[Maharashtra Cooperative Societies Act] No Provision For Cooperative Court To Return Plaint Before Appropriate Court When It Lacks Jurisdiction: HC

The Bombay High Court observed that there is no provision in the Maharashtra Co-operative Societies Act, 1960 (MCS Act) which empowers the Cooperative Court to return a plaint before an appropriate court when the Cooperative Court has no inherent jurisdiction to try the concerned dispute.

It further observed that even though the Civil Procedure Code, 1908 (CPC) is applicable to a Cooperative Court to a limited extent, this does not make the Cooperative Court a 'civil court'.

The petitioner was terminated from his services as a Manager from the respondent-bank. The petitioner filed a dispute under Section 91 of the MCS Act before the Cooperative Court. Section 91 of the MCS Act excludes industrial disputes, as defined by Section 2(k) of the Industrial Disputes Act (i.e., disputes between an employer and employee related to employment terms), from its scope.

The respondent-bank raised the issue of jurisdiction before the Cooperative Court, but it held that it had jurisdiction to try the dispute. However, it dismissed the petitioner's case on merits. The Cooperative Appellate Court upheld this order.

The counsel for the petitioner contended that the dispute did not fall within the jurisdiction of the Cooperative Court and thus the petitioner's dispute should be returned under Order VII Rule 10 of CPC for filing before the civil court.

Justice Gauri Godse observed that both the Cooperative Court and Appellate Court determined that the petitioner was not a 'workman' as provided under Section 2(k) of the Industrial Disputes Act, 1947 and thus held that the dispute was covered under Section 91 of MCS Act.

The High Court remarked, “Thus, the issue of jurisdiction of the Cooperative Court was based on the subject matter of challenge in the dispute and not on the lack of inherent jurisdiction.”

The Court referred to the Supreme Court case of Maharashtra State Cooperative Housing Finance Corporation Limited vs. Prabhakar Sitaram Bhadange (2017), where it was held that service disputes do not fall within the jurisdiction of the Cooperative Court as per Section 91 MCS Act. The Apex Court had granted liberty to the petitioner to file a civil suit before a suitable court.

In the present case, as it was a service dispute between the petitioner-employee and respondent-employer, the Court held that the Cooperative Court could not have entertained such dispute.

With respect to the petitioner's contention, it noted that a court cannot return a plaint when there is an inherent lack of jurisdiction of such court. It can only be returned when there is no inherent lack of jurisdiction such as a lack of pecuniary or territorial jurisdiction

The Court stated that a suit has to be dismissed when it is found that there is an inherent lack of jurisdiction of the court. It noted that the MCS Act and Rules do not mandate the Cooperative Court to return a plaint when it has no jurisdiction over the matter.

“There is no provision under the MCS Act, or the Rules framed thereunder empowering the Cooperative Court to return the dispute for presentation to the Court having jurisdiction.”

The Court clarified that the Cooperative Court does not possess all the powers of a Civil Court, under the MCS Act. While the MCS Act allows for a limited application of CPC and the proceedings are civil in nature, this does not make the Cooperative Court into a Civil Court.

It stated “The proceedings may be civil in nature, but that does not mean that the Court trying them is a Civil Court and that the proceedings are a “suit” within the meaning of CPC.”

Further “It is well settled that CPC is partly procedural and partly substantive. The Cooperative Court does not become a Civil Court by virtue of Sections 94 and 95 of the MCS Act.”

The Court rejected the petitioner's contention and held that the cooperative Court cannot return the plaint under Order VII Rule 10 of CPC

It thus quashed the order of the Cooperative Court and Appellate Court, while granting liberty to the petitioner to file a civil suit before an appropriate court.

Case title: Shri Madhukar Mahadev Patil vs. Sangli Zilla Madhyawarti Sahakari Bank

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