V.K. Shukla, J.@mdashPetitioner, Smt. Neelam Jain has approached this Court questioning the validity of the award dated 29.06.2007 passed by Arbitrator Cooperative Society U.P. Lucknow and order of its affirmance in Appeal dated 23.03.3009 passed by Cooperative Tribunal U.P. Lucknow.
2. Brief background of the case as is reflected that there is registered Housing Society, registered under the provision of U.P. Cooperative Societies Act 1965 with its registered office at C-7 Parivahan Apartment Sector 5 Vasundhra Ghaziabad U.P. Said Society came into existence in the year 1998 with the aim and object to provide land/residential flats to its members on payment of easy instalment on the principle of ''no profit no loss''. Affairs of the aforesaid society has to be run and managed as per the provision of U.P. Cooperative Societies Act, 1965 and Rules framed thereunder and as per approved bye laws of the society. In the said society Kshetrapal Sharma was inducted as member. Society in question came up with the scheme wherein flats had to be constructed and allotted to its members. Kshetrapal Sharma was allotted flat No. 506-B in the draw held on 20.06.2004 and consequently, allotment letter was issued in his favour. As per Kshetrapal Sharma cost of ''B'' category flat as published by the society was Rs. 8.50 lacs including cost of land and later on members of the society agreed for increasing of the cost of B category flat to 9 lacs which was approved in the open general meeting. Thereafter record in question reflects that price of the flats as increased as per recommendation of Dahaiya Committee Report dated 27.03.2004 qua the same. Secretary, Jeevan Bima Rashtriya Awas Samiti Ltd. Ghaziabad vide letter dated 05.04.2004 informed the members that enhanced cost of Type-B flat is at the rate of Rs. 11.42 Lacs and amount of Rs. 2.42 lacs further has to be deposited. Letters were sent 19.07.2004, 06.08.2004, 23.08.2004 in this regard and ultimately on 03.01.2005 Kshetrapal Sharma was asked to pay balance amount of Rs. 2.42 lacs by 08.01.2005 failing which his allotment would be cancelled. Thereafter on 9/10.01.2005 allotment of the flat of Kshetrapal Sharma Respondent No. 5 and nine other were cancelled on the basis of the meeting of the Managing Committee held on 09.01.2005. Petitioner claims that she was inducted as member of the said society on 10.01.2005 and money was returned to Kshetrapal Sharma, Respondent No. 5 on 21.03.2005 and has further stated that said cancellation of the flats was approved by the Assistant Commissioner, Awas/Assistant Registrar, U.P. Awas Evam Vikas Parishad, Lucknow vide letter dated 13.01.2005. Petitioner has stated said flat No. 506 B was allotted to her by Administrator/Committee and further possession of the said flat has also been delivered to her on 16.03.2005 and entire act of the Administrator was approved by the Managing Committee of the Society. Kshetrapal Sharma, Respondent No. 5 in his turn filed Arbitration Case No. 69 of 2006-07 u/s 70 of the U.P. Cooperative Societies Act, 1965. In the said proceedings Petitioner was not impleaded as party and Arbitrator after providing opportunity to Kshetrapal Sharma as well as Society concerned proceeded to pass order holding that cancellation of allotment of Kshetrapal Sharma is void and illegal and further remedial measure be taken vis-a-viz him. Against the said order in question passed by Arbitrator, Appeal No. 161 of 2007 was filed by Jeevan Bima Rashtriya Awas Samiti Ltd. Ghaziabad and therein Petitioner also moved an application for impleadment and said impleadment has been allowed and thereafter Appellate Tribunal heard the matter and dismissed the aforesaid Appeal vide order dated 23.03.2009. At this juncture present writ petition in question has been filed.
