Bombay High Court
Citizen Credit Co Op Bank Ltd vs St. Sebastian Homes Co Op Society Ltd. ... on 4 December, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:46859
WP 9108-21.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9108 OF 2021
Citizen Credit Co-operative Bank Ltd, ]
Previously known as Citizen Co-operative ]
Bank Ltd, having its Corporate Office ]
]
at Citizen Credit Centre, ]
Opposite Our Lady of Lourdes Church, ]
Marve Road, Orlem, Malad (West), ]
Mumbai - 400064. ] ...Petitioners.
Versus
1. St. Sebastian Homes Co-operative ]
Society Ltd, having its registered office ]
at St. Sebastian House, 42, Rebello Road, ]
]
St. Sebastian Colony, Bandra (West), ]
Mumbai - 400050. ]
2. Sunith Francis Soares. ]
]
3. Neville Francis Soares (Deceased) ]
through his legal heirs. ]
]
3(a) Smt. Nalini Neville Soares. ]
3(b) Neville Soares. ]
]
3(c) Nancy Soares. ]
]
All residing at 56, St. Sebastian colony
]
Mount Carmel Road, Bandra (west), ]
Mumbai - 400050. ]
4. Patel Investment Trust. ]
]
Having its office at 5-A, Monisha,
]
St. Andrews Road, Bandra (West), ] ...Respondents.
Mumbai - 400 050. ]
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Mr. Girish S. Godbole, Senior Advocate along with Ms. Sakshi Sharma, Mr. Mac.
S. Bodhanwalla, Mr. Sheroy M. Bodhanwalla, Mr. Akash Singh i/b M/s. M. S.
Bodhanwalla & Co., for the Petitioner.
Mr. Anil Anturkar, Senior Advocate along with Mr. Kashish Chelani, Mr. Sujith
Suresh and Mr. Karan Aiya i/b Solics i/b Solics JVPD for the Respondent No. 1.
Ms. Priyanka Bhadrashette for the Respondent No. 2 and 3(a) to (c).
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Patil-SR (ch) 1 of 29
WP 9108-21.doc
Coram : Sharmila U. Deshmukh, J.
Reserved on : September 18, 2024.
Pronounced on : December 4, 2024.
Judgment :
1. Rule. With consent, Rule made returnable forthwith and taken up for final hearing.
2. The present Petition takes exception to the judgment and order of dated 1st October 2021 passed by the Co-operative Appellate Court in Appeal No.3 of 2020 dismissing the Appeal, thereby upholding the Award of Co-operative Court dated 23rd October 2019 partly allowing the Dispute and directing the Petitioner to handover possession of ground floor and first floor admeasuring 2000 sq ft and 400 sq ft respectively to the Respondent No.1-Society.
3. The facts necessary to be exposited are that the Petitioner, which is a Scheduled Multi State Co-operative Bank, vide Agreement dated 29th August, 1987 purchased the ground floor and first floor premises [for short "subject premises"] in a building constructed by Respondent No 4 Developer on land bearing Plot No.57, Rebello Road, Bandra West, Mumbai 400 050, which was leased to the Respondent No 2 and 3 by the Respondent No.1 Society.
4. The Respondent No.1 Society was formed in the year 1915, with the object of carrying out business of developing land and is governed Patil-SR (ch) 2 of 29 WP 9108-21.doc by the bye-laws adopted on 24th August, 1922. The Bye-laws restricts the membership of Respondent No.1 Society only to Roman Catholics.
The Society was at liberty to grant leases to its members as per prescribed Form A. Bye-law No.8B permits the members of Respondent No.1-Society to develop their plots by construction of building on the leasehold land and upon such development, the flat purchasers consisting of persons eligible to be members as per the Bye-laws, were entitled to form a co-operative housing Society,which was required to apply for membership of Respondent No.1 Society. The Bye-laws required the prior approval of Respondent No.1 to the development plans of the proposed building.
5. A brief reference to the lease hold rights granted by the Respondent No.1 Society would be relevant. One Antonelli Francis Bartholomew Saldanha and Ramiro Aveline Saldanha became members of the Society and were granted lease vide lease deed dated 21 st March, 1928 and thereafter constructed a structure thereon. Antonelli relinquished his right in the suit plot and building in favour of Ramiro and the Respondent No.1 Society executed a lease deed dated 25 th February, 1958 in favour of Ramiro. By Deed of Assignment dated 20 th December, 1960, Ramiro assigned his leasehold rights jointly to himself and his married sister Helen. Vide deed of Assignment dated 22 nd August, 1975, Helen assigned her leasehold rights jointly to Patil-SR (ch) 3 of 29 WP 9108-21.doc Respondent No 2 and 3.
6. On 8th February, 1987, Respondent Nos.2 and 3 being desirous of developing the suit plot gave notice to the Respondent No.1-Society forwarding the sanctioned plans of the proposed building. Vide Agreement dated 8th February 1987 executed between Respondent No.1 and Respondent Nos.2 and 3, the Respondent No.1-Society permitted the Respondent Nos.2 and 3 to carry out the development. By a writing executed on 8th February 1987 by the Respondent No.4- developer, the Respondent No.4 recorded that the development shall be carried out in accordance with the terms and conditions laid down by the Respondent No.1-Society. Pursuant thereto, development was carried out in accordance with the sanctioned plans duly approved by the Respondent No.1-Society.
7. Vide communication dated 17th June 1987, the Petitioners sought permission from Respondent No.1-Society to acquire the premises in the new building, which was refused by Respondent No.1 vide dated 4th July 1987 as the same would amount to contravention of constitution of Respondent No.1-Society and its bye-laws restricting the user of premises for residential purposes of Roman Catholics. Despite the refusal, by agreement dated 29th August 1987 the Petitioner acquired on ownership basis the subject premises admeasuring 2000 sq ft built up area on the ground floor and 400 sq ft Patil-SR (ch) 4 of 29 WP 9108-21.doc built up area on the first floor. By communication dated 27 th November 1987, the Respondent No.1-Society called upon the Respondent Nos.2 and 3 to rectify the breach and restore status quo ante within period of three months failing which the Respondent No.1 will re-enter the plot and lease shall stand terminated upon expiry of the period of notice. There were subsequent exchange of correspondence between the Petitioner and Respondent No.1-Society.
8. Vide communication dated 6th March, 1990, final opportunity was given by the Respondent No.1 to the Respondent Nos.2 and 3 to rectify the breach within three months as per the Society's Bye-laws upon expiry of which the rights of Respondent Nos.2 and 3 were to come to an end and lease in respect of the subject plot and membership of Society to stand terminated. Respondent Nos. 2 and 3 responded to the said notice by reply dated 26th March, 1990 stating that they are ready and willing to co-operate with the Society and are not responsible for the situation.
9. On 9th October 1992, the Respondent No.1-Society filed R.A.E Suit No.9 of 1992 against the Respondent Nos.2 to 4 and the Petitioner seeking decree and order to handover vacant and peaceful possession of the suit plot. Vide order dated 4 th September 1996, the Small Causes Court returned the plaint for want of jurisdiction, as against which the appeal filed by the Respondent No.1 came to be dismissed Patil-SR (ch) 5 of 29 WP 9108-21.doc by the Appellate Bench vide judgment and order dated 9 th January, 1998.
10. On 30th March 1998, the Respondent No.1 filed Dispute before the Co-operative Court, Mumbai being Dispute No.365 of 1998. The Co- operative Court vide order dated 23 rd October 2019 partly allowed the Dispute and directed the Petitioner to handover possession of the ground floor and first floor premises to the Respondent No.1 Society. Being aggrieved, the Petitioner filed an appeal in the Co-operative Appellate Court being Appeal No.3 of 2020 which came to be dismissed by the impugned order dated 1st October 2021.
SUBMISSIONS:
11. Mr. Godbole learned Senior Advocate appearing for the Petitioner would submit that the members of Petitioner bank are Roman Catholics and therefore the requirement of Bye-Laws No 7 that members of Respondent No.1 shall be Roman Catholics is met. He submits that it cannot be disputed that there is violation of bye-laws and that despite permission being refused by Respondent No.1, the Petitioner had purchased the subject premises. He submits that the proceedings initiated before the Small Causes Court was returned for want of jurisdiction and the dispute came to be filed before the Co- operative Court seeking relief of handing over quiet, vacant and peaceful possession of suit property, i.e.,Plot No.57 and for mandatory Patil-SR (ch) 6 of 29 WP 9108-21.doc injunction to handover possession of the subject premises on the ground of breach of lease.
