1

Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9671   OF 2010 [Arising out of SLP (C) No. 26547 of 2008]

ISHWAR NAGAR CO-OP.  HOUSING BUILDING SOCIETY ….Appellant

Versus

PARMA NAND SHARMA AND ORS ...Respondents

JUDGMENT

Dr. MUKUNDAKAM SHARMA, J.

1. Leave granted.

2. This  Appeal  is  directed  against  the  judgment  and  order  

dated 28/03/2008 in W.P. No. 474/1982 of the High Court  

of Delhi wherein the High Court allowed the writ petition  

1

2

filed by the respondent-1 and whereby resolution and order  

dated 14th January, 1978 passed by the appellant and the  

order of the Registrar, Cooperative Societies dated 17th May,  

1978  and  the  order  of  the  Deputy  Registrar  dated  5th  

November, 1981 whereby the name of the respondent-1 had  

been removed from the list  of  members of  the appellant-

society were quashed and set aside.

3. The respondent-1, Dr. Parmanand Sharma was enrolled as  

a member of the appellant society vide membership No. 35  

on  11th March  1961.  In  1968,  he  purchased  a  property  

bearing No. A-19/A, Kailash Colony, New Delhi in the name  

of his Hindu Undivided Family consisting of respondent-1,  

his wife and two minor children in 1968 and a structure  

was  constructed  thereon  in  1969.  According  to  the  

appellant-society,  this  construction  is  a  residence-cum-

nursing home, whereas respondent-1 claims it to be only a  

nursing home, to which question we will refer later. In this  

chain of events, the membership of the respondent-1 was  

2

3

terminated from the appellant society on the ground that  

the  respondent-1  owned  another  property,  i.e.,  19/A,  

Kailash Colony, in Delhi, since as per rule 25 (1)(c) of the  

Delhi Cooperative Societies Rules, 1973 (hereinafter referred  

to  as  “the  Rules”  ),  upon  owning  another  property,  the  

appellant was not entitled to be member of a Cooperative  

Housing  Society.  The  respondent-1  was  also  expelled  on  

14th January 1978 from the society under section 36(1) of  

the  Delhi  Cooperative  Societies  Act,  1972  (hereinafter  

referred  to  as  “the  Act”)  for  being  a  persistent  defaulter,  

since he had not paid the dues demanded by the society.  

The  action of  the  society  expelling  the  respondent-1  was  

approved  by  the  Registrar,  Cooperative  Societies  on  17th  

May 1978. On 26th February 1980, an application was filed  

by respondent-1 under Section 60 of the Act for reference of  

dispute to arbitration. The reference was dismissed on 5th  

November,  1980.  Being  aggrieved,  the  respondent  filed  a  

writ petition before the High Court, wherein the High Court  

by the  impugned judgment  and order  dated 28/03/2008  

3

4

held that 19/A, Kailash Colony, Delhi was being used for  

running a nursing home, i.e., for a commercial purpose and  

therefore, that would not constitute a violation of Rule 25 of  

the Rules. By the said order, the HC set aside the expulsion  

orders.

4. The present appeal is directed against the above impugned  

judgment and order of  the High Court  by way of  Special  

Leave Petition on which we heard the counsel appearing for  

the parties at length. The learned counsel for the appellant  

contended that on the ground floor of the said property, the  

respondent-1  is  running  a  nursing  home and that  he  is  

residing  on  the  first  floor.  In  that  view,  the  appellant  

contended that the property was being used for residential  

purposes. Counsel for the appellant also submitted that the  

respondent-1 in his various correspondences, pleadings and  

affidavits has shown the property as his address which is  

conclusive  proof  that  he  is  residing in  the  said property.  

Moreover,  it  was  also  contended  that  respondent-1  had  

4

5

been unable to disclose where he was alternatively residing  

and no documents  had been furnished to  show that  the  

said  property  was  being  used  exclusively  and  solely  for  

commercial purpose. In this regard, it was submitted that  

the user of the said property being a resident therein, this  

not only violates Rule 25 of the Rules, but also is contrary  

to the bye laws of the society and the terms of perpetual  

lease  agreement  entered  between  Govt.  of  India  and  the  

appellant society, in pursuance of which the respondent-1  

would be entitled as being member of the appellant-society.  

