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2025 DIGILAW 1618 (TS)

G. Anjaiah, Died v. Dept. Of Coop. , Rep. By Sec.

2025-11-25

NAMAVARAPU RAJESHWAR RAO

body2025
ORDER: NAMAVARAPU RAJESHWAR RAO, J. This Writ Petition is filed seeking to declare the action of the respondents in not releasing the amount towards balance service wages to the petitioner as arbitrary and violative of the terms of the settlement under section 18(1) of the Industrial Disputes Act and Article 14 of Constitution of India and set aside the proceedings in Rc.No.WP.15842/2004/277, dated 18.12.2004. Consequently, direct the respondents to release the sanctioned amount towards the balance service wages along with interest @ 12% per annum with quarterly rests from the date of sanction till the date of actual payment. 2. Heard Sri Goda Siva, Learned Senior Counsel, argued on behalf of Smt. Goda Ramalakshmi Learned Counsel for the petitioner and Sri V. Hari Haran, Learned Senior Counsel, argued on behalf of Sri Rohit Pogula, learned Government Pleader for services – III, appearing for respondents. Perused the material available on record. 3. The original petitioner by name Sri G. Anjaiah (hereinafter referred to as “deceased employee”), filed the present Writ Petition, and during pendency of the Writ Petition, he died and his wife was brought on record as petitioner No.2, vide orders, dated 09.02.2024. 4. The brief facts of the case are as follows, (a) The deceased was appointed as a Typist in Land Mortgage Bank, Medak, on 01.10.1968. The State Government took a decision to rename the Land Mortgage Banks as Primary Agriculture Development Banks. The deceased continued to serve the said bank in the capacity of Typist till 1984. During 1983-84, he underwent cooperative training and on completion of training, promoted as Supervisor of the Bank. Since then, he continued to discharge his duties as Supervisor of the bank. (b) While so, the State Government introduced a single window system for catering to all the credit needs of the agriculturists by amending the Andhra Pradesh Cooperative Societies Act and from 01.04.1987, the Primary Agricultural Development Banks which were catering to the long term credit needs were merged with District Cooperative Central Banks, which cater to the short term needs. Thus, the deceased became an employee of the 3rd respondent Bank from 01.04.1987. Thereafter, he was promoted to the post of Assistant Manager in the year 2000. (c) Due to paralytic attack, the deceased had to undergo treatment for quite some time, as such; he had applied for retirement on grounds of medical invalidation on 08.05.2003. Thus, the deceased became an employee of the 3rd respondent Bank from 01.04.1987. Thereafter, he was promoted to the post of Assistant Manager in the year 2000. (c) Due to paralytic attack, the deceased had to undergo treatment for quite some time, as such; he had applied for retirement on grounds of medical invalidation on 08.05.2003. By proceedings dated 04.06.2003, the 3 rd respondent Bank had constituted a Medical Board for satisfying itself whether his claim was genuine or not. The Medical Board certified that could be relieved on medical invalidation grounds. Based upon the certificate so issued, the Management Committee of the 3rd respondent Bank on 06.11.2003 accepted the deceased employee’s request for retirement on medical invalidation and he be paid the amounts due. The decision of the Management Committee was communicated to him vide proceedings, dated 08.12.2003 and subsequently, he was relieved with effect from 13.06.2003. (d) Thereafter, the 3rd respondent Bank had passed an order on 31.12.2003 sanctioning an amount of Rs.2,41,320/- towards gratuity; Rs.73,940/- towards encashment of leave and Rs.1,92,330/- towards balance service wages on medical invalidation for two and half years to the deceased employee. The 3 rd respondent Bank was bound to release the benefits immediately. But, the 3rd respondent did not pay any amount to him. Aggrieved, he had submitted a representation on 23.01.2004 seeking early settlement of the amount sanctioned by the 3 rd respondent Bank. Thereafter, the 3 rd respondent Bank had released the amounts pertaining to gratuity and leave encashment of the petitioner but, the amount towards balance service wages was not released. The deceased employee brought the said non-settling of the balance service wages to the notice of the District Cooperative Officer. Thereafter, the District Cooperative Officer had addressed a letter to the 3rd respondent Bank on 29.03.2004 to immediately settle this amount. But no amount was paid to him and thereafter, the said Officer sent a reminder on 01.05.2004 to the 3 rd respondent Bank even then no amount was paid. (e) Upon enquiry with