Bombay High Court
Solapur District Central ... vs Addl. Labour Commissioner (I/C) ... on 27 September, 2016
Bench: R.M. Savant
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.9311 OF 2016
Solapur District Central Co-operative ]
Bank Employees Union, Solapur, ]
i.e. The Solapur Zilla Madhyavarti Sahakari ]
Bank Karmachari Sanghatana; ]
Solapur ]
(Representative and Recognized Union) ]
Through General Secretary, ]
Bhausaheb Sandipan More, ]
Solapur Zilla Madhyavarti Sahakari Bank, ]
207/8/9 Gold Finch Peth, Solapur
ig ]..Petitioner
Versus
1. Addl. Labour Commissioner (I/C), ]
Addl. Registrar, Trade Union, ]
Pune Division Pune. ]
To be served through Office of ]
Government Pleader, State of ]
Maharashtra, High Court, ]
Appellate Side. ]
2. The Solapur Zilla Sahakari Bank ]
Karmachari Sanghtana, ]
Santichitra Apartment, ]
Block No.302, Murarji Peth, ]
Near Dhood Pandhari, Solapur. ]..Respondents
Shri. S. C. Naidu i/by Shri. N. G. Helekar for the Petitioner.
Ms. Nayana Buch i/by Shri. S. K. More for the Respondent No.2.
CORAM : R. M. SAVANT, J.
JUDGMENT RESERVED ON : 02.09.2016
JUDGMENT PRONOUNCED ON : 27.09.2016
JUDGMENT
1 Rule. With the consent of the Learned Counsel for the parties
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made returnable forthwith and heard.
2 The writ jurisdiction of this Court is invoked against the
order dated 19.07.2016 passed by the Learned Member of the Industrial
Court, Solapur, by which order, the Appeal filed by the Petitioner being
Appeal (ICTU) No.01 of 2012 came to be dismissed and resultantly, the
order dated 23.10.2012 passed by the Respondent No.1 herein i.e. the
Additional Registrar, Trade Union/Additional Labour Commissioner came
to be confirmed.
3 The facts giving rise to the above Petition can in brief be
stated thus :-
The Respondent No.2 herein and the Petitioner are Unions
operating in the Solapur District Central Co-operative Bank Ltd., Solapur.
The Respondent No.2 filed an application on 04.08.2010 before the
Registrar Trade Unions, by the said application, the cancellation of the
registration of the Petitioner Union was sought on the ground of various
irregularities committed by it. It was the case of the Respondent No.2
that in committing the said irregularities, the Petitioner Union which is
representative Union had not only contravened the provisions of the
Trade Unions Act, 1926 (For short "the said Act"), the Maharashtra Trade
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Union Regulations, 1927 (For short "the Regulations") but also the bye
laws of the said Union. The gist of the irregularities alleged were to the
following effect. That the Petitioner Union did not get the accounts
audited since 2002 to 2007 from an approved/authorized auditor and
therefore there was violation of Section 28, that the General Secretary
has kept with him cash exceeding Rs.200/- and therefore there was
violation of bye law 26, that the number of members claimed by the
Petitioner Union did not tally with the number of members mentioned in
the yearly returns which were submitted by the Petitioner Union, that the
Petitioner Union had collected monthly subscription of Rs.5/- instead of
Rs.2/- which was in violation of its bye laws, that one Shri. B. S. More
was appointed as the General Secretary of the Petitioner Union though
not entitled to be a member as he is working as a Assistant Manager/
Deputy Manager the same was therefore in violation of the bye laws of
the Respondent Union, that the elections were not held from the year
2002 to 2007 and the yearly meeting not conducted.
4 It seems that after the filing of the application, the Additional
Registrar, Trade Unions i.e. the Respondent No.1 herein issued notices to
the Petitioner Union on 20.10.2010 and 10.11.2010. In spite of the said
notices, the Petitioner Union did not remain present. As a result of which
a show-cause notice under Section 10(b) of the said Act came to be
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issued on 03.12.2010 asking the Petitioner Union that it should submit its
reply within 60 days. It seems that the Petitioner Union failed to file any
reply to the said application. As a result of which, the Respondent No.1
passed an order on 17.02.2011 and cancelled the registration of the
Petitioner Union. It appears that in so far as the reply filed by the
Petitioner Union is concerned, the same was filed on 04.02.2011 in the
office of the Respondent No.1. However, the same was produced before
the Respondent No.1 on 07.03.2011 after the order cancelling the
registration came to be passed on 17.02.2011. The Petitioner Union
thereafter challenged the said order dated 17.02.2011 before the
Industrial Court, Solapur by filing an Appeal which was numbered as
Appeal No.01 of 2011. The Learned Member of the Industrial Court,
Solapur set aside the order passed by the Respondent No.1 dated
27.01.2012 and remanded the matter back to the Respondent No.1 for a
de-novo consideration of the application by giving opportunity to the
parties. The said order came to be challenged by way of a Writ Petition in
this Court. However, the said Writ Petition came to be dismissed by a
Learned Single Judge by order dated 10.08.2012 and the order of
remand passed by the Industrial Court accordingly came to be confirmed.
