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% 19.05.2011
Mr.Anil Amrit and Mr.Rakesh Kumar Garg, Advocates for the Petitioner.
Mr.Rajiv Nanda, Addl.Standing Counsel for Govt, of
NCT of Delhi along with Ms.Rachna Saxena, counsel for R-1 and Sh.J.P.Aggarwal, Returning Officer.
Mr.Rakesh K.Khanna, Sr.Adv. with Mr. Anil Kumar, Ms.Seema Rao and Mr.Vishal Panwar, Advocates for the Private Respondents.
Present:
+ WP (C) No.3353/2011
+ WP (C) No.3354/2011
+ WP (C) No.3355/2011
&
* The petitioner seeks to challenge by way of the captioned petitions the order dated 18.04.2011 passed by the Delhi
Cooperative Tribunal ( in short DCT) and the awards of the arbitrator dated 23.10.2010, 23.10.2010 and 21.10.2010 which merged in the impugned order of the DCT.
The DCT by virtue of the impugned order set aside the awards passed by the Arbitrator qua certain members elected to the Board of Directors (BOD) of R-2/Bank save except to the extent it pertained to the petitioner.
The prime reason for setting aside the petitioner’s election as chairman of the BOD was that his name should have, according to the DCT, been included in the list of defaulters since an inquiry pending against him and several other persons had revealed that they had allegedly worked their compulsory deposit
% 19.05.2011
Mr.Anil Amrit and Mr.Rakesh Kumar Garg, Advocates for the Petitioner.
Mr.Rajiv Nanda, Addl.Standing Counsel for Govt, of
NCT of Delhi along with Ms.Rachna Saxena, counsel for R-1 and Sh.J.P.Aggarwal, Returning Officer.
Mr.Rakesh K.Khanna, Sr.Adv. with Mr. Anil Kumar, Ms.Seema Rao and Mr.Vishal Panwar, Advocates for the Private Respondents.
Present:
+ WP (C) No.3353/2011
+ WP (C) No.3354/2011
+ WP (C) No.3355/2011
&
* The petitioner seeks to challenge by way of the captioned petitions the order dated 18.04.2011 passed by the Delhi
Cooperative Tribunal ( in short DCT) and the awards of the arbitrator dated 23.10.2010, 23.10.2010 and 21.10.2010 which merged in the impugned order of the DCT.
The DCT by virtue of the impugned order set aside the awards passed by the Arbitrator qua certain members elected to the Board of Directors (BOD) of R-2/Bank save except to the extent it pertained to the petitioner.
The prime reason for setting aside the petitioner’s election as chairman of the BOD was that his name should have, according to the DCT, been included in the list of defaulters since an inquiry pending against him and several other persons had revealed that they had allegedly worked their compulsory deposit
WPC No.3353/2011 to 3355/2011
2011:DHC:18971-DB accounts as savings bank accounts contrary to the Reserve Bank of India (RBI) directive in that regard.
The net effect of the DCT's decision is that petitioner's election as chairman has been declared null and void on account of the fact (as noted above) that the petitioner was a defaulter, and thus, not entitled to contest the elections.
The petitioner's case is that when the election process was set in motion, the electoral rolls and the list of defaulters was prepared and sent to the returning officer. The name of the petitioner did not figure in the list of defaulters and had it so appeared, the petitioner would have had the opportunity to pay the amount and contest the election. Not only that, none of the respondents, who sought to challenge the election, had filed any objections to the electoral rolls or the list of defaulters within the stipulated period of time. To buttress his submission, the learned counsel for the petitioner referred to the proviso to Rule 3 mentioned in Schedule II of Delhi Cooperative Societies Rules, 2007 ('the said Rules' for short) which reads as under:
" Provided that defaulters list shall be prepared thirty days before the date of the election and displayed at the notice board of the co-operative society and a copy shall be sent to the Registrar in duplicate, one for record and the other for display on the notice board in the office of the
2011:DHC:18971-DB accounts as savings bank accounts contrary to the Reserve Bank of India (RBI) directive in that regard.
The net effect of the DCT's decision is that petitioner's election as chairman has been declared null and void on account of the fact (as noted above) that the petitioner was a defaulter, and thus, not entitled to contest the elections.
The petitioner's case is that when the election process was set in motion, the electoral rolls and the list of defaulters was prepared and sent to the returning officer. The name of the petitioner did not figure in the list of defaulters and had it so appeared, the petitioner would have had the opportunity to pay the amount and contest the election. Not only that, none of the respondents, who sought to challenge the election, had filed any objections to the electoral rolls or the list of defaulters within the stipulated period of time. To buttress his submission, the learned counsel for the petitioner referred to the proviso to Rule 3 mentioned in Schedule II of Delhi Cooperative Societies Rules, 2007 ('the said Rules' for short) which reads as under:
" Provided that defaulters list shall be prepared thirty days before the date of the election and displayed at the notice board of the co-operative society and a copy shall be sent to the Registrar in duplicate, one for record and the other for display on the notice board in the office of the
their dues before the date of filling nomination only and in case of Federal/Financing society before the date of submission of delegates' name."
It is thus submitted that the rules itself provide for a defaulter to clear his dues before the date of filing of the nomination.
The counsel for the petitioner sought to draw strength from the observations made by the Division Bench of this Court in
Narender Kumar lain v. Govt of NCT of Delhi; 2008 (10) AD (Delhi) where it has been observed that the challenge to the electoral rolls should be properly brought "within the hiatus" between the completion of electoral rolls and the declaration of
It is thus submitted that the rules itself provide for a defaulter to clear his dues before the date of filing of the nomination.