On the other hand, the learned counsel for the respondent-

1 refuted the claims made by the appellant contending that  

the said property was used solely for a nursing home, and  

since respondent-1 remained in the nursing home for most  

of  the  time  as  a  doctor,  therefore  it  was  solely  for  

convenience’s  sake  that  he  used  the  address  to  further  

correspondence. This aspect, it was submitted, would not  

render the property residential in any way. Further, counsel  

for  respondent-1  contended  that  the  said  property  was  

5

6

purchased in the name of the HUF, and not in respondent-

1’s name, and therefore the latter cannot be expelled from  

the membership of the appellant-society. He also submitted  

that  the  respondent-1  cannot  be  expelled  because  of  

purchase  of  the  said  property  was  facilitated  before  the  

Rules came into force in exercise of power granted under  

the  Delhi  Cooperative  Societies  Act,  1972.  It  was  further  

contended that at the time of acquisition of membership of  

the said society, the appellant’s society was governed by the  

Bombay  Cooperative  Societies  Act,  1925,  which  doesn’t  

have any provision disqualifying a member of a cooperative  

society on acquisition of another property in Delhi. Rule 25  

has no retrospective application; therefore it was submitted  

that expulsion of the respondent-1 is non est in law.

5. After hearing the parties in detail the questions which arise  

in this appeal are: -

I. Whether  Rule  25  of  the  Rules  has  a  retrospective  application in debarring a member of  a  co-operative  society who enrolled as a member of the society and  

6

7

acquired separate property before the Rules came into  force?

II. Whether  bye  laws  of  the  society  can  debar  the  respondent-1  on  acquisition  of  a  separate  residential/dwelling house in Delhi?

III. Whether  the  property  purchased  in  the  name  of  HUF  can  debar  the  respondent-1  to  continue  as  a  member of the appellant-society?

IV. Whether  the  nature  of  the  property  purchased  is  residential or commercial?

Issue I

6. As far as applicability of Rule 25 of the Rules is concerned,  

the  learned counsel  for  the  appellant  contended that  the  

provisions  contained in  Rule  25 are  applicable  to  all  the  

members of the society, whether enrolled before or after the  

enactment of the Delhi Co-operative Societies Rules, 1973  

and in view of the said rule, the respondent-1 was ineligible  

to  continue  to  be  a  member  of  the  society  and  his  

membership was correctly  terminated  in  accordance  with  

law. In contrast, the learned counsel for the respondent-1  

contended that  at  the  time of  enrolment  of  respondent-1  

7

8

and  subsequent  to  purchasing  of  the  property,  the  co-

operative societies in Delhi were governed by the Bombay  

Co-operative Societies Act, 1925 as extended to Delhi Co-

operative Societies Rules, 1950. There was no prohibition  

whatsoever  at  the  relevant  time for  a  person who was a  

member  of  the  co-operative  society  from purchasing  any  

property.  Subsequently,  on  24.4.1973,  the  Delhi  Co-

operative  Societies  Act  and  Delhi  Co-operative  Societies  

Rules,  1973 came into force  and the earlier  Act  and the  

1950  Rules  stood  repealed.  The  1973  rules  prescribed  

eligibility criteria for admission under the said Rule 25 and  

the eligibility criteria for admission are not same as required  

for continuation. Moreover, it was contended that Rule 25  

has no retrospective application.

7. Rule 25 reads as follows: -

“Disqualification for Membership- (1) No person shall   be  eligible  for  admission  as  a  member  of  a  co- operative society if he – (a) has applied to adjudicated an insolvent or is an  undischarged insolvent; or

8

9

(b) has been sentenced for any offence other than an  offence not involving moral turpitude and dishonesty  and a period of five years has not elapsed from the  date  of  expiry  of  the  sentence: (c) in the case of membership of a housing society:- (i) owns a residential house or a plot of land for the   construction  of  a  residential  house  in  any  of  the  approved or un-approved colonies or other localities  in the National Capital Territory of Delhi, in his own  name  or  in  the  name  of  his  spouse  or  any  of  his   dependent children, on lease hold or free-hold basis   or  on  power  of  attorney  or  on  agreement  for  sale;

