Delhi High Court
S.K. Tandon vs The Registrar Of Co-Operative ... on 8 July, 1996
Equivalent citations: 69(1997)DLT632, 1996(38)DRJ235, 1996RLR449, 1997 A I H C 378, 1996 WLC(RAJ)(UC) 450 (1996) 38 DRJ 235, (1996) 38 DRJ 235
JUDGMENT Usha Mehra, J.
(1) Petitioner felt aggrieved by the refusal of the Society to include his name in the draw of lots for allotment of flats scheduled to be held on 29th March,1992 or on any other date thereafter. He sought mandamus against respondents namely Delhi Government Officers' Co- operative Group Housing Society Ltd. (hereinafter called the Society, respondent No.3), Registrar, Cooperative Societies (hereinafter called the Registrar), Delhi Development Authority (in short 'DDA'). Facts relevant to the determination of this petition are that petitioner's father late Shri K.L.Tandon was enrolled as member of the Society at its inception in 1979. He thus became a founder member of the Society. Unfortunately, Mr.K.L.Tandon died on 11th February,1983. Dda by then had allotted land to the Society. Late Mr.K.L.Tandon had paid the full price of the land allotted to the Society for its members. Flats had not yet been constructed when Mr.K.L.Tandon died. However, since the price of the land had been paid by late Mr.K.L.Tandon, therefore, the petitioner claimed right over the allotment on account of the "Will" executed by his father thereby bequeathing all his rights, title and interests in the property in favour of the petitioner. Late Mr.K.L.Tandon also nominated the petitioner as his nominee. After the death of Mr.K.L.Tandon, petitioner applied for the transfer of membership in his name. The Managing Committee of the Society vide Resolution dated 19th April,1987 transferred the membership in favour of the petitioner. The transfer was confirmed by the then Secretary of the Society Dr.Abhay Maurya. The same was approved by the Registrar under the Delhi Co-operative Societies Act,1972 (in short the Act), Petitioner intimated to the Registrar as well as to the Society while seeking permission to retain the membership of the Society that he was a member of the Punjab National Bank Staff Cooperative House Building Society Ltd. (in short the Pnb Society). He also informed that he had been allotted a plot by the Pnb Society in his name in the draw of lots held by that Society. The Registrar accorded sanction for dual membership in favour of the petitioner under Rule 28 of the Delhi Co-operative Societies Rules, 1973 (hereinafter called the Rules). Society approved dual membership in favour of the petitionervide Resolution dated 13th Augusl,1988. After the according of dual membership by the Registrar and approved by the Society, the cost of flat amounting to Rs.2,77,000.00 was raised on the petitioner. The petitioner paid in all a sum of Rs.4,09,351.00 towards the price of the flat of Type-B category. In March,1992 petitioner received a letter of demand from the Society amounting to Rs.l5,000.00 . However, for extraneous reasons the name of the petitioner was not forwarded to the Registrar for being included in the draw of lots to be held in March, 1992. Petitioner felt it was due to malafide on the part of the then Secretary that his name was not forwarded because he had defeated the Secretary and other members of the Executive Committee in the elections of the Society. Having approved the name of the petitioner for retaining dual membership, it did not lie in the mouth of the Society or the Registrar to exclude his name. from the draw of lots or to give threat to cancel his membership.
(2) Society, respondent No.3 herein took the stand that the petitioner by acquiring the plot from Pnb Society disqualified himself to be a member of this Society. He was not entitled to any flat. Per the version of the Society, petitioner suppressed material facts and in particular that he had incurred disqualification under Rule 25(l)(C)(i) of the Rules. The factum of his incurring disqualification was reported to the petitioner as well as to the Registrar by the Society. Petitioner concealed the fact that his wife owned residential houses in the Union Territory of Delhi. Petitioner from the very beginning was disqualified to become a member of this Society. The day he applied for transfer of membership of the Society i.e. after the demise of his father, he was not eligible. He got the membership transferred by fraudulent means and by suppression of these material facts. Moreover, the petitioner forged the signature of his father in the Membership Register of the Society on 21st August,1979. The proceedings Register shows that membership in the name of late Mr.K.L.Tandon was benami. It was in fact petitioner who in the name of his father got the membership, hence the membership of late Sh.K.L.Tandon being benami was void. Sh.K.L.Tandon died on 11th February,1983. The petitioner with fraudulent intentions after obtaining the plot from Pnb Society, applied for transfer of the membership of this society. This he did nearly after three years of his father's death. He wanted to get the plot allotted from Pnb Society and only thereafter applied for transfer. This shows malafide on the part of the petitioner. The permission under Rule 28 was obtained by the petitioner directly in a surreptitious manner without disclosing these facts either to the Society or the Registrar. Hence, permission under Rule 28 is of no value in the eyes of law.
