Synopsis

The petitioner, a member of a Delhi‑based cooperative thrift and credit society, challenged the appointment of a convicted person (Respondent No.4) as the Chief Executive Officer (CEO) of the society. The respondent had been convicted by a CBI court under Sections 420, 467, 468, 471 IPC and Section 13(1)(d) of the Prevention of Corruption Act, 1988, and sentenced to seven years’ imprisonment. Despite this, the society appointed him as CEO. By the time the writ petition was heard, the respondent had already stepped down from the post. The Delhi High Court held that while the individual lis had become infructuous, the larger issue remained: persons with tainted antecedents and criminal convictions ought not to be permitted to serve in managerial capacities in cooperative societies, especially thrift/banking societies. The court directed the Chief Secretary, GNCTD to initiate stakeholder consultations and frame appropriate provisions in the Delhi Cooperative Societies Act and Rules by 30th September 2026.

Court: High Court of Delhi at New Delhi

Coram: Justice Prathiba M. Singh and Justice Madhu Jain

Date of Judgment: 10th April 2026

Citation: W.P.(C) 17122/2022

Core Law: Delhi Cooperative Societies Act, 2003; Delhi Cooperative Societies Rules, 2007; Banking Regulation Act, 1949; Service Law

2. Legal Framework

Major laws and provisions involved

• Delhi Cooperative Societies Act, 2003 – governing registration and management of cooperative societies in Delhi

• Delhi Cooperative Societies Rules, 2007 – subordinate legislation under the Act

• Banking Regulation Act, 1949 – Section 10 (prohibition on employment of persons convicted of offences involving moral turpitude in banking companies)

• Prevention of Corruption Act, 1988 – Section 13(1)(d) (criminal misconduct by public servant)

• Indian Penal Code, 1860 – Sections 420, 467, 468, 471 (cheating and forgery)

Key legal principles applied

• Public interest in probity in cooperative societies: Cooperative societies, especially thrift and credit societies, handle public deposits and loans. Persons with criminal convictions involving moral turpitude should not hold managerial positions in such societies.

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