Wing Commander V. Ramadurai (Retd.) Member, Government Officials Co-op Housing Society, Besant NagarChennai – 600 090 v. The State of Tamil Nadu & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 9.11.2010 CORAM: THE HONOURABLE MR.JUSTICE P.JYOTHIMANIW.P.No.25189 of 2003Wing Commander V.Ramadurai (Retd.)Member, Government Officials Co-opHousing Society, Besant NagarChennai – 600 090... PetitionerVs.1. The State of Tamil Nadu rep. by its Secretary Co-op (Housing) Department Fort St.George, Chennai – 9.2. The Registrar (Housing) Co-operative Societies, 79, 4th Main Road Gandhi Nagar, Adyar Chennai – 20.3. The Deputy Registrar (Housing) 18, Ramanathan Street T.Nagar, Chennai – 17.4. Government Officials Co-operative Housing Society, rep. by its Special Officer, Besant Nagar Chennai – 90. .. RespondentsPRAYER: Petition under Article 226 of the Constitution of India forissue of a writ of Certiorarified Mandamus to call for the recordsconnected with the order of the second respondent made inNo.1812/2002/E2, dated 3.4.2003, to quash the same insofar asdeclaring the resolution of the society dated 30.6.1984 curtailingthe membership of the society to 296 flat owners as not enforceable,and to direct the fourth respondent to take action in terms of theorder dated 3.4.2003 passed by the second respondent. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner: Mr.Krishna Srinivasan for M/s.Ramasubramaniam AssociatesFor Respondents: Mr.P.Gurunathan Government Advocate for respondents 1 to 3 Mr.A.Baskaran for 4th respondent ORDERThe writ petition is directed against the order of the secondrespondent/Registrar (Housing) Co-operative Societies dated 3.4.2003rejecting the appeal filed by the petitioner, insofar it was heldthat the resolution of the society dated 30.6.1984 restricting themembership of the society to 296 flat owners was unenforceable, andfor a direction to the fourth respondent to take action in terms ofthe order of the second respondent dated 3.4.2003.2.1. The writ petitioner is one of the members of the fourthrespondent/Government Officials Co-operative Housing Society, whichhas been constituted with the object of providing houses for itsmembers. The fourth respondent/Society was started in the year 1966for buying and acquiring land by purchase, laying of the said landsas house sites to suit the requirements of the society and toconstruct residential houses and flats or other buildings for thebenefit of its members. 2.2. It is stated that with the above said object the societyhas purchased vast extents of land in Oorur Village in South Madras,called as Besant Nagar, from the Tamil Nadu Housing Board and theconstructions of individual units were completed in the year 1984 andpossession was handed over to the individual members and therefore,the main object of the society has been achieved and as on date, thesociety is involved only in the maintenance of 296 dwelling unitsbelonging to its members.2.3. The management of the fourth respondent/Society is vestedwith the Board of Directors as per the bye-laws framed in accordancewith the Tamil Nadu Co-operative Societies Act, 1983 (for brevity,"the Act") and the board members shall hold the office for a periodof three years. It is stated that the present Board, which assumedoffice in September, 1996, continued till 25.5.2001, when it wassuperseded by the Government by G.O.368, dated 25.5.2001. 2.4. It is stated that the then Board of Directors taking noteof the fact that the construction activities have completed, by https://hcservices.ecourts.gov.in/hcservices/ resolution dated 30.6.1984 restricted the membership of the societyto 296 members, who are the holders of the flats. The saidresolution was lodged with the second respondent for registrationalong with the annual reports, audited reports, after approval of thesame at the Annual General Body Meetings from 1984 onwards andtherefore, according to the petitioner, the number of members of thesociety is fixed at 296.2.5. It is stated that since the working capital of the fourthrespondent/society was below ` 5 Lakhs, it could not have a paidemployee as a Secretary. However, the fourth respondent appointed apaid employee as a Secretary and the subscription of the members wasincreased. 2.6. It is the case of the petitioner that he has represented tothe first respondent about the mal-administration of the fourthrespondent/ society by various representations dated 28.3.2001,31.3.2001, 2.4.2001, 15.4.2001 and 5.5.2001. Pursuant to the same,it is stated that the first respondent has directed the convening ofAnnual General Body Meeting of the society on 15.4.2001 by appointingtwo representatives from the Co-operative Department to supervise theconduct of the meeting and it was in those circumstances, the Boardof Directors of the fourth respondent/ Society inducted 302 newmembers on 13.3.2001, based on a resolution stated to have beenpassed on the said date, and that induction of large number ofmembers was only for the purpose of outnumbering the existing 296members. On the date of the meeting there was a chaotic situationand the Government nominees adjourned the meeting and the noconfidence motion moved by 296 flat owners, who are the members, wasfrustrated.2.7. In the meantime, the Government in the gazette notificationissued on 25.5.2001 has superseded the governing body of the fourthrespondent/society and appointed a Special Officer. The petitionerthereafter submitted a memorandum to the third respondent/DeputyRegistrar (Housing) on 10.8.2001 to declare that the 296 flat ownersalone constitute the membership of the society; that these 296 flatowners should alone convene the General Body Meeting; and he alsorequested for removal of the paid Secretary.2.8. On the writ petition filed in W.P.No.18472 of 2001 by thepetitioner, this Court, by an order dated 8.10.2001, has directed toconsider the representation. However, the third respondent, in theletter dated 13.12.2001, has stated that there was nothing wrong withthe affairs of the fourth respondent/society. It was against thatorder of the third respondent, the petitioner has filed an appeal tothe second respondent under Section 152 of the Act. The secondrespondent, by the impugned order dated 3.4.2003, has directed thefourth respondent to look into the legality of the newly admitted 302members; and also directed the fourth respondent to convene a General https://hcservices.ecourts.gov.in/hcservices/ Body meeting of the legally admitted members, apart from directingthe fourth respondent to look into the validity of the appointment ofthe Secretary as per Section 73 of the Act.2.9. The petitioner is aggrieved over the decision of the secondrespondent in the appeal holding that the resolution of the fourthrespondent dated 30.6.1984 curtailing the membership to 296 isunenforceable, on the grounds that the second respondent has nojurisdiction to declare the resolution as valid, since that was notthe issue before the second respondent on appeal; that the secondrespondent ought to have rendered a finding about the appointment ofa paid Secretary; that since the construction activity has beencompleted, there is no question of adding new members; and that thesecond respondent should have considered and given a finding as tothe legality of the induction of 302 members on 13.3.2001.3.1. The fourth respondent has filed a counter affidavit statingthat the petitioner has no locus standi, since he cannot representthe Government Officials Co-operative Housing Society. Thepetitioner, if at all is aggrieved, can only make an applicationunder Section 81 of the Act, since such grievance can be raised onlyby the required number of members and therefore, without invokingSection 81 of the Act, the filing of the writ petition is notmaintainable. 3.2. It is stated that the impugned order was passed as early as3.4.2003 and the revision ought to have been filed by 2.7.2003 andthe writ petitioner has failed to avail proper remedy available underthe provisions of the Act. 3.3. It is further stated that since it is the case of thepetitioner that the Board and the Secretary of the fourthrespondent/Society have been acting against the interest of thesociety and inasmuch as the society has been superseded by thegovernment order, the grievance of the petitioner does not survive. 3.4. It is also stated that inasmuch as the object of the fourthrespondent/society is not only to build residential houses or flats,but there are also other objects available, the increase of memberscannot be said to be against the provisions of the Act. 4.1. It is the main contention of the learned counsel for thepetitioner that when the Board of Directors of the fourth respondent/society have passed resolution on 25.5.1984 restricting the number ofmembers to 296, after 18 years the members cannot be increased,ignoring the said resolution.4.2. It is his further submission that the membership of thefourth respondent/Society itself is based on the object of thesociety and therefore, it does not mean that any person who is above https://hcservices.ecourts.gov.in/hcservices/ the age of 18 years would be eligible to be admitted. 4.3. It is his further submission that inasmuch as the object ofthe fourth respondent/society was to put up construction and once theconstruction is completed, there is no question of increasing themembers and it is also his submission that as per the bye-laws, onlythe persons who are having the house sites can be members.5. On the other hand, it is the contention of the learnedcounsel for the respondents that the petitioner's remedy is underSection 81 of the Act and as against the order of the secondrespondent, a revision lies and therefore, the writ petition is notmaintainable.6. On a reference to the bye-laws of the Government OfficialsCo-operative Housing Society Limited, the object of the fourthrespondent/ society is stated in Clause (2) as follows:"2. The objects of the Society shall be: - (a) to buy or acquire land by purchase, mortgage, lease,exchange, gift or otherwise;(b) to lay out land to suit the requirements of thesociety in shape of roads, parks, play-grounds, schools,hospitals, water works, markets, post offices and othersocial amenities, etc.'