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Bharatpur Central Co-Operative Bank, Ltd. v. Ratan Singh And Others
Factual and Procedural Background
The petitioner is the employer (Bharatpur Central Co-operative Bank Ltd., Bharatpur) and the non-petitioner, Ratan Singh, is the employed person formerly holding the post of Assistant Executive Officer (officiating). Ratan Singh filed two applications under S.15(2) of the Payment of Wages Act, 1936 claiming unpaid wages for specified periods and increments, alleging wrongful withholding of wages. The Authority under the Act, after recording evidence, held that the reversion of Ratan Singh was bad and that the suspension order was not passed by a competent officer, and directed payment of Rs. 25,240 in total to Ratan Singh by its order dated 30 September 1982.
The employer appealed under S.17 of the Act to the District Court; the appeal was heard by the Additional District Judge II, Bharatpur, who by order dated 5 May 1984 dismissed the appeal and upheld the Authority's order. The employer filed the present revision in the High Court under S.115 of the Civil Procedure Code challenging the orders of the Authority and the Additional District Judge.
Legal Issues Presented
- Whether the High Court has revisional jurisdiction under S.115 of the Civil Procedure Code against an order passed by a District Court on an appeal under S.17 of the Payment of Wages Act, 1936 (i.e., whether the District Judge is a persona designata or whether the District Court is subordinate to the High Court).
- Whether the Authority under the Payment of Wages Act has jurisdiction to treat loss of wages resulting from suspension as a deduction within the meaning of S.7 of the Act and to investigate the legality/merits of a suspension order.
- Whether the suspension order dated 2 February 1979 (annexure 3) placing Ratan Singh under suspension was passed by an officer competent to pass such an order (i.e., whether the administrator appointed under S.36 of the Rajasthan Co-operative Societies Act, 1965, was competent to pass that suspension order in the facts of this case).
Arguments of the Parties
Employer's (Petitioner's) Arguments
- The Authority has a limited jurisdiction under the Payment of Wages Act and Explanation II in S.7(1) expressly provides that any loss of wages resulting from suspension is not to be treated as a deduction; therefore the Authority and the Additional District Judge erred in awarding full wages for the suspension period.
- The order of suspension was passed after Ratan Singh was put under suspension on 2 February 1979 and the bank paid subsistence allowance as per rules; the Authority could not investigate the cause or legality of suspension.
- Ratan Singh held the post in an officiating capacity and, having been reverted to clerk, the employer contested the substantive entitlement; the promotion was alleged improper and reversion valid.
- Reliance was placed on Lakpat Rai v. Om Prakash (A.I.R. 1960 Raj. 99) in support of the contention limiting Authority's jurisdiction to inquire into suspension.
Employed Person's (Respondent's) Arguments
- The Authority under the Act can examine whether the suspension order was passed by a competent officer; if the suspension order was passed by an officer not competent to do so, the Authority may disregard such an order.
- The Authority and the Additional District Judge properly examined the facts and reached findings that the reversion was bad and that the suspension order was not passed by a competent officer.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bhanwri Singh v. Deputy Chief Mechanical Engineer, Loco Shops, Western Railway, Ajmer, 1958 R.L.W. 420 | To support that a District Judge deciding an appeal under S.17 of the Payment of Wages Act is not a persona designata and that a revision under S.115 CPC lies to the High Court from such a District Court order. | The Court relied on this decision to reject the preliminary objection to maintainability and held that the High Court had jurisdiction to exercise revisional powers under S.115 CPC in respect of an order passed in appeal by a District Court under S.17 of the Act. |
| Lakpat Rai v. Om Prakash, A.I.R. 1960 Raj. 99 | Relied upon by the employer to support the contention that the Authority cannot investigate the cause or legality of a suspension order and that loss of wages due to suspension is not a deduction under S.7. | The opinion records reliance on this authority by the employer but does not expansively discuss its holding; the Court considered the broader statutory scheme and other authorities in determining the Authority's jurisdiction. |
| Ghose v. Dulia, 1969-I L.L.J. 194 | Referred to for the proposition that if a case is covered by an explanation to S.7, the Authority under the Payment of Wages Act will have no jurisdiction to deal with the matter because it would be a case of no deduction. | The Court cited this decision to explain that the Authority would be exercising jurisdiction not vested in it if it decided the question whether a suspension order was justified on merits where the matter falls within the Explanation to S.7. |
Court's Reasoning and Analysis
The Court proceeded in stages:
- Maintainability: The Court rejected the preliminary objection that no revision lies under S.115 CPC against an order of the District Judge in appeal under S.17 of the Act. The Court emphasized that S.17 refers to appeal to the "District Court" (not to a "District Judge" as a persona designata), that the District Court is subordinate to the High Court under S.3 of the Civil Procedure Code, and that a District Court deciding an appeal under S.17 does so as a civil Court within the meaning of S.115 CPC. The Division Bench decision in Bhanwri Singh was applied to support this conclusion.
