Jurisdiction of Court created under Kerala Cooperative Societies Act

Industrial or Labour Court vs. Cooperative Court

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 the Acts of his choice out of the two for getting his/her service dispute decided by such forum?

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Act as it originally stood is materially different from the language used in its counter part Sections of two earlier repealed Kerala Co-operative Societies Acts of 1932 and 1951. This departure made in the language employed in Section 69 of the KCS Act qua language of earlier two repealed Acts is significant and has a material bearing while answering the questions.

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.

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.

Third, on interpreting the relevant provisions of the KCS Act, whether independently or/and in 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.

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.

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 of 2000 and not by any authority/Court/Tribunal under any law for the time being in force.

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.

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.

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.

Decision of Supreme Court

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 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 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 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 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 …………….”

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 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.

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 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.

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.

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.

A fortiori, in such a situation, if the State Act has received the Assent of the Governor then the Central Act would prevail over the State Act by virtue of Article 254 (1) of the Constitution.

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.

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 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.

[Source: K. A. Annamma vs The Secretary, Cochin Shipyard, decided by SC on 12 January, 2018]
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