Mr.Santosh Agarwal & Anr. vs Registrar Of Cooperative Societies, Govt Of Nct Of New Delhi & Anr.

Court
Delhi High Court

$~52
* IN THE HIGH COURT OF DELHI AT NEW DELHI
# CNR No. DLHC010533672026
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DATE OF DECISION: 4 November, 2026
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UPLOADED ON: 10 November, 2026

+ W.P.(C) 16392/2026 and CM APPL. 76919/2026
MR.SANTOSH AGARWAL & ANR. .....Petitioners
Through: Mr. Sandeep Bhuraria, Adv. with Ms.
Vatsala Pandey Adv.
versus

REGISTRAR OF COOPERATIVE SOCIETIES, GOVT OF NCT OF
NEW DELHI & ANR. .....Respondents
Through: Mr. Shashi Pratap Singh, Advocate for
RCS.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE DINESH BHATT
JUDGMENT
Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.
2. The present petition has been filed by two Petitioners-Mr. Santosh
Agarwal and Mrs. Sarita Agarwal under Article 226 of the Constitution of
India challenging the termination of their membership by the Respondent
No.2 i.e. , Vasundhara Apartment Cooperative Group Housing Society
(hereinafter ‘ Society ’).
3. The case of the Petitioners is that the Flat No. A-407 was initially
allotted to one Mr. Balvinder Mohan Khullar, who had membership No. 349
of the Society.
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4. The said member had mortgaged the flat in favour of State Bank of
Indore in respect of a loan which was advanced by the bank to an entity which
was being run by Mr. Balvinder Mohan Khullar.
5. Due to non-payment of the loan, SARFAESI proceedings were initiated
and the State Bank of Indore had published a sale notice. Pursuant to the sale
which was made by the said Bank, the Petitioners had purchased the said
property, in the sale process.
6. The Petitioners had then filed before the Delhi Development Authority
(hereinafter ‘ DDA ’) an application bearing No.133009, File
No.F.9(3984)10/GH/DDA for conversion of the flat from leasehold to
freehold. W.P. No. 5842/2015 is stated to be pending before this Court in
respect thereof.
7. The Petitioners sought transfer of the membership of the Society, in
their favour.
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8. The Membership was transferred but thereafter it was cancelled on 28
May 2024.
9. The same was challenged by the Petitioners by way of a civil suit which
was disposed of holding that the civil court lacked jurisdiction.
10. Representations were thereafter given by the Petitioners to the
Registrar of Cooperative Societies (hereinafter ‘ RCS ’) to look into the
cancellation of the membership of the Petitioners under Section 86 of the
Delhi Co-operative Societies Act, 2003 (hereinafter ‘ the Act’ ).
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11. The said representations dated 28 April 2025 and the follow up thereof
is placed on record.
12. The prayer in this petition is as under:-
“A) Issue a writ of mandamus or any other appropriate
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writ, order or direction in the nature of mandamus,
directing the Respondent No.1 to decide the
representation dated 28.04.2025 submitted by the
Petitioners, challenging the cancellation of their
membership vide notice dated 28.05.2024 issued by
Respondent No.2/Society, in accordance with the
provisions of the Delhi Co-operative Societies act,
2003; Or
B) Quash the Cancellation Notice dated May 28, 2024
issued on behalf of the Respondent No.2/Society against
the Petitioners as being arbitrary, illegal and contrary
to the provisions of law and principles of natural
justice.”

13. Mr. Sandeep Bhuraria, ld. Counsel for the Petitioner submits that
though the representations have been given way back in April 2025, the RCS
has not taken any action in this regard.
14. Ld. Counsel for the RCS is present and Mr. Shashi Pratap Singh, ld.
Counsel accepts notice for the RCS.
15. Heard. Expulsion or termination of membership is provided for in
Section 86 of the Act and Rule 99 of the Delhi Co-Operative Societies Rules,
2007. The said provisions read as under:
“Expulsion of a member.
86. (1) Notwithstanding anything contained in this Act
and the rules framed thereunder, the committee of a co-
operative housing society may, by a resolution, expel a
member on any one or more of the following grounds,
namely –

