SINI V.D. v. BRAHMAMANGALAM GRAMA SWARAJ SERVICE CO-OPERATIVE BANK LTD

**WP(C) NO. 15844 OF 2021** # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL MONDAY, THE 13[TH] DAY OF DECEMBER 2021 / 22ND AGRAHAYANA,** ## **1943** ## **PETITIONER :** **SINI V.D, W/O.RAJESH V.P., AGED 37 YEARS, VALIYAPARAMBIL HOUSE, KATTIKUNNU, CHEMBU P.O., PIN - 686 608, SENIOR CLERK, (DISMISSAL FROM SERVICE), BRAHMAMANGALAM GRAMA SWARAJ - SERVICE CO-OPERATIVE BANK LTD.NO.2966, BRAHMAMANGALAM P.O., KOTTAYAM DISTRICT - 682 614.** **BY ADVS.** **SEBASTIAN CHAMPAPPILLY M.V.LALU MATHEWS ABRAHAM P.MEACHINKARA GEORGE CLEETUS MARGARET MAUREEN DROSE** ## **RESPONDENTS :** - **1 BRAHMAMANGALAM GRAMA SWARAJ- SERVICE CO-OPERATIVE BANK LTD NO.2966, BRAHMAMANGALAM P.O., KOTTAYAM DISTRICT - 686 614, REP. BY ITS SECRETARY.** - **2 THE MANAGING COMMITTEE OF THE BHRAHMAMANGALAM GRAMA SWARAJ SERVICE CO-OPERATIVE BANK LTD. NO.2966, BRAHMAMANGALAM P.O., KOTTAYAM, PIN - 686 614, REP. BY ITS PRESIDENT.** - **3 THE DISCIPLINARY SUB COMMITTEE OF THE BRAHMAMANGALAM GRAMA SWARAJ SERVICE CO-OPERATIVE BANK LTD.NO.2966, BRAHMAMANGALAM P.O., KOTTAYAM, PIN - 686 614, REP. BY ITS CHAIRMAN, (K.G.ASHOK KUMAR).** - **4 V.MANOMOHAN, ADVOCATE/ENQUIRY OFFICER, BRAHMAMANGALAM GRAMA SWARAJ SERVICE CO-OPERATIVE BANK LTD.NO.2966, BRAHMAMANGALAM P.O., KOTTAYAM, PIN - 686 614.** **BY ADVS.A.AMRUTHA VIDYADHARAN & F.ANCY.** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C) NO.15844 OF 2021 2** ## **JUDGMENT** Two questions arose for interpretation and decision in this case are (i) whether despite having availed the alternate remedy under Section 62 (9)(2) of the Kerala Co-operative Societies Act, 1969 before the Arbitration Court against the order of removal dated 4-06-2020 Ext.P12, the petitioner can avail the remedy of writ petition (ii) Whether it could be a futile exercise to permit the petitioner to pursue the remedy of arbitration court when the impugned order Ext.P12 is lacking jurisdictional competence. 2. Petitioner while in charge of the Manager in December, 2018, was served with a suspension order dated 28.03.2019 and on 16.04.2019 Ext.P2, a common show cause was issued by the Chairman of Disciplinary Sub committee, respondent No.3 and Reply Ext.P3 dated 25.04.2019 was submitted. ## **WP(C) NO.15844 OF 2021 3** Dissatisfied with the reply, a memo of charges dated 13.05.2019 Ext.P4 was served by the Chairman of the Disciplinary Subcommittee. An explanation thereto vide Ext.P5 was submitted and on the basis of the same, vide impugned communication dated 4.06.2020 Ext.P12, was dismissed from the service. Counsel for the petitioner submits that before the petitioner could be suspended, had already informed the Managing Committee about the misappropriation committed by the Cashier. No doubt the petitioner had availed the remedy of appeal under Section 69(2)(d) Ext.P14, which is still pending. But it is the settled provision of law that despite having availed the efficacious remedy, if the order lacks the jurisdictional competence, remedy of writ under Article 226 of the Constitution of India can be availed in view of the law laid down by the Single Bench of this ## **WP(C) NO.15844 OF 2021 4** Court and reiterated in various judgments, including in judgment dated 22.06.2021 rendered in W.P(C) No.19884 of 2020 and W.P(C) No.6133 of 2021. In fact, as per the provisions of Rule 198 (2) of the Kerala Co-operative Society Rules, 1969, the Subcommittee is delegated to hold the enquiry but the removal cannot be done by the Chairman of the Subcommittee as if it is the competence of the Managing Committee. Ext.P12 reflects the violation of the aforementioned rules. 3. On the other hand, learned counsel representing the Society supported the order submitted that there has been a clear misappropriation of funds by the petitioner and various others who had been at the helm of affairs. The remedy of approaching the Managing Committee against the order has also not been done. Therefore, the writ petition is not ## **WP(C) NO.15844 OF 2021 5** maintainable besides the disputed question of facts cannot be adjudicated under Article 226 of the Constitution of India as it is in the domain of the arbitration court which is already in seizin of the matter. 4. I have heard the counsel for the parties. 5. Question of competence of courts are answered as following: concededly against the order of removal Ext.P12 remedy for the employee is to invoke the provision of Section 69 (2)(d) of Co-operative Societies Act, which reads as follows, and vide Ext.P14, it has been availed of: “(2)For the purposes of sub-section (1), the following shall also be deemed to be disputes, namely:- (d)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.” ## **WP(C) NO.15844 OF 2021 6** 6. However, Rule 198 prescribes the procedure of holding the domestic enquiry and imposition of the punishment,the same reads as follows : “ **198.Disciplinary Action** : (1) Any member of the establishment of a Co-operative Society may, for good and sufficient reasons, be punished by imposing any of the following penalties, namely:- (a) Censure; (b) Fine (in the case of employees in the last grade); (c) Withholding of increments with or without cumulative effect. (d) Withholding of promotion; (e) Recovery from pay of the whole or part of any pecuniary loss caused to the society, by negligences or breach of orders or otherwise; (f) Reduction to a lower rank; (g) Compulsory retirement; (h) Dismissal from service. (2) No kind of punishment shall be awarded to an employee unless he has been informed in writing of the grounds on which it is proposed to take action against and he has been afforded an opportunity including a personal hearing to defend himself. Every order awarding punishment shall be communicated to the employee concerned in writing stating the grounds on which the punishment has been awarded. (2A) The committee of a society shall constitute a disciplinary sub-committee consisting of not more than three of its members,of whom one shall be designated as Chairman, but the President of the committee of the society shall not be a member in the disciplinary sub-committee. **WP(C) NO.15844 OF 2021 7** (2B) The disciplinary sub-committee so constituted shall inquire into the charges against the employee either by themselves or by engaging an external agency. (3) The authority competent to impose the various penalties on different categories of employees shall be as shown in the table below:- |of employees<br>below:-|shall be as shown in the table|shall be as shown in the table| |---|---|---| |Rank of the employee|Authority competent to impose|| ||Penalties under (a) to (c)|Penalties under (d) to (h)| |Secretary/Manager or other chief<br>Executive<br>Ofcer<br>and<br>'[all<br>employees holding posts higher<br>than that of Sr.Clerk/Sr. Assistant/I<br>Grade Assistant/Equivalent other<br>employees with same or identical<br>scale of pay]|President/Chairman|Sub-Committee/ Executive<br>Committee| |All other employees|Secretary/Manager or other Chief<br>Executive Ofcer.|President| |(4)An appeal shall lie against every order imposing a penalty to the competent appellate<br>authority, shown in the table below:-||| |Rank of the appellant|Authority competent to|dispose of appeal against| ||Penalties under (a) to (c)|Penalties under (d) to (h)| |Secretary/Manager or other Chief<br>Executive<br>Ofcer<br>and<br>'[all<br>employees holding posts higher<br>than<br>that<br>of<br>Sr.Clerk/Sr.<br>Assistant/I<br>Grade<br>Assistant/Equivalent<br>other<br>employees with same or identical<br>scale of pay]|Executive Committee or Board of<br>Management|Board of Management| |All other employees|President|Executive Committee /<br>Board of Management| (5) No appeal shall be entertained if it is not preferred within a period of three months from the date of the order imposing the penalty. [Provided that where the penalties are imposed on employee by an administrator or an administrative committee,such employees can file appeal before the forthcoming elected committee and in such cases the restriction of three months shall not be applicable]. (6) An authority competent to appoint an employee may suspend him pending enquiry into serious charges against such employee. **WP(C) NO.15844 OF 2021 8** No employee shall however be kept under suspension for a period exceeding six months at a time. In no case an employee shall be kept under suspension for a continuous period exceeding one year without the prior approval of the Registrar. [An employee under suspension shall be entitled to subsistence allowance payable under the Kerala Payment of Subsistence Allowance Act,1972(27 of 1973)]. [Provided that an employee not coming under the purview of the Kerala Payment of Subsistence Allowance Act,1972(27 of 1973)shall be entitled to subsistence allowance at the rate admissible to State Government Employees as prescribed under the Kerala Service Rules.] (7) In the event of any pendancy of disciplinary proceedings against any employee of a co-operative society or any co-operative institution pursuant to any charge of grave misconduct, irregularity, corruption or other charge involving moral turpitude,no