IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 12-09-2008 CORAM THE HONOURABLE MR.JUSTICE M.JAICHANDREN Writ Petition No.4247 of 2001 1.H.T.Natarajan 2.R.Sankaran 3.K.Kumar 4.R.Vasantha 5.K.R.Nandakumar 6.D.Sugumar 7.S.N.Ramesh 8.G.Gopal 9.C.Raman 10.B.Krishnamurthy .. Petitioners. Versus 1.Joint Registrar of Co-operative Societies, Udhagamandalam, Nilgiris District. 2. Co-operative Sub-Registrar/ Managing Director, The Udhagamandalam Co-operative Urban Bank Ltd., New Market Building, Udhagamandalam, Nilgiris District. .. Respondents. Prayer: This petition has been filed seeking for a writ of Certiorarified Mandamus, calling for the records pertaining to the order passed by the 2nd respondent in his proceedings No.Nil, dated 7.2.2001, and quash the same and direct the respondents to confer the benefit of the order issued by the Government in G.O.(2D) No.59, Co- operation, Food and Consumer Protection Department, dated 9.7.96, to the petitioners. https://hcservices.ecourts.gov.in/hcservices/ For Petitioners : Mr.P.Ganesan For Respondents : Ms.V.Bhavani Subbarayan Special Government Pleader O R D E R Heard the learned counsel appearing for the petitioners and the learned Special Government Pleader appearing for the respondents. 2. It has been stated that all the petitioners are working in the Udhagamandalam Co-operative Urban Bank Limited, Nilgiris District. Their pay scales had been fixed, in accordance with a settlement concluded under Section 12(3) of the Industrial Disputes Act, 1947. However, the first respondent had directed the cancellation of the said settlement. Consequently, the second respondent had issued the impugned proceedings revising the scales of pay of the petitioners and the salary paid to the petitioners, under the said settlement, has also been ordered to be recovered. 3. The petitioners have stated that the settlement concluded, under Section 12(3) of the Industrial Disputes Act, 1947, is in accordance with law and based on the classification of the Bank, as a `C' class bank, based on its turn over. The second respondent bank, which was originally classified as a `C' class bank, had been reclassified as a `B' class Bank as its income had crossed Rs.5 crores. Accordingly, the pay scales of the petitioners had been revised, in accordance with G.O.(2D) No.59, Cooperation, Food and Consumer Protection Department, dated 9.7.96. While so, the first respondent had stated that the petitioners are entitled only to the scales of pay applicable to `C' Class banks. The respondents had not taken into consideration the instructions of the Government to enter into a settlement for the revision of the scales of pay of the employees working in the Co-operative Banks, once in five years. Accordingly, the second respondent had entered into an agreement for the period from 1.7.91 to 30.6.96. Due to administrative reasons, the settlement had been delayed and it was entered into only in the month of October, 1999. Since the second respondent bank had moved into the category of a `B' Class bank from 1.4.98, the pay scales of the petitioners had been revised by the settlement concluded, under Section 12(3) of the Industrial Disputes Act, 1947. While so, the second respondent had issued the impugned proceedings, dated 7.2.2001, based on the instructions issued by the first respondent. In such circumstances, the petitioners have filed the present writ petition, under Article 226 of the Constitution of India. 4. In the counter affidavit filed on behalf of the respondents, the claims made by the petitioners have been denied. It has been stated that the Government of Tamilnadu had issued an order, under https://hcservices.ecourts.gov.in/hcservices/ G.O.Ms.No.111, Cooperation, Food and Consumer Protection Department, dated 19.5.99, classifying the Urban Co-operative Banks into `A', `B' and `C ' class Banks. Accordingly, the Government had fixed the pay scales and allowances of its employees as applicable to a Bank classified as a `C' class bank. However, it was found that the management of the Udhagamandalam Urban Co-operative Bank and its employees had concluded a settlement under Section 12(3) of the Industrial Disputes Act, 1947, contrary to the norms fixed by the Government in its Government Order. Since the fixation of the scales of pay and the allowances were not in consonance with the guidelines formulated in G.O.Ms.No.111, Cooperation, Food and Consumer Protection Department, dated 19.5.99, instructions had been issued to review the scales of pay fixed by the Bank for its employees. Based on the said instructions, the second respondent had issued an order, dated 7.2.2001, which has been challenged in the present writ petition. 5. It has also been found that the increments given while fixing the pay scales of the employes were contrary to the provisions of the said Government Order. Further, the revision of pay scales of the employees were not in accordance with G.O.No.2(D) 59, Cooperation, Food and Consumer Protection Department, dated 9.7.96. In such circumstances, the order issued by the second respondent is sustainable, as it is in accordance with law and the Government Orders issued with regard to the fixation of pay scales of the employees in the cooperative institutions in the State of Tamilnadu. 6. The learned counsel for the petitioners have stated that the respondents have no authority or jurisdiction to nullify the settlement concluded between the employees and the management of the Udhagamandalam Urban Co-operative Bank, under Section 12(3) of the Industrial Disputes Act, 1947, revising the pay scales of the petitioners in accordance with the Government Orders relating to the refixation of the pay scales of the employees of the cooperative institutions. Even if it is found that the settlement entered into between the employees and the management of the bank is improper and irregular, it is not open to the respondents to nullify the said settlement by way of issuing instructions and orders invoking the provisions of the Tamilnadu Cooperative Societies Act, 1983, or the Rules framed thereunder. It is for the respondents to take appropriate steps to declare the settlement as illegal or void only by approaching the appropriate forum, including the concerned Labour Court, under the relevant provisions of the Industrial Disputes Act, 1947. Further, no notice has been given to the employees before the impugned order of recovery has been passed by the second respondent. Revising the pay scales of the petitioner can be done by the respondents only after the concluded settlement is challenged before the appropriate forum, in the manner known to law. 7. The learned counsel appearing on behalf of the respondents had submitted that the impugned proceedings of the second respondent, https://hcservices.ecourts.gov.in/hcservices/ dated 7.2.2001, had been issued only to safe guard the interests of the second respondent Bank and by keeping in view the welfare of its employees and its members. Since the concluded settlement revising the pay scales of the petitioners had been found to be contrary to the circulars and the Government Orders, applicable to the second respondent Bank, the impugned order has been issued by the second respondent. 8. The learned counsel had further submitted that though the impugned order, dated 7.2.2001, has been issued, the petitioners cannot be said to be aggrieved, since no further orders have been passed to recover the salary paid to the employees of the second respondent Bank. It has also been stated that there is no intention on the part of the second respondent to recover the amounts already paid to the petitioners, in accordance with the settlement concluded, under Section 12(3) of the Industrial Disputes Act, 1947, as on date. However, the learned counsel for the respondents had prayed that this Court may be pleased to leave the disputed issues, with regard to the revision of pay scales of the petitioners and the consequent recovery of the salary paid to them, open so as to enable the respondents, if so advised, to initiate necessary proceedings before the appropriate forum, to set aside the settlement, in the manner known to law, if it is found to be necessary. 9. In view of the averments made by the learned counsels appearing for the petitioners as well as the respondents, it is clear that the respondents cannot invoke the general powers available to them, under the provisions of the Tamilnadu Cooperative Societies Act, 1983, and the Rules framed there under, to set aside or nullify a settlement concluded under the Industrial Disputes Act, 1947. Once a settlement has been concluded, in accordance with the provisions of the Industrial Disputes Act, 1947, and the revision of pay scales of the employees have been made in accordance with the said settlement, it would not be open to the respondents to nullify the concluded settlement and to recover the salary paid to such employees by issuing circulars or orders, either by invoking the provisions of the Taminadu Co-operative Societies Act, 1983, or the Tamilnadu Co- operative Societies Rules, 1988. However, it may be open to the respondents to challenge the validity of the settlement before the appropriate forum, in the manner known to law, after giving sufficient opportunity to the petitioners as well as the management of the concerned cooperative institution in which they are employed. 10. In the present case, it is found that the second respondent, by his impugned proceedings, has attempted to nullify a settlement concluded between the employees and the second respondent bank, under Section 12(3) of the Industrial Disputes Act, 1947, without giving an opportunity to the employees. No prior notice had been issued by the respondents, either to the second respondent bank or to its employees, before the impugned order has been passed. https://hcservices.ecourts.gov.in/hcservices/ 11. In such circumstances, this Court finds it appropriate to set aside the impugned order of the second respondent, dated 7.2.2001, leaving it open to the respondents to initiate appropriate action, as found necessary, to challenge the concluded settlement between the employees and the second respondent bank, before the appropriate forum, in the manner known to law. Accordingly, the writ petition stands allowed, with the above observations. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar csh To 1.Joint Registrar of Co-operative Societies, Udhagamandalam, Nilgiris District. 2. Co-operative Sub-Registrar/ Managing Director, The Udhagamandalam Co-operative Urban Bank Ltd., New Market Building, Udhagamandalam, Nilgiris District. + 1 cc to Mr.S.Mani, Advocate, SR No.52414 Writ Petition No.4247 of 2001 nsm(co) pmk/20.10.2008. https://hcservices.ecourts.gov.in/hcservices/