ivil Appeal No 4979 of 1990
From the Judgment and Order dated 2581989 of the Bombay High Court in WP No 6058 of 1986
468 VM
Tarkunde DR Poddar and VB Joshi for the Appellant
KP Parasaran NP Rama Subramaniam AK Ganguli RP Bhat K Swamy and AS Bhasme for the Respondents
The Judgment of the Court was delivered by KANIA J
Leave granted
Counsel heard
This is an appeal from the judgment of a learned Single judge of the Bombay High Court dismissing Writ Petition No 6058 of 1986 filed by the appellant on the Appellate Side of that Court
The appellant and respondent No 1 are companies incorporated under the Indian Companies Act
ReSpOndent No 2 is a Cooperative Society registered under the Maharashtra Cooperative Societies Act 1961 hereinafter referred to as the said Act
Appellant is a member of respondent No 2 Cooperative Society and has its office premises in the building owned by respondent No 2
Some time prior to September 10 1985 the appellant entered into an agreement to sell the said office premises to respondent No 1 subject to the approval of respondent No 2
The terms of the said agreement were incorporated in a letter dated September 10 1985 addressed by the appellant to the Vice Chairman and the president of respondent No 1 It was set out in the said letter that the price for the said premises was to be calcu lated at the rate of Rs 2000 per square feet
The letter further stated We are agreeable to sell you the same subject to approval of the Cooperative Society owning the building
We shall provide you vacant possession and hand over the same free of all incumbrances only after we are able to obtain alternate accommodation for our company   
A sum of Rs 50000 was paid by a demand draft by re spondent No 1 to the appellant under the said agreement
By a letter dated November 15 1985 the appellant sought the approval of respondent No 2 to the transfer of the said office premises to respondent No 1
By its letter dated November 18 1985 addressed to the appellant respondent No 2 stated that the appellant was requested to offer to trans fer of the said
premises to the existing members of the society as a first preference as per the established prac tice of the society
It further stated that in case the existing members of respondent No 2 were not willing to buy the said premises the premises could be given for trans 469 fer to an outside transferee
By its letter dated November 22 1985 addressed to respondent No 1 the appellant point ed out that respondent No 2 had declined to grant permis sion for transfer unless the premises were first offered to the existing members of the society by Way of a first pref erence
The said letter then stated that it was not possible to continue negotiations any further
Along with the said letter the demand draft of Rs50000 referred to above was returned by the appellant
Without any further correspond ence respondent No 1 filed a dispute in the Cooperative Court No 17 Bombay against the appellant and respondent No 1 by statement of claim which can be conveniently referred to as a plaint
In the plaint respondent No 1 inter alia stated that on the promises and representations made by the appellant to respondent No 1 it had paid a sum of Rs260000 to one IM Choksey representing himself as the Chairman of the appellant and one section Ramakrishnan claiming to be the repre sentative of his wife who was a Director of the appellant
Respondent No 1 further claimed that it had paid a further sum of Rs40000 in cash to the appellant without taking a receipt
Respondent No 1 urged that but for the assur ance given by Choksey and Ramakrishnan acting on behalf of the appellant and one Col
GD Hadep acting on behalf of respondent No 2 that the appellant would be in a position to transfer the said premises by the end of November 1985 and respondent No 2 would not object to such transfer respondent No 1 would not have paid such a huge amount to the appellant
Respondent No 1 further stated that the appellant and respondent No 2 had promised respondent No 1 that they would complete the formalities of transfer of the said premises within a few days and there would be no objec tion or obstruction whatever in the said transfer
Respond ent No 1 went on to say that it was given to understand that the appellant and respondent No 2 were conspiring to sell the said premises to a third party for a larger amount
Respondent No 1 was ready and willing to perform its part of the contract and prayed for an order for specific per formance of the contract
The relevant portion of paragraph 10 of the plaint which deals with jurisdiction sets out that respondent No 2 is a cooperative society and is vital ly interested in the transfer and sale of the said premises and to ensure that the transfer is done under the provisions of its bye laws the said Act and the rules
Respondent No 2 had taken active part in the transaction entered into be tween respondent No 1 and the appellant who _is a member of respondent No 2 and that respondent No 1 was claiming his rights through the appellant who was a member and hence the subject matter of the dispute fell within the ambit of section 470 91 of the said Act
Respondent No 1 prayed for a declara tion that the aforesaid dispute was a dispute falling under section 91 of the said Act and prayed that the appellant and respondent No 2 should be directed to specifically perform the agreement recorded in the letter of September 10 1985 and transfer the said premises to respondent No 1
The rest of the prayers in the plaint are immaterial for our pur poses
Pursuant to certain orders made by the Bombay High Court the Cooperative Court framed an issue as to whether it had jurisdiction to entertain the dispute
The Court recorded evidence led by respondent No 1 off this issue and dis missed the dispute for want of jurisdiction
This order was set aside by the Maharashtra Cooperative Appellate Court Bombay by its order dated September 9 1986
The appellant herein filed a writ petition in the High Court to challenge the said order
The learned Single Judge who heard the said writ petition dismissed the same and held that the case was governed by the provisions of section 91 of the said Act
 It is this decision which is sought to be challenged before us by the appellant
