$~67
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 4421/2024 & CM APPL. 18064/2024
ASHOKA ENCLAVE COOP. G/H SOCIETY LTD. THROUGH ITS
PRESIDENT /SECRETARY ..... Petitioner
Through: Mr. M.P. Sahay, Ms. Awanitika and
Mr. Sachin Kharb, Advocates
versus
REGISTRAR COOPERATIVE SOCIETIES DELHI & ORS.
..... Respondents
Through: Mr. Udit Malik, ASC for R-1
th
% Date of Decision: 28 March, 2024
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
MANMOHAN, ACJ : (ORAL)
1. The present petition has been filed by the Society under Article 226 of
th
the Constitution of India to challenge the order(s) dated 13 March, 2024
- Respondent No. 2,
(‘impugned orders’) passed by the Returning Officer
whereby the said Respondent has cancelled the name of Respondent No. 3
and Respondent No. 4 from the list of defaulters of the Society and thus,
st
entitling them to vote in the elections scheduled on 31 March, 2024.
2. It is stated that the Petitioner- Society has filed a claim petition dated
th
11 June, 2023 before Respondent no. 1 with respect to the pending dues
and default of Respondent No. 3 under section 70 of DCS Act, 2003
(‘Act of
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By:Rashmi Dabas
Signing Date:30.03.2024
17:28:53
for seeking reference to arbitration. Similarly, the Society has also
2003’)
st
filed a claim petition before the Respondent no. 1 on 31 December, 2023
with respect to pending dues and default of Respondent No. 4 for seeking
reference to arbitration.
2.1. It is stated that Respondent No. 2 has been appointed on 20th
February 2024 as a Returning Officer for holding elections of the
Management Committee of the Petitioner-Society. It is stated that
Respondent Nos. 3 and 4 names appear in the list of defaulters and thus,
they are not entitled to vote in the elections.
2.2. Vide separate representations dated 06 th March 2024, Respondent Nos.
3 and 4 requested the said Returning Officer for cancellation of their names
from the list of defaulters of the Society. It was stated by Respondent Nos. 3
and 4 therein that the demands raised by the Managing Committee are
fictitious, unjustified and disputed. It was further stated that the claim
petitions filed by the Society are pending reference to arbitration and there
has been no final adjudication.
2.3. It is stated that Respondent No. 2 has allowed the said representations
and removed the names of Respondent Nos. 3 and 4 from the list of
defaulters, thereby entitling them to cast a vote in the forthcoming elections.
It is stated that the Petitioner-Society is aggrieved by the said action of
Respondent No. 2.
3. Learned counsel for the Petitioner states that the impugned order(s),
th
both dated 13 March, 2024, passed by Respondent No. 2 are illegal. He
states that since claim petitions stood filed before the RCS, the reliance
placed by Respondent No. 2 on the definition of defaulter in Rule 2(e) of the
DCS Rules, 2007 is incorrect.
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By:Rashmi Dabas
Signing Date:30.03.2024
17:28:53
3.1. He states that the dues recoverable from the said members i.e.,
Respondent Nos. 3 and 4 are duly reflected in the books of account as well
as in the balance sheet and recovery proceedings have been initiated before
the RCS. He states that Respondent Nos. 3 and 4 have been rightly placed in
the defaulters list in accordance with Section 25(d) of the Act of 2003. He
states that the defaulter is not entitled to voting rights as per the said
provisions. He also relies upon paragraph 10(d) of the Handbook for
Returning Officer.
4. In reply, learned standing counsel for Respondent No. 1- RCS states
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that since the elections are scheduled for 31 March, 2024 and the order has
been passed by the Returning Officer, the present petition should not be
entertained as it would derail the scheduled elections.
5. We have heard the learned counsel for the parties and perused the
record.
6. The issue raised by the Petitioner- Society in the present petition is
with respect to the validity of the order(s) of the Returning Officer deleting
the names of Respondent Nos. 3 and 4 from the defaulters list.
7. The Petitioner has relied upon the guidelines set out in the Handbook
1
for Returning Officer
(‘Handbook’) issued by RCS and the Notice dated
rd
03 March, 2024 issued by the Respondent No. 2- Returning Officer calling
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a Special General Body Meeting of the Society on 31 March, 2024 for
conducting elections of the Managing Committee.
