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Judgment
By these Appeals, orders passed by the learned Single Judge in relation to the same property are challenged. Therefore, these Appeals can be conveniently disposed of by a common order. Before the learned Single Judge there were two Writ Petitions, Writ Petition No. 1769 of 2010 and Writ Petition No. 1824 of 2010 challenging the order passed by the State Government in relation bifurcation of a Cooperative Housing Society by name the Bombay Catholic Co-operative Housing Society Limited (hereinafter referred to as "the Society"). Before the learned Single Judge apart from these two Petitions a few notice of motions were filed. Notice of Motion No. 172 of 2010 was taken out in Suit No. 144 of 2010. Suit No. 144 of 2010 is filed by persons who were members of the Society seeking a decree of declaration that the general body resolution of the Society dated 6 December 2009 and the conveyance of the property of the Society dated 7th December 2009 are invalid and illegal. Notice of Motion No. 173 of 2010 was taken out by the Plaintiff in a Suit No. 145 of 2010 which was filed by another set of members of the same society claiming identical reliefs. There was also a Notice of Motion No. 148 of 2010 taken out in Suit No. 1 of 2008 that was filed by one Mr. B.Y. Chavan and another seeking certain reliefs against the same Society and the same land. The learned Single Judge by his order which is impugned in these Appeals in so far as the Writ Petitioners are concerned has allowed the Writ Petition and has set aside the order passed by the State Government. The consequence of the order of the learned Single Judge is that the order passed by the Divisional Joint Registrar in the proceedings initiated u/s 18 of the Maharashtra Co-operative Societies Act for division of the aforesaid co-operative Housing Society remanding the proceedings back to the original authority is maintained. Appeals have been filed challenging that order of the learned Single Judge. In the Civil Suits including Civil Suit No. 1 of 2010 a preliminary objections to the maintainability of the Civil Suits were raised on the ground that for non compliance with the provisions of Section 164 of the Maharashtra Co-operative Societies Act, the suits are not maintainable, and also that because subject matter of the suits is covered by Section 91 of the Maharashtra Co-operative Societies Act, Civil Court does not have a jurisdiction to entertain the Civil Suits. The learned Single Judge, therefore, framed two preliminary issues and decided those preliminary issues mainly by his order dated 5th of May 2011 passed in Notice of Motion No. 148 of 2010 in Suit No. 1 of 2010. The learned Single Judge held that the Suits are maintainable. The learned Single Judge, thereafter considered the Notice of Motions on merits and has directed the parties to maintain the status-quo.
Thus Appeals have been filed challenging the order passed by the learned Single Judge in the two Writ Petitions as also, Appeals have also been filed challenging the order passed by the learned Single Judge in the Notice of Motions taken out in the Suits where, by those orders, the learned Single Judge has held that the Suits are maintainable and has granted interim order in favour of the Plaintiffs directing the parties to maintain status-quo.
Appeal No. 413 of 2011 is filed by M/s. Sumer Associates, a partnership firm challenging the order in the Notice of Motion No. 182 of 2010 in suit No. 144 of 2010.
Appeal No. 411 of 2011 is filed by M/s. Sumer Associates, challenging the order in Writ Petition No. 1824 of 2010.
Appeal No. 487 of 2011 is filed by the Co-operative Housing Society by name the Bombay Catholic Co-operative Housing Society Limited challenging the order of learned Single Judge in Notice of Motion No. 173 of 2010 directing the parties to maintain the status-quo.
Appeal No. 488 of 2011 is filed by the Bombay Catholic Cooperative Housing Society Limited challenging the order passed by the learned Single Judge in Writ Petition No. 1824 of 2010.
Appeal No. 489 of 2011 is filed by the Bombay Catholic Co-operative Housing Society Limited challenging the order of the learned Single Judge in Notice of Motion No. 172 of 2010 in Suit No. 144 of 2010 directing the parties to maintain status-quo.
Appeal No. 493 of 2011 filed by the Bombay Catholic Cooperative Housing Society Limited challenging the order made by the learned Single Judge in Writ Petition No. 1769 of 2010.
