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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

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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

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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

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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.