Jurisdiction of Civil Court is not barred when suit is by a society against an encroacher

 Citation: 2013(2)ABR255, 2013(1)ALLMR33, 2013(2)BomCR244, 2012(114)BOMLR3675, 2013(1)MhLj104

IN THE HIGH COURT OF BOMBAY

Appeal (Lodg.) No. 728 of 2012 in Notice of Motion Nos. 471, 496 and 1564 of 2012 in Suit No. 1894 of 2010

Decided On: 11.10.2012

Appellants: Alok Agarwal and Others
Vs.
Respondent: Punam Co-operative Housing Society Ltd. and others and Pratap Issardas Bhatia and Others

Hon'ble Judges/Coram:
Dr. D.Y. Chandrachud and A.A. Sayed, JJ.

Civil - Jurisdiction to entertain and try the suit - Whether the subject matter of the suit was such as would fall within the jurisdiction of the Co-operative Court under Section 91 of the Maharashtra Co-operative Societies Act, 1960?

Held, the jurisdiction of a Civil Court is not barred in the present suit which is by a society against an encroacher, upon an encroachment of the premises belonging to the society which can never belong to a member. The Co-operative Court would have jurisdiction in respect of Flat No. 1, but the suit premises being alleged to be an open space of the society, meant for enjoyment of all the members, an action in law at the behest of the Co-operative society would be maintained in the Civil Court. Thus, the foundation of the action which has been instituted by the society is that the premises to which the suit relates do not form the subject matter of the allotment by the society to its member and it is from that perspective that the society has sought a declaration in regard to the invalidity of the agreement dated 30th May, 2007 under which the Appellants claim title. Looked at from either perspective, such a suit by the society would not fall within the jurisdiction of the Co-operative Court under Section 91. Section 9 of the Code of Civil Procedure confers jurisdiction on a Civil Court to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. The suit which is instituted by the First Respondent on the Original Side of this Court is not a suit meeting the description of an action that the Co-operative Court would have jurisdiction to entertain under Section 91 of the Maharashtra Co-operative Societies Act, 1960. Thus, the learned Single Judge was not in error in answering the preliminary issue framed under Section 9-A by holding that this Court had jurisdiction to entertain and try the suit. In consequence the application filed by the Appellant for rejection of the Plaint for under Clauses (a) and (d) of Order 7 Rule 11 was lacking in substance as was the application for a stay under Section 10 of the Code of Civil Procedure, 2008. The proceedings before the Co-operative Court shall now be confined only in respect of the premises of Flat No. 1 and that an amendment shall be carried out so as to exclude from the purview of those proceedings the premises which form the subject matter of the suit which had been instituted before this Court. The Appeal is accordingly dismissed.

Ratio Decidendi: 
"Before a dispute can be referred to a Co-operative Court under the provisions of Section 91(1) of the Maharashtra Co-operative Societies Act, 1960, it is not only essential that the dispute should be of a kind described in Sub-section (1) of Section 91 but it is also essential that the parties to the said dispute must belong to any of the categories specified in Clauses (a) to (e) of Sub-section (1) of the said section."

1. This Appeal arises from a decision of a Learned Single Judge on three Notices of Motion taken out by the Sixth and Seventh Defendants :

(i) A Notice of Motion questioning the jurisdiction of this Court to entertain the suit and seeking to raise a preliminary issue under Section 9A of the Code of Civil Procedure 1908 on the ground that the exclusive jurisdiction to entertain and try the suit would vest with the Co-operative Court by virtue of the provisions of Section 163 read with Section 91 of the Maharashtra Co-operative Societies Act 1960 NM 1564 of 2012.

(ii) A Notice of Motion seeking stay of the suit filed before this Court by the First Respondent NM 471 of 2012 and

(iii) A Notice of Motion seeking the rejection of the plaint under clauses (a) and (d) of Order 7 Rule 11 of the Code of Civil Procedure 1908 NM 496 of 2012.

By the order impugned in these proceedings the Learned Single Judge has dismissed all the three Notices of Motion inter alia answering the issue of jurisdiction framed under Section 9-A in terms of a finding that this Court has jurisdiction to entertain the suit. A separate Notice of Motion taken out by the First Respondent - Plaintiff for interlocutory relief has now been adjourned for hearing and final disposal.

2. For convenience of reference it would be appropriate to refer to the parties in terms of the array of parties before the Trial Court.

3. The Appellants before the Court claim to have acquired title under and in pursuance of an agreement dated 30 May 2007 entered into by the original First to Fifth Defendants (Respondents 2 to 6 to the Appeal).

4. The First Respondent instituted a suit on the Original Side of this Court for the following reliefs :

i) For a declaration that the agreement dated 30 May 2007 is null and void and unenforceable in respect of certain areas marked in yellow and red colour boundary lines in Exhibit A to the plaint;

ii) For a declaration that the Sixth and Seventh Defendants are trespassers in respect of the aforesaid area;

iii) For a decree ordering the Defendants to deliver possession of the aforesaid areas;

iv) For a declaration that the Sixth and Seventh Defendants have no right, title or interest in respect of the said areas;

v) For a decree in the sum of Rs. 1.30 Crores;

vi) For a permanent injunction restraining the Sixth and Seventh Defendants from using the parking space delineated in a yellow colour boundary line in Exhibit A to the plaint.

5. The basis on which the suit has been instituted is that the Appellants, the original Sixth and Seventh Defendants, trespassed into an area which is reserved as a common amenity, as a garden or open space which has to be used for the benefit of all the members of the society. According to the First Respondent which is a co-operative housing society, the society had maintained the sewage lines and water pipelines and had maintained the compound until allegedly at midnight on 14/15 April 2008 the Appellant broke open the lock from a passage and obtained forcible possession. The following averment in paragraph 5(f) states, in essence the case of the First Respondent :

In furtherance to Defendant No. 6's illegal scheming, and acts on the mid night of 14th/15th April 2008, the Defendant No. 6 along with 6 persons threatened the security guard and forcibly took the key from the guard and broke open the original lock of the door to the passage going to the open space abutting the Flat No. 1 and put his own lock and thereby illegally and unlawfully grabbed and took forcible possession of the entire open space namely the garden space which used to be under the lock and key of the Plaintiffs.

6. The Plaintiff has stated that the open space/garden is a common amenity and facility for the society, in paragraph 4(1)(i) of the Plaint as amended. The suit before this Court has been instituted in respect of an open space comprising of a garden admeasuring 1900 sq. ft., a closed garage of 250 sq. ft. and what is described as an annexe block. The case of the First Respondent - Plaintiff is that the Appellants would be entitled to no more than the premises of flat No. 1 and that they have in fact encroached upon other areas which would form part of the common areas and amenities of the society.

7. Prior to the institution of the suit before this Court, the First Respondent had filed proceedings before the Co-operative Court Case No. CCII/572 of 2008. In the proceedings before the Co-operative Court the First Respondent sought a direction inter alia against the Appellant to handover vacant and peaceful possession of flat No. 1 and in addition, the annexe block, closed garage, a stilt garage and an open space abutting flat No. 1. Injunctive reliefs have also been sought before the Cooperative Court. When the suit was instituted before this Court and the Motions came up for hearing before the Learned Single Judge, a statement was made on behalf of the First Respondent that the First Respondent would withdraw the relief sought before the Co-operative Court in respect of the premises which form the subject matter of the suit before this Court. Though inadvertently this was not recorded by the Learned Single Judge when the order was passed on 14 September 20012, that statement has been recorded subsequently on an application speaking to the minutes on 27 September 2012 in the following terms:

Counsel on behalf of the Plaintiff submits that counsel had submitted at the time of arguments that he would withdraw the reliefs with regard to the suit premises in the Co-operative Court. That is the correct statement.

Counsel appearing on behalf of the First Respondent makes a statement on instructions that the First Respondent would abide by this statement which was recorded by the Learned Single Judge and that as a matter of fact an application to that effect has been prepared and would be filed before the Co-operative Court by tomorrow.

8. The Learned Single, Judge in view of the mandate of Section 9A of the Code of Civil Procedure 1908, framed the following preliminary issue :

Whether this Court has inherent jurisdiction to try the suit in view of the bar contained in Section 91 of the Maharashtra Co-operative Societies Act, 1960.

9. Section 163(1) of the Maharashtra Co-operative Societies Act 1960 provides that save as expressly provided in the Act, no Civil or Revenue Court shall have any jurisdiction in respect inter alia of any dispute required to be referred to the Co-operative Court for decision. Hence, primarily the issue was whether the subject matter of the suit was such as would fall within the jurisdiction of the Co-operative Court under Section 91. Section 91 insofar as is material provides as follows :

91. Disputes

(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, elections of the committee or its officers other than elections of committees of the specified societies including its officer, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, to the co-operative Court if both the parties thereto are one or other of the following:-

(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society or the official Assignee of a de-registered society.

