Supreme Court of India
U.P. Co-Operative Cane Union ... vs Liladhar & Others on 27 August, 1980
Equivalent citations: 1981 AIR 152, 1981 SCR (1) 558, AIR 1981 SUPREME COURT 152, 1980 ALL. L. J. 1073, 1980 SCC (SUPP) 437, (1980) 3 SERVLR 440, 1981 (13) LAWYER 12, (1981) 1 SCR 558 (SC), 1981 LAWYER 13 12, 41 FAC L R 288, (1980) 41 FACLR 288, (1981) 1 LABLJ 156, (1981) 1 LAB LN 13, (1981) 1 SCJ 517, (1981) 1 SCWR 45, (1981) SERVLJ 40
Author: D.A. Desai
Bench: D.A. Desai, P.N. Shingal
PETITIONER:
U.P. CO-OPERATIVE CANE UNION FEDERATION LTD. & ANOTHER
Vs.
RESPONDENT:
LILADHAR & OTHERS
DATE OF JUDGMENT27/08/1980
BENCH:
DESAI, D.A.
BENCH:
DESAI, D.A.
SHINGAL, P.N.
CITATION:
1981 AIR 152 1981 SCR (1) 558
ACT:
Jurisdiction of the Civil-Court-Dispute arising out of
a disciplinary proceeding resulting in dismissal of an
employee of a Co-operative Cane Growers' Society and the
society, whether a dispute "touching the business of the
society" within the meaning of Rule 115 of the Co-operative
Societies Rules 1936-Co-operative Societies Act, 1912,
section 2(d), 43, Co-operative Societies Rules, 1936, Rules
115 and 134 and U.P. Sugarcane (Regulation of Supplies and
Purchases) Act, 1953, Sections 28 (2n), read with U. P.
Sugarcane (Regulation of Supplies and Purchases) Rules,
1954, Rules 54, 55 and 108, scope of.
HEADNOTE:
The respondent joined service in Cane Development
Department of the U.P. State Government in 1949 and later on
transferred to District Co-operative Sugarcane Development
Society Ltd., a federating unit of the U.P. Co-operative
Cane Union Federation Ltd. He was prosecuted and convicted
for alleged embezzlement of funds, but was acquitted by the
High Court in appeal. Later as a result of departmental
disciplinary proceedings, his services were terminated.
Respondent, therefore, filed a Civil Suit in 1964 which was
decreed on May 24, 1967 rejecting the appellant's plea of
bar of jurisdiction by the Civil Court under Rule 115 of the
Co-operative Societies Rules, 1936, made under section 43 of
the Co-operative Societies Act, 1912. The First Appellate
Court accepted the appeal and dismissed the suit holding
that the dispute was one "touching the business of the Co-
operative Society" and its employee and hence the Civil
Court is barred from entertaining the suit. However, in the
second appeal to it, the High Court reversed the First
Appellate Court's order holding that as the respondent is
governed by U.P. Sugarcane (Regulation of Supplies and
Purchases) Act, 1953, it being both a Co-operative Society
and a Cane Growers' Co-operative Society and in case of an
officer or servant of such Cane Growers' Co-operative
Society any dispute between its officers and servants and
such society would be governed by Rules 54 and 55 framed
under the 1953 Act which provide for a complete machinery
for resolution of disputes and Rule 108 does not encompass
dispute arising out of a disciplinary proceeding between
such society and its officers and servants and therefore, in
the absence of such provision for compulsory arbitration of
such dispute, the jurisdiction of the Civil Court is not
barred.
Dismissing the appeal by special leave, the Court
^
HELD: (1) On a conspectus of the High Court's decision
and the definition of the expression "officer" both
expansive definition and its etymological sense, first
respondent a Supervisor working as a Godown Keeper could not
be styled as an officer of the Co-operative Society, he not
being either Chairman. Secretary, Treasurer, or a member of
the Committee or such other person shown to have been
empowered under the rules or the bye-laws to give directions
in regard to the business of the society. And the
legislature never intended
559
to include every employee or servant of the society within
the expression "officer". Neither any rule made under
section 43(g) of the 1912 Act refers the respondent as an
officer. [567 D, 565 G, 566 F]
Co-operative Central Bank v. Trimaak Narayan
Shinganwadikar, AIR 1945 Nagpur 183; Manjeri S. Krishna
Ayyar v. Secretary, Urban Bank Ltd. & Anr. AIR 1933 Mad.