Provided that disqualification of membership as laid  down  in  sub-rule  (l)(c)(i)  shall  not  be  applicable  in  case of  co-sharers of  property  whose share  is less  than  66.72  sq.  metres  of  land; Provided further that  the said  disqualification shall   not  be  applicable  in  case  of  a  person  who  has  acquired  property  on power  of  attorney  or  through  agreement for sale and on conversion of the property  from  leasehold  to  freehold  on  execution  of   conveyance deed for it, if such person applies for the  membership  of  the  housing  society  concerned;   (Amended on 6.8.97)

(ii)  he  deals  in  purchase  or  sale  of  immovable   properties  either  as  principal  or  as  agent  in  the   national  Capital  Territory  of  Delhi:  or (iii) he or his spouse or any of his dependent children  is  a  member  of  any  other  housing  society  except   otherwise permitted by the Registrar.

2. Notwithstanding anything contained in the rules  or  the  bye-laws  of  the  co-operative  society,  if  a   member becomes, or has already become, subject to  

9

10

any disqualification specified in sub-rule (1), he shall  be deemed to have ceased to be a member from the  date when the disqualifications were incurred.

3. A member who ceases to  be a member of a co- operative  society  under  sub-rule  (2),  shall  not  be  entitled  to  exercise  rights  of  memberships  or  incur  liability as member with effect from the date referred  to in sub-rule (2) but as from the date he becomes a  creditor  of the co-operative society in respect of the   amount  due  to  him  on  account  of  paid  up  share  capital,  deposit, cost of land deposited or any other  amount paid by him to the co-operative society as its   member.  As  from the  date  of  his  ceasing  to  be  a   member or the society under sub-rule (2), the amount   standing to his credit shall be paid to him by the co- operative society within 3 months and when the co- operative  society  is  already  under  liquidation,  the   amount due to him will be credited as a debt due to a  third party from the co-operative society.  

4.  If  any  question  as  to  whether  a  member  has  incurred any of the disqualification referred to in sub- rule (1) arises, it shall be referred to the Registrar for  decision. His decision shall be final and binding on  all concerned. The power of the Registrar under this   rule  shall  not  be  delegated  to  any  other  person  appointed to assist the Registrar.”

8. A perusal to Rule 25(2) makes it clear that after the said  

Rules  came  into  force,  if  a  member  has  already  become  

subject to any disqualification specified in sub rule (1), he  

would be deemed to have ceased to be a member from the  

10

11

date when the disqualification was incurred. In the present  

case, the rule which is to be considered is Rule 25(1)(c)(i).  

The said Rule also stipulates that no person shall be eligible  

for admission as a member of the co-operative society, if he  

owns  a  residential  house  or  a  plot  of  land  for  the  

construction of  a  residential  house in any of  Territory  of  

Delhi, in his own name or in the name of his spouse or any  

of his dependent children, on lease-hold or free-hold basis.  

The learned counsel  for  the respondent-1 contended that  

since the said rule does not come within the ambit of power  

given under Section 97(2) of the Act to the Lt. Governor who  

is  empowered  to  make  rules  about  the  conditions  to  be  

complied  with  by  persons  applying  for  admission  or  

admitted as members, the same cannot be applied to the  

person who have  already become a member to disqualify  

him for the act done prior to coming into force of the Rules.  

Further it was also contended that the said power is limited  

by section 98 of the Act which repeals the earlier Act and  

saves the right, privileges or obligations accrued or incurred  

11

12

under the earlier Act repealed.  

9. The first consideration in this regard is whether Section 97  

of  the  Act  permits  the  Lt.  Governor  to  make  the  above  

disputed provision of rule 25. Section 97 of the Act reads as  

follows:

“97 (1) The Lieutenant Governor may,  for any  co-operative  society  or  class  of  co-operative   societies, make rules to carry out the purposes  of this Act.

(2)  In  particular,  and without  prejudice  to  the  generally  of  the  foregoing  power,  such  rules  may  provide  for all  or  any  following  matters,   namely…  -   ….(v)The  conditions  to  be  complied  with  by  persons applying for admission or admitted as  members,  for  the  election  admission  of   members, and for the payment to be made and  the interest to be acquired before the exercise of   the right of membership.”