Appeal No. 412 of 2011 is filed by M/s. Sumer Associates directing the order passed by the learned Single Judge in Writ Petition No. 1769 of 2010.
Appeal No. 414 of 2011 is filed by M/s. Sumer Associates challenging the order passed in Notice of Motion No. 173 of 2010 in Suit No. 145 of 2010 directing the parties to maintain the Status quo.
Appeal (L) No. 507 of 2011 is by Celine Castellino who was Respondent in Writ Petition No. 1824 of 2010.
Appeal (L) No. 508 of 2011 filed by William D''Souza and others challenging the order passed by the learned Single Judge in Notice of Motion No. 173 of 2010 in Suit No. 145 of 2010 directing the parties to maintain status quo.
Appeal No. 572 of 2011 is filed by Celine Castellino challenging the order passed by the learned Single Judge in Writ Petition No. 1769 of 2010.
Appeal No. 573 of 2011 is filed by Gwendoline Lobo and Others challenging the order in Notice of Motion No. 172 of 2010 in Suit No. 144 of 2010 directing the parties to maintain status-quo.
The Appeals are admitted. By consent of the parties they are heard finally.
Appeal (L) No. 469 of 2011 is filed by Francis Phillips and Ors. Challenging the order passed by the learned Single Judge in Writ Petition No. 1769 of 2010 setting aside the order passed by the State Government and maintaining the order of Divisional Joint Registrar in Appeal. According to the Appellants permitting to intervene in that Petition. However as we propose to maintain the order of the learned Single Judge which is also challenged in other Appeals we need not entertain this Appeal.
As observed above, the principal order on the preliminary issue as to the maintainability of the Suits was decided by the learned Single Judge by passing order in Notice of Motion No. 148 of 2010 taken out in Suit No. 1 of 2010. That Appeal we have disposed of by a separate order. However, for deciding the Appeals in so far as the aspect of maintainability of the Civil Suit is concerned, we will be referring to that order.
Now first taking up the Appeals where the order passed by the learned Single Judge in the two Writ Petitions is challenged for consideration, the relevant facts are that proceedings u/s 18 of the Maharashtra Co-operative Societies Act were initiated for bifurcation of the aforesaid co-operative housing society. The proceedings once went up to the Supreme Court. They were remanded. On remand, there was an order for bifurcation of the said housing society, by the Deputy Registrar Co-operative Societies, West Ward Mumbai, on 28/11/2007. Appeals were filed against that order. Those Appeals were decided by the Divisional Joint Registrar, Cooperative Societies, Mumbai Division, Mumbai. The operative part of the order reads as under-
1) The Appeal No. 246/2007 & Appeal No. 27 of 2008 are disposed of.
2) The impugned order dated 28/11/2007 passed by the Respondent Deputy Registrar, C.S.H./West Ward, Mumbai under Sec. 18(1) of the M.C.S. Act, 1960 read with Rule 17 of the M.C.S. Rules, 1961 is hereby quashed and set aside.
3) The case is remanded back to the Respondent Deputy Registrar C.S. H/W Ward, Mumbai for afresh consideration and decide the case in the lights the observations made hereinabove.
4) This order would not come into effect for a period of 4 weeks as directed by the Hon''ble High Court in order dated 06/03/2009 in Writ Petition No. 2808 of 2009.
5) No order as to cost.
Both the Appeals were thus allowed. The order passed by the Deputy Registrar was set aside. The matters were remanded back to the Deputy Registrar for fresh consideration and decision in the light of the observations made in the Appellate order. Against the order of the Divisional Joint Registrar in Appeal, Revision Application u/s 154 of the Co-operative Societies Act was filed before the State Government by an association of tenants of the said housing society. The Applicant association filed a written application before the State Government for withdrawal of the Revision Application. That Application was opposed by the society and others. The reason for opposing withdrawal of the Revision Application was that the society in its general body meeting had passed a resolution dated 6/12/2009 deciding to transfer entire the land in favour of M/s. Sumer Associates and pursuance to that resolution on 7/12/2009 conveyance of the property was executed and it was therefore submitted that now there is no need to bifurcate the society. The State Government made order in the Revision Application on 31 May 2011. Operative part of that order which reads as under:-
Applicant is allowed to withdraw Revision Application No. 713/2009.