The counsel for the petitioner sought to draw strength from the observations made by the Division Bench of this Court in
Narender Kumar lain v. Govt of NCT of Delhi; 2008 (10) AD (Delhi) where it has been observed that the challenge to the electoral rolls should be properly brought "within the hiatus" between the completion of electoral rolls and the declaration of
schedule of elections.
The second plea advanced by learned counsel for the a defaulter petitioner is that the allegation of the petitioner being arises from working of the compulsory deposit account from stated to have been improperly
W which withdrawals were permitted while extra interest was earned. This practice is stated to have been carried on for a number of members which resulted
In pursuance of the aforesaid, in certain directives of the RBI. there was initiation of action by the RCS under Section 55 of The
The second plea advanced by learned counsel for the a defaulter petitioner is that the allegation of the petitioner being arises from working of the compulsory deposit account from stated to have been improperly
W which withdrawals were permitted while extra interest was earned. This practice is stated to have been carried on for a number of members which resulted
In pursuance of the aforesaid, in certain directives of the RBI. there was initiation of action by the RCS under Section 55 of The
Delhi Cooperative Societies Act, 1972 (in short 'the 1972 Act') whereby the inspection was ordered followed by an enquiry.
Learned counsel submits that the stage of fixing of liability
I is still pending consideration as is required under Section 59 of the 1972 Act {a corresponding provision for which is Section 66 of the Delhi Cooperative Societies Act, 2003 (in short 'the 2003
Act')}.
It is further stated that the last alleged demand is stated to have been made on the petitioner as far back as 11.09.2004; while elections have been held thereafter in December, 2006.
The argument being even though a new managing committee was in place for past three years, the private respondents who members of the managing committee did not deem it fit to take any action in respect of alleged defaults in squaring outstanding demands. were
On the other hand, learned counsel for the private respondents sought to rely upon Section 25 of the 2003 Act read with Rule 54 of the said Rules, to claim that the petitioner was there were demands not eligible for election as long as outstanding against him. According to the learned counsel the fact that a demand was outstanding against him would put him in the category of a defaulter who was liable to compensate the
Page 4 of6 deposit
Society in respect of illegal operation of the compi^
What is, however, not disputed that the last notice account. towards a purported demand was sent on 11.09.2004 and that proceedings under Section 59 of the 1972 Act (corresponding provision of which is Section 66 of the 2003 Act) are still pending.
It is in view of the aforesaid facts and circumstances, that learned counsel for the parties have agreed that the following order should dispose of the writ petitions.
The challenge laid to the election of the petitioner as chairman of the BOD for the reasons set out in the awards of the arbitrator dated 23.10.2010, 23.10.2010 and 21.10.2010 respectively in the captioned petitions, as affirmed by the impugned order of the DOT dated
18.04.2011 would stand negatived. Consequently, the petitioner's election to the post of chairman of R-2 would be undisturbed.
The enquiry pending before the RCS, proceedings have reached the stage of fixation of liability under Section 59 of the 1972 Act (the corresponding provision of which is Section 66 of the
Learned counsel submits that the stage of fixing of liability
I is still pending consideration as is required under Section 59 of the 1972 Act {a corresponding provision for which is Section 66 of the Delhi Cooperative Societies Act, 2003 (in short 'the 2003
Act')}.
It is further stated that the last alleged demand is stated to have been made on the petitioner as far back as 11.09.2004; while elections have been held thereafter in December, 2006.
The argument being even though a new managing committee was in place for past three years, the private respondents who members of the managing committee did not deem it fit to take any action in respect of alleged defaults in squaring outstanding demands. were
On the other hand, learned counsel for the private respondents sought to rely upon Section 25 of the 2003 Act read with Rule 54 of the said Rules, to claim that the petitioner was there were demands not eligible for election as long as outstanding against him. According to the learned counsel the fact that a demand was outstanding against him would put him in the category of a defaulter who was liable to compensate the
Page 4 of6 deposit
Society in respect of illegal operation of the compi^
What is, however, not disputed that the last notice account. towards a purported demand was sent on 11.09.2004 and that proceedings under Section 59 of the 1972 Act (corresponding provision of which is Section 66 of the 2003 Act) are still pending.
It is in view of the aforesaid facts and circumstances, that learned counsel for the parties have agreed that the following order should dispose of the writ petitions.
The challenge laid to the election of the petitioner as chairman of the BOD for the reasons set out in the awards of the arbitrator dated 23.10.2010, 23.10.2010 and 21.10.2010 respectively in the captioned petitions, as affirmed by the impugned order of the DOT dated
18.04.2011 would stand negatived. Consequently, the petitioner's election to the post of chairman of R-2 would be undisturbed.
The enquiry pending before the RCS, proceedings have reached the stage of fixation of liability under Section 59 of the 1972 Act (the corresponding provision of which is Section 66 of the
JUDGMENT
2003 Act) would be completed within a maximum period of 2 months and necessary action taken within the same i) in which ii) period of time. If as result of the decision in the enquiry any adverse decision attaches to the petitioner, the same will follow the consequences provided in law de horsXh^X. which has agreed between parties in clause (i) above. In terms of the award, the entire election process had been set at naught. The DCT as noticed above set aside the awards save and except to the extent that the iii) iv) election of the petitioner is declared null and void. Therefore, consent recorded in clause (i) above would not construed as if the private respondents have waived if so their right to challenge the decision of the DCT, advised, qua the other elected members. The result of the enquiry would, of course, be subject to challenge, in appropriate legal proceedings, by any aggrieved party. The writ petitions accordingly stand disposed of. List for compliance on 29.07.2011. Dasti to learned counsel for the parties under the signatures of the Court Master. V) SANJAY KISHAN KAUL, J. 'a RAJIV SHAKDHER,]. MAY 19, 2011 dm Page 6 of6
JUDGMENT