Friday, 1 November 2019

Whether it is mandatory for landlord to issue notice U/S 164 of Co-operative societies Act prior to filing of eviction suit?

 In view of the aforesaid two decisions of the Apex Court, it cannot be doubted that everything that a society does for the purpose of achieving its objects cannot be regarded as its business. Taking a premises on rent by a society for the purpose of attaining its objects and carrying its business cannot per se be regarded as a business of the society. In respect of a co-operative housing society wherein constructing and/or taking on rent, the premises for the use of its members is itself the business of the society the position may be different. However, in case of a trading societies which takes any premises on rent merely for the purpose of carrying on its trading, it cannot be said that taking the premises on lease or rent is a business of the society. In the present case, the premises were taken on rent by the petitioner for the purpose of carrying out the business of trading and the respondent had filed a suit for possession after a notice to quit. Such a suit cannot be said to be a suit in respect of an act touching the business of the society. Therefore, it was not necessary to issue a notice Under Section 164 of the Maharashtra Co-operative Societies Act before filing of a suit for possession.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 1909 of 1991

Decided On: 29.07.2004

Decided On: 30.07.2004

 Solapur Taluka Khadi Gramodyog Utpadak Sahakari Society
Vs. Dattatraya Shankarrao Kondewar and Ors.

Hon'ble Judges/Coram:
D.G. Karnik, J.

Citation: 2005(1) MHLJ 24,2005(1) ALLMR 556


1. By this petition, the petitioner takes exception to the judgment and order dated 15th March 1991 passed by the learned VIth Additional District Judge, Solapur dismissing the Appeal No. 434 of 1989 and confirming the decree for possession passed against the petitioner by the learned 8th Joint Civil Judge, Junior Division, Solapur in Regular Civil Suit No. 71. of 1985.

2. The respondent is a tenant occupying a shop premises admeasuring 12' x 15' in the property bearing City Survey No. 8737/15-A situated within the limits of Solapur Municipal Corporation. The property originally belonged to one Mr. Shah. By an indenture of sale dated 22nd August 1983, the respondent purchased western half portion of the said property and the remaining eastern half portion was purchased by the brother of the respondent. On 10th January 1985, the respondent filed a suit bearing regular Civil Suit No. 71 of 1985 against the petitioner for possession of western half portion of the shop in possession of the petitioner (hereinafter referred to as 'the suit premises') on the ground that the petitioner was a defaulter in payment of the rent and that the respondent required the suit premises reasonably and bonafide for the purpose of his business. By a judgment dated 30th June 1989, the trial Court decreed, the suit on both the grounds. The appeal filed by the petitioner was dismissed by the VIth Additional, District Judge, Solapur by a judgment and order dated 15th March 1991. That judgment is impugned in this Writ Petition.

3. The petitioner is a Co-operative Society formed under the Bombay Co-operative Societies Act and deemed to be registered under the Maharashtra Co-operative Societies Act 1960. Prior to the institution of the suit, no notice under Section 164 of the Maharashtra Co-operative Societies Act was issued to the Registrar of Co-operative Societies. Shri Kumbhakoni, learned counsel for the petitioner submits that as a mandatory notice required to be issued under Section 164 of the Maharashtra Co-operative Societies Act was not issued to the Registrar, the suit was not maintainable and therefore, ought to have been dismissed by the Courts below. Section 164 of the Maharashtra Co-operative Societies Act reads as under:

164. Notice necessary in suits No suit shall be instituted against a society, or any of its officers, in respect of any act touching the business of the society, until the expiration of two months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left."
4. A bare reading of Section 164 would show that notice to the Registrar of Co-operative Societies before filing of a suit is required to be issued only at the suit is in respect of any act touching the business of the society. The question therefore, is whether the present suit for possession is in respect of any act touching the business of the society. Neither the memorandum of association nor any other document showing what are the objects of the petitioner Society has been filed an record. The learned counsel for the petitioner however, submits that the business of the Society is to promote Khadi Gramodyog and this fact is not disputed by the learned counsel for the respondent. It is clear that taking the premises on rent or dealing in an immovable property is not a business of the respondent Society. For the purpose of carrying on its business or dealing in the articles of Khadi and/or the articles manufactured by the Village Industries (Gramodyog), the petitioner Society may acquire property on ownership or on rental basis. Taking of a property on lease or rent would be incidental to the purpose of running a business, but taking of the property on lease by itself is not a business of the petitioner Society.

