Skip to content


The Government Servants Cooperative Housebuilding Society Ltd. Vs. S.L. Katyal and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 45 of 1966
Judge
Reported in3(1967)DLT657
ActsBombay Cooperative Societies Act, 1925 - Sections 54
AppellantThe Government Servants Cooperative Housebuilding Society Ltd.
RespondentS.L. Katyal and ors.
Advocates: Ved Vyas,; P.C. Khanna and; B. Kirpal, Advs
Cases ReferredRaman Ltd and Sangram Singh v. Election Tribunal
Excerpt:
the power to withdraw a dispute, which had been referred, had nto been specifically conferred upon the registrar under section 54 of the bombay co-operative societies act, 1925 - the section 54 of the act imposed duty on the registrar to decide dispute or to appoint a nominee - it was held that where a registrar had appointed a nominee he could nto direct nominee nto to decide the dispute. - - one of such arreas is stated in the writ petition to be better than the toher area and, it appears, that most of the members were desirous of being alltoted pltos in the better area. copy of this letter was endorsed, amongst tohers, to the society. additional member, board of revenue, behar for the proposition that a necessary party is one without whom no order can be made effectively......filed by the respondent 1n l.p.a. 45/60. the judgment appealed against also disposed of similar writ petitions filed by toher persons bearing nos. ll d and 718-d of 1966. the learned chief justice allowed the writ petitions and issued a direction to the registrar, cooprative societies, delhi, to send back the refeence to mr. tej ram for proceeding with the reference made under section 54 of the bombay cooperative societies act, 1925. as extended to delhi. (2) the facts which gave rise to the three writ petitions are that the petitioners are members of the government servants cooperative house building society ltd., delhi, hereinafter referred to as 'the society' the society was incorporated under the said act on 1st november, 1950. the society was alltoted two areas of land for.....
Judgment:

S.N. Andley, J.

(1) These appeals are directed against the judgment of the learned Chief Justice dated 30th November, 1966 in Civil Writ No. 611-D of 1966, filed by the Respondent 1n L.P.A. 45/60. The Judgment appealed against also disposed of similar writ petitions filed by toher persons bearing Nos. ll D and 718-D of 1966. The learned Chief Justice allowed the writ petitions and issued a direction to the Registrar, Cooprative Societies, Delhi, to send back the refeence to Mr. Tej Ram for proceeding with the reference made under section 54 of the Bombay Cooperative Societies Act, 1925. as extended to Delhi.

(2) The facts which gave rise to the three writ petitions are that the petitioners are members of the Government Servants Cooperative House Building Society Ltd., Delhi, hereinafter referred to as 'the Society' The Society was incorporated under the said Act on 1st November, 1950. the Society was alltoted two areas of land for alltoment of pltos to its members. One of such arreas is stated in the writ petition to be better than the toher area and, it appears, that most of the members were desirous of being alltoted pltos in the better area. The material bye-law of the Society is bye-law No. 36, which initially provided that ' thalltoment of pltos to members shall be made by the Managing Committee in order of their admission to the Society'. It appears that the Government of India in its Ministry of Works. Production and Supply issued a memorandum dated 29th March, 1952, recommending merger of various Cooperative Building Societies with the Appellant Society and, for that purpose, the Appellant Society took steps to amend its bye-laws so as to allto pltos amongst its members irrespective of their date of joining the society. A general meeting of the Society was held on the 7th June, 1952, in which a unanimous decision was arrived at for amending existing bye-law No. 30. The bye-law No. 36 as amended was as follows:-

'36.The alltoment of pltos to members shall be made by the Managing Committee in accordance with such rules and principles as may be framed by the Committee with the previous approval of the Government of India,, so as to ensure a fair and equitable distribution of pltos among its members.'

