IMPORTANT POINT
Jurisdiction of Co-operative Court vis-à-vis Civil Court discussed.

Headnote:(a) Maharashtra Co-operative Societies Act, 1960 – Sections 91 and 163 – Section 163(1)(b) and section 91(3) are complimentary to each other. (Para 17)
        (b) Maharashtra Co-operative Societies Act, 1960 – Section 163 – Section 163 excludes the jurisdiction of the Civil Court only with reference to the disputes arising out of the registration – A dispute arising out of a decision of the society to alienate the property of the society is not expressly covered by section 163. (Para 19)
        (c) Maharashtra Co-operative Societies Act, 1960 – Section 91 – In order to refer the dispute to the Co-operative court both the subject matter as well as the parties to the dispute must be those specified in the section. (Para 22)
        (1991) 1 SCC 469 – Relied upon
        (d) Maharashtra Co-operative Societies Act, 1960 – Section 91(1)(c) – Persons other than the members of the society – Are those who have either lent or borrowed money from the society in accordance with provisions of sections 43 and 44 – Such transactions are further subject to prescribed conditions and limitations. (Para 29)
        (1991) 1 SCC 469 – Relied upon
        (e) Maharashtra Co-operative Societies Act, 1960 – Section 94(3) – Section 94(3)(a) does not enable a person other than an enumerated person u/s 91 to refer a dispute to the Co-operative Court (Para 32)
        (f) Maharashtra Co-operative Societies Act, 1960 – Section 94(3)(a) – Co-operative Court can exercise its jurisdiction against a 3rd party when, while adjudicating a dispute, the Co-operative Court reaches the conclusion that the said 3rd party acquired some interest in the property of one of the parties to the dispute – Such property must bar some relationship with the dispute pending before the said court – Further, acquisition of the interest must be during pendency of the dispute – a (Paras 34 and 36)
        (g) Code of Civil procedure, 1908 – Section 9 – Society passing resolution and accordingly conveying property to private 3rd parties – Conveyance can be challenged in a civil court – But the declaration would necessarily involve examining legality of the resolution – Impugned judgment not sustainable. (Para 39)
        (h) Code of Civil procedure, 1908 – Section 9A – High Court was right in going into maintainability of the suits in question as a preliminary issue. (Para 40)
       Facts of the case:
        Provisions of sections 91 and 163 of the Maharashtra Co-operative Societies Act, 1960 have come up for consideration in this case.
       Finding of the Court:
        The suits were maintainable before the civil court.

Judgement Key Points

The legal analysis in the document primarily revolves around the jurisdiction of civil courts versus co-operative courts concerning disputes related to co-operative societies. The key points are as follows:

Jurisdiction of Civil Courts: Civil courts have a broad jurisdiction to adjudicate disputes unless explicitly excluded by law. The law's language and scheme are essential in determining whether jurisdiction is barred or preserved.
Exclusion of Civil Court Jurisdiction: Certain disputes, particularly those related to the registration, bye-laws, management, dissolution, or winding-up of societies, are expressly excluded from civil court jurisdiction by statute, specifically through provisions that refer disputes to specialized co-operative courts.
Disputes over Property and Alienation: Disputes arising out of decisions to alienate or sell property of a society are not expressly covered by the exclusion clauses. Such disputes can be initiated in civil courts unless they fall within the scope of disputes mandated to be referred to co-operative courts under specific statutory provisions.
Scope of Co-operative Court Jurisdiction: The jurisdiction of co-operative courts is confined to disputes touching the constitution, election, management, or business of the society, involving parties who are members, officers, or persons with specific transactions with the society. The scope extends to third parties only under particular circumstances, such as when they acquire an interest in the property during the pendency of a dispute and such interest bears a relationship to the dispute.
Parties to Disputes: For a dispute to be within the jurisdiction of a co-operative court, both the subject matter and the parties involved must fall within the categories specified under the relevant sections. The inclusion of third parties is limited to situations where they have acquired an interest during the course of litigation and such interest is related to the dispute.
Ouster of Civil Court Jurisdiction: The statutory provisions do not generally exclude civil courts' jurisdiction unless explicitly stated or clearly implied. Disputes not expressly covered by the statutory exclusion can be legitimately instituted in civil courts.
Procedure for Objections to Jurisdiction: When disputes are initiated, objections to jurisdiction can be raised as a preliminary issue, and courts are obliged to decide such objections expeditiously before proceeding further.
Maintenance of Status Quo: Pending the determination of jurisdiction and the substantive dispute, courts may direct parties to maintain the status quo to preserve the subject matter of the dispute.

