NARENDRA K. KOCHARversusSIND MAHARASHTRA COOP. HOUSING SOCIETY LTD. AND ORS.

A                            NARENDRA K. KOCHAR
                                          v.
                    SIND MAHARASHTRA COOP. HOUSING
                          SOCIETY LTD. AND ORS.

                                   JULY 9, 2002
B
                    [R.C. LAHOTI AND B.N. AGRAWAL, JJ.]


          Maharashtra Cooperative Societies Act, 1960/Bombay Rents, Hotel and
C Lodging House Rates Control Act, 1947-Section 91/Sections 14(2), 15(2)
    and 15-A-Licensee-Eviction of under Section 91 of Societies Act-Licence
    subsisted on 1.2.1973 the appointed date-Held, eviction not permissible without
    taking recourse to provisions of Rent Control Act, since the licensee became
    a deemed tenant by virtue of the provisions of Rent Control Act.

D           Respondent No.2 was a tenant co-partner of respondent No.1
    tenant co-partnership Housing Society in respect of a flat in that society.
    Appellant was put in occupation of the said flat as a licensee by respondent
    No.2 in December, 1970 without previous consent of the society.

             Respondent-society instituted proceeding against respondent no.2
E and Appellant seeking recovery of vacant possession of the flat on the
    ground that respondent no.2 had defaulted in payment of dues of the
    society and appellant was causing nuisance to the members of the society
    under Section 91 of the Maharshtra Co-operative Societies Act, 1960.
    Respondent no.1 resisted the claim of society. Appellant objected to the
    claim on the ground that even though he was a licensee, but as the licence
F   was subsisting as on 1.2.1973, the appointed date under the Act, by virtue
    of provisions of Sections 14(2), 15(2) and 15-A(i) of Bombay Rents, Hotel
    and Lodging House Rates Control Act, 1947 he became a tenant and thus
    could not be evicted from the premises in question without taking recourse
    to the provisions of Rent Control Act and proceedings initiated under
G   Section 91 of Housing Society Act was not maintainable.

          Co-operative Court held that though respondent no.2 was not a
    defaulter, but since he put the appellant in occupation of the premises as
    a licensee without prior consent of the society, both of them were liable
    to be evicted.
H                                         68
         N. K. KOCHAR r. SIND MAHARASHTRA COOP. HOUS. SOCIETY LTD.      69

      On appeal, Co-operative Appellate Court upheld the order of             A
eviction. Appellant's writ petition against the same was dismissed by High
Court.

      In appeal to this Court, the issue for consideration was whether
appellant who was occupying the premises in question as licensee from
before 1.2.1973 and whose licence was subsisting on that day became a         B
deemed tenant by virtue of provisions of Sections 14(2), 15(2) and 15-A
of the Rent Control Act and could be evicted in the purported exercises
of powers under Section 91 of the Societies Act without taking recourse
to the provisions of Rent Control Act in spite of the express bar engrafted
under Section 28 thereon.
                                                                              c
     Allowing the appeal, the Court

      HELD: Petition under Section 91 of Maharashtra Co-operative
Societies Act, 1960 filed by the Society is not maintainable. It is not correct
to say that notwithstanding the protection given by Section 15-A, the D
respondent-Society can proceed to evict him under Section 91 of the
Societies Act on the plea that such a protection is not available against
the Society. Such a view would defeat the legislative object of Section 15-
A of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The plea that the appellant cannot seek protection against the Society as
his entry into the flat was in violation of the bye-laws would have been E
valid, had the statute not intervened. To take such a view would
tantamount to carving out an exception in Section 15-A of the Rent Act
that the said provision would not apply to licensees in occupation of flats
owned by tenant-co-partnership Societies. The language of Section 15-A
read with Section 5( 4-A) of the Rent Act does not warrant such a F
construction. The mere fact that there was a violation of the bye-laws
would not make any difference for it is not unknown that even in cases of
breach of statute, the Legislature has conferred protection on those guilty
of breach if the prevailing circumstances so warrant. The legislative policy
is quite evident from Section 15-A and the protection given to licensees
cannot be taken away on the plea that the initial entry of the licensee in G
the flat was in breach of the bye-laws. If the occupant-licensee who is a
protected tenant under Section 15-A can be evicted by the Society on the
plea of absence of privily between the society and the protected tenant, it
would render the protection of Section 15-A redundant. In such a case
 notwithstanding the absence of protected tenant, the latter cannot be H
    70                         SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A   evicted except in accordance with the provisions of the Rent Act.
                                                       {77-A; 74-G; 74-'B-F]

          Sanwarmal Kejriwal v. Vishwa Co-operative Housing Society ltd and
    Ors., 11990) 2 SCC 288, relied on.

