Full Text
W.P.(C) 6730/2015
Date of Decision: 19th October, 2016 SUSHIL NARANG ..... Petitioner
Through Mr. Praveen K. Singh, Advocate.
Through Ms. Manika Tripathy Pandey, Advocate for R-1.
Mr. Sandeep Bajaj and Mr. Pratap Parmar, Advocates for R-2.
HON'BLE MS. JUSTICE SUNITA GUPTA SANJIV KHANNA, J. (ORAL)
Sushil Narang, the petitioner is a member of Jhang Cooperative
Society Ltd., the second respondent before us.
JUDGMENT
2. He has filed the present writ petition seeking direction that his name should be included in the list of members who are to be included in the draw of lots for allocation of flats. He objects to the list of members dated 19th November, 2013 sent by the Cooperative Society to the Registrar, Cooperative Societies, as per the notification published on 29th April, 2013. 2016:DHC:7074-DB
3. The petitioner is an original member of the second respondent Cooperative Society. However, he had paid about Rs. 2,00,000/- till 7th September, 1997. Thereafter, he had defaulted in payments. He had paid Rs.4,00,000/- on 13th November, 2011 and Rs.7,89,534/- as interest on belated payment on 27th November, 2011.
4. The Cooperative Society submits that the petitioner was a defaulter and had not paid for the cost of construction which had commenced in the year 1990, and had continued till 1998/1999 and, therefore, cannot be given preference and seniority over others who had paid the instalments on or before 22nd December, 2010 and 17th February, 2011 when the list of 12 and 4 members was sent to the Registrar, Cooperative Societies. The two payments by the petitioner mentioned above were made thereafter. The initial cost of the flat was Rs.4,95,000/- which was enhanced by Rs.1,00,000/- on account of the enhanced cost of construction. On 6th December, 2008, the draw of lots were held and the members had paid Rs. 6,00,000/- per flat. The petitioner was not included in the draw of lots held on 6th December, 2008, for he had defaulted. The petitioner is a chronic defaulter, and he cannot be given preference over the members who were originally junior, but had made timely payments and had contributed and whose money was spent on the cost of construction of the flats.
5. We find merit in the contention raised by the counsel for the Cooperative Society. In the present case, the Administrator appointed by the High Court had, vide letter dated 22nd December, 2010 forwarded a list of 12 members for clearance of membership and the draw of lots. Another list of 4 members was sent on 17th February, 2011. By these dates the petitioner had not cleared the dues, as Rs. 4,00,000/- and Rs. 7,89,534/- were paid in November, 2011. The members of the Cooperative Society, who had made payments towards the cost of construction, and whose money was used for the construction of the flats cannot be denied and yield to the petitioner, who was in default and had failed to pay the cost of flat when the lists for allotments were sent. Subsequent payments by the petitioner would not justify recall or modification of the said lists and deletion of a name.
6. This list of 16 eligible members, who had made full payment of the cost of construction was prepared in October, 2010-February, 2011 pursuant to the order dated 20th July, 2010 passed by the High Court in W.P. (C) NO. 1272/1999 and other connected matters. The lists were sent to the Registrar, Cooperative Societies vide letters dated 22nd February, 2011. The relevant portion of the said order dated 20th July, 2010 reads as under:- “The respondent society has a chequered history as a result of which one set of members have been allotted the flats and are in occupation. The disputes relating to the remaining persist as the flats have not been allotted. There are flats available for allotment but they may not suffice for all the members. It is also not disputed that there is every possibility of making further construction of flats as per the current FAR available to the society including the area pertaining to the Community Hall. It cannot be disputed that in view of payments having been made and the membership of members restored where the society and earlier sought to take action for expulsion, the seniority of the members would have been to be drawn as per their enrolment. The members will be entitled to the flats as per their seniority. If despite this, some members are not allotted flats on account of their shortage, the Administrator/society would have to take a decision as to how further flats can be constructed and in what manner they are to be financed. The Administrator would also look into the aspect as to whether any members have been illegally enrolled who would not be entitled to any flat. The Administrator present in the Court states that the complete exercise should be over within one month from today. On the exercise being completed, the next step to be taken would be to forward the names of the eligible members as per the seniority depending on the flats available to the Registrar for verification and thereafter to the DDA for holding the draw for allotment of the flats. The exercise should also be undertaken within a maximum period of two months after the finalization of the list by the Administrator so that within a total period of three months, the vacant flats are occupied by the eligible members as per their seniority. We have already observed above that in this period of time, the Administrator will also carry out an exercise in consultation with the DDA/MCD as to how many further flats can be constructed depending upon the current FAR available and both the MCD and DDA will render all assistance to the Administrator. The members then, entitled to flats, would naturally have to carry out the necessary formalities for purpose of allotment of drawn of lots.”
