Companies Act Case Law Housing Building Society Vs Parma Nand Sharma And Ors

 

Companies Act Case Law

Housing Building Society Vs Parma Nand Sharma And Ors

 

Reportable

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9671 OF 2010

[Arising out of SLP (C) No. 26547 of 2008]

 

 

ISHWAR NAGAR CO-OP.

HOUSING BUILDING SOCIETY ….Appellant
Versus
PARMA NAND SHARMA AND ORS …Respondents
JUDGMENT

 

 

Dr. MUKUNDAKAM SHARMA, J.

 

 

1. Leave granted.

 

2. This Appeal is directed against the judgment and order
dated 28/03/2008 in W.P. No. 474/1982 of the High Court

 

of Delhi wherein the High Court allowed the writ petition

 

 

filed by the respondent-1 and whereby resolution and order

 

dated 14th January, 1978 passed by the appellant and the

 

order of the Registrar, Cooperative Societies dated 17th May,

 

1978 and the order of the Deputy Registrar dated 5th

 

November, 1981 whereby the name of the respondent-1 had

 

been removed from the list of members of the appellant-

 

society were quashed and set aside.
3. The respondent-1, Dr. Parmanand Sharma was enrolled as
a member of the appellant society vide membership No. 35

 

on 11th March 1961. In 1968, he purchased a property

 

bearing No. A-19/A, Kailash Colony, New Delhi in the name

 

of his Hindu Undivided Family consisting of respondent-1,

 

his wife and two minor children in 1968 and a structure

 

was constructed thereon in 1969. According to the

 

appellant-society, this construction is a residence-cum-

 

nursing home, whereas respondent-1 claims it to be only a

 

nursing home, to which question we will refer later. In this

 

chain of events, the membership of the respondent-1 was

 

 

terminated from the appellant society on the ground that

 

the respondent-1 owned another property, i.e., 19/A,

 

Kailash Colony, in Delhi, since as per rule 25 (1)(c) of the

 

Delhi Cooperative Societies Rules, 1973 (hereinafter referred

 

to as “the Rules” ), upon owning another property, the

 

appellant was not entitled to be member of a Cooperative

 

Housing Society. The respondent-1 was also expelled on

 

14th January 1978 from the society under section 36(1) of

 

the Delhi Cooperative Societies Act, 1972 (hereinafter

 

referred to as “the Act”) for being a persistent defaulter,

 

since he had not paid the dues demanded by the society.

 

The action of the society expelling the respondent-1 was

 

approved by the Registrar, Cooperative Societies on 17th

 

May 1978. On 26th February 1980, an application was filed

 

by respondent-1 under Section 60 of the Act for reference of

 

dispute to arbitration. The reference was dismissed on 5th

 

November, 1980. Being aggrieved, the respondent filed a

 

writ petition before the High Court, wherein the High Court

 

by the impugned judgment and order dated 28/03/2008

 

 
held that 19/A, Kailash Colony, Delhi was being used for

 

running a nursing home, i.e., for a commercial purpose and

 

therefore, that would not constitute a violation of Rule 25 of

 

the Rules. By the said order, the HC set aside the expulsion

 

orders.
4. The present appeal is directed against the above impugned
judgment and order of the High Court by way of Special

 

Leave Petition on which we heard the counsel appearing for

 

the parties at length. The learned counsel for the appellant

 

contended that on the ground floor of the said property, the

 

respondent-1 is running a nursing home and that he is

 

residing on the first floor. In that view, the appellant

 

contended that the property was being used for residential

 

purposes. Counsel for the appellant also submitted that the

 

respondent-1 in his various correspondences, pleadings and

 

affidavits has shown the property as his address which is

 

conclusive proof that he is residing in the said property.

 

Moreover, it was also contended that respondent-1 had
been unable to disclose where he was alternatively residing

 

and no documents had been furnished to show that the

 

said property was being used exclusively and solely for

 

commercial purpose. In this regard, it was submitted that

 

the user of the said property being a resident therein, this

 

not only violates Rule 25 of the Rules, but also is contrary

 

to the bye laws of the society and the terms of perpetual

 

lease agreement entered between Govt. of India and the

 

appellant society, in pursuance of which the respondent-1

 

would be entitled as being member of the appellant-society.

