1. Dispute between a housing society and its member regarding induction of tenants by the member in a tenant co-partnership society. (Para 2 )
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2007 Supreme(SC) 1458
Supreme Court Of India
ANITA ENTERPRISES - Appellant
Versus
BELFER COOP.HOUSING SOCIETY LTD. - Respondent
Civil Appeal 2995 Of 2005
Decided On : 11/14/2007
.
A member of a tenant co-partnership housing society is not a 'tenant' under the Rent Act. Transfers to non-members violate the mandatory provisions of Section 29(2) of the Societies Act, making such tenancies voidable and the resulting disputes maintainable before the Cooperative Court under Section 91.
Headnote:(A) Maharashtra Cooperative Societies Act, 1960 - Sections 29(2), 47, 91 - Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Sections 5(11), 28 - Member of a tenant co-partnership housing society - Status of member is not that of a 'tenant' within the meaning of Section 5(11) of the Rent Act, as such a member has more than a mere right to occupy and enjoys rights nearly equivalent to an owner after full payment of the tenement value (Paras 24, 25 and 28) - Consequently, no relationship of landlord and tenant exists between the society and its member (Para 28).
(B) Societies Act - Section 29(2) - Restrictions on transfer - The provision requiring a transfer of interest to be made to a member or a person whose application for membership has been accepted is mandatory (Para 30) - Induction of non-members in contravention of this section renders the transaction voidable (Para 33) - As the relationship of landlord and tenant was not 'duly created' in accordance with law, the occupants are not entitled to claim protection under the Rent Act, and the bar under Section 28 of the Rent Act does not operate (Para 33).
(C) Societies Act - Section 91 - Jurisdiction of Cooperative Court - A dispute regarding the illegal transfer of possession by a member in favour of a non-member touches the 'business' of the society (Paras 36 and 37) - The Cooperative Court is competent to adjudicate the legality of such creation of tenancy rights without the society having to obtain a prior declaratory decree from a civil court (Paras 35 and 38).
Facts of the case:
A member of a tenant co-partnership housing society inducted third parties into allotted premises on rent without the society's consent. The society initiated eviction proceedings before the Cooperative Court, alleging illegal parting with possession of the premises. Simultaneously, the third parties filed suits for declaration of tenancy and perpetual injunction before the Small Causes Court.
Findings of Court:
The court found that a member of a tenant co-partnership housing society is not a tenant under the Rent Act. The induction of non-members in violation of the mandatory provisions of Section 29(2) of the Societies Act rendered the tenancy voidable. Therefore, the third parties could not claim protection under the Rent Act, and the Cooperative Court's order of eviction was valid.
Issues: Whether a member of a tenant co-partnership housing society is a tenant under the Rent Act; whether Section 29(2) of the Societies Act is mandatory regarding transfers of interest; and whether the Cooperative Court has jurisdiction under Section 91 to decide the legality of tenancy created in breach of the Societies Act.
Ratio Decidendi: Members of tenant co-partnership societies hold a status higher than that of a tenant under the Rent Act. Section 29(2) of the Societies Act is mandatory to fulfill the object of self-occupation; any transfer in breach of this is voidable and not 'duly created'. Such disputes touch upon the business of the society and are maintainable before the Cooperative Court under Section 91, which provides an expeditious remedy over civil courts.
Result: Appeals dismissed.
Judgement Key Points
Key Points: - [1000422380027] - [1000422380034] - [1000422380035] - [1000422380036] - [1000422380037] - [1000422380038]
What is the status of a member in a tenant co-partnership housing society: is the member a tenant or landlord under the Rent Act?
What is the validity and effect of a member transferring tenancy rights to non-members in violation of Section 29(2) of the Maharashtra Societies Act?
Can disputes regarding the legality of creation of a tenancy or transfer by a member be adjudicated under Section 91 of the Societies Act, or must a separate civil suit be filed first?
Legal Category Hierarchy
- property law
- statutory interpretation
- practice and procedure
- rent control
Table of Contents
2. Whether the member's status was that of a tenant and whether the inducted persons could claim protection under the Rent Act. (Para 7 , 8 )
3. A member of a tenant co-partnership society has a right higher than a tenant; the relationship of landlord and tenant does not exist between the society and the member. (Para 24 , 25 , 26 , 27 , 28 )
4. A transfer of interest by a member in violation of the mandatory provisions of Section 29(2) of the Maharashtra Cooperative Societies Act is voidable and invalid. (Para 30 , 31 , 32 , 33 )
5. Appeals dismissed; Society's eviction order upheld as creation of tenancy was invalid and did not grant protection under the Rent Act. (Para 39 )
6. What is the legal status of a member in a tenant co-partnership housing society under the Rent Act?
The member has a right higher than a tenant and is not a tenant under the Rent Act, so no landlord-tenant relationship exists with the society. (Para 24 , 25 , 26 , 27 , 28 )
7. Is a transfer of interest by a member in violation of Section 29(2) of the Maharashtra Cooperative Societies Act void or voidable?
The transfer is voidable as the provision is mandatory, making the tenancy invalid and denying protection under the Rent Act. (Para 30 , 31 , 32 , 33 )
8. Can the legality of a tenancy created in violation of cooperative society laws be adjudicated by a Cooperative Court under Section 91?
Yes, such a dispute touches the business of the society and can be decided by the Cooperative Court without requiring a prior civil suit. (Para 35 , 36 , 37 , 38 )
B. N. AGRAWAL, J.
( 1 ) THESE appeals by special leave have been filed against separate orders rendered by a division Bench of the Bombay High Court in letters Patent Appeals whereby the same have been dismissed as not maintainable, thereby confirming the common judgment rendered by a learned Single Judge of the High court in three writ petitions filed under Article 227 of the Constitution of India [hereinafter referred to as 'the Constitution'].
( 2 ) THE facts, in brief, are that the Belfer Cooperative Housing Society limited, Bandra [west], Mumbai, respondent No. 1 in Civil appeal Nos. 2990-2991 of 2005, [hereinafter referred to as 'the Society'], which was a tenant co-partnership housing society, held both lands and flats constructed thereon and Dr. Gopal Mahadeo Dhadphale, respondent No. 2 in the said appeals [hereinafter referred to as 'the member'] was admitted as member of the Society in the year 1962 and flat No. 4 on the ground floor was allotted to him. On 3. 6. 1982, the member inducted M/s. Anita enterprises, appellant No. 1 in the said appeals, in room No. 2 of the said flat on a monthly rental of Rs. 1000/- and on 3. 10. 1983 the appellant aforementioned was inducted in room No. 3 as well on a monthly rental of rs. 750/ -. The member thereafter inducted m/s. Anita Medical Systems Pvt. Ltd. , appellant No. 2 in the said appeals, in room no. 1 of the flat in question on a monthly rental of Rs. 1000/- which was subsequently enhanced to rs. 1500/- per month and both the appellants were put in possession of the aforesaid premises. The appellants paid rent upto the month of December, 1986 and as the member refused to accept the rental from January, 1987, the rental was sent to him by cheques under registered post, but the same was not accepted.
( 3 ) THEREUPON, the appellants were asked to vacate the premises in question which necessitated filing of two separate suits by them in the year 1987 before the Small Causes Court for a declaration that they were tenants with regard to the aforesaid premises of which they were in occupation and for perpetual injunction restraining the member from interfering in any manner with their possession over the premises in question in which suits only the member was made party and not the Society. The member in the said suits contested the claim of the appellants and both the suits filed by the appellants were dismissed by the trial court upon a finding that the appellants were not inducted as tenants in the suit premises. But on appeal being preferred to the appellate bench of the Small Causes Court, the same were decreed and it was held that the appellants were inducted as tenants in the premises in their occupation.
( 4 ) IN the meantime, the Society raised a dispute in the year 1989 before the Cooperative court under Section 91 of the Maharashtra cooperative Societies Act, 1960 [hereinafter referred to as 'the Societies Act'] praying therein that the appellants be evicted from the premises in their occupation and the member be directed to occupy the same as, according to the Society, the member had parted with possession of the premises in question in favour of the appellants which was not permissible in law. The said case was contested by the appellants in which the member and the appellants entered appearance and all contested the claim of the society. The Cooperative Court by its award decided the dispute in favour of the Society, passed an order of eviction against the appellants and directed the member to occupy the premises. The said order was upheld in appeal.
( 5 ) THEREAFTER, before the High Court three writ petitions were filed - one by the appellants against the aforesaid order passed by the appellate court upholding order passed by the cooperative Court and the other two writ petitions by the member against the order passed by the appellate bench of the Small Causes court whereby aforesaid declaratory suits filed by the appellants were decreed. A learned single Ju
