The Kuttamperoor Service Co-operative Bank Ltd. and The President v. C. Manoj, Kerala Co-operative Tribunal and Co-operative Arbitration Court

W.A.No.827 of 2023 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** ## **&** **THE HONOURABLE MR.JUSTICE C. PRATHEEP KUMAR FRIDAY, THE 22[ND] DAY OF DECEMBER 2023 / 1ST POUSHA, 1945 WA NO. 827 OF 2023** ## **AGAINST THE JUDGMENT WP(C) 31422/2012 OF HIGH COURT OF** ## **KERALA** ## **APPELLANTS:** 1 THE KUTTAMPEROOR SERVICE CO-OPERATIVE BANK LTD. NO. 611, AGED 52 YEARS REPRESENTED BY ITS SECRETARY KUTTAMPEROOR P. O., ALAPPUZHA, PIN - 689621 2 THE PRESIDENT AGED 62 YEARS KUTTAMPEROOR SERVICE CO-OPERATIVE OPERATIVE BANK LTD. NO. 611, KUTTAMPEROOR. P. O., ALAPPUZHA, PIN - 689621 BY ADV GILBERT GEORGE CORREYA ## **RESPONDENTS:** 1 C. MANOJ AGED 45 YEARS KAKKETHUTHEKKATHIL, 'LALITHA NIVAS', KUTTAMPEROOR. P. O, ALAPPUZHA DISTRICT, PIN - 689621 - 2 THE KERALA CO-OPERATIVE TRIBUNAL REPRESENTED BY ITS SECRETARY, KERALA UNIVERSITY P.O, THIRUVANANTHAPURAM, PIN - 695034 W.A.No.827 of 2023 2 3 THE CO-OPERATIVE ARBITRATION COURT REPRESENTED BY ITS SECRETARY, KAITHAMUKKU P.O, THIRUVANANTHAPURAM, PIN - 695024 BY ADVS. T.R.HARIKUMAR ARJUN RAGHAVAN(K/1277/2012) THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 3.11.2023, THE COURT ON 22.12.2023 DELIVERED THE FOLLOWING: W.A.No.827 of 2023 3 **ANU SIVARAMAN, J. & C. PRATHEEP KUMAR, J.** = **= = = = = = = = = = = = = = = = = = W.A. No.827 of 2023** **= = = = = = = = = = = = = = = = = = = Dated this the 22nd day of December, 2023** ## **JUDGMENT** ## **Anu Sivaraman J.** 1. This appeal is preferred by the Society and the President, who were the petitioners in W.P.(C) No.31422/2012, against the dismissal of the writ petition filed against Ext.P9 judgment of the Co-operative Arbitration Tribunal which confirmed Ext.P7 award of the Co-operative Arbitration Court. The 1[st] respondent herein was working as Attender in the Society. Disciplinary proceedings were initiated against him on 01.11.2004 alleging eight charges, out of which, four related to non-accounting of amounts received towards cheque withdrawn from the account of the Society. The allegation was that the 1[st] respondent, who was an attender, had been W.A.No.827 of 2023 4 entrusted with the day-to-day affairs of the bank on behalf of the Secretary and that in exercise of such functions of the Secretary, he had misappropriated amounts by signing cheques unauthorizedly and utilizing the amounts so realized without accounting for the same in the books of the Society. 2. The disciplinary proceedings were completed and the 1[st] respondent was dismissed from service on 16.12.2005. He preferred an appeal before the Board of Directors of the Bank which was dismissed. He approached the Co-operative Arbitration Court with an Arbitration Reference Case and by Ext.P7 award, the Arbitration Court held that the enquiry held against the 1[st ] respondent is proper and valid. However, relying on the evidence adduced, it was found that there was no evidence adduced before the enquiry officer or before the court to show that the 1[st] respondent was entrusted with the charge of Secretary at any time and that the findings of the enquiry officer that the 1[st] respondent was acting as Secretaryin-charge was erroneous. It was also found that the documents produced were not sufficient to cast any liability on the W.A.No.827 of 2023 5 plaintiff and that the finding that he had misappropriated the cheque amount was unsupported by materials. It was, therefore, found that the findings of the enquiry officer were perverse and that the charges against the 1[st] respondent were not proven. The 1[st] respondent was directed to be reinstated with full back wages. The matter was taken in appeal before the Arbitration Tribunal and Ext.P9 was rendered on 30.07.2012. Relying on Rule 47 of the Kerala Co-operative Societies Rules (hereinafter referred as ‘the Rules’) and looking into the materials on record as well, the Tribunal also came to the conclusion that the Society had failed to prove that the 1[st] respondent had misappropriated the proceeds of the cheques in the domestic enquiry. The appeal was resultantly dismissed. 