industrial dispute act not applicable to employees of co-operative societies - kerala high court...

8/18/2019 Industrial Dispute Act Not Applicable to Employees of Co-operative Societies - Kerala High Court Judgment

1/191

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT:

THE HONOURABLE THE CHIEF JUSTICE MR.ASHOK BHUSHAN

THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN

THE HONOURABLE MR.JUSTICE ANTONY DOMINIC

THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

&

THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS

MONDAY, THE 14TH DAY OF SEPTEMBER 21!"2#RD BHADRA, 1$#%

A.NO. 2!1' OF 2$ ( )

************************

AGAINST JUDGMENT DATED 1#.+.2$ IN .P(C) NO.#+!4 OF 2%OF THE HIGH COURT OF KERALA

APPELLANT(S)"PETITIONER:

************************

CHIRAYINKEEHU SER-ICE CO*OPERATI-E BANK

BANK LTD.NO.11!!, CHIRAYINKEEHU, REP.

BY ITS SECRETARY.

BY AD-. SRI.LIJU. M.P

RESPONDENT(S)"RESPONDENTS:**************************

1. K.SANTHOSH

RAILAY STATION, CHIRAYINKEEHU.

2. LABOUR COURT, KOLLAM.

R2 BY AD-. SRI.BECHU KURIAN THOMAS

R. BY AD-. SRI.PAUL JACOB (P)

R. BY AD-. SRI.ENOCH DA-ID SIMON JOEL

R. BY AD-. SRI.S.SREEDE- R. BY AD-. SRI.RONY JOSE

R. BY AD-. SRI.GEORGE A.CHERIAN

BY SPECIAL GO-ERNMENT PLEADER SMT. GIRIJA GOPAL

THIS RIT APPEAL HA-ING BEEN FINALLY HEARD ON 12.#.21!

ALONG ITH .A. NOS.1+4 AND %'4 OF 21, THE COURT ON 14.$.

21! DELI-ERED THE FOLLOING:

www.sahakari.net


2/191

“C.R.”

ASHOK BHUSHAN, C.J.,THOTTATHIL B.RADHAKRISHNAN,

ANTONY DOMINIC, A.M. SHAFFIQUEAND

ALEXANDER THOMAS, JJ.====================================

W.A. No.2516 of 2009,W.A. No.764 of 2010

& W.A. No.184 of 2010

====================================

Dated t!" te #$t da% &' Se(te)*e+, -#

J U D / M E N T

0A"&1 B2"a3, C.J. '&+ !)"e4' a3d '&+ A.M.Sa''!52e, J.6

This Larger Bench has been constituted on a reference

dated 15.12.2014 made by a Three Judge Bench. While

hearing the Writ Aeals! a "i#ision Bench e$ressed its

doubt regarding the correctness of an earlier "i#ision Bench

Judgment reorted in Thodupuzha Taluk General

arke!"n# $o%opera!"e 'o("e!) . "(hael 'e*a+!"an

%2010 &1' (LT )*+,. The "i#ision Bench referred the matter

for consideration by a -ull Bench #ide its order dated

0+.12.2010. Before the "i#ision Bench in the Writ Aeals

and Writ etitions! the challenge /as to the


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2

roceedingsorders assed by the 3tate o#ernment and

Labour ourts in e$ercise of the 6urisdiction under the

7ndustrial "isutes Act! 1)48 %hereinafter referred to as 9the

1)48 Act:,. AellantsWrit etitioners are ooerati#e

Ban;s! i.e.! entral ooerati#e 3ocieties /ho challenged

the ordersroceedings under the 1)48 Act on the ground

that the roceedings initiated by the emloyees of the o

oerati#e 3ocieties under the 1)48 Act are /ithout

6urisdiction since 6urisdiction under the 1)48 Act is e$cluded

by #irtue of 3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

*

“The question raised in the connected writ appeals

is whether industrial dispute between the management of

a society and an employee should be settled before the

Labour Court or Industrial Tribunal to which it is referred

by Government or whether it should be decided by the

Arbitration Court under Section !"#$"d$ of the Co%

operative Societies Act& A 'ivision (ench of this Court in

the decision in Thodupu)ha Talu* General +ar*eting Co%

op&Society v& +ichael Sebastian reported in "#,-, "-$

.&L&T& !/0$ held that both the Industrial Tribunal and Co%

operative Arbitration Court have concurrent 1urisdiction

for settling industrial disputes between management and

wor*ers of a society& This position is also supported by a

earlier single (ench decision of this Court reported in

(oard of 'irectors2 3dava Service Co%operative (an* v&

The Co%operative Arbitration Court and others "#,,0 "/$

.&L&4 #5$& It is seen from the 1udgments that the

Government 6leader conceded before the 'ivision (ench

that the amendment introduced in the year #,,, under

Section !"#$"d$ of the Co%operative Societies Act was

not assented to by the 6resident& 7owever2 before us2

counsel appearing for the society and the Government

6leader submitted that amendment may be only

clarificatory and even the original provision of Section !

"-$"c$ ta*es in industrial disputes between societies and

employees and with these provisions of the Act got the

assent of the 6resident& Section !"-$"c$ of the Act will

prevail over the provisions of the Industrial 'isputes Act

by virtue of the operation of Article #89"#$ of the


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

4

Constitution of India& :e find force in the contention of

the counsel because2 if the amendment made in #,,, is

only clarificatory in nature2 then the original provision in

the statue ta*es in all industrial disputes which have to be

settled e;clusively by Arbitration Courts constituted under

the Co%operative Societies Act& 6rima facie2 we are not

able to concur with the view e;pressed by the 'ivision

(ench that the Arbitration Court2 Industrial Tribunal and

Labour Courts have concurrent 1urisdiction in the matter&

In our view2 if the provision of the Co%operative Societies

Act is valid2 then the Industrial Tribunal and Labour Court

will not have 1urisdiction in the matter and the 1urisdiction

of the Co%operative Arbitration Court will be e;clusive by

virtue of the operation of Article #89"#$ of the

Constitution& :e2 therefore2 refer these cases for

consideration by a


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

5

consideration before ans/ering the issues raised. The Three

Judge Bench thus formulated eight issues /hich ha#e arisen

before the -ull Bench and framed one more =uestion! i.e.!

issue >o.i$ as to /hether the t/o earlier -ull Bench

6udgments of this ourt lay do/n the correct la/? 7t is useful

to reroduce the ) 7ssues framed by the Three Judge Bench

/hich are u for consideration before this Larger Bench

(i) Whether Sec.69 the 1969 Act as

enacted contemplate disputes relating to

service between the Co-operative Societ

and its emploees to be re!erred to "abour

Court !or decision#

(ii) Whether Sec.69 as enacted

intends to override an contrar provision

in an law including the provisions o! the

19$% Act b virtue o! Sec.69(1) o! the 1969

Act#

(iii) Whether the 1969 Act was

enacted with &residential assent#

(iv) Whether the Amendment Act 1 o!

' b which amendments were made in

Sec.69 o! the 1969 Act are clari!icator in

nature#


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<

(v) Whether the Amendments made

in Sec.69 o! the 1969 Act b the

Amendment Act 1 o! ' are repugnant to

the provisions o! the 19$% Act and hence

inoperative#

(vi) Whether !or entertaining a

dispute regarding disciplinar proceedings

against emploees and o!!icers o! the Co-

operative an* both the Co-operative

Arbitration Court as well as the "abour

Court shall have concurrent +urisdiction#

(vii) Whether the Co-operative

Arbitration Court alone has e,clusive

+urisdiction to decide the dispute

pertaining to the disciplinar action

initiated against the o!!icers and emploees

o! the Co-operative an* and the "abour

Court shall have no +urisdiction to

entertain an such dispute#

(viii) Whether the ivision ench

+udgment o! this Court in hodupu/ha

alu* 0eneral ar*eting Co-operative

Societ v. ichael Sebastian ('1 213 4"

959) las down the correct law#

(i,) Whe!her !he ull -en(h


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

8

ud#/en!+ of !h"+ $our! % -ala(handran

. epu!) e#"+!rar 1978 3T 249 .-. a+

ell a+ ..'herl) . re+"den!,

arappura/ "lk rodu(er+ $o%opera!"e

'o("e!) !d. 2007 1: 3T 809 la) don

!he (orre(! la !ha! under 'e(.69 of !he

1969 A(! una/ended !he d"+pu!e+ of

e/plo)ee+ and off"(er+ of !he $o%opera!"e'o("e!"e+ re#ard"n# +er"(e /a!!er+ (anno!