5 On remand, the Respondent No.1 issued a fresh notice to the
Petitioner Union calling upon it to file its reply. The Petitioner Union
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accordingly filed its reply dated 04.10.2012 to which were annexed
various documents which inter-alia included the audit reports for the
year 2002 to 2007 carried out on 26.05.2011, the minutes of the meeting
of the managing committee of the Petitioner Union, wherein a decision
was taken to hold elections which minutes are dated 22.02.2014 and the
minutes of the meeting of the general body held on 28.03.2004. The
Respondent No.1 herein considered the said documents and held that the
allegations made by the Respondent Union were proved. The Respondent
No.1 further held that the same amounted to a wilful contravention of
the Act and the Rules and therefore the registration of the Petitioner
Union was required to be cancelled. In so far as the audit reports were
concerned, the Respondent No.1 adverted to the fact that the Petitioner
Union had submitted accounts audited by one Shri. P. J. Pandit who was
not an auditor covered by the provisions of Section 10 of the said Act
who could carry out audit in respect of the Petitioner Union. In so far as
the audit reports submitted by the Petitioner Union which audit was
carried out by a Chartered Account is concerned, the Respondent No.1
did not take cognizance of the same in view of the fact that the said audit
was carried out for the year period 2002 to 2007 at one go on
25.06.2011. In so far as the elections are concerned, the Respondent No.1
came to a conclusion that elections were not held since the year 2002. In
so far as the increase in subscription is concerned, the Respondent No.1
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held that the Petitioner Union is collecting subscription at the increased
rate without there being any amendment which provides that the
subscription to be at Rs.2/- per annum. In so far as Shri. B. S. More being
an office bearer of the Petitioner Union is concerned, the Respondent
No.1 observed that Shri. B. S. More was an Assistant Manager/Deputy
Manager and therefore held a post higher than that of Chief Officer and
therefore was not eligible to be a member of the Petitioner Union much
less being an office bearer. In so far as said Shri. B. S. More keeping petty
cash of more than Rs.200/- is concerned, the Respondent No.1 observed
that the audit report shows that against the name of Shri. B. S. More
huge amounts have been mentioned, for which there is no explanation
from the Petitioner Union. As indicated above, the Respondent No.1
therefore arrived at a conclusion that the Petitioner Union has wilfully
contravened the provisions of the said Act, the Regulations and its bye
laws and therefore its registration is required to be cancelled and
accordingly passed the order dated 23.10.2012.
6 The Petitioner Union aggrieved by the said order dated
23.10.2012 filed an Appeal before the Industrial Court, Solapur which
was numbered as Appeal (ICTU) No.01 of 2012. The said Appeal was
heard by the Learned Member of the Industrial Court, Solapur who has
by the impugned order dated 19.07.2016 dismissed the same. The
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Learned Member of the Industrial Court whilst dismissing the Appeal has
confirmed the findings of the Respondent No.1 on the said five grounds
which have been adverted to hereinabove. However whilst dismissing the
Appeal, the Learned Member of the Industrial Court has observed that
though the Petitioner Union was having the knowledge about the filing of
the application for cancellation of its registration by the Applicant Union,
it did not contest the matter nor did it produce the record, and produce
evidence before the Respondent No.1. The Learned Member has adverted
to the recording made by the Respondent No.1 in his order which is to
the effect that in spite of opportunities being granted to the Petitioner
Union between 09.04.2012 to 20.09.2012 but except filing the
say/explanation on 02.02.2011 and 04.10.2012 nothing was done by the
Petitioner Union to rebut the allegations made against it by the
Respondent Union. The Learned Member of the Industrial Court held that
whatever material was produced by the Petitioner Union has been
considered by the Respondent No.1 whilst passing the impugned order.
The Learned Member of the Industrial Court concluded that the material
on record shows that the Respondent Union has proved that there is
wilful contravention of the provisions of the said Act as well as the
Regulations and the bye laws of the Respondent Trade Union. The
Learned Member held that the order passed by the Respondent No.1 was
just, legal and proper and does not require any interference and
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accordingly dismissed the Appeal by the impugned order.
7 Submission of the Learned Counsel for the Petitioner
Shri. S. C. Naidu :-
A) That the Petitioner has submitted its audited accounts from
year to year as mandated by Section 28 of the said Act
through Shri. P. J. Pandit who is a grade-I officer working
with the Solapur District Central Co-operative Bank. The said
audited accounts are for the year 2002 to 2007. It is on
account of the objections raised by the Respondent No.1 i.e.
Petitioner Union that out of abundant caution the accounts
were re-audited through a Chartered Accountants Firm
which re-audited accounts have been submitted during the
course of the hearing of the application.
B) That the default if any in filing the audited accounts in the
facts and circumstances of the case cannot be said to be
wilful default which could attract the penalty of cancellation
of the registration. Reliance is placed on the judgment of a
Learned Single Judge of this Court reported in 1996(2)
Mh.L.J. 10 in the matter of Saraswat Co-op. Bank
Employees' Union Vs. State of Maharashtra and others and
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the judgment of a Division Bench of the Rajasthan High
Court reported in 1998-III-L.L.J. (Suppl.) 1226 in the
matter of Registrar of Trade Unions and Joint Labour
Commissioner (H.Q.) Vs. Lake Palace Hotel Karya Karta
Union & Another as also the judgment of a Learned Single
Judge of this Court reported in 1993 Mh.L.J. 1081 in the
matter of Tata Electric Companies Officer Guild Vs.
