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Judgment
Anand Byrareddy
Heard the learned counsel for the parties.
The petitioner is a co-operative Society registered under the provisions of the Karnataka Co-operative Societies Act. 1959. (Hereinafter referred to as the ''KCS Act'', for brevity). The second respondent herein has raised a dispute u/s 70 of the KCS Act before the first respondent herein and the same is pending. The second respondent was working as an Accounts Superintendent, for the petrol bunk section of the petitioner society. He was also entrusted with duties pertaining to the Marketing Section of the petitioner. It transpires that the second respondent was said to have committed certain irregularities in the performance of his duties. A charge-sheet was issued alleging misappropriation of funds of the petitioner, by the second respondent. An enquiry was conducted pursuant to the same and on the basis of the report of the enquiry officer and after complying with other mandatory processes, had imposed the punishment of dismissal against the second respondent. The dispute above referred, is raised challenging the order of dismissal.
The petitioner is contesting the proceedings pending before the first respondent. The petitioner has relied on the enquiry proceedings conducted against the petitioner to defend its action. The petitioner has sought that the question of validity of the domestic enquiry held against the second respondent be taken up as a preliminary issue - and in the event of the first respondent, holding the issue against the petitioner, then the petitioner be permitted to prove the charges afresh by leading evidence.
The first respondent has framed the following six issues, as arising for consideration in the pending dispute.
i) Whether the Petitioner proves that the action of the Respondent No. 1 in dismissing the Petitioner from service is illegal and violative of rules?
ii) Whether the Petitioner proves that he is entitled to the terminal benefits like gratuity, provident fund and other financial benefits?
iii) Whether the Respondent proves that the domestic enquiry held is in accordance with law?
iv) Whether the Respondent proves that the misconduct committed by the Petitioner has resulted in loss?
v) Whether the Respondent proves that the Petitioner is not entitled to any relief as he is dismissed from service?
vi) What relief of order?
The petitioner had filed an application seeking that issue no. 3 above, be considered as a preliminary issue. That application having been rejected, the present petition is filed questioning the correctness of the same.
The learned counsel for the petitioner would contend that the first respondent is addressing, not only the sustainability of the actual findings against the petitioner at the domestic enquiry, but also the circumstance whether the enquiry itself was conducted in a fair and proper manner. If that latter aspect of the matter is addressed as a preliminary issue, the petitioner could then seek the indulgence of the first respondent, to establish its case while ensuring that the second respondent is provided with complete opportunity to contest the proceeding and to correct any lapse in complying with principles of natural justice and to ensure that no prejudice is caused to the second respondent to defend himself in accordance with law. This is the established procedure in adjudicating disputes under the Industrial Disputes Act, 1947. by the labor court and the Industrial Tribunal. But if the said issue is to be decided along with other issues in the pending dispute and if the first respondent should conclude that the domestic enquiry conducted by the petitioner was not fair and proper, the petitioner may not be in a position to tender evidence after complying with such steps as may be necessary to conform to fairness and propriety which the first respondent would seek to ensure in the interest of justice and in the interest of affording a level playing field to the second respondent in defending himself. It is further contended that the petitioner firmly believes that the enquiry conducted is fair and proper and it need not duplicate the evidence already on record, by mechanically leading evidence before the first respondent, and leading to a presumption that the evidence on the basis of which the punishment is imposed is either inadequate or found wanting in some manner. It is therefore contended that it is necessary for the first respondent to render his opinion as to whether the enquiry was fair and proper before addressing the merits of the case, as it would be in the interest of both the parties to the dispute. It would ensure that the petitioner brings home the charges against the second respondent in accordance with law, while also ensuring that any disadvantage suffered by the second respondent, by non-compliance with any mandatory requirement. in the conduct of the enquiry, is supplied.
It is contended that the need for such a procedure being adopted would be consistent with the established procedure that is contemplated in the adjudication of disputes pertaining to workmen who have raised a dispute in the nature of an industrial dispute adjudicated before an industrial tribunal or the labor court under the provisions of the Industrial Disputes Act, 1947 (Hereinafter referred to as the ''ID Act'', for brevity). It is contended that having regard to the legislative history in so far as the remedy available to a workman under a Co-operative Society is concerned - in that, the jurisdiction to decide any dispute of the nature mentioned in Section 70(2)(d) of the KCS Act, If it answered the definition of an industrial dispute, vested exclusively with the Labor courts and Industrial Tribunals till 20.1.1976; Concurrently with the labor courts or Industrial Tribunals under the ID Act and with the Registrar u/s 70 of the KCS Act between the period 20.1.1976 and 20.6.2000; and exclusively with the Registrar u/s 70 of the KCS Act with effect from 20.6.2000 - it would be in consonance with justice equity and good conscience to decide the dispute following the established procedure in the adjudication of disputes, if the same answered the definition of an industrial dispute, as adopted by the labor courts and industrial tribunals.
It is further contended that the nature of jurisdiction and powers conferred on the Registrar u/s 70, 71. and 117 of the KCS Act, read with Rule 31 of the Karnataka Co-operative Societies Rules is similar to the jurisdiction and powers conferred on the Labor Court or the Industrial Tribunal u/s 10 read with Section 11 and 11-A of the ID Act. In this regard the similarities in the procedure before the respective fora are enumerated in a tabular form in the body of the writ petition.
