DELHI DEVELOPMENT AUTHORITY vs. HUMAN CARE MEDICAL CHARITABLE TRUST

Case Type: Letters Patent Appeal

Date of Judgment: 02-02-2016

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Full Judgment Text

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on : January 07, 2016
% Judgment Delivered on : February 02, 2016
+ LPA 528/2012
DELHI DEVELOPMENT AUTHORITY ..... Appellant
Represented by: Mr.Sanjay Poddar, Sr.Advocate
instructed by Ms.Shobhana Takiar,
Mr.Govind Kumar and Ms.Pavi
Poddar, Advocates

versus

HUMAN CARE MEDICAL CHARITABLE TRUST .....Respondent
Represented by: Mr.Rajiv Nayar, Sr.Advocate
instructed by Mr.Rajesh Yadav and
Mr.Neeraj Yadav, Advocates


CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA

PRADEEP NANDRAJOG, J.

1. The brief factual matrix required to be noted for adjudication of
present appeal is that Human Care Medical Charitable Trust (hereinafter
referred to as the ‘Society’) is a Society registered under the Societies
Registration Act, 1860.
2. On June 11, 1996, a perpetual lease-deed was executed by the DDA in
favour of society. By and under the said perpetual lease-deed, a plot of land
ad-measuring 0.955 Hectares at Sector-6, Dwarka was demised in favour of
the society with effect from April 23, 1996. Terms of the lease-deed
required the society to construct a hospital on the land after obtaining
LPA No528/2012 Page 1 of 18


sanction from the municipal authorities within a period of two years from
April 23, 1996.
3. Being relevant, it would be apposite to note following clauses in the
lease-deed dated June 11, 1996:-
“II. The Lessee for himself, successor and assignees
covenants with the Lessor in the manner following that is
to say;

(4) The Lessee, shall within a period of two years from
rd
23 day of April one thousand nine hundred and Ninety
Six (and the time so specified shall be of essence of the
contract) after obtaining sanction to the building plan,
with necessary designs, plans and specifica-land and
complete in a substantial and workmanlike manner a
building for Hospital with the requisite and proper walls,
sewers and drain and other conveniences in accordance
with the sanctioned building plan and to the satisfaction of
such municipal or other authorities.

(5) (a) The Lessee shall not sell, transfer, assign or
otherwise part with possession of the whole or any part of
the said land or any building thereon except with the
previous consent in writing of the Lessor which he shall be
entitled to refuse in his absolute discretion.

PROVIDED that such consent shall not be given for a
period of ten years from the commencement of this Lease
unless, in the opinion of the Lessor, exceptional
circumstances exist for grant of such consent.

PROVIDED FURTHER that, in the event of the consent
being given the Lessor may impose such terms and
conditions as he thinks fit and the Lessor shall be entitled
to claim and recover the whole or a portion (as the Lessor
may in his absolute discretion determine) of the unearned
increase in the value (i.e. difference between the premium
LPA No528/2012 Page 2 of 18


paid and market value) of the said land at the time of sale,
transfer, assignment or parting with the possession and the
decision of the Lessor in respect of the market value, shall
be final and binding.

PROVIDED FURTHER that the Lessor shall have the pre-
emptive right to purchase the property after deducting
such percentage as decided by the Lessor of unearned
increase as afore-said.

(13) The Lessee shall not without the written consent of
the Lessor carry on, or permit to be carried on, on the said
land or in any building thereon any trade or business or
whatsoever or use the same or permit the same to be used
for any purpose other than that of Hospital or do or suffer
to be done therein any act, or thing whatsoever which in
the opinion of the Lessor may be nuisance, annoyance or
disturbance to the .Lessor and persons living in
neighbourhood.

PROVIDED that if the Lessee is desirous of using the said
land or the building thereon for a purpose other than that
of Hospital the Lessor may allow change of user on such
terms and conditions including payment of additional
premium and additional yearly rent as the Lessor may in
his absolute discretion determine.”

