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Kalawati Ramchand Malani Vs. Shankarrao Patil - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 1699 of 1969
Judge
Reported in(1974)76BOMLR718; 1974MhLJ908
AppellantKalawati Ramchand Malani
RespondentShankarrao Patil
DispositionAppeal allowed
Excerpt:
maharashtra co-operative societies act (mah. xxiv of 1961), sections 91, 2 (16), 9, 12--bombay rents, hotel and lodging house rates control act (bom. lvii of 1947), section 28--maharashtra co-operative societies rules, 1961, section 10, item 5--dispute between member of co-operative housing society and his licensee--whether such dispute falls within section 91, mah. act xxiv of 1961- member, whether tenant of society--transfer of property act (iv of 1882), section 105--building societies act, 1962 [10 & 11 eliz. ii, ch. 37], section 93--friendly societies act, 1793 [33 geo. iii, ch. 54].;a dispute between a member of a co-operative housing society and his licensee with regard to the possession of flat does not fall within the four corners of section 91 of the maharashtra co-operative.....deshpande, j.1. respondent no. 7, hereinafter referred to as 'the society' defendant no. 3 is a housing society registered under the maharashtra cooperative societies act (hereinafter referred to as 'the act') as a tenant co partnership type of housing society. the petitioner, hereinafter referred to as 'the disputant or licensor' is a member of the said society. respondents nos. 5 and 6 are hereinafter referred to as ' defendants nos. 1 and 2 or licensees' and are not the members of the society. cousin of the disputant one mrs. gool chugani purchased flat no, 26 on the 5th floor of the building of this society and held it as a member thereof. defendants nos. 1 and 2 obtained the said flat on leave and licence basis from her in the year 1964.- defendant no. 2 is the proprietor of.....
Judgment:

Deshpande, J.

1. Respondent No. 7, hereinafter referred to as 'the Society' defendant No. 3 is a Housing Society registered under the Maharashtra Cooperative Societies Act (hereinafter referred to as 'the Act') as a tenant co partnership type of Housing Society. The petitioner, hereinafter referred to as 'the disputant or licensor' is a member of the said Society. Respondents Nos. 5 and 6 are hereinafter referred to as ' defendants Nos. 1 and 2 or licensees' and are not the members of the Society. Cousin of the disputant one Mrs. Gool Chugani purchased flat No, 26 on the 5th floor of the building of this Society and held it as a member thereof. Defendants Nos. 1 and 2 obtained the said flat on leave and licence basis from her in the year 1964.- Defendant No. 2 is the proprietor of defendant No, 1 concern. In the month of January 1966 Mrs. Gool transferred her membership and right, title and interest in the society and the flat in dispute to the disputant. After revoking licence the disputant raised a dispute by an application dated September 1, 1967 before the District Deputy Registrar, Co-operative Societies, Bombay, and claimed possession of the flat and arrears of compensation from defendants Nos. 1 and 2. The Society also was impleaded as defendant No. 3.

2. Defendants Nos. 1 and 2 claimed tenancy of the suit premises alleging further that it was created with the consent of the Society. Existence of any dispute under Section 91, of the Act and the jurisdiction of the Registrar or Ms nominee, Officer on Special Duty, and propriety of impleading the Society as defendant No. 3 was also challenged.

3. When the matter came before the Officer on Special Duty for decision on the preliminary point as to the existence of the dispute and application of Section 91 of the Act, he upheld the claim of the disputant by his order dated February 14, 1968. Revisions by defendants Nos. 1 and 2 to the Registrar, Co-operative Societies was rejected but further revision to the State Government was allowed and defendant's plea was accepted by order dated July 5, 1969. It is the legality of this order that is challenged in this Special Civil Application under Articles 226 and 227 of the Constitution.

4. The grievance of Dr. B.R. Naik, the learned advocate appearing for the petitioner, in regard to the order dated July 5, 1969 of the Government in revision is well founded. Government has assumed without any evidence that defendants Nos. 1 and 2 were the tenants of the premises and, therefore, the Court created under the Rent Act alone was competent to try the dispute. Admittedly no evidence has been, recorded and revisions were preferred against the order passed at preliminary stage without any opportunity to parties to prove their respective cases. The order of the State Government, therefore, is liable to be quashed.

