Patna High Court
Case Details
IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.13388 of 2012 ====================================================== 1. Biscomaun Karamchari Sahkari Grih Nirman Samittee Limited, Patna Through Its Secretary 2. Nand Kishore Prasad Singh S/O Late Ramawatar Prasad Sinha R/O B/4, Biscomaun Colony, P.S.- Alamganj, District- Patna, At Present Secretary, Biscomaun Karamchari Sahkari Grih Nirman Samittee Ltd., Patna 3. Ram Swarath Singh S/O Late Bishun Singh R/O B/62, Biscomaun Colony, P.S.- Alamganj, (Patna City), District- Patna, At Present President 'Biscomaun Karamchari Sahkari Grih Nirman Samittee Ltd., Patna' (Adhyaksha), 4. Smt. Shanti Devi W/O Late Baijnath Singh Kr/O B/6, Biscomaun Colony, P.S.- Alamganj,District- Patna, At Present Member Of Board Of Director 5. Shri Rajendra Raut S/O Late Jai Govind Raut R/O C/6, Biscomaun Colony, P.S.- Alamganj, District- Patna, At Present Member Of Board Of Director 6. Sri Pankak Kumar Anupam S/O Late Kamta Prasad R/O B- 88, Biscomaun Colony, P.S.- Alamganj, District- Patna, At Present Member Of Board Of Direcator 1. The State Of Bihar .... .... Petitioner/s Versus through Secretary Co-Operative Department, Govt. Of Bihar, Patna 2. The Bihar State Co-Operative Marketing Union Ltd., Patna At Biscomaun Bhawan, West Gandhi Maidan, P.S.- Gandhi Maidan, District- Patna, Through Its Administrator 3. Managing Director The Bihar State Co-Operative Marketing Union Ltd., Patna, At Biscomaun Bhawan, West Gandhi Maidan, P.S.- Gandhi Maidan, District- Patna 4. Secretary The Bihar State Co-Operative Marketing Union Ltd., Patna, At Biscomaun Bhawan, West Gandhi Maidan, P.S.- Gandhi Maidan, District- Patna .... .... Respondent/s ============================================== Appearance : For the Petitioner/s : Mr. Shashi Anugrah Narayan, Sr. Advocate Mr. Janardan Prasad Singh, Advocate For BISCOMAUN : Mr. Partha Sarthy, Advocate For the State : Mr. Rajesh Kumar Sinha AC to 2 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 2 / 13 GP-21 ============================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER 09 23-08-2013 Heard learned counsel for the petitioners and learned counsels for the Bihar State Co-Operative Marketing Union (BISCOMAUN) and for the State of Bihar. The petitioners have approached this Court seeking quashing of the order dated 2.7.2012 issued by the respondent no.3, the Managing Director, BISCOMAUN by which he has held that the entire land of Village Sandalpur, P.S. Alamanj, Patna City measuring 11 acres 15.427 decimals is wholly the property of BISCOMAUN and hence the right, title and interest vests in BISCOMAUN since 16.4.2004 and directed, inter alia that BISCOMAUN shall take possession of all the properties which are vacant. In 1974 by letter dated 12.4.1974 the petitioner- society a primary housing co-operative society registered under the Bihar Co-operative Societies Act, 1935, created with the object of providing land and houses to its members and employees of BISCOMAUN, requested BISCOMAUN to purchase and acquire land for the members of the society to enable them to have their own houses in the town of Patna. Pursuant to the said request the Executive Committee of the Board of Directors of BISCOMAUN accepted the proposal and 3
Legal Reasoning
Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 3 / 13 purchased land measuring 11 acres and 15.427 decimals from different persons for the society with stipulation that the cost incurred by BISCOMAUN for the said purpose would be paid back by the society within 25 years along with interest @ 5%. It was also decided that the land would be transferred to society or its members only after the society or its members pay the entire amount spent by BISCOMAUN for their purposes. The decision of BISCOMAUN was duly communicated to the petitioner- society by letter dated 22.6.1974 of the Managing Director. After the purchase of the lands, on 12.12.1978 the plots were allotted through draw of lots and allotment letters were issued by a Lease Land Agreement dated 27.3.1979 entered into between BISCOMAUN and the Society which was registered on 16.4.1979. It was provided in that Agreement that absolute title shall not be conferred upon the lessee at the first instance and in the beginning the lessee should be given only the status of tenant of the land which may be revoked and lessor may resume possession of the land in the event of non-payment of the whole of the dues or any part thereof within the period of 25 years or such extended period of time. It was categorically stated that the lessor agreed that the facility of resumption will not be available to it if the lessee has made full payment of the dues within the prescribed period and there shall be absolute transfer 4 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 4 / 13 of ownership to the lessee or its successor or assign as the case may be. The possession of the land was also transferred by the lessor to the lessee creating a lease hold right for a term of 25 years. The rent was fixed at only of Rs. 151/- annually for the use and occupation of the land leased out. It was clearly stipulated that all taxes and rent payable in respect of the land shall be payable by the lessee or its members and no part of the same shall be payable by the lessor. All development work was also to be done by the lessee. It was further clearly provided that the lease has been granted for carving out suitable plots for settlement with the members of the petitioner-society with an object to construct residential houses after approval from the authority concerned. The petitioner-society as lessee was required to pay a sum of Rs. 11,52,960/- which was invested by BISCOMAUN in acquiring the land with interest @ 5% per annum. It was further required to pay an amount of Rs. 5,15,776.55 with interest on the same rate which the lessor had invested or undertaken to invest in development of land after the plan and estimate for its development is approved by the lessee within the period of lease. It was expressly provided in the agreement that the lessee and/or members of the lessee shall have the right to mortgage the land to any lending/financing Institution recognized by the Government for raising fund for development 5 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 5 / 13 and/or construction of house on the plot allotted to him. It was further provided that lessee or its members shall pay the amount of loan with interest and all other dues in instalments. The amount of instalment would be fixed by the lessor and such dues would be deducted at source from the salary or other amount payable to the members concerned and when the individual member, holders of the plots pay off all the amount with interest for construction of residential houses, i.e., all cost payable in respect of the same, the lessee shall grant “No Dues” to them. It was also provided that on the expiry of period of lease or earlier and on full discharge of all dues both to the lessor and the lending/financing institution by the lessee or its members, the lessor will convey to the lessee or its members all rights, title and interest in the said piece of land or portion thereof absolutely either to the lessee or its members separately free from all encumbrances. It was lastly provided that in case of any dispute doubt or question between the lessor and the lessee the same shall be referred to the arbitration of the Registrar, Co- operative Societies acting as such at the time of reference or his nominee and his decision shall be final and conclusive and binding on both the parties. Subsequently, the petitioner-society also entered into Lease Land Agreement on different dates with different members of the Society. One such agreement dated 12.2.1983 has been brought on the record. Under the said lease deed which was for a period of 20 years, the lessee member of the society was required to pay back the proportionate cost of acquisition and 6 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 6 / 13 development of land along with interest at the rate of 5% per annum on monthly instalments as fixed therein. It was further provided that the lessee could take sums of money as loan from any bank on the security of the land but the responsibility of paying back the said loan amount with interest shall be with the lessee. It was also provided that in case the lessee pays off the entire consideration money, the lessor 1st party shall make all necessary arrangements to get a deed of sale executed by lessor in favour of the lessee or his successor in interest, transferee or assignee who shall thereafter be the true and absolute owner of the said piece of land settled with the lessee. It was lastly provided that in case of any dispute between the lessor and the lessee, the matter would be referred for arbitration to the Administrator or the Managing Director of BISCOMAUN whose decision in the matter shall be final and binding upon both the parties. It is the stand of the petitioners that in terms of the registered Lease Land Agreement, majority of the members of the society have built their houses on the plots allotted to them by the society. It is also admitted that pursuant to the said lease land agreement BISCOMAUN started realizing cost of plots allotted to them by deducting the money from the salary along with interest @ 5% and the entire dues of BISCOMAUN had been paid by the society and its members which is also evidenced by letter dated 2.6.2003 issued by the Finance Controller of BISCOMAUN addressed to the Secretary of the petitioner- society in which it is admitted that total amount of Rs. 25,03,104.55 has been recovered out of which Rs. 16,68,736.55 was towards cost of land and Rs. 8,34,368.00 towards interest @ 5%. It is admitted that there were no dues upon the society with 7 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 7 / 13 respect to the said land. As a matter of fact, it was further admitted in the said letter that certain loans were taken by the members of the Society which has also been deducted to the extent of Rs. 4,26,502.65 by BISCOMAUN and the remaining amount of Rs. 3,76,007.07 towards the interest on the cost of the land would be adjusted from the said amount. It is thus admitted that BISCOMAUN had not only received within time the entire amount towards the cost and interest but an excess amount of approximately Rs. 50,000/- is lying with BISCOMAUN on account of the deductions made by it. The draft of the approved deed of absolute sale was also enclosed with the above letter. Earlier also by letter dated 9.11.2002 the Finance Controller had communicated to the Secretary of the petitioner-society that the Administrator had granted permission for registration of the plots in the name of such members who have paid all their dues and have obtained „No Dues‟ certificate from the society. It is also not in dispute that the Administrator, BISCOMAUN by his letter dated 12.6.2003 addressed to the District Magistrate & Collector, Patna requested him to give permission under the Urban Ceiling Act, 1976 to which an Additional Collector by his letter dated 29.7.2003 informed the Administrator that since the lessee and the lessor both are registered society, therefore the provisions of Section 19(5) of the Urban Ceiling Act does not apply. It appears that the sale deed, however, in the name of the individual members could not be executed as the society was informed by the authorized Officer of BISCOMAUN, who had been authorized to execute the sale deed, that the then Administrator wanted to execute the registered sale deed in favour of the society and not in favour of individual members. The matter remained 8 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 8 / 13 pending on the issue of registration and ultimately one of the allottee member, Sukhdeo Ram filed CWJC No. 6978/2004 before this Court for a direction upon BISCOMAUN to execute the sale deed in favour of the individual allottee members. By order dated 21.11.2007 this Court took note of the averments made in the counter affidavit of BISCOMAUN that the respondents were ready to execute the sale deed in favour of respondent no.5,i.e., BISCOMAUN Karamchari Sahkari Grih Nirman Samiti, Patna and in view of the stand of the parties in the said case disposed of the matter with the direction that the petitioners may take steps under the provisions of the Bihar Co- operative Societies Act, 1935 for consideration of the matter and deciding the mode of execution of the sale deed either in favour of the Society or individual allottees. Pursuant to the same Revision Case No. 08/2008 was filed before the Registrar, Co-operative Societies by the said Sukhdeo Ram in which the respondent-BISCOMAUN as also the petitioner-society were parties. By order dated 7.10.2009, the Registrar, Co-operative Societies directed BISCOMAUN to take steps for execution of absolute sale deed in favour of the petitioners and similarly situated other members of the Society who are either former or present employees of BISCOMAUN with respect to the plots allotted to them. Instead of acting in accordance with the direction of the Registrar, Co-operative Societies, the Managing Director of BISCOMAUN has passed the impugned order dated 2.7.2012. While passing the same the Managing Director has relied upon Clause 12 which is the Arbitration Clause in the Lease Land Agreement dated 12.2.1983 between the society and its members holding that he being the Arbitrator under the said Clause, his decision is final and binding. 9 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 9 / 13 Learned counsel for the petitioners submits that the order of the Administrator is contrary to the Lease Land Agreement dated 29.3.1979 between BISCOMAUN and the society and it is also in violation of the order dated 7.10.2009 of the Registrar, Co-operative Societies. It is submitted that the petitioner-society and its members having complied with their part of the agreement, the respondent-BISCOMAUN was obliged to have executed the sale deed in favour of the society/its members. It is contended that in the Land Lease Agreement, there was provision of resumption only in case of non-payment of entire amount within the stipulated period and it was clearly provided that the facility of resumption will not be available to the lessor if the lessee has made full payment of the dues within the period prescribed and there shall be absolute transfer of ownership to the lessee or lessee‟s successor or assign, as the case may be. It is thus urged that there can be no question of resumption of the land by BISCOMAUN merely on the expiry of the period of lease as on the full payment of the dues within the prescribed period for which „No Dues‟ certificate was also issued by the Finance Controller of BISCOMAUN on 2.6.2003, there could be no question of any resumption, rather by the said full payment in terms of the said agreement absolute transfer of ownership must be made to the lessee, its successors and assign. It is urged that aforesaid position was also accepted by the then Administrator who had given permission for the execution of the deed of absolute sale in favour of such members against whom there were no dues outstanding and it was only on account of the subsequent Administrator deciding to execute the deed in favour of the society and not its individual members that 10 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 10 / 13 the dispute has arisen and the matter had come up before this Court, whereupon it had gone to the Registrar, Co-operative Societies. It is therefore, urged that the Registrar, Co-operative Societies having finally decided the issue, it is not open to BISCOMAUN to act contrary to the said decision which has never been challenged. Learned counsel for BISCOMAUN does not challenge the aforesaid factual position. He admits the fact that the entire payment having been made by the society and its members no stand can be taken contrary to the same. As a matter of fact, it is admitted in the counter affidavit that consideration money of lease agreement has been realized from the allottee members as stated by