UP Cooperative Societies Act And Not Industrial Disputes Act Applies To Disputes Between Employer-Employee In Cooperative Society: Allahabad HC

The Allahabad High Court has held that any dispute between an employer and employees of a cooperative society are to be adjudicated under the U.P Cooperative Societies Act, 1965 and not the under the provisions of U.P. Industrial Disputes Act, 1947.

Relying on the decision of the Supreme Court in Ghaziabad Zila Sahkari Bank Limited Vs. Additional Labour Commissioner and others and the division bench of the High Court in Ramji Lal Tewari Vs. U.P. Co-operative Sugar Federation Ltd. Lko, bench comprising of Justice Alok Mathur held “it is clear that the Labour Court had no jurisdiction to entertain and decide the said matter pertaining to a Society constituted under the Act, 1965.”

Factual Background

Respondent-employee, Ajay Kumar Mishra, was appointed on adhoc basis for 89 days. Thereafter, his employment was extended from time to time till 1984 after which he was terminated. Aggrieved, he approached the Conciliation Officer, who referred the matter to UP Industrial Tribunal.

A preliminary objection was raised by the U.P. Cooperative Federation Limited before the Tribunal as to the maintainability of the reference by relying on the decision of the Supreme Court in Ghaziabad Zila Sahkari Bank Limited Vs. Additional Labour Commissioner and others. However, it was rejected. UP Industrial Tribunal, Lucknow set aside the termination of the employee and directed to reinstatement with 50 per cent back wages.

Other than raising the objection on maintainability of the proceedings before the tribunal, Counsel for petitioner contended that the Tribunal erred in holding that the employee had worked for more than 240 days. Further, it was contended that the employee was hired for a specific period of time, and once that period was over, his services could be terminated.

In response, counsel for respondent-employee argued that Ghaziabad Zila Sahkari Bank Limited is not a good law as it does not consider Dharappa Vs. Bijapur Coop. Milk Producers Societies Union Ltd., wherein the Supreme Court held that unless a statute specifically ousts the jurisdiction of Labour Court, both courts would have concurrent jurisdiction. Employee of a cooperative society would be at liberty to raise dispute before the Labour Court or before the Registrar under the Cooperative Societies Act.

Further, it was emphasised that the decision in Dharappa has been upheld by Apex Court in K.A. Annamma Vs. Secretary, Cochin Cooperative Hospital Society Limited, as the Karnataka Societies Act does not create any express bar for the Labour Court/Industrial Tribunal from deciding the service disputes arising between a Cooperative Society’s Employee and his/her Employer (Co-operative Society). Similarly, it was argued that U.P Cooperative Societies Act does not create any express bar to exclude the jurisdiction of Industrial Tribunal.

High Court Verdict

On the merits of the case, the Court held that there was no infirmity in the award of the Tribunal. However, the Court delved into the issue of maintainability of proceedings before the Tribunal.

The Court distinguished the decision of the Apex Court in K.A. Annamma Vs. Secretary, Cochin Cooperative Hospital Society Limited on the grounds that it was with respect to Kerala Cooperative Societies Act where concurrent jurisdictions were available under the Cooperative Society Act and the Industrial Tribunal Act.

The Court relied on the decision of the Supreme Court in Ghaziabad Zila Sahkari Bank Limited Vs. Additional Labour Commissioner and others, wherein in view of Section 70 of the U.P Cooperative Societies Act jurisdiction of labour court was specifically ousted from such disputes.

“In the present controversy the issue which has been raised by both the parties is as to whether an employee of the Cooperative Society can maintain an application pertaining to his service dispute taking recourse of the Act, 1965 or the Act, 1947. This Court has also considered the judgements of the Hon’ble Supreme Court as well as the statutory provisions and finds itself bound by the judgment of the Apex Court, in the case of Ghaziabad Zila Sahkari Bank Ltd.(supra), where the Hon’ble Supreme Court after considering the provisions of the Act, 1965, in great details along with Section 135 of the said Act, have concluded that provisions of the Act, 1947 stands excluded with regard to the employees of the Cooperative Societies.”

Accordingly, the Court held that Section 70 of the Act specifically ousts the application of U.P. Industrial Disputes Act, 1947 from any disputes between the employer and employee of a cooperative society which is governed by U.P Cooperative Societies Act, 1965.

Case Title: U.P. Cooperative Federation Limited through its Managing Director and Another v. Presiding Officer, Industrial Tribunal (2), U. P. Lucknow and two others [Writ C No.1006454 of 2011]

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