Margret Almeida & Ors.Etc.Etc vs Bombay Catholic Coop.Hng.Sty.Ltd.& ...

CIVIL APPEAL NOS. 1175-1177 OF 2012

[Arising out of SLP (C) NO.28611-28613 OF 2011]

Margret Almeida & Ors. Etc Etc. ...Appellants

Versus

The Bombay Catholic Co-operative Housing

Society Ltd. & Ors. Etc. Etc. ....Respondents

WITH

CIVIL APPEAL NO. 1178 OF 2012

[Arising out of SLP(C) No.29507 of 2011]

CIVIL APPEAL NOS. 1179-1180 OF 2012

[Arising out of SLP(C) Nos. 30143-30144 of 2011]

J U D G M E N T

CHELAMESWAR, J.

1. Leave granted.

2. These appeals arise out of a common order dated 29th August,

2011 of the Division Bench of the Bombay High Court passed in

three writ petitions and two suits, 144 and 145 of 2010.

1 3. By the said common order, it was held, among other things,

that the two suits are not maintainable in view of the provisions of

Sections 91 and 163 of the Maharashtra Co-operative Societies Act,

1960 (hereinafter `the Act', for short). We are not concerned with

the remaining part of the Division Bench's judgment as the instant

special leave petitions are preferred only against that part of the

Division Bench's judgment. The brief factual background of this

litigation is as follows.

4. The first respondent is a Society which was originally

incorporated in the year 1914. The full particulars of such

incorporation are not available at this juncture on record and are

also not necessary for the present purpose. It is sufficient to state

that it is admitted on all hands that it is a housing cooperative

society and the Act governs the affairs of the said Society.

5. It is also an admitted fact on all hands that the said Society

has different classes of members known as owners, lessees,

allottees, tenants, etc. It is also an admitted fact that the total

membership is 762 out of which 69 members fall under the

classification of tenant members. However, the exact rights and

obligations of these various classes of members, vis-`-vis the first

respondent Society or these various classes of members inter se are

also not available on record.

2 6. It appears from the record that, as on today, the first

respondent Society owns an extent of approximately 21,774.10 sq.

mts. of land in the city of Mumbai alongwith structures popularly

known as Wellingdon Catholic Colony. It appears that the said

property was part of a larger parcel of land earlier owned by the

first respondent Society but is not owned by the Society now.

Some of the `tenant members' (including the appellants herein) of

the Society initiated proceedings for the division of the Society

sometime in the year 1970 invoking Section 18 of the Act by

making an application to the Registrar. The said application has a

very long and chequered history, the details of which are not

necessary for the present purpose except to state that by virtue of

the judgment under appeal, the application is still open and

pending.

7. In the meanwhile, in a resolution came to be passed on the

6th December, 2009 by the General Body of the Society to sell the

above mentioned land in favour of respondents No.22 and 23. In

furtherance of the said resolution, a sale deed/conveyance came to

be executed on 7th December, 2009. Aggrieved by the said

resolution and the sale, two suits 144 and 145/2010 came to be

filed invoking the original jurisdiction of the Bombay High Court. A

3

copy of the plaint in the suit No.145/2010 is placed on record in

these SLPs. The principal prayer in both the civil suits is

"(a) for a declaration that the said Resolution dated 6th

December, 2009 (Exhibit `K' hereto) and the said

Conveyance dated 7th December, 2009 (Exhibit `M' hereto)

are invalid, illegal and void ab initio and/or the same are

voidable as against the Plaintiffs and the Tenant members of

Defendant No.17 Association;

(a-i) That this Hon'ble Court be pleased to pass Order

declaring Section 164 of Maharashtra Co-operative Societies

Act, 12 Violation of Article 14 of the Constitution of India

and the same ought to be struck down."

