Cooperative Whole Sale Society Ltd Thru Sachiv vs Prescribed Authority / Labour Commissioner Faizabad & Anr.

Hon'Ble Irshad Ali, J.

Heard Sri Satya Prakash Srivastava, learned counsel for the petitioners, learned Standing Counsel for respondent No.1 – State and Sri R.S. Mishra, learned counsel for respondent No.2.

The present writ petition has been filed on following prayer:

Factual matrix of the case is that petitioner No.1 is a Society in which the opposite party No.2 was appointed on 23.07.1976 on the post of Salesman. Subsequently, he was promoted to the post of Accountant and continued to work in that capacity up to 17.01.1992.

It is stated that a dispute arose between the Committee of Management of petitioner No.1-Society and its then Secretary, namely, Sri Ram Baran Awasthi. In the said circumstances, opposite party No.2 was directed to officiate and discharge the duties of Secretary of the Society. He accordingly worked as Secretary up to 16.07.1994.

During the period in which opposite party No.2 was discharging his duties as Secretary of the Society, an audit of petitioner No.1-Society was conducted, in which certain instances of alleged mishandling of the funds of the Society were noticed. An enquiry was thereafter conducted by the appointed Enquiry Officer, who found opposite party No.2 guilty of mishandling of the funds and embezzlement. Consequently, the District Assistant Registrar, Cooperative Societies, passed an order dated 30.06.1995, whereby opposite party No.2 was disqualified and was not permitted to continue on any post in petitioner No.1-Society.

Being aggrieved by the aforesaid order dated 30.06.1995, opposite party No.2 approached this Court by filing Writ Petition No.2494 of 1995 (S/S). The said writ petition was decided on 31.03.1997, with a direction to the competent authority to reconsider the matter after providing an opportunity of hearing to opposite party No.2.

Pursuant to the aforesaid directions of this Court, the District Assistant Registrar, Cooperative Societies, Gonda, reconsidered the matter and thereafter passed a surcharge order dated 18.10.1997 directing repayment/recovery in respect of the amount in question.

The said surcharge order dated 18.10.1997 was again challenged by opposite party No.2 before this Court by filing Writ Petition No.6383 of 1997 (S/S). The said writ petition is stated to be pending.

During the pendency of the aforesaid proceedings, opposite party No.2 instituted P.W. Case No.27 of 1995 before opposite party No.1 against petitioner No.1-Society under Section 15(2) of the Payment of Wages Act, 1936.

In the said proceedings, opposite party No.1 treated opposite party No.2 as a labour/workman of the Society and passed an order dated 28.08.2014 directing the petitioners to deposit/pay a sum of Rs.4,09,547.68 within one month.

Being aggrieved by the aforesaid order, the petitioners moved an application dated 24.09.2014 under Rule 8(3), second proviso, seeking recall of the orders dated 28.08.2014 and 03.04.2014. By the said application, the petitioners also sought an opportunity of hearing and prayed that the order dated 28.08.2014 be recalled.

While the aforesaid restoration/recall application was pending consideration, opposite party No.2, being aggrieved by the order dated 28.08.2014, preferred an appeal under Section 17 of the Payment of Wages Act, 1936 before the Additional District Judge, Gonda, seeking enhancement of the amount awarded by the said order. The Additional District Judge, Gonda, vide order dated 16.01.2016, allowed the appeal and modified the order dated 28.08.2014, directing the petitioners to pay an enhanced amount of Rs.10,23,869.20/- within one month. The appellate court further directed that, in the event of delay in payment, interest at the rate of 6% per annum would be payable. Hence, the present writ petition has been preferred before this Court.

Submission of learned counsel for the petitioner is that learned Labour Court has acted wholly without jurisdiction in entertaining and adjudicating the dispute raised by opposite party no.2, inasmuch as the employees of a Co-operative Society do not fall within the statutory definition of “workman” for the purposes of the proceedings before the Labour Court. The relationship between the petitioners and opposite party no.2 is governed by the provisions of the applicable Co-operative Societies law and the service regulations governing the Society, and, therefore, the remedy, if any, available to opposite party no.2 could not have been pursued by invoking the jurisdiction of the Labour Court. Consequently, the very assumption of jurisdiction by opposite party no.1 is without authority of law and the impugned award is liable to be set aside on this ground alone.

