Calcutta High Court

Limited vs The State Of West Bengal And Others on 20 May, 2022

                      In the High Court at Calcutta
                     Constitutional Writ Jurisdiction
                              Original Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                        W.P.O. No. 56 of 2014
         IA No. GA/1/2015 (Old No.GA/3881/2015), GA/5/2021

     The Calcutta Tramways Employees' Co-operative Credit Society
                                Limited
                                  Vs.
                  The State of West Bengal and others


      For the petitioner           :     Mr. Saptanshu Basu,
                                         Mr. Shibnath Bhattacharya,
                                         Mr. Abhishek Bhattacharjee.

      For the respondent           :     Mr. Soumya Majumdar,

Ms. Deblina Chattaraj.

      Hearing concluded on         :     02.05.2022

      Judgment on                  :     20.05.2022



      Sabyasachi Bhattacharyya, J:-

1. The petitioner is a registered credit co-operative society of the

employees of the erstwhile Calcutta Tramways, now under the West

Bengal Transport Corporation Limited. The grievance raised in the

writ petition was originally that the due deductions payable to the

petitioner-society by the employer company under Section 59 of the

West Bengal Co-Operative Societies Act, 2006 (hereinafter referred to

as "the 2006 Act") was withheld by the employer, as represented

through the respondent nos. 2 and 3.

2. Subsequently, some payments were made by the said respondents

pursuant to different orders passed by co-ordinate Benches of this

court and the principal dues have admittedly been cleared. However,

according to the petitioner, a major part of the interest due under

Section 59(3) of the 2006 Act has not yet been paid. Respondent nos.

2 and 3, however, assert that there are no further dues on account of

interest as well.

3. Section 59 of the 2006 Act is set out below for convenience:

"59. Deduction of dues to Co-operative, societies from members and sureties.- (1) A member of a Co-operative society may execute an agreement in favour of the Co-operative society providing that his employer or the drawing and disbursing officer where applicable shall be competent to deduct from the salaries or wages and retiring gratuity or death gratuity payable to him by such employer or the drawing and disbursing officer where applicable such amount as may be specified in the agreement and to pay the amount to the Co-operative society in satisfaction of any debt or other demands of the Co-operative society against the member. A copy of such agreement shall be furnished to the employer or the drawing and disbursing officer where applicable.

(2) Upon the execution of the agreement under sub-section (1), the employer or the drawing and disbursing officer where applicable shall on the requisition of the Co-operative society in writing and for so long as the Co- operative society does not intimate that the debt or demand has been fully paid, make the deduction in accordance with the agreement and pay the amount to the Co-operative society within fifteen days from the date of such deduction as if it were part of the wages payable by him under the Payment of Wage Act, 1936 (4 of 1936) on the date on which he makes the payment. (3) If the employer or the drawing and disbursing officer fails to make the deduction under sub-section (2) or defaults in making payment to the Co- operative society, he shall be liable to make the payment to the Co-operative society together with interest at twelve per cent per annum and the entire amount shall be recoverable from the employer or drawing and disbursing officer by the Co-operative society as an arrear of land revenue and such amount shall rank in priority in respect of the liability of the employer or drawing and disbursing officer as wages in arrear."

4. Counsel for both sides have orally argued and filed written notes of

arguments. Upon going through the pleadings, annexures thereto and

arguments, the court arrives at the following decision:

5. A moot objection taken by the respondents is that the writ petition is

for a money claim, which is time-barred and beyond the writ

jurisdiction.

6. As far as the first question is concerned, contrary to the submissions

of the respondents, the cause of action is continuing, in view of the

language of Section 59 of the 2006 Act. The employer or the drawing

and disbursing officer, as the case may be, shall upon deduction, go

on paying the amounts to the co-operative society within fifteen days

from the date of the deduction. However, the liability does not end

there.

7. In the event the employer fails to make the deduction or defaults in

making such payment to the society, he shall be "liable to make the

payment to the Co-operative society together with interest at twelve

per cent per annum and the entire amount shall be recoverable from

the employer..." by the co-operative society as an arrear of land

revenue and such amount "shall rank in priority in respect of the

liability of the employer or drawing and disbursing officer as wages in

arrear". Hence, the employer's liability, unlike an ordinary money

claim, continues to be enforceable at the instance of the society even

after the limitation period for a money suit, that is, three years.

8. Regarding the maintainability of the writ petition, the claim is against

a public authority, which is owned and controlled by the State and

comes within the purview of Article 12 of the Constitution. The

function discharged by the employer is a statutory liability. Unlike a

private employer, the employer in the present case is a public

authority which is supposed to act in every sphere as a model

employer. Moreover, the payment, including interest, is recoverable as

a "land revenue", which is in the nature of a 'public demand' under

the Public Demand Recovery Act.

