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Nilkanth Sitaram Patil Vs. the Dhule Taluka Doodh Utpadak Krishi Purak Udyog Sahakari Sangh Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberW.P. No. 1683 of 1979
Judge
Reported in(1994)IIILLJ23Bom
ActsMaharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971
AppellantNilkanth Sitaram Patil
RespondentThe Dhule Taluka Doodh Utpadak Krishi Purak Udyog Sahakari Sangh Ltd. and anr.
Appellant AdvocateP.D. Kamrekar, Adv.
Respondent AdvocateS.M. Dikshit and ;C.D. More, Advs.
DispositionPetition partly allowed
Excerpt:
.....mala fide because petitioner refused to alter his report in respect of unaccounted cement - transferor society not competent to unilaterally and compulsorily transfer its employees to transferee society - order of transfer liable to be quashed - respondent directed to pay to legal representative of deceased petitioner all emoluments with increments which were payable to deceased petitioner. - - 7. thereafter on 17th june, 1976, the manager of the first respondent addressed a letter to the petitioner making a grievance about petitioner's failure to submit his report in respect of the unaccounted cement and called upon him to do so within three days. but the first respondent altered this list and instead of sending the willing employees, transferred some inconvenient employees,..........to shirpur taluka dudh utpadak krishi purak udyog sahakari sangh ltd. (hereinafter called 'shirpur taluka sangh).2. the petitioner was appointed as a clerk in the office of the first respondent, a cooperative society, registered under the provisions of the maharashtra co-operative societies act, 1960, and engaged in the business of milk collection from its member societies and supplying it to the maharashtra government. by a resolution dated 10th june 1977, the name of dhule zilla doodh utpadak krishi purak udyog sahakari sangh ltd., first respondent herein, was changed to that of the dhule taluka doodh utpadak krishi purak udyog sahakari sangh limited.3. in or about 1967, deceased nilkanth (hereinafter called 'the petitioner') was sent on deputation to shirpur taluka sangh to work as.....
Judgment:

M.S. Jamdar, J.

1. The petitioner, who died after filing this petition sought to challenge the order passed by the Member, Industrial Court, Bombay, rejecting his complaint under Section 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred as 'the Act') that respondent No. 1 committed unfair labour practice within the meaning of item 3 of Schedule IV to the Act by unilaterally transferring his services to Shirpur Taluka Dudh Utpadak Krishi Purak Udyog Sahakari Sangh Ltd. (hereinafter called 'Shirpur Taluka Sangh).

2. The petitioner was appointed as a clerk in the office of the first respondent, a cooperative society, registered under the provisions of the Maharashtra Co-operative Societies Act, 1960, and engaged in the business of milk collection from its member societies and supplying it to the Maharashtra Government. By a Resolution dated 10th June 1977, the name of Dhule Zilla Doodh Utpadak Krishi Purak Udyog Sahakari Sangh Ltd., first respondent herein, was changed to that of the Dhule Taluka Doodh Utpadak Krishi Purak Udyog Sahakari Sangh Limited.

3. In or about 1967, deceased Nilkanth (hereinafter called 'the petitioner') was sent on deputation to Shirpur Taluka Sangh to work as Manager. He worked there in that capacity for 2 1/2 years, but as the posting was inconvenient to him, he requested the Chairman of the first respondent to terminate his deputation and to post him at Dhule. The Chairman of the first respondent acceded to his request and by his letter bearing No. A(N) P.232, dated 5th September 1969, asked the Chairman of Shirpur Taluka Sangh to relieve the petitioner stating that :-

'It is not felt proper to require him (petitioner) to continue to work in that place itself taking into consideration his personal difficulty'.

Accordingly, the petitioner was relieved from Shirpur Taluka Sangh and was absorbed back in the service of the first respondent with effect from 1st December, 1970. 5

4. In the year 1971, the petitioner was promoted as senior clerk. He was appointed as Accountant on 6th June 1973. In the year 1975, the employees of the first respondent formed a trade union entitled Dhule Zilla Shramik Sangh. The petitioner was selected as Vice-President of the said Union.

