WOODBURN PARK CO-OP. HOUSING SOCIETY LTD.versusCHANDA DEVI TANTIA AND ORS.

                         [2008] 5 S.C.R. 1036


A    WOODBURN PARK CO-OP. HOUSING SOCIETY LTD.
                                  V.
                CHANDA DEVI TANTIA AND ORS.
                 (Civil Appeal No.2638 of 2005)
                           APRIL 2, 2008
B
        [DR. ARIJIT PASAYAT AND S.H. KAPADIA, JJ.]
                                                                      "*''
        West Bengal Cooperative Societies Act, 1973 - ss. 73,
  86, 138, 139 - Cooperative Society - Owning two plots -
c Construction of building for allotment of flats to members -
  Dispute between members of Society and ·Managing
  Committee - High Court directed Registrar to take steps for
  division of assets and liabilities - Registrar passed preliminary
  order - Names of some members not mentioned therein -
  Objections raised as to non-inclusion of their names - Not
D
  disposed of - Order of Deputy Registrar to appoint Managing
  Committee without hearing objectors and disposing of their          1'
                                                                        '
  objections - High Court held that Managing Committee so
  appointed had no legal sanction - On appeal, held: High
  Court's order set aside - Registrar directed to hear preliminary
E
  objections - Enquiry would be restricted to fact whether there
  was any resignation.
       The Society owned two plots in WP Road and EP
  Road. The said Society desired to construct two
F multistoried buildings on these plots for residence of its
  members. Dispute arose between the members of the
  Society and the Managing Committee and matter came
  up before the High Court. The High Court directed the
                                                                        .
  Registrar of Co-operative Societies to take steps in terms
  of provisions of West Bengal Co-operative Societies Act,
G
  1973 for division of the assets and liabilities of the Co-
  operative Society situated at EP Road and WP Road.
      Pursuant to the order passed by the Division Bench,
                                                                       +
  the Registrar of Cooperative Societies passed a
H                          1036
             WOODBURN PARK CO-OP. HOUSING SOCIETY LTD.             1037
                   v. CHANDA DEVI TANTIA AND ORS .
    .._J..
             preliminary order on 5th September, 1979 purporting to A
             divide the assets and liabilities of the Society. It is alleged
             that the Registrar recognized 38 members of WP society
             and the names of some members were not mentioned in
             the preliminary order. They objected to the non-inclusion
             of their names and filed their objections but they were not B
             heard and their objections were not disposed of. The final
    :.       order was passed on 23rd June, 1980. Then on 8th August,
             1980, further order was passed by the Deputy Registrar
             purporting to appoint the Managing Committee of the said
             WP Society without hearing them and disposing of their       c
             objections.
                   Both the orders were challenged before the High
             Court by filing the writ petition. Single Judge of High Court
             directed allotment of flats made in respect of the Society
             by the first Managing Committee of the appellant-society D
             or the successor of the Managing Committee and held
             that the same was to be given effect to. He further directed
             appointment of an Administrator by the Registrar of Co-
             operative Society.
                   On appeal, Division Bench held that Single Judge E
             rightly decided the matter since Order dated 23rd June,
             1980 was found to be bad and subsequent order dated
             8th August, 1980 appointing the Managing Committee
             cannot survive. If the membership issue had been decided
             in favour of those persons it was not known what would F
             have been the shape of the Managing Committee_. The
t
      I      Registrar was directed to hear the preliminary obje'Ctions
             filed by the members in accordance with law to decide
             who are the members and who are not After the disposal
             of the question of membership by the Registrar, the G
             Managing Committee was to be formed in accordance with
             law. Accordingly, the Division Bench was also of the view
             that the Managing Committee appointed after 8th August,
             1980 had no legal sanction and it was open to the
             Administrator to take appropriate action in accordance H
    1038        SUPREME COURT REPORTS            [2008] 5 S.C.R.


