# ) MIS. ANITA ENTERPRISES AND ANR v. BELFER COOP. HOUSING SOCIETY LTD. & ORS

- **Citation:** [2007] 12 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2007-11-14
- **Case number:** Civil Appeal. Nos. 29902991 of2005
- **Bench:** B.N. Agra Wal, P.P. Naolekar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mis-anita-enterprises-and-anr-v-belfer-coop-housing-society-ltd-ors-22320
- **Pages:** 50

## Headnote

Rent Control and Eviction:
Bombay Rents, Hotel and Lodging House Rates (Control) Act, c
1947; Ss. 5(11), 15, 15(A) and 28/Tenancy Regulations 4 and 241
Maharashtra Co-operative Societies Act. 1960; Ss. 2, 22, 23, 29, 31,
41, 91, 93and143/Maharashtra Co-operative Societies Rules, 1961;
Rr.8, 10 & 28/Bye-Laws of the Society; Bye-Laws 2, 7, 12 & 64:
Eviction-Member-allottee of a flat from a Co-operative D
Housing Society inducting tenants-Filing of declaratory suits by
tenants-Dismissed by Small Causes Court-Appeal allowed by
appellate Bench of Small Causes Court holding that appellants were
inducted as tenants in the premises in question-Society raising a
di~pute before Co-operative Court praying/or eviction of tenants and E
for handing over possession to allottee of the flat-Co-operative
Court making an award in favour of the Society by passing an order
of eviction against the tenants-Challenged by tenants-Order of
appellate bench of Small Causes Court challenged by allottee-Single
Judge of High Court allowed writ petition filed by the allottee F
)
dismissing the writ petitionfiled by the tenants-Affirmed by Division
Bench vf High Court-Held: Although allottee not de ju re owner of
flat, infael. he enjoys all rights which an owner enjoys including right
to transfer the property subject to fit!jillment of certain conditionsSince allot tee is not tenant, he could not create sub-tenancy-He may G
not be a owner in the eye of fail' but could still be a landlord within
)
the meaning of Rent Act-Since creation of tenancy is infi·action of
mandat01y provisions uls. 29(2) of the Societies Act, transaction
between allottee and tenant in question voidable-Thus, relationship
I
H
2
SUPREME COURT REPORTS
[2007] 12 S.C.R.
A of landlord and tenant not duly created-Hence, appellants cannot
claim protection under the Rent Act and petition u/s.91 of the Societies
Act maintainable-The question regarding legality of creation of
tenancy right by member in favour of tenants, which amounts to
transfer of interest could be decided by raising a dispute before CoB operative Court--Under the circumstances, High Court was right in
not interfering with the order passed by appellate Court-Constitution
of India, 1950-Article 226.
Words and Phrases:
C
'Society', 'bye-laws', 'housing society', 'member', 'nominal
member' and 'prescribed '-Meaning of in the context of Maharashtra
Cooperative Societies Act, 1960.
Respondent No.1 was a tenant co-partnership housing society
constructing flats and respondent No.2 was admitted as member of
D the Society in the year 1962 and a flatwas allotted to him. He inducted
appellant No.1 in a room of the said flat on a certain monthly rental
and later he was inducted in another room as well on certain
additional monthly rental. Thereafter, another tenant, appellant N o.2;
was also inducted in yet another room of the flat in question on
E certain monthly rental. Respondent No.2 had accepted the rent up
to December, I 986. Thereafter, appellants sent rent by Cheques, but
the same was not accepted by him. Since, appellants were asked to
vacate the premises in question, they had filed declaratory suits in
the year 1987 before the Small Causes Court for a declaration that
F they were inducted as tenants in the premises in question.
Respondent No.2 contested the claim of the appellants. Both the suits
were dismissed by the trial Court. Appeal preferred by the appellants
before the appellate bench of Small Causes Court was allowed by
the Court holding that they were inducted as tenants in the premises
G in their occupation. In the meantime, respondent No.1 raised a
dispute before the Cooperative Court under S1ection 91 of the
Maharashtra Cooperative Societies Act, 1960 praying for eviction
of the appellants from the premises. The Cooperative Court by its
award decided the dispute in favour ofrespondent No.1, passing an
H order of eviction against appellants and directed respondent No.2,
. .
J
M/S.ANITAENTERPRISESv. BELFERCOOP.HOUSING

## Text

_Characters 0–38,978 of 111,873. This is a partial read: ask again with offset=38978 for what follows._

)
MIS. ANITA ENTERPRISES AND ANR.
A
v.
BELFER COOP. HOUSING SOCIETY LTD. & ORS.
NOVEMBER 14, 2007
B
[B.N. AGRA WAL AND P.P. NAOLEKAR, JJ.)