 

On the other hand, the learned counsel for the respondent-

 

1 refuted the claims made by the appellant contending that

 

the said property was used solely for a nursing home, and

 

since respondent-1 remained in the nursing home for most

 

of the time as a doctor, therefore it was solely for

 

convenience’s sake that he used the address to further

 

correspondence. This aspect, it was submitted, would not

 

render the property residential in any way. Further, counsel

 

for respondent-1 contended that the said property was

 

purchased in the name of the HUF, and not in respondent-

 

1’s name, and therefore the latter cannot be expelled from

 

the membership of the appellant-society. He also submitted

 

that the respondent-1 cannot be expelled because of

 

purchase of the said property was facilitated before the

 

Rules came into force in exercise of power granted under

 

the Delhi Cooperative Societies Act, 1972. It was further

 

contended that at the time of acquisition of membership of

 

the said society, the appellant’s society was governed by the

 

Bombay Cooperative Societies Act, 1925, which doesn’t

 

have any provision disqualifying a member of a cooperative

 

society on acquisition of another property in Delhi. Rule 25

 

has no retrospective application; therefore it was submitted

 

that expulsion of the respondent-1 is non est in law.
5. After hearing the parties in detail the questions which arise

 

in this appeal are: –
I. Whether Rule 25 of the Rules has a retrospective

application in debarring a member of a co-operative

society who enrolled as a member of the society and
7
acquired separate property before the Rules came into

force?
II. Whether bye laws of the society can debar the

respondent-1 on acquisition of a separate

residential/dwelling house in Delhi?
III. Whether the property purchased in the name of

HUF can debar the respondent-1 to continue as a

member of the appellant-society?
IV. Whether the nature of the property purchased is

residential or commercial?
Issue I
6. As far as applicability of Rule 25 of the Rules is concerned,

 

the learned counsel for the appellant contended that the

 

provisions contained in Rule 25 are applicable to all the

 

members of the society, whether enrolled before or after the

 

enactment of the Delhi Co-operative Societies Rules, 1973

 

and in view of the said rule, the respondent-1 was ineligible

 

to continue to be a member of the society and his

 

membership was correctly terminated in accordance with

 

law. In contrast, the learned counsel for the respondent-1

 

contended that at the time of enrolment of respondent-1

 

 

and subsequent to purchasing of the property, the co-

 

operative societies in Delhi were governed by the Bombay

 

Co-operative Societies Act, 1925 as extended to Delhi Co-

 

operative Societies Rules, 1950. There was no prohibition

 

whatsoever at the relevant time for a person who was a

 

member of the co-operative society from purchasing any

 

property. Subsequently, on 24.4.1973, the Delhi Co-

 

operative Societies Act and Delhi Co-operative Societies

 

Rules, 1973 came into force and the earlier Act and the

 

1950 Rules stood repealed. The 1973 rules prescribed

 

eligibility criteria for admission under the said Rule 25 and

 

the eligibility criteria for admission are not same as required

 

for continuation. Moreover, it was contended that Rule 25

 

has no retrospective application.
7. Rule 25 reads as follows: –

 

“Disqualification for Membership- (1) No person shall

be eligible for admission as a member of a co-

operative society if he –

(a) has applied to adjudicated an insolvent or is an

undischarged insolvent; or

 

 

(b) has been sentenced for any offence other than an

offence not involving moral turpitude and dishonesty

and a period of five years has not elapsed from the

date of expiry of the sentence:

(c) in the case of membership of a housing society:-

(i) owns a residential house or a plot of land for the

construction of a residential house in any of the

approved or un-approved colonies or other localities

in the National Capital Territory of Delhi, in his own

name or in the name of his spouse or any of his

dependent children, on lease hold or free-hold basis

or on power of attorney or on agreement for sale;
Provided that disqualification of membership as laid

down in sub-rule (l)(c)(i) shall not be applicable in

case of co-sharers of property whose share is less

than 66.72 sq. metres of land;

Provided further that the said disqualification shall

not be applicable in case of a person who has

acquired property on power of attorney or through

agreement for sale and on conversion of the property

from leasehold to freehold on execution of

conveyance deed for it, if such person applies for the

membership of the housing society concerned;