3. In the writ petition, the main contentions raised were that the finding that the 1[st] respondent was not entrusted with the dayto-day affairs of the Society was perverse and the reliance on Rule 47 of the Rules was completely misconceived. It is contended that the guilt of the 1[st] respondent having been W.A.No.827 of 2023 6 conclusively proved in an enquiry and the enquiry having been found to be properly conducted, there was no occasion for the Co-operative Arbitration Court to have interfered with the findings of the disciplinary authority. It is stated that the scope of interference by the Co-operative Arbitration Court and the Tribunal is extremely limited and the re-appreciation in the nature of what has been carried out in Exts.P7 and P9 was unwarranted. Reliance is placed on the Full Bench decision of this Court in **Preethakumari B v.Joint Registrar of Co-operative Societies (General) and others** [2022 KHC 748] to contend that it is only in cases where the violation of the provisions of Rule 198 of the KCS Rules that it would be competent to order reinstatement of the employee. It is contended that having found that the enquiry was properly conducted, the Arbitration Court erred in interfering with the findings thereof. 4. The learned counsel appearing for the 1[st] respondent, on the other hand, contends that the entire effort of the appellants was only to escape from the liability, which was otherwise W.A.No.827 of 2023 7 liable to be fastened on them on account of findings of misfeasance and misappropriation in a Section 65 enquiry conducted in the Bank. It is submitted that it was after considering all relevant aspects that the Co-operative Arbitration Court had come to the conclusion that the charges framed against the 1[st] respondent were not proved. The society had earlier initiated arbitration case (ARC No.37 of 2005) filed under Section 69 of the Act and an award was passed on 25.01.2006 dismissing all the charges and exonerating the employee from all the charges. It is submitted that the Tribunal as well as the learned single Judge had proceeded to consider the contentions raised by the Society in detail and the specific contentions raised have been answered in the judgment as well. It is submitted that it was only on account of the fact that the entire proceedings against the 1[st] respondent were in the nature of a witch hunt that the Arbitration Court as well as the Tribunal directed the reinstatement of the 1[st] respondent with back wages. 5. The learned counsel for the appellants argued that the Full W.A.No.827 of 2023 8 ## Bench of this Court in **B. Preethakumari v. Joint Registrar of Co-operative Societies (General),Thiruvananthapuram** **and Others** [ILR 2022 (4) Kerala 273] has held that it is only where a dismissal/termination of service of an employee is rendered by a co-operative society in contravention and derogation of the statutory mandate contained in the Act and the Rules, more particularly in Rule 198 of the Rules, that an order of reinstatement can be passed by the Co-operative Arbitration Court and the exercise in Ext.P7 does not come within the purview of a reinstatement on a finding that the statutory mandate has not been followed. It is submitted that once the conduct of the enquiry is found to be proper, nothing further could have been done by the Co-operative Arbitration Court. 6. The learned counsel for the 1[st] respondent would, on the other hand, draw our attention to the finding of the Co-operative Arbitration Court that there was no material before the enquiry officer to find the 1[st] respondent guilty of the charges and in the absence of such material, the finding in the enquiry W.A.No.827 of 2023 9 is on no material and is, therefore, liable to be interfered with. It is further submitted that a reading of Ext.P7 would show that there was a Section 65 enquiry ordered into the affairs of the Society and it was only to escape the liability which may be fastened on the members of the committee that the proceedings had been initiated. An ARC was initially instituted by the society against the employer which was dismissed. It is further contended that it was after examining the enquiry files and all the materials produced before the enquiry officer and the court that the Arbitration Court came to the conclusion that there was absolutely no material to hold the 1[st] respondent guilty as charged. In appeal also, the documents were examined and the Tribunal came to the conclusion that the enquiry officer could not have reached a conclusion that the 1[st] respondent had misappropriated any amounts based only on the dissimilarity in the signature on Exts.M10 to M13 cheques. 