The Management of Karannur Service Co-Operative Bank Ltd. v. V. Subash and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM FRIDAY, THE 5TH DAY OF APRIL 2013/15TH CHAITHRA 1935 WP(C).No. 30225 of 2008 (W) ---------------------------- AGAINST THE ORDER/JUDGMENT IN ID.17/1976 of LABOUR COURT, KOZHIKODE PETITIONER(S): -------------------------- THE MANAGEMENT OF THE KARANNUR SERVICE CO-OPERATIVE BANK LTD.NO.F.1244, P.O.ELATHUR KOZHIKODE, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.P.P.JACOB RESPONDENT(S): ---------------------------- 1. V.SUBASH, S/O.KUNHIRAMAN VYDIAR, VALAVIL HOUSE, ERANHIKKAL P.O., KOZHIKODE. 2. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, LABOUR (A) DEPARTMENT GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. R1 BY ADVS.SRI.N.P.SREEKRISHNAN SMT.SHAHNA KARTHIKEYAN SRI.V.ARUN R2 BY SR.GOVT. PLEADER SRI.ALOYSIUS THOMAS THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05-042013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AV WP(C).No. 30225 of 2008 ## APPENDIX ## PETITIONER'S EXHIBITS : EXT.P1 : COPY OF THE JUDGMENT IN OP.NO.12543/2002 DATED 14.7.2002 OF THIS HONOURABLE COURT. EXT.P2 : COPY OF THE AWARD DATED 1.11.1976 IN I.D.NO.17/1976 OF THE LABOUR COURT, KOZHIKODE. EXT.P3 : COPY OF THE ORDER IN C.P.84/1998 DATED 22.4.1995 OF THE LABOUR COURT, KOZHIKODE. EXT.P4 : COPY OF THE CERTIFICATE MENTIONED IN WRIT PETITION EXT.P5 : COPY OF THE AWARD IN C.P.41/1993 DATED 24.5.1996 OF THE LABOUR COURT, KOZHIKODE EXT.P6 : COPY OF THE LETTER DATED 24.5.2004 ISSUED FROM THE OFFICE OF THE ELECTRICAL INSPECTOR,KOZHIKODE EXT.P7 : COPY OF THE AWARD IN C.P.21/1996 OF THE LABOUR COURT, KOHIKODE EXT.P8 : COPY OF THE COMMON JUDGMENT DATED 30.6.1999 IN O.P.NOS.15499/95, 15378/96 AND 24934/98 OF THIS HONOURABLE COURT EXT.P9 : COPY OF THE COMMUNICATION DATED 18.2.2008 ISSUED BY THE K.S.E.B EXT.P10 : COPY OF THE COMMON ORDER DATED 30.6.2008 IN CP NO.84/88 AND OTHERS EXT.P11 : COPY OF THE CHART COMPARING THE CASE OF THE 1ST RESPONDENT WITH BALAN ON HIS OWN SALARY THAT WOULD HAVE BEEN SECURE D BY THE 1ST RESPONDENT, IF HE HAD CONTINUED IN SERVICE FROM 7.11.1978 TO 31.12.1988 EXT.P12 : COPY OF THE JUDGMENT IN O.P.3006/80 DATED 15.7.83 EXT.P13 : COPY OF THE ORDER IN C.P.63/78 DATED 11.12.84 OF THE LABOUR COURT, KOZHIKODE EXT.P14 : COPY OF THE CHEQUE VIDE NO.765692 DATED 21.7.08 ## RESPONDENT'S EXHIBITS : EXT.R1A : COPY OF JUDGMENT DATED 23.7.87 IN O.P.NO.3180/85 OF THIS HON'BLE COURT EXT.R1B : COPY OF COMMON JUDGMENT DATED 29.10.07 IN WA NOS.1943, 1944, 1947 OF 1999 OF THIS HONOURABLE COURT WP(C).No. 30225 of 2008 EXT.R1C : COPY OF REVIEW PETITION NO.405/04 FILED BY THE PETITIONER EXT.R1D : COPY OF ORDER DT.2.8.06 IN RP405/04 DT. OF THIS HONOURABLE COURT EXT.R1E : COPY OF JUDGMENT DATED 30.6.99 IN O.P.13357 OF 1998 OF THIS HONOURABLE COURT EXT.R1F : COPY OF DEPOSITION OF SREENIVASAN IN ID 33/69 (RENUMBERED AS ID 17/76) /TRUE COPY/ P.A TO JUDGE AV ## **C.K. ABDUL REHIM, J. -----------------------------------W.P.(C). No. 30225 of 2008 -----------------------------------------Dated this the 5[th] day of April, 2013** ## **JUDGMENT** Litigation between the petitioner Bank and the 1[st] respondent has got a chequered history. The 1[st] respondent was appointed as a worker in the petitioner Bank during the year 1965. He was dismissed from service in the year 1969, which was subjected to an industrial dispute, referred for adjudication to the Labour Court, Kozhikode. Through Exhibit P2 Award the order of dismissal was set aside, finding that the allegations could not be proved and to a great extent the allegations were totally baseless. The Labour Court ordered reinstatement of the 1[st] respondent with continuity in service and payment of back-wages. Rs.250/- was also awarded as cost in favour of the 1[st] respondent. Exhibit P2 Award was passed as early as on 18.10.1976 has become final, because the petitioner Bank was defeated in the challenge against the Award, before this court. W.P.