KURAVILANGAD SERVICE CO-OPERATIVE BANK LTD. v. STATE OF KERALA
1982-06-16
KADER
body1982
DigiLaw.ai
Judgment :- 1. The main prayer in this Original Petition, filed by the Kuravilangad Service Co-operative Bank Ltd. a Co-operative Bank registered under the Kerala Co-operative Societies Act represented by its Secretary is to issue a writ of certiorari or any other writ, direction or order, for quashing Ext. P12 order dated 7-10-1980 passed by the second respondent, Deputy Labour Commissioner, Kottayam, the appellate authority under S.18 of the Kerala Shops and Commercial Establishments Act, 1960, hereinafter called the Act. 2. According to the petitioner, the third respondent was appointed as a Canvassing Agent for the Recurring Deposit Scheme started by the bank on his furnishing a security of Rs. 500/- as per Exts. P1, P2 and P3 orders with effect from 21-4-1976. An election to the Board of Directors of the Bank was held on 20-6-1976, which was set aside by the Deputy Registrar of Cooperative Societies on 1-7-1977 and an Administrator was appointed to be in charge of the affairs of the Bank till a new Board of Directors of the Bank was elected. After the Administrator took charge of the affairs of the bank, he sought sanction for the appointment of the third respondent along with another on a temporary basis as clerks. Accordingly, as per Ext. P7 order, the third respondent was appointed as a temporary clerk in the bank with effect from 20-10-1976 on a daily wage of Rs. 9/- per working day A fresh election was conducted with the Administrator in charge of the affairs of the bank on 15-1-1977, and a new Board of Directors assumed charge on 14-2-1977. The appointment of the third respondent as a temporary clerk by the Administrator got automatically terminated on the new Board of Directors assuming charge. But the services of the third respondent was terminated only on 15-7-1977 and a relieving order was served on him, a copy of which is Ext. P9. 3. The order Ext. P9 by which the services of the third respondent was terminated was challenged by him before the second respondent by filing Appeal No 6 of 1980 under the Act.
But the services of the third respondent was terminated only on 15-7-1977 and a relieving order was served on him, a copy of which is Ext. P9. 3. The order Ext. P9 by which the services of the third respondent was terminated was challenged by him before the second respondent by filing Appeal No 6 of 1980 under the Act. The petitioner, on receiving notice appeared before the 2nd respondent, and resisted the appeal contending that the third respondent is not an employee of the petitioner as defined in the Act; that he was never appointed by the President as a clerk; that the President has no authority to appoint him as a clerk; that therefore the appeal was not maintainable; and the appellant is not entitled to any relief. 4. Before the appellate authority evidence, both oral and documentary, was let in by both sides. The appellate authority held that the third respondent is an employee of the petitioner-society, that the appeal is maintainable, that the termination of his services was wrong and illegal, and ordered reinstatement of the third respondent with backwages. 5. It is this appellate order that is challenged in this Original Petition, mainly on the ground that the order is vitiated by errors of law apparent on the face of the record, that the very approach made by the appellate authority to the material point in issue was wrong, that the appellate authority failed to apply the test whether the third respondent was principally and wholly working in the business of the petitioner, that the appellate authority committed a serious illegality by not considering a number of important documents produced on behalf of the petitioner, and that therefore, the order should be set aside and the case sent back for disposal according to law. 6.
6. The learned advocate appearing for the third respondent strongly supported the appellate order and contended that there is no error of law apparent on the face of the record calling for interference by this Court, that there is no overlooking of any important items of evidence by the Tribunal, that even if the President had no authority to appoint the third respondent as a clerk, the fact that he was working as a clerk on the basis of that appointment is sufficient in law to claim that he is an employee under the petitioner and therefore the Original Petition should be dismissed. 7. Error in respect of jurisdiction or error in orders produced by fraud can certainly be corrected by a writ of certiorari. But it is not correct to say as a categorical and unqualified proposition that unless error of jurisdiction is established or fraud proved, no writ of certiorari can be issued. 8. The most important point in this case is whether the third respondent is an employee coming within the definition of an employee under S 2(6) of the Act which reads "employee" means a person wholly or principally employed in, and in connection with, any establishment and includes an apprentice." This, no doubt, is a mixed question of fact and law. The attack of the counsel for the petitioner is that the appellate authority did not apply its mind to this vital question and was mainly influenced by the fact that canvassers have been exempted by a notification of the Government under S.4 of the Act and that he did not really apply the test enjoined under S.2 (6) of the Act. The further argument on behalf of the petitioner was that a number of important documents, which not only have an important bearing on the point in dispute but would have fully disclosed that the third respondent was not an employee under the petitioner, were not only considered but not even adverted to by the appellate authority although these documents have been proved and evidence also adduced as regards them. 9. There is considerable force in the contentions raised on behalf of the petitioner.
