SHRI PAL JAIN Vs. FINANCIAL COMMISSIONER, DELHI
LAWS(DLH)-2007-8-417
HIGH COURT OF DELHI
Decided on August 23,2007

SHRI PAL JAIN Appellant
VERSUS
FINANCIAL COMMISSIONER, DELHI Respondents

JUDGEMENT

- (1.) Rule DB. With the consent of the learned counsel for the parties, the writ petition is taken up for final hearing.
(2.) This writ petition challenges the order dated 2nd December, 2003 passed by the Registrar Cooperative Societies, respondent No. 2 and its affirmation by the Financial Commissioner, respondent No. 1 by its order dated 16th March, 2004
(3.) The facts of case stated briefly are that (i) On 29th December, 1952, the Delhi Peasant Cooperative Multipurpose Society Limited, which is respondent No. 3 herein was constituted. Shri Nathu Mal Jain, who is the deceased father of the petitioner Shri Pal Jain, was one of the founding members of the respondent No. 3 Society, which allotted him a plot of land measuring 23 Bighas and 10 Biswas for agricultural purposes. (ii) In 1957, another Society called Adarsh Farmers Co-operative Multi Purpose Society Limited (hereinafter referred to as the second Society) was constituted and the deceased father of the petitioner also became an ordinary member of the said Society. On 23rd June, 1959, the said second Society ceased to function. On 4th February, 1978, the said second Society was ultimately wound up under Section 63 of the Delhi Cooperative Societies Act, 1978. (iii) Shri Nathu Mal Jain, the father of the petitioner expired on 12th July, 1989 and on 6th October, 1989, the respondent No. 2 in its Board Meeting nominated the petitioner, the only son and legal heir of his deceased father as as bonafide member and bonafide transferee of plot of land allotted to his father. On 9th September, 1991, the aforesaid decision of the Society was conveyed by the then General Secretary of the respondent No. 3 Society to the petitioner. (iv) In 1992, an Administrator of the respondent No. 3 Society was appointed by the respondent No. 2. On 8th February, 1996, the Administrator of the respondent No. 3 Society addressed a communication to the Deputy Registrar, Delhi, making an enquiry about the membership of the Second Society and another Society (Ajudhya Co-operative Multi Purpose Society) in respect of members of the respondent No. 3 Society, including the petitioner. (v) On 19th June, 1998, one Balbir Singh, a member of the respondent No. 3 Society made a complaint to the respondent No. 2 Registrar of Cooperative Societies, seeking the termination of the membership of the petitioner on the plea that Shri Nathu Mal Jain and as his successor-in-interest consequently, the petitioner had forfeited his membership of the respondent No. 3 Society by becoming a member of the Second Society and, therefore, the petitioner was liable to the forfeiture of his membership, as dual membership was contrary to the mandate of the Delhi Cooperative Societies Act, 1972 (hereinafter referred to as the Act). (vi) On 11th May, 2001, a legal notice was dispatched by the counsel for the respondent No. 3 Society to the petitioner seeking a payment of Rs.3622.50 in respect of the plot allotted to the father of the petitioner. (vii) On 1st April, 2002, the respondent No. 2 dropped the proceedings against the petitioner qua the complaint lodged by the said Balbir Singh dated 19th June, 1998, with the observation that the complainant Balbir Singh had no locus standi and consequently directed the respondent No. 3 to examine the issue of dual membership of Shri Nathu Mal Jain, the deceased father of the petitioner within three months from the date of the order. The relevant portion of the order dated 1st April, 2002 reads as follows:- "I have gone through the records available on file and find that the said Society was defunct ab-initio and was subsequently wound up. I also find from the records that while examining the issue administratively also, it is seen that the complainants have no locus standi in the matter because in case of cessation, which is for the Society to decide first, the land would be transferred back to the Society for allotment amongst other eligible members in case it was so decided. In view of the above discussion, I N. Diwakar, Registrar Cooperative Societies, Govt. of NCT of Delhi hereby drop the present proceedings and direct the Managing Committee of the Society to examine the issue of dual membership at their end first within a period of three months from the issue of this order." (viii) On 10th June, 2002, the General Secretary of the respondent No. 3 society communicated to the respondent No. 2 the decision of terminating the membership of the petitioner, on the basis of violation of Rule 28 of the Delhi Cooperative Societies Rules, 1973 (hereinafter referred to as the