(C). No. 30225 of 2008 -2- 2. The 1[st] respondent filed various petitions before the Labour Court under Section 33C(2) of the Industrial Disputes Act, 1947, claiming wages and other emoluments when the petitioner failed in reinstating the 1[st] respondent with payment of back-wages in compliance with the Award. Right from the year 1978 onwards various orders were passed by the Labour Court allowing such claims and directing payments of different amounts, settled after adjudication of each such claims. But all such orders were challenged by the petitioner Bank before this court, which were unsuccessful. On more than one occasion the Bank had also attempted Writ Appeals against the judgments, which were also not successful. For the sake of brevity, I am not going into details of all the factual contentions raised on each such occasions. Ultimately, 6 applications filed under Section 33C(2) were allowed through a common order of the Labour Court (Exhibit P10). After adjudicating all the rival contentions, quantification was made with respect to the W.P.(C). No. 30225 of 2008 -3- amounts payable to the 1[st] respondent, till his date of superannuation, had he been continued in service. The petitioner Bank was directed to make payment of the amounts totalling to a sum of Rs.7,47,992/-, along with interest @ 9% per annum, from the date of each Claim Petitions, till realisation, together with a cost of Rs.2,000/for each application. 3. Exhibit P10 is under challenge in this writ petition mainly on two aspects. The quantification made on the basis that if the 1[st] respondent would have continued in service he would have got promotion at various levels and would have retired as Secretary of the Society, is erroneous. Findings in Exhibit P10 is based on the reasoning that a junior employee of the 1[st] respondent, one Sri.K.K.Balan, was given promotion upto the level of Secretary of the Bank. But contention of the petitioner is that the 1[st] respondent was not qualified to be promoted to any post higher than the post to which he was appointed. It is pointed out that, at the W.P.(C). No. 30225 of 2008 -4- time when the 1[st] respondent was appointed as 'Loan Clerk' in the year 1965, there was no statutory restrictions or regulations in the matter of appointment/promotion of employees in co-operative societies. But with effect from 01.01.1974, Chapter XII was introduced in the Kerala Cooperative Societies Act, 1969. By virtue of Section 80(3) power was conferred on the Government to make Rules prescribing qualification, remuneration, allowances and other conditions of service of officers and servants in different classes of societies in the State. Chapter XV of the Kerala Co-operative Societies Rules, specifically Rule 182 to 200, were introduced in this regard. The qualifications and method of appointment are prescribed under those Rules. Rule 186 prescribes qualification with respect to various posts. But, 'Note' attached to the said Rule provides that nothing in the said Rule will apply to the present incumbents for the present post they hold. Contention of the petitioner Bank is that the exemption in the 'Note' will entitle W.P.(C). No. 30225 of 2008 -5- employees who were in service as on 01.01.1974 only to continue in the present post, and not for any promotion without acquiring the required qualification. Since the 1[st] respondent is not having 'Junior Diploma in Co-operation' (JDC) he is not entitled for any promotion. On the other hand, he would have continued in service only in the same post, is the contention. According to the petitioner, the findings arrived in Exhibit P10 that the 1[st] respondent is entitled for benefits in the promotion posts, on the basis that Sri.K.K.Balan was promoted upto Secretary of the Bank, is unsustainable based on the statutory provisions mentioned above. 4. In Exhibit P10 order the Labour Court found that, the question whether the 1[st] respondent would have got promotion upto the post of Secretary, is a question which need to have been decided only if the Bank had permitted the 1[st] respondent to join in service and only if he would have continued in the petitioner Bank. The Bank cannot be W.P.(C). No. 30225 of 2008 -6- permitted to take contention that they would have never recommend the name of the 1[st] respondent for exemption from acquiring the required qualification, had he continued in service. The Labour Court further observed that, the Director Board of the Society may change periodically and a particular Board of Directors cannot contend that the society will never recommend the name of the 1[st] respondent for exemption. With respect to the question as to whether there is any provision permitting such exemption, the Labour Court observed that during the tenure of service period of the 1[st] respondent there was a provision enabling to get exemption from acquiring JDC qualification for promotion. It was found that, having restrained the 1[st] respondent from reinstated into the service, the Bank cannot be permitted to contend that the petitioner is not entitled for pay and allowances, equal to what was paid to a similarly situated employee, Sri.K.K.Balan. 5. Learned counsel appearing for the 1[st] respondent W.P.(C). No. 30225 of 2008 -7- pointed out that, the petitioner Bank is estopped from raising such contentions, in view of findings already arrived by this court that the 1[st] respondent is entitled to get salary in parity with Sri.K.K.Balan. My attention was drawn to Exhibit P12 judgment of this court, in O.P.NO.3006/1980. Findings therein is that, the 1[st] respondent is entitled in law to get payment of what he would have received had he continued in service, which means all benefits which would have acquired to him, is to be paid. In the judgment of this court in O.P.No.3180/1985 (Exhibit R1(a) it was observed that, as much as the 1[st] respondent was not actually in service during the period, the best method to find out the emoluments which he would have received is to take into account as to what was paid to a similarly situated employee. Therefore in computing wages for the period from 1969 to 1978, stand taken by the Labour Court was confirmed. According to learned counsel fo the 1[st] respondent the same attitude has been taken by this court W.P.(C). No. 30225 of 2008 -8- in various subsequent judgments also. Contention is that, therefore the question remains settled and binding on the petitioner Bank and they cannot raise any contention that the 1[st] respondent would not have got promotions upto the post of Secretary. 6. Per contra, learned counsel for the petitioner had drawn my attention to Exhibit R1(b) as well as the common judgment of this court in 3 Writ Appeals. Observations therein is to the effect that the workman is entitled to claim his emoluments, which shall be considered by the tribunal in accordance with law. According to the counsel, the judgments referred above only declare that the 1[st] respondent is entitled for payment of emoluments in parity with Sri.K.K.Balan, for the periods from 1969 to 1978. But there is no finding that he is entitled for salary and other benefits available in the post of Secretary, as if he would got promotion as Secretary, had he continued in service. Such findings will not preclude the Bank from raising a contention W.P.(C). No. 30225 of 2008 -9- that the 1[st] respondent is not qualified for promotion to the post of Secretary. The said contention was disputed by learned counsel for the 1[st] respondent pointing out that two employees, junior in service of the 1[st] respondent, Sri.Srinivasan & K.K.Balan were promoted upto the post of Secretary without acquiring JDC qualification. It is further pointed out that Sri.Srinivasan was not even having the qualification of Matriculation. Therefore, it is strongly contended that, had the 1[st] respondent continued in service he would have got promotion upto the post of Secretary. 7. From the facts enumerated it is evident that, because of the attitude taken by the Bank the 1[st] respondent was dragged into continuous litigations, for about more than 3 decades. Non-compliance of the Award passed by the Labour Court, cannot be appreciated in any manner. Binding nature of the Award, which had attained finality, obliges the Bank to comply with the same. But the petitioner Bank had wilfully disobeyed the Award and W.P.(C). No. 30225 of 2008 -10- dragged the 1[st] respondent to litigations, one after another. But the condemnable attitude of the Bank cannot be compensated by ordering payment of any amount in excess of what the 1[st] respondent is legally entitled. Under Section 33C(2) of the ID Act, if any question arises as to what is the amount of money due or as to what is the amount at which benefit should be computed with respect to entitlement of the workman, such question shall be decided by the Labour Court. Therefore, in the applications under Section 33C(2) the amount of benefits for which the 1[st] respondent is entitled, need to have been adjudicated and decided in a legal manner. 