It can be seen from prayer (a) extracted above that the plaintiffs

seek in effect two declarations - (i) that a resolution dated 6th

November, 2009 of the first respondent Society, and (ii) a

Conveyance dated 7th December, 2009 executed on behalf of the

first respondent Society in favour of respondents 22 and 23, are

either illegal, void ab initio or in the alternative that they are

voidable as against the plaintiffs (of whom at least some) are the

appellants herein and claim to be the tenant members of the

respondent society (we may state here that there is a dispute

regarding the membership of some of the appellants herein but, for

the present case, we do not go into the dispute but refer the

appellants, only for the sake of convenience, as `tenant members').

The substance of the factual and legal basis (asserted in the plaint)

on which the plaintiffs seek the two declarations (referred to earlier)

in the civil suits, and argued at the Bar is that the `tenant members'

alone have the right, title and interest over the property sought to

4

be sold by the impugned conveyance dated 7th December, 2009 and

that the other members of the Society have no right, title or

interest in the property in dispute. The plaintiffs expect an order of

bifurcation of the respondent No.1 Society and also to get a

declaration in their favour of the right, title and interest in the

property in dispute. The plaintiffs also therefore claimed appropriate

interim orders regarding the property during the pendency of the

suits.

8. The defendants raised a preliminary objection regarding the

maintainability of the suits in view of Sections 91 and 163 of the Act

which was rejected by a learned single judge but found favour with

the Division Bench of the Bombay High Court resulting in that part

of the judgment which is under appeal now.

9. By the judgment under appeal it is held that:

"In our opinion, therefore, what is principally challenged

in the Civil Suit is the resolution of the general body. And

challenge to the conveyance is ancillary"

And therefore opined:

"That the Plaintiffs could have filed the dispute before the

Co-operative Court challenging the resolution of the

General Body and the consequent execution of

conveyance in favour of M/s. Sumer associates and could

have joined M/s. Sumer associates as a Defendant in that

dispute. In our opinion thus the entire subject matter of

the Civil Suit could have been the subject matter of the

dispute filed under Section 91."

5

10. Shri Mukul Rohtagi and Dr. Abhishek M. Singhvi, learned

senior counsel appearing for the appellants argued that irrespective

of the fact whether a declaration regarding illegality of the

impugned resolution dated 6th December, 2009 could be granted by

the ordinary civil courts in view of Section 91 of the Act, a

declaration regarding the voidness of the impugned conveyance

dated 7th December, 2009 could only be given by a competent civil

court contemplated under Section 9 of the Code of Civil Procedure

(hereinafter `the Code' for short) because such conveyance is in

favour of a person who is not a member of the Society. It is

submitted that the ultimate dispute and grievance of the plaintiffs is

against the alienation of the property in favour of the respondents

22 and 23 herein by the impugned conveyance which has the effect

of depriving the plaintiffs of their right, title and interest in the

property in dispute. Such a conveyance could only be declared

illegal and void ab initio by a competent civil court contemplated

under Section 9 of the Code. The impugned resolution, which

purportedly authorises the sale of the property covered by the

impugned conveyance, by itself does not transfer or create any

interest in the property adverse to the interest of the plaintiffs.

Therefore, even if it is assumed that the legality of the impugned

resolution is amenable to the jurisdiction of the Co-operative Court

functioning under Section 91, the suits in question could not have

been held to be not maintainable as the jurisdiction to adjudicate

6

upon the incidental question regarding the impugned resolution

dated 6th December, 2009 would stand subsumed by the jurisdiction

of the competent civil court which alone is competent to decide the

legality of the impugned conveyance dated 7th December, 2009. The

learned counsel further argued that the ouster of the jurisdiction

conferred on the Civil Courts under Section 9 of the Code is to be

conceded only where there is an express exclusion by the language

of the Statute or if such an ouster arises by a necessary implication

from the Scheme of a particular Statute. It is argued that there is

nothing either in the language of Section 91 or the Scheme of the

Act which would lead to a conclusion that the jurisdiction conferred

under Section 9 of the Code is excluded to adjudicate the suits in

question.

11. On the question of interim order during the pendency of the

suits, the learned counsel argued that in view of the pendency of

the claim of the plaintiff for the bifurcation of the respondent society

(and according to the appellants, they have a very strong case), the

disputed property must be preserved as it is and the balance of

convenience is in favour of the appellants. The learned counsel

argued that the High Court grossly erred in examining the

maintainability of the suits in the interlocutory application filed by

the plaintiff seeking interim order.

