1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 5167/2010 1] The Jalna People’s Cooperative Bank Ltd. Jalna, Kavi Ramkrishna Shola Square, Sadar Bazar, Jalna, Through Their Chairman/General Manager. 2] Mrs. Nirmala Ashokji Karwa Vice Chairman, The Jalna People’s Coop. Bank Ltd. Jalna, Kavi Ramkrishna Shola Square, Sadar Bazar, Jalna. 3] K.G.Warma Junior Officer, Acting General Manager, The Jalna People’s Coop. Bank Ltd. Jalna, Kavi Ramkrishna Shola Square, Sadar Bazar, Jalna. .. PETITIONERS 2 VERSUS 1] Yogita Madhukar Shinde Aged 32 year, Occ-Service R/o Jalna, Tahsil and Dist.Jalna. 2] District Deputy Registrar Jalna. 3] The Divisional Joint Registrar Jalna Road, Aurangabad. .. RESPONDENTS [Respondents no.2 and 3 to be served through the Govt.Pleader,High Court High Court,Aurangabad Bench.] .... Shri V.J.Dixit, Senior Counsel with Shri Anand Chaware,Counsel for petitioners. Shri V.D.Sapkal,Counsel for Respondent no.1. Shri K.M.Suryawanshi,AGP for Respondents 2 and 3. .... CORAM : R.K.DESHPANDE,J. JUDGMENT RESERVED ON : 23/6/10 3 JUDGMENT PRONOUNCED ON :28/6/10 ORAL JUDGMENT : 1] This Writ Petition is preferred by the management i.e. the Jalna People’s Co-operative Bank Limited, Jalna, challenging order dated 25-3/1-4/2010 passed below application Exh.5 by the Cooperative Court at Aurnagabad in Dispute CCA.No.187/2009. By this order, the Cooperative Court has allowed application Exh. 5 filed for grant of an interim relief under Section 95(4) of the Maharashtra Cooperative Societies Act, 1960 (the said Act), restraining the petitioner management from enforcing the order of termination dated 19/11/2009 and further directing the petitioner bank to allow the disputant who is respondent no.1 herein, to temporarily work as per the employment contract. This order passed by the Cooperative Court has been confirmed by the learned Member, Maharashtra State Co-operative Appellate Court, Mumbai, Bench at Aurangabad, dismissing Appeal i.e. A.O.No.08/10, filed by the present petitioner, by his order dated 30-4-2010. 2] The facts which are not much in dispute, are stated below: The respondent no.1 Smt.Yogita Madhukar Shinde was appointed as General Manager w.e.f. 1/7/2009, by an order dated 25/6/2009 issued by the petitioners. According to the petitioners, the said order was only for a period of 11 months whereas, the 4 contention of the respondent no.1 is that the appointment was on probation in a permanent vacancy. Before the expiry of the period of 11 months, the services of the respondent no.1 were terminated by an order dated 19/11/2009 with immediate effect. Thus, respondent no.1 worked with the petitioners for 4 months and 11 days. 3] The respondent no.1 filed a Dispute No.187/09, under Section 91 of the said Act, before the Co-operative Court, Bench at Aurangabad. on or about 21/11/2009. Alongwith this Dispute, the respondent no.1 also filed an application under Section 95(4) of the said Act, for grant of an interim relief. The case of the respondent no.1 in short, is that she was appointed in a permanent vacancy on probation for a period of 11 months w.e.f. 1/7/2009, by an order dated 25/6/2009. Before the expiry of 11 months, the petitioner bank discharged her from services, by an order dated 19/11/2009. According to her, bare perusal of the order makes it clear that it is stigmatic, as it contains several charges of misconduct, misbehaviour including that of misappropriation. It was the case of the respondent no.1 that her service conditions are governed by the Service Rules of the petitioner-bank, which prescribes the procedure for holding enquiry, if the services of the employee are to be terminated on the ground of misconduct. Admittedly, according to her, such enquiry was not conducted and by stigmatic order, her services were terminated, without even giving notice of termination or paying salary in lieu of such notice. 5 4] The petitioner bank filed its written statement and reply to the application for interim relief. The claim of the respondent no.1 was opposed. It was stated that the appointment of respondent no.1 was only for a period of 11 months and the same was not in a permanent vacancy. It was further the stand taken that the petitioner bank has lost confidence in the services of respondent no.1. The conduct, performance and behaviour of the respondent no.1 was not to the satisfaction of the petitioner and therefore, in terms of the order of appointment, the services of the respondent no.1 were terminated. According to the petitioners, the respondent no.1 had no right to hold the office and the jurisdiction of the Cooperative Court, which is akin to the jurisdiction of the Civil Court, cannot be exercised for granting relief of reinstatement, continuity in service alongwith backwages. According to the