*e adud"(a!ed;

The Larger Bench concluded the hearing in these Writ

Aeals and orders /ere reser#ed.

*. 7 had the ad#antage of going through the oinion

reared by esteemed Brother Justice Antony "ominic.

Justice Antony "ominic in his elaborate oinion has

concluded that 6urisdiction of the Labour ourt under the

1)48 Act and that of the Arbitration ourt under the 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+

earlier t/o -ull Bench 6udgments do not re=uire

reconsideration. 7 regret my inability to agree /ith the

abo#e oinion! hence 7 roceed to consider the 7ssues in the

follo/ing manner

A$T'

4. -acts in brief gi#ing rise to these Writ Aeals are

@eference of facts in W.%, >o.12)4) of 2010 %The

all"(hal ar/e+ 'er"(e $o%opera!"e -ank !d. No.T%

677, Th"ruanan!hapura/ . '!a!e of 3erala and

before us. The arties shall be referred to as arrayed in W.

%, >o.12)4) of 2010. The second resondent /as an

emloyee of the Ban; /hose ser#ice /as terminated by the

Ban; by order dated 05.0


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)

*0.12.200) made a reference of the industrial disute for

ad6udication before the Labour ourt. The Labour ourt

issued summons to the Ban;. Writ etition >o.12)4) of

2010 /as filed by the allichal -armers 3er#ice ooerati#e

Ban; raying for the follo/ing reliefs

“(i) Call for the records leading to Exhibit P5 and

quash the same by issuing a writ of certiorari.

(ii) To declare that the roceedings ending before

the !abour Court" #ollam in $.%.&'* is ultra+ires to ,ection -

of the #C, /ct and hence not maintainable.0

The abo#e Writ etition /as dismissed by a learned 3ingle

Judge #ide 6udgment dated 20.04.2010 relying on the

6udgments in A.. Na#ar 'er"(e $o%opera!"e -ank .

'!a!e of 3erala 2010 1: 3T 55, and Thodupuzha

Taluk General arke!"n# $o%opera!"e 'o("e!) .

"(hael 'e*a+!"an /herein it /as held that both the

Labour ourt and the ooerati#e Arbitration Tribunal ha#e

concurrent 6urisdiction to entertain disutes raised by

emloyees of the ooerati#e 3ocieties. Writ Aeal >o.8o.251< of 200) has been


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

10

filed against the 6udgment of the learned 3ingle Judge dated

1*.0+.200) in W.%, >o.*0+54 of 2008 %$h"ra)"hkeezhu

'er"(e $o%opera!"e -ank !d. No.115. . 3.'an!ho+h

and Ano!her by /hich Writ etition the a/ard of the Labour

ourt in fa#our of the emloyee of the ooerati#e 3ociety

/as challenged. The learned 3ingle Judge /hile dismissing

the Writ etition relied on the 6udgment of the Ae$ ourt in

harappa . -"apur $o%op. "lk rodu(er+ 'o("e!"e+

n"on !d 2007: 9 '$$ 109, and held that the

amendment in the 1)o.1+4 of 2010 has been filed by A.. Na#ar 'er"(e $o%

op. -ank !d., No..58= against '!a!e of 3erala and

Ano!her against the 6udgment dated 04.12.200) assed in

W.%, >o.28)0) of 200) filed by A.. Na#ar 'er"(e $o%

op. -ank !d. reorted in A.. Na#ar 'er"(e $o%op.

-ank !d. #. '!a!e of 3erala %2010 &1' (LT 55, in /hich

Writ etition order of the 3tate o#ernment dated


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

11

18.08.200) referring the industrial disute under the 1)48

Act /as under challenge. The Ban; had dismissed the *rd

resondent therein after conducting en=uiry. 7n the Writ

etition aart from challenging the order of reference! a

declaration /as also sought that 3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

12

'->''>


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

1*

settlement of disutes. 3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

14

roceedings under the 1)48 Act is barred and the learned

3ingle Judge in dismissing the Writ etition filed by the o

oerati#e 3ociety committed error. 7t is submitted that all

decisions rendered by the 3ingle Bench! "i#ision Bench and

-ull Bench ta;ing contrary #ie/ does not lay do/n the correct

la/.

8. Learned counsel for the resondentsemloyees

refuting the submissions of the learned counsel for the

aellants contended that discilinary roceedings against

the emloyees of the ooerati#e 3ocieties /ere ne#er

co#ered by the ro#isions of the 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

1<

residential assent. (erala aCette dated 11.04.1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

18

>'$''>


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

1+

3ocieties ha#e been reealed. The Fadras ooerati#e

3ocieties Act! 1)*2 /as in force in the Falabar "istrict

/hereas the Tra#.ochin ooerati#e 3ocieties Act! 1)51

/as oerating in the rest of the area. -or interreting a

statutory ro#ision an earlier ari materia enactment can

al/ays be used as e$ternal aid to interret the legislation.

What /as the statutory scheme of the 1)*2 and 1)51 Acts

thus is rele#ant to be noted /hich shall thro/ considerable

light /hile interreting the ro#isions of the 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

1)

claiming through members" ast members and deceased

members" or

(b) between a member" ast member or erson

claiming through a member" ast member or deceased member

and the society" its committee or any officer" agent or ser+ant of

the society or"

(c) between the society or its committee and any ast

committee" any officer" agent or ser+ant or any ast officer" ast

agent or ast ser+ant" or the nominee" heirs or legal

reresentati+es of any deceased officer" deceased agent or

deceased ser+ant of the society.0

3ection 51%2, ro#ided that the @egistrar on receit of the

such reference either may decide the disute himself or

transfer the same to another erson /ho has been in#ested

by the 3tate o#ernment /ith o/ers in that behalf. Dnder

3ection 51%5,! the @egistrar /as emo/ered to re#ise any

decision of the Arbitrator or Arbitrators to /hom the disute

/as referred. 3ection 51%


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

20

by the erson to whom such reference was transferred or by the

arbitrator or arbitrators to whom it was referred.

-(a) /ny decision that may be assed by the 4egistrar

under clause (a) of sub3section () or under sub3section (5) shall

be final and shall not be called in question in any ci+il or re+enue

court.

(b) /ny decision that may be assed by the erson to

whom a reference is transferred or by the arbitrator or arbitrators

to whom it is referred shall" sa+e as otherwise ro+ided in sub3

section (5)" be final and shall not be called in question in any ci+il

or re+enue court.

