Mahesh Prasad Dwivedi vs District Cooperative Central Bank Ltd.

Rajendra Menon, J.—Challenging the order Annexure P-5 dated 13/09/11 passed by the M.P. State Cooperative Tribunal, Bhopal and the order dated 23/12/09 Annexure P-4 passed by the Joint Registrar Cooperative Societies, Jabalpur Division Jabalpur denying full back wages to the petitioner after quashing the order of compulsory retirement and restricting payment of back wages only to the extent of 25 %, petitioner has filed this writ petition. Facts go to show that petitioner was appointed initially as a ''Society Manager'' by the respondent Cooperative Bank. He joined service on 1/10/62. On 3/10/91, while he was working in the capacity as a Manager, a charge-sheet was issued to him imputing serious allegations of misconduct said to have been committed by him in the discharge of his duties. He was also placed under suspension. A departmental enquiry was conducted and, thereafter, punishment of stoppage of two increments with cumulative effect was issued on 24/05/97.

Petitioner challenged the said order and the matter travelled upto the M.P. State Cooperative Tribunal and it was found that the entire action has been taken against the petitioner in an illegal manner, enquiry has not been properly conducted and without conducting the proceedings properly as the action taken was unsustainable, the matter was remanded back to the department giving them liberty to take fresh action in accordance with law. The final order in this regard was passed by the M.P. State Cooperative Tribunal on 13/08/07. In the meanwhile, no action was taken in the charge-sheet, no enquiry was conducted. On the contrary, treating the petitioner to be a ''dead-wood'', he was compulsorily retired w.e.f. 18/05/99 that is retrospectively.

Petitioner challenged this order before the Dy. Registrar, Cooperative Society who dismissed the claim on 17/02/03. An appeal was preferred by the petitioner before the Joint Registrar which was allowed on 30th May, 2006, the Court directed for his reinstatement but did not grant him backwages for the intervening period.

Petitioner therefore preferred a second appeal before the M.P. State Cooperative Tribunal being S. A. No. 97/06 and vide order dated 23/12/09 Annexure P-4, the Cooperative Tribunal came to the conclusion that petitioner was compulsorily retired in an illegal manner. It was done to punish him for the allegations levelled in the charge-sheet and as no enquiry or opportunity was granted, the action taken is illegal.

Even though the appellate Court Joint Registrar quashed the order of compulsory retirement but refused to grant backwages for the intervening period only on the ground that petitioner is retired from service. Till his date of super-annuation, he has not worked with the Bank and, therefore, treating it on the principle of ''no work no pay'', backwages was denied to the petitioner.

The M.P. State Cooperative Tribunal by its impugned order Annexure P-5 dated 13/09/11 granted 25 % of salary and backwages to the petitioner and, therefore, claiming full wages for the intervening period, this writ petition has been filed.

Shri D.K. Dixit invited our attention to the various judgments of the Supreme Court and in particular referred to an order passed by the Supreme Court in the case of Shankerlal Vs. State Govt. of M.P. and others decided on 17th January, 2012 to say that when the action is found to be per se illegal and the removal order or compulsory retirement is quashed, an employee is entitled to consequential relief of backwages and the same can be denied only if the exonerating circumstances or material are available to deny the said benefit.

He invites our attention to another judgment of the Supreme Court in the case of Pradip Kumar Vs. Union of India (UOI) and Others, to say that when the order is passed in violation to the Article 311 of the Constitution dehors the rule and amounts to exercise of an arbitrary power, the consequential relief of backwages along with reinstatement should be granted.

In the present case, a charge-sheet was issued to the petitioner and as no departmental enquiry was properly conducted at the first instance, the matter was referred to the competent authority. The competent authority instead of conducting the enquiry and taking action in accordance with law with a view to punish the petitioner for the act of commission and omission and without conducting any enquiry passed the order Annexure P-1 dated 18/05/99 compulsorily retiring the petitioner. It is argued that this is nothing but an order of punishment and as this order is found to be unsustainable, for the simple reason, that it is not in accordance with law, the relief of reinstatement with full backwages should be granted to the petitioner and in denying the same, it is said that a grave illegality has been committed which is unsustainable.

Shri Ashok Tiwari, learned counsel for the respondent refuted the aforesaid and submitted that petitioner was compulsorily retired in accordance with Rule 72 (1) of the Service Rules of the Bank after the governing body of the Bank decided to retire him as he has completed 55 years of age and 361/2 years of service and as the compulsory retirement is found to be proper, no interference be made.

We have heard learned counsel for the parties and perused the record. On a perusal of the records, the factual scenario that emerges goes to show that when the petitioner challenged his compulsory retirement dated 18/05/99 and when the matter was considered by the appellate Court namely the Court of Joint Registrar, Cooperative Society, Jabalpur in Appeal No. 78-45/2003 in the order dated 23/12/09, it is seen that the appellate Court summoned the entire record, recorded the statement of witnesses and on going through the records found that compulsory retirement can be ordered under Rule 72 (1) of the Service Rules applicable. It was found that the petitioner was compulsorily retired and in the resolution dated 18/05/99 being resolution No. 8 passed by the Board of Directors, the reason given for compulsory retirement was that petitioner was habitual in remaining absent without information, warnings were issued to him but he did not improve and, therefore, it was found that his work was not satisfactory. That apart, a charge-sheet was also issued to him and an enquiry is pending.

