1997(2) ALL MR 355
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.M. LODHA, J.
Suresh K. Mehta Vs. S.B.Chincholikar And Another
Civil Revision Application No. 272 of 1996
13th December, 1996
Petitioner Counsel: Mr. D.R.ZAIWALA with Mr. K.PRESSWALA, Advocate i/b M/s. ESTLAV LAM & CO.
Respondent Counsel: Shri ASPI CHINOY with Shri. JANAK DWARKADAS i/b. M/s. DESAI AND DIWANJI
Bombay Rents, Hotel and Lodging House Rates (Control) Act (1947), Ss.13A2, 5(3), 6(4) - "Landlord" - Co-partner member of co-partner co-operative housing society giving his flat governed by Part II of Act on licence - Licencee failing to deliver possession on expiry of licence period - Held such member would be landlord and can institute proceedings u/s 13A2 - S.91 of Maharashtra Co-operative Societies Act, 1960 would not apply.
Maharashtra Co-operative Societies Act (1960), S.91.
Landlord - Co-partner member of co-partner Co-operative Housing society giving his flat under leave and licence agreement - Whether can be treated as landlord within meaning of Rent Control Act for purposes of eviction of licencee.
S.31E of the Act deals with the special procedure for disposal of applications including application u/s 13A2. The spirit and scheme of this special procedure is that a licensee having taken the premises covered under Part II on licence under written agreement from landlord who is not tenant or sub-tenant must discharge his obligations under the agreement honestly and hand over peaceful vacant possession of the licenced premises on expiry of licence period. If the licencee does not hand over vacant possession on expiry of licence, a landlord-licencor has not to be dragged in protracted litigation by filing regular suit for eviction but he can proceed for recovery of possession by instituting summary proceedings u/s. 13A2. The licencee is not granted right to contest the said proceedings as a matter of course, but must disclose such facts and grounds which may disentitle the landlord from recovery of possession. In this background, the provisions of S.13A2 with regard to eviction of licencee from the premises have to be examined. [Para 10]
By the use of the words "tenant" and "rent" in the bye laws and regulations of a co-partner co-operative housing society, it cannot be said that co-partner member is a tenant of the society as is understood under Transfer of Property Act or Rent Control Act. Though the words "tenant' and 'rent' are used in the by-laws and regulations, these expressions carry different connotation and different meaning and the relationship between the co-partner housing society and its co-partner member tenant is of a special type which is governed by special laws i.e. co-operative Societies Act, the rules framed thereunder, the by-laws and regulations framed by the society. [Para 19]
By no stretch of imagination can it be said that the relationship between the co-partnership housing society and the tenant co-partner member is the relationship of landlord and tenant as is understood under The Rent Control Act or The Transfer of Property Act. A Co-partner tenant member of co-partnership housing society is not such tenant who is excluded from the expression 'landlord' in the explanation appended to s.13A2. The tenant co-partnership society cannot claim itself to be landlord of its tenant co-partner members and no jural relationship of landlord and tenant can be read between the co-partner co-operative housing society and its tenant co-partner members. That is why any dispute between such society and its member is a dispute covered under s.91(1) of the Maharashtra Co-operative Societies Act and not under Rent Control Act. [Para 21]
The term "landlord" is defined in S.5(3) of the Act. The said definition u/s 5(3) is restricted and narrowed for the purposes of S.13A2 and a tenant or subtenant is excluded from the expression 'landlord' defined u/s 5(3). It can conveniently be said as is expressed in explanation (a) appended to S.13A2 that the landlord for the purpose of S.13A2 excludes the tenant and subtenant but that does not mean that landlord has to be absolute and full owner and would exclude a co-partner tenant member in a co-partner cooperative housing society which has a special connotation under the special Act i.e. Maharashtra Co-operative Societies Act, 1960 and the rules framed thereunder. [Para 22]
There can be no impediment in holding that the co-partner member of a co-partner housing society who gives the flat (premises) governed by Part-II of the Rent Control Act on licence is landlord within the meaning of S. 13A2 and can institute the proceedings thereunder if the licencee of such landlord fails to deliver the possession on expiry of licence period. It cannot be said that such a dispute between the copartner member and the licencee ought to be raised u/s 91 of the Maharashtra Co-operative Societies Act, 1960. If the landlord - licencor is landlord within the meaning of S. 13A2 and can maintain summary proceedings thereunder and relationship between him and the licencee is governed u/s 6(4) read with s.13A2 of Rent Control Act, obviously the provisions of Rent Control Act would prevail.
1982 Mh.L.J. 484 [Para 6]
(1989) 1 SCC 52 [Para 6,7]
AIR 1990 SC 1563 [Para 6]
AIR 1962 Bom 152(154) (FB) [Para 7,20]
1994 Mh.L.J. 1731 [Para 7]
1980 Mh.L.J. 539 [Para 8]
(1975) 2 SCC 105 [Para 16]
JUDGMENT :- In this Civil Revision Application filed under Sec. 31F of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, 'Rent Control Act'), the Petitioner impugns two orders passed on 1.3.96 by the Competent Authority, Mumbai. By the first order dated 1.3.96, the Competent Authority refused Petitioner leave to defend the proceedings in Civil Application No. 71/95 filed by Respondent no.2 herein under Section 13(1)(2) of the Rent Control Act and by the subsequent order of the even date, the Competent Authority ordered eviction of the Petitioner from the disputed flat and also granted ancillary reliefs.
