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2008 (3) KLO 2539
IN THE HIGH COURT OF KARNATAKA
D.V. Shylendra Kumar, J.
Regular Second Appeal No. 479 of 2002
Suresh - Appellant
Vs.
The Managing Director, Karnataka Milk Federation and Another - Respondents
Decided on 10-3-2008
Held: A perusal of the contents of sub-section (2) indicates that the situations covered by clauses (a) to (e) of this sub-section which are all situations arising in the context of a claim put forth by the society, particularly for recovery [of amount] etc., are all deemed by fiction to be a dispute for the purpose of sub-section (1) of the Act. That means, the situations figure in clauses (a) to (e) of sub-section (2) are all fiction of law taken to be situations automatically covered by the bar indicated in sub-section (1). It is so achieved by fiction.
The fiction employed in sub-section (2) in respect of five situations covered under clauses (a) to (e) is only for the purpose of ensuring that these situations necessarily and inevitably come within the scope of the bar enumerated in sub-section (1) of Section 70 and not that a situation not covered under clauses (a) to (e) or to be taken out of the bar which operates under sub-section (1). It should be noticed that the bar under sub-section (1) regarding Civil Court not having jurisdiction to entertain a suit in respect of a dispute touching upon the aspects and amongst the persons figure in clauses (a) to (d) to sub-section (1) is complete and achieved within sub-section (1) of Section 70 itself and if the object of sub-section (2) was to restrict the scope of operation, the legislature would not have employed any deemed provision to indicate as to what are the disputes touching upon the constitutional management or business of a co-operative society by employing a fiction, it could have simple said that the following alone shall be disputes contemplated under the bar for the purpose of subsection (1). Such is not the language employed. Therefore, the fiction employed in sub-section (2) should be taken to be one to rope in a situation covered under clauses (a) to (e) in sub-section (2) of Section 70 within the bar provided under sub-section (1) of Section 70 of the Act and not to leave any ambiguity about it later to exclude as not contemplated in clauses (a) to (e) to sub-section (2) of Section 70 of the Act.
(Paras 11,12)
(B) Legal Fictions - Object of - Reiterated.
Held: It is a common practice and well understood in legal parlance that a fiction is employed to rope in a situation not otherwise within the contemplation of a particular provision, also to be brought within a particular provision or situation and some times even to take out a situation beyond the scope of any controversy or ambiguity. (Para 12)
Reuslt: Appeal dismissed.
Shylendra Kumar, J.
This second appeal involves a short but interesting question viz., whether the plaintiff, who was admittedly an agent of the respondents-defendants, a society, and whose agency had been terminated, could maintain a suit for recovery of the deposit amount of Rs 2,000/-, which had been deposited at the time of award of agency in favour of plaintiff and can be recovered with interest on the termination of the agency and on the assumption that the termination was bad in law, notwithstanding the provisions of Section 70 of the Karnataka Co-operative Societies Act, 1959 [for short, the Act.
2. The trial Court as well as the first appellate Court having non-suited the plaintiff only on the ground that such a suit was not tenable in the light of the provisions of Section 70 of the Act, to get over such judgments and to get a decree for this amount, the present second appeal. At the time of admission the following substantial question of law had formulated as arising for determination in this second appeal:
1) Whether the suit filed by the appellant is barred under Section 70 of the Karnataka Co-operative Societies Act?
3. The material facts leading to this second appeal are not in dispute viz., that the plaintiff had been appointed an agent of the defendants-milk federation, a co-operative society, to market/supply its products of milk under Nandini brand to consumers on commission basis. It appears the defendants terminated the agency being of the view that the plaintiff had violated the terms of the agency, as according to the defendant-society, the plaintiff was found to be marketing milk other than Nandini brand also. Though the justification for termination of the agency on this ground has been found against the defendant-society, the Courts below, nevertheless, dismissed the suit only on the premise that a civil suit of the nature as filed by the plaintiff was not maintainable, particularly due to the bar provided under Section 70 of the Act. Section 70 of the Act reads as under:
70. Disputes which may be referred to Registrar for decision:
(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises
(a) among members, past members and persons claiming through .members, past members and deceased members, or
(b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society, or
(c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs, or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or
(d) between the society and any other co-operative society or a credit agency such dispute shall be referred to the Registrar for decision, and no Court or labour or revenue Court or Industrial Tribunal shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purpose of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a o-operative society, namely -
(a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a society against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of a President, Vice-President, Chairman, Vice-Chairman, Secretary, Treasurer or Member of Committee of the society;
(d) any dispute between a co-
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