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Petitioner: J. J. MIRANDA VS Respondent: FISHERMEN's CO OPERATIVE SOCIETY LTD., KARACHI AND
Court Name: Sindh High Court Judge(s): Ajmal Mian Title:J. J. MIRANDA vs FISHERMEN's CO OPERATIVE SOCIETY LTD., KARACHI AND
JUDGMENT
Reported As: PLD 1978 Karachi 990 Result: Suit decreed Judgment JUDGMENT The facts leading to the filing of the suit, as disclosed in the plaint, are that the plaintiff was appointed as.. Accounts Officer by defendant No. 1 through a letter dated 9-5-64: It has been further asserted that the plaintiff completed the probationary period and that defendant No. 1 having found the work of the plaintiff to their full satisfaction confirmed the plaintiff in permanent cadre of Accounts Officer through a resolution of the Board of Directors of defendant No. 1 dated 15-1-65. It is further averred that on account of the plaintiff's performance defendant No. I was able to earn a profit of Rs. 25,12,870.65 for the year 1964-65 and that the liabilities of defendant No. 1 were also reduced to Rs. 5,88,091.07 against the previous figure of Rs. 22,20,708.30. 1t has been further asserted that on or about 17-2-66 Mr. M. U. Fazlani the then Manager of defendant No. 1 was relieved of from the service and the plaintiff was directed by defendant No. 1 to take over the charge of the Manager in the Society till such time Mr. Zafar Ahmed Khan was appointed as the Manager in place of Mr. Fazlani. It has also been averred that on account of the plaintiff's unyielding attitude to safeguard the finance and funds of the Society and to see their application strictly for the well-being of the Society caused the displeasure of the newly-appointed Manager. It has been further averred that the working of the defendant society was deteriorated since Mr. Zafar took over as Manager and that the plaintiff was assigned outdoor duties by the aforesaid Manager in order to keep the plaintiff away. It has been further asserted that the plaintiff made representations to defendant No. 1's directors but without any result. It has been further averred that said Zafar Ahmed the new Manager incurred huge expenses on frivolous accounts in utter disregard to the rules of the Society which fact was brought by the plaintiff to the notice of the Chairman of defendant No. 1,
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but to his surprise the same remained unchecked. It has been further asserted that the plaintiff submitted a detailed factual report to the Chairman of defendant No. I about the account affairs of the Society and pointed out the colossal irregularities in the Account Department com--mitted by the Manager Zafar Ahmed Khan but to the plaintiff's utter dismay while he was awaiting the reply to this report, he received a letter dated 18-4-67 informing that his services were terminated from 18-4-67. It has been further asserted that the plaintiff was also directed to hand over complete charge of Accounts Department to the Manager War Ahmed Khan. It has also been averred that against the above illegal sad mala fide termination of his service the plaintiff made representation to the Deputy Registrar of the Co-operative Societies, who by his letter dated 25th April 1967 directed the Chairman of defendant No. I that the order for termination of plaintiff's service was absolutely illegal and was against the provisions of the service rules framed by the Society. It has been further asserted that on the basis of the aforesaid letter of the Deputy Registrar of the Co- operative Societies the plaintiff was re-instated to his post by resolution dated 1 &4-67, namely, the date on which the plaintiff's services were earlier terminated. 2. It has been further stated that in the above resolution dated 3-5-67, it was also resolved that G. M. Nuruddin would prepare charge--sheet against the plaintiff while the Chairman of the Society and Mr. Mushtaq Ahmed were appointed as Inquiry Officers to inquire against the plaintiff and to look into the charges. It has been further averred that on 10-5-67 the plaintiff was served with a charge-sheet in which as many as 13 charges were levelled against the plaintiff and that the plaintiff was allowed 7 days time to submit his reply to the charge-sheet. It has been further averred that on or about 15-5-67 the plaintiff was served with a supplementary charge-sheet described as addenda. It has been further averred that the plaintiff was not allowed access to the record of the office in order to enable him to prepare his reply to the charge-sheet yet he submitted the reply to the first charge-sheet on 15-5-67 and to the supplementary charge-sheet on 21-5-67. It has been further averred that after the submission of the reply by the plaintiff to the charge-sheet, the plaintiff was informed by the letter dated 26-5-67 to attend before the Inquiry Officers Mr. G. S. Kehar and Mushtaq Ahmed for further proceedings at 3 p. m. On 2-6-67 in the office of the Deputy Registrar. It has been further averred that on 2-6-67 when the