Holding

The dispute does not attract Rule 115 because the employee is not an officer and the matter does not touch the society's business, so the civil court retains jurisdiction.

Summary

The respondent, a supervisor in a co‑operative sugarcane development society, was dismissed after disciplinary proceedings and sued the society in a civil court for reinstatement and back wages. The society argued that the suit was barred because, under Rule 115 of the U.P. Co‑operative Societies Rules, 1936, any dispute "touching the business of the society" between the society and its officer must be referred to the Registrar for arbitration. The Supreme Court examined whether the respondent qualified as an "officer" under section 2(d) of the Co‑operative Societies Act, 1912, and whether the dispute concerned the society's business. It held that a supervisor of a godown is not an officer, and a disciplinary dismissal does not constitute a dispute touching the society's business. Consequently, Rule 115 and the accompanying arbitration scheme do not oust the civil court's jurisdiction. The appeal was dismissed, leaving the civil suit alive.

Issues considered

Whether a disciplinary dismissal of a non‑officer employee of a co‑operative society falls within the definition of a dispute "touching the business of the society" under Rule 115 of the Co‑operative Societies Rules, 1936.
Whether the employee qualifies as an "officer" within the meaning of section 2(d) of the Co‑operative Societies Act, 1912.
Whether the arbitration provisions of Rules 115 and 134 bar the civil court from entertaining the suit.
Whether the U.P. Sugarcane (Regulation of Supplies and Purchases) Act, 1953 and its rules supersede the 1912 Act provisions concerning jurisdiction.

Legislation cited

Co-operative Societies Act, 1912s. 2(d), s. 43, s. 70
Co-operative Societies Act, 1965s. 70
U.P. Co-operative Societies Rules, 1936s. 115, s. 134
U.P. Sugarcane (Regulation of Supplies and Purchases) Act, 1953s. 20, s. 28
U.P. Sugarcane (Regulation of Supplies and Purchases) Rules, 1954s. 108, s. 54, s. 55

Subjects

jurisdictioncivil courtco-operative societydisciplinary dismissalofficer definitionarbitrationRule 115Rule 134U.P. Sugarcane Act

