Bombay High Court
Komal Arvind Vesavkar And Ors vs Vesawa Koli Sarvoday Sahakari Soc Ltd. … on 15 January, 2025
2025:BHC-AS:1760
WP 8254 of 2022 (final).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8254 OF 2022 .
1. Mrs. Komal Arvind Vesavkar ]
Age : 33, Occupation : Homemaker ]
Pandhrinath Ramji Hamav House, Patil ]
Gally No.3, SagarKinara Road, Bandar ]
Road, Versova, Andheri W, Mumbai - ]
400061. ]
2. Mrs. Ranjana Chandrakant Buga ]
Age : 55, Occupation: Fisherwomen, ]
Buga House, Bazar Gally, Near Versova ]
Fish Market, Andheri (West), Mumbai - ]
400061. ]
3. Mrs. Nirmala Bhagwan Raje ]
Age : 67, Occupation : Fisherwomen, Raje ]
House, MandviGally, Ferry Road, ]
Versova, Andheri W, Mumbai - 400061. ]
4. Mrs. Meenakshi Kesrinath Kutur ]
Age : 55, Occu : Fisherwomen, Kutur ]
House, TereGally, Versova, Andheri W, ]
Mumbai - 400061. ]
5. Mrs. Kaushalya Chandrashekhar Kutur ]
Age : 54, Occu : Fisherwomen, Kutur ]
House, TereGally Versova, Andheri W, ]
Mumbai - 400061. ]
6. Mrs. Sharmila Vijay Kalthe ]
Age : 46, Occu: Fisherwomen ]
T2, Kalthe House, Bazar Gally, Pandurang ]
Ramle Marg, Versova, Andheri W, ]
Mumbai - 400061. ]
7. Mrs. Vandana Sadashiv Kalthe ]
Age : 58, Occu: Fisherwomen ]
Kalthe House, Bazar Gally, Nr. Bandra ]
Road Barf Karkhana, Versova, Andheri W, ]
Mumbai - 400061. ]
8. Mrs. Shobhana Pravin Bhikru ]
Age : 50, Occu : Fisherwomen ]
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Bhikru House, MandviGally, Nr. Police ]
Station Versova, Andheri W, Mumbai - ]
400061. ]
9. Mrs. Ashwini Pradarshan Bhate ]
Age : 42 years, Occu:Fisherwomen ]
Bhate House, Mandvi Gally, Near Ferry ]
Boat, Versova, Andheri W, Mumbai - ]
400061. ]
10. Mrs. Savita Prahlad Keshe. ]
Age : 56, Occu:Fisherwomen ]
Bharti Kunj, Patil Gally No.3, Pandurang ]
Ramle Marg, Versova, Andheri W, ]
Mumbai - 400061. ]
11. Mrs. Ranjana Jagnath Davne ]
Age : 56, Occu: Fisherwomen Davne ]
House, Bazar Gally, Near Somnath Hotel, ]
Versova, Andheri W, Mumbai - 400061. ]
12. Mrs. Damyanti Prakash Davane ]
Age : 50, Occu: Fisherwomen Davane ]
House, Bazar Gally, Pandurang Ramle ]
Marg, Versova, Andheri W, Mumbai - ]
400061. ]
13. Mrs. Sharda Prakash Siddhe ]
Age : 65, Occu: Fisherwomen, Siddhe ]
House, Buddha Gally No.2, Versova, ]
Andheri W, Mumbai - 400061. ]
14. Mrs. Jyoti Kailas Bhave ]
Age : 43, Occ: Fisherwomen, Bhave ]
House, Bazar Gally, Near Macchi Bazar, ]
Versova, Andheri West, Mumbai - ]
400061. ]
15. Mrs. Bhavna Dilip Bhave ]
Age : 37, Occu: Fisherwomen, Bhave ]
House, Bazar Gally, Near Ice Factory, ]
Versova, Andheri W, Mumbai - 400061. ] ...Petitioners.