10. A perusal of the aforementioned provision indicates that the  

power to frame rules is given by S. 97(1) to the Lt. Governor  

to make rules to carry out the purposes of this Act and the  

list  of  subjects  mentioned  in  sub  rule  (2)  is  merely  

illustrative as is clear when it says that “In particular, and  

without  prejudice  to  the  generally  of  the  foregoing  power,   

12

13

such  rules  may  provide  for  all  or  any  matters  contained   

therein”. It is well-settled that the specific provisions as are  

contained  in  several  clause  of  sub-section  (2)  of  97  are  

merely restrictive and they cannot be read as restrictive of  

the generality of powers prescribed by sub section (1) of S.  

97.  The  particular  matters  given  in  sub  section  (2)  only  

illustrate and do not exhaust all the powers conferred. In  

that connection reference may be made to two analogous  

cases. First to that of Afzal Ullah v. State of Uttar Pradesh  

reported  at  AIR  1964  SC  264  wherein  principles  for  

interpreting a provision similar in objective (of the  United  

Provinces  Municipalities  Act,  1916) were laid  down.  This  

Court in the said case, held:

“13. ……..It is now well-settled that the specific   provisions such as are contained in the several  clauses of Section 298(2) are merely illustrative   and  they  cannot  be read as  restrictive  of  the  generality  of  powers  prescribed  by  Section  298(1). If the powers specified by Section 298(1)  are  very  wide  and  they  take  in  within  their   scope Bye-laws like the ones with which we are  concerned in the  present appeal,  it  cannot be  said that the powers enumerated under Section  298(2)  control  the  general  words  used  by  

13

14

Section  298(1).  These  latter  clauses  merely   illustrate  and  do  not  exhaust  all  the  powers  conferred on the Board, so that any cases not  falling within  the  powers  specified  by Section  298(2) may well be protected by Section 298(1),   provided, of course, the impugned Bye-law can  be justified by-reference to the requirements of  Section 298(1).”

This  rule  of  interpretation  was  again  reiterated  in Rohtak  

Hissar  District  Electricity  Supply  Co.  Ltd.  Vs.  State  of  

Utter Pradesh and Ors. reported at AIR 1966 SC 1471:

“18.……… Section 15(1) confers wide  powers  on the appropriate Government to make rules  to  carry  out  the  purposes  of  the  Act;  and  s. 15(2) specifies  some  of  the  matters  enumerated by clauses (a) to (e), in respect of  which rules may be framed. It  is well-settled   that the enumeration of the particular matters   by sub-s. (2) will not control or limit the width   of  the  power  conferred  on  the  appropriate   Government by sub-s. (1) of s. 15; and so, if it   appears  that  the  item  added  by  the  appropriate  Government  has  relation  to  conditions of employment, its addition cannot  be  challenged  as  being  invalid  in  law.   Whether or not such addition should be made,   is a matter for the appropriate Government to   decide in its discretion. The reasonableness of   such addition cannot be questioned, because  the power to decide which additions should be  made has been left by the Legislature to the  appropriate Government.”

14

15

11. In view  of the above position, it may be deduced that the  

power to frame rules given under s. 97(1) of the Act is not  

controlled by the list mentioned in sub section (2) and the  

Lt. Governor can make rules for any of the purposes of the  

Act. A co-operative society may be defined as a voluntary  

association  of  individuals  combined  to  achieve  an  

improvement  in  their  social  and  economic  conditions  

through  the  common  ownership  and  democratic  

management  of  the  instruments  of  wealth.  (Vide  Row’s  

Encyclopedia  of  Co-operative  Societies  Law  in  India,  

Vol.  2,  page  1)  Experience  has  shown  that  voluntary  

organizations like cooperative societies are the best system  

which can suit the needs of poor and weaker sections. The  

object of a co-operative society is not to earn profits but to  

enable the members to improve their economic conditions  

by  helping  them in their  pursuits.  Thus,  the  cooperative  

societies like the present one which seek to obtain the land  

at  concessional  rate  from  the  government  and  to  build  

houses  must  necessarily  have  a  limitation  in  that  only  

15

16

members  who  are  in  real  need  of  houses  should  be  

permitted to become members and to  take  the  benefit  of  

land  allotment.  In  the  garb  of  a  cooperative  society,  a  

person cannot be permitted to avoid the stress of market  

prices  and  take  a  concessional  advantage  in  obtaining  a  

plot. Thus Rule 25(2) does not in any manner go beyond the  

ambit of rule making authority given under Section 97(1) of  

the Act.  

