1. The petitioners in this case have moved this Court under Article 226 of the Constitution and pray for a writ of mandamus against the Registrar, Co-operative Societies, directing him to comply with the provisions of law in the matter of their dispute with the Chunian Pursharthi Co-operative Multi-purposes Society Limited respondent No. 2.
2. The facts briefly are that the petitioners who are uncle and nephew became members of the respondent Society which was registered on the 20th January 1949. A few days after its registration the Society took on lease from the petitioners a large area of land in district Karnal for cultivation and reclamation. The period of the lease was 10 years. The Society entered into possession of the land and began to cultivate it. Under the terms of the lease a sum of Rs. 13,684-11-3 was claimed by the petitioners as their due for the harvest year 1949-50. A similar sum became payable for the harvest year 1950-51 and a sum of Rs. 12,000/- for the third year 1951-52.
It is urged by the petitioners that nothing was paid to them although at a meeting of the Society held on the llth May 1952 it was resolved that payment for the third year should be made. It was also mentioned at that time that the business had not shown any profits for the preceding two years and therefore nothing was due to the petitioners for that period. On the 28th May 1952 the petitioners sent a notice to the Society, calling upon them to act under the provisions of rule 18 framed under section 43 of the Co-operative Societies Act of 1912. The petitioners at the same time nominated their own arbitrator. The Society also nominated an arbitrator but the two arbitrators could not agree. The matter was reported to the Registrar and on the 18th May 1953 the Registrar informed the petitioners that he had appointed one Harnam Singh as arbitrator in respect of the petitioners' claim for the first year and Anant Bam in respect of their claim for the third year.
There was no reference with respect to the claim for the harvest year 1950-51. On the 20th March 1954 the arbitration was cancel kid by a resolution of the Society and the Registrar had in the meantime recalled the appointment of Harnam Singh. Anant Ram had already given his award on the 2nd February 1953 holding that the petitioners were entitled to a sum of Rs. 13,200/- in respect of the third year of the lease. In November 1953 the Society had passed another resolution appointing the Assistant Registrar Co-operative Societies and Harnam Singh as arbitrators, to take up the disputes of the first two years of the lease.
The arbitration was finally abandoned as the result of the intervention by the Minister in charge of the Department. His letter, Annexure G-l dated the 14th July 1935; intimated to the petitioners that Government had taken the advice of the Legal Remembrancer and had come to the conclusion that the dispute between the parties, i.e., the petitioners and the Go-operative Society arose out of the contract of lease and was not the sort of dispute which could be dealt with under rule 18. The final communication is Annexure I which was made by the Registrar of Co-oporative Societies to the petitioners. This letter is in the following terms:--
'Kindly refer to your registered letter dated 5th December 1955. A reply given to you by the I. P. M. Punjab vide his D.O. No. 2966-Coop-55/1255, dated 14-7-55 should stand. The Clause (b) of Rule 18 framed under the Co-operative Societies Act is not applicable in this case.'
3. If is said on behalf of the petitioners that the Registrar has failed to deal with the matter as required by law. It is pointed out that Rule 18 has now been superseded by section 50 of the Punjab Co-operative Societies Act 14 of 1955. When this matter was being considered in the original instance, it was Rule 18 of the rules framed under the old Act which had to be applied. There was no discontinuation of the proceedings after the passing of the Punjab Act and all proceedings under the old Act were to continue under the new Act.
The substance of Section 50 is very much in the same terms as Rule 18 although Sub-section (3) contains a new provision. Under Sub-section (3) when 'any question arises whether' for the purposes of this section a matter referred for decision is a dispute or not, the question shall be decided by the Registrar whose decision shall be 'final.'
4. It is urged on behalf of the respondent that the Registrar took the decision under Sub-section (3), There is no doubt that the Registrar could have taken a decision as to whether the dispute between the petitioners and the Co-operative Society was a dispute relating to the business of the Society or not and in that case the petitioners would have been entitled to file a civil suit in order to establish their claim. The Registrar, however, has not done this. He has merely informed the petitioners that the reply given by the Minister for Irrigation and Power should stand. I cannot construe the letter (Annexure I) into a decision made wider Sub-section (3) of Section 50 of the Punjab Act.
5. It seems to me that the dispute between the parties is a dispute which relates to the business of the Society. My attention has been drawn to the aims and objects of the Society as set out in the bye-laws. It has been urged on behalf of the petitioners that the only business which the Society has at present in hand is the working out of this lease. The object oi the lease is to improve the economic status of the members of the Society. The petitioners are members of the Society and although the dispute-arose out of a contract or lease it cannot be said that the dispute is not between members and the Society. Whatever capacity a member may hold, if he has any depute with the Society, the dispute would fall within the purview of rule 18 or section 50 of the Punjab Act.
Mr. Graver has drawn my attention to two cases which are somewhat analogous. In Mafizuddin Ahmad v. Narayanganj Central Co-operative Sale and Supply Society Ltd., 36 Cul WN 121: (AIR 1933 Cal 287) (A) one of the members of a co-operative society acting as a broker entered into a transaction with the society. Advances were made to him and the member executed a deed of surety. Upon a dispute arising with regard to this transaction it was held that the dispute was covered by the relevant rule which is analogous to rule 18 of the- Punjab rules and the matter could be made over to arbitration in accordance with the terms of that rule. In Damodar Das v. Co-operative Seeds Store AIR 1953 All 465 (B) there was an agreement between a member of a co-operative society and the society itself regarding the return of seed which had been advanced to the member. This was said to be a dispute covered by the Act.
In Kisanlal v. Co-operative Central Bank, Seoni, AIR 1940 Nag 16 (C) a family constituting a unit entered into an agreement with the co-operative society and undertook to discharge the duties of the treasurer. A mortgage deed was executed and a dispute arose. Two points were raised in that case. It was argued on behalf of the co-operative society that the dispute was between a bank and its treasurer and not between the co-operative society and its member. The other point which is not relevant for our purposes was that the office of the treasurer was held by a family and not a member. On both these points the decision was given against the co-operative society and it was held that this was dispute between a member and a co-operative society despite the fact that the member was acting as a treasurer. In that case too the dispute arose out of a contractual obligation.
6. It seems to me that the provisions of the Cooperative Societies Act are intended for the speedy disposal of all kinds of disputes between members of a co-operative society inter se and between individual members and the society, provided only that these disputes concern the business of the society.
There seems to bo no doubt at all that in the present case the dispute concerned the business of the Society although it arose out of a contractual obligation.
7. The Registrar is at perfect liberty to say under the provisions of Sub-section (3) of Section 50 that the matter is not a dispute concerning the business of the Society, but when he says this the petitioners will have the right to go to a civil Court.
They cannot in the present state of affairs enforce that right. This petition must therefore be allowed and I direct the Registrar to deal with this matter according to law in the light of the observations made in this order. The petitioners will recover the costs of this petition.