Versus
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1. Vesawa Koli Sarvoday Sahakari Society ]
Ltd. ]
A Co-operative Society, having its ]
registered office at Pandurang Ramle ]
Marg, TereGalli, Versova, Andheri (West), ]
Mumbai - 400061, through its Secretary. ]
2. Rasheshwar Infrastructures Pvt. Ltd. ]
A company registered under the ]
Companies Act, 1956, having its ]
registered office at 609, Golden ]
Chambers, Opp. Citi Mall, Lokhandwala, ]
Andheri (West), Mumbai - 400 053, ]
through its Directors - ]
a. Krishna Narsingrao Pimpale. ]
Having his office at 609, ]
Golden Chambers, Opp. Citi Mall, ]
Lokhandwala, Andheri (West) ]
Mumbai - 400 053, ]
through its ]
b. Mohanrao Narsingrao Pimpale ]
having his office at 609, ]
Golden Chambers, ]
Opp. Citi Mall, Lokhandwala, ]
Andheri (West), Mumbai - 400 053, ]
through its ]
c. Maya Parasmal Chauhan ]
having his office at 609, Golden ]
Chambers, Opp. Citi Mall, ]
Lokhandwala, Andheri (West), Mumbai ]
- 400 053, through its ]
d. Suresh Narsingrao Pimpale ]
having his office at 609, Golden ]
Chambers, Opp. Citi Mall, ]
Lokhandwala, Andheri (West), Mumbai ]
- 400 053. ] ...Respondents.
------------
Mr. Agnel Carneiro and Mr. Smith Colaco i/b Mulla & Mulla and Cragie
Blunt and Caroe for the Petitioner.
Mr. Mayur Khandeparkar, Mr. Gauraj Shah and Ms. Reshma Chitnis Potdar
i/b Chitnis Vaithy and Co. for Respondent No.1.
Mr. Shanay Shah i/b Ms. Ashni Desai for Respondent No.2
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Coram : Sharmila U. Deshmukh, J.
Reserved on : 25th November, 2024.
Pronounced on : 15th January, 2025.
Judgment :
1. Rule. With consent, Rule made returnable forthwith and taken
up for final hearing.
THE CHALLENGE:
2. Exception is taken to the order of Co-operative Appellate Court
dated 22nd April, 2022 upholding the dismissal of the Dispute No.
CC/IV/316 of 2019 by the Co-operative Court’s order dated 7th January,
2022 under Order VII, Rule 11 of the Code of Civil Procedure, 1908 [for
short, “the CPC“] on ground of maintainability.
THE ISSUE:
3. The issue to be considered is whether the Dispute raised by the
Petitioners falls with the purview of Section 91 of the Maharashtra Co-
operative Societies Act, 1960 [For short, “MCS Act“] and can be
entertained and adjudicated by the Co-operative Court.
PLEADINGS IN DISPUTE NO. CC/IV/316 OF 2019:
4. The case pleaded in the Dispute is that the Petitioners are
members of Respondent No.1-Society formed inter alia with the object
for promoting welfare of the fishing community residing at Versova
and to provide infrastructure facility to the local fishing folk and to
streamline fishing business at Versova, Andheri. Respondent No. 1
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admeasuring 20860.20 square meters at Versova having one ice
factory, cold storages, diesel pumps and godown on the said property
and remaining open land being use for storing and selling fish,
repairing nets etc. In 2019, the Petitioners became aware of certain
resolutions passed by the Respondent No. 1-Society allegedly creating
development rights in respect of the Society’s property in favor of the
Respondent No. 2-Developer by executing Development-cum-Sale
Agreement dated 5th January, 2017 on the basis of fraudulent
resolutions passed in the meetings about which the Petitioners were
not given any notice. The Dispute challenges the purported resolutions
and all deeds, decisions, actions taken in pursuance of the purported
resolutions passed in the alleged meeting including the alleged
Development Agreement entered into between Respondent No.1 and
Respondent No.2 and seeks the following substantive reliefs:
(a) The present dispute be adjudicated in terms of Sections 91 to 96
of the Maharashtra Cooperative Societies Act, 1960;
(b) this Hon’ble Court be pleased to declare that purported Annual
General Body Meeting allegedly held on 29th September, 2013,
purported Annual General Body Meeting allegedly held on 21st
September, 2014, purported Special General Body Meeting allegedly
held on 26th April, 2015, purported Annual General Body Meeting
allegedly held on 12th September, 2015, purported Special General
Body Meeting allegedly held on 20th December, 2015, purported
Annual General Body Meeting allegedly held on 30th September, 2016,
