Case Note & Summary
The Supreme Court dismissed the appeals filed by Delhi Dayalbagh Cooperative House Building Society Ltd. against the orders of the Delhi High Court, which had upheld the decision of the Cooperative Tribunal setting aside the award of the Registrar Cooperative Societies. The dispute arose from the society's acquisition of land under Part VII of the Land Acquisition Act, 1894, for construction of dwelling houses for its members. The society executed an agreement with the State Government under Section 41 of the Act, which imposed conditions including that the land must be used for the purpose acquired and that if the land is no longer required, it shall be relinquished to the government. The society framed byelaws, including byelaw 51, which prohibited members from transferring, selling, or mortgaging their houses to non-members. Despite this, the society executed registered sale deeds in favor of some members, who subsequently transferred the properties to third parties. The society filed a dispute before the Registrar Cooperative Societies, who passed an award declaring the sale deeds void. The Cooperative Tribunal set aside the award, holding that the arbitrator had no jurisdiction to examine the validity of registered sale deeds, which could only be challenged before a civil court. The High Court upheld the Tribunal's order. The Supreme Court affirmed the High Court's decision, holding that the arbitrator under the Delhi Cooperative Societies Act, 2003 lacks jurisdiction to adjudicate the validity of registered sale deeds. The court noted that the sale deeds were registered documents, and their validity could only be questioned before a civil court. The court also observed that the society could pursue other remedies available under the law, including approaching the civil court or seeking resumption of land by the government under the agreement. The appeals were dismissed with no order as to costs.
Headnote
A) Cooperative Societies Act - Jurisdiction of Arbitrator - Validity of Registered Sale Deed - The arbitrator under the Delhi Cooperative Societies Act, 2003 has no jurisdiction to examine the validity and legality of a registered sale deed, which can only be questioned by availing a remedy in the Civil Court. The court held that the sale deed being a registered document, its validity cannot be adjudicated by the arbitrator under the Cooperative Societies Act. (Paras 2, 10-12) B) Land Acquisition - Part VII of Land Acquisition Act, 1894 - Agreement under Section 41 - The agreement executed under Section 41 of the Land Acquisition Act, 1894 between the State Government and the society, published in the Gazette, has the force of law and is binding on the parties and the public. The conditions in the agreement, including the restriction on transfer of land, are enforceable. (Paras 8-9) C) Cooperative Societies - Byelaws - Restriction on Transfer - Byelaw 51 of the society prohibits members from transferring, selling, or mortgaging their house to any person other than members of the society or the society itself. However, the validity of a registered sale deed executed in violation of byelaws cannot be challenged before the arbitrator. (Paras 4, 10-12)
Issue of Consideration
Whether the arbitrator under the Delhi Cooperative Societies Act, 2003 has jurisdiction to examine the validity and legality of a registered sale deed executed by the society in favor of its members.
Final Decision
The Supreme Court dismissed the appeals, holding that the arbitrator under the Delhi Cooperative Societies Act, 2003 has no jurisdiction to examine the validity and legality of a registered sale deed. The court affirmed the orders of the High Court and the Cooperative Tribunal. No order as to costs.
Law Points
- Jurisdiction of arbitrator under Delhi Cooperative Societies Act
- 2003
- Validity of registered sale deed
- Part VII Land Acquisition Act
- 1894
- Byelaws of cooperative society
- Resumption of land by government
