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PETITIONER: MARINE TIMES PUBLICATIONS PVT. LTD.

       Vs.

RESPONDENT: SHIRIRAM TRANSPORT AND FINANCE CO. LTD. AND ANR.

DATE OF JUDGMENT26/10/1990

BENCH: KANIA, M.H. BENCH: KANIA, M.H. SAHAI, R.M. (J)

CITATION:  1991 AIR  626            1990 SCR  Supl. (2) 466  1991 SCC  (1) 469        JT 1990 (4)   332  1990 SCALE  (2)854

ACT:       Maharashtra Cooperative Societies Act,  1960:  Section 91 Cooperative Society--Agreement to sell office premises in a  building   owned by the Society between a  member  and  a non-member--Agreement subject to approval of the Cooperative Society--Refusal   of   permission   by   the    Cooperative Society--Reference  of dispute by non-member to  Cooperative Court praying specific performance of agreement and a direc- tion  to  the Society for approval  of  agreement--Claim  of nonmember  whether  a claim against the  Society  through  a member-Dispute    "whether   touching   the   business    of society"--Cooperative  court whether has  jurisdiction  over the dispute.

HEADNOTE:     The appellant company, a member of Cooperative  Society, respondent No. 2, was having its office premises in a build- ing owned by respondent No. 2. It entered into an  agreement to sell the said premises to respondent No. 1, a  non-member subject  to  the approval of the  Cooperative  Society.  The Cooperative Society declined to grant permission for  trans- fer  of  the  premises. Respondent No.  1  filed  a  dispute against  the  appellant  and respondent  No.  2  Cooperative Society  in  the Cooperative Court under section 91  of  the Maharashtra  Cooperative Societies Act, 1960 praying  for  a decree of specific performance of the contract and a  direc- tion  to the Cooperative Society to approve the said  agree- ment.     The Cooperative Court dismissed the dispute for want  of jurisdiction. On appeal by respondent No. 1, the Maharashtra Cooperative  Appellate  Court  set aside the  order  of  the Cooperative  Court.  Against the order  of  the  Cooperative Appellate Court, the appellant filed a writ petition in  the High  Court which was dismissed by holding that the  dispute was governed by Section 91 of the Act.     In the appeal to this Court against the Judgment of  the High Court, it was contended on behalf of the appellant that the dispute between the parties was not governed by  Section 91 since it was neither a dispute "touching the business  of the society" nor was it a dispute between a person  claiming through a member against the society.

