THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK AND HOUSING SOCIETY LTD. versus SRI ALOKE KUMAR & ANR on 13 October 2022

SUPREME COURT REPORTS

[2022] 13 S.C.R.

ATHE BENGAL SECRETARIAT COOPERATIVE LANDMORTGAGE BANK AND HOUSING SOCIETY LTD.

v.

SRI ALOKE KUMAR & ANR.

B(Civil Appeal No. 7261 of 2022)

OCTOBER 13, 2022

[UDAY UMESH LALIT, CJI, S. RAVINDRA BHAT ANDJ.B. PARDIWALA, JJ.]

West Bengal Co-operative Societies Act, 1940: s. 95 – DisputeCpertaining to co operative societies – Appellant Society to carryout the demolition/construction of the administrative building enteredinto an agreement with the developer – Respondent No. 1, memberof the appellant Society filed a case u/s. 95(1) wherein the arbitratorpassed an award directed that the society to restrain itself from takingDany step towards demolishing the existing Administrative Buildingwith the developer and a special general meeting be called –Appellant resolved in AGM to terminate the work orders issued infavour of the developer and refund the security deposit – However,the respondent No.1 filed another case on the ground that the formerAward had directed the Society to hold an Special General MeetingEand not an Annual General Meeting – Meanwhile the developeralso filed a matter seeking to injunct the appellant society fromgiving effect to the Resolution wherein the parties were directed tomaintain status quo – In the light of the impasse, it was resolved inthe AGM that the Board of the Society to get the administrativeFbuilding developed through the developer on the revised terms andconditions – Appellant society was accorded permission –Respondent No. 1 then instituted the arbitration execution case inrespect of the award made in the 1[st] dispute case, which was allowed– In revision, by the appellant society, the High Court upheld thesaid order – Sustainability of – Held: Not sustainable – High CourtGerred in holding the appellant Society could not have entered intoan agreement with a third party developer as the Act or the Rulesdo not provide for the same – It is too much for the High Court toexpect that all the members of the appellant Society should on theirown contribute and undertake the development of the newHadministrative building – Co-operative Society is to function democratically and the internal democracy of a society, includingresolutions passed in accordance with the Act, the Rules, and thebye-laws have to be respected and implemented – General Body ofthe Society resolved to appoint the developer, those decisions havingnot been challenged at all, the respondent No. 1 being a member ofthe appellant Society is bound by the said decisions – Merely becauseone single member in minority disapproves of the decision, thatcannot be the basis to negate the decision of the General Body,unless it is shown that the decision was the product of fraud ormisrepresentation – Redevelopment of the property was necessitatedin view of the dilapidated condition of the building – No provisionin the Co-operative Societies Act or the rules or any other legalprovision which would curtail the right of the Society to redevelopthe property when the General Body of the Society intends to do so– It is not open to the Court to sit over the commercial wisdom of theGeneral Body as an Appellate Authority – Thus, the judgment andorder passed by the High Court is set aside.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD: 1.1 The High Court is not correct in saying thatthe appellant Society could not have entered into an agreementwith a third party developer as the Act or the Rules do not providefor the same. It is too much for the High Court to expect that allthe members of the appellant Society should on their owncontribute and undertake the development of the newadministrative building. As regard the total cost of the project, itis informed that approximately the cost would be Rupees TwentyCrore. What is in the mind of the respondent No. 1 perhaps isthat the members of the appellant Society should contribute thisamount and undertake the construction rather than involving adeveloper and making the entire project a business venture. Itis just next to impossible. [Para 46][1106-D-E]

1.2 In the background of the constitutional mandate, thequestion is not what the statute does say but what the statutemust say. If the Act or the Rules or the bye-laws do not say whatthey should say in terms of the Constitution, it is the duty of theCourt to read the constitutional spirit and concept into the Acts.“In so far as in its Act Parliament does not convey its intention A

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Aclearly, expressly and completely, it is taken to require theenforcement agencies who are charged with the duty of applyinglegislation to spell out the detail of its legal meaning. This maybe done either by finding and declaring implications in the wordsused by the legislator, or by regarding the breadth or otherobscurity of the express language as conferring a delegatedBlegislative power to elaborate its meaning in accordance withpublic policy (including legal policy) and the purpose of thelegislation”. The conventional view is that the legislature alonemakes the law. [Para 47 and 48][1106-F-G; 1107-A-B]

1.3 It is not in dispute that the General Body of the appellantCSociety, which is supreme, has taken up a conscious decision toredevelop the administrative building. The General Body of theappellant Society has also resolved to appoint the Hi-Rise as thedeveloper. Those decisions having not been challenged at all,the respondent No. 1 being a member of the appellant Society isDbound by the said decisions. The General Body of the appellantSociety has approved the terms and conditions of the developmentagreement by overwhelming majority. Merely because the termsand conditions of the development agreement are not acceptableto the respondent No. 1, who could be said to be in minusculeminority cannot be the basis of not to abide by the decision of theEoverwhelming majority of the General Body of the appellantSociety. The redevelopment of the property is necessitated inview of the fact that the building is in a dilapidated condition withpassage of time. The redevelopment thus, would be a requirementand a necessity and cannot be termed as business. The appellantFSociety in such circumstances did not even require to carry outany amendment to the bye-laws or to include the “redevelopmentof the buildings” as one of the objects of the Society before takingany decision to redevelop its property. [Para 52][1108-H; 1109-A-D]

G1.4 Once a person becomes a member of the Co-operativeSociety, he loses his individuality with the Society and he has noindependent rights except those given to him by the statute andbye-laws. The member has to speak through the Society or ratherthe Society alone can act and speaks for him qua the rights and H

duties of the Society as a body. Suffice it to observe that so longas the Resolutions passed by the General Body of the appellantSociety are in force and not overturned by a forum of competentjurisdiction, the said decisions would bind the respondent No. 1.He cannot be permitted to take a stand alone position but is boundby the majority decision of the General Body. Notably, therespondent No. 1 has not challenged the resolutions passed bythe General Body of the appellant Society to redevelop theproperty and more so, to appoint the Hi-Rise as the Developerto give him all the redevelopment rights. [Para 53][1109-D-H]

