IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE TWENTY FIRST DAY OF OCTOBER TWO THOUSAND AND NINE PRESENT THE HON'BLE SMT JUSTICE T.MEENA KUMARI & THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO : 686 of 2007 Between: The Managing Director, Singareni Collieries Co-operative Central Stores Limited, Kothagudem, Khamma District. ..... APPELLANT AND The II Appellate Authority under Section 48(3) of the A.P. State Shops and Establishments Act, 1988 and the Dy. Commissioner of Labour, Warangal and others. .....RESPONDENTS The Court made the following : THE HON'BLE SMT JUSTICE T.MEENA KUMARI & THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO :686 of 2007 JUDGMENT: (per Hon’ble Sri Justice Sanjay Kumar) This appeal arises out of the order dated 20.7.2007 in WP No.11539 of 2004, whereby the learned single Judge dismissed the writ petition, upholding the orders passed by the authorities under the A.P. Shops and Establishments Act, 1988 setting aside the disciplinary action taken by the Singareni Collieries Co-operative Central Stores Limited, Kothagudem, Khammam District, the appellant herein, dismissing the 3rd respondent-employee from service. The 3rd respondent was a salesman in the appellant organization. He was dismissed from service under order dated 16.11.1999 after a Departmental enquiry into certain irregularities said to have been committed by him, whereby the appellant allegedly suffered a loss of Rs.94,107/-. The issue with regard to the refund of the alleged misappropriated sum of Rs.94,107/- by the 3rd respondent-employee was the subject matter of arbitration proceedings under Section 61 of the A.P. Co-operative Societies Act, 1964, in Claim No.3 of 1994. By Award dated 13.11.1995 in the said arbitration proceedings, the statutory arbitrator held that the 3rd respondent- employee was not liable for payment of the sum of Rs.94,107/- as the appellant had failed to establish its case against him beyond reasonable doubt. Aggrieved thereby, the appellant herein filed an appeal before the Co-operative Tribunal, Hyderabad in C.T.A.No.4 of 1996, which was also dismissed. The 3rd respondent-employee was however dismissed from service pursuant to separate disciplinary proceedings conducted by the appellant herein. Challenging the same, the 3rd respondent- employee filed an appeal before the 1st appellate authority under the A.P. Shops and Establishments Act, 1988. The said appeal was allowed by the said authority, taking into account the fact that the statutory arbitrator under the A.P. Co-operative Societies Act, 1964, in his proceedings under Section 61, had given a clean chit to the 3rd respondent-employee. Accordingly, the appellate authority directed reinstatement of the 3rd respondent-employee with continuity of service and backwages, by order dated 7.11.2001. Aggrieved thereby, the appellant herein carried the matter by way of a second appeal under Section 48(3) of the A.P. Shops and Establishments Act, 1988, before the second appellate authority. The second appellate authority also confirmed the order of the first appellate authority by order dated 19.11.2003 in S.A.No.1 of 2002. Aggrieved thereby, the appellant filed the writ petition, W.P.No.11539 of 2004, assailing the proceedings passed by both the aforesaid authorities. The learned single Judge, having considered the above facts and having gone through the material on record, concurred with the opinion expressed by the authorities under the A.P. Shops and Establishments Act, 1988, that once the statutory arbitrator under the A.P. Co-operative Societies Act, 1964 had examined the issue of the liability of the 3rd respondent-employee to account for the alleged loss of Rs.94,107/- which was said to have been caused by him to the appellant, and had given a finding that it was not proved that he had caused the said loss, such finding would have to be given due regard and respect. Accordingly, the approach of the authorities under the A.P. Shops and Establishment Act, 1988, in acting upon the said finding and in setting aside the disciplinary action of dismissal from service, was found to be valid and correct. The learned single Judge accordingly dismissed the writ petition. Hence, this appeal. Ms. V. Uma Devi, learned Counsel appearing for the appellant, contended that the approach of the authorities under the A.P. Shops and Establishments Act, 1988, in proceeding upon the findings recorded by the statutory arbitrator under the A.P. Co-operative Societies Act, was not tenable in law. Her contention is that the authorities operated under separate enactments and therefore, the authorities under the Shops and Establishments Act ought not to have been influenced by the findings of the Arbitrator, who had dealt with the matter in pursuance of Section 61 proceedings under the A.P. Co- operative Societies Act, 1964. She contended that the degree of proof in disciplinary matters varies from that in arbitration proceedings and therefore, the finding of the arbitrator as regards the failure of the appellant to prove the guilt of the 3rd respondent-employee, cannot be binding either upon the disciplinary authorities or the appellate authorities under the Shops and Establishment Act. We are unable to accept this submission. Once the statutory arbitrator in exercise of powers under Section 61 of the A.P. Co- operative Societies Act, 1964, considered the matter on merits and came to the conclusion that the 3rd respondent-employee was not liable to be penalized for the alleged loss said to have been caused to the appellant and gave him a clean chit, such finding would have to be given due weightage and cannot be brushed aside lightly in the disciplinary proceedings initiated separately by the appellant organization. It is no doubt true that Section 61 of the Andhra Pradesh Co- operative Societies Act, 1964, specifically excludes a dispute regarding disciplinary action taken by a society or its committee against a paid employee from the ambit of disputes which may be referred to the Registrar for arbitration. We are also conscious of the fact that the Supreme Court in U.P. CO-OP. CANE UNION FEDEATION LTD. V. LILADHAR[1] affirmed that a dispute arising out of a disciplinary proceeding resulting in the dismissal of an employee of the society cannot be said to be a dispute touching the business of the society. However, in the present case, what was referred to the statutory arbitrator under Section 61 of the Act of 1964 was not the dispute regarding the disciplinary action taken by the appellant against the third respondent-employee, but the action of the appellant in demanding the amount of Rs.94,107/- from the third respondent-employee towards the alleged deficit/loss. It was on the basis of the adjudication of this dispute that the statutory arbitrator came to the conclusion that the appellant failed to prove that the third respondent employee was responsible for the alleged loss and that he had misappropriated the said amount. It is relevant to note that the evidence and material considered by the statutory arbitrator was identical to that before the disciplinary authority, in as much as the charge against the third respondent- employee, being the alleged misappropriation by him of the sum of Rs.94,107/-, was the subject matter of both the proceedings. It is also pertinent to note that the appellant participated in the arbitration proceedings before the statutory arbitrator and suffered the order, without raising any protest as to the conduct of those proceedings. Under Section 61(2) of the Act of 1964, it was open to the appellant to raise that issue and as per Section 61(2), if any question arose whether a dispute referred to the Registrar under Section 61 was a dispute touching the constitution, management or the business of the society, such question had to be decided by the Registrar. The appellant did not choose to invoke this provision. Thus, having invited an adverse Award under Section 61 of the Act of 1964, it is no longer open to the appellant herein to seek to draw a distinction between the two proceedings and support its disciplinary action, based on findings diametrically opposed to those recorded by the statutory arbitrator in his Award. I n G.M. Tank Vs. State of Gujarat and another[2], the Supreme Court held that if the charges in the disciplinary proceedings and the criminal case are based on identical and similar set of facts, the charge is the same in both proceedings and if the criminal proceedings ended in honourable acquittal, it would be unjust, unfair and rather oppressive to allow the contrary findings recorded in the disciplinary proceedings to stand. In the present case, no doubt we are concerned with findings recorded in arbitration proceedings and not in criminal proceedings, but the principle laid down by the Supreme Court in G.M. Tank is squarely applicable. In that view of the matter, the findings of the statutory arbitrator in the arbitration proceedings initiated under the A.P. Co-operative Societies Act, 1964 would bind the appellant and the orders passed by the authorities under the A.P. Shops and Establishments Act, 1988, duly recognizing this principle cannot be found fault with. We therefore find no merits in this appeal, warranting interference with the order passed by the learned single Judge. The writ appeal is accordingly dismissed. There shall be no order as to costs. _________________________ Justice T. Meena Kumari ______________________ Justice Sanjay Kumar Date: 21st October, 2009 Nn. THE HON'BLE SMT JUSTICE T.MEENA KUMARI & THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO : 686 of 2007 (Judgment delivered by the Hon’ble Sri Justice Sanjay Kumar) 21st October, 2009 [1] 1980 (Supp.) SCC 437 [2] (2006) 5 SCC 446