High Court of KeralaSingle Judge2021-02-05Dismissed

N. Viswanathan v. Kerala Co-operative Tribunal, Oottukuzhi, Palayam, Thiruvananthapuram-695034 and Thiruvananthapuram Taluk Tax Drivers Co-operative Society Ltd., rep. by its Secretary

Case / Petition Number:WP(C).No.7134 OF 2020(N)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Amit Rawal
Judgment Date: 2021-02-05
Court Decision / Holding: Writ petition is dismissed. The High Court held that, given the facts (the petitioner was gainfully employed elsewhere and subsequently faced dismissal; misconduct involved misappropriation; lack of natural justice in the enquiry as noted by the Tribunal) the remedy is not to award compensation by the Tribunal but to follow the Civil/Labour Court route, especially in light of ML Singla and the Maharashtra case. The burden of proof on award of compensation under these circumstances was not satisfied, and thus there is no interference with the Tribunal’s decision.
Final Disposition: Dismissed

Parties to the Case

Appellants / Petitioners

N. Viswanathan

Respondents

Kerala Co-operative Tribunal, Oottukuzhi, Palayam, Thiruvananthapuram-695034
Thiruvananthapuram Taluk Tax Drivers Co-operative Society Ltd., No.T.723, Fort, Thiruvananthapuram-695023, rep. by its Secretary

Legal Representation & Advocates

Counsels for Petitioners

• Sri.B.S.Swathi Kumar
• Smt.Anitha Ravindran
• Sri.Harisankar N Unni
• Smt.P.S.Bhagya Surabhi

Counsels for Respondents

• Sri.N.Anand
• Sri.Bijith S.Khan

Case Synopsis & Summary

This writ petition challenges the validity of the order/dismissal of the petitioner from service in a cooperative society and the Tribunal’s decision not to grant compensation despite the petitioner having been gainfully employed elsewhere during the period of suspension and dismissal proceedings. The petitioner had been a salesman and cashier in the 2nd respondent society; a charge memo alleged misappropriation of funds with disputed entries in the cash book. After an enquiry and a two-stage process (an internal subcommittee, followed by ARC No.15/2005 before the Co-operative Arbitration Court), the ARC awarded liability for Rs.50,000, which the Tribunal set aside as illegal and without natural justice. The Tribunal’s ruling declined compensation; the petitioner challenged this in the High Court. The respondents argued that the Co-operative Tribunal cannot order reinstatement and that compensation, if any, must be sought before a Labour Court since the employee was gainfully employed elsewhere; they relied on ML Singla v. Punjab National Bank and Another and Ambika T.N v. Kottappady Service Co-op. Bank Ltd. The petitioner argued that Smitha K. v. Kerala Co-operative Tribunal supports compensation formulae, citing OP Bhandari. The judge distinguishes the Smitha K. ratio on the facts but refuses to grant compensation, endorsing the position from ML Singla and Maharashtra State Co-operative Housing Finance Corporation Ltd. v. Prabhakar Sitaram Bhandange and dismissing the petition.

Legal Doctrines & Maxims

Principle of natural justice

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that although he was suspended and a later disciplinary action led to dismissal, he was still entitled to compensation for the period of out-of-service, especially since he was gainfully employed elsewhere during the interim; reliance is placed on the Smitha K. ratio and the compensatory framework enunciated in OP Bhandari. The petitioner argues that the Tribunal’s approach undermines the principle of natural justice and the civil remedy principle, and that compensation should be available where termination is found improper or where the restoration option is limited by statutory or jurisprudential constraints.

Contentions of Respondents

The respondents submit that the Co-operative Arbitration Court/Tribunal lacks power to reinstate an employee and that the proper remedy is to seek compensation in the Civil/Labour Court, given the employee’s gainful employment during the period of out-of-service. They rely on M.L. Singla v. Punjab National Bank and Another (2018) 18 SCC 21 and Ambika T.N v. Kottappady Service Co-op. Bank Ltd. to argue that compensation should not be granted by the Tribunal in this context, and that, in the absence of exceptions, the remedy is civil suit; they also rely on the broader principles in Maharashtra State Co-operative Housing Finance Corp. v. Prabhakar Sitaram Bhandange (2017) to support their position.

Cited Precedents (5)

Case Name	Citation	Treatment	Explanation
Smitha K. v. Kerala Co-operative Tribunal, Thiruvananthapuram and Others	2020 (3) KHC 356	Distinguished	Cited as the authority for compensatory awards under the Smitha K. ratio, but the court distinguished it on the facts since the petitioner was gainfully employed and the circumstances do not fit the Smitha K. formula.
M.L Singla v. Punjab National Bank and Another	[(2018) 18 SCC 21]	Positive	Supreme Court held that the Tribunal has no power to order reinstatement; the remedy is a civil suit for damages; the High Court adopts this reasoning in rejecting compensation here.
Ambika T.N v. Kottappady Service Co-op. Bank Ltd.	2018(4)KHC 493	Distinguished	Division Bench held reinstatement possible for a statutory body; not applicable to the present case involving a cooperative society; used to frame the scope of reinstatement vs. civil remedy.
OP Bhandari v. Indian Tourism Development Corporation Ltd.	[1986 KHC 683]	Mentioned Only	Cited for the compensatory formula, but its direct application is limited; Smitha K. invoked the formula, which this case distinguishes.
Maharashtra State Co-operative Housing Finance Corporation Ltd. v. Prabhakar Sitaram Bhandange	[2017 (5) SCC 623]	Positive	Supreme Court held that remedy for wrongful termination is often a civil suit seeking declaration and damages; relied upon in support of the present decision.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **FRIDAY, THE 05TH DAY OF FEBRUARY 2021 / 16TH MAGHA,1942** ## **WP(C).No.7134 OF 2020(N)** ## **PETITIONER/S:** **N.VISWANATHAN T.C. 43/989, MURUGA BHAVAN, MANACUAD, THIRUVANANTHAPRUAM** **BY ADVS. SRI.B.S.SWATHI KUMAR SMT.ANITHA RAVINDRAN SRI.HARISANKAR N UNNI SMT.P.S.BHAGYA SURABHI** ## **RESPONDENT/S:** **1 KERALA CO-OPERATIVE TRIBUNAL OOTTUKUZHI, PALAYAM, THIRUVANANTHAPURAM-695 034 2 THIRUVANANTHAPURAM TALUK TAX DRIVERS, CO-OPERATIVE SOCIETY LTD NO.T.,723, FORT, THIRUVANANTHAPURAM,-695 023 REP. BY ITS SECRETARY R2 BY ADV. SRI.N.ANAND R2 BY ADV. SRI.BIJITH S.KHAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22-01-2021, THE COURT ON 05-02-2021 DELIVERED THE FOLLOWING:** **WP(C).No.7134 OF 2020(N)** **2** ## **JUDGMENT** ## **Dated this the 5[th] day of February 2021** The short question involved in the present case is whether an employee of the Co-operative Society, who has been dismissed from the service, by availing the alternative remedy before the Arbitration Court and Tribunal, can claim compensation despite gainful employed. 2. The facts in brief are, that the petitioner was appointed as a Salesman in the 2[nd] respondent and while holding the charge of cashier was served with a charge memo dated 18.1.2001 of having withdrawn Rs.50,000/- on 1.2.2000 but was not credited to the account of the 2[nd] respondent whereas Rs.8,000/- was deposited on 9.3.2000 as per the cash book, but actually not deposited in the District Co-operative Bank. 3. Petitioner submitted a detailed explanation. Dissatisfied with the reply, the petitioner paid the amount **WP(C).No.7134 OF 2020(N)** **3** of Rs.20,000/- under protest, but employer appointed Enquiry Officer. On the conclusion of the enquiry proceedings, received a show cause notice from the President of the 2[nd] respondent regarding proposal to impose punishment. The petitioner submitted an explanation by pointing out that the enquiry stood vitiated for the reason that it was not held in accordance with law. Thereafter, a subcommittee was constituted with two persons, which issued another show-cause notice and proposed the punishment of dismissal. It is in that circumstances, petitioner preferred ARC No.15/2005 before the Co-operative Arbitration Court, Thiruvananthapuram. After leading the evidence vide award dated 25.10.2018, the ARC aforementioned was dismissed. The said award was challenged before the Tribunal resulted into a judgment dated 31.10.2019, Ext.P1, whereby the enquiry report holding the petitioner liable to pay Rs.50,000/- was found to be illegal, improper and without following the principles of natural justice much less behind the back of the delinquent but relief qua **WP(C).No.7134 OF 2020(N)** **4** compensation was declined. 