1. Dismissal from service of a cooperative society employee — Challenge to dismissal filed in Cooperative Court under Section 91, Maharashtra Cooperative Societies Act, 1960. (Para 1 )
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2017 Supreme(SC) 293
SUPREME COURT OF INDIA
A.K. SIKRI, R.K. AGRAWAL, JJ.
THE MAHARASHTRA STATE COOPERATIVE HOUSING FINANCE CORPORATION LTD. – APPELLANT(S)
VERSUS
PRABHAKAR SITARAM BHADANGE – RESPONDENT(S)
CIVIL APPEAL NO. 1488 OF 2017
Decided On : 30-03-2017
Important Points
IMPORTANT POINT
Cooperative Court does not have the jurisdiction to entertain service disputes.
Cooperative Court does not have the jurisdiction to entertain service disputes.
Subject
Jurisdiction - Cooperative Court Jurisdiction
Act Referred
Headnote
(a) Maharashtra Cooperative Societies Act, 1960 – Section 91(1) – Jurisdiction of Cooperative court – Disputes touching the ‘constitution, elections of the committee or its officers’ – Service disputes – ‘Officers’ has reference to election. (Para 11)
(b) Maharashtra Cooperative Societies Act, 1960 – Section 91(1) – Jurisdiction of Cooperative court – Will not have jurisdiction to grant reinstatement in case of a workman being dismissed. (Para 7)
(1976) 2 SCC 58 – Relied upon
1970 1 LLJ 32; 1959 SCR 1236; 1964 1 LLJ 1 – Referred
(c) Service law – Contract of personal services – Not enforceable under common law – Section 14, r/w section 41(e), Specific Relief Act, 1963 – Civil court not having jurisdiction to grant reinstatement as it would amount to enforcing contract of service – Exceptions – Employee not falling under any exception cannot claim reinstatement – He can only seek declaration that termination was wrongful and claim damages for such wrongful termination of services – Appellant Corporation not a ‘State’ – Respondent not a Government/public servant nor a ‘workman’ – Entitled to claim damages in civil court. (Para 7, 8)
(d) Maharashtra Cooperative Societies Act, 1960 – Section 91(1) – ‘Business of the society’ – Would not cover service disputes of employer and employee. (Para 13)
(1969) 1 SCR 887; (1969) 2 SCC 43; (2006) 6 SCC 80 – Relied upon
(e) Maharashtra Cooperative Societies Act, 1960 – Section 91(1) – ‘Management of the society’ – – Would not cover service disputes of employer and employee. (Para 14)
(1979) 3 SCC 123; (1979) 3 SCC 123 – Relied upon
(1997) 5 SCC 125 – Distinguished
Facts of the case:
The respondent had joined the services in the appellant Corporation in the year 1975 as an Inspector and was promoted to the post of Branch Manager (Class-I) in the year 2000. For certain acts of misconduct he was put under suspension and after enquiry he was dismissed. His departmental appeal was also dismissed.
The respondent approached the Cooperative Court challenging the orders of dismissal from service as well as the order rejecting the departmental appeal.
The Corporation challenged the jurisdiction of the Cooperative Court to entertain and decide the service dispute between the employer and the employee which was dismissed.
Appeal thereagainst was dismissed.
Writ petition challenging these orders has also been dismissed.
Finding of the Court:
Cooperative Court does not have the jurisdiction to entertain the claim filed by the respondent.
Result: Appeal allowed.
Judgement Key Points
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Advocates Appeared:
For the Appellants : M.Y. Deshmukh, Nitin Bhavar, Yatin M. Jagtap, Shrikant R. Deshmukh, Shakti Pandey, Advs.
For the Respondents: Amol B. Karande, Adv.
For the Appellants : M.Y. Deshmukh, Nitin Bhavar, Yatin M. Jagtap, Shrikant R. Deshmukh, Shakti Pandey, Advs.
For the Respondents: Amol B. Karande, Adv.