Order dt. 29.09.2009 of the Defendant No. 1 Divisional Joint Registrar, Co-operative Societies, Mumbai Division, Mumbai quashing the order of division of Defendant No. 2 Society, of the Deputy Registrar, Co-operative Societies, H/West Ward, Mumbai, dt. 28.11.2007 is hereby confirmed.
Order of the Divisional Joint Registrar, Co-operative Societies, Mumbai Division, Mumbai, dt. 29.01.2009 to the extent of issuing directions to the Deputy Registrar, Co-operative Societies, H/West Ward, Mumbai, for giving re-hearing afresh again, is hereby quashed.
No order as to the costs.
The State Government allowed the revision, set aside the order passed by the Divisional Joint Registrar insofar as it remands the proceedings back to the original authority. The submission of the Petitioners in the two Writ Petitions that were filed before the learned Single Judge challenging the order of the State Government was that the order of the State Government is without jurisdiction. In the Revision Application, the revision applicant had made an application to withdraw the revision, the State Government permitted the Applicant to withdraw the Revision Application and therefore the State Government could not have passed the order which we have quoted above. The learned Single Judge has accepted this contention and set aside the order passed by the State Government. The Revision before the State Government was filed u/s 154 of the Maharashtra Co-operative Societies Act. Sub-section (1) of Section 154 reads as under-
154(1) The State Government or the Registrar, Suo motu or on an application, may call for and examine the record of any inquiry or proceedings of any matter, other than those referred to in subsection (9) of section 149, where any decision or order has been passed by any subordinate officer, and no appeal lies against such decision or order, for the purpose of satisfying themselves as to the legality or propriety of any such decision or order, and as to the regularity of such proceedings. If, in any case, it appears to the State Government, or the Registrar, that any decision or order so called for should be modified, annulled or reversed, the State Government or the Registrar, as the case may be, may, after giving the person affected thereby an opportunity of being heard, pass such orders thereon as to it or him may seem just.
Perusal of the above quoted provisions show that revisional jurisdiction is vested in the State Government against the order of the Registrar, Additional Registrar or Joint Registrar. The State Government can call for the record of any order against which an Appeal does not lie for the purpose of satisfying itself as to the legality or propriety of such decision or order and the State Government can exercise its power either on an application or even suo motu. In the present case, there are no suo motu proceedings initiated by the State Government. The revisional jurisdiction of the State Government was invoked by the association of tenants. Therefore, the moment the application made by the Applicant for withdrawal of the Revision Application was allowed the revision stood withdrawn then the State Government could not have decided the Revision Application on merits unless the State Government had decided to invoke its suo motu power. In the present case the State Government has not invoked its suo motu power because condition precedent for invoking suo motu power in that notice is given to all persons who are likely to be adversely affected of the intention of the State Government to exercise suo motu power. In our opinion, therefore, the learned Single Judge was perfectly justified in interfering with the order of the State Government. That because the Society has passed the resolution in the General Body for transfer of the land and because that resolution has also been implemented there is no need to bifurcate the society is an argument or submission which is open to be advanced before the original authority. By the order which was impugned before the State Government, the Divisional Joint Registrar has merely remanded the proceedings back to the original authority for dealing with the matter in accordance with law. In our opinion therefore, the learned Single Judge was perfectly justified in setting aside the order passed by the State Government. The learned Single Judge has set aside the order of the State Government insofar as it sets aside the order of the Divisional Joint Registrar on the ground that after allowing the revision applicant to withdraw the revision, the State Government cease to have jurisdiction to make any order in that Revision Application. The consequence of the order of the learned Single Judge is that the order of the Divisional Joint Registrar passed in Appeal remains intact as a consequence the proceedings stand remitted back to the original authority for consideration and decision in terms of the remand order of the appellate authority. It is obvious that when proceedings are taken up by the original authority for consideration all the contentions and issues which in law can be raised before him by the parties can be raised by the parties. The learned Single Judge in his order passed in the said Writ Petition has not expressed any final opinion on any question which the original authority is to consider in the proceedings pending before it. The Appeals where the order passed by the learned Single Judge on the Writ Petition is challenged are therefore dismissed.
