Cooperative Societies’ Disciplinary Disputes Fall Under Labour Court Jurisdiction: Allahabad High Court

The case revolves around a legal dispute between the Kisan Sahkari Chini Mills Ltd., a cooperative sugar mill, and several of its workmen. The primary legal issue was whether disputes related to the termination of employment, which involve disciplinary actions, fall under the jurisdiction of the Labour Court as per the U.P. Industrial Disputes Act, 1947, or whether such disputes should be resolved under the U.P. Cooperative Societies Act, 1965, which generally governs cooperative societies.

The petitioners, Kisan Sahkari Chini Mills Ltd., argued that the disputes should be handled under the Cooperative Act, while the respondents, supported by the Labour Court, contended that these disputes fall within the purview of the Industrial Disputes Act, 1947.

Important Legal Issues Involved:

1. Jurisdiction of the Labour Court vs. Cooperative Act: The core issue was determining which legal framework should govern disputes related to disciplinary actions taken against employees of cooperative societies. The petitioners argued that the Cooperative Act, 1965, specifically Section 70, which excludes disciplinary disputes from its arbitration provisions, should apply, thus barring Labour Court jurisdiction. Conversely, the respondents argued that since the Cooperative Act does not provide a remedy for such disputes, the Industrial Disputes Act should apply.

2. Interpretation of “Workmen” and “Employees”: A secondary issue was the distinction between “workmen” as defined under the Industrial Disputes Act and “employees” under the Cooperative Act. The court needed to ascertain whether the protection offered by the Industrial Disputes Act extended to the employees of cooperative societies.

Decision of the Court:

The Division Bench of the Allahabad High Court, comprising Chief Justice Arun Bhansali and Justice Vikas Budhwar, delivered the judgment. The court ruled in favor of the respondents, holding that disputes involving disciplinary actions against workmen in cooperative societies do fall under the jurisdiction of the Labour Court as per the U.P. Industrial Disputes Act, 1947.

The court emphasized that the exclusion of disciplinary disputes from arbitration under Section 70 of the Cooperative Act does not leave workmen without recourse. The standing orders issued under the Industrial Disputes Act provide a legal remedy through the Labour Courts, ensuring that workmen are not left without a forum to address their grievances.

Key Observations of the Court:

– The court observed, “The dispute touching the business of the society cannot be intermingled with the dispute pertaining to employment and service matters as they are on a different footing.”

– It further clarified that, “The workmen are not remediless as once the service conditions do not fall under the Cooperative Act, 1965, then in view of the Standing Orders issued from time to time, the workmen have a remedy to approach the Labour Courts having jurisdiction over the matter.”

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Case Details:

– Case Number: WRIT – C No. – 5577 of 2015 (along with connected cases).

– Bench: Hon’ble Chief Justice Arun Bhansali and Hon’ble Justice Vikas Budhwar.

– Lawyers:

  – For the petitioner: Sri Samir Sharma, Senior Counsel, assisted by Sri Diptiman Singh.

  – For the respondents: Sri Gopal Narayan.

  – For the State: Ms. Akanksha Sharma, Standing Counsel.