7 12. On the other hand, learned senior counsel Shri C.A.

Sundaram appearing for the respondents argued that the language

of Section 91, sub-section 1(c) of the Act clearly indicates that the

jurisdiction of the Co-operative Court contemplated under Section

91 is not confined only to the adjudication of the disputes between

the society and its members or servants etc. enumerated in Section

91(1)(a), (b), (d) and (e) but also extends to the disputes where

one of the parties to the dispute is a person other than a member of

the society.

13. According to the learned counsel, such conclusion is

irresistible from the language of Section 91(1) (c) and Section 94

(3) (a).Hence, the judgment under appeal does not call for any

interference.

14. Shri K.K. Venugopal, learned senior counsel submitted that

the course adopted by the Bombay High Court in examining the

maintainability of the suits in the Interlocutory Application filed by

the plaintiffs is not only justified but also mandatory in view of the

language of Section 9A of the Civil Procedure Code inserted by the

State Legislation of Maharashtra.

15. On the question of interim arrangement to be made during

the pendency of the suit, learned counsel for the respondent

8

submitted that the suit itself is based on the expectancy that the

tenant Members would succeed in their application for the

bifurcation of the society, and upon bifurcation, the tenant members

would be entitled for the exclusive title and possession of the

disputed property. Even if the above mentioned understanding of

the plaintiff's is right since the plaintiffs are only some of the tenant

members of the society, they would not be entitled for the title and

possession of the entire disputed property, but only a part of it. It

is argued that since other tenant members have no objection to the

alienation of the property in dispute in favour of the respondent no.

22 and 23, impeding of conveyance dated 7th December, 2009

would not be justified as the impugned resolution and the

conveyance have made adequate provisions for safeguarding the

interest (if any) of the appellants.

16. We shall now examine the issue of maintainability of the suits.

As rightly contended by the learned counsel for the appellants the

Civil Court's jurisdiction to adjudicate Civil disputes is unlimited,

subject only to the limitations imposed by law either expressly or

by necessary implications. The law in this regard is well settled and

needs no elaboration. Therefore, it becomes necessary for us to

examine whether there is anything in the language of Section 91 or

Section 163 which expressly excludes the jurisdiction of the Civil

Courts in the context of the suits in question. Section 163 of the

9

Act bars the jurisdiction of Civil and Revenue Courts reads as

follows:

"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

(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

(b) any dispute required to be referred to the Co-

operative Court for decision.

(c) any matter concerned with the winding up and

dissolution of a society.

(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.

(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 upon the

merits or upon any other ground whatsoever."

17. Section 163 (1)(b) and Section 91 (3) are complimentary to

each other. Section 91(3) reads as follows:

"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)"

1

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:-

1) Registration of the society;

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

3) Dissolution of the Committee of the society;

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

5) Any disputes which is required to be referred to the Co-

operative Court under Section 91.;

6) Any matter concerned with the winding up and dissolution

of the society etc.

19. 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."

20. It is necessary to examine the scope of Section 91(1), which

reads as follows

"(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

1

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;-

(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 De-Registered Society),

(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;)

(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:

(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:

(e) any other society , or the Liquidator of such a

society or de-registered society or the official

Assignee of such a de-registered society."

21. It can be seen from the above extract that the Section makes

it mandatory that certain disputes, the nature of which is specified

1

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

1) Constitution of the society

2) Elections of the "Committee or its officers"

3) Conduct General Meetings

4) Management of the society or

5) Business of the society.

22. Section 91 also stipulates that the disputes which are

mandatorily required to referred to the Co-operative Court for an

adjudication must also be disputes arising between the parties to

the dispute who should belong to one or the other categories

specified under clauses (a) to (e) to sub-section (1), hereinafter

referred to as `enumerated persons', for the sake of convenience. It

can be seen from the scheme of Section 91, to confer exclusive

jurisdiction on the Co-operative Court, the dispute must satisfy two

requirements. It was held so in Marine Times Publications (P) Ltd.