1.5 It was submitted that the property is in a good conditionand there is no need to redevelop the existing building. In thefirst place, the decision of the General Body of the Society toredevelop the subject property has not been challenged at all.Besides, no provision in the Co-operative Societies Act or therules or any other legal provision has been brought to the noticewhich would curtail the right of the Society to redevelop theproperty when the General Body of the Society intends to do so.Essentially, that is the commercial wisdom of the General Bodyof the Society. It is not open to the Court to sit over the saidwisdom of the General Body as an Appellate Authority. Merelybecause one single member in minority disapproves of thedecision, that cannot be the basis to negate the decision of theGeneral Body, unless it is shown that the decision was the productof fraud or misrepresentation or was opposed to some statutoryprohibition. That is not the grievance made before this Court. Inthe instant case, the General Body took a conscious decisionafter due deliberations for many years to redevelop its property.Even with regard to the appointment of the “Hi-Rise” as theDeveloper, the record shows that it was decided by the GeneralBody of the Society after examining the relative merits of theproposals received from the developers. [Para 54][1110-A-D]

1.6 The object of the provision has to be borne in mind.The entire legislative scheme goes to show that the Co-operativeSociety is to function democratically and the internal democracyof a society, including resolutions passed in accordance with the AB

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AAct, the Rules, and the bye-laws have to be respected andimplemented. The Co-operative Movement is both a theory oflife and a system of business. It is a form of voluntary associationwhere individuals unite for mutual aid in the production anddistribution of wealth upon principles of equity, reason andcommon good. It stands for distributive justice and asserts theBprinciple of equality and equity ensuring to all those engaged inthe production of wealth a share proportionately commensuratewith the degree of their contribution. It provides as a substitutefor material assets, honesty and a sense of moral obligation andkeeps in view the moral rather than the material sanction. TheCmovement is thus a great Co-operative movement. [Para55][1110-E-G]

1.7 The basic principles of co-operation are that themembers join as human beings and not as capitalists. The Co-operative Society is a form of organization wherein personsDassociate together as human beings on the basis of equality forpromotion of economic interest of its members. This movementis a method of doing the business or other activities with ethicalbase. “Each for all and all for each” is the motto of the co-operativemovement. This movement not only develops latent businesscapacities of its members but produces leaders; encouragesEeconomic and social virtues, honesty and loyalty, becomesimperative, prospects of better life, obtainable by concerted effortis opened up; the individual realises that there is something moreto be sought than mere material gains for himself. So, in fact, itbeing a business cum moral movement, and the success of theFCo-operative Society depends upon the reality with which one ofthe members work for the achievement of its objects and purpose.The Committee on Co-operation in India emphasized the moralaspect of co-operation. [Para 56][1110-H; 1111-A-C]

1.8 The impugned judgment and order passed by the HighGCourt is not sustainable in law and is set aside. At one point oftime, there is an inclination to allow this appeal by imposing anexemplary costs on the respondent No.1 for unnecessarilydragging the appellant Society into a frivolous litigation & notallowing the appellant Society to go ahead with the project for H

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the past almost two decades. However, this Court refrains frompassing such order of costs in the hope that the respondent No.1 realises that the development of the administrative buildingwill be for the betterment of the society. No individual member isgoing to gain anything from the redevelopment. It is the societyas an autonomous body which will gain something. [Para 57][1112-C-E]

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1.9 It would now be open to the appellant Society to proceedfurther with its project of redevelopment in accordance with theresolutions passed by the General Body from time to time. [Para58][1112-F]

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Vipulbhai M. Chaudhary v. Gujarat Cooperative MilkMarketing Federation Limited (2015) 8 SCC 1 : [2015](3) SCR 997; Daman Singh v. State of Punjab (1985) 2SCC 670 : AIR 1985 SC 973 : [1985] (3) SCR 580;State of U.P v. Chheoki Employees Co-operative SocietyLtd. (1997) 3 SCC 681 : AIR 1997 SC 1413:[1997] (1)SCR 380; Rattan Chand Hira Chand v. Askar NawazJung (Dead) by Lrs. (1991) 3 SCC 67 : [1991] (1) SCR327 – referred to.

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Seaford Court Estates v. Asher (1949) 2 KB 481 : (1949)2 All ER 155 (CA) – referred to.

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Bennion on Statutory Interpretation by Francis Bennion,6th Edn. 136 - referred to.

Case Law Reference

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GCIVIL APPELLATE JURISDICTION: Civil Appeal No. 7261of 2022.

From the Judgment and Order dated 08.08.2018 of the High Courtof Calcutta in C.O. No.2714 of 2014.

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AJoydeep Mazumdar, Dhiman Kr. Sengupta, Vikas Kumar, Ms.Shalini Kaul, Advs. for the Appellant.

Soumo Palit, Abhigya, Advs. for the Respondents.

The Judgment of the Court was delivered by BJ. B. PARDIWALA, J.

1. Leave granted.

2. This appeal is at the instance of a Co-operative Societyregistered under the West Bengal Co-operative Societies Act, 1940 (forshort, ‘the Act 1940’) and is directed against the judgment and orderCpassed by the High Court at Calcutta (Civil Revisional Jurisdiction,Appellate Side) dated 08.08.2018 in the CO No. 2714 of 2014 by whichthe High Court rejected the civil revision filed by the Appellant Societyherein thereby affirming the order passed by the Civil Judge (SeniorDivision), 9[th] Court at Alipore, District South 24 Paraganas in theArbitration Execution Case No. 19 of 2009 dated 17.04.2014.D

FACTUAL MATRIX

FACTUAL MATRIX

3. The Appellant Society was registered in the year 1945 underthe Act 1940 (now governed by the West Bengal Co-operative SocietiesAct, 2006 as amended up to date, [for short, ‘the Act 2006’]). TheEAppellant Society was formed for the purpose of providing housing tothe employees of the West Bengal Secretariat and others in accordancewith the bye-laws of the society. The registered office of the AppellantSociety at the time of registration was that of the Bengal Secretariatbeing the Writers Buildings, Calcutta (P.O. Calcutta G.P.O., Thana-HareStreet, Calcutta). At present, the registered office of the Appellant SocietyFis located at No. 1, Gariahat Road, Jodhpur Park, P.S. Lake, Koltaka-700068.

4. The Appellant Society purchased a parcel land along with twobuildings erected on it on 18.07.1947 from the Official Trustee of Bengal,the Executor of the property of Ketty Graham William admeasuringGapproximately 80.90 acre. One of the buildings out of the two is used asthe administrative building of the Appellant Society and the other buildingis used for the Girls School. The Appellant Society was registered withmultipurpose activities. The administrative building by now is almost 100years old and is in a dilapidated condition. The certificate issued by theHKolkata Municipal Corporation dated 15.07.2016 along with the photographs of the building would indicate that the same may collapse atany time causing loss to life.

5. It appears from the materials on record that sometime in 1960,the entire ground floor portion of the administrative building was let outto the Indian Postal Department for running a post office namely theJodhpur Park Post Office with current PIN Code 700068. Since then,the Post Office is functioning for the benefit of the members of theAppellant Society as well as the locals at large. Having regard to thefact that the administrative building is in a dilapidated condition andrequires urgent repairs and renovations, it was felt by the AppellantSociety sometime in the year 2001 that it would be more expedient todemolish the old structure and construct a new building in its place whichwould be safe for habitation and would allow for more efficient utilisationof the available space/land area.

