IMPORTANT POINT
Workmen claiming service benefits in terms of Wage Board Report would not be covered by expression “touching business of the society”.

Headnote:Punjab Cooperative Societies Act, 1961 — Sections 55 and 79 — Civil suit filed by respondent union claiming dearness allowance on wages plus fixed allowance in accordance with Third Wage Board Report — Trial Court held that defendant-appellant had no right to withdraw VDA (Variable Dearness Allowance) but further held that service of notice u/s 79 of the Act was mandatory before filing the suit — 1st appellate Court reversed the judgment holding that subject matter of suit could not be said to be a dispute touching business of society — High Court upheld the judgment of appellate Court — Appeal — Expression “any act touching the business of the society” — Cooperative society or its officers not to be dragged to litigation before Civil Court in respect of any act touching business of such a society unless notice required to be given in writing had been issued — Contention that when object of society was to promote economic interest, any thing which had link with economic interest had to be taken as touching business of the society — Alteration of condition of service of the workman would not be covered by expression “touching the business of the society” — Conclusion of 1st appellate Court as affirmed by High Court did not suffer any infirmity.
       Held : The object of Section 55 of the Act is clear. If any dispute touches the constitution, management or business of any cooperative society arising between specified category of members has to be referred to arbitration. Similarly no cooperative society or its officers should be dragged to litigation before the Civil Court in respect of any act touching the business of such a society unless notice required to be given in writing as has been issued to the Registrar of the society.(Para 7)
       The emphasis made by learned counsel for the appellant is that when the object is to promote the economic interest, any thing which has link with the economic interest has to be, per force, taken as touching the business of the society.(Para 8)
       In Co-operative Central Bank Ltd. and others etc. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad and others etc. [1969 (2) SCC 43] it was held that alteration of the conditions of the service of the workman would not be covered by the expression "touching the business of the society".(Para 11)

JUDGMENT

Arijit Pasayat, J. — Appellant calls in question legality of the judgment rendered by a learned Single Judge of the Punjab and Haryana High Court dismissing the appeal filed by the appellant under Section 100 of the Code of Civil Procedure, 1908 (in short the Code). The defendant Morinda Co-operation Society Workers Union (hereinafter referred to as the Union) as plaintiff filed a suit claiming dearness allowance on the wages plus fixed allowance in accordance with para 317 (ii) of the Third Wage Board Report. The first appellate court reversed the judgment and decree of the trial court, holding that the subject matter of the suit cannot be said to be a dispute touching the business of the society. Accordingly the appeal was allowed. Second Appeal was filed by the defendant (present appellant) contending that the view of the trial court was justified and that of the first appellate court was not justified.

2. The plaintiff–Union filed the suit seeking declaration to the effect that the members of the plaintiff–Union was entitled to the benefit of the Variable Dearness Allowance (for short the VDA) on the basic wages plus fixed allowance in accordance with para 317(ii) of the Third Wage Board Report with a consequential relief for permanent injunction restraining the defendant from withdrawing the payment of VDA from the fixed amount of Rs.150 which was being paid to the members of the Union. Defendant took the stand that since small notice under Section 79 of the Punjab Co-operative Societies Act, 1961 (in short the Act) is required, the suit was not maintainable. The trial court on the basis of the pleadings framed five issues which are as follows:

1.Whether the plaintiff is entitled to the declaration as prayed for?

2.Whether the plaintiff is entitled to the injunction as prayed for?

3.Whether the suit is not maintainable in the present form?

4.Whether the plaintiff has no locus standi to file the present suit?

5.Whether the suit is liable to be dismissed on the ground of non service of notice under the Punjab Co-operative Societies Act?

3. The trial court held that the defendant has no right to withdraw the VDA in accordance with the recommendations. Issues 1 and 2 were accordingly answered. It was further held that defendant has no right to withdraw VDA and if any clarification for withdrawal of VDA is required, opportunity of hearing was required to be given to the plaintiff and it should have been obtained from the Third Wage Board. The Issues 1 and 2 were accordingly answered. The suit was held to be maintainable as no defect on the form of the suit was pointed out. But on issue No. 4 it was held that service of notice was mandatory.

4. In the Second Appeal it was urged that the First Appellate Court lost sight of the fact that expression "business of the society" used in Section 79 would necessarily include financial involvements concerning payment of salary and allowance to the plaintiff–Union. It was further pointed out that disputes of the nature raised touched the constitution, management or business of the cooperatives societies and was required to be referred to "Arbitration" under Section 55(1) of the Act. The High Court after analyzing the Bye law No.5 of the appellant, came to hold that the first appellate court was justified in its conclusion. Accordingly the Second Appeal was dismissed.

5. Learned counsel for the appellant submitted that the object of the society was to promote economic interest of its members and if the effect of costs involved in production of sugar was the subject matter of adjudication, obviously notice under Section 79 of the Act was mandatorily necessary. It was submitted that the expression "touching business of the society" is wide enough to encompass all aspects which have effect on the economic interest of the members and that is why trial court was justified in its view.

6. Per contra learned counsel for the respondent submitted that the High Court has analysed the lega

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2006 Supreme(SC) 600

IMPORTANT POINTWorkmen claiming service benefits in terms of Wage Board Report would not be covered by expression “touching business of the society”.

Cases Referred (2)

IMPORTANT POINT
Workmen claiming service benefits in terms of Wage Board Report would not be covered by expression “touching business of the society”.