Trusts & Associations - Practice & Procedure - Maharashtra Co-operative Societies Act, 1960, ss.45 and 91 - Inherent jurisdiction of Civil Court - To adjudicated cases of cooperative society - Held, u/s.91 of Act to bar Civil Court's jurisdiction, which was otherwise unlimited and was only subject to express and implied bar under statute, it should be dispute touching management of the society and between society, its members or person other than members of the society who had entered into any transaction in respect of which certain restrictions and regulations were prescribed inter alia u/s. 45 of Act - It was held referring to the judgment in SC case that before the dispute could be referred to the Co-operative Court u/s. 91(1) of Act, it was not only essential that the dispute should be of the kind described in the sub-section but also essential that parties to the dispute should be ones specified there under - Marine Times Publications (P) Ltd. Vs. Shriram Transport & Finance Co. Ltd.(1991) 1 SCC 469 Trusts relied on - Hence both the subject matter as also parties should be those specified in the section - It was, therefore, held that if either of the two requirements was not satisfied the dispute could not be adjudicated by the Co-operative Court - Consequently then the Civil Court's jurisdiction would not be barred - It appeared that only circumstance which enabled Cooperative Court to exercise its jurisdiction against such third party was that while adjudicating dispute which was otherwise amenable to its jurisdiction, Cooperative Court concluded that third party acquired some interest in property of one of parties to dispute - Consequently contention on behalf of defendants that as dispute related to management and business of plaintiff- society and was between society, its member and person other than its proposed members being covered u/s.91 of Act, it should be adjudicated in Co-operative Court was incorrect - Civil Court's jurisdiction was not seen to be barred - Thus, preliminary issue was answered in the negative .
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 2716 OF 2011
IN
SUIT NO. 2240 OF 2011
Usha Sunder Premises Cooperative
Soceity Ltd.
Vs.
Mr. Nilang Desai & Ors.
Dated : 29 th APRIL, 2014 .
1. The preliminary issue with regard to the bar of the inherent
jurisdiction of the Court under Section 91 of the Maharashtra Cooperative
Societies Act, 1960 (MCS Act) is to be decided. The issue has been framed
thus:
Whether this Court's jurisdiction is barred under Section 91 of the
Maharashtra Cooperative
Societies Act, 1960.
2. The suit is filed by a cooperative
housing society against the
two previous owners of the land owned by the society, part of which came
to be leased to them under an unregistered agreement of lease. The suit is
also filed against the ExSecretary
of the society who is alleged to have
executed a forged and fabricated document in favour of another third
party. Defendant Nos.1 & 2 are the previous owners. Defendant No.3 is
the previous Secretary. Defendant No.4 is the successor in interest of
defendant Nos.1 & 2 under certain documents executed by and between
defendant Nos.3 & 4.
3. The predecessors in title
of defendant Nos.1 & 2 sought to
develop their property for construction of the building of the plaintiff society.
Their land upon which was their dwelling house was agreed to be
and came to leased to defendant Nos.1 & 2. The lease is unregistered. The
main property of defendant Nos.1 & 2 came to be conveyed to the plaintiff society.
4. It is alleged that defendant No.3 without authority of the
plaintiff executed a Deed of Confirmation and registered the Indenture of
Lease on behalf of the plaintiff without knowledge and consent of the
plaintiff. Defendant No.3 is also alleged to have executed a Deed of
Modification Agreement, Deed of Assignment and Conveyance in favour of
defendant No.4 for and on behalf of plaintiff society
but without its
knowledge and consent. Defendant No.3 is stated to have acted upon a
resolution purportedly passed by the plaintiff society
but which is alleged
to be forged.
5. The plaintiff society
has sought declaration and cancellation of
the Deed of Modification, Deed of Confirmation Agreement and Deed of
Assignment/Conveyance.
6. It has to be seen whether the dispute between the parties falls
within Section 91 of the MCS Act, the relevant part of which runs thus:
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 Cooperative Court if both the parties thereto are one
or the other of the following(
a) ….........
(b) ….........
