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2012 DIGILAW 789 (MAD)

S. Ramadevi v. Director of Sugar

2012-02-14

S.NAGAMUTHU

body2012
Judgment :- 1. The petitioner was appointed as Chief Accounts Officer by the Director of Sugars and she worked there for quite some time. Thereafter, she was deputed as Chief Accounts Officer to the Ambur Co-operative Sugar Mills Ltd., the second respondent herein. During that period, it is stated that she caused loss to the tune of Rs.12,512/-by purchasing excess quantity of uniforms. This was found out during audit. Based on the same, on the direction of the Registrar of Co-operative Societies, the second respondent by his proceedings in Lr.No.4353/2003-F2, dated 10.12.2003, directed recovery of the said amount from the salary of the petitioner. Challenging the same, the petitioner preferred an appeal to the Director of Sugars viz., the first respondent herein. The said appeal was rejected by the first respondent. As against the same, the petitioner filed a writ petition in W.P.No.29225 of 2003 before this Court. The said writ petition was allowed and the order of the Appellate Authority viz., the first respondent was set aside and the matter was remitted to the first respondent for fresh disposal in accordance with law. Thereafter, the first respondent by his proceedings in Na.Ka.No.16640/Th.Ma.Aa1/2003 dated 25.02.2004, rejected the appeal. As against the same, the petitioner is before this Court with this writ petition. 2. In this writ petition, it is mainly contended that the petitioner is not responsible for the loss said to have been sustained by the second respondent Society. In this regard, a show cause notice was also issued by the second respondent, for which, the petitioner submitted an explanation denying her liability. Rejecting the same, the second respondent issued orders for recovery of the said amount from the salary of the petitioner. 3. It is contended by the learned counsel appearing for the petitioner that when the petitioner denied the liability, there should have been a reference made under Section 87 of the Co-operative Societies Act to the Competent Authority and the said dispute should have been resolved. Without doing so, the second respondent directly passed the order which is wholly without jurisdiction, it is contended. The learned counsel would further point out that the first respondent without following the statutory provisions had passed the impugned order which is not sustainable in law. 4. Without doing so, the second respondent directly passed the order which is wholly without jurisdiction, it is contended. The learned counsel would further point out that the first respondent without following the statutory provisions had passed the impugned order which is not sustainable in law. 4. The learned counsel appearing for the petitioner would further submit that as per Rule 149 of the Tamil Nadu Co-operative Societies Rules, there should be a By-law which may contain the provision for recovery of any amount due from any employee. But in the by-law of the second respondent Society, there is no provision empowering the second respondent without reference to Section 87 of the Tamil Nadu Co-operative Societies Act. The learned counsel would further submit that the order of the Registrar of Co-operative Societies, directing the second respondent to recover the amount is wholly without jurisdiction. For all these reasons, the learned counsel appearing for the petitioner would pray for setting aside of the impugned order. 5. The learned counsel for the respondents would stoutly oppose this writ petition. According to her, admittedly there was no reference made to the Competent Authority under Section 87 of the Tamil Nadu Co-operative Societies Act and thus there has been no award passed by any Competent Authority. But according to her, the second respondent has got power under Section 7 of the Payment of Wages Act to recover the amount from the petitioner because the petitioner has caused loss to the tune of Rs.12,512/-. The learned counsel would further submit that the recovery order came to be passed by the second respondent on the direction of the Registrar of Co-operative Societies who is fully competent to do so. Further, according to the learned counsel, the order passed by the second respondent came to be confirmed by the first respondent who is the appellate authority. Therefore, the impugned order does not require any interference at the hands of this Court. 6. I have considered the above submissions and perused the records carefully. 7. Admittedly, there is a dispute as to whether the petitioner is responsible for the loss caused to the Society or not. Therefore, the impugned order does not require any interference at the hands of this Court. 6. I have considered the above submissions and perused the records carefully. 7. Admittedly, there is a dispute as to whether the petitioner is responsible for the loss caused to the Society or not. A reading of Section 87 of the Co-operative Societies Act would go to show that as and when there is such dispute in respect of any loss said to have been caused by any employee, the matter should be referred to the Competent Authority under Section 87 of the Act, within the period of limitation for adjudication. It needs to be pointed out that the Authority under Section 87 of the Co-operative Societies Act is a quasi judicial authority who has got all the powers of a Civil Court to resolve the dispute. If the dispute is so resolved, then only, the Award passed by the said Authority will become enforceable in law. 8. In this case, admittedly no Award has been passed by any Competent Authority. But the learned counsel appearing for the respondents would submit that even without any such Award, the second respondent has got power under Section 7 of the Payment of Wages Act to recover the amount. For a better understanding of the law, let us now have a look into Section 7(4) of the Payment of Wages Act which reads as under: "Section 7(4): 'Nothing contained in this section shall be construed as precluding the employer from recovering from the wages of the employed person or otherwise any amount payable by such person under any law for the time being in force other than the Indian Railways Act, 1890'...." 9. A plain reading of the above provision would make it abundantly clear that if any amount payable by a person under any law for the time being in force, then the employer can deduct the said amount from the wages of the employee concerned. Here the phrase 'any amount payable under any law' needs to be underscored. So far as the case on hand is concerned, the term 'any law' refers to the Tamil Nadu Co-operative Societies Act. The amount payable by the petitioner will become due if only there is an Award as per Section 87 of the Tamil Nadu Co-operative Societies Act. Here the phrase 'any amount payable under any law' needs to be underscored. So far as the case on hand is concerned, the term 'any law' refers to the Tamil Nadu Co-operative Societies Act. The amount payable by the petitioner will become due if only there is an Award as per Section 87 of the Tamil Nadu Co-operative Societies Act. If only there is an Award, the amount becomes payable under the said law viz., the Tamil Nadu Cooperative Societies Act, and thereafter it will be lawful to recover the same from the wages of the petitioner under Section 7(4) of the Payment of Wages Act. Unless the liability is so fixed and the amount is quantified under Section 87 of the Act, no amount becomes due as per the provisions of the Tamil Nadu Co-operative Societies Act and therefore, the question of recovering any disputed amount under the Payment of Wages Act is wholly without jurisdiction. 10. The learned counsel appearing for the respondents would rely on a judgment of a Division Bench of this Court in The Manager, Rajapalayam Mills Ltd. Vs. Labour Court, Madurai and another reported in 1987 II L.L.J. 59, wherein the Division Bench has dealt with Section 7(4) of the Payment of Wages Act. That was a case where the employee therein had secured house building loan from the employer. The question before the Division Bench was whether the said amount could be deducted in installments from his wages. While dealing with the said question, the Division Bench held that the amount can be deducted. In that case, there was no dispute that the amount was due from the workman. But here in our case, there is a serious dispute as to whether the petitioner is responsible for the loss or not. When that be so, in my considered view, unless and until the said dispute is resolved and the Award under Section 87 of the Act is made, taking recourse to Section 7(4) of the Payment of Wages Act by the Society would be wholly without jurisdiction and illegal. 11. It also needs to be mentioned that as per the By-laws of the second respondent Cooperative Society, there is no power for the second respondent to recover the amount. 11. It also needs to be mentioned that as per the By-laws of the second respondent Cooperative Society, there is no power for the second respondent to recover the amount. As per Rule 149, even though there can be by-law making a provision for recovery of the amount by way of punishment, so far as the second respondent Society is concerned, there is no such provision in the by-law and so the second respondent cannot recover any amount even by way of punishment in a disciplinary proceedings. In such view of the matter, the impugned order deserves interference at the hands of this Court. 12. In the result, the writ petition is allowed and the impugned order is set aside. No costs.