5. In Deccan Merchants Co-operative Bank Ltd v. Dalichand Jugraj Jain reported in MANU/SC/0214/1968 : [1969]1SCR887 , the Supreme Court has considered the meaning of an expression "touching the business of a Society" as appearing in Section 91 of the Maharashtra Co-operative Societies Act. In paragraph No. 22 of its judgment, the Supreme Court held that the business of a society could be ascertained from its objects but it was difficult to subscribe to the proposition that whatever a society did or was necessarily required to do for the purpose of carrying out its objects could be said to be part of its business. For the purpose of carrying out of a business, a society may be required to take a premises on rent but on that account, hiring of the premises, in my opinion, cannot become the business of the society.

6. In Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, Andhra Pradesh, reported in MANU/SC/0611/1969 : (1969)IILLJ698SC , the Supreme Court was required to consider whether a dispute between a Bank which was a co-operative society and its employees could be decided by an Industrial Tribunal or whether it was required to be referred to the Registrar of Co-operative Societies under Section 61 of Andhra Pradesh Co-operative Societies Act. Section 61 of the Andhra Pradesh Co-operative Societies' Act requires a dispute touching the constitution, management or the business of the Society to be referred to the Registrar of Co-operative Societies for his decision. Reiterating that the word 'business' would be equated with the actual trading or commercial or other similar business activity of the society the Supreme Court held that it would be difficult to subscribe to the proposition that whatever the society did or was necessarily required to do for the purpose of carrying out business objects, such as laying down the conditions of the service of these employees, would be part of it's business.

7. In view of the aforesaid two decisions of the Apex Court, it cannot be doubted that everything that a society does for the purpose of achieving its objects cannot be regarded as its business. Taking a premises on rent by a society for the purpose of attaining its objects and carrying its business cannot per se be regarded as a business of the society. In respect of a co-operative housing society wherein constructing and/or taking on rent, the premises for the use of its members is itself the business of the society the position may be different. However, in case of a trading societies which takes any premises on rent merely for the purpose of carrying on its trading, it cannot be said that taking the premises on lease or rent is a business of the society. In the present case, the premises were taken on rent by the petitioner for the purpose of carrying out the business of trading and the respondent had filed a suit for possession after a notice to quit. Such a suit cannot be said to be a suit in respect of an act touching the business of the society. Therefore, it was not necessary to issue a notice Under Section 164 of the Maharashtra Co-operative Societies Act before filing of a suit for possession.

8. The suit premises were purchased by the respondent on 22nd August 1983. It is alleged that by a letter dated 30th September 1984, the respondent informed the petitioner of purchase of the suit property. The letter says that western half portion of the shop in possession of the petitioner has been purchased by the respondent and therefore, the petitioner should pay half of the rent i.e. Rs. 35/- per month to the respondent. The petitioner has denied the receipt of the said letter. The letter was not sent by registered post but is claimed to have been sent under certificate of posting. The petitioner denied the receipt of the letter. The postman was not examined to prove the delivery of the letter dated 30th September 1984 to the petitioner. The presumption that a letter which is properly addressed and posted could be presumed to be received by the addressee -petitioner herein, was rebutted by the petitioner's statement on oath that the letter was not received. In Shivkumar v. State of Haryana reported in MANU/SC/0731/1994 : (1995)ILLJ1162SC , the Supreme Court declined to rely upon a certificate of posting as a proof of service of a letter by observing

"We have not felt safe to decide the controversy at hand on he basis of certificates produced before us, as it is not difficult to get such postal seals at any point of time."
In view of specific denial by the petitioner, in the written statement as well as in the evidence, of the receipt of the letter dated 30th September 1984, and in the absence of any proof of service the Courts below erred in law to hold that the letter dated 30th September 1984 was received by the petitioners. In any event, nothing much turns on the letter dated 30th September 1984. The letter dated 30th September 1984 is not stated to be a notice of demand under Section 12 of the Bombay Rents Hotel Lodging House Rates Control Act 1947 (for short 'the Act') the suit was based on the notice of demand dated 29th October 1984. I would therefore, consider below the ground of default on that basis.

