REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.         957           OF 2009 (Arising out of SLP (C) No. 9866 of 2007)

Hindustan Coop. Housing Building ..Appellant Society Ltd.  

Versus

Registrar, Co-operative Societies and Anr. ..Respondents

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the judgment of Delhi High Court in Writ

Petition No.686/1992 and Review Petition No.268/2006 in the aforesaid writ

petition.  

3. Background facts in a nutshell are as follows:

On 5.9.1962 Anoop Singh who as a member wrote to appellant-Society

asking for refund of monies (Rs.3110/- towards membership and Rs.15,000/-

each  for  plot  in  appellant’s  colony).  The  reason  stated  was  that  as  the

membership process with appellant was getting delayed and he has purchased a

plot in Green Park and as per Govt. Policy there are no chances of getting more

than one plot in Delhi.  

On  9.5.1972  late  Anoop  Singh  filed  application  for  transfer  of  his

membership in favor of his daughter, the respondent no.2.  

On 18.11.1973, by a letter the appellant-society informed Anoop Singh

that  the  Managing  Committee  by  resolution  dated  05.09.1973  allowed  the

transfer and asked for share certificate and other documents to enable transfer.  

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On  12.10.1978,  appellant-society  requested  Anoop  Singh  to  file  an

affidavit which was questioned by respondent no.2 by letter dated 27.10.1978.  

On  26.3.1979  Anoop  Singh  did  not  file  the  requisite  affidavit  and

Administrator of appellant-society by letter informed that the transfer could not

be confirmed unless affidavit is filed.  

On 14.4.1979 Anoop Singh replied stating that it is not possible to file

the affidavit as he does not know full or part of lease hold or freehold of the

property.

On 29.5.1979 Administrator  informed Anoop Singh of his  inability to

transfer the membership as the affidavit was not filed and asked to withdraw

the deposit from society to which Anoop Singh requested for reconsideration

vide letter dated  06.06.1979.  

On 11.7.1979 appellant’s administration made it clear that no allotment

could  be  made  in  favour  of  respondent  no.2  to  which  Anoop  Singh  again

requested for reconsideration vide letter dated 11.11.1979.

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On 22.3.1980 appellant-administration informed Anoop Singh that even

though  clause  5(2)  of  Lease  Deed  provides  for  transfer  without  affidavit  -

allotment of plot could not be possible unless original member establishes his

own eligibility for allotment for plot. However, opportunity of personal hearing

was granted to Anoop Singh.  

On 24.11.1980, Administrator of appellant-society removed the name of

Anoop Singh categorically stating that it could not be transferred in favor of

respondent no.2.

On 22.1.1982, Secretary of the society also by its letter informed Anoop

Singh that transfer could only happen after submission of indemnity bonds and

affidavits  so it  is  suggested  that  respondent  no.2  be made fresh member  of

society w.e.f. date of transfer.  

On 1.02.1982 Anoop Singh tendered his resignation.  

On  14.02.1992  respondent  no.2   filed  WP(C)  being  686/92  without

challenging  the  orders  of  the  Administrator  dated  26.03.1979,  29.05.1979,

11.07.1979 and 24.11.1979,  seeking writ of Mandamus asking appellant and

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respondent no.1 for  allotment of plot or in alternative to refund money paid by

respondent no.2.

On 30.10.1995  Rule  was  issued.  On 19.09.2005  ex-parte  proceedings

qua appellant-society were initiated in High Court.  

On  16.02.2006  the  High  Court  allowed  writ  petition  and  issued

directions to respondent no.1 to recommend the case to appellant-society  for

allotment of plot in category ‘C’ of 125 sq. yards.  

On 22.05.2006 appellant-society came to  know about the above order

vide letter dated t. 22.05.2006 issued by respondent no.1.

On 01.07.2006 appellant society then filed a Review Petition being 268

of 2006 and on 1.9.2006 the High Court issued notice. On 19.1.2007 the High

Court dismissed review petition.  

