1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7546 OF 2011 Co-operative Bank’s Employees Union, Ratnagiri .. Petitioner V/s Dapoli Urban Co-operative Bank Ltd., Dapoli, District Ratnagiri & Anr. .. Respondents Mr.M.S.Topkar for the petitioner. Mr.Rakesh Bhatkar for the Respondents. CORAM: R.G.KETKAR, J. DATE: 13th October, 2011. P.C.: 1. Heard Mr.M.S.Topkar, learned counsel for the petitioner and Mr.Rakesh Bhatkar, learned counsel for the Respondents. Rule. Mr.Bhatkar waives service on behalf of the Respondents. By consent of the parties, Rule is made returnable forthwith and is heard finally. 2. By this petition, the petitioner has challenged the judgment and order dated 26.08.2011 passed by the learned Member, Industrial Court, Kolhapur in the Revision Application (IC) 1/2011. By that order, the Industrial Court allowed the revision application preferred by the Respondents and set aside the judgment and order dated 03.02.2011 passed by the learned Judge of the Labour 2 Court Ratnagiri below Exhibit U-2 in the application (B.I.R.) No. 1/2010. The facts giving rise to the filing of the present writ petition, briefly stated are as under:- 3. The petitioner is a representative and approved union for the banking industry in all the local area i.e.Talukas of the Ratnagiri District under the provisions of the Bombay Industrial Relations Act, 1946 (for short “the Act”). The 1st Respondent Bank is an undertaking in the Banking Industry and is functioning in various Talukas of Ratnagiri District. The petitioner is a sole bargaining agent for the Respondent undertaking. 4. On 31.07.2010 the 1st Respondent issued advertisement inviting applications for one post of Chief Executive Officer, 4 posts of officers and 6 posts of clerks. The last date for submitting applications was 14.08.2010. It is the case of the petitioner that the 1st Respondent was indulging in indiscreet recruitment, which affected the rights of the employees by giving haphazard and arbitrary promotions to the ineligible persons. Accordingly, on 06.08.2010 the petitioner issued notice of change in the form “L” under Section 42(2) of the Act and demanded fixation of ‘staffing pattern’ as also formulation of the recruitment and promotion 3 policy. Since there was no positive response from the 1st Respondent, on 16.08.2010 the petitioner moved conciliation machinery under the Act by issuing the notice under Form ‘N’ to the Conciliator. It is the case of the petitioner that despite pendency of this matter before the Conciliator, the 1st Respondent intended to proceed with the recruitment as per the advertisement dated 31.07.2010. The 1st Respondent cannot act in breach of Section 42 of the Act indulging in recruiting the employees when the matter was pending before the Conciliator. The said act of the 1st Respondent amounts to illegal change. It is in these circumstances, the petitioner approached the Labour Court, Ratnagiri with an application under section 78 (1) A(c) read with Section 79 of the Act. In that application, it was contended that the act of the 1st Respondent is of ‘illegal change’ and sought declaration to that effect. It was pointed out therein that the 1st Respondent was habituated to such illegal change, and since when the petitioner gave notice, the 1st Respondent had given unilateral rise in the wages to the employees by entering into individual agreements with the employees. The petitioner had issued notice of change demanding revision of pay-scales and 4 amelioration of other service conditions, which demands are still pending before the Wage Board for Banking Industry. It was further contended in that application that the appointment of singular person amounts to permanent or semi permanent increase in the number of persons employed or to be employed, and the same, if done without notice of change under Section 42(1) of the Act, amounts to illegal change. The petitioner therefore sought declaration that such change effected or to be effected by the 1st Respondent be declared as illegal change and the 1st Respondent be directed to withdraw the same. 5. On 09.08.2010 the petitioner filed application for interim relief under Section 119D and Section 78(1) C(a) of the Act praying for direction to the 1st Respondent to temporarily withdraw the illegal change that is complained of and for injunction restraining the Respondents from appointing / recruiting any persons on the posts as per the advertisement published in daily newspaper “Ratnagiri Times” dated 31.07.2010 or by any other manner. 