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K. Balachandran Vs. the Dy. Registrar, Co-operative Societies and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Service
CourtKerala High Court
Decided On
Case NumberW.A. No. 262 of 1975
Judge
Reported inAIR1978Ker126; [1978(36)FLR400]; (1978)IILLJ299Ker
ActsKerala Co-operative Societies Act, 1969 - Sections 14(1) and 69
AppellantK. Balachandran
RespondentThe Dy. Registrar, Co-operative Societies and ors.
Appellant Advocate K. Chandrasekharan, Adv.
Respondent Advocate K.P. Radhakrishna Menon, Adv.
DispositionAppeal allowed
Cases ReferredSankaran v. Deputy Registrar
Excerpt:
.....placed before us and which turns on the question whether a dispute was one 'touching the business of the society' or affecting or relating to the business of the society. the learned chief justice observed as follows ;emphasis was placed on the words touching the business of a registered society' occurring in section 60 (1) of the travancore-cochin co-operative societies act, 1951, and various decisions bearing on those words--like m. the question in cases like this is not whether the dispute referred for adjudication touches the business of a co-operative society; bye-laws or of any direction or instructions issued by the department, or calculated to disturb the peaceful and orderly working of the society or is contrary to the better interest of the society......by an order referred to in ext. p1 as ext clause referred the matter to the deputy registrar of co-operative societies. the deputy registrar after considering the services and qualifications of the two candidates gave his opinion (referred to in exts. p1 as c2) that the 4th respondent was to be promoted in preference to the appellant. in pursuance of this opinion, the committee reverted the appellant and promoted the 4th respondent on 1-1-1970. the appellant put in a petition to the committee for reconsideration. the committee re-considered and created a fresh post for the appellant and gave seniority to the appellant. the matter went up again before the deputy registrar for re-consideration. after considering the matter in detail and on the merits, the deputy registrar passed ext. pi,.....
Judgment:

V.P. Gopalan Nambiyar, C.J.

1. The appeal is against the decision of a learned Judge of this Court in O. P. No. 363 of 1973 reported m 1975 Ker LT 460. In view of the importance of the question raised the matter was directed to be placed before a Full Bench. The learned judge dismissed the writ petition to quash Ext. P1 Award of the Registrar, confirmed on appeal by Ext. P2 order of the Co-operative Appellate Tribunal. The question relates to a dispute as to the seniority and promotion as between the writ petitioner-appellant and the 4th Respondent. The Committee of the Kuttipuram Service Cooperative Bank Ltd. (referred to for short as the Society) promoted the appellant as Assistant Accountant on 1-5-1969. The 4th Respondent thereupon submitted a petition to the Committee complaining against the said promotion. The Committee by an order referred to in Ext. P1 as Ext Clause referred the matter to the Deputy Registrar of Co-operative Societies. The Deputy Registrar after considering the services and qualifications of the two candidates gave his opinion (referred to in Exts. P1 as C2) that the 4th Respondent was to be promoted in preference to the appellant. In pursuance of this opinion, the Committee reverted the appellant and promoted the 4th Respondent on 1-1-1970. The appellant put in a petition to the Committee for reconsideration. The Committee re-considered and created a fresh post for the appellant and gave seniority to the appellant. The matter went up again before the Deputy Registrar for re-consideration. After considering the matter in detail and on the merits, the Deputy Registrar passed Ext. PI, order by which he ordered that the Resolution of the Committee dated 10-4-1970 be rescinded and the direction Ext. C2 upheld. He also ordered that the 4th respondent is senior in rank to the appellant. This order was confirmed on appeal by the Appellate Tribunal in Ext. P2 order. The appellant's writ petition was to quash these orders.

2. Before the learned Judge the main question that was canvassed was that the jurisdiction of the Registrar to arbitrate under Section 99, in regard to the matter referred, was not attracted, and therefore had not been properly invoked. The question depends upon the provisions of the Co-operative Societies Act. Section 2 (i) of the Act and Section 69 (c) read:

'2 (i) 'Dispute' -- means any matter touching the business, constitution, establishments or management of a society capable of being the subject of litigation and includes a claim in respect of any sum payable to or by a society, whether such claim be admitted or not'

(underlining ours)

'69. Notwithstanding anything contained in any law for the time being in force, if a dispute arises--

(a) & (b) xx xx xx(c) between the society or its committeeand any past committee, any officer, agentor employee, or any past officer, past agentor past employee, or the nominee, heirs orlegal representatives of any deceased officer,deceased agent or deceased employee of thesociety; or

XX XX XX such dispute shall be referred to the Registrar for decision, and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.'

The pattern of those provisions is somewhat different from what has till recently been followed under the provisions of the Co-operative Societies* Acts, where almost uniformly, the Registrar's jurisdiction related, broadly speaking, to matters touching the business of the Society, without any independent definition of the term 'dispute'. Under the present Act of 1969 while the requirement of a 'dispute touching the business of the Society' is undoubtedly indicated, the definition makes it clear that the dispute may touch the business, constitution, establishments or management of a Society etc. The argument advanced before the learned Judge, based on the trend of opinion rendered with respect to the pattern of the provisions of the various Co-operative Societies Acts, till then in force, was that a dispute regarding service conditions, promotion and seniority etc. of employees in a Co-operative Society was not a matter 'touching the business' of the Society, and therefore not cognisable by the Registrar for arbitration as it is called, under the Co-operative Societies Act. The argument derives support from two decisions of the Supreme Court in D. M. Co-op. Bank v. Dalichand (AIR 1969 SC 1320) and Co-op. Cr. Bank v. Ind. Tri, Hyderabad (AIR 1970 SC 245), Those have laid down the limitation that a matter 'touching the business' of the Society must relate to the trade and commercial activities of the society. More important, is the decision of this Court in Kaloor Vadakkummury Service Co-operative Society Ltd. v. Asst. Registrar (1973 Ker LT 523). After examining the position elaborately, the Division Bench stated at page 525 as follows:

'3. The question for decision is whether the dispute that has been decided by the 2nd respondent by Ext. P5 award is a dispute that can competently be resolved by the Registrar functioning under Section 68 of the Act For deciding this question, it is necessary to understand the scope and nature of the disputes that can be settled by an Industrial Tribunal or Labour Court. We must in this connection, refer to a passage from the decision of the Privy Council in Labour Relations Board of Saskatchewan v. John East Iron Works Ltd reported in AIR 1949 PC 129. The question therein was whether the provisions in the British North America Act, 1867, should be complied with in appointing the members of the Labour Relations Board under the Trade Unions Act. 1944. This question turned on the further question whether the Labour Relations Board could be termed a District and County Court. The members of the Judicial Committee, considered the scope and functions of the Labour Relations Board and we think that two paras, in the judgment are relevant. We shall extract those paras:

'26, It is a truism that the conception of the judicial function is inseparably bound up with the idea of a suit between parties, whether between Crown and subject or between subject and subject, and that it is the duty of the Court to decide the issue between those parties, with whom alone it rests to initiate or defend or compromise the proceedings- Here at once a striking departure from the traditional conception of a Court may be seen in the functions of the appellant Board. For, as the Act contemplates and the Rules made under it prescribe, any trade union, any employer, any employers' association or any other person directly concerned may apply to the Board for an order to b* made (a) requiring any person to refrain from a violation of the Act or from engaging in an unfair labour practice, (b) requiring as employer to reinstate an employee discharged contrary to the provisions of the Act and to pay such employee the monetary loss suffered by reason of such discharge, (c) requiring an employer to disestablish a company dominated organisation or (d) requiring two or more of the said things to be done. Other rules provide for the discharge by the Board of other functions. It is sufficient to refer only to (b) supra, which clearly illustrates that, while the order relates solely to the relief to be given to an individual, yet the controversy may be raised by others without his assent and, it may be, against his will, for the solution of some far-reaching industrial conflict. It may be possible to describe an issue thus raised as a 'lis' and to regard its determination as the exercise of judicial power. But it appears to their Lordships that such an issue is indeed remote from those which at the time of confederation occupied the superior or district or county Courts of Upper Canada.

27. In the Court of Appeal for Saskatchewan the learned Chief Justice (in whose opinion the other Judges concurred) accepted the view that the Board exercised a judicial power analogous to that of the Courts named on the ground that such Courts always had jurisdiction in connection with the enforcement of contracts of hiring and awarding damages for the breaches thereof. But, as their Lordships think, this view ignores the wider aspects of the matter. The jurisdiction of the Board under Section 5 (e) is not invoked by the employee for the enforcement of his contractual rights; these, whatever they may be we can assert elsewhere. But his reinstatement which the terms of his contract of employment might not by themselves justify, is the means by which labour practices regarded as unfair are frustrated and the policy of collective bargaining as a road to industrial peace is secured. It is in the light of this new conception of industrial relations that the question to be determined by the Board must be viewed, and, even if the issue so raised can be regarded as a justiciable one, it finds no analogy in those issues which were familiar to the Courts of 1867.'

4. It is this concept we venture to think, that weighed with this Court when it decided Malabar Co-operative Central Bank Limited, Kozhikode v. State of Kerala reported in 1963 Ker LT 705 and Chief Justice M. S. Menon, if we may say so with great respect, in his inimitable style used facile language to express the same opinion;

'Co-operative societies are creatures of statute, controlled by their constitution, and concerned with their contracts. Industrial disputes stem, not from the subtle refinements of contractual obligations, but from the rougher jurisprudence of social justice and readjustment. The uplands of the Industrial Tribunals are out of bounds to the Registrar of Co-operative Societies.' This, the learned Chief Justice said in relation to the question whether wages, promotions, gratuity and pension, medical aid, recruitment and probation and retirement which were referred to an Industrial Tribunal, were matters which fell within the purview of the Registrar under Section 51 of the Madras Cooperative Societies Act, 1932. It is unnecessary for us to read that section and notice the difference in the wording of that section with Section 69 of the Act because the judgment is based on the nature of the disputes that can be settled by a Registrar under the Act. 5. The same learned Chief Justice had to deal with this question again and we must refer to this decision as well for it settles another principle which we find has pot been noticed in the numerous decisions that have been placed before us and which turns on the question whether a dispute was one 'touching the business of the society' or affecting or relating to the business of the society. The decision we have in mind is the one in Kerala State Handloom Weavers' Co-operative Society Ltd. v. State of Kerala reported in 1964 Ker LJ 175. After referring to the passage which we have just read, and a passage from the judgment of the Bombay High Court wherein Chief Justice Chagla had said this.

'Now Mr. Rane has very rightly pointed out that the disputes contemplated by Section 54 are disputes of a civil nature which could have been decided by Civil Courts but for the provisions with regard to compulsory arbitration provided in Section 45. Mr. Rane has also rightly pointed out that the present dispute between the second respondent and the petitioners could not have been the subject-matter of a reference to arbitration under Section 54. The second respondent is not claiming to assert any civil rights against the petitioners. What he is claiming is certain rights which are now conferred upon workmen and employees as a result of principles of social justice which are now almost universally acknowledge all the world over. There is no right of reinstatement under civil law which can be enforced by an employee against his employer. No contract of personal service can be specifically enforced by a civil court nor does a civil court determine whether the ' wages paid to an employee are proper wages or not. Civil Courts are bound down by the law of contract and it is under the law of contract that the Civil Courts decide disputes between a master and his servant.The learned Chief Justice observed as follows ;

'Emphasis was placed on the words touching the business of a registered society' occurring in Section 60 (1) of the Travancore-Cochin Co-operative Societies Act, 1951, and various decisions bearing on those words--like M. S. Madhava Rao v. D.V.K. Surya Rao (AIR 1954 Mad 103) (FB)--were brought to our notice. It is unnecessary to consider those decisions in this judgment. The question in cases like this is not whether the dispute referred for adjudication touches the business of a co-operative society; the question really is whether that dispute comes within the category of disputes covered by Section 60 (1) of the Travancore Cochin Co-operative Societies Act, 1951. The purpose of Chapter XIII of the Travancore Cochin Co-operative Societies Act, 1951 the Chapter in which Section 60 (1) occurs--as not to resolve all controversies touching the business of co-operative societies under the provisions of that Chapter; but resolve only such controversies as can be resolved in an ordinary court of law. In other words the arbitration provided by Chapter XIII is an alternative to the normal processes of the ordinary courts and not to the extraordinary process of adjudication under the Industrial Disputes Act. 1947, which has been designed to deal with controversies which by their very nature are outside the purview of ordinary litigation.

