WA/1872/2025 of N.Gnansekar Vs THE MANAGEMENT on 6 October 2026

Judgment

(Judgment of the Court was delivered by Dr.G.Jayachandran J.) Gnanasekar, Cashier in the Shevapet Union Co-operative Bank Limited, Salem District, was placed under suspension on 23.03.1998 for alleged misappropriation of Rs.1,16,317/- and later, domestic enquiry was conducted and he was terminated from service, vide order dated 13.02.1999.

2. Aggrieved by the order of termination, the said Gnanasekar preferred I.D.No.377 of 2000 before the Labour Court, Salem. Both the employee and the Management participated in the enquiry. After examination of the evidence, the Labour Court has held that the charge of misappropriate has not been proved. Hence, the employee must be re-instated in service with 40% of back wages.

3. Aggrieved by the award of the Labour Court, the Management has preferred writ petition No.8757 of 2017. The learned Single Judge, on considering the facts of the case and the nature of the charge alleged against Gnanasekar, modified the award to the effect of reinstatement into service without back wages, but with continuity of service and other terminal benefits

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with interest at the rate of 6% per annum, from the date of superannuation till the date of payment. By that time, Gnanasekar has attained the age of superannuation.

4. Paragraph 8 of the modified order passed by the learned Single Judge reads as below:- “8. In view of the above, the order passed by the Labour Court with regard to reinstatement in favour of the second respondent is confirmed and the back wages awarded by the Labour Court in favour of the second respondent is set aside. However, the second respondent is entitled for continuity of service and other terminal benefits. The terminal benefits shall carry interest at the rate of 6% per annum from the date of superannuation till the date of payment. Hence, the petitioner Management is directed to settle the entire benefits to the second respondent, which he is entitled for, along with interest above, without back wages, within a period of twelve (12) weeks from the date of receipt of a copy of this order.

5. Against the modified order passed by the learned Single Judge, the Management has preferred Writ Appeal No.1020 of 2024. When the appeal filed by the Management came up for consideration, the Division Bench of this Court has discussed at length the order of the learned Single Judge insofar as confirmation of the reinstatement order and modifying the award, taking into account that the employee had attained superannuation, pending writ petition (i.e.) 31.03.2018. Insofar as the backwages is concerned, the Labour Court has quantified them at 40%, but this was set aside by the learned Single Judge.

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6. We find no detailed discussion on this aspect, probably the issue is the subject matter of the present Writ Appeal No.1872 of 2025 preferred by the employee, Gnanasekar. The learned Single Judge, while considering the payment of back wages, carried away by the fact that the charge against the appellant herein was misappropriation of society funds to the tune of Rs.1,16,317/- based on the the statement given by him during the domestic enquiry. Assuming the said statement to be in the nature of confession, despite no proof of misappropriation was produced before the Court, the learned Single Judge has thought fit to hold that the 40% of the back wages awarded by the Labour Court mechanically has to be set aside.

7. We have ascertained from the learned counsels that though serious allegations of misappropriation have been charged against the appellant, the management has not initiated any recovery proceedings, as contemplated under the Tamil Nadu Co-operative Societies Act, 1983. Except the disciplinary proceedings, no attempt was made to substantiate the allegation of misappropriation. Therefore, the Labour Court has rightly found that the charge of misappropriation is not proved. Contrarily, the learned Single Judge, considering the statement of the delinquent during the domestic enquiry without any substantial evidence like, account statements or statements of depositors, denied the back wages in entirety.

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8. In normal course, when the order of suspension or termination is set aside and reinstatement is ordered, unless and until, specific reasons has been assigned, the back wages cannot be deprived or denied.

9. In this case, after balancing the financial condition of the Co-operative Society, the Labour Court has fixed 40% of backwages with 6% interest but the same was reversed by the learned Single Judge, without acceptable reasons. Therefore, we allow the writ appeal filed by the Employee insofar as the denial of 40% of back wages.

10. The learned counsel appearing for the Management submitted that from 23.03.1998 (the date of suspension) till 31.03.2018 (the date of superannuation), the wages come to around Rs.58 lakhs. The learned counsel appearing for the Management also submitted that after the dismissal of the writ appeal, they offered the appellant herein terminal benefits sans back wages along with the full wages from the date of award till the date of superannuation, but the appellant has refused to receive it. However, pursuant to the order passed in the application filed under Section 17B of the Industrial Disputes Act, 1947, Rs.68,202.75 has been paid to the appellant.

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11. Taking into account the above submissions we direct the respondent Management herein to pay the award amount less the amount already paid under Section 17B of the Industrial Disputes Act, 1947, preferably, within a period of four(4) months from the date of receipt of a copy of this order.

12. Accordingly, this Writ Appeal is allowed. No order as to costs. (G.J.,J.) (E.M.,J.) 06-10-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No ari To

1. The Management The Shevapet Urban Co-operative Bank Limited Shevapet, Salem - 636 002.

2. The Presiding Officer Labour Court, Salem.

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DR.G.JAYACHANDRAN, J. AND E.MANOHARAN, J. ari W.A.No.1872 of 2025 06-10-2026

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To

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