7. Demand letters were issued to all members and those who made payment were included in the list as per seniority. The petitioner had failed to pay the amount due, even after the court order and the demand letter. He was a defaulter on 22nd February, 2011 when the lists were sent. The Registrar, Cooperative Societies had subsequently pointed out deficiencies in the two lists which were procedural and formal. These were removed and set right. This had taken time and thereafter public notice was issued. However, this procedural delay would not revive and infuse the petitioner’s claim predicated on his original membership, for he had made payments several months after the list of members were sent. Pertinently, this list of 16 members has not undergone a change. No member has dropped out, and no new member has been included. If the contention of the petitioner is to be accepted, it would create difficulties and cause unacceptable anomalies. A senior member can wait until after the list of members who have made payments is prepared and sent to the Registrar, Cooperative Societies, and pending consideration come forward to make payment and stake his claim. This would make the process never-ending. A cut-off date to ascertain the eligible members who have made payment has to be fixed. In the facts of the case, the petitioner had missed the cut-off date, for the payments were made 8-10 months after the list of eligible members who had made payments, was sent to the Registrar, Cooperative Societies for clearing their names for allotment.
8. Learned counsel for the petitioner had initially submitted that the list of 12 members sent on 22nd December, 2010, and the other list of 4 members which was sent on 17th February, 2011, is not the same list which was published and released on 29th April, 2014.
9. During the course of hearing learned counsel for the respondent No.2 Cooperative Society had submitted that the members in the said lists have not undergone a change, though their seniority position may have changed. He points out that the list dated 22nd February, 2011 were signed by the administrator, Mr. Vivek Kumar Tandon after verifying facts. The said lists consists of members who had made full payment of the construction costs etc. and no other dues were payable by them. This factual position was thereafter accepted and not contested by the counsel for the petitioner.
10. The petitioner had paid Rs.4,00,000/- and Rs.7,89,534/- in November,
2011. It is obvious that the petitioner had made the said payments after he came to know that the list of 16 members had been sent for allotment of flats.
11. In these circumstances, we are not inclined to interfere with the list of 16 members sent for allotment of flats on 22nd February, 2011. The petitioner’s name may have been included at Sr. No.13 of the list which was published by the Administrator on 29th April, 2013, but the petitioner’s inclusion was erroneous and wrong for the reason that the petitioner had failed to make full and complete payment before the lists of 16 members were sent. The erroneous position was corrected.