He next submitted that the impugned award dated 28.08.2014 has been passed by opposite party no.1, who was functioning as the Presiding Officer of the Labour Court at Faizabad, despite the fact that, vide administrative order dated 22.05.2014, the jurisdiction in respect of the pending cases pertaining to the Devi Patan Region had already been transferred to the concerned authority having jurisdiction over the said region. Thus, on the date on which the impugned award was passed, opposite party no.1 had no authority to proceed with or finally adjudicate the matter relating to the Devi Patan Region. The exercise of jurisdiction by opposite party no.1, notwithstanding the aforesaid administrative transfer of cases, has rendered the impugned award legally unsustainable.

He submitted that immediately upon coming to know of the aforesaid jurisdictional defect arising from the administrative order dated 22.05.2014, the petitioners approached opposite party no.1 by moving an appropriate application seeking recall of the award dated 28.08.2014. The said recall application specifically raised the issue regarding the competence and jurisdiction of opposite party no.1 to pass the impugned award after transfer of the cases relating to the Devi Patan Region. However, the said application has remained pending and has not been adjudicated till date. The failure to decide the recall application has caused serious prejudice to the petitioners and has deprived them of an effective adjudication of a fundamental jurisdictional objection.

The submission is that the aforesaid jurisdictional issue was further brought to the notice of the appellate court; however, the learned District Judge failed to take into consideration the fact that the recall application against the award dated 28.08.2014 was already pending before opposite party no.1. This omission is particularly significant because the entire record of the proceedings before opposite party no.1 had been summoned by the appellate court and, therefore, the pendency and contents of the recall application were matters borne out from the record itself. Nevertheless, without addressing the said objection and without ensuring that the pending recall application was first adjudicated, the appeal was proceeded with and decided. The appellate decision, therefore, suffers from non-consideration of a material and fundamental issue directly affecting the validity of the impugned award.

Thus, his submission is that the impugned award dated 28.08.2014 is also vitiated on account of violation of the principles of natural justice. The award was passed ex parte without affording the petitioners an adequate and effective opportunity of hearing and without permitting them to properly place their defence before the Labour Court. The petitioners were thereby deprived of a reasonable opportunity to contest the claim of opposite party no.2, including the maintainability of the proceedings, the applicability of the Government Order relied upon by opposite party no.2 and the correctness of the alleged arrears of salary. An award passed without providing a meaningful opportunity of hearing cannot be sustained merely on the ground that the proceedings had formally been initiated. The impugned award, being ex parte and having been rendered without proper consideration of the defence of the petitioners, is consequently unfair, unjust, arbitrary and suffers from non-application of mind.

He submitted that the entire claim of opposite party no.2 is founded, inter alia, upon Government Order No.735/36-3-1028 (M.W.)-76 dated 21.06.1984, whereby certain scales/payments were allegedly prescribed. However, the said Government Order has no application to the employees of the Co-operative Society in question. The learned Labour Court has failed to first determine the applicability of the said Government Order to the service conditions of opposite party no.2 and has proceeded as though the rates prescribed therein were automatically binding upon the petitioners. Such an approach is legally erroneous. Unless the applicability of the Government Order to the employees and establishment concerned is established, no liability can be fastened upon the petitioners on its basis. The impugned award, having proceeded on an erroneous assumption regarding the applicability of the said Government Order, is liable to be quashed.

His submission is that, in any event, there were no arrears of salary payable to opposite party no.2 according to the records maintained by petitioner no.1-Society. The claim raised by opposite party no.2 was not supported by the actual records of the Society but was sought to be substantiated by documents described as Appendix “Aa”, “Ba”, “Sa” and “Da”, which, according to the petitioners, were manufactured/prepared by opposite party no.2 for the purpose of projecting himself as a “workman” and for claiming monetary benefits on the basis of the Government Order dated 21.06.1984. Opposite party no.2 thereafter allegedly calculated an inflated and incorrect amount as arrears and obtained the impugned award from opposite party no.1 on the basis of such claim. The Labour Court failed to properly scrutinize the authenticity, legal relevance and evidentiary value of the aforesaid documents as well as the Society's own records before fastening financial liability upon the petitioners.

