Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 6805 of 2013, Judgment Date: Apr 17, 2017

                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO. 6805 OF 2013

Delhi Development Authority                                   … Appellant(s)

                                   Versus

Bankmens Co-operative Group Housing
Society Ltd. & Ors.                                           …Respondent(s)


                                    With

                     CIVIL APPEAL NOS. 6803-6804 OF 2013

Delhi Development Authority                                   … Appellant(s)

                                   Versus

Safdarjung Co-operative Group Housing
Society Ltd. & Ors.                                           …Respondent(s)


                                    With

                        CIVIL APPEAL NO. 8627 OF 2014

Palwell CGHS Ltd.                                              …Appellant(s)

                                   Versus

Registrar of Co-operative Societies & Anr.                    …Respondent(s)


                               J U D G M E N T


DEEPAK GUPTA, J.


C.A.NO. 6805 OF 2013 & C.A.NOS. 6803-6804 OF 2013


            These appeals are being disposed of by a common  judgment  since
common issues of fact and law are involved.
2.    We may first refer to the facts of  Civil  Appeal  No.  6805  of  2013
relating  to  Bankmens  Co-operative  Group  Housing  Society   (hereinafter
referred to as the ‘Bankmens CGHS’).  Some employees of the  State  Bank  of
India resolved  to  form  a           Co-operative  Group  Housing  Society,
namely Bankmens CGHS Ltd., on  06.10.1983  under  the  Chairmanship  of  one
Deepak Khanna.  The Society was registered with one  Shri  R.K.  Mangla,  as
its Secretary.  The Society  had  given  a  list  of  74  promoter  members.
Correspondence was exchanged between the Bankmens  CGHS,  Registrar  of  Co-
operative Societies  (hereinafter  referred  to  as  ‘RCS’)  and  the  Delhi
Development Authority (hereinafter referred  to  as  ‘DDA’).   The  Bankmens
CGHS did not comply with various directions of the RCS  and  it  was  placed
under liquidation on 30.03.1992.  Though Liquidator was  appointed,  he  did
not take over the records of the Bankmens CGHS.
3.    Some time between 1999-2000, almost after  16-17  years  the  Bankmens
CGHS had been formed, and 7 years after it was placed under liquidation,  an
application for revival of the  Society  was  filed  by  one  Rajan  Chopra.
Admittedly he was not one of the original promoters of the Society.   Though
initially, objections were  raised  to  the  revival  of  the  Society,  the
Society was finally revived on 13.07.2000.  On  22.08.2000,  a  list  of  74
members of the Bankmens CGHS was approved  for  allotment  of  land  and  on
02.11.2001, the appellant DDA issued  provisional  Letter  of  Allotment  of
land to the Society.  Though the land was allotted  yet  the  same  was  not
handed over to the Society.  Aggrieved by this, the Bankmens  CGHS  filed  a
Writ Petition No.1521 of 2004 before the Delhi High Court  in  2004  and  on
31.05.2004, this petition was disposed of with  a  direction  that  land  be
provided to the Bankmens CGHS.  Against this, the DDA filed an LPA  No.  912
of  2004  which  was  disposed  of  on  08.02.2006,   directing   that   the
verification of members be undertaken either by the DDA or by the  RCS  and,
thereafter, possession of land be  handed  over  to  the  Society  within  a
period of two months subject to making payment as demanded by    the DDA.

