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Gujarat State Co-Ope... v. Labour Court, Rajkot...
Factual and Procedural Background
The judgment arises from three Special Civil Applications brought to challenge labour‑court decisions concerning disputes between co‑operative societies and their servants.
(1) In Special Civil Application No. 585 of 1963 respondent 2, an additional supervisor in the Dasada branch of the Gujarat State Co‑operative Land Mortgage Bank Ltd., alleged dismissal by way of victimization for trade‑union activities and lack of a reasonable opportunity to be heard. Respondent 2 wrote an approach letter which was refused and then applied to the labour court under the Bombay Industrial Relations Act seeking quashing of the dismissal, reinstatement and back wages. The petitioner‑society contended the labour court lacked jurisdiction because the dispute fell within S.96 of the Gujarat Co‑operative Societies Act (vesting jurisdiction in the Registrar).
(2) In Special Civil Application No. 640 of 1963 the Jodiya Sarvodaya Motor Vahan Vyavahar Sahakari Mandali, Ltd., closed its business and former employees claimed retrenchment compensation and notice‑pay under the Industrial Disputes Act. The petitioner argued that S.96 of the Gujarat Co‑operative Societies Act barred labour‑court jurisdiction. The labour court held it had jurisdiction, relying in part on S.25J(2) of the Industrial Disputes Act.
(3) Special Civil Application No. 1144 of 1966 involved the same society and similar retrenchment‑compensation claims; the labour court again ruled against the petitioner and its jurisdiction was challenged on the same S.96 ground.
Legal Issues Presented
- Whether S.96 of the Gujarat Co‑operative Societies Act bars the jurisdiction of the labour court to hear and decide disputes (including dismissals, retrenchment and related claims) between a co‑operative society and its servants.
- Whether disputes of the nature claimed by employees of co‑operative societies are "industrial disputes" falling under special industrial legislation (the Industrial Disputes Act or the Bombay Industrial Relations Act), and thus within the exclusive competence of industrial tribunals/labour courts rather than the Registrar under the Co‑operative Societies Act.
- Whether, in respect of lay‑off and retrenchment rights, the Central Industrial Disputes Act (and specifically S.25J(2)) prevails over state co‑operative statutes to vest jurisdiction and determine rights under the Industrial Disputes Act.
Arguments of the Parties
Petitioners' Arguments
- S.96 of the Gujarat Co‑operative Societies Act vests jurisdiction in the Registrar of Co‑operative Societies to decide "any dispute touching the constitution, management or business of a society," and thereby excludes labour‑court jurisdiction in disputes between a society and its servants.
- By reason of S.96's wide language, including the prefatory "Notwithstanding anything contained in any other law for the time being in force", the legislature intended to resolve any uncertainty and to make the Registrar the forum for such disputes.
- In the case of Special Civil Application No. 585 of 1963 it was additionally argued that the dismissal occurred before the Gujarat Act applied (i.e., under the earlier law) so the earlier statutory regime should govern (a timing/transition argument).
- In the retrenchment matters (Special Civil Applications Nos. 640 of 1963 and 1144 of 1966) the petitioners asserted that S.96 removed labour‑court jurisdiction to entertain claims that, they said, fell within disputes for the Registrar to decide.
Respondents' / Labour‑Court Position
- Respondent 2 (in S.C.A. No. 585 of 1963) contended dismissal resulted from victimization for trade‑union activity and denial of a hearing; he applied to the labour court under the Bombay Industrial Relations Act seeking quashing of the order, reinstatement and back wages.
- The labour court held (and respondents supported) that disputes of an industrial character (including claims of unfair dismissal, retrenchment compensation, notice pay and related industrial matters) fall within the special industrial legislation and thus are within the jurisdiction of labour courts or industrial tribunals.
- In the retrenchment cases the labour court relied on S.25J(2) of the Industrial Disputes Act to hold that the Central Act determines rights and liabilities relating to lay‑off and retrenchment and thus prevails over conflicting provisions of state co‑operative legislation.
- Representations were made (by counsel such as Sri Majumdar for respondent 2) emphasizing the procedural facts (dates of dismissal and dates of application of the Gujarat Act) where relevant, while the labour court maintained jurisdiction in the particular industrial claims.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| G. I. P. Railway Employees' Co‑operative Bank Ltd. v. Bhikhaji Nerwanji Karanjia [A.I.R. 1943 Bom. 341] | Interprets "touching the business of a society" broadly to include matters such as employment and dismissal; disputes between a society and its servants fall within co‑operative dispute provisions unless excluded. | Quoted for the broad construction of "touching the business of a society". The court considered this authority but distinguished industrial disputes as a separate class not intended to be governed by S.96. |
| Madhava Rao v. Surya Rao [A.I.R. 1954 Mad. 103] | Holds "touching the business of a society" must be given full import; dispute need not directly arise from business but can have reference or relation to it. | Adopted to support the wide meaning of "touching the business," but the court used it to frame the issue before concluding that industrial disputes remain outside that category for purposes of S.96. |
| Farkhundali Nannhay v. V. B. Potdar [1962 - I L.L.J. 51] | Approves broad view in G.I.P. Railway case concerning "touching the business of a society." | Used to reinforce the accepted wide construction of "business," while the court nonetheless maintained that industrial disputes are of a different nature and not to be adjudicated under co‑operative dispute provisions. |
| Rambhau Jairam Dhamange v. Vinkur Co‑operative Society, Ltd., and others [1966 - I L.L.J. 90] | Describes distinguishing characteristics of industrial tribunals (not fettered by contract; power to modify/create obligations; decide what is just and fair) and contrasts industrial arbitration with civil adjudication. | Cited to demonstrate that industrial adjudication is sui generis; the court relied on these characteristics to conclude S.96 (and similar co‑operative provisions) does not encompass industrial disputes. |
| Rohtas Industries Ltd. v. Brijnandan Pandey [1956 - II L.L.J. 444] (Supreme Court) | Supports the proposition that industrial arbitration can create new obligations and differs fundamentally from commercial/commercial arbitration or civil adjudication. | Used as an authoritative illustration of how industrial tribunals operate differently from civil courts and thereby to justify excluding industrial disputes from S.96 jurisdiction. |