6. In such circumstances referred to above, the Appellant Societyinvited tenders through an advertisement published in the local dailiesfor the development of the administrative building through a joint venturewith the developer.

7. Pursuant to the tender process, the Hi-Rise Apartment MakersPrivate Limited (for short, ‘the Hi-Rise’) was declared as the successfulbidder. The entire matter was placed before the General Body of theAppellant Society at the Annual General Meeting which was held on28.04.2002. The meeting was ultimately adjourned to 05.05.2002. At theAnnual General Meeting of the Appellant Society convened on05.05.2002, it was resolved that the Appellant Society would accept theearnest/security money from the Hi-Rise and enter into an agreementaccordingly with it for the purpose of demolition of old administrativebuilding and for construction of the new administrative building.

8. On 22.06.2002, the Appellant Society issued the work orderpursuant to the decision taken in the Annual General Meeting. In thesaid work order, it was stated that the Appellant Society would enter intoan agreement with the Hi-Rise for the demolition of the old dilapidatedbuilding and construction of a new administrative building. It was agreedbetween the Appellant Society and the Hi-Rise that the new structurewould be partly residential and partly for commercial purpose.

9. It appears that the Respondent No. 1 herein namely AlokeKumar in his capacity as one of the members of the Appellant Society A

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Astarting creating various hindrances in the way of the Appellant Societyand somehow or the other did not allow the Appellant Society to goahead with the project. It also appears from the materials on record thatthe Board of the Appellant Society decided to remove the RespondentNo. 1 from the primary membership of the society on the ground ofhaving been found acting in a manner prejudicial to the interest of theBAppellant Society. Pursuant to the resolution passed by the Board dated22.10.2002, the Appellant Society sought approval from the Registrar ofthe Co-operative Societies to remove the Respondent No. 1 from theprimary membership of the society.

10. It appears that since the Registrar of the Co-operative SocietiesCdid not object to the resolution terminating the membership of theRespondent No. 1 herein within six weeks as per Rule 137(2) of theWest Bengal Co-operative Societies Rules, 1987 (for short, ‘the Rules1987’), the Board of the Appellant Society terminated the membershipof the Respondent No. 1 with effect from 04.12.2002. The RespondentDNo. 1, being aggrieved with the action taken by the Board of the AppellantSociety, filed an appeal before the Registrar of the Co-operative Societiesunder Rule 137(3) of the Rules 1987.

11. The materials on record further reveal that the decision of theBoard of the Appellant Society expelling the Respondent No. 1 from theEprimary membership of the Appellant Society was later set aside.

12. On 14.01.2003 the Respondent No. 1 herein filed a disputecase before the Registrar of the Co-operative Societies, West Bengalagainst the Appellant Society, inter alia, praying for the following:

F“a) declaring that all actions of the Board right from thepublication of the notice inviting bids, floating of biddocuments, the proceedings and resolution in the adjournedAnnual General Body of the aforesaid Society held on5.5.2002 accepting the offer of M/s Hi-Rise Apartment MakersPvt. Ltd. and acceptance of Earnest Money and securityGdeposit of Rs. 10 lakh from them and thereafter, were illegaland void.”

13. The proceedings came to be registered as the Dispute CaseNo. 47/RCS of 2002-03 filed under Section 95(1) of the West BengalCo-operative Societies Act, 1983 (for short, ‘the Act 1983’).H

14. The Arbitrator vide Award dated 21.12.2004 passed in theDispute Case No. 47/RCS of 2002-03, inter alia, directed as under:

“1) That the society shall restrain itself from taking any steptowards demolishing the existing constructions of theAdministrative Building of the society as part of a joint venturewith a private promoter/developer, M/s Hi Rise ApartmentMakers Pvt. Ltd.

2) That special general meeting be called with clear onemonth’s notice ensuring receipts by all the members- discussingthe issue in every detail with transparency at every stage beingobserved to the full, and any resolution taken thereof in favourof the ROC’s proposal of this nature be sent to the Registrarof Cooperative Societies, West Bengal for his approval hasrequired under Rule 149(11) of W.B.C.S. Rules, 1987.”

15. The Appellant Society in due compliance with the Award dated21.12.2004 resolved by way of resolution taken in the AGM dated15.01.2006 to terminate the work orders dated 22.06.2002 issued in favourof the Hi-Rise and refund the security deposit.

16. Not satisfied with the Resolution dated 21.12.2004 and theconsequent termination of the contractual obligations with the Hi-Rise,the Respondent No.1 filed yet another Dispute Case being the DC No.15 of 2006 challenging the said Resolution dated 15.01.2006, inter-alia,on the ground that the Award dated 21.12.2004 had directed the AppellantSociety to hold an “Special General Meeting” and not an “Annual GeneralMeeting”.

17. Being aggrieved, the Hi-Rise filed Dispute Case No. 11 of2006 seeking to inter alia injunct the Appellant Society from giving effectto the Resolution dated 15.01.2006. The said dispute came to be referredto the Calcutta High Court vide the CO No. 2203 of 2006. Therein theCalcutta High Court vide order dated 22.01.2007 remanded the matterto the Arbitrator for fresh hearing while directing both the parties tomaintain status quo.

18. In the light of the impasse created due to the litigation initiatedby the Hi-Rise, it was, inter alia, resolved in the AGM held on 27.05.2007that the Board of the Appellant Society be asked to resolve the disputewith the Hi-Rise and further empowered it to get the administrative

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Abuilding developed through the Hi-Rise as BOT (Build Operate &Transfer) partner based on the revised Terms and Conditions.

19. It is important to note that the Resolution dated 27.05.2007passed at the Annual General Meeting of the Appellant Society has notbeen challenged till date.B

20. The Joint Registrar, Co-operative Societies (Housing) on16.06.2011 accorded permission to the Appellant Society for theconstruction of Office-cum-Administrative Building pursuant to theResolution passed in AGM on 27.05.2007.

21. On 30.10.2009, the Respondent No. 1 instituted the ArbitrationCExecution Case No. 19 of 2009 before the Civil Judge, Alipore Courtseeking execution of the Award dated 21.12.2004 passed in the DC No.47/RCS of 2002-03. On 17.04.2014, the Civil Judge inter alia declaredthat the Execution Case was maintainable.

22. Being aggrieved, the Appellant Society preferred a CivilDRevision before the Calcutta High Court being the CO No. 2714 of 2014wherein the impugned order came to be passed.