To the similar effect are the ro#isions of 1)51 Act. 3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

21


deceased ser+ant of the society" or

(d) between the society and any other registered

society"

such disute shall be referred to the 4egistrar for decision.1

3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

22

14. >o/ /e refer to the ro#isions of the 1)


24/191


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

24

committee" any officer" agent or emloyee or any ast officer" ast

agent or ast emloyee or the nominee" heirs or legal


deceased emloyee of the society; or

(d) between the society and any other society; or

(e) between a society and the members of a society affiliated to it ;

or

(f) between the society and a erson" other than a member

of the society" who has been granted a loan by the society or with

whom the society has or had business transactions or any erson

claiming through such a erson; or

(g) between the society and a surety of a member" ast

member" deceased member or emloyee or a erson" other than a

member" who has been granted a loan by the society" whether

such a surety is or is not a member of the society; or

(h) between the society and a creditor of the society" such

disute shall be referred to the 4egistrar for decision and no court

shall ha+e 7urisdiction to entertain any suit or other roceeding in

resect of such disute.0

As er 3ection 80! the @egistrar has to decide the disute

himself or refer it to the Arbitrator. As er 3ection 80

decision of the @egistrar or Arbitrator is final sub6ect to

3ection +2. hater G777 of the 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

25

@egistrar or Arbitrator under 3ection 80%*, /as made

aealable under 3ection +2. o/er of re#ision /as also

conferred to the Tribunal under 3ection +4. 3ection +5

ro#ided for o/er of re#ie/ by the Tribunal. o#ernment

has also been gi#en o/er of re#ision under 3ection +8. The

Tribunal has also been emo/ered to e$ercise #arious

o/ers of a ci#il court by 3ection )+ of the 1)!"t+a+, et9. t& a;e 9e+ta!3 (&?e+"

&' 9!;!4 9&2+t.3 (*) $n exercising the functions conferred on it or

him by or under this /ct" the Tribunal" the 4egistrar" the arbitrator or any other erson deciding a disute and the liquidator of a

society shall ha+e all the owers of a ci+il court while trying a suit

under the Code of Ci+il Procedure" *6 (Central /ct 5 of *6)"

in resect of the following matters" namely


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

2<

behalf may administer the oath to the deonent.

*. Ba+ &' @2+!"d!9t!&3 &' 9&2+t".3 :o ci+il or re+enue

court shall ha+e any 7urisdiction in resect of any matter for which

ro+ision is made in this /ct.0

18. The 1)


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28

against the order of the @egistrar under the earlier

enactments. The 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

2+

no such e$clusion in the 1)*2 and 1)51 Acts rather disute

regarding discilinary action against a aid ser#ant /ere

e$ressly e$cluded from reference to @egistrar /hich

ermitted emloyees to a#ail other -orum including -orum

under the 1)48 Act.

1+. The 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

2)

earlier one in ari materia is suggesti+e of the intention of the

!egislature that the language so used in the later statute is used in

the same sense as in the earlier one" change of language in a

later statute in ari materia is suggesti+e that change of

interretation is intended.> The learned author also refers to the

obser+ations of !ord @ac@illan in %. 4. Araser B Co. !td. +. The

@inister of :ational 4e+enue" /$4 * PC * < >Dhen an

amending /ct alters the language of the rincial ,tatute" the

alteration must be ta2en to ha+e been made deliberately.>0

-!& The submission! /hich has been ressed by the

learned counsel aearing for the resondents emloyees is

that the definition of the /ord disute under 3ection 2%i,

does not contemlate disute ertaining to ser#ice matters

of emloyees of ooerati#e 3ocieties. 7t is submitted that

ser#ice disute of the emloyees cannot be regarded as the

disute touching the business! constitution! establishment or

management of the 3ociety. The /ord disute has been

defined in .@amanathans La/ Le$icon in the follo/ing

manner

“/ conflict or contest; sometimes used in the sense of

contro+ersy. “Contro+ersy" debate" heated contention" quarrel"

difference of oinion.0

20. As er 3ection +0 of the 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

*0

establishment consists of the officers and emloyees of o

oerati#e 3ocieties. 3ection +0%2, ma;es the secific

reference to the number and designation of the officers and

ser#ants of different classes of ooerati#e 3ocieties. Thus!

the officers and ser#ants of the 3ociety are art of the

establishment as er the statutory scheme of the 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

*2

7n the abo#e case an industrial disute bet/een the o

oerati#e entral Ban;s and their /or;men /as referred by

the go#ernment of Andhra radesh to the 7ndustrial Tribunal.

The sub6ect matter of the disute consisted of ser#ice

conditions and transfer of emloyees. ne of the ob6ections

raised on behalf of the Ban; /as that the ro#isions of the

Andhra radesh ooerati#e 3ocieties Act e$clude the

6urisdiction of the 7ndustrial Tribunal to deal /ith the same

disute under the 7ndustrial "isutes Act. 7n the abo#e case!

the Ae$ ourt considered the e$ression 9touching the

business of the 3ociety:. @eferring to t/o earlier 6udgments!

the Ae$ ourt held as follo/s

“$t is true that ,ection -* by itself does not contain any

clear indication that the 4egistrar cannot entertain a disute

relating to alteration of conditions of ser+ice of the emloyees of a

registered society; but the meaning gi+en to the exression

1touching the business of the society1" in our oinion" ma2es it

+ery doubtful whether a disute in resect of alteration of

conditions of ser+ice can be held to be co+ered by this exression.

,ince the word 1business1 is equated with the actual trading or

commercial or other similar business acti+ity of the society" and

since it has been held that it would be difficult to subscribe to the

roosition that whate+er the society does or is necessarily

required to do for the urose of carrying out its ob7ects" such as


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

**

laying down the conditions of ser+ice of its emloyees" can be

said to be a art of its business" it would aear that a disute

relating to conditions of ser+ice of the wor2men emloyed by the

society cannot be held to be a disute touching the business of

the society.0

2*. 7n the resent case the submissions ressed by

the learned counsel for the aellant is not on the basis of

the e$ression touching the business of 3ociety! rather!

disute regarding ser#ice matters of emloyees is sought to

be included in the term establishment. The Ae$ ourt in

Central Bank Co-operative Bank (supra) thus held that

the disute ertaining to ser#ice conditions of emloyees /as

not co#ered by 3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

*4

3ection 2%i,! /hich encomasses in itself matter touching the

establishment shall as er a statutory scheme include the

disute touching the establishment! i.e.! touching the officers

and ser#ants of the ooerati#e 3ocieties! since the officers

and ser#ants of ooerati#e 3ocieties are art of the

establishment.

25. "iscontinuation of the e$cetion as engrafted in

3ection 51 of the 1)*2 Act and 3ection


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*5


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*<

enumerated in the oncurrent List! then! sub6ect to the

ro#isions of clause %2,! the la/ made by arliament shall

re#ail and the la/ made by the Legislature of the 3tate

shall! to the e$tent of the reugnancy! be #oid. Article 254%2,

ro#ides that /here a la/ made by the Legislature of a 3tate

/ith resect to one of the matters enumerated in the

oncurrent List contains any ro#ision reugnant to the

ro#isions of an earlier la/ made by arliament or an e$isting

la/ /ith resect to that matter! then the la/ so made by the

Legislature of such 3tate shall! if it has been reser#ed for the

consideration of the resident and has recei#ed his assent!

re#ail in that 3tate. The 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

*8

number of cases. The 6udgment of the Ae$ ourt in Co-

operative Central Bank Ltd.'s case %sura, /as a case

/here the abo#e issue came u for consideration. The Ae$

ourt in the abo#e case has held that the Act is an enactment

assed by the 3tate Legislature /hich recei#ed the assent of

the resident! so that! if any ro#ision of a entral Act!