Rent Control and Eviction:
Bombay Rents, Hotel and Lodging House Rates (Control) Act, c
1947; Ss. 5(11), 15, 15(A) and 28/Tenancy Regulations 4 and 241
Maharashtra Co-operative Societies Act. 1960; Ss. 2, 22, 23, 29, 31,
41, 91, 93and143/Maharashtra Co-operative Societies Rules, 1961;
Rr.8, 10 & 28/Bye-Laws of the Society; Bye-Laws 2, 7, 12 & 64:
Eviction-Member-allottee of a flat from a Co-operative D
Housing Society inducting tenants-Filing of declaratory suits by
tenants-Dismissed by Small Causes Court-Appeal allowed by
appellate Bench of Small Causes Court holding that appellants were
inducted as tenants in the premises in question-Society raising a
di~pute before Co-operative Court praying/or eviction of tenants and E
for handing over possession to allottee of the flat-Co-operative
Court making an award in favour of the Society by passing an order
of eviction against the tenants-Challenged by tenants-Order of
appellate bench of Small Causes Court challenged by allottee-Single
Judge of High Court allowed writ petition filed by the allottee F
)
dismissing the writ petitionfiled by the tenants-Affirmed by Division
Bench vf High Court-Held: Although allottee not de ju re owner of
flat, infael. he enjoys all rights which an owner enjoys including right
to transfer the property subject to fit!jillment of certain conditionsSince allot tee is not tenant, he could not create sub-tenancy-He may G
not be a owner in the eye of fail' but could still be a landlord within
)
the meaning of Rent Act-Since creation of tenancy is infi·action of
mandat01y provisions uls. 29(2) of the Societies Act, transaction
between allottee and tenant in question voidable-Thus, relationship
I
H
2
SUPREME COURT REPORTS
[2007] 12 S.C.R.
A of landlord and tenant not duly created-Hence, appellants cannot
claim protection under the Rent Act and petition u/s.91 of the Societies
Act maintainable-The question regarding legality of creation of
tenancy right by member in favour of tenants, which amounts to
transfer of interest could be decided by raising a dispute before CoB operative Court--Under the circumstances, High Court was right in
not interfering with the order passed by appellate Court-Constitution
of India, 1950-Article 226.
Words and Phrases:
C
'Society', 'bye-laws', 'housing society', 'member', 'nominal
member' and 'prescribed '-Meaning of in the context of Maharashtra
Cooperative Societies Act, 1960.
Respondent No.1 was a tenant co-partnership housing society
constructing flats and respondent No.2 was admitted as member of
D the Society in the year 1962 and a flatwas allotted to him. He inducted
appellant No.1 in a room of the said flat on a certain monthly rental
and later he was inducted in another room as well on certain
additional monthly rental. Thereafter, another tenant, appellant N o.2;
was also inducted in yet another room of the flat in question on
E certain monthly rental. Respondent No.2 had accepted the rent up
to December, I 986. Thereafter, appellants sent rent by Cheques, but
the same was not accepted by him. Since, appellants were asked to
vacate the premises in question, they had filed declaratory suits in
the year 1987 before the Small Causes Court for a declaration that
F they were inducted as tenants in the premises in question.
Respondent No.2 contested the claim of the appellants. Both the suits
were dismissed by the trial Court. Appeal preferred by the appellants
before the appellate bench of Small Causes Court was allowed by
the Court holding that they were inducted as tenants in the premises
G in their occupation. In the meantime, respondent No.1 raised a
dispute before the Cooperative Court under S1ection 91 of the
Maharashtra Cooperative Societies Act, 1960 praying for eviction
of the appellants from the premises. The Cooperative Court by its
award decided the dispute in favour ofrespondent No.1, passing an
H order of eviction against appellants and directed respondent No.2,
. .
J
M/S.ANITAENTERPRISESv. BELFERCOOP.HOUSING
3
SOCIETY LTD.
member to occupy the premises. The order was affirmed in appeal A
by the Appellate Court. Later, before the High Court three writ
petitions were filed, one by the appellants and the other two writ
petitions by respondent No.2 against the order passed by the
appellate bench of the Small Causes Court. A Single Judge of the
High Court, by a common judgment, dismissed the writ petition filed B
by the appellants and allowed the writ petitions filed by respondent
No.2. The said judgment was upheld by Division bench of the High
Court. Hence the present appeals.
Appellant-tenants contended that respondent no. 2 in his C
capacity as member of the housing society- has a possessory right
in the premises in question and the Society was only, by way oflegal
fiction, owner of the said premises; that there was no relationship
of landlord and tenant between the Society and the member and
there was such a relationship existed between the member and the
appellants, as such, they were entitled to claim protection under the D
Bombay Rents, Hotel and Lodging House Rates Control Act, 1947;
that the proceeding under S. 91 of the Societies Act was not
maintainable in view of the bar incorporated under S. 28 of the Rent
Act; that the Society was not justified in contending that there was
relationship of landlord and tenant between the Society and the E
member and consequently the appellants cannot be said to be subtenants of the member as creation of sub-tenancy was forbidden
under S.15 of the Rent Act unless there was contract to the contrary,
which was not so in the case on hand and, consequently such a subtenant cannot be treated .to be a tenant within the meaning ofS. 5(11) F
of the Rent Act; and that the tenancy right could be created by the
member as the transfer by him of his right in the premises was not
forbidden in law.