(Amended on 6.8.97)
(ii) he deals in purchase or sale of immovable

properties either as principal or as agent in the

national Capital Territory of Delhi: or

(iii) he or his spouse or any of his dependent children

is a member of any other housing society except

otherwise permitted by the Registrar.
2. Notwithstanding anything contained in the rules

or the bye-laws of the co-operative society, if a

member becomes, or has already become, subject to
9
10

 

any disqualification specified in sub-rule (1), he shall

be deemed to have ceased to be a member from the

date when the disqualifications were incurred.
3. A member who ceases to be a member of a co-

operative society under sub-rule (2), shall not be

entitled to exercise rights of memberships or incur

liability as member with effect from the date referred

to in sub-rule (2) but as from the date he becomes a

creditor of the co-operative society in respect of the

amount due to him on account of paid up share

capital, deposit, cost of land deposited or any other

amount paid by him to the co-operative society as its

member. As from the date of his ceasing to be a

member or the society under sub-rule (2), the amount

standing to his credit shall be paid to him by the co-

operative society within 3 months and when the co-

operative society is already under liquidation, the

amount due to him will be credited as a debt due to a

third party from the co-operative society.
4. If any question as to whether a member has

incurred any of the disqualification referred to in sub-

rule (1) arises, it shall be referred to the Registrar for

decision. His decision shall be final and binding on

all concerned. The power of the Registrar under this

rule shall not be delegated to any other person

appointed to assist the Registrar.”

 

 

8. A perusal to Rule 25(2) makes it clear that after the said

 

Rules came into force, if a member has already become

 

subject to any disqualification specified in sub rule (1), he

 

would be deemed to have ceased to be a member from the

 

 

date when the disqualification was incurred. In the present

 

case, the rule which is to be considered is Rule 25(1)(c)(i).

 

The said Rule also stipulates that no person shall be eligible

 

for admission as a member of the co-operative society, if he

 

owns a residential house or a plot of land for the

 

construction of a residential house in any of Territory of

 

Delhi, in his own name or in the name of his spouse or any

 

of his dependent children, on lease-hold or free-hold basis.

 

The learned counsel for the respondent-1 contended that

 

since the said rule does not come within the ambit of power

 

given under Section 97(2) of the Act to the Lt. Governor who

 

is empowered to make rules about the conditions to be

 

complied with by persons applying for admission or

 

admitted as members, the same cannot be applied to the

 

person who have already become a member to disqualify

 

him for the act done prior to coming into force of the Rules.

 

Further it was also contended that the said power is limited

 

by section 98 of the Act which repeals the earlier Act and

 

saves the right, privileges or obligations accrued or incurred

 

under the earlier Act repealed.
9. The first consideration in this regard is whether Section 97

 

of the Act permits the Lt. Governor to make the above

 

disputed provision of rule 25. Section 97 of the Act reads as

 

follows:

 

“97 (1) The Lieutenant Governor may, for any

co-operative society or class of co-operative

societies, make rules to carry out the purposes

of this Act.
(2) In particular, and without prejudice to the

generally of the foregoing power, such rules

may provide for all or any following matters,

namely… –

….(v)The conditions to be complied with by

persons applying for admission or admitted as

members, for the election admission of

members, and for the payment to be made and

the interest to be acquired before the exercise of

the right of membership.”

 

10. A perusal of the aforementioned provision indicates that the

 

power to frame rules is given by S. 97(1) to the Lt. Governor

 

to make rules to carry out the purposes of this Act and the

 

list of subjects mentioned in sub rule (2) is merely

 

illustrative as is clear when it says that “In particular, and

 

without prejudice to the generally of the foregoing power,

 

 

 

such rules may provide for all or any matters contained

 

therein”. It is well-settled that the specific provisions as are

 

contained in several clause of sub-section (2) of 97 are

 

merely restrictive and they cannot be read as restrictive of

 

the generality of powers prescribed by sub section (1) of S.

 

97. The particular matters given in sub section (2) only

 

illustrate and do not exhaust all the powers conferred. In

 

that connection reference may be made to two analogous

 

cases. First to that of Afzal Ullah v. State of Uttar Pradesh

 

reported at AIR 1964 SC 264 wherein principles for

 

interpreting a provision similar in objective (of the United

 

Provinces Municipalities Act, 1916) were laid down. This

 

Court in the said case, held:

 

“13. ……..It is now well-settled that the specific

provisions such as are contained in the several

clauses of Section 298(2) are merely illustrative

and they cannot be read as restrictive of the

generality of powers prescribed by Section

298(1). If the powers specified by Section 298(1)

are very wide and they take in within their

scope Bye-laws like the ones with which we are

concerned in the present appeal, it cannot be

said that the powers enumerated under Section

298(2) control the general words used by

 

Section 298(1). These latter clauses merely

illustrate and do not exhaust all the powers

conferred on the Board, so that any cases not

falling within the powers specified by Section

298(2) may well be protected by Section 298(1),

provided, of course, the impugned Bye-law can

be justified by-reference to the requirements of

Section 298(1).”