petitioners, the dispute before the Cooperative Court claiming the reliefs was not maintainable. According to them, at any rate, grant of reliefs claimed by the respondent employee would amount to granting specific performance of the contract of personal service, which is barred by the provisions of Section 14 of the Specific Reliefs Act. 5] The learned Judge of the Cooperative Court allowed application Exh.5 and passed an order that the termination order dated 19/11/2009 is restrained till disposal of the dispute and the petitioner bank is directed to allow the disputant temporarily to work as per employment contract. It was held that the service 6 conditions of employees of the petitioner bank are governed by the Rules and bye-laws framed, which prescribe the detail procedure for imposing punishment of dismissal, termination from service on the ground of misconduct. It was held that the termination of the service of respondent no.1 by an order dated 19/11/2009,was by way of punishment and ex-facie it shows the nature of termination to be punitive. This has been done without following the procedure prescribed under the bye-laws and Service Rules framed for that purpose. It was held that the respondent no.1 has made out a strong prima facie case and she cannot be removed from service on the charges mentioned in the items no.1 to 13 in the order of discharge, without holding any enquiry. It was further held that the balance of convenience lies in favour of the respondent no.1 and prima facie, it can be held that the order of termination can spoil the future of the respondent no.1 employee, which cannot be compensated in terms of money. In respect of the defence taken by the petitioner on merits of the claim made by the respondent no.1, it was held by the Cooperative Court that it is a matter which is required to be considered, after the parties are permitted to lead evidence and the defence taken by the petitioner over the charge of loss of confidence, cannot be gone into at this stage. On maintainability of the dispute, it was held that in terms of the Division Bench judgment of this Court reported in 1998(3) Mh.L.J. 214 in the case of Pralhad Vithalrao Pawar V/s Kannaded Sahakari Sakhar Karkhana Ltd. and another, that the dispute was maintainable and the relief of declaration that the termination is 7 illegal and the disputant continues to be in service, can be granted. 6] The Appellate Court in its judgment and order dated 30/4/2010, passed in A.O.No.08/10, has concurred with the findings recorded by the Cooperative Court in respect of removal of the respondent no.1 from service by way of punishment, without holding an enquiry. In addition to this, it was held that the appointment of the respondent no.1 was in a permanent vacancy on probation for a period of 11 months and the services of the respondent no.1 could not have been discharged without holding an enquiry in accordance with Service Rules and the bye-laws of the bank. Relying upon the decision of the Apex Court reported in AIR 2004 S.C. page 1975 in the case of Deoraj V/s State of Maharashtra and others, it was held that an interim relief of a mandatory nature can be granted even if it amounts to granting final relief, if strong prima facie case is made out. It was held that the respondent no.1 has made out a strong prima facie case and if the injunction is refused, then certainly irreparable loss would cause to her. The appellate Court concurred with the view taken by the Cooperative Court that the Division Bench of this Court in a judgment reported in 1998(3) Mh.L.J. page 214 Pralhad V/s Managing Director, has held that the grant of relief of reinstatement is permissible. The appeal was thus dismissed. 7] This matter was listed on board for admission and interim orders on 18/6/2010. Shri V.D.Sapkal, the learned counsel 8 appeared for respondent no.1, whereas Shri K.M.Suryawanshi, the learned A.G.P. appeared for respondents 2 and 3. Shri V.J.Dixit, the learned Senior Counsel assisted by Shri Anand Chaware, appeared for the petitioners. The matter was heard for quite some time and the learned counsels for the parties agreed that the hearing on interim relief as well as final hearing of the matter, would consume the same time and therefore, they agreed for final disposal of the matter at the stage of admission. The parties were therefore, put on notice that the matter shall be finally heard at the stage of admission. Rule. Rule made returnable forthwith. By the consent of learned counsels, the matter is heard now finally. 