A   with law.
       In appeal to this Court, appellant contended that
  whether one was a member has to be tested on the
  question of bifurcation under s.138. There is a statutory
  presumption on the basis of entries. If somebody's name
8 is not there, statutory presumption is that he is not a
  member and audit report is a prima facie evidence for 1979-      ,/,!
  80 in terms of s.139. The list of members and the list of
  shareholders clearly show the number to be 60. The year
  1979-80 was the period immediately prior to bifurcation.
C The total strength of 1979-80 was 124 and the number
  of shareholders was also 124. In 1978-79 the number
  was 60.
           Disposing of the appeal, the Court
D         Held: In the writ petition, there was no mention about
    the alleged resignations. The letters of resignation dated
    20.8.1976 are on record. There is also no denial of the
    writing or signatures. Out of 38 who are claimed to have
    resigned 13 persons filed objection, while rest did not. In
E   the background of the factual position it would be
    appropriate to set aside the High Court's orders. The
    Registrar is directed to consider the matter afresh within
    a period of 6 months. The enquiry would be restricted to
    decide the question whether there was any resignation
F   and whether letter of resignation was signed by the
    objectors and whether the resignation was approved by
    any resolution and on the question of refund of share
    money and the effect of refund and acceptance. The
    Registrar shall also consider the other materials which
G   have relevance so far as resignation is considered. It
    would be open to the Registrar to call for the records and
    the documents from the parties within a period of 6
    months. There would be no allotment to 13 persons who
    raised objections until decision is taken by the Registrar.
H   [Para 5] [1041-G & H; 1042-A, B & C]
     WOODBURN PARK CO-OP. HOUSING SOCIETY LTD.               1039
      v CHANDA DEVI TANTIAAND ORS. [PASAYAT, J.]
          CIVIL APPELLATE JURISDICTION : Civil Appeal No.            A
     2638 of 2005.
          From the final Judgment and Order dated 1/8/2002 of the
     High Court of Calcutta at Calcutta in F.M.A.T. No. 1971/1984
          Pradeep Ghosh, Arun K. Sinha, Atish Ghosh, Sudip Sanyal    B
     and Rakesh Singh for the Appellant.
'~
          Jaideep Gupta, Gaurav Kejriwal, P.C. Sharma, N.P.
     Agarwalla, D.N. Ray, Sumita Ray, Manoj Swarup, M/S. Manoj
     Swarup &Co., Sangeeta Manda!, M/S. Fox Manda! &Co., Sarad
     Singhania, Pratibha Jain, A. Mariarputham, Aruna Mathur, M/S.   c
     Arputham, Aruna & Co., Jagjit Singh Chhabra, Dharmendra
     Kumar Sinha, Rauf Rahim and Atishi Dipankar, for the
     Respondents.
          The Judgment of the Court was delivered by
                                                                     D
           DR. ARIJIT PASAYAT, J. 1. Challenge in this appeal is to
     the judgment of a Division Bench of the Calcutta High Court. A
     learned Single Judge had allowed the writ petition (C.R.
     No.3922(W) of 1981) filed by the respondents by setting aside
     the order dated 23.6.1980 passed by the Deputy Registrar of E
     Co-operative Society. Learned Single Judge had directed
     allotment of flats made in respect of the Society by the first
     Managing Committee of the appellant-society or the successor
     of the Managing Committee and held that the same was to be
     given effect to. Learned Single Judge further held the F
     appointment of Special Officer to be unnecessary and
~-
     discharged his appointment. He further directed appointment
     of an Administrator by the Registrar of Co-operative Society
     and directed that all the papers were to be handed over to the
     Administrator. The appeal before the Division Bench was
                                                                    G
     dismissed by the impugned judgment.
           2. Background facts in which the dispute arose are as
     follows:
          The,East End Apartment Co-operative Housing Society
                                                                     H
    1040      SUPREME COURT REPORTS                     [2008] 5 S.C.R.


A   Ltd. (hereinafter referred to as the "Society") owned two plots of
    land namely premises No.58, Woodburn Park Road, Calcutta
    700020 and 11/1 B, Ekdalia Place, Calcutta-700019. The said
    society wanted to construct two multistoried buildings at the said
    two plots of land for the residence of its members. The appellants
B   applied for allotment offlats at premises No.58, Woodburn Park
    Road. The society had already constructed a multi storied               +'
    building at 11/1 B, Ekdalia Place, Calcutta consisting of 21 flats.