It is also contended that the procedure adopted by the Labor Courts and the Industrial Tribunals is not prescribed under the provisions of the ID Act, but was mandated by the decisions of the apex court in the The Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. Vs. The Management and Others, and The Cooper Engineering Limited Vs. Shri P.P. Mundhe, .
It is hence contended that the impugned order which is, on the face of it a non-speaking order, has failed to address the serious legal implication involved, in negating the prayer of the petitioner as regards the significance and object of the issue, as regards the enquiry being fair and proper, being addressed as a preliminary issue.
The learned counsel for the workman, respondent no.2, on the other hand, would contend that from a reading of Sections 70, 71 and 117 of the KCS Act and Rule 31 of the KCS Rules, it is the procedure prescribed hereunder and the provisions of the Code of Civil Procedure, 1908, which would govern the proceedings and would contend that with the ouster of jurisdiction of the Labor Courts and Industrial Tribunals in respect of those disputes that Would have earlier been construed as Industrial disputes, would have to be adjudicated according to the procedure that governs the adjudication of all disputes u/s 70 of the KCS Act and there is no compulsion on the part of the Registrar to import any special procedure, in the absence of any mandate in this regard. It is further contended that the workman who is terminated from his employment is without any assured source of livelihood and any delay in the adjudication of the dispute further prolongs the agony of the workman. It is contended that the strategy of the petitioner is only to delay the proceedings in seeking to raise a controversy as regards the so-called significance of the preliminary issue.
The learned Government Pleader would also seek to justify the impugned order of the first respondent, in the same vem as above.
In addressing the above controversy it would be useful to extract the relevant provisions of the KCS Act and Rules as well as the ID Act, for ready reference.
Disputes which may be referred to Registrar for decision. (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises.-
a) among members, past members and persons claiming through members, pest members and deceased members, or
b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society, or
c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs, or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or
d) between the society or any other cooperative society, [or a credit agency.]
such dispute shall be referred to the Registrar for decision and [no Civil or Labor or Revenue Court or Industrial Tribunal] shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society, namely.-
(a) a claim by the society for any debt or demand due to it front a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of a President, Vice-president, Chairman, Vice-Chairman, [or any other office-bearer] or Member of Committee of the society.
[(d) any dispute between a co-operative society and is employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a co-operative society [notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947):
(d) a claim by a co-operative society for any deficiency caused in the assets of the co-operative society by a member, past member, deceased member or deceased officer, past agent or deceased agent or by any servant, past servant or deceased servant or by its committee, past or present whether such loss be admitted or not.]
(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a cooperative society, the decision thereon of the Registrar shall be final and shall not be called to question in any Court.
Disposal of disputes. - (1) The Registrar may, on receipt of the reference of a dispute u/s 70, -
(a) decide the dispute himself, or
(b) transfer it for disposal to any person who has been invested by the State Government with powers in that behalf, or
(c) refer it for disposal to one arbitrator appointed by the Registrar.
(2) The Registrar may withdraw any reference transferred under clause (b) of sub-section (1) or referred under clause (c) of that sub-section and decide it himself.
(3) The Registrar or any other person to whom a dispute is referred for decision under this section may, pending the decision of the dispute, make such interlocutory orders as he may deem necessary in the interests of justice.
[(3-A) When a dispute is referred to an arbitrator under clause (c) sub-section (1), the award shall subject to such rules as may be prescribed, include the fee payable to the arbitrator and the fees and expenses payable to the Registrar. Such an award shall not be invalid merely on the ground that it was made after the expiry of the period fixed for deciding the dispute by the Registrar, and shall. subject to appeal or revision, be binding on the parties to the dispute.]
(4) Notwithstanding anything contained in Section 70. when any dispute under clauses (a) or (b) of sub-section ill of the said section is referred for decision to the Registrar, and the Registrar is satisfied on an application by the society concerned that in the interest of the society it is necessary for an effective decision of the dispute to implead persons who cannot be made parties to the dispute in proceedings before him, he may permit, the society to institute a regular suit in a Civil Court having jurisdiction and the Civil Court shall be competent to entertain such suit
[(5) The dispute under sub-section (1) shall be decided within a period of twelve months excluding ''he period of stay granted by the Court if any. However, the Registrar may for reasons to be recorded in writing extend the said period not exceeding eighteen months.]
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[117. Procedure for settlement of disputes and power of the Registrar or any other person to whom a dispute is referred for decision u/s 70.- (1) The Registrar or any other person to whom a dispute is referred for decision u/s 70, hearing a dispute u/s 71 shall hear the dispute in the manner prescribed, and shall have power to summon and enforce attendance of witnesses including the parties interested or any of them and to compel them to give evidence on oath, affirmation or affidavit, and to compel the production of documents by the same means and as far as possible in the same manner, as is provided in the case of a Civil Court by the Code of Civil Procedure, 1908.
(2) Except with the permission of the Registrar or any other person deckling a dispute, as the case may be, no party shall be represented at the hearing of a dispute by a legal practitioner.