4.    The case of the appellant is that when it requested the RCS to  verify
the names of the members, the reply given was that all the  records  of  the
Bankmens CGHS were with the Central  Bureau  of  Investigation  (hereinafter
referred to as the ‘CBI’) pursuant to the  directions  issued  by  the  High
Court of Delhi in Writ Petition No. 10066 of 2004, filed  by  one  Yogi  Raj
Krishna  Bankmens  Co-operative  Group   Housing   Society   Ltd.   &   Ors.
Thereafter, DDA wrote to the CBI but the CBI did not provide the record  and
replied that it was the duty of the RCS to verify the names of the  members.
 In the year 2012, the Bankmens CGHS filed another Writ  Petition  No.  3546
of 2012 praying for directions to the DDA to handover the vacant  possession
of plot pursuant to  the  directions  in  LPA  No.912  of  2004  decided  on
08.02.2006.  The Writ Petition was disposed of  on  23.07.2012.   The  Delhi
High Court directed the DDA to process the case of  the  Bankmens  CGHS  for
possession of plot within a period  of  one  month.   This  order  is  under
challenge in Civil Appeal No. 6805 of 2013 @ SLP (C) No.18747 of 2013.

5.     The  facts  of  Safdarjung   Co-operative   Group   Housing   Society
(hereinafter  referred  to  as  ‘Safdarjung  CGHS’),   are   similar.    The
Safdarjung CGHS was  registered  with  the  RCS  on  18.11.1983.   One  Shri
Sudarshan Tandon moved an application on 09.08.1983 for registration of  the
Safdarjung CGHS showing that  it  had  83  promoter  members.   The  Society
wanted to change the names of its members but this action was  not  approved
by the RCS and finally on 06.11.1990 an order  was  passed  for  liquidating
the Safdarjung CGHS.  Some of the records of the Safdarjung CGHS  came  into
possession of one  Mahanand  Sharma  who  was  not  even  a  member  of  the
Safdarjung CGHS.  On  01.12.1998,  an  application  was  moved  by  Mahanand
Sharma for revival of the Safdarjung CGHS.  Thereafter the  Safdarjung  CGHS
was revived on 26.04.1999.  On 24.11.1999 the Office of the RCS  recommended
the name of Safdarjung CGHS for allotment of land.  After  the  Society  was
revived,  like  in  the  case  of  Bankmens  CGHS,  a  plot  of   land   was
provisionally allotted to  Safdarjung  CGHS.   Thereafter,  Safdarjung  CGHS
filed a Writ Petition No.1990 of 2004, which was disposed of along with  the
case of Bankmens CGHS (WP No. 1521 of 2004).  Aggrieved by  this  order,  an
LPA No.904 of 2004 was filed by the DDA in  this  case  also  and  identical
order was passed for  verification  of  the  members.   Thereafter,  similar
correspondence took place between the DDA, Office of the RCS and the CBI.

6.    On 03.03.2011, Safdarjung CGHS filed a Writ Petition (C) No. 13298  of
2009 in the High Court of Delhi claiming that though it had paid the  amount
demanded to the DDA, the plot of land in Dhirpur had not  been  handed  over
on account of the CBI  case  pending  against  the  office  bearers  of  the
Society.  The High  Court  directed  that  the  RCS  should  initiate  fresh
enquiry into the list of members submitted by the  Safdarjung  CGHS  and  it
may also rely upon the investigation undertaken by the CBI.   On  14.09.2011
enquiry report was submitted and it was found that the list of  members  was
not authentic.  Thereafter, the RCS on 10.01.2012 passed an order  that  the
names  of  the  members  of  the  respondent  Safdarjung  CGHS   cannot   be
recommended to the DDA for allotment of land.

7.    Aggrieved by the aforesaid order of the RCS on 28.01.2012,  Safdarjung
CGHS filed Writ Petition (C) No. 1168 of 2012 claiming that the Society  was
a genuine Society and the Writ Petition was disposed  of  on  27.02.2012  on
the ground that the case of the Safdarjung CGHS was identical  to  the  case
of Lords  Cooperative  Group  Housing  Society  Vs.  Registrar,  Cooperative
Societies and Ors., which was  disposed  of  on  23.05.2011.   The  RCS  was
directed to take fresh decision in the matter.  Thereafter,  on  02.05.2012,
the RCS recommended the names of the members of Safdarjung CGHS to the  DDA.
  After  the  decision  of  the  High  Court  in  Bankmens  CGHS’s  case  on
23.07.2012, the Safdarjung CGHS filed Writ Petition (C)  No.  5109  of  2012
claiming relief of physical possession  of  the  allotted  plot.   The  High
Court disposed of the petition upon the statement of  the  counsel  for  DDA
that the plot would be handed over to the Society within a period  15  days.
It is not disputed that possession of this plot was actually handed over  to
the Safdarjung CGHS pursuant to this order. Both the order dated  27.02.2012
passed in W.P.(C) No.1168 of 2012  and  order  dated  22.08.2012  passed  in
W.P.(C) No.5109 of 2012 have been challenged in C.A. Nos. 6803-6804 of  2013
@ SLP (C) Nos. 3268-3269 of 2013.

