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Judgment
B.S.A. Swamy, J.—In this appeal we are called upon to decide whether the employee of a Co-operative Rural Bank (a Primary Society under the provisions of A.P. Cooperative Societies Act hereinafter called ''the Act'') has to retire on attaining the age of superannuation as prescribed under the A.P. Co-operative Societies Rules (hereinafter called ''the Rules'') and the bye-laws of the society or he is entitled to be continued in service upto the age of 60 years claiming protection u/s 40(3) of A.P. Shops and Establishments Act (hereinafter called ''the Shops Act'').
The facts that are necessary for disposal of this writ appeal are as follows:-
The appellant-bank dismissed the respondent from service w.e.f. 1-9-1983 by its order dt. 31-8-1983 on the ground that the respondent while working as Secretary of the society committed grave financial irregularities and also embezzled the funds of the society. Aggrieved by the said orders he filed an appeal before the Competent Authority under the Shops and Establishments Act. In the appeal the appellant herein also brought to the notice of the authority that the respondent has to retire from service on 7-10-1993 on attaining the age of 55 years which is the age of superannuation for a primary society employee under the Rules and the question of reinstating him does not arise. The Competent Authority in a case S. & E.A. No. 15 /85 File No. A1382 / 85, dt: 15-2-1988 held that the appellant-bank failed to follow the procedure prescribed under Rule 20 of the A.P.S & E Rules, 1968, no regular enquiry was held to prove the charges levelled against the respondent and held the removal of the respondent from services by the appellant-bank as illegal and invalid. As the respondent crossed the age of superannuation during the pendency of the appeal, the Competent Authority directed the appellant-bank to pay an amount of Rs. 17,675/- as compensation for illegal termination of his services two months prior to the date of retirement. Aggrieved by the said orders while the appellant-bank filed S.A. No. 10/88, the respondent filed S.A. No. 14/88 by contending that he is entitled to continue in service as contemplated u/s 40(3) of the Shops Act before the Labour Court. The Labour Court by its judgment dated 10-6-1989 confirmed the finding of the Competent Authority to the effect that the procedure as contemplated under Rule 20 of A.P. Shops and Establishment Rules were not followed and remanded the matter to the competant Authority to dispose of the matter afresh by giving reasonable opportunity to the appellant-bank herein to prove the misconduct against the respondent and after giving fair and reasonable opportunity to the respondent to adduce further evidence, if any. On the appeal preferred by the respondent, the Labour Court felt that the provisions of the A.P. Shops and Establishments Act are applicable to the appellant-bank and u/s 40(3) of the said Act as the superannuation of an employee is fixed at 60 years with an option to him to retire voluntarily earlier under the circumstances enumerated therein remanded the matter as the Competent Authority did not consider this aspect while disposing of the matter. Questioning the common judgment of the Labour Court the employee filed W.P. No. 9858/89 on the file of this Court. This Court by its judgment dated 20-1-1993, held both the issues in favour of the respondent. Having declared that the termination order is illegal and as the respondent completed 60 years of age during the pendency of the writ petition, the learned Judge directed the appellant-bank to pay compensation for illegal termination of his services. It is useful to extract the operative portion of the order hereunder:
"In view of the termination order being illegal, the only question that should be decided by the Authority is only with regard to the payment of compensation, taking the age of superannuation as 60 years. The petitioner having completed the age of 60 years by now, no direction for reinstatement can be given. Accordingly the impugned order of the 1st respondent is partly quashed to the extent indicated above and the Authority u/s 41 of the Act will decide the compensation payable to the petitioner for illegal termination of his services by the management taking the age of superannuation as 60 years. The writ petition is partly allowed. No costs.
Aggrieved by the said order, the present writ appeal was filed by the appellant-bank. While admitting the writ appeal this Court by order dated 17-8-1993 in WAMP 1426/93 directed the appellant to pay a sum of Rs. 10,000/- subject to further orders that may be passed in the writ appeal. It is brought to our notice that the said order was complied with by the appellant-bank.
