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4. In keeping with the resolution mentioned in the preceding paragraph, a dispute was lodged and eventually referred to a Nominee of the Registrar. The contention raised by the disputants Mahtani and the society, was, that the licence in favour of the opponents stood terminated and that their continued occupation of the flat was wrong and illegal. The opponents questioned the jurisdiction of the Nominee, pleading that Section 91 of the MCS Act did not apply, inasmuchas they were tenants against whom proceedings could be initiated only in the Court specified under Section 28 of the Rent Act. The learned Nominee raised appropriate issues, recorded evidence of witnesses examined by the rivals and passed an award. That award went in favour of the disputants and the same was the subject of a challenge before the single Judge. That learned Judge held that the Nominee's award was without jurisdiction as the dispute raised did not attract Section 91 of the MCS Act. The transaction between the parties had preceded the formation of the society and therefore it could not be said that the dispute related to "the business of the society". Sustaining this submission, the learned Judge upheld reliance placed upon the judgments of the Supreme Court in I.R. Hingorani v. Pravinchandra Kantilal Shah [1972] A.I.R. S.C. 2161 and Deccan Merchants Co-operative Bank Ltd. v. Dallchand Jugraj Jain [1969] A.I.R. S.C. 1320.

5. In appeal, it is contended that the disputant society was a tenants-copartnership society, that it had a right and obligation to see that its members occupied the flats allotted to them and that strangers did not continue in occupation. The single Judge had over looked the incompatibility of the claim of tenancy by a stranger vis-a-vis the premises situated in property owned by a co-operative Housing Society. In support of this contention, reliance is placed on a number of decisions. Before dealing with these reported decisions, it will be necessary to repeat the vital facts: The leave and licence agreement whereunder the respondents before us came on the premises, preceded the formation of the Co-operative Housing Society. The contention that the formation of the society was in progress and that in any case the leave and licence agreement specifically made the occupation of the licensees subject to the rights of the Society, would not affect the rights and liabilities of the contracting parties. Taken to its logical conclusion, Clause 2(k) from the leave and licence agreement can be stretched no further than holding that the parties were trying to keep the agreement beyond the reach of the Rent Act. It is trite that contracting out of a statute is not permitted and that clauses in contracts enabling such exclusion, are void and not binding upon the affected parties. Incidentally, the clause upon which reliance is placed has to be so read as to impute to parties a desire to stay within the confines of the law. So construed, it will have to be read down as governing only the manner of the flat's user and making the same subject to the mode of user to be prescribed by the society in the offing as also the regulations of the builder. Normally, a transaction which precedes another, prevails over the latter. To apply this principle to the facts of the present case, the leave and licence agreement being prior in point of time, would prevail over any such restrictions as were placed upon the owners of the flats and not affect the rights of the occupants, which rights had sprung up prior to the coming into existence of the society. The owner having created a leave and licence in favour of the licensees had parted with some rights normally vesting in an unencumbered titleholder. He could not therefore confer upon the society an unfettered right which did not vest in him after the coming into existence of the leave and licence agreement. The society could not get a right which did not vest in the owner, who along with others had joined hands to create this society. This principle was laid down by the Supreme Court in Hingorani's case (supra). The factual position in that case was that the first respondent before their Lordships was the owner of a flat in dispute. He had entered into a leave and licence agreement with the appellant-occupant on April 24, 1959. The appellant occupied the flat in 1959 and in 1962 the building of which the flat was a part, came to be managed by a co-operative Society known as the New Shalimar Co-operative Housing Society Ltd. On January 26, 1962, the owner became a member of the said society. In March 1963 the appellant filed an application for fixation of standard rent under Section 11 of the Rent Act before the Small Causes Court at Bombay. Respondent No. 1 denied the existence of a relationship of landlord and tenant between him and the appellant and contended that the question raised in the lis pertained to "the business of the society". For that reason, the Small Causes Court had no jurisdiction and the matter had to go to the Registrar of Co-operative Societies under Section 91 of the MCS Act. Respondent No. 1 moved the Registrar under Section 91 and that Officer referred the dispute that had arisen to his Nominee. The said Nominee whose jurisdiction was questioned by the appellant overruled the objection as to jurisdiction. This was confirmed in appeal by the Assistant Registrar and in a writ petition by the High Court. The appellant after obtaining a certificate moved the Supreme Court. The Court found in appellant's favour and paras 3 and 4 of the judgment contain the following relevant excerpts:

The agreement was entered into between appellant and respondent No. 1 earlier. Respondent No. 1 was not a member of the society at that time. In fact the society was not even in existence on that date. That being the case we have to consider whether the present dispute can be said to fall within the scope of Section 91 of the Act In Deccan Merchants Co-operative Bank Ltd...this Court came to the conclusion that it did not fall within the scope of that section. Therein this Court ruled that before a person can be said to claim through a member, the claim should arise through a transaction or dealing which the member entered into with the society as a member. This Court further laid down that when the original owner executed the lease he was not acting as a member but as a mortgagor in possession. Hence the case did not fall within Section 91(1)(b) of the MCS Act. The ratio of that case fully applies to the present case.

6. Mr. Advani contends that the timing of the transaction between the tenant-member and the person inducted into the premises, is not enough to exclude the jurisdiction of the Registrar's Nominee. What turns the scales, is the nature of the society and its business. If the society is a tenants co-partnership society its members are no more than member-tenants. The premises vest in the society and that entity has an uncontrolled right to see that its premises are occupied only by member-tenants and not by strangers. Occupation of such a society's premises by strangers, and, a licensee whose licence has been revoked is no better than a stranger, affects the business of the society and therefore it has a right to move the Registrar under Section 91 of the MCS Act. This, according to the learned Counsel was emphasised in Deccan Merchants Co-operative Bank case (supra). Great emphasis has been placed by Mr. Advani upon the following words appearing in that decision: