LINGO SULPHJTfj CORPORATiON OF

INDIA LTD. & ORS.

U.P. STATE SUGAR CORPORATION LTD.,

UNIT, BIJNOR & ORS.

January 27, 1982

(S. MURTAZA FAZAL ALI AND R.B. MISRA, JJ.j

Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 (U.P. Act No. 24 of 1964), sections 8 and 9 read. with rule 22( 1) and 22(2) of the Uttar Pradesh Sheera Niyantran Niyamavali, 1974-Scope of-Classification made wilh regard io molasses co•ered under rule 22( I) and 22(2} is reasonable and does not offend Article 14 of tM Constitution-Esto_pptl by conduct-Here, thert is no question of contracting out of/aw.

Molasses, the basic raw.material for the manufacture of lingo-suJphite, basic refractories, steel plants, cement factories. carbon black plants and many other important industries and also used for distillation, bas become a valuable commodity on account of its multiuse.

The preservation, distribution and. prices of the molasses were, .therefore, controlled by the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 (U.P. Act 24 of 1964) and also the rules made thereunder called Vttar Pradesh Sheera Niyantran NiyamavaJi, 1974.

Section 8 of tho Act authorised the Controller to direct the occupier of any sugar factory to sell and supply in the prescribed manner sucb quantity of molasses to such persons as may be specified in the order and the occupier shall notwithstanding any contract comply with the order. Section 10 provided that the occupier of a sugar factory shall sell molasses in respect of which an order under section 8 has been made at a price not exceeding that prescribed in the schedule attached to section IO. '

United Commercial Syndicate, Allahabad is .the purchasing agent of M/s.

Lingo Sulphite Corporation and M/s. Audubon Trading and Export Corporation of Allahabad and Calcutta, entered into an agreement with the U.P. State Sugar Corporation Ltd. whereunder the latter agreed to sell 28,300 quintals of molasses of 1977-78 production at the statutory price of Rs .. 9 per quintal and dlities etc. provided the former agreed to pay the total amount of Rs. 3 lacs being the total cost of molasses as estimated at the said statutory price. It was further stipulated that in case the said _price was not valid in Jaw, The United.

Commercial Syndicate will have to pay the price at the rate of Rs. 25-10 per quintal inclusive of administrative charges and other taxes and duties etc. as agreed to by the Syndicate.

A sum of Rs. 2 lacs had been paid in pursuance of the agreement and the balance of Rs. 1 lac was to be paid at the earliest.

The Sugar Corporation however sought to calcutate the price of the molasses in question at the rate of Rs. 25-10 per quintal on the ground that the molasses agreed upon was not covered by an order under section 8.

Syndicate filed two petitions in the High Court of Allahabad for a writ of mandamus or any other

·.·-{"

i :

' / l

_ _. ,,.

...

i.INOO SULPHAtll OORPN. V. U.P.S.S. CoRPN. 61

appropriate writ or direction declaring that Corporation was not entitled; o charge the price for the molasses in excess of the price fixed by the Act, .namely, Rs. 9 per quintal.

The High Court by its order dated 21st October, 1979 dismissed the petitions in limine.

Hence the appeal by special leave _by the Syndicate and the writ petition by the principal M/s. Lingo Sulphite Corporation.

Dismissing the appeal and the writ petition, the Court,

HELD : I. Sections 3 to 8 and 10 of the Adhiniyam and Niyamavall 12, 13, 22, 23 and 24 make it clear that the occupier of a sugar factory can sell molasses to a person specified in the order of the Controller at the cont!olled price. The occupier of every sugar fa, ctory has to give an estimate of the mola~ to be produced in the sugar factory as also the estimateof requirement of molasses for distillation and industrial purposes.

If there is any surplus after meeting the requirements of the persons in whose favour there is an order of the Controller, the same will bo released in favour of tho occupier. [71 H, 72 A-BJ

2. Section 10 makes it clear that the occupier of a sugar factory is obliged to sell molasses at the price not exceeding that prescribed in the schedule only in respect-of which an order under'section 8 has been made. But sub-clause (2) of rule 22 authorises the Controller to release any stock of molasses in favour of an occupier of a sugar factory only when the same is not required for distilleries or for other purposes of industrial development. If a certain quantity of molasses has been released in favour of the occupier, because the same was not required for distilleries or for other purposes of industrial development, it M; open to the occupier to sell that quantity of molasses in free market to any person at a price

prevalent in the market. Section 10 of the Act requires an occupier of a suga.r factory to sell molasses at a price not exceeding that prescribed in the schedule only in respect of which an order under section 8 has beCn made. No limitation or fetter bas been put on the occupier of a sugar factory to sell molasses which was released in his favour. It was, therefore, open to the occupier to sell the molasses released in his favour at the free market price. [73 BEl

3. The classification made with regard to molasses covered under rule 22(1) or rule 22(2) is a reasonable classification.

[73 BJ

4. The Syndicate entered into an agreement with the Corporation and agreed to pay the price of the molasses at the rate of Rs. 25-10 per quintal.

Having entered into such an aggreement with its eyes wide open it cannot now turn turtle and contdnd that it was liable to pay only at the rate of Rs. 9 per quintal, the statutory price. [73 F-G]

S. It is true that the parties cannOt be allowed to contract themselves out of lw.

It is not the law that no molasses released in favour of the occupier of the sugar factory could be sold at a price higher than the controlled one.

The controll'1d price was applicable only to the molasses for which an order bad been passed by the Controller in favour of a specified person either for the purpose of distillation or for other industrial purposes. But so far as the molassh released in favour of the occupier/of a sugar factory is concerned, there is no requirement of the law that the occupier should sell it only at the controlled price.

[73 GH, 74 ABJ

68 SUl'RSMB couRt RbP<lkTS (1~8~] 3 s.c.l.

6. Tho terms of the agreement between the parties entitles the Corporation for administrative charges. [74 B-C]

ORIGINAL JURISDICTION : Writ Petition No. 391 of 1981.

(Under Article 32 of the Constitution of India)

WITH

Civil Appeal No. 651 of 1980

(Appeal by special leave from the judgment and order dated the 31st October, 1979 of the Allahabad High Court in Civil Misc.

Writ No. 8091 of 1979)

R. K. Garg, Pramod Swarup and D. R. Gupta for the Petitioner in Writ Petition.

0. P. Rana and P.K. Pillai for Respondent Nos. 1 & 2 in WP.

G. N. Dikshil and Miss A. Subhashini for Respondent No. 5 in W.P.

Mubarak Mazdoor Appellant in person in C.A.

G. N. Dikshil, B. P. Maheshwari and Miss Asha Jain for the Respondent in Civil Appeal.

The Judgment of the Court was delivered by

MISRA, J. Writ petition No. 391 of 1980 under Article 32 of the Constitution and Civil Appeal No. 651 of 1980 by special leave raise common question of law and, therefore, we propose to dispose them of by a common judgment.

