1
REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 197 OF 2018 (Arising out of S.L.P.(C) No.29765 of 2016) Smt. K.A. Annamma ….Appellant(s) VERSUS The Secretary, Cochin Co-operative Hospital Society Ltd. …Respondent(s) J U D G M E N T Abhay Manohar Sapre, J. 1. Leave granted. 2. This appeal is directed against the final judgment and order dated 21.12.2015 passed by the High Court of Kerala at Ernakulam in W.P.(C) No.18354 of 2010 whereby the High Court allowed the writ petition filed by the respondent herein and 2 set aside the award dated 23.09.2009 of the Labour Court, Ernakulam in I.D.No.32 of 2006. 3. In order to appreciate the controversy involved in the appeal, which is essentially legal in nature, mentioning of few undisputed facts would suffice. Facts in brief 4. The respondent is the Cooperative Society registered under the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as “the KCS Act”). The appellant was an employee of the respondent-Society. By order dated 22.03.2005, the respondent-Society dismissed the appellant from service.
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 197 OF 2018 (Arising out of S.L.P.(C) No.29765 of 2016) Smt. K.A. Annamma ….Appellant(s) VERSUS The Secretary, Cochin Co-operative Hospital Society Ltd. …Respondent(s) J U D G M E N T Abhay Manohar Sapre, J. 1. Leave granted. 2. This appeal is directed against the final judgment and order dated 21.12.2015 passed by the High Court of Kerala at Ernakulam in W.P.(C) No.18354 of 2010 whereby the High Court allowed the writ petition filed by the respondent herein and 2 set aside the award dated 23.09.2009 of the Labour Court, Ernakulam in I.D.No.32 of 2006. 3. In order to appreciate the controversy involved in the appeal, which is essentially legal in nature, mentioning of few undisputed facts would suffice. Facts in brief 4. The respondent is the Cooperative Society registered under the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as “the KCS Act”). The appellant was an employee of the respondent-Society. By order dated 22.03.2005, the respondent-Society dismissed the appellant from service.
5. The appellant, felt aggrieved of her dismissal
order, filed a complaint with the State Government
against the respondent-Society under the Industrial
Dispute Act, 1947 (hereinafter referred to as “the ID
Act”). The conciliation having failed, the appropriate
Government made an industrial reference to the
Labour Court, Ernakulum under Section 10 of the
3
ID Act for deciding the legality and correctness of
the appellant's dismissal and to pass appropriate
consequential orders, if any.
6. The Labour Court, by award dated 23.09.2009
answered the reference in appellant’s favour. It was
held that the dismissal order is bad in law and was
accordingly set aside. It was held that during the
pendency of the reference, the appellant has
attained the age of superannuation on 31.05.2007,
therefore, she was entitled to get all monetary and
other service benefits as are permissible in law.
7. The respondent, felt aggrieved of the award of
the Labour Court, filed Writ Petition (Civil)
No.18354 of 2010 in the High Court of Kerala and
questioned its legality and correctness.
8. At this stage, it is necessary to state as to how
the question involved in the writ petition, which
eventually reached to this Court was decided by the
different Benches of the Kerala High Court prior to
4
respondent’s filing the writ petition and during its
pendency.
9. The question, which frequently came up for
consideration before the different Benches of the
High Court of Kerala since 1978, was "when a
service dispute arises between an Employee of any
Co-operative Society and his Employer (Co-operative
Society), whether such dispute is triable by the forum
prescribed under the ID Act or under the KCS Act or
under both the Acts as per the choice of an aggrieved
person to select the forum under any of the two Acts
for deciding such service dispute".
10. In other words, the question was “whether a
service dispute arising between the Cooperative
Society’s Employee and his Employer is capable of
being tried by the forum prescribed under the KCS
Act or by the machinery provided under the ID Act or
it is capable of being tried under both the Acts leaving
the aggrieved person to select one forum under any of
5
the Acts of his choice out of the two for getting his/her
service dispute decided by such forum."
11. The aforesaid question was first decided by two
Full Benches of the Kerala High Court in K.
Balachandran vs. The Dy. Registrar, Co-operative
Societies & Ors., AIR 1978 Kerala 126 = 1978 KLT
249 and Sherly M.U. vs. The President,
Parappuram Milk Producers Co-op. Society Ltd.
& Ors., 2007(1)KLT 809 wherein it was held on the
facts involved in both the cases that the dispute,
which had arisen between the Co-operative Society’s
Employee and his/her Employer, was not capable of
being decided under Section 69 of the KCS Act as it
stood then.
12. This question again came up for consideration
before a Single Judge of the High Court in Board of
Directors, Edava Service Co-operative Bank vs.
The Co-operative Arbitration Court & Ors.,
2008(3) KLT 780 wherein it was held that a service
dispute between a Co-operative Society’s employee
6
and his/her employer is capable of being tried
under both the Acts inasmuch as both the Acts
enjoy concurrent jurisdiction to try and decide such
service dispute.
13. In other words, according to the Single Judge,
one Act does not exclude the other and, therefore,
both the Acts possess concurrent jurisdiction to
decide such dispute leaving the aggrieved person to
choose the forum of his/her choice under any Act
out of the two Acts.
14. This question was again considered by the
Division Bench in Thodupuzha Taluk General
Marketing Co-operative Society vs. Michael
Sebastian, 2010 (1) KLT 938 wherein the Division
Bench concurred with the view of the Single Judge
taken in Board of Directors, Edava Service
Co-operative Bank (supra). It was accordingly
reiterated.
15. Lastly, this question was considered by
another Single Bench in W.P.(C) No.30854/2007
7
entitled Chirayinkeezhu Service Co-operative
Bank Ltd. No.115 vs. K. Santosh & Anr. and then
by the Division Bench in Writ Appeal
No.2516/2009, arising out of the said writ petition.
While hearing the writ appeal, a doubt was raised
before the Division Bench about the correctness of
the earlier decision rendered in the case of
Thodupuzha Taluk General Marketing
Co-operative Society(supra) contending that the
said decision requires reconsideration for various
reasons.