5. The real question that falls for consideration in this case is whether a dispute like the one raised in this case by a member of a Society against her licensee for possession of the flat in the Society is covered by Section 91 of the Act and whether the Registrar or his nominee, the Officer on Special Duty, is competent to try and dispose of such dispute 1 Admittedly, defendants Nos. 1 and 2 are not members of the Housing Society. Apart from their claim of being tenants of the premises, the question of existence of dispute attracting Section 91 of the Act and consequently the jurisdiction of the Officer on Special Duty at this initial stag) shall have to be determined by reference to the averments in the application raising the dispute. The disputant herself avers that opponents Nos. 1 and 2 are her licensees. If on these averments by itself Section 91 is found to be inapplicable and the Officer on Special Duty is found to have no jurisdiction, any further question of inquiring into the plea of defendants Nos. 1 and 2 as being the tenants of the premises in dispute cannot arise. Mr. Dhanuka, the learned advocate appearing for defendants Nos. 1 and 2, stoutly opposes the trial of this case by the Officer on Special Duty in view of the averments in the plaint itself.

6. Section 91 was interpreted by this Court broadly in the case of I.R. Hingorani v. Pravinchandra : (1965)67BOMLR306 and it was held that even a dispute between a member of Co-operative Society and his licensee with regard to the possession of the flat in the Society was triable by the forum created under Section 91 and Section 93 of the said Act. Three eases were disposed of by a common judgment. In two of these cases the dispute was between members and their licensees. In the third case the dispute was between a Co-operative Bank and tenants introduced by its debtor member before the debtor's building was' purchased by the Bank in execution of the award. Above judgment in one of the former two cases was reversed by the Supreme Court in the case of I.R. Hingorani v. P.K. Shah. : AIR1972SC2161 Judgment of this Court in the third case is confirmed in the case of D.M. Co-op. Bank v. Dalichand : [1969]1SCR887 (hereinafter referred to as 'D.M. Bank's' case). But wide interpretation of Section 91 of the Act in terms is disapproved. Thus judgment reported in 67 Bom. L.R. 306 must be deemed now to have been over-ruled and no more a good law on any point. D.M. Bank's case is at present the authoritative pronouncement on the precise scope of Section 91 of the Act. Unfortunately, however, cases decided thereafter by this Court do not reflect unanimity as to what precisely is the ratio of D.M. Bank's case as to the scope of Section 91. In the connected two Special Civil Applications Nos. 1406 of 1970 and 2816 of 1971, the Co-operative Appellate Tribunal relied on the two unreported judgments of this Court by Patel and Chitale JJ. in Jethalal M. Shah v. S.B. Gosavi (1969) Special Civil Application No. 875 of 1967, decided by Patel and Chitale JJ., on September 8, 1969 (Unrep.) and in Bipin Zaverilal Mullaji v. Devibai Jethmal Mirpuri (1969) Special Civil Application No. 955 of 1967, decided by Patel and Chitaji JJ., On September 3, 1969 (Unrep.) to hold that the dispute between a member of a Co-operative Society and his licensee does not touch the business of the Society and is not covered by Section 91 of the Act. Mr. Kane and Mr. Kothari the learned advocates appearing for the petitioners therein and Dr. Naik appearing for the petitioner in this case relied on the Division Bench judgment in the case of Satpalsing v. Santdas (1970) 73 BomLR 777 in support of their contrary contention. Mr. Dhanuka, the learned advocate for respondents in this case, relied on D.M. Bank's case (supra) and the judgment of the Supreme Court in the case of Sabharwal v. Guna Amrit : [1973]1SCR53 and some unreported judgments of this Court in support of the view taken by Patel and Chitale JJ.

7. It is, therefore, necessary first to examine the facts of the leading judgment in the D.M. Bank's case (supra) and findings to ascertain the true and precise ratio thereof.

