IN THE HIGH COURT OF BOMBAY
R.A. Jahagirdar M.S. Jamdar, JJ.
Maharashtra Co-op. Housing Finance Society Ltd. others... Petitioners.
Versus
V.S. Loni another... Respondents.
Writ Petition No. 1568 of 1982, decided, on 7-2-1984.
Advocates appeared :
M.A. Rane, for petitioners.
S.B. Sukhtankar with P.M. Mengane, for respondent No. 1.
R.D. Rane, A.G.P., for respondent No. 2
CO-OPERATIVE SOCIETY - DISPUTE - JURISDICTION - CO-OPERATIVE COURT - SECTION 91(1) OF THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT - CLAIM FOR DAMAGES FOR WRONGFUL DISMISSAL - WHETHER TOUCHES THE MANAGEMENT OF THE SOCIETY - INTERPRETATION.
Fact of the Case:
The petitioner, a Co-operative Society, challenged the jurisdiction of the Co-operative Court to hear and decide a dispute referred by the respondent, a former employee, seeking damages for wrongful dismissal. The petitioner contended that the dispute did not fall under section 91(1) of the Maharashtra Co-operative Societies Act, which confers jurisdiction on the Co-operative Court to adjudicate disputes touching the constitution, management, or business of a society.
Finding of the Court:
The Court held that a dispute involving a claim for damages on the allegation that the society had wrongfully terminated the employee's services was within the ambit of the term "management" in section 91 of the Co-operative Societies Act. The Court reasoned that a society must work through human beings and that the management of the society must be carried out with the help of its employees. Therefore, a dispute arising out of a contract between a Co-operative Society and its employees or a claim based on a breach of such contract could be considered a dispute touching the management of the society.
Issues: 1. Whether the dispute involving a claim for damages for wrongful dismissal falls under section 91(1) of the Maharashtra Co-operative Societies Act. 2. Whether such a dispute touches the management of the Co-operative Society.
Ratio Decidendi: 1. The Court interpreted section 91(1) of the Maharashtra Co-operative Societies Act and held that a dispute involving a claim for damages on the allegation that the society had wrongfully terminated the employee's services was within the ambit of the term "management" in the provision. 2. The Court reasoned that a society must work through human beings and that the management of the society must be carried out with the help of its employees. Therefore, a dispute arising out of a contract between a Co-operative Society and its employees or a claim based on a breach of such contract could be considered a dispute touching the management of the society.
Final Decision: The Court dismissed the petition and upheld the jurisdiction of the Co-operative Court to hear and decide the dispute.
2. The first respondent, hereinafter referred to as "the respondent", was employed by the petitioner-Society sometime in the year 1976. He became the manager of a branch of the petitioner-Society at Aurangabad. When he was holding this office his services were terminated by an order dated 4th February, 1981. The respondent made an attempt to get reinstated by approaching the Commissioner for Co-operation and there were pursuant to that approach certain proceedings between the parties to which no reference need be made here. Ultimately the Registrar of Co-operative Societies by his order dated 8th April, 1982 held that the dispute relating to the dismissal of the respondent from the service of the petitioner-Society was a dispute within the meaning of section 91(1) of the Maharashtra Co-operative Societies Act, hereinafter referred to as "the Co-operative Societies Act", and directed that it should be referred to the Co-operative Court No. 1, Bombay, for disposal according to law.
3. Accordingly, the dispute was referred to the Co-operative Court. Originally the plaint presented to the Court by the respondent prayed for a declaration that the order dated 4th February, 1981 be declared null and void ab initio and, therefore, ineffective and illegal. The effect of granting this prayer would undoubtedly have been the reinstatement of the respondent in the service of the petitioner-Society. Realising the insurmountable difficulties in the way of granting a relief of this type the respondent amended the plaint extensively and in particular made amendment in the prayer clause. The prayer clause based upon the dismissal order being void was retained but in the alternative it was prayed on behalf of the respondent that the petitioner. Society should be ordered to pay to the respondent damages equivalent to the emoluments which he actually drew at the time when the notice of termination was served upon him. It was further prayed that damages at that rate shall be made payable to the respondent until he secures an alternative job carrying not less than the emoluments which he was earning with the petitioner-Society. In other words, it was the case of the respondent that if the prayer for reinstatement could not be granted, he should be awarded damages calculated in the manner in which it has been mentioned in the prayer-clause. Thus the suit before the Co-operative Court is not a suit for mere reinstatement of the respondent in the petitioner-Society; the suit includes a prayer for the award of damages on the averments which have been made in the body of the plaint alleging that the order of dismissal was illegal and wrongful.
4. At this stage we may briefly refer to the broad averments in the plaint which has been presented to the Co-operative Court because in the course of his arguments Mr. Rane appearing for the petitioner-Society, often referred to the same in support of his arguments. The respondent was given the history of his service with the petitioner-Society. Thereafter he has made mention of certain circumstances which according to him indicated that the petitioner-Society has taken action of dismissing him from the service of the petitioner-Society mala fide with the intention of victimising him on account of malice borne by the petitioner-Society towards him. The respondent has also mentioned that the order and the resolution forming the basis of the termination of his services were without the prior approval of the Registrar of Co-operative Societies and, therefore, the said
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