| Western India Automobile Association v. Industrial Tribunal, Bombay [1949 L.L.J. 245] | Illustrates that industrial tribunals can order reinstatement of dismissed employees — a remedy not available to civil courts. | Relied upon to show the remedial powers of industrial tribunals and the incompatibility of such remedies with the ordinary co‑operative dispute procedure under S.96. |
| Majoor Sahkari Bank, Ltd. v. M. N. Majumdar [1955 - II L.L.J. 755] | Observes that disputes contemplated by co‑operative dispute provisions (e.g., S.54) are of a civil nature and could have been decided by civil courts but for compulsory arbitration. | Quoted to support the conclusion that co‑operative dispute machinery is intended for civil‑type disputes and not for industrial adjudication. |
| Jullundur T. C. Society v. Punjab State [A.I.R. 1959 Pun. 34] | Holds that disputes contemplated by co‑operative statute were not meant to include industrial disputes; proviso indicates only disputes triable by ordinary suits were intended to be covered. | Adopted as persuasive authority that co‑operative arbitration provisions were not intended to supplant industrial adjudication under the Industrial Disputes Act. |
| Kerala State Handloom Weavers' Co‑operative Society v. State of Kerala [1964 - I L.L.J. 559] | Holds co‑operative dispute provisions do not preclude reference under Industrial Disputes Act; co‑operative arbitration is an alternative to ordinary courts but not to industrial adjudication. | Invoked to support the view that industrial disputes between a co‑operative society and its workmen fall to be adjudicated under the Industrial Disputes Act rather than under co‑operative dispute provisions. |
| A.I.R. 1923 Mad. 481 (unnamed case cited) | Interpreted "business" in co‑operative context widely and refused narrowly confined constructions. | Used as historical support for the wide meaning of "business" in co‑operative statutes, though the court retained its distinction between ordinary disputes and industrial disputes. |
Court's Reasoning and Analysis
The court conducted a textual and functional analysis to decide whether S.96 of the Gujarat Co‑operative Societies Act removes labour‑court jurisdiction over disputes that are industrial in character. The reasoning proceeded in several linked steps:
- Distinction between ordinary "dispute" and "industrial dispute": The court emphasized that the ordinary concept of a dispute (as contemplated in co‑operative statutes) relates to civil or private rights and obligations triable in ordinary courts, whereas "industrial dispute" under industrial legislation has a distinctive legal character and statutory meaning that departs from ordinary civil concepts.
- Nature of industrial adjudication: Drawing on authorities (notably Rambhau Jairam Dhamange and Rohtas Industries), the court explained that industrial tribunals are empowered to modify contracts, create new obligations, and impose remedies (such as reinstatement or statutory compensations) that a civil court or an adjudicator under co‑operative law could not grant. This functional difference identified industrial adjudication as sui generis and outside the ordinary civil adjudicatory framework.
- Construction of S.96: Although S.96 uses wide language ("any dispute") and contains a non‑obstante clause ("Notwithstanding anything contained in any other law for the time being in force"), the court held these features cannot be read as obliterating the clear statutory scheme of industrial law. A non‑obstante clause cannot confer jurisdiction where none exists; the disputed matter must first fall within the type of dispute the Registrar is competent to decide. Hence, the words "any dispute" must be read as limited to disputes of the nature contemplated by the co‑operative statute (i.e., matters amenable to ordinary civil adjudication).
- Statutory indicators in the Gujarat Act: The court relied on S.98(3) of the Gujarat Co‑operative Societies Act (which permits the Registrar to suspend proceedings where the question involves complicated law or fact until tried by a regular suit) and on S.166 (which bars civil or revenue courts from matters required to be referred to the Registrar). These provisions suggested that the co‑operative dispute machinery was meant to cover disputes triable by ordinary suits and not to intrude upon the industrial adjudicatory field.
- Precedent support and limitation: The court surveyed decisions (Bombay, Madras, Kerala, Punjab authorities) that had construed "touching the business" broadly. While accepting the wide meaning in the abstract, the court read those authorities as consistent with the conclusion that disputes of an industrial nature — because of their special statutory regime and remedies — were not intended to be subsumed by co‑operative dispute provisions.
- Central legislation supremacy for lay‑off/retrenchment: For the retrenchment cases, the labour court relied on S.25J(2) of the Industrial Disputes Act, which declares that rights and liabilities relating to lay‑off and retrenchment are to be determined in accordance with that chapter of the Act. The High Court accepted this reasoning: insofar as the Central Act prescribes rights/remedies for lay‑off/retrenchment, it governs and displaces conflicting state co‑operative provisions.
- Application to the three petitions: Applying these principles, the court found that the disputes in question were industrial in nature or, at least for retrenchment/lay‑off claims, governed by the Industrial Disputes Act / Bombay Industrial Relations Act such that the labour court properly asserted jurisdiction. The petitioners' contention that S.96 ousted labour court jurisdiction was rejected.
Holding and Implications
Holding:
All three petitions are dismissed. The rule granted in each petition is discharged.
Implications (consequences and legal effect):
- The court held that S.96 of the Gujarat Co‑operative Societies Act does not bar the labour court or industrial tribunal from adjudicating industrial disputes between a co‑operative society and its servants. In other words, industrial disputes retain their special statutory character and must be adjudicated under the industrial legislation, not by the Registrar under the co‑operative statute.
- Where claims concern lay‑off, retrenchment or other matters specifically covered by the Industrial Disputes Act, S.25J(2) operates to determine rights and liabilities in accordance with the Central Act; thus the Central industrial law will prevail over conflicting state co‑operative provisions for such matters.
- The decision clarifies that while co‑operative statutes give the Registrar jurisdiction over many disputes "touching the business" of a society, that jurisdiction is intended to be coextensive with what a civil court would adjudicate. It does not extend to industrial disputes that require the special processes and remedies provided by industrial law.
- Practical outcome in these cases: the labour court correctly retained jurisdiction and the petitions challenging that jurisdiction were dismissed. Costs were ordered: the petitioner in S.C.A. No. 585 of 1963 to pay costs of respondent 2; the petitioner in S.C.A. No. 640 of 1963 to pay costs of respondent 2 and respondents 3 to 33.