 

This rule of interpretation was again reiterated in Rohtak
Hissar District Electricity Supply Co. Ltd. Vs. State of
Utter Pradesh and Ors. reported at AIR 1966 SC 1471:

 

“18………. Section 15(1) confers wide powers

on the appropriate Government to make rules

to carry out the purposes of the Act; and

s. 15(2) specifies some of the matters

enumerated by clauses (a) to (e), in respect of

which rules may be framed. It is well-settled

that the enumeration of the particular matters

by sub-s. (2) will not control or limit the width

of the power conferred on the appropriate

Government by sub-s. (1) of s. 15; and so, if it

appears that the item added by the

appropriate Government has relation to

conditions of employment, its addition cannot

be challenged as being invalid in law.

Whether or not such addition should be made,

is a matter for the appropriate Government to

decide in its discretion. The reasonableness of

such addition cannot be questioned, because

the power to decide which additions should be

made has been left by the Legislature to the

appropriate Government.”

 

11. In view of the above position, it may be deduced that the

 

power to frame rules given under s. 97(1) of the Act is not

 

controlled by the list mentioned in sub section (2) and the

 

Lt. Governor can make rules for any of the purposes of the

 

Act. A co-operative society may be defined as a voluntary

 

association of individuals combined to achieve an

 

improvement in their social and economic conditions

 

through the common ownership and democratic

 

management of the instruments of wealth. (Vide Row’s
Encyclopedia of Co-operative Societies Law in India,
Vol. 2, page 1) Experience has shown that voluntary
organizations like cooperative societies are the best system

 

which can suit the needs of poor and weaker sections. The

 

object of a co-operative society is not to earn profits but to

 

enable the members to improve their economic conditions

 

by helping them in their pursuits. Thus, the cooperative

 

societies like the present one which seek to obtain the land

 

at concessional rate from the government and to build

 

houses must necessarily have a limitation in that only

 

members who are in real need of houses should be

 

permitted to become members and to take the benefit of

 

land allotment. In the garb of a cooperative society, a

 

person cannot be permitted to avoid the stress of market

 

prices and take a concessional advantage in obtaining a

 

plot. Thus Rule 25(2) does not in any manner go beyond the

 

ambit of rule making authority given under Section 97(1) of

 

the Act.
12. The learned counsel for the respondent-1 further contended

 

that the Rule 25 is not applicable to the respondent-1’s case

 

as the said rule is not retrospective and the alleged

 

`disqualification’ of purchasing the said property had

 

incurred prior to the adoption of the Rules. We are of the

 

considered opinion that the aforesaid contention of the

 

learned counsel for the respondent-1 is misconceived.

 

Merely because a person who had become a member of the

 

society at a point of time when the disqualification

 

mentioned in Rule 25 was not in existence and because of

ase to be a member of the society

 

does not necessarily mean that the said rule is

 

retrospective. “A statute is not properly called a retrospective

 

statute because a part of the requisites for its action is

 

drawn from a time precedent to its passing”. (See Craise on

 

Statute Law. 17th edition page 386). Reference may also
be made to Queen v. Vina reported at (1875) 10 Q.B
195 wherein the Statute enacted that every person
convicted of felony shall be for ever disqualified from selling

 

spirits by retail. It was held that the disqualification applied

 

to every convicted felon irrespective of whether he was so

 

convicted prior to or after the Act came into operation.
13. A reference may also be made to Re: Solicitors Clerk

 

reported at (1957) 3 AH. E.R. 617, wherein the bone of

 

contention revolved around that Solicitor’s Act of 1956

 

which provided that no solicitor should employ any person

 

who is convicted of larceny without the permission of the

 

Law Society. The clerk in that case was convicted of larceny

 

 

17
18
in 1953, while the ban was imposed in 1956. It was urged

 

that the provisions of the 1956 Act cannot be applied to him

 

because he was convicted before that Act came into

 

operation. “To do otherwise, it was argued, would be to

 

make its operation retrospective. In rejecting this

 

contention, Lord Goddard, C.J. observed:

 

“In my opinion, this Act is not in truth retrospective. It

enables an order to be made disqualifying a person

from acting as a solicitor’s clerk in the future and

what happened in the past as the cause or reason

for the making of the order; but the order has no

retrospective effect. It would be retrospective if the

Act provided that anything done before the Act came

into force or before the order was made should be

void or voidable, or if a penalty were inflicted for

having acted in this or any other capacity before the

Act came into force or before the order was made.