8] Basically two questions are required to be considered in this Writ Petition : [1] Whether the Cooperative Court has jurisdiction to grant relief of setting aside of termination, grant of reinstatement and continuity in service, alongwith backwages to the respondent no.1 who is an employee in a Cooperative bank, which is a society registered under the Maharashtra Cooperative Societies Act, 1960 and [2] Whether the Cooperative Court was justified in the instant case, to grant the relief of reinstatement and continuity in service to the respondent no.1, by way of an interim relief. 9] After hearing the learned counsels for the parties and after going through the findings recorded by both the Courts below, I am of the view that the prima facie findings recorded by the 9 Courts below that the order dated 19/11/2009, discharging the respondent no.1 from employment as a General Manager, is stigmatic and without holding an enquiry in accordance with Service Rules and bye-laws such a termination should not have taken place, does not call for any interference. I am also not inclined to interfere with the prima facie findings of facts recorded by the appellate Court that the appointment of the respondent no. 1 was on probation for a period of 11 months. Both the Courts below have made the prima facie assessment of the material available on record and have concurred with the view taken. The question whether the allegations of misconduct, misbehaviour etc. made in the order of discharge dated 19/11/2009 are substantiated or not, can be gone into upon permitting the parties to lead the evidence. Hence, no further discussion is required to be made with regard to it at this stage, except not to interfere with the said findings recorded by the Courts below, in exercise of the jurisdiction of this Court under Articles 226 and 227 of the Constitution of India. 10] Now, I proceed to decide the questions which are framed in earlier paras, regarding jurisdiction of the Cooperative Court to grant relief of reinstatement in service. In order to consider this question, the prayers made in the dispute filed by the respondent no.1 are required to be seen, which are reproduced below : “A] This disputant may kindly be allowed and call record and 10 proceedings. B] The Hon’ble Court may be pleased to pass necessary order and quash and set aside the impugned order no.3087 dtd, 19/11/2009 passed by Sau.Nirmla Karwa Incharge Chairman, the Jalna Peoples Co-op. Bank Ltd. Jalna and the disputant may be allowed to continue on her present post of General Manager of the said bank. B-1] The Hon’ble Court may be pleased to declare that the impugned order dtd. 19/11/2009 passed by opponent no.2 without jurisdiction as null and void and the opponents may be restrained from obstructing the disputant to perform and function, the duty assigned to the post of General Manager on the basis of impugned order dtd.19/11/2009. C] By way of granting permanent injunction the respondent bank authorities including Chairman, Vice Chairman may be restrained from executing and implementing the impugned order no.3087 dtd. 19.11.2009 passed by Sau.Nirmla Karwa Incharge Vice Chairman. D] During pendency of dispute the 11 Hon’ble Court by way of granting permanent injunction suspend the impugned order no.3087 dtd. 19.11.2009 passed by Sau. Nirmla Karwa and allow the disputant to work as General Manager of the said bank. E] Any other suitable and equitable relief may kindly be granted in favour of the disputant.” 11] In the application for an interim relief, which can be said to have been made under Section 95(4) of the said Act, the reliefs were claimed as under : “THE DISPUTANT THEREFORE, PRAYS THAT : A] This stay petition may kindly be allowed. B] During pendency of dispute the Hon’ble Court by way of granting permanent injunction suspend the impugned order no.3087 dtd. 19.11.2009 passed by Sau. Nirmla Karwa and allow the disputant to work as General Manager of the said bank. 12 Any other suitable and equitable relief may kindly be granted in favour of the disputant.” PROPOSED AMENDMENT IN STAY PETITION IN PRAYER CLAUSE : B-1] The opponent bank its incharge Chairman, Vice Chairman, Directors, officers, agents or any other claiming through be restrained from obstructing the disputant to perform and function the duty assigned to the post of General Manager on the basis of impugned order dtd. 19.11.2009.” 12] Now, the relief which is granted by the Cooperative Court in exercise of its powers under Section 95(4) of the said Act, pending the decision of dispute is reproduced below : ORDER 1] Application exhibit 5 is allowed. 2] The termination order dated 19.11.2009 is hereby restrained till 13 disposal of the dispute. 3] The opponent bank is directed to allow disputant temporarily to work as per employment contract. 4] Both disputant and opponents are directed to expedite the matter. 5] Pronounced in open court.” The appellate Court has confirmed aforesaid reliefs by its judgment and order dated 30/4/2010 and appeal filed by the petitioner bank has been dismissed. 