682; Kailash Nath Halwai v. Registrar, Co-operative Society,
U.P. & ors., AIR 1960 Allahabad 194 and Abu Baker & Anr. v.
District Handloom Weavers' Co-operative Society, Mau & Anr.,
AIR 1966 Allahabad 12, referred to.
(2) Rules 115 to 134 of the Co-operative Societies
Rules, 1936 make it clear that if the dispute is one
contemplated by Rule 115 and arises between the parties
therein envisaged it shall have to be resolved by referring
the same to the Registrar who will have to get it resolved
by arbitration either by himself or by arbitrator or
arbitrators appointed by him. Rule 134 provides that a
decision of an arbitrator or arbitrators under the rules, if
not appealed as therein provided, shall be final as between
the parties to the dispute and not liable to be called in
question in any civil or revenue court and shall in all
respects be final and conclusive. If, therefore, the 1912
Act confers power to enact rules and the rules so enacted
are statutory and if the rules provide for certain types of
disputes between certain specific parties to be resolved by
arbitration and the decision of the arbitrators is made
final and conclusive not correctible by the civil court or
unquestionable before the civil court, undoubtedly, the
jurisdiction of the civil court in respect of such specified
disputes between specified parties enumerated in Rule 114
would be wholly excluded. [567 F-568 A]
(3) In order to attract Rule 115 it must be shown (i)
that the dispute is the one touching the business of the co-
operative society; and (ii) that it is between the society
and any officer of the society. Both the conditions have to
be cumulatively fulfilled before Rule 115 is attracted which
would result in ouster of the jurisdiction of the civil
court in respect of dispute in view of the provision
contained in Rule 134. A dispute arising out of a
disciplinary proceeding resulting in dismissal of an
employee of the society cannot be said to be "a dispute
touching the business" of the society within the meaning of
the Rule 115. [568C, 569G]
Deccan Merchants Co-operative Bank Ltd v. M/s.
Dalichand Jugraj Jain & Ors.,[1969] 1 SCR 887; Co-operative
Central Bank Ltd & Ors. v. Additional Industrial Tribunal,
Andhra Pradesh & ors., [1970] 1 SCR 205 followed.
Kisanlal & ors. v. Co-operative Central Bank Ltd., AIR
1946 Nagpur 16 approved.
(4) Section 70 of the U.P. Co-operative Societies Act,
1965 also makes it clear that while making a statutory
provision for resolution of disputes involving co-operative
societies by arbitration by the Registrar, the legislature
in terms excluded a dispute relating to disciplinary action
taken by the society against paid servants of the society
from the purview of the compulsory arbitration. What was
implicit in the 1912 Act and the rules framed thereunder
that such a dispute did not "touch the business of the
society" and was not within the purview of the compulsory
arbitration was made explicit by section 70 of the 1965 Act
(which repeal and replace 1912 Act) by expressly excluding
it from the field of compulsory arbitration. [570C, E]
560
(5) The approach of the High Court in coming to the
conclusion that the civil court will have jurisdiction to
entertain the suit, however, is not correct and totally
overlooks and ignores the provisions in 1912 Act and the
rules enacted thereunder. U.P. Sugarcane (Regulation of
Supplies and Purchases) Act, 1953 and the Co-operative
Societies Act, 1912 operate in an entirely different field
and are enacted with different objects in view. 1953 Act
neither trenches upon 1912 Act nor supersedes or supplants
any provision of it. [572 C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 433 of 1977.
Appeal by Special Leave from the Judgment and order dated 13th August 1975 of the Allahabad High Court in Second Appeal No. 582/71.
A. P. S. Chauhan, Guj Raj Singh Chauhan and T. S. Arora for the Appellant.
Indra Makwana for Respondent No. 1.
The Judgment of the Court was delivered by DESAI, J.-How technical plea of want of jurisdiction has pushed a petty employee from pillar to post since April 1964 and pilloried him with cost presumably unbearable by him, is shockingly demonstrated in this case.
