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Supreme Court of India

O. N. BHATNAGARversusSMT. RUKIBAI NARSINDAS & ORS.

Citation
1982 INSC 49
Decided
21 April 1982
Disposal
Dismissed

Holding

A claim for ejectment by a cooperative housing society against a licensee who became a nominal member after revocation of the licence is a "dispute touching the business of the society" within section 91(1) of the Maharashtra Cooperative Societies Act, and the proceedings are not barred by the non‑obstante clause of the Bombay Rents Act.

Summary

The Supreme Court considered an appeal by N. Bhatnagar, who occupied flat No. 52 in Shyam Niwas under a leave‑and‑licence agreement with a co‑partner member of Shyam Cooperative Housing Society. After the licence was terminated in 1965, the society and the member sought his eviction under section 91(1) of the Maharashtra Cooperative Societies Act. The appellant argued that the dispute was a landlord‑tenant matter governed by the Bombay Rents Act, invoking its non‑obstante clause, and that he was a tenant protected by sections 15A and ISA of the Rent Act. The Court held that the appellant was a licensee, not a tenant, and that the dispute concerned the society’s business of ensuring its members’ exclusive occupation of flats, thus falling within section 91(1). The Rent Act’s provisions did not bar the cooperative‑societies proceeding, and the society’s transposition as a co‑disputant was valid. Consequently, the appeal was dismissed.

Issues considered

  • Whether the dispute between the society/member and the occupant, who was a licensee and nominal member, falls within the ambit of section 91(1) of the Maharashtra Cooperative Societies Act, 1960
  • Whether the non‑obstante clause of section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 overrides section 91(1) of the Cooperative Societies Act
  • Whether the cooperative society has locus standi to be transposed as a co‑disputant in the proceedings under section 91(1)

Legislation cited

Subjects

cooperative societysection 91(1)evictionlicenseenominal memberBombay Rents Actnon‑obstante clausejurisdictionlease vs licencedispute touching business

Judgment

                                                                                         681
                                                                                                  A
                                        0. :N. BHATNAGAR
                                                      v.,
                            SMT. RUKIBAI NARSINDAS & ORS.                                         B
                                             April 2 I; /982
"
                            [S. MURTAZA FAZAL ALI, A.P. SEN AND
                                     E.S. VENKATARAMIAH, JJ.)

                Maharashtra C'oofllrative Societies Act, 1960 Section 91(1)-'~Dispute touch·
          ing the business of the Society"-Whtther a claim for ejectment by a Hous/116
                                                                                                  c
          COopeTtiliv~ Soci~ty o,,r. an occupant of a lflat
                                                      who had been let i1'to pOssession of
          the premises under an agreement of leave and licence executed between him and a
          member of tM Society is a "dispute" referable to section 91(1) oftM Act read
          with bye/aw• 66 & 68(a).

              Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 Sections              D
          5(4A), 13, ISA and 28, (Scope of-WhetMr the "non-obstante" clauJe In Section
          28 of the Rent A.ct has an overriding effect ove'r the non-obstante clau1e in Section
          91(1) of Sockti•s Act. Applicability of Section 15A of the Rent Act Re:!}udlcata
          -Section 11 of the Civil Procedure Code.

                Shyam Cooperative Housing Society Limited is constituted under the
           provisions of the Maharashtra Cooperative Societies Act, 1960 as a tenant co-
           partnership type housing society. Respondent No. 1 Smt. Rukibai N. Bhayoaoi            E
           who is a copartoer tenant member of llat No. 52 in building SA in the housing
           colony known as "Sbyam ,Niwas'~ situate at Warden Road, Bombay, iriducted
            the appellant in the said fiat under an Agreement of Goa ve and Licence dated
            November 28, 1961 after the appellant was accepted by the Society as a'"nominal
            member". , The agreement was renewed from time to time and tho period of the
            Jut agreement expired on February 28, 1965.. By her notice dated March 31,            F
          · 1965;,rcspondoot NO'. I called upon the. appellant to vacate the premises as bis
            occuP.tioo of the promises had become unlawful after .termination of the licence.
            The appellant failed to comply with the demand and therefore, respondent No. I
            preferred the claim f0r posso1Sion before tho cooperative court which by its
            judgment dated April 28, 1978 made ·an Award against the appellant for
            possession ..r the fiat in dispute and for arrears of rent and mesoo profits              •
             amounting to Rs. 30,000 against (tho awar.d )tho appellant filed an appeal before
          . the cooperative Appellate Court but it was ·dismissed in January 1979. Thereafter
                                                                                                  G
             ihe appellant filed a Writ Petition in the High Court in February 1979 and it
             was dismissed in March 1981. Tho Letters patent Appeal preferred by tho
             appellant was also rejected. ·Hence the appeal by.special !eave.

                 Dism;uiog the appeal, the Court, .
                                                                                                  H
• ,.<.,         HBLD '" (!) Tho claim by ·the society together with SUCb member for eject·
           tnent of a person who was permitted ·to otcllPY having become a ~ominal member
                                SUPREME Cl>UllT RSl'<>RTS               II ~~21 3s.c.li.
A    thereof, upon- revocation of 1iccnce, is a "dispute" falling within the purview of
     Sec. (I) of the Maharashtra Cooperative Societies Act, 1960. [696 D-E]

            Deccan Merchanrs Cooperative Bank· Ltd. v. M/s. Dalichand lugraj Jain
     & Ors. [1969] I SCR 887, distinguished. ·

          2:1 The proceedings under section 91(1) of the Maharashtra Cooperative
     Societies Act, 1960 were not barred by the 'provisions of Section 28 of the
     Bombay Rents, Hotel and Lodging. House Rates Control ·Act, 1947. The two
                                                                                               -   .
     Acts can be best harmonised by holding that in matters covered by the Rent Act,
     its provisions, rather than the provisions of the Act should apply. But, where
     the parties admittedly do not stand in tho-jural relationship of landlord an.d
     tenant, as here the dispute would be governed by Section 91(1) of the Societies
    •Act. The appellant by virtue of his being a nominal member, acquired a riRht
c    to occupy the fiat as a licensee, but his rights were inchoate. [697 B-D]

          Sabharwa//Jrothers and Another v. Smt, Guna Amrit Thandani of &Jmbay,
     [1973] l SCR 53 discussed and distinguisljed. ·                                               ~