4. It is in this background, the petitioner has approached this Court for claiming the compensation. 5. On the other side, the learned counsel for the respondent submitted that the Tribunal has no power to order for reinstatement and the remedy for the petitioner is to claim compensation before the labour Court as during the period he remained out of service was gainfully employed with another employment, which also resulted into dismissal and another ARC is pending before the Arbitration Court. In support of the aforementioned contention, replied upon the ratio decidendi culled out by the Hon'ble Supreme Court in **M.L Singla v. Punjab National Bank and Another [(2018) 18 SCC 21]** as well as Division Bench judgment of this Court in **Ambika T.N v. Kottappady Service Co-op. Bank Ltd. [2018(4)KHC 493)** . 6. In rebuttal, learned counsel for the petitioner relied upon the judgment of Single Bench of this Court in **Smitha K. v. Kerala Co-operative Tribunal,** **WP(C).No.7134 OF 2020(N)** **5** ## **Thiruvananthapuram and Others [2020 (3) KHC 356]** wherein the compensation was awarded applying the formula enunciated in the judgment of **O.P Bhandari v.** ## **Indian Tourism Development Corporation Ltd., [1986 KHC 683]** . **7.** I have heard the learned counsel for the parties and appraised the paper book. To decide the question raised above, the facts of the case as noticed above are not in dispute. It is a conceded position on record that the petitioner was suspended from the service and thereafter punishment of dismissal was proposed. Petitioner was gainfully employed in another society called REPSCO, where he was also dismissed from the service on account of allegation of misappropriation. The said dismissal is under challenge and pending consideration in another Arbitration Court at the instance of the petitioner. It is not the case of the petitioner that on account of termination of the service, he remained out of service without any salary and therefore was entitled to compensation as the report of the enquiry officer has not **WP(C).No.7134 OF 2020(N)** **6** been found tenable, being, against the principle of natural justice. The ratio culled out in the judgment of Smitha K. (supra) was in respect of a case, where the delinquent employee was, after consideration of the matter awarded compensation as per the formula arrived at in O.P Bhandari (supra). There is no dispute to the ratio culled out but the facts as noticed above reveal that the petitioner was gainfully employed and has also been dismissed on account of misappropriation and therefore his conduct cannot go unnoticed. The Division Bench in **Ambika T.N** (supra) held that in the case of a statutory body, its employee can be reinstated when the impugned action was in breach of the mandatory obligations imposed by the Statute and under that circumstances, is required to raise industrial dispute. Otherwise, the employee who do no fall in any of the exceptions culled out in paragraph 6 of the order and as per the judgment of Supreme Court in **Maharashtra State Co-operative Housing Finance Corporation Ltd. v. Prabhakar Sitaram Bhandange [2017 (5) SCC 623],** the remedy **WP(C).No.7134 OF 2020(N)** **7** is to only file a suit in civil court seeking declaration that termination was wrongful and claim damages. For the reason aforementioned, I am of the view that it is not a fit case warranting any interference for awarding compensation as claimed for. Writ petition is accordingly, dismissed. **Sd/-** sab **AMIT RAWAL JUDGE** **WP(C).No.7134 OF 2020(N)** **8** ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1** **TRUE COPY OF THE JUDGMENT IN APPEAL NO.20/2019 DATED 31.10.2019 OF THE 1ST RESPONDENT**