H. N. G. FERNANDO, J.—Kanadam Korale Co-operative Agricultural 83
. Production and Sales Society Ltd. v. Lekamge Appuhamy
1958 Present: H. N. G. Fernando, J., and Sinnetamby, J.KANADARA KORALE CO-OPERATIVE AGRICULTURALPRODUCTION AND SALES SCOIETY LTD., and U. LEKAMGEAPPUHAMY, Respondent
S. C. 683—D. C. Anuradhapura, 4829
Co-operative Society—Purchase of paddy from members—Dispute over non-paymentof purchase price—Jurisdiction of District Court-Co-operative SocietiesOrdinance (Cap. 107), s. 45 (/).
Where the purchase of paddy from its members is a part of the business of aGo-operative Society, section 45 (1) of the Co-operative Societies Ordinanceousts the jurisdiction of the ordinary' Courts in regard to a dispute between amember and the Society over non-payment of the price of paddy purchased.
/APPEAL from a judgment of the District Court, Anuradhapura.
Edmund J. Cooray. with E. B. Vannitamby, for the Defendant-
Sira Sellkth. for the Plaintiff-Respondent.
Cur. adv. vult.
October 13, 1958. H. N. G. Fernando, J.—
Section 45 (1) of the Co-operative Societies Ordinance (Cap. 107)provides inter alia that any dispute touching the business of a Co-operativeSociety between the Society and any of its members shall be referred tothe Registrar.
In the present case the plaintiff is admittedly a member of the defend-ant Society, and accordingly if the dispute was one concerning theSociety’s business the section would clearly apply.. In that event theDistrict Court would have had no jurisdiction to entertain the action :Sanm-ugam v. The Badulla Co-operative Stores Union, Ltd.1
The case for the plaintiff is that he sold 720 bushels of paddy at therate of Rs. 12 per bushel to the defendant Society “ which inter aliapurchases paddy under the Guaranteed Price Scheme ”,
1 (1952) 54 N. L. S. 16.
H. N. O. FEKN'AKDO. 3.—Kanadara Korale Co-operative Agricultural
1'mliirlion and Sales Society, Ltd, v. Leleamge Appuhamy
The actual delivery of the paddy was made however not to the Societyitself but to the Government Price Scheme Store, and it is common groundthat this was equivalent to delivery to the Society. Prim a facie,therefore, the Society became liable to pay for the paddy at the rate ofIts. 12 per bushel, but payment was made only at the rate of Rs. 10 perbushel and the present action is for the recovery of the balance of Rs. 2per bushel. The reason for this deduction from the sale price wasstated in evidence by an officer of the Co-operative Department: it.would appear that the Price Scheme is intended to apply onfy to paddysold by cultivators, and that the Government makes a deduction of Rs. 2per bushel from payments due to Societies in a case where the purchasingofficer considers that a person has sold paddy not produced by himself.The witness added that he authorised the Society in its turn to pay theplaintiff at the reduced rate of Rs. 10 per bushel. The Society wouldobviously be the loser if it has to pay at a higher rate than it receivesfrom the purchasing organisation.
All that counsel for the respondent can urge, and he urged it with someability, is that since the Society M ould be Milling to pay the plaintiff atthe higher rate and is precluded from so doing only because of theattitude of the Government officials concerned, the dispute is not oneconnected with the business of the Society. But even if one were tosuppose for the sake of argument that the officials have acted unjustlyor even unlawfully, it is clear that the Society has failed, for good reason orbad, to make a payment alleged to be due from it. The purchase ofpaddy from members is a part of the business of the Society, and themaking of payments for purchases or the failure to make such paymentsare equally acts or omissions in the course of the business. When, there-fore, the Society wrote to the plaintiff declining to pay the balanceclaimed, a dispute arose between the two parties upon the questionwhether or not the plaintiff M'as entitled in law to receive the balance.Such a dispute is in my opinion clearly one to which the Section 45 (1)of the Ordinance applies, and the District Court accordingly had nojurisdiction to entertain the action.
The appeal is allowed and the plaintiff’s action dismissed with costsin both Courts.
Sinnetamby, J.—I agree.
KANADARA KORALE COOPERATIVE AGRICULTURAL PRODUCTION AND SALES SCOIETY LTD., an