including the 7ndustrial "isutes Act! is reugnant to any

ro#ision of the Act! the ro#ision of the Act /ill re#ail and

not the ro#ision of the entral 7ndustrial "isutes Act. The

follo/ing /as obser#ed by the Ae$ ourt in aragrah 2 of

the 6udgment

“. ....$t is no doubt true that the /ct is an enactment assed

by ,tate !egislature which recei+ed the assent of the President" so

that" if any ro+ision of a Central /ct" including the $ndustrial

%isutes /ct" is reugnant to any ro+ision of the /ct" the ro+ision

of the /ct will re+ail and not the ro+ision of the Central $ndustrial

%isutes /ct. The general roosition urged that the 7urisdiction of

the $ndustrial Tribunal under the $ndustrial %isutes /ct will be

barred if the disutes in question can be cometently decided bythe 4egistrar under ,ection -* of the /ct is" therefore" correct and

has to be acceted. The question" howe+er" that has to be

examined is whether the industrial disute referred to the Tribunal

in the resent cases was such as was required to be referred to

the 4egistrar and to be decided by him under ,ection -* of the


39/191


40/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

*)

emloyees are >wor2men> as defined in the $% /ct. Clause (*) of

/rticle 5 ro+ides that if any ro+ision of a law made by a ,tate

!egislature is reugnant to any ro+ision of an existing law with

resect to one of the matters enumerated in the Concurrent !ist"

then" sub7ect to the ro+isions of clause ()" the existing law shall

re+ail" and the law made by the !egislature of the ,tate shall" to

the extent of the reugnancy" be +oid. Clause () of /rticle 5"

howe+er" ro+ides that where a law made by the !egislature of a

,tate with resect to one of the matters enumerated in the

Concurrent !ist" contains any ro+ision reugnant to an existing law

with resect to that matter" then" the law so made by the !egislature

of such ,tate shall" if it has been reser+ed for the consideration of

the President and has recei+ed his assent" re+ail in that ,tate. The

question of reugnancy can arise only with reference to a

legislation made by Parliament falling under the Concurrent !ist or

an existing law with reference to one of the matters enumerated in

the Concurrent !ist. $f a law made by the ,tate !egislature co+ered

by an Entry in the ,tate !ist incidentally touches any of the entries

in the Concurrent !ist" /rticle 5 is not attracted. ut where a law

co+ered by an entry in the ,tate !ist (or an amendment to a law

co+ered by an entry in the ,tate !ist) made by the ,tate !egislature

contains a ro+ision" which directly and substantially relates to a

matter enumerated in the Concurrent !ist and is reugnant to any

ro+ision of an existing law with resect to that matter in the

Concurrent !ist then such reugnant ro+ision of the ,tate law will

be +oid. ,uch a ro+ision of law made by the ,tate !egislature

touching uon a matter co+ered by the Concurrent !ist" will not be

+oid if it can co3exist and oerate without reugnancy with the

ro+isions of the existing law. Dhat is stated abo+e with reference

to an existing law" is also the osition with reference to a law made

by the Parliament. 4eugnancy is said to arise when < (i) there is


41/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

40

clear and direct inconsistency between the Central and the ,tate

/ct; (ii) such inconsistency is irreconciliable" or brings the ,tate /ct

in direct collision with the Central /ct or brings about a situation

where obeying one would lead to disobeying the other. $f the ,tate

!egislature" while ma2ing or amending a law relating to co3

oerati+e societies" ma2es a ro+ision relating to labour disutes

falling under the Concurrent !ist" then /rticle 5 will be attracted if

there is any reugnancy between such ro+ision of the ,tate /ct

(@C, /ct) with the existing law ($% /ct). De will ha+e to examine

the issue in this case 2eeing the abo+e legal osition in mind.0

*1. We ha#e to find out from the statutory scheme in

the 1)


42/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

41

/hile elaborating interretation of nonobstante clause said

as follo/s

“/ clause beginning with >notwithstanding anything

contained in this /ct or in some articular ro+ision in the /ct or in

some articular /ct or in any law for the time being in force>" is

sometimes aended to a section in the beginning" with a +iew to

gi+e the enacting art of the section in case of conflict an

o+erriding effect o+er the ro+ision or /ct mentioned in the non3obstante clause. $t is equi+alent to saying that in site of the

ro+ision or /ct mentioned in the non obstante clause" the

enactment following it will ha+e its full oeration or that the

ro+isions embraced in the non obstante clause will not be an

imediment for the oeration of the enactment. Thus a non3

obstante clause may be used as a legislati+e de+ice to modify the

ambit of the ro+ision or law mentioned in the non3obstante clause

or to o+erride it in secified circumstances.

**. The use of nonobstante clause in 3ection


43/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

42

statutory ro#ision beginning /ith nonobstante clause in


44/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

4*

said area" shall stand rescinded" whether such forest roduce is

grown or found on land owned by ri+ate ersons or on land

owned by the ,tate o+ernment or in o+ernment forests

ro+ided that rescission of such contracts and grants shall not

affect the customary rights" if any" of the local Tribals to gather

and collect the secified forest roduce;

...............1

This amendment" beginning with the non obstante clause"

ro+ides that" on the coming into force of /ct of *6* by

notification issued under ,.* (9)" all contracts relating to any

secified forest roduce for the urchase" sale" collection etc."

including grants of rofits a rendre" whether such roduce is

grown or found ri+ate land or on o+ernment land or in

o+ernment forest" would stand rescinded" but such rescission

would not affect customary right" if any" en7oyed by the local tribals

to gather and collect secified forest roduce.

*. This sub3section o+errides 1any ro+ision to the contrary in

any other law1. These words are an exression of the widest

amlitude engulfing all rules ha+ing the force of law" whiche+er be

the source from which they emanate > statutory" 7udicial or

customary 3 the only excetion" in the context" being the

Constitution of $ndia. This means" once brought into force the sub3

section will" sub7ect to the Constitution" oerate with full +igour"

notwithstanding any statute or 7udicial decision or any other rule

recognising any right or interest or grant inconsistent with or

contrary to the ro+isions of the sub3section.0

*5. There is one more indication in 3ection


45/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

44

referred to under 3ection


46/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

45

As noted abo#e the e$cetion ro#ided for in the 1)*2 Act

and 1)51 Act in the /ords 9other than a disute regarding

discilinary action ta;en by the society or its committee

against a aid ser#ant of the society: /as /ithdra/n and not

continued in the settlement of "isute as delineated by

3ection


47/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

4<

the ro#ision /as to e$clude and o#erride any other -orum

for settlement of disutes including the -orum of Labour

ourt as ro#ided under the 7ndustrial "isutes Act! 1)48. As

noted abo#e! the 1)


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48

that fficers of the ooerati#e 3ociety cannot ta;e

recourse to the ro#isions of the 1)48 Act. an the

3tatutory 3cheme be read in a manner as to e$clude the

ser#ice disutes of the emloyees from the ur#ie/ of

3ection


49/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

4+

contemlated to be referred under 3ection


50/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

4)

shall decide such disute and no other court or other authority

shall ha+e 7urisdiction to entertain any suit or other roceedings in

resect of such disute.

() Aor the uroses of sub3section (*)" the following shall

also be deemed to be disutes" namely


51/191

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50

() shall continue to be o+ernment ser+ants for all uroses and

their terms and conditions of ser+ice shall continue to be the

same as alicable to them under the o+ernment.0

3ection 80B ro#ides for transfer of all ending disutes in

resect of nonmonetary disutes to the Arbitration ourt.

onse=uent amendments /ere also made in the (erala o

oerati#e 3ocieties @ules! 1)


52/191

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51

of ser#ice matters of /or;men of ooerati#e 3ocieties

ans/ering the definition of disute as defined under the

1)48 Act. Writ etition /as filed challenging the order of the

3tate o#ernment referring a disute of a /or;man of a

3ociety to the Labour ourt for ad6udication. The learned

3ingle Judge had noticed 3ection


53/191

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52

'er"(e $o%opera!"e 'o("e!) !d . A++"+!an!

e#"+!rar, ukundapura/ and

is clearly a mista;e and secondly! it is stated that

residential assent /ould be obtained after the reugnancy

coming into being. rior to insertion of 3ection


54/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

5*

*&9 (*) #er. 5 < *&9 () !!? 5* stating that >The /ct was

assed with the assent of the President after the enactment of the

$ndustrial %isutes /ct" *&>" the learned counsel for the ,ociety

would raise an argument that since the /ct itself had originally

recei+ed the assent of the President" after introduction of sub3s.