plaintiff appeared before the Inquiry Officers no discussion took place on the charge-sheet nor any proceeding took place to consider the charges against the plaintiff and the reply submitted thereto and that the Inquiry Officers Mushtaq Ahmed and G. S. Kehar asked the plaintiff to submit his resignation on accepting a sum of Rs. 52,066 which was due to the plaintiff on account of the various items of salaries, increments, difference of pay, bonus, manager's officiating pay, salary in lieu of earned leave etc. It has been further asserted that the plaintiff did not accede to the above demands of the Inquiry Officers and on 3-6-67 made a written request to the inquiry officers to inform the plaintiff about the position of his case and the findings of the Inquiry Officers so as to enable him to furnish his reply. It has been further asserted that in spite of the receipt of the plaintiff's above letter dated 3-6-67 the plaintiff was neither supplied the copy of the inquiry report nor was given any hearing in the case and on 15-6-67 when the plaintiff applied to defendant No. I for the grant of 6 months earned leave he was handed over a letter of termination of his services in pursuance of an alleged decision of the Board of Directors of the same day. The plaintiff had chal-- lenged the above termination of his service on the various grounds mentioned by him in the plaint and has claimed a sum of Rs. 25,666 on account of the various items mentioned in para. 39 of the plaint and also a sum of Rs. 2,40,000 by way of special damages on account of loss of reputation, loss of service and emoluments. The plaintiff has also claimed a sum of Rs. 10,000 as general damages for the loss of health and of mental torture, in addition to the claiming of declaration that the termination was illegal, without jurisdiction, mala fide and against the provisions of the rules governing the service of the plaintiff.
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3. The defendants have filed their written statements. Defendant No. 1 in its written statement has raised preliminary objections about the maintain--ability of the suit on account of non- compliance of the mandatory provisions of section 70 of the Co-operative Societies Act, 1925, relating to the service of two months notice prior to the filing of the suit, and because of section 54 of the above Act. On merits defendant No. 1 has denied the various allega--tions contained in the plaint. It has been averred that the plaintiff had no hand in the increase of the income of the Society but the same was due to the boom in the fishing trade and fish catches. It has also been averred that the plaintiff was never asked to take over the charge as manager from the outgoing Manager Mr. Fazlani. Defendant No. I in para. 8 of the written statement has also given the details of the various irregu--larities and negligent acts on the part of the plaintiff. It has also been averred that the plaintiff was not assigned any extra work and that the arbitration work pertains to the Accounts Department and, therefore, the plaintiff was to attend the same. It has also been asserted that on account of the plaintiff's mishandling of his job resulted in non-maintenance of regular accounts as reported by the auditors. It has also been asserted that there has not been any sanction by the Chairman of defendant No. 1 against the rules of the Board's Resolutions. It has also been asserted that the plaintiff had made allegations in order to cover his own inefficiency, insubordination and gross misconduct. It has been denied that the termination of the service of the plaintiff was in any way mala fide or against the provisions of the rules of defendant No. 1. It has been averred that the Directors of defendantNo. 1 having considered the past record of the plaintiff decided that the services of the plaintiff were no more required and thus the plaintiff'; service was terminated with effect from 18-4-57. 4. It has been further asserted that the plaintiff was given sufficient time to answer his charge and that the plaintiff was given full access to the record which opportunity he availed of. It has also been asserted that the plaintiff was given full opportunity for explaining his position in person before the Inquiry Committee set up by the Board of Directors of defendant No. 1. It has also been averred that the plaintiff appeared before the Inquiry Committee on 2-6-67 in the office of the Deputy Registrar, Co--operative Societies, when he was heard in person by the Committee. It has been denied that the Inquiry Committee made any alleged offer to the plaintiff for obtaining his resignation. It has not been denied that the plaintiff had requested for a copy of the inquiry report but it has been stated that in the letter of request the plaintiff fraudulently mentioned 3-6-67 in his letter which he had posted on 8-7-67 requesting for inquiry report. It has been averred that the Inquiry Committee submitted its findings to the Board of Directors of defendant No. 1 which in its meeting