8.    Another important fact which is relevant for decision of  these  cases
is that the DDA had fixed a cut-off date  of  31.10.2003  for  allotment  of
land to the short-listed societies.  One Yogi Raj Krishna CGHS filed a  Writ
Petition No. 10066 of 2004 alleging that a large number of  bogus  societies
which were either non-existent or defunct, or otherwise  were  not  eligible
for allotment of land had been included in the list of societies  after  the
cut-off date.  In this Writ Petition a Division  Bench  of  the  Delhi  High
Court in its order dated 25.08.2008 observed         as follows :-

            “3. During the pendency of proceedings and on  consideration  of
the material on record, it was felt that the matter required  further  probe
and consideration on account of ‘Builders’  having  taken  over  Cooperative
Societies.  It was observed in order dated 22.11.2004, that  societies  were
being sold and bought by  builders  in  Delhi.   Court  expressed  its  deep
concern over the matter and called for Vice Chairman, DDA and  Registrar  of
Cooperative Societies to be present in person in court.   Pursuant  to  said
order Mr. M. Gupta, Vice Chairman, DDA and Mr. S.  Gopal  Sharma,  Registrar
Cooperative Societies, appeared in person in court and  they  informed  that
authorities were aware that after allotment of land to  Cooperative  Housing
Societies in certain cases, the society as a whole is purchased by  Builders
and thereafter members are changed on the basis of  en  masse  resignations,
expulsions and new members inducted by charging  premium  at  market  rates,
taking advantage of loopholes in  the  Rules  and  Regulations.   The  Court
observed the need for formulation of a comprehensive policy with  regard  to
allotment of land to Cooperative Societies taking  into  account  the  above
factors.   Union  of  India  was  also  issued  notice  and  has  filed  its
affidavit.   Learned  Additional  Solicitor  General  pointed  out  that  an
earnest attempt was being made to see that land allotted  to  societies  was
not hijacked by the builder mafia in  Delhi  and  certain  suggestions  were
placed on record.

            4.  On  05.04.2005,  DDA  was  directed  to  file  an  affidavit
pertaining to the categorization of societies i.e. list of  those  societies
which underwent liquidation and now were seeking revival  and  allotment  of
land and the list of genuine societies which had approved  list  of  members
till 31.10.2003, from the office of Registrar  Cooperative  Societies,  with
their membership duly verified.

            5. Considering the  enormous  amount  of  money  that  had  been
pumped in and invested by the influential Builder  mafia  and  other  vested
interests, collusion and complicity of the staff and  officers  of  RCS  and
others to hijack the societies, Director CBI was directed  to  constitute  a
special investigation team headed by an officer not below the  rank  of  DIG
with adequate  staff  to  investigate  the  whole  matter.   On  31.08.2005,
counsel  appearing  for  CBI   informed   about   outcome   of   preliminary
investigation.  CBI was directed  to  file  a  detailed  affidavit  in  this
regard.  On 03.10.2005 CBI filed status report wherein it pointed  out  that
out of 135 societies, 19 societies appeared to  be  genuine,  the  names  of
said societies had been given in Annexure A to  the  report.   On  the  same
date the names of those societies were ordered to be deleted from  the  list
of 135 societies which were directed to be scanned by  the  CBI.   Registrar
Cooperative Societies  was  directed  to  verify  the  list  of  members  in
accordance with law.

