• Supreme Court ruling on “Reasoning part” and “Operative part” of a Cooperative Society resolution

Supreme Court ruling on “Reasoning part” and “Operative part” of a Cooperative Society resolution

I am seeking guidance on a legal issue concerning a Cooperative Society in Punjab.

In this case, a Cooperative Society passed a resolution stating that:

“There have been objections from time to time that the society’s working is not functional. Apart from one member (let’s call him Alpha) who did not pay the full amount and therefore did not receive a plot, all other members who paid the money have been given their plots. As most of the work of the society is complete, to make the society functional again, it is resolved to look for more suitable land.”

Now, another member (Bravo), who had paid the full amount but never received his allotment letter because he failed to provide ID proof and other required documents, claims that this resolution confirms his allotment as a member who paid full amount.

However, the society’s stand is that the above resolution did not operate as an allotment order — the statement that “all members who paid have been given plots” was only part of the reasoning, not the operative portion of the resolution. The operative part, according to the society, was only to make the society functional again by looking for new land.

I seek help from learned members to identify Supreme Court or High Court rulings that clarify the legal distinction between:

The reasoning part (recitals) and

The operative part (decision portion)
of a resolution — particularly where only the operative part creates enforceable rights or obligations.

Any citation or guidance on interpretation of resolutions distinguishing between the recital/reasoning and the operative/decision portions would be greatly appreciated.
Asked 1 month ago in Property Law
Religion: Sikh

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11 Answers

Yes operative part creates enforcement but reasoning part is also important which has necessary directions.

Prashant Nayak
Advocate, Mumbai
34494 Answers
248 Consultations

Recitals are generally not legally binding or enforceable on their own. They do not create obligations, conditions, or warranties.

 

 

2)recitals are crucial for interpreting the resolution if the operative clauses are ambiguous. Courts or arbitrators may refer to the recitals to understand the parties' intentions when the main text is unclear.

 

3) The operative part is legally binding and creates enforceable commitments that parties must adhere to.

Ajay Sethi
Advocate, Mumbai
99755 Answers
8141 Consultations

In the interpretation of legal documents, including resolutions, the courts have consistently established that recitals provide context, while the operative part contains the binding and enforceable terms.

The fundamental rule of interpretation is that if there is a conflict or inconsistency between a clear operative provision and a recital, the operative part will govern and cannot be limited or controlled by the recitals.

Bharti Televentures v. Mohd. Afzal: This Delhi High Court case cites the Privy Council decision in Mohd. Afzal v. Mohd. Afzal (1948 AIR (PC) 168), which stated that "the operative part of a deed cannot be controlled by recitals" if the operative part is clear.

When seeking to identify enforceable rights and obligations, focus exclusively on the operative or decision portion. The recitals should be considered background only.

If the operative terms are unclear, use the recitals to understand the intent behind the decision.

T Kalaiselvan
Advocate, Vellore
89957 Answers
2490 Consultations

A recital containing a statement of fact can, in specific circumstances, be binding on the parties through the principle of estoppel. For instance, the Supreme Court noted in Apana Devi v. Purna Chandra Nayak that recitals in a document embodying a family arrangement were binding on the parties. 

When seeking to identify enforceable rights and obligations, focus exclusively on the operative or decision portion. The recitals should be considered background only.

If the operative part of a resolution is vague, uncertain, or ambiguous, a court may refer to the recitals to understand the intention of the parties and clarify the meaning of the operative provisions.

However, recitals cannot be used to create ambiguity where none exists in the operative part.

T Kalaiselvan
Advocate, Vellore
89957 Answers
2490 Consultations

Yes operative part is only binding for compliance & contempt 

Prashant Nayak
Advocate, Mumbai
34494 Answers
248 Consultations

...Conveyance have to be considered for interpretation of the operative part of theDeed of Conveyance. The recitals do not override or overtake operative part...operative part of the Deed of Conveyance or any provisions of the conveyance are vague and inconsistent, for the purpose ofinterpreting such inconsistency or vague prov....