Registrar of Trade Unions.
C) That the material relating to the factum of the elections
being held on 28.03.2004 was placed before the Additional
Registrar as also before the Industrial Court, however the
Additional Registrar as well as the Industrial Court in spite of
the said material being placed has proceeded on a erroneous
premise that no material was placed by the Petitioner Union.
D) That the decision having been taken to enhance the subscription
from Rs.2/- to Rs.5/-, the amendment to the Constitution
was a mere formality, that no member had made any
grievance in respect of the said enhancement of subscription
as the subscription was being paid by the check off system.
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E) That in respect of retention of cash by Shri. B. S. More,
General Secretary of the Petitioner Union, the authority
below i.e. the Additional Registrar, Trade Union and the
Industrial Court have misread the statement of accounts. The
statement of accounts clearly show that no cash was retained
by Shri. B. S. More and in fact cash was brought in by Shri.
B. S. More by way of subscription.
F)
That the Respondent No.1 did not have the locus-standi to
file the application under Section 10 of the said Act, as the
same can only be filed by the Union for cancellation or
withdrawal of registration.
G) That the penalty of cancellation of registration is too harsh in
the facts and circumstances of the case. Reliance is placed on
the judgment of a Learned Single Judge of this Court
reported in 1998(2) L.L.N. 752 in the matter of Tata
Memorial Hospital Workers' Union and another Vs.
Madhukar S. Wani and others as also on the judgment of a
Learned Single Judge of the Madras High Court reported in
1994 II CLR 135 in the matter of Leather and Leather
Goods Democratic Labour Union Vs. First Additional
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Registrar of Trade Union I (Deputy Commissioner of
Labour, Madras).
8 Submissions on behalf of the Learned Counsel appearing
for the Respondent No.2 Ms. N. D. Buch :-
I) That there is a discrepancy between the membership claimed
by the Petitioner and the actual membership found on
verification.
II) That the accounts being audited by Shri. P. J. Pandit who is
not a person contemplated by Rule 18, the said audit reports
are of no consequence. The subsequent audits by a Chartered
Accountant firm for the years 2002 to 2007 is all at one go,
which is done on 25.06.2011. The said audit reports cannot
be accepted and hence there is a contravention of the Act
and the Regulations.
III) That the documents filed by the Petitioner itself demonstrate
that there is a discrepancy in the date of the elections,
whereas in one set of audit reports it is mentioned that the
elections were held in the year 2003, in another set, it is
mentioned that the elections were held in the year 2004.
Hence, the objection raised on the said ground has been
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rightly upheld by the authority below and the Industrial
Court.
IV) From the list produced by the Solapur District Central Co-
operative Bank which gives the hierarchy of posts in the
Solapur District Central Co-operative Bank. It is ex-facie clear
that the post of Assistant Manager/Deputy Manager is higher
than the post of Chief Officer and therefore Shri. B. S. More
was not entitled to be a member of the Petitioner Union and
consequently General Secretary of the Petitioner Union.
Hence, there is contravention of the Constitution of the
Petitioner Union.
V) That in respect of the amount shown against the name of
Shri. B. S. More in the audited accounts, no explanation has
been given by the Petitioner.
VI) That without amending its Constitution, the Petitioner raised
the subscription from Rs.2/- to Rs.5/- which is therefore
against the Constitution.
VII) That the application filed by the Respondent No.1 is
maintainable under Section 10 having regard to the language
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of Section 10 of the said Act.
VIII) That the authorities below i.e. the Additional Registrar Trade
Unions and the Industrial Court having recorded findings of
fact on the various grounds of objection this Court in its writ
jurisdiction under Article 227 of the Constitution of India
ought not to interfere with the impugned order.
CONSIDERATION
9 Having heard the Learned Counsel for the parties, I have
considered the rival contentions. Before proceeding to deal with the
contentions raised on behalf of the parties, it would be necessary to refer
to the statutory framework within which the above Petition is required to
be adjudicated. The Act in contention is the Trade Unions Act, 1926, the
Maharashtra Trade Union Regulations, 1927 and the relevant bye laws of
the Constitution of the Petitioner Union which Constitution is referable to
Section 6 of the said Act. The application for cancellation of registration
has to be filed under Section 10 of the said Act. Sections 6 and 10 of the
said Act are reproduced hereinunder for the sake of ready reference :-
"6. Provisions to be contained in the rules of a Trade
Union.- A trade union shall not be entitled to registration
under this Act, unless the executive thereof is constituted in
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accordance with the provisions of this Act, and the rules
thereof provide for the following matters, namely:-
(a) the name of Trade Union;
(b) the whole of the objects for which the Trade Union has
been established;
(c) the whole of the purposes for which the general funds
of the Trade Union shall be applicable, all of which
purposes shall be purposes to which such funds are
lawfully applicable under this Act;
(d) the maintenance of a list of the members of the Trade
Union and adequate facilities for the inspection thereof by
the [office-bearers] and members of the Trade Union;
(e) the admission of ordinary members who shall be
persons actually engaged or employed in an industry with
which the Trade Union is connected, and also the
admission of the number of honorary or temporary
members as [office bearers] required under section 22 to
form the executive of the Trade Union;
[(ee the payment of a subscription by members of the
Trade Union which shall be not less than -
(i) one rupee per annum for rural workers;
(ii) three rupees per annum for workers in other
unorganised sectors; and
(iii) twelve rupees per annum for workers in any other
case].
