Thevara Co-Operative Society Ltd. v. K. Gopalakrishnan and Kerala Co-operative Arbitration Court and Kerala Co-Operative Tribunal

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN TUESDAY, THE 14TH DAY OF NOVEMBER 2017/23RD KARTHIKA, 1939 WP(C).No. 18740 of 2015 (N) ---------------------------- AGAINST THE ORDER IN ARC 125/2008 of KERALA CO-OP.TRIBUNAL, THIRUVANANTHAPURAM. PETITIONERS: ------------- 1. THE THEVARA CO-OPERATIVE SOCIETY LTD. REPRESENTED BY ITS SECRETARY. 2. THE BOARD OF MANAGEMENT THEVARA URBAN CO-OPERATIVE SOCIETY LTD.NO.E-784, THEVARA, KOCHI, REPRESENTED BY ITS PRESIDENT. BY ADVS.SRI.P.V.BABY SRI.A.N.SANTHOSH SRI.K.JAYAKUMAR (SR.) RESPONDENTS: ------------ 1. K.GOPALAKRISHNAN, KRISHNAKRIPA, THEVARA, KOCHI – 682 013. 2. KERALA CO-OPERATIVE ARBITRATION COURT, THIRUVANANTHAPURAM-695 023. 3. KERALA CO-OPERATIVE TRIBUNAL, THIRUVANTHAPURAM-695 034. R1 BY ADV. SRI.P.N.MOHANAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25-09-2017, THE COURT ON 14-11-2017 DELIVERED THE FOLLOWING: WP(C).No. 18740 of 2015 (N) ---------------------------- ## APPENDIX ## PETITIONERS' EXHIBITS ----------------------EXT.P1. TRUE COPY OF THE AWARD DATED 8/10/2013 IN ARC NO.125/2008. EXT.P2. TRUE COPY OF THE JUDGMENT DATED 29/4/2015 IN APPEAL NO.27/2014. EXT.P3. TRUE COPY OF THE MEMORANDUM OF APPEAL IN APPEAL NO.7/2014. EXT.P4. TRUE COPY OF THE ARGUMENTS NOTES SUBMITTED BY THE PETITIONERS HEREIN IN APPEAL NO.7/2014. RESPONDENTS' EXHIBITS ----------------------NIL /TRUE COPY/- PA TO JUDGE ## **ANU SIVARAMAN, J.** ## **= = = = = = = = = = = = = = =** ## **W.P.(C).No.18740 of 2015** **= = = = = = = = = = = = = = = Dated this the 14[th] day of November, 2017** ## **JUDGMENT** 1.The challenge in this writ petition is directed against Exhibits P1 and P2 award of the Co-operative Arbitration Court and the order in appeal preferred by the Appellate Tribunal. The 1[st] petitioner is a Co-operative Society and the 2[nd] respondent is its Managing Committee. The 1[st] respondent was suspended on 5.1.2007 on charges of financial irregularity and misappropriation. He was dismissed from service on 31.01.2008 w.e.f. 05.01.2007. By Exhibit P1 award dated 08.10.2013, the Co-operative Arbitration Court held that the order of punishment imposed by the society was irregular and the order of dismissal was set aside. The Arbitration Court further held that the plaintiff is entitled to be reinstated in the service of the defendant bank with full service benefits and backwages with continuity in service. Contending that the direction to reinstate was illegal and is one rendered overlooking the binding judgments of the Apex Court, the petitioner-society preferred an appeal before the Tribunal. W.P.(C).No.18740/15 2 The Tribunal considered the contentions advanced on either side. The finding that the enquiry was vitiated and that the order of the Appellate Committee was vitiated by lack of application of mind as also lack of quorum of the committee was affirmed by the Tribunal. However, relying on the decision of this Court in W.P.(C).No.16769/2012 dated 12.11.2014, the Tribunal found that the Arbitration Court did not have the jurisdiction to direct reinstatement of a delinquent employee even when it was found that the enquiry was vitiated. It is stated that all that could be done by the Arbitration Court on finding the enquiry was vitiated was to direct the payment of compensation to the concerned employee. The matter was therefore remanded to the Arbitration Court to consider the quantum of compensation to be awarded to the respondent. - 2.The award of the Arbitration Court and the order of the Tribunal are challenged by the employer on the ground that once an enquiry is found to be vitiated, the Arbitration Court ought to have permitted the employer society to conduct a W.P.(C).No.18740/15 3 fresh enquiry in accordance with law. It is stated that the Arbitration Court and Tribunal had interfered with the findings in enquiry on purely technical grounds and overwhelming evidence which was available to establish the guilt of the delinquent had been completely eschewed. The findings in Exhibits P1 and P2 are challenged on factual aspects as well. - 3.Heard the learned counsel for the petitioner and the learned counsel appearing for the 1[st] respondent. - 4.The learned Senior Counsel appearing for the petitioner would place reliance on the decisions of the Hon'ble Apex Court as well as this Court in **Institute of Chartered Accountants of India v. L.K.Ratna and others** [(1986) 4 SCC 537], **Managing Director, ECIL, Hyderabad and others v. B.Karunakar and others** [(1993)4 SCC 727], **Hiran Mayee Battacharyya v. Secretary, S.M.School for Girls and others** [(2002) 10 SCC 293], **U.P.State Spinning Co.Ltd v.R.S.Pandey and another** [(2005) 8 SCC 264, **Union of** W.P.