5. In the year 1975, the petitioner was asked to enquire into some discrepancies discovered in the cement quota received by the first respondent for some construction work undertaken in the year 1972. The investigation made by the petitioner revealed that in June 1974, 130 tonnes of cement delivered to the first respondent by three suppliers were not accounted for in the records of the first respondent. Accordingly, the petitioner submitted his report to the Chairman of the first respondent on 28th Oct. 1975. The Chairman read the report and gave it back to the petitioner. Thereafter on 12th Dec. 1975, the petitioner was posted as head of the Accounts Department.

6. Some time in 1976, the Government Chilling Centre at Shirpur was transferred to Shirpur Taluka Sangh and consequently Shirpur Taluka Sangh ceased to have any connection with the first respondent. Thereafter a scheme for transfer of some of the assets and liabilities of the first respondent Sangh to Shirpur Taluka Sangh was formulated under Section 17(1)(b) of the Maharashtra Co-operative Societies Act, 1960 read with Rule 16 of the Maharashtra Cooperative Societies Rules. This scheme was approved by the General Body of the first respondent in its meeting held on 18th April, 1976. It was also approved by the District Deputy Registrar, Dhule, vide his letter, dated 30th June 1976. Thereafter by a resolution, dated 12th June 1976, the General Body of the first respondent resolved to transfer along with assets and liabilities some employees to Shirpur Taluka Sangh. This was followed by a resolution passed by the Managing Committee of the first respondent in a meeting held on 13th June 1976 resolving to transfer to Shirpur Taluka Sangh such number of employees whose total salary bill amounted to 9% of the entire salary paid by the first respondent to all its employees.

7. Thereafter on 17th June, 1976, the Manager of the first respondent addressed a letter to the petitioner making a grievance about petitioner's failure to submit his report in respect of the unaccounted cement and called upon him to do so within three days. The petitioner replied to the letter on the same day and pointed out to the Manager that the petitioner had submitted his report on 20th Oct. 1975 itself, that the Manager had seen the report and had himself asked the petitioner to retain the report with him. He also handed over the report along with his reply. On the very day the impugned order transferring the petitioner to Shirpur Taluka Sangh was passed.

9.4.1985

8. By this order the petitioner was in- formed that in view of transfer of assets and liabilities of the first respondent to Shirpur Taluka Sangh, under Section 17(1)(b) read with Rule 16 of the Maharashtra Cooperative Societies Rules, as approved by the General Body Meeting vide Resolution No. 2(7) and the District Deputy Registrar, C.S. Dhule vide his letter No. VI-KAS/3/A.L.S.H. Shirpur D.S. 76, dated 30th June 1976, he is allotted to Shirpur Taluka Sangh with effect from 20.7.76 on the present grade with all admissible allowances, and was directed to join his new assignment with immediate effect.