3. Counter affidavit has been filed on behalf of Kshetrapal Sharma, Respondent No. 5 and therein it has been stated that Kshetrapal Sharma had become the member of Jeevan Beema Rashtriya Sahkari Avas Samiti Ltd. with membership No. 251 and has been allotted flat No. 506-B in the draw of flats held on 20.06.2004 and further when demand of Rs. 2.42 lacs was made he as well as other allottees agreed to pay the same amount and further on 10.01.2005 Kshetrapal Sharma paid enhanced amount of Rs. 2.42 lacs in the account of Samiti being Cheque No. 150462 drawn by the ICIC Bank Limited. Kshetrapal Sharma has further stated that amount in question was not deposited and arbitrarily flat in question has been sought to be handed over to another incumbent on 24.01.2005. Kshetrapal Sharma stated that once he had fulfilled the term and condition and his claim was already there then no further allotment could have been made in favour of another incumbent. It has further been stated that cause of Petitioner was being espoused by Society concerned and Petitioner has been impleaded and she has been heard, in such a situation and in this background no interference is required.
4. To the said counter affidavit rejoinder affidavit has been filed and therein it has been sought to be contended that Respondent No. 5 has not deposited full cost as per report of Dahaiya Committee, as such rightful action has been taken. Petitioner has justified the action taken by the society.
5. Counter affidavit has been filed on behalf of the society and therein action taken has been sought to be justified.
6. After pleadings inter se parties have been exchanged, present writ petition has been taken up for final hearing and disposal with the consent of the parties.
7. Sri Rajiv Kumar Srivastava, Advocate appearing with Sri Vikas Srivastava Advocate contended that before Arbitrator, Petitioner was not at all arrayed as party as such award being in violation of the principle of natural justice is nullity, in such a situation and in this background award in question as well as order of its affirmance in appeal both are liable to be set aside and coupled with this award in question has been passed on totally incorrect and misconceived grounds as such writ petition in question deserves to be allowed.
8. Countering the said submission Sri Anurag Khanna, appearing with Sri Nipun Singh, Advocate contended that circumstances are speaking for itself as here in the present case in spite of the fact that balance amount was paid on 10.01.2005 quite illegally. Administrator proceeded to enrol the Petitioner as member and by making allotment in his favour on 24.01.2005, in such a situation and in this background this is writ apparent that Kshetrapal Sharma has been metted with arbitrary and discriminatory treatment, as such Arbitrator has not committed any error in passing the award in favour of Respondent No. 5, Kshetrapal Sharma and said award in question has rightly been affirmed in appeal wherein Petitioner was also heard and Petitioner has nothing to say more than what has been stated by Society concerned, in such a situation there is no prejudice caused to the Petitioner on account Petitioner being non-impleaded before Arbitrator and whatever she has to say same has already been expressed by her before the Cooperative Tribunal and even before this Court in writ petition and to the averments mentioned in the counter affidavit vis-a-viz activities of the society her contention is that such matter relates to society as such society may reply the same in better way as such no interference should be made as any interference made would amount to perpetuation of illegality.
9. After respective arguments have been advanced, factual position which is emerging in the present case that there is a registered Housing Society, registered under the provision of U.P. Cooperative Societies Act 1965 with its registered office at C-7 Parivahan Apartment Sector 5 Vasundhra Ghaziabad U.P. Said Society came into existence in the year 1998 with the aim and object to provide land/residential flats to its members on payment of easy instalment on the principle of ''no profit no loss''. Affairs of aforesaid society has to be run and managed as per the provision of U.P. Cooperative Societies Act, 1965, Rules framed thereunder and as per approved bye laws of the society. Record filed by Kshetrapal Sharma reflects that society in question has been established in the year 1998 and at the said point of time Respondent No. 5 Kshetrapal Sharma had already applied for home loan from ICICI Bank Branch Shakarpur Delhi and qua the said home loan, address was described as Jeevan Beema Rashtriya Sahkari Avas Samiti Ltd. C-7 Sector 6 and date of sanctioned of said loan was 22.02.2002. Respondent No. 5, Kshetrapal Sharma had been extended loan facility for purchasing the home by ICICI Bank