JUDGEMENT :-

M.R.SHAH, J.

1 Present Second Appeal under Sec.100 of the Code of civil Procedure has been preferred by the appellant-original plaintiff to quash and set aside the impugned judgment and order dated 7-5-2007 passed by the learned Additional District Judge, Bhavnagar Camp at Mahuva in Regular Civil appeal No.115 of 2005, by which the learned Appellate Court has dismissed the said appeal confirming the judgment and decree dated 12-8-1996 passed by the learned 3rd Joint Civil Judge, Senior Division, Bhavnagar in Special Civil suit No.124 of 1983.

2 The appellant herein-original plaintiff No.2 had instituted Special Civil suit No.124 of 1983 in the Court of learned Civil Judge (S. D.), Mahuva against the respondents herein-original defendants, for specific performance of the contract dated 18-6-1981. It was the case on behalf of the plaintiff that the defendants are owners of land bearing Revenue Survey No.248 paiki admeasuring 4 acres and 16 gunthas situated at Mahuva. That the plaintiff No.2 is a registered co-operative Society registered on 3-6-1982. The defendants agreed to sell the suit land to the plaintiff No.1 by agreement-to-sale dated 18-6-1981 for Rs.23,501/- a bigha. That earnest money of Rs.20,000/- was paid by cash. That the defendants gave Power of Attorney to one Mr. Maheshkumar N. Mehta for the purpose of converting the land into non-agricultural use. Upon such sanction, the sale-deed was to be executed. That the possession was to be handed over on 20-11-1981. As per the plaintiffs they were ready and willing to perform their part of contract, however, the defendants instead of performing their part, issued notice on 19-1-1982 denying to execute the sale-deed, and therefore, the plaintiffs filed a suit for declaration and permanent injunction being Regular civil Suit No.21 of 1982 in the Civil Court, Mahuva. That thereafter, as the defendants raised false dispute pending the said suit, the plaintiffs instituted the present suit for specific performance of the Agreement-to-sale dated 18-6-1981. The suit was resisted by the defendants by submitting that the plaintiffs are not entitled to the relief/decree for specific performance of the agreement-to-sale dated 18-6-1981, as the agreement-to-sale dated 18-6-1981 was in favour of proposed Co-operative Society i. e. unregistered co-operative Society, and therefore, the suit for specific performance of the agreement-to-sale is not maintainable. That the learned trial Court framed the issues that whether the suit contract is legally enforceable in view of the fact that the plaintiff No.2 was not registered under the provisions of the gujarat co-operative societies act on the date of the contract? That the learned trial Court answered the aforesaid issue in negative and held that the suit contract is legally not enforceable in view of the fact that the plaintiff No.2-Society was unregistered on the date of the execution of the Agreement-to-sale. However, the learned trial Court passed an order directing the defendants to repay Rs.20,000/- to the plaintiffs which was received by them by way of earnest money. Being aggrieved by and dissatisfied with the judgment and decree passed by the learned trial Court in special Civil Suit No.124 of 1983 in refusing to grant relief for specific performance of the agreement-to-sale dated 18-6-1981, the appellant-original plaintiff No.2 preferred Regular Civil Appeal/first Appeal No.4413 of 1996 before this Court which was subsequently transferred to the District Court, bhavnagar, upon enhancement of pecuniary jurisdiction of the trial Court and the same was subsequently numbered as Regular Civil Appeal No.115 of 2005. That the learned Additional District Judge, Bhavnagar Camp at Mahuva by the impugned judgment and order dated 7-5-2007 dismissed the said appeal confirming the judgment and decree passed by the learned trial Court refusing to grant relief of specific performance of the agreement-to-sale dated 18-6-1981 on the ground that the said contract was legally not enforceable as the original plaintiff No.2 in whose favour agreement-to-sale dated 18-6-1981 was executed was unregistered Society at the time of execution of the said agreement-to-sale dated 18-6-1981. Being aggrieved by and dissatisfied with the judgment-original plaintiff has preferred present Second Appeal under Sec.100 of the Code of civil Procedure.