the petitioners. On a consideration of the entire facts and circumstances and the submissions of learned counsels for the parties, I find substantial force in the submission of learned counsel for the petitioners. It is evident that the land in question itself had been acquired on the request and application of the petitioner-society for being allotted to the members of the society. The Land Lease Agreement giving the land on lease for a period of 25 years was only notionally a lease agreement as it was clearly stipulated therein that the sole purpose of grant of lease was because it was considered desirable, prudent and safe for the lessor BISCOMAUN that absolutely right, title and interest should not be conferred upon the lessee at the first instance and in the beginning the lessee should be given only the status of tenant of the land which may be reasonable and lessor BISCOMAUN may resume possession of the land in the event of non-payment of the whole dues or any part thereof within the period mentioned in the lease deed. 11 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 11 / 13 Thus, it is too late in the day for the respondents to contend that since the period of lease has expired without the execution of any deed of absolute sale therefore BISCOMAUN has become owner of the said land. It is clear from the materials on the record that BISCOMAUN itself had been deducting the cost of the land from different employee members of the society to whom the land had been allotted and the entire price had been deducted by it. After receiving the entire amount towards the consideration money of the price of the land along with interest BISCOMAUN ought not claim to continue to be the owner of the land. As a matter of fact, the Lease Land Agreement clearly stipulates that if the entire dues have been paid within the period indicated therein then there shall be no right of resumption available to the lessor-BISCOMAUN and there should be absolute transfer of ownership of the land to the society or its members. In the said circumstances, it cannot be said that merely on the expiry of the lease which was for a nominal sum of Rs. 151 per annum, after realizing the entire cost of the land from the beneficiaries allottees towards such property, that the ownership of the land would get transferred to BISCOMAUN merely because of period of lease expired. As a matter of fact, the entire cost having been recovered, BISCOMAUN would be obliged to transfer the ownership to the lessee-society or its members. This Court also finds no substance in the stand taken in the counter affidavit that the petitioner-society had failed to get the sale deed executed and thus because of fault on their part the present situation has arisen. It appears that the execution of sale deed could not be made because the earlier Administrator had taken a decision that the absolute sale deed would be executed 12 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 12 / 13 with respect to individual allottees to whom „No Dues‟ certificate has been issued by the petitioner-society and even authorized two persons of BISCOMAUN to execute the sale deed on its behalf but subsequently another Administrator had decided that the sale deed should be executed in favour of the petitioner- society. It is in view of such change of decision by the Administrator of BISCOMAUN that the situation had arisen that ultimately one of the members of the society had to approach this Court by filing a writ application which led to the direction to approach the Registrar. After the matter has been concluded by the Registrar deciding the issue and directing BISCOMAUN to execute the sale deed in favour of the individual members, in all fairness BISCOMAUN out to have acted in terms of the said direction. As a matter of fact, BISCOMAUN is obliged to act in terms of the said order which has not been challenged by it and has acquired finality. I further find that the Managing Director has practically made an uncalled for attempt to act as an arbitrator relying upon clause 12 of the agreement dated 12.2.1983 between the petitioner-society and its members as the said clause clearly stipulates that in case of a dispute between the society and its members, the Administrator or Managing Director of BISCOMAUN shall act as an arbitrator. There was or is factually no dispute between the society and its members and nothing has been referred to him to decide. Thus, he could not have suo motu acted as an Arbitrator in the matter and given a decision which is wholly contrary to law and the order dated 7.10.2009 passed by the Registrar, Co-operative Societies. The order dated 2.7.2012 is therefore wholly without jurisdiction and without any authority of law. It is accordingly quashed. 13 Patna High Court CWJC No.13388 of 2012 (9) dt.23-08-2013 13 / 13 In the light of the aforesaid discussions, the writ application is allowed and the respondent no.3, the Managing Director, BISCOMAUN is directed to ensure that the order of the Registrar, Co-operative Societies is complied with and sale deeds are executed in favour of the individual allottees within a period of three months from the date of receipt/production of a copy of this order. It is made clear that the individual allottees shall take all steps in the matter expeditiously to ensure that the sale deed is ready for execution. S.Pandey/- (Ramesh Kumar Datta, J)