purported Special General Body Meeting allegedly held on 11 th
February, 2017 and purported Annual General Body Meeting
allegedly held on 4th March, 2018 as illegal, bad in law and void ab-
initio;
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(c) this Hon’ble court be pleased to declare that the purported
resolutions passed in the purported annual general body meeting
allegedly held on 29th September, 2013, purported annual general body
meeting allegedly held on 21st September, 2014, purported special
general body meeting allegedly held on 26th April, 2015, purported
annual general body meeting allegedly held on 12th September, 2015,
purported annual general body meeting allegedly held on 30 th
September, 2016, purported special general body meeting allegedly
held on 11th February 2017 and purported annual general body
meeting allegedly held on 4th march, 2018 which are annexed hereto
and marked as exhibit-a colly and further deeds, decisions and actions
taken pursuant to the impugned resolutions as illegal, bad in law and
void ab initio;
(d) this Hon’ble Court be pleased to pass an order of permanent
injunction restraining the Opponent No.1 Society, its office bearers
their agents, servants and persons claiming through or under them
from acting upon or implementing the purported resolutions passed
by the Opponent No.1 Society in the purported Annual General Body
Meeting allegedly held on 29th September, 2013, purported Annual
General Body Meeting allegedly held on 21 st September, 2014,
purported Special General Body Meeting allegedly held on 26 th April,
2015, purported Annual General Body Meeting allegedly held on 12 th
September, 2015, purported Special General Body Meeting allegedly
held on 20th December, 2015, purported Annual General Body Meeting
allegedly held on 30th September, 2016, purported Special General
Body Meeting allegedly held on 11 th February, 2017 and purported
Annual General Body Meeting allegedly held on 4th March, 2018.
(e) this Hon’ble Court be pleased to quashed and set aside all the
impugned resolutions passed in the purported Annual General Body
Meeting allegedly held on 29th September, 2013, purported Annual
General Body Meeting allegedly held on 21 st September, 2014,
purported Special General Body Meeting allegedly held on 26 th April
2015, purported Annual General Body Meeting allegedly held on 12 th
September, 2015, purported Special General Body Meeting allegedly
held on 20th December, 2015, purported Annual General Body Meeting
allegedly held on 30th September, 2016, purported Special General
Body Meeting allegedly held on 11 th February, 2017 and purported
Annual General Body Meeting allegedly held on 4th March, 2018.
(f) That this Hon’ble Court be pleased to permanently direct the
Opponents to give notice for all the general body meetings to be
called hereinafter by registered post acknowledgment due to all
members of the Opponent No.1 Society including the Disputants;
5. By way of interim relief, the Petitioners sought temporary
injunction restraining the Respondents from giving effect to the
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alleged Development-cum-Sale Agreement dated 5 th January, 2017 and
any other documents pursuant to the impugned resolutions in respect
of the suit property. To the Dispute, along with the Respondent No. 1-
Society, the Respondent No. 2-Developer was arrayed as Opponent.
The annexures to the Dispute included the Bye-laws, minutes of
meeting, impugned resolutions, police complaint, and the
Development Agreement dated 5th January, 2017.
APPLICATION UNDER ORDER VII, RULE 11 OF CPC:
6. On 23rd July, 2019, Respondent No. 1 filed an application in the
said Dispute for framing preliminary issue on the ground of
maintainability under Section 91 of the MCS Act, 1960, which
application was subsequently amended to seek the relief of rejection
of plaint as not maintainable under Order VII, Rule 11 of Code of Civil
Procedure, 1908. The rejection of Dispute was sought on the following
grounds:
(a) the Dispute fails to reveal cause of action;
(b) The subject matter of the Dispute directly touches the
issue of development of Suit property as it seeks to challenge
the re-development process, which is beyond the purview of
Section 91 of MCS Act; and
(c) barred by limitation.
