Delhi Development Authority v. Bankmens Co-operative Group Housing Society Ltd. & Ors.
Background
Two Delhi co-operative group housing societies, Bankmens CGHS and Safdarjung CGHS, had been placed under liquidation years earlier for failing to comply with regulatory directions. Years later, both societies were "revived", but by persons who were never original members or promoters, with funding traced to builders rather than genuine society members. The Delhi High Court had ruled in the societies' favour and against the DDA, prompting the DDA's appeals to the Supreme Court; a connected third appeal challenged a High Court interim order requiring verification of a society's membership.
Decision Breakdown
The Supreme Court held that the revival of both societies was illegal, since it was engineered by outsiders with no genuine connection to the original societies and appeared to be backed by a "builder mafia" seeking access to DDA land, not real housing need. The Court found the memberships largely non-genuine and emphasized that a society's membership must be verified before land is allotted, not just afterward. It allowed the DDA's appeals, set aside the High Court's orders, and dismissed the societies' underlying writ petitions, while directing the DDA to refund, with 10% interest, the money originally deposited by genuine members so that innocent duped members would not be left out of pocket. The third, connected appeal (on the need for membership verification) was dismissed since the Court's reasoning confirmed that such verification was indeed necessary.
Lesson Learnt
A co-operative society that has been dissolved cannot be "revived" by outsiders with no genuine link to its original members merely to gain access to valuable public land allotments: courts will look behind such revivals, and allotting authorities must verify genuine membership before, not after, handing over land.