UTKAL CO-OPERATIVE BANKING SOCIETY LTD BHUBANESWAR, REPRESENTED THROUGH ITS CHIEF EXECUTIVE IN-CHARGE Vs. UTKAL CO-OPERATIVE BANKING SOCIETY LTD EMPLOYEES ASSOCIATION, BHUBANESWAR REPRESENTED THROUGH ITS GENERAL SECRETARY

JUDGEMENT

(1.) IN this writ petition, the petitioner-management has challenged the award dated 23.08.2011 passed by the Presiding Officer, Labour Court, Bhubaneswar in I.D. Case No.46 of 2006 directing it to pay ex-gratia to the workmen for the year 2001-2002 and 2002-2003 @ 6000/- or 75% of the basic pay which ever is less forthwith and further holding that the workmen of M/s. Utkal Co-operative Banking Society Ltd., Bhubaneswar were not entitled to the medical allowance.

(2.) THE facts leading to the present case are as follows: The petitioner is a Co-operative Banking Society Ltd. registered under the Orissa Co-operative Societies Act, 1962 (hereinafter in short as "the Act, 1962") and the Class-III and above grade employees of Orissa Secretariat and the Heads of Department of Cuttack and Bhubaneswar are only entitled to be the members of the Society. The final authority of the Society vests in its General Body as provided under Section 27 of the Act, 1962. As per Section 28 of the Act, 1962, the management of the Society vests in a Committee constituted in accordance with the Act, Rules and Bye-laws. The Committee of the Society is elected by the members of the Society in its General Body meeting. The Society has been approved by the Registrar of the Co-operative Society and the Bye-law is effective from the day when the Society is registered. Section 56 of the Act, 1962 makes provision regarding disposal of net profit of a Society. Sub-section 2 (e) of Section 56 provides that the net profit after payment stipulated under sub- section (1) may be utilized for payment of bonus to the employees of the Society to the extent and in the manner as specified in the Bye-laws. Clause 52 of the Bye-law also provides as to how the net profit will be distributed.

(3.) AFTER disposal of the writ petition, the matter was placed before the Managing Committee of the petitioner-Society and vide Resolution dated 16.12.1996, the Managing Committee decided to pay bonus to the employees for the years 1991-92, 1992-93,1993-94 @ 20% as decided by this Court. However, the Committee also decided that such payment for the subsequent years shall be paid only after determination of allocable surplus in accordance with the provision of the Act, 1965. It is pertinent to mention here that the Act, 1965 was amended and the limit of Rs.1600/- per month was increased to Rs.3,500/- with retrospective effect from 1.4.1993. The employees of the petitioner-Society were receiving salary and wages more than Rs. 1600/- up to 1.4.1993 and Rs.3,500/- from 1.4.1993 onwards, as such, the employees were not entitled to receive any bonus for the year 1991 and onwards. However, with mala fide intention, an office note was moved for payment of bonus/ex gratia referring to the Board's Resolution dated 16.12.1996 even though the Board had not whispered anything regarding payment of ex-gratia to the employees, whose salaries exceeded above the maximum slab of wages and as such they were not entitled to get any bonus. The above proposal of the office note was not approved by the then authority as the same was not in accordance with the Resolution of the Banking Society. Thereafter, the then Society moved another proposal for payment of bonus which was agreed to on 18.12.1996 and approved accordingly. However, the then Secretary-in-Charge manipulated his note overwriting the sanctioned amount written in digit (not in words) and issued office order on 20.12.1996 changing the date of signature of the authority in respect of bonus/ex-gratia, whereas the management had only resolved to pay bonus to the employees, a copy of which of the note sheet dated 16.12.1996 to 20.12.1996 has been filed as Annexure-2. Accordingly, the amount of bonus was calculated in respect of all the employees for the years 1991 to 1994-95 amounting to Rs.5,45,966/- @ 20% without excluding the exempted employees. As it appears, in the note sheet, the amount was over written which was visible clearly. On the basis of the said manipulation, Office Order dated 20.12.1996 was also issued under the signature of the then Secretary-in- Charge, Sri B.C. Rout, who was an employee of the Bank and a beneficiary of the manipulated order for payment of the ex-gratia as aforesaid. Under the above circumstances, the employees of the petitioner-society were able to draw the benefit of ex-gratia illegally by adopting fraudulent means when the elected committee of the Management was not in the office. The elected committee of the management came into office on 14.10.1997 and when this fraud was detected, the committee of management in its meeting dated 16.3.1998 decided that the amount of ex-gratia received by the ineligible employees drawing salary more than the limit fixed under the Act, 1965 should be refunded and accordingly, office order dated 27.3.1998 was issued for recovery of the illegal benefit drawn by seven such employees. The elected member of the management was again superseded and a management-in-charge of the Society was appointed by the Registrar, Co-operative Societies. The Registrar, however, on 26.11.1999 again decided not to cause any further recovery and not to refund the amount already recovered by canceling the earlier order dated 27.3.1998. While the matter stood thus, the accounts of the Bank was audited by the auditors of the Co-operation Department. The Director of Co-operative Audit issued a circular on 28.10.2002 informing all concerned including the Co-operative Banks that the employees of the Co-operative Society were only entitled to bonus as per the Payment of Bonus Act and no Society can distribute the profit, if any, by way of ex-gratia. The Committee of the Management came to the office on 16.06.2003 and the General Body in its meeting dated 29.6.2003 objected for payment of ex- gratia to the employees and decided to divert Rs.3,12,000/- towards building fund instead of payment of ex-gratia to the employees. After calculation made by the President, it was decided to allow payment of ex- gratia to the employees for the year 2001-02 since all the employees were drawing salary/wages more than the maximum slab of Rs.3,500/-. However, the Committee of Management in its meeting dated 30.8.2003 modified the decision to pay ex-gratia to the employees @ 20% instead of resolving to pay the same @ Rs.6,000/- or 75% of the basic pay whichever is less. But the employees of the Bank did not accept the decision of the management and raised objection. Accordingly, the proposal for payment of ex-gratia was kept in abeyance by resolution dated 16.10.2003. The Registrar, Co-operative Societies on 3.3.2004 informed the Chief Executive of the petitioner-Society raising objection on payment of ex-gratia to the employees of the Society by misinterpreting the order passed by this Court in O.J.C. No.2934 of 1996 as well as the Resolution of the Committee of Management dated 16.12.1996 and instructed to recover the amount paid towards ex-gratia, as the same was not due to the employees because there is no provision in the Act and Rules in that respect. The Registrar, Co- operative Societies by another letter dated 3.3.2004 asked the Auditor General of Co-operative Societies to cause a special audit on the illegal payment of ex-gratia to the ineligible employees of the Society. Accordingly, the matter was placed before the General Body Meeting of the Society and it was unanimously decided not to pay any ex-gratia since there was no statutory obligation for making any such payment nor the Orissa Co- operative Society Act, Rules or the Bye-laws stipulates anything in this regard. Accordingly, the General Body passed a resolution on 28.3.2004 with regard to reapportionment of the amount of Rs.3,12,000/- towards building funds instead of ex gratia. Accordingly, Industrial Dispute was raised on payment of ex-gratia for the years 2001-02 and 2002-03 and the matter was referred to the Labour Court, Bhubaneswr in I.D. Case No.46 of 2006.