# [1969] 1 S.C.R. 887

- **Citation:** [1969] 1 S.C.R. 887
- **Court:** Supreme Court of India
- **Decided:** 1968-08-29
- **Case number:** Civil Appeal No. 358 of 1967
- **Bench:** S. M. SlKRI, R. S. BAcHAWAT, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1969-1-s-c-r-887-4536
- **Pages:** 17

## Headnote

Maharasht.ra Co-operative Societies- Act,
1960, s. 91 (1)-Expressions
"touching the business of the society" and "p.~rson claiming through a
member"-Scope of,--Confiict with provisions of Rent Act-Provisions
of lVhich Act to orevail.
S. 154-lf provides alternative remedy-Whether High Court has juris·
diction to interfere with interlocutory order of Registrar referring dispute
to arbitration.
The fourth respondent obtained a loan from the appellant bank, a
banking company established as a Co-operative Society under the Co-operative Societies Act, 1912, and mortgaged certain property with the bank
as security for the loan.
As he defaulted in the re-payment of the loan,
the property was transferred to the bank in May, 1963 under s. 100 of
the Maharashtra Ce>-operative Societies Act, 1960 and the physical possessiou also handed over to the bank. In the meantime, the fourth respondent had executed an agreement on June 29, 1961, which mentioned that
the property had been mortgaged to the appellant, and whereby the entire
ground-floor of the building was let to the first respondent on a monthly
rental of Rs. 250.
The bank called upon the first respondent to vacate the premises but
they refused to do so. On June 11, 1963, the bank applied to the District
Deputy Registrar, Co-operative Societies, Bombay, praying that the dispute
between the bank and the first respondent be, referred to arbitration and
stating that as the respondents claimed their rights through the original
owner, the fourth respondent, the dispute. wa:s capable of being referred
under s. 93 of the Act to the Registrar or his nominee for decision.
The
Assistant Registrar thereafter passed an order on June 19, 1963 to the
effect that he was satisfied there was a 'dispute' within
the meaning of
s. 91 (1) of the Act and 'referred it for the decision of his nominee, the
second resvondent.
T,he first respondent
challenged the Registrar's
order of Juoe 19,
1963 br a writ petition under Art. 226 of the Constitution. on the· grounds,
inter alia, that the alleged dispute did not fall within the scope of s. 91
of the Act; and that furthermore, in view of the provisions of s. 28 of
the Bombay Rents, Hotel and Lodging Rates Control Act, 1947, such a
dispute could only be determined under the provisions of that Act.
The
High Court allowed the petition holding that the first respondent could
not be said to be claiming through a member of the bank as a member
and consequently the dispute could not be the subject matter of reference
U•der s: 91 (I) (bl. It held, however,, that the words "touching the business
of the society" in s. 91 were very wide and would include any matter which
relates to or concerns o'r affects the business of the society.
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SUPREME COURT RF.PORTS
[1969]1 SCR.
On appeal to this Court by a certificate,
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HELD : dismissing the appeal :
( i) The word "business" in the expression "touching the business of
a society" m s. 91 (1) docs not mean affairs of the society. It has been
l7<iCd here in a. n~rro,vcr. sense a~d means the actual trading or commcrc1a1 dr_ orhcr s1n11la! husincs,c-; activity of the society which the society is
authorised to enter into under the Act and the Ruic'\ 11nd its hvc-la\\"S.
Jn
the prcsc_nt case the socicly wa~ a co-oper.itive hank
and o'rdinarily
a
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co-opcrattve bank cannot be s~ud to he engaged in busine-ss when it lets
out properlit--s o\l.·ncd by it.
Therefore the present disput-~
bct\\'Ccn a
lcnant of .a member of the hank in a huilding which had subsequently
been acquired by the bank could not be said to be a dispute touching
the business of the bank. [896 C, E·Fl
f"arkhundali v. Potdar, 63 B.l. ... R. 985; referred to.
(ii) The dio;putc in the present case \\·as not a dispute between a society
and a men1ber or a person claiming through a member.
Bcfor·~ a person
ean be s.1id 10 claim through a member, the claim should arise through
a transaction or dealing y,:hich the mcn1her entered into with the society as
a member

## Text

_Characters 0–39,928 of 45,395. This is a partial read: ask again with offset=39928 for what follows._

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DECCAN MERCHANTS CO-OPERATIVE BANK LTD.
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v.
M/S. DALICHAND JUGRAJ JAIN AND ORS.
August 29, 1968
[S. M. SlKRI, R. S. BAcHAWAT AND K. S. HEGDE, JJ.]