- No novel precedent altering the scope of industrial law was laid down; the Court primarily applied and reconciled existing jurisprudence and statutory interpretation to confirm that industrial adjudicatory mechanisms govern industrial disputes even when they arise with co‑operative societies.
This summary is compiled solely from the provided judgment text. No facts, arguments or authorities beyond those contained in the excerpt were added.
JUDGMENT Bakshi, J.
1. These three petitions raise a question of importance as regards the jurisdiction of the Court dealing with industrial disputes to decide a dispute which arises between a co-operative society registered under the Co-operative Societies Act and a servant of such society. In Special Civil Application No. 585 of 1963, respondent 2 was working as an additional supervisor in the Dasada branch of the petitioner who is the Gujarat State Co-operative Land Mortgage Bank, Ltd. The services of respondent 2 were terminated by the petitioner and it was the case of respondent 2 that his services were terminated by way of victimization on account of his trade union activities. His case was also that he was not given a reasonable opportunity to be heard before the order terminating his services was passed. For these grievances, respondent 2 had written an approach letter on 20 August, 1962 but his request was turned down. He, therefore, made an application to the labour court for quashing the order terminating his services and to reinstate him in the pay-scale to which he would be entitled had his service not been terminated. He also prayed that the petitioner be ordered to pay to him the back-wages from the date his services were terminated to the date of his reinstatement. In these proceedings before the labour court, one of the contentions that was raised by the petitioner-society was that the Bombay Industrial Relations Act under which the application was made by respondent 2 was not applicable to the case of the petitioner which was a co-operative society registered under the Gujarat Co-operative Societies Act and that, therefore, the labour court had no jurisdiction to entertain and hear the application of respondent 2. The labour court at Rajkot, by its decision, dated 11 June, 1963, decided this issue against the petitioner and he that the Bombay Industrial Relations Act would apply to the case of the petitioner and that, therefore, the labour court had jurisdiction to hear and proceed with the application of respondent 2. The petitioner-society challenges this order of the labour court and Sri Nanavati appearing on behalf of the petitioner has contended that by virtue of S. 96 of the Gujarat Co-operative Societies Act, 1961, the jurisdiction to entertain and decide a dispute arising between the society and its servant would vest in the Registrar of Co-operative Societies and the jurisdiction of the labour court to entertain and decide such a matter was barred. The second contention of Sri Nanavati was that respondent 2 was discharged from service by the petitioner-society on 21 February, 1962 and that the Bombay Industrial Relations Act was applied in March 1963 to the business of banking in the Saurashtra area and that therefore, the case would be governed by the provisions of the Co-operative Societies Act that was applicable on the date when the services of respondent 2 were terminated. But this contention could not be seriously pressed as the head an registered office of the bank was at Ahmedabad.
2. In Special Civil Application No. 640 of 1963, the petitioner, the Jodiya Sarvodaya Motor Vahan Vyavahar Sahakari Mandali, Ltd., is a society registered under the Bombay Co-operative Societies Act, 1925, and that society closed it business voluntarily. Applications were made by the respondents claiming that they were retrenched without being paid retrenchment compensation or notice-pay. The retrenchment compensation and the notice-pay were claimed under the relevant provisions of the Industrial Disputes Act, 1947. In these applications a contention was raised by the petitioner-company that by virtue of S. 96 of the Gujarat Co-operative Societies Act, 1961, the labour court would not have jurisdiction to entertain, hear and decide a dispute arising between the co-operative society and its servants. These applications that were filed under S. 33C(2) of the Industrial Disputes Act were consolidated and the labour court held that it had jurisdiction to hear and decide the applications in spite of the provisions of S. 96 of the Gujarat Co-operative Societies Act. One of the grounds that was adopted by the labour court was that the applications were under the Industrial Disputes Act and by virtue of S. 25J(2) of the Industrial Disputes Act, the provisions of that Act which was a Central Act would prevail over the provisions of the Co-operative Societies Act which was the Act of the State Legislature. This decision of the labour court was challenged by Sri Chhaya in Special Civil Application No. 640 of 1963.
3. Special Civil Application No. 1144 of 1966 is by the same society who is the petitioner in Special Civil Application No. 640 of 1963 against which several applications were given by the servants of the society for retrenchment compensation in the same circumstances that were present in the case of Special Civil Application No. 640 of 1963. The order that was passed by the labour court was against the petitioner and it has been challenged by Sri Chhaya on the same ground that the labour court had no jurisdiction to hear and decide the applications by virtue of S. 96 of the Gujarat Co-operative Societies Act.
4. The main controversy in these three petitions centres round the question whether S. 96 of the Gujarat Co-operative Societies Act bars the jurisdiction of the labour court in cases where disputes which could be called industrial disputes arise between a co-operative Societies and its servants. Before the application of the Gujarat Co-operative Societies Act, 1961, the Bombay Co-operative Societies Act, 1925, was in force. The relevant section as regards the reference of disputes in the latter Act was S. 54 which reads as under :
"(1)(a) If any dispute touching the constitution or business of society arises between members or past members of the society or persons claiming through a member or a past member or between members of past members or persons so claiming and any officer, agent or servant of the society past or present or between the society or its committee, and any officer, agent, member or servant of the society past or present, it shall be referred to the Registrar for decision by himself or his nominee.
A dispute shall include claims by a society for debts or demand due to it from a member or past member or the heirs or assets of a past member as well as claims by a member or past member or the heirs of a past member for any debts or demands due to him from the society, whether such debts or demands be admitted or not :
Provided that if the question at issue between a society and a claimant, or between different claimants, is one involving complicated questions of law and fact, the Registrar may, if he thinks fit, suspend proceedings in the matter until the question has been tried by a regular suit instituted by one of the parties or by the society. If no such suit is instituted within six months of the Registrar's order suspending proceedings the Registrar shall take action as laid down in Para. 1 of this section.
