Holding

The General Body’s resolution to appoint a developer and redevelop the building is valid and binding, and the society may lawfully contract with a third‑party developer; the High Court’s decision was erroneous.

Summary

The Bengal Secretariat Cooperative Land Mortgage Bank and Housing Society Ltd. (the appellant) sought to redevelop its dilapidated administrative building by entering into a joint‑venture agreement with a private developer, Hi‑Rise Apartment Makers Pvt. Ltd. A dissenting member, respondent No.1, challenged the society’s actions under Section 95 of the West Bengal Co‑operative Societies Act, leading to an arbitrator’s award restraining demolition and directing a special general meeting. The society subsequently passed resolutions in its Annual General Meeting to terminate the earlier work order, later re‑authorising the developer, and obtained permission from the Registrar. The respondent filed an arbitration‑execution suit; the Civil Judge and the Calcutta High Court upheld the award, holding that the society could not contract with a third‑party developer. On appeal, the Supreme Court held that the General Body’s resolution is supreme, the society may enter into such agreements, and the High Court erred in its interpretation of the Act and Rules. Consequently, the appeal was allowed and the society was permitted to proceed with the redevelopment.

Issues considered

The legality of a co‑operative society entering into an agreement with a third‑party developer for redevelopment of its property under the West Bengal Co‑operative Societies Act, 1940 (as amended).
Whether the resolution passed by the General Body in an Annual General Meeting binds a dissenting member despite the arbitrator’s order for a Special General Meeting.
The correctness of the High Court’s interpretation of Sections 28 and 95 of the Act and the applicable Rules regarding delegation of construction work.

Legislation cited

Constitution of Indias. Article 19, s. Article 243ZT, s. Article 43B
West Bengal Co-operative Societies Act, 1940 (as amended 2006)s. 28, s. 95(1)
West Bengal Co-operative Societies Rules, 1987s. Rule 137(2), s. Rule 137(3), s. Rule 149(11), s. Rule 21

Subjects

co-operative societyinternal democracySection 95redevelopmentthird‑party developergeneral body resolutionstatutory interpretationWest Bengal Co-operative Societies Actarbitration award

Judgment

1084 [2022] REPORTS
SUPREME COURT 13 S.C.R. 1084 [2022] 13 S.C.R.

A THE BENGAL SECRETARIAT COOPERATIVE LAND
MORTGAGE 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 AND
J.B. PARDIWALA, JJ.]
West Bengal Co-operative Societies Act, 1940: s. 95 – Dispute
C
pertaining to co operative societies – Appellant Society to carry
out the demolition/construction of the administrative building entered
into an agreement with the developer – Respondent No. 1, member
of the appellant Society filed a case u/s. 95(1) wherein the arbitrator
passed an award directed that the society to restrain itself from taking
D any step towards demolishing the existing Administrative Building
with the developer and a special general meeting be called –
Appellant resolved in AGM to terminate the work orders issued in
favour of the developer and refund the security deposit – However,
the respondent No.1 filed another case on the ground that the former
Award had directed the Society to hold an Special General Meeting
E
and not an Annual General Meeting – Meanwhile the developer
also filed a matter seeking to injunct the appellant society from
giving effect to the Resolution wherein the parties were directed to
maintain status quo – In the light of the impasse, it was resolved in
the AGM that the Board of the Society to get the administrative
F building developed through the developer on the revised terms and
conditions – Appellant society was accorded permission –
Respondent No. 1 then instituted the arbitration execution case in
respect of the award made in the 1st dispute case, which was allowed
– In revision, by the appellant society, the High Court upheld the
said order – Sustainability of – Held: Not sustainable – High Court
G
erred in holding the appellant Society could not have entered into
an agreement with a third party developer as the Act or the Rules
do not provide for the same – It is too much for the High Court to
expect that all the members of the appellant Society should on their
own contribute and undertake the development of the new
H administrative building – Co-operative Society is to function
1084
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1085
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR

democratically and the internal democracy of a society, including A
resolutions passed in accordance with the Act, the Rules, and the
bye-laws have to be respected and implemented – General Body of
the Society resolved to appoint the developer, those decisions having
not been challenged at all, the respondent No. 1 being a member of
the appellant Society is bound by the said decisions – Merely because
B
one single member in minority disapproves of the decision, that
cannot be the basis to negate the decision of the General Body,
unless it is shown that the decision was the product of fraud or
misrepresentation – Redevelopment of the property was necessitated
in view of the dilapidated condition of the building – No provision
in the Co-operative Societies Act or the rules or any other legal C
provision which would curtail the right of the Society to redevelop
the 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 the
General Body as an Appellate Authority – Thus, the judgment and
order passed by the High Court is set aside.
D
Allowing the appeal, the Court
HELD: 1.1 The High Court is not correct in saying that
the appellant Society could not have entered into an agreement
with a third party developer as the Act or the Rules do not provide
for the same. It is too much for the High Court to expect that all E
the members of the appellant Society should on their own
contribute and undertake the development of the new
administrative building. As regard the total cost of the project, it
is informed that approximately the cost would be Rupees Twenty
Crore. What is in the mind of the respondent No. 1 perhaps is
that the members of the appellant Society should contribute this F
amount and undertake the construction rather than involving a
developer and making the entire project a business venture. It
is just next to impossible. [Para 46][1106-D-E]
1.2 In the background of the constitutional mandate, the
question is not what the statute does say but what the statute G
must say. If the Act or the Rules or the bye-laws do not say what
they should say in terms of the Constitution, it is the duty of the
Court to read the constitutional spirit and concept into the Acts.
“In so far as in its Act Parliament does not convey its intention
H
1086 SUPREME COURT REPORTS [2022] 13 S.C.R.

A clearly, expressly and completely, it is taken to require the
enforcement agencies who are charged with the duty of applying
legislation to spell out the detail of its legal meaning. This may
be done either by finding and declaring implications in the words
used by the legislator, or by regarding the breadth or other
obscurity of the express language as conferring a delegated
B
legislative power to elaborate its meaning in accordance with
public policy (including legal policy) and the purpose of the
legislation”. The conventional view is that the legislature alone
makes 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 appellant
C Society, which is supreme, has taken up a conscious decision to
redevelop the administrative building. The General Body of the
appellant Society has also resolved to appoint the Hi-Rise as the
developer. Those decisions having not been challenged at all,
the respondent No. 1 being a member of the appellant Society is
D bound by the said decisions. The General Body of the appellant
Society has approved the terms and conditions of the development
agreement by overwhelming majority. Merely because the terms
and conditions of the development agreement are not acceptable
to the respondent No. 1, who could be said to be in minuscule
minority cannot be the basis of not to abide by the decision of the
E overwhelming majority of the General Body of the appellant
Society. The redevelopment of the property is necessitated in
view of the fact that the building is in a dilapidated condition with
passage of time. The redevelopment thus, would be a requirement
and a necessity and cannot be termed as business. The appellant
F Society in such circumstances did not even require to carry out
any amendment to the bye-laws or to include the “redevelopment
of the buildings” as one of the objects of the Society before taking
any decision to redevelop its property. [Para 52][1108-H; 1109-
A-D]
G 1.4 Once a person becomes a member of the Co-operative
Society, he loses his individuality with the Society and he has no
independent rights except those given to him by the statute and
bye-laws. The member has to speak through the Society or rather
the Society alone can act and speaks for him qua the rights and

