TMI Blog1968 (8) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... l owner . Before us the bank is the appellant, while the petitioners and the three other respondents before the High Court are the first, second, third and fourth respondents. 3. The main point that arises in this appeal is whether the dispute between the petitioners and the bank can be referred by the Registrar for arbitration under Sub-section (1) of Section 91 of the Maharashtra Co-operative Societies Act, 1960 (XXXII of 1960), hereinafter, referred to as the Act. 4. Before we set out the relevant provisions of the Act, it is necessary to state the relevant facts out of which the dispute arose. The original owner on June 29, 1961, executed an agreement by which he leased the entire ground-floor of building Nos. 195 to 197, Shaikh Memon Street, Bombay, to the petitioners on a monthly rent of ₹ 250. Clause 6 of this agreement mentions that the property had been mortgaged to the bank. The appellants were established as a banking company in the year 1917 as a co-operative society under the Co-operative Societies Act, 1912 (Central Act) and they are deemed to be registered under the Act. The original owner was the chairman of the bank, and he had taken a loan from the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners replied on June 24, 1963, challenging the transfer of the property to the bank and also denying that they were in unauthorised or illegal occupation. Before this the bank, on June 11, 1963, had applied to the District Deputy Registrar, Co-operative Societies, Bombay, under Sections 91 to 96 of the Act, praying that the dispute between the bank and the petitioners be referred to arbitration. In this application seven parties were made respondents including the original owner and the petitioners. We are not concerned with the other five respondents. 8. It was stated in the application that the bank, pursuant to the certificate issued by the Collector under Section 100 of the Act, had been put in possession of the building at Nos. 195 to 197, Shaikh Memon Street, Bombay, but the original owner, however, retained possession of part of the property in his possession or in the possession of the petitioners and the other five respondents. It was asserted that the seven respondents had no right, title or interest to the suit premises, and, at any rate, they are not tenants or sub-tenants of the suit premises either within the meaning of the Bombay Rents, Hotel and Lodging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minee for determination. The petitioners accordingly prayed for issue of a writ of certiorari or other appropriate writ against the Assistant Registrar or his nominee and quashing the order dated June 19, 1963. We need not mention the other reliefs claimed in the petition. 10. The answer to the points raised in the petition depends in the main on the proper interpretation of Section 91 of the Act. The relevant provisions of the Act are as follows : Section 91 runs : 91. (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, election of the office bearers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated, or by a creditor of the society, to the Registrar, if both the parties thereto are one or other of the following : (a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land or any other asset resumed by it for breach of conditions of the assignment. Sub-section (1) of Section 93 provides that if the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of Section 91, the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominees, appointed by the Registrar. Section 96 provides that when a dispute is referred to arbitration, the Registrar or his nominee or board of nominees may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute. 11. This case was heard along with two other cases by the Bombay High Court and various questions were debated before it. The High Court held : (1) that the Registrar or the Assistant Registrar is bound to hear the petitioners before making the orders referring the dispute to his nominee ; (2) that the petitioners were not heard by the Assistant Registrar before the order of reference was made but it was not necessary to remand the matter to the Assistant Registrar for deciding the question about the existence of a disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the petitioners would be persons claiming through a member and, accordingly, the reference is good ; and (3) while making an order under Section 91(2) of the Act the Registrar is concerned only with the averments in the plaint and not with the pleas of the defendant. The learned counsel for the petitioners, Mr. S.T. Desai, on the other hand, contends (1) that there is no dispute touching the business of the society ; (2) that the petitioners were not claiming through a member as a member ; (3) that the Rent Act (Bombay Rents, Hotel Lodging House Rates Control Act, 1947) gives exclusive jurisdiction to the Court of Small Causes and accordingly the Registrar had no jurisdiction to refer the dispute to his nominee ; and (4) that the petitioners should have been heard before the case was referred to the Registrar's nominee and, therefore, the reference is bad. 13. The principal questions which arise on the interpretation of Section 91 are two : (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) ? 