16. Acceding to this prayer, the case was referred
to the larger Bench to reconsider the law laid down
in Thodupuzha Taluk General Marketing
Co-operative Society(supra). This is how the case
was placed before the larger Bench comprising of
three learned Judges.
17. While the larger Bench was hearing the case, it
was noticed that the earlier two decisions of the Full
Bench also need reconsideration because the Single
8
Judge and the Division Bench, subsequent to the
decisions of the Full Bench, have taken a slightly
different view, which appears to be in conflict with
the two Full Bench decisions, resulting in cleavage
of opinions amongst the various Benches of the
same High Court on one question. It is for this
reason, there arose a need to constitute a larger
Bench comprising of five Judges to examine the
question afresh to settle the controversy.
18. The Bench of three Judges then formulated as
many as 9 questions to enable the Bench of five
Judges to answer the questions referred by the
Three-Judge Bench.
19. By order dated 14.09.2015, the Five-Judge
Bench answered the questions referred in the case
of Chirayinkeezhu Services Cooperative Bank
Ltd. vs. Santosh, 2015(4) KLT 163(LB). However,
there was a difference of opinion amongst the five
Judges (3:2) on the questions referred.
9
20. So far as the majority view of three Judges is
concerned, it held that the service dispute arising
between the Co-operative Society’s Employee and
the Employer (Co-operative Society) is triable only
by the forum prescribed under the KCS Act, 1969
and the jurisdiction of the ID Act is excluded and
barred to try such service dispute.
21. So far as the minority view of two Judges is
concerned, it held that such service dispute is
triable under both the Acts, i.e., the KCS Act and
the ID Act. In other words, it held that both the Acts
possess and enjoy concurrent jurisdiction to decide
such service dispute and it is for the aggrieved
person to choose the forum of his/her choice out of
the two Acts to get the service dispute settled
subject to proving the ingredients of the definition of
"Workman", "Industrial Dispute" and the
cooperative Society to be the “Industry” as defined
under the ID Act, if he/she desires to invoke the
10
jurisdiction of the ID Act for deciding the service
dispute.
22. Relying upon the majority view, the writ
petition filed by the respondent(employer) in the
case at hand was allowed by the learned Single
Judge, resulting in setting aside of the award of the
Labour Court, giving rise to filing of this appeal by
way of special leave before this Court by the
employee.
23. Heard Mr. P.V. Surendranath, learned senior
counsel for the appellant and Mr. Ramesh Babu,
learned counsel for the respondent.
24. Learned counsel for the appellant (employee)
while assailing the legality, correctness and the
reasoning of the majority Judges (3) contended that
the majority view does not appear to be in
conformity with the law laid down by this Court in
Dharappa vs. Bijapur Coop. Milk Producers
Societies Union Ltd. (2007) 9 SCC 109 whereas
the view taken by the minority Judges (2) appears to
11
be in conformity with the law laid down in the case
of Dharappa(supra) and, therefore, the minority
view, according to learned counsel, deserves to be
upheld by this Court.
25. Placing strong reliance on the ratio laid down
in the case of Dharappa(supra), learned counsel
contended that if the ratio of Dharappa’s case is
applied in its correct perspective to the facts of the
case at hand, the question involved in the appeal
has to be answered in appellant's favour by
upholding the view of the minority Judges which
rightly held that both the Acts, i.e., the KCS Act and
the ID Act, possess and enjoy concurrent
jurisdiction to decide the service disputes arising
between the Co-operative Society’s Employee and
his/her Employer-Cooperative Society.
26. Learned counsel urged that the award of the
Labour Court impugned in the writ petition by the
respondent, therefore, deserves to be upheld and
the case needs to be remanded to the writ court
12
(Single Judge) for deciding the writ petition on
merits.
27. It is this submission, which the learned
counsel elaborated by placing reliance on the
decision of Dharappa(supra), the relevant provisions
of the KCS Act, 1969 and the Karnataka
Co-operative Societies Act, 1959 (hereinafter
referred to as “Karnataka CS Act”).
28. In reply, learned counsel for the
respondent-Society (Employer) contended that the
view taken by the majority of the Judges (3) being in
accordance with law, it does not call for any
interference.
29. Learned counsel elaborated his submission by
referring to the ratio of Dharappa’s case, relevant
provisions of KCS Act and Karnataka CS Act in
support of his submission.
30. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
13
find force in the submission of learned counsel for
the appellant (Employee).
31. In our considered view, we are inclined to
uphold the minority view for the reasons given infra.
32. At the outset, it is considered necessary to set
out the relevant Sections of the KCS Act, which
have bearing over the controversy:
“Section 2(i)
2(i) “dispute” means any matter touching the
business, constitution, establishments or
management of a society capable of being the
subject of litigation and includes a claim in
respect of any sum payable to or by a society,
whether such claim be admitted or not”.
Un-amended Section 69
“69.Disputes to be referred to Registrar-(1)
Notwithstanding anything contained in any
law for the time being in force, if a dispute
arises(a)
among members, past members and persons
claiming through members, past members
and deceased members; or
(b) between a member, past members or person
claiming through a member, a past member
or deceased member and the society, its
committee or any officer, agent or employee
of the society; or
(c) between the society or its committee and any
past committee, any officer, agent or
employee or any past officer, past agent or
past employee or the nominee, heirs or legal
14
representatives of any deceased officer,
deceased agent or deceased employee of the
society; or
(d) between the society and any other society; or
(e) between a society and the members of a
society affiliated to it; or
(f) between the society and a person other than
a member of the society, who has been
granted a loan by the society or with whom
the society has or had business transactions
or any person claiming through such a
person; or
(g) between the society and a surety of a
member, past member, deceased member or
employee or a person other than a member,
who has been granted a loan by the society
whether such a society is or is not a member
of the society; or
(h) between the society and a creditor of the
society, such dispute, shall be referred to the
Registrar for decision, and no court shall
have jurisdiction to entertain any suit or
other proceeding in respect of such dispute.
