Case Note & Summary
The Supreme Court of India considered an appeal by special leave against a judgment and order of the Bombay High Court in a Special Civil Application arising from revisional proceedings in the Court of Small Causes, Bombay. The dispute concerned a flat on the second floor of Block No. 8, 'Shyam Niwas', Warden Road, Bombay. The first respondent was the owner of the flat and a member of a Co-operative Housing Society from which she had acquired it. In 1959, she placed the appellant firm, Sabharwal Brothers, in possession for an initial period of 11 months at a monthly compensation of Rs. 510, under a written agreement describing the occupation as leave and licence. A partner of the appellant firm signed the agreement and also became a member of the society. The agreement was renewed repeatedly until 25 October 1962, when the first respondent asked the appellants to vacate, claiming personal requirement. The appellants did not vacate. The first respondent then filed a statement of claim before the Registrar of Co-operative Societies under Section 91(1) of the Maharashtra Co-operative Societies Act, 1960, contending that there was a dispute touching the business of the society. The Registrar referred the matter to a nominee, whose jurisdiction the appellants challenged. Nevertheless, on July 3, 1964, the nominee made an award that the appellants were occupying the flat on leave and licence basis. Anticipating that award, the appellants filed a suit in the Court of Small Causes, Bombay, asserting that they were tenants entitled to protection under the Bombay Rent Act, 1947, and that the first respondent had no right to evict them. The defendant denied tenancy and contended that the Small Causes Court had no jurisdiction because the dispute had been referred to the Registrar. The trial court framed twelve issues and answered preliminary issues 2 to 8 in favour of the plaintiffs, holding the suit maintainable. On revision, a Bench of the Small Causes Court reversed and remanded, holding that the Registrar’s nominee had jurisdiction to try the dispute and directing the trial court to decide an issue of res judicata arising from the nominee’s award. The High Court dismissed the Special Civil Application, agreeing with the revisional court. Before the Supreme Court, the main questions were whether there was any dispute between the parties touching the business of the co-operative society within Section 91(1)(b) of the Act, and whether the suit in the Small Causes Court was maintainable. The Court examined Section 91(1)(b), Section 91(3), Section 163(1) of the Maharashtra Co-operative Societies Act, bye-law No. 2 and Regulation No. 5 of the society, and Section 28 of the Bombay Rent Act. The Court observed that although it was the business of the society to let out premises and a member had no unqualified right to let out his flat under the bye-laws, a letting by a member to another member did not touch the business of the society. The society had already sold the flat to the member and was not the landlord of the flat; there was no point of contact between the member’s letting and the society’s business. The position might have been different if the first respondent had herself been a tenant of the flat under the society. The Court distinguished Deccan Merchants Co-operative Bank Ltd. v. Dalichand Jugraj Jain and others and reiterated that the Bombay Rent Act and the Maharashtra Co-operative 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. The Court held that the dispute was not one touching the business of the society and that the Small Causes Court had jurisdiction. It allowed the appeal, set aside the judgment and order of the High Court and the revisional Bench of the Court of Small Causes, and upheld the maintainability of the suit. The operative result was that the Registrar’s nominee had no jurisdiction to adjudicate the landlord-tenant dispute between the parties.
Headnote
A) Cooperative Societies - Dispute Touching Business of Society - Scope of Section 91(1)(b) - Maharashtra Co-operative Societies Act, 1960, Section 91(1)(b), Section 91(3), Section 163(1) - The dispute concerned a flat sold by the society to one member and later let by that member to another member who also became a member - The society was not the landlord of the flat and the letting by the member did not concern or affect the business of the society in letting out its own flats - Held that the dispute did not touch the business of the society and was not referable to the Registrar under Section 91(1)(b) (Paras 57D-G). B) Rent Control and Cooperative Societies - Competing Jurisdiction - Harmonization of Statutes - Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, Section 28; Maharashtra Co-operative Societies Act, 1960, Section 91 - The appellant claimed tenancy protection under the Bombay Rent Act and filed a suit in the Small Causes Court, while the respondent relied on the Registrar's jurisdiction under the Cooperative Societies Act - The Court held that in matters covered by the Rent Act, its provisions rather than the provisions of the Cooperative Societies Act should apply, so the suit was maintainable - The appeal was allowed and the orders of the High Court and revisional Bench were set aside (Paras 58A).
Issue of Consideration
Whether the dispute between the parties touching the business of the co-operative society was referable to the Registrar under Section 91(1)(b) of the Maharashtra Co-operative Societies Act, 1960; whether the suit in the Court of Small Causes was maintainable under the Bombay Rent Act, 1947
Final Decision
Appeal allowed; judgment and order of the Bombay High Court and the revisional Bench of the Court of Small Causes set aside; held that the dispute did not touch the business of the co-operative society and therefore the Registrar's nominee had no jurisdiction; the suit in the Court of Small Causes was maintainable.
Law Points
- A dispute between a member who has acquired a flat from a co-operative housing society and another member to whom the flat is let does not touch the business of the society under Section 91(1)(b) because the society is not the landlord
- in matters covered by the Bombay Rent Act
- 1947
- the Rent Act provisions prevail over the Maharashtra Co-operative Societies Act
- 1960
- statutory 'touch' requires a point of contact with business
- letting by a member of his own flat is not the society's business
