Bombay High Court
Borla Co-Operative Housing ... vs Span Builders on 22 October, 2013
Bench: R.D. Dhanuka
hvn .. 1 .. notice of moto no. 1081 of 2010.sxw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 1081 OF 2010
IN
SUIT NO. 1442 OF 2009
Vardhman Developers Ltd., )
a company duly incorporated the )
provision of Companies Act, having its )
registered Office at 113, Commerce )
House, 140, Nagindas Master Road, )
Fort, Mumbai - 400 023.
Versus
1. Borla Co-operative Housing Society )
) ...Plaintiffs
Ltd., a Society duly registered under )
The Maharashtra Co-operative )
Societies Act, 1960 situated at Dr. )
C.P. Gidwani Road, Opp. Basant )
Cinema, Chembur, Mumbai - 400 074)
2. Pushpa Rahumalani, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 1, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
3. P.T. Nariani,
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 4, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
4. Surekha Jaisingh, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 5, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
5. R.L. Dua,
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 7, Borla Co-operative )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 2 .. notice of moto no. 1081 of 2010.sxw
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
6. Kishore B. Ahuja, )
7. Deepak B. Ahuja, )
Indian Inhabitants, both residing at )
Bldg. No. 1, Flat No. 8, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
8. Ramesh P. Khetpal, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 9, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
9. Jai Wadhwa,
Road, Opp. Basant Cinema,
Chembur, Mumbai - 400 074.
)
)
)
10. Nanda T. Wadhwa, )
Indian Inhabitants, both residing at )
Bldg. No. 1, Flat No. 14, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
11. Sarojlata Madan, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 15, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
12. Chandru H. Chachlani, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 24, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
13. Shobha Patel, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 28, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
14. Pratap S. Jakrani, )
Indian Inhabitant, residing at Bldg. )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 3 .. notice of moto no. 1081 of 2010.sxw
No. 1, Flat No. 30, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
15. Lalu S., )
16. Shyam S. Jarkani, )
Indian Inhabitants, both residing at )
Bldg. No. 1, Flat No. 31, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
17. Shyam S. Jarkani, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 32, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema,
Chembur, Mumbai - 400 074.
)
)
18. Janki D. Asrani, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 3, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
19. Parparti B. Sajnani, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 10, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
20. A.K. Thirani, )
Indian Inhabitant, residing at Bldg. )
No. 1, Flat No. 13, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
21. M.R. Katyal, )
Indian Inhabitant, residing at Bldg. )
No. 2, Flat No. 1, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
22. Nanikram S. Gurnani, )
Indian Inhabitant, residing at Bldg. )
No. 2, Flat No. 11, Borla Co-operative )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 4 .. notice of moto no. 1081 of 2010.sxw
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
23. Manju P. & Mr. Premchand K. Chawla,)
Indian Inhabitants, both residing at )
Bldg. No. 2, Flat No. 20, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
24. Chandra J. & Mr. Jagdish R. )
Dhamecha, )
Indian Inhabitants, both residing at )
Bldg. No. 2, Flat No. 23, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
25.
Chembur, Mumbai - 400 074.
Rajkumar R. Dhamecha,
Indian Inhabitant, residing at Bldg. )
)
)
No. 2, Flat No. 24, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
26. Chandra Hemdev, )
Indian Inhabitant, residing at Bldg. )
No. 2, Flat No. 29, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
27. Sharda R. Mirgh, )
28. Sunil R. Mirgh, )
Indian Inhabitants, both residing at )
Bldg. No. 2, Flat No. 31, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
29. Devdas Kamat, )
Indian Inhabitant, residing at Bldg. )
No. 2, Flat No. 5, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
30. V.K. Damani, )
Indian Inhabitant, residing at Bldg. )
No. 2, Flat No. 32, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 5 .. notice of moto no. 1081 of 2010.sxw
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
31. Divya Nand Rajpal, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 9, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
32. Arjandas H. Rajpal, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 1, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
33. Kaushalya J. Menghnani, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 15, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
34. Deepak B. Ahuja, )
35. Kishore B. Ahuja, )
Indian Inhabitants, both residing at )
Bldg. No. 3, Flat No. 16, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
36. Devanand B. Ahuja, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 19, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
37. Kavita Lilaramani, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 20, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
38. Motiram B. Ahuja, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 21, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 6 .. notice of moto no. 1081 of 2010.sxw
39. Bharati M. Nagpal, )
Indian Inhabitant, residing at Bldg. )
No. 3, Flat No. 28, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
40. R.R.B. Lal & Mrs. Renu R. Lal, )
Indian Inhabitants, both residing at )
Bldg. No. 4, Flat No. 8, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
41. Subash Bawa, )
42. Veena Bawa, )
Indian Inhabitants, both residing at )
Bldg. No. 4, Flat No. 15, Borla
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
)
Chembur, Mumbai - 400 074. )
43.Bharat J. Ahya, )
Indian Inhabitant, residing at Bldg. )
No. 4, Flat No. 16, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
44. Indira S. Rohra, )
45. Shivaldas T. Rohra, )
46. Tejpal S. Rohra, )
Indian Inhabitants, all residing at )
Bldg. No. 4, Flat No. 22, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
47. Nand B. Ahuja, )
Indian Inhabitant, residing at Bldg. )
No. 4, Flat No. 25, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
48. Amarnath T. Wadhwa )
Indian Inhabitant, residing at Bldg. )
No. 4, Flat No. 26, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 7 .. notice of moto no. 1081 of 2010.sxw
49. Balbir Singh Bhabra & )
50. Poonam Bhabra, )
Indian Inhabitants, both residing at )
Bldg. No. 5, Flat No. 3, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
51. Narendra Singh Dhanoa, )
Indian Inhabitant, residing at Bldg. )
No. 5, Flat No. 8, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
52. S.D. Velegar, )
Indian Inhabitant, residing at Bldg. )
No. 5, Flat No. 10, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani
Road, Opp. Basant Cinema,
)
)
Chembur, Mumbai - 400 074. )
53. Sarojini Sharma & )
Mr. B. N. Sharma, )
Indian Inhabitants, both residing at )
Bldg. No. 5, Flat No. 17, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
54. Indrajeet Singh Bhabra, )
Indian Inhabitant, residing at Bldg. )
No. 5, Flat No. 19, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
55. Khartilal H. Chugh, )
Indian Inhabitant, residing at Bldg. )
No. 5, Flat No. 20, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
56. S. Gopalakrishnan & )
57. C.A. Gopalkishnan, )
Indian Inhabitants, both residing at )
Bldg. No. 5, Flat No. 22, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 8 .. notice of moto no. 1081 of 2010.sxw
58. Harsha C. Rajpal & )
59. Chandru A. Rajpal, )
Indian Inhabitants, both residing at )
Bldg. No. 5, Flat No. 24, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
60. Kiran M. Chauhan, )
61. Rajiv N. Chauhan, )
62. Mridula Gilder, )
63. Priti N. Agrwal and )
64. Anupma Balsara, )
Indian Inhabitants, all of them )
residing at Bldg. No. 6, Flat No. 1, )
Borla Co-operative Housing Society, )
Dr. C.P. Gidwani Road, Opp. Basant )
Cinema, Chembur, Mumbai - 400 074)
65. Jankibai L. Chang, )
Indian Inhabitant, residing at Bldg. )
No. 6, Flat No. 3, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
66. Dr. Naresh K. Jhamnani, )
67. Dr. Mrs. Rekha N. Jhamnani )
Indian Inhabitants, both residing at )
Bldg. No. 6, Flat No. 17, Borla )
Co-operative Housing Society, Dr. C.P)
Gidwani Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
68. Sudesh K. Kapoor, )
Indian Inhabitant, residing at Bldg. )
No. 7, Flat No. 8, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
69. N.K. Gawlani, )
Indian Inhabitant, residing at Bldg. )
No. 7, Flat No. 10, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074 )
70. Preety V. Rajpal, )
Indian Inhabitant, residing at Bldg. )
No. 7, Flat No. 31, Borla Co-operative )
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 9 .. notice of moto no. 1081 of 2010.sxw
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. )
71. Swaran Dutt Tuteja, )
Indian Inhabitant, residing at Bldg. )
No. 7, Flat No. 28, Borla Co-operative )
Housing Society, Dr. C.P. Gidwani )
Road, Opp. Basant Cinema, )
Chembur, Mumbai - 400 074. ) ... Defendants
Mr. S.U. Kamdar, Sr. Advocate along with Mr. Chrag Balsara i/by Reena
Salunke for the plaintiff.
Mr. D.D. Madon, Sr. Advocate along with Dr. Birendra Saraf i/by M/s. Kanga
& Co. for defendant no. 1.
Mr.D.H. Mehta alongwith Mr. R.D. Suvarna for defendant nos. 2, 3, 4, 6, 7 8,
11, 12, 14 to 17, 21, 22, 24, 25, 31 to 48, 53, 55 to 59, 66 and 67 in support
of motion.
CORAM : R.D.DHANUKA J.
RESERVED ON : OCT 11, 2013.
PRONOUNCED ON : OCT 22, 2012
P.C.
By this motion, the applicants (some of the original defendants)
seek rejection of the plaint under Order VII rule 11(d) of the Code of Civil
Procedure, 1908. Plaintiffs have filed a suit inter alia praying for declaration
that the development agreement dated 21 st October, 2007 executed by and
between the plaintiffs and defendant no. 1 is binding on all the defendants,
their servants, agents and any persons claiming through them including all
the members of the defendant no.1 society. Plaintiffs have also prayed for
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 10 .. notice of moto no. 1081 of 2010.sxw
order and decree against defendant nos. 2 to 72 to execute their consent for
redevelopment in favour of the plaintiffs in terms of the development
agreement.
2. This motion has been filed by the applicants on the ground that
though in the plaint and in particular paragraph 17, it is averred by the
plaintiffs that in view of the urgency in the matter, notice under section 164
of the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as
the "Said Act") has not been given to defendant no.1 and that the same be
dispensed with, plaintiffs have not applied for dispensing with the said
notice. It is submitted that though the plaintiffs have sought reliefs against
defendant no.1 society, notice under section 164 of the said Act has not been
issued. It is submitted that the notice under section 164 of the said Act is
mandatory and cannot be waived and/or dispensed with and this suit is
barred under section 164 of the said Act and is liable to be rejected under
Order VII rule 11(d) of the Code of Civil Procedure, 1908. Mr. Mehta, the
learned counsel for the applicants invited my attention to prayer clause (a)
by which the plaintiff seeks declaration that the development agreement
entered into between plaintiffs and defendant no. 1 is binding on all the
defendants including members of defendant no.1. It is submitted that thus
prayer (a) in the plaint is barred for want of mandatory notice under section
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 11 .. notice of moto no. 1081 of 2010.sxw
164 not issued by the plaintiffs before filing of suit. Mr. Mehta, learned
counsel placed reliance on the judgment of this court in the case of
Suprabhat Coop. Housing Society Ltd. Vs. Span Builders, 2002 (3) Mh.L.J.
837 and in particular paragraphs 7, 8, 9, 10, 12 and 13 in support of his
submission that the suit is not maintainable if no notice under section 164 of
the said Act was served upon the society and the suit is thus liable to be
rejected for want of notice under section 164 of the said Act. The relevant
paragraphs read thus :
"7. Section 164 provides that no suit shall be instituted against a society,
or any of its office bearers in respect of any act touching the business of
the society, until after the expiration of two months after the stipulated
notice has been delivered. The notice is to specify the cause of action and
the other particulars which are set out in Section 164. The plaint is to then
contain a statement that a notice was so delivered.
8. The expression "touching the business of the society", which is
employed in Section 164 has also been used in Section 91 of the Act.
Section 91, it would be material to note, falls in Chapter IX of the Act
which is entitled "Statement of Disputes". Section 91 provides that
notwithstanding anything contained in any other law for the time being in
force any dispute touching the constitution, elections of the committee or
its officers other than elections of committees of specified societies
including its officers conduct of general meetings, management or
business of a society shall be referred by any of the parties to the dispute
to a Co-operative Court if the parties thereto are one or the other of the
parties specified in Clauses (a) to (e) of the section. The expression
"touching the business of the society" came up for consideration before the
Supreme Court in Deccan Merchants v. Dalichand reported in The
Supreme Court held that in the context of Section 91, the expression
"touching the business of the society" would not mean the affairs of a
society because election of office-bearers, conduct of general meetings
and management of a society could be treated as affairs of a society.
Therefore, the Court was of the view that the word "business" has been
used in a narrower sense and it means the actual trading, commercial or
other similar business activity of the society which the society is
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 12 .. notice of moto no. 1081 of 2010.sxw
authorised to enter into under the Act and the Rules and its bye-laws. In
the present case, the Court is concerned with the construction to be placed
upon the meaning of the expression "touching the business of the society"
not in the context of Section 91 but in Section 164. Nevertheless, the
principle which has been laid down by the Supreme Court must illuminate
the interpretation to be placed by this Court on the expression-"touching
the business of the society". In that context, it would be necessary to advert
to the following observations of the Supreme Court in Deccan Merchants
(supra):
"The question arises whether the dispute touching the assets of a society
would be a dispute touching the business of the society. This would depend
on the nature of the society and the rules and bye-laws governing it.
