Delhi High CourtR.K. Aggarwal vs Registrar Co-Operative Societies, ... on 29 July, 1991Equivalent citations: 45(1991)DLT105Author:B.N. KirpalBench:B.N. Kirpal,D.K. JainJUDGMENT  

 B.N. Kirpal, J.(1) This is a Utters Patent Appeal challenging the judgment of a single Judge of this Court, whereby the writ petition filed by the appellant challenging his expulsion from the respondent Cooperative Society had been dismissed. I   

(2) Briefly stated, the facts are that the appellant became a member of the New Indraprastha Cooperative House Building Society Ltd., sometime in the year 1964. The said Society raised demands and the appellant had till 1973, paid a sum of Rs 3.837.00 . At times there was delay in the payment by the appellant, despite notices having been issued by the respondent Society,   

(3) It seems that there were three more demands which were raised on 1st December, 1972, 1st June, 1973 and May. 1974 for a sum of Rs. 750.00 on each occasion. Thus a total sum of R.S. 2,250.00 was not paid by the petitioner. Action was sought to be taken to expel the petitioner from the; membership of the Society but the petitioner rushed to the Civil Court and obtained interim injunction to the meeting which was scheduled to be held, in this connection on 22nd July, 1973. The interim injunction was thereafter vacated and the petitioner was once again required to pay the amount demanded by the Society. When the petitioner failed to make the payment, a notice dated 10th August. 1974 was alleged to have been sent to the petitioner by registered A/D and also under Certificate of Posting. This was a show cause notice, requiring the petitioner to attend the General Body Meeting on 25th August, 1974 and to explain as to why his membership should not be terminated. The notice which was sent by registered A/D was returned unserved with the remarks that the petitioner had gone out of station. The Society then passed the resolution on 25th August, 1974 expelling the petitioner from its membership.(4) According to the provisions of Rule 36 of the Delhi Cooperative Societies Rules. 1973, no member can be expelled without the prior approval of the Registrar, Cooperative Societies. In order to comply with this provision the Society approached the Registrar for granting the approval. The appellant on 17th September, 1974, filed representation before the Registrar, Cooperative Societies, challenging his expinsion. One of the contentions raised was that no valid notice under Rule 6 has been served on him. It seems that the Registrar gave opportunity to fie appellant to be heard. Perhaps on one or two occasions the appellant die appear. It appears that during the course of these proceedings, the appellant was required by the Registrar to file arbitration proceedings. The appellant did not file any arbitration proceedings challenging the resolution of the Society expelling him from its membership and ultimately on 19th January, 1979, the Deputy Registrar, Cooperative Societies, granted approval to the Society to expel the appellant from its membership. In this letter it was stated that as the appellant had not filed the arbitration case within the prescribed limit, therefore, his expulsion was approved.(5) After the aforesaid letter dated 19th January, 1979 was issued the appellant filed an application seeking arbitration, under Section 60 of the 107Delhi Cooperative Societies Act. In this application, arbitration has been requested by the appellant to go into the question with regard to the validity of his expulsion from membership. There is no information on the record as to what has transpired further with regard as to request of the appellant.(6) The appellant then filed a writ petition challenging the decision of the Society expelling him from membership and also challenging the approval vide order dated 19th January, 1979.(7) Y Learned Single Judge of this Court referred to the facts alleged by the respondents and dismissed the writ petition for three reasons. The first ground for dismissal of the writ petition was that the appellant had been guilty of suppressing material acts. The second ground for dismissing the writ petition was that the appellant had not disclosed as to what had happened to the arbitration proceedings and in any case the appellant had alternative remedies open to him by way of appeal to the Lt. Governor underSection 76or revision underSection 80. On merits also. the learned Single Judge came to the conclusion that the notice dated 10th August, 1974 turn the meeting to be held on 25th August, 1974 had been served on the appellant and the appellant chose not to attend the same. It was found that the appelant was in the habit of not receiving notices and not paying the dues and, on the contrary the appellant filed suits in 1971 and 1973 which, according the the learned Single Judge, were frivolous. He accordingly came to the conclusion that the decision to remove the appellant from the membership of the Society was fully justified.(8) The aforesaid judgment has been challenged before us. It is submitted by the appellant, appearing in person, that the learned Single Judge has not gone into the question of the legality and validity of the order dated 19th January, 19 79 of the Deputy Registrar. It is further submitted by him that there has been no suppression of material facts. With regard to alternative remedy, the contention of' the appellant is that there is no adequate remedy which was available to him.(9) The learned Counsel for the respondents has supported the judgment of the learned Single Judge and contended that no case has been made out for avowing the appeal.(10) Before dealing with the rival contentions, it is necessary to refer to Rule 36 of the Delhi Cooperative Societies Rules, 1953. "36. procedure for expulsion of members. (1) Notwithstanding anything contained in the bye-laws any member who has been presciently defaulting in payment of hi dues or the payment of claim made by a housing society for raising funds to fulfill its objects, has been failing to comply with the provisions of the bye-law regarding sales of his produce through the society or, other matter in connection with his dealings with the society or who, in the opinion of the committee, has brought disrepute to the society or he has done other acts detrimental to the interest of .proper working of the society, the society may by a resolution passed by a majority of not less than three fourth of the members entitled to vote who are present at a general meeting held for the purpose, expel a member from the society. 