P.D Kudal, J.:— This special appeal is directed against the judgment of the Hon'ble Single Judge dated 28-4-1971.
2. The facts of the case which are relevant for the disposal of this special appeal are that the respondent Shri H.N Gupta was appointed as an Inspecting Officer in the services of the Rajasthan State Co-operative Bank Ltd. (hereinafter referred to as the Bank) on probation for six Page: 194months in the first instance. The terms of appointment are stated in the order dated 29-3-1963, Annexure I, which provided, inter alia, that on the expiry of period of probation he would be confirmed in the Bank service if his work was found to be satisfactory. Shri H.N Gupta took over the charge as Inspecting Officer of the Bank on 30-3-1963. The President of the Bank by his decision Annexure 4 dated 23-9-1963 terminated the services of Shri Gupta on the expiry of the period of probation. The Geaeral Manager of the Bank issued order dated 26-9-1963, Annexure 3, terminating the services of Shri Gupta from the forenoon of 30-9-1963. The Executive Engineer of the Bank confirmed this action in its meeting of 23rd November, 1963. Shri Gupta feeling aggrieved against the order of termination of his services submitted an application Annexure 5 dated 31-12-1963, to the Registrar of the Co-operative Societies (hereinafter referred to as the Registrar) praying for a settlement of the dispute by arbitration. Vide Annexure 6 dated 20-5-1964, the dispute was admitted for hearing under Section 61 of the Rajasthan Co-operative Societies Act, 1953, and the parties were called to intimate whether they wanted the dispute to be decided by the Registrar or his nominee or a Board of Arbitrators. It was also mentioned that in case the parties wanted the matter to be decided by a Board of Arbitrators, then each party should nominate their one representative on the Board of Arbitrators. The Bank, however, raised an objection vide their reply, Annexure 7, dated 2-6-1964 on the ground that there was no dispute at all between Shri Gupta and the Bank ‘touching the business of the Bank’. The Registrar over-ruled this objection vide Annexure 8, dated 2-7-1964, and held that the dispute had already been admitted under Section 61 of the Old Act as it related to the Bank's business. The Bank appointed Shri J.C Sayal, the Deputy Manager of the Bank, as its representative, while Shri Gupta nominated Shri Ban???ari Swaroop. On behalf of the Department Shri Shrikrishna Mathur was appointed as Chairman of the Board of Arbitrators.
3. The Board of Arbitrators gave their award, Annexure 9, dated 1-2-1965, holding that the order terminating the servi???es of Shri Gupta was not legal. The Bank feeling aggrieved with the Award moved an application, Annexure 10 dated 15-2-1965, under Section 62 of the Old Act for setting aside the Award.
4. The Bank's application under Section 62 of the old Act was pending consideration before the Registrar. The old Act was repealed by the Rajasthan Co-operative Societies Act, 1965 (hereinafter referred as the New Act) which came into force with effect from 2-10-1965. The Rajasthan State Cooperative Tribunal was constituted under Section 123 of the new Act by order dated 2-12-1965. The Registrar, however, decided the Bank's application under Section 62 of the Old Act vide its order, Annexure 18 dated 20-9-1966. The application of the Bank was rejected and the Award was upheld. The Bank was directed to pay the emolument to Shri Gupta from the date of termination of his services upto the date of Award, i.e from 30-9 1963 to 1-2-1965, both days inclusive. The Bank felt aggrieved against the order of the Registrar on the ground that the petition stood transferred to the Rajasthan State Co-operative Tribunal by virtue of section 153(3) of the New Act, and that the Registrar had no jurisdiction to deal with it. The Bank, therefore, filed the writ petition No. 1795 of 1966 on Page: 19530-11-1966 pleading, inter alia, that the matter of termination of services of Shri Gupta was not one touching the business of the Society and therefore, did not fall within the purview of Section 61 of the Old Act, Shri Gupta, however, asserted that the Bank should implement the Registrar's Order Annexure 13 dated 20-9-1966 and ultimately filed an application before the Registrar under section 118 of the new Act for a certificate for executing the Registrar's order. The Registrar on 26-12-1966, certified that Shri Gupta was entitled to recover Rs. 14,225 as his salary including allowance from the Bank for the period from 30-9-1963 to 30-9-66. Shri Gupta was, however, not allowed to resume his duty in the Bank Shri Gupta thereupon moved an application under Section 132 of the New Act where by he sought sanction under Section 132 of the New Act for prosecuting the General Manager of the Bank for failing to comply with the Award, the Registrar gave the sanction by his order, Annexure 9, dated 24-6-1967, and a complaint was accordingly filed on 16-9-1967 in the Court of the learned City Magistrate, Jaipur.
