SANT LAL GUPTA & ORS. v. MODERN COOP. GROUP HOUSING SOCIETY LTD. & ORS

Citation: [2010] 13 S.C.R. 621

Court: Supreme Court of India

Bench: P. SATHASIVAM, B.S. CHAUHAN

Case summary

SANT LAL GUPTA & ORS. v. MODERN COOP. GROUP HOUSING SOCIETY LTD. & ORS.pdf

Judgment text

[2010] 13 (ADDL. ) S. C. R. 621 SANT LAL GUPTA & ORS. V. MODERN COOP. GROUP HOUSING SOCIETY LTD. & ORS. (Civil Appeal No. 9439 of 2003) OCTOBER 18, 2010 · [P. SATHASIVAM AND DR. B. S. CHAUHAN, JJ. ] Delhi Co-operative Societies Rules, 1973- r. 36(3) - Cooperative Housing Society passing resolution proposing expulsion of its members - The proposal sent for approval to the Registrar, Co-operative Societies - Records submitted by Society before Registrar after seven years - Thereafter proposal rejected by the Registrar- In the first round of litigation, High Court remanding the matter to the Registrar 0 for reconsideration - In the second round of litigation, High Court in a writ petition holding that the proposal would be deemed to be approved as the same was not decided within a period of 6 months as required u/r.

36(3) - On appeal, held: The resolution passed by the Society cannot be given effect to, unless approval is accorded by the Registrar as mandatorily required under the Act and the Rules - High Court has wrongly gone into the question of delay on the part of the Registrar in deciding the approval of the resolution of the Society, leaving aside the core issue - On facts, no interference was warranted by High Court in its equity jurisdiction for issuing the writ of Certiorari - Delhi Cooperative Societies Act, 1972.

Interpretation of Statutes - Legal fiction - Interpretation of - Held: Interpretation of the legal fiction must be limited to the purpose indicated_ by the context and it cannot be given a larger effect - what can be deemed to exist under a legal fiction are only facts and no legal consequences not flowing from the law as it stands - In absence of a statutory provision, the provision cannot be construed as to provide for a fiction - Creation of fiction by judicial interpretation would amount to legislation. Constitution of India, 1950 - Art. 226 - Writ of Certiorari - Scope of - Held: Writ of Certiorari under Article 226 can be 8 issued only when there is failure of justice and there is error apparent on the face of the record or there is error in · jurisdiction or authority or there is breach of principle of natural justice - While issuing such writ, order under challenge not to undergo scrutiny of as an appellate court.

Judgment - Recording of reasons in - Requirement of - Held: While deciding an issue, the court is bound to give reason. s for its conclusion - Recording of reasons is principle of natural justice - It ensures transparency and fairness in decision making - It is one of the fundamentals of such administration of justice-delivery system - Principles of natural justice - Administration of Justice. Precedent - Co-ordinate Bench of High Court, after considering the judgment passed by another co-ordinate Bench of the High Court, taking contrary view - Propriety of - Held: A co-ordinate Bench cannot comment upon discretion exercised or judgment rendered by another coordinate Bench of the same court - The rule of precedent is binding on the court - In judicial administration, precedents which enunciate rules of law form foundation of administration of Justice - Judicial Propriety - Administration of Justice.

Maxim - 'quando aliquid prohibetur, prohibeus et omne per quad devenitur ad illud' - Applicability of Words and Phrases: 'Approval' - Meaning of Expression 'An error apparent on the face of the record' - Meaning of The appellants were the members of the respondent- Society (A co-operative Group Housing Society). The Society proposed ex·pulsion of some of its members, including the appellants. The proposal was sent to the Registrar of the Co-operative Societies for approval. The Society submitted its records before the Registrar after about 7 years. Thereafter, the Registrar passed its order, . rejecting the proposal. The Society filed revision before the Financial Commissioner, which was dismissed. The Society, then filed a writ petition. The High Court remanded the case to the Registrar for reconsideration. The Registrar, after reconsidering the matter, again rejected the proposal. Revision against the order was also dismissed by the Financial Commissioner.