Mr. Raveendranath Reddy, Counsel appearing for the appellant-bank stated across the bar that he is not pressing very much with regard to the first limb of the order (i.e.) setting aside the order of the Labour Court in remanding the matter to the Competent Authority for purpose of giving an opportunity to the appellant-bank to prove the misconduct of the respondent. Coming to the age of superannuation, the learned Counsel strenuously contended that the learned single Judge went wrong in holding that Section 40(3) of the Shops Act fixed the age of superannuation of an employee governed by the provisions of the said Act at 60 years and in directing the appellant-bank to pay compensation for the left out service as he crossed the age of 60 years during the pendency of the writ petition. Even the judgment of his Lordship P.A. Choudary in W.P. No. 5766/87, dated 12-7-1987, on the basis of which the Labour Court as well as the learned Judge held that the age of superannuation of the respondent is 60 years, did not go to that extent. What all the learned Judge held was that the condition of service is not decisive and the Labour Court can go into the question whether the termination of an employee is for a just cause or not. At any rate the observations made by the learned Judge were set aside by the Supreme Court in SLP No. 40630/87, dated 27-11-1989 and the Division Bench of this Court while considering the validity of the order passed by the learned single Judge after setting aside the observations of Justice Choudary by the Supreme Court held that the Authority u/s 41(1) of the Shops Act has no jurisdiction whatsoever either to question or decide the validity of any settlement entered into between the management and the Union u/s 18 of the Industrial Disputes Act-vide M/s. Allied Sales Corporation, Secunderabad v. The Authority u/s 41 of the Shops & Establishment Act 1990 (1) ALT 594 (reported in 1990(1) ALT 594). Following the same analogy, the Authorities specified under the Shops Act cannot go into the vires of a statutory Rule framed by the Government in exercise of rule making power u/s 130 of the Act. We entirely agree with the contentions raised by the learned Counsel for the appellant-bank.
The learned Judge while adverting to the contentions of the employee that because Clause 13 of the settlement entered into between the management and the Union u/s 18 of the I.D. Act which prescribed the age of retirement at 55 years is contrary to the provisions of the Shops Act which confers a right on the employee to continue in service upto 60 years, observed as follows:
"From the language of Sub-section 3 of Section 40 of the Act he attempted to derive support for this submission. But I don''t think the submission is correct. Sub-section 3 of Section 40 gives an option to the employee to give up his employment and claim gratuity. That sub-section says that if the employee has completed the age of 60 years he may give a notice to his employer of atleast one month of his intention to give up his employment and that in other cases where he is physically or mentally unfit and wants to retire on medical grounds or wants to resign from the service, he may give just 15 days notice of his intention to give up his employment".
Having held so the learned Judge proceeded to observe that the conditions of service are not decisive and the Competent Authority can go into the question whether the termination of the services of an employee is for a reasonable cause or not. At the same time, the learned Judge made it clear that the employee cannot complain that the termination is bad merely because he is not yet 60 years. The learned Judges of the Supreme Court while disposing of the SLF 40630/87 filed against that Judgement clearly held as follows:
"We are of the opinion that most of the observations made by the learned single Judge are uncalled for and unwarranted in the circumstances of the case."
Hence any observations made by the learned Judge are of no assistance to the respondent. The judgment of his Lordship Justice Choudary was reversed by the Division Bench of this Court after disposal of the SLP by the Supreme Court in Writ Appeal No. 190/89 dated 27-2-1990 reported in 1990(1) ALT 594. In para 13 of the judgment, the learned Judges observed as follows:
"Even P.A. Choudary, J. has held against the workman, that it does not. In fact, this question is not in dispute before us even now......."
After setting out the observations made by the Supreme Court in SLP No. 14630/87, dt. 27-11-1989, the Hon''ble Judges observed that the finality that could be attached to the observations of P.A. Choudary, J. no longer hinders us and this Court can go into the question whether the Authority could decide that the settlement entered into u/s 18(1) of the Industrial Disputes Act, fixing the age of superannuation at 55 years could be held to have been executed for the workmen under pressure, misrepresentation or coercion of the management. In Para 14 of the judgment their Lordships considered the powers of the authority constituted u/s 41(1) of the Act and it may be useful to extract the said para in this judgment hereunder:
"Now the Authority constituted u/s 41 (1) of the Act is an authority with very limited jurisdiction. It can only decide in the first appeal whether a termination by the management is valid or not and is within the parameters of Section 40 of the Act. The said Authority, in our view, has absolutely no jurisdiction to decide whether a settlement entered into u/s 18(1) of the Industrial Disputes Act between the representatives of the Workmen and of the Management, is vitiated by undue influence or misrepresentation or coercion on the part of the Management. The Authority, namely, the Asst. Commissioner of Labour, was never intended by the A.P. Legislature to have jurisdiction to go into the question of the validity of a settlement arrived at u/s 18 of the Industrial Disputes Act by an Industrial Court. That Parliament has, in fact, constituted Industrial Courts under the Industrial Disputes Act with extensive powers cannot be disputed. What we mean to say is that the Authority u/s 41(1) of the A.P. Act has no jurisdiction whatsoever either to question or to decide about the validity of any such settlements. If parties to a settlement have a grievance about the validity of a settlement, it is for them to agitate the matter before the appropriate forum and they cannot ask an Authority constituted u/s 41(1) of the A.P. Shops and Establishments Act, 1966 with limited jurisdiction, to go into any such question and, that too, incidentally while deciding whether retirement as per the contract of employment, is legal or not."
