives from Block E (ii) 4 Representatives from Block S (iii) 3 Representatives from Block M (iv) 2 Representatives from Block W
8.2. The Executive Committee shall be elected on or before 30th April, every 2 (two) years.
8.3. Any vacancy occurring during the course of the term of 2 (two) years shall be filled up by the Executive Committee itself from amongst the Life Members.
8.4. The outgoing Executive Committee shall continue to hold office after the date of the Election results till the handover of the operating system (assets and accounts) is done. The outgoing Executive Committee shall also facilitate such handover.
8.5. The Executive Committee shall have the power to make, constitute or amend any Rules, Regulations, Code of Conduct, or Guidelines to govern any activity for the welfare and betterment of the Colony. The Executive Committee shall also have the power to prescribe and levy any fees, amounts, charges, contributions, subscriptions, etc. from its Members.
8.6. The Executive Committee shall have the power to prescribe and levy any fees, amounts, charges, contributions, donations, subscriptions, etc., from its Members, with retrospective effect.”
8. Learned counsel for the petitioners submits that Clause 8.[5] and 8.[6] of the amended MoA is in contravention of the scheme of the Societies Registration Act, 1860 inasmuch as it usurps the authority of the General Body to frame or amend rules governing the respondent no.1.
9. It is further contended that Clause 8.[6] empowers the executive committee of the respondent no.1 to unilaterally levy any fees or charges on the residents of Greater Kailash-II Colony with retrospective effect, which is not permissible.
10. Learned counsel for the petitioners submits that by way of the amendment of Clause 5 of the erstwhile Constitution, the restriction on members of the executive committee from continuing on the same post for more than two terms has also been omitted from Clause 8 of the amended MoA.
11. Furthermore, the petitioners are also aggrieved by the issuance of the Builders Guidelines which are sought to be framed and enforced by the respondent no.1. The petitioners’ grievances as regards the builder guidelines, as set out in the present petition, are as under – a. Any resident, who wishes to undertake any incremental bona fide construction activities to his property is first required to pay a one – time INR 50,000 fee, along with a variable fee of INR 1,00,000 – 3,00,000 depending on the size of their plot; b. No resident can conduct any construction activity on their own property with a builder of their choice, and only Builders who are empanelled by the GK-II RWA / respondent no.1 may be chosen for construction activities; c. The creation of incremental bureaucratic steps such as the requirement for an NOC from the GK-II RWA, is clearly designed as a system whereby tithe will have to be paid by bona fide residents and real estate developers to members of the Executive Committee of the GK-II RWA to speedily receive such NOC; d. The enforcement of the Builder Guidelines is taken at threat of stopwork orders, and the security personnel employed by the GK-II RWA, who will needlessly harass otherwise legal and bona fide activities, simply because the self-assumed conditions of the GK – II RWA have not been complied with; and e. The Builder Guidelines incentivize corrupt practices and the payment of bribes to members of the Executive Committee of the GK-II RWA, to clear procedural steps such as empanelment, issuance of NOCs etc.
12. Issue notice.
13. Learned counsel as aforesaid, accepts notice on behalf of the respondent no.1.
14. Issue notice to the respondent no.2 through all permissible modes, including electronically.
15. Let a reply be filed by the respondents within a period of 4 weeks from today. Rejoinder thereto, if any, be filed within a period of two weeks thereafter.
16. Respective counsel for the parties have been heard for some time on the aspect of interim relief.
17. Prima facie, by virtue of Clause 8.[5] and 8.[6] of the amended MOA, the Executive Committee has virtually sought to assume the powers of the General Body and give to itself blanket power to “make, constitute or amend any Rules, Regulations, Code of Conduct or Guidelines to govern any activity for the welfare and betterment of the colony”. Moreover, the Executive Committee has also assumed the powers to prescribe and levy any fees, amounts, charges, contributions, subscriptions from its members.
18. Furthermore, Clause 8.[6] of the amended MoA seeks to confer power on the Executive Committee to levy such charges on its members with retrospective effect.
19. It has been held by the Supreme Court in Supreme Court Bar Association and Others v. B.D. Kaushik (2011) 13 SCC 744, that the “The authority to frame, amend, vary and rescind the rules and regulations of a society inherently vests in the General Body”1
20. Prima facie, in the guise of any amendment, it is impermissible to confer powers of the General Body on the Executive Committee. The same principle has been reiterated in Sh. Dushyant Sharma Vs. Harayana Wrestling Association & Ors., 2012: DHC: 180-DB. In the said case, a Division Bench of this Court also made observations to the effect that perpetuating control and management of the concerned society in a few.
persons, tantamounts to “creation of a fiefdom”, which cannot be permitted.
21. The power to levy fees, charges etc. on its members, and that too with retrospective effect, without the same being specifically approved by the General Body is also repugnant to the scheme of the Societies Registration Act, 1860 and the dicta in Supreme Court Bar Association and Others (supra) and Sh. Dushyant Sharma (supra).
22. Also, prima facie, the scope and amplitude of Clause 8.[6] in the amended MoA is so wide that it can be invoked for any purpose at the discretion of the Executive Committee. This is inconsistent with Section 12 of the Societies Registration Act, 1860, in terms of which, it is for the General Body of a registered society alone to determine the purpose of the society and consequently, the purpose for which any rules, regulations etc. can be framed.
23. Also, by virtue of the builders’ guidelines, the Executive Committee has arrogated to itself the power to impose a levy/fee on builders and/or property owners which is a legislative/municipal function. Prima facie, it is impermissible for such a levy/fee being imposed on the builders/residents who are desirous to carry out legal and bona fide construction activities in accordance with law and after complying with the applicable municipal laws.
24. In the circumstances, the operation of the amended Clause 8.[5] and 8.[6] of the MoA as also the impugned “Guidelines for builders”, shall remain stayed till the next date of hearing.
25. List on 28.07.2025.
APRIL 22, 2025/dn SACHIN DATTA, J