(3)(a) If the Registrar or any other person to whom a dispute is referred is satisfied that a person, whether he be a member of the Co-operative Society or not, has acquired any interest in the property of a person who is a party to a dispute, he may order that the person who has acquired the interest in the property may join as a party to the dispute; and any decision that may be passed on the reference by the Registrar or his nominee or may other person shall be binding on the party so joined, in the same manner as if he were an original party to the dispute.
(b) Where a dispute has been instituted in the name of the wrong person, or where all the defendants have not been included, the Registrar or any other person to whom a dispute is referred for decision u/s 70 may, at any stage of the hearing of the dispute if satisfied that the mistake was bonafide, order any other person to be substituted or added as a plaintiff or a defendant, upon such terms as he thinks just.
(c) The Registrar or any other person to whom a dispute is referred for decision u/s 70, may, at any stage of the proceedings, either upon or without the application of any party and on such terms as may appear to the Registrar, or any other person deciding a dispute, as the case may be to be just, order that the name of any party improperly joined whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined whether as plaintiff or defendant or whose presence before the Registrar, or any other person deciding a dispute u/s 70, as the case may be, may be necessary in order to enable the Registrar or such person effectually and completely to adjudicate upon and settle all the questions involved in the dispute, be added.
(d) Any person who is a party to the dispute and entitled more than one relief in respect of the same cause of action may claim ail or any of such reliefs; but if he omits to claim for all such reliefs, he shall not forward a claim for any relief so omitted, except with the leave of the Registrar or any other person to whom a dispute is referred for decision u/s 70.]
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RULE 31 OF THE KARNATAKA CO-OPERATIVE SOCIETIES RULES, 1960.
Procedure for reference and arbitration- (1) A reference to the Registrar of any dispute u/s 70 of the Act shall be in writing and stamped with such stamp and in accordance with such scale as may be notified by Government in this behalf.
2[(2) No Co-operative Society shall refer to the Registrar any dispute relating to the election of any of its members to its committee without the previous sanction of the State Government and no amount shall be spent out of the funds of the Co-operative Society for the purpose of such dispute without the previous sanction of the State Government.]
(3) Where on receipt of a reference under sub-rule (1) the Registrar decides under clause (c) of sub-section (2) of Section 71 to refer it for disposal by arbitration, the reference shall be made to one arbitrator appointed by the Registrar.
(4)(a) The Registrar the Arbitrator or other person deciding the dispute shall, after service of summons on the parties concerned, in a manner prescribed by these rules, record a brief note of the evidence of the parties and witnesses who attend and upon the evidence so recorded, and after consideration of any documentary evidence produced by she parties, shall give a decision or award, as the case may be, in accordance with justice, equity and good conscience.
(b) The decision or award given shall be in writing and pronounced in open Court. If a party duly summoned fails to attend, the dispute may be decided ex parte. Ex parte decisions on award may on sufficient cause for non attendance being shown be set aside by the Registrar, and the dispute ordered to be re-taken on the file and disposed of.
Provided that no application for setting aside an ex parte decision or award shall lie, unless made within thirty days from the date of such decision or award, then the party for whose non-attendance, such decision or award was made, had been duly served in the dispute or in other cases within thirty days from the date of knowledge of such decision or award having been made.
(5) 1 [(a.) when the Registrar,-
(i) decides the dispute himself under clause (a); or
(ii) transfer it for disposal to any person who has been invested by the State Government with the powers in that behalf under clause (b): or
(iii) refers a dispute for disposal to an Arbitrator under clause (c), of subsection (1) of Section 71, he shall have powers to require the party or parties concerned to deposit in advance such fee as may be determined by him.]
(b) The Registrar Arbitrator, or other persons deciding a dispute u/s 71 shall have power to order the 2[fees and expenses] incurred in determining such dispute to be paid either out of the funds of the society or by such party or parties to the dispute, as he may think fit.
(c) The Registrar, may, in his discretion, remit the whole or any part of the fees collected under clause (a).
(6) (a) where one of the parties to the dispute is a minor or a person of unsound mind, the Registrar on being satisfied of the fact of the minority or unsoundness of mind, and after notice to the proposed guardian shall appoint a proper person to be guardian for such minor or person of unsound mind. The person so appointed may, for sufficient reasons, be permitted to retire or be removed and a new guardian appointed in his place.
(b) When a necessity arises for the appointment of a guardian to a minor or a person of unsound mind in a dispute before the Arbitrator appointed by the Registrar to decide the dispute, the file may be returned to the Registrar, for the appointment of a guardian.
(7) (a) when an award has been made, the person who made it should cause it to be filed in the office of the Registrar, together with any depositions and documents which have been taken and proved before him and notice of the filing shall be given to the parties.
(b) Where the decision or award involved the payment of money or delivery of grain and such payment is not made within one week or such further time as may be allowed by the Registrar, the Registrar may, on the application of the decree-holder, issue a certificate, as provided for in Section 101 of the Act. The certificate shall be in the following form:
Office of the Registrar of Co-operative Societies, Bangalore.
Dispute No. ...
Of....
Certified that a decree/decision/award as noted in the enclosure has been passed in the above dispute and the same has not been satisfied (or satisfied in part).
Seal of the Registrar.
Signature of the Registrar.
1[(8) The following scale of batta be paid to witnesses summoned by the party at whose instance the witness are summoned. The witnesses shall be divided into two classes.
Class I
Persons whose monthly income is Rs. 8,000 and above.
Class II
Persons whose monthly income is below Rs. 8,000.
SCALE OF BATTA
Traveling allowance for journey to and fro from the place of hearing where the latter is in a different station from that of the witness.
Class of witness
Journey by Road
Conveyance charges from Bus/Rail to place of the hearing
Subsistence allowance including expenses per day
At Bangalore
At other place Within the State
Class I
One and half times the bus fare
Four Rupees per Kilometer
Rs. 350-00
Rs. 200-00
Class II
One and half times the bus fare
Three Rupees per kilometer
Rs. 300-00
Rs. 175-00]
(9.) Expenses under sub-clause (8) shall be treated as costs of the dispute and the authority deciding the dispute shall have full power to determine by whom or out of what property and to what extent such costs and all other costs incidental to the dispute are to be paid and to give all necessary directions for the purposes aforesaid. Where the authority deciding the dispute directs that any costs shall not follow the event, the authority shall state its reasons in writing.
Interest on cost at any rate not exceeding six per cent per annum may be awarded and such interest shall be added to the costs and shall be recoverable as such.
SECTIONS - 10, 11 and 11A of the INDUSTRIAL DISPUTES ACT
Reference of disputes to Boards, Courts or Tribunals.- (1) [Whether the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time], by order in writing -
(a) refer the dispute to a Board for promoting a settlement, thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
[(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labor Court for adjudication: or]
[(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication:
Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen the appropriate Government may, if it so thinks fit, make the reference to a Labor Court under clause (c):]
[Provided further that] where the dispute relates to a public utility service and a notice u/s 22 has been given, the appropriate Government shall unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute any have commenced:
[Provided also that where the dispute in the relation to which the Central Government is the appropriate Government, it shall be competent for the Government to refer the dispute to a Labor Court or an Industrial Tribunal, as the case may be constituted by the State Government..]
[(1A) Where the Central Government is of opinion that any industrial dispute exists or is apprehended and the dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such dispute and that the dispute should be adjudicated by a National Tribunal, then, the Central. Government may whether or not it is the appropriate Government in relation to that dispute, at any time, by order in writing, refer the dispute or any mutter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a National Tribunal for adjudication.]
(2) Where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a reference of the dispute to a Board, Court. [Labor Court, Tribunal or National Tribunal], the appropriate Government, if satisfied that the persons applying represent the majority of each party, shall make the reference accordingly.
[(2A.) An order referring an industrial dispute to a Labor Court, Tribunal or National Tribunal under this section shall specify the period within which such Labor Court, Tribunal or National Tribunal shall submit its award on such dispute lot he appropriate Government:
Provided that where such industrial dispute is connected with an individual workman, no such period shall exceed three months:
Provided further that where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, to the Labor Court, Tribunal or National Tribunal for extension of such period or for any other reason, and the presiding officer of such Labor Court, Tribunal or National Tribunal considers it necessary or expedient to extend such period, he may for reasons to be receded in writing, extend such period by such further period as he may think fit:
Provided also that in computing any period specified in this sub-section, the period, if any, for which the proceedings before the Labor Court, Tribunal or National Tribunal had teen stayed by any injunction or order of a Civil Court shall be excluded:
Provided also that no proceedings before a Labor Court. Tribunal or National Tribunal shall lapse merely on the ground that any period specified under this sub-section had expired without such proceedings being completed.]
(3) Where an industrial dispute has been referred to a Board, 3[Labor Court, Tribunal or National Tribunal] under this section, the appropriate Government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.
5[(4) Where in an order referring an industrial dispute to 6[a Labor Court, Tribunal or National Tribunal] under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, 7[the Labor Court or the Tribunal or the National Tribunal, as the case may be,] shall confine its adjudication to those points and matters incidental thereto.]
2[(5) Where a dispute concerning any establishment or establishments has been, or is to be, referred to a 3[Labor Court, Tribunal or National Tribunal] under this section and the appropriate Government is of opinion, whether on an application made to it in this behalf or otherwise, that the dispute is of such a nature that any other establishment group or class of establishments of a similar nature is likely to the interested in, or affected by, such dispute, the appropriate Government may, at the time of making the reference or at any time thereafter but before the submission of the award, include in that reference such establishment, group or class of establishments, whether or not at the time of such inclusion any dispute exists or is apprehended in that establishment, group or class of establishments.]
4[(6) Where any reference has been made under sob-section (1A) to a National Tribunal, then notwithstanding anything contained in this Act, no Labor Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal, and accordingly,--
(a) if the matter under adjudication before the National Tribunal is pending in a proceedings before a Labor Court or Tribunal, the proceeding before the Labor Court or the Tribunal, as the case may be, in so far as it relates to such matter, shall be deemed to have been quashed on such reference to the-National Tribunal; and
(b) it shall not be lawful for the appropriate Government to refer the matter under adjudication before the National. Tribunal to any Labor Court or Tribunal for adjudication during the pendency of the proceeding in relation to such matter before the National Tribunal.]
5[Explanation.- In this sub-section. "Labor Court" or "Tribunal" includes any Court or Tribunal or other authority constituted under any law relating to investigation and settlement of industrial disputes in force in any State.]
4[(7) Where any industrial dispute, in relation to which the Central Government is not the appropriate Government, is referred to a National Tribunal, then notwithstanding anything contained in this Act, any reference in section 15 section 17, section 19, section 33A, section 33B and section. 36A to the appropriate Government in relation to such dispute shall be construed as a reference to the Central Government but, save as aforesaid and as otherwise expressly provided in this Act, any reference in any other provision of this Act to the appropriate Government in relation to that dispute shall mean a reference to the State Government.]
6[(8) No proceedings pending before a Labor Court, Tribunal or National Tribunal in relation to an industrial dispute shall lapse merely by reason of the death of any of the parties to the dispute being a workman, and such Labor Court, Tribunal or National Tribunal shall complete such proceedings and submit its award to the appropriate Government.]
Procedure and power of conciliation officers, Boards, Courts and Tribunals.- 1[(1) Subject to any rules that may be made in this behalf, an arbitrator, a Board. Court, Labor Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit.]
(2) A conciliation officer or member of a Board, [or Court or the presiding officer of a Labor Court, Tribunal or National Tribunal] may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter he premises occupied by any establishment to which the dispute relates.
(3) Every Board, Court.. 3[Labor Court, Tribunal and National Tribunal] shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure. 1908 (5 of 1908). when trying a suit, in respect of the following matters, namely:-
(a) enforcing the attendance of any person and examining him on oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witnesses;
(d) in respect of such other matters as may be prescribed,
and every inquiry or investigation by a Board, Court, 1[Labor Court, Tribunal or National Tribunal] shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860).
(4). A conciliation officer 2[may enforce the attendance of any person for the purpose of examination of such person or call for] and inspect any document which he has ground for considering to be relevant to the industrial dispute 3[or to be necessary for the purpose of verifying the implementation of any award or carrying out any other duty imposed on him under this Act, and for the aforesaid purposes, the conciliation officer shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) 4[in respect of enforcing the attendance of any person and examining him or of compelling the production of documents]].
5[(5) A Court, Labor Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as an assessor or assessors to advise it in the proceedings before it.]
6[(6) All conciliation officers, members of a Board or Court and the presiding officers of a Labor Court. Tribunal or National Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).]
7[(7) Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a Labor Court, Tribunal or National Tribunal shall be in the discretion of that Labor Court, Tribunal or National Tribunal and the Labor Court, Tribunal or National Tribunal, as the case may be, shall have mil power to determine by and to whom and to what extent and subject to what conditions, if any such costs are to be paid, and to give all necessary directions for the purposes aforesaid and such costs may, on application made to the appropriate Government by the person entitled be recovered by that Government in the same manner as an arrear of land revenue.]
1[(8) Every 2[Labor Court, Tribunal or National Tribunal] shall be deemed to be Civil Court for the purposes of 3[sections 345, 346 and 348 of the Code of Criminal Procedure, 1973 (2) of 1974)].]
4[(9) Every award made, order issued or settlement arrived at by or before Labor Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a Civil Court under Order 21 of the Code of Civil Procedure, 1908 (5 of 1908).]
4[(10) The Labor Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it.]
5[11A. Powers of Labor Courts, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen.- Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labor Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labor Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct re-instatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the ease may require:
Provided that if any proceeding under this section the Labor Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.]
The similarities in the power and procedure of the Authorities under the respective legislation is indicated hereunder:
Co-operative Societies Act
Industrial Disputes Act
a) Proceedings commence on receipt of a reference u/s 71 of the Act by the Registrar.
a) Proceedings commence on receipt of a reference by the Labor Court/Tribunal from the appropriate Government. Additionally disputes can also be raised u/s 2-A of the Act.
b) u/s 117 the Registrar shall hear the dispute in the manner prescribed and shall have the power to
i) Summon and enforce attendance of witnesses including the parties interested or any of them.
ii) To compel to give evidence on oath, affirmation or affidavit
iii) To compel the production of documents
by the same means and as far as possible in the same manner as is provided in the case of a Civil Court by the Civil Procedure Code, 1908.
b) u/s 11(3) the Labor Court, Tribunal etc shall nave the same powers as are vested in a Civil Court under the Code of Civil Procedure. 1908 when trying a Suit in respect, of the following
i) enforcing the attendance of any person and examining him on oath.
ii) compelling the production of documents and material objects
iii) issuing commission for the examination of witness
iv) in respect of such other matters as may be prescribed
c) The Authority under the Act has the power to record evidence of the parties and witnesses who attend the proceedings and also consider any documentary evidence produced by the parties - Rule 31(4)(a) of Chapter VII of the Karnataka Co-operative Societies Rules.
c) Tribunal/Labor Court has the power to record evidence of parties and witnesses and also consider documentary evidence.
d) The proceedings before the Registrar are original in nature.
d) The proceedings before the Tribunal/Labor Court are original in nature.
e) The Registrar has the power to give a final decision or award after considering the entire documentary and oral evidence in accordance justice, equity and good conscience.
e) The Tribunal/Labor Court has the power to record evidence and to decide the case finally by giving its own findings.
f) The decision of the Registrar shall be in writing and pronounced in open Court - Rule 31(4)(b) of Karnataka Co-operative Societies Rules.
f) The award of the Tribunal/Labor Court shall be in writing and shall be signed by its Presiding Officer Section 16(2)
g) Any dispute between a Co-operative Society and its employees or past employees or heirs or legal representatives of deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a Co-operative Society can be referred for settlement u/s 70.
g) According to Section 2(k) industrial dispute means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labor; of any person.