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467     Allowing  the appeal and setting aside the  judgment  of the High Court, this Court,     HELD: 1. Before a dispute can be referred to a  Coopera- tive Court under the provision of section 91(1) of the  said Act it is not only essential that the dispute should be of a kind  described in sub-section (1) of section 91 but  it  is also  essential  that the parties to the said  dispute  must belong to any of the categories specified in clauses (a)  to (e) of subsection (1) of the said section. [473B]     2. In the instant case the main claim of Respondent  No. 1 a nonmember, was for a decree for specific performance  of the  agreement. The prayer for an order that respondent  No. 2-Society  should be directed to give their approval to  the said  agreement was merely an ancillary prayer made  with  a view  to  complete the relief of specific  performance.  The main  claim  to have the  agreement  specifically  performed cannot  be said to be a claim made by a person  (non-member) against the Society. The claim against the society cannot be said to be made through a member, the appellant, because  it is only when a decree for performance of the said  agreement is passed against the appellant, that it could be  contended that  the  other relief namely, for an order  directing  re- spondent  No.  2 to approve the said  agreement  is  claimed against  the  society through a  member.  Consequently,  the dispute  cannot be said to fall within the scope of  section 91(1)(b) of the Act. Therefore, the High Court committed  an error  in coming to the conclusion that both the parties  to the dispute belonged to the categories covered under section 91(1)(b) of the Act. [473E-H; 474A]     Deccan Merchants Cooperative Bank Ltd. v. M/s  Dalichand Jugraj  Jain  and Ors., [1969] 1 S.C.R. 887; M/s  Leong  and Anr.  v.  Smt. Jinabhai G. Gulrajami and Ors.,  A.I.R.  1981 Bom. 244 and Sanwarmal Kejriwal v. Vishwa Cooperative  Hous- ing Society Ltd. and Ors., [1990] 2 SCC 288, distinguished.     O.N. Bhatnagar v. Smt. Rukibai Narsindas & Ors.,  [1982] 3 S.C.R. 681, referred to.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 4979  of 1990.     From  the  Judgment  and Order dated  25.8.1989  of  the Bombay High Court in W.P. No. 6058 of 1986. 468 V.M. Tarkunde, D.R. Poddar and V.B. Joshi for the Appellant.     K.P.  Parasaran (N.P.), Rama Subramaniam, A.K.  Ganguli, R.P. Bhat, K. Swamy and A.S. Bhasme for the Respondents. The Judgment of the Court was delivered by KANIA, J. Leave granted. Counsel heard.     This is an appeal from the judgment of a learned  Single judge of the Bombay High Court dismissing Writ Petition  No. 6058 of 1986 filed by the appellant on the Appellate Side of that Court. The appellant and respondent No. 1 are companies incorporated under the Indian Companies Act. ReSpOndent  No. 2 is a Cooperative Society registered under the  Maharashtra Cooperative Societies Act, 1961 (hereinafter referred to  as "the said Act"). Appellant is a member of respondent No.  2- Cooperative  Society  and  has its office  premises  in  the building  owned  by  respondent No. 2. Some  time  prior  to September  10, 1985 the appellant entered into an  agreement to sell the said office premises to respondent No. 1 subject to  the approval of respondent No. 2. The terms of the  said agreement were incorporated in a letter dated September  10,

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1985 addressed by the appellant to the Vice-Chairman and the president  of respondent No. 1: It was set out in  the  said letter that the price for the said premises was to be calcu- lated  at the rate of Rs. 2,000 per square feet. The  letter further stated: "We  are agreeable to sell you the same subject to  approval of the Cooperative Society owning the building. We  shall  provide you vacant possession and hand  over  the same  free  of all incumbrances only after we  are  able  to obtain alternate accommodation for our company  .....  ".     A  sum of Rs. 50,000 was paid by a demand draft  by  re- spondent No. 1 to the appellant under the said agreement. By a  letter dated November 15, 1985 the appellant  sought  the approval  of  respondent No. 2 to the transfer of  the  said office  premises  to respondent No. 1. By its  letter  dated November 18, 1985 addressed to the appellant, respondent No. 2 stated that the appellant was requested to offer to trans- fer  of  the said. premises to the existing members  of  the society  as a first preference as per the established  prac- tice  of  the society. It further stated that  in  case  the existing members of respondent No. 2 were not willing to buy the said premises, the premises could be given for trans- 469 fer  to an outside transferee. By its letter dated  November 22, 1985, addressed to respondent No. 1 the appellant point- ed  out that respondent No. 2 had declined to grant  permis- sion for transfer unless the premises were first offered  to the existing members of the society by Way of a first  pref- erence. The said letter then stated that it was not possible to  continue negotiations any further. Along with  the  said letter  the demand draft of Rs.50,000 referred to above  was returned  by the appellant. Without any further  correspond- ence  respondent  no. 1 filed a dispute in  the  Cooperative Court No. 17 Bombay against the appellant and respondent No. 1  by statement of claim which can be conveniently  referred to as a plaint.     In the plaint respondent No. 1 inter alia stated that on the  promises and representations made by the  appellant  to respondent  No.  1 it had paid a sum of Rs.2,60,000  to  one I.M.  Choksey  representing himself as the Chairman  of  the appellant and one S. Ramakrishnan, claiming to be the repre- sentative  of his wife who was a Director of the  appellant. Respondent No. 1 further claimed that it had paid a  further sum  of  Rs.40,000 in cash to the appellant  without  taking a  .receipt. Respondent No. 1 urged that but for the  assur- ance  given by Choksey and Ramakrishnan acting on behalf  of the  appellant and one Col. G.D. Hadep, acting on behalf  of respondent  No. 2 that the appellant would be in a  position to  transfer the said premises by the end of  November  1985 and  respondent  No. 2 would not object  to  such  transfer, respondent  No. 1 would not have paid such a huge amount  to the  appellant.  Respondent No. 1 further  stated  that  the appellant and respondent No. 2 had promised respondent No. 1 that they would complete the formalities of transfer of  the said premises within a few days and there would be no objec- tion or obstruction whatever in the said transfer.  Respond- ent  No.  1 went on to say that it was given  to  understand that  the appellant and respondent No. 2 were conspiring  to sell the said premises to a third party for a larger amount. Respondent  No. 1 was ready and willing to perform its  part of  the contract and prayed for an order for  specific  per- formance of the contract. The relevant portion of  paragraph 10  of the plaint, which deals with jurisdiction,  sets  out that respondent No. 2 is a cooperative society and is vital- ly interested in the transfer and sale of the said  premises

