An Appeal to Lt Governor of Delhi to Exercise Regulatory Powers

by 3 Lt Col CPC Nath(Retd), C 679 Sarita Vihar, New Delhi 110076 March 15, 2013
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An electronic copy available at http://goo.gl/drq5x nath@computer.org . He is an independent researcher in Information Security, Privacy, Philosophy of Law and Justice.

Contents
I Dimension of Veteran Stakes 3 4 5 6 7 II Facts A Rule of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . B Grounds for Suspicion . . . . . . . . . . . . . . . . . . . . . . C Not Responsive to appeals . . . . . . . . . . . . . . . . . . . .

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III Fiduciary Principles 8 A Unbending and Inveterate Standard . . . . . . . . . . . . . . . 9 B Criminal Breach of Trust . . . . . . . . . . . . . . . . . . . . . 10 IV Allegations A Criminal Breach of Trust . . . . . . . . . . . . . . . . . . B Statutes violations & Potential for Big time Scandal . . . C Violation of Democracy by an Oligarchy . . . . . . . . . D Due Process violations: Rules of the Society . . . . . . . E Violation of Fundamental Rights & Constitutional Rights F Injustice & Violation of Statutes . . . . . . . . . . . . . G Illegal and Unlawful Rules . . . . . . . . . . . . . . . . . H Coercion . . . . . . . . . . . . . . . . . . . . . . . . . . . V Prayer 11 11 12 12 14 14 15 16 16 17

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AN APPEAL TO

LT GOVERNOR OF DELHI

TO EXERCISE REGULATORY POWERS

IN THE OFFICE OF THE LT GOVERNOR OF DELHI

IN THE MATTER OF COMPLIANCE WITH LAWS OF ARMY WELFARE SOCIETY ORGANIZATION, A SOCIETY REGISTERED IN DELHI UNDER THE REGISTRATION OF SOCIETIES ACT 1860

DIMENSION OF VETERAN STAKES

AWHO ( Army Welfare Housing Organization), a society registered in Delhi under Registration of Societies Act 1860 has constructed 20,0000 homes and 10,000 homes are under construction. With individual veteran member contributions going on an average to Rs half a crore, an amount of Rs 15,000 Crores member contribution are at stake and are being managed autocratically by a single person with zero transparency as if it is his sole proprietorship as opposed to being governed democratically by the stake holder veteran members mostly in their 60s, 70s and 80s. And this is happening right under the nose of the Delhi Government. Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most ecient policeman.- Justice Louis Brandeis, Other Peoples Money and How Bankers Use It (1914).

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II

FACTS

1. AWHO ( Army Welfare Housing Organization) is a Society registered in 1978 under Societies Registration Act 1860 for the welfare of Army personnel both serving and retired by providing housing at No Prot No Loss. Most of the veterans are made to believe this purely on the basis of trust that the measure is a welfare measure closely supervised by the Army and his money is not in danger of being exploited. 2. The Army emblem carried every where on the AWHO site gives feeling that it is closely connected with the Army. 3. No one ever told him that though it is a Society, he is not a part of the Society where transactions will be conducted with total transparency as required under the statute, 4. Society is a legal ction for a couple of public servants of Army Hq to get into lucrative Real Estate business for a captive veteran population and the Society has no real interests of the veteran in mind ever but is interested only in his money. 5. The truth as he discovers soon is: Give us your money and we will give you a house eventually but there will be total lack of transparency and Society will function neither as a Government Department nor a true Society where members will participate in its governance. 6. Veteran investors whose average age prole is in their 60s, 70s and 80s and have invested all of their savings and savings of his spouse, and even grown up children and have borrowed very heavily from banking loan sources discover that they are under coercion to continue because the alternative of getting out is at a terrible nancial ruin and so continue till the end of the project. 7. He soon learns that the sta and Members of the Board ( MoB) of AWHO consisting of serving senior Army ocers under the strict disciplinary constrains of Military law and discipline have undivided loy4

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alty to the Adjutant General as against their duciary responsibilities mandate that they ought to have undivided loyalty to the actual beneciaries, i.e the veterans. 8. Not only that there is no Right to Information and the Society though controlled fully by the public servants deny all Right to information available to the citizens. Citizens Right to Information is because of his stakes in governance as a tax payer and member of the public, the veteran is an investor to the tune of Rs Half a crore these days and yet he has no right to information of basic things like break down of cost of Houses, specications and variations from original specications etc. (even a Hotel customer gets itemized list for various charges in his Hotel bill). One senor veteran of the stature of a retired Major General had to put up an RTI request to Govt sources like HUDA to get the correct spec of his house allotted by AWHO!( see http://pragmatic.