14. The answer depend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquired by the bank, cannot be said to be a dispute touching the business of the bank, and the appeal should fail on this short ground. 16. The High Court had followed the observations of the Full Bench of the Bombay High Court in Farkhundali v. Potdar , wherein it was observed : The nature of business, which a society does, is to be ascertained from the objects of the society. But whatever the society does or is necessarily required to do for the purpose of carrying out its objects can be said to be part of its business. The word touching is also very wide and would include any matter which relates to, concerns or affects the business of the society. 17. The Full Bench was construing Section 54 of the Bombay Co-operative Societies Act, 1925 (Bombay Act VII of 1925), which, inter alia, provides : 54. (1)(a) If any dispute touching the constitution or business of a society arises between members or past members of the society or persons claiming through a member or past member or between members or past members or persons so claiming and any officer, agent or servant of the society, past or present, or between the society or its committee, and any officer, agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is not a dispute between a society and a member or a person claiming through a member. 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. If a member entered into a transaction with the society not as a member but as a stranger, then he must be covered, if at all, by the provisions of Section 91(1)(a) or (c). But once it is held that the original transaction was entered into by the member with the society as a member then any person who claims rights or title through that member must come within the provisions of Section 91(1)(b). It has been held in various cases in England that disputes referable under similar acts are only disputes between a society and a member of a society when he enters into a transaction with the society as a member. [See Morrison v. Glover, [1849] 154 E.R. 1281; Prentice v. London, [1875] L.R. 10 C.P. 679; Palliser v. Dale, [1897] 1 Q.B. 257; Judson v. Ellesmere Port Ex-servicemen's Club, [1948] All E.R. 844]. Similar view was expressed by the Bombay High Court in Shyam Co-operative Society v. Ramibai, [1952 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wner of a godown who happens to be a member of the society was not a dispute between the society and a member qua a member within the ambit of Section 51 of the Madras Co-operative Societies Act, 1932. Incoming to this conclusion the learned Chief Justice followed Shyam Co-operative Society v. Ramibai, [1952] 54 B.L.R. 517 and dissented from Mishrimal v. District Co-operative Growers' Association, . In the latter case the Madhya Pradesh High Court had followed the view taken by the Nagpur High Court in Kisanlal v. Co-operative Central Bank Ltd., A.I.R. 1946 Nag. 16 Sri-vastava J., in the Madhya Pradesh case, distinguished the English cases on the ground that there the difficulty was felt on account of the wide sweep of the wording in Section 22 of the Friendly Societies Act inasmuch as any dispute, whether connected with the business of the society or not, could be brought within its ambit. He observed that, if the contention was accepted that the word member restricted the scope of the rule to transactions entered into by a member in the capacity of a member, then the words touching the business of a society would be rendered wholly superfluous. In the Nagpur case (Kis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the lease, he was not acting as a member but as mortgagor in possession, and, therefore, the bank's claim does not fall within Section 91(1)(b) of the Act. 29. This takes us to the point whether the Rent Act applies to the facts of this case and, accordingly, the jurisdiction of the Registrar is ousted, and it is only the Court of Small Causes which has jurisdiction to eject the petitioners. 30. The scheme of the various Rent Acts and the public policy underlying them are clear; the policy is to give protection to the tenants. Various powers have been conferred on the authorities under the Rent Acts to grant protection to the tenants against ejectment and other reliefs claimed by the landlords. Section 28 of the Rent Act, inter alia, provides : 28. (I) Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction, (a) in Greater Bombay, the Court of Small Causes, Bombay shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates of hotels and lodging houses and evictions. 35. Section 4 of the Rent Act exempts certain premises from its operation but it does not exempt premises belonging to co-operative societies. It is common ground that the Rent Act applies to the premises in question. Section 11 of the Rent Act deals with the fixing of standard rent, and Section 12 provides that a landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act , and it lays down the procedure for the filing of a suit for the recovery of possession by landlord and for other matters. Section 13 provides that a landlord may recover possession of any premises under certain conditions. Section 28 provides for jurisdiction of the courts to deal with the suits and proceedings. Section 29 provides for appeals. 36. If the matter is heard by the Registrar, none of these provisions would apply. We can hardly imagine that it was the intention of the legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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