Allahbad High Court
V.G.OAK,S.K.VERMA,G.PRASAD
Abu Bakar - Appellant
Versus
District Handloom Weavers Co-operative Society, Mau - Respondent
Decided On : 02/11/1965
CO-OPERATIVE SOCIETIES ACT - R. 115 - ULTRA VIRES - DISPUTE BETWEEN SOCIETY AND OFFICER - ARBITRATION - OFFICER INCLUDES PAST OFFICER - CAUSE OF ACTION.
Fact of the Case:
A dispute arose between the plaintiffs-appellants and the defendant-respondent No. 1, the District Handloom Weavers' Co-operative Society, Man, district Azamgarh. Defendant-respondent No. 1 referred the dispute to the Registrar who sent it to defendant-respondent No. 2, the District Cooperative Officer, Azamgarh, for arbitration. The plaintiff-appellants thereupon filed a suit for a declaration that the District Co-operative Officer was not a validly constituted Tribunal for deciding the dispute between the appellants and defendant-respondent No. 1.
Finding of the Court:
The Court held that R. 115 of the Rules framed under the Co-operative Societies Act is not ultra vires. The Court further held that the word 'officer' in R. 115 also includes a past officer if the cause of action arose when he was an officer of the society.
Issues: 1. Whether R. 115 of the Rules framed under the Co-operative Societies Act is ultra vires the powers of the Government in so far as it authorises the reference of a dispute between the Society or its committee and any officer of the society to the Registrar to be decided by the Registrar himself or by an arbitrator nominated by the Registrar ? 2. In case the answer to the above question is in the negative, whether the expression 'officer' must be construed as including a past officer ? 3. If so, whether past officer must be construed as referring only to a person who was an officer of the society until the dispute arose, but had ceased to be an officer before the dispute was referred by the society, or also to a person who was an officer at the time business of the society which gave rise to the dispute had been transacted, but had ceased to be its officer before the dispute arose ?
Ratio Decidendi: The Court held that S. 43, Sub-S. (2) of the Co-operative Societies Act is merely illustrative of the power conferred by S. 43, Sub-S. (1) of that Act. The Legislature considered the rules on matters enumerated in S. 43, Sub-S. (2), cl. (1) necessary for carrying out the purposes of the Act. If the Legislature thought that a rule providing for reference to arbitration of a dispute between members or past members of the society or persons claiming through a member or past member or between a member or past member or persons so claiming and the committee or any officer was necessary for carrying out the purposes of the Act, there appears to be no reason for holding that a rule providing for reference to arbitration of a dispute between the society or its committee and any officer of the society is extraneous to the purposes of the Act and such a rule must be struck down as ultra vires.
Final Decision: The Court answered the three questions referred to it as follows: Question No. 1. - No. Question Nos. 2 and 3. - The word "officer" includes a past officer if the cause of action arose when he was an officer of the society.
S. K. VERMA, J. : A Division Bench of this Court has referred three questions for answers by a larger Bench. This Full Bench has been constituted for that purpose. The three questions referred are these :-
1. Whether R. 115 of the Rules framed under the Co-operative Societies Act is ultra vires the powers of the Government in so far as it authorises the reference of a dispute between the Society or its committee and any officer of the society to the Registrar to be decided by the Registrar himself or by an arbitrator nominated by the Registrar ?
2. In case the answer to the above question is in the negative, whether the expression 'officer' must be construed as including a past officer ?
3. If so, whether past officer must : be construed as referring only to a person who was an officer of the society until the dispute arose, but had ceased to be an officer before the dispute was referred by the society, or also to a person who was an officer at the time business of the society which gave rise to the dispute had been transacted, but had ceased to be its officer before the dispute arose ?
2. A dispute arose with regard to rendering of accounts between the plaintiffs-appellants and the defendant-respondent No. 1, the District Handloom Weavers' Co-operative Society, Man, district Azamgarh, Defendant-respondent No. 1 referred the dispute to the Registrar who sent it to defendant-respondent No. 2, the District Cooperative Officer, Azamgarh, for arbitration. On the reference two suits, Nos. 79 and 80 of 1951 and 1952, were registered before the arbitrator, defendant-respondent No. 2. The plaintiff-appellants thereupon filed a suit for a declaration that the District Co-operative Officer was not a validly constituted Tribunal for deciding the dispute between the appellants and defendant-respondent No. 1. The suit was dismissed by the learned Civil Judge of Azamgarh.
3. The case of the appellants was that they were neither members nor officers of defendant-respondent No. 1 and, that, therefore, the reference to the arbitrator was without jurisdiction. A number of pleas were raised in defence giving rise to a number of issues, but we are concerned only with the issue whether the defendant-respondent No. 2 was a competent Tribunal for deciding the dispute between the parties. The defendants respondents relied upon S. 43 of the Co-operative Societies Act and R. 115 framed thereunder. The portions of S. 43 of the Act which are relevant for our purpose are reproduced below :-
"43. (1) The State Government may, for the whole or any part of the State and for any registered society or class of such societies, make rules to carry out the purpose of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may -
* * * *
(1) provide that any dispute touching the business of a society between members or past members of the society or persons claiming through a member or past member or between a member or past member or persons so claiming and the committee or any officer shall be referred to the Registrar for decision or, if he so directs, to arbitration, and prescribe the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrator or arbitrators, and the enforcement of the decisions of the Registrar or the awards of arbitrators."
Rule 115 framed under the Co-operative Societies Act reads as follows :-
"115. Any dispute touching the business of a registered society (i) between members or past members of a society or persons claiming through a member or past member, (ii) or between a member or a past member or persons so claiming and the society or its committee or any officer of the society, (iii) between the society or its committee and any officer of the society, and (iv) between two or more registered societies, shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the
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