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2003 DIGILAW 704 (KAR)

MANDYA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. v. N. SRINIVASAIAH

2003-08-22

K.BHAKTHAVATSALA, KUMAR RAJARATNAM

body2003
KUMAR RAJARATNAM, J. ( 1 ) THE Mandya District Central co-operative Bank Ltd. , Mandya (hereinafter referred to as "the Bank") has in this appeal challenged the order passed by the learned single Judge in Writ Petition No. 26045/1991 dated 29/01/1999. ( 2 ) THE learned single Judge directed one sri N. Srinivasaiah, the petitioner in the Writ petition (hereinafter referred to as the "workman") to be reinstated in the Bank and also directed the Bank to pay the back wages from 31/03/1986 till the date of reinstatement. ( 3 ) THE facts briefly are: the Workman raised an industrial dispute under Section 10 (l) (c) of the Industrial disputes Act, 1947 (hereinafter referred to as "the I. D. Act") challenging his termination as secretary with effect from 24/12/1974 in the Mandya District Co- operative Union ltd. (hereinafter referred to as "the Union" ). The case of the workman was that he was appointed by the Union on 22/08/1969 as paid Secretary and posted to Thattakere and sukadore Service Co-operative Society. On 15/07/1974, the Union transferred the workman to Muthegere and Hunaganahally societies. Since the first set of Societies did not relieve the workman, he requested the Union to continue his service in the first set of societies. The Union did not respond to his request. Finally he was forced to hand over the charge on 5/12/1974 and went to report to the second set of societies, viz. , Muthegere and Hunaganahally Societies. By that time, he went there, the Union had posted some other persons to those societies. The Union did not provide him an alternative place and his services were abruptly terminated on 22/02/1975 without any notice. This action on the part of the Union was challenged by the workman in the Reference. ( 4 ) IT was contended by the Union that the workman had become a Director of nagamangala Kasaba LSCS Ltd. , and, therefore, the workman was disqualified to become an employee of the Co- operative society. This was also one another ground for terminating the services of the workman. It is stated that although it is not clear, it appears that earlier an award was passed against the union. Aggrieved by the said award, the Union had filed a Writ Petition before this Court in writ Petition No. 22597/1980. This was also one another ground for terminating the services of the workman. It is stated that although it is not clear, it appears that earlier an award was passed against the union. Aggrieved by the said award, the Union had filed a Writ Petition before this Court in writ Petition No. 22597/1980. The writ petition came to be allowed and the matter was remanded to the Labour Court once again. The stand of the Union before this Court was that due to certain change in the law, the Common cadre Committee came into force on 19/03/1979 in view of Rule 17 (c) of the Karnataka co-operative Societies Rules, 1960 (hereinafter referred to as the Rules ). It was, therefore, submitted that the Common Cadre committee was also a necessary party in the adjudication of the dispute before the Labour court. This Court, accordingly, remanded the matter, as stated earlier, to the Labour Court with the following observations:"in the circumstances, this petition is allowed, the impugned award is quashed and the matter is remitted to the Labour court with a direction to frame an additional issue in the light of the pleadings of the petitioner that it was not the employer of the workman at the relevant time and even otherwise in view of Rule 17 (c) of the Rules framed under the Karnataka Co-operative societies Act, the petitioner would not be liable to answer the claims of the workman. It is open to the petitioner to amend the counter-statement suitably and make an application before the Labour Court for framing appropriate issue in this regard and for bringing the necessary parties on record". ( 5 ) CURIOUSLY although the amendment application was allowed at the instance of the union requiring the Union to implead the common Cadre Committee, the Union did not incorporate the proposed amendment, notwithstanding that an additional issue was framed on 2/08/1982. The additional issue reads as follows:"whether second party Management establishes that in view of the provisions of section 17 (c) of the Karnataka Co-operative society Rules which came into force on 9/03/1979, the respondent was not the employer of the 1st party, but it was only the Committee constituted under the abovesaid Rule? if so, has this Court no jurisdiction to entertain the reference and that the respondent was not liable to answer the claim"? if so, has this Court no jurisdiction to entertain the reference and that the respondent was not liable to answer the claim"? ( 6 ) IN other words, the Labour Court was asked to adjudicate on the reference as to whether the termination of the workman was justified and whether it was the Union or the common Cadre Committee that was liable to reinstate the workman and also as to determine which of the two respondents was liable to pay back wages if the termination was unjustified, if any. The