Respondent-Society submitted that the relationship between the G
Society and respondent No.2, as would appear from Bye-Laws of
the Society as well as Regulations, was that of landlord and tenant
in respect of the premises held by the Society and the member
purported to create right ofa sub-tenant in the appellants which was,
in the absence of any contract to the contrary, forbidden by S. I 5 of H
4
SUPREME COURT REPORTS
[2007] 12 S.C.R.
A the Rent Act, as such the appellants having not acquined the status
of a tenant within the meaning of the Rent Act, cannot claim
protection thereunder from eviction; that asking the Society to first
seek such a declaration from a competent civil court a1J1d thereafter
raise a dispute under Section 91 of the Societies Actwoudd frustrate
B the very object of the Societies Act; that as the appellants had
already filed suits before the Small Causes Court for ~1 declaration
that their status was that of tenants under the Rent Act and it was
open to the Society to raise the question that the relationship of
landlord and tenant was not duly created; and that as the relationship
C oflandlord and tenant was not duly created, the appellants could not
claim protection of the Rent Act and the petition und1er Section 91
of the Societies Act was maintainable as the dispute raised was
touching upon business of the Society.
D
Dismissing the appeals, the Court
HELD: 1.1. Respondent No.2 remained in possession of the
premises in question for a period of more than one year before
induction of the appellants therein as tenants. Induction of
appellants as tenants by the member amounted to transfer of interest
E by the member in the premises in question, which was property of
the Society, and the appellants were neither members of the Society
nor can be said to be persons whose application for membership had
been accepted by the Society or persons whose appeal under Section
23 of the Societies Act had been allowed by the Registrar or persons
F who were deemed to be members under Sub-section (:IA) ofS. 23 of
the Societies Act. The appellants were inducted without the consent
of either the Society or its Managing Committee and rn~ver admitted
as nominal members of the Society. [Para 6] (13-B-E[
1.2. Section 28 of the Bombay Rents, Hotel and Lodging House
G (Rates) Control Act, which starts with a non-obstante clause, lays
down that suit or proceeding between a landlord and a tenant relating
to recovery ofrent or possession of any premises to which provisions
of Rent Act apply shall be entertained by a court enumerated
thereunder and no other court shall have jurisdiction to entertain
f I any such suit, proceeding or application or to deal with such claim
~
MIS.ANITA ENTERPRISES v. BELFER COOP. HOUSING
5
SOCIETY LTD.
~
or question. [Para 23] [40-G-H]
A
1.3. Under Rule 10(1)(5)(a) of the Maharashtra Co-operative
Societies Rules 'tenant ownership housing society' has been defined
to mean housing society where land is held either on leasehold or
freehold basis by the societies and houses are owned by its B
members, whereas under Rule (10(1)(5)(b) in case of 'tenant co-
"
partnership housing society', the society holds both land and
buildings either on leasehold or freehold basis and allots them to its
members. In the case of tenant co-partnership housing society, it is
clear from the Rules that the ownership of the land and building both c
remains with the society and member cannot be said to be cp-owner,
but in the case of tenant ownership housing society, the ownership
of the land remains with the society, but ownership of the building/
flat vests in the member. So far as tenant within the meaning of
Section 5(11) of the Rent Act is concerned, he has a mere right to
occupy. He is entitled to the protection of the Statute so long as D
grounds for eviction are not made out and can be evicted only by
instituting a suit in a court enumerated under Section 28 of the Rent
Act. [Para 24) [40-D-G]
1.4. According to the definition of' landlord' under Section 5(3) E
of the Rent Act, landlord is a person who is for the time being
receiving or entitled to receive rent and under Section 5(11) a tenant
is liable to pay rent, but in view of the observations of this Court in
the case of Sanwarmal Kejriwal, neither the society is entitled to
receive rent from the member nor member is liable to pay any rent
to the society after the entire value of the land and cost of F
construction of the building together with interest on its value has
been paid. [Para 26] [42-B-C]
Sanwarmal Kejriwalv. Vishiva Cooperalive Housing Society Ltd.,
[1990] 2 sec 288, relied on.
G
"'
1.5. Ifit is held that the society is a landlord and the member is
a tenant within the meaning of the Rent Act, in that event the society
can evict the member by filing a suit for eviction ifit requires the
premises for its bona fide need, but under the Societies Act, it can H
6
SUPREME COURT REPORTS
[2007] 12 S.C.R.