(3) Registrar, on the other hand took the plea that he ceased the membership, on the instruction of the Society, as the petitioner possessed another plot from the Pnb Society. The sub-lease of the said property by Pnb Society was executed in favour of the petitioner on 30th April,1984. Moreover, petitioner's wife also, possessed free hold residential plot as well as properties in East Park Road, Delhi. The Society informed these facts to the Registrar and also intimated that the petitioner wilfully concealed these facts. He got the membership of the Society transferred in his favour after the death of his father by playing fraud. Grant of dual membership only enables a person to get enrolled as member in two Societies. It does not amount to waiver of the provisions of Rule 25(l)(c). The provision of Rule 25(l)(c) cannot be waived even by the Registrar. The petitioner cannot possess as of right two properties from two different Societies on the basis of the sanction accorded by the Registrar under Rule 28. Moreover, the properties owned by petitioner's wife situated at East Park Road being residential for that reason also petitioner is not eligible to get flat from this Society. This position, in fact was concealed from the Society and the Registrar by the petitioner. Mere use of residential property for commercial purpose will not change the nature of the properties owned by petitioner's wife.
(4) At the outset it must be mentioned that on the directions of this Court given on 27th March,1992, the name of the petitioner was ordered to be included in the draw of lots held on 29th March,1992. As per the order of the Court the name of the petitioner was included and a plot was allotted to him. However, that allotment was subject to the outcome of this writ petition. It may also be mentioned that during the pendency of this Writ petition fresh elections of the Society were held. The petitioner has been elected as Executive Member. The new Managing Committee took over the Society and brought to the notice of this Court by way of affidavit that the Society did not want to contest this writ petition. Managing Committee approved the membership and held draw of lot. One flat was allotted in favour -of the petitioner. These facts have been brought on record through the affidavit of Sh.X.K.Mahto, Secretary of the Society. He testified that election of the Society were held on 20th Fcbruary,1994 under the supervision of Justice J.D.Jain (Retired Judge of this Court) as per the directions given by this Court in CM.No.55/92. Pursuance to that election Sh.S.N.Kapoor, the then Additional District Judge, Delhi (now Judge of this Court) was elected as the President.
(5) MR.B.S.SCHRAWAT appearing for the Society after seeking permission placed on record the affidavit of the newly elected Secretary alongwith certain other documents. Mr.Mahto in his affidavit has testified that Members of the Managing Committee expressed the view that the erstwhile Managing Committee had taken a vindictive altitude towards the petitioner. That the petitioner had not concealed any facts at the lime of filing this writ petition. Moreover, vide meeting dated 27.3.94 Society resolved that this petition be not contested and that correct facts be brought on Court record. Pursuance to the Resolution dated 27th March,1994 of the Society, its Secretary placed on record documents to show that it was late Sh.K.L.Tandon the founder member of the Society who signed the Register of the Society. Late Shri K.L.Tandon's signatures on the Registers were attested by the then Secretary of the Society late Sh. A.K. Srivastava. He had certified that all the persons who signed the bye-laws and Society's Registers were personally known to him and they signed in his presence. It is on account of this Certificate given by the then Secretary of the Society that Mr.Mahto in his affidavit has mentioned that petitioner had not forged the signatures of his late father Sh.K.L.Tandon. Late Mr.Tandon signed the Register, this fact is borne out from the record maintained by the Society in due course of business and duly certified by the then Secretary of the Society. He has further testified that late Sh.K.L.Tandon paid a sum of Rs.8,000.00 towards the price of the land allotted by the Dda for the members of the Society. That vide Resolution dated 19th April,1984'Society resolved to accept the petitioner as Member in place of his father subject to the approval of the Registrar. That the then Secretary of the Society Dr.Abhay Morya pursuant to that Resolution wrote a letter to the Registrar for according approval of transfer of membership. The Registrar accorded the approval vide his letter dated 2nd June,1988 thereby permitting the petitioner dual membership under Rule 28. Managing Committee in its meeting held on 13th August, 1988 took note of the fact that petitioner was retaining dual membership as a special case under Rule 28. The Managing Committee also passed a resolution on 13th August,1988 permitting the petitioner dual membership. It raised a demand on the petitioner to pay 35% of the cost of the land. This demand was raised inspite of having knowledge that the petitioner had already been allotted a plot by Pnb Society. Society has already accorded its approval for dual membership and allotment of property by both the Societies vide its Resolution dated 13th August,1988. This fact was in the knowledge of the Managing committee even at the time of transmission of membership. When the Society raised the demand from the petitioner, the petitioner complied with the same by paying the amount as demanded. Thus so far as the Society- respondent No.3 is concerned, it cannot oppose the case of the petitioner.
