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The Secretary, Palani Co-operative Sales Society, Palani and anr. Vs. the Presiding Officer, Labour Court, Madurai and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai High Court
Decided On
Case NumberW.P. Nos. 3247 of 1969 and 663 and 1226 of 1972
Judge
Reported inAIR1975Mad241
ActsCo-operative Societies Act, 1912 - Sections 43
AppellantThe Secretary, Palani Co-operative Sales Society, Palani and anr.
RespondentThe Presiding Officer, Labour Court, Madurai and anr.
Appellant AdvocateP. Chidambaram, Adv. for ;S. Ramalingam, Adv.
Respondent AdvocateA. Ramachandran, Adv. for ;Row and Reddy, ;S. Madhavan and ;S.V. Ramamurthi, Advs.
Cases ReferredStores Ltd. v. Presiding Officer. Labour Court. Madurai.
Excerpt:
.....discretion is given to allow subsistence allowance at rate of one-fourth of substantive pay during period of suspension - as per bye-law 13 (h) suspension cannot be for more than three months at a time - matter remitted to labour court for fresh disposal. - - the contention of the second respondent however is that bye-law 13 (h) will not cover a situation like the one which has arisen in this case as that bye-law can only apply to a case where suspension is imposed as a matter of substantive punishment against a delinquent employee and would not relate to a case where the order of suspension is made during the pendency of a regular enquiry into the misconduct of an employee. 2. the bye-law which is relied upon by both the petitioner as well as the second respondent appears to be one..........or any other punishment. in the instant case, sub-clause (h) extracted above visualises the power of suspension. in our opinion, it is not confined to suspension by way of punishment. it is also applicable to a case of suspension pending an enquiry. discretion is given in the case of such suspension to allow subsistence allowance at a rate of one-fourth of substantive pay during the period of suspension. if no order of sanction has been made, it may appear that during the period of suspension no remuneration will be permissible. but this discretion coupled as it is with a benefit, has to be exercised in every case reasonably and according to law and justice and not whimsically or arbitrarily. it is only for stated reasons that the authority suspending a member pending an enquiry.....
Judgment:

Ramaprasada Rao, J.

1. The petitioner is the Secretary of the Palani Co-operative Sales Society. Dindigul Road. Palani. The second respondent was appointed as one of its salesman. On charges of misconduct, to wit making false entries in the books of account of the Society and distributing to card-holders rations far in excess of those permitted to them, the second respondent was placed under suspension pending disciplinary action. The order of suspension was dated 5-12-1967 and it was to take effect from 6-12-1967. The petitioner's case is that such suspension is possible under its bye-laws. It transpires that later on the enquiry was completed and ultimately the second respondent was dismissed from service. We are not however concerned with the order of dismissal. The second respondent during the pendency of the enquiry filed a claim petition on the file of the first respondent under Section 33-C(2) of the Industrial Disputes Act claiming a sum of Rs. 700 made up of a sum of Rs. 640 towards salary for the period commencing from 6-12-1967 to 26-10-1968 and a sum of Rs. 60 as and towards leave wages. The petitioner's contention was that the second respondent was not entitled to the full pay under bye-law 13 (h) which according to the petitioner would apply to the facts of the case, and therefore, the order of the Labour Court, Madurai. which directed the payment of the salary in full as claimed was vitiated by an error apparent. The contention of the second respondent however is that bye-law 13 (h) will not cover a situation like the one which has arisen in this case as that bye-law can only apply to a case where suspension is imposed as a matter of substantive punishment against a delinquent employee and would not relate to a case where the order of suspension is made during the pendency of a regular enquiry into the misconduct of an employee.

2. The bye-law which is relied upon by both the petitioner as well as the second respondent appears to be one which is generally incorporated in the bye-laws of co-operative societies. Bye-law 13 (h) of the bye-laws of the petitioner-society deals with the punishments which an appropriate authority can inflict on any of its employees. The punishments include censure, withholding of increments, suspension or reduction in rank or dismissal. Bye-law 13 (h) which is reproduced here for ready reference deals with a case of suspension of an employee. It reads as follows--

'The authority competent to suspend an employee may, in its discretion, sanction him subsistence allowance at a rate not exceeding one-fourth of his substantive pay during the period of his suspension. No employee shall in any ease be kept under suspension for a period exceeding three months at a time.'

The argument of the learned counsel for the petitioner is that bye-laws 13 (b) and 13 (h) are mutually exclusive and that bye-law 13 (h) by itself covers all situations, including a case where suspension is awarded during the pendency of an enquiry and where such suspension is awarded as substantive punishment on a delinquent employee. Per contra, it is argued that bye-law 13 (h) is ancillary to bye-law 13 (b) and bye-law 13 (h) has to be understood in the context of bye-law 13 (b) and therefore the said bye-law will not enable an employer to suspend an employee without concurrently making himself responsible for paving his full salary and emoluments during the period of such suspension, if such suspension is occasioned during the pendency of an enquiry.