            6. During the pendency of proceedings, this Court further  noted
that many societies had been allotted land after  the  year  2000.   It  was
noted that as the price of the land started soaring in Delhi after the  year
2000, this spurt in land prices led to unholy  nexus  between  builders  and
powerful persons in various  authorities.   Societies  which  were  hitherto
defunct or had lost interest in allotment for one  reason  or  another  were
sought to  be  revived  by  the  office  of  the  Registrar  of  Cooperative
Societies and thereafter land was demanded from DDA on  the  basis  of  such
recommendation.   The  Court  ordered  DDA  and  Registrar  of   Cooperative
Societies to give details of all the  societies  which  were  allotted  land
after the year 2000 and also directed them to produce the relevant files  in
court along with recommendations of allotment to DDA.  CBI was  directed  to
look into those allotments and also with regard to the members who had  been
allotted land.  Mr. K.C. Mittal, Advocate was  appointed  Amicus  Curiae  to
assist the Court.”


The High Court observed that since the builder mafia  was  very  influential
and there was collusion between the builder mafia and officers of  the  RCS,
the investigation should be carried  on  by  the  CBI.   The  Director,  CBI
submitted his report pointing out that out of  the  135  societies  only  19
appeared to be genuine.  The CBI both in  the  case  of  Bankmens  CGHS  and
Safdarjung CGHS filed chargesheet against some  of  the  office  bearers  of
these two Societies and also officials of  the  RCS  and  the  RCS  himself,
alleging that the Societies were revived in an          illegal manner.
9.    As far as Bankmens CGHS is concerned the charges are that the  revival
application was filed by one Rajan Chopra by hatching a criminal  conspiracy
along with officials of RCS and Shri R.K. Srivastava, Registrar of the  RCS,
to fabricate and manufacture false documents to revive  the  Bankmens  CGHS.
The address of the Society was changed.   It  is  also  alleged  that  Rajan
Chopra submitted  a  forged  ‘No  Objection  Certificate’  dated  29.12.1999
purported to have been issued by Shri Vipin Gandotra, Proprietor of  M/s  VG
& Co., in this regard.  Initially, when the official of the RCS went to  the
address he found that no such Society  was  existing  at  the  address  and,
therefore, he recommended that the Society should not be revived.   However,
another Dealing Assistant prepared a  false  note  which  was  forwarded  by
other officials of the RCS at the instance of the then RCS  R.K.  Srivastava
and the Society was revived.  The case of the CBI is  that  though  a  fresh
list of 74 members was given, not even one of these  members  was  from  the
original list of 74 members when the Society was incorporated  in  the  year
1983.  The case of the CBI further is that 35% of the cost of the  land  had
to be paid by the Society to the appellant DDA.  This  money,  according  to
the CBI was not paid by the enrolled members of the Society but a  group  of
builders comprising of accused S.P. Saxena and Sandeep Sahni who  had  taken
over control of the Society and paid a sum of  Rs.  67,38,800/-  from  their
joint S.B.  Account  No.  18699  with  the  Central  Bank  of  India,  South
Extension, Part-II, New Delhi Branch.  Thus the case  of  the  CBI  is  that
this Society was illegally revived.  It would be pertinent to  mention  here
that after the filing of SLP (C)…CC No. 2696 of 2013 (CA No. 6805 of 2013  @
SLP (C) No. 18747/2013), this Court passed an order on 29.01.2013  directing
the appellant DDA to file an additional affidavit.   In  this  affidavit  it
has been mentioned that the  Bankmens  CGHS  was  registered  at  21,  Inder
Enclave,  Rohtak  Road,  New  Delhi,  with  65  promoter  members   but   on
31.07.1985, Shri R.K. Mangla, requested the RCS to  approve  a  list  of  74
members.  Some issues were raised by the RCS but the  Bankmens CGHS did  not
respond to the letter of the RCS and, thereafter,  the  Society  was  placed
under liquidation.  When the accused Rajan Chopra filed an  application  for
revival of the Society on 11.11.1999 the address of the Society was  changed
to 44/7-B, Regal Building, Connaught Place, New Delhi.   The  allegation  is
that the Society was revived fraudulently and that the names of the  members
of the Bankmens Society as in 1993 were never forwarded to the  RCS  at  the
time of revival of the Society and fresh members were  inducted.   Even  the
list of members pertaining to the year 1999 is totally  different  from  the
list  of  members  as  on  31.03.2003  and  this  list  has   been   changed
substantially  on  31.03.2011.   There  were  many  resignations   and   new
additions of new members.  None of  the  original  members  of  the  Society
whose names were listed in the  list  that  was  forwarded  to  the  DDA  on
22.08.2000, feature in the list of members of the  Bankmens  Society  as  on
31.03.2011.  The entire membership list is totally different.  Even  out  of
the list of 74 members as given on 31.03.2003 there are only 13  members  in
the list of members as on 31.03.2011 and the other 61 members  were  totally
new.