The High Court  by the order in  writ  petition held that  the transfer  in

favour of Jasjit Kaur has been accepted by the Society and therefore she was

entitled to allotment of the plot.  It  was held that  the Registrar,  Cooperative

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Society had no authority in law to sit over the affidavit and not to recommend

the case for allotment to Jasjit  Kaur.  A direction was therefore given to the

Registrar,  Cooperative  Societies  to  forthwith  recommend  the  case  of  Jasjit

Kaur for allotment of plot in Category ‘C’ of 125 sq. yards. A Review Petition

was filed inter-alia taking the stand that after Mr. Anoop Singh had asked for

refund of money, and therefore, raising the question of any transfer in law did

not  arise.   The review petition  was rejected on the ground that  no  case  for

review was made out.  

4. Mr.  K.T.S. Tulsi,  learned counsel  for  the  appellant  submitted that  the

High Court has clearly lost sight of various provisions, more particularly, Rule

25 of the Delhi Co-operative Societies Rule, 1973 (in short the ‘Rules’) framed

under  Delhi  Co-operative  Societies  Act,  1972  (in  short  the  ‘Act’).  It  was

pointed out that without availing the statutory remedies available under the Act

and  the  Rules,  the  respondent  No.2  Jasjit  Kaur  filed  a  writ  petition.  Since

disputed questions were involved, the High Court ought not to have interfered

in the matter.  According to him directions given are clearly contrary to law.      

5. In response, learned counsel for respondent No.2 submitted that she has

been fighting a battle for getting her legitimate right and after having accepted

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the prayer for transfer,  the Society cannot turn around and take a stand that

since  Anoop  Singh  was  disqualified,  the  order  of  the  High  Court  is

indefensible. In any event it is submitted that plot has been allotted pursuant to

the  High  Court’s  order  and,  therefore,  by  passage  of  time  the  petition  has

become infructuous.  

6. We find that before the High Court there was no appearance on behalf of

the present appellant.   

7. Rule 25 of the Rules reads as follows:

“25. Disqualification of Membership:

No person shall  be eligible for admission as a member of a co- operative society if he-

(a)  has  applied  to  be  adjudicated  an  insolvent  or  is  an undischarged insolvent; or

(b) has been sentenced for any offence other than an offence of a political character or 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

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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 dependant 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 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.  

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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. For  the  purpose  of  the  present  case  Sub-rule  (2)  of  Rule  25  is  of

paramount importance. There is a deemed disqualification. The effect of it has

not been examined by the High Court.  

9. It is,  as noted above, a deeming provision. Such a provision creates a

legal fiction. As was stated by James, L.J. in Levy, Re, ex p Walton (1881 (17)

Ch.D 746)

“when a statute enacts that something shall be deemed to have been done, which in fact and in truth was not done, the  court  is  entitled  and  bound  to  ascertain  for  what purposes and between what persons the statutory fiction is to be resorted to. After ascertaining the purpose full effect must  be  given  to  the  statutory  fiction  and  it  should  be carried to its logical conclusion and to that end it would be proper  and  even  necessary to  assume all  those  facts  on which alone the fiction can operate.”

(See Hill v. East and West India Dock Co. 1884 (9) AC 448,  State of Travancore Cochin v. Shanmugha Vilas Cashewnut Factory (AIR 1953  SC  333),  American  Home  Products  Corpn. v.  Mac

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Laboratories  (P)  Ltd  1986  (1)  SCC  465 and  Parayankandiyal Eravath Kanapravan Kalliani Amma v. K. Devi (1996 (4) SCC 76). In an oft-quoted passage, Lord Asquith stated: (All ER p. 599 B-D)

“If you are bidden to treat an imaginary state of affairs as real  you must surely,  unless  prohibited from doing so, also  imagine  as  real  the  consequence  and  incidents which, if the putative state of affairs had, in fact, existed must inevitably have flowed from or accompanied it. … The statute states that you must imagine a certain state of affairs,  it  does  not  say that  having done  so,  you must cause  or  permit  your  imagination  to  boggle  when  it comes  to  the  inevitable  corollaries  of  that  state  of affairs”.