the 3 rd respondent Bank, the deceased employee was made to understand that the 2nd respondent issued a letter in Rc.No.15974/2004/Cr II C, dated 09.08.2004 and by virtue of this letter; it would not be possible for him to get the amounts due. (e) Upon enquiry with the 3 rd respondent Bank, the deceased employee was made to understand that the 2nd respondent issued a letter in Rc.No.15974/2004/Cr II C, dated 09.08.2004 and by virtue of this letter; it would not be possible for him to get the amounts due. The said letter reveals that no compassionate appointments are permissible and similarly that no compensation can be given by any Bank which is reeling under resource crunch and is covered by Section 11 of the Banking Regulation Act. One of the contents of Section 11 is “the DCCB, Medak, has no business in indulging interests of farmers by giving loans, has no business to continue its existence.” By virtue of said letter, the 3rd respondent Bank had refused to release the amount sanctioned to the deceased vide letter, dated 31.12.2003. Hence, the present Writ Petition. 5. Learned counsel for the petitioner vehemently argued that the terms and conditions of the employees of the DCCBs are governed by the Settlements arrived at under the provisions of the Industrial Disputes Act, 1947. With the approval of the 2 nd respondent under Section 116 -C of the Act, the parties to the settlement are bound by the terms contained therein. He further submits that the ground of resource crunch cannot be a valid one to deny the benefits that are liable to be passed on to the employees in pursuance of a valid and binding settlement under the provisions of the Industrial Disputes Act, 1947 which received the assent of the 2nd respondent. 6. Learned counsel for the petitioner further submits that the similarly situated persons to that of the petitioner, i.e. one Sri K. Bhooma Reddy, Assistant Manager had retired on medical invalidation during 2000 and another Shri A. Adivappa who also retired in 2001-02 on similar grounds with 10 months of service left, were paid compensation during the same point of time in spite of the fact that the Bank at the relevant point of time was covered by the provisions of Section 11 of the Banking Regulation Act. Thus, the respondents have not shown any just and valid reason to deny the benefit which is rightfully due to the petitioner. 7. Learned counsel for the petitioner further submits that the respondent Bank had issued a proceeding in Rc. No. WP.15842/2004/277, dated 18.12.2004 withdrawing the letter dated 31.12.2003. Thus, the respondents have not shown any just and valid reason to deny the benefit which is rightfully due to the petitioner. 7. Learned counsel for the petitioner further submits that the respondent Bank had issued a proceeding in Rc. No. WP.15842/2004/277, dated 18.12.2004 withdrawing the letter dated 31.12.2003. By virtue of the sanction order, dated 31.12.2003, the petitioner had vested right to receive the monies sanctioned to him. The respondents in not releasing the amount towards balance service wages to the petitioner, is unjust and violative of the terms of the section 18(1) of the Industrial Disputes Act of India. The order, dated 18.12.2004 deprives the right and as such has civil consequences. Thus, any, attempt to withdraw the proceedings, dated 31.12.2003 must be preceded by a notice to the petitioner. Since this has not been done, the order, dated 18.12.2004 cannot stand the scrutiny of this Hon'ble Court. 8. Learned counsel for the petitioner further submits that the issuance of the Government Order referred in the order, dated 18.12.2004 regarding the appointment on compassionate grounds, would have no impact on the claim for compensation. The settlement contemplates permission to retire on medical invalidation and more with a view to recompense the person who is foregoing his service, compensation is paid. The entire balance of service is not taken into account for the purposes of determining the compensation payable to such an employee but is restricted to 15 months salary. Thus, the compensation contemplated therein would not have any bearing on the discontinuance of the benefit for compassionate appointment to the wards of the employees who are permitted to retire on medical invalidation. This aspect was not considered before the order, dated 18.12.2004 is passed, and as such, the same is liable to be set aside. Accordingly, prayed to allow the Writ Petition. 