With great respect, we fully agree with the views expressed in the above passage and in the light of that passage, we are not dealing with the numerous other decisions that have been quoted before us, on the question whether the dispute with which we are concerned here is a dispute touching the business of the co-operative society or touching the establishment or management of the co-operative society.'

Paragraphs 7 and 8 of the judgment which we refrain from quoting in full, noticed the two Supreme Court decisions in AIR 1969 SC 1320 and AIR 1970 SC 245. We venture to extract the following quotation from the latter decision quoted in para 8 of 1973 Ker LT 523:

'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 Section 81 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.....' The principle thus settled was that the Registrar will have jurisdiction to entertain all matters ordinarily and normally cognisable by civil courts. The same principle was reiterated in Sankaran v. Deputy Registrar (1975 Ker LT 861.

3. The jurisdiction of the Registrar in regard to arbitration under the Co-operative Societies Act, having been thus sketched by the decisions of this Court, the question is whether, on the facts disclosed in this case, the Registrar had jurisdiction or not. The learned Judge found jurisdiction in the Registrar on the addition of the word 'establishments' in the definition of the word 'dispute', which we have extracted earlier. In so finding the learned Judge has lost sight of the important principle stated by the decisions to which we have just made reference, that the jurisdiction of the Registrar is conterminous with the jurisdiction of the' ordinary civil courts. It is beyond dispute that no rules or bye-laws regulating seniority and promotion as between the appellant and the 4th Respondent, or in respect of the employees of the Co-operative Society have been framed. In the absence of such rules, regulations or bye-lays, a dispute as to seniority or promotion cannot be entertained or made the subject of litigation in a civil court. The provisions of Section 14 (1) (b) of the Specific Relief Act and the inability to grant the relief of reinstatement would exclude them from the purview of the ordinary civil courts, as stated in the decisions already noticed. Ex hypothesi, such a dispute cannot be a subject-matter of arbitration by the Registrar.

4. The learned Additional Advocate General sought to sustain the Registrar's powers under Rules 176 and 185 of the Kerala Co-operative Societies Rules. These Rules read:

'176. Registrar's power to rescind resolution.--- Notwithstanding anything contained in the bye laws of a registered society, it shall be competent for the Registrar to rescind any resolution of any meeting of any society or of the committee of any society, if it appears to him that such resolution is ultra vires of the objects of the society, or is against the provisions of the Act, Rules. Bye-laws or of any direction or instructions issued by the Department, or calculated to disturb the peaceful and orderly working of the society or is contrary to the better interest of the society.'

'185. Promotions.

(1) Appointments to higher categories of service in a Society shall ordinarily be made by promotion from among members eligible for appointment to such category in accordance with those rules on the basis of seniority in the feeder category. The feeder category for this purpose shall be prescribed by the society by framing suitable subsidiary regulations with the approval of the Registrar.

(2) It shall be competent for the committee of a society to relax the qualifications of an employee for purpose of promotion in deserving cases with the prior approval of the Re gistrar and for reasons to be recorded in writing.'

As far as Rule 176 is concerned, we do not think we would be justified in tracing the impugned order Ext. PI to that Rule. The order itself expressly states that it was passed on a petition under Section 69 (1) of the Act. The terms of the order also make it clear that it cannot possibly be sustained as one passed under Rule 176 of the Act. For these reasons we rule out R. 178.

5. Rule 185 has no application at all, as it came into force only on 1-1-1974 i.e. beyond the relevant date of the impugned proceedings. We are of the opinion, in the light of the principles settled by the decisions of the Supreme Court and by this Court which we have noticed earlier, the jurisdiction of the Registrar under Section 69 of the Co-operative Societies Act is not attracted. It is unnecessary to consider whether the addition of the term 'establishments' in Section 2 (i) would comprehend disputes as to seniority and promotion.

We allow this appeal and set aside the judgment of the learned Judge. The result is that O, P. 363 of 1973 will stand allowed and Exts. P1 and P2 orders will stand quashed. We make no order as to costs.


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