(d)" the 7urisdiction under the $ndustrial %isutes /ct would stand

excluded since ,.- starts with the non obstante clause

>:otwithstanding anything contained in any law for the time being

in force> and since sub3clause (h) of sub3section (*) of ,.-"

stiulated that >no other Court or authority shall ha+e 7urisdiction to

entertain any suit or other roceedings in resect of such disute.>

This argument would not hold water for two reasons. The first is

that contrary to the obser+ation in the abo+esaid case" e+en for

the /ct" Presidential assent was not recei+ed. ,ince none of the

boo2s relating to #erala Cooerati+e ,ocieties /ct" *-

contained any reference to Presidential assent for the /ct" $

directed the learned o+ernment Pleader to ascertain from the

o+ernment as to whether the /ct had in fact recei+ed

Presidential assent. The learned o+ernment Pleader" after

getting instructions" confirmed that no Presidential assent was

recei+ed for the ,ocieties /ct. Therefore" the reference to such

assent in *&9 #=C * < *&9 #!T 59 < *&9 #!? 5* < $!4

*&9 (*) #er. 5 < *&9 () !!? 5* is clearly a mista2e. Aurther"

Presidential assent should be obtained after the reugnancy

comes into being. Prior to insertion of ,.-(*)(h) and ,.-()(d)"

there was no reugnancy between the ,ocieties /ct and the

$ndustrial %isutes /ct and therefore the question of requirement

of Presidential assent rior to /mendment /ct * of does not

arise at all. Therefore" without Presidential assent for /mendment

/ct * of " the 7urisdiction of the !abour Courts and $ndustrial

Tribunals under the $ndustrial %isutes /ct for ad7udicating


55/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

54

industrial disutes raised by wor2men of cooerati+e societies

cannot be excluded by the ,ocieties /ct. That being so" in +iew of

the fact that the /mendment /ct * of amending ,.- of the

#erala Cooerati+e ,ocieties /ct has not recei+ed the assent of

the President as ro+ided under /rt.5() of the Constitution of

$ndia" the said ,ection does not exclude the 7urisdiction of the

!abour Courts and $ndustrial Tribunals in resect of disutes

raised by the wor2men of cooerati+e societies in #erala. ut" as

laid down by the ,ureme Court in %haraa>s case (sura)" the

7urisdiction to decide any disute of the nature mentioned in ,.-

()(d) of the #erala Cooerati+e ,ocieties /ct +ests concurrently

with !abour Courts ' $ndustrial Tribunals under the $ndustrial

%isutes /ct and with the Cooerati+e /rbitration Court and the

4egistrar as the case may be deending on whether the disute

is non monetary or monetary.0

40. The 6udgment on /hich much reliance has been

laced by the learned counsel for the resondents to buttress

their submission that Amendment Act 1 of 2000 ha#ing not

been enacted /ith the residential assent it cannot e$clude

the 6urisdiction of Labour ourts under the 1)48 Act is a

6udgment of the Ae$ ourt in harappa . -"apur $oop.

"lk rodu(er+ 'o("e!"e+ n"on !d. %sura,. 7t is

necessary to note the rele#ant facts and la/ as laid do/n by

the 3ureme ourt in the aforesaid case. 3er#ice of the

aellant /as terminated /ith effect from 01.0*.1)+0. An


56/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

55

alication /as made by the aellant to the Labour ourt

see;ing declaration that his termination from ser#ice /ith

effect from 01.0*.1)+0 /as null and #oid and a direction be

issued for reinstatement /ith full bac; /ages. The

resondent! oo. Fil; roducers 3ociety filed an ob6ection

denying the claim of the aellant. The Labour ourt made

an a/ard on 15.10.1)+< directing reinstatement. The

3ociety challenged the a/ard by means of Writ etition. 7n

the mean/hile a "i#ision Bench of the (arnata;a Iigh ourt

deli#ered a 6udgment in Deera+ha"a $oop.-ank !d. .

re+"d"n#


57/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

5<

in the Ae$ ourt. The Ae$ ourt framed t/o =uestions

/hich fell for consideration.

9(i) Dhether the 7urisdiction of !abour Court under the $%

/ct" was barred by ,.& of the #C, /ct with reference to

cooerati+e societies and if so" from when.

(ii) E+en if !abour Court had 7urisdiction" whether the

aellant was entitled to file an alication under ,.*(/) of $%

/ct in resect of a cause of action which occurred in *&6.0

3ection 80 of the (3 Act has been e$tracted by the Ae$

ourt in aragrah 11 of the 6udgment. 3ection 80 /as

amended by Amendment Act 1)8< by /hich clauses %d, and

%e, /ere added. A further amendment /as made in sub

section %1,. The Amendment Act 2 of 2000 recei#ed the

assent of the resident on 1+.0*.2000 and brought into force

on 20.0


58/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

58

(c) between the society or its committee and any ast

committee" any officer" agent or emloyee" or any ast officer"ast agent or ast emloyee or the nominee" heirs" or legalreresentati+es of any deceased officer" deceased agent" or deceased emloyee of the society" or

(d) x x x (omitted as not rele+ant)

such disute shall be referred to the 4egistrar for decision and noCourt shall ha+e 7urisdiction to entertain any suit or other roceeding in resect of such disute.

() Aor the uroses of sub3section (*)" the following shallbe deemed to be disutes touching the constitution" managementor the business of a co3oerati+e society" namely.

(a) a claim by the society for any debt or demand due to itfrom a member or the nominee" heirs or legal reresentati+es of adeceased member" whether such debt or demand be admitted or not;

(b) a claim a surety against the rincial debtor where thesociety has reco+ered from the surety any amount in resect of any debt or demand due to it from the rincial debtor" as a resultof the default of the rincial debtor whether such debt or demandis admitted or not;

(c) any disute arising in connection with the election of aPresident" Fice3President" Chairman" Fice3Chairman" ,ecretary"Treasurer or @ember of Committee of the society.

(9) x x x (omitted as not rele+ant).

,ection & was amended by #arnata2a Co3oerati+e ,ocieties

(/mendment) /ct" *&- (#arnata2a /ct * of *&-). The

/mendment /ct recei+ed the assent of the o+ernor on &.9.*&-.

$t was brought into effect from .*.*&-. The /mendment /ct

added the following as clauses (d) and (e) in sub3section () of

section & <

“&. ()(d) any disute between a co3oerati+e society and

its emloyees or ast emloyees or heirs or legal reresentati+esof a deceased emloyee" including a disute regarding the termsof emloyment" wor2ing conditions and discilinary action ta2enby a co3oerati+e society;

(e) a claim by a co3oerati+e society for any deficiency caused inthe assets of the co3oerati+e society by a member" ast member"deceased member or deceased officer" ast agent or deceasedagent or by any ser+ant" ast ser+ant or deceased ser+ant or byits committee" ast or resent whether such loss be admitted or


59/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

5+

not.1

,ection & was again amended by #arnata2a Co3oerati+e

,ocieties (,econd /mendment) /ct" *& (#arnata2a /ct :o.

') in the following manner<

(i) $n sub3section (*)" for the words 1no court1" the words

1no ci+il or !abour or 4e+enue Court or $ndustrial Tribunal1 were

substituted.

(ii) /t the end of clause (d) of sub3section ()" the words

1notwithstanding anything contrary contained in the $ndustrial

%isutes /ct" *& (Central /ct * of *&)1 were inserted0

The said /mendment /ct (/ct of ) recei+ed the assent of

the President on *6.9. and was brought into force on

.-.. /fter the said amendments in *- and " ,ection

& of #C, /ct (rele+ant ortion) reads thus<

1&. %isutes which may be referred to 4egistrar for decision.3 (*) :otwithstanding anything contained in any law for the time being in force" if any disute touching the constitution"management" or the business of a Co3oerati+e ,ociety arises ....

(c) between the ,ociety or its committee and ...... any officer"agent or emloyee" or any ast officer" ast agent or astemloyee ...... of the ,ociety" H..

such disute shall be referred to the 4egistrar for decision and no

Ci+il or !abour or 4e+enue Court or $ndustrial Tribunal shall ha+e

7urisdiction to entertain any suit or other roceeding in resect of

such disute.

Aor the uroses of sub3section (*)" the following shall be

deemed to be disutes touching the constitution" management or

the business of a Co3oerati+e ,ociety" namely

(d) any disute between a Co3oerati+e ,ociety and itsemloyees or ast emloyees or heirs or legal reresentati+es of a deceased emloyee" including a disute regarding the terms of emloyment" wor2ing conditions" and discilinary action ta2en bya Co3oerati+e ,ociety notwithstanding anything contrarycontained in the $ndustrial %isutes /ct" *&(Central /ct * of *&)0.


