WP/5609/2010 of The Yanamadala Primary Agricultural Cooperative Vs Pilli Srinivasa Rao, on 30 December 2013

ORDER

The present writ petition is filed by a Primary AgriculturalCooperative Credit Society assailing the order dated 19.09.2009 inA.P.S.A.No.2 of 2009 passed by the appellate authority underSection 48 of the Andhra Pradesh Shops and Establishment Act,1988 (‘the Act’ for brevity), whereby the said appellate authorityconfirmed the orders of the primary authority, i.e., the JointCommissioner of Labour, Eluru, West Godavari District, inA.P.S.E.No.3 of 2007 dated 24.04.2008, with a partial modificationas to the payment of back wages.

2. The facts, in brief, are that the first respondent was initiallyemployed as a Clerk in the petitioner Society on 01.12.1993; later,through letter dated 03.11.1995, his services were terminated. Thefacts further reveal that initially the first respondent was given anoption to obtain permission from the Divisional CooperativeOfficer, Rajahmundry, but when he has failed to obtain thepermission, his services have been terminated. Aggrieved by thesummary removal from the service, the first respondent filedW.P.No.26199 of 1995, which was dismissed by this Court throughits order dated 15.09.2006 by giving liberty to the first respondent to availhimself of an appropriate remedy available in law, if he is soadvised.

3. Consequent upon the dismissal of W.P.No.26199 of 1995, the first respondent approached the third respondent invokingSection 48 (3) of the Act and filed A.P.S.E.No.3 of 2007, whicheventually came to be allowed through an order dated 24.04.2008. In fact, the primary authority directed the petitioner herein toreinstate the first respondent with immediate effect with full backwages and with all attendant benefits, within 30 days from the dateof receipt of the order.

4. Aggrieved by the order of the primary authority, thepetitioner Society filed an appeal in A.P.S.A.No.2 of 2007 beforethe second respondent, who in turn through orders dated19.09.2009 allowed the said appeal partially modifying the order ofthe primary authority only to the extent of back wages. Furtheraggrieved, the petitioner Society approached this Court by filingthe present writ petition.

5. Smt Bobba Vijaya Lakshmi, the learned counsel for thepetitioner, in the above factual backdrop, has strenuouslycontended that both the authorities under the Act have gravelyerred in directing the reinstatement of the first respondent,inasmuch as the provisions of the Act have no application,especially, when the whole issue is governed by Section 116-C ofAndhra Pradesh Cooperative Societies Act, 1964 (‘the APCS Act’for brevity). The leaned counsel, placing reliance on certainprecedents of this Court, has further contended that both theauthorities have failed to take into consideration Rule 36-B ofAndhra Pradesh Cooperative Societies Rules, 1964 (‘the APCSRules), wherein it is mandated that the Managing Committee shall

be liable for the excess expenditure. She has further contendedthat initially the first respondent was given an opportunity to gethis appointment regularized, and only on his failure, the Societywas compelled to take the decision of removing the petitioner fromservice. Laying heavy stress on the provisions of Andhra Pradesh(Regulation of Appointments to Public Services and Rationalisationof Staff Pattern and Pay Structure)(Amendment) Act, 2004, thelearned counsel has stated that the said enactment suffered anamendment with retrospective effect i.e. from 25.11.1993, and asper the said amendment, the very appointment of the firstrespondent is illegal. Once the entry of an employee is declared tobe illegal being in violation of any statutory provision, the saidemployee could not be protected by any procedural safeguards,especially, those that have been contemplated under the Act,which are applicable only to those employees whose appointmentis regular. The learned counsel has also tried to impress upon theCourt that as per Section 116-C of the APCS Act, which came intoexistence for the first time in 2001, financial limitations have beenimposed on the Cooperative Society, especially, with regard to thestaffing pattern. According to the learned counsel, the position ofthe petitioner in the Society has become untenable, since keepinghim in service would result in the expenditure on the staff crossingthe limit stipulated under Section 116-C and other concomitantprovisions of the APCS Act. Thus, the learned counsel hasstrenuously contended that the authorities below have erred indirecting the reinstatement. In support of her submissions, thelearned counsel has placed reliance on an unreported judgment, dt.20.09.2010 of this Court in W.P.No.499 of 2005, and alsoanother judgment of this Court in A. SUBRAMANYAM NAIDU v.