The circumstances leading to the writ petition and the appeal lie in a narrow compass. The appellant, United Commercial Syndicate, is the purchasing agent of M/s. Lingo Sulphite Corporation, the petitioner in writ petition No. 391 of 1980 and M/s. Audubon Trading and Export Corporation of Allahabad and Calcutta, who are the manufacturers of lingo-sulphite in India.

Molasses is the basic raw material for the manufacture of lingo-sulphite which is an essential raw material for all basic refractories, steel plants, cement factories, carbon-black plants and many

LINOO SULPHATE CORPN. v. U.P.s. s. CORPN. (Misra, 1.) 69

other important industries. Molasses is also used for distillation.

Over the years molasses has become a -valuable commodity on account of its multi-use. The preservation, distribution and prices of the molasses were, therefore, controlled by a legislation, the Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 (U.P. Act No. 24 of 1964), hereinafter referred to as the Act.

United Commercial Syndicate used to purchase molasses for their principals from the open niarket. Later on it decided to make direct purchase from the U.P. State Sugar Corporation Ltd., Unit Bijnor (A State Government Undertaking). It entered into an agreement with respondent No. 1, the U.P. State Sugar Corporation Ltd., whereunder respondent No. 1 agreed to sell 28,300 quintals of molasses of 1977-78 prodnction at the statutory price of Rs. 9/- per quintal and duties etc. provided the appellant agreed to pay the total amount of Rs. 3 lakhs, being the total cost of molasses as " estimated at the above statutory price. It was further stipulated that in case the above price was not valid in law, the appellant will have to pay the price at the rate of Rs. 25.10 per quintal inclusive of administrative charges and other taxes and duties etc., as agreed to by the appellant. There were other terms of the agreement but it is not necessary for the purposes of disposal of these cases to refer to them. A sum of Rs. 2 lakks ha<! been paid in pursuance of the agreement and the balance of Rs. 1 lakh was to be paid at the earliest. The respondent No. 1, however, sought to calculate the price of the molasses in question at the rate of Rs. 25.1 O per quintal. The appellant felt aggrieved and it took the stand that the respondent No. 1 could not charge more than the statutory price in spite of the fact that the appellant had offered the price of Rs. 25.10 per quintal to respondent No. I. The appellant filed two petitions in the High Court for a writ of mandamus or any other appropriate writ or direction declaring . that respondent No. I was not entitled to charge the price for the molasses in excess of the price fixed by the Act. The High Court by its order dated 31st of October, 1979 dismissed the petitions in limine. The appellant has come up in appeal by special leave to challenge the order of the High Court. M/s. Lingo Sulphite Corporation of India Ltd. has also tiled a petition under Article 32 of the Constitution for the same relief on the same grounds as in the aforesaid appeal.

In order to appreciate the points involved in the case it would be appropriate to refer to th~ material provisions of the Act and the rules framed thereunder,

, J!l

SUPREME COURT REPORTS [1982] 3 s.c.ll.

Section 3 of the Act authorises the State Government to constitute an Advisory Committee to advise on matters relating to the control of storage, preservation, gradation, price, supply and disposal of molasses. Seclion 4 provides for the appointment of a person as Controller of Molasses for the purpose of exercising the powers and performing the duties of the Controller of Molasses.

Section 5 enjoins every occupier of a sugar factory to take precautions for preservation of molasses. Section 6 prohibits the occupier of a sugar factory to adulterate or allow to be adulterated any molasses produced or held in stock by him.}Section 7A(I) enjoins any person, who requires molasses for his distillery or for any purpose of industrial development to apply in the prescribed manner to the Controller specifying the purpose for which it is required. Sub-section (2) of section 7 A authorises the Controller to make enquires in the matter as he may think fit and to pass an order under section 8 with due regard to the factors enumerated in sub-section (3) of section 7A.

Section 8(1) authorises the Controller to direct the occupier of any sugar factory to sell and supply in the prescribed manner such quantity of molasses to such persons as may be specified in the order and the occupier shall, notwithstanding any contract, comply with the order. Sub-section (2) (a) of section 8 enjoins that the occupier shall supply, molasses only to a person who requires it for his dlstillery or for any purpose of industrial development and subclause (aa) of sub-section (2) directs the person specified in the order of the Controller to utilise the molasses supplied to him in pursuance of an order of the Controller for the purpose specified in the application made by him under sub-section (I) of section ?A and to observe all the restrictions and conditions as may be pres- -cribed. Section 10 provides that the occupier of a sugat factory shall sell molasses in respect of which an order under section 8 has been made at a price not exceeding that prescribed in the schedule attached to section 10.

Rule 12 of the U.P. Sheera Niyantran Niyamavali, 1974 enjoins the occupier of every sugar factory to submit to the Con- G !roller by August 31 each molasses year a statement in form M.F. 9 specifying an approximate estimate of the quantity of molasses to be produced in a sugar factory during the molasses year following, along with such other information as is required under that form.

Rule 13(1) provides that every distillery in U.P. shall by August 31 H each year submit to the Controller a statement in form M.F. 8 specifying.its estimated requirement of molasses for the purposes

pf distillation during the molasses year following along with such

---....

LINGO SULPHATE CORPN. v. U.P.s.s. CORPN. (Misra, J.) 71

other information as may be required under that form. Likewise, rule 13(2) requires the Director of Industries to furnish the Controller by August 31 each year the estimated requirement of molasses for industrial purposes within the State relating to the molasses year following :

Rule 23 provides :

"(!) All stock of molasses produced in a sugar fac- , tory shall be deemed to have been reserved for supply to distilleries or other persons requiring it for purposes of industrial development. and no stock of molasses produced in a sugar factory shall be sold or otherwise disposed of by the occupier of any sugar factory except in accordance with an order in writing from the Controller.

 (2) The Controller shall release any stock of molasses in favour of occupier of a sugar factory only when the

same is not required for distilleries or for other purposes D

~-.

of industrial development."

Rule 23(1} provides :

"(I) The State Government may levy administrative charges exclusive of the price payable to a sugar factory on the molasses released for sale by the Controller towards meeting the cost of establishment for supervision of control over molasses at such rate or rates as may be notified from time to time."

Rule 24(1) provides :

"(t) Save in pursuance of an order of the Controller, no person shall purchase any molasses . from any sugar factory, or transport or possess any molasses purchased from such sugar factory, unless the said molasses has been released by order of the Controller as not required for distilleries or other purposes of industrial development and a declaration to that effect in form M.F. 13 has been obtained from the occupier of the sugar factory concerned."