It is submitted by Mr Tarkunde learned counsel for the appellant that the agreement to sell the said premises with which we are concerned was entered into between the appel lant a member of respondent No 2 a Cooperative Society and respondent No 1 a nonmember
The said agreement was for transfer of premises belonging to the appellant to respondent No 1 a non member in a building owned by respondent No 2 a cooperative society
The claim in the dispute was for obtaining the specific performance of the said agreement and the prayer for directing respondent No 2 to approve the said agreement was in the nature of an ancil lary prayer to complete the relief
The main relief was for specific performance of the said agreement
It was submitted by him that such a dispute cannot be said to be a dispute touching the management or business of a society as con templated in sub section 1 of section 91 of the said Act nor can it be said that respondent No 1 a non member was making a claim against respondent No 2 society through a member namely the appellant
The main relief sought was for specific performance of an agreement by a member to sell the premises in the society building to a non member and such a claim can never be said to be made against the socie ty through a member
In order to appreciate the submissions made it is desirable to set out the material portion of Section 91 of the said Act which runs as follows 471 911 Notwithstanding anything contained in any other law for the time being in force any dispute touching the con struction elections of the office beares


Summary:
Respondents Nos 1 and 2 direct recruit Income Tax Officers CIasa I flied a petition before the Central Administrative Tribunal contending that they were not ap pointed to the next higher post of Assistant Commissioner according to their turn in the seniority list prepared as per directions given by the Court in Bishan Sarup Gupta etc
vs Union of India  and Union of India Etc
vs Majji Jangammayya   adversely af fecting their seniority as Assistant Commissioners and hence it required correction
The Tribunal quashed the seniority list of Assistant Commissioners and Commissioners of Income Tax and directed the appellants to redetermine their seniority in the cadre of Assistant Commissioners via a via the seniority of re spondents No 3 to 20 also direct recruits and other con cerned officers in the light of the directions and princi ples laid down by this Court in Majji Jangamayya s case
Hence the appeal by the Department
was contended on behalf of the respondents that in view of the instructions of this Court in 1st BS Gupta case 1975 Supp SCR 491 as explained in Majji Jangamayya s case while selecting the Income Tax Officers to the post of Assistant Commissioners the Departmental Promotion Commit tee was required to consider the cases of the Income Tax Officers falling within the zone with reference to the records either on the date of seniority list was prepared ie February 2 1972 as approved by the Court in 2nd Gupta case or on the date the Committee met for selection and not with reference to their records relevant to the year for which their selection was to made but since the Committee had followed the latter course it had violated the direc tions of this Court
It was also urged that the selection was not rode according to the instruc 336 tions given in the Government Memorandum of 1957 and that while making the promotions merit cum seniority and not seniority cummerit formula should have been followed
Allowing the appeal this Court HELD 11 The dispute with regard to the seniority be tween the direct recruits and the promoters in the Income Tax Department was set at rest by this Court in 2nd BS Gupta case wherein this Court accepted as correct the sen iority list of Income Tax Officers prepared in accordance with the directions given in the 1st BS Gupta case
While upholding the selection list for promotion of Income Tax Officers Class I to the posts of Assistant Commissioners prepared on the basis of the aforesaid seniority list and the instructions in the Government Memorandum of 1957 in Majji Jangamayya s case this Court explained the observa tions made in the 1st BS Gupta s case
338B C F 12 What was desired by this Court in the 1st BS Gupta case and Majji Jangamayya case was that if according to the new seniority list there were cases of officers who were entitled to be considered for promotion much before they were considered on the basis of the old seniority list the Committee should look into such cases and should adjust the promotion given right from the year 1962 onwards by consid ering the cases of such unjustly superseded officers
Hence the Committee was required to consider the vacancies in the posts of Asstt
Commissioners year wise from 1962 onwards and if the superseded officers were found fit for such promotion they were to be given seniority as Asstt
Commis sioners from the year in which they would have been promot ed
Thus while considering the promotions in the earlier years the Committee had to consider the record of the officers relevant to those years
The Committee could not have taken into consideration the record of future years for promotion in the earlier years
This is the import of the observations of this Court
340D F B 13 The Committee which met from 1977 to 1979 to adjust the promotions as directed by this Court considered in 1978 the cases of Respondents No 1 and 2 with reference to their claims which arose in September 1968 February 1969 and September 1969
They were not selected for the vacancies in September 1968 and February 1969 on the basis of compara tive merit
However they were selected for the vacancies in September 1969 and given deemed promotion with reference to that date and their seniority as Assistant Commissioners fixed as on that date
The Committee has strictly and cor rectly abided by the directions in both the cases
340G H 337 14 The comparative merits of the two respondents were considered on each of the three occasions and they were selected only on the third occasion
They have since been appointed as Chief Commissioners according to their seniori ty as determined by the department and approved by this Court
342C Bishan Sarup Gupta vs Union of India and Ors 1975 Supp
SCR 491 Union of India etc
vs Majji Jangamayya etc
  explained and Bishan Sarup Gupta etc
vs Union of India  Ors
Etc   re ferred to