builder mafia = “Fraud” as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letters or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letters. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata.” We are prima facie of the view that the builder mafia had a big hand in getting the Societies revived. Hence we hold that the very revival of the Societies is illegal and the memberships are not genuine and hence the appeals are allowed. However, there may be some members of the Societies who must have been duped by the promoters. Therefore, we direct the DDA to refund the money deposited to the Societies along with interest @10% p.a with effect from the date when the money was deposited with the DDA. The amount be paid within 2 months from today. The Societies shall in turn ensure that within 4 weeks thereafter the amount deposited by the members is returned to them along with the interest aforesaid. This will alleviate the hardship of genuine members.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6805 OF 2013

Delhi Development Authority … Appellant(s)

Versus

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

CIVIL APPEAL NOS. 6803-6804 OF 2013

Delhi Development Authority … Appellant(s)

Versus

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

CIVIL APPEAL NO. 8627 OF 2014

Palwell CGHS Ltd. …Appellant(s)

Versus

Registrar of Co-operative Societies & Anr. …Respondent(s)
J U D G M E N T
DEEPAK GUPTA, J.
C.A.NO. 6805 OF 2013 & C.A.NOS. 6803-6804 OF 2013
These appeals are being disposed of by a common judgment since
common issues of fact and law are involved.
2. We may first refer to the facts of Civil Appeal No. 6805 of 2013
relating to Bankmens Co-operative Group Housing Society (hereinafter
referred to as the ‘Bankmens CGHS’). Some employees of the State Bank of
India resolved to form a Co-operative Group Housing Society,
namely Bankmens CGHS Ltd., on 06.10.1983 under the Chairmanship of one
Deepak Khanna. The Society was registered with one Shri R.K. Mangla, as
its Secretary. The Society had given a list of 74 promoter members.
Correspondence was exchanged between the Bankmens CGHS, Registrar of Co-
operative Societies (hereinafter referred to as ‘RCS’) and the Delhi
Development Authority (hereinafter referred to as ‘DDA’). The Bankmens
CGHS did not comply with various directions of the RCS and it was placed
under liquidation on 30.03.1992. Though Liquidator was appointed, he did
not take over the records of the Bankmens CGHS.
3. Some time between 1999-2000, almost after 16-17 years the Bankmens
CGHS had been formed, and 7 years after it was placed under liquidation, an
application for revival of the Society was filed by one Rajan Chopra.
Admittedly he was not one of the original promoters of the Society. Though
initially, objections were raised to the revival of the Society, the
Society was finally revived on 13.07.2000. On 22.08.2000, a list of 74
members of the Bankmens CGHS was approved for allotment of land and on
02.11.2001, the appellant DDA issued provisional Letter of Allotment of
land to the Society. Though the land was allotted yet the same was not
handed over to the Society. Aggrieved by this, the Bankmens CGHS filed a
Writ Petition No.1521 of 2004 before the Delhi High Court in 2004 and on
31.05.2004, this petition was disposed of with a direction that land be
provided to the Bankmens CGHS. Against this, the DDA filed an LPA No. 912
of 2004 which was disposed of on 08.02.2006, directing that the
verification of members be undertaken either by the DDA or by the RCS and,
thereafter, possession of land be handed over to the Society within a
period of two months subject to making payment as demanded by the DDA.