Maharasht.ra Co-operative Societies- Act,
1960, s. 91 (1)-Expressions
"touching the business of the society" and "p.~rson claiming through a
member"-Scope of,--Confiict with provisions of Rent Act-Provisions
of lVhich Act to orevail.
S. 154-lf provides alternative remedy-Whether High Court has juris·
diction to interfere with interlocutory order of Registrar referring dispute
to arbitration.
The fourth respondent obtained a loan from the appellant bank, a
banking company established as a Co-operative Society under the Co-operative Societies Act, 1912, and mortgaged certain property with the bank
as security for the loan.
As he defaulted in the re-payment of the loan,
the property was transferred to the bank in May, 1963 under s. 100 of
the Maharashtra Ce>-operative Societies Act, 1960 and the physical possessiou also handed over to the bank. In the meantime, the fourth respondent had executed an agreement on June 29, 1961, which mentioned that
the property had been mortgaged to the appellant, and whereby the entire
ground-floor of the building was let to the first respondent on a monthly
rental of Rs. 250.
The bank called upon the first respondent to vacate the premises but
they refused to do so. On June 11, 1963, the bank applied to the District
Deputy Registrar, Co-operative Societies, Bombay, praying that the dispute
between the bank and the first respondent be, referred to arbitration and
stating that as the respondents claimed their rights through the original
owner, the fourth respondent, the dispute. wa:s capable of being referred
under s. 93 of the Act to the Registrar or his nominee for decision.
The
Assistant Registrar thereafter passed an order on June 19, 1963 to the
effect that he was satisfied there was a 'dispute' within
the meaning of
s. 91 (1) of the Act and 'referred it for the decision of his nominee, the
second resvondent.
T,he first respondent
challenged the Registrar's
order of Juoe 19,
1963 br a writ petition under Art. 226 of the Constitution. on the· grounds,
inter alia, that the alleged dispute did not fall within the scope of s. 91
of the Act; and that furthermore, in view of the provisions of s. 28 of
the Bombay Rents, Hotel and Lodging Rates Control Act, 1947, such a
dispute could only be determined under the provisions of that Act.
The
High Court allowed the petition holding that the first respondent could
not be said to be claiming through a member of the bank as a member
and consequently the dispute could not be the subject matter of reference
U•der s: 91 (I) (bl. It held, however,, that the words "touching the business
of the society" in s. 91 were very wide and would include any matter which
relates to or concerns o'r affects the business of the society.
•
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888
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SUPREME COURT RF.PORTS
[1969]1 SCR.
On appeal to this Court by a certificate,
A
HELD : dismissing the appeal :
( i) The word "business" in the expression "touching the business of
a society" m s. 91 (1) docs not mean affairs of the society. It has been
l7<iCd here in a. n~rro,vcr. sense a~d means the actual trading or commcrc1a1 dr_ orhcr s1n11la! husincs,c-; activity of the society which the society is
authorised to enter into under the Act and the Ruic'\ 11nd its hvc-la\\"S.
Jn
the prcsc_nt case the socicly wa~ a co-oper.itive hank
and o'rdinarily
a
B
co-opcrattve bank cannot be s~ud to he engaged in busine-ss when it lets
out properlit--s o\l.·ncd by it.
Therefore the present disput-~
bct\\'Ccn a
lcnant of .a member of the hank in a huilding which had subsequently
been acquired by the bank could not be said to be a dispute touching
the business of the bank. [896 C, E·Fl
f"arkhundali v. Potdar, 63 B.l. ... R. 985; referred to.
(ii) The dio;putc in the present case \\·as not a dispute between a society
and a men1ber or a person claiming through a member.
Bcfor·~ a person
ean be s.1id 10 claim through a member, the claim should arise through
a transaction or dealing y,:hich the mcn1her entered into with the society as
a member.
In the present case
when
the original
ov.·ncr
executed
the lease. he v. as not acting as a member but ao; a mort~a.gor in possession,
and, therefore the bank's claim did not fall within s. 91 (I) (b) of the
Act. [898 B. CJ
E. C! .. 1i.1ulkern v. Jeanes Lnrd 4 A.C. 182: ,\forrison v. G/1H'('r;
154
E.R. 1281: l'rcnticc v. Lone/on,
\0, C.P. 679:
Pa/lisa v. Dale,
[1897]
I Q.B. 257; Jurfom \'. I::llrnncrc C/11h. [1948] All E.R. 844; S/irmn Cooperative Socict.v v. I~c;fnihai, 54 B.L.R. 517; Krishna Ayyar v: Urban
Bank, I.LR. (191.1]
56 Mad.
970; Ve~etola Lrd. v. Wlwlesa/e
Co-op.
