BIRESH KUMAR S/O LATE BANKE BIHARI SHARMA Vs. STATE OF BIHAR THROUGH THE SECRETARY, DEPARTMENT OF CO-OPERATIVE, GOVT, OF BIHAR, NEW SECRETARIAT, PATNA

JUDGEMENT

(1.) Heard learned counsel for the petitioners, for the State, the Registrar, Co-operative Societies, Bihar as also counsel for the Managing Director, Begusarai Central Co-operative Bank Ltd. (hereinafter referred to as the Bank). A counter affidavit has also been filed on behalf of the Chairman of the Bank asserting that the Bank has not authorized the Managing Director to contest this case and further alleging non-co-operation on his part in conducting the affairs of the Bank, which is taken on record, copy whereof has, however, not been served on the counsel for the Registrar, Co-operative Societies.

(2.) Petitioners are the employees of the Bank. They have filed this writ application praying, inter alia, to direct the Bank to abide by the decision of the Chairman of the Bank dated 12.8.2009, Annexure-1 to this application taken in compliance of the Resolution of the Board of Directors of the Bank dated 7.7.2009 communicated to all concerned under Memo No. 268 dated 17.7.2009, Annexure-2 in the light whereof recommendation dated 10.8.2009, Annexure- 3 was submitted as per the 8th Bipartite Settlement revising the pay scale admissible to the employees of the Bank, notionally with effect from 1.1.2004, actual financial benefit with effect from 1.4.2005 with further direction that arrears of difference in the revised scale for the period April, 2005 till July, 2009 will have to be kept in deposit with the Bank for minimum period of one year and salary in the revised scale shall be paid to the employees of the Bank with effect from August, 2009, which was accepted by the Chairman under order dated 12.8.2009, Anneuxre-1 in compliance of agenda item no. 14 of the resolution of the Board dated 7.7.2009, Annexure-2. On receipt of the copy of the writ petition, the Managing Director, Respondent No. 3 filed counter affidavit and supplementary counter affidavit asserting that the decision of the Bank to revise the pay scale of its employees is not in the financial interest of the Bank and this Court should not pass any direction for its implementation. Later, they filed supplementary counter affidavit placing on record the order, bearing Memo No. 7739 dated 4.12.2009, Annexure-G to the supplementary counter affidavit filed on behalf of Respondent No. 3 and placed on record the order passed by the Registrar, Cooperative Societies, whereunder the decision to revise the salary structure of the employees of the Bank vide agenda item no. 14 of resolution dated 7.7.2009 was annulled by the Registrar with reference to Clause 48 of the Bye-Laws of the Bank, as according to the Registrar, the decision to revise the salary of the employees of the Bank was taken bereft of the profit and loss account and balance-sheet of the Bank for the year 2008-09 and further the decision was ignoramus of the fact that the Bank is not complying with the provisions contained in sub-section (1) of Section 11 of the Banking Regulation Act, 1949 (hereinafter referred to as the Act). When the aforesaid order of the Registrar was placed on record of the instant application, vide Annexure-G to the supplementary counter affidavit filed on behalf of the Managing Director of the Bank, Respondent No. 3, this Court permitted the petitioners to challenge the said order. Petitioners thereafter filed I.A. No. 8447 of 2009 challenging the order of the Registrar dated 4.12.2009 by annexing the same as Annexure-5 to the said I.A. Respondent No. 3 has filed counter affidavit to such I.A., which has also been taken on record.

(3.) Counsel for the petitioners assails the order of the Registrar dated 4.12.2009, Annexure-G to the supplementary counter affidavit and Annexure-5 to I.A. No. 8447 of 2009 on the ground that said order has been passed ignoramus of the decision of the Government of India exempting the Begusarai Cooperative Bank from complying with the provisions of sub-section (1) of Section 11 of the Act vide exemption notified in Gazette notification of the Finance Ministry dated 7.7.2009 contained as part of Annexure-4 series. Perusal of the said Gazette indicates that such exemption was allowed to the Bank with reference to the powers contained in Section 53 read with Section 56 of the Act on the recommendation of the Reserve Bank of India. It is further submitted that the decision to revise the pay scale was taken by the Board of Directors of the Bank in the light of the provisions contained in Chapter VI-D of the Bihar Co-operative Societies Act, 1935 (hereinafter referred to as the Societies Act), which, inter alia, grants complete financial and administrative independence to the Co-operative Bank(s) as special provisions were enacted under the Chapter granting the Societies undertaking Short Term Co-operative Credit Structure complete financial and administrative independence. The provisions of the Chapter have overriding effect over the other provisions of the Societies Act vide Section 44AT of the Chapter. With reference to provisions contained in Section 44AV, it is pointed out that Co-operative Banks undertaking Short Term Co-operative Credit Structure have complete autonomy in all financial and administrative matters, including framing of Personnel Policy which shall also include revision of scale admissible to the employees. The Board of Directors of the Bank considering the fact that salary structure of the employees of the Bank was not revised for the last 16 years with effect from 1.1.1993, took such decision to revise pay scale of the employees of the Bank to relieve them of the financial hardship caused on account of failure to revise the scale for the last 16 years. Learned counsel for the petitioners further submitted in the background of the fact that the salary structure of the employees of the Bank was not revised for the last 16 years with effect from 1.1.1993, the Board of Directors resolved to revise the salary structure in view of the receipt of the share capital from the State Government in the light of the report of the Baidyanathan Committee, receipt of insurance money from the Central Government in the account of those defaulters who could not pay back the loan amount on account of crop failure, the overall better financial health of the Bank, as it is in a position to comply sub-section (1) of Section 11 of the Act from the year 2008- 09. He further submitted that a Committee of the Senior Officers of the Bank formed under Agenda Item No. 14 of the Resolution dated 7.7.2009 recommended the fitment as per the 8th Bipartite Settlement under recommendation dated 10.8.2009, Annexure-3, which was approved by the delegatee of the Board of Directors, namely,. Chairman under orders dated 12.8.2009, Annexure-1, the Bank should implement such decision. Reliance placed by the Registrar over Clause 48 of the Bye-Laws of the Bank for cancelling/rescinding the resolution of the Bank dated 7.7.2009 is wholly misconceived as thereunder action(s) taken by the Bank in contravention of the provisions contained in the Societies Act or the Rules framed thereunder or the Bye-Laws of the Bank can be quashed. Resolution dated 7.7.2009 having been passed with reference to the grant of financial independence under Chapter Vl-D of the Societies Act could not have been quashed with reference to Clause 48 of the Bye-Laws of the Bank.