9. On receipt of the order, the petitioner by his letter, dated 19th July 1976 requested the Chairman of the first respondent to cancel his transfer to Shirpur Taluka Sangh as it would cause hardship to him. He also requested the Chairman to send in his place some other employee who was prepared to go on transfer to Shirpur Taluka Sangh. He also repeated his request by his letter, dated 20th July, 1976, 5th August 1976 and 7th August 1976. He also asserted in those letters that he was not liable to be transferred to Shirpur Taluka Sangh, that it amounted to termination of his 15 years, long service with the first respondent and that it was not supported by any regulation of the first respondent. He was, however, informed by letter, dated 30th August 1976 that his action in not joining at Shirpur Taluka Sangh as per the transfer order amounted to misconduct and wilful disobedience of the order within the meaning of Regulation 21(1) of the Regulations framed by the first respondent, governing service conditions of the employees. The petitioner asserted that as the transfer order was illegal, he did not comply with it and this action of his did not amount to misconduct. He also sent approach notice, dated 1st December 1976 calling upon the first respondent to withdraw the transfer order and to permit him to resume duties in the office of the first respondent. As the first respondent did not respond to this approach notice, the petitioner filed a complaint under Section 28 of the Act complaining that the management of the first respondent committed unfair labour practice within the meanings of item No. 3 of Schedule IV of the Act. He, inter alia, contended that he was transferred mala fide under the guise of following management policy. According to him the reason given for his transfer viz. that the 3 transfer was consequent upon the transfer of some of the assets and liabilities of the first respondent to Shirpur Taluka Sangh is not correct. In fact, according to him, Shirpur Taluka Sangh was in existence all along and was supplying milk to the Government Milk Scheme through the first respondent Sangh after purchasing some shares of the first respondent and as this business was stopped, in view of purchase of the Govt. chilling plant at Shirpur by the Shirpur Taluka Sangh, the latter withdrew its share amount and thereafter a scheme for consequent transfer of some assets and liabilities was formulated and a list of employees, who were willing to be transferred to Shirpur Taluka Sangh, was prepared. But the first respondent altered this list and instead of sending the willing employees, transferred some inconvenient employees, like the petitioner, without their consent. According to him as per the directions of the respondent Sangh vide its letter, dated 7th July 1976, he examined the accounts pertaining to the receipt of cement by the respondent Sangh from three cement companies and submitted on 28th Oct. 1975 his report, expressing his opinion that about 130 tonnes of cement appeared to have been misappropriated and requested the Chairman of the first respondent to enquire into the matter. It was, however, suggested to him by the persons incharge of the management of the first respondent that he should modify his report and regularise the accounts, but he refused to oblige and asserted that unless a detailed inquiry was held into the malpractices committed in the transaction, nothing could be done in the matter. It is for this refusal of his to oblige the management as also because of his reluctance to incorporate in the accounts some doubtful petrol and travelling bills of the office bearers of the first respondent that he was victimised and vindictively transferred from accounts section to checking section and finally to Shirpur Taluka Sangh.

10. The first respondent denied that the transfer of the petitioner amounted to unfair labour practice, and raised several technical contentions viz. that the complaint was bad for non-joinder of parties and/or of mis-joinder of parties; that it was barred by limitation; that the complaint was barred under Section 59 of the Act as the petitioner had already filed another complaint in respect of the similar subject-matter in the Labour Court at Nasik; that the petitioner was not an employee within the meaning of the Act; and that the subject-matter of the complaint was a dispute within the meaning of Section 91 of the Maharashtra Cooperative Societies Act and as such the Industrial Court was not competent to entertain the said complaint. These technical contentions, however, need not detain us any longer because all these objections were overruled by learned Industrial Court and these objections were rightly not canvassed before me by learned Counsel appearing for the first respondent Sangh. The learned Member of the Industrial Court, held that the transfer of the petitioner was effected s consequent upon separation of Shirpur Taluka Sangh and transfer of assets and liabilities of the first respondent to Shirpur Taluka Sangh. He further held that as the transfer was effected long after the petitioner submitted his report in respect of the missing cement, it is very difficult to come to a conclusion that the transfer was effected because of the said report. For want of corroborating documentary evidence, the learned Member of the Industrial Court rejected the contention of the petitioner that one of the reason for his transfer was his reluctance to make entries in the account books in respect of the doubtful petrol and travelling bills of the office-bearers of the first respondent Sangh. Consequently, he held that the transfer of the petitioner did not amount to unfair labour practice within the meaning of item 3 of Schedule IV of the Act. He, therefore, dismissed the complaint and it is this order of dismissal which is sought to be challenged by the petitioner.

11. It is an admitted position that the petitioner was employee or the first respondent. He was never an employee of Shirpur Taluka Sangh which was in existence as separate legal entity long before the scheme of transfer of assets and liabilities of the first respondent Sangh to Shirpur Taluka Sangh was implemented. Even during the period of 2 1/2 years in which the petitioner served as Manager of Shirpur Taluka Sangh, he was on deputation to the said Shirpur Taluka Sangh from the first respondent and since this post caused personal difficulties to him, this deputation was terminated and he was absorbed in the services of the first respondent long before the impugned transfer order was passed.

12. It appears that the Shirpur Taluka Sangh had purchased some shares of the first respondent and was supplying milk to the Government Milk Scheme through the first respondent, as mentioned above. Thereafter Shirpur Taluka Sangh was allowed to purchase a chilling plant at Shirpur whereafter Shirpur Taluka Sangh undertook to supply milk to the Government Milk Dairy directly. Thus, the business of supplying milk to the Government Milk Scheme carried on by Shirpur Taluka Sangh through the first respondent came to an end and consequently a scheme was formulated by the first respondent Sangh for the transfer of some of its assets and liabilities to the Shirpur Taluka Sangh. It appears similar other schemes transferring some assets and liabilities to other Taluka Sanghs were also formulated, thus, reducing the area of operation of Dhule Zilla Sangh to Dhule Taluka only and consequently the name of the first respondent was altered by deleting word 'Zilla' and substituting it by word 'Taluka'. These schemes were admittedly formulated by the respondent Sangh and approved by the District Deputy Registrar of Societies, Dhule, under Section 17(1) of the Maharashtra Co-operative Societies Act. It is the case of the first respondent that in pursuance to those schemes and in view of the transfer of some of the assets and liabilities of the first respondent to Shirpur Taluka Sangh and consequent reduction in business and area of operation of the first respondent it became necessary to transfer some of its employees to Shirpur Taluka Sangh and accordingly, the General Body and the Managing Committee of the first respondent Sangh resolved to transfer a particular percentage of its employees to Shirpur Taluka Sangh and it is in bona fide implementation of this management policy that the petitioner was transferred to Shirpur Taluka Sangh as he had already worked at that place. The learned Member of the Industrial Court accepted this case, but in my view, wrongly for two reasons. Firstly, by transferring its assets and liabilities to Shirpur Taluka Sangh under Clause (b) of Sub-section (1) of Section 17 of the Maharashtra Co-operative Societies Act, the first respondent Sangh had no power to unilaterally transfer the services of its employees to Shirpur Taluka Sangh along with transfer of some assets and liabilities. Secondly, there is enough material on record to show that the transfer was effected mala fide because the petitioner refused to alter his report in respect of the unaccounted cement.

13. Section 17(1) of the Co-operative Societies Act, empowers a society, with the previous approval of the Registrar and by resolution passed by two-third majority of the members present and voting at a special general meeting held for the purpose (a) to amalgamate with another society; (b) to transfer its assets and liabilities in whole or in part to any other society; (c) to divide itself into two or more societies; or (d) to convert itself into another class of society. The proviso to Sub-section (1) of Section 17 further lays down that where such amalgamation, transfer, division or conversion, involves a transfer of the liabilities of a society to any other society, no order on the resolution shall be passed by the Registrar unless he is satisfied that :-

'(i) the society, after passing such resolution, has given notice thereof in such manner as may be prescribed to all its members, creditors and other persons, whose interests are likely to be affected (hereinafter in this section referred to as 'other interested persons'), giving them the option, to be exercised within one month from the date of such notice, of becoming members of any of the new societies, or continuing their membership in the amalgamated or converted society, or demanding payment of their share or interest or dues, as the case may be;

(ii) all the members and creditors and other interested persons, have assented to the decision or deemed to have assented thereto by virtue of any member or creditor or any other interested person failing to exercise his option within the period specified in Clause (i) aforesaid; and

(iii) all claims of members and creditors and other interested persons, who exercise the option within the period specified have been met in full or otherwise satisfied'.