(6) From the stand taken by the Society and record produced, we are, therefore left with one contesting respondent i.e. Registrar of Co- operative Societies.
(7) MRS.AVNISH Ahlawat appearing for the Registrar disputed the signatures of late Shri K.L.Tandon and alleged that these were forged by the petitioner. Moreover, this being a disputed question of fact cannot be gone into by this Court in the Writ Petition. I am afraid these arguments of Mrs.Ahlawat arc belied from the certificate issued by the then Secretary of the Society and the same has been produced on record by the Society. Therefore, it does not lie in the mouth of the Registrar to challenge the signature of late Shri K.L.Tandon on the record of the Society particularly when the Society admits that those were not forged. Hence, it cannot be called a disputed question of fact. As regards her objection that there is equally efficacious alternative remedy that argument is also without force. No appeal could be filed because no order had been passed by the Registrar nor communicated to the petitioner hence there could not be any question of filing appeal under the Act. As per the record of the Registrar the order alleged to have been made on 29th August, 1992 was never issued nor served on the petitioner. Therefore, the question of filing appeal does not arise.
(8) Turning to Mrs.Ahlawat's contention that the affidavit now filed by the Society cannot be considered, this argument is without substance. Merely because earlier Managing Committee filed the counter affidavit is no ground to stop the present Managing Committee to bring on record the facts which it consider were concealed from this Court or misrepresented. The contention of Mrs.Ahlawat that a counter affidavit once filed cannot be replaced by another affidavit even with the permission of the Court is devoid of merits. In the first counter affidavit filed by the Society a stand was taken that signatures of late Sh.K.L.Tandon had been forged by the petitioner and that the Society was kept in dark with regard to petitioner being member of another society i.e. Pnb House Building Society or his wife owning properties. By the present affidavit Mr.Mahto, the Secretary has by documentary evidence established on record that these averments were wrong. He has filed on record certificate issued by the then Secretary of the Society Sh.A.K.Srivastava certifying that the persons including late Shri K.L.Tandon signed the membership register. They did so in his presence and he knew them personally meaning thereby that Membership Register of the Society was signed by late Shri K.L.Tandon in the presence of the then Secretary. The then Secretary knew late Mr.K.L.Tandon personally. Hence, the first objection of Mrs.Ahlawat is belied from the record of the society produced now which was deliberately kept back and concealed from this Court when first affidavit was filed. In such circumstances, this Court cannot and should not shut the correct facts being produced on record. Moreover, at the time of disposing this writ petition, this Court is well within its right to call the complete record of the respondents. Hence, it is not proper for the Registrar to contend that this Court must confine itself to the first counter affidavit filed. Signatures of late Sh.K.L.Tandon appears at Serial No.24 of the Register, underneath these signatures a certificate of the Founder Secretary had been appended. It was wrong on the part of the representative of the Society to conceal this fact of certification and to allege that the signature of late Sh.K.L.Tandon were forged. If it had been so the founder Secretary would not have given this certificate that he knew all members personally known to him and that they signed the Register in his presence. This certificate belies the stand taken by the Registrar. Documents now placed on record by the Society show that in the counter affidavit earlier filed facts have been twisted. The then Managing Committee tried to mislead this Court. Mr.B.S.Sehrawat by producing the record of the Society has proved that the affidavit filed by the then Managing Committee depict wrong and misleading facts and that it tried to rack up irrelevant issues.
(9) The main thrust of Mrs.Ahlawat's argument had been that there cann't be dual membership. Even if permission under rule 28 was accorded it only made a person eligible to become a member of two societies but did not make him eligible for allotment or any claim as of right over two properties from two Societies. The sanction granted to the petitioner, by the then Registrar, only permitted him to get dual membership but not allotment of two flats or plots. To be a member of two societies may be permissible but this permission by no stretch of imagination permitted him to acquire property from this Society particularly when he had been allotted flat by Pnb Society. Even the sanction accorded under Rule 28 cannot nullify the disqualification which the petitioner had already incurred by acquiring a plot from the Pnb Society and his wife having residential accommodation in Delhi. The petitioner had either to forego the plot from Pnb Society or the flat of this society. But by no means he can keep both.
