06 August 2024 Industrial Law >> Business & Commercial Law  

In the realm of cooperative society disputes, the question of jurisdiction and the applicability of procedural laws like the Civil Procedure Code (CPC) often arise. This article examines a significant case involving the dismissal of an appeal by the Cooperative Appellate Court, which was subsequently challenged on the grounds of jurisdiction and the application of CPC provisions.

Background of the Case:

The petitioner, having been terminated from their position, filed a dispute under Section 91 of The Maharashtra Co-operative Societies Act, 1960 (MCS Act), seeking reinstatement and compensation for what was alleged to be an illegal termination. The Cooperative Court dismissed the dispute, and this decision was upheld by the Cooperative Appellate Court. The petitioner then filed a petition challenging the dismissal, arguing that the Cooperative Court lacked jurisdiction to decide the case based on precedents set by the Supreme Court of India.

Legal Precedents and Arguments:

The petitioner’s primary argument relied on the Supreme Court's decision in Maharashtra State Co-operative Housing Finance Corporation Limited v. Prabhakar Sitaram Bhadange [(2017) 5 SCC 623], which held that disputes between cooperative societies and their employees were outside the jurisdiction of the Cooperative Court under Section 91 of the MCS Act. The petitioner also referenced the case of Suvarnayug Sahakari Bank Limited v. Suresh Shivajirao Kale (Writ Petition No. 12845 of 2016 dated 6th October 2023), where the court, following the Supreme Court’s principles, had set aside a similar decision and granted the employee liberty to file a civil suit.

In contrast, the respondent argued that the provisions of Order VII Rule 10 of the CPC, which allows for the return of a plaint for filing in the appropriate court, were not applicable as the Cooperative Court did not have jurisdiction over the subject matter. The respondent contended that the Cooperative Court’s lack of jurisdiction was inherent and not merely a matter of territorial or pecuniary limits.

Court’s Analysis:

The court considered whether it could invoke the provisions of Order VII Rule 10 of the CPC to return the dispute to a civil court. The analysis focused on whether the Cooperative Court had inherent jurisdiction or if it simply lacked jurisdiction over the specific subject matter of the dispute. Citing the Supreme Court's decision in Raizada Topandas v. Gorakhram Gokalchand [(1964) 3 SCR 214], the court underscored that only disputes regarding territorial or pecuniary limits could be addressed through returning the plaint. For cases involving inherent lack of jurisdiction, the proper course was dismissal rather than a transfer of the case.

The court also referenced Tarkude Hotels Private Limited v. Rupee Co-operative Bank [(2012 (1) Bom CR 4429)], which established that the CPC does not fully apply to proceedings before the Cooperative Court, reaffirming that the Cooperative Court could not exercise powers beyond those explicitly granted by the MCS Act.

Conclusion:

In conclusion, the court ruled that the Cooperative Court did not have jurisdiction over the dispute under Section 91 of the MCS Act, aligning with the principles established in the Supreme Court’s decisions. The court dismissed the petition and allowed the petitioner the opportunity to file a civil suit, with provisions under the Limitation Act for the period already spent in litigation before the Cooperative Court. This case reinforces the distinction between inherent jurisdiction and jurisdictional limits, emphasizing the procedural boundaries within which cooperative disputes are resolved.

  Limitation Act, 1963    MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960    Industrial Disputes Act, 1947