H
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1087
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR

duties of the Society as a body. Suffice it to observe that so long A
as the Resolutions passed by the General Body of the appellant
Society are in force and not overturned by a forum of competent
jurisdiction, the said decisions would bind the respondent No. 1.
He cannot be permitted to take a stand alone position but is bound
by the majority decision of the General Body. Notably, the
B
respondent No. 1 has not challenged the resolutions passed by
the General Body of the appellant Society to redevelop the
property and more so, to appoint the Hi-Rise as the Developer
to give him all the redevelopment rights. [Para 53][1109-D-H]
1.5 It was submitted that the property is in a good condition
and there is no need to redevelop the existing building. In the C
first place, the decision of the General Body of the Society to
redevelop the subject property has not been challenged at all.
Besides, no provision in the Co-operative Societies Act or the
rules or any other legal provision has been brought to the notice
which would curtail the right of the Society to redevelop the D
property when the General Body of the Society intends to do so.
Essentially, that is the commercial wisdom of the General Body
of the Society. It is not open to the Court to sit over the said
wisdom of the General Body as an Appellate Authority. Merely
because one single member in minority disapproves of the
decision, that cannot be the basis to negate the decision of the E
General Body, unless it is shown that the decision was the product
of fraud or misrepresentation or was opposed to some statutory
prohibition. That is not the grievance made before this Court. In
the instant case, the General Body took a conscious decision
after due deliberations for many years to redevelop its property. F
Even 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 Society after examining the relative merits of the
proposals received from the developers. [Para 54][1110-A-D]
1.6 The object of the provision has to be borne in mind. G
The entire legislative scheme goes to show that the Co-operative
Society is to function democratically and the internal democracy
of a society, including resolutions passed in accordance with the

H
1088 SUPREME COURT REPORTS [2022] 13 S.C.R.

A 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. It is a form of voluntary association
where individuals unite for mutual aid in the production and
distribution of wealth upon principles of equity, reason and
common good. It stands for distributive justice and asserts the
B
principle of equality and equity ensuring to all those engaged in
the production of wealth a share proportionately commensurate
with the degree of their contribution. It provides as a substitute
for material assets, honesty and a sense of moral obligation and
keeps in view the moral rather than the material sanction. The
C movement is thus a great Co-operative movement. [Para
55][1110-E-G]
1.7 The basic principles of co-operation are that the
members join as human beings and not as capitalists. The Co-
operative Society is a form of organization wherein persons
D associate together as human beings on the basis of equality for
promotion of economic interest of its members. This movement
is a method of doing the business or other activities with ethical
base. “Each for all and all for each” is the motto of the co-operative
movement. This movement not only develops latent business
capacities of its members but produces leaders; encourages
E economic and social virtues, honesty and loyalty, becomes
imperative, prospects of better life, obtainable by concerted effort
is opened up; the individual realises that there is something more
to be sought than mere material gains for himself. So, in fact, it
being a business cum moral movement, and the success of the
F Co-operative Society depends upon the reality with which one of
the members work for the achievement of its objects and purpose.
The Committee on Co-operation in India emphasized the moral
aspect of co-operation. [Para 56][1110-H; 1111-A-C]
1.8 The impugned judgment and order passed by the High
G Court is not sustainable in law and is set aside. At one point of
time, there is an inclination to allow this appeal by imposing an
exemplary costs on the respondent No.1 for unnecessarily
dragging the appellant Society into a frivolous litigation & not
allowing the appellant Society to go ahead with the project for

H
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1089
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR

the past almost two decades. However, this Court refrains from A
passing such order of costs in the hope that the respondent No.
1 realises that the development of the administrative building
will be for the betterment of the society. No individual member is
going to gain anything from the redevelopment. It is the society
as an autonomous body which will gain something. [Para 57][1112-
B
C-E]
1.9 It would now be open to the appellant Society to proceed
further with its project of redevelopment in accordance with the
resolutions passed by the General Body from time to time. [Para
58][1112-F]
C
Vipulbhai M. Chaudhary v. Gujarat Cooperative Milk
Marketing Federation Limited (2015) 8 SCC 1 : [2015]
(3) SCR 997; Daman Singh v. State of Punjab (1985) 2
SCC 670 : AIR 1985 SC 973 : [1985] (3) SCR 580;
State of U.P v. Chheoki Employees Co-operative Society
Ltd. (1997) 3 SCC 681 : AIR 1997 SC 1413:[1997] (1) D
SCR 380; Rattan Chand Hira Chand v. Askar Nawaz
Jung (Dead) by Lrs. (1991) 3 SCC 67 : [1991] (1) SCR
327 – referred to.
Seaford Court Estates v. Asher (1949) 2 KB 481 : (1949)
2 All ER 155 (CA) – referred to. E

Bennion on Statutory Interpretation by Francis Bennion,
6th Edn. 136 - referred to.
Case Law Reference
[2015] (3) SCR 997 referred to Para 36 F
[1985] (3) SCR 580 referred to Para 45, 53
[1997] (1) SCR 380 referred to Para 45, 53
[1991] (1) SCR 327 referred to Para 51
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7261 G
of 2022.
From the Judgment and Order dated 08.08.2018 of the High Court
of Calcutta in C.O. No.2714 of 2014.

H
1090 SUPREME COURT REPORTS [2022] 13 S.C.R.