(b) a member, past member of a person claiming through a member, past member of a deceased member of society, or a society which is a member of the society or a person who claims to be a member of the society.

10. The Learned Single Judge held that the jurisdiction of a Civil Court is not barred in the present suit which is by a society against an encroacher, upon an encroachment of the premises belonging to the society which can never belong to a member. The Learned Single Judge held that the Co-operative Court would have jurisdiction in respect of flat No. 1, but the suit premises being alleged to be an open space of the society, meant for enjoyment of all the members, an action in law at the behest of the co-operative society would be maintained in the Civil Court.

11. The Motion for stay under Section 10 of the Code of Civil Procedure 1908 and the Motion seeking rejection of the Plaint under Rule 11(a) and (d) have in consequence been dismissed.

12. Learned Senior Counsel appearing on behalf of the Appellant submitted that :

i) The First Respondent while moving the Co-operative Court proceeded on the basis that the Appellant is claiming through Defendants 1 to 5 in respect of the flat as well as the annexe block, the closed garage, a stilt garage and an open space;

ii) That being the position the dispute in the present case is between the society and a person claiming through a member of the society and therefore falls within the ambit of Section 91;

iii) Section 91 would encompass the jurisdiction of the Co-operative Court when a co-operative society institutes proceedings for the removal of an act of trespass committed by a member or a person who claims through a member of the society.

13. On the other hand it has been submitted on behalf of the First Respondent that :

i) Where a member of a co-operative society commits an act of trespass in respect of an area which the society asserts to be an open space or a common amenity to be enjoyed by all the members of the society, the person committing an act of trespass does not do so in his capacity as a member but as a trespasser and consequently the jurisdiction of the Civil Court under Section 9 of the Code of Civil Procedure 1908 is not ousted;

ii) In the present case the reliefs which have been sought in the suit instituted before this Court include a declaration that the agreement dated 30 May 2007 under which the Appellants claim is null and void and unenforceable against the co-operative society in respect of the common areas which according to the society could never form the subject matter of a transfer of immovable property by a member of the society;

iii) The proceedings which have now been instituted before the Co-operative Court would be confined to the claim by the co-operative society in respect of flat No. 1 whereas the jurisdiction of this Court in respect of those areas on which the Appellants are alleged to have trespassed cannot stand ousted.

The rival submissions fall for consideration.

14. Sub section (1) of Section 91 is prefaced with a non obstante clause and provides that disputes of a certain nature and between parties which meet the description stated therein shall be referred by any of the parties to the dispute to the Co-operative Court. In other words, before sub section (1) of Section 91 can be attracted two principal requirements must be fulfilled. Firstly, the subject matter of the dispute must fall within the ambit of the disputes covered by the provision. Secondly, both the parties to the dispute or one or either of them must be of the description spelt out in clauses (a) to (e) of the provision. Among the disputes which fall within the jurisdiction of the Co-operative Court are disputes touching the constitution and the management of business of the society. Among the parties who are referred to in the succeeding clauses are a society and a member, past member or a person claiming through a member of the society. In the present case, there is no dispute about the fact that the First Respondent is a co-operative society and therefore meets the description in clause (a) of sub section (1). The Sixth Defendant, the Court is informed, applied for membership of the society. The society rejected the application for membership and eventually the Divisional Joint Registrar of Co-operative Societies allowed the application for membership. A petition which has been filed by the co-operative society to challenge the order of the Divisional Joint Registrar is pending before this Court.

15. The real bone of contention, however, is whether the reliefs which have been sought before this Court are of a nature that would fall within the jurisdiction of the Co-operative Court under sub section (1) of Section 91. The co-operative society, which is the Plaintiff before this Court, has among the reliefs sought claimed a declaration to the effect that the agreement dated 30 May 2007 under which the Appellant claims title is null and void and unenforceable as against the society. Declaratory relief of this nature cannot be granted by the Co-operative Court. Section 31 of the Specific Relief Act 1963 provides that any person against whom a written instrument is void or voidable, and who has reasonable apprehension that if such instrument is left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled. The power which is conferred upon the Civil Court under Section 31(1) of ordering cancellation of a written instrument is evidently not vested in the Co-operative Court constituted under the Maharashtra Co-operative Societies Act 1960. It is well settled that the jurisdiction which is conferred on a Civil Court under Section 9 of the Code of Civil Procedure 1908 to try all suits of civil nature can be abrogated only by an express provision of the statute or where it is impliedly barred. The provisions of Section 91 of the Maharashtra Co-operative Societies Act 1960 do not either expressly or by necessary implication confer jurisdiction on the Co-operative Court to grant declaratory relief especially of the nature referable as in the present case to Section 31 of the Specific Relief Act 1963. The issue as to whether a declaration of this nature can be granted by the Co-operative Court is not res integra but has been dealt with in a judgment of the Supreme Court in Ramesh Chand Ardawatiya v. Anil PanjwaniMANU/SC/0387/2003 : AIR 2003 SC 2508. where the provisions of Section 75 of the Rajasthan Co-operative Societies Act 1965 came up for consideration. Section 75(1) conferred jurisdiction on the Registrar, notwithstanding anything contained in any law for the time being in force in respect of disputes touching the constitution, management or the business of a co-operative society arising inter alia between members, or past members or between the society or its committee and any past committee. The Supreme Court held that a suit for declaration of title, or possessory title or for that matter seeking the restoration of possession would fall within the inherent jurisdiction of the Civil Court and would not be governed by Section 75. In that regard the Supreme Court held as follows :