GOVERNMENT OF ANDHRA PRADESH[[1]].

6. Per contra, Sri P. Sudheer, the learned counsel appearingfor the first respondent, has strenuously opposed the claims andcontentions of the petitioner. In furtherance of the pleas taken inW.V.M.P.No.4909 of 2010, which was filed to have the interimorders granted earlier on 11.3.2010 vacated, he has contendedthat the Act squarely applies to the petitioner’s case, since theremoval of the first respondent was in violation of the barsimposed under the Act. The authorities under the said enactmenti.e., the primary authority and also the appellate authority, haveconcurrently declared that the petitioner’s removal from service isillegal and have consequentially recommended the petitioner’sreinstatement. The learned counsel has further submitted thatthough the appellate authority has modified the order to the extentof limiting the back wages to a particular period, even to this date,the petitioner Society has not paid the wages. The learnedcounsel has further contended that the decisions that have beenrelied on by the learned counsel for the petitioner have no relianceto the facts of the case and that the order impugned does notsuffer from any infirmities which fall within the scope of thecertiorari jurisdiction of this Court. Accordingly, the learnedcounsel has urged this Court to dismiss the writ petition.

7. Heard the learned counsel for the petitioner and the learnedcounsel for the first respondent, apart from perusing the record.

8. The issue that falls for consideration in the present writpetition is very narrow in its scope: Whether the provisions of theAct, especially, with regard to the safeguards that have beenprovided against the removal of an employee, have any relevanceand applicability to the petitioner Society, whose very existence isunder the APCS Act, 1964 and the Rules made there under.

9. Admittedly, the petitioner was an employee, having workedbetween 1993 and 1995, thus beyond six months. Eventually, hisservices were terminated summarily and unilaterally. In the light ofthe said termination, having initially approached this Court by filinga writ petition, later the first respondent invoked the jurisdiction ofthe Act and filed an application before the third respondent, theAssistant Commissioner of Labour, Kakinada, an authorityappointed under Section 48 of the Act. He has ventilated hisgrievance that his services were terminated without compliancewith the provisions of the Act. In fact, the said authority, throughhis order, dated 24.04.2008, allowed the application and directedthe reinstatement of the first respondent. Later, in the appealpreferred by the petitioner Society, the appellate authority passedorders confirming the reinstatement of the first respondent, butconfining the back wages only for the period commencing from17.04.2007.

10. Assailing the said orders, as has adverted to above, thelearned counsel has placed a heavy reliance on the AndhraPradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) (Amendment)Act, 2004. In this respect, it may be appropriate to refer to thedecision rendered by a learned Single Judge of this Court in A.SUBRAMANYAM NAIDU’s case supra.

In a very elaborate judgment, his Lordships Sri Justice V.Eswaraiah, having taken into consideration the entire statutoryposition as has been obtaining in that regard, eventually held inparagraph 54, which is as follows; “The sum and substance and the effect of the aforesaidjudgments is only to implement the mandatory provisions ofSection 116-C of the Act so as to enable the societies to fixthe staffing pattern, qualifications, pay scales and otherallowances for its employees with prior approval of theRegistrar of Co-operative Societies subject to the conditionthat the expenditure towards the pay and allowances of theemployees shall not exceed 2% of the working capital or 30%of the gross profit in terms of actuals in a year whichever isless. It is mandatory on the part of the respective PrimaryAgricultural Cooperative Societies to fix the staffing pattern,pay and allowances and the expenditure towards the pay andallowances shall not exceed the aforesaid criteria. As long asthe provisions of Section 116-C(1) are not implemented andas long as the said mandatory provision is violated, themembers of managing committee are not only liable for thesurcharge proceedings and also penal action is contemplatedapart from implementing the Minimum Wages Act. As such, itis mandatory on the part of the societies to implement the saidprovisions. Therefore, the Commissioner and Registrar ofCo-operative Societies has issued guidelines and circularsfrom time to time guiding the Primary Agricultural CooperativeSocieties to implement the said provision. Therefore, I do notsee any illegality either in the guidelines or in the circularsissued from time to time. To implement the said mandatoryprovision, the concerned societies have to necessarily takeappropriate action for fixing the staffing pattern, pay andallowances and in that process, it is open for them toretrench/remove the surplus employees who are working

