DISTRICT CO OPERATIVE SOCIETY LTD Vs. KHEM CHAND

JUDGEMENT

(1.) This is an appeal by a defendant and it arises under the following circumstances. The plaintiffs-respondents were expelled from membership of the District Co-operative Society Mandi through a resolution passed in the annual meeting held on 22-6-1952. Thereupon, they filed a suit in the Court of the Subordinate Judge, Mandi, seeking a declaration that the proceedings of the annual general meeting and their removal from membership were illegal and mala fide and further they still continued as members of the society. The suit was contested on various grounds; inter alia, the society contended that the suit was not maintainable in view of the provisions of Rule 18 framed under Section 43, Cooperative Societies Act. The preliminary objection was upheld by the Subordinate Judge, who dismissed the suit. In appeal, the learned District Judge came to the conclusion that Rule 18 did not apply to the facts of the case. Consequently, he reversed the order of the Subordinate Judge and remanded the case for decision on its merits. Hence, this appeal.

(2.) I have heard learned counsel for the parties at considerable length. The point for determination here is whether Rule 18 framed under Section 43, Co-operative Societies Act is a bar to the present suit? To answer this question, it is necessary to refer to the wording of Rule 18 (a), which has been quoted 'in extenso' by the learned District Judge. It is clear from the perusal thereof that certain kinds of disputes have to be referred to the Registrar in the manner contemplated therein. These disputes must, firstly, relate to the business of the co-operative society and, secondly, must be between present or past members of the society or persons claiming through them on one side and the committee on the other. We have, therefore, to see whether the dispute in the present case can reasonably be said to be one which concerns the business of the co-operative society. The dispute obviously is between certain members who have been expelled on one side and the society on the other. Thus, the second condition is satisfied. From the preamble of the Act, it is clear that the object of forming co-operative societies is to promote thrift and self-help among agriculturists, artisans and persons of limited means. Section 43 of the Act empowers the Provincial Government to frame rules to carry out the purposes of the Act, including rules for general meetings of the members, for procedure at such meetings and the powers to be exercised by such meetings for the withdrawal and expulsion of members etc. etc. As already stated, the plaintiffs feel aggrieved by the fact that at the annual meeting, they were expelled from the membership. Their contention is that the proceedings were illegal and they still continue to be the members of the society. Can this be said to be a dispute concerning the business of a co-operative society? Learned counsel for the appellant contends that this is so. He has made a reference to the provisions of Section 32 of the Government of Part 'C' States Act 1951 as well as to Articles 77, 118 and 120 of the Constitution in an attempt to show that the term "business" should be interpreted liberally and it would include proceedings at the meetings of the society and resolutions passed on such occasions.

(3.) I have also been referred to the following case law.. (a) 'Kisan Lal Ridhakarandas v. Co-operative Central Bank Ltd., Seoni', AIR 1946 Nag 16 (A). There, with reference to R 26 framed by the C. P. Government, it was held that: