Kandaloor Farmers Service Co-Operative Bank Limited v. S. Devarajan and The Kerala Cooperative Arbitration Court & The Kerala Cooperative Tribunal

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **MONDAY, THE 17TH DAY OF AUGUST 2020 / 26TH SRAVANA, 1942** ## **WP(C).No.8886 OF 2017(I)** ## **PETITIONERS:** **1 KANDALOOR FARMERS SERVICE CO-OPERATIVE - BANK LIMITED NO.1410, KANDALOOR KAYAMKULAM,REPRESENTED BY ITS MANAGING DIRECTOR.** - **2 THE PRESIDENT, KANDALOOR FARMERS SERCIVE CO-OPERATIVE BANK LTD.NO.1410, KANDALLOOR KAYAMKULAM.** **BY ADV. SRI.P.P.JACOB** ## **RESPONDENTS:** **1 S. DEVARAJAN, MANAGING DIRECTOR (UNDER SUSPENSION),KANDALOOR FARMERS SERCIVE CO-OPERATIVE BANK LTD.NO.1410,KANDALLOOR KAYAMKULAM(UNDER SUSPENSIONNOW RETIRED),RESIDING AT NADASSERIL HOUSE, KANDALLOOR SOUTH,KAYAMKULAM, PIN-690 535.** - **2 THE KERALA CO-OPERATIVE ARBITRATION COURT T.C.NO. 28/995 (3) NEAR BSNL EXCHANGE,KAITHAMUKKU, FORT.P.O., THIRUVANANTHAPURM-695 023.** - **3 THE KERALA CO-OPERATIVE TRIBUNAL, PANDARATHOPP LANE,SREEKANDESWARAM, FORT.P.O.,THIRUVANANTHAPURAM-695 023.** - **R1 BY ADV. SRI.R.LAKSHMI NARAYAN R1 BY ADV. SMT.R.RANJANIE** - **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON** - **17.08.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W.P.(C) No.8886 of 2017 = = = = = = = = = = = = = = = = = = Dated this the 17[th] day of August, 2020** ## **JUDGMENT** The writ petition relates to a disciplinary proceedings against first respondent (hereinafter referred to as “the delinquent”) who was working as the Managing Director of the appellant Co-operative Bank. 2. Heard Sri.P.P.Jacob the learned counsel for the Bank, and Smt.R.Ranjanie the learned counsel for the delinquent. 3. The delinquent while working as Managing Director, was as per order dated 19.10.2001, placed under suspension alleging misconduct in relation to the selection of Peon in the Bank. The delinquent was found guilty and punishment was imposed reverting him to the post of Junior Clerk. The appeal filed by him before the Board of Directors was dismissed. 4. The delinquent approached the Arbitration Court, which passed award dated 19.10.2007 W.P.(C) No.8886 of 2017 :- 2 :- invalidating the disciplinary proceedings on the ground of violation of principles of natural justice since the copy of the enquiry report was not furnished to the delinquent before the findings in the report were accepted by the committee. 5. The Bank filed an appeal before the Cooperative Tribunal as A.P. No.37/2007. The Tribunal allowed the appeal and confirmed the order of the disciplinary authority. However, the Tribunal reduced the punishment as reversion to the post of Senior Accountant. 6. The delinquent filed W.P.(C) No.14116/2009 challenging the judgment of the Tribunal. He also filed W.P.(C) No.10926/2010 seeking disbursal of retirement benefits since pending the proceedings before the Tribunal, the delinquent attained the age of superannuation. The learned Judge held that the non-furnishing of the copy of the report before its acceptance amounted to violation of natural justice, and accordingly interfered with the judgment of the Tribunal. It was directed that the delinquent must be deemed to have retired from W.P.(C) No.8886 of 2017 :- 3 :- service without any punishment. 7. The Bank carried the matter in Writ Appeal Nos.1650/2012 and 1652/2012. The Division Bench, referring to the judgment of the Apex Court in _**Managing Director, E.C.I.L, v. B. Karunakar (1993) 4 SCC 727**_ held that, mere non-furnishing of copy of the enquiry report need not vitiate the disciplinary proceedings and that the question as to whether any prejudice has been caused to the delinquent consequent to the non-furnishing of the report has not been raised or considered by the authorities. Accordingly, the proceedings were interfered with and the matter was remitted to the Arbitration Court to examine the question of prejudice caused due to the non-furnishing of the report. It would be apposite to refer to paragraph 13 of the judgment which reads thus:- _“In such circumstances, according to us, the proper course would be to set aside Ext.P5 award of the Arbitration Court and Ext.P6 order of the Tribunal and to remit the matter back to the Arbitration Court with a direction to examine the_ W.P.