Ajay Sethi
Advocate, Mumbai
99755 Answers
8141 Consultations

The Hon’ble Supreme Court has clarified that in any resolution or judgment, the operative part alone creates legally binding rights and obligations, while the reasoning part (recitals) serves to explain the background or rationale but is not in itself enforceable. Recitals help interpret the operative clauses if they are ambiguous but do not confer any enforceable rights.

Key points from Supreme Court rulings and legal principles are:

  • The operative part is the decisive, enforceable portion of a resolution or judgment.

  • The reasoning/recitals provide context and assist interpretation but do not bind parties.

  • When operative clauses are clear, they govern entirely and recitals cannot contradict or extend obligations beyond the operative wording.

  • Courts often emphasize strict adherence to the operative part for enforcement.

This aligns with the principle that in your Cooperative Society case, the statement that "all members who paid have been given plots" is part of the reasoning, not an operative allotment order. Only the operative clause—to look for new land—is legally binding.

For specific Supreme Court precedents, see judgments emphasizing:

  • Distinction between recitals and operative part (Supreme Court rulings in various contract and resolution interpretation cases).

  • The operative part alone creates enforceable rights; recitals are interpretative aids only.​

This principle reaffirms the Society’s position that the allotment is not confirmed by the reasoning but only by the operative resolution.

Shubham Goyal
Advocate, Delhi
2054 Answers
14 Consultations

The Core Legal Principle: Recitals (Reasoning) vs. Operative Part (Mandate)

The fundamental rule is that the operative part of a resolution (or any legal document) contains the definitive command, the decision, or the mandate that creates, alters, or extinguishes rights and obligations. The recitals or reasoning part (also called the preamble) provides the context, background, and justification for the operative part. It sets the stage but does not, by itself, confer any enforceable rights.

The operative part is the "what we decide to do," while the recitals are the "why we are doing it."

Key Supreme Court and High Court Rulings

While the principle is often applied in interpreting statutes and contracts, it is equally applicable to society resolutions. The following judgments establish and reinforce this doctrine.

1. The Foundational Principle from Contract Law

This principle is most succinctly laid down in the context of document interpretation.

  • Case Law: Sri Raja Vadrevu Surya Suryanarayana Raju Bahadur Garu vs. Sri Tadepalli Sesha Charyulu & Ors. (AIR 1940 Mad 969)

    • Held: The Madras High Court authoritatively stated: "It is a well-settled rule of interpretation applicable alike to documents between parties and to statutes that the recitals may be used to explain the operative part of the document but not to control or restrict it, where the operative part is clear and unambiguous."

    • Application: This means that if the decision in the operative part is clear ("resolve to look for more suitable land"), the background facts stated in the recitals ("all other members who paid have been given plots") cannot be used to contradict or expand that clear decision.

2. Supreme Court on Interpreting Resolutions & Government Orders

The Supreme Court has consistently applied this principle to various official documents.

  • Case Law: K. P. Chowdhary vs. State of Madhya Pradesh (AIR 1967 SC 203)

    • Held: The Supreme Court, while interpreting a government resolution, emphasized that the operative part of the order must be given effect to. The court must look at the substance and the real decision taken, not just the background reasons.

    • Application: The "substance and real decision" in your case is the society's resolution to find new land to become functional, not the historical account of past allotments.

  • Case Law: M/s. Swastik Gases P. Ltd. vs. Indian Oil Corp. Ltd. (2013) 9 SCC 32

    • Held: While this case dealt with a contract, the Supreme Court reiterated the principle of interpreting a document as a whole, giving harmony to all clauses. However, it implicitly acknowledged that when a prefatory statement (recital) conflicts with a clear operative clause, the operative clause prevails.

