Supreme Court Directs Construction of New Building to Resolve Housing Society Dispute: Sant Lal Gupta vs. Umesh Kumar Jain (2019)

Date of the Judgment: May 8, 2019
Citation: Contempt Petition (C) Nos. 1505-1506 of 2017 in SLP (C) Nos. 10375-10376 of 2017
Judges: Uday Umesh Lalit, J. and Sanjay Kishan Kaul, J.
Can a court ensure justice for all parties involved in a long-standing housing society dispute, even when some members are in contempt of court orders? The Supreme Court of India grappled with this complex issue in a case involving the Modern Cooperative Group Housing Society. This case involves a contempt petition arising from a dispute over possession of apartments in the society. The Court had to balance the rights of the original members who were initially expelled and later reinstated, with those of the members who were inducted later and were currently occupying the flats. The judgment was delivered by a two-judge bench comprising Justices Uday Umesh Lalit and Sanjay Kishan Kaul.

Case Background

The Modern Cooperative Group Housing Society Limited expelled 27 members, including the petitioners, on December 27, 1987. Subsequently, 15 new members, including the alleged contemnors, were inducted. The expulsion was challenged, and on October 18, 2010, the Supreme Court of India ruled in favor of the expelled members in Civil Appeal No. 9439 of 2003, directing that they be accommodated in unallotted flats. The newly inducted members then approached the Court, which directed them to approach the Registrar of Cooperative Societies. The Registrar ruled that the induction of the new members was illegal and directed the re-admission of the original 14 members. This order was upheld by the Financial Commissioner and the High Court of Judicature at Delhi. The High Court directed that the members lower in seniority would have to surrender and vacate the flats in their occupation in favour of the Rakesh Grover Group (14 members). The special leave petitions against the High Court order were dismissed by the Supreme Court on March 31, 2017. The special leave petitioners filed undertakings to vacate the apartments in their occupation. However, they failed to do so, leading to the present contempt petition.

Timeline:

Legal Framework

The case revolves around the enforcement of orders passed by various judicial and quasi-judicial bodies. The Supreme Court’s order dated October 18, 2010, in Civil Appeal No. 9439 of 2003, directed the accommodation of the expelled members. The Registrar of Cooperative Societies’ order dated February 24, 2012, directed the re-admission of the original 14 members and set aside the allotment of flats to the new members. This order was upheld by the Financial Commissioner and the High Court. The Supreme Court’s order dated March 31, 2017, dismissed the special leave petitions against the High Court order, directing the petitioners to vacate the premises. The legal framework also includes the provisions of the Delhi Cooperative Societies Act, 2003, and the Multi-State Cooperative Societies Act, 2002, which govern the functioning of cooperative societies.

Arguments

Arguments of the Alleged Contemnors:

• The alleged contemnors argued that they were inducted as members against existing vacancies, paid all installments, and have been in possession of their apartments for several years.
• They contended that the construction of the society was completed using the deposits made by members, including themselves.
• They submitted that it would be highly prejudicial to ask them to vacate their apartments after such a long period.
• They suggested that the society had sufficient land to construct another building to accommodate all members.

Arguments of the Contempt Petitioners:

• The contempt petitioners argued that the alleged contemnors violated the orders of the Supreme Court by not vacating the premises despite filing undertakings.
• They demanded that they be put in possession of the apartments to which they were entitled.

Innovativeness of the argument: The alleged contemnors innovatively argued that the society had sufficient land to construct another building to accommodate all members, which was considered by the court.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether the alleged contemnors had violated the orders passed by the Supreme Court by not vacating the apartments despite giving undertakings to do so.
2. Whether a solution could be found to accommodate the interests of both the contempt petitioners and the alleged contemnors, considering the equities in favor of both parties.

Treatment of the Issue by the Court:

Authorities

Judgment

How each authority was viewed by the Court?

The Supreme Court considered the previous orders of the Court, the Registrar of Cooperative Societies, and the High Court to establish the rights of the original members. The Court also considered the reports of the Administrator and Architect to determine the feasibility of constructing a new building. The Court noted that the Municipal Corporation of Delhi (North) had no objection in principle to the construction of a new building if the FAR was available. The Court relied on the following authorities:

✓ Order dated 18.10.2010 in Civil Appeal No.9439 of 2003: The Supreme Court upheld the direction to accommodate the expelled members.

✓ Order dated 24.02.2012 of Registrar Cooperative Societies: The Supreme Court upheld the direction for re-admission of the original members and setting aside the allotment to new members.

✓ Order dated 31.01.2017 in Writ Petition (Civil) No.4202 of 2014: The Supreme Court noted the High Court’s direction for the members lower in seniority to vacate the flats in favor of the original members.

✓ Order dated 31.03.2017 in SLP(C)…..CC No.6319 of 2017: The Supreme Court noted the dismissal of the special leave petitions and the direction to vacate the premises.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the need to balance the legal requirements with the equitable considerations. The Court acknowledged that the alleged contemnors had violated the orders of the Court by not vacating the premises despite giving undertakings, but also recognized that they had been inducted as members, paid all installments, and had been in possession of their apartments for several years. The Court also noted that the society had benefited from the contributions of both the original and the subsequently inducted members. The Court emphasized that the society had sufficient funds to construct a new building and that the Municipal Corporation of Delhi (North) had no objection in principle to such construction. The Court was also influenced by the need to provide a solution that would accommodate all parties involved in the dispute.