12. During the course of hearing, learned counsel for the petitioner had relied upon the decision of this Court in P. Bhandari Vs. Retreat Cooperative Group Housing Society Ltd., 1999 (48) DRJ (DB) in support of his contention that seniority has to be maintained even if the member has defaulted in payment. He would not lose his seniority, rights and entitlement to allotment of flat and be superseded by his juniors. The principle laid down by the said decision is not exactly that being mooted by the petitioner. The relevant portion of the said judgment reads:-
13. More affirmative is the reasoning and ratio in the judgment of the Supreme Court in Myurdhwaj Cooperative Group Housing Society Ltd. Vs. Presiding Officer, Delhi Cooperative Tribunal and Ors. (1998) 6 SCC 39, wherein Rule 36 of the Delhi Cooperative Rules, 1973 was considered and it was held that expulsion is an alternative and is not the only way the defaulting member is to be dealt with. The relevant portion of the said judgment reads as under:-
10. This Rule deals with the procedure for the expulsion of members. In case a society decides to expel its member who is persistently defaulting in making the payment of his dues, the procedure to be followed could only be what is provided under this Rule and no other. The principle referred earlier that if a thing is required to be done in a manner as provided under the law has to be done in that manner alone and no other manner will apply with equal force under Rule 36, when a society decides to expel its member. In case of expulsion, the procedure provided under it and the expulsion has to be only under the mode provided therein and no other which is mandatory in nature. But this is only after decision is made to expel its member. This Rule does not take away the discretion of the society to expel a member or not which is preceding the exercise of power under Rule 36. For this, there is nothing under this Rule which either circumscribes or webs this discretion. Since this Rule is for the expulsion of its members, it is stringent in its application. Even after giving opportunity and even after the general body passes such a resolution, it requires approval of the Registrar. Outside this, there is nothing which restricts a society to act freely and to lay down its own policies. It is always open to it to decide on a fact to expel him or not. Its discretion to act is curtailed only by a statutory provision or any order having force of law. A policy may depend on various factors, its planning, projects, undertakings including its financial capacity etc. One society may be in a sound position and the other in a limping position thus may give to its member larger or lesser benefits as the case may be. Thus it is always open to a society to lay down its own principle for making such allotments. So consideration of prompt payment in shaping its policy which helps it to complete its project to confer on its member its fruits at the earliest may be justified exercise of its discretion. To what extent a default is going to affect a society will depend on the facts and circumstances of each case which has to be left at the discretion of each society. It is not proper even for the courts to interfere with such a discretion, except when it is arbitrary, irrational, mala fide, against any statutory provisions or against orders having the force of law. This will not be possible if a strict principle of seniority is followed. However it is open for a society to give weightage to seniority depending on the facts of each case. Within permissible limits, it is always open to lay down a principle which is just, fair and proper. When a society could decide the manner of allotment by instalments or other modes, there is no inhibition to it to modify it in case conditions are not complied by its members. Thus it is not possible to uphold that the society has no option but to proceed under Rule 36 to expel its member. Hence once a society has a discretion, it cannot be said its power is restricted to allot only under the strict rule of seniority.”
14. We had asked the counsel for the petitioner to take instructions whether the petitioner is ready and willing to accept refund of money paid with a reasonable rate of interest. Counsel for the petitioner submits that the petitioner wants commercial rate of interest and not the normal market rate of interest. Counsel for the respondent no. 2-Cooperative Society states that this is not acceptable.
15. It is noticed that some flats are still under construction and because of litigation with the contractor, the construction has not been completed. Once the construction of the said flats is carried out, the petitioner and other members of the Cooperative Society, who have made part payments, on making the requisite payments would be allotted the said flats. A meeting of members who are yet to be allotted flats is being called for examining the question and issue of construction of flats.
16. The petitioner may seek refund of payment made from the respondent no.2-Cooperative Society. On the question of rate of interest, we do not decide and leave it open to the petitioner to make the said claim in appropriate proceedings. Further, in case, the petitioner only wants a refund of the cost of construction of Rs. 4,00,000/- and interest of Rs. 7,89,534/-, his membership would not continue and would not be treated as cancelled. In the said event when the construction of unfinished flats begins, the petitioner can claim his entitlement to a flat upon fulfilling necessary requirements and payment. As far as the cost of land etc. is concerned, the said cost has already been paid. That amount i.e. Rs. 2,00,000/- cannot be refunded to the petitioner in case he wants to continue as a member of the Cooperative Society.
17. With the aforesaid observations and directions, the writ petition is dismissed.
SANJIV KHANNA, J. SUNITA GUPTA, J. OCTOBER 19, 2016