The procedure to be followed by the Labor Courts and Industrial Tribunals and the scope of Sections 10, 11 and 11A of the ID Act has been spelt out by the apex court in The Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. Vs. The Management and Others, . On a discussion of the entire case-law. it was held thus:
From those decisions, the following principles broadly emerge:-
(1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal, the latter has power to see if action of the employer is justified.
(2) Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the Standing Orders, if applicable, and principles of nature justice. The enquiry should not be an empty formality.
(3) When a proper enquiry has been held by an employer, and the finding of misconduct is plausible conclusion flowing from the evidence, adduced at the said enquiry, the Tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body. ''The interference with the decision of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is guilty of victimization, unfair labor practice or mala fide.
(4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.
(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it has to decide for itself whether the misconduct alleged is proved. In such cases, the point about exercise of managerial junctions does not arise at all, A case of defective enquiry stands on the same footing as no enquiry.
(6) The Tribunal gets jurisdiction to consider the evidence placed before, it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found, to be defective.
(7) It has never been recognized that the Tribunal, should straightway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.
(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an, opportunity to an employer to adduce evidence for the first lime before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct.
(9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot he interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest victimization.
(10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is as held by this Court in The Management of Panitole Tea Estate Vs. The Workmen, within the judicial decision of a Labor Court or Tribunal,
The above was the law as laid down by this court as on 15.12.1971 applicable to all industrial adjudication arising out of orders of dismissal or discharge.
The question is whether Section 11A has made any changes in the legal position mentioned above and if so, to what extent?....
XXXXX
We have already expressed our view regarding the interpretation of Section 11A. We have held that the previous law, according, to the decisions of this Court, in cases where a proper domestic enquiry had been held, was that the Tribunal had no jurisdiction to interfere with the finding of misconduct except under certain circumstances. The position further was that the Tribunal had no jurisdiction to interfere with the punishment imposed by an employer both in cases where the misconduct is established in a proper domestic enquiry as also in cases where the Tribunal finds such misconduct proved on the basis of evidence adduced before it, These limitations on the powers of the Tribunals were recognized by this Court mainly on the basis that the power to take disciplinary action and impose punishment was part of the managerial functions. That means that the law, as laid down by this Court over a period of years, had recognized certain managerial rights in an employer. We have pointed out that this position has now been changed by Section 11A. The section has the effect of altering the law by abridging the rights of the employer inasmuch as it gives power to the Tribunal for the first time to differ both on a finding of misconduct arrived at by an employer as well as the punishment imposed by him. Hence in order to make the Section applicable even to disputes, which had been referred prior to the coming into force of the section, there should be such a clear, express and manifest indication in the section. There is no such express indication. An inference that the section applies to proceedings, which arc-already pending, can also be gathered by necessary intendment. In the case on hand, no such inference can be drawn as the indications are to the contrary. We have already referred to the proviso to section 11A which states ''in any proceedings under this section''. A proceeding under the section can only he after the section has come into force. Further the section itself was brought into force some time after the Amendment Act was passed. These circumstances as well as the scheme of the section and particularly the wording of the Proviso indicate that Section 11A does not apply to disputes which had been referred prior to 15.12.1971 The section applies only to disputes which are referred for adjudication on or after 15.12.1971. To conclude, in our opinion, Section 11A has no application to disputes referred prior to 15.12.1971. Such disputes have to be dealt with according to the decisions of this Court already referred to.
And in The Cooper Engineering Limited Vs. Shri P.P. Mundhe, - thus :
Referring to the State Bank''s case (supra) in Delhi Cloth and General Mills Co. Vs. Ludh Budh Singh, this Court observed that -
the grievance of the management before this Court that the Tribunal should have given such an opportunity suo motu was not accepted in the circumstances of that case.
There was a further observation in the Delhi Cloth and. General Mills case (supra) to the following effect:
It may be pointed cats that the Delhi and Madhya Pradesh High Courts had held that it is the duty of the Tribunal to decide, in the first instance, the propriety of the domestic enquiry-held by the management and if it records a finding against the management, it should suo motu provide an opportunity to the management to adduce additional evidence, even though the management had made no such, request. ''This view was held to be erroneous by this Court, in State Bank of India v. R.K. Jain (supra).
We may now refer to the propositions (4). (5) and (6) in the Delhi Cloth and General Mills'' case (supra):
(4) When a domestic enquiry has been held by the management and the management relies on the same, it is open to the latter to request the Tribunal to try the validity of the domestic enquiry as a preliminary issue and also ask for an opportunity to adduce evidence before the Tribunal if the finding on the preliminary issue is against the management. However elaborate and cumbersome the procedure may he, under such circumstances, it is open to the Tribunal to deal. In the first instance, as a preliminary issue the validity of the domestic enquiry. If its finding on the preliminary issue is in favor of the management, then no additional evidence need to cited by the management. But, if the finding on the preliminary issue is against the management the Tribunal will have to given the employer an opportunity to cite additional evidence and also give a similar opportunity to the employee to lead evidence contra, as the request to adduce evidence had been made by the management to the Tribunal during the course of the proceedings and before the trial has come to an end....
(5) The management has got a right to attempt to sustain its order by adducing independent evidence before the Tribunal. But the management should avail itself of the said opportunity by making a suitable request to the Tribunal before the proceedings are closed. If no such opportunity has been availed of or asked for by the management, before the proceedings are closed, the employer can make no grievance that the Tribunal did not provide such an opportunity The Tribunal will have before it only the enquiry proceedings and it has to decide whether the proceedings have been held properly and the findings recorded therein are also proper.
(6) If the employer relies only on the domestic enquiry and does not simultaneously lead'' additional evidence or ask for an opportunity during the pendency of the proceedings to adduce such evidence, the duty of the Tribunal is only to consider the validity of the domestic enquiry as well as the finding recorded therein and decide the matter. If the Tribunal decides that the domestic enquiry has not been held properly, it is not its function to invite suo motu the employer to adduce evidence before it to justify the action taken by it.
In the Delia Cloth and General Mills'' case (supra) dealing with the case of the management''s application to adduce evidence after close of arguments, although on the same day after the Court reserved judgment, this Court observed as follows: -
The appellant did not ask for an opportunity to adduce evidence when the proceedings were pending nor did it avail itself of the right given to it in law to adduce evidence before the Tribunal during the pendency of the proceedings.
In The Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. Vs. The Management and Others, this Court stated the law laid down by this Court as on December 15, 1971. For our purpose we will extract from that decision only propositions 4,6,7 and 8:
(4) ''Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the ''Tribunal in order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action.
(6) The ''Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to he defective.
(7) ft has never been recognized that the ''Tribunal should straightway, without anything more, direct reinstatement of a dismissed or discharged employee once it is found that no domestic enquiry has been held or the said enquiry is found 10 be defective.
(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the ''Tribunal has no power to refuse. ''The giving of opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct.
We are particularly concerned with proposition (8), What is the appropriate stage was specifically adverted to in the Delhi Cloth and General Mills'' case (supra) which we are now required to seriously consider whether this conclusion is correct and ensures justice to all concerned in an industrial adjudication.
Propositions (4), (6) and (7) set out above are well-recognised. Is it, however, fair and in accordance with the principles of natural justice for the Labor Court to withhold its decision on a jurisdictional point at the appropriate stage and visit a party with evil consequences of a default on its part in not asking the Court to give an opportunity to adduce additional evidence at the commencement of the proceedings or, at any rate, in advance additional evidence at the commencement of the proceedings or, at any rate, in advance of the pronouncement of the order in that behalf? In our considered pinion it will be most unnatural and unpractical to expect a party to take a definite stand when a decision of a jurisdictional fact has first to be reached by the Labor Court prior to embarking upon the enquiry to decide the dispute on its merits. The reference involves determination of the larger issue of discharge or dismissal and not merely whether a correct procedure had been followed by the management before passing the order of dismissal. Besides, even if the order of dismissal is set aside on the ground of defect of enquiry, a second enquiry after reinstatement is not ruled out nor in all probability a second reference. Where will this lead to ? This is neither going to achieve the paramount object of the Act, namely, industrial peace, since the award in that case will not lead to a settlement of the dispute. The Dispute, being eclipsed, pro tempore, as a result of such an award, will be revived and industrial peace will again he ruptured. Again another object of expeditious disposal of an industrial dispute (see S. 15) will be clearly defeated resulting in duplication of proceedings. This position has to be avoided in the interest of labor as well as of the employer and in furtherance of the ultimate aim of the Act to foster industrial peace.
We are therefore, clearly of opinion that when a ease of dismissal of discharge of an employee is referred for industrial adjudication the Labor Court should first decide as a preliminary issue whether the domestic enquiry has violated the principles of natural justice. When there is no domestic enquiry or defective enquiry is admitted by the employer there will be no difficulty. But when the matter is in controversy between the parties that question must be decided as a preliminary issue. On that decision being pronounced it will he for the management to decide whether it will adduce any evidence before the Labor Court. If it chooses not to adduce any evidence, it will not be thereafter permissible in any proceeding to raise the issue. We should also make it clear that there will be no justification for any party to stall the final adjudication of the dispute by the Labor Court by questioning its decision with regard to the preliminary issue when the matter, if worthy, can be agitated even after the final award, it will be also legitimate for the High Court to refuse to intervene at this stage. We are making these observations in our anxiety that there is no undue delay in industrial adjudication.
The question of law that would arise for consideration before this court is whether there is an implied obligation on the Registrar in adjudicating a dispute u/s 70 of the KCS Act, answering to the definition of an industrial dispute under the ID Act, to comply with the mandatory procedure as was laid down by the apex court in the above decisions, in the adjudication of an industrial dispute by a labor Court or an Industrial Tribunal.