The Society filed another writ petition. The High Court allowed the petition, setting aside the orders passed by the Registrar and the Financial Commissioner. The High Court held interalia that since the resolution sent by the Society was not decided within 6 month as required u/r. 36(3) of the Delhi Co-operative Societies Rules, 1973, it would be deemed to have been approved, though there is no such deeming provision under the Rules. Therefore, the instant appeal was filed. Allowing the appeal, the Court HELD: 1. 1. It is evident from Rule 36(3) of Delhi Cooperative Societies Rules, 1973 that the legislature desired that every resolution regarding expulsion of its members, sent to the Registrar by the Society, be considered and decided. within a period of 6 months and that the resolution shall be effective from the date of approval. If approval is required, the order which is required to be approved by the statutory authority cannot become effective unless the approval is accorded.

Approval means confirming, ratifying, assenting, sanctioning or consenting to some act or thing done by another. The very act of approval means, the act of passing judgment, the use of discretion, and determining as an adjudication therefrom unless limited by the context of the statute. Thus, the resolution passed by the Society cannot be given effect to, unless approval is accorded by the Registrar as mandatorily required by the Delhi Cooperative Societies Act, 1972 and the Rules. [Paras 9, 10 and 13] [633-H; 634-A-C; 635-A-B] Tri/ochan Mishra etc. v. State of Orissa and Ors. AIR 1971 SC 733; Union of India and Ors. v. Mis. Bhimsen Walaiti Ram AIR 1971 SC 2295; State of Orissa and Ors. v. Harinarayan Jaiswa/ and Ors. AIR ~972 SC 1816; State of UP. and Ors. v. Vijay Bahadur Singh Ors. AIR 1982 SC 1234; Laxmikant and Ors. v. Satyawan and Ors. AIR 1996 SC 2052; Vijayadevi Navalkishore Bhartia and Anr. v. Land Acquisition Officer and Anr. (2003) 5 sec 83 - relied on. 1. 2.

The Legislature in its wisdom has not enacted any deeming provision providing that in case the resolution is not considered and finally not decided by the Registrar within a period of six months, the resolution shall become effective and operative. It is the exclusive prerogative of the Legislature to create a legal fiction meaning thereby to enact a deeming provision for the purpose of assuming the existence of a fact which does not really exist. Even if a legal fiction is created by the Legislature, the court has to ascertain for what purpose the fiction is created, and it must be limited to the purpose indicated by the context and cannot be given a larger effect. More so, what can be deemed to exist under a legal fiction are merely facts and no legal consequences which do not flow from the law as it stands. It is a settled legal proposition that in absence of any statutory provision, the provision cannot be construed as to provide for a fiction in such an eventuality.

More so, creating a fiction HOUSING SOCIET,Y LTD. by judicial interpretation may amount to legislation, a field exclusively within the domain of the legislature. Extension of the period from 6 months to 1 year, amounts to legislation. [Paras 14 and 17) [635-B-E; 636-C] Ajaib Singh v. Sirhind Coop. Marketing-cum-processing 8 ServiceSociety Ltd. and Ors. (1999) 6 SCC 82; Union of India and Anr. v. Deoki Nandan Aggarwal AIR 1992 SC 96 - relied on. B. B. Chibber v. Anand Lok Co-operative Group Housing Society Ltd. and Ors. 90 (2001) DLT 652 - approved. 1. 3 The High Court had found fault with the orders of the Registrar and the Financial Commissioner basically on the grounds of delay and laches without realising that the writ petition was not against the orders passed by the Registrar after inordinate delay of 7 years.

That had been the subject matter of the earlier writ petition filed by the Society and the High Court was dealing with subsequent orders which had been passed by those authorities after remand. Therefore, there was no occasion for the High Court to go into those issues leaving the core issue undecided. In fact, the High Court has reviewed its earlier order as it dealt with the issues involved in the earlier writ petition. The High Court failed to appreciate that it was not dealing with a review petition as it had reviewed its earlier judgment indirectly. [Para 22] [637-C-F) 1. 4 It is a settled proposition of law that what cannot be done directly, is not permissible to be done obliquely, meaning thereby, whatever is prohibited by law to be done, cannot legally be effected by an indirect and circuitous contrivance on the principle of "quando a/iquid prohibetur, prohibetur et omne per quod devenitur ad illud. " An authority cannot be permitted to evade\a law by "shift or contrivance".