(3) This amended bylaw No. 36 was registered with the Registrar, Cooperative Societies, Delhi, hereinafter referred to as 'the Registrar' on or about 20th September, 1952. It was near about this time that S.L. Katyal, the petitioner in writ petition No. 611 D of 1966 was enrolled as a member of the Society. After the lapse of a few years, the Society on 7th August 1964, decided to allto plto by drawing of ltos and it was this decision which gave rise to disputes between the petitioners and the Society. By letter dated 25th August, 1964, the petitioner in Civil Writ No 718-D of 1966 (Bago Mal Narain Das Mallani) prtoested to the Society. Bago Mal Narain Das Mallani followed this prtoest by writing a letter dated 5th January, l965 to the Assistant Registrar challenging the aforesaid decision of the Society and urging the adoption of the principle of 'first come first served' and further praying for arbitration under the provisions of the Act. It appears that the Registrar did nto take any action upon this request. In fact the Society persisted in enforcing its decision to draw ltos and on 23rd March, 1965, informed its members that ltos will be drawn on l6th April, 1965. Ltos were drawn as intimated and, it is the common case of the parties, that none of the petitioners were lucky enough to get an alltoment. If was then that the petitioner in Civil Writ No. 611-D of 1966, (S. L. Katyal) addressed a letter dated 25th August, 1965, to the Society stating that the mathod of drawing ltos for alltoment of pltos was '-nto only unfair but illegal a id against the Law of the Coun. try'. A copy of this letter was sent to the Registrar with a request 'to admit the case for arbitration under section 54 of the Bombay Cooperative Societies Act (VII of 1920) as extended to the State of Delhi and appoint a nominee to decide this issue.' In pursuance of this request the Registrar appointed Tej' Ram as his nominee and, by his letter dated 22nd December, 1985, requested the said nominee to decide the cases of the various petitioners. Copy of this letter was endorsed, amongst tohers, to the society. On 31st December, 1965, the Society wrtoe to the Assistant Registrar pointing out that bye-law No. 36 had been amended on 20th September, 1952 and requesting the Assistant Registrar to consider whether a dispute had at all arisen between the Society and any individual member or members. Thereupon, the Registrar wrtoe a letter dated 7th January, 1966 to Tej Ram his nominee to return all the 5 cases, pending for decision against the Society 'as there are certain legal complications...............' By his letter dated 5th March, 1966, the petitioner wrtoe to the Registrar to 'reverse the withdrawal' but on 25th April, 1906, th3 Registrar informed the petitioner that the bye-laws of the Society have been amended in connection with the alltoment of pltos and 'no arbitration lies after the amendment of bye-laws.'

(4) Writ petition No. 611-D of 1966 by S.L. Katyal was filed in the month of July, 1966 and the toher writ petitions followed thereafter. The principal point made in the petitions was that the withdrawal of the dispute by the Registrar was illegal and ultra vires. Counter affidavits were filed on behalf of the Society justifying the withdrawal by the Registrar and taking various toher pleas.

(5) The points which were argued before the learned Chief Justice at the time of the hearing of the writ petitions, as appearing from his judgment were-

(1)whether the Registrar, who had referred the; dispute to his nominee under section 54 of the said Act was competent to withdraw the reference from the persan to whom it had been referred ; (2) that the petitioners were estopped from contending that the Registrar was incompetent to withdraw the reference once made by him to his nominee on the ground that the petitioners were all present at the time of the taking of the ltos and had nto raised any objection thereto; (3) that the petitions were incompetent as the petitioners had toher adequate alternative remedies by way of appeal and revision under the said Act ; and (4) that the members to whom the pltos had been alltoted had nto been imp leaded even though they were necessary parties, thereby rendering the petitions as nto maintainable.

(6) Mr. Veda Vyasa, learned counsel for the Society, has urged the following points before us, namely,-

(1)that the members to whom the pltos had been alltoted, were necessary parties and nto having been imp leaded, the petitions were nto maintainable; (2) that the petitioners' conduct in taking part in the alltoment without objection disentitled them to any relief , (3) that there was great delay in filing the petitions as also in making the application to the Registrar for a reference to arbitration ; and (4) that the Registrar had the power to withdraw the reference as the power to refer contains by implication the power to withdraw.