60/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

5)

The Ae$ ourt after noticing Article 254 of the onstitution

of 7ndia held that /here a la/ co#ered by an entry in the

3tate List %or an amendment to la/ co#ered by the entry to

3tate List, made by the 3tate Legislature contains a ro#ision

/hich directly and substantially relates to a matter

enumerated in the oncurrent List then such reugnant

ro#ision of the 3tate la/ /ill be #oid. 3uch a ro#ision of

la/ made by the 3tate Legislature touching uon a matter

co#ered by the oncurrent List /ill not be #oid if it can

coe$ist and oerate /ithout reugnancy /ith the ro#isions

of the e$isting la/. The obser#ations made in aragrah 12

has already been e$tracted abo#e.

41. @eferring to the 1)8< Amendment it /as held by

the Ae$ ourt that the said Amendment ha#ing not

recei#ed the assent of the resident! it cannot be said that

3ection 80%1,%c, of the (3 Act /ould re#ail o#er the

ro#isions of the 1)48 Act. onse=uently! e#en after the

1)8< Amendment Act! the Labour ourts and 7ndustrial

Tribunals functioning under the 1)48 Act continued to ha#e


61/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

industry> and the disute was an >industrial disute>. ut when

sub3section (*) of ,.& of #C, /ct was further amended by /ct


62/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


63/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


64/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


65/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


66/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


67/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


68/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


69/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


70/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010


71/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

80

between emloyees" ta2en by the emloyer on or after 3*39.

$n that +iew of the matter" Ext. P decision of the ?oint 4egistrar of

Cooerati+e ,ocieties in urorted exercise of authority under

4.*&- of the 4ules and Ext. P5 aellate order assed by the

o+ernment lac2 in 7urisdiction and they cannot" therefore" stand"

they being +oid.0

The abo#e 6udgment of the learned 3ingle Judge /as

aro#ed by a "i#ision Bench in aeendran . '!a!e

%2008 %*, (LT 55+,. Before the "i#ision Bench =uestion arose

as to /hether the disute ertaining to inter se seniority of

the emloyees of the ooerati#e 3ociety can be decided

under 3ection


72/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

81

ro+isions it is clear that any disute arising in connection with

emloyment of officers and ser+ants of the different classes of

societies secified in sub3section (*) of ,.6 including their

romotion and inter se seniority is to be decided by the /rbitration

Court. Gn the constitution of Cooerati+e /rbitration Court" e+ery

disute ending before the 4egistrar or any erson in+ested with

the ower to disose of the same by the o+ernment or the

arbitrator aointed by the 4egistrar in resect of non monetary

disutes relating to the local area of 7urisdiction of the /rbitration

Court" shall be transferred to such /rbitration Court and the Court

shall disose of the same as if it were a disute referred to it

under ,.-. ,ame is the +iew ta2en by the %i+ision ench of this

Court in D/ :o. **- of -. De therefore fully endorse the

+iew ta2en by the learned ?udge in Pra2asini>s case.

Consequently writ aeal lac2s merits and the same would stand

dismissed.0

Another 6udgment of a learned 3ingle Judge in Fdaa

'er"(e $o%opera!"e -ank !d. . $o%opera!"e

Ar*"!ra!"on $our! %200+ %*, (LT 8+0, has considered the

ro#isions of the 1)


73/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

82

under 3ection


74/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

8*

within the ur+iew of disutes which are to be decided by the

Cooerati+e /rbitration Court in terms of ,.-(*) of the /ct.0

The learned 3ingle Judge also d/elled uon the deeming

ro#ision of 3ection


75/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

84

fiction has to be carried to its logical conclusion" sub7ect only to

the inhibition that such fiction should not be extended beyond its

legitimate field. The mode in which the deeming ro+ision is used

in ,.- is only to gi+e full lay to the fiction and the ob7ect of its

creation" namely" the exclusi+e conferment of authority with the

Cooerati+e /rbitration Courts or /rbitrators" as the case may be"

to decide the disutes.

&. :ot only that" the words relied on" on behalf of the etitioners"

only further enlarge the scoe of the term >disute>. /ll that is

ro+ided is that any disute as to romotion and inter se seniority

would also fall within the scoe of the term >disute> for the

urose of ,.-(*). There aears to be a reason for such an

inclusion. / lain reading of ,.-(*)(c) may generate an argument

that disutes between officers or emloyees or between ast

officers or ast emloyees of a ,ociety are not disutes which fall

within the swee of that ro+ision" though disutes between

officers or emloyees of a ,ociety are intricately connected with

the affairs of the ,ociety and matters touching its business and

therefore that could fall within ,.-(*)(c) of the /ct. The inclusion

of the words >including their romotion and inter se seniority> as

the last limb of ,.-()(d) only clarifies the osition that

notwithstanding any +agueness that may be ointed out in that

regard in ,.-(*)(c)" such disutes also fall within the ur+iew of

that ro+ision.:

Against the abo#e 6udgment of the learned 3ingle Judge! the

Ban; filed W.A. >o.2058 of 200+ %-oard of "re(!or+,

Fdaa 'er"(e $o%opera!"e -ank !d. . The $o%

opera!"e Ar*"!ra!"on $our! and


76/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

85

Bench by its 6udgment dated 0).0


77/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

8<

emloyment. The abo+e words were not meant to be exhausti+e

or restricti+e" but only exlain what is already included. ,o" the

decision of the /ex Court relied on by the aellants has no

alication" whatsoe+er" to the facts of this case. oing by the

lain meaning of the abo+e quoted ro+ision" it can be safely

concluded that all disutes concerning denial of emloyment"

remo+al from ser+ice" dismissal from ser+ice" etc." will be

disutes which could be ad7udicated by the Co3oerati+e

/rbitration Court. /ny other interretation will not do 7ustice to the

scheme of the /ct. The 7urisdiction secifically conferred by the

legislature cannot be ta2en away by this Court" by underta2ing an

exercise of interretation. ,o" we agree with the reasons and

conclusions of the learned ,ingle ?udge.0

50. We ha#e already noticed abo#e that the "i#ision

Bench of this ourt in Thodupuzha Taluk General


and A.. Na#ar 'er"(e $o%opera!"e -ank . '!a!e of

3erala %sura, has held that the 6urisdiction of the Labour

ourt and ooerati#e Arbitration ourt is concurrent e#en

after the amendment made by Act 1 of 2000.

51. T/o more decisions need to be noted in this

conte$t. 7n $heranallur 'er"(e $o%opera!"e -ank !d.

. The '!a!e of 3erala and

the learned 3ingle Judge after noticing the ro#isions of


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88

3ection


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8+

disute. That aart" as held by this Court in /.4.:agar ,er+ice Co

3 oerati+e an2 +. ,tate of #erala (sura) and ThoduuIha Talu2

eneral @ar2eting Co 3 oerati+e ,ociety +. @ichael ,ebastian

(sura) in the case of emloyees who are go+erned by the

$ndustrial %isutes /ct" the 7urisdiction is concurrent. $f the !abour

Court or the $ndustrial Tribunal constituted under the $ndustrial

%isutes /ct can order reinstatement in ser+ice of a wor2man who

is go+erned by the $ndustrial %isutes /ct" $ find nothing wrong in

the Co 3 oerati+e /rbitration Court directing reinstatement in

ser+ice. That aart" under ,.* of the /ct" the 7urisdiction of a

ci+il or 4e+enue Court is barred only in resect of any matter for

which any ro+ision is made in the /ct. ,.- of the /ct ma2es a

ro+ision for ad7udication of disutes in connection with

emloyment of officers and ser+ants of the different classes of co 3

oerati+e societies" which as held by this Court would ta2e in

disutes arising under discilinary roceedings also. Therefore"

merely because ,.* bars the 7urisdiction of a Ci+il Court in

resect of matters for which ro+ision has been made in the /ct" it

cannot be said that the Co 3 oerati+e /rbitration Court could not

ha+e entertained the disute. $n the absence of a challenge by the

etitioner to the constitutional +alidity of sub3section () of ,.- of

the /ct" the contention that the Co 3 oerati+e /rbitration Court

cannot order reinstatement" is liable to be re7ected.0

The learned 3ingle Judge also re6ected the contention that the

ooerati#e Arbitration ourt cannot order reinstatement.