8. Guideline at paragraph 9 of the Handbook stipulates that a list of all
the enrolled members of the Society; as well a separate list of members who
1 Annexure P-12
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By:Rashmi Dabas
Signing Date:30.03.2024
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are in default, is to be prepared by the Managing Committee. The named
defaulting member is however allowed to clear his/her dues before the date
of filing of nomination. This guideline corresponds to Clause 3 of Schedule
II of the DCS Rules, 2007. In the present case, to this effect the Notice dated
rd
03 March, 2024 issued by the Returning Officer also grants an opportunity
to the defaulting member against whom dues are pending, to clear the said
dues before filing nomination or casting the vote.
9. Guideline at paragraph 10 of the Handbook sets out which of the
enrolled members are entitled to vote and it corresponds to Section 25 of the
Act of 2003. The statutory provision of Section 25 of the Act of 2003 and
Rule 34 of the DCS Rules, 2007 contemplate that the named defaulting
members will not be entitled to vote in the election of cooperative society.
10. Pertinently, the phrase default has been statutorily explained in the
‘ ’
said Section 25 of the Act of 2003, Rule 2(e) of the DCS Rules, 2007 and
Paragraph 10 of the Handbook. The said definition has been considered by
the Returning Officer, while adjudicating upon the representations of
Respondent Nos. 3 and 4 to hold that in the absence of an award passed in
favour of the Society upholding their demand for the alleged dues, the
inclusion of Respondent Nos. 3 and 4 in the defaulter list is not made out.
11. The definition of default in Explanation I to Section 25 (d) of the Act
of 2003 and defaulter at Rule 2(e) of the DCS Rules, 2007 are relevant and
the relevant portion of the same reads as under:
25. Votes of members.- Every member of a co-operative society shall have
“
one vote in the affairs of the co-operative society :
Provided that
–
...
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By:Rashmi Dabas
Signing Date:30.03.2024
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d) if a member is in default in payment of the sum demanded by the co-
operative society or has transferred his interest in a co-operative society to
any other member (or to any other person without the approval of the
competent authority he shall have no voting right in the general body
meeting of the co-operative society);
...
(e) ...
Explanation [I]. - Default means any default in payment of loan installment,
land money, construction money and annual subscription payable as
provided in the bye-laws of a co-operative society for which due notice for
payment has been served on the member or an award has been passed for
recovery of such sum.”
Rule 2(e) of the DCS Rules reads as under:
-operative society, member or other person
““Defaulter” means any co
committing default in payment of loan instalment, land money, construction
money or annual subscription payable as provided in the byelaws of co-operative
society for which due notice for payment has been served on the
member/cooperative society or an award has been passed for recovery of such
sum.
”
(Emphasis supplied)
12. In view of the fact that the demand raised by the Society on
Respondent Nos. 3 and 4 is categorically disputed by the said members and
the Society has itself elected to file a claim petition under Section 70 of the
Act of 2003 inviting adjudication of its claims, an award has
the expression ‘
been passed for recovery of such sum
’ in the statute and Rules is attracted to
the facts of this case. The opinion formed by the Returning Officer that
Respondent Nos. 3 and 4 cannot be declared to be defaulters until the
passing of the award as the dues claimed by the Society are disputed, is a
reasonable conclusion.
13. In the facts of this case, for instance, the Society in the claim petition
th
dated 11 June 2023 filed before the RCS has raised demand for rent
‘ ’
against Respondent No. 3 for a room allegedly occupied by her
unauthorizedly, which claim has been disputed by the said Respondent and
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By:Rashmi Dabas
Signing Date:30.03.2024
17:28:53
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would require adjudication. Similarly, in the claim petition dated 31
December, 2023 filed against Respondent No. 4, the Society has raised a
claim for recovery of rent for car parking space, which again is disputed by
‘ ’
the said member and is pending adjudication. The said demands towards
rent raised by the Society are not admitted dues; the validity of the claims
‘ ’
is sub-judice and therefore, the view of the Returning Officer that in the
absence of an award upholding the demand of the Society, Respondent Nos.
3 and 4 cannot be declared to be defaulter is a reasonable view and cannot
be said to be arbitrary.
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14. In addition, in view of the fact that the elections are scheduled on 31
March, 2024, we are not inclined to entertain the present writ petition as it
would derail the said elections.
15. Accordingly, the present petition is dismissed along with pending
application. It is however, clarified that the observations made in this order
are not in expression of the merits of the claims of outstanding claims raised
by the Society against Respondent Nos. 3 and 4.
ACTING CHIEF JUSTICE
MANMEET PRITAM SINGH ARORA, J
MARCH 28, 2024/
hp/ms
Signature Not Verified
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By:Rashmi Dabas
Signing Date:30.03.2024
17:28:53