8. On June 29, 1961 entire ground floor of a building in dispute was leased out by the owner thereof to several lessees. The lesser-owner had already mortgaged the said building (without possession) with the D.M. Bank, a Cooperative Society registered under the Act. The owner himself was a member and also Chairman of the said Bank at the time of mortgage transaction. In execution of the award for the dues against the lessor, the building was purchased by the Bank itself. After obtaining the physical possession of the vacant portion of the property, the Bank proceeded to take the possession of the ground floor from the tenants of the debtor. The tenants resisted and claimed protection of the Rent Act. Bank then moved the Registrar under Section 91(1) of the Act claiming possession from all these tenants. The tenants challenged the jurisdiction of the Registrar or his nominee tinder Section 91 of the Act, by an application under Article 226 of the Constitution before the High Court. This case of the tenants against the D.M. Bank was disposed of by the Division Bench of this Court along with two other cases i.e. Hingoram's etc., judgment of which is reported in 67 BomLR 306. This Court upheld the contention of the tenants that they were introduced as tenants by the owner when the building did not belong to the Bank and their lessor's title to lease could not have been claimed by him 'by virtue of his being a member of the Co-operative Society, i.e. the Bank' (see p. 316 of the report). The petitioners (tenants) could not, therefore, be said to be claiming through a member of the Bank as member to attract Section 91(1)(b) of the Act. It was this decision that was challenged by the Bank before the Supreme Court which necessitated the close analysis of Section 91 of the Act. It was noticed by the Supreme Court that Section 91(1) consisted of two parts, first part enumerating the subject-matter of dispute, while second part enumerating the parties to the dispute. After eliminating the application of four other categories of disputes and parties covered by (a) and (e) to (e), it was sought to be ascertained if the dispute raised in the case could be claimed to be the one 'touching the business' of the Society and parties at best could be claimed to have been covered by Section 91(1)(b) of the Act. Two following points were then formulated for consideration at p. 1325 (para. 16) :

(1)... what is the meaning of the expression 'touching the business of the society?' and (2) what is the meaning of the expression 'a person claiming through a member' which occurs in Section 91(1)(b) ?

The ratio of the Supreme Court decision can be summarised as follows:

(1) The word 'business' ['touching the business of the Society' in Section 91(1)] does not mean affairs of the Society. The word has been used in a narrower sense meaning thereby actual trading or commerce or other similar business activities, which the Society is authorised by the Act and the Rules made thereunder.

(2) While the nature of the business can be ascertained from the objects of the Society, it is difficult to subscribe to the proposition that whatever the Society does or is necessarily required to do for the purposes of carrying out its objects can be the part of its business.

(3) The word 'touching' is very wide and would include any matter which relates or concerns the business of the society, but it is doubtful whether the word 'affects' is inclusive in the scope of the word 'touching'.

(4) Disputes between the landlord and tenant are outside the purview of Section 91 and the summary procedure provided under Section 91 of the Act only covers disputes relating to the internal management of the Society.

(5) It is not enough that dispute should touch the business of the society for attracting the provisions of Section 91 of the Act. It is also necessary that the capacity of the member in the transaction giving rise to the dispute should also be as such a member.

9. Point (1) militates against the wide interpretation of Section 91 enunciated in 67 BomLR 306 (I.R. Hingorani v. Pravinehamdra). Points (2) and (3) militate against the ratio of the Pull Bench judgment of this Court in Farkhundali v. Potdar. (1961) 63 Bom. 985, F.B. Point (4) affirms the ratio of the judgment of this Court in Manohar v. Konkan Ca.-op. Housing Socy. : AIR1962Bom154 F.B., to a certain extent. Point (5) affirms the ratio of the judgment of this Court in Shyam Co-operative Society v. Ramibai. : AIR1952Bom445 .

10. The Supreme Court then concluded that (1) the dispute between the Bank, i.e. a Co-operative Society, and the tenant introduced by the mortgagor-owner, before the purchase of building by the Bank, did not touch the business of the Society, and (2) that, when the original owner executed the lease in favour of the tenants, he was not acting as a member of the Society, but as a mortgagor in possession and Bank's claim, therefore, did not fall within the ambit of Section 91(1)(b) of the Act.