(b) Notwithstanding anything contained in clause (a). any dispute regarding the election of any officer-bearer of a society may, within one month from the date of declaration of the result of such election, be referred by any candidate at such election or any member of the society, to the Registrar for decision by himself or his nominee.
(2) Where any dispute is referred under Sub-section (1) for decision by the Registrar's nominees, the Registrar may, at any time for reasons to be recorded in writing withdraw such dispute from his nominee and may decide the dispute himself or refer it again to any other nominee appointed by him for decision :
Provided that no such dispute shall be withdrawn except on any of the following grounds :
(i) the Registrar's nominee has failed to decide the dispute within two months or such further period as may be allowed by the Registrar;
(ii) the proceedings before the Registrar's nominee are vitiated in consequence or corruption or misconduct on the part of the Registrar."
The corresponding section in the Gujarat Co-operative Societies Act, 1961, is S. 96 which provides as under :
"(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, management or business of a society shall be referred in the prescribed form either 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 Registrar, if the parties thereto are from amongst 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;
(b) a member, past member or a person claiming through a member, past member or a deceased member of a society or a society which is a member of the society;
(c) 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 transactions under the provisions of S. 46, and any person claiming through such a person;
(d) a surety of a member, past member or a deceased member, or a person other than a member who has been granted a loan by the society under S. 46 whether such a surety is or is not a member of the society;
(e) any other society, or the liquidator of such a society.
(2) When any question arises whether for the purposes of Sub-section (1) a matter referred to for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final.
Explanation I. - For the purposes of this sub-section, a dispute shall include -
(i) a claim by a society for any debt or demand due to it from a member, past member of the nominee, heir or legal representative of a deceased member whether such a debt or demand be admitted or not :
(ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a society and recovered from the surety owing to the default of the principal borrower, whether such a sum or demand be admitted or not;
(iii) a claim by a society for any loss caused to it by a member, past member or deceased member, by any officer, past officer or deceased officer, by any agent, past agent or deceased agent or by any servant past servant or deceased servant, or by its committee, past or present, whether such loss be admitted or not;
(iv) a refusal or failure by a member, a past member or a nominee, heir or legal representative or a deceased member, to deliver possession to a society of land or any other asset resumed by it for breach of conditions of the assignment.
Explanation II. - For the purposes of this section, the expression "agent" includes in the case of a housing society, an architect, engineer or contractor engaged by the society."
Section 97 of the Gujarat Co-operative Societies Act, 1961, prescribes the period of limitation in the case of a dispute preferred to the Registrar under S. 96, and S. 98 of the Act relates to settlement of disputes, which is as under :
(1) If the Registrar is satisfied that any matter referred to him is a dispute within the meaning of S. 96, the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominees, appointed by the registrar :
Provided that no person who is connected with a dispute or with the society at any stage or has previously inspected the society or audited its accounts shall be appointed as a nominee or as member of the board of nominees to settle the dispute.
(2) Where any dispute is referred under Sub-section (1) for decision to the Registrar's nominee or board of nominees, the Registrar may at any time, for reasons to be recorded in writing, withdraw such dispute from his nominee, or board of nominees, and may decide the dispute himself, or refer it again for decision to any other nominee, or board of nominees, appointed by him.
(3) Notwithstanding anything contained in S. 96 the Registrar may, if he thinks fit, suspend proceedings in regards to any dispute, if the question at issue between a society, and a claimant or between different claimants, is one involving complicated question of law or fact, until the question has been tried by a regular suit instituted by one of the parties or by the society. If any such suit is not instituted within two months from the Registrar's order suspending proceedings, the Registrar shall take action as is provided in Sub-section (1)."
5. It will be observed that the provisions of the Bombay Co-operative Societies Act, 1925, relating to the settlement of disputes and similar provisions in the Gujarat Co-operative Societies Act, 1961, are, in substance, the same except for the fact that in the Gujarat Act, the words "Notwithstanding anything contained in any other law for the time being in force" have been added in the beginning of the section and the word "management" has also been added in the category of disputes mentioned in S. 54 of the Bombay Co-operative Societies Act.
6. The contention advanced on behalf of the petitioners was that the Co-operative Societies Act was a legislation dealing with matters relating to co-operative societies and S. 96 of the Gujarat Co-operative Societies Act gave jurisdiction to the Registrar to deal with disputes touching the constitution, management or business of a society and that the dispute that arose between the parties in the petitions were disputes which related to business of the society and that, therefore, they would fall within the purview of S. 96. It was urged in the alternative on behalf of the petitioners that in case it was held that the disputes were such as did not touch the business of the society, in any event, they were disputes which related to and arose out of the management of the society and that, therefore, these disputes would fall within the purview of S. 96. It was also urged on behalf of the petitioners that whatever the doubt that existed before the application of the Gujarat Co-operative Societies Act as regards the applicability of the Bombay Co-operative Societies Act or the Bombay Industrial Relations Act to disputes of such nature the doubt has been resolved by the legislature by the addition of the words "Notwithstanding anything contained in any other law for the time being in force" in S. 96 of the Gujarat Co-operative Societies Act, 1961, and that, therefore, the jurisdiction to hear and decide such disputes would vest in the Registrar of the Co-operative Societies. As regards the contention that the disputed would fall under S. 96 on the ground that they related to the business of the society, reliance was placed on the case of G. I. P. Railway Employees' Co-operative Bank, Ltd. v. Bhikhaji Nerwanji Karanjia [A.I.R. 1943 Bom, 341]. The relevant observations in this case at p. 344 of the report are as under :
"It is argued that employing or dismissing servants does not touch any one of these objects. The petitioner-company undoubtedly has to carry them out through and it can only carry them out through the agency of various persons. In doing so, it has to employ servants; it has got to enter into contracts with servants; and it has to dismiss servants. It is, therefore, contended that if the grievance of a servant dismissed by the petitioner-company is that he was wrongfully dismissed or that he was entitled to damages, that is not a question which comes within the purview of S. 54 of the Bombay Co-operative Societies Act, because it does not touch the business of the petitioner-company.