Now, we take up the Appeals where order passed by the learned Single Judge in the Notices of Motion is challenged for consideration. The learned Single Judge had framed two preliminary issues. They read as under-
I) Whether the suit is maintainable in the absence of a notice u/s 164 of the Maharashtra Cooperative Societies Act, 1960?
II) Whether this Court has no jurisdiction to entertain this suit in view of sections 91 and 163 of the Maharashtra Co-operative Societies Act, 1960?
We propose to take up for consideration second preliminary issue framed by the learned Single Judge first.
The principal prayer in both the Civil Suits is prayer clause (a), which reads thus-
(a) for a declaration that the said Resolution dated 6th December, 2009 (Exhibit ''K'' hereto) and the said Conveyance dated 7th December, 2009 (Exhibit ''M'' hereto) are invalid, illegal and void ab initio and/or the same are voidable as against the Plaintiffs and the Tenant members of Defendant No. 17 Association;
(a-i) That this Hon''ble Court be pleased to pass Order declaring Section 164 of Maharashtra Co-operative Societies Act, 12 violation of Article 14 of the Constitution of India and the same ought to be struck down.
There was a special general body meeting of the Co-operative Society called. It was held on 6 December 2009. In that special general body meeting, a resolution was passed mainly deciding to convey the land belonging to the society to M/s. Sumer Associates. Pursuant to that resolution, conveyance of the land was executed in favour of M/s. Sumer Associates.
Civil Suit was filed by persons who are admittedly members of the co-operative housing society challenging the resolution passed by the general body as also the conveyance which is executed by the Society in pursuance of the resolution of the general body. Section 91 of the Maharashtra Co-operative Societies Act reads as under:-
(1) Notwithstanding (anything contained) in any other law for the time being in force, any dispute touching the constitution, (election of the committee or its officers other than elections of committees of the specified societies including its officers), 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 a cooperative 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 or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society [or person who claims to be a member of the society];
(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 u/s 43, 44 or 45, and any person claiming through such person;
(d) a surety of a member, past member or deceased member, or surety of a person other than a member with whom the society has any transactions in respect of which restriction have been prescribed u/s 45, whether such surety or person is or is not a member of the society];
(e) any other society, or the Liquidator of such a society [or de-registered society or the Official Assignee of such a de-registered society].
[Provided that, an industrial dispute as defined in clause (k) of section 2 of the Industrial Disputes Act, 1947, or rejection of nomination paper at the election to a committee of any society other than a notified society u/s 73-IC or a society specified by or u/s 73-G, or refusal of admission to membership by a society to any person qualified therefor, [or any proceedings for the recovery of the amount as arrears of land revenue on a certificate granted by the Registrar under subsection (1) or (2) of section 101 of sub-section (1) of section 137 or the recovery proceeding of the Registrar or any officer subordinate to him or an officer of society notified by the State Government, who is empowered by the Registrar under sub-section (1) of Section 156, [or any orders, decisions, awards and actions of the Registrar against which an appeal u/s 152 or 152A and revision u/s 154 of the Act have been provided] shall not be deemed to be a dispute for the purposes of this section.]
(3) Save as otherwise provided under[sub-section (2) of section 93], no Court shall have jurisdiction to entertain any suit or other proceeding in respect of any dispute referred to in sub-section (1).
(Emphasis supplied)
Perusal of the above quoted provision of Section 91 shows that a dispute, the subject matter of which is the conduct of general meeting, management of a society and to which a member of the society and the society are parties will be a dispute within the meaning of Section 91 of the Co-operative Societies Act. Sub-section (3) of Section 91 and Section 163 are also relevant. Section 91(3) and Section 163 read as under:-
Section 91(3)-
Save as otherwise provided under[sub-section (2) of section 93], no Court shall have jurisdiction to entertain any suit or other proceeding in respect of any dispute referred to in sub-section (1).
