Case: O. N. Bhatnagar Vs. Smt. Rukibai Narsindas &amp; Ors

summary procedure f or the determination of the disputes relating to the internal management of the societies, the Rent Act was intended to achieve a different social objective i.e. to prevent the eviction of tenants and enhancements of rent, and then went on to s ay that it was necessary that a dispute between the landlord and tenant should be dealt with by the Courts set up under the Rent Act and in accordance 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 underlying 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, should apply. But where the parties admittedly do not stand in the jural relationship of landlord and tenant, as here, the dispute would be governed b y s. 91(1) of the Act. No doubt, the appellant acquired a right to occupy the flat as a licensee, by virtue of his being a nominal member, but in the very nature of things, his rights were inchoate. In view of these considerations, we are of the opinion that the proceedings under s. 91(1) of the Act were not barred by the provisions of s. 28 of the Rent Act.A great deal of reliance has been placed by the appellants counsel on the decision in Sabharwal Brothers &Anr. v. Smt. Gun a Amrit Thandani of Bombay.(1). The importance of that case lies in the fact that it relates to the respondent No. 2 society, and the disputant there was the owner of a flat on the second floor of Bloack No. 8 "Shyam Niwas". She was a membe r of the society and had acquired the flat in question, which was let out to the appellant Sabharwal Brothers under an agreement of leave and licence, which was renewed from time to time and when she asked the appellant to vacate as she requi red the flat for her personal occupation, they did not comply with the demand as a result of which the owner of the flat filed a statement of claim before the Registrar under s. 91(1) of the Act which required adjudication. There was a challenge to the jurisdiction of the nominee of the Registrar to whom it was referred, and ultimately he made an award that the appellant Sabharwal Brothers had occupied the flat on leave and licence basis and was therefore liable to be evicted. In revision, the Bench of the Small Causes Court held that the Registrars nominee did have jurisdiction and the High Court upheld the order of the Bench. Allowing the appeal, this Court observed:"With all respect to the High Court, it seems to us that there was a fundamental error in the above approach. No doubt it was the business of the society to let out premises and 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 members right 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 inter alia the trade of buying, selling, hiring and letting land in accordance with cooperative principles. The letting of flat by respondent No. 1 was a transaction of the same nature as the society itself was em powered to enter into but and letting 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 business of the society once it had sold the flat to the respondent No. 1. The position might have been different if the latter had himself been a tenant of the flat under the society. "To touch" means "to come in contact with" and it doe s 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 landlord of the flat."It is we think, important to remember that this auth ority decided only one point albeit a point of great importance namely, that the society having sold the flat, like any other vendor of immovable property, the letting out of the flat by the flat-owner was no concern of the society. There was no thing 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 said. 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 the society."It logically follows, as a necessary corollary, that if the transaction between the society and the holder of the flat were governed by Regulations in Form-A, as here, that is to say, if the society had let out the flat to her, the decision of the Court would have been otherwise.12. The decision in Sabharwal Brothers case, supra, is distinguishable for two reasons. First, there was an outright sale of the flat by the society and not that it had been let out to her under Regulations 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 matter of its letting out the flat. The observation made by this Court that the fact that such letting was forbidden by a regulation of the society was immaterial did not fall for decision in that case and was a mere obiter.13.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]In our opinion, there is a felt need at the very outset to displace the appellants apprehensions that the effect of upholding the judgment of the High Court would be to throw all licensees of residential flats in multi-storeyed buildings belonging to cooperative housing societies without any protection. The apprehensions, if we may say so, appear to be wholly unfounded. The Legislature was fully aware of the acute paucity of housing accommodation in the metropolitan city of Greater Bombay and other urban areas in the State, and also the fact that lessors of ownership flats were adopting a device of inducting tenants under the garb of an agreement of leave and licence which left the licensee with noapart, the appellant 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 dismissed by the Court of Small Causes in July 1972. Aggrieved by that decision, the appellant preferred an appeal before the Appellate Bench of the Small Causes Court but that appeal also was dismissed. The question whether or not the appellant was a licensee of the fiat or a tenant thereof was directly and substantially in issue between the parties in that suit. The finding that he was not a tenant but had only the status of a licensee operates as res judicata between the parties. 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 permitted to reagitate the same question in these proceedings. Further, the licence of the appellant having been terminated by the respondent No. 1 by her notice dated March 31, 1965, the appellant was not in occupation of the flat on February 1, 1973 under a subsisting tenancy 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 hereinbefore adumbrated, the respondent No. 2- society is governed by the Regulations in Form-A. It is registered as a copartner ship type housing society. The bye- laws of the society provide, inter-alia, by Bye-law 2 that one of the objects of the society would be to carry on the trade of buying, selling, hiring, letting and developing land in accordance with cooperativeview of these considerations, we are of the opinion that the proceedings under s. 91(1) of the Act were not barred by the provisions of s. 28 of the Rent Act.A great deal of reliance has been placed by the appellants counsel on the decision in Sabharwal Brothers &Anr. v. Smt. Gun a Amrit Thandani of Bombay.(1). The importance of that case lies in the fact that it relates to the respondent No. 2 society, and the disputant there was the owner of a flat on the second floor of Bloack No. 8 "Shyam Niwas". She was a membe r of the society and had acquired the flat in question, which was let out to the appellant Sabharwal Brothers under an agreement of leave and licence, which was renewed from time to time and when she asked the appellant to vacate as she requi red the flat for her personal occupation, they did not comply with the demand as a result of which the owner of the flat filed a statement of claim before the Registrar under s. 91(1) of the Act which required adjudication. There was a challenge to the jurisdiction of the nominee of the Registrar to whom it was referred, and ultimately he made an award that the appellant Sabharwal Brothers had occupied the flat on leave and licence basis and was therefore liable to be evicted. In revision, the Bench of the Small Causes Court held that the Registrars nominee did have jurisdiction and the High Court upheld the order of the Bench.