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1974 DIGILAW 5 (BOM)

W. S. Pasarkar v. Ashok Sahakari Sakhar Karkhana Ltd. , Shrirampur

1974-01-10

P.B.SAWANT, S.K.DESAI

body1974
JUDGMENT - S.K. DESAI, J.:---The petitioner before us is a Medical Practitioner who was employed by the Ashok Shahakari Sakhar Karkhana Ltd., at Shrirampur (the respondent herein), from 1st November, 1962. On satisfactory completion of the probationary period of six months he was confirmed in service by the respondent. By its office Order No. GEN/12-6596 dated 4th January, 1966 (served on the petitioner on evening of the next day) the petitioners contention was that his services were wrongfully terminated and accordingly he preferred a dispute before the Deputy Registrar, Co-operative Societies, at Ahmednagar, after following the preliminary procedure as provided by the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as the said Act). In the said application (numbered as Arbitration Case No. 584 of 1967) the petitioner contended that the order of dismissal was illegal, improper, void and inoperative. He further asked for a declaration that he was entitled to re-instatment or that he continued to be in service, and on that footing claimed certain salary and benefits; alternatively, he claimed monetary reliefs also equivalent to the amount of salary and other benefits. Thereafter, it appears, an application was preferred by the respondent in which it was contended that there was no dispute which would fall under section 91 of the said Act. By his order dated 10th December, 1967 the Officer on Special Duty (who was seized of the dispute) held that there was a dispute as contemplated by section 91 of the said Act. The respondent-society challenged this order by its Revision Application No. SGR/REV/ANR-83 of 1968. One of the contentions urged was that the claimant was not the societys servant, being a Medical Officer. This contention was negatived by the appellate authority viz. the Commissioner for Co-operation and Registrar of Co-operative Societies, Maharashtra State, Poona. It was, however, also submitted that the reliefs sought for by the claimant for re-instatement and the dispute raised in connection with the said reliefs fell outside the purview of section 91, and reliance for this was placed on a Full Bench decision of this Court in (Rambhau Jairam Dhamange v. The President, Vinkar Co-operative Society Ltd.)1, 67 Bom.L.R. 877. It was, however, also submitted that the reliefs sought for by the claimant for re-instatement and the dispute raised in connection with the said reliefs fell outside the purview of section 91, and reliance for this was placed on a Full Bench decision of this Court in (Rambhau Jairam Dhamange v. The President, Vinkar Co-operative Society Ltd.)1, 67 Bom.L.R. 877. It was held in the above decision that a dispute between a co-operative society and its employee in regard to change in terms of employment or for re-instatement of the employee falls outside the purview of section 91 of the said Act and therefore, there would be no bar against the said dispute being decided under the C.P. Berar Industrial Disputes Settlement Act, 1947, or the Industrial Disputes Act, 1947. Following the decision, therefore, the appeal was allowed and it was held by the appellate authority that the subject matter was one which fell within the purview of the Industrial Court and therefore cannot be adjudicated upon the remedies provided under the Maharashtra Co-operative Societies Act. 2. It appears that thereafter the petitioner-claimant preferred a revision to the Government under the provisions of section 154 of the said Act, and by a somewhat cryptic order the Government rejected the revision application. That order is not a speaking order, and from a perusal of that order it is impossible to know whether the authority determining the revision application had even understood the contentions urged before it. Briefly stated, it is in line with the usual unsatisfactory orders passed by the Government in its appellate and revisional jurisdiction. 3. In this special civil application the petitioner has challenged the correctness of the appellate decision of the Commissioner for Co-operation in which he held that the dispute is not covered by section 91 of the said Act. 4. Before us it has been fairly admitted by the learned Advocate for the respondent that the petitioner being an employee of the respondent-society, the character of the parties was such as was required by section 91 of the said Act, which covers disputes of certain nature between a society and its past or present servants. 4. Before us it has been fairly admitted by the learned Advocate for the respondent that the petitioner being an employee of the respondent-society, the character of the parties was such as was required by section 91 of the said Act, which covers disputes of certain nature between a society and its past or present servants. It was, however, strenuously urged and that is a point to be decided that the dispute raised in the arbitration case by the petitioner-claimant was not one touching the constitution, election of the office-bearers, conduct of general meetings or management or business of the society, and, therefore, outsaid the purview of section 91 of the said Act. 5. Before dealing with the number of authorities cited at the Bar in this connection we may refer to one unreported decision of this Court on which some reliance was placed by the learned Advocate for the respondent, the said decision being one given in (Special Application No. 2790 of 1968)2, by a Division Bench of this Court consisting of Chandrachud and Madon J., decided on 5th January, 1970. The learned Advocate for the respondent relied upon the following passage to be found in the said judgment : "...Now, before it can be said that the dispute is of a nature contemplated by section 91(1) of the Act, there must atleast be an averment that the dispute in fact touches the management or the business of the society...." It was contended that there was no such averment in the claim filed by the applicant (in Arbitration Case No. 584 of 1967) and that by reason of such failure, it had to be decided following the above Division Bench decision that the dispute sought to be raised was one outside the purview of section 91(1) of the said Act. Now, in the first place, a fair reading of the judgment would show that the sentence quoted therefrom, on which reliance has been placed, is not a statement of the principal on which that special civil application was decided but an observation made in passing, drawing attention to a defect in the pleadings of the parties. Further it is not possible to read the observation in the sense in which the learned Advocate for the respondent wishes us to read the same. Further it is not possible to read the observation in the sense in which the learned Advocate for the respondent wishes us to read the same. The rules of proper pleadings even in regular Courts which Rules ought not to be applied with that strictness to pleadings before the Tribunals of this nature would require that the necessary facts from which jurisdiction can be inferred should be stated in the pleadings. If all the necessary facts are to be found in the pleadings, the technical submission that the dispute raised in the pleadings is one which touches the management or business of the society is, in our opinion, not necessary conversely, a mere statement of this nature without the necessary facts being given in the pleadings would not be sufficient. We are, therefore, unable to accept the contention of the learned Advocate for the respondent that in view of the above Division Bench judgment the respondent-society is entitled to succeed in this special civil application. 6. Disputes between past and present employees of a co-operative society and the society came to be considered by this Court as far back as in 1942 when Chagla, J. (as he then was) delivered his judgment in (G.I.P. Railway Employees Co-operative Bank Ltd. v. Bhikhaji Merwanji Karanjia)3, 45 Bom.L.R. 676. In his view the expression "touching the business of a society" to be found in section 55 of the Bombay Co-operative Societies Act (VII of 19250 were words of very wide import and not synonymous with the subjects of a society. The expression meant something affecting or relating to the business of a society. He went on to held that even where it is not one of the subjects of the society to employ or dismiss servants, such employment or dismissal was something which it does in the ordinary course of its business, and whatever is done in the ordinary course of business relates to or affects the business. In our view, the provisions to be found in section 91 of the said Act are analogous to the provisions to be found in section 54 of the Bombay Co-operative Societies Act, 1925; but it must be said that there have been a number of subsequent decision which have to some extent affected the ratio as laid down in the above decision, which decisions will now have to be considered. 7. 7. In Rambhaus case to which reference has earliest been made, it was observed that the matter referable to the Registrar must necessarily be one in respect of which a civil suit can lie but for the special provision contained in section 91. A Civil Court could not try an industrial dispute in which the relief claimed is outside the terms of employment. The Court accordingly held in the above decision that the Registrar also could not try such a dispute. 8. It was submitted that the reliefs sought for by the petitioner-claimant in the said arbitration case were also reliefs by way of re-instatement and for payment of his entire salary on the footing. It is true that a portion of the relief claimed in prayer (a) and the entire prayer (b) proceeds on this footing. That part of the claim of the petitioner must necessarily be held to be outside the purview of the dispute which could be raised before the Officer on Special Duty under section 91 of the said Act. However, a proper analysis of the prayers would show that the claimant is raising the following contentions therein and seeking consequential reliefs by way of declaratory and money decree (i) that the purported order of dismissal is illegal, improper or void; (ii) that the disputant has been wrongly or illegally discharged from service; (iii) that he continues in law in service and is on that footing entitled to the salary or benefits from the date of purported discharge to the date of re-instatement; and (iv) that, in the alternative, he is entitled to, if re-instatement is not granted, to monetary reliefs which the disputant has claimed on a similar footing but which the Tribunal deciding the dispute may grant on any other footing. Now, a Civil Court is certainly not entitled to grant re-instatement or pass an order regarding payment of the disputants back salary on that footing. But a Civil Court undoubtedly can proceed and would have the jurisdiction to decide that the termination was improper inasmuch as reasonable notice was not given, and thereafter proceed to award to the claimant damages for such improper termination, which damages, it is now will settled, would be equivalent to his emoluments and benefits during the period of such reasonable notice. We have been informed that the respondent had given one months notice pay and that is to be found in the portion of the termination order set out in para 3 of the plaint which the applicant had himself filed in Special Suit No. 45 of 1969. Whether that is a reasonable and proper period of notice would depend upon a number of circumstances such as the nature of the employment, duration of the employment and other factors, which it is unnecessary to mention here. It would be for the Court or the Tribunal to consider these factors and to decide whether the plaintiff was entitled to notice for a longer period. If in the opinion of the Court the plaintiff or claimant was entitled to a longer notice, then the termination would be improper, but the only relief to which the plaintiff or claimant would be entitled would be to receive as damages an amount equivalent to his emoluments for this period, lest the emoluments actually paid at the time when the termination order was passed i.e. one months pay. Now, this relief is certainly one which a Civil Court is entitled to award, and to that extent it would seem to fall within the ambit of section 91(1) of the said Act. 9. Our attention, however, has been drawn to a number of decisions of the Supreme Court in which the expression touching the business of the society has been considered and it was submitted that in the light of these decisions the dispute sought to be raised by the petitioner (even the restricted portion thereof as indicated above, which would be within the competence of a Civil Court to try) would fall outside the purview of section 91(1) of the said Act. These Supreme Court decisions came to be considered by a Single Judge of the Delhi High Court and a Division Bench of the Mysore High Court on whose decisions also reliance was also placed by the learned Advocate for the respondent. It, therefore, becomes necessary now to refer to these judgments. 10. These Supreme Court decisions came to be considered by a Single Judge of the Delhi High Court and a Division Bench of the Mysore High Court on whose decisions also reliance was also placed by the learned Advocate for the respondent. It, therefore, becomes necessary now to refer to these judgments. 10. The principal judgment of the Supreme Court on which strong reliance was placed was the one given in (The Deccan Merchants Co-operative Bank Ltd. v. Messrs Dalichand Jugraj Jain)4, 72 Bom.L.R. 418(S.C.) where Sikari, J., (as he then was) speaking for the Court considered the provisions of section 91 of the said Act and observed as follows : "....Five kinds of disputes are mentioned in sub-section (1).---first, disputes touching the Constitution of a society; secondly, disputes touching election of the office-bearers of a society; thirdly, disputes touching the conduct of general meetings of a society; fourthy, disputes touching management of management of a society; and fifthly, disputes touching the business of a society. 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 in bye-laws..." In the above case the Supreme Court had occasion to consider the Full Bench decision of this Court in (Farkhundali v. Potdar)5, 63 Bom.L.R. 985(F.B.) and 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 included any matter which relates to or concerns the business of a society, but we are doubtful whether the word affect would also be used in defining the scope of the word touching." Reference was also made at the Bar to (Co-operative Central Bank v. Additional Industrial Tribunal, Andhrana Pradesh, Hyderabad)6, A.I.R. 1970 S.C. 245 where the observations in the Deccan Merchant Co-operative Banks case were cited and applied to section 61 of the Andhra Pradesh Co-operative Societies Act (7 of 1964) which was pari materia with section 91. 11. The learned Advocate for the respondent also referred us to the observations made by Vaidialingam, J., in an unreported judgment of the Supreme Court in (Warna Sahakari Sakhar Karkhana Ltd. v. Vithalrao Anandrao Deshmukh)7, Civil Application No. 2687/1966 dt. 20-8-1969 (S.C.). In that decision the observations earlier made above in the Deccan Merchant Co-operative Banks case and the Co-operative Central Banks case, were applied to a dispute which was between a co-operative society and a neighbouring land owner who also happened to be a member thereof, which dispute concerned the drawing of water from a river which passed along the respective lands. This was actually a dispute between two riparian owners and in that dispute the plaintiff (who was the respondent before the Supreme Court) had not preferred any claim against the co-operative society to his capacity as a member thereof. In considering this claim the Court observed that the word business occurring in section 91(1) is used in its narrower sense and refers to the actual trading or commercial or other similar activity of the society which it is authorised to enter into under the Act, the Rules and its bye-laws. It was further observed that the claim made by the respondent plaintiff may at the most be considered to affect the business of the society, but it was not a matter touching the business of the society. It was accordingly held that the dispute was one not covered by section 91 and that the jurisdiction of the Civil courts was not therefore barred. 12. These pronouncements of the Supreme Court came to be considered by Deshpande, J. of the Delhi High Court in (The National Co-operative Consumers Federation Ltd., New Delhi v. Delhi Administration)8, A.I.R. 1971 Del. It was accordingly held that the dispute was one not covered by section 91 and that the jurisdiction of the Civil courts was not therefore barred. 12. These pronouncements of the Supreme Court came to be considered by Deshpande, J. of the Delhi High Court in (The National Co-operative Consumers Federation Ltd., New Delhi v. Delhi Administration)8, A.I.R. 1971 Del. 141 where it was held that the judgment given by Changla, J. in the G.I.P. Railways case must be deemed to have been overruled by the decision of the Supreme Court in the Deccan Merchant co-operative Banks case; and in para 12 of the report Deshpande, J. observes as follows :--- "12. With the greatest respect to the learned Judge, I am unable to agree that all disputes between a society and its menial servants would be excluded from section 54 if it is required that the dispute must touch the business which s carried on by the society in pursuance of its objects. On the contrary, every servant of the society, high or low, would be concerned in doing work, part of which would be touching the business of the society while the rest of it would not be so. For instance, one of the objects of the society is to give technical assistance to its members. Those servants of the society who give such technical assistance are doing the work which directly touches the business of the society. Therefore any dispute between the society and such servants regarding such work done by the servants would be a dispute touching the business of a society. On the other hand, if such servants or other servants are doing some work which is not directly related to the business of the society, then a dispute between the society and such servants relating to the work which s not concerned with the business of the society would be outside the scope of section 54." According to the learned Judge, therefore, not all disputes between a society and its employees would be excluded from the purview of section 54 or section 91. According to him, every servant of a society would be concerned in doing work part of which would be touching the business of the society while the rest of it would not be so. According to him, every servant of a society would be concerned in doing work part of which would be touching the business of the society while the rest of it would not be so. In his view any dispute arising with a servant doing some work not directly related to the business of the society would be outside the scope of sections 54 and 91. 13. The Division Bench of the Mysore High Court consisting of Narayana Pai, C.J., and Venkatramiah, J., and occasion to consider the two reported judgments of the Supreme Court earlier referred to in (Kunnimellihalli Dodda Pramanand Prathami Pattin Vyavasaya Sahakari Sangh Ltd. v. Shivappa Guddappa Surad)9, A.I.R. 1973 Mys. 68 where it was held that a dispute between a society and its past employee about his dismissal was not a dispute touching the constitution, management or business of the society. Strong reliance was placed on this judgment by the learned Advocate for the respondent. 14. Out attention was drawn in this connection to Rule 10 of the Maharashtra Co-operative Societies Rules, 1961, and it was submitted that the respondent-society was a processing society (sixth category under the said rule), the business of which to process agricultural produce viz. sugar, and that a Medical Officer could not be said to be an employee concerned with the said business activity of the respondent society and, therefore, a dispute between him and the society pertaining to his alleged wrongful dismissal can never be said to be the touching business of the society. 15. Now, at the outset we must, with respect, observe that we are unable to concur with all the observations made by the Delhi and the Mysore High Courts in the two judgments referred to above. But even on the limited footing which has appealed to Deshpande, J. We are of the opinion that the petitioners claim must be regarded as that of an employee concerned with the main business of the respondent society. The main business of the respondent-society admittedly is to manufacture sugar, for which business it would be required to purchase sugarcane, to extract juice therefrom and to process that juice and manufacture sugar from it, and for these purposes it would be required necessarily to purchase and/or hire and dispose of machinery as well as employ workers. The main business of the respondent-society admittedly is to manufacture sugar, for which business it would be required to purchase sugarcane, to extract juice therefrom and to process that juice and manufacture sugar from it, and for these purposes it would be required necessarily to purchase and/or hire and dispose of machinery as well as employ workers. Even for the main activity therefore the co-operative society will be required to engage services of several employees, some of whom would be concerned with rendering maintenance and repair service to the machinery installed by the respondent society for the work of manufacturing sugar. Now, such an employee concerned with the work of maintaining and repairing machinery used in the direct business activity of a co-operative society would be one whose activity or spare of employment would directly touch the main business activity of the society, with the result that such employees purported wrongful dismissal may give rise to a dispute touching the business of the society even within the restricted sense of section 91 as understood by Deshpande J. If dispute pertaining to such employees are to be held covered by section 91(1), why are disputes affecting employees concerned with the health and efficiency not of the machines but of the men who work these machines to be held not to be so covered? The Medical Officer employed by the respondent-society, who is concerned with the maintenance of health of the employees of the society concerned with the manufacturing process, but in the same way be regarded as directly concerned with the said manufacturing process and a dispute concerning his purported wrongful dismissal and the monetary claim made by him on that footing must be held to be one touching the business of the society and would therefore be within the purview of section 91 of the said Act. 16. To that extent the decision given by the Appellant Authority holding that the dispute was outside the purview of section 91(1) must be held to be incorrect and liable to be quashed. We must make it clear, however, that a part of the claim made by the petitioner-claimant in the said application, as indicated earlier, would be outside the competence of the Officer on Special Duty i.e. the claim for reinstatement and the claim for entire arrears of his salary on that basis. We must make it clear, however, that a part of the claim made by the petitioner-claimant in the said application, as indicated earlier, would be outside the competence of the Officer on Special Duty i.e. the claim for reinstatement and the claim for entire arrears of his salary on that basis. To the extent of the remaining portion of the claim only the order is liable to be quashed and set aside. 17. Accordingly the rule is made absolute as indicated above. As regards costs, as the petitioner can be said to be have succeeded only partially, the fair order for costs would be that the parties should bear their own costs of this Special Civil Application; it is accordingly as ordered. 18. Accordingly the matter will now go back to the Officer on Special Duty (for his equivalent) for determining whether the notice, if any, given by the respondent to the petitioner before us at the time of terminating his services was reasonable in the circumstances of the case. If he holds that the notice given was reasonable, no relief can be granted to the petitioner. On the other hand, if he holds that the one months notice (for which pay was given or offered along with the letter of termination of service) is not reasonable and therefore the termination improper, the petitioner would be entitled to a declaration to that effect and the Tribunal would therefore have the jurisdiction to award him damages which would be equivalent to his emoluments including the monetary equivalent of any perquisites or other similar benefits for the period of such reasonable notice as may be determined less any amount for the notice period or any portion thereof as he may have actually received. -----