Labour Court came to the conclusion that it was the Union, who is the master of the workman and it was the Union that is liable to reinstate the workman and pay back wages. The Labour Court, on the basis of the pleadings, held that the Union itself admitted that the workman was employed only by the Union. The Labour Court held:"at the cost of repetition, I would like to observe that in view of the clear admission made in the counter-statement earlier and the evidence of their own Secretary before this Court the Co- operative Union had appointed the first party as paid Secretary and after giving training he was posted as paid Secretary to two service co-operative societies. He was working as paid Secretary in those Societies from 1969-74. Thereafter, it was the Co- operative Union which has transferred the first party to some other society. Therefore, it is clearly proved that the Co-operative Union was the employer of the first part". [emphasis supplied] ( 7 ) THERE is a clear finding by the Labour court that it was the Union, who was the employer and it was the Union which ultimately terminated the services of the workman. The labour Court further held that Rule 17 (c) of the Rules was subsequently introduced. By this rule, a Common Cadre Committee was constituted. But the Common Cadre Committee ceased to exist in part by virtue of Section 128-A of the Karnataka Co-operative Societies act, 1959 (hereinafter referred to as the Act ). The labour Court further held that Rule 17 (c) of the Rules was subsequently introduced. By this rule, a Common Cadre Committee was constituted. But the Common Cadre Committee ceased to exist in part by virtue of Section 128-A of the Karnataka Co-operative Societies act, 1959 (hereinafter referred to as the Act ). Section 128-A of the said Act reads as follows:"notwithstanding anything contained in this act, the Rules or the bye-laws, where the registrar, in the interest of the Cooperative movement, considers that the creation of a common cadre of employees for any class of co-operative societies is necessary, he shall authorise one such case of co-operative societies is affiliated to exercise the disciplinary action in respect of such categories of employees of that class of co- operative societies and make such regulations as may be necessary for carrying out the said purpose. Where such federal society is so authorised by the Registrar, the affiliated co-operative societies shall not have power to deal with such categories of employees except to the extent the regulations may permit. The Registrar shall have power to require the affiliated co- operative societies to make contribution of such sum every year towards expenditure, as the federal society is likely to incur or has incurred for the purpose. If any co-operative society fails to pay the sum to such Committee as may be specified by the Registrar and within the time fixed by him the Registrar may on the application of the Committee and after such enquiry as he may consider necessary, make an order requiring the co-operative society to pay the amount, and every such order shall be enforceable against the co-operative society as if it were an award under Section 71". ( 8 ) SECTION 128-A of the Act authorises the registrar to constitute a Common Cadre committee for recruitment and training of secretaries of Karnataka Agricultural Credit co-operative Societies in Mandya District. ( 8 ) SECTION 128-A of the Act authorises the registrar to constitute a Common Cadre committee for recruitment and training of secretaries of Karnataka Agricultural Credit co-operative Societies in Mandya District. This was further clarified by an order by the registrar which reads as follows:"in the circumstances explained in the preamble and in exercise of the powers vested under the provisions of Section 128-A of the Karnataka Co-operative societies Act, 1959 as amended by the karnataka Act No. 5 of 1984, I. P. S. Nagarajan, Registrar of Co-operative societies in Karnataka, Bangalore: (1) do hereby create a common cadre consisting of the Secretaries of Primary agricultural Credit Co-operative Societies in mandya District and authorise the Mandya district Central Co- operative Bank Ltd. , mandya the federal society in respect of primary Agricultural Credit Co-operative societies in Mandya District to exercise the power of appointment, transfer and disciplinary action in respect of Secretaries. (2) do hereby frame regulations as appended to this order which are necessary for the federal Society for exercising the power of appointment, transfer and disciplinary action in respect of Secretaries of Primary societies. (3) do hereby require the Primary Societies and the Mandya District Central co-operative Bank Ltd. , Mandya to make contribution at the rate of 90% and 10% respectively towards the expenditure that the Mandya Distt. Central Co-operative bank Ltd. , is likely to incur or has incurred to meet the salary expenditure of the secretaries of Primary Agricultural Credit co- operative Societies and stipulate that such contribution shall be made once in a quarter every year. (4) this order comes into force with effect from the date of issue of this order. (5) the Common Cadre Committee constituted by the Government of karnataka, vide