Ordinarily, if a society owns buildings and lets out parts of buildings
which it does not require for its own purpose it cannot be said the letting
out of those parts is a part of the business of the society. But it may be that
it is the business of a society to construct and buy houses and let them out
to its members. In that case letting out property may be part of its
business. In this case, the society is a co-operative bank and ordinarily a
co-operative bank cannot be said to be engaged in business when it lets
out properties owned by it. Therefore, it seems to us that the present
dispute between a tenant of a member of the bank in a building which has
subsequently been acquired by the bank cannot be said to be a dispute
touching the business of the Bank, and the appeal should fail on this short
ground."
9. The basic principle which has been formulated by the Supreme Court is
that whether a particular dispute touches the business of the society would
depend upon the nature of the society and the rules and bye-laws
governing it. In the case before the Supreme Court, the society was a Co-
operative Bank. The Supreme Court held that ordinarily, a Co-operative
Bank cannot be said to be engaged in a transaction which touches the
business of the Society when it lets out properties owned by it. Therefore, a
dispute between a tenant of a member of the Bank in a building which had
subsequently been acquired by the Bank was held not to touch the business
of the Bank. The Supreme Court in the observation which has been
extracted above, however, also considers a case where it is the business of
a society to construct and buy houses and let them out to its members. The
Supreme Court held that in such a case letting out of property is the
business of the society. The distinction between the two types of cases has
to be borne in mind. The distinction is premised in the nature of the society
as evidenced by its objects and bye laws.
10. In the present case, the first applicant is a Co-operative Housing
Society and has been registered as such under the Act. A housing society is
::: Downloaded on - 27/11/2013 20:28:43 :::
hvn .. 13 .. notice of moto no. 1081 of 2010.sxw
defined by Section 2(16) to mean a society, the object of which is to
provide its members with open plots for housing, dwelling houses or flats;
or if open plots, the dwelling houses or flats are already acquired, to
provide its members common amenities and services. The first applicant is
a co-operative housing society and falls within the sub-classification of a
Tenant Co-partnership Housing Society within the meaning of Rule 10 of
the Rules. The objects of the first applicant inter alia include to buy or take
on lease the plot bearing No.C-39 of Sector 12, Kharghar, admeasuring
7252 Sq. metres and to construct flats thereon for allotment to the
members of the society for their authorised use. The construction contract
which was entered into with the respondents was clearly in pursuance of
the basic object of the applicants. The contractual relationship which was
entered into between the applicants and the respondents was thus in
furtherance of and towards implementing the basic object of the applicants
as a Tenant Co-partnership Housing Society. The dispute which has arisen
between the parties is in the performance of the contract which was thus
entered into.
Therefore, having regard to the principle incorporated in Section 164 of
the Act, the suit which has been instituted by the respondents is clearly one
which touches the business of the society. The suit was in the
circumstances, clearly not maintainable since it is an admitted position
that no notice under Section 164 of the Act was served.
12. In the facts and circumstances, the view which has been taken by the
learned Trial Judge is manifestly incorrect. The learned Trial Judge has
thus, committed a material irregularity in the exercise of his jurisdiction,
which would warrant the interference of this Court under Section 115 of
the Code of Civil Procedure, 1908.
13. The impugned order of the learned Trial Judge dated 17th October
2001 is quashed and set aside. The application filed by the applicants,
Exh-18 in Special Civil Suit No. 28 of 2001 shall in the circumstances,
stand allowed. In pursuance of the provisions contained in Order 7, Rule 1
l(d) of the Code of Civil Procedure, 1908 , the plaint is liable to and is
accordingly rejected for want of notice under Section 164 of the
Maharashtra Co-operative Societies Act, 1960. It is needless to add that it
would be open to the respondents to institute a fresh suit after due notice
as required under Section 164 of the Maharashtra Co-operative Societies
Act, 1960. The Civil Revision Application is accordingly allowed.
Parties to act on a copy of this order duly authenticated by the
Sheristedar/P.S. of this Court."
3. Mr. Mehta placed reliance on the judgment of this court in the case of
hvn .. 14 .. notice of moto no. 1081 of 2010.sxw
C.F. Marconi Vs. Madhav Cooperative Housing Society Ltd. 1985 (2) Bom.
C.R. 357 and in particular paragraphs 4 and 7 in support of his submission
that notice under section 164 of the said Act was mandatory. It is submitted
that the resolution of the society by which the society had agreed to enter
into agreement for redevelopment with the plaintiff was in respect of the act
touching the business of the society and thus notice was mandatory.
Paragraph 4 and 7 read thus:
"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.
7. It was next urged by Shri Dalvi that the contention about the necessity
of the notice under section 164 of the Act should be deemed to have
been waived by the defendant and that it would not be open for the
defendant to urge for it. The suit in question was filed on May 11, 1963.
The plaintiff filed a notice of motion in that suit claiming certain
temporary reliefs. That notice of motion was opposed by the society by
raising a number of contentions. However, the plea of non-
maintainability of the suit on account of the absence of the notice under
section 164 of the Act has been taken. But such a plea was specifically
taken when the defendant filed a written statement to the suit. The
argument of Shri Dalvi is that an omission to take plea in the notice of
motion proceedings should be held to be a conduct suggesting that the
plaintiff gave up that plea. We are not able to accept this contention for a
simple reason that pleas for the suit are to be raised in the written
statement. In the present case the concerned plea about the necessity of
the notice has been so taken. An omission to raise it in the interlocutory
matter would be irrelevant."
4. Mr. Mehta also placed reliance on the judgment delivered by the
learned Single Judge in the case of Homi Nariman Bhiwandiwala Versus
hvn .. 15 .. notice of moto no. 1081 of 2010.sxw
Zoroastrian Cooperative Credit Bank Ltd and another 2001(3) Bom.C.R. 352
in support of his submission that notice under section 164 of the said Act was
mandatory and the suit is not maintainable for want of notice. Reliance is
placed on paragraph 16 of the said judgment which reads as under:
"16. Issue No. 13, 15 & 21:---Defendant No. 2 is a trust and in
case of a trust which is not a legal entity, all the trustees
should be joined if a legal action is initiated against a trust.
This view is taken by a Division Bench of the Gujarat High
Court, reported in Atmaram Ranchhodbhai v. Gulamhusein
Gulam Mohiyaddin, MANU/GJ/0112/1973 : AIR1973Guj113 .
Same view is also taken by this Court in a decision reported in
Venkatesh Iyer v. Bombay Hospital Trust & others,
MANU/MH/0198/1998 : 1998(2)BomCR798 . The suit is also
not maintainable for want of under section 164 of the
Maharashtra Cooperative Societies Act. The notice is
mandatory which is clear from the provisions of section 164 of
the M.C.S. Act. This is laid down by the Division of this Court
in the judgment reported in Mohan Meakin Ltd. v. The
Pravara Sahakari Sakhar Karkhana Ltd., , and in head note (b)
the Court has held thus :
"Held, that the defendant was a society which was carrying on the
business of manufacturing Alcoholic products viz. Whisky and that being
the business of the society it was clear that the provisions of section 164
of the Maharashtra Co-operative Societies Act were attracted. One of the
objects of the society in addition to manufacture of sugar was the
manufacture of complementary products and in that behalf to erect the
necessary machinery. The alcoholic products manufactured out of
molasses by the defendant co-operative society was a complementary
product and the said business fairly and squarely fell within the ambit of
the Bye-laws of the society. The provisions of the Maharashtra Co-
operative Societies Act, and in particular section 164 of the said Act must
apply and in the absence of statutory notice under section 164 the suit was
not maintainable."
Head Note (C) of the above judgment also mentions the same position.
Thus the suit is not maintainable in the absence of notice and notice given
after filing of the suit by the plaintiff makes no difference in the situation
hvn .. 16 .. notice of moto no. 1081 of 2010.sxw
as the suit as filed was not maintainable and the defect is not curable by
giving notice on presentation of the plaint. Issues No. 13, 15 & 21 are
therefore answered accordingly."
5. Mr. Mehta placed reliance on the judgment of the Single Judge
of this court in the case of Gurudev Developers Vs. Kurla Konkan Niwas
Coop. Hsg. Society, 2000(3) Mh.LJ 131 and relevant paragraph on page
140 which reads thus:
"In my view, the observations made in the aforesaid judgments
make it clear that the suit filed by the plaintiff would not be
maintainable on the ground that the requisite notice as required
under section 164 of the Maharashtra Cooperative Societies Act
has not been served. Counsel has further submitted that even if
the suit is said to be maintainable yet no relief can be granted to
the plaintiff in the suit as the agreement dated 18th Jan. 1985 is
merely a development agreement and the same cannot be
specifically performed. Learned Counsel has relied on a
judgment given in Notice of Motion No. 2716 of 1987 in Suit No.
2673 of 1987."
6. Mr. Mehta submits that even if the society has entered into an
agreement with the developer for redevelopment of the property of the
society, dispute arising out of such resolution passed by the society was
touching the business of the society and under section 164 of the said Act
notice was mandatory and the suit deserves to be set aside for want of
notice.
7. Mr.Kamdar, learned senior counsel appearing on behalf of the
plaintiffs on the other hand submits that if the society is constituted for
hvn .. 17 .. notice of moto no. 1081 of 2010.sxw
construction of buildings and for providing flats, any dispute arising out of
such decision taken by the society would amount to touching the business of
the society and notice under section 164 in such event would be mandatory.
It is submitted that once the building is constructed and society seeks to
redevelop the property of the society in the capacity as owner, dispute
arising out of such resolution would not amount to business of the society.
Mr. Kamdar submits that the object clause of the society must provide for
redevelopment as business which in this case is absent. It is submitted that
in any event, only society can raise such objection that the suit is liable to
he dismissed for want of notice and no third party. It is submitted that there
is no dispute between the plaintiff and defendant no. 1 society. The society is
ready and willing to comply with their part of obligation. The dispute is
however, raised by some of the members of the society who are applicants in
this notice of motion.
8. Mr. Kamdar placed reliance on the judgment of this court in the
case of Disha Construction Versus Jaysen S. Mastakar and Others
delivered by the learned Single Judge of this court on 16 th September,
2013 in Notice of Motion No. 859 of 2013 in Suit No. 397 of 2013 and
in particular paragraph 27 which read thus :
"27. Mr. Chinoy the Learned Senior Advocate appearing for the Plaintiff
hvn .. 18 .. notice of moto no. 1081 of 2010.sxw
has at the outset correctly submitted that as held in a
plethora of judgements passed by this Court, the present
Suit filed by the Developer is maintainable. In fact the
Hon'ble Supreme Court has in the case of Margaret Almeida
v/s Bombay Catholic Cooperative Housing Soc. Ltd. 1,
followed by a Division Bench of this Court in Mohinder Kaur
Kochar v/s Mayfair Housing Pvt. Ltd.2, has held that the suit
between a developer and the society or its members cannot
be a dispute which can be adjudicated by the CoOperative
Court under Section 91 of the Maharashtra Cooperative
Housing Societies Act 1960 ("MCS Act"). Mr. Chinoy has at
the outset also relied on the decision of the Learned Single
Judge (Coram: Dr. D.Y. Chandrachud, J.) dated 7th March,
2011, in Vardhman Developers Ltd. vs. Thailambal Coop.
Hsg. Socy. Ltd. in Notice of Motion No. 3274 of 2010 in Suit
No. 2725 of 2010 in support of his submission that the
process of redeveloment of the Society by the Developer
does not constitute the business of the Society within the
meaning of Section 91 of the MCS Act and in view thereof no
notice under Section 164 of the MCS Act is required."
9. The learned Single Judge of this court has referred to the earlier
judgment of the learned Single Judge delivered on 7 th March, 2011 in the
case of Vardhaman Developers Ltd. Vs. Thailambal Coo. Hsg. Socy. Ltd.,
and held that no notice under section 164 of the said Act would be required
in respect of the redevelopment of the society by the developer.
10. Mr. Kamdar also placed reliance on the judgment of the learned
Single Judge of this court delivered on 26 th August, 2013 in the case of
M/s. Akash Pruthvi Lifestyle Vs. Akash Coop. Hsg. Soc. Ltd and another
in Notice of Motion (L) No. 1518 of 2013 and in particular paragraph 15
hvn .. 19 .. notice of moto no. 1081 of 2010.sxw
which reads as under :
"15. The submission made on behalf of Defendant No.2 that
this Court has no jurisdiction to entertain and try the above
Suit and that it is only the Cooperative Court which has
jurisdiction to try the present Suit, cannot be accepted. The
Hon'ble Supreme Court in the case of Margaret Almeida vs.
Bombay Catholic Cooperative Housing Soc. Ltd. 1, (which is
also followed by a Division Bench of this Court in Mohinder
Kaur Kochar vs. Mayfair Housing Pvt. Ltd. 2 ) has held that
the suit between a developer and the society or its
members cannot be a dispute which can be adjudicated by
the Cooperative Court under Section 91 of the Act. Again in
the case of Vardhman Developers Limited vs. Thailambal
Coop. Hsg. Socy. Ltd. and others, a Learned Single Judge of
this Court (Coram: Dr. D.Y. Chandrachud, J.) has, whilst
rejecting the contention that in view of the provisions of
Section 91 of the Act this Court would not have jurisdiction
to entertain and try the suit filed by the developer, held
that Section 91 of the Act brings within its purview disputes
touching inter alia the constitution, management or
business of a Society. The process of redevelopment of the
Society by the developer does not constitute the business
of the Society within the meaning of Section 91 of the Act.
Section 91 of the Act is therefore not attracted. In view
thereof, the submission advanced on behalf of Defendant
No.2 that this Court has no jurisdiction to entertain and try
the present Suit is rejected."
11. The learned Single Judge has followed the judgment of the
Supreme Court in the case of Margaret Almedia Vs. Bombay
Catholic Cooperative Housing Soc. Ltd. 2012 (5) SCC 642 holding
that the suit between the developer and the society or its members
cannot be a dispute which can be adjudicated by the Cooperative Court
under section 91 of the Maharashtra Cooperative Societies Act. This
court followed the said judgment and the earlier judgment of this court in
hvn .. 20 .. notice of moto no. 1081 of 2010.sxw
the case of Vardhaman Developers Limited and held that the process of
redevelopment of that society by the developer does not constitute the
business of the society within the meaning of section 91 of the Act.
12. Mr. Kamdar also placed reliance on the judgment of the
learned Single Judge of this court in the case of Gurudev Developers
Vs. Kurla Konkan Niwas Chs Ltd. 2013(3) Mh.L.J. 178 and in
particular paragraph 20 holding that the plaintiff developer had not
given notice under section 164 of the said Act. The said developer had
to construct society building which was not business of the society. It
is held that notice under section 164 was thus not required to be issued
and the suit was thus maintainable without such notice.
13. Mr. Kamdar, the learned senior counsel placed reliance on the
judgment of the Division Bench of this court delivered on 1 st August,
2012 in the case of Mohinder Kaur Kochar Vs. Mayfair Housing Pvt.
Ltd. And others in Appeal (L) No. 474 of 2012 and in particular
paragraphs 9, 11, 12, 13, 14, 15 to 19 which read thus :
"9. Very recently, by judgment dated 30 January,
2012 in Civil Appeal Nos. 1175-1177 of 2012
(Margret Almeida & Ors., Etc. Etc. v. the Bombay
Catholic Co-operative Housing Society Ltd. & Ors.
Etc. Etc.), the Supreme Court has interpreted the
provisions of Sections 91 and 163 of the Act, and
has held that, for a suit to be maintainable under
Section 91, and to be barred by Section 163 of the
hvn .. 21 .. notice of moto no. 1081 of 2010.sxw
Act, both the following tests must be satisfied:-
(a) the subject-matter of the suit must be covered
by the opening words of sub-section (1) of Section
91 and if at all the dispute must fall in any of the
following categories:-
(1) Constitution of the Society
(2) Elections of the "Committee or its officers"
(3) General Meetings
(4) Management of the Society or
(5) Business of the Society.
The second test is that the dispute must have
arisen between the parties, who shall belong to one
or the other categories specified under clauses (a)
to (e) of sub-section (1) (hereinafter referred to as
"enumerated persons"). Hence, it can be seen from
the scheme of Section 91 that to confer exclusive
jurisdiction on the Co-operative Court, the dispute
must satisfy two requirements, i.e., the subject-
matter of the dispute as well as the parties to the
same must be those specified hereinabove. In other
words, if either of the abovementioned two
requirements is not satisfied, then the dispute
cannot be adjudicated by the Co-operative Court. If
it is found in a given case that the subject-matter of
dispute is not covered by Section 91, an enquiry
into the question whether the parties to the dispute
fall under any of the categories enumerated under
that section would become irrelevant.
11. Without prejudice to the above submission, it is
also submitted that, in any view of the matter, the
dispute arising from implementation of the Re-
development Agreement cannot be considered as a
dispute arising from the business of respondent No.
4-Society. In support of the said contention, strong
reliance is placed on the decision of learned Single
Judge of this Court dated 7 March, 2011 in
Vardhaman Developers Limited v. Thailambal Co-
operative Housing Society Ltd. & Ors. (Notice of
hvn .. 22 .. notice of moto no. 1081 of 2010.sxw
Motion No. 3274 of 2010 in Suit No. 2725 of 2010)
as confirmed by the judgment dated 26 April, 2011
of Division Bench of this Court in Appeal No. 277 of
2011. 12. The learned counsel for the appellant
(defendant No.1), however, relied on the following
decisions in support of the contention that re-
development is also a part of the business of the
Society:- (a) Suprabhat Co-operative Housing
Society Ltd. & Anr. v. Span Builders & Anr., 2002 (6)
Bom.C.R. 257, and (b) C.F. Marconi v. Madhav Co-
operative Housing Society Ltd., 1985 (2) Bom.C.R.
357.
is
13. As far as the position in Marconi's case (supra)
concerned, the object of the Society was as
under:- "a) to engage in the business of real estate
observing principles of co-operation for the benefit
of its members and in the particular purchase and
sale of land and/or buildings and owning, buying,
selling, hiring, letting, sub-letting, exchanging,
mortgaging, accepting mortgage, renting, leasing,
sub-leasing, surrendering, accepting surrender,
accepting lease, tenancy or sub-tenancy and
constructing, reconstructing, altering or
demolishing buildings, through its own agency or
through licensed contractors and purchasing,
holding in stock or selling materials incidental to
construction, repair, overhaul or maintenance of
land and building; to fix and collect rents;" It is,
therefore, clear that the Co-operative Society in the
said case was engaged in the business of real
estate and, therefore, by the very nature of its
business, it was engaged in the activities of
purchase, sale of flats and/or buildings,
constructing, reconstructing, altering or
demolishing buildings, through its own agency or
through licensed contractors and even purchasing,
holding in stock and selling materials incidental to
construction, repair, etc.
hvn .. 23 .. notice of moto no. 1081 of 2010.sxw
14. On the other hand, even according to
defendant No.1, the objects of respondent No.4-
Society are as per the Model Bye- laws for Co-
operative Housing Societies. Byelaw No. 5 reads as
under:-
"5. The objects of the society shall be as under: *(a)
to obtain conveyance from the owner/Promoter
(Builder), in accordance with the provisions of the
Ownership Flats Act and the Rules made
thereunder, of the right, title and interest, in the
land with building / buildings thereon, the details
of which are as hereunder: The building / buildings
known / numbered as ............... constructed on the
plot / plots Nos. .............. of ............. admeasuring
............. sq. metres, more particularly described in
the application for registration of the Society;
OR
(APPLICABLE FOR PLOT PURCHASED TYPE SOCIETY)
*(a) to buy or take on lease a plot or plot nos.
.............. of ............. admeasuring ............. sq.
metres and to construct flats thereon for allotment
to the members of the society for their authorised
use. OR To purchase a building or buildings known
as ............... constructed on the plot / plots nos.
.............. of ............. admeasuring ............. sq.
metres for allotment of flats therein to the members
of the society for their authorised use.
(b) To manage, maintain and administer the
property of the society;
(c) To raise funds for achieving the objects of the
society;
(d) To undertake and provide for, on its own
account or
jointly with a co-operative institution, social cultural
or recreative activities;
(e) To do all things, necessary or expedient for the
attainment of the objects of the society, specified in
hvn .. 24 .. notice of moto no. 1081 of 2010.sxw
these bye-laws. *Struck whichever is not applicable
"
15. It is thus clear that respondent No. 4, by the
very nature of its object, had purchased land and
got the flats constructed in accordance with the
provisions of the Ownership Flats Act and the Rules
made thereunder. The object of the society was not
to engage in the business of real estate and
demolition of buildings, as it was in Marconi's case
(supra). When the Society was formed in or about
year 1965, it had purchased land and got the flats
constructed and allotted the same to its members.
After more than 40 years, when respondent No. 4-
Society has undertaken the project of re-
development of its property, it cannot be said that
respondent No.4-Society has engaged in the
business of re-development, i.e., as has specifically
been held by this Court in the decision dated 7
March, 2011 in Vardhaman Developers Limited v.
Thailambal Co-operative Housing Society Ltd. &
Ors., wherein the learned Single Judge observed as
under:-
"Section 91 (of the Act) brings within its purview
disputes touching interalia the constitution,
management or business of a society. Now in the
present case, the process of re-development of the
Society by the Developer does not constitute the
business of the society within the meaning of
Section 91. The demolition of the existing building
and the reconstruction of the building of the society
is not the business of the society. Section 91 is
therefore not attracted."
16. The judgment dated 26 April, 2011 in
Appeal No. 277 of 2011 clearly expresses the
agreement with the learned Single Judge as regards
the reasoning and conclusion of the learned Single
hvn .. 25 .. notice of moto no. 1081 of 2010.sxw
Judge.
17. At this stage, we must deal with the submission
of the learned counsel for the appellant in respect
of the decision of the learned Single Judge of this
Court in Suprabhat Co- operative Housing Society
Ltd. (supra). In that case, the object of the Society
was, inter alia, to buy or take on lease the
specified plot and to construct flats thereon for
allotment to the members of the Society for their
authorised use. The Court, therefore, held that the
construction contract, which was entered into with
the respondents, was clearly in pursuance of the
basic object of the Society. The construction
contract was in furtherance of and towards
implementing the basic object of the Co-operative
Society as tenant Co- partnership Housing Society;
and the dispute, which had arisen between the
parties, was in pursuance of the contract which was
further entered into. The Court, therefore, held that
the suit, which was instituted by the respondent-
contractors, was one which touched the business of
the Society, and the suit was not maintainable, as
notice under Section 164 of the Act was not served.
18. In the present case, as also pointed
hereinabove, respondent No. 4-Society was
formed in or about year 1965, and, therefore, the
re-development work undertaken after 40 years
cannot be treated as a part of the business of
respondent No.4-Society. The dispute regarding
development of property of a housing society may
touch the business of the society broadly in two
categories. Firstly in the kind of cases contemplated
under the judgment of C.F.Marconi (supra), where
the object of the society was to engage in the
business of real estate, purchase properties and
redevelop the purchased properties. Second type of
cases where a housing society undertakes activity
hvn .. 26 .. notice of moto no. 1081 of 2010.sxw
of initial construction of the building where the
members would reside. In the case at hand,
admittedly the object of the society is not like the
one in the case of C.F.Marconi (supra) i.e.the
business engaging in real estate. Thus we are not
concerned with the first category. 19. When a co-
operative housing society initially constructs the
buildings for its members, it is not a redevelopment,
but the initial development of the property. The
initial construction of the property for a co-
operative housing society is one of its prime
objects. The two activities namely, initial
construction of a building and its redevelopment are
different activities. By passage of time, as the
building becomes older, the Housing Society may
take a decision to repair or redevelop the property.
Such activity is totally different from initial
development of the building. The dispute arising
from such redevelopment, which becomes
necessary by passage of time, is not "business" of
the society. Such activity cannot be considered as
'touching the business' of the society. The dispute
involving members, developers, managing
committee in respect of redevelopment of the
property which becomes necessary in view of
passage of time, is not relatable to the business of
the society. The initial development of the co-
operative housing society of constructing the
building may be business of the society, but the
subsequent redevelopment is not."
14. Learned senior counsel submits that this court has dealt with the
judgments referred to and relied upon by Mr. Mehta appearing for the
applicants in the said judgment of the Division Bench and has categorically
held that if the society has undertaken the project of redevelopment of the
hvn .. 27 .. notice of moto no. 1081 of 2010.sxw
suit property, it cannot be said that the said society is engaged in the
business of redevelopment. The Division Bench of this court in the said
judgment has followed the judgment of the Supreme Court in the case of
Margret Almeida and Ors. Etc Vs. Bombay Catholic Cooperative Housing
Society Ltd. and Ors while interpreting section 91 of the Maharashtra
Cooperative Societies Act and held that the same principles also apply to
section 164 of the said Act and held that the project of redevelopment would
not amount to society engaging in the business of such redevelopment.
15. Mr. Kamdar, the learned senior counsel also placed reliance on the
judgment of the learned Single Judge of this court in the case of Harsha
Coop. Housing Society Ltd. And Ors. Vs. Kishandas Rajpal and Ors in Writ
petition No.10285 of 2009 in support of his submission that the
redevelopment project would not amount to business of the society and no
notice under section 164 is maintainable. Mr. Kamdar, learned senior
counsel also placed reliance on the judgment of the learned Single Judge
delivered on 7th March, 2011 in the case of Vardhaman Developers Limited
Vs. Thailambal Coop. Hsg. Soc. Ltd. And Ors., in Notice of Motion No. 3274 of
2010 and more particularly in paragraph 6 thereof by which it has been
held by this court that the demolition of the existing building and
hvn .. 28 .. notice of moto no. 1081 of 2010.sxw
reconstruction of the building of the society is not business of the society.
Section 91 of the said Act is thus not attracted. For the same reasons, no
notice under section 164 is required. Paragraph 6 of the said judgment read
as under :
"6. There is no merit in the contention based on
Section 91 of the Maharashtra Cooperative
Societies Act 1960. Section 91 brings within its
purview disputes touching interalia the
constitution, management or business of a
society. Now in the present case. the process of
redevelopment of the Society by the Developer
does not constitute the business of the society
within the meaning of Section 91. The demolition
of the existing building and the reconstruction of
the building of the society is not the business of
the society. Section 91 is therefore not attracted.
