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Karnataka State Judicial Department Employees House Building Co-Operative Society (R), Now Represented by its President K. Sippa Gowda v/s G.P. Shivaprakash & Others

    Review Petition No. 301 of 2016 in Writ Petition No. 7105 of 2007 (GM-KSR-PIL)

    Decided On, 28 February 2017

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE JAYANT PATEL & THE HONOURABLE MR. JUSTICE N.K. SUDHINDRARAO

    For the Petitioner: Farah Fathima, Anil Kumar, Latha S. Shetty, Advocates. For the Respondents: R2 to R5, Dhyan Chinnappa, Senior Counsel for K. Arun Kumar, Adv., For Crest Law Partners, R9, B.V. Vidyulatha, Advocate, R10 & R11, R. Devdas, Principal Govt. Adv.



Judgment Text

(Prayer: This Review Petition is filed under Order 47 Rule 1 of CPC, praying to review the order Dated: 03/06/2016 passed in WP No.7105/2007(GM-KSR-PIL), on the file of the Hon'ble High Court of Karnataka, Bengaluru.)

Jayant Patel, J.

1. The present review petition is directed for review of the order dated 03.06.2016 passed by this Court in W.P.No.7105/2007.

2. We have heard Ms.Farah Fathima, learned counsel with Mr.Anil Kumar for petitioner. We have also heard Mr.Dyan Chinnappa, learned Senior Counsel appearing along with Mr.Arun Kumar K., for respondents 2 to 5 herein. Respondents 1, 6, 7 and 8 are served, but none appears. However Mr.R.Devdas, learned Principal Government Advocate appears for respondents 10 and 11 -State authorities and Ms.B.V.Vidyulatha, learned counsel appears for respondent 9.

3. We may broadly state that the original petitioners had approached this court in Public Interest Litigation (PIL) jurisdiction contending interalia tha

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t there was wrongful admission of the members in Karnataka State Judicial Department Employees House Building Co-operative Society (hereinafter referred to as `the Society') and also wrongful allotment of sites by the Society to the respective members and therefore prayers were made for independent investigation and to declare induction of certain members as illegal; to cancel the membership granted; to cancel the allotment of sites; and other related prayers were also made. This Court ultimately at paragraph 44 issued directions (a) to (j) which reads as under:

(a) names, addresses, identity, avocation, place of residence, relationship with the Directors past and present of the Society, the position held or retired in the High Court or the Courts under the jurisdiction of the High Court, of all members, associate members, and nominal members, to ascertain whether they would fall within the qualification prescribed by the bye-laws;

(b) the members, associate members and nominal members or their family own any site/house/flat/apartment within the jurisdiction of the BDA and affidavits filed in that regard as required by the bye-laws;

(c) members, associate members and nominal members/directors/family members of members, associate members and nominal members/directors/others are allotted more than one site, the procedure followed for such allotment, so as to fix the responsibility;

(d) Directors present and past, responsible for allotment of sites to land losers viz., J.Krishnappa, family of late Subbaiah and Papaiah and Muniswamappa despite their receiving the compensation;

(e) In the event of recording findings that the induction of members, associate members or nominal members are in violation of the Bye-laws, Annexures-B and C to take steps to cancel the membership, in accordance with law;

(f) In the event of recording findings that the members, associate members or nominal members were not entitled to allotment of sites in the layout formed by the Society for lack of requisite qualification, under the Bye-Laws, to cancel the allotment and take steps to recover possession of the sites;

(g) In the event the members, associate members or nominal members voluntarily surrender the sites allotted, the Society is directed to refund the amount paid with interest at 6% p.a. from the date of receipt of the payment upto the date of payment;

(h) Issue necessary directions to the Society to comply with the proviso to Section 18 of the `KCS Act' within the statutory time fixed;

(i) On taking possession of the sites, pursuant to cancellation of allotment or voluntarily surrender sites allotted, the Society is directed to allot the sites to its members, in accordance with the Bye- laws and based upon the seniority of the member in the Society including to those who have lost the sites on account of reservation of some sites for civic amenities, open spaces as directed in the order dated 01.06.2016 in W.P.No.40994/2002; and

(j) In the event allottees disentitled to allotment of sites by the Society have created third party interest, it is for the Society to take action in accordance with law.

4. We may, at the outset, record that when this Court considered the matter for admission on 05.01.2017 following order was passed:

We have heard Mr.H.Subramanya Jois, learned Sr.Counsel for Ms.Latha S.Shetty for petitioner in RP 301/2016 and Sri Samuel S.Dandin, learned counsel for the petitioner in RP 307/2016 and Sri Dhyan Chinnappa, learned Sr.Counsel for Crest Law Partners for R2 to 5, Smt.B.V.Vidyulatha and Sri Shivaraja H.P., learned counsel for R-9.