Stores. ( 1956) 1 M.IJ.J. 36; 1\1t<n1mu Kevi v. Thirurangadi Co.operative
Rum/ Bank Lrd. I.LR. [1964] 1 Ker. 83; referred to.
1\fishrflnal v. District Co..opcrlltive GroHJCrs Association,
A.LR. 1961
1'.1.P. 40 and Kisanlal v. Co-cpcrative
Central
Hank 1.rd •. A.LR.
1946
Nag. 16; dis<tpprovcd.
(iii) Section 91 of the ~tahara<1htra Co-operative Societies Act does not
affect the provisions of -;. 28 of the Bomhay Rents, llotcl and
Lodging
Rates C<mtrol Act, 1947. Although hoth these provisions start by exclud·
ing "an)thing contained in any 01her law", the t\\'O Acts can he harmonized bi.;.:;r bv holding that in matters covered hy the Rent Act. it'> provisions r~l.'11cr ·than the provisions of the fi.1aha'rashtra Co-operative Societies
Act, should apply.
The latter Act was passed, in the main. to shorten
litigati0t1, lessen its costs and to provide a summarv procedure for the
detcrmiuation of the disputes relating to the internal management of the
societie:;.
Hut under the Renr Act a different social objective is intended
to be a.:hicvcd and for achieving that social objective it is necessary that
a dispuic hetwecn the landlord and the tenant -should he dealt \VJlh hy
1he Court-. s.ct up under the Rent Act and in accordance with the special
provisions of the Rent Act.
This social objective does not impinge on
the objective underlying the ~1aharashtra Co-0pcr~11ive Societies Act. (902
f-HJ
(iv) There "'·a-. no f?rce in ~he ~ontcn.tion that thc. lligh Court ~cted
·in excess of jurisdiction tn entcnng into d1si;>uted _quest1onco of ~act, ,1nter~
fering. with an interlocutory ordc~ and dealing with the c;Lc;e 1n spite of
an alternJtive remcdv bc1n~ ava1\ablc to the respondents under s. 154
·of the Act. The High Court has jurisdiction to go into disputed questions
of fact. and to quash <tn intcrlocutorv order even thc:iug~ some sort 8f
alternative remed\' exists under s. 154 of the Act.
Section 154 .of the
Act iriter alia enables the State Governmc~t to call for and
ex;im1nc the
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CO-OP. BANK v. DALICHAND (Sikri, J.)
88!)
record of any inquiry or the prooeedings of any other matter of "?Y
subordinate officer.
This remedy cannot be treated as an
alternative
remedy for the purposes of deciding the questions
raised by the
peti·
tioners. [903 BJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 358 of
1967.
Appeal from the judgment and order dated Februaty 26,
1965 and March 1, 1965 of the Bombay High Court in Misc.
Application No. 312 of 1963.
B. R. Naik, P. J. Vaidya, K. R. Chaudhuri and K. Rajendra
Chaudhuri, for the appellant.
S. T. Desai, F. Nariman, K. L. Hathi and Atiqur Rehman,
for respondent No. 1.
P. K. Chatterjee and S. P. Nayar, for respondents Nos. 2 arnd
3.
The J udgmcnt of SIKRI and HEGDE, JJ. was delivered by :>rKRI,
J. BACHAWAT, J. delivered a separate Opinion.
Sikri, J. This appeal by certificate granted by the High Court
of Judicature at Bombay is directed against its judgment allowing
the writ petition filed by the firm M/s. Dalichand Jugraj Jain, first
respondent before us-hereinafter referred to as the petitionersunder Art. 226 of the Constitution, and setting ·aside the order of
the Assistant Registrar (D), Co-operative
Societies,
Bombay,
referring the dispute between the petitioners
and the Deccan
Merchants Co-operative Bank Ltd., appellants before us-hereinafter referred to as the Bank.
We may mention that in the petition filed before the High
Court by the petitioners there were four respondents; the first
respondent was the Assistant Registrar (D), Co-operative Societies, Bombay, the second respondent was the Regisfrar's nominee;
the third respondent was the Bank and the fourth respondent
was Waman Wasudeo Wagh-hereinafter referred to as the original 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.
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 unler sub-s.(l) of
s.
91
of
the
Maharashtra Co-operative Societies Act, 1960 (Mah. Act XXXII
of 1961), hereinafter referred to as the Act.
Before we set out the relevant provisions of the Act it is necessary to state the relevant facts out of which the dispute ~rose.
