PETITIONER: SABHARWAL BROTHERS & ANOTHER Vs. RESPONDENT: SMT. GUNA AMRIT THANDANI OF BOMBAY DATE OF JUDGMENT29/03/1972 BENCH: MITTER, G.K. BENCH: MITTER, G.K. GROVER, A.N. CITATION: 1972 AIR 1893 1973 SCR (1) 53 CITATOR INFO : D 1982 SC1097 (21,22) D 1989 SC 81 (8) D 1989 SC 122 (11) ACT: Cooperative Society ---Flat sold to member by Society --Member letting out flat to another member-Dispute between landlord and tenant as to continuance of tenancy-Such dispute whether touches business of society whether can be referred to Registrar for adjudication under s. 91(1)(b) of Maharashtra Cooperatives Societies Act 1960 (24 of 1961). HEADNOTE: The respondent was the owner of the flat on the second floor of a Building in Bombay. She was a member of a Co-operative Housing Society and had acquired the flat from that society. In 1959 she had put the appellant in possession of the flat for a period of 11 months on payment of Rs. 5101- per month. According to the written agreement the possession was given on leave and licence basis. The government was signed by one of the partners of the appellant firm who also became members of the said Co-operative Society. The agreement was renewed until 25th October, 1962 when the first respondent asked the appellants to vacate possession on the ground that she required the flat for personal occupation. As this was not complied with she filed a statement of claim before the Registrar of Co-operativc Societies on the ground that there was a dispute within the meaning of s. 91(1) of the Maharashtra Co-operative Societies Act. The Registrar referred the case to a nominee whose jurisdiction was challenged by the appellants. Nevertheless the proceedings before the nominee went on for some time and on July 3, 1964 the nominee made an award to the effect that the appellants were occupying the flat on leave and licencee basis. The appellants, anticipating the award, filed a suit in the Court of Small Causes Bombay stating that they were in occupation of the flat as tenants and as such entitled to protection under the Bombay Rent Act, 1947. The Small Causes Court held that the suit was maintainable and answered the other preliminary issues in favour of the plaintiff. In revision the bench of the Small Causes Court held that the Registrar's nominee did have jurisdiction to try the dispute between the parties and remanded the proceedings to the trial court for disposal of the suit after deciding an issue as to res judicata by reason of the award of the nominee. The High Court up-held the order of the bench. In this Court the questions that fell for consideration were (1) Whether there was any dispute between the parties touching the business of the co-operative society which could be decided by the Registrar or referred by him to a nominee for disposal and (2) Whether the suit filed in them Small Causes Court was maintainable having regard to the nature of the relief sought. Allowing the appeal HELD : (i) No doubt it was a business of the society to let out premises and a member had no unqualified right to let out his flat or tenement to another by virtue of the bye- laws and a breach of the byelaws could affect the defaulting member's right to membership. But HELD : (i) No doubt it was a business of the society to let Out touch the business of the society which included inter alia the trade of buying, selling, hiring and letting land in accordance with cooperative principles. The letting of flat by respondent No. 1 was a transaction of 54 the same nature as the society it if was empowered to enter into but such letting out itself did not concern the business of the society in the matter of its letting out flats. There was nothing to show that such letting would effect the business of the society once it had sold the flat to the respondent No. 1. The position might have been different if the latter had himself been a tenant of the flat under, the society. "To touch" means "to corn-- in contact with" and it did not appear that there was a point of contact between a letting by the respondent No. 1 and the business of the society when the society was not itself the land lord of the flat. [57D-G] (ii) As observed by this Court in an earlier case the Bombay Rent Act and the Maharashtra Cooperative Societies Act can be harmonised best by holding that in matters covered by the Rent Act, its provisions rather than the provisions of the Co-operative Societies Act, should apply. [58A] Deccan Merchants Co-operative Bank Ltd. v. M/s, Dalkhand Jugraj Jain and others, [1969] 1 S.C.R., 887, distinguished. JUDGMENT:
CIVIL APPELLATE JURISDICTION: C.A. No. 1574 of 1971.