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and to ensure that the transfer is done under the provisions of its bye-laws, the said Act and the rules. Respondent  No. 2 had taken active part in the transaction entered into  be- tween respondent No. 1 and the appellant who _is a member of respondent No. 2, and that respondent No. 1 was claiming his rights through the appellant who was a member and hence, the subject  matter  of  the dispute fell within  the  ambit  of section 470 91  of the said Act. Respondent No. 1 prayed for a  declara- tion that the aforesaid dispute was a dispute falling  under section 91 of the said Act and prayed that the appellant and respondent No. 2 should be directed to specifically  perform the  agreement recorded in the letter of September 10,  1985 and transfer the said premises to respondent No. 1. The rest of  the  prayers in the plaint are immaterial for  our  pur- poses.     Pursuant to certain orders made by the Bombay High Court the  Cooperative Court framed an issue as to whether it  had jurisdiction  to entertain the dispute. The  Court  recorded evidence  led  by respondent No. 1 off this issue  and  dis- missed the dispute for want of jurisdiction. This order  was set  aside by the Maharashtra Cooperative  Appellate  Court, Bombay, by its order dated September 9, 1986. The  appellant herein filed a writ petition in the High Court to  challenge the said order. The learned Single Judge who heard the  said writ petition dismissed the same and held that the case  was governed  by the provisions of section 91 of the said  Act.; It is this decision which is sought to be challenged  before us by the appellant.     It is submitted by Mr. Tarkunde, learned counsel for the appellant that the agreement to sell the said premises  with which we are concerned, was entered into between the  appel- lant,  a member of respondent No. 2, a  Cooperative  Society and  respondent No. 1, a nonmember. The said  agreement  was for  transfer  of  premises belonging to  the  appellant  to respondent  No.  1,  a non-member, in a  building  owned  by respondent  No. 2, a cooperative society. The claim  in  the dispute  was for obtaining the specific performance  of  the said agreement and the prayer for directing respondent No. 2 to approve the said agreement was in the nature of an ancil- lary prayer to complete the relief. The main relief was  for specific performance of the said agreement. It was submitted by  him that such a dispute cannot be said to be  a  dispute "touching  the management or business of a society" as  con- templated  in sub-section (1) of section 91 of the said  Act nor  can it be said that respondent No. 1, a non-member  was making  a claim against respondent No. 2-society  through  a member,  namely, the appellant. The main relief  sought  was for specific performance of an agreement by a member to sell the  premises  in the society building to a non  member  and such a claim can never be said to be made against the socie- ty through a member.     In  order  to  appreciate the submissions  made,  it  is desirable  to set out the material portion of Section 91  of the said Act which runs as follows: 471 "91(1)  Notwithstanding anything contained in any other  law for  the time being in force, any dispute touching the  con- struction, elections of the office beares. conduct of gener- al  meetings, management or business of a society  shall  be referred  by  any  of the parties to the dispute,  or  by  a federal  society to which the society is affiliated or by  a creditor of the society to the Cooperative Court if both the parties thereto are one or other of the following:

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(a) x      x      x      x      x      x      x (b)  a  member, past member or a person claiming  through  a