(f) the conditions under which any member shall be
entitled to any benefit assured by the rules and under
which any fine or forfeiture may be imposed on the
members;
(g) the manner in which the rules shall be amended, varied
or rescinded;
(h) the manner in which the members of the executive and
the other [office-bearers] of the Trade Union shall be
[elected] and removed;
[(hh) the duration of period being not more than three
years, for which the members of the executive and other
office-bearers of the Trade Union shall be elected];
(i) the safe custody of the funds of the Trade Union, and
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annual audit, in such manner as may be prescribed, of the
accounts thereof, and adequate facilities for the inspection
of the account books by the [office-bearers] and members
of the Trade Union; and
(j) the manner in which the trade union may be dissolved."
"10. Cancellation of Registration.- A certificate of
registration of Trade Union may be withdrawn or cancelled
by the Registrar-
(a) on the application of the Trade Union to be verified in
such manner as may be prescribed, or
(b) if the Registrar is satisfied that the certificate has been
obtained by fraud or mistake, or that the Trade Union has
ceased to exist or has wilfully and after notice from the
Registrar contravened any provision of this Act or allowed
any rule to continue in force which is inconsistent with any
such provision, or has rescinded any rule providing for any
matter, provision for which is required by section 6;"
10 A reading of Rule 6 therefore discloses that the Union
seeking registration has to provide for the Constitution of the Executive
according to the provisions of the Act, and also has to make Rules to
provide for matters mentioned in the said Section. In the instant case, the
Petitioner Union has framed its Constitution providing for the matters
mentioned in Section 6. In terms of Section 10, the cancellation of the
certificate of registration or withdrawal of the said registration is on the
application of the Trade Union to be verified in such manner as may be
prescribed or if the Registrar is satisfied that the certificate has been
obtained by fraud or mistake, or that the Trade Union has ceased to exist
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or has wilfully and after notice from the Registrar contravened any
provision of this Act.
11 In so far as the audited returns are concerned, the same are
to be sent annually to the Registrar on or before such date as may be
prescribed. The same are to be in respect of all receipts and expenditure
during the year ending 31st December on the preceding subscribed date.
The relevant excerpt of the said provision is reproduced hereinunder :-
"28. Returns.-(1) There shall be sent annually to the
Registrar, on or before such date as may be prescribed, a
general statement, audited in the prescribed manner, of all
receipts and expenditure of every registered Trade Union
during the year ending on the 31 st day of [December] next
preceding such prescribed date, and of the assets and
liabilities of the Trade Union existing on such 31 st day of
[December]. The statement shall be prepared in such form
and shall comprise such particulars as may be prescribed.
(2) Together with the general statement there shall be
sent to the Registrar a statement showing all changes of
[office bearers] made by the Trade Union during the year
to which the general statement refers, together also with
copy of the rules of the Trade Union corrected up to the
date of the despatch thereof to the Registrar."
In terms of sub Section (2) of Section 28 of the said Act, the Union is
required to send to the Registrar a statement showing all changes made
by the Trade Union in respect of its office bearers during the year to
which the general statement refers. In so far as the Maharashtra Trade
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Unions Regulations, 1927 are concerned, Regulations 17 and 18(3) are
material and are reproduced hereinunder :-
"17. Annual returns.-(1) The general statement to be
furnished under section 28 shall be submitted to the
Registrar by the 30th day of April in each year and shall be
in Form "1".
(2) For the purpose of satisfying himself that the
information contained in the general statement furnished
under sub-regulation (1) is correct, the Registrar may
require any registered Trade Union to produce before him
any documents or to furnish such information or may make
or may authorise any person to make such investigation as
he thinks necessary.
18. Audit.-(1)..............
(2)................
(3) Where the membership of a registered
Trade Union did not at any time during the year ending on
the 31st day of December exceed 1,000 the annual audit of
the Accounts may be conducted-
(a) by any two persons holding office as a
magistrate or a judge or as a councillor of any municipality
or member of a district local board or of either Chamber of
the provincial or Central Legislature;
(b) by any person who, having held an appointment
under the Central Government in any audit or accounts
department, is in receipt of pension from the Central
Government of not less than Rs.75 a month; or
(c) by any auditor appointed to conduct the audit of
co-operative societies by the Provincial Government or by
the Registrar of Co-operative Societies or by any Provincial
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co-operative organization recognized by the Provincial
Government for this purpose."
12 In so far as the Constitution of the Petitioner Union is
concerned, the definition of "Employee" and bye law (3) relating to
membership is relevant and is reproduced hereunder :-
"Employee" Means any person below the rank of Chief
Officer serving in the Sholapur Dist. Central Coop. Bank
Ltd., Sholapur and other Co-op. Bank situated in the
Solapur District local areas."