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nationalinterest.in/2009/01/24/where-is-welfare-in-awwa-awho/ 15 [accessed 10 March 2013]) 9. Any amount of communications go unattended, unheeded, and unanswered and soon he realizes that he was talking to a wall like the devoted old Jewish Rabbi talking to the western wall all his life time with no specic eect on the wall or his prayers!
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RULE OF LAW

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Ever since its registration AWHO seems to be either breaking laws or stretching the statutes with evil intent and lack of faith to justify violations of law. Though real estate business has never been envisaged originally under Registration of Societies Act 1860, AWHO is engaged in construction of housing in the booming real estate market. Conveniently, the registration under Cooperative Societies Act with strict protection of interests of the stake-holder is guarded by detailed statutes provisions and close regulation by regulating agencies because of the nancial interests of the stake holders involved are safely avoided by AWHO by the lax Registration of Societies Act which 5

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actually is meant of literary societies etc.

GROUNDS FOR SUSPICION

Extreme Secrecy and total Lack of transparency in every thing about the functioning of the society as if they are national secrets to be guarded with utmost secrecy or else it will endanger the territorial integrity of the nation and that includes even publicly available records below thus invoking the suspicion of possible opportunity for corruption. 1. Original Memorandum of Association of the Society 2. Original Rules of the Society 3. Names of the BoM 4. Decisions of BoM including (a) Decision to disenfranchise the contributing members of the society i. from the voting on passing the rules ii. even from the fundamental membership of the society (b) Decision to have all BoM to be from ex-ocio members only thus excluding the contributing members from all opportunity of guarding their interests from usurpation by the non-contributing members. 5. Financial statements including Assets and liabilities and the audited statement of accounts of the Society. 6. Break down of costs of houses (you get a break down of prices at the end of a dinner in any restaurant!) into land cost, development cost, construction cost, management costs etc as if these are also national secrets to be guarded from the enemies of the nation! Disclosure required to ascertain the validity of the claim that the Society functions as non-prot as claimed by the BoM. The Right to Information in Government is based on the stake of the citizen that he pays taxes to the 6

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Government. Shouldnt the AWHO allottee who stakes his lifes savings and must have right to information from his duciary? Further, when dealings are opaque, the likelihood of corruption is at its highest and especially so when the operating assets run to many thousands of crores. Even the queries on the breakdown of the costs charged for houses when it is 300 to 400% higher than construction/escalation costs elicits no response from the Society dedicated to the welfare of the veteran!

NOT RESPONSIVE TO APPEALS

Every appeal for correction was totally ignored with no application of mind not to talk of any response by total stone wall of silence as if nothing had happened and only remedy constantly reminded on conversation is to approach the courts. See document at http://goo.gl/BwFNY. Right to petition is a fundamental right of the people and it does come with a concomitant right of people in power NOT to ignore such petition! As stated by US Supreme Court Justice Louis Brandeis, Experience teaches us to be most on our guard to protect liberty when the governments purposes are benecent. and in this case a Society controlled by a bunch of public servants in oce at the exclusion of any democracy by the welfare recipients mandated by the statute is clearly violating the well settled rights of the ordinary citizen and mostly senior veteran in their 60s, 70s and 80s with all the rights which a vibrant democracy provides! To think of denying these as a welfare measure is only an irony in the AWHO society.

