THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK AND HOUSING SOCIETY LTD. versus SRI ALOKE KUMAR & ANR

Citation: [2022] 13 S.C.R. 1084 · Decided: 13-10-2022 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
1084
SUPREME COURT REPORTS
[2022] 13 S.C.R.
[2022] 13 S.C.R. 1084
1084
THE BENGAL SECRETARIAT COOPERATIVE LAND
MORTGAGE BANK AND HOUSING SOCIETY LTD.
v.
SRI ALOKE KUMAR & ANR.
(Civil Appeal No. 7261 of 2022)
OCTOBER 13, 2022
[UDAY UMESH LALIT, CJI, S. RAVINDRA BHAT AND
J.B. PARDIWALA, JJ.]
West Bengal Co-operative Societies Act, 1940: s. 95 – Dispute
pertaining to co operative societies – Appellant Society to carry
out the demolition/construction of the administrative building entered
into an agreement with the developer – Respondent No. 1, member
of the appellant Society filed a case u/s. 95(1) wherein the arbitrator
passed an award directed that the society to restrain itself from taking
any step towards demolishing the existing Administrative Building
with the developer and a special general meeting be called –
Appellant resolved in AGM to terminate the work orders issued in
favour of the developer and refund the security deposit – However,
the respondent No.1 filed another case on the ground that the former
Award had directed the Society to hold an Special General Meeting
and not an Annual General Meeting – Meanwhile the developer
also filed a matter seeking to injunct the appellant society from
giving effect to the Resolution wherein the parties were directed to
maintain status quo – In the light of the impasse, it was resolved in
the AGM that the Board of the Society to get the administrative
building developed through the developer on the revised terms and
conditions – Appellant society was accorded permission –
Respondent No. 1 then instituted the arbitration execution case in
respect of the award made in the 1st dispute case, which was allowed
– In revision, by the appellant society, the High Court upheld the
said order – Sustainability of – Held: Not sustainable – High Court
erred in holding the appellant Society could not have entered into
an agreement with a third party developer as the Act or the Rules
do not provide for the same – It is too much for the High Court to
expect that all the members of the appellant Society should on their
own contribute and undertake the development of the new
administrative building – Co-operative Society is to function
A
B
C
D
E
F
G
H
1085
democratically and the internal democracy of a society, including
resolutions passed in accordance with the Act, the Rules, and the
bye-laws have to be respected and implemented – General Body of
the Society resolved to appoint the developer, those decisions having
not been challenged at all, the respondent No. 1 being a member of
the appellant Society is bound by the said decisions – Merely because
one single member in minority disapproves of the decision, that
cannot be the basis to negate the decision of the General Body,
unless it is shown that the decision was the product of fraud or
misrepresentation – Redevelopment of the property was necessitated
in view of the dilapidated condition of the building – No provision
in the Co-operative Societies Act or the rules or any other legal
provision which would curtail the right of the Society to redevelop
the property when the General Body of the Society intends to do so
– It is not open to the Court to sit over the commercial wisdom of the
General Body as an Appellate Authority – Thus, the judgment and
order passed by the High Court is set aside.
Allowing the appeal, the Court
HELD: 1.1 The High Court is not correct in saying that
the appellant Society could not have entered into an agreement
with a third party developer as the Act or the Rules do not provide
for the same. It is too much for the High Court to expect that all
the members of the appellant Society should on their own
contribute and undertake the development of the new
administrative building. As regard the total cost of the project, it
is informed that approximately the cost would be Rupees Twenty
Crore. What is in the mind of the respondent No. 1 perhaps is
that the members of the appellant Society should contribute this
amount and undertake the construction rather than involving a
developer and making the entire project a business venture. It
is just next to impossible. [Para 46][1106-D-E]
1.2 In the background of the constitutional mandate, the
question is not what the statute does say but what the statute
must say. If the Act or the Rules or the bye-laws do not say what
they should say in terms of the Constitution, it is the duty of the
Court to read the constitutional spirit and concept into the Acts.
“I

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