Vs. Shriram Transport & Finance Co. Ltd., (1991) 1 SCC 469 at para

11:

"11. Before a dispute can be referred to a Cooperative Court

under the provisions of Section 91(1) of the said Act it is

not only essential that the dispute should be of a kind

1 `Co-operative Court' means a court constituted under this Act to decide

disputes referred to it under any of the provisions of the Act.

1

described in sub-section (1) of Section 91 but it is also

essential that the parties to the said dispute must belong to

any of the categories specified in clauses (a) to (e) of sub-

section (1) of the said section."

Both the subject matter as well as the parties to the dispute must

be those specified under the section. In other words if either of the

above mentioned two requirements is not satisfied then the dispute

cannot be adjudicated by the Co-operative Court. If one of the

parties to the dispute is not an enumerated person, the question

whether the subject matter of the dispute is one which falls

exclusively within the jurisdiction of the Co-operative Court need

not be examined. Similarly, 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 Section 91 would become

irrelevant.

23. However, learned counsel for the respondent argued that in

view of the language of Section 91(1) (c) and Section 94(3) the

various classes of persons contemplated under Section 91 to bring

the dispute within the jurisdiction of the Co-operative Court (if the

subject matter of the dispute is otherwise exclusively amenable to

the jurisdiction of the Co-operative Court), includes persons other

than the members of the society though not covered by clauses (a),

(b), (d) and (e) of Section 91(1). The leaned counsel laid emphasis

1

on the clause "persons other than a member of the society"

occurring under Section 91(1) (c) and the clause "whether he be a

member of the society or not has acquired any interest in the

property of a person who is a party to a dispute" occurring under

Section 94(3)(a) clearly demonstrate that the jurisdiction of the Co-

operative Court is not confined only to those cases where both the

parties are either members or officers etc. specified in clauses (a),

(b), (d) and (e) of Section 91(1).

24. To examine the correctness of the submissions made by Shri

C.A. Sundaram, it requires an analysis of Section 91(1)(c) and 94

(3). When Section 91(1)(c) stipulates that persons other than the

members of the society with whom the society has any transaction

as one of the classes of persons who could be parties to a dispute

amenable exclusively to the jurisdiction of the Co-operative Court,

such a class is not an unqualified class. The said sub-section

further qualifies the said class by expressly mentioning that the

transactions of such persons with a society should be a transactions

"in respect of which restrictions and Regulations have been made or

prescribed under Sections 43, 44, or 45 of the Act". Therefore, to

understand the exact nature of the above mentioned class, an

examination of the scheme of Sections 43, 44 is necessary.

25. Section 43 (1) reads as follows:

1 "43. (1) A society shall receive deposits and loans from

members and other persons, only to such extent, and under

such conditions, as may be prescribed, or specified by the

by-laws of the society."

The said provision recognises the legal authority of a co-operative

society to receive deposits and loans either from the members or

other persons. It further stipulates that the receipt of deposits and

loans is permissible only to the extent and subject to such

conditions as may be prescribed.

26. Section 44 on the other hand deals with the legal authority of

the co-operative society to make a loan/lend money. Section 44 in

so far as it is relevant reads as follows.

"44.(1) No society shall make a loan to any person other than a

member or on the security of its own shares, or on the

security of any person who is not a member.

Provided that with the special sanction of the Registrar,

a society may make loans to another society.

(2) Notwithstanding anything contained in the foregoing

sub-section, a society may make a loan to a depositor on

the security of his deposit.

(3) ***************************"

It can be seen from sub-section (1) that it prohibits a society from

lending money to a person other than a member. It also prohibits

lending of money by the society even to a member on the security

of the shares of the same society. Further it also prohibits lending

of money to a member on security to a person who is not a

1

member. However, the proviso to sub-section (1) authorises a

society to lend money to any other society with the special sanction

of the Registrar.