13] Bare perusal of the interim reliefs granted by the cooperative Court reveals that the petitioner management is restrained from enforcing the order of termination dated 19/11/2009 and the petitioner bank is further directed to allow the disputant temporarily to work as per employment contract. It is not disputed that by an order of discharge dated 19/11/2009, respondent no.1 was informed that she has been relieved permanently from her post and in terms of Conditions No.2,4 and 5 specified in the order of appointment, she shall be paid one month’s salary in lieu of the notice of termination. It is also not in dispute that the respondent no.1 was not in employment from 14 19/11/2009. There was no order of stay granted by the Cooperative court pending the decision of application Exh.5, which was ultimately decided on 25/3/2010. It is also not in dispute that during the pendency of A.O. No.08/10, the order passed by the Coopertive Court on 25/3/2010 was stayed and the said stay order was extended upto 10/6/2010, by the appellate Court itself. When this matter was listed before this Court on 18/6/2010, this Court directed the parties to maintain the status- quo. As a result of all such events, the respondent no.1 is out of employment. Even if the Cooperative Court has not specifically used the phraseology “reinstatement of the respondent no.1 in service” by way of an interim relief, bare perusal of the order passed by the Cooperative Court, reproduced above and the facts, which are admitted, clearly show that the Cooperative Court, by way of an interim relief, has directed reinstatement of respondent no.1 in service, pending the decision of the dispute. Bare perusal of prayer clauses would reveal that the final relief and the interim relief claimed are almost the same. The appellate Court has maintained this order by dismissing appeal filed by employer. 14] Both the Courts below have relied upon the decision of the Division Bench of this Court reported in 1998 (3) Mh.L.J. 214 Pralhad V/s Managing Director, to hold that it is permissible for the cooperative Court to pass an order of reinstatement with backwages to the employee working in a cooperative society registered under the Maharashtra Cooperative Societies Act, 15 1960. Though, it was a Writ Petition under Article 226 of the Constitution of India challenging an order of termination issued by Cooperative society, a preliminary objection was raised that such a society does not fall within the expression “State” under Article 12 of the Constitution of India and hence, no writ of certiorari quashing the termination order nor a writ of mandamus directing the reinstatement can be issued under Article 226 of the Constitution of India. This objection was upheld and it was held that no such writ can be issued. 15] Shri Sapkal, the learned counsel appearing for respondent no.1 has urged that a specific plea was raised in Pralhad’s case cited supra that if Petition under Article 226 of the Constitution of India is held to be not tenable then, the employee would be left with no remedy, as the cooperative Court shall not have jurisdiction under Section 91(1) of the said Act and it was held that such a dispute before the Cooperative Court under Section 91(1) is maintainable, as it falls within the scope of the words “touching management or business of the society”, contained in Section 91(1) of the said Act. According to him, both the Courts below have rightly held that the relief of reinstatement with continuity in service and backwages can be granted by the cooperative court under Section 91(1) of the Act. It is true that in Pralhad’s case, the Division Bench of this Court has held that the dispute challenging the termination of service of an employee, who does not fall within the purview of either the Industrial Disputes Act or Bombay Industrial Relations Act, would be 16 maintainable against the employer i.e. a registered cooperative society, under Section 91(1) of the said Act. It is also true that this Court has held that jurisdiction of the cooperative Court under Section 91(1) of the said Act, is akin to the jurisdiction of the civil Court and it can grant declaratory reliefs as are covered by Section 34 of the Specific Reliefs Act, 1963. It has been specifically held that the Cooperative Court would be competent to grant declaration that the termination order is illegal and the disputant continues to be in service. 