Judgment

558 •
\
A

U.P. CO-OPERATIVE CANE UNION
FEDERATION LTD. & ANOTHER
v. +
B LILADHAR & OTHERS
August 27, 1980.
[P. N. SHINGHAL AND D. A. DESAI, JJ.]
Jurisdiction of the Civil Court-Dispute arising out of a disciplinary pro- ~
ceeding resulting in dismissal of an employee of a Co-operative Cane Growers"
Society and the society, whether a dispute "touching the business of the society"
c within the meaning of Rule 115 of the Co-operative Societies R1iles 1936-Co;
operative Societies Act, 1912, section 2(d), 43, Co-operative Societies Rules, 1936,
Rules 115 and 134 and U.P. Sugarcane (Regulation of Supplies and Purchases)
Act, 1953, Sections 28 (211), read with U. P. Sugarcane (Regulation of S•;pplies
and Purchases) Rules, 1954, Rule~ 54, 55 and 108, scope of.
The respondent joined service in Cane Development Department of the U.P.
D State Government in 1949 and later on transferred to District Co-operative Sugar-
cane Development Society Ltd., a federating unit of the U.P. Co-operative Cane
Union Federation Ltd. He was prosecuted and convicted for alleged embeztie-
ment of funds, but was acquitted by the High Court in appeal. Later as a
result ·of departmental disciplinary proceedings, his services were tem1inated.
Respondent, therefore, filed a Civil Suit in 1964 which was decreed on May
24, 1967 rejecting the appellant's plea of bar of jurisdiction by the Civil Court
E under Rule 115 of the Co-operative Societies Rules, 1936, made under section 43
of the Co-operative Societies Act, 1912. The First Appellate Court accepted
the appeal and dismissed the suit holding that the dispute was one "touching the -..._
business of the Co-operative Society" and its employee and hence the Civil r
Court is barred from entertaining the suit. However, in the second appeal to
it, the High Court reversed the First Appellate Court's order holding that as
the respondent is governed by lJ.P. Sugarcane (Regulation o{ Suoplies and P u r - ,..,.
F chases) Act, 1953, it being both a Co-operative Society and :i. Cane Growers' ;(
Co-operative Society and in case of an officer or servant of such Cane Growers'
Co-operative Society any dispute between its officers and servants and such
society would be governed by Rules 54 and 55 framed under the 1953 Act
which provide for a complete machinery for resolution of disputes and Rule 108
does not encompass dispute arising out of a disciplinary proceeding between
such society and its officers and servants and therefore, in the absence of such
G provision for compulsory arbitration of such dispute, the jurisdiction of the Civil
Court is not barred.
Dismissing the appeal by special leave, the Court
HELD: (1) On a conspectus of the High Court's decision and the defini-
tion of the expression "officer" both expansive definition and its etymological
sense, first respondent a Supervisor working as a Godown Ke~per cou!d not
H be styled as an officer of the Co-operative Society, he not being either Chairman.
Secretary, Treasurer, or a member of the Committee or such other person shown
to have been empowered under the rules or the bye-laws to give directions
in regard to the business .of the society. And the legislature Dever ir"tended
'COOPERATIVE CANE UNION ;v. LILi\DHAR 559
'
,to include every employee or servant of the society within, the expression A
·"officer". Neither any rule made under section 43(g) of the 1912 Act refers
the respondent as an officer. [567 D, 565 G, 566 F]
Co-operative Central Bank v. Trimbak Narayan Shinganwadikar, AIR 1945
Nagpur 183; Manjeri S. Krishna Ayyar v. Secretary, Urban Bank Ltd. & Anr.
\AIR 1933 Mad. 682; Kailash Nath Ha1wai v. Registrar, Co-operative Society,
U.P. & Ors., AIR 1960 Allahabad 194 and Abu Baker & Anr. v. District Hand-
B
loom Weavers' Co-operative Society, Mau & Anr., AIR 1966 Allahabad 12,
1Ceferred to.
(2) Rules 115 to 134 of the Co-operative Societies Rules, 1936 make it
clear that if the dispute is one contemplated by Rule 115 and atises between the
lJarties therein envisaged it shall have to be resolved by referring the same to
the Registrar who will have to get it resolved by arbitration either by himself
or by arbitrator or arbitrators appointed by him. Rule 134 provides that a c
<Iecision of an· arbitrator or arbitrators under the rules, if not appealed as
therein provided, shall be final as between the parties to the dispute and not
liable to be called in question in any civil or revenue court and shall in all
respects be final and conclusive. If. therefore, the 1912 Act confers power
to enact rules and the rules so enacted are statutory and if the rules provide
for certain types of disputes between certain specific parties to be resolved by
arbitration ~nd the decision of the arbitrators is made final and conclusive not D
correctible by the civil court or unquestionable before the civil court, un-
doubtedly, the jurisdiction of the civil court in respect of zuch specified
disputes between specified parties enumerated in Rule 114 would be wholly
excluded. [567 F-568 A]
(3) In order to attract Rule 115 it must be shown (i) that the dispute jg
the one touching the business of the co-operative society; and (ii) that it is E
between the society and any officer of the society. Both the conditions have
to be cumulatively fulfilled before Rule ll5· is attracted which would result
·in ouster of the jurisdiction of the civil court in respect of dispnte in view of
the provision contained in Rule 134. A dispute arisin·g out of a disciplinary
proceeding resulting in dismissal of an employee of the society cannot be said
to be "a dispute touching the business" of the society within the meaning of
the Rule 115. [568 C, 569 G] F
Deccan Merchants Co-operative Bank Ltd. v. Mfs. Dalichand Jugraj Jain
& Ors., [1969] 1 SCR 887; Co'operative Central Bank Ltd. & Orr. v. Additional
Industrial Tribunal, Andhra Pradesh & Ors., [1970] 1 SCR 205 followed.
Kisanlal & Ors. v. Co-operative Central Bank Ltd., AIR 1C)46 Nagpur 16
:approved.

(4) Section 70 of the lJ.P. Co-operative Societies Act, 1965 also makes it
G
clear that while making a statutory provision for resolution of disputes involving
co-operative societies by arbitration by the Registrar, the legislature in term~
excluded a dispute relating to disciplinary action taken by the society against
-paid servants of the· society from the purview of the compulsory arbitration.
What was implicit in the 1912 Act and the rules framed thereun1er that such
a dispute did not "touch the business of the society" and was not within the
·purview of the compulsory arbitration was m~de explicit by section 70 of the H
1965 Act (which repeal and replace 1912 Act) by expressly excluding it from
the field of compulsory arbitration. (570 C, El
560 SUPREME COURT REPORTS- [1981] 1 S.C.R..

A (5) The approach of the High Court in coming to the conclusion that
the civil court will have jurisdiction to entertain the suit, however, is not
correct and totally overlooks and ignores the provisions in 1912 Act and the-
rules enacted thereunder. U.P. Sugarcane (Regulation of Supplies and PUr·
chases) Act, 1953 :md the Co-operative Societies Act, 1912 operate in an
entirely different field and are enacted with different objects in view. 1953
Act neither trenches upon 1912 Act nor supersedes or supplants any provision
B of it [572GJ

