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2009 DIGILAW 186 (DEL)

Manmohan Nath N. Puri (Deceased) Through LRs v. Madan Jha

2009-02-11

MADAN B.LOKUR, SIDDHARTH MRIDUL

body2009
MADAN B. LOKUR, J. 1. The Petitioner is aggrieved by an order dated 30th May, 1989 passed by the Delhi Cooperative Tribunal in Case No.41/1989-CA being an appeal under Section 76 of the Delhi Cooperative Societies Act, 1972. 2. Broadly, the facts of the case are that the Petitioner is the nominee of his father, who was a member of the Cooperative Industrial Estate Ltd. (for short the Society). As a result of his membership, the Petitioners father was allotted a plot bearing number J.-3 in the draw of lots held on 25th May, 1969. 3. The Petitioners father expired on 24th March, 1970. At that time, the Bombay Cooperative Societies Act, 1925 (for short the Bombay Act) was in force in Delhi and, therefore, the provisions of the Bombay Act were applicable. 4. We were told by learned counsel for the Respondents that the Petitioners father defaulted in payments but it has also come on record that while the Petitioners father was allotted a plot of 500 square yards, he had asked for a reduction in size. It is not clear whether the request was granted and if so, whether as a result of a reduction in the size, short payment persisted or not. 5. Be that as it may, on 19th December, 1970 the Petitioner addressed a letter to the Society and the contents of this letter are of some importance. It is, therefore, reproduced in full: Puri Iron & Steel Corporation December 19, 1970 Manufacturers Cooperative Industrial Estate Udyog Nagar, P.O. Piran Garhi, S/1, Milestone, North of Rohtak Road, Delhi-11. Subject: Industrial Plot in the name of Messrs. NARINDER NATH D. PURI. Dear Sir, We have your letter for acknowledgement Mfrs/M156/901/70 of October 30, 1970 and other letters and reminders for payments and have noted the contents therein with interest. The delay has been caused due to ill health and sad demise of my father Shri Narinder Nath D. Puri on March 24, 1970. Under the circumstances, we hope to be excused for this unintentional delay in writing. The undersigned will feel obliged if your goodself will send us the complete statement of accounts of payments and entrance fee received by you till date, so as to enable me to make the balance payment if any. Under the circumstances, we hope to be excused for this unintentional delay in writing. The undersigned will feel obliged if your goodself will send us the complete statement of accounts of payments and entrance fee received by you till date, so as to enable me to make the balance payment if any. As far as the undersigned remembers, he had asked your then Secretary Shri Jagdish Singh to adjust the amount which was already paid to you so that we do not have to make any further payments, since the original area negotiated was 5,000 sq. yds. Thereafter, the size was reduced to adjust the amount lying with you. Thanking you and once again sorry for the delay on our part, we remain. Sincerely yours, for Puri Iron & Steel Corporation and Narinder Nath D. Puri Sd/- (Managing Partner) 6. On a reading of the aforesaid letter, it appears that the Petitioner proceeded on the basis that being a nominee of his deceased father, he steps into the membership shoes of his father. It also appears that the Petitioner is interested in making the balance payment, if any, due from his father for the plot allotted. Unfortunately, the letter dated 19th December, 1970 was not responded to by the Society at all. 7. The Petitioner appears to have followed up his request of 19th December, 1970 by addressing letters to the Society on 1st November, 1971 and 8th November, 1971. In response to these two letters, the society took ex parte action against the Petitioner for returning the amounts deposited by the Petitioners father. Cheques for repayment of the amounts deposited by the Petitioners father were drawn up in favour of the Petitioner in October and November, 1971. The Petitioner was also informed by a letter dated 31st March, 1972 that his father failed to pay the amounts due despite repeated reminders and, therefore, the plot allotted to him was resumed. It was alleged that even though the Petitioner knew about the resumption of the plot, no steps were taken by remitting the dues and to make matters worse, the Petitioner had not even applied to the Society for membership within one year from the date of death of the Petitioners father as required under the provisions of the Bombay Act and the Rules framed thereunder. 8. 8. Feeling aggrieved by the resumption of the allotted plot, the Petitioner raised a dispute which was adjudicated by the Joint Registrar (Arbitration), Cooperative Societies, Delhi. By his order dated 11th May, 1989 the Joint Registrar was held that the Petitioner was not entitled to any relief since he never became a member of the Society and so had no claim to plot No. J-3. It was directed that in the meanwhile, since the plot was allotted to some third person, that is, M/s Sneh Industries, the Society should execute a sub-lease with M/s Sneh Industries. 9. Against the order of the Joint Registrar (Arbitration), the Petitioner preferred an appeal which has given rise to the impugned order. The appeal was dismissed on the ground that the Petitioner had failed to apply for membership of the Society within the time prescribed by Section 27(1) of the Bombay Act. The appellate authority held that in his letter dated 19th December, 1970 the Petitioner had not asked for membership of the Society and, therefore, that letter could not be considered as his request for being made a member of the Society. On this short ground, the appeal filed by the Petitioner was rejected. 10. Before us, it has been contended by learned counsel for the Petitioner that since his father was allotted a plot, the Petitioner was entitled to succeed to the estate of the deceased. It was submitted that it was not a case of making an application for membership but a case of succession to the plot allotted to his father. On the other hand, it was submitted by learned counsel for the Society as well as M/s Sneh Industries that the provisions of Section 27(1) of the Bombay Act required the Petitioner to make an application for membership within one year of the death of his father but since the Petitioner had not done so, the order passed by the authorities below was perfectly justified. 