U.P. CO-OPERATIVE CANE UNION FEDERATION LTD. & ANOTHER versus LILADHAR & OTHERS

Citation: [1981] 1 S.C.R. 558 · Decided: 27-08-1980 · Supreme Court of India · Bench: P.N. SHINGAL, D.A. DESAI · Disposal: Dismissed

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Judgment (excerpt)

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U.P. CO-OPERATIVE CANE UNION 
FEDERATION LTD. & ANOTHER 
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v. 
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" 
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. 
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 
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 
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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 Pur-, 
..,. 
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 
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 
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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 
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,to include every employee or servant of the society within, the expression 
·"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-
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 
<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 r

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