"3) MEMBERSHIP
The membership of the Union shall be open to all the
employees serving in the Co-operative Banks situated in
Solapur District to which B.I.R. Act is applicable.
a) Any person employed in the Banking Industry in
the local area of the Solapur District and who has obtained
age of 18 years shall be entitled to become an ordinary
member of the Union on payment of Admission fee Rs.1/-
and monthly subscription of Rs.2/- provided be agrees to
abide by rules and Bye-laws that may be made by the Union
from time to time.
b) The Executive Committee may refuse admission
to, or cancel the membership of a peson who acts in
manner prejudicial to the interest of the Union or any other
way is an undesirable person, provided that in case of
cancellation of membership, the member concerned shall
be notified in writing, giving 3 days time, to explain his
misconduct.
c) The person who is refused admission or whose
membership is cancelled may appeal to the General
Meeting and the decision of the General Meeting is final.
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d) The Union shall remove from the members list
names of those who have died, withdrawn from the union
or ceased to be members under any provision of the
constitution.
e) A person who comes to be a member of the
Union shall forthwith be disentitled from exercising the
rights of a member and shall have no claim on the funds
and benefits of the Union."
13 Now coming to the application for cancellation is concerned,
the same was filed on 04.08.2010 by the Respondent No.1 herein inter-
alia on a number of grounds which are mentioned in the said application.
However ultimately the grounds were restricted to the grounds which
have been mentioned hereinabove. In so far as the application is
concerned, two notices were issued to the Petitioner Union on
20.10.2010 and 10.11.2010. In spite of the notices being issued to the
Petitioner Union, it did not remain present as a consequence of which a
show-cause notice under Section 10(b) of the said Act came to be issued
on 03.12.2010. In the said show-cause notice, the Petitioner Union was
informed that it should submit its say within 60 days. It appears that the
Petitioner filed its reply on 02.02.2011 however it seems that the said
reply reached the office of the Respondent No.1 on 05.02.2011 and was
not placed before the Respondent No.1 when he decided the matter in
the first round on 07.02.2011 thereby allowing the said application and
cancelling the registration of the Petitioner Union as a registered Trade
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Union. The Petitioner Union thereafter filed an Appeal before the
Industrial Court being Appeal No.1 of 2011. The Learned Member of the
Industrial Court allowed the said Appeal and set aside the order passed
by the Labour Court and remanded the matter back to the Respondent
No.1 for a de-novo consideration of the application for cancellation. The
said order of the Industrial Court is dated 27.01.2012. Though a fresh
notice was not required to be issued to the Petitioner Union having
regard to what had already transpired in the past, the Respondent No.1
however issued a fresh notice to the Petitioner who thereafter filed a
reply on 04.10.2012. To the said replies, the Petitioner produced
statement of the audited account by a Chartered Accountants firm for the
period 2002 to 2007. The material relating to the elections which took
place on 28.03.2004, which material was apart from the statement of the
list of office bearers which was annexed to the audited statement of
accounts. Hence in so far as the Petitioner is concerned, though belatedly
it had sought to place the material on the basis of which it sought to
counter the allegations made against it of the contravention of the Act,
Regulations and the bye laws, in the matter of non-submission of the
audited accounts, not holding of elections etc.
14 The Respondent No.1 in his impugned order has held that
the audit carried out by Shri. P. J. Pandit could not be accepted as he was
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not authorised to do so in terms of Regulation 18. In so far as the
subsequent audit is concerned, the Respondent No.1 held that the same
also could not be accepted as the audit was sought to be done for the
entire period i.e. 2002 to 2007 at one go. In so far as the elections are
concerned, the Respondent No.1 held that since there is a discrepancy in
the record, the case of the Petitioner that the elections were held, could
not be accepted. This was the finding of the Respondent No.1 on the
aforesaid two objections or grounds taken by the Respondent No.1 herein
in respect of the other grounds also, the Respondent No.1 held against
the Petitioner. In so far as the Learned Member of the Industrial Court is
concerned, on the said two issues, the Learned Member has held that
there is a contravention of the provisions of Regulation 18 of the
Regulations by the Petitioner in the matter of carrying out the audit
through Shri. P. J. Pandit. The Learned Member has referred to the
affidavit filed by Shri. P. J. Pandit dated 07.07.2012, in which affidavit he
has stated that he is not a Chartered Accountant and that he is not
authorized to carry out the audit and has done so under the pressure of
the Petitioner Union. In so far as the holding of elections is concerned,
the Industrial Court held that since the last election was held in the year
1999-2000 and since no evidence was produced nor explanation given by
the Petitioner Union, the finding of the Respondent No.1 that there is
violation of Section 6 of the said Act as well as bye law 13 and 22 of the
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Constitution of the Petitioner Union, cannot be faulted with. In so far as
the other issues are concerned, the Learned Member of the Industrial
Court confirmed the findings of the Respondent No.1.
15 It would now be necessary to deal with the grounds on
which the cancellation of the registration of the Petitioner is sought.
Taking the last ground first, namely i.e. Whether the
Respondent No.2 i.e. the Applicant before the Respondent No.1 has
the locus-standi to file the application.
The answer to the same lies in Section 10 of the said Act.
Section 10 postulates an application for cancellation or withdrawal to be
filed by the Trade Union to be verified in such manner as may be
prescribed. Hence in so far Section 10(a) of the said Act is concerned, an
application can be filed by the Trade Union itself for its withdrawal or
cancellation of registration. Now coming to Section 10(b), the same
confers the power on the Registrar of Trade Unions if he is satisfied that
the certificate has been obtained by fraud or mistake or that the Trade
Union ceased to exist or has wilfully and after notice from the Registrar
contravened any provisions of the Act. Hence, the cancellation has to be
in the circumstances mentioned in Section 10(b) of the said Act. Apart
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from an application, he can also take cognizance if any complaint is
brought before him suo moto under the said provisions. Having regard to
the grounds which are mentioned in Section 10(b), it is not possible to
accept the contention urged on behalf of the Petitioner that under Section
10(b) also the application has to be by the Trade Union concerned. It is
impossible to accept the situation where the Trade Union itself applies to
the Registrar for cancellation on the ground that the said certificate of
registration has been obtained by fraud or mistake or that the Trade
Union has wilfully contravened any provisions of the said Act. Hence
under Section 10(b) either the Registrar has to act suo-moto or on the
basis of an application received by him where the grounds contained in
Section 10(b) are alleged. If an interpretation sought to be given by the
Learned Counsel for the Petitioner is to be accepted, then Section 10(b)
would be turned otiose as no Trade Union can be expected to complain
against itself. Hence the application filed by the Respondent No.1 was
maintainable.
16. Discrepancy between the membership claimed and the
membership found on verification :-
On verification of the documents, it is found that the
membership of the Petitioner Union for the period 2002-2007 is found
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varying, than the claim made for the particular year. This is sought to be
attributed to the fact that the same is on account of the fact that some
members have not paid their subscription for the particular year. In my
view, the said stand cannot be accepted in view of the fact that it is the
case of the petitioner that the subscription was recovered by the check off
system, and that no member had any grievance about the enhanced
subscription. The said fact only proves that the Petition is not aware of its
exact membership and therefore reflects on the manner in which the
affairs of the Petitioner are being conducted.
17. Non-submission of the audited accounts for the period
2002 to 2007 :-
In so far as the said ground is concerned, it is required to be
noted that the Petitioner had submitted the accounts audited by Shri. P. J.
Pandit for the year 2002 to 2007. It is in view of the objection raised by
the Respondent No.1 that the Petitioner got accounts re-audited for the
year 2002 to 2007 through the firm of a Chartered Account. The same
was carried out in one go as can be seen from the audited account which
all bear the date 25.06.2011. In terms of Regulation 18 of the said
Regulations, the accounts of the Petitioner which has a membership not
exceeding Rs.1000/- has to be carried out through an auditor of the class
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mentioned in the said provision. There is no dispute about the fact that
Shri. P. J. Pandit was not such an auditor as contemplated by the said
provision. The Petitioner sought to make amends by getting the accounts
audited through a Chartered Accountant, but the same was done, as
indicated above, all at one time i.e. 25.06.2011. The audited statement of
the particular years were therefore not submitted as contemplated by the
Act and the Regulations. The question therefore is whether there is a
contravention of the provisions of Section 28 of the said Act, the
Regulations and whether for such a breach, the penalty of cancellation of
registration is to be visited on the Petitioner.
18 Ground of elections not being held since the year 2002 :-
As per bye law 12 of the Constitution, the elections to the
Managing Committee has to be held every three years. In so far as the
said ground is concerned, the audited statements of accounts have been
submitted by the Petitioner. In the said audited statements of accounts for
the year 2002 to 2007 submitted through Chartered Accountant Shri. D.
V. Barpute & Co. is annexed the list of office bearers of the Petitioner
Union for the relevant years. Except for two years i.e. 2005 and 2006 in
rest of the audited statements of those particular years the elections are
shown to be held on 28.03.2004. Only for the years 2005 and 2006 the
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elections have been shown to be held in the year 2003. However in spite
of the said material being on record and though the years in contention
as per the application filed by the Respondent No.1 Union were the year
between 2002 to 2007, the Respondent No.1 herein has erroneously
proceeded to consider whether the elections were held upto the year
2009. The material placed on record by way of the minutes of the
managing committee dated 22.02.2014 as also minutes of the general
body meeting on 28.03.2004 support the case of the Petitioner that the
elections were held on 28.03.2004. The Respondent No.1 therefore
appears to have proceeded on an erroneous premise that the elections
were not held after 2002. The said finding therefore appears to be
contrary to the aforesaid material which is on record.
19 Shri. B. S. More though not entitled to be a member has been
discharging duties of the General Secretary :-
As per the Constitution of the Petitioner Union, an
"employee" is a person holding a post below that of Chief Officer of the
Solapur District Central Co-operative Bank. Hence only such employee
can be a member of the Petitioner Union. In the instant case, there is no
dispute about the fact that Shri. B. S. More was holding the post of
Assistant Manager/Deputy Manager which in the hierarchy of the posts
available in the Solapur District Central Co-operative Bank are higher
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than the post of Chief Officer and therefore Shri. B. S. More was not
entitled to become a member of the Petitioner Union much less to be its
General Secretary.
