JUDGMENT
Ruma Pal, J.
1. The subject matter of challenge in both these writ petitions is an Award passed by the Learned 5th Industrial Tribunal, made ex parte and published under Section 17 of the Industrial Disputes Act, 1947 on January 11, 1991. The writ petitions have been filed by two Co-operative Banks. The Award determined diverse issues relating to the service conditions of the employees of Central Co-operative Banks and Land Development Bank and Urban Co-operative Banks.
2. Both the writ petitioners had sought for setting aside of the award on substantially similar grounds. As such this judgment is disposing of both the writ petitions.
3. According to the petitioners the award is bad because it was passed ex parte without any notice being served on the writ petitioners. It is submitted that the terms and conditions of service as sought to be fixed by the award would necessarily affect the writ petitioners particularly as far as the question of finances was concerned. It is prayed that the award having been passed without giving the petitioners opportunity of being heard is a nullity and must be set aside.
4. The second submission of the writ petitioners is that the Tribunal had sought to determine the matters which were beyond its competence. The service conditions of the workers of the petitioners to be found in various statutory provisions including Section 42 of the West Bengal Co-operative Societies Act, 1983 and the Rules framed thereunder. It is submitted that the Tribunal had sought in fact to exercise the power of Sub-ordinate Legislation. Thirdly it is submitted that the award was bad because it had not taken into consideration the agreements entered into between the petitioners and its Employees, which were binding on both the parties. Fourthly it is submitted that the award was perverse in that the Tribunal had merely accepted the submissions of the employees union without application of mind. It is said that the award would lead to palpably absurd results if implemented and that in any event the petitioner banks are financially weak banks and not in a position to give effect to the award.
5. Finally it is submitted that the Tribunal had proceeded on a legal misconception that the petitioners Banks were under the control of the Central Co-operative Banks and Land Development Banks. It is submitted that the petitioner banks were independent having their own service rules and the service rules of the Central Land Development Bank did not in any way apply to the employees of the petitioners banks.
6. According to the respondents the writ application is not maintainable because the question whether the notice has been served or not was the question of fact to be determined on evidence. It is submitted that the petitioners had an alternative remedy available under Rules 20A of the Industrial Dispute Rules, West Bengal, to pray to the Tribunal to review the order.
7. Secondly it is stated that the Tribunal had kept strictly within the terms of the reference made to it by the State Government The reference was made because conciliation had failed It is stated that the Industrial Disputes Act is the only statute which allows for adjudication of disputes relating to the Service conditions of the employees of the Co-operative Banks. The reference under Section 10 of the Industrial Disputes Act had not been challenged by any of the banks and as such the Tribunal had jurisdiction to entertain the disputes. Reliance has been placed on two decisions of the Supreme Court being S. K. Varma v. Mahesh Chandra and Anr., reporter in (1983-II-LLJ-429) and Sadhu Ram v. Delhi Transport Corpn., reported in (1983-II-LLJ-383) in this connection.
8. Thirdly it is submitted that the reference had been made in 1982. The West Bengal Cooperative Societies Rules came into force in 1987 and did not have any retrospective effect. Therefore the reference could be proceeded with.
9. It appears from the award that an industrial dispute had arisen between, “the Co-operative Bank of the categories of (i) Central Co-operative Banks (ii) Land Development Banks and (iii) Urban Co-operative Banks and their workmen represented by All Bengal Co-operative Banks Employees’ Federation” (being respondent No. 1 in the First writ applications and me respondent No. 5 in the second).
10. It also appears that the dispute was referred by the Labour Department, Government of West Bengal initially on January 5, 1982 for adjudication of the following issues:
1. Working Hours and wages for overtime works.
2. Retirement age and retirement benefits.
3. Service Rules including rules regarding transfer and promotion.
11. The list of banks in the beginning of the award shows that there are 17 Central Co-operative Banks, 25 Land Development Banks, and 14 Urban Co-operative Banks. The First and Second writ petitioners’ names have been listed under the first category.
12.lt appears that the writ applications are being contested only by the Employees’ Federation. No affidavit in opposition has been filed by ; any of the other respondents nor were they represented at the hearing.
13. As noted above, the reference was initially made in 1982. This was to the Second Industrial Tribunal. The award notes that the Second Industrial Tribunal “issued usual notices in prescribed form to the respective banks mentioned above and the Union and after the same being properly served upon them, they entered; appearances”.
14. Records had not been produced before this Court by the State respondents. But it is not in dispute that the writ petitioners at least had not entered appearance at any stage. Some of the banks submitted written statements before the Second Industrial Tribunal. Thereafter the matter was transferred to the 5th Industrial Tribunal on March 2, 1987
15. As far as the 5th Tribunal is concerned it has been recorded that “notices were issued by this Tribunal upon the parties for appearance and the union entered appearance before this Tribunal, but the employers did not turn up inspite of due service.”