B         ON. Bhatnagar v. Smt. Rukibai Narsindas and Ors., 11982) 2 SCC
    244; A. V.R. and Co. and Ors. v. Fairfield Co-operative Housing Society Ltd
    and Ors., [1988] Supp. 3 SCR 84 and Electrical Cable Development
    Association v. Arun Commercial Premises Co-operative Housing Society Ltd
    and Anr., [1998) 5 SCC 396, distinguished.

C           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5790 of
    1998.

          From the Judgment and Order dated 10th, 14th and 17th July, 1998
    of the Bombay High Court in W.P. No. 1554 of 1997.

D        K. Rajendra Chowdhary, Rakesh K. Sharma and Dr. R. Prakash for
    the Appellants.

          Ms. Indira Jaising, B.V. Desai, Sanjeev Kr. Singh and N. Keshwani,
    for the Respondent.

E           The Judgment of the Court was delivered by

          B.N. AGRA WAL, J. This appeal by special leave is against the
    judgment rendered by Bombay High Court whereby Writ Application filed
    by the appellant has been dismissed, upholding order of the Maharashtra
    State Co-operative Appellate Court, dismissing appeal preferred by the
F   appellant against his order of eviction from the premises in question passed
    by the Co-operative Court, purporting to act under Section· 91 of the
    Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as 'the
    Societies Act'.

G         The short facts are that Sind Maharashtra Co-operative Housing Society
    Limited, respondent no: 1, [hereinafter referred to as 'the Society'] wa; a
    tenant co-partnership housing society and one B.D. Punjabi, respondent No.
    2, was its member as tenctnt co-partner in relation to flat No. 5 allotted to him
    in Ashiana Building of the Society. Respondent No. 2 who was put in
    possession of the aforesaid flat, put the appellant in occupation of the same
H   in December, 1970, without previous consent of the Society, as a licensee
    N. K. KOCHAR r. SINO MAHARASHTRA COOP. HOUS. SOCIETY LTD. [AGRA WAL, J.]   71

initially at the monthly rate of Rs. 325 which was later enhanced to Rs. 450.       A
Respondent No. 2 defaulted in payment of dues of the Society from March
1977 and the appellant who was occupier was causing nuisance to the members
of the Society. Stating the aforesaid facts, the Society instituted the present
proceeding bearing Arbitration Case No. ABN 634/754 of 1977 for, inter
alia, recovery of vacant possession of the aforesaid flat, both from respondent     B
No. 2 as well as the appellant. Further prayer was for directing respondent
No. 2 to pay dues of the Society. The Society's dispute was referred by the
Registrar, Co-operative Societies to Officer on Special Duty under Section 91
of the Societies Act which, after amendment of the Societies Act, was
transferred to the Co-operative Court under Section 91 A of the Societies Act.
                                                                                    c
      The claim of the Society was resisted by respondent No. 2 on grounds,
inter a/ia, that the appellant was a mere licensee who was temporarily allowed
to occupy the premises and that licence was also terminated. According to
him, he was not a defaulter and the appellant did not cause any nuisance to
any person much less any member of the Society. The appellant objected to           D
the claim of the Society on the ground that even though he was a licensee,
but as the licence was subsisting on !st February, 1973, by virtue of the
provisions of Sections 14(2), 15(2) and sub-section (I) of Section 15-A of
the Bombay Rents, Hotel. and Lodging House Rates Control Act, 1947
[hereinafter referred to as 'the Rent Control Act'], he became a tenant, entitled
to claim protection as such and could not be evicted from the premises in           E
question without taking recourse to the provisions of the Rent Control Act,
as envisaged under Section 22 thereof inasmuch as the proceeding initiated
under Section 91 of the Societies Act was not maintainable. His further case
was that during the pendency of the present proceeding, he filed a suit against
respondent No. 2 in relation to the premises in question for a declaration that     F
he was tenant of respondent No. 2 who contested the same. The said suit was
dismissed by the Small Causes Court, but on appeal being preferr.ed the same
was decreed which attained finality as Writ Application filed against the
appellate order was withdrawn.