(C) No.8886 of 2017 :- 4 :- _question as to whether, as a result of the failure to furnish the report of the enquiry officer to the delinquent before its acceptance by the disciplinary authority, any prejudice was caused to him. Needless to say that in the meanwhile, since the delinquent has attained the age of superannuation, there is no question of continuing the disciplinary action against him. Therefore, if the finding of the arbitration court is that the delinquent succeeded in proving that prejudice was caused, naturally, the entire disciplinary action will have to come to a stop with such a finding.”_ ## 8. As regards the claim for retirement benefits, it was directed thus:- _“At present, the delinquent can aspire to get terminal benefits only at the rate as applicable to the post of Junior Clerk to which he was reverted by Ext.P1 order dated 14.01.2003 and further claim, if any, can only be based on the fresh orders that are to be passed by the arbitration Court.”_ W.P.(C) No.8886 of 2017 :- 5 :- 9. After remand, additional pleadings and evidence were brought in before the Arbitrator. As per Ext.P7 order dated 06.11.2015, the Arbitrator found that no prejudice was caused to the delinquent consequent to the non-furnishing of the report. It was held that the delinquent is eligible for retirement benefits as that of a Junior Clerk viz. the post to which he was reverted. 10. Challenging the award, the delinquent approached the Tribunal in A.P. 49/2016. As per Ext.P9 judgment dated 30.01.2017, the Tribunal found that the prejudice has resulted to the delinquent consequent to the non-furnishing of the enquiry report and accordingly the proceedings were set aside. It was directed that the delinquent be granted all service and retirement benefits as Managing Director. Since the delinquent had not worked either as Managing Director or Junior Clerk after his suspension, the claim for wages was left open to be decided by the Bank, whether it could be treated as eligible leave or otherwise. The operative portion of the judgment of the Tribunal W.P.(C) No.8886 of 2017 :- 6 :- ## reads thus:- _“Appeal allowed. The impugned award passed by the Co-operative Arbitration Court, Thiruvananthapuram in A.R.C. No.50/2003 dated 06.11.2015 is set aside and a modified award passed in the A.R.C. as follows:_ _a) A.R.C. No.50/2003 allowed and set aside the resolution of the disciplinary sub-committee reverting the Appellant/Plaintiff from the post of Managing Director to the post of Junior Clerk._ _b) Respondent is directed to treat the appellant as retired from service without imposing any punishment and continuity of service as Managing Director and eligible for all service benefits and retirement benefits._ _c) The respondent is at liberty to consider the eligibility of appellant for salary for the period of absence from service and whether that period can be treated as eligible leave or other leaves and decide it and communicate the same to appellant within two months.”_ 11. The Bank challenges the above directions. According to the Bank, the finding of the Tribunal that, prejudice has been caused to the delinquent W.P.(C) No.8886 of 2017 :- 7 :- consequent on the non-furnishing of the enquiry report, is factually incorrect. 12. I am unable to subscribe to the contention of the petitioner-Bank. The Convener of the subCommittee appeared as a witness for the management in the enquiry. The findings in the enquiry report relying on his evidence would have been open to challenge by the delinquent to contend against the acceptability of the report, if a copy of the same was furnished to him. It was the case of the delinquent that the alleged corrections in the mark list were made by four named Managing Committee members. The said persons were members of the disciplinary sub-committee. Therefore, the acceptance of the report without hearing the delinquent has vitiated the proceedings. That apart, the charge memo based on which the enquiry was conducted, was issued by the disciplinary SubCommittee. The same has been held to be bad in law, by a Division Bench of this Court in _**Kodanchery Service**_ . _**Co-operative Bank Ltd. v. Joshy Varghese [2020 (4) KLT 129]**_ W.P.