Section 163-
(1) Save as expressly provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of-
(a) the registration of a society or its by-laws, or the amendment of its by-laws, or the dissolution of the committee of a society, or the Management of the society on dissolution thereof; or
(b) any dispute required to be referred to [the Cooperative Court] for decision;
(c) any matter concerned with the winding up and dissolution of a society.
(2) While a society is being wound up, no suit or other legal proceeding relating to the business of such society shall be proceeded with or instituted against the society or any member thereof, or any matter touching the affairs of the society, except by leave of the Registrar, and subject to such terms as he may impose.
(3) All orders, decisions or awards passed in accordance with this Act or the rules, shall, subject to the provisions of appeal or revision in this Act be final; and no such order, decision or award shall be liable to be challenged, set aside, modified, revised or declared void in any Court upon the merits, or upon any other ground whatsoever.
A combined reading of provisions of sub-Section 3 of Section 91 and Section 163 makes the position clear that the jurisdiction of the Civil Court to entertain any dispute required to be referred to the Cooperative Court for decision is ousted. The question that arises for consideration is whether dispute in relation to the validity and legality of the resolution passed by the General Body of the Co-operative Society raised by a member of that Co-operative Society as also a dispute as to the validity and legality of any action taken pursuant to such resolution of the general body will be a dispute within the meaning of Section 91 or not? Perusal of the order of the learned Single Judge in Suit No. 1 of 2010 as also order passed in Suit No. 144 of 2010 and 145 of 2010 shows that according to the learned Single Judge because the transfer of land is not a business of the society, the dispute in relation to transfer of land of the society would not amount to a dispute within the meaning of Section 91 of the Act. The learned Single Judge has also held that what is challenged principally in the Civil Suit is the conveyance executed in favour of M/s. Sumer Associates and M/s. Sumer Associates is not a member of the society and therefore bar of Section 91(3) and Section 163 does not operate. In our opinion, the finding of the learned Single Judge that what is principally challenged in the Civil Suit is the conveyance executed by the Society in favour of M/s. Sumer Associates is unacceptable. The conveyance executed in favour of M/s. Sumer Associates is merely a consequence of the resolution of the general body of the Co-operative housing society where the Co-operative housing society decided to execute conveyance in favour of M/s. Sumer Associates. Therefore what is principally challenged in the Civil Suit is the resolution. Challenge to the general body resolution without challenging the conveyance is possible. However, challenge only to the conveyance without challenging the resolution is not possible. If Court passes a decree or order setting aside the resolution of the general body, the validity of the conveyance will not be intact, but if a decree or order is made merely setting aside the conveyance, the resolution of the General body will remain intact. By the conveyance land owned by the Society is transferred. The Society is a body corporate. The person or persons who have signed the conveyance on behalf of the Society derive the authority to do so from resolution of the General Body. If the resolution is set aside or is declared invalid the act of the person of executing the conveyance would become unauthorized. Such an order in relation to the validity of the General Body resolution will impair the validity of the conveyance. Consequently, if the resolution remains intact but the conveyance is set aside for some reason the Society may be in a position to execute another conveyance pursuant to the resolution of the general Body. In our opinion, therefore, what is principally challenged in the Civil Suit is the resolution of the general body and challenge to the conveyance is ancillary. The learned Single Judge has also held that to a dispute before Co-operative Court M/s. Sumer Associates cannot be joined as a party, therefore dispute challenging the conveyance would not be maintained before the Co-operative Court. In our opinion, however, that finding also cannot be accepted as entirely correct. In this regard, in our opinion, on behalf of the society reliance was rightly placed on the provisions of Sub-section (3) of Section 94 of the Act. It reads as under:-
(3) (a) If [the Co-operative Court] is satisfied that a person, whether he be a member of the society or not, has acquired any interest in the property of a person who is a party to a dispute, (it may order), that the person who has acquired the interest in the property may join as a party to the dispute; and any decision that may be passed on the reference by [the Co-operative Court] shall be binding on the party so joined, in the same manner as if he were an original party to the dispute.