(c) a person other than a member of the society, with whom the
society has any transactions in respect of which any restrictions or
regulations have been imposed, made or prescribed under sections
43, 44 or 45, and any person claiming through such person;
(d) ….....
(e) …......
7. Under Section 91 to bar the Civil Court's jurisdiction, which is
otherwise unlimited and is only subject to express and implied bar under a
statute, it must be a dispute touching the management of the society and
between the society, its members or the person other than the members of
the society who has entered into any transaction in respect of which certain
restrictions and regulations are prescribed inter alia under Section 45 of
the MCS Act. Section 45 runs thus:
45. Restrictions on other transactions with nonmembers.
Save
as is provided in this Act, the transactions of a society with
persons other than members, shall be subject to such restrictions, if
any, as may be prescribed.”
8. There are no regulations or restrictions prescribed with regard
to defendant No.4 who is the person other than the plaintiff society's
member and who has entered into the aforesaid transactions with
defendant No.3, the Ex Secretary
of the society.
9. The transactions which the plaintiff society
has sought to
challenge in respect of which the suit for declaration and cancellation is
filed are not the transactions of the plaintiff society.
They are specifically
the transactions only by and between defendant No.3 who has purportedly
acted on behalf of the society but who is alleged to have acted without the
knowledge and consent of the society. Consequently the transactions in the
suit are not the transactions contemplated under Section 45 of the MCS
Act. Consequently defendant No.4 who is the person other than the society
is not the person with whom the society has had any transaction. Even if
respondent No.3, having acted as the Secretary of the society can be taken
to be the person acting on behalf of the society and hence the transaction
may be taken to be of the society (which the society has challenged), the
transaction is not one in respect of any restriction or regulation imposed
under Section 45 of the MCS Act.
10. Sections 43 & 44 which relate to restriction on borrowing and
loan making policy do not apply at all to the suit transactions.
11. In the case of Margret Almeida & Ors. Vs. Bombay Catholic
Cooperative Housing Society Ltd & Ors. (2012) 5 SCC 642 to which my
attention has been drawn by Mr. Shah on behalf of the plaintiff, the
Supreme Court considered the purport of the entire Section 91 read with
Section 45 in a suit in which the resolution of the society as also the
conveyance came to be challenged by the society. It has been held
referring to the judgment in the case of Marine Times Publications (P)
Ltd. Vs. Shriram Transport & Finance Co. Ltd. (1991) 1 SCC 469 that
before the dispute can be referred to the Cooperative
Court under Section
91(1) of the MCS Act, it is not only essential that the dispute should be of
the kind described in the subsection
but also essential that parties to the
dispute must be ones specified thereunder. Hence both the subject matter
as also the parties must be those specified in the section. It is, therefore,
held that if either of the two requirements is not satisfied the dispute
cannot be adjudicated by the Cooperative
Court. Consequently then the
Civil Court's jurisdiction would not be barred.
12. It is also held that the class of persons under subsection
(c) of
Section 91(1) is not an unqualified class. That class of persons would,
therefore, be only such person other than the member of the society with
whom the society has any transaction in respect of which any restriction or
regulation is prescribed and not all outsiders.
13. It is held in para 40 thus:
It appears that the only circumstance which enables the Cooperative
Court to exercise its jurisdiction against such a third party is that
while adjudicating a dispute which is otherwise amenable to its
jurisdiction, the Cooperative Court reaches the conclusion that a
third party acquired some interest in the property of one of the
parties to the dispute.
14. It is further held in para 47 that if any party disputes the
validity of the title conveyed, the dispute would have to be adjudicated by
the Civil Court under Section 9 of the CPC.
15. Consequently the contention on behalf of the defendants that
as the dispute relates to the management and business of the plaintiffsociety
and is between the society, its member and the person other than its
proposed members being covered under Section 91, it must be adjudicated
in the Cooperative
Court is incorrect. The Civil Court's jurisdiction is not
seen to be barred. The aforesaid preliminary issue is answered in the
negative.
16. The Notice of Motion taken out by the plaintiff being Notice of
Motion No. 565 of 2012 is adjourned for hearing to 16.06.2014.
(ROSHAN DALVI J.)
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