           2:2 The two enactments deal with two distinct and separate fields and
     therefore the nan-obstante clause in s. 91(!) of the Act and that ins. 28 of the
     Rent Act ope.rate in two different planes. The two legislations rertain to different
D    topics ofl~gislation. It will be noticed that s. 28 of the Rent Act proceeds on
     the basis that exclusive jurisdiction is conferred on certain courts to decidei all
     questions or claims under that Act as to parties between whom there is or was a
     relationship of landlord and tenant. It doea not invest those courts with exclu-
     sive power to try questions of title, such as between the rightful· owner and a
    trespasser or a licensee, for such questions· do not arise under the A~. The
    appe1lant having raised a plea in the nature of d~murrer, the question of juris-
    diction had to be determined with 4dvertence to the allegations contained in the
    ~tatement of claim made by the respondent No. 1 under s. 91(1) of the Act and
    those allegations must be taken .to be true. The respondent No. I unequivocally
    asserts that tbe parties stood in the relation of licensor and licensee and that
    fact is clearly borne out by the terms of the agreement of leave and ·licence as           .
                                                                                                       l
                                                                                              '
    between the parties. The burden was on the appellant to establish that he hid
F   the status of a "tenant" within the meaning of s. S(ll) of- the Rent Act, as it
    then stood, and that burden he has failed to discharge. If, · therefore, plaintiff
    in the plaint does not admit a.relationship .·which would attract any of the provi~ ~-/-
    sions of the Act on which the exclusive jurisdiction given in- s. 28 depends, the      ,.
    defendant cannot by his plea force the plaintiff' to go .to a "forum where on aver-
    ments the claim does not lie. [689 A-El                                                +
                                                                               •
G         3:1 Upon the terms of Sections 5(4A) and 15A of the Rent Act, it is clear
    that the appellant is not Cotitled to the protection of Section ISA. The sine qUa
    non for the applicability of s. 15A of tbe Rent Act is that a licensee must be in
    oi::cupation as on Feb. 1, '73 under a subsisting li'cence. It is not diiputed that
    the appe1Jaot does not answer tha't dCscripti'on ·since the _agreement of leave and-:::.
    lic~ce in his favour admittedly stood terminated by the notice of the respondent
H   No. I dated March· 31, 1965. That being so, tho appellant is nothing but a rank
    trespasser and is not entitled to the protection of s. 15A of the Rent Act and
    cannot therefore plead tho bar of s. 28(1) thereof•. [G90 F-H]
                                  b. N. llllA'l'NAl'.lAll ~. RUklllAI                     683
               3:2 As a result of the introdilction of s. ISA and. s. S(4A). of the Rent Act        A
           by Maharashtra Act J.7 of 1973, the licensee of any wemi!iOs or any part thereof
           in a building v~stingjn or leased to a cooperating housing society registered or
           deemed to be registered under the Act, who was in occupation of such premises
           under" a subsisting licence as on Feb. 1, 1973, is by a legal fiction, deemed to be
           a tenant add thus has the prOtectioo, of the Rent Act. In such a case, the dispute
           between a licensor and a licensee relating to possession of the premises of a flat
           would attracts. 28 read with ss. !SA and S(4A) of the Rent Act and fall outside          .B
           the purview of the Regis.trar's jurisdiction to adjudicate upon such dispute under
           s. 91(1) of the Societies Act. In the instant case the question does not arise.
                                                                                     [691. A-Cl .

                  3:3 A bare reading of the agreement of leave and licence is clearly indi..
           cative of the fact that the appellant was a licensee. Admittedly his occupation
           Of the fiat was not as a tenant but as a Jicensee. The question whether or not
                              a
        -~the appellant was licensee· Of the fiat or a tenant thereof was directly and sub-
                                                                                                    c
           stantially ill issue between the parties in the suit. The finding that he was~ot
           a tenant{but had only the status of 8: licensee operates as resjudicata between the
           par.ties. The appellant having failed in his suit for declaration of his alleged
           status of a tenant brought in the· court of small causes cannot be perlnitted to
           reagitate the same question in these proceedings and (iii) tho licence of the
           appellant having been terminated by respondent No. 1, by h~r notice dated                D
           March 31, 1965, the appellant was not in occupation of the fiat on Feb. I, 1973
           under a subsisting licence and therefore did ·noi acquire the status of a tenant
           under 8ection ISA and is, not protected 11nder section 13 of the Rent Act.
                                                                             [691 B-H; 692 A)

                 4. · The respondent NQ. 2-Society being a copartnership type housing
           society, having let fiat no. S2 to the respondent no. I as a copartner tonant-           E
           member, wa_s vitally interested in ettsuring that no stranger is in unauthorised
           occupation of tbe fiat after the expiry of the terni of tho licence. It was therefore
           rightly transposed as a co-disputant in the proceedings under section 91(1) of
           the Societies Act, .and could raise a dispute regarding the unauthorised occupation
           of the premises by the appellant after the revocation of the licence. [693 D-G)

                    C1VIL APPilr.LATB Jua1so1CT10N : Civil Appeal No. 1843 of                       F

'
t
    .       1981.

                 Appeal by special leave from the judgment and order -dated
            the·2lst April, 1981 of the Bombay High Court in Appeal No. 168
            of 1981. ·
                                                                        '                           G
                H.H. Adva~i, P.R. Ramasesh and Manu lyanger for the
            Appellant.·
                 S.N. Kackar, V.K. Panwani and Girish Chandra for .the
            Respondents.                                                                            H
                    The Judgment of the Court was delivered by
       684                                     '
                             StJPk~MB CObRt ki!l>()kts        · [1982! 3 s.c.i.

              SEN, J. This appeal by special leave directed against the               .>
       judgment of the Bombay High Court dated April 21, 198 I raises a
       qµestion of some importance. The question is whether a claim for
       ejectment by a housing cooperative society, of an occupant of a
       flat who bad been let into possession of the premises under an
       agreement of leave and licence executed between him and a member
  B    of the society, by virtue of bis being a nominal member thereof,
       is a 'dispute touching the business· of the society' within the meaning
       of sub-s. (I) of s. 91 of the Maharashtra Cooperative Societies Act,
       1960 (for short 'the Act').