Notification No. RDC. 27 dgm 80 (xvii) dated 5/09/1980 in exercise of its power under Rule 17 (c) of the karnataka Co-operative Societies Rules, 1960 shall cease to exist from the date of this order. Issued under my hand and the seal, this day the 31st day of March, 1986". From this, it appears that the Common Cadre committee, who has sought to be impleaded before the Labour Court ceased to be in existence and a separate Common Cadre Committee was constituted by the Registrar under Section 128-A of the Act. Issued under my hand and the seal, this day the 31st day of March, 1986". From this, it appears that the Common Cadre committee, who has sought to be impleaded before the Labour Court ceased to be in existence and a separate Common Cadre Committee was constituted by the Registrar under Section 128-A of the Act. There is also no provision in the Regulation creating a Common Cadre Committee for the purpose of appointment, transfer and disciplinary action of primary societies for the transfer of the Secretaries earlier appointed by the Co-operative Union. According to the evidence of the Union, the Union is still very much in existence and it has not been merged with the Bank. In the facts of the present case, the Labour Court came to the conclusion that it is the Union that had appointed the workman as Secretary and transferred him to a Primary co-operative Society to work as a Secretary. It is also an evidence of the Union that the Union transferred only some employees in the cadre of Secretaries to the original Common Cadre committee constituted by the State Government. There is no finding that all the Secretaries appointed by the Union were transferred to the common Cadre Committee. A clear finding was given by the Labour Court that the workman was in the employment of the Union and not with any other Committee. The Labour Court also was extremely cautious in stating that it was open to the Union either to retain hum in the Union or may transfer him to the newly constituted Common Cadre Committee for the purpose of his transfer to some other Primary Co-operative society with the consent of the Committee. ( 9 ) ULTIMATELY, an award was passed directing the Union to reinstate the workman with back wages and with continuity of service from the date of dismissal. With respect to the merits of the matter, the Labour Court held that no enquiry was held by the Union and hence the reinstatement with back wages. ( 10 ) THE learned single Judge completely agreed with the finding of the Labour Court, but, however, came to the conclusion that the award can be made meaningful only if subsequent events are taken into account. The bank which was respondent No. 3 in the writ petition was accordingly mulcted with the liability of reinstatement. ( 10 ) THE learned single Judge completely agreed with the finding of the Labour Court, but, however, came to the conclusion that the award can be made meaningful only if subsequent events are taken into account. The bank which was respondent No. 3 in the writ petition was accordingly mulcted with the liability of reinstatement. The learned single judge held as follows:"the order of dismissal against the 1st respondent is set aside. First respondent is directed to be reinstated in service as secretary of the Primary Agricultural credit Society of the Mandya District. Such reinstatement shall be made by the 3rd respondent who can post the first respondent as such Secretary to any of such Societies in mandya District. Such reinstatement shall be done within two months from the date a certified copy of this order is made available to the third respondent. Labour Court has taken the dismissal as on 24/12/1974. The said date is only the date of resolution of the Board. The actual date of termination, as is clear from annexure A is 22/02/1975. From 22/02/1975 up to 9/03/1979, back wages at 50% shall be paid by the petitioner to the first respondent within two months from the date a certified copy of this order is made available to the petitioner. From 31/03/1986 and until the date of reinstatement, back wages at 50 per cent shall be paid by the 3rd respondent within two months from the date a certified copy of this order is made available to the third respondent. Impugned award is modified accordingly and the petition is disposed of accordingly". ( 11 ) AGGRIEVED by the direction to reinstate the workman and to pay back wages, the Bank is before us in this appeal. Mr. A. N. Venugopal gowda, learned senior counsel for the petitioner-Bank submits that there was no privity of contract between the Bank and the workman. It was further submitted by Sri A. N. Venugopal Gowda that the appellant was not the employer of the Workman at any point of time. There was no arrangement for transfer of any of the employees of the 3rd respondent-Union to the appellant- Bank. The workman was not transferred by the Union either to the Bank or to the pool of common cadre of Societies. There was no arrangement for transfer of any of the employees of the 3rd respondent-Union to the appellant- Bank. The workman was not transferred by the Union either to the Bank or to the pool of common cadre of Societies. It was further vehemently submitted and with justification that there was no averment in the writ petition that there was relationship of 'master' and 'servant' between the Bank and the Workman. There were no materials placed on record before the learned single Judge. It was submitted that the learned single Judge failed to take into account the finding of fact recorded by the Labour Court on the basis of the admissions made by the union in the proceedings before the Labour court. It was submitted that the Bank is only a nodal Committee and has no liability to maintain on its establishment of the Secretaries of the Primary Agricultural Co-operative societies. ( 12 ) WE have heard the learned counsel appearing on both sides at considerable length of time. ( 13 ) THE learned single Judge failed to take into account the additional issue framed on 2/08/1982 before the Labour Court. The additional issue was only with regard to impleading the Common Cadre Committee. How the Common Cadre Committee merged with the appellant-Bank cannot be decided in the writ petition although the Common Cadre committee and the Bank are connected but by no stretch of imagination can the Bank be said to merge with the Common Cadre Committee. ( 14 ) IT is not in dispute that the Common cadre Committee and respondent Union are functioning independently and exist in the eye of law. The Bank can in certain cases be vested with powers of disciplinary control. Such power, if any, is vested only with respect to those Secretaries, who are under the control of the Bank. The Managing Director of the Bank is only a Secretary of the Common Cadre committee. The Bank does not have any role to play, as far as the Administrative Control of the Secretaries of the Primary Societies is concerned, in the District. More than anything else, only the Common Cadre Committee was a party before the Labour Court. The Bank was not a party before the Labour Court and curiously enough the Common Cadre committee was not a party before the learned single Judge. More than anything else, only the Common Cadre Committee was a party before the Labour Court. The Bank was not a party before the Labour Court and curiously enough the Common Cadre committee was not a party before the learned single Judge. This submission that the Common cadre Committee was taken over by the Bank, in our view, is totally erroneous. In any event, it is the Union and not the Bank that terminated the workman. Even in the remand order of this court, the Union had sought to implead only the Common Cadre Committee. It is not open for the Court to implead the Bank. No opportunity was given to the Bank before the bank was impleaded although the counsel for the Bank was heard in the matter. When all blame for the unlawful termination of first-respondent is placed on the Union, it is inconceivable that the Bank or the Common cadre Committee can be directed to pay the back wages and reinstatement. ( 15 ) THE only person who can reinstate the workman is the Union and the Union alone. This is what exactly the Labour Court had done. The Labour Court in the operative portion of the order, which was referred to by us earlier, has stated that it is open to the Union after reinstatement either to retain him in the union or transfer him to the newly constituted common Cadre Committee if the Committee accepts him. ( 16 ) IT is not in dispute that the finding of the Labour Court was that the Union and the union alone is liable to reinstate the workman and pay back wages. The Bank was never a party before the Labour Court. The findings based on evidence before the Labour Court was that the Union had employed the workman and had terminated the workman without any enquiry. It is not permissible for the Court while exercising powers under Article 226 of the Constitution of India to implead a new party as was done in this case without issuing a show-cause notice to the party to be impleaded as to why he should not be impleaded. ( 17 ) THE appellant Bank was not made a party in the original writ petition before the learned single Judge. The Common Cadre committee was also not made a party. The writ petition was filed on 28/10/1991 without impleading the Bank. ( 17 ) THE appellant Bank was not made a party in the original writ petition before the learned single Judge. The Common Cadre committee was also not made a party. The writ petition was filed on 28/10/1991 without impleading the Bank. After a lapse of exactly seven years, I. A-1 for imp leading the Bank was filed on 28/10/1998. No show-cause notice was issued as to why the Bank should be impleaded. Ultimately, the learned single judge allowed I. A.