[Para 23] [637-F-H] Jagir Singh v. Ranbir Singh and Anr. AIR 1979 SC 381; M. C. Mehtav. Kamal Nath and Ors. AIR 2000 SC 1997 referred to. 1. 5 The High Court has dealt with the case without meeting any of the reasons given by the Registrar and unnecessarily laboured in digging the old fossils that the Registrar failed to decide the case for long 8 years and in such a fact-situation, he would become functus-officio, without appreciating that if the Society was so aggrieved by inaction of the Registrar, it could have approached the High Court to issue a direction to the Registrar to decide the case within a stipulated period. The statutory authorities must be allowed to exercise their powers reasonably and in good faith. In the instant case, the Resolution dated 27. 4. 1987 was forwarded by the Society to the Registrar for approval after an inordinate delay on 20. 2. 1988.

The High Court itself has taken note that "several opportunities were given to the Society which finally submitted the records on 19. 9. 1995. " Thus, delay was totally attributable to the Society itself. [Paras 26) [639-B-F] 1. 6 The High Court has not recorded any finding of fact as to when the demands had been made from the members and as to whether there was any progress in the construction work of the Society. Not only administrative but also judicial order must be supported by reasons, recorded in it. Thus, while deciding an issue, the Court is bound to give reasons for its conclusion. It is the duty and obligation on the part of the court to record reasons while disposing of the case. The hallmark of an order and exercise of judicial power by a judicial forum is that the forum discloses its reasons by itself.

Giving of reasons has always been insisted upon as one of the fundamentals of sound administration of the justice-delivery system, to make it known that there had been proper and due application of mind to the issue before the court, and also as an essential requisite of the principles of natural justice. "The giving of reasons for decision is an essential attribute of judicial and judicious disposal of a matter before Courts, and which is the only indication to know about the manner and quality of exercise undertaken, as also the fact that the court concerned had really applied its mind. " The reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same, the order become. s lifeless. Reasons substitute subjectivity with objectivity. The absence of reasons renders an order indefensible/ unsustainable, particularly, when the order is subject to further challenge before a higher forum.

Recording of reasons is principle of natural justice and every judicial order must be supported by reasons recorded in writing. It ensures transparency and fairne$S in decision making. The person who is adversely affected must know why his application has been rejected. [Paras 27 and 28] [639-G- H; 640-A-F] State of Orissa v. Dhaniram Luhar AIR 2004 SC 1794; State ofRajasthan v. Sohan Lal and Ors. (2004) 5 SCC 573; Vishnu Dev Sharma v. State of Uttar Pradesh and Ors. (2008) 3 SCC 172; Steel Authority of India Ltd. v. Sales Tax Officer, Rourke/a I Circle and Ors. (2008) 9 SCC 407; State of Uttarancha/ and Anr. v. Sunil Kumar Singh Negi AIR 2008 SC 2026; U. P. S. R. T. C. v. Jagdish Prasad Gupta AIR 2009 SC 2328; Ram Phal v. State of Haryana and Ors. (2009) 3 SCC 258; State of Himachal Pradesh v. Sada Ram and Anr. (2009) 4 SCC 422; The Secretary and Curator, Victoria MemorialHall v. Howrah Ganatantrik Nagrik Samity and Ors. AIR 2010 SC 1285 - relied on. 1.

7 The High Court ought to have considered that it was a petition for a writ of certiorari and it was not dealing with an appeal. The writ of certiorari under Article 226 of ti the Constitution can be issued only when there is a failure of justice and it cannot be issued merely because it may be legally permissible to do so. There must be an error apparent on the face of record as the High Court acts merely in a supervisory capacity. An error apparent on the face of the record means an error which strikes one on mere looking and does not need long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. Such errors may include the giving of reasons that are bad in law or inconsistent, unintelligible or inadequate.

It may also include the application of a wrong legal test to the facts found, taking irrelevant considerations into account and failing to take relevant considerations into account, and wrongful admission or exclusion of 0 evidence, as well as arriving at a conclusion without any supporting evidence. Such a writ can be issued when there is an error in jurisdiction or the authority whose order is to be reviewed has acted without jurisdiction or in excess of its jurisdiction or has failed to act. While issuing the Writ of Certiorari, the order under challenge should not undergo scrutiny of an appellate court. It is obligatory on the part of the petitioner to show that a jurisdictional error has been committed by the Statutory Authorities. There must be the breach of principles of natural justice for resorting to such a course. Thus the facts of the instant case did not warrant any interference by the High Court in its equity jurisdiction for raising the writ of certiorari.