8. It is evident from Exhibit P10 that, there arose dispute before the Labour Court as to whether the 1[st] respondent would have got promotion upto the post of Secretary, had he continued in service. The Labour Court computed the benefits placing reliance on the fact that juniors of the 1[st] respondent were promoted to such post. W.P.(C). No. 30225 of 2008 -11- But whether the 1[st] respondent had the eligibility for getting such promotions, on the basis of the regulations introduced through the relevant statute, has not been looked into by the Labour Court. Eventhough learned counsel for the 1[st] respondent contended that such a question stands already concluded and is not left open for examination, I am not inclined to accept such a view. Question whether the 1[st] respondent was having the requisite qualification for getting promotion upto the post of Secretary, if he would have continued in service, is a question which need to be evaluated on the basis of relevant provisions of law, on considering the factual materials available. Ofcourse, question also remains as to whether the statute is applicable on the basis of relevant facts in the case at hand. I am of the considered opinion that these aspects need reconsideration by the Labour Court. 9. Another challenge against Exhibit P10 is with respect to awarding of interest on the amount ordered in W.P.(C). No. 30225 of 2008 -12- different applications. Contention is that there is no provision in the Act enabling awarding of interest on backwages. Referring to Section 33C(2) learned counsel pointed out that, the Labour Court can only adjudicate upon the amount of money due or the amount at which the workman is entitled to get the benefits. The provisions does not empower the Labour Court to order payment of interest, is the contention. Petitioner made reference to Exhibit P13 order of the Labour Court in C.P.No.63/1978, wherein the claim for interest was negatived. It is pointed out that, challenge against Exhibit P13 by the 1[st] respondent on the above aspect was not successful (Exhibit P12 judgment). Per contra, learned counsel for the 1[st] respondent pointed out that, there was continuous denial of benefits due to the 1[st] respondent under Exhibit P2 Award. Non-compliance of the Award coupled with non-payment of benefits, would reveal the in-different attitude taken by the petitioner Bank. The 1[st] respondent was put to great prejudices and W.P.(C). No. 30225 of 2008 -13- irreparable legal injuries because of the adamant attitude of the Bank. He was put to continued misery of fighting cases, one after another. Non-payment of emoluments due under the Award for a considerably long period without any legal justification, should be compensated in terms of interest, is the contention. 10. Learned counsel for the 1[st] respondent had pointed out a decision of this court in **Chennamangalam Nair Samajam v. Sarada (1993 (1) KLT 142)** . It is held that awarding of future interest on the amounts due to an employee, in exercise of powers under Section 33C(2) is only equitable and reasonable. The claim for interest is only incidental to the relief claimed. The Honourable Supreme Court in the decision in **Abhinash Chandra Gautam v. Union Territory of Tripura and Another (1984 Supp) SCC 551** had upheld an Award of reinstatement with payment of backwages, along with interest. Learned counsel for the petitioner contended that since Exhibit P2 W.P.(C). No. 30225 of 2008 -14- award does not contain any direction for payment of interest on backwages, the Labour Court went erred in awarding interest, in a proceedings under Section 33C(2). 11. While considering the issue I take note of the fact that the proceedings under Section 33C(2) became warranted only because the petitioner had refused to reinstate the 1[st] respondent and refused to pay the backwages. Going by terms of Exhibit P2 Award, there would not have any liability to pay interest if the 1[st] respondent was reinstated within the time stipulated. But here is a case where the reinstatement and payment of backwages were refused. The 1[st] respondent was kept out of service continuously in violation of Exhibit P2 Award, nor he was paid the emoluments in lieu of reinstatement. The delay caused in making payment had resulted in the denial of rights of the 1[st] respondent on a continuous basis. Therefore it need to be reasonably compensated. Since 33C (2) empowers the court to have computation with respect to W.P.