 c             The material facts giving rise to this appeal are as follows.
        The respondent No. 2 herein, Sbyam Cooperative ·Housing Society
         Limited is constituted under the provisions of the Maharashtra
        Cooperative Societies Act, 1960 as a tenant co-partnership type
        housing society to which Regulations in Form-A apply vfz. Regula-
      . tions relating to tenancies to be granted by the society to members
 D      in respect of houses held by the society. It owns and manages two
         bousing'colonies known as 'Sbya_m · Niwas'· and 'Navik Niwas' at
         Warden Road, Bombay. The society ~on_tinues to be governed by
         Regulations in Form-A ever since they were adopted by it after
        approval by the Registrar of Cooperative Societies in 1950. It
'E       appears that in 1954 the Directors passed a resolution for the intro·
        duction of Regulations in .Form-B but it was never implemented.
        The respondent No. I Rukibai N. Bhavnani is a' co-partner tenant
        member of flat No. 52 in building No. 5-A in· ,the housing colony
        known as 'Shyam Niwas' situate at Warden Road, Bombay.. The
        respondent No. 1 inducted the appellant in flat No. 52 under an
" F     agre~ment of leave and licence dated Novell!ber 28, 1961. The bye-
        laws of the society provide that no member can part with his
        posses~ion of the flat under an ~agreement of leave and licence to
        another except with the approval of the .society and unless such
        licensee becomes a nominal member thereof. The respondent Nq. I
                                                                                      t
       and the appellant accordingly appiied to the society on December 8,
 G      1961 for accepting the appellant to be a nominal member. The
        respondent No. ~ society passed a resolution N,o. 90 on December
        15, 1961 ,accepting the appellant as a nominal member. The leave
        and licence agreement executed by the respondent No. I was
        renewed from time to time and the last agreement was executed on
 H       January 10, 1965, the term of which was to expire on February 28,
        1965 .. By her notice d!lted March 31, 1965 the respondent No. I
        called upon the appellant to vacate the premises as his occupation


                                                                                  '
                        0. N. BHATNAGAR v. RUKIBAI (Sen; I.)                 685.

           of the premises .had become unlawful after termination of the                A
           licence. The appellant failed to comply with the demand and has
           remained in unauthorised occupation of the fiat for all tbese years ..
                 After termination of the agreement, in May 1965, the respon-
           dent No. J Smt. Ruklbai N. Bhavnani <:!aiming to be a co-partner.
           tenant m~mber of the society and as such holder of fiat No. 52,              B
           brought proceedings against the appellant before the District Deputy
           Registrar Cooperative Societies Bombay under s. 91 (I) of the Act
           for his eviction and for recovery of arrears of compensation and
           mesne profits, impleading the society as Opponent No.. 3. On re·
           ceipt of the claim under s. 91(1) the Assistant Registrar, Cooperative
           Societies issued notice to the appellant for the purpose of satisfying       c
           himself that a dispute under that section existed. The appellant
           however did not appear before the Assistant Registrar who was
           seized with th.e matter but instead filed an application before the
           Court of Small Causes, Bombay for fixing stand.ard rent of the flat
           in disput.e. These proceedings were stayed pending adjudication of
           th~ dispute by the Assistant Registrar. The Assistant Registrar in the       D
           meanwhile proceeded with' the inqqiry and after holding that such
           a dispute exist he referred the case to the Registrar's 1,1ominee for
            adjudication. The appellant did not challenge the decision of the
            Assistant Registrar.
                                                                                    •
                 Before the Registrar's nominee the appellant filed his written         E
           statement and thereafter evidence of the parties was recorded. · It
           appears th~t when the proceedings before the nominee were about
           to end he returned the papers to the Registrar as he did not want
  .   '
           to proceed further in the· matter. When the Registrar's nominee
           returned the papers, the • Registrar assigned the case to a retired
                                                                                        F
---- "'-   District Judge as an ·Officer on Special Duty to adjudicate upon
           the dispute under s. 91 of the Act, as by then the old system
           of su~h adjudication by the Registrar's nominees had been replaced
  t        by the appointment of Officers on Special Duty. Before the Officer
           on Special Puty the appellant made a demand for a de novo trial
            which was granted. Again, the J~vidence of both the parties was
                                                                                        G
            recorded and the matter reached the stage of argument but in the
            meanwhile, in April, 1970, the appellant brought a suit in the Court
            of Small Causes, Bombay for a declaration that he was a tenant of
            respondent No. 3 in respect of the flat in dispute and obtained a
            temporary i0junction restraining respondent No. I .from. proceeding         H
            with her case before \he Officer on Special Duty. Thus, the pro-
            ceedings before the Officer on Special Duty remained stayed till
     686                SUPREMB COURT RllPORTS              (1982) 3 S.C.R •.

A    April, 1972, when the.suit filed by the appellant in the Court of
     Small Causes, Bombay was dismissed both on merits as well as on
     the ground that it was barred by limitation.


             After the dismissal of the suit brou"ght by the appellant, the
B      proceedings before the Officer on Special Duty were revived in 1972.
       Meanwhil~. the case bad been assigned to another Officer on Special
      Duty, a retired Preside'ncy Magistrate, for adjudication. Before him
      the appellant again demanded a de novo trial which was granted and
      therefore evidence had to be recorded afresh. During the stage of
      of evidence, respondent No. 2 applied for and obtained leave to be
c     transposed as a "disputant" as the Bombay High Court took the
      view that unless the societ)' was a disputant the Registrar would
    · have no judsdiction to proceed under s. 91 ( l) of the Act. The
      O.fficet on Special Duty by· his order dated August.27, 1973 rejected
      the application for transposition made by respondent No. 2.
      Thereupon; respondent No. 2 perferred a revision before the
D     Maharashtra Cooperative Societies Tribunal which by its order dated·
      February 8, 1974 allowed its application for transposition as a co-
      disputant. The appellant tried to assail the order of the Tribunal
      by a writ petition but a-Qivision !lench of the High Court by its
      judgment dated January 9, 1976 d.eclined to interfere. By this time
      the system of Officers on Special Duly was again replaced, now
E     by the setting up of Cooperative Courts. After tlie dismissal of the
      writ petition, the proceedings initiated by respondent No. 1 were
      assigned to a Judge of the Cooperative Court, Maharashtra. Before
      him the original plaint was amended making necessary averments
      with respondent No. 2 as a co-disputant. Again the appellant asked
      for a de novo trial, but in view of the provisions of s. 9.l·A(4) bis·
      application was rejected Respondent No. 1 was however resum-
      moned for further cross examination and thereafter the appellant's
      evidence was recorded. In August, 1977 there was a change of the
      J~dge of the Codperative Court and the appellant repeated his
      prayer for a de novo trial but this application of his also rejected.
G     The learned Judge of the Cooperative Court by his judgment dated
      April 18, 1978, made an award against tbe appellant for -possession
      of the flat is dispute and for arrears of rent and mesne profits
      amounting to Rs. 30,000. Against the award the appellant filed an
      appeal before the Cooperative Appellate Court but it was dismissed
H     in January, 1979. Thereafter the appellant filed a writ petition in
      the High Court in February, 1979 and it was dismissed in March,
       1981 by a learned single Jud~e. The appellant unsuccessfully
                               O.N. BHATNAGAR v. ll.UKIBAI (Sen, J.)                 687

                 preferred a Letters Patent Appeal w~ich was dismissed by a Division ·      A
                 Bench on April 21, 198 L