A perusal of the relevant provisions of the Act and rules aforesaid makes it clear that the occul'ier of a su, ar fa<; torr caq

sell molasses to a person specified in the order of the Controller at the controlled price. The occupier of every sugar factory has to give an estimate of the molasses to be produced in the sugar factory as also the estimate of requirement of molasses for distillation and industrial purposes. If there is any surplus after meeting the requirements of the persons in whose favour there is an order of the Controller, the same will be released in favour of the occupier.

The question for consideration in the instant case is whether the molasses released in favour of the occupier by the Controller is also to be sold at the controlled rate or it can be sold at the market price as a free commodity.

Sbri Garg, senior counsel contends that from the schome of the Act and the rules it is evident that the entire production of molasses is to be controlled by the Controller appointed under the Act, at every stage. He is to take into account the estimated supply and the estimated demand of the commodity. Thereafter, he is to allot the commodity to a particular person for a particular purpose at the controlled statutory price fixed by the schedule to the Act.

The Act and the rules further provide . that nobody will store, sell, transport or use the said commodity without the order of the Controller and the price and distribution of molasses both are controlled by the Act and the contravention of the provisions of the Ac:t have been madepenal and the High Court has gone wrong in assuming that certain quantity of molasses which are covered by rule 22(2) are irnmune from the restrictions and fetters o( the Act and the said rules, which is erroneous and indefensible in law inasmuch as such a construction as has been put by the High Court will defeat the very purpose and object of the said Act and the rules.

As a second limb to this argument it was contended that the classification made between molasses covered by rule 22(1) on the one hand and rule 22(2) on the other is wholly irrational and the very purpose of the Act is defeated.

According to the learned counsel, it makes no difference whether the molasses are covered by rule 22(1) or 22(2) inasmuch as the object of the present legislation is to ensure that the sale and the distribution of molasses is controlled in an equitable manner and, therefore, to hold that section 8 is applicable to rule 22(1) and not to rule 22(2) is arbitrary and violative of Article 14.

Shri Rana appearing for respondent No. I on the otber ha.nd bas contended that on a correct interpretation of the relevant proj

LINGO SULPHATE CORl'N. v. U.P.s.s. CORPN, (Misra, J.) 73

visions of the Act and the rules the interpretation put by the High Court is fully warranted.

Section 10 of the Act which has been referred to above enjoins the occupier of a sugar factory to sell molasses in respect of which an order under section 8 has been made at a price not exceeding that prescribed in the schedule.

A plain reading of the section makes it clear that the occupier of a sugar factory is obliged to s.ell molasses at the price not exceeding that prescribed in the schedule only in respect of which an order under section 8 has been made.

But sub-clause (2) of rule 22 authorises the Controller to release any stock of molasses in favour of an occupier of a sugar factory only when the same is not required for distilleries or for other purposes of industrial development. If a certain quantity of molasses has been released in favour of the occupier, because the same was not required for distilleries or for other purposes of industrial oevelopment, it is op'en to the occupier to sell that quantity of molasses in free market to any person at a price prevalent in the market. Section 10 of the Act requires an occupier of a sugar factory to sell molasses at a price not exceeding that prescribed in the schedule only in respect of which an order under section 8 has been made.

No limitation or fetter has been put on the occupier of a sugar factory to sell molasses which was released in his favour.

It was, therefore, open to him to sell the molasses released in his favour at the free market price.

The contention that the classification made with regard to molasses covered under rule 22(1) or rule 22(2) is an unreasonable classification cannot be accepted. There have been other enactments in which similar provision bas been made, for example, the levy sugar was to be sold only at the controlled rate but free sugar was to be sold by the factories at a free market price and that bas been always accepted as a valid classification. The appellant entered into an agreement with respondent No. I and agreed to pay the price of the molasses at the rate of Rs. 25.10 per quiotal. Having entered into such an agreement with its eyes wide open it cannot now turn turtle and contend that it was liable to pay only at the rate of Rs. 9/- per quintal, the statutory price. It is true that the parties cannot be allowed to contract themselves out of law. If the law was that no molasses released in favour of the occupier of the sugar factory could be sold at a price higher than the controlled one, than the contention of the appellant would be correct. On an analysis of the relevant provisions of t!!e Act we are quite clear tba, t

the controlled price was applicable only to the molasses for which an order had been passed by the Controlfor in favour of a specified person either for the purpose of distillation or for other industrial purposes. But so far as the molasses released in favour of-the occupier of a sugar factory is concerned, there is no requirement of the law that the occupier should sell it only at the controlled B price.

It was further contended that the respondent was not entitled to administrative charges. This contention loses sight of the terms of the agreement between the parties which includes administrative charges also.

For the foregoing discussion we find no force either in the appeal or in the writ petition under Article 32. They are accor dingly dismissed. There shall, however, be no order as tq costs.

S.R.

Appeal and Petition dismissed.

, __ _

LINGO SULPHITE CORPORATION OF INDIA LTD. & ORS

January 27, 1982

S. MURTAZA FAZAL ALI

R.B. MISRA, JJ

sections 8 and 9

Article 14

Section 8

Section 10

section 8

United Commercial Syndicate, Allahabad

Lingo Sulphite Corporation

Calcutta

U.P. State Sugar Corporation Ltd.

section 8

High Court of Allahabad

Syndicate filed two petitions in the High Court of Allahabad for a writ of mandamus or any other

·.·-{"

i :

' / l

 . ,,.

Sections 3 to 8 and 10

Section 10

section 8

Section 10

section 8

Article 32

Constitution of India

R. K. Garg

Pramod Swarup

D. R. Gupta

P. Rana

P.K. Pillai

G. N. Dikshil

A. Subhashini

Mubarak Mazdoor

C.A.

G. N. Dikshil

B. P. Maheshwari

Asha Jain

MISRA

Article 32

United Commercial Syndicate

India

U.P. State Sugar Corporation Ltd.

31st of October, 1979

Article 32

Section 3

Section 5

Section 6

Section 7A(I)

section 7

section 8

section 7A

Section 8(1)

section 8

Section 10

section 8

section 10

Garg

section 8

Article 14

Rana

Misra

Section 10

section 8

section 8

Section 10

section 8

Article 32


.BALDBV SAHA! BANOIA

R.C. BHASIN

April 16, 1982

[S. MURTAZA FAZAL ALI AND A. VARADARAJAN, JJ.]

Delhi Rent Control Act, 1958-S. J4(J)(d)-Appllcotion for ejectment of tenant-Tenant ceasing to resid1 In premises. for ver six months-Whan maintainable.'

Words and phrase;,-'Members of faml/y'-Who are-S. T4(JJ(d) .of Delhi Rent Control Act, 1958.

