B. N. Singh v. The Registrar, Co-op. Group Housing Society & Ors.

1. Owners of 02 bedrooms houses-Rs. 15,000/-

2. Owners of 03 bedroom houses-Rs.15,000i-

3. Owners of 04 bedroom houses- Rs. 25000/-

4) One time exemptipci. in r/ose1f draw society of restricted only upto the provision of section 77(1) of DCS Act-2003." The said notificatiOn also expresl:and1ealy postulated that the members and other office bearers who had been charge-sheeted by the CBI would not be given benefit of the said regul:arisation, and their names should not be sent to the Delhi Development Authority till the criminal cases pending against them are finally decided as in the case of other CBI investigated societies Clause (1) of the aforesaid notification, reads - "1) However, the thëth1èrs and other office bearers of the CBI investigated societies, who have been [sic (charge)] sheeted by CBI shall not get the benefit of such regularization and their names shall not be sent to DDA till the criminal cases pending against them are finally decided as in the case of other CBI investigated societies."

11. The petitioners in support of their contention that the aforesaid clause (1) should be struck down and is invalid, have relied on Rule 20 of Delhi Cooperative Societies Rules, 2007, which reads as under:- "20. Disqualification of membership (1). No person shall be eligible for admission as a member of a co-operative society if he:- (a) has applied to be adjudicated an insolvent or is an undischarged insolvent; or (b) has been sentenced for any offence other than an offence of a political character or an offence not involving moral turpitude and dishonesty and a period of five years has not elapsed from the date of expiry of the sentence, or

(c) In the case of membership of a co-operative housing society,

(i) owns a residential house or a plot of land for construction of residential house ir any of the approved or un-approved colonies or other localities in the National Capital Terntory of Delhi, in his own name or in the name of his spouse or any of dependent children, on lease hold or free-hold basis or on power of attorney or on agreement for sale: PrOvided that above clause shall not be applicable, (a) in case of co-sharers of property whose share is less than 66.72 sq. metres of land; or if the residential property devolves on him by way of inheritance; (b) in case of a person who has acquired property on power of attorney or through agreement for sale and on conversion of the property from leasehold to freehold on execution of conveyance deed for it, if such person applies for the transfer of membership of the housing society concerned;

(ii) deals in purchase or sale of immovable properties either as principal or as agent in the National Capital C Territory of Delhi; or

(iii) his spouse or any of his dependent children is a member of any other cooperative housing society. (2). Notwithstanding anything contained in the rules or the bye-laws of the co- operative society, if a person becomes, or has already hecome a member, subject to any disqualification specified in sub-rule (1), he shall cease to be a member from the date when the disqualificatlons were incurred. However, before disqualif'ing a member, the Registrar shall give an opportunity of personal hearing to the concerned member and the society (3) A person who ceases to be a member of a cooperative society under sub-rule (2), shall not be entitled to exercise rights °: memberships or incur liability as member with effect from the date of order passed by the Registrar referred to in sub-rule (2) but as from the date he becomes a creditor of the cooperative society in respect of the amount due to him on account of paid up share capital, deposit, cost of land deposited or any othôramount paid by him to the co-operative society as its member. As from the date of his ceasing to be a member of the society under subrule (2), the amount standing to his credit shall be paid to him by the co-operative society within three months and if the co-operative society is already under liquidation, theamount due to him will be credited as a debt due to a third party from the co-operative society. (4). If any question as to whether a member has incurred any of the disqualification referred to in subrule (1) arises, it shall be referred to the Registrar for V!7 p decision. The decision of the Registrar in this behalf shall be final and binding on all concerned. The person appointed to assist the Registrar." It is highlighted that the said Rule and the two orders passed by the Supreme Court dated 6th January, 2009 and 3lS March, 2009 were considered by a Division Bench Of this Court in W.P.(C) No. 2908/20 14 titled Sanjay Baja) & Ors. Vs. Registrar of Co-operative Societies and Ors. and vide order dated 28th March, 2016,:itwas held as under:-