108 Provided that no resolution shall be valid, unless that member concerned has been given an opportunity of representing his case to the general body and no resolution shall be effective, unless it is approved by the Registrar. (2) Where any member of a co-operative society proposes to bring a resolution for expulsion of any other member, he shall give a written notice thereof to the President of the Society. On receipt of such notice or when the committee itself decides to bring in such resolution, the consideration of such resolution shall be included in the agenda for the next general meeting and a notice thereof shall be given to the member against whom such resolution is proposed to be brought, calling upon him to be present at the general meeting, to be held not earlier than a period of one month from the date of such notice and to show cause against expulsion to the general body of members. After hearing the member, if present, or after taking into consideration any written representation which he might have sent, the general body shall proceed to consider the resolution. (3) When a resolution passed in accordance with sub-rule (1) or (2) is sent to the Registrar or otherwise brought to his notice the Registrar may consider the resolution and after making such enquiry as to whether full and final opportunity has been given under sub-rules (1) or (2) give his approval and communicate the same to the society and the member concerned with in a period of 6 months. The resolution shall be effective from the date of approval. (4) Expulsion from membership may involve forfeiture of shares held by the member. The share shall be forfeited with the prior permission of the Registrar. In that event, the value of the share forfeited shall be credited to the reserve fund of the society. (5) No member of a co-operative society who has been expelled under the foregoing sub-rules shall be eligible for readmission as a member of that society or for admission as a member or any other society of the same class for a period of three years from the date of such expulsion. Provided that the Registrar may, on an application either by the society or the member expelled and in special circumstances, sanction the re-admission or admission, within the said period of any such member as a member of the said society or of any other society of the same class, as the case may be. Before giving such sanction for re-admission on admission by the Registrar, an opportunity of hearing may be given to both the society and member concerned."(11) The regarding of the aforesaid Rule shows that for the reasons set out in sub-rule (1) of Rule 36, a resolution can be passed by a society for expelling a member. The proviso is material and it stipulates that before any such resolution is passed, an opportunity should be granted to the member concerned to represent his case to the general body. The further requirement such a resolution if passed, should be approved by the Registrar. Sub rule (2) of Rule 36 provides for 30 days notice to be given to the member 109 against whom such a resolution is proposed to be passed. Sub-rule (3) provides for the Registrar giving an opportunity to the member to represent his case but, what is important is that the Registrar has to make enquiry in order to satisfy himself whether full and final opportunity has been given to the member as postulated by sub-rules (1) or (2) of Rule 36.(12) There is no dispute that the appellant had not paid all the dues as demanded by the respondent society. The appellant was challenging two specific actions viz., the decision of the Society taken on 25th August, 1984 to expel him and, secondly, the decision of the Deputy Registrar dated 19th January, 1979 conveying his approval to the cooperative society to expel the appellant. In order to challenge the said actions the appellant was obliged toy give relevant facts. It is no doubt true that in the writ petition it has not been specifically stated that various demands had been raised by the Society, some of which had not been paid by the appellant and, further, the appellant had also not mentioned in the writ petition that in 1971 and 1973, he filed suits and obtained interim injunctions from the Subordinate Judge. Be that as .it may, in our opinion, the action of the appellant in not paying and his decision to obtain temporary injunctions are not relevant for deciding whether the action of the Society in passing the resolution of 25th August, 1974 was in accordance with Rule 36 or not. The appellant has nowhere disputed his liability with regard to the amount claimed by the respondent Society. The contention of the appellant was that even if money was due and payable by him, he could not have been expelled except by passing a resolution in accordance with the provisions of Rule 36. The learned Single Judge fell in error in coming to the conclusion that the writ petition was liable to be dismissed because full facts had not been disclosed by the appellant in the writ petition. The facts with regard to delay or non-payment of the demands and that of filing of the suits are not relevant for determing whether a valid notice under Rule 36 had been issued to the appellant or not.(13) It is not in dispute that no arbitration proceedings are maintainable challenging the expulsion of a member by a Society.Section 60of the Delhi Cooperative Societies Act does not cover such a case. It is no doubt tru that against an expulsion, remedy underSection 76orSection 80of the Ac may be available to an aggrieved member but the availability of an alternative remedy is no bar to the exercise of the jurisdiction underArticle 226of th Constitution when the impugned orders which are passed are in violation of th principles of natural justice and without application of mind. It will be see that the Deputy Registrar had, prior to the passing of the order dated 19t January, 1979, himself advised the appellant that he should resort to arbitration proceedings. After 19th January, .1979, order was passed, the appellar moved a formal application before the Registrar for appointment of an arbitrator under the Delhi (cooperativeSocieties Act. It is not disputed by the Registration in the affidavit filed in reply to the writ petition, that on 20th January, 197 as alleged in the writ petition, the appellant had moved a formal application urging the intervention of the Ragistrar and for appointment of an arbitrate under the Act. An appeal underSection 76can be filed within sixty day because an appeal against the expulsion is maintainable underSection 76the remedy of revision provided bySection 80is not available. The appellant having become barred by time, the appellant had no other remedy except file a writ petition in this Court. The writ petition was admitted and in tl^ circumstances of the case, it was not correct to hold that the appellant h^ adequate alternative remedy. 110   