27. Sub-section (2) expressly authorises the society to lend

money to a depositor on the security of his deposits. Such an

authorisation is declared to be notwithstanding anything contained

in sub-section (1). In other words, the restriction contained in sub-

section (1) that a society shall not lend money to a person other

than a member is relaxed with reference to a depositor, who is not

a member of the society, as we have already noticed under Section

43 that the deposits or loans can be received by a society not only

from its members but also from persons other than members.

28. Section 45 makes a general declaration that the transactions

of the society with persons other than its members shall be subject

to such restrictions as may be prescribed. Section 45 reads as

follows:-

"45. Save as is provided in this Act, the transactions of a

society with persons other than members shall be subject

to such restrictions, if any, as may be prescribed."

29. Therefore, where Section 91 (1) (c) speaks of persons other

than the members of the society, it is actually referring to persons

other than the members of the society who have deposited money

1

with the society or who have either lent or borrowed money from

the society in accordance with the provisions of Sections 43 and 44

and subject to the conditions and limitations if any prescribed with

reference to such lending to or borrowing from the society.

30. Coming to the language and Scheme of Section 94(3).

Section 94(1) enumerates the powers of the Cooperative Court such

as the power of summoning the witness and documents etc. Sub-

section (3)(a) reads as follows:

94. Procedure for settlement of disputes and power of

Co-operative Court

xxx xxx xxx xxx

(3)(a) If the Co-operative Court is satisfied that a person

whether he be a member of the society or not has acquired

any interest in the property of a person who is a party

to a dispute it may order that the person who has acquired

the interest in the property may join as a party to the

dispute; and any decision that may be passed on the

reference by the Co-operative Court shall be binding on the

party so joined in the same manner as if he were an original

party to the dispute."

[emphasis supplied]

The substance of sub-section (3)(a) is that if the Co-operative Court

in the course of adjudication of a dispute is satisfied that any person

other than a party to the dispute "has acquired any interest in the

property of a party to a dispute", then the Co-operative Court is

empowered to implead such a 3rd party as a party to the dispute.

Such a 3rd party may or may not even be a member of the society.

1 The sub-section further declares such an impleaded 3rd party to be

bound by the decision of the Co-operative Court.

31. It is argued by Shri C.A. Sundaram, learned senior counsel for

the respondents that the scheme and language of Section 94(3)(a)

makes it beyond doubt that the Co-operative Court's jurisdiction to

adjudicate the dispute is not confined only to the disputes between

the various classes of persons enumerated under Section 91 alone

but extends to others also if such a 3rd party (even in a case where

he happen to be a non-member) acquires some interest in the

property of either the society or the members or any other person

enumerated in Section 91.

32. We find it difficult to accept the submissions of Shri Sundaram

for the reason if really the Legislature intended that the Co-

operative Court should have jurisdiction in all the disputes

irrespective of the nature of the dispute arising between the various

classes of persons enumerated in Section 91 and non-member 3rd

parties who acquire any interest in the property of such enumerated

persons, the Legislature could have clearly indicated the same in

Section 91 itself. It must be remembered that Section 94(3)(a)

does not enable a person other than an enumerated person to refer

a dispute to the Co-operative Court. The said legal position is

made clear in Marine Times (supra). It was a case where a member

1

of a housing society occupying a part of the building owned by the

society agreed to sell that property to a 3rd party subject to the

approval of the society. The society declined approval. The 3rd

party raised a dispute against the society as well as the member

before the Co-operative Court. Dealing with the question whether

the Co-operative Court would have jurisdiction to adjudicate the

dispute, this Court answered the question in the negative.

33. Accepting the submission of Shri Sundaram would lead to a

situation that while on one hand it is the settled position of law that

the Act does not permit a person other than the one enumerated

under Section 91 to seek adjudication of his dispute with

`enumerated persons' in a Co-operative Court, such a Court would

be authorised by virtue of Section 94(3)(a) to adjudicate a dispute

between an enumerated person and a non-member 3rd party, if

raised by an enumerated person. On the other hand, from the

language of the said sub-section, it appears that the only

circumstance which enables the Co-operative Court to exercise its

jurisdiction against such a 3rd party is that while adjudicating a

dispute which is otherwise amenable to its jurisdiction, the Co-

operative Court reaches the conclusion that a 3rd party acquired

some interest in the property of one of the parties to the dispute.