(a) if he has been a persistent defaulter in respect of any
dues of the co-operative housing society; or

(b) if he has willfully deceived the co-operative housing
society by making any false statement or submitting any
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false document to obtain the membership of such co-
operative society; or

(c) if he has brought disrepute to the co-operative
society or has done any other act detrimental to the
interest and proper working of the co-operative society:

Provided that no such resolution shall be passed unless
the member concerned has been given an opportunity of
being heard after service of three registered notices
confronting the member with the grounds for his
proposed expulsion:

Provided further that no member shall be expelled
unless a resolution to that effect is passed by not less
than three-fourths of the members of the committee
present and entitled to vote at the meeting and no
resolution for expulsion shall be valid unless approved
by the Registrar.

(2) After the resolution for expulsion is passed as above
by the committee, the resolution shall be referred to the
Registrar for approval within a period of thirty days.

(3) On the receipt of the resolution for expulsion, the
Registrar shall take cognizance of such resolution
within thirty days and pass a final order either
approving the expulsion or rejecting the proposal for
expulsion within a period of one hundred and eighty
days and if the matter is not decided by the Registrar
within the aforesaid period, the expulsion of such a
member shall be deemed to have been approved :

Provided that the Registrar, before approving the
resolution, shall hear the parties concerned in the
manner prescribed and shall have power to summon
and enforce attendance of witnesses including the
parties interested or any of them and compel them to
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give evidence on oath, affirmation or affidavit and to
compel production of documents by the same means and
as far as possible in the same manner as provided in the
case of a civil court under the Code of Civil Procedure,
1908 (5 of 1908) and the order under this section so
passed by the Registrar, shall be final with a right for
appeal before the Tribunal.

(4) Any party aggrieved by the order of the Registrar or
deemed approval of expulsion, as the case may be,
under sub-section (3) may, within sixty days from the
date of such order, appeal to the Tribunal.”

“99. Expulsion of a member

(1) The cooperative housing society may in accordance
with the provisions of sub-section (1) of Section 86,
expel a member. However, before passing a resolution
for expulsion of the member, the committee shall have
to deliberate the case of expulsion in the committee's
meeting and shall have to approve the proposal for issue
of notice for the expulsion of a member setting out
therein full details of the grounds with supporting
documents In all at least three registered notices shall
be served on the concerned member with an opportunity
to defend his case in writing and also in person to the
committee. Each notice should be served on the
concerned member with an interval of thirty days. After
the expiry of thirty days period of the final notice, the
committee shall consider the reply, if any, received from
the concerned member in its meeting and three-fourths
of the members of the committee present and entitled to
vote at the meeting, shall approve the proposal for
expulsion and pass a resolution.

(2) Subject to the provision 86 of the Act a co-operative
housing society, which has been allotted land, before
expelling a member shall give final opportunity by
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publishing the notice in the leading Hindi and English
newspaper in the National Capital Territory of Delhi
informing the affected member to be present in person
or through the authorized representative before the
Registrar on the date fixed for the final hearing.

(3) The Registrar shall decide the expulsion case within
the period of one hundred eighty days from the date of
the receipt of the resolution for expulsion of a member
from the cooperative housing society and shall convey
his decision in writing to such member. If the resolution
of the co-operative housing society for expulsion of a
member is not approved by the Registrar within the said
period of one hundred eighty days, the resolution for
expulsion of the member shall be deemed to have been
approved and the committee shall convey this decision
of expelled member and the Registrar within a period of
thirty days after the expiry of one hundred eighty days
time limit through the registered Post. If the approval of
the deemed expulsion is not conveyed to the members
and the Registrar within the above period of thirty days,
thereafter, the resolution of expulsion shall be null and
void.

(4) Aggrieved member shall have the right to file an
appeal to the Tribunal within sixty days from the date of
order of the Registrar or intimation of deemed
expulsion.”