Table of Contents
2. Whether service disputes between a cooperative society and its employees fall within the jurisdiction of the Cooperative Court under Section 91 of the Act. (Para 4 , 5 , 6 )
3. Analysis of Section 91 reveals that business and management of a society do not encompass employer-employee service disputes or conditions of employment. (Para 10 , 11 , 12 , 13 , 14 , 16 )
4. Service disputes between a cooperative society and its employees are not covered by Section 91 of the Maharashtra Cooperative Societies Act, 1960. (Para 11 , 13 , 14 )
5. Appeal allowed — High Court order set aside — Petition before Cooperative Court held not maintainable — Liberty granted to file civil suit. (Para 18 )
6. Does the term business of the society under Section 91 include service disputes?
No. The term business is used in a narrow sense, referring to the actual trading, commercial, or similar business activities the society is authorized to enter into, and does not cover service matters or conditions of employment. (Para 13 )
7. Does the term management of the society under Section 91 encompass disputes between the society and its employees?
No. Management refers to the governing body, such as the Board of Directors or Executive Committee, that guides and controls the society's affairs, not the staff or employees who run day-to-day business. (Para 14 )
8. Can a Cooperative Court grant the relief of reinstatement to a dismissed employee?
No. Reinstatement involves enforcing a contract of personal service, which is generally barred under the Specific Relief Act. Since Civil Courts generally cannot grant reinstatement, the Cooperative Court, as a substitute, lacks such jurisdiction. (Para 7 , 8 )
9. Does the reference to officers in Section 91 include employees in the context of service disputes?
No. In the context of Section 91, the word officers refers specifically to the election of the committee or its officers, not to the employment relationship between the society and its staff. (Para 11 )
JUDGMENT
A.K. SIKRI, J.
The appellant, Maharashtra State Cooperative Housing Finance Corporation Limited (hereinafter referred to as the ‘Corporation’), is a cooperative society registered under the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as the ‘Act’). The respondent had joined the services in the appellant Corporation in the year 1975 as an Inspector. He was promoted to the post of Branch Manager (Class-I) in the year 2000. For certain acts of misconduct allegedly committed by the respondent, he was put under suspension vide orders dated July 11, 2003. Thereafter, a charge-sheet was served upon him and the departmental inquiry conducted, which resulted in dismissal order dated April 28, 2006 passed by the Corporation, dismissing the respondent from service. His departmental appeal having dismissed, the respondent approached the Cooperative Court at Aurangabad, which is set up under the Act, on April 19, 2007 challenging the orders of dismissal from service as well as the order rejecting the departmental appeal by filing Dispute No. 61 of 2007. On receiving the notice in the said dispute petition, the Corporation filed an application for rejection of the petition of the respondent on the ground that the Cooperative Court set up under the Act did not have the jurisdiction to entertain and decide the service dispute between the employer and the employee, inasmuch as the dispute in question did not touch upon the business of the society and was not covered by the provisions of Section 91 of the Act. The Cooperative Court dismissed the said application holding that it had the requisite jurisdiction to decide the dispute. Order of the Cooperative Court was challenged by the appellant before the Cooperative Appellate Court in the form of an appeal. This appeal was dismissed confirming the orders of the Cooperative Court. Further challenge was laid by the appellant by filing a writ petition before the High Court of Judicature at Bombay, Aurangabad Bench. This writ petition has also been dismissed vide judgment dated January 21, 2014. Present appeal assails the said judgment of the High Court.
2. From the aforesaid, it becomes clear that the issue that needs to be decided is as to whether the Cooperative Court established under the Act has the requisite jurisdiction to decide ‘service dispute’ between a cooperative society established under the Act and its employees.
3. Section 91(1) of the Act, scope whereof is to be examined, reads as under:
"91. Disputes. - (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, elections of the committee or its officers other than elections of committees of the specified societies including its officer, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, to the Cooperative Court if both the parties thereto are one or the other of the following -
(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the liquidator of the society or the official assignee of a deregistered society;
(b) a member, past member of a person claiming through a member, past member of a deceased member of society, or a society which is a member of the society or a person who claims to be a member of the society;
(c) a person other than a member of the society, with whom the society, has any transactions in respect of which any restrictions or regulations have been imposed, made or prescribed under Section 43, 44 or 45, and any person claiming through such person;
(d) a surety of a member, past member or deceased member, or surety of a person other than a member with whom the society