4. Significantly, the Governing Body of the Society, comprised of
undernoted persons/members at the time when the lease-deed dated June 11,
1996 was executed:-
(i) Mr.Naresh Chandra …. President
(ii) Dr.Ravi Shankar Garg …. Vice-President

(iii) Ms.Shashi Singhal …. Treasurer
(iv) Mr.Manoj Aggarwal …. General Secretary
(v) Mr.Tarun Jain …. Secretary
(vi) Mr.Rajeshwar Dayal …. Member
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(vii) Ms.Pushpa Gautam …. Member

5. The society could not construct the hospital within the stipulated
period i.e. within two years from April 23, 1996. From time to time DDA
kept on granting extension(s) to the society to construct the hospital. (We
need not bother ourselves with this aspect of the matter inasmuch as
construction of hospital on the land in question is not an issue in the present
appeal).
6. On April 09, 2009, DDA issued a notice to the society to show cause
as to why the lease-deed dated June 11, 1996 be not cancelled alleging
breach of a condition of the lease, in that, (office-bearers) of society having
sold the demise land to a third party in a clandestine manner in order to earn
profit out of a concessional allotment obtained in the name of the society.
(We may note here that DDA also sought to determine the lease on the
ground of non-construction of hospital by the society within the prescribed
period. However we may not burden ourselves with this aspect of matter
inasmuch as the appellant DDA has not challenged the findings returned by
the learned Single Judge on the aspect of non-construction of the hospital in
the instant appeal).
7. Being relevant, we note the following portion of the show cause
notice dated April 09, 2009 issued by DDA:-
“AND WHEREAS as per clause 5 (a) of lease deed the
Lessee shall not sell, transfer, assign or otherwise part
with the possession of the whole or any part of the said
land or any building thereon except with the previous
consent in writing of the lessor which he shall be entitled
to refuse in his absolute discretion.

AND WHEREAS a complaint has been received regarding
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sale of the allotted land. After examine the documents
submitted by the complainant and yourself, it has been
established that it is a clear case of sale of DDA‟s property
in a clandestine manner to earn profit out of concessional
allotment obtained in name of trust and is being circulated
in the market as saleable property.

Now you are hereby asked to Show Cause as to why the
allotment/lease deed of allotted plot be not cancelled for
sale of DDA‟s Property without the prior permission of the
Lessor. Please note that if a satisfactory reply is not
received within 15 days from the date of issue of this
Show Cause Notice, it will be presumed that the Society
has nothing to say in the matter and action as deemed fit,
including cancellation will be initiated.”

8. In its reply the society stated as follows:-
a) In the year 2001 Mr.Naresh Chandra, the then President of society,
met one Sh.Sanjay Khurana who was a Non-Resident Indian (NRI) and
some others NRIs and requested them to invest money in the society to
enable it to construct a hospital because the society was facing a financial
crunch.
b) Mr.Sanjay Khurana and other Non-Resident Indians agreed to lend
money to the society and gradually the said persons became members of the
society and thereafter lent money to the society to enable it to construct the
hospital.
c) In the year 2004 the said persons (NRIs) returned from the United
States of America and learnt that Mr.Naresh Chandra and his associates had
misused the funds of the society meant for constructing a hospital and
therefore Mr.Sanjay Khurana made a complaint to the police resulting in
registration of FIR No.367/2005 for offences punishable under Sections
LPA No528/2012 Page 5 of 18


341/420/409/506 IPC at PS Dwarka against Naresh Chandra and his
associates.
d) In the year 2002 most of the members holding various posts in the
Governing Body of society at the time of execution of the lease-deed dated
June 11, 1996 resigned from the posts held by them and new members were
elected/appointed on said posts in their place. As on February 10, 2005
Governing Body of the society consisted of following persons/members:-
i) Dr.Nirmal Kumar …. President
ii) Ms.Archana Khurana …. Vice-President
iii) Mr.Rakesh Passi …. General Secretary
iv) Dr.Ish Kumar …. Treasurer
v) Mr.Naresh Chandra …. Member
vi) Ms.Shashi Singhal …. Member
vii) Mr.Sanjay Khurana …. Member

e) Investigations conducted into the affairs of the society revealed that
Mr.Naresh Chandra was misusing the funds of the society by transferring
the same i.e. funds in the bank accounts of his family members.
Investigations further revealed that in the year 2003-2004 Mr.Naresh
Chandra was entrusted with a loan of a sum of ` 10.3 crores for construction
of hospital but he i.e. Naresh Chandra misappropriated said loan by various
means.
f) In the year 2007 a settlement was arrived between Mr.Naresh
Chandra and his associates on one hand and (new) members of Governing
Body of society whereby Naresh Chandra and his associates agreed to have
no connection with society or its properties as also to return all documents
relating to society lying in their possession. On the basis of aforesaid
settlement, FIR registered against Naresh Chandra and his associates was
LPA No528/2012 Page 6 of 18