9. According to the respondent after he purchased the property on 22nd August 1983, the petitioner did not pay him any rent. The petitioner was thus in arrears of rent from September 1983 to October 1984. Therefore, by a letter of demand dated 29th October 1984, the respondent demanded arrears of rent from the petitioner. The letter dated 29th October 1984 was sent by Registered Post A.D. Admittedly, the letter was not delivered to the petitioner, but the registered envelope was returned by the post office with an endorsement "refused". The petitioner denied that the envelope containing the letter dated 29th October 1984 'was ever tendered to it by the postman. The respondent examined the postman who has stated on oath that the letter was tendered to the petitioner but the Secretary of the petitioner told to bring it on the next day but on the next day he refused to accept it. Both the Courts below have believed this evidence and have come to a conclusion that the letter was tendered to the petitioner who refused to accept it. The finding reached by the Courts below is a proper finding and needs no interference. Mr. Kumbhakoni, the learned counsel for the petitioner however submits that the notice dated 29th October 1984 does not contain a demand of the rent and cannot be construed as a notice of demand Under Section 12 of the Act. The first paragraph of the letter says that petitioner was a tenant in the building. In paragraph No. 2, the respondent states that he had purchased half western portion of the property. In paragraph No. 3, he states that the eastern half portion is purchased by the respondent's brother. In paragraph No. 4, he states that on account of two separate sale deeds, the property was divided and western portion had come to the share of the respondent and eastern portion had gone to the share of his brother. He then states that the petitioner was liable to pay rent at the rate of Rs. 35/-p.m. amounting to Rs. 490/-. The letter ends there and it does not make a specific demand of arrears or rent from the petitioner. The letter only mentions that the rent was due but there was no demand made in it. Read as a whole letter creates an impression that the respondent wanted to inform the petitioner that he had purchased half western part and his brother had purchased the other half of the property and therefore, the rent should be apportioned between them equally. The letter, in my opinion, cannot be construed as a notice of demand. However, relying upon the judgment of the Supreme Court in Bhagabandas Agarwalla v. Bhagwandas Kanu and Ors. reported in MANU/SC/0269/1977 : [1977]3SCR75 , Mr. Jehagirdar, learned counsel for the respondent submits that the notice must be construed liberally. In paragraph No. 3 of the judgment, the Apex Court observed:

"Now, it is settled law that a notice of quit must be construed not with a desire to find faults in it, which would render it defective, but it must be construed but reimages valeat quam pereat. "The validity of a notice to quit", as pointed out by the Lord Justice Lindely, L.J. in Side botham v. Hoi land, (1895) 1 QB 378 "ought not to turn on the splitting of a straw". It must not be read in a hyper-critical manner, nor must its interpretation be affected by pedagogic pendantism or over refined subtlety, but it must be construed in a common sense way. See Hariahar Benerji v. Ramsashi Roy 45 I. A. 222 : AIR 1981 PC 102. The notice to quit in the present case must be judged for its validity in the light of this well recognised principle of interpretation."
10. It is true that notice must be liberally construed. It must not be read with a view to find fault with the notice. Errors in description of the property, errors of calculation of the amount due and the like would not invalidate the notice. The notice must be construed not as a the communication between two strangers but as a communication between the parties who are aware or reasonably be accepted to be aware of the facts. So construed errors of the description or calculations of the amount due would not invalidate the notice. There is however, a distinction between an insignificant error in the absence of a "demand" in the notice. Section 12 of the Bombay Rent Act specifically requires issuance of a notice of demand before filing of a suit on the ground of default in payment of the rent. No suit can be filed until expiration of one month of the notice of demand. If the arrears of rent are paid during the period of one month, a suit cannot be filed on the ground of default in payment of the rent. If there is no demand of arrears of rent in the notice, it cannot be construed as a valid notice of demand within the meaning of Section 12 of the Act. In Khimji Bhimji Majithia v. Taraben Lalji Soni, reported in 1982 Bom. cr 65 , a Division Bench of the Gujarat High Court held that in view of the clear language of sub Section (2) of Section 12, the notice must contain a specific demand of rent. Sub-section(2) of Section 12 speaks or the word "demand" in writing implying that there has to be an express demand. Mr. Jehagirdar, learned counsel for the respondent however submits that in Pradeep Madhavrao Khandekar v. Ramchandra Govind Angolkar reported in 1986 Bom R C 414, this Court has specifically dissented from the view taken by the Division Bench of the Gujarat High Court in Khimji Bhimji Majithia v. Taraben Lalji Soni (Supra). However, in a subsequent decision rendered in Smt. Sonubai Krishnaji Pal and Ors. v. Smt. Yellawa S. Doddamani and Ors. reported in 1993 Bom RC 298, another single Judge of this Court has taken a view similar to that of the Division Bench of the Gujarat High Court in Khimji Bhimji Majithia (Supra). In Sonubai Krishnaji Pal v. Smt. Yellawa Doddamani (Supra), the single Judge held :

"In any event the notice which is reproduced in para 10 can never be construed as notice of demand which is condition precedent for filing any suit on the ground of non-payment of rent. All that has been pointed in this notice is that tenant is in arrears from October 1973. What is required under Section 12(2) is not mere mention of arrears of more than six months or may be less than six months but what is required is demand of such rent and since there being no demand in this notice this notice cannot be construed as notice issued under Section 12(2)."
I respectfully concur with these observations. In view of the fact that the letter dated 29th October 1984 does not contain a demand it cannot be construed as a notice of demand and no decree for possession can be passed on the ground of default in payment of rent.

30th July 2004.