Appeal by special leave from the judgment and order dated
July 6/7, 1971 of the Bombay High Court in Special Civil
Application No. 619 of 1971.
S. V. Gupte and P. N. Tiwari, for the appellants.
K. S. Chawla, S. N. Mishra and S. S. Jauhar, for the
respondents.
The Judgment of the Court was delivered by
Mitter, J. -This is an appeal by special leave from a
judgment and order of the Bombay High Court in a Special
Civil Application from a decision. of the Court of Small
Causes Bombay in exercise of its revisionary jurisdiction.
The revisional court had reversed the decision of the trial
court and remanded the matter for disposal ,of the issues
other than issues 2 to 8 tried as preliminary issues and
decided in favour of the plaintiffs before the Court of
Small Causes.
The facts are as follows. Respondent No. 1 was the owner of
a flat on the second floor of Block No. 8 ‘Shyam Niwas’,
Warden Road, I Bombay. She was a member of a Co-operative
Housing Society and had acquired the flat from the said
society. In 1959 she had put the appellant Sabharwal
Brothers in possession of the flat for a period of 11
months on payment of Rs. 510/ – per month. There was an
agreement in writing which purported to show that the
possession was to be on leave and licence basis. This
agreement was signed by a partner of Sabharwal Brothers who
also became member of the said Co-operative Society. There
were repeated renewels of the said agreement until 25th
October, 1962 when the first respondent asked the appellants
to vacate possession on the ground that she required the
flat for her personal occupation. As this was not complied
with, she filed a statement of claim before the Registrar of
Co-operative Societies on the ground that there was
55
a dispute within the meaning of s. 91(1) of the Maharashtra
Co-operative Societies Act (Thereinafter referred to as the
‘Act’) which required adjudication There was a challenge to
the jurisdiction of the nominee of the Registrar to whom it
was referred by the appellants. The proceedings before the
nominee went on for some time on July 3, the nominee made an
award to the effect the, appellants were occupying the flat
on leave and licence basis. Anticipating the award the
appellants filed a suit in the Court of Small Causes Bombay
stating that they were in occupation of the flat as tenants
and as such entitled to protection under the Bombay Rent
Act, 1947 and the first respondent had no right to evict
them. In her written statement the defendant denied that
the plaintiffs were tenants contending, inter alia, that the
plaintiffs were occupying the flat only on leave and licence
basis etc.; that the dispute between the parties had been
referred to the Registrar of Co-operative Societies for
disposal and finally that the Court of Small Causes had no
jurisdiction to entertain and try a suit involving such a
dispute. The Small Causes-Court framed no less than twelve
issues of which issues 2 to 8 related to the maintainability
of the suit and the jurisdiction of the court in view of the
provisions of s. 91 (1) (d) of the Act. The Small Causes
Court held that the suit was maintainable and answered the
other preliminary issues in favour of the plaintiff. The
matter was taken in revision to a Bench of the said Small
Causes Court. The Bench took a different view holding that
the Registrar’s nominee did have jurisdiction to try the
dispute between the parties and remanded the proceedings to
the trial court for disposal of the suit after deciding on
issue as to res judicata by reason of the award of the
nominee.
The High Court dismissed the Special Civil Application of
the plaintiffs holding that the revisional court of the
Small Causes was justified in coming to the conclusion that-
it was not open to the plaintiffs to contend that the
Registrar or his nominee had no jurisdiction to entertain
the dispute on the two grounds on which it was challenged.
Before us the main points urged on behalf of the appellants
were: first, whether there was any dispute between the
parties touching the business of the Co-operative Society
which could be decided by the Registrar or referred by him
to a nominee for disposal; and, secondly whether the suit
filed in the Small Causes Court was maintainable having
regard to the nature of the relief sought.
The central question, therefore,.is, whether the dispute
between the parties is capable of reference under the Act.
