T.P. Mukundan vs Cannanore Co-op. House Construction Society Ltd.

T.L. Viswanatha Iyer, J.—The plaintiff who has been non - suited by the lower appellate court on the ground that the suit is barred by section 100 read with section 69 of the Kerala Co - operative Societies Act, 1969 (the Act, for short), is the appellant. He was the allottee of plot No. 11 in a co-operative housing colony at Pallikkunnu, which was being developed at the instance of the respondent Cannanore Co - operative House Construction Society Ltd. The said Society is a co - operative society registered under the Act. The Society had issued a circular Ext. At dated 19-5-1978 to its members offering them house sites of ten cents each at a price of Rs. 8,500/-. to be deposited on allotment of the plot as cost of the land. The plaintiff deposited Rs. 8,500/- on the allotment of plot No. 11 to him. It was discovered subsequently that the extent of the plot allotted was not 10 cents as represented in Ext. Al, but something less, namely 8.23 cents, according to the plaintiff. Plaintiff protested to the Society about the deficit allotment which did not meet with any response land ultimately the plaintiff filed the suit for a decree directing either allotment of 1.77 cents more of land or to pay him the value thereof at Rs. 850/- percent. The defence of the society was inter alia that the plaintiff was actually allotted nine cents of land, that there was no undertaking to allot ten cents of land'' to the plaintiff or others, and that the deficiency of one cent arose only because sixteen cents out of the 1.60 acres of land purchased were taken over by the Panchayat for public purposes with the result only nine cents each could be allotted to the sixteen allottees. It was thus that the plaintiff happened to be allotted nine cents. There was also plea that the suit was barred as the dispute was one touching the business of the society. The trial court held that the plaintiff had been allotted nine cents of land as against ten cents agreed upon and accordingly decreed the suit for the value of one cent, without practically any discussion on the question of jurisdiction. On the Society''s appeal, the appellate court agreed with the findings of the trial court regarding the extent of land allotted to the plaintiff namely nine cents as also that the plaintiff was entitled to get ten cents of land as offered in the circular Ext, A1. The appeal was however allowed, and the suit dismissed on the ground that it was barred by section 100 read with section 69 of the Act, since the dispute was one touching the business of the society.

The solitary question that arises for consideration in this second appeal is whether the suit is barred u/s 100 read with section 69 of the Act.

The statute governing the matter is the Kerala Co - operative Societies Act, 1969. Plaintiff is admittedly a member of the Society, which is one registered under the Act. Section 100 of the Act deals with bar of jurisdiction of courts, and provides that no civil or revenue court shall have any jurisdiction in respect of any matter for which provision is made in the Act. The provision in the Act relating to disputes is section 69 under which any dispute between a member and the society shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. "Dispute" is defined in section 2(i) as meaning any matter touching the business, constitution, establishment or management of a society, capable of being the subject of litigation, including a claim in respect of any sum payable to or by a society, whether such claim be admitted or not. The question is whether the dispute forming the subject matter of the suit is one "touching" the business of the society thereby attracting the exclusionary provision in section 100 of the Act.

It is not in dispute that the society in question is a house construction society whose business it is to allot plots/houses to its members. The allotment of a plot to the plaintiff pursuant to the circular Ext. Al is thus part of the business of the society. There is no serious dispute on this point. The contention is that the claim for allotment of one more cent of land or for the value thereof is not one touching the business of the society. "Touching the business" is an expression of wide amplitude and would take within its ambit any matter which relates to or concerns the business of the society. ( Deccan Merchants Co-operative Bank Ltd. Vs. Dalichand Jugraj Jain and Others, ). If the activity of allotting plots to members is part of the business of the society, any dispute arising out of that allotment, consequent on, or incidental to that allotment, is a dispute which has reference or relationship to the business of the society, and therefore one ''touching'' its business. It is true that there is a distinction between the expression ''touching the business'' and ''for the purpose of business''. What is excluded from section 69 are disputes relating to purpose of the business, and not those touching the business, as explained by Raghavan, J. in Coir Industrial Co - operative Society v. Govindan, 1962 KLT 400. But where the dispute directly arises out of the business activity of the society, it can only be treated as one touching the business of the society and not as one for the purpose of its business. The word ''touching'' being one of wide import, it takes within its ambit every dispute which arises out of, or has a direct relation or reference to, or bearing upon the business of the society. Activities which are intended only to foster the interests of the society and which do not arise out of the business activities as such, may be treated as for the purpose of the business and not as touching the business. But where, as here, the dispute arose directly out of the business of allotment of plots, it can only be treated as one touching the business of the society. In Murugayya v. L.B. Pawar, 1969 (1) Mysore Law Journal, 196 a Division Bench of the High Court of Mysore held that the complaint by two members of a housing society against the society and another member that the house which should have been allotted to them had been wrongly allotted to another member was a dispute falling within section 70 of the Mysore Act, corresponding to section 69 of the Kerala Act. The case on hand is only an extension of that principle.

Counsel for the appellant referred to the decision in Ponnuswamy v. Nambeesan 1978 KLT 836, where Koehu Thommen, J. as he then was, stated that a question of title relating to land arising between a society and its member was not one touching the business of the society, a view in which he tread the path taken by Namboodlripad, J. in Mannur Service Co- operative Bank Ltd. v. Alvi Haji. 1975 KLT 363. The dispute in that case was one relating to title to land in respect of which the learned Judge stated that it did not touch the business of the society, a view that does not touch the case on hand.

The broad proposition urged by counsel for the appellant at the fag end of his submissions that no dispute relating to immovable property, arising between a society and its member, can form the subject matter of arbitration u/s 69, is not capable of acceptance in the absence of any limitation to that effect in section 69. At any rate the dispute in this case is not one relating to immovable property but one concerning the contractual relationship between the parties. The view taken by the lower appellate court that the suit was barred by section 100 read with section 69 of the Act is therefore right in law and has to be upheld.

The second appeal fails and is dismissed without however, any order as to costs.