9. The Learned Counsel for the respondent No.3 filed counter and submits as follows. (a) That third respondent Bank is primarily a Cooperative Society registered under the A.P. Cooperative Societies Act, 1964. It has not received any finance from the State Government and except the control of the second respondent under Sec. 116A of the Act. The respondent Bank being a Cooperative Society is bound by the provisions of the A.P. Cooperative Societies Act, especially, Sec. 116 (c) which has been amended, vide Act 22/2001. It has not received any finance from the State Government and except the control of the second respondent under Sec. 116A of the Act. The respondent Bank being a Cooperative Society is bound by the provisions of the A.P. Cooperative Societies Act, especially, Sec. 116 (c) which has been amended, vide Act 22/2001. The respondent Bank is covered by the provisions of Sec. 11 of BANKING REGULATIONS ACT , 1949 as the Bank is running in losses. (b) The petitioner applied for retirement on Medical Invalidation ground on dated 08.05.2003. The respondent Bank vide orders, dated 04.06.2003 had constituted a Medical Board to look into the application of the petitioner. Upon the report of the Medical Board, the Managing Committee of the respondent Bank had accepted the petitioner’s application and the same was communicated to the petitioner on 08.12.2003 relieving him with effect from 13.06.2003. (c) In this context, the Memorandum of Settlement arrived between A.P. Cooperative Banks Association and A.P. Bank Employees Federation, Hyderabad on 15.06.1997, governs the Service Conditions of the respondent Bank. The said Memorandum of Settlement is under Sec.18 (1) of the Industrial Disputes Act, 1947 provided for compensation to an employee who becomes physically or mentally unfit while in service, shall be paid compensation equivalent to gross wages for the balance period of service, subject to maximum of 15 months. This has to be allowed when there is no request for appointment of the dependent of the employee on Medical invalidation ground. (d) Further, the guidelines of the C.C. & R.C.S. vide Circular No.62417/94 e-5, dated 23.08.1995 reads as follows: "The case of compassionate appointment in respect of Medical Invalidation grounds will also have to be made STRICTLY according to rules and subject to fulfillment of the terms and conditions stipulated, provided the employee who is retiring on Medical Invalidation should be having minimum of 5 years of balance of service on the date of such retirement" The petitioner was having left over service of only 2 years 8 months. For this reason alone, the petitioner is not eligible for compensation of 15 months as no compassionate appointment can be made for the employees seeking retirement on Medical Invalidation having less than 5 years of service. Further, appointment on compassionate grounds (death / medical invalidation), the Government has withdrawn the Scheme of compassionate appointment, vide G.O.Ms.No.202, (General Administration Services-A) Department, dated 27.04.2002. Further, appointment on compassionate grounds (death / medical invalidation), the Government has withdrawn the Scheme of compassionate appointment, vide G.O.Ms.No.202, (General Administration Services-A) Department, dated 27.04.2002. When the Government itself has withdrawn the Scheme of appointments on compassionate grounds, the petitioner could not have been eligible for compensation, as contemplated under the above Settlement dated 15.06.1997. (e) G.O.Ms.No.309, GAD, dated 04.07.1985 has been superseded by G.O. Ms.No.202 dated 27.04.2002. Proceedings in Rc.No.277/Estt/03, dated 31.12.2003 issued by the respondent Bank in pursuance of earlier proceedings in Rc.No.249/Estt/03, dated 08.12.2003 had shown balance service wages on medical invalidation for 15 months as Rs.1,92,330/-. The proceedings were subject to omissions and commissions. However, other proceedings deleting "subject to omissions and commissions" was produced by the Petitioner. After issuing the said proceedings, the then General Manager of the Bank has addressed a letter to APCOB dated 01.01.2004 to guide the Bank in the matter to take further action. Immediately, APCOB had informed the respondent Bank on 23.01.2004 stating that Medical Invalidation Scheme is not in force and hence payment of 15 months wages does not arise and advised the Bank not to affect the payment. Accordingly, the Board of Management had resolved vide Resolution No.46, not to pay the said compensation in view of clarification issued by APCOB and also as the Bank is not in a position to pay the said amount, as it is coming under Sec. 11 of the Banking Regulation Act. (f) The second Respondent vide Rc.No. 17974/04/CR.II.C, dated 09.08.2004 has advised APCOB that "no compassionate appointments are permissible. Similarly, no compensation can be given by any Bank, which is reeling under resource crunch and is covered by Sec.11 of Banking Regulation Act, 1949. The District Cooperative Officers shall also exercise caution in giving gratuitous advice