Having surveyed the case law on this aspect, their Lordships held in Para 22 as hereunder:
"In any event, those decisions do not hold that an employee could go in first appeal before the Authority u/s 41(1) of the Shops Act against an order of retirement which is in conformity with the age set out in a settlement earlier entered u/s 18(1) of the Industrial Disputes Act, and contend before that Authority that the settlement is vitiated by undue influence or coercion and seek either to set aside the settlement or obtain a declaration that the settlement is not binding on the workman. If the Authority under the Shops Act decides, as in this case, that such a settlement is voidable and not binding on the workman, it must be held that such a declaration is wholly without jurisdiction."
We fully agree with the reasoning given in the above judgment of this Court and we have no hesitation to hold that both the Appellate Authority as well as the learned Judge went wrong in observing that the Shops Act gives a right to the employee to continue in service upto the age of 60 years de hors the conditions of service governing his employment. The scope of enquiry u/s 41(1) of the Shops Act is very limited one and it has to see whether the termination order passed by the management is valid or not and is in accordance with the procedure prescribed u/s 40 of the Act and the Rules made thereunder. But this Authority has no jurisdiction to decide whether the conditions of service prescribing the age of superannuation is in accordance with law or not.
Coming to the facts and circumstances of this case, the appellant-bank came into existence under the provisions of the A.P. Co-operative Societies Act and it is governed by the Act, the Rules made thereunder. Any application filed seeking registration of the society under Sections 6 and 7 of the Act shall be accompanied by four copies of the proposed bye-laws of the society. Under Rule 4 of the Rules, the Registrar is competent to frame model bye-laws for each class or classes of societies and suggest modifications from time to time. Under Rule 5(24) of the Rules the bye-laws should provide for method of-recruitment, the conditions of service and the authority competent to fix, revise or regulate the scales of pay and allowances of paid officers and servants to the society and the procedure to be followed in the disposal of disciplinary cases against them. u/s ll6(c) of the Act the society is having power to fix the staffing pattern, qualifications, pay scales and other allowances for its employees with prior approval of the Registrar of Co-operative Societies. u/s 130 of the Act, the Government is empowered to make rules for carrying out all or any of the purposes of this Act for the whole or any part of the State and for any class of societies. In exercise of rule making power, the Government issued A.P. Co-op. Societies Rules in G.O.Ms. No. 1941 F & A, dated 27th July, 1964. As per Rule 28 no society shall appoint any person as its paid officer or servant in any category of service, unless he possesses the qualifications and furnishes the security as specified by the Registrar, from time to time, for such category of service in the society or for the class of societies to which it belongs. We need not advert to the sub-rules as they are not relevant to decide the issue in question except Rule 28(5) that specifies the age of retirement which is as follows:
"Notwithstanding anything contained in the bye-laws/special bye-laws, service regulations or common cadre regulations of the Co-operative Societies, every paid servant and officer of a society, other than those in the last grade service, shall retire from service on the afternoon of the last date of the month in which he attains the age of 55 years."
The age of retirement was enhanced to 58 years in G.O.Ms. No. 563, F & A (Co-operative IV), dated 8th November, 1984, w.e.f. 23-8-1984. From this it is evident that the Statutory Rules themselves prescribed the age of superannuation for an employee working in a Co-operative Society and the authority constituted u/s 41(1) of the Shops Act cannot go into the wisdom of the rule making authority in fixing the age of superannuation and it is beyond its scope of enquiry under the Act. In this case on the date when the petitioner retired (i.e.) attained the age of 55 years on 7-10-1983, the age of superannuation stands at 55 years and the respondent has to retire on the last day of the month in which he attained the age of superannuation. Hence the judgment of the learned single Judge to the extent of giving direction to the Competent Authority to fix the compensation payable by the appellant for illegal termination of the services of the respondent taking the age of superannuation of the respondent at 60 years is set aside and confirmed the same on other aspects.
The learned Counsel for the appellant even before commencement of the arguments made a statement across the bar that the appellant-bank is prepared to pay the emoluments due to the respondent till he attained the age of 55 years which was the age of superannuation at that time and we accordingly direct the appellant-bank to pay the balance amount due to the respondent after deducting the amount of Rs. 10,000/- paid under the orders of this Court dt. 17-8-1993 in WAMP No. 1426/93.
The Writ Appeal is partly allowed to the extent indicated above. No costs.