Supreme Court Upholds Expulsion Of Member From Housing Society For Default In Payment Of Dues

The Supreme Court has dismissed a plea challenging expulsion of the late husband of the appellant from a housing society for making default in payment of dues of the society.

A bench of Justice Rajesh Bindal and Justice Aravind Kumar upheld the decision of the High Court and dismissed the Special Leave Petition filed before it saying that a dispute was raised regarding the “cost of construction” and default in payment of the amount due to the society goes “unrebutted”.

The appellant approached Apex Court against the Division Bench of Delhi High Court’s decision dismissing the writ petition challenging the order passed by the Financial Commissioner passed in 1994.

The High Court upheld the order passed by the Joint Registrar (II), Cooperative Societies, Delhi whereby the membership of the late husband of appellant no.1 was expelled.

The expulsion was on account of non-payment of dues of ₹1,72,990/- for the construction of flats and allotment thereof by the Nav Jagriti Cooperative Group Housing Society Limited. It was argued on behalf of the appellant that the amount shown was not due and proper as there was some enhancement of the cost of the flats. The late husband of the appellant no.1 never refused to pay the said amount due.

Also, the appellants submitted that the procedure prescribed in Rule 36 of the Delhi Cooperative Society Rules, 1973 for cancellation of membership of the society was not followed.

On the other hand, the respondents submitted that there are concurrent findings of facts recorded by all the authorities under the Act and no interference is called for in the present appeal.

It was said that an offer was made to the late husband of appellant no.1 at the appellate stage for payment of the balance dues so that issue could be resolved but the same was not availed. Also, the society in its meeting added a new member against the vacancy, and at present, it is not possible to offer any flat to the appellants as 40 flats were constructed against which 40 members already exist on roll.

The Supreme Court noted that society had issued notice to the late husband of appellant no.1 for expulsion of his membership on account of default in payment of dues of the society. Thereafter, a resolution was passed in the aforesaid meeting expelling the membership of the late husband of the appellant, on account of default in payment.

The Joint Registrar (II), Cooperative Societies, Delhi, vide his order granted time to the expelled members to deposit dues and in default the resolution of the society was approved.

The appeal preferred by the late husband of appellant no.1 under Section 76 of the Delhi Cooperative Societies Act, 1972 challenging the above order was dismissed by the Financial Commissioner, Delhi.

The Financial Commissioner, Delhi specifically recorded that a balance of more than ₹ 2,00,000/- was due from the late husband of appellant no.1.

“The amount was being disputed by him claiming that the cost of construction has not been properly calculated. The offer was given to him to pay the dues with interest within certain reasonable period, however, he did not avail the same,” observed the Supreme Court.

Against the order passed by the Financial Commissioner, a writ petition was filed before the High Court of Delhi and at the time of issuance of notice, the High Court recorded the statement of late husband of the appellant no.1 that he is ready and willing to deposit the entire amount along with interest. However, no deposit was made by him.

The Court was not impressed with the argument that there is violation of Rule 36(2) of the Delhi Cooperative Society Rules, 1973 and the prescribed procedure for expulsion of a society member has not been followed, which was never raised before any of the authorities including the High Court. “Procedural law is subservient to justice,” said the Court.

“In the case in hand the only issue is regarding default of payment of dues of the society for construction of flats, which the late husband of appellant no.1 was not ready and willing to pay at any stage, despite opportunities given. Firstly by the Society, secondly by the Joint Registrar (II), Cooperative Societies, Delhi and thereafter by the Financial Commissioner, Delhi. Even before the High Court, at the time of issuance of notice, the statement of late husband of appellant no.1 was that he is ready and willing to deposit the amount due with interest but still nothing was paid”, observed the Supreme Court.

The Court dismissed the appeal holding that the late husband of appellant was raising a dispute regarding cost of construction and the default in payment of amount to the society goes unrebutted, on basis of which his membership was expelled.

Cause Title- Geeta & Ors. v. Financial Commissioner Govt. of NCT Delhi & Ors.

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