and instalment period was from 07.02.2005 to 07.08.2015, Kshetrapal Sharma was issued formal letter of membership No. 251 and in the draw of flats which took place on 20.06.2004, Flat No. 506-B was allotted to Kshetrapal Sharma. There is no dispute to this fact that Kshetrapal Sharma has complied with term and condition of the schedule for making payment and dispute arose when on account of report of Dahaiya Committee dated 27.03.2004, Kshetrapal Sharma was required to deposit a sum of Rs. 2.42 lacs. Letters were sent to Kshetrapal Sharma on 05.04.2004 mentioning therein that lot of confusion was prevailing over the matter of costing of flats and to overcome the same, Dy Housing Commissioner formed costing committee and said costing committee has submitted its report and as per the same, cost of Type "B" Flat is Rs. 11.42 lacs. Cost of flat has been finalised, society is sending letter to all members demanding outstanding amount based on cost of flat followed by letter dated 16.04.2004. Vide letter date 01.05.2004, Petitioner was asked to deposit the balance amount, and it was also mentioned therein that in case of non-payment flat category would be changed to lower category and if your deposit is not according to that category also your name shall not be considered for draw of the lots. Draw of flats took place on 20.06.2004 and therein Flat No. 506-B was allotted to Khestra Pal Verma. Thereafter letters have been sent making demand for balance payment on 24.06.2004, 19.07.2004, 06.08.2004, 23.08.2004 and lastly on 03.01.2005, asking to deposit the amount by 08.01.2005 failing which action shall be taken according to Act, Rules and By-laws of the Society. This much has come on record that account payee cheque issued by ICICI Bank payable to Society for sum of Rs. 2,42,000/- and was got prepared as per Kshetrapal Sharma and same was handedover to Secretary of the society but Secretary of the society was interested in handing over the said flat to someone else as such order of cancellation has been passed on the same date and quiet illegally Smt. Neelam Jain, Petitioner was inducted as member on 20.01.2005 and on 24.01.2005 allotment was made in her favour. Kshetrapal Sharma initiated proceedings u/s 70 of the Cooperative Societies Act, 1965 and same has been allowed and appeal preferred against the same has also been dismissed.
10. Here in the present case accepted position is that Smt. Neelam Jain, has not at all been impleaded as party in the original Arbitration proceedings. Against the award passed, Cooperative Society preferred Appeal, and in the appeal filed, she intervened in the matter by filing impleadment application and same was allowed and the Petitioner as well as the concerned society raised all possible objections on merit of award and same has been adverted to, the issue is can even then award in question can be held to be bad for non-impleadment of her?
11. Petitioner has placed heavy reliance on the judgment of Hon''ble Apex Court in the case of A Jithendernath v. Jubilee Hills Coop. House Building Society and Anr. reported in 2006 (10) SCC 96 has taken the view that where flat has been allotted to someone else and said incumbent was not impleaded as party then ex-facie the award being in principle of natural justice would be nullity. In the said case even original suit No. 3702 of 1992 was filed and therein also incumbent was not impleaded as party. Relevant extract of the judgment on which reliance has been placed are paragraph 47, 48, 49, 50, 51 and 52 is being quoted below:
47. Despite knowledge, that plot No. 39 has been allotted to somebody else, the Appellant did not make the said Srinivas a party in his application before the Registrar. Ex facie the award being in violation of the principles of natural justice would be a nullity.
48. We have, furthermore, noticed hereinbefore the prayers made by the Appellant in the said arbitration proceedings. In view of prayer (a) which was the main prayer ex facie the Registrar acted illegally and without jurisdiction in directing the First Respondent to allot plot No. 39. The First Respondent made it clear that the plot in question had been allotted in favour of the said Srinivas. The question as to whether he raised constructions thereupon or not was immaterial. He despite such allotment having been made in his favour was not impleaded as a party. He was a necessary party. No award therefore could have been passed in his absence. In any event, so far as plot No. 39 is concerned, the only prayer made by the Appellant was an order of injunction. The Registrar while exercising his judicial function had no jurisdiction to pass such an order of injunction in view of prayer (a) made in the application.
49. The said award, therefore, was a nullity. In this view of the matter, the principles of res judicata will have no application. [See.