dated 6-6-67 terminated the service of the plaintiff with effect from 15-6-67. It has also been averred that the action taken against the plaintiff was strictly in accordance with the service rules of defendant No. 1 sad was bona fide, legal, proper and justified. It has been averred that the plaintiff was given full opportunity to defend himself against the allegations he was charged with which opportunity he fully availed of. It has also been asserted that the plaintiff could not be given clearance due to his negligence of duty, inefficiency and misconduct. It has been denied that the action of termination is mala fide and illegal. It has also been stated that the plaintiff was jobless not on account of any fault of defendant No. 1. It has been asserted that due to the negligence of duty, inefficiency and misconduct of the plaintiff defendant No. 1 Society has suffered financial loss as well as loss in prestige and that the plaintiff was himself responsible for what he was faced with now. It has been further asserted that the plaintiff's services were terminated as his conduct and performance was such as not to entitle him to remain in service of defendant No. 1. It has been denied that the plaintiff is entitled to claim the various amounts claimed by him in paras. 39(11), (I1I), (IV), (V), (VI) and (VIII) it has been stated that the plaintiff is entitled to recover a total sum of Rs. 5,193.66 from defendant No. 1.
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5. Defendant No. 2 in its written statement has denied the various allegations contained in the plaint and inter alia pointed out that the Deputy Registrar who was one of the members of the Inquiry Committee was in fact also one of the Directors of defendant No. 1. It has also been pointed out that the plaintiff was re-instated to his service after first termination at the behest of the said Deputy Registrar Mr. Mushtaq Ahmed. It has also been stated that Mr. Mushtaq Ahmed was appointed as one of the members of the Inquiry Committee as a Director of defendant No. 1 and not in the capacity of the Deputy Registrar. 6. On the basis of the above pleadings the following issues were framed by the Court; "(1) What were the terms and conditions governing the employment of the plaintiff, and whether his removal from service was illegal and mala fide ? . (2) Whether the plaintiff has suffered any special and general damages on account of his removal from service, if so, what should be the damages ? (3) Whether the plaintiff is entitled to the claims in para. 39 of the plaint 2 (4) Whether the order passed by the Deputy Secretary of the Co-operation Department, of the then Province of West Pakistan, dated the 20th July, 1968, was illegal and without jurisdiction ? (5) Whether the suit is not maintainable on account of the provisions under sections 54 and 70 of the Co-operative Societies Act, 1925 ? (6) What should the decree be ? (7) General." 7. The learned counsel for the defendant submitted that issue No. 5 should be heard first, as it relates to the maintainability of the suit. I intend to deal with the issue. "54. Arbitration.-If any dispute touching the business of the society other than a dispute regarding disciplinary action taken by the Society or its committee against a paid servant of the society arises-- (a) between members or past members of the Society or persons claiming through a member or past member, or (b) between members or past members or persons so claiming and any past or present officer, agent or servant of the Society, or (c) between the Society or its Committee, and any past or present member of the Society, or (d) between the Society or its Committee and any past or present officer, agent or servant of the society or a surety of such officer, agent or servant, whether such surety is or is not a member of the Society, or (e) between a financing bank authorised under subsection (1) of section 34 and a person who is not a member of a Society it shall be referred to the Registrar for decision by himself or his nominee, or if either of the parties so desires, to arbitration of the three arbitrators who shall be the Registrar or his nominee and two persons of whom one shall be nominated by each of the parties concerned. A dispute shall include the question whether a person is or was a member of a Society and also claims by a Society for debts or demands due to it from a member past member or non-member or the heirs of assets of past member or non-member whether such debts or demands be admitted or not; Provided that if the question at issue between a society and a claimant, or between different claimants is one involving complicated question of law and fact, the Registrar may, if he thinks fit, suspend proceedings in the matter until the question has been tried by a regular suit instituted by one of the parties or by the society. If no such suit is instituted within six months of the Registrar's order suspending proceedings the Registrar shall take action as laid down in paragraph 1 of this section.
