CIVIL APPEAL 22251 of 2011 on 24 April 1999

1. The 2[nd] respondent had before him two options. One, to challengethe resolutions dated April 24, 1999 and May 24, 1999 by way of notice forretrenchment on closure of consumer cell of the petitioner society of whichhe was in charge but rendered surplus, by electing remedy of appealprovided by Rule 15 (1) of the Punjab State Cooperative AgriculturalService Societies Service Rules, 1997 ("1997 Rules"): or, Two; to apply forthe remedy provided by Section 2A read with Section 10 (1) (c) of theIndustrial Disputes Act, 1947 ("ID Act") apart from any other remedyavailable in law. Once he chose an appeal Rule 15 (1) read with Sections 55& 56 of the Punjab Cooperative Societies Act, 1961 ("1961 Act") before theDeputy Registrar, Cooperative Societies, Ludhiana and thereafter the only remedial path based on election of remedy was to take recourse to revisionetc. The 2[nd] respondent succeeded before the DRCS, Ludhiana. Thepetitioning-Cooperative Society aggrieved by the order declaringretrenchment illegal and by way of dismissal from service filed a revisionbefore the Joint Registrar, Cooperative Societies who reversed the order ofthe Deputy Registrar and upheld the order of retrenchment/termination.

2. Dissatisfied with the order in revision, the 2[nd] respondent filed arevision under Section 69 of the 1961 Act before the Special Secretary,Cooperation Punjab Chandigarh which was dismissed and the resolutionsimpugned leading to retrenchment were upheld. The Special Secretary heldthat the consumer cell of the Cooperative Society was meant as an outlet forsale of daily needs to the members of the society, like sale of cloth, soap,tea, kerosene oil and Ghee etc. As an incharge salesman of the consumercell his lack of effort forced the closure of the consumer cell when it couldearn only `11,099/- in seven years, whereas the society had borne theburden of paying salary of `4,342/- per month to him which came to`52,000/- approximately per year and as such against the profits from 1993till 1999 the salary paid was in the region of `3.6 lacs.

3. In these circumstances the management of the society took intoconsideration the interest of the society and its members and came to theconclusion that it would be best to close the consumer cell and to retrenchthe 2[nd] respondent from service. It is not disputed that no further litigationwas carried to the High Court and the orders had attained finality.

4. Unsuccessful in the litigation, the 2[nd] respondent gave up thechase to its logical end in the previous proceedings, and turn around to serve a demand notice on the Society by raising a dispute under the ID Act.The dispute was referred for adjudication.

5. The Presiding Officer, Labour Court, Ludhiana vide the impugnedaward dated September 15, 2011 reinstated the respondent to service withcontinuity and 50% back wages and held that if the compensation hasalready been paid to the workman, as alleged by the respondent, the samewould be adjusted towards arrears.

6. The most central issue, as I understand, was that the societyproved as a fact that at the time of retrenchment, a cheque was sent towardsretrenchment compensation which was returned by the 2[nd] respondent apartfrom the issue of the bona fides of closure of the consumer cell as it hadturned out over the years to be uneconomic and a drain on a society.

7. In this scenario, even assuming that retrenchment compensationwas not paid or the cheque represented gratuity and not retrenchmentcompensation, even then the plea the 2[nd] respondent should not succeed in asecond round of litigation. The first proceedings were definitely withinjurisdiction and resort was had by the workman himself to the availablemachinery for dispute settlement. Having failed before the authorities underthe 1961 Act he could not turn around and start litigation again. This wouldbe contrary to public policy that litigation must come to an end in a logicalmanner in Courts of competent jurisdiction. It would have been anothermatter if in the beginning the workman has sought his remedies under theID Act, then the balance of the case may have shifted to determine industrialrights.

8. Far too much was made of by the Labour Court on the testimony of MW-1 Malager Singh, Secretary of the society recorded years after theretrenchment and based judgment on that oral and interested testimony of aco-member. The Labour Court believed that there was no evidence led bythe society to prove that it was actually running into losses or the financialposition was so poor compelling it to retrench the respondent who wasactually working as Cashier-cum-Salesman. It has been observed that inaddition to the duties of Cashier-cum-Salesman the respondent was givenduties of running the Cooperative Consumer Cell also, which was not hisprimary or main function. It was on these premises that the Labour Courtheld that if the consumer cell failed economically and had to be shut thatwould not justify retrenchment of the workman, since the society continuesand was not dissolved. This is how the retrenchment was declared illegaland arbitrary and violative of the provisions of the ID Act.