(C).No.18740/15 4 **India v. Y.S.Sadhu, Ex.Inspector** [(2008) 12 SCC 30], **Chairman, Life Insurance Corporation of India and others v. A. Masilamani** [(2013) 6 SCC 530] and **Ajith Kumar K.V. v. State of Kerala and others [** ILR 2017(3) Kerala 181]. It is contended that the Arbitration Court, on finding that the enquiry held was vitiated on some counts, ought to have directed the conduct of a fresh enquiry. It is contended that the charge raised against the delinquent employee being one of creating fake accounts and manipulating the funds of the society into those accounts and withdrawing the same for his own personal gain was a charge of such gravity as regards the person who was put in charge as a Secretary of the Society and therefore the interference with the enquiry report and the punishment imposed on technical grounds ought not to have resulted in the exoneration of the employee without any further proceedings. It is further contended that even where the enquiry was found to be vitiated on technical grounds, the Arbitration Court ought to have given the management an opportunity to adduce W.P.(C).No.18740/15 5 evidence before the Arbitration Court in support of the charges. If such an opportunity had been given, the petitioner would have been able to prove the charges raised on the strength of the evidence adduced in his behalf. 5.The learned counsel appearing for the 1[st] respondent would contend that the attempt of the society is only to protract the proceedings and to deny the benefits legally due to the employee. It is contended that ARC 125/2008 was initially decided on 23.09.2010. The defendants had appeared and filed written statement and thereafter remained ex parte. Since the defendants did not adduce any oral or documentary evidence to prove the domestic enquiry proceedings or the charges levelled against the plaintiff, the court had found that no enquiry was proved. The defendants were therefore directed to reinstate the plaintiff. The award had been taken in appeal. Taking up the very same contentions as to the gravity of the charges levelled against the employee, it was stated that the defendants were not given a chance to establish W.P.(C).No.18740/15 6 the guilt of the delinquent employee before the Court. Accepting these contentions, the appeal was allowed and the matter was remanded to the Arbitration Court for fresh consideration. It was held in paragraph 10 of the judgment in Appeal No.22/2011 as follows:- “10. Learned counsel for the respondent advanced a detailed argument challenging the legality of the domestic enquiry and the correctness of the findings therein pointing out the falsity and improbability of the allegation agaisnt the respondent that he opened the Savings Bank Account in the fictitious name of Joy Paul in view of the position that it was the Managing Committee who admitted him as a Member on the date on which the Savings Bank Account was opened in his name and also about the legality of the decision of the Managing Committee dismissing the statutory Appeal pointing out the quorum. The dismissal of the Respondent was based on the findings in a domestic enquiry and the domestic enquiry was set aside on the technical ground of non-examination of the Enquiry Officer and its formal proof. Even if the domestic enquiry was illegal and in violation of the principles of natural justice there was a duty on the Arbitration Court to render opportunity to the Appellants to adduce further evidence to prove the charges. Without doing W.P.(C).No.18740/15 7 so, the Arbitration Court straight away proceeded to set aside the Order of dismissal consequent to the finding that there was no domestic enquiry.” 6.It is therefore contended that the petitioners in the writ petition had all the opportunities to adduce evidence with regard to the guilt of the accused. They chose not to utilise the said opportunity. Thereafter, it is not open to them to contend that they were not given an opportunity to substantiate their case before the Arbitration Court. It is further contended that the charges levelled against the delinquent employee were found to be completely fictitious and unsustainable by both the Court and Tribunal which was the reason for direction of reinstatement and later for payment of compensation. 