16] In my view, the grant of relief of reinstatement in service with backwages, to an employee of a cooperative society would be different than the grant of relief of declaration that the termination was illegal and the employee continued in service and it is this distinction, which emerges from the ratio in Pralhad’s case cited supra, decided by the Division Bench of this Court in paras 13 and 16 of the said judgment, which are reproduced below : “13] Thus, the Supreme Court in the case of Gujarath State Cooperative Land Development Bank Ltd. Vs. P.R.Mankad (supra) and the Division Bench of this Court in the case of Maharashtra Cooperative Housing Finance Society Ltd. (supra) concluded that a claim which is not entertainable by Civil Court under section 9 of the Civil Procedure Code cannot be allowed to be entertained under section 91 of the Cooperative Societies Act. This is a restrain on the exercise of jurisdiction by the 17 Cooperative Court under section 91. It really deals with the reliefs which can be granted. It does not lay down the proposal that the dispute between a terminated employee, or a Cooperative Society and the Society or a dispute about any of the service condition of such an employee is not entertainable under section 91. If the employee is covered by the definition of “Workman”, dispute will have to go before the Labour Court and if the employee is not covered by the term “Workman”, then the dispute will have to go before the Cooperative Court. If the parties are Cooperative Society and its employee, Cooperative Court will have all the jurisdiction but will not grant a relief that the Civil Court would not have granted. The Supreme Court in the case of Cooperative Central Bank Ltd. V/s Additional Industrial Tribunal, Hyderabad, AIR 1970 SC 245, and in the case of Gujarath State Cooperative Land Development Bank Ltd. (supra) came to the conclusion that a claim based upon contracts between the employees of the Cooperative Society and the Society or the claim for damages arising out of the breach of such contracts can be a part of a dispute 18 touching the “management” of the Cooperative Society within the meaning of Section 91 of the Cooperative Societies Act and such a claim would be entertained and decided by the machinery provided under the said Act. This view is strengthened after the amendment to section 91(1)(a) by incorporating the proviso, referred to hereinabove. 16] The Supreme Court in the case of Uttar Pradesh Warehousing Corporation Ltd. V/s Chandra Kiran Tyagi, 1970 I LLJ 32, following the decision in the case of Dr.S.B.Datta V/s University of Delhi, 1959 SCR 1236 and S.R.Tewari V/s District Board, Agra 1964 I LLJ I held that no declaration to enforce a contract of personal service or for alterations of conditions of service will be granted except in the following well recognized cases : [a] in the case of a public servant who has been dismissed from service in contravention of Article 311 of the Constitution of India; 19 [b] in the case of an employee who could be reinstated in an industrial adjudication by the Labour Court or an Industrial Tribunal; and [c] in the case of a statutory body, its employee could be reinstated when it has acted in breach of the mandatory obligations imposed by the statute. It was further held that in the case of an employee who did not fall in any of the above mentioned three exceptions, an order passed by the employer in breach of their staff regulations could be merely a breach of terms and conditions, but would not be a breach of any statutory obligations and therefore, such employees are not entitled for the relief of reinstatement in service. This ratio has been reiterated by the Apex Court, subsequently, in a more recent case of Integrated Rural Development Agency Vs Ram Pyare Pandey, 1995 I CLR 781 and held that in the absence of the statutory requirements, the court should not ordinarily force an employer to recruit or retain in service an employee not required 20 by the employer when the three exceptions laid down in the case of Uttar Pradesh Warehousing Corporation Ltd. (supra) are not there. It is also well established that by affording the relief of reinstatement or back wages, the court will, in fact, be granting specific performance of contract of service which can be done only in three exceptions cited above.” Although, it is held that the Cooperative Court shall have jurisdiction under Section 91(1) of the said Act to grant declaration, that termination is illegal and employee continues to be in service, it has been further clearly held that it would be inappropriate for the Cooperative Court to grant the relief of reinstatement with backwages where the petitioner did not fall in any of the 3 exceptional cases as laid down by the Supreme Court in case of Uttar Pradesh Warehousing Corporation Ltd. (reported in 1970 (I) LLJ, page 32). Here in the instant case also Shri Sapkal, the learned counsel for employee could not point out as to how the present case falls within three exceptions. Thus, the matter is no longer res-integra and the cooperative Court is not empowered to grant the relief