CIVIL APPELLATE JuRISDICTION : Civil Appear No. 433 of !977.
Appeal by S]:'>ecial Leave from the Judgment and· Order dated
13th August 1975 of the Allahabad High Court in Second Appeal No. ~
582/71. ~

c A. P. S. Chauhan, Guj Raj Singh Chauhan and T. s: Arora for
the Appellant.
Indra Makwana for Respondent No. I.
The Judgment of the Court was delivered by
DESAI, J.-How technical plea of want of jurisdiction has pushed
D
a petty employee from pillar to post since April 1964 and pilloried
him with cost presumably unbearable by him, is shockingly demons-
trated in this- case.
First respondent joined service as a petty employee in Cane Deve-
lopm\)nt Department of the U.P. State Government somewhere in 1949.
E On the formation of the U.P. Co-operative Cane Unfon Federation
Ltd. (hereinafter referred to as 'the firs't appellant'), services of the
first respondent stood transferred and were put at the disposal of the
appellant and he was styled as Supervisor. At the relevant time he-
was rendering service under the second appellant, District Co-operative
Sugarcane Development Society Ltd. (now designated as Zila Sahkari
F Ganna Vikas Samiti Ltd.,) Budayun, a federating unit of the first
appellant and was incharge of manure godown. He was suspended
from service with effect from October 18, 1958. A prosecution was
launched against him for embezzlement of funds of the second appel-
lant in that he failed to account for 293t bags of amonium sulphate
entrusted to him as keeper of manure godown. The case ultimately
G resulted in the at:quittal of the first respondent by the High Court.
Disciplinary pvoceedings were commenced against . him on the same
charge and ultimately he was dismissed from service orr April 4,. 1964.
First respondent filed a suit being O.S. No. 3'0/64 in the Court of
Civil Judge, Budayun, inter alia, for a declaration that the order dis-
missing him from service was invalid and void and' for a further decla-
H ration that he continued to be in service and' for arrears of pay till
the date of the suit. In the written statement filed on behalf of de-
fendants (present appellants) number of corrtentions were raised but
TClOPERATIVE CANE UNION v. LILAQHAR (Desai, J.) 561

<Jnly one may be noticed for the present appeal. The contention was A
that the dispute involved 'in the suit was between an employee of a
.Co-operative Cane-Growers' society and the Society and, therefore,
·civil court had no jurisdiction to entertain the suit but the plaintiff
must approach the Registrar of Co-operative Societies for reference of
dispute to arbitration. The trial Court decreed the suit as per judg-
ment dated May 24, 1967, and granted the de'claration prayed for. The B
appellants preferred an appeal being Civil Appeal No. 9 of 1967 to
the Court of District Judge, Budayun, who allowed the appeal holding
that the Civil Court had no jurisdiction to entertain the suit inasmuch
as the dispute was between an officer of a Co-operative Society and
the Society and the dispute was touching the business of the Society
and, therefore, rule 115 of the Co-operative Societies Rules enacted c
by the U.P. Government in exercise of the rule making power con-
forred by section 43 of. the Co-operative Societies Act, 1912 (herein"
.after referred to. as 'the 1912 Act') in. its application to the U.P. State
would be attracted and the dispute will have to be resolved by arbitra-
tion by the Registrar. In accordance with this finding the appeal was
D
allowed and the suit was dismissed. First respondent preferred Second
Appeal No. 582/71 to the High Court of Judicature at Allahabad.
The learned single Judge allowed the appeal holding that as the first
appellant is governed by U.P. Sugarcane (Regulation of Supply and
Purchases) Act, 1953 ('1953 Act' for short), it being both a Co-opera-
tive Society and a Cane Growers' Co-operative Society and in case of E
an officer or servant of such cane growers' co-opeartive society any
dispute between its officers and servants and such society would be
governed by rules 54 and 55 framed under 1953 Act which provide a
complete machinery for resolution of disputes and rule 108 does not
encompass dispute arising out of a disciplinary proceeding between
- such society and its officers and servants and, therefore, in the absence
<Of such provision for compulsory arbitration of such dispute the juris-
F

·diction of the Civil Court is not barred. The learned judge accordingly
allowed the appeal and remanded the suit, to the first appellate court
for decision on medts. Hence this appeal by special leave by original
.defendants.
G
The only contention that falls for consideration in this appeal is
whether the civil court has jurisdiction to take cognizance of a suit
arising out of a disciplinary proceeding held by a Cane Growers' Co-
·operative Society, governed both by 1912 Act and W53 Act against
its employee or such dispute falls exclusively within the jurisdiction of
the Registrar under the Co-operative Societies Act to be resolved by H
arbitration alone. A brief survey of the relevant provisions is neces-
.sary for the effective disposal ,of this contention.
562 SUPREME COURT REPORTS [1981'] 1' S.C.R.
'
A When the suit was fried in the year 1964 the Co-operative Socie-
ties Act, 1912, as adopted and applied by U.Pi. State was in force in
U.P. State. The express~on 'officer' has been defined in s. 2(d) of the
Act as under: +
"2. Definitions-In this Act, unless there. is anything repug-
B nant in the subject or context,-
(d) 'officer' includes a chairman, secretary, treasurer,
member of committee, or other person empowered under the·
rules or the bye-laws to give directions in regard to the busi•
ness of the society". /
Section 43 conferred power on the Local Government to make rules
c to carry out the purposes of the Act for the whole or any part of the
province, on various topics enumerated in various sub-clauses of the
section. Clause (!) of s. 43(2) is relevant. It reads as under:
"43. Rules--(1) The State Government may, for the whole
or any part of the State and for any registered Society or class of
D such societies make rules to carry out the purposes 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-
E persor.s claiming through a member or past member or bet-
ween 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, fo arbitration, and prescribe
the mode of appointing an arbitrator or arbitrators and the
procedure to be followed in proceedings before the Registrar
F or such arbitra.tor or arbitrators, and the enforcement of the
decisions of the Registrar or the awards of arbitrators''.