(10) To understand the objection raised by Mrs.Ahlawat, we must have a quick glance at various provisions of the Act and the rules made thereunder and in particular Rule 25 and 28. These rules talk about the disqualification from membership and according of sanction of dual membership by the Registrar. Rules 25,26, 28 & 35 and Section 26 of the Act are reproduced as under:-
RULE25: Disqualification For Membership (1) No person shall be eligible for admission as a member of a Cooperative Society if he- (a)............ (b)............ (c) in the case of membership of a housing society: (i) he owns a residential house of a plot of land for the construction of a residential house in any of the approved or unapproved colonies or other localities in the Union Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children, on lease hold or freehold basis provided that disqualification as laid down in sub-rule (l)(c)(i) shall not be applicable in case of persons who are only co-sharers of joint ancestral properties in congested localities (slum areas) whose share is less than 65.72 sq.meters (80 Sq.Yards) of land; (ii) he deals in purchase of sale of immoveable properties either as principal or as agent in the Union Territory of Delhi; or (iii) he or his spouse or any of his dependent children is a member of any other housing society, except otherwise permitted by the Registrar. (2) Notwithstanding anything contained in the rules or the bye-laws of the co- operative society, if a member becomes, or has already become, subject to any disqualifications specified in sub-rule (1). he shall be deemed to have ceased to be a member from the date when the disqualifications were incurred. (3)......... (4)......... Rule 26 : Terms And Conditions On Which Persons Referred To In Section 20(1) (D) May Be Admitted As MEMBERS. The following shall be the terms and conditions on which persons referred to in Section 20(1) (d) may be admitted as a member of a Co-operative Society :- 1) The number of such persons admitted to the membership of a co-operative society shall not exceed 5 percent of its total membership at any time. 2) The head office of such persons shall be within the area of operation of the co-operative society. 3) Such persons shall carry on their business within the area of operation of the co-operative society. 4) Such persons purchase at least 10 shares in the capital of the co- operative society. 5) The aims and objects of such persons are not contrary to those of the cooperative society. 6) Such persons do not carry on competing business with that of the cooperative society within the local omits specified in the bye-laws or by the Registrar. 7) Any other condition which the Lt.Governor may notify.
Provided that in case of Urban Co- operative Banks the Registrar may permit enrollment of such persons as member not exceeding 5% of the total number of members after considering the financial position of the Urban Co-operative Banks concerned.
RULE28 : Prohibition Of Membership In Two CO- Operative Societies No individual, being a member of a primary co-operative society of any class shall be a member of any other co- operative society of the same class without the general or special permission of the Registrar, and where an individual has become a member of two co-operative societies of the same class either or both of the co-operative societies shall be bound to remove him from membership upon written requisition from the Registrar to that effect.
(11) Section 26 of the Act deals with the transfer of interest on death of members. Section is reproduced as under 26:- "Section 26: (1) On the death of a member a cooperative society may transfer the share of interest of the deceased member to the person nominated in accordance with the rules made in this behalf, or, if there is no person sonominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member, or pay to such nominee, heir of legal representative, as the case may be, a sum representing the value or such member's share or interest as ascertained in accordance with the rules or bye-laws:- Provided that - (i) in the case of a co-operative society with unlimited liability, such nominee, heir or legal representative, as the case may be, may require payment by the society of the value of the share or interest of the deceased member ascertained as aforesaid: (ii) in the case of co-operative society with limited liability, the society shall transfer the share of interest of the deceased member to such nominee, heir or legal representative, as the case may be, being qualified in accordance with the rules and bye-laws for membership of the society or on his application within one month of the death of the deceased member to any person specified in the application who is so qualified; (iii) no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be. (2) A cooperative society shall, subject to the provisions of Section 36 and unless within six months of the death of member prevented by an order of a Competent Court, pay to such nominee, heir or legal representative, as the case may be, all other moneys due to the deceased member from the Society. (3) All transfers and payments made by a co-operative Society in accordance with law provisions of this Section shall be valid and effectual against any demand made upon the society by any other person."
