The Bombay High Court held that a Co-operative Court has jurisdiction to adjudicate disputes involving co-operative societies’ seeking recovery of property and mesne profits, under Section 91 of the Maharashtra Cooperative Societies Act, 1960 (MCS Act). The Court stated that such disputes fall under the category of ‘management of the Society’ and therefore come within the scope of Section 91.
Section 91 of the MCS Act provides for the types of disputes which can be adjudicated by the Co-operative Court. The proviso to Section 91 provides that an industrial dispute as defined in Section 2(k) of the Industrial Disputes Act, 1947 (dispute between employer and employee connected to terms of employment) is excluded from the purview of Section 91.
Background of the case
The facts leading to the case are that the deceased respondent no. 1 was working as a sweeper in the Co-operative Housing Society (petitioner) and was provided free accommodation in a room by it. After she was terminated from her services, Society asked her to vacate the room. But she did not hand over the possession.
The Society filed a dispute before the Co-operative Court (Trial Court) under Section 91 of the MCS Act for recovery of possession of the room and for mesne profits. The Co-operative Court determined that it had jurisdiction over the matter under Section 91, as the dispute was regarding the management of the society. It ruled the Society was entitled to recovery possession of the room and mesne profits.
However, Maharashtra State Co-operative Appellate Court set-aside the order of the trial court on the ground of lack of jurisdiction. It ruled that the dispute would not fall within the scope of Section 91 MCS Act, but under Section 2(k) of Industrial Disputes Act. The Society challenges this order of the Appellate Court.
Dispute concerns management of Co-operative Society
Justice Sharmila U. Deshmukh noted that Section 91(1) MCS Act starts with a non-obstante clause and provides that a specified class of disputes arising between specified classes of parties can only be referred to the Co-operative Court.
The Court stated that the subject matter of the suit and parties to the suit must fall within the specifications provided under Section 91 MCS act.
“What is therefore required to be considered is that the subject matter of lis and the parties to the lis must fall within the provisions of Section 91 of the MCS Act.”
Regarding the parties to the suit, it said that a dispute between the Society and any past or present servant or nominee falls within Section 91. Regarding the subject-matter, it observed that Section 91 encompassed five different kinds of disputes including disputes related to the management of the Society.
The Court explained that the management of the society includes carrying out the day to day affairs such as maintenance invoices, providing services to its members, looking after the general upkeep of the land and building owned by the society.
The Court observed that the Society’s bye-laws specify one of its objectives as maintaining and administering its properties. This according to the Court includes not only protecting and preserving the Society’s assets but also recovering possession of any property owned by it.
“The words used in the object are wide enough to include the protection and preservation of the assets of the Society and will take within its fold the act of recovering possession of the property owned by the Society.”
It thus stated that the recovery of property from the occupier who no longer has authority to occupy it falls within ‘management of society’.
Dispute not an industrial dispute
The Court stated that the present dispute is not an employer-employee dispute, but a dispute regarding the recovering of assets of the society.
It noted that the Society is only praying for recovery of property owned by it and mesne profits, and not for termination of deceased respondent no.1. It also noted that the respondents did not file any counterclaim seeking any right, title or interest in the room.
It observed that “The Appellate Court was swayed by the fact that the Respondent No. 1 was an erstwhile employee of the Petitioner Society and failed to appreciate that the reliefs sought in the dispute did not pertain to the termination of the employment.”
Co-operative Court has jurisdiction over dispute
With respect to the jurisdiction of the Co-operative Court, it noted that MCS Act is a substitute for Civil Court. Since the civil court has jurisdiction to grant relief in cases of recovery of possession, the Co-operative Court also has jurisdiction to decide disputes relating to the recovery of possession, the Court stated.
“The claim in the present case arises out of the dispute concerning the assets of the Society which the Society has as its object to maintain and administer, the recovery whereof from the occupier, whose permissive user has been withdrawn by the Society, could have been entertained also by the Civil Court but not by the Industrial Court and as such, the Co-operative Court would have the jurisdiction to entertain and adjudicate the dispute.”
Therefore, the Court held that the current dispute falls under Section 91 of MCS Act as it touches the management of society and that the Co-operative Court will have jurisdiction over the matter.
It thus quashed the order of the Appellate Court and directed it to decide the appeal on merits.
Case tite: Hemprabha co-operative Housing society Ltd. vs. Kishore C. Waghela & ors. (WRIT PETITION NO.8912 OF 2019)
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