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P. Shanmugam Vs. the Secretary, Co-operative Fire and General Insurance Society Ltd. - Court Judgment

LegalCrystal Citation
SubjectService
CourtChennai High Court
Decided On
Reported in(1972)2MLJ134
AppellantP. Shanmugam
RespondentThe Secretary, Co-operative Fire and General Insurance Society Ltd.
Cases ReferredCredit Bank v. Industrial Tribunal
Excerpt:
- .....getting a salary of more than rs. 300 per mensem was not entitled to any bonus.4. the deputy registrar held that he had jurisdiction to try the case under section 73 of the madras co-operative societies act and that the claim for the salary had to be allowed; and with regard to bonus, he allowed only a part of the claim for 1963 and upto march, 1964 aggregating to rs. 1,125. he allowed interest at 6 per cent per annum on the amounts as against the claim of 9 per cent per annum.5. aggrieved by the decision of the deputy registrar the society preferred. co-operative appeal no. 9 of 1969 before the chief judge, court of small causes. the chief judge took up for determination the questions as to whether the deputy registrar had jurisdiction to try the claim under section 73 of the act,.....
Judgment:
ORDER

P.R. Gokulakrishnan, J.

1. These are connected cases. Both are against the order passed by the Chief Judge, Court of Small Causes, in Co-operative Appeal No. 9 of 1969. The petitioner in C.R.P. No. 820 of 1970 entered service in 1941 as the Manager of the Co-operative Fire and General Insurance Society Ltd., Madras. Later he became the Secretary of the said society. In November, 1962 certain charges were framed against him and he was placed under suspension on 17th December, 1962. On 31st March, 1964, the petitioner attained the age of superannuation. On 16th March, 1964 the Society issued a notice retiring the petitioner on his attaining the age of 55. Even after the petitioner was retired from service, the Society proposed to proceed with the enquiry with regard to the charges against the petitioner. The petitioner thereupon filed O. Section No. 1152 of 1966, on the file of the City Civil Court, Madras, for a permanent injunction restraining the Society from proceeding with the enquiry, contending that by allowing him to retire from service, the relationship of master and servant between him and the Society had ceased and that therefore the Society had no jurisdiction to proceed with the disciplinary action against him. The said suit was decreed in favour of the petitioner and also confirmed in the appeal. Thus, the decision obtained by the petitioner in the said suit has become final.

2. Subsequently, the petitioner came forward with a claim before the Deputy Registrar of Co-operative Societies (Non-Credit) for recovery of a sum of Rs. 26,717-82 which is made up of a sum of Rs. 17,639-12 towards arrears of salary from 17th December, 1962 to 1st April, 1964, less subsistence allowance paid to him at the rate of Rs. 262-50 per month, a sum of Rs. 5,879-20 being the interest on the amount at 9 per cent per annum; a sum of Rs. 2,875, being the bonus for the years 1961, 1962,1963, till March, 1964 and a sum of Rs. 324-50 being the interest on that amount at 9 per cent, per annum. The petitioner contended that he was entitled to the entire amount, since by reason of the decision of the City Civil Court, referred to above, the Society could not go on with the disciplinary proceedings against him and therefore he should be deemed to have been suspended from service illegally and that the Society had no jurisdiction to withhold the full salary and the bonus due for the aforesaid periods.

3. The Society resisted the claim of the petitioner by raising the plea that the Registrar had no jurisdiction to entertain the claim and to pass a decree as Section 73 of the Madras Co-operative Societies Act, 1961, which alone confers powers on the Registrar to decide disputes, will not apply to the facts of this case. On merits, it was contended by the Society that the petitioner having not exercised his powers and duties as Secretary of the Society during the relevant period, he would not be entitled to any salary for the period. It was also contended that the petitioner being an employee getting a salary of more than Rs. 300 per mensem was not entitled to any bonus.

4. The Deputy Registrar held that he had jurisdiction to try the case under Section 73 of the Madras Co-operative Societies Act and that the claim for the salary had to be allowed; and with regard to bonus, he allowed only a part of the claim for 1963 and upto March, 1964 aggregating to Rs. 1,125. He allowed interest at 6 per cent per annum on the amounts as against the claim of 9 per cent per annum.

5. Aggrieved by the decision of the Deputy Registrar the Society preferred. Co-operative Appeal No. 9 of 1969 before the Chief Judge, Court of Small Causes. The Chief Judge took up for determination the questions as to whether the Deputy Registrar had jurisdiction to try the claim under Section 73 of the Act, whether the petitioner was entitled to the arrears of salary as claimed and whether he was entitled to the bonus. The learned Chief Judge, after interpreting Section 73 of the new Act and also the corresponding Section 51 of the old Act, came in the conclusion that the Deputy Registrar had jurisdiction to try the claim of the petitioner under Section 73(1) of the Act. As regards the right of the petitioner to claim the arrears of salary, the Chief Judge held that the petitioner was entitled to the arrears of salary claimed by him in the plaint; but as regards the claim for bonus for three years, i.e., from 1961 to 1963 and upto March, 1964, aggregating to Rs. 2,875 relying on Rule 46(5) of the Madras Co-operative Societies Rules, 1963 which reads:

A Society which employs paid establishment may pay bonus to such employees : Provided that the amount so paid shall not exceed such amount as may be specified in its by-laws subject to a maximum of three months basic pay : Provided further that no such payment shall be made to employee drawing a pay exceeding Rs. 300 per mensem.

the Chief Judge held that the petitioner was not entitled to any claim for bonus for the period since his emoluments were more than Rs. 300 per mensem. He also held that the subsequent Amendment of Rule 46(5) in 1964 will not be available to the petitioner since he had attained the age of superannuation on 31st March, 1964, itself.

6 The petitioner, aggrieved by the decision of the Chief Judge, Court of Small Causes, in respect of the disallowance of the claim to bonus has filed C.R.P. No. 820 of 1970. The Society aggrieved by the decision of the Chief Judge who held that the Registrar had powers under Section 73 to go into the claim of the petitioner, has preferred C.R.P. No. 1812 of 1970.

7. Thiru K.K. Venugopal, learned Counsel for the petitioner in C.R.P. No. 820 of 1970, is not able to make any headway in convincing this Court regarding any impropriety in the finding of the learned Chief Judge, Court of Small Causes, on the claim of bonus made by the petitioner. The rule is very clear and hence I do not find any error of law or miscarriage of justice in the finding given by the Chief Judge, Court of Small Causes, regarding the claim of bonus. In this view, C.R.P. No. 820 of 1970 is dismissed but without costs.

8. Thiru Sivamani, the learned Counsel for the Society, the petitioner in C.R.P. No. 1812 of 1970, took me through the provisions of the Madras Co-operative Societies Act and also a number of decisions in support of his contention that the claim of the present nature cannot be gone into by the Deputy Registrar or the Registrar of Co-operative Societies.

9. The main question that has to be gone into in this C.R.P. is one of interpretation of Section 73 of the Madras Co-operative Societies Act, LITI of 1961. Section 73(1) reads:

If any dispute touching the constitution of the committee or the management or the business of a registered Society (Other than a dispute regarding disciplinary action taken by the Society or its committee against a paid servant of the Society) is:

(a) among members, past members and persons claiming through members, past members and deceased members, or

(b) between a member, past member or person claiming through a member, past member or deceased member and the Society, its committee or any officer, agent or servant of the Society, or

(c) between the Society or its committee and any past committee, any officer, agent or servant, or any past officer, past agent, or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased servant of the Society or

(d) between the Society and any other registered Society, such dispute shall be referred to the Registrar for decision.

The dispute arising between the Society and its servant must be, according to the above Section, touching (i) the constitution of the committee, or (ii) the management and [in) the business of a registered society. It has been specifically mentioned that the dispute regarding disciplinary action taken by the Society or its committee against a paid servant of the Society, will not come under this Section. It is clear that the present dispute cannot be classified as one relating to disciplinary action. Bat the present dispute is one between a past officer and the Society. The question, then, is as to whether, even though it is a dispute between the past officer and the Society, will it come under any of the three classes enumerated above. According to Thiru Sivamani, the learned Counsel for the Society, the dispute will never come either under the class of 'management' or of 'business' of the registered Society. Thiru K.K. Venugopal, the learned Counsel for the respondent, submitted that even though the matter will not come under 'dispute touching the constitution of the committee', it can either be brought under 'management' or 'business' of the registered Society and hence the Registrar has powers to decide the dispute.

10. Thiru Sivamani, the learned Counsel for the Society cited the decision in Tanjore Co-operative Marketing Federation Lid. v. Krithivasan : AIR1951Mad352 , wherein it is stated that a suit by an ex-employee of a cooperative society for a refund of the security deposit and for the arrears of his salary is not barred by Section 51 of the Co-operative Societies Act as the matter involved in the suit does not relate to the business of the society within the meaning of the Section.

11. Narqyana Nair v. The Secretary : AIR1948Mad343 is a case where in a suit for damages by a dismissed servant of a cooperative society, the dismissal was sought to be justified as a disciplinary action taken by the Society. The dispute was held to be one which is outside the purview of Section 51 of the Act and therefore the bar imposed upon the jurisdiction of the civil Court would not arise.

12. Madhava Rao v. Surya Rao : AIR1954Mad103 , is a case decided by a Full Bench of this Court. There, the scope of the phrase 'touching the business of the society' was considered. The question that was decided upon there Was as to whether a dispute in regard to the election of the members of the board of management is one touching the business of the registered society within the meaning of Section 51 of the Act. The Full Bench held that such kind of dispute will come under Section 51 of the Act (VI of 1932) and as such the Registrar will have powers to decide such disputes. Thus, we find the Full Bench has taken a broader view than that taken by Govinda Menon, J., in Tanjore Co-operative Marketing Federation v. Ktithivasan : AIR1951Mad352 . D.M. Co-operative Bank v. Dalichand : [1969]1SCR887 , dealt with Section 91 of the Cooperative Societies Act of Maharashtra. The said Section is more or less equivalent to Section 73 of the Madras Act. Dealing with the said Section, the Supreme Court considered the lease of tenancy rights obtained by the petitioners in that case. The Supreme Court observed that when the original owner executed the lease he was not acting as a member, but as a mortgagor in possession and therefore the Bank's claim did not fall under Section 91(1)(b) of the Maharashtra Act. The Supreme Court further observed:

While we agree that the nature of business which a society does can be ascertained from the objects of the society, it is 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 can be said to be part of its business. We, however, agree that the word 'touching' is Very wide and would include any matter which relates to or concerns the business of a society, but we are doubtful whether the word 'effects' should alSo be used in defining the scope of the word 'touching'.

Thiru Sivamani, the learned Counsel for the Society cited the decision in Co-operative Credit Bank v. Industrial Tribunal, Hyderabad : (1969)IILLJ698SC . Section 61 of the Andhra Pradesh Go-operative Societies Act (VII of 1964) came up for interpretation in that case. That was a case in which a dispute arose between the employees and the employer in respect of service conditions such as salary scales and adjustments, dear ness allowance, special allowances, other allowances, uniforms and washing, allowances for subordinate staff, conveyance charges, provident fund and gratuity, leave rules, joining time on transfer, rules relating to departmental enquiry against employees for misconduct,

probationary period and confirmation, working hours and overtime allowances, age of retirement, security, common good fund, service conditions-and promotions. The employee-bank objected to the Government reference to the industrial Tribunal and stated that the matter has to be decided by the Registrar of Go-operative Societies, under Section 61 of the Andhra Pradesh Cooperative Societies Act. The Tribunal, and the High Court negatived the contention of the Bank and upheld the reference made by the Government. The Supreme Court dealing with the appeal preferred by the Bank observed that the provisions of the Act, the rules and the bye-laws could not possibly permit the Registrar to change conditions of service of the workmen employed by the Bank, inasmuch as the Registrar is only required to decide the dispute referred to him in accordance with the bye-laws, and dismissed the appeal.. Thus, it is seen that in the above Supreme Court decision the facts, involved therein were completely different from those in the present case. But there is the following observation in paragraph 7 of that judgment:

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 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 Section 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.

From the above said observations Mr. Sivamani submitted that the word 'business' occurring in the Section is equated only with the actual trading or commercial or other similar business activity of the Society and hence the claim for arrears of salary-made by the petitioner cannot be entertained by the Registrar. The Supreme Court has not specifically interpreted the scope of Section 73 of the Madras Act or the words 'touching the business of the society' and its 'management'. In any event the: Supreme Court has not overruled the Full Bench decision of the Madras High Court in Madhava Rao v. Surya Rao : AIR1954Mad103 , noticed supra. Though the Supreme Court has 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, 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, it has not specifically laid down as to what are the matters that will come under the category of 'touching the business of the society.' In that case, the Supreme Court has stated that the Registrar cannot have powers to lay down service conditions; and in those circumstances, the Supreme Court also held that that particular matter will not come under the category of 'touching the business of society.'