Necessarily the following two questions must be examined to

understand the exact scope of the said sub-section. (1) Whether the

2

property referred to in the sub-section is any property of one of the

parties to the dispute or should such property bear any relationship

to the dispute? (2) Whether the acquisition of the interest referred

to should be anterior to the reference of the dispute to the Co-

operative Court or on acquisition made during the pendency of the

litigation?

34. The answer to the first question to our mind is plain. The

property in which the 3rd party acquired interest must bear some

relationship with the dispute pending before the tribunal. To hold

otherwise would be to enable the Co-operative Court to examine

questions unconnected with the dispute pending before it and

wholly unconnected with the affairs of the Society. An illogical

result to be normally avoided unless compelled by the express

language of the Act.

35. Coming to the second question, learned counsel for the

appellant argued that the intention of the Legislature is to be

gathered from the language of the sub-section (3)(a) and the

employment of the present perfect tense (has acquired any

interest) must only lead to a conclusion that the Legislature

intended the Co-operative Court to deal with only the cases of

acquisition of interest in the property during the pendency of the

litigation before it. On the other hand, Shri Sundaram argued that

2

there is no warrant for such an inference in the language of sub-

section (3)(a).

36. We are of the opinion that having regard to the language of

Section 94, sub-section (3)(a), more specifically "has acquired any

interest", the acquisition of the interest contemplated is only an

acquisition made during the pendency of the dispute before the Co-

operative Court. For the reason that such an acquisition of interest

is qualified by the words, "in the property of a person who is a party

to the dispute", we hold so for another reason also.

37. To hold otherwise, would lead to a situation where a dispute

between an enumerated person and a 3rd party would become

amenable to the jurisdiction of the Co-operative Court at the

instance of the persons enumerated under Section 91 but not at the

instance of a 3rd party in view of the judgment of this Court in

(1991) 1 SCC 469. An absurd situation, ex facie violative of Article

14, in as much as such a construction would lead to a situation that

with reference to a dispute, the affected parties are compelled to

approach different fora for the adjudication of the same dispute

depending upon the fact which party is seeking a relief. Such a

construction, being inconsistent with a constitutional mandate, is

impermissible.

2 38. For coming to the conclusion that the suits in question are not

maintainable and the dispute could be examined exclusively by the

Co-operative Court, the High Court proceeded on the basis that it is

possible to challenge the resolution and the conveyance

independently. Starting from such a premise, the High Court

opined that challenge alone to the resolution without challenging

the conveyance is possible but not vice-versa. The reason given by

the High Court for the same is as follows:-

"If Court passes a decree or order setting aside the resolution

of the general body, the validity of the conveyance will not

be intact, but if a decree or order is made merely setting aside

the conveyance, the resolution of the General body will

remain intact. By the conveyance land owned by the Society

is transferred. The society is a body corporate. The person

or persons who have signed the conveyance on behalf of the

Society derive the authority to do so from resolution of the

General Body. If the resolution is set aside or is declared

invalid the act of the person of executing the conveyance

would become unauthorised. Such an order in relation to the

validity of the General Body resolution will impair the

validity of the conveyance. Consequently, if the resolution

remains intact but the conveyance is set aside for some

reason the Society may be in a position to execute another

conveyance pursuant to the resolution of the general body."