Explanation:- In this section and in Section
70, the term “Registrar” means the Registrar
of Co-operative Societies appointed under
sub-section (1) of Section 3 and includes any
person on whom the powers of the Registrar
under this Section and Section 70 are
conferred.
(2) For the purposes of sub-section (1), the
following shall also be deemed to be disputes,
namely:-
(a) a claim by the society for any debt or
demand due to it from a member or the
nominee, heirs or legal representatives of a
deceased member whether such debt or
demand be admitted or not;
15
(b) a claim by a surety against the
principal debtor where the society has
recovered from the surety any amount in
respect of any debt or demand due to it from
the principal debtor as a result of the default
of the principal debtor, whether such debt or
demand is admitted or not;
(c) any dispute arising in connection with
the election of the Board of Management or
any officer of the society;
Explanation:- A dispute arising at any stage
of an election commencing from the
convening of the general body meeting for
the election shall be deemed to be a dispute
arising in connection with the election.
(3) No dispute arising in connection with
the election of the Board of Management or
an officer of the society shall be entertained
by the Registrar unless it is referred to him
within one month from the date of the
election.
(4) If any, question arises whether a
dispute referred to the Registrar under the
section is a dispute as defined in clause (i) of
Section 2 the decision thereon of the
Registrar shall be final.”
Amended Section 69 by Amending Act
1/2000 w.e.f. 02.01.2003
“69. Disputes to be decided by Co-operative
Arbitration Court and Registrar(1)
Notwithstanding anything contained in any
law for the time being in force, if a dispute
arises(a)
Among members, past members and persons
claiming through members, past members
and deceased members; or
(b) Between a member, past member or person
claiming through a member, a past member
or deceased member and the society, its
16
committee or any officer, agent or employee
of the society; or
(c) Between the society or its committee and
any past committee, any officer, agent or
employee or any past officer, past agent or
past employee or the nominee, heirs or legal
representatives of any deceased officer,
deceased agent or deceased employee of the
society; or
(d) Between the society and any other society; or
(e) Between a society and the members of a
society affiliated to it; or
(f) Between the society and a person, other than
a member of the society, who has been
granted a loan by the society or with whom
the society has or had business transactions
or any person claiming through such a
person; or
(g) Between the society and a surety of a
member, past member, deceased member or
employee or a person, other than a member,
who has been granted a loan by the society,
whether such a surety is or is not a member
of the society; or
(h) Between the society and a creditor of the
society, such dispute shall be referred to the
Co-operative Arbitration Court constituted
under Section 70A in the case of
non-monetary disputes and to the Registrar,
in the case of monetary disputes and the
Arbitration Court, or the Registrar, as the
case may be, shall decide such dispute; and
no other Court or other authority shall have
jurisdiction to entertain any suit or other
proceedings in respect of such dispute.
(2) For the purposes of sub-section (1), the
following shall also be deemed to be disputes,
namely:-
(a) a claim by the society for any debt or demand
due to it from a member or the nominee,
heirs or legal representatives of a deceased
17
member, whether such debt or demand be
admitted or not;
(b) a claim by a surety against the principal
debtor, where the society has recovered from
the surety any amount in respect of any debt
or demand due to it from the principal
debtor, as a result of the default of the
principal debtor, whether such debt or
demand is admitted or not;
(c) any dispute arising in connection with the
election of the Board of Management or any
officer of the society;
Explanation- A dispute arising at any stage
of an election commencing from the
convening of the general body meeting for
the election, shall be deemed to be a dispute
arising in connection with the election;
(d) Any dispute arising in connection with
employment of officers and servants of the
different classes of societies specified in
sub-section(1) of S.80, including their
promotion and inter se seniority.
(3) No dispute arising in connection with the
election of the Board of Management or an
officer of the society shall be entertained by
the Co-operative Arbitration Court unless it
is referred to it within one month from the
date of the election.”
Unamended Section 70
70. Decision and award on disputes:-
(1) The Registrar may, on receipt of the
reference of a dispute under Section 69:-
(a) elect to decide the dispute himself; or
(b) transfer it for disposal to any person
who has been invested by the Government
with powers in that behalf; or
(c) refer it for disposal to an arbitrator
appointed by the Registrar.
18
Provided that a transfer under clause (b)
or a reference under clause (c) shall not be
made to a person equal or superior to him in
rank.
(2) The Registrar may withdraw any reference
transferred under clause (b) of sub-section (1)
or referred under clause (c) of that
sub-section and he may elect to decide the
dispute himself or transfer it to any other
person under clause (b) of sub-section (1) or
refer it to any other arbitrator under clause
(c) of that sub-section.
(3) The Registrar or such person shall decide the
dispute, or the arbitrator shall pass an award,
in accordance with the provisions of this Act
and the rules and the bye-laws and such
decision or award shall, subject to the
provisions of S.82, be final. Pending decision
or award, the Registrar, such person or
arbitrator as the case may be, may make such
interlocutory orders as he may deem
necessary in the interest of justice.
(a) the nature of the allegations showing that the
elections were vitiated.
(b) the existence of prima facie case which
means whether respondents have a chance of
success and
(c) whether the interest of justice require that
an interlocutory order must be made.
Amended Section 70 by Amending Act
1/2000
70. Award on disputes:- (1) the Co-operative
Arbitration Court, on receipt of reference of a
dispute under sub-section (1) of Sec. 69, shall
pass an award within one year in accordance
with the provisions of this Act and the rules
and the bye-laws made thereunder and such
award shall, subject to the provisions of Sec.
82, be final.
19
(2) The Co-operative Arbitration Court
may, pending award of a dispute referred to it
under Section 69, make such interlocutory
orders as it may deem necessary in the
interests of justice.
(3) The Co-operative Arbitration Court
shall have the same powers as are vested in a
civil court under the Code of Civil Procedure,
1908 (Central Act 5 of 1908), while trying a
suit in respect of the following matters,
namely:-
(i) the summoning and enforcing the
attendance of any defendant or witness and
examining the witness on oath;
(ii) the discovery and production of any
document or other material object producible
as evidence;
(iii) the reception of evidence on
affidavits;
(iv) issuing of any commission for the
examination of any witness; and
(v) any other matter which may be
prescribed.