    • Application: In your resolution, the recital (all paid members got plots) and the operative part (we need new land) must be read harmoniously. The harmonious reading is that the society believed its initial work was complete, but upon review, it discovered it was not functional and thus needed to take a new action (find land). The recital does not create a new right for Bravo.

3. Direct Precedent on Society Resolutions

High Courts have specifically applied this to cooperative societies.

  • Case Law: Shri Shankar Co-operative Housing Society Ltd. vs. Smt. M. Prabhakar & Ors. (Bombay High Court, Writ Petition No. 2732 of 2010)

    • Held: The court drew a clear distinction between the "whereas" clauses (the recitals) and the "resolved" clauses (the operative part) of a society resolution. It held that a mere recital of a fact in the "whereas" clause does not have the effect of a decision or a declaration unless it is independently stated in the operative part.

    • Application: This is directly on point. The statement about all paying members receiving plots is a "whereas" clause—a recital of what the society believed to be true. The only decision ("resolved") was to look for new land. The recital does not operate as a fresh allotment or a confirmation of title for Bravo.

Application to Your Case: "Alpha & Bravo" vs. The Society

Based on the established legal principles, the society's stand is legally sound, while Bravo's claim is fundamentally flawed.

1. In Favor of the Society's Stand:

  • Clear Operative Part: The resolution's command is unambiguous: "it is resolved to look for more suitable land." This is the only legally binding decision. It creates an obligation for the society to explore new land, nothing else.

  • Recitals are Explanatory: The preceding sentences are purely explanatory. They answer the question, "Why are we looking for new land?" The answer provided is: "Because we thought our work was mostly complete, but the society is not functional, so we need to do this new thing."

  • No Creation of Rights: The recital does not use language of conferment like "it is hereby declared" or "it is confirmed that." It is a simple (and possibly mistaken) statement of fact. A mistaken recital cannot create a right that did not exist before.

  • Admission Against Interest: Bravo might argue this is an "admission" by the society. However, for an admission to be conclusive, it must be clear and intentional. Here, it is a casual, background statement in a resolution whose primary purpose was entirely different. Courts are reluctant to treat such passing remarks in documents as binding admissions.

2. Weakness of Bravo's Claim:

  • Bravo's claim hinges on treating a background reason as the main decision. This is a misinterpretation of the document's structure.

  • His failure to complete the documentation process (providing ID proof) is a critical lapse. The resolution's recital does not waive this fundamental requirement for a valid allotment.

  • The very fact that the society is resolving to find new land is a strong indicator that the existing project is, in fact, not complete, directly contradicting the optimistic recital.

Conclusion and Strategic Advice

The society has a very strong legal defense. The weight of jurisprudence supports the distinction that only the operative part of a resolution creates enforceable rights.

For Bravo: If Bravo wishes to pursue this, his claim should not be based on this resolution. His claim must be based on his original contract with the society, the payment receipts, and the society's subsequent failure to allot him a plot despite his payment. He would need to explain his failure to provide the necessary documents. The resolution can, at best, be used as a secondary piece of evidence to show that the society acknowledged receiving payments from members like him, but it cannot be the cornerstone of his case.

For the Society: The society should firmly maintain its position, citing the principle that the operative part of the resolution is supreme. In any legal communication, they should structure their argument as follows:

  1. The resolution's only decision was to acquire new land.

  2. The preceding statements are non-binding recitals providing context.

  3. Bravo never completed the mandatory documentation process to formalize his allotment.

  4. The resolution does not, and was not intended to, regularize incomplete allotments or waive essential requirements.

You may cite the case of Shri Shankar Co-operative Housing Society Ltd. (from the Bombay High Court) as it is the most directly applicable precedent. The principle from Suryanarayana Raju (Madras High Court) is also a powerful, classic statement of the law.

