All India Handloom Fabric ... vs Phelps & Co. P. Ltd.
2000 Latest Caselaw 205 Del

ORDER

S.K. Agarwal, J.

1. This appeal is directed against the judgment and decree dated 24th July, 1999 passed by the Additional District Judge, Delhi decreeing the suit for possession filed by the respondent/plaintiff against the appellant/defendant, in respect of the premises No. 9-A, Connaught Place, New Delhi (hereinafter referred to as the 'suit premises') and further passing a decree of damages/mesne profit at the rate of Rs. 1,50,000/- per month with effect from 1st January, 1989 till the date of possession.

2. Facts giving rise to this appeal are that respondent/plaintiff filed a suit for possession and for recovery of damage against appellant/tenant alleging therein that vide lease dated 20th May, 1967 the appellant was inducted as a tenant in the suit premises for a period of 10 years with effect from 1st January, 1967; the term of the lease expired in 1977 and no fresh lease was executed and the appellant continued to be in possession of the suit premises because of protection provided by Delhi Rent Control Act, 1958 ; however, when the Rent Act was amended the tenancy of the appellant was terminated by a registered acknowledgement due notice dated 13th Decemer, 1998 and the tenant was called upon, to surrender the vacant possession of the suit premises on 31st December, 1998. It was further pleaded that after the termination of the tenancy (1st January, 1989), the appellant was liable to pay damages at the rate of Rs. 5000/- per day. The appellant/tenant contested the above suit, inter alia, on the ground that the society was in occupation of the suit premises since 1960, which was let out to it by Government of India; that suit was not maintainable for want of notice under Section 101 of the Multi-State Cooperative Societies Act, 1984 (for short the Act) as one of the main objectives of the society was to purchase or to take on hire or otherwise acquire land and/or building or premises and construct suitable buildings, apartments and provide furniture and other fittings within India and/or abroad, for the establishment of showrooms, emporia or other agencies, for publicity and/or for sale of handloom goods.

3. On the pleadings of the parties, following issues were framed:_

1. Whether the tenancy of the defendant has been legally and validly terminated as alleged, if so, its effect ? OPP

2. Whether the suit is barred for want of notice under Section 101 of Multi-State Cooperative Societies Act, 1984 as alleged, if so its effect ? OPD.

3. Whether the provisions of Delhi Rent Control Act as amended in 1988 have no application to the present suit as alleged, if so its effect ?OPD.

4. Whether the plaintiff is entitled to the relief of possession as claimed ? OPP

5. Whether the plaintiff is entitled to recover any mesne profits, if so at what rate, for what period and to what amount ? OPP

6. Relief.

4. Respondent/plaintiff examined PW1, Vikramjit Singh, who proved certified copy of its incorporation, Ex. PW 1/1, copy of the registered sale deed, Ex. PW 1/2. He further stated that initially the lease deed was for a period of 10 years and after the expiry of the said period, lease was not extended, however, the possession of the suit premises of the tenant remained protected under the Delhi Rent Control Act : when the same, was amended tenancy of the appellant/tenant was terminated by a registered notice dated 13th December, 1988. The appellant/tenant examined DW1 R. Uthaman, Additional Secretary of the Society who deposed that the society was in occupation of the suit premises since 1960, which was let out to it by the Government of India ; the society has its own bye-laws since the date of its registration; society was the lessee of the respondents in the premises since 1967, which was a registered society under the Multi-State Cooperative Societies Act, 1984. He deposed that the suit was not maintainable for want of notice under Section 101 of the said Act.

5. The learned trial court vide impugned judgment, decreed the suit for possession and also recovery of mesne profits/damages, as aforesaid in favour of respondents. Aggrieved bythe same the appellant has filed this appeal. We have heard learned counsel for the parties and have been taken through the record.

6. Learned counsel for the appellant agrued that the appellant is a National Multi-State Cooperative Society as defined in Section 3(m) of Multi-State Cooperative Societies Act, 1984. As per the Bye-laws of the society one of the function of the society is to purchase or o take on hire or otherwise acquire land and/or building or premises and construct suitable buildings, apartments and provide furniture and other fittings within the Indian Union and/or abroad for the establishment of showrooms, emporia or other agencies, for publicity and/or for sale of handloom goods etc. The premises were originally rented to the appellants by the Government of India, which later on came to be acquired by the respondents/plaintiff and the same were again rented out to the appellant vide lease deed dated 20th May, 1967 for a period of 10 years. It was agrued that the dispute raised in the suit touches the business of the society, therefore, the suit was liable to be dismissed for want of notice under Section 101 of the Act. Learned counsel for the respondent/plaintiff argued to the contrary.

7. As per the settled law the question whether the dispute touches the business of the society would depend upon aims and objects of the society as provided by Rules and Bye-laws governing it. In Deccan Merchants Cooperative Bank Ltd. Vs. Dalchand Jugraj Jain, AIR 1969 1320 Supreme Court made the following observations :_

"18. The question arises whether the dispute touching the assets of a society would be a dispute touching the business of a sociey. This would depend on the nature of the society and the rules and bye-laws governing it. Ordinarily, if a society owns builings and lets out parts of buildings which it does not require for its own purpose it cannot be said that 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...."

8. The real question, whether the suit is or is not touching upon the constitution, management or business of the society, would thus depend upon the nature of the society, and the rules and the bye-laws governing it. Paragraph 4(g) of bye-laws of the appellant, society, on which reliance was placed, reads as under :

(g) to purchase or to take on hire or otherwise acquire land and/or building or premises and construct suitable buildings, apartments and provide furniture and other fittings within the Indian Union and/or abroad for the establishment of showrooms, emporia or other agencies, for publicity and/or for sale of handloom goods or for the purpose of achieving the objects for which the All India Society is established and also for essential services and wherever necessary or feasible for residential accommodation for persons related to or concerned with the All India Society.

9. Perusal of the above clearly reveals that one of objects of the appellant society is to purchse, take on hire or otherwise acquire land and/or building or premises and construct suitable buildings, apartments and provide furniture and other fittings within the Union and/or abroad for the establishment of showrooms, emporia or other agencies for publicity and/or for sale of handloom goods.

10. In our consideration view, the dispute had arisen out of a transaction, which relates to one of the functions to be performed by the society. Procurement of building or a plot or constructing building thereon and furnishing the same, opening of showrooms and emporia for sales promotion of the handloom goods in India and abroad is admittedly one of the main functions of the society. The subject-matter of the dispute is thus covered by Section 101 of the Act which reads as under :-

"No suit shall be instituted against a Multi-State Cooperative Society or any of its officers in respect of any act touching the constitution, management or the business of the Society until expiration of ninety days next after notice in writing has been delivered to the Central Registrar or left at his office stating the cause of action, the name, description and place of residence of the plaintiff and the releif which he claims, and the plaint shall contain a statement that such notice has been so delivered or left."

11. The use of the expression "any act" in Section 101 of the Act and also the use of the expression "touching the business" occurring in the said section also includes any legal act or illegal omission. Observations made by the Supreme in Deccan Merchants case (supra) are fully applicable to the facts of this case. The nature of the society and the bye-laws governing it suggest that one of the functions of the society is to make showrooms and the emporiums for sale of handloom goods. To take on hire a building or premises is likewise a function of the society. Admittedly the premises were hired for its showroom by the society. As such the suit for eviction from the said premises could not be instituted against the appellant society without serving a notice as provide under Section 101 of the Act. The purpose of the notice under Section 101 is akin to the notice under Section 80 of the Code of Civil Procedure, 1908. Section 101 of the Act is mandatory in nature. In the absence of notice under Section 101 suit could not be filed against a society registered under the Act. In this case no such notice was served by the respondent/plaintiff on the Central Registrar before the filing of the suit. The learned trial court while dealing with this aspect of the case failed to correctly appreciate that one of the objects of the society, as per its bye-laws itself is o open showrooms, emporia etc, for promoting sales of handlooms in India and abroad. Findings recorded by the trial court in this regard are not sustainable in law and are set aside.

12. In support of the claim for damages/use and occupation charges, no evidence was adduced by the respondent. The trial court proceeded to award damages by placing reliance on a decision in the case of Mrs. (Dr.) P.S. Bedi Vs. The Project & Equipment Corporation of India Ltd. . Needless to point out that evidence recorded in one case or the findings recorded therein regarding the quantum of damages and the rate at which the same would be payable, cannot be formed as the basis for awarding damages/mesne profits in another case, as has been done in this case, particularly in the absence of any evidence as regards comparison of the two properties. Therefore, the findings of the trial court awarding damages/mesne profits at the rate of Rs. 5000.00 per day is not sustainable.

13. For the foregoing reasons the appeal is allowed. The impugned judgment and decree dated 24th July, 1999 passed by the learned trial court is set aside. The suit is liable to be dismissed. No order as to costs.