REPLY OF THE PETITIONERS:
7. The Petitioners filed their reply contending that Section 9A was
deleted by Amendment Act of 2018. The issue of maintainability was
mixed question of law and fact, requiring evidence to be led. The
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Dispute challenges the alleged resolutions of the purported General
Body Meetings of the Society and therefore, comes within the purview
of Section 91 of the MCS Act and the Petitioners have right to
challenge the illegal and invalid resolutions and as the dispute is
between member and Co-operative Society touching business of
Society, it is only the Co-operative Court which can grant the relief.
ORDER OF CO-OPERATIVE COURT:
8. The findings of the Co-operative Court declining to exercise
jurisdiction can be broadly summarized as under:
(a) The impugned resolutions are on the aspect of re-
development of Society building.
(b) As per Bye-laws 3(23), development of land of Society is
one of the objects of the Society, but not re-development.
(c) The Development Agreement and pleadings in the Dispute
shows that there is not only development of land but also re-
development as the five structures already standing on the
property will be reconstructed.
(d) The re-development is indirectly challenge by seeking
declaration that deeds and actions taken pursuant to the
impugned resolutions are bad in law and the Co-operative
Court has no jurisdiction to grant invalidate any documents.
IMPUGNED ORDER OF APPELLATE COURT:
9. The Appellate Court held that the parties to the Dispute are not
amenable to the jurisdiction of the Co-operative Court as the
resolutions are challenged with reference to the development process
and third party is essential to the Dispute. It further held that the
proposed activity was re-development and not within the objects of
the Society.
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SUBMISSIONS:
10. Mr. Agnel Carneiro, learned counsel appearing for Petitioners
has taken this Court through the bye-laws and would submit that as per
bye-law (3.23), the object of the Society was to develop the buildings
which are under ownership of the Society and open spaces for the
purpose of object of the Society for construction of shops, etc. and
therefore, the Dispute which challenges the resolutions pertaining to
the development of the property entrusted to Respondent No.3-
Developer would fall within the purview of Section 91 of the MCS Act.
He would submit that the reliance placed by the Co-operative Court on
the decision in the case of Mohinder Kaur Kochar vs Mayfari Housing
Pvt. Ltd.1 is misplaced. He submits that in the present case,
Respondent No.1-Society is a co-operative society of fishermen formed
for the purpose of providing infrastructural facilities to the local fishing
folks and to obtain Government benefit and streamline the business of
fishing activities and therefore, the facts of Mohinder Kaur Kochar
(supra) are clearly distinguishable. He would further submit that the
subject-matter of resolutions are not re-development as the
resolutions speak of development of open plot of land of Respondent
No.1-Society. He would, further submit that the agreement between
the Respondent Nos. 1 and 2 is Development Agreement which is
1 2013(1) Mh.L.J.
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evident from the fact that it has been stamped under the provisions of
the Stamp Act as Development Agreement and is styled as
Development-cum-Sale Agreement. He submits that in view of Section
94 (3)(c) of the MCS Act, the Co-operative Court is empowered to strike
out the name of any party joined improperly and therefore, mere fact
that the Developer is added as a party to the dispute cannot take the
dispute out of the jurisdiction of the Co-operative Court. He submits
that in the High Court proceedings the Respondent’s objection was
that the resolutions have to be challenged before the Co-operative
Court and when the dispute came to be filed before the Co-operative
Court, objection is being taken about jurisdiction. He submits that the
parties cannot be permitted to approbate and reprobate at the same
time.