5. In the meantime, the General Manager of the Bank against whom sanction for prosecution was granted by the Registrar filed a revision petition before the State Government. The Bank filed, in all three petitions. Application on Annexure 11 dated 14-6-1967 was filed before the Government under Section 128 of the New Act for setting aside the order of the Registrar dated ???1966. and for a direction that the Bank's application under Section 62 of the Old Act should be decided by a competent authority. Application Annexure 12 was filed under Section 128 of the New Act on 1-7-1967 for revoking the Registrar's sanction dated 2-7-1967 for prosecution of the General Manager, and application Annexur??? 13 dated 14-6-1967 was filed undei Section 124 of the New Act for setting aside the Registrar's certificate for releasing of Rs. 14,225. Both th??? applications are annexures in the Writ Petition No. 777 ???f 1968 filed by Shri Gupta. The Deputy Minister for Co-operation ultimately passed on order dated 7-6-1968 on the application of the Bank under Section 125 of the New Act against the Registrar's order dated 24-6 1967 sanctioning the prosecution of the General Manager. He held that the Registrar was not competent to decide the Bank's revision petition and he should have automatically referred it to the Tribunal under Section 125 of the New Act, and that his order dated 20-9-1966 was bad in law. A further direction was also issued that the record of the revision petition should be transferred to the Rajasthan State Co-operative Tribunal for disposal according to law. It was further held that the question of according sanction for the prosecution of the General Manager did not arise as the Registrar's order dated 20-9-1966 was a nullity, S???ri Gupta feeling aggrieved against this order of the Government filed the Writ Petition No. 777/1968 on 11-9-1968 on a number of grounds.
6. Both these writ petitions were disposed by the Hon'ble Judge by his order dated 28-4-1971. It is against this order that ???he present Special Appeal has been filed.
7. The main point involved in this Special Appeal is whether the dispute relating to the termination of the services of Shri Gupta is a dispute touching the business of the Society. The Hon'ble Single Judge has held that the word ‘business’ should be given a wide interpretation and should include the dispute of an employee regarding the termination of his services.
8. On behalf of the appellant, it has been strenuously contended that the dispute regarding the dismissal of a paid employee does not in any way touch the business of the Society, and the Registrar lacks inherent jurisdiction under Section 6??? of the Old Act to refer the dispute to a Board of Arbitrators.
9. Reliance was placed on K.C.N.C Society v. Soundararajan, AIR 1968 Mad. 67, wherein it was held that the scope of Sec. 51 of the Co-operative Societies Act is limited It relates only to any dispute touching the business of registered society and arising between the society and its servant. A claim for retrenchment compensation by a servant retrenched by the Society is no doubt a dispute between the society and its servant, but is not a dispute touching the business of the registered society.
10. Reliance was placed on Co-op. Cr. Bank v. Ind. Tri. Hyderabad, (1969) 2 SCC 43 : AIR 1970 SC 245, wherein it was held that the dispute relating to alterations of conditions of service cannot be held to be disputes touching the business of the Society. It was further held that such dispute is not contemplated to be dealt with under Section 62 and is therefore, outside the scope of Section 61 and it can only be dealt with by Industrial Tribunal under Industrial Disputes Act, 1947.