(4) The Registrar may, on receipt of the
reference of a dispute under sub-section(1) of
Sec. 69-
(a) elect to decide the dispute himself;
or
(b) transfer it for disposal to any person
who has been invested by the Government
with powers in that behalf; or
(c) refer it for disposal to an arbitrator
appointed by the Registrar:
Provided that a transfer under clause (b)
or a reference under clause (c) shall not be
made to a person equal or superior to him in
rank.
(5) The Registrar may withdraw any
reference transferred under clause (b) of
sub-section (4) or referred under clause (c) of
that sub-section and he may elect to decide
the dispute himself or transfer it to any other
20
person under clause (b) of sub-section (4) or
refer it to any other arbitrator under clause
(c) of that sub-section.
(6) The Registrar or the person
invested with powers in this behalf shall,
decide the dispute or the arbitrator shall pass
an award in accordance with the provisions of
this Act and the rules and the bye-laws and
such decision or award shall, subject to the
provisions of Sec. 82, be final. Pending
decision or award, the Registrar, such person
or the Arbitrator, as the case may be, may
make such interlocutory orders as he may
deem necessary in the interests of justice.
100. Bar of jurisdiction of courts:- No civil or
revenue court shall have any jurisdiction in
respect of any matter for which provision is
made in this Act.”
(Emphasis supplied)
33. Before we examine the question, it is apposite
to take note of the findings of the majority as well as
minority Judges on the question.
34. We find that both majority and minority
Judges examined the questions largely in the light
of the ratio laid down by this Court in Dharappa’s
case (supra). Indeed, the learned counsel, in their
submissions before us, did not make any attempt to
contend that the law laid down in the case of
Dharappa (supra) needs reconsideration on any
issue. On the other hand, both sides proceeded to
21
make their submissions that, firstly, Dharappa’s
case has laid down the correct principle of law on
facts involved therein and secondly, what needs to
be examined is whether its ratio applies to the facts
of this case and, if so, how and to what extent.
35. In our opinion also, it may not be necessary to
examine the issue involved in this case in the light
of any other decision except confining its
examination to the ratio laid down in Dharappa’s
case because Dharappa’s case has discussed all
earlier decisions of this Court on the subject in
extenso.
36. So far as the view of majority (3) Judges, one
concurring with two, is concerned, though they
discussed several issues in detail in their
concurring opinion but in substance, in our view,
their findings on material issues are as under:
37. First, the language of Section 69 of the KCS
Act as it originally stood is materially different from
the language used in its counter part Sections of
22
two earlier repealed Kerala Co-operative Societies
Acts of 1932 and 1951. This departure made in the
language employed in Section 69 of the KCS Act qua
language of earlier two repealed Acts is significant
and has a material bearing while answering the
questions. (Para 17/18)
38. Second, since the KCS Act, 1969 has received
the Assent of the President on 11.04.1969, it was
not necessary for the State to have obtained another
Assent of the President for enacting Amending Act
(1/2000) by which some provisions of the KCS Act,
1969 were amended w.e.f. 02.01.2003.
39. In other words, once the KCS Act of 1969 has
received the Assent of the President, it is not
necessary for the State to obtain another Assent of
the President for passing the Amendment Act
1/2000. It is more so when it has received the
Assent of the Governor (Para 45).
40. Third, on interpreting the relevant provisions
of the KCS Act, whether independently or/and in
23
juxtaposition, it is clear that the KCS Act, 1969 as
originally stood and as amended by Act (1/2000)
overrides any other law for the time being in force
including the ID Act, 1947 insofar as it deals with
the service disputes arising between the
Co-operative Society’s Employee and his/her
Employer.
41. In other words, the KCS Act, 1969 has an
overriding effect on the ID Act 1947 since its
inception insofar as it deals with the service
disputes arising between a Co-operative Society’s
Employee and his/her Employer and thus excludes
the applicability of the ID Act.
42. Any service dispute arising between a
Co-operative Society’s Employee and his/her
Employer (Co-operative Society) is, therefore, triable
only by the authorities and the forum specified
under the KCS Act 1969, whether prior to or after
the amendments made by the Amendment Act No.1
24
of 2000 and not by any authority/Court/Tribunal
under any law for the time being in force.
43. A fortiori, the jurisdiction of the Labour Court
and Industrial Tribunal under the ID Act is,
excluded and barred to decide any such service
dispute.
44. Fourth, the language of Section 69 of the KCS
Act, 1969 as it originally stood including the
amended one and that of Section 70 of the
Karnataka CS Act which fell for interpretation in
Dharappa's case is not in pari meteria with each
other and not being identical, the ratio of
Dharappa’s case may not apply to that extent while
interpreting Section 69 of the KCS Act.
45. Fifth, the Amendment Act (1 of 2000), which
amended Section 69(2)(d) of the KCS Act, is only by
way of an abundant caution and it has no effect on
Section 69 of the KCS Act.
46. So far as the view of minority Judges (2) is
concerned, in substance, it held:
25
47. First, the question involved in the case is
squarely covered by the ratio laid down in
Dharappa’s case.
48. Second, Section 69 of the KCS Act and Section
70 as it originally stood and as amended by first
Amendment Act (19 of 1976) of the Karnataka CS
Act, are identically worded and, therefore, the ratio
of Dharappa’s case would apply while interpreting
Section 69 of the KCS Act.
49. Third, the Assent of the President was required
for passing the Amendment Act No.1 of 2000 of the
KCS Act.
50. Fourth, since no Assent of the President was
obtained, the Amendment Act (1 of 2000) did not
make any effect on the exclusion of the jurisdiction
of the forum under the ID Act. That apart, Section
69 or Section 100 of the KCS Act also does not have
a clause akin to Section 70 of the Karnataka CS Act
as amended by Amendment Act (2 of 2000)
providing therein a clause for express exclusion of
26
the jurisdiction of the Civil Court, the Labour Court
and the Industrial Tribunal from deciding the
service dispute.
51. Fifth, the jurisdiction of Section 69 under the
KCS Act before and after the amendment of the KCS
Act by Amendment Act (1 of 2000) remains intact.