12. He would point out that the Trial Court has held that the Petitioner's possession is illegal but violation of condition by Petitioner would not give right to the Society to terminate the lease. He submits that the trial Court has declined to grant the relief of possession of the Plot No.57 and if the lease is determined, the decree of eviction of entire plot would follow. He submits that lease has not come to an end as there is no finding that lease has been determined. He submits that only relief which could be granted was to restore the residential use of the said structure in accordance with the bye-laws of Respondent No.1- Society. He would further point out that the Appellate Court upheld the findings on issue of jurisdiction and has held that as the breach of terms and conditions of bye-laws and lease-deed are proved, the relief of mandatory injunction is rightly granted. He submits that the Respondent No.1-Society is sub-classified as tenant ownership Society and is the lessor/owner of the land and not the owner of the superstructure as concept of dual ownership is recognised in India. He submits that the Dispute describes the suit premises as Plot No.57 and the Award passed is contrary to the relief prayed for in the Dispute. He would further submit that the only after obtaining declaration of lawful termination of lease-deed, the Respondent No.1-Society would Patil-SR (ch) 7 of 29 WP 9108-21.doc be entitled for a decree of physical possession. He submits that the decree as granted is inexecutable as the building will be required to be removed in execution and without impleading all the flat purchasers, the decree cannot be executed. He would further submit that the judgment dated 9th April, 2002 passed by the Appellate Court in A.O. No.37 of 2019 is only an interlocutory order and the issue of inherent lack of jurisdiction is open for adjudication. He submits that there is no privity of contract between the Petitioner and the Respondent No.1- Society and therefore the Co-operative Court could have only granted the relief of bringing the premises in conformity with the bye-laws. He would further submit that under Section 39 of the Specific Relief Act, 1963 as the breach has been accepted, the Court can mould the relief. He submits that the decree confers right of ownership on Respondent No.1 and amounts to creation of new contract between Respondent No.1 and Respondent Nos.3 and 4.
13. Per Contra Mr. Anturkar, learned Senior Advocate appearing for the Respondent No.1 would submit that the doctrine of dual ownership is accepted in India which is the legal relationship during the continuance of the lease and the real question is about the effect on this relationship after the termination of the lease. He submits that after determination of tenancy, the parties have to fall back on the terms of contract in view of Section 108(1)(h) of the Transfer of Patil-SR (ch) 8 of 29 WP 9108-21.doc Property Act, 1882, which is the settled position as held by Apex Court in the case of Dr. K. A. Dharyawan v. J. R. Thakur 1, this Court in Laxmipat Singhania v. Larsen and Toubro2 and by the Calcutta High Court in Ballygunge Bank Ltd. v. Commissioner of Income Tax 3
14. He tenders comparative chart of Clauses contained in the lease agreements as appearing in the above judgments and the clauses in the instant lease, which according to him are identical, and would submit that the parties had agreed that after the determination of lease, the right of lessee even in respect of the superstructure would come to an end and stand yielded to the lessor. He would further submit that as per the accepted contractual position it cannot be accepted that even after determination of lease, the lessee will continue to be the owner of property. He would submit that the mandatory injunction being restricted to the Petitioner's premises and not the entire super structure cannot be faulted as other occupants are not party to the suit. He submits that once the lease has been determined and is not challenged, the consequence contemplated by the agreement is that the superstructure would stand yielded to the lessor. He submits that as there was no challenge to the termination of lease, there is no finding on aspect of termination of lease. 1 1958 SCC Online SC 39 2 1949 SCC OnLine Bom 11 3 AIR 1947 Cal 159.
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15. Mr. Anturkar would further take this Court through the Clauses in lease-deed and would submit that what was demised was the plot of land along with the dwelling house and outbuildings erected thereon. He would further point out that the lessee had covenanted to keep the demised plot and premises and all buildings and improvements and all additions thereon etc., in good condition and all of which were included in the expression "demised premises". He would further point out Clause 2(20) of the Lease deed which provides that at the end or sooner determination of the term, lessee shall peaceably and quietly yield up and deliver the demised premises to the lessor with all additions and improvements.
16. In rejoinder, Mr. Godbole would contend that the lessor had covenanted that where the lease has been determined by notice under proviso contained Clause 4(1) and (2), the lessor shall pay to the lessee the value of lessee's interest in the demised plot and premises and therefore the same cannot be handed over free of cost to the Respondent No.1-Society. Pointing out to the termination notice, he submits that the notice has been issued under proviso contained in Clause 4 and not under sub-clause (17) of clause 2 of the lease-deed and therefore the value has to be determined and the same cannot be given free of cost to the Respondent No.1-Society.
17. In sur-rejoinder Mr. Anturkar would submit Clause 3(2) provides Patil-SR (ch) 10 of 29 WP 9108-21.doc that in case of breach of Clause 2(17) requirement of making payment of value of lessees interest is completely excepted and that in this case termination was for breach of Clause 2(17).
REASONS AND ANALYSIS:
18. The core issue presented for consideration is whether the superstructure constructed on the leased plot stood yielded to the Respondent No.1-Society, which entitled the Respondent No.1 to the relief of recovery of possession of the Petitioner's premises.