(7) On the first point, Mr. Veda Vyasa has relied upon the decision of the Supreme Court in Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue, Behar for the proposition that a necessary party is one without whom no order can be made effectively. According to his contention, no effective order can be made in the writ petitions unless the members to whom the pltos have been alltoted were made parties. He says that it was a dispute between those members to whom pltos had been alltoted and the toher members to whom pltos had nto been alltoted. We are unable to hold that the members to whom the pltos had been alltoted are necessary parties in the writ petitions. What has been challenged by the writ petitions is the power of the Registrar to withdraw a reference which has been made by him of a purported dispute under section 54 of the said Act. The alltoment as such has nto been sought to be set aside in the writ petitions. That would be a matter for decision by the nominee or by the arbitrati nominee or by arbitrators, when they take proceeding in pursunace of section 54 of the said Act. It is the Society alone which requested the Registrar for withdrawal of the reference and the issue whether the withdrawal is legal or nto is an issue only between the petitioners and the toher members of the Society. The decision of their Lordships of the Supreme Court above cited cannto help the Society as in that case the person in whose favor a country liquor shop had been settled was nto made a party in the writ petition which was filed by antoher person for the alltoment of that very shop. I may add that the Society had, in its counter-affidavit, disclosed all the facts which could have been disclosed by its members. Really speaking the arguments addressed by the Society comprised all the arguments that could possibly have been addressed by the members if they had appeared individually. We are, thereforee, of the opinion that the members to whom alltoment had been made are nto necessary parties to the petitions.

(8) The next point urged by Mr. Veda Vyasa is that the petitioners having themselves taken part in the drawing of ltos for the alltoment of pltos without objection are estopped from claiming any relief. The principal of estoppal applies only when one person has by his act intentionally caused or permitted antoher person to believe a thing to be true and to act upon such belief. In Dhiyan Singh v, Jugal Kishore. it has been observed that before any estoppal can arise, there must be first, a representation of an existing fact as distinct from a mere promise defuture made by one party to the toher; second, that the toher party believing it, must have been induced to act on the faith of it ; and third, that be must have so acted to his detriment. We do nto see how this principle can be availed of by Mr. Veda Vyasa. As stated above, Bago Mal Narain Das Mallani had prtoested to the Society by his letter dated 25th August, 1964, about giving ago by to the rule of 'first come first served' and, by his letter dated 5th January, 1933, had written to the Registrar to arbitrate in this matter. The Society did nto change their position and persisted in drawing Jtos which they ultimately did. In any case, the proper forum before which the plea of estoppal can be raised would be the Registrar or his nominee or the arbitrators appointed under section 54 of the Act. We, thereforee do nto find any substance in this plea.

(9) The third contention raised by Mr. Veda Vyasa is that the petitioners were guilty of delay in asking for the reference under section 54 of the Act and in filing the writ petitions. He has cited authorities for the proposition that if there is unreasonable delay in the taking of any action by a petitioner, or if there is no Explanationn for the diilay, the High Court should nto grant him any relief. The authorities are-

(1)Om Parkash Bhardwaj v The Union of India (2) State of Madhya Pradesh v. Bhailal Bhai. (3) Gurmej Singh v The Eiectol Tribunal Gurdaspvr (4) M/s. Aeron Steel Rolling Mills, jullnlur v. State of Punjab. (5) Dina Natha v. Union of India'.

The proposition cannto be taken exception to, but the question is whether there is either unreasonable or unexplained delay or any delay, either in the petitioners' asking for a reference, or in the filing of the writ petitions. I may add that the learned Chief Justice when dealing with the matter exercised his Jurisdiction and decided the controversy between the parties on merits. In such a situation particularly when the argument of delay was nto addressed to the learned Chief Justice, we do nto see why we should interfere in appeal with the exercise of Jurisdiction by the learned Chief Justice, who dealt with the merits of the controversy and who also exercised his discretion in granting relief to the respondents.

(10) With regard to the first argument, we have already pointed out that Bago Mal Narain Das Mallani had prtoested to the Society by his letter dated 25th August, 1964, against the Society's decision to allto pltos by drawing of ltos and had further nto only prtoested to the Registrar by his letter dated 5th January, 1965, but had also requested the registrar to admit the case for a reference. In our opinion, the petitioners cannto be held to be guilty of delay in asking for a reference from the Registrar, the second aspect of delay is with respect to the filing of the petitions in July/August, 1966, whereas ltos had been drawn on 16ih oi April, 1966, and the withdrawal by the Registrar had come about on 7th January, 1966. Here again, it appears that after the withdrawal by the Registrar on the 7th January, 196 J, a prtoest had been lodged by the petitioners on 5th March, 1966, and it was only on 25th April,l.l966, that the Registrar had conveyed his decision that the withdrawl was justified. Under the circumstances, it could only be on 25th April, 1966, that the petitioners finally came to know that they will nto get any relief at the hands of the Registrar. Taking int.) conside ation the fact that the High Court closes for the summer vacation at the end of May and reopen only about the middle of July, there is no question, in cur opinion, of any delay in the filling of the petitions in July/August, 1966. We may also mention that the ground of delay does nto appear to have been argued by the Society before the learned Chief Justice.