                         There are three questions to be determined in the appeal.
                 They arc : (!) Whet~er having regard to the fact that the parties .
                 stood in the relationship of landlord and tenant in respect of fiat
         •
                 No. 52, the remedy of the r~spondent No. 1 lay by way of a suit            B
                 for
                 .     eviction, before the Court of Small Causes,
                                                             .    - Bombay and not by
                 II refcreocc to the Registrar under s. 91 (I) of the Act ? It is urged
                 that the agreement of leave and licence was. merely a colourable
                 transaction for what in reality, was a lease and therefore the
                 appellant was entitled to the protection from eviction under s. 1J
                 of the Bombay Rents, Hotel and Lodging House. Rates Control                ·C
                  Act, .1947 (for short 'the Rent Act' which is a special. law dealing
                  with the relationship of landlord and tenant and therefore the forum
                  for trial ,is the Court of Small Causes which is a court of exclusive
                  jurisdiction over such matters, It is said that the non-obstante
                  clause in s. 28 of that Act •has an overriding· effect over the non-
                  obstante clause ins. 91(1) of )he Act. (2) Whether the respondent
                                                                                             0
                  No. 2-society had any locus standi to make an application for trans.
                  position, even assuming that the appellant was not a tenant but a
                   licensee : It is urged that the appellant was entitled to question the
                   legality and propriety of the order of transposition made in revision
                   by the Maharashtra State Cooperative Tribunal permitting the society      E
                   to be impleaded as a co-di~putant so as to bring the dispute within
         ).        the  purview of s. 91(~) of the Act. It is said that. the respondent

~                  No. 2-society without first terminating the nominal membership of the
                   appellant could not make a claim for his eviction from the fiat in
               1
                   question (3)' Whether a claim for ejectment of an occupant of a fiat
    :::;
                   by a housing cooperative society having been let into pqssession of       F
                    the' premises under an agreement of leave and licence executed
         ~-
            '-      between him and a member of the society, by virtue of his being a
          •
                    nominal mem)J~nhereof, is a 'dispute touching the busines~ of the
          t
                    society' within the meaning of s. 91(1) of the Act? We proceed to
                    deal with these questions in turn.
                                                                                             G
                      . The statutory provisions bearing upon these questions are set
                   out below. The relevant provision of sJb-s. (l) ofs. 91 of the Act,
                   prior to its amendment, provides :

                            " "91 ( l) Notyvithstanding anythi.ng contained · in any         H
                         other law for the time being in force, any-dispute touching
                         the .. ,.,,business of a society, shall. be referred by any of
     688                       SUPREME COURT REPORTS          (19821 3 s.c.~.

A           the parties to the dispute ......... to ·the Registrar if both ..
            the parties thereto are one or other of the following :.

            (a) a society ............. ..

            (Ii) a member, past member or a person claiming through                   •
                 a member ............... "
8
     Section 91(2) of the Act lays down that when any question arises
     whether for the purpose of sub-s. (I) any matter referred to for
     decision is a dispute or not, the question shall be considered by the
     Registrar whose decision shall be final. The Registrar is, therefore,
c    required to.decide as a preliminary issue the question whether the
     dispute is of the kind as between. the parties in sub-s. (I). Unless
     he finds that the dispute falls within s. 91(1) of the Act he will
     have no jurisdiction to decide it. It also a.ttaches finality to the
     decision of the Registrar on the preliminary issue. Section 91 (3)
     states that save as otherwise provided under s. 91 (3) of the Act, nci
D    civil court shall have jurisdiction to entertain any suit' or other
     proceeding in respect of any dispute referred to in sub-s. {I).

            Section 28(1), of the Rent Act insofar as material, reads:

                 "28(1) Notwithstanding anything contained in any
            law and notwithstanding .that by reason of the amount
E·
            of the claim or for an:v other reason, the suit or proceed-
            ing would not, but for this provision, be within its                       ..(,
            jurisdiction .
                           I
                                                                                                     c
            {a) in Greater Bombay, the Co.urt of Small Causes
                Bombay,                                                                       -;,.
.F
           {aa)          xx            xx      xx                               .r   ~---
                                                                                       ,
            (b)          xx            xx      xx
                                                                                      'I
            shall have jurisdiction to entertain and try .f apy suit or                              I
G           proceeding between a landlord and a tenant relating \p 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 qucsiion arising out of this Act or any of its
H           provisions and ... no other court shall have jurisdiction to'
            entertain any such suit, proceeding or application ·or to
            !le!ll with such claim or question.''
I                                      O.N. BHATNAOAll. v. 11.UIJBAI iSen, i.)

                            Tile two ~nactw~!lt$ 9e~I wi!h !)Iv,() distiqct an9 sellifrate
                    fielcjf and iher.tfm~ the rwn·o~sfq"fl/G .c;l11µs~ ii) ,. 91(1) of the Act
                                                                                                68~


                                                                                                           A
                    and that ins. 28. of the Rent Aci operate- op two different planes.
                    the two legislations pertain to dift"er~nt 'topics of legisla.tion. It will
ol                  be noticed that s. 28 of the Rent Act prjl,(lj:e~J oP ll!e bJsis that
                    exclusi:ve juri&diction is confuri:ii en cer.t.ail! .c;qµr11 t9 lll\Cide all
       •            questions or claims under that Act .as to parti~J lwlW~I! whom                         B
~                   there .is or was a relationship of landlord and tenant. It does not
~     ,;
 {~                invest those courts with exclusive ·power to try questions 'of title,
                   1ll9J! .II! b~fwe.~q /~l' ri~~tff1) o~n~f ~~~ ,a tre~p~~ser or a !ice~s~~·
                    for such questions do not arise under the Act: The appellant
                   having raised a plea in the nature of demurrer, the question of juris-
                   dic\jop ~114 ~ b~ ~!Fftpipr<I ~i!q ~YFf!,~'l,~ tq tlj~ allegations 1
                   contained in the statement of claim ma~r.           gy         t~~ r~spp~de9~ No. I
                   under s. 91(1) of the Act and those allegations must ·be taken to be
                   tru~.. The ~JP<>ll4en! tfo, ~ IJl1~9µivpj:ally f~s.ens t)/~I the parties
                   sto111! i11 ti\~ i~WjQJ .of li!;e11~or ,1µ19 !ipel!Sil'e ,lllld t~t fact is clearly
                   bol'l!e l!Jll l>Y !hg terl!lS gf t~ llSF~~J!le111 of le.ave ap,cj )icence as
                   betl}'~ll lb¢ JlllT#!ll• 'fhe tnn<len ~~.s Pll t~e appell~nt to establish               I>
                   th-1 he l)a~ ~~~ 11t11t11• qf a "!~111.1.111'; witbil! t.be lll~~11ins of s. 5(11}
                   or tit~ Re11t 4RI• as ii t).t,en ,100~. pn~ 1"81 Jmrd,e,I! !,le has failed to
                   dis~])arse. If, lh•Q:f\lr~, pliiiff!itf jn !~~ p)~i!!t docs not admit a
                   relationship whi\:l1 w.01114 !iltT,aqt · @!If pf f4~ · prQvisi?~s · of the Act
                   on 1 hich tb. ~. f. x.c(1.".iv,~ j.yr.i. ~.4ictJol1 jliy~n. in s. 2? pe]l!ll)dS, the
                       }1'.