The Court’s reasoning was a mix of factual considerations and legal principles. The Court considered the factual aspects of the case, such as the induction of new members, the deposits made by them, and their possession of the apartments. The Court also considered the legal aspects, such as the violation of court orders and the rights of the original members. The Court’s decision was influenced by the need to find an equitable solution that would accommodate all parties involved.

The Supreme Court considered alternative interpretations, such as enforcing the original order strictly, which would have resulted in the eviction of the alleged contemnors without any provision for their accommodation. However, the Court rejected this approach, finding that it would not be equitable and would not address the underlying issues. The Court also considered the possibility of allowing the alleged contemnors to remain in their existing apartments, but rejected this approach as it would have violated the rights of the original members who had been directed to be re-admitted. The Court ultimately decided that the construction of a new building was the only viable solution that would accommodate all parties involved.

The Supreme Court’s decision was to direct the construction of a new building with 18 apartments. The Court directed that the alleged contemnors shall vacate their respective apartments on or before 31.08.2019. The apartments so vacated shall thereafter be allotted to those persons who were directed to be re-admitted as members. Each of the alleged contemnors, if he or she desires to have a new apartment in the newly erected building, shall deposit a sum of Rs.10 lakhs with the Administrator of the Modern Cooperative Group Housing Society Limited on or before 31.10.2019. The Court also directed that the Administrator shall prefer an appropriate application with the concerned authorities to seek permission to erect a new building with 18 apartments. The Court also directed that the Municipal Corporation of Delhi shall consider the application and take appropriate decision in the matter. The Court also directed that the Administrator shall be entitled to have a fresh draw of lots in respect of the building to be constructed.

The Court reasoned that this solution would ensure that the contempt petitioners are put in possession of the apartments to which they have been found to be entitled to but will also take care of the interests of the alleged contemnors who are required to vacate the apartments only because of the setting aside of the expulsion of the contempt petitioners. The Court stated that these directions, in its considered view, is the only solution in which the interests of all can be sufficiently taken care of.

“In the circumstances, though we are considering the matter in contempt jurisdiction, in our considered view ends of justice would be met, if following directions are passed:-“

“In our view, the directions as aforesaid would not only ensure that the contempt petitioners are put in possession of the apartments to which they have been found to be entitled to but will also take care of the interests of the alleged contemnors who are required to vacate the apartments only because of the setting aside of the expulsion of the contempt petitioners.”

“These directions, in our considered view is the only solution in which the interests of all can be sufficiently taken care of.”

Key Takeaways

• The alleged contemnors are required to vacate their respective apartments by August 31, 2019.
• The vacated apartments will be allotted to the original members who were directed to be re-admitted.
• Each of the alleged contemnors, if they desire to have a new apartment in the newly erected building, must deposit a sum of Rs. 10 lakhs with the Administrator by October 31, 2019.
• The Administrator is required to apply for permission to construct a new building with 18 apartments within one month.
• The Municipal Corporation of Delhi is directed to consider the application for construction within one month.
• The Administrator is entitled to initiate the process for having new members admitted who are willing to deposit such sums as are required towards the cost of construction of an individual apartments which could then be allotted to them.
• The Administrator is entitled to have a fresh draw of lots in respect of the building to be constructed.

Directions

The Supreme Court issued the following directions:

• All the alleged contemnors shall vacate their respective apartments on or before 31.08.2019.
• The apartments so vacated shall thereafter be allotted to those persons who were directed to be re-admitted as members.
• Each of the alleged contemnors, if he or she desires to have a new apartment in the newly erected building, shall deposit a sum of Rs.10 lakhs with the Administrator of the Modern Cooperative Group Housing Society Limited on or before 31.10.2019.
• Within one month from the date of this order, the Administrator shall prefer an appropriate application annexing therewith all the required documents including plans and drawings and seek permission to erect a new building with 18 apartments.
• Municipal Corporation of Delhi which has agreed in principle that the permission for erecting a new building can be granted, shall consider said application and take appropriate decision in the matter within one month from the date when the application is preferred.
• After the construction has begun, the Administrator shall be entitled to initiate the process for having new members admitted who are willing to deposit such sums as are required towards the cost of construction of an individual apartments which could then be allotted to them.
• The Administrator shall also be entitled to have a fresh draw of lots in the presence of an Official from the Office of Registrar, Cooperative Societies in respect of the building to be constructed so that each of those 18 apartments could be allotted to the concerned persons including the alleged contemnors herein.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that in contempt proceedings, the court can take an equitable approach to balance the rights of all parties involved and ensure that justice is served. The Court, while acknowledging the violation of its orders, also considered the equities in favor of the alleged contemnors and directed the construction of a new building to accommodate all parties. This approach demonstrates that the Court is willing to go beyond strict enforcement of its orders to find a solution that is fair and just to all concerned. There is no change in the previous position of law, but the court has taken an innovative approach to deal with the contempt proceedings.

Conclusion

The Supreme Court’s judgment in this case provides a comprehensive resolution to a long-standing housing society dispute. The Court recognized the violation of its orders by the alleged contemnors but also acknowledged the equities in their favor. By directing the construction of a new building, the Court balanced the rights of the original members who were initially expelled and later reinstated, with those of the members who were inducted later and were currently occupying the flats. This case highlights the Court’s commitment to finding equitable solutions that serve the interests of all parties involved.