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Judgment
Satyen Vaidya, J
By way of this Letters Patent Appeal, the appellant has assailed the judgment dated 28.3.2024, passed by learned Single Judge in CWP No. 660 of 2018, whereby the writ petition filed by the petitioners therein has been allowed.
At the outset, it is noticed that the appellant has filed appeal against the judgment dated 28.3.2024 to the extent it dealt with CWP No. 660 of 2018, whereas a number of writ petitions have been decided by a common judgment. Though, the memorandum of parties in CWP No. 660 of 2018 contains the names of 91 petitioners but for the reasons best known to the appellant, he has chosen only to implead four persons as respondents in the instant appeal, besides impleadment of official respondents. The appeal on this ground alone is not maintainable; nonetheless we deem it appropriate to deal with the merits of the instant appeal in the interest of justice.
Brief factual background necessary to be noticed for the disposal of this appeal is as under:-
3.1 The petitioners in CWP No. 660 of 2018 (for short ‘the petitioners’) were engaged as Grade-IV employees in proforma respondent No.7 Bank (for short ‘the Bank’) in the year 1988. Initially, they were engaged as apprentices, however, were regularized as Office Assistant-cum-Supervisor-cum-Cashier in March, 1989.
3.2 The Bank has framed the service rules for its employees named as the “Himachal Pradesh State Cooperative Bank Employees (Terms of Employment and Working Conditions) Rules, 1979” (for short the Rules). Chapter-III of the rules deals with the classification of employees in the form of permanent, probationer, officiating, temporary, apprentice and contract basis. Chapter-IV thereof deals with different cadres of service. During the relevant period between the years 1985 to 1989, the post of Office Assistant-cum-Supervisor-cum-Cashier in the Bank was in Grade-IV.
3.3 The proforma respondent No.6 (for short ‘the Registrar’) approved amendment in the rules vide notification dated 5.11.1996 in exercise of powers under Rule 56 (1) of the H.P. Cooperative Societies Act, 1971. Rules 20 and 26, Appendix-II (D) of the rules were amended, whereby one special increment was allowed in favour of those Grade-IV employees of the Bank, who were graduates (hereinafter referred to as ‘graduation increment’). In pursuance to such amendment, the consequential benefits were released to the eligible Grade-IV employees by merger of graduation increment with basic pay.
3.4 On 27.6.2002, the Registrar further amended Rule 20 (e) of the Rules. The effect of such amendment was that the graduation increment to Grade-IV employees was not to be merged in basic pay and was to be treated as personal pay. As a result of this amendment, the Grade-IV employees engaged after amendment dated 27.6.2002 were allowed the benefit of graduation increment by treating it as a personal pay. However, the Grade-IV employees who were granted graduation increment prior to 27.6.2002 continued to reap the benefit of merger of such increment with their basic pay.
3.5 As a consequential effect of the above amendments, the juniors in the grade started drawing higher salary than their seniors. It was treated as an anomaly and the seniors in the grade were granted step-up in the pay.
3.6 With the passage of time, the petitioners who were also recipients of the benefit in consequence of amendment dated 5.11.1996 in the rules got promoted to the higher posts.
3.7 The petitioners alleged in the petitions that in the month of December, 2017, it came to their notice that the Bank had undertaken some exercise to refix their salaries and consequently certain recoveries were contemplated from them on account of grant of graduation increment in the year 1997. The petitioners submitted representation dated 7.12.2017 to the Managing Director and Chairman of the Bank pleading inter-alia not to initiate any adverse action at the fag end of the careers of the petitioners, as it would put them to huge financial hardship. It was also submitted that the Bank had granted them the benefit of graduation increment on its own and the petitioners were not at fault at any stage.
3.8 The petitioners further alleged that the respondent Bank vide communication dated 9.2.2018 informed the petitioners that their request could not be entertained by the Bank as the action contemplated against them was in pursuance to order dated 12.12.2017, passed by the Registrar. The aforesaid communication was followed by the recovery notices dated 15.2.2018 for the period w.e.f. 1.6.1997 to 31.12.2017. The salaries of the petitioners were also re-fixed.