52. Sixth, the jurisdiction of both the Acts, i.e., the
KCS Act and the ID Act is concurrent.
53. A fortiori, any service dispute arising between a
Co-operative Society’s Employee and his/her
Employer (Co-operative Society) is triable under
both the Acts and it is for the aggrieved person to
select one forum of his/her choice out of the two to
get his/her dispute settled subject to proving that
he/she is a workman, the dispute is an industrial
dispute and the Cooperative Society is an industry
as defined in the ID Act.
54. Seventh, notwithstanding the amendment
brought about in Section 69 of the KCS Act by
Amendment Act (1 of 2000), the jurisdiction of the
27
Labour Court under the ID Act is not excluded and
thus not barred.
55. And lastly, in the light of these findings, all
decided cases taking this view are held correctly
decided and, therefore, do not need any
reconsideration.
56. In our opinion, the fate of this appeal depends
upon the question as to what extent the ratio of
Dharappa’s case applies to the issues involved in
the case at hand.
57. It is, therefore, necessary to first examine the
facts and the ratio of Dharappa's case.
58. Dharappa was a daily wager working in the
Karnataka Milk Federation Unit Bijapur (hereinafter
referred to as “the Federation”), which is a
Co-operative Society registered under the Karnataka
CS Act. The Federation on 01.03.1980 terminated
Dharappa's services.
59. Dharappa felt aggrieved of his termination,
filed an application to the Labour Court, Hubli
28
under the ID Act. The application was later
transferred to the Labour Court, Bijapur. According
to Dharappa, his termination order was bad and
illegal inasmuch as the Federation failed to ensure
compliance of mandatory requirements of Section
25-F of the ID Act prior to passing his termination
order. According to Dharappa, he had continuously
worked for more than 240 days in one calendar
year, hence he was entitled to enjoy the protection
available to a workman under the ID Act before
terminating his services.
60. The respondent-Federation denied Dharappa's
claim. Parties adduced their evidence. The Labour
Court, by award dated 15.10.1996, allowed
Dharappa's application and set aside the
termination order. The Labour Court held that the
termination order was bad because Dharappa had
worked for more than 240 days continuously in one
calendar year and yet the Federation prior to his
termination did not pay him any retrenchment
29
compensation as provided in the ID Act. The Labour
Court, however, awarded 50% back wages to
Dharappa because it was noticed that he
approached the Labour Court almost after 10 years
from the date of his termination.
61. The Federation, felt aggrieved of the award of
the Labour Court, filed a writ petition in the
Karnataka High Court questioning therein the
legality and correctness of the award. During the
pendency of the writ petition, the Division Bench of
the same High Court in another case (Veerashaiva
Co-op. Bank Ltd. vs. Presiding Officer, Labour
Court, (2001) 3 Kar.LJ 519) held that since the
remedy and the procedure prescribed under the
Karnataka CS Act was comprehensive, the service
disputes arising between a Co-operative Society’s
Employee and his Employer (Co-operative Society)
has to be tried under the Karnataka CS Act and the
jurisdiction of the Labour Court under the ID Act to
decide such disputes is barred.
30
62. The Full Bench of the same High Court in
another case in Karnataka Sugar Workers
Federation vs. State of Karnataka, (AIR 2003 Kar
HCR 1802) later approved this view of the Division
Bench.
63. Relying upon the aforesaid view of the Division
Bench and the Full Bench, the learned Single Judge
allowed the Federation's writ petition and quashed
the award of the Labour Court. It was held that the
provisions of the ID Act are not applicable to a
service dispute raised by an Employee of a
Co-operative Society against his Employer. A liberty
was granted to Dharappa to take recourse to the
appropriate remedy under the Karnataka CS Act to
challenge his termination order.
64. Dharappa felt aggrieved and filed a writ appeal
before the Division Bench. The Appellate Court
placing reliance on the view of the Full Bench in
Karnataka Sugar Workers Federation’s case
(supra) dismissed the appeal. It was inter alia held
31
that the appropriate remedy of Dharappa lies in
invoking Section 70 of the Karnataka CS Act by
filing a dispute before the specified authority for its
adjudication. It is against this decision, Dharappa
felt aggrieved and filed appeal by special leave in
this Court.
65. Before this Court, Dharappa raised two
points, out of which we are concerned only with one
point, viz., whether jurisdiction of the Labour Court
under the ID Act for deciding the service dispute
arising between a Co-operative Society’s Employee
and his Employer is barred by virtue of Section 70
of the Karnataka CS Act and, if so, from which date.
66. It is this question, which was examined by this
Court extensively in the light of the relevant
provisions including Section 70 of the Karnataka CS
Act as it stood originally and later amended twice
coupled with a question as to what is the effect of
the grant of the Assent of the President given to the
second amendment of Section 70 made in the
32
Karnataka CS Act by Amendment Act (2/2000) and
the previous case law on the subject.
67. It was noticed that the Karnataka CS Act was
enacted by the State of Karnataka after obtaining
the Assent of the President on 11.08.1959. Section
70 of the Act as it originally stood deals with the
disputes arising between the parties named therein
and provides a forum for the adjudication of such
disputes, which also includes service disputes.
68. Section 70 was first amended by the State of
Karnataka by the Amendment Act (19/1976). It
received the Assent of the Governor on 07.03.1976.
The Amending Act came into force on 21.01.1976.
By this Amending Act, two clauses, namely, clauses
(d) and (e) were added to Section 70.
69. Section 70 was then amended second time by
the State in 1997 by Amendment Act (2 of 2000).
This Amending Act, however, received the Assent of
the President on 18.03.2000 and was thereafter
brought in force with effect from 20.06.2000. This
33
Amending Act specifically provided therein for the
first time "no Civil or Labour or Revenue Court or
Industrial Tribunal shall have jurisdiction to entertain
any suit or other proceedings in respect of any
dispute specified in Section 70".
70. The learned Judge Raveendran, J. speaking for
the two Judge Bench succinctly dealt with the issue
in question in Paras 13, 14, 16 and 17 and held as
under:
“13. The effect of the amendments to
Section 70 of the KCS Act, by Act 2 of
2000 is that if any dispute (including any
dispute relating to the terms of
employment, working conditions and
disciplinary action), arose between a
cooperative society and its employees or
past employees or heirs/legal
representatives of a deceased employee,
on and from 20-6-2000, such dispute had
to be referred to the Registrar for decision
and no civil court or Labour Court or
Industrial Tribunal would have jurisdiction
to entertain any suit or proceeding in
respect of such dispute.
14. Even prior to 20-6-2000, having regard
to the amendment to Section 70 of the
KCS Act by Act 19 of 1976 with effect
from 20-1-1976, any dispute between a
cooperative society and its employees or
past employees or heirs/legal
representatives of a deceased employee
including a dispute regarding the terms of
employment, working conditions and
34
disciplinary action taken by a cooperative
society, was deemed to be a dispute
touching the constitution, management,
or business of a cooperative society which
had to be referred to the Registrar for
adjudication. But prior to 20-6-2000, there
was no express exclusion of the
jurisdiction of the Labour Court and
Industrial Tribunal. As a result, if an
employee of a cooperative society
answered the definition of “workman” and
the dispute between the cooperative
society and its employee fell within the
definition of an “industrial dispute”, then
the employee had the choice of two
alternative forums — either to raise a
dispute before the Registrar under Section
70 of the KCS Act or seek a reference to
the Labour Court/Industrial Tribunal
under Section 10(1)(c) of the ID Act [or
approach the Labour Court by an
application under Section 10(4-A) of the ID
Act].
16. Though the Karnataka Cooperative
Societies Act, 1959 was reserved for the
assent of the President and received his
assent on 11-8-1959, the Amendment Act
19 of 1976 which added Clause (d) to
sub-section (2) of Section 70 (whereby a
dispute between a cooperative society and
its present or past employee(s) in regard to
any disciplinary action or working
conditions was deemed to be a dispute
touching the constitution, management,
or the business of a cooperative society),
was neither reserved for, nor received the
assent of the President. In the absence of
the assent of the President, Clause (d) of
Section 70(2) could not be called in aid to
contend that Section 70(1)(c) of the KCS
Act would prevail over the provisions of
the Industrial Disputes Act. Consequently,
even after the 1976 Amendment to the
KCS Act, the Labour Courts and Industrial
Tribunals functioning under the ID Act
35
continued to have jurisdiction in regard to
disputes between a society and its
workmen if the cooperative society
answered the definition of an “industry”
and the dispute was an “industrial
dispute”. But when sub-section (1) of
Section 70 of the KCS Act was further
amended by Act 2 of 2000 by specifically
excluding the jurisdiction of Labour Courts
and Industrial Tribunals with the
simultaneous addition of the words
“notwithstanding anything contrary
contained in the Industrial Disputes Act,
1947” in Clause (d) of Section 70(2) of the
KCS Act, the said Amendment Act (Act 2
of 2000) was reserved for the assent of the
President and received such assent on
18-3-2000. The amended provisions were
given effect from 20-6-2000. Therefore,
only with effect from 20-6-2000, was the
jurisdiction of Labour Courts and
Industrial Tribunals excluded in regard to
disputes between a cooperative society
and its employees (or past employees)
relating to terms of employment, service
conditions or disciplinary action. It follows
therefore that in the year 1996, the
Labour Court had the jurisdiction to make
an award in regard to such a dispute. The
High Court could not have interfered with
it on the ground that Section 70 of the
KCS Act was a bar to the jurisdiction of
the Labour Court to decide the dispute.
17. The 1976 Amendment to the KCS Act
did not bring about any inconsistency with
the provisions of the ID Act nor did it
purport to prevail over the provisions of
the ID Act. Its effect was merely to provide
an additional or alternative forum for
adjudication of the disputes between
cooperative societies and its employees,
relating to employment, working
conditions and disciplinary action. The
1976 Amendment Act, therefore, was
valid, even in the absence of the assent of
36
the President. On the other hand, the
2000 Amendment specifically excluded the
jurisdiction of Industrial Tribunals and
Labour Courts under the ID Act, and
intended to prevail over the provisions of
the ID Act in regard to adjudication of
disputes. The said Amendment required
the assent of the President and was, in
fact, reserved for the assent of the
President and obtained his assent. If the
1976 Amendment was to be read as
excluding the jurisdiction of the Industrial
Tribunals and Labour Courts, then it was
necessary to read the provisions of Section
70, as amended by the 1976 Act, as
prevailing over the provisions of the ID
Act. In which event, it would have required
the President’s assent, and in the absence
of such assent, the amendment to the
extent it purported to prevail over the
Central enactment, would have been void.
Therefore, the only way to read the 1976
Amendment is to read it in a literal and
normal manner, that is, as not excluding
the jurisdiction of the Industrial Tribunals
and Labour Courts but as merely
conferring a concurrent jurisdiction on the
Registrar under Section 70 of the KCS
Act.”
71. The learned Judge then in concluding Paras 24
and 25 held as under :
“24. The resultant position can be
summarised thus:
(a) Even though Clause (d) was added in
Section 70(2) with effect from 20-1-1976,
Section 70(1) did not exclude or take away
the jurisdiction of the Labour Courts and
Industrial Tribunals under the ID Act to
decide an industrial dispute between the
society and its employees. Consequently,
even after insertion of Clause (d) in
Section 70(2) with effect from 20-1-1976,
37
the Labour Courts and Industrial Tribunals
under the ID Act, continued to have
jurisdiction to decide disputes between
societies and their employees.
(b) The jurisdiction of Labour Courts and
Industrial Tribunals to decide the disputes
between cooperative societies and their
employees was taken away only when
sub-section (1) and sub-section (2)(d) of
Section 70 were amended by Act 2 of 2000
and the amendment received the assent of
the President on 18-3-2000 and was
brought into effect on 20-6-2000.
(c) The jurisdiction to decide any dispute
of the nature mentioned in Section 70(2)
(d) of the KCS Act, if it answered the
definition of industrial dispute, vested
thus:
(i) exclusively with Labour Courts and
Industrial Tribunals till 20-1-1976;
(ii) concurrently with Labour
Courts/Industrial Tribunals under the ID
Act and with Registrar under Section 70 of
the KCS Act between 20-1-1976 and
20-6-2000; and
(iii) exclusively with the Registrar under
Section 70 of the KCS Act with effect from
20-6-2000.
25. We therefore hold that the award of
the Labour Court was not without
jurisdiction. We, however, make it clear
that this decision shall not be applied to
reopen matters decided relying on
Veerashaiva Coop. Bank1 and Karnataka
Sugar Workers Federation2 which have
attained finality.”
38
72. In our considered opinion, the ratio of
Dharappa’s case is that firstly, Section 70 of the
Karnataka CS Act as it originally stood and
amended by first Amendment Act 19 of 1976 adding
therein two clauses (d) and (e) to Section 70,
whether one reads it independently or/and in
juxtaposition with other Sections would find that it
did not provide for express ouster or exclusion of
the jurisdiction of the Labour Court/Industrial
Tribunal under the ID Act.
73. In other words, it did 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).
74. Second, any Co-operative Society’s Employee
satisfying the definition of the expression
"Workman", “Industrial Dispute" and the
Co-operative Society to be an “Industry” as defined
under the ID Act has the choice to select one forum
39
out of the two forums for filing a case in relation to
his service dispute, i.e., either to file a case under
the Karnataka CS Act or to seek an industrial
reference under Section 10 of the ID Act or to file an
application under Section 10(4-A) of the ID Act.(Para
14).
75. Third, both the Acts, namely, Karnataka CS
Act and the ID Act possessed and enjoyed
concurrent jurisdiction over such service disputes
till 20.06.2000.
76. Fourth, consequent upon the second
amendment made by the State of Karnataka in
Section 70 by Amendment Act 2/2000, which
received the Assent of the President on 18.03.2000
and was brought into force on 20.06.2000, the State
legislature, for the first time, provided an express
provision for exclusion of the jurisdiction of the Civil
Court or Labour Court or Industrial Tribunal to
decide any service dispute arising between a
40
Co-operative Society’s Employee and his/her
Employer (Co-operative Society).
77. The effect of introducing such amended
provision was that the provisions of the ID Act were
held no longer applicable for deciding such service
disputes. In other words, jurisdiction of the ID Act
then stood excluded from deciding such service
disputes from 20.06.2000 onwards. A fortiori, only
the authorities specified under the Karnataka CS
Act were held competent and possessed jurisdiction
to try such disputes from 20.06.2000 onwards.
78. Fifth, by way of rule of caution, the question of
such nature should be decided by the Courts
primarily keeping in view the language employed in
the concerned State Act.
79. Sixth, Article 254 of the Constitution is
attracted when there is a repugnancy between any
provision(s) of the State Act such as Karnataka CS
Act and the provision(s) of any existing law enacted
41
by the Parliament on the subject falling in
concurrent list such as the ID Act.
80. The inconsistency should be so irreconcilable
that it must come in direct head on collusion with
any provision of the Central Act in the field thereby
creating a situation that obeying one Act would
result in disobeying the other.
81. Seventh, if such a situation arises in any case,
the State law (Karnataka CS Act) which is reserved
for President's Assent and on receiving the
President's Assent, will prevail over the Central law
(ID Act) in that State by virtue of Article 254 (2) of
the Constitution.
82. Now coming to the facts of the case at hand,
when we examine the question in the light of the
ratio of Dharappa’s case, culled out above, on
comparison, we find substantial similarity between
the language of Section 69 of the KCS Act as it
originally stood and later amended by the
Amendment Act 1 of 2000 with that of the language
42
employed in Section 70 of the Karnataka CS Act as
it originally stood along with amended one by first
Amendment Act 19/ 1976.
83. In other words, we notice that the phraseology
and language of both unamended and amended
Section 69 of KCS Act and Section 70 of the
Karnataka CS Act as amended by first amendment
by Act 1/2000 are in pari materia with each other.
84. First, the KCS Act and the Karnataka CS Act
have received the Assent of the President at the time
of their respective enactment.
85. Second, the KCS Act-Amendment Act 1/2000
received the Assent of the Governor so also
Amendment Act 19/76 of Karnataka CS Act
received the Assent of the Governor.
86. Third, Section 69 and Section 70 start with a
non-obstante clause, viz., "Notwithstanding anything
contained in any law for the time being in force, if a
dispute arises ……………."
43
87. Fourth, Section 69 and Section 70 end with
the words "such dispute shall be referred to the
Registrar and no court shall have jurisdiction to
entertain any suit or other proceeding in respect of
such dispute".
88. Fifth, (the KCS Act and the Karnataka CS Act)
had no provision expressly providing for ouster of
the jurisdiction of Civil Court, Labour Court and the
Industrial Tribunal from deciding service disputes
alike the one introduced by Karnataka State for the
first time in Section 70 by the Amendment Act of 2
of 2000 with effect from 20.06.2000 with the Assent
of the President.
89. This, in our view, indicates that till
20.06.2000, there was similarity between the KCS
Act and Karnataka CS Act. However, after Section
70 was amended by Act No.2/2000 w.e.f.
20.06.2000 providing therein a specific clause
expressly excluding the jurisdiction of the Civil,
Labour and Revenue Court and Industrial Tribunal
44
to decide the service disputes, the scheme of the two
Acts no longer remained similar.
90. Similarly, we find that the identical wording
occurring in the beginning and the end of Section
69 and Section 70 was interpreted in Dharappa’s
case wherein it was held that such provisions
cannot be construed as providing an express
exclusion of the jurisdiction of other Courts
including that of the Labour Court and the
Industrial Tribunal under the ID Act. On the other
hand, it was held that the Karnataka CS Act
possesses concurrent jurisdiction for deciding the
services disputes upto 20.06.2000. (see para 14/16
of Dharappa)
91. This interpretation of Dharappa’s case, in our
view, would squarely apply to the provisions of the
KCS Act if Section 69 is also suitably amended by
the State of Kerala by making Section 69 at par with
amended Section 70 of Karnataka CS Act. As on
date, it is not so.