(12) Rule 35 of the said Rules deals with nomination by a member, and it provides as under:- "RULE35: (1) For the purpose of transfer of his share or interest under sub-section (1) of Section 26, a member of a co- operative society may, by a document signed by him or by making a statement in any book kept for the purpose by the Society, nominate any person or persons. Where the nomination is made by a document, such document shall be deposited with the Society during the member's life time and where, the nomination is made by a statement, such statement shall be signed by the member and attested by one witness. (2) The nomination made under sub-rule (1) may be revoked or varied by any other nomination made in accordance with that sub-rule. (3) Record of nomination shall be kept by a co-operative society in such manner as may be laid down in the bye-laws. (4) When a member of a co-operative society nominates more than one person, he shall, as far as practicable, specify the amount to be paid or transferred to each nominee in terms of whole share and the interest accrued in the society. (5) The value of the share or interest transferred or paid to a nominee or nominees shall be determined on the basis of the sum actually paid by the member to acquire such share or interest unless the bye-laws provided for calculation on a different basis. (6) (i) Where a member of a co-operative society has not made any nomination, the Society shall, on the member's death, by a public notice exhibited at the office of the society invite claims or objections for the proposed transfer of the share or interest of the deceased within the time specified in the notice. (ii) After taking into consideration the claim or objections received in reply to the notice or otherwise, and after making such inquiries as the committee considers proper in the circumstances prevailing, the Committee shall decide as to the person who in its opinion is the heir or the legal representative of the deceased member and proceed to take action under Section 26, subject to any appeal which may be filed to the Registrar by any person claiming the share or interest of deceased member within 30 days of the decision of the committee. The orders of the Registrar on such appeal shall be final and binding upon all concerned. (7) If the Committee refuses to transfer the share or interest of the deceased member to his nominee or his successor-in-interest, or fails to take a decision on the application of such nominee of the successor-in-interest as the case may be within 30 days of the date of such refusal or the date of such application, a nominee or any person claiming to be a successor-in-interest of the deceased member shall file an appeal to the Registrar, who after hearing the society and the applicant or any other person interested, shall pass such order as he may deem fit and on such condition as he may impose and order made by the Registrar shall be final and binding on all concerned.
(13) According to Mrs.Ahlawat, Rule 28 cannot override rule 25. Moreover, amendment in rule 25 will not operate retrospectively. The disqualification envisaged under rule 25 will continue till the stage of allotment of flat or plot by the Society. To strengthen her submissions she relied on the fact that if the petitioner could not give affidavit as required under Rule 25(2) at the stage of allotment of a flat then how could he be made a member with that disability. Therefore, sanction under Rule 28 will not take away the power of Rule 25. To support her arguments, she placed reliance on the decisions of this court in the case of Balraj Madhok V. Registrar of Co-operative Societies Civil Writ No.946/73 decided on 7th Juhe,1974, as well as Daulat Ram Mehndiratta V. Lt.Governor, Delhi & Anr. , where the question was posed as to whether a person who had a house or land for building a house in Delhi could continue to remain a member of the House Building Society in Delhi. While analysing Rule 25(l)(i) the Court in that case held that the Rule 25(l)(i) disqualifies a person from becoming a member if he owns a residential house or plot of land in Delhi. This Rule has been framed under Section 97(2)(v) which expressly empowers the framing of such a rule which would affect not only persons applying for admission for the first lime but also to persons who had already been admitted as members. Relying on these observations, Mrs.Ahlawat contended that since the petitioner was already a member of Pnb Society and had been allotted a plot, therefore, by virtue of Rule 25 he disqualified himself from acquiring a flat from this Society.
(14) So far as the proposition of law is concerned, there cannot be any quarrel. But the observation of the Division Bench in Balraj Madhok as well as Daulat Ram Mehnidratta's cases (Supra) have no application to the facts of this case. In both those cases the Court was not dealing with the permission granted under Rule 28, rather the Court was called upon to interpret the applicability of the provisions under the New Act in comparison to the old. It was only after analysing both the provisions under the old and the new Act that the Court opined that Rule 25(l)(c) was not retrospective in operation. In the case of Balraj Madhok the Court was mainly concerned with the effect of Section 98 of the Delhi Co-operative Societies Act and its operation as to whether it would be retrospective or prospective. After considering various aspects the Court opined that bye-laws could not be contrary to the provisions of the Act and the Rules made thereunder. The question for consideration was the applicability of the amended provisions and its effect on the bye-laws. Further would it apply to the members at the stage of admission or even thereafter. It was in this background that the Court held that the bar created under Rule 25 will continue even if the person was earlier a member or had became member then. But that is not the question in this writ petition. The question for consideration is whether the sanction accorded by the Registrar for retaining dual membership under rule 28 entitles the petitioner the consequential benefits accruing thereon? In fact Rule 28 came up for interpretation and consideration before the Division Bench of this Court in the case of O.P.Sethi V. Lt.Governor & Ors. . Division Bench while dealing with the provisions of Rule 25(l)(c)(i) observed that the mere fact that wife of the said petitioner was owner of a house which she possessed prior to petitioner's becoming a member of the Society was no ground to declare petitioner's membership invalid. The objection of the Society was rejected by observing that Rule 25(1) (i) was not applicable to a case of succession by "Will", further observed that Rule 25 was attracted in those cases where properties were held Benami by the member. But the said rule would not apply if the property was acquired by transmission/devolution i.e. by inheritance or by "Will". In case acquiring of the property was benami then objection could be considered sustainable. But where the property was transmitted by inheritance or by "Will" those cases cannot be covered under Rule 25. Thus in case of transmission rule 25 would not apply. Like in the case of O.P.Sethi, in the present case also, the Society had acceded to the prayer of the petitioner for transferring in his favour the membership of his father after the death of his father. The Society in O.P.Sethi's case had recommended the execution of sub-lease in that petitioner's favour. Considering those facts Court opined that the Registrar travelled beyond his jurisdiction by holding that the said petitioner ceased to be a member of the Society under Rule 25(l)(c)(i) and the Bye-laws of the Society. Observations of O.P.Sethi's case squarely apply to the facts of this case. In the instant case also petitioner had acquired the membership by transmission and not on account of benami transaction. Therefore, having acquired the property by transmission/devolution after the death of his father by virtue of a "Will" the provisions of Rule 25(l)(c)(i) would not apply to the facts of this case.