The abo#e decision of the learned 3ingle Judge /as

challenged in W.A. >o.1+1+ of 2012 %$heranallur 'er"(e

$o%opera!"e -ank !d. . The '!a!e of 3erala and


80/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

8)

6udgment in A..Na#ar 'er"(e $o%opera!"e -ank .

'!a!e of 3erala and Thodupuzha Taluk General


%sura,. Thus almost all the 6udgments of this ourt

interreting 3ection


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+0

resondent. The 4th resondent initiated roceedings under

3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+1

: The -ull Bench further held that it is beyond the disute

that no rules or byela/s regulating seniority and

romotion as bet/een the aellant and the 4th resondent

ha#e been framed and in the absence of such rules and

byela/s disute as to seniority or romotion cannot be

entertained or made sub6ect to litigation in ci#il court. The

-ull Bench thus oined that the matter /as not cogniCable by

the @egistrar under 3ection establishments> in the definition of the word

>disute>" which we ha+e extracted earlier. $n so finding the

learned ?udge has lost sight of the imortant rincile stated by

the decisions to which we ha+e 7ust made reference" that the

7urisdiction of the 4egistrar is co3terminous with the 7urisdiction of

the ordinary ci+il courts. $t is beyond disute that no rules or bye3

laws regulating seniority and romotion as between the aellant

and the th resondent" or in resect of the emloyees of the Co3

oerati+e ,ociety ha+e been framed. $n the absence of such

rules" regulations or bye3laws" a disute as to seniority or

romotion cannot be entertained or made the sub7ect of litigation


83/191

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+2

in a ci+il court. The ro+isions of ,.*(*)(b) of the ,ecific 4elief

/ct and the inability to grant the relief of reinstatement would

exclude them from the ur+iew of the ordinary ci+il courts" as

stated in the decision already noticed. Ex hyothesi such a

disute cannot be a sub7ect matter of arbitration by the 4egistrar.0

As noted abo#e! the -ull Bench came to the abo#e

conclusion on the remise that no rules or byela/s

regulating seniority or romotion ha#e been framed and in

the absence of such rules or byela/s disutes regarding

seniority or romotion cannot be entertained or made

sub6ect to litigation in ci#il court. The abo#e /as the basis for

holding by the -ull Bench that the disute /as not co#ered

by 3ection


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+*

the establishment of a Co3oerati+e ,ociety may" for good and

sufficient reasons" be unished by imosing any of the following

enalties" namely


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+4

obser#ations as noted abo#e and the -ull Bench cannot be

held to lay do/n any ratio to the effect that the disute

ertaining to ser#ice matters of the emloyees cannot be

made sub6ect matter of disutes under 3ection e$t -ull Bench 6udgment /hich need to be noted

is the 6udgment in ..'herl) . The re+"den!,

arappura/ "lk rodu(er+ $o%opera!"e 'o("e!) !d.

%2008 &1' (LT +0),. 7n the abo#e case discilinary

roceedings against emloyees of the ooerati#e 3ociety

/as initiated. The @egistrar e$ercised his o/er under @ule

18< of the @ules. uestion arose as to /hether it is oen to

the aggrie#ed emloyee to ta;e recourse to the remedy

a#ailable under the 1)48 Act. uestion has been osed by

the -ull Bench itself in aragrah 1 /hich is to the follo/ing

effect

“*. $n the matter of discilinary roceedings against an

emloyee of a cooerati+e society registered under the ro+isions

of the #erala Cooerati+e ,ocieties /ct" *-" (hereinafter

referred to as >the #C, /ct>) once the 4egistrar exercises his


86/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+5

ower under 4.*&- of the #erala Cooerati+e ,ocieties 4ules"

*- (hereinafter referred to as >the #C, 4ules>)" is it oen to the

aggrie+ed emloyee to ta2e recourse to the remedies under the

$ndustrial %isutes /ct" *& (hereinafter referred to as >the $.%.

/ct>) is essentially the question referred to the Aull ench. To ose

a general question" is an emloyee sub7ected to discilinary

roceedings entitled to ha+e his grie+ance ad7udicated before an

authority" Aorum" Tribunal or Court" which is indeendent of the

executi+eJ0

89& 7n the abo#e case 3tate o#ernment made

reference of the disute for ad6udication before the 7ndustrial

Tribunal. The Tribunal assed an order setting aside the

dismissal order against /hich the /rit etition /as filed by

the 3ociety. The learned 3ingle Judge held that relief ha#ing

been obtained by an ad#erse decision at the hands of "euty

"irector on his statutory etition under @ule 18< of the 1)o relief /as granted to the emloyee against

/hich 6udgment aeal /as filed by the emloyee! /hich

came to be decided by -ull Bench. The -ull Bench obser#ed

that disute in connection /ith ser#ice of an emloyee /as

not an item enumerated under 3ection


87/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+<

after setting u the ooerati#e Arbitration ourt /hich /as

introduced by Act 1 of 2000. The -ull Bench held that an

emloyee sub6ected to discilinary action has right to raise

grie#ance before an indeendent -orum %a -orum! Tribunal!

Labour ourt! etc, ha#ing the traings of the ourt after he

has e$hausted the deartmental remedies. The -ull Bench in

aragrah 1* has laid do/n as follo/s

“*9. /n emloyee sub7ected to a discilinary action has right

to ha+e his grie+ance ad7udicated before an indeendent Aorum (a

Aorum" Tribunal" !abour Court etc.) ha+ing the traings of a Court

after he has exhausted the deartmental remedies. $n the instant

case" the emloyee did not get an oortunity before the Co3

oerati+e /rbitration Court since the same had not been notified and

hence the reference of the disute by the o+ernment before the

industrial Tribunal is certainly +alid. The decision of the %euty

%irector cannot stand in her way. The wor2er must be conceded

right to raise an industrial disute contending that her dismissal

affirmed by the managing committee and the %euty %irector is bad

in law. =owe+er" we may clarify the legal osition that if the remedy

under the statute is before a forum a2in to Court" which is bound to

follow 7udicial rocedure and its decision is made final by the statute"

the osition would be different.0

88& The -ull Bench in the abo#e case too; the #ie/

that since the ooerati#e Arbitration ourt has not been

notified! reference of the disute by o#ernment before the


88/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+8

Tribunal is #alid. Io/e#er! the -ull Bench clarified the legal

osition that if remedy under the 3tatute is before a -orum

a;in to ourt /hich is bound to follo/ 6udicial rocedure and

its decision is made final by the 3tatute! the osition /ould

be different.: 7n the abo#e 6udgment -ull Bench made the

follo/ing obser#ations %i, disute /ith emloyees officers

and ser#ant /as not enumerated as a disute under 3ection


89/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

++

disute as held abo#e. Thus the obser#ation of -ull Bench

that 1)


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

+)

3ocieties by o#ernment. 7t /as contended that the o/er

under the Act emo/ers the o#ernment to ma;e

aointment of a erson not ha#ing education in la/ for

discharging the 6udicial function /hich /as imermissible.

Dnder the F.. ooerati#e 3ocieties Act 1)


91/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)0

emloyment of a society or the liquidation of the society.0

8& The la/ laid do/n by the Ae$ ourt as abo#e

clearly ro#es that the @egistrar! rior to the amendment of

3ection


92/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)1

that cannot be a ground for 6ustifying reference of disute to

the Labour ourt under the 1)48 Act.