- Scope of Authority's Jurisdiction: The Court analyzed the Payment of Wages Act, particularly S.7 and Explanation II to S.7(1), to identify the limits of the Authority's jurisdiction. The Court explained that if an issue is covered by the Explanation (i.e., loss of wages resulting from suspension is not a deduction), the Authority will have no jurisdiction to entertain the matter as a deduction. The Court referred to Ghose v. Dulia for the proposition that the Authority would exercise jurisdiction not vested in it if it decides the question whether an order of suspension is justified in law where the matter falls within the Explanation.
- Permissible Inquiry by the Authority: The Court clarified that while the Authority cannot examine the merits or legality of a competent suspension order (to treat loss of wages as a deduction), it is open to the Authority to enquire whether the suspension order was passed by an officer competent to pass such an order. If the suspension order was passed by an officer not competent, the Authority may disregard it.
- Competency of the Suspension Order in this Case: The Court examined the statutory scheme governing the employer (a co-operative society) under the Rajasthan Co-operative Societies Act, 1965. It considered S.36(1)(a) and S.36(2), which empower the Registrar to remove a committee and appoint an Administrator and provide that the Administrator shall have powers to perform the functions of the committee or any officer of the society. The Rajasthan Co-operative Societies Rules, 1966, Rule 41 sub-rules (4) and (5), authorize the Registrar to direct the committee to place an officer under suspension and require the committee to comply.
- Application of those provisions to the facts: The Registrar had issued directions (annexures 1 and 2) directing suspension of certain employees, with Ratan Singh named in appendix 2. In compliance, the Administrator Sri P.C. Jain passed the suspension order dated 2 February 1979 (annexure 3). Given S.36(2) and the Rule 41 sub-rules, the Administrator was performing the functions of the committee and was competent to pass the suspension order pursuant to the Registrar's directions.
- Conclusion on Authority's error: Because the suspension order had been validly made by a competent Administrator exercising powers under S.36 and Rule 41 (in compliance with Registrar directions), the Authority and the Additional District Judge improperly entered into the merits of the suspension and thereby exercised jurisdiction not vested in them by the Act. Consequently their orders could not be sustained.
Holding and Implications
Core Ruling: The High Court allowed the revision. The impugned orders dated 30 September 1982 (order of the Authority under the Payment of Wages Act) and dated 5 May 1984 (order of the Additional District Judge, Bharatpur) were set aside and the application filed by Ratan Singh under S.15(2) of the Payment of Wages Act, 1936, was dismissed.
Direct consequences for the parties:
- Ratan Singh's application under S.15(2) is dismissed.
- Any money received by Ratan Singh pursuant to the impugned orders must be refunded to the employer-bank (Bharatpur Central Co‑operative Bank, Ltd., Bharatpur) within three months from the date of the judgment.
- No order as to costs was made.
Broader legal implication (as articulated by the Court in this opinion): The decision reiterates that the Authority under the Payment of Wages Act has limited jurisdiction and, except to the extent of determining whether a suspension order was made by a competent authority, may not inquire into the merits or legality of a valid suspension order so as to treat loss of wages by reason of suspension as a deduction under S.7. The Court found that here the Administrator was competent under S.36 of the Rajasthan Co-operative Societies Act and Rule 41, so the Authority erred by probing the merits of that suspension.
Disposition: Revision allowed.
1. The petitioner is an employer and the non-petitioner Ratan Singh is the employed person. The revision is directed against the order of the Additional District Judge II, Bharatpur, dated 5 May, 1984, by which he upheld the order of the Authority under the Payment of Wages Act, 1936, dated 30 September, 1982, and dismissed the petitioner's appeal. By his order, dated 30 September, 1982, the authority decided two applications filed by the employed person Ratan Singh under S. 15 of the Payment of Wages Act, 1936 (hereinafter to be referred to as the Act), and directed the employer to pay a sum of Rs. 25,240 to the employed person.
2. The material facts may be noticed in brief. The non-petitioner Ratan Singh was holding the post of Assistant Executive Officer in the employer-bank, Bharatpur. He submitted two applications under S. 15(2) of the Act claiming wages for the period from July 1979 and August 1979, at the rate of Rs. 916 per month and for the period of September 1979 and June 1980, at the rate of Rs. 936 per month in his first application. He also claimed Rs. 20 as annual increment. In his second application, he claimed wages for the period from July 1980 to July 1981 at the rate of Rs. 916 per month and also claimed annual increments at the rate of Rs. 40 per month to Rs. 80 per month. It was alleged that the employer had wrongly withheld the payment of wages to the employed person. The applications were contested by the employer on several grounds. The main grounds taken by the employer were that Ratan Singh was holding the post of Assistant Executive Officer in an officiating capacity. Since his promotion was found improper, he was reverted to the post of clerk which he held in substantive capacity. He was put under suspension on 2 February, 1979, as departmental enquiry was initiated against him. The bank was paying subsistence allowance to Ratan Singh as per rules. The authority had no jurisdiction to allow wages to Ratan Singh and could not investigate the cause of suspension. Any loss of wages resulting from suspension is not to be deemed to be a reduction from wages under S. 7 of the Act. The authority after recording the evidence of the parties held:
“(1) The reversion was bad; and
(2) The suspension order was not passed by the competent officer.”