19. As a prelude to the above issue, it will firstly have to be determined whether the lease-deed executed by the Respondent No.1 in favour of Respondent Nos.2 and 3 was in respect of land i.e. Plot No.57 or was a lease of plot along with the proposed construction on the said land.
20. Lease is defined under Section 105 of Transfer of Property Act, 1882 [for short "TP Act"] as transfer of right to enjoy the property. It is question of construction of lease whether lease is demise of land only or demise of land together with the building to be constructed by the lessee which has to be gathered from reading of the lease-deed as a whole. The lease-deed was executed by the Respondent No.1 and Ramiro on 25th February, 1958. As per the recital in the lease-deed, the lessee agreed to take from the Society, a lease of Plot No.57 in Society's Estate Plan No.1 admeasuring 745 square yards and more Patil-SR (ch) 11 of 29 WP 9108-21.doc particularly described in the Schedule thereunder. The Schedule to the Lease deed reads thus:
"THE SCHEDULE REFERRED TO ABOVE All that piece or parcel of land or ground situated at Chapel Road Bandra and in the Chapel Road Scheme No.VIII in Greater Bombay South Salsette Taluka Bombay Suburban District Registration Sub-District Bandra Registration District Bombay Suburban admeasuring 745 square yards or thereabouts bearing Plot No.57 in the Society's Estate Plan No.1 City Survey No.B330 which piece of land has been delineated in the plan and bounded.
on the North by Plot no 55 on the East by Plot No 58 on the South by Public Road on the West by Plot No 56."
21. The Lease Deed notes that lessee had erected a structure on the said plot. The Habendum Clause of the Lease Deed provides that the lessor hereby demises unto the lessees all that plot of land bearing Plot No.57 together with the dwelling house and outbuildings erected thereon and to hold the said premises referred to as "the demised plot" from 25th April, 1958 for term of 998 years.
22. Some of the relevant covenants of the Lessee contained in Clause 2 of the lease-deed read thus :
"(5) To well and substantially repair cleanse maintain uphold support amend and keep demised plot and premises and all buildings and improvements which may at any time be thereon and all additions thereto and the boundary walls hedges and fences and gates thereof and drains sewers and other pipes and sanitary and water apparatus thereof (all of which hereinafter included in the expression "the demisted premises") in good substantial condition and brick work property pointed.".
"(6) To use the demised plot and premises for the purpose of Patil-SR (ch) 12 of 29 WP 9108-21.doc private residence only and not without the license in writing of the lessor first had and obtained to do or permit any trade or business in any building or upon any part of the demised plot and premises."
"(9) To keep the compound and open spaces of the demised plot in a clean and sanitary condition allow the same to be overgrown with weeds and rank vegetation and to keep the hedges and fences in neat and proper order and repair to the satisfaction of the Lessor."
"(10) At the end or sooner determination of the terms hereby created peaceably and quietly to yield up and deliver the demised plot and premises to the Lessor with all additions and improvements thereof."
23. Mr. Anturkar would place reliance on Clause (5) of the lease-deed to emphasis that the lessee covenanted to maintain "the demised premises" which will include all buildings and improvements. However, the covenant cannot be read in isolation. Perusal of various covenants of the lessee indicates the use of expressions "demised plot", "the demised premises" and "demised plot and premises". The lease-deed uses these different expressions at different places, and there is no clause which positively asserts that the proposed structure to be constructed on the land is also subject matter of demise. When the recital in the lease-deed is read with the Schedule to the Lease-Deed, it is clear that demise was only of the Plot No.57. The Schedule to the lease-deed gives the particulars of the land without any reference to the proposed construction or any structure thereon. The superstructure was not in existence when the lease was executed and Patil-SR (ch) 13 of 29 WP 9108-21.doc has thereafter been constructed by the Lessee through the Developer. Upon holistic reading of the various clauses of the lease deed, it is evident that the intention of the parties was to create demise only of land i.e. Plot No.57. The sub classification of Respondent No.1 as Tenant Ownership Society lends credence to the position that the land is owned by the Society and superstructures are owned by the members. Bye-laws 8A(1) grants liberty to the Society to grant leases to its members of plots in form "A" and the lease-deed in the present case is executed in Form "A".
24. As the lease was only in respect of Plot No.57, the lessee would have the right over the superstructure constructed upon the said plot. The Respondent No.1-Society was conscious of the fact that the demise was only of land as the prescribed Form "A" provided for lessee's covenant to deliver the demised plot and premises to the lessor upon determination of lease. It is undisputed that concept of dual ownership is recognised in India and to support the impugned judgment, Mr. Anturkar would contend that whatever the status might be during the subsistence of lease, upon determination of lease, it is only the terms of contract which will prevail. It is this contention which will have to be tested in present case.