clearly states that it is only in the cases of self draw where the issue of regularisation arises. For purposes of that benefit, the names, of the members -who were given allotment otherwise than in accordance with the Act and Rules - would'notbeconsidered if any of them are charge-sheeted. However, one cannot infer or deduce that the said order is per se applicable to all situations. In other words, if a member who is otherwise qualified is entitled to be considered in accordance with the provisions of the Act and Rules and is not subjected to any of the disqualification set out in either Section 22 or Rule 20 (particularly Rule 20(i)(b) which talks of conviction in criminal proceedings as a bar, the entitlement to be considered in a draw of lots cannot be ruled out at all. This Court fact that that Rule 90 spells out only one consequence, i.e., that the concerned individual is not permitted to contest the elections. In other words, barring a conviction after completed proceedings in a duly conducted criminal trial, a member who is merely charge-sheeted cannot be precluded from participation in the draw of lots. Any other interpretation would be contrary to the Act and even the Rules. It is well settled that even the rule making authority cannot exceed the parent enactment. In this case, the rule making authority clearly envisioned only one circumstance, i.e., disqualification uponconviction of a member. Clearly, that situation has not arisen and some of the members, i e, the present petitioners are named in a charge-sheet In the case of one petitioner apparently even charges have not been frarned" This judgment also refers to thebrdé4atd12th Septembe, 2013 passed in W P (C) No 5588/2013 filed by S P Saxena, who was also the petitioner in the SLP mentioned above The order dated 1 2th September,20 13 reads - "The first pray. erTh the:present Writ Petition is for issuance of a writ, order or direction in the nature of certiorari thereby quashing/setting aside the minutes of the meeting dated 11th August, 2010 recorded by the Committee constitiitëdunder Ruk 90 of the Delhi Cooperative Societies Rules, 2007 in so far as the same relate to the refusal by the said Committee to recommend the nañie of the Petitioner to DDA for allotment and consequently declare the order dated 26th July, 2013 as null and void and inoperative. The second prayer of the Petitioner is for a direction to the Respondent No.1 to recommend the name of the Petitioner to DDA for holding draw of lots for allotment of a draw in favour of the Petitioner. On the last date of hearing we -had issued notice to the Respondent No.1, Registrar of Cooperative Societies and directed him to be present in person today. The view of the orders of this Court and of the Hon'ble c Supreme Court dated 5th December, 2008 passed in CC No.15738/2008 which orders were made absolute on 31St March, 2009, the application made by the Petitioner for allotment of flat shall be considered under Rule 90 of the Delhi Cooperative Societies Rules, 2007 and the name of the Petitioner in case the Petitioner is found eligible,. wil-1 be recommended for allotment to DDA. Learned counsel forthe Petitioner states on instructions from the Petitioner who is present in Court today that the Petitioner is satisfied with the aforesaid statement made by the Registrar Cooperative Societies since the final allotment has been stayed by the Hon'ble Supreme Court. -- - In view of the aforesaid statement of the Registrar, Cooperative Societies which is taken on record, nothing further survives to be considered in the instant ' petition, which is accordingly disposed of"

12 Learned counsel for the respondent, Government of National Capital Territory of Delhi, on the other han[4], relies n the judgment dated 5th May; 2015 passed in W.P.(C) No.519/2012, Manohar La! & Anr. Vs. The

13. Manohar Lal, by way of the said writ petition, had challenged the notification dated 17th October, 2011 issued by the Lieutenant Governor under Section 127 of the Act giving one-time exemption to the self-draw of lots held by the Cooperative societies from the applicability of Section I 77(1) of the Act. The aforesaid decision refers to the various contentions raised herein and examines the genesis of the dispute, referring to W.P.(C) No.10066/2004, titled Yogi Ra] Krishna Cooperative Group Housing Society Ltd. v. Delhi Development Authority & Anr., wherein the scam involving builders and architects who had illegally managed registration of societies with either fake membership or by lending names of their friends and relatives to complete the membership to enable registration These illegalities, it was observed, had led the Division Bench of this Court in Yogi Raj Krishna Coopei ative Group Housing Society Ltd (supra) to direct the CBI investigation A two member Committee comprising of Mr K K Mathur and Mr Y D Venkata was thereafter constituted by the Government of Delhi for, inter alia, suggesting measures for verification of membership etc There was consultation within the concerned department at the highest level, before the notification dated 17th October, 2011 was issued. The decision observes that it was impossible for the Legislature to contemplate every possible factual situation and that the provisions of the Act were incapable of meeting complex situations that had arisen in the course of the working of the Act. The notification was upheld holding that rigorous application of some of the provisions could itself result in frustrating the very object and purpose of the enactment instead of advancing them. So long as the power was exercised in advaicement and furtherance of the objectives of the Act, the exercise of the said power would not be struck down. The Division Bench specifically noted and highlighted that only such persons, who would meet the requirements of the statutory provisions, as well as the Rules and had complied with the financial modalities imposed by the society, would be entitled to regularisation There were adequate safeguards provided in the notification dated 17th October, 2011, as it had specifically excluded the charge-sheeted members and office bearers from its ambit Such members and office bearers were not to be granted the benefit of regularisation, and their names were not to be sent to the Delhi Development Authority We would like to quote the relevant portion from the Manohar La! & Another (supra), which reads as under:- "45. We consequently find substance in the submission of learned counsel for the respondents that in issuance of the notification dated 17th October, 2011, the Government has taken a careful view after application of mind to the facts which emerged by deciding to exempt the 26 societies from the applicability of Section 77 of the Act and regularising the centre of place. We see that the respondents have issued the notification carefully inasmuch as the notification has excluded members and other office bearers of the CBI investigating societies who have been charge-sheeted by the CBI shall not get the benefit of such regularisation and their names shall not be sent to the DDA till criminal cases pending against them are finally decided. The regularisation is subject to payment of penalties for the self draw which have been prescribed. The exemption is only one time and restricted to the application of the provisions of Section 77(i) of the Delhi Cooperative Societies Act, 2003."

14. Learned counsel for the petitioner has submitted that the decision of Division Bench in Sanjay Bajdj and Ors (supra) would be squarely applicable, for the said decision also refers to the notification dated 17th October, 2011 and the directions were issued quo members who were charge sheeted and were facing criminal prosecution However, the argument, as raised, overlooks a critical and pregnant fact which is clearly noticed and elucidated in Sanjay Bajaj and Ors (supra) The Division Bench was conscious of the notification dated 17th October, 2011 and clause (1) thereof, which had excluded meiñbers and other officer bearers of CBI investigated societies. The notification dated 17th October, 2011 was applicable to cases wherever there was a self draw of lots and the members had sought the benefit of said self-draw. It was emphasised and stressed that no self-draw of lots had been conducted in the case of Sanjay Bajaj and Ors. (supra) and the petitioners therein had sought allotment of flat on the strength of their membership. The relevant portion of the decision in Sanjay Bajaj and Ors. (supra) reads:- "2. It is argued by the writ petitioners that the directions sought to be relied upon by the Registrar cannot be applied blindly and that it is applicable only in the cases of members of Societies who were given the benefit of draw of lots wherever there was a self draw. In the present case, however, no "self draw" was conducted and the petitioners claim to be entitled to allotment of a flat on the strength of their memberships Learned Counsel also relies upon the Delhi Cooperative Societies Act and the Rules framed thereunder to submit that barring Rule 90, which expressly stipulates that such members who indulge in any irregularity in respect of draw of lots are not permitted to contest election in any office m the Society, and there is no disqualification Counsel relies upon Section 22 and Rule 20." xxxxx

15. In these circumstances and when the Division Bench in Sanjay Bajaj and Ors. (supra) had itself made the said distinction, it will not be appropriate and correct to apply the ratio to set aside and nullify clause (1) of the notification dated 17th October, 2016. The ratio of thedecision is Sanjay Bajaj and Ors (supra) would clearly not be applicable, for the, Division Bench, while making the said pronouncement and expounding the ratio, had itself drawn the critical distinction. It is an accepted and admitted C position that the petitioners herein pursuant to the said draw of lots, are in occupation of flats and thus,,there has been a violation of Section 77(1) of the Act. In such circumstances, we do not think that the ratio of the decision in Sanjay Baja] and Ors (supra) would help and assist the case of the petitioner. In fact, the decision dated 5di May, 2015 in Manohar La! & Anr (supra) would be squarely applicable It is in this context that we have reproduced the prayers made by the petitioners in paragraph 1 above The directions as sought cannot be granted 16 In view of the aforesaid discussion, we do not find any merit in the present writ petitions and the pleas raised by the petitioners The writ petitions are dismissed. In the facts othecaë, there will be no order as to cOsts.

(SANJ V KHANNA) JUDGE (SUMTA GUPTA) JUDGE