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S. Viswanathan and ors. Vs. the Deputy Registrar of Co-operative Societies, Credit and ors. - Court Judgment

LegalCrystal Citation
SubjectService
CourtChennai High Court
Decided On
Reported in(1984)1MLJ92
AppellantS. Viswanathan and ors.
RespondentThe Deputy Registrar of Co-operative Societies, Credit and ors.
Excerpt:
- .....in the name of consumer promotion efforts, there was lot of confusion in the working of the society's branches. it was found that credit facilities are given to non-members and also other institutions which are not permitted under the by-laws. as a result of the credit having been extended to non-members who could not be identified the society incurred losses. the petitioners who had exercised uncontrolled arbitrary power in making such transactions and also in making purchases beyond their financial capabilities, were asked to explain which they could not satisfactorily do. in the meanwhile the audit reports for the years 1977-78 to 1980-81 pointed out the irregularities committed by the employees like the petitioners. in those circumstances the board of management of the society.....
Judgment:
ORDER

G. Ramanujam, J.

1. The petitioners herein seek the issue of a writ of certiorari from this Court to quash the order of the first respondent herein dated 18th July, 1983, so far as the petitioners are concerned.

2. The petitioners who are 12 in number challenge the validity of the said impugned order in the following circumstances : The petitioners are the confirmed employees of the Simpson and Group Companies Employees Co-operative Society Ltd. The said Society is a Co-operative Society formed with the declared object of encouraging thrift and self-help and co-operation among members and of promoting social, intellectual, normal and physical welfare of the members. When it started, functioning in December, 1951, its operation was confined to the City of Madras and it was called 'Employees Cooperative Credit Society'. Subsequently, in or about 1960 the area of operation was extended to all places where the Simpson and Group companies are working. Thus the Society extended its operation to those areas in which the Simpson Group of companies are established. Though originally the Society was started as a credit society, the activities of the same were enlarged to be a multi-purpose one. The executive management of the affairs of the Society vested in the Board of Directors and they appointed the members of the establishment, and laid down the conditions of service of the employees, Under the by laws of the Society certain books of account have to be maintained giving full details regarding the expenditure of the Society. The by-laws provided for the employees giving sufficient security for performance of their duties. The petitioners were appointed having regard to the exigencies of business at various branches. However since the branches were not maintaining proper accounts and they were indulging in various types of transactions in the name of consumer promotion efforts, there was lot of confusion in the working of the Society's branches. It was found that credit facilities are given to non-members and also other institutions Which are not permitted under the by-laws. As a result of the credit having been extended to non-members who could not be identified the Society incurred losses. The petitioners who had exercised uncontrolled arbitrary power in making such transactions and also in making purchases beyond their financial capabilities, were asked to explain which they could not satisfactorily do. In the meanwhile the audit reports for the years 1977-78 to 1980-81 pointed out the irregularities committed by the employees like the petitioners. In those circumstances the Board of Management of the society having no other alternative decided on 29th November, 1981, to close down the branches .Later, the Board also by a resolution decided to recover the value of the stock deficit from the staff of the various branches on , the principle of collective responsibility. Subsequently certain private books of account were seized from some of the employees which revealed that the employees were using private bill books instead of using official bill books of the society. The General Body on 22nd May, 1983 decided to take steps to collect the value of the stock deficits from the employees who were responsible for such deficits. In view of the said resolution some of the employees of the branches retired voluntarily as proposed by the General Body. The voluntary retirement scheme stipulated by the General Body required the employees to pay the value of the stock deficit to the extent of their liability and authorised the disbursing authorities to deduct the same from and out of the retirement benefits payable to the employee concerned. The employees thought it honourable to amicably fettle the dispute which in fact is of a serious magnitude and which would otherwise involve them in criminal prosecutions for various offences including fraud, forgery, misappropriation, criminal breach of trust, falsification of accounts etc. It is in those circumstances the employees tendered their letters offering to retire under the voluntary retirement scheme to the fourth respondent, to forward the same to the third respondent-Society. However, having regard to the fact that the accounts of the various branches have to be looked into for the purpose of recovery of the amounts from the non-members and also ascertain the exact liability of each of the members of the staff in the various branches, at the request of the fourth respondent union, by an agreement dated 21st October, 1982 that 15 of the employees may be retained as fresh employees till 31st December, 1982 to help the Society to arrive at the actual deficit due by the employees, 15 employees were retained. However, finding that the 15 employees who had been retained in terms of the agreement, dated 21st October, 1982 did not complete the work, their services were directed to be terminated with immediate effect after giving due notice to them failing which surcharge proceedings will be initiated against the Board of Management for the loss sustained by the society for retaining the employees beyond 31st December, 1982. It is that order which is challenged by the 12 employees in this writ petition who are petitioners herein.

