Delhi High Court
Arvind Pinto vs Registrar Cooperative Societies & Ors on 18 January, 2016
Author: S. Ravindra Bhat
Bench: S. Ravindra Bhat, Indermeet Kaur
$~15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P. (C) 6959/2013, CM APPL.15063/2013, 1797/2016
% DECIDED ON: 18.01.2016
ARVIND PINTO ..... Petitioner
Through: Mr. Abhishek with Mr. Vikas,
Advocates.
versus
REGISTRAR COOPERATIVE SOCIETIES & ORS..... Respondents
Through: Mr. Naushad Ahmed Khan, Advocate
for Resp-1.
Mr. S.K. Kaushik, Advocate for Assistant
Collector.
Mr. Arindam Mukherjee, Advocate for Resp-3.
Mr. Sunil Sabharwal, Advocate for Resp-4.
Mr. Raghu Nayyar, Advocate and Vice President
of the respondent Society.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE INDERMEET KAUR
S.RAVINDRA BHAT, J. (ORAL)
1. The petitioner is aggrieved by an order of the Delhi Cooperative Tribunal which has upheld the Award, made under Section 70/71 of the Delhi Cooperative Societies Act, 2003, dated 13.01.2012.
2. The brief facts are that the petitioner was the original allottee of Flat No.D-77, Retreat Cooperative Group Housing Society. He parted with the property for consideration to the third respondent (hereafter referred to as claimant) on 23.12.2003. The transfer was duly noted by the respondent W.P.(C) 6959/2013 Page 1 society. Since the petitioner was a permanent member, he was obliged to make regular payments towards construction costs. The society, to cater its additional financial requirements of funds, had sought a loan from the Delhi Cooperative Housing Finance Corporation for the benefit of its members. The loan was on the security of the land which was mortgaged; the future construction of the flats was the subject matter of the loan amount. After the transfer of the flat, on account of the liabilities, which the society had to discharge to the Corporation, had called upon its members - including the third respondent - to pay specified amounts. The outstanding against flat no.D-77 worked out to `9,92,274/-. The third respondent objected contending that the amounts claimed were towards default payments that were due by the appellant; however, he paid the amount and sought reference of the dispute contending that it fell under Section 70 of the Delhi Cooperative Societies Act (hereafter referred to as "Act"). His contention was accepted and the dispute was referred to the Arbitrator. The Arbitrator by his Award dated 09.06.2010 upheld the third respondent/transferee's contentions. In doing so, the Arbitrator overruled the petitioner's objections as to the jurisdiction and also held by a factual analysis that the amounts which were due and payable had been defaulted at the time when it was the petitioner who was under a liability to pay. The petitioner felt aggrieved and approached the Tribunal which by the impugned order rejected his plea.
3. It is urged by counsel that the Tribunal fell into error in holding that the dispute fell under Section 70 of the Act. Contending that the dispute with the third respondent was purely a private one and did not touch upon the management or business or constitution of the Cooperative Society, learned counsel highlighted that only such disputes which pertained to these W.P.(C) 6959/2013 Page 2 issues could be gone into in arbitration under the Act. It was contended further more that even on the merits, the Tribunal fell into error because it failed to take note of the transaction between the petitioner and the third respondent. Here counsel highlighted that the contents of the transfer document specifically state that liabilities on account of the flat that would arise due to demands made by the society after the transfer were to be discharged by the third respondent.
4. At the outset, it would be useful to notice Section 70. The relevant portion of which is extracted below: -
"70. (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society other than a dispute regarding disciplinary action taken by the co- operative society or its committee against a paid employee of the co-operative society arises -
(a) among members, past members and persons claiming through members, past members and deceased members;
XXX XXX XXX such disputes shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such disputes."
The petitioner has not placed reliance on any decision to say that the dispute pertaining to amounts payable of the kind with which we are now concerned with among members and comprised members would not per se fall within the description "management or the business of a cooperative society".
W.P.(C) 6959/2013 Page 3
5. A plain reading of the statute would reveal that the recovery of amounts claimed by the cooperative society as due from its members can be the legitimate subject matter of the disputes amongst past members particularly in cases where the flat or subject matter has changed hands. That the petitioner and the third respondent were members of the society and were entitled to the same flat though at different points of time is not in dispute. Clearly, therefore, the petitioner as past member fell in the description of Section 70 (1) (a); equally the dispute as to who amongst them had to discharge the liabilities to the society which touched upon its business was also the legitimate subject matter of Section 70. Therefore, this Court finds no reason to interfere with the findings of the Tribunal on the question of jurisdiction.
6. As far as the second issue urged, i.e., the merit goes, the Court notices here that the Tribunal concurred with the findings of the Arbitrator and noticed that the Delhi Cooperative Housing Finance Corporation had notified names of 40 people who are defaulters. This included flat no.D-77. It transpired that the petitioner had sold the flat without disclosing to the third respondent, that out of loan obtained in 1988-89, 52 installments were payable at the time of transfer but that again had remained irregular and that no payments were made in 1994. The Tribunal noticed as follows: -
"The appellant submitted that the loan was advanced in the year 1988-89 and was repayable in 80 equated quarterly installments and even before the date of the sale of the flat about 52 installments were payable, but this account remained irregular and no payments were made after 1994 by the appellant to settle outstanding dues. The Appellant has miserably failed to show that the outstanding amount of the loan was brought to the notice of the Respondent No.1. Even W.P.(C) 6959/2013 Page 4 according to the terms of the mortgage deed, the appellant was required to clear the loan before sale of the flat. Moreover, there is a specific declaration in the agreement to sell, that the flat is free from all encumbrances and in such there was no occasion for the respondent to doubt the declaration particularly from a person who is holding a senior post as an I.R.S. Officer. Thus the respondent No.1 acted bonafidely to file his petition further, it is beyond doubt that the appellant concealed material facts from the respondent No.1 about outstanding amount of loan which is further proved by the fact that the appellant was unable to produce the receipts even for the period in which he claimed to have deposited the installments of the loan regularly i.e. for the period from 1994 till 2003. The loan which the society has taken from DCHFC was given to all members as per the Resolution of the society.
There is no merit in the reply given by the appellant before arbitrator that he is acting in collusion with the claimant against the appellant. The present appeal against the award is hereby rejected and the liability to pay the outstanding amount which is paid by the Respondent No.1 to the DCHFC and the respondent society, under protest to avoid constantly increasing penal interest, needs to be paid with interest to the respondent No.1 by the appellant."
7. The Court is of the opinion that given the narrow nature of the Court's jurisdiction under Article 226 of the Constitution of India, it would be neither appropriate nor wholesome to enter in these factual merits to decide whether the Tribunal committed an error of law in appreciating the materials before it. In the present case, this Court cannot entertain what it is urged to do, i.e., to re-appreciate the facts virtually on a second appellate review as the Award was rendered by the Arbitrator (Tribunal at the first instance) and gone into in appeal by the Delhi Cooperative Tribunal in a first appeal.
W.P.(C) 6959/2013 Page 5
8. Having regard to these circumstances, we are of the opinion that there is no merit in the petition; the same is accordingly dismissed, along with pending applications.
S. RAVINDRA BHAT, J
INDERMEET KAUR, J
JANUARY 18, 2016
/vikas/
W.P.(C) 6959/2013 Page 6