Case: UTTARA CO-OPERATIVE HOUSING SOCIETY LTD Vs. PRALAY KARMAKAR

1. Appellant is Uttara Co-operative Housing Society Ltd. It purchased about 61 cottahs 6 chittaks of land at 13, Broad Street, Kolkata, from one Manmotha Nath Banerjee and his brother by two registered sale deeds executed in the year 1974. 2. One Manicklal Karmakar, the predecessor-in-interest of the respondents-herein, was forcible occupier of a small portion of the said land purchased by the petitioner society. Manicklal claimed himself to be a thika tenant in respect of 11 cottahs of land situated on the north-western part of the 61 cottahs of land. Manicklal used to run a motor garage on the land occupied by him. 3. The society constructed 134 residential flats of various sizes and made allotment of the constructed flats to its members. However, 18 flats could not be constructed as Manicklal did not vacate the portion that was in his occupation. 4. In 1976, petitioner society entered into an agreement with Manicklal, whereby Manicklal agreed to surrender his tenancy to the petitioner society, and ultimately did surrender his thika tenancy rights in favour of the petitioner society. 5. One Suresh Chandra Bhowmick became the Chief Executive of the petitioner society. In the year 1979, he entered into an agreement with Manicklal to sell 13 cottahs 14 chittaks of land situated at 206A, Picnic Garden Road, Calcutta-39, belonging to the society. The society applied to Urban Land Ceiling Authority for permission to sell the aforesaid land to Manicklal. Permission was refused. Ultimately, C.R. No.15165 (W) of 1979 was preferred in the High Court at Calcutta, which was allowed on 31.5.1984, setting aside the order of refusal passed by the competent authority; permission to sale was granted. 6. On 28.1.1985, said Manicklal filed a Dispute Case under section 86(1) of the West Bengal Co-operative Societies Act, 1973 (in short referred to as `the Act) before the Deputy Registrar of Co-operative Societies, claiming that cause of action arose on 18.1.2005 i.e. when he had come to know that the society was trying to sell to third parties the land at 206A, Picnic Garden Road. 7. The petitioner society had contended that dispute was barred by limitation, as Section 86(1) of the said Act provided for 30 days time to raise the dispute from the date of accrual of cause of action. 8. Arbitrator passed award in favor of Manicklal on 24.4.1991. The Tribunal, in appeal, set aside the award of the Arbitrator, and remanded the case for further adjudication. Manicklal expired on 16.4.2000. 9. The High Court, on 19.12.2001, ordered appointment of a fresh Arbitrator, who passed award afresh on 18.7.2005 and directed the society to execute a deed in favour of the legal heirs of Manicklal, with further direction upon them to pay the balance consideration amount as per agreement dated 22.8.1979. 10. An appeal was filed by the Society before the Cooperative Tribunal. The same was allowed, and the award passed by the Arbitrator was set aside. The respondents preferred a writ petition in the High Court at Calcutta. Same had been allowed. Aggrieved thereby, the appeal has been preferred by the society. 11. It was submitted by learned counsel appearing on behalf of the appellant society that dispute was time barred as per the provisions contained in Section 86 of the Act. Secondly, he urged that it was not the business of the society to enter into an agreement to sell; as such the provisions of the Act were not applicable. Hence, no Arbitrator could have been appointed to adjudicate upon the matter; and lastly, that the High Court could not to have interfered with the decision of the Tribunal as there was no patent illegality in the same, and for that, he has relied upon the decision of this Court in Sadhana Lodh v. National Insurance Co. Ltd. & Anr. (2003) 3 SCC 524. 12. Learned counsel appearing on behalf of the respondent has attracted our attention to Section 86(2), and has contended that the dispute could not be said to be barred by limitation. The dispute was filed within limitation from the date of accrual of cause of action. Question of limitation had been rightly decided by the Arbitrator, which could not have been interfered with by the Tribunal. By virtue of provisions of Section 86(1) and Bye Law No.4 of the Societies Act was applicable as dispute was with respect to the affairs of the society. The High Court has rightly set aside the decision of the Tribunal. No case for interference in the appeal is made out. 13. Coming to the first submission as to the dispute being barred by limitation, it is apparent that permission under Urban Land Ceiling Act was required to be obtained. The competent authority refused to grant it. Thereafter, writ petition was filed by the society, and in May 1984 permission was granted to the society to sell the property to the since deceased Manicklal. Manicklal sent a letter to the society on 10.11.1984, informing outcome of the writ application, however, no reply was given. Though, the writ petition was allowed on 31.5.1984, it kept quiet. On 21.1.1985, Manicklal came to know that society was trying to sell the land to third parties; as such, notice was sent on 21.01.1985 through a lawyer and, thereafter, within a week, on 28.1.1985, suit under Section 86 of the Act was filed, in which Arbitrator had been appointed. In the aforesaid background of the case, in our opinion, the Arbitrator had rightly decided that dispute was within limitation. There was no illegality in the decision of the Arbitrator holding the same to be within limitation. 14. Coming to the second submission raised by learned counsel appearing for the appellant about the applicability of the Act, it is apparent from Section 86(1) that any dispute, relating to affairs of the co-operative society, with any person, shall be referred to the Registrar within one month from date of accrual of cause of action. Section 86(1)(d) is extracted hereunder : Disputes to be referred to Registrar.—(1) Any dispute relating to the affairs of a co-operative society or of the liquidator of a society shall be referred to the Registrar if the parties thereto are among the following, namely:- (a) ................. (b) .................. (c) ................. (d) any other co-operative society or any person including a financing bank having transaction with the concerned co-operative society or the liquidator of such property: Provided that nothing contained in this sub-section shall apply to any dispute - (a) ............ (b) ............ (2) Any dispute mentioned in sub-section (1) other than a dispute relating to the recovery of money shall be referred to the Registrar within one month from the date of the cause of action. 15. Appellant is a housing society, its object is contained Bye-law no.4 of the Bye-laws of the Co-operative Housing Society Ltd. Same is extracted hereunder: 4. The object of the society shall be primarily to establish on Co-operative basis, settlements or housing schemes for persons with moderate income, by affording each settled facilities for owning a house or flat and ultimately to develop, as far as practicable, the settlements so established into self-sufficient communities. In furtherance of the above object the society shall, in conformity with the Act, rules and the bye-laws have the power to raise funds; to procure lands on purchase, hire or lease; to develop, to sell, lease or let out such lands; to purchase or erect buildings; to pull down, repair, alter or otherwise deal with such buildings; to purchase, hold, sell, exchange, mortgage, rent, lease, sub-lease, surrender, accept surrenders of and otherwise deal with lands of its tenants and the buildings thereon and to foster growth of social, religious, recreative, educational, business and other institutions contributing to the material and moral welfare of its members and generally to do all such other things as are incidental or conducive to the attainment of the above object of the society. 16. A bare reading of Bye law No.4, which contains the object of the society, makes it clear that its business was to establish on co-operative basis, settlements or housing schemes, and that in furtherance of said object, it could procure lands on purchase, hire or sell, lease or otherwise transfer property. The agreement that was entered into was in furtherance of its object. Thus, the provisions of the Act were clearly applicable. The submission raised as to the lack of jurisdiction of the Arbitrator under the Act to decide the dispute is, hereby, rejected. 17. Learned counsel has also relied upon the decision of this court in Sadhana Lodh (supra) to contend that the High Court, in supervisory jurisdiction, could not have interfered with the decision of the Tribunal, unless there was parent error. In the instant case, the award passed by the Arbitrator was absolutely proper. It was illegally interfered with by the Cooperative Tribunal. As such, the High Court has acted within the ken of its jurisdiction, in the light of principles laid down in aforesaid decision, to set right patent illegality committed by Tribunal while setting aside the award passed by the Arbitrator.

Decision reasoning: 0[ds]13. Coming to the first submission as to the dispute being barred by limitation, it is apparent that permission under Urban Land Ceiling Act was required to be obtained. The competent authority refused to grant it. Thereafter, writ petition was filed by the society, and in May 1984 permission was granted to the society to sell the property to the since deceased Manicklal. Manicklal sent a letter to the society on 10.11.1984, informing outcome of the writ application, however, no reply was given. Though, the writ petition was allowed on 31.5.1984, it kept quiet. On 21.1.1985, Manicklal came to know that society was trying to sell the land to third parties; as such, notice was sent on 21.01.1985 through a lawyer and, thereafter, within a week, on 28.1.1985, suit under Section 86 of the Act was filed, in which Arbitrator had been appointed. In the aforesaid background of the case, in our opinion, the Arbitrator had rightly decided that dispute was within limitation. There was no illegality in the decision of the Arbitrator holding the same to be within limitation.14. Coming to the second submission raised by learned counsel appearing for the appellant about the applicability of the Act, it is apparent from Section 86(1) that any dispute, relating to affairs of the co-operative society, with any person, shall be referred to the Registrar within one month from date of accrual of cause of action.15. Appellant is a housing society, its object is contained Bye-law no.4 of the Bye-laws of the Co-operative Housing Society Ltd. Same is extracted hereunder:4. The object of the society shall be primarily to establish on Co-operative basis, settlements or housing schemes for persons with moderate income, by affording each settled facilities for owning a house or flat and ultimately to develop, as far as practicable, the settlements so established into self-sufficient communities.In furtherance of the above object the society shall, in conformity with the Act, rules and the bye-laws have the power to raise funds; to procure lands on purchase, hire or lease; to develop, to sell, lease or let out such lands; to purchase or erect buildings; to pull down, repair, alter or otherwise deal with such buildings; to purchase, hold, sell, exchange, mortgage, rent, lease, sub-lease, surrender, accept surrenders of and otherwise deal with lands of its tenants and the buildings thereon and to foster growth of social, religious, recreative, educational, business and other institutions contributing to the material and moral welfare of its members and generally to do all such other things as are incidental or conducive to the attainment of the above object of the society.16. A bare reading of Bye law No.4, which contains the object of the society, makes it clear that its business was to establish on co-operative basis, settlements or housing schemes, and that in furtherance of said object, it could procure lands on purchase, hire or sell, lease or otherwise transfer property. The agreement that was entered into was in furtherance of its object. Thus, the provisions of the Act were clearly applicable. The submission raised as to the lack of jurisdiction of the Arbitrator under the Act to decide the dispute is, hereby, rejected.In the instant case, the award passed by the Arbitrator was absolutely proper. It was illegally interfered with by the Cooperative Tribunal. As such, the High Court has acted within the ken of its jurisdiction, in the light of principles laid down in aforesaid decision, to set right patent illegality committed by Tribunal while setting aside the award passed by the Arbitrator.