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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 3RD JUNE, 2016
PRESENT
THE HON'BLE MR.JUSTICE RAM MOHAN REDDY
AND
THE HON'BLE MR.JUSTICE H.BILLAPPA
WRIT PETITION NO. 7105 OF 2007(GM-KSR-PIL)
BETWEEN:
1. MR. KEDAMBADI JAGANNATHA SHETTY SON OF K.P.N. SHETTY AGED ABOUT 73 YEARS R/AT NO.654, 10TH CROSS, II STAGE,
W.C ROAD, BANGALORE-86.
(PETITIONER NO.1 DELETED VIDE ORDER
DATED 27.07.2012)
2. MR. G.P. SHIVAPRAKASH SON OF PARAMASHIVAIAH FORMER JUDGE, HIGH COURT OF KARNATAKA AGED ABOUT 70 YEARS NO.1420, 8TH MAIN, JUDICIAL LAYOUT
OPP.JAKKUR FLYING SCHOOL,
GKVK POST, BANGALORE-65.
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3. MR M.P. CHINNAPPA SON OF PONNAPPA AGED ABOUT 65 YEARS FORMER JUDGE, HIGH COURT OF KARNATAKA NO.1419, 8TH MAIN, JUDICIAL LAYOUT
OPP.JAKKUR FLYING SCHOOL,
GKVK POST, BANGALORE-65.
4. MR C CHANDRA MULESHWARACHARI SON OF CHENNACHARI.G AGED ABOUT 57 YEARS R/AT NO.5, 14TH MAIN, JUDICIAL LAYOUT OPP, JAKKUR FLYING SCHOOL GKVK POST, BANGALORE-65
5. MR G.R SACHIDANANDA SON OF G.L. RAMASIVAIAH AGED ABOUT 54 YEARS R/AT NO.1446, I MAIN, JUDICIAL LAYOUT OPP, JAKKUR FLYING SCHOOL GKVK POST, BANGALORE-65. (DELETED VIDE ORDER DATED 31.08.2012)
6. MR. CHANDRASHEKAR RODNAVAR S/O OF NEELAGIRIYAPPA AGED ABOUT 45 YEARS R/AT NO.1824,6TH CROSS, JUDICIAL LAYOUT OPP, JAKKUR FLYING SCHOOL GKVK POST, BANGALORE-65.
7. MR N.A NARAYANAPPA SON OF LATE ANJANAPPA AGED ABOUT 64 YEARS R/AT NO.1734, 6TH MAIN, JUDICIAL LAYOUT OPP, JAKKUR FLYING SCHOOL GKVK POST, BANGALORE-65.
8. MR T.S VIJAYA SON OF SIDDAPPA AGED ABOUT 60 YEARS
3
R/AT NO.1728, 6TH MAIN, JUDICIAL LAYOUT OPP, JAKKUR FLYING SCHOOL GKVK POST, BANGALORE-65.
... PETITIONERS
(By Sri. DHYAN CHINNAPPA, SR. ADV.,)
AND
1. KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HOUSE BUILDING
CO-OPERATIVE SOCIETY, REPRESENTED BY ITS SECRETARY 2. C SHIVALINGAIAH
MAJOR FATHERS NAME NOT KNOWN TO PETITIONERS PRESIDENT (PETITION AGAINST R-2 STANDS ABATED VIDE ORDER DATED 10/10/2014)
3. C.M BASAVARYA MAJOR FATHERS NAME NOT KNOWN TO PETITIONERS HONORARY PRESIDENT AND DIRECTOR
4. M RUDRAIAH MAJOR, FATHERS NAME NOT KNOWN TO PETITIONERS VICE PRESIDENT AND DIRECTOR
5. KEMPA THIMMAIAH MAJOR, FATHERS NAME NOT KNOWN TO PETITIONERS TREASURER ALL AT SOCIETY BUILDING, NO.1018A,8TH MAIN,
JUDICIAL LAYOUT, OPP. JAKKUR FLYING
SCHOOL, GKVK POST, BANGALORE-65.
4
6. THE REGISTRAR CO-OPERATIVE SOCIETIES ALI ASKAR ROAD, BANGALORE
7. STATE OF KARNATAKA
REPRESENTED BY THE CHIEF SECRETARY VIDHANA SOUDHA, VIDHANA VEEDHI, BANGALORE.
... RESPONDENTS
(By SRI. SUBRAMANYA JOIS, SR. ADV., A/W
SRI ANIL KUMAR, ADV., FOR R1 AND R3 TO R5; SRI. R. DEVDAS, PRL. GA, FOR R6 AND R7 PETITION AGAINST R2 STANDS ABATED V/O DATED 10.10.2014)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE
CENTRAL BUREAU OF INVESTIGATION OR ANY OTHER
INDEPENDENT INVESTIGATING AGENCY TO INVESTIGATE INTO
THE IRREGULARITY AND ILLEGALITIES COMMITTED BY THE
RESPONDENTS AND TO TAKE APPROPRIATE ACTION IN
ACCORDANCE WITH LAW AND APPOINT AN ADMINISTRATOR
OR ANY OTHER OFFICIAL TO MANAGE AND RUN THE AFFAIRS
OF THE SOCIETY UNTIL A COMPLETE INVESTIGATION IS MADE
OF THE AFFAIRS OF THE SOCIETY AND ETC.
THIS PETITION HAVING HEARD AND RESERVED FOR
ORDERS AND COMING ON FOR DICTATING ORDERS THIS DAY,
RAM MOHAN REDDY, J., MADE THE FOLLOWING:
5
ORDER
Petitioners, members of the 1st Respondent –
Karnataka State Judicial Department Employees House
Building Co-operative Society, for short 'SOCIETY',
some of whom have constructed houses in the sites
allotted to them in the layout formed by the Society
known as 'Judicial Layout'. Society is registered on
11.8.1983 under the Karnataka Co-operative Societies
Act, and the Rules framed thereunder. The object of
the Society is to acquire lands for formation of
residential layout and allot residential sites to its
members who are the employees of the Karnataka State
Judicial Department and the High Court of Karnataka
in accordance with the rules/regulations of the
Bangalore Development Authority. At the request of
the Society, the Government of Karnataka initiated
acquisition proceedings to acquire 191 acres 31 guntas
in various Survey numbers by Notification dated
11.2.1988, under Section 4(1) of the Land Acquisition
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Act, 1894, for short 'LA Act' and acquired 169 Acres
and 12 Guntas of land in various Survey Numbers of
Allalasandra, Chikka Bommasandra and Jakkur
Plantation of Yelahanka Hobli, Bangalore North Taluk,
pursuant to final notification dated 24.2.1989,
Annexure-'A' issued under Section 6(1) of the ‘LA Act'.
2. Petitioners 1 to 3, former judges of the High
Court of Karnataka and other petitioners also claim to
be residents of the said layout having constructed
houses in the sites allotted to them by the Society.
3. Petitioners are aggrieved by the omissions and
commissions of the respondents, more particularly by
the 1st respondent – Society in committing various
illegalities and irregularities as under:
a) In inducting persons who are not the employees of
the judicial department or Judges of the High Court
of Karnataka as Associate members to the society
and allotting sites to such associate members
contrary to Bye law 10 of the Byelaws of the Society.
7
b) Releasing a portion of the land to the owners even
though the lands were acquired and compensation
was received by them, disobeying the order of the
Division Bench of the High court.
c) Selling corner sites contrary to the provisions of the
Bye-Law of the society without following the
Bangalore Development Act and allotment Rules
made hereunder, Karnataka Co-operative Societies
Act and Rules, provisions of Town and Country
Planning Act etc.,
d) Allotting number of sites to the kith and kin of the
present and past Directors, office bearers of the
Society and other members of the Society.
e) Allotting sites in Talgatpura Layout formed by the
Society to the members who have been allotted sites
in Judicial Layout and also outsiders depriving sites
to other genuine members who do not have sites in
any of the layouts.
f) Selling the civic amenity sites adjacent to National
High Way to various persons without prior approval
of the general body clandestinely without even calling
for sealed tenders etc., thereby causing heavy loss to
the Society.
g) Not utilizing the two storied building constructed for
the purposes of housing the society office at Site
No.1018, 8th Main, Judicial Layout and for
attempting to transfer/shift the same to another
location.