7. I have considered the contentions advanced as well as the pleadings and the materials on record. I am called upon to decide the legality or otherwise of Exhibit P2 decision of the Co-operative Arbitration Tribunal as also the findings of the Arbitration Court in Exhibit P1 on a challenge raised by the W.P.(C).No.18740/15 8 employer society. It appears to be the contention of the society that on entering a finding that the enquiry was vitiated, the Arbitration Court ought to have given the employer society a full opportunity to substantiate the charges as alleged against the workman. Though no specific procedure is prescribed, it was only just and equitable that the question of the culpability of the workman, going by the charges raised against him, was considered by the Tribunal. It is contended that since such an exercise has not been carried out by the Arbitration Court, the remand by the Tribunal should be one in which the question of guilt of the delinquent officer should be allowed to be agitated afresh and not a remand for the limited purpose of deciding on the issue of compensation payable to him. It is contended that since no procedure is prescribed, the principles followed by the Industrial Tribunals and Labour Courts ought to have been adopted and after setting aside the enquiry, there ought to have been a further chance given to the employer to prove the charges before the Tribunal. This appears to be an attractive argument. It is also not in dispute W.P.(C).No.18740/15 9 that the Co-operative Arbitration Court is a Forum competent to consider the legality of disciplinary proceedings against employees of a Co-operative Society. - 8.In the above view of the matter, the proposition urged by the learned counsel appearing for the petitioner that once an enquiry is found to be vitiated on technical grounds, the employer should be given an opportunity to prove the charges alleged against the employee before the Arbitration Court appears to be a sound one. However, in the facts of this case, it is not in dispute that the arbitration case was once decided ex parte as against the petitioner in the writ petition. In appeal, the matter had been remanded by the Tribunal to the court for a fresh consideration with notice to the employer society. It was on an appeal preferred by the employer that such remand was made. In the order of remand, there was a specific direction to the society to raise all its contentions before the Arbitration Court. The society thereafter adduced evidence and sought to justify the enquiry. Once the enquiry W.P.(C).No.18740/15 10 was found to be vitiated, it was for the employer society therefore to have taken appropriate steps for the adducing of evidence in support of their charges. Having failed to make any efforts in this regard, I am of the definite opinion that it is not open now to the employer society to contend that the finding of the Arbitration Court as to the illegality of the enquiry and the further direction that the petitioner is entitled to appropriate reliefs is vitiated in any manner. 9.The attempt by the society can be seen only as a dilatory tactics. It is true that the charges levelled against the employee were grave in nature. But having failed to prove those charges in a proper domestic enquiry in accordance with law and after having failed to let in evidence before the court as to the sustainability of charges against the employee, the society cannot, at this distance of time, buy further time seeking adjudication as to the veracity of the charges. The proceedings against the employee were initiated in the year 2007. The employee is also due to retire from service. The W.P.(C).No.18740/15 11 petitioner had all reasonable opportunity to substantiate the charges against the employee before the Co-operative Arbitration Court. In the above view of the matter, I find no illegality in Exhibit P1 as modified by Exhibit P2 judgment. I find that the remand to the Arbitration Court for deciding the question of compensation is not open to challenge at the instance of petitioner-society who had two full opportunities to substantiate its case before the Arbitration Court. The writ petition therefore fails and is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj