Allowed

Sri Digamber Jai Samaj Thru Its President v. Asst. Housing Commissioner/Asst. Registrar and Another

Allahabad HC11 Sept 2019WRIC/31253/2009

Case brief

AI extract

What is this about?

The High Court allowed the writ petition challenging the Registrar's jurisdiction under Section 70 of the U.P. Cooperative Societies Act to entertain a dispute over a lease deed's validity. The Court held that declaring a lease void requires civil adjudication.

What did the court decide?

The entire suit number 61W of 2009 pending before the Registrar and the interim order dated 28th May, 2009 are quashed.

Sri Digamber Jai Samaj Thru Its President Vs Asst… — Cooperative Societies | Allahabad HC (2019)

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Court No. - 1

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Case :- WRIT - C No. - 31253 of 2009

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Petitioner :- Sri Digamber Jai Samaj Thru Its President Respondent :- Asst. Housing Commissioner/Asst. Registrar And Another

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Counsel for Petitioner :- Pankaj Agrawal Counsel for Respondent :- A.S. Rana,Rajesh Mishra,S.C.,Siddharth

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Hon'ble Ramesh Sinha,J. Hon'ble Ajit Kumar,J.

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List is being revised. Sri A.S.Rana, learned counsel for respondent no. 1 and Sri Rajesh Mishra, learned counsel who has filed vakalatnama on behalf of respondent no. 2 and has also filed supplementary counter on behalf of respondent no. 2 is not present.

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Heard Sri Pankaj Agrawal, learned counsel for the petitioner and perused the record.

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By means of present writ petition, petitioner has questioned not only legality and propriety behind the order dated 28th May, 2009 passed by first respondent, copy of which has been annexed as annexure 9 to the writ petition, but also has questioned the authority of respondent no. 1 to entertain the proceeding in the matter of complaint/objection filed by 2nd respondent seeking declaration in respect of lease deed in question dated 13.10.1998 as void ab initio.

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Briefly stated facts are that petitioner got registered lease deed executed in its favour by 2nd respondent on 13.10.1998 which is in nature of perpetual lease in respect of the land in question. Clause 4 of the lease deed is very material so far as present controversy is concerned and is reproduced hereunder:

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“4. The LESSOR hereby further grants to the lessee the right to utilize the Jain mandir to erect and maintain additional buildings and facilities at its own cost for the purpose of religious activities such as Homeopathic Ashudhalaya and Library for the members of the Samiti of the 1^st party.”

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It appears that after lease deed was executed and the petitioner came into possession over the land in question, it started raising construction of Jain Temple over the the land in

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question. Thereafter, second respondent filed objection/application before first respondent under Section 70 of U.P. Cooperative Societies Act, 1965 (for short “Act, 1965”) in purported exercise of power under Section 70(1) of the Act, 1965, first respondent not only entertained the dispute by registering it as case no. 61W/2009 but at the same time granted interim injunction in favour of respondent no. 2 restraining the petitioner from carrying out any construction work over the land in question vide order dated 28th May, 2009. Hence the present petition has been filed questioning not only interim injunction order but at the same time the authority of the first respondent entertaining and registering the case in which prayer is essentially of the nature which requires civil adjudication by the civil court in respect of an instrument of lease

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The argument advanced by learned counsel for the petitioner is that except for civil court established by law no one can hold and instrument either of lease or sale as void nor, does any authority other than civil court enjoys the power to cancel the same. In order to appreciate the argument as advanced by learned counsel for the petitioner questioning the jurisdiction and authority of the first respondent in entertaining the dispute, we need to look the relevant provisions of Section 70 of the Act, 1965 in its entirety and it is reproduced hereunder:

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"70. Disputes which may be referred to arbitration. - (1) Notwithstanding anything contained in any law for the time being in force, if any dispute relating to the constitution, management of the business of a co-operative society other than a dispute regarding disciplinary action taken against a paid servant of a society arises-

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(a) among members, past members and persons claiming through members, past members and deceased members; or

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(b) between a member, past member or any person claiming through, a member, past member or deceased member, and the society, its committee or management of any officer, agent or employee of the society, including any past officer, agent or employee;

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(c) between the society or its committee and any past committee, any officer, agent or employee or any past officer, past agent or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent, or deceased employee of the society; or

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(d) between a co-operative society and any other co-operative society or societies:

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such dispute shall be referred to the Registrar for action in accordance with the provisions of this Act and the rules and no court shall have jurisdiction to entertain any suit or other proceeding in respect of any such dispute: [Provided that a dispute relating to an election under the provisions of this Act or rules made thereunder shall not be referred to

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the Registrar until after the declaration of the result of such election] (2) For the purpose of sub-section (1), the following shall be deemed to be included in dispute relating to the constitution, management or the business of a co-operative society, namely -

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(a) claims for amounts due when demand for payment is made is either refused or not complied with whether such claims are admitted or not by the opposite party;

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(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not;

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(c) a claim by a society for any loss caused to it by a member, officer, agent, or employee including pas' or deceased member, officer, agent, or employee, whether individually or collectively and whether such loss be admitted or not; and

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(d) all matters relating to the objects of the society mentioned in the bye-laws as also those relating to the election of office-bearers.

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(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute relating to the constitution, management or the business of co-operative society, decision thereon of the Registrar shall be final and shall not be called in question in any court."

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Section 71 of the U.P. Cooperative Societies Act calls for reference of dispute to the arbitration in the discretion of Registrar.

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From the reading of the aforesaid provision it is clearly revealed that only scope for Registrar besides question of management disputes and election of office bearers, to entertain dispute relating to business of the Cooperative Societies. The question is what would be a matter relating to business of cooperative society which can be questioned and in that respect dispute can be entertained by the Registrar.

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Sub section 2 of Section 20 deals with this above aspect of the matter and defines in it various clauses as to what would constitute management or business of a cooperative society which can be gone into by the Registrar exercising power under Section 70 of the U.P. Cooperative Societies Act. Clause-D of Sub Section 2 of Section 70 refers to the matter relating to the objects of the society. What we find is that one of the grounds while passing an interim order by the Registrar is that there was no such object of society to execut lease deed in favour of a member for construction purposes of temple.

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We have already quoted the relevant clause 4 of the lease deed and we find that when the lease deed was executed, it was a condition given under the lease as purpose for which lease deed

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was being executed. The words 'religious activities' mentioned in the clause cannot be said to exclude construction of temple for the purpose of worship and examples in the clause cannot be taken as exhaustive and so the lease deed is not illegal per se. The argument, therefore, is that if cooperative society passed resolution to execute lease deed in favour of the petitioner and such resolution has not been put to challenge and any challenge to lease deed would certainly be within the domain and the jurisdiction to be exercised by civil court and not by the Registrar.

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Learned counsel for the petitioner has further placed reliance of the judgment of the Apex Court in the case of Margret Almeida and Others v. Bombay Catholic Cooperative Housing Society Limited and Others (2012) 5 SCC 642 , in which Apex Court court dealing with matter relating to the provisions of Maharashtra Cooperative Societies Act. Learned counsel for the petitioner has drawn our attention to the relevant paragraphs from 20 to 25 of the said judgment in which emphasis has been laid on various provisions that empower the Authority to to deal with and we find that one of the conditions/subjects is business of the society. Paragraphs 20 to 25 of the judgemnt ( supra ) quoted hereunder:

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“20. Section 163 of the Act bars the jurisdiction of Civil and Revenue Courts reads as follows:

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“163. Bar of jurisdiction of Courts. -(1) Save as expressly provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of

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(a) the registration of a society or its by-laws or the amendments of its by-laws or the dissolution of the committee of a society, or the management of the society on dissolution thereof: or

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(b) any dispute required to be referred to the Co- operative Court for decision.

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(c) any matter concerned with the winding up and dissolution of a society.

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(2) while a society is being wound up, no suit or other legal proceeding relating to the business of such society shall be proceeded with or instituted against the society or any member thereof, or any matter touching the affairs of the society, except by the leave of the Registrar, and subject to such terms as he may impose.

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(3) all orders, decisions or awards passed in accordance with the Act or the Rules shall, subject to the provisions for appeal or revision in this Act be final; and no such order, decision or award shall be liable to be challenged, set aside, modified, revised or declared void in any Court

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upon the merits or upon any other ground whatsoever."

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21. Section 163 (1)(b) and Section 91 (3) are complimentary to each other. Section 91(3) reads as follows:

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" 91(3) Save as otherwise provided under "sub-section (2) to section 93, no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1)"

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18. It can be seen that the Section 163 only excludes the jurisdiction of the Civil Court with reference to the disputes arising out of the registration:-

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1) Registration of the society;

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2) Disputes relating to the bye-laws of the society;

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3) Dissolution of the Committee of the society;

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4) Management of the society on dissolution of the society;

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5) Any disputes which is required to be referred to the Co-operative Court under section 91.;

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6) Any matter concerned with the winding up and dissolution of the society etc.

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23. A dispute arising out of a decision of the society to alienate the property of the society, in our opinion, is not expressly covered under Section 163 of the Act. It is to be examined whether it is a matter which is required to be resolved by the Co-operative Court by virtue of the provisions under Section 91 of the Act. In view of the conclusion of the High Court that "the entire subject matter of the civil suit could have been the subject matter of dispute filed under Section 91."

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It is necessary to examine the scope of Section 91(1), which reads as follows "

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(1) Notwithstanding anything contained in any other law for the time being in force any dispute touching the Constitution, (Election of Committee or its Officers) other than the elections of the committees of the specified societies including its officers), Conduct of general meetings, management or business or a society shall be referred by any of the parties to the disputes, or by federal society to which the society is affiliated or by a creditor of the society, ( in the Co-operative Court) If both the parties there to are one or other of the following;-

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(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past and present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society or the liquidator of the society (or the official Assignee of a DeRegistered Society),

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(b) a member, past member of a person claiming through a member, past member of a deceased member of society, or a society which is a member of the society ( or a persons who claims to be a member of the society;)

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(c) a person other than a member of the society, with whom the society has any transactions in respect of which any restrictions or regulations have been imposed, made or prescribed under sections 43,44 or 45 and any person claiming through such person:

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(d) a surety of a member, past member or deceased member, or surety of a person other than a member with whom the society has any transactions in respect of which restrictions have been prescribed under section 45, whether such surety or person is or is not a member of the society:

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(e) any other society , or the Liquidator of such a society or deregistered society or the official Assignee of such a de-registered society."

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25. It can be seen from the above extract that the Section makes it mandatory that certain disputes, the nature of which is specified in the said sub-section, be referred to the `Co-operative Court'1 - as defined under section 2 (10-a ii). Such reference is required to be made by "any of the parties to the dispute". The Section also specifies the nature/subject matter of dispute which is required to be referred to the Co-operative Courts. They are "disputes touching" the

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1) Constitution of the society

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2) Elections of the "Committee or its officers"

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3) Conduct General Meetings

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4) Management of the society or

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5) Business of the society.”

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The argument is that provisions are substantially para materia with U.P. Cooperative Societies Act, 1965 and moreover, in that case even there was provision that created absolute bar for civil suit in the matter relating to cooperative society and yet the Apex Court had held that when the matter was essentially matter of civil nature which would entale exercise of adjudication like civil suit, it would be proper course to seek remedy in civil court. Even otherwise we find merit in the submission raised by learned counsel for the petitioner that it is only by a decree of law duly passed by court established by law for construction of sale or lease that such an interest can be held to be void or non est and cancel the same. Thus no such right lies with Registrar of the Cooperative Societies.

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In view of above, writ petition succeeds and is allowed. Entire proceedings of suit no. 61W of 2009 The Meerut Cooperative Housing Society Ltd. v. Sri Digambar jai Society, pending before respondent no. 1 is hereby quashed including order dated 28th May, 2009 which has been annexed as annexure 9 to the writ petition.

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Order Date :- 11.9.2019 Sanjeev

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(Ajit Kumar,J.) (Ramesh Sinha,J.)

Sri Digamber Jai Samaj Thru Its President v. Asst. Housing Commissioner/Asst. Registrar and Another

Case brief

What is this about?

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Sri Digamber Jai Samaj Thru Its President v. Asst. Housing Commissioner/Asst. Registrar and Another

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