Raghu Nandanan v. Joint Registrar — 1998 DIGILAW 238 (KER)

Judgment :- B.N. Patnaik, J. The petitioner challenges Ext. P3 order passed by the Joint Registrar of Cooperative Societies by which his prayer under S.69 of the Kerala Co-operative Societies Act, 1969 (for short, 'the Act') for setting aside the decision of the Board of Directors of the second respondent Bank dated 26.4.1991 cancelling his recruitment as a junior clerk was rejected on the ground that the dispute is not one that conies under the purview of S.69 of the Act. 2. The second respondent Bank invited applications for appointment to the post of a Junior Clerk by an advertisement dated 13.4.1990. A recruitment test was conducted and in the rank list thereof, the petitioner got the first position. But, however, the new Board of Directors which assumed office on 1.7.1990 by its Resolution No. 183/90-91 dated 26.4.1991 decided to cancel all the proceedings taken by the earlier Board for appointment to the post of Junior Clerk. The petitioner approached the first respondent, the Joint Registrar of Co-operative Societies, with an arbitration petition to issue an order restraining the bank from holding written test and making fresh selection to the post of Junior Clerk and also to issue a direction to the second respondent to honour the rank list duly approved by Resolution No. 241/89-90. It was contended before him inter alia that as the matter relates to a dispute touching the business, constitution, establishment and management of the society, the Registrar is empowered to consider the petition and pass appropriate orders. Under S.69(4) of the Act, if any question arises whether a dispute referred to the Registrar under the Section is a dispute or not as defined in clause (i) of S.2, the decision thereon of the Registrar shall be final. The order refusing to entertain the arbitration case is not appealable under S.82 of the Act. The order is however, liable to be impugned in proceedings under Art.226 of the Constitution of India. Hence it is prayed in this O.P. that Ext. P3 be quashed and a direction be issued to decide the dispute raised by the petitioner. 3. In the counter affidavit filed by the respondents 1 and 2 it is stated that the petitioner is not a member or an employee of the second respondent Bank. Hence it is prayed in this O.P. that Ext. P3 be quashed and a direction be issued to decide the dispute raised by the petitioner. 3. In the counter affidavit filed by the respondents 1 and 2 it is stated that the petitioner is not a member or an employee of the second respondent Bank. He is only an applicant for appointment to the post of a clerk and as such he had no business transaction with the bank. Ext. P1 petition preferred by him does not come under the purview of S.69 of the Act. The matter in petition is not a dispute as listed in S.69 of the Act and therefore, the petition does not attract the operation of S.69(1)(f). Since the first respondent is of the opinion that Ext. P1 petition does not relate to a dispute touching the business of the society as defined in S.2(i) of the Kerala Co-operative Societies Act, the first respondent has rightly passed the impugned order in Ext. P3. 4. S.2(i) defines 'dispute' to mean any matter touching the business, constitution. establishment 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. S.69(4) of the Act states that if any question arises whether a dispute referred to the Registrar under the Section is a dispute as defined in Clause (i) of S.2, the decision thereon of the Registrar shall be final. The relevant portion of S.69(1) of the Act is extracted below: "Notwithstanding anything contained in any law for the time being in force, if a dispute arises: - xxxx ~ xxxx xxx .. (f) between the society and a person other than a member of the society who has been granted a loan by the society or with whom the society has or had business transaction or any person claiming through such person. xxxx xxxx xxx such dispute shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute". 5. The short question that arises for consideration is whether the matter raised in the petition Ext. P1 is a dispute so as to enable the Registrar of the Co-operative Societies to decide it under S.69 of the Act. 6. 5. The short question that arises for consideration is whether the matter raised in the petition Ext. P1 is a dispute so as to enable the Registrar of the Co-operative Societies to decide it under S.69 of the Act. 6. An analogous provision is found in S.91(1) of the Maharashtra Co-operative Societies Act (32 of 1961) as in S.69(1) of the Kerala Co-operative Societies Act. The Supreme Court in Deccan Merchants Co-operative Bank Ltd. v. M/s. Dalichand Jug raj Jain & Ors. (AIR 1969 SC 1320) interpreted the word 'business' occurring in S.91 of the Maharashtra Co-operative Societies Act as follows: "The word'business in sub-s.(i) of S.91 has been used in narrower sense and it means the actual trading or other similar business activity of the society which the society is authorised to enter into under the Act and the Rules and bye-laws. 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. xxxx xxxx xxx Although the nature of business which a society does can be ascertained from the objects of the society, it cannot be said that whatever the society does or is necessarily required to do for the purpose of carrying out its objects is part of its business". The process of recruitment does not come within the scope of constitution, establishment or management of a society. Since the decision to cancel a recruitment test does not relate to the business of the society within the meaning of S.69 of the Act, the Joint Registrar has no jurisdiction to decide a dispute of this nature. There is, therefore, no merit in this petition and it is accordingly dismissed.