Gujarat High Court
The Junagadh Commercial Co. Op. ... vs Hinaben B Pandya on 22 August, 2022
Bench: A.Y. Kogje
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13747 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 13748 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 13749 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 13750 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.Y. KOGJE
==============================================================
1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
================================================================
THE JUNAGADH COMMERCIAL CO. OP. BANK LTD & 1 other(s)
Versus
HINABEN B PANDYA & 2 other(s)
================================================================
Appearance:
ADVOCATE NOTICE SERVED for the Petitioner(s) No. 2
MR ND SONGARA(2198) for the Petitioner(s) No. 1
MR RAJIV K DESAI(3351) for the Petitioner(s) No. 1
MR P C CHAUDHARI(5770) for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2,3
===============================================================
CORAM:HONOURABLE MR. JUSTICE A.Y. KOGJE
Date : 22/08/2022
ORAL JUDGMENT
[1] This group of petitions are arising out of the similar fact
situation and are raising identical issues and hence, with the
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
consent of both the parties, all the matters are taken up for joint
hearing and disposal. The facts are extracted from Special Civil
Application No.13747 of 2017.
[2] Rule returnable forthwith. Learned advocate Mr.
P.C.Chaudhary waives service of rule on behalf of respondent No.1.
[3] Learned advocate appearing for the petitioners submit that
the petitioner No.1 is a bank which has taken over Rushika Mahila
Nagrik Co-operative Bank, represented by the Administrator-
petitioner No.2 herein. On account of such merger, the petitioners
have filed the present petition challenging the order, firstly of the
Labour Court in T. Application No.24 of 2004 which came to be
disposed of by the award of the Labour Court No.4, Ahmedabad
dated 03.11.2008 and also the order of the Industrial Court No.5,
Ahmedabad dated 07.04.2016 in Appeal (IC) No.64 of 2008 in T.
Application No.24 of 2004 and Appeal (IC) No.3 of 2012 in T.
Application No.24 of 2004. It appears that the order of the Labour
Court was challenged by both the parties i.e. to say bank as well as
employee.
[4] Learned advocate appearing for the petitioners submitted that
the petitioner No.1 bank cannot be saddled with the responsibility of
petitioner No.2-bank as the petitioner No.1-bank was not a party
before the Labor Court when the application by the Labour Court
was considered. It is submitted that the order of challenge before
the Labour Court was an order of terminating the services of the
respondent-employee on account of some irregularity and therefore,
as the petitioner No.1-bank was not at all concerned with the
procedure that was adopted by the petitioner No.2-bank, the
petitioner No.1 bank cannot be held responsible.
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
[4.1] Learned advocate for the petitioners submitted that before
the Labour Court at the fag end of the litigation, the petitioner No.1-
bank did make an application for joining as a party in the appeal
proceedings however, the contentions raised by the petitioner No.1
bank regarding the facts of the case being covered by the
conditions of merger and accordingly, the case of the respondent-
employee could not be considered going beyond the terms of
merger. This aspect though argued has not been considered by the
Industrial Tribunal while upholding the order of the Labour Court.
[4.2] Learned advocate for the petitioners submitted that at best the
petitioner No.1 bank could be held responsible only to the extent of
liability till the date of merger and after the date of merger only the
terms of merger would govern and therefore, award requires to be
interfered with. In any case, accepting the liability of the
respondent-employee till the date of merger, the petitioners have
already deposited the dues of the petitioners as per the award of
the Labour Court to the extent of 25% back wages ordered.
[5] As against this, learned advocate appearing for the
respondent-workman has opposed the petition by submitting that
the issue of merger was never the case even before the Industrial
Tribunal and even in the pleadings before this Court. The issue of
merger and application of terms of merger have not been raised by
the petitioners and the challenge is only on the ground of merits,
where otherwise also the petitioners have failed to make out any
error in the order of the Labour Court or the Industrial Tribunal.
Learned advocate thereafter, drew attention of this Court that even
as per the Clause-5 of the merger, clearly the liability has shifted on
the shoulders of the petitioner No.1-bank as per the terms of such
merger and now the petitioner No.1 cannot escape the liability as
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
per the terms of merger. It is also submitted that the contention
with regards to Clause-7.3 of terms of merger would also be of no
consequence in view of the fact that with the passage of time, three
of the petitioners have already attained the age of superannuation
and one of the petitioners is on the verge of retirement. It is
submitted that no jurisdictional error is pointed out by the
petitioners either by the pleadings or during the course of argument
and therefore, concurrent findings of two authorities may not be
interfered with.
[6] The Court has heard rival submissions of the parties and
perused the documents placed on record. The petitioner No.1-bank
had entered into an agreement for merger, copy of such scheme of
merger and amalgamation is placed on record at Annexure-D.
[7] By way of scheme of merger and amalgamation, the petitioner
No.2-bank had merged with the petitioner No.1-bank. The relevant
clause for the purpose of this petition would be Clause-5 and Clause-
7 which would read as under:-
5. LEGAL PROCEEDINGS:
If any suit, appeal or other proceedings of whatever nature (hereinafter
called "the. Proceedings") by or against the Acquired Bank be pending,
the same shall not abate, be discontinued or be in any way prejudicially
affected by the acquisition of the undertaking of the Acquired Bank or
of any thing contained In the Scheme, but the proceedings may be
continued, prosecuted and enforced by or against the Acquirer Bank in
the same manner and to the same extent as it would or might have
been continued, prosecuted and enforced by or against the Acquired
Bank as If the Scheme had not been made. On and from the effective
date, the Acquirer Bank shall and may initiate any legal proceedings for
and on behalf of the Acquired Bank.
7. ACQUIRED BANK'S STAFF, WORKMEN AND EMPLOYEES:
All the Staff, 'Workmen and other Employees in the service and on the
Pay Roll of the Acquired Bank immediately before the acquisition of the
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
undertaking under the Scheme shall stand terminated from effective
date and shall not be termed as Staff, Workmen and Employees of the
Acquirer Bank. Accordingly:
7.1 The Acquired Bank shall discharge' all their liabilities and
obligations towards such terminated Staff, Workmen and Employees
and the expenses on this count shall be ‚made good by way of
adjustment to the' Profit and Loss Account of the Acquired Bank;
7.2 The terminated Staff, Workmen and Employees of the Acquired
bank shall be given priority by the Acquirer Bank while making fresh
recruitment for carrying out operation of the Acquired Bank;
7.3 The recruitment shall be made by the Acquirer Bank only on the
receipt of necessary application from the terminated Staff, Workmen
and Employees of the "Acquired Bank within thirty days from the
effective date and such recruitment shall be made after conducting
interview by the Board of Directors of the Acquirer Bank, In due course.
7.4 Though it is not Intended by the Acquirer Bank to offer less
favourable designation / Cadre to the terminated Staff, Workmen and
Employees .of the Acquired Bank while recruiting them, all such fresh
recruited: Staff, Workmen and Employees shall be governed under the
terms and conditions of service applicable to the Staff, Workmen and
Employees of Acquirer Bank;
7.5 The Staff, Workmen and Employees so recruited by the- Acquirer
Bank shall be placed as junior most in the Seniority List of the Acquirer
Bank."
[8] From the chronology of event, it appears that the respondent
who was employed with the petitioner No.2-bank and undisputedly
had discharged the service for substantial period was terminated by
a communication which is placed on record at Exh.15 by referring to
Resolution No.105 of the board meeting dated 25.12.2003, the
services of the respondent were brought to an end w.e.f.
26.12.2003. This was subject matter of challenge before the Labour
Court in T. Application No.24 of 2004 by the respondent-employee.