[Para 29) [641-B-H; 642-A] Harbans Lal v. Jagmohan Saran AIR 1986 SC 302; MunicipalCouncil, Sujanpur v. Surinder Kumar (2006) 5 SCC 173; Sarabjit Rick Singh v. Union of India (2008) 2 SCC 417; Assistant Commissioner, Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Limited (2008) 14 SCC 171 - relied on. I 1. 8. As the Society has been taken over by the Administrator and a large number of flats remained unallotted, In order to meet the ends of justice it is required that the appellants be adjusted against the said unallotted flats. However, the Society shall put a demand, if any, and the appe~lants are directed to make the payment with interest in a,Ccordance with law. [Para 31] [642-C-D] 2.

A co-ordtnate bench cannot comment upon the discretion exer e done directly, is not permissible to be done obliquely, meaning thereby, whatever is prohibited by law to be done, cannot legally be effected by an indirect and circuitous contrivance on the principle of "quando aliquid prohibetur, prohibetur et omne per quod devenitur ad illud. " An authority cannot be permitted to evade a law by "shift or contrivance". (See: Jagir Singh v. Ranbir Singh & Anr. , Al R 1979 SC 381 ; and M. C. Mehta v. Kamal Nath & Ors. , AIR 2000 SC 1997). A 24. The Registrar after remand considered the matter and vide order dated 26. 8. 1997 disposed of the same dealing with the question of the expulsion of the appellants and others. The case was decided after giving full opportunity of hearing to all the parties concerned.

The contention of the Society has been B that in spite of sufficient opportunities the proposed expelle(j members did not pay the dues, and therefore, the Society was justified in passing the resolution for their expulsion. The appellants had contended that no valid demand had ever been made by the Society and affairs of the Society were totally c mismanaged by one Shri C. D. Garg, who had no competence to deal with the working of the Society. After appreciating the evidence on record the Registrar recorded the following findings: (i) Affairs of the Society were mis-managed by Shri C. D.

Garg who was father of the Secretary of the Society andhad no authority to function on behalf of the Society; (ii) There was no development in the Society in spite of large turnover of members; E (iii) New members had been enrolled before grant of any approval of expulsion by the Registrar; (iv) No construction had been started and there was no F progress in the work and thus no demand could have been made from the members of the Society; (v) Affairs of the Society required to be enquired into; and (vi) According approval of expulsion to the members would amount to encouraging the mal-practices in the Society. 25. While considering the revision filed by the Society under Section 80 of the Act 1972, the Financial Commissioner in his judgment and order dated 26. 8. 1997 concurred with the reasoning given by the Registrar and the revisional authority, and had given cogent reasons for such agreement. 26.

The High Court has dealt with the case without meeting 8 any of the reasons given by the Registrar and unnecessarily laboured in digging the old fossils that the Registrar failed to decide the case for long 8 years and in such a fact-situation he would become functus-officio, without appreciating that if the Society was so aggrieved by inaction of the Registrar, it could have approached the High Court to issue a direction to the Registrar to decide the case within a stipulated period. It is not to be forgotten that there could be many reasons and circumstances to account for the resolution not having been considered within the stipulated time. In such cases delay may be for reasons on the part of the applicant himself. The statutory authorities must be allowed to exercise their powers reasonably and in good faith. In the instant case, the Resolution dated 27. 4. 1987 was forwarded by the Society to the Registrar for approval after an inordinate delay on 20. 2. 1988.

The High Court in paragraph 13 of the impugned judgment itself has taken note that "several opportunities were given to the Society which finally submitted the records on 19. 9. 1995. " Thus, delay was totally attributable to the Society itself. 27. So far as the issue of the expulsion of the members of the Society is concerned, the High Court has not recorded any finding of fact as to when the demands had been made from the members and as to whether there was any progress in the construction work of the Society. We have been taken through the entire judgment of the High Court. We cannot find any single iota which may be termed as a reason for the judgment and we are at a complete loss and could not find out as what the High Court has decided. 28. It is a settled legal proposition that not only administrative but also judicial order must be supported by reasons, recorded in it. Thus, while deciding an issue, the Court is bound to give reasons for its conclusion.

