General Manager The Thalassery Co-operative Rural Bank Ltd. v. C. Mukundan

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** ## **&** **THE HONOURABLE MR. JUSTICE K.HARIPAL** **MONDAY, THE 25TH DAY OF JANUARY 2021 / 5TH MAGHA, 1942** **WA.No.1277 OF 2020** **AGAINST THE JUDGMENT DATED 06.02.2020 IN WP(C) 1029/2020(C) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **GENERAL MANAGER THE THALASSERY CO-OPERATIVE RURAL BANK LTD. F1263,H.O.THALASSERY,P.O.THIRUVANGAD, KANNUR DISTRICT,PIN-670103.** **BY ADVS. SRI.P.U.SHAILAJAN SRI.V.SREEJITH SMT.VIDYA KURIAKOSE** ## **RESPONDENTS/RESPONDENTS:** **1 C.MUKUNDAN RETIRED ACCOUNTANT,THALASSERY CO-OPERATIVE RURAL BANK LTD,MAYURAM,POST PALAYAD,THALASSERY, KANNUR DISTRICT,PIN-670661.** **2 THE CO-OPERATIVE ARBITRATION COURT(NORTHERN), HOUSE FED COMPLEX,5TH FLOOR,** **SASTHRI NAGAR ROAD,ERANHIPALAM.P.O,KOZHIKODE-673006.** **R1 BY ADV.SRI.JAWAHAR JOSE RW BY SR.GOVT.PLEADER SMT.K.R.DEEPA** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 05-01-2021, THE COURT ON 25-01-2021 DELIVERED THE FOLLOWING:** **W.A.1277/2020 :2:** **'C.R.'** ## **JUDGMENT** _Haripal, J._ This is the tail-piece of a disciplinary proceedings initiated against the 1[st] respondent way-back in 1984 which culminated in his demotion to a lower cadre; ultimately, after playing a long 'snake and ladder' game, matters ended in his favour by the Ext.P4 judgment of this Court dated 12.01.2016. By the time he had already retired from service on 30.09.2007; thereafter he moved the Co-operative Arbitration Court under Section 69(c) of the Kerala Co-operative Societies Act, 1969, hereinafter referred to as 'the Act', read with Rule 67 of the Co-operative Societies Rules, seeking certain reliefs. The appellant, who is the respondent in the Arbitration Case, challenged the maintainability of the proceedings. The 2[nd] respondent, the Arbitration Court dismissed that application and found the case maintainable, against which the appellant moved this Court with W.P(C) No.1029/2020. The learned single Judge dismissed the writ **W.A.1277/2020 :3:** petition by the impugned judgment, which has been called in question before this Court under Section 5 of the High Court Act. 2. We heard Sri. P.U.Shylajan, the learned counsel for the appellant and Sri. Jawahar Jose, the learned counsel appearing for the 1[st] respondent, in detail. 3. Before adverting to the arguments, it would be advantageous to state in brief the sequence of events that led to the filing of this appeal. The 1[st] respondent had started his career in the appellant Bank as a last grade employee who ascended the ladder of service; while working as Senior Clerk, he was promoted to the post of Accountant, a cadre equivalent to the post of Internal Auditor, on 01.08.1984. Thereafter, on the allegation of misconduct and dereliction of duty, a punishment of demotion as Senior Clerk was imposed on him with effect from 15.02.1985, besides his promotion from the demoted post was barred for a period of two years. He preferred an appeal before the managing committee, which allowed the appeal in part and set aside the punishment of barring of promotion for two years. Against the order of demotion he filed ARC **W.A.1277/2020 :4:** No.340/84-85 which was dismissed by the Joint Registrar. Against that dismissal an appeal was preferred before the Government; allowing the appeal the matter was remanded to the Joint Registrar for fresh disposal. Against that decision the 1[st] respondent moved the Cooperative Tribunal as A.P. No.123/1993. Meanwhile the Administrator who was in power promoted the 1[st] respondent to the post of Accountant with effect from 01.07.1993. The Co-operative Tribunal set aside the order of the Joint Registrar and remanded the matter to the Joint Registrar for fresh disposal. By the time, consequent to the amendment that led to the incorporation of Section 69(2) in the Act, the matter was transferred to the Co-operative Arbitration Court. Meanwhile the 1[st] retired on on respondent superannuation 30.09.2007. On 27.08.2012 the Arbitration Court set aside the punishment imposed on him and held that he is entitled to get all consequential benefits including backwages, to which he is entitled in the normal course as if he had been in service at all point of time. Ultimately, by Ext.P4 judgment of this Court dated 12.01.2016 that finding has been given a quietus. Later the 1[st] respondent moved the ## **W.A.1277/2020 :5:** 2[nd] respondent with ARC No.22/2017 claiming that, had he been not demoted, he would have been promoted as Chief Accountant/Manager/Assistant Secretary, which are all posts of the same cadre with effect from 01.11.1993. He moved for backwages for the period from 15.02.1985, the date on which he was demoted as Senior Clerk, till 30.06.1993, that is the period he remained in the demoted cadre. Earlier, backwages were partially paid and he moved Ext.P1 claim amended by Ext.P6 before the 2[nd] respondent seeking the following reliefs:- “(a) determining the balance amount due to the plaintiff from the defendant at Rs.282191/- or any such amount this Honourable court finds as correctly due; (b) directing the defendant to pay interest on the amount so determined at 12% till date of actual payment; (c) granting such other and further reliefs which this Honourable court deems fit to grant in the circumstances of the case.” 4. The appellant who is the defendant in the said claim moved I.A.No.19/2018 before the 2[nd] respondent challenging the maintainability of the proceedings. The 2[nd] respondent, who heard the question, took note of the fact, after analysing rival contentions, that ## **W.A.1277/2020 :6:** the suit is 'one seeking declaration about his (i.e. the 1[st] respondent's) service benefits'. He sought a declaration that balance amounts are due to him towards gratuity from the Life Insurance Corporation of India. The 2[nd] respondent also noticed that it is to be decided whether the exemption of promotion was prompt or not. So the 2[nd] respondent concluded that these disputes come under the purview of Section 69 of the Act and on that basis the application was dismissed. Challenging the correctness of that order the appellant moved W.P(C) No.1029/2020 seeking a writ of certiorari or any writ or order for quashing Ext.P5 and also to declare that ARC No.22/2017 is not maintainable before the 2[nd] respondent. 5. The basis of the contention of the appellant is that the said ARC was moved by the 1[st] respondent claiming balance amount of Rs.2,82,191/- or such amount, which is purely a monetary claim, which is a matter to be adjudicated by the Registrar under Section 69 of the Act and not by the 2[nd] respondent. After considering the facts and circumstances of the case and also hearing the arguments of the counsel, the learned Single Judge found that the reasoning of the 2[nd] **W.A.1277/2020 :7:** respondent in Ext.P5 is _prima facie_ correct. Therefore, the learned Judge directed the 2[nd] respondent to complete the proceedings within a period of three months from the date of receipt of a copy of the judgment. With that direction the writ petition was dismissed. Aggrieved by the same, the appellant has moved this appeal. 6. The learned counsel for the appellant reiterated that it is a monetary claim in continuation of the earlier proceedings which falls within the scope of Section 69(h) of the Act. Therefore, the 2[nd] respondent has no jurisdiction to entertain the dispute; it is a matter to be adjudicated by the Registrar. He also placed reliance on the decision reported in **Sankara Wariyar v. President, North Malabar Dist. C.S.M. Society Ltd. (1986 KLT 812)** . On the other hand, the learned counsel appearing for the 1[st] respondent pointed out that the said decision has no application since it was rendered prior to the incorporation of Section 69(2) of the Act, on 02.01.2003. According to him, by virtue of Section 69(2)(d) it has become a matter falling within the jurisdiction of the 2[nd] respondent alone. Referring to Section 69(2)(d) it was pointed out that by virtue of the provisions and ## **W.A.1277/2020 :8:** employment of the term 'any' preceding 'dispute' and also the term 'including', the scope of the dispute stands enlarged, that such a dispute cannot be adjudicated by the Registrar. 