A Joydeep 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
B J. B. PARDIWALA, J.
1. Leave granted.
2. This appeal is at the instance of a Co-operative Society
registered under the West Bengal Co-operative Societies Act, 1940 (for
short, ‘the Act 1940’) and is directed against the judgment and order
C passed by the High Court at Calcutta (Civil Revisional Jurisdiction,
Appellate Side) dated 08.08.2018 in the CO No. 2714 of 2014 by which
the High Court rejected the civil revision filed by the Appellant Society
herein thereby affirming the order passed by the Civil Judge (Senior
Division), 9th Court at Alipore, District South 24 Paraganas in the
D Arbitration Execution Case No. 19 of 2009 dated 17.04.2014.
FACTUAL MATRIX
3. The Appellant Society was registered in the year 1945 under
the Act 1940 (now governed by the West Bengal Co-operative Societies
Act, 2006 as amended up to date, [for short, ‘the Act 2006’]). The
E Appellant Society was formed for the purpose of providing housing to
the employees of the West Bengal Secretariat and others in accordance
with the bye-laws of the society. The registered office of the Appellant
Society at the time of registration was that of the Bengal Secretariat
being the Writers Buildings, Calcutta (P.O. Calcutta G.P.O., Thana-Hare
Street, Calcutta). At present, the registered office of the Appellant Society
F
is located at No. 1, Gariahat Road, Jodhpur Park, P.S. Lake, Koltaka-
700068.
4. The Appellant Society purchased a parcel land along with two
buildings erected on it on 18.07.1947 from the Official Trustee of Bengal,
the Executor of the property of Ketty Graham William admeasuring
G approximately 80.90 acre. One of the buildings out of the two is used as
the administrative building of the Appellant Society and the other building
is used for the Girls School. The Appellant Society was registered with
multipurpose activities. The administrative building by now is almost 100
years old and is in a dilapidated condition. The certificate issued by the
H Kolkata Municipal Corporation dated 15.07.2016 along with the
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1091
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

photographs of the building would indicate that the same may collapse at A
any 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 out
to the Indian Postal Department for running a post office namely the
Jodhpur Park Post Office with current PIN Code 700068. Since then, B
the Post Office is functioning for the benefit of the members of the
Appellant Society as well as the locals at large. Having regard to the
fact that the administrative building is in a dilapidated condition and
requires urgent repairs and renovations, it was felt by the Appellant
Society sometime in the year 2001 that it would be more expedient to
demolish the old structure and construct a new building in its place which C
would be safe for habitation and would allow for more efficient utilisation
of the available space/land area.
6. In such circumstances referred to above, the Appellant Society
invited tenders through an advertisement published in the local dailies
for the development of the administrative building through a joint venture D
with the developer.
7. Pursuant to the tender process, the Hi-Rise Apartment Makers
Private Limited (for short, ‘the Hi-Rise’) was declared as the successful
bidder. The entire matter was placed before the General Body of the
Appellant Society at the Annual General Meeting which was held on E
28.04.2002. The meeting was ultimately adjourned to 05.05.2002. At the
Annual General Meeting of the Appellant Society convened on
05.05.2002, it was resolved that the Appellant Society would accept the
earnest/security money from the Hi-Rise and enter into an agreement
accordingly with it for the purpose of demolition of old administrative F
building and for construction of the new administrative building.
8. On 22.06.2002, the Appellant Society issued the work order
pursuant to the decision taken in the Annual General Meeting. In the
said work order, it was stated that the Appellant Society would enter into
an agreement with the Hi-Rise for the demolition of the old dilapidated G
building and construction of a new administrative building. It was agreed
between the Appellant Society and the Hi-Rise that the new structure
would be partly residential and partly for commercial purpose.
9. It appears that the Respondent No. 1 herein namely Aloke
Kumar in his capacity as one of the members of the Appellant Society
H
1092 SUPREME COURT REPORTS [2022] 13 S.C.R.

A starting creating various hindrances in the way of the Appellant Society
and somehow or the other did not allow the Appellant Society to go
ahead with the project. It also appears from the materials on record that
the Board of the Appellant Society decided to remove the Respondent
No. 1 from the primary membership of the society on the ground of
having been found acting in a manner prejudicial to the interest of the
B
Appellant Society. Pursuant to the resolution passed by the Board dated
22.10.2002, the Appellant Society sought approval from the Registrar of
the Co-operative Societies to remove the Respondent No. 1 from the
primary membership of the society.

C 10. It appears that since the Registrar of the Co-operative Societies
did not object to the resolution terminating the membership of the
Respondent No. 1 herein within six weeks as per Rule 137(2) of the
West Bengal Co-operative Societies Rules, 1987 (for short, ‘the Rules
1987’), the Board of the Appellant Society terminated the membership
of the Respondent No. 1 with effect from 04.12.2002. The Respondent
D No. 1, being aggrieved with the action taken by the Board of the Appellant
Society, filed an appeal before the Registrar of the Co-operative Societies
under Rule 137(3) of the Rules 1987.
11. The materials on record further reveal that the decision of the
Board of the Appellant Society expelling the Respondent No. 1 from the
E primary membership of the Appellant Society was later set aside.
12. On 14.01.2003 the Respondent No. 1 herein filed a dispute
case before the Registrar of the Co-operative Societies, West Bengal
against the Appellant Society, inter alia, praying for the following:

F “a) declaring that all actions of the Board right from the
publication of the notice inviting bids, floating of bid
documents, the proceedings and resolution in the adjourned
Annual General Body of the aforesaid Society held on
5.5.2002 accepting the offer of M/s Hi-Rise Apartment Makers
Pvt. Ltd. and acceptance of Earnest Money and security
G deposit of Rs. 10 lakh from them and thereafter, were illegal
and void.”
13. The proceedings came to be registered as the Dispute Case
No. 47/RCS of 2002-03 filed under Section 95(1) of the West Bengal
Co-operative Societies Act, 1983 (for short, ‘the Act 1983’).
H
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1093
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

14. The Arbitrator vide Award dated 21.12.2004 passed in the A
Dispute Case No. 47/RCS of 2002-03, inter alia, directed as under:
“1) That the society shall restrain itself from taking any step
towards demolishing the existing constructions of the
Administrative Building of the society as part of a joint venture
with a private promoter/developer, M/s Hi Rise Apartment B
Makers Pvt. Ltd.
2) That special general meeting be called with clear one
month’s notice ensuring receipts by all the members- discussing
the issue in every detail with transparency at every stage being
observed to the full, and any resolution taken thereof in favour C
of the ROC’s proposal of this nature be sent to the Registrar
of Cooperative Societies, West Bengal for his approval has
required under Rule 149(11) of W.B.C.S. Rules, 1987.”
15. The Appellant Society in due compliance with the Award dated
21.12.2004 resolved by way of resolution taken in the AGM dated D
15.01.2006 to terminate the work orders dated 22.06.2002 issued in favour
of the Hi-Rise and refund the security deposit.
16. Not satisfied with the Resolution dated 21.12.2004 and the
consequent termination of the contractual obligations with the Hi-Rise,
the Respondent No.1 filed yet another Dispute Case being the DC No. E
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 Appellant
Society to hold an “Special General Meeting” and not an “Annual General
Meeting”.
17. Being aggrieved, the Hi-Rise filed Dispute Case No. 11 of F
2006 seeking to inter alia injunct the Appellant Society from giving effect
to the Resolution dated 15.01.2006. The said dispute came to be referred
to the Calcutta High Court vide the CO No. 2203 of 2006. Therein the
Calcutta High Court vide order dated 22.01.2007 remanded the matter
to the Arbitrator for fresh hearing while directing both the parties to
G
maintain status quo.
18. In the light of the impasse created due to the litigation initiated
by the Hi-Rise, it was, inter alia, resolved in the AGM held on 27.05.2007
that the Board of the Appellant Society be asked to resolve the dispute
with the Hi-Rise and further empowered it to get the administrative
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1094 SUPREME COURT REPORTS [2022] 13 S.C.R.