11. It needs only to be added that member of any Co-operative Housing Society cannot be said to be a tenant within the meaning of Section 105 of the Transfer of Property Act and relationship of a landlord and tenant cannot exist between the society and its member, though loosely the premises are described as tenement and a member is described as tenant. This aspect has been examined with reference to the Act, Rules and schemes of the Bye-laws and discussed thread-bare by the Full Bench of this Court in its judgment reported in Manohar v. Konkan Co.-op. Housing Socy. and also by the judgment of the Supreme Court in Baburao Shantaram More v. The Bombay Housing Board. : [1954]1SCR572 , 56 BomLR 286 Not only that its ratio has not been over-ruled so far, but D.M. Bank's case judgment by the Supreme Court goes to affirm it at any rate in part in paras. 32 to 36 as to the extent of the application of Rent Act to the dispute between a member and his tenant.

12. Bearing these principles in mind, we find it very difficult to see how the dispute in the present case between a member and his licensee can fall within the four corners of Section 91 of the Act. Firstly, it is difficult to conceive of any dispute touching the business of the society without the society itself feeling aggrieved and choosing1 to raise such dispute and being a disputant in the same. Secondly, it is difficult to see how a member entering into a leave and licence agreement in favour of a third person can by his own act 'touch' the business of the society, in its narrower sense, unless the society objects and raises a dispute with regard thereto. Thirdly, it is possible that such a dispute between the licensor and the licensee may ultimately 'affect' the business of the society if licence is given in contravention of bye-laws or the rules. But this still falls too short of 'touching' the business of the society. Fourthly, it is also difficult to conceive how the society can have any objection as long as the occupant licensee remains in possession of the premises complying with the conditions attached to the premises and the requirements and demands of the society in the same manner in which the licensor-member could have complied, unless such licensing itself is specifically prohibited. Fifthly, the society cannot come into the picture in any dispute which exclusively affects and concerns the member and his licensee. Sixthly, as laid down in the D.M. Bank's case, Section 91 deals with the dispute in regard to the internal management of the society. The dispute between the licensor and licensee in regard to possession of the flat cannot touch the internal management of the society even remotely, though it may 'affect' its business ultimately and impel the Society to move to evict both member and licensee or licensee alone, with the co-operation of the member. Seventhly, the ratio of the Full Bench judgments in Manohar v. Konkan Co.-op. Housing Socy. and D.M. Bank's case exclude the dispute between a member and his tenant from the purview of Section 54 of the Bombay Act of 1925 and corresponding Section 91 of the Act such dispute being only cognizable by the Court created under the Bent Act. On parity of the reasoning the dispute between the licensor and licensee also must be deemed to be outside the purview of Section 91 of the Maharashtra Co-operative Societies Act, 1960.

13. We have referred to the views of Division Bench of this Court, after the judgment of D.M. Bank's case, i.e. Patel and Chitale JJ. in their judgments in Bipin Zaverilal Mullaji v. Devibai Jethmal Mirpuri and Jethalal M. Shah v. S.B. Gosavi. In Smt. R.D. Pandit v. Mandayan Doate Raman (1911) Special Civil Applications Nos. 2038 of 1969, 2142 of 1969 and 2143 of 1969, decided by Deshpande and Chitale JJ., on January 25/27/28, 1971 (Unrep.) one of us (i.e. myself sitting with Chitale J.) also took the same view; and Chandrachud J. sitting with Madon J. adopted the same view in his judgment in Kishinchand Chellaram Udhwani v. Ramanlal Krishna Khambholja (1970) Special Civil Application No. 2790 of 1968, decided by Chandrachud and Madon JJ., on January 5, 1970. (Unrep.), in which emphasis was placed on the fact that the society had not taken any active part in the ejectment proceedings. Sitting with K.K. Desai J. and disposing of Mrs. N. Pereira v. The Swastik Chambers Co-operative. Housing Society Ltd. (1970) Special Civil Applications Nos. 1457 of 1967 and 1377 of 1968, decided by K.K. Desai and Deshpande JJ., on December 10, 1970 (Unrep.), one of us (i.e. myself) held that dispute between a member of a society and his tenant was governed by Section 28 of the Rent Act and not by Section 91 of the Act even when the society is impleaded as plaintiff only as an idle party.