The original owner on June 29, 1961, executed an agreement by
e.vhich he leased the entire ground-floor of building No. 195-197
Shaik Memon Street, Bombay, to the petitioners on a monthly
•
• 890
SlJPREME COl:RT REPORTS
[ 1969] I S.CR .
rent of Rs. 250.
Clause 6 of this agreement mentions that the
property had been mortgaged to the Bank. The appellant was
established as a Banking company in the year 1917 as a co-opcrntive society under the Co-operative Societies Act, 1912 (Central
Act) and they are deemed to be registered under the Act. The
01 iginal owner was the Chairman of the Bank, and he had taken
a loan from the Dank and as security for the due payment of th~
loan taken by him he had deposited the title deeds of the said
property with the !:lank, and thus mortgaged the bunding to the
Bank.
It appears that certain arbitration proceedings between
the
Bank and the original owner took place before the Registrar's
nominee, Bombay, and Greater Bombay, and a consent
aw~!rd
was given between the parties on October 26, 1961, under which
the original owner was ordered to pay to the Bank a sum of
Rs. 6,00.000 by certain instalments as therein provided. Clause
5 of the said consent award mentioned that the said immovable
property at 195-197 Shaik Memon Street, would continue as
security for the claims of the Bank till entire satisfaction. It
further appears that the original owner committed default
in
makin!! payment of the amount under the consent
award
and
thereupon. in execution of the said award, an order was made on
January 3, 1963. under s. 98 of the Act, for the sale of the said
property.
As the property could not be sold for want of buyers,
the Collector of l:lombay made an order and issued a ccrtiticah'
of transfer, dated May 13, 1963, under s. 100 of the
Act.
directing that the right, title and interest of the original owner in
the said property would be transferred to the Bank subject to the
terms and conditions laid down in the schedule to the said c~rti
ficate of transfer.
In accordance with the directions given 10 th~
Revenue Inspector, the Revenue Inspector of the Collector o:·
Bombay prepared a list of the tenants of the property on May 15,
1963, and furnished the same to the Bank. Physical possession
of the property was also handed over to the Bank.
On June 5, 1963, the Bank addressed a Jetter to the petitioners stating that the Bank had come to know that they were
occupying the entire ground-floor of the
building
(situate
at
195-197, Shaik Memon Road, Bombay) transferred to the Bank
under s. 100 of the Act, and further stating that their occupation
was unauthorised and otherwise illegal and they had neither any
right nor title nor interest to continue in occupation of the same.
The Bank called upon them to quit, vacate and deliver vacant
peaceful possession of the ponion of the building in their occupation within 48 hours from the receipt of this notice failing which
appropriate legal proceedings would be adopted.
The petitioners replied on June 24,
1963, challenging thQ.
transfer of the property to the Bank and also denying that they
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CO-OP. BANK V. DALlCHAND (~ikri, /.)
891 •
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 ss. 91-96 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.
It was stated in the application that the Bank, pursuant to
the certificate issued by the Collector under s. 100 of the Act, had
been put in possession of the building at No.
195-197 Shaik
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 Rates Control Act, 1947,
hereinafter referred to as the Rent Act, or the Transfer of Property Act. It was further stated that the other six respondents
were claiming through the original owner who was a member of
the Bank. It was further alleged that by virtue of the said certificate issued under s. 100 of the Act, the Bank was entitled to
vacant and peaceful possession of the suit premises by evicting
the seven respondents. It was also alleged that the dispute fell
within the ambit of ss. 91-96 of the Act and as such the same
was capable of being referred for decision under s. 93 of the Act.
It was inter alia prayed that the dispute be referred to the Registrar
or to his nominee or to his Board of nominees under ss. 91 to 96
of the Act for decision and the respondents be ordered to vacate
and deliver possession of the suit premises which was in their
possession. Compensation, interest and costs were also claimed.
On June 19, 1963, the Assistant Registrar passed the following
order :
"After going through the plaint mentioned above, I,
Shri G. V. Koimattur, Assistant Registrar,
C.S. (D)
Bombay, am satisfied that a "dispute" within the meaning of section 91 (1) of the Maharashtra Co-operative
Societies Act, 1960 exists in this case and the same is
therefore referred for decision to Shri K. C. Mandivkar,
Registrar's Nominee."
On July 2, 1963, the nominee passed an order summoning
the parties to appear before him on July 23, 1963. On Septem·
ber 6, 1963, the petitioners filed the petition under Art. 226 of
the Constitution.
After setting out the facts mentioned above
ands. 91 of the Act, it was submitted by them in the petition that
"aie dispute which is alleged in the said application dated 11th
June 1963, is not one which falls within the scope and ambit of
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SUPREME COL"RT REPORTS
(1969) I S.CR.
ihe said section 91 of the said Act and/ or between the parties
therein specified." It was further submitted that the dispute was
not one which touches the business of the Bank, and that the petitioners were not the persons claiming through a member of the
Bank.
