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PETITIONER: A.V.R. & CO. & ORS.

       Vs.

RESPONDENT: FAIRFIELD COOPERATIVE HOUSING SOCIETYLTD. & ORS

DATE OF JUDGMENT19/09/1988

BENCH: RAY, B.C. (J) BENCH: RAY, B.C. (J) SEN, A.P. (J)

CITATION:  1989 AIR   81            1988 SCR  Supl. (3)  84  1988 SCC  (4) 408        JT 1988 (3)   780  1988 SCALE  (2)813  CITATOR INFO :  R          1989 SC  86  (2,3)  R          1989 SC  87  (2)  D          1990 SC1563  (14)

ACT:     Maharashtra Cooperative Societies Act, 1960-Section  91- Whether  Dispute  filed by Fairfield,  Co-operative  Housing Society  seeking possession flat from licencees fell  within section  91--Whether  section  91  is  ultra  vires  of  the Articles 14 and 19 of the Constitution.

HEADNOTE:     Respondent No. 2, a member of the Fairfield Co-operative Housing  Society, a Tenant Co-partnership Housing  Society-- respondent  No. I--permitted appellant No. I to possess  and occupy as licencee the not allotted to the respondent No.  2 as  a  member of the society, without  the  consent  of  the society and in breach of the bye-laws and Regulations of the Society. The Society filed a dispute against the  respondent No. 2, joining appellants Nos. 1 and 2, the two occupants of the flat as opposite parties, seeking possession of the flat from  all the opponents. The appellants Nos. 1 and  2  filed written statements contesting the dispute, stating that they were in exclusive occupation of the flat as licencees.     The Judge, Co-operative Court made an award in favour of the Society, holding that the respondent No. 2 was a  member of the disputant Society and the appellants Nos. 1 & 2  were not  the members but were claiming through respondent No.  2 and that the dispute, touching the business, management  and constitution  of  the society, fell within   Sec-91  of  the Maharashtra   Co-operative  Societies  Act,  and  that   the respondent No. 2 committed breach of the Bye-laws. Rules and Regulations of the Society.     On  appeal  by the appellants Nos. 1 and 2  against  the award,  the Maharashtra State Co-operative  Appellate  Court held  that the claim for-possession was not affected by  the Bye-laws  and  the  appellants  were  not  entitled  to  the protection  of the Bombay Rent Act. The appellants  filed  a writ  petition  before the High Court  which  dismissed  the same.      Dismissing the appeal. the Court,

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   HELD: The claim of the fappellants as deemed tenants  on                                                    PG NO 84                                                    PG NO 85 the  basis  of  an  agreement  of  leave  and  licence   was untenable. This agreement had been executed by the  licenser respondent No. 2 in favour of Appellant No. 1 for 11 months. It was not renewed. [88E. G-H]     The  appellants 1 & 2 were licensees and  not  statutory tenants.  They were outsiders permitted to possess the  suit premises  as licencees of respondent No. 2 in  contravention of  the Rules, bye-laws and regulations of the Society.  The dispute falls squarely within the provision of Section 91(1) of  the  Act  and  the  Co-operative  Court  has   exclusive jurisdiction to entertain and decide the dispute and not the Court under the Bombay Rent Act. [89E-F]     There  was  no  factual  basis  of  the  allegation   of collusion  between respondents Nos. 1 and 2 and no merit  in the  contention. The Society filed the  dispute  application both  against  its member and the appellants  who  were  the occupants  of the flat to get possession of the flat as  the appellants  were trespassers put in possession  without  the consent of the Society and in breach of its bye-laws,  rules and Regulations. [92D-E]     Section  91(b) is not ultra vires of Articles 14 and  19 of the Constitution. [92F.]     D.H. Maniar &  Ors. v. Waman Laxman Kudav, [1977] I  SCR 403; O.P. Bhatnagar v..Smt. Rukibai Narsindas & Ors.,[1982]3 SCR 681 at 696, referred to.     Deccan   Merchants  Co-operative  Bank  Ltd.   v.   M/s. Dalichand  Jugraj Jain & Ors., [1969] 1 SCR  887;  Sabharwal Brothers  &  Anr.  v. Smt. Cuna Amrit  Thandani  of  Bombay, [1973] 1SCR 53 and I. R. Hingorani v. P.K. Shah & Ors.,  AIR 1972 SC 2161, distinguished.     C.P.  Khanna v. V.K. Kalghatgi & Ors., AIR  1970  Bombay 201 and Rasiklal Patel & Ors. v. Kailasgauri Ramanlal  Mehta JUDGMENT:

&     CIVIL  APPELIATE JURISDTCTION: Civil Appeal No.  472  of 1985     From the Judgment and Order dated 9.8.1983 of the Bombay High Court in Writ Petition No. 1907 of 1983.     V.M.  Tarkunde,  S.K. Dholakia, Y.R. Naik,  K.  Rajendra Choudhary,  K. Shivraj Choudhary, A.M. Khanwilkar  and  A.S. Bhasme for the Appellants.                                                    PG NO 86     U.R.  Lalit,  Girish  Chandra and M.N.  Shroff  for  the Respondents.     The Judgment of the Court was delivered by     B.C.  RAY, J. This Appeal by special leave  is  directed against  the judgment and order dated 9th August 1983 passed in  Writ  Petition  No. 1907 of 1983 by the  High  Court  of Judicature  at  Bombay  dismissing  the  writ  petition  and confirming  the judgments and orders by the Maharashtra  Co- operative Appellate Tribunal made in Appeal No. 280 of  1978 and  by and Co-operative Court, Greater Bombay allowing  the application of respondent Co-operative Society filed   under Sec.  91(1) of Maharashtra Co-operative Societies Act,  1960 directing  eviction  of the respondent No. 2 member  of  the Society  as  well  as the appellants nos. 1 and  2  who  are trespassers  from  its  flat No. 7 in the  building  of  the disputants ’Fairfield.’’ Churchgate Reclamation, Bombay  20. The  facts  giving rise to the present appeal are  that  the

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respondent "Fairfield Co-operative Housing Society" which is a    "Tenant   Co-partnership   Housing   Society’’    under Registration  No. B -1412 of 1955 owned the  suit  premises. The  respondent No. 2 Smt. Vishni J. Kalwani as a member  of the Society was allotted Flat No. 7 in the 1st Floor of  the suit  premises  for  residing therein with  members  of  her family.  The respondent No. 2 permitted the appellant No.  I M/s. A.V.R. and Co. to possess and occupy the said flat as a licencee   without the consent of the Society and in  breach of   bye-laws  and  Regulation  No.  4  of   the   Society’s Regulations  contained in Farm No. A of the  Society’s  bye- laws.  It has been alleged in the dispute  application  that the respondent No. 2 obtained the flat as a member only  for investment purposes and she was profiteering by letting  out the  flat  to  other persons contrary to  the  Bye-laws  and Regulations of the Society. The Society after coming to know of  this position served a notice on March 10, 1973  on  her asking  her  to vacate the flat. In the said notice  it  was alleged that the respondent No 2 parted with the  possession of   the   flat  without  the  Society’s  consent   and   in contravention  of  the  Bye-laws  and  Regulations  of   the Society. The Society also alleged that the occupants of  the flat  were  a  source of nuisance  and  annoyance  to  other members  of  the  society and further that she  had  been  a persistent  defaulter in payment of Societies dues which  by the  date  of  notice had come to  Rs.10,004.38  Paisa.  The notice  sent  to  Respondent  No.  2  was  not  replied  to. Thereafter the Society sent another letter stating all these facts. The respondent No. 2 did not comply with the request. The  Co-operative Society, respondent No. 1,filed a  dispute against the respondent No. 2 who is a member for  possession                                                    PG NO 87 of  the said flat given to her. The Society also joined  the appellant  Nos.  1  and 2. the  two  occupants  as  opposite parties  and sought for possession from all  the  opponents. The Society prayed for an award against the respondent No. 1 Smt. Kalwani for a sum of Rs. 10,004.38 with future interest thereon as mentioned in the dispute application.     The  respondent  No.  2 Smt. Kalwani did  not  file  any written  statement and remained absent. The appellant No.  1 M/s.  A.V.R.  & Co. who was opponent No. 2  in  the  dispute application filed a written statement contending inter  alia that the dispute was barred by jurisdiction as the  opponent No.  1  Smt. Kalwani was a tenant of the Society,  that  the appellant No. 1 was in exclusive occupation of the said flat as  the  licencee  of the respondent No. 2  and  now,  their sister  concern M/s. J.R. Enterprises, the appellant No.  2, were in occupation of the premises as licencees. It was  due to this the Society subsequently impleaded the appellant No. 2  as  opponent  No. 3 in the dispute  application.  It  was further contended that their occupation of the suit premises was  under the leave and licence agreement  which  continued even after 1st February. 1973 and so the appellant No. 2 are protected  under  the  Provisions  of  Bombay  Rent  Act  as amended. They denied that they were causing any nuisance  or annoyance to other members of the Society. They also  denied knowledge about the respondent being a defaulter in  payment of Society’s dues. They contended that the right, title  and interest of Smt. Kalwani were not determined and the Society could  not ask for the possession of the suit Premises.  The appellant No. 2 also filed a written statement adopting  all the  contentions  raised  by the appellant No.  1  in  their written statement.     The Judge, Co-operative Court after hearing the  parties and considering the evidences has made an award in favour of