23. In view of the aforesaid, the Appellant Society is before thisCourt.

SUBMISSIONS ON BEHALF OF THE APPELLANTESOCIETY

24. Mr. Joydeep Mazumdar, the learned counsel appearing forthe Appellant Society vehemently submitted that the High Courtcommitted a serious error in passing the impugned order. The learnedcounsel would submit that the final authority of a co-operative societyFunder the Act 2006 is its General Body of Members or its electedrepresentatives. In this regard, the learned counsel invited the attentionof this Court to Section 28 of the Act 2006. The learned counsel furthersubmitted that the High Court failed to appreciate one of the cardinalprinciples of the “Co-operative Movement” that the co-operatives areGautonomous organisations and one single member of a co-operativesociety should not be allowed to hold the entire society at ransom onlybecause of his own whims and caprice.

25. The learned counsel argued that the High Court failed toappreciate that there is no material difference between an Annual GeneralHMeeting and a Special General Meeting except for the nomenclature in all practical sense. In this regard, our attention was drawn to Rule 21 ofthe West Bengal Co-operative Societies Rules, 2011 (for short, ‘the Rules2011’).

26. The learned counsel would submit that the High Court failedto appreciate that there is nothing in the Act and/or Rules which wouldprevent a Society from taking a pragmatic and practical view of thesituation in approaching Developers who would act in the benefit of thelarger interest of the members of the Society. It was also argued that theHigh Court fell into error in taking the view that the resolution dated15.01.2006 was not transparent. It was also argued that the High Courtcould not have taken a dismissive view of the order passed by the JointRegistrar, Co-operative Societies (Housing) dated 16.06.2011 permittingthe Appellant Society to carry out the demolition/construction of theadministrative building pursuant to the resolution dated 27.05.2007. Thelearned counsel pointed out something very important, that neither theresolution dated 27.05.2007 nor the permission granted by the JointRegistrar dated 16.06.2011 has been challenged by the Respondent No.1 herein.

27. In the last, the learned counsel argued that the RespondentNo. 1 unilaterally has been stalling the efforts of the Appellant Society todevelop the administrative building for the last two decades contrary tothe spirit of the very “Co-operative Movement”. According to the learnedcounsel, the Respondent No.1 has been a true example of a “Dog in theManger”.

28. In such circumstances referred to above, the learned counselappearing for the Appellant Society prayed earnestly that the impugnedjudgment and order of the High Court may be set aside and the AppellantSociety may be permitted to go ahead with the development of theadministrative building in accordance with the plans & the rules andregulations.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

NO. 1

29. On the other hand, Mr. Soumo Palit, the learned counselappearing for the Respondent No. 1 vehemently opposed the presentappeal submitting that no error, not to speak of any error of law, could besaid to have been committed by the High Court in passing the impugnedorder in exercise of its supervisory jurisdiction under Article 227 of the AB

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AConstitution of India. In such circumstances referred to above, the learnedcounsel appearing for the Respondent No. 1 prayed that there being nomerit in the present appeal, the same may be dismissed.

ANALYSIS

30. Having heard the learned counsel appearing for the partiesBand having gone through the materials on record, the only question thatfalls for our consideration is whether the High Court committed any error in passing the impugned judgment and order?

31. Before adverting to the rival submissions canvassed on eitherside, we must look into the line of reasoning adopted by the High CourtCin its impugned order which is as under:

“25. It is seen that nowhere in the Act or the Ru1es, thedelegation of construction work to third party developers,having commercial interest, is contemplated.

26. The entire spirit of the co-operative movement, being thatDof participation of the members for their own good was missedout in the commercial endeavour of the petitioners to earnquick profits at the expense of the co-operative spirit.

27. The arguments of the petitioners, that the first componentof the arbitral award becomes academic upon fulfillment ofEthe second, is also not acceptable, since the first componentis a continuous restraint, independent of the second. Thepetitioners have, in any event, flouted both the componentsof the award by posing to cancel the previous agreement withM/s Hi-Rise and renewing the same agreement in a superficiallychanged format. The continuation of the earlier joint ventureFhas also been reflected from the project submitted by thepetitioners before the Registrar, Co-operative Societies,purporting to seek approval.

28. The petitioners also rely on an annual report of an AnnualGeneral Meeting held by the petitioner no. 1-Society on MayG27, 2007, to impress upon this Court that the award wascomplied with by the Society in spirit.

29. However, apart from the fact that the award contemplatednot an Annual General Meeting but a Special General Meeting,the report itself belies the impression sought to be created byHthe petitioners. It is reflected from the report that the Board of

Directors, even in the teeth of the award, did not even considerany other option than to renew the previous agreement withM/s Hi-Rise itself, despite the specific restraint ordercomprised in the first component of the arbitral award. Theproject entered into, as reflected from the annual report itself,contemplated only modification of terms of the previous jointventure agreement, and blatantly exhibited the sole purposeof such project to gain merely Rs. 20 million (by virtue ofenhancement of the market value of the project being fullycommercial). As such, although commerce ipso facto need notbe deprecated, the tenor of the arbitral award as well as thespirit of the co-operative movement, as contemplated in theWest Bengal Co-operative Societies Act, 2006, was taken fora ride by such acts of the petitioners. The resolution taken insuch Annual General Meeting was an iteration of the absenceof will on the part of the petitioners to comply with the awardand the deliberate attempt to carry on with old wine in a newbottle, having the shape of a new-look agreement.

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30. As such, it appears that although the impugned order wasa bit on the miserly side as far as reasons are concerned, theconclusion arrived at in the said order, as to the executioncase being still maintainable in view of non-satisfaction ofthe arbitral award, was valid.

31. As to the judgments cited by the opposite party on thescope of interference under Article 227 of the Constitution ofIndia, this Court is of the opinion that the principles laid downtherein are well-settled. Since no patent jurisdictional erroris found in the impugned order, in any event, the saidjudgments need not be gone into in detail.”

32. Thus, from the aforesaid, it appears that what weighed withthe High Court is:

(1) Neither the Act nor the Rules permits the society to ask aGthird party to develop its building, more particularly whenthe party has a commercial interest in the same, and

(2) The members on their own should have undertaken thecommercial activity and that would have been in accordancewith the co-operative spirit.

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A On both the aforesaid counts, the High Court is not correct. Weshall assign reasons hereinafter as to why we are so saying.

33. We shall now look into few provisions of the Act and theRules. Section 28 of the Act 2006 reads thus:

“Section 28. Final authority of Co-operative society.—Subjectto the provisions of this Act, the final and ultimate authorityof a Co-operative society shall vest in the general body of itsmembers or its delegates or representatives elected underSection 29 of this Act and assembled in a general meeting:

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Provided that where the by-laws of a Co-operative societyso provide for representation of self-help group in any meetingof the general body of the Co-operative society, such self-help group shall be represented through one of its memberselected in a meeting of the self-help group.”

