# SABHARWAL BROTHERS & ANOIBER v. SMT. GUNA AMRIT THANDANI OF BOMBAY

- **Citation:** [1973] 1 S.C.R. 53
- **Court:** Supreme Court of India
- **Decided:** 1972-03-29
- **Case number:** C.A. No. 1574 of 1971
- **Bench:** A. N. Grover, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sabharwal-brothers-anoiber-v-smt-guna-amrit-thandani-of-bombay-5689
- **Pages:** 6

## Headnote

53
Cooperative Society-Flat sold to member by Society--Member letting
our. fiat to another member-Dispute between landlord and tenant. as to
continuance of tenancy-Such dispute whether touches business of societyWhethtr can be referred to Registrar for adiudicafion under s, 91(1) (b)
of MM1arasntra Cooperatives Societies Act 1960 (24 of 1961).
The respondent was the owner of the tlat on the second floor Of a
Bulldlna in Bombay. She Wiii a member of a Co·operative Housina Society
and hacl acquir.ed the llat from that 8ociety.
ln 1!159 she had put the
appellant in pouesslon of the tlat for a period of 11 months on payment ol
Rs. SlO/· per month.
According to the Written agreement the possession
was given on leave and licence basis. The governmen~ was signed by one
of the partners of the appellant firm '' f10 also became members of the
said Cc>op»rative Society.
The agreement was renewed until 25th October, 1962 when the first respondent asked the appellants to vacate possession on the ground that she required the fiat for personal occupation.
As thi• was not co,mplied with she filed a statement of claim before the
Registrar of Co-operative Societies on the ground that there was a dispute
within the meaning of s. 91 (I) of the Maharashtra Co-operative So-
.cicties Act. · The R·~gistrar rcfeITcd the chse to a nominee whose juris~
diction was challenged by the appellants.
Nevertheless the proceedings
before the nominee
v.1~nt on for some time and on July 3, 1964 the
nominee made an award to the effec~ that the appellants Were occupying
the flat on leaye ancl licence basis.
The appellants, anticipating the
award, filecl a. suit in the Court of Small Causes Bomb.ay stating that they
were in occupation of the tlat as tenants and as such entitled to protection under the Bombay Rent Act, 1947. The Small Causes Court held
that the suit was· maintainable and answered the other preliminary issues
in favour of the plaintiff.
In revision the bench of the Small Causes
Court held that the Reg;strar's nominee did have jurisdiction to try the
dispute between the parties and remanded the proqJedings to the tri&I
court for disposal of the suit after deciding an is':iue as to res judicata
by reason of the award of the nominee. The High Court up-held the
order of the bench. In this Court the questions that fell for consideration
were (I) Whether there was any dispute between the parties touching
the business of the co-operative society which could be decided by the
Registrar or referred by him to a nominee for disposal and (2) Whether
the suit filed in tho Smoli Causes Court was maintainable having regard
to the nature of the relief sought.
Adowing the appeal.
HELD: (i) No tloubt it was a busine's of the society to let out
premises and a member had no unqualified right to let out his tlat or
tenement to another' by virtue of the bye-laws and a oreach of the byelaws could affect the defaulting member's right to membership.
But
.
I
HELD : (i) No doubt it was a business of the society to let out
touch the business of the society whiclh included inter alia the trade of
huylng. s.elling, hiring and letting land in accordance \\'ith .co-opefativc
principles. The letting of flat by respondent No. 1 was a transaction of
54
SUPREME COURT REPORTS
[ !') 73] 1 S.C R.
the s:.ime nature as the "Society itsr.!lf was empowered to enter into but
such letting out itself did not concern the business of the society in
the n1atter of its letting out fiats.
There was nothing to sho\v that such
Jetting would effect the business of the society once ii had sold the flat
to the respon&ent No. I. The position might have been different if the
latter had himself been a tenant of the fiat under the society. "To
touch" means "to come in contact with" and it did nQ.t appear that there
was a point of contact between a letting by the respondent No. 1 and the
busine.s of the society when the society was not itself th,e land lord of
the fiat. f57D·G]
·
(ii) As observed by this Court

## Text

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SABHARWAL BROTHERS & ANOIBER
v.
SMT. GUNA AMRIT THANDANI OF BOMBAY
March 29, 1972
[A. N. GROVER AND G. K. MITTER, JJ.]