retirement benefits shall be sanctioned to such employee or retired employee and in case of sanctioning of any retirement benefits to any such employee or retired employee,the name and designation of the sanctioning authority together with the reason for such sanctioning shall be recorded by the sanctioning authority by himself and such authority shall be held responsible for any loss to the society owing to such sanctioning of retirement benefits if found that such sanctioning was unwarranted. (8) In respect of all employees save the Chief Executive Officer of a society,no retirement benefits shall be sanctioned and disbursed until after the due issuance of a Non-liability Certificate by the Chief Executive Officer and approval of the same by the committee of the society within thirty days from the date of retirement of such employee. In the event of the retirement of the Chief Executive ## **WP(C) NO.15844 OF 2021 9** Officer,the Non-liability Certificate shall be issued by the committee of the society. For any loss to the society due to the non adherence of the forgoing procedure, the Chief Executive Officer along with the committee of the society shall be held responsible collectively and severally in respect of the issuance of Nonliability Certificate to any employee other than the Chief Executive Officer and the members of the committee shall be held collectively and severally responsible for the issuance of Non-Liability Certificate to the Chief Executive Officer". 7. On perusal of the provisions extracted hereinabove, it is evident that Sub-Committee can conduct an enquiry but as per the punishment (major) is concerned, it is the competence of the Managing Committee. Ext.P12 dated 4.06.2020 removing the petitioner from the rolls of the Society concededly has been passed by the Chairman of the Disciplinary Sub-Committee. The aforementioned order lacks competence in view of the ratio decidendi culled out in various judgments and followed in Ext.P14. For the sake of brevity, the findings are extracted hereinbelow, to the effect that despite having ## **WP(C) NO.15844 OF 2021 10** availed the remedy of arbitration court, the affected party had availed the remedy under Article 226 of the Constitution of India. Paragraphs 7 to 10 of W.P(C) No.19884 of 2020 and W.P(C) No.6133 of 2021 reads as follows: “ 7. Evidently, memo of charges was issued by the Chairman of the Disciplinary Sub Committee. This Court had considered an identical question in W.P(C).22228 of 2019, a copy of the judgment of which is produced as Ext.P6. The question that came up before the learned Single Judge was whether the Disciplinary Sub Committee was competent to issue memo of charges. Answering this, learned Single Judge held that the disciplinary action against the employee of the Co-operative Society was covered by the statutory provisions referable to Rule 198 of the Kerala Co- operative Society Rules 1969. After analyzing the above statutory provision, it was concluded that the mandate under Rule 198(2) of the Act to take action against an employee is vested with the Managing Committee. The Managing Committee appointed under Sec.20 of the Act is entrusted with the power to manage the affairs of the society. It is the delegate of the general body. Therefore, they can delegate their function only if the byelaws or the statutory provisions confer power of delegation. It was held that, under Sec.27 of the Act, the final authority of the Society was vested with general body of the members. Rule 198(2B) of the Rules clearly points **WP(C) NO.15844 OF 2021 11** out the nature of the power conferred on the disciplinary committee. This committee is the delegate of the Managing Committee to inquire into the charges against the employees. Ultimately, the Court concluded that the Managing Committee alone has power to issue a charge memo. No power is conferred upon the Managing Committee to confer this power to a Sub Committee which is constituted as a disciplinary committee. The authority of the Sub Committee is limited to conducting an inquiry regarding the charges framed by the Managing Committee as against the employees. In that view of the matter, Managing Committee alone can issue memo of charges to the employee and not the Sub Committee. 