A evict the member only as a consequence of his expulsion from the
membership and neither under the Societies Act nor Rules framed
thereunder nor Bye-Laws nor Regulations there is amy provision
that a Society can evict a member in case it has got bona fide need
of the same. The said interpretation would be contrary to the object
B of the Societies Act. [Para 27] [42-E-H]
c
1.6. The status of a member in a tenant co-partnership housing
society is very peculiar. The ownership of the land and building both
vests in the society and the member has, for all practical purposes,
right of occupation in perpetuity after the full value of the land and
building and interest accrued thereon have been paid by him.
Although dejure he is not owner of the flat allotted to him, but, in
fact, he enjoys almost all the rights which an owner enjoys, which
includes right to transfer in case he fulfills the two pre-conditions,
namely, he occupies the property for a period of one year and the
D transfer is made in favour of a person who is already a member or
a person whose application for membership has been accepted by
the society or whose appeal under S. 23 of the Societi1~s Act has been
allowed by the Registrar or to a person who is deemed to be a
member under sub-section (lA) of Section 23 of the Societies Act.
E In case any of these two conditions is not fulfilled, a member cannot
be said to have any right of transfer. Thus, the law laid down by this
Court in the case of Sanwarmal Kejriwal is reiterated that a member
has more than a mere right to occupy the flat, meaning thereby higher
than tenant, which is not so in the case of a tenant within the meaning
F of Section 5(11) of the Rent Act. This being the position, there is no
difficulty in coming to the conclusion that the status of a member in
the case of tenant co-partnership housing society cannot be said to
be that of a tenant within the meaning of Section 5{11) of the Rent
Act, as such there was no relationship oflandlord andl tenant between
G the Society and the member. [Para 28142-C-F)
H
Samrarmal Keirill'lil v. Vislnra ( 'ooperative Housing Society Ltd,
[199012 sec 288, relied on.
2.1. The status of the member was higher th.an a tenant and
\-
MIS. ANIT AENTERPRISESv. BELFERCOOP. HOUSING
SOCIETY LTD.
7
although de Jure he was not an owner but, for all practical purposes, A
he was exercising almost all the rights of an owner, excepting
absolute right of transfer, he not being the tenant, there is no question
of his creating sub-tenancy in favour of the appellants. A member
may not be an owner of the flat in the eye oflaw but he may still be
·a landlord within the meaning of the Rent Act which does not B
necessarily postulate a landlord to be an owner of the property, but
if a person is entitled to receive rent or receiving rent he may be
treated to be a landlord within the meaning of the Rent Act.
[Para 29] [43-D-F]
2.2. In the present case, the purported creation of tenancy right C
in favour of the appellants was in infraction of the provisions ofS.
29(2) of the Societies Act whereunder there is a legislative command
to the member not to transfer his interest in the property of the
Society unless the conditions mentioned therein are fulfilled. In the
present case, the first pre-requisite condition is fulfilled, but so far D
as the second one is concerned, the appellants who claim to be
tenants were not existing members of the Society nor they ever filed
any application for membership of the Society, much less its
acceptance nor it has been claimed that they shall be deemed to have
become members of the Society under sub-section (IA) ofS. 23 of E
the Societies Act. [Para 29] [43-G-H; 44-A-C]
3.1. There is infraction of the provisions of Section 29(2) of the
Societies Act. It has to be seen whether sub-section (2) of Section
29 is mandatory or directory. From the scheme of the Societies Act, F
the Rules, Bye-Laws and Regulations it would be clear that in a case
of tenant co-partnership society the ownership of the land and the
building both vest in the society and the premises is allotted to the
member for his occupation only and not for the purpose of occupation
of anybody else. That is the object of the Societies Act as would G
appear from bye-law 2, i.e., 'for use of the member', meaning thereby
his own use. [Para 30] [44-D-E]
3.2. Keeping in mind the language ofS. 29(2) of the Societies
Act, which is in the nature of injunction upon the right of a member
to transfer unless the twin conditions are fulfilled, and the purpose H
8
SUPREME COURT REPORTS
(2007] 12 S.C.R.
(
A for which the house is allotted to a member, i.e., for his self occupation,
-~
it cannot be said in any manner that the said provision is directory
as giving such an interpretation would frustrate object of the
Societies Act whereunder a flat is allotted to a member for his selfoccupation as would appear from the Societies Act, Rules, Bye-Laws
B and Regulations. Hence, the provisions of Section 29(2) of the
Societies Act are mandatory. [Para 30] (44-F-H; 45-A]
3.3. While dealing with the provisions of S. 29(2) of the Societies
Act, the Court was also having in mind that under S. 47(3) of the Act
c
ifthe transfer is in infraction of the provisions of S. 47(2) the same
has been declared to be void, by the Statute itself whereas in a case
of infraction of S. 29(2) of the Societies Act, the Statute is silent.
[Parn31] [45-C)
Ramesh Himmatlal Shah v. Harsukh Jadhaiji Joshi, [1975] 2 SCC
D 105, distinguished.