- 1/11/1998 and impleaded the Bank and the Bank though heard was not able to file its objections. ( 18 ) THE Bank never had an opportunity to present its case before the Labour Court. Further, more at the instance of the Union it was the Common Cadre Committee that was impleaded and the finding of the Labour Court was that the Common Cadre Committee is not liable to reinstate the workman. That being the position based on the pleadings and evidence a new case was sought to be made before the learned single Judge by the Union that the Bank is liable to reinstate the workman. Even in the pleadings before the learned single Judge, we do not find any averment that the Bank was responsible for the termination of the workman. Curiously, the Common Cadre committee which still is in existence and which was a party before the Labour Court was not even made as respondent before the learned single Judge. The finding of the learned single judge was also that it is the Union that was responsible for terminating the workman. That being the legal and factual position, the learned single Judge was justified in holding that the union was liable to pay 50 per cent of back wages. The learned single Judge however was in error by mulcting the liability of reinstatement and balance of 50 per cent of back wages on the Bank without any pleadings or evidence to that effect. In fact, the Bank was not even a party before the Labour Court and the Bank had no opportunity to file its objections or lead evidence. It was taken for granted that the Bank is liable to reinstate the workman without any basis. In fact, the Bank was not even a party before the Labour Court and the Bank had no opportunity to file its objections or lead evidence. It was taken for granted that the Bank is liable to reinstate the workman without any basis. Even in the grounds in the writ petition filed by the Union, the paragraph 17 reads as follows:"even if it were to be accepted for the sake of argument, but not conceding, that there is a relationship of employer and workman between the parties, the same ceases to have any effect in view of the coming into force of Section 17 (c) and subsequently the insertion to Section 128-A of the Act and an order dated 31/03/1986 issued under the said provision. Under these circumstances, the impugned order is liable to be revoked and set aside". It is not known how the Bank could be made liable for the wrongful termination of the workman when it is clearly admitted before the labour Court that it was the Union that appointed and terminated the workman. The learned single Judge did not appreciate that there were no averments in the writ petition against the Bank on this aspect of the matter. The Common Cadre Committee was not even impleaded in the writ petition although it was a party before the Labour Court at the instance of the Union. We are of the view that the finding of the learned single Judge that the appellant Bank is liable to reinstate the workman cannot be sustained. ( 19 ) IT is submitted by Mr. Venugopal gowda, learned senior counsel for the appellant-Bank that the Union who wants to pass on the buck to the Bank is not affiliated society and the Bank cannot be responsible for the wrong doing of the Union. It was further submitted that the Union exists and the workman did not come under the supervision of the Bank. ( 20 ) THE evidence clearly indicates that there is an admission by the Union that the union had employed the workman and had also terminated him. It was further submitted that the Union exists and the workman did not come under the supervision of the Bank. ( 20 ) THE evidence clearly indicates that there is an admission by the Union that the union had employed the workman and had also terminated him. ( 21 ) THE Supreme Court in Indian overseas Bank v. I. O. B. Staff Canteen Workers union AIR 2000 SC 1508 : 2000 (4) SCC 245 : 2000-I-LLJ-1618 has held that the finding of fact recorded by the Labour Court cannot be interfered with unless such findings of fact are based on a "case of no evidence". The Supreme court pronounced that if on the facts proved, the findings recorded by the Tribunal are justified and could not be considered to be based upon no evidence, there is no justification for the High Court in exercising writ jurisdiction to interfere with the same. Admittedly, the learned single Judge has taken upon himself to hold that the Bank is liable to reinstate the workman without materials on record. The learned single Judge also failed to take note of the fact that the Common Cadre committee, who was a party before the Labour court, was not even impleaded before the High court although the Common Cadre Committee still exists. The learned single Judge also failed to note that the Bank has no control over the workman since it was the Union that employed the workman and the Union continued to exist. It is submitted from the Bar that the Union has paid 50 per cent of the back wages to the workman from 22/02/197 5/03/1979. ( 22 ) SINCE 50 per cent of back wages had already been paid by the Union-Respondent no. 3 from 22/02/197 5/03/1979 to the Workman, we do not find it necessary to direct the Union to pay any further back wages. However, the Union will reinstate the workman. We direct the Mandya District central Co-operative Bank Ltd. , Mandya, respondent No. 3 the employer of the workman to reinstate Sri N. Srinivasaiah-respondent No. 1 with continuity of service without any further payment of back wages. Respondent No. 3-Union if so desires may transfer the workman to the Common Cadre Committee or to the bank with their consent. ( 23 ) ACCORDINGLY, this writ appeal is allowed. Respondent No. 3-Union if so desires may transfer the workman to the Common Cadre Committee or to the bank with their consent. ( 23 ) ACCORDINGLY, this writ appeal is allowed. The order of the learned single Judge is set aside and the order of the Labour Court is modified accordingly. ( 24 ) NO order as to costs. --- *** --- .