It was also ;ubmittcd that in view of s. 28 of the Rent
Act, the dispute which had been referred by the Assistant Registrar to his nominee could only he detennined by the Court of
Small Causes. Bombay, and that the Assistant Registrar had no
iur;sdiction to refer the said dispute to his nominee 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.
The answer to the points raised in the petition depends in the
main on the proper interpretation of s. 9 I of the Act. The relevant provisions of the Act arc as follows
Section 91 runs :
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"91. (I ) Notwithstanding anything
contained
in
D
any other law for the time being in force, any dispute
touching the constitution. elections of the oflice-bcarers,
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 RegisE
trar, if both the parties thereto arc one or other of the
following :
la) 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
F
or deceased servant of the society, or the liquidator of
the society;
(b) a member. past member or a person claiming
through a member. past member or a deceased member
of a society, or a society which is a member of the
society;
(c) a person. other than a member of the society.
who has been granted a Joan by the
society, or with
whom the socictv has or had transactions
under the
provisions of section 45, and
any
person
claiming
through such a person;
(d) a surety of a member. past member or a deceased member. or a person other than a member who
has been granted a loan by the society under section 45,
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CO-OP. BANK V, DALICHAND (Sikri, J,)
'whether such a surety is or is not a member of the
society;
( e) any other society, or the Liquidator of such a
society.
( 2) When any question arises whether for the purposes of foregoing sub-section, a matter referred to for
decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final.
(3) Save as otherwise provided under sub-section
(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).
Explanation 1-A dispute between the Liquidator of
a society and the members of the same society shall
not be referred to the Registrar under the provisions of
sub-section (1).
Explanation 2-For the purposes of this subSf'.ction a dispute shall include-
( i) a claim for or against a Society for any debt or
demand due to it from a member or due from it to a
member, past member or the nominee, heir or legal representative of a deceased member or servant or employee, whether such a debt or demand be admitted or
not;
·
(ii) a claim by a surety for ariy sum or demand
due to him from the principal borrower in respect of a
loan by a society and recovered from the surety owing
to the default of the principal borrower, whether such a
sum or deman~ be admitted or not;
·
(iii) a claim by a society for any loss caused to it
by a member, past member or deceased member, by
any officer, past officer or deceased officer, by any agent,
past agent or deceased agent, or by any servant, past
s.~rvant or deceased servant, or by its committee, past
or present, whether such loss be admitted or not;
(iv) a refusal or failure by a member, past member or a nominee, heir or legal representative of a deceased member, to deliver possession to a society of
land or any other asset resumed by it for breach of
conditions of the assignment."
893
•
Sub-section ( 1) of s. 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 s. 91, the Registrar shali, subject to the rules, decide the dispute himself, or refer it for disposal
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SUPREME C01iRT REPORTS
[1969]1SCR.
to a nominee, or a board of nominees, appointed by the Re~istrar.
Seeiion 96 provides that when a dispute is rcli.:rred to arbitration,
the Registrar or his nominee or board of nominees
mav,
after
givi;ig a reasonable opportunity to the parties to the dispute to
be heard, make an award on the dispute.
This case was heard alongwith two other cases by the Bombay
High Court and various aucstions 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 decidin!! the question about the
existence of a disput.~ within the meaning of s. 9 I after
hearing the parties as the questions raised were general
questions which arose in many cases and the
parties
desired that the position in law might be clarified;
( 3) that the jurisdiction of the Court would
be
determined at the time of the institution of the suit when
the plaint is filed and the pica of the defendant would
not determine or change the forum;
( 4) that the question whether a dispute within the
meaning of s. 91 existed or not will have to be decided
hy reference to the avermcnts made in the application
for reference made under r. 75 of the Rules;
( 5) that the words "touching the husine8' of the
society" in s. 91 were very wide and would include any
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matter which relates to or concerns or aITects the busiF
ness of the society; in other words, the dispute need not
directly arise out of the business of the society but it
was enough if it had reference or relation to or concern
with its business;
( 6) that the dispute in regard to the possession of
the premises occupied by the petitio11P.rs can be said to
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touch the business of the Bank;
(7) that the words "claiming through a
member"
must be given their ordinary meaning, that is, deriving
title or rights through a member. At the
same time
weight must be attached to the word "member", and the
title or right claimed must b.e those to which a member
was entitled or which he could claim by virtue of his
being a member.