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the Society holding inter alia that the opponent No. 1 is  a member  of the disputant society, that the opponent  nos.  2 and  3  are  not  their members  but  claiming  through  the opponent  No.  1,  that the dispute  touches  the  business, management  an(l Constitution of the Society,  thus  falling within  Sec.  91 of the Maharashtra  Co-operative  Societies Act.  It  was also held that the opponent  No.  1  committed breach of Bye-laws, Rules and Regulations of the Society  by inducting opponent Nos. 2 and 3 in the suit premises without the  consent  and permission of the society.  The  opponents Nos.  1 to 3 have been directed to hand over  possession  of suit premises to the disputants. The opponent No. 1 was also directed  to  pay  Rs.  10,004.38 p.  to  the  society  with interest  thereto  @  9%  from the date  of  filing  of  the dispute.                                                    PG NO 88     Against this award the appellants nos. I and 2 filed  an appeal  being Appeal No. 280 of 1978 before the  Maharashtra State  Co-operative  Appellate Court. The respondent  No.  1 filed an appeal but she subsequently withdrew the same.  The appellate  Court held that the claim for possession was  not affected by the Bye-laws and the        appellants were  not entitled  to  protection  of  Bombay  Rent  Act.  The  order directing giving possession was upheld with the modification that    award  in  respect  of  possession  shall   become executable  on the disputant Society depositing in Court  or paying  to  Smt.  Kalwani the contribution paid  by  her  in respect of the flat in question.     The appellants filed a Writ Petition under Articles  226 and  227 of the Constitution of India before the High  Court at  Bombay.  The Writ   Petition  No. 1907  of  1983   was dismissed. Hence this appeal by special leave.     It  was firstly urged on behalf of the  appellants  that they  have  been  inducted into possession of  the  flat  as licencee  on the basis of an agreement of leave and  licence and the said agreement of licence is subsisting on 1.2.197-. so they have become deemed tenants under Sec. 15A read  with Sec. 5(4A) of the Bombay Rents Hotel and Lodging House Rates Control  Act, as amended up-to-date. The agreement of  leave and  licence was not filed either in the trial court  or  in the appellate court. It was filed in the High Court It is  a leave  and  licence agreement executed on  1.9.1969  by  the licencee  or  respondent No. 2 in favour of  M/s.  A.V.R.  & Company for a period of 11 months. This agreement of licence was  not  renewed.  Moreover the appellant  No.2  M/s.  J.R. Enterprises  who is in occupation of Suit Premises  has  not produced   any  agreement  of  Licence  inducting  them   as licencees.  Sec. 15A of the said Act which was  inserted  by Maharashtra  Amendment Act No. 17 of 1973 enjoins  that  any person  in  occupation of and premises or any  part  thereof which is not less than a room as a licence on the 1st day of February,  1973  under a subsisting  agreement  of  licence, shall  on that date be deemed to have become tenant  of  the landlord  in respect of the premises in his occupation.  The only witness examined on behalf of the appellant stated that he  had no personal  knowledge about the facts of the  case. No  proceedings  have been taken in any Court to  claim  the status  of  a  perfected tenant nor any  leave  and  licence agreement  has been filed by the appellant No. 2. The  claim of  the appellants as deemed tenants is untenable It may  be noted that the appellants did not urge this point  therefore the  appellate Court. In the case of D. H. Maniar &  Ors.  v Waman  Laxman Kudav, [1977] 1 SCR 403 it has  been  observed that:                                                    PG NO 89