Rules), on the ground of dual membership. The relevant portion of the said decision dated 10th June, 2002 reads as follows:- "Rule 28. PROHIBITION OF MEMBERSHIP IN CO-OPERATIVE SOCIETIES. "No individual/primary Society, being a member of a primary co-operative Society/federal Society of any class shall be a member of any other co-operative Society of the same class without the general or special permission of the Registrar, and where an individual /Primary Society has become a member of two co-operative societies of the same class, either or both of the co-operative societies shall be bound to remove him from membership after giving proper opportunity to such individual/Primary Society in writing." In view of the above discussion and in light of the concerned rules, it has been proved that Shri Nathumal Jain was a member of two societies at the same time having similar aims and objectives which is contrary to the co- operative rules and not maintainable. As the membership of Shri Nathumal Jain was illegal, unlawful and disqualified in both the societies as he was having dual membership at the same time, his nominee Shri Sripal Jain cannot qualify for the membership on behalf of the membership of his father." (ix) An appeal was preferred by the petitioner to the Registrar Cooperative Societies against the said order dated 10th June, 2002. The petitioner in the said appeal to the Registrar not only relied upon the judgment of the Hon'ble Supreme Court in Jagdish Singh vs. Lt. Governor, Delhi and others, (1997) 4 SCC 435, but also annexed a copy of the said judgment along with the appeal. The Registrar by the impugned order dated 2nd December, 2003, recorded the following findings:- "...........He further made reference to the Hon'ble Supreme Court's decision in the civil appeal No. 1866 of 1997 in the matter of Jagdish Singh v/s Lt. Governor, Delhi and Ors. Meanwhile, Sh. Balbir Singh, the complainant also filed application for becoming the necessary party in the matter which was allowed by this Court. ............... I have carefully considered the respective stand of the appellant and the Society and also considered the material on record. It has been found that Late Sh. Nathu Mal Jain, the original member, concealed the fact that he is the member of another Society of the similar category and acquired the membership illegally thereby suppressing material and true facts. It has also been revealed from the records that Late Sh. Nathu Mal Jain was a member of two societies at the same time having similar aims and objectives which is clearly in violation of rule 28 of DCS Rules, 1973. The same has also been admitted by the appellant, Sh. Shree Pal Jain in his reply to the Society. Moreover, the reply of the appellant was not satisfactory although he was provided with sufficient opportunities by the Society as prescribed under law. As the membership of Late Sh. Nathu Mal Jain was illegal, unlawful and disqualified as he was having dual membership at the same time, his nominee Sh. Shree Pal Jain cannot qualify for the membership on behalf of his father. Accordingly, I N. Diwakar, Registrar Coop. Societies, Govt. of NCT of Delhi hereby reject the appeal filed by Sh. Shree Pal Jain u/s 76 of DCS Act, 1972 and cease his membership from the Delhi Peasants Cooperative Multipurpose Society Ltd. under the provisions of Rule 28 of Delhi Cooperative Societies Rules, 1973 with immediate effect." (x) The aforesaid order was challenged in appeal before the Financial Commissioner where, inter-alia, one of the grounds taken was that the judgment of the Hon'ble Supreme Court in Jagdish Singh's case (supra) though placed before the Registrar and noted by him, was not even dealt with. The said appeal case No. 20/04-CA under Section 76(1)(e) of the DCS Act, 1972 stood dismissed by the Financial Commissioner by the impugned order dated 16th March, 2004 The entire reasoning of the Financial Commissioner is to be found in the following terms:- "3. The main contention of the counsel for the appellant is that late Sh. Nathu Mal Jain was a member of the two societies at the same time but one of them was ab initio defunct. Hence cessation of his membership of the other Society as ordered by the RCS was wrong. 4. I find that late Sh. Nathu Mal Jain concealed the fact that he was member of another Society of similar category and acquired membership of Delhi Peasants Cooperative Multi Purpose Society Limited illegally by suppressing material facts. As membership of two societies at the same time having similar aims and objectives is not permissible under Rule 28 of DCS Rules 1973, the impugned order passed by the RCS is fair. The same is upheld and the appeal is dismissed in limine.";


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