First respondent joined service as a petty employee in Cane Development Department of the U.P. State Government somewhere in 1949. On the formation of the U.P. Co-operative Cane Union Federation Ltd. (hereinafter referred to as 'the first appellant'), services of the first respondent stood transferred and were put at the disposal of the appellant and he was styled as Supervisor. At the relevant time he was rendering service under the second appellant, District Co- operative Sugarcane Development Society Ltd. (now designated as Zila Sahkari Ganna Vikas Samiti Ltd.,) Budayun, a federating unit of the first appellant and was incharge of manure godown. He was suspended from service with effect from October 18, 1958. A prosecution was launched against him for embezzlement of funds of the second appellant in that he failed to account for 293 1/2 bags of ammonium sulphate entrusted to him as keeper of manure godown. The case ultimately resulted in the acquittal of the first respondent by the High Court. Disciplinary proceedings were commenced against him on the same charge and ultimately he was dismissed from service on April 4, 1964. First respondent filed a suit being O.S. No. 30/64 in the Court of Civil Judge, Budayun, inter alia, for a declaration that the order dismissing him from service was invalid and void and for a further declaration that he continued to be in service and for arrears of pay till the date of the suit. In the written statement filed on behalf of defendants (present appellants) number of contentions were raised but 561 only one may be noticed for the present appeal. The contention was that the dispute involved in the suit was between an employee of a Co-operative Cane-Growers' Society and the Society and, therefore, civil court had no jurisdiction to entertain the suit but the plaintiff must approach the Registrar of Co-operative Societies for reference of dispute to arbitration. The trial Court decreed the suit as per judgment dated May 24, 1967, and granted the declaration prayed for. The appellants preferred an appeal being Civil Appeal No. 9 of 1967 to the Court of District Judge, Budayun, who allowed the appeal holding that the Civil Court had no jurisdiction to entertain the suit inasmuch as the dispute was between an officer of a Co- operative Society and the Society and the dispute was touching the business of the Society and, therefore, rule 115 of the Co-operative Societies Rules enacted by the U.P. Government in exercise of the rule making power conferred by section 43 of the Co-operative Societies Act, 1912 (hereinafter referred to as 'the 1912 Act') in its application to the U.P. State would be attracted and the dispute will have to be resolved by arbitration by the Registrar. In accordance with this finding the appeal was allowed and the suit was dismissed. First respondent preferred Second Appeal No. 582/71 to the High Court of Judicature at Allahabad. The learned single Judge allowed the appeal holding that as the first appellant is governed by U.P. Sugarcane (Regulation of Supply and Purchases) Act, 1953 ('1953 Act' for short), it being both a Co-operative Society and a Cane Growers' Co-operative Society and in case of an officer or servant of such cane growers' cooperative society any dispute between its officers and servants and such society would be governed by rules 54 and 55 framed under 1953 Act which provide a complete machinery for resolution of disputes and rule 108 does not encompass dispute arising out of a disciplinary proceeding between such society and its officers and servants and, therefore, in the absence of such provision for compulsory arbitration of such dispute the jurisdiction of the Civil Court is not barred. The learned judge accordingly allowed the appeal and remanded the suit to the first appellate court for decision on merits. Hence this appeal by special leave by original defendants.
The only contention that falls for consideration in this appeal is whether the civil court has jurisdiction to take cognizance of a suit arising out of a disciplinary proceeding held by a Cane Growers' Cooperative Society, governed both by 1912 Act and 1953 Act against its employee or such dispute falls exclusively within the jurisdiction of the Registrar under the Co-operative Societies Act to be resolved by arbitration alone. A brief survey of the relevant provisions is necessary for the effective disposal of this contention.
562When the suit was filed in the year 1964 the Co- operative Societies Act, 1912, as adopted and applied by U.P. State was in force in U.P. State. The expression 'officer' has been defined in s. 2(d) of the Act as under:
"2. Definitions-In this Act, unless there is anything repugnant in the subject or context,-
(d) 'officer' includes a chairman, secretary, treasurer, member of committee, or other person empowered under the rules or the bye-laws to give directions in regard to the business of the society".
