Calcutta High Court
Uttara Co-Operative Housing Society ... vs State Of West Bengal And Ors. on 22 January, 1991
Equivalent citations: (1991)1CALLT441(HC)
JUDGMENT Ajay Nath Roy, J.
1. This is an application challenging the Award of an Arbitrator appointed under Sections 86 and 87 of the West Bengal Co-operative Societies Act, 1973, which Award has been substantially upheld by the Tribunal also constituted under the said Act.
2. The said two Awards or Orders in effect rescind the order of expulsion passed against the respondent No. 5 by the Managing Committee of the Uttara Co-operative Housing Society Ltd.
3. By a show-cause notice, which is annexure A to the petition, the Co-operative asked for an explanation from the 5th respondent regarding' persistent default of money payments. Thereafter, after giving a due hearing to the 5th respondent, the expulsion order was passed and the same is dated 10th July, 1984, and is annexure B to the instant petition.
4. Both the learned Arbitrator and the Tribunal have reappraised the evidence and have come to the conclusion that expulsion should not have been ordered. They have entered into facts and they have entered into the justification of the exclusion order.
5. The only contention urged before me by the Co-operative Society is that in reappraising the evidence and in assessing the order that should be passed on the evidence, both the Arbitrator and the Tribunal exceeded their jurisdiction.
6. The case of the petitioner is that neither the learned Arbitrator nor the Tribunal under the Act are to act as Courts of Appeal in all instances but that they are to exercise only a very limited supervision over the decision that might be taken by the Managing Committee.
7. Though Section 86 of the West Bengal Co-operative Societies Act, 1973, is no longer there because the new 1983 Act has come into force and though 1974 rules framed under the earlier Act have given way to new rules, yet for our purpose the old Act and old Rules will have to be considered because it is on this Act everybody acted at the material time.
8. Under the said Section 86 of the 1973 Act it would appear on a first reading as if all disputes of whatever nature between the Co-operative and the expelled member would be within the jurisdiction of the learned Registrar. However, for the reasons further detailed below, I am of the opinion that the plain reading of Section 86 would not be a correct reading. After all, a Co-operative formed for the purpose of building a big house and allotment of flats to different members of the Co-operative is essentially formed for a private purpose. Because of the wide use of the co-operative system, legislation has been found to be necessary and, therefore, this makes an inroad into the right to govern one's own private affairs and that inroad has been made for the purpose of avoiding social abuses. Under these circumstances an ordinary co-operative composed of private citizens would without the Act, have had a power fully to regulate, by their own contract and bye-laws, the power to expel, for1 reasons and conditions that might be agreed upon by them. Without an Act the State or officers appointed... by the State could not have intervened. But the State has thought it fit to appoint officers for intervention and settlement of disputes in these essentially private matters. The scope of interference in these private matters is, however, not, in a situation like the present, in any manner enlarged by these Acts but what would otherwise be decided in an ordinary court of law has now been given over for decision to the Arbitrator or the Tribunal.
9. This is made clear by the definition of dispute contained in Section 2(q) of the 1973 Act. The definition makes it clear that the dispute means any matter capable of being the subject of civil litigation, and includes a claim in respect of any sum payable to or by a co-operative society. Had a decision to expel a person from a private co-operative or private club been taken, then, without these Acts, a civil court could have taken cognizance of the disputes and passed order regarding expulsion, which may be for non payment of money. But in what circumstances a civil court would take such cognizance, that is well settled by the authority. In the case of T.P. Daver v. Lodge Victoria, , it was said to this effect in paragraph 7 that in such a situation, as I am considering, all these matters are essentially matters for the domestic tribunal to decide as it thinks right. But the proviso is, that the tribunal does not exceed its jurisdiction and it must act honestly and in good faith. If that is done, then the court cannot intervene even if it thinks, that the penalty is severe or that a very strict standard has been applied.