9. The withholding of the dues under Section 59 of the 2006 Act is not

only a statutory violation, but, in a broader sense, infringes the

fundamental rights of freedom to profession and of life and liberty, as

enshrined under Articles 19 and 21 of the Constitution of India, of the

employees, whose interest is represented by the petitioner-society.

10. Hence, the writ court can, in exercise of its powers under Article 226

of the Constitution of India, issue prerogative writs directing

compliance of such duties of the employer.

11. Although learned counsel for the respondent nos. 2 and 3 contends

that the deductions, as claimed, do not form a part of Section 7 of the

Payment of Wages Act, 1936, which statute has been referred to in

Section 59 (2) of the 2006 Act, such contention is not tenable in the

eye of law, for the following reason.

12. Sub-section (2) of Section 59 refers to the 1936 Act in the limited

context of drawing a parallel on the quantum of wages stipulated in

such Act, and not in respect of the deductions contemplated under

the 1936 Act. The exact language of the relevant portion of sub-

section (2) is, "... make the deduction in accordance with the

agreement and pay the amount to the co-operative society within

fifteen days from the date of such deduction as if it were part of the

wages payable by him under the Payment of Wages Act,

1936..."(Italics supplied by me).

13. That apart, the respondent nos. 2 and 3 have further sought to

restrict the interest payable by them to ten per cent, which is the

interest on loan payable by the employees to the petitioner-society as

per their individual loan bonds. However, the said rate cannot be

equated or mixed up which the twelve per cent statutorily payable by

the respondent nos. 2 and 3 in terms of Section 59(3) of the 2006 Act.

14. The interest payable on the loans by the employees to the petitioner-

society arises from the liability fixed under their individual loan

bonds, whereas the twelve per cent per annum interest payable by

the respondent nos. 2 and 3 to the society is not merely intended to

cover such loan bond interest but is on an entirely different footing.

15. First, as per the arguments of respondent nos. 2 and 3 themselves,

the employer is not a party to the individual loan agreements between

the employees and their society.

16. Secondly, the ten per cent loan interest is contractual, between the

individual employees and the society, whereas the twelve per cent

interest payable by the respondent nos. 2 and 3 to the society is a

penal statutory provision, for delay on the part of the said

respondents to pay the dues of the employees' society after fifteen

days from the due date of payment.

17. Ten per cent interest on loan may be a revenue for the petitioner-

society (which is admittedly a credit co-operative society) for the

services rendered by it to its individual members, but is entirely

distinct from the twelve per cent penal interest payable by the

employer for delayed payment. The employer either already deducts

the amount from the salaries, wages, etc. of the employees statutorily

under Section 59 of the 2006 Act or neglects their duty to do so, for

which they have to pay up from their own coffers in either case. In the

event the said amount, along with twelve per cent statutory interest

for delay, is withheld by the employer after making such deductions

from the employees (or the employer neglects to do so), the same

willtantamount to unjust enrichment for the employer.

18. Insofar as the actual quantum of dues of interest is concerned, the

respondent nos. 2 and 3 have taken different stances before this

court at different points of time, but have never denied their liability

to pay. The denials, if any, are blatantly evasive. The employer has, in

fact, not quantified any specific amount which is due in lieu of

interest, despite being specifically directed to disclose the same and

its break-up vide order dated April 18, 2022 in the present writ

petition.

19. In the series of correspondence between the employee and the

petitioner-society, as annexed to the writ petition, there has been

either tacit or explicit admission of dues on the part of the employer.

20. On the other hand, the petitioner-society, in its written notes of

arguments, has clearly disclosed the due amount, supported by a

detailed break-up of calculations by a registered Chartered

Accountant. Although not on oath, which rules out the strict

applicability of the doctrine of non-traverse, the said break-up

disclosed by the petitioner has not been rebutted by any alternative

calculation by the respondents.

21. In any event, since the dues of interest disclosed by the petitioner-

society in its written notes of arguments have been computed at the

statutory rate of twelve per cent per annum and are backed up by

detailed consideration of the parts of the principal dues paid at each

stage (as borne out by the supporting detailed break-up given by a

registered Chartered Accountant), there is nothing before the court to

disbelieve such calculations.

22. Hence, WPO 56 of 2014, along withIA No. GA/1/2015 (Old No.

GA/3881/2015) and GA/5/2021, are disposed of by directing the

respondent nos. 2 and 3 and/or the employer, namely the West

Bengal Transport Corporation Limited and/or the drawing and

disbursing officer to disburse the balance due of interest at the

statutory rate of 12 % per annum till April 15, 2022, to the tune of

Rs. 16,01,95,890(rounded off to the nearest Rupee), as per the

petitioner's unrebutted calculation, to the petitioner-society as

expeditiously as possible, in four approximately equal monthly

instalments, the first of which shall be paid by June 15, 2022 and

thereafter by the 15th day of each succeeding month. The remaining

balance dues, over and above such equal monthly amounts, shall be