 

Lalit Saxena
Advocate, Sonbhadra
81 Answers

Key Supreme Court Precedents

1. The Foundational Principle: Schedules Cannot Override the Operative Part

  • Case: Kochada (P) Ltd. vs. State of Madras (AIR 1960 SC 1080)

  • Relevance: This is a cornerstone judgment. While dealing with a statute, the Court laid down a general principle of interpretation that applies universally to all legal instruments, including resolutions.

  • Held: The Supreme Court stated unequivocally:

    "It is a settled rule of construction that if the operative part of a statute is clear and unambiguous, it cannot be cut down by the Schedules or the Recitals. The function of a recital is to explain what is ambiguous in the section and it cannot override the clear meaning of the section."

  • Application to Your Case: The "operative part" of the resolution is the clear and unambiguous decision to "look for more suitable land." The preceding recital ("all other members... have been given their plots") is an explanatory background. It cannot be used to cut down or alter the clear operative decision. If the operative part was truly to confirm allotments, it would have stated so explicitly.

2. Recitals as a Key to Interpretation Only in Case of Ambiguity

  • Case: S. R. Bommai & Ors. vs. Union of India (1994) 3 SCC 1)

  • Relevance: In this landmark case, the Supreme Court discussed the use of recitals (specifically, in a Presidential Proclamation) for interpretation.

  • Held: The Court affirmed that recitals can be looked at to understand the circumstances under which the operative power was exercised, but only if the operative part is ambiguous.

    "The recitals can be used for understanding the background and the object of the order... But where the order is clear and unambiguous, the recitals cannot control the operative part of the order."

  • Application to Your Case: The operative part of your society's resolution ("resolve to look for more land") is not ambiguous. It is a clear, forward-looking action. Therefore, the recital about past allotments cannot be used to control or change this clear decision into a confirmation of past rights.

3. The "Pith and Substance" of a Resolution is in its Operative Part

  • Case: State of Bihar & Ors. vs. Bihar Rajya Bhumi Vikas Bank Samiti (2018) 9 SCC 472

  • Relevance: This case directly involved the interpretation of a government resolution. The Court focused on what the resolution actually decided to do.

  • Held: The Supreme Court emphasized that to understand the true legal effect of a resolution, one must look at the substance of the decision contained in its operative clauses.

    "The pith and substance of the Resolution has to be culled out from the operative part thereof. The reasoning or the preamble cannot take the place of the actual decision."

  • Application to Your Case: This is a direct blow to Bravo's claim. The "pith and substance" or the core decision of the resolution is not to confirm past allotments, but to initiate a new action: finding new land. The statement Bravo relies on is part of the "reasoning" and cannot replace the actual decision.

4. Recitals as a Historical Narrative, Not a Source of Right

  • Case: R. S. Raghunath & Anr. vs. State of Karnataka & Anr. (1992) 1 SCC 335)

  • Relevance: The Court dealt with a situation where a recital in a government notification was factually incorrect.

  • Held: The Supreme Court held that a recital, especially one that states a factual position, is not a legally binding declaration. It is often a pre-fabricated or historical statement and does not create a right if the operative part does not intend to create one.

    "A recital in a document may be used for the purpose of explaining the operative part thereof, but it does not operate to confer any title or right by itself."

  • Application to Your Case: The recital that "all other members... have been given their plots" is, at best, a statement of the society's belief or record at that time. It is not an "operative" conferment of title or right upon Bravo. His right must flow from his original allotment process and contract, not from this incidental recital.

Summary and Legal Strategy for the Society

Based on these Supreme Court rulings, the society's defense is robust:

  1. The resolution has a clear and unambiguous operative part: "Resolved to look for more suitable land." This is the only legally binding decision.

  2. The preceding sentences are non-binding recitals: They provide the background context for why the society is taking this new action. They are explanatory, not mandatory.

  3. Recitals cannot override clear operative text: As per Kochada, the recital cannot be used to "cut down" the clear meaning of the decision to find new land.

  4. No ambiguity, no need for recital-based interpretation: As per Bommai, since the operative part is clear, there is no need to resort to the recitals to interpret it. The recital cannot be used to invent a new right for Bravo.