A landlord is entitled to recover possession of the premises Jet for residential purpose under s. 14(l)(d) of the Delhi Rent Control Act, 1958, if he can show that neither the tenant nor any member of his family has been residing therein for a period of six months immediately before the date of the filing of the application.

The appellant took the house in question on Jease in May, 1961 and E lived there with his parents, sisters and a brother. He went to Canada in 1971~ leaving behind in. the house, his mother nd brother, who continued to pay the rent.

The landlord filed an application for ejectment of tenant under s. 14(1)(d) of the Delhi Rent Control Act in September. 1972 contending that with the migration of the tenant to Canada, his mother 11nd brother i:ould not be treated as members of the ap'pellant's family. Tbe application was dismissed by the Rent ControJler who found that t.be mother, brother and sister of the appellant were undoubtedly residing in the disputed premises along with the appellant and continued to reside there even on the date when the action for ejectmentwas brought.

The landlord's appeal against the order of the Rent ControJJer was a11owcd by the Rent Control Tribunal which ordered eviction of the family members of the appellant from the tenanted house.

The appeal of the family members against the order of eviction was dismissed by the High Court on the ground that after the exit of the main tenant to Canada, neither the mother nor the brother or the sister could be legally termed as a member of the family of the appellant.

AJ1owin$ the appeal,

' -

B.S. BANGIA V. R.C. BHASIN 611

HELD : I. (a) The Act affords intrinsic evidence to show that the nonapplicants were undoubtedly members of the family residing in the house and the misration of the main tenant' to Canada would make no difference. [674 HJ

(b) The term 'family' [has to be given not a restricted but a wider

maning. There are abundant authorities to show that the term 'family' should always ho liberally and broadly lccnstrued so as to include near relations of tho

head of the family. A beneficial provision must be meaningfully construed so B as to advance the object of tho Act. [676 F; 678 El

Price v. Gould and Ors., [1930].Vol. 143 Law Times 333; G. V. Shukla v.

Shri Prabhu Ram Sukhram Dass Ojha, [1963]' P.I.R. (Vol. LXV) 256; Govlnd . Dass and Ors. v. Ku/dip Singh, A.J.R.1971Delhi151 and Hira Lai and Ors. v.

Banarsi Dass, [1979] I R.L.R. 466 referred to.

(c) The Act has manifested its intention by virtue of a later amendment.

Tho definition of 'tenant' inserted in s~ 2(1) of the Act by the Amending Act 18 of 1976 expressly included 'parents' in sub-clause (iii) thereof and also indicated that .apart from the heirs 'of the tenant s., Ccificd therein, even those persons who had been ordinarily 1ivina: in the premises with the tenant would be treated as members of the family. [675 B; 677 H; 678 A]

2. (a) The legislature has advisedly provided that any member of the rami1y residing therein for a period of six months immediately before the date of the filing of the action would be treated as a tenant.

The stress is not so much on the actual presence o( the tenant as on the fact that the members of the family actually live and reside in the tenanted premises. Clause (d) of s. 14(1) of the Act is a special concession given to the landlord to obtain possession C\nly where the tenanted premises have been compltely vacated by the tenant. ·

[676 G-H; 677 A]

(b) The landlord bad failed to prove the essential ingredients of clause (d) of s. 14(1) of the Act so as to entitle him to evict the members of the family of the main tenant. It could not be said that when the appellant migrated to Canada, he bad severed all his connections with his mother so that she became an absolute stranger to the family. Such an interpretation is against our

national heritage and could never have been contemplated by the Act.

(680 B; 675 B]

.i.._:.

-~ CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1533 of 1980.

From the Judgment and Order dated the 20th February, 1980 of the High Court of Delhi at New Delhi in S.A.O. 149 of 1979.

SJ(. Meh, ta for the Appellant.

Yogeshwar Prasad, Ravinder Bana and Mrs. Rani Chhabra for

the Respondent.

The Judgment of the Court was delivered by

SUPREME COURT REPORTS .

FAZAL ALI, J. This appeal by special leave is directed against a judgment dated February 20, 1980 of the Delhi' High Court decreeing the landlord's suit for ejectment of the tenant.

The facts giving rise to the present litigation are summarised in the judgments of the Rent Controller and the High Court and need not be .repeated.

Shorn of details, the positi9n seems to be that Baldev Singh took the premises on rent on May 12, 1961 at a monthly rental of Rs. 95/-. At the time when the tenancy started, the tenant was living in the tenanted house with his father, mother, two sisters and a brother. The tenant himself was at that time a bachelor but seems to have married subsequently.

One of his sisters was married in this very house.

As it happened, in 1971 the tenant went to Canada followed by his wife and children. It is alleged that after having gone to Canada, the husband alongwith his wife took up some employment there. Admittedly, the tenant did not return to India after 1971.

While leaving for Canada the tenant had left his mother and brother in the house who were regularly paying rent to the landlord.

There is some controversy as to whether or not the mother and. brother, who were left behind, were being supported by the tenant or were living on their own earnings or by the income of the property left by the tenant in India. Such a controversy however, is of no consequence in deciding the question of law which arises for consideration in this case.

On September 27, 1972 the landlord filed an application for

ejectment of the tenant on the ground of bona fide requirement and - non-residence of the tenant under clauses (d) and (e) of sub-section ~~ (!)of section 14 of the Delhi Rent Control Act, 1958 (hereinafter .._~ referred to as the 'Act'). The fundamental plea taken by the landlord was that with the exit of the tenant from the house it became vacant and his mother and brother who were left behind could not be treated as members of the family.

Hence, in the eye oflaw the tenanted premises must be deemed to have fallen vacant.

The suii was resisted by the mother, brother and sister of the tenant who averred that even if th"e tenant alongwith his wife and children had shifted to Canada, the non-applicants were continuing to live in the tem1nted premises an4 as they had been paying reQt

- B.S. BANGIA v. R.C. BHASIN (Fazal Ali, J.) 673

to the landlord regularly, who hd been accepting the question or the tenancy becoming vacant arose.

same, no •

• ThUi, .the entire case hinges.on the . interpretation of the word

! .. , II 'family' as also clausesJd) and (e) of s. 14(1) of the Act. So far as

- .!1if clause (e) js concrned, .both the courts below found as a fact that the landlord was not able to prove his bona fide necessity. Therefore, as far as ground (e) is concerned, the same no longer survives in view of.the findings of fact recorded by the courts below. The only questionthatremains to be considered is whether the landlord - ,,.,.,,-- can bring.his case for evictfon within the ambit of clause'(d) of _..---- s. 14(1) which may J>e extracted thus:

! -·(

~.·

;;;;!

