J.N. CHAUDHARY & ORS. ETC. versus STATE OF HARYANA & ORS.

Citation: [2014] 6 S.C.R. 589 · Decided: 24-04-2014 · Supreme Court of India · Bench: GYAN SUDHA MISRA · Disposal: Dismissed
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Judgment (excerpt)

[2014] 6 S.C.R. 589 
J.N. CHAUDHARY & ORS. ETC. 
V. 
STATE OF HARYAl\JA & ORS. 
(Civil Appeal Nos. 4854-55 of 201-4'"tftt.) 
APRIL 24, 2014 
[GYAN SUDHA MISRA AND 
PINAKI CHANDRA GHOSE, JJ.] 
Go-operative Society: 
Auction sale of land conducted in pursuance to the 
resolution passed by the General Body of the Co-operative 
Society and by duly following the procedure - Sale based on 
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B 
c 
the price prevalent on the date of auction sale could not be 
faulted on the ground of a/legations leveled on the basis of 0 
assumption and speculation of 10 members of the Society 
who had assailed the same by invoking writ jurisdiction -
Challenge made 11 years after the sale, during which the 
appellant Society practically ceased to exist and all members . 
except 10 out of 288 left - There was no illegality or infirmity 
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in the impugned judgments passed by the courts below 
concurrently refusing to set aside the auction sale held 11 
years ago at the instance of a Co-operative Society which was 
practically rendered defunct and ceased to exist. 
Auction sale of land conducted in pursuance to the 
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resolution P.assed by the General Body of the Co-operative 
Society - Challenged by handful of members - Held: In 
judging the functioning of a Co-operative Society or any other 
statutory body where the democratic process of election is 
adopted in pursuance to the Rule and a collective decision 
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is taken by majority of the members of the entire body 
expressed in terms of a resolution passed by the General 
Body, then the same should not be ignored and bye-passed 
on _challenge by a handful of members on the allegation of 
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590 
SUPREME COURT REPORTS 
[2014] 6 S.C.R. 
A 
ma/a fide unless the alleged malicious action is· writ large on 
the alleged decision and is challenged by majority of the 
members - If a decision is taken by majority of the members 
of a Cooperative Society or any other body under a statute 
in terms of the Rule, it cannot be over-ruled by minority on 
B 
the ground of ma/a fide or fraud -unless it has passed through 
a strict proof of evidence - It is a well known dictum that ma/a 
fide is always easy to allege but difficult to prove as the same 
cannot be held as proved relying on assumption, speculation 
and. suspicion. 
c 
Writ jurisdiction: Scope of - Writ petition by members of 
Co-operative Society challenging auction sale 11 years later 
- Held: Members of the Co-operative Society opted a wrong 
forum by filing a writ petition in the High Court - They should 
have approached the civil court of competent jurisdiction 
D 
where it would have had the opportunity to adduce evidence 
and prove all the allegations of under valuation and the 
alleged fraud challenging the auction sale - High Court under 
its writ jurisdiction ought not to have entertained the factual 
dispute which was of a civil nature but in the interest of justice 
E 
and fairness as also equity and good conscience, the High 
Court entertained the dispute and to a great extent took care 
to scrutinize all aspects of the matter and then reached to a 
conclusion considering entire conspectus of the matter which 
cannot be held to be arbitrary, illegal or unjust in any manner. 
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On 04.03.1994, a Cooperative Society was formed 
wherein 288 persons became members upto 1995-96 and 
contributed a sum of Rs. 7.50 crores towards the funds 
of the society which were to be utilized for purchase of 
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th~ land. In 1~96, the society purchased 10 acres of land 
with the funds contributed by the members for achieving 
its objects. At the time of formation of the society, a 
Managing Committee was constituted with one 'RPG' as 
Secretary but the same was suspended on 23.10.1996 by 
the then Asstt. Registrar, Cooperative Societies on the 
H 
J.N. CHAUDHARY & ORS. ETC. v. STATE OF 
591 
HARYANA & ORS. 
allegation of financial irregularities and a Board of A 
Administrator was appointed. However, the Deputy 
Registrar reinstated the Managing Committee on 
30.08.1999. Subsequently, on 28.05.2000, a General Body 
Meeting of the Society took place in which fresh election 
was held and a n.ew Managing Committee was 
B 
constituted wherein 'AKM' was elected as member of the 
new Managing Committee and entrusted with the work 
of Honorary Secretary of the Society in place of the 
previous Secretary 'RPG'. The new Managing Committee 
upon inspection of records found gross irregularities by c 
the previous Managing Committee in the purchase of 
la
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