14. Strong reliance, however, was placed by Dr. Naik, Mr. Rane and Mr. Kothari appearing for the licensors in the connected matters, on the Division Bench judgment of this Court in the ease of Satpalsing v. Santdas. It shall have to be conceded that the ratio of this judgment supports their contentions. The learned Judges quoted a passage from the judgment of the Supreme Court in D.M. Bank case at page 782, where the word 'business' in Section 91(1) is shown to have been used in a narrower sense. The learned Judges, however, placed emphasis on the passage, referring to business activity of the Society, which the Society is authorised to enter into tinder the Act and its Bye-laws. The learned Judges then quoted Clause (2) from the Bye-law of the Society concerned and Regulation No. 4, which prevents 'any tenant from assigning, underleting, vacating or parting with the possession of the tenement or any part thereof without the previous consent in writing of the Society'. Their1 relevant conclusions then at p. 783 can be summarised thus:

(1) It is clear that the bye-laws of this Co-operative Housing Society become a part of the agreement between the member and the society and any breach of those bye-laws may affect the grant of the tenancy or allotment of the flat to its member.

(2) At any rate, it is clear that the business of the society is of housing and in particular the leasing or sub-leasing of its tenements and the creation of tenancies and sub-tenancies and,

(3) With that end in view the Form prescribes that no tenant shall sub-let without the permission, of the society.

(4) Therefore, the business of the society was directly concerning the letting of the premises allotted to Malkani [Satpalsing]. Since the prohibition is only against letting or sub-letting of the premises, licensing is permitted without the permission of the society and that is why the present licence was entered into between Malkani and Arora.

(5) When Arora raised the plea that Malkani had given him a tenancy, the dispute thus raised became directly one touching the business of the society.

At p. '785 the learned Judges also referred to the cases of Co-op. Cr. Bank v. Ind, Tri., Hyderabad : (1969)IILLJ698SC and also Farkhundali v. Potdar, though authority of the latter is shown to have been shaken by the former and also by the D.M. Bank's case. With respect, ratio of this case appears to us to militate against the ratio of D.M. Bank's case extracted by us above and also against the ratio of Division Bench judgments of Patel and Chitale JJ. and others referred to earlier. The ground of distinguishing these two judgments discussed at p. 785, i.e. that there was no proof of the business of the societies concerned, is not borne out by the texts of the judgments. On the contrary, both the judgments refer to the objects and bye-laws of the societies.

15. This apart, 'Housing Society' has been denned in Section 2(16) as 'a society the object of which is providing its members with dwelling houses.' Under Section 12, the Registrar has powers to classify all societies into one or other of the classes of societies denned in Section 2 and also into such sub-classes thereof as may be prescribed by rules. Under Rule 10 several societies have been classified. At item No. 5 we find the classification of Housing Society in three categories--(1) tenant ownership housing society, (2) tenant co-partnership housing society, and (3) other housing societies. It is difficult to see under which of these categories any society having its objects as quoted by the Division Bench at p. 782 can really fall. Now, it is true that under Section 9 of the Act, the Registrar cannot register any society, unless he is satisfied that the 'bye-laws are not contrary to the Act or to the rules'. Even so, we are not by any means satisfied that any housing society constituted for providing its members with dwelling houses can engage 'in the business of real estate by observing the principles of co-operation for the benefit of its members in particular and purchase and sale of land, and/or buildings, owning, buying, selling, hiring, letting, sub-letting, renting, exchanging, leasing, sub-leasing, accepting lease, tenancy or sub-tenancy or doing all things necessary or expedient for the attainment of the objects specified in the bye-laws.' It is true that the bye-laws have to be so framed as to enable the Society and its managing committee to do everything that will be necessary or incidental to the promotion of the chief objects of the society and have to provide for all possible even remote contingencies. We are, however, not satisfied that the bye-laws quoted at page 782 of Satpalsing's case can strictly be within the limits of: the principal object of any 'housing society' which can be constituted only for providing its members with dwelling houses. The learned advocates appearing for the petitioners could not draw our attention to any other activity of the Co-operative Societies concerned in this and the connected case beyond constructing the building, allotting the flats therein to its members, looking after the maintenance thereof, collecting monthly instalments for maintenance charges and of loans, if any, obtained for the purposes of construction of the building of the society. It is difficult to conceive how allowing any third person to occupy a flat on leave and licence basis by a member of the society can touch the business of the society, if the entire gamut of the business carried on by the society particularly after the construction of the building is completed, is the one enumerated above.