He, therefore, rejected the defences taken by the employer and allowed the applications. He directed the employer to pay a sum of Rs. 25,240 in total under the two applications to the employed person Ratan Singh. The employer went in appeal under S. 17 of the Act before the District Judge which was heard by the Additional District Judge, Bharatpur. The same contentions were raised by the employer in appeal. The learned Additional District Judge by his impugned order, dated 5 May, 1984, dismissed the appeal, and upheld the order of the authority. Aggrieved against the order of the Additional District Judge, the employer has come up in revision.
3. I have heard Sri. G.G Sharma learned counsel for the employer and Sri B. Bagri, learned counsel for the employed person.
4. The preliminary objection was raised by Sri Bagri against the maintainability of this revision. It was argued by him that the District Judge deciding an appeal under S. 17 of the Act is not subordinate to the High Court and as such no revision lies against the impugned order of the District Judge under S. 115 of the Civil Procedure Code. The contention is lifeless and bizarre. Section 17 of the Act lays down that an appeal against the order of the authority may be preferred before the District Court. The phrase used in S. 17(1) is “District Court” and not “District Judge. Needless to say that District Court is subordinate to the High Court, vide S. 3 of the Civil Procedure Code. A District Court decides a case within the meaning of S. 115, Civil Procedure Code, when it decides the appeal under S. 17 of the Act. The scheme of S. 17 as regards the appeals is that the appeal is not made to a “persona designata,” but to a Court. The District Court is not a persona designata but a civil Court subordinate to the High Court. No right of further appeal against the order of the District Court passed in appeal lies. Therefore, the High Court had got jurisdiction to exercise its revisional powers under S. 115 of the Code of Civil Procedure in respect of an order passed in appeal by a District Court under S. 17 of the Act.
5. In Bhanwri Singh v. Deputy Chief Mechanical Engineer, Loco Shops, Western Railway, Ajmer, [1958 R.L.W 420], it was held by a Division Bench of this Court that the District Judge is not persona designata under S. 17 of the Act and, therefore, a revision lies against his order to High Court under S. 115, Civil Procedure Code. The preliminary objection thus holds no water.
6. In assailing the impugned orders, it was contended by Sri Sharma, learned counsel for the employer-bank, that the authority has a very limited jurisdiction under the Act. Explanation II occurring in S. 7(1) of the Act specifically lays down that any loss of wages resulting from suspension is not deduction of wages. The employed person was put under suspension on 2 February, 1979 and he was paid subsistence allowance allowed under the rules. The Authority under the Act as well as the Additional District Judge committed grave errors in assuming jurisdiction and allowing the full wages for the suspension period. It was argued that the legality as to whether the order of suspension was proper or not and the causes for suspension cannot be investigated by the Authority under the Act. Reliance in support of the contention was placed on Lakpat Rai v. Om Prakash, [A.I.R 1960 Raj. 99].
7. Sri Bagri, learned counsel for the employed person, tried his best to sustain and support the impugned orders. It was argued by him that it is open to the Authority under the Act to see whether the order of suspension was passed by the competent officer or not. If the order of suspension was passed by an officer not competent to pass it, such an order can be disregarded by the authority. I have taken the respective submissions into consideration.
8. A look into S. 7 of the Act shows that Explanation II occurring in Sub-sec. (1) provides as to what deductions shall not be deemed to be deductions. If any case is covered by the explanation, then the Authority under the Act will have no jurisdiction to deal with the matter because in that event it will be a case of no deduction. Reference in this connection may be made to Ghose v. Dulia, [1969-I L.L.J 194], decided by a Division Bench of this Court. The position, therefore, boils down to this that the Authority under the Act would exercise jurisdiction not vested in it, if it decides the question whether the order of suspension was justified in law.
9. It is of course open to the Authority under the Act to see whether the order of suspension was passed by an officer competent to pass such an order. If the order of suspension has been passed by an officer or authority not competent to pass it, it is then open to the Authority under the Act to ignore or disregard such an order of suspension.
