judgement:
n No. 340 of 1972.
(Under article 32 of the Constitution of India).
P.H. Parekh and Miss Manju Jetlcy, for the petitioners in W.P. 340/72 excepting petitioner No. 59 and for petition ers in W.P. 1526/ 73.
Petitioner No. 59 in W.P. No. 340/72 in person.
Yogeshwar Prasad, S.K. Bagga, Mrs. section Bagga and Miss Yesh Bagga for the petitioner in W.P. No. 286/74.
Niren De, Attorney General in writ petition 340, Sardar Bahadur Saharya and Vishnu Bahadur Saharya, for respondents Nos. 1, 3, 4, 5 and 15 in W.P. 340/72 and respondents in all the W.Ps.
K.J. John for M/s. J. B. Dadachanji & Co. for R.R. 2, 6, 8, 10, and 12 in W.P. 340 & 1526 and R.R. 6, 8, 9, 11 and 12 in W,P. 286/74.
S.K. Mehta, K.R. Nagaraja and P.N. Puri for R.R. 13 178 in W.P. 1526/73.
The Judgment of the Court was delivered by RAY, C.J.
This Court on 29 August, 1974 appointed Shri Debabrata Mookerjee Chairman to convene, fix the date and hold the meeting of New Friends Cooperative House Build ing Society Ltd. referred to as the Society in accordance with the provisions of the Delhi Co operative Societies Act, 1972.
This meeting was direct 374 ed to be held for the purpose of electing the members of the New Managing Committee The Chairman was directed to look into each and every disputed question of membership.
The Chairman was further directed to decide whether the persons had been rightly or wrongly declared to be defaulters.
The order further directed that if the Chairman came to the conclusion that the person had been wrongly declared to be a defaulter, the Chairman would include him or her in the list of members.
The Chairman was also asked to give effect to all orders of this Court already made in regard to persons who were declared defaulters and who according to orders of this Court on payment of moneys are not and cannot be treat ed defaulters.
The Chairman was asked to go into cases where money had been sent and not accepted.
If the Chairman came to the conclusion that money had been wrongly not accepted, the Chairman would decide the same in accordance with Rules and Bye laws of the Society.
There are further details in the order dated 29 August, 1974.
In the order dated 29 August, 1974 Brij Mohan Malhotra was given liberty to adduce proof before the Chairman that the money was tendered Within time.
If the Chairman came to the conclusion that it was tendered in time, he would decide in accordance with Rules and Bye laws of the Society.
The Chairman was entitled to scrutinise whether any person had been either illegally brought in as a member or illegally removed, having regard to the rules, bye laws and regulations of the Society.
Inder Bir Kaur alleged that she had been illegally removed from membership.
The Chairman was directed to go into the question.
The order was made in two writ petitions No. 340 of 1972 and 1526 of 1973 and in a number of miscellaneous applica tions.
On 6 July, 1971 the Lt. Governor passed an award direct ing the Society to pay Rs.22 lakhs to the Delhi Administra tion.
On 9 July, 1971 the Lt Governor by a notification removed the elected Managing Committee and appointed a nominated ' Managing Committee under Rule 56 of the Rules made under the Bombay Cooperative Societies Act, 1925 here inafter referred to as the Bombay Act which applied to Delhi.
The term of the Managing Committee was for one year.
On 23 October, 1971 the nominated Managing Committee passed a resolution to make the award rule of the Court.
On 18 December, 1971 the nominated Managing Committee passed a resolution for having direct sub leases.
On 22 January, 1972 the nominated Managing Committee called for more funds.
On 5 July, 1972 the Lt. Governor issued second notification extending the term of the nominated Managing Committee by two years.
The Society was the subject matter of two writ peti tions.
287 members of the Society filed writ petition No. 340 of 1972 hereinafter referred to Raj Rani 's petition.
The members challenged 375 the vires of Rule 56 of the Society on the ground that the rule.was ultra rites section 71 of the Bombay Act and fur ther that the rule was bad on account of excessive delega tion.
The petitioners contended that action under Rule 56 could not.
be taken without complying with the provisions of section 46A of the Bombay Act which was applicable to.
Delhi at the relevant time.
The petitioners also challenged some notifications on the ground that the Lt. Governor having exercised his powers once could not extend the term, In short, it was said that the power of the Lt. Governor was exhausted.
The other challenges were that the notifications were not speaking order and were made malafide.
The broad challenge in the petition was against the extension of term of the Managing Committee.
On 29 August, 1972 Rule Nisi was issued.
On 30 April, 1973 the nominated Chairman of the Managing Committee issued a circular asking the members of the Socie ty to pay certain amount.
On 6 July, 1973 this Court restrained the Society and its Chairman from declaring any member a defaulter. 'On 13 August, 1973 this Court directed that all the interim orders passed in the writ petition should be confined to the petitioners in Raj Rani 's peti tion.
On 16 August, 1973 K.V. Johar filed a writ petition in a representative capacity under Order I Rule 8 of the Code of Civil Procedure.
This is writ petition No.
1526 of 1973 hereinafter referred to as Johar 's petition.
On 20 August, 1973 this Court issued Rule Nisi in Johar 's petition.
On 17 August, 1973 the nominated Managing Committee declared 321 members as defaulters.
This Court on 21 Sep tember, 1973 restrained the Society from taking any steps in pursuance of the resolution dated 17 August, 1973 against the petitioners and all other members of the Society.
On 29 November, 1973 respondent No. 6 filed an applica tion in Johar 's petition for vacating the stay order granted on 21 September, 1973.
An application for vacating the stay order granted on 6 July, 1973 in Raj Rani 's petition was not pursued.
This Court vacated the stay granted on 21 Septem ber, 1973 in Johar 's petition and granted a fortnight 's time to make the requisite payment.
On 6 January, 1974 the nominated Managing Committee declared 39 members as defaulters for non payment of dues, 42 members as defaulters for not submitting the affidavits.
This was one of the controversies which formed the subject mattter of the enquiry made by the Chairman.
On 25 January, 1974 the nominated Managing Committee decided to enrol 60 new members.
On 26 January, 1974 a confidential letter was addressed by respondent No. 6 to the Lt. Governor seeking his approval to the enrolment of 60 new members and allotment of plots to them.
On the same day, the Lt. Governor addressed a letter to respondent No. 6 giving his approval.
The enrolment of 8 1546SCI/76 376 new members on 25 January, 1974, the approval of the Lt. Governor on 26 January, 1974 and the allotment of plots to those 60 new members formed a big controversy which was also enquired into by the Chairman.
Two Civil Miscellaneous Petitions No. 1683 and 1072 of 1974 challenging the declaration of defaulters and the enrolment of new members were filed in this Court in February, 1974.
C.M.P.No.1683 of 1974 is in Raj Rani 's petition and C.M.P.No.
1072 of 1974 is in Johar 's petition.
This Court on 29 March, 1974 directed that all the papers including resolutions, original applications, original allotments should be produced in this Court on 4 April, 1974.
This Court also restrained the Managing Committee by an injunc tion from talking any steps in any manner.
On 4 April, 197 4 this Court passed directions in respect of persons who had made part payments within the time prescribed or even beyond the time prescribed not to be treated as defaulters.
This Court mentioned in its order that the allotment of plots to 60 new members who were characterised by the petitioners as very important persons appeared to have been made in undue haste and the persons in the Waiting list were not considered and that no notice was given to persons inviting application.
This Court directed that the said list of 60 new members had to await final adjudication by.
this Court.
This Court also directed that in case of 60 allot tees no further steps should be taken.
This Court directed that the case of 24 defaulters would be considered if it came to the conclusion that the allotment in favour of 60 new members would be treated as defaulters.
In the order dated 4 April, 1974 petitioners No. 60, 46, 216, 171 and 165 in Raj Rani 's petition who paid in part after due date were not to be treated as defaulters and they were given four weeks time to pay the balance.
It was said that if they failed to pay the balance within the time granted they would be treated as defaulters.
Petitioners No. 1,118, 43 and 287 in Raj Rani 's petition were stated to have paid in full but after the due date.
They were not to be treated as defaulters.
It was also said that if they had not paid the full amount, they were also given four weeks time for paying the balance,if any.
If they did not pay the balance within the time granted they would be treated as defaulters.
In Johar 's petition section Diwan, Virendra Singh, Dalip Singh and Hari Singh were stated to have made payments in part beyond time.
Iqbal Khanna and H. Bhatia were stated to have made payments in part within time.
They were all given four weeks time from the date of the order and in default of payment within the time they would be treated so defaulters.
Ten other persons in Raj Rani 's petition and 14 persons in Johar 's petition were said not to have paid within time.
A list of 31 sons was handed up to this Court by the petitioners.
These 31 persons were alleged to have been admitted as members and to have been allotted plots.
It was contended that this allotment is irregular.
These allotments were made on 26 January, 1974 to which reference has already been made.
It was 377 said that the list of 31 persons would await final adjudica tion.
Ten defaulters in Raj Rani 's petition and 14 de faulters in Johar 's petition aggregating 24 defaulters were to be considered at the time of final adjudication.
It was said that if the allotment in respect of 31 per , sons could not be allowed to stand then the cases of these 24 persons would be considered.
In this back ground on 29 August, 1974 when the two writ petitions filed by Raj Rani and K.V. Johar came up for heating this Court appointed Shri Debabrata Mookerjee as Chairman of the Society.