Armed with this power the U.P~ State enacted what is styled as-
U.P. Co-operative Societies Rules, 1936, Rule 115 of ,the rules reads
as under:
G "115. Any dispute touching the business of a registered
society (i) between members or past members of a society or per-
sons claiming through a member or past member, (ii) or betweell'
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}
H between two or more registered societies, shair be decided either
by the Registrar or by arbitration and shall for that purpose be
referred in writing to the Registrar;
COOP~RATIVE CANE UNION V. LILAD~ (Desai, J.) 563

Explanation l.-A dispute shall include claims for amoun.ts A
due when a demand for payment is made and is either refused or
not complied with whether such claims are admitted or not by the
opposite party.
Explanation 2.-An officer shall include a person appointed
for the supervision of the socie,ty.
B
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".
This rule 115 has to be interpreted in the light of rule 134 which reads
as under:
"134. A decision of an arbitrator or arbitrators under these
c
>· rules if not appealed against within the said period and an order
of the Registrar shall, as between the parties to the dispute, not
be liable to be called in question in any civil or revenue court and
shall in all respects be final and conclusive".
There is another Act which has a bearing on the topic under dis- D
cussion styled as U.P. Sugarcane (Regulation of Supply and Purchases)
Act, 1953. It is an Act enacted to regulate the supply and purchase
of Sugarcane required for use in sugar factories a11d gur, rab or khand-
sari sugar manufacturing units and matters incidental or ancillary
thereto. It contemplates setting up of a sugarcane Board and pro-
vides for its functions and·duties and the methods of filling up vacan- E
cies and regulating its finances. Section 20 confers power on the
Governor to impose by a notification a cess not exceeding the al_Il.ount
prescribed in the section on the entry of sugarcane into an area speci-
fied in such notification for consumption, use or sale there. Section
28 confers power on the State Government to make rules for the pur-
pose of carrying into effect the provisions of the Act. Clause 2(n) in F
this behalf is relevant. It reads as under:
"28. Power to make rules-(!) The State Government may
make rules for the purpose of carrying into effect the provisions
of this Act.
(2) Without prejudice to the generality of foregoing power, G
such rules may provide for-
X XX xxx xxx
(n) the constitution, operation, management, supervision
and audit of Canegrowers' Co-operative Societies and Coun-
cils and the U.P. Cane Unions Federations and conditions
relating to recognition of such societies or their federation for H
purposes of this Act and Rules and control of their staff and
finances".
564 SUPREME COURT REPORTS [1981] 1 S.C.R.

A Armed with this power the U.P. Government enacted the U.P.
Sugarcane (Regulation of Supply and Purchase) Rules, 1954. The
relevant rules relied upon are rules 54, 55 and 108. They may be re-
produced in extenso:
"54. The power to appoint, grant leave of absence to, punish,
B dismiss, transfer and control Secretaries, Assistant Secretaries and
Accountants of Cane-growers Co-operative Societies, whether per-
manent or temporary, shall be exercised by the Federation subject
to the general control of the Cane Commissioner who may rescind
or modify any order of the Federation:
Provided that the Cane Commissioner may himself exercise
any of ~uch powers in case of emergency".

"55. Similar powers as stated in Rule 54 may be exercised
by the society in respect of the other staff, subject to the regula-
tions made by the Federation and the general control of the Cane
Commis'sioner".
D
"108. Any dispute touching the business of (a) a Cane-
growers' Co-operative Society between members, or between mem-
bers and society, or between two registered societies, or between
a society and a factory, or between a cane-grower and a factory,
(b) a counc.il and a Cane-growers' Co-operative Society, or bet-
ween a council and a factory or between a council and a cane-
grower, regarding the payment of contribution to a council by a
society or a factory and any other dispute relating to the business
of a council. shall be referred to the Cane Commissioner for deci-
sion. The Cane Commissioner shall decide it himself or refer
it to arbitration. No suit shall lie in a Civil or Revenue court in
!F respect of any such dispute".