3 Mr. A. J. Patel, learned Advocate appearing on behalf of the appellant has suggested the following substantial question of law to be decided and considered by this Court in the present Second Appeal :

(i) Whether in the context of provisions of Secs.161 and 162 of the Co-operative Societies Act, 1961 read with Circular of the Government of gujarat would be resorted to for the purpose of maintenance of the suit by unregistered Co-operative Society?

4 At the outset, it is required to be noted and which is not disputed that at the time when the agreement-to-sale was executed it was in favour of proposed chitrakut Dham Co-operative Housing Society Ltd. , and on that day the proposed society in whose favour the agreement-to-sale was executed of which specific performance is sought, was unregistered society. Both the Courts below relying upon the decision of this Court in the case of Ramji Mandir Narsinhji and Ors. V/s. Narsinhnagar at Tekari Co-operative Housing Society Ltd. and Ors. , reported in 1979 GLR 801 as well as decision of the Hon'ble Supreme Court in the case of Maneklal Mansukhlal Co-operative Housing Society Ltd. V/s. Rajendrakumar maneklal Shah and Ors. , reported in 2002 (1) GLH 290 (SC), refused to grant decree for specific performance of the agreement-to-sale dated 18-6-1981 by holding that the said contract/agreement-to-sale is not enforceable at law, as the same was in favour of a proposed co-operative society which was unregistered and as held by the Hon'ble Supreme Court as well as this Court, proposed/ unregistered society cannot be said to be legal entity.

5 Mr. A. J. Patel, learned Advocate appearing on behalf of the appellant, has however, relied upon the provisions of Secs.161 and 162 of the Gujarat Co-operative Societies Act, 1961 ("the Act" for short) and the Circular of the Government of Gujarat issued for the purpose of registration of the society under the Act. Mr. Patel, learned Advocate appearing on behalf of the appellant has submitted that Sec.161 of the Act empowers the State Government to exempt any society or class of society from any of the provisions of the Act, or may direct that such provision shall apply to such society or class of societies with such modifications not affecting the substance thereof as may be specified in the order. It is submitted that the State Government has issued Circular on 14-8-1981. It is submitted that the said circular provides for procedure for registration of the society and it has been provided therein that along with the application for the purpose of registration, description of the land owned by the society will have to be given. It is submitted that under Art.162 of the Constitution of India, the executive instructions can be issued by the state Government in connection with the matters which are not covered either by the Central or State Act. The only embargo is that whatever Circular or executive instruction that is issued by the State shall have to stand the test of Art.14 of the Constitution of India. Therefore, it is submitted that the circular issued by the State Government on 14-8-1981 can be said to be executive instructions which are issued by the State, which do not come in conflict with the provisions of the Act or any other provisions of any other Act. Therefore, it is submitted that when the Circular contemplates the mentioning of the land owned by the proposed society, it would mean that a society which is to be registered will have to own/possess land in the context of the provisions of Sec.37 of the Act. The society comes into existence in the eye of law only on registration. Therefore, it becomes a legal person on the day on which it is registered. The present society was also registered, but subsequently. However, when the society was registered, the land in question was mentioned for the purpose of meeting the objects of the society. It is submitted that by making these provisions in the Circular, the departure is made by the State government in the context of acquisition of land by a proposed society. In other words, even a proposed co-operative society can enter into an agreement notwithstanding the provisions of Sec.37 of the Act, which will be enforceable in law because if the law is enforced as it is, it will create a statement and an anomalous situation. According to Mr. Patel, learned Advocate appearing on behalf of the appellant, a society which does not have land cannot make application for the purpose of its registration. Therefore, when the society makes an application, it will have to be a proposed society, therefore, the anomaly would be as to whether the first egg and then chicken or first chicken and then egg. It is submitted that probably the State of Gujarat had this anomalous situation in mind, and therefore, in order to do away with the strict requirement of Sec.37 of the Act, the Circular was issued so that a proposed society can also have land and get registered. Therefore, only for the limited purpose, a society which is proposed, will have the status of legal person which can enforce a contract. Therefore, it is submitted that in the context of the above position, the State Government has issued the Circular which could be termed to be a Circular issued under Art.162 of the Constitution of India with a view to meet the hardships of unregistered society. Therefore, it is submitted that the contract that was entered into by the proposed society in the year 1981 would be enforceable in law. Relying upon the subsequent order of the dy. Collector, Mahuva dated 19-9-1983, granting permission to convert the land in question into non-agriculture for the purpose of building of residential quarters which was by the time registered, it is submitted that undisputely the contract has come into existence, which could be enforceable. Making above submissions, it is requested to allow present Second Appeal.

6 Present Second Appeal is opposed by Mr. Upadhyay, learned Advocate appearing on behalf of the respondents herein-original defendants. It is submitted that the original-plaintiffs have instituted the suit for specific performance of the agreement-to-sale and admittedly on the day of the execution of the contract the plaintiff No.2-Society in whose favour the agreement-to-sale was executed, was a proposed society and was unregistered society and considering Sec.37 of the Act and considering the decision of the Hon'ble Supreme Court in the case of this Court Maneklal Mansukhlal Co-operative Housing Society Ltd., (supra) and decision of this Court in the case of this Court Ramji Mandir Narsinhji and Ors. (supra) when both the Courts below have dismissed the suit by holding that there was no enforceable contract/agreement-to-sale, it is requested to dismiss present appeal.

6a. It is further submitted that reliance placed upon Sec.161 of the Act and Circular dated 14-8-1981 is absolutely misplaced. It is submitted that what is needed for the purpose of registration of the society cannot be considered for the purpose of enforcement of agreement-to-sale. Submitting accordingly, it is requested to dismiss the present appeal.

7 Heard the learned Advocates appearing on behalf of the respective parties.

8 It is not in dispute that the suit in question has been preferred by the appellant-original plaintiff for specific performance of the agreement-to-sale dated 18-6-1981. It is also not in dispute that the said agreement-to-sale was in favour of the proposed Chitrakut Dham Co-operative Housing Society Ltd. , Mahuva. It is also not in dispute that on 18-6-1981 the plaintiff No.2-Society was a proposed society and was unregistered co-operative society, and admittedly, the appellant-original society has been registered subsequently. As such the controversy with respect to maintainability of the suit for the specific performance of the agreement-to-sale in favour of the proposed co-operative society and/or unregistered co-operative society is not res-integra. In the case of Ramji Mandir Narsinhji and Ors., (supra) the Division Bench of this Court has held that Sec.37 of the gujarat Co-operative Societies Act, a Co-operative Society becomes a legal person only after it is registered and after its registration that it acquires the capacity to enter into the contract. It is further held by the Division Bench that the language of Sec.37 is clear enough to show that it is only after registration of the society that it can enter into the contracts. By making above observations, it is held that a contract between the proposed co-operative society is a nullity, and hence, it cannot be enforced.

9 Similar view has been taken by the Hon'ble Supreme Court in the case of Maneklal Mansukhlal Co-operative Housing Society Ltd. , (supra ).

10 In view of the above, Mr. Patel, learned Advocate appearing on behalf of the appellant, relying upon Sec.161 of the Act and Circular dated 14-8-1981 issued by the State Government has not tried to submit that as for the purpose of registration of the co-operative society, there is requirement that the proposed society which is to be registered must have land, there must be some contract to purchase the land for the purpose of registration by the society, and therefore, a contract by proposed/unregistered co-operative society is contemplated, and therefore, when a proposed co-operative society/unregistered co-operative society enters into an agreement-to-sale to purchase the land, the same is enforceable contract. The learned Advocate appearing on behalf of the appellant has relied upon Sec.161 of the Act. Sec.161 of the Act confers power upon the State Government to exempt any society or class of society from any of the provisions of the Act. It is not appreciable how the said provision can be of any assistance to the appellant. Sec.161 of the Act would be applicable in a case where a society or societies are already registered under the provisions of the Act and it provides for exemption by the State Government from certain provision of the Act with respect to such registered society and/or societies. Therefore, even for invoking and/or applying Sec.161 of the Act, there shall be a registered society or societies.

11 Now, so far as the reliance placed upon the Government Circular dated 14-8-1981 and submissions made on behalf of the appellant relying upon the aforesaid circular stated hereinabove is concerned, the submissions seem to be very attractive, but have no substance at all. The aforesaid Government circular relied upon by the appellant is with respect to registration of the co-operative societies and it provides that along with the application for the purpose of registration of co-operative society, the description of the land owned by the society will have to be given, and therefore, there must be some contract or the agreement-to-sale with respect to the land on which/for which the society is to be registered. Therefore, that agreement-to-sale by the proposed society would be for the limited purpose of registration of the co-operative societies under the Act only. However, on the basis of such an agreement-to-sale by the proposed co-operative society which is only for the purpose of registration of the co-operative societies under the Act, it cannot be said that the same can be an enforceable contract for the purpose of specific performance of such an agreement-to-sale.

12 Section 37 of the Act is very clear. As held by the Hon'ble Supreme court in the case of Maneklal Mansukhlal Co-operative Housing Society Ltd., (supra) and by this Court in the case of this Court Ramji Mandir Narsinhji and Ors. , (supra) and other judgments, proposed/unregistered society cannot be said to be a legal entity, and therefore, any contract or agreement-to-sale by or in favour of such a proposed/unregistered society, is not enforceable under the law, and therefore, no relief for the specific performance of such a contract can be granted. Merely because for the purpose of registration of the society, agreement-to-sale/contract in favour of the proposed society and/or by the proposed society is required, that does not make the contract enforceable for the purpose of relief of specific performance. For the purpose of making agreement-to-sale/contract enforceable for the purpose of specific performance, what is required is that after the society is registered under the provisions of the Act even on the basis of agreement-to-sale in favour of proposed co-operative society, there must be a subsequent another agreement-to-sale/contract in favour of such registered society and then only such agreement-to-sale/contract is enforceable under the law for the purpose of specific performance. In other words, the moment a society is registered on the basis of agreement-to-sale/contract in favour of proposed co-operative society (as required under the circular of the government dated 14-8-1981), the said agreement can be said to be valid for the purpose of registration of co-operative society only and such agreement-to-sale in favour of proposed co-operative society comes to an end, moment the society is registered and for the purpose of specific performance, as pointed out hereinabove, another agreement-to-sale/contract by the registered co-operative society for the purpose of specific performance is required and then and then only it can be said that the agreement-to-sale/contract is in favour of the legal entity (considering Sec.37 of the Act) which is enforceable under the law. Under the circumstances, the contention on behalf of the appellant that as, as per the circular of the State Government for the purpose of registration of the society, there must be an agreement-to-sale/contract and that is always by proposed society and such a contract is contemplated in favour of the proposed society, and therefore, the same is enforceable under the law, cannot be accepted. Such an agreement-to-sale in favour of a proposed society can be considered for the purpose of registration of the society only, but is not enforceable under the law for the purpose of specific performance, as the proposed/unregistered society is not legal entity till it is registered, as held in the aforesaid decisions by the hon'ble Supreme Court as well as this Court.

13 In view of the above and considering the fact that the suit for specific performance of the contract/agreement-to-sale was in favour of a proposed co-operative society which has no a legal entity at the relevant time and considering the aforesaid decisions of the Hon'ble Supreme Court as well as this Court, when decree for specific performance in favour of the appellant-original plaintiff society is denied, the same is not required to be interfered with by this Court.

14 For the reasons stated above, present Second Appeal fails. It deserves to be dismissed and is accordingly dismissed. Consequently, Civil Application is also dismissed. Notice is discharged. Interim relief granted earlier, if any, stands vacated forthwith. In the facts and circumstances of the case, there shall be no order as to costs. After pronouncement of the order, Mr. U. I. Vyas, learned Advocate appearing on behalf of the appellant requests for continuation of the interim relief. At the outset, it is to be noted that as such there was no ad-interim relief in favour of the appellant during the pendency of the present appeal. Even otherwise, in the facts and circumstances of the case and the finding of this Court recorded hereinabove, the request to continue the interim relief is rejected.