Dispute Resolution Under Madhya Pradesh Co-operative Societies Act, 1960

Q.6. Do the employees of the co-operative have recourse to Labour & Industrial laws?

Ans.Specific provisions have been framed u/s.55 for dealing with service disputes of the employees, accordingly question arose whether the employees falling under the ambit of Act of 1960 would also be entitled for filing of their disputes under the number of labour & industrial laws. It has been law laid down by Hon'ble Supreme Court in R.C.Tiwari's case that since the specific provision has been provided therefore working condition including the disciplinary action would be covered under the Act of 1960. It was further held that considering the wide language used in s.64 of the Act of 1960, it is a comprehensive code by itself for determination of all kinds of disputes.

It is however pertinent to note that since the primary dispute in aforesaid cases was only with respect to the forum before which the claim is required to be filed by the employee concerned, therefore the substantive rights which have been vested by the specific labour laws would continue be enjoyed by the employees concerned.

Q.7. What is the period of limitation under each of the aforesaid provisions?

Ans. Statutory period of limitation has been prescribed under s.55 & 64 respectively of the enactment. However, as regards the disputes pertaining to disciplinary action, they strictly fall within the domain of s.55 of the enactment, which provides for only 30 days as period of limitation. Accordingly, as the dispute regarding termination falls outside the domain of s.64, therefore, if the dispute is not raised within a period of 30 days from the cause of action, the same stands barred. It would be interesting to note that the Hon'ble High Court speaking through the then Chief Justice Shri Kumar Rajaratnam J., expressed its concern over the issue that when the statute debars the remedy under s.64, then absence of provision of condonation of delay u/s.55 creates an impediment upon dispensation of justice.

It would also be pertinent to note that the said provision stipulating a limited period of limitation had been incorporated through amendment on 05-01-1977, therefore, with respect to disputes which arose prior to the said date would not be restricted by the said amendment, as prior to amendment there was no period of limitation u/s.55 of the Act.

However, as regards the disputes falling under s.64 of Act of 1960, except election disputes which are required to be filed within 60 days of declaration of result, all other disputes have the period of limitation as six years as provided under s.65 of the enactment.

Q.8. When a dispute is raised against a party, is it entitled to file counter-claim?

Ans. Filing of dispute & procedure thereon has specifically been provided u/s.64 of Act of 1960, and accordingly, question arose whether the Registrar is empowered to entertain a counter-claim filed by the opposite party when the dispute is raised by one of the parties. The dispute in the instant case was that of non-payment of loan taken on time, and action of the bank in taking possession of the car and selling the same at a lower price. Before the Registrar the dispute raised by the Bank was recovery of balance amount of money, and a counter-claim was filed by the debtor seeking damages, and difference of amount at which the car was sold & value at which it ought to have been valued. As the counter-claim filed by the Registrar & Tribunal, the writ petition was filed. Considering the wide language which has been incorporated u/s.64, it was held that since the provision does not oust filing of counter-claim by the opposite parties in specific language, to avoid multiplicity of proceedings, it was held that counter-claim can be filed before the Registrar u/s.64 proceedings.

Q.9. What are the exceptions to the exclusion of the jurisdiction of Civil Courts?

Ans.Civil Courts:

It has been provided u/s.82 of the Act that jurisdiction of Civil Courts stands barred as regards the disputes which touch upon the business of society, and accordingly which are to be adjudicated upon u/s.64 of Act. However, when the relief which is sought in the plaint is that whether the decision rendered by the Tribunal/Registrar u/s.64 is null & void for non-compliance of principles of natural justice, and the relief is limited to that extent only, then it cannot be said that the jurisdiction of Civil Courts is barred. It therefore appears that the decision would be upon the correctness in decision making rather then decision vis--vis merits of the claim.

Khula Manch:

When the statute lays down specific powers upon the Registrar to entertain the disputes u/s.64, and further a bar has been created u/s.82 of the Act of 1960 for any other authority to entertain such a dispute, question arose whether in the Khula Manch organized by the Minister heading the department it was permissible to entertain such a dispute. Analyzing the statutory & Constitutional provisions it was held that such a mechanism is akin to Lok-Adalat, and further falls within the domain of statutory power read with rules of business. Accordingly, the Minister was empowered to entertain the dispute, take cognizance of the complaint, receive the same from third parties and take necessary action u/s.80 of Act of 1960.

Territorial limits:

Under the Constitutional framework, the laws which are framed by the State government under the Schedule VII of the Constitution would have its applicability only within the territorial limits of the State. Applying this principle, the question arose whether agreements entered by a Co-operative Society registered under the Act of 1960, with another institution which is situated outside the territorial limits of the State of Madhya Pradesh would also be bound by the Act of 1960. Further, whether the arbitration provision as contained in the said agreement would be negated due to provisions contained in s.64 of Act of 1960. It was held by Hon'ble Supreme Court that as the state statute does not have extra-territorial operations, therefore the contract entered with a party situated at Maharashtra, and executed at Nagpur would not be governed by Act of1960. Accordingly, it was further held that the arbitration provision contained therein would apply with full force.

Q.10. Which are the authorities under the enactment?

Ans. As per s.3 of Act of 1960, following are the authorities: Registrar of Co-operative Societies, Additional Registrar, Joint Registrar, Deputy Registrar & Assistant Registrar. Further it has been provided under s.8 that Registrar shall be empowered to decide questions with respect to formation, registration or continuation of society or the admission of person as a member of the society.

Primarily, the disputes can be classified into two broad categories, first being related to employees of the society and second being related to affairs of the society. Former is provided under s.55 & latter is provided under s.64 of Act of 1960. It would be also be pertinent to note that the enactment provides for mechanism of appeal to the Registrar, and second appeal to the M.P. State Co-operative Tribunal, in the following manner:


It is further pertinent to note that the second appeal lies on following limited grounds: (a) Order is contrary to law; or (b) It failed to determine some material issue of law; or (c) There had been substantial error or defect in the procedure as prescribed under the enactment. Question also arises as to which of the disputes would fall before the Deputy or Assistant Registrar and which would before the other authorities. This has been encapsulated under s.55 & 64 respectively, in as much as service disputes would lie before the Registrar or sub-ordinates depending upon the nature of dispute & class of employee as power of Rgistrar has been delegated upon them for purposes of this provision; however, all other disputes would lie before the Additional Registrar or Joint Registrar or Registrar as provided under s.64 of Act of 1960.

However, it is pertinent to note that when the cause of action of dispute arises prior to registration of the society, then it cannot be said that the said dispute would fall within the ambit of s.64 of Act of 1960, as the provision does not have any retrospective operation. Accordingly, in the instant case as the dispute arose between the plaintiff and involved a proposed society, then civil suit would not be barred u/s.82 of the Act of 1960, and further none of the protections granted to the society under the said enactment would be applicable.