PETITIONER: M/S ELECTRICAL CABLE DEVELOPMENT ASSOCIATION Vs. RESPONDENT: M/S ARUN COMMERCIAL PREMISES COOPERATIVE HOUSING SOCIETY LTD DATE OF JUDGMENT: 06/05/1998 BENCH: A.S. ANAND, S. RAJEDNRA BABU ACT: HEADNOTE: JUDGMENT:
J U D G M E N T
Rajendra Babu, J.
This appeal is preferred by a Company incorporated
under the Companies Act. The claim of the appellant is that
an association which was an unregistered body known as
“Indian Cables Maker’s Association” was inducted in the year
1969 as a tenant in the premises Room No. 503, 5th floor,
Arun Chambers, Tardeo, Bombay by respondent No. 2 under an
agreement termed as ‘leave and licence’ dated 23rd
September, 1969 at a rental of Rs. 1500/- p.m. out of which
Rs. 1000/- was towards the premises and rent of Rs. 500/-
p.m. was payable towards furniture and fixtures; that the
name of the appellant was changed from Indian Cable Maker’s
Association into M/s Electrical Cable Development
Association also another un-registered body in the month of
August 1972 and with the said association also a similar
leave and licence’ agreement was executed by the respondent
No. 2 on a rental of Rs. 1750/- p.m. out of which rent of
Rs. 1,000/- was towards the premises and Rs. 750/- towards
fixtures and furniture; that in the year 1976 the
unregistered body decided to convert itself in to a company
in order to carry on its affairs more effectively and so
registered as such under the Companies Act, 1956; that
respondent No.2 continued to receive rents from appellant in
respect of the said premises. The appellant had also been
using parking space in the building in question and had been
making regular payments to respondent No.1 Society; that the
appellant filed a suit for declaration in the year 1981 in
the Court of Small Causes at Bombay that they are tenants in
respect of the suit premises; that the second respondent
filed as suit bearing No. 210/296 of 1981 seeking for
eviction of the appellant; that when those proceedings were
pending, Respondent No. 2 egged upon respondent No.1 to
raise a dispute in terms of Section 91 of the Maharashtra
Co-operative Societies Act, 1960 (hereinafter referred to as
“the Act”) for the purpose of evicting the appellant to
enable respondent No.2 to get the said premises and use
personally through an arbitrator; that the Arbitrator made
an award on 23.3.1990 directing eviction of the appellant
and that the second respondent be directed to use the suit
premises personally; that the appellant filed an appeal
against the said award before the Maharashtra State Co-
operative Appellate Court which was further dismissed by on
order made on 8.1.1991; that a writ petition was thereafter
preferred under Article 227 of the Constitution before the
High Court of Bombay; that by an order made on 2.4.1991 the
High Court upheld the order made by the Maharashtra State
Co-operative Appellate Court and dismissed the writ petition
however giving time to the appellant to vacate the premises
by about a month. Hence this appeals by special leave.
On 20th August, 1991, this Court made an order calling
for a report from appellate court after giving an
opportunity to the appellant to examine such of its
witnesses as are considered necessary to prove the receipts
and the agreement and allow the respondent also a similar
opportunity of rebuttal by leading evidence both oral and
documentary. A report has been received by this Court
pursuant to the said order. The findings recorded by the
appellate court and against the appellant.
Shri Mukul Rohtagi, learned Senior advocate for the
appellant contended that (1) the dispute between the
appellant and the second respondent arising under the Bombay
Rent Act is pending consideration in a court of competent
jurisdiction and, therefore, the authorities exercising
powers under Section 91 of the Maharashtra State Co-
operative Societies Act could not exercise their
jurisdiction in the matter; (2) that the finding recorded by
the appellate court and affirmed by the High Court that the
appellant-Company is a distinct legal entity which came into
existence in 1976 and is in occupation of suit premises
without any agreement of leave or licence is incorrect
inasmuch as the appellant company is only a successor to the
two un-registered bodies referred to earlier; and (3) that
the finding recorded by the appellate court pursuant to the
directions issued by this Court on 20th of August, 1991 are
not correct.