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34. Rule 21 of the Rules 2011 read as under:-D“21. Special General Meeting.—

(1) The rules pertaining to Annual General Meeting shallapply, mutatis mutandis to a Special General Meeting calledunder Section 31.

E(2) At a Special General Meeting, no business other than thatspecified in the relevant notice shall be considered.”

35. We shall now look into the relevant extract of the resolutiondated 15.01.2006 which reads as under:- “But it resolved that the contract executed by and betweenFthe Society and M/s Hi-Rise Apartment Markers Pvt. Ltd.,including the work order issued by the Society are to be treatedas revoked and cancelled. The Board of Directors is directedto refund the security deposit to the said company afterdeducting necessary penalties and dues in terms of the saidGcontract.

The house further resolved that in supersession of all earlierresolutions of the General Body as well as Board of Directorsin connection with the Administrative Building, the Board ofDirectors is hereby authorized to take all further necessaryHaction such as erection of hoardings etc. for further development/ utilization of the said premises for the bestinterest of the Society of its members, except letting out, longterm in nature under tenancy act.”

SEVEN CARDINAL PRINCIPLES OF CO-OPERATIVE

36. In the case of Vipulbhai M. Chaudhary v. GujaratCooperative Milk Marketing Federation Limited, (2015) 8 SCC 1,this Court was called upon to answer the following question:

“Whether in the absence of a specific provision on removalby no confidence in the Act, Rules or even Bye-laws of aCooperative Society, the Chairperson/ elected office-bearercan be removed by a motion of no confidence, is the short butcomplex question.”

37. For the purpose of answering the aforesaid question, this Courtextensively traced the history of the Co-operative Movement in India.The International Cooperative Alliance Statement on the CooperativeIdentity was adopted in Manchester, United Kingdom on 23.09.1995.The ‘Co-operative’ is defined as:

“A cooperative is an autonomous association of personsunited voluntarily to meet their common economic, social, andcultural needs and aspirations through a jointly-owned anddemocratically-controlled enterprise.”

38. The Statement further provides for the ‘seven co-operativeprinciples’ as guidelines by which the co-operatives put their values intopractice. Following are the principles:

“1st Principle:

Voluntary and Open Membership.— Cooperatives arevoluntary organizations, open to all persons able to use theirservices and willing to accept the responsibilities ofmembership, without gender, social, racial, political orreligious discrimination.

2nd Principle:

Democratic Member Control.—Cooperatives aredemocratic organizations controlled by their members, whoactively participate in setting their policies and makingdecisions. Men and women serving as elected representatives

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are accountable to the membership. In primary cooperativesmembers have equal voting rights (one member, one vote) andco-operatives at other levels are also organized in a democraticmanner.

3rd Principle:

Member Economic Participation.—Members contributeequitably to, and democratically control, the capital of theircooperative. At least part of that capital is usually the commonproperty of the cooperative. Members usually receive limitedcompensation, if any, on capital subscribed as a condition ofmembership. Members allocate surpluses for any or all ofthe following purposes: developing their cooperative, possiblyby setting up reserves, part of which at least would beindivisible; benefiting members in proportion to theirtransactions with the cooperative; and supporting otheractivities approved by the membership.

4th Principle:

Autonomy and Independence.—Cooperatives areautonomous, self-help organizations controlled by theirmembers. If they enter to agreements with other organizations,including governments, or raise capital from external sources,they do so on terms that ensure democratic control by theirmembers and maintain their cooperative autonomy.

5th Principle:

Education, Training and Information.— Cooperativesprovide education and training for their members, electedrepresentatives, managers, and employees so they cancontribute effectively to the development of their co-operatives. They inform the general public - particularlyyoung people and opinion leaders - about the nature andbenefits of cooperation.

6th Principle:

Cooperation among Cooperatives.—Cooperatives servetheir members most effectively and strengthen the co- operativemovement by working together through local, national,regional and international structures.

7th Principle:

Concern for Community.— Cooperatives work for thesustainable development of their communities through policiesapproved by their members.”

[Emphasis supplied]

39. The co-operative movement in India started at the beginningof the 20th century. Though the movements were also based on some ofthe values and principles stated above, it appears that the co-operativesin India did not have effective autonomy, democratic functioning andprofessional management. The National Policy on Co-operativesannounced by the Department of Agriculture and Co-operation, Ministryof Agriculture, Government of India adopted in March, 2002, is whollybased on the definition, values and principles stated above. The 97[th]Amendment to the Constitution of India, in fact, gave a constitutionalframe to this policy.

40. Apart from providing for the right to form co-operative societiesto be a fundamental right under Article 19of the Constitution of Indiaand insertion of Article 43Bunder the Directive Principles of State Policyon promotion of co-operative societies, the amendment also introduceda new Part IXB on Co-operative Societies. Reference to the Statementof Objects and Reasons of the amendment would give a clear picture asto the need to strengthen the democratic basis and provide for aconstitutional status to the co-operative societies. Thus, one has to seethe constitutional aspirations on the concept of co-operative societiesafter the 97[th] Amendment in the Constitution of India which came intoeffect on 12.01.2012:- “STATEMENT OF OBJECTS AND REASONS

“STATEMENT OF OBJECTS AND REASONS

1. The co-operative sector, over the years, has madesignificant contribution to various sectors of national economyand has achieved voluminous growth. However, it has shownweaknesses in safeguarding the interests of the members andfulfilment of objects for which these institutions wereorganised. There have been instances where elections havebeen postponed indefinitely and nominated office bearers oradministrators remaining in- charge of these institutions fora long time. This reduces the accountability of themanagement of co-operative societies to their members.

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Inadequate professionalism in management in many of theco- operative institutions has led to poor services and lowproductivity. Co- operatives need to run on well establisheddemocratic principles and elections held on time and in afree and fair manner. Therefore, there is a need to initiatefundamental reforms to revitalize these institutions in orderto ensure their contribution in the economic development ofthe country and to serve the interests of members and publicat large and also to ensure their autonomy, democraticfunctioning and professional management.

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2. The “co-operative societies” is a subject enumerated inCEntry 32 of the State List of the Seventh Schedule of theConstitution and the State Legislatures have accordinglyenacted legislations on co-operative societies. Within theframework of State Acts, growth of co-operatives on largescale was envisaged as part of the efforts for securing socialDand economic justice and equitable distribution of the fruitsof development. It has, however, been experienced that inspite of considerable expansion of co-operatives, theirperformance in qualitative terms has not been up to the desiredlevel. Considering the need for reforms in the Co-operativeSocieties Acts of the States, consultations with the StateEGovernments have been held at several occasions and in theconferences of State Co-operative Ministers. A strong needhas been felt for amending the Constitution so as to keep theco-operatives free from unnecessary outside interferences andalso to ensure their autonomous organisational set up andFtheir democratic functioning.