Sanwarmal Kejriwal v. Vishwa Cooperative Housing Society Ltd,
[1990) 2 sec 288, held inapplicable.
3.4. In case there is infraction of a mandatory provi1sion, in that
E event the transaction cannot be said to be void but would obviously
be voidable and once avoided, the relationship oflandlord and tenant,
i.e., between the member and the appellants cannot be said to have
been duly created, meaning thereby, in accordance with law. Thus,
there is no difficulty in holding that the relationship oflandlord and
F tenant between the appellants and the member was not duly created,
as such the appellants would not be entitled to claim protection under
the Rent Act and the bar created under Section 28 of the Rent Act
would not operate. [Para 33] [47-B-D]
4. In the present case, the factum of creation of tenancy has
G not been disputed, but what has been disputed is its legality. As the
creation of tenancy was in infraction of mandatory provisions ofS.
29(2) of the Societies Act, it was voidable and invalid in law although
..
not void and the Small Causes Court was not only competent to decide
the same but obliged under law to go into the same before granting
H or refusing relief to the plaintiff as the same was a point in issue in
)
MIS.ANITA ENTERPRISES v. BELFER COOP. HOUSING
9
SOCIETY LTD.
those suits. This being the position, the High Court was justified in A
setting aside the decrees passed by the appellate bench of the Small
Causes Court and restoring those of the Small Causes Court
whereby suits for declaration were dismissed after recording a
finding that there was no relationship oflandlord and tenant between
the member and the appellants who were consequently not entitled B
to claim protection under the Rent Act and no interference by this
Court is called for. [Para 34] [48-A-D)
5.1. It is true that ordinarily in case of a transaction like the
present one which is voidable and not void, if an aggrieved party
intends to avoid the same it is required to obtain a decree from a C
competent civil court by filing a properly constituted suit. But in a
case like the present one, if a party is first asked to obtain a decree
from a competent civil court and only thereafter raise a dispute which
is undisputedly touching upon the business of the society under S.
91 of the Societies Act, the same would frustrate the provisions of D
Section 91 and the intention of the Legislature in incorporating a
cheap and expeditious remedy by referring the same to a court
constituted under the Societies Act instead of throwing a party to
cumbersome procedure of moving a civil court. jPara 35)
5.2. The dispute raised in the present case, undoubtedly, touches
upon business of the Society which is a condition precedent for the
applicability ofS. 91 of the Societies Act. [Para 36) [49-B]
E
5.3. It is part of business of the Society to see that the house/
flat allotted to a member remains in his occupation or in occupation F
of any other member and ifany non-member intends a transfer in
his favour, like the present one, he is required to obtain previous
consent in writing either of the Society or its Managing Committee
and in the event of consent being accorded, the Society shall admit
him as a nominal member in which eventuality only the transfer can G
be made in his favour. Under Section 91 of the Societies Act, the
Society was well within its right to get a dispute adjudicated as to
whether the member had, by inducting the tenants in the flat, who
were non-members, made a transfer in contravention of the
provisions of S. 29(2) of the Societies Act. Thus the question H
10
SUPREME COURT REPORTS
[2007] 12 S.C.R.
A regarding legality or othenvise of the creation of tenancy right by
the member in favour of the appellants, which amounts to transfer
of interest of a member in the property of the Society, can be decided
by raising a dispute before the Cooperative Court. [Para 36)
6.1. The only dispute raised before the Cooperative Court was
B as to whether transfer made by a member in favour of a so-called
transferee/tenant thereby purporting to create a tenancy right in his
favour was in infraction of the mandatory provisions ofS. 29(2) of
the Societies Act, as such the same was touching upon business of
the Society. In case Cooperative Court decides such a dispute in
C favour of the Society in that eventuality the so-called transferee/
tenant would not be entitled to claim any protection under the Rent
Act, the bar provided under S. 28 of the Rent Act would not operate
and consequently the petition under S. 91 of the Societies Act would
be maintainable. [Para 37) [49-G-H; 50-AJ
D
6.2. The case of Nanakram v. Kundalrai is quite distinguishable
and shall have no application to the present case as here there was
infraction of mandatory provisions ofS. 29(2) of the Societies Act.
Thus, the question regarding legality or otherwise of creation of
E relationship of landlord and tenant between the member and the
appellants could have been gone into by the Cooperative Court under
S. 91 of the Societies Act as it touches upon business of the Society
and the High Court has not committed any error in not i1nterfering
with the order passed by appellate court confirming that rendered
F by the Cooperative Court. [Para 38] [50-E-F]
Nanakram v. Kundalrai, [1986] 3 SCC 83, distingui1shed.
CIVIL APPELLATE JURISDICTION: Civil Appeal. Nos. 29902991 of2005.