Hence, if the scheme transferring the assets and liabilities to another society involves transfer of employees of one society to another, the Registrar would not be competent to grant such scheme unless the assent of the employees to be transferred is obtained. The fact that the General Body and the Managing Committee of the Society passed a Resolution transferring particular percentage of employees along with the assets and liabilities to be transferred, would not empower the society to transfer unwilling employees to another society. Moreover the transfer of the assets and liabilities of one society to another does not necessarily involve the transfer of employees from one society to another. The transfer, therefore, cannot be said to be incidental to the transfer of some assets and liabilities, the business of the society shrinks, necessity reduction in the number of employees, it would be open to the society, after following relevant provisions governing service conditions of the employees to terminate their services if they are unwilling to be transferred to the society in whose favour the assets and liabilities are to be transferred. But the management of the transferor society would not be competent under Section 17(1) of the Co-operative Societies Act to unilaterally transfer its employees to the, society in whose favour only some of its assets and liabilities are transferred. The sanction to the scheme under which only some of the assets and liabilities of one society are transferred to another under Section 17(1)(b) of the Maharashtra Co-operative Societies Act, read with Rule 16 of the Maharashtra Co-operative Societies Rules, does not affect the employees and it does not empower the society to unilaterally transfer its employees when the transferor society continues to exist as a legal entity as before. The position may be different in a scheme of amalgamation of two societies or division of one society or transfer of the entire undertaking from one society to another as running concern. But when merely some assets and liabilities are transferred by one society to another under Section 17(1)(b) of the Maharashtra Co-operative Societies Act, the transferor society would not be competent to unilaterally and compulsorily transfer its employees to the transferee society. The action of the first respondent in transferring the petitioner to Shirpur Taluka Sangh, without his consent, was therefore illegal and cannot be said to be in pursuance of any valid policy which the management was competent to formulate under the provisions of the said Act.

14. Mala fides are also writ large on the impugned order of transfer. As mentioned above, the petitioner who was then working as accountant in the office of the first respondent was directed to enquire into and make report in respect of the unaccounted cement received by the first respondent from three different suppliers for some construction work undertaken by the first respondent in the year 1972. Accordingly, the petitioner along with the engineer of the first respondent Sangh visited the offices of the three different suppliers one of which was Associated Cement Company and found that 130 tonnes of cement received by the first respondent in June 1974 were not accounted for in the records of the first respondent. Accordingly, the petitioner made his report on 28th October 1975. This report was obviously inconvenient to the Chairman of the first respondent because the unaccounted cement was received by the Assistant Manager of the first respondent who was nephew of the Chairman. From the report, which is at Ex.U-8, it is clear that the enquiry made by the petitioner with the Associated Cement Company revealed that there was difference of Rs. 11852 in the accounts of the first respondent and the records of the said company showed that the cement worth that amount was supplied by the company to the first respondent. It is also asserted in the report that the permit given by the Government to the first respondent appeared to have been misused.

15. The petitioner specifically averred in the complaint that he had submitted the report to the Chairman of the first respondent on 28.10.1975, but he was directed to keep the report with him. The petitioner specifically asserted in his evidence that the Chairman instead of making necessary inquiry into the report handed it back to him and asked him to keep it with him. Apart from the fact that there is no cross-examination of the petitioner on this point, the Assistant Manager, who deposed on behalf of the first respondent, specifically stated in his examination-in-chief itself that the petitioner submitted his report on 28.10.1975 to the Chairman stating that 130 tonnes of cement was not accounted for. Admittedly, no action was taken on the basis of the report and the Chairman after perusing the report asked the petitioner to keep it with him. It is on this background that the allegation of mala fides in respect of the action taken on 17th July 1976 is to be examined.

16. True it is that the management had decided to transfer some of its employees to Shirpur Taluka Sangh. It also appears that the list of such employees was finalised in consultation with the Chairman of the Shirpur Taluka Sangh. This list, which was finalised by the two Chairmen, is not produced to show that even before 17.7.1976 and in pursuance to the management policy, petitioner's name was included in the list of persons to be transferred from the first respondent to Shirpur Sangh.

17. On 17.7.1976 the manager of the 1st respondent addressed a letter to the petitioner (English translation of which is appended as Ex.A to the petition). As this letter makes interesting reading on the abovementioned background, I would like to quote it:-

'You had been sent on 10.10.1975 by the Sangh to the Associated Cement Co. for accounts of cement. Accordingly you had gone to Bombay and returned. But you have not submitted report of your investigation in the Company. You are called upon to say within three days why you have not done so. You should also submit your report to the office. In this respect several times oral instructions have been given. However, there was no response.'