12. The learned counsel for the respondent-1 further contended  

that the Rule 25 is not applicable to the respondent-1’s case  

as  the  said  rule  is  not  retrospective  and  the  alleged  

‘disqualification’  of  purchasing  the  said  property  had  

incurred prior to the adoption of the Rules. We are of the  

considered  opinion  that  the  aforesaid  contention  of  the  

learned  counsel  for  the  respondent-1  is  misconceived.  

Merely because a person who had become a member of the  

society  at  a  point  of  time  when  the  disqualification  

mentioned in Rule 25 was not in existence and because of  

16

17

the said rule would now cease to be a member of the society  

does  not  necessarily  mean  that  the  said  rule  is  

retrospective. “A statute is not properly called a retrospective  

statute  because  a  part  of  the  requisites  for  its  action  is   

drawn from a time precedent to its passing”. (See Craise on  

Statute Law. 17th edition page 386). Reference may also  

be  made  to  Queen  v.  Vina reported  at (1875)  10  Q.B  

195 wherein  the  Statute  enacted  that  every  person  

convicted of felony shall be for ever disqualified from selling  

spirits by retail. It was held that the disqualification applied  

to every convicted felon irrespective of whether he was so  

convicted prior to or after the Act came into operation.

13. A  reference  may  also  be  made  to  Re:  Solicitors  Clerk  

reported at (1957) 3 AH. E.R. 617, wherein the  bone of  

contention  revolved  around  that  Solicitor's  Act  of  1956  

which provided that no solicitor should employ any person  

who is convicted of larceny without the permission of the  

Law Society. The clerk in that case was convicted of larceny  

17

18

in 1953, while the ban was imposed in 1956. It was urged  

that the provisions of the 1956 Act cannot be applied to him  

because  he  was  convicted  before  that  Act  came  into  

operation.  “To  do  otherwise,  it  was  argued,  would  be  to  

make  its  operation  retrospective.  In  rejecting  this  

contention, Lord Goddard, C.J. observed:  

“In my opinion, this Act is not in truth retrospective. It   enables an order to be made disqualifying a person  from acting  as  a solicitor's  clerk  in  the  future and  what happened in the past as the cause or reason  for the  making  of  the  order;  but  the  order  has  no   retrospective  effect. It  would be retrospective  if  the  Act provided that anything done before the Act came  into force or before the order was  made should be  void  or  voidable,  or  if  a  penalty  were  inflicted  for  having acted in this or any other capacity before the  Act came into  force or before the order was  made.  This  Act  simply  enables  a  disqualification  to  be  imposed  for  the  future  which  in  no  way  affects  anything  done  by  the  appellant  in  the  past.   Accordingly, in our opinion the disciplinary committee   had jurisdiction to make the order complained of”

14.  Same principle  was  applied in  State of Maharashtra v.  

Vishnu Ramachandra reported at 1961 Cri L. J 450 where  

Section  57  of  the  Bombay  Police  Act,  1951  authorised  

removal of a person from an area if he has been convicted of  

18

19

certain  offences including theft.  The Supreme Court  held  

that  

“18.  'Section. 57 of the Bombay Police Act,  1951  does  not  create  a  new  offence  nor  makes  punishable  that  which  was  not  an   offence.  It  is  designed to protect  the  public   from  the  activities  of  undesirable  persons  who  have  been  convicted  of  offences  of  a  particular kind. The section only enables the   authorities  to  take  note  of  their  conviction   and  to  put  them  outside  the  area  of  their   activities so that the Public may be protected  against a repetition of such activities.........  

