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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Section 60 of the Delhi Cooperative Societies Act, 1972, (hereinafter referred to as the Act)
  • Order 7 Rule 11 of the Code of Civil Procedure (for short CPO),
  • provisions of Maharashtra Co-operative Societies Act
  • provisions of the Delhi Co-operative Societies Act
  • provisions of Order 7 Rule 11 of the CPC
  • Delhi Co-operative Societies Act, 1972,
  • Sub-section (2) of Section 60
  • Order 7 Rule 11 of the CPC.
  • Rent Control Act
  • Order 7 Rule 11
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Section 60 of the Delhi Cooperative Societies Act, 1972, (hereinafter referred to as the Act)
  • Order 7 Rule 11 of the Code of Civil Procedure (for short CPO),
  • provisions of Maharashtra Co-operative Societies Act
  • provisions of the Delhi Co-operative Societies Act
  • provisions of Order 7 Rule 11 of the CPC
  • Delhi Co-operative Societies Act, 1972,
  • Sub-section (2) of Section 60
  • Order 7 Rule 11 of the CPC.
  • Rent Control Act
  • Order 7 Rule 11
Smart Summary

Structured Summary of the Court's Opinion

Factual and Procedural Background

The plaintiff and the defendants are brothers who lived at House No. 43, Suraj Nagar, Delhi. The plot and constructions (including shops and godowns) were purchased and developed by their father, Sh. Munshi Lal. After the father's death, the parties and their mother resided in the property and the mother became a co-owner along with other legal heirs. On the mother's death, the plaintiff and defendants became co-owners, each claiming a one-third share.

The plaintiff alleged that the defendants had been collecting rents and had not accounted to him. Having earlier instituted a suit, and with additional facts coming to light, the plaintiff filed the present suit for partition claiming a 1/3rd share and seeking a preliminary decree for partition, appointment of a local commissioner/architect to suggest a mode of partition, or a sale and distribution if the property were not partitionable. The plaint did not claim relief directly or indirectly against the Co-operative Society.

The defendants denied various averments, raised preliminary objections (including non-joinder of a Co-operative Society) and later filed an application under Order 7 Rule 11 CPC contending that the suit was barred by Section 60 of the Delhi Co-operative Societies Act, 1972, because the share in the Society originally in the father's name had been transferred to the defendants. The Trial Court allowed that Order 7 Rule 11 application, held that Section 60 barred the suit, rejected the plaint, and dismissed the suit with costs. The plaintiff appealed against this order.

Legal Issues Presented

  1. Whether the bar contained in Section 60 of the Delhi Co-operative Societies Act, 1972, applied to and barred the plaintiff's suit for simplicitor partition of his claimed 1/3rd share of the property?
  2. Whether the Trial Court was correct in rejecting the plaint under Order 7 Rule 11 CPC on the basis that the subject matter fell within Section 60 of the Act?

Arguments of the Parties

Plaintiff's Arguments

  • The suit is one simplicitor for partition and is maintainable in a civil court; the subject matter is not covered by Section 60 of the Delhi Co-operative Societies Act, 1972.
  • The Trial Court erred in law by concluding that Section 60 barred the suit and in rejecting the plaint under Order 7 Rule 11 CPC.

Defendants' Arguments

  • The defendants contended that the plot (in the Society's layout plan) had been allotted originally to another and later the membership/share was transferred to the father and thereafter to the defendants; therefore, the matter concerned the Society and was covered by Section 60 of the Act.
  • On that basis they relied on precedent (including Kusum Debi Jhinjhani v. Pushpa Devi Khurda and A.V.R. & Co. v. Fairfield Co-operative House Society Ltd.) and argued that the suit was barred and should be dismissed.
  • The defendants had earlier raised preliminary objections including non-joinder of the Low Income Friends Co-operative House Building Society Ltd. as a necessary party and alleged various factual defenses (e.g., nomination/transfer of shares, non-mutation as of suit filing).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kusum Debi Jhinjhani v. Pushpa Devi Khurda, 1991 Co-op. Cases 148 (Calcutta High Court) Authority on disputes concerning nominations made by a deceased member and the proposition that such matters may be referable to the Registrar under co-operative societies legislation. The court noted that in that case the dispute related to nomination by a deceased member and there was no claim for partition; the opinion used this to distinguish the present suit (which is for partition) and to indicate that not all disputes between persons connected with a society fall within Section 60's ambit.
A.V.R. & Co. and Ors. v. Fairfield Co-operative House Society Ltd. and Ors., AIR 1989 Supreme Court 81 Held that disputes covered by the Maharashtra Co-operative Societies Act (analogous to Section 60 disputes) are to be referred to the Registrar; a civil court (or Rent Controller in that case) lacked jurisdiction to entertain such disputes. The Court also observed that such reference does not offend Articles 14 and 19 of the Constitution. The court relied on this principle to acknowledge the established law that disputes contemplated by Section 60 cannot be decided by civil courts but are referable to the Registrar; however, the court distinguished the present partition suit as not falling within that category on the face of the plaint.