11. Per contra Mr. Khandeparkar, learned counsel appearing for the
Respondent No. 1 would submit that the rejection of Dispute is firstly
on the ground that being redevelopment, the subject is outside the
object of the Society, secondly as the Developer was made party to
the proceedings, the dispute is outside the purview of Section 91 and
thirdly, that the resolutions are challenged with reference to the
development process. He points out to the pleadings in the dispute
and prayer clause (c) which not only challenges the resolutions, but
also deeds, decisions and actions taken pursuant to the impugned
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resolution and submits that the same implies Development
Agreement. He submits that averments in the petition are substantially
regarding the redevelopment as it is admitted that there are ice
factory, community hall and office which is standing on the subject-
land along with the open land which is to be redeveloped. He submits
that the Apex Court in the decision of Margret Almeida v. Bombay
Catholic Co-operative Housing Society Limited 2 has held that in case
of third party acquiring interest, the Co-operative Court could exercise
jurisdiction only if the acquisition is pendente lite. He submits that
admittedly in the present case, the rights by virtue of the Development
Agreement have been acquired prior to the filing of the dispute and
the Co-operative Court would not have the jurisdiction as far as
Respondent No.2-Developer is concerned. He would submit that the
Apex Court has held that as the validity of the title conveyed under the
Development Agreement would arise for determination, the legality of
Agreement has to be gone into and therefore, it is the Civil Court which
will have the jurisdiction. He submits that the judgment in the case of
Margret Almeida (supra) is squarely applicable to the facts of the
present case. He would further submit that in the case of Mohinder
Kaur Kochar (supra), the Division Bench considered the decision in the
case of C. F. Marconi vs. Madhav Co-operative Housing Society Ltd. 3
2 (2012) 5 SCC 642.
3 1985(2) Bom. C.R. 357.
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and distinguished the said judgment in C.F. Marconi (supra), as one of
the objects of the society as in C.F. Marconi‘s case (supra) was of
reconstruction and in that context, the Division Bench held that the
object of the Co-operative Housing Society is not redevelopment and
therefore, would not fall under Section 91. He would point out bye-law
(3.23) of Bye-laws of the Petitioner-Society and would submit that the
object of the society is the development of the existing structures and
the open spaces and not redevelopment. He would further point out
the various clauses in the Development Agreement and would submit
that under the Development Agreement apart from the open spaces,
the structures which were existing on the land are to be redeveloped
and therefore, the same is the Redevelopment Agreement and not a
Development Agreement. He would submit that the resolutions having
been acted upon are required to be challenged in the Civil Court. He
submits that there is no estoppel on law and even if objection was
raised in the proceedings before the High Court, there was no
adjudication on that plea which would impart character of finality to
the said finding.
12. Mr. Shah, learned counsel appearing for Respondent No.2 would
endorse the submissions of Mr. Khandeparkar and in addition would
point out that in the decision of Margret Almeida (supra), the Apex
Court has held that in dispute, both the subject-matter as well as the
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parties to the dispute must be those specified under Section 91 and if
either of two requirements are not satisfied then the dispute cannot
be adjudicated in the Co-operative Court. He submits by impleading
Respondent No.2-Developer as party to the proceedings, the Dispute
has been taken out of the jurisdiction under Section 91 and therefore,
it is not necessary to examine the issue as regards the subject-matter.
He would further submit that the interim relief which is sought in the
present case was temporary injunction from implementing the alleged
Development-cum-Sale Agreement dated 5 th January, 2017 and the
pleadings in the petition refers exclusively to the Development
Agreement and therefore, the Co-operative Court would not have
jurisdiction.
13. In Rejoinder, Mr. Carneiro, submits that in the case of Margret
Almeida (supra), the Apex Court has observed that the property in
which the third party acquired interest must bear some relationship
with the dispute pending before the Tribunal and in the present case,
as the said condition is satisfied, the dispute would be maintainable
before the Co-operative Court. He would further submit that under
Section 163 of the MCS Act, the Civil Court’s jurisdiction is barred. He
would further point out to Clause 2 of Development Agreement and
would submit that the main agreement is about the housing project
and the redevelopment of the structure therein is ancillary.
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REASONS AND ANALYSIS:
14. With the intent to provide a specialized forum for adjudication of
specialized disputes, the Civil Courts jurisdiction which is otherwise
unlimited, was barred under Section 163 of MCS Act qua any dispute
required to be referred to the Co-operative Court for decision. The
disputes which can be referred to the Co-operative Court is provided in
Section 91 of MCS Act, which reads thus:
“91. Disputes
(1) 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 conduct of general meetings, management
or business of a society shall be referred by any of the parties to the
dispute, or by a federal society to which the society is affiliated or by
a creditor of the society, to a co-operative Court, if both the parties
thereto 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 or present
servant or nominee, heir or legal representative of any
deceased officer, deceased agent or deceased servant of the
society, or the Liquidator of the society or the Official
Assignee of a deregistered society.