. '

I '+

"14 (I) Notwithstanding anything to the contrary contained in any other law. or contract, no order or decree for the. recovery of possession of any premises 'shall be made by any court or Controller in favour of the. landlord against a tenant: ·

Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery iJf possessi.on of the premises on one or more of the following grounds only, namely :

xx xx xx

, (d) that the premises were. let .for use as a residence and neither thll' tenant nor any member or bis family bas been residing therein for a period of six months imqiediately before the date of the filing of the application for the recovery of possession thereof; ·

A close analysis of this provision would reveal that before the landlord can succeed, be must prove three essential ingredients- •

(l) that the premises were let out for use as a residence,

{2) that the tenant after having taken the premises has

teased to reside, and

(3) that apllrt from the tenant no member of his family also bas been residing for a period of six months immediately berOre the d3te Qf the filing of the

application for ejectment.

674 SUPREME COURT REPOllTB

(!982) 3 S.C.R.

It is manifest that unless the aforesaid conditions are satisfied the landlord cannot succeed in getting a decree for ejeetment. 19, the instant case, while it is the admitted case of the parties that the tenant had shifted to Canada alongwith bis wife and children, yet he had left Ws mother, brother and ister in the house, hence the

second essential condition of clause (d) continues to apply with full force.

The learned counsel for the appellant, however, submitted that the mother, brother and sister were undoubtedly living with the tenant And so long as they continued to reside in the tenanted premises, there could be no question of the premises falling vacant.

To this, the counsel for the landlord coun iered that neither the mother, nor the brother nor the sister could in law be treated as . . members of the family of the tenant after be had himself shifted to a country outside India. Even though while be was I iving in Delhi, he was in Government service.

Thus, it was argued that in the eye of law, the )o-calledjfamily members would lose their status as members of the family of the tenant and would be pure trespassers or licensees or 'squatters . '

While the suit of the landlord .was dismissed by th-e Rent Controller, the Rent Control Tribunal allowed the appeal and directed eviction of the family members of the tenant under clause

(d) of s. 14(1) of the Act. The family members of the tenant then went up in appeal to the High Court which also affirmed the findings of the Tribunal and upheld the order of eviction passed by it.

The High Court was also of the view that after the exit of the main . tenant from India to Canada, neither the mother, nor the brother, nor the sister could be legally termed as a membe.r of the family of

the tenant.

- ,,,,->

• W.e have heard counsel for the parties and given our anxious consideration to all aspects of the matter and we feel that the High Court has taken a palpably wrong view of the law il)regard to the interpretation of the term 'member of Cthe family' as used in clause

(d) of s. 14(1) lof the Act.· In coming to its deci.sion, the High Court seems to have completely overlooked the dominant purpose and the main object of the Act which affords several intrinsic and -

extrinsic evidence to show that tlie non-applicants were undoubtedly members of the family residing in the house and the migration of the main tenant to.Canada, would make no· difference. The word 'family' has been defined in various lesaI 9iction.aries and several .

. ...

;,..

L •

B.S. BANGIA v. R.C. BHASIN (Fazal Ali, J.)

61S

authorities-of various courts and no court has ever held that mother or a brother or a sister who is living with the older member of the family would not constitute a family of the said member. Surely, it cannot be said by any stretch of imagination. that when the tenant was living with his own mother in the house and after he migrated to Cafladit, he had severed all his connections with his -mother so that she became an absolute stranger to the family.

Such an interpretation is aainst . our national heritage and, as we shall show, could never have been contemplated by the Act which has manifested its intention by virtue of a later amendment.

Coming now to [the definitions, we find that in Word~ and Phrases (permanent Edition-volume 16) at pp. 303-311 the word 'family' b.as been defined thus :

"The father, the mother, and the children ordinarily constitute a "family".

• A

"The word "family" embraces more than a huband

D and wife and includes _children."

"A "family" constitutes all who live in one house under one head."

"Father and mother of two illegitimate children; and children themselves, all living together under one roof, constituted a "family."

(pp. 303-304)

"The word "family" . fa . statute authorizing use of incQme for support of ward and "family" is not restricted to those individuals to .whom ward owes a legalduty of support, but is an expression of great flexibility and is liberally construed, and includes brothers and sisters in ·

poor financial circumstances for whom the insane ward, if

comptent, would make provision."

(p. 311)

"The general or ordinarily accepted meaning of the word "family", as used in Compensation Act, means a group, comprising immediate kindred, consisting of the parents llllQ !bir children,· whethr qtually living together or not:'

(p. 343) ·(Emphasis ours)

SUPRBMB COURT RBPORTS

(1982) 3 s.c.R.

Similarly, in Webster's Third New International Dictfonary, the word 'family' is defined thus :

"Family-household including not only the servants but also the head of the hous, ehold and. all persom in it related to him by blood or marriage ...... a group of persons of common ancestry.'' (p. 821) (Emphasis supplied)

In Chambers Twentieth Century Dictionary (New. Edition 1972), the word 'Family' has been de'fined thus.;

"family-the household, or all those who . live i.n one house (as parents, children, servants) : parents and their + children)"··

.In Concise Oxford Dictionary (Sixth Edition), the same D definition appears to have been given of the word 'family" which may be extracted thus :

"family-Members of a household, parents, children, servants, etc. set of parents and children, or of relations, living together or not; persons children. All descendants E of common ancestor."

A conspectus of the connotation of the term 'family' which emerges from a reference to the aforesaid dictionaries clearly shows that the word 'family' has to lie given not a restricted but a wider . meaning so as to include not only the head of the family but all .•

embers or descendants from the common ancestors who are - actuallyliving with the same head. More particularly, in our country, blood relations do not evaporate merely because a member of the famiiy-the father, the brother or the son-leaves his household and goes out for some time. Furthermore, in our opinion, the legislal!lre has advisdly used the term that any mem_ber of the family residing therein for a period. of six months immediately before the date of the filing of the action would be treated as a

tenant. The stress is not so much on the 11ctual presence of the tenant as on the fact that the members" of the family actually live' and reside in the tenanted premises. In fact, it seems to us that clause (d) of s. 14(1) of the Act is a special concession given to the landlord to obtain possession only where the tenanted premises have

ii.§. liANGlA v. il.c. BHASJN (Paza/ Aii, J.) 67;

 been completely vacated by th( tenant if he/ceased to exercise any control over the property either through himself or through his blood relations.

In fact, a controversy arose as to what would happen to the members .of thtl' family of the tenant if while residing in the premises

1 be dies and in order to resolve this anomaly the legislature fl!!me-

' diately stepped in to amend certain provisions of. the Act and J defined the actual connotation of the term 'members of the family' .

. By virtue of Act I 8 of 1916 t])e definition of "Tenant" was inserted so as to include various categories of persons. S.ub-clause (iii) of clause (i) of section 2 of the Act actually mentions the persons who could be regarded as tenant even if main tenant dies. This subclause may be extracted thus :

"(I) "tenant" means any person . by wom or on whose accQunt or behalf the rent of any premises is, or •. but for a speciliI contract, wcluld be, payable and includes- . .