45
92. Though the KCS Act was amended by
Amendment Act 1 of 2000 (w.e.f. 02.01.2003) but it
did not bring about any kind of inconsistency or
repugnancy in the KCS Act qua any provision of the
ID Act, 1947. Had the KCS Act including the
amending one by Act 1/2000 brought about any
kind of inconsistency or repugnancy between the
provisions of the KCS Act and the ID Act such as
the one brought about by the second Amendment
Act (2/2000) in Section 70 of Karnataka CS Act
w.e.f. 20.06.2000 qua the ID Act and had such
amended provisions of the KCS Act received the
Assent of the President, the provisions of the KCS
Act too would have prevailed over the ID Act in the
State by virtue of Article 254 (2) of the Constitution.
93. Such is not the case here because though the
KCS Act received the Assent of the President at the
time of its enactment so also the Karnataka CS Act
received, this Court while interpreting Section 70 as
amended by Act No.19/1976 of the Karnataka CS
46
Act with the Assent of the Governor, has held in
Dharappa’s case that Section 70 did not create any
inconsistency or/and repugnancy with any
provisions of the ID Act and possessed concurrent
jurisdiction over such service dispute. This ratio of
Dharappa’s case would apply to Section 69 of the
KCS Act because we have held that Section 69 is in
pari materia with Section 70 of the Karnataka CS
Act.
94. That apart, the amending KCS Act (1 of 2000)
having received the Assent of the Governor did not
bring about any inconsistency or repugnancy with
the provisions of the ID Act. In any event, in the
absence of the Assent of the President to the
amending KCS Act 1/2000, even if any
inconsistency or repugnancy exists between the
provisions of the KCS Act and the ID Act, it is the ID
Act which will prevail over the KCS Act by virtue of
Article 254 (1) of the Constitution but not
vice-a-versa.
47
95. The law in relation to Article 254 of the
Constitution and how it is applied in a particular
case is fairly well settled by the series of decisions of
this Court. This Article is attracted in cases where
the law is enacted by the Parliament and the State
Legislature on the same subject, which falls in List
III - Concurrent list.
96. In such a situation arising in any case, if any
inconsistency or/and repugnancy is noticed
between the provisions of the Central and the State
Act, which has resulted in their direct head on
collusion with each other which made it impossible
to reconcile both the provisions to remain in
operation inasmuch as if one provision is obeyed,
the other would be disobeyed, the State Act, if it has
received the Assent of the President will prevail over
the Central Act in the concerned State by virtue of
Article 254 (2) of the Constitution.
97. A fortiori, in such a situation, if the State Act
has received the Assent of the Governor then the
48
Central Act would prevail over the State Act by
virtue of Article 254 (1) of the Constitution.
98. It is this principle, which was applied by this
Court in the case of Dharappa while comparing the
provisions of the Karnataka CS Act including its two
amendments with that of the provisions of the ID
Act.
99. This takes us to examine another question.
The majority Judges, as we find, proceeded to
examine the questions by attempting to compare
the language employed in the relevant Sections of
the two repealed KCS Acts of 1932 and 1951 with
that of the language of Section 69 of the KCS Act
1969 and noticing some departure in the language
employed in Section 69, came to a conclusion that
the language of Section 69 is comprehensive enough
to exclude the jurisdiction of the Labour Court
under the ID Act. The majority Judges also took
note of some more Sections of the KCS Act and
noticing some dis-similarity in the scheme of the
49
KCS Act and Karnataka CS Act held that Section 69
of the KCS Act overrides the provisions of the ID Act
since inception. We find ourselves unable to agree
with the approach of the majority.
100. In our view, when this Court in Dharappa’s
case has interpreted the language of Section 70 of
the Karnataka CS Act, the questions involved herein
should have been examined by comparing the
language employed in Section 69 of the KCS Act
with the language employed in Section 70 of the
Karnataka CS Act rather than to compare with the
repealed provisions.
101. In other words, once on comparing the
language of Section 69 and that of Section 70 as
amended by the first amendment, a conclusion is
reached that both Sections are akin to each other
till 20.06.2000, a fortiori, the law laid down in
Dharappa’s case insofar as it interprets Section 70
as it originally stood and amended by Amendment
Act 19/1976 would apply to Section 69 of the KCS
50
Act. On the other hand, the ratio will not apply after
20.06.2000 because from that date, there was a
change in the language of Section 70 which
provided a clause to exclude the Jurisdiction of
other Courts in express terms by Amendment Act of
2/2000.
102. In the light of foregoing discussion, we are of
the considered opinion that the view of majority
Judges cannot be upheld whereas the view of the
minority Judges deserves to be upheld and is
accordingly upheld.
103. We accordingly hold that the KCS Act and the
ID Act both possess and enjoy the concurrent
jurisdiction to decide any service dispute arising
between the Co-operative Society’s Employee and
his/her Employer (Co-operative Society).
104. We also hold that it is the choice of the
Employee concerned to choose any one forum out of
the two forums available to him/her under the two
Acts (the KCS Act and the I.D. Act) to get his/her
51
service dispute decided. It is, however, subject to
satisfying the test laid down under the ID Act that
the employee concerned is a “workman”, the dispute
raised by him/her is an “industrial dispute” and the
Co-operative Society (Employer) is an “Industry” as
defined under the ID Act.
105. In the light of the aforesaid finding, all those
cases, which have taken contrary view, stand
overruled.
106. As a result of our conclusion, in our view, the
Labour Court in this case was competent to decide
the service dispute raised by the Employee
(appellant herein) under the ID Act. The case is
accordingly remanded to the writ Court to decide
the respondent’s writ petition for examining the
legality and correctness of the award of the Labour
Court on merits in accordance with law.
107. In view of foregoing discussion, the appeal
succeeds and is, accordingly, allowed. The
impugned judgment is set aside.
52
………...................................J.
[R.K. AGRAWAL]
...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
January 12, 2018