infringing on the financial health of dying Institutions. It is also clarified that the DCCB, Medak, has no business in indulging the interests of farmers by giving loans, has no business to continue its existence" The NABARD in its letter No.NB/Hyd./13529.DOS.A 16/97-98 dated 20.12.97 has pointed out that the DCCB, Medak is not complying with the provisions of Sec. 11(1) of Banking Regulation Act, 1949. (g) In the above circumstances, it is to be seen that the Bank had hastily issued the order dated 31.12.2003 without going into the financial status of the Bank and without seeking any approval from APCOB. (g) In the above circumstances, it is to be seen that the Bank had hastily issued the order dated 31.12.2003 without going into the financial status of the Bank and without seeking any approval from APCOB. After issuing the said letter, wherein it is clearly mentioned that it is subject to omissions and commissions the Bank has further sought clarification from APCOB on 01.01.2004. The management of the bank in the meeting held on 22.03.2004 vide resolution no. 46 has accepted the clarification given by the APCOB and the 2 nd respondent that the petitioner is not eligible for the compensation of 15 months wages. The petitioner was informed vide letter dt.22.06.2004 that the clarification was sought from the APCOB and the 2 nd respondent, the matter will be decided after receiving the instructions. The then General Manager was suspended for the lapses committed in this regard, vide Proceedings bearing No. Admn. B / F.102 / SWC / Medak / Disc/3319 dated 13.12.2004. Further action is initiated against other staff responsible for erroneous communication of payment of compensation. In fact, if the petitioner is seen, it can be noticed that he was physically fit. (h) A Memorandum of Settlement arrived between AP Coop Banks' Association representing the managements of 22 DCCBs in the State and AP Bank Employees' Federation representing the workmen of DCCBs was entered on 15.06.1997 in terms of Sec. 18(1) of the Industrial Disputes Act. 1947. It deals with service conditions of the workmen of the 22 DCBs including pay and allowances. The said settlement is a contract and binding during the period the settlement in force. Subsequently, the APCS Act, 1964 was amended by Amending Act 22 of 2001. Amended Sec. 116(c) came into force with effect from 25.04.2001. According to the said Section, every Society is having power to fix staffing pattern, qualifications, pay scales and other allowances for its employees with approval of the Registrar of Cooperative Societies, subject to the condition that the expenditure towards pay and allowances shall not exceed 2% of the Working Capital or 30% of the Gross Profit. (i) No doubt, the settlement dated 15.06.1997 contemplates service compensation for medical invalidation, subject to a maximum of 15 months gross wages in view of the enforcement of Sec.116 (c) any provision of the settlement shall be subject to Sec.116 (c). (i) No doubt, the settlement dated 15.06.1997 contemplates service compensation for medical invalidation, subject to a maximum of 15 months gross wages in view of the enforcement of Sec.116 (c) any provision of the settlement shall be subject to Sec.116 (c). If the payment of service compensation on account of medical invalidation is not in conformity with the requirements of Sec.116 (c), it would fail and no compensation need be given as contract cannot override the law, which came into force subsequently. In such case, law should prevail. (j) Moreover, the Bank itself is in acute financial crisis for non-compliance with Sec.11 of Banking Regulation Act, 1949. Thus, alternatively, the management has every option to withhold service benefit to its workmen even though it is a part of earlier settlement and such provision does not fit in within the framework of new law, i.e., Sec. 116 (c) and subsequent financial condition of the Society. (k) The cases of Sri Bhuma Reddy, Assistant Manager, had resigned from services of the Bank on medical grounds in accordance with the Circular of second respondent bearing No.62417/94-C5, dated 23.08.1995 whereas settlement was made on 15.06.1997. With regard to Sri A. Adivappa, the Bank had taken steps to fix the responsibility and to recover the entire amount from either Sri Adivappa or from the officers who have misled the facts to the Managing Committee of the respondent Bank. (l) That the 3rd respondent in the circumstances above is not in a position to release the amount sanctioned to the petitioner and had withdrawn the letter, dated 31.12.2003 vide proceedings dated 18.12.2004 which was acknowledged by the petitioner on 21.12.2004. Hence, the petitioner is not entitled to any relief and the writ petition is liable to be dismissed. FINDINGS OF THE COURT: 10. The present Writ Petition is filed questioning the action of the respondents in not releasing the amount towards balance service wages to the petitioner. The petitioner, vide application dated 08.05.2003 sought retirement on medical invalidation ground. Accepting the petitioner’s request, the respondent Bank vide order dated 04.6.2003 had constituted a Medical Board to look into the application of the petitioner and the same was accepted for retirement on medical invalidation and the same was communicated to the petitioner also on 18.12.2003, relieving him w.e.f. 13.06.2003. 11. Accepting the petitioner’s request, the respondent Bank vide order dated 04.6.2003 had constituted a Medical Board to look into the application of the petitioner and the same was accepted for retirement on medical invalidation and the same was communicated to the petitioner also on 18.12.2003, relieving him w.e.f. 13.06.2003. 11. Learned counsel for the petitioner submits that the petitioner’s case may be considered on part with the similarly situated persons to that of the petitioner, i.e. one Sri K. Bhooma Reddy, Assistant Manager had retired on medical invalidation during 2000 and another Shri A. Adivappa who also retired in 2001-02 on similar grounds with 10 months of service left, were paid compensation during the same point of time in spite of the fact that the Bank at the relevant point of time was covered by the provisions of Section 11 of the Banking Regulation Act. The respondents made it clear that the cases of Sri Bhuma Reddy, Assistant Manager, had resigned from services of the Bank on medical grounds in accordance with the Circular of second respondent bearing No.62417/94-C5, dated 23.08.1995 whereas settlement was made on 15.06.1997. With regard to Sri A. Adivappa, the Bank had taken steps to fix the responsibility and to recover the entire amount from either Sri Adivappa or from the officers who have misled the facts to the Managing Committee of the respondent Bank. 12. As per respondents, a Memorandum of Settlement arrived between A.P. Cooperative Banks Association and A.P. Bank Employees Federation, Hyderabad on 15.06.1997, which governs the Service Conditions of the respondent Bank. The said Memorandum of Settlement is under Sec.18(1) of the Industrial Disputes Act, 1947 provided for compensation to an employee who becomes physically or mentally unfit while in service, shall be paid compensation equivalent to gross wages for the balance period of service, subject to maximum of 15 months. This has to be allowed when there is no request for appointment of the dependent of the employee on Medical invalidation ground. 13. Further, as per respondents, the appointment on compassionate grounds (death/medical invalidation), the Government has withdrawn the Scheme of compassionate appointment, vide G.O.Ms.No.202, (General Administration Services-A) Department, dated 27.04.2002. When the Government itself has withdrawn the Scheme of appointments on compassionate grounds, the petitioner is not entitled for compensation as contemplated under the above Settlement dated 15.06.1997. 14. 13. Further, as per respondents, the appointment on compassionate grounds (death/medical invalidation), the Government has withdrawn the Scheme of compassionate appointment, vide G.O.Ms.No.202, (General Administration Services-A) Department, dated 27.04.2002. When the Government itself has withdrawn the Scheme of appointments on compassionate grounds, the petitioner is not entitled for compensation as contemplated under the above Settlement dated 15.06.1997. 14. A Memorandum of Settlement arrived between AP Coop Banks' Association representing the managements of 22 DCCBs in the State and AP Bank Employees' Federation representing the workmen of DCCBs was entered on 15.06.1997 in terms of Sec.18(1) of the Industrial Disputes Act. 1947. The settlement, dated 15.06.1997 contemplates service compensation for medical invalidation; subject to a maximum of 15 months gross wages in view of the enforcement of Sec.116 (c) any provision of the settlement shall be subject to Sec.116(c). If the payment of service compensation on account of medical invalidation is not in conformity with the requirements of Sec.116 (c), it would fail and no compensation need be given as contract cannot override the law, which came into force subsequently. In such case, law should prevail. As per respondents, the Bank itself is in acute financial crisis for non-compliance with Sec.11 of Banking Regulation Act, 1949. Thus, alternatively, the management has every option to withhold service benefit to its workmen even though it is a part of earlier settlement and such provision does not fit in within the framework of new law, i.e., Sec. 116 (c) and subsequent financial condition of the Society. 15. As per respondents, G.O.Ms.No.309, GAD, dated 04.07.1985 has been superseded by G.O. Ms.No.202 dated 27.04.2002. Proceedings in Rc.No.277/Estt/03, dated 31.12.2003 issued by the respondent Bank in pursuance of earlier proceedings in Rc.No.249/Estt/03, dated 08.12.2003 had shown balance service wages on medical invalidation for 15 months as Rs.1,92,330/-. After issuing the said proceedings, the then General Manager of the Bank has addressed a letter to APCOB, dated 01.01.2004 to guide the Bank in the matter to take further action. The APCOB had informed the respondent Bank on 23.01.2004 stating that Medical Invalidation Scheme is not in force and hence payment of 15 months wages does not arise and advised the Bank not to effect the payment. The APCOB had informed the respondent Bank on 23.01.2004 stating that Medical Invalidation Scheme is not in force and hence payment of 15 months wages does not arise and advised the Bank not to effect the payment. Accordingly, the Board of Management had resolved vide Resolution No.46, not to pay the said compensation in view of clarification issued by APCOB and also as the Bank is not in a position to pay the said amount, as it is coming under Sec.11 of the Banking Regulation Act. In view of the aforesaid reasons, the 3rd respondent Bank could not release the amount sanctioned to the petitioner and had withdrawn the letter, dated 31.12.2003 vide proceedings dated 18.12.2004 which was acknowledged by the petitioner on 21.12.2004. 16. The second Respondent vide Rc.No. 17974/04/CR.II.C, dated 09.08.2004 has advised APCOB that no compassionate appointments are permissible. Similarly, no compensation can be given by any Bank, which is reeling under resource crunch and is covered by Sec.11 of Banking Regulation Act, 1949. The District Cooperative Officers shall also exercise caution in giving gratuitous advice infringing on the financial health of dying Institutions. It is also clarified that the DCCB, Medak, has no business in indulging the interests of farmers by giving loans, has no business to continue its existence. The Bank had issued the order, dated 31.12.2003 without going into the financial status of the Bank and without seeking any approval from APCOB. After issuing the said letter, wherein it is clearly mentioned that it is subject to omissions and commissions, as such, the Bank has further sought clarification from APCOB on 01.01.2004. The management of the bank on 22.03.2004 vide resolution No. 46 has accepted the clarification given by the APCOB and the 2 nd respondent that the petitioner is not eligible for the compensation of 15 months wages. The petitioner was informed vide letter dt.22.06.2004 that the clarification was sought from the APCOB and the 2nd respondent; the matter will be decided after receiving the instructions. The then General Manager was suspended for the lapses committed in this regard. Further action is initiated against other staff responsible for erroneous communication of payment of compensation. 17. The petitioner was informed vide letter dt.22.06.2004 that the clarification was sought from the APCOB and the 2nd respondent; the matter will be decided after receiving the instructions. The then General Manager was suspended for the lapses committed in this regard. Further action is initiated against other staff responsible for erroneous communication of payment of compensation. 17. It is not out of place to mention that the then Manager of the 3 rd respondent Bank had issued the order, dated 31.12.2003 without going into the financial status of the Bank and without seeking any approval from APCOB, for which, the Bank has taken suitable action against him and his staff. For the irregularities committed by the staff of the Bank, the liability cannot be fastened on the Bank to pay compensation to the petitioner. This is the case of 2004. The scheme itself was withdrawn in the year 2003. Moreover, petitioner also acknowledged the same without protest. Now, we are in 2025. One reason or the other, the said scheme is no more now. Once the scheme was withdrawn long back, it cannot be looked into. Persons who issued the letter without permission of the higher authority, were also punished. In any angle, this case cannot be considered. In the said circumstances, this Court is not inclined to interfere with the decision arrived at by the authorities. 18. In view of foregoing discussion, this Court is of the considered view that the petitioner is not entitled to the relief as prayed for, and the Writ Petition is liable to be dismissed. 19. Accordingly, the Writ Petition is dismissed. There shall be no order as to costs. Miscellaneous petitions, if any, pending in this Writ Petition, shall stand closed.