7. Having considered the contentions advanced, we notice that the Full Bench had held that where orders of dismissal or W.A.No.827 of 2023 10 termination are rendered by a co-operative society in contravention and derogation of the statutory mandate contained in the Act and the Rules, more particularly Rule 198 of the Rules, then, the case of exception of a non statutory body acting in breach of statutory mandate would be attracted and the Arbitration Court would be free to order reinstatement of the employee, since the termination would then be in breach of the statutory provisions. The finding that the enquiry is found to have been conducted in substantial compliance with the provisions of Rule 198, however, would not divest the authority of the Co-operative Arbitration Court, which is the adjudicatory forum available for considering service disputes of employees of co-operative societies, to consider whether the order of termination is one passed on proper material or not. 8. In the instant case, four specific issues were framed by the Arbitration Court. The 1[st] one; whether the domestic enquiry conducted is vitiated or not was answered in the negative. However, on the second issue as to whether the findings of the enquiry officer are perverse or not, the Arbitration Court W.A.No.827 of 2023 11 considered the materials on record and found that there was absolutely no material to come to a conclusion that the employee had been entrusted with the duty of Secretary at the relevant time or that he was the person responsible for the signatures found on the cheques as alleged by the society. It was on concluding that the findings in the enquiry were perverse that the Arbitration Court had proceeded to interfere with the imposition of the punishment. 9. The conduct of an enquiry under Rule 198 would mean the conduct of a proper enquiry and entering of findings on the basis of the materials placed on record before the enquiry officer. If the enquiry officer enters findings which are based on no evidence at all, then it would be futile to contend that the enquiry is one conducted in accordance with the provisions of Rule 198, because conduct of a proper enquiry under Rule 198 would necessarily mean the conduct of such enquiry complying with the principles of natural justice and entering findings which are possible to be defended on the basis of the materials on record. W.A.No.827 of 2023 12 10.In view of the fact that the Co-operative Arbitration Court and the Tribunal have considered the materials on record in extenso and has specifically found that there was absolutely no material to show that the 1[st] respondent has been entrusted with the affairs of the society and that he had misappropriated any amounts, we are of the opinion that the finding entered by the learned single Judge that the said orders do not require any interference is only to be accepted. We find no merit in the contentions raised in the writ appeal. The appeal fails and the same is, accordingly, dismissed. Sd/- **Anu Sivaraman, Judge** sd/- **C. Pratheep Kumar, Judge** sj13/12 W.A.No.827 of 2023 13 ## **APPENDIX OF WA 827/2023** PETITIONER ANNEXURES Annexure A2 A True Copy of the Order of Punishment Dated 16.12.2005 Annexure A3 A True Copy of The Proceedings dated 28.01.2006 Annexure A4 A True Copy of the letter addressed to the respondent communicating the decision of the Appellate Authority vide reference No. 133/05-06 dated 15.02.2006 Annexure AI A True Copy of the report Dated 05.12.2005 of the Enquiry Officer RESPONDENT ANNEXURES Annexure-R1(a) A true copy of the memo of charges issued by the president of the society dated 01-11-2004 Annexure-R1(b) A true copy of the award dated 25-012006 in ARC No.37/2005 True copy PS to Judge