11. As regards the reasonable and bonafide requirement of the respondent, the learned counsel for the petitioner submits that during the pendency of the Writ Petition, the respondent has obtained possession of a shop adjacent to the suit shop and the alleged need, if any, of the respondent has been met and satisfied and he no longer requires the suit premises. The petitioner has filed on record an affidavit dated 5th July 2004 sworn in by Appa Shankar Girme, Secretary of the society regarding the acquisition of the adjacent shop during the pendency of the Writ petition. In the suit, the respondent has stated that he was carrying on business in a shop of sweetmeats and dairy and selling of Namdev Chivda at Navi Peth, Solapur. However, the said shop premises were not sufficient for the purpose of his business. A part of the shop was likely to be acquired as per the master plan of Solapur and therefore he required additional business premises. He has purchased the suit premises for the purpose of his business of sweetmeats and dairy. The trial Court accepted the case of the respondent and held that the respondent required the suit premises for his business. The appellate Court observed that the shopkeepers neighbouring to the respondent's shop had received notices for acquisition of their shop and accepted the respondent's contention that part of his shop was likely to be acquired and the remaining premises would not be sufficient for his business. The appellate Court also accepted that the respondent wanted to start a business of sweetmeats and required the suit premises. As per the affidavit of the petitioner filed in this Court, the respondent has obtained possession of a shop premises adjacent to the suit shop from M/s. Vardhaman Tiles and has started business therein in the name and style of "Namdev Chivda Sweet House". The said premises admeasure about 12' x 15' i.e. twice the area of the suit premises. Therefore, the respondents need for additional premises is satisfied. In the affidavit in reply, the respondent has not denied that he has obtained the possession of one shop premises. He has also not denied the measurements of the shop given in the petitioner's affidavit. All that he has stated is that acquisition of the premises from M/s. Mahavir Travels (sic. Vardhaman Tiles) would not eclipse the original need pleaded by the respondent. He has not stated that the premises acquired are not sufficient for his needs. He has only stated that he has a growing family and therefore the need subsists.

12. Learned counsel for the respondent submits that as the written statement was not amended by the respondent the subsequent events should not be looked into by this Court. He relies upon a decision of this Court rendered in R.E. Fanibunda v. M/s. Nicholas of India Limited reported in MANU/MH/0994/2002 : 2003(3) All.M.R. 967. In that case, this Court, following the decision of the Apex Court in Om Prakash Gupta v. Ranbir B. Goyal reported in MANU/SC/0035/2002 : [2002]1SCR359 , held that a party relying on the subsequent events which consists of facts not beyond the pale of controversy is expected to have resort to the amendment of the pleadings under Order 6 Rule 17 of the Code of Civil Procedure and without the amendment of the pleadings, the Court would not be entitled to modify or alter the relief. This would be the position where the facts are not beyond the pale of controversy. i.e. the facts are disputed by the parties. In the present case, the fact of acquisition of the premises as also the fact of his starting a shop in the name and style of "Namdev Chivda and Sweets" is not disputed by the respondent. In the circumstances, the decision of this Court in F.R. Fanibunda's case is of no assistance to the petitioner. In Maqboolunnisa v. Mohd. Saleha Quaraishi reported in MANU/SC/1588/1998 : (1998)9SCC585 , the Apex Court did consider the effect of acquisition of premises during the pendency of a proceeding though the pleadings were not amended by the parties. Broadly speaking an amendment of the pleading would be necessary where the facts alleged to have happened during the pendency of the proceedings are disputed but where the facts are not disputed, there would be no need to amend the pleadings and the Court can take into consideration the subsequent events which have happened during the pendency of the proceedings so as to mould the relief in the light of the subsequent events. Shri Jehagirdar, the learned counsel for the respondent then submits that even if the facts of the acquisition of some premises during the pendency of a Writ Petition are not disputed, the effect of such acquisition is disputed. He submits that the respondent's family was growing and that even after taking into consideration the additional premises the respondent still needs the suit premises. He submits that additional evidence would be necessary to consider whether the need of the respondent was fully met or not by reason of acquisition of additional premises and the respondent must be given ah opportunity to adduce additional evidence to show that the need subsists. The contention is reasonable. Whether the premises acquired by the respondent during the pendency of the petition by the respondent are sufficient or not to meet his needs is a question of fact. Since that question is disputed and since a request is made by the respondent to permit him to adduce additional evidence to show that his need subsists, a remand is necessary.

13. In the circumstances, petition is allowed and the impugned judgment is set aside. The matter is remanded back to the trial Court. Parties would be permitted to adduce additional evidence regarding the additional premises acquired and the effect thereof and as to whether the respondent (sic) need subsists even after the acquisition of the additional premises. As the suit is old, it would be appropriate that the trial Court decides the suit as expeditiously as possible and preferably within a period of one year. Rule made absolute to the extent indicated above.

14. All concerned to act on a copy of this order duly authenticated by the Court Sheristedar.


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