2. Facts first. The Respondent No.2 herein Mrs. Brijseth (for short, 'landlady-licencor') instituted the proceedings under Sec. 13A2 of the Rent Control Act against the Petitioner herein (for short, (licencee) before the Competent Authority, Mumbai. She, inter-alia averred that she was the owner of flat no.35, garage no.54 in Block A of Sterling apartments in Sterling Cooperative Housing Society Limited Situated at 38, G.Deshmukh Marg, Bombay. By agreement of leave and licence dated 8th July 94, the landlady licencor gave permission to the licencee to use and occupy premises in question for residence in accordance with the terms and conditions reduced in writing in the said agreement, for a period of less than nine months from 8th July 94 to 31st March 95. The licencee furnished an interest free security deposit of Rs. 80 lacs for due performance and observance of the terms and conditions of the leave and licence agreement and this deposit was to be refunded to the licencee within one month of the expiry of the term of leave and licence agreement and surrender of peaceful, vacant possession of premises in question to the landlady licencor. The amount of Rs.70,159 was also paid by licencee as sum of licence fee @ Rs.8000/- p.m. Till the end of March 95 Since the licencee was not able to secure alternative premises, the landlady licencor voluntarily extended the licence period by three months upto 30th June 95. The facts relating to earlier licence dated 23.1.1991 of flat no.27 and its termination mutually on 1.4.1993 were also mentioned. Some correspondence ensued between the parties and ultimately when the licencee did not hand over the peaceful vacant possession of the disputed flat to the landlady licencor she made application under Sec.13A2 of the Rent Control Act on 25th September 1995. The licencee was served with the notice of the proceedings sometime on 25-9-95 and within prescribed time he made an application for leave to defend under Sec.31E(4)(a) of The Rent Control Act. In the application for leave to defend the licencee set up the grounds that the application under Sec. 13A2 was misconceived and not maintainable and the Competent Authority had no jurisdiction because the parties had entered into an oral understanding for sale of the flat to the licencee for Rs.88 lacs. According to licencee the amount of Rs.80 lacs was not security or interest free deposit but was payment of part consideration of the sale price. The licencee stated that he had filed suit for specific performance of the agreement for sale of the suit flat on 22-6-95 before this Court. In the background of these facts, it was stated by the licencee in the application for leave to defend that there were certain triable issues including the relationship of licencor and licencee between the parties and whether the court had jurisdiction to try the application and, therefore, leave to defend be granted.
3. The Competent Authority did not find any substance in the application made by the licencee for leave to defend and accordingly rejected the application by the order dated 1.3.96. The competent Authority after rejecting the application for leave to defend proceeded on the merits of the application made by the landlady licencor and held that in view of the written leave and licence agreement dated 8-6-94 which is conclusive proof of facts stated therein it was apparent that she was owner and on expiry of period of licence the landlady licencor was entitled to get back possession of the disputed flat from the licencee and accordingly directed the licencee to handover vacant peaceful possession of the suit premises forthwith. The competent Authority further directed to pay compensation @ Rs.16,000/- p.m., double the rate of licence fee from 1-7-95 till the licencee hands over possession of the suit premises to the landlady licencor.
4. In the memo of revision application, the licencee set out the facts that in the month of March 1990 he was desirous of purchasing flat premises close to his residence to accommodate his daughter whose marriage had broken down and the landlady licencor offered to sell the flat bearing no.27 in the same building at the then market value of Rs.80 lacs. Pending making out marketable title of the said flat by the husband of landlady-licencor, the licencee paid sum of Rs.75 lacs to him and the licencee was put in possession of said flat no.27. The balance of Rs.5 lacs was payable at the time of completion of transaction. The husband of the landlady licencor was unable to make out title to the said flat no.27 and in the month of March 92 he offered the flat in question belonging to the landlady licencor. The present flat was on higher floor and the licencee agreed to increase the price to Rs.88 lacs. To minimise the capital gains taxes liability, according to the request made by the landlady licencor and her husband, the present leave and licence agreement was entered on 8th July 94. The licencee was informed by the letter dt.29.3.95 by the landlady licencor that she has received offers from third party for outright sale of suit flat and also for giving it out on leave and licence but first option was given to the licencee either to buy the said flat or to enter into new leave and licence agreement. The licencee replied to the landlady licencor on 5th June 95 and thereafter on 22.6.95 he filed the suit for specific performance against the landlady and her husband before this Court. In the entire revision application, the crux of the grounds raised is that the landlady licencor was not entitled to file or maintain the proceedings under Sec.13A2 of the Rent Control Act since by the subsequent written contract of sale, the suit flat was agreed to be sold to him and dispute between the parties did not arise out of the leave and licence agreement but relates to the specific performance of the written contract between the parties for the sale of the disputed flat. The jurisdiction of the Competent Authority was challenged in this context.
5. To complete the narration of the facts it may be stated here that during the course of arguments the Petitioner licencee moved an application proposing to amend the civil revision application by adding a ground that the landlady licencor was not a landlord owner within the meaning of Sec.13A2 of the Rent Control Act and the owner of the premises is the Sterling Cooperative Housing Society Limited, and, the landlady licencor was tenant member of the said society. In support of this ground the Petitioner licencee sought to rely upon the by-laws and certificate of registration of the said society.
