whether a dispute raised by the said employee for setting aside his removal from service on the ground that it was an act of victimization and for reinstatement in service with back wages was one ‘touching the management or business of the society’, within the contemplation of the Co-operative Societies Act. This Court held that the expression ‘any dispute’ referred to in section 96 of the Gujarat Co-operative Societies Act, 1961 did not cover a dispute of the kind raised by the respondent employee against the bank. As a result, this appeal is allowed, the order of the High Court is set aside and the Division Bench judgment, on which reliance is placed by the High Court in the impugned judgment, is overruled. As a consequence, it is held that the petition filed by the respondent before the Cooperative Court is not maintainable. It would, however, be open to the respondent to file a civil suit. Needless to mention, in such a civil suit filed by the respondent, he would be at liberty to file application under Section 14 of the Limitation Act, 1963 in order to save the limitation.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1488 OF 2017
|THE MAHARASHTRA STATE COOPERATIVE HOUSING | |
|FINANCE CORPORATION LTD. |…..APPELLANT(S) |
|VERSUS | |
|PRABHAKAR SITARAM BHADANGE |…..RESPONDENT(S) |
J U D G M E N T
A.K. SIKRI, J.
The appellant, Maharashtra State Cooperative Housing Finance
Corporation Limited (hereinafter referred to as the ‘Corporation’), is a
cooperative society registered under the Maharashtra Cooperative Societies
Act, 1960 (hereinafter referred to as the ‘Act’). The respondent had
joined the services in the appellant Corporation in the year 1975 as an
Inspector. He was promoted to the post of Branch Manager (Class-I) in the
year 2000. For certain acts of misconduct allegedly committed by the
respondent, he was put under suspension vide orders dated July 11, 2003.
Thereafter, a charge-sheet was served upon him and the departmental inquiry
conducted, which resulted in dismissal order dated April 28, 2006 passed by
the Corporation, dismissing the respondent from service. His departmental
appeal having dismissed, the respondent approached the Cooperative Court at
Aurangabad, which is set up under the Act, on April 19, 2007 challenging
the orders of dismissal from service as well as the order rejecting the
departmental appeal by filing Dispute No. 61 of 2007. On receiving the
notice in the said dispute petition, the Corporation filed an application
for rejection of the petition of the respondent on the ground that the
Cooperative Court set up under the Act did not have the jurisdiction to
entertain and decide the service dispute between the employer and the
employee, inasmuch as the dispute in question did not touch upon the
business of the society and was not covered by the provisions of Section 91
of the Act. The Cooperative Court dismissed the said application holding
that it had the requisite jurisdiction to decide the dispute. Order of the
Cooperative Court was challenged by the appellant before the Cooperative
Appellate Court in the form of an appeal. This appeal was dismissed
confirming the orders of the Cooperative Court. Further challenge was laid
by the appellant by filing a writ petition before the High Court of
Judicature at Bombay, Aurangabad Bench. This writ petition has also been
dismissed vide judgment dated January 21, 2014. Present appeal assails the
said judgment of the High Court.

From the aforesaid, it becomes clear that the issue that needs to be
decided is as to whether the Cooperative Court established under the Act
has the requisite jurisdiction to decide ‘service dispute’ between a
cooperative society established under the Act and its employees.

Section 91(1) of the Act, scope whereof is to be examined, reads as under:
“91. Disputes. – (1) Notwithstanding anything contained in any other law
for the time being in force, any dispute touching the constitution,
elections of the committee or its officers other than elections of
committees of the specified societies including its officer, conduct of
general meetings, management or business of a society shall be referred by
any of the parties to the dispute, or by a federal society to which the
society is affiliated or by a creditor of the society, to the Cooperative
Court if both the parties thereto are one or the other of the following –

(a) a society, its committee, any past committee, any past or present
officer, any past or present agent, any past or present servant or nominee,
heir or legal representative of any deceased officer, deceased agent or
deceased servant of the society, or the liquidator of the society or the
official assignee of a deregistered society;

(b) a member, past member of a person claiming through a member, past
member of a deceased member of society, or a society which is a member of
the society or a person who claims to be a member of the society;

(c) a person other than a member of the society, with whom the society,
has any transactions in respect of which any restrictions or regulations
have been imposed, made or prescribed under Section 43, 44 or 45, and any
person claiming through such person;

(d) a surety of a member, past member or deceased member, or surety of a
person other than a member with whom the society has any transaction in
respect of which restrictions have been prescribed under Section 45,
whether such surety or person is or is not a member of the society;

(e) any other society, or the liquidator of such a society or
deregistered society or the official assignee of such a deregistered
society.”

As the plain language of Section 91 suggests, primarily those disputes
which pertain to the constitution of the society or the elections,
management or business of society, etc., are to be decided by the
Cooperative Court. Such disputes are normally between the members of the
society or between the society and its members. However, this Section also
uses the expression ‘it’s officers’ and on that basis, it is argued by the
respondent that disputes of employees/officers with the management and the
society can also be covered, more particularly, the dispute regarding
termination of the officer, which is the subject matter of the petition
filed by the respondent. It is further argued that in any case disputes
pertaining to ‘management or business of a society’ are wide enough to
cover the dispute between the society as an employer and its employees.

Before the High Court it was argued by the counsel for the respondent that
the respondent was not claiming reinstatement as he had attained the age of
superannuation when the dispute was filed. Therefore, while challenging
the resolution of the respondent dismissing his services, the respondent
was seeking compensation for wrongful dismissal. It was, thus, argued that
since reinstatement was not claimed, the award of compensation was within
the jurisdiction of the Cooperative Court. This contention of the
respondent is accepted by the High Court relying upon its earlier Division
Bench judgment in the case of Pralhad Vithalrao Pawar v. Managing Director,
Kannaded Sahakari Sakhar Karkhana Ltd. & Anr.[1] The rationale behind this
view taken in the aforesaid judgment by the High Court was that the remedy
under Section 91(1) of the Act is a substitute for the remedy which could
have been available before the Civil Court as the forum created under
Section 91 is a substitute for the Civil Court and created under a special
legislation. Since the Civil Court has the jurisdiction to award damages,
the Cooperative Court would be vested with same powers as its substitute.
The High Court also held that the respondent herein was working as the
Manager with the appellant Corporation and, therefore, was not ‘workman’
within the meaning of Section 2(s) of the Industrial Disputes Act, 1947.
The submission of the learned counsel for the appellant was that, no doubt
the Cooperative Court was the substitute of the Civil Court, but, at the
same time, it was the creature of the statute and only limited powers were
conferred upon the Cooperative Court and not all the powers of the Civil
Court. These powers pertained to the nature of disputes which were
categorically delineated under Section 91 of the Act. According to the
learned counsel, the Cooperative Court was vested with the jurisdiction to
decide only those disputes which touch upon the business of the society and
since it was not a dispute pertaining to the business of the society or the
election of committee or its officers, and was an employer-employee
dispute, Section 91 did not give any power to the Cooperative Court to
decide such disputes which arise between the employer and the employee.

Learned counsel for the respondent, on the other hand, adopted the afore-
noted reasons as given by the High Court. His submission was that the word
‘officer’ occurring in Section 91 would include disputes between the
management and its officers, i.e. employees. He also submitted that the
disputes relating to ‘management’ of a society should be read widely to
include service disputes as well.

We may state at the outset that it was conceded at the Bar that if the
employee of a cooperative society is covered by the definition of ‘workman’
within the meaning of the Industrial Disputes Act, 1947 and claims a relief
of reinstatement, in that event the Cooperative Court will not have
jurisdiction to entertain such a claim, inasmuch as, relief of
reinstatement cannot be granted by the Cooperative Court. Such a relief
can only be granted by the Labour Court or the Industrial Tribunal
constituted under the Industrial Disputes Act having regard to the fact
that special and complete machinery for this purpose is provided under the
provisions of the Industrial Disputes Act, the jurisdiction of the Civil
Court stands ousted. This is so held by this Court consistently in a
number of judgments[2]. These observations are made on the premise that
even if it is accepted that the Cooperative Court established under the Act
is a substitute of a Civil Court, the jurisdiction of the Civil Court to
grant relief would not go beyond the jurisdiction which has been vested in
the Civil Court. When admittedly the Civil Court does not have
jurisdiction to grant any such relief and its jurisdiction is barred in
view of the law laid down in the aforesaid judgment, as a fortiorari, the
jurisdiction of the Cooperative Court shall also stand barred. We may also
clarify one more aspect. Contract of personal services is not enforceable
under the common law. Section 14, read with Section 41(e) of the Specific
Relief Act, 1963, specifically bars the enforcement of such a contract. It
is for this reason the principle of law which is well established is that
the Civil Court does not have the jurisdiction to grant relief of
reinstatement as giving of such relief would amount to enforcing the
contract of personal services. However, as laid down in the cases referred
to above, and also in Executive Committee of Vaish Degree College, Shamli &
Ors. v. Lakshmi Narain & Ors.[3], there are three exceptions to the
aforesaid rule where the contract of personal services can be enforced:
(a) in the case of a public servant who has been dismissed from service
in contravention of Article 311 of the Constitution of India;
(b) in the case of an employee who could be reinstated in an industrial
adjudication by the Labour Court or an Industrial Tribunal; and
(c) in the case of a statutory body, its employee could be reinstated
when it has acted in breach of the mandatory obligations imposed by the
statute.

Even when the employees falling under any of the aforesaid three categories
raise dispute qua their termination, the Civil Court is not empowered to
grant reinstatement and the remedy would be, in the first two categories,
by way of writ petition under Article 226 of the Constitution or the
Administrative Tribunal Act, as the case may be, and in the third category,
it would be under the Industrial Disputes Act. An employee who does not
fall in any of the aforesaid exceptions cannot claim reinstatement. His
only remedy is to file a suit in the Civil Court seeking declaration that
termination was wrongful and claim damages for such wrongful termination of
services. Admittedly, the appellant Corporation is not a ‘State’ under
Article 12 of the Constitution. The respondent also cannot be treated as a
Government/public servant as he was not under the employment of any
Government. He was also not ‘workman’ under the Industrial Disputes Act as
he was working as Manager with the appellant Corporation.

In the aforesaid conspectus, we have to examine as to whether this power
which is available with the Civil Court to grant damages is now given to
the Cooperative Court under Section 91 of the Act. We may also mention at
this stage that some of the States have statutes which contain provisions
regarding management and regulations of the cooperative society, where
specific machinery under these State Cooperative Societies Acts is provided
for resolution of employment disputes as well, between the cooperative
societies and its employees, that too by excluding the applicability of
labour laws. No doubt, in such cases, the disputes between the cooperative
societies and it employees, including the workmen, would be dealt with by
such machinery and the general Act, like the Industrial Disputes Act, would
not be applicable (See Ghaziabad Zila Sahkari Bank Ltd. v. Addl. Labour
Commissioner & Ors.[4] and Dharappa v. Bijapur Coop. Milk Producers
Societies Union Ltd.[5]). Pertinently, in the instant case, Section 91
specifically excludes the disputes between the cooperative society as
employer and its ‘workmen’. Ultimately, the outcome depends upon the
powers that are given to the Cooperative Court or the stipulated tribunal
created under such Acts. It is in this hue we have to find out as to
whether Section 91 of the Act at hand empowers Cooperative Courts to decide
such disputes.

A reading of the provisions of Section 91 would show that there are two
essential requirements for conferment of exclusive jurisdiction on the
Cooperative Court which need to be satisfied:
(i) the first requirement is that disputes should be ‘disputes touching’
the constitution of the society or elections or committee or its officers
or conduct of general meetings or management of society, or business of the
society; and
(ii) the second requirement is that such a dispute is to be referred to
the Cooperative Court by ‘enumerated persons’ as specified under sub-
section (1) of Section 91.

When we read the provision in the aforesaid manner, we arrive at a firm
conclusion that service dispute between the employees of such cooperative
society and the management of the society are not covered by the aforesaid
provision. The context in which the word ‘officers’ is used is altogether
different, namely, election of the committee or its officers. Thus, the
word ‘officers’ has reference to elections. It is in the same hue
expression ‘officer’ occurs second time as well.

It was, however, argued by the learned counsel for the respondent that
disputes touching the ‘management or business of a society’ would include
the dispute between the management of the society and its employees.

There are plethora of judgments of this Court holding that the expression
‘business of the society’ would not cover the service matters of employer
and employee. In Deccan Merchants Coop. Bank Ltd. v. Dalichand Jugraj
Jain[6], this Court interpreted somewhat similar clause and held that it
covered five kinds of disputes. It becomes clear from the following
discussion:
“Five kinds of disputes are mentioned in sub-section: 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; fourthly, disputes touching the
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 its bye-laws.”

Likewise, in Coop. Central Bank Ltd. v. Addl. Industrial Tribunal[7],
the Court held that the expression ‘touching the business of the society’
would not cover the disputes pertaining to alteration of conditions of
service of workman.
These judgments were taken note of in Morinda Coop. Sugar Mills Ltd.
v. Morinda Coop. Sugar Mills Workers’ Union[8], where scope of Section 55
of the Punjab Cooperative Societies Act, 1961 came up for consideration.
That section provided for reference of dispute to arbitration ‘if any
dispute touching the constitution, management or the business of a
cooperative society arises’. Following the aforesaid judgments, the Court
gave limited meaning to the aforesaid expression and held that the suit
filed by the Workers’ Union of the cooperative society claiming dearness
allowance on the wages plus fixed allowance in accordance with the Third
Wage Board Report was maintainable in the Civil Court, and such a dispute
was not covered by the provisions of Section 55 of the Punjab Cooperative
Societies Act, 1961.
The reading of the aforesaid judgments make it crystal clear that
dispute of this nature does not come within the scope of ‘business of the
society’.

We now advert to the question as to whether such a dispute can be treated
as dispute relating to ‘management of the society’. On this aspect as
well, there is a direct judgment of this Court in Gujarat State Cooperative
Land Development Bank Ltd. v. P.R. Mankad & Ors.[9] wherein the expression
‘management of the society’ was assigned the following meaning:
“35. We will now focus attention on the expression “management of the
Society” used in Section 96(1) of the Act of 1961. Grammatically, one
meaning of the term ‘management’ is: “the Board of Directors’ or “the apex
body” or “Executive Committee at the helm which guides, regulates,
supervises, directs and controls the affairs of the Society”. In this sense
it may not include the individuals who under the overall control of that
governing body or Committee, run the day-to-day business of the Society,
(see Words and Phrases, by West Publishing Co., Permanent Edn., Vol. 26, p.
357, citing Warner and Swasey Co. v. Rusterholz D.C. Minn [41 F Supp 398,
505] . Another meaning of the term “management”, may be: ‘the act or acts
of managing or governing by direction, guidance, superintendence,
regulation and control, the affairs of a Society’.

36. A still wider meaning of the term which will encompass the entire
staff of servants and workmen of the Society, has been canvassed for by Mr
Dholakia. The use of the term “management” in such a wide sense in Section
96(1) appears to us, to be very doubtful.”

It, thus, clearly follows that the dispute raised by the respondent
is not covered within the meaning of Section 91 of the Act and, therefore,
the Cooperative Court does not have the jurisdiction to entertain the claim
filed by the respondent.

The learned counsel for the respondent referred to the judgment of this
Court in the case of R.C. Tiwari v. M.P. State Cooperative Marketing
Federation Ltd. & Ors.[10]. However, a close scrutiny of the said judgment
would reveal that the power of the Registrar to deal with the dispute of
dismissal from service of the employee was recognised having regard to
Section 55 of the M.P. Cooperative Societies Act, 1960 which gave specific
power to the Registrar to determine conditions of employment in societies,
including deciding the disputes regarding terms of employment, working
conditions and disciplinary actions taken by the society arising between
the society and its employees. Therefore, that judgment would be of no
help to the respondent.

It may be noted that the High Court, in the impugned judgment, has itself
proceeded on the basis that if the dispute relates to reinstatement, the
Cooperative Court will not have any jurisdiction. The main reason for
conferring jurisdiction upon the Cooperative Court in the instant case is
that the Cooperative Court has replaced the Civil Court and, therefore,
powers of the Civil Court are given to the Cooperative Court. However, the
High Court erred in not further analysing the provisions of Section 91 of
the Act which spells out the specific powers that are given to the
Cooperative Court and those powers are of limited nature. Our aforesaid
analysis leads to the conclusion that the disputes between the cooperative
society and its employees are not covered by the said provision. We may
hasten to add that if the provision is couched in a language to include
such disputes (and we find such provisions in the Cooperative Societies
Acts of certain States) and it is found that the Cooperative Society Act
provides for complete machinery of redressal of grievances of the
employees, then even the jurisdiction of the Labour Court/ Industrial
Tribunal under the Industrial Disputes Act shall be barred having regard to
the provisions of such a special statute vis-a-vis general statute like the
Industrial Disputes Act {See – Ghaziabad Zila Sahkari Bank Ltd.[11]}.

In Gujarat State Co-operative Land Development Bank Ltd. v. P.R. Mankad &
Ors.[12], an employee working as Additional Supervisor was removed from
service by giving one month’s pay in lieu of Notice under the Staff
Regulations. He had issued a notice under the Bombay Industrial Relations
Act, 1946, as he was an employee as defined under section 2(13) of the said
Act. One of the questions that was considered by this Court was whether a
dispute raised by the said employee for setting aside his removal from
service on the ground that it was an act of victimization and for
reinstatement in service with back wages was one ‘touching the management
or business of the society’, within the contemplation of the Co-operative
Societies Act. This Court held that the expression ‘any dispute’ referred
to in section 96 of the Gujarat Co-operative Societies Act, 1961 did not
cover a dispute of the kind raised by the respondent employee against the
bank.

As a result, this appeal is allowed, the order of the High Court is set
aside and the Division Bench judgment, on which reliance is placed by the
High Court in the impugned judgment, is overruled. As a consequence, it is
held that the petition filed by the respondent before the Cooperative Court
is not maintainable. It would, however, be open to the respondent to file
a civil suit. Needless to mention, in such a civil suit filed by the
respondent, he would be at liberty to file application under Section 14 of
the Limitation Act, 1963 in order to save the limitation.
No costs.
………………………………………J.
(A.K. SIKRI)
………………………………………J.
(R.K. AGRAWAL)
NEW DELHI;
MARCH 30, 2017.
———————–
[1]
1998 (3) Mh.L.J. 214
[2] Uttar Pradesh Warehousing Corporation Ltd. v. Chandra Kiran Tyage,
1970 1 LLJ 32; Dr. S.B. Dutta v. University of Delhi, 1959 SCR 1236 and
S.R. Tewari v. District Board, Agra 1964 1 LLJ 1
[3] (1976) 2 SCC 58
[4] (2007) 11 SCC 756
[5] (2007) 9 SCC 109
[6] (1969) 1 SCR 887
[7] (1969) 2 SCC 43
[8] (2006) 6 SCC 80
[9] (1979) 3 SCC 123
[10] (1997) 5 SCC 125
[11] Refer Footnote 4
[12] (1979) 3 SCC 123