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h) Allotment of sites to the members ignoring the
seniority of the genuine members.
4. Petitioners further state that various important
issues which have come to light requires to be
addressed and the illegalities committed by the Society
for the benefit of its office bearers to the detriment of the
members of the Society requires redressal.
5. According to the petitioners the Society when
registered on 11.8.1993 having made representations to
the State of Karnataka to acquire lands led to
proceedings of the Special Deputy Commissioner under
the 'LA Act', whence a few land owners by name Papaiah
and Muniswamappa filed W.P.3995/1989 and
6156/1989 challenging the acquisition proceedings
which was dismissed by Order dated 17.11.1992 of a
learned Single Judge. The Society framed Byelaws
Annexure- B duly certified by the Registrar of Co-
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operative Societies. The State Government having
prepared model byelaws for House Building Cooperative
Societies, the Society adopted the same Annexure-C,
whereunder a new class of membership known as
'Associate Members' was included and clause (10) of the
Byelaws provided for a member to be entitled to a site if
he or she is an employee of the Judicial Department
and has put in a minimum of five years of service in
Karnataka. The model Byelaws were deemed to be
adopted by the Society during the year 1993-94.
6. Legal representatives of Muniswamappa filed a
Writ Appeal No.4283/1995 which was dismissed by a
Co-ordinate Division Bench by order dated 17.11.1995
That matter when taken in Special Leave Petition, the
proceeding was remitted to the Division Bench for
consideration afresh. On 21.8.2000 a compromise
petition though filed proposing to allot certain sites to
the legal representatives of Muniswamappa, in the
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Judicial Layout, was not accepted by the Division Bench
as recorded in the Order dated 21.8.2000, on the
premise that such a compromise is not in the interest of
the Society. The appellants thereafterwards filed a
memo to withdraw W.A. 4283/1995 which was
allowed by order dated 9.3.2001. It is asserted that the
Society when arraigned as a party respondent in
W.P.40994/2002 filed an affidavit disclosing the list of
Associate Members and individuals to whom sites were
allotted.
7. It is in the backdrop of aforesaid facts the
petitioners have presented this petition broadly
classifying the grounds thus:
1) Regarding inducting Members of the Society:
According to the petitioners, the Society cannot create another class of members, namely Associate Members, and allot sites to such members, who are not part of the higher or subordinate judiciary and Byelaws have been illegally modified to include another class of membership. The Byelaws of the Society,
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Annexure-B provides for only two classes of members viz., members and nominal members, whereas the model Byelaws Annexure-C included 'Associate Members'. The membership as available in the Byelaw Annexure-B and as provided in clause (7) reads thus:
“(7) Resident of Bangalore and having interest in the development of this Society, being the employee of the High Court of Karnataka, Bangalore, or the employee of any Court which is subordinate to the High Court and within the jurisdiction of the Society. The employees who had retired from service of judicial department and the Judges of High Court are also entitled to become members of Society.”
8. In the model byelaws the qualification for
membership at Byelaw No.6, it is said, states thus:
“any person who is above age of 18 years
and who is competent under Section 11 of
the Indian Contract Act, 1872 (Central Act
2/1872)”
and Byelaw No.20-A relating to Associate Member reads
thus:
“An associate member may hold shares
but shall not be entitled to become an officer
12
of the Society. He shall hold atleast one
share. He shall have all the rights and
privileges of member in the society except
voting power. “
9. Byelaw (10), it is said, reads thus:
“Right of members:
All members shall be entitled to avail the
benefits as per the objectives under byelaw No.4
subject to the condition, that a member shall be
eligible for allotment of site/flat/house only if he
fulfils the following requirements:
a. He/she does not already own a site or a plot or house/flat/apartment in his/her own name or in the name of any other member his/her family in the corporation limits/development authority limits/municipality limits in whose limit the Society is situated (explanation: family means and includes husband, wife, sons having no independent source of income, unmarried daughters and person/persons dependent on the members).
b. He/she is an employee of the Judicial Department and has put in a minimum continuous or intermittent service of five years in Karnataka.
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10. It is the allegation that the office bearers of the
Society inducted more than 400 persons as Associate
members who were neither employees of the Judicial
Department nor had the requisite qualification to
become a member of the Society and in the process
provided membership to the kith and kin of Directors
and persons of their choice denying bonafide members
of allotment of sites. It is the further allegation that the
Associate Members having failed to comply with the
eligibility norm under Byelaw No.4 were allotted sites.
Petitioners support their claim on the basis of the
affidavit and enclosures therein Annexure-D of Suresh
Kumar, the Secretary which affidavit was filed in
W.P.40994/2002.
11. In addition it is alleged that most of the
Associate Members or their spouse were owners of
houses or sites in other House Building Cooperative
Societies being members as such which fact was
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suppressed and in respect of which no enquiry was
conducted by the Society. Hence gross mismanagement
caused grave harm to public interest, more so, since the
sites were formed in the land acquired by the State
Government for a public purpose for and on behalf of
the Society.
2) Regarding allotment of Certain areas of
Acquired property to the Owners:
A) Property of J.M.Krishnappa:
Land measuring 2 acres in Sy.No.4/P; 1 acre and
5½ guntas in Sy.No.3 belonging to J.M.Krishnappa
situated in between Bangalore-Hyderabad National
Highway and the Railway track when acquired, the
owner questioned the acquisition in writ proceeding
which was withdrawn. The Society, it is said, metalled
approach road in the middle of the land leaving two
portions on the either side and described the same in
the layout plan as meant for future development. It is
15
the allegation of the petitioner that J.M.Krishnappa was
put in possession of land measuring 500 ft x 60 ft
although he had received the compensation and in
which some person is carrying on commercial activity.
Hence the action of the Society is mischievous. As
regards the balance portion of the land, it is alleged that
the Directors of the Society illegally disposed of the sites
by way of sale although the General Body did not
authorise the selling of sites to outsiders. The
transactions, it is said, are illegal.
B) Property belonging to late Subbaiah:
Land measuring 12 acres comprised in Sy.No.90,
103/3 and 3/2 belonging to late Subbaiah when
acquired and compensation paid, the Society, it is said,
passed an illegal resolution to allot 34 sites of different
dimensions in favour of Subbaiah and his legal
representatives although the allottees were neither
ordinary members nor associate members since the
bye-law Annexure-B was not amended as on the date of
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allotments. According to the petitioners, Annexure-E is
a pamphlet enumerating the names of allottees and the
dimensions of the sites so allotted.
C) Property belonging to Papaiah and
Muniswamappa:
Land measuring 2 acre 30 guntas in Sy.No.91/5;
2 acres 39 guntas in Sy.No.92/2A belonging to Papaiah
and Muniswamappa when acquired, Papaiah filed
W.P.3995/1989, while Muniswamappa filed
W.P.6156/1989 calling in question the acquisition
proceedings. A learned Single Judge Sri.C.Shivappa J.,
by order dated 17.11.1992 Annexure-F dismissed the
writ petition, while Writ Appeal 4283/1995 was
dismissed by Coordinate Division Bench by order
dated 17.11.1995. Papaiah did not question the order
of the learned Single Judge and therefore, it is said,
attained finality. Muniswamappa carried the order of
the Division Bench to the Supreme Court in SLP (C)
398/1998, whence the petition was allowed and the
17
proceeding remitted to the Division Bench. On remand,
it is stated that the appellants and the Society filed a
compromise petition reporting settlement whereunder
13 sites were allotted to the family of Muniswamappa in
addition to compensation paid for land acquired and
therefore, a Division Bench by order dated 21.8.2000
Annexure-G declined to accept the compromise since it
was not in the interest of Society and directed the same
be placed for discussion and deliberation before the
Executive Committee as well as General Body Meeting of
the Society. That Appeal when listed on 9.3.2001, a
memo was filed to withdraw the appeal and an order
was passed permitting the same although the
deliberations of the General Body and that of the
Executive Committee of the Society were not placed
before the Court.