10.   As far as the membership of Safdarjung CGHS is  concerned,  the  facts
are very similar.  It would be pertinent to refer to the inquiry  report  in
respect of this Society filed in the High Court  of  Delhi  in  W.P.(C)  No.
13298 of 2009.  In the enquiry report it was observed that the  Society  was
initially formed on 18.11.1983 with 83 members.  This Society was  wound  up
in the year 1990 and as such there was virtually no society which  could  be
revived.  Be that as it may, the next list of members is of the  year  1999.
This list was submitted by one Mahanand Sharma.  It would  be  pertinent  to
mention that Mahanand Sharma was not  a  member  of  the  Society  in  1983.
According to this report as also as per the charge-sheet  submitted  by  the
CBI Mahanand Sharma has, in fact, forged the signatures of original  members
and has also forged the signatures of many members.  During the  inquiry  by
the CBI it was found that those members who  were  shown  to  have  resigned
from the Safdarjung CGHS had denied  their  signatures  on  the  resignation
letters.  Therefore, the list pertaining to  the  year  1999  itself  was  a
forged and a fake list.

11.   In this case there is another list of members of the year 2009.   This
list came to the knowledge of the authorities only when it was  filed  along
with W.P.(C) No. 13298 of 2009 and this list was not validated  by  the  RCS
at any point of time.  This list is not only  different  from  the  list  of
1983 but also very different from the list of 1999.  New members could  have
been enrolled only after the resignation of old members  but  intimation  of
resignation of a member has to be sent to the Office of RCS.   The  case  of
the CBI is that the resignations of most of  the  members  are  forged.   As
pointed out above none of the members of the 1983 list are shown as  members
in the year 1999.  In this case also the address of the Society was  changed
from SDA Shopping Complex  to  Jagriti  Enclave.   In  this  case  when  the
Secretary of the so-called Safdarjung CGHS moved the  RCS  for  approval  of
the new list of members on 16.12.1999, a noting was made that the  Secretary
of  the  Society  be  asked  to  give  all  the  records  relating  to   the
resignations and enrollments.  It was also noted that  the  address  of  the
Society was changed more than twice in a year.   No  response  was  received
from the Society and hence, according to this  report  the  membership  list
was totally fraudulent.  Even with regard to the members shown in  the  list
of 2009, the report found various anomalies in  the  same.   Therefore,  the
Registrar refused to accept the list of 2009 and refused  to  recommend  the
name of  the  Safdarjung  CGHS  for  allotment  of  land.   This  order  was
challenged by the Safdarjung CGHS by way of a writ  petition  and  the  High
Court while disposing of the writ petition held that this case  was  similar
to the Writ Petition (C) No. 2441 of 2011, Lords Co-operative Group  Housing
Society vs. Registrar, Cooperative Society and Ors. decided  on  23.05.2011.
It was argued before the High Court that in the case of Lords CGHS the  land
had not only been allotted but possession of the land had also  been  taken,
flats had also been constructed and they  were  ready  for  allotment.   The
High Court rejected this plea on the      following grounds:-