I do not think that it would be right to give a restricted meaning to the words 'touching the business of a society' used by the legislature in S. 54 of the Act. The word 'business' is a very wide term and certainly it is not synonymous with the objects of a society. The expression 'touching the business of a society' would mean affecting the business of a society or relating to the business of a society; and, it cannot be said that when a company employs or dismisses a servant it does not do something which relates to its business. It is true that it is not one of the objects of the company to employ or dismiss servants; but it is something which it does in the ordinary course of its business. And whatever is done in the ordinary course of business certainly relates to or affects the business. The very fact that S. 54 refers to disputes between a society and its servants indicates that disputes of the nature raised by the respondent in this case should be decided by the Registrar of Co-operative Societies. It would be difficult otherwise to imagine what other kind of disputes there could be between the society and its servants which would form the proper subject-matter of a dispute within the meaning of S. 54, Bombay Co-operative Societies Act. Sri Daphtary has suggested that there may be cases where an officer of a bank does something which is contrary to the rules or where he is in possession of the funds of the company. But then that would narrow down the definition of the term 'servant' so as to include only high and important officials of the company and menial servants would not be included in that category at all. If there is no warrant for restricting the meaning of the word 'business' there is certainly less warrant for restricting the meaning of the word 'servant' used in S. 54, Bombay Co-operative Societies Act. In 47 All. 374 the word 'business' came in for judicial interpretation. In that case the election of the directors was challenged. The case was governed by the Co-operative Societies Act; but the rules made under s. 43 of that act were very similar to S. 54 which I have got to consider here; and, in their judgment Ryves and Daniels JJ., in considering the word 'business,' says (p. 376) :
'Having regard to the very wide form in which S. 43 and the rules made under it are couched, we think that the word 'business' was not intended to be understood in any such restricted sense.' The contention before them was that the word 'business' should be confined to money business of the society there such as the giving of loans to members and the settlement of money claims. That contention was rejected by the Court. In A.I.R. 1923 Mad. 481 the dispute arose between a member of a co-operative stores and the society with regard to sums of money entrusted to the former for purchase of certain articles, and the question that arose for determination was whether that particular dispute between the member and the society was a dispute touching the business of the society. The contention in that case was that these words only referred to disputes regarding the internal management of the affairs of a society or disputes in regards to the principles which would regulate the conduct of business. The learned Judge refused to accept that contention, and held that the words were quite general and it was not necessary to restrict their construction. Comparison of different statutes is not always a safe guide, but, we have a similar Act in Madras called the Madras Co-operative Societies Act (6 of 1932) and S. 51 of that Act deals with arbitration and is practically in terms similar to our S. 54. It is to be noticed that S. 51, Madras Co-operative Societies Act, expressly excludes from the application of the arbitration clause disputes regarding disciplinary action taken by the society or its committee against a paid servant of the society. Presumably but for this express exclusion such a dispute between the society and its paid servant would have been a dispute touching the business of the society,"
7. Reference was also made to the Full Bench case of Madhava Rao v. Surya Rao [A.I.R. 1954 Mad. 103], in which it was held that the words "touching the business of a society" must be given their full import, bearing in mind the object of the legislation and taking the dictionary meaning of the word "touching," it indicated that the dispute need not directly arise out of the business of the society, but it was enough that it should have reference or relation to or concern the business of the society. It was held in that case that the word "touching" was not intended to restrict the meaning of the word "business," but it was designed to enlarge its scope. Another case decided by the High Court of Bombay, to which reference was made on behalf of the petitioners was the Full Bench case of Farkhundali Nannhay v. V. B. Potdar [1962 - I L.L.J. 51] in which the case in A.I.R. 1943 Bom. 341 was approved.
8. The relevant observation are at p. 54 of the report :
"In Madhava Rao v. Surya Rao [ A.I.R. 1954 Mad. 1(3] (vide supra) a Full Bench of the Madras High Court has held that the words 'touching the business of a society' must be given their full import and that the dispute referred to in S. 51 of the Madras Co-operative Societies Act, need not directly arise out of the business of the society, but it is enough if it should have reference or relation to or concern with its business. The same view was taken by Chagla, J., as he then was, in G. I. P. Railway Employees' Co-operative Bank, Ltd. v. Bhikhaji Karanjia [ A.I.R. 1943 Bom. 341] in which is was observed that the expression 'touching the business of the society' in S. 54 of the Bombay Co-operative Societies Act is very wide and that it means 'affecting or relating to the business of the society.' With respect we agree with the view taken in these cases."