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Registered rules of a society pre-supposes Membership in Society Signicantly the registered rules of a society bind both the society and all of its members, giving a contractual avour to their relationship.Members can be either individuals, other societies or companies.The binding nature of these rules is stated to be as though each members had signed those rules in person. Amendments to the rules are only binding on an individual members if that members consent in writing had been obtained prior to the 7

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change. Therefore, the rights of the members are entirely in the personal nexus established by the contract (in the form of the societys rules) between the member and the society and the (statutory) debt generated by that relationship. AWHO violates Rule of Law and and instead incorporates Rule of Men. Friendly Societies Act of UK & Registration of Societies Act 1860

In general terms a friendly society the relationship of the member of an unincorporated friendly society and the society itself is governed by the law of contract.It should be remembered though that FSA 1974 requires an express trust be created. Each society is required to have at least one trustee and each branch is also required to have at least one trustee. The society itself does not have legal personality and therefore it will be the trustees who will enter into contractual relations with the members ex ocio. The right of the member during the life of the society will therefore be as a beneciary under a trust with vested proprietary rights. AWHO violates Democratic control and instead incorporates control by exocio the military not responsive to the Members with total lack of loyaties to the Society Members but to outside powers! This violates all duciary principles.

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III

FIDUCIARY PRINCIPLES

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1. A duciary relationship exists where there has been a special condence reposed in one who, in equity and good conscience, is bound to act in good faith and with due regard for the interests of the one reposing the condence. 2. Since a duciary has a duty to disclose all relevant facts relating to matters within the scope of the duciary relationship, a failure to disclose may toll the statute of limitations. 8

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3. The burden of proving that he or she disclosed all material facts and that the transaction was fair lies with duciary. He bears the burden of proof on these issues, Fiduciary is at risk where the evidence on the questions is inadequate to reach a conclusion. 4. The trustee must display throughout the administration of the trust complete loyalty to the interests of the beneciary, and must exclude all selsh interest: One of the most fundamental duties of and over all consideration of the interests of third persons. 5. The duty of delity required of a trustee forbids the trustee from placing itself in a situation where there is or could be a conict between its self interest and its duty to the beneciaries. 6. Trustees cannot make a prot from the trust funds committed to them, by using the money in any kind of trade or speculation, nor in their own business. 7. The trustees must account for every dollar received from the use of the trust-money and they will beabsolutely responsible for it if it is lost in any such transactions. 8. Many forms of conduct permissible in a workaday world for those acting at arms length are forbidden to those bound by duciary ties. 9. A trustee is held to something stricter than the morals of the market place. 10. The duty of loyalty requires the duciary to act solely for the benet of the person to whom the duty is owed with respect to all matters within the scope of the duciary relationship. 11. The duty requires the duciary to subordinate his own interests to those of the beneciary.

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UNBENDING AND INVETERATE STANDARD

Many forms of conduct permissible in a workaday world for those 9

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acting at arms length, are forbidden to those bound by duciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty . . . . Only thus has the level of conduct for duciaries been kept at a level higher than that troddened by the crowd. It will not consciously be lowered by any judgment of this court. Justice Benjamin Cardozo of the New York Court of Appeals in Meinhard v. Salmon, 164 N.E. 545546 (1928) The quotation above from Justice Benjamin Cardozo of the New York Court of Appeals has set the standard for duciary conduct since it was written many years ago. Although the quotation arose out of a question of trustee loyalty and is cited to hold duciaries to a standard requiring that the beneciarys interest be placed rst, it is an example of the high standards to which duciaries are held. In performing its duties, any duciary should be aware that the standards to which it is held should include not only looking backward at past and recent court decisions, but also looking forward to issues yet to be litigated

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CRIMINAL BREACH OF TRUST

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Any of the following constitute a Crminial Breach of Trust: 1. Acting on behalf of a party whose interests conict with those of the person to whom the duciary duties are owed. ( This is extremely important as it was revealed in the meeting that the ocials work with loyalty and compliance with Army Hq as opposed to its own beneciaries, there surely is conicts of interest. Conict of interest rules are exceptionally precise! 2. Where the duciary enters into a transaction with a party to whom 10

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a duciary duty is owed, he or she must disclose all relevant facts to the party and, even then, may enter into a deal only on fair terms. In addition, the burden is on the accountant-duciary to prove both the fairness of the transaction and the disclosure of all material facts. 3. A duciary has a duty to disclose all relevant facts as to matters within the scope of the duciary relationship and any failure in this is a Criminal Breach of Trust. 4. Deal with the assets of the plan in his own interest or for his own account, in his individual or in any other capacity act in any transaction involving the plan on behalf of a party. 5. Represent a party whose interests are adverse to the interests of the plan or the interests of its participants or beneciaries. 6. A duciary is under a duty to keep accurate books and records regarding what constitutes the trust receipts and disbursements to and from the trust estate, all receipts and disbursements to and from the trust estate and, where applicable, records of all allocations of receipts and disbursements between the principal account and the income account.