(C) No.8886 of 2017 :- 8 :- Therefore, the finding of the Tribunal that the proceedings are vitiated, suffers from no infirmity and warrants no interference. The writ petition lacks merit and is accordingly dismissed. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **WP(C).No.8886 OF 2017(I)** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE PHOTOCOPY OF THE A.R.C. 50/2003 FILED BY THE FIRST RESPONDENT DATED 6.6.2003.** **EXHIBTI P2 TRUE PHOTOCOPY OF THE JUDGMENT IN A.P. 37/2007 DATED 16.3.2009 ON THE LIFE OF THE KERALA CO-OPERATIVE TRIBUNAL.** **EXHIBIT P3 TRUE PHOTOCOPY OF THE COMMON JUDGMENT IN W.A.NO. 1650/2012 DATED 24.7.2012.** - **EXHIBIT P4 TRUE PHOTOCOPY OF THE PROOF AFFIDAVIT FILED BY THE FIRST RESPONDENT DATED 1.7.2014 BEFORE THE SECOND RESPONDENT.** - **EXHIBIT P5 TRUE PHOTOCOPY OF THE PROOF AFFIDAVIT FILED BY THE PETITIONER DATED 5.1.2015 BEFORE THE SECOND RESPONDENT.** - **EXHIBIT P6 TRUE PHOTOCOPY OF THE RELEVANT PORTION OF THE CROSS EXAMINATION CONDUCTED ON 5.11.2014 BEFORE THE SECOND RESPONDENT.** - **EXHIBIT P7 TRUE PHOTOCOPY OF THE ORDER IN A.R.C 50/2015 DATED 6.11.2015.** - **EXHIBIT P8 TRUE PHOTOCOPY OF THE A.P. 49/2016 FILED BY THE FIRST RESPONDENT BEFORE THE THIRD RESPONDENT DATED 25.4.2016.** - **EXHIBIT P9 TRUE PHOTOCOPY OF THE JUDGMENT IN A.P. 49/2016 DATED 30.1.2017.** **EXH9IBIT P10 TRUE PHOTOCOPY OF THE JOINT STATEMENT FILED BY THE COMMITTEE OF THE SOCIETY ALONG WITH FIRST RESPONDENT PURSUANT TO RESOLUTION DATED 24.9.2001.** **RESPONDENT'S/S EXHIBITS:** **EXHIBIT R1 (1) THE PHOTOCOPY OF THE TABLE OF CALCULATION OF THE AMOUNT ENTITLED TO BE RECEIVED BY THE PETITIONER, ALONG WITH THE CALCULATION MADE FOR ARRIVING AT THE FIGURES IN THE DETAILED TABLE.** APPNENDIX/ **WP(C).No.8886 OF 2017(I)** -2- |**EXHIBIT R1 (2)**|**THE PHOTOCOPY OF THE CHEQUES DATED 17.1.2020**| |---|---| ||**RECEIVED BY THE PETITIONER IN THIS IA, AS**| ||**ISSUED BY THE 1ST PETITIONER IN THE WRIT**| ||**PETITION, FIRST RESPONDENT IN THIS I.A.**| |**EXHIBIT R1 (3)**|**THE PHOTOCOPY OF THE COVERING LETTER DATED**| ||**17.1.2020 ISSUED ALONG WITH CHEQUES.**| |**EXHIBIT R1 (4)**|**THE PHOTOCOPY OF THE TABLE SHOWING THE TOTAL**| ||**AMOUNT DUE AS PER EXT.P7 ORDER AND TYPED**| ||**LEGIBLE COPY.**| |**EXHIBIT R1(5)**|**THE PHOTOCOPY OF THE DETAILS OF CALCULATION**| ||**TO ARRIVE AT THE FIGURE GIVEN IN EXT.R1(4)**| ||**TABLE AND TYPED LEGIBLE COPY.**| |**EXHIBIT R1(6):**|**THE PHOTOCOPY OF THE CHARGE SHEET DATED**| ||**15/12/2001 ISSUED TO THE 1ST RESPONDENT.**| |**EXHIBIT R1(7):**|**THE PHOTOCOPY OF THE AWARD DATED 19/10/2007**| ||**PASSED BY THE SECOND RESPONDENT IN ARC**| ||**NO.50/2003.**| |**EXHIBIT R1(8):**|**THE PHOTOCOPY OF THE COMMUNICATIN DATED**| ||**26/12/2013 ISSUED BY THE FIRST PETITIONER TO**| ||**THE FIRST RESPONDENT.**| |**EXHIBIT R1(9):**|**THE PHOTOCOPY RELEVANT PAGES OF THE CLAUSE**| ||**28 OF THE BYELAWS OF THE KANDANOOR FARMERS**| ||**SERVICE CO-OPERATIVE BANK.**| |**EXHIBIT R1(10):**|**THE PHOTOCOPY OF THE ORDER OF THE HOINT**| ||**REGISTRAR (GENERAL) DATED 16/10/2001.**| |**EXHIBIT R1(11):**|**THE PHOTOCOPY OF THE ORDER DATED 29/08/2003**| ||**OF THE JOINT SECRETARY TO GOVERNMENT, CO-**| ||**OPERATIVE DEPARTMENT.**| |**EXHIBIT R1(12):**|**THE PHOTOCOPY OF THE JUDGMENT DATED**| ||**24/07/2012 IN WPC.NO.14116/2009.**| |**EXHIBIT R1(13):**|**THE PHOTOCOPY OF THE ARGUMENT NOTES**| ||**SUBMITTED BY THE 1ST RESPONDENT IN EXT.P8**| ||**APPEAL.**| |**EXHIBIT R1(16)**|**THE PHOTOCOPY OF THE SHOW CAUSE NOTICE DATED**| ||**9.1.2003 ISSUED TO THE PETITIONER.**| APPNENDIX/ **WP(C).No.8886 OF 2017(I)** -3- **EXHIBIT R1(17) THE PHOTOCOPY OF THE ADDITIONAL AFFIDAVIT DATED 14.12.2013 FILED BY THE PETITIONER IN A.R.C NO 5 OF 2003.** **EXHIBIT R 1(18) THE PHOTOCOPY OF THE PROOF AFFIDAVIT DATED 16.06.2015 FILED BY WITNESS K.NARAYANA PILLAI, IN A.R.C NO 50 OF 2003. EXHIBIT R1(19): THE PHOTOCOPY OF THE LETTER DATED 28/11/2007 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT R1(20): THE PHOTOCOPY OF THE LETTER DATED 30/11/2007, ISSUED TO THE PETITIONER. EXHIBIT R1(21): THE PHOTOCOPY OF THE DECISION OF THE BOARD OF THE 1ST RESPONDENT DATED 30/11/2007.** -----