Delhi Dayalbagh House Building Society vs. Registrar Cooperative Societies: Supreme Court Rules on Alternative Remedy in Cooperative Society Dispute

The case of Delhi Dayalbagh House Building Society vs. Registrar Cooperative Societies & Others revolves around the issue of whether a cooperative society can directly approach the Supreme Court bypassing alternative legal remedies. The judgment reaffirms the principle that where statutory remedies exist, courts should not exercise their extraordinary jurisdiction unless exceptional circumstances exist.

Background of the Case

The appellant, Delhi Dayalbagh House Building Society, was involved in a dispute concerning the decision of the Registrar, Cooperative Societies, who passed an order under Section 94 of the Delhi Cooperative Societies Act, 2003. The appellant approached the Supreme Court, challenging the order directly, instead of filing an appeal under Section 112 of the Act.

The appellant argued that the judgment of the Delhi High Court made certain observations that could potentially prejudice the winding-up proceedings of the society. They contended that filing an appeal before the statutory authority would be futile and that the Supreme Court should intervene.

The Supreme Court, however, had to decide whether it was appropriate to entertain the appeal when an alternative remedy was available under the law.

Petitioner’s Arguments (Delhi Dayalbagh House Building Society)

• The order of the Registrar, Cooperative Societies, was erroneous and prejudicial to the interests of the society.
• The Delhi High Court’s observations could influence the statutory appeal, making it an ineffective remedy.
• The order of the Registrar was passed without properly considering the evidence presented by the society.
• The appeal under Section 112 of the Act may not serve any meaningful purpose, and hence, the Supreme Court should exercise its jurisdiction.

Respondent’s Arguments (Registrar, Cooperative Societies & Others)

• The statutory framework provides a clear appeal mechanism under Section 112 of the Delhi Cooperative Societies Act, 2003.
• The appellant has not demonstrated any extraordinary circumstances that would justify bypassing the alternative remedy.
• The Supreme Court has consistently held that where an alternative remedy exists, it should be exhausted before seeking judicial intervention.
• The Delhi High Court’s judgment does not, in any manner, affect the appeal rights of the society.

Supreme Court’s Judgment

The Supreme Court, led by Justices A.M. Khanwilkar and Ajay Rastogi, ruled against the appellant, dismissing the appeal and directing them to pursue the statutory remedy under the Delhi Cooperative Societies Act. The key findings of the judgment were:

• Availability of Alternative Remedy: The Court held that since Section 112 of the Act provides a statutory appeal mechanism, the appellant should have approached the appropriate authority instead of filing a direct appeal in the Supreme Court.
• Principle of Exhaustion of Remedies: The Court reaffirmed the doctrine that where a statute provides a remedy, parties must first exhaust that remedy before seeking judicial review.
• Judicial Review Not a Substitute: The Court emphasized that judicial intervention cannot be used as a substitute for statutory procedures unless exceptional circumstances exist.
• Statutory Appeal Still Open: The Supreme Court granted the appellant liberty to file an appeal before the appropriate authority within 60 days, directing the appellate authority to consider it without being influenced by any observations made in the Supreme Court proceedings.

Observations from the Judgment

The Court referred to Whirlpool Corporation vs. Registrar of Trade Marks, reiterating the principle that statutory remedies should be exhausted before invoking constitutional jurisdiction.

“The alternative remedy must be pursued in the first instance, and direct judicial intervention should be the exception, not the rule.”

The Court also observed:

“There is nothing in the High Court’s order that affects the appellant’s rights before the appellate authority, and the statutory appeal remains a viable remedy.”

Impact of the Judgment

This ruling has significant implications for cooperative society disputes and the broader principle of judicial review:

• It reinforces the need for litigants to follow statutory appeal procedures before approaching higher courts.
• It upholds the principle that the judiciary should not intervene in matters where statutory remedies exist unless compelling reasons are demonstrated.
• It ensures that the appellate authority’s decision is made without external influence, protecting the integrity of the statutory process.
• It prevents the misuse of judicial review as a shortcut to bypass statutory mechanisms.

Conclusion

The Supreme Court’s decision in Delhi Dayalbagh House Building Society vs. Registrar Cooperative Societies reinforces the importance of statutory remedies in legal proceedings. By directing the appellant to approach the appropriate authority, the judgment upholds the doctrine of exhaustion of remedies and prevents unnecessary judicial interference in regulatory matters. This case serves as an important precedent in cooperative society disputes and the broader framework of administrative law.

Petitioner Name: Delhi Dayalbagh House Building Society.
Respondent Name: Registrar Cooperative Societies & Others.
Judgment By: Justice A.M. Khanwilkar, Justice Ajay Rastogi.
Place Of Incident: Delhi.
Judgment Date: 30-01-2019.

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