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IV

ALLEGATIONS

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The following infractions of statutes are alleged against the said Society:

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CRIMINAL BREACH OF TRUST

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Members of the Board of Management owe duciary responsibilities to the contributing members of the society. Contributing members are the ones who trust their money with the Society for their houses and these days this amount goes up to Rs half a crores per individual. Instead of fullling the trust reposed on them, Chairman and BoM seem to: 1. have deprived the contributing members of eligibility to election to BoM thus depriving them of representation in the ruling BoM. (BoM 11

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thinks that they can impose their will even though the members have no representation in the BoM. Even the President of USA, Queen of England or the President of India have no rule making authority over their people except through the elected representatives of the people. That is what we call sovereignty of the people or democracy in the 21st century.) 2. Disenfranchised them from voting as members of the General Body. 3. They have been declared as non-members as second grade citizen and new category by the name allottees have been created for this very purpose. This is almost like a dictator like Saddam, Mubarak or

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Mushara declaring that the citizens are only subjects and not citizens and the members of their cabinet are the only citizens!

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STATUTES VIOLATIONS & POTENTIAL FOR BIG TIME SCANDAL

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Founding members who formed the BoM have ruled that the members of the society are not eligible for election to BoM, General Body and declared them to be just allottees, a special second class citizenship with no eligibility to vote even in the general body. The Chairman controls the BoM and COAS controls the Chairman using the strength and power of the military law and power over subordinates is absolute unlike in a Society where every one is equal. Currently, the Society has become almost a single proprietorship controlling a very large business. AWHO has constructed 20,000 houses and are constructing 10,000 houses and each house roughly costing Rs 50 Lakhs and that means huge business ( Rs 15,000 Crores) stretching all parts of India but being controlled as if it is a sole proprietorship but actually belonging to all the members of the society.

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VIOLATION OF DEMOCRACY BY AN OLIGARCHY

1. What must A (or B) do, under threat of societal penalty assessed for the benet of the others? 12

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2. If we determine that A must conduct himself in a certain manner, he has a duty to B, and B has a right against A. 3. If we determine that A cannot by his own voluntary act change the legal relations of B, then A has a disability and B has an immunity. 4. AWHO BoM has a duty to call elections for the elected BoM under the original MoA, then the founding members has a duty to the Members of the Society and Members of the Society right against Founding Members. 5. Similarly, if Founding Members has a duty to get the change of MoA and Rules passed by the Members, then Founding Members has a duty to the Members of AWHO. 6. As no change to MoA or the Rules of the Society is possible with out the General Body of Members approving the same, every change of Rules or MoA requires approval of the General Body as per the statutes. Founding Members have a disability to change this and Members have immunity against any change in the rights of the Members. 7. Membership as per the original Rules is dened and it is any serving or retired ocers, JCO or OR and the Founders have a disability to change this and Members have immunity against any change in the rights of the Members. Democratic control by contributing members have been banished by Adjutant General, the ex-ocio Chairman of AWHO, on his own volition. To believe that the well estabished principle of self-interest in property can be sacriced in the fond hope that benvolent welfare feeling of the powerful and mighty can justiably replace self-interest of those who invest their hard earned money is only possible in a fools paradise and one has to be a simple and nieve fool to beleve in it is convincingly demonstrated historically. The very rise of co-operative movement demonstrates this and all the principles of co-operatives have been violated in AWHO.

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DUE PROCESS VIOLATIONS: RULES OF THE SOCIETY

Rules of the Society as submitted to the Registrar of Society for the rst time while registering are the only ones which are still valid as the due process in change of rules have not been followed in making any of the changes as per the originally approved MoA, Rules ever since the establishment of society. So every amendment to the rule are illegal because due process was not followed.

VIOLATION OF FUNDAMENTAL RIGHTS & CONSTITUTIONAL RIGHTS

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Violation of fundamental rights and equality before law equal protection of laws guaranteed by the constitution. The protection of the constitution and the statutes are denied to the contributing members by the self-appointed ex-ocio members who have usurped the BoM. It is sad indeed that we need to argue for the rst generation of rights Rule of Law rathe than Rule of Man in AWHO in a democratic country not to talk of the second generation rights Democratic Governance.