Having had the survey of the relevant provisions of the Acts and
the Rules attenti<?n may now be focused on the main and the only
controversy in this appeal whether in 1964 when the first respondent
as plaintiff filed the suit for a declaration that the order dismissing
G him from service passed by the first appellant is void and for a decla-
ration that he continues to be in service of the first appellant, in the
Civil Court at Budayun, that Court had' jurisdiction to entertain the
suit or not. First appellant is a federa'tion of Cane-Growers' Co-
operative Societies and second appellant is a federating unit or first
appellant. At the relevant time first and second appellants were
H governed by the 1912 Act as well as by the 1953 Act. Each as a Co-
operative Society would be governed by the 1912 Act and each as a
Cane-growers' Co-operative Society and its federation, for the purpose
COOPERATIVE CANE UNION v. LILADHAR (Desai, J.) 56 5

-of regulation-of supply and purchase of sugarcane, would be governed A
by the 1953 Act.

i The question is whether the Civil Court would have jurisdiction
'to entertain a suit in 1964 filed by an employee of a co-operative
society against the Co-operative Society for a declaration that the order
dismissing him from service is vo.id and for a declaration that he con- B
'tinued to be in service with an alternative prayer for damages ? This
contention may be examined first, inter alia, under the provisions of
' 1912 Act and the rules framed thereunder and subsequently whether
" 1ht<_ application of the 1953 Act will have any impact on the conclusion.
We have extracted above the definition of the expression 'officer' c
in -1912 Act. Undoubtedly, it is an inclusive definition. If only the
-officers enumerated in the definition are comprehended within the ex·
pression 'officer', the first respondent is notJ an officer in the sense that
he was neither a Chairman, Secretary, Treasurer, or a member of the
Committee. But the expression 'officer' also embraces such other
person empowered under the rules or the· bye-laws to give directions D
in regard to the business of the society. If ejusdem ieneris canon of
·construction were to be invoked in construing the expression 'officer',
the expression 'other persons' must take colour from the words pre-
ceding it and accordingly other persons therein envisaged must have
some semblance of comparison in respect of power and authority to
-give directigns with regard to the business of the society with the enu- E
merated persons such as chairman. secretary, treasurer or member of
ihe committee. If every employee of the society were to be an officer
it would not be necessary for the legislature to provide that persons other
than chairman, secretary, treasurer or member of the committee must
·be such who must have under the rules or the bye-laws the power to
give directions in regard to the business of the society. First respon- F
·dent was at the relevant time a supervisor in charge of manure godown
drawing a salary of Rs. 150 p.m. Nothing has been pointed out to us
by the appellants with reference either to the rules or bye-laws that
'first respondent as supervisor was empowered by any rules or the bye-
laws to give directions in regarct' to the business of the society. First
respondent thus not being either chairman, secretary, treasurer or mem- G
ber of the committee, or such other person shown to have been em-
powered under the rules or the bye-laws to give directions in regard
to the business of the society, unquestionably he was not an officer
of the society. We are conscious of the fact that the definition of
the expression 'officer' is an inclusive definition. An inclusive defini-
tion widens the etymological meaning of the expression or term in- H
cluding therein that which would ordinarily not be comprehended
'therein. Firstly, keeping apart the expansive definition by including
566 SUPREME COURT REPORTS [1981] I S.C.R-

A officers who would' otherwise not be comprehended in the expression·
'officer', it may be necessary to ascertain whether first respondent,.
giving the expression 'officer' its ordinary etymological meaning, would
be comprehended therein. It may be noticed that the legislature never
intended to include every employee or servant of the society within
the expression 'officer'. There is some element of a right to command·
B in the word 'officer' with someone whose duty it would be to obey.· If
there is an officer ordinarily there will be someone supordinate tO"
him, the officer enjoying the power to command and give directions:
and subordinate to obey or carry out directions. It may be that even
one who is to carry out directions may be an officer in relation to his
subordinates. Thus, what is implicit in the expression 'officer' is made
c explicit by the latter part of definition which provides that such other
person would also be an officer who is empowered under the rules and·
bye-laws to give directions with regard to the business of th~ society.
If it is contended that a particular person is an officer because be is..
empowered to give directions with regard to the business of the society.
it would be a question of fact in each case whether a particular person
D
is an officer or a servant or an employee. Unless the appellants are·
in a position to point out that first respondent was an officer in the·
sense that he had power to command and insist on subordinates to
-0bey his directions with regard to business of the society, it would be·
difficult to believe that a person designated as supervisor drawing a
E salary of Rs. 150 and incharge of manure godown would be an officer.
In this connection it would be advantageous to refer to s. 43(g) of.
the 1912 Act which confers power on the Local Government to make·
rules providing for the appointment, suspension and removal of the
members of the committee and other officer, and for_ the procedure at
meetings of the committee, and for the powers to be exercised and· j
F the duties to be performed by the Committee and other officers. No·
rule enacted in exercise of this power was. pointeP, out to us to assert
that first respondent would be such officer as contemplated in s. 43(g).