A building 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 27.05.2007
passed at the Annual General Meeting of the Appellant Society has not
been challenged till date.
B 20. The Joint Registrar, Co-operative Societies (Housing) on
16.06.2011 accorded permission to the Appellant Society for the
construction of Office-cum-Administrative Building pursuant to the
Resolution passed in AGM on 27.05.2007.
21. On 30.10.2009, the Respondent No. 1 instituted the Arbitration
C Execution Case No. 19 of 2009 before the Civil Judge, Alipore Court
seeking 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 declared
that the Execution Case was maintainable.
22. Being aggrieved, the Appellant Society preferred a Civil
D Revision before the Calcutta High Court being the CO No. 2714 of 2014
wherein the impugned order came to be passed.
23. In view of the aforesaid, the Appellant Society is before this
Court.
SUBMISSIONS ON BEHALF OF THE APPELLANT
E
SOCIETY
24. Mr. Joydeep Mazumdar, the learned counsel appearing for
the Appellant Society vehemently submitted that the High Court
committed a serious error in passing the impugned order. The learned
counsel would submit that the final authority of a co-operative society
F
under the Act 2006 is its General Body of Members or its elected
representatives. In this regard, the learned counsel invited the attention
of this Court to Section 28 of the Act 2006. The learned counsel further
submitted that the High Court failed to appreciate one of the cardinal
principles of the “Co-operative Movement” that the co-operatives are
G autonomous organisations and one single member of a co-operative
society should not be allowed to hold the entire society at ransom only
because of his own whims and caprice.
25. The learned counsel argued that the High Court failed to
appreciate that there is no material difference between an Annual General
H Meeting and a Special General Meeting except for the nomenclature in
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1095
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

all practical sense. In this regard, our attention was drawn to Rule 21 of A
the West Bengal Co-operative Societies Rules, 2011 (for short, ‘the Rules
2011’).
26. The learned counsel would submit that the High Court failed
to appreciate that there is nothing in the Act and/or Rules which would
prevent a Society from taking a pragmatic and practical view of the B
situation in approaching Developers who would act in the benefit of the
larger interest of the members of the Society. It was also argued that the
High Court fell into error in taking the view that the resolution dated
15.01.2006 was not transparent. It was also argued that the High Court
could not have taken a dismissive view of the order passed by the Joint
Registrar, Co-operative Societies (Housing) dated 16.06.2011 permitting C
the Appellant Society to carry out the demolition/construction of the
administrative building pursuant to the resolution dated 27.05.2007. The
learned counsel pointed out something very important, that neither the
resolution dated 27.05.2007 nor the permission granted by the Joint
Registrar dated 16.06.2011 has been challenged by the Respondent No. D
1 herein.
27. In the last, the learned counsel argued that the Respondent
No. 1 unilaterally has been stalling the efforts of the Appellant Society to
develop the administrative building for the last two decades contrary to
the spirit of the very “Co-operative Movement”. According to the learned E
counsel, the Respondent No.1 has been a true example of a “Dog in the
Manger”.
28. In such circumstances referred to above, the learned counsel
appearing for the Appellant Society prayed earnestly that the impugned
judgment and order of the High Court may be set aside and the Appellant F
Society may be permitted to go ahead with the development of the
administrative building in accordance with the plans & the rules and
regulations.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
NO. 1 G
29. On the other hand, Mr. Soumo Palit, the learned counsel
appearing for the Respondent No. 1 vehemently opposed the present
appeal submitting that no error, not to speak of any error of law, could be
said to have been committed by the High Court in passing the impugned
order in exercise of its supervisory jurisdiction under Article 227 of the
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1096 SUPREME COURT REPORTS [2022] 13 S.C.R.

A Constitution of India. In such circumstances referred to above, the learned
counsel appearing for the Respondent No. 1 prayed that there being no
merit in the present appeal, the same may be dismissed.
ANALYSIS
30. Having heard the learned counsel appearing for the parties
B and having gone through the materials on record, the only question that
falls 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 either
side, we must look into the line of reasoning adopted by the High Court
C in its impugned order which is as under:
“25. It is seen that nowhere in the Act or the Ru1es, the
delegation of construction work to third party developers,
having commercial interest, is contemplated.
26. The entire spirit of the co-operative movement, being that
D of participation of the members for their own good was missed
out in the commercial endeavour of the petitioners to earn
quick profits at the expense of the co-operative spirit.
27. The arguments of the petitioners, that the first component
of the arbitral award becomes academic upon fulfillment of
E the second, is also not acceptable, since the first component
is a continuous restraint, independent of the second. The
petitioners have, in any event, flouted both the components
of the award by posing to cancel the previous agreement with
M/s Hi-Rise and renewing the same agreement in a superficially
changed format. The continuation of the earlier joint venture
F has also been reflected from the project submitted by the
petitioners before the Registrar, Co-operative Societies,
purporting to seek approval.
28. The petitioners also rely on an annual report of an Annual
General Meeting held by the petitioner no. 1-Society on May
G 27, 2007, to impress upon this Court that the award was
complied with by the Society in spirit.
29. However, apart from the fact that the award contemplated
not an Annual General Meeting but a Special General Meeting,
the report itself belies the impression sought to be created by
H the petitioners. It is reflected from the report that the Board of
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1097
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

Directors, even in the teeth of the award, did not even consider A
any other option than to renew the previous agreement with
M/s Hi-Rise itself, despite the specific restraint order
comprised in the first component of the arbitral award. The
project entered into, as reflected from the annual report itself,
contemplated only modification of terms of the previous joint
B
venture agreement, and blatantly exhibited the sole purpose
of such project to gain merely Rs. 20 million (by virtue of
enhancement of the market value of the project being fully
commercial). As such, although commerce ipso facto need not
be deprecated, the tenor of the arbitral award as well as the
spirit of the co-operative movement, as contemplated in the C
West Bengal Co-operative Societies Act, 2006, was taken for
a ride by such acts of the petitioners. The resolution taken in
such Annual General Meeting was an iteration of the absence
of will on the part of the petitioners to comply with the award
and the deliberate attempt to carry on with old wine in a new
D
bottle, having the shape of a new-look agreement.
30. As such, it appears that although the impugned order was
a bit on the miserly side as far as reasons are concerned, the
conclusion arrived at in the said order, as to the execution
case being still maintainable in view of non-satisfaction of
the arbitral award, was valid. E

31. As to the judgments cited by the opposite party on the
scope of interference under Article 227 of the Constitution of
India, this Court is of the opinion that the principles laid down
therein are well-settled. Since no patent jurisdictional error
is found in the impugned order, in any event, the said F
judgments need not be gone into in detail.”
32. Thus, from the aforesaid, it appears that what weighed with
the High Court is:
(1) Neither the Act nor the Rules permits the society to ask a
G
third party to develop its building, more particularly when
the party has a commercial interest in the same, and
(2) The members on their own should have undertaken the
commercial activity and that would have been in accordance
with the co-operative spirit.
H
1098 SUPREME COURT REPORTS [2022] 13 S.C.R.