      The Co-operative Court by its judgment dated 16.10.1989 found that            G
respondent No. 2 was not a defaulter, but as the appellant was put in occupation
of the premises in question by respondent·no. 2 as a licensee without previous
consent of the Society, both of them were liable to be evicted. So far as the
ground for nuisance was concerned, as the Court was inclined to pass an
order of eviction, it did not consider the same on merit. Ultimately, the Court     H
    72                         SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A   directed respondent no. 2 and the appellant both to vacate the premises in
    question upon determination by the Society of rights of respondent no. 2 as
    member and admitting a new member to the premises in question. Against
    the aforesaid order three appeals were preferred by each of the three parties
    before the Co-operative Appellate Court. Appeal filed by the appellant was
B   dismissed whereas the other two appeals were partly allowed and order of
    eviction was upheld with this modification only that there was no necessity
    for making any detennination by the Society with regard to the rights of
    respondent No. 2 as member. Thereupon, the appellant filed a Writ Application
    before the Bombay High Court and the same having been dismissed, the
    present appeal by special leave.
c
           Mr. K. Rajendra Chowdhary, learned Senior Counsel appearing on behalf
    of the appellant, in support of the appeal submitted that as the appellant was
    put in occupation of the premises in question as a licensee prior to 1st February,
    1973 and the licence was subsisting on that day by virtue of amendment
D   made in the Rent Control Act in the year 1987, he was entitled to protection
    of the statute by virtue of the provisions of Sections 14(2), 15(2) and 15-A
    of the Rent Control Act under which he became a deemed tenant and in.view
    of the provisions of Section 28 thereof he could not be evicted through any
    other proceeding much less Section 91 of the Societies Act, without taking
    recourse to the provisions of the Rent Control Act on the grounds enumerated
E   therein inasmuch as the proceeding initiated under Section 91 of the Societies
    Act being not maintainable, orders passed therein are liable to be quashed on
    this ground alone. On the other hand, Ms. Indira Jaising, learned Senior
    Counsel appearing on behalf of respondent No. 1 and Mr. R.N. Keshwani,
    learned counsel appearing on behalf of respondent No. 2, submitted that the
p   appellant did not acquire the status of a tenant and is not entitled to claim
    protection under the Rent Control Act as he was put in occupation of the
    premises in.question as a licensee by the respondent No. 2 without the previous
    consent of the Society which was in breach of its bye-laws. In view of the
    rival submissions. the question which arises in this appeal is as to whether the
G   appellant, who was occupying the premises in question as a licensee from
    before 1.2.1973 and whose licence was subsisting on that day, became a
    deemed tenant by virtue of the provisions of Sections 14(2), 15(2) and 15-
    A of the Rent Control Act and could be evicted in the purported exercise of
    powers under Section 91 of the Societies Act, without taking recourse to the
    provisions of the Rent Control Act in spite of the express bar engrafted under
H   Section 28 thereof. ·
    N. K. KOCHAR r. SIND MAHARASHTRA COOP. HOUS. SOCIETY LTD. [AGRA WAL, J.J   73
      In our view, the point raised is no longer res integra as the same is         A
 concluded by a decision of this Court in the case of Sanwarmal Kejriwal v.
 Vishwa Co-operative Housing Society ltd and Ors., [ 1990] 2 SCC 288,
  which was a case where the proceeding was initiated against a licensee under
   Section 91 of the Societies Act. In that case a registered Co-operative Society
  admitted one Laxmi Devi Kejriwal to its membership on March 2, 1949 and B
  was allotted flat no. 25 who gifted her interest as the allottee member of
  Society to her brother, Ambica Prasad Sharma. One D.P. Kejriwal who was
   looking after this flat inducted one Sanwarmal Kejriwal therein with effect
  from June I, 1957 under a leave and licence agreement on a licence fee of
   Rs. 400 per month. While the licensee was in actual occupation of the flat,
   Ambica Prasad Sharma transferred his interest therein to his brother, Hari C
   Kumar Sharma, who was admitted to the membership of the Society. Even
  after the transfer D.P. Kejriwal continued in management of the flat and
  collected and received licence fee from Sanwarmal Kejriwal till the middle
  of 1979 when he received a letter from Hari Kumar Sharma claiming
  ownership of the flat. The licensee thereafter filed an inte1µleader suit in the D
  Court of Small Causes, Bombay, seeking a direction to whom he should pay
  the rent for the flat occupied by him which was disposed of whereafter Hari
  Kumar Sharma deposited with the Society the cost for initiating proceeding
  for eviction of the licensee from the flat in question under Section 91 of the
  Societies Act. Two days later, Hari Kumar Sharma filed a suit for eviction
  of the licensee from the flat in question in the Court of Small Causes, Bombay . E
. Thereafter, the Society passed a resolution for initiating a proceeding under
   Section 91 of the Societies Act for eviction of the licensee from the flat in
  question and a notice to quit was served on the licensee and a proceeding \Vas
  initiated under Section 91 of the Societies Act. The Co-operative Court came
  to the conclusion that the Society could maintain an action under Section 91 F
  of the Societies Act notwithstanding the fact that the licensee became the
  tenant under Section 15-A of the Rent Control Act qua the member-allottee
  and consequently it passed an order of eviction of the licensee. The said
  order was affirmed in appeal by the Co-operative Appellate Court as well as
   by the Bombay High Court in a Writ Application filed against the appellate G
   order. Thereafter when the matter was brought to this Court on appeal by