Some illustrative cases were relied upon to point out that a godown
keeper would not be an officer within the meaning of s. 2(d). In Co-
G operative Central Bank v. Trimbak Narayan Shinganwadikar(I), an"
accountant serving in a co-operative bank was held not to be an officer
of the Bank inasmuch as he had no power to give any direction in·
regard to the business of the society nor was any rule framed empower-
ing an accountant to give directions. He was held to be a servant of
the society falling outside the' definition of the expression 'officer'. In
Manjeri S. Krishna Ayyar v. Secretary, Urban Bank Ltd. & Anr.('), a1
H
(1) AIR 1945 Nagpur 183.
(2) AIR 1933 Mad. 682.
COOPERATIVE CANE UNION v. LILADHAR (Desai, J.) 56 7

legal adviser of a co-operative society was held to be an officer of the A
society within the meaning of s. 2(d). In Kallash Nath Halwai v. Re-
gistrar, Co-operative Society, U.P. & Ors.( 1), a Division Bench of the
+ Allahabad High Court speaking through Raghubar Dayal, J. (as he
then was), held that a manager of a shop run by a Co-operative Society
was an officer of the society on the finding that he was in a position
to give directions in regard to the business of the shop, a business
which was included in the business of the society. The vital contention
n this matter was whether rule 115 of the U.P. Co-operative Societies
Rules, 1936, was ultra vires, and it was so held. However, this deci-
ion was specifically overruled by a Full Bench of the Allahabad High
·Court in Abu Bakar & A nrr. v. District Handloom Weavers' Co-opera-
tive Society, Mau & Anr.(2), in which it was specifically held that rule
)- 115 of the Rules framed under the Co-operative Societies Act, 1912,
is not ultra vires.

On a conspectus of these decisions and the definition of the ex-
pression 'officer' both expansive definition and its etymological sense,
first respondent a supervisor working as a godown keeper could not be
styled as an 'officer' of the Co-operative Society.
I

The next limb of the argument is whether rule 115 enacted in
exercise of power conferred by clause (1) of sub-s. (2) of s. 43 of the
1912 Act would be attracted. Clause (1) of s. 43(2) confers power to
make rules providing for resolution of disputes envisaged by the claus!!
,.- between the parties contemplated by the clause by the Registrar by
arbitration. In exercise of this power rules 115 and 134 have been
enacted. When rules 115 and 134 are read in juxtaposition· it becomes
clear that if the dispute is one contemplated by rule 115 and arises
between the parties therein envisaged it shall have to be resolved by
·eferring the same to the Registrar who will have to get it resolved
by arbitration either by himself or by arbitrator or arbitrators appoint-
ed by him. Rule 134 provides that a decision of an arbitrator or arbi-
trators under the rules, if not appealed as therein provided, shall be
final as between the parties in dispute and not liable to be called in
question in any civil or revenue court and shall in all respects be final
G
and conclusive. If, therefore, the 1912 Act confers power to enact
~ rules and the rules so enacted are statutory and if the rules provide
for certain types of disputes between certain specific parties to be
resolved by arbitration and the decision of the arbitrators is made final
and conclusive not correctible by the civil court or unquestionable
. before the civil court, undoubtedly, the jurisdiction of the civil court
(!) AIR 1960 All. 194.
(2) AIR 1966 AIL 12.
568 SUPREME COURT REPORTS [1981] 1 S.C.R.

in respect of such specified disputes between specified parties enume-
rated in rule 115 wauld be wholly excluded.

The question boils down to this: is a dispute between an em- +
ployee other than a:n officer of a co-operative society and the society
arising out of a disciplinary proceeding one which would fall within
the ambit of rule 115 ? Clause (iii) of rule 115 was relied upon by
the appellant to urge that such a dispute would be one touching the
business of a registered society and it would be one between the society~
and its committee and any officer of the society. This contention
:-vould stand disposed of in ~iew of our finding that the first respondent
is not an officer of the society, Jn order to attract rule 115 it must
be shown (i) that the dispute is the one touching the business of the
co-operative society ; and (ii) that it is between the society and any -.\
officer of the society. Both the conditions have to be cumulatively
fulfilled before rule 115 is attracted which would result in ouster of
the jurisdiction of the civil court in respect of dispute in view of the
provision contained in rule 134.
,ii)
The first question is, whether a dispute arising out of a discipli-
nary proceeding resulting in dismissal of an employee of a co-opera-
tive society is o'ne touching the business of the society. It is unneces-
sary to dilate upon this aspect in view of the two decisions of this
Court.
E
In Deccan Merchanl's Co-operative Bank Ltd. v. M / s. Dalichand
Jugraj Jain & Ors., (1) s, 91 of the Maharashtra Co-operative Societies ~
Act, 1968, came up for consideration before this Court. After analys-
ing the section and observing that five kinds of disputes are enumeratedA
in sub-s. (1) of s. 91, the fifth being disputes touching the business of
.F a society, the Court held as under:
"It is clear that the word 'business' in this context does no~
mean affairs of a society because election of office-bearers, conduct ....
of general meetings and management of a society would be treated
as affairs of a society. Jn this sub-section the word 'business'
has been used in a narrower sense and it means the actual llfad-
ing or comm.ercial or other similar business activity of the society
which the society is authorised to enter into under the Act and -..,.-·
the Rules and its bye-laws".
Proceeding from this angle the Court held that the dispute between
a tenant of a member of the bank in a building which has subse-
.H quently been acquired by the Bank cannot be said to be a dispute
touching the business of the Bank. In reaching this conclusion, this
(l) [1969] 1 SCR 887.
'coOPERATIVE CANE UNION v. LILADHAR (Desai, J.} 569'