Taking note of all these factors, the Board of Directors recommended for his compulsory retirement. However, when the appellate Court evaluated all these factors in the matter of taking action for compulsory retirement and found that in the matter certain procedure contemplated under Rule 72 (1) is also required to be followed. The Court evaluated the entire factors and came to the conclusion that before compulsorily retiring the petitioner, no proper procedure was followed and in a hasty manner, the entire matter was taken up and without conducting a departmental enquiry which was already pending and without following the due procedure, the impugned action was taken, the appellate authority found that compulsory retirement is unsustainable.

The order has been passed without following the rules. It only says that since 18/10/95 which is actual date of retirement, petitioner has not worked and, therefore, he is not entitled to any backwages on the principle of ''no work no pay''. When the matter travelled to the Cooperative Tribunal, all these factors were reconsidered and the Tribunal did not deem it appropriate to interfere into the matter but applying the judgment in the case of Mehatoram Dewangan Vs. Chairman Cooperative Marketing Federation, 2002 R N Pg No. 203 held that in the facts and circumstances of the case, petitioner is only entitled to 25% backwages. It is therefore clear on a reading of both the orders passed by the Appellate Cooperative Court and the Tribunal that in the case in hand, the employee was initially charge-sheeted and a departmental enquiry was contemplated against him. He was proceeded against departmentally but as there were various illegalities and lacunas in the enquiry, the matter was remanded back to the competent authority for conducting the proceedings afresh.

The authority instead of conducting the proceedings in accordance with law passed an order on 18/05/99 Annexure P-1 compulsorily retiring the petitioner after paying him three months wages in lieu of notice. It was said before the appellate Court that a resolution was passed by the Board of Directors on 18/05/99 and treating the petitioner to be a ''dead-wood'', an action was taken.

The order passed by the appellate Court Annexure P-4 dated 23/12/09 goes to show that the Tribunal evaluated the entire matter and while deciding issues No. 1 and 2 with regard to compulsory retirement came to the conclusion that compulsory retirement was not ordered in accordance with law, everything was done in a very arbitrary and illegal manner and only on the ground that on some occasion, petitioner was unauthorizedly absent without proper sanction and leave, action is taken.

The finding recorded by the appellate Court is that without conducting a proper enquiry and without following the requirement of rule, the compulsory retirement is unsustainable. This order passed by the appellate Court is not challenged by the respondent Bank. It has attained finality and has been granted some of the approval even by the Cooperative Tribunal which also considered the matter not at the instance of the respondent Bank but at the instance of the petitioner when he claims full wages. Once, the order of compulsory retirement of the petitioner was found to be illegal and unsustainable, passed in violation of the rules and regulations applicable, then the employee is entitled to consequential benefit of reinstatement with full backwages. Withholding of backwages or denying full backwages can be ordered only if the employee is found to be in gainful employment or there were circumstances to show that full backwages need not be granted to the employee for reasons to be recorded.

If the various judgments cited by learned counsel for the parties are scanned, it is a well settled principle of law that if an order is found to be illegal or arbitrary and if it is quashed, all consequential benefits accruing due to quashing of an illegal order are liable to be paid. Consequential benefit can be denied only if the circumstances exist to say that the benefit can be denied.

In the present case, if the order passed by the appellate Court and the Tribunal are analyzed, it would be seen that compulsory retirement of the petitioner is found to be wholly unsustainable and an arbitrary decision. It is a device to somehow remove the petitioner without conducting a departmental enquiry and if such an order is quashed, the normal rule of reinstatement with full backwages should be followed. Neither, the appellate Court nor the Tribunal have given any cogent reason, justifiable in nature for denial of backwages to the employee concerned. Even before this Court, no material or reason is adduced by the Bank to show as to why full backwages can be denied to the employee concerned.

It is a case where the employee has been compulsorily retired as a means for removing him from service. Before doing so, the requirement of law was not followed and even though, a departmental enquiry was initiated against him and was pending based on the charge-sheet issued. Nothing was done and to somehow keep him away from work, he was compulsorily retired in an illegal manner. There are no exonerating circumstances, reasons, special in nature or any material brought to the notice of this Court based on which the backwages payable to the employee can be denied.

Once, the order of compulsory retirement is found be unsustainable and illegal, being in violation to legal principles, then in the absence of any exonerating circumstances or material being available to say that the normal rule of reinstatement with full backwages has to be deviated from following of the normal rule is the requirement which has to be adhered to and its departure which is an exception cannot be resorted to in a very casual or absurd manner without any justification.

In view of the above, we have no hesitation in allowing this writ petition and directing for payment of full backwages for the intervening period that is from the date of initial compulsory retirement of the petitioner till his actual date of superannuation.

Accordingly, this petition is allowed. Orders impugned passed by the appellate Court and the Cooperative Tribunal denying full wages to the petitioner are modified and it is directed that for the intervening period when the employee remained out of service, full backwages after deducting the amount already paid to be him be granted within a period of three months from the date of receipt of certified copy of this order. With the aforesaid, petition stands allowed and disposed of.

C.C. as per rules.