quashed by a learned Single Judge of this Court vide order dated April 20,
2007 passed in Crl.M.C.No.1192/2007. Thereafter Mr.Naresh Chandra and
Ms.Shashi Singhal also ceased to be the members of the society.
g) The aforesaid circumstances, particularly the fraud played by
Mr.Naresh Chandra, necessitated the change in membership of Governing
Body of society, which changes were made in accordance with law and have
been duly reflected in the records maintained by society. No sale of land in
question has been made by society and/or any of its office-bearers.
9. The reply furnished by society did not cut ice with DDA and vide
order dated June 02, 2009, DDA cancelled the allotment of land in favour of
the society, the relevant portion whereof reads as under:-
“WHEREAS by virtue of allotment letter dated 15.5.96 and
lease deed executed on 11.6.96 you were the lessee of the
plot allotted at Sector-6, Dwarka of land measuring 9950
Sq. M and were required to use the plot and building
constructed thereon exclusively for Hospital.

AND WHEREAS as per clause 5(a) of the lease deed the
lessee shall not sell, transfer, assign or otherwise part with
possession of the whole or any part of the said land or any
building thereon except with the previous consent in
writing of the Lessor which he shall be entitled to refuse in
his absolute discretion.

AND WHEREAS it has been seen from the documents
submitted by you and Sh. Sanjay Khurana it is clear case
of sale of the Institutional Property allotted on
concessional rates in the utter violation of the terms of
allotment. The sale of DDA property in a clandestine
manner is to earn profit. It has also been seen that all the
original members have been replaced by new set of
members, which is clear case of change of hands.

LPA No528/2012 Page 7 of 18


AND WHEREAS the reply submitted by you from time to
time were not found satisfactory.

Now, therefore, in view of the gross violation of terms and
conditions of allotment and lease deed, the Competent
Authority has cancelled the allotment on account of sale of
the Institutional Property allotted on concessional rate in
the utter violation of the terms of allotment.”

10. In these circumstances, the society filed a writ petition under Article
226 of Constitution of India in this Court assailing the legality of the order
dated June 02, 2009 passed by DDA cancelling the allotment of the land in
favour of society, inter-alia, reiterating the averments/submissions made by
the society in its reply to the show cause notice, contents whereof we have
summarized in the preceding paragraph.
11. In the counter affidavit filed, DDA firstly highlighted the facts stated
by the society in its reply to the show cause notice, particularly the facts
relating to the change in the constitution of the Governing Body of the
society. In addition thereto, DDA highlighted that Naresh Chandra, the
erstwhile President of the society, had stated in a letter dated December 23,
2008 written by him to DDA that Mr.Sanjay Khurana had issued a cheque in
sum of 2,34,67,290/- in favour of the society towards construction of the
`
hospital on the land and an agreement was executed between the society and
M/s.Nidhi Builders for construction of the hospital soon after receipt of
money by the society from Mr.Sanjay Khurana.
12. After highlighting aforesaid facts, DDA justified its action of
cancelling allotment of land in favour of society in its counter affidavit in
the following manner:-
“11. That the above referred factual submission clearly
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indicated the transactions made by the trust members
regarding the land in question allotted at concessional
rates for the construction of hospital to Human Care
Medical Charitable Trust with Sh. Naresh Chandra as its
President. It is also revealed that NRIs were allowed to
enter into the affairs of the Trust by accepting a huge sum
of ` 2,34,67,290/-, which is not a mean amount by any
stretch of imagination. Sh. Naresh Chandra has himself
accepted having received this amount. This clearly
indicates that the property had changed hands in a
clandestine and surreptitious manner, in total breach of
contract, violation of allotment terms and conditions laid
down in the lease deed. It is also noted that under the garb
of philanthropy, a business deals appears to have been
struck.

12. That in the light of versions of founder president of
the Hospital and present President, the respondent DDA
came to the conclusion that it was a case of change of
hands of monetary considerations, in a collusive manner to
get over the proper permission of the DDA. The version of
founder president clearly shows acceptance of money by
cheques for a sum of above two crores, though the same
has been explained has philanthropic donation for help.
The version of present president speaks of
misappropriation of loan or funds by M/s Nidhi Builders in
the capacity of construction contractor, after their
resignation as members. The capacity of
contractor/builder is subsequent to monetary
considerations passed in 2002, though construction
agreement came in 2003.

13. That in the facts and circumstances of this case, no
other view is possible, it being a clear case of sale of DDA
property in clandestine manner to earn profits out of
concessional allotment obtained in the name of trust by
private family members. After over a decade, the Hospital
is nowhere, and is being circulated in the market as a
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saleable property.

14. That in view of the above facts after detailed
deliberations and after examining the case in detail the
respondent DDA cancelled the allotment and determined
the lease deed on 21.5.2009 under the orders of Hon‟ble
Lt. Governor. The cancellation was conveyed to the
founder President Sh. Naresh Chandra on 02.6.09.”
(Emphasis Supplied)

13. In the rejoinder filed, the society reiterated the averments/submissions
made by it in the reply to the show cause notice as also in the writ petition
filed by it. In addition thereto, following averments were made by the
society in its rejoinder:-
a) On February 15, 1995 the society deposited a sum of ` 1,23,63,875/-
with DDA after taking loan from Nidhi Builders. Thereafter the society
further paid sums of ` 8,18,121/- and ` 15,900/- to DDA again after taking
loan from Nidhi Builders. Additionally, the society had taken loans from
Nidhi Builders, HUDCO and others from time to time to make payments to
DDA as also to meet other expenses of the society including cost of
construction of the hospital. The balance sheet of the society reflects that
amount(s) of ` 1,85,33,576/-, ` 26,00,000/- and ` 11,78,093/- were
outstanding as loans to Nidhi Builders, HUDCO and others respectively.
c) On March 11, 2002 the society entered into a loan agreement with
Dr.Ish Kumar, Sanjay Khurana and Dr.Rakesh Passi whereby Dr.Ish Kumar,
Sanjay Khurana and Dr.Rakesh Passi lent a sum of ` 2,34,67,290/- (US $
5,00,000) to the society for a period of nine years with interest @ 6% per
annum.
d) After receiving aforesaid loan from Dr.Ish Kumar, Sanjay Khurana
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and Dr.Rakesh Passi, the society cleared the outstanding dues of Nidhi
Builders, HUDCO and others in the year 2002 itself.
14. Vide impugned judgment dated January 04, 2012, the learned Single
Judge allowed the writ petition filed by the society and has quashed the
order dated June 02, 2009 passed by DDA cancelling the allotment of the
land in favour of the society.
15. In so concluding, the learned Single Judge has held as under:-
a) The case projected by DDA to justify its action of cancelling the
allotment of land in favour of society that sale of land was effected by the
society by changing membership of society has no legs to stand in view of
the fact that the lease-deed dated June 11, 1996 executed by DDA in favour
of the society does not prohibit the society from inducting new members or
filling up membership upon resignation of existing members. Change of
membership would not amount to a sale of land.
b) A conjoint reading of Sections 4, 5 and 16 of the Societies
Registration Act, 1860 brings out that though a society may own a property
but the same is held for the purposes of management thereof in the
Governing Body. But, the person in whom the property is vested for
management cannot become the owner thereof.
c) The lease-deed dated June 11, 1996 executed by DDA is in favour of
the society and not in favour of the then Governing Body or the members of
society. Further, the particulars of the Governing Body or members of
society have also not been stated in the lease-deed dated June 11, 1996.
Thus, the only conclusion which emerges is that DDA has created rights by
way of a perpetual lease in the land in question in favour of the society,
irrespective of who is in the management of the society and who are the
LPA No528/2012 Page 11 of 18


members of the society.
d) In view of the settled legal position that the society is a quasi-
corporation and is deemed to be a separate legal entity distinct from its
members and entitled to hold property, any change in the membership of the
society or its Governing Body cannot fall within the meaning of the
expression ‘ otherwise part with possession of the property ’ occurring in the
lease-deed dated June 11, 1996, particularly when the perpetual lease-deed
dated June 11, 1996 has been executed by the DDA in favour of the society
and it is the society which is prohibited from selling, transferring, assigning
the land/building constructed thereon. The privity of DDA under the
perpetual lease-deed dated June 11, 1996 is with the society and not with the
members of the society.
e) The expression „otherwise part with possession‟ occurring in clause
II(5)(a) of the lease-deed dated June 11, 1996 have to be read in ejusdem
generis to sale, transfer, assignment by society to another entity and cannot
be read as prohibiting a change in membership.
f) Notwithstanding the change in membership of the society, the society
continues and will continue to hold the land as the lessee and thus no case of
violation of any terms of the lease-deed dated June 11, 1996 can be made
out. (We again repeat that we are not noting the findings returned by the Ld.
Single Judge on the aspect of non-construction of hospital by society in the
prescribed period for appellant DDA has not challenged the findings
returned by the Ld. Single Judge on the aspect of non-construction of
hospital in the present appeal).
16. Aggrieved by the aforesaid, appellant DDA has filed the present
Letters Patent Appeal.
LPA No528/2012 Page 12 of 18