(c) to lay out land as house sites for the benefit ofthe members of the society;(d) to construct or cause to be constructed buildings orother works of common utility to the society;(e) to build or cause to be built residential houses orflats or other buildings for the members;(f) to hold, sell, mortgage, lease out on hire, or onhire purchase system or otherwise dispose of land,houses, house sites, buildings, and all otherproperties, movable and immovable as may be necessaryfor carrying out the objects of the society;(g) to establish and maintain social, recreative,educational, public health or medical institutions forthe benefit of the members;(h) to raise funds required for the business of thesociety;(i) to repair, alter or otherwise deal with thebuildings of the society; and(j) to do all things necessary and expedient for theaccomplishment of the aforesaid objects and for thecomfort, convenience and good of the members."7. Clause 6(1)(a) of the Bye-Laws, which is as follows:"6 (1)(a) Any person over 18 years of age who iscompetent to contract shall be eligible for admission asa member. But no person can claim admission as a matter https://hcservices.ecourts.gov.in/hcservices/ of right."even though states that the membership cannot be claimed as of right,specifies the qualification for becoming a member as completion of 18years of age.8. Clause 39(a)(i) of the Bye-Laws, which is as follows:"39(a)(i) Every member shall at the time of admission tothe Society specify the type of house/flat he proposesto acquire/to acquire perpetual tenancy rights by hire-purchase from the Society and execute an agreement tothat effect to the Society undertaking in addition toindemnify the Society to the extent of the loss that maybe sustained on account of the member not keeping to thecontract."contemplates that at the time of admission every member shall specifythe flat or house which he proposes to acquire. It also states thateven a tenancy right can be acquired to make a person a member andeven by hire purchase a person can enter into the place to opthimself to be a member. Under the Bye-laws, as originally stood,there is no restriction of membership.9. The Annual Administration Report of the Board of Directorsdated 25.5.1984, the operative portion of which regarding membershipis as follows:"1. Membership: The Membership of the Society as on1.7.1983 was 345. The corresponding number as on30.4.1984 is 296. This reduction has followed thedecision of the Board of Directors (Vide theirResolution dated 7.11.1983) to restrict membership toflat owners only, having regard to Building activityhaving come to an end with the completion of the IIIPhase blocks B/19 and B/20 and to audit objections tosuch membership. Several non-flat owning members hadalso expressed a desire to withdraw their membership forvarious reasons but their membership fees could not berefunded because of bye-law provisions. A formal draftResolution for the General Body to ratify the decisionof the Board of Directors is appended."is only a decision and not incorporated as amendment to the Bye-Lawsin the manner known to law. Therefore, the decision of the Board ofDirectors to restrict the members as on 30.4.1984 to 296 has not beenstatutorily incorporated in the Bye-Laws of the fourthrespondent/society in the form of an amendment.10. Even after the amendment in respect of Clause 39(a)(i) ofthe Bye-Laws, the amended provision only states as follows:"39(a)(i) : Every member shall at the time of admissionto the Society specify the type of house/flat heproposes to acquire and execute an agreement to thateffect to the Society undertaking in addition to https://hcservices.ecourts.gov.in/hcservices/ indemnify the society to the extent of the loss that maybe sustained on account of the member not keeping to thecontract."11. It was in those circumstances, considering the object of theAct, the second respondent, on appeal, has passed the order observingthat the restriction of membership to any number is unenforceable.Admittedly, as it is stated by the petitioner himself, he isconcerned only about that portion of the impugned order of the secondrespondent. The petitioner has no grievance against the order of thesecond respondent directing the fourth respondent to consider aboutthe requirement of paid Secretary, since by virtue of the governmentorder a Special Officer was appointed to the fourthrespondent/society, and also with regard to the further directiongiven by the second respondent to find out the legality of the newlyinducted members, stated to have been numbering around 302, whichnecessarily has to be done in the light of the amendment to the bye-laws.12. As submitted by the learned counsel for the fourthrespondent, if really the affairs of the fourth respondent/societyare carried out by either the Special Officer or the persons who arein-charge against the interest of the society, including thecommitting of misappropriation, fraudulent retention of any money orproperty, breach of trust, corrupt practice, or mismanagement, it isnot as if the petitioner has no remedy available under the Act.Section 81(1) of the Act, which is as follows:"Section 81. Inquiry.- (1) The Registrar may, of his ownmotion and shall, on the application of a majority ofthe board or of not less than one-third of the membersor on the request of the financing bank or of theDistrict Collector, hold an inquiry or direct someperson authorised by him by order in writing in thisbehalf to hold an inquiry into the constitution, workingand financial conditions of a registered society or anyalleged misappropriation, fraudulent retention of anymoney or property, breach of trust, corrupt practice, ormis-management in relation to that society or into anyparticular aspect of the working of that society."empowers the Registrar of Co-operative Societies even to suo motoconduct inquiry and in cases where required number of members apply,which is majority of the Board of Directors or members not less thanone-third of the total