6. Mr.Zaiwala, the learned senior counsel strenuously contended that the landlady licencor was not owner of the flat in question and she could not maintain and institute the proceedings under Sec.13A2. According to him the flat in question belonged to Sterling Co-operative Housing Society Limited and landlady licencor was only tenant co-partner member. He submited that there was relationship of landlord and tenant between the Sterling cooperative Housing Society and the landlady-licencor, and, such tenant licencor cannot institute summary proceedings under Sec.13A2. Mr.Zaiwala, learned senior counsel also submitted that the application under Sec.13A2 and the proceedings therein could only be instituted by licencor who is absolute owner of the premises in question and a person who is not full and absolute owner or falls short of absolute owner cannot maintain summary proceedings for eviction under Sec.13A2 of the Rent Control Act. According to him the landlady licencor is not absolute owner and, therefore, entire proceedings under Sec.13A2 were not maintainable and consequential order for eviction passed by the Competent Authority was without jurisdiction. He sought to rely upon the decisions of the Apex Court in O.N.Bhatnagar Vs. RukiBai Narsindas Bhavnani and others 1982 MhLJ 484: Smt.Krishna Rajpal Bhatia Vs. Miss.Leela H.Advani and others (1989)1 Supreme Court Cases 52. and Sanwarmal Kejriwal. Appellant v. Vishwa Co-operative Housing Society Ltd. and others Respondents AIR 1990 Supreme Court 1563. It was also contended by the learned senior counsel that in clause-4 of the agreement dated 8.7.94 the parties agreed that the disputed premises shall not fall within the ambit of Sec.6 of The Rent Control Act. Thus according to him the parties excluded the applicability of the summary eviction proceedings under Sec.13A2 by agreement. In this background the learned senior counsel argued that there were serious triable issues and the application for leave to defend had substance. Mr.Zaiwala would also urge that the licencee is victim of fraud practised upon by the landlady-licencor and by refusing to grant the leave to the licencee, the Competent Authority committed serious error of law.
7. Responding to the contentions of the learned senior counsel for Petitioner, on the other hand Mr.Aspi Chinoy, the learned counsel appearing for landlady-licencor countered that the entire revision application was thoroughly malafide and dishonest and Petitioner was guilty of suppression of material facts. Mr.Chinoy extensively referred to the leave and licence agreement, the application for leave to defend and the memo of revision application and submitted that licencee absolutely had no defence, not the application for leave to defend disclosed any material or substantial facts that could have disentitled the landlady licencor from obtaining the order of recovery of possession under Sec.13A2 Mr.Chinoy would submit that the grounds now urged by the learned counsel for licencee-Petitioner were not set up in the leave to defend application nor were these grounds urged before Competent Authority and therefore, Competent Authority had no occasion to examine those grounds. According to Mr.Chinoy, even in the memo of revision application no ground has been set out by the licencee Petitioner that the landlady licencor was not the owner of the premises in question and that the flat in question was owned by Sterling Cooperative Housing Society and that the landlady licencor was tenant of the society. The learned counsel for landlady licencor submitted that besides that the said grounds were not set out, on factual as well as legal metrix, these were untenable. Mr.Chinoy urged that the copartner member of the society cannot be said to be tenant as understood under the Transfer of Property Act or Rent Control Act nor there was any relationship of landlord and tenant between the society and landlady licencor. Mr.Chinoy submitted that none of the decisions cited by the learned senior counsel for Petitioner has any application on the question in hand and in the full bench decision in Dr.Manohar Ramchandra Sarphare V. The Konkan Cooperative Housing Society Ltd. & Others AIR 1962 Bom.152, it has been held in unequivocal terms that mutual rights and obligations of a co-operative housing society and members occupying the tenaments alloted to them by the society are quite different from those of a landlord and tenant. Referring to clause-4 of the agreement, the learned counsel for landlady licencor submitted that parties intended by this clause to exclude the applicability and amendment made in Section 6 in the year 1973 and the parties never intended to exclude the applicability of Section 13A2 which was inserted in the year 1987. Mr.Chinoy, also sought to draw support from the judgment of this Court in Ravindranath vs. Prashantkumar 1994 MLJ 1731.
8. Mr.Presswala, learned counsel for Petitioner sought my permission to raise two contentions in rejoinder, (i) that dispute between the parties was covered under Section-91 of the Maharashtra Co-operative Societies Act,1960, and, on that ground also the proceedings under Sec.13A2 was not maintainable and (ii) that under the by-laws of the society, the landlady licencor could not have let out disputed flat and she was not entitled to receive rent and therefore she was not even landlord under Sec.5(3) of the Rent Control Act. In support of these contentions he relied upon a decision in Contessa Knitwest v. Udyog Mandir Co-operative Housing Society 1980 MLJ 539.
9. I have bestowed my thoughtful consideration to the contentions raised by learned counsel for the parties and have also perused the application made by the landlady-licencor under Sec.13A2, the application for leave to defend made by the licencee, the impugned orders and the available material placed on record.
10. It would be useful at the outset, to refer to relevant provisions of the Rent Control Act. By Maharashtra Act No.XVIII of 1987 Section-6 was further amended by inserting subsection (4) and it was provided that notwithstanding anything contained in the foregoing provisions of that section, or any other provisions of Rent Control Act, the application of Part II to premises given by a landlord referred to in Section 13A2 on licence for residence would be subject to the provisions of Section 13A2 and Part IIA. Section 13A2 entitled the landlord to recover possession of premises given on licence on expiry of licence and it provides that if the licencee in possession or occupation of residential premises given on licence does not deliver possession of such premises to the landlord on expiry of the period of licence, the landlord may make an application to the Competent Authority and the Competent Authority after reaching the satisfaction that the licence has expired, shall pass an order for eviction against the licencee. For the purposes of this Section, the expression "Landlord" does not include a tenant or subtenant who has given premises on licence and the agreement of licence in writing is conclusive proof of the facts stated therein. This section also provides that if licencee does not deliver possession of the premises on the expiry of licence and continues to be in possession, he is liable to pay damages at double the rate of licence or charge of the premises fixed under the agreement of licence. Part-IIA of the Rent Control Act deals with summary disposal of applications including the application under Section 13A2. Section-31E deals with the special procedure for disposal of applications including application under Section 13A2 and, subsection-4(a) of Section-31E provides that if licencee intends to contest the prayer for eviction made by the licencor, he must file an affidavit within 30 days of the service of summons stating grounds on which he seeks to contest the application for eviction and obtaining leave from the Competent Authority. Under clause-(d) of subsection-4 of section-31E the Competent Authority may grant leave to contest if the licencee discloses such facts as would disentitle the landlord from obtaining an order for recovery of possession. Thus, it is apparent that while seeking leave to defend licencee should not only file affidavit within 30 days of the service of summons but also disclose facts which would disentitle the landlord from obtaining an eviction order. The spirit and scheme of this special procedure is that a licencee having taken the premises covered under Part II on licence under written agreement from landlord who is not tenant or sub tenant must discharge his obligations under the agreement honestly and hand over peaceful vacant possession of the licenced premises on expiry of licence period. If the licencee does not handover vacant possession on expiry of licence, a landlord-licencor has not to be dragged in protracted litigation by filing regular suit for eviction but he can proceed for recovery of possession by instituting summary proceedings under section 13A2. The licencee is not granted right to contest the said proceedings as a matter of course, but must disclose such facts and grounds which may disentitle the landlord from recovery of possession. In this background of statutory provisions contentions of the learned counsel for the parties have to be examined.
