Case: The Majoor Sahakari Bank Limited Vs. N.N. Majmudar &amp; Another

The petitioners are aSociety doing banking business and are registered under theSocieties Act. The second respondent was an employee of petitioners and he came to be dismissed, under circumstances which are not relevant, by the petitioners on 11th November 1954. The second respondent applied to the first Respondent, who is the Judge of the Labour Court at Ahmedabad forof the petitioners and compensation. The Petitioners contended that the first respondent had no jurisdiction to entertain that petition. The learned Judge held against the petitioners. The petitioners went in appeal to the Industrial Court. The Industrial Court held that no appeal lay from that decision and the petitioners have now come before us under Article 227.

Court's reasoning:
No contract of personal service can be specifically enforced by a civil Court nor does a civil Court determine whether the wages paid to an employee are proper wages or not. Civil Courts are bound down by the law of contract and it is under the law of contract that the Civil Courts decide disputes between a master and his servant. Industrial Courts decide the disputes between a master and his servant on principles of social justice and whereas the Civil Courts consider what are the actual terms of the contract regulating the rights of master and servant the industrial Courts consider not the terms of contract but what is just and fair and what is proper for the master to pay to his servant. Therefore, if we were to accept Mr. Parpias contention the result would be that although the petitioners are doing banking business and although other banks in the country and in the State are governed by the Act and the employees of those banks have the rights given to them under the industrial law as far as the employees of the petitioners are concerned they have none of the rights which the industrial law confers upon employees of other banks. We should be most reluctant to come to such a conclusion. If the language of the notification is plain it is our duty to give effect to it because we are not concerned with questions of policy; but if it is possible to construe the notification in favour of the second respondent it is also equally our duty to put that construction upon the notification. Fortunately, in our opinion the notification is capable of the construction which Mr. Rane asks us to give to it.Now, we are in agreement with Mr. Parpia that this is not a banking company which is incorporated by Indian Law. Mr.Rane did suggest that although it was not incorporated under the Indian Companies Act it was incorporated under theSocieties Act. But what in our opinion the notification contemplates is not incorporation under an Indian Law but by an Indian law; which means that a special law should incorporate the particular company orappears to us to be fairly clear is the first part of the notification and when we look at that it applies to the business of banking companies registered under any of the enactments relating to companies for the time being in force. Now the object obviously was to apply this notification not to associations of less than ten persons who were doing business of banking and who could not be incorporated but to confine the operation of this notification to ten persons or more who could be and would have to be registered, either under the Indian Companies Act or some other Act relating toCompany is defined, in Halsburys Laws of England, Volume 6, 3rd edition, at page 11, as an association of a number of individuals formed with some common purpose. Therefore, any society, any association, any group which comes together having a common purpose is, in the eye of law, a company. But every company is not a juristic person. It has no legal entity and it is incorporation which gives it a persona and legal entity; and the result of incorporation is, as pointed out by Halsbury, that it becomes a body corporate with perpetual succession and a common seal. Therefore, in the wide and proper legal sense the petitioners are a company although they may choose to call themselves a society or even ifSocieties Act requires that they should call themselves a society and in the eye of the law they are a company. Thenext question is whether they are an unincorporated company or an incorporatedThe answer to that question is very simple, because under section 23 of the BombaySocieties Act, 1925, registration of a Society renders it a body corporate by the name under which it is registered with perpetual succession and a common seal, and with power to hold property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all things necessary for the purpose of its constitution.The petitioners are asociety registered under that Act. Indeed they have to be registered in order that the Act should apply to them and on the petitioners being registered the result of registration is set out in S. 23. Now the result of registration under S. 23 of theCooperative Societies Actis identical with the result of registration under the Indian Companies Act and the effect of registration under that Act is set out in S. 23 (2) of that Act. Therefore, there is no special charm or magic in a company being registered under the Companies Act or under theSocieties Act, as far as the result of registration is concerned. The effect of registration isour opinion, there is no reason why such a limited interpretation should be put upon the general words used in the notification. If the intention of the State Government was, that the notification should only apply to the companies registered under the Indian Companies Act or Acts corresponding to Indian Companies Act nothing was easier than for the Government to have stated so. If the intention was to exclude the banking companies registered under theCooperative Societies Actthat also could have been set out in the notificationcounsel has been able to draw our attention to any Indian Legislation under which an association doing banking business can be registered other than the Indian Companies Act and theSocieties Act. Therefore, nothing was simpler or easier than for the State Government to have stated "doing business of Banking Companies registered under enactments other than the;. When a Court is called upon to interpret a notification which is capable of more than one meaning it is not amiss to consider the reason and principle underlying the notification. There is no reason or principle why asociety doing banking business should be put on a different footing with regard to industrial law from other companies doing identical business. There is no reason why abanking society should treat its employees otherwise than as laid down under the industrial law. If we were satisfied that there was some reason or principle which would lead us to put upon this notification the interpretation which Mr. Parpia suggests we might have put such an interpretation on the notification, but all the considerations are in favour of the interpretation suggested by Mr. Rane. There is nothing in the notification which prevents us from giving the interpretation which we have ultimately decided to give to this notification. Therefore, we are of the opinion that the petitioners are doing business of Banking and are registered under an enactment relating to companies, which is theSocieties Act. The learned Judge was right in taking the view that he had jurisdiction to deal with the matter.