The plaint as framed by the plaintiff is for declaration of title as owner (and in the alternative, his possessory title) and seeking restoration of possession, as also issuance of mandatory and preventive injunctions against a recent encroachment. Neither is it a dispute between the parties referred to in Clauses (a) to (e) of sub-section (1) of Section 75, nor does the nature of the dispute fall in Clauses (a) to (c) of sub section (2) of Section 75 so as to be one excluded from the domain of a Civil Court.

16. A more recent judgment of the Supreme Court dealing with the subject is in Margret Almeida v. Bombay Catholic Co-operative Housing Society Limited MANU/SC/0147/2012 : (2012) 5 SCC 642, which specifically considered the provisions of Section 91(1) of the Maharashtra Co-operative Societies Act 1960. In that case, the First Respondent was a society and was the owner of a tract of land. Some of the tenant members of the society including the Appellants initiated proceedings for the division of the society. A resolution was passed by the general body of the society to sell the land in favour of Respondents 22 and 23 and a deed of conveyance came to be executed. Two suits were instituted on the Original Side of this Court, the principal prayer being for a declaration that the resolution of the society and the conveyance were void ab initio or voidable against the Plaintiff and the tenant members. A preliminary objection to the maintainability of the suit in view of the provisions of Sections 91 and 163 of the Maharashtra Co-operative Societies Act, 1960 was raised before but rejected by the Learned Single Judge, but in appeal the Division Bench upheld the objection. The Division Bench observed that what was principally challenged in the civil suit was a resolution of the general body, while the challenge to the conveyance was ancillary. The Supreme Court, while interpreting the provisions of Section 91 observed as follows :

27. It can be seen from the scheme of Section 91, to confer exclusive jurisdiction on the Co-operative Court, the dispute must satisfy two requirements. It was held so in Marine Times Publications (P) Ltd. v. Shriram Transport & Finance Co. Ltd. MANU/SC/0161/1991 : (1991) 1 SCC 469 at para 11: (SCC p. 474)

11. Before a dispute can be referred to a Co-operative Court under the provisions of Section 91(1) of the said Act it is not only essential that the dispute should be of a kind described in subsection (1) of Section 91 but it is also essential that the parties to the said dispute must belong to any of the categories specified in clauses (a) to (e) of sub-section (1) of the said section.

Both the subject-matter as well as the parties to the dispute must be those specified under the section. In other words, if either of the abovementioned two requirements is not satisfied then the dispute cannot be adjudicated by the Co-operative Court. If one of the parties to the dispute is not an enumerated person, the question whether the subject matter of the dispute is one which falls exclusively within the jurisdiction of the Co-operative Court need not be examined. Similarly, if it is found in a given case that the subject-matter of the dispute is not covered by Section 91, an enquiry into the question whether the parties to the dispute fall under any of the categories enumerated under Section 91 would become irrelevant.

17. While holding that the premise of the judgment of the Division Bench of this Court was erroneous, the Supreme Court held as follows :

If any party such as the plaintiffs (the appellants herein) disputes the validity of the title conveyed thereunder, necessarily such a dispute would have to be adjudicated by a competent court under Section 9 of the Code of Civil Procedure wherein, necessarily, the question whether a valid title was conveyed in favour of Respondents 22 and 23 by the society would arise for determination. The legality of the resolution would still have to be gone into again. Therefore, in our opinion, the premise in which the High Court commenced its enquiry itself is wrong.