9. There is considerable force in the contentions raised on behalf of the petitioner. It is not enough if it is found or proved that the third respondent is employed by the petitioner, but it should be further shown that he was wholly or principally employed in or in connection with the service or business under the petitioner. The mere fact that a person is employed in an establishment is not enough to attract the definition of an employee under S.2(6) of the Act, as it has to be further proved that he was principally or wholly employed in or in connection with that business. A Division Bench of this Court in South Indian Bank Ltd. v. Antony 1980 KLT. 317; (1980(1) ILR. Ker. 204) while dealing with a similar case, held that the withdrawal of immunity conferred by S.3(b) of the Act alone will not constitute the 1st respondent an employee, unless he satisfies the requirements of the definition of the term under S.2(6) of the Act. Although the appellate authority rightly framed the issue whether the appellant is an employee as defined in S.2(6) of the Act, there is nothing in the operative part of its order in this regard to show or indicate that he applied the test whether the third respondent was wholly or principally employed in or in connection with the establishment under the petitioner. In the operative portion of the order while dealing with the contention of the petitioner that the third respondent is not an employee coming within the four corners of the Act, the appellate authority has only stated that as per notification No 81491/H 3/62/HLD dated I8th October, 1963, Government of Kerala had directed that the provisions of the Act, except S.6, 7, 8, 9 and 10 shall apply to persons whose work mainly involves travelling and persons employed as canvassers and caretakers.
After referring to this notification issued under S.4 of the Act, the appellate authority abruptly concluded that in view of this notification the appellant when he was a bill collector from 21- 4-1976 was an employee of the bank, to whom the provisions of the Act, except S.6 to 10 were applicable, and therefore, the respondent there (the petitioner herein) has no legal ground to argue that the appellant there (the third respondent herein) is not an employee coming under the purview of the Act and he is not entitled to prefer an appeal under S.18 (1) of the Act. This conclusion of the appellate authority, without applying the real legal test whether the third respondent was principally or wholly employed in or in connection with the business of the petitioner is erroneous Failure to apply a proper legal test or applying a wrong legal test constitutes an error of law which is apparent on the face of the record which is a sufficient ground to exercise powers of this Court under Art.226 of the Constitution. As stated earlier, it is not correct to hold that unless an error of jurisdiction is established or fraud proved, no writ of certiorari can be issued Application of a patently erroneous legal test would also justify the interference of the High Court under Art.226 of the Constitution (See Prem Sagar v. S. V. O. Company (AIR. 1965 SC. 111). 10. It is not disputed that as per bye-law 28 (15) of the Society all the appointments of employees in the bank can be made only by the Board of Directors and the President in his individual capacity has no such authority. Admittedly the Board of Directors has not approved or ratified the alleged appointment of the third respondent under Ext. P2 by the President. In this regard the appellate authority does not appear to have properly understood Ext. 03, a resolution of the Board of Directors. It can be seen from Ext. 03 that it was pointed out at the meeting that the appointment of the third respondent was unauthorised and one member even recorded his objection that the appointment cannot be approved There is also force in the contention of the counsel for the petitioner that if really the third respondent was employed and was working as a clerk on the strength of Ext. P2.
P2. there was no necessity for the Administrator of the Bank to appoint the third respondent once again as a clerk Ext. P5 is the proceedings of the Administrator dated 21-9-1976, which clearly states that in order to clear off arrears of work it has become necessary to appoint the third respondent who was then working as recurring deposit collector and another lady, temporarily as clerks. Ext. P7 is the proceedings of the Administrator dated 10-10-1976 by which the third respondent was temporarily appointed with effect from 20-10-1976 on daily wage of Rs. 9/-. Ext. P7 makes it abundantly clear that the third respondent was then working only as a recurring deposit collection agent of the bank. Ext. P8 is the appointment order issued to the third respondent appointing him with effect from 20-10-1976 temporarily as clerk. It has been specifically stated in this order that the period of his service in the bank will expire within 30 days of the new Board of Directors taking charge of the affairs of the bank or regular appointments are made to the post, whichever happens earlier. The third respondent was relieved from service by Ext. P9 order None of these documents had been considered or even adverted to by the appellate authority. This is a serious infirmity which is sufficient to vitiate the order. For the reasons stated above, the order impugned has to be interfered with. The Original Petition is accordingly allowed, the order of the appellate authority is set aside and the case is sent back to the second respondent for fresh disposal according to law and in the light of this judgment as expeditiously as possible. No costs in the circumstances. Allowed.