Karnataka High Court
Veerashiva Co-Operative Bank Ltd. vs Presiding Officer, Labour Court And ... on 9 March, 2000
Equivalent citations: [2001(90)FLR326], ILR2000KAR3743, (2001)ILLJ980KANT
Author: Manjula Chellur
Bench: Manjula Chellur
ORDER
1. These writ petitions are filed by a Co-operative Bank assailing the order of the Labour Court, Bangalore dismissing the petition filed by it. Brief facts of the case are:
2. The petitioner is a registered Bank under the Karnataka Co-operative Societies Act ('Act' for short). The respondents claim to be the employees of the Bank. Their services were terminated by order dated September 13, 1996. Aggrieved by that order, respondents filed a dispute under Section 10(4-A) of the Industrial Disputes Act before the Labour Court, Bangalore. The petitioner entered appearance and filed objections to dismiss the dispute on the ground that it is not maintainable as the petitioner is a Co-operative Bank registered under the provisions of the Karnataka Co-operative Societies Act. The respondents are past employees and ought to have raised a dispute under Section 70(2)(d) of the Act. Section 70(2)(d) of the Act gives power to the Registrar to deal with disciplinary matters relating to employees in the Society or class of societies including the terms and conditions of employment of the employees, working conditions, and disciplinary action taken by the society. This is a special procedure provided under the Act and the dispute under Section 10 of the Industrial Disputes Act stands excluded.
3. On the other hand it is contended by the respondents-employees that the application filed by the petitioner is not maintainable both on facts and law and the same is filed with a view to drag on the proceedings. The dispute filed by them is maintainable and the Labour Court has jurisdiction to decide the same and the application filed by the petitioner is liable to be rejected. The Labour Court, after considering the rival contentions, and distinguishing the judgment of the Supreme Court reported in R.C. Tiwari v. M.P. State Co-operative Marketing Federation Ltd. , and relying on the judgment of the learned single Judge of this Court in W.P. 603/1989 decided on January 21, 1998 and another judgment reported in 1981 (1) KLJ 136, dismissed the application of the petitioner. Assailing that order, these writ petitions are filed.
4. When the writ petitions came up for hearing before the learned single Judge, learned single Judge referred the matter to the Division Bench for consideration as to-
Whether a dispute relating to termination of the services of an employee of a Cooperative Society to which the Karnataka Co-operative Societies Act, 1959 is applicable, is a dispute that can be sought to be adjudicated upon by a labour forum under the provisions of the I.D. Act is of such importance with any decision thereon having wide impact?
5. Therefore the matter is before us.
6. Learned counsel for the petitioner contended that the Act is a self-contained Act containing all provisions providing for considering disputes between the Co-operative society and its employees or past employees or heirs and legal representatives of the deceased employees, including the dispute regarding the terms of employment, working conditions and disciplinary action taken by the society. This is a special procedure provided under the Act. So the dispute under Section 10 of the Industrial Disputes Act stands excluded and the Labour Court erred in dismissing the application.
7. Learned counsel for the contesting respondents contended that the respondents who are employees of the Co-operative society, are workmen as per Section 2(s) of the Industrial Disputes Act and therefore, the dispute that they are dismissed illegally without following the procedure is amenable under Section 10 of the Industrial Disputes Act as a dispute under the Industrial Disputes Act. Industrial Disputes Act is a special enactment. Therefore, it prevails over the Co-operative Societies Act and the Labour Court has rightly dismissed the application. There are no merits in the writ petitions and are liable to be dismissed.
8. In view of the above contentions, the important question of law that arises is-
Whether reference under Section 10 of the Industrial Disputes Act is maintainable in view of the provisions of Section 70 of the Karnataka Co-operative Societies Act, 1959?
9. To appreciate the above contention it is relevant to extract the provisions of Section 70 of the Co-operative Societies Act, which reads as follows:
Section 70: Disputes which may be referred to Registrar for decision:
(i) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constituting, management, or the business of a Co-operative society arises-
(a) to (d)................
(2) For the purposes of Sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a Co-operative society, namely:
(a) to (c).................
(d) any dispute between a Co-operative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a Co-operative society.
10. By reading the above provisions, it is manifest that power is vested in the Registrar to deal with disciplinary matters relating to employees in the society or class of societies including the terms and conditions of employment where the dispute relates to the terms of employment, working conditions and disciplinary action taken by the society or arises between the society and its employees or past employees and the same can be decided by the Registrar or any Officer appointed by him to decide the dispute and his decision shall be binding on the society and its employees. Thus, the section is very comprehensive and takes in all the matters including the service conditions and disciplinary matters regarding employees. Rule 15 of the Karnataka Co-operative Societies Rules deals with remuneration payable to the Administrator and Special Officer; Rule 17 deals with qualifications of Officers and employees of the Co-operative Societies and eligibility criteria for appointment. Rule 18 deals with the conditions of service of officers and employees of Co-operative Societies and also retirement age, leave, gratuity and other conditions. Rule 18(9) deals with punishment. Rule 18(12) provides an appeal against the punishment imposed on an employee. Thus, the Act provides remedy to all employees if any dispute arises. The question is whether the remedy provided under the Co-operative Societies Act excludes the jurisdiction of the Labour Court.