(14) Coming to merits of this case, and which will have a bearing also on the question of availability of alternative remedy, we find that neither of the two actions taken against the appellant were in accordance with law. It is not in despite that a show cause notice was issued to the appellant on 10th August, 1984. The meeting was scheduled to be held on 25th August, 1984. As we have already noticed. Rule 36(2) requires at least 30 days notice to be given. The sub-rule is mandatory and not directory. By removing the name of a person from the membership, a valuable right is taken away from him. More over, the consequences of expelling a member are serious as is evident from perusal of sub-rule (5) of Rule 36, which provides that when a member is expelled, he cannot be re-admitted to the membership of that Society, at any point of time and nor can he become a member of any other society of the same class for a period of three years from the date of such expulsion. Have consequences, therefore, ensue when a member is expelled.(15) Under these circumstances. Rule 36 has to be strictly complied vith and adhered to by a cooperative society before it chooses to expel a nember. We are not in agreement with the learned Counsel for the respondents hat Rule 36 is directory. In our opinion, it is incumbent upon the Society o follow the letter of law and to comply meticulously with the provisions of rule 36. This admittedly has not been done in the present case. Even if it be assumed though it is denied by the appellant that show cause notices dated 0th August, 1974 were served on the appellant, the infirmity is not cured. The notice was required to be of not less than 30 days before but not such notice fas given. The learned Single Judge did not advert to this requirement of lule 36 and has merely proceeded to decide the question as to whether the notice dated 10th August, 1974 was served on the appellant or not. Having come. to he conclusion that the notice dated 10th August, 1974 was served on the appellant, the learned Single Judge should have then proceeded to decide whether ach service fulfillled the requirement of Rule 36 or not. In our opinion, the laudatory requirement of 30 days as provided by Rule 36(2) was not fulfillled 'herefore, the action taken by the respondent society was non est.   

(16) Coming now to the decision of the Deputy Registrar dated 19th anuary,. 1979, we find that the only reason given for granting permission to dispel the appellant is that the appellant had not filed arbitration case within ie prescribed limit. Prior to the grant of approval for expulsion, there was -o cause of action which the appellant had. He was not disputing the demands f the Society. His challenge was to the threatened expulsion. The expulsion would take effect only when approval was granted under Rule 36(3). The question on of filing arbitration case prior to the grant of approval, therefore, did not rise. We further find that in the affidavit in re"ly, it has been stated on ;half of the Registrar, Cooperative Scotties that : "but the petitioner failed to file his dispute underSection 60of the Delhi Cooperative Societies Act within specified period of 7 days and thus there was no alternative before the Registrar but to approve expulsion resolution of the society."(17) It is clear from the above that the only ground for granting ) Approval was that the appellant herein had failed to file a dispute undersection 60of the Act. While granting approval underSection 36(3)the registrar is duty bound to consider and make enquiry whether the resolution spelling a member has complied with sub-rules (1) and (2) of Rule 3 6 or not he Registrar has to be satisfied that final opportunity as contemplated by two sub-rules has been granted. In th(r) present case, there has been U 111 complete non application of mind by the Deputy Registrar to this aspect of the law. If Deputy Registrar had seen the record, it would have immediately struck him that the provisions of Rule 36 (2) have not been complied with. The reason for granting the approval is not one which is contemplated by Rule 36. The order passed by the Deputy Registrar was without any legal or valid reasons.(18) Under these circumstances, it will not be fair to non-suit and deprive the appellant of a right for not invoking the alternative remedy provided bySection 76of the Act when the decision of the society is in violation of the mandatory provisions of Rule 36 and the order passed by the Deputy Registrar is patently illegal and not in conformity with the provisions of Rule 36(3).(19) For the aforesaid reasons, we, are constrained to set aside the judgment dated 7th April, 1983 of the learned Single Judge and we allow the appeal and quash the resolution dated 25th August, 1974 passed by the Society and the decision dated 19th January, of the Deputy Registrar, Cooperative Societies. The effect of this is that the appellant continues to be a member of the respondent Society and is entitled to all the benefits thereof.(20) The appellant is entitled to costs.