25. In this context, Section 108 of TP Act governs the rights and liabilities of the lessor and lessee in the absence of a contract or local Patil-SR (ch) 14 of 29 WP 9108-21.doc usage to the contrary and relevant for our purpose is Clause (h) which reads thus :
"(h) the lessee may even after the determination of the lease remove, at any time whilst he is in possession of the property leased and not afterwards all things which he has attached to the earth; provided he leaves the property in the state in which he received it"
26. The provisions of Section 108(h) of TP Act came up for consideration before the the Apex Court in Dr.K.A. Dhairyawan v. J.R Thakur (supra). The Apex Court recognizing the concept of dual ownership held that Section 108(h) of TP Act does not prohibit the lessee from contracting to hand over the building erected on the land by them to the lessors without receiving any compensation. In the facts of that case, the Apex Court further held that although under Section 108 of TP Act the lessee had the right to remove the building and by contract, they had agreed to hand over the same to the lessors without the right to receive compensation at the end of lease, the matter being entirely one of contract between the parties and such a contract, however, did not transfer the ownership in the building to the lessors while the lease subsisted.
27. The decision of this Court in Laxmipat Singhania v. Larsen and Toubro (supra) and the Calcutta High Court in Ballygunge Bank Ltd. v. Commissioner of Income Tax (supra) reiterated the position after considering various clauses of the lease agreements in the respective Patil-SR (ch) 15 of 29 WP 9108-21.doc cases. Mr. Anturkar has tendered a comparative chart of the various clauses of the lease deed in the above referred judgments and of the lease deed in instant case and would submit that identical clauses are found in the instant case and that the terms of the contract will govern the ownership of the structure upon determination of the lease.
28. From the judicial pronouncements, the settled legal position is that under Section 108(h) of the TP Act, a right is given to the lessee to remove the structures erected by him on the leased land subject to a contract to the contrary. The ownership in the superstructure continues in the lessee during the subsistence of the lease under the well recognised concept of dual ownership and in event the contract restricts the lessee from exercising the right granted by Section 108(h) of TOPA, the ownership will pass to the lessors.
29. In the present case, the agreement pertaining to determination of lease is contained in Clause 3 and 4 which reads thus:
"3. The Lessor hereby covenants with the Lessee as follows :
(1) That the Lessee paying the rents hereby reserved and observing and complying with the by-laws and Rules and Regulations for the time being and from time to time in force of the Society and observing and performing the several covenants and stipulations herein on his part contained shall peaceably hold and enjoy the demised plot and premises during the said term without any lawful interruption by Lessor or any person rightfully claiming through under or in trust for the Society.
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(2) That in the event of this Lease being determined
by the lessor by notice under the proviso contained in clause 4(1) or 4(2) hereof (except for a breach of clause 2(17) hereof to pay to the lessee the value of the lessee's interest in the demised plot and premises at the date of the said notice such value to be determined by a valuer to be appointed by the Registrar of Co-operative Societies appointed under the co-operative societies Act. or by a valuer appointed as aforesaid and by the representatives appointed by the Lessor and the Lessees the opinion of the majority in respect of the valuation to prevail.
4. PROVIDED ALWAYS and it is expressly agreed as follows :
(1) That if the society shall in accordance with the by-
laws of the society for the time being in force pass a resolution expelling the Lessee from the society or in the event of the demised plot and premises being occupied by or vested in any person who is not a member of the society or his heir or legal representative or the nominee of the member under by-laws of the society the Lessor may at any time thereafter by giving to the Lessee three calendar months' previous notice in writing to that effect determine the term hereby granted then on the expiration of such notice this present lease and everything herein contained shall cease and be absolutely void to all intents and purposes whatsoever but without prejudice to any claim by the Lessor for any arrears of rent or in respect of any breach non-observance or non-performance of any covenant or condition herein contained.
(2) If the rents hereby reserved or any part thereof shall be unpaid for one month after becoming payable (whether formally demanded or not) or if any covenant on the Lessees, part herein contained shall not be performed or, observed then and in any of the said cases it shall be lawful for the Lessor at any time thereafter to give to the Lessee three calendar months' notice requiring the Lessees to remedy the same and that on the expiration or such notice unless the same shall be complied with enter into and upon the demised plot and premises or any part thereof in the name of the whole to re-enter and the same to hold repossess and enjoy as if these presents had never been granted without prejudice to the right of action of the Patil-SR (ch) 17 of 29 WP 9108-21.doc Lessor in respect of any breach of the Lessees covenants herein contained.