Therefore, the submission is that the impugned award cannot be sustained either on facts or in law, particularly when the Labour Court lacked jurisdiction to entertain the dispute, the proceedings were continued despite the transfer of the relevant jurisdiction, the petitioners' recall application remained pending, the award was passed ex parte without adequate opportunity of hearing and the Government Order relied upon by opposite party no.2 was itself not applicable to the employees of the Co-operative Society. The award is consequently vitiated by want of jurisdiction, violation of principles of natural justice, erroneous application of law, non-consideration of material records and non-application of mind. It is, therefore, submitted that the impugned award dated 28.08.2014, as well as the consequential appellate order, deserves to be quashed and the claim raised by opposite party no.2 deserves to be rejected in accordance with law.

On the other hand, learned counsel for respondent No.2 in reply to the contention of the learned counsel for the petitioners regarding applicability of the labour laws submitted that the petitioner No.1, namely, Cooperative Wholesale Society Limited, Gonda, is not exempted from the operation of the labour laws. The provisions of the applicable labour legislations, including the Payment of Wages Act, 1936, are fully applicable to the petitioner No.1. The petitioner No.1 itself is registered as a Shop and Commercial Establishment under Section 4-B of the Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962 with the office of the Deputy Labour Commissioner, Devipatan Mandal, Gonda. The establishment was registered under Registration No. श्रम (दू० बा०) फै० क्षेत्र गो०/754 dated 08.04.1982. The said registration has admittedly been renewed by the petitioner No.1 from time to time and continues to remain valid and up to date. Thus, the petitioner No.1 cannot, on the one hand, avail the benefit of registration under the labour legislation and, on the other hand, contend that the labour laws are not applicable to it. The very fact that the establishment is registered and its registration has continuously been renewed demonstrates that it falls within the statutory framework governing shops and commercial establishments and is subject to the applicable labour laws.

He further submitted that So far as the proceedings in P.W. Case No.27 of 1995 are concerned, it is submitted that the petitioners were afforded due opportunity to participate in the proceedings. Upon revival/restart of the proceedings in the aforesaid P.W. Case, the petitioners appeared before opposite party No.1; however, despite their appearance, they did not file any written statement or objection on their behalf. Thereafter, after appearing for some time, the petitioners themselves ceased to participate in the proceedings and stopped appearing before opposite party No.1. Thus, the petitioners cannot attribute the consequence of their own non-participation to the respondent or to the Prescribed Authority. The proceedings were ultimately decided in favour of opposite party No.2 on account of the

circumstances prevailing before the authority and the failure of the petitioners to contest the claim effectively.

He next submitted that the allegation that the judgment and order dated 28.08.2014 was passed ex parte is misconceived and factually incorrect. The petitioners had notice of the proceedings and had initially appeared before the authority. They were, thus, fully aware of the pendency of P.W. Case No.27 of 1995 and had an opportunity to file their written statement and contest the claim. Their subsequent failure to appear and participate in the proceedings was attributable to their own conduct. An order cannot be termed as ex parte merely because a party, after entering appearance, chooses not to participate in the proceedings and does not avail the opportunity afforded to it. The petitioners, having voluntarily abstained from the proceedings, cannot subsequently seek to challenge the resulting order by describing the same as an ex parte order.

He next submitted that the petitioners had an efficacious statutory remedy against the judgment and order dated 28.08.2014. The petitioners, instead of availing the remedy of appeal before the District Judge, Gonda, did not challenge the said order in accordance with the statutory procedure. The petitioners remained inactive despite having knowledge of the proceedings and the order passed therein. Their failure to pursue the remedy available in law cannot be used as a ground for invoking the extraordinary writ jurisdiction of this Hon’ble Court. The subsequent order dated 16.01.2016 also cannot be assailed by the petitioners on the ground that they had been denied an opportunity, when the record, as stated above, demonstrates that they had themselves failed to participate in the original proceedings and had also failed to avail the statutory appellate remedy.

He submitted that the conduct of the petitioners is also relevant while examining the relief sought in the present writ petition. Having appeared in the proceedings, having failed to file their written statement, thereafter having discontinued their appearance and further having failed to challenge the order dated 28.08.2014 before the competent appellate authority, the petitioners cannot now seek to reopen the matter in writ jurisdiction. A party cannot be permitted to take advantage of its own omission or inaction. The challenge raised by the petitioners is, therefore, liable to be examined in the light of their conduct throughout the proceedings.