Section 43 conferred power on the Local Government to make rules to carry out the purposes of the Act for the whole or any part of the province, on various topics enumerated in various sub-clauses of the section. Clause (1) of s. 43(2) is relevant. It reads as under:
"43. Rules-(1) The State Government may, for the whole or any part of the State and for any registered Society or class of such societies make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may- (1) provide that any dispute touching the business of a society between members or past members of the society or persons claiming through a member or past member or between a member or past member or persons so claiming and the committee or any officer shall be referred to the Registrar for decision, or if he so directs, to arbitration, and prescribe the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrator or arbitrators, and the enforcement of the decisions of the Registrar or the awards of arbitrators".
Armed with this power the U.P. State enacted what is styled as U.P. Co-operative Societies Rules, 1936, Rule 115 of the rules reads as under:
"115. Any dispute touching the business of a registered society (i) between members or past members of a society or persons claiming through a member or past member, (ii) or between a member or a past member or persons so claiming and the society or its committee or any officer of the society, (iii) between the society or its committee and any officer of the society, and (iv) between two or more registered societies, shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar.563
Explanation 1.-A dispute shall include claims for amounts due when a demand for payment is made and is either refused or not complied with whether such claims are admitted or not by the opposite party. Explanation 2.-An officer shall include a person appointed for the supervision of the society. Explanation 3.-The business of a society includes all matters relating to the objects of the society mentioned in the bye-laws as also those relating to the election of office-bearers of a society".
This rule 115 has to be interpreted in the light of rule 134 which reads as under:
"134. A decision of an arbitrator or arbitrators under these rules if not appealed against within the said period and an order of the Registrar shall, as between the parties to the dispute, not be liable to be called in question in any civil or revenue court and shall in all respects be final and conclusive".
There is another Act which has a bearing on the topic under discussion styled as U.P. Sugarcane (Regulation of Supply and Purchases) Act. 1953. It is an Act enacted to regulate the supply and Purchase of Sugarcane required for use in sugar factories and gur, rab or khandsari sugar manufacturing units and matters incidental or ancillary thereto. It contemplates setting up of a sugarcane Board and provides for its functions and duties and the methods of filling up vacancies and regulating its finances. Section 20 confers power on the Governor to impose by a notification a cess not exceeding the amount prescribed in the section on the entry of sugarcane into an area specified in such notification for consumption, use or sale there. Section 28 confers power on the State Government to make rules for the purpose of carrying into effect the provisions of the Act. Clause 2(n) in this behalf is relevant. It reads as under:
"28. Power to make rule-(1) The State Government may make rules for the purpose of carrying into effect the provisions of this Act.
(2) Without prejudice to the generality of foregoing power, such rules may provide for-
xxx xxx xxx
(n) the constitution, operation, management, supervision and audit of Canegrowers' Co-operative Societies and Councils and the U.P. Cane Unions Federations and conditions relating to recognition of such societies or their federation for purposes of this Act and Rules and control of their staff and finances".564
Armed with this power the U.P. Government enacted the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954. The relevant rules relied upon are rules 54, 55 and
108. They may be reproduced in extenso:
"54. The power to appoint, grant leave of absence to, punish, dismiss, transfer and control Secretaries, Assistant Secretaries and Accountants of Cane-growers Co-operative Societies, whether permanent or temporary, shall be exercised by the Federation subject to the general control of the Cane Commissioner who may rescind or modify and order of the Federation:
Provided that the Cane Commissioner may himself exercise any of such powers in case of emergency".
"55. Similar powers as stated in Rule 54 may be exercised by the society in respect of the other staff, subject to the regulations made by the Federation and the general control of the Cane Commissioner".
"108. Any dispute touching the business of (a) a Cane-growers' Co-operative Society between members, or between members and society, or between two registered societies, or between a society and a factory, or between a cane-grower and a factory, (b) a council and a Cane-growers' Co-operative Society, or between a council and a factory or between a council and a cane grower, regarding the payment of contribution to a council by a society or a factory and any other dispute relating to the business of a council, shall be referred to the Cane Commissioner for decision. The Cane Commissioner shall decide it himself or refer it to arbitration. No suit shall lie in a Civil or Revenue court in respect of any such dispute".
Having had the survey of the relevant provisions of the Acts and the Rules attention may now be focused on the main and the only controversy in this appeal whether in 1964 when the first respondent as plaintiff filed the suit for a declaration that the order dismissing him from service passed by the first appellant is void and for a declaration that he continues to be in service of the first appellant, in the Civil Court at Budayun, that Court had jurisdiction to entertain the suit or not. First appellant is a federation of Cane-Growers' Co-operative Societies and second appellant is a federating unit or first appellant. At the relevant time first and second appellants were governed by the 1912 Act as well as by the 1953 Act. Each as a Co- operative Society would be governed by the 1912 Act and each as a Cane-growers' Co-operative Society and its federation, for the purpose 565 of regulation of supply and purchase of sugarcane, would be governed by the 1953 Act.
The question is whether the Civil Court would have jurisdiction to entertain a suit in 1964 filed by an employee of a co-operative society against the Co-operative Society for a declaration that the order dismissing him from service is void and for a declaration that he continued to be in service with an alternative prayer for damages ? This contention may be examined first, inter alia, under the provisions of 1912 Act and the rules framed thereunder and subsequently whether the application of the 1953 Act will have any impact on the conclusion.
We have extracted above the definition of the expression 'officer' in 1912 Act. Undoubtedly, it is an inclusive definition. If only the officers enumerated in the definition are comprehended within the expression 'officer', the first respondent is not an officer in the sense that he was neither a Chairman, Secretary, Treasurer, or a member of the Committee. But the expression 'officer' also embraces such other person empowered under the rules or the bye-laws to give directions in regard to the business of the society. If ejusdem generis canon of construction were to be invoked in construing the expression 'officer' the expression 'other persons' must take colour from the words preceding it and accordingly other persons therein envisaged must have some semblance of comparison in respect of power and authority to give directions with regard to the business of the society with the enumerated persons such as chairman, secretary, treasurer or member of the committee. If every employee of the society were to be an officer it would not be necessary for the legislature to provide that persons other than chairman, secretary, treasurer or member of the committee must be such who must have under the rules or the bye-laws the power to give directions in regard to the business of the society. First respondent was at the relevant time a supervisor in charge of manure godown drawing a salary of Rs. 150 p.m. Nothing has been pointed out to us by the appellants with reference either to the rules or bye-laws that first respondent as supervisor was empowered by any rules or the byelaws to give directions in regard to the business of the society. First respondent thus not being either chairman, secretary, treasurer or member of the committee, or such other person shown to have been empowered under the rules or the bye-laws to give directions in regard to the business of the society, unquestionably he was not an officer of the society. We are conscious of the fact that the definition of the expression 'officer' is an inclusive definition. An inclusive definition widens the etymological meaning of the expression or term including therein that which would ordinarily not be comprehended therein. Firstly, keeping apart the expansive definition by including 566 officers who would otherwise not be comprehended in the expression 'officer', it may be necessary to ascertain whether first respondent, giving the expression 'officer' its ordinary etymological meaning, would be comprehended therein. It may be noticed that the legislature never intended to include every employee or servant of the society within the expression 'officer'. There is some element of a right to command in the word 'officer' with someone whose duty it would be to obey. If there is an officer ordinarily there will be someone subordinate to him, the officer enjoying the power to command and give directions and subordinate to obey or carry out directions. It may be that even one who is to carry out directions may be an officer in relation to his subordinates. Thus, what is implicit in the expression 'officer' is made explicit by the latter part of definition which provides that such other person would also be an officer who is empowered under the rules and bye-laws to give directions with regard to the business of the society. If it is contended that a particular person is an officer because he is empowered to give directions with regard to the business of the society, it would be a question of fact in each case whether a particular person is an officer or a servant or an employee. Unless the appellants are in a position to point out that first respondent was an officer in the sense that he had power to command and insist on subordinates to obey his directions with regard to business of the society, it would be difficult to believe that a person designated as supervisor drawing a salary of Rs. 150 and incharge of manure godown would be an officer. In this connection it would be advantageous to refer to s. 43(g) of the 1912 Act which confers power on the Local Government to make rules providing for the appointment, suspension and removal of the members of the committee and other officer, and for the procedure at meetings of the committee, and for the powers to be exercised and the duties to be performed by the Committee and other officers. No rule enacted in exercise of this power was pointed out to us to assert that first respondent would be such officer as contemplated in s. 43(g).
Some illustrative cases were relied upon to point out that a godown keeper would not be an officer within the meaning of s. 2(d). In Co-operative Central Bank v. Trimbak Narayan Shinganwadikar, an accountant serving in a co- operative bank was held not to be an officer of the Bank inasmuch as he had no power to give any direction in regard to the business of the society nor was any rule framed empowering an accountant to give directions. He was held to be a servant of the society falling outside the definition of the expression 'officer'. In Manjeri S. Krishna Ayyar v. Secretary, Urban Bank Ltd. & Anr.(2) 567 legal adviser of a co-operative society was held to be an officer of the society within the meaning of s. 2(d). In Kailash Nath Halwai v. Registrar, Co-operative Society, U.P. & Ors.(1), a Division Bench of the Allahabad High Court speaking through Raghubar Dayal, J. (as he then was), held that a manager of a shop run by a Co-operative Society was an officer of the society on the finding that he was in a position to give directions in regard to the business of the shop, a business which was included in the business of the society. The vital contention in this matter was whether rule 115 of the U.P. Co-operative Societies Rules, 1936, was ultra vires, and it was so held. However, this decision was specifically overruled by a Full Bench of the Allahabad High Court in Abu Bakar & Anr. v. District Handloom Weavers' Co- operative Society, Mau & Anr.(2), in which it was specifically held that rule 115 of the Rules framed under the Co-operative Societies Act, 1912, is not ultra vires.
On a conspectus of these decisions and the definition of the expression 'officer' both expansive definition and its etymological sense, first respondent a supervisor working as a godown keeper could not be styled as an 'officer' of the Co-operative Society.
The next limb of the argument is whether rule 115 enacted in exercise of power conferred by clause (1) of sub- s. (2) of s. 43 of the 1912 Act would be attracted. Clause (1) of s. 43(2) confers power to make rules providing for resolution of disputes envisaged by the clause between the parties contemplated by the clause by the Registrar by arbitration. In exercise of this power rules 115 and 134 have been enacted. When rules 115 and 134 are read in juxtaposition it becomes clear that if the dispute is one contemplated by rule 115 and arises between the parties therein envisaged it shall have to be resolved by referring the same to the Registrar who will have to get it resolved by arbitration either by himself or by arbitrator or arbitrators appointed by him. Rule 134 provides that a decision of an arbitrator or arbitrators under the rules, if not appealed as therein provided, shall be final as between the parties in dispute and not liable to be called in question in any civil or revenue court and shall in all respects be final and conclusive. If, therefore, the 1912 Act confers power to enact rules and the rules so enacted are statutory and if the rules provide for certain types of disputes between certain specific parties to be resolved by arbitration and the decision of the arbitrators is made final and conclusive not correctible by the civil court or unquestionable before the civil court, undoubtedly, the jurisdiction of the civil court 568 in respect of such specified disputes between specified parties enumerated in rule 115 would be wholly excluded.
The question boils down to this: is a dispute between an employee other than an officer of a co-operative society and the society arising out of a disciplinary proceeding one which would fall within the ambit of rule 115 ? Clause (iii) of rule 115 was relied upon by the appellant to urge that such a dispute would be one touching the business of a registered society and it would be one between the society and its committee and any officer of the society. This contention would stand disposed of in view of our finding that the first respondent is not an officer of the society. In order to attract rule 115 it must be shown (i) that the dispute is the one touching the business of the co-operative society; and (ii) that it is between the society and any officer of the society. Both the conditions have to be cumulatively fulfilled before rule 115 is attracted which would result in ouster of the jurisdiction of the civil court in respect of dispute in view of the provision contained in rule 134.
The first question is, whether a dispute arising out of a disciplinary proceeding resulting in dismissal of an employee of a co-operative society is one touching the business of the society. It is unnecessary to dilate upon this aspect in view of the two decisions of this Court.