11. In the application made by the landlady-licensor it is averred in unequivocal terms that she is owner of the disputed flat. The execution of agreement of leave and licence dated 8th July-1994 is not disputed. In the said agreement of leave and licence, licencor is shown to be absolute owner of the premises in question. The licencee in the application for leave to defend has nowhere set-out that the landlady licencor is not the owner of the premises in question. In the memo of revision, filed before this Court also there is no averment that the landlady-licencor is not the owner of premises in question. It is only during the course of arguments for the first time, it is urged that the landlady licencor is not the owner of the premises in question and, therefore, is not landlord within the meaning of Section 13A2 of the Rent Control Act. By proposed amendment at this stage it is sought to be set-up that the landlady licencor is not a landlord-owner within the meaning of Sec. 13A2 of the provisions of the Rent Control Act and the owner is Sterling Co-operative Housing Society Limited and she is a tenant member of the said society. Since this ground was never set-up by the licencee before the Competent Authority in the application for leave to defend the licencee ordinarily should not have been permitted to raise this plea for the first time before this Court during the course of arguments that landlord licencor was not the owner of the premises in question and accordingly was not a landlord under Section 13A2. Whether licencor is owner of the property or not is always a question of fact and at least a mixed question of fact and law and if the licencee wanted to challenge the ownership of the landlady-licencor for the purpose of Section 13A2, it ought to have set out the facts and raised this ground in the application for leave to defend. Had this plea been raised by the licencee before the Competent Authority that the landlady-licencor was not owner of the premises in question and, therefore, was not a landlord under Sec.13A2, the said plea would have been considered by the Competent Authority in accordance with law. However, since the learned counsel for licencee sought to raise this contention on the basis of by-laws and registration certificate of the Sterling Co-operative Housing Society and the three judgments of the Apex Court in O.N.Bhatnagar's case (supra). Krishna Rajpal Bhatia's case (supra) and Sanwarlal Kejriwal's case (supra), I am examining the said contention on merits. From the perusal of registration of the society it does appear that the Sterling Cooperative Housing Society is a co-partnership tenancy housing society and has been registered as such under Rule-10 of the Maharashtra Co-operative Societies Rules,1961. The landlady-licencor is co-partner member tenant in the Sterling Co-operative Housing Society. Can it be said, however, that there is relationship of landlord and tenant between the Sterling Co-operative Housing Society and the landlady-licencor being tenant co-partner of the disputed flat and she is not the landlord under Sec.13A2 and, therefore, not entitled to make application thereunder? That is the principal question that requires answer.
12. In O.N.Bhatnagar's case (supra), the Supreme Court was seized with the principal question: whether a claim for ejectment of an occupant of a flat by housing co-operative society who had been let into possession of the premises under the agreement of leave and licence executed between him and member of the society, by virtue of his being a nominal member thereof is a dispute 'touching the business of the society' within the meaning of Sec.91(1) of the Maharashtra Co-operative Societies Act,1960. While dealing with the said principal question in the light of the facts of that case, the Apex Court in para-12 of the report observed thus:
"As herein before adumberated, the Respondent no.2 society is governed by the Regulations in Form-A. It is registered as co-partnership type housing society. The bye-laws of the society provide, inter-alia by bye-law 2 that one of the objects of the society would be to carry on the trade of buying, selling, hiring, letting and developing land in accordance with co-operative principles. The respondent no.1 is a co-partner tenant member and holds flat no.52 in Form-A. That flat in question therefore belongs to the society and she is a co-partner tenant member thereof. ----------"
"In the present case, the society is a tenant co-partnership type housing society formed with the object of providing residential accommodation to its co-partner tenant members. Now. the nature of business which a society carried on has necessarily to be ascertained from the object for which the society is constituted, and it logically follows that whatever the society does 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. It is as much the concern of the society formed with the object of providing residential accommodation to its members, which normally is its business, to ensure that the flats are in occupation of its members, in accordance with the bye-laws framed by it, rather than of a person in unauthorised occupation, as it is the concern of the member, who lets it out to another under an agreement of leave and licence and wants to secure possession of the premises for his own use after the termination of licence. It must, therefore, follow that a claim by the society together with such member for ejectment of a person who was permited to occupying having become a nominal member thereof, upon revocation of licence, is a dispute falling within the purview of section 91(1) of the Act. The decision in Deccan Merchants Co-operative Bank's case (supra), is clearly distinguishable on facts. There, the court was dealing with a society which was a co-operative bank and ordinarily a co-operative bank cannot be said to be engaged in business when it lets out property owned by it. In that case, the dispute was not a dispute between a society and a member or a person claiming through a member. Further when the original owner executed the lease, he was not acting as a member but as a mortgagor in possession and therefore the co-operative bank's claim for ejectment of the lessee did not fall within section 91(1)(b) of the Act."