For the same reason, no notice under Section 164
is required. The contention based on the
guidelines of the State Government dated 3
January 2009 is without any substance. The
Development Agreement in this case was entered
into on 27 August 2008 much prior to the
enforcement of the guidelines. The contention that
the Director of the Plaintiff had no authority is
belied by the copy of the Board Resolution dated
15 May 2010 which has been placed on record.
The Resolution authorised the Director in question
to represent and sign documents, returns,
statements and other writings on behalf of the
Company to be submitted interalia before any
Court of law. Similarly there is no merit in the
contention of the objectors that the Power of
Attorney in favour of the nominee of the Plaintiff
has not been registered. The Development
Agreement admittedly has been registered. The
hvn .. 29 .. notice of moto no. 1081 of 2010.sxw
Power of Attorney executed by the Society was
similarly registered and stamp duty in excess of
Rs.19 lacs was paid. The contention based on the
Consent Affidavits is similarly devoid of
substance. It has been stated on behalf of the
Plaintiff that the Developer had forwarded the
stamp paper to the Cooperative Society. The
Consent Affidavits were executed, notarized and
remitted back to the Developer. Significantly there
is no dispute about the fact that the Consent
Affidavits have been duly executed. There being
no dispute about the fact that the Consent
Affidavits have been signed and executed by the
objecting Defendants, the objection is lacking in
substance. The contention that there is an
arbitration clause in the Development Agreement
between the Society and the Developer, over
looks the basic factual position that there is no
dispute between the Society and the Developer. It
is the objectors who are objecting to the
enforcement of the development Agreement. A
suit for obtaining necessary reliefs is therefore
maintainable. For these reasons I am of the view
that the objections which are raised on behalf of
Defendant Nos. 5 to 6, however technical, are
devoid of any material substance."
16. Mr. Kamdar, learned senior counsel also distinguished the
judgment cited by Mr. Mehta on the ground that in each of such case relied
upon by Mr. Mehta, the dispute was arising out of initial construction of
buildings and flats of the society which was as per objects for formation of
such society and not arising out of any redevelopment project. In all these
hvn .. 30 .. notice of moto no. 1081 of 2010.sxw
matters the suit was dismissed on the ground that notice under section 164
of the Maharashtra Cooperative Societies Act was not issued when there was
dispute regarding the initial construction of the building and flats by the
society having arisen which was object of the said society and was not the
case of redevelopment.
17. Mr. Madon, learned senior counsel appearing on behalf of the first
defendant society submits that the society is supporting the plaintiff and is
formal party to the suit. The society is not opposing prayer clause (a) of the
plaint. Learned senior counsel submits that the resolution passed by the
society is not challenged by the applicants. Mr. Madon, placed reliance on the
judgment of the Division Bench of this court in the case of Girish Mulchand
Mehta and another Versus Mahesh S.Mehta and another,
2010( 2)Mh.L.J. 657. It is submitted by learned senior counsel that once the
resolution is passed by defendant no. 1 society by which the society has
approved the terms and conditions of the development agreement between
Plaintiffs and defendant no. 1, merely because development agreement is not
acceptable to the applicants, who are in minority, the same cannot be the
basis for not abiding by the decision of the overwhelming majority of the
general body of the society. It is submitted that the person once become
hvn .. 31 .. notice of moto no. 1081 of 2010.sxw
member of the cooperative society, he loses his individuality with the Society
and he has no independent rights except those given to him by the statute and
byelaws. Learned senior counsel submits that the society has not opposed the
suit on the ground of want of notice under section 164 and would abide by
the resolution passed by the society. The applicants thus have no locus
independently to take out this notice of motion and seeks dismissal of the suit
on the ground that the suit against the society is not maintainable for want
of notice under section 164 of the said Act. Paragraph 16 of the said
judgment in the case of Girish Mehta (supra) reads thus :
"16. In the present case, it is not in dispute that the General
Body of the Society which is supreme, has taken a conscious
decision to redevelop the suit building. The General Body of the
Society has also resolved to appoint the Respondent No. 1 as the
Developer. Those decisions have not been challenged at all. The
Appellants who were members of the Society at the relevant
time, are bound by the said decisions. The Appellants in the
dispute filed before the Cooperative Court have only challenged
the Resolution dated 27/4/2008, which challenge would merely
revolve around the terms and conditions of the Development
Agreement. As a matter of fact, the General Body of the Society
has approved the terms and conditions of the Development
Agreement by overwhelming majority. Merely because the terms
and conditions of the Development Agreement are not
acceptable to the Appellants, who are in minuscule minority
(only two out of twelve members), cannot be the basis not to
abide by the decision of the overwhelming majority of the
General Body of the Society. By now it is well established
position that once a person becomes a member of the
Cooperative Society, he looses his individuality with the Society
and he has no independent rights except those given to him by
the statute and Bye-laws. The member has to speak through the
hvn .. 32 .. notice of moto no. 1081 of 2010.sxw
Society or rather the Society alone can act and speaks for him
qua the rights and duties of the Society as a body (see Daman
Singh and Ors. v. State of Punjab reported in
MANU/SC/0392/1985 : AIR 1985 SC 973). This view has been
followed in the subsequent decision of the Apex Court in the case
of State of U.P. v. Chheoki Employees Cooperative Society Ltd.
reported in MANU/SC/0332/1997 : AIR 1997 SC 1413. In this
decision the Apex Court further observed that the member of
Society has no independent right qua the Society and it is the
Society that is entitled to represent as the corporate aggregate.
The Court also observed that the stream cannot rise higher than
the source. Suffice it to observe that so long as the Resolutions
passed by the General Body of the Respondent No. 2 Society are
in force and not overturned by a forum of competent
jurisdiction, the said decisions would bind the Appellants. They
cannot take a stand alone position but are bound by the
majority decision of the General Body. Notably, the Appellants
have not challenged the Resolutions passed by the General Body
of the Society to redevelop the property and more so, to appoint
the Respondent No. 1 as the Developer to give him all the
redevelopment rights. The propriety rights of the Appellants
herein in the portion (in respective flats) of the property of the
Society cannot defeat the rights accrued to the Developer and/or
absolve the Society of its obligations in relation to the subject
matter of the Arbitration Agreement. The fact that the relief
prayed by the Respondent No. 1 in Section 9 Petition and as
granted by the Learned Single Judge would affect the propriety
rights of the Appellants does not take the matter any further.
For, the propriety rights of the Appellants in the flats in their
possession would be subservient to the authority of the General
Body of the Society. Moreso, such rights cannot be invoked
against the Developer (Respondent No. 1) and in any case,
cannot extricate the Society of its obligations under the
Development Agreement. Since the relief prayed by the
Respondent No. 1 would affect the Appellants, they were
impleaded as party to the proceedings under Section 9 of the
Act, which was also necessitated by virtue of Rule 803E of the
Bombay High Court (Original Side) Rules. The said Rule reads
thus:
hvn .. 33 .. notice of moto no. 1081 of 2010.sxw
R803E. Notice of Filling Application to persons likely to be affected.-
Upon any application by petition under the Act, the Judge in chambers
shall, if he accepts the petition, direct notice thereof to be given to all
persons mentioned in the petition and to such other persons as may seem
to him to be likely to be affected by the proceedings, requiring all or any
of such persons to show cause, within the time specified in the notice,
why the relief sought in the petition should not be granted."