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70. Notice necessary in suits.---No suit shall be instituted against a society or any of its officers in respect of any act touching the business of the Society until the expiration of two months next after notice in writing has been delivered to the Registrar, or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left." 8. A perusal of the above-quoted sections shows that under section 54 any dispute relating to the business of a Society other than a dispute regarding disciplinary action taken by the Society or its committee against a paid servant of the Society between the parties mentioned in the above section is referable to arbitration. Whereas under section 70 it has been provided that no suit shall be instituted against a Society or any of its officers in respect of any act touching the business of the Society until the expiration of two months next after the notice in writing has been delivered to the Registrar with the detail of the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims and the plaint should contain a statement that such a notice has been delivered or left. 9. Mr. Nurul Hassan learned counsel for the defendant has contended that the plaintiff had not served any notice as required under section 70 before filing of the above suit and that the plaint also does not contain a statement to the effect that such a notice has been served on the defendant, According to the learned counsel the suit should be dismissed on that account. Reliance has been placed on the case of Bhagchand Dagdusa Gujrathi and others v. Secretary of State for India (AIR 1927 P C 176), the case of Province of West Pakistan and others v. Ghulam Kadir and others (PLD 1963 Kar. 337), the case of Dharwar Urban Co-operative Bank Ltd. v. Ramchandra Govind Rao Alnavar and others (AIR 1937 Bom. 231) the case of N.-W. Railway Administration v. N: W. Railway Union, Lahore (AIR 1933 Lah. 203). On the other hand, the learned counsel for the plaintiff has submitted that as a matter of fact no notice was required under section 70 of the Co--operative Societies Act, 1925 as the subject- matter of the suit does not fall within the ambit of the words 'in respect of any act touching the business of the society'. In support of the above contention the learned counsel for the plaintiff has relied upon the case of Choudhry Nazir Ahmed v. Agha Ahmed Raza Khan (1971 SCMR 305) and the case of Messrs Co-operative Mill Societies Union Ltd. v. State of West Bengal and others . So it will be appropriate that the question as to whether any notice under section 70 was required, may be considered first. 10. Referring to the case of Choudhry Nazir Ahmed v. Agha Ahmed Raze Khan, it may be stated that the facts of the case were that the petitioner was working as a Sub-Accountant in the Gujrat Central Co-operative Bank Ltd., Gujrat. He felt aggrieved over certain matters, namely, that he was not confirmed although according to him, he was entitled to confirmation as a sub-accountant and that he was not promoted to the post of junior Accountant though according to him, he was entitled to, and that he was fined Rs. 10 by the bank without intimating the reason thereof, and that he was entitled to certain earned leave which was granted as leave without pay. The petitioner as per section 54 of the Co-operative Societies Act got the above dispute referred to arbitration to the Assistant Registrar. The Assistant Registrar gave his award on 11-2-1969 in favour of the petitioner. The respondent bank filed an appeal against the above award before the Secretary, Co-operation Department the then Government of West Pakistan, who by his order dated 7-6-1969 accepted the appeal and set aside the award, on the ground that the Assistant Registrar had no jurisdiction in the matter. Thereafter, the petitioner filed a writ petition challenging the above order of the Secretary, Co-operation to the then Government of West Pakistan, which was dismissed in limine by the defunct High Court of West Pakistan Lahore Bench. Against the above dismissal the petitioner filed a petition for leave to the Supreme Court of Pakistan. The question before their Lordships was, as to whether the disputes raised by the petitioner could be covered by the words