This Act simply enables a disqualification to be

imposed for the future which in no way affects

anything done by the appellant in the past.

Accordingly, in our opinion the disciplinary committee

had jurisdiction to make the order complained of”
14. Same principle was applied in State of Maharashtra v.

 

Vishnu Ramachandra reported at 1961 Cri L. J 450 where
Section 57 of the Bombay Police Act, 1951 authorised

 

removal of a person from an area if he has been convicted of

 

certain offences including theft. The Supreme Court held

 

that

 

“18. ‘Section. 57 of the Bombay Police Act,

1951 does not create a new offence nor

makes punishable that which was not an

offence. It is designed to protect the public

from the activities of undesirable persons

who have been convicted of offences of a

particular kind. The section only enables the

authorities to take note of their conviction

and to put them outside the area of their

activities so that the Public may be protected

against a repetition of such activities………
18. An offender who has been punished may

be restrained in his acts and conduct by some

legislation, which takes notes of his

antecedents, but so long as the action taken

against him is after the Act comes into force,

the statute cannot be said to be applied

retrospectively.'”
15.The most concrete cases wherein laws are made

 

retrospective are those in which the date of commencement

 

is earlier than enactment, or which validate some invalid

 

law, otherwise, every statute affects rights which would

 

have been in existence but for the statute and a statute

 

does not become a retrospective one because a part of the

 

requisition for its action is drawn from a time antecedent to

 

its passing. Applying that to the present case, the

 

conclusion is inescapable, that Rule 25(2) is not

 

retrospective. All that Rule 25(2) does is that it operates in

 

future, though the basis for taking action is the factum

 

acquiring a plot in the past. Thus when by virtue of Rule

 

25(2), a member is deemed to have ceased to be a member

 

of the society, the cessation operates from April 2, 1973,

 

when the rules came into force.
Issue II
16. Coming to the second question of applicability of bye-laws,

 

the same came into force on 3.10.1962. The eligibility

 

conditions for enrollment as a member of the society were

 

provided in chapter III of the said bye-laws. Bye-law No. 8

 

(vii) which provides for cessation of membership is

 

reproduced is reproduced herein under:

 

“8. A person ceases to be a member:

(vii) On undertaking the business of purchase and

sale of houses or land for construction of houses

either directly or indirectly or on purchasing a

 

house or a plot of land for construction of houses

either in his own name or in name of any of his

dependants through any other source and the

member shall, within one month of his

undertaking the said business or purchase of a

house or a plot of land shall inform the society

about this.”
17. Perusal to above bye-law makes it clear that on purchasing

 

a house or a plot of land for construction of a house, either

 

in his own name or in name of any of his dependants,

 

disqualifies a member of the society to continue as one. Bye

 

laws of the society regulate the management of the society

 

and govern the relationship between society and members

 

inter se. They are of the nature of Articles of Association of a

 

company registered under the Companies Act. If they are

 

consistent with the Act and Rules, the members are bound

 

by them. In Zoroastrian Coop. Housing Society Ltd. v.
District Registrar, Coop. Societies (Urban), reported at
(2005) 5 SCC 632, at page 661 :

 

“36. if the relevant bye-law of a society places

any restriction on a person getting admitted to a

cooperative society, that bye-law would be

operative against him and no person, or

 

aspiring member, can be heard to say that he

will not be bound by that law which prescribes

a qualification for his membership.”
18.Bye-law 8(vii) was neither inconsistent with the Bombay

 

Cooperative Societies Act, 1925 under which the appellant

 

society was governed nor was it contrary to Delhi

 

Cooperative Societies Act, 1972 and the Rules framed

 

thereunder. Therefore, a member of the society who acted in

 

violation of the said bye law was liable to have his or her

 

membership removed from the appellant-society.
19.However, the learned counsel for the Respondent-1

 

contended that the appellant-society never communicated

 

to the Respondent-1, as to violation of bye law 8(vii). No

 

correspondence made by the appellant-society to the

 

respondent 1 mentioned the said bye law 8(vii), but

 

mentioned only the violation of bye law 5(i)(e) and Rule 25

 

wherein bye law 5(i)(e) prescribes to be member of the

 

society and is not applicable to the person who has already

 

become member before the adoption of the bye laws.
Further, the learned counsel for the respondent-1

 

contended that during the adjudication of the Writ Petition,

 

the appellant never raised the ground of the violation of bye

 

law 8 (vii) and even the Special Leave Petition filed by the

 

appellant does not mention the said bye law 8(vii) either in

 

list of dates or in the Question of Law or in Grounds. It was

 

only for the first time on 22.09.10 during the course of oral

 

arguments the learned counsel for the appellant raised the

 

said violation as a surprise. On further investigation apart

 

from the fact that the alleged 1962 bye laws were not part of

 

the High Court file and the copy of the bye laws relied upon,

 

it was contended, appears to be fabricated.
20.If we accept the above contention of respondent-1 and keep

 

aside the alleged bye law 8(vii) from our consideration, bye

 

law 5(i)(e) still remains to be considered, the existence of

 

which is also not in doubt. The violation of said bye law

 

5(i)(e) was also communicated to the respondent-1 by show

 

cause notice dated 24.1.1978 and also raised as a ground
in the writ petition before the High Court and in the SLP

 

filed before this Court. The said bye law 5(i)(e) is produced

 

hereinunder:
“5(i) Any person shall be eligible to be a

member of the society, provided;

(e) he or his wife (she or her husband

incase of a woman) or any of his/her

dependents does not own a dwelling house

or a plot for building a house in Delhi;”
21. The question for our consideration is what is the meaning of

 

the expression “eligible to be a member” used in the 1962

 

bye law No. 5(i)(e). The verb “be” has two meanings, namely,

 

(a) to exist, and (b) to become. The former refers to the

 

existence of state of affairs in present while the latter refers

 

to the coming into existence of a new state of affairs. It is

 

argued for the respondent-1 that the 1962 bye-law No.

 

5(i)(e) refers only to the eligibility of a person to become a

 

member. On the contrary, the respondents have urged that

 

even a person who is already a member ceases to be eligible

 

to continue as a member if he does not satisfy bye-law

 

5(i)(e). That is to say, if a person after becoming a member

 

24
25
of the society purchased a dwelling house in Delhi, then he

 

is not eligible to be a member in the sense that he is not

 

eligible to continue to be a member of the society under the

 

said bye-laws. As against the contention of the respondent-

 

1 that bye-law 5(i)(e) does not apply to existing members, it

 

may be pointed out that in Article 102(1) of the Constitution

 

also the word “be” is used in the sense of “exist” as

 

contrasted to “become”. Under Article 102(1) a person is

 

disqualified for “being chosen as” and also for “being a

 

member of either Houses of parliament” etc. The dichotomy

 

there is between becoming a member and continuing to be a

 

member of parliament. It is therefore, to be concluded that

 

even under the 1962 bye-law No. 5(i) (e) the respondent-1

 

were disabled from continuing to be members of the

 

society.
Issue III
22. The next argument for the learned counsel for the

 

respondent-1 was that the said property was purchased in

 

 

the name of HUF and not by respondent-1 in his personal

 

capacity. Whereas the learned counsel for the appellant

 

contended that the Rule 25 is applicable to the respondent-

 

1 irrespective of the fact that the said property is purchased

 

in the name of HUF. We have considered these arguments

 

in the light of the Rule 25. Sub-rule (1)(c)(i) of the rule 25

 

provides an exception in case of persons who are only co-

 

sharers in the joint family property, in that disqualification

 

of membership as laid down in sub-rule (l)(c)(i) shall not be

 

applicable in case of co-sharers of property whose share is

 

less than 66.72 sq. m. (80 yds) of land. In the present case,

 

the said property is admeasuring 1080 yds and there are 3

 

co-sharers of the property, i.e. respondent-1 and his two

 

children, (after the death of wife) and the share of the

 

respondent-1 would be more than the prescribed limit. In

 

this regard, the aforesaid exception is not applicable to the

 

respondent-1’s case. There is one more angle, which was

 

specifically placed before us and requires our consideration.

