LexMYURDHWAJ COOPERATIVE GROUP HOUSING SOCIETY LTD. versus PRESIDING OFFICER, DELHI COOPERATIVE TRIBUNAL AND ORS.
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A MYURDHWAJ COOPERATIVE GROt:P HOIJSING SOCIETY LTD. B v. PRESIDING OFFICER, DELHI COOPERATIVE TRIBIJNAL AND ORS. JULY 14, 1998 (G.B. PATTANAIK AND A.P MISRA. JJ.] Delhi Cooperative Societies Act, 1972 : C Section 28- -.Cooperative Societies-·.Cooperative housing society-- Flats- Allotment of .Criteria-Principle of seniority- Payment of dues- Defaulting membas--General Body decided to allot flats to such defaulting members in Phase II construction- Validity -Held: Not unfair, unjust, arbitrary, mala fide or irrational- .Principle of seniority alone is not the only criterion D for allotment of fast- However, it must be ensured that a demand notice is served upon the defaulting member in such cases. Section 28- .Cooperative Societies -General Bod)~-Powers of- Held : Not circumvented by R.36. Section 28· -General Body meeting-Agenda- Matter not covered by- -Taking up of-Held: Can be taken up with the E approval of the house in the meeting of its members. Delhi Cooperative Societies Rules, 1973 : Rule 36- -Defaulting member-Expulsion of-Held: Rule 36 is not the only provision to deal with a defaulting member-S.28 of the Delhi F Cooperative Societies Act confers discretion to deal with the defaulting member in another way. The appellant was a housing cooperative society registered under the Delhi Cooperative Societies Act, 1972 and the Delhi Cooperative Societies Rules, 1973. The society was initially allotted five acres of land for G construction of nats for its members and later some lldditional lnnd as also nllotted. In 1988, the society raised demand for the construction of first phase of nats on the said 5 acres and also sent reminder notice to all its members through registered post including the main contesting respondent No.3 (the receipt of the notice was denied by respondent No.3) Subseq11e11tly, in the General Body meeting the society decided that only those members H wllo had paid the minimum amount would be accommodated on the said 5 574 .. 1· M. CO-OP. G.H. SOCIETY LTD. v. P. 0. DELHI CO-OP. TRIBUNAL 575 acres of land and other defaulting members would be eccornmodotoo on t!ie A ... fiats to be constr11cted on the additional land in pbase II construction . - Respondent No.3, a defaulting member, filed a petitim1 before the arbitrator challenging the aforesaid decision, which was dismissed. The Appellate Authority, however, held that in matter of allotment of fiats in a B cooperative society, seniority has to be the prime criteria 11otwithst1mding the default made a p:irtic111llr member. It zlso held tb11t l::p::: of p:iymeat coa!d be dealt with under separate provisions by cherging interest including p::::ml interest or by taking steps for expulsion of the concerned memhl!r: The Higb Court upheld this decision. Hence this appeal. On lnhalf of t!ne respondent it WllS contended thllt there WllS no provbi@n c except Rule 36 under which the society could have dealt with the present case and under this Rule when a member defaults he cou!d only be expelled - following the procedure laid down therein; that the General Body resolution directing those who were defaulters to be eccommodated in phese II was illegnl and that the decision regarding relegation of respondent No.3 was D not on the agenda of the Genernl Body Meeting. ~ Allowing the appeal, this Court HELD: 1. Cooperative society is formed with tile l11udabfo objective to inculcate spirit to work in a group freely for rendering benefit to its members E through the cooperative contributions • This is only pos§ible by conferring wide range of discretion to a society, not restricting its discretion by interpreting a law otherwise. Therefore, the power of the society cennot be circumvented within Rule 36 of the Delbi Cooperative Societies Rules, 1973 - in case of default by its member of any of his dues. Such an interpretation F ' would be contradictory to the very cooperi:tive spirit or objectives of the creation of cooperative societies. (583-D-EJ ,~ 2.1. Rule 36 does not take awny discretion of the society to expel n member or not which is preceding the exercise of power under Rule 36. For this there is not~ing under this Rule which either circumscribes or webs G this discretion. Sicce this Rule is for the expufaion of its members, it is stringent in its application. Even after giving opportunity lll:ld even ofter t!ne General Body posses s11ch n resolution, it reqail'C§ llpprovnl of th
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