He submitted that none of the grounds urged by the petitioners furnishes any legally sustainable basis for interference in writ jurisdiction. The orders impugned in the writ petition have been passed by the competent authority in proceedings in which the petitioners had knowledge and opportunity to participate. No sufficient ground has been demonstrated for holding that the proceedings were conducted without jurisdiction or in violation of the principles of natural justice. In the absence of any such established illegality, perversity or jurisdictional error, the extraordinary jurisdiction of this Hon’ble Court ought not to be exercised in favour of the petitioners.

He lastly submitted that the writ petition is devoid of merit and deserves to be dismissed. The petitioners are not entitled to any discretionary or equitable relief, particularly in view of their own failure to contest the proceedings and their failure to avail the statutory remedy against the order dated 28.08.2014. The impugned orders do not warrant interference by this Hon’ble Court, and the writ petition is liable to be dismissed.

Learned Standing Counsel appearing for respondent No.1 – State also adopted the same arguments, as advanced by learned counsel for respondent No.1.

I have considered the submissions advanced by learned counsel for the parties and perused the material on record.

Having considered the submissions advanced by learned counsel for the petitioners, learned counsel appearing for opposite party No.2 and learned Standing Counsel for the State and having perused the material available on record, this Court finds that the controversy essentially raises questions relating to;

The first and most fundamental question which arises for consideration is whether the proceedings initiated by opposite party No.2 under Section 15(2) of the Payment of Wages Act, 1936 were maintainable against petitioner No.1-Society in respect of the claim arising out of his employment with the cooperative society.

The undisputed factual position is that opposite party No.2 was appointed in petitioner No.1-Society on 23.07.1976 as a Salesman, was thereafter promoted as Accountant and subsequently, in the circumstances pleaded by the parties, was required to discharge the duties of Secretary of the Society. His relationship with petitioner No.1 was, therefore, one arising out of employment in a cooperative society registered under the cooperative societies legislation applicable in the State of Uttar Pradesh.

The mere fact that an employee of a cooperative society may fall within the ordinary description of an employee or may receive wages does not, by itself, answer the question as to which statutory forum has jurisdiction to adjudicate a particular service or wage dispute. The question of forum has to be determined with reference to the governing statutory scheme and the legislative intention disclosed therein.

In this regard, the judgment of the Hon'ble Supreme Court in the case of Ghaziabad Zila Sahkari Bank Ltd. v. Additional Labour Commissioner and others; (2007) 11 SCC 756, assumes considerable significance. The Hon’ble Supreme Court considered the precise question regarding the applicability of general labour legislation to employees of cooperative societies governed by the U.P. Cooperative Societies Act, 1965 and held that the U.P. Cooperative Societies Act, being the special enactment, governs employment in cooperative societies to the exclusion of the general labour legislation in the field covered by the special enactment. The Court treated the cooperative societies legislation as a complete code concerning employment in cooperative societies and held that the general labour legislation cannot be permitted to operate in a manner resulting in conflict between the authorities and remedies created under the two statutory regimes.

The aforesaid principle is not confined merely to disputes concerning termination or industrial adjudication. Its underlying rationale is that where the legislature has created a special statutory machinery for regulation of employment in cooperative societies, a general labour enactment cannot be invoked so as to circumvent the special statutory mechanism. A subsequent decision of this Court has also applied the ratio of Ghaziabad Zila Sahkari Bank (Supra) to hold that disputes concerning conditions of service of employees of cooperative societies are governed by the U.P. Cooperative Societies Act and the statutory regulations framed thereunder.

Learned counsel for opposite party No.2, however, has placed substantial reliance upon the fact that petitioner No.1-Society was registered as a Shop and Commercial Establishment under the U.P. Dookan Aur Vanijya Adhishthan Adhiniyam, 1962 and that its registration had been renewed from time to time. It has consequently been argued that petitioner No.1 cannot simultaneously avail the benefits of labour legislation and deny its applicability.

The aforesaid submission, though attractive at first blush, does not by itself establish the jurisdiction of the authority under the Payment of Wages Act in relation to a dispute arising from the employment of an employee of a cooperative society. Registration of an establishment under one labour enactment and the question as to whether a particular statutory adjudicatory mechanism can be invoked against a cooperative society are distinct questions. The existence of registration under the Shops and Commercial Establishments legislation cannot, without a further examination of the statutory scheme, be treated as overriding the special provisions governing employment in cooperative societies.