16. In terms of Rule 99 of the DCS Rules, the Managing Committee of the
Society ought to first deliberate and approve issuing notice stating full
grounds with supporting documents, and then serve at least three registered
notices on the member, each at thirty-day intervals, affording him an
opportunity to defend himself in writing and in person. Only after the thirty-
day period following the final notice has expired, and after considering the
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member’s reply, if any, can the committee proceed to expel him.
17. In terms of Section 86 of the Act, any expulsion can be effected only
after the concerned member has been given an opportunity of being heard.
The resolution of expulsion passed by the Managing Committee of the party
has to be referred to the Registrar and thereafter the Registrar can pass a final
order either expelling or rejecting the proposal for expulsion.
18. The RCS has to also hear the party's concern before passing the said
final order. Any order passed by the RCS is also appealable before the Delhi
Co-operative Tribunal.
19. In Delhi EPDP Coop. Group Housing Society Ltd. v. Registrar Coop.
Societies, 2015 SCC OnLine Del 10050 , while dealing with the interpretation
of Section 86 of the Act, a Coordinate Bench of this Court had opined as
under:
“11. To be a member of any Group Housing Society is a
valuable right of such a member and this valuable right
cannot be taken away without strict adherence to the
procedure prescribed under the Act and Rules framed
therein. Prior to the enactment of the Delhi Cooperative
societies Act, 2003 the procedure for expulsion of a
member was provided under Rule 36 of the Delhi
Cooperative societies Rules, 1973. There was no
deeming clause either in the statute or under the rules
prior to the enactment of the Act. The present Act and
Rules provide for “deemed expulsion” under Section
86(3) and Rule 99(3), respectively. Now dealing with
Rule 36 of the Delhi Cooperative societies Rules, 1973,
the Division Bench of this Court in the case of R.K.
Aggarwal v. Registrar Cooperative societies, Delhi in
LPA No. 97/1983 decided on 29-7-1991, took a view
that Rule 36 has to be strictly complied with and
adhered to by a cooperative society before it chooses to
expel a member. It further held that Rule 36 is not
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Directory and it is incumbent upon the society to follow
the letter of law and to meticulously comply with the
provisions of Rule 36 of the Delhi Cooperative societies
Rules, 1973. The relevant paras of the said judgment are
reproduced as under:
“By removing the name of a person from the
membership, a valuable right is taken away from him.
Moreover, the consequences of expelling a member are
serious as is evident from perusal of sub-rule (5) of Rule
36, which provides that when a member is expelled, he
cannot be re-admitted to the membership of that Society,
at any point of time and nor can he become a member of
any other society of the same class for a period of three
years from the date of such expulsion. Grave
consequences, therefore, ensue when a member is
expelled.
Under these circumstances, Rule 36 has to be strictly
complied with and adhered to by a cooperative society
before it chooses to expel a member. We are not in
agreement with the learned counsel for the respondents
that Rule 36 is Directory. In our opinion, it is incumbent
upon the Society to follow the letter of law and to comply
meticulously with the provisions of rule 36. This
admittedly has not been done in the present case. Even
if it be assumed though it is denied by the appellant that
show cause notices dated 10-8-1974 were served on the
appellant, the infirmity is not cured. The notice was
required to be of not less than 30 days before but not
such notice was given. The learned Single Judge did not
advert to this requirement of Rule 36 and has merely
proceeded to decide the question as to whether the
notice dated 10-8-1974 was served on the appellant or
not. Having come to the conclusion that the notice dated
10-8-1974 was served on the appellant, the learned
Single Judge should have then proceeded to decide
whether such service fulfilled the requirement of Rule 36
or not. In our opinion, the laudatory requirement of 30
days as provided by Rule 36(2) was not fulfilled.
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Therefore, the action taken by the respondent society
was non est.”
12. It cannot be disputed that in every society the
defaulter member puts the society to ransom, because, it
is due to the default of such members that the entire
project is delayed at the cost of others who regularly pay
their share as per the demand raised. However, it is
equally true that neither the society, nor the Registrar
Cooperative societies can arbitrarily expel any member
of the society without strictly following and adhering to
the procedure laid down under Section 86 of the said Act
and Rule 99 of the said Rules.
13. In Jai Kishan Khanna since deceased through LR
Rajeev Khanna v. Shantnu Appt. Coop Group Housing
Society Registration No. 1111, W.P. (C) 2900/2014,
decided on 22-5-2014, a Division Bench of this Court
while dealing with these provisions, held that Sub-
section (3) of Section 86 of the Act stipulates that on the
receipt of the resolution for expulsion, the Registrar
shall take cognizance of the said resolution within 30
days and pass a final order either approving or rejecting
the proposal for expulsion within a period of 180 days.
The Court also took the period of 180 from the date of
issuance of the letter sent by the society seeking
Explanation of a member and to count 180 days period
from the said date. Relevant para of the said judgment
is reproduced as under:
“Sub-Section (3) of Section 86 stipulates that on the
receipt of the resolution for expulsion, the Registrar
shall take cognizance of the said resolution within 30
days and pass a final order either approving the
expulsion or rejecting the proposal for expulsion within
a period of 180 days. The said provision further
stipulates that if the matter is not decided by the
Registrar within the aforesaid period, the expulsion of
such a member shall be deemed to have been approved.
The period of 180 days from the issuance of the letter
dated 19-8-2013 expired on 15-2-2014 and immediately
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thereafter, on 28-2-2014, the petitioner filed the appeal
under Section 86(4) read with Section 112 of the said
Act. Sub-Section (4) of Section 86 clearly entitles any
party aggrieved by the order of the Registrar or
“deemed approval” of expulsion, as the case may, to file
an appeal within 60 days from the date of such order.
The starting point of limitation of the deemed approval
of expulsion would have to be reckoned from the date on
which the period of 180 days expired. In the present
case, the said period expired on 15-2-2014.”

