The prayer in this writ petition is for issuance of a writ of certiorari to quash the impugned order, dated 30.10.2007, passed in C.M.A.Nos.52 of 2005 and 23 of 2006, in sofar as remanding the surcharge case No.5/02-03 to the second respondent for fresh enquiry and also to quash the order, dated 09.01.2000, passed in Surcharge Case No.5/02-03, passed by the second respondent.
2. The petitioners were the elected Directors of the Tamil Nadu State Transport Corporation Workers Co-operative Stores, Madurai, which is registered under the Tamil Nadu Co-operative Societies Act, 1981 (hereinafter, it may be referred to as ?the Act?). During their tenure period between 01.11.1996 and 25.04.2001, until the Government superseded all Boards of the Co-operatives in Tamil Nadu, their Society was functioning very well and the volume of business was increased from Rs.3,60,00,000/- to Rs.6,40,00,000/- and new branches were opened in Madurai, Virudhunagar and Pudukkottai. The entire records of the Co-operative Stores were computerised. When they assumed office as Directors, there were 28 permanent staff and 2 temporary staff as against the sanctioned strength of 35 staff. The membership was increased from 8,500 to 10,800 and due to the increase in the volume of business and the turnover, there were need of more staff. Moreover, four more new stores were also opened, which required manpower to manage the affairs of the stores. Therefore, the petitioners, being Directors, had decided to increase the cadre strength from 35 to 50 and engaged ten temporary workmen on daily wage basis in order to meet the business exigencies. Even though 50 staff were required, the petitioners had managed the affairs of the stores with 40 staff. After the petitioners had demitted the office on 24.05.2001, the Special Officer had appointed nine workers on daily wage basis and five workers on contract basis, besides the existing strength of 40, which would go to show that the engagement made by the petitioners was due to bona fide business requirement.
3. When such being so, two temporary workmen, who were engaged by the Special Officer, had approached the Authority under the Act claiming permanency. While the petitioners were functioning as Board of Directors resisted the same as the persons, who claimed permanency, were not engaged through Employment Exchange. But, the Authority concerned, by order dated 01.09.1999, directed the Special Officer to make them permanent as they had worked more than 480 days in 24 Calender months. Therefore, as per the directions of the Authority, they were made permanent. Thereafter, as per 12(3) Settlement, 11 more workmen were also made permanent. Hence, the Co- operative Stores were constrained to spend 3.08% of the annual turnover pursuant to the 12(3) settlement. However, during their tenure, spending of 3.08% was came down to 2.6%. In such circumstances, instead of appreciating the efforts taken by the petitioners, the Deputy Registrar of Co-operative Societies, Madurai, issued a notice, dated 10.01.2003, initiating surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies Act. The crux of the allegations was that by granting permanent status to 12 workmen, expenditure of Rs.1,43,271/- was spent and the total expenditure of Rs.4,12,016 /-, for the period between 01.10.1998 and 31.07.2000, was ordered to be recovered with 18% interest.
4. According to the petitioners, it was informed that the show-cause notice was issued based on the investigation report under Section 82 of the Act. But, no such basic records were furnished to them for submitting explanation. Even though the provisions of the Act mandates communication of the report within a period of three months, it was not done. The provisions of the Industrial Dispute Act would prevail over the provisions of the Tamil Nadu Co-operative Societies as per the decision reported in Trichy HPRM. Co-op. BK. EMP. UN. ETC. v. JT. REG., v. Co-op. SOC. Trichy, Etc., reported in 1992 (1) LLJ 747. Therefore, when 12(3) settlement was arrived at and the workmen were made permanent pursuant to the statutory requirement, it cannot be said that the expenditure is on the part of the Board of Directors. Without considering the said points, the second respondent, vide order, dated 09.01.2004, ordered recovery of a sum of Rs.5,55,332/- with 18% interest was ordered. Aggrieved by the same, the petitioners preferred two appeals in C.M.A.No.52 of 2005 and 23 of 2006 before the first respondent and the first respondent, by a common Judgment dated 30.10.2007, had set aside the order of the second respondent, dated 09.01.2004 and remanded back the matter to the file of the second respondent for fresh consideration. Aggrieved by the portion of the Judgment remitting back the matter to the second respondent by the first respondent, the petitioners are before this Court.
5. The learned counsel appearing for the petitioners submitted that the first respondent instead of deciding the issues on merits had found fault with the findings of the second respondent and had remitted the matter back to the file of the second respondent. By the said action, the first respondent has committed a gross error in not deciding the issues on merits. The issue to be decided in this case is as to whether the expenditure incurred as per the settlement under
Section 12(3) of the Industrial Disputes Act is correct or not and whether the second respondent, while taking the surcharge proceedings under Section 87 of the Act had followed the procedures established under the provisions of the Act in conformity with the principles of natural justice. Even though there are several decisions in this regard, the first respondent had directed the second respondent to consider the same and pass orders afresh.
6. The learned counsel appearing for the petitioners, in support of his contentions, has placed reliance upon the decision in Trichy HPRM. Co-op. BK. EMP. UN. ETC. (cited supra), wherein it is held that settlement under
Section 12(3) of the Industrial Disputes Act between the Co-operative Societies and their employees concerning wage structure cannot be ignored. Further, the subsequent supersession of elected bodies and appointment of Special Officers by issuing circulars by the Registrar of Co-operative Societies was held to be incompetent and without jurisdiction.
7. Heard both sides and perused the materials produced.
8. In the instant case, the gravamen of the charge was that by entering into 12(3) settlement, the petitioners had caused loss to the Co-operative Stores. As per the statutory provisions of the Act, in the considered opinion of this Court, it cannot be found fault with. As per the decision of this Court in Jina Chandran, S. and others v. The Registrar of Co-operative Societies and others, reported in 2000 Writ L.R.97, the lawful settlement arrived between the Society and its employees under the Industrial Disputes Act is not liable to be unilaterally set aside by the Registrar of Co-operative Societies and they cannot initiate proceedings under Section 153 of the Act and initiate recovery proceedings under Section 81 of the Act. Therefore, the impugned orders herein have no legal propriety. The action shall not be based on the animosity or ill-will. Subsequent to the supersession of the Board of Directors, the second respondent had issued the show-cause notice and passed the orders of recovery, more so, without following the principles of natural justice by supplying the investigation report and giving opportunity to the petitioners to explain as to why the investigation report had no basis.
9. Therefore, it is clear that the impugned action taken by the respondents are without jurisdiction and there is no legal propriety to question the settlement arrived at between the Co-operative Society and its employees in accordance with the provisions of the Industrial Disputes Act. Therefore, the impugned orders passed by both the respondents are liable to be set aside.
10. In the result, the writ petition is allowed and the impugned order, dated 30.10.2007, passed in C.M.A.Nos.52 of 2005, by the first respondent as well as the the order, dated 09.01.2000, passed in Surcharge Case No.5/02-03, passed by the second respondent, are set aside. No costs.
To:
1.The Principal District Judge, Co-operative Tribunal, Madurai.
2.The Deputy Registrar of Co-operative Societies, Plot No.35, Muthu Nachiyar Illam, K.K.Nagar, Madurai-20..