10. In the case of Ujjal Tdukdar v. Netai Ckand Koley, , Justice Bijayesh Mukherji laid down three conditions in paragraph 19 of the judgment regarding control of a domestic tribunal by a court of law and his Lordship said that the court should supervise the tribunal so that it does not overstep its jurisdiction, so that it does not violate the principles of natural justice and that it does not act dishonestly or in a biased way or in bad faith or in any other perverse manner.
11. Mr. Malay Kumar Basu has also urged that the Industrial Disputes Act, prior to 1971, and hicked all along, contained Section 10 regarding reference of disputes and this Section 10 read plainly would, like Section 86 of the 1973 Act under consideration, appear to the reader to be a comprenensive section which seems to authorise the labour court to go into the evidence and reappraise it for any purpose that it might think necessary for reviewing the decision of the domestic forum.
12. However, the law was not that. Because of the serious limitations like the ones that tied the hands of a civil court in club or matters relating to domestic forum, the labour courts also prior to 1971 could not exercise full sway over the decision of a domestic forum. They could not reappraise evidence and this was thought by the legislature to be a serious handicap and thus Section 11 (A) was introduced in 1971 expressly permitting reappraisal of evidence by the labour court.
13. Mr. Basu has argued that there is no such section as 11 (A) in the Co-operative Act and, therefore, it should not be held that the. Arbitrator or the tribunal would have any extra powers of intervention into or supervision over the domestic co-operative matters apart from what could be wilded by an ordinary court of law.
14. Mr. Basu has thirdly submitted that the decision of expulsion under the bye-laws, especially under bye-law 11 of this Co-operative Society, is subject to review at the next general meeting and that is contained in bye-law 11 itself.
15. Such a review confirming the decision of expulsion could not take place because, I am told, there are several proceedings and orders of this Court have prevented such a matter being brought before the General Body and being considered by them freely.
16. The Co-operative it seems, has allotted the disputed flat being flat No. 14D which was originally booked by the respondent No. 5 to one Mr. Ashoke Kumar Bhattacharya. The said new allottee has made an application for being added as a party in this main application but the application for addition is not before me. However, learned Advocate appearing for Bhattacharya has been permitted to address me and he has said that the Award which has been challenged in the instant application could not by any stretch have gone so far as to invalidate the allotment of the flat made to him. He has said that Ashoke Kumar Bhattacharya was not a party before the Arbitrator or the Tribunal and as such any order passed against him is without jurisdiction. He has also said that Ashoke Kumar Bhattacharya has paid the entire sum of money in respect of Flat No. 14D and thus, he says, he has become a full owner of the flat in question under Section 87 of the new 1983 Act.
17. I am not here concerned with the question whether the allotment of the flat to a third party prior to review and confirmation at the next general meeting by the Co-operative Society was right or wrong. I am also not concerned with the full ownership acquired as alleged by Ashoke Kumar Bhattacharya. But I have no doubt in my mind that Ashoke Kumar Bhattacharya not being a party to the Award, the Award overstepped the permitted limits of jurisdiction in making adverse orders against Ashoke Kumar Bhattacharya without impleading him, without obtaining him as a party to the reference and without hearing his case. The Award, therefore, as well as the order of the tribunal to that extent must necessarily be held to be bad and set aside. Thus far and no further regarding Ashoke Kumar Bhattacharya need be said by me.
18. In so far as the other parts of the Award are concerned, it has been argued on behalf of the respondent No. 5 that the power to expel can be exercised only if the respondent No. 5 could be found to be a persistent defaulter within the meaning of 11 (a) of the bye-laws of the co-operative. Learned Advocate has referred me to Rule 205 of the Co-operative Rules and has submitted that the finding of a member as a persistent defaulter is a jurisdictional fact without which the expulsion could not be made by the managing committee at all. This is because under Rule 205 the power to expel can be exercised only when there has been violation to comply with the provision of the bye-laws, in so far as facts similar to the facts here are concerned, which allege only violation of the bye-laws as a ground for expulsion. It has been submitted on this basis that because it is a jurisdictional fact, the learned Arbitrator and the Tribunal could enter into the whole matter and reappraise the evidence and they have done nothing wrong in this.
19. It is always a case of fine distinction as to whether there has been an error (or decision), within the jurisdiction or there has been an error (or decision) on matters which has caused the decision to go beyond the jurisdiction of the deciding authority altogether. Where the fact to be decided is a. fact primarily relating to the dispute itself between the parties, it is more likely not to be a jurisdictional fact. Where however the fact relates rather to the situation, status or relationship of the parties or the type, extent or circumstances of the overall situation, these might more be likely to relate to jurisdictional facts. The case of persistent default relates to the core of factual dispute between the parties and cannot relate to the jurisdiction itself of the managing committee. In the instant matter, therefore, in view of the definition under Section 2(q), the decided authorities mentioned by me above, the parallel situation with the Industrial Disputes Act and the rationale that the State is no more to interfere in private matter that it has legislated that it shall, I am of the view that reappraisal of evidence as to persistent default and reappraisal of the 'evidence' (so to speak) of dismissal both by the learned Arbitrator and the tribunal were outside their jurisdiction. A question of expulsion for persistent default in matter of money payment is a serious question which interferes with the progress of the work itself and as such, it is, so to speak, the most important private matter over which the managing committee should have control. I must clarify that had the dispute been raised or referred prior to expulsion proceedings, and at a time when the claims for money had just been made, the matter might have been within the jurisdiction of the Arbitrator or the Tribunal; indeed, even in regard to a private club, one can easily visualize a situation where there is a litigation between the member and the club regarding a money demand. But the matter of expulsion stands on a separate footing altogether, when the demands have already been made and not met with, and when the committee has acted on such defaults. Had this been a decision of the managing committee of expelling a member, taken before the passing of the Co-operative Acts, and had this decision been challenged in a court of law, I have no doubt in my mind that it would be impossible to hold either that the managing committee had exceeded its jurisdiction or it acted in bad faith or that it had not adverted to the rules of natural justice. If I am to hold that the question of being a persistent defaulter, which is the first contingency of expulsion in bye-law 11, is a matter of jurisdictional fact, then virtually all money payments called for by the managing committee would have to be obtained only upon an Award from the Registrar and a confirmation from the tribunal. It can well be envisaged that such a situation might completely stop work for lack of finance, and defaulting members who might be minded to indulge in litigation would be thus unjustly encouraged.
20. It must also be borne in mind that the managing committee is not complained against as having violated any provision of the Act or any provision of the rules framed thereunder directly. The violation primarily is complained of as against the Co-operative bye-law 11 (a) and it has been said that the managing committee should not have held the 5th respondent to be a persistent defaulter. However, it has not been disputed that there are defaults of the 5th respondent in payment of money. Various points, it has been said, were urged before the Arbitrator and the Tribunal regarding the explanation of these defaults and it is on behalf of the fifth respondent that the defaults occurred because of not processing of loan by the Co-operative itself. Exercising the superintendence jurisdiction, I am unable to enter into these facts and I make it clear that I am setting aside the Award and the confirmation by the tribunal only on the limited question of excess of jurisdiction.
21. The bye-law 11 (a) is also, so to speak a contract, amongst the members of the co-operative and interpretation of this contractual clause and the taking of a decision by a body invested with the power by this contract would, in my opinion, not bring into play the question of any jurisdictional fact at all because such a jurisdictional fact which can cause a lack of jurisdiction should ordinarily arise out of the constituting charter, or out of some statute, rule or some such other law. A question of breach of contract is not the same as the question of an excess of jurisdiction.
22. Because of the reasons given above, I think that both the Award of the Arbitrator and the confirmation by the Tribunal must be quashed and set aside.
23. I accordingly quash the said two orders dated 20th March, 1987, and 25th November, 1986, passed respectively in appeal case No. 4/87 and in dispute case No. 10/CMAH of 1984-85.
24. The application is thus allowed with costs assessed at seventy-five gold mohurs.
Let a xerox copy of this order be given to the learned Advocate for the petitioner on observing all formalities.