14. The Supreme Court while dealing with the inter relation between the non-obstante clause in Section 91(1) of the Co-operative Societies Act and Section 28 of the Rent Control Act observed that the two Acts can be best harmonised by holding that in matters covered by the Rent Act, the provisions of Rent Act should apply and where the parties admitedly do not stand in the jural relationship of landlord and tenant, the dispute would be governed by Section-91(1).
15. The Apex Court in Smt.Krishna Rajpal Bhatia's case (supra) reiterated the legal position which was laid down in O.N.Bhatnagar's case and held that where the co-partner tenant member files the claim for ejectment of the occupant licencee who had become a nominal member of the society in terms of the societies by-laws, such dispute would be the dispute touching with business of the society within the meaning of Section-91 of the Co-operative Societies Act and Registrar's jurisdiction was not barred under Section 28 of the Rent Control Act.
16. In Sanwarmal Kejriwal's case (supra), the Apex Court was dealing with the question: whether a licensee occupying a flat in a tenant co-partnership society can be evicted therefrom under sub-section(1) of Section-91 of the Maharashtra Co-operative Societies Act,1960, notwithstanding the protection extended by Sec.15A of the Bombay Rent Control Act or whether such proceedings would be governed by Section-28 of the Rent Control Act. In paragraph-12 and 13 of the said report, Apex Court observed thus:
"12. That takes us to the next question whether or not a member of a co-partnership type of a co-operative society has such interest in the premises alloted to him as would entitled him to give the same on leave and licence basis to a non-member. In a tenant co-partnership type of society the members are shareholders; but the title to the property vests in the society which in turn rents the tenants or flats to its members. The cost of construction of dwellings is met from deposits and loans besides the share money. The rent is usually determined on long basis so calculated as to meet the cost of construction and upkeep of the building and to guarantee perpetuity of occupation on repayment of the whole value of the tenement or flat. At the end of the period the member is credited upto additional shares equal to the amount paid by him; the interest on these shares generaly matches the rental payable by him to the society. Thus on full payment the members becomes entitled to occupy the tenements on flat free of charge as the rental he has to pay to the society is almost met from the interest received from shares held by him. Thus member has more than a mere right to occupy the flat.
13. A similar question came up for consideration before this Court in Ramesh Himmatlal Shah v. Harsukh Jadhavji Joshi (1975) 2 SCC 105 in the context of whether or not the member's right in the flat was liable to attachment and sale under S.60 of the Code of Civil Procedure. This Court after analysing the various provisions of the Societies Act, the bye-laws and the regulations framed thereunder, came to the conclusion that the member's right or interest to occupy is a species of property. Proceeding further this Court made the following observations in paragraphs 18 to 20 of the judgment:
"There is no absolute prohibition in the Act or in the Rules or in the bye-laws against transfer of interest of a member in the property belonging to the Society. The only transfer which is void under the Act is one made in contravention of sub-sec.(2) of S.47 (See S.47(3)). We have not been able to find any other provisions anywhere to the same effect. In the Scheme of the provisions a dichotomy is seen between share or interest in the capital and interest in property of the Society. While S.29(2) refers to transfer of a member's share for his interest in the capital or property of any Society. S.31 in contrast speaks of 'the share or interest of a member in the capital of a Society'. The Act, therefore, makes a clear distinction between the share or interest in the capital and share or interest in property of the Society. We have also noticed that the Act does not recognise interest in the immoveable property of the society as well |Sec S.41(1)(b)|. We have seen the qualifications for membership. There is no reason to suppose that if the qualifications under the bye-laws are fulfilled an application for membership may be rejected".
After pointing out that the right or interest to occupy is a species of property, namely, the right to occupy a flat of this type, assumes significant importance and acquired under the law a stamp of transferability in furtherance of the interest of commerce. We have seen no fetter under any of the legal provisions against such a conclusion. The attachment and sale of the property in this case in execution of the decree are valid under the law.
In absence of clear and unambiguous legal provisions to the contrary, it will not be in public interest or in the interest of commerce to impose a bar on saleability of these flats by a tortuous process of reasoning. The prohibition, if intended by the Legislature must be in express terms. We have failed to fine one".
It becomes clear from this decision that the member's right to occupy the flat is a species of property liable to attachment and sale. It is more than a mere right to occupy. It is transferable and if the transferee answers the qualifications under the bye-laws for being admitted to the membership of the Society, the Society would be precluded from unreasonably withholding such admittance. There can, therefore, be no doubt that a member-allottee has a right to transfer his interest in the flat to a third party and, therefore, the right to induct a third party on leave and licence basis".
17. In none of the aforesaid decisions, the question arose before the Apex Court whether the co-partner member tenant of a co-partner co-operative hosing society is a landlord within the meaning of Section 13A2 of Rent Control Act. This question was neither involved directly or indirectly nor was it argued and decided.
18. Adverting to the by-laws of the Sterling Co-operative Housing Society Ltd. placed by the Petitioner on record it would be seen that the said society was formed with object to purchase two plots mentioned therein and to construct tenements on such plot or plots for the use of its members and other ancillary objects. Funds of the society are raised by entrance fees, shares, raising loans, deposits, donations and contribution towards the cost of houses and land. The persons who had signed application for registration of the society are original members and other members are elected by the committee. The share capital of the society is raised by shares of the nominal value of Rs.50/- each and is held entirely by the members of the society. Under by-law 71 no member is tenant of the society unless he subscribes to the requisite number of shares prescribed by the managing committee, and, under by-law 71A a member to whom a tenement is allotted is not permitted to assign, underlet, vacate or part with possession of the tenement or any part thereto without the previous sanction in writing by the managing committee. Regulations relating to tenancy to be granted by the Society to its members in respect of houses held by the society are appended to the by laws and a member making an application for tenement is required to hold not less than five paid up shares in the society. It further provides that each tenancy shall continue so long as tenant or his successor in all respects observes and performs such regulations. Each tenant co-partner member is required to pay proper proportion fixed by the society of all expenses payable in respect of contract, repairing, rebuilding, and cleansing all party walls, party fences, party hedges, sewers, drains, gates, roads, paths, pavements and other things, the use of which is common to the tenement and to adjoining or other premises. Clause-24 of the regulation provides the mode and manner for the calculation of rent and is as under:
The rent shall be calculated as follows and shall be paid on the first day of each calendar month: - -
(a) A rent of 6.1/4 per annum (which shall not be increased during the tenancy) on the cost including the building land roads and other items, such sot to be certified by the committee whose decision shall be final and conclusive and to be paid by 12 equal calendar monthly payments.
