IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.02.2010 CORAM THE HONOURABLE MR. JUSTICE M. VENUGOPAL W.P.No. 29572 of 2004 M.Ganesan ... Petitioner vs. 1. The Joint Registrar of Co-operative Societies Ramadoss Naidu Street, Pudupalayam, Cuddalore District. 2. The Deputy Registrar of Co-operative Societies, Junction Road, Virudhachalam, Cuddalore District. 3. The Special Officer, E-2612 Nattarmangalam Primary Agricultural Co-operative Bank Ltd., At Pazhanja Nallor, Kattumannarkoil Taluk, Cuddalore District. ... Respondents. PRAYER: Petition filed under Article 226 of the Constitution of India for the issuance of writ of certiorari, calling for the records of the 1st respondent in his proceeding R.C.No.1604/2003.Thu.Va.Tha. Dated 26.07.2004 and quash the same. For Petitioner : Mr.K.Raja For Respondent Nos.1&2 : Mr.N.Senthil Kumar Additional Govt. Pleader For Respondent No.3 : Mr.P.S.Sivashanmuga Sundaram O R D E R The petitioner has filed this writ of certiorari in calling for https://hcservices.ecourts.gov.in/hcservices/ the records of the respondent in his proceeding R.C.No.1604/2003.Thu.Va.Tha. Dated 26.07.2004 and quash the same. 2. The petitioner was appointed as a Secretary on 24.02.1974 in the third respondent/Nattarmangalam Primary Agricultural Co-operative Bank Ltd., Cuddalore. He was placed under suspension by the third respondent on 24.11.1995. Thereafter, a charge memo was issued to him on 25.12.1995. The enquiry officer found that all the charges against the petitioner were not proved. However, the third respondent passed an order dated 10.03.1997, dismissing the petitioner from service and the petitioner filed a revision petition as per Section 153 of the Tamil Nadu Co-operative Societies Act before the first respondent. Later, he filed W.P.No.20601 of 1998 before this Court and this Court passed an order on 24.12.1998, directing the first respondent to dispose of the said revision petition within a period of three months from the date of production of a copy of this order. 3. The first respondent as per the proceedings dated 22.02.1999, revoked the order of dismissal from service of the petitioner and further directed the third respondent to conduct a fresh enquiry from the stage of enquiry officer's report. Notwithstanding the fact that the matter was remanded back to the third respondent by the first respondent, the petitioner was not reinstated in service and he proposed to file W.P.No.6692 of 1999 before this Court, praying for the relief of reinstating him in service as Secretary. Later, he was reinstated in service (pending disposal of charges) as per order dated 13.12.1999, passed by the Special Officer of the third respondent/bank subject to the condition that a final order will be passed after disposal of the criminal case and therefore, the said writ petition was dismissed as infructuous by this Court. 4. When the petitioner was reinstated in service, a settlement dated 01.07.1997 as per Section 18(1) of the Industrial Disputes Act 1947 was entered into between the petitioner and the third respondent, after the finalisation of the disciplinary proceedings on 02.06.2000 by the third respondent. In the final order dated 02.06.2000, passed by the third respondent, the petitioner was exonerated from the charges No.1 to 7 levelled against him and he was let off with severe warning and the dismissal of service period from 10.09.1997 to 13.12.1999 was to be treated as period in service and as per Section 18(1), a settlement was directed to be entered into in regard to the payment of salary like other staff members salary. 5. On 02.06.2000 itself, a settlement as per Section 18(1) of the Industrial Disputes Act was entered into between the third respondent through its President and the petitioner and as a matter of fact, the settlement copy was also sent to the Authorities https://hcservices.ecourts.gov.in/hcservices/ concerned as per Rule 58(4) of the Industrial Disputes (Central) Rules, 1957. 6. It is not in dispute that the petitioner in respect of criminal case, he was released under the Probation of Offenders Act as per the judgment of the Criminal Court dated 21.09.2001. Subsequently, a resolution was passed by the third respondent in his proceedings dated 15.05.2002, dropping further action on the charges framed against the petitioner and it was resolved that he would be paid his salary with continuity of service. Accordingly, the petitioner received the entire monetary benefits etc. with backwages from the date of his suspension till the date of reinstatement. 7. When that be the faculative aspects of the matter, the second respondent in his proceedings dated 11.08.2003, in Na.Ka.No.3922/2003.Thu. directed the third respondent Bank's Extension Officer to undertake an inspection as per Section 82(1) of the Tamil Nadu Co-operative Societies Act pursuant to the objection raised during the course of audit of the third respondent/bank in the year 2000-2001. 