20 Cash in excess of Rs.200/- retained by Shri. B. S. More as
General Secretary :-
In terms of bye-law 26 of the Constitution, the General
Secretary of the Petitioner Union cannot retain cash exceeding Rs.200/-.
In the instant case, the Respondent No.1 on the basis of the audited
accounts has come to a conclusion that the said Shri. B. S. More was
holding cash to the extent of Rs.15,000/- and therefore there is a
violation of the said Regulation. The said finding was sought to be
questioned by the Learned Counsel appearing on behalf of the Petitioner
by contending that the amount shown against the name of Shri. B. S.
More is the amount brought by Shri. B. S. More by way of subscription to
the Union and is not cash which has been retained by Shri. B. S. More.
However, no such explanation has been forwarded in the reply filed by
the Petitioner Union and it is for the first time in the above Writ Petition
that such an explanation is sought to be given. The Respondent No.1 was
therefore right in coming to a conclusion that the Petitioner Union has
not given any explanation for the said huge amount being shown against
the name of Shri. B. S. More in the audited statements of accounts. Since
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the Petitioner Union is a representative Union, it is expected that it shows
transparency and probity in its affairs and therefore the conduct where
no explanation is given, cannot be countenanced.
21 After dealing with each of the grounds on which the
application filed by the Respondent No.1 was founded as above, the
conclusion that is reached is that there is a contravention of Section 28
and Regulation 17 in the matter of filing audited returns, there is
contravention of the Constitution of the Petitioner Union in the matter of
Shri. B. S. More holding the post of General Secretary, as also a breach of
bye law 26 of the Constitution in the matter of large amounts being kept
with Shri. B. S. More though in terms of the said clause, the General
Secretary is not entitled to keep more than Rs.200/- in cash. Though the
ground of the elections not being held since the year 1999 cannot be held
against the Petitioner. It would have to be said that the Petitioner has just
about managed to come out of the clutches of the said ground. However,
the fact remains that the elections were held in the year 2004 when in
fact the elections were due in the year 2002 itself. The elections held
were also unopposed. Though the period beyond 2007 is not in
contention, however, from the record it appears that no elections have
been held after the year 2004. The facts relating to the elections therefore
reflect poorly on the affairs of the Petitioner especially having regard to
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the fact that it is a representative Union and therefore a certain amount
of transparency and probity in its affairs is expected especially having
regard to the fact that it is the representative of the employees in
collective bargaining.
22 The question that arises is as to penalty/punishment which
the Petitioner Union is to be visited. The test laid down by Section 10(b)
of the said Act is of wilful contravention. The word "wilful" has been
interpreted to mean knowingly, intentionally or deliberately. It would
therefore have to be seen whether the contravention of the Act or the
Constitution as alleged by the Respondent No.1 is wilful on the part of
the Petitioner. In so far as the non-submission of the audited accounts is
concerned, the Petitioner Union was aware of the fact that in terms of
Regulation 18, Shri. P. J. Pandit was not authorized to carry out the audit
of its accounts. However in spite of the same, for the period in contention
i.e. years 2002-2007, the audit was got done through Shri. P. J. Pandit
who is admittedly not the designated person in terms of the said
Regulation 18. It is in fact admitted by Shri. P. J. Pandit that he is not a
Chartered Accountant but an officer working with the Solapur District
Central Co-operative Bank and was forced to carry out the audit by the
Petitioner. The subsequent audit carried out through the firm of
Chartered Accountants namely M/s. D. V. Barpute and Company would
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be of no avail as the said audit has been carried out at one go i.e. on
26.05.2011 for the entire period from 2002-2007. Hence the Petitioner
Union can be said to have contravened the provisions of the Act, the
Regulations and the Constitution though aware of the same and therefore
the said contravention would have to be held to be wilful.
23 In so far as the ground of Shri. B. S. More holding the post of
General Secretary is concerned, clause (3) of the Constitution of the
Petitioner Union stipulates as to who can be a member of the Petitioner
Union. The said clause provides that a person holding the post above the
Chief Officer in the Solapur District Central Co-operative Bank cannot be
a member of the Petitioner Union. In spite of the said provision, Shri. B.
S. More who was admittedly holding the post of Assistant Manager and
thereafter Deputy Manager which were above the post of Chief Officer,
could not have been enrolled as a member much less appointed as the
General Secretary. The said contravention in the teeth of the stipulation
in the Constitution is therefore wilful.
Now coming to the ground of Shri. B. S. More retaining the
amount in excess of Rs.200/-. The audited accounts of the Petitioner
Union show large amounts being shown against the name of Shri. B. S.
More as a loan. There is absolutely no explanation from the Petitioner in
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respect of the said amounts. The Respondent No.1 has also observed that
as per the evidence produced by the Complainant Union the amount of
Rs.3,50,000/- was required to be deposited in the account of the
Petitioner as per law but was not done so and misappropriated. In the
absence of any explanation, the retention of such huge amounts by Shri.
B. S. More without any explanation from the Petitioner can be said to be
wilful breach of bye law 26 of the Constitution of the Petitioner. In so far
as the contravention in respect of non-filing of audited accounts, Shri. B.
S. More holding the post of General Secretary and retaining cash more
than Rs.200/- are concerned, apart from they being wilful, they can also
said to be blatant.
In so far as the collection of enhanced subscription is
concerned, though it is the case of the Petitioner Union that a resolution
has been passed enhancing the subscription, but the fact remains that the
Constitution has not been amended and without amending the
Constitution, the subscription at the enhanced rate is being collected. The
aforesaid fact therefore also does not speak well as regards the manner in
which the affairs of the Petitioner Union are being conducted. Hence the
upshot of the above discussion is that some of the grounds on which the
application filed by the Respondent No.1 as above would have to be
sustained and it would have to be held that there is a wilful
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contravention of the said Act, the Resolutions and the Constitution of the
Petitioner Union. The contravention of the Constitution indirectly
amounts to breach of the Act as the Constitution has been framed as per
the requirement of Section 6 of the said Act.
24 Now coming to the judgments on which reliance is placed on
behalf of the Petitioner in Tata Memorial Hospital Workers' Union and
another's case (supra), since a judicial proceeding was already pending
based on the self same allegations which had formed the basis of the
order passed by the Registrar Trade Unions cancelling the registration of
the Petitioner Union, a Learned Single Judge of this Court had set aside
the order cancelling the registration on the said ground as the Learned
Judge was of the view that it is in the said proceedings that the issue
would be decided.
In Tata Electric Companies Officer Guild's case (supra), a
Division Bench of this Court in view of the fact that the mistake in
submitting the returns for the wrong year was corrected immediately,
held that there was no wilful contravention of the act and therefore set
aside the cancellation of registration. Similar is the position in Saraswat
Co-op. Bank Employees' Union's case (supra), where another Division
Bench of this Court did not find the contravention to be wilful as the
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return was filed on the date of the passing of the order.
In Leather and Leather Goods Democratic Labour Union's case
(supra), in the facts of the said Act a Learned Single Judge of the Madras
High Court held that the contravention was not wilful and therefore set
aside the cancellation of the registration of the Union.
In Registrar of Trade Unions and Joint Labour Commissioner
(H.Q.)'s case (supra), the Division of the Rajasthan High Court held that
before cancellation, a second show-cause notice was required to be
issued. The Division Bench however further held that where
contravention is of a different kind one single notice of two months may
be sufficient.
In Chairman, All India Railway Recruitment Board and
another's case (supra), the Apex Court was considering the application of
the Wednesbury principle and the principle of proportionality, to the
judicial review of an administrative order. In the said case, the Railway
Recruitment Board had taken a decision to cancel the written
examination and to conduct a re-test for recruitment to group 'D' posts
for those candidates who had obtained minimum qualifying marks in the
first written examination against which large scale of irregularities and
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malpractices were noticed. The decision to hold the re-test was therefore
in contention before the Apex Court as the High Court had held that
there was no illegality in going ahead with the recruitment process
confining investigation to 62 candidates against whom there were serious
allegations of impersonation. The Apex Court in the facts of the said case
came to a conclusion that the decision of the Railway Recruitment Board
to conduct a re-test satisfies the Wednesbury test as also the
proportionality test.
25 In the instant case, the power of the Respondent No.1 to
cancel the registration of a Union is circumscribed by the statutory
provisions. It is only if the circumstances as mentioned in Section 10 of
the said Act exists that the said power can be exercised. The penalty is
also provided by the statute, and is required to be imposed having regard
to the nature and extent of the contravention. The order passed by the
Respondent No.1 has therefore partakes the character of a quasi-judicial
order which is amenable to an Appeal under the said Act. In my view
therefore the judicial review of the order passed by the Respondent No.1
as confirmed by the Appellate Court i.e. the Industrial Court would be on
different parameters than an administrative order. Hence stricto-senso the
Wednesbury principle and the proportionality principle would not apply.
However in the facts of the present case, the order passed by the
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Respondent No.1 as confirmed by the Appellate Court cannot be said to
be unreasonable, neither the penalty or punishment can be said to be
disproportionate to the contravention proved. For the conclusion that
this Court has reached, namely that there is a wilful and blatant
contravention of the Act, the Regulations and the Constitution, this Court
confirms the findings of the authority below, as also the Industrial Court.
The impugned orders therefore do not suffer from any error of
jurisdiction or any other illegality or infirmity for this Court to interfere in
its writ jurisdiction. The Writ Petition is accordingly dismissed. Rule is
discharged with parties to bear their respective costs.
[R. M. SAVANT, J]
After pronouncement of Judgment
At this stage, the Learned Counsel for the Petitioner seeks
continuation of the ad-interim order dated 18.08.2016 as clarified by the
order dated 07.09.2016 which is operating in the above Petition. In the
facts and circumstances of the case, the said ad-interim order is
continued for a period of eight weeks from date.
Date:- 27.09.2016 [R. M. SAVANT, J]
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