Board of Directors, Edava Service Co-op. Bank vs The Co-op. Arbitration Court and Others

Thottathil B. Radhakrishnan, J.—The third respondent invoked Section 69(1) of the Kerala Co-operative Societies Act, 1969, hereinafter referred to as the "Act", for decision of the dispute, between him and his employer, the second petitioner, a co-operative bank, on account of his dismissal from service. The bank raised a preliminary objection that dismissal is not a matter that would fall u/s 69(1) and no question of reinstatement in service can be considered by the Arbitrator. That plea was turned down. This writ petition is filed by the bank and its Board of Directors challenging that decision.

Learned Counsel for the petitioners argued that Sub-section (1) of Section 69 read with Sub-section (2) of that section does not bring a dispute relatable to dismissal and a claim for reinstatement, within the purview of the term "dispute", for the purpose of that provision. The contention is that Section 69(2)(d) has been couched in such a way that it cannot include a dispute touching dismissal or reinstatement. It is argued that specific inclusion of the words "including their promotion and inter se seniority" in Section 69(2)(d) is sufficient legislative material to conclude that the disputes envisaged by Section 69(2)(d) include only disputes in connection with employment excluding appointment, dismissal etc.; otherwise, there need not have been any such specific inclusion.

Section 69(2)(c) provides that notwithstanding anything contained in any law for the time being in force, if a dispute arises, between the society and any officer, agent or employee or any past officer, past agent or past employee, such dispute shall be referred to the Co-operative Arbitration Court constituted u/s 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. Section 69(2)(d) provides that any dispute arising in connection with employment of officers and servants of the different classes of societies specified in Sub-section (1) of Section 80, including their promotion and inter se seniority, shall also be deemed to be disputes, for the purposes of Section 69(1). A dispute regarding disciplinary proceedings and punishment, including an order of dismissal is a dispute arising in connection with that employment since dismissal is a mode of termination of employment and the reliefs that could be granted to a person aggrieved by dismissal, are matters referable to the employment of the officer or the servant in question. Therefore, a dispute relating to the dismissal of an employee of a co-operative society and who thereby becomes a past employee is a matter that falls within the purview of disputes which are to be decided by the Co-operative Arbitration Court in terms of Section 69(1) of the Act.

Now I shall consider the argument regarding the inclusion of the words "including their promotion and inter se seniority" in Section 69(2)(d) of the Act.

Sub-section (2) of Section 69 opens with a deeming provision, which is a legislative device applied to create a legal fiction; to give a term a particular meaning by the application of such deeming provision. It is settled law that where a legal fiction is created, full effect must be given to it and it should be carried to its logical end. - Boucher Pierre Andre Vs. Superintendent, Central Jail, Tihar, New Delhi and Another, . In construing and applying a deeming provision, the limits of that deeming provision have to be determined and within those limits, the situation that is to be deemed has to be permitted to flow freely. While a fiction cannot be extended beyond its legitimate field, it must be allowed full operation within its intended sphere - Ali v. Kunjannamma 1975 KLT 527.

So, understood, the legislative mandate contained in the opening words of Sub-section (2) of Section 69 read with Clause (2) of that sub-section is to treat any dispute arising in connection with employment of officers and servants as a dispute for the purpose of Sub-section (1) of Section 69. The object of that fiction is to bring all disputes in connection with employment in a co-operative society under the purview of arbitration to the exclusion of other courts and authorities. Therefore, in interpreting the said provision, that fiction has to be carried to its logical conclusion, subject only to the inhibition that such fiction should not be extended beyond its legitimate field. The mode in which the deeming provision is used in Section 69 is only to give full play to the fiction and the object of its creation, namely, the exclusive conferment of authority Co-operative Arbitration Courts or Arbitrators, as the case may be, to decide the disputes.

Not only that, the words relied on, on behalf of the petitioners, only further enlarge the scope of the term "dispute". All that is provides is that any dispute as to promotion and inter se seniority would also fall within the scope of the term "dispute" for the purpose of Section 69(1). There appears to be a reason for such an inclusion. A plain reading of Section 69(1)(c) may generate an argument that disputes between officers or employees or between past officers or past employees of a society are not disputes which fall within the sweep of that provision, though disputes between officers or employees of a society are intricately connected with the affairs of the society and matters touching its business and therefore that could fall within Section 69(1)(c) of the Act. The inclusion of the words "including their promotion and inter se seniority" as the last limb of Section 69(2)(d) only clarifies the position that notwithstanding any vagueness that may be pointed out in that regard in Section 69(1)(c), such disputes also fall within the purview of that provision.

For the foregoing reasons, this writ petition fails. The same is accordingly dismissed in limine.