It appears that initial the contention was raised by the petitioner
No.2 bank that the provisions of Bombay Industrial Relation Act (for
short "BIRA") would not be applicable and that the petitioner No.2
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
bank had its own rules and regulations, pertaining to the
employment however, today, while arguing the matter, the
petitioners have not persuaded the contention of applicability of
BIRA.
[9] It appears that the Labour Court has therefore, partly allowed
the application by order dated 03.11.2008, wherein step of the
petitioner No.2-bank for terminating the service of the respondent-
employee w.e.f. 26.12.2003 was set aside. The respondent was
ordered to be reinstated and the back-wages to the extent of 25%
was ordered to be paid.
[10] It appears that both petitioners and respondent employee
filed their respective appeals before the Industrial Tribunal, wherein
the case of the petitioner No.1-bank was that the Labour Court has
not taken into consideration the issue with regards to applicability of
BIRA and the challenge by the respondent employee was for the
purpose of receiving 100% back-wages.
[11] The Industrial Tribunal vide its order dated 07.04.2016 was
pleased to reject the appeals of both the parties; thereby confirming
the order of the Labour Court as it is.
[12] The contention raised before this Court by the petitioner No.1-
bank is on the basis of terms of merger. It is submitted that after the
merger had taken place on 04.04.2009 under the scheme of merger
and amalgamation, petitioner No.2 cannot be held liable for the Act
on the part of the petitioner No.1-bank. At this stage, it would be
appropriate to refer to the relevant clauses as re-produced in the
preceding paras, whereby clearly liability of legal proceedings have
been taken over by the acquiring bank i.e. petitioner No.1-bank. In
view of this specific provision regarding pending legal proceedings,
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
in the opinion of the Court, petitioner No.1 bank has effectively
stepped into the shoes of petitioner No.2-bank and therefore, will be
responsible for all the liabilities of the petitioner No.2 bank. It would
be pertinent to observe that as on the date of merger, the order of
the Labour Court was already pronounced and thereafter, the
petitioner No.2-bank had preferred an appeal and in that appeal, the
petitioner No.1-bank had also joined as a party and was given an
opportunity of hearing.
[13] With regards to the contention of liability of the petitioner
only till the date of merger is concerned, the Court does not find
such submission made at any stage either before the Industrial
Tribunal or before this Court and therefore, the Court is not inclined
to consider such submission made at the belated stage. In any case,
considering the provisions of the merger itself, the petitioner No.1
cannot escape the liability of petitioner No.2-bank.
[14] At this stage, it is also pertinent to reproduce the operative
order of the Registrar which was passed for the purpose of
accepting the scheme of merger. The relevant clause being Clause 4
and Clause 7 would read as under:-
"4. The effective "cut-off date" of merger will be
01.01.2010.
7. The registration of Rushika Mahila Nagrik Sahakari
Bank Limited, Gandhinagar shall be deemed to be de-
registered and the merged bank will be known as
Junagadh Commercial Co-operative Bank Limited,
Junagadh and Rushika Mahila Nagrik Sahakari Bank
Limited's pre-merger liabilities, assets, and scope of
operations with be vested in Junagadh Commercial Co-
operative Bank Limited, Junagadh."
C/SCA/13747/2017 JUDGMENT DATED: 22/08/2022
[15] In view of the aforesaid, the Court is of the view that the
argument of petitioner No.1 not being a party before the Labour
Court while considering the case of respondent and setting aside
the order of terminating the services, cannot be considered.
[16] The Court is of the view that neither the Labour Court nor the
Industrial Tribunal have committed any error and in the face of the
concurrent finding of facts, no case is made out for any interference
under Article 226 or under Article 227 of the Constitution of India. It
is open for the respondent-employees to apply for withdrawal of the
amount deposited respectively towards 25% back-wages and the
Registry shall upon due verification permit the amount to be
withdrawn by such applicants.
[17] With the aforesaid, the petitions stand dismissed. Rule is
discharged.
(A.Y. KOGJE, J)
SIDDHARTH
