Sinha, C. J. - (1.) This appeal on a certificate granted by the High Court of Judicature at Bombay is directed against the Judgment and order of a Division Bench of that Court, dated March 12, 1959, reversing those of the Judge of the Bombay Civil Court, passed in Chamber Summons, in Arbitration Case No. A.B.N./C.H.O.-2310/88 of 1954-55.
(2.) It is necessary to state the following facts in order to bring out the points in controversy between the parties. The Happy Home Co-operative Housing Society Ltd.,-Hereinafter referred to as the Society -was registered in February 1949. It obtained a lease of a piece of land measuring about 12 thousand sq. yards, situated at Nehru Road, Vile Parle (East) Bombay. The Society divided this land into 17 plots to be allotted to each one of its members for building purposes. A member was under the obligation of payment of premium, annual rent of Re. 1, and other incidental charges and to construct a house on the plot. The Society advanced loans to the members to enable them to construct their houses. The premium in respect of the land and the loan advanced, as aforesaid together with interest, was repayable in monthly instalments. Accordingly Plot No. 10, measuring about 676 sq. yds. was allotted to the appellant, and other plots were similarly allotted to other members for constructing their respective houses. Through the agency of the Society, the appellant constructed a house on his plot. The construction was completed and the appellant occupied the building on or about May 1, 1951. The sum of Rs. 25,922 odd was advanced by way of loan, to the appellant. An agreement, dated March 26, 1952, was entered into between the appellant and the Society in respect of the loan aforesaid, and the document was duly registered on May 27, 1952. The agreement between the appellant and the Society provided that the amount of loan aforesaid advanced to the appellant should be repaid in 366 or smaller monthly instalments, and after the entire amount of the loan had been repaid, the Society would execute a sub-lease in respect of Plot No. 10 in favour of the appellant. It was further stipulated that in the event of default in the payment of an instalment, fixed in the agreement, the Society had the right to determine the Agreement, and thereupon any amounts already paid would be forfeited to the Society, and the member was to surrender the property and give vacant possession of the premises to the Society. It appears that no instalment was paid by the appellant with the result that on August 26, l954, the Society gave notice to him, calling upon him to give vacant possession of the premises, but the appellant did not comply with the notice. In view of the persistent refusal of the appellant to comply with the terms of the agreement, the Society referred the dispute with the appellant, under S. 54 of the Bombay Cooperative Societies Act (Bombay Act VII of 1925) which hereinafter will be referred to as the Act, to the Registrar for decision by himself or his nominee. The said dispute was heard and decided by a Committee of Arbitrators, appointed by the Registrar, Cooperative Societies, consisting of three gentlemen, (1) a nominee of the Society as Plaintiff, (2) a nominee of the Appellant, as defendant, and (3) a nominee of the Registrar, who was to be the Chairman. The said Committee of Arbitration, by majority, gave an award in favour of the Society to the effect that the appellant do deliver vacant possession of Plot No. 10, along with the house, to the Society and pay Rs. 150 per month as compensation for unauthorised use and occupation of the premises from October 1, 1954, to the date of the delivery of vacant possession. The appellant was also made liable for payment of costs of the arbitration proceedings. Thereupon the appellant made a revisional application to the Bombay Co-operative Tribunal, contending that the dispute between the Society and himself was essentially a dispute between landlord and tenant regarding the possession" of the premises and the recovery of rent and that the only Court that had jurisdiction to decide such a controversy was the Small Cause Court in Greater Bombay, in view of S. 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act (Bombay Act LVII of 1947). After hearing the parties, the Tribunal negatived the contention raised on behalf of the appellant and dismissed the revisional application. After the Award was certified under S. 59 of the Act, the Award was filed in the Bombay City Civil Court for execution. Thereupon the appellant took out a Chamber Summons against the Society for stay of the execution proceedings. The learned Judge who heard the Chamber Summons held that the Award made by the Arbitrators was without jurisdiction, in view of the provisions of S. 28 of the Rent Control Act. Accordingly, the summons was made absolute on October 16, 1956. From that order the Society came up in appeal to the High Court. The High Court, on a consideration of the terms of the agreement aforesaid, of March 26, 1952, and after elaborate arguments raised by the parties as to the legal effect of that document came to the conclusion that it was only an agreement to lease, binding the Society to grant a sub-lease only after the appellant had fully paid all the instalments due and fulfilled other conditions of the agreement, as stipulated between the parties. In that view of the matter, the High Court held that there was no relationship of landlord and tenant between the parties. In the result, the learned Judges set aside the order under appeal before them and directed that the execution of the award be proceeded with in accordance with law, with costs to the Society in both the Courts. It is from this judgment and Order that this appeal has been brought to this Court, on a certificate being granted by the High Court. The main question in controversy in this case is whether the Award made under the Act, which became a decree of the Civil Court, under the certificate of the Registrar, under S. 59, was without jurisdiction, and, therefore' incapable of execution. The answer to this question depends upon the answer to the other question whether the appellant was a 'tenant' under the Society by virtue of the agreement aforesaid of March 26, 1952. If it is held that the agreement aforesaid did not create the relationship of landlord and tenant, but that the appellant continued to be the debtor of the Society until all the outstanding amount advanced to him in respect of the plot and the structure had been liquidated, the Rent Control Act, and S. 28 thereof, will be out of the way of the parties. In that case, the proceedings before the Registrar, the award of the Arbitrators and the execution proceedings taken out by the Society would all be adjudged to be valid and binding upon the parties.
(3.) It is noteworthy that though the determination of the appeal depends upon the terms of the agreement of March 26 1952, it has not been included in the printed paper-book. We have, therefore, to depend upon the extensive quotations of the terms of the document as contained in the judgment under appeal. It is common ground that all the relevant terms of the document beginning from the preamble to almost the end of it, have been quoted in different parts in the judgment of the High Court, and that these are sufficient to give us a complete idea of the terms of the agreement. The agreement has been described by the Society in the plaint filed before the Arbitrators as 'a lease' and the appellant has been described as a 'tenant', and if the case were to be decided on the so-called admission in the plaint, the conclusion could easily be arrived at that the relationship between the parties was that of landlord and tenant. But as pointed out by the High Court, if we refer to the terms of the agreement itself, it will be abundantly clear that on a proper construction of those terms there was no executed lease between the parties, but that it was only an executory contract entitling the appellant to a sublease by the Society, which was, itself a lessee, upon payment of all the dues of the Society in respect of premium, principal and interest, advanced towards the cost of construction of the premises and fulfilment of all other conditions contained in the agreement. It consists of 14 clauses, as the judgment of the High Court says. It further appears from the said judgment that the agreement starts by saying that it has been entered into between the Society of the one part, and the appellant, hereinafter called the 'tenant', of the other part. In Part 11 of the preamble it is stated that the 'tenant' has applied to the Society for Plot No. 10 and for permission to erect a dwelling house thereon and for a loan from the Society. The preamble also mentions the fact that the Society itself had taken a lease of the entire open piece of land, of which Plot No. 10 was a part, for a term of 999 years from March 17, 1950, at the annual relief of Rs. 6,264. Part III of the preamble proceeds to say that the Society has already spent money on development of the land and laying out roads, etc., and that it had been agreed between the Society and the 'tenant' that the latter will pay a sum of Rs. 10,020 in instalments for transfer of Plot No. 10, and that the Society shall grant a loan to the 'tenant', not exceeding Rs. 16,980 for erecting the structure on that plot, to be advanced in instalments and repayable in instalments, as hereinafter provided. Part V of the preamble is important in so far as it has stated, in clear terms that whenever the 'tenant' shall have repaid to the Society all the outstanding dues, either in equated monthly instalments or in one lump sum, at the option of the 'tenant', the Society, with the consent of the Government as mortgagee, shall grant to the 'tenant' a sub-lease of the said Plot No. 10 free from all encumbrances for a term of 998 years commencing from March 17, 1950. Then follow the clauses of the agreement. The first clause grants permission to the 'tenant' to enter upon the said plot for erecting a dwelling house in accordance with the plan, elevation and estimates, previously approved in writing by the Society. Then Cl. 3 follows, which is substantially in the same terms as Part V of the preamble. It makes it absolutely clear that only upon payment of all the outstanding dues of the Society, in respect of premium for the plot and advance made for building the residential house, along with interest accrued thereon, the Society shall grant and the 'tenant' shall accept a sub-lease of the said Plot No. 10. It may be mentioned here that the mortgage in favour of the Government has reference to the advance by the Government of a large sum of money to the Society with a view to financing its building activities. For securing the payment of that lump sum, the entire area of land was mortgaged to the Government. Hence, it was necessary to obtain the previous consent of the Government as mortgagee to the execution of the sub-lease, contemplated by Part V of the preamble and C1. 3 of the agreement. And then follow details of how the instalments have to be paid. Clause 8 of the agreement provides that the proposed sub-lease shall be in the form now approved and signed by and on behalf of the parties, and when the said principal money and interest have been fully paid, the necessary document shall be executed by the Society. Further, Cl. 9 of the agreement provides that as from the date of the agreement, the 'tenant' shall punctually and regularly pay to the Society, without any deductions firstly, a rent of one rupee per annum, if demanded, secondly, a proportionate amount of rent payable to the superior landlord in respect of Plot No. 10, thirdly, a proportionate amount of assessment rates and taxes paid by the Society in respect of Plot No. 10, fourthly, a sum equal to the amount spent by the Society for insuring the building with reference to Plot No. 10, and lastly, such further sum as may from time to time be certified by the Society as the contribution by the occupier of Plot No. 10 toward the general expenses of management, maintenance and development costs, including expenses incurred on roads, sewers, drains and other amenities. Clause 10 provides for the penalty in the event of a default made by the 'tenant' in respect of any sums payable as aforesaid. It says that in the event of a default by the 'tenant' the Society shall be entitled to serve notice in writing determining the agreement and thereupon all instalments and other moneys paid by the 'tenant' under the agreement shall be forfeited to the Society and shall become the absolute property of the Society. And what follows is most important. It says that upon the determination of the agreement the tenant' shall forthwith surrender and give to the Society vacant possession of the said premises. Clause 11 makes reference to the fact that premises were mortgaged to the Governor of Bombay to secure the loan advanced to the Society by the Government of Bombay, and so long as the mortgage remains subsisting, the Governor of Bombay shall be a necessary party to any such sub-lease, to be hereafter executed as aforesaid, and no such sub-lease shall be valid unless and until the same shall be executed by the Registrar of Co-operative Societies on behalf of the Governor of Bombay. And lastly, Cl. 12 says that the 'tenant' shall accept the title of the Society to grant the said sublease without any question or making any requisitions or objections with regard to the title.;