A On both the aforesaid counts, the High Court is not correct. We
shall assign reasons hereinafter as to why we are so saying.
33. We shall now look into few provisions of the Act and the
Rules. Section 28 of the Act 2006 reads thus:
“Section 28. Final authority of Co-operative society.—Subject
B to the provisions of this Act, the final and ultimate authority
of a Co-operative society shall vest in the general body of its
members or its delegates or representatives elected under
Section 29 of this Act and assembled in a general meeting:
Provided that where the by-laws of a Co-operative society
C so provide for representation of self-help group in any meeting
of the general body of the Co-operative society, such self-
help group shall be represented through one of its members
elected in a meeting of the self-help group.”
34. Rule 21 of the Rules 2011 read as under:-
D
“21. Special General Meeting.—
(1) The rules pertaining to Annual General Meeting shall
apply, mutatis mutandis to a Special General Meeting called
under Section 31.
E (2) At a Special General Meeting, no business other than that
specified in the relevant notice shall be considered.”
35. We shall now look into the relevant extract of the resolution
dated 15.01.2006 which reads as under:-
“But it resolved that the contract executed by and between
F the Society and M/s Hi-Rise Apartment Markers Pvt. Ltd.,
including the work order issued by the Society are to be treated
as revoked and cancelled. The Board of Directors is directed
to refund the security deposit to the said company after
deducting necessary penalties and dues in terms of the said
G contract.
The house further resolved that in supersession of all earlier
resolutions of the General Body as well as Board of Directors
in connection with the Administrative Building, the Board of
Directors is hereby authorized to take all further necessary
H action such as erection of hoardings etc. for further
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1099
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

development/ utilization of the said premises for the best A
interest of the Society of its members, except letting out, long
term in nature under tenancy act.”
SEVEN CARDINAL PRINCIPLES OF CO-OPERATIVE
36. In the case of Vipulbhai M. Chaudhary v. Gujarat
Cooperative Milk Marketing Federation Limited, (2015) 8 SCC 1, B
this Court was called upon to answer the following question:
“Whether in the absence of a specific provision on removal
by no confidence in the Act, Rules or even Bye-laws of a
Cooperative Society, the Chairperson/ elected office-bearer
can be removed by a motion of no confidence, is the short but C
complex question.”
37. For the purpose of answering the aforesaid question, this Court
extensively traced the history of the Co-operative Movement in India.
The International Cooperative Alliance Statement on the Cooperative
Identity was adopted in Manchester, United Kingdom on 23.09.1995. D
The ‘Co-operative’ is defined as:
“A cooperative is an autonomous association of persons
united voluntarily to meet their common economic, social, and
cultural needs and aspirations through a jointly-owned and
democratically-controlled enterprise.” E
38. The Statement further provides for the ‘seven co-operative
principles’ as guidelines by which the co-operatives put their values into
practice. Following are the principles:
“1st Principle:
F
Voluntary and Open Membership.— Cooperatives are
voluntary organizations, open to all persons able to use their
services and willing to accept the responsibilities of
membership, without gender, social, racial, political or
religious discrimination.
G
2nd Principle:
Democratic Member Control.—Cooperatives are
democratic organizations controlled by their members, who
actively participate in setting their policies and making
decisions. Men and women serving as elected representatives H
1100 SUPREME COURT REPORTS [2022] 13 S.C.R.

A are accountable to the membership. In primary cooperatives
members have equal voting rights (one member, one vote) and
co-operatives at other levels are also organized in a democratic
manner.
3rd Principle:
B Member Economic Participation.—Members contribute
equitably to, and democratically control, the capital of their
cooperative. At least part of that capital is usually the common
property of the cooperative. Members usually receive limited
compensation, if any, on capital subscribed as a condition of
C membership. Members allocate surpluses for any or all of
the following purposes: developing their cooperative, possibly
by setting up reserves, part of which at least would be
indivisible; benefiting members in proportion to their
transactions with the cooperative; and supporting other
activities approved by the membership.
D
4th Principle:
Autonomy and Independence.—Cooperatives are
autonomous, self-help organizations controlled by their
members. If they enter to agreements with other organizations,
E including governments, or raise capital from external sources,
they do so on terms that ensure democratic control by their
members and maintain their cooperative autonomy.
5th Principle:
Education, Training and Information.— Cooperatives
F provide education and training for their members, elected
representatives, managers, and employees so they can
contribute effectively to the development of their co-
operatives. They inform the general public - particularly
young people and opinion leaders - about the nature and
benefits of cooperation.
G
6th Principle:
Cooperation among Cooperatives.—Cooperatives serve
their members most effectively and strengthen the co- operative
movement by working together through local, national,
H regional and international structures.
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1101
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

7th Principle: A
Concern for Community.— Cooperatives work for the
sustainable development of their communities through policies
approved by their members.”
[Emphasis supplied]
B
39. The co-operative movement in India started at the beginning
of the 20th century. Though the movements were also based on some of
the values and principles stated above, it appears that the co-operatives
in India did not have effective autonomy, democratic functioning and
professional management. The National Policy on Co-operatives
announced by the Department of Agriculture and Co-operation, Ministry C
of Agriculture, Government of India adopted in March, 2002, is wholly
based on the definition, values and principles stated above. The 97th
Amendment to the Constitution of India, in fact, gave a constitutional
frame to this policy.
40. Apart from providing for the right to form co-operative societies D
to be a fundamental right under Article 19 of the Constitution of India
and insertion of Article 43B under the Directive Principles of State Policy
on promotion of co-operative societies, the amendment also introduced
a new Part IXB on Co-operative Societies. Reference to the Statement
of Objects and Reasons of the amendment would give a clear picture as E
to the need to strengthen the democratic basis and provide for a
constitutional status to the co-operative societies. Thus, one has to see
the constitutional aspirations on the concept of co-operative societies
after the 97th Amendment in the Constitution of India which came into
effect on 12.01.2012:-
F
“STATEMENT OF OBJECTS AND REASONS
1. The co-operative sector, over the years, has made
significant contribution to various sectors of national economy
and has achieved voluminous growth. However, it has shown
weaknesses in safeguarding the interests of the members and
G
fulfilment of objects for which these institutions were
organised. There have been instances where elections have
been postponed indefinitely and nominated office bearers or
administrators remaining in- charge of these institutions for
a long time. This reduces the accountability of the
management of co-operative societies to their members. H
1102 SUPREME COURT REPORTS [2022] 13 S.C.R.