(See  East  End  Dwellings  Co.  Ltd. v.  Finsbury  Borough  Council 1951 (2) All ER 587 (HL))

10. “The  word  ‘deemed’  is  used  a  great  deal  in  modern  legislation.

Sometimes  it  is  used  to  impose  for  the  purposes  of  a  statute  an  artificial

construction of a word or phrase that would not otherwise prevail. Sometimes it

is used to put beyond doubt a particular construction that might otherwise be

uncertain.  Sometimes  it  is  used  to  give  a  comprehensive  description  that

includes what is obvious, what is uncertain and what is, in the ordinary sense,

impossible.”

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(Per Lord Radcliffe in St. Aubyn (L.M.) v. Attorney-General (No. 2) 1951 (2) All ER 473 , All ER p.498 F-G.]

11. “Deemed”,  as  used  in  statutory  definitions  is  meant  “to  extend  the

denotation  of  the  defined  term to  things  it  would  not  in  ordinary  parlance

denote, is often a convenient devise for reducing the verbiage of an enactment,

but that does not mean that wherever it is used it has that effect; to deem means

simply to judge or reach a conclusion about something, and the words ‘deem’

and ‘deemed’ when used in a statute thus simply state the effect or meaning

which some matter or thing has - the way in which it is to be adjudged; this

need not import  artificiality or fiction; it  may simply be the statement of an

undisputable conclusion.” (Per Windener, J. in Hunter Douglas Australia Pty.

v. Perma Blinds 1970 (44) Aust LJ 257.)

12. When a thing is to be “deemed” something else, it is to be treated as that

something else with the attendant consequences, but it is not that something

else (per Cave, J., R. v. Norfolk County Court 1891 (60) LJ QB 379).

“When  a  statute  gives  a  definition  and  then  adds  that certain  things  shall  be  ‘deemed’  to  be  covered  by  the definition, it matters not whether without that addition the definition would have covered them or not.”

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(Per Lord President  Cooper in  Ferguson v.  McMillan  1954 SLT 109)

13. Whether  the  word  “deemed”  when  used  in  a  statute  established  a

conclusive  or  a  rebuttable  presumption  depended  upon  the  context  (see  St.

Leon Village Consolidated School Distt. v. Ronceray 1960 (23) DLR (2d) 32)).

“I … regard its primary function as to bring in something which would otherwise be excluded.”

(Per Viscount Simonds in Barclays Bank v. IRC 1961 AC 509 (HL).

14. “Deems” means “is of opinion” or “considers” or “decides” and there is

no implication of steps to be taken before the opinion is formed or the decision

is taken.

[See R  v. Brixton Prison (Governor), ex p Soblen 1962 (3) All ER 641, All ER p.669 C.]

15. Learned counsel for the appellant is right that normally when a statutory

remedy is available, the same should be availed. In the instant case that aspect

has  also  not  been  examined  by  the  High  Court.  We  are  therefore  of  the

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considered opinion that the writ petition needs to be heard by the High Court

afresh to be decided keeping in view the applicable legal provision. Since no

counter affidavit had been filed by the present appellant before the High Court

we permit it to do so within a period of one month. If any rejoinder is to be

filed the same shall  be filed within a period of two weeks from the date of

filing  of  the  counter  affidavit.  We  request  the  High  Court  to  explore  the

possibility of disposing of the writ petition within a period of four months by

fixing a definite date after a period of six weeks from today.  Till the disposal

of the writ petition by the High Court afresh, no third party rights in respect of

the  plot  which  is  stated  to  have  been  allotted  to  respondent  No.2  shall  be

created by the appellant.  

16. The appeal is allowed to the aforesaid extent with no order as to costs.  

………………………………….J. (Dr. ARIJIT PASAYAT)

………………………………….J. (ASOK KUMAR GANGULY)

New Delhi, February 12, 2009

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