MAJOOR SAHAKARI BANK LTD Vs. N N MAJMUDAR

JUDGEMENT

(1.) AN interesting and important question under the Co-Operative Societies Act arises on this petition, which has been fully argued both by counsel for the petitioners and counsel for the second respondent. The petitioners are a Co-operative Society cluing banking business and are registered under the Co-Operative Societies Act. The second respondent was an employee of petitioners and he came to be dismissed, under circumstances which are not relevant, by the petitioners on 11th November 1953, The second respondent applied to the first Respondent, who is the Judge of the Labour Court at Ahmedabad for re-in-statement of the petitioners and compensation. The Petitioners contended that the first respondent had no jurisdiction to entertain that petition. The learned Judge held against the petitioners. The petitioners went in appeal to the Industrial Court. The Industrial Court held that no appeal lay from that decision and the petitioners have now come before us under Article 227.

(2.) THE question that we have to consider is whether the activity carried on by the petitioners is an activity, which is an industry, to which the Bombay Industrial Relations Act, (Act XI of 1947) applies. Section 2 (3) of that Act provides that in the areas in which the Bombay Industrial Disputes Act 1938, was in force immediately before the commencement of Act XI of 1947, the latter Act shall apply to the industries to which the said Act of 1938 applied. In section 2 (3) of the earlier Act of 1938 there was a provision that the Slate Government may, by notification direct that all or any of the provisions of that Act shall apply to all or any other industries, whether generally or in any local area, as may be specified in the notification. Pursuant to the power conferred in that sub-section a notification was issued by the State Government on 26th February 1947, bearing No. 396/ 46/1 and the notification was in the following terms:

(3.) NOW, we are in agreement with Mr. Parpia that this is not a banking company which is incorporated by Indian Law. Mr. Rane did suggest that although it was not incorporated under the Indian Companies Act it was incorporated under the Co-operative Societies Act. But what in our opinion the notification contemplates is not in corporation under an Indian Law but by an Indian law; which means that a special law should incorporate the particular company or association. For instance we have a Reserve Bank of India; we had an Imperial Bank of India; we have now the State Bank. The Act itself incorporates that bank, association or society. And the language used is clear, It is not ''incorporated under an Indian Law"; it is "incorporated. by an, Indian law". But what appears to us to be fairly clear is the first part of the notification and when we look at that it applies to the business of banking companies registered under any of the enactments relating to companies for the time being in force. Now the object obviously was to apply this notification not to associations of less than ten persons who were doing business of banking and who could not be incorporated but to confine the operation of this notification to ten persons or more who could be and would have to be registered, either under the Indian Companies Act or some other Act relating to companies. Now let us see whether the petitioners satisfy this definition. The petitioners admittedly do the business of banking. But Mr. Parpia says that the petitioners are not a company but a society as defined in the Co-Operative Societies Act. Now, ''company" is defined in Halsbury's Laws of England, Volume 6, 3rd edition, at page 11, as an association of a number of individuals formed with some common purpose. Therefore, any society, any association, any group which conies together having a common purpose is, in the eye of law, a company. But every company is not a juristic persona, it has no legal entity and it is incorporation which gives it a persona and legal entity; and the result of incorporation is, as pointed out by Halsbury, that it becomes a body corporate with perpetual succession and a common seal. Therefore, in the wide and proper legal sense the petitioners are a company although they may choose to call themselves a society or even if Co-Operative Societies Act requires that they should call themselves a society and in the eye of the law they are a company. The next question, is whether they are an unincorporated company or an incorporated company. The answer to that question is very simple, because under Section 23 of the Bombay Co-Operative Societies Act, 1925, registration of a Society renders it a body corporate by the name under which it is registered with perpetual succession and a common seal, and with power to hold property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all things necessary for the purpose of its constitution. The petitioners are a society registered under that Act. Indeed they have to be registered in order that the Act should apply to them and on the petitioners being registered the result of registration is set out in Section 23. Now the result of registration under Section 23 of the Co-operative Societies Act is identical with the result of registration under, the Indian Companies ' Act and the effect of registration under that Act. is set-out in Section 23 (2) of that Act. Therefore, there is no special charm or magic in a company being registered under the Companies Act or under the Cooperative Societies Act, as far as the result of registration is concerned. The effect of registration is identical. The company becomes a body corporate, it gets a common seal and it has a perpetual succession. These are the three important indicia of incorporation and they apply to an association registered under the Co-operative Societies Act as much as to an association registered under the Indian Companies Act. Section 4 of the Companies Act may be looked at as that section prohibits a partnership or association exceeding a certain number doing banking business and it provides that no company, association or partnership consisting of more than ten persons shall be formed for the pin-pose of carrying on the business of hanking unless it is registered as a company under this Act, or is formed in pursuance of an Act of Parliament or some other Indian Law or of Royal Charter or Letters Patent. Therefore the prohibition against more than ten persons doing banking business is removed only if an association of more than ten persons is incorporated. But the incorporation need not necessarily be under the Indian Companies Act; it may be under any other Indian law. Therefore, what is essential and what removes the prohibition against more than ten persons doing banking business is the fact that that association becomes a body corporate.