SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2026 Supreme(Mad) 354

IN THE HIGH COURT OF JUDICATURE AT MADRAS 
D.BHARATHA CHAKRAVARTHY, J.
The Tamil Nadu Industrial Co-operative Bank Ltd., Rep. By its Joint Director/Managing Director – Petitioner
Versus
The Joint Commissioner of Labour/ Appellate Authority, Salem Respondents
W.P.Nos.22994, 22999, 23358 and 23363 of 2024 and W.M.P.Nos.25516, 38381, 38438, 38442, 25519, 38435, 38388, 25072, 38440, 38443, 38441 and 25079 of 2024
Decided On : 03-02-2026

Advocates Appeared:
For the Petitioner:Mr.Haja Nazirudeen, Additional Advocate General, Asstd. By Mr. P. Haribabu, Government Advocate
For the Respondents:Mr. A.M. Ayyadurai, Government Advocate for Mr. P. Chandrasekar

The appellate authority under the Tamil Nadu Shops and Establishments Act has jurisdiction to entertain appeals from employees of co-operative societies governed by the Tamil Nadu Co-operative Societies Act, and dismissal orders lacking evidence of misconduct are unsustainable.

Headnote:(A) Tamil Nadu Shops and Establishments Act, 1947 - Section 41 - Tamil Nadu Co-operative Societies Act, 1983 - Jurisdiction of appellate authority - Dismissal of employees for alleged misconduct related to fraudulent jewel loans - Employees reinstated due to lack of evidence of collusion or misconduct - Appellate authority retained jurisdiction over the cases as per earlier judgments. (Paras 10-20)

(B) Employees' rights and mechanisms for appeal - Co-operative societies have internal remedies under the provisions of their governing Act and can choose amongst available legal remedies. (Paras 10, 12)

Facts of the case:
The Tamil Nadu Industrial Co-operative Bank dismissed four employees based on alleged fraud related to jewel loans, leading to writ petitions challenging their dismissal. The employees claimed no collusion with the guilty appraiser.

Findings of Court:
The appellate authority ruled in favor of the employees, concluding the dismissal lacked sound evidence and thus deemed perverse. The court reinstated employees with continuity of service and benefits.

Issues: (i) Jurisdiction of the appellate authority; (ii) Sustainability of the dismissal order.

Ratio Decidendi: The court found the dismissal and ensuing disciplinary action were unfounded given lack of proof for collusion or wrongdoing by the employees. Hence, the appellate authority's reinstatement decision was upheld.

Result: Writ petitions dismissed; employees reinstated with service benefits.

Table of Content
1. establishment of jurisdictional facts and employment context. (Para 2 , 3)
2. jurisdiction concerns under tamil nadu shops and establishments act. (Para 5 , 6)
3. hierarchical scrutiny regarding multiple legal remedies available. (Para 8 , 10 , 11)
4. assessment of evidence and implications of misconduct allegations. (Para 14 , 15 , 16 , 19)
5. final judgment on employee reinstatement and back-wages. (Para 20)

ORDER :

 D.BHARATHA CHAKRAVARTHY, J.

1. All these Writ Petitions are connected to each other and as such, are taken up and disposed of together by this common order.

2. The petitioner is the Tamil Nadu Industrial Co-operative Bank Limited. While so, it was found that one Sakthivel, who was appointed as a Jewel Appraiser, had played fraud on the bank by keeping fake jewels in 89 packets with reference to the jewel loan issued to the customers and thus, caused loss to the bank. As a matter of fact, a criminal complaint was lodged in respect of the entire episode and only the Jewel Appraiser, R.Sakthivel, is being prosecuted in the criminal case. Similarly, surcharge proceedings under Section 87 of the Tamil Nadu Co-Operative Societies Act, 1983, was also initiated, in which also, surcharge order is passed only against the said order Jewel Appraiser and the concerned individuals, who obtained loan.

3. While so, the four workmen, involved in this case, K.Kameena, who is an Assistant in the particular branch, T.Muthuraja, the Bank Inspector, K.Mahalakshmi, Sub-Accountant, M.Indira Gandhi, Assistant, who are all working in the branch and sanctioned/disbursed some of the loans and processed those loans in which the fake jewels were involved, were issued with the charge memorandum containing 13 charges. All the charges relate to the fact that the workmen, being the employees of the Co-operative Society, ought to have independently verified the quality of the jewels which they have not done and the further charge is that they colluded with the Jewel Appraiser and caused loss to the society and they failed to verify the genuineness of the loan applicants. All these employees submitted that except for performing their part of the role in sanctioning and processing the loan, they did not know of the fraud being played by the said Sakthivel. They denied that they were in collusion or being beneficiary of such fraud being played. Domestic Enquiries were conducted on the charges and all the charges were held to be proved in the Enquiry Report, based on which, all the four workmen were dismissed from the service. Aggrieved thereby, they filed an appeal under Section 41 of the Tamil Nadu Shops and Establishments Act, 1947 and by the impugned awards, the dismissal was set aside. They were ordered to be reinstated into service. Aggrieved thereby, these four Writ Petitions are filed in respect of the four cases by the management.

4. Heard Mr.Haja Nazirudeen, learned Additional Advocate General for the petitioner and Mr.A.M.Ayyadurai, learned Government Advocate for the first respondent, Mr.P.Chandrasekar, learned Counsel for the second respondent, in all the cases.

5. The learned Additional Advocate General for the petitioner would submit that the impugned orders are to be set aside for want of jurisdiction. He would rely upon Section 4 (f) of the Tamil Nadu Shops and Establishments Act, 1947 . When the employees are governed by the Tamil Nadu Co-operative Societies Act, 1983 which is self-contained code which has provisions in respect of all the conditions of service, including special provisions for revision under Section 153 in respect of the punishments imposed and the by-laws also containing appeal provisions, there is no jurisdiction for the appellate authority under the to entertain an appeal under Section 41 of the Act. The learned Additional Advocate General would rely upon the judgment of the Hon’ble Supreme Court of India in C.V.Raman Vs. Management of Bank of India and Anr. (1988) 3 SCC 105, more specifically, relying u

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top