Court's Reasoning and Analysis

The court began by recognizing the wide language of Section 60 of the Delhi Co-operative Societies Act, 1972, which makes disputes touching the constitution, management or business of a co-operative society referable to the Registrar and ousts civil court jurisdiction. The court also noted Section 60(2)'s enumeration of what disputes would be deemed to touch constitution/management/business, and Section 93's bar on civil/revenue court jurisdiction for such disputes.

The court accepted that the established legal proposition — endorsed by the Supreme Court in A.V.R. & Co. and by the Calcutta High Court in Kusum Debi — is that disputes falling within the ambit of the co-operative societies statute are to be referred to the Registrar and cannot be entertained by civil courts. The opinion acknowledged that such a rule can legitimately preclude a civil court from hearing matters properly within the statutory scheme.

However, the court framed the critical inquiry as a factual and procedural one: whether the lis and the reliefs as pleaded in the civil plaint were "squarely covered" by Section 60. The court emphasized that the nature of the dispute and the precise relief claimed determine whether Section 60 applies. The plaint in this case sought a simplicitor partition (1/3rd share), and did not seek relief against the Society, did not challenge any Society order in the plaint, and did not invoke the Society Act. The court observed that if the correctness of the Society's letter dated 27.7.1997 had been directly challenged in the suit, a different view might follow; but that was not the present case.

Therefore, while acknowledging precedents establishing the jurisdictional bar, the court concluded that the Trial Court erred in applying that bar at the Order 7 Rule 11 stage merely because of matters extraneous to the plaint. The court held that the plaint was not ex facie barred by Section 60 and that rejection under Order 7 Rule 11 CPC on that ground was not justified. The court distinguished between dismissal on merits after trial and rejection of the plaint as barred by law at the preliminary stage.

Holding and Implications

Holding: The appellate court SET ASIDE the judgment and decree of the Trial Court which had rejected the plaint under Order 7 Rule 11 CPC on the ground that Section 60 of the Delhi Co-operative Societies Act, 1972, barred the suit. The appellate court remanded the case to the Trial Court for fresh adjudication in accordance with law.

Direct consequences and directions issued by the court:

  • The Trial Court's order rejecting the plaint and dismissing the suit is set aside.
  • The matter is remitted to the Trial Court for fresh adjudication on the original records, and the parties are directed to appear before the Trial Court.
  • The original records of the Trial Court will be returned to it.
  • In the facts and circumstances of the case, the parties are left to bear their own costs.

Broader implications: The opinion does not purport to lay down a new rule of law. It reiterates existing principles that disputes falling squarely within the purview of Section 60 are to be referred to the Registrar, but clarifies that a civil court must examine the plaint and reliefs pleaded to determine whether the statutory bar applies. The court emphasized procedural propriety in applying Order 7 Rule 11 CPC and distinguished preliminary rejection on jurisdictional grounds from adjudication on merits.

    Ram Prasad v. Mohan Lal And Ors

    Swatanter Kumar, J.— A simple but interesting question of law falls for consideration before the Court in the present appeal. The suit of the plaintiff for partition was dismissed by the learned Trial Court on the ground that the subject matter of the suit was covered by Section 60 of the Delhi Cooperative Societies Act, 1972, (hereinafter referred to as ‘the Act’) and while rejecting the plaint under Order 7 Rule 11 of the Code of Civil Procedure (for short ‘CPO’), dismissed the suit with costs. It is contended that this approach of the learned Trial Court is contrary to the settled principles of law. Thus, the question arises, whether the bar of Section 60 of the Act was attracted in the facts and circumstances of the present case?

    2. Parties to the suit are brothers. They all were living at House No. 43, Suraj Nagar, Delhi. According to the plaintiff, the plot was purchased and construction was raised thereupon by the father of the parties. It is submitted that these constructions included shops, godowns etc. and there were even tenants in the said property. After the death of Sh. Munshi Lal (father of the parties), the parties along with their mother started residing in the property and the mother became a co-owner along with the other legal heirs of the deceased-father. After the death of the mother, the plaintiff and the defendants became the co-owners in equal shares i.e to the extent of 1/3rd share. It is submitted that though, the defendants had been realising the rent from different tenants even during the lifetime of their mother, however, they did not give any money to the plaintiff. Earlier, the plaintiff had filed a suit and as certain new developments occurred and further facts came to the knowledge of the plaintiff, he filed the present suit for partition taking into consideration the averments which were made by the defendants in their written statement filed by them in the earlier suit. According to the plaintiff, he is entitled to 1/3rd share as a co-owner of the property left by his late father but as the defendants were not giving any share to him nor were they giving any benefits of the property including the rents collected by them earlier, the plaintiff has filed the present suit with the following prayers:—

    “It is, therefore, prayed that a decree for partition be passed in favour of the plaintiff and against the defendants in the following manner

    (i) A preliminary decree be passed in respect of 1/3 share to the plaintiff out of the entire suit property.

    (ii) A local commissioner be appointed or architect may be appointed who may be directed to visit the suit property and to suggest appropriate mode of partition of property amongst the plaintiff and the defendants.

    (iii) Or in case the property is not partitionable and in that event the property be ordered to be sold in open auction and the money so recovered by sale of the house be ordered to be divided amongst the plaintiff and the defendants in equal share i.e 1/3 each.

    The cost of the suit be also awarded or any other relief which this Hon'ble Court may deem fit and proper in the circumstances of the case be awarded.”

    3. The defendants filed the written statement on 11.9.1995 taking various preliminary objections including that no cause of action had arisen against the defendants and in favour of the plaintiff; the plaintiff had not come to the court with clean hands and the suit was bad for non-joinder of parties as ‘The Low Income Friends Co-operative House Building Society Ltd.’ was a necessary party. The defendants denied to state as to how the property was purchased. It was also denied that the plaintiff had never resided in the said property. The defendants stated that the defendant No. 2 was carrying on the business of tailoring in one of the shops during the lifetime of Sh. Munshi Lal with his wish and will. They were nominated and after his death on 5.10.1980, the defendants approached the society for transfer of shares. The Society after verifying the documents on 26.7.1980 transferred the shares in the joint name of the defendants and on the date of filing of the suit, the property had not been mutated in their names. Thus, it was stated that the defendants were in no way interested in the welfare of the family, and had not even bothered to check-up on their mother during her lifetime and in these circumstances it was submitted that the suit be dismissed.

    4. During the pendency of the suit, the defendants then filed an application under Order 7 Rule 11 on 24.1.1996 stating that the plot No. 43 in the layout plan of the Society was allotted to Sh. Tarsem Lal. Later on he transferred his plot and his membership in the Society in the name of Sh. Munshi Lal, father of the defendants and thereafter the share has been transferred in the name of the defendants after the death of their father. It is stated that in view of the provisions of Section 60 of the Act, the suit was barred and thus, the same be dismissed. Reply to this application was filed. The learned Trial Court vide its judgment and order dated 13.8.1996 allowed this application and as already noticed, the suit of the plaintiff was dismissed. The Trial Court concluded as under:—

    “I have gone through the provisions of said Act and considered the citation of counsel for defendant. The provisions of the Delhi Co-operative Societies Act expressly bar this suit because the subject matter in suit is covered by section 60 of the said Act. The citations are also direct on this point and the same apply to this case. So, I find no force in the contentions of counsel for the plaintiff and I accept the arguments of counsel for defendant and I hold that suit is barred by the provisions of the said Act.

    7, In view of the above observations finding suit barred by express provisions of law, the Delhi Co-operative Societies Act, 1972, I hereby reject the plaint and the suit is accordingly dismissed with costs. Decree sheet be prepared and file be consigned to record room.”

    5. The above order of the Trial Court is impugned in the present appeal. The learned counsel appearing for the appellant contended that the suit was one of simplicitor partition of the property and was maintainable; the subject matter of the suit was not covered under the provisions of Section 60 of the Act and it was argued that the learned Trial Court has fallen in error of law in arriving at the above conclusion and the judgment of the Trial Court is liable to be set aside.

    6. On the other hand, the learned Counsel appearing for the respondents while relying upon a judgment of the Calcutta High Court in the case of Kusum Debi Jhinjhani v. Pushpa Devi Khurda 1991 Co-op. Cases 148 and the judgment of the Supreme Court in the case of A.V.R & Co. and others v. Fairfield Co-operative House Society Ltd. and others AIR 1989 Supreme Court 81 argued that as the share in the society, which was in the name of the deceased-father of the parties, had been transferred in favour of the defendants, it could not be challenged in the suit before a civil court being a subject matter covered under Section 60 of the Act and as such the present suit was barred.

    7. The language of Section 60 of the Act is very wide. It is stated that notwithstanding anything contained in any law for the time being in force, any dispute touching the constitution, management or the business of a Co-operative Society, other than a dispute regarding disciplinary action by the Society against its employee, would be referable to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such disputes. Sub-section (2) of Section 60 then proceeds to enumerate as to what kind of disputes would be deemed to be disputes touching the constitution, management or the business of a co-operative society. Section 93 of the Act further provides that no civil or revenue court shall have any jurisdiction in respect of any dispute required under Section 60 of the Act and has to be referred to the Registrar. The Supreme Court in the case of A.V.R & Co. and Ors. (supra) while dealing with a case where the suit was to evict a member and persons unauthorisedly inducted by him as licencees from the allotted flat, held that such a dispute was covered under the provisions of Maharashtra Co-operative Societies Act and the Court under the Rent Control Act had no jurisdiction to entertain such a dispute. This preposition of law that the disputes as contemplated under Section 60 of the Act cannot be decided by the Court of Civil Jurisdiction and would be referable to the Registrar alone in accordance with the provisions of the Act, can hardly be disputed. What the court has to examine is whether the dispute and prayer before the Civil Court is squarely covered under the provisions of Section 60 of the Act or not. The Supreme Court also held that the dispute between the Co-operative Society and non-member claiming through the member, would not offend Articles 14 and 19 of the Constitution. But the essence of dispute in that case was between a member of the Society who was alive and certain unauthorised occupants inducted by him in the premises, allotted to him by the society and in those circumstances it was held that the dispute was referable to the Registrar, and the Rent Controller Court would have no jurisdiction. Similarly, in the judgment of the Calcutta High Court the dispute raised was with regard to nomination made by the deceased-Member. There was no claim for partition much less exclusively for partition.

    8. Nature of the dispute and relief claimed by a party would be the basis for determination of such a question. We have already referred to the prayer made by the plaintiff in the suit before the Civil Court. As far as the suit for declaration, giving claim of title where even indirectly question of nomination may arise, is stated to be pending between the parties as mentioned by the defendants in the application filed by them under Order 7 Rule 11 of the CPC. In the present case, the prayer simplicitor is that the suit be partitioned to the extent of 1/3rd share wherein the defendants may raise a defence of their being the exclusive owners and a suit for partition may be liable to be dismissed or may be decreed by the court, depending on the evidence led by the parties. But the court certainly could not dismiss the suit as being barred. The relief claimed in the plaint does not in any way fall within the ambit and scope of Section 60 of the Act. The letter of the Society dated 27.7.1997 has not been questioned by the plaintiff. If the correctness of that order was raised in the suit, then probably the view taken by the learned Trial Court could be correct. The Civil Court has to decide the lis pending before it with reference to the facts stated in the plaint and particularly the relief claimed. The entire plaint does not refer to the Act of the Society and in the prayer clause no relief is claimed directly or indirectly against the society. In the present appeal we are not concerned with the other litigations pending between the parties or whether the order of the Society has been questioned by the plaintiff under the provisions of the Act and what is its status. We are also not concerned with the fact that whether the suit was likely to be dismissed by the Trial Court after trial on merits. The view of the Trial Court that the suit was barred by the provisions of Section 60 of the Act, at this stage of the suit, does not appear to us to be in consonance with the scheme of the Act and the jurisdiction of the civil court Dismissal of a suit on merits would be entirely a different matter but dismissal of a suit on the ground of it being barred by law is controlled and governed by different cannons of law. The prayer made by the plaintiff in the suit does not appear to be ex facie hit by the bar of Section 60 of the Act. The suit as framed and the prayer made in the suit would not justify rejection of the plaint under the provisions of Order 7 Rule 11 of the CPC on the stated grounds.

    9. For the reasons afore-stated, we would set aside the judgment and decree of the Trial Court and remand the case to the Trial Court for fresh its adjudication in accordance with law. The parties are directed to appear before the learned Trial Court on Original records of the Trial Court will be returned to the Trial Court. However, in the facts and circumstances of the case, we would leave the parties to bear their own costs.

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    Comments

    Ram Prasad v. Mohan Lal And Ors
    (May 11, 2006)