The words
"claiming
through
a
·member" therefore mean deriving such title or rights
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CO·OP. BANK V, DALICHAND (Sikri, .f_,)
through a member as the member possessed. or ~ad acquired by reason of his being a member or m his capacity as a member; and
( 8) that the petitioners cannot be said to be claiming through a member of the Bank as a memJ:>er; consequently clause (b) will not apply and the dispute between them and the Bank cannot be the subject-matter
of a reference under sub-section ( 1) of s. 91.
895
The learned counsel for the Bank, Dr. B.
Naik,
contends
that :
( 1) the High Court has act?d in excess of jurisdi~
tion and with material irregularity inasmuch as (a) 1t
has entered into disputed questions of fact; (b) !t has
interfered with an interlocutory order, and ( c) 1t has
dealt with the case in spite of an alternative remedy
being available to the petitioners under s. 154 of the
Act;
(2) assuming, without admitting, the
facts,
the
petitioners would be persons claiming through a member and accordingly the reference is good; and
(3) while making an order under s. 91(2) of the
Act the Registrar is concerned only with the avern1ents
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 fu~re 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 (J.etitioners should have
been heard before the case was referred to the Registrar's nominee
and, therefore, the reference is bad.
The principal questions which arise on the interpretation of
s. 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 s. 91 (1 )(b)?
The answer depends on the words used in the Act. Althouoh
number of cases have been cited to us on similar expressions co':i.-
tained in various other acts, both Indian and English, in the first
instance, it is advisable to restrict the enquiry to the terms of the
ei!actment itself, because the legislatures have been chanoino the
~ords and expanding the scope of references to arbitrato~s ~r to
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[ [ 969] J S.C. R.
the Regi.strars step by step.
The sentence,
namely,
"notwithstanding anything contained in any other law for the time being
in force·· ckarly ousts the jurisdiction of Civil Courts if the dispute falls squarely within the ambit of s.
91 (I). Five kinds
of uisputes are mentioned in sub-s. (I); first, disputes touching
the constitution of a society; secondly, disputes touching election
of the oflice-bcarers of a society; thirdly, disputes touching the
conduct of general meetings of a
society,
fourthly,
disputes
touching the management of a
society; and,
fifthly,
disputes
touchin~ the business of a society.
It is clear that the word
··ousi1v~ss" in this context docs not mean affairs of a society because election of oflice-bcarcrs, conduct of general meetings and
management of a society would be treated as affairs of a society.
In this sub-section the \\Ord '"business" has
been
used
in a
narrower sense and it means the actual trading or commercial or
other similar business activity of the society which the society is
authorised to enter into under the Act and the Rules and its bycJa,vs.
The question arises whether the dispute touchin.g the assets of
n society would be a dispute touching the business of a society.
This would depend on the nature of the society and the rules and
bye laws governing it.
Ordinarily, if a society owns buildings
and lets out parts of buildings which it does not require for its
own purpose it cannot be said that letting out of those parts is a
part of the business of the society.
But it may he that it is the
business of a society to construct and buy houses and let them
out to its .members.
Jn that case letting out property may be
part of its business. In this case, the society is a
co-operative
bank and ordinarily a co-operative hank
cannot be said to be
engaged in business when it lets out
properties
owned by it.
Therefore, it seems to us that the present dispute hetwecn a tenant
of a member of the bank in a building which has subsequently
been 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 .2ro1md.
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The Hieh Court had followed the observations of the Full
Bench of ihc Bombay High Court in 1.·arkl11111dali v. !'otdar!')
wherein it was ohserved :
G
'The nature of business. which a society docs, is to
be ascertained from the
objects of the society.
But
whatever the socictv does or is necessarily required to
do for the purpose <if carrying out its objects can be said
to be part of its business. The word "touching" is also
,·crv wide and would include any matter which relates
to, concerns or affects the husiness of the society."
·- .
(I)
6.l A.L.R. 91'5.
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CO-OP. BANK V. DALICHAND (Sikri, J.)
897
The Full Bench was construing s. 54 of the Bombay Cooperative Societies Act, 1925 (Bombay Act VII of 1925), which
inter alia, provides
"54( 1 )(a) If any dispute touching the constitution
or business of 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,
member or servant of the society past or present, it
shall be referred to the Registrar for decision by himself or his nominee."
The question before the Full Bench was whether it was. open to
an employee of a co-operative society to proceed agamst the
society in respect of a claim for wages either under the Payment
of Wages Act, 1936, or under s. 54 of the Bombay Co-operative
Societies Act, 1925.
