Labour Court And Registrar Of Cooperative Societies Have Concurrent Jurisdiction For Disputes Relating To Disciplinary Action: Delhi High Court

Recently, a Single Bench of the Delhi High Court comprising of Justice Tara Vitasta Ganju heard a petition impugning the award passed by the learned Additional District and Sessions Judge. By the Impugned Award, the complaint filed by the Petitioner on the applicability of the provisions of the Industrial Disputes Act, 1947, was dismissed by the Labour Court, in view of the specific bar as placed by the provisions of Section 70(1)(b) of the Delhi Cooperative Societies Act, 2003 [“DCS Act”].

Background facts

The Petitioner was a Clerk-cum-Cashier with the Respondent, Jain Cooperative Bank. The Petitioner was removed from the services of the Respondent. after which he raised an industrial dispute alleging that his services have been terminated illegally and filed a Petition before the Industrial Tribunal. The Petitioner submitted that he was removed from the services pursuant to a disciplinary action, initiated by the Respondent. By the Impugned Award, the learned Labour Court found that the action of the Respondent of terminating the services of the Petitioner comes within purview of Section 70(1)(b) of the DCS Act and that only the Registrar of Cooperative Societies Act is competent to decide such a dispute, dismissing the claim petition filed by the Petitioner.

Section 70(1)(b) of the DCS Act declares that Disputes which may be referred for arbitration are- “Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society other than a dispute regarding disciplinary action taken by the cooperative society or its committee against a paid employee of the co-operative society arises - (b) between a member, past member or person claiming through a member, past member or deceased member and the co-operative society, its committee or any officer, agent or employee of the co-operative society or liquidator, past or present.”

The Petitioner relied on K.A. Annamma v. Secretary, Cochin Co-operative Hospital Society Ltd. (2018) 2 SCC 729, to submit that the Labour Court has concurrent jurisdiction with the Cooperative Societies Act and that the Tribunal can adjudicate upon such a dispute provided it is satisfied that the employee concerned is a 'Workman' and that the dispute raised by him is an 'Industrial Dispute'. Petitioner submitted that both these pre-requisites are satisfied in the present case and the Respondent has not raised any objection regarding either.

The Respondent, on the other hand, argued that the issue with respect to jurisdiction of the learned Labour Court is a legal issue, which has been correctly decided by the learned Labour Court. It was submitted that the action taken against the Petitioner was not a disciplinary action since he had “voluntarily abandoned/resigned his services.”

The respondents relied on the judgment of Cooperative Central Bank Ltd. and Ors. v. Additional Industrial Tribunal, Andhra Pradesh and Ors. (1969) 2 SCC 43, submitting that the disputes of this nature are required to be adjudicated upon by the Registrar of Cooperative Societies. Further, the respondents dismissed the precedent presented by the petitioners by highlighting that the Kerala Co-operative Societies Act, 1969 [ “Kerala Act”], which is referred to in the K.A. Annamma case does not contain the words “disciplinary action” and thus, the case is not applicable to the present case. Lastly, they contended that whether it is a “disciplinary action”, is something to be decided by the learned Labour Court.

The Petitioner in his rejoinder submitted the Cooperative Central Bank case is not applicable as it was in the context of a reference made with respect to service conditions in relation to transfer of employees of two banks. In addition, he contended that the words “disciplinary actions”, form a part of Section 70(1) of the DCS Act, which by itself makes it clear that an exception has been carved out for the same. He reiterated that K.A. Annamma case also sets out that the Registrar and the learned Labour Court have concurrent jurisdiction, and it is the discretion of the workmen to choose their forum for adjudication.

Findings of the Court

The Bench was not satisfied with the submissions of the Respondent. Justice Tara pointed that the record shows that the Petitioner was removed from the services for misconduct by an order by the Chief Executive Officer ('CEO') directing that unless the Petitioner, who was absenting himself from duties without proper permission or sanction of leave, reports for duty, disciplinary action would be initiated against him.

Further, the Court held that the Section 70(1) of the DCS Act provides for a bar on a Civil Court from entertaining certain disputes. However, the Section contains an exception, which is with respect to a dispute regarding a disciplinary action taken by the Cooperative Society against a paid employee. A plain reading of the Section shows that where there is a dispute which relates to disciplinary action taken by the Cooperative Society against a paid employee, such a dispute will not be barred by the provisions of Section 70(1) of the DCS Act.

Justice Tara reiterated the K.A. Annamma case which had held that both the Kerala Act and the Industrial Disputes Act, 1947 possess concurrent jurisdiction to decide a service dispute between a Cooperative society employee and his employer. The Supreme Court, in that case, had also held that the employee has the right to approach either the Labour Court/Industrial Tribunal or Registrar. The Labour Court/Tribunal can adjudicate upon a dispute, provided that the employee is a workman and the dispute raised by him is an 'industrial dispute.'

About the Cooperative Central Bank case, the Court agreed that the judgement case is inapplicable to the circumstances of the present case as the subject matter of that case was service conditions and inter-se transfers between the Banks.

Undisputedly, in the present case, the Petitioner was working as a Clerk-cum-Cashier with the Respondent since the year 2001. Although, the Respondent has contended that the Petitioner voluntarily abandoned his services, the order by CEO says otherwise. In addition, Rule 32 of the Staff Service Rules of the Respondent/Bank provide that where there is absence of an officer from duty without leave, the same would constitute misconduct punishable under disciplinary proceedings.

Considering the above findings, the Single-Judge bench allowed the petition and held that the action initiated by the Respondent is pursuant to a disciplinary action taken against a paid employee of a corporative society and thus, does not fall within the definition of Section 70(1) of the DCS Act. The Court remanded the matter to the learned Labour Court for a de novo hearing while clarifying that the dispute has not been examined on merits.

Advocates who appeared in this case :

For Petitioner(s): Mr. Anil Kumar and Mr. Narender Kumar, Advs.

For Respondent(s): Mr. Abhinav Sharma and Mr. Ravi Singh Chhikara, Advs.

Case Title: Sunil Kumar Tewatia v Jain Cooperative Bank

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