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

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

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

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

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

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

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

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

6. During the pendency of proceedings, this Court further noted
that many societies had been allotted land after the year 2000. It was
noted that as the price of the land started soaring in Delhi after the year
2000, this spurt in land prices led to unholy nexus between builders and
powerful persons in various authorities. Societies which were hitherto
defunct or had lost interest in allotment for one reason or another were
sought to be revived by the office of the Registrar of Cooperative
Societies and thereafter land was demanded from DDA on the basis of such
recommendation. The Court ordered DDA and Registrar of Cooperative
Societies to give details of all the societies which were allotted land
after the year 2000 and also directed them to produce the relevant files in
court along with recommendations of allotment to DDA. CBI was directed to
look into those allotments and also with regard to the members who had been
allotted land. Mr. K.C. Mittal, Advocate was appointed Amicus Curiae to
assist the Court.”
The High Court observed that since the builder mafia was very influential
and there was collusion between the builder mafia and officers of the RCS,
the investigation should be carried on by the CBI. The Director, CBI
submitted his report pointing out that out of the 135 societies only 19
appeared to be genuine. The CBI both in the case of Bankmens CGHS and
Safdarjung CGHS filed chargesheet against some of the office bearers of
these two Societies and also officials of the RCS and the RCS himself,
alleging that the Societies were revived in an illegal manner.
9. As far as Bankmens CGHS is concerned the charges are that the revival
application was filed by one Rajan Chopra by hatching a criminal conspiracy
along with officials of RCS and Shri R.K. Srivastava, Registrar of the RCS,
to fabricate and manufacture false documents to revive the Bankmens CGHS.
The address of the Society was changed. It is also alleged that Rajan
Chopra submitted a forged ‘No Objection Certificate’ dated 29.12.1999
purported to have been issued by Shri Vipin Gandotra, Proprietor of M/s VG
& Co., in this regard. Initially, when the official of the RCS went to the
address he found that no such Society was existing at the address and,
therefore, he recommended that the Society should not be revived. However,
another Dealing Assistant prepared a false note which was forwarded by
other officials of the RCS at the instance of the then RCS R.K. Srivastava
and the Society was revived. The case of the CBI is that though a fresh
list of 74 members was given, not even one of these members was from the
original list of 74 members when the Society was incorporated in the year
1983. The case of the CBI further is that 35% of the cost of the land had
to be paid by the Society to the appellant DDA. This money, according to
the CBI was not paid by the enrolled members of the Society but a group of
builders comprising of accused S.P. Saxena and Sandeep Sahni who had taken
over control of the Society and paid a sum of Rs. 67,38,800/- from their
joint S.B. Account No. 18699 with the Central Bank of India, South
Extension, Part-II, New Delhi Branch. Thus the case of the CBI is that
this Society was illegally revived. It would be pertinent to mention here
that after the filing of SLP (C)…CC No. 2696 of 2013 (CA No. 6805 of 2013 @
SLP (C) No. 18747/2013), this Court passed an order on 29.01.2013 directing
the appellant DDA to file an additional affidavit. In this affidavit it
has been mentioned that the Bankmens CGHS was registered at 21, Inder
Enclave, Rohtak Road, New Delhi, with 65 promoter members but on
31.07.1985, Shri R.K. Mangla, requested the RCS to approve a list of 74
members. Some issues were raised by the RCS but the Bankmens CGHS did not
respond to the letter of the RCS and, thereafter, the Society was placed
under liquidation. When the accused Rajan Chopra filed an application for
revival of the Society on 11.11.1999 the address of the Society was changed
to 44/7-B, Regal Building, Connaught Place, New Delhi. The allegation is
that the Society was revived fraudulently and that the names of the members
of the Bankmens Society as in 1993 were never forwarded to the RCS at the
time of revival of the Society and fresh members were inducted. Even the
list of members pertaining to the year 1999 is totally different from the
list of members as on 31.03.2003 and this list has been changed
substantially on 31.03.2011. There were many resignations and new
additions of new members. None of the original members of the Society
whose names were listed in the list that was forwarded to the DDA on
22.08.2000, feature in the list of members of the Bankmens Society as on
31.03.2011. The entire membership list is totally different. Even out of
the list of 74 members as given on 31.03.2003 there are only 13 members in
the list of members as on 31.03.2011 and the other 61 members were totally
new.

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

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

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

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

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

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

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

11. “Fraud” as is well known vitiates every solemn act. Fraud and justice
never dwell together. Fraud is a conduct either by letters or words, which
induces the other person or authority to take a definite determinative
stand as a response to the conduct of the former either by words or
letters. It is also well settled that misrepresentation itself amounts to
fraud. Indeed, innocent misrepresentation may also give reason to claim
relief against fraud. A fraudulent misrepresentation is called deceit and
consists in leading a man into damage by wilfully or recklessly causing him
to believe and act on falsehood. It is a fraud in law if a party makes
representations, which he knows to be false, and injury ensues therefrom
although the motive from which the representations proceeded may not have
been bad. An act of fraud on court is always viewed seriously. A collusion
or conspiracy with a view to deprive the rights of others in relation to a
property would render the transaction void ab initio. Fraud and deception
are synonymous. Although in a given case a deception may not amount to
fraud, fraud is anathema to all equitable principles and any affair tainted
with fraud cannot be perpetuated or saved by the application of any
equitable doctrine including res judicata.”
13. We have heard learned counsel for the respondents and they have also
filed their written submissions. It would be pertinent to mention that
counsel for the respondents have not countered the submission of the
learned Solicitor General that the revival of the Societies was illegal and
fraudulent. The main submission is that the new members were validly
granted membership in the Bankmens CGHS. They are not at fault and hence
they should not be made to suffer. It is also urged that the allegation
that Rs.67,38,800/- was paid out of the funds of builders is incorrect and,
in fact, this amount was paid out of the funds of the Society.

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

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

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

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

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

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

CIVIL APPEAL NO. 8627 OF 2014

21. This appeal is directed against the interim order of the Delhi High
Court whereby the High Court directed that the membership of the Society be
got verified. In view of what has been discussed above, there can be no
ken of doubt that verification of the members must be done to ensure that
the members of the society are genuine members. Hence Civil Appeal No.
8627 of 2014 is dismissed.
…………………………………..J.
(PINAKI CHANDRA GHOSE)
…………………………………..J.
(DEEPAK GUPTA)
New Delhi
April 17, 2017
———————–
[1] (2005) 7 SCC 605

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