58. Whether the amendment incororated under sub

section %2, of 3ection


93/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)2

$oun("l &1)52 A 10)'. -ollo/ing obser#ations /ere made

by Lord As=uith

“$f you are bidden to treat an imaginary state of affairs as

real" you must surely" unless rohibited from doing so" also imagine

as real the consequences and incidents which" if the utati+e state of

affairs had in fact existed" must ine+itably ha+e flowed from or

accomanied it. Gne of these in this case is emanciation from the

*9 le+el of rents. The statute says that you must imagine a

certain state of affairs; it does not say that ha+ing done so" you must

cause or ermit your imagination to boggle when it comes to the

ine+itable corrollaries of that state of affairs.0

80& The Ae$ ourt in '!a!e of -o/*a) .

anduran# D"na)ak and o!her+ &A7@ 1)5* 3 244' has

=uoted the abo#e obser#ation of Iouse of Lords /ith

aro#al. 7t /as held by the 3ureme ourt that /hen a

statute enacts something shall be deemed to ha#e been

done /hich in fact /as not done! the court is entitled and

bound to ascertain for /hat urose the fiction is to be

resorted to and full effect must be gi#en to the statutory

fiction. -ollo/ing /as laid do/n by the Ae$ ourt in

aragrah 5

“5. xx xx xx

Dhen a statute enacts that something shall be deemed to


94/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)*

ha+e been done" which in fact and truth was not done" the Court is

entitled and bound to ascertain for what uroses and between

what ersons the statutory fiction is to be resorted to and full effect

must be gi+en to the statutory fiction and it should be carried to its

logical conclusion.0

8!& Thus the urose and ob6ect for /hich the legal

fiction has been created has to be ascertained to gi#e full

meaning to the legal fiction. 3ection


95/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)4

ertaining to ser#ice matters of the emloyee shall not fall

under 3ection


96/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)5

emloyees of the Ban; had made an alication under

3ection


97/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)<

that “the general /ct should lead to the secial /ct0. 8on this

general rincile of law" the intention of the 8.P. !egislature is clear"

that the secial enactment 8.P. Co3oerati+e ,ocieties /ct" *-5

alone should aly in the matter of emloyment by co3oerati+e

societies to the exclusion of all other labour laws. $t is a comlete

code in itself as regards emloyment in cooerati+e societies and its

machinery and ro+isions. The general /ct" the 8.P. $ndustrial

%isutes /ct" *& as a whole has and can ha+e no alicability and

stands excluded after the enforcement of the 8.P. Cooerati+e

,ocieties /ct. This is also clear from necessary imlication that the

legislature could not ha+e intended head-on conflict and collision

between authorities under different /cts. Kx xx xx0

,& 7n the D..ooerati#e 3ocieties Act! 3ection 80

ro#ides for the "isutes /hich may be referred to

arbitration and 3ection 81 ro#ides for reference of disute

to the Arbitration. There /as a secific ro#ision under the

D.. ooerati#e 3ocieties Act! 1)


98/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)8

had not been brought into force /hich fact has been

secifically noted by the 3ureme ourt in aragrah 42

/hich is =uoted as follo/s

“. The learned ,enior Counsel submitted that the

legislature has secifically ro+ided in the ro+isions of the 8.P.

Cooerati+e ,ocieties /ct itself that the labour laws will aly to the

emloyees of the cooerati+e societies" in 4egulation *9 and in

non3enforcement of ,ection *95. The fact that ,ection *95 has not

been brought into force indicates clearly that (a) in order to exclude

labour laws there must be statutory exclusion" (b) failing such an

exclusion labour law will aly. $n this case" there is a fact that an

exclusion howe+er under ,ection *95 has not been brought into

force.0

-& The =uestion /hich arose for consideration before

the Ae$ ourt /as as to /hether the alication filed by the

emloyee under 3ection


99/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

)+

/as null and #oid. -ollo/ing /as held by the Ae$ ourt in

aragrahs


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W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

))

followed in gi+ing to the ro+isions of the 4eco+ery of %ebts due to

an2s and Ainancial $nstitutions /ct *9 (4% /ct) o+erriding

effect o+er the ro+isions of the Comanies /ct" *5-. The 4% /ct

constitutes a tribunal and by ,s.*& and *6 confers uon the tribunal

exclusi+e 7urisdiction to entertain and decide alications from the

ban2s and financial institutions for reco+ery of debts (defined to

mean any liability which is claimed as due). The /ct also lays down

the rocedure for reco+ery of the debt as er the certificate issued

by the tribunal. The ro+isions of the 4% /ct" which is a secial

/ct" were held to re+ail o+er ,s." -" 59& and other sections

of the Comanies /ct which is a general /ct" more so because ,.9

of the 4% /ct gi+es o+er riding effect to that /ct by ro+iding that

the ro+isions of this /ct shall ha+e effect notwithstanding anything

inconsistent therewith contained in any other law for the time being

in force.

-5. De are therefore of the +iew that the /sst. !abour

Commissioner (/!C)>s 7urisdiction was wrongly in+o2ed and his

order dated *5.9.9 under ,.-=" 8.P. $ndustrial %isutes /ct"

*& is without 7urisdiction and hence null and +oid and it can be

obser+ed that" in +iew of the said general legal rincile" it is

immaterial whether or not the go+ernment has enforced section*95

(8PC, /ct) because" in any case the said ro+ision (,.*95) had

been included in the /ct only by way of clarification and abundant

caution.0

The Ae$ ourt in the abo#e 6udgment held that the

ro#ision of 3ection 1*5 has been included in the Act only by

/ay of clarification and abundant caution. 7n the resent

case the ro#ision of 3ection


101/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

100

/ay of abundant caution and by /ay of clarification. The

abo#e 6udgment of the Ae$ ourt clearly reinforces our #ie/

that ro#isions of 3ection


102/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

101


103/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

102

that ser#ices of the emloyee /as a matter falling under

3ection


104/191

W.A. No+.2516 of 2009, 764 of 2010 & 184 of 2010

10*

. Counsel is well suorted in his contention that if the

sub7ect3matter of the disute before the nd resondent is one falling

within the term >disute> as defined in ,.(i) and within ,.- of the

/ct and therefore within the cometence of the 4egistrar to decide"

this ro+isions must re+ail o+er the ro+isions in the $ndustrial

%isutes /ct which ro+ides for the settlement of disutes such as

that are referable to the $ndustrial Tribunals or !abour Courts. $t is

unnecessary to cite authorities for this roosition" but we may as

well refer to a assage from the decision of the ,ureme Court in

C&:&(e+at!;e Ce3t+a4 Ba31 Ltd. A3d &te+" et9. Add!t!&3a4

I3d2"t+!a4 T+!*23a4, A3d+a 7+ade", H%de+a*ad a3d &te+" et9.

reorted in /$4 *& ,C 5<

“The general roosition urged that the 7urisdiction of

the $ndustrial Tribunal under the $ndustrial %isutes /ct will

be barred if the disutes in question can be cometently

decided by the 4egistrar under ,.-* of the /ct is" therefore"

correct and has to be acceted.0

8& The "i#ision Bench ho/e#er! held that the real

=uestion is not /hether the disute is one touching the

business of the 3ociety or its management or establishment!

but /hether it is a disute to be decided by the @egistrar.

The "i#ision Bench held in aragrahs

ortion, as follo/s

“-. The real question is not whether the disute is one

touching the business of a society or its management or

establishment but whether it is a disute within the cometence of

the 4egistrar to decide.


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104

&. The same +iew has been exressed by the ,ureme

Court in the decision in De99a3 )e+9a3t" C&:&(e+at!;e Ba31 Ltd.

. M". Da4!9a3d J2>+a@ Ja!3 a3d &te+" reorted in /$4 *- ,C

*9. =a+ing referred to the matter as to whether the disute was

one touching the business of the ,ociety" their !ordshis obser+ed<

“Aurther the word >disute> co+ers o

industrial dispute act not applicable to employees of co-operative societies - kerala high court...

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