The Supreme Court has tightened the norms for registration of the new group housing societies. In a significant decision to end the builder-bureaucracy nexus, the apex court in a recent judgment has stipulated that the credentials of the members of an applicant society will have to be mandatorily verified either by the land owning agency or the Registrar, Cooperative Societies even before the allotment of land is made.
The judgment is significant as under the prevailing practice, on presentation of list of members, the Registrar Cooperative Societies (RCS) used to approve the allotment of land and the land owning agency would issue a provisional allotment letter. The verification of members used to be done only when actual plotting of land took place.
The Bench of Justices Pinaki Chandra Ghose and Deepak Gupta confronted the problem in two cases where defunct societies were illegally revived by builder mafia in Delhi. To ensure that in future, the fraud gets caught right at the outset, the bench held, "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."
The two societies before the Court — Bankmens CGHS and Safdarjung CGHS had gone defunct in 1990. Almost eight years after its liquidation, a non-member applied to RCS for revival of the same societies but with a different address, a set of new members and forged letter of resignation of old members.
All this came to light after the Delhi High Court, while hearing their case ordered Central Bureau of Investigation (CBI) to report into the individual allotment of close to 130 societies that applied for renewal with RCS. What was shocking was the hand of builders in getting these societies revived.
The CBI in its enquiry report claimed that as was the norm the society must deposit 35 per cent of the land cost to Delhi Development Authority (DDA) for allotment of land. In the case of Bankmens Society, it was discovered that this payment, amounting to Rs67.38 lakh was deposited by a group of builders and not by any of the enrolled members.
Noting the builder-official nexus, the Bench said, “In these two cases, the move for revival was started by persons who were not even members of the original society. The revival was funded by builders. The original members have all vanished into thin air. There is no explanation as to how they resigned and who accepted their resignation (as copy of resignation has to be sent directly to RCS)…thus the very revival of the societies is illegal and when the foundation falls the edifice which has been developed on the foundation must go.”
Bankmens Society was yet to get physical possession of land although DDA had issued letter of allotment. While in the case of Safdarjung Society, plot was actually handed over after the society approached Delhi High Court. Setting aside the revival of the two societies, the apex court quashed the allotment of land itself. However, noticing that there may be some genuine members who may have been duped by the promoters, the Court directed DDA to refund the deposited amount with 10 per cent annual interest from the date of deposit.