Thedavoor Primary AgriculturalBank Ltd (2635) v. Registrar of Co-operative Societies

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:31-10-2007CORAMTHE HON'BLE MR.JUSTICE K. CHANDRUWRIT PETITION NO:11877 of 1998Thedavoor Primary AgriculturalBank Ltd (2635) rep by itsPresident T A ThangaveluThedavoor, Salem District .... Petitionervs1. Registrar of Co-operative Societies, NVN Maligai, Chennai-102. Deputy Registrar of Co-operative Societies, Attur Range, Attur Salem District3. Special Officer, Salem District Central Co-operative Bank Ltd Salem.... RespondentsWrit Petition filed under Article 226 of the Constitution ofIndia praying this Court to issue Writ of Certiorari to call forthe records of the 2nd respondent dated 24.7.1998 and made in Na KaNo.7861/97 Ve Se Sa and the consequential order of the thirdrespondent dt 31.7.1998 and made in Na Ka No.1501/98 A-15 and quashthe order of the second and third respondent as illegal.For petitioner:Mr.G. RavishankarFor 1st respondent :MsBhavani Subbarayan, AGPFor 3rd respondent:Mr.M.R. RaghavanORDERThe petitioner is the President of the petitioner society andthe Society had entered into a Settlement under Section 12(3) ofthe Industrial Disputes Act, 1947 [for short,'I.D. Act'] regardingwages of the employees. The action of the then Board ofDirectors entering into the Settlement was questioned by theauthorities of the Co-operative Department and also refused toimplement the Settlement. They have come up before this Court witha prayer for direction that the Settlement cannot be interferedwith by any authority of the Department. https://hcservices.ecourts.gov.in/hcservices/

2. I have heard the learned counsel for the petitioner and thelearned Additional Government Pleader for the 1st respondent andMr.M.Raghavan for the 3rd respondent.3. The prayer in this writ petition is misconceived in thelight of the Larger Bench decision of this Court reported in 2006(4) C.T.C. 689 [K.Marappan v. District Registrar of Co-operativeSocieties, Namakkal] and, therefore, the writ petitions is notmaintainable.4.However, learned counsel for the petitioner relies uponthe judgment of this Court made in W.P. No.7370 of 2004disposed on05.11.2004, wherein such an interference with the Settlementarrived at under Section 12(3) of the I.D. Act was made by thelearned Judge of this Court. During the course of argument, thelearned counsel placed heavy reliance upon the judgment of thisCourt in W.P. No.3572 of 1997, disposed on 20.11.2006. In bothcases, the subsequent pronouncement of the Division Bench reportedin 2002 (4) C.T.C. 385 [L.Justine and another v. Registrar ofCo-operative Societies, Chennai] were not referred to. 5.On the contrary, the decision cited by the learnedcounsel reported in 1992 (1) L.L.J. 747 [TiruchirapalliHirudayapuram Coop. Bank Employees Union, etc. v. Jt. Registarof Coop. Societies, Tiruchirapalli, etc.] came to be doubted byanother learned Judge of this Court in a batch of writ petitionsand P.Shanmugam, J. dismissed the writ petitions on the ground thatif the Settlement does not conform to the norms fixed by theRegistrar and the order by the Registrar is not followed and,therefore, there is no obligation for the Society to honour thesaid Settlement. In those cases, even if there is any refusal tohonour the said Settlement, the course open to the workman is toraise a dispute and establish the legal entitlement to claim underthe said Settlement. The learned Judge disagreed with theproposition laid down in the decision reported in 1992 (1) L.L.J.747 (cited supra). He also held that in the context of theemployees and the Management indiscriminately raising the wages ofworkmen without reference to the financial loss and the directionsissued by the Registrar and the Government, the circumstanceswarranted in granting such judgment. The learned Judge also notedthat Rule 149 of the Tamil Nadu Co-operative Societies Rulesenables the Society to have an approved bye-law relating to serviceconditions and that rule as having come into force from the year1995, any service condition of the employees must be made only interms of the bye-laws framed thereunder and as approved by thecompetent authority and to that extent, the power of the employeesto negotiate and arrive at the Settlement stand excluded. The writappeals against the said order in a batch of writ petitions, werealso came to be dismissed along with the Justine's case (citedsupra) and the same has become final. Therefore, there is noscope for the petitioner now to contend on the basis of twounreported decisions, which undoubtedly had not taken note of thesubsequent development of law in which these issues were squarelyanswered by a learned Judge and appeals were also dismissed. https://hcservices.ecourts.gov.in/hcservices/

6.Be that as may be. The Supreme Court in a recentdecision reported in JT 2007 (2) SC 566 [Ghaziabad Zilla SahkariBank Ltd. v. Additional Labour Commissioner and others] dealtwith a similar question arising out of the U.P. Co-operativeSocieties Act viz-a-vi U.P. Industrial Disputes Act. In thatcontext, the following passage found in paragraphs 66 to 68 of thejudgment of the Supreme Court can be usefully reproduced below:Para 66:“The ALC, in law is not competent to declare thestatutory order of the Registrar, CS, under Section128 of the CS Act to be 'not proper' and thereby todisregard the same. An order under Section 128 isfinal and binding and cannot be questioned in anylaw in view of Section 102 and even otherwise ongeneral principles of law, an authority under theUPID Act cannot ignore or wish away the statutoryconsequences of the statutory order passed by theRegistrar under Sections 128, 102 etc. of the UP Co-operative Societies Act.Para 67:Also the Registrar's directions and order dated07.3.2001, 19.3.2001 and 22.6.2001 requiring BOD toreconsider its (offending) resolutions and finallyannulling the same in exercise of his powers underSection 128 are statutory in nature. They arestill valid and occupy the field. They becomefinal and binding under Section 102 in because, noappeal was filed under Section 98 of the CS Act andno arbitration reference was made under Sections 70and 71 of the CS Act.Para 68:The ALC and the High Court wrongly appreciated theSecretary's functions and procedure under Rule 130as subsisting rather than merely supplementing theChairman's power and procedure, including suo motupower and procedure, under Section128 of the Actread with Rule 131...”Also, the passage found in paragraph 76 reads as follows:Para 76:“The present dispute does not relate to said Act,1947 but it is related to the provisions containedunder the Societies Act, 1965 as well as where acircular issued by the Registrar of CooperativeSocieties and more specifically Regulation 42 ofService Rules, 1975. Therefore, in our opinion,the private settlement made on 21.3.2001 does notfall under 6H(1) of the U.P. Act, 1947. In otherwords, the payment of exgratia is an incentive foran employee for his good work. Therefore, it isgoverned by Regulation 42(2) that any cooperativesociety may also grant pecuniary incentive only withthe prior permission of the Registrar to anyemployee or a class of employees for outstandingperformance. It clearly provides that for payment https://hcservices.ecourts.gov.in/hcservices/ of ex-gratia, permission of the Registrar is must.Regulation 42 is itself very clear and is not inconflict with any of the provisions of the U.P. Act,1947. The respondents themselves admitted in theircounter affidavit that the settlement was notentered into during conciliation proceeding.Therefore, the said private settlement could nothave been legally enforced being an invalidsettlement. No private settlement can give alegal enforceable right. It is wrong to suggestthat payment of ex-gratia amount to the employeesover and above their salary is the matter of U.P.Act, 1947. It is very clear and there is specialprovision in Rule 42 to the Service Rules, 1975.The cooperative society is a State Governmentsubject and every State Government has right to makelaws in their respective States and there aredifferent cooperative societies Acts in differentStates.”7.In the light of the above, the writ petition fails andthe same shall stand dismissed. However, there will be no orderas to costs. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.srTo1. The Registrar of Co-operative Societies, NVN Maligai, Chennai-102. The Deputy Registrar of Co-operative Societies, Attur Range, Attur Salem District3. The Special Officer, Salem District Central Co-operative Bank Ltd Salem W.P.No.11877/1998VC (CO)kk 20/11