11. Reliance was also placed on Co-op. Milk Societies Union v. W.B State, AIR 1958 Cal. 373, wherein it was held that strictly speaking, dispute between a Cooperative Society and its workmen does not relate to the actual business of a co-operative society and therefore does not touch the business of the co-operative society. Consequently, however a dispute between the co-operative society and its workmen may ultimately touch or affect the business of the co-operative society, the remote and the consequential result should not be included within the expression any dispute regarding disciplinary action taken by society or its managing committee against a paid servant of the society is expressed excluded from the purview of Registrar's jurisdiction by S. 86 of the Act supports such a construction. Legislature, therefore, did not intend that dispute regarding disciplinary action by the society against its paid servant should be settled by the Registrar.
12. Reliance was also placed on B.M Co-op. Bank v. Dallchan, AIR 1969 SC 1320, wherein it was held as under:—
“The word “business” (1) of Sec. 91 has been used in narrower sense and it means the actual trading or other similar business activity of the society which the Society is authorised to enter into under the Act and the Rules and by-laws. Five kinds of disputes are mentioned in sub-section (1): 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 general meetings and management of a society would be treated as affairs of a society.”
Although the nature of business which a society does can be ascertained from the objects of the society, it cannot be said that whatever the society does or is n???? ???d ??? do Page: 197for the purpose of carrying out its objects, is part of its business. The word “touching” is very wide and would include any matter which relates to or concerns the business of a society, but it is doubtful whether word “affects” should also be used in defining the scope of the word “touching”. The question whether a dispute touching the assets of a society, would depend on the nature of the society and the rules and byelaws governing it. Ordinarily, if a society owns buildings and lets out parts of buildings which it does not require for its own purpose, it can not be said that letting out of those parts is a part of the business of the society. But it may be said that it is the business of a society to construct and buy houses and let them out of its members. In that case letting out property may be part of its business. Where the society is a co-operative Bank it cannot ordinarily be said to be engaged in business when it lets out properties owned by it Therefore the dispute between a tenant and a member of the Bank in a building which has subsequently been acquired by the Bank cannot be said to be a dispute touching the business of the Bank.”
13. Reliance was also placed on National C.C Federation v. Delhi Administration, AIR 1971 Delhi 141, wherein it was held as under:
“All disputes arising between a society and its employees are not covered by Section 54. Disputes between a Society and its employees are divisible into two broad class (1) Disputes touching the business of a society and (2) those that would not be so touching. Only former cla??? is covered by Section 54.
A business of a society must be found in the objects of the society for which it was formed. Such objects do not include employment of servants. Therefore, every dispute between a society and its employees will not be a dispute “touching the business of the society”.
“It is not that all disputes between a Society and its employees-high or low would be excluded from Section 54. Every servant of the society would be concerned in doing work, part of which would be touching the business of the society while rest of it would not be so. Any dispute arising when a servant doing some work not directly related to business of the society would be outside the scope of Section 54”.
Where a society terminates of services of an employee it only exercise its rights of a master vis-a-vis its servant. When such servant contends that his termination was against a by-law framed under Section 71(2)(d), the termination of service is not directly concerned with the business of the society within the meaning of the Section 54.”
14. On behalf of the respondent Shri Gupta, reliance has been placed on Madhava Rao v. Surya Rao, AIR. 1954 Madras 103 (F.B) wherein it has been held as under:—
“The words “touching the business of a society” must be given their full import, bearing in mind the object of the legislation. Taking the dictionary meaning of the word “touching” Page: 198it indicates that the dispute need not ???irectly arise out of the business of the society, but that it is enough that it should have reference or relation to ???or concern the business of the society. The word “touching” was clearly not intended to restrict the meaning of the word business; it was designed to enlarge its scope. Similarly, the word “business” in Section 51 is not used in a narrow cense. It is no doubt true that some Sections of the Act refer to the “affairs of the society” while others refer to the business of the society. But the words “affair” and “business” have been used as interchangeable terms in the Act and a???e not intended to denote different concepts. The business has to be that of society i.e, the corporate activity of the society and what the permissible corporate activities of the society are have to be gathered from the sections of the Act, the rules framed under the Act and the bye-laws made by the corporation which are ultra vires the Act. For, the power of the corporation is derived from these three sources, and ???so long as its activity is within those powers, it cannot be questioned as being invalid.”