(i) a sub-tenant;

(ii) any person continuing in possession after the terminatibn of his tenancy; and·

(iii) in the event of the death of the person. continuing in . possession after the termination of his tenancy, subject to the order of succession and conditions specified, respectiyely, in Explanation I and Explanation II to. this clause such of the aforesaid person's-.

(a) spouse, r ··~.

(b) son or daughter or, where there are' both son and ·

daughter, both of them,

(c) parents,

(d) daughter-in-law, being the widow of his pre-

deceased son, G

as had been ordinarily living in the premises with such person as a member or members of his family up to the date of .his death, but does noHnclude, ......... "

. It would appear that parents were expressly included in sub~ clause (iii). It bas also been provided that apart from the heirs

. /

SbPilEMli C<ibit RB!'OllTS (198~11 s.c.k.

specified in clauses (a) to (d) (extracted above), ~Ven those persons who had been ordinarily Jiving in the premises with the tenant would be treated as members of the family. The statemen~. of objtcts arid reasons for this amendment may J>e extracted thus :

"There has been a persistent demand for amendments to the Delhi Rent Control Act, 1958 with a view to COD ferring a right of tenancy on certain heirs/successors of a deceased statutory tenant so that they may be protected from eviction by lan-dlords and also for simplifying the procedure for eviction of tenants. in case the landlord re quires the premises bona fide for his personal occupation.

Further, Government decided.on the 9th September, 1975 that a person who own$ his own house in his place of work should vacate the Government accommodation allotted to him before the 31st December, 1975. Government .con sidered that in the circumstances, the Act required to be amended urgently." . ,

If this was the intention of the legislature then clause (d) of section 14( 1) of the Act could not be interpreted in a manner so as to defeat the very object of the Act. It is well setth:d that a bene ficial provision must 'be meaningfully construed so as to advance the object of the Act, and curing any lacuna or defect appearing in the same. There are abundant authorities to show that the term "Family" must always be liberally and broadly construed so as to include near relations of the head of the family.

In Hira Lal & Ors. v. Banarsi Dass(') even the learned Judge who decided that case had observed at page 472 that the term "members of the family" on the facts and circumstances of the case should not be given a narrow construction.

lnGobind Dass & Ors. vs. Ku/dip Singh(') a Division Bench of Delhi High Court consisting of H.R. Khanna,, C.J .. (as be then was) and Prakash Narain, J. while recognising , the necessity of giving a wide interpretation to the word "family" observed as follows :

"I hold that in the section now under consideration the word .. family" includes bf others and sister~ of the deceased

(I) 1979 (I) R.L.R. 46~. <1) AIR 1971 Delhi IS\.

11.S. llANGIA v. it:c. ill!AslN (Fozai Ali, J.) 619

living with her at the time of her death.

I think that that meaning is required by the ordinary acceptation of the word in this connection and that the legislature has used the wod "family" to introduce a flexible and wide term."

In Mr8. G. V. Shukla v. Shri Prabhu Ram Sukhram Dass -

• Ojha(1) Mahajan, J. (as he then was) observed as follows: B

"Therefore, it must be held that" the word 'family' is . . -,.

capable of wider interpretation, but that interpretation must have relation to the existing facts and circumstances proved on the record in each case." c

liven as far back as 1930, Wright, J. in Price v. Gould & Ors(') (a King's Bench decision) had clearly held that the. word "family" included brothers and sisters and in this connection observed as follows :

"I find as a fact that the brothers and sisters were D residing with the deceased at the time of her death ..... ..

It has been laid down tb.at the primary meaning of the word "family" is children, hut that primary meaning is clearly susceptible of wider interpretation, because the cases decide that the exact scope of the word must depend on the context and the other provisions of the will or deed E

in view of the surrounding circumstances."

"Thus, in Snow v. Teed (1870, 23 L.T. Rep. 303; L. Rep. 9 Bq. 622) it was held that the word "family" could be extended beyond not merely children but even beyond the statutory next of kin."

Jn view, however, of the very clear 'and plain. language of + clause (d) of section 14(1) of the Act itself, we do not want to burden this judgment by multiplying authorities.

On a point of fact, we might mention that €he Rent Controller had given a clear finding that te mother, younger brother ·, (Davinder .. Kumar Bangia) and sister (Vijay Lakshmi) were undoubtedly residing in the disputed premises alongwith the main

(1) 1963 P.L.R. (vol. LXV) 256.

(2) 1930 (vol. 143) Law Times 333.

F -

SUPREME COURT REPORTS I 198~1 j s.c.k

tenant and continued to reside there even on the date when the action for ejectment was brought.

In these circumstances, we are satified that the view taken by the High Court is legally erroneous and cannot be supported. The landlord has miserably failed to prove the essential ingredients of B clause (d) of section 14(1) of the Act so as to entitle him to evict the members of the family of the main tenant.

We therefore, allow this appeal, set aside the judgment and order of the High Court and dismiss the plaintiff's ; action for ejectment and restore the judgment of the Rent Controller. In the peculiar circumstances of the case, there will be no order as to cost.

H.L.C .

Appeal allowed.

' ,

C. BHASIN

April 16, 1982

S. MURTAZA FAZAL ALI

A. VARADARAJAN, JJ.

Delhi Rent Control Act, 1958

Delhi Rent Control Act, 1958

s. 14(l)(d)

Delhi Rent Control Act, 1958

Canada

s. 14(1)(d)

s. 14(1)

s. 14(1)

High Court of Delhi at New Delhi

Yogeshwar Prasad

Ravinder Bana

Rani Chhabra

FAZAL ALI

Baldev Singh

May 12, 1961

India

September 27, 1972

section 14

Delhi Rent Control Act, 1958

Fazal Ali

The suii was resisted by the mother, brother and sister of the tenant who averred that even if th"e tenant alongwith his wife and children had shifted to Canada, the non-applicants were continuing to live in the tem1nted premises an4 as they had been paying reQt
B.S. BANGIA v. R.C. BHASIN (Fazal Ali, J.) 673

to the landlord regularly, who hd been accepting the question or the tenancy becoming vacant arose.

s. 14(1)

s. 14(1)

Delhi

s. 14(1)

s. 14(1)

Cafladit

SUPRBMB COURT RBPORTS

(1982) 3 s.c.

s. 14(1)

section 2

9th September, 1975

31st December, 1975

section 14( 1)

H.R. Khanna

Prakash Narain

Mahajan

Wright

section 14(1)

Davinder .. Kumar Bangia

Vijay Lakshmi

section 14(1)


• ,.<.,

0. :N. BHATNAGAR

v.,

SMT. RUKIBAI NARSINDAS & ORS.

