041-NLR-NLR-V-74-THE-MULTI-PURPOISE-CO-OPERATIVE-SOCIETY-LTD.-Appellant-and-K.-I.-GUNATILLEKE-.pdf
H. N. G. FERXAI'vDO, C. J.—Multi-purpose Co-operative Society Ltd.
V. GunatUlckc
151
1971 Present: H. N. G. Fernando, C.J., and Thamotherarn, J.THE MULTI-PURPOSE CO-OPERATIVE SOCIETY LTD., Appellant,and IC. I. GUNATILLEIvE, Respondent
S. C. JOJjGS {Inly.)—D. G. Kahnunai, 645jM
Co-operative Societies Ordinance (Cop. 124)—Section 53— 1 Vronojul termination bySociety of a me Mer’a membership—Suit by member for damayes—Lack offuiisdiction of the ordinary Courts.
The. plaintiff, who was a mombor of a Co-operative Soeioty, suod tho Societyfor damagos for " wrongfully and maliciously and without any manner ofreason ” terminating his membership of tho Society.
Held, that, although tho action was basod on delict, tho question whether amombor of a Co-operativo Soeioty has boon wrongfully deprived of his member-ship in breach of tho rules of tho Society is ono which must be dotormined bytho process of arbitration. In such a caso tho jurisdiction of the ordinaryCourts is ousted by section 53 of tho Co-operative Sociotios Ordinance.
-A-PPEALS from a judgment of the District Court, Kalmunai.
11. S. R. Coomarasivamy, with G. Chakradaran and S. C. B.IFdlyampaya, for the defendant-appellant.
U.C. B. Ralnayake, with M. K. Ratnayake, for the plaintiff-respondent.
Cur. adv. vult.
February 26, 1971. H. N. G. Fernando, C.J.—-
The plaintiff, who was a member of the defendant Co-operative Society,alleged in his plaint that the defendant “ wrongfully and maliciouslyand without any manner of reason ” terminated his membership of thoSociety. Averring that he had thereby suffered pain of mind and lossof reputation and deprivation of his rights and privileges as a member,the.plaintiff claimed damages in a sum of Rs. 2,500.
The learned trial Judge has answered in the affirmative the followingpreliminary issue
“ In view of s. 53 (1) (b) of the Co-operative Societies Ordinance,'Chapter 124, does this Court have jurisdiction to entertain thisaction ? ”
The ground of this answer is that tho action appears to be one basedon delict, and that such an action is in the language of the judgment inthe case of Karunalilleke v. Abeywira1 “ an ordinary civil dispute within
1 (1966) 68 N. L. li. 503.
152
H. N. G. FERXA2CDO, C.J.—Multipurpose Co operative Society Ltd.
v. Gunatilleke
the traditional jurisdiction of the Courts ” and one “ ordinarily determinedb}' the Courts and not intended to be (he subject of awards Thepassages thus relied on occur in that part of the judgment which stressedthe fact that the dispute in that case concerned t he existence of an impliedcontractual liability and the duty to perform it, and held that such adispute is within the traditional jurisdiction of the Courts, and could notbe the subject of a reference to arbitra tion under s. 53.
The present action is no doubt one based on delict, in that the plaintiffalleges a wrongful and malicious act of the Society which has causedhim injuria. But the subject of the dispute is whether or not the Societywrongly terminated the plaintiff's membership, and that terminationcan only be wrongful if the membership was terminated in breach of thorules of the Society. Earlier observations in the same judgment referto such disputes :—
" As between a society and its members, disputes can well arise asto the construction and effect of the rules governing relations betweenmembers inter ae and the relations between a society and its members,as to whether a society or a member had acted in breach of the rulesas to the qualification of members to hold office in the society, as to thevalidity of elections or appointments to office in a society, as to thescope of the business which a society may lawfully carry on, and as tosimilar matters peculiar to associations of persons. It was clearly theintention of the Legislature that such disputes should be finally decidedby the Registrar, in the exercise of his supervisory functions, or byarbitrators appointed by him.”
“ I have no doubt that the determination by the Registrar or anarbitrator of a dispute affecting any of tlie matters just mentioneddocs not involve the exercise of the judicial power of the State.”
With respect, these observations should have made it clear that thequestion whether a member of a Co-operative Society has been wronglydeprived of his membership is one which must be determined by theprocess of arbitration. In the earlier case of Sanmvrjam v. BudullaCo-operative Stores Union Ltd.1 this Court had already held that insuch an event the jurisdiction of tiie ordinary Courts is ousted.
The trial Judge doubts whether the present dispute is one touchingthe “ business ” of a Society. This point is also dealt- with in thoobservations citccl above, which expressly contemplate that disputes asto “ matters peculiar to associations of persons ” are properly referableto arbitration. Termination of membership is certainly such a matter.Thus the <p:nion which the learned Judge .appears to hold, that thoword “ business ” in s. 53 lias only the connotation of some commercialor contractual transaction, is contrary to the opinion on which thoseobservations arc based.
* (10S2) S4 X. L. It. m.
H. >T. G. FERNANDO, C.J.—Itanasinyke v. Ariyaralne Epa
. 153
I hold for these reasons that the preliminary issue must bo answeredin favour of the defendant Society. The plaintiff’s action is dismissedwith costs, but in the circumstances I make no order as to the costs ofappeal.
Tjiamotheram, J.—I agree.
Appeal allowed. –