The U.P. Dookan Aur Vanijya Adhishthan Adhiniyam, 1962 is a legislation regulating conditions of work and employment in shops and commercial establishments. Its application, exemptions and statutory scheme have to be read in their own context. The fact that an establishment is covered by a particular labour enactment does not necessarily mean that every dispute concerning its employees must be adjudicated under every other general labour enactment, irrespective of the existence of a special statutory regime.

The distinction is especially material in the present case because petitioner No.1 is not an ordinary private commercial establishment but a cooperative society whose affairs and employment conditions are governed by the cooperative societies legislation. The special statutory framework cannot be rendered redundant merely because the Society has also been subjected to regulatory requirements under another enactment.

Consequently, the registration of petitioner No.1 under the U.P. Dookan Aur Vanijya Adhishthan Adhiniyam, 1962 cannot, standing alone, furnish a sufficient basis for holding that the authority under Section 15 of the Payment of Wages Act possessed jurisdiction to determine a disputed claim arising out of the employment of opposite party No.2 in the cooperative society.

There is another significant aspect of the matter. The claim of opposite party No.2 was not apparently a simple claim involving an admitted and arithmetically ascertainable amount of wages. The petitioners have specifically disputed the very basis of the claim, the applicability of Government Order No. 735/36-3-1028 (M.W.)-76 dated 21.06.1984, the status of opposite party No.2 for purposes of the claimed benefits and the correctness and authenticity of the documents relied upon by him, described as Appendix "Aa", "Ba", "Sa" and "Da".

Section 15 of the Payment of Wages Act empowers the prescribed authority to adjudicate specified claims relating to deductions from wages or delay in payment of wages. Section 17 provides an appellate remedy against orders passed under Section 15. However, the existence of an appellate remedy does not cure an order which is fundamentally without jurisdiction. Where the original authority lacks jurisdiction over the subject matter, the question of the adequacy of the appellate remedy cannot validate the assumption of jurisdiction.

In the present case, therefore, the objection of the petitioners regarding the very competence of opposite party No.1 to entertain the proceedings could not have been brushed aside merely by treating the claim as an ordinary claim for unpaid wages. The authority was required to first satisfy itself regarding the applicability of the statutory regime and its own jurisdiction.

The contention of opposite party No.2 that the petitioners had appeared initially but subsequently failed to participate in the proceedings also does not answer the fundamental question of jurisdiction. Consent, waiver or non-participation of a party cannot confer subject-matter jurisdiction upon an authority which otherwise lacks it.

The next question concerns the allegation that the order dated 28.08.2014 was passed after transfer of the cases relating to the Devi Patan Region by administrative order dated 22.05.2014.

The petitioners have specifically pleaded that by administrative order dated 22.05.2014 the pending matters pertaining to the Devi Patan Region were transferred to the concerned authority and that, notwithstanding such transfer, opposite party No.1 proceeded to pronounce the order dated 28.08.2014. If the administrative order dated 22.05.2014 indeed covered P.W. Case No.27 of 1995, the authority thereafter could not have continued to exercise adjudicatory jurisdiction over the transferred proceeding.

This Court is conscious that an administrative distribution of work or transfer of cases has to be examined strictly in accordance with the terms of the order itself. However, the material placed before this Court, as narrated by the parties, shows that this issue was specifically raised by the petitioners in their recall application dated 24.09.2014. The issue was therefore not a collateral or irrelevant objection; it went directly to the competence of the authority which passed the order dated 28.08.2014.

Once such a specific jurisdictional objection was raised before the authority which had passed the order, the same required consideration by a reasoned order. The continued pendency of the recall application meant that a material objection concerning the competence of the original authority remained unresolved.

The failure to decide such an application assumes greater significance because the appellate proceedings were thereafter pursued and the appellate authority enhanced the monetary liability from Rs.4,09,547.68 to Rs.10,23,869.20. The appellate order dated 16.01.2016, thus, proceeded upon an original order whose jurisdictional foundation itself had been questioned and whose recall application was stated to be pending.

The appellate authority, therefore, ought to have addressed the specific objection concerning the pending recall application and the alleged transfer of jurisdiction. The appellate jurisdiction under Section 17 of the Payment of Wages Act is statutory and an appellate authority exercising such jurisdiction is required to consider the material objections which go to the validity of the order under appeal. The statutory scheme itself contemplates an appeal against orders passed under Section 15.

The next question is whether the petitioners can be denied relief merely on the ground that they failed to effectively participate before opposite party No.1.

It is true that a party who, despite due notice and opportunity, deliberately abstains from proceedings cannot ordinarily complain that the matter was decided in its absence. The principle that a litigant should not ordinarily be permitted to take advantage of his own default is well established.

At the same time, the aforesaid principle has no application where the objection raised subsequently concerns the very jurisdiction of the adjudicating authority. A jurisdictional defect is qualitatively different from a mere procedural irregularity. If an authority has no jurisdiction to entertain the subject matter, its order cannot be sustained merely because the affected party had appeared or failed to file a written statement.

In the present case, the petitioners have not confined their challenge merely to the allegation that they were absent on a particular date. They have questioned the competence of the forum itself, the applicability of the Payment of Wages Act to the employment relationship in question, the effect of the administrative transfer of the case and the pendency of the recall application. These questions were required to be examined independently.

The allegation of violation of natural justice also cannot be considered in isolation from the jurisdictional controversy. If the petitioners were indeed given a reasonable opportunity to participate but voluntarily failed to do so, the mere use of the expression "ex parte" would not invalidate the proceedings. However, where a party specifically raises a jurisdictional objection and seeks recall immediately thereafter, the authority must consider the objection in accordance with law before the consequences of the order are allowed to operate against such party.

Thus, this Court does not rest its decision solely upon the petitioners' allegation that the order dated 28.08.2014 was ex parte. The principal basis for interference is the failure to satisfactorily establish the jurisdiction of the authority under the Payment of Wages Act in view of the special statutory regime applicable to employees of cooperative societies, coupled with the failure to adjudicate the material jurisdictional objection raised by the petitioners.

The contention regarding Government Order No.735/36-3-1028 (M.W.)-76 dated 21.06.1984 also requires consideration. The claim of opposite party No.2 was substantially founded upon the rates or benefits allegedly flowing from the said Government Order. The petitioners specifically disputed its applicability to their establishment.

Once the applicability of the Government Order was specifically disputed, the authority was required to determine, as a matter of fact and law, whether the Government Order governed the service conditions of opposite party No.2. It could not merely proceed on the assumption that the rates mentioned therein were automatically applicable.

This aspect becomes particularly important because the monetary liability was subsequently enhanced by the appellate authority to Rs.10,23,869.20. A substantial monetary liability cannot be imposed merely on the basis of an unexamined assumption concerning the applicability of a Government Order. The foundation of the liability has to be established from the governing service conditions and the applicable statutory provisions.

The petitioners have also disputed the authenticity and evidentiary value of the documents described as Appendix "Aa", "Ba", "Sa" and "Da". Whether those documents were prepared by opposite party No.2, whether they formed part of the official records of the Society and whether they were sufficient to establish the alleged arrears are questions which could materially affect the determination of the monetary claim.

This Court is not, in exercise of writ jurisdiction, required to undertake a fresh accounting exercise or re-appreciate every piece of evidence as an appellate court. Nevertheless, where the very foundation of the monetary liability has been disputed and the authority's jurisdiction itself is in question, the Court cannot sustain the resulting order merely by assuming that the amount determined by the authority is correct.

The appellate order dated 16.01.2016 also deserves consideration from this perspective. The appellate authority did not merely affirm the original order but enhanced the amount payable from Rs.4,09,547.68 to Rs.10,23,869.20 and additionally provided for interest at the rate of 6% per annum in the event of delayed payment. Such enhancement necessarily required a legally sustainable determination of the underlying entitlement of opposite party No.2.

The statutory scheme of Section 17 does contemplate an appeal against a direction made under Section 15 and permits an employed person to prefer an appeal in the circumstances prescribed by the provision. Therefore, the mere filing of an appeal by opposite party No.2 was not, in itself, without authority. However, the appellate authority could not confer validity upon an order passed without jurisdiction.

The plea of availability of an alternative remedy, therefore, cannot defeat the present writ petition in the facts of this case. Ordinarily, this Court exercises restraint where an effective statutory remedy exists. But the rule of alternative remedy is a rule of discretion and not an absolute bar. Where the challenge raises a substantial question concerning lack of jurisdiction and the validity of the proceedings themselves, interference under Article 226 of the Constitution is permissible.