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3. The Central Government is committed to ensure that theco-operative societies in the country function in a democratic,professional, autonomous and economically sound manner.With a view to bring the necessary reforms, it is proposed toincorporate a new Part in the Constitution so as to providefor certain provisions covering the vital aspects of workingof co- operative societies like democratic, autonomous andprofessional functioning. A new article is also proposed tobe inserted in Part IV of the Constitution (Directive Principlesof State Policy) for the States to endeavour to promote G

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voluntary formation, autonomous functioning, democraticcontrol and professional management of cooperative societies.The proposed new Part in the Constitution, inter alia, seeksto empower the Parliament in respect of multi-State co-operative societies and the State Legislatures in case of otherco-operative societies to make appropriate law, laying downthe following matters, namely:- (a) provisions for incorporation, regulation and windingup of co-operative societies based on the principles ofdemocratic member-control, member- economicparticipation and autonomous functioning; (b) specifying the maximum number of directors of a co-operative society to be not exceeding twenty-one members;

(c) providing for a fixed term of five years from the date ofelection in respect of the elected members of the boardand its office bearers; (d) providing for a maximum time limit of six months duringwhich a board of directors of co-operative society couldbe kept under supersession or suspension; (e) providing for independent professional audit;

(f) providing for right of information to the members ofthe co-operative societies; (g) empowering the State Governments to obtain periodicreports of activities and accounts of co-operative societies; (h) providing for the reservation of one seat for theScheduled Castes or the Scheduled Tribes and two seatsfor women on the board of every co- operative society,which have individuals as members from such categories;

(i) providing for offences relating to co-operative societiesand penalties in respect of such offences.

4. It is expected that these provisions will not only ensure theautonomous and democratic functioning of co-operatives, butalso ensure the accountability of management to the membersand other stakeholders and shall provide for deterrence forviolation of the provisions of the law.

5. The Bill seeks to achieve the above objectives.”

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A41. By 12.01.2013, all laws on co-operative societies were boundto be restructured in consonance with the 97[th] Amendment of theConstitution of India and, in any case, any provision in the Act or Rulesor bye-laws otherwise inconsistent with the Constitution will be inoperativethereafter. Articles 43B and 243ZT are mandates to all the States andthe competent authorities to structure co-operative societies as conceivedBin the Constitution of India, if not already there.

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42. The first legislation on the co-operative movement in Indiawas the Co-operative Credit Societies Act, 1904 and, thereafter, the co-operative societies emerged in India as State sponsored/promotedinstitutions. The main objective was only credit intended to relieve theCpoor agriculturists from the clutches of moneylenders. The first urbanco-operative credit society under the Act of 1904 was registered inKanjivaram in erstwhile Madras province. The traits of democracy werepresent in the very first legislation through the principle “one man, onevote”. Since the first legislation was limited to the credit societies, a newDlegislation was introduced 8 years later as “the Co-operative SocietiesAct, 1912”. The restriction regarding registration limited to credit societieswas taken away and any society established with the object of promotingthe economic interests of its members in accordance with the co-operative principles, or a society established with the object of facilitatingthe operations of such a society, could be registered.E

43. Under the Government of India Act of 1919 (MontagueChelmsford Reforms), co-operation became a provincial subject whichgave a further impetus to the movement. This gave birth to several co-operative land mortgage banks. The first of its kind was registered inPunjab. Close to independence and thereafter, we see a radical changeFand increased growth in the co-operative movement. Activities werespread to all spheres of human endeavour, and thus in 2002, NationalPolicy on Co-operatives was announced.

44. The co-operative societies having been conferred aconstitutional status by the 97[th] Amendment, the whole concept of co-Goperatives has undergone a major change. In 1993, the local self-governments, viz., panchayats and municipalities were also givenconstitutional status under Parts IX and IXA of the Constitution of Indiaby the 73[rd] and 74[th] Amendments. The Statement of Objects and Reasonswould show that the Constitution wanted the local bodies to function asHvibrant democratic units of self-government. After two decades, co-

operative societies were given the constitutional status by including themunder Part IXB. The main object for the said amendment was also toensure “their autonomy, democratic functioning and professionalmanagement”.

45. The National Policy on Co-operatives announced in March2002 has recognized democracy, equality, equity and solidarity as valuesof co-operatives. Co-operative society has been declared as a democraticinstitution. Democratic principles have all through been recognized asone of the co-operative principles though the constitutional affirmationof those principles came only in 2012. [Reference : para 39 to para 45herein —Vipulbhai M. Chaudhary (supra)]

45A[1]. Before we proceed further with the final analysis of thematter, we need to clarify something important. The decision of thisCourt in the case of Vipulbhai M. Chaudhary (supra) has been referredto by us for a very limited purpose. Vipulbhai M. Chaudhary (supra)has referred to the 97[th] Constitution Amendment for the purpose ofanswering the main question referred to in para 36 above. It is necessaryto clarify that the constitutional validity of the 97[th] Constitution Amendmentwas challenged before the High Court of Gujarat in Writ Petition (PIL)No. 166 of 2012. A Division Bench of the High Court, to which one of us(J.B. Pardiwala, J.) was party declared the Constitution (97[th] Amendment)Act, 2011 inserting Part IXB containing the Articles 243ZH to 243ZT asultra vires the Constitution of India for not taking recourse to Article368(2) of the Constitution which provides for ratification by the majorityof the State Legislatures. The High Court while declaring the amendmentas invalid clarified that the other parts of the Constitution (97[th]Amendment) Act, 2011 would not be affected.

45B[2]. The judgment of the Gujarat High Court referred to abovewas carried in Appeal by the Union of India being the Civil Appeal Nos.9108-9109 of 2014 before this Court which upheld, by majority, the viewof the Gujarat High Court to the extent it struck down the entire of PartIXB of the Constitution. However, the majority view declared that PartIXB of the Constitution of India would be operative only insofar as itconcerned the multi-State co-operative societies both within the variousStates and in the Union territories of India.