G
From the final Judgment and Order dated 25.8.2004 & 5.7.2001
of the High Court of Judicature of Bombay in Letters Patent No. 217 of
2001 & Writ Petition No. 2253 of2001 respectively.
WITH
H
C.A. Nos. 2992-2995 of 2005.
..
'1
1
MIS.ANITA ENTERPRISES v. BEL FER COOP. HOUSING
11
SOCIETY LTD. [B.N.AGRA WAL,J.]
D.M. Nargolkar for the Appellant.
U.U. Lalit, Ravindra Keshavrao, Adsure, Gaurav Agarwal, Prashant
Kumar and V.N. Raghupathy for the Respondents.
TI1e Judgment of the Court was delivered by
B.N. AGRAWAL, J. 1. These appeals by special leave have been
A
B
filed against separate orders rendered by a Division Bench of the Bombay
High Court in Letters Patent Appeals whereby the same have been
dismissed as not maintainable, thereby confirming the common judgment
rendered by a learned Single Judge of the High Court in three writ petitions
filed under Article 227 of the Constitution oflndia [hereinafter referred C
to as 'the Constitution'].
2. The facts, in brief, are that the Belfer Cooperative Housing Society
Limited, Bandra [West], Mumbai, respondent No. 1 in Civil Appeal Nos.
2990-299l·of2005, [hereinafter referred to as 'the Society'], which was D
a tenant co-partnership housing society, held both lands and flats
constructed thereon and Dr. Gopal Malmdeo Dhadphale, respondent No.
2 in the said appeals [hereinafter referred to as 'the member'] was admitted
as member of the Society in the year 1962 and flat No. 4 on the ground
floor was allotted to him. On 3.6.1982, the member inducted Mis. Anita E
Enterprises, appellant No. 1 in the said appeals, in room No. 2 of the
said flat on a monthly rental of Rs. 1000/- and on 3.10.1983 the appellant
aforementioned was inducted in room No. 3 as well on a monthly rental
of Rs. 750/-. The member thereafter inducted Mis. Anita Medical Systems
Pvt. Ltd., appellant No. 2 in the said appeals, in room no. 1 of the flat in F
question on a monthly rental of Rs. 1000/- which was subsequently
enhanced to Rs. 1500/- per month and both the appellants were put in
possession of the aforesaid premises. The appellants paid rent upto the
month of December, 1986 and as the member refused to accept the rental
from January, 1987, the rental was sent to him by cheques under registered G
post, but the same was not accepted.
3. Thereupon, the appellants were asked to vacate the premises in
question which necessitated filing of two separate suits by them in the year
1987 before the Small Causes Court for a declaration that they were
tenants with regard to the aforesaid premises of which they were in H
12
SUPREME COURT REPORTS
[2007] 12 S.C.R.
A occupation and for perpetual injunction restraining the member from
interfering in any manner with their possession over the premises in
question in which suits only the member was made party and not the
Society. The member in the said suits contested the claim of the appellants
and both the suits filed by the appellants were dismissed by the trial court
B upon a finding that the appellants were not inducted as tenants in the suit
premises. But on appeal being preferred to the appellate bench of the
Small Causes Court, the same were decreed and it was held that the
appellants were inducted as tenants in the premises in their occupation.
4. In the meantime, the Society raised a dispute in the year 1989
C before the Cooperative Court under Section 91 of the Maharashtra
Cooperative Societies Act, 1960 [hereinafter referred to as 'the Societies
Act'] praying therein that the appellants be evicted from the premises in
their occupation and the member be directed to occupy the same as,
according to the Society, the member had parted with possession of the
D premises in question in favour of the appellants which was not permissible
in law. The said case was contested by the appellants in which th1~ member
and the appellants entered appearance and all contested the claim of the
Society. 1be Cooperative Court by its award decided the dispute in favour
of the Society, passed an order of eviction against the appellants and
E directed the member to occupy the premises. The said order was upheld
in appeal.
5. Thereafter, before the High Court three writ petitions were filed
- one by the appellants against the aforesaid order passed by the appellate
F court upholding order passed by the Cooperative Court and the other
two writ petitions by the member against the order passed by the appellate
bench of the Small Causes Court whereby aforesaid declaratory suits filed
by the appellants were decreed. A learned Single Judge of the High Court,
by a common judgment, dismissed the writ petition filed by the appellants
G whereby order passed by the Cooperative Court against the member and
the appellants, which was upheld in appeal, has been confim1ed and
allowed the writ petitions filed by the member, set aside judgment and
order passed by the appellate bench of Small Causes Court and restored
that of the t:tial court whereby declaratory suits filed by the appellants were
dismissed. The said judgment has been upheld by Division Bench of the
H
M/S.ANITAENTERPRISESv. BELFERCOOP.HOUSING
13
SOCIETY LTD. [B.N.AGRA WAL,J.]
High Court by dismissing the Letters Patent Appeals on the ground that A
the same were not maintainable in view of the fact that the writ petitions
were filed under Article 227 of the Constitution. Hence these appeals by
special leave.
6. Undisputed facts are stated hereinafter. The Society was a tenant B
co-partnership housing Society, the land and the structures standing
thereon, which include the premises in question, were held by it, respondent
no. 2 was admitted as its member, allotted flat No. 4 and put in possession
thereof The appellants are in occupation of the premises in question since
the date of their induction aforementioned and the member remained in
possession of the premises for a period of more than one year before C
induction of the appellants therein. Induction of appellants as tenants by
the member amounted to transfer of interest by the member in the premises
in question, which was property of the Society, and the appellants were
neither members of the Society nor can be said to be persons whose
application for membership had been accepted by the Society or persons D
whose appeal under Section 23 of the Societies Act had been allowed
by the Registrar or persons who were deemed to be members under
Section (IA) of Section 23 of the Societies Act. The appellants were
inducted without the consent of either the Society or its Managing
Committee and never admitted as nominal members of the Society.
E
7. Shri Sheklmr Naphade, learned senior counsel appearing on
behalf of the appellants in support of the appeals, submitted that
respondent no. 2 - in his capacity as member of the tenant co-partnership
housing society -has a possessory right in the premises in question and F
the Society was only, by way oflegal fiction, owner of the said premises.
It was further submitted that there was no relationship oflandlord and
tenant between the Society and the member and there was such a
relationship between the member and the appellants, as such, the
appellants were entitled to claim protection under the Bombay Rents, Hotel G
and Lodging House Rates Control Act, 194 7 [hereinafter referred to as
'tl1e Rent Act') and the proceeding under Section 91 of the Societies Act
was not maintainable in view of the bar incorporated under Section 28
of the Rent Act. According to him, the Society was not justified in
contending that there was relationship oflandlord and tenant between the H
14
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[2007] 12 S.C.R.
A Society and the member and consequently the appellants cannot be said
to be sub-tenants of the member as creation of sub-tenancy was forbidden
under Section 15 of the Rent Act unless there was contract to the contrary,
which was not so in the case on hand and, consequently such a sub-tenant
cannot be treated to be a tenant within the meaning of Section 5(11) of
B the Rent Act. It was also submitted that the tenancy right could be created
by the member as the transfer by him of his right in the premises was not
forbidden in law, therefore, the Society was not justified in contending
that relationship of landlord and tenant was not duly created inasmuch as
even ifthere was restrictive right of transfer and not absolute one ifthe
C tenancy was created in infraction of the same, the transaction creating
tenancy right in the appellants by the member cannot be said to be void
as such and if a party wanted to avoid the same, it was required to move
a competent civil court for a declaration that the same was invalid in law
as the said transaction can, at the highest, be said to be voidable and the
D said question cannot be examined by a Cooperative Court purporting to
act under Section 91 of the Societies Act.
8. On the other hand, Shri U.U. Lalit, learned senior counsel
appeaiing on behalf of the Society, submitted that the relationship between
the Society and the member, as would appear from the Bye-Laws of the
E Society as well as Regulations, was that oflandlord and tenant in respect
of the premises held by the Society and the member purported to create
right of a sub-tenant in the appellants which was, in the absence of any
contract to the contrary, forbidden by Section 15 of the Rent Act, as such
t11e appellants having not acquired the status of a tenant within the meaning
F of the Rent Act, cannot claim protection thereunder from eviction.
Alternatively, it was submitted that even if it was treated that there existed
no relationship ofla11dlord a11d tenai1t between the Society ai1d the member
and relationship of la11dlord and tena11t was created between the member
and the appellants, the same was not valid in law as it was not duly created
G in view of the fact that such a transaction being in violation of the
provisions of Section 29 of the Societies Act, was invalid as the transfer
made was, though entered into after completion of period of one year of
occupation of the member, to a non-member which was forbidden by law,
as would appear from the said provisions a11d the Bye-Laws of the Society
H and its legality or otherwise could have been examined in a dispute raised
'
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MIS. ANITA ENTERPRISES v. BELFERCOOP. HOUSING
15
SOCIETY LTD. [B.N.AGRAWAL,J.]
Junder Section 91 of the Societies Act. It was then submitted that asking A
the Society to first seek such a declaration from a competent civil court
and thereafter raise a dispute under Section 91 of the Societies Act would
frustrate the very object of the Societies Act. It was further submitted
that in any view of the matter, in the present case as the appellants had
already filed suits before the Small Causes Court for a declaration that B
their status was that of tenants under the Rent Act, in which it was open
to the Society to raise the question that the relationship oflandlord and
tenant was not duly created, meaning thereby not in accordance with law
but contrary to law and for granting relief to the appellants therein the
Court was called upon to go into this question and decide the same. c
Learned counsel also submitted that as the relationship of landlord and
tenant was not duly created, the appellants could not claim protection of
the Rent Act and the petition under Section 91 of the Societies Act was
maintainable as the dispute raised was touching upon business of the
Society.
