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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)

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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

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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

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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

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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

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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,

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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

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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

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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

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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

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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

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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

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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.

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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.

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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

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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

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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

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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 Maharashtra1, 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

1 (2005) 7 SCC 605

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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

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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.

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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.

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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

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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.

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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

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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

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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