50. Furthermore, the said award was put in execution. The Executing Court in view of title passed in favour of the said Srinivas and consequent acquisition of title by him in terms of the deed of sale executed by him in favour of the Second Respondent herein was entitled to enter into the question as to whether the said award was capable of being executed. As the High Court rightly found that the Second Respondent has acquired a valid title with effect from a date prior to making of the award, the same became inexecutable. If the said award was not capable of being executed, the remedy of the Appellant evidently lies to ventilate his grievance as regards allotment of plot by initiating a different proceeding.
51. It is true that even in the suit filed by the Second Respondent herein against the First Respondent being OS No. 3702 of 1992 the Appellant was not impleaded as a party. The decree passed, therefore, may not be binding on the Appellant. For the self-same reasons we have assigned hereinbefore, the said decree may not operate as a res judicata but we have to consider the matter from a different angle. The Second Respondent did not enforce the decree as against the Appellant herein where as the award, in view of the peculiar facts and circumstances of this case, was required to be enforced by the Executing Court as against the Second Respondent besides the First Respondent herein and in that view of the matter the Second Respondent in law could file an appropriate application not only for his impleadment but also to show that the award is not enforceable in law.
52. The High Court''s judgment, therefore, is unassailable albeit for additional reasons stated hereinbefore.
Reliance has also been placed on the judgment in the case of pofulla Chorome v. Satya Choron reported in 1979 SC 1682 for the preposition that once necessary parties were no impleaded the suit itself has to be held that same was not properly constituted. Reliance has also been placed on the judgment in the case of
12. Counter to the said preposition from the side of contesting Respondent, reliance has been placed on the judgment in the case of
61. The transferees of the school land were not parties and were not heard by the appellate authority but when on being aggrieved by the order of the Appellate Authority, they preferred writ petitions in the High Court, a very detailed hearing with full opportunity to them to prove good faith and payment of adequate consideration for the transfers made in their favour was granted to them by the High Court. All necessary information showing the background of the sales and their claims of bona fides, as furnished both by the transferor and transferees have been fully gone into by the High Court and a definite finding has been reached that the transfers lacked in good faith and were obviously effected to evade ceiling law. All possible pleas available to the transferees, were projected before the High Court in the writ petition preferred by the transferees. Thus, all available material facts and evidence were placed and considered by the High Court. The High Court has in great detail critically examined all the relevant evidence produced by the transferees before arriving at an adverse conclusion against them. This Court would have been inclined and justified in making a remand of the case to the Appellate Authority to make all transferees as parties and give them another opportunity of hearing in respect of the portions of land purchased by them from out of 250 acres of land held in the name of the school. Since, however, the High Court has already given full opportunity of hearing to the transferees on this aspect we refrain from making any order of remand just for the sake of completing a formality of granting them similar opportunity of hearing by the Appellate Authority with no likelihood of any conclusion different from the one reached by the High Court and this Court on merits of the case.
63. Similarly in the instant case, it has been found that large scale transfers were effected to defeat Ceiling Law. We, therefore, decline to upset the concurrent findings of the Appellate Authority and the High Court in our discretionary powers under Article 136 of the Constitution. We have also come to the same conclusion that the transfers made after the cut-off date were not in good faith hence liable to be ignored for determining the extent of surplus land with the holder. That apart we have also recorded a conclusion that the entire land being held under a Govt. Grant the lands were not transferable without permission of the government and the transfers were invalid being in clear breach of the conditions of the Grant.