1 Paragraph Added in terms of Order dated 18.10.2022 passed in M.A. No. 1798 of 2022.

2 Paragraph Added in terms of Order dated 18.10.2022 passed in M.A. No. 1798 of 2022.

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A45C[3]. Thus, the Constitution (97[th] Amendment) Act, 2011 wouldnot be applicable to the local co-operative societies, whereas the samewould be applicable to the multi-State co-operative societies and thesocieties within the Union territories. We only need to clarify that ourjudgment is not based on the decision of Vipulbhai M. Chaudhary(supra) which has now been rendered per incuriam. We referred toBVipulbhai M. Chaudhary (supra) only for the limited purpose ofhighlighting the history of the ‘Co-operative Movement’ in India and theco-operative principles. Our judgment has essentially looked into theexposition of principles of law expounded by this Court in the cases ofDaman Singh v. State of Punjab, reported in (1985) 2 SCC 670 : AIRC1985 SC 973, and State of U.P v. Chheoki Employees Co-operativeSociety Ltd., reported in (1997) 3 SCC 681: AIR 1997 SC 1413, resply.

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46. We are of the view that the High Court is not correct in sayingthat the Appellant Society could not have entered into an agreementDwith a third party developer as the Act or the Rules do not provide forthe same. It is too much for the High Court to expect that all the membersof the Appellant Society should on their own contribute and undertakethe development of the new administrative building. We enquired withthe learned counsel appearing for the respective parties as regard theEtotal cost of the project. We were informed that approximately the costwould be Rupees Twenty Crore. What is in the mind of the RespondentNo. 1 perhaps is that the members of the Appellant Society shouldcontribute this amount and undertake the construction rather than involvinga developer and making the entire project a business venture. It is justnext to impossible.F

47. In the background of the constitutional mandate, the questionis not what the statute does say but what the statute must say. If theActor the Rules or the bye-laws do not say what they should say interms of the Constitution, it is the duty of the Court to read theconstitutional spirit and concept into the Acts. “In so far as in its ActGParliament does not convey its intention clearly, expressly andcompletely, it is taken to require the enforcement agencies who arecharged with the duty of applying legislation to spell out the detailof its legal meaning. This may be done either- (a) by finding anddeclaring implications in the words used by the legislator, or (b) byH3 Paragraph Added in terms of Order dated 18.10.2022 passed in M.A. No. 1798 of 2022.

regarding the breadth or other obscurity of the express languageas conferring a delegated legislative power to elaborate its meaningin accordance with public policy (including legal policy) and thepurpose of the legislation”. [See : Bennion on StatutoryInterpretation by Francis Bennion, 6[th] Edn. 136]

48. The conventional view is that the legislature alone makes thelaw. But as Bennion puts it:- “The truth is that courts are inescapably possessed of somedegree of legislative power. Enacted legislation lays downrules in advance. The commands of Parliament are deliberateprospective commands. The very concept of enacted legislationpostulates an authoritative interpreter who operates ex postfacto. No such interpreter can avoid legislating in the courseof exercising that function. It can be done by regarding thebreadth or other obscurity of the express language as conferringa delegated legislative power to elaborate its meaning inaccordance with public policy (including legal policy)”.

[See : Bennion on Statutory Interpretation by Francis Bennion,6[th] Edn. 137]

49. According to Donaldson J.:

“The duty of the courts is to ascertain and give effect to thewill of Parliament as expressed in its enactments. In theperformance of this duty the judges do not act as computersinto which are fed the statues and the rules for the constructionof statues and from whom issue forth the mathematicallycorrect answer. The interpretation of statutes is a craft asmuch as a science and the judges, as craftsmen, select andapply to the appropriate rules as the tools of their trade. Theyare not legislators, but finishers, refiners and polishers oflegislation which comes to them in a state requiring varyingdegrees of further processing.”

[See : Corocraft Ltd. v. Pan American Airways Inc., (1969) 1 QB616, p. 638 : (1968) 3 WLR 714 at p. 732 : (1968) 2 All ER 1059]

50. In the celebrated case of Seaford Court Estates v. Asherreported in (1949) 2 KB 481 : (1949) 2 All ER 155 (CA), Lord Denninghas succinctly summarized the principle on the role of the Court. Toquote:- (QB pp. 498-99)

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A“… Whenever a statute comes up for consideration it must beremembered that it is not within human powers to foresee themanifold sets of facts which may arise, and, even if it were, itis not possible to provide for them in terms free from allambiguity... A judge cannot simply fold his hands and blamethe draftsman. He must set to work on the constructive taskBof finding the intention of the Parliament, and he must do thisnot only from the language of the statue, but also from aconsideration of the social conditions which gave rise to itand of the mischief which it was passed to remedy, and thenhe must supplement the written word so as to give “force andClife” to the intention of the legislature. ... Put into homelymetaphor it is this: A judge should ask himself the questionhow, if the makers of the Act had themselves come across thisruck in the texture of it, they would have straightened it out?He must then do as they would have done. A judge must notalter the material of which the Act is woven, but he can andDshould iron out the creases.”

51. In Rattan Chand Hira Chand v. Askar Nawaz Jung (Dead)by Lrs.reported in (1991) 3 SCC 67, this Court, at paragraph 17 of thejudgment, has also dealt with the principles in following words:- E“17. ... The legislature often fails to keep pace with thechanging needs and values nor is it realistic to expect that itwill have provided for all contingencies and eventualities. Itis, therefore, not only necessary but obligatory on the courtsto step in to fill the lacuna. When courts perform this functionundoubtedly they legislate judicially. But that is a kind ofFlegislation which stands implicitly delegated to them to furtherthe object of the legislation and to promote the goals of thesociety. Or to put it negatively, to prevent the frustration ofthe legislation or perversion of the goals and values of thesociety. So long as the courts keep themselves tethered to theGethos of the society and do not travel off its course, so longas they attempt to furnish the felt necessities of the time anddo not refurbish them, their role in this respect has to bewelcomed.”

52. It is not in dispute that the General Body of the AppellantHSociety, which is supreme, has taken up a conscious decision to redevelop the administrative building. The General Body of the Appellant Societyhas also resolved to appoint the Hi-Rise as the developer. Those decisionshaving not been challenged at all, the Respondent No. 1 being a memberof the Appellant Society is bound by the said decisions. The GeneralBody of the Appellant Society has approved the terms and conditions ofthe development agreement by overwhelming majority. Merely becausethe terms and conditions of the development agreement are not acceptableto the Respondent No. 1, who could be said to be in minuscule minoritycannot be the basis of not to abide by the decision of the overwhelmingmajority of the General Body of the Appellant Society. The redevelopmentof the property is necessitated in view of the fact that the building is in adilapidated condition with passage of time. The redevelopment thus, inour view, would be a requirement and a necessity and cannot be termedas business. The Appellant Society in such circumstances did not evenrequire to carry out any amendment to the bye-laws or to include the“redevelopment of the buildings” as one of the objects of the Societybefore taking any decision to redevelop its property.