(C). No. 30225 of 2008 -15- the amount of benefits due, nothing prevents the court from making the management liable for payment of interest, considering the continuous denial and the inordinate delay caused in making such payment. Under such circumstances, I am not inclined to accept the contention that awarding of interest is unsustainable. Learned counsel for the petitioner made a further request to limit payment of interest from the date of Exhibit P10 order. But it is to be noted that the amounts became due on the respective dates of filing of each of the Claim Petitions. Therefore there is no error or impropriety in granting interest from the date of the Claim Petition onwards. 12. On the basis of the above findings, I am of the view that the matter need to be remanded for examining the limited question with respect to entitlement of benefits on the basis that the 1[st] respondent would have got promotion upto the post of Secretary, had he continued in service. But considering the chequered history as enumerated above, W.P.(C). No. 30225 of 2008 -16- I am of the view that the 1[st] respondent cannot be put to prejudice by way of further delay in getting the benefits. It may also lead to defeating his interests in securing the amounts already ordered. 13. It is brought to my notice that an amount of Rs.6,00,000/- out of the amounts ordered in Exhibit P10 has already been paid to the 2[nd] respondent and a further sum of Rs.2,00,000/- has already deposited before the Labour Court. I am of the considered opinion that a further direction either to make deposit of the entire amount including up to date interest or to furnish Bank Guarantee for such amount, before the Labour Court, will suffice to protect the interest of the 1[st] respondent. 14. In the result, the writ petition is allowed and Exhibit P10 is set aside to the limited extent it awarded the claim petitions on the basis of salary and other benefits computed considering promotions obtained by Sri.K.K.Balan, who was junior in service of the 1[st] respondent. The Claim W.P.(C). No. 30225 of 2008 -17- Petitions in question are hereby remanded to the Labour Court, Kozhikode for fresh disposal, on the limited issue as to whether the 1[st] respondent is entitled for promotion upto the post of Secretary, had he continued in service. It is made clear that the order impugned is upheld in all other respects. This order is subject to condition of the petitioner depositing or furnishing Bank Guarantee for the entire amounts due under Exhibit P10, along with interest calculated up to date, within a period of one month from today. It is also directed to release the amount of Rs.2,00,000/- to the 1[st] respondent, which is already in deposit. 15. The Labour Court, Kozhikode is directed to restore the Claim Petitions (Nos. 84/88, 41/93, 21/96, 1/99, 37/01 and 36/02) and to proceed for fresh disposal, once it is noticed that the petitioner Bank had deposited the amount or furnished Bank Guarantee, as directed above, within the time limit stipulated. The claim petitions shall be disposed W.P.(C). No. 30225 of 2008 -18- of at the earliest possible and fresh decisions shall be rendered within a period of 3 months from the date of receipt of a copy of this judgment. 16. It is made clear that the Labour Court shall not permit the parties to adduce any further evidence, since the question on which the claim petitions are remand is purely a legal question which need to be considered only on the basis of further hearing of the matter. 17. It is further clarified that in case there is failure on the part of the petitioner in depositing the amount or in furnishing the Bank Guarantee, within the time stipulated as above, this judgment will become automatically inoperative and the 1[st] respondent will be at liberty to pursue the recovery steps. Sd/- ## **C.K. ABDUL REHIM, JUDGE** /True copy/ P. A. to Judge Pn