This Court on 15.7.2016 had passed the following order:

"We have heard Sri Subramanya Jois, learned Sr.Counsel appearing with Sri S.Anil Kumar with Smt.Latha Shetty and Sri Vasanth V.Fernades, HCGP for R10 and R11 upon the advance copy.

Prima facie, three aspects may deserve consideration; one is, even if any person was not eligible to become member who has been admitted by the Society as member and the rights are altered in as much as, the money has parted with & in exchange thereof the site is given and thereafter, if the construction is made and at the later stage, the cancellation is to follow, what will be the consequential aspects to the investment made with reasonable interest?.

Second is, whether such a roaming enquiry could be ordered without hearing all the members of the Society who are allegedly made as members and who have altered their position. The third aspect is that, what will be the situation if any subsequent purchaser or transferee of the property in bona fide acted and has altered his position by investment of money or otherwise.

The additional aspect is that, when person is admitted as member in a Co-operative Society, bye-law may provide eligibility. The Managing Committee or a superior body including general body of the Society has power and authority to examine the eligibility including the relaxation if any. Further, whether any expulsion is permissible who has already admitted as member in absence of any misrepresentation or fraud played by him etc.. are broadly the aspects which may also deserve consideration.

Hence, issue notice to respondents returnable on 7th September 2016.

By ad interim order, the operation and implementation of the order dated 3rd June 2016 shall remain stayed.

I.A.I/16 disposed of accordingly."

Apart from the above, it has been brought to our notice that the matter may also required to be examined in the light of the observations made by the High Court of Gujarat wherein one of us (Jayant Patel, J.,) was a member in its decision in case of Shantiniketan Co-op. Housing Society Ltd., vs. District Registrar, Co- operative Societies, Ahmedabad and others reported in AIR 2002 GUJ.428 as well as in case of Dipakbhai Prahladbhai Patel vs. State of Gujarat reported in 2015 SCC OnLine Guj 5313.

Hence, Rule.

The interim order granted earlier on 15.7.2016 in RP 301/2016 shall continue as the interim relief.

5. Today we have once again heard learned counsel appearing for the respective parties as referred to herein above.

6. The following aspects have not been considered by this Court when the order dated 03.06.2016 passed in the main writ petition.

(i) Even if a person was not eligible to become member but has been admitted as a member by the society, upon the satisfaction arrived at on the aspect of eligibility and thereafter the rights of the parties are altered inasmuch as the money has been parted with and in exchange thereof the site is given and thereafter the construction is made, what will be the consequential aspect of the investment made with reasonable interest more particularly when the member as well as society both acted under the mistaken belief that the member was eligible to be admitted and was also eligible for allotment of the site. Aforesaid aspect also requires to be considered keeping in view the provisions of Section 51 of the Transfer of Property Act.

(ii) What will be the situation if the subsequent purchaser of the property has acted in bonafide and has altered his position by investment of the money or otherwise?

(iii) Whether the expulsion or cancellation of the membership and/or the cancellation of the decision for allotment of the site can be made and if yes, whether there is any statutory provision under the Karnataka Co-operative Societies Act, 1959 read with the Rules?

(iv) Whether expulsion as member or cancellation of the site can be made in absence of any express provision for expulsion of any person who is already admitted as member or not?

7. Incidentally, the matter may also be required to be examined in light of the observations made by High Court of Gujarat wherein one of us (Jayant Patel J was a member) in its decision in case of Shantiniketan Co-op.

Housing Society Ltd., Vs. District Registrar, Co-operative Societies, Ahmedabad and others reported at AIR 2002 Guj 428 as well as in case of Dipakbhai Prahladbhai Patel Vs. State of Gujarat & Others reported in 2015 SCC Online Guj 5313.

8. In our considered view the aforesaid aspects will go to the root of the matter. As in any case, the aforesaid aspects are not considered, keeping rights and contentions of both the sides open, we find that the earlier order dated 03.06.2016 deserves to be reviewed and the main writ petition being W.P.No.7105/2007 deserves to be heard afresh on merits in accordance with law.

9. Hence the following :

ORDER

1. The earlier order dated 03.06.2016 passed in W.P.No.7105/2007 is reviewed and recalled.

2. Resultantly, main W.P.No.7105/2007 shall stand restored.

3. Let the writ petition be placed by the office before the appropriate Bench as per roster.

Petition disposed off accordingly.
O R