Devi Construction Company v. Deputy Registrar, Cooperative Societies
1989-05-04
K.C.AGGARWAL, R.K.GULATI
body1989
DigiLaw.ai
JUDGMENT K.C. Agrawal, J. - Through this petition filed under Article 226 of the Constitution By M/s. Devi Construction Company, which is a partnership firm carrying on business of making constructions, sought quashing of the order passed by the Deputy Registrar dated 30th September, 1988 under Section 128 of the U.P. Cooperative Societies Act. 2. Under Section 128, the Registrar is authorised to annul any resolution passed by the Committee of management or cancel any order passed by an officer of a Cooperative Society, if he is of the opinion that the resolution or the order is not covered by the objects of the society or is in contravention of the provisions of the U.P. Cooperative Societies Act and Rules. 3. Agra Zila Sahkari Bank Limited,respondent No. 2, owned a large area of land consisting of approximately 7000 Sq. meters. Out of this 7000 sq. meters, the Bank decided to contract a shopping complex on an area of 2188 sq. meters by a resolution passed by the administrative committee of the Zila Sahkari Bank. As the Bank, respondent No. 2, was short of finances, it entered into an agreement on 18.10.1986 with the petitioner for making of construction on the said land. The petitioner, who was given the contract in pursuance of being the best suited to job, started constructions. Thereafter, a new managing committee was appointed by the administrator which invited fresh tender from the persons agreeable to make the 'Navin Bhawan' at their own costs. The petitioner again submitted the tender which was accepted agreement was entered into on 28.7.1987 between the petitioner and the committee of Management of Agra Zila Sahkari Bank. This agreement was executed with the previous approval of the Deputy Registrar, Cooperative societies. 4. During - the course of constructions, the Agra Development Authority required 435 payment of betterment charges of Rs. 4,53,570/-, but as Agra Zila Sahkari Bank was reluctant to pay the betterment charges, suit No. 248 of 1988 was filed by the petitioner against the Agra Development Authority and on the application for injunction, the additional Civil Judge permitted further constructions to be raised on the land subject to furnishing bank guarantee for the entire betterment charges, which had been furnished in compliance with the order. The entire constructions had been completed.
The entire constructions had been completed. Thereafter, 32 tenants of 39 shops were inducted into possession in pursuance of the agreement entered into by the Agra Zila Sahkari Bank. Those tenants have spent huge amounts in furnishing the furniture and fittings. 5 On 30th September, 1988 respondent No. 1 Deputy Registrar and respondent No.2 Agra Zila Sahkari Bank on 2.4.1987 passed the two orders. In pursuance of the order of the Deputy Registrar dated 30th September, 1988, the Secretary/General Manager of respondent No.2 issued a Letter dated 11.10.1.988 intimating to the petitioner that in view of the annulment of the resolution of the aforesaid two dates, the constructions made by the petitioner were unauthorised. It was said : The petitioner had challenged the orders on the ground that the orders passed on 30th September, 1988 and 11th October, 1988 are invalid as the constructions having already been completed and tenants having been inducted into possession of the shops in pursuance of the agreement entered into, the Deputy Registrar had no power to annul or cancel any resolution passed by the Committee of Management. 6. Section 128 annulling resolution may be available if it is found that the registrar was of the opinion that the resolution was not covered by the objects of the society. This can be done till the resolution or the agreement entered into in pursuance of the same have not been given effect to. But where, as here, most of the constructions had been completed, section 128 did not apply and the Deputy Registrar has acted in gross abuse of the powers by cancelling the resolution mentioned above. 7. In the counter-affidavit, justification for the cancellation of the resolution by the Deputy Registrar has been furnished by asserting that the agreement in pursuance of which the constructions had been started was void. It has further been asserted in para 20 of the counter affidavit that the land worth Rs. 60,00,000/- had been kept at the disposal of the petitioner for raising and letting it out on such premium as the petitioner liked to fix. Letting out, according to the counter affidavit, was on illusory rent. One of the main reasons given for justification of the resolution dated 30th September, 1988 is that no Cooperative Society was entitled to use any premises which was meant for business of the society, for any purpose other than such business.
Letting out, according to the counter affidavit, was on illusory rent. One of the main reasons given for justification of the resolution dated 30th September, 1988 is that no Cooperative Society was entitled to use any premises which was meant for business of the society, for any purpose other than such business. The petitioner was given the contract of making constructions in pursuance of the tenders invited in that regard. The tenders were approved by the committee of Management and, thereafter, it appears that the Deputy Registrar accorded approval to the same. The fact of giving approval by the Deputy Registrar is mentioned in the agreement itself. Para 12 of the writ petition in which assertion. of approval has been noted has been controverted in para 13 of the counter affidavit. The fact of having received the approval of the Deputy Registrar is mentioned in the agreement itself which has been signed by the Administrator of respondent No. 2. The said respondent No.2, Agra Zila Sahkari Bank, cannot wriggle out of the agreement having made the petitioner to spend lacs of rupees on the land in question. The Registrar did not take into account all the relevant facts and by 1990 passing an order, which is arbitrary, annulled the resolution already mentioned. The power to annul means to reduce the previous resolution and the agreement executed in pursuance of the same to nothing, has to be exercised before any act is done in pursuance of the same. The Bank authorities were always and throughout present at the spot and they know about the constructions made by the petitioner. If it was feeling at any time that by making the constructions, the petitioner was usurping the authority given to it by the resolution, the Bank authorities should have stopped the petitioner. The impugned resolution was passed after a long delay without providing any opportunity to the petitioner. 8. For all those reasons, we allow the writ petition and quash the orders dated 30th September, 1988 and 11th October, 1988. 9. Sri. D.N. Singh counsel appearing for the respondents, made an oral request for leave to appeal to the Supreme Court, which in our opinion, has no substance to stand upon. We have not decided any substantial question of law needing the same to be considered by the Supreme Court. The decision of this writ petition has turned on its own facts.
D.N. Singh counsel appearing for the respondents, made an oral request for leave to appeal to the Supreme Court, which in our opinion, has no substance to stand upon. We have not decided any substantial question of law needing the same to be considered by the Supreme Court. The decision of this writ petition has turned on its own facts. We, consequently, refuse to grant the prayer.