53
Cooperative Society-Flat sold to member by Society--Member letting
our. fiat to another member-Dispute between landlord and tenant. as to
continuance of tenancy-Such dispute whether touches business of societyWhethtr can be referred to Registrar for adiudicafion under s, 91(1) (b)
of MM1arasntra Cooperatives Societies Act 1960 (24 of 1961).
The respondent was the owner of the tlat on the second floor Of a
Bulldlna in Bombay. She Wiii a member of a Co·operative Housina Society
and hacl acquir.ed the llat from that 8ociety.
ln 1!159 she had put the
appellant in pouesslon of the tlat for a period of 11 months on payment ol
Rs. SlO/· per month.
According to the Written agreement the possession
was given on leave and licence basis. The governmen~ was signed by one
of the partners of the appellant firm '' f10 also became members of the
said Cc>op»rative Society.
The agreement was renewed until 25th October, 1962 when the first respondent asked the appellants to vacate possession on the ground that she required the fiat for personal occupation.
As thi• was not co,mplied with she filed a statement of claim before the
Registrar of Co-operative Societies on the ground that there was a dispute
within the meaning of s. 91 (I) of the Maharashtra Co-operative So-
.cicties Act. · The R·~gistrar rcfeITcd the chse to a nominee whose juris~
diction was challenged by the appellants.
Nevertheless the proceedings
before the nominee
v.1~nt on for some time and on July 3, 1964 the
nominee made an award to the effec~ that the appellants Were occupying
the flat on leaye ancl licence basis.
The appellants, anticipating the
award, filecl a. suit in the Court of Small Causes Bomb.ay stating that they
were in occupation of the tlat as tenants and as such entitled to protection under the Bombay Rent Act, 1947. The Small Causes Court held
that the suit was· maintainable and answered the other preliminary issues
in favour of the plaintiff.
In revision the bench of the Small Causes
Court held that the Reg;strar's nominee did have jurisdiction to try the
dispute between the parties and remanded the proqJedings to the tri&I
court for disposal of the suit after deciding an is':iue as to res judicata
by reason of the award of the nominee. The High Court up-held the
order of the bench. In this Court the questions that fell for consideration
were (I) Whether there was any dispute between the parties touching
the business of the co-operative society which could be decided by the
Registrar or referred by him to a nominee for disposal and (2) Whether
the suit filed in tho Smoli Causes Court was maintainable having regard
to the nature of the relief sought.
Adowing the appeal.
HELD: (i) No tloubt it was a busine's of the society to let out
premises and a member had no unqualified right to let out his tlat or
tenement to another' by virtue of the bye-laws and a oreach of the byelaws could affect the defaulting member's right to membership.
But
.
I
HELD : (i) No doubt it was a business of the society to let out
touch the business of the society whiclh included inter alia the trade of
huylng. s.elling, hiring and letting land in accordance \\'ith .co-opefativc
principles. The letting of flat by respondent No. 1 was a transaction of
54
SUPREME COURT REPORTS
[ !') 73] 1 S.C R.
the s:.ime nature as the "Society itsr.!lf was empowered to enter into but
such letting out itself did not concern the business of the society in
the n1atter of its letting out fiats.
There was nothing to sho\v that such
Jetting would effect the business of the society once ii had sold the flat
to the respon&ent No. I. The position might have been different if the
latter had himself been a tenant of the fiat under the society. "To
touch" means "to come in contact with" and it did nQ.t appear that there
was a point of contact between a letting by the respondent No. 1 and the
busine.s of the society when the society was not itself th,e land lord of
the fiat. f57D·G]
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(ii) As observed by this Court in an earlier case the Bombay Rent
Act and the Maharashtra Cooperative Societies Act can be harmonised
best by holding that in matters covered by the Rent Act, its provisions
rather than thC provisions of the Co-operative Societies Act, should apply.
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Deccan Merchants Co-operative Bank Ltd. v. M/s. Dalichand !!lgraj
Jain and others, [1969] 1 S.C.R .. ~87, distinguished.
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CIVIL APPELLATE JURISDICTION : C.A. No. 1574 of 1971.
Appeal by special leave from the judgment and order dated
July 6/7, 1971 of the Bombay High Court in Special Civil Appli-
•Cation No. 619 of 1971.
D
S. V. Gupte and P. N. Tiwari, for the appellants.
K. S. Chawla, S. N. Mishra and S. S. Jauhar, for the respondents.
The Judgment of the Court was delivered by
Mitter, J.-This is an appeal by special leave from a judgment
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and order of the Bombay High Court in a Special Civil Application
from a decision of the Court of Small Causes Bombay in exercise
of its revisionary jurisdiction. The revisional court had rewrsed
the decision of the trial court and remanded the matter-for disposal
of the issues other than issues 2 to 8 tried as preliminary issues and
decided in favour of the plaintiffs before the Court of Small Causes.
F
The facts are as follows.
Respondent No. 1 was the owner of
a fiat on the second floor of Block No. 8 'Shyam Niwas', Warden
Road, Bombay. · She was a member of a Co-operative Housing
Society and had acquired the fiat from the said society.
In 1959
she had put the appelll!nt Sabharwal Brothers in possession of the
fiat for a period of 11 months on payment of Rs. 510 /- per month.
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There was an agreement in writinl!; which purported to show that
the possession was to be on leave and licence !lasis.
This agreement was signed by a partner of Sabharwal Brothers who also
became member of the said Co-operative Society.
There were
repl(ated renewels of the said agreement until 25th October, 1962
when the first respondent asked the '.appellants to vacate possession
H
Qn the ground that she required the fiat for her personal occupation.
~.
~
As this was not complied with, she filed a statement of claim before
1he Registrar of Co-operative Societies on ~he ground that there was
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SA!JdARWAL BROTHERS V, G. A. THANDANI OF BOMBAY
55
(Mitter, J.)
a dispute within the meaning of s. 91 (1) of th~ Manarashtra Cooperative Societies Act (hereinafter referred to as the ·Act') which
require-d adjudication. There was a challenge to the jurisdiction of
the nominee of the Registrar to whom it was reforrcd by the appellants. The proceedings before the aiominee went on for some time
on July 3, the nominee made an award to the effect the appellants
were occupying the flat on leave and licen~e basis.
Anticipatin~
the award the appellants filed a suit in the Court of Small Causes
Bombay stating that they were in occupation of the !lat 'as tenants
and as such entitled to protection under the Bombay Rent Act.
194 7 and the first respondent had no right to evict them.
In her
written statement the defendant denied that the
plaintiffs were
tenants contending, inter alia, tb'at the plaintiffs were occupying the
flat only on leave and licence basis etc.; that the dispute between
the parties had ]:ieen referred to the Registrar of Co-operative
Societies for disposal and finally that the Cour! '.lf S'.ll:,;J C'au~~, '1Cld
no jurisdiction to entertain and try a suit involving such a disputr.
The Small Causes Court .framed no less than twelve issues of which
issues 2 tc 8 related to the maintainability of the suit :and the jurisdiction of the court in view of the provisions of s. 91 (1) ( d) of the
Act.
The Small Causes Court held that the suit was maintainable
and answered the other preliminary issues in favour of the plaintiff.
The matter was taken in revision to a Bench of the said Small
Causes Court.
The Bench took-a different view holding that the
Registrar's nominee did have jurisdiction to try the dispute between
the parties and remanded the proceedil!lgs to the trial court for disposal of the suit after deciding on issue as to res judicata by reason
of the award o.f the nominee.
The High Court dismissed the Special Civil Application of the
plaintiffs holding that the revisional court of the Small Causes was
justified in coming to the conclusion that it was not open to the
plaintiffs to contend that the Registrar or his nominee had no
jurisdiction to entertain the dispute on the two grounds on which
it was challenged.
Before us the main points urged on behalf o.f the appellants
we1e: first whether there was any dispute between the parties
touching the business of the Co-operative Society which c0uld be
decided by the Registrar or referred by him to a nominee for disposal; and, secondly, whether the suit filed in the Small Cau~es
Court was maintainable having regard to the nature of the rehef
sought.
The central question, therefore, is, whether the dispute between
the parties is capably of reference under the Act. The relevant
portion of s. 91 ( 1) (b) o.f the Act runs as follows :-
"(1) Notwithstanding anything contained in any
other law for the time being in force, any dispute touch"
56
SUPR1,,4E COURT REPCRTS
[ 19'73] 1 S.C R.
ing the constitution, ........ management or business
of a society shall be referred l:i}' any of the parties to the
dispute ........ if both the parties thereto are one or
other of the following :-
(a)
( b) a member, past !llember or a person claiming
through a member etc.
"
s. 91 ( 3) provides :
"Save as otherwise provided under sub-section (3)
of section 93 .. 10 court shall have jurisdiction to entertain
any suit or o · ·~· proceedings in respect of any dispute
reierred to in >uh-section (1).
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We may also note the relevant portion of s. 163 ( 1) which provides:
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" ( 1) Save as expressly provided in this Act, •no civil
or revenue court shall have any jurisdiction in respect
of-
(a)
(b) any dispute required to be referred to the Regis--
trar, or his nominee, . . . . . .
(c)
Before the Court of Small Causes reference was made to byeF
law No. 2 of the Society to show that the objects of the society were
inter alia to carry on the trade of buying, selling, hiring ·and letting
land in accordance with the co-operative principles and under
Regulation No. 5 in fonn 'A' printed at 1he end of the bye-laws
"No tenant shall assign, underlet, vacate or part with
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the possession of the tenement or any part thereof without
the consent in writing of the society."
The Bench of the Court of Small Causes referred 1o the above
provisions and observed that the bye-laws of the society constituted
an ·'!greement between the members of the society and a breach
thereof would affect the defaulting member's rigin of membership
oithe ~ociety and consequently a dispute relating to the letting of
the fiat was a dispute which touched the business of the society.
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AABHARWAL BROTHERS V. G. A. TllANDANI OF BOMBAY
57
<Mitter, I.)
The High Court referred to s. 91 of the Co-operative Societies
Act ands. 28 of the Bombay Rent Act and observed:
"There is a competition between two authorities, a
court and the Registrar's nominee, both exercising exclusive jurisdiction in respect of matters coming within their
jurisdiction."
and concluded that on general principles of law it would not be
proper to allow the same question to bie agitated again under a
different guise.
It also observed that the decision taken hy the
Assistant Registrar and the nominee could have been decided by an
appeal and as no appeal had been filed the provisions of law mus!
have their effect with the result that the decision oLthe dispute by
the nominee of the Registrar had become final.
With all respect to the High Court, it seems to us that there
was a fundamental error in the above approach.
No doubt it was
the business of the society to let wt premises and a member had
no unqualified right to Jet out hiS fiat or tenement to another by
virtue of the bye-laws and a 'Qreach of the bye-laws could affect the
-defaulting member's right to membership. · But we are n•t able
t6 see how letting by a member to another member would touch
the business o( the society which included inter alia the trade of
buying, selling, ·hiring and letting land in accordance with· co-operative principles. The lettir:g of fiat by respondent No. 1 was a
transaction of the same nature as the society itself was empowered
to enter into but such letting by itself did not concern the business
of the society in the matter of its letting out fiats.
Nothing w11s
btought to our notice to show that such a letting would affect the
business of the aociety once it had sold the fiat io the respondent
No. 1.
The position might have been different if the latter had
himself been a tenant of the fiat under the society.
''To touch"
means "to come in contact with" and it does not appear that there
is a point of contact between a Jetting by the respondent No. 1 ll!lld
the business of the society when the society was not itself the
landlord of the fiat.
Reference was made at the Bar to Deccan Merchants Co-operative Bank Ltd. v. Ml s Dalichand Jugraj Jain and others(1'). The
facts there were very different from those of the instant case.
(I) [1969] l $.C.R. 887.
5-Ll208 Sup C I/72
58
SUPREMc COURT REPORTS
[1973] l S.C.R.
But the Collrt had to con$jder the quel>tion of competing jurisdiction under the lloml:!ay Rent. Act ·~ the Act ai.W it is pertinentto
note the observations at p. 902 "that the two Acis can be harmonised
best by holding that in matters covered by the Rent Act, its provisions, rather than the provi,ions of the Act, should apply."
Jn the result we allow the appeal, set aside the judgment and
order of the High Court ~nd of the Bench of the Court of Small
Causes. The matter is now to go back to the Court of Small Cames
for disposal according to }aw.
The appellants will have the costs
incurred in this Court.
G.C.
Appeal all~cl.
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