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B.b. Chibber v. Anand Lok Cooperative Grp Housing Society Limited & Others

B.b. Chibber
v.
Anand Lok Cooperative Grp Housing Society Limited & Others

(High Court Of Delhi)

Leters Patent Appeal No. 287 of 1996 & 23 of 1997 | 19-03-2001


Arijit Pasayat, C.J.

1. These two appeals under Clause 10 of Letters Patent read with Section 10 of the Delhi High Court Act, 1966 are directed against the common judgment of learned Single Judge in C.W.P. Nos. 60 and 61 of 1987, though challenge is the subject-matter of C.W.P. 60 of 1987.

2. Factual scenario in which the appeals have been filed, sans unnecessary details, is as follows :

Shri B.B. Chibber, appellant in LPA 287/96 was expelled from the membership of Anandlok Cooperative Group Housing Society (hereinafter referred to as the Society) by Resolution dated 16.4.1986. The said resolution was sent to Registrar of Cooperative Societies (in short the Registrar) functioning under the Delhi Cooperative Societies Act, 1972 (in short the) and Delhi Cooperative Societies Rules, 1972 (in short Rules), for approval as required under Rule 36 of the Rules. Disapproval by the Registrar was communicated in terms of letter dated 4.12.1986. Same formed subject-matter of challenge by the Society in C.W.P. 60/87. By impugned judgment, learned Single Judge held that after expiry of six months period stipulated in Rule 36(3) of the Rules, the Registrar became functus officio and could not have passed an order of disapproval. For coming to this decision, learned Single Judge relied on the decision in Balasinor Nagrik Cooperative Bank Ltd. v. Babubhai Shankerlal Pandaya, AIR 1987 SC 849 [LQ/SC/1987/141] . The said view is challenged by B.B. Chibber, appellant in LPA 287/96 and by the Registrar in LPA 23/97.

3. Common stand of the appellants in the two appeals is that ratio of the decision of Balasinors case (supra), has no application to the facts of the present case as the provision which was under consideration before the Apex Court is conceptually different. There is no provision analogous to the deeming provision which was under consideration in the case before the Apex Court. Learned Counsel for the respondent Society, on the other hand, submitted that historical backdrop of Rule 36(3) clearly shows that Legislature wanted a positive action to be taken within a stipulated time and any inaction on the part of the Registrar would automatically lead to the conclusion that resolution by the Society shall have to be deemed to be approved. Though not specifically spelt out, such deemed operation has to be inferred and that would be a harmonious interpretation of the provision. It is also submitted that Rule 36(3), as it stood after amendment w.e.f. 24.5.1982 limits the scope of enquiry by the Registrar. In the case at hand, the Registrar disapproved the resolution on grounds which are not available to be considered in terms of Rule 36(3).

It was submitted that the decision of the Apex Court in Balasinors case (supra), had full application to the facts of the case.

4. In order to appreciate rival submissions it is necessary to take note of Rule 36 which is pivotal provision around which the present dispute revolves. The said provision, prior to its amendment w.e.f. 24.5.1982 reads as follows :

Rule 36. Procedure for expulsion of members

(1) Notwithstanding anything contained in the bye-laws, a member who has been persistently defaulting in payment of dues or the payment of claims, made by a housing society for raising funds to fulfill its objects has been failing to comply with the provisions of the bye-laws regarding sales 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 or 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 :

Provided that no resolution shall be valid, unless the 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 inquiries as he may deem fit, gave his approval and communicate the same to the society and the member concerned. The resolution shall be effective from the date of such 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 re-admission as a member of that society or for admission as a member of 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.

The provision which was under consideration of the Apex Court in Balasinors case reads as follows :

Section 36 Gujrat Co-operative Societies Act, 1961

36. Expulsion of Members(1) A society may by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society :

Provided that no resolution shall be valid unless the member concerned is given an opportunity of representing his case to the general body and no resolution shall be effective unless it is submitted to the Registrar for his approval and approved by him :

Provided further that the approval or disapproval of the Registrar shall be communicated to the society within a period of three months from the date of such submission and in the absence of such communication the resolution shall be defective.

After amendment, Sub-rule (3) read as follows :

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-rule (1) or (2) give his approval and communicate the same to the society and the member concerned within a period of six months. The resolution shall be effective from the date of approval.

5. A comparison of Rule 36 of the Rules and Section 36 of Gujrat Cooperative Societies Act, 1961 (in short Gujrat Act) which was under consideration of the Apex Court, would go to show that there is no prescription in Rule 36 as to the consequences which flow in the event of non-communication by the Registrar either while approving or disapproving the resolution. In Section 36 of the Gujrat Act it was there. In fact the Apex Court has come to the conclusion regarding the officer becoming functus officio in view of the specific provision contained in the second proviso. This is clear from the following observations of the Apex Court :

......After the society communicates a resolution for the expulsion of a member for acts detrimental to the working of the society passed in the manner required by Sub-section (1) of Section 36 to the Registrar for his approval under the first proviso, there is a duty cast on the Registrar to exercise his power of according approval or disapproval within a period of three months from the date of such submission, as provided by the second proviso. According to its plain terms the second proviso places a limitation on the powers of the Registrar. It appears to us that the obvious intention of the Legislature was that once the period of three months stipulated period expires, the Registrar becomes functus officio and his power to accord approval or disapproval to the resolution passed by the Society for expulsion of a member under Sub-section 91) of Section 36 of thelapses.

6. Learned Counsel for the respondent Society submitted that inaction of the Registrar in dealing with the matter within the stipulated period has serious consequences. A person who is found undesirable by the Society may merrily continue to act as a member because of supine indifference of the Registrar. This cannot be the legislative intent. According to him the Court must read into the provision about the deemed approval. We do not find force in the plea, though in a given case inaction on the part of the Registrar may lead to undesirable consequences. But to read into the provision deemed approval is legally not permissible. It can be very well argued that even after taking six months the Registrar does not give his approval, it may be construed that he has not approved the action and in a sense there is disapproval. We do not think it necessary to go into this hypothetical question.

7. The word deemed is used a great deal in modern legislation. Sometimes it is used to impose for the purpose of a statute artificial construction of a word or phrase that would not otherwise prevail. Sometimes it is used to put beyond doubt a particular construction that might otherwise be uncertain. Sometimes it is used to give a comprehensive description that includes what is obvious, what is uncertain and what is, in the ordinary sense, impossible. Legal fiction treating something not done as done requires legislative authority and cannot be indulged in by Court without it. Where the Legislature says that something should be deemed to have been done which in truth has not been done, it creates a legal fiction and in that case the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion. In construing the scope of a legal fiction, it would be proper and even necessary to assume all those facts on which alone the fiction can operate. (See Commissioner of Income-tax, Delhi v. S. Teja Singh, AIR 1959 SC 352 [LQ/SC/1958/139] ). In the words of Lord Asquith, If you are bidden to treat an imaginary state of affairs as real; you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. The statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. [See East End Dwellings Co. Ltd. v. Finshury Borough Council, 1952 AC 109 at p 132=(1951) 2 All.ER 587 (HL)]. The oft quoted paragraph was noticed by the Apex Court in G. Viswanathan v. Speaker TN Legislative Assembly, AIR 1996 SC 1060 [LQ/SC/1996/198] ; PEK Kalliani Amma v. K. Devi, AIR 1996 SC 1963 [LQ/SC/1996/887] ; State of Tamil Nadu v. Arooran Sugars Ltd., AIR 1997 SC 1815 [LQ/SC/1996/1839] , and A.S. Glittre D/5I/S Garonne v. I.T. Commissioner, Karela, AIR 1997 SC 2361 [LQ/SC/1997/623] . When a statutory fiction is enacted, it must be given its full effect and one must not allow ones mind to boggle on the ground that some apparent anomaly may arise from the assumption stipulated. With respect to the law relating to the application of statutory fictions to facts, the Court has got in the first instance to determine what are the limits within which and the purposes for which the Legislature has created the fiction. This may be determined from the actual words used in creating that fiction, and those words must be given their literal and full effect, unless in doing so the purposes of creating the fiction are not achieved. It is rule of interpretation well-settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate. When a statute declares that a person or thing shall be deemed to be or shall be treated as something which in reality it is not, it shall have to be treated as so during the entire course of the proceedings. In Industrial Supplies Pvt. Ltd. v. Union of India, AIR 1980 SC 1858 [LQ/SC/1980/326] , the Supreme Court has tersely put thus : It is now axiomatic that when a legal fiction is incorporated in a statute, the Court has to ascertain for what purpose the fiction is created. After ascertaining the purpose full effect must be given to the statutory fiction and it should be carried to its logical fiction. The Court has to assume all the facts, and consequences which are incidental or inevitable corollaries to giving effect to the fiction. Fiction is an assumption or supposition of law that something which is or may be false is true, or that a state of facts exists which has never really taken place. The state of things does not accord with the actual facts of the case. The fiction in the realm of law has a defined role to play and it cannot be stretched for a point where it loses the very purpose for which it is invented and employed. The fiction is strictly limited to the present and is introduced for the sake of justice. Rule of construction is `hunt in pairs. So in construing a provision creating a statutory fiction, two rules operate : the statutory fiction should be carried to its logical conclusion but the fiction cannot be extended beyond the language of the section by which it is created or by importing another fiction. The solution is found by harmoniously applying the rule. It must be remembered that legal fictions are created for a particular and definite purpose, and they are to be limited to the very purpose for which they are created. They should not be extended beyond that legitimate field. The fiction should, of course, be carried to its logical conclusion, but must be within the framework of the purpose for which it is created. A part is always a part and never the whole, and no amount of fiction can alter that fact. Fiction cannot be resorted to for the purpose of interpreting statutory provisions.