The relevant portion of s. 91 (1 ) (b) of the Act runs as
follows
(1) Notwithstanding anything contained in any other law for
the time being in force, any dispute touch
56
ing the constitution ..management or business of a society
shall be referred by any of the parties to the dispute….
if both the parties thereto are one or other of the
following:–
(a)………………………………………….
(b) a member, past member or a person claiming through a
member etc…”
s. 91(3) provides :
“Save as otherwise provided under subsection (3) of section
93, no court shall have jurisdiction to entertain any suit
or other proceedings in respect of any dispute referred to
in sub-section (1).
We may also note the relevant portion of s. 163 (1) which
provides:
I ) Save as expressly provided in this Act, no civil or
revenue court shall have any jurisdiction in respect of-
(a)
(b) any dispute required to be referred to the Registrar,
or his nominee
(c)
Before the Court of Small Causes reference was made to bye-
law No. 2 of the Society to show that the objects of the
society were inter alia to carry on the trade of
buying,selling, hiring and letting land in accordance with
the co-operative principles and under Regulation No. 5 in
form ‘A’ printed at the end of the bye-laws
“No tenant shall assign, underlet, vacate or
part with the possession of the tenement or
any part thereof without the consent in
writing of the society.”
The Bench of the Court of Small Causes referred to the above
provisions and observed that the bye-laws of the society
constituted an agreement between the members of the society
and a breach thereof would affect the defaulting member’s
right of membership of the society and consequently a
dispute relating to the letting of the flat was a dispute
which touched the business of the society.
57
(Mitter, J.)
The High Court referred to s. 91 of the Co-operative
Socities Act. and S. 28 of the Bombay Rent Act and observed:
“There is a competition between two
authorities, a court and the Registrar’s
nominee, both exercising exclusive
jurisdiction in respect of matters coming
within their jurisdiction.”
and concluded that on general principles of law it would not
be proper to allow the same question to be agitated again
under a different guise. It also observed that the decision
taken by the Assistant Registrar and the nominee could have
been decided by an appeal and as no appeal had been filed
the provisions of law must have their effect with the result
that the decision of the dispute by the nominee of the
Registrar had become final.
With all respect to the High Court, it seems to us that
there was a fundamental error in the above approach. No
doubt it was the business of the society to let out premises
and a member had no unqualified right to let out his flat or
tenement to another by virtue of the bye-laws and a breach
of the bye-laws could affect the defaulting member’s right
to membership. But we are not able to see how letting by a
member to another member would touch the business of the
society which included inter alia the trade of buying,
selling, hiring and letting land in accordance with co-ope-
rative principles. The letting of flat by respondent No. 1
was a transact-ion of the same nature as the society itself
was empowered to enter into but such letting by itself did
not concern the business of the society in the matter of its
letting’ out flats. Nothing was brought to our notice to
show that such a letting would affect the business of the
society once it had sold the flat to the respondent No. 1.
The position might have been different if the latter had
himself been a tenant of the flat under the society. “To
touch” means “to come in contact with” and it does not
appear that there is a point of contact between a letting by
the respondent No. 1 and the business of the society when
the society was not itself the landlord of the flat.
Reference was made at the Bar to Deccan Merchants Co-opera-
tive Bank Ltd. v. M/s Dalichand Jugraj Jain and others(,’).
The facts there were very different from those of the
instant case.
(1) [1969] 1 S.C.R. 887.
5-LI208 Sup C I/72
58
But the Court had to consider the question of competing
jurisdiction under the Bombay Rent Act and the Act and it is
pertinent to note the observations at p.902″that the two
acts can be harmonised best by holding that in matters
covered by the Rent Act, its provisions, rather than the
provisions of the Act, should apply.”
In the result we allow the appeal, set aside the judgement
and order of the High Court And of the Bench of the Court of
Small Causes. The matter is now to go back to the Court of
Small Causes for disposal according to law. The appellants
will have the costs incurred in this Court.
Appeal allowed.
G.C.
59