(3) Any notice requiring to be served or requirement or demand to be made hereunder shall be sufficiently served or made on the Lessee a as appearing in the Registration Books of the Society and although only addressed to the lessees and affixed to or left on the demised plot or premises or left at or sent by registered post to the last known address of the Lessees or his authorised agent. (4) That in case of any dispute or difference of opinion between the Lessor and the Lessee with reference to the provisions of any of the terms conditions or clauses of the agreement the same shall be settled by reference to arbitration in the manner prescribed in the rules under the Co-operative Societies Act."
30. Clause 3(2) which provides for payment by lessor the value of the lessee's interest in the demised plot and premises in event of lease being determined by lessor by notice under the proviso of Clause 4(1) and (2) excepts the cases where the lease is determined for breach of Clause 2(17) which reads thus:
"2(17) At all times to observe and abide by and be bound by the rules regulations and by-laws for the time being of the Lessor and to carry out the instructions and directions of the Committee of the Society."
31. The lease came to be terminated by notice dated 6 th March, 1990. The notice specifically states that the Respondent Nos 2 and 3 have committed breach of the convenants contained in the Agreement dated 8th February, 1987, which includes the covenant to abide by the rules, regulations and bye-laws of the Respondent No.1-Society. The Patil-SR (ch) 18 of 29 WP 9108-21.doc cause of termination is non observance of the Bye-Laws covered by Clause 2(17). Clause 3(2) carves out a specific exception where there is breach of Clause 2(17), in which event, the condition of acquiring the lessee's interest upon payment of compensation upon termination is not applicable. The notice called upon the Respondent Nos.2 to 4 to remedy the situation within 2 weeks failing which the notice to be treated as 3 calendar months notice upon the expiry of which the lease of the said plot and the membership of the Society to stand terminated. By the said notice, Respondent Nos.2 to 4 were called upon to handover quiet, vacant and peaceful possession of suit plot to the lessor. Digressing a little, to support the earlier discussion about demise of plot of land, the said notice makes it that the Respondent No.1-Society also construed the lease as demise of only the plot and not the superstructure which was standing on the said plot.
32. There is no dispute about the fact that Petitioner had purchased the subject premises in violation of the bye-laws of Respondent No.1 which restricted the user only to residential use by Roman Catholics and admittedly there is breach entitling Respondent No.1-Society to terminate the lease, which the Respondent No.1 has terminated and Clause 2(20) of the Lease Deed reads as under:
"2(20) At the end or sooner determination of the term hereby created peaceably and quietly to yield up and deliver the demised plot and premises to the Lessor with all additions and Patil-SR (ch) 19 of 29 WP 9108-21.doc improvements thereof."
33. Clause 2(20) sets out that the agreement between the parties was to deliver the demised plot and premises to the Lessors with all improvements at the determination of the term. The above term constitute an agreement which restricts the lessee from exercising the right granted under Section 108(h) of TP Act.
34. Despite the term of the contract providing for the superstructure to be yielded and delivered to the lessor upon termination, the obstacle in the way of the Respondent No.1 to obtain recovery of possession of the Petitioner's premises are the findings of the Trial Court and Appellate Court which hold that the Respondent No. 1 is not entitled to terminate the lease on account of violation by the Petitioner.
35. The Dispute filed by the Respondent No.1 seeks a direction to the Opponents to hand over quiet, vacant and peaceful possession of the suit property namely Plot No.57, Rebello Road, Bandra, Bombay 400 050 and mandatory injunction directing the Opponents to hand over possession of the Petitioner's premises. The Opponents were the original lessees, the Petitioner and the developer. Neither the co- operative Society in which the Petitioner premises were situated was impleaded or the other members of the building. The Trial Court Patil-SR (ch) 20 of 29 WP 9108-21.doc framed the issue of entitlement of Respondent No.1 to vacant possession of suit property namely Plot No.57 and negated the issue by holding as under:
"18. I am conscious to the said fact that, opponent no 4 directly dealt with the disputant. The disputant have rejected its application. Their exchange of letter is available on record. In that circumstances, violation of condition of the Lease Agreement or bye laws by the Opponent No.1 and 2 does not arise. Moreover upon violation of condition by opponent no 4 itself would not give right to the disputant society to terminate the lease. Moreover, one thing which I have noted that , in that event when the disputant society claiming possession of plot bearing no 57 it includes the entire structure of building and other society members have not been made parties to the present dispute. In that event, when the disputant society claiming possession of the entire plot then all members became necessary and proper parties to the present dispute. Opponent No.1 and 2 are not representing all the members of the disputant society. Therefore the relief claimed by the disputant regarding recovery of vacant possession of plot no 57 is not maintainable and finally the disputant society is not entitled for its. Hence I answer issue no 3 in the negative."