C) Auction of corner sites:
According to the petitioners Byelaw No.3 of
Annexure-C, Model byelaws provides for jurisdiction
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and area of operation to be confined to the territorial
jurisdiction of Bangalore Development Authority, for
short 'BDA'. It is asserted that in the absence of Rules
relating to allotment of corner sites in the byelaws of the
Society, it is the rules framed by the BDA in that regard
that was to be followed. It is alleged that the Society
issued pamphlets Annexure-K inviting bidders to
purchase corner sites with a condition that the bidder
should be a member of the Society who has not been
allotted any site. It is the further allegation of the
petitioner that the bids were not accepted and the
auction cancelled.
D) Allotting several sites to kith and kin:
Society comprising of several Directors who have
been allotted sites measuring 80 ft x 120 ft or 60 ft x 90
ft have got sites allotted to their children, close relatives
etc., under the guise of Associate Members though these
allottees are not employees of either the High Court of
Karnataka or of lower judiciary. Some allotments made
19
in favour of the kith and kin and relatives of the
Directors are tabulated in a statement and marked as
ANNEXURE-L.
E) Allotment of sites in the Kanakapura Layout to
members already holding sites in Judicial Layout:
Society formed a layout in Talaghatpura on
Kanakapura Road, Bangalore to provide sites to various
members of the Society who have not been allotted sites
in Judicial Layout. It is the allegation that the Society
clandestinely allotted or is making hurried attempts to
allot sites to members who have already been allotted
sites in Judicial Layout.
F) Giving up land over which the Society was in
possession:
It is stated that Society with an intention to
acquire the land bearing Sy.No.104/3 measuring 3
Acres and 20 Guntas situated in between the land
acquired by the Government for the benefit of the
members, after taking possession of the land filled up
20
the vast ditch and the same was included in the layout
plan by forming road etc., It is further stated that since
some persons attempted to trespass, the Society issued
paper publication and instead of taking action to
acquire the land delivered possession to the owners
accepting a certain sum of money towards filling of
ditch and allowed them to make use of the Road formed
by the Society and the amount so paid was not
accounted for.
G) Use of Civic Amenity Sites in the Judicial Layout
and absence of basic amenities:
It is the allegation of the petitioners that some
allottees have made use of the portion of the open place
meant for park despite certain preliminary orders in the
Writ Petition No.40994/2002 filed by the Judicial
Layout Residents and Site Holders Association
questioning preservation, protection and maintenance of
parks, civic amenity sites and other open space in the
Judicial Layout among other reliefs; and though a
21
Criminal Contempt case was instituted as CCC
No.87/2004, allottees constructed the houses and some
are attempting to complete the same and have made use
of the portion of the open place meant for park for using
it as their dumping ground, and have encroached storm
water drain block the same.
H) Failure of the Registrar of Co-operative Societies
to take action:
It is stated that the Society having adopted the
model bye laws has failed to adhere to the same and not
complied with the requirements of law, while the
executive committee committed serious irregularities
and illegalities, despite which the Registrar of Co-
operative Societies has not taken action though brought
to his notice by various member of the society on
several occasions.
12. The reliefs in the petition read thus:
a) Direct the Central Bureau of Investigation or
any other independent investigating agency to
investigate into the irregularity and illegalities
22
committed by the Respondents and to take
appropriate action in accordance with law.
b) Appoint an administrator or any other official
to manage and run the affairs of the Society until
a complete investigation is made of the affairs of
the Society;
c) Call for records in relation to the allotment of
sites to ‘Associate Members’ and details of
individuals who have been inducted into the
membership of the Society as Associate Members
and a true and correct record of the sums of
money collected from such Associate Members;
d) Declare that the Bye Law No.5 (c) and Bye Law
No.20 (A) of the Respondent No.1 Society as null
and void being inconsistent with the object and
purpose of the establishment of the Respondent
No.1 Society and the Constitution of India;
e) Declare the induction of all the associate
members by the Respondent No.1 as illegal and
cancel all the sites allotted to such associate
members and issue a writ in the nature of
mandamus directing the Respondent No.1 from
inducting or permitting any allotment of sites to
any person apart from a member of the Judicial
23
Department of the State in accordance with the
objects of the Respondent No.1 and in terms of
Bye Law No.10 of the Model Bye Laws of the
Respondent No.1.
f) Issue appropriate writ, order or directions
prohibiting the society from allotting sites to any
member who were allotted sites in the Judicial
Layout in the new layout formed which is
popularly known as Talagatpura Layout, and
Kanakapura Road Layout, Bangalore or in any
layout formed or proposed to be formed in future.
g) Declare that the corner sites allotted to the
various persons is against the bye law and the
same may be directed to be cancelled and
allotment of corner sites to be made by
conducting public auction;
h) Declare that sale deeds executed in respect of
sites formed in the northern portion of Sy.No.4(p)
are illegal and appropriate directions be issued to
cancel the transactions as null and void. Further
the allotment made to Krishnappa and his legal
representatives be declared void and appropriate
directions be issued to deliver vacant possession
of the land in Sy.No.4(p) on the southern side of
the road formed by the society connecting
National High Way No.7 and the judicial layout.
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i) Direct the Government to acquire the land
bearing Sy.No.104/3 A-2 measuring 3 Acres 20
Guntas by following the procedure under Land
Acquisition Act and Rules framed there under
and deliver possession of the same to the Society.
j) Pass any such other order(s) as this Hon’ble
Court deems fit and proper in the facts and
circumstances of the case, with costs, in the
interest of justice and equity.
12. Petition is opposed by filing statement of
objections interalia denying the allegations while
admitting the fact that Associate Members were
admitted to the Society in terms of model byelaws. It is
stated that the petition in the garb of public interest is
not maintainable and is not filed probono publico.
According to the Society, petitioners being beneficiaries
of allotment of sites have no bonafides and have sought
for the reliefs in the garb of public interest. In addition
it is stated that without arraigning as respondents
members who have been allotted sites and in whose
25
favour sale deeds conveying the sites are executed some
twelve years in the past cannot maintain the petition. It
is further stated that Byelaw 5(C) and 20(A) provide for
induction of Associate Members and since majority of
members are accepted the model byelaws since adopted
by a resolution of the Society, same cannot be
questioned. It is next stated that the grievances of the
petitioners are more in the nature of disputes between
the members and the society and hence, have an
alternative and efficacious remedy of dispute resolution
under Section 70 of the 'KCS Act'. The Society, it is
said, is not a State within the meaning of Article 12 of
the Constitution of India, hence no writ lies against the
Society. It is asserted that in SUBRAMANI -vs- UNION
OF INDIA1, it is observed that allotments made contrary
to Byelaws, cannot be called in question by invoking the
writ jurisdiction under Article 226 of the Constitution
1 (AIR 1995 KAR 3139 paragraph 31)
26
and if two views are possible on the construction of the
Byelaws, it is only guidelines of the Cooperative
Societies and not a law that the Court can set-aside the
allotment.
13. The allegations set out in the memorandum of
writ petition are specifically denied. According to the
respondent the order dated 4.10.1993 of the State
Government Annexure-R1 directs the adoption of new
model byelaws, while the Society by resolution
28.1.1994 Annexure-R2 adopted the model byelaws. It
is stated that Annexure-R4 contains the details of the
membership of the petitioners, the sites allotted, dates
of registration of the sale deeds and the amount paid.