18. Mr. Madon, learned senior counsel submits that in any event
prayer clause (a) in the plaint is irrelevant. The issue of jurisdiction has to
be decided based on the averments in the plaint. It is submitted that the
society in this case is a formal party.
19. In rejoinder, Mr. Mehta, the learned counsel for the applicant
submits that whether the party is formal or not, section 164 of the said Act
applies and since there is no compliance of the said provisions, the suit
deserves to be dismissed.
20. It is not in dispute that the resolution passed by the society to enter into
redevelopment agreement with the plaintiff, is not challenged by the
applicants. The consent terms filed by and between the plaintiff and
defendant no. 1 in Arbitration Petition by which resolution of the society by
which development agreement was terminated, has been withdrawn and
those consent terms or resolution of the society has not been challenged by
the applicants in any court of law. Defendant no. 1 is not opposing the
hvn .. 34 .. notice of moto no. 1081 of 2010.sxw
claim on the ground that the notice under section 164 is not issued by the
plaintiff before filing the said suit.
21. On perusal of the judgment of the Division Bench of this court in the
case of Girish Mehta (supra), it is clear that once the person becomes
member of the cooperative society, he loses his individuality in the society and
has no independent rights except those given to him by the statute and
byelaws. The member has to speak through the society or rather the society
alone can act and speaks for him qua the rights and duties of the Society as a
body. In my view, since society has no objection about the maintainability of
the suit for want of notice under section 164 of the said Act, and in view of
the fact that no such notice is required under section 164 for filing suit
against the members of the society, the applicants have no independent locus
to seek dismissal of the suit on the ground of want of notice under section
164 of the said Act.
22. The question arises for consideration of this court is whether the
resolution passed by defendant no.1 society to confer development rights in
favour of the plaintiff for redevelopment of the property of the first defendant,
would amount to business of defendant no. 1 society and any dispute
arising out of such resolution would require compliance of notice under
section 164 of the Maharashtra Cooperative Housing Societies Act, 1960.
hvn .. 35 .. notice of moto no. 1081 of 2010.sxw
23. It is not in dispute that in the object clause of the society for
which society was formed, redevelopment of the property of the society was
not the object or business of the society. In my view, the members of the
society having agreed in the general body meeting to get the property
redeveloped for the benefit of its members, through plaintiff, would not
amount to business of the society and notice U/s. 164 of the Maharashtra
Cooperative Societies Act, 1960 would not be mandatory before filing any
such suit by the plaintiffs.
24. All the judgments referred to and relied upon by the applicants are
clearly distinguishable in the facts of this case. All such judgments are
referred in the subsequent judgments which are relied upon by Mr.
Kamdar, learned senior counsel appearing for the plaintiff and Mr. Madon,
learned senior counsel appearing for defendant no. 1. On perusal of the
judgments relied upon by Mr. Mehta, it is clear that in each of such
judgment, the dispute had arisen out of resolution passed by the societies for
initial construction of the buildings and flats and not arising out of
redevelopment of such properties. The Division Bench of this court in the case
of Mohinder Kaur (supra) has followed the judgment of the Supreme Court
hvn .. 36 .. notice of moto no. 1081 of 2010.sxw
in the case of Margaret Almeida (supra) by which it was held that since the
dispute was not touching the business of the society, in view of the project of
redevelopment, the dispute was not maintainable under section 91 of the
Maharashtra Cooperative Societies Act. The Division Bench of this court has
also referred to the judgment of the learned Single Judge in the case of
Vardhaman (supra) which has been upheld by the Division Bench in Appeal
No. 277 of 2011. After considering the judgment of the Supreme Court and
earlier judgments of this court including the judgment referred to and relied
upon by Mr. Mehta, the learned counsel for the applicants, the Division
Bench of this court has held that the society had undertaken the project of
redevelopment of its property and it cannot be said that the respondent
society was engaged in the business of redevelopment. The Division Bench
had considered the model byelaws of cooperative housing societies. It is
held by the Division Bench that when the cooperative housing society
initially constructs a building for its members, it is not redevelopment but is
initial development of the property. Initial construction of the property in the
cooperative housing society is one of its prime objects. It is held that the
initial construction of building and its redevelopment are different activities.
The dispute arisen from such redevelopment which becomes necessary by
passage of time, is not "business" of the society and cannot be considered as
hvn .. 37 .. notice of moto no. 1081 of 2010.sxw
touching the business of the society. The said activity cannot be considered
as "touching the business" of the society. The dispute involving members,
developers, managing committee in respect of the redevelopment of the
property which becomes necessary in view of the passage of time is not
relatable to the business of the society. I am respectfully bound by the
judgment of the Division Bench of this court which is directly applicable to
the facts of this case. Mr. Mehta, learned counsel for the applicant did not
dispute that the agreement entered into between the plaintiff and defendant
no. 1 society was for redevelopment of the property. It is not in dispute that
the resolutions passed by the society are not challenged by the applicants in
any court of law.
25. In my view, since the agreement entered into between the
plaintiff and defendant No. 1 is for redevelopment which is not the object
for which the society was formed, and thus would not be business of the
society. Any such dispute arising between plaintiff and defendant no. 1
arising out of re-development would not be arising out of the business of the
society and thus section 164 of the Maharashtra Cooperative Housing
Societies Act, 1960 would not be applicable to the suit filed by the plaintiff.
Merely because it is stated in the plaint that in view of the urgency, the
hvn .. 38 .. notice of moto no. 1081 of 2010.sxw
plaintiff did not issue notice under section 164 or seeks dispensation thereof,
would be irrelevant in view of the fact that no such notice is required. I am
not inclined to accept the submission made by Mr. Mehta that once it is the
case of the plaintiffs themselves that notice was required under section 164,
plaintiffs cannot be allowed to plead that no such notice is required. The
requirement of notice is under section 164 of the Act. The court has to
consider whether the said section is applicable at all in the facts of this
case. Even if, such reference is made in the plaint, it would not make it
mandatory for the plaintiffs to issue notice since it is not required at all.
26. For the aforesaid reasons, in my view there is no substance in any
of the submissions made by Mr. Mehta, learned counsel for the applicants and
the Notice of Motion thus deserves to be dismissed.
26. I, therefore, pass the following order :
Notice of motion is dismissed.
There shall be no order as to cots.
(R.D.DHANUKA, J.)