3. The language of bye-law 13 (h) is peculiar and, in my view, it is not necessary to interpret this bye-law in the context of bye-law 1'3 (b). The text of bye-law 13 (h) contemplates that no employee shall in any case be kept under suspension for a period exceeding three months at a time. This limitation in the exercise of power and more so in the infliction of the punishment cannot be squarely read into bye-law 13 (b) which gives an unlimited discretion to the competent authority to award such punishment as it deems fit and particularly to suspend an employee for any period as decided by it. If, therefore, bye-law 13 (h) and bye-law 13 (b) are to be understood as complementary to each other, then the power of the competent authority under bye-law 13 (b) is conditioned by the prescription under bye-law 13 (h) which I am of the view, is not the intention of either of these bye-laws. Bye-law 13 (h) sneaks of the power of the competent authority to award punishments and the various heads of punishments are detailed therein. In juxtaposition to this, bye-law 13 (h) deals with a situation where an employee is kept under suspension for a period beyond three months. The latter part of bye-law 13 (h) can in the normal circumstances refer only to the factum of suspension during the pendency of an enquiry but not to the order of suspension made by a competent authority against his employee as a substantive punishment awarded after full enquiry.

4. The above position appears to be rather clear. But two conflicting views of our Court have been placed before me in the course of the arguments by the learned counsel. Mr. Chidamba-ram, learned counsel for the petitioner referred to the decision of Alagiriswami J. in W. P. Nos. 2718 and 2719 of 1968 and 2120 of 1969 (Mad) the Madurai Mills Workers Co-operative Stores Ltd, v. Presiding Officer. Labour Court. Madurai. In this case, the question directly arose as to whether bye-law 13 (h). which is being considered by me would apply to a case where the authority was imposing a substantive punishment, or to a case where an order of suspension wag made pending an enquiry into the delinquency of a servant of a co-operative society. The learned Judge expressed the view-

'There was no need to specify any period of suspension as a punishment. The bye-laws do not lay down any maximum period for suspension as punishment. It is true that the bye-law contemplates suspension both as punishment and suspension pending enquiry ............ I do not think there is any difficulty at all in holding that bye-law (h) deals with suspension pending enquiry also.'

After quoting the decision of the Supreme Court in R. P. Kapur v. Union of India. : (1966)IILLJ164SC the learned Judge said:--

'..........., there is no difficulty in holding that the employer has the right to suspend the employee pending enquiry. That power is only subiect to the limitation laid down in bye-law 13 (h). that is the period of suspension should not exceed three months at a time ......... But it may not be possible to complete the enquiry within 3 months and it will be very very difficult to hold that the employer has no right to renew the period of suspension for 3 months at a time. That is the meaning which has got to be given to bye-law 13 (h).'

Palaniswami J. in W. P. No. 3763 of 1969 (Mad) the Madras Dt. Co-operative Supply and Marketing Society Ltd., Madurai y. Veerapoan. a judgment rendered by him on 24-3-1971. had no occasion to refer to the decision of Alagiriswami. J. as obviously it was not placed before him. In those circumstances, interpreting bye-law 13 (h) the learned Judge said--

'............ there is no reference tosuspension pending enquiry. Secondly, the period of suspension is limited to three months. Obviously such a restriction cannot be applied in the case of suspension pending enquiry. For reasons beyond the control of the employer and the employee the enquiry may go on for more than 3 months. If the provision was intended to apply to a case of suspension pending enquiry, the said limit of 3 months time would be out of place. Therefore. I am of the view that Clause (h) of bye-law 13. dealing with suspension does not in power (sic) to suspending pending enquiry, and that clause is applicable only to suspension as a substantive punishment.'

In a later case decided by the learned Judge on 28-4-1971, the decision of Alagiriswami, J. was placed before him. In W. P. Nos. 394 and 2581 of 1970 (Mad). the Kanyakumari Dt. Co-operative Supply and Marketing Society Ltd. v. Sankara-narayana, Palaniswamv, J., dealing with the situation and referring to the judg-ment of Alagiriswami, J. said--

'On behalf of the petitioner reliance was next placed upon the decision of Alagiriswami, J. in W. P. Nos. 2718. 2719 of 1968 and 2l20 of 1969......That case related to the claim for computation of subsistence allowance for the period during which certain employees were kept under suspension. The learned Judge on a construction of the bye-laws, held that the employer was entitled to suspend the employees pending enquiry. In that view, the learned Judge held that the employees were not entitled to subsistence allowance during the period of suspension.'

With great respect, this was not ratio of the decision in W. P. Nos. 2718 and 271'9 of 1968 and 2120 of 1969 (Mad). Madurai Mills Workers Co-operative Stores Ltd. v. Presiding Officer. Labour Court. Madurai. rendered by Alagiriswami, J. As a matter of fact, bye-law 13 (h) was expressly considered by the learned Judge and he came to the conclusion that it was applicable to a case where suspension was awarded during the pendency of an enquiry. Even in the later case, following his earlier view, Palaniswami. J., held bye-law 13 (h) can only apply to a case where suspension was awarded as a substantive punishment.