As regards J.M.Krishnappa's land, Annexure-R5 is said
to be the order dated 31.7.2004 in LAC No.221/1999
and the calculation of the compensation amount in
Execution case No.1/2005 is at Annexure-R6. The RTC
pahani Annexure-R7, in respect of Sy.No.4/P1 and
27
4/P2 measuring 2 acres for the year 2008-09, it is said,
was certified to stand in the name of the Society. It is
further stated that the Registrar of Cooperative Societies
issued a notice followed by an enquiry and a report
dated 11.7.2008 Annexure-R8 pursuant to which the
Society filed representations for cancellation of the sale
deeds and therefore, the allegation that 35 sites were
left over in favour of late Subbaiah was not true. The
Society further states thus:
“It is true that the resolution has been
passed to leave 34 sites but as a matter of
fact 42 sites have been left.”
14. The Registrar of Cooperative Societies, it is
said, by order dated 7.11.2008 directed the Society not
to alienate the sites Annexure-R9.
15. As regards allotment of kith and kin, it is
stated that the allegation was subject matter of enquiry
under Section 64 of 'KCS Act', which, on enquiry, was
28
rejected. It is further stated that the Committee of
Management of the Society was superseded pursuant to
the enquiry dated 29.2.2008 and a report
Annexure-R10.
16. As regards the allegation over land in
Sy.No.104/3A2 belonging to H.R.Hanumantha Raju,
was not subject matter of acquisition by the State and
that it remained agricultural land as evident from the
RTC extract, Annexure-R11. It appears that the order of
the State Government appointing an Administrator
when called in question in W.P.2081/2008 was quashed
by order dated 29.3.2008 Annexure-R12.
17. In the Additional Statement of Objections of
the Society filed on 11/11/2009, it is further contended
that the Bye Laws registered on 11/8/1983 were altered
and the Model Bye Law were adopted by the Society vide
Amendment No.JRB/AMENDMENT/139/1993-94 dated
29
9/2/1994 which included Bye-Law No.5(c) and 29 (A).
The Registrar of Co-operative Societies in exercise of his
power U/S.30 of the Act vide order dated 22/3/1994 in
No.HSG:258:HRS:92-93 ANNEXURE R-13 directed all
the Housing Building Co-operative Societies to adopt
this Model Bye-law so amended vide GO No.hud 29
MNJ 93 (P) ANNEXURE R-14. This order was
challenged by Housing Co-operative Societies including
1st Respondent –Society in WP 7869-7871/1994 which
came to be dismissed on 4/8/1997 ANNEXURE R-15.
Since the Petitioners having knowledge of the adoption
of the model bye-law have not challenged it, the said
Amendment has attained finality, hence the delay of 15
years in filing the writ petition is fatal.
18. Petitioners filed on 5/2/2010 a rejoinder to
the Statement of objections filed by the 1st Respondent
– Society stating that the Judicial layout located at
Bellary road was formed pursuant to acquisition
30
proceedings initiated by the Government for the public
purpose of providing sites to the employees of the
Karnataka Judicial Department, making the position
clear that the public purpose behind the acquisition of
lands was to ensure that the employees of the Judicial
Department are allotted sites. The Division Bench in
NARAYANA REDDY –vs- STATE OF KARNATAKA2
after considering the various illegalities committed by
several societies concluded that where in the guise of
allotment, sites are sold to either bogus members or in
favour of intending purchasers by enrolling them as
Associate Members for the purpose, and making money
by those in-charge of the Societies is illegal. The
Division Bench Judgment was upheld by the Supreme
Court in HMT HOUSE BUILDING CO-OPERATIVE
SOCIETY –vs- SYED KHADER3. The Bye Laws are
2 ILR 1991 KAR 2248
3 ILR 1995 KAR 1962
31
binding between the society and it members as stated in
the dicta of the Supreme Court in CO-OPERATIVE
CREDIT BANK –vs- ADDITIONAL INDUSTRIAL
TRIBUNAL4 and therefore the contention that they are
merely guidelines is completely without any legal
foundation. With regard to the Maintainability, the
Petitioners state that owing to the frittering away of
assets of the Society to persons unconnected with the
Judicial Department of the State, bonafide members
who have satisfied all the requirements of the Bye Laws
have been disentitled to sites and that there cannot be
any greater public interest than in ensuring that the
interests of all other persons are protected from the
illegalities of the Society and its officer bearers. In
determining the question of public interest, it is trite to
consider the issues raised and the relative importance of
the said issues. In ALL INDIA MANUFACTURERS
4 AIR 1970 SC 245
32
ORGANISATION –vs- STATE OF KARNATAKA, it is
said, this Court accepted an extreme position that even
where a person has been put up by one of the interested
parties as a public interest litigant, if there was larger
public interest, a court could interfere in a public
interest petition, which was approved by the Supreme
Court in STATE OF KARNATAKA –vs- ALL INDIA
MANUFACTURERS ORGANISATION5.
19. With regard to the alternative remedy under
'KCS Act', the petitioners state that they are the
representatives of public seeking redressal of obvious
illegalities. Section 70 of the Act can be resorted to in
specific cases by a person who is aggrieved and hence
petition is initiated in public interest, which is not
merely a question involving the management of the
Society but of frittering away land acquired for a public
purpose. It is settled law that the “alternate remedy is
5 (2006)4 SCC 683 Para 64
33
a rule of convenience and not a rule of law”, and the
extraordinary jurisdiction of this court is never whittled
by the existence of an alternate remedy.
20. Having heard the learned Senior counsel for
the parties, perused the pleadings, the first submission
of the learned Senior counsel for the Society that the
writ petition is not maintainable as a public interest
litigation and since no writ lies against a Cooperative
Society is far from acceptance. The Apex Court in
VIPULBHAI M.CHAUDHARY -vs- GUJARAT
COOPERATIVE MILK MARKETING FEDERATION
LIMITED AND OTHERS6 having considered the
definition of 'Co-operative' in the International
cooperative Alliance Statement on the Cooperative
Identity adopted in Manchester, United Kingdom on
23.9.1995 coupled with the constitutional aspirations
on the concept of cooperative Societies after the 97th
6 (2015) 8 SCC 1
34
amendment to the Constitution of India w.e.f.
12.1.2012, has set out in the statement of objects and
reasons when read in conjunction with Part-IX-B of the
Constitution and Articles 243ZH, 243-ZJ and 243-ZT
observed at paragraph 14 thus:
“14. The cooperative societies having been
conferred a constitutional status by the 97th
amendment, the whole concept of cooperatives
has undergone a major change. In 1993, the
local self governments, viz., Panchayats and
Municipalities were also given constitutional
status under part IX and IX-A of Constitution of
India by the 73rd and 74th amendments. The
statement of objects and reasons would show
that the Constitution wanted the local bodies to
function as vibrant democratic units of self
government. After two decades, cooperative
societies were given the constitutional status by
including them under part IX-B. The main object
for the said amendment was also to ensure 'they
are autonomy, democratic functioning and
professional management'.
At paragraph 42, it was observed thus:
“42. It may be seen that all these decisions
35
dealt with the pre-ninety-seventh amendment
status of the cooperative societies. The
amendment providing constitutional status to
the societies has brought out radical changes
in the concept of cooperative societies.
Democratic functioning and autonomy have
now become the core constitutional values of a
cooperative society. Such societies are to be
registered only if they are founded on
cooperative principles of democracy, equality,
equity and solidarity.”
21. In the light of the aforesaid decision of the
Apex Court, the submission that a writ petition against
a cooperative society is not maintainable, deserves
rejection.