It is the duty and obligation on the part of the Court to record reasons while disposing of the case. The hallmark of an order and exercise of judicial power by a judicial forum is that the forum to discloses its reasons by itself Giving of reasons has always been insisted upon as one of the fundamentals of sound administration of the justice - delivery system, to make it known that there had been proper and due application of mind to the issue before the Court and also as an essential requisite of the principles of natural justice. "The giving of reasons for a decision is an essential attribute of judicial and judicious disposal of a matter before Courts, and which is the only indication to know about the manner and quality of exercise 0 undertaken, as also the fact that the Court concerned had really applied its mind. " The reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same, the order becomes lifeless.

Reasons substitute subjectivity with objectivity. The absence of reasons renders an order indefensible/unsustainable particularly when the order is subject to further challenge before a higher forum. Recording of reasons is principle of natural justice and every judicial order must be supported by reasons recorded in writing. It ensures transparency and fairness in decision making. The person who is adversely affected must know why his application has been rejected. [Vide: State of Orissa v. Dhaniram Luhar AIR 2004 SC 1794; State of Rajasthan v. Sohan Lal & Ors. (2004) 5 SCC 573; Vishnu Dev Sharma v. State of Uttar Pradesh & Ors. (2008) 3 SCC 172; Steel Authority of India Ltd. v. Sales Tax Officer, Rourke/a I Circle & Ors. (2008) 9 SCC 407; State of Uttaranchal & Anr. v. Sunil Kumar Singh Negi AIR 2008 SC 2026; U. P. S. R. T. C. v. Jagdish Prasad Gupta AIR 2009 SC 2328; Ram Pha/ v. State of Haryana & Ors. (2009) 3 SCC 258; State of Himachal Pradesh v. Sada Ram & Anr.

(2009) 4 SCC 422; and The Secretary & Curator, Victoria Memorial Hall v. Howrah Ganatantrik Nagrik Samity & Ors. , AIR 2010 SC 1285). 29. The High court ought to have considered that it was a writ of certiorari and it was not dealing with an appeal. The writ of certiorari under Article 226 of the Constitution can be issued 8 only when there is a failure of justice and it cannot be issued merely because it may be legally permissible to do so. There must be an error apparent on the face of record as the High Court acts merely in a supervisory capacity. An error apparent on the face of the record means an error which strikes one on mere looking and does not need long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. Such errors may include the giving of reasons that are bad in law or inconsistent, unintelligible or inadequate.

It may also include the application of a wrong legal test to the facts found, taking irrelevant considerations into account and failing to take relevant considerations into account, and wrongful admission or exclusion of evidence, as well as arriving at a conclusion without any supporting evidence. Such a writ can be issued when there is an error in jurisdiction or authority whose order is to be reviewed has acted without jurisdiction or in excess of its jurisdiction or has failed to act. While issuing the Writ of Certiorari, the order under challenge should not undergo scrutiny of an appellate court. It is obligatory on the part of the petitioner to show that a jurisdictional error has been committed by the Statutory Authorities. There must be the breach of principles of natural justice for resorting to such a course. (Vide: Harbans Lal v. Jagmohan Saran, AIR 1986 SC 302; Municipal Council, Sujanpur v. Surinder Kumar, (2006) 5 SCC 173; Sarabjit Rick Singh v.

Union of India, (2008) 2 SCC 417; and Assistant Commissioner, Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Limited, (2008) 14 sec 171) In view of the above, we are of the considered opinion that facts of the case did not warrant any interference by the High Court in its equity jurisdiction for raising the writ of certiorari. 30. In view of the facts and circumstances of the case and the manner in which the impugned judgment has been passed, appeal deserves to be allowed. 8 31. Be that as it may, we have been informed by learned counsel for the parties that the Society has been taken over by the Administrator and a large number of flats remained unallotted. The appellants have filed the information sought by them under the Right to Information Act, 2005 on 23. 4. 2008 which makes it clear that 15 flats bearing Nos. 14, 23, 217, 324, 325, 327, 418, 421, 426, 513, 516, 619, 623 and 726 category- ,B' and 737 category-'A' remained un-allotted.

In order to meet the ends of justice it is required that appellants be adjusted against the said un-allotted flats. However, the Society shall put a demand, if any, and the appellants are directed to make the payment with interest in accordance with law. 32. In view of the above, appeal is allowed. Judgment and order of the High Court dated 4. 9. 2002 in Civil Writ Petition No. 2/98 is hereby set aside and the judgment and order of the statutory authorities dated 26. 8. 1997 and 3. 11. 1997 are restored. There shall be no order as to costs. K. K. T. Appeal allowed.