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   In  order  to get the advantage of section  15A  of  the Bombay  Rent Act, the occupant must be in occupation of  the premises  as a licencee as defined in section 5(4A)  on  the 1st  of  February 1973. If he be such a licencee,  the  non- obstante  clause of section 15A(1) gives him the status  and protection  of a tenant in spite of there being anything  to the contrary in any other law or in any contract. But if  he is not a licensee under a subsisting agreement on the 1st of February  1973,  then he does not get the advantage  of  the amended provision of the Bombay Rent Act."     It  was  next  contended  that  the  dispute  cannot  be entertained by the Co-operative Court as the appellants  are not  claiming through the respondent No. 2, who is a  member of  the  Society but claiming as  protected  licencees.  The jurisdiction  of  Co-operative  Court under  section  91  of Maharashtra  Co-operative Societies Act, 1947 is barred  and the  Small Causes Court under section 28 of the said  Bombay Rent Act is competent to entertain and decide the dispute of the  disputants.  We  have  already  held  above  that   the appellants are licencees and not statutory tenants. Sec.  91 of the Maharashtra Co-operative Societies Act, 1960 provides that notwithstanding anything contained in any other law for the   time   being  in  force  any  dispute   touching   the constitution,  business of the Society shall be referred  by any of the parties to the dispute to a Co-operative Court if any of the parties thereto is a member or a person  claiming through a member. The respondent No. 2 is the member of  the Disputant  Society.  The  appellants Nos. 1 and  2  are  not members  of the Society but they as licencees  are  claiming through  the  respondent  No. 2.  The  dispute  touches  the business  of  the Society and it falls within the  ambit  of Section  91 of Maharashtra Co-operative Societies  Act.  The appellant Nos. 1 and 2 are outsiders who have been permitted to possess the suit premises as licencees of respondent  No. 2 in contravention of the Rules, bye-laws and regulations of the  Society.  The  dispute  falls  squarely  with  in   the provision  of Section 91(1) of the Act and the  Co-operative Court has exclusive jurisdiction to entertain and decide the dispute and not the Court under the Bombay Rent Act. Section 28  of the Bombay Rent Act also begins with  a  non-obstante clause and provides that the small causes Court or the Court of  Civil  Judge  (Junior  Division)  shall  have  exclusive jurisdiction  to  entertain and try any suit  or  proceeding between a landlord and a tenant relating to the recovery  of rents  or  possession  of  any premises  to  which  the  Act applies.  The  scope of the provisions of the two  Acts  has been very succinctly stated by this Court in O.P.  Bhatnagar v. Smt. Rukibai Narsindas  & Ors.,  [1982] 3 SCR 681 at 696                                                    PG NO 90 to which one of us (A.P. Sen, J.) was a party as follows:     "In  the  present case, the society is a tenant  of  co- partnership  type housing society formed with the object  of providing residential accommodation to its co-partner tenant members. Now, the nature of business which a society carries on  has  necessarily to be ascertained from the  object  for which  the society is constituted, and it logically  follows that  whatever the society does in the normal course of  its activities such as by initiating proceedings for removing an act  of trespass by a stranger, from a flat allotted to  one of its members, cannot but be part of its business. It is as much  the concern of the society formed with the  object  of providing  residential accommodation to its  members,  which normally  is its business, to ensure that the flats  are  in occupation  of its members, in accordance with the  bye-laws framed  by  it, rather than of a person in  an  unauthorised

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occupation, as it is the concern of the member, who lets  it out  to another under an agreement of leave and licence  and wants  to secure possession of the premises for his own  use after  the termination of the licence. It  must,  therefore, follow that a claim by the society together with such member for ejectment of a person who was permitted to occupy having become a nominal member thereof upon revocation of  licence, is  a dispute falling within the purview of s. 91(1) of  the Act." This Court further observed at p. 697 as follows:     "It seems to us that the two Acts can be best harmonised by  holding  that in matters covered by the  Rent  Act,  its provisions,  rather than the provisions of the  Act,  should apply. But where the parties admittedly do not stand in  the jural  relationship  of landlord and tenant,  as  here,  the dispute would be governed by s. 91(1) of the Act. No  doubt, the  appellant  acquired  a right to occupy the  flat  as  a licensee,  by virtue of his being a nominal member,  but  in the very nature of things, his rights were inchoate. In view of  these  considerations, we are of the  opinion  that  the proceedings under s. 91(1) of the Act were not barred by the provisions of S. 28 of the Rent Act." It  has  been pleaded in the dispute  application  that  the opponent No. 1                                                    PG NO 91 (Respondent No. 2 in this appeal) inducted opponent No. 2 in possession of the said Act in violation of the Bye-laws, and Regulation  No. 4 of the Society’s Regulations contained  in form  A  of  Society’s Bye-laws. On this  pleading  the  Co- operative Court has sole jurisdiction to decide the  dispute under sec. 91 of the said Act as the appellants are claiming as licencees through the member of the Society, the opponent No.  1  according to the provisions of  Sub-section  (b)  of Section 91 of the said Act.     The  Counsel for the appellants cited  Deccan  Merchants Cooperative  Bank  Ltd. v. M/s. Dalichand  Jugraj  Jain  and Ors.,  [ 19691 1 SCR 887 and Sabharwal Brothers and  another v.  Smt. Guna Amrit Thandani of Bombay, [ 1973] 1 SCR 53  in support of the contention that dispute in question does  not come within the parameter of sec. 91 of the said Act.  Those cases  have been elaborately dealt with in Bhatnagar’s  case (supra)  and  it  had been observed that the  ratio  of  the decisions of these two cases are not applicable as the facts of these cases are different from the case in question.  The same  observation is applicable to the instant case. In  the Deccan  Merchant Bank’s case the suit house belonged to  the owner  who  mortgaged the same to the co-operative  Bank  on taking a loan. The tenants in question were inducted in  the ground floor of the said premises after the mortgage by  the owner. Subsequently the Bank acquired the house in execution of  mortgage  decree  and then filed a  dispute  before  the Registrar u/section 91 of the Bombay Co-operative  Society’s Act to evict the tenant and to take possession. It was  held that  this dispute is not within Sec. 91 of the said Act  as the  house  originally  belonged to owner  and  not  to  the Society  Bank  and  the tenants were  inducted  before  Bank purchased   the  same.  In  Sabharwal  Brother’s  case   the disputant  was the owner of the flat on the second floor  of Block  No. 8 "Shyam Niwas" and he let it out to the  tenant. The  purchaser  of the flat who is a member of  the  Society filed  a  claim under Sec. 91  of the said  Act  to  recover possession from the tenant. The Society sold the flat to the disputant member and the disputant is not claiming the  flat qua  member  of the Society. The dispute is not  within  the ambit of Sec. 91 of the said Act.