While we agree that the nature of business which a society
does can be ascertained from the objects of the society, it is diffi·'
cult to subscribe to the proposition that 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. We, however,
agree that the word "touching" is very wide and would include
any matter which relates to or concerns the business of a society,
but we are doubtful whether the word "affects" should also be
used in defining the scope of the word "touching".
One other limitation on the word "dispute" may also be
placed and that is that the word "dispute" covers only those disputes which are capable of being resolved by the Registrar or
his nominee. It seems to us very doubtful that the word "dispu~e" would include a dispute between a landlord society and a
tenant when the landlord society has not been set up for the purpose of constructing or buying and letting out houses. In the
presence of various rent acts which give special privileges to
tenants it would be difficult to say that such disputes were intended to be referred to the Registrar. Of course, this result may
also follow from the interpretation of the Rent Act and the Cooperative Societies Act by applying other principles of construction.
·
This was the line of reasoning adopted by the House of Lords
in E. C. Mulkern v. James Lord(') in holding that "p~oceedings
ill. respect of accounts under a mortgage and sale of the property,
(1) 4 A.C. 182.
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St:PREME COl'RT REPORTS
[1969 J I S.C.R.
which might include title to redemption or a judgment of foreA
closure, were not such disputes, between the society and a member, as the statutes i Friend!\ Societies Act (I 0 Geo. 4, c. 56)
read with s. 4 of 6 & 7 Will.
4, c. 32] had contemplated.
The appeal must also fail on the ground that even if it is a
dispute touching the business of the society within the meaning
of s. 91 ( 1) of the Act, it is not a dispute between a society and
B
a member or a person claiming through a member. It seems to
us that bdorc a person can be said to claim through a member,
the claim >hould 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 c
of s. 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 s. 91 (I) (b).
It has been held in various cases in England that
disputes
refcrrable 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.
[Sec Morri.wm v. Glover(') Prentice
v. London(') l'al/iscr v. Dale(") J11dw11 v. L'l/esmere Club(')
Similar view was expresscJ hy the Bombay High Court in Shyam
Co-operative Society v. Ramibai ( 5 )
where Chagla
C.J..
ob-
~ervcd :
"Now, before a case can fall under s. 54
(of the
Bombay Co-operative Societies Act VII of 1925) .. it
is not sufficient that there should be a dispute touchmg
the business of the society. What is further required is
that the dispute must be between the society
and
its
member, and proper emphasis has not to be laid up\)n
the expression "member" used in this section. The dispute must be between the society and the men~ber as. a
member or qua a member.
It must he a dispute lll
which the member must he interested as a member. It
must relate to a transaction in which the member must
be interested as a member."
In Krishna Ayyar v. Urban /Jank(") it was held tha.t a dispute
between a legal practitioner. w~o was a member, a director a.nd
the legal adviser of a co-opcrattve. bank, and the
co-op~rauv,e
bank, arising out of matters relating . to the l~g~l pract1t10ner s
acts as the Bank's Vakil was not a dispute w1thm the Co-ope~a
tive Societies Act (II of 1912) or the Madras Co-operative
(!)
154 F.R. 1281.
(3)
(1897] 11 Q.B. 257.
(S)
54 Jl.l.R. 517.
(2)
10 C.P. 679.
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(4)
P9'l~] All I .ll. 844.
(6)
1.L.R. Jl9JJJ 56 ~1ad. 970·
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CO-OP. BANK V. DALICHAND (Sikri, J.)
89&
Societies Act, (VI of 1932). In coming to thi~ conclusion, the
learned Chiei Justice followed the law as stated m England.
He
observed :
"I think it is clear that both under the Building
Societies Act and the Friendly Societies Act in England
which contain somewhat similar provisions as regards
the settlement of disputes within the Society by
the
Reaistrar that, in order that such a dispute can be
de~t with by the Registrar, it must be a dispute between the Society and a member in his capacity as
1nember."
In Vegetola Ltd. v. Wholesale Co-op. Stores(') Rajamannar,
C.J., observed :
"Reading clauses (a), (b), (c) and (d) and subsection ( 1) of section 51, we think that by necessary
intendment, the dispute should be between the society
and member qua member ... For a claim to fall within
section 51, it shonld be a claim by the society against
a member as a member touching the business of a
society.
There may be a liability of a member to the
society which is not a liability incurred by the member
as member. Such a liability will be outside th.e scope
of section 51 ".
In Mammu Kevi v. Thirurangadi Co-operative Rural Bank,
Ltd. (2 ) it was held that a dispute between a society and the
owner of a godown who happens to be a member of the society
was not a dispute betwe~11J the society and a member qua a member within the ambit of s. 51 of the Madras Co-operative Societies Act, 1932. In coming to this conclusion the learned Chief
Justice followed Shyam Co-operative Society v. Ramibai('). and
dissented from Mishrimal v. District Co-operative Growers Association ( 4).