It may be stated here that some time in 1975 some one started a suit against the Chairman to stop the enquiry by him.
The matter was brought to the notice of this Court.
Some malicious and baseless allegations were made against the Chairman.
Under these circumstances this Court direct ed notice to the respondent who filed the suit to show cause why he should not be committed for contempt.
The Chairman was in the meantime asked to continue and he was directed to look into each and every matter as mentioned in the earlier orders.
The Chairman between 17 March, 1975 and 5 August, 1975 restored the membership of the alleged defaulters.
On 26 April, 1976 tentative voters list was published.
On 14 May, 1976 the Chairman informed the parties that election would be held on 29 August, 1976.
On 12 July, 1976 the Chairman informed the parties that the election would be held on 29 August, 1976 at Mavalankar Hall.
On 27 July, 1976 the Chairman declared that of the 60 new members who had been described as very important persons 21 did not have applications for membership and 38 were not legally admitted members and could not be included in the list.
The Chair man said that the allotment of plots in their favour could not be upheld.
On 28 July, 1976 the list of members was published.
On 17 August, 1976 there was scrutiny of the ballot papers.
On 24 August, 1976 11 persons out of the 60 persons who were enrolled members on 25 January, 1974 and allotted plots on 26 January, 1974 filed two Civil Miscellaneous praying for an order restraining the Chairman from holding the election on 29 August, 1976 These applications were held without serving any party to the proceedings contrary to the rules and practice of this Court.
On 25 August, 1976 coun sel for those petitioners mentioned the applications before the Court presided over by Khanna, J. asking that the applications filed might be heard.
It was also mentioned without informing the parties.
On 27 August, 1976 this Court further adjourned the applications.
On 29 August 1976 the meeting was held and voting took place at Mavalankar Hall.
On 23 September, 1976 the Chairman submitted his report and give copies to the parties.
On 15 October, 1976 11 persons who 378 had made the two applications for restraining of holding of the election filed an application for adjournment of the case for two months.
This Court cannot help observing two features.
One is that an attempt was made some time in the year 1975 to restrain the Chairman from proceeding with the enquiry by filing a suit against him and making baseless allegations.
It is only because this Court took immediate notice of the matter that the frivolous suit which had been filed in abuse of process of court was put an end to.
The second is that on the eve of the election another attempt was made to.
restrain the Chairman from holding the election.
These facts.
along with the attempt on the part of those 11 peti tioners to keep the matter adjourned for two months indicate the persistent attitude on the part of some of those persons to mark time for some oblique purposes.
In view of the importance of issues involved and the gravity of the situation where interest of ordinary citizens was sacrificed to meet the interest of persons of importance and influence that this Court took the aforesaid steps, in order to put an end to the litigation and the controversies, It was to be kept in the forefront that the Society is not yet the lessee of the Government in respect of the land which is to be allotted to the members.
In Volume II in Raj Rani 's petition No. 340 of 1972 appears the printed memorandum agreement to be entered into between the Society and the President of India in respect of land which will be allotted to the members of the Society, On 3 August, 1967 the Deputy Secretary, Delhi Administration wrote to the Secretary of the Society, inter alia, as follows: "I am desired to make it clear that the list of members submitted with your letter ' has been treated as final and no change in that list can be made without prior written permission of the Delhi Administration." The printed memorandum of agreement has three recitals.
One of the racitals is that whereas the Society has depos ited with the Chief Commissioner the sum of Rs.41, 62, 456.61 and has further agreed to deposit with the Chief Commissioner the additional sum or sums as hereinafter provided, being the amounts agreed to be paid by the Society to the President by way of premium for the grant to the Society of the lease hereinafter mentioned which amounts, pending the grant of the said lease, are to be a security to the President for due performance by the Society of the terms of the Agreement.
It is agreed between the parties, inter alia, as follows: 1.
The President hereby grants f0r a period of three years commencing from 13 February, 1973 a licence to the Society to enter upon the said land only for the purposes of making surveys and taking measurements and levels for preparing a lay out plan.
Upon the completion of the development of the land in accordance with the provisions contained herein and to the satisfaction of the Chief Commissioner and issue by him of a certificate to that effect 379 and provided that the other conditions of the Agreement have been duly observed, the President will, in .considera tion of the expenses incurred by the Society on the develop ment of the land and the payment of the premium and of the yearly rent as herein provided and of the covenants on the part of the Society to be;contained in the lease, grant to the Society and the Society ,shall accept a lease of such of the residential plots as may be determined by the Chief Commissioner in ,his absolute discretion.
XV(a).
After the execution and registration of the lease, the Society shall sub lease, within such time and on such premium and yearly rent as may be fixed by the President, one residential plot to each of its members who or whose wife/husband or any of his/her dependent relatives including unmarried children does not own, in full or in part, on the free hold or lease hold basis, ,any residential plot or house in the urban areas of Delhi, New Delhi or Delhi Can tonment and who may be approved by the Chief Commissioner.
Reference to the Agreement is necessary to show that the Society is not yet lessee of the Government in respect of the land.
This is a mere agreement for the grant to the Society of the lease.
The Government refused to grant lease.
Thereafter the matter was referred to the arbi tration of the Lt. Governor.
The Lt. Governor made an award directing the Society to pay Rs.22,45,742/ as the balance amount representing the cost of land.
In 1972 a supplementary agreement was made between the President of India and the Society.
One of the recitals in that agreement mentions that the Society has not completed the development of the land and the members of the Managing Committee resolved that the Lt. Governor of Delhi be re quested to allow the members to pay their individual dues to the Administration to evacute their sub teases.
This recital indicates that there was an attempt on the part of individual members to pay dues to the Society as well as to the Government.
It can, therefore, be seen that membership of the Society and the allotment of lands are different matters.
One of the main contentions before the Chairman was in regard to membership of 60 persons.
These 60 persons were admitted to membership on 25 January, 1974.
The Lt, Governor approved of their membership on 26 January, 1974.
The Chairman found that of these 60 persons 21 had at one time or another withdrawn their membership.
10 out of those 21 had either never applied or never paid the requi site membership fee.
The result, according to the Chair man, was that the cases of 39 persons were to be consid ered.
The Chairman noticed that "many of these 60 persons were highly placed Government officials and friends and relations of persons prominent in public life." Another allegation was that many of them happened "to be close relations or friends and members of the nominated Managing Committee.
" At the meeting held on 27 July, 1976 the Chairman re ferred to Rules 24 and 30 of the 1973 Delhi Cooperative Societies Rules.
These 380 rules were under the Delhi Co operative Societies Rules 1972 which replaced the Bombay Act 1925 in relation to the Union Territory.
These rules relate to conditions to be complied with for admission to membership.
Bye law 5 of the Society Bye laws was also referred to by the Chairman.
Broadly stated, Rule 24 requires a person to apply in writing in the form laid down by the Society for membership.
His application is to be approved by the Committee of the Society.
He has to fulfil other conditions laid down in the Act, the Rules and the Bye laws.
Rule 25 of the Delhi Co operative Societies Rules, 1973 provides toter alia that no person shall be eligible for admission as member of a co operative society, if in the case of membership of a housing society (1 ) he owns a residential house or a plot of land for the construction of a residential house in any of the approved or up approved colonies or other localities in the Union Territory of Delhi, in his own name or in the name of his spouse or any of his dependent children on lease hold or free hold basis; (2) he deals in purchase or sale of immovable property either as principal or as agent in the Union Territory of Delhi; or (3) he or his spouse or any of his dependent children is a member of any other housing society except otherwise permitted by the Registrar.
Rule 25(2) provides that if a member becomes or has already become subject to any disqualifications specified in sub rule (1), he shall be deemed to have ceased to be a member from the date when the disqualifications were incurred.
Rule 30 deals with the disposal of application for admission of members.
The rule provides that on receipt of an application for membership, the co operative society shall enter particulars of the application in the register of applications in the form mentioned therein.
The co opera tive society shall dispose of an application received for admission as member as early as possible and in no case later than the expiration of a period of one month from the date of receipt of the application by the Society.
In case of refusal to admit, such society shall communicate its decision together with reasons thereof.
The appeal to the Registrar lies against the order for refusal to admit a member.
An important feature in rule 30 is the date of receipt of application for membership because the applica tion is to be dealt with within one month.
Rule 30(4) provides that the person whose membership has been approved by the Managing Committee of a co operative society shall deposit the membership fee, and the amount of the qualify ing shares necessary to become a member, within 14 days of the passing of the resolution of the Managing Committee approving the membership of the person concerned.
Bye law 5, inter alia, provides that every person seek ing membership of the Society shah sign a declaration to the effect that he or his wife (she or her husband) or any of his/her dependents does not own a dwelling house or plot in Delhi and that he/she is not a member of any other coopera tive house building society.
381 Judged by these rules and considering the rival conten tions of the parties the Chairman found that of the 39 cases there was only one case of N.K. Mukherjee M. No. 1526 which fulfilled the requirements of the rules and the bye laws and the Chairman in his report declared him as having been validly accepted as member.
Out of those 39 persons 20 applications did not bear any date.
The date of an applica tion, the prescription of time for deposit of the membership fee and the amount of qualifying share and the filing of the requisite declaration arc formalities which could not be disregarded.
The Chairman rightly came to the conclusion that out of 39 persons except N.K. Mukherjee the other 38 were not legally admitted to the membership and, therefore, they could not be treated as members.
The Chairman in paragraphs 9 to 16 of the Report consid ered the cases of several persons who. had been declared defaulters.
He rightly came to the conclusion that 108 persons mentioned in Annexure 'C ' should be restored to membership.
The Chairman next considered whether there should be a waiting list.
A list of 102 persons described as the wait ing list was forwarded and endorsed by the officers of the Delhi Administration.
The Chairman came to the conclusion that of the 102 persons on the list, only a few prosecuted their claims before the Chairman and the rest appeared to him to be no more interested in the membership of the Socie ty.
In an annexure marked 'G ' the Chairman rightly included in the waiting list the names of such persons who could be considered.
The Chairman said that 38 persons whose membership was cancelled by him at the meeting held on 27 July, 1976 could apply afresh so that their applications could be considered.
The Chairman said that 24 persons made applications for membership.
The Chairman rightly said that it would be fair to leave the consideration of the applications of these 24 persons to the new Managing Committee and that their names should be kept in a waiting list.
The Chairman next found that the Society had received from 4 persons deposits towards the price of the land more than a decade ago but took no steps to return the moneys or to admit them to the benefit of membership.
Again, there were 4 other persons whose land had been acquired by the Delhi Administration.
There was an agreement which required the Society to offer membership to these persons upon their fulfilling the conditions of membership.
The Chairman found that those 4 persons whose land had been acquired had made applications.
The Chairman tightly came to the conclu sion that these 8 persons, namely 4 from whom moneys had been received and the other 4 whose land had been acquired should be accepted as members.
Out of 38 persons whose membership was cancelled by the Chairman on 27 July 11 applied to this Court in C.M.P. No. 2065 of 1976 for an order that admission of 124 members mentioned in 382 Annexure 'C ' to the petition is illegal and for further declaration of revocation of membership of 38 members as mentioned in Annexure 'B ' to the said petition.
These petitioners also asked for an order directing the Chairman not to proceed with the meeting of the Society and the holding of elections on 29 August, 1976.
These 11 persons also made applications C.M.Ps.
No. 8485 and 8486 for filing objections to the report of the Chair man.
They wanted two months to file objections.
It should be stated here that 11 applicants wanted to prevent the holding of the meeting and the election for the purpose of prolonging litigation.
This Court rightly did not prevent the holding of the meeting and the election.
The report of the Chairman shows that the meeting as well as the election was lawfully and validly held.
These 11 persons were given full opportunity to make their submissions by way of objection to the report.
Coun sel appeared and made their submissions.
These 11 persons submitted that no relief can be sought by the petitioners in the writ petitions against the Society and that Article 19 cannot now be invoked for the enforce ment of rights.
Their further submissions were these.
On 6 January, 1974 39 persons were declared defaulters by the Managing Committee for non compliance with the order of this Court passed on 11 December, 1973.
One of those 39 defaulters made an application to this Court on 9 February, 1974 for condonation of delay and for restoration of his membership.
The application was dismissed on 25 February, 1974.
On 4 April, 1974 this Court granted four weeks time to 15 persons out of the 39 declared defaulters and there fore the default of 24 persons was confirmed.
The Chairman re considered the cases of 24 defaulters including the one whose application was dismissed.
These 11 persons submitted that their membership and allotment should have been restored.
The Chairman was also in error in considering the cases of 8 persons because records were not available.
It is significant that out of 1100 members and the several parties to the writ petitions none has taken objec tion to the report of the Chairman.
The only persons who objected are out of the 24 persons those membership and allotment on 26 January, 1974 was cancelled.
These 24 per sons have however been put by the Chairman in a waiting list.
The membership as well as the allotment of plots to these 38 persons is rightly rejected by the Chairman.
The Chairman based his finding on facts of tabulated statements prepared in the presence of counsel and parties in open public hearings.
No challenge can be taken to the dates and facts.
The Chairman rightly found that even if the date of the eligibility certificate is taken as the effective date of application the position cannot be otherwise.
The Chairman rightly found that the records do not indicate that the payment was 383 made within 14 days of the date of resolution.
The Chairman rightly found that the requirement of payment is not proved and there has not been substantial compliance.
The conclu sion is correct and inescapable that the enrolment of 38 persons was not only rushed but was done with unseemly haste.
It also appears from the report of the Chairman that persons the waiting list were not considered before these 38 persons were enrolled as members.
Reference may be made to clause (7) of the Award of the Lt. Governor which was made the rule of Court.
The award is dated 6 July, 1971.
Clause (7) made it encumbent on the Society to act in ac cordance with the award.
There were some persons who were treated by the new Managing Committee as defaulters and these 38 persons were taken by the new Managing Committee unlawfully as members.
The Chairman in Annexure 'C ' restored 108 persons to membership.
These 108 persons had been declared defaulters by the nominated Managing Committee.
This Court by order dated 29 August, 1974 required the Chairman to look into each and every disputed question of membership and to decide as to whether a member has been rightly or wrongly declared a defaulter.
The nominated Managing Committee on 6 January, 1974 declared a number of persons to be defaulters.
The declara tion of defaulters could not have been made except by the General Body with a special majority and with the approval of the Registrar.
The nominated Managing Committee could not have functioned after 1 April, 1973 in view of the provisions of section 92 read with section 32 of the Delhi Co operative Societies Act, 1972.
In view of the award of the Lt. Governor dated 6 July, 1971 the Committee had there after no jurisdiction to declare any member a defaulter.
This Court by order dated 4 April, 1974 observed that the case of 24 defaulters would be considered if it transpired that the list of new allottees could not be allowed to stand.
The act of declaration of defaulters on 6 January, 1974 cannot be dissociated from the enrolment of new allottees on 25 and 26 January, 1974.
The report of the Chairman in restoring 108 alleged defaulters to membership is just and correct.
This Court by Order dated 29 August, 1974 required the Chairman to look into each and every disputed question of membership and to decide whether a person has been tightly or wrongly declared a defaulter.
The order further stated that if the Chairman came to the conclusion that the person has been declared to be a defaulter the Chairman will include him or her in the list of members.
The report of the Chairman is lucid and direct to the point.
The report noticed that there was widespread discontent as to the way in which the affairs of the Society were conducted.
The report said "Allegations of favouritism want of fairplay, mal administration, deliberate suppression of the rights of members were freely made against the nominated Managing Committee in 1971".
The Chairman noticed that there was "nothing to 384 choose between the old elected Committee which was super seded and the nominated Managing Committee which came to take its place".
Letters were hardly replied to.
En quiries were rarely attempted to.
Cheques were hardly ever cashed in time.
Sudden declarations of default were made without following the prescribed procedure laid down in the Act and the Rules.
The nominated Managing Committee issued a circular dated 30 April, 1973 demanding Rs.6 per sq. yard and threatened the members that in case they did not pay the said amount they would be declared defaulters.
This circular is not a notice within the meaning of the bye laws of the Society and declaration of defaulters on the basis of the circular is illegal and contrary to bye laws of the Society.
Further the said circular was despatched after the time for payment mentioned therein was over.
No opportunity was given tog member as required by the mended bye laws to show cause why his right to a plot would not be forefeited for non payment of deposit.
Figures of alleged dues were not mentioned in the circular in most of the case.
In view of the award of the Lt. Governor dated 6 July, 1971 the nominated Managing Committee could not declare, any member to be a defaulter.
Further the order of this Court dated 6 July, 1973 continued to be in force, in so far as the petitioners in Raj Rani 's petition are concerned.
The declaration of defaulters from amongst the petitioners in Raj Rani 's petition was unjustified.
The action of the Managing Committee declaring defaulters was in bad faith because they wanted to confer benefits on other persons under the guise of declaration of defaulters.
This Court in the order dated 4 April, 1974, observed that the cases of 24 defaulters would be considered if it transpired that the list of allottees on 26 January, 1974 could not be allowed to stand.
The Chairman has rightly dealt with the cases of 24 defaulters in view of his right conclusion that the allotments on 26 January; 1974 were bad.
The Chairman considered the cases of 42 persons who had been declared defaulters.
The Chairman rightly came to the conclusion that 30 persons had genuine grievances and he accepted them as members on their submitting fresh affida vits with a view to putting an end to all controversies whether they filed affidavits of not.
R was admitted before the Chairman that all these persons had field their affidavits originally while seeking membership.
The ques tion was whether they filed any fresh affidavits as required by the subsequent direction of the Delhi Development Author ity.
Some of the members contended before the Chairman that they filed amended affidavits.
Some members contended that in spite of their request to give the proforma of the amend ed affidavit the nominated Managing Committee did not give the proforma of the affidavit.
Under these circumstances the Chairman rightly accepted the contentions of 30 out of the 42 persons.
385 The Chairman rightly held that 4 persons whose money was lying with the Society should be made members.
The Chairman also rightly held that 4 persons whose lands had been ac quired by the Society should be accepted as members.
The Chairman in paragraph 37 of the report has indicated that the new Managing Committee should fix priorities in the order mentioned in sub paragraph (a) to (e).
These in sub paragraphs (a) to (b) belong to classes of members in whose favour there was specific allotment as early as the year 1957.
Due communication was made to them about the specific allotment of plots.
They were persons who had paid more than Rs.17,000.
They were declared defaulters for non payment of Rs.3000 or less by the nominated Managing Com mittee as late as the year 1974.
The Chairman rightly put persons in sub paragraphs (a) and (b) in order of priority.
Persons in sub paragraph (c) in paragraph 37 of the Chairman 's report comprise those who were declared default ers round about the year 1962 63.
The amounts paid by persons in sub paragraph (c) are less than the amounts paid by persons in sub paragraphs (a) and '(b).
There was no specific allotment of plots in favour of persons mentioned in sub paragraph (c).
Persons in sub paragraph (c) there fore cannot claim priority over persons in sub paragraphs (a) and (b).
In sub paragraph (c) only one person objected regarding priority.
The other 47 persons accepted their places in sub paragraph (c).
This also shows the justness of the report,.
Subject to the following directions, the report of Mr. D. Mookerjee dated 23 September, 1976 is accepted and con firmed.
The Managing Committee of the New Friends Co opera tive Society Ltd. (hereinafter called "the new Managing Committee") elected at the meeting held on 29 August, 1976 shall assume charge with effect from the date of this order.
The new Managing Committee shall send to all persons referred to in sub paragraphs (a) to (e)of paragraph 37 of Mr. Mookerjee 's report, through Mr. Mookerjee, a letter stating that membership fee and the amount of qualifying share necessary to become a member of the Society and also copies of this order as well as the appropriate forms of application for membership of the Society and of the affida vits to be sent by the applicants to the new Managing Com mittee within one month from the date of this order.
Each person referred to in sub paragraphs (a) to (e) of paragraph 37 shall, if he desires to have any plot allot ted to him, apply for membership of the Society.
All such applications for membership of the Society shall be sent to Mr. Mookerjee within 30 days.
from the date of receipt of the documents referred to in the next preceding paragraph hereof.
If any application is not received by Mr. Mooker jee within the said period, or if the affidavit referred to in the next preceding paragraph is not enclosed with the application, or if any application or affidavit be found by Mr. Mookerjee to be 386 not in compliance with the form of the application and the affidavit sent to the applicant, Mr. Mookerjee shah reject such application.
Such rejection by Mr. Mookerjee shall be final.
All applications for membership along with affida vits, found by Mr. Mookerjee to be in order, will be for warded by Mr. Mookerjee to the new Managing Committee upon the expiry of the said period of 30 days.
Mr. Mookerjee will make a list of the persons whose applications are so forwarded by him to the new Managing Committee.
The new Managing Committee shall convene a meeting of the Committee within 30 days from the receipt of the appli cations along with the affidavits sent by Mr. Mookerjee to the new Managing Committee as aforesaid and pass a resolu tion accepting all such applicants for membership as members of the Society.
The new Managing Committee shall convey to Mr. Moo kerjee its said resolution within 14 days of the passing of such resolution and shall send to Mr. Mookerjee at least as many copies of the resolution as the number of persons who are admitted as members of the Society by virtue of that resolution.
Mr. Mookerjee will thereafter send a copy of the said resolution to each of the applicants Who is admit ted as a member of the Society by virtue of the said resolu tion.
On receipt of the said communication from.
Mr. Mookerjee each person who has been admitted as member of the Society by virtue of the said resolution shall, within 14 days from the receipt of the communication from Mr. Mooker jee, pay to Mr. Mookerjee by Bank Draft (drawn in favour of "New Friends Co operative House Building Society Ltd.") an amount including the membership fee and the amount of quali fying share necessary to become a member of the Society.
Mr. Mookerjee will thereafter forward the Bank Drafts to the new Managing Committee.
Regarding the allotment of plots, the suggestions of Mr. Mookerjee contained in sub paragraphs (a) and (b) of paragraph 37 of his report will be given effect to by the new Managing Committee, subject to the availability of plots and subject also to each person referred to in the said two sub paragraphs and to whom any plot is allotted complying with the direction contained in the preceding paragraph 7 hereof and further subject to each such person paying his full share of the money payable to the Delhi Development Authority under the Supplementary Agreement entered into between the President of India and the Society on 1 Febru ary, 1972 by a Bank Draft drawn in favour of the Delhi Development Authority".
The allotment of plots among persons referred to in sub paragraphs (a)and (b) of paragraph 37 of Mr. Mookerjee 's report shall be in the order of priority mentioned there and already earmarked for them.
If plots which are already earmarked for persons in subparagraphs (a) and (b) are not available then there will be allotments to those persons by draw of lots first among those in sub 387 paragraph (c): and thereafter among those in sub pargraph (b).
Mr. Mookerjee will prepare a list of persons to whom plots are so allotted and send copies of,the list of the new.
Managing Committee and,the Delhi Development Authority and inform the persons to Whom, such allotments are made.
Each person referred to in the said.
sub paragraphs.
(a) and (b) of paragraph 37 and to whom any plot is allotted shall, within (b) days from the receipt of the communication from Mr. Mookerjee as referred to reparagraph 6 hereof, enquire from the Delhi Development Authority as to the sum payable by him to the Delhi Development Authority as afore said and upon receipt of the reply from the Delhi Develop ment Authority pay the sum to the latter by a Bank Draft within 15 days from the date of the receipt of the reply.
In default of such payment the allotment to him will stand cancelled.
In the event of any such cancellation allotment may be made to the next person if any, in this sub para graph.
Thereafter, if any plot or plots remain to be allotted the allotment or allotments shall strictly be in accordance with the order of priority laid down in paragraph 37 of Mr. Mookerjee 's report.
Such allotments shall be made by Mr. Mookerjee by means of draw of lots first among the persons referred to in sub paragraph (c) thereafter among those in sub paragraph (d) and thereafter among those in sub paragraph (e) of paragraph 37 of his report.
Mr. Moo kerjee will prepare a list of persons to whom the plots are so allotted and send copies of the list to the new Managing Committee and the Delhi Development Authority and inform the persons to whom such allotments are made.
Any person referred to in sub paragraphs (c), (d) and (e) of Mr. Moo kerjee 's report who is allotted any plot shall within 14 days from the receipt of the communication from Mr. Moo kerjee to the effect that a particular plot has been allot ted to him enquire from the Delhi Development Authority as to the sum payable by him to the Delhi Development Authority as aforesaid and upon receipt of the reply from the Delhi Development Authority pay the sum to the latter by a Bank Draft within 15 days from the date of the receipt of the reply.
In default of such payment the allotment to him will stand cancelled.
In the event of any such cancellation, allotment may be made to next person, if any, in that subparagraph.
Each allotment of plot, referred to in this order, shall be in accordance with the application of each appli cant for membership referred to in paragraph 3 hereof, that is to say, will not be entitled to any allotment of any land, the area whereof is different from the area mentioned in his application form.
If any person referred to in any of the sub para graphs of paragraph 37 of Mr. Mookerjee 's report has al ready paid any money to the Society and proves such payment to Mr. Mookerjee, the money so paid and proved shall be appropriated towards payment of the amounts mentioned in paragraphs No. 7, 8 mad 11 hereof.
388 14.
Upon allotment of land to any person mentioned in this Report each allottee shall pay to the Society a sum of Rs.1,000/ within one month from the date of such allotment as and by way of costs relating to these proceedings.
In default of payment of such sum, the allotment to such person shall stand cancelled.
In the event of any such default, the procedure laid down in paragraph 10 and 11 hereof shall be followed.
To sum up.
In the event of any lucia default the allotment may be made to the next person, if any, in the sub paragraph group of the defaulting persons and thereafter to next sub paragraph group of persons.
No lease shall be granted to any allottee until and unless all directions contained in this order are fully complied with by him.
The Society shall pay to Mr. Mookerjee a further sum of Rs.45,000/ as his remuneration for the work done by him so far.
The Society shall also pay Mr. Mookerjee a further stun of Rs.5,000/for the work to be done by him under this order and also such further sum or sums as he may intimate to the new Managing Committee as extra expenses, including remuneration for his staff, postage etc.
for the work to be done under this order.
Mr. Mookerjee 's Personal Assistant Mr. Jain will be paid Rs.300/ per month.
This order shall not apply to such members of the Socie ty who have already obtained leases from the President of India.
This order will govern only the affairs of this Society and will not be a precedent for the affairs of any other co operative society.
Some persons have deposited monies with the Registrar of this Court.
The Registrar may hand over the money to the Society.
Writ Petition No. 340 of 1972, 1526 of 1973 and 286 of 1974 and all proceedings in these writ petitions are dis posed of accordingly.
All parties will pay and bear their own costs.
P.H.P. Petitions allowed.

summary:
On 6 7 1971 the Lt. Governor of Delhi passed an award directing the New Friends Co operative House Building Socie ty Limited to pay Rs.22 lacs to the Delhi Administration.
On 9 7 1971 the Lt. Governor by a notification removed the elected Managing Committee and appointed a nominated Manag ing Commitee under rule 56 of the Delhi Cooperative Socie ties Rules, 1950 framed under the Bombay Cooperative Socie ties Act 1925 as applied to Delhi.
The term of the Manag ing Committee was for one year.
On 23 10 1971 the nominated Managing Committee passed a resolution to make the award of the Lt. Governor a rule of the court.
In December, 1971, the nominated Managing Committee passed a resolution for having direct sub leases and in January 1972 called for more funds.
In July, 1972, the Lt. Governor issued a second notification extending the term of the nominated Managing Committee by further two years.
287 members of the Society filed writ petition No. 340 of 1972, challenging the rites of rule 56 and challenging the action of the Lt. Governor in superseding the elected Managing Committee and in extending the term of the nominat ed Managing Committee by a further period of 2 years.
On 30 4 1973, the nominated Managing Committee issued a circu lar asking the members of the Society to pay certain amounts.
On 6 7 1973, this Court restrained the Society and its Chairman from declaring any member a defaulter.
On 13 8 1973, this Court directed that all the interim orders passed in the writ petition should be confined to the 287 petitioners.
On 16 8 1973, K.V. Johar filed a writ petition in a representative capacity under Order 1 rule 8 of the C.P.C. on behalf of all the members of the Society.
On 17 8 1973, the nominated Managing Committee declared 321 members as defaulters.
On 21 9 1973 this Court restrained the Society from taking any steps in pursuance of the said resolution.
On an application made by respondent No. 6 the stay granted in K.V. Johar 's petition was vacated.
However, application for vacating the stay order in Raj Rani 's petition was not pursued.
On 6 1 1974 the nominated Managing Committee declared 39 members as defaulters for non payment of dues and 42 members as defaulters for not submitting the affidavits.
On 25 1 1974 the nominated Managing Committee decided to enrol 60 new members.
On 26 1 1974 a confidential letter was ad dressed by respondent No. 6 to the Lt. Governor seeking his approval to the enrolment of 60 new members and allotment of plots to them.
On the same day the Lt. Governor gave his approval.
Two C.M. Ps. were filed by the writ petitioners challenging the declaration of the members as defaulters and enrolment of 60 new member`.
This Court on 29 3 1971 di rected that all the papers including resolutions, original applications and original allotments should be produced in the Court.
This Court also restrained the nominated Manag ing Committee by an injunction from taking any steps in any manner.
On 4 4 1974.
this Court passed direction in respect of some members who were declared defaulters and who had made part payments either within the time prescribed or even beyond the time prescribed.
This Court also mentioned that the allotment of plota to 60 new metal:era who were cha racterised as very important persons appeared 372 to have been made in undue haste and the persons on the waiting list were not considered and that no notice was given to persons inviting applications.
This Court directed that the list of 60 new members had to await final adjudica tionand also directed that no further steps should be taken in the case of those 60 allottees.
The Court also directed that the cases of remaining 24 defaulters would be consid ered if it came to the conclusion that the allotment in favour of 60 new members could not be allowed to stand.
Rule 24 of the Delhi Cooperative Societies Rules 1973, requires a person to apply for membership in writing in the form prescribed by the Society.
His application is to be ap proved by the Managing Committee of the Society.
He has to fulfil other conditions laid down in the Act, the Rules and the Bye laws.
Rule 25 provides that a person shall not be eligible for admission as a member if he owns a residential house or a plot of land for the construction of a residen tial house in Delhi.
Rule 30 provides that on receipt of an application for membership the Cooperative Society shall enter particulars of the application in the register of applications in the form mentioned therein.
It also re quires the Society to dispose of the application received as early as possible and in no case later than the expiration of a period of one month from the date of receipt of the application.
Rule 30 further provides that the person whose membership has been approved by the Managing Committee of a Cooperative Society shall deposit the membership fee and the amount of qualifying shares necessary to become a member within 14 days of the passing of the resolution of the Managing Committee approving the membership of the person concerned.
Bye law 5 provides that every person seeking membership of the Society shall sign a declaration to the effect that he or his wife or any of his dependants does not own a dwelling house or a plot in Delhi.
When the writ petitions came up for final hearing along with the C.M.Ps.
on 29 8 1974 this Court appointed Shri Deb Brat Mukherjee as Chairman of the Society.
The Chairman was asked to scrutinise whether any person had been either illegally brought in as a member or illegally removed having regard to the rules, the bye laws and the regulations of the Society.
The Chairman restored the membership of the alleged default ers and published a tentative voters ' list.
The Chairman declared that out of the 60 new allottees 21 did not have applications for membership and 38 were illegally admitted and could not be included in the voters ' list.
The chairman said that the allotment of plots in their favour could not be upheld.
11 persons out of the 60 new allottees filed two C.M.Ps.
in August 1976 praying for an injunction restraining the chairman from holding elections.
These applications were filed without serving any party to the proceedings contrary to the rules and practice of the court.
On 23 9 1976, the Chairman submitted his report.
Allowing the writ petitions, HELD: 1.
The date of the application, prescription of time for deposit of membership fee and the amount of qualifying shares, and the filing of the requisite declaration are formalities which cannot be disregarded.
The Chairman rightly came to the conclusion that the new allottees could not be treated as members.
The new allottees were taken in without considering the persons on the waiting list.
It was incumbent on the Society to act in accordance with clause 7 of the Lt. Governor 's award.
The Managing Committee took 38 persons as members unlawfully.
The declaration of default ers could not have been made except by the General Body with a special majority and with the approval of the Regis trar.
The nominated Managing Committee could not have functioned after 1st April 1973 in view of the provisions of section 92 read with section 32 of the Delhi Cooperative Societies Act 1972.
In view of the award of the Lt. Governor dated 6 7 1971 the Committee had no jurisdiction to declare any member a defaulter.
The act of declaration of defaulters of 6 1 1974 cannot be dis associated from the enrolment of new allottees on 25th and 26th January 1974.
The report of the chairman in restoring membership to the 108 alleged defaulters is just and correct.
The circular dated 30 4 1973 issued by the nominated Managing Committee is not a notice within the meaning of 373 the bye laws of the Society and the declaration of default ers on the basis of the circular is illegal and contrary to the bye laws of the Society.
The circular was despatched after the time for payment mentioned therein was over.
No opportunity was given to a member as required by the amended bye laws to show cause why his right to a plot would not be forfeited.
The order of this court dated 6 7 1973 continued to be in force in so far as the petitionrs in Raj Rani 's petition are concerned.
Therefore, the declaration of defaulters from amongst the petitioners in Raj Rani 's peti tion was unjustified.
The action of the nominated Managing Committee declaring defaulters was in bad faith because they wanted to confer benefits on other persons in the guise of declaration of defaulters.
[381 A B, D, E, H, The Chairman rightly came to the conclusion that out of the 42 declarations of defaulters for not submitting affidavit 30 members had genuine grievances.
[384 F] The Chairman rightly held that the 4 persons whose money was lying with the Society should be made members.
The Chairman also rightly held that the 4 persons whose lands had been acquired by the Society should be accepted as members [385A B] The priority fixed by the Chairmaan about allotment of plots is just.
[385 C] [The Court with a view to ensuring that the persons mentioned in the Chairman 's report should get the reliefs mentioned in the report held that those persons should make fresh applications with affidavits through the Chairman 'and the allotment of plots should be made in accordance with the priority laid down by the Chairman.]


judgement:
Appeal No. 1868 of 1968.
Appeal from the Judgment and Decree dated the 21st February 1968 of the Judicial Commissioner 's Court at Goa, Daman and Diu in Appeal No. 3370 of 1964.
S.V. Gupte, Naunit Lal and (Miss) Lalita Kohli for the Appellant.
V.C. Mahajan and R.N. Sachthey for Respondents.
The Judgment of the Court was delivered by BEG, J.
The Plaintiff appellant Timblo Irmaos Ltd., (hereinafter referred to as 'the Company ') had sued Jorge Anibal Matos Sequeira and his wife (hereinafter referred to as Sequeiras ') for recovery Rs. 2,82,141/ claimed under a contract of 23rd January, 1954, and a sum of Rs. 1,14,700/ , claimed under another contract of 4th February, 1954.
The Sequeiras counter claimed Rs. 3 lakhs as price of 8000 tons of iron ore supplied to the Company; and pleaded that a sum of Rs. 1,13,000/ , advanced by the Company to the Se queiras was to be adjusted after final determination of the amount due as price, of goods sold and supplied.
The Sequeiras are holders of a mining concession.
They, it was alleged, had entered into the two contracts, one of 23rd January, 1954, through their attorney, Ramesh Jethalal Thakker (hereinafter referred to as Thakker Junior), for supplying 8000 tons of iron ore, altered in some respects, by a later agreement, and the other of 4th February, 1954, alleged to be binding on the Sequeiras although entered into through Jethalal C. Thakker (hereinafter referred to as 'Thakker Senior '), the.father of R.J. Thakker.
The most important clause in the contract of 23rd January, 1954, was that iron ore should be loaded in a ship 'Mary K ' at Marmagoa, and that the loading must be done at the rate of 500 tons per 'weather working day" of 24 hours.
Under the contract, the rate of demurrage for not loading the ship in time was to be paid at the rate of US $ 800.00 per day an pro rata for each fraction of a day.
The buyer company was to pay what was called "despatch money" at half the rate of demurrage for time saved in loading.
The payment was to be in the Portuguese Indian rupees at the exchange rate of Rs. 4.76 per US $.
The buyers had also to make an initial payment of Rs. 55,000/ as soon, as delivery by load ing began.
The buyers were also to establish a Letter of Credit, before 27th January, 1954, in favour of 453 the sellers, the Sequeiras, for the full value of the iron ore after deducting Rs. 55,000/ paid initially, and Rs. 1/4 per gross ton awaiting final settlement by presentation within ten days, at the bank named in the agreement, by presentation of the certificate of weight issued by the Master of the vessel.
Certificates of the quality and specifications and of final weighment were to be sent by the buyers after the vessel 's arrival at the port of dis charge.
The second agreement of 4th February, 1954, relates to loading of 6000 to 9000 tons of iron ore of given quality and specifications in the ship 'Mary K ' at the minimum rate of 500 tons per day commencing delivery within 24 hours of the buyer notifying the requirements to the seller.
It also contained other stipulations similar to those of the first one.
The important point to note about this agreement is that it is signed by Jethalal C. Thakker as the attorney of his son Ramesh Jethalal Thakker.
It appears that the clause relating to initial payment was changed so that the sellers, Sequeiras, were paid Rs. 1,13,000/ between 25th January, 1954, and 22nd July, 1954.
It also appears that there was delay in delivery for which the plaintiff claimed demurrage.
There were also complaints about alleged departure by the seller from the specifica tions agreed upon.
The Sequeiras, the sellers, had it seems, also applied for an interim injunction so that the ship 's loading capacity may be checked.
Under orders of the Court, an inspection of the ship was made and a report was submitted by an expert on 15th March, 1954, after the deter mination of its loading capacity so that the ship could finally sail only on 16th March, 1954.
The Margao Comarca Court, where the claim and the counter claims were filed, held that the seller 's attorney, Thakker Junior, who had received Rs. 1,13,000/ , which had to be deducted from the price of the iron ore supplied, was not duly authorised by the power of attorney executed by the Sequeiras to sell.
The Court did not find enough material to reach a definite conclusion about the quantity of ore supplied and left that to be determined in execution pro ceedings.
It, however, held the first contract to be binding between the parties as it had been ratified by the seller and acted upon by the buyer.
But, the second contract was held to be not binding upon the Sequeiras as Thakker (Jun ior) was found to have been given only a limited authority so that he could not constitute his father his attorney for the purpose of executing the second agreement.
The Trial Court accepted the basis of the counter claim of the Sequei ras and found that the company had committed breaches of contract but left the quantum of damages to be determined in execution proceedings.
The decree of the Trial Court was substantially affirmed in appeal.
Nevertheless, the Additional Judicial Commission er Goa, Daman & Diu, had modified the decree, the appellant company has come up to this Court in appeal as of right.
Two questions arise for determination before us.
The first is whether the second contract of 5th February, 1954, was duly covered by the authority conferred by the Sequeiras upon their attorney, Ramesh Jethalal Thakker, or not.
The second 454 relates to the amount of demurrage, if any, payable by the Sequeiras, the defendants respondents, to the plaintiff appellant.
On the first question, the Judicial Commissioner concen trated on the dictionary meaning of the word "exploitation" used in the power attorney executed by the Sequeiras in favour of Thackker Junior.
The learned Judicial Commissioner took the meaning of the word from Chambers ' 20th Century Dictionary which gave: "the act of successfully applying industry to any job, as the working of mines, etc; the act of using for selfish purposes".
The learned Judicial Com missioner also referred to the inability of learned Counsel for the company to cite a wider meaning from the Oxford Dictionary which the learned Counsel had carried with him to the Court.
The Judicial Commissioner then ruled: "Hence, I see no escape from the conclu sion that on the basis of the power of attor ney given by Sequeira to Ramesh the latter could not have entered into any agreement for sale of ore extracted from the mine belonging to Sequeira on his behalf.
Consequently, Sequeira is not bound by the agreement dated 4th of February, 1954".
As already mentioned by us, the first con.tract of 23rd January, 1954, was held to be binding despite this finding because the parties had acted upon it and dealt with each other on the basis that such a contract existed.
We think that this background can be taken into account as indicating what the parties themselves understood about the manner in which the words used in the power of attorney dated 17th January, 1953, executed by Sequeiras in favour.of Thackker Junior was related to the actual facts or dealings between or by the parties.
Moreover, the power of attorney had to be read as a whole in the light of the purpose for which it was meant.
As it is not lengthy, we reproduce its operative part.
It reads: "Jorge Anibal de Matos Sequeira, mar ried, major of age, businessman, landlord, residing in Panglm, whose identity was war ranted by witnesses, said in the presence of the same witnesses that by the present letter of attorney he appoints and constitutes his attorney Mr. Ramesh Jethalal, Bachelor, major of age, businessman, from Bombay, residing at present in Bicholim and conters on him the power to represent him, to make applications, allegations, and to defend his right in any public offices or Banks, to draw up and sign applications, papers, documents and corre spondence; specially those tending to acquire petrol, gunpowder, train, transport vehicles, machines, furniture (alfaias) and other in struments used in mining industry, apply for and obtain licences for importation and expo ration, to give import and export orders, even temporary, sign applications, suits and only other things necessary, attach and withdraw documents, make declaration.
even under oath and in general any powers necessary for the exploitation of the mine named Pale Dongor situate at Pale for the concession of which the said Siqueira applied and which he is going to obtain to impugn, object, 455 protect and prefer appeals upto the higher Courts, notify and accept notifications and summons in terms of Sec. 35 and 37 of the C.P.C., to use all judicial powers without any limitation, to subrogate these powers to some one else.
This was said and contracted.
The witnesses were Bablo Panduronga Catcar ad Xec Adam Xecoli, both married landlords, major of age from Bicholim who sign below".
Apparently, practice and custom have some bearing on these transactions in Goa.
It is this reason that, although the power of Attorney was executed by Mr. Sequeira, yet, his wife was impleaded, according to the practice in Goa, and no objection was raised either on the ground that she was wrongly impleaded or that the power of attorney was vitiated on the ground that it was executed only by her husband.
In any case, the subsequent agreement of 23rd January, 1954, which was held to have been acted upon, and the similar agreement of 5th February, 1954, of which also the defend ants were bound to have and did have full knowledge, were never repudiated by Sequeiras, before the filing of the suit before us.
Indeed, the agreement of 5th February, 1954, appears to be a sequal to the first agreement of 23rd January, 1954.
We do not think that the two could be really separated in the way in which the Judicial Commissioner thought that they could be by holding that the one was acted upon whereas the other was not.
In any case, the second was the result of and a part of the same series of dealings between the parties.
We do not however propose forest our findings on the ground that the parties are bound by the second agreement due to some kind of estoppel.
We think that the terms of the power of attorney also justify the meaning which the parties themselves appear to have given to this power of attorney that is to say, a power to conduct business on behalf of the Sequeiras in such a way as to include sales on behalf of Sequeiras.
We think that perhaps the most important factor in interpreting a power of attorney is the purpose for which it is executed.
It is evident that the purpose for which it is executed must appear primarily from the terms of the power of attorney itself, and, it is only if there is an unresolved problem left by the language of the document, that we need consider the manner in which the words used could be related to the facts and circumstances of the case or the nature or course of dealings.
We think that the rule of construction embodied in proviso 6 to Section 92 of the Evidence Act, which enables the Court to examine the facts and surrounding circumstances to which the language of the document may be related, is applicable here, because we think that the words of the document, taken by themselves, are not so clear in their meanings as the learned Judicial Commissioner thought they were.
As we have already mentioned, the learned Judicial Commissioner chose to concentrate on the single word "ex ploitation" torn out of its context.
The word "exploita tion" taken by itself, could have been used to describe and confer only such general powers as may be 13 1546 SCI/76 458 them.
If the word 'negotiate ' had stood alone, its meaning might have been doubtful, though, when applied to a bill of 'exchange or ordi nary promissory note, it would probably be generally understood to mean to sell or dis count, and not to pledge it.
Here it does not stand alone, and, looking at the words with which it is coupled, their Lordships are of opinion that it cannot have the effect which the appellant gives to it, and, for the same reason, 'dispose of ' cannot have that effect".
We think that this case also bears out the mode of construc tion adopted by us.
We were then referred to O.A.P.R.M.,A.R.
Adaikappa Chettiar vs Thomas Cook & Son (Bankers) Ltd.,(1) where the well known principle of ejusdem generis was applied to hold that general words following words conferring specifically enumerated powers "cannot be construed so as to enlarge the restricted power there mentioned".
In this case, the purpose of the general power was subordinated to the specif ic powers given which determined the object of the power of attorney.
There is no deviation in this case from the general rules of construction set out above by us.
We have indicated above that implied powers cannot go beyond the scope of the general object of the power but must necessari ly be subordinated to it.
In fact, in a case like the one before us, where a general power of representation in ' various business transactions is mentioned first and then specific instances of it are given, the converse rule, which is often specifically stated in statutory provisions (the rules of construction of statutes and documents being large ly common), applies.
That rule is that specific instances do not derrogate from the width of the .general power ini tially conferred.
To such a case the ejusdem generis rule cannot be applied.
The mode of construing a document and the rules to be applied to extract its meaning correctly depend upon not only upon the nature and object but also upon the frame, provisions, and language of the document.
In cases of uncertainty, the rule embodied in proviso 2 to Section 92 of the Evidence Act, which is applicable to contracts, can be invoked.
Thus, the ultimate decision, on such a matter, turns upon the particular and peculiar facts of each case.
Coming now to the second question, we find that the findings of fact recorded by the Judicial Commissioner are unexceptionable.
Firstly, it was found that, although, under the contract, the defendants respondents could load iron ore at any time during 24 hours, which included the night, yet, the defendants were prevented from doing so owing to the failure of the plaintiff to provide either sufficient light ing or enough winches to enable due performance of the contract.
Secondly, it was admitted that the appellant never opened a Letter of Credit with the named bank by 27 January, 1954, as promised by it.
Thirdly, the delay in loading was held to be due to the fault of the company.
The Judicial Commissioner rightly concluded that the company had not discharged its own part of the contract so that it could not claim (1) 459 demurrage or damages.
Indeed, it was found that the company did not have to pay any demurrage at all to the shippers for delayed departure.
Learned Counsel for the appellant relied strongly on the following terms in the contract of 23rd January, 1954: "Demurrage (if any) in loading payable by Seller at the rate of US $ 800.00 per running day fraction of day pro rata.
Buyers to pay despatch money at half the demurrage rate for all time saved in loading.
Payment either way in Portuguese Indian rupee currency at the rate of exchange of Rs. 476/ for US $ 100.00.
" The contention was that this created an absolute liability to pay for delay in loading irrespective of whether the company had to pay the shippers any demurrage.
It was urged that the liability was upon the seller irrespective of whether such payment had to be made to the shipping company or not.
We think that the demurrage could not be claimed when the delay in loading was due to the default of the respondents themselves.
It is apparent that the basis upon which the agreement to pay demurrage rested was that the appellant will afford proper facilities for loading.
When the appellant itself had committed breaches of its obliga tions, it is difficult to see how the respondents could be made responsible for the delay in loading.
We think that the Judicial Commissioner had rightly disallowed this part of the claim.
In the result, we partly allow this appeal, set aside the finding of the Judicial Commissioner as regards the binding nature of the contract dated 5th February, 1954.
We hold that this document embodied the terms of an agreement which was legally binding on both sides before us.
The case will now go back to the Trial Court for determination of the liabilities of the parties to each other for alleged breaches of contract except to the extent to which the findings negative the claim to demurrage and the admitted payment of Rs. 1,13,000/by the appellant to the defendants which will have to be taken into account.
The parties will bear their own costs.
P.H.P. Appeal allowed in part 462 Ltd., Calcutta vs Commissioner of Excess Profits Tax, West Bengal(1) wherein the High Court held .that when a party at whose instance the reference had been made under section 66(1) of the Indian Income tax Act, 1922 does not appear at the hearing of the reference, the High Court is not bound to answer the question referred to it and should not do so.
It is urged by Mr. Manchanda that the above decision has been followed by some of the other High Courts.
As against that Mr. Desai on behalf of the appellant has urged that the correctness of those decisions is open to question in view of the decision of this Court in the case of Commissioner of Income tax, Madras vs
section Chenniappa Mudaliar(1).
It was held by this Court in that case that an appeal filed by the assessee before the Tribunal under section 33 of the Act should be disposed of on merits and should not be dismissed in default because of non appearance of the appellant.
The Court in this context referred to section 33(4) of the Act and particularly the word "therein" used in that sub sec tion.
It is urged by Mr. Desai that as the Tribunal is bound to dispose of the appeal on merits even though a party is not present, likewise the High Court when a question of law is referred to it, should dispose of the reference on merits and answer the question referred to it.
In our opinion, it is not essential to express an opinion about this aspect of the matter, because we are of the opinion that the High Court was not functus Officio in entertaining the application which had been filed on behalf of the appel lant for re hearing the reference and disposing of the matter on merits.
A party or its counsel may be prevented from appearing at the hearing of a reference for a variety of reasons.
In case such a party shows, subsequent to the order made by the High Court, declining to answer the reference, that there was sufficient reason for its nonappearance, the High Court, in our opinion, has the inherent power to recall its earlier order and dispose of the reference on merits.
We find it difficult to subscribe to the view that whatever might be the ground for non appearance of a party, the High Court having once passed an order declining to answer the question referred to it because of the non appearance of that party, is functus officio or helpless and cannot pass an order for disposing of the reference on merits.
The High Court in suitable cases has, as already mentioned, inherent power to recall the order made in the absence of the party and to dispose of the reference on merits.
There is nothing in any of the provisions of the Act which, either expressly or by necessary implication, stands in the way of the High Court from passing an order for disposal of the reference on merits.
The courts have power, in the absence of any ex press or implied prohibition, to pass an order as may be necessary for the ends of justice or to prevent the abuse of the process of the court.
To hold otherwise would result in quite a number of cases in gross miscarriage of justice.
Suppose, for instance, a party proceeds towards the High Court to be present at the time the reference is to be taken up for hearing and on the way meets with an accident.
Suppose, further, in such an (1) (2) 463 event the High Court passes an order declining to answer the question referred to it because of the absence of the person who meets with an accident.
To hold that in such a case the High Court cannot recall the said order and pass an order for the disposal of the reference on merits, even though full facts are brought to the notice of the High Court, would result in obvious miscarriage of justice.
It is to meet such situations that courts can exercise in appropriate cases inherent power.
In exercising inherent power, the courts cannot override the express provisions of law.
Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal of the reference on merits, the courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the court with due diligence and shows sufficient cause for its non appearance on the date of hearing.
Our attention had been invited to the decision of the Alla habad High Court in Roop Narain Ramchandra (P) Ltd. vs Commissioner of Income tax, U.p.(1) wherein the High Court held that it has no power to recall an order returning a reference unanswered.
For the reasons stated above, we are unable to agree with the view taken by the Allahabad High Court in that decision.
The facts brought out in the appli cation flied on behalf of the appellant show, in our opin ion, that there was sufficient cause for the non appearance on behalf of the appellant on the date of hear ing as well as for the non filing of the paper books within time.
It also cannot be said that there was lack of dili gence on the part of the appellant in approaching of the High Court for recalling it 's earlier order and for dispos ing of the reference on merits.
We accordingly accept the appeal, set aside the order of the High Court and remand the case to it for answering the questions referred to it on merits.
Looking to all the circumstances, We make no order as to costs.
M.R. Appeal al lowed.
(1) 466 The Judgment of the Court was delivered by BHAGWATI, J. There is a house bearing No. 10 A situ ate at Khuldabagh in the city of Allahabad belonging to respondent No. 3.
This house consists of a ground floor and a first floor.
There are two tenements on the ground floor and two tenements on the first floor.
Each of the two tene ments in the first floor is in the possession of a tenant.
The tenement on the northern side of the ground floor is in the possession of respondent No. 3, while the tenement on the southern side is in the possession of the appellant as a tenant since the last over 35 years.
The appellant pays rent of Rs. 4/ per month in respect of the tenement in his occupation.
Respondent No. 3, after determining the tenan cy of the appellant, made an application before the Rent Control and Eviction Officer, Allahabad under section 3 of the U.P. Rent Control & Eviction Act, 1947 for permission to file a suit to eject the appellant on the ground that she bona fide required the rented premises in the possession of the appellant for her use and occupation.
The Rent Control & Eviction Officer, on a consideration of the evidence led before him, came to the conclusion that the need of respond ent No. 3 for the rented premises was not bona fide and genuine and on this view, he rejected the application of respondent No. 3 by an order dated 23rd February, 1972.
Respondent No. 3 preferred a revision application against the decision of the Rent Control and Eviction Officer to the Commissioner and, on the coming into force of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 (U.P. Act No. 13 of 1972), this revision application came to be transferred to the District Court under section 43 (m) of that Act and it was numbered as Civil Appeal No. 245 of 1972.
The District Judge by an order dated 12th January, 1973 agreed with the view taken by the Rent Control and Eviction Officer and dismissed the appeal.
However, within a short time thereafter, respondent No. 3 undaunted by her failure, filed an application before the Prescribed Authority on 18th January, 1974 under section 21(1) of U.P. Act No. 13 of 1972 claiming release of the rented premises in her favour on the ground that she bona fide required them for occupation by herself and the members of her family for residential purposes.
The Prescribed Authority held that Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 was attracted in the present case, since the ground floor of house No. 10 A constitute a build ing, a part of which was under tenancy of the appellant and the remaining part was in the occupation of respondent No. 3 for residential purposes, and hence it must be held to be conclusively established that the rented premises were bona fide required by respondent No. 3.
The Prescribed Au thority also went into the question of comparative hardship of the appellant and respondent No. 3 and observed that greater hardship would be caused to respondent No. 3 by refusal of her application than what would be caused to the appellant by granting it.
On this view, the Prescribed Authority allowed the application of respondent No. 3 and released the rented premises in her favour.
The appellant being aggrieved by the order passed by the Prescribed Authority prefered an appeal to the District Court, Allahabad.
The 467 District Court agreed with the view taken by the Prescribed Authority that Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 was applicable to the facts of the present case and "that fact conclusively proved that the building was bona fide required" by respondent No. 3.
But on the question of greater hardship, the District Court disagreed with the conclusion reached by the Prescribed Authority and held that the appellant was likely to suffer greater hard ship by granting the application than what respondent No. 3 would suffer by its refusal.
The District Court accordingly allowed the appeal and rejected the application of respond ent No. 3 for release of rented premises.
This led to the filing of a writ petition by respondent No. 3 in the High Court of Allahabad challenging the legali ty of the order rejecting her application.
Respondent No. 3 contended that since her bona fide requirement of the rented premises was established by reason of applicability of Explanation (iv) to section 21 (1) of U.P. Act No. 13 of 1972, the question of comparative hardship was immaterial and the District Court was in error in throwing out her application on the ground that greater hardship would be caused to the appellant by granting her application than what would be caused to her by refusing it.
The High Court while dealing with this contention observed that the Pre scribed Authority had recorded a finding of fact that "the accommodation on the ground floor constituted one building" and "the respondent was in possession of a part of the building and the land lady was in occupation of the remain ing part of the building for the residential purposes" and this finding of fact reached by the prescribed Authority was confirmed by the District court and in view of this finding which the High Court a apparently thought it could not disturb, the High Court proceeded on the basis that Expla nation (iv) to section 21 (1) of U.P. Act No. 13 of 1972 was applicable in the present case.