5. I have already expressed my view in brief. I am in entire agreement with Alagiriswami, J. Bye-laws 13 (b) and 13 (h) are independent and can existand be active in their respective spheres. In any event, bye-law 13 (h) which mentions a period during which an employee could be suspended cannot be consistently held to be a situation which is contemplated under bye-law 13 (h) which does not prescribe any such maximum period which can be awarded by way of substantive punishment by the competent authority. As a matter of fact, bye-law 13 (h) appears to be a deterrent against prolonged enquiries and to avoid as much agony as possible to a charged employee from suffering such charges for a period which is not absolutely necessary.

6. But as the views are conflicting as on date and as I am of the view that the decision in W. P. Nos. 2718 and 2719 of 1968 and 2120 of 1969 (Mad) correctly projects the position. I am asked to refer the matter to a Division Bench so that practical difficulties could be avoided and the Labour Courts be given a correct guidance in the matter of the interpretation of bye-law 13 (h). As such matters are likely to arise very frequently, and as the bye-laws in many of the societies reflect the same situation and text, I am of the view that instead of adding to the practical difficulties which the tribunals may face with, if I were to dispose it of myself, agreeing with one view or the other, the subject has to be set at rest by a fuller Bench.

7. The matter therefore may be placed before my Lord, the Chief Justice for necessary orders.

(Pursuant to the above Order of Reference, these petitions coming on for hearing before the Full Bench, the Court delivered the following Judgment):--

Veeraswami, C.J.

These petitions by the management arise out of an order made by the Labour Court, Madurai, under Section 33-C of the Industrial Disputes Act. 1947. The respondent asked his salary to be computed at Rs. 60 per month. He claimed the salary at that rate for the period of suspension commencing from 6-12-1967 to 26-10-1968 and also leave wages for the period from 22-10-1965 to 26-10-1968. We are not concerned with the second part of the claim The Presiding Officer. Labour Court took the view that under bye-law 13 (h) the management had no power to suspend a worker pending an enquiry. On that view, he allowed the respondent's claim so far as the salary for the period of suspension was concerned. Ramaprasada Rao. J., found that there was conflict of views on the scope and interpretation of bye-law 13 (h) and made a reference of the question to a Division Bench.

8-9. Bye-law 13 deals with disciplinary action against a member of theestablishment. It is contemplated by the bye-law that a sub-committee shall be elected by the Board of Directors and such sub-committee shall exercise the powers specified against it in the succeeding sub-clause of the bye-law. We are concerned with Clause (h). which is:--

'The authority competent to suspend an employee may, in its discretion, sanction him subsistence allowance at a rate not exceeding one-fourth of his substantive pay during the period of his suspension. No employee shall in any case be kept under suspension for a period exceeding three months at a time.'

Generally speaking, where the power of appointment is vested in an authority, it has the power of disciplinary action as well which again necessarily involves the power to keep a particular member of the establishment under suspension in a suitable case pending an enquiry. No conferment of a separate power to that effect is necessary. Apart from the power of appointment, the power can be implied in the disciplinary power to inflict punishment by way of removal or dismissal or any other punishment. In the instant case, Sub-clause (h) extracted above visualises the power of suspension. In our opinion, it is not confined to suspension by way of punishment. It is also applicable to a case of suspension pending an enquiry. Discretion is given in the case of such suspension to allow subsistence allowance at a rate of one-fourth of substantive pay during the period of suspension. If no order of sanction has been made, it may appear that during the period of suspension no remuneration will be permissible. But this discretion coupled as it is with a benefit, has to be exercised in every case reasonably and according to law and justice and not whimsically or arbitrarily. It is only for stated reasons that the authority suspending a member pending an enquiry can deny subsistence allowance to him. We construe the provision in that way more especially because of the last sentence in the sub-clause which has restricted the power of suspension to a period not exceeding three months at a time. This means that the enquiry has to be expedited and the suspension cannot be for more than three months at a time. The last words 'at a time' signify or indicate that the power can be exercised in suitable cases for extending the period of suspension beyond three months, every time restricting it only to three months.

10. Since the Presiding Officer, Labour Court, has taken the view that the power of suspension is available only by way of punishment and on that basis he awarded full salary for the period of suspension, we quash that part of theaward. The matters involved in the three writ petitions will stand remitted to the Presiding Officer, Labour Court. Madurai. for fresh disposal, in the light of the observations made above and in accordance with law. The presiding Officer will give the management a fresh opportunity to show whether it has exercised its discretion contemplated by bye-law 13 (h) and further whether it passed orders of suspension each time for a period not exceeding three months in the light of which the Presiding Officer will decide. The Presiding Officer will also take into account the subsequent dismissal of the employee concerned on the question whether in view of it his claim would be tenable and if so, to what extent No costs.


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