D
9. In view of the rival submissions, the following questions fall for
our consideration in these appeals:-
] . Whether status of a member in a tenant co-partnership housing
society is that of a tenant or landlord within the meaning of E
the Rent Act and consequently there was any relationship of
landlord and tenant between the society and its member?
2.
Whether purported status of the appellants, who were
inducted by the member in the premises in question was that
of a tenant or sub-tenant within the meaning of Section 5(1 I) F
of the Rent Act and if it is held to be a tenant whether the
relationship of landlord and tenant between them was duly
created so as to claim protection from eviction under the Rent
Act?
3.
Whether the question regarding legality or otherwise of G
creation of tenancy right between the appellants and the
member of the Society could be adjudicated by the Small
Causes Court in suits filed by the appellants against member
of the Society for declaration that there was relationship of
landlord and tenant between them and the High Court was H
A
B
c
16
SUPREME COURT REPORTS
[2007] 12 S.C.R.
justified in restoring decree passed by the trial court to the
effect that there was no relationship oflandlord and tenant
between the appellants and member of the Society?
4.
Whether the matter regarding legality or otherwise of creation
of tenancy right between the appellants and the member could
be adjudicated by the Cooperative Court in dispute raised
under Section 91 of the Societies Act before the Cooperative
Court or the Society before raising any such dispute was
required to obtain a declaratory decree from competent civil
court by filing a properly constituted suit before it?
10. In order to appreciate the points involved in these appeals, it
would be useful to refer to the relevant provisions of the Societies Act,
Maharashtra Co-operative Societies Rules, 1961 [hereinafter referred to
as 'the Rules'], Bye-Laws of the Society which were registered with the
D Registrar, Cooperative Society, at the time of grant of registration to it
[hereinafter referred to as 'the Bye-Laws'], Regulations relating to
tenancies to be granted by the Society to members in respect of premises
held by the Society contained in F orrn A which are part of registered
Bye-Laws of the Society [hereinafter referred to as 'the Regulations'] and
E the Rent Act which run thus:-
F
G
H
THE SOCIETIES ACT:
"Section 2 - Definitions. - In this Act, unless the context otherwise
reqmres,-
[(16) "housing society "means a society, the object of which is
to provide its members with open plots for housing, dwelling
houses or flats; or if open plots, the dwelling houses or fl.ms are
already acquired, to provide its members common an1enities and
services];
(19)
(a.) "member" means a person joining in an application for the
registration of a Cooperative society which is subsequently
registered, or a person duly admitted to membership of a society
.,.
l.
./
J
MIS.ANITA ENTERPRISES v. BELFERCOOP. HOUSING
17
SOCIETY LTD. [B.N.AGRA WAL,J.]
after registration, and includes a nominal, associate or sympathiz.er
member;
* * * * *
A
( c.) "nominal member" means a person admitted to membership B
as such after registration in accordance with the by-laws;
* * * * *"
"Section 23 - Open membership.- (l) No society shall, without
sufficient cause, refuse admission to membership to any person duly c
qualified therefor under the provisions of this Act and its by-laws.
[(IA) Where a society refuse to accept the application from an
eligible person for admission as a member, or the payment made
by him in respect of membership, such person may tender an
application in such form as may be prescribed together with D
payment in respect of membership, if any, to the Registrar, who
shall forward the application and the amount, if any so paid, to
the society concerned within thirty days from the date of receipt
of such application and the amount; and thereupon if the society
fails to communicate any decision to the applicant within sixty days E
from the date of receipt of such application and the amount by the
society, the applicant shall be deemed to have become a member
of such society.] [If any question arises whether a person has
become a deemed member or otherwise, the same shall be decided
by the Registrar after giving a reasonable opportunity of being F
heard to all the concerned parties.]
(2) Any person aggrieved by the decision of a society, refusing him
admission to its membership, may appeal to the Registrar. [Every
such appeal, as far as possible, be disposed of by the Registrar G
within a period of three months from the date of its receipt:
Provided that, where such appeal is not so disposed of within the
said period of three months, the Registrar shall record the reasons
for the delay.]
H
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B
c
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SUPREME COURT REPORTS
[2007] 12 S.C.R.
(3) The decision of the Registrar in appeal, shall be final and the
Registrar shall communicate his decision to the parties within fifteen
days from the date thereof.
[( 4) Without prejudice to the foregoing provisions of this section,
in the case of agro-processing societies or any other society for
which a definite zone or an area of operation is allotted by the
State Government or the Registrar, it shall be obligatory on the
part of such society to admit, on an application made to it, every
eligible person from that zone or the area of operation, as the case
may be, as a member of such society, unless such person is already
registered as a member of any other such society, in the same zone
or the area of operation.]"
"Section 29 - Restrictions on transfer or charge of share or
interest .