18. This letter obviously contains a false accusation that the petitioner had not submitted his report. Admittedly, the petitioner submitted his report to the Chairman on 28.10.1975 and though the said report was perused by the Chairman, it was at the instance of the Chairman and as per his direction that the petitioner kept the report with him. As a matter of fact, the action and conduct of the Chairman in not acting on the report and instead directing the petitioner to keep the report with him itself speaks volumes about the inconvenience caused to the Chairman and other office bearers of the first respondent by the said report, which as mentioned above, specifically contained an assertion that the permit given by the Govt. to the first respondent appeared to have been misused. Moreover, not only the said letter contained a false accusation, but it sought to call for explanation from the petitioner about his failure to submit his report. The height of audacity is the allegation that the petitioner failed to submit his report in spite of several instructions. It is clear that this letter was just a pretext to call the petitioner a mad dog and to shoot him. Admittedly the petitioner gave reply on the same day, producing the report along with his reply and asserting therein that he had already submitted his report on 28.10.1975 and that it was kept by him with him at the instance of the Chairman. This position is not disputed. There is nothing on record to show that the assertions made by the petitioner in his reply that he had submitted his report to the Chairman on 28.10.1975 was ever controverted. Not only that, but as mentioned above, the Asst. Manager, who deposed on behalf of the respondent has specifically admitted this position. It is pertinent to note that as soon as the petitioner gave his reply and submitted the report, the transfer order was passed on the very day.

19. The petitioner has specifically asserted in his evidence that after he submitted his report, he was several times persuaded to change it and make necessary adjustments in the accounts to regularise the transaction about the cement, but he turned down these requests and taking advantage of the fact that some employees were transferred from the first respondent to Shirpur Taluka Sangh, he was punished by transferring him against his wish and illegally. In para 7 of the petition he has narrated the circumstances in which he was asked to make inquiry about the missing cement and as to what the inquiry revealed and his report contained. In para 8 he goes on to state as follows:-

'Thereafter the Manager started pressurising the petitioner to change his report. This went on for nearly six months. The Manager by his letter, dated 17th July 1976 pretended that the petitioner's report had not been received and called upon him to submit his report'.

In para 9 he asserts as follows:-

'The petitioner did not oblige the management by submitting a fresh report. Instead on 17th July 1976, he submitted a copy of his earlier report recording by a covering letter, dt. 17.7.1976 that he had submitted the original in the ordinary course. It then became clear to the management that the petitioner was not likely to oblige it by altering his report'.

In para 10 he has further asserted:

'Immediately upon receipt of the petitioner's said reply an order was made by the Manager transferring the petitioner's services to the Shirpur Taluka Doodh Utpadak Krishi Purak Udyog Sahakari Sangh Ltd.'

The respondent No. 1 Sangh has not filed a return in reply and hence all these submissions will have to be accepted as correct. Moreover, all these assertions are clearly established by oral and documentary evidence led before the Industrial Court. It is, therefore, crystal clear that the transfer order was passed by the first respondent mala fide in order to punish the petitioner for not obliging the management by changing his report which was obviously inconvenient to the person incharge of the management of the first respondent at the relevant time. Rightly, the petitioner did not comply with the order and his insistence that he continued to be employee of the respondent No. 1 and must be allowed to work in that office, was perfectly right. It is an admitted position that the first respondent did not allow the petitioner to work in its office at Dhule.

20. This brings me to the question of relief to be granted in this case. There is no question of directing the first respondent to allow the petitioner to rejoin his duties because the petitioner has already died. Nevertheless, it is declared that the petitioner all along was entitled to work in the office of the first respondent and hence he was entitled to get all his emoluments from the date of his transfer till the date of his death.

21. The petition is, therefore, partly allowed. The impugned order of transfer is quashed and the respondent Sangh is directed to pay to the legal representative of the petitioner viz. Neelabai, wife of the petitioner, all the emoluments with increments, if any, which were due and payable to the deceased petitioner from 17.7.76 till 18.7.1983, the date on which he died, along with other dues such as gratuity, etc. on the footing that the petitioner continued to be in employment of the first respondent till his death. Rule is made absolute accordingly. The respondent No. 1 is directed to pay costs of this petition to Neelabai, wife of deceased petitioner.


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