22. Although it is argued that the decision in
Subramani’s case (supra1), at paragraph 15 of the
36
Judgment that there were two sets of Bye-laws but was
accepted by the learned counsel, as applicable to the
facts of the case was the Byelaws framed in 1983 since
the Model Bye-laws were stayed by the Court, coupled
with the finding at paragraph 26 that there is a public
purpose in acquiring lands for providing house sites to
employees of the Judicial Department, nevertheless
declined to accept the plea that allotment of 39 sites to
Judges by the Society would not vitiate the entire
acquisition proceedings. At paragraph 31, it is observed
that Clause (7) of the Bye-laws by no stretch of
imagination could include the Judges of the High Court
or Supreme Court (sitting, transferred or retired) and
assuming for a moment certain Judges have been
allowed to become members of the Society, it may be an
irregularity in the conduct of the business of the
Society. It is further observed that while exercising
jurisdiction under Article 226 of the Constitution the
Court cannot go into the question of allotment of sites to
37
Judges since no writ lies against a Co-operative Society
as it is not a State under Article 12 of the Constitution.
It is in this backdrop that the Division Bench did not
exercise jurisdiction under Article 226 of the
Constitution.
23. Regard being had to the decision of the Apex
Court in Vipulbhai’s case (supra6) and the changed
circumstances of amendment of the Constitution of
India, in our opinion, the decision in Subramani’s case
(supra1)to decline interference by exercise of Article 226
of the Constitution is inapplicable.
24. A feeble attempt is made that the petitioners
having asserted to be persons aggrieved hence not
probono publico, coupled with the nature of omnibus
reliefs, petition is not maintainable. It must be noticed
that the first three petitioners were Judges of the Court
holding constitutional positions, would have a duty cast
38
to bring to fore illegalities committed by the Committee
of Management of the Society in the matter of allotment
of sites and induction of Associate members contrary to
the ‘KCS Act and Model Bye-laws’ framed by the State.
In CO-OPERATIVE CREDIT BANK’S CASE (supra4),
the Supreme Court noticing that the Bye-laws are
binding between the Society and its members, declined
to accept the contention that they are merely guidelines.
The fritting away of valuable assets of the Society to
persons unconnected with Judicial Department of the
State while bonafide members satisfying all the
requirements of Bye-laws when not allotted sites, as
alleged in the petition, it cannot be said that there is no
greater public interest which required to be protected.
The lis brought before Court, raises relative importance
in public interest. In ALL INDIA MANUFACTURING
ORGANISATION’S case (supra5), an extreme position
was accepted that even where a person has been put up
by one of the interested parties as a public interest
39
litigant, if there was larger public interest, Court could
interfere in a Public Interest Litigation. In that view of
the matter, it cannot be said that the petitioners were
not acting probono publico. The further submission that
the petitioners having not made a demand and there
being no refusal of the Society having no legal right, a
writ of mandamus cannot ensue, and further an
alternative remedy is available, cannot be countenanced
having regard to the fact that the Office bearers of the
Society having violated the rule of law cannot be heard
to contend that they should have been notified before
hand. As regards alternative remedy, it is well
established law that it cannot be an embargo for the
exercise of extraordinary writ jurisdiction if illegality is
palpable from the pleadings, particularly in the light of
admissions by the Society in its pleadings.
25. Learned counsel for the parties submit that
the substantial disputes between the parties are as set
out in the comparative statement of averments in the
40
petition and response in the statement of objections
which reads thus:
COMPARATIVE STATEMENT OF AVERMENTS IN THE PETITION AND RESPONSE IN THE STATEMENT OF
OBJECTIONS
Property allotted to J.M. Krishnappa: 9.1. Under the acquisition proceedings among other areas, as stated earlier, the Land Acquisition officer also delivered possession of Sy.Nos 4 (p) admeasuring about 2 acres, Sy No.3 measuring about 1 acre and 5 ½ guntas and Sy.No.4 (p) measuring about l acre 12 guntas of land. One J.M. Krishnappa, the owner of the land bearing Sy.No 4 (p) measuring 2 acres situated in between the Bangalore and Hyderabad National High way and the railway track, filed a writ petition questioning the acquisition of his land but the writ petition was subsequently withdrawn. Thus acquisition of this land had become perfectly valid. The Society has formed a metalled approach road leading to the layout from the National High Way No 7 almost on the middle of this land leaving two portions on either side of this approach road as shown in the layout plan for
Paragraph 14: It is submitted that 2 acres of Mr. J.M. Krishnappa's land has been acquired out of which 25 guntas has been utilised for the formation of the road. It is submitted that the balance is still vacant. It is submitted that the balance is still vacant. It is submitted that LAC No. 221/1999 was filed by him for grant of compensation under Section 30 and 31(2) of the Land Acquisition Act. It is submitted that the reference court was pleased to hold that he is entitled for a compensation of Rs. 1,96,800/- with an interest of 9% from the date of taking possession of the acquired land for a period of one year and thereafter entitled for 15% interest per annum till deposit. The copy of the order dated 31.07.2004 passed in LAC No. 221/1999 is enclosed herewith as Annexure R-5. It is submitted that subsequently
41
future development. It is reliably learnt that a portion of the land lying on the left side of this road as one enters the layout from the National High Way i.e., on the southern side, approximately measuring 500 feet x 60 feet is said to have been handed over to the said J.M. Krishnappa. The said Mr. Krishnappa has already received compensation. That being the position, the society could not have allowed the said Krishnappa to occupy the land and the Society had no jurisdiction to release the same in his favour. The said portion of land has been now given to some other person to run a Dhaba in that land by Krishnappa. This was done obviously for favour and consideration. 9.2 It is further submitted that the other portion in Survey No 4 (P) lying on the right hand side as one enters the layout from the National highway i.e. Northern side of the land has been in possession of the society till recently. The society has made this portion into sites and some sites were sold to the public without even calling for tenders or publishing the proposed sale in the news papers and other media for the information of the general public. These sale transactions were clandestinely done by some of the Directors of the Society
Execution Case No. 1/2005 came to be filed for recovery of a sum of Rs. 1.38,500/- pursuant to which the society deposited the said amount before the Court of City Civil Judge at Bangalore in execution case No. 1/2005. The copy of the memo for having paid the said amount is enclosed herewith as Annexure R6. It is submitted that the RTC of Sy. No. 4P to an extent of 2 acres is standing in the name of the respondent society. The copy of the RTC extracts of Sy No. 4/p1 and 4/p2 measuring 2 acres for the period 2008-09 is enclosed herewith as Annexure R-7.
42
which action is contrary to the provisions of the Land Acquisition Act. The land is extremely valuable as it abuts National Highway No.7. However, transactions on paper show the subsidized value at which members are allotted sites. This route is adopted to make money at the cost of the interests of the Society and its members. It is learnt that the general body has not even been authorized to sell the site to outsiders the entire transaction is illegal, opposed to bye laws of the society and the sales are liable to be set aside as void ab initio. Property belonging to Late
Subbaiah:
9.3 The lands bearing Survey Numbers 90 Sy No,103/3, SyNo 3/2 and another Survey number in all measuring about 12 acres belonging to one Late Subbaiah and his sons of Allalasandara and Iakkur plantation Village were acquired by the Government for formation of judicial layout in accordance with law. After completing the acquisition proceedings compensation was paid to the owners. Thereafter the Society illegally passed a resolution to allot 34 sites in favor of Subbaiah and his legal representatives of different dimension as detailed hereinafter.
With regard to the averments mentioned in para 9.3 the Registrar of Cooperative Societies was pleased to issue notice pursuant to which enquiry was done and a report under Section 68 was submitted on 11.07.2008. The copy of the report dated 11.07.2008 of the Joint Registrar of Cooperative Societies Bangalore is enclosed herewith as Annexure R-8. Pursuant to the same the Respondent herein filed for cancellation of the sale deeds.
43
These allottees are neither ordinary member nor they are even associate members of the society. Even the bye law was not amended when these sites were given to them. In this connection a pamphlet was published during the election indicating the names of the allottees and dimension of the sites allotted which is hereby produced and marked as Annexure E. 8 sites, measuring 80' x 120’ feet. 2 sites, measuring 50' x 80’ feet 24 sites, measuring 40' x 60’ feet.
From this it is clear that these allottees are enriched by securing large number of well developed sites at the cost of the society and they are now millionaires at the cost of the other valid members of the Society and such approach is contrary to well established principles of acquisition. Needless to say that the said erstwhile owners of land have also taken compensation for the entire land as such they are not entitled for any site from the society since they are not its members. It is also not known whether they paid the value of the sites allotted to these persons. All this has resulted in colossal loss to the Society and to its members. Property belonging to Papaiah
and Muniswamappa:
It is submitted that the Registrar of Co-operative Societies was pleased to pass the order directing not to alienate the sites in question. It is not correct to state that 35 sites have been left in favour of Late Subbaiah. It is true that the resolution has been passed to leave 34 sites but as a matter of fact, 42 sites have been left. It is submitted that subsequently the society has taken steps not to do the same as the same was not in the interest of the members of the Society. The copy of the order passed by the Additional Registrar of Co-operative Societies dated 07.11.2008 is enclosed herewith as Annexure R9.
44
9.4 The Government acquired among other properties, Survey No 91/5 measuring 2 acres 30 guntas and Sy.No. 92/2A measuring 2 acres 39 guntas, 5 guntas of kharab and 3 guntas out of which 1 gunta kharab and 1 acre 22 guntas out of which 3 guntas are kharab belonged to one Papaiah and one Muniswamappa. Subsequently Papaiah filed a writ petition bearing No.3995/1989 and Munswamappa filed W.P. No 6156/1989 questioning the acquisition of their properties referred to above raising the contention that Section 6(1) notification was beyond one year of the Section 4(1) notification and that the award was passed beyond 2 years after the Section 6(1) notification and therefore in view of Section 11 of the Land Acquisition Act, the entire proceedings of acquisition of the land stood lapsed. In the petition the said Papaiah and Munswarnappa arrayed the State Government, Deputy Commissioner, Land Acquisition Officer and the Society herein as parties. During pendency of the writ petition Munswarnappa expired and hence his legal representatives were brought on record.
It is submitted that with regard to the property belonging to Papaiah the lands which have been acquired by the Government have not been left in his favour. As there were certain disputes. Out of the total extent of 4 acres 2 acres of unacquired land which was south to be purchased by way of agreement has been left out in his favour in order to amicably settle the matter. With regard to the property of Muniswamappa it is true that 13 sites have been left to him in order to amicably resolve the dispute and in order to avoid future litigation/ The motive attributed to the Society and the averments in paragraph 9(8) of the writ petition is totally baseless and the same is hereby denied. The order dated 9.3.2001 which has been referred to in Annexure – J to the writ petition cannot be questioned in the present petition. The statements contained in paragraph 9(8) of the petition that "both the parties to the Writ Appeal No. 4283/1995 committed criminal contempt of this Hon'ble Court and "they are liable to be proceeded for contempt of the court" it is regretted, cannot also be
45
9.5 The learned single Judge of the Hon'ble Court vide order dated 17.11.1992 was pleased to reject both the grounds raised by the petitioners therein and consequently dismissed both the petitions by a common order. Copy of the order is marked as Annexure F. The said order was questioned by the legal representatives of the deceased Muniswamappa in W.A.4283/1995 and the said writ appeal was dismissed by the Division bench vide order dated: 17.11.1995 on the ground of delay. At this stage it is relevant to mention that Papaiah did not question the order of the Learned Single Judge dated 17.11.1992. Therefore the order of the learned Single Judge has attained finality so-far as Papaiah was concerned. 9.6 However the order of the Division Bench dated 17.11.1995 was thereafter questioned before the Supreme Court in SLP No (c) 398/1998 and the Hon'ble Supreme Court was pleased to set aside the impugned order and directed this Hon'ble Division Bench to decide the W.A.4283/95 on merits 9.7 It is submitted that the W.A.4283/95 was hence restored on the file of Hon'ble Court and the case was posted for hearing on merits. At that stage the
countenanced, in as much as the professed public interest writ petition cannot be converted into a criminal contempt petition for which even a period of limitation is prescribed under the Contempt of Court Act, 1971. Therefore at this distance of time, the petitions cannot, in a collateral proceeding question an order passed on 09.03.2001.
46
Appellants and the Society, filed a compromise application reporting settlement of the dispute and sought leave of the Court for disposal of the matter in terms of the compromise application. On this compromise application the Division bench passed an order on 21.8.2000, the operative portion of which reads as under. "There are 9 legal representatives and they could be allotted only one Site in lieu of the land acquired from Muniswamappa. We fail to understand as to how 13 sites are being allotted in lieu of the claim made by Muniswappa in addition to the compensation paid for the land acquired. We decline to record the compromise as it is not in the interest of the Society. Copy of this order be placed for discussion and deliberation before the executive committee as well as before the General Body meeting of the Society. " The order of the division bench dated 21.08.2000 is produced herewith as Annexure G. 9.8. It is pertinent to mention that the said direction was not complied with and the matter was not posted before this Hon'ble Court for some time. On 9.3.2001, the case was posted before the division bench of this Hon'ble Court wherein one of the appellants, Shri Marigowda filed a memo of withdrawal of the appeal
47
reporting that the matter was settled out of Court and requesting the Court to dismiss the appeal as withdrawn. The copy of the said memo dated 9.3.2001 is produced herewith as Annexure H. This Hon'ble court was pleased to take the memo on record and dismissed the writ Appeals as withdrawn. The said order dated 9.3.2001 is produced as Annexure J. This order came to be passed by the division bench as the earlier order was not brought to the notice of the division bench where the said appellant also was a party to the compromise application and there is nothing to indicate that the order dated 21.8.2000 was complied with. On the other hand the Petitioners have come to know that the earlier compromise was given effect to by allotting 13 sites to the legal representatives of Muniswamappa which was declined to be recorded by the Division bench as referred to above. This was done deliberately with a view to avoid the directions of the Division Bench. Thereby both the parties to the W.A.4283/95 committed criminal contempt of this Hon'ble High Court. They are liable to be proceeded for contempt of the Court. This shows the conduct of the President, Secretary and other Directors of the Society in suppressing the material
48
particulars from the Court. 11. Allotting several sites to the kith and kin of Directors:
11.1 The Society is comprised of several directors who are in charge of the day to day management of the affairs of the Society. Each of the directors have been allotted sites measuring 80x 120' or 60x90' dimensions in the Judicial Layout. In addition to the sites allotted to the President, Vice President, Secretary / Clerk and some of the Directors got allotted sites to their children and close relatives of different dimensions in the Judicial Layout under the guise of Associate members, though these allottees are not employees either of the High Court or of the lower judiciary. Some of the members got allotted sites in their names, sold the same for higher price and got allotted sites in the name of their kith and kin thereby depriving the benefits to other needy members. Some of the allotments which is believed to have been made in favour of the kith and kin and relatives of the Directors are tabulated in a statement which is produced herewith as Annexure-K. These allotments are against bye-law of the society and the Co-Operative Societies Act & rules which deserve to be set aside.
