2010 (10) TMI 194 - SC - Indian Laws

Order - Reasoned order - appeal against the judgment and order dated 4-9-2002 passed by the Delhi High Court in Civil Writ Petition No. 2/98 by which the High Court has set aside the judgment and order of the Financial Commissioner dated 3-11-1997 passed in Case No. 234/97-CA, and also the judgment and order of the Registrar of the Co-operative Societies dated 26-8-1997. Presumption / Legal Fiction in law - The Legislature in its wisdom has not enacted any deeming provision providing that in case the resolution is not considered and finally decided by the Registrar within a period of six months, the resolution shall become effective and operative. It is the exclusive prerogative of the Legislature to create a legal fiction meaning thereby to enact a deeming provision for the purpose of assuming the existence of a fact which does not really exist. Even if a legal fiction is created by the Legislature, the court has to ascertain for what purpose the fiction is created, and it must be limited to the purpose indicated by the context and cannot be given a larger effect. More so, what can be deemed to exist under a legal fiction are merely facts and no legal consequences which do not flow from the law as it stands. It is a settled legal proposition that in absence of any statutory provision, the provision cannot be construed as to provide for a fiction in such an eventuality. More so, creating a fiction by judicial interpretation may amount to legislation, a field exclusively within the domain of the legislature. Writ of certiorari - The High Court ought to have considered that it was a writ of certiorari and it was not dealing with an appeal. The writ of certiorari under Article 226 of the Constitution can be issued only when there is a failure of justice and it cannot be issued merely because it may be legally permissible to do so. There must be an error apparent on the face of record as the High Court acts merely in a supervisory capacity. An error apparent on the face of the record means an error which strikes one on mere looking and does not need long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. Such errors may include the giving of reasons that are bad in law or inconsistent, unintelligible or inadequate. - Decision of high court set aside.

Issues Involved:
1. Expulsion of members from the Modern Co-op. Group Housing Society Ltd.
2. Approval of the expulsion resolution by the Registrar of Co-operative Societies.
3. Interpretation of the six-month period for the Registrar's approval under Section 36(3) of the Delhi Co-operative Societies Act, 1972.
4. High Court's extension of the six-month period to one year.
5. High Court's failure to consider the findings of the Financial Commissioner and the Registrar.
6. Judicial propriety and adherence to precedents.
7. High Court's handling of delay and laches.

Detailed Analysis:

1. Expulsion of Members:
The appellants, members of the Modern Co-op. Group Housing Society Ltd., were expelled by a resolution dated 27-4-1987. The Society sought approval from the Registrar on 20-2-1988. The Registrar issued a notice on 2-2-1996 and rejected the approval on 4-6-1996. The Society's revision petition was dismissed by the Financial Commissioner on 30-7-1996. The High Court remanded the matter to the Registrar, who again rejected the approval on 26-8-1997. The Financial Commissioner upheld this decision on 3-11-1997. The Society's writ petition was allowed by the High Court, leading to this appeal.

2. Approval of Expulsion Resolution:
The Registrar's approval is mandatory under Section 36(3) of the Act 1972. The resolution for expulsion cannot be effective without the Registrar's approval. The Registrar and Financial Commissioner found that the Society's affairs were mismanaged, no valid demands were made, and new members were enrolled without approval of the expulsion.

3. Six-Month Period for Registrar's Approval:
Section 36(3) of the Act 1972 requires the Registrar to consider and decide on the resolution within six months. The High Court erroneously deemed the resolution approved after six months despite no such deeming provision in the Act. The Supreme Court emphasized that the legislature did not intend for automatic approval after six months.

4. High Court's Extension of Six-Month Period:
The High Court extended the period from six months to one year, which the Supreme Court found to be an act of re-legislating the statutory provision. The Court held that creating a legal fiction by judicial interpretation amounts to legislation, a domain reserved for the legislature.

5. High Court's Failure to Consider Findings:
The High Court did not address the findings of the Registrar and Financial Commissioner, which included mismanagement by the Society, lack of valid demands, and premature enrollment of new members. The Supreme Court noted that the High Court's judgment lacked reasons and failed to address the core issues.

6. Judicial Propriety and Adherence to Precedents:
The High Court's decision contradicted its earlier judgment in B.B. Chibber v. Anand Lok Co-operative Group Housing Society Ltd., which held that deeming approval was not permissible. The Supreme Court emphasized that a coordinate bench must follow the decisions of an earlier bench to ensure uniformity and certainty in law.

7. High Court's Handling of Delay and Laches:
The High Court focused on the delay by the Registrar without considering that the Society itself caused the delay by submitting records late. The Supreme Court highlighted that the Society could have sought a direction from the High Court for timely decision by the Registrar. The High Court's judgment was seen as an indirect review of its earlier order.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and restoring the orders of the Registrar and Financial Commissioner. The Court directed that the appellants be adjusted against un-allotted flats, subject to payment of dues with interest. The judgment emphasized the necessity of adhering to legislative provisions, judicial propriety, and providing reasons for judicial decisions.

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