Court disapproved the view in Kisanlal & Ors. v. Co-operative Central A
Bank Ltd.( 1), which has relied upon before us. Confirming the view
in the Deccan Merchants Co-operative Bank(2'), this Court in Co-ope-
raPive Central Bank Ltd. & Ors. v. A.dditronal Industrial Tribunal,
Andhra Pradesh & Ors.,( 3) posed a question to itself whether the dis-
pute between the co-operative society and the employee touches the
business of the society in the sense explained by this Court in that
case. The Court answered the contention as under:
\

"Applying these tests, we have no doubt at all that the dis-
pute covered by the first issue referred to the Industrial Tribunal
in the present cases could not possibly be referred fo[ decision
to the Registrar under s. 61 of the Act. The dispute related to
alteratiQU of a number of conditions of service of the workmen C'
which relief could only be granted by an Industrial Tribunal deal-
ing with an industrial dispute. The Registrar, it is clear from
the provisions of the Act, could not possibly have granted the
reliefs claimed under this issue because of the limitations placed
on his powers in the Act itself. It is true that s. 61 by itself does
not contain any clear indication that the Regist:rar cannot enter-
tain a dispute relating to alteration of conditions of service of the·
employees of a registered society ; but the meaning given to the
expression 'touching the business of the society', in our opinion,
makes it very doubtful whether a dispute in respect of altera.tion
of conditions of service can be held to be covered by this expres·
sion. Since the word 'business' is equated with the actual trading.
or commercial or. other similar business activity of the society,
and since it has been held that it would be difficult to subscribe
to the proposition that whatever the society does or is necessarily
required to do for the 'purpose of carrying out its objects, such
as laying down the conditions of service of its employees, can be F'
s.aid to be a part of its business, it would appear that a dispute
relating to conditions of service of the workmen employed by th~
society cannot be held to be a dispute .touching the business of
the society".
Therefore, on the strength of the aforementianed two decisions
it has to be held that a dispute arising out of a disciplinary proceedfog G
resulting in dismissal of an employee of the society cannot be said
to be a dispute touching the business of the society.
To some extent this conclusion can be reinforced by reference to
the U.P. Co-operative Societies Act, 1965, which repealed and replaced
(I) AIR 1946 Nagpur 16. H'
(2) [1969] I SCR 887.
(3) [1970J I SCR 205.
570 SUPREME COURT REPORTS [1981] 1 S.C.R.

the Co-operative Societies A:ct, 1912, in its application to the State
of U.P. Section 70 of the 1965 Act provides for settlement of disputes.
The relevant portion reads as under:
"70. Disputes which may be referred to arbitration-(!) Not- +
withstanding anything contained in any law for the time being in
force, if any dispute relating to the constitution, management or
B the business of a co-operative society other than a dispute regard-
ing disciplinary action taken against a paid servant of a societ~
arises- ......... ".
It will be.crystal clear that while making a statutory provision fo"
resolution of disputes involving co-operative socfoties by arbitration
by the Registrar, the legislature in terms excluded a dispute relating
to disciplinary action taken by the society against paid servants ~f the -~
society from the purview of the compulsory arbitration. It is legisla-
tive exposition of the topic under discussion. It must, however, be
made distinctly clear that at the relevant time W12 Act was in force
and the contention bas to be answered with reference to 1912 Act and
the rules framed thereunder. It is, however, difficult to believe that
the 1965 Act which repealed and replaced the 1912 Act excluded from
the field of operation that which was already included under the re-
pealed Act. 0.u the contrary it would appear that what was implicit
in the 1912 Act and the rules framed thereunder that such a dispute
did not touch as the business of the society and was not within the
E purview of the compulsory arbitration, was made explicit by expressly
excluding it from the field of compulsory arbitration. ~
However, we would rest this judgment on the second limb of the
submission in that not only the dispute must be one touching the
business of the society but it must be between the co-operative society
A
F and its officer. Firstly respondent being shown not to be one of enu-/j
merated officers of 'the society nor a person empowered to give direc- \
tions in regard to the business of the society under the rules or the '
bye-laws, he would not be an officer within the meaning of the expres-
sion in 1912 Act. Any dispute between an employee not being an
officer and the society would not attract' rule 115. In that view of the
matter such a dispute would fall outside the purview of rule 115 and
it being a civil dispute and civil court will have jurisdiction to enter- --,
tain and adjudicate upon the same.