In Deccan Merchants Co-operative Bank Ltd. v. M/s. Dalichand Jugraj Jain & Ors., (1) s. 91 of the Maharashtra Co-operative Societies Act, 1968, came up for consideration before this Court. After analysing the section and observing that five kinds of disputes are enumerated in sub-s. (1) of s. 91, the fifth being disputes touching the business of a society, the Court held as under:
"It is clear that the word 'business' in this context does not mean affairs of a society because election of office-bearers, conduct of general meetings and management of a society would be treated as affairs of a society. In this sub-section the word 'business' has been used in a narrower sense and it means the actual trading or commercial or other similar business activity of the society which the society is authorised to enter into under the Act and the Rules and its bye- laws".
Proceeding from this angle the Court held that the dispute between a tenant of a member of the bank in a building which has subsequently been acquired by the Bank cannot be said to be a dispute touching the business of the Bank. In reaching this conclusion, this 569 Court disapproved the view in Kisanlal & Ors. v. Co- operative Central Bank Ltd.(1), which has relied upon before us. Confirming the view in the Deccan Merchants Co-operative Bank(2), this Court in Co-operative Central Bank Ltd. & Ors. v. Additional Industrial Tribunal, Andhra Pradesh & Ors.,(3) posed a question to itself whether the dispute between the co-operative society and the employee touches the business of the society in the sense explained by this Court in that case. The Court answered the contention as under:
"Applying these tests, we have no doubt at all that the dispute covered by the first issue referred to the Industrial Tribunal in the present cases could not possibly be referred for decision to the Registrar under s. 61 of the Act. The dispute related to alteration of a number of conditions of service of the workmen which relief could only be granted by an Industrial Tribunal dealing with an industrial dispute. The Registrar, it is clear from the provisions of the Act, could not possibly have granted the reliefs claimed under this issue because of the limitations placed on his powers in the Act itself. It is true that s. 61 by itself does not contain any clear indication that the Registrar cannot entertain a dispute relating to alteration of conditions of service of the employees of a registered society; but the meaning given to the expression 'touching the business of the society', in our opinion, makes it very doubtful whether a dispute in respect of alteration of conditions of service can be held to be covered by this expression. Since the word 'business' is equated with the actual trading or commercial or other similar business activity of the society, and since it has been held that it would be difficult to subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects, such as laying down the conditions of service of its employees, can be said to be a part of its business, it would appear that a dispute relating to conditions of service of the workmen employed by the society cannot be held to be a dispute touching the business of the society".
Therefore, on the strength of the aforementioned two decisions it has to be held that a dispute arising out of a disciplinary proceeding resulting in dismissal of an employee of the society cannot be said to be a dispute touching the business of the society.
To some extent this conclusion can be reinforced by reference to the U.P. Co-operative Societies Act, 1965, which repealed and replaced 570 the Co-operative Societies Act, 1912, in its application to the State of U.P. Section 70 of the 1965 Act provides for settlement of disputes. The relevant portion reads as under:
"70. Disputes which may be referred to arbitration-(1) Notwithstanding anything contained in any law for the time being in force, if any dispute relating to the constitution, management or the business of a co-operative society other than a dispute regarding disciplinary action taken against a paid servant of a society arises-....... ".
It will be crystal clear that while making a statutory provision for resolution of disputes involving co-operative societies by arbitration by the Registrar, the legislature in terms excluded a dispute relating to disciplinary action taken by the society against paid servants of the society from the purview of the compulsory arbitration. It is legislative exposition of the topic under discussion. It must, however, be made distinctly clear that at the relevant time 1912 Act was in force and the contention has to be answered with reference to 1912 Act and the rules framed thereunder. It is, however, difficult to believe that the 1965 Act which repealed and replaced the 1912 Act excluded from the field of operation that which was already included under the repealed Act. On the contrary it would appear that what was implicit in the 1912 Act and the rules framed thereunder that such a dispute did not touch as the business of the society and was not within the purview of the compulsory arbitration, was made explicit by expressly excluding it from the field of compulsory arbitration.
However, we would rest this judgment on the second limb of the submission in that not only the dispute must be one touching the business of the society but it must be between the co-operative society and its officer. Firstly respondent being shown not to be one of enumerated officers of the society nor a person empowered to give directions in regard to the business of the society under the rules or the bye- laws, he would not be an officer within the meaning of the expression in 1912 Act. Any dispute between an employee not being an officer and the society would not attract rule 115. In that view of the matter such a dispute would fall outside the purview of rule 115 and it being a civil dispute and civil court will have jurisdiction to entertain and adjudicate upon the same.
The High Court approached the matter from an entirely different angle. The learned judge held that this case would be governed by the 1953 Act and rules 54 and 55 enacted in exercise of the powers conferred by s. 28 of the 1953 Act have provided a specific forum, viz., a reference to the Cane Commissioner and appeal to the State 571 Government and as rule 108 is not attracted the dispute is not required to be referred to arbitration and, therefore, the civil court will have jurisdiction to entertain the suit. With respect, it is difficult to subscribe to this view of the High Court. 1953 Act has been enacted to regulate supply and purchase of sugarcane required for use in sugar factories, gur, rab and khandsari manufacturing units. It envisages setting up of a sugarcane board and the board was entrusted with the function pertaining to the regulation, supply and purchase of cane for sugar factories and for the maintenance of healthy relation between occupiers, managers, of factories, cane growers, co- operative societies, etc. The Act also envisaged setting up of a development council and its functions have been enumerated in s. 6. On a survey of these provisions it appears that the Act was enacted to regulate relations between the cane-growers on one hand and sugar factories on the other. The expression 'cane growers' co-operative society' has been defined in s. 2(f) to mean a society registered under the Co-operative Societies Act, 1912, one of the objects of which is to sell cane grown by its members and includes the federation of such societies registered under s. 8 of the said Act. The appellant is thus a co- operative society and it being a federation of such co- operative societies it is also included in the expression "cane growers' co-operative society". Section 28(2)(n) of the Act was relied upon to show that the State Government has power to frame rules amongst others, for the control of the staff and finances. In exercise of this power rules 54 and 55 have been enacted. Rule 54 provides that the power to appoint, grant leave of absence, to punish, dismiss, transfer and control secretaries, assistant secretaries and accountants of Cane Growers' Co-operative Societies whether permanent or temporary shall be exercised by the federation, subject to the general control of the Cane Commissioner who may rescind or modify any order of the Federation. There is a proviso which is not relevant for the present purpose. Rule 55 confers powers similar to those enumerated in rule 54 to be exercised by the society in respect of other staff subject to the regulations made by the federation and the general control of the Cane Commissioner. Shorn of embellishment, rule 55 confers power on the Federation, namely, the first appellant, to make regulations for appointment, granting leave of absence, punishment, dismissal and transfer of the staff other than those enumerated in rule 54 and these regulations have to be made subject to the general control of the Cane Commissioner Rule 108 provides for compulsory arbitration of disputes therein mentioned and it is common ground that a dispute of the present nature under examination will not be covered by rule
108. The High Court observed that rules 54 and 55 being a complete code in itself with regard to regulation making power for disciplinary action with a provision for 572 appeal to the Cane Commissioner and rule 108 not being attracted, the civil court will have jurisdiction to entertain the present dispute. The High Court overlooked the fact that 1953 Act neither repeals nor replaces 1912 Act. A cane-grower other than a Cane-growers' Cooperative Society would be governed by 1953 Act but the cane grower not being a co-operative society it would not be governed by the 1912 Act. A Cane-Growers' Co-operative Society would be governed with regard to the provisions for law of Co-operative Societies by 1912 Act and in respect of its business of growing and selling cane it would be governed by 1953 Act. Both Acts operate in an entirely different field and are enacted with different objects in view. 1953 Act neither trenches upon 1912 Act nor supersedes or supplants any provision of it. Therefore, some provisions of 1953 Act cannot override or supersede the provisions of 1912 Act and by mere reference to the provisions of 1953 Act the High Court was in error in totally overlooking and ignoring the provisions in 1912 Act and the rules enacted thereunder.
However, in view of our finding that the dispute brought before the Civil Court in this case was not a dispute between a society and its officer and, therefore, one of the conditions for attracting rule 115 having not been satisfied, the civil court will have the jurisdiction to entertain the suit. For these reasons the decision of the High Court is confirmed. Accordingly this appeal fails and is dismissed with costs.
As the dispute is very old, we hope that it would be expeditiously disposed of by the learned district judge to whom the matter was remanded by the High Court.
S.R. Appeal dismissed.
573