HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved on 19.02.2014 Delivered on 17.09.2014 Court No. - 34 Case :- WRIT - C No. - 33548 of 2001 Petitioner :- [ENTITY] Respondent :- Prescribed Authority under The Payment Of Wages Act 1936 & Ors. Counsel for Petitioner :- [ENTITY] Counsel for Respondent :- [ENTITY],[ENTITY] Along with Case :- WRIT - C No. - 33579 of 2001 Petitioner :- [ENTITY] Respondent :- Prescribed Authority Under The Payment Of Wages Act 1936 & Ors. Counsel for Petitioner :- [ENTITY] Counsel for Respondent :- [ENTITY] Maurya, [ENTITY], [ENTITY] Hon'ble [ENTITY],J.
1. Heard Sri [ENTITY], learned counsel for the petitioner, Sri [ENTITY], learned counsel for the respondents, and perused the record.
2. In both these matters, common question involved is, whether Prescribed Authority, under [ACT] (hereinafter referred to as "[ACT]") has jurisdiction to entertain claim of an employee of a Co-operative Society or whether remedy to such an employee lie only under [SECTION] of [ACT] (hereinafter referred to as "[ACT]") and not under any labour law. In other words, whether [ACT] and mode of adjudication of dispute provided therein are available for redressal of grievance to the employees of a Co-operative Society.
3. Before entering into the controversy on merits, I may place on record brief facts for better understanding of the matter.
4. In [CASE NUMBER] (hereinafter referred to as "first petition") one [ENTITY], an employee of Sikta Mahoogarh Sadhan Sahkari Samiti Limited, Sikta, Post Office Pawanri Kalan-Halia, District Mirzapur (hereinafter referred to as "co-operative society") filed an application under [SECTION] of [ACT] read with [SECTION] of [ACT] (hereinafter referred to as "Act, 1962") and [SECTION] of [ACT], before Prescribed Authority, alleging that his wages have not been paid wrongfully for certain period i.e. from 01.01.1994 to 31.7.1995, which collectively amount to Rs.31,639.86 and, therefore, the aforesaid amount be directed to be paid along with compensation to the extent of 10 times of unauthorized non payment/illegal deduction. The Co-operative Society filed objection/written statement contesting the application and said that application was not maintainable under [ACT].
5. The Prescribed Authority vide order dated 31.8.1998 has held that employee was entitled for payment of Rs.31639.86 towards unauthorized deduction and 10 times sum towards compensation. It, accordingly, directed co-operative society to pay Rs.3,48,838.46 to the employee, [ENTITY]. With respect to applicability of [ACT] Prescribed Authority has relied on a decision of Rajasthan High Court in The [PRECEDENT] to hold that cooperative society is a shop and commercial establishment under Act, 1962 and therefore, [ACT] is applicable thereupon and that is how it also comes within the jurisdiction of [ACT]. The order dated 31.8.1998 of Prescribed Authority is under challenge in the first writ petition.
6. The [CASE NUMBER] (hereinafter referred to as "second petition") also relates to the same parties and claim for wages set up by [ENTITY], the employee of Cooperative Society, relates to the period 1.8.1995 to 31.7.1996. All other facts are same except that order of Prescribed Authority is dated 16.01.2001 whereby it has allowed payment of Rs.22,744.62 towards unauthorized deduction and twice the amount as compensation i.e. Rs.45,489.24, total of which comes to Rs.68,233.86.
7. In my view, the matter is now covered by the judgment of Apex court in [PRECEDENT] and, therefore, it would not be necessary to delve into various provisions of [ACT] or [ACT]. The matter can be examined from the angle of [SECTION] and [SECTION] of [ACT] and the decision of Apex Court in the above case.
8. [SECTION] and [SECTION] of [ACT] reads as under:
"70. Disputes which may be referred to arbitration. (1) Notwithstanding anything contained in any law for the time being in force, if any dispute relating to the constitution, management or business of a co-operative society other than a dispute regarding disciplinary action taken against a paid servant of a society arises :-
(a) among members, past members and person claiming through members, past members and deceased members ; or
(b) between a member, past member or any person claiming through a member , past member or deceased member, and the society, its committee of management or any officer, agent or employee of the society, including any past officer, agent or employee; or
(c) between the society or its committee and any past committee, any officer, agent or employee or any past officer, past agent or past employee or the nominee, heir or legal representative of any deceased-officer, deceased agent or deceased employee of the society ; or
(d) between a co-operative society and any other co-operative society or societies;
such disputes shall be referred to the Registrar for action in accordance with the provisions of this Act and the rules and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of any such dispute:
Provided that a dispute relating to an election under the provisions of this Act or rules made thereunder shall not be referred to the Registrar until after the declaration of the result of such election.
(2) For the purpose of sub-section (1), the following shall be deemed to be included in dispute relating to the constitution, management or the business of a co-operative society, namely-
(a) claims for amounts due when a demand for payment is made and is either refused or not complied with whether such claims are admitted or not by the opposite party;
(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor or whether such debt or demand is admitted or not;
(c) a claim by a society for any loss caused to it by a member, officer, agent or employee including past or deceased member, officer, agent, or employee whether individually or collectively and whether such loss be admitted or not; and
(d) all matter relating to the objects of the society mentioned in the bye-laws as also those relating to the election of office bearers.
(3) If any question arises whether a dispute referred to the Registrar under this Section is a dispute relating to the constitution, management or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any Court." (emphasis added)
[SECTION]. Certain Acts not to apply to co-operative societies.- The provisions contained in the [ACT], and the [ACT], shall not apply to Co-operative Societies."
9. [SECTION] of [ACT] has not been enforced till date.
10. In Ghaziabad Zila Sahkari Bank (supra), the dispute came up for consideration whether the dispute relating to service matter of an employee and employer, which is a Cooperative Society, can be raised under the provisions of [ACT] (hereinafter referred to as "[ACT]") or [ACT] (hereinafter referred to as "[ACT]"). The Court, in para 36 of the judgment, noticed submission as under :
"It was submitted by learned senior counsel that, The [ACT] has been enacted to further the Cooperative movement in the State of U.P. and for providing for functions and responsibilities of Cooperative Societies and the authorities invested with their supervision, guidance and control. Thus the objects and reasons for the enactment of the said Act is not to regulate the service conditions of the employees of the cooperative societies and the Act only incidentally provides [SECTION] & [SECTION] to regulate the terms and conditions of all employees of the Cooperative Societies, Officers, Supervisors and other employees. It was submitted that only those employees who are not covered by the provisions of the [ACT] would fall within the ambit of [SECTION] and [SECTION] of the [ACT]. On the other hand, the [ACT] has been held to be a special statute in matters of settlement of Industrial disputes arising out of the terms and conditions of service of employees who fall within the definition of workmen, provided they are employed in establishments covered by the said Act. In regard to various establishments which have their own services rules, the [ACT] will still apply to workmen employed therein. Learned senior counsel cited various decisions of this Court in the case of [PRECEDENT], [PRECEDENT], [PRECEDENT] and [PRECEDENT] in support of this contention." (emphasis added)
11. Thereafter the Court also considered whether dispute relating to service conditions of employee of Co-operative Societies would be governed by [SECTION] or not, which was specifically raised in para 39 of judgment, and further elaborated in para 40 and 41 as under:
"41. This is further strengthened by [SECTION] which provides that if the Resolution is not covered by [SECTION] then it becomes operative immediately.
Application of Labour Laws
42. The learned senior counsel submitted that the legislature has specifically provided in the provisions of the [ACT] itself that the Labour Laws will apply to the employees of the cooperative societies, in [SECTION] and in non-enforcement of [SECTION]. The fact that [SECTION] has not been brought into force indicates clearly that (a) in order to exclude Labour laws there must be statutory exclusion (b) failing such an exclusion Labour Law will apply. In this case, there is a fact that an exclusion however under [SECTION] has not been brought into force."
12. Thereafter, non-enforcement of [SECTION] was also considered from para 42 and onwards and in para 56, 61, 62 and 65, the Court said as under:
"56. The present dispute is not "any dispute relating to the constitution, management or the business of a cooperative society" and, therefore, the machinery provided in [SECTION] or [SECTION] of the [ACT] would not be available to the employees of the Bank to enforce the settlement."
"61. The general legal principle in interpretation of statutes is that 'the general Act should lead to the special Act'. Upon this general principle of law, the intention of the U.P legislature is clear, that the special enactment [ACT] alone should apply in the matter of employment of Co-operative Societies to the exclusion of all other Labour Laws. It is a complete code in itself as regards employment in co-operative societies and its machinery and provisions. The general Act the [ACT] as a whole has and can have no applicability and stands excluded after the enforcement of the [ACT]. This is also clear from necessary implication that the legislature could not have intended 'head-on-conflict and collision' between authorities under different Acts. In this regard reference can be made to [PRECEDENT]. [PRECEDENT] where this Court observed that:
"Applying these tests, we have no doubt at all that the dispute covered by the first issue referred to the Industrial Tribunal in the present cases could not possibly be referred for decision to the Registrar under [SECTION] of the Act. The dispute related to alteration of a number of conditions of service of the workmen which relief could only be granted by an Industrial Tribunal dealing with an industrial dispute. The Registrar, it is clear from the provisions of the Act, could not possibly have granted the reliefs claimed under this issue because of the limitations placed on his powers in the Act itself. It is true that [SECTION] by itself does not contain any clear indication that the Registrar cannot entertain a dispute relating to alteration of conditions of service of the employees of a registered society; but the meaning given to the expression "touching the business of the society", in our opinion, makes it very doubtful whether a dispute in respect of alteration of conditions of service can be held to be covered by this expression. Since the word "business" is equated with the actual trading or commercial or other similar business activity of the society, and since it has been held that it would be difficult to subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects, such as laying down the conditions of service of its employees, can be said to be a part of its business, it would appear that a dispute relating to conditions of service of the workmen employed by the society cannot be held to be a dispute touching the business of the society. Further, the position is clarified by the provisions of [SECTION] of the Act which limit the power to be exercised by the Registrar, when dealing with a dispute referred to him under [SECTION], by a mandate that he shall decide the dispute in accordance with the provisions of the Act and the Rules and bye-laws. On the face of it, the provisions of the Act, the rules and the bye-laws could not possibly permit the Registrar to change conditions of service of the workmen employed by the society. For the purpose of bringing facts to our notice in the present appeals, the Rules framed by the Andhra Pradesh Government under the Act, and the bye-laws of one of the appellant Banks have been placed on the Paper-books of the appeals before us. It appears from them that the conditions of service of the employees of the Bank have all been laid down by framing special bye-laws. Most of the conditions of service, which the workmen want to be altered to their benefit, have thus been laid down by the bye-laws, so that any alteration in those conditions of service will necessarily require a change in the bye-laws. Such a change could not possibly be directed by the Registrar when, under [SECTION] of the Act, he is specifically required to decide the dispute referred to him in accordance with the provisions of the bye-laws. It may also be noticed that a dispute referred to the Registrar under [SECTION] of the Act can even be transferred for disposal to a person who may have been invested by the Government with powers in that behalf, or may be referred for disposal to an arbitrator by the Registrar. Such person or arbitrator, when deciding the dispute, will also be governed by the mandate in [SECTION] of the Act, so that he will also be bound to reject the claim of the workmen which is nothing else than a request for alteration of conditions of service contained in the bye-laws. It is thus clear that, in respect of the dispute relating to alteration of various conditions of service, the Registrar or other person dealing with it under [SECTION] of the Act is not competent to grant the relief claimed by the workmen at all. On the principle laid down by this Court in [PRECEDENT], therefore, it must be held that this dispute is not a dispute covered by the provisions of [SECTION] of the Act. Such a dispute is not contemplated to be dealt with under [SECTION] of the Act and must, therefore, be held to be outside the scope of [SECTION].
62. Further this Court observed in [PRECEDENT] that:
"3 He also places reliance on [SECTION] of the [ACT] which states that nothing contained in the [ACT], the [ACT] and the [ACT] shall apply to a Society registered under this Act. By necessary implication, application of the Act has not been excluded and that, therefore, the Labour Court has jurisdiction to decide the matter. We find no force in the contention. [SECTION] of the [ACT] gives power to the Registrar to deal with disciplinary matters relating to the employees in the Society or a class of Societies including the terms and conditions of employment of the employees. Where a dispute relates to the terms of employment, working conditions, disciplinary action taken by a Society, or arises between a Society and its employees, the Registrar or any officer appointed by him, not below the rank of Assistant Registrar, shall decide the dispute and his decision shall be binding on the society and its employees. As regards power under [SECTION], the language is very wide, viz., "Notwithstanding anything contained in any other law for the time being in force any dispute touching the constitution, management or business of a Society or the liquidation of a Society shall be referred to the Registry by any of the parties to the dispute." Therefore, the dispute relating to the management or business of the Society is very comprehensive as repeatedly held by this Court. As a consequence, special procedure has been provided under this Act. Necessarily, reference under [SECTION] of the [ACT] stands excluded. The judgment of this Court arising under [ACT] has no application to the facts for the reason that under that Act the dispute did not cover the dismissal of the servants of the society for which the Act therein was amended."
Similar view was taken by this Court in [PRECEDENT], [PRECEDENT], [PRECEDENT] and [PRECEDENT]."
"65. We are therefore of the view that the Asst. Labour Commissioner (ALC)'s jurisdiction was wrongly invoked and his order dated 15.03.2003 under [SECTION], [ACT] is without jurisdiction and hence null and void and it can be observed that, in view of the said general legal principle, it is immaterial whether or not the government has enforced [SECTION] ([ACT] because, in any case the said provision ([SECTION] had been included in the Act only by way of clarification and abundant caution."
(emphasis added)
13. It is clear from above judgement that even a dispute relating to service conditions of an employee of Co-operative Society would be governed by provisions of [ACT] and [ACT] or [ACT] would have no application despite [SECTION] has not been enforced.
14. A Division Bench of this Court (in which I was also a member) in [CASE NUMBER] ([PRECEDENT] and other connected matters decided on 19.12.2008 referring to the Apex Court decision in Ghaziabad Zila Sahkari Bank (supra) observed as under:
"It is said that [SECTION] has not been enforced so far but the question as to whether despite of non-enforcement of [SECTION] of 1965 Act, the [ACT] or [ACT] would apply to the employees of a cooperative society governed by the provisions of 1965 Act and the rules and regulations framed thereunder came to be considered in [PRECEDENT] and it was held that [SECTION] has been added only by way of clarification and abundant caution and, therefore, where the provisions are contained in 1965 Act, the labour laws and in particular the [ACT] would not be applicable. It is also said that 1965 Act alone would apply in the matter of employment of cooperative societies to the exclusion of all other laws since it is a complete code in itself as regards employment in cooperative societies and its machinery etc. In para 78 of the judgement the Apex Court held:
"It is relevant to mention here that the services of the employees of the Bank are governed by service regulations 1975 framed under the Act of 1965, which provides complete machinery and adjudication. Moreover, the provisions under [SECTION] of the [ACT] is elaborate in this regard, which provides complete machinery that if there is any dispute between the employers and the employees of the Cooperative Society, the matter shall be referred to the Arbitrator as provided under [SECTION] of the [ACT]. [SECTION] of the [ACT] and [SECTION] of the [ACT] are pari materia and this Court in the matter of [PRECEDENT] held that Labour Court and Industrial Laws are not applicable where complete machinery has been provided under the provisions of the [ACT] and in such view of the matter the Ld. Additional Labour Commissioner U.P. has no jurisdiction to pass orders in the nature it has been passed." (emphasis added)
15. The term "Labour laws" includes not only the [ACT] or [ACT] but all other legislations dealing with labour dispute. Learned counsel for the parties did not dispute this fact that [ACT] and Act 1962, all will come within the term "Labour Laws".
16. In view of the decision of Apex Court in Ghaziabad Zila Sahkari Bank (supra), decision of Rajasthan High Court, relied on by Prescribed Authority, in my view, cannot said to be a validly operating authority on the issue.
17. On behalf of respondent, reliance has been placed on a Division Bench judgment of this Court in [PRECEDENT], but there question up for consideration before the Court was, whether Prescribed Authority under [ACT] is a "Court" within the meaning of [SECTION] of [ACT], which was answered in negative. In my view, the aforesaid judgment does not help the respondent no.2 in any manner in view of decision of Apex Court in Ghaziabad Zila Sahkari Bank (supra) and the issue raised before this Court.
18. Counsel for the respondent relied on another decision of learned Single Judge (Hon'ble [ENTITY] J as His Lordship then was) in [PRECEDENT], which is a short decision and it only says that in view of [SECTION] of [ACT], the same is not applicable to cooperative societies and remedy lies under [ACT]. But the observation that remedy lies under [ACT] cannot said to be true now in view of the Apex Court decision in Ghaziabad Zila Sahkari Bank (supra) whereby it has been held that Labour Laws are not applicable to cooperative societies.
19. Be that as it may, I am clearly of the opinion that issue in question stands covered by judgment of Apex Court in Ghaziabad Zila Sahkari Bank (supra) and therefore, since no Labour Laws would be applicable in respect to service dispute of an employee and cooperative society inter se, Prescribed Authority, under [ACT], had no jurisdiction to entertain an application under [SECTION] and therefore, impugned orders are patently illegal and without jurisdiction.
20. In the result, both the writ petitions are allowed. The orders dated 31.8.1998 and 16.01.2001, impugned in first and second petition respectively, are hereby quashed.
21. There shall be no order as to costs.
Order Date :- 17.9.2014 KA