•.           •
                   de(end11nt ~~nnqt by !ii~ pie~ fo.rce ~~~ plaintiff to $1> to a forum
                   wlJ,er.e QJ! @ver111e11ts t!Je claim 4Pes 110,r J1e.
                          In our opinion, there is a felt need at the very outset to dis-
                                                                                          ·


                    place .the appellant's apprehensions that the effect of upholding the
                    judgment ,of the ijigh f:::ourt would ~e to throw· all licensees of
                    residfntj~I ft~ts. in m?)!i:storeyed b~!ldin.¥s befongfng to cooperative              .F
                    ho!J~mg ~!Jciet1es w1tho~t aily protection. The apprehensions, ff
                 -. w~ may say SQ, appear to 6e 'wholly unfounded. .The Legislature
                    w~s fu)!y aware of the acute paucity ·of· honsirig accommodation in
       .~·          the metropolitan city' of Gre~ter · Bombay and· other urban areas in
                    the ~tate, 'll!!d. also the fact' that lessors of ownership flats were
                    adopti~g a device of inductln$ tenants ·under the garb of an ljgree-                  G
                    inenl of leave arid licence \Vhfoh left the licensee·witb no protection.
                    The Legislature therefore, stepped in and by Maharashtra Act 17 of
                    1973 the foilowing provisions were inserted in tlie Rent Act. Sub-s'.
                   '                      .
                                                        as
                    (1) of s. I SA of the Rent ACt, introduced now: provides :
                                                   .         '
                                                                                                          H
                                    "J~A(I) No!wit!ist~4iog WYlhipg co11\~ined elsewher.e
                              in this A9t or anything contrary in any ·other ·!a1V for th~


ii
                                       \



       690                   SUPRllME COURT REPORTS             (1982) 3 s.c.R.

 A      'fl t.ime being in force, Qr in any contract, where any person
              is on the I st day of February 1973 in occupation of any
             premises, or any part thereof which is not less than a               '
             room, as a licensee he shall on that date be deemed to have
             become, for the purposes of this Act, the tenant of the
             landlord, in respect of the premises or part thereof, in his
 B           occupation;                                                          ,
             (2)        xx                    xx           xx          xx0
                                                       ~
      The term "licensee" as defined in s. 5(4A), msofar as material,                     ...
      reads:
c                  "5. In this Act unless there is anything repugnant to
             the subject or cont~xt-

                   (4A) "licensee", in respect of any premises or any
             part thereof, means the person who is in occupation of the
             premises or such part, as the case may be, under a subsis-
D             ting agreement for licence given for a licence fee or charge;
             and includes any person in such occupation of any premises . ·
             or part thereof in 11 building vesting in or leased to a co-
             operative housing society registered or deemed to be regis-
             tered under the Maharashtra Cooperative Societies Act,
             1960; .but does not include a paY,ing guest, a member 6f
E
             a family residing together, a person in the service or
             employment of the licensor ·etc; ......... and the expressions
             "licence, "licensor., and "premises given on licence" shall
             be construed accordingly."

F    It i§ clear upon the terms of these seetions that the appellant is not
     entitled to the protection of s. !SA of the Rent Act. The Legis-
     lature in its wisdom has drawn a. line at February I, 1973 and laid ,¥'_..,...
     down the condition that a licensee in occupation under a subsisting , r •
                                                                                      -
                                                                                    '··


     licence as on that date shall. be deemed to be a tenant. The sine
     qua non for the applicability of s. ISA of the Rent Act is that a
G    licensee must be in occupation as on February 1, 1973 under a
     subsfsting licence. ·It is not disputed that the appellant does not
     answer that description since the ·agreement of leave and licence .in
     his favour admittedly stood terminated by the.notice of the respon-
     dent No. I dated March 31, 1965. That being so, the appellant is
ll   nothing but a rank trespasser and is not entitled to the protection
     of s..I SA of the Rent Act and cannot therefore plead the bar of
     s. 28(1) thereof.
                            0.N. BHATNAGAR v. RUKIBAI (Sen, J.)                   691

                      As a result of the introduction of s. l 5A and s. 5(4A) of the      A
              Rent Act by Maharashtra Act 17 of 1973, the licensee of any pre-
      •       mises or any part thereof in a building vesting in or leased to a
              cooperative housing society registered or deemed to ·be registered
              under the Act, who was in oceupation of such premises under ·a
              subsisting licence as on February I, 1973, 'is by a legal fiction,
      •     · deemed to be a tenant and thus bas the protection of the Rent Act.          B
              In such a case, the dispute between a licensor and a licensee relating
              to possession of the premises of a flat would: attract s. 28 read witm
              ss . .15A and 5(4A) of the Rent Act and fall outside the purview of
              the Registrar's jurisdiction to adjudicate upon sucl:t dispute under
              s. 91 (I) of the Act. Once this aspect is .kept in view, there need be
              no apprehension \s expressed by learned counsel for . the appellant         c
              that tbe effect of upholding the judgment of the High Court would
              be t<;> throw all licensees of residential flats in multi-storeyed build-
              ings belonging to cooperative housing societies without any
               protection.

                    It would be convenient to deal with the first two questions
                                                                                          D
            together. The submission that the a~pellant was inducted as a
            tenant under the agreement of leave and licence is wholly mis-
            conceived. The distinction · between a lease and a licence is well-
            known. A bare reading of the agreement of leave and licence is
            clearly indicative of the· fact that ·tbe appellant was a· licensee.
            Admittedly,' his occupation of the flat was not as a tenant but as
                                                                                          E
             a licensee. That apart, the appellknt brought a suit before the
             Court of Small Causes seeking a declaration·, that it was a tenant
            duly protected by the Rent Act and the agreement of leave and