7. It is the common case that this is not a dispute as defined under Section 2(i) of the Act. The 1[st] respondent was an employee under the appellant and had to face disciplinary proceedings which led to the initiation of various proceedings before different fora. The sequence of events and the fact that he retired on superannuation on 30.09.2007 are not in dispute. Similarly, it is the common case that while working as Accountant he was demoted to the category of Senior Clerk on 15.02.1985. Thereafter he stood promoted as Accountant on 01.07.1993. It is also the common case that the proceedings of the appellant demoting him as Senior Clerk stood quashed and those proceedings have become final by virtue of the Ext.P4 judgment of this Court. 8. The question hinges on the core issue as to what is the point sought to be decided by the 2[nd] respondent. If the matter to be decided in Ext.P1, amended by Ext.P6, is a claim for monetary reliefs ## **W.A.1277/2020 :9:** pure and simple, that is a matter to be adjudicated by the Registrar; on the other hand, if incidental questions or matters relating to service, by virtue of his past employment in the appellant bank, are also involved, such questions cannot be adjudicated by the Registrar and in that event it will fall within the jurisdiction of the 2[nd] respondent. 9. No doubt, by virtue of the deeming provision in Section 69(2) of the Act, those matters enumerated therein also fall within the scope of a dispute to be adjudicated either by the Registrar or the Arbitration Court, as the case may be. While dealing with a question touching the promotion and _inter se_ seniority, a learned Single Judge of this Court in **Board of Directors, Edava Service Coop. Bank Ltd. and another v. Cooperative Arbitration Court and others [2008 (3) KLT 780]** held thus:- “5. Sub-section (2) of S.69 opens with a deeming provision, which is a legislative device applied to create a legal fiction; to give a term a particular meaning by the application of such deeming provision, it is settled law that where a legal fiction is created, full effect must be given to it and it should be carried to its logical end. Boucher Pierre Andre v. Superintendent, Central Jail, **W.A.1277/2020 :10:** AIR 1975 SC 164: 1975 CriLJ 182: 1975 (1) SCC 192: 1975 SCC (Cri) 70: 1975 (2) SCJ 523. In construing and applying a deeming provision, the limits of that deeming provision have to be determined and within those limits, the situation that is to be deemed has to be permitted to flow freely. While a fiction cannot be extended beyond its legitimate field, it must be allowed full operation within its intended sphere – Ali v. Kunjannamma, 1975 KHC 47: 1975 KLT 527: ILR 1975 (2) Ker. 334. 6. So understood, the legislative mandate contained in the opening words of sub-section (2) of S.69 read with Clause (2) of that sub-section is to treat any dispute arising in connection with employment of officers and servants as a dispute for the purpose of sub-section (1) of S.69. The object of that fiction is to bring all disputes in connection with employment in a Cooperative Society under the purview of arbitration to the exclusion of other Courts and authorities. Therefore, in interpreting the said provision, that fiction has to be carried to its logical conclusion, subject only to the inhibition that such fiction should not be extended beyond its legitimate field. The mode in which the deeming provision is used in S.69 is only to give full play to the fiction and the object of its creation, namely, the exclusive conferment of authority with the Cooperative Arbitration Courts or Arbitrators, as the case may be, to decide the disputes.” ## **W.A.1277/2020 :11:** 10. We are fully in agreement with the observations made by the learned Single Judge. Similarly, a Division Bench of this Court in **P.S. Ravendran v. State of Kerala and others [2007 (3) KHC 780:ILR 2007 (3) Ker. 241]** has clarified that any dispute arising in connection with employment of officers and servants of the different classes of societies specified in sub-section (1) of Section 80 including their promotion and _inter se_ seniority is to be decided by the Arbitration Court. 11. Similarly, as rightly pointed out by the learned counsel for the 1[st] respondent, the term 'any' preceding 'dispute' and 'including' appearing in Section 69(2)(d) of the Act are really eye openers. Those usages expand the scope of the dispute provided in Section 69(2). In this connection, the Hon'ble Apex Court in **P. Kasilingam and others** **v. P.S.G. College of Technology and others [1995 Supp (2) SCC 348]** held that:- “19. ............ The word 'includes' when used, enlarges the meaning of the expression defined so as to comprehend not only such things as they signify according to their **W.A.1277/2020 :12:** natural import but also those things which the clause declares that they shall include. The words 'means and includes', on the other hand, indicate 'an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions. …........” Similarly, in **Bharat Co-operative Bank Mumbai Ltd. v. Cooperative Bank Employees Union [(2007) 4 SCC 685]** it is held that when the word 'includes' is used in the definition, the legislature does not intend to restrict the definition; makes the definition enumerative but not exhaustive. 12. This being the position and having regard to the terminology of Section 69(2)(d) of the Act, we have to consider whether the matter sought to be adjudicated is merely monetary simpliciter or whether the issue of monetary benefits is only a consequential one that may crop up subject to the outcome of a service related dispute. For this we have to look into Ext.P1 plaint amended by Ext.P6 pending before the 2[nd] respondent. As noticed earlier, the definite case of the 1[st] respondent is that he was demoted as Senior Clerk while working as Accountant without following procedural ## **W.A.1277/2020 :13:** formalities. Ultimately that position has been accepted. It is the definite case of the 1[st] respondent that he was eligible to be promoted to the cadre of Chief Accountant/ Manager/Assistant Secretary, which are all posts of identical cadre, with effect from 01.11.1993; that his immediate junior one E.Damodaran was promoted as Chief Accountant on 01.11.1993, overlooking his seniority that he should have been promoted in the place of Sri. Damodaran and thus by virtue of the pronouncements from judicial fora he is entitled to get all service benefits. In para-7 of the claim he has stated thus: “7. So it has become necessary to determine the correct amount due to the plaintiff as per the decision shown above. Even though the plaintiff is entitled to all the benefits enjoyed by his juniors promoted to higher posts ignoring the legitimate rights the plaintiff from holding that posts, for avoiding the delay he is claiming the benefits only on the basis of statutory Grade Promotions from post of Internal Auditor. The detailed calculation is shown in the schedule attached herewith. As per the Schedule the plaintiff entitled to receive an amount of Rs.28,96,395/- less Rs.74,454/- already received on 19.12.2016 with 12% future interest till payment of it.” ## **W.A.1277/2020 :14:** 13. Viewing the question in this backdrop, we are also of the view that the learned Single Judge has correctly upheld the Ext.P5 order. In other words, it is not a money claim simpliciter but service related issues also are required to be adjudicated by the 2[nd] respondent and then only he will be able to quantify the amount, if any, liable to be paid by the appellant. We may hasten to add that we shall not be understood to have held that the 1[st] respondent is entitled to such service benefits as claimed. In other words, we make it clear that we have not made any observation on merits in regard to such issues. We also make it clear that we have not made any opinion as to the legal entitlement of the 1[st] respondent to raise such issues in ARC No.22/2017 in view of the earlier litigations as also his entitlement to such service benefits. That can be done only by the Co-operative Arbitration Court. 14. On these considerations we do not find any merit in this appeal. It is only to be dismissed. We do so. While dismissing the writ petition the learned Single Judge had put a time limit of three months to dispose of the proceedings. The 1[st] **W.A.1277/2020 :15:** respondent being a septuagenarian, there is no point in delaying the matter further. Therefore, we direct the 2[nd] respondent to dispose of the proceedings within a period of two months from the date of receipt of a copy of this judgment. Sd/- **C.T. RAVIKUMAR JUDGE** Sd/- **K.HARIPAL JUDGE** okb/07.01.2021 //True copy// P.S. to Judge