The High Court approached the matter from an entirely different
angle. The learned judge held that this case would be governed by
.H the 1953 Act and rules 54 and 55 enacted in exercise of the powers
conferred by s. 28 of the 1953 Act have provided a specific forum,
viz., a reference to the Cane Commissioner and appeal to the State
\
COOPERATIVE CANE UNION v. LILAOHAR (Desai, J.) 5 71

o(}overnment and as rule 108 is not attracted the dispute is not required A
to be referred to arbitration and, therefore, the civil court will have
jurisdiction to entertain the suit. With respect, it is difficull to subs-
cribe to .this view of the High Court. 1953 Act has been enacted to
+ -regulate supply and purchase of sugarcane required for use in sugar
factories, gur, rab and khandsari manufacturing units. It envisages
setting up of a sugarcane board and the board was entrusted with the B
function pertaining to the regulation, supply and purchase of cane for
sugar factories and for the maintenance of healthy relation between
occupiers, managers, of factories, cane growers, co-operative societies,
etc. The Act also envisaged setting up of a developJllent council and
its functions have been enumerated in s. 6. On a survey of these
provisions it appears that the Act was enacted to regulate relations c
between the cane-grower~ on one hand and sugar factories on the
other. The expression' 'cane growers' co-operative society' has been
defined in s. 2(f) to mean a society registered urider the Co-operative
Societies Act, 1912, one of the objects of which is to sell cane grown
by its members and includes the foderation of such societies registered
D
under s. 8 of the said Act. The appellant is thus a co-operative society
and it being a federation of such co-operative societies it is also in-
cluded in the expression "cane growers' co-operative society". Section
28(2)(n) of the Act was relied upon to show that the State Government
has power to frame rules amongst others, for the control of the staff
and finances. In exercise of this power rules 54 and 55 have been E
enacted. Rule 54 provides that the power to appoint, grant leave of
absence, to punish, dismiss, transfer and control secretaries,- assistant
secretaries and accountants of Cane Growers' Co-operative Societies
whether permanent or temporary shall be exercised by the federation,
subject to the general control of the Cane Commissioner who may
rescind or modify any order of the Federation. There is a proviso F
which is not relevant for the present purpose. Rule 55 confers powers
similar to those enumerated in rule 54 to be exercised by the society
in respect of other staff subject to the regulations made by the federa-
tion and the general control of the Cane Commissioner. Shorn of em-
bellishmeht, rule 55 confers power on the Federation, namely, the first
appellant, to make regulations for appointment, granting leave of G
absence, punishment, dismissal and transfer of the staff other than
those enumerated ·in rule 54 and these regulations have to be made
subject to the general control of the Cane Commissioner Rule 108
provides for compulsory arbitration of disputes therein mentioned and
it is common ground that a dispute of the present nature under exami-
nation win not be covered by rule 108. The High Court observed H
that rules 54 and 55 being a complete code in itself with regard to
regulaticn making power for disciplinary action with a provision for
572 SUPREME COURT REPORTS [1981] l S.C.R.

A appeal to the Cane Commissioner and rule 108 not being attracted,.
the civil court will have jurisdiction to entertain the present dispute.
The High Court overlooked the fact that 1953 Act neither repeals nor
replaces 1912 Act. A cane-grower other than a Cane-growers' Co-
operative Society would be governed by 1953 Act but the cane grower
not being a co-operative society it would not be governed by the 1912
B Act. A Cane-Growers' Co-operative Society would be governed with
regard to the provisions for law of Co-operative Societies by 1912 Act
and in respect of its business of growing and selling cane it would be
governed by 1953 Act. Both Acts operate in an entirely different field
and are enacted with different objects. in view. 1953 Act neither
trenches upon 1912 Act nor supersedes or supplants any provision of
c
it. Therefore, some provisions of 1953 Act cannot override or super·
sede the provisions of 1912 Act and by mere reference to the provi-
sions of 1953 Act the High Court was in error in totally overlooking
and ignoring the provisions in 11:) 12 Act and the rules enacted there-
under.
D However, in view of our finding that the dispute brought before
the Civil Court in this case was not a dispute between a society aud-
its officer and, therefore, one of the conditions for attracting rule ll 5
having not been satisfied, the civil court will have the jurisdiction to
entertain the suit. For these reasons the decision of the High Court
E is confirmed. Accordingly this appeal fails and is dismissed with
costs.
As the dispute is very old, we hope that it would be expeclitiously
disposed of by the learned district· judge to whom the matter was
remanded by the High Court.
F
Appeal dismissed.
/
S.R.