Society May Terminate Membership for Non-Payment of Dues Despite Judicial Affirmation of Bona Fide Status

Respondent No. 2, Mr. Raj Singh, obtained membership in the Petitioner Society in December 2002.

In 2017, an Arbitrator acting under Section 60 of the Delhi Co-operative Societies (DCS) Act, 1972, declared him a valid member and directed the Society to demand dues and forward his name for flat allotment.

The Society appealed to the Delhi Co-operative Tribunal (DCT), which dismissed the appeal on August 2, 2018.

On April 21, 2022, the DCT partially allowed the review, setting aside the direction for flat allotment on the grounds that the respondent had not made substantial payments, but confirmed his status as a "bona fide member".

The Petitioner Society challenged both the 2018 order and the 2022 review judgment before the High Court, arguing that since the Respondent paid only Rs. 110/-, he should not be recognized as a member at all.

1. Whether the findings of the Delhi Co-operative Tribunal confirming the Respondent as a bona fide member, despite non-payment of dues, were legally sustainable.

2. Whether the Society retains the right to terminate membership for non-payment of dues despite a judicial declaration of membership status.

The court's reasoning was guided by the provisions of the Delhi Co-operative Societies Act and Rules (specifically Section 60 regarding disputes).

The core legal principle applied is that a person admitted as a member remains so until they are formally disqualified, expelled, or resigned according to the statutory procedure established under the DCS Act and Rules.

The court applied the principle of administrative autonomy, holding that a judicial confirmation of membership status does not grant immunity from future statutory actions for defaults or non-payment.

The Court observed that while Respondent No. 2 had not made significant payments beyond the initial sum of Rs. 110, the Society had failed to take any formal steps to remove or expel him from membership prior to the litigation.

The Court reasoned that since no expulsion or disqualification process had been initiated by the Society, the Tribunal's finding that he remained a "bona fide member" was technically correct at the time of the award.

The Court clarified that the Tribunal’s judgment does not act as a permanent shield; if the member remains in default of payments required by the Act and Rules, the Society is not barred from initiating fresh proceedings to terminate the membership.

The High Court declined to interfere with the impugned judgment dated April 21, 2022, and the petition was disposed of accordingly.