Can a society file a Section 91 dispute against a member's licensee? Bombay High Court

A member has gone abroad, or moved to another city for work, and let the flat out on leave and licence. Now the licensee will not leave. The member wants possession back, and the committee is asking whether this is the society's problem at all, or only the member's. The Bombay High Court answered that question in 1982, and the answer still shapes how a committee should think about Section 91 of the Maharashtra Co-operative Societies Act, 1960.

The case in brief

Bandra Green Park Co-operative Housing Society v. Dayadasi Kalia was decided by a Division Bench of the Bombay High Court on 25 March 1982 (AIR 1982 Bom 428; (1982) 84 Bom LR 177). It was a Letters Patent appeal against a single judge's order on a writ petition under Article 226.

The member bought Flat No. 6 around 1964 and left Bombay for her husband's employment. A leave and licence agreement dated 1 September 1972 let the licensee in. When the husband retired, the society and the member jointly raised a dispute for possession and compensation on 15 September 1975, and the Deputy District Registrar referred it to the Co-operative Court.

The licensee said she was a Rent Act tenant and that the society, having no interest in the flat, was an idle party that had lent its name only to attract the Co-operative Court's jurisdiction. The Co-operative Court held, as a preliminary issue and without evidence, that it had jurisdiction. The single judge quashed the reference, reasoning that the society's business ended once members were put in possession. The Division Bench allowed the appeal.

What the court decided

The holding is narrow, and should be read that way.

• •Possession does not end the society's business. Its business does not come to an end merely on construction of the building and putting the members in possession of the flats (para 7).
• •The plaint decides the stage. On the averments in the plaint, if found true at the trial, the society was an interested disputant, and securing the member's possession and the non-member's eviction touched its business (para 10).
• •The question is the bye-laws. Whether the member is a co-disputant or on the other side does not matter. Whether the dispute touches the society's business will depend on whether the occupation of the stranger happens to be in breach of the bye-laws or not. On these averments the licensee had come in with the society's permission, so the member was not alleged to be in breach, and a breach by the member is not an ingredient in every such case (para 11).
• •The society is not the landlord. Its mere permission does not make it a party to the licence, and, on the earlier Division Bench judgment the court followed, a housing society can never be the landlord of a licensee inducted by its member. Whether she was truly a tenant could not be decided without trial and proof (paras 12-13).
• •The Registrar's satisfaction is preliminary. Under Section 93(1) it is prima facie only and needs no notice to the non-disputant. Describing the Registrar's reference, the court said in paragraph 24: "Such \"decision\" is neither final nor can it prevent the Co-operative Court from trying any issue as to dispute being covered by S. 91 or not." (paras 16-24).
• •Result. The single judge's order was set aside and the Co-operative Court was directed to dispose of the dispute according to law (para 26).

Why it matters for your society

A society that is an interested disputant on the pleadings, and whose bye-laws are engaged by the stranger's occupation, can go before the Co-operative Court, and the licensee's claim to be a protected tenant is for trial, not a ground to dismiss at the threshold.

The licensee's status and the merits were left open. The society gets a forum, not a result.

What your committee should do

1. 1Get the intimation on record. Bye-law 43(1) requires the member to intimate the society of giving the flat on leave and licence, and to submit a copy of the agreement and of the police station intimation report.
2. 2Scrutinise it in time. Bye-law 63(b) requires the Secretary to scrutinise what is received and to bring any shortcoming to the member's notice within 15 days of receipt.
3. 3Enter the occupant in the register. An eligible licensee may be admitted as a Nominal Member under bye-law 20, and bye-law 141(15) requires the Register of Nominal Members (Tenant occupant).
4. 4Watch the licence period. Under bye-law 58(d) nominal membership ceases when the permitted period expires. Diarise expiry.
5. 5Take legal advice before filing. Bye-law 174(b), under the Co-operative Court head, lists disputes between members, or between members and the society, which fall under Section 91. The list is introduced by the words such as and closes with a residuary entry for any other like disputes within that Court's jurisdiction, so it is illustrative; it does not itself name a dispute with a licensee.
6. 6Plead the society's interest. The dispute is tested on what the plaint says. Show how the occupation touches the society's business and bye-laws, not merely that the member wants her flat back.

Limits of this ruling

• •It is a jurisdiction ruling at the preliminary stage and decides nothing on the merits.
• •It rests on the plaint's averments, taken as true for that purpose.
• •It construed the Act, the Rules and the Rent Act as they stood in 1982.
• •The bye-laws have changed. The court reasoned from bye-laws allowing a non-member to occupy only with the society's permission, and tied the answer to whether the occupation was in breach of the bye-laws. Under bye-law 43(2) of the 2014 Model Bye-laws, no permission of the society is required to sublet; only 8 days' prior intimation. The breach-of-bye-laws hook is therefore much narrower today: a failure to intimate, not an absence of permission. The case is not overruled, but its reasoning must be applied to today's bye-law 43.
• •Section 91 still applies to housing societies through Section 154B(1), but recovery of a society's dues now goes by Section 154B-29, not Section 91.