3.9 The petitioners approached the Registrar by filing a Review Petition under Section 94 of the H.P. Cooperative Societies Act read with Order 47 Rule (1) of CPC, seeking review of order dated 12.12.2017. The Registrar dismissed the review petition of the petitioners on 24.3.2018 and thereafter, the petitioners filed the writ petitions before this Court.
The Bank in its stand before the writ Court had consistently maintained that the action of re-fixation of salaries of the petitioners and recoveries from them had its basis in the order dated 12.12.2017, passed by the Registrar.
Further, the order dated 12.12.2017, passed by the Registrar had its basis in the allegations of scam in the Bank raised by Sh. Sanjay Mandyal, appellant herein. It was alleged in the complaint dated 31.12.2005 initiated by the appellant that by grant of illegal financial benefits to the employees of the Bank, a big scam had taken place. Such allegations included the financial benefits received by the petitioners on account of graduation increment etc. On the complaint being preferred by the appellant, the Registrar had constituted a committee of three officials to enquire into the allegations. The committee furnished its report to the Registrar on 4.5.2013, inter-alia with following observations:-
“a) That the Bank granted special increments to its employees in lieu of passing graduation degree after appointment in Bank and allowed wrong stepping up of pay to the incumbents out of cadre;
b) That the Bank granted special increment to its employee after their appointment in the bank and treating it as pay anomaly; and
c) That the bank granted special increment ot its employee for passing graduation degree and merged the same in the basic pay.”
With the above observations, the committee had made its suggestion as under:-
“i) That approvals granted by the Registrar Cooperative Societies for incorporating the provision in the service Rule 20(e) for granting special increment to the employees in lieu of passing graduation degree may be reviewed in accordance of Government of India Decision No. 16 below FR 27 as per Annexure “J”.
ii) The special advance increment granted by the Bank for acquiring graduation degree is required to be regulated as per rule ibid.
iii) The senior incumbents who were not graduates and were benefited indirectly by granting the pay step up against their graduate juniors either in the same cadre or of different cadres should required be withdrawn.
iv) The each cases of grant of special increment is also should be rectified from the date of granting such increment.”
The appellant thereafter approached this Court by way of CWP No. 2055 of 2017. This Court vide order dated 13.9.2017 disposed of the writ petition filed by the appellant, without making any adjudication on merits with directions to the Registrar to decide the representation filed by the appellant. In result, the order dated 12.12.2017 of the Registrar followed.
Petitioners had labeled the order dated 12.12.2017 of the Registrar and consequent action of the Bank to be in gross violation of principles of natural justice. According to the petitioners, everything was done at their back and they were not heard at any stage. The legality of the order passed by the Registrar and consequent action of the Bank were challenged on the grounds of being arbitrary and defying settled norms of law. The petitioners had further highlighted the financial hardship being caused to them without any fault on their part. Another premise on which the relief was sought from the writ Court was that the benefits granted to the petitioners as Grade-IV employees could not be recovered after a lapse of more than twenty years, particularly when some of the beneficiaries had retired and others were at advance stages of their careers.
The learned Single Judge has upheld the contentions raised by the petitioners. It has been held that since the benefit of graduation increment was granted to the petitioners by the Bank itself by way of amendment in the rules after due approval by the competent authority i.e. the Registrar, the order dated 12.12.2017 of the Registrar could not be countenanced having valid reasons, grounds and jurisdiction. The learned Single Judge also found no fault with the petitioners in conferment of financial benefits by way of graduation increment, as they did not even face the allegation of being privy to alleged illegality. No allegation of fraud or misrepresentation has been found to be either alleged or established against the petitioners. Learned Single Judge also recorded that even the inquiry committee constituted by the Registrar had not suggested any recoveries to be effected from the petitioners. Applying the ratio of judgments passed by the Hon’ble Supreme Court in State of Punjab & others vs. Rafiq Masih & others, reported in AIR 2015 SC 696 and Thomas Deniel vs. State of Kerala & others, 2022 AIR (SC) 2153 and Madhya Pradesh Medical Officers Association vs. State of Madhya Pradesh & others, Civil Appeal No. 5527 of 2022, the learned Single Judge directed the recoveries already effected from the petitioners to be refunded, besides quashing the order dated 12.12.2017, passed by the Registrar.
