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Basti Sahkari Ganna Samiti Ltd. and anr. Vs. Suraj Nath Upadhyay and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 353 of 1964
Judge
Reported inAIR1967All218
ActsCode of Civil Procedure (CPC) , 1908 - Sections 9; Uttar Pradesh Co-operative Societies Rules, 1936 - Rules 115 and 134; Constitution of India - Article 226; Co-operative Societies Act, 1912 - Sections 43(2)
AppellantBasti Sahkari Ganna Samiti Ltd. and anr.
RespondentSuraj Nath Upadhyay and ors.
Appellant AdvocateShanti Bhushan and ;B.D. Agarwal, Advs.
Respondent AdvocateYashodanandan and ;S.C. Tripathi, Advs.
DispositionAppeal allowed
Excerpt:
.....paper - remedy of a party aggrieved by order of returning officer is to refer the dispute under rule 115 to registrar for his decision or to refer it to arbitrator. - - the munsif was of opinion that on account of the statutory clause of arbitration the courts had no jurisdiction to enter into the merits of the dispute apparently, he was also of the opinion, though not clearly expressed in hisorder, that when a special forum for the settlement of the dispute had been laid down in the rules it was necessary for the plaintiff to move the registrar and not to file a civil suit for having the order of the returning officer set aside. 9. the law with regard to the jurisdiction of the civil court is now well settled and is beyond controversy as laid down in firm seth radha kishan v...........under rule 115 of the u. p. co-operative societies rules. 1936 (to be referred here inafter as the rules) for decision by him or by arbitration. suraj nath upadhyay, plaintiff instituted the present suit for declaration that the order of the returning officer rejecting his nomination papers was void and illegal. the munsif was of opinion that on account of the statutory clause of arbitration the courts had no jurisdiction to enter into the merits of the dispute apparently, he was also of the opinion, though not clearly expressed in hisorder, that when a special forum for the settlement of the dispute had been laid down in the rules it was necessary for the plaintiff to move the registrar and not to file a civil suit for having the order of the returning officer set aside.4. the learned.....
Judgment:

D.S. Mathur, J.

1. This is an appeal by Basti Sahkari Ganna Samiti Limited, Basti, defendants, against the order dated 1-8-1964 of the Additional Civil Judge of Basti, allowing the appeal of Suraj Nath Upadhyay, plaintiff, and remanding the suit for hearing on merits in accordance with the law. The Munsif of Basti had dismissed the suit on the ground that it was not maintainable and was not cognizable by the civil Court; but the learned Civil Judge has taken a contrary view holding that a part of the suit was maintainable This necessitated the remand of the suit so that it may be heard and decided on merits.

2. For purposes of this appeal it is not necessary to reproduce in this order the details of the past litigation in connection with the election of the Chairman and Directors of Basti Sahkari Ganna Samiti Limited Eventually Suraj Nath Upadhyay, plaintiff, filed his nomination papers for the post of the Chairman of Directors and also the post of a Director from Kshetra No. 6. Suraj Prasad, defendant respondent No. 6, filed an objection against the nomination papers and the Returning Officer rejected the nomination papers of the plaintiff for both the posts on the ground that he had by entering into the litigation caused a loss of Rs. 15,000 to the Sahkari Ganna Samiti and was, therefore, disqualified to he elected as the Chairman and also Director.

3. Instead of referring the dispute to the Registrar under Rule 115 of the U. P. Co-operative Societies Rules. 1936 (to be referred here inafter as the Rules) for decision by him or by arbitration. Suraj Nath Upadhyay, plaintiff instituted the present suit for declaration that the order of the Returning Officer rejecting his nomination papers was void and illegal. The Munsif was of opinion that on account of the statutory clause of arbitration the Courts had no jurisdiction to enter into the merits of the dispute Apparently, he was also of the opinion, though not clearly expressed in hisorder, that when a special forum for the settlement of the dispute had been laid down in the Rules it was necessary for the plaintiff to move the Registrar and not to file a civil suit for having the order of the Returning Officer set aside.

4. The learned Civil Judge hearing the appeal was, however, of the opinion that the civil Court had the jurisdiction 'to go into the charges of malice and the charge that the order of the Returning Officer rejecting the nomination paper of the plaintiff for the post of a Chairman was in breach of a fundamental provision of the Rules because Rule 46 (7) was not applicable to it.'

5. A part of Rule 115 of the Rules has been declared invalid on the ground that it is beyond the rule-making power of the State Government; but the valid part of Rule 115 is applicable to the instant case. The material part of Rule 115 is:

'Any dispute touching the business of aregistered society

(i) between members............of a society

(ii) or between a member.......and thesociety or its committee

........................................

(iii) ........................ and

(iv) ...........................

shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar.'

Explanation 1.........................

Explanation 2.........................

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 '

The present dispute relates to the election of office-bearers of a society and hence touches the business of the society and is between the numbers of the society or between members of the society and the society itself, and hence such a dispute was to be referred in writing to the Registrar either for decision by him or for decision by arbitration.

6. Under Rule 116 of the Rules the disputes can be referred for decision to an arbitrator or to two joint arbitrators appointed by him or to three arbitrators. Any party considering itself aggrieved by the award of an arbitrator or arbitrators can appeal to the Registrar and the Registrar has the power to pass such orders as he deems fit (Rule 133) As provided in Rule 134, the decision of an arbitrator or arbitrators under these rules if not appealed against within the period prescribed and an order of the Registrar, whether in appeal or otherwise, 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.

7. Rules 115 to 134 thus lay down a special forum for the adjudication of disputes between the members of a society and a member of the society and the society itself touching the business of the registered society includingthe disputes relating to the election of office bearers of the society, and the decision of the arbitrator or arbitrators, if not appealed against, and the order of the Registrar are in all respects final and conclusive and cannot be called in question in any civil or revenue Court.

8. Two points that arise for consideration are: firstly, whether the award of the arbitrator or the decision of the Registrar can be challenged by the aggrieved party before the civil Court; and secondly, if the rule applicable to the award of an arbitrator and the decision of the Registrar can be made applicable to the decision of the Returning Officer which is the basis of the dispute and which could under Rule 115 be referred to the Registrar for decision by him or by arbitration.

9. The law with regard to the jurisdiction of the civil Court is now well settled and is beyond controversy As laid down in Firm Seth Radha Kishan v. Administrator, Municipal Committee Ludhiana. AIR 1963 SC 1547:

'Under Section 9 of the Code of Civil Procedure the Court shall have jurisdiction to try all suits of civil nature excepting suits of which cognizance is either expressly or impliedly barred. A statute, therefore, expressly or by necessary implication can bar the jurisdiction of civil Courts in respect of a particular matter. The mere conferment of special jurisdiction on a tribunal in respect of the said matter does not in itself exclude the jurisdiction of civil Courts. The statute may specifically provide for ousting the jurisdiction of civil Courts; even if there was no such specific exclusion, it if creates a liability not existing before and gives a special and particular remedy for the aggrieved party, the remedy provided by it must be followed. The same principle would apply if the statute had provided for the particular forum in which the remedy could be had. Even in such cases, the civil Court's jurisdiction is not completely ousted A suit in a civil Court will always lie to question the order of a tribunal created by a statute, even if its order is, expressly or by necessary implication, made final, if the said tribunal abuses its power or does not act under the Act but in violation of its provisions.'

10. Similarly, in Firm of Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh. AIR 1964 SC 322, it was observed:

'In dealing with the question whether civil Court's jurisdiction to entertain a suit is barred or not, it is necessary to bear in mind the fact that there is a general presumption that there must be a remedy in the ordinary civil Courts to a citizen claiming that an amount has been recovered from him illegally and that such a remedy can be held to be barred only on very clear and unmistakable indications to the contrary The exclusion of the jurisdiction of civil Courts to entertain civil causes will not be assumed unless the relevant statute contains an express provision to that effect, or leads to a necessary and inevitable implication of that nature. The mere fact that a special statute provides for certain remedies may not by itself necessarily exclude the jurisdiction of the civil Courts to deal with a case brought before itin respect of some of the matters covered by the said statute.

'Dealing with the question about the effect of this provision the Privy Council observed that it is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. Lord Thankerton who delivered the opinion of the Board, however, proceeded to add that 'it is also well settled that even if jurisdiction is so excluded, the civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. It is necessary to add that these observations, though made in somewhat wide terms, do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant taxing statute, its validity can he challenged by a suit on the ground that it is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. Similarly, if an appropriate authority has acted in violation of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question.'

11. The law laid down in AIR 1964 SC 322 (supra) was summed up in Provincial Government of Madras v J. S. Basappa. AIR 1964 SC 1873 as below :

'It was thus held that the civil Court's jurisdiction may not be taken away by making the decision of a tribunal final, because the civil Court's jurisdiction to examine the order, with reference to fundamental provisions of the statutes, non-compliance with which would make the proceedings illegal and without jurisdiction, still remains, unless the statute goes further and states either expressly or by necessary implication that the civil Court's jurisdiction is completely taken away '

In other words, the jurisdiction of the civil Court is completely barred where the statute lays down, either expressly or by necessary implication, that the civil Court's jurisdiction has been completely taken away, otherwise a civil suit shall be maintainable it the authority abuses its power or acts in violation of the fundamental principles of judicial procedure or there is such non-compliance with the fundamental provisions of the statute as would make the entire proceedings before the authority illegal and without jurisdiction.

12. Coming to the instant case, Rule 134 of the Rules not only provides that the decision of the arbitrator and the order of theRegistrar shall, as between the parties to the dispute, not be liable to be called in question in any civil or revenue Court, but it also lays down that such a decision or order shall in all respects be final and conclusive. The words 'in all respects' are of great significance and being of a general nature shall bar the jurisdiction of the civil Court in all the circumstances. In other words, a case covered by Rules 115 to 134 of the Rules is one in which the civil Court's jurisdiction is completely taken away and the award of the arbitrator and also the decision of the Registrar cannot be challenged before the civil Court even on grounds on which the order of an authority not merely liable to be called in question in any civil or revenue Court could be challenged before the civil Court.

13. Rule 134 of the Rules cannot be said to be beyond the rule-making power conferred on the State Government under Clause (1) of Section 43(2) of the Co-operative Societies Act, 1912. This clause empowers the State Government to make rules to provide that any dispute touching the business of a society between members of the society or between a member and the committee shall be referred to the Registrar Cor decision, or, if he so directs, to arbitration. The rules can also prescribe the mode of appointing an arbitrator or arbitrators, 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. Question of enforcement of the decision or award arises only after the decision or award has become final and conclusive, and consequently the above clause, by implication, empowers the Stale Government to completely take away the jurisdiction of the civil Court by laying down that the decision of the Registrar or the award of the arbitrator, if not appealed against, shall in all respects be final and conclusive.

14. After all the remedies provided under the Rules have been exhausted and the Registrar has given a final decision, the only mode of challenging the decision of the Registrar, or may be the award of the arbitrator, a point on which no final opinion is being expressed, shall be by moving the High Court under Article 226 of the Constitution of India.

15. When the civil Courts have no jurisdiction to entertain a suit wherein the decision of the Registrar or the award of the arbitrator made under the provisions of the Rules is sought to be challenged, they shall not have the jurisdiction to entertain a suit in which an order of an authority is sought to be challenged which could under Rule 115 of the Rules be referred to the Registrar for decision by him or by arbitration If a contrary view is taken, it shall be open to a party to get over the effects of Rule 134 of the Rules by challenging the order of an authority before referring the dispute to the Registrar under Rule 115 It must, therefore, be held that in a case covered by Rule 115 of the Rules the aggrieved party has no right to move the civil Courts, and he must referthe dispute in writing to the Registrar for decision by him or by arbitration. A civil suit, if instituted, would not be cognizable by the civil Court and can be dismissed on this ground. The lower appellate Court has thus taken an erroneous view of the law and the order of remand deserves to be set aside.

16. The F. A. F. O. is hereby allowed withcosts of all the Courts, the order of remand isset aside and the appeal preferred before theCourt below is dismissed while the decree andjudgment of the Munsif are restored.


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