11. A similar question arose before the Madhya Pradesh High Court in R.C. Tiwari v. M. P. State Co-operative Marketing Federation Ltd., an employee of the M.P. Co-operative Society was dismissed from service for misconduct. He sought a reference under the M.P. Co-operative Societies Act and the same was dismissed and became final. He further sought for a reference under the Industrial Disputes Act. The Labour Court held that enquiry was vitiated by illegality and accordingly set aside the order of dismissal. The said order was challenged in the writ petition in the High Court. The High Court held that in view of the provisions contained in Section 55 of the M.P. Co-operative Societies Act, 1960, the Labour Court has no jurisdiction and therefore, the reference is bad. It further held that the finding recorded by the Deputy Registrar of Co-operative Societies against the petitioner in the award operates as res judicata. The said judgment was challenged in the Supreme Court. The question before the Supreme Court was whether the view taken by the High Court is correct in law and the Supreme Court, after referring to Section 55 of the M.P. Co-operative Societies Act, held that the dispute relating to management or business of the society is very comprehensive as repeatedly held by the Court. As a consequence, the special procedure has been provided under the Act and necessarily reference under Section 11 of the Industrial Disputes Act stands excluded. The Supreme Court, distinguishing the judgment in Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad, , held that the jurisdiction of the Labour Court is excluded. Section 55 of the M.P. Co-operative Societies Act is similar to that of Section 70 of the Karnataka Co-operative Societies Act. The Supreme Court considered whether once a relief is provided under the Co-operative Societies Act, a dispute can be sought under Section 10 of the Industrial Disputes Act and answered in the negative. The said judgment squarely applies to the facts of the present case.
12. It is contended by the learned counsel for the respondents that in the case before the Supreme Court, the employee first approached the Registrar of Co-operative Societies, after he negatived, he approached the Labour Court. In those circumstances, the Supreme Court held that the reference is not maintainable in the Labour Court, We are not able to agree with that contention. The Supreme Court after referring to Section 64 of the M.P. Cooperative Societies Act has held that power under Section 64 is very wide. Therefore, the dispute relating to management or business of the society is very comprehensive and as a consequence, special procedure has been provided under the Act, Thus, the Supreme Court has specifically found that as special procedure is provided under the M.P. Co-operative Societies Act providing a settlement of dispute by the Registrar and such decision is binding on the society as well as the employee. The remedy under Section 10 of the Industrial Disputes Act is excluded. It is a fact that the Supreme Court also negatived the contention of the petitioner on the ground of general principle of res judicata as the Society had earlier decided the matter. But, by that itself it cannot be said that the Supreme Court has not held that jurisdiction of the Labour Court is excluded when a special binding procedure is provided under the Co-operative Societies Act.
13. In Sagarmal v. District Sahkari Kendriya Bank Ltd., Mandsaur, the Supreme Court held that the provisions of the Central Act did not apply to the employees of the Co-operative Bank. The facts of the case are that, the appellant was an employee of a co-operative bank. He was removed from service after a disciplinary inquiry on charges of grave misconduct. After removal, he sought a reference under Section 10 of the Industrial Disputes Act before the Labour Court. The Labour Court granted the relief of reinstatement with back wages. The respondent-Bank challenged the same in writ petition before the High Court. The High Court quashed the award on the ground that it is a nullity being made in an incompetent reference. Against that order, the employee filed an appeal assailing that the Labour Court has got jurisdiction. It was contended before the Supreme Court by the appellants that by virtue of Section 93 of the M.P. Co-operative Societies Act, the reference made to Labour Court under Section 10(1)(d) of the Industrial Disputes Act was competent and therefore, the award was valid. The appellant relied on the judgment of the M.P. High Court in Rashtriya Khadan Mazdoor Sahakari Samithi Ltd. v. Presiding Officer, Central Government Industrial Tribunal-Cum-Labour Court, 1975 Lab IC 1409. Replying to the said contention the Supreme Court held that the judgment relied on by the learned counsel is not applicable to the facts of the case and there can be no doubt that the provisions of the Central Act namely, Industrial Disputes Act did not apply to the employees of the respondent Co-operative Bank and held that the view taken by the High Court i.e., reference under Section 10 of the Industrial Disputes Act, 1947 was in competent and therefore, award is a nullity, does not suffer from any infirmity.
14. The above two judgments specifically lay down that once a specific procedure and effective remedy is provided under the Co-operative Societies Act, settlement of dispute under Section 10 of the Industrial Disputes Act is excluded.
15. The Labour Court has referred to the order of the learned single Judge in WP 603/1989 wherein the learned single Judge, following the observation of the Supreme Court, that "therefore the dispute relating to the management or business of the society is very comprehensive as repeatedly held by the Court. As a consequence, special procedure has been provided under this Act. Necessarily reference under Section 10 of the Act stands excluded," held that the above sentence has to be interpreted with reference to the back ground of the case that the petitioner therein earlier approached the society and suffered judgment as it operates as res judicata and in those circumstances, the Supreme Court held that the jurisdiction of the Labour Court under Section 10 has to be excluded. We have already referred to the judgment of the Supreme Court, in R.C. Tiwari's case (supra), wherein Supreme Court has clearly held that remedy under Section 10 of the Industrial Disputes Act stands excluded as a special comprehensive procedure is provided under the Co-operative Societies Act. Therefore, we are not able to agree with the observation of the learned single Judge. In view of the above two Judgments of the Supreme Court, the judgment of the learned single Judge is no more a good law.
16. Learned counsel also relied on the judgment of another learned single Judge in WP 29492/1999 decided on February 15, 1999 regarding maintainability of reference under Section 10 of the Industrial Disputes Act. The petitioner in this case is Mysore Paper Mills Co-operative Society Ltd. Bhadravathi. They challenged that the reference to Labour Court is not maintainable. Learned single Judge referring to the judgment in D.P. Maheskwari v. Delhi Administration, in which the question for consideration was whether the preliminary issue as to whether the workman in that case is a workman or not as defined in Section 2(s) of the Industrial Disputes Act and held that Labour Court can entertain the dispute. The above view has been reiterated in a subsequent judgment in National Council for Cement & Building Materials v. State of Haryana , that as the employee of a Co-operative society is a workman, reference under Section 10 of the Industrial Disputes Act is maintainable. We are not able to agree with the said view of the learned single Judge as the matter has been decided conclusively by the Supreme Court in the judgments stated supra.
17. Learned counsel for the respondents also relied on the Judgment in Sri Padmanabha Large Sized Co-operative Society v. Labour Court, 1985 ILR Kant 50 where similar question arose and the Division Bench, after considering Section 70(2)(d) of the Act held that as the Central Act is a special enactment, the Central Act prevails and reasoning given by the Division Bench is quite contra to the reasoning given by the Supreme Court. As stated earlier, in view of the judgments of the Supreme Court, the judgment referred to by the learned counsel for the respondents is no more a good law.
18. Learned counsel for the management further relied on the judgment in the Krishna District Co-operative Marketing Society Ltd., Vijayawada v. N.V. Purnachandra Rao, . In that case, the facts are the employees of Krishna District Co-operative Marketing Society were retrenched. They challenged the order terminating their services in an appeal filed under Section 41(1) of the A.P. Shops and Establishments Act, 1966. The appellate authority set aside the order and directed reinstatement with full back wages. Aggrieved by the decision of the appellate authority, management filed appeals before the Labour Court under Section 4(3) of the State Act. The Labour Court allowed the appeals filed against the respondents 5-9 and set aside the orders passed by the appellate authority. It however, dismissed the appeals filed against respondents 1-4 holding that orders of retrenchment were bad in law since employees junior to these respondents had been retained in service. Aggrieved by the decision of the Labour Court respondents 5-9 filed writ petitions in the High Court and the management filed writ petitions against respondents 1-4. Learned single Judge who heard the two sets of writ petitions dismissed the writ petitions filed by the employees and allowed the petitions filed by the management holding that the employees could not claim benefit under Section 25 of the Industrial Disputes Act in a proceeding initiated under Section 41 of the A.P. Shops and Establishments Act and remanded the matter to the Labour Court. Assailing those orders, appeals were filed before the Division Bench. The Division Bench accepting the contention of the respondent-employees held that the benefit of Section 25 of the Central Act is available in a proceeding under the State Act. Assailing the Judgment appeal was filed before the Supreme Court. Before the Supreme Court the question for consideration was whether Chapter V-A of the Central Act will have to be complied if the establishment is industry and employee is workman as defined in Central Act and whether the State Act prevails over the provisions of Chapter V-A of the Central Act. Considering that question, the Supreme Court held that if the employees are workemen and the management is an industry as defined in the Central Act and the action taken by the management amounts to retrenchment then the rights and liabilities of the parties are governed by the provisions of Chapter V-A of the Central Act and the said rights and liabilities may be adjudicated upon and enforced in proceedings before the authorities under Sections 41(1) and 41 (3) of the State Act. The said judgment does not apply to the case on hand as the facts are quite different.
19. The above Supreme Court judgments clearly held that when a comprehensive procedural remedy is available under the Co-operative Societies Act, the jurisdiction of the Labour Court is excluded. We accordingly hold that the jurisdiction of the Labour Court is excluded and the dispute before the Labour Court is not maintainable. Writ petition is allowed as prayed for. The respondents-employees are permitted to file an application before the Registrar of Co-operative Societies within a period of six weeks from today. On filing of such application, the Registrar shall entertain and dispose of the said application according to law.
20. Reference is answered accordingly.