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   The facts of the case in 1. R. Hingorani v. P. K. Shah & Ors., AIR 1972 SC 2161 are different from the facts of  this case and so the ratio of this decision is not applicable  to the  instant case. The owner of a flat entered into a  leave and  licence  agreement with the  licencee.  Subsequently  a Housing Society was formed and the owner became its  member. In   i963,  the  tenant  applied  for  fixing  his   monthly                                                    PG NO 92 ’copmensation’ (Rent) and in that litlgation the owner moved the Registrar for referring the dispute to arbitrator.     It  was  held,  that when the  owner  entered  into  the agreement with the tenant, he was not acting as a member  of the Society but as the owner of the flat. Hence the case did not  fall  within  Section  91(1)(b)  of   Maharashtra   Co- operative Societies Act.     It was urged that the dispute filed by Respondent No.  1 was a collusive dispute as between respondents Nos. 1 and 2. The  respondent  Nos. 1 and 2 in collusion with  each  other wanted  to evict the appellants Nos. 1 and 2 from  the  suit premises.  No issue was framed about collusion in the  Trial Court  nor  any  evidence was led  to  sub   stantiate  this allegation.  The  only  witness examined on  behalf  of  the appellants admitted that he did not know anything about  the facts of the case. No particulars of the collusion have been pleaded  in the written statement. Moreover this  point  was not  urged  either  before the trial  court  or  before  the appellate  Court. The Society filed the dispute  application both  against  its  member and the appellants  who  are  the occupants  of the flat-in-question to get possession of  the flat  as  the  appellants  are  trespassers  being  put   in possession  without consent of the Society and in breach  of its  bye-laws,  rules  and Regulations.  The  allegation  of collusion  has  not  been pleaded nor proved.  There  is  no factual] basis of this allegation. There is no merit in this contention.     Sec. 91(b) of Maharashtra Co-operative Societies Act has been  assailed as ultra vires of Articles 14 and 19  of  the Constitution. The dispute between a Co-operative Society and a  non-member  claiming through a member of the  Society  as provided  in Section 91(b) of the  Maharashtra  Co-operative Societies  Act  will be decided by the  co-operative  Court. This  classification has got nexus to the object of the  Act namely the Special procedure is applicable only to those non members  claiming  through a member of the Society  as  they form a different class. This classification has a reasonable and rational nexus with the object sought to be achieved  by the  Act. In C.P. Khanna v. V.K. Kalghatgi & Ors., AIR  1970 (Bombay) 201 it has been held that  section 91 is not  ultra vires  of  Articles 14 and 19 of the  Constitution.  Similar view was expressed by Gujarat High Court in Rasiklal Patel & Ors,  v. Kailasgauri Ramanlal Mehta & Ors., [1971] Vol.  XII G.L.R.  355 which held clause (b) of sec. 96 of the  Gujarat Co-operative  Societies Act, 1961 which corresponds to  Sec. 91(b)  of the said Act as valid though clauses (c)(d)(e)  of the section 96 were held as ultra vires.  We agree with  the views  expressed in those judgments and hold that Section  9                                                    PG NO 93 1(b)  is  not  ultra  vires of Articles 14  and  19  of  the Constitution.     No other points have been urged before us.     For  the reasons aforesaid we dismiss the appeal.  There will  be  no  order  as to costs. The  decree  will  not  be executed  for a period of six months from the date  of  this order subject to the appellant’s filing an usual undertaking within  a period of two weeks from today to the effect  that

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the appellant will not transfer, assign or encumber the flat in question in any manner whatsoever and on undertaking that he  will  hand  over  peaceful possession  of  the  flat  in question  to the respondent on or before the expiry  of  the aforesaid  period  and he will go on paying  the  occupation charges equivalent to the amount he had been paying for each month  by  the  7th  of  succeeding  month.  In  default  of compliance  of any of these terms, the decree  shall  become executable  only  on the disputant Society  paying  to  Smt. Vishin J. Kalwani the contribution paid by her in respect of the flat in question. S.L.                                       Appeal dismissed.