Railway Employees Consumer Co-op. Society vs Union of India (UOI) and Others

K.S. Radhakrishnan, J.—Question that has come up for consideration in this case is whether the Central Government is the appropriate Government u/s 2(a) of the Industrial Disputes Act, 1947 for referring the dispute between the petitioner society and the third respondent u/s 10 of the I.D. Act to the Labour Court, Ernakulam.

This writ petition is filed by the Southern Railway Employees Consumer Co-operative Society Ltd. Society is registered under the Kerala Co-operative Societies Act, 1969. The area of operation of the society is between Cochin Harbour Terminus to Vallathol Nagar, Ernakulam Junction to Kottayam, the Ernakulam Goods and Ernakulam Junction to Alleppey. The membership of the society shall be open to the railway staff residing within its area of operation. The society is running a consumer store as well as a ration shop. Third respondent was appointed as salesman-cum-attender of the petitioner-society and he joined duty on May 30, 1991. He was drawing a monthly salary of Rs. 1460/-. Since ration shop was running at a loss, society decided to surrender the ration shop to the department of Civil Supplies. Third respondent being the junior most salesman-cum-attender, the services of the third respondent were sought to be terminated. Accordingly a notice dated May 27, 1994 was issued to him u/s 25 of the I.D. Act. Third respondent received the notice on May 28, 1994 and also the retrenchment compensation service of the third respondent was accordingly terminated on June 30, 1994.

Third respondent, however, on February 16, 1995 submitted a representation before the second respondent, the Assistant Labour Commissioner (Central), to initiate conciliation proceedings so as to reinstate him in service, without back wages and other benefits. Second respondent, therefore, issued notice to the petitioner to hold a joint discussion u/s 12 of the I.D.Act. A preliminary objection was raised by the petitioner- society before the 2nd respondent stating that second respondent has no jurisdiction to initiate any proceedings under the I.D. Act, since the dispute is between a society registered under the Kerala Co-operative Societies Act and third respondent. Since the dispute between third respondent and petitioner could not be resolved, second respondent sent a failure report to the first respondent. First respondent then issued an order dated July 16, 1996 in exercise of its powers under Clause (d) of Sub-section (1) and Sub-section (2A) of Section 10 of the I.D.Act, referring the following dispute to Labour Court, Ernakulam:

"Whether the action of the President, Southern Railway Employees Consumer Co-operative Society Ltd. under Southern Railway in terminating the services of Sh. M.V. Raju is legal and justified? If not, to what relief the workman concerned is entitled?"

The main contention raised by counsel for the petitioner, Ms. Aysha Youseff, is that respondents 1 and 2 have no jurisdiction to conciliate the dispute or refer the matter to Labour Court, Ernakulam, u/s 10 of the I.D.Act. According to her, the appropriate Government to refer the dispute to the Labour Court is not the Central Government, but the State Government, since the petitioner is society registered under the Kerala Co-operative Societies Act.

Counsel for the third respondent on the other hand contended that since the petitioner is a society of employees of the Southern Railway, Central Government has got jurisdiction to refer the dispute to Labour Court, Ernakulam u/s 10 of the I.D. Act.

In order to resolve the controversy, the scope of Section 10 of the I.D. Act as well as the nature of petitioner-society will have to be examined. It is not disputed that petitioner is a society registered under the Kerala Co-operative Societies Act, 1969. Even though members of the society are railway staff, that will not make the society coming under railway administration. Supreme Court has considered a similar question with regard to employees of the Railway Consumer Co-operative Stores at Rajahmundry in Union of India (Railway Board) and Ors. v. Subhaiah and Ors., AIR 1996 SC 2890 . In that case, employees of Railway Consumer Cooperative Stores filed an application before the Central Administrative Tribunal seeking a declaration that they are regular Railway employees in Class III posts. Negativing the said contention, the Supreme Court held as follows:

"17. It is seen that service conditions of the employees, officers and servants of the Stores/Societies are not regulated by the Railway Administration. They are governed by the bye-laws of the Societies, subject to control and sanction by the Registrar under the State Act or the relevant provisions. There is no obligation on the part of the Railway Administration to provide security for those employees. The disciplinary control by the society concerned is subject to other laws and is exclusively domestic in character. The Indian Railway Establishment code is not applicable to them. Their appointment is subject to bond prescribed by the Registrar. The arrears of funds or misappropriated amounts, etc., are recoverable under the provisions of the State Act, and the Rules made thereunder. The service of the staff are liable to termination in terms of the State Act, Rules and bye-laws".

Petitioner-society even though consists of staff of the Southern Railway as members, the staff of the society are not railway employees. The employees of the Co-operative Societies are governed by the provisions of the Co-operative Societies Act, Rules and bye-laws and they are not railway employees. Only if they are the employees of the Railway, then only the question of referring the matter by the Central Government will arise, u/s 10 of the I.D. Act. Only with regard to enumerated categories u/s 10, the appropriate Government is the Central Government and in all other cases, appropriate Government is the State Government. Petitioner is a registered society under the Kerala Co-operative Societies Act. Therefore the appropriate Government is not the Central Government, but the State Government.

Therefore, I am of the view that the reference made by the Central Government cannot be sustained in the eye of law. Accordingly, Ext.P9 is quashed and O.P. is allowed. However this judgment will not stand in the way of the third respondent agitating his claim before the appropriate authorities.