A Inadequate professionalism in management in many of the
co- operative institutions has led to poor services and low
productivity. Co- operatives need to run on well established
democratic principles and elections held on time and in a
free and fair manner. Therefore, there is a need to initiate
fundamental reforms to revitalize these institutions in order
B
to ensure their contribution in the economic development of
the country and to serve the interests of members and public
at large and also to ensure their autonomy, democratic
functioning and professional management.
2. The “co-operative societies” is a subject enumerated in
C
Entry 32 of the State List of the Seventh Schedule of the
Constitution and the State Legislatures have accordingly
enacted legislations on co-operative societies. Within the
framework of State Acts, growth of co-operatives on large
scale was envisaged as part of the efforts for securing social
D and economic justice and equitable distribution of the fruits
of development. It has, however, been experienced that in
spite of considerable expansion of co-operatives, their
performance in qualitative terms has not been up to the desired
level. Considering the need for reforms in the Co-operative
Societies Acts of the States, consultations with the State
E
Governments have been held at several occasions and in the
conferences of State Co-operative Ministers. A strong need
has been felt for amending the Constitution so as to keep the
co-operatives free from unnecessary outside interferences and
also to ensure their autonomous organisational set up and
F their democratic functioning.
3. The Central Government is committed to ensure that the
co-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 to
G incorporate a new Part in the Constitution so as to provide
for certain provisions covering the vital aspects of working
of co- operative societies like democratic, autonomous and
professional functioning. A new article is also proposed to
be inserted in Part IV of the Constitution (Directive Principles
of State Policy) for the States to endeavour to promote
H
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1103
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

voluntary formation, autonomous functioning, democratic A
control and professional management of cooperative societies.
The proposed new Part in the Constitution, inter alia, seeks
to empower the Parliament in respect of multi-State co-
operative societies and the State Legislatures in case of other
co-operative societies to make appropriate law, laying down
B
the following matters, namely:-
(a) provisions for incorporation, regulation and winding
up of co-operative societies based on the principles of
democratic member-control, member- economic
participation and autonomous functioning;
C
(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 of
election in respect of the elected members of the board
and its office bearers;
D
(d) providing for a maximum time limit of six months during
which a board of directors of co-operative society could
be kept under supersession or suspension;
(e) providing for independent professional audit;
(f) providing for right of information to the members of E
the co-operative societies;
(g) empowering the State Governments to obtain periodic
reports of activities and accounts of co-operative societies;
(h) providing for the reservation of one seat for the
Scheduled Castes or the Scheduled Tribes and two seats F
for 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 societies
and penalties in respect of such offences.
4. It is expected that these provisions will not only ensure the G
autonomous and democratic functioning of co-operatives, but
also ensure the accountability of management to the members
and other stakeholders and shall provide for deterrence for
violation of the provisions of the law.
5. The Bill seeks to achieve the above objectives.” H
1104 SUPREME COURT REPORTS [2022] 13 S.C.R.

A 41. By 12.01.2013, all laws on co-operative societies were bound
to be restructured in consonance with the 97th Amendment of the
Constitution of India and, in any case, any provision in the Act or Rules
or bye-laws otherwise inconsistent with the Constitution will be inoperative
thereafter. Articles 43B and 243ZT are mandates to all the States and
the competent authorities to structure co-operative societies as conceived
B
in the Constitution of India, if not already there.
42. The first legislation on the co-operative movement in India
was the Co-operative Credit Societies Act, 1904 and, thereafter, the co-
operative societies emerged in India as State sponsored/promoted
institutions. The main objective was only credit intended to relieve the
C poor agriculturists from the clutches of moneylenders. The first urban
co-operative credit society under the Act of 1904 was registered in
Kanjivaram in erstwhile Madras province. The traits of democracy were
present in the very first legislation through the principle “one man, one
vote”. Since the first legislation was limited to the credit societies, a new
D legislation was introduced 8 years later as “the Co-operative Societies
Act, 1912”. The restriction regarding registration limited to credit societies
was taken away and any society established with the object of promoting
the economic interests of its members in accordance with the co-
operative principles, or a society established with the object of facilitating
the operations of such a society, could be registered.
E
43. Under the Government of India Act of 1919 (Montague
Chelmsford Reforms), co-operation became a provincial subject which
gave a further impetus to the movement. This gave birth to several co-
operative land mortgage banks. The first of its kind was registered in
Punjab. Close to independence and thereafter, we see a radical change
F and increased growth in the co-operative movement. Activities were
spread to all spheres of human endeavour, and thus in 2002, National
Policy on Co-operatives was announced.
44. The co-operative societies having been conferred a
constitutional status by the 97th Amendment, the whole concept of co-
G operatives has undergone a major change. In 1993, the local self-
governments, viz., panchayats and municipalities were also given
constitutional status under Parts IX and IXA of the Constitution of India
by the 73rd and 74th Amendments. The Statement of Objects and Reasons
would show that the Constitution wanted the local bodies to function as
H vibrant democratic units of self-government. After two decades, co-
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1105
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

operative societies were given the constitutional status by including them A
under Part IXB. The main object for the said amendment was also to
ensure “their autonomy, democratic functioning and professional
management”.
45. The National Policy on Co-operatives announced in March
2002 has recognized democracy, equality, equity and solidarity as values B
of co-operatives. Co-operative society has been declared as a democratic
institution. Democratic principles have all through been recognized as
one of the co-operative principles though the constitutional affirmation
of those principles came only in 2012. [Reference : para 39 to para 45
herein —Vipulbhai M. Chaudhary (supra)]
C
45A1. Before we proceed further with the final analysis of the
matter, we need to clarify something important. The decision of this
Court in the case of Vipulbhai M. Chaudhary (supra) has been referred
to by us for a very limited purpose. Vipulbhai M. Chaudhary (supra)
has referred to the 97th Constitution Amendment for the purpose of
answering the main question referred to in para 36 above. It is necessary D
to clarify that the constitutional validity of the 97th Constitution Amendment
was 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 (97th Amendment)
Act, 2011 inserting Part IXB containing the Articles 243ZH to 243ZT as E
ultra vires the Constitution of India for not taking recourse to Article
368(2) of the Constitution which provides for ratification by the majority
of the State Legislatures. The High Court while declaring the amendment
as invalid clarified that the other parts of the Constitution (97 th
Amendment) Act, 2011 would not be affected.
F
45B2. The judgment of the Gujarat High Court referred to above
was 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 view
of the Gujarat High Court to the extent it struck down the entire of Part
IXB of the Constitution. However, the majority view declared that Part
IXB of the Constitution of India would be operative only insofar as it G
concerned the multi-State co-operative societies both within the various
States 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. H
1106 SUPREME COURT REPORTS [2022] 13 S.C.R.

