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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

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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’,

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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

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(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

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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