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2024 Supreme(Online)(KER) 31394

HIGH COURT OF KERALA
Murali Purushothaman, J
BABU.M.J – Appellant
Versus
VAZHAKULAM SERVICE CO-OP TIVE BANK LTD. – Respondent
WP(C) 34545/2023



Advocates:
P.C.SASIDHARAN, AKSHAY VENU, SRI.V.RAJENDRAN, SR., ADV A.V.JAMES

The Co-operative Tribunal cannot substitute disciplinary punishment unless the original action contravenes statutory mandates; it must remit such matters to the disciplinary authority for appropriate action.

Headnote:

Disciplinary Action - Employment - Kerala Co-operative Societies Act, 1969 - Sections 69, 82; Kerala Co-operative Societies Rules - Rule 198 - The court analyzed the powers of the Co-operative Tribunal and Arbitration Court in modifying disciplinary actions, emphasizing adherence to statutory mandates and the principles of natural justice.

Fact of the Case:

The 1st respondent, a Peon in a Co-operative Society, was suspended and later compulsorily retired due to alleged misconduct. He challenged the disciplinary action, leading to an arbitration award that found the process flawed. The Tribunal modified the punishment, prompting the Society to appeal.

Finding of the Court:

The court upheld the Tribunal's finding that the inquiry followed due process but ruled that the punishment of compulsory retirement was disproportionate. It emphasized that the Tribunal overstepped its authority by substituting the punishment instead of remitting the matter to the disciplinary authority.

Issues: Whether the Co-operative Tribunal had the authority to modify the punishment imposed by the Society and whether the punishment was disproportionate to the misconduct.

Ratio Decidendi: The court concluded that while the Tribunal could assess the proportionality of punishment, it lacked the authority to substitute the punishment without a statutory basis for doing so, as per the Kerala Co-operative Societies Act and Rules.

Final Decision: The Tribunal's order was set aside, and the matter was remitted to the disciplinary authority for reconsideration of the punishment.

JUDGMENT

The petitioners in W.P.(C) No.38676 of 2023 are the Co-operative Society, its Secretary in charge and the President and the 1st respondent is the petitioner in W.P.(C) No.34545 of 2023.

2. Since common issues arise for consideration in these writ petitions, they are disposed of by this common judgment. The status of parties and the documents referred to in this judgment will be as obtaining in W.P.(C) No.38676 of 2023.

3. The 1st respondent was working as Peon in the 1st petitioner Co-operative Society ('Society' for short). He was suspended from service on 15.09.2010 in contemplation of disciplinary proceedings. The charges levelled against the 1st respondent were that he refused to sign the salary register on 29.06.2010 and leave salary register on 15.07.2010 even after repeated request of the Secretary. Another charge was that on 04.08.2010, he absented from duty after lunch break unauthorisedly. It is further alleged that he disobeyed the directions of his superiors, misbehaved with them, and threatened them using offensive language. Finally, it is alleged that although he appeared before the Board of Directors on 05.08.2010 after being summoned, he refused to tender apology as promised.

4. The 1st respondent submitted his explanation to the charges levelled against him.

The enquiry officer found the 1st respondent guilty of the charges, and the President of the Society by order dated 28.04.2011 directed compulsory retirement of the 1st respondent from service.

5. The 1st respondent raised an industrial dispute and the matter was referred to Labour Court and the Labour Court dismissed the claim and thereafter, the 1st respondent filed an arbitration case before the Co-operative Arbitration Court as A.R.C. No.35 of 2016 invoking the provisions of Section 69 of the Kerala Co-operative Societies Act, 1969 . After recording the evidence, the Arbitrator, by Ext. P3 award, found that the enquiry conducted and the punishment imposed were vitiated, and that there was violation of the principles of natural justice.

Consequently, the Arbitrator set aside the order of suspension, the order of compulsory retirement, and the appellate order passed by the Managing Committee. The petitioners were directed to pay all service benefits due to the 1st respondent from the date of suspension.

6. The petitioners challenged Ext.P3 award before the Kerala Co-operative Tribunal ('Tribunal', for short) by filing an appeal under Section 82 of the Kerala Co-operative Societies Act. The Tribunal, by Ext. P4 judgment found that the 1st respondent was bound to sign the salary register and the leave salary register and the explanation given by him for not signing the same is not acceptable. The Tribunal also found that the enquiry was conducted after complying with all formalities and following the principles of natural justice and the finding of the Co-operative Arbitration Court to the contrary cannot be approved. After observing so, the Tribunal ventured to consider whether the punishment imposed is disproportionate to the offence committed by the 1st respondent. The Tribunal found that the punishment of compulsory retirement imposed on the 1st respondent is wholly disproportionate to the offence committed by the 1st respondent. After interfering with the punishment awarded by the petitioners, the Tribunal observed that a lesser punishment alone is sufficient to meet the ends of justice. The Tribunal held that barring of two increments of the 1st respondent without cumulative effect is sufficient for the offence he committed and the same is sufficient for his reformation. Accordingly, the Tribunal allowed the appeal in part and ordered reinstatement of the 1st respondent in the post of Peon with 50% back wages.

7. Ext.P4 judgment of the Tribunal is challenged in W.P.(C) No.38676 of 2023. A prayer is also sought to declare that the finding of the Tribunal interfering with the punishment of the 1st respondent and modifying the same as barring of two

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