8. This decision was followed by another Single Bench of this Court evidenced by Ext.P7 judgment in W.P(C).32805 of 2019 on identical facts. The judgment in W.P(C).22228 of 2019 was challenged by the bank in Writ Appeal No.11 of 2020. The Division Bench of this Court confirmed the view of the learned Single Judge by the decision reported in _**Kodenchery Service Co-operative Bank v. Joshy Varghese (2020(4) KLT 129)**_ . It was held by the Division Bench that the Constitution of the Disciplinary Sub Committee presupposes that a decision has been taken to initiate disciplinary proceedings against an employee or employees in respect of a misconduct and secondly, in pursuance of such decision, a memorandum of charges has been framed and issued. 9. These authoritative pronouncements clearly show that the jurisdiction of issuing memo of charges is vested with the Managing Committee of the Society which cannot further be delegated to a Disciplinary Sub Committee. The Sub ## **WP(C) NO.15844 OF 2021 12** Committee is vested with the power only of conducting a domestic enquiry. In the case at hand, it seems that the memo of charges was issued by Ext.P3 and after the conclusion of the enquiry, show cause notice was issued by the Disciplinary Sub Committee which itself issued Ext.P5 termination order. This seems to be without any jurisdiction. 10. In the light of the above conclusion, evidently, the issuance of Ext.P3 memo of charges dated 13.05.2019 by the Disciplinary Sub Committee is liable to be set aside. Necessarily, all further proceedings pursuant thereto become invalid. Consequently, the termination order is also without any legal backing and has to be set aside. Hence, in the light of the above finding quashing Ext.P3, all further proceedings leading to the termination also stand quashed. Necessarily, this should restore the employee back to the position as on prior to 13.05.2019." 8. In view of the above, since the questions raised herein were answered in favour of the petitioner, the petitioner is not prevented to avail the remedy of writ despite of having availed remedy of Arbitration court under Section 69(2)(d) of the Co-operative Societies Act as the impugned order is lacking the jurisdictional competence. It was the Managing Committee who could have passed the order. Therefore Ext.P12 is hereby quashed. The writ ## **WP(C) NO.15844 OF 2021 13** petitin is allowed. However, the observation of mine would not prevent the respondent Society to take action and follow up the procedure as strictly as provided under Rule 198 and in view of the observations hereinabove and the authoritative judgments cited **.** **Sd/-** **AMIT RAWAL** **JUDGE** amk ## **WP(C) NO.15844 OF 2021 14** ## **APPENDIX OF WP(C) 15844/2021** ## **PETITIONER'S EXHIBITS :** **Exhibit P1** **TRUE COPY OF THE COMMON ORDER OF SUSPENSION ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER AND KRISHNA KUMAR K.R. DATED 28/03/2019.** **Exhibit P2 TRUE COPY OF THE COMMON SHOW CAUSE NOTICE BEARING NO.686/19 ISSUED BY THE CHAIRMAN OF THE 3RD RESPONDENT TO THE PETITIONER AND KRISHNA KUMAR K.R. DATED 17/04/2019.** **Exhibit P3 TRUE COPY OF THE REPLY DATED 25/04/2019 GIVEN BY THE PETITIONER TO THE SHOW CAUSE NOTICE.** **Exhibit P4 TRUE COPY OF THE MEMORANDUM OF CHARGE DATED 13/05/2019 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT. Exhibit P5 TRUE COPY OF THE EXPLANATION DATED 27/05/2019 GIVEN BY THE PETITIONER TO THE 3RD RESPONDENT. Exhibit P6 TRUE COPY OF THE COMMUNICATION BEARING NO.758/19 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER DATED 12/06/2019 Exhibit P7 TRUE COPY OF THE APPLICATION GIVEN BY THE PETITIONER UNDER THE RIGHT TO INFORMATION ACT TO THE 1ST RESPONDENT DATED 9/10/2019.** **Exhibit P8 TRUE COPY OF THE REPLY RECEIVED FROM THE 1ST RESPONDENT. Exhibit P9 TRUE COPY OF THE LETTER GIVEN BY KRISHNA KUMAR K.R. IN ADMISSION OF HIS GUILT DATED 29/3/2019. Exhibit P10 TRUE COPY OF THE CHEQUE BEARING NO.872720 DATED 29/3/2019 FOR 2 LAKHS DRAWN ON PUNJAB NATIONAL BANK, FURNISHED BY KRISHNA KUMAR K.R.** **WP(C) NO.15844 OF 2021 15** **Exhibit P11 TRUE COPY OF THE REPLY TO THE SHOW CAUSE NOTICE GIVEN BY THE PETITIONER TO THE 3RD RESPONDENT DATED 27/05/2020.** **Exhibit P12 TRUE COPY OF THE ORDER OF THE 3RD RESPONDENT, DISMISSING THE PETITIONER FROM SERVICE DATED 04/06/2020.** **Exhibit P13 TRUE COPY OF THE ORDER ISSUED BY THE 3RD RESPONDENT DISMISSING KRISHNA KUMAR K.R. (CASHIER) FROM SERVICE DATED 04/06/2020. Exhibit P14 TRUE COPY OF THE APPLICATION FILED BY THE PETITIONER BEFORE THE CO-OPERATIVE ARBITRATION COURT, THIRUVANANTHAPURAM AS A.R.C.NO.25 OF 2020. Exhibit P15 TRUE COPY OF THE JUDGMENT IN WP(C) NO.22228 OF 2019 DATED 21/11/2019. Exhibit P16 TRUE COPY OF THE JUDGMENT IN KODENCHERY SERVICE CO-OPERATIVE BANK VS. JOSHY VARGHESE (2020(4) KLT 129)). Exhibit P17 TRUE COPY OF THE COMMON JUDGMENT IN WP(C) NO.19884 OF 2020 AND WP(C) NO.6133 OF 2021 DATED 22/6/2021.**