“......We, however, find that the ratio of the said judgment is  that  where
such societies had been permitted to be revived, contributions made  by  the
members whether towards land or cost of flat, the matter should not  be  re-
agitated.  The verification had to be carried out by the DDA at the time  of
allotment of land over which there is no dispute.  The  allotment  is  still
subsisting.  The impugned order 10.01.2012 does not even note this  judgment
delivered by us and proceeds on the basis as if the allotments  are  yet  to
be made.  In fact the necessary recommendation has to be  made  to  the  DDA
qua the eligible persons and not that  the  land  allotted  to  the  society
itself stand scrapped.  The allotment of land is a function of the DDA....”



This judgment is under challenge in W.P.No.13298 of 2009.

12.   Shri Ranjit Kumar, learned Solicitor General  appearing  for  the  DDA
submits that the High Court fell in  error  in  relying  upon  the  judgment
rendered in Lords CGHS case (supra).  His submission  is  that  the  factual
situation in that case was entirely different.  In Lords CGHS  case  (supra)
not only had the land been allotted, possession of the land  had  also  been
handed over to the Society, construction of the building was  completed  and
the flats were ready.  It was in these circumstances  that  the  Delhi  High
Court held that the members of the Society were entitled to  get  possession
of the flats.  No doubt, the decision of the  Delhi  High  Court,  in  Lords
CGHS case (supra) was upheld by this Court but while upholding the  judgment
this Court observed that in view of the fact that construction was  complete
and flats were ready for allotment, the members of the  Society  should  not
be denied  possession  of  the  same.   Shri  Ranjit  Kumar  has  drawn  our
attention to the various orders passed by this Court in different cases  and
a bare perusal of these orders show that this Court  did  not  go  into  the
merits as to whether the Society could have been  legally  revived  or  not,
but either disposed of the SLPs by a  non-speaking  order  or  rejected  the
same on the ground that construction was complete.  It is further  urged  by
Shri Ranjit Kumar that the revival of the Societies  was  a  fraudulent  act
and he submits that fraud vitiates all decisions and in this regard he  made
reference to the judgment of this Court in Bhaurao Dagdu Paralkar  v.  State
of Maharashtra[1], relevant portions of which read as follows:-

“9. By “fraud” is meant an intention to deceive;  whether  it  is  from  any
expectation of advantage to the party himself or from ill will  towards  the
other is immaterial. The expression “fraud” involves  two  elements,  deceit
and injury to the person deceived. Injury is something other  than  economic
loss, that is, deprivation of property, whether movable or immovable  or  of
money and it will include any harm whatever caused to any  person  in  body,
mind, reputation or such others. In short, it  is  a  non-economic  or  non-
pecuniary loss. A benefit or advantage to the deceiver, will  almost  always
cause loss or detriment to the deceived. Even  in  those  rare  cases  where
there is a benefit or advantage to the deceiver, but no  corresponding  loss
to the deceived, the second condition is satisfied.

10. A “fraud” is an act of deliberate deception with the design of  securing
something by taking unfair advantage of another. It is a deception in  order
to gain by another’s loss. It is a cheating intended to get an advantage.