(b) a member, past member or a person claiming through a
member, past member or a deceased member of a society, or
a society which is a member of the society or a person 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
deregistered society or the official Assignee of such a de-registered
society.
Provided that, an industrial dispute as defined in clause (k) of
section 2 of the Industrial Disputes Act, 1947, or rejection of
nomination paper at the election to a committee of any society or
refusal of admission to membership by a society to any person
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qualified therefor, [or any proceeding for the recovery of the amount
as arrear of land revenue on a certificate granted by the Registrar
under sub-section (1) or (2) of section 101 or sub-section (1) of section
137 or the recovery proceeding of the Registrar or any officer
subordinate to him or an officer of society notified by the State
Government, who is empowered by the Registrar under sub-section
(1) of section 156, or any orders, decisions, awards and actions of the
Registrar against which an appeal under section 152 or 152A and
revision under section 154 of the Act have been provided shall not be
deemed to be a dispute for the purposes of this section.
(3) Save as otherwise provided under sub-section (2) to section 93,
no Court shall have jurisdiction to entertain any suit or other
proceedings in respect of any dispute referred to in sub-section (1).
Explanation 1.–A dispute between the Liquidator of a society or an
official Assignee of a deregistered society and the members
(including past members, or nominees, heir or legal representative or
deceased members) of the same society shall not be referred to the
co-operative Court under the provisions of sub-section (1).
Explanation 2.–For the purposes of this sub-section, a dispute shall
include–
(i) a claim by or against a society for any debt or demand due to it
from a member or due from it to a member, past members or the
nominee, heir or legal representative of a deceased member, or
servant for employee whether such a debt or demand be admitted or
not ;
(ii) a claim by a surety for any sum or demand due to him from the
principal borrower in respect of a loan by a society and recovered
from the surety owing to the default of the principal borrower,
whether such a sum or demand be admitted or not ;
(iii) a claim by a society for any loss caused to it by a member, past
member or deceased member, by any officer, past officer or deceased
officer, by any agent, past agent or deceased agent, or by any servant,
past servant or deceased servant, or by its committee, past or
present, whether such loss be admitted or not ;
(iv) a refusal or failure by a member, past member or a nominee,
heir or legal representative of a deceased member, to deliver
possession to a society of land or any other asset resumed by it for
breach of conditions of the assignment.”
15. Pre-faced with a non-obstante clause, sub-section (1) of Section
91 takes within its fold only the enumerated class of disputes arising
between the enumerated class of parties. For the Co-operative Court
to exercise jurisdiction, the requirement must be conjunctively met i.e.
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the parties to the lis as well as the subject matter of the lis must
necessarily fall within the classes enumerated under Section 91. In
event, the parties to the lis does not fall within the purview of Section
91, it is not necessary to examine whether the subject-matter falls
within Section 91 and vice versa.
16. The five classes of Dispute which are enumerated under Section
91 of MCS Act are :
(a) dispute touching the Constitution of the Society;
(b) dispute touching the election of officers;
(c) dispute touching the conduct of general meetings of the Society;
(d) dispute touching the management of the Society; and
(e) dispute touching the business of the society.
As far as parties to the lis are concerned, both parties are required to
be one or other of the following:
(a) Society or its member, past member or claiming through a
member or past member or claiming to be a member.
(b) a person other than a member with whom the Society had
transactions in respect of which restrictions are imposed by
the statute.
(c) Surety of the classes of members or person mentioned
above
(d) any other Society or liquidator or de-registered society or
official Assignee of such de-registered Society.
17. Dealing firstly with the requirement as far as parties to the lis is
concerned, the Developer has been impleaded in the Dispute
alongwith the Respondent No 2 Society. The reliefs sought in the
Dispute include a declaration that the deeds, decisions and actions
taken pursuant to the impugned resolutions are illegal. As the reliefs
sought will affect the rights of the Developer, evidently, with the
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intent to bind the Developer, he has been arrayed as party. The
Developer does not fall within the enumerated class and the only
circumstance in which a non enumerated third party can be impleaded
in the Dispute is found in Section 94(3)(a), which reads thus:
“94. Procedure for settlement of disputes and power of Co-
operative Court(1) ……
(1A)……
(2) …..