(15) Section 26 clearly stipulates that on the death of a member two options are given to the society namely; (1), the society may, transfer the share of the deceased to the legal heirs in accordance with law and/or (ii) pay to such person a sum representing the value of the share or interest ascertained in accordance with the rules and byelaws governing a society. Reading of Section 26 makes it clear that the Society before the transmission of a share can choose cither of the two methods. But having choosen the first i.e. transfer the interest, the Society can not turn around and challenge the said transfer. In this context the bye-laws of the Society gives a guideline and arc very relevant for the decision of this writ petition. Bye-law No.5 of the Society lays down the eligibility condition for membership of the Society and disqualifies a person if "he or his wife or any of his/her dependent owned a dwelling house or plot for building a house in Delhi, New Delhi or Delhi Cantonment. Bye-law No.9 of the Society on the other hand stipulates that condition No.5 will not be applicable to the nominee or legal heirs of the deceased member. From the joint reading of bye-laws 5 & 9 of the Society it is clear that if the acquisition is by inheritance then the disqualification laid down in bye-law No.5 will not apply. Hence the stand of the Registrar that petitioner's name was withheld because of his dual membership on the face of it is wrong and contrary to the condition stipulated under bye-law No.9 of the Society which enables the legal heir to get the property transmitted in his name by way of inheritance. Present petitioner vide his letter dated 20th May, 1988 addressed to the Registrar made it clear that he was a member of the Pnb Society and had been allotted a plot. Despite that, Registrar accorded the sanction under Rule 28 because he realised that the Rule 25 was not applicable to the facts of this case as the acquisition was by way of transmission. On petitioner's letter of request the Registrar passed the following order:- "I entirely agree. This is specifically because the exemption asked for under Rule 28 is bonafide request and not for any motive of making gains out of it. The idea behind restrictions of membership of more than one society is to discourage people from acquiring properties in a clandestine manner so that the benefit of the housing co- operative societies are extended to as many peoples as possible. In the instant case the circumstances are different where a member has got the membership rights transferred on him by his deceased father. Therefore, there cannot be any intention of acquiring more than one house in the Union Territory of Delhi. This is something which has come to him beyond his own control. We may, therefore, accord the permission as recommended by the Society,"
(16) After receiving this sanction of the Registrar, the Managing Committee of the Society passed the following resolution on 13th August,1988:- "THE meeting noted that Sh.S.K.Tandon has been allowed transmission of membership in his favour from his father late Sh.K.L.Tandon and the exemption granted under Rule 28. Resolved that Shri S.K.Tandon be enrolled as a member of the Society and a demand notice be issued to him to pay 35% of flat cost by 30.9.1988."
(17) A reading of the Resolution passed by the Managing Committee and the sanction accorded by the Registrar under Rule 28 makes it clear that case of the petitioner stood on different fooling. The petitioner herein acquired the property by way of inheritance, therefore, it was wrong on the part of the respondents to apply rule 25 in the case of the petitioner as the property by the petitioner was acquired by transmission/ devolution. In the words of the Division Bench in the case of O.P.Sethi (supra): "THUS we are of the considered view that Rule 25(l)(c) is attracted in those cases where the properties arc held benami. Having come to this conclusion, there seems to be little difficulty in holding that the said Rule cannot apply in the cases where properties are acquired by transmission/ devolution. We feel that Rules 25 and 35 of the said Rules have to be read in different contexts. The former takes care of the cases of acquisition of membership or its transfer and the latter the cases of transmission etc. The view, which we have taken, we feel, will give a harmonious construction to the provision of the said Rules and bye-laws, referred to above. A contrary view, in our opinion, will not only make bye-law 9 redundant but may also lead to unreasonable and anamolous results. For example, a member, on being granted membership of a housing Co-operative Society constructs a house on the plot sub-leased in his favour. He registered his only heir as nominee. During his life lime the said heir also himself/ herself acquires a residential house or a plot of land for construction of residential house. It will be extremely unreasonable if on the death of the member, the said heir is told that he/ she having incurred disqualification as per Rule 25, membership and property of the deceased could not be transferred in his/ her favour. More so when the Act, the Rules and the bye-laws arc silent on the question as to what will happen to the property after the death of the member in such a situation. We feel, the latter part of bye-law 9 is intended to take care of such a situation."