6. The Respondents filed their reply dated 15.11.2010. It was contended therein that no employee is the member of the petitioner, and that the Bank had given wage rise after discussing 5 10 employees who have been appointed as the representatives. It is the case of the 1st Respondent that there was no complaint from its employees and hence the petitioner union cannot make grievance about the wage rise. The 1st Respondent further contended that it had not effected any illegal change and is functioning as per the guidelines laid down by the Reserve Bank of India (R.B.I.) and the Co-operative Department. It was further asserted that the ‘staffing pattern’ exists in the 1st Respondent as also the number of posts are fixed. The 1st Respondent has not recruited persons in excess or unnecessarily. The 1st Respondent has to follow the guidelines issued by the Reserve Bank of India, and as per the staffing pattern, has to recruit the employees at the time of opening of new branch. The 1st Respondent is entitled to recruit employees after taking written and oral examination. The 1st Respondent has prepared the staffing pattern as per the guidelines of R.B.I.and the Co-operative Department and the 1st Respondent is acting as per those instructions while recruiting and promoting the persons. 7. By judgment and order dated 03.02.2011 the learned Judge of the Labour Court allowed the application at Exhibit U-2 made by the 6 petitioner and temporarily restrained the Respondents from appointing / recruiting any person on the posts as per the advertisement published in daily newspaper “Ratnagiri Times” dated 31.07.2010 till final disposal of the main application. 8. Aggrieved by this decision, the Respondents preferred revision application before the Industrial Court at Kolhapur. By the impugned judgment and order, the Industrial Court allowed the revision application and set aside the order dated 03.02.2010 passed by the Labour Court. It is against this order the petitioner has instituted the present petition. 9. In support of this petition, Mr.Topkar contended that the Industrial Court committed serious error in interfering with the order passed by the Labour Court. The Labour Court allowed the application filed by the petitioner by exercising the discretion judicially, and without any just or legal ground the Industrial Court interfered with the discretion exercised by the Labour Court. This is more so when the limited jurisdiction is conferred upon the Industrial Court under section 85 of the Act. The Industrial Court has not properly appreciated the provisions of the Act and in particular Section 42, 46 and 78 read with Item No.2 7 of Schedule II. He further invited my attention to the Circular dated 17th March, 2011 issued by the Commissioner of Co- operation and Registrar of Co-operative Societies, Maharashtra State, Pune, sanctioning the staffing pattern for urban co- operative banks. He submitted that the norms for fixing the staffing pattern is based upon the profit earned by the Bank per employee. So far as the business of the 1st Respondent is concerned, it is between 100 and 500 crores and the profit of the 1st Respondent is to the tune of Rs.250 crores. Having therefore regard to the fact that for every employee there should be profit of 2.5 crores the 1st Respondent cannot exceed recruiting more than 100 employees. As against this, perusal of the minutes of Annual General Meeting dated 08.08.2010 would indicate that they have also exceeded the figure of 100 employees and they have presently 125 employees. It is in these circumstances, it was not open to the 1st Respondent to issue advertisement for filling the posts of Chief Executive Officer, officers and clerks. 10.In support of his submissions, Mr.Topkar relied upon the judgment of this Court in the case of Bank Karmachari Sangh V/s.K.R.Pawar, Member, Industrial Court, Pune & Ors. 1996 8 I L.L.J.955 and the Division Bench judgment of this Court in the case of Co-operative Bank Employees Union V/s.Yashwant Sahakari Bank Limited and Ors., 1993 (1) Bom.C.R.621, Writ Petition No.3349 of 1984 decided on 01.10.1992 (Coram: Sujata Manohar & B.N.Srikrishna, J.J.). 