(b) A further rent during the term of 25 years of........per cent per annum (which shall not be increased during the said term of 25 years except for a new tenant) on the said cost such rent to be applied to the share account of the tenants and to be paid by 12 equal calendar monthly payments and it is anticipated that when all these payments are made the dividend on the shares will be equal to the rent paid under clause 24(a) thereof.
(c) A further rent equal to the proportion (applicable to the tenement) of the expense incurred from time to time in insurance against fire, tempest or violence by any army or mob or other irresistible force and in the management of the Society and the maintenance and repair of the Society's estate such expense and proportion thereof payable by the tenant to be determined by the certificate of the Committee whose decision shall be final and conclusive such further rent to be paid on the 1st day of the calendar month next following the date of the said certificate.
(d) A further rent equal to the proportion application to the tenement of the sum or sums from time to time paid by the Society in respect of the assessments and rates such proportion to be determined by the certificate of the Committee whose decision shall be final and conclusive such further rent to be paid on the 1st day of the calendar month next following the date of the said certificate".
19. By the use of the words "tenant" and "rent" in the bye laws and regulations can it be said that co-partner member is a tenant of the society as is under stood under Transfer of Property Act or Rent Control Act. No. simply no is my answer. The use of the words 'tenant' and 'rent' in the bye laws and regulations is of a totally different character and nature and would not be indicative of the fact that these terms have been used the manner in which these are used in the Transfer of Property Act and the Rent Control Act. The allotment of tenement in co-operative housing society including a co-partnership housing society is not a lease as defined under Section 105 of the Transfer of Property Act. Tenament is allotted to a member not because he agrees to pay any money or render any service, but because he is member of that society and holds certain number of shares. The very objective of the co-operative housing society is to provide houses to its members. The nature of the periodical payment referred to hereinabove and mentioned in clause-24 of regulation which a co-partner member is required to make is materially different from the rent payable for lease because such member has also to pay portion of the cost of the building, lands, roads etc. and so also the amount due from him for his share of the expenses incurred in the management of the society and the maintenance, repairs etc. of the estate. The fixation of rent for such member of society takes into account materially different considerations from those under the Transfer of Property Act or under the Rent Control Act. Not only that as is obvious from by-laws and regulations, the tenant co-partner of a tenement has right to occupy the flat allotted to him only so long as he continues to be member of the society. If the member does not discharge his obligations under the by-laws or regulations or acts in contravention thereof, such member can be expelled from the membership of the society and upon that the tenancy of such co-partner tenant would stand terminated. A society under the by-laws is not required to determine the tenancy as required under Section-111 of the Transfer of Property Act. It cannot be lost sight of that the allotment of flat to co-partner member tenant by the society is also subject to the rules, by-laws and regulations of the society and it is open to the society to modify, vary, alter or change such by-laws or regulations from time to time. Such is not a case with ordinary lease or tenancy. Once the lease is granted on particular terms and conditions such terms and conditions cannot be altered except by mutual contract. In the relationship of a society and a co-partner member the terms and conditions form part under the by-laws, rules and regulations of the society and can be altered at any time in accordance with such by-laws and regulations. The sum of the aforesaid discussion, therefore, is that though the words 'tenant' and 'rent' are used in the by-laws and regulations, these expressions carry different connotation and different meaning and the relationship between a co-partner housing society and its co-partner member tenant is of a special type which is governed by special laws i.e. Co-operative Societies Act, the rules framed thereunder, the by-laws and regulations framed by the society.
"11.The mutual rights and obligations of a co-operative housing society and its members are, therefore quite different from those of a landlord and a tenant. The relationship is of a special type, which is governed by special laws made for this purpose viz. the Co-operative Societies Act and the rules, by-laws and regulations made thereunder. Even though, therefore, a member to whom a tenement is given for occupation is described in the by-laws and the regulations as a tenant, he is not a tenant in the sense in which this term is used in the Transfer of Property Act or in the Rent Act, nor is the Society his landlord.
13. The next question which arises for our determination, is about the relationship created, when the tenement is given for occupation by a member of a Co-operative Housing Society to another member or a nominal member of such Society. Under regulation No 5 a tenement cannot be given to any other member without the consent of the Society. The person to whom a tenement is given must also become a member of the Society. If he is not already a member. The Society is, however, not a direct party to the transaction and grants the application of the proposed occupant for his becoming a nominal member. The payment for use and occupation of the tenement is also made to the member and not to the Society. The Cooperative Tribunal has taken the view that since a member, who has taken the tenement from the Society cannot be regarded as tenant, the person who claims through him cannot also claim the status of a tenant. In law, however, it is possible for a person with a posesory title to create a tenancy. Such a transaction will be binding between him and his tenant, though it may be defensible at the hands of the person with a superior title. Consequently, we cannot say that the relationship of a landlord and a tenant cannot exist between two members of a Co-operative Housing Society or between a member and a nominal member of such Society. The question whether the transaction is a lease and whether the relationship created is that of landlord and tenant must be decided in each case, having regard to the facts and circumstances of that case, it is hardly necessary to add that the tenancy, if any, will be between the occupant and the member who has given it for occupation. The latter not being a tenant of the Society the occupant or the nominal member cannot claim the benefit of Section 14 of the Rent Act as against the Society. No question of tenancy can however normally arise when the member, in whose name the tenement stands, and the member who is actually occupying it are both joint holders of the same shares of the Society.