53. By now it is well established position that once a personbecomes a member of the Co-operative Society, he loses his individualitywith the Society and he has no independent rights except those given tohim by the statute and bye-laws. The member has to speak through theSociety or rather the Society alone can act and speaks for him qua therights and duties of the Society as a body (see : Daman Singh v. Stateof Punjab, reported in (1985) 2 SCC 670: AIR 1985 SC 973). Thisview has been followed in the subsequent decision of this Court in thecase of State of U.P v. Chheoki Employees Co-operative Society Ltd.,reported in (1997) 3 SCC 681: AIR 1997 SC 1413. In this decision, thisCourt further observed that the member of a Society has no independentright qua the Society and it is the Society that is entitled to represent asthe corporate aggregate. This Court also observed that the stream cannotrise higher than the source. Suffice it to observe that so long as theResolutions passed by the General Body of the Appellant Society are inforce and not overturned by a forum of competent jurisdiction, the saiddecisions would bind the Respondent No. 1. He cannot be permitted totake a stand alone position but is bound by the majority decision of theGeneral Body. Notably, the Respondent No. 1 has not challenged theResolutions passed by the General Body of the Appellant Society toredevelop the property and more so, to appoint the Hi-Rise as theDeveloper to give him all the redevelopment rights.

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A54. It was also argued on behalf of the Respondent No. 1 thatthe property is in a good condition and there is no need to redevelopthe existing building. In the first place, as noted earlier, the decision ofthe General Body of the Society to redevelop the subject property hasnot been challenged at all. Besides, no provision in the Co-operativeSocieties Act or the rules or any other legal provision has been broughtBto our notice which would curtail the right of the Society to redevelopthe property when the General Body of the Society intends to do so.Essentially, that is the commercial wisdom of the General Body of theSociety. It is not open to the Court to sit over the said wisdom of theGeneral Body as an Appellate Authority. Merely because one singleCmember in minority disapproves of the decision, that cannot be thebasis to negate the decision of the General Body, unless it is shownthat the decision was the product of fraud or misrepresentation or wasopposed to some statutory prohibition. That is not the grievance madebefore us. In the present case, the General Body took a consciousdecision after due deliberations for many years to redevelop its property.DEven with regard to the appointment of the “Hi-Rise” as the Developer,the record shows that it was decided by the General Body of the Societyafter examining the relative merits of the proposals received from thedevelopers.

55. The object of the provision has to be borne in mind. TheEentire legislative scheme goes to show that the Co-operative Societyis to function democratically and the internal democracy of a society,including resolutions passed in accordance with the Act, the Rules,and the bye-laws have to be respected and implemented. The Co-operative Movement is both a theory of life and a system of business.FIt is a form of voluntary association where individuals unite for mutualaid in the production and distribution of wealth upon principles of equity,reason and common good. It stands for distributive justice and assertsthe principle of equality and equity ensuring to all those engaged in theproduction of wealth a share proportionately commensurate with theGdegree of their contribution. It provides as a substitute for materialassets, honesty and a sense of moral obligation and keeps in view themoral rather than the material sanction. The movement is thus a greatCo-operative movement.

56. The basic principles of co-operation are that the members joinas human beings and not as capitalists. The Co-operative Society is aH

form of organization wherein persons associate together as human beingson the basis of equality for promotion of economic interest of its members.This movement is a method of doing the business or other activities withethical base. “Each for all and all for each” is the motto of the co-operative movement. This movement not only develops latent businesscapacities of its members but produces leaders; encourages economicand social virtues, honesty and loyalty, becomes imperative, prospectsof better life, obtainable by concerted effort is opened up; the individualrealises that there is something more to be sought than mere materialgains for himself. So, in fact, it being a business cum moral movement,and the success of the Co-operative Society depends upon the realitywith which one of the members work for the achievement of its objectsand purpose. The Committee on Co-operation in India emphasized themoral aspect of co-operation, to quote the words:- “The theory of co-operation is very briefly that an isolatedand powerless individual can, by association, with others andby moral development support, obtain in his own degree thematerial advantages available to wealthy or powerful personsand thereby develop himself to the fullest extent of his naturalabilities. By the Union of forces, material advancement issecured and by united action self reliance is fostered and itfrom the inter-action of these influences that it is hoped toattain the effective realisation of the higher and moreprosperous standard of life which has been characterised asbetter business, better arming and better living; we have foundthat there is a tendency not only among the outside public butalso among supporters of the movement to be little its moralaspect and to regard this as superfluous idealism. Cooperationin actual practice must often fall short of the standard aimedat and details inconsistent with co- operative ideals have oftento be accepted in the hope that they may lead to better things.We wish clearly to express that it is the true co-operationalone, that is, to a co-operation which recognises the moralaccept of the question that Government must look for theamelioration of the masses and not to a psudo co-operativeedifice, however imposing, which is built in ignorance of co-operative principles. The movement is essentially a moral oneand it is individualistic rather than socialistic. It provides asa substitute for material assets honesty and a sense of moral A

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Aobligation and keeps in view the moral rather than the materialsanction. Pages 5 and 6 of Theory and Practice of Co-operation in India and Abroad by Kulkarni, Volume 1. Co-operation is a mode of doing business, is at present appliedas the solution of many economic problems. Co-operation isharnessed to almost all forms of economic activity. ThoughBco-operation was introduced in this country as a remedy forrural indebtedness, it has been applied successfully in a widerange of activities such as production, distribution, banking,supply, marketing, housing and insurance. See Theory andPractice of Co-operation in India and Abroad by KulkarniCVolume 1 Page 2.”

57. In the overall view of the matter, we are convinced that theimpugned judgment and order passed by the High Court is not sustainablein law and deserves to be set aside. At one point of time, we wereinclined to allow this appeal by imposing an exemplary costs on theDRespondent No. 1 for unnecessarily dragging the Appellant Society intoa frivolous litigation & not allowing the Appellant Society to go aheadwith the project for the past almost two decades. However, we refrainfrom passing such order of costs in the hope that the Respondent No. 1realises that the development of the administrative building will be forthe betterment of the society. No individual member is going to gainEanything from the redevelopment. It is the society as an autonomousbody which will gain something.

58. For the foregoing reasons, this appeal succeeds and is herebyallowed. The impugned judgment and order passed by the High Court ishereby set aside and it shall now be open to the Appellant Society toFproceed further with its project of redevelopment in accordance withthe resolutions passed by the General Body from time to time. It isneedless to clarify that the first priority should be given to demolish theentire building as the same is in a dilapidated condition.

59. There shall be no order as to costs.G60. Pending application, if any, also stands disposed of accordingly.

Nidhi Jain(Assisted by : Shashwat Jain, LCRA)

Appeal allowed.

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