DECCAN MERCHANTS CO-OPERATIVE BANK LTD. versus M/S. DALICHAND JUGRAJ JAIN AND ORS.

Citation: [1969] 1 S.C.R. 887 · Decided: 29-08-1968 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Dismissed

Cited by 8 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
DECCAN MERCHANTS CO-OPERATIVE BANK LTD. 
B 
c 
D 
E 
F 
G 
H 
v. 
M/S. DALICHAND JUGRAJ JAIN AND ORS. 
August 29, 1968 
[S. M. SlKRI, R. S. BAcHAWAT AND K. S. HEGDE, JJ.] 
Maharasht.ra Co-operative Societies- Act, 
1960, s. 91 (1)-Expressions 
"touching the business of the society" and "p.~rson claiming through a 
member"-Scope of,--Confiict with provisions of Rent Act-Provisions 
of lVhich Act to orevail. 
S. 154-lf provides alternative remedy-Whether High Court has juris· 
diction to interfere with interlocutory order of Registrar referring dispute 
to arbitration. 
The fourth respondent obtained a loan from the appellant bank, a 
banking company established as a Co-operative Society under the Co-ope-
rative Societies Act, 1912, and mortgaged certain property with the bank 
as security for the loan. 
As he defaulted in the re-payment of the loan, 
the property was transferred to the bank in May, 1963 under s. 100 of 
the Maharashtra Ce>-operative Societies Act, 1960 and the physical posses-
siou also handed over to the bank. In the meantime, the fourth respon-
dent had executed an agreement on June 29, 1961, which mentioned that 
the property had been mortgaged to the appellant, and whereby the entire 
ground-floor of the building was let to the first respondent on a monthly 
rental of Rs. 250. 
The bank called upon the first respondent to vacate the premises but 
they refused to do so. On June 11, 1963, the bank applied to the District 
Deputy Registrar, Co-operative Societies, Bombay, praying that the dispute 
between the bank and the first respondent be, referred to arbitration and 
stating that as the respondents claimed their rights through the original 
owner, the fourth respondent, the dispute. wa:s capable of being referred 
under s. 93 of the Act to the Registrar or his nominee for decision. 
The 
Assistant Registrar thereafter passed an order on June 19, 1963 to the 
effect that he was satisfied there was a 'dispute' within 
the meaning of 
s. 91 (1) of the Act and 'referred it for the decision of his nominee, the 
second resvondent. 
T,he first respondent 
challenged the Registrar's 
order of Juoe 19, 
1963 br a writ petition under Art. 226 of the Constitution. on the· grounds, 
inter alia, that the alleged dispute did not fall within the scope of s. 91 
of the Act; and that furthermore, in view of the provisions of s. 28 of 
the Bombay Rents, Hotel and Lodging Rates Control Act, 1947, such a 
dispute could only be determined under the provisions of that Act. 
The 
High Court allowed the petition holding that the first respondent could 
not be said to be claiming through a member of the bank as a member 
and consequently the dispute could not be the subject matter of reference 
U•der s: 91 (I) (bl. It held, however,, that the words "touching the business 
of the society" in s. 91 were very wide and would include any matter which 
relates to or concerns o'r affects the business of the society. 
• 
• 
888 
• 
~­-.:: 
SUPREME COURT RF.PORTS 
[1969]1 SCR. 
On appeal to this Court by a certificate, 
A 
HELD : dismissing the appeal : 
( i) The word "business" in the expression "touching the business of 
a society" m s. 91 (1) docs not mean affairs of the society. It has been 
l7<iCd here in a. n~rro,vcr. sense a~d means the actual trading or commcr-
c1a1 dr_ orhcr s1n11la! husincs,c-; activity of the society which the society is 
authorised to enter into under the Act and the Ruic'\ 11nd its hvc-la\\"S. 
Jn 
the prcsc_nt case the socicly wa~ a co-oper.itive hank 
and o'rdinarily 
a 
B 
co-opcrattve bank cannot be s~ud to he engaged in busine-ss when it lets 
out properlit--s o\l.·ncd by it. 
Therefore the present disput-~ 
bct\\'Ccn a 
lcnant of .a member of the hank in a huilding which had subsequently 
been acquired by the bank could not be said to be a dispute touching 
the business of the bank. [896 C, E·Fl 
f"arkhundali v. Potdar, 63 B.l. ... R. 985; referred to. 
(ii) The dio;putc in the present case \\·as not a dispute between a society 
and a men1ber or a person claiming through a member. 
Bcfor·~ a person 
ean be s.1id 10 claim through a member, the claim should arise through 
a transaction or dealing y,:hich the mcn1her entered into with the society as 
a member. 
In the present case 
when 
the original 
ov.·ncr 
executed 
the lease. he v. as not acting as a member but ao; a mort~a.gor in possession, 
and, therefore the bank's claim did not fall within s. 91 (I) (b) of the 
Act. [898 B. CJ 
E. C! 

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