The plea of the respondents that the petitioners should have challenged the original order through the statutory appellate mechanism also loses much of its force in view of the specific factual circumstance pleaded by the petitioners that they had already moved the recall application dated 24.09.2014 specifically challenging the competence of the authority and seeking recall of the order dated 28.08.2014.

The Court, however, makes it clear that it is not holding that every order passed by a prescribed authority under the Payment of Wages Act against a cooperative society is automatically void merely because the establishment is registered under the Shops and Commercial Establishments legislation. The conclusion in the present case rests upon the statutory status of petitioner No.1 as a cooperative society, the special legal regime governing employment in cooperative societies, the binding principle laid down by the Hon’ble Supreme Court in the case of Ghaziabad Zila Sahkari Bank (Supra) and the failure of the authorities to properly address the jurisdictional objections raised by the petitioners.

The decision of the Hon’ble Supreme Court in the case of Ghaziabad Zila Sahkari Bank (Supra) is binding upon this Court. The Hon’ble Supreme Court expressly held that the U.P. Cooperative Societies Act, 1965 is a special enactment concerning employment in cooperative societies and that the general labour legislation stands excluded in the field governed by the special enactment. The ratio of the said judgment, therefore, directly answers the principal objection raised by the petitioners.

The respondent's submission based solely upon the registration of petitioner No.1 under the Shops and Commercial Establishments Act cannot override the aforesaid binding declaration of law. The question is not whether petitioner No.1 is subject to labour-related regulatory obligations in some respects, but whether the particular dispute concerning the monetary/service claim of its employee could be adjudicated by the authority under the Payment of Wages Act in the face of the special statutory regime governing cooperative societies.

On this issue, this Court finds that the petitioners have succeeded in establishing that the jurisdictional objection raised by them was substantial and merited acceptance. The authority ought not to have proceeded to determine the monetary claim without first resolving the question of its jurisdiction in the light of the special legislation governing the employment of opposite party No.2.

Once the original order dated 28.08.2014 is found unsustainable on the aforesaid fundamental ground, the appellate order dated 16.01.2016, which rests upon and substantially enhances the liability created by the original order, cannot independently survive.

The Court has also considered the fact that the proceedings originated in P.W. Case No.27 of 1995 and that considerable time has elapsed. The long pendency of the matter cannot, however, be a ground for sustaining an order which has been passed by an authority lacking jurisdiction or without determination of a foundational jurisdictional objection.

At the same time, nothing contained in this judgment shall be construed as a finding that opposite party No.2 has no substantive claim whatsoever against petitioner No.1-Society. This Court is concerned only with the legality and jurisdiction of the forum and orders impugned herein. If opposite party No.2 has any legally enforceable claim, the same must be pursued before the forum and in accordance with the statutory mechanism competent to adjudicate such claim.

Likewise, this Court is not required to finally determine, in the present proceedings, the correctness of the allegations concerning the documents described as Appendix "Aa", "Ba", "Sa" and "Da", nor is it necessary to undertake an independent calculation of the alleged arrears. Those questions would arise only before a forum competent in law to adjudicate the substantive claim.

In view of the foregoing discussion, this Court records the following findings:

For the reasons recorded hereinabove, the writ petition succeeds and is allowed.

The judgment and order dated 28.08.2014 passed by opposite party No.1 in P.W. Case No.27 of 1995, as well as the appellate order dated 16.01.2016 passed by the learned Additional District Judge, Gonda, are hereby quashed.

Consequently, the direction requiring the petitioners to pay the amount of Rs.10,23,869.20/-, together with the consequential direction regarding interest at the rate of 6% per annum, shall stand annulled.

So far as the prayer contained in clause (b) of the writ petition concerning the application dated 24.09.2014 is concerned, in view of the fact that the original order itself has been quashed, no separate direction for deciding the said recall application is necessary. The said application shall be treated as having become infructuous.

It is, however, clarified that the quashing of the impugned orders shall not be understood as an adjudication that opposite party No.2 has no substantive monetary or service claim against petitioner No.1. If any such claim survives in law, opposite party No.2 shall be at liberty to pursue the same before the forum competent under the applicable cooperative societies legislation and service regulations, subject to all questions of limitation, maintainability and other statutory objections being open to the parties.

In view of the considerable lapse of time, it is further clarified that nothing in this judgment shall prejudice the rights of either party in any proceeding which may independently be pending or may be maintainable before the competent statutory authority in accordance with law.

There shall be no order as to costs.