IN THE HIGH COURT OF ALLAHABAD
Raghubar Dayal and B. Upadhya, JJ.
KAILASH NATH HALWAI - Appellant
Versus
REGISTRAR CO-OPERATIVE SOCIETY, U.P - Respondents
Special Appeal 194 Of 1957
Decided On : 10/06/1959
CO-OPERATIVE SOCIETIES ACT, 1912 - SECTION 43(2)(1) - RULE 115 - VALIDITY - DISPUTE BETWEEN SOCIETY AND OFFICER - REFERENCE TO ARBITRATION - ULTRA VIRES.
Fact of the Case:
The appellant, an employee of the Consumers Co-operative Society, Kydganj, Allahabad, deposited Rs. 3,000/- for security and claimed this amount and a sum of Rs. 355/- as his dues from the Society. The society referred the dispute to the Registrar, who made over the dispute to the arbitrator. The arbitrator gave an award in favor of the Society. The appellant challenged the validity of the reference to arbitration, arguing that Rule 115 of the Rules framed under Section 43 of the Co-operative Societies Act 1912 was ultra vires.
Finding of the Court:
The Court held that Rule 115 was ultra vires the legislature insofar as it provided for the reference of a dispute between the Society and an officer of the society to the Registrar or by him to the arbitrator. The Court found that the provisions of Section 43(2)(1) of the Co-operative Societies Act, 1912 did not include a dispute between a society and an officer of the society.
Issues: 1. Whether Rule 115 of the Rules framed under Section 43 of the Co-operative Societies Act 1912 was ultra vires the legislature? 2. Whether the provisions of Section 43(2)(1) of the Co-operative Societies Act, 1912 included a dispute between a society and an officer of the society?
Ratio Decidendi: 1. The Court held that Rule 115 was ultra vires the legislature because it went beyond the rule-making power conferred on the Government under Section 43 Sub-section (2) Clause (1) of the Co-operative Societies Act, 1912. 2. The Court held that the provisions of Section 43(2)(1) of the Co-operative Societies Act, 1912 did not include a dispute between a society and an officer of the society because the language of the provision did not contemplate such a dispute.
Final Decision: The Court dismissed the appeal and held that the appellant was not entitled to the relief of certiorari quashing the award of the arbitrators.
( 1 ) THIS is a special appeal against an order of Mr. Justice Mehrotra dismissing the appellants writ petition under Article 226 of the Constitution.
( 2 ) THE appellant was employed by the Consumers Co-operative Society, Kydganj, Allahabad, as a Manager of one of the shops run by the Society. The appellant deposited Rs. 3,000/- for security. He claimed this amount and a sum of Rs. 355/-as his dues from the Society. The society urged certain claims of its own against the appellant and ultimately referred the dispute with respect to its claim against the appellant to the Registrar in view of Rule 115 of the Rules framed under Section 43 of the Co-operative Societies Act 1912. The Registrar made over the dispute to the arbitrator. The arbitrator gave his award holding that the appellant should pay Rs. 895/11/- as principal, Rs. 233/- as interest and Rs. 15/- as other charges to the Society. He also awarded future interest on the amount of the principal from the date of the judgment at the rate of 6 1/4 per cent, per annum.
( 3 ) THE appellant then preferred an appeal to the Registrar Co-operative Societies, U. P. Lucknow. One of the grounds in the memorandum of appeal was that in view of the provisions of Section 43 (2) (1) of the Co-operative Societies Act, 1912 no reference to arbitration could be made. This appeal was dismissed by the Assistant. Registrar, Co-operative Societies, U. P. , lucknow. Thereafter the appellant filed the writ petition which was dismissed by the order under appeal.
( 4 ) LEARNED counsel for the appellant raised three contentions in this Courts. The first is that the appellant was not an Officer of the Society; the second is that Rule 115 was ultra vires of the legislature in so far as it provided that the dispute between the Society or its Committee and any officer of the society touching its business shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar as it went beyond the rule-making power conferred on the Government under Section 43 Sub-section (2) Clause (1); the third point is that a reference to the arbitrator of a dispute between the society and an officer who had ceased to be an officer of the society could not be made under Rule 115.
( 5 ) WE did not allow the learned counsel to make submissions on the third point which was not taken before the learned Judge and which was not even mentioned in the petition. It is nowhere stated in the petition that the appellant had ceased to be the officer of the society prior to the making of the reference. We agree with the learned Judge that the appellant was an officer of the society.
( 6 ) THE contention of the appellant on the second point is that the word officer includes such a person who could guide the policy of the society. Support for such a contention is sought from the definition of the word officer in Clause (d) of Section 2 of the Co-operative Societies Act, 1912. That clause states: "2 (d) officer includes a chairman, secretary, treasurer, member of committee or other persons empowered under the rules or the by-laws to give directions in regard to the business of the society. " The expression officer is not exhaustively defined by this clause. It only mentions what persons would be included in that term, of course, in addition to the persons who would ordinarily answer that description. The word officer would ordinarily mean a person holding some office, and it is not open to much argument that the appellant, as the Manager of one of the shops run by the society, was holding the office of a Manager and was thus an officer of the society. Further, he was in a position to give directions in regard to the business of the shop, a business which was a included in the business of the Society and, therefore, the appellant comes within what is stated in Clause (d) of Section 2 of the Act. We, therefore, agree with the learned judge that the appellant was a
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