18. In our view, both the judgments of the Supreme Court in Ardawatiya and in Margret Almeida would indicate that the declaration which the First Respondent has sought in regard to the invalidity of the agreement dated 30 May 2007 under which the Appellants claim title, in respect of the areas shown in the plan annexed at Exhibit A to the Plaint would not fall within the jurisdiction of the Co-operative Court.

19. Moreover, and independent of the aforesaid position, the claim of the First Respondent is that the Appellants have trespassed upon common areas or an amenity required for the use of the members of the society. When a member of a co-operative society commits an act of encroachment in respect of an area which is not lawfully allotted to him by the co-operative society, he assumes the character of an encroacher or a trespasser. The act of encroachment or of trespass is not committed by a member in his capacity as a member of the cooperative society. The question as to whether the Appellant has trespassed in fact does not fall for determination at this stage in these proceedings nor should the observations which have been made by the Learned Single Judge be regarded as concluding that issue. It is necessary to so clarify because Motion for interim relief is still pending before the Learned Single Judge and at this stage, the Trial Court has considered the preliminary issue under Section 9A and the Motions for the rejection of the plaint under Order 7 Rule 11 and for the grant of a stay under Section 10 of the Code of Civil procedure 1908. Be that as it may, it is evident that when a co-operative society sues on the basis that there has been a trespass or an encroachment in respect of a common amenity which does not form the subject matter of a lawful allotment in favour of any member, the dispute that is sought to be raised by the society cannot properly construed be regarded as a dispute falling within the purview of Section 91. Chief Justice Chagla, speaking for a Division bench of this Court in Shyam Co-operative Housing Society Ltd. v. Ramibai Bhagwansing Advani MANU/MH/0115/1952 : AIR 1952 Bom 445 observed that the dispute must be between the society and the member as a member or qua a member. The Learned Chief Justice held that it must be a dispute in which the member must be interested as a member and it must relate to a transaction in which the member must be interested as a member. From this perspective it was held that it was not every dispute between the society and a member that would fall within the purview of the provisions of Section 54 of the Bombay Cooperative Societies Act 1925. The Learned Chief Justice held that for instance, there may be many disputes between the society and its members in which the members are not concerned as members at all and they are in the same position as strangers.

20. The judgment of the Supreme Court in O.N. Bhatnagar v. Rukibai Narsindas MANU/SC/0206/1982 : AIR 1982 SC 1097 dealt with a situation where a member to whom premises had lawfully been allotted had granted a licence of the premises and the licensee had thereupon failed to vacate. It was in this context that the Supreme Court held that the nature of the business of a society has to be ascertained from the objects for which the society is constituted and whatever the society did in the normal course of its activities such as by initiating proceedings for removing an act of trespass by a stranger, from a flat allotted to one of its members, cannot but be part of its business. In the present case, the foundation of the action which has been instituted by the society is that the premises to which the suit relates do not form the subject matter of the allotment by the society to its member and it is from that perspective that the society has sought a declaration in regard to the invalidity of the agreement dated 30 May 2007 under which the Appellants claim title. Looked at from either perspective, such a suit by the society would not fall within the jurisdiction of the Co-operative Court under Section 91. Section 9 of the Code of Civil Procedure confers jurisdiction on a Civil Court to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. The suit which is instituted by the First Respondent on the Original Side of this Court is not a suit meeting the description of an action that the Co-operative Court would have jurisdiction to entertain under Section 91 of the Maharashtra Co-operative Societies Act 1960. For these reasons, we are of the view that the Learned Single Judge was not in error in answering the preliminary issue framed under Section 9-A by holding that this Court had jurisdiction to entertain and try the suit.

21. In consequence the application filed by the Appellant for rejection of the Plaint for under clauses (a) and (d) of Order 7 Rule 11 was lacking in substance as was the application for a stay under Section 10 of the Code of Civil Procedure 2008. No separate submission has been urged by either side as regards the order of the Learned Single Judge on those Motions.

22. Before concluding the judgment, we would once again make a reference to the statement which has been made on behalf of the First Respondent that the proceedings before the Co-operative Court shall now be confined only in respect of the premises of flat No. 1 and that an amendment shall be carried out so as to exclude from the purview of those proceedings the premises which form the subject matter of the suit which has been instituted before this Court. We also clarify that any observations of the Learned Single Judge on merits shall not conclude the application for interim relief on which the Motion is pending hearing and final disposal. The Appeal is accordingly dismissed. There shall be no order as to costs.

In view of the disposal of the Appeal, Notice of Motion No. 471 of 2012, Notice of Motion No. 496 of 2012 and Notice of Motion No. 1564 of 2012 are rendered infructuous and are accordingly disposed of.

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