# t GHAZIABAD ZILA SAHAKARI BANK LTD v. ADDL. LABOUR COMMISSIONER& ORS

- **Citation:** [2007] 1 S.C.R. 1007
- **Court:** Supreme Court of India
- **Decided:** 2007-01-17
- **Bench:** Dr. Ar. Lakshmanan, Tarun Chatterjee
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/t-ghaziabad-zila-sahakari-bank-ltd-v-addl-labour-commissioner-ors-22452
- **Pages:** 49

## Headnote

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U.P. Co-operative Societies Act, 1965-Sections 128, 135, 70, 71 and
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102-U.P. Co-operative Societies Employees Service Regulations, 1975Regulation 42-:-U.P. Co-operative Societies Rules-Rules 130 and 131- c
U.P. Industrial Disputes Act, 1947-Section 6H-Employees of Co-operative
Bank-Ex gratia payment-Entitlement-Board of Directors passing
resolution for grant-Registrar annulling the resolutions-Additional
Labour Commissioner holding Registrar's annulling order proper and
directing payment of ex-gratia amount-Correctness of-Held: Additional
Labour Commissioner not competent to declare statutory order of the
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Registrar as improper-Since Co-operative Societies Law provides for
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complete machinery, Industrial Law not applicable thus, ALC's Jurisdiction
wrongly invoked and the order null and void-Ex-gratia payment being an
incentive for good work, thus governed by Regulation 42 which requires
prior approval of Registrar and the same was not sought-Also settlement
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between the bank and its employees being private one since not arrived
at before the conciliation officer not legally enforceable-