  5. The "pith and substance" is future-looking: As per Bihar Rajya Bhumi Vikas Bank, the core of the resolution is a future action, not a confirmation of past events.

Conclusion: The member "Bravo" is attempting to elevate a background, explanatory recital to the status of a binding operative clause. This is a legally untenable position. The Supreme Court's jurisprudence consistently holds that only the operative part of a resolution creates rights and obligations, and the recitals serve only to explain the context for that decision, especially when the operative part is ambiguous, which it is not in your case.

You can confidently rely on these precedents to assert that the resolution did not, and was not intended to, confirm Bravo's allotment. His claim, if any, must stand on the strength of his original application and the society's rules, not on this resolution.

Lalit Saxena
Advocate, Sonbhadra
81 Answers

 

Only the operative part of a resolution creates binding legal rights; the reasoning or recital part does not.

Supreme Court rulings:

Ram Charan Das v. Girjanandini Devi (AIR 1966 SC 323): Recitals explain intent but have no legal effect unless the operative part is ambiguous.

Mohd. Afzal v. Halima Begum (AIR 1948 PC 168): Operative clause prevails; recitals cannot override or create rights.

In your case:
The line “all members who paid have been given plots” is only reasoning, not an operative decision. The binding part is “to look for new land.” Hence, the member cannot claim allotment based on the recital.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

You have requested a legal opinion regarding the cooperative society resolution in which the reasoning portion states that all members who paid the full amount had been given plots, while the operative portion of the resolution merely directs the society to search for new land to make the society functional again. One member is now claiming that this resolution itself creates an allotment right in his favour, despite the fact that no allotment letter was ever issued to him and he had failed to complete the required documentation at the relevant time.

In law, a clear distinction is always maintained between the reasoning or recital portion of a resolution and the operative or decision-making portion. The recital part explains the background, discussions, and facts leading to the resolution; it does not, by itself, create enforceable legal rights. Only the operative portion – that is, the part of the resolution which actually contains a direction, approval, sanction, grant, allotment, withdrawal or order – has legal effect. Unless the operative part specifically resolves that an allotment is being made, a member cannot derive any legal rights merely from a narrative statement in the reasoning section.

The Supreme Court has consistently held in matters involving contracts, deeds, government orders and resolutions that recitals or background notes are not enforceable unless they are expressly incorporated into the operative clauses. Where there is any inconsistency, the operative portion always prevails. Recitals may be used only for interpretation if the operative part is ambiguous, but they cannot create a substantive right which the operative clause does not grant. The same principle applies to resolutions passed by cooperative societies, companies, government bodies and public authorities.

Applying this principle to your case, the resolution in question did not contain any operative clause allotting a plot to the member. It merely recorded, as part of background reasoning, that except for one person who had not paid in full, other members had been allotted plots. The operative part of the resolution was limited to the decision to look for new land to make the society functional. Since there is no operative direction allotting a plot to the claimant, no enforceable right accrues to him on the strength of that resolution alone.

The claimant would have to show a separate allotment letter, an independent resolution specifically approving his allotment, or some other conclusive act of the society conferring rights upon him. In the absence of such material, his reliance on the recital portion is misplaced and unsustainable in law.

Your defence, therefore, should be based on the following:

  1. The resolution does not contain any operative decision granting him allotment.

  2. The recital cannot be construed as a binding act of allotment.

  3. No allotment letter, possession letter, membership update or plot number was ever issued to the claimant.

  4. The claimant himself was ineligible at the relevant time due to failure to provide mandatory KYC documents, and therefore no right vested in him.

  5. The only legally binding part of the resolution was the decision to locate new land, not to confirm past allotments.

On this basis, you are well-placed to contest the claim and prevent the member from asserting rights that were never granted by the operative part of the resolution.

Yuganshu Sharma
Advocate, Delhi
945 Answers
2 Consultations

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