Section 91 of the Act provides for raising a dispute
inter alia touching upon the business of a cooperative
society. when a question was raised as to where a society
builds houses of the members and such members let out the
premises, whether it would be within the scope of business
of the society, this Court in O.N. Bhatnagar vs. Ruki Bai
(1982 (2) SCC 244), answered the same. It was held that if
the business of the Society is to construct or buy houses
and let them out to it s members, such letting out would
form part of its business. A society formed with the object
of providing accommodation to its members which is its
normal business activity and has to ensure that the premises
are in occupation of its members in accordance with the bye-
laws framed by it rather than of a person in unauthorised
occupation as it is the concern of the members who let it
out to another under an agree to leave an licence and wants
to secure possession of the premises for his own use after
the termination of the licence. Therefore, a claim by the
Society together with such member for ejectment of a person
who was permitted to occupy, upon the revocation of a
licence, is a dispute falling within Section 91(1) of the
Act. The same view has been reiterated by this Court in
Samwanwal kejrwal vs. Vishal Cooperative Housing Society
Ltd. and Others [(1990) 2 SCC 288]. Therefore, it would not
be open to the appellant now to contend that the proceedings
before the authorities functioning under Section 91 of the
Act would be barred notwithstanding the proceedings filed by
respondent No. 2 before the small causes Court. As held by
this Court in the aforesaid decisions the proceedings under
the Act could be maintained and , therefore, we are of the
view that the first contention raised by Shri Rohtagi
deserves to be rejected.
Plethora of material was placed before the authorities and
we were also taken through the same to show that there was
in existence an unregistered body known as M/S Electrical
Cable Development Association and also M/S Indian Cable
Maker’s Association, its predecessor. However, there is no
material on the record to show that the appellant is the
successor to such association. We have also carefully gone
through the Memorandum of Association and the Articles of
the appellant-Company to find out whether in any form the
unregistered body has converted itself into a registered
body as a Company. On the other hand, what is stated in
clause 3(a) in regard to membership is as follows:-
“3 (a) Every person who shall be a
member of the unregistered
association known as “Electrical
Cable Development Association” at
the date of registration of this
Association shall be entitled as of
right to be admitted as a member of
this Association on his submitting
a formal application addressed to
the Secretary of the Association
agreeing to be bound by the Rules
and Regulations and Bye-laws made
under these presents. Such a fee
but shall have to pay deposit as
per Rule 5, within the period as
may be prescribed and extended by
the Executive Committee.”
All that is provided under the said Article is that
member of Electrical Cable Development Association as of
right be admitted as a member of the appellant Company
subject to certain conditions. It does not say that all
those members in the unregistered association became members
of the association much less any resolution is produced
before us of the Electrical Cable Development Association to
show that they are converting themselves into an
incorporated body. The members of the unregistered body are
all incorporated bodies having a high commercial standing in
the corporate sector, and therefore, cannot be expected to
be so have or ignorant as not to take such steps in the
event it was the intention of such body to become an
incorporated body in the manner suggested by the appellant.
If really such action had been taken, it would not have been
difficult for the appellant to produce such material.
Therefore, the fact that the appellant is a distinct legal
entity as found by the authorities below and affirmed by the
High Court, cannot be seriously disputed. Since the
appellant is a distinct legal entity other than the
unregistered bodies and there is no material to show that it
is a successor thereto it is not understandable a sot how it
became a tenant in respect of the premises in question,
without an agent with the Society or respondent No. 2 who is
a member thereof. it baffles us and thus the view taken by
the High Court appears to us to be correct. Therefore, the
second contention raised by the appellant either has no
merit and is rejected.
So far as the third contention urged on behalf of the
appellant is concerned in the view we have taken, we may at
once state that it is not necessary to examine the evidence
adduced before the appellate court and the appreciation of
the same by it. Even without deciding the same if we assume
the same for the purpose of appreciation of the matter that
the findings recorded by the appellate court are not correct
and deserve to be answered in favour of the appellant, still
the appellant has to fail in view of the finding we have
recorded on the second contention raised by the appellants.
Therefore, we hold that the High Court was justified in
not interfering with the order made by the appellate court
and the appeal deserves to be dismissed. The appeal is
dismissed accordingly. However considering the nature and
circumstances of the case, we make no order as to costs. In
the circumstances of the case, we make no order as to costs.
In the circumstances of the case, we grant time to the
appellant to vacate the premises till 31st of December, 1998
subject to the condition that it shall voluntarily, without
putting the respondents to the necessity of any execution
deliver vacant possession of the premises to respondent No.2
and shall furnish the usual undertaking to that effect
within four weeks from today.