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

COopeTtiliv~ Socity 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 copartnership type housing society. Respondent No. 1 Smt. Rukibai N. Bhayoaoi 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, 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 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, .

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 3 s.c.li.

thereof, uponrevocation 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 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 topics oflgislation. 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 exclusive 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 dmurrer, the question of jurisdiction 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 between the parties. The burden was on the appellant to establish that he hid the status of a "tenant" within the meaning of s. S(ll) ofthe Rent Act, as it then stood, and that burden he has failed to discharge. If, therefore, plaintiff l 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 ins. 28 depends, the ,. defendant cannot by his plea force the plaintiff' to go .to a "forum where on averments the claim does not lie. [689 A-El

• 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-:::.

licce in his favour admittedly stood terminated by the notice of the respondent 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 vstingjn 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

-the appellant was a licensee Of the fiat or a tenant thereof was directly and substantially ill issue between the parties in the suit. The finding that he wasot 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 hr notice dated 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 tonantmember, 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 1981.

Appeal by special leave from the judgment and order -dated the2lst April, 1981 of the Bombay High Court in Appeal No. 168 of 1981. ·

H.H.

Advai, P.R. Ramasesh and Manu lyanger for the Appellant.·

S.N. Kackar, V.K. Panwani and Girish Chandra for .the

Respondents.

The Judgment of the Court was delivered by

" F

' 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 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').

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 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 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

agrement of leave and licence dated Novell!ber 28, 1961. The byelaws of the society provide that no member can part with his

possesion 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 and the appellant accordingly appiied to the society on December 8, 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 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 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 respondent No. J Smt. Ruklbai N. Bhavnani <:!aiming to be a co-partner. tenant mmber of the society and as such holder of fiat No. 52, 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 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 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 statement and thereafter evidence of the parties was recorded. It appears tht 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 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 suh adjudication by the Registrar's nominees had been replaced 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 Jvidence of both the parties was 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 with her case before \he Officer on Special Duty. Thus, the proceedings before the Officer on Special Duty remained stayed till

• E

686 SUPREMB COURT RllPORTS

(1982) 3 S.C.R •.

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 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 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 Maharashtra Cooperative Societies Tribunal which by its order dated February 8, 1974 allowed its application for transposition as a codisputant. 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 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.lA(4) bis application was rejected Respondent No. 1 was however resummoned for further cross examination and thereafter the appellant's evidence was recorded. In August, 1977 there was a change of the

Jdge of the Codperative Court and the appellant repeated his prayer for a de novo trial but this application of his also rejected.

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 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 Jude. The appellant unsuccessfully

:::;

~- '- •

O.N. BHATNAGAR v. ll.UKIBAI (Sen, J.) 687

preferred a Letters Patent Appeal wich was dismissed by a Division Bench on April 21, 198 L

There are three questions to be determined in the appeal.

They arc : (!) Wheter 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 rspondent No. 1 lay by way of a suit 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 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 nonobstante clause ins. 91(1) of )he Act. (2) Whether the respondent 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 to be impleaded as a co-diputant 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 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)Jnhereof, is a 'dispute touching the busines~ of the society' within the meaning of s. 91(1) of the Act? We proceed to deal with these questions in turn.

. 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 other law for the time being in force, any-dispute touching the .. ,.,, business of a society, shall. be referred by any of

SUPREME COURT REPORTS (19821 3 s.c.~.

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 ............... "

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, 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 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 of the claim or for an:v other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction .

I Bombay, the Co.urt of Small Causes {a) in Greater

Bombay,

{aa) xx xx xx

(b) xx xx xx

shall have jurisdiction to entertain and try .f apy suit or 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 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.''

..(, c

-;,.

.r ~--- ,

~ ,;

• ..

.~·

O.N. BHATNAOAll. v. 11.UIJBAI iSen, i.) 68~

Tile two nactw~!lt$ 9e~I wi!h !)Iv,() distiqct an9 sellifrate fielcjf and iher.tfm~ the rwnosfq"fl/G .c; l11µs~ ii) ,. 91(1) of the Act and that ins. 28. of the Rent Aci operateop two different planes. the two legislations pertain to dift"ernt 'topics of legisla.tion. It will 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 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! bfwe.q /l' ri~tff1) onf ~~~ , a trep~ser or a !ices~~· for such questions do not arise under the Act: The appellant having raised a plea in the nature of demurrer, the question of jurisdic\jop ~114 b~ ~!Fftpipr<I i!q ~YFf!,~'l,~ tq tlj~ allegations 1 contained in the statement of claim mar. gy t~~ rsppde9~ 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 fs.ens t)/~I the parties sto111! i11 ti\~ i~WjQJ .of li!; e11or ,1µ19 !ipel!Sil'e , lllld tt 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 te appellnt to establish 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}1'. hich tb .. ~. f .. x. c(1.".iv,~ j.yr.i .. ~.4ictJol1 jliyn. in s. 2? pe]l!ll)dS, the 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 displace .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 ftts. in m?)!i:storeyed b~!ldin.¥s befongfng to cooperative

ho!Jmg ~!Jciet1es w1thot aily protection. The apprehensions, ff -. w~ may say SQ, appear to 6e 'wholly unfounded. .The Legislature

ws fu)!y aware of the acute paucity of honsirig accommodation in the metropolitan city' of Greter Bombay and other urban areas in the tate, 'll!!d. also the fact' that lessors of ownership flats were

adoptig a device of inductln$ tenants under the garb of an ljgreeinenl of leave arid licence \Vhfoh left the licenseewitb 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'.

(1) of s. I SA of the Rent ACt, as introduced now: provides : ' . . '

"J~A(I) No!wit!ist~4iog WYlhipg co11\ined elsewher.e in this A9t or anything contrary in any other ·!a1V for th~

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

'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 occupation;

(2) xx xx xx xx 0

~ The term "licensee" as defined in s. 5(4A), msofar as material, reads:

"5. In this Act unless there is anything repugnant to the subject or contxt-

(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 subsisting 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 cooperative housing society registered or deemed to be registered under the Maharashtra Cooperative Societies Act, 1960; .but does not include a paY, ing guest, a member 6f 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."

...

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 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 respondent No. I dated March 31, 1965. That being so, the appellant is 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 Rent Act by Maharashtra Act 17 of 1973, the licensee of any premises 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.

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 that tbe effect of upholding the judgment of the High Court would be t<;> throw all licensees of residential flats in multi-storeyed buildings belonging to cooperative housing societies without any protection.

It would be convenient to deal with the first two questions together. The submission that the apellant was inducted as a tenant under the agreement of leave and licence is wholly misconceived. The distinction between a lease and a licence is wellknown. 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 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 appeal also 'Was dismissed. The question whether or not the 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

t .