It is thus clear that had a dispute been filed challenging the resolution of the society deciding to convey property to M/s. Sumer associates and there was a challenge to the conveyance executed in favour of M/s. Sumer Associates and M/s. Sumer Associates had not been joined as a party, Co-operative Court had the power to direct to joinder of M/s. Sumer Associates as a party to the dispute and thereafter any decision given in that dispute in relation to the validity of the conveyance in favour of M/s. Sumer Associates would be binding on that party. Thus, the Plaintiffs could have filed the dispute before the Co-operative Court challenging the resolution of the General Body and the consequent execution of conveyance in favour of M/s. Sumer Associates and could have joined M/s. Sumer Associates as a Defendant in that dispute. In our opinion thus the entire subject matter of the Civil Suit could have been the subject matter of the dispute filed u/s 91. A submission was made on behalf of the Appellants that the provisions of Section 94(3)(a) come into play only if a party who is likely to be adversely affected by the decision in the dispute is not joined, in our opinion however the purpose of enacting Sub-section (3)(a) of Section 94 is to permit joinder of a person as a party to a dispute filed u/s 91. In our opinion Section 94(3)(a) not only vests power in the Co-operative Court to order joinder of a person who is likely to be adversely affected by its order to be joined as a party to the dispute but it also enables a disputant to join to the dispute a person as party who may be adversely affected by the order which he seeks in the disputes. Thus if a dispute is filed before Co-operative Court u/s 91 challenging the resolution by which the Society has decided to transfer property owned by the Society also the conveyance executed pursuant thereto, in terms of Section 94(3)(a) the purchaser as a person who has acquired interest in the property which subject matter of dispute can also be joined as a party Defendant to the dispute. Therefore, in our opinion, as principally what is challenged in the Civil Suit is the resolution of the general body of the society the subject matter of the suit would amount to a dispute within the meaning of Section 91 of the Co-operative Societies Act and therefore, in terms of Sub-section (3) of Section 91 and Section 163, the jurisdiction of the Civil Court would be ousted. So far as the submission made on behalf of the Respondent that the resolution of the general body does not relate to the business of the society therefore, a dispute challenging the validity of the resolution of the general body will not amount to a dispute under Sub-section (1) of Section 91 is concerned, in our opinion as Sub-section (1) of Section 91 includes any dispute regarding conduct of general meeting as also management of the affairs of the society, a dispute challenging the validity resolution passed by the general body of a Co-operative society would definitely amount to dispute within the meaning of Section 91 of the Act.
In this view of the matter, therefore, in our opinion, the two suits as framed and filed were not maintainable before the Civil Court, in view of the provisions of Section 91(3) and 163 of the Co-operative Societies Act.
So far as issue No. 1 is concerned, we are in agreement with the findings recorded by the learned Single Judge that Section 164 is in the nature of protection given to the society which is capable of being waived by the society and that it does not totally bar institution of a Suit. In any case as by our finding on issue No. 2 we have held that the Suits as framed and filed, were not maintainable, it is not necessary for us to express any final opinion on this aspect. As we have held that the Civil Suits are not maintainable, it is not necessary for us to decide the question whether on merits, the learned Single Judge was justified in making the interim order in favour of the Plaintiffs by directing the parties to maintain status-quo.
In the result, therefore, the Appeals where the order passed by the learned Single Judge on the preliminary issues which are challenged, are allowed. The order of the learned Single Judge is set aside. It is held that the two Suits as framed and filed are not maintainable before the Civil Court. The Suits are therefore, dismissed with no order as to costs. All the Appeals are disposed of. At the request of the learned counsel appearing for the Appellants in Appeals where the order passed on the Notice of Motion is challenged, it is directed that the following ad-interim order shall operate for a period of eight weeks from today.
i) No further steps be taken by the concerned parties based upon the conveyance dated 7th December 2009.
ii) The parties to maintain status-quo with respect to the property in question i.e. Willingdon (East).
iii) The earlier statements already recorded in the order dated 24 December 2009 to continue for a period of eight weeks from today.
iv) In so far as the Writ Petitions are concerned, it is clarified that there is no interim order, the Deputy Registrar is free to proceed further in accordance with the law.