18.  An offender who has been punished may   be restrained in his acts and conduct by some  legislation,  which  takes  notes  of  his   antecedents,  but so long as the action taken  against him is after the Act comes into force,  the  statute  cannot  be  said  to  be  applied   retrospectively.'”

15.The  most  concrete  cases  wherein  laws  are  made  

retrospective are those in which the date of commencement  

is  earlier than enactment,  or which validate  some invalid  

law,  otherwise,  every  statute  affects  rights  which  would  

have been in existence but for  the  statute  and a  statute  

does not become a retrospective one because a part of the  

19

20

requisition for its action is drawn from a time antecedent to  

its  passing.  Applying  that  to  the  present  case,  the  

conclusion  is  inescapable,  that  Rule  25(2)  is  not  

retrospective. All that Rule 25(2) does is that it operates in  

future,  though  the  basis  for  taking  action  is  the  factum  

acquiring a plot in the past. Thus when by virtue of Rule  

25(2), a member is deemed to have ceased to be a member  

of  the society,  the cessation operates from April  2,  1973,  

when the rules came into force.

Issue II

16. Coming to the second question of applicability of bye-laws,  

the  same  came  into  force  on  3.10.1962.  The  eligibility  

conditions for enrollment as a member of the society were  

provided in chapter III of the said bye-laws. Bye-law No. 8  

(vii)  which  provides  for  cessation  of  membership  is  

reproduced is reproduced herein under:

“8. A person ceases to be a member: (vii) On undertaking the business of purchase and  sale of houses or land for construction of houses  either  directly  or  indirectly  or  on  purchasing  a  

20

21

house or a plot of land for construction of houses  either in his own name or in name of any of his  dependants  through  any  other  source  and  the   member  shall,  within  one  month  of  his  undertaking  the  said  business or  purchase  of  a  house or  a  plot  of  land shall  inform the  society   about this.”

17. Perusal to above bye-law makes it clear that on purchasing  

a house or a plot of land for construction of a house, either  

in  his  own name  or  in  name  of  any  of  his  dependants,  

disqualifies a member of the society to continue as one. Bye  

laws of the society regulate the management of the society  

and govern the relationship between society and members  

inter se. They are of the nature of Articles of Association of a  

company registered under the Companies Act.  If  they are  

consistent with the Act and Rules, the members are bound  

by them. In  Zoroastrian Coop. Housing Society Ltd. v.  

District  Registrar,  Coop.  Societies  (Urban),  reported  at  

(2005) 5 SCC 632, at page 661  :  

“36. if the relevant bye-law of a society places  any restriction on a person getting admitted to a  cooperative  society,  that  bye-law  would  be  operative  against  him  and  no  person,  or  

21

22

aspiring member, can be heard to say that he  will not be bound by that law which prescribes  a qualification for his membership.”

18.Bye-law 8(vii)  was  neither  inconsistent  with  the  Bombay  

Cooperative Societies Act, 1925 under which the appellant  

society  was  governed  nor  was  it  contrary  to  Delhi  

Cooperative  Societies  Act,  1972  and  the  Rules  framed  

thereunder. Therefore, a member of the society who acted in  

violation of the said bye law was liable to have his or her  

membership removed from the appellant-society.

19.However,  the  learned  counsel  for  the  Respondent-1  

contended that the appellant-society never communicated  

to the  Respondent-1,  as to violation of  bye  law 8(vii).  No  

correspondence  made  by  the  appellant-society  to  the  

respondent  1  mentioned  the  said  bye  law  8(vii),  but  

mentioned only the violation of bye law 5(i)(e) and Rule 25  

wherein  bye  law  5(i)(e)  prescribes  to  be  member  of  the  

society and is not applicable to the person who has already  

become  member  before  the  adoption  of  the  bye  laws.  

22

23

Further,  the  learned  counsel  for  the  respondent-1  

contended that during the adjudication of the Writ Petition,  

the appellant never raised the ground of the violation of bye  

law 8 (vii) and even the Special Leave Petition filed by the  

appellant does not mention the said bye law 8(vii) either in  

list of dates or in the Question of Law or in Grounds. It was  

only for the first time on 22.09.10 during the course of oral  

arguments the learned counsel for the appellant raised the  

said violation as a surprise. On further investigation apart  

from the fact that the alleged 1962 bye laws were not part of  

the High Court file and the copy of the bye laws relied upon,  

it was contended, appears to be fabricated.