14. The next question, which arises for our consideration, is whether in case, in which the relationship of landlord and tenant exists between two members of a cooperative housing society or between a member and a nominal member of such society, the Registrar or his nominee is competent to decide the dispute relating to possession of the tenement or the recovery of the amount due for the use and occupation of such tenement, or whether only the Court specified in Section 28 will have jurisdiction to decide it. Both the co-operative Societies Act and the Rent Act are beneficial measures, though the duration for which the Rent Act will remain in force is limited. As observed by the Supreme Court in Shri Ram Narain v. Simla Banking and Industrial Co.Ltd. 1956 SCR 603 at p.615 : ( (S) AIR 1956 SC 614 at o.622), the overriding effect of one or the other of the relevant provisions in these two Acts should be determined on broad considerations of the purpose and policy underlying the two Acts and the clear intendment conveyed by the language of the relevant provisions therein. Section 54 of the co-operative Societies Act provides interalia that if any dispute touching the business of a society arises between members of the society, it shall be referred to the Registrar for decision by himself or his nominee lies to the Bombay Co-operative Tribunal constituted under Section 63A of the Act. Sub-section (7) of this section states that an order passed by the Tribunal shall be final and conclusive and shall not be liable to be called in question in any civil or revenue Court. It has been held by this Court in several cases that the jurisdiction confered by S.54 is exclusive. A dispute regarding possession of a house belonging to a co-operative housing society can be said to touch the business of the society. Under Section 54, therefore, such a dispute must be referred to other Registrar for decision by him or his nominee. Sub-section (1) of Section 28 of the Rent Act provides as follows:
(i) Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not but for this provision, be within its jurisdiction.
(a) in Greater Bombay, the Court of Small Causes, Bombay
(aa) in any area for which, a Court of Small Causes is established under the Provincial Small Cause Courts Act, 1887, Such Court and
(b) elsewhere the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the premises are situate or, if there is no such Civil Judge, the Court of the Civil Judge (Senior Division) having ordinary jurisdiction, shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of the Part apply and to decide any application made under this Act and to deal with any claim of question arising out of this Act or any of its provisions and subject to the provisions of sub-section(2) no other court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question."
21. In my view, the ratio laid-down by the full bench in Dr.Manohar Ramchandra Sarphare is fully applicable so far as mutual rights and obligations of the co-operative housing society and its members are concerned and their relationship and by no stretch of imagination can it be said that the relationship between the co-partnership housing society and the tenant co-partner member is the relationship of landlord and tenant as is understood under the Rent Control Act or the Transfer of Property Act. A co-partner tenant member of co-partnership housing society is not such tenant who is excluded from the expression 'landlord' in the explanation appended to section 13A2. The tenant co-partnership society cannot claim itself to be landlord of its tenant co-partner members and no jural relationship of landlord and tenant can be read between the co-partner co-operative housing society and its tenant co-partner members. That is why any dispute between such society and its member is a dispute covered under Section 91(1) of the Maharashtra Co-operative Societies Act and not under Rent Control Act. The learned counsel for the Petitioner sought to draw much capital from the observation made by the full bench in Dr.Manohar Ramchandra Sarphare's case (supra) that the property in the whole estate remains absolutely with the Society as a whole. The said observation is sought to be pressed in service out of context. Reading the aforesaid decision as a whole the full bench in unequivocal terms laid-down that a co-partner co-operative housing society is not a landlord of its members and relationship of landlord and tenant cannot be found in the co-operative society and its member. The explanation(a) appended to Section 13A2 states that for the purpose of this section, the expression 'landlord' does not include a tenant or subtenant who is given premises on licence. It is thus apparent and clear that if a person, who is a tenant under the Rent Control Act gives the premises on licence he can not be treated as a landlord under Section 13A2 and cannot take advantage of summary proceedings under Section 13A2. However, the words 'tenant' or 'subtenant' occuring in explanation(a) cannot be said to include a co-partner member tenant of co-partner housing society. The learned single Judge of this Court in Ravindranath's case (supra) has also taken the view that the tenant member of the co-operative society was not a tenant within the meaning of the explanation(a) to Section 13A2 and I am in full agreement with that view, though for different reasons aforestated I may frankly observe that I have my doubt about the correctness of one of the reasons about the dual ownership given in Ravindranath's case.
22. The contention raised by learned senior counsel Mr.Zaiwala that the licencor less than absolute or full owner is not a landlord within the meaning of Section 13A2 is difficult to be accepted. The landlord is defined in Section 5(3) which means any person who is for the time being, receiving or entitled to receive, rent in respect of any premises whether on his own account or on behalf, or for the benefit of any other person or as a trustee, guardian, or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant, and includes any person not being tenant who from time to time derives title under a landlord and further includes in premises in respect of his subtenant, a tenant who has sublet any premises and also includes in respect of a licensee deemed to be a tenant by Section 15A, the licencor who has given such licence. The said definition under Section 5(3) is restricted and narrowed for the purposes of Section 13A2 and a tenant or subtenant is excluded from the expression landlord defined under Section 5(3). It can conveniently be said as is expressed in explanation (a) that the landlord for the purpose of Section 13A2 excludes the tenant and subtenant but that does not mean that landlord has to be absolute and full owner and would exclude a co-partner tenant member in a co-partner cooperative housing society which has a special connotation under the special Act i.e. Maharashtra Co-operative Societies Act.1960 and the rules framed thereunder.