36. By holding that there is no violation by the original lesses which will give right to the Respondent No.1-Society to terminate the lease, the trial Court held that the lease subsists. If the lease subsists, the consequence is that the Lessee continues to remain the owner of the superstructure. Even accepting the submission of Mr. Anturkar, the terms of the contract would vest ownership of the superstructure in the Respondent No.1 post termination of lease. Having arrived at a finding that the lease-deed did not stand terminated, the Trial Court was disabled from granting the relief of mandatory injunction qua the Petitioner's premises. In the absence of grant of larger relief as against Patil-SR (ch) 21 of 29 WP 9108-21.doc the Respondent Nos.1 and 2, which would necessarily be founded on the ground of termination of lease, no mandatory injunction as regards the Petitioner's premises could be granted even on the ground of violation of the bye-laws by the Petitioner.
37. Although the Trial Court has supported the refusal of the prayer clause (a) on the additional ground of non joinder of all the members of the building, the decline was primarily on the premise that violation by the Petitioner is not violation by the Respondent No.1 and 2, i.e. the lessees and there could be no termination of lease.
38. The Appellate Court rejected the submission of the Respondent No.1 challenging the decline of relief against Respondent Nos 2 and 3 by observing that the Respondent No.1 has not challenged the finding of Trial Court by filing cross objection. Despite the specific finding of Appellate Court, there was no challenge by the Respondent No.1 and the finding of Trial Court has attained finality.
39. The submission of Mr. Godbole that the mandatory injunction should have been confined to direction to bring the user of the premises in consonance with the Bye-laws finds support in the observations of the Appellate Court in paragraph 23, where the Appellate Court has observed that if permission was rejected, instead of handing over possession or selling the premises to Roman Catholics, the Bank is coming with the case of running the banking business since Patil-SR (ch) 22 of 29 WP 9108-21.doc last 40 years.
40. Dealing with the challenge to the jurisdiction of Co-operative Court, the suit was originally filed before the Small Causes Court which was returned vide order dated 14th September, 1996 for presentation to the proper Court as against which the Appellate Court dismissed the Appeal. Thereafter the Dispute was filed before the Co-operative Court in which preliminary issue of jurisdiction was raised and decided against the Petitioner by the Co-operative Court against which the Appeal filed before the Appellate Court came to be rejected. It, however, cannot be disputed that if the Court lacks the inherent jurisdiction over the subject matter, the decree would be a nullity.
41. It will be profitable to refer to Section 91 of the Maharashtra Co- operative Societies Act, 1960 (MCS Act), which reads 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 conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, to the co-operative Court if both the parties thereto are one or other of the following:--
(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society or the official Assignee of a deregistered society.
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(b) a member, past member of a person claiming
through a member, past member of a deceased member of society, or a society which is a member of the society or a person who claims to be a member of the society;
(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) 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 restrictions have been prescribed under section 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 deregistered 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, or refusal of admission to membership by a society to any person qualified therefor, or any proceeding for the recovery of the amount as arrear of land revenue on a certificate granted by the Registrar under sub-section (1) or (2) of section 101 or 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 under section 152 or 152A and revision under section 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) to section 93, no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1)."
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42. Plain reading of Section 91 of the MCS Act would indicate that Sub-Section (1) of Section 91 is prefaced with non obstante clause and provides that a specified class of disputes arising between specified class of parties can only be referred by any of the parties to the dispute to Co-operative Court. What is therefore necessary is that the subject matter of lis and the parties to the lis must fall within the enumerated class under Section 91 of the MCS Act. As far as the parties to the lis is concerned, the bye-laws of Respondent No.1 makes it clear that for lease to be executed in respect of the plot owned by the Society, the person is required to be member of the Society and the Petitioner claims through the member. The parties to the lis are therefore of the class enumerated in Section 91 of MCS Act.
43. As far as subject matter of the Dispute is concerned, Section 91 encompasses five kinds of disputes:
(a) Dispute touching the Constitution of the Society.
(b) Dispute touching the elections of the committee or its officers.
(c) Dispute touching the conduct of general meetings of the Society.
(d) Dispute touching the management of the Society and
(e) Dispute touching the business of the Society.