9. Regarding alleged compensation amounting to `21736/- to therespondent paid vide cheque dated January 21, 2003 the labour court heldthat this could not be valid and legal tender of retrenchment compensationunder the ID Act since retrenchment compensation has to be paidsimultaneously and on the same day and time when the workman wasretrenched or terminated. The termination took effect on April 24, 1999 andthe alleged payment of compensation was paid on January 21, 2003. But as Imight think, all this rigmarole is inconsequential and insignificant in viewof the fact that the respondent elected legal remedy before the Cooperativeauthorities in the Cooperative Department and failed. The dispute before theauthorities and the Labour Court was one and the same thing arising out ofdeclaration of surplus and closure of consumer cell. At best, the respondent would be entitled to closure compensation which can be paid later butwould not invalidate the termination. It were the two impugned resolutionswhich were under challenge before the authorities under the 1961 Act andthose resolutions were upheld as legal and valid.

10. Even before the Deputy Registrar, Cooperative Societies in appealthe respondent had agitated that no charge-sheet or inquiry was conductedand nor was he heard before the resolutions were passed or was givenreasonable opportunity to produce his evidence. The society had not issueda show cause notice before termination of services while Rule 14 of the1997 Rules prescribe that for infliction of major punishment holding ofinquiry is sine qua non. The respondent had argued before the authorities inrevision that the society did not comply with the provisions of Section 25-Fof the ID Act and, therefore, the resolution is illegal and unlawful.

11. The Joint Registrar, Cooperative Societies in his order datedDecember 30, 2002 struck at the heart of the matter when rightly observingthat had the respondent wanted to challenge the resolutions dated April 24,1999 and May 24, 1999 then he should have taken it before the LabourCourt in the first instance and not before the DRCS, Ludhiana where thereexists a provision of appeal and revision against the resolutions which havebeen passed by the society. But the Labour Court did not direct its reasoningto this vital issue when it should have. The Special Secretary Cooperation(Appeals), Punjab by his order dated February 17, 2004 agreed with therevisional order that if the present respondent wanted to challenge theresolutions then he should have approached the Labour Court. I am sorry tosay that the learned Labour Court has wrongly recorded in the impugned award in para.9 that: "ultimately, he was directed to avail his remedy beforethe Labour Court". This was far from the truth. There may be somediscussion in the work of the authorities under the Cooperative law in thetwo revisions but there are no directions as imagined by the Labour Court.The Labour Court may have glanced at the orders but not read them.

12. There is a material difference in foreclosing the case to seekremedies under the ID Act and deciding the case on merits of theresolutions. In any case, every violation of Section 25-F of the ID Act willnot lead to reinstatement mechanically or automatically. The petitioner hashad the benefit of Section 17-B of the ID Act in these proceedings andpayments have been made of a sizeable amount from time to time which is abenefit he can keep as it cannot be ordered to be refunded in the event offailure of the workman's case.

13. Having heard the Mr. Bedi and Mr. Doabia, the learned counselfor the parties at sufficient length and am of the view that in the facts andcircumstances of the case, the respondent workman has to be held down tothe remedy elected by him before the authorities in the cooperationdepartment which were capable of bringing relief to him. Those proceedingscould only have been taken to their logical conclusion by filing writ petitionin the High Court against the decision of the Special Secretary etc. I amconvinced that the 2[nd] respondent should not in law and fact be allowed tochange track to play a fresh innings on the same subject matter resolutionsdated April 24, 1999 and May 24, 1999. If it was allowed, it was upon areference order which is invalidated and the proceedings thereon being nomore than vexatious litigation. Any other view may be contrary to public interest and lead to encouraging misconceived and endless litigation. 14.In view of the above discussion, I find sufficient merit in thispetition to set aside the impugned award and revert the 2[nd] respondent to theposition obtaining by the order of the Special Secretary, Cooperation(Appeals) Punjab dated February 17, 2004 dismissing the revision.15.The petition is allowed.

(RAJIV NARAIN RAINA) JUDGE19.4.2017manjuWhether speaking/reasoned YesWhether reportableYes