8. The petitioner filed W.P.No.12676 of 2004 before this Court, challenging the proceedings of the second respondent dated 11.08.2003 in directing the third respondent/bank's Extension Officer to undertake the inspection of the bank and obtained an interim stay and later, the same was withdrawn, as informed by the learned counsel for the petitioner before this Court. However, the first respondent by means of proceedings dated 26.07.2004 in Na.Ka.No.1604/2003.Thu.Va.Tha.1, passed an impugned order in directing the petitioner to pay back a sum of Rs.3,57,833/- received by him as backwages to the third respondent bank. 9. The learned counsel for the petitioner urges before this Court that the first respondent had no authority in law to pass the impugned order dated 26.07.2004 in directing the petitioner to pay back a sum of Rs.3,57,833/- to the third respondent bank, which he received as backwages and as a matter of fact, the first respondent while passing the impugned order dated 26.07.2004 had not taken into account the final order dated 02.06.2000 passed by the third respondent and also the settlement arrived at between the petitioner and the third respondent then President on 02.06.2000 as per Section 18(1) of the Industrial Disputes Act, 1947, and this caused substantially irreparable injury to the petitioner resulting in violation of principles of natural justice and when the disciplinary authority viz. the third respondent came to the conclusion that the disciplinary proceedings were to be dropped and accordingly dropped, then, the petitioner is entitled to get all the benefits namely backwages from the date of termination till the date of reinstatement https://hcservices.ecourts.gov.in/hcservices/ and as such, there is no irregularity or illegality, in regard to the settlement arrived at between the parties and indeed, as per Section 18(1) of the Act, Settlement will have to be encouraged in order to bring about the peace and the same is the bedrock of the Industrial Democracy under the Industrial Disputes Act, but these aspects of the matter were not adverted to by the first respondent while passing the impugned order dated 26.01.2001 and therefore prays for allowing the writ petition in furtherance of substantial cause of justice. 10. Per contra, the learned Government Pleader for R1 and R2 submits that when the disciplinary proceedings were pending, then the reinstatement of the petitioner as third respondent's Secretary from 13.12.1999 with payment of backwages was improper one and therefore the improper payment of backwages amount of Rs.3,57,833/- along with interest was rightly ordered to be paid back by the petitioner as per the impugned order dated 26.07.2004 and the same need not be disturbed by this Court. 11. Also, it is the contention of R1 and R2 side that setting aside the dismissal order on technical grounds, the petitioner was reinstated in service as an interim measure only subject to passing of the final orders based on materials on record, after the disposal of the criminal case pending against him, but without ascertaining the stage of the criminal case and when the charges were still pending and criminal case not disposed of, the third respondent's Board ought not to have hastened to enter into a settlement as per Section 18(1) of the Industrial Disputes Act and permit him to receive huge amount as arrears of salary for the period, when he was not in the office in as much as the petitioner was dismissed from service. Moreover, this Court was informed that the payment of such arrears of salary to the petitioner was objected in the audit and it was communicated to the Deputy Registrar/the second respondent by the Co-operative Extension Officer on 14.07.2000 and after knowing the audit objection in regard to the payment of arrears to the petitioner, a resolution was passed by the council of the 3rd respondent/bank on 15.07.2000, in approving the first respondent order dated 22.02.1999 of setting aside the petitioner's dismissal from service from 13.09.1997 and also ratifying such payment of backwages and since the petitioner was responsible for the day to day affairs of the business of the third respondent/bank including the arrangement of the Board meeting and transacting the business of such board meeting, such a resolution passed at the instance of the petitioner was not a proper and valid one in the eye of Law. 12. It is the further stand of the respondents 1 and 2 that the petitioner was found guilty of the offences before the Criminal Court and he was released under the Probation Offenders Act and the release of the petitioner under the Probation Offenders Act does not mean an honourable acquittal and he could not claim the arrears, as a matter https://hcservices.ecourts.gov.in/hcservices/ of right and in short the settlement of backwages was not proper. Moreover, a plea also taken before this Court on behalf of the R1 and R2 that the petitioner had given an undertaking and only on such undertaking, he received the backwages and therefore the impugned recovery order does not suffer from any illegality in the eye of law. 13. On behalf of the third respondent, a similar stand of R1 and R2 was taken to the effect that the petitioner was allowed by the Board of Directors of the third respondent Bank to draw such arrears of salary only subject to any audit objection and on his undertaking to repay the same if it was objected by the Auditor's inspection and in the present case on hand, the audit had objected to the payment of backwages to the petitioner, which was communicated to the second respondent on 14.07.2000 and after examining the same on 18.11.2000, the second respondent instructed the President of the third respondent Bank to recover the same amount with interest and to report the same within seven days thereto and accordingly, the President ordered for recovery of the amount on 23.11.2000, which was confirmed in the revision by the first respondent in Na.Ka.No.1067/2003.Thu.Va.Tha.1, dated 26.07.2004. In short, even in the counter projected by the third respondent, like stand of the first and second respondent was projected and therefore this Court is not repeating the same. 14. The learned counsel for the petitioner invites the attention of this Court to the bylaws of the third respondent/Bank 1975 and submits that as per Rule 27(1)(a), the third respondent Bank's President has overall power of Superintendence