PREM JEET KUMAR versus SURENDER GANDOTRA AND ORS.

Citation: [1991] 3 S.C.R. 782 · Decided: 27-08-1991 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
PREM JEET KUMAR 
v. 
SURENDER GANDOTRA AND ORS. 
AUGUST 27, !991 
[L.M. SHARMA AND J.S. VERMA. JJ.I 
Delhi Co-Operative Societies Act, 1972. Sections 59 and 60-
Dispute relating to irregularities in purchase of building materials 
by the past Managing Committee-Whether falls within the ambit of 
Section 60. 
On a complaint made by the Managing Committee of the 6th 
respondent Cooperative Housing Society, the third respondent, 
Registrar, Cooperative Societies, referred the dispute relating to irre-
gularities in the purchase of building material for construction of flats 
D for members of society by the past Managing Committee, of which the 
appellant was the President at the relevant time, to arbitration. The 
first re•pondent-Arbitrator, gave his ex-parte award, on the failure of 
the ajlpellant and another person to file their reply to the claim of the 
claimant society, and directed the appellant and the other person to pay 
E 
F 
G 
the society certain sum with interest thereon. 
· 
The appellant challenged the award before second respondent, 
the Delhi Cooperative Tribunal, which dismissed the samr holdin~ that 
the Arbitrator's act of proceeding ex-parte was justified and that the 
appeal had no merit. The appellant's writ petition was also dismissed by 
the High Court. 
In the appeal before this Court on behalf of the appellant it was 
contended that it was Sec. 59 dealing with surchage which was applic-
able to the instant case and not Section 60, which pertained to settlement 
of disputes by arbitration since the dispute in question was one which 
could not be referred to arbitration in terms of Section 60 of the Act. 
On behalf of the contesting respondents ii was submitted that it 
was Section 60, which was applicable and not Section 59. 
Dismissing the appeal, this Court, 
H 
HELD: 1.1 Sub-Section (I) of Section 60 of the Delhi Co-operative 
782 
-,._. 
. 
,.1-
." ,l(_ 
t 
PREM JEET v. SURENDER GANDOTRA [VERMA. J.I 
783 
Societies Act, 1972 indicates the true scope of the Section 60, while 
sub-section (2) is merely illustrative, and not exhaustive. Clause (c) of 
sub-section (!) expressly provides that if any dispute touching the 
constitution/management or the business of the cooperative societ~ 
arises between the society or its committee and any past committee. an) 
officer, agent or employee or any past officer of·the society, the dispute 
should be referred to the arbitration. [787H, 788A-B, D] 
J.2 In the instant case, the dispute, viz. irregularities in the 
purchase of building material for construction of flats for the members 
of the Society by the previous Managing Committee, touches the 
management of the Society and falls within the ambit of Section 60 of 
the Act. The third respondent, Registrar, Cooperative, Societies was. 
therefore, right iu referring the dispute to arbitration. [789D-F] 
Pentakota Srirakulu v. The Cooperative Marketing SvCiet.)" L!J .. 
[19651lSCR186, followed. 
A 
B 
c 
ChanJ,,. Nagar Cooperative House Building Society L!J. and 
D 
Anr. v. Ashok Ohri, AIR 1976 63 Delhi 239, disapproved. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3237 
of lYY L 
From the Judgment and Order dated 10.10.1990 of the Delhi 
E 
High Court in C. W. No. 3204 of 1990. 
Soli J. Sorabjee, S.V. Deshpande and C.L. Sahu, Advs. for the 
Appellant. 
Dr. Y.S. Chi tale, and S.K. Sinha for the Respondents. 
The Judgment of the Court was delivered by 
VERMA, J. Leave is granted. 
F 
Respondent No. 6, Jupiter Cooperative Group Housing Society 
G 
Limited, was formed in 1979 for providing houses to its 130 members 
including the appellant Prem Jeet Ku.mar. The appellant was earlier 
the Secretary and then the President of the Society till 1985, by which 
time substantial construction had been completed. The.members were 
allotted three-room flat for a sum of Rs. I, 10,000. In August, 1985, 
Respondent No. 3, Registrar, Delhi Cooperative Societies, appointed 
H 
A 
B 
c 
D 
E 
F 
G 
H 
784 
SUPREME COURT REPORTS 
[1991] 3 S.C.R. 
an Administrator to look into the affairs of the Society since the appel-
lant and other office bearers had held the office for more than two 
terms. The controversy giving "rise to this proceeding relates to the 
alleged discrepancy regarding purchase of some building material in 
· January, 1984, for the construction of flats for members oi the Society 
in Vikas Puri at New Delhi. The New Managing Committee of the 
Society formed in September, 1986, complained to th

Excerpt shown. Read the full judgment & AI analysis in Lexace.