17. In support of the appeal, learned senior counsel for the appellant
argued that the learned Single Judge has taken a hyper-technical view in
reaching the conclusion that the society had not effected sale of the land in
question in favour of Mr.Sanjay Khurana and other persons (NRIs) who
were inducted in the society around the year 2002 as members thereof and
some to them in its managing committee. Counsel argued that a careful
analysis of the balance sheets of the society and other documents filed by the
society in the writ petition goes to show that huge sum(s) were paid by
Mr.Sanjay Khurana and other newly inducted members of the society, which
sum(s) were nothing but a consideration paid by said persons to Mr.Naresh
Chandra, the President of the society at the time when the lease-deed dated
June 11, 1996 was executed. To put it pithily, learned counsel argued that a
minute analysis of the documents filed by the society, particularly its
balance sheets, shows that consideration (money) for sale of land in question
had flown into the coffers of Mr.Naresh Chandra, the President of society at
the time of execution of the lease-deed dated June 11, 1996.
18. To support the above submission, learned senior counsel highlighted
that an analysis of the balance sheets of the society for the years ending
March 31, 2002 till March 31, 2005 brings out that contribution(s) made by
newly inducted members of the society and amount spent by the society
towards construction of the hospital in a given year, are as follows:-
S.<br>No.Year endingContribution made by<br>new memberAmount spent by society<br>on construction of<br>hospital
1.March 31, 2002`11,52,966/-`14,21,954.81
2.March 31, 2003`64,59,989.97`9,00,000/-
3.March 31, 2004`6,00,51,300.46`5,07,64,526.50
4.March 31, 2005`2,24,03,547/-`2,46,87,818/-

LPA No528/2012 Page 13 of 18


Total`9,00,67,803.43`7,77,74,299.31

conjunction with the recording contained in FIR No.367/2005 registered
against Mr.Naresh Chandra at the behest of Mr.Sanjay Khurana that „We the
NRI‟s have contributed about 14 crores of rupees out of which Mr. Naresh
Chandra and his wife have taken 4.75 crores for the land and 8 crores for
the construction of the hospital‟ as also the recording contained in
compromise deed dated April, 2007 entered into between society and
Mr.Naresh Chandra that „Trust (society) has advanced from time to time a
sum of over 8,18,53,802/- given to the Company (Nidhi Builders, a
`
company whose Managing Director was Mr.Naresh Chandra) towards the
construction agreement including mobilization advance, which was given to
the Company by the Trust (society)‟ leaves no manner of doubt that the
newly inducted members of the society (members inducted around the year
2002 such as Mr.Sanjay Khurana and other NRIs) had paid consideration to
Mr.Naresh Chandra, the President of society at time of the execution of the
lease-deed dated June 11, 1996 towards acquisition of the land from DDA
by the society.
20. Per contra, learned senior counsel for the respondent society
supported the impugned judgment dated January 04, 2012 passed by the
learned Single Judge arguing that on the admitted facts the conclusion
arrived at was correct and the legal principles culled out were correct.
21. It is evident that learned senior counsel for appellant DDA wants us to
apply the principle of ‘ tracing ’ to conclude that the consideration (money)
for sale of land in question had flown into the coffers of Mr.Naresh Chandra,
LPA No528/2012 Page 14 of 18