(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.
(b) Where a dispute has been instituted in the name of the
wrong person, or where all the defendants have not been
included, the Co-operative Court may, at any stage of the
hearing of the dispute, if satisfied that the mistake was bona
fide order any other person to be substituted or added as a
plaintiff or a defendant, upon such terms as it thinks just.
(c) The Co-operative Court may, at any stage of the
proceedings, either upon or without the application of either
party, and on such terms as may appear to the Co-operative
Court, to be just, order that the name of any party improperly
joined whether as plaintiff or defendant, be struck out, and
the name of any person who ought to have been joined
whether as plaintiff or defendant or whose presence before
the Co-operative Court may be necessary in order to enable
the Co-operative Court effectually and completely to
adjudicate upon and settle all the questions involved in the
dispute, be added.
(d) ……..
(3A)……..
(3B) ………
(4) ……
18. Answering the issue as to whether the acquisition of interest in
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the property referred to in Section 94(3)(a) should be anterior to the
reference of Dispute to the Co-operative Court or pendente lite, the
Apex Court in Margaret Almeida vs Bombay Catholic Co-operative
Housing Society (supra) has held that the acquisition of the interest
contemplated is only an acquisition made during the pendency of the
dispute before the Co-operative Court. In instant case, as the transfer
of Development rights in the subject property is prior to the filing of
the Dispute, the Co-operative Court would not have the jurisdiction
over such third party Developer and the Dispute would not be
maintainable in the Co-operative Court.
19. Apart from the fact that the impleadment of Developer takes
the parties to the lis out of the enumerated class, the relief sought qua
the Developer is also beyond the jurisdiction of Co-operative Court.
Prayer clause (b) of the Dispute seeks a declaration that further deeds,
decisions and actions taken pursuant to the impugned resolutions are
illegal, bad in law and void ab initio. In substance, the prayer seeks a
declaration that the Development Agreement is illegal and bad in law.
A declaratory relief of this nature cannot be granted by the Co-
operative Court, which is essentially a relief under Section 31 of
Specific Relief Act, 1963. The power to order cancellation of written
instrument vests in the Civil Court and not the Co-operative Court.
20. To tide over the obstruction, Mr. Carneiro would submit that the
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Developer, if improperly joined, can be struck of by the Co-operative
Court by exercising powers under Section 94(3)(c). However, the
answer does not lie in adopting the course of deletion of an improper
party. The consequence of deletion of Developer is that the challenge
to the Development Agreement will no longer be available to the
Petitioners and the Dispute will be confined to the legality of
Resolutions. The Resolutions are nothing, but decision taken for
development/re-development of the property and execution of the
Development Agreement. By the deletion of the Developer, he will no
longer be bound by the outcome of the Co-operative Court
proceedings. The situation emerging is that in event the Petitioners
succeed, the Resolutions will be quashed and set aside, but the
Development Agreement will remain untouched leaving it open for the
Developer to assert its rights under the Development Agreement. The
Petitioners will still have to approach the Civil Court to challenge the
Development Agreement existing in favor of the Developer.
21. In identical facts, but reverse position arose in Margret Almeida
vs Bombay Catholic Co-op Housing Society Ltd (supra), where the
resolution and the conveyance executed by the Co-operative Housing
Society came to be challenged in the Civil Court and upon a preliminary
objection raised as regards the maintainability, the Division Bench held
the suits are not maintainable and the dispute could be examined
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exclusively by the Co-operative Court proceeding on the basis that it is
possible to challenge the resolution and the conveyance
independently. Based on such premise, the High Court opined that the
challenge to the resolution without challenging the conveyance is
possible but not vice versa. Negating the reasoning of Division Bench,
the Apex Court held that the premise on which the High Court
commenced its inquiry itself was wrong and held in paragraph 47 as
under:
“47. If the resolution dated 6-12-2009 alone is challenged before
the Co-operative Court, in view of our conclusion recorded
earlier, Respondents 22 and 23 (the beneficiaries of 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 Respondent Nos 22 and 23 to ignore such determination as
they are not parties to the proceedings and assert their title on
the basis of conveyance dated 7-12-2009. 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.”