...     '• ·licence was only a colourable transaction, The suit was heard on
             merits and was dismiised by the Court of Small Causes in July
             1972. Aggrieved by that decision, the appellant preferred an appeal
      ~efore the Appellate Bench of the Small Causes Court but that
                                                                                          F

             appeal also ·'Was dismissed. The question whether or· not the
       t .   appellant was a licensee of the flat or a tenant thereof was directly
             and substantially in issue between the parties in , that suit. The
             finding that be was not. a tenant but had only the status of a licensee      G
             operates as res judicata between the parties. The appellant having
             fai!ei:I in his suit for declaration of his alleged status of a tenant
             brought in the Court of Small Causes cannot be permitted to re-
             agitate the same question in these proceedings. Further, the licence -
             of the appellant having been terminated by the respondent No. I              II
             by her notice dated March 31, 1965, the appellant was not in occu·
             pation of the fiat ·on Februarl/ Ii 1973 '!oder a, stibsistin~ tenancr
    692                     SpPllBME COURT llEPOllTS         l 1982] 3 s.c.R.
A   and did not acquire the status of a tenant under s. 15A and is
    therefore not protected under s. 13 of the Rent Act.
                                                                                '
          As bereinbefore adumbrated, the respon<)ent No. 2-society is
    governed by the Regulations in Form'.A: It is registered as a co-
    partnership -type housing society. The bye,laws of the society
    provide, inler-alia, by Bye-law 2 that one of the objects of the society
    would be .to carry on the trade of buying, selling, hiring, lett!ng and
    developing land in accordance with cooperative principles. The
    respondent No. 1 is a co-partner tenant member and holds flat No.
    52 in Form-A. The fl;it in question therefore belongs to the society
    and she is a co-partner tenant member thereof. Paragraph ·s of
c   Form·A reads :

              "S. No ten.ant 4.l)all M§iil!, l!nderlet, vll!late or part        ~.
          with the poss~ssion Qf .tb.e t~Mment gr any Part tb~reof ·
          without the consent in writing of the society."

D   Tl)e two bye_-laws relevant for .qur purp 0ses are Bye-laws 66 and
    68(a) which prpyide 11s foU.ows :

                ... 66. WbcnCVl'J' a m,J!lb~ to i,vljoJ!l a tenement, a shop
          or a godown h;is bjseJI 1!,llptted ·by the Sqciejy .docs not
          require the same fpr !)is P.wn µse temporarily or fpr a
E         specific peripd, be · may Pifer the same to any
          Pers.on, as a liceo.see for ~eJP,porary occup11tion for a speci-
          fiel! perjpd, provil!Pd !~~I b.e slJ!lll-(a) sign and under,
          ~ajcing ~requited ))y tl)e !!oci.ety; (g) g~t such temporary
          occupant enro)l~d l!s a llPminal wember of the society;              '•
          (c) sl:lall not per111it "1pb o.~pupation before receiYing per-
F         mission from t4e Society's i:;oi)lmittee to do so, provided        ·
                                                                                  11111
                                                                                  ),-
          such permissiop sha\J 11pt )),e coµsidere<!, unless the member ~-­
          has paid all his due to the Society 11ptodate, and a11thorizes
          the Society to recover fr.pm the nominal memQ.er, out of
          compensation or rent. receivable by him from the 9ominal
G         member any amount due from the member to the So.ciety
          by way -0f ,t11xes, general charge& or any other dues."

               ".68(a) No per~n sh.i,I j)e' ~b,ten~.t or licensee. or
          lessee etc. Qf the-So,cj~y or of;i. member, unless the Com,
H         miltce first ~µtol~ hi!ll ' ' Nomin11l Member of th.e Society
          and he pays Rs. ~OOJ11s a security deposit to tlje Society.
          for this purpose., h~ bas to apply in a f()rm prescribed. by
                                   ~·




                            b.k illtAtNA<lidt v: iblaoAI (Self, J.)

                  the Society. The Se~ntfty tl~jloi!if Wlll .M!f iltt ~ml                          A
    •             and will be issued iii the joitlf llllrll~ Of Ille SO~iety <Jt t'lle
                  member (as the case may be) 11t1d t~ oecupant and it will
                  be refunded on the ottilpant 'Vlicating 'lft~· lenimlent iii
                  question."

                       The. respondent No. l couid not have fot the premises to the
                                                                                                   B
               aj>'pelfant in view of para 5 of the Form-A. All tnat she could do
               ifshe did not requite the Ila! for lier immediate occupation was to
               petinit the appella~t or sdme one fo occi'.l]fy ilie same under an
~ ,L. agreement of leave atid licence. llul fdr thfll · iilltPMe both fhe·
               pai'ties had to ~omply with tire te'qurte'ttteim of By~-lllws 66. abd
               68(a). The respondent Na. I l!'!l'd tll~ rtppeffailf accoraing(y t;y
              'tb;ir application datedpecember 8, 1961 applied 115 tlie so~iety fdt
               permission to let the flat on leave and licence and for the issuance
               of five 'B' shares of Rs. JOO ellCti it! lbefr jlii'llt nlllne's ~lied "occu·
                pancy shares". Tlie te!ponde'nt NO. 2•4(Jtlieti ht it~ teso1utioti
                d«ted Decembet Is, 1961 isstlOO Ille sfliir~ ats!)lied tot i·n their j6frii        D
                names tn'd lliso admitted lite irppe!Jant fts a llohlirliil tnember tot
                tire purpose of occupjlinJi the flirt. At'ler th~ tetinii!iifion'Of the· ttgre~·
                Ynent tif leave an:cl li¢cnce, the aptieffant lrad ·no tight io remain iii
                6ecnpatfoit of the 6:it. t11e eonletl'tton thal tne resjiond'ent No. 2-
                9'6'CieTy cannot raise a di~pute tegMlliilg his unauthorized occupation
                of the jit~mises ilftef !h'e reVocli!ioil of ilic ficehcc is devoid of
                tubM'll'tlce. The re!;p'(!nde'!'l! !Ito. 1-Mcl~y 'being a co-pattnershiJ>
                 type libttsilig ~dcMy, ljilVfog let lia:t N6. 52 to the tcspopdent No. i
                 at a co'jiStfilet te'llaht inel!lbe'r, Vl'as "<>lf«ily ltiteresl¢d in ensuring
                 tl\ai no stranger is in urUiuthorited 6Ccupa'ffon of fue fiat after the
                 expiry of t1re term ofthe fi~n:ce as it wo'111d teM fo cause annoyance
 '...            and inconvenience to the other co-partner tenant members .of the                  F
      --.....__~!W<liety.


                   fh~re was a determined effort to quJstion the legality and
             ptopiiety of the order passed by the Maharashira State Cooperative
             Tribunal allowing the application for transposition made by respon-
             dent No. 2"'."'socfoty bl.ft we did not permit the appellan't to do so
                                                                                                   G
             for obvious reasons. The appellant had challenged the impugned
             order of the Tribunal by a writ petition in the High Court and
             eventuaJly~failed. The appellant ri'ot having questioned the. judgment
             of the l{igh Court, the order ·of the Tribunal ~llowing transpo&itiOll'               II
              of the respondent No. 2-society as a co-disputant bas attained a
             finality which cannot now be upset. The p~ci~ings initiated by ~
                               SUPkilMB t:obu REPoRTS           i19s2l 3s.c.a.
      the respondent No. 1 under s. 91(1) of the Act could not go on after
      the High Court had taken the view in certain,cases that unless the
      cooperative housing society is a disputant, the claim by a member
      thereof for possession of the premises o(a fiat against a licensee
      would not be a dispute falling within, the _ambit of_ s. 91(1) _of the
      Act. That being so, quite apart from technicalities, we are inclined
B     to the view that the High Court was fully justified in not interfering
      with the· impugned order· of "the Tribunal allowing transposition.
      The Tribunal adopted a course which was both eminent and just and
      was necessary for doing complete justice between the parties. The
      appellant who is a rank trespasser has no equity in his favour. The
      contention that the respondent No. 2-society could not be trans·
G     posed as a co-disputant in the proceedings under s. 91(1) of the Act
      must therefore fail.