20.If we accept the above contention of respondent-1 and keep  

aside the alleged bye law 8(vii) from our consideration, bye  

law 5(i)(e)  still  remains to be considered, the existence of  

which is also not in doubt. The violation of said bye law  

5(i)(e) was also communicated to the respondent-1 by show  

cause notice dated 24.1.1978 and also raised as a ground  

23

24

in the writ petition before the High Court and in the SLP  

filed before this Court. The said bye law 5(i)(e) is produced  

hereinunder:

“5(i)  Any person  shall  be  eligible  to  be  a  member of the society, provided; (e)  he  or  his  wife  (she  or  her  husband  incase  of  a  woman)  or  any  of  his/her  dependents does not own a dwelling house  or a plot for building a house in Delhi;”

21. The question for our consideration is what is the meaning of  

the expression "eligible to be a member" used in the 1962  

bye law No. 5(i)(e). The verb "be" has two meanings, namely,  

(a)  to  exist,  and (b)  to  become.  The  former  refers  to  the  

existence of state of affairs in present while the latter refers  

to the coming into existence of a new state of affairs. It is  

argued  for  the  respondent-1  that  the  1962  bye-law  No.  

5(i)(e) refers only to the eligibility of a person to become a  

member. On the contrary, the respondents have urged that  

even a person who is already a member ceases to be eligible  

to  continue  as  a  member  if  he  does  not  satisfy  bye-law  

5(i)(e). That is to say, if a person after becoming a member  

24

25

of the society purchased a dwelling house in Delhi, then he  

is not eligible to be a member in the sense that he is not  

eligible to continue to be a member of the society under the  

said bye-laws. As against the contention of the respondent-

1 that bye-law 5(i)(e) does not apply to existing members, it  

may be pointed out that in Article 102(1) of the Constitution  

also  the  word  "be"  is  used  in  the  sense  of  "exist"  as  

contrasted  to  "become".  Under  Article 102(1) a  person  is  

disqualified  for  "being  chosen  as"  and  also  for  "being  a  

member of either Houses of parliament" etc. The dichotomy  

there is between becoming a member and continuing to be a  

member of parliament. It is therefore, to be concluded that  

even under the 1962 bye-law No. 5(i) (e) the respondent-1  

were  disabled  from  continuing  to  be  members  of  the  

society.  

Issue III

22.  The next  argument  for  the  learned  counsel  for  the  

respondent-1 was that the said property was purchased in  

25

26

the name of HUF and not by respondent-1 in his personal  

capacity.  Whereas  the  learned  counsel  for  the  appellant  

contended that the Rule 25 is applicable to the respondent-

1 irrespective of the fact that the said property is purchased  

in the name of HUF. We have considered these arguments  

in the light of the Rule 25. Sub-rule (1)(c)(i) of the rule 25  

provides an exception in case of persons who are only co-

sharers in the joint family property, in that disqualification  

of membership as laid down in sub-rule (l)(c)(i) shall not be  

applicable in case of co-sharers of property whose share is  

less than 66.72 sq. m. (80 yds) of land. In the present case,  

the said property is admeasuring 1080 yds and there are 3  

co-sharers of  the property,  i.e.  respondent-1 and his two  

children,  (after  the  death  of  wife)  and  the  share  of  the  

respondent-1 would be more than the prescribed limit. In  

this regard, the aforesaid exception is not applicable to the  

respondent-1’s case.  There is one more angle, which was  

specifically placed before us and requires our consideration.  

A perpetual lease deed with respect to the land allotted to  

26

27

the appellant  society was executed on 06.04.1978 by the  

President of India through the Delhi Administration.  A copy  

of the said perpetual lease deed executed with the appellant  

society  is  placed  on  record.   Our  specific  attention  was  

drawn to clause No. 5 (a) of the said lease deed, which reads  

as follows:

“5(a).  The lease shall sublease within one year  from the  date  of  execution  of  these  present,  such time and on such premium and yearly  rent  as  may  be  fixed  by  the  lessor,  one  residential plot to each of its members who or  whose  wife/husband  or  any  of  his/her  dependent  relatives  including  unmarried  children does not own, in full  or in part,  on  freehold  or  leasehold  bases,  any  residential  plot or house in the urban areas of Delhi, New  Delhi  or Delhi cantonment, and who may be  approved by the chief commissioner.”