16. Regarding Para 11.1 The statements contained in paragraph 11.1 being too vague to be either countenanced or dwelt upon undelivered by the Society for want of details and particulars thereof it is respectfully submitted that the Society is unable to deal with the said contents for want of the required particulars. Such an allegation of allotment to kith and kin was also the subject matter of the enquiry under Section 64 of the Act, and has been rejected as unfounded. The petitioners are fully aware of the same. It is submitted that a detailed enquiry has been conducted against the respondent society and various aspects including the alleged allotment of sites to kith and kin of the members of the respondent society and the respondent society was superceded pursuant to the enquiry dated 29.02.2008. The copy of the enquiry report dated 29.02.2008 is enclosed herewith as Annexure R-10. As can be seen from page no. 23, allegation No.6 of the report dated 29.02.2008, it has been
49
Some of the members got allotted a site in their names and sold the same. Further they were given sites either in their name or in the name of their kith and kin.
categorically stated that the allegations have not been proved.
26. As the grievance of the parties is directed
mainly on territorial jurisdiction of the Society and
inducting Associate members, it would be apt to extract
relevant portions of the Byelaws as certified in the year
1983, Annexure-B, as well as the Model Byelaws,
Annexure-C.
27. In Subramani’s case (supra1), the Coordinate
Division Bench extracted Clause (7) of the Bye-laws of
the 1983 which reads thus:
“7. Eligibility for membership:
Persons residing in Bangalore and interested
in the Development of the Institution or those
persons who are working in the High Court or
any Court coming under the jurisdiction or
High Court, Bangalore and Society and the
persons retired from the service and residing in
50
the jurisdiction of the Society permanently
(including Judges) are eligible for the
membership. Executive Committee
(Panchayatadaru) is having full powers to
accept or reject the applications received for
membership.”
In Annexure-B, Byelaw No.8(2) reads thus:
“ The persons who like to become members of
this society shall not possess site or building in
his/her name or in the name of his/her family
members within the Bangalore City
Corporation Area and within the Bangalore
Development Authority jurisdiction, i.e. The
names mentioned in the service record of the
employee is treated as his 'FAMILY”.
In Annexure-B, Bye-law (3) ‘Administration and
jurisdiction’ reads thus:
“ The jurisdiction of this Society is limited to
the jurisdiction of Bangalore Development
Authority.”
51
28. In Annexure-C, Byelaw No.3 reads thus:
“3. AREA OF OPERATION:
Jurisdiction of Society shall be confined to the
Bangalore Development Authority (Development
Authority/ City Corporation Blocks/ City
Corporation Municipality/ Notified Area / Local
Planning Area/ Revenue Village / Revenue Taluk.
Byelaw No.4 reads thus:
4. OBJECTS:
(a) To promote the economic interest of its members and
to encourage thrift savings and self-help.
(b) To raise funds required for achieving the objects of
the Society.
(c) To acquire lands and form layouts on the lands
acquired and release sites to the members of the society
in accordance with the norms laid down by Government
of Karnataka for such purpose.
(d) To undertake construction of houses/ flats/
apartments on the lands acquired/ purchased by the
society for the benefit of members subject to approval by
52
competent authority.
(e) To make loans to the members for the construction
of new dwelling houses for extension / repairing their
existing houses and for purchasing built houses.
(f) To construct building or take up works for common
utility of the members.
(g) To manage, maintain and administer the property of
the society.
(h) To manage, maintain of sites or houses for the
members from Development Authority / C.I.T.B
Housing Board/ any other approved authority.
(i) To undertake such activities as are necessary or
expedient for the attainment of the objects of the Society
specified in these Bye-laws.
Bye-law No.5 reads thus:
5. MEMBERSHIP:
The membership of the Society shall consist of:
(a) Members
(b) Nominal members
(c) Associate members
53
Bye-law No.6 reads thus:
6. QUALIFICATIONS FOR MEMBERSHIP:
Any person who is above the age of 18 years and who is
competent under Section 11 of the Indian Contract Act
of 1872 (Central Act II of 1872).
Bye-law No.10 reads thus:
10. RIGHTS OF MEMBERS:
All members shall be eligible to avail the benefits
as per the objectives under bye-law No.4 subject to the
condition, that a member shall be eligible for allotment
of site/ flat/ house only if he fulfils the following
requirements:
(a) he / she does not already own a site a plot
or house/ flat / apartment in his / her own
name or in the name of any other member of
his / her family in the Corporation limits /
Development Authority limits / Municipality
limits in whose limit the Society is situated
(Explanation: /'Family' means and includes
husband, wife, sons having no independent
54
source of income, unmarried daughters and
person / persons dependent on the members);
(b) he / she is an employee of Judicial
Department, the organisation or Government
Department / service for which the Society has
been organised and has put in a minimum
continuous or intermittent service of 5 years in
Karnataka.
Byelaw No.20-A reads thus:
20-A. ASSOCIATE MEMBER:
An associate member may hold shares but shall
not be entitled to become an officer of the society. He
shall hold atleast one share. He shall have all the rights
and privileges of a member in the society except voting
power.”
29. In the light of the aforesaid Bye-laws, during
the year 1983 when the Society was registered as a
Cooperative institution under the 'KCS Act', the
territorial jurisdiction of the Society was limited to the
jurisdiction of the BDA, while the eligibility for
membership was in respect of persons residing in
55
Bangalore and interested in the development of the
Institution, or employees of the High Court or any
employee working under the control of the High Court of
Karnataka and the persons retired from service and
residing in the jurisdiction of the Society permanently
including Judges, who are not in possession of sites or
building in his/her name or in the name of his/her
family members in Bangalore City Corporation area and
within the BDA jurisdiction, while the names mentioned
in the service record of the employee is treated as his
family. Bye-law No.10 provides for only one class of
member.
30. The State Government during the year 1993-
1994 directed all House Building Cooperative Societies
to amend their Byelaws to fall in line with the Model
Bye-laws, Annexure-C, whence the Society by resolution
dated 28.1.1994 Annexure-R2 adopted the Model
Byelaws. Byelaw No.3 provides for jurisdiction of the
56
Society to be confined to BDA (Development
Authority/City Corporation Blocks/City Municipal
Council/Notified Area/Local Planning Area/Revenue
Village/Revenue Taluk). It included two other classes of
members, viz., nominal and associate, while the
qualification for membership was open to any person
above age of 18 competent under Section 11 of the
Indian Contract Act, 1872 (Central Act II/1872). The
rights of the members as regards eligibility for allotment
of site/plot/house is that he or she does not already
own a site/plot/house/apartment in his or her own
name or in the name of his or her family members
within the BDA limits or Municipal limits or within the
limit of the Society and family is said to mean and
include husband, wife, sons having no independent
source of income, unmarried daughters and
person/persons dependent on the members; he or she
is an employee of the Judicial Department; Organisation
or Government Department/ service for which the
57
Society has been organised and has put in minimum
continuous or intermittent service of five years in
Karnataka.
31. In Byelaw 20-A an Associate Member is said
to have all the rights and privileges of the member in
the Society except voting power.
32. It is obvious that from the year 1993-94
onwards two new classes of members were included i.e.,
nominal and associate. While territorial jurisdiction of
the Society remained the same. The eligibility for
allotment of site/plot/house, was also identical in both
the Byelaws, Annexures-'B' and 'C'.
33. An Associate Member would have the rights of
members as provided in Clause (10) of the Model
Byelaws, Annexure-C requiring the member to be an
employee of the Judicial Department or the
Organisation or Government Department, the services
58
for which the Society has been organised and has to put
in continuous or intermittent service of minimum five
years in Karnataka.
34. The material on record discloses large number
of persons being inducted in the Society as Associate
Members although it is not shown before Court as to
whether they complied with the norms regarding
eligibility under the Model Byelaw No.10(2). It is also a
matter of record, since admitted, that large number of
sites are allotted to Associate members and family
members of land losers despite receiving the
compensation on acquisition of their lands. In
Subramani’s case at paragraph 31 the Division Bench
having extracted Clause (7) of the Bye-laws of 1983
relating to eligibility for membership observed that by
no stretch of imagination can include the Judges of the
High Court or Supreme Court (sitting, transferred,
retired).