   special leave, the same was allowed, all the orders impugned therein were set
   aside and the petition under Section 91 of the Societies Act was dismissed as
  ·not maintainable. Considering various decisions cited before it and taking
   into consideration different provisions of the Societies Act as well as Rent
                                                                                    H
    74                         SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A Control Act, this Court in that case harmonised the said provisions by holding
    that in the matter covered by the Rent Control Act, its provisions, rather than
    the provisions of the Societies Act, should apply. As the licensee in that case
    sought protection of Rent Control Act since he was a deemed tenant under
    Section 15-A thereof, the Court observed that the status of a tenant was
B   conferred on him by law as the Legislature intended to extend the protection
    of Rent Control Act to such a licensee and the rights which do not flow from
    contracts but are conferred by law, such as Rent Control Act, must be
    determined by the machinery, if any, provided by the law conferring the
    right. It was laid down that "the submission that the appellant cannot seek
    protection against the Society as his entry into the flat was in violation of the
C   bye-laws would have been valid had the statute not intervened. To take such
    a view would tantamount to carving out an exception in Section 15-A of the
    Rent Act that the said provision would not apply to licensees in occupation
    of flats owned by tenant-co-partnership societies. The language of Section
     15-A read with Section 5(4-A) of the Rent Act does not warrant such a
D   construction. The mere fact that there was a violation of the bye-laws would
    not make any difference for it is not unknown that even in cases of breach
    of statute, the Legislature has conferred protection on those guilty of breach
    if the prevailing circumstances so warrant e.g., sub-letting was prohibited by
    Section 15 but when the Legislature realised the need to protect the sub-
E   tenants it did so by an ordinance promulgated in 1959. Similarly when the
    Legislature felt the need to protect licensees in occupation on February 1,
     1973, it intervened by enacting Section 15-A. The legislative policy is quite
    evident from Section 15-A and the protection given to licensees cannot be
    taken away on the plea that the initial entry of the licensee in the flat was in
    breach of the bye-laws. If the occupant-licensee who is a protected tenant
F   under Section 15-A can be evicted by the society on the plea of absence of
    privity between the society and the protected tenant, it would render the
    protection of Section 15-A redundant. The situation is more or less similar
    to the case of an owner-landlord whose tenant had contrary to the terms of
    the contract introduced a licensee who is now protected by Section 15-A of
G   the Rent Act. In such a case notwithstanding the absence of protected tenant,
    the latter cannot be evicted except in accordance with the provisions of the
    Rent Act. We, therefore, do not see any merit in the contention that
    notwithstanding the protection given by Section 15-A, the Society can proceed
    to evict him under Section 91 of the Societies Act on the plea that such a
    protection is not available against the Society. Such a view would defeat the
H   legislative object of Section 15-A of the Rent Act".
    N. K. KOCHAR i·. SINO MAHARASHTRA COOP. HOOS. SOCIETY LTD. (AGRAWAL, 1+]   75
      Learned counsel appearing on behalf of the respondents heavily relied A
upon three decisions of this Court in the cases of ON. Bhatnagar v. Smt.
Rukibai Narsindas and Ors., (1982] 2 SCC 244, A. V.R. & Co. and Ors. v.
Fairfield Co-operative Housing Society ltd. and Ors., (1988] Supp. 3 SCR
84 and Electrical Cable Development Association v. Arun Commercial
Premises Co-operative Housing Society ltd. and Anr., [1998] 5 SCC 396, all B
of whi.ch related to cases of licensees vis-a-vis proceedings under Section 91
of the Societies Act and after taking into consideration the provisions of
Section 15-A of the Rent Control Act, the petitions under Section 91 of the
Societies Act were entertained and granted. In our view, all the aforesaid
cases are quite distinguishable. In the case of ON. Bhatnagar (supra) co-
partner-tenant-member inducted a licensee much before !st February, 1973 C
on which day the statute intervened and the licence was terminated prior to
that date. Therefore, as on !st February, 1973 there was no subsisting licence,
such a person could not get protection of the Rent Control legislation as he
did not acquire the status of a tenant by legislative intervention and
consequently the bar created under Section 28 of the Rent Control Act was D
not attracted as a result of which the petition under Section 91 of the Societies
Act was held to be maintainable. Likewise, in the case of A. V.R. & Co.
(supra), as the licence was not subsisting on !st February, 1973, it was held
that such a person was not entitled to claim protection under the Rent Control
Act and the proceeding under Section 91 of the Societies Act was found to
be entertainable. In the case of Electrical Cable Development Association E
(supra), claim put forth as a licensee was, on facts, negatived holding that
there was no agreement of leave or licence and consequently it was held that
such a person not being a licensee at all, much less subsisting licensee on I st
February, 1973, could not claim protection of Rent Control Act and
consequently the petition under Section 91 of the Societies Act, for eviction F
of such a person by an order passed by the Co-operative Court, was rightly
entertained. In the case on hand, as the licence of the appellant was subsisting
on 1.2.1973, we are of the view that he being a protected tenant under the
Rent Control Act, could not be evicted by initiating a proceeding under
Section 91 of the Societies Act and passing orders therein by circumventing
the provisions of the Rent Control Act whereunder no proceeding was resorted G
to and consequently the impugned orders were unwarranted.