The appellant society was, therefore, under an obligation not  

to  allot  a  residential  plot  to  a  person,  who  was  owning  a  

property  in  the  city  of  Delhi.   Therefore,  as  per  terms  of  

allotment of the land to the appellant it was obligatory for the  

society not to allot plots of land to such persons who own any  

27

28

residential property either in their own name or in the name of  

their family member.  When the Hindu Undivided Family of  

the  respondent  consists  only  of  his  own  family  members,  

namely,  his  wife,  son  and  the  daughter  and  therefore  

obviously  ownership  of  the  said  property  by  the  Hindu  

Undivided Family of the respondent is ownership of property  

by  the  family  members  and  consequently  the  same  would  

clearly  fall  within  the  prohibition  and  bar  of  allotment  as  

contained in clause No. 5 (a) of the lease deed.

Issue IV

23.The last submission made by respondent-1 is that the said  

property is being used only for the purpose of running a  

nursing  home,  i.e.,  for  a  commercial  and  not  residential  

purpose.  The  learned  counsel  for  the  appellant-society  

refuted  the  same contending  that  the  nursing  home was  

located only on the  ground floor  of  the property and the  

other floors are being used for residential purpose and the  

same  appears  from  the   various  correspondences  and  

28

29

affidavits made by the respondent-1 wherein he has shown  

the said property as his residence. In light of Rule 25, the  

action of the appellant-society would be justified if the said  

property  is  found  to  be  residential  house  in  the  light  of  

documents on record. The mere fact that the respondent-1  

has  shown  in  affidavits  and  correspondences  the  said  

property as his address doesn’t prove that the property is a  

residential  house  as  being  a  doctor  running  a  nursing  

home, he had to remain invariably in his workplace for very  

long  hours.  However,  the  Annexure  P-12  and  P-13  are  

respectively self-assessment property tax forms filled by the  

respondent-1  with  respect  to  the  said  property  and  an  

objection  letter  written  by  the  respondent-1  against  the  

assessment  notice  issued  by  the  Municipal  Corporation  

with respect to the said property. In Annexure P-12, while  

assessing  the  tax  of  the  property,  the  respondent-1  has  

shown  the  property  as  used  for  residential  and  self-

occupied purpose only. In Annexure P-13, the respondent-1  

opposed  the  assessable  value  shown  in  the  assessment  

29

30

notice on the ground that the building on the said plot is a  

new constructed building and is under self-occupation for  

residence and self professional-medical work only and is a  

single-unit house. The respondent for the purpose of being  

member  of  the  appellant-society  cannot  claim  the  said  

property  used  purely  for  commercial  purpose  when  he  

himself claimed the said property being used for residential  

purpose also.  It should also be indicated that the aforesaid  

information about the nature and status of his property in  

Kailash Colony were furnished by the respondent under his  

own declaration and by certifying that the said particulars  

filled in the  form are true and correct  to the  best  of  his  

knowledge.  The respondent No. 1 has also appended his  

signature  to  the  said  declaration  by  signing  it  on  

27/06/2006.  These informations are relevant and material  

to  come  the  conclusions  that  the  aforesaid  property  in  

Kailash Colony was also used as a residential property and  

therefore the contention of the counsel for the respondent  

no. 1 that it is exclusively a commercial property cannot be  

30

31

accepted.

24. We  have considered  the  facts  and  circumstances  of  the  

case, and analysed the arguments put forth by both parties  

to  buttress  their  stand.  For  the  reasons  that  we  have  

considered herein and mentioned above,  we find that the  

arguments raised by respondent-1 are without merit,  and  

the appeal therefore, is to be allowed.

............................................J        [Dr. Mukundakam Sharma ]

............................................J  [ Anil R. Dave ]

New Delhi, November 15, 2010.

31