2007 (1) TMI 623 - SC - Companies Law

2018 (7) TMI 1741 - HC

Issues Involved:
1. Jurisdiction of the Additional Labour Commissioner (ALC) under Section 6H of the U.P. Industrial Disputes Act, 1947.
2. Applicability of the U.P. Cooperative Societies Act, 1965 versus the U.P. Industrial Disputes Act, 1947.
3. Validity of the agreement dated 23.01.2001 for ex-gratia payment.
4. Powers of the Registrar under Section 128 of the U.P. Cooperative Societies Act.
5. Finality and binding nature of the Registrar's orders under Section 128.
6. Res judicata concerning previous High Court directions.
7. Legality of ex-gratia payments under Regulation 42 of the U.P. Cooperative Societies Employees Service Regulations, 1975.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Additional Labour Commissioner (ALC) under Section 6H of the U.P. Industrial Disputes Act, 1947:
The Supreme Court held that the ALC's jurisdiction was wrongly invoked and his order dated 15.03.2003 under Section 6H of the U.P. Industrial Disputes Act, 1947 was without jurisdiction, null, and void. The Court emphasized that the U.P. Cooperative Societies Act, 1965, being a special enactment, prevails over the U.P. Industrial Disputes Act, 1947.

2. Applicability of the U.P. Cooperative Societies Act, 1965 versus the U.P. Industrial Disputes Act, 1947:
The Court reiterated the principle that a special enactment (U.P. Cooperative Societies Act, 1965) should prevail over a general enactment (U.P. Industrial Disputes Act, 1947). The Court cited several precedents to support this view, including "The Co-operative Central Bank Ltd. v. The Additional Industrial Tribunal, Andhra Pradesh" and "R.C. Tiwari v. M.P. State Co-operative Marketing Federation Ltd."

3. Validity of the agreement dated 23.01.2001 for ex-gratia payment:
The Court found that the agreement dated 23.01.2001 was not a valid settlement under the law. It was not signed by the Secretary (CEO) of the Cooperative Society as required under Section 31(2)(d) of the U.P. Cooperative Societies Act and did not comply with the requirements of Section 2(t) of the Industrial Disputes Act or the U.P. Industrial Dispute Rules. The agreement was also contrary to the repeated orders of the Registrar under Section 128 disapproving ex-gratia payments.

4. Powers of the Registrar under Section 128 of the U.P. Cooperative Societies Act:
The Registrar has the power to annul any resolution passed by the Committee of Management or the general body of any cooperative society if it contravenes the provisions of the Act, rules, or bye-laws. The Registrar's orders dated 07.03.2001, 19.03.2001, and 22.06.2001, requiring the Board of Directors to reconsider and annulling the resolutions for ex-gratia payments, were statutory and binding.

5. Finality and binding nature of the Registrar's orders under Section 128:
The Court emphasized that the Registrar's orders under Section 128 are final and binding as no appeal was filed under Section 98 of the U.P. Cooperative Societies Act, and no arbitration reference was made under Sections 70 and 71. The ALC and the High Court wrongly disregarded these statutory orders.

6. Res judicata concerning previous High Court directions:
The Court noted that the High Court had previously directed the ALC to reconsider the matter in light of the Registrar's annulment order. The workmen did not object to the propriety or legality of the Registrar's order at that time, thus barring them from doing so later under the principle of res judicata.

7. Legality of ex-gratia payments under Regulation 42 of the U.P. Cooperative Societies Employees Service Regulations, 1975:
Regulation 42 requires the Registrar's permission for any pecuniary incentive or allowance to be given to employees. The ex-gratia payments made without such permission were illegal. The Court concluded that the ex-gratia payments were not enforceable under the U.P. Industrial Disputes Act, 1947, as they were governed by the U.P. Cooperative Societies Act, 1965, and the relevant regulations.

Conclusion:
The Supreme Court set aside the impugned judgment of the High Court and allowed the appeals filed by the bank and the State of U.P. The Court held that the employees are not entitled to ex-gratia payments from now onwards, although payments already made need not be recovered.

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