23. I find no impediment and have no hesitation in holding that the co-partner member of a co-partner housing society who gives the flat (premises) governed by Part-II of the Rent Control Act on licence is landlord within the meaning of Section 13A2 and can institute the proceedings thereunder if the licencee of such landlord fails to deliver the possession on expiry of licence period.
24. At this stage I may deal with two contentions raised by Mr.Presswala, learned counsel for the Petitioner in rejoinder.His first contention that the dispute ought to have been raised under Section 91(1) is only noted to be rejected. I have already held that the landlady-licencor is landlord within the meaning of Section 13A2 and can maintain summary proceedings thereunder. If the landlady-licencor can maintain the proceedings under Section 13A2 and relationship between her and the licencee is governed under Section 6(4) read with Section 13A2 of Rent Control Act. obviously in view of the consistent law laid down by the Apex Court in O.N.Bhatnagar's case and Sanwarmal Kejriwal's case, the provisions of Rent Control Act would prevail. The first contention raised by Mr.Presswala, therefore, is devoid of any merit.
25. Coming to the second ground urged by Mr.Presswala learned counsel for the Petitioner, in rejoinder that under the byelaws of the society the landlady licencor could not let out disputed flat and therefore she was not entitled to receive any rent and, was not even landlord under Section 5(3) of the Rent Control Act, it may be observed that the by-laws do not exclude induction of licencee altogether by the co-partner member. Rather by-laws provide that with the permission of Society such licencee can be made nominal member. Moreover if there is any contravention of by-laws on the part of such co-partner member of the society by inducting licencee without permission of society, right to receive the rent from the person who has been inducted as licencee by such landlord is not taken away and it cannot be said that such person would not be landlord within the meaning of Section 5(3) of the Rent Control Act. The second contention raised by learned counsel Mr.Presswala also has no merit. Needless to state again that the two contentions raised by learned counsel for Petitioner in rejoinder were also not set-out any time earlier either in the application for leave to defend made by licencee before the Competent Authority or in the memo of revision application before this Court.
26. This takes me to the last point urged by Mr.Zaiwala, learned senior counsel on behalf of licencee that in Clause-4 of the agreement dated 8.7.94, the parties had agreed that the premises forming subject matter of the agreement shall not be taken to fall within the ambit of Section-6 of the Rent Control Act and, therefore, application under Section 13A2 was not maintainable.
(i) This agreement does not create any demise or tenancy or any other right in favour of the Licencee in the licenced premises or any part thereof nor do the premises forming the subject matter of the Agreement fall within the ambit of Section-6 of the Rent Act. as amended by L.A.Act No.XVII of 1973 of the Government of Maharashtra.
(ii) The licencor shall throughout the period of the agreement have full control over and shall be in possession of the said flat.
(iii) Any notice to be served upon the licencee shall be deemed to be properly served upon the licencee if addressed to the licencee at the licensed premises.
28. Clause-4(i) read as a whole would indicate that the parties clearly intended that by this agreement dated 8.7.94 no right of any sort or tenancy would be created in favour of licencee in the licenced premises or part thereof, and, that licencee will not be entitled to the benefit of the provisions of the amendment Act of 1973. By the amendment Act of 1973 the provisions contained in Chapter-II of the Rent Control Act were made applicable to a premises given on licence for any purpose before the commencement of Act of 1973 as if the premises were letout for that purpose. Therefore, by this clause the parties by their agreement made it clear that the licencee shall not be entitled to any benefit of the provisions contained in the Rent Control Amendment Act,1973. It cannot be said from the reading of this clause-4 that parties intended to exclude the applicability of Section 6(4) to the licenced premises and that the landlady-licencor was excluded from exercising her right to seek eviction under Section-13A2 if the licencee refused or fail to deliver possession on expiry of period of licence. If the parties had in fact intended that the premises in question would be excluded from applicability of Section 13A2 this would have been the first ground set out and urged while seeking leave to defend before the Competent Authority. The licencee had clear idea that there was no such intention and that is why this ground was not set out in the application for leave to defend nor such ground has been raised in the memo of revision application. I, therefore, do not find any merit in this contention of the learned counsel for the Petitioner that under clause-4 of the agreement, the premises in question were excluded from applicability of Part-II of Rent Control Act.
29. Before I close, it would be pertinent to mention that the execution of leave and licence agreement is not at all denied. In view of explanation (b) appended to Section 13A2 an agreement of licence in writing is conclusive evidence of the facts stated therein for the purposes of proceedings under Section 13A2 and, therefore, on the basis of leave and licence agreement the facts stated therein shall be held to be conclusively proved. In this view of the matter, grounds setout in the leave to defend application and in the memo of revision application before this Court that after the leave and licence agreement, the landlady licencor agreed to sell the flat in question to the licencee for consideration of Rs.88 lacs or that any fraud was practised upon the licencee are devoid of any merit and irrelevant. I am not inclined to dwelve into inconsistencies in the case set out by the licencee in the application for leave to defend and the revision application. Suffice it to say on the face of leave and licence agreement and the special provisions contained under the Rent Control Act relating thereto, the Competent Authority cannot be said to have committed any error in refusing to grant leave to defend to the Petitioner who failed to disclose sufficient facts which would have disentitled landlady-licencor from getting the eviction order.
31. Mr.Chinoy, the learned counsel for landlady-licencor offered that his client was prepared to refund the amount of Rs.80 lacs deposited by the licencee as interest free security subject to adjustment of compensation in accordance with the order passed by the Competent Authority simultaneously to the handing over possession of the disputed flat by the licencee on or before 16th January-1997 unless ordered otherwise by the Supreme Court. Order accordingly, certified copy expedited.