11. For convenience, Section 27 of the Bombay Act reads as follows: 27(1). 11. For convenience, Section 27 of the Bombay Act reads as follows: 27(1). On the death of a member of a society such society may within a period one year from the death of such member transfer the share or interest of the deceased member to a person or persons nominated in accordance with the bye-laws of the society, if duly admitted a member of the society in accordance with the rules or the bye-laws of the society, or if there is no person so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member, if duly elected a member of the society or may pay such nominee, heir or legal representative as the case may be a sum representing the value of such members share or interest as ascertained in accordance with the rules of bye-laws. Provided that such nominee, heir or legal representative, as the case may be, may require that payment shall be made by the society within one year from death of the member, of the value of the share or interest of such member, ascertained as aforesaid. .(2) A society shall subject to the provisions of Section 25 and unless presented by an order of a competent court, pay to such nominee, heir or legal representatives, as the case may be, all other moneys due to the deceased member from the society. .(3) All transfer and payments made by a society in accordance with the provisions this section shall be valid and effectual against any demand made upon the society by any other person. 12. While it is true that Section 27 of the Bombay Act requires the Petitioner to make an application for membership within one year of the death of his father, the fact still remains that the case of the Petitioner is not one of membership but one of succeeding to the estate of his father who had already been allotted a plot by the Society. To this extent, the authorities below have misdirected themselves. 13. In Gayatri De v. Mousumi Cooperative Housing Society Ltd., AIR 2004 SC 2271 , the Supreme Court noted that in a situation such as the present, the question of admission of membership becomes absolutely immaterial, the real question being of transfer of devolution of interest of a deceased member. To this extent, the authorities below have misdirected themselves. 13. In Gayatri De v. Mousumi Cooperative Housing Society Ltd., AIR 2004 SC 2271 , the Supreme Court noted that in a situation such as the present, the question of admission of membership becomes absolutely immaterial, the real question being of transfer of devolution of interest of a deceased member. It was held that the heirs of a deceased member are entitled to succeed to the estate of the deceased member and so the right, title and interest would devolve upon the heirs (paragraph 36 of the Report). This view was reiterated in paragraph 54 of the Report. 14. In Pran Nath Mallick v. Dr. Netar Prakash Mallick & Ors., 2000 III AD (Delhi) 843, a Division Bench of this Court independently took a similar view. It was held in paragraph 12 of the Report that once an allotment of a plot is made to a member of a society, it cannot be said that his nominee or legal representative is not entitled to hold or inherit the plot so allotted merely because such a person is not a member of the society. It was noted that after allotment is made, legal rights get vested in the member and the society cannot stop the inheritance of those rights on the legal representatives and heirs on the plea that such a person is not its member. 15. In our opinion, the law laid down in both these decisions squarely covers the first issue raised before us. 16. An additional feature that militates against the view taken by the authorities below is that the letter dated 19th December, 1970 sent by the Petitioner to the Society was not at all answered by the Society. It is quite possible that if the Petitioner had been given a reply to this letter, he would have made an application for membership (should it have been necessary) before the expiry of one year. Such an opportunity was denied to the Petitioner by the Societys silence. 17. With regard to the second issue of the Petitioners failure to make an application for membership of the Society within a period of one year from the date of death of his father, we are of the opinion that the issue becomes completely irrelevant in view of the decisions mentioned above. 17. With regard to the second issue of the Petitioners failure to make an application for membership of the Society within a period of one year from the date of death of his father, we are of the opinion that the issue becomes completely irrelevant in view of the decisions mentioned above. Notwithstanding this, we are of the opinion that the Petitioner certainly cannot be faulted for not having made an application within the prescribed time. As far as the Petitioner was concerned, he had sent a letter on 19th December, 1970 indicating his willingness to continue the membership of the Society and to make balance payments, if any. If the Society was of the opinion that the letter dated 19th December, 1970 did not constitute an application, the least it could have done was to reject the letter immediately so that the Petitioner could have taken appropriate steps. By waiting for time to run out, the Society prejudiced the Petitioner and is now using that as an excuse to disentitle the Petitioner from inheriting the plot allotted to his father. We may note, as we have already done above, that there is nothing on record to suggest that the letter dated 19th December, 1970 was replied to. The only replies that were sent by the Society were in response to the letters dated 1st November, 1971 and 8th November, 1971 and replies to these letters were sent after a gap of almost four months afterwards. The inaction of the Society under these circumstances cannot, therefore, be used by it to the disadvantage of the Petitioner. 18. Under the circumstances, we set aside the order dated 30th May, 1989 passed by the Delhi Cooperative Tribunal. The appeal filed by the Petitioner before the Tribunal will be treated as having been allowed with all consequential benefits.