22. The decision of Margret Almeida (supra) is squarely applicable
to the facts of the present case. The Resolutions under challenge are
essentially with reference to the Development Agreement executed
with Respondent No. 2 and the subject-matter of Dispute will not fall
exclusively within the jurisdiction of Co-operative Court. The Co-
operative Court will not have the jurisdiction to examine the validity of
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Development Agreement, whereas, the Civil Court can adjudicate the
challenge to the Development Agreement and can also go into the
validity of Resolution as held in Margret Almeida (supra). In the instant
case, the Development Agreement has already been challenged by
some of the members of the Society in this Court and consequently,
the legality of Resolutions will be gone into in those proceedings. Even
if an objection to jurisdiction of Civil Court was raised by Respondents,
there was no adjudication of the objection and the objection cannot be
the basis for approaching the Co-operative Court.
23. In view of the discussion above, it is not necessary for this Court
to examine whether the agreement between the Developer and the
Society constituted development or re-development of the Society’s
property and whether the dispute touches the business of the Society.
Following the decision of Margret Almeida (supra), it is the Civil Court
which will have the jurisdiction and Dispute is not maintainable before
the Co-operative Court.
24. The Appellate Court has rightly held that the resolutions are
challenged with reference to the development process and as third
party rights are involved, the Co-operative Court loses its jurisdiction.
25. As far as the submission that the provisions of Order VII, Rule 11
of CPC are not applicable to the Civil Court, Mr. Carneiro made a
general submission without canvassing any further submissions. There
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is also no pleading in the present petition that such a submission was
advanced before the Appellate Court. Although the decision of
Murlidhar Datoba Nimanka vs. Harish Balkrushna Latane 4, was part
of compilation of judgments tendered to this Court, the judgment was
not referred during the arguments. As such, I am not inclined to
consider the said objection.
CONCLUSION:
26. Apart from challenging the legality of the Resolutions as the
Dispute challenges the consequent deeds, decisions and actions taken
pursuant to the impugned Resolution, the Dispute also seeks
declaration that the Development Agreement is illegal, bad in law and
void-ab-initio. The Dispute also impleads the Developer who does not
fall within the enumerated class of parties to the lis under Section 91
of MCS Act. The declaratory relief of this nature qua the Development
Agreement falling under Section 31 of Specific Relief Act, 1963 can be
granted only by Civil Court. Thus, with the presence of the Developer
and the challenge to the Development Agreement, the subject-matter
of the lis as well as the parties to the lis qua the Development
Agreement is not within the jurisdiction of the Co-operative Court.
27. The effect of deletion of the Developer from the Dispute would
result in confining the Dispute to the validity of Resolutions and the
4 2003(4) Mh.L.J. 196.
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Development Agreement remaining untouched. Resultantly, two
different forums will have to be approached i.e the Civil Court to seek
declaration as regards the validity of Development Agreement and Co-
operative Court as regards legality of the Resolutions. As the
reference in the Resolutions is essentially to the Development
Agreement, the Co-operative Court would not have the exclusive
jurisdiction to decide the subject matter of the Dispute. The Apex
Court in Margret Almeida and Ors vs Bombay Catholic Co-operative
Housing Society Ltd (supra), did not agree with the reasoning of High
Court based on premise that it is possible to independently challenge
the resolution and conveyance and upheld the jurisdiction of Civil
Court. In the present case, the Development Agreement is already in
challenge before this Court in civil proceedings initiated by some of the
members in which the legality of the Resolutions can be gone into.
28. In light of the discussion above, the Dispute is not amenable to
the exclusive jurisdiction of the Co-operative Court and the impugned
judgment dated 25th April, 2022 and 7th January,2022 does not suffer
from any infirmity. Resultantly, the Petition stands dismissed. Rule is
discharged.
[Sharmila U. Deshmukh, J.]
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