in respect of all proceedings, because of his position as President and also the society treasurer, since the third respondent bank's President had entered into the Section 18(1) settlement with the petitioner dated 02.06.2000 and admittedly, after the said settlement, the final orders were passed on 02.06.2000 in the disciplinary proceedings, exonerating the petitioner and letting him off with severe warning, and as such the impugned order passed on 26.07.2004 in directing the petitioner to pay a sum of Rs.3,57,833/- (received as backwages for the period from 13.09.1997 to 16.02.1999) with interest, because of the fact that temporary suspension period from 24.11.1995 till the date he was reinstated in service was not regularised and the earlier order of the President of the third respondent in his proceedings dated 23.11.2000 are illegal and both are unsustainable in eye of law. 15. At this juncture, this Court, after perusing the Rule 27(1) (a) of the third respondent Bank byelaws, opines that the third respondent President has overall powers of superintendents in all the activities of the bank besides being himself the treasurer of the bank and therefore, this Court is of the considered view that the Settlement dated 02.06.2000 as per Section 18(1) of the Industrial Dispute Act entered into between the parties was a valid and binding https://hcservices.ecourts.gov.in/hcservices/ one between the parties, as per decision of this Court M.Jesuraj and S.Rajamanickam v. Presiding Officer, Labour Court, Pondicherry (2002 LLR 1013). Though on the side of the respondent, a plea was taken that the payment of backwages to the petitioner was not a prudent act on the part of the then President of the Society, who entered into the settlement as per Section 18(1) of the Act dated 02.06.2000, this Court, on the basis of over all facts and circumstances of the case is of the considered view, that the said plea is not a tenable one and therefore rightly, rejects the same in the interest of justice. One cannot ignore an important fact the Settlement as per Section 18 (1) of the Industrial Disputes Act becomes binding at once as soon as the said settlement was signed by the respective parties in the prescribed manner and especially in the present case on hand, a copy of the settlement was also sent to the authorities concerned on 02.06.2000 by complying with the statutory requirement and therefore the settlement arrived at between the parties cannot be assailed by the respondent in one way or other and therefore the same binds them on all force as opined by this Court. 16. It is an axiomatic principle of law that where the question is raised about the fairness or validity of a settlement, a distinct industrial dispute is visualised/contemplated. Also, whether the settlement is unfair or tainted one must be decided if there is a reference made in this regard. In the absence of any reference, it cannot be said that the settlement is not a legal one. Moreover, a settlement will not be illegal if a party fails to establish that it was obtained by fraud or concealment of facts in the considered opinion of this Court. Further, a settlement if acted upon will be binding upon the parties even when it is not in accordance with rules as per decision Wings Wear (Pvt.) Ltd. v. Workmen as represented by Wings Wear Worker's Lal Jhanda Union (1996 LLR 802). In the decision S.Jina Chandran v. Registrar of Co-operative Societies, Madras, (1999 LLR 230) it is held by this Court that "the Registrar of Co- operative Societies cannot nullify a wage settlement made before Conciliation Officer". 17. Added further, when the said settlement was a valid and binding one governed by the statute and the rules then later on, in law it is not open to any of the respondents to question the same because of the fact that the said settlement dated 02.06.2000 is still in force as on date and the same has not been varied or modified or annulled or set aside in any manner in accordance with law. Unfortunately, the settlement under Section 18(1) of the Industrial Disputes Act, dated 02.06.2000 entered into between the third respondent/bank and petitioner and the final order dated 02.06.2000 of the third respondent/bank exonerating the petitioner from the charges 1 to 7 levelled against him and the severe warning issued to him were not taken into account by the first respondent, while passing the impugned order dated 26.07.2004 and this has https://hcservices.ecourts.gov.in/hcservices/ resulted in miscarriage of justice. 18. On a careful consideration of respective contentions and in view of the fact that the 18(1) settlement was entered into between the parties on 02.06.2000 and the same being in force as on date and not challenged before the appropriate forum by means of a reference and also a final order dated 02.06.2000 was passed by the third respondent, then the impugned order dated 26.07.2004 passed by the first respondent in confirming the order of the third respondent dated 23.11.2000 is not valid in the eye of law and the same is liable to be quashed and accordingly the same is quashed and writ petition is allowed, leaving the parties to bear their own costs. Sd/- Assistant Registrar /True Copy/ Sub Asst.Registrar ogy To 1. The Joint Registrar of Co-operative Societies Ramadoss Naidu Street, Pudupalayam, Cuddalore District. 2. The Deputy Registrar of Co-operative Societies, Junction Road, Virudhachalam, Cuddalore District. 3. The Special Officer, E-2612 Nattarmangalam Primary Agricultural Co-operative Bank Ltd., At Pazhanja Nallor, Kattumannarkoil Taluk, Cuddalore District. W.P.NO.1589 OF 2009 BK DRL (15/02/2010) https://hcservices.ecourts.gov.in/hcservices/