number of members, the Registrar can alwayslook into the mismanagement if at all having been committed in theaffairs of the fourth respondent/society.13. In fact, when such inquiry is conducted under Section 81 ofthe Act, the persons who are responsible for causing monetary loss tothe society can always be surcharged under Section 87 of the Act,making them liable to indemnify the loss caused to the society by https://hcservices.ecourts.gov.in/hcservices/ their conduct. When such an effective alternative remedy isavailable, it is not known as to why the petitioner has chosen tofile the writ petition in respect of the alleged mismanagement.14. Admittedly, the impugned order was passed by the secondrespondent, as an appellate authority under Section 152 of the Act,in an appeal filed by the petitioner. Under Section 153 of the Act, arevision power has been given to the Government as against the orderof the Registrar, if the legality of the order passed by theRegistrar is questioned. Section 153 of the Act is as follows:"Section:153. Revision - (1) The Registrar may of hisown motion or on application, call for and examine therecord of any officer subordinate to him or of the boardor any officer of a registered society or of thecompetent authority constituted under sub-section (3) ofSection 75 and the Government may, of their own motionor on application, call for and examine the record ofthe Registrar, in respect of any proceedings under thisAct or the Rules or the bye-laws not being a proceedingin respect of which an appeal to the Tribunal isprovided by sub-section (1) of Section 152 to satisfyhimself or themselves as to the regularity of suchproceedings, or the correctness, legality or proprietyof any decision passed or order made therein; and, if inany case, it appears to the Registrar or the Governmentthat any such decision or order should be modified,annulled, reversed or remitted for consideration, he orthey may pass orders accordingly:Provided that every application to the Registrar or theGovernment for the exercise of the powers under thissection shall be preferred within ninety days from thedate on which the proceedings, decision or order towhich the application relates was communicated to theapplicant.(2) No order prejudicial to any person shall be passedunder sub-section (1) unless such person has been givenan opportunity of making his representations.(3) The Registrar or the Government, as the case may be,may suspend the execution of the decision or orderpending the exercise of his or their power under sub-section (1) in respect thereof.(4) The Registrar or the Government may award costs inany proceedings under this section to be paid either outof the funds of the society or by such party to theapplication for revision as the Registrar or theGovernment may deem fit." https://hcservices.ecourts.gov.in/hcservices/

15. It is no doubt true that as against the order of the secondrespondent the petitioner should have filed such revision underSection 153 of the Act within 90 days, viz., on or before 2.7.2003.But, in the meantime, without resorting to the said remedy, thepetitioner has filed this writ petition. When it is the case of thepetitioner that the object of the fourth respondent/society is onlyfor the purpose of construction of the houses and flats and thatobject has been achieved and therefore, it does not require additionof any new members and if on that basis the order of the secondrespondent is assailed as not legal, it is for him to workout hisremedy by filing revision before the Government. Moreover, suchfinding requires appreciation of various material facts, which, in myconsidered view, cannot be done by exchange of affidavits underArticle 226 of the Constitution of India.16. Taking note of the fact that the petitioner withoutapproaching the Government by filing revision under Section 153 ofthe Act has approached this Court by filing writ petition and thewrit petition is pending in these years, I am of the considered viewthat since the claim of the petitioner survives, which requires asubstantial decision by appreciation of evidence, the petitioner mustbe permitted to file a revision to the Government.Under such circumstances, the writ petition stands dismissed,however with liberty to the petitioner to file revision before theGovernment against the order of the second respondent under Section153 of the Act and if such revision is filed within a period of twoweeks from the date of receipt of a copy of this order, theGovernment shall receive the same and decide on merits and inaccordance with law, after giving opportunity to the petitioner,without rejecting the revision on the ground of limitation. Nocosts. Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar Note to Registry:Registry is directed to return the original impugned order to the counsel for the petitioner. https://hcservices.ecourts.gov.in/hcservices/ sasiTo:1. The Secretary State of Tamil Nadu Co-op (Housing) Department Fort St.George, Chennai – 9.2. The Registrar (Housing) Co-operative Societies, 79, 4th Main Road Gandhi Nagar, Adyar Chennai – 20.3. The Deputy Registrar (Housing) 18, Ramanathan Street T.Nagar, Chennai – 17.4 The Special Officer The Government Officials Co-operative Hosuing Society Besant Nagar, Chennai-90+ One C.C. To M/s.Ramasubramanian Associates Sr.No.80858+ One C.C. To the Government Pleader Sr.No.80399W.P.No.25189 of 2003MS[CO]