No doubt, in National C.C. Federation v. Delhi Administration A.I.R. 1971 Del. 140, it has been held that the claiming of arrears of salary by a servant of a society cannot come under the category of 'touching the business of the society.' In that case, the Delhi High Court disapproved the Full Bench decision of the Bombay High Court in G.I.P. Rly. Employees Co-operative Bank Ltd. v. Bhikhaji Marwanji : AIR1943Bom341 which held that:

the Very fact that Section 54 refers to disputes between a society and its servants indicates that disputes regarding dismissal of a servant should be decided by the Registrar. For, it would be difficult to imagine what other kinds of disputes between a society and its servants would form the subject-matter of a dispute within the meaning of Section 54.

I do not think that the Supreme Court has considered and overruled the Full Bench decision of the Bombay High Court, above cited, except referring to the same.

13. As rightly pointed out by Thiru K.K. Venugopal, it cannot be held that the Supreme Court has decided the question as to the exact purport of the word 'touching the business of the society.' For this, the learned Counsel referred to the decision in Ranchhoddas v. Union of India : 1961CriLJ31 , In that case, dealing with the Sea Customs Act regarding the penalty under Section 167 thereof, the Supreme Court observed:

Some of the High Courts have thought that this Court had decided in these cases that the maximum penalty permissible under the provision is Rs. 1,000. The fact is that the question was never required to be decided in any of these cases and could not, therefore, have been, or be treated as, decided by this Court....The argument that this Court has already held that the maximum penalty that can be awarded under it is Rs. 1,000 must therefore fail.

14. Thiru K.K. Venugopal also brought to my notice the provisions of Section 73 Clause (c) of Madras Co-operative Societies Act and submitted that the very fact that 'dispute' between the society and the past servant is mentioned specifically in Clause (c) denotes that the present case also is covered by the said provisions; otherwise, it will be repugnant or superfluous. For this purpose he also quoted Bindra on Interpretation of Statutes.

15. On a reading of Section 73 of the Madras Co-operative Societies Act it is clear that that Section is broader based than the old Section 51 of the Madras Act VI of 1932. In the old Section 51, we do not have the word 'management' included; but in the present Section 73, both 'touching the business of the society' and 'management' have been included. It. cannot be taken, as I have already said, that the decision rendered by the Madras Full Bench in Madhava Rao v. Surya Rao : AIR1954Mad103 , has been overruled or dissented from in any of the Supreme Court decisions cited above. In ray opinion the facts of the case can be clearly taken as coming under the clause either ' touching the business of the society ' or 'management' of the society. In this view and I following the Full Bench decision of this Court, it is clear that the respondent has rightly approached the Registrar in his claim for arrears of salary. It cannot be said that the Registrar is powerless under the provisions of the Act or Rules or the bye laws of the society from giving relief to the past officer in the matter of his claim for arrears of salary. In the Supreme Court decisions above noticed D.M. Co-op. Bank v. Dulichand : [1969]1SCR887 and Co-operative Credit Bank v. Industrial Tribunal, Hyderabad : (1969)IILLJ698SC , the matters involved were tenancy agreement and service conditions respectively. These matters cannot be decided by the Registrar inasmuch as special legislations have been enacted for giving reliefs to tenancy rights and for service conditions, such as tenancy laws and Industrial Disputes Act respectively. In those circumstances, the Supreme Court felt that the case dealt with by them will be outside the scope of enquiry by the Registrar under the Co-operative Societies Act. Even the observations of the Supreme Court in Go-operative Credit Bank v. Industrial Tribunal, Hyderabad : (1969)IILLJ698SC , regarding the 'business' of the society cannot amount to a decision taking away the right of a past officer of the society from making a claim for arrears of salary.

16. Considering all these aspects and from the facts and circumstances of the present case, it is clear that the Registrar is competent to pass the award in respect of the dispute involved in this case.

17. In these circumstances, C.R.P. No. 1812 of 1970 is dismissed. There will be no order as to costs.


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