The matter was fixed for exparte hearing and thereafter adjourned from time to time. Ultimately on April 16, 1990 an order for issuing fresh notice was passed fixing May 17, 1990 for appearance of the employers. The Tribunal had recorded that “notices were duly served and inspite of it the employers did not turn up on September 6, 1990 when the case was heard ex parte.”
16. No affidavit in opposition has been filed by the employees federation. However, two separate applications were made in each of the writ petitions by the employees’ federation for vacating the interim orders passed in the matters.
17. In the absence of the affidavit in opposition to the categorical averments made in the writ petitions that the writ petitioners had not been served with any notice, the statement must be taken to be uncontroverted.
18. There is also some substance in the petitioners submission that the Tribunal had acted as if the petitioner banks were within the control or subsidiary to the Land Development Banks. This is clear from two paragraphs in the award. In the first paragraph the Arbitrator says that-
“…..it appears from the record, two memorandums of Settlement settling the issues under reference entered into separately between the different banks and their union/association have been filed before the Tribunal. These are namely, between (1) West Bengal Central Co-operative Land Development Bank Ltd. and the West Bengal Central Cooperative Land Development Bank Ltd. Employees’ Assocn. (2) Burdwan Co-operative Land Development Bank Ltd. and their Union, West Bengal Co-operative Development Bank’s Emp. Assocn. and the interim orders on that behalf have been passed by the Tribunal giving effect of the terms and conditions of these Settlements.”
The second paragraph reads as follows:
“….. In view of the deposition of the two witnesses and in view of the fact that the Management of West Bengal Central Co- operative Land Development Bank Ltd have accepted the demands made by the All Bengal Co-operative Bank Employees Federation, I hold that the claims of the Union as made in Annexures T, ‘II’ and ‘III’ to this Award are just, proper and legal and those are accepted.”
Even the evidence relied upon by the Tribunal is the evidence of persons who are not said to be employees of the petitioner banks.
19. Thus the reference to service of notice on the “employers” in the context of the award would seem to refer to the Land Development Banks and not to Banks such as the writ petitioners.
20. The repercussions of the Award are far reaching. When matters of such moment are being decided it is particularly desirable that every effort should be made to notify all parties concerned of the hearing. In order to ensure adequacy of notice the Tribunal should have caused public notice to be given of the hearing of the issues raised before it thus fixing all parties with constructive If not actual notice. No doubt it is open to the Tribunal to proceed ex parte in the face of wilful default but having regard to the material before this Court I am of the view that the fact of default is not well established in the absence of positive proof of service of notice of hearing on the writ petitioners.
21. But in my view the Award must in any event be set aside on the ground that it was made contrary to law. With the enactment of the West Bengal Co-operative Societies Act, 1983, the statutory provision was made with regard to, inter alia, the conditions of services of employees of Co-operative Societies. The particular Section in this context is Section 42. Earlier the conditions of service of employees was provided under the Bye-laws which did not have statutory force.
22. Section 42 of the West Bengal Cooperative Societies Act 1983 insofar as it is relevant provides:-
“S. 42. Appointment of persons in the service of a Co-operative Society:
(1) A co-operative society shall appoint, subject to the provisions of sub-s. (5) of Section 38, such officers and other employees as may be sanctioned by the Registrar to assist the cooperative society in the performance of its duties and discharge of its Functions under this Act or the rules. The Registrar shall accord such sanction, or, in the case of refusal, intimate to the co- operative society the reasons for such refusal within three months from the date on which any such proposal is submitted by the co-operative society, failing which the sanction shall be deemed to have been accorded by the Registrar. The qualification and conditions of service of the officers and other employees of the co-operative society shall be such as may be prescribed.”
23. Provision has also been made under the West Bengal Co- operative Societies Act, 1983 prescribing procedure inter alia for fixing the conditions of service of the employees with Cooperative Societies. The procedure has been laid down in Section 147 of the Act.
Section 147 reads as follows:-“Section 147. Power to make rules:
(1) The State Government may, after previous publication in the Official Gazette, make rules for carrying out the purposes of this Act for the whole or any part of West Bengal or for any Co- operative Society or Class of co-operative society:
Provided that any such rules may be made without previous publication if the State Government is of opinion that in the public interest such rules should be brought into force at once.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters which may be, or are required to be, be, prescribed or made by rules.
(3) Any rule made under this Act may provide that any person committing a breach thereof shall on conviction by a Court be punishable with fine which may extend to five hundred rupees and, when the breach is a continuing one, with a further fine which may extend to ten rupees per day for so long as the breach continues after such conviction.
(4) All rules made under this Act shall be laid before the State Legislature for not less than fourteen days as soon as they are made and shall be subject to such modification, if any, whether by way of repeal or amendment, as the State Legislature may make during the session in which they are laid or the session immediately following.
(5) Any modification in rules made by the
State Legislature under
Sub-section (4) shall be
published by the State Government by
notification and shall, unless some later date
is specified in the notification, come into
force on the date of the notification.”
24. In exercise of the powers conferred under Section 147, the West Bengal Co-operative Societies
Rules 1987 (hereinafter referred to as the Rules)
were made and came into force on August 1,
1987. Apart from other matters, the Rules provide for the condition of service of the employees of the Co-operative Societies. Rule 108
provides that the condition of service of the employees of Co- operative Societies shall subject to ;
the terms of specific contract enforceable by law
and the provision of any law for the time being as
enunciated in the Appendix 6 to chapter 6 of the
Rules. Appendix 6 to Chapter 6 contains within
itself the conditions of service of the employees of
the Co-operative Societies including grouping,
status of employees qualifications to appointment, mode of appointment, seniority, pay allowances and other concession, transfer and training,
leave, conduct and discipline and retirement benefits: Rule 113 deals with contributions to the Provident Fund and mode of its maintenance: Rule 115
deals with maintenance of Co-operative Education
Fund to be utilised, inter alia, for education of the
employees of Co-operative Societies.
25. As already noted the terms of reference deal with terms and conditions of service of the employees of Co-operative Societies irrespective of the question whether the issues could be, continued to be determined by the Tribunal. It was incumbent on the Tribunal to have, decided matter in accordance with the statutory rules. It is nobody’s case that the Rules were in fact drawn to the attention of the Tribunal. It is of no, consequence that the reference was made before the 1983 Act, and the Rules came into operation. When the Award was being passed, both the Acts and the Rules had come into operation. Incidentally the award is not retrospective but prospective. Therefore there is a real possibility of a clash between 1987 Rules and the 1990
Award.
26. The discrepancy between the Rules and the Award will be apparent from the following. In the Award, the age of retirement has been fixed at 60 years subject to certain exceptions which are not relevant. Under Rule 19 of Appendix 6 to Chapter 6, every employee other than those in Group ‘D’ of a Co-operative Society retirement will be on superannuation on attaining the age of 58 years. An employee in Group ‘D’ will retire on attaining the age of 60 years.
27. The Award has also provided that there could be no transfer within three years. There is no such limit under the Rules. 15 days prior notice is required to be given in the case of permanent transfer under the Award. Under the Rules, 6 days joining time is given in addition to the time required for the journey and when there is no change of residence joining time shall not be more than 24 hours.
28. These discrepancies are merely illustrative and sufficient to show that both the Rules and the Award cannot be simultaneously given effect to. One must give way to the other. The authorities have held that it is the award which must be set aside so that the statutory provisions may prevail (See Management of Marina Hotel v. The Workmen: (196l-ll-LLJ-431) Hindustan Times Ltd, v. Their Workmen: (1963-I-LLJ-108) Dalmia Cement (Bharat) Ltd. v. Their Workmen and Anr: (1961-II-LLJ -130) and Cooperative Central bank. Ltd. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad: .
29. The decisions cited by the Employees Federation do not support the contention that me Industrial Disputes Act, 1947 prevails over the West Bengal Co-operative Societies Act, 1983 in the sense argued. These cases referred to the power of the Registrar to decide such a dispute under the statutory equivalent to Section 95 of the 1983 Act. It was held that the Registrar had no jurisdiction to decide a dispute between a co-operative society and its workmen (See Deccan
Merchants Co-operative Bank Ltd v. Dalichand Jugraj Jain and Others: ; Co-operative Central Bank Ltd, and Others etc. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad and others (Supra) Punjab Co-operative Bank Ltd. v. R. S. Bhatia (dead) through L. R.: (1975-II-LU-373) (SC); Co-operative Milk Societies Union Ltd. v. State of West Bengal and Others: (1958 – II – LLJ-61) (Cal) and The Gujrat State Co-operative Land Development Bank Ltd. v. P.R. Mankad and another:: .
30. None of the decisions cited related to the issue now under consideration and that is whether the tribunal could decide in a manner contrary to the law.
31. For the reasons aforesaid the writ petitions are allowed and impugned award is set aside.
There will he no order as to costs.
Let Xerox copies of this Judgment be handed over to the learned advocates for both the parties on observing usual formalities.