An agreement for surrender of possession of premises to a co-operative society is an Act touching the business of the society and hence a suit for specific performance of such an agreement is not maintainable without a notice under section 164 of the Maharashtra Co-operative Societies Act, 1960.

Headnote:
CO-OPERATIVE SOCIETIES - NOTICE UNDER SECTION 164 OF THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960 - NECESSITY - AGREEMENT FOR SURRENDER OF POSSESSION OF PREMISES TO CO-OPERATIVE SOCIETY - WHETHER AN ACT TOUCHING THE BUSINESS OF THE SOCIETY - INTERPRETATION OF SECTION 164.
Fact of the Case:

Plaintiff filed a suit for specific performance of an agreement entered into with the defendant co-operative society for surrender of possession of premises in exchange for other premises. The society resisted the suit on the ground that it was not maintainable in the absence of a notice under section 164 of the Maharashtra Co-operative Societies Act, 1960 (the Act).
Finding of the Court:

The court held that the suit was not maintainable without a notice under section 164 of the Act. The court interpreted section 164 and held that the agreement in question was an Act touching the business of the society and hence the two month's notice as contemplated by section 164 of the Act was imperative.
Issues: Whether the suit was maintainable without a notice under section 164 of the Act.
Ratio Decidendi: The court held that the agreement in question was an Act touching the business of the society because the main object of the society was to purchase and sell lands, to construct buildings thereon and to allot flats to its members. The agreement enabled the society to get possession of a part of the land for reconstructing a new building thereon for the benefit of the members.
Final Decision: The appeal was dismissed on the ground that the suit was not maintainable without a notice under section 164 of the Act. However, the interim reliefs granted in the appeal were ordered to be continued up to July 31, 1985.

JUDGMENT - B.C. GADGIL, J.:--- Plaintiff in Suit No. 5692 of 1963 of the file of the City Civil Court, Bombay, has preferred this appeal against the dismissal of his suit on the ground that the suit against the defendant co-operative society is not maintainable in the absence of a notice under section 164 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as 'the Act').

2. This appeal was originally placed before the learned Single Judge Sharad Manohar, J., for hearing. On June 20, 1984 the learned Judge passed the following order :

"In view of the important question of law relating to the interpretation of section 164 of the Co-operative Societies Act involved in this appeal, the appeal is referred to a Division Bench. Liberty is given to the appellant to move the Division Bench for a fixation of early date of hearing".

On the basis of this order the office has placed this matter before the Division Bench for hearing.

3. In order to understand the controversy between the parties it will be necessary to refer to a few facts. The defendant is a Co-operative Society registered under the Act. It appears that the defendant purchased a plot of land bearing No. 69, Bhulabhai Desai Road, Bombay, together with two buildings standing thereon viz. Shanti Vihar and Anand Vihar. The plaintiff was in possession of a part of the building Shanti Vihar. The society wanted to demolish this Shanti Vihar building and to construct a new building for allotment of the flats therein to its members. This was not possible unless the society was able to get vacant possession of Shanti Vihar and more particularly the possession of that part which was in possession of the plaintiff. Therefore, on May 16, 1963 the plaintiff and the defendant entered into an agreement (which is on page 15 of the compliation). The agreement mentions that the society has purchased the property for the purpose of demolition and reconstruction of a building thereon and has been carrying on demolition work of the said property. It also states that the society approached the plaintiff for surrender of the property which was in possession of the plaintiff. The plaintiff agreed to do so on certain terms and hence the agreement was executed. It is not necessary to give the details of the agreement. Suffice it to say that the parties agreed that the plaintiffs should vacate the premises in his possession i.e. the Shanti Vihar building and in consideration thereof the defendant should give certain premises on the first and second floor to the plaintiff as a tenant. On the date of the agreement, a part of the premises so agreed to be given to the plaintiff was handed over to the plaintiff. However, the remaining part of the premises was agreed to be handed over to the plaintiff at a later stage after the society would get the possession of that part from someone else. The grievance of the plaintiff is that though the society acquired that possession, it did not hand over the possession to the plaintiff in terms of the agreement. The plaintiff, therefore, filed the suit under appeal for specific performance for claiming certain reliefs including possession of that part.

4. This suit was resisted by the defendant on various grounds. One of the grounds is that the suit is not tenable in the absence of a notice under section 164 of the Act. This point was heard as a preliminary point. The learned Judge of the City Civil Court, Bombay, accepted this contention and the suit was dismissed.

5. Section 164 of the Act reads as follows :

"No suit shall be instituted against a society, or any of its officers, in respect of any Act touching the business of the society, until the expiration of two months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so

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