11.On the other hand Mr.Bhatkar supported the impugned order. He invited my attention to the reply dated 15.11.2010 filed by the Respondents to the application filed by the petitioner for interim relief. In that reply it was specifically asserted by the Respondents that the staffing pattern exists in the Bank and the said staffing pattern is prepared on the basis of the guidelines issued by the R.B.I. While opening of a new branch. The staffing pattern is fixed by the Respondents on the basis of guidelines issued by the R.B.I., as also the Co-operative Department. He also invited my attention to the affidavit of Ramesh Ramchandra Kadu filed on behalf of the Respondents in this petition. He submitted that the 1st Respondent Bank had prepared the staffing pattern on 30.03.2001 and the said staffing pattern was confirmed in the A.G.M.held on 12.08.2001. The Bank had also forwarded the resolution of the staffing pattern to the Commissioner of Co- 9 operative Societies on 18.09.2001. In the staffing pattern approved on 30.05.2001 by the A.G.M., the total strength of the employees was 130. In the affidavit it is asserted that the advertisement dated 30.07.2010 was issued for filling up the vacant posts as per the approved staffing pattern and thus no change is effected by the 1st Respondent as contemplated under the Act. In support of his submission he relied upon the decision of the Apex Court in the case of Suresh V/s.Yeotmal District Central Co-operative Bank Limited & Anr., 2008 (12) SCC 558. 12.I have considered the rival submissions made by learned counsel appearing for the parties. The first and the foremost question to be considered in this petition is whether the Respondents have effected any change in respect of the industrial matter specified in Schedule II under section 42 of the Act. Mr.Topkar heavily relied upon item 2 of Schedule II which reads as under:- “Permanent of semi-permanent increase in the number of persons employed or to be employed in any occupation or process or department or departments.” 13.He submitted that the advertisement in question was issued on 30.07.2010 and the last date for inviting applications was 10 14.08.2010. In the meantime, the petitioner gave notice of change under section 42(2) and Rule 52 of the Bombay Industrial Relations Rules, 1947 (for short Rules) on 06.08.2010. Thus even before the last date of receipt of applications on 14.08.2010, pursuant to the Advertisement dated 31.07.2010, the Respondents received this notice and therefore they should not have proceeded further with the selection process. The petitioner had also issued notice under section 54 (1) read with Rule 62 of the Rules on 16.08.2010 to the conciliator. By issuing advertisement inviting applications, the Respondents intend to make illegal change and therefore the Labour Court rightly restrained the Respondents from appointing/ recruiting any persons as per the said advertisement. Perusal of the order dated 03.02.2011 indicates that in Paragraph No.8 of that order, on behalf of the Respondents, it was specifically contended that the Respondent Bank is filling the vacant post as per the staffing pattern and there was no illegal change as alleged by the petitioner union. The learned Judge of the Labour Court has not dealt with this submission at all. In so far as the impugned order dated 26.08.2011 passed by the Industrial Court is concerned, and in 11 particular paragraph 9 thereof, the Industrial Court observed that admittedly the 1st Respondent Bank did not give any notice of change as the permanent or semi permanent posts in the staffing pattern did not increase and the advertisement dated 31.07.2010 for filling the post of Chief Executive Officer, four posts of officers and six posts of clerks does not increase the staffing pattern. The 1st Respondent Bank is filling up the vacant posts as per the staffing pattern and filling up the posts is a continuous process and it does not amount to illegal change under section 46(2) of the Act. It was further observed that the 1st Respondent Bank is filling up the posts as per the norms of staffing pattern fixed by the R.B.I.and the Co-operative Department and if the Bank makes recruitment beyond the staffing pattern, then the Board of Directors of the Bank will have to face the consequences and bear the liability of wages. The Industrial Court also relied upon the judgment of the Apex Court in the case of C.J.Patel & Co.V/s.Industrial Court, Maharashtra, Nagpur & Others, 1972 (25) F.L.R. 213. 14.As noted earlier, in the A.G.M.of the 1st Respondent the staffing pattern was approved and the total number of employees as per 12 the staffing pattern was 130. Mr.Topkar invited my attention to the Resolution No.11 passed by the Board of Directors on 28.07.2010 where the total existing strength of employees in the 1st Respondent Bank is 125. Perusal of that very resolution indicates that as against the total existing strength of 125 posts, 102 posts are filled in and 23 posts are vacant. It also indicates that one post of Chief Executive Officer, four posts of officers and six posts of clerks are vacant. The said resolution further recites that since the Chief Executive officer is retiring on 30.09.2010, the advertisement to fill up the said post was issued. Mr.Topkar in all fairness therefore did not challenge the appointment to the post of Chief Executive Officer. He further pressed for injunction restraining the Respondents from filling up four posts of officers and six posts of clerks. As indicated earlier, the petitioner has not placed on record the existing strength of officers and clerks so as to arrive at a positive finding that the 1st Respondent Bank has effected illegal change as contemplated in item 2 of Schedule II read with Section 42 of the Act. On the other hand, prima-facie, the 1st Respondent has brought on record that they are filling up the vacant posts and are not increasing the number of posts. This 13 is more so when as per the earlier staffing pattern approved on 12.08.2001, the total posts were 130 and as per the Resolution dated 28.07.2010 the total strength is 125 employees. Even accepting that the total strength of employees is 125, 4 posts of officers and 6 posts of clerks are vacant. The 1st Respondent proposes to fill these posts. I therefore do not find that the Industrial Court committed any error. Mr.Topkar relied upon the judgment of this Court in the case of Bank Karmachari Sangh (supra). In that case, the question was about the exclusive appearance of the representative union. It was held that the legislature has clothed the representative union with plenary power to appear or act on behalf of the employees in any proceedings under the Act and has deprived the individual employees or workmen of the right to appear or act in any proceedings under the Act where the representative union enters appearance or acts as a representative of the employees. In the present case the petitioner has undoubtedly the right to represent the employees in the Banking Industry and on that count, the Industrial Court has not ruled against the petitioner. 15.As far as the reliance on the Division Bench judgment of this 14 Court in the case of Co-operative Bank Employees Union (supra) is concerned, the question - where the employer intends to effect any change in respect of the Industrial matter specified in Schedule II of the Act which is not likely to adversely affect any employee in the service, is the employer obliged to give notice of change contemplated under section 42 (1) of the Act?, was posed. In Paragraph 32 of that report it was observed as under:- “To sum up, we are of the view that sub-section (1) of section 42 of the BIR Act casts three obligations upon the employer, if he intends to effect any change in any industrial matter enumerated in Schedule II. The first, to issue a notice of change in the prescribed form to the representative of employees. The second, to forward a copy of such notice of change to the statutory authorities specified therein. The third, to affix a copy of such notice at a conspicuous place, where the employees, affected by the intended change, are at work. Perhaps, the employer may be relieved of the last obligation, in case the employees are not prejudicially or adversely affected by the proposed change. We are, however, unable to accept the view that the employer can be relieved of the other two obligations also if no employee is likely to be prejudicially or adversely affected.” 16.The Industrial Court came to the conclusion that the 1st Respondent Bank has not effected any change while issuing the advertisement dated 31.07.2010. Prima-facie it cannot be said that the said finding is perverse. It also cannot be said that the Industrial Court committed any error of law apparent on the face 15 of the record. Having regard to the material on record, I find that the 1st Respondent Bank proposes to fill up the vacant posts as per the staffing pattern which was already in existence in the Bank. In view thereof, this is not a fit case for invocation of extra ordinary power under Articles 226 & 227 of the Constitution of India. In the result, petition fails and the same is dismissed. Rule is discharged, with no order as to costs. 17.At this state Mr.Topkar, learned counsel for the petitioner orally applies for stay of this order for a period of four weeks from today. In view of this, there shall be stay of this order for a period of four weeks from today. (R.G.KETKAR, J.)