59
35. Similar such allegations when brought about
by way of a petition before the Registrar of Cooperative
Societies led to an enquiry under Section 64 of the 'KCS
Act' and a report dated 29.2.2008 Annexure-R10 under
Section 68, issuing certain directions to the Society for
compliance within a timeframe which was responded to
by the Society citing the pendency of this petition.
36. For our purpose, it is sufficient to extract Clause
(a) of Subsection (1) of Section 16 of the 'KCS Act' which
runs thus:
16. Persons who may become members:
1[(1)Subject to the provisions of Section 17, no person
shall be admitted as a member of a co-operative society
except the following namely: -
2[(a) an individual who needs the services
of such co-operative society 3[and is
residing in the area of the operation of the
society] and is competent to enter into
contract under the Contract Act, 1872
60
(Central Act IX of 1872);]
4[(a-1) a depositor;]
(b) any other co-operative society; (c) the State Government or the Central
Government;
(d) the Life Insurance Corporation of India, State Warehousing Corporation and such other institutions as may be approved by the State Government;
(e) a firm, a company or any other body corporate constituted. under any law for the time being in force including a society registered under the Karnataka Societies Registration Act, 1960 (Karnataka Act 17 of 1960);
(f) a Market 5[Board] established under
the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 (Karnataka Act 27 of 1966);
(g) a local authority.
Explanation: For the purpose of this clause, local authority means, a Municipal Corporation, Municipal Council, Town Panchayat, Zilla Panchayat, Taluk Panchayat or Grama Panchayat constituted under any law for the time being in force.;]
2 Clause (a) substituted by Act No.6/2010 dt.
30.3.2010 and shall be deemed to have come into force w.e.f. 3.11.2009- Previous Reference (a) an individual competent to contract under the Contract Act 189972 (Central Act IX of 1872);
61
3 Inserted by Act 3 of 2013 w.e.f. 11.2.2013.
37. Section 18 of the 'KCS Act' provides for
nominal or associate members and reads thus:
18. Nominal or Associate Members: 2[(1) Notwithstanding anything, contained in Section 16, as co-operative society may admit-
(a) any individual or the Karnataka State Ware House Corporation as a nominal or associate member;
(b) any banking company as a nominal member. Explanation: In this sub-section 'banking
company' shall have the same meaning as is assigned to it in the Deposit Insurance Corporation Act, 1961 (Central Act 47 of 1961)
3[(c) any firm, company, co-operative society, or
any body or corporation constituted by or under any law for the time being in force, as a nominal or associate member;]
4[(d) self help group as nominal members] 5[Provided that the number of associate members
under clause (a) in any Co-operative Society shall not exceed fifteen percent of the total membership of the society. However, in case of Co-operative Societies already having more than fifteen percent of their total membership as associate members, the excess associate members shall be either made as member, if
62
eligible under the section 16 or shall be removed from the associate membership within six months from the date of commencement of the Karnataka Co-operative Societies (Amendment) Act, 2014.)
(2) A nominal member shall not be entitled to any
share in any form whatsoever in the assets or profits of the society and a nominal member who is an individual shall not also be entitled to become an 6[office bearer] of the society.]
(3) An associate member may hold shares but shall not be entitled to become an *1[office bearer] of the society.
(4) Save as provided in this section, a nominal or
associate member shall have such privileges and rights of a member and be subject to such liabilities of a member, as may be specified in the bye-laws of the society.
((*2. “Sub-sections (1) and (2) substituted by Act 39 of 1975, w.e.f. 23-9-1975
*previous reference: (1) Notwithstanding anything contained in Section 16, a co-operative society may admit any individual as a nominal or associate member.
(2) A nominal member shall not be entitled to any share, in any form whatsoever, in the assets or profits of the society to become an officer of the society.
3. Clause (c) Inserted by Act 25 of 1998 w.e.f. 15.8.1998
4. Clause (d) Inserted by Act 24 of 2001, w.e.f. 13.8.2001
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5. Proviso Inserted by Act 35 of 2014, w.e.f. 6.9.2014
6. Substituted by Act 25 of 1998, w.e.f. 15.8.1998 for the word “officer”.
*1. Substituted by Act 25 of 1998, w.e.f. 15.8.1998 for the word “officer”. ))
38. From the aforesaid provisions it is amply clear
that to be admitted as an Associate member of a
cooperative society, the person should be an individual
who needs the services of such Cooperative Society
residing in the area of operation of the Society and
competent to enter into a contract under the Contract
Act, 1872. The proviso in Section 18 imposes a
restriction of the number of Associate members in a
Cooperative Society not to exceed 15% of the total
membership of the Society and in case the Society
already has more than 15% of its total membership as
Associate members then the excess Associate members
are required to be made as a member, if eligible, under
Section 16 or shall be removed from the Associate
membership within six months from the date of
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commencement of the Karnataka Cooperative Societies
(Amendment) Act, 2014.
39. Although the period fixed in the proviso has
expired, nevertheless the State Government by Order
dated 1.4.2015 extended time by one year for
compliance and thereafterwards by order dated
6.4.2016 extended time by another six months, copies
of those orders are annexed to the memo dated
27.4.2016 filed by the Society.
40. In the light of the aforesaid extension of time,
the Society is required to comply with the proviso within
the period extended.
41. The affidavit dated 23.4.2016 of the President
of the Society states that as on 20.4.2016, the total
number of regular members of the Society is 3487,
while Associate members 1432 and that 223 Associate
members have been allotted sites in the Judicial Layout
at Allalasandra, Yelahanka Hobli. It is further stated
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that Original Suits are instituted by the Society in
respect of 15 such sites allotted to Associate members
pursuant to cancellation of allotment pending
adjudication. It is further stated that 12 out of 223
sites allotted have been handed over to the BBMP to
make up the deficiency in the civic amenity area, while
additionally 122 sites are allotted to Associate members
who were erstwhile land owners from whom the Society
purchased lands by agreement and with whom
compromise was entered into before the Civil Court to
resolve the disputes.
42. The further statement in the affidavit is that
in the layout on Kanakapura Road (Talaghatta pura
village), Uttarahalli hobli, Bangalore South taluk, 117
sites are allotted to 117 Associate members and that
therefore, 462 sites are allotted in favour of Associate
members in both the layouts put together. According to
the deponent the allotments were made long prior to
Karnataka Act No.35/2014 coming into force w.e.f.
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6.9.2014. Additionally it is stated, on oath, that no
allotments are made by the Society to any Associate
member after the interim order dated 18/7/2007
passed in the petition.
43. At this stage we think it appropriate that if it
appeals to the conscious of the members, associate
members, nominal members inducted as such, in the
Society and allotted sites, feel that they were disentitled
to membership or allotment of sites, and voluntarily
surrender membership or the sites allotted by the
Society, would be entitled to the benefit of refund of the
amounts deposited and paid as consideration to the
Society together with interest at 6% p.a. from the date of
deposit until date of payment.
44. Since the allegations over induction of
members, Associate members and nominal members
who do not qualify nor meet the requirements of the
Model Bye-laws, Annexure-C, and also do not qualify for
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allotment of sites formed in the layout by the Society,
touch upon questions of fact, which cannot be
conveniently adjudicated in this petition, hence we
think it appropriate to direct the Managing Committee
of the Society to make available within 30th of June,
2016 to the Registrar of Cooperative Societies all and
every material, to hold an inquiry into the following,
within six months from the 30th of June, 2016 and take
action in accordance with law to annul all such
memberships contrary to the Bye-laws as well as the
allotment of sites to such members, associate members
and nominal members;
(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;
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(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
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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
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dated 1.06.2016 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.
In the result, this petition is disposed of with
the aforesaid directions.
Sd/-
JUDGE
Sd/-
JUDGE
ln R$*.