3. According to the petitioners the impugned order has been passed in collusion between the Co-operative Department and the Board of management of the Society and that the first respondent herein had no jurisdiction to pass the impugned order calling upon the management of the Society to terminate the services of the employees.

4. In the counter-affidavit filed by the third respondent it has been stated that the petitioners have no justification for invoking the extra-ordinary jurisdiction of this Court, that even if the impugned order is given effect to by the Society they have got the remedies under the Industrial Disputes Act, that they have also another remedy open to them under Section 73 of the Co-operative Societies Act to raise a dispute before the concerned authorities any that since all the branches have been closed, it is not possible for the Society to employ the petitioners without incurring any financial loss. It is further stated by the third respondent that the impugned order cannot in any sense be treated as an order terminating the services of the petitioners and that in the event of the services of the petitioners being terminated by the Society they have got other remedies open. In those circumstances the third respondent submitted that the writ petition should be dismissed as not maintainable.

5. One of the main objections taken in the writ petition was that first respondent has no jurisdiction to pass the impugned order. Respondents 1 and 2 have filed a separate counter-affidavit wherein they have explained the circumstances under which the impugned direction was given to the Society. It has been stated therein that the agreement, dated 22nd October, 1982 is a settlement under Section 18(1) of the Industrial Disputes Act and therefore the said agreement is binding on the petitioners as well as the other employees. The impugned order was passed by the first respondent in consequence of a surprise visit made by him to the Society on 23rd June, 1983 during which it was found that there was heavy arrears in the maintenance and writing up of the accounts of the Society. For instance the cash book was not written for four months and corresponding general ledger postings were also not made for a period of four months; the D. C. B. statements were not prepared by the staff even though six employees were exclusively attending to this item of work. All these evidently showed that the additional staff who were retained for a specific period and for doing a specific work were getting their salary without turning out any work. As per the terms of the agreement, dated 22nd October, 1982 the 15 employees had not completed the work entrusted to them before 31st December, 1982 and it was in those circumstances the impugned direction was issued to the Board of Directors to terminate the services of the petitioners after giving due notice in order to see that the Society does not incur any further loss by payment of salary to the staff who are not doing the work allotted to them. According to respondents 1 and 2 the services of the 15 employees were only temporary and their retention was purely for a temporary period and they are liable for termination on the expiry of the said period. It has been further pointed out that the first respondent is exercising the functions of the Registrar and therefore he is entitled to pass the impugned order. Therefore the two questions that arise in this writ petition are : (1) Whether the writ petition is maintainable and (2) whether the first respondent is entitled to pass the impugned order.

6. So far as the second question is concerned, it is seen that the first respondent has been invested with the powers of the Registrar and therefore he has jurisdiction to pass the impugned order. If really the powers of the Registrar have been delegated to the first respondent herein then the first respondent can exercise the functions of the Registrar under the Co-operative Societies Act. That the Registrar has got the power to issue such directions as are necessary for the proper administration of the Society under the provisions of the said Act has not been disputed Therefore the first respondent in this case should be taken to have jurisdiction to pass the impugned order. The petitioners' attack based on lack of jurisdiction has therefore to be rejected.

7. Coming to the first question as to whether the petitioners are entitled to maintain the writ petition, the learned Counsel for the petitioners does not dispute the fact that as and when the services of the petitioners are terminated as directed in the impugned memo, they have got the remedy under the Industrial Disputes Act to have the matter referred to the Labour Court or the Industrial Tribunal questioning the termination of services of the petitioners as employees can raise a dispute under Section 73 of the Co-operative Societies Act before the Registrar. In view of the existence of these effective alternative remedies the petitioners cannot invoke the extraordinary jurisdiction of this Court. Further, the petitioners have not suffered any injury by the mere issue of the order by the first respondent. It is only when the order of the first respondent is given effect to and the petitioners' services are terminated they will have a cause of action and as on date they cannot have any cause of action as against the Registrar. The impugned order cannot be taken to have affected the petitioners prejudicially and it is only against the order which the Society would be making in pursuance of the impugned order, the petitioners can claim to have any grievance Therefore as on the date the petitioners cannot have any grievance at all. The petition is therefore dismissed. There will however, be no order as to costs.

8. The petitioners will, however, have the liberty to challenge any order that may be passed by the Society terminating their services in appropriate forum.


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