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44. The jurisdictional paragraph in the Dispute is that the Respondent No.2 and 3 are members of the Respondent No.1 and the business of the Respondent No.1 as per its bye-laws is to lease and develop plots of land and the suit property was leased as members of the Respondent No.1 and the Dispute is filed inter alia seeking recovery of possession of Petitioner's premises.
45. The object of the Respondent No.1 Society is as under:
"2. The objects of the Society shall be to carry on the trade of building, and of buying, selling, hiring, letting and developing land in accordance with co-operative principles and to establish and carry on social, recreative and educational work in connection with its tenants and the Society shall have full power to do all things it deems necessary or expedient for the accomplishment of all objects specified in its rules, including the powers to purchase, hold, sell, exchange mortgage, rent, lease, sub-lease, surrender, accept surrenders of and deal with lands, and houses of any tenure and to sell by installments and subject to any terms or conditions and to make and guarantee advances to Members for building or purchasing property and to erect, pull down, repair alter or otherwise deal with any building thereon."
46. In Deccan Merchants Co-operative Bank Ltd vs Dalichand Jugraj Jain4, one the question being considered by the Apex Court was the meaning of the expression "touching the business of the Society"
and it was held as under:
"In this sub-section the word "business" has been used in a narrower sense and it means the actual trading or commercial or other similar business activity of the society which the society is authorised to enter into under the Act and the Rules and its bye-laws. The question arises whether the dispute 4 1968 SCC OnLine SC 10.
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touching the assets of a society would be a dispute touching the business of a society. This would depend on the nature of the society and the rules and bye-laws governing it. Ordinarily, if a society owns buildings and lets out parts of buildings which it does not require for its own purpose it cannot be said that letting out of those parts is a part of the business of the society. But it may be that it is the business of a society to construct and buy houses and let them out to its members. In that case letting out property may be part of its business. In this case, the society is a co-operative bank and ordinarily a co-operative bank cannot be said to be engaged in business when it lets out properties owned by it. There fore, it seems to us that the present dispute between a tenant of a member of the bank in a building, which has subsequently been acquired by the bank, cannot be said to be a dispute touching the business of the bank, and the appeal should fail on this short ground.
[Emphasis supplied]
47. The relief sought in the Dispute was recovery of possession of Plot No.57 and the Petitioner's premises on the ground that that the lease has been terminated for breach of the Bye-laws and therefore the property yields to the the Respondent No.1-Society in accordance with the lease agreement. The business of the Society as evident from the object of the Society is to carry on the trade of building and of buying, selling, hiring, letting and developing land and for achieving the object to purchase, hold, rent, lease, sub-lease and deal with lands and houses of any tenures. That being the business of the Society, the dispute relating to the recovery of the asset of the Society albeit after termination, is a dispute touching the business of the Society.
48. It is well settled that the Co-operative Court established under the MCS Act is a substitute for Civil Court and the jurisdiction of the Co-
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operative Court will not go beyond the jurisdiction vested in the Civil Court. The Respondent No.1 has come with a case of violation by a member of the bye-laws adopted by the Society by virtue of which lease was granted to the member. The scheme of bye laws does not set out relationship of landlord and tenant. The entire agreement is between a Society and its member. It is the business of the Society to ensure compliance with the regulations and bye-laws framed by it. A claim by the Society for recovering possession of the premises from its member upon determination of lease by reason of violation of its bye- laws is a dispute falling within the purview of Section 91 of MCS Act and the Co-operative Court would have the jurisdiction to decide the dispute.
CONCLUSION:
49. The grant of mandatory injunction qua the Petitioner's premises would be the consequence of the termination of lease in view of Clause 2(20) of the Lease Deed dated 25 th February, 1958. In view of the specific finding of the Trial Court that the violation of condition by the Petitioner would not give right to the Respondent No.1 to terminate the lease and the resultant decline of relief of recovery of Plot No.57, the well recognised doctrine of dual ownership would prohibit the grant of mandatory injunction qua the Petitioner's premises. The Respondent No.1 was thus not entitled to recovery of Patil-SR (ch) 28 of 29 WP 9108-21.doc possession of the Petitioner's premises.
50. Resultantly, the Petition succeeds. The impugned Judgment and Orders dated 23rd October, 2019 passed by the Co-operative Court in Dispute No.CC/I/365/1998 and judgment and order dated 1 st October, 2021 passed by the Maharashtra State Co-operative Appellate Court in Appeal No.3 of 2020 are hereby quashed and set aside. Rule is made absolute.
[Sharmila U. Deshmukh, J.]
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Signed by: Sachin R. Patil
Designation: PS To Honourable Judge
Date: 04/12/2024 18:11:29