11. “Fraud” as is well known vitiates every solemn act.  Fraud  and  justice
never dwell together. Fraud is a conduct either by letters or  words,  which
induces the other person or  authority  to  take  a  definite  determinative
stand as a response to  the  conduct  of  the  former  either  by  words  or
letters. It is also well settled that misrepresentation  itself  amounts  to
fraud. Indeed, innocent misrepresentation may  also  give  reason  to  claim
relief against fraud. A fraudulent misrepresentation is  called  deceit  and
consists in leading a man into damage by wilfully or recklessly causing  him
to believe and act on falsehood. It is a fraud  in  law  if  a  party  makes
representations, which he knows to be false,  and  injury  ensues  therefrom
although the motive from which the representations proceeded  may  not  have
been bad. An act of fraud on court is always viewed seriously.  A  collusion
or conspiracy with a view to deprive the rights of others in relation  to  a
property would render the transaction void ab initio.  Fraud  and  deception
are synonymous. Although in a given case  a  deception  may  not  amount  to
fraud, fraud is anathema to all equitable principles and any affair  tainted
with fraud cannot  be  perpetuated  or  saved  by  the  application  of  any
equitable doctrine including res judicata.”


13.   We have heard learned counsel for the respondents and they  have  also
filed their written submissions.  It would  be  pertinent  to  mention  that
counsel for the  respondents  have  not  countered  the  submission  of  the
learned Solicitor General that the revival of the Societies was illegal  and
fraudulent.  The main submission  is  that  the  new  members  were  validly
granted membership in the Bankmens CGHS.  They are not at  fault  and  hence
they should not be made to suffer.  It is also  urged  that  the  allegation
that Rs.67,38,800/- was paid out of the funds of builders is incorrect  and,
in fact, this amount was paid out of the funds of the Society.

14.   In Safdarjung CGHS additional grounds have been  taken  that  the  DDA
had not, in fact, challenged the orders dated 27.02.2012 and 22.08.2012  but
only after the land which was the subject  matter  of  dispute  in  Bankmens
CGHS case was illegally given to some third party, it was felt by  officials
of the DDA that contempt proceedings may  be  initiated  against  them  and,
therefore, appeal was filed in Safdarjung CGHS case also.  Again  on  merits
all that has been stated is  that  after  revival  in  the  year  1999,  the
membership is genuine and bonafide and that the genuine  members  cannot  be
denied what is rightfully due to them.
15.   We have carefully considered the arguments  of  both  the  sides.   As
pointed out by the Delhi High Court in Yogi Raj Krishna CGHS’s case  (supra)
it is more than apparent that the builder mafia was instrumental in  getting
the societies revived.  The CBI conducted investigation  on  the  directions
of the Delhi High Court.  After investigation triable cases have  been  made
out against the office bearers of both Bankmens  CGHS  and  Safdarjung  CGHS
and some officials of the RCS.  In Safdarjung CGHS’s  case  an  inquiry  was
conducted on the directions given by  the  Delhi  High  Court  and  in  that
inquiry it was found that  the  memberships  were  not  genuine.   But  that
report has been brushed aside by the High Court, only  on  the  ground  that
this case is covered by Lords CGHS’s case.  We are  in  agreement  with  the
learned Solicitor  General  that  the  facts  of  these  cases  are  totally
different from the facts of the Lords CGHS’s  case.   In  these  cases  even
though provisional allotment was made more than 15 years back, yet the  plot
of land was never handed over to the Bankmens  CGHS,  and  in  the  case  of
Safdarjung  CGHS  possession  of  land  was  handed  over  only  after   the
intervention of the Delhi High Court in the year 2012 and  the  construction
has not even started.   Therefore,  these  two  cases  stand  on  a  totally
different footing.