(18) In the case of O.P.Sethi (Supra) the court was concerned with the question as to whether by inheritance petitioner could acquire properly from two different societies. After analysing the Act, rules and the bye-laws the Court answered the question in the affirmative. In fact after the judgment of O.P.Sethi, the Lt. Governor realising the lacuna in the provision brought the amendment in the Rules vide Notification dated 11th July,1995. Rule 25 as amended reads as under:- "2.Amendment of Rule 25- In the Delhi Cooperative Societies Rules,1973, in Rule 25, in sub-rule (1), in clause (c) for sub-clause (i), the following shall be substituted, namely:- (i) he owns a residential house or a plot of land for the construction of a residential house in any of the approved or unapproved colonies or other localities in the National Capital Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children, on lease hold or free hold basis: Provided that disqualification as laid down in sub-rule (l)(c)(i) shall not be applicable in case of co-sharers of joint ancestral properties, whose share in the properly is less than 66.72 sq.meters (80 sq.yds.) whether the property is in a congested area or otherwise and who do not own any plot/ house in the National Capital Territory of Delhi: Provided further that such co- sharers of joint ancestral properties shall not be entitled to allotment of another plot of land or become members of co-operative Housing Societies/ Group Housing Societies, if they are already allotted a plot/ flat by the DDA: Provided also that the disqualification as laid down in sub- rule (l)(c)(i) shall not be applicable in case .of a person who is already a member of a co-operative housing society/ group housing society, if subsequent to becoming such member he inherits/ acquires, by transmission/ devolution, any properly in the National Capital Territory of Delhi."
(19) Third proviso to sub-rule (1) in Clause (c) as amended clearly point out that if a person inspite of being a member of a Group Housing Society inherits or acquires by transmission subsequently a properly that will not disqualify him under Sub-rule l(c)(i) of the Rules. This amendment as pointed out by Mr.J.M.Sabhurwal must have been brought in the rules after the decision of U.P.Sethi (Supra) in order to overcome the difficulty experienced in cases of inheritance. To arrive at the conclusion that rule 25 does not apply to the facts of this case support can also be had to the rules as it stands now. It is clear that by inheritance a person not only acquire dual membership but also acquires the property through it.
(20) In the present case the society was allotted land by the Dda during the life time of late Mr.K.L.Tandon. Late Mr.Tandon paid full price of the land. He thus acquired vested right in the land in question. It was only the superstructure which remained to be built when he died. Therefore, so far as Society is concerned on the allotment of land being made by Dda for its members and money having been received for the cost of this land from the deceased, the right in the properly vested in him which he passed to his heir by virtue of a "Will". Thus having acquired the right in the property, late Sh.K.L.Tandon was within his right to transmit in favour of his son.
(21) Under Rule 77 and instructions of the Registrar only that much number of members be enrolled who could be accommodated. There are only 72 members of this society and there are 72 flats constructed. Petitioner's father being the founder member was amongst the 72 members eligible for allotment of flat. The petitioner after the death of his father inherited the right in the flat as he stepped into the shoes of his father. He acquired by transmission the right in the property. Therefore, no other member could have right towards these flats except the 72 persons/members of which the petitioner by transmission acquired the right.
(22) As already pointed out above, the Society admits that the petitioner informed all the facts including the fact of his being member of Pnb House Building Society and that his wife owned commercial properly in Delhi. In the meeting of the Managing Committee of the Society held on 13th August,1988 and which was attended by late Sh.A.K. Srivastava, the founder Secretary of the Society and Sh.S.C. Srivastava applicant in C.M.No.3056/94. The Society after due deliberation and being aware of the fact that the petitioner was a member of another Society and had been allotted a plot from that Society still passed the resolution thereby allowing the transmission of membership in favour of the petitioner. In view of this Resolution it does not lie in the mouth of the respondents to say that petitioner had concealed or suppressed any material fact either from the respondents or from this Court. Bank accounts produced by the Society show that price of the land was paid by late Sh.K.L. Tandon. Petitioner pursuance to the Resolution of the Society dated 13th August,1988 as per the demand raised paid complete amount demanded by the Society towards the cost of the flat. This shows the Society acted upon its resolution.