       A dispute arose between the members of the society and
  the Managing Committee and the matter was brought before
C the High Court. Ultimately on 15th December, 1978 the Appellate
  Court directed the Registrar of Co-operative Societies to take
  steps in accordance with the provisions of the West Bengal Co-
  operative Societies Act, 1973 (in short 'the Act') for division of
  the assets and liabilities of the Co-operative Society situated
D at Ekdalia Place and Woodburn Park Road.
          Pursuant to the order passed by the Division Bench the
  Registrar of Cooperative Societies passed a preliminary order
  on 5th September, 1979 purporting to divide the assets and
E liabilities of the society. It is alleged that the Registrar recognized
  38 members of Woodburn Park society and the names of some
  members were not mentioned in the preliminary order. They
  objected to the non-inclusion of their names and filed their
  objections but they were not heard and their objections were
  not disposed of. Therefore, they filed a writ petition. Their
F grievance was that while preparing the final order no notice was
  given to them and the final order was passed on 23rd June, 1980.
  Then on 8th August, 1980 further order was passed by the Deputy
  Registrar purporting to appoint the Managing Committee of the
  said Woodburn Society without hearing them and disposing of
G their objections.
            Both the orders were challenged before the High Court by
    filing the writ petition, which was disposed of in the manner noted
    above.
H          In appeal, the Division Bench was of the view that the
     WOODBURN PARK CO-OP. HOUSING SOCIETY LTD.                    1041
      v. CHANDA DEVI TANTIA AND ORS. (PASAYAT, J.]

     appeal was without merit and was directed to be dismissed. It        A
     was noted by the Division Bench that the learned Single Judge
     had correctly decided the matter since order dated 23rd June,
     1980 was found to be bad and subsequent order dated 8 1h
     August, 1980 appointing the Managing Committee cannot
     survive. If the membership issue had been decided in favour of       B
     those persons it was not known what would have been the shape
'+   of the Managing Committee. The Registrar was directed to hear
     the preliminary objections filed by the members in accordance
     with law to decide who are the members and who are not. After
     the disposal of the question of membership by the Registrar,         c
     the Managing Committee was to be formed in accordance with
     law. Accordingly, the Division Bench was also of the view that
     the Managing Committee appointed after 81h August, 1980 had
     no legal sanction and it was open to the Administrator to take
     appropriate action in accordance with law.
                                                                          D
           3. Learned counsel for the appellant submitted that the
     basic question is whether enquiry can be conducted under
     Section 77 or 86. To the limited extent as to whether one was a
     member has to be tested on the question of bifurcation under
     Section 138. There is a statutory presumption on the basis of        E
     entries. If somebody's name is not there, statutory presumption
     is that he is not a member and audit report is a prima facie
     evidence for 1979-80 in terms of Section 139. The list of
     members and the list of shareholders clearly show the number
     to be 60. The year 1979-80 was the period immediately prior to       F
     bifurcation. The total strength of 1979-80 was 124 and the
.{   number of shareholders was also 124. In 1978-79 the number
     was 60.

          4. Learned counsel for the respondents supported the
     orders.                                                              G
           5. There are certain factual aspects involved here. In the
     writ petition there was no mention about the alleged resignations.
'f   The letters of resignation dated 20.8.1976 are on record. There
     is also no denial of the writing or signatures. Out of 38 who are
                                                                          H
    1042       SUPREME COURT REPORTS                [2008] 5 S.C.R.


A claimed to have resigned 13 persons filed objection, while rest
  did not. In the background of the factual position it would be
  appropriate to set aside the High Court's orders. Let the matter
  be considered by the Registrar afresh within a period of 6
  months. The enquiry will be restricted to decide the question
B whether there was any resignation and whether letter of
  resignation was signed by the objectors and whether the             +
  resignation was approved by any resolution and on the question
  of refund of share money and the effect of refund and
  acceptance. The Registrar shall also consider the other
C materials which have relevance so far as resignation is
  considered. It would be open to the Registrar to call for the
  records and the documents from the parties within a period of 6
  months. There would be no allotment to 13 persons who raised
  objections until decision is taken by the Registrar.
D          6. The appeal is disposed of accordingly. No costs.
    D.G.                                      Appeal disposed of.     --;..