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 reagitate the same question in these proceedings. Further, the licence - of the appellant having been terminated by the respondent No. I 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.

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 copartnership -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 FormA reads :

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

Tl)e two bye_-laws relevant for .qur purp0ses 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 specific peripd, be may Pifer the same to any Pers.on, as a liceo.see for eJP, porary occup11tion for a specifiel! perjpd, provil!Pd !~~I b.e slJ!lll-(a) sign and under,

ajcing requited ))y tl)e !!oci.ety; (g) gt such temporary occupant enro)ld l!s a llPminal wember of the society; '•

(c) sl:lall not per111it "1pb o.pupation before receiYing per-

11111 mission from t4e Society's i:; oi)lmittee to do so, provided ),- 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

member any amount due from the member to the So.ciety by way -0f , t11xes, general charge& or any other dues."

".68(a) No pern sh.i, I j)e' b, ten~.t or licensee. or lessee etc. Qf the-So, cjy or of; i. member, unless the Com, 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 Sentfty tljloi!if Wlll .M!f iltt ml and will be issued iii the joitlf llllrll~ Of Ille SOiety <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 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 appellat 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 soiety 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 in their j6frii 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 dipute tegMlliilg his unauthorized occupation of the jitmises ilftef !h'e reVocli!ioil of ilic ficehcc is devoid of tubM'll'tlce. The re!; p'(!nde'!'l! !Ito. 1-Mcly '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 fin:ce as it wo'111d teM fo cause annoyance '... and inconvenience to the other co-partner tenant members .of the

--.....__~ !W<liety.

fhre 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 respondent No. 2"'."'socfoty bl.ft we did not permit the appellan't to do so for obvious reasons. The appellant had challenged the impugned order of the Tribunal by a writ petition in the High Court and

eventuaJlyfailed. The appellant ri'ot having questioned the. judgment of the l{igh Court, the order of the Tribunal llowing transpo&itiOll'

of the respondent No. 2-society as a co-disputant bas attained a finality which cannot now be upset.

The pciings initiated by ~

SUPkilMB t:obu REPoRTS i19s2l 3 s.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 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 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 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 '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.

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 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 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 squarely within the ambit of s. 91(1) of the Act. The Courtthen

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, 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 officebearers, conduct of general meetings and management of a society would be treated as affairs of a society. In this sub-section th'e word 'business' has been usedin 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:"

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 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 property may be part of its business."

Ths,· 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 '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 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.

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 ascertained from the object for which tlie soi:iety is constituted, and it logically follows that whatever the society does ln the nortnal coutse 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 accommodation to its members, which normally is its business, to ensure that the fiats are in occupation of its members, in accordance with the 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 termination 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 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 ~Mity 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 a l!iitlbef f>\it as a mortgagor in possession arid tlle'refote tli(coo~'tratiVi: hlink'k 'claim 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 ~

Bnk'.s i:ase, sbtlril; 'dedft \tifli ''Ii! \\uifftt 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 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 proecdilte for tlie detetlllill'atio'fl bf 1111' dilplltes rt!lating to the internal 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 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 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, sliould apply.

But where the parties admittedly do not stand in the jural relationship of landlord and tenant, as here, the dispute would be governed 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.

A great deal of relianee has been placed by the appellant's counsel on the decision fo Sabharwa1 Brothers & ilnr. v. Smt. Guna Amrit Thandani ef 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 ofteaved lice~. wlltdi. #Ifs tene~ !'roln time to 'iinte mid whtn she lffi&d th6 a{llill1t fo

'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

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 :

\i'l t1n:i1 1 s:c.a. , s3.

SUPRlli.iE COIJkt REI'Okts t19Sil 3 s.c.l.

"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 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 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 buiness 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 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." ·

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 sid. 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 hre,. that is to say, if the society had let out the Ila t to her, the decision of the Court would have been

H otherwise.

The decision in Sabharwal Brothers' ca.•e, supra, is distinguishable for two reasons. First, there was an outright sale of , the flat by

O.N. BHAtNAOAR v. RtiKlBAI (Sen, !-) 69~

the society and not tht 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 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.

In the result, the appeal must fail and is dismissed with costs .

S.R.

Appeal dismissed.

0. :N. BHATNAGAR

RUKIBAI NARSINDAS & ORS

S. MURTAZA FAZAL ALI

A.P. SEN

E.S. VENKATARAMIAH, JJ.

Societies Act, 1960

Section 91(1)

section 91(1)

Section 28

Section 91(1)

Section 15A

Section 11

February 28, 1965

March 31, 1965

April 28, 1978

section 91(1)

Section 28

House Rates Control Act, 1947

Section 91(1)

s. 91(!)

s. 28

s. 91(1)

Sections 5(4A) and 15A

s. 15A

1, '

s. 15A

s. 28(1)

Feb. 1, 1973

s. 91(1)

Feb. I, 1973

section 13

section 91(1)

C1VIL APPilr.LATB Jua1so1CT10N

H.H.

Advai

P.R. Ramasesh

Manu lyanger

S.N. Kackar

V.K. Panwani

Girish Chandra

SEN

s. 91

Maharashtra Cooperative Societies Act

I Rukibai N. Bhavnani

December 8, 1961

December 15, 1961

January 10, 1965

Ruklbai N. Bhavnani

s. 91

s. 91(1)

Court of Small Causes, Bombay

s 1

s. 91

Bombay High Court

s. 91

February 8, 1974

January 9, 1976

Cooperative Court, Maharashtra

s. 9

April 18, 1978

s. 91

s. 1J

Rates Control Act

s. 28

s. 91(~)

s. 91(1)

Section 91(2)

s. 91(1)

Section 91

s. 91

Section 28(1)

s. 28

s. 91(1)

s. 5(11} or tit~ Re11t 4RI• as ii t)

s. 2

s. 5(4A)

SA of the Rent Act

ISA of the Rent Act

SA of the Rent Act

s. 28(1)

s. 5(4A)

February I, 1973

s. 28

s. 91

Februarl/ Ii 1973

s. 15A

s. 13

s. 91(1)

s. 91(1)

s. 91(1)

s. 91(1)

s. 91

s. 28

s. 91

s. 91

s. 28

s. 5(4A)

s. 43(1)

Cooperative Societies Act, 1912

s. 91(1)

s. 91

Madra8, Bombay and Kerala High Courts

Madhya Pradesh and Nagpur High Courts

Deccan Merchant Cooperative Bank

s. 91(1)

s. 91(1)

Deccan Merchants

s. 91

Deecan Merchanta Cooperative

s. 9

s. 91(1)

s. 28

s. 91

s. 28

Shyam Niwas

s. 91(1)

Sabharwal Brothers hacl

Sabharwal Brothers