the President of society at the time of execution of the lease-deed dated June
11, 1996.
22. The principle of tracing was extensively dealt by the House of Lords
in the decision reported as (1992) 4 All. ER 512 Lipkin Gorman vs.
Karpnale. The dictum of law laid down by the House of Lords in Lipkin ’s
case (supra) can be summarized as under:-
I Law of restitution is not based upon implied or quasi contract theories
but based upon the principle that unjust enrichment must be restituted.
II An action for money had and received is maintainable whenever the
money of one man has, without consideration, got into the pocket of another.
III Where money has been stolen, it is trust money in the hands of the
thief, and he cannot divest it of that character. If he pays it over to another
person, then it may be followed into that other person’s hands. If, of course,
that other person shows that it has come to him bona fide for valuable
consideration, and without notice, then it may lose its character as trust
money and cannot be recovered. But if it is handed over merely as a gift, it
does not matter whether there is notice or not.
IV Where money or notes are paid bona fide, and upon a valuable
consideration, they shall never be brought back by the true owner; but where
they come mala fide into a person’s hands, they are in the nature of specific
property; and if their identity can be traced and ascertained, the party has a
right to recover.
V It is well established that a legal owner is entitled to trace his property
into its product, provided that the latter is indeed identifiable as the product
of his property. ‘Tracing’ or ‘following’ property into its product involves a
decision by the owner of the original property to assert his title to the
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product in place of his original property.
VI Change of position is a valid defence to avoid restitution but the
change of position must be in good faith. The defence of change of position
should be applied on case to case basis as the law of restitution is based on
unjust enrichment of the defendant.
VII Where an innocent defendant’s position is so changed that he will
suffer an injustice if called upon to repay, the injustice of requiring him so to
repay outweighs the injustice of denying the plaintiff restitution. If the
plaintiff pays money to the defendant under a mistake of fact, and the
defendant then, acting in good faith, pays the money or part of it to charity,
it is unjust to require the defendant to make restitution to the extent that he
has so changed his position.
VIII Benefits acquired by fraud, breach of confidence, breach of fiduciary
relationships or by other wrong doings do not get benefit under the defence
of change of position. Change of position as a defence has to be casually
linked to the receipt that makes it inequitable for the recipient to make
restitution. Mere fact that the recipient has spend the money whole or in
part, does not make it inequitable because expenditure might have been
incurred by him in any event in ordinary course of things. But a bona fide
recipient is entitled to establish the defence that he had increased his
outgoings as a result of the receipt.
23. The argument advanced by learned senior counsel for the appellant
have to be understood in the light of principle of tracing enunciated above.
24. In essence, learned senior counsel for appellant had argued that on
applying principle of tracing, the position which would emerge is that when
so-called loan advanced by the newly inducted members of the society is
LPA No528/2012 Page 16 of 18


traced, the trail would end in the coffers of Mr.Naresh Chandra and his
family members, which in turn would show the so-called loan was merely a
camouflage but in reality consideration paid by newly inducted members to
Mr.Naresh Chandra towards sale of land in question.
25. Is it so? Has DDA been able to establish that trail of loan advanced by
newly inducted members of the society ends in hands of Mr.Naresh Chandra
and his family members?
26. In our opinion, the answer is NO.
27. No material whatsoever has been placed on record by DDA to show
that the loan advanced by the newly inducted members of the society ended
in the hands of Mr.Naresh Chandra and his family members. Particular
emphasis was placed upon balance sheets of the society by learned senior
counsel for DDA to show the end of the trail of money (loan) in the hands of
Mr.Naresh Chandra and his family members. However, the balance sheets of
society do not help the cause of DDA, for the balance sheets merely show
various sum(s) were advanced by newly inducted members of the society
viz. Mr.Sanjay Khurana and other NRIs to the society from time to time. But
the trail of money gets cold here. There is no material to show that said
sum(s) advanced by newly inducted members of society to the society
reached the hands of Mr.Naresh Chandra and/or his family members.
28. Such being the factual position, the irresistible conclusion which
emerges is that appellant DDA failed to justify its action of cancelling the
allotment of land in question in favour of the society. The legal principles
which we have succinctly culled out from the impugned judgment are
correct. A society is distinct from its members. If a person gives money to
a society by way of a donation or even a loan and is inducted as a member of
LPA No528/2012 Page 17 of 18


the society does not mean that the members of the society who were
managing the society when the society acquired an asset have sold that asset
to the person who after giving donation is inducted as a member in the
society. It happens most often that a person who gives a substantial money
to a society, desiring to ensure that the funds are better utilized is inducted as
a member in a society. It may also happen that existing members may
resign. An allegation that this is a camouflage for sale of the asset of the
society would require proof of money reaching the coffers of the members
who walk out.
29. As a necessary corollary thereof, the present appeal fails and is hereby
dismissed.
30. No costs.

(PRADEEP NANDRAJOG)
JUDGE



(MUKTA GUPTA)
JUDGE
FEBRUARY 02, 2016
mamta
LPA No528/2012 Page 18 of 18