contrary to the provisions of Section 116-C(1) of the Act. Ifany employee is retrenched or terminated contrary to theprovisions of 25-F of the Industrial Disputes Act or 47 of theA.P.Shops and Establishments Act as the case may be, it isopen for them to seek appropriate reliefs provided under thesaid Acts”.

11. The learned counsel for the petitioner has also relied onanother judgment, an unreported one, in S . Krishnanandam v.The Revenue Divisional Officer & Vice Chairperson, theNarsapur Cooperative Urban Bank Limited., Narsapur, WestGodavari District, rendered in W.P.No.499 of 2005. Though thesaid case has factual similarities with the present one underadjudication, it is pertinently observed that there was a propercompliance with the provisions of the Act as it emerges from thejudgment. The employee in the said writ petition was paid onemonth salary in advance in lieu of the statutory notice required tobe issued. The very of the application of the provisions of the Acthas not fallen for consideration in the said judgment. Thus, to thesaid extent, the ratio that has been laid down therein, with greatrespect, is sub-silentio. Accordingly, the ratio laid down in thesaid judgment cannot form the basis as a precedent.

12. Refreshing back to the other judgment in A. SubramanyamNaidu, it may be stated that the discussion in the above paragraphextracted amply indicates that the procedural safeguards that havebeen kept in place under the Act have an absolute application.Evidently, at the time of removal of the first respondent fromservice, no safeguards have been observed in compliance with thesaid provisions. The quasi-judicial authorities under the said enactment have rightly held that the termination was illegal, andconsequentially ordered reinstatement.

13. The learned counsel for the petitioner has submitted withforce that while granting final relief, it is incumbent on theauthorities or for that matter, the Court, to take into account thefinancial viability of the petitioner Society. The learned counsel hasreminded the Court that the very termination has taken place onlyin the light of the precarious financial position of the petitionerSociety. Now, confirmation of the orders of the statutoryauthorities would not be in the financial interest of the Society,which, in any event, substantially holds the public money, albeitthat of the shareholders and members.

This Court cannot help observing that if the order of removalis found to be improper, the natural consequence is to direct thereinstatement of the employee. Though the submissions areseemingly quite convincing, I am afraid, I cannot acceding tothem, especially, in the face of the fact that the statutoryauthorities have consistently held that the termination is illegal andthat the reinstatement should be the proper recompense.

Once the Court, while exercising its powers of judicialreview, is not inclined to interfere with the findings of the quasi-judicial authorities, especially, since those orders have not beensuffering from any error apparent on the face of the record, anyother consideration boarding on sympathy would be antithetical tothe notion of rule of law. As such, I regret my inability to persuade myself to interfere with the concurrent findings of the statutoryauthorities, whose orders do not suffer from any gravejurisdictional errors or perversity of finding.

14. Accordingly, the Writ Petition is dismissed. No order ascosts. The learned counsel for the petitioner, at his juncture, hasbrought to the notice of this Court that at the time of preferring thestatutory appeal and also subsequently, the petitioner Society hasdeposited certain amounts which the first respondent is entitled todraw. Accordingly, any future payment is made, the same shall beafter taking into account the amounts that have already beendeposited by the petitioner.

Miscellaneous petitions, if any, pending in this writ petitionshall stand closed.

30[th ]December, 2013

_______________________

DAMA SESHADRI NAIDU, J

sj

[1]2005(5) ALD 6822005(5) ALD 682