Nathu Ram vs The Fatehabad Co-operative Marketing Society Ltd.

D.K. Mahajan, J.—This is an appeal against the decision of the Subordinate Judge 1st Class, Hissar, whereby he dismissed the Plaintiff''s suit on the short ground that the civil Courts had no jurisdiction to try the same.

The Plaintiff was appointed as Manager of the Fatehabad Co-operative Marketing Society Limited, Fatehabad. He worked as Manager from 17th August, 1958 to 15th April, 1961. Certain disputes having arisen between the Plaintiff and the Society, they were referred to the arbitration of the Registrar. The. Registrar appointed the Inspector of Co-operative Societies to act as an arbitrator. The Inspector gave his award. This led to the present suit.

The main grievance of the Appellant is to be found in paragraph 16 of the plaint. This paragraph is in the following terms:

The person who has been appointed arbitrator, cannot be appointed so legally. Neither he made any enquiry nor did he hear me, the Plaintiff, but he is an Inspector Cooperative Societies, Tehsil Sirsa. He dictated his order at Sirsa in favour of his own department without making any enquiry and hearing me, the Plaintiff, and left the order at Sirsa about which I, the Plaintiff, was not aware at all.

On its basis it is prayed that a declaration be granted that the arbitration decree in favour of the Society is against law, void and ineffective. A consequential relief was claimed forbidding the Society to recover the decretal amount from the Plaintiff.

In the written statement filed by the Society, a preliminary objection was taken that the civil Courts had no jurisdiction u/s 82 of the Punjab Co-operative Societies Act, 1961 (Act No. 25 of 1961). The pleas of the Plaintiff in paragraph 16 of the plaint were denied in the written statement. It was also pleaded that a registered notice was sent to the Plaintiff of the arbitration proceedings.

The learned Judge framed the following issues, but decided to treat the issue of jurisdiction as a preliminary issue:

(1) Has this Court no jurisdiction to try this case?

Is the suit not correctly valued for the purposes of Court-fee and jurisdiction.

Is the award in dispute, given against the Plaintiff, not binding upon him on the grounds alleged in the plaint?

After adverting to the provisions of Sub-section (3) of Section 82 of the Act, the learned Judge dismissed the suit on the ground that the jurisdiction of the civil Courts is barred. Against this decision, the present appeal has been preferred.

The learned Counsel for the Appellant placed his reliance on The President, the Commonwealth Cooperative Society Ltd., Eranakulam v. The Joint Registrar General of Cooperative Societies Trivandrum AIR 1970 Ker 34. His contention is that it was encumbent on the civil Court to determine whether the allegations in paragraph 16 of the plaint were correct or not. It is maintained that no service was effected on the Plaintiff and therefore, the award is void. In our opinion, this result does not follow. It is well-known that an ex-parte decree passed without service of notice on the Defendant is not void. It has got to be set aside. The only difference is that when no notice is served, the period of limitation will start running for setting aside such ex-parte decree from the date the Defendant has knowledge of the ex-parte decree. It would be another matter if the decree is obtained by fraud. For instance, if the allegation in the plaint was that the present award was obtained by fraud, there would be no award. In that event, Section 82(3) of the Act would not bar the jurisdiction of the Civil Courts. But this is not the case here. That being so, we must hold, in agreement with the trial Court, that the jurisdiction of the civil Courts is barred.

So far as the decision of the Kerala High Court is concerned, that was given, under Article 226 of the Constitution of India. The jurisdiction of the High Court under Article 226 in such a case would not be barred, and if the Appellant is so advised, he can move this Court under Article 226, but so far as the remedy by way of suit is concerned; it is specifically barred by Section 82(3) of the Act.

The next contention of the learned Counsel for the Appellant is that the dispute between him and the Society is not covered by Section 55 of the Act. We have examined the provisions of Section 55 and we are unable to agree with the learned Counsel. The section itself is very clear. The position of the Appellant is that of an employee of the Society.

That being so, there is no merit in this appeal. The same fails and is dismissed, but there will be no order as to costs.