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Issues: (i) whether a supervisor-cum-godown keeper of a cane growers' co-operative society was an "officer" of the society so as to attract the arbitration clause in rule 115 of the U.P. Co-operative Societies Rules, 1936; (ii) whether a dispute arising out of disciplinary action and dismissal of such an employee was a dispute "touching the business of the society" and therefore outside the jurisdiction of the civil court.
Issue (i): whether a supervisor-cum-godown keeper of a cane growers' co-operative society was an "officer" of the society so as to attract the arbitration clause in rule 115 of the U.P. Co-operative Societies Rules, 1936.
Analysis: The definition of "officer" in section 2(d) of the Co-operative Societies Act, 1912 was inclusive, but it did not extend to every employee of the society. The expression covered the enumerated office-bearers and such other persons as were empowered by the rules or bye-laws to give directions in regard to the business of the society. Applying the ordinary meaning of the term and the principle of ejusdem generis, a supervisor in charge of a manure godown drawing a modest salary and shown to have no power to direct the business of the society could not be treated as an officer. No rule or bye-law was shown to confer such authority on him.
Conclusion: The employee was not an officer of the society, and rule 115 could not be attracted on that basis.
Issue (ii): whether a dispute arising out of disciplinary action and dismissal of such an employee was a dispute "touching the business of the society" and therefore outside the jurisdiction of the civil court.
Analysis: Rule 115 and rule 134 of the U.P. Co-operative Societies Rules, 1936 excluded civil court jurisdiction only where the dispute both touched the business of the society and arose between the specified parties. The expression "business of the society" was construed in a narrower sense, meaning the society's actual trading or commercial activity, and not its internal service matters. A dispute regarding disciplinary proceedings and dismissal of an employee did not answer that description. The later U.P. Co-operative Societies Act, 1965, by expressly excluding disciplinary action against a paid servant from compulsory arbitration, reinforced the same construction. The U.P. Sugarcane (Regulation of Supply and Purchases) Act, 1953 and the rules framed under it did not override the 1912 Act in this respect, since they operated in a different field.
Conclusion: Such a dispute did not touch the business of the society, and the civil court's jurisdiction was not barred.
Final Conclusion: The dismissal dispute remained triable by the civil court, and the appeal failed.
Ratio Decidendi: A disciplinary dispute between a co-operative society and an employee who is not an officer does not fall within a rule conferring compulsory arbitration over disputes touching the business of the society, and therefore does not oust civil court jurisdiction.
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