Case Note & Summary
The dispute arose from a resolution passed by a co-operative housing society in or around 1976 offering sale of adjoining land to its members for a fixed consideration. The member paid the total consideration of Rs.2500 in two instalments on 13/6/1977 and 8/3/1979, and the society accepted the amounts and issued receipts. Despite repeated requests, the society failed to execute a sale deed, prompting the member to approach authorities under the Maharashtra Co-operative Societies Act, 1960. An authority directed the society to execute the sale deed, but the society challenged that order in Writ Petition No. 667/2004 before the High Court. The High Court allowed that petition, holding that the dispute should be adjudicated by the Co-operative Court under Section 91 of the Act. The member then filed Dispute No. 858/2004 before the Co-operative Court, Akola. The Co-operative Court, by order dated 23/8/2021, directed the society to execute the sale deed. The society appealed to the Co-operative Appellate Court, which by order dated 10/3/2022 in Appeal No. 10/2021 reversed the Co-operative Court and dismissed the dispute, holding that the Co-operative Court lacked jurisdiction to grant specific performance and that only a civil suit could be filed. The member filed the present writ petition challenging the appellate order. The core legal issue was whether the Co-operative Court under Section 91 of the Maharashtra Co-operative Societies Act, 1960 has jurisdiction to entertain and grant specific performance of contract. The petitioner argued that the appellate court ignored the binding High Court judgment in Writ Petition No. 667/2004 and that Section 91 covers the dispute as it is between a member and society touching the business of the society. The respondent society supported the appellate order, contending that only a civil court can grant specific performance, the claim was time-barred, consideration was not paid within the stipulated period, and a subsequent resolution enhanced the consideration amount. The High Court examined Section 91, which contains a non obstante clause and requires that the dispute be between a member and society and touch the management or business of the society. Section 163 bars civil court jurisdiction for disputes referable to the Co-operative Court. The court noted that the society's resolution offering sale and the member's acceptance by paying full consideration constituted an agreement; strict pleading rules applicable to civil suits do not apply before the Co-operative Court, and the member had performed his part. The court held that acceptance of the consideration amount beyond the stipulated time without demur or recording acceptance without prejudice amounted to novation of the contract, precluding the society from denying specific performance on the ground of delay. The court also relied on the finality of the earlier High Court judgment in Writ Petition No. 667/2004, which had held that the Co-operative Court must adjudicate the issue, and that judgment was not challenged before the Supreme Court, thus binding the parties. The court referred to a similar case, Sudhir Co-operative Housing Society Limited, Akola v. Sharada Vinayak Prabhune, where similar jurisdictional issues were decided. The High Court held that the Co-operative Court has jurisdiction under Section 91 to grant specific performance, that the appellate court erred in holding otherwise, and that the member was entitled to specific performance. The final operative direction of the writ petition is not explicitly stated in the extracted portion, but the court's reasoning clearly favoured the member and set aside the appellate court's jurisdictional finding.
Headnote
A) Co-operative Law - Jurisdiction of Co-operative Court - Specific Performance - Maharashtra Co-operative Societies Act, 1960, Sections 91, 163 - Dispute between member and society regarding sale of adjoining land and execution of sale deed is a dispute touching the business of the society; Section 91 with non obstante clause confers jurisdiction on Co-operative Court and Section 163 bars Civil Court; previous High Court order in Writ Petition No. 667/2004 holding such adjudication to be by Co-operative Court is final and binding. Held that Co-operative Court is empowered to entertain and grant specific performance, and appellate court erred in holding otherwise. (Paras 1, 12-15) B) Contract Law - Novation - Acceptance of Delayed Payment - Not mentioned - Acceptance of consideration amount after the stipulated time without demur or recording acceptance without prejudice amounts to novation of the contract, thereby creating a new term and precluding the Society from claiming that delayed payment disentitles the Member from seeking specific performance. Held that Society cannot rely on time stipulation after accepting late payment. (Para 16) C) Civil Procedure - Res Judicata/Finality of Previous Decision - Binding Effect of High Court Judgment - Not mentioned - The High Court's earlier judgment in Writ Petition No. 667/2004, which held that the dispute between the parties is to be adjudicated by the Co-operative Court, was not challenged before the Supreme Court and thus attained finality, binding the parties. Held that Society cannot now contend that Co-operative Court lacks jurisdiction. (Para 12) D) Specific Relief - Readiness and Willingness - Proof in Co-operative Court - Not mentioned - Strict rules of pleading applicable to civil suits do not apply to disputes before Co-operative Court; member's payment and Society's acceptance of full consideration show nothing remained for member to perform, satisfying readiness and willingness. Held that member is entitled to specific performance. (Para 15)
Issue of Consideration
Whether the Co-operative Court under Section 91 of the Maharashtra Co-operative Societies Act, 1960 is empowered to grant specific performance of contract; and whether the Co-operative Appellate Court erred in reversing the Co-operative Court's order.
Final Decision
The High Court held that the Co-operative Court has jurisdiction under Section 91 of the Maharashtra Co-operative Societies Act, 1960 to entertain and grant specific performance of contract; that Section 163 bars the Civil Court; that acceptance of late payment without demur novated the contract; and that the appellate court erred in holding otherwise. The final operative direction (allowance of the writ petition and restoration of the Co-operative Court's order) is not explicitly stated in the extracted portion of the judgment.
Law Points
- Co-operative Court has jurisdiction to grant specific performance under Section 91 if dispute touches business of society
- Section 163 bars civil court jurisdiction
- acceptance of late consideration amounts to novation
- binding nature of previous High Court order
- strict pleading rules not applicable in cooperative disputes