9. It was urged on behalf of the petitioners that there was nothing in the provisions of S. 96 of the Gujarat Co-operative Societies Act restricting its application to disputes which are not industrial disputes within the meaning of the Industrial Disputes Act or the Bombay Industrial Relations Act. It was contended that the words that were used in S. 96 were "any dispute" and due effect must be given to the word "any" occurring in the section before the word "dispute." It was contended that while construing and giving effect to a provision of law, no word used by the legislature should ordinarily be considered as surplusage and attempt should be made to give effect to every word used in a section. There is not dispute as regards the application of the canons of construction while interpreting and giving effect to the provisions of S. 96 of the Gujarat Co-operative Societies Act. But the real question is whether the word "dispute" used in S. 96 includes all differences and controversies of whatsoever nature and includes even claims in the nature of demands which are not based on or claimable under the ordinary law, but which could be claimed under a special Act and which could be awarded only in the manner and by the authority provided therein. Now, it must be noted that the ordinary disputes between citizens relate to individuals or private parties inter se and the adjudication of disputes would ordinarily connote the settlement of individual claims or of private right. The law that would be applicable in the settlement of such disputes would be the ordinary law applicable to a citizen and which is commonly called civil law. Industrial disputes and industrial law, however stand on a different footing and basis altogether. Industrial law stands by itself both in its theory and application. This special branch of law has made many vital departures from some accepted theories of the ordinary law of the land such as, for example, the law relating to contracts. Under the ordinary law, a proposal when accepted becomes a promise which if it is a legally enforceable agreement is a contract which is binding on both the parties to the contract and a Court of law, before which a dispute between the parties when brought before it, would decide the dispute between them according to the terms of the contract and not outside it. But that is not the position in cases when industrial disputes are adjudicated in industrial courts. All the terms and conditions arrived at between the parties, say between an employer and an employee, would not necessarily be binding while administering the industrial law and the Court or the authority dealing with disputes of industrial nature would be able under certain circumstances to modify the terms and conditions in a contract arrived at by mutual consent of the parties. This would mean that the industrial tribunal is empowered under certain conditions to remodel the terms by which the rights and obligations of the parties would be governed although such terms so imposed on the parties may not be acceptable to either of the parties. As stated by Ludwig Teller, "Industrial arbitration may involve the extension of an existing agreement, or the making of a new one, or in general the creation of new obligations, or modifications of old ones"
and it is important to note that such creation of new obligations or modifications of the old ones is not by the parties themselves, and it is possible in a given case that one or even both of the parties may be opposed to the new arrangement and it is the tribunal which deals with industrial matters, which makes the contracts that bind both the employer as well as the employee. Under the ordinary civil law the rights and obligations of the parties are determined and settled by the parties themselves and the idea of an extraneous authority making a contract for the parties who are bound by such contract is a novel one and does not find place in the ordinary law applicable in the adjudication of private rights. In Rambhau Jairam Dhamange v. Vinkur Co-operative Society, Ltd., and others [1966 - I L.L.J. 90 at 99] the following observations bring out the characteristics of industrial adjudication :
"It is well-settled that an industrial tribunal or authority adjudicating an industrial dispute, who may conveniently be referred to as an industrial arbitrator, is unlike a civil Court, not fettered by the agreement between the parties. He is required to decide the matter not according to the agreement or contract between the parties but according to what, having regard to all circumstances, he considers to be just and fair. In order that the workers get a proper wage, that they are not victimized or unfairly treated and that their terms of employment generally are such as will secure industrial peace, an industrial arbitrator has the power and the authority to radically modify or alter the agreed terms of employment and to impose new obligations. In a sense, he may make a new contract for the spouts. No authority is necessary in support of these propositions, but I will refer to one of them, the decision of the Supreme Court in Rohtas Industries Ltd. v. Brijnandan Pandey [1956 - II L.L.J. 444]. At p. 449 it was observed :
'.... There is undoubtedly a distinction between commercial and industrial arbitration. As has been pointed out by Ludwig Teller (Labour Disputes and Collective Bargaining), Vol. I, p. 535 :
"Industrial arbitration may involve the extension of an existing agreement, or the making of a new one, or in general the creation of new obligations or modifications of old ones, while commercial arbitration generally concerns itself with interpretations of existing obligations and disputes relating to existing agreements."
A Court of law proceeds son the footing that no power exists in the Courts to make contracts for people, and the parties must make their own contracts. The Courts reach their limit of power when they enforce contracts which the parties have made. An industrial tribunal is not so fettered and may create new obligations or modify contracts in the interests of industrial peace, to protect legitimate trade union activities and to prevent unfair practice or victimization ... ' An industrial tribunal has also jurisdiction to order reinstatement of a dismissed or discharged employee - see Western India Automobile Association v. Industrial Tribunal, Bombay, and other [1949 L.L.J. 245]. In view of S. 21(b) of the Specific Relief Act, no such relief can be granted by a civil Court or a private arbitrator - see Dr. S. B. Dutt v. University of Delhi [1959 S.C.R. 1236]."
10. We may refer to some of the various cases in which rights which are not available under the ordinary law have been given to the employees under the Industrial Disputes Act. Section 25C of that Act relates to the right of workman laid off for compensation. That section provides that whenever as workman (other than a badli workman or a casual workman) whose name is borne on the muster-rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid off, whether continuously or intermittently, he shall be paid by the employer for all days during which he is so laid off, except for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent of the total of the basic wages and dearness allowance that would have been payable to him had be not been so laid off. Another such instance is contained in S. 25F of the Industrial Disputes Act which lays down conditions precedent to the retrenchment of an employee.
11. The third instance can be found in S. 25FFF of the Industrial Disputes Act which relates to compensation to workmen in case of the closing down of an undertaking. In cases governed by the Bombay Industrial Relations Act, 1946, standing orders have to be settled and s. 46 of that act provides that no employer shall make any change in any standing order settled under Chap. VII of the Act without following the procedure prescribed in the Act. Section 73 of the Bombay Industrial Relations Act provides for reference by State Government of an industrial dispute to an industrial court or arbitration. That section reads as under :
"Notwithstanding anything contained in this Act, the State Government may, at any time, refer an industrial dispute to the arbitration of the industrial court, if on a report made by the labour officer or otherwise it is satisfied that -
(1) by reasons of the continuance of the dispute -
(a) a serious outbreak of disorder or a breach of the public peace is likely to occur; or
(b) serious or prolonged hardship to a large section of the community is likely to be caused; or
(c) the industry concerned is likely to be seriously affected or the prospects and scope for employment therein curtailed; or (2) the dispute is not likely to be settled by other means; or (3) it is necessary in the public interest to do so."