      We have resolved the legal issue arising for decision in this case. During
the course of hearing, from reading the evidence adduced by the parties, an
 impression was created that the real cause for initiating the proceedings by       H
    76                        SUPREME COURT REPORTS [2002) SUPP. I S.C.R.

A   the society against the appellant so as to get rid of him appears to be that he
    is not behaving himself and conducting in such a manner as to cause annoyance
    to other members of the society occupying the flats. The learned counsel for
    the appellant assured the Court during course of hearing that the appellant
    shall be advised not to cause any trouble or inconvenience to other residents
B   in the society, to abide by the laws of the society and also to see that there
    are no outstandings against him. In that regard the appellant filed an affidavit
    on 4th April, 2002 which reads as under:-

            "2. In accordance with the directions of this Hon'ble Court, I
            respectfully undertake to follow and abide by the Bye Laws and
C           Regulations of the 1st Respondent-Society as contained at pages 32 to
            74 of Vol. II of the paper book in the above appeal and as amended
            by the Society from time to time.

            3. I respectfully state that I have paid to the Ist Respondent-Society
            a sum of Rs. 2,47,962 and a further sum of Rs. 57,738 towards
D           interest @ 18% in terms of this Hon'ble Court's order dated 16th
            April, 2001 made in Review Petition No. 1233 of 2000. In all a sum
            of Rs. 3,05,700 was paid by me on 29th July, 2001 to the Ist
            Respondent-Society. The aforesaid amount of Rs. 2,47,962 includes:
            (i) Repayment of Loan and interest thereon, (ii) Building Maintenance,
E           (iii) Municipal Taxes, (iv) Parking Charges, (v) Water Charges, (vi)
            Service and Maintenance Charges, (vii) Sinking Fund, (viii) Interest
            on arrears, (ix) Building repairs charges.

           4. I further submit that in addition to the aforesaid amount I have
           paid the rent/compensation @ Rs. 450 per month to the Ist Respondent-
F          Society right upto November, 200 I in terms of Order dated 4.2.1982
           passed by the Maharashtra State Co-operative, Appellate Court and a
           true copy of the same is enclosed as Annexure 'Pl'. In fact the 1st
           Respondent-Society admitted in its own statement of account Annexure
           'A' at pages 25-26 annexed to its own application I.A. No. 3 of 1999
           that I paid Rent upto September, 1996. Further, I paid rents right upto
G          November, 2001. I undertake to pay rent@ Rs. 450 per month from
           December, 2001 to April, 2002, within 15 days from today. I further
           undertake to pay the monthly rent of Rs. 450 to the Society by 15th
           of every month."

H         Without expressing any opinion on the contents of the affidavit we
   N. K. KOCHAR 1•. SINO MAHARASHTRA COOP. HOUS. SOCIETY LTD. [AGRAWAL, J.)   77

have simply taken the same on record.                                              A
       In t_he result, the appeal is allowed, impugned orders are quashed and
petition under Section 91 of the Societies Act filed by the Society is dismissed
as not maintainable. In the facts and circumstances of the case, parties shall
bear their own costs.

K.K.T.                                                        Appeal allowed.