K. A. Annamma vs The Secretary, Cochin … on 12 January, 2018

                                                              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)



                                       JUDGMENT

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)

Signature Not Verified No.18354 of 2010 whereby the High Court allowed
Digitally signed by
ASHA SUNDRIYAL
Date: 2018.01.12
15:28:07 IST
Reason: the writ petition filed by the respondent herein and

1
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

2
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

3
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

4
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

5
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

6
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

7
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.

8

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

9
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

10
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

11
(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

12
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

13
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;

14

(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

15
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

16
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.

17

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.

18
(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

19
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

20
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

21
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

22
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

23
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:

24

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

25
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

26
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

27
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

28
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.

29

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

30
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

31
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

32
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

33
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

34
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

35
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,

36
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.”

37

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

38
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

39
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

40
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

41
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 …………….”

42

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

43
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.

44

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

45
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.

46

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

47
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

48
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

49
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

50
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.

51
……………………………………..J.

[R.K. AGRAWAL]

…………………………………….J.
[ABHAY MANOHAR SAPRE]
New Delhi;

January 12, 2018

52

Article source: Supreme Court

EmailEmail
PrintPrint
WP Socializer Aakash Web