13. On the parameter as set out, facts of the present case are being looked into. In the present case on 09.01.2005 allotment of Kshetrapal Sharma has been sought to be cancelled and communication has been sought to be given on 10.01.2005 whereas the very next day i.e. 10.01.2005 account payee cheque issued from ICICI Bank sanctioned from loan deportment of the Bank was handed over to the Secretary of the society in lieu of the balance amount. Most surprisingly said amount in question was not accepted and thereafter Administrator proceeded to enroll Neelam Jain, Petitioner as member of the society and on 24.01.2005 flat 506-B allotted to Respondent No. 5 Kshetrapal Sharma was allotted to her and possession of the same was also delivered on 16.03.2005. Question before the Arbitrator was as to whether proceedings so undertaken were free, fair and transparent. Arbitrator in the present case has examined the record and found that entire proceedings were motivated one inasmuch as Kshetrapal Sharma has given cheque of balance amount but in stead of proceeding to accept the said amount quite illegally membership of Petitioner has been accepted and on 24.01.2005 and allotment was made. Series of events clearly demonstrated, that Administrator of the society who had no authority to enrol member of the society, not only transgressed and over stepped his jurisdiction but also proceeded to pass order of allotment in favour of Smt. Neelam Jain ignoring claim of Khestra Pal Sharma. Once balance amount had been paid to the society concerned by way of account payee cheque issued from ICIC Bank New Delhi then there was no occasion or justification for fresh allotment in favour of Smt. Neelam Jain, in such a situation and in this background opinion formed by Arbitrator as affirmed in Appeal cannot be faulted.
14. Distinguishing feature vis-a-viz the case of A Jithendernath (supra) is that in the present case though before Arbitrator Smt. Neelam Jain, Petitioner was not party, the facts of case clearly reflect that her case was being espoused by the society. Precise question was put as to what more could have been said before the Arbitrator, than what has been said by the Society, justifying cancellation and subsequent allotment. There is no reply to the said specific query. Smt. Neelam Jain, was well aware of passing of the award and award was challenged by the Cooperative Society by preferring Appeal before the Co-operative Tribunal concerned and in the said proceeding Neelam Jain intervened and became party after impleadment application was allowed and her contention and contention of the society concerned has been virtually one and the same and the Appellate Tribunal has considered the matter including arguments advanced on behalf of Petitioner as well as the Society concerned and found that she was beneficiary of illegal act of Administrator. Smt. Neelam Jain has failed to substantiate before this Court as to in what way and manner her case has been prejudiced and what more she would have submitted before Arbitrator once matter is remanded back as entire emphasis is on remand. Not only this in the rejoinder affidavit so filed on her behalf vis-a-viz averments mentioned qua the validity of the proceedings in the counter affidavit filed by Respondent No. 5, there is no reply submitted by her in the rejoinder affidavit and she has proceeded to mention that adequate reply has been submitted by the Society. Petitioner at all point of time has placed reliance on statement of society vis-a-viz cancellation. Her defence is based on the contention submitted by the society and here society has been totally exposed and conduct of society has not been found to be fair and above board while dealing with Khetra Pal Sharma. Once this is the factual situation and in the appeal Petitioner got herself impleaded as party and her version has also been considered and adverted to and then award in question has been affirmed in appeal then as on date complaint made by the Petitioner that on account of her non-impleadment award is nullity cannot be accepted in the facts and circumstances of the case. Rules of natural justice are to be followed for doing substantial justice. Petitioner has been given full opportunity in Appeal as well as before this Court, and Petitioner has failed to demonstrate as to why in such hot haste action has been taken by Administrator ignoring the balance of amount offered by Respondent No. 5. Not only this in the present case most surprising feature of the case is that the Managing Committee of the Society has preferred writ petition before this Court against this very award and the Appellate order and thereafter said writ petition was got dismissed as not pressed. Once this is the factual scenario that whatever right has been claimed by the Petitioner are through the society and the society has acquiesced to the order passed by the Arbitrator and Appellate Tribunal and Petitioners has failed to show and demonstrate that she has to say something more, in such a situation and in this background no interference is warranted with the orders impugned as any interference with the order impugned would amount to subscribing of an illegal action and helping the beneficiaries of illegal action. This is also one of the well settled principles of dispensation of justice. There is no question of any benevolence to contesting Respondent, the action against him has been found to be unfair/unreasonable and the Petitioner is beneficiary of said act on account of contesting Respondent not being there.
15. Consequently, in the facts of case, writ petition has no substance and devoid of merit and is accordingly dismissed.