(11) The last point which has been urged by Mr. Veda Vyasa is that the Registrar had the power to withdraw the reference as the power to refer contains, according to him, the power to withdraw. The material part of section 54 of the Act provides as under :-

54.Arbitration-If any dispute, touching the constitution or business of a Society arises between members or past members of the Society or persons claiming through a member or past member or between members or past members or persons so claiming and any officer, agent or servant of the Society (past or present) or between the Society or its committee and any officer, agent, member or servant of the Society (past or present), it shall be referred to the Registrar for decision by himself or his nominee, or if either of the parties so desires, to arbitration of three arbitrators, who shall be the Registrar or his nominee and two persons, of whom one shall be nominated by each of the parties concerned.'

(12) The power to withdraw a dispute which has been referred has nto been specifically conferred upon the Registrar. The language of the section means that the reference is by one of the parties to the dispute. When the matter has been referred by one of the parties to the dispute, the Registrar may decide the dispute himself or may appoint a nominee for the purpose. The section imposes a duty and an obligation upon the Registrar to decide the dispute and the only option left to the Registrar is either to decide by himyself or to appoint a nominee. The Registrar: cannto, in our opinion, refuse to decide because a duty is cast upon him by the statute to decide. Similarly, in a case where he has appointed , nominee, the Registrar cannto direct the nominee nto to decide the dispute. This interpretation is further reinforced by the fact that at the option of any of the parties to the dispute, a demand can be made for the appointment of two Arbitrators in addition to the Registrar or his nominee. Once such a demand is made by any of the parties, the provisions of the Arbitration Act, 1940, apply. Section 46 of the Arbitration Act, , provides The provisions 'of this Act......shall apply to every arbitralion under any toher enactment for the time bein.g in force, as if the arbitration were pursuant to an arbitration agrement and as if that toher enactment were an arbitration agreement.' The application of the Arbitration Act would lead to the application of its section 5 which provides -

'THEauthority of an appointed arbitrator or umpire shall nto be revocbable except with the leave of the Court unless a contrary intcntirin is expressed in the arbitration agreement' There is no contrary intention expressed' in section 54 or any toher section of the Bombay Cooperative Societies Act, and the inevitable result Is that section 54 becomes the arbitration agreement., That being so, the Registrar cannto revoke or withdraw the reference which can be done only by the 'Court' contemplated by the Arbitration Act, 1910. The Registrar or his nominee or the Arbitrators appointed at the option of any of the parties are merely arbitrators and can have ni power to revoke a reference which has been made in pursuance of section 54 of the said Act. In our opinion, there is nto only .no implied power in the Registrar to withdraw a reference, but the said provisions of the Arbitration Act, 1940, contain express provisions pointing to the contrary.

(13) Antoher argument addressed by Mr. Veda Vyasa, is that Jurisdiction in this case should nto have been exercised as there was no substantial in justice caused to the petitioners. . He says that the drawing of ltos gave the petitioners equal opportunity in the matter of alltoment. The argument in this form again was nto addressed by the petitioners before the learned Chief Justice at the time of hearing of the petition. In any case, the question for consideration is whether or nto, the withdrawal of the reference by the Registrar was legal or intry virus or nto. We- do nto see how the principle laid down by their Lordships of the Supreme Court in Veerappa Pillai v. Raman & Raman Ltd and Sangram Singh v. Election Tribunal, Ktoah, can be complied in the circumstances of this case, inview of our finding that the Registrar had no power at all to withdraw the reference.

(14) We, thereforee, dismiss these appeals but in the circumstance of the case, leave the parties to bear their own costs.

S.K. Kapur, J.

(15) I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //