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Chander Nagar Co-Operative House Building Society Ltd. And Another v. Ashok Ohri .
Factual and Procedural Background
The plaintiff, a member of the Chander Nagar Co-operative House Building Society Limited, paid Rs. 12,000 for the allotment of a plot. The society, which has 126 plots, issued a circular informing some members that plots would be allotted by draw of lots on January 4, 1974. The plaintiff did not receive this notice and challenged the society's right to allot plots by this method, alleging illegality in allotting plots to some members at one time and others later. He filed suit in January 1974 against the society and its secretary, seeking a permanent injunction to restrain them from allotting plots in an illegal and arbitrary manner. The society contested the suit on the ground that the Civil Court lacked jurisdiction. The trial judge framed a preliminary issue on jurisdiction and held that the suit was maintainable and the court had jurisdiction. The society filed a revision against this order dated 19-8-1974.
Legal Issues Presented
- Whether the Civil Court has jurisdiction to try the suit filed by the plaintiff against the co-operative society for alleged illegal allotment of plots.
- Whether the dispute raised by the plaintiff falls within the meaning of "disputes touching the constitution, management or the business of a co-operative society" as defined under Section 60 of the Delhi Co-operative Societies Act, 1972, thereby ousting the jurisdiction of the Civil Court.
- Whether the definition of disputes under Section 60(2) is exhaustive or merely illustrative for determining jurisdiction.
Arguments of the Parties
Petitioner's Arguments
- Sub-section (2) of Section 60 is merely illustrative, so the phrase "touching the constitution, management or the business of a co-operative society" should be read without limitation.
- The definition of disputes should not be confined only to those listed in sub-section (2), allowing the Civil Court jurisdiction in this matter.
Court's Counter-Analysis (Implicit Opposition to Petitioner's Argument)
- The definition in sub-section (2) is exhaustive, not illustrative, as indicated by the legislature’s use of the words "shall be deemed to be disputes."
- No words like "also" or "include" are used to expand the scope beyond the listed disputes.
- The exclusion of Civil Court jurisdiction must be strictly construed and only applies to disputes explicitly enumerated in sub-section (2) involving the parties mentioned in sub-section (1).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Nayagarh Co-operative Central Bank Ltd. v. Shri Narayana Rath (1975) 2 SCC 445 | Clarification that disputes touching the constitution, management or business of a co-operative society must involve parties as specified in Section 60(1). | Used to emphasize the necessity of both the nature of dispute and parties involved to determine jurisdiction. |
| Abdul Waheed Khan v. Bhawani, AIR 1966 SC 1718 | Principle that clauses ousting civil court jurisdiction must be strictly construed. | Supported the strict construction of Section 60 to preserve Civil Court jurisdiction unless clearly excluded. |
| Secretary of State v. Mask and Co., AIR 1940 PC 105 | Exclusion of jurisdiction of civil courts must be explicit or clearly implied. | Reinforced the presumption in favor of Civil Court jurisdiction and the need for clear words to exclude it. |
| Magiti Sasamal v. Pandab Bissoi, AIR 1962 SC 547 | Subject's access to courts for determination of rights is not to be excluded except by clear words. | Used to affirm that jurisdictional exclusion must be explicit and not inferred. |
Court's Reasoning and Analysis
The court analyzed the jurisdictional bar under Section 60 of the Delhi Co-operative Societies Act, 1972, which mandates that disputes touching the constitution, management, or business of a co-operative society must be referred to the Registrar and bars Civil Court jurisdiction. The court identified two key conditions for this bar to apply: (1) the nature of the dispute must fall within the categories enumerated in sub-section (2), and (2) the parties must be among those listed in sub-section (1).
The plaintiff, being a member suing the society, falls within the class of parties under sub-section (1)(b). However, the court found that the dispute raised by the plaintiff—challenging the legality of the allotment method—does not correspond to any of the disputes enumerated in sub-section (2), which the legislature has expressly declared as exhaustive. The court rejected the petitioner’s argument that the list in sub-section (2) is merely illustrative, emphasizing the legislature’s clear wording that these "shall be deemed to be disputes" touching the constitution, management or business of the society.
Applying the principle of strict construction for jurisdiction ousting clauses, the court held that the Civil Court's jurisdiction is only excluded where the dispute fits within the explicit categories. Since the plaintiff’s dispute does not fall within these categories, the Civil Court retains jurisdiction. The court therefore endorsed the trial judge’s decision to maintain the suit and dismissed the revision.
Holding and Implications
Revision dismissed.
The court held that the Civil Court has jurisdiction to entertain the suit brought by the plaintiff against the co-operative society because the dispute does not fall within the exhaustive list of disputes under Section 60(2) of the Delhi Co-operative Societies Act, 1972, which ousts Civil Court jurisdiction. The decision directly affects the parties by allowing the plaintiff’s suit to proceed in the Civil Court. No new precedent was established beyond affirming the strict and exhaustive interpretation of Section 60’s jurisdictional bar.
This is a revision against the order of the subordinate judge dated 19-8-1974.
2. The facts are these. The plaintiff claims to be a member of Chander Nagar Co-operative House Building Society Limited. He has paid them Rupees 12,000/- for allotment of a plot to him.
3. The society has 126 plots in number. They have to be allotted to 126 members. The society issued a circular to some members of the society and they were informed that plots will be allotted to them by draw of lots on January 4, 1974. Apparently the plaintiff did not receive any such notice from the society. Therefore he said that the society has no right to issue such a circular or to allot the plots by draw of lots. He came to know of the circular before the institution of the suit and protested that this manner of allotment of plots to some members at one time and to others later is illegal.
4. The plaintiff therefore brought a suit in January 1974 making these allegations against the society and its secretary. He called their action as illegal. He sought a permanent injunction restraining them from allotting the plots of the society in an ‘illegal and arbitrary manner’.
5. The society opposed the suit. It was said that the Civil Court had no jurisdiction to try the suit. The trial Judge framed a preliminary issue: Whether the court has no jurisdiction to try the suit? The finding of the subordinate Judge on this issue was that the suit was maintainable and the court has jurisdiction to try the suit. This was her decision. Against this order the society has come in revision.
6. Section 60 of Delhi Co-operative Societies Act 1972 (Act 35 of 1972) in so far as it is material reads: “(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society arises-
(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 employee of the society or liquidator, past or present, or
(c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or
(d) between the society and any other co-operative society, between a society and liquidator of another society or between the liquidator of one society and the liquidator of another society, such disputes 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.
(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society, namely:—
(a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of any officer of a society other than a society mentioned in sub-section (1) of Section 31.
(3) If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court.”
7. This section provides that certain disputes such as are mentioned in the section shall be referred to, the Registrar for his decision and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
8. In order to decide whether a suit is barred by reason of Section 60 it is necessary to determine at the very outset two things. Firstly, it has to be seen who are the parties to the dispute. Secondly the nature of the dispute must be ascertained. Section 60 (1) provides that if the dispute is amongst the classes of persons as are mentioned in (a) to (d) it will be decided by the Registrar. The plaintiff claims to be a member of the society. He has brought a suit against the society. Therefore, his case would fall under Section 60 (1) (b).
9. The second question is whether the dispute raised by the plaintiff in the plaint is a dispute such as is outside the jurisdiction of the civil Courts. The relevant words used in the section are
“any dispute touching the constitution, management or the business of a co-operative society other than a dispute regarding disciplinary action taken by the society or by its committee against the paid employees of the society.”
10. The sole question for determination is whether the dispute raised by the plaintiff is one touching the constitution, management or the business of the society. What is a dispute touching the constitution, management or business of a co-operative society is defined in sub-section (2) of Section 60.
11. If it is a dispute touching the constitution, management or the business of a co-operative society the dispute shall be referred to the Registrar for decision and “no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.”
12. Sub-section (3) says that: “if any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or business of a co-operative society, the decision thereon on of the Registrar shall be final and shall not be called in question in any court.”
13. The word “referred” is important. But before a matter is referred two conditions have to be satisfied:
(1) That the dispute must be one touching the constitution, management or business of a society other than a dispute regarding disciplinary action taken by the society against a paid servant; and
(2) That the dispute must be one involving parties who are among those mentioned in the section: (See Nayagarh Co-operative Central Bank Ltd. v. Shri Narayana Rath, (1975) 2 SCC 445 : (AIR 1975 SC 1895).
14. It is not disputed that the plaintiff's suit does not fall within any of the three categories mentioned in clauses (a) to (c) of sub-section (2).
15. The counsel for the petitioner submits that sub-section (2) is merely illustrative and in order to determine whether the dispute can be entertained by a Civil Court we have only to look to the opening words of the section, namely, “touching the constitution, management or the business of a co-operative society” where no such limitation has been placed. In other words his submission is that the definition given in sub-section (2) is not exhaustive. I do not agree. In my opinion the definition given in sub-section (2) is not illustrative. It is exhaustive.
16. The legislature has used the words “the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society.” I underline and emphasise the words “shall be deemed to be disputes”. The legislature has left us in no doubt that these are the only disputes which can be said to be touching the constitution, management or the business of a co-operative society. The legislature has not used the word ‘also’. Nor does the legislature say “shall be deemed to include”. Without reading these two words ‘also’ or ‘include’ into the section the counsel for the society cannot build an acceptable argument.
17. It is a settled principle of statutory construction that no words can be added to the section. The section must be construed according to its plain meaning without any addition or substitution. To me it appears that the generality of the words ‘touching the constitution, management or the business’ has been severely cut down by the legislature by setting out in sub-section (2) the nature of the disputes which will fall within these three expressions. The width and the ambit of these three expressions is now limited by what the legislature has said in sub-section (2), 1 cannot therefore, accept the reasoning that the words ‘touching the constitution, management or the business’ are without limitation.
18. It is well settled that a clause which takes away the jurisdiction of civil court. must be strictly construed (See Abdul Waheed Khan v. Bhawani, AIR 1966 SC 1718). Every presumption should be made in favour of the jurisdiction of a civil court. In other words, the exclusion of jurisdiction of civil courts is not to be readily inferred, such exclusion must be either explicitly expressed or clearly implied. (See Secretary of State v. Mask and Co., AIR 1940 PC 105) and (Magiti Sasamal v. Pandab Bissoi, AIR 1962 SC 547). The subject's recourse to the courts for the determination of his rights is not to be excluded except by clear words.
19. Applying this rule of construction it must be held that the legislature has ousted the jurisdiction of the Civil Courts only in respect of disputes which are specified in sub-section (2) and to which the parties must be such as are mentioned in sub-section (1).
20. For these reasons I endorse the decision of the trial Judge. I dismiss the revision. There will however be no order as to costs.
Revision dismissed.
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