(23) MRS.AHLAWAT when questioned about inheritance fairly conceded that if the father of the petitioner had paid the price before his death then by inheritance the petitioner would acquire the property inspite of having been allotted earlier a plot from another Society. Her grievance that late Mr.Tandon only paid price of land and not of the superstructure hence even by inheritance no property vested in the petitioner. This argument cut no ice because Society having received full payment of land from late Shri K.L.Tandon could not say that no right in the property vested or that the right will vest in the property only when super structure is raised. So far as the land on which the superstructure has been raised the price of the same stood paid by its member late Shri K.L.Tandon. Hence in law late Sh.K.L.Tandon acquired a right in the immoveable property. Therefore, by inheritance the petitioner became entitled to acquire not only the land but subsequent benefit of the flat. The mere fact that balance instalments were yet to be paid cannot disentitle the petitioner from inheritance. In fact by paying for the price of land late Mr.K.L. Tandon acquired vested right which on his death passed on to his legal heir which in this case is the petitioner. He acquired the right by inheritance. Thus in view of the provisions of the Act, rules and bye-laws as well as amended rules as published on 11th July,1995 read with the interpretation given by this Court in the case of O.P.Sethi it clearly emerges that the petitioner is entitled to acquire the flat i.e. the property of his father in this Society.
(24) MRS.AHLAWAT'S contention that the sanction under rule 28 only enabled the petitioner to become a member but does not allow him to acquire the flat appears to be without force. Once the Registrar accorded the sanction thereby permitting him dual membership on account of the inheritance then in such a case the bar created under rule 25 would not apply. It does not lie in the mouth of the Registrar to contend that permission under rule 28 only made petitioner member of the Society but would not allow him the consequential benefits. Such an argument on the face of it is erroneous. Mr.J.M.Sabharwal counsel for the petitioner rightly contended that having accorded the sanction and the Society having acted upon the same, the doctrine of promissory and equitable estoppel would apply in such a case.
(25) So far as owning the properties by the wife of the petitioner those are not held by her as benami. As per the record produced it is clear that those properties were purchased by his wife with her own funds. She obtained permission from her employer Ndmc before purchasing the same. She holds the properties in her own right. She had taken loan from her employer in order to purchase the same. In this regard petitioner has placed documentary evidence. Mr.B.S.Sehrawat appearing for the Society admitted that these properties arc held by petitioner's wife in her own right and she purchased the same with her own resources. Once the Society admits this position then Registrar cannot challenge this fact in this writ petition on presumption or on conjectures. Petitioner has also produced letter issued by the Slum Wing of the Dda dated April 30,1992 to show that the properties in question are commercial in nature. As per the letter dated 30.4.1992 these properties were treated by the Dda as commercial property and subsequent thereto the Assistant Commissioner, Mcd, Central Licencing and Enforcement vide letter dated 1719.1992 informed the petitioner that properties at East Park Road have been declared commercial area. Alongwith the circular dated 10.1.1969 resolution of the Dda of January,1989 has also been filed to show that East Park Road is commercial area. Assistant Commissioner, Mcd, issued a certificate on 8th November, 1990 certifying that Smt.Sunita Tandon wife of petitioner is owner of properties No.10168 and 10176, Katra Chhaju Prasad, East Park Road, and the same is being used as commercial. Petitioner has also placed on record the sanction accorded by the employer of his wife, i.e. Assistant Secretary, Ndmc, dated 15th April,1978 to show that for the purchase of these properties she had been given permission. It does not behoves the Registrar to contend that the properties in the name of petitioner's wife are owned by her as Benami. In fact numerous letters issued by Dda & Mcd belie the contention of the Registrar that these properties are residential in. nature. Rule 25 could be attracted only when the wife of the petitioner had owned these properties benami and not in her own right. Pre-requisite to attract the disqualification was if the petitioner had purchased these properties with his resources but used the name of his wife. That is, however, not the case in hand, therefore, disqualification on this account is also not applicable in the case of the petitioner.
(26) For the reasons stated above, this writ petition is allowed. Rule made absolute. Petitioner is entitled to the allotment of the flat of Category-B being, a valid member of the Society. It is ordered that the flat already allotted to him be regularised. Order accordingly.