We do not propose to examine the correctness of the legal premise

that the general body resolution and the conveyance could be

segregated in a dispute such as one on the hand. For the sake of

argument, we presume that it is possible for the plaintiffs,

appellants herein, to challenge only the general body resolution. We

also presume that the conclusion arrived at by the High Court that if

the general body resolution is set aside, the same will impair the

2

validity of the conveyance even without an appropriate declaration

by a competent judicial body. (We emphasise that we only

presume so without examining to the said conclusion for the limited

purpose) If the resolution dated 6th December, 2009 alone is

challenged before the Co-operative Court, in view of our conclusion

recorded earlier, the respondents 22 and 23 (the beneficiaries of

the resolution) could not be made parties before the Co-operative

Court. In such a situation, even if the Co-operative Court came to

the conclusion that the resolution is illegal, it would always be open

for the respondents 22 and 23 to ignore such a determination as

they are not parties to the proceedings and assert their title on the

basis of the conveyance dated 7th December, 2009. If any party

such as the plaintiffs (the appellants herein) disputes the validity of

the title conveyed thereunder, necessarily such a dispute would

have to be adjudicated by a competent Court under Section 9 of the

Code of Civil Procedure wherein, necessarily, the question whether

a valid title was conveyed in favour of respondents 22 and 23 by

the society would arise for determination. The legality of the

resolution would still have to be gone into again. Therefore, in our

opinion, the premise in which the High Court commenced its

enquiry itself is wrong.

39. For all the above-mentioned reasons, we are of the opinion

that the conclusion of the High Court that the suits in question are

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not maintainable on the ground that the dispute is amenable to the

exclusive jurisdiction under Section 91 of the Act to the Co-

operative Court cannot be sustained and the same is required to be

set aside.

40. That takes us to the next question raised in these appeals -

whether the High Court was right in going into the maintainability of

the suits in question. Shri Venugopal, learned senior counsel

appearing for some of the respondents submitted that in view of the

provisions contained in Section 9A of the Code, which was

introduced by local amendment of the Maharashtra Legislature to

the Code by Maharashtra Act No.65 of 1977, the course of action

followed by the High Court is not only justified but also the Court is

obliged to follow such a course of action. Section 9A reads as

follows:

"9A. Whereof the hearing of application relating to interim

relief in a suit, objection to jurisdiction is taken, such

issue to be decided by the Court as a preliminary

issue.-

(1) Notwithstanding anything contained in this Code or any

other law for the time beiong in force, if, at the hearing of any

application for granting or setting aside an order granting any

interim relief, whether by way of stay, injunction, appointment

of a receiver or otherwise, made in any suit, an objection to the

jurisdiction of the Court to entertain such a suit is taken by any

of the parties to the suit, the Court shall proceed to determine at

the hearing of such application the issue as to the jurisdiction

as a preliminary issue before granting or setting aside the order

granting the interim relief. Any such application shall be heard

and disposed of by the Court as expeditiously as possible and

shall not in any case be adjourned to the hearing of the suit.

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(2) Notwithstanding anything contained ion sub-section (1),

at the hearing of any such application, the Court may grant

such interim relief as it may consider necessary, pending

determination by it of the preliminary issue as to the

jurisdiction."

The language of Section 9A is self-explanatory. We accept the

submission made by Shri Venugopal in toto.

41. Coming to the question of the interim order in view of our

conclusion that the suits in question are maintainable and having

regard to the fact that the suits are to be tried by the High Court in

exercise of its original jurisdiction, we do not propose to pass any

interim order and leave it open to the High Court to consider the

applications filed by the plaintiffs for interim orders in accordance

with law and pass appropriate orders. The principles governing the

grant of interim orders are too well settled and we need not

expound the same once again. However, we would like to indicate

that on the question of the existence of a prima facie case in favour

of the plaintiffs, the following factors are germane and require to be

examined. Having regard to the content of the plaint, we are of the

opinion that the nature of the legal right, the plaintiffs claim for

seeking the relief such as the one sought in the suits necessarily

depends upon the byelaws of the Society, the rights and obligations

of the various classes of its members with respect to the property in

dispute. The High Court may examine the above aspects before

passing an appropriate interim order.

2 42. In view of the above, we also deem it proper to direct all the

parties to maintain status quo as on today for a period of two weeks

to enable the Bombay High Court to examine the applications of the

plaintiffs for interim orders and pass appropriate orders in

accordance with law.

43. The appeals are, accordingly, disposed of.

........................................J.

( P. SATHASIVAM )

........................................J.

( J. CHELAMESWAR )

New Delhi;

January 30, 2012.

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