                The third questio11 is the much vexed question on which the
        decision of the appeal mus_t turn. · It is · submitted that the dispute
D       between the licensor and the licensee was not one falling within the
        purview of s. 91(1) of the Act. It is _said that a dispute between a
    ·•,,.flai-owner ·and the occupant as regards tenancy cannot be taken
        cognizance of by the Registrar under s. 91 (1) of the Act, but the
        remedy of the fiat-owner lies by way of suit for ejectment under s. 28
        of the Rent Act. The submission is that the fact that such letting
E      'was forbidden by a regulation of the society was immaterial. In
        reply, it is urged that the dispute undoubtedly is a dispute touching
        !he business of the society and therefore comes within the ambit of
         s. 91 (I) of the Act. It is further urged that the non-obstame clause
        in s. 91 (I) of the Act had an overriding effect over s. 28' of the Rent
         Act, prior to the introduction of s. ISA and s. 5(4A) in that Act.
F                                                                                  ~~
           There has been a long de1'ate as to the true meaning of the ,.>---
      words 'touching the business of the society' occurring in s. 43(1)     or
      the Cooperative Societies Act, 1912 and there was a divergence of
      opinion expressed by · different High Courts but it is not necessary

G
                                      .
      to burden the judgment with many citations;

           In Deccan Merchants Cooperative Bank Ltd. v. M/s. Dalichand
      Jugraj Jain & Ors.,(1) the Court had occasion to construe the
      meaning of the expression 'touching the business-of a society'
      occurring ins. 91(1) -of the Act •. It was observed that the answer
H     depends on the words used in the Act and that the non-obstant e

           (I) [t969J t s.c.R. 887.
                      6.14. llHATNAGAk v. kuKIBAI (§en, J.)
      clause clearly ousts. thejurisdiction of civil courts if the dispute falls   A
      squarely within the ambit of s. 91(1) of the Act. The Court·then
      went on to enumerate five kinds of disputes mentioned in •s. 91 ( l) :
      first, disputes louchiog the constitution of a society; secondly,
      disputes touching election of the office, bearers of a society; thirdly,
•   - dispu'tes touching the conduct of general meetings of a society;
      fourthly, disputes touching _the management of a society and fifthly,        B
      disputes touching the business of a society. .Io the context, it was
      said :
                 "It is clear that the word 'business' in this context does ·
            not mean affairs of a society because election of office-
            bearers, conduct of general meetings and management of a
            society would be treated as affairs of a society. In this
                                                                                   c
            sub-section th'e word '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 it bye-laws:"                                                D
      Io regard to the question whether a dispute touching the assets of a
      society would be dispute touching the business ,of the society, it ·was
      observed:

                    "Ordinarily, if a society owns buildings .and lets out         E
               parts of buildings which· it d()es 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 be that it
               is the business pf a society to construct and buy houses and
               let them out to its members. In that case letting out pro-
               perty may be part of its business."                                 F·

            Th~s,· the Court adopted· the narrower meaning given to the
      word 'business' as expressed by the Madra8, Bombay and Kerala
      High Courts in preference to the wider meaning given by the
      Madhya Pradesh and Nagpur High Courts. According to the view
      taken in.Deccan Merchant Cooperative Bank's case, supra, the word            G
      'busjoess' in the context means "any trading or commercial or other
      similar business activity of the. society". It was held that the word
      'business' in s. 91(1) of the Act has been used in a narrower sense
      and that it means the actual trading, commercial or other similar            H
      business activity of the society which the society is authorised to
      enter into under the Act and the rules and its bye-laws,
                                                                                 .
                                                                     !J982l 3 s.C.ll.
A             In the present ease, thli ~oclefy is, Ii teilililt lco-piirln6ishij)
        type liousimg society formed with the object of pro\>idill~ residential
     . aCCO!llmodation to its CO' partner tenarlf lii~'nibers. Now' the natute
       of. business which a society carries on lias necessarily to he ascer-
        tained from the object for which tlie soi:iety is constituted, and it
       logically follows that whatever the society does ln the nortnal coutse           •
d       otits activities such as bY initiaiing ptoceedlngs tor temovilig an 'act
       ot trespass by a stranger, frem a llat atlorteli t'6 .ci!le of n~ 11\eMbrel's,
       cannot but be part of its business. It is as much the concern of t'be
       society formed with the object of prqviding residential accommoda-
       tion to its members, which normally is its business, to ensure that
       the fiats are in occupation of its members, in accordance with the
c      bye-Jaws framed'by it, rather than of a person i111an 'unauthorised
       occupation, as it. is the concern of the member, who lets it o'ut to
       another under an agreement of leave and licence and wants to
       secure possessiop of the premises for his own use afier the termi-
      nation of the licence. lt must, therefore, foif<iw that a claim by the
[)    society together with such member for ejectment . of a person who
      was permitted to occupy having become a nominal member thereof,
      upon revocation of licence, is a dispute falling within the purview of
      s. 91(1) of the Act. The decision in Deccan Merchants <::ooperative.
      Bank's case, supra, ls clearly distinguishable on facts. There, the
      Court was dealing with a society which was a cooperative bank and
E     ordinarily a cooperative bank cannot be said to be engaged in
      business when lt leis out propdrty o\Vned by it. If! that case, the
      dispute was not a dispute ·~etwein 'a ~Mi~ty and ii 'membilr or a
      person claiming througb i lllember. FurtliC't \We'll the original
      owner executed the lease, 11~ was ii6t actil'l'.g a's al!i~itlbef f>\it as a
      mortgagor in possession arid tlle'refote tli(coo~'tratiVi: hlink'k 'claim
F     for ejectment orthe Jessee did not fall Wit'b'iti s. 91{1) (b) OtttteA9t.         ""'
             It is true that the Court in Deecan Merchanta Cooperative ~­
      B~nk'.s i:ase, sbtlril; 'dedft \tifli ''Ii! \\u~ifftt Whetlfer on tbe fatli and
      circiiln'stances 6T tliat case, tlil! Rl!!it Act apilffell tlld accordiugfy the
     jurisdiction t!f Hie Regis!fa't utl\ft!r 1. 91(1) l:Sf the Act was ousted
G    aild it was only the Cohrt of Stnall Cattse'S Wliich hlad jll'tisdictioll ·
     to evict the tenant. The ddutl rl!femd to the twin' social <!bjectives
     with which the two ,enactb'ltlif9' were dcsignerd and obsetV'ed that
     wliile s. 9 J(l) <>f the "Act was il!tended add meant; in the m'llin, to
     shorten lifig'iifioh, lesl!tn i~ l!o&U iln4' t61roVidc a: wmmaty proec-
     dilte for tlie detetlllill'atio'fl bf 1111' dilplltes rt!lating to the i·nternal
     management of the soCiefie~. ·t11e Relit Aet waa i1itdnded to achieve
        ..
                  tut BHATNAGAR v. RUKJBAI (Sen, J,)

