Case: Deccan Merchants Co-operative Bank Limited Vs. M/s. Dalichand Jugraj Jain &amp; Others

2. We may mention that in the petition filed before the High Court by the Petitioners there were four respondents; the first respondent was the Assistant Registrar (D),Societies, Bombay, the second respondent was the Registrars nominee; the third respondent was the Bank and the fourth respondent was Waman Wasudeo Waghhereinafter referred to as the original owner. Before us the Bank is the appellant, while the petitioners and the three other respondents before the High Court are the First, second, third and fourth respondents.Before we set out the relevant provisions of the Act it is necessary to state the relevant facts out of which the dispute arose. The original owner on June 29, 1961, executed an agreement by which he leased the entireof building No.Shaikh Memon Street, Bombay, to the petitioners on a monthly rent of Rs.Clause 6 of this agreement mentions that the property had been mortgaged to the Bank. The appellant was established as a Banking company in the year 1917 as asociety under theSocieties Act, 1912 (Central Act) and they are deemed to be registered under the Act. The original owner was the Chairman of the Bank, and he had taken a loan from the Bank and as security for the due payment of the loan taken by him he had deposited the title deeds of the said property with the Bank, and thus mortgaged the building to the Bank.5. It appears that certain arbitration proceedings between the Bank and the original owner took place before the Registrars nominee, Bombay Greater and Bombay, and a consent award was given between the parties on October 26, 1961, under which the original owner was ordered to pay to the Bank a sum of Rs. 6.00,000/by certain instalments as therein provided. Clause 5 of the said consent award mentioned that the said immovable property atShaikh Memon Street, would continue as security for the claims of the Bank till entire satisfaction. It further appears that the original owner committed default in making payment of the amount under the consent award and thereupon, in execution of the said award, an order was made on January 3, 1963, under Sec. 98 of the Act, for the sale of the said property. As the property could not be sold for want of buyers, the Collector of Bombay made an order and issued a certificate of transfer, dated May 13, 1963, under Section 100 of the Act, directing that the right, title and interest of the owner in the said property would be transferred to the Bank subject to the terms and conditions laid down in the schedule to the said certificate of transfer. In accordance with the directions given to the Revenue Inspector, the Revenue Inspector of the Collector of Bombay prepared a list of the tenants of the property on May 15, 1963, and furnished the same to the Bank. Physical possession of the property was also handed over to the Bank.6. On June 5, 1963, the Bank addressed a letter to the petitioners stating that the Bank had come to know that they were occupying the entire ground floor of the building (situate atShaikh Memon Road, Bombay) transferred to the Bank under Section l00 of the Act, and further stating that their occupation was unauthorised and otherwise illegal and they had neither any right nor title nor interest to continue in occupation of the same. The Bank called upon them to quit, vacate and deliver vacant peaceful possession of the portion of the building in their occupation within 48 hours from the receipt of this notice failing which appropriate legal proceedings would be adopted.7. The petitioners replied on June 24, 1963, challenging the transfer of the property to the Bank and also denying that they were in unauthorisdd or illegal occupation. Before this the Bank, on June 11, 1963, had applied to the District Deputy Registrar,Societies, Bombay; under Sectionsof the Act, praying that the dispute between the Bank and the petitioners be referred to arbitration, in this application seven parties were made respondents including the original owner and the petitioners. We are not concerned with the other five respondents.8. It was stated in the application that the Bank, pursuant to the certificate issued by the Collector under Section l00 of the Act, had been put in possession of the building at No.Shaikh Memon Street, Bombay, but the original owner, however, retained possession of part of the property in his possession or in the possession of the petitioners and the other five respondents. It was asserted that the seven respondents had no right title or interest to the suit premises, and, at any rate, they are not tenants orof the suit premises either within the meaning of the Bombay Rents, Hotel and Lodging House Rates Control Act. 1947 hereinafter referred to as the Rent Act, or the Transfer of Property Act. It was further stated that the other six respondents were claiming through the original owner who was a member of the Bank It was further alleged that by virtue of the said certificate issued under Sec. l00 of the Act, the Bank was entitled to vacant and peaceful possession of the suit premises by evicting the seven respondents. It was also alleged that the dispute fell within the ambit of Sectionsof the Act and as such the same was capable of being referred for decision under Section 93 of the Act. It was inter alia prayed that the dispute be referred to the Registrar or to his nominee or to his Board of nominees under Sections 91 to 96 of the Act for decision and the respondents be ordered to vacate and deliver possession of the suit premises which was in their possession, Compensation, interest and costs were also claimed. On June 19, 1963, the Assistant Registrar passed the followinggoing through the plaint mentioned above, I, Shri G. V. Koimattur, Assistant Registrar C. S. (D).Bombay am satisfied that a "dispute" within the meaning of Section 91 (1) of the MaharashtraSocieties Act 1960 exists in this case and the same is therefore referred for decision to Shri K. C. Mandivkar, Registrars Nominee.On July 2, 1963, the nominee passed an order summoning the parties to appear before him on July 23, 1963. On September 6, 1963 the petitioners filed the petition under Article 226 of the Constitution. After setting out the facts mentioned above and Section 91 of the Act, it