10. The pertinent question before me is whether the order of suspension of the employed person was passed by the officer competent to pass it. The order of suspension is annexure 3, dated 2 February, 1979, passed by Sri P.C Jain, Administrator of the employer-bank. The employer-bank is a co-operative society registered under the Rajasthan Co-operative Societies Act, 1965, The employer-bank is, therefore, governed by the provisions of this Act. Section 33 of Rajasthan Co-operative Societies Act speaks about the constitution of a committee to carry out the management of the affairs of the society. Section 36 speaks about the removal of committee or member thereof. It authorises the Registrar to remove the committee and appoint an Administrator. It would be useful to read Ss. 36(1)(a) and 36(2) which have a direct bearing on the controversy in hand:
“36. Removal of committee or member thereof.—
(1) If, in the opinion of the Registrar … the Registrar may after …
(1)(a) remove the committee and appoint a Government servant as an administrator to manage the affairs of the society and shall submit his report justifying the removal of the committee to the State Government within a period of fifteen days from the date of removal of the committee.
(2) The administrator so appointed (or the committee so nominated, as aforesaid) shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have powers to perform all or any of the functions of the committee or of any officer of the society and take all such action as may be required in the interest of the society.”
11. It appears that the committee was removed by the Registrar and an administrator to manage the affairs of the employer-bank was appointed by him. Order annexure 3 shows Sri Prakash Chandra Jain was appointed as an administrator of the employer-bank and he was performing the functions of the committee as laid down in Sub-sec. (2) of S. 36 of the Rajasthan Co-operative Societies Act.
12. The State Government has framed Rajasthan Co-operative Societies Rules, 1966, in exercise of the powers granted to it under S. 148 of the aforesaid Act. Rule 41 of these rules relates to officers and employees of Co-operative Societies. Sub-rule (4) authorises the Registrar to direct the committee to place any officer or servant of the society under suspension. Sub-rule (5) enjoins upon this committee to carry out the directions of the Registrar and place such an officer or servant under suspension forthwith. Sub-rules (4) and (5) read as under:
“41. Officers and employees of co-operative societies.— (1) to (3) … (4) Where in the course of an audit under S. 68 or an inquiry under S. 70 or an inspection under S. 71 or S. 72 it is brought to the notice of the Registrar that a paid officer or servant of a society has committed or has been otherwise responsible for misappropriation, breach of trust or other offence, in relation to the society the Registrar may, if in his opinion, there is prima facie evidence against such paid officer or servant and the suspension of such paid officer or servant is necessary in the interest of the society direct the committee of the society pending the investigation and disposal of the matter, to place or cause to be placed such paid officer or servant under suspension from such date and for such period as may be specified by him.
(5) On receipt of a direction from the Registrar under Sub-rule (4), the committee of the society shall, notwithstanding any provision to the contrary in the bye-laws, place or cause to be placed the said officer or servant under suspension forthwith.”
13. The Registrar issued orders, annexure 1, in January 1978, and annexure 2 in September 1978 directing the administrator to place those persons under suspension who had committed acts of misconduct. In appendix 2 attached with annexure 2, the name of the employed person Ratan Singh has been mentioned as an employee to be placed under suspension. It was in compliance of orders annexure 1 and annexure 2 that the administrator Sri P.C Jain passed the order annexure 3 on 2 February, 1979 placing the employed person Ratan Singh under suspension.
14. It may be recalled that the committee was removed by the Registrar and an administrator was appointed to carry out the functions of the employer-bank. The administrator under Sub-sec. (2) of S. 36 of the Rajasthan Co-operative Societies Act had powers to perform all the functions of the committee. The administrator was, therefore, fully competent under sub-rules (4) and (5) of rule 41 to pass the order of suspension in pursuance to the directions issued by the Registrar.
15. It is unfortunate that neither the authority nor the Additional District Judge dealt with the provisions of S. 36 of the Rajasthan Co-operative Societies Act and rule41 of the rules.
16. The Authority under the Act has a very limited jurisdiction. It does not lie within his jurisdiction or competency to examine the order of suspension on merits and to see whether it is justified in law or not. If the order of suspension has been passed by an officer competent to pass it, the Authority under the Act cannot examine its validity to see as to whether it was justified in law or not.
17. Here in the instant case, the Authority under the Act acted improperly and exercised jurisdiction not vested in it when it entered into the question whether the order suspending the employed person was or was not justified in law. The impugned orders cannot be, therefore, sustained.
18. In the result, the revision is allowed. The impugned orders, dated 30 September, 1982, passed by the Authority under the Payment of Wages Act, 1936, and the order of the Additional District Judge (2), Bharatpur, dated 5 May, 1984, are set aside. The application filed by Ratan Singh under S. 15(2) of the Payment of Wages Act, 1936, is hereby dismissed. The money received by Ratan Singh under the impugned orders shall be refunded by him to the employer-bank, viz., the Bharatpur Central Co-operative Bank, Ltd., Bharatpur, within three months from today.
19. No order as to costs.
20. Revision allowed.
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