A 45C3. Thus, the Constitution (97th Amendment) Act, 2011 would
not be applicable to the local co-operative societies, whereas the same
would be applicable to the multi-State co-operative societies and the
societies within the Union territories. We only need to clarify that our
judgment is not based on the decision of Vipulbhai M. Chaudhary
(supra) which has now been rendered per incuriam. We referred to
B
Vipulbhai M. Chaudhary (supra) only for the limited purpose of
highlighting the history of the ‘Co-operative Movement’ in India and the
co-operative principles. Our judgment has essentially looked into the
exposition of principles of law expounded by this Court in the cases of
Daman Singh v. State of Punjab, reported in (1985) 2 SCC 670 : AIR
C 1985 SC 973, and State of U.P v. Chheoki Employees Co-operative
Society Ltd., reported in (1997) 3 SCC 681 : AIR 1997 SC 1413, resply.
FINAL ANALYSIS
46. We are of the view that the High Court is not correct in saying
that the Appellant Society could not have entered into an agreement
D with a third party developer as the Act or the Rules do not provide for
the same. It is too much for the High Court to expect that all the members
of the Appellant Society should on their own contribute and undertake
the development of the new administrative building. We enquired with
the learned counsel appearing for the respective parties as regard the
E total cost of the project. We were informed that approximately the cost
would be Rupees Twenty Crore. What is in the mind of the Respondent
No. 1 perhaps is that the members of the Appellant Society should
contribute this amount and undertake the construction rather than involving
a developer and making the entire project a business venture. It is just
next to impossible.
F 47. In the background of the constitutional mandate, the question
is not what the statute does say but what the statute must say. If the
Act or the Rules or the bye-laws do not say what they should say in
terms of the Constitution, it is the duty of the Court to read the
constitutional spirit and concept into the Acts. “In so far as in its Act
G Parliament does not convey its intention clearly, expressly and
completely, it is taken to require the enforcement agencies who are
charged with the duty of applying legislation to spell out the detail
of its legal meaning. This may be done either- (a) by finding and
declaring implications in the words used by the legislator, or (b) by
3
H Paragraph Added in terms of Order dated 18.10.2022 passed in M.A. No. 1798 of 2022.
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1107
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

regarding the breadth or other obscurity of the express language A
as conferring a delegated legislative power to elaborate its meaning
in accordance with public policy (including legal policy) and the
purpose of the legislation”. [See : Bennion on Statutory
Interpretation by Francis Bennion, 6th Edn. 136]
48. The conventional view is that the legislature alone makes the B
law. But as Bennion puts it:-
“The truth is that courts are inescapably possessed of some
degree of legislative power. Enacted legislation lays down
rules in advance. The commands of Parliament are deliberate
prospective commands. The very concept of enacted legislation C
postulates an authoritative interpreter who operates ex post
facto. No such interpreter can avoid legislating in the course
of exercising that function. It can be done by regarding the
breadth or other obscurity of the express language as conferring
a delegated legislative power to elaborate its meaning in
accordance with public policy (including legal policy)”. D
[See : Bennion on Statutory Interpretation by Francis Bennion,
6th Edn. 137]
49. According to Donaldson J.:
“The duty of the courts is to ascertain and give effect to the
E
will of Parliament as expressed in its enactments. In the
performance of this duty the judges do not act as computers
into which are fed the statues and the rules for the construction
of statues and from whom issue forth the mathematically
correct answer. The interpretation of statutes is a craft as
much as a science and the judges, as craftsmen, select and F
apply to the appropriate rules as the tools of their trade. They
are not legislators, but finishers, refiners and polishers of
legislation which comes to them in a state requiring varying
degrees of further processing.”
[See : Corocraft Ltd. v. Pan American Airways Inc., (1969) 1 QB G
616, p. 638 : (1968) 3 WLR 714 at p. 732 : (1968) 2 All ER 1059]
50. In the celebrated case of Seaford Court Estates v. Asher
reported in (1949) 2 KB 481 : (1949) 2 All ER 155 (CA), Lord Denning
has succinctly summarized the principle on the role of the Court. To
quote:- (QB pp. 498-99) H
1108 SUPREME COURT REPORTS [2022] 13 S.C.R.

A “… Whenever a statute comes up for consideration it must be
remembered that it is not within human powers to foresee the
manifold sets of facts which may arise, and, even if it were, it
is not possible to provide for them in terms free from all
ambiguity... A judge cannot simply fold his hands and blame
the draftsman. He must set to work on the constructive task
B
of finding the intention of the Parliament, and he must do this
not only from the language of the statue, but also from a
consideration of the social conditions which gave rise to it
and of the mischief which it was passed to remedy, and then
he must supplement the written word so as to give “force and
C life” to the intention of the legislature. ... Put into homely
metaphor it is this: A judge should ask himself the question
how, if the makers of the Act had themselves come across this
ruck in the texture of it, they would have straightened it out?
He must then do as they would have done. A judge must not
D alter the material of which the Act is woven, but he can and
should 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 the
judgment, has also dealt with the principles in following words:-
E “17. ... The legislature often fails to keep pace with the
changing needs and values nor is it realistic to expect that it
will have provided for all contingencies and eventualities. It
is, therefore, not only necessary but obligatory on the courts
to step in to fill the lacuna. When courts perform this function
undoubtedly they legislate judicially. But that is a kind of
F legislation which stands implicitly delegated to them to further
the object of the legislation and to promote the goals of the
society. Or to put it negatively, to prevent the frustration of
the legislation or perversion of the goals and values of the
society. So long as the courts keep themselves tethered to the
G ethos of the society and do not travel off its course, so long
as they attempt to furnish the felt necessities of the time and
do not refurbish them, their role in this respect has to be
welcomed.”
52. It is not in dispute that the General Body of the Appellant
H Society, which is supreme, has taken up a conscious decision to redevelop
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1109
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

