JUDGMENT

KANIA, J.:—Leave granted. Counsel heard.

2. This is an appeal from the judgment of a learned single Judge of the Bombay High Court dismissing Writ Petition No. 6058 of 1986 filed by the appellant on the Appellate Side of that Court. The appellant and respondent No. 1 are companies incorporated under the Indian Companies Act. Respondent No. 2 is a Co-operative Society registered under the Maharashtra Co-operative Societies Act, 1961 (hereinafter referred to as the said Act"). Appellant is a member of respondent No. 2-Co-operative Society and has its office premises in the building owned by respondent No.2. Some time prior to September 10, 1985 the appellant entered into an agreement to sell the said office premises to respondent No. 1 subject to the approval of respondent No. 2. The terms of the said agreement were incorporated in a letter dated September 10, 1985 addressed by the appellant to the Vice-Chairman and the President of respondent No. 1. It was set out in the said letter that the price for the said premises was to be calculated at the rate of Rs. 2,000 per square feet. The letter further stated :

"We are agreeable to sell you the same subject to approval of the Co-operative Society owning the building.

We shall provide you vacant possession and hand over the same free of all incumbrances only after we are able to obtain alternate accommodation for our cornpany........."

3. A sum of Rs. 50,000 was paid by a demand draft by respondent No. 1 to the appellant under the said agreement. By a letter dated November 15, 1985 the appellant sought the approval of respondent No. 2 to the transfer of the said office premises to respondent No. 1. By its letter dated November 18, 1985 addressed to the appellant, respondent No.2 stated that the appellant was requested to offer to transfer of the said premises to the existing member of the society as a first preference as per the established practice of the society. It further stated that in case the existing members of respondent No. 2 were not willing to buy the said premises, the premises could be given for transfer to an outside transferee. By its letter dated November 22, 1985, addressed to respondent No. 1 the appellant pointed out that respondent No. 2 had declined to grant permission for transfer unless the premises were first offered to the existing members of the society by way of a first preference. The said letter then stated that it was not possible to continue negotiations any further. Along with the said letter the demand draft ;of Rs. 50,000 referred to above was returned by the appellant. Without any further correspondence, respondent No. 1 filed a dispute in the Co-operative Court No. 1, Bombay against the appellant and respondent No. 1 (2?) by statement of claim which can be conveniently referred to as a plaint.

4. In the plaint respondent No. 1 inter alia stated that on the promises and representations made by the appellant to respondent No. 1 it had paid a sum of Rs. 2,60,000 to one I.M. Choksey representing himself as the Chairman of the appellant and one S. Ramakrishnan, claiming to be the representative of his wife who was a Director of the appellant. Respondent No. 1 further claimed that it had paid a further sum of Rs. 40,000 in cash to the appellant without taking a receipt. Respondent No. 1 urged that but for the assurance given by Choksey and Ramakrishnan acting on behalf of the appellant and one Col. G. D. Hadep, acting on behalf of respondent No. 2 that the appellant would be in a position to transfer the said premises by the end of November 1985 and respondent No. 2 would not object to such transfer, respondent No. 1 would not have paid such a huge amount to the appellant. Respondent No. 1 further stated that the appellant and respondent No,. 2 had promised respondent No. 1 that they would complete the formalities of transfer of the said premises within a few days and there would be no objection or obstruction whatever in the said transfer. Respon