16. Mr. Rane strongly relied on the observations at page 311 in the case of I.E. Hingorani v. Pravinchandra, reported in 67 Bom. L.R. 306 and contends that Hingorani's case has been overruled by the Supreme Court on the ground that capacity of the licensor on the date when the licence was created was not that of a member of the society. This contention of Mr. Kane is, no doubt, borne out by the judgment of the Supreme Court in the case of I.R. Hingorani v. P.K. Shah. However, the contention of Mr. Bane cannot be accepted. The Division Bench in I.R. Hingorani's case relied on the Full Bench judgment in Farkhundali v. Potdar. Authority of this1 judgment is now shaken by the observations made by the Supreme Court in D.M. Bank's case and in the case of Co-op. Cr. Bank v. Ind. Tri., Hyderabad.

17. If the matters were to rest here, it would have been necessary for us to consider suggestions of Dr. Naik, Mr. Bane and Mr. Kothari to refer the question to the larger Bench in view of the conflicts of opinions as to the ratio of B.M. Bank's case. However, the authority of the judgment in Satpalsing's case is found to have been shaken by the subsequent judgment of the Supreme Court reported in Sabharwal v. China Amrit. There the allottee of a flat in a Co-operative Housing Society gave the said flat on leave and licence basis for eleven months to Sabharwal Brothers. When Sabharwal Brothers refused to vacate after the expiry of the licence period, the member licensor raised a dispute under Section 91(1) of the Act before the Registrar. Challenge to his jurisdiction was over-ruled and on July 3, 1964 an award in favour of the member for delivery of possession by the licensee' was passed. The licensee claimed to be the tenant; and in the meanwhile filed a declaratory suit in the Court of Small Causes claiming protection under the Bent Act. The trial Court took the view that the suit was maintainable notwithstanding the final award of the Registrar. A Bench of the Small Causes Court in revision, however, held that the Registrar's nominee did have jurisdiction to try the dispute. On Special Civil Application to the High Court, the same was dismissed, upholding the jurisdiction of the Registrar and his nominee. The learned Judges of the Supreme Court referred to the bye-laws of the Society, which were more or less on the same pattern as were quoted at page 782 of the report in Satpalsing's case. The learned Judges also quoted Regulation No. 5 which was word to word pari materia with Regulation No. 4, which was referred to at page 783 in Satpalsing's case. The learned Judges referred to the finding of the Bench of the Court of Small Causes, which held that 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--an approach so akin to the approach of the High Court in Satpalsing's case. The Supreme Court, however, disapproved of this approach adopted by the Bench of the Small Causes Court as well as of the High Court and observed in para. 9 (p. 1895) :.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-law and a breach of the bye-law could affect the defaulting member's right to membership.

Their Lordships further observed:

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-operative principles.

These observations of the Supreme Court plainly militate against the observations of the Division Bench in Satpalsing's case made at pages 782 and 783 of the report. It shall have to be held, therefore, that Satpalsing's case is no more a good law.

18. Dr. Naik, however, contended that the judgment of the Supreme Court in Sabharwal's case is based on its peculiar facts and cannot affect the ratio of Satpalsing's case. Last few lines of para. 9 apparently sound somewhat out of tune with entire trend of the judgment and the true facts of the case. Dr. Naik's comments thereon cannot be lightly brushed aside. The conception of the flat having been sold to respondent No. 1 (i.e. the member of the society) or he having become the owner or tenant thereof or society becoming ever a landlord militate not only against other recitals in the judgment but also against the true position of any member in relation to his flat in a housing society as conceived under Section 2(16) of the Act read with Section 12, Rule 10 and the true import of the bye-laws as interpreted by the Full Bench of this Court in Konkan Co-op. Housing Society's case (supra). The observations however can be reconciled with unduly widely worded bye-laws which invariably contain innumerable clauses pregnant with enabling provisions to meet all conceivable contingencies but mostly unrelated to the main object of the society. A Society can be conceived to be landlord only in the event of its leasing the member's flat due to unavoidable temporary inability of any member to occupy the flat. We are, however', not satisfied that last few lines in para. 9 of the judgment are irreconcilable on any hypothesis whatsoever. At any rate, these cannot have the effect of eroding the clear ratio of the judgment.

19. Dr. Naik's contention that our interpretation would lead to the inevitable liquidation, of Societies is an argument of despair and does not call for serious consideration. If all the members introduce licensees: in their flats, the Society will not remain a silent spectator, and our interpretation will not prevent the society from invoking Section 91 as in that ease such licensing would touch the business of the society, when society chooses to object and proceed.

20. Mr. Rane faintly suggested that even if it is held that such dispute between the licensor and licensee does not touch the business of the society it, at any rate, cannot but be said to touch the management of the society. The argument is devoid of any substance. The disputes are classified into five categories tinder Section 91(1) of the Act and dispute as to the possession of the fiat, in the light of the classification scheme, can fall under the last category of the dispute touching the business of the society, if the other requirements of the section are fulfilled. Otherwise, dispute falls beyond pale of Section 91.

21. Assuming that such a dispute between the licensor and licensee touches the business, the petition is still liable to be rejected, unless the petitioner further succeeds in showing that while entering into the leave and licence agreement with the non-member, his capacity as member was involved. We have already referred to the facts and ratio of the judgment of the D.M. Bank case (supra). In para. 25 of their judgment the learned Judges observed (p. 1326) :.It seems to us that before a person can be said to claim through a member, the claim should arise through a transaction or dealing which the member entered into with the society as a member.

The 'society' in this passage is referred to, as the dispute in that case was raised by the Society bank against the tenant. Mr. Rane's contention that, transaction with the society refers to the dealing of acquisition of flat is devoid of any substance. Disputes can arise under variety of circumstances apart from the transaction of becoming a member and acquiring the fiat. The learned Judges then referred to the several English and Indian cases and particularly to the following passage approvingly from the case of Shyam Co-operative Society v. Ramibai (p. 1327) :.and proper emphasis has got to be laid upon the expression 'member' used in this section. The dispute must be between the society and the member as a member or quae a member. It must be a dispute in which the member must be interested as a member. It must relate to a transaction in which the member must be interested as a member. (p. 318)

and then finally observed at para. 31 as follows (p. 1328) :

If this is the correct view, then was the lease or the tenancy rights obtained by the petitioners a right or title derived from a member as a member? It seems to us that when the original owner executed the lease, he was not acting as a member but as a mortgagor in possession, and, therefore, the Bank's claim does not fall within Section 91(1)(b) of the Act.

In the light of the above discussion all that we are required to ask ourselves is: was the leave and licence agreement obtained by the licensees-respondents from the licensor-petitioner in the capacity of his being member of the society? Answer to this question must be emphatically in the negative. While granting the leave and licence he was just acting as a person in possession of the flat like any other person in possession of any building having disposing power over it, without regard to whether such disposing power was limited or unlimited. The member was not discharging any duty cast on him as member, while granting licence to the non-member. This aspect is not touched in Sat-palsing's case (supra). It thus appears that it is not enough that dispute is one of the five categories enumerated in Section 91 and the parties are one or the other enumerated in Clauses (a) to (e) thereof. It is also necessary that there exists some nexus between the party and his connection with the affairs of the society giving rise to the dispute.

22. The true view seems to be to us that after getting possession of the flat the member is free to deal with the same subject, of course, to the limitations imposed by the Act, Rules and Bye-laws of the society. If there are no restrictions on creating' a licence in favour of any one, the membership of the member cannot even remotely come into the picture while granting licence. If granting leave and licence is prohibited by the society, such act all the more ceases to be the act in the capacity of member as he obviously acts de hors his capacity, obligations and duties to the society. As occupant of the flat in the society, a member happens to deal in varieties of transactions with reference to the flat and acts in variety of ways, while enjoying the possession of the flat. It is impossible to hold that in each of his acts, capacity of the member can come into the picture, in the same manner, as capacity of the Government servants or officers of the statutory bodies cannot be said to come into picture in regard to the acts unrelated to their duties and obligations. The true test would be: is particular act required to be done by him as an obligation as member of the society? Where there is no such obligation, the capacity of his being member becomes absolutely irrelevant, Reliance by the learned advocates on the recitals in the agreement of leave and licence, undertaking to comply with the Rules, Regulations and Bye-laws of the society and the recitals indicating that member could come to occupy the said flat pursuant to his membership of the society, to our mind, are absolutely irrelevant. Mr. Kothari's contention that a member's right to allow anybody to occupy the flat as a licensee, springs from his right to possess the flat, which in turn springs from his membership of the society, is devoid of any merit.

23. Dr. Naik in this context referred to Section 93 of the Building Societies Act, 1962 (English) and also the provisions of the Friendly Societies Act. He also drew our attention to para. 123 of Halsbury's Laws of England, third edn., vol. 18, p. 65. It does appear that these sections in terms refer to the capacity of the member in regard to certain transactions. In the first instance, we have not placed any reliance on the English authorities, the ratio of which in turn depends upon the provisions of these Acts. The Supreme Court in the case of D.M. Bank undoubtedly made reference to several English cases and also provisions of the English Acts. This much, however, is clear to us that what Section 93 of the Building Societies Act or corresponding section of Friendly Societies Act seek to lay down expressly is implicit in the provisions and scheme of Section 91 of the Maharashtra Co-operative Societies Act.

24. Mr. Rane's contention that Shyam Co-operative Society v. Ramibai has been subsequently over-ruled in Malvan Co-op. Bank v. Kamalakar : AIR1955Bom101 is not correct. Section 54(1) was suitably amended in the light of the observations made in Shyam Co-op. Housing Society's case (supra) so as to bring within the sweep of Section 54 any debt due to the society from the member whether incurred in the capacity of such member or not. Malvan Co-op. Bank v. Kamalakar only takes notice of this change in the statute.

25. Dr. Naik drew our attention to the judgment in Shantilal Rajpal Mehta v. Mangalagouri Bwarkadas (1973) Special Civil Applications Nos. 2215 and 2216 of 1972, decided by Deshpande and Mukhi JJ., on February 20, 1973 (Unrep.) to which one of us (i.e. myself) is a party and pressed for remand of this case in the manner the said case was remanded. It is true that it was also a case where licensor claimed possession from licensee by raising a dispute under Section 91 though the defendants pleaded tenancy. In the first instance, there was earlier order in that case by Vimadalal J. directing the Registrar or his successor to decide the question of jurisdiction as a preliminary issue. Therein argument advanced was that the direction was not carried out by the lower Court. Secondly, our attention was not drawn to Section 2(16) and Rule 10 indicating the limitations on the business of any Cooperative Housing Society formed under the Co-operative Societies Act. In answer to questions at the Bar in this case, the learned advocates fairly conceded that the business of the Societies involved in these cases was no other than to construct building and after construction recover rent and look after the maintenance of so constructed buildings. This case and connected matters were argued at great length with thorough preparations, rendering remands unnecessary.

26. Our attention also was drawn to the judgment of Vaidya J. Smt. Chandra Chetanram S.M vdasani v. Chander Shekhar Sheth (1971) Special Civil Application No. 1446 of 1071 decided by Deshpande and Vaidya JJ., on December 10, 1971 (Unrep.) to which one of us (myself) is a party. It was a claim for possession against a licensee of a member but, conclusion is justified by the fact that the Society also was co-disputant with the member. Any reference to the judgment in Brijmohandan Gamier's v. Janaki L. Dhudhaney (1971) Special Civil Application No. 1540 of 1968, decided by Kotval C.J. and Vaidya J., on July 27, 1971 (Unrep.) is unnecessary as the learned Judges have only followed Satpalsing's case (supra).

27. The result is that orders of the Officer on Special Duty and Registrar also are liable to be quashed as also the order of the Government, reversing these orders. As Section 91 of the Act is held inapplicable, reference of the dispute to the Officer on Special Duty itself is liable to be quashed.

28. Rule has thus to be discharged, though the grievance of the petitioner against the order of the State Government is found to be correct.

29. There will be no order as to costs.


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