JUDGMENT :- This is an appeal by Basti Sahkari Ganna Samiti Limited, Basti, defendants, against the order dated 1-8-1964 of the Additional Civil Judge of Basti, allowing the appeal of Suraj Nath Upadhyay, plaintiff, and remanding the suit for hearing on merits in accordance with the law. The Munsif of Basti had dismissed the suit on the ground that it was not maintainable and was not cognizable by the civil Court; but the learned Civil Judge has taken a contrary view holding that a part of the suit was maintainable. This necessitated the remand of the suit so that it may be heard and decided on merits.

2. For purposes of this appeal it is not necessary to reproduce in this order the details of the past litigation in connection with the election of the Chairman and Directors of Basti Sahkari Ganna Samiti Limited Eventually Suraj Nath Upadhyay, plaintiff, filed his nomination papers for the post of the Chairman of Directors and also the post of a Director from Kshetra No. 6. Suraj Prasad, defendant respondent No. 6, filed an objection against the nomination papers and the Returning Officer rejected the nomination papers of the plaintiff for both the posts on the ground that he had by entering into the litigation caused a loss of Rs. 15,000, to the Sahkari Ganna Samiti and was, therefore, disqualified to be elected as the Chairman and also Director.

3. Instead of referring the dispute to the Registrar under R. 115 of the U. P. Co-operative Societies Rules, 1936 (to be referred hereinafter as the Rules) for decision by him or by arbitration. Suraj Nath Upadhyay, plaintiff, instituted the present suit for declaration that the order of the Returning Officer rejecting his nomination papers was void and illegal. The Munsif was of opinion that on account of the statutory clause of arbitration the Courts had no jurisdiction to enter into the merits of the dispute. Apparently, he was also of the opinion, though not clearly expressed in his order, that when a special forum for the settlement of the dispute had been laid down in the Rules it was necessary for the plaintiff to move the Registrar and not to file a civil suit for having the order of the Returning Officer set aside.

4. The learned Civil Judge hearing the appeal was, however, of the opinion that the civil Court had the jurisdiction "to go into the charges of malice and the charge that the order of the Returning Officer rejecting the nomination paper of the plaintiff for the post of a Chairman was in breach of a fundamental provision of the Rules because R. 46 (7) was not applicable to it."

5. A part of R. 115 of the Rules has been declared invalid on the ground that it is beyond the rule-making power of the State Government; but the valid part of R. 115 is applicable to the instant case. The material part of R. 115 is :-

"Any dispute touching the business of a registered society,

(i) between members.....of a society

(ii) or between a member.......and the society or its committee

(iii)...... ...... ..... ...... ..... ,and

(iv)..... ..... ..... ...... .... ......

shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar."

Explanation 1. . . . . . . . . . . . . . . . .

Explanation 2. . . . . . . . . . . . . . . . .

Explanation 3. The business of a society includes all matters relating to the objects of the Society mentioned in the bye-laws as also those relating to the election of office-bearers of a Society."

The present dispute relates to the election of office-bearers of a society and hence touches the business of the society and is between the members of the society or between members of the society and the society itself, and hence such a dispute was to be referred in writing to the Registrar either for decision by him or for decision by arbitration.

6. Under R. 116 of the Rules the disputes can be referred for decision to an arbitrator or to two joint arbitrators appointed by him or to three arbitrators. Any party consid

Click Here to Read the rest of this document