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'any dispute touching the business of a society' used in section 54 quoted hereinabove. Reliance was also placed by the petitioner on section 43 of the Co-operative Societies Act of 1912 which provided arbitration similar to which has been provided under the above section 54 referred to hereinabove. Their Lordships while dismissing the petition were pleased to observe as follows;---- "A casual reference to the impugned order appearing at page 83 of the paper book will show that the subject-matters of dispute between the parties are service matters and as such not referable to arbitration under any of the aforesaid Acts." A perusal of the above-quoted observation of their Lordships will indicate' -that the terms 'touching the business- of the society' would not cover then dispute relating to the service matters raised by an employee of the Society. 11. Referring to the case of Messrs Co-operative Mill Societies Union Ltd. v. State of West Bengal and others referred to hereinabove it may be pertinent to state the facts which were that the workers of the above Co-operative Union had taken the dispute to an Industrial Tribunal under the Industrial Disputes Act, 1947. Against the order of the Industrial Tribunal the above Union filed a writ petition in which it was contended that the Industrial Tribunal had no jurisdiction to try a dispute between a Co-operative; Society registered under the Co-operative Societies Act and its workmen on the ground that the Bengal Co-operative Societies Act, 1940 being a special statute relating to Co- operative Societies would prevail over the provisions of the above Industrial Disputes Act. The learned Single Judge of the Calcutta High Court, who heard the above writ petition dismissed the same inter alia on the ground that the dispute between the Co-operative Society and its workmen does not relate to the actual business of the co-operative society and, therefore, the same was not covered by sections 86 and 87 of the Bengal Co-operative Societies Act. It may be advantageous to quote hereinbelow the relevant observation of the learned Judge given at page 375 which reads as follows;--- "Sections 86 and 87 of the Bengal Co-operative Societies Act, 1940, appear in Ch. IX of that Statute under the chapter heading 'Settlement of Disputes'. There is no doubt, that they provide a complete self---contained code for settlement of disputes. But the kind of dispute that is intended to be referred to the Registrar has to be determined by the actual language used in section 86 of the Act. It is not any and every dispute that is to be referred to the Registrar udder section 86. There is a limitation of the kind of dispute which can be referred to the Registrar. The significant words limiting the nature and type of dispute is contained in the expression "touching the business of a Co- operative Society" in section 86 of the Act. It is, therefore, clear that the dispute has to touch the business of- the Co-operative Society. Now a co-operative society can do many kinds of business which may certainly include business of industrial nature. Can a dispute between a co-operative society and its own workmen be said to be a dispute touching the business of a co-operative society. Strictly speaking, dispute between a co-operative society and its workmen does not relate to the actual business of a co-operative society and therefore does not touch the business of the co-operative society. Consequently however a dispute between the cooperative society and its workmen may ultimately touch or affect the business of the co-operative society. I am inclined to think that the remote and, the consequential result should not be included within the expression "any dispute touching the business of a co- operative society". I am persuaded to accept that construction by the further consideration of the fact that a dispute regarding disciplinary action taken by a society or its managing committee against a paid servant of the society is expressly excluded from the purview of the Registrar's jurisdiction by this section 86 of the Act. Legislature, therefore did not intend that dispute regarding disciplinary action by the society against its paid servant should be settled by the Registrar. But then this singular exclusion of dispute regarding disciplinary action might be argued to impliedly
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include all other disputes of 'expressio unius est exclusio alterlus', specially when section 86(a) of the Act expressly refers to the society and its servant as disputing parties." 12. Whereas the learned counsel for the defendant Mr. Nurul Hassan has contended that a dispute in respect of service matter between an employee and a co-operative; society is covered under section 54 as well as under section 70 of the Act as the same relates to the business of the society. His further contention was that the words "touching the business of the society" are of very wide import and, therefore, restricted interpretation should not be given. In support of his contention he has relied upon the case of M. S. Madhava Rao and others v. D. V. K. Surya Rao (AIR 1954 Mad. 103), the case of Gopinath and another v. Ramnath (AIR 1925 All. 356), and the case of Kisanlal v. Co- operative Central Bank Ltd. (AIR 1946 Nag. 16). The facts of the Madras case were that there was an election of the Directors of the Co-operative Bank which was challenged before the Deputy Registrar, Co-operative Societies, who had set aside the election. After that…
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