20. It becomes clear from a reading of the above decision that the right to
membership of a group housing society cannot be taken away without strict
compliance with Section 86 of the Act and Rule 99 of the DCS Rules, 2007,
the procedure being mandatory in nature. RCS is bound to consider the
representation of the member of the society and decide the expulsion of the
said member of the society.
21. In the present case, the Petitioners’ membership has been cancelled by
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the Society vide the cancellation notice dated 28 May, 2024 on the ground
that the documents by which the property has been purchased are not
registered documents.
22. The case of the Petitioners is that there is a Sale Certificate issued by
the Bank in favour of the Petitioners and thus, the same constitutes a proper
title deed in favour of the Petitioners for the purposes of grant of membership
to the Petitioners.
23. The cancellation notice is accordingly challenged by the Petitioners.
24. In the opinion of this Court, whenever properties of this nature are
mortgaged and Banks have conducted the auction of the mortgaged properties
under the SARFAESI laws, the said sales are within the four corners of law.
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In fact a Sale Certificate ought to be given credence just like other registered
sale documents, as the same establishes sale conducted by a Bank or financial
institution. This fact was to be borne in mind by the Managing Committee of
the Society.
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25. However, unfortunately, the cancellation notice dated 28 May, 2024
issued by the Society, merely states that the membership deserves to be
cancelled because the documents filed by the Petitioners are not registered.
Further the Petitioner was not afforded an opportunity defend himself in
writing or in-person in terms of Rule 99 of the DCS Rules, 2007.
26. This matter deserves to be looked into by the Registrar.
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27. The RCS ought to take into consideration the Sale Certificate dated 12
March 2010 issued by the State Bank of Indore in favour of the Petitioners.
28. Accordingly, the RCS is directed to consider the representation of the
Petitioners and after hearing the Petitioners and the Society, RCS shall take a
decision in this matter either confirming the expulsion or rejecting the
expulsion in accordance with law.
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29. The decision shall be taken by RCS by 25 December, 2026.
30. All rights and remedies of the Petitioners are left open.
31. Accordingly the petition is disposed of, alongwith all pending
applications, if any.


PRATHIBA M. SINGH
JUDGE



DINESH BHATT
JUDGE
NOVEMBER 4, 2026/MR/as
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