the administrative building. The General Body of the Appellant Society A
has also resolved to appoint the Hi-Rise as the developer. Those decisions
having not been challenged at all, the Respondent No. 1 being a member
of the Appellant Society is bound by the said decisions. The General
Body of the Appellant Society has approved the terms and conditions of
the development agreement by overwhelming majority. Merely because
B
the terms and conditions of the development agreement are not acceptable
to the Respondent No. 1, who could be said to be in minuscule minority
cannot be the basis of not to abide by the decision of the overwhelming
majority of the General Body of the Appellant Society. The redevelopment
of the property is necessitated in view of the fact that the building is in a
dilapidated condition with passage of time. The redevelopment thus, in C
our view, would be a requirement and a necessity and cannot be termed
as business. The Appellant Society in such circumstances did not even
require to carry out any amendment to the bye-laws or to include the
“redevelopment of the buildings” as one of the objects of the Society
before taking any decision to redevelop its property. D
53. By now it is well established position that once a person
becomes a member of the Co-operative Society, he loses his individuality
with the Society and he has no independent rights except those given to
him by the statute and bye-laws. The member has to speak through the
Society or rather the Society alone can act and speaks for him qua the
E
rights and duties of the Society as a body (see : Daman Singh v. State
of Punjab, reported in (1985) 2 SCC 670 : AIR 1985 SC 973). This
view has been followed in the subsequent decision of this Court in the
case 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, this
Court further observed that the member of a Society has no independent F
right qua the Society and it is the Society that is entitled to represent as
the corporate aggregate. This Court also observed that the stream cannot
rise higher than the source. Suffice it to observe that so long as the
Resolutions passed by the General Body of the Appellant Society are in
force and not overturned by a forum of competent jurisdiction, the said
G
decisions would bind the Respondent No. 1. He cannot be permitted to
take a stand alone position but is bound by the majority decision of the
General Body. Notably, the Respondent No. 1 has not challenged the
Resolutions passed by the General Body of the Appellant Society to
redevelop the property and more so, to appoint the Hi-Rise as the
Developer to give him all the redevelopment rights. H
1110 SUPREME COURT REPORTS [2022] 13 S.C.R.

A 54. It was also argued on behalf of the Respondent No. 1 that
the property is in a good condition and there is no need to redevelop
the existing building. In the first place, as noted earlier, the decision of
the General Body of the Society to redevelop the subject property has
not been challenged at all. Besides, no provision in the Co-operative
Societies Act or the rules or any other legal provision has been brought
B
to our notice which would curtail the right of the Society to redevelop
the property when the General Body of the Society intends to do so.
Essentially, that is the commercial wisdom of the General Body of the
Society. It is not open to the Court to sit over the said wisdom of the
General Body as an Appellate Authority. Merely because one single
C member in minority disapproves of the decision, that cannot be the
basis to negate the decision of the General Body, unless it is shown
that the decision was the product of fraud or misrepresentation or was
opposed to some statutory prohibition. That is not the grievance made
before us. In the present case, the General Body took a conscious
D decision after due deliberations for many years to redevelop its property.
Even 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 Society
after examining the relative merits of the proposals received from the
developers.
55. The object of the provision has to be borne in mind. The
E
entire legislative scheme goes to show that the Co-operative Society
is 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.
F It is a form of voluntary association where individuals unite for mutual
aid in the production and distribution of wealth upon principles of equity,
reason and common good. It stands for distributive justice and asserts
the principle of equality and equity ensuring to all those engaged in the
production of wealth a share proportionately commensurate with the
G degree of their contribution. It provides as a substitute for material
assets, honesty and a sense of moral obligation and keeps in view the
moral rather than the material sanction. The movement is thus a great
Co-operative movement.
56. The basic principles of co-operation are that the members join
as human beings and not as capitalists. The Co-operative Society is a
H
THE BENGAL SECRETARIAT COOPERATIVE LAND MORTGAGE BANK 1111
AND HOUSING SOC. LTD. v. SRI ALOKE KUMAR [J. B. PARDIWALA, J.]

form of organization wherein persons associate together as human beings A
on the basis of equality for promotion of economic interest of its members.
This movement is a method of doing the business or other activities with
ethical base. “Each for all and all for each” is the motto of the co-
operative movement. This movement not only develops latent business
capacities of its members but produces leaders; encourages economic
B
and social virtues, honesty and loyalty, becomes imperative, prospects
of better life, obtainable by concerted effort is opened up; the individual
realises that there is something more to be sought than mere material
gains for himself. So, in fact, it being a business cum moral movement,
and the success of the Co-operative Society depends upon the reality
with which one of the members work for the achievement of its objects C
and purpose. The Committee on Co-operation in India emphasized the
moral aspect of co-operation, to quote the words:-
“The theory of co-operation is very briefly that an isolated
and powerless individual can, by association, with others and
by moral development support, obtain in his own degree the D
material advantages available to wealthy or powerful persons
and thereby develop himself to the fullest extent of his natural
abilities. By the Union of forces, material advancement is
secured and by united action self reliance is fostered and it
from the inter-action of these influences that it is hoped to
E
attain the effective realisation of the higher and more
prosperous standard of life which has been characterised as
better business, better arming and better living; we have found
that there is a tendency not only among the outside public but
also among supporters of the movement to be little its moral
aspect and to regard this as superfluous idealism. Cooperation F
in actual practice must often fall short of the standard aimed
at and details inconsistent with co- operative ideals have often
to be accepted in the hope that they may lead to better things.
We wish clearly to express that it is the true co-operation
alone, that is, to a co-operation which recognises the moral
G
accept of the question that Government must look for the
amelioration of the masses and not to a psudo co-operative
edifice, however imposing, which is built in ignorance of co-
operative principles. The movement is essentially a moral one
and it is individualistic rather than socialistic. It provides as
a substitute for material assets honesty and a sense of moral H
1112 SUPREME COURT REPORTS [2022] 13 S.C.R.

A obligation and keeps in view the moral rather than the material
sanction. 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 applied
as the solution of many economic problems. Co-operation is
harnessed to almost all forms of economic activity. Though
B
co-operation was introduced in this country as a remedy for
rural indebtedness, it has been applied successfully in a wide
range of activities such as production, distribution, banking,
supply, marketing, housing and insurance. See Theory and
Practice of Co-operation in India and Abroad by Kulkarni
C Volume 1 Page 2.”
57. In the overall view of the matter, we are convinced that the
impugned judgment and order passed by the High Court is not sustainable
in law and deserves to be set aside. At one point of time, we were
inclined to allow this appeal by imposing an exemplary costs on the
D Respondent No. 1 for unnecessarily dragging the Appellant Society into
a frivolous litigation & not allowing the Appellant Society to go ahead
with the project for the past almost two decades. However, we refrain
from passing such order of costs in the hope that the Respondent No. 1
realises that the development of the administrative building will be for
the betterment of the society. No individual member is going to gain
E anything from the redevelopment. It is the society as an autonomous
body which will gain something.
58. For the foregoing reasons, this appeal succeeds and is hereby
allowed. The impugned judgment and order passed by the High Court is
hereby set aside and it shall now be open to the Appellant Society to
F proceed further with its project of redevelopment in accordance with
the resolutions passed by the General Body from time to time. It is
needless to clarify that the first priority should be given to demolish the
entire building as the same is in a dilapidated condition.
59. There shall be no order as to costs.
G 60. Pending application, if any, also stands disposed of accordingly.

Nidhi Jain Appeal allowed.
(Assisted by : Shashwat Jain, LCRA)

H