15. Reliance was placed on South Arcot C.M.T Society v. Syed Batcha, A.I.R 1964 Mad. 103, wherein it was held that any dispute regarding service conditions will be a matter touching the business of the society to be adjudicated upon under Section 51 of the Madras Co-operative Societies Act. An application under Sec. 33-C(2) of the Industrial Disputes Act is not maintainable and the Tribunal will have no jurisdiction to adjudicate upon it.
16. In Farkhundali v. V.B Patdar (F.B) A.I.R 1962 Bombay 162, it was held as under:—
“The nature of business, which a society does, is to be ascertained from the objects of the society. But whatever the society does or is necessarily required to do for the purpose of carrying out its objects can be said to be part of its business. The word “touching” is also very wide and would include any matter which relates, concerns or affects the business of the society.
Every society must necessarily employ some strvants for the purpose of carrying on its business. The payment of wages or any sum due to them under law is therefore part of the business of the society. In any case, there can be no doubt that payment would touch the business of the society within the meaning of Section 54.”
17. In Navagarh Co-operative Central Bank v. Narayana, (1975) 2 SCC 445 : A.I.R 1975 S.C 1895, it was held as under:—
“The appellant was a Co-operative Bank. It was registered as a Co operative Society under the Act and had among its objects, raising funds for financial co-operative societies registered under the Act affiliated to it, besides carrying on the general business of a Bank. Three such co-operative societies had applied to the appellant Bank for loans and on the recommendation of the first respondent who at the relevant time was employed as Secretary of the Bank, various sums were advanced to the aforesaid societies having failed, the appellant Bank referred the disputes concerning the said transactions to arbitration under Section ???8 of the Act praying for an Award in each case for the sum Page: 199advanced with interest; the claim was made in each case, against the indebted society, its office-bearers and the first respondent jointly and severally.
Held, that the requirements of S. 69(1) were satisfied; the reference was valid and the order of the [High Court quashing it was illegal.”
18. Section 61 of the Old Act reads as under:—
“61. Arbitration (1). If any dispute touching of a society (other than dispute regarding disciplinary action taken by the society) arises between members or past members of the society or person claiming through a member or past or deceased member, or between members or past members or person 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 orpresent it shall be referred to the Registrar for decision by himself or his nominee or if either of the parties so desire, to arbitration of threr arbitrators who shall be the Registrar or his nominee and two persons of whom one shall be nominated by each of the parties concerned.
(2) A dispute shall include claims by a society for debts or demands due to it from a member or past member or the heirs or assets of a past member whether such debts of demand 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 or 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;
(d) 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 sub-section 1 of this section.”.
19. From a perusal of the section it will appear that the dispute touch ing the business of a society could be referred to the Board of Arbitrators under section 61 of the Act. The word “business” has to be interpreted in a wide sense. The disputes regarding the termination of the services of a paid employee other than the dispute regarding the disciplinary action taken by the society would be a dispute touching the business of a society. This view finds support in Navagarh Co-operative Central Bank v. Narayan (9). The business of the society can be gathered from the objects of the society for which it was formed. The respondent was employe ??? as an Inspecting Officer. His assignment was clearly for the purpose of watching the interest of the society. The society is ??? banking concern Watching the interest of the banking concerned has a direct bearing with the business of the Society. If the services of an employee are illegally terminated then the dispute which then arises is a dispute touching the business of the society. There is no reason to take restricted view and to hold that such a dispute would not be touching the business of the society. The very fact that disciplinary proceedings have been excluded under Sec. 61 of the Old Act to be one touching the business of the Society lends support to the conclusion that the dispute relating to the termination of service would mean touching the business of the society. As a matter of fact, the entire matter has been set at rest by the decision of the Supreme Court is Page: 200Navagarh Co-op. Central Bank v. Narayana (9). In view of these circumstances, we have no hestitation in holding that the view taken by the Hon'ble Single Judge does not call for any interference on the appellate side. For the reasons stated above, there is no force in this special appeal, which is hereby dismissed. Looking to the facts and circumstance of the case, the parties are left to bear their own costs.
20. Appeal dismissed.
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