 

A perpetual lease deed with respect to the land allotted to
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the appellant society was executed on 06.04.1978 by the

 

President of India through the Delhi Administration. A copy

 

of the said perpetual lease deed executed with the appellant

 

society is placed on record. Our specific attention was

 

drawn to clause No. 5 (a) of the said lease deed, which reads

 

as follows:
“5(a). The lease shall sublease within one year

from the date of execution of these present,

such time and on such premium and yearly

rent as may be fixed by the lessor, one

residential plot to each of its members who or

whose wife/husband or any of his/her

dependent relatives including unmarried

children does not own, in full or in part, on

freehold or leasehold bases, any residential

plot or house in the urban areas of Delhi, New

Delhi or Delhi cantonment, and who may be

approved by the chief commissioner.”

 

 

The appellant society was, therefore, under an obligation not

 

to allot a residential plot to a person, who was owning a

 

property in the city of Delhi. Therefore, as per terms of

 

allotment of the land to the appellant it was obligatory for the

 

society not to allot plots of land to such persons who own any

 

 

residential property either in their own name or in the name of

 

their family member. When the Hindu Undivided Family of

 

the respondent consists only of his own family members,

 

namely, his wife, son and the daughter and therefore

 

obviously ownership of the said property by the Hindu

 

Undivided Family of the respondent is ownership of property

 

by the family members and consequently the same would

 

clearly fall within the prohibition and bar of allotment as

 

contained in clause No. 5 (a) of the lease deed.
Issue IV
23.The last submission made by respondent-1 is that the said

 

property is being used only for the purpose of running a

 

nursing home, i.e., for a commercial and not residential

 

purpose. The learned counsel for the appellant-society

 

refuted the same contending that the nursing home was

 

located only on the ground floor of the property and the

 

other floors are being used for residential purpose and the

 

same appears from the various correspondences and

 

 

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affidavits made by the respondent-1 wherein he has shown

 

the said property as his residence. In light of Rule 25, the

 

action of the appellant-society would be justified if the said

 

property is found to be residential house in the light of

 

documents on record. The mere fact that the respondent-1

 

has shown in affidavits and correspondences the said

 

property as his address doesn’t prove that the property is a

 

residential house as being a doctor running a nursing

 

home, he had to remain invariably in his workplace for very

 

long hours. However, the Annexure P-12 and P-13 are

 

respectively self-assessment property tax forms filled by the

 

respondent-1 with respect to the said property and an

 

objection letter written by the respondent-1 against the

 

assessment notice issued by the Municipal Corporation

 

with respect to the said property. In Annexure P-12, while

 

assessing the tax of the property, the respondent-1 has

 

shown the property as used for residential and self-

 

occupied purpose only. In Annexure P-13, the respondent-1

 

opposed the assessable value shown in the assessment
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notice on the ground that the building on the said plot is a

 

new constructed building and is under self-occupation for

 

residence and self professional-medical work only and is a

 

single-unit house. The respondent for the purpose of being

 

member of the appellant-society cannot claim the said

 

property used purely for commercial purpose when he

 

himself claimed the said property being used for residential

 

purpose also. It should also be indicated that the aforesaid

 

information about the nature and status of his property in

 

Kailash Colony were furnished by the respondent under his

 

own declaration and by certifying that the said particulars

 

filled in the form are true and correct to the best of his

 

knowledge. The respondent No. 1 has also appended his

 

signature to the said declaration by signing it on

 

27/06/2006. These informations are relevant and material

 

to come the conclusions that the aforesaid property in

 

Kailash Colony was also used as a residential property and

 

therefore the contention of the counsel for the respondent

 

no. 1 that it is exclusively a commercial property cannot be
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accepted.
24. We have considered the facts and circumstances of the

 

case, and analysed the arguments put forth by both parties

 

to buttress their stand. For the reasons that we have

 

considered herein and mentioned above, we find that the

 

arguments raised by respondent-1 are without merit, and

 

the appeal therefore, is to be allowed.

 

 

……………………………………..J

[Dr. Mukundakam Sharma ]

 

 
……………………………………..J

[ Anil R. Dave ]
New Delhi,

November 15, 2010.

 

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