    a different social objective i,e. to prevent the eviction of tenants           A
    and enhancements of rent, and then went on to say that it was
    necessarr that a dispute between the lal!dlord and tenant should be
    dealt with by the Courts set up under the Rent Act and in accor-
    dance with the special provisions of that Act. It then dealt with
'   the inter-relation between the non-obstante clause in s. 91(1) of the
    Act , and s. 28 of the Rent Act and observed that this special
    objective under the Act does not impinge on the objective under-
                                                                                   •
    lying the Rent Act: It seems to us _that the two Acts can be best
    harmonised by holding that in matters covered by the Rent Act,
    its provisions, rather than the provisions of the Act, sliould apply.
    But where the parties admittedly do not stand in the jural relation-
    ship of landlord and tenant, as here, the dispute would be governed            c'
    bys. 91(1) of the Act. - No doubt, the appellant acquired a right
    to occupy the fiat as 11 licensee, by virtue of his being a nominal
    melllber, but in the very nature of things, his righlt were inchoate.
    Io view of these considerations, we are oi the opinion that the
     prol!eedings t111der s. 91 (I) of the . Act were not barred by the
     provisions of s. 28 of the Rent Act.                                          D

           A great deal of relianee has been placed by the appellant's
    counsel on the decision fo Sabharwa1 Brothers & ilnr. v. Smt. Guna
                      ef
    Amrit Thandani lJoinbay .('t) · The 'importanee of thaf.ca8e lies in
    tire fa(!t that it relates to the respondent No, 2 1cici91)11 1UAI tbil
    diipotant tH11re wzs the owner of a ftat on the Slicdtrd fioor of 1lltlck
    f4il. 8 "Shyam Niwas" • She was 'II meritber '<If the s<lli!ety 'add inrd
    ~o.\red the fiat in qoesticlll, _'lvh!Cb Wa&· 'tet oot to th6 ajjjl'ellallt
    Sllbhatwal Btoihers ntltler an ag1"9ei*nt ofteave~d lice~. wlltdi.
    #Ifs tene~ !'roln time to 'iinte mid whtn she lffi&d th6 a{l~lill1t fo         F
    'Vlllla~ as llhe requited the -fiat fdt her lJerBonill occuprtion, llidy
    did not comply with the demand as a result of which the~ owner ol
    the fiat filed a statement of clail)l before the Registrar under s. 91(1)
    of the Act which reqtil'ielt a8,Jlrd'icaiion: .. i'hefe 'was ii challenge to
    the jurisdiction o't the liolni.riee of ille 'Regiattlir 'to whottr It was
    referred, and ultimate.ly he made an award that the appellant                  G
    Sabharwal Brothers hacl ·occupied 'th.e flat on leave and licence basis
    and was therefore liable to be evicted. In revisiOn, 'the Dench 'of the
    Smalt Causes Cou'rt held that ~the Registrar's 'nominee aid &live
    jurisdicfion and the lligh 'Court uplicfd the order of 'the Deneb.
     Allowing the appeal, this Court observed :                                    H

        \i'l t1n:i1 1s:c.a. ,s3.
    698                 SUPRlli.iE COIJkt REI'Okts            t19Sil 3 s.c.l.
A               "With all respect to the Higi} Court, it seems to us that
     •     there was a fuadarneutal error in the above approach. No
          doubt it was the business. of the society to let out premises
          aild a member had no unqualified right to let out his flat or
          tenement to another by virtue of the bye-laws and a breach
          of the bye-laws 'could affect the defaulting member's right
B         to membership. But we are not able to see how letting by
          a member to another member would touch the business of
          the society which included in.ter alla the trade of buying,
          selling, hiring and letting land in accordance with coopera·
          tive principles. The letting of flat by respondent No. I
          was a transaction of the same ·nature as the society itself
c         was empowered to enter into but and Jetting by itself did
          not concern the business of the society in the matter of its
          letting out flats. Nothing was brought to our notice to show
          that such a letting would affect the bu~iness of the society
          once it had sold the flat to the respondent No. I. the
          ·position might have been different if the latter had himself
D          been a tenant of the flat 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 letting by the
       ·· respondent No. and the business of the society when the
          society was not itself the land.lord of the flat."       ·
E   It is we ·think, important to remember that this authority decided
    only one point albeit a point of great importance namely, .that the
    society . having ~old th~ ·flat, like any other vendor of immovable
    property, the lettmg out of. the flat by the flat-owner was no concern
    of the society. . There was nothing to show that such letting would .
    affect the business of the society once it has sold the flat. With
    respect, we entirely agree with all ,that was s~id. But then the
    Court went on to say :                   '
              "The position might have been different if the latter
          had himself been a tenant of the flat under lhe society."

G   It logically follows, as a necessary corollary, that if the transaction
    between the society and the holder · of the !lat were governed by
    Regulations in Form-A, as h~re,. that is to say, if the society had
    let out the Ila t to her, the decision of the Court would have been
    otherwise.
H
          The decision in Sabharwal Brothers' ca.•e, supra, is distinguish-
    able for two reasons. First, there was an outright sale of ,the flat by
                                                                        ,
                   O.N. BHAtNAOAR v. RtiKlBAI (Sen, !-)                  69~

    the society and not th~t it had been let out to her under' Regula-         A
•   tions in Form-A; and secondly, the society having sold the flat, the
    letting of the flat by the flat-owner did not in' any way affect the
    business of the society in the mater of its letti"ng out the flat. ·The
     observation made by this Court that the fact that such Jetting was
    forbidden by a regulation of14e S<?Cfoty . was immaterial did not fall
    for decision in that case and was ,a mere obiter.                          8
           In the result, the appeal must fail and is dismissed with costs .

    S.R.
                                          •                Appeal dismissed.




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