Co-operative society flat occupation dispute requires direct nexus to society business for statutory reference

A dispute arising from one member's occupation of a flat under a leave-and-licence arrangement with another member did not, by itself, touch the business of the society merely because the bye-laws regulated transfer or subletting. The statutory reference mechanism under the Co-operative Societies Act applies only where there is a real and direct nexus with the society's constitution, management or business, so a mere bye-law breach is insufficient. Matters governed by the Bombay Rent Act were not displaced, and the suit was therefore maintainable in the Small Causes Court.

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Issues: Whether the dispute between a society member and another member regarding occupation of a flat on leave and licence basis was a dispute touching the business of the society so as to be referable to the Registrar or his nominee, and whether the Small Causes Court retained jurisdiction to try the suit under the Rent Act.

Analysis: The statutory bar applied only to disputes touching the constitution, management or business of a society and to matters required to be referred to the Registrar or his nominee. The letting by one member to another, after the flat had been sold to the member, did not have the necessary point of contact with the society's business merely because the bye-laws regulated transfer or underletting. A breach of the bye-laws might affect membership, but that by itself did not convert the dispute into one touching the business of the society. The existence of the Bombay Rent Act also supported the conclusion that matters covered by that Act were not displaced by the Co-operative Societies Act.

Conclusion: The dispute was not referable under the Co-operative Societies Act, and the suit in the Small Causes Court was maintainable. The appellant succeeded.

Final Conclusion: The order of the High Court and the revisional order of the Small Causes Court were set aside, and the suit was directed to proceed in the trial court according to law.

Ratio Decidendi: A dispute arising out of a member's letting of a flat to another member does not, by itself, touch the business of the society merely because the society's bye-laws regulate occupation or subletting; the statutory reference jurisdiction is attracted only where the dispute has a real and direct nexus with the society's business.

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