8. At this juncture we may take note of some observations made by the Apex Court in Chet Ram v. Delhi Municipality, AIR 1981 SC 653 [LQ/SC/1980/443] . Rejecting a plea that there is deemed approval when action is not taken by the concerned Authorities, it was held by the Apex Court that when cases are controlled by a tightly woven time-bound programme strongly it indicates Parliaments intent that the concerned matters are of utmost expedition and urgency. When such a stipulation is conspicuous by its absence in another provision, it is not open to a party to claim deemed approval or grant or sanction. The Court was considering Section 313 of the Delhi Municipal Corporation Act, 1957 (in short Corporation Act). Referring to Sub-section (3) of Section 313 it was held that though the Standing Committee was expected to deal with the application, there was no declaration in the provision that if the Committee does not deal with the matter within the prescribed period it would be deemed that sanction has been accorded. This was in juxtaposition to the provisions contained in Sections 336 and 337 of the Corporation Act, where, as indicated above a tightly woven time-bound programme was stipulated.

9. In view of the contextually and conceptually difference in the language of the two provisions, i.e. Rule 36 of the Rules and Section 36 of the Gujrat Act in our view the learned Single Judge was not correct in holding that the Registrar had become functus officio after expiry of six months.

10. However, a point of great importance highlighted by the learned Counsel for the respondent Society needs to be noted. It cannot be said that without a purpose the Legislature fixed a time limit for Registrar to take action. By inaction the Registrar cannot render the provision otiose and ineffective. It would be, therefore, desirable and should be, as a rule of invariable application, that the Registrar should deal with the matter within the stipulated period of six months. That would be in line with intent and purpose of the provision. As indicated above, before amendment, no time period was stipulated, but after amendment in 1982 a time limit was stipulated. That shows the urgency which the Legislature put in such matters. Though we have held that the Registrar does not become functus officio after six months period, nevertheless, desirability of his taking decision within six months cannot be lost sight of. We are sure the Registrar functioning under the statutes shall keep this aspect in view while dealing with the matter relating to Rule 36 of the Rules.

11. During the pendency of the writ petition, without prejudice to the claims involved, the Society was permitted to reconsider the matter. Again, the Society adopted a resolution expelling B.B. Chibber, appellant in LPA 287/96. This, however, has not got approval of the Registrar, and is, therefore, of no consequence.

12. In conclusion the judgment of the learned Single Judge stands set aside. B.B. Chibbers expulsion from the Society pursuant to the two resolutions referred to above is nullified. We do not think it necessary to deal with a plea that Chibbers continuance as a member is undesirable and prejudicial to interest of the Society. That is a matter for the Society and the functionaries under the relevant statutes.

Appeals are allowed to the extent indicated above.

Advocates List

For the Appellant P.L. Sebastian, Advocate. For the Respondents R1, Ramesh Sharma, Sr. Adv. with R.S. Dewan, R2 to R5, Sanjay Poddar, Advocate.

For Petitioner
  • Shekhar Naphade
  • Mahesh Agrawal
  • Tarun Dua
For Respondent
  • S. Vani
  • B. Sunita Rao
  • Sushil Kumar Pathak

Bench List

HON'BLE CHIEF JUSTICE MR. ARIJIT PASAYAT

HON'BLE MR. JUSTICE D.K.JAIN

Eq Citation

2001 4 AD (DELHI) 51

AIR 2001 DEL 348

90 (2001) DLT 652

2001 (58) DRJ 388

2002 (1) RCR (CIVIL) 532

LQ/DelHC/2001/435

HeadNote

Delhi Cooperative Societies Act, 1972 — Expulsion of members — Time limit for Registrar to approve/disapprove resolution of expulsion — No provision in Act, unlike in Gujrat Cooperative Societies Act, 1961, that if Registrar fails to take decision within stipulated period he becomes functus officio — However, desirable that Registrar takes decision within six months from date of resolution, as prescribed under Rule 36(3) of the Delhi Cooperative Societies Rules, 1972 — Registrar's inaction can't render the provision otiose & ineffective — Delhi Cooperative Societies Rules (1972), R. 36(3)