We have heard learned counsel for the parties and have also gone through the record carefully.
The grounds of appeal preferred by the appellant and the submissions made by his counsel simply reiterate the allegations raised by the appellant against the bank. The impugned judgment has been challenged on the ground that the learned Single Judge has mis-appreciated the facts and material on record. The applicability of the ratio of Rafiq Masih’s case (supra) and other judgments relied upon by the learned Single Judge has also been disputed.
After having considered the entire material on record as also the submissions made on behalf of the respective parties, we do not find any reason to interfere with the impugned judgment passed by the learned Single Judge for the reasons detailed hereafter.
The view taken by the learned Single Judge is a possible view with backing of material on record. Learned counsel for the appellant could not blame the petitioners of any conduct which could be termed as fraudulent or amounting to misrepresentation.
Admittedly, the rules were amended with the concurrence of the Registrar, which paved the way for grant of benefit of graduation increment by the Bank. The amendment has remained in force throughout without being challenged by anyone. The subsequent amendment on 2002 in the Rule 20(e) of the rules also had the approval of the Registrar. It being so, the inference with the action of the Bank in merging the increment with the basic pay before amended on 2002 will not be unjustified. Noticeably, even after the submission of inquiry report, the Registrar has not reviewed any of the subject amendments in the Rules.
The learned Single Judge has rightly expressed reservations as to jurisdiction, legality and propriety of order dated 12.12.2017 of the Registrar. The Registrar had not made any adjudication on the allegations of the appellant in exercise of its statutory function under the H.P. Cooperative Societies Act. The Registrar had purportedly relied upon the recommendations made by the committee, constituted by him. We have not found anything in the recommendations made by the committee, which could be considered sufficient by the Registrar for passing the impugned order dated 12.12.2017. There is no explanation as to in exercise of which powers such a committee was constituted. It is also not clear as to what were the issues referred to such committee. Undisputedly, the committee had not sought any view from the petitioners, who in all probabilities were to be the affected persons.
No fault can also be found with the reliance placed by the learned Single Judge on the ratio of judgments, as noticed above. In our considered view also, the facts of the instant case clearly admitted the applicability of the principle of law noticed by learned single judge. The petitioners were Grade-IV employees when the benefit of graduation increment was granted to them. They were not guilty of fraud or misrepresentation that may have been instrumental in getting them the benefit of such increment or other financial benefits. A long lapse of time had occurred between the grant of financial benefits by way of graduation increment and the adverse action of recoveries and re-fixation of salaries of the petitioners. The petitioners were at the fag end of their careers.
The Bank of its own had not been interested in initiating any action against the petitioners, as can be understood from the stand taken by the Bank throughout. It has been compelled to take action by the Registrar. The fact that Bank has not come forward to challenge the judgment passed by the learned Single Judge is also evident of its intent.
It also cannot be ignored that the only sufferers of the complaint made by the appellant are the petitioners. The Registrar has not found any fault either with the management or officials of the Bank, who were instrumental in decision making. There is nothing on record to suggest that any action has been taken against any of the members of the management or decision makers in the bank. What to talk of any action against such person, even no figure of accusation has not been raised against any such person.
In light of above discussion, the appeal is dismissed and the judgment dated 28.3.2024, passed by the learned Single Judge in CWP No. 660 of 2018 along with connected matters is affirmed. Pending applications, if any, also stand disposed of.