16.   As repeatedly held by this Court when an action is based on fraud  the
same cannot withstand the scrutiny of law.  The revival of  these  Societies
is mired in controversy. When we talk of  revival  it  would  normally  mean
that the society is being revived by its original members. As far  as  these
two cases are concerned the move for revival  was  started  by  persons  who
were not even members or promoters of the original society.  The revival  of
societies was funded  by  the  builders.   The  original  members  have  all
vanished into thin air.  There is no explanation as  to  how  they  resigned
and who accepted their resignations.  There is nothing  on  record  to  show
how Rajan Chopra, in case of Bankmens CGHS and Mahanand Sharma, in  case  of
Safdarjung CGHS were entitled to file the application for revival.  We  also
cannot lose sight of the  fact  that  both  the  Societies  were  put  under
liquidation because they could not furnish some information  to  the  Office
of the RCS.  There is not even a plea that when the  revival  was  done  the
RCS was satisfied that the reasons for which the Societies  were  liquidated
no longer existed.  It is also obvious that memberships  kept  changing  and
almost all the members of these two Societies are persons who  were  granted
membership after the year 2003, i.e. after the cut-off date referred  to  in
Yogi Raj Krishna CGHS’s case.  We are, therefore, clearly of the  view  that
the very revival of the Societies is illegal and that  when  the  foundation
falls the edifice which has been developed on the foundation must go.

17.   The argument made in Safdarjung  CGHS’s  case  is  that  the  DDA  had
acquiesced to the orders passed by the Delhi High Court.  This  argument  is
without merit.  The delay in filing the petition was condoned  and  now  the
respondents cannot be allowed to urge that the appeal is  not  maintainable.
We may make it clear that we have not gone into  certain  arguments  of  the
learned Solicitor General where he had referred  to  the  charge  sheets  in
both the cases because we felt that we should  not  make  any  comment  that
would have bearing on the criminal  trial.   We  further  clarify  that  any
observations made herein have been made only with a  view  to  decide  these
cases and will have no impact on the criminal cases.

18.   Another argument raised is that verification of the  members  is  only
to be done when the plots are to be allotted and such  verification  is  not
required at the time when the land is to be allotted to  the  Society.    We
are not at all in agreement with this submission.   If  this  submission  is
accepted, in every case the DDA will be presented with a fait  accompli  and
the situation as prevailing in Lords CGHS’s case would come into  play.   In
a case like the present one where the very revival of  the  society  or  the
creation thereof is wholly illegal, verification  of  the  members  must  be
done even at the stage before the land is allotted to the society.

19.   In view of the above discussion we are clearly of the  view  that  the
revival of the Societies was illegal.  It was  manipulated  by  persons  who
had no connection with the Societies.  We are prima facie of the  view  that
the builder mafia had a big hand in getting the  Societies  revived.   Hence
we hold  that  the  very  revival  of  the  Societies  is  illegal  and  the
memberships are not genuine and hence the  appeals  are  allowed.   However,
there may be some members of the Societies who must have been duped  by  the
promoters.  Therefore, we direct the DDA to refund the  money  deposited  to
the Societies along with interest @10% p.a with effect from  the  date  when
the money was deposited with the DDA.  The amount be paid  within  2  months
from today.  The  Societies  shall  in  turn  ensure  that  within  4  weeks
thereafter the amount deposited by the members is  returned  to  them  along
with the interest aforesaid.  This will alleviate the  hardship  of  genuine
members.

20.   Accordingly, Civil Appeal Nos. 6805 of  2013  and  6803-6804  of  2013
filed by the DDA are allowed and the  judgments/orders  of  the  Delhi  High
Court 23.07.2012 , 27.02.2012 &  22.08.2012  are  set  aside  and  the  Writ
Petition (C) Nos. 3546, 1168 and 5109 of 2012 filed  by  Bankmens  CGHS  and
Safdarjung CGHS are dismissed with the aforesaid terms.

CIVIL APPEAL NO. 8627 OF 2014

21.   This appeal is directed against the interim order of  the  Delhi  High
Court whereby the High Court directed that the membership of the Society  be
got verified.  In view of what has been discussed above,  there  can  be  no
ken of doubt that verification of the members must be done  to  ensure  that
the members of the society are genuine  members.   Hence  Civil  Appeal  No.
8627 of 2014 is dismissed.


                                                           …………………………………..J.
                                                      (PINAKI CHANDRA GHOSE)




                                                           …………………………………..J.
                                                              (DEEPAK GUPTA)


New Delhi
April 17, 2017
-----------------------
[1]    (2005) 7 SCC 605