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(').
Srivata~a, 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 s. 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 "touchii:!g
the business of a society" would be rendered wholly superfluous.
(I) (1956) 1M.L.J.36.
(2) I.LR .. 19641 Ker. 83.
{'J)
54 B.L.R. 517.
(4) A.LR. 1961 M.P. 40.
(5) A.LR. 1946 Nag. 16.
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SUPREME COIJRT REPORTS
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In the Nagpur case [Kisan/a/ v. Co-op.1· Central Bank ( 1 )] the
A
plaintiff 1oint Hindu family were members of the co-Operative
Bank and they were also treasurers of the Bank.
It does
not
appear whether the treasurer had to be a member of the cooperative Bank or not. If he had to be a member then the conclusion of the Nagpur High Court in this
case that the dispute
between the Co-operative Bank and the plaintiffs relating to their
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liability which arose out of their capacity as treasurers was rekrrablc to the Registrar seems to be
correct. But if it was
not
necessary for the treasurer lo be a member then we arc doubtful whether the case was correctly decided.
The Nagpur High
Court was construing r. 26 of the Rules framed by the Provincial
Government in exercise of the powers conferred on it by s. 43 of
the Co-operative Societies Act, 1912.
Rule 26 ran as follows
C
"Any dispute touching the business of a co-operative
society between members or past members of the society
or persons claiming through a member or past member,
or between a member or past member or persons so
claiming and the committee or any officer,
shall
be
referred to the Registrar.''
The reasoning of the 'lagpur High Court docs not appeal to us.
Even if the expression "business of a co-operative society" occurring in the Ruic is treated as not restricted to· the dealings with
the members of the society only but to include business which
the co-operative societies under the law arc empowered to transact,
this does not mean that whenever a member enters
into
any
transaction whatsoever with the society and a dispute arises out
of that transaction then that dispute is a dispute between
the
societv and a member of the society within the meaning of r.
26. The High Court did not rest its conclusion on the words "or
any ofliccr" occurring in r. 26, althou~h it referred to the meaning of the ·word "officer"'.
Therefore, we
need
not consider
whether the decision can be sustained on that part of the Rule.
Jn our opinion. the view expressed by the Madras, Bombay
and Kerala High Courts is preferahle to the view expressed by
the !\ladhya Pradesh and the Nagpur High Courts.
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 memlier but as
a mortga~or in posst:ssion, and, therefore. the Bank's claim d6es
not fa!! within s. 91 (I) (b) of the Act.
This takes us to the point whether the Rent Act applies to
the facts of this case and, accordingly, the
jurisdiction of th;
Reoistrar is ousted and it is only the
Court of Small
Causes
which has jurisdiction to_ eject the petitioners.
(I) A.t.R. 1946 Nag. t6.
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CO·OP. BANK V. DAL!CHAND (Sikri, J.)
901
Th.~ scheme of !he various Rent Acts and the public policy
underlying them are clear; the policy is to give protection to. ~e
tenants.
Various powers have been conferred on the authon!Ies
under the Rent Acts to grant protection to the tenants against
ejectment and other reliefs claimed by the landlords. Section 28
of !he Rent Act inter alia provides :
"28. ( 1) Notwithstanding anything
contain.ed in
any law and notwithstanding that by reason of . the
amount of the claim or for any other reason, !he SUlt 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 possession of any premises
to which any of the provisions of this Part apply and
to decide any application made under this Act and to
deal with any claim or question arising out of this Act
or any of its provisions; and subject to the provisions
of sub-section (2), no other court shall have jurisdiction
to entertain any such suit, proceeding or application or
to deal with such claim or question ... "
•
This section, expressly bars the jurisdiction of other courts to
entertain any suit, proceeding or application between a landlord
and tenant relating to the recovery of possession of any premises,
and confers jurisdiction on the Courts mentioned in s. 28 to entertain the matter pending before the nominee of the Registrar. But
it is said that the Registrar is not a Court within the meaning of
s. 28 of the Act.
This Court held in Thakur Jugal Kishore
Sinha v. Sitamarhi Central Co-operative Bank Ltd. (1) that the
Assistant Registrar, Co-operative Societies, acting under s. 48 of
the Bihar and Orissa Co-operative Societies Act,
1935, was
functioning as a Court subordinate to the High Court for the purpose of s. 3 of !he Contempt of Courts Act,
1952. It was
urged before us that the Registrar is also a Court for the purposes
of s.