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1982 DIGILAW 149 (ALL)

M. F. FAROOQI v. U. P. INDUSTRIAL CO-OPERATIVE ASSOCIATION LTD.

1982-02-03

A.N.VERMA, SATISH CHANDRA

body1982
( 1 ) THIS is a plaintiffs appeal. The suit was for a declaration that the plaintiffs services were illegally terminatied by the U. P. Indus-trial Co-operative Association Ltd. Kanpur, the defendant. The plaintiff also claimed damages. He alleged that he Was appointed as a clerk on April 8, 1958. He was subsequently promoted as not-er and drafter and later on as Yarn Inspected. He was transferred to Business Section of the Co-operative Society in September 1965. He was a permanent employee but his services were terminated abruptly from 25th May, 1966 III contravention of the relevant rules and provisions on the subject. ( 2 ) IN defence it was pleaded that the plaintiff was temporary hand and his services could be determined at any time. Subsequently it was pleaded that the suit was barred by section 111 (c) of the U. P. Co-operative Societies Act, 1965. The trial court decreed the suit but on appeal the decree was reversed and it was held that the suit held that tbe suit was baited by section 70 read with section 111 of the aforesaid Act. ( 3 ) BEFORE the learned single Jadge the plaintiff challenged the finding that section 70 of the Act was applicable. On behalf of the defendant-respondent reliance was placed upon a single judge decision in writ petition no. 3693 of 1968. The U. P. Industrial Co-operative Union Ltd. v. The First Additional Munsif gorakpur, decided on 7th Januray, 1970. In this decision it was held that a dispute relating to the validity of the termination of services could validly be settled under section 70 of the U. P. Co-operative societies Act and hence the jurisdiction of the Civil Court for determining such a dispute was barred. No reasons wese given the earlier decision of the Supreme Court was not brought to the notice of the learned single Judge. The learned single Judge hearing this case felt that in view of the Supreme Court decision the aforesaid decision of the learned sigle Judge required reconsi deration. He accordingly refezred the case to a larger Bench. ( 4 ) SECTION 111 (c) of the Act states that save as expressly provided in this Act no civil or revenue court shall any jurisdiction in respect of any dispute required under section 70 to be referred to the Registrar. He accordingly refezred the case to a larger Bench. ( 4 ) SECTION 111 (c) of the Act states that save as expressly provided in this Act no civil or revenue court shall any jurisdiction in respect of any dispute required under section 70 to be referred to the Registrar. ( 5 ) SECTION 70 of the Act relates to a dispute relating to the constitution management or the business of a co-operative society in Deccan Merchants Co-operative Bank Ltd v. M/s. Dalichand jugraj Jain, AIR 1969 SC 1320 , the Supreme Court observed as under : " 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 it bye-laws. " it was futher observed : " 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 " affects " should also be used in definding the scope of the wotd " touching" ( 6 ) THIS decision was approved and followed by the Supreme court in Allahabad District Co-operative Limited v. Hanuman Dutt tewari, (1981) 4 SCG 431. In this case it was further held after following is earlier decision in Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, 4. P. (1970) 1 SCR 205 that the expression touching the business of the society makes it very doubtful whether a dispute in tespect of alteration of conditions of service can be held to covered by this expression. In this case it was further held after following is earlier decision in Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, 4. P. (1970) 1 SCR 205 that the expression touching the business of the society makes it very doubtful whether a dispute in tespect of alteration of conditions of service can be held to covered by this expression. It was also held that 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 dispute touching the businsss of the society. ( 7 ) LEARNED counsel for the defendant respondent submits that the aforesaid decisions of the Supreme Court are distinguishable. They interpreted and construed the phrase touching the business of the society according to the normal rules of construct ion. But in the present case under section 70 of the Act the phrase dispute relating to the constitution management or the business of a Co-operative Society has itself been defined by sub-section (2) to section 70 of the Act. According to the learned counsel the phrase touching has not the same significance or connotation as the words relating to. This submission is not acceptable to us. In the earlier Supreme Court decision it was specifically held that the word touching is very wide and would include any matter which relates to or concerns the business of a society. Hence it must be held that the phrase relating has the same significance or meaning as the word touching. ( 8 ) IN the next place the learned counsel invited our attention to clause (d) of sub section (2) of section 70 of the Act which provides :" (2) For the purposes of sub section (1) the following shall be deemed to be included in dispute relating to the constitution, management or the business of a co-operative society namely : (a ). . . . . . . . . . . . . . . . . . . . . . . . . (b ). . . . . . . . . . . . . . (c ). . . . . . . . . . . . . . . . . . (d) all matters relating to the subjects of the society mentioned in the bye laws as also those relaying to the election of office-bearers. " ( 9 ) ACCORDING to the learned counsel all matters relating to the objects of the society mentioned In bye-laws will be deemed to be relating to the constitution, management or the business of a co-operative society. Learned counsel invited our attention to clauses (h) and (t) of bye-law 4 which lay down the objects of the Association Clauses (b) and (t) read as under : (h) to recruit, train and maintain suitable staff for discharging its obligation to its constituents. (t) to do all and such other things as may be incidental and conductive to the attainment of any or all the aforesaid objects. " ( 10 ) THE dispute in the present case relates to the validity of the order of termination passed against the plaintiff. The dispute is not in any mannea related to recruitment, training and maintenance of suitable staff. To achieve this object the co-operative society may make tues or regulations relating to recreitment, training and maintenance of the suitable staff but there is no dispute in regard to those rules or regulations. The dispute is about an individual action taken against one of its employees which, in our opinion, will not directly relate to the object mentioned in clause (h ). Similarly the residuary object mentioned in clause (i) has no connection whatsoever with the dispute raised in the present suit, namely, the validity, of the order of termination. We are hence unable to accept the submission that clause (b) of sub-section (2)of section 70 of the Act is in any manner attracted to the facts of the present case ( 11 ) AS held by the aforesaid Supreme Court decisions, the dispute regarding the validity of the termination of an employees service is not a dispute relating to the business of the co-operative society. Hence such a dispute is not covered by section 70 of the act and cannot be referred to arbitration as provided thereunder in this view, section 111 of the Act is also not attracted so as to bar the Jurisdiction of the civil court. The suit was, in our opinion maintainable. ( 12 ) SINCE the lower appellate court decided the appeal merely on the question of jurisdiction and dismissed the suit on the ground that it was not maintainable in the civil court, it is fit and proper that the matter may go back to the lower appellate court for decision of the suit in accordance with law. ( 13 ) IN the result, the appeal succeeds and is allowed. The impugned judgment and decree of the lower court is set aside and the matter is remanded to the lower appellate court for decision of the appeal in accordance with law. The parties may, however, bear their own costs in this court. The costs in the courts below will abide the result.