In summary, the document emphasizes that unless a dispute explicitly falls within the statutory scope of co-operative courts, civil courts retain jurisdiction. The determination of jurisdiction depends on the specific language of the relevant statutes, the nature of the dispute, and the parties involved.

JUDGMENT

Chelameswar, J.

1. Leave granted.

2. These appeals arise out of a common order dated 29th August, 2011 of the Division Bench of the Bombay High Court passed in three writ petitions and two suits, 144 and 145 of 2010.

3. By the said common order, it was held, among other things, that the two suits are not maintainable in view of the provisions of Sections 91 and 163 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter ‘the Act’, for short). We are not concerned with the remaining part of the Division Bench’s judgment as the instant special leave petitions are preferred only against that part of the Division Bench’s judgment. The brief factual background of this litigation is as follows.

4. The first respondent is a Society which was originally incorporated in the year 1914. The full particulars of such incorporation are not available at this juncture on record and are also not necessary for the present purpose. It is sufficient to state that it is admitted on all hands that it is a housing cooperative society and the Act governs the affairs of the said Society.

5. It is also an admitted fact on all hands that the said Society has different classes of members known as owners, lessees, allottees, tenants, etc. It is also an admitted fact that the total membership is 762 out of which 69 members fall under the classification of tenant members. However, the exact rights and obligations of these various classes of members, vis-à-vis the first respondent Society or these various classes of members inter se are also not available on record.

6. It appears from the record that, as on today, the first respondent Society owns an extent of approximately 21,774.10 sq. mts. of land in the city of Mumbai alongwith structures popularly known as Wellingdon Catholic Colony. It appears that the said property was part of a larger parcel of land earlier owned by the first respondent Society but is not owned by the Society now. Some of the ‘tenant members’ (including the appellants herein) of the Society initiated proceedings for the division of the Society sometime in the year 1970 invoking Section 18 of the Act by making an application to the Registrar. The said application has a very long and chequered history, the details of which are not necessary for the present purpose except to state that by virtue of the judgment under appeal, the application is still open and pending.

7. In the meanwhile, a resolution came to be passed on the 6th December, 2009 by the General Body of the Society to sell the above mentioned land in favour of respondents No.22 and 23. In furtherance of the said resolution, a sale deed/conveyance came to be executed on 7th December, 2009. Aggrieved by the said resolution and the sale, two suits 144 and 145/2010 came to be filed invoking the original jurisdiction of the Bombay High Court. A copy of the plaint in the suit No.145/2010 is placed on record in these SLPs. The principal prayer in both the civil suits is

“(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.”

It can be seen from prayer (a) extracted above that the plaintiffs seek in effect two declarations - (i) that a resolution dated 6th November, 2009 of the first respondent Society, and (ii) a Conveyance dated 7th December, 2009 executed on behalf of the first respondent Society in favour of respondents 22 and 23, are either illegal, void ab initio or in the alternative that they are voidable as against the plaintiffs (of whom at least some) are the appellants herein and claim to

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2012 Supreme(SC) 79

IMPORTANT POINT Jurisdiction of Co-operative Court vis-à-vis Civil Court discussed.

Cases Referred (1)

IMPORTANT POINT
Jurisdiction of Co-operative Court vis-à-vis Civil Court discussed.