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Rule of Law rather than Rule of Man The rst generation of rights represented the struggle for equal justice or the struggle for negative rights. These called for a restraint from the uninhibited state or monarchial power over the individual. This generation of rights was derived from the American and French revolutions that both struggled to gain freedom from arbitrary rule. Collectively, these rights, articulated more recently in the Civil and Political Rights of the International Bill of Rights (1966), have shaped governmental control by rule of law rather than rule of man. In the domains of crime and crime control, these rights have at least formally established an impartial and fair enforcement of the procedural and substantive compo14

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nents of the criminal and civil laws.

Democratic Governance The second generation of rights represented the struggle for restorative justice or the struggle for positive rights. These called for armative actions by and/or on behalf of the state for pursuing the common welfare. Rooted in the struggles to democratize governments and to make them responsible to the needs of people living in post laissez-faire monopoly societies as a whole, these rights have shaped the sociopolitical obligations or minimal duties of the state to facilitate the self-actualization of individual human being (Barak 1980). These rights were also collectively articulated in 1966 in the Economic, Social, and Cultural Rights of the International Bill of Rights. In the domains of crime and crime prevention, these have included an emphasis on community social welfare, penitence and redemption, and oender-victim reconciliation.

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INJUSTICE & VIOLATION OF STATUTES

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There are two kinds of members, one, non-contributing, who are selected to be members ex-ocio holding certain appointments in the Army Headquarters. The second is the contributing members who have contribution to construction of Houses runs to half a crore these days. The non-contributing members have usurped all BoM membership, all General body membership and right to initiate changes of rules and bye-laws, vote on these changes and approve these changes, execute and enforce these changes and punish those who violate the changes thus usurping the legislative, executive, judicial powers all by themselves violating the fundamental precepts of the democratic functioning of the Society registered under the statutes and worse still to the total exclusion of the contributing members from all of the above. Considering that the the fundamental purpose of the Society is for the welfare of the members of army both serving and retired, such exclusion from all op15

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portunities to democratic control of the governance and direction of society is blatant and gross violation of statutes and can not be justied for any public purpose other than complete control of the Society at the behest of the COAS.

ILLEGAL AND UNLAWFUL RULES

BoM has passed rules with out due process of lawin that they are not approved by the General Body (because General Body is declared to be same as BoM ) but also in violation of the fundamental and constitutional rights of citizen, statutes that protect the property rights of the citizen and these unconstitutional and illegal rules are not enforceable under the laws of the land.

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COERCION

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These rules are enforced surreptitiously incorporating it in contracts, covenants 13 and restrictions in the sales deeds and certicates and undertaking forced on the allottees under the coercive threats that they will not get their houses unless they comply with these surreptitious incorporation and thus restricting their liberty to act under free will as citizens of a free democracy under threat of coercion because the alternatives to withdraw from the project thus incurring extreme economic losses and missed opportunities. The Chairman and BoM are terried of democratic deliberation and discussion and democracy of the rules was replaced by oligarchy of those who usurped power. When AWHO claims to be guarding the welfare of the veteran and behave in this fashion, one is reminded of the much quoted saying the world famous jurist : Experience teaches us to be most on our guard to protect liberty when the governments purposes are benecent.Justice Louis D Brandeis
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PRAYER

In view of all the foregoing charges against AWHO, the Society registered under Societies Registration Act 1860 under Delhi Government 1. Order an inquiry and a strict compliance audit against AWHO. 2. Enforce strict compliance to democratic rights guaranteed under the statutes. 3. Declare all rules passed with out due process and violative of constitution and statutes null and void. 4. Order full disclosure of all charges under dierent accounts and assets and liabilities of the society as required under its duciary duties and compliance with the statues. 5. Order AWHO to re-register under Co-operative Housing Societies Act and comply with the stringent regulatory requirements under the vigilant Director of Co-operatives to safeguard the interests of veteran stakeholders as business of real estate builder as a sole propreitorship is not valid activity under Registration of Societies Act as it does not come under charitable, literary or scientic activity. 6. Redraft and pass Registration of Societies Act 1860 to plug loopholes in compliance with exemplary punishments for transgression of Rule of Laws. **************************

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