But the High Court went on to point out that once it was held that Explanation (iv) to section 21(1) of the U.P. Act No. 13 of 1972 was attracted, there could be no question of examining comparative hard ship, for in such a case greater hardship of the tenant would be an irrelevant consideration.
The High Court on this view allowed the writ petition, set aside the order of the District Court and allowed the application of respondent No. 3 for release of the rented premises but gave two months ' time to the appellant to vacate the same.
The appel lant being dissatisfied with this order passed by the High Court preferred the present appeal with special leave ob tained from this Court.
Now, it may be pointed out straight away that if Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 is applica ble in the present case, the question of comparing the relative hardship of the appellant and respondent No. 3 would not arise and respondent No. 3 would straight away be entitled to an order of eviction as soon as she shows that the conditions specified in the Explanation are satisfied.
Section 21 (1), as it stood at the material time with the retrospective amendment introduced by the U.P. Urban Build ings (Regulation of Letting, Rent & Eviction) (Amendment) Act, 1976 being U.P. Act 470 accommodation which is the subject matter of tenancy.
The question thus is: what is the sense in which the word 'buil ding ' is used when it occurs for the second time in the Explanation.
The context clearly indicates that the word 'building ' is there used to denote a unit, of which the accommodation under tenancy constitutes a part and the remaining part is in the occupation of the land, lord for residential purposes.
The accommodation under tenancy and the accommodation in the occupation of the landlord together go to make up the 'building '.
The use of the word 'part ' is a clear pointer that the 'building ', of which the accommoda tion under tenancy and the accommodation in the occupation of the landlord are parts, must be a unit.
Where a super structure consists of two or more tenements and each tene ment is an independent unit distinct and separate from the other, the Explanation would be of no application, because each tenement would be a unit and not part of a unit.
It is only where there is a unit of accommodation out of which a part is under tenancy and the remaining part is in the occupation of the landlord, that the Explanation, would be attracted.
To determine the applicability of the Explana tion, the question to be asked would be whether the accommo dation under tenancy and the accommodation in the occupation of the landlord together constitute one unit of accommoda tion ? The object of the Legislature clearly was that where there is a single unit of accommodation, of which a part has been let out to a tenant, the landlord who is in occupation of the remaining part should be entitled to recover posses sion of the part let out to the tenant.
It could never have been intended by the Legislature that where a super struc ture consists of two independent and separate units of accommodation one of which is let out to a tenant and the other is in the occupation of the landlord, the landlord should, without any proof of bona fide requirement, be entitled to recover possession of the tenement let out to the tenant.
It is difficult to see what social object or purpose the legislation could have had in view in conferring such a right on the landlord.
Such a provision would be plainly contrary to the aim and objective of the legisla tion.
On the other hand, if we read the Explanation to be applicable only to those cases where a single unit of accom modation is divided by letting out a part to a tenant so that the landlord, who is in occupation of the remaining part, is given the right to evict the tenant and secure for himself possession of the whole unit, it would not unduly restrict or narrow down the protection against eviction afforded to the tenant.
This construction would be more consistent with the policy and intendment of the legislation which is to protect the possession of the tenant, unless the landlord establishes his bona fide requirement of the accom modation under tenancy.
We may point out that Mr. Justice Hari Swarup has also taken the same view in a well consid ered judgment in Chuntwo Lal vs Addl.
District fudge.
Alla habad(1) and that decision has our approval.
Since the question as to the applicability of Explana tion (iv) on the facts of the present case has not been considered by the High Court as well as the lower courts on the basis of the aforesaid construction of the Explanation, we must set aside the judgment of the High Court as also the order of the District Court and remand the case to the District Court with a direction to dispose it of in the light 471 of the interpretation placed by us on the Explanation, It was contended before us on behalf of the appellant that since Explanation (iv) has been omitted by U.P. Act No. 28 of 1976, respondent No. 3 was no longer entitled to take advantage of it and her claim for possession must fail.
But the answer given by respondent No. 3 to this contention was that the omission of Explanation (iv) was prospective and not retrospective and since Explanation (iv) was in force at the date when respondent No. 3 filed her applica tion for release, she had a vested right to obtain release of the rented premises in her favour by virtue Explanation (iv) and that vested right was not taken away by the pro spective omission of Explanation (iv) and hence she was entitled to rely on it despite its omission by U.P. Act No. 28 of 1976.
We have not pronounced on these rival conten tions since we think it would be better to leave it to the District Court to decide which contention is correct.
If the District Court finds that by reason of the omission of Explanation (iv) by U.P. Act No. 28 of 1976 respondent No. 3 is no .longer entitled to rely on it to sustain her claim for release of the rented premises in her favour, it will be unnecessary for the District Court to examine the further question as to whether Explanation (iv) is attracted on the facts of the present case, If, on the other hand, District Court finds that the omission of Explanation (iv) by U.P. Act No. 28 of 1976 being prospective and not retrospective, respondent No. 3 is entitled to avail of that Explanation, the District Court will proceed to decide whether the two tenements or the .around floor constituted one single unit of accommodation so as to attract the applicability of Explanation (iv) and for this purpose, the District Court may, if it so thinks necessary, either take further evidence itself or require further evidence to be taken by the Pre scribed Authority.
If the District Court finds that the case is covered by Explanation (iv), there would be no ques tion of examining comparative hardship of the appellant and respondent No. 3, and respondent No. 3 would straight away be entitled to an order of release of the rented premises in her favour.
On the other hand, if the District Court comes to the conclusion that by reason of the omission of Explanation (iv) of the U.P. Act No. 28 of 1976 respondent No. 3 is not entitled to rely on it or that Explanation (iv) is not applicable on the facts of the present case, the application of respondent No. 3 would fail, since it has already been found by the District Court and we do not ' propose to disturb this finding that the appellant would suffer greater hardship by granting of the application than what would be suffered by respondent No. 3 if the application were to be refused.
We accordingly remand the matter to the District Court with no order as to costs.
P.H.P. Appeal allowed.

dataset_name: IN-Abs

summary:
The appellant.company sued Mr. & Mrs. Sequeira for recovery of certain amounts under two contracts of supply of iron ore.
The first contract was signed by Ramesh holder of a power of attorney of Sequeiras and the second contract was signed by Ramesh 's father as the agent of Ramesh.
Under the two contracts Sequeiras were supposed to supply and load iron ore and were liable to pay demurrage in case of delay in loading the ship and were entitled to receive certain despatch money if the loading was made earlier.
Sequeiras filed their counter claims.
The Court did 'not arrive at a definite conclusion about the quantity of ore supplied and left that to be determined in execution proceedings.
The court found that the first contract was binding between the appellant and Sequeiras as it had been ratified by Sequerias and acted upon by the appellant.
The court, however, held that the second contract was not 'binding on Sequeiras as Ramesh had a limited authority and, therefore, he could not constitute his father his attorney for the purposes of executing the second agreement.
The trial Court also found that the appellant had committed breaches of the contract but left the quantum of damages to be determined in execu tion proceedings.
The decree of the .trial Court was sub stantially confirmed in appeal by the Additional Judicial Commissioner.
HELD: 1.
The Judicial Commissioner erred in concentrat ing on only one dictionary meaning of.
the word "exploita tion" used in the power of attorney executed by Sequeiras m favour of Ramesh.
The court, while interpreting a power of attorney, has to construe the document as a .whole m the light of its purpose and surrounding circumstances and the transactions meant to be governed by it.
Practice and custom have also some bearing on the nature and effect of the power of attorney.
The purpose of the powers conferred on the power of attorney have to be ascertained having regard to the need which gave rise to the execution of the docu ment, the practice of the parties and the manner in which parties themselves understood the purpose of the document.
The powers.
which are absolutely necessary and incidental to the execution of the ascertained purposes of the general powers given must be necessarily implied.
Applying the above rules of interpretation the court came to the conclu sion that Ramesh had power to appoint an agent to execute the contract in question and therefore the second .contract was also binding on Sequeiras [454A B, 456A H] Bryant, Powls, and Bryant, Limited vs La Banque De Peuple etc.
@ 177 and 179 and Jonmenjoy Coondoo vs George ,Alder Watson, @ 912 approved.
O.A.P.R.M.A.R. Adaikappa Chettiar vs Thomas Cook & Son (Bankers) Ltd. , distinguished.
The implied powers cannot go beyond the scope of the general object tances do not derrogate from the width of the general power initially conferred of the power of attorney but must necessarily be subordinated to it Specific in to such a case ejusdem generis cannot be applied.
The mode of construing a document and the rules to be applied to extract its meaning correctly depends upon not only the nature and object but also upon the frame, provisions, and language of the documents.
In cases of uncertainty the rule embodied in proviso 2 to section 92 of the Evidence Act which is ap plicable to contracts can be invoked.
452 The ultimate decision of such a matter turns upon the prac tice and particular facts of each case.
[458D P] 3.
The findings arrived at by the Appellate Court that Sequeiras were prevented from performing their part of the contract, owing to the failure of the appellant to provide either sufficient lighting or enough winches to enable due performance of the contract, is unexceptionable.
The Judi cial Commissioner rightly concluded that the company had not discharged its own part of the contract so that it could not claim demurrage or damages.
[458 G H] The court partly allowed the appeal and remanded the matter back to the trial court for determining the liabili ties of the parties in the light of the judgment.
[459E F]