Incidentally, it would be necessary to keep in view the changes that Section 70 of the KCS Act was subjected 10, insofar as the remedy that was available to a workman in respect of a dispute in the nature of an industrial dispute. The apex court has in Dharappa Vs. Bijapur Co-operative Milk Producers Societies Union Ltd., has addressed that aspect as follows :
9 It is necessary in refer to the metamorphosis of section 70 of the KCS Act, before considering this question. The said section originally stood as follows:-
Disputes which may he referred to Registrar for decision (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises,
(a) and (b) xxxxx (omitted as not relevant)
(c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs, or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or
(d) x x x (omitted as not relevant)
such dispute shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purposes of sub-section (1), the following shall he deemed to be disputes touching the constitution, management or the business of a co-operative society, namely.
(a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of a President, Vice-President, Chairman, Vice-Chairman, Secretary, Treasurer or Member of Committee of the society.
(3) x x x (omitted as not relevant).
Section 70 was emended by Karnataka Co-operative Societies (Amendment) Act, 1976 (Karnataka Act 19 of 1976). The Amendment Act received the assent of the Governor on 7.3.1976. It was brought into effect from 20.1.1976. The Amendment Act added the following as clauses (d) and (e) in sub section (2) of section 70;
(d) any dispute between a cooperative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a co-operative society;
(e) a claim by a co-operative society for any deficiency caused in the assets of the co-operative society by a member, past member. deceased member or deceased officer, past agent or deceased agent or by any servant, past servant or deceased servant or by its committee, past or present whether such toss be admitted or not.
Section 70 was again amended by Karnataka Co-operative Societies (Second Amendment) Act, 1997 (Karnataka Act NO.2/2000) in the following manner:
(i) In sub-section (1), for the words "no court", the words "no civil or Labor or Revenue Court or Industrial Tribunal" were substituted.
(ii) At the end of clause (d) of subsection (2), the words "notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947)", were inserted.
The said Amendment Act (Act 2 of 2000) received the assent of the President on 18.3.2000 and was brought into force on 20.6.2000. After the said amendments in 1996 and 2000, Section 70 of KCS Act (relevant portion) reads thus:
Notwithstanding anything contained in any law for the time being inn force, if any dispute touching the constitutions, management, or the business of a Co-operative Society arises......... between the Society or its committee and......... any officer, agent or employee, or any past officer, past agent or past employee...... of the Society, - such dispute shall be referred to the Registrar for decision and no Civil or Labor or Revenue Court or Industrial Tribunal shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
For the purposes of sub-section (1), the following shall be deemed to he disputes touching the constitution, management or the business of a Co-operative Society, namely......(d) any dispute between a co-operative Society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute, regarding the terms of employment, working conditions, and disciplinary action taken by a Co-operative Society notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947).
The Apex Court has then concluded as follows :
The resultant position can be summarized thus:
(a) Even though clause (d) was added in Section 70(2) with effect from 20.1.1976, section 70(1) did nor exclude or take away the jurisdiction of the Labor Courts and Industrial Tribunals under the I.D. Act to decide an industrial dispute between a society and its employees. Consequently, even after insertion of clause id) in Section 70(2) with effect from 20.1.1976, the Labor Courts and industrial Tribunals under the I.D. Act, continued to have jurisdiction to decide disputes between societies and their employees.
(b) The jurisdiction of Labor Courts and Industrial Tribunals to decide the disputes between co-operative societies and their employees was taken away only when sub-section (1) and sub-section (2)(d) of section 70 were amended by Act 2 of 2000 and the amendment received the assent of the President on 18.3.2000 and was brought into effect on 20.6.2000.
(c) The jurisdiction to decide any dispute of the nature mentioned in section 70(2)(d) of the KCS Act. if it answered the definition of industrial dispute, vested thus;
(i) exclusively with Labor Courts and Industrial Tribunals till 20.1.1976;
(ii) concurrently with Labor Courts/Industrial Tribunals under ID Act and with Registrar u/s 70 of the KCS Act between 20 1.1976 and 20.6.2000: and
(iii) exclusively with the Registrar u/s 70 of the KCS Act with effect from 20.6.2000.
The amendment to the Section was intended, to "make co-operative institutions economically sound in the interest of Society and its members; to bar industrial Tribunals from entertaining disputes of the nature of industrial disputes arising under the Co-operative Societies Act, in order to avoid multiplicity of forums (sic) (fora), and for certain other purposes" - as indicated in the Statement of Objects and Reasons appended to Amending Act no. 2 of 2000, In other words it was intended that the remedy which was available to a workman, under a Co-operative Society, in respect of an industrial dispute before the Labor court was now to be availed only by recourse to a dispute u/s 70 of the KCS Act, before the Registrar.
In the opinion of this court it may be safely implied that the principles, as laid down with regard to the procedure to be followed in the case of an industrial dispute u/s 10, 11 and 11-A of the ID Act, would have to be applied with equal rigor and force in proceedings u/s 70 in respect of a dispute answering to the definition of an industrial dispute. It is unnecessary to reiterate the settled principles in relation to the adjudication of an industrial dispute - as spelt out in the above quoted judgments of the supreme court.
In so far as the apprehension of the second respondent that the contemplated procedure as above would procrastinate the proceedings and would lead to an avoidable delay, is not a well founded apprehension. On the other hand, as pointed out by the apex court it is in order avoid a duplication of proceedings and to avoid delay in adjudication that such a procedure is contemplated.
In the result the writ petition is allowed. The impugned order is quashed. The first respondent is directed to decide issue no.3 above, as a preliminary issue in the first instance before proceeding further in the matter.