12. section 73a of that act provides for reference to arbitration by unions and S. 115 provides for the binding nature of an order or decision of a labour court. Such a decision, according to the section, would be binding on an employer, his successors-in-interest, heirs and assigns in respect of the undertaking as regards which it is made or given and such decision given against as registered union would be binding on all the employees in the industry in the local area whose representative the said union is. The method of conciliation through the intervention of a third party and if such a conciliation falls, the procedure for interference by the State by way of reference, is also a striking departure from the ordinary law. Not only can the private rights and obligations fixed by mutual consent be ignored or superseded, but adjudication could be made by following the principles of social justice, and on the basis that the adjudication arrived at would be binding not only to the parties, but to the members of the whole class to which a party belongs. The principle that workmen should be permitted to form unions introduces the idea of collective action on behalf of workmen. In cases of industrial disputes, it is possible to have collective arrangement which may provide for such questions as payment of wages, bonus, leave, gratuity, allowance, etc., and when collective negotiations fall, differences are settled under the industrial law through conciliation or through adjudication by an industrial tribunal which is specially constituted for such purposes. Industrial adjudication has thus become a necessary ingredient and a limb in the machinery of settlement of claims and demands of the workers and the rights and obligations of the employers through which collective arrangements which could be respected by both the parties could be made. It would thus be seen that the word "industrial dispute" has acquired a special meaning of its owns which cannot be equated with the ordinary meaning of the "dispute." It is also noteworthy that the law relating to industrial disputes does not bring in at any stage any adjudication through or by a civil Court. The Industrial Disputes Act and the Bombay Industrial Relations Act are special statutes which provide for resolving differences and claims of a particular nature not founded on private rights or obligations, but based on notions some of which are entirely foreign to the notions on which private rights are based. A civil Court, therefore, cannot have any case before it to entertains demands which might have no basis under the ordinary civil law, for such is not the jurisdiction that has been invested in the civil Court to decide claims or demands or differences arising out of the provisions of the special Acts like the Industrial Disputes Act and the Bombay Industrial Relations Act. On the other hand, in the Gujarat Co-operative Societies Act, we find in Sub-sec, (3) of S. 98, which has already been quoted above, that the Registrar is empowered to suspend proceedings in regard to any dispute, if the question at issue between a society and claimant or between different claimants, was one involving complicated question of law or fact, until the question has been tried by a regular suit instituted by one of the parties or by the society. Such a provision would show that the legislature contemplated that the Registrar may in certain cases defer his own adjudication till the parties obtain a decision from a civil Court. This would indicate that some of the rights that were to be adjudicated under the Co-operative Societies Act were sin the nature of civil or private rights such as could be the subject-matter of a civil suit. There is also another such indication in S. 166 of the Gujarat Co-operative Societies Act, which relates to the bar of jurisdiction of Courts. That section provides that save as expressly provided in the Act, no civil or revenue Court shall have any jurisdiction in respect of the registration of a society or its bylaws, or the amendment of its bylaws, or the dissolution of the committee of a society, or the management of the society on dissolution thereof or nay dispute required to be referred to the Registrar, or his nominee, or board of nominees, for decision; or any matter concerned with the winding up and dissolution of a society. These factors, though not conclusive by themselves, when considered in the light of what we have said above, that an industrial dispute has acquired a special and particular meaning under the industrial law and that such a dispute includes and relates to various questions and claims which could not be the subject-matter of adjudication between private parties, do support the view that what is contemplated by the word "dispute" used in S. 96 of the Gujarat Co-operative Societies Act relates to its ordinary meaning. viz., adjudications of rights and obligations under the ordinary law and not the adjudication of industrial disputes which have acquired a special meaning and significance under the industrial law. The industrial law seeks to provide an extraordinary process of adjudication which has been designed to deal with controversies which inherently by their very nature are outside the scope and purview of ordinary litigation. The High Court of Bombay in the case of Rambhau Jairam Dhamange v. Vinkur Co-operative Society, Ltd., and others [1966 - I L.L.J. 90] already referred to, has observed at the end of the judgment that :
"The Punjab and Kerala High Courts have taken the same view. In Jullundur T. C. Society v. Punjab State [A.I.R. 1959 Pun. 34], it was held that an industrial dispute between a co-operative society registered under the Punjab Co-operative Societies Act and sits workmen cans be referred to an industrial tribunal set up under the Industrial Disputes Act. Section 50(1) of the Punjab Co-operative Societies Act was substantially in the same terms as S. 54(1) of the Bombay Act of 1925. It contained a proviso almost in the same terms as Sub-section (3) of S. 93 of the present Maharashtra Co-operative Societies Act. At p. 35 the learned Judges observed that the disputes contemplated by S. 50 were not intended by the legislature to cover all kinds of disputes and this provision was not meant to be all-embracing as was contended by the learned counsel. It was further observed that a reading of Sub-section (1) of S. 50 clearly showed that though the words "touching the constitution or business of the society" were unqualified and extremely wide and comprehensive, still the legislature did not intend to include in this expression "industrial disputes" for the adjudication of which the Parliament had enacted the Industrial Disputes Act. The learned Judges then referred to the proviso and observed (p. 36) :
'.... Indeed this proviso supplies a key to the intention of the legislature and sit almost conclusively suggests that it is only such disputes as are capable of being tried by a regular suit which are covered by the provisions of S. 50 It has not been suggested by the learned counsel for the petitioner (and it could not be suggested) that an industrial dispute as defined in the Industrial Disputes Act is capable of being tries by a regular suit.' In Kerala State Handloom Weavers' Co-operative Society v. State of Kerala [1964 - I L.L.J. 559] : the Kerala High Court has held that the provisions of S. 60(1) of the Travancore-Cochin Co-operative Societies Act. 1951, did not preclude a reference to adjudication under S. 10 of the Industrial Disputes Act, of the industrial disputes between a co-operative society and its workmen. At p. 561 was observed :
"The question in cases like this is not whether the dispute referred for adjudication touches the business of a co-operative society; the question really is whether that dispute comes within the category of disputes covered by S. 60(1) of the Travancore-Cochin Co-operative Societies Act, 1951. The purpose of Chap. XIII of the Travancore-Cochin Co-operative Societies Act., 1951 - the chapter in which S. 60(1) occurs - is not to resolve all controversies touching the business of co-operative societies under the provision of that chapter; but resolve only such controversies as can be resolved in an ordinary Court of law. In other words, the arbitration provided by Chap. XIII is an alternative to the normal processes of the ordinary Courts and not to the extraordinary process of adjudication under the Industrial Disputes Act, 1947, which has been designed to deal with controversies which by their very nature are outside the purview of ordinary litigation."
The position, therefore, is that the dispute referred to the Registrar under Sub-section (1) of S. 91 must be such as a civil Court can take cognizance of and try. Like a civil Court the Registrar cannot grant any relief outside the contract of employment. He cannot, therefore, try any matter in which as demand is made for a change in the conditions of service or for reinstatement of an employee whose services had been terminated. By and large, the Co-operative Societies Act and the Industrial Disputes Act provide for the settlement of different classes of disputes. Even though, therefore, the words "any dispute" in Sub-section (1) S. 91 are very wide, they will have to be given a limited meaning, for the reasons which I have given above these words mean any dispute which the Registrar is competent to try and decide."
13. In an earlier case of Majoor Sahkari Bank, Ltd., v. M. N. Majumdar [1955 - II L.L.J. 755] the High Court of Bombay, though dealing with a different question, had the occasion to observe that :
"Now Sri Rane has very rightly pointed out that the disputes contemplated by S. 54 are disputes of a civil nature which could have been decided by civil Courts but for the provisions with regard to compulsory arbitration provided in S. 54."
14. It would be proper here to refer to the definition of "industrial dispute" given in Sub-section (17) of S. 3 of the Bombay Industrial Relations Act. Sub-sec (17) provides that :
"'industrial dispute' means any dispute or difference between an employer and employees or between employers and employees or between employees and employees and which is connected with any industrial matter."
Sub-section (18) defines "industrial matter" as any matter relating to employment, work wages, hours of work, privileges, rights or duties of employers or employees or, the mode, terms and conditions of employment, and includes -
(a) all matters pertaining to the relationship between employers and employees, or to the dismissal or non-employment of any person;
(b) all matters pertaining to the demarcation of functions of any employees or classes of employees;
(c) all matters pertaining to any right or claim under or in respect of or concerning a registered agreement or a submission, settlement or award made under this Act;
(d) all questions of what is fair and right in relation to any industrial matter having regard to the interest of the person immediately concerned and or the community as a whole.
15. It would be seen that the "industrial dispute" has a particular import and meaning of its own. According to the above provisions, the words "industrial dispute" would include any difference which is connected with any industrial matter and the definition of industrial matter is so wide that it not only includes within its fold matters which could not have been the subject-matter of adjudication of private relationships or rights, but even all question of what is fair and right in relation to any industrial matter having regard to the interest of the person immediately concerned and/or the community as a whole. The concept of industrial dispute is, therefore, entirely different and of a different nature altogether from the concept or a dispute in its ordinary sense and meaning or even form the concept of a dispute as envisaged under the law relating to co-operative societies. The rights that fall within the purview of the industrial law are entirely different in nature from the ordinary rights of a citizen and similarly also the obligations which are of a varied nature altogether. Such rights and obligations could be enforced by and could be made the subject-matter of adjudication through special agencies created under the industrial law. The principles applicable to the adjudication of such claims and differences and the field and method of operation of the adjudication agencies are entirely different and therefore, the implications arising out of the words "industrial dispute" which has acquired meaning of its own, are not akin to those that arise out of the word "dispute" used in ordinary parlance. It must, therefore, be held that an industrial dispute connotes an entirely different concept from a dispute arising under the Co-operative Societies Act between the parties mentioned in S. 96 of the Act and the authority functioning under the Co-operative Societies Act cannot have the power and the jurisdiction to decide differences or claims or demands that arise under the industrial law. It is true that there is a non obstinate clause which is introduced in the beginning of S. 96, but that would only mean that there would be an impediment to the adjudication of disputes similar to those arising under the Bombay Co-operative Societies Act by any other authority functioning under any other law in force. Such a clause cannot give jurisdiction where there is none, and all that such a clause would mean would be that in the case of a dispute within its purview, it would be the Co-operative Societies Act that would prevail and not a similar provision in any other law for the time being in force. In this view of ours, the question of treating the word "any" before the 'dispute' occurring in S. 96 as a surplusage also does not arise. The difference or the claim or the demand must first come within the category of dispute as is meant under S. 96 of the Co-operative Societies Act and for the same reason the addition of the word "management" in S. 96 of the Gujarat Co-operative Societies Act, 1961, can have no significance if the dispute itself is outside the ambit of the section. As the differences or claims or demands that fall to be adjudicated under the industrial law do not fall within the purview of S. 96 of the Gujarat Co-operative Societies Act, for the reasons stated above, we are of the view that an industrial dispute which falls within the purview of the Bombay Industrial Relations Act cannot be heard and decided under S. 96 of the Gujarat Co-operative Societies Act, and the contention of the petitioners that the labour court had no jurisdiction to hear and decide the matters which are the subject-matter of these petitions cannot be accepted.
16. Sri Majumdar appearing on behalf of respondent 2 in Special Civil Application No. 585 of 1983 had urged that the dismissal of the employee was made by the society on 21 February, 1962 and that the Gujarat Act was applied on 1 May, 1962 and that therefore, on the relevant date it was the Bombay Co-operative Societies Act of 1925 which was applicable in which the non obstinate clause and the word "management" were not included. But this contention need not be considered in the view that we have taken of the scope and meaning of the word "dispute" occurring in S. 96 of the Gujarat Co-operative Societies Act. Even otherwise the contention does not appear to be sound because the right to apply can arise only after an approach letter has been sent under the provisions of S. 42 of the Bombay Industrial Relations Act.
17. Sri Chhaya appearing on behalf of the petitioners in Special Civil Applications Nos. 640 of 1963 and 1144 of 1966 had adopted the same arguments which we have dealt with above. In those two applications there was an additional point that was decided by the labour court which supported its finding that the labour court had the jurisdiction to hear and decide the applications that were pending before it. The labour court referred to S. 25J(2) of the Industrial Disputes Act, 1947, which is as under :
"(2) For the removal of doubts, it is hereby declared that nothing contained in this chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this chapter."
18. On the basis of this provision, the labour court held that the Industrial Disputes Act clearly provided that the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of the Industrial Disputes Act. Such being the provision of the Central Act, the labour court was of the view that that Act would prevail and not S. 54 of the Bombay Co-operative Societies Act or S. 96 of the Gujarat Co-operative Societies Act, 1961. As against this finding, Sri Chhaya was not able to offer any argument or to show any provision of law to the contrary. On this ground also, therefore, the two Special Civil Applications Nos. 640 of 1963 and 1144 of 1966 must fail.
19. The result, therefore, is that all the three petitions fail and are dismissed. The rule that has been granted in each of the petitions is discharged and the petitioner in Special Civil Application No. 535 of 1963 will pay the costs of respondent 2 and the petitioner in Special Civil Application No. 640 of 1963 will pay the costs of respondent 2 and also the costs of respondents 3 to 33 in one set.
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