was submitted by them in the petitiondispute which is alleged in the said application dated 11th June 1963 is not one which falls within the scope and ambit of the said Section 91 of the said Act and/or between the parties thereinwas further submitted that the dispute was not one which touches the business of the Bank and that the petitioners were not the persons claiming through a member of the Bank . It was also submitted that in view of Section 28 of the Rent Act, the dispute which had been referred by the Assistant Registrar to his nominee could only be determined by the Court of Small Causes, Bombay, and that the Assistant Registrar had no jurisdiction to refer the said dispute to his nominee for determination the petitioners accordingly prayed for issue of a writ of certiorari or other appropriate writ against the Assistant Registrar or his nominee and quashing the order dated June 19, 1963. We need not mention the other reliefs claimed in the petition.10. The answer to the points raised in the petition depends in the main on the proper interpretation of Section 91 of theAct.The relevant provisions of the Act are as follows:Section 91(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, elections of the office bearers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is afflicted, or by a creditor of the society, to the Registrar, if both the parties thereto are one or other of the following:(a) a Society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative or any deceased officer, deceased agent or deceased servant of the society, or the liquidator of the society;(b) a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society; .(c) a person, other than a member of the society, who has been wanted a loan by the society, or with whom the society has or had transactions under the provisions of Section 45, and any person claiming through such a person;(d) a surety of a member, past member or a deceased member, or a person other than a member who has been granted a loan by the society under Section 45, whether such a surety is or is not a member of the society;(e) any other society, or the Liquidator of such a society.(2) When any question arises whether for the purposes of foregoinga matter referred to for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final.(3) Save as otherwise provided under(3) of Section 93, no court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to inA dispute between the Liquidator of a society and the members of the same society shall not be referred to the Registrar under the provisions ofFor the purposes of thisa dispute shalla claim for or against a Society for any debt or demand due to it from a member or due from it to a member, past member or the nominee, heir or legal representative of a deceased member or servant or employee, whether such a debt or demand be admitted or not;(ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a society and recovered from the surety owing to the default of the principal borrower, whether such a sum or demand be admitted or not;(iii) a claim by a society for any loss caused to it by a member, past member or deceased member, by my officer, past officer or deceased officer, by any agent, past agent or deceased agent, or by any servant past servant or deceased servant, or by its committee, past or present, whether such loss be admitted or not;(iv) a refusal or failute by a member, past member or a nominee, heir or legal representative of a deceased member, to deliver possession to a society of land or any other asset resumed by it for breach of conditions of the assignment.n (1) of Section 93 provides that if the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of Section 91, the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominees, appointed by the Registrar. Section 96 provides that when a dispute is referred to arbitration, the Registrar or his nominee or board of nominees may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute.12. This case was heard along with two other cases by the Bombay High Court and various questions were debated before it. The High Courtthat the Registrar or the Assistant Registrar is bound to hear the petitioners before making the orders referring the dispute to his nominee;(2) that the petitioners were not heard by the Assistant Registrar before the order of reference was made but it was not necessary to remand the matter to the Assistant Registrar for deciding the question about the existence of a dispute within the meaning of Section 91 after hearing the parties as the questions which arose in many cases and the parties desired that the position in law might be clarified;(3) that the jurisdiction of the Court would be determined at the time of the institution of the suit when the plaint is filed and the plea of the defendant would not determine or change the forum;(4) that the question whether a dispute within the meaning of Section 91 existed or not will have to be decided by reference to the averments made in the application for reference made underRule 75, of the Rules;(5) that the words "touching the business of the society" in Section 91 were very wide and would include any matter which relates to or concerns or affects the business of the society; in other words, the dispute need not directly arise out of the business of the society but it was enough if it had reference or relation to or concern with its business;(6) that the dispute in regard to the possession of the premises occupied by the petitioners can be said to touch the business of the Bank;(7) that the words "claiming through a member" must be given their ordinary meaning, that is, deriving title or rights through a member. At the same time weight must be attached to the word "member", and the title or rights claimed must be those to which a member was entitled or which he could claim by virtue of his being a member. The words "claiming through a member" therefore mean deriving such title or rights through a member as the member possessed or had acquired by reason of his being a member or in his capacity as a member; and(8) that the petitioners cannot be said to be claiming through a member of the Bank as a member; consequently cl. (b) will not apply and the dispute between them and the Bank cannot be theof a reference under(1) of Section 91.

Court's reasoning:
16. The answer depends on the words used in the Act. Although number of cases have been cited to us on similar expressions contained in various other Acts, both Indian and English, in the first instance, it is advisable to restrict the enquiry to the terms of the enactment itself, because the legislatures have been changing the words and expanding the scope of references to arbitrators or to the Registrars step byIn this case, the society is abank and ordinarily abank cannot be said to be engaged in business when it lets out properties owned byTherefore, it seems to us that the present dispute between a tenant and a member of the bank in a building which has subsaqently been acquired by the Bank cannot be said to be a dispute touching the business of the Bank, and the appeal should fail on this short ground.While we agree that the nature of business which a society does can be ascertained from the objects of the society, it is difficult to subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects can be said to be part of its business. We however, agree that the word "touching" is very wide and would include any matter which relates to or concerns the business of a society, but we are doubtful whether the word "affects" should also be used in defining the scope of the word "touching".22. One other limitation on the "dispute" may also be placed and that is that the word "dispute covers only those disputes which are capable of being resolved by the Registrar or his nominee. It seems to us very doubtful that the word "dispute" would include a dispute between a landlord society and a tenant when the landlord society has not been set up for the purpose of constructing or buying and letting out houses. In the presence of various rent Acts which give special privileges to tenants it would be difficult to say that such disputes were intended to be referred to the Registrar.Of course, this result may also follow from the interpretation of the Rent Act and theSocieties Act by applying other principles of construction.The appeal must also fail on the ground that even if it is a dispute touching the business of the society within the meaning of Section 91 (1) of the Act, it is not a dispute between a society and a member or a person claiming through a member.It seems to us that before a person can be said to claim through a member, the claim should arise through a transaction or dealing which the member entered into with the society as a member. If a member entered into a transaction with the society not as a member but as a stranger, then he must be covered, if at all, by the provisions of Section 91(1) (a) or (c). But once it is held that the original transaction was entered into by the member with the society as a member then any person who claims rights or title through that member must come within the provisions of Section 91 (1)reasoning of the Nagpur High Court does not appeal to us. Even if the expression "business of asociety" occurring in the Rule is treated as not restricted to the dealings with the members of the society only but to include business which thesocieties under the law are empowered to transact, this does not mean that whenever a member enters into any transaction whatsoever with the society and a dispute arises out of that transaction then that dispute is a dispute between the society and a member of the society within the meaning of Rule 26. The High Court did not rest its conclusion on the words "or any office" occurring in R. 26, although it referred to the meaning of the word "Officer. Therefore, we need not consider whether the decision can be sustained on that part of the Rule.29. In our opinion, the view expressed by the Madras, Bombay and Kerala High Courts is preferable to the view expressed by the Madhya Pradesh and the Nagpur High Courts.It seems to us that when the original owner executed the lease, he was not acting as a member but as a mortgagor in possession, and therefore, the Banks claim does not fall within Section 91 (1) (b) of theThe scheme of the various Rent Acts and the public policy underlying them are clear; the policy is to give protection to the tenants. Various powers have been conferred on the authorities under the Rent Acts to grant protection to the tenants against ejectment and other reliefs claimed by the landlords.section expressly bars the jurisdiction of other Courts to entertain any suit, proceeding or application between a land. lord and tenant relating to the recovery of possession of any premises and confers jurisdiction on the Courts mentioned in Section 28 to entertain the matter pending before the nominee of the Registrar.was urged before us that the Registrar is also a Court for the purposes of S. 28 of the Rent Act. We need not decide this question because it seems to us that the jurisdiction of the Registrar is ousted on broader considerations.If the matter is heard by the Registrar, none of these provisions would apply. We can hardly imagine that it was the intention of the legislattlre to deprive tenants in buildings owned bysocieties of the benefits given by the Rent Act.It seems to us that the Act was passed, in the main, to shorten litigation, lessen its costs and to provide a summary procedure for the determination of the disputes relating to the internal management of the societies. But under the Rent Act a different social objective is intended to be achieved and for achieving that social objective it is necessary that a dispute between the landlord and the tenant should be dealt with by the Courts set up under the Rent Act and in accordance with the special provisions of the Rent Act. This social objective does not impinge on the objective underlying the Act.. It seems to us that the two acts can be harmonised best by holding that in matters covered by the Rent Act, its provisions, rather than the provisions of the Act, should apply. In view of these considerations we are of the opinion that Section 91 of the Act does not affect the provisions of Section 28 of the Rent Act.In our opinion, the High Court has jurisdiction to go into the disputed questions of fact and to quash an interlocutory order even though some sort of alternative remedy exists under Sec. 154 of the Act. Section 154 of the Act inter alia enables the State Government to call for and examine the record of any inquiry or the proceedings of any other matter of any officer subordinate to them. This remedy can hardly be treated as an altemative remedy for the purposes of deciding the questions raised by the petitioners.38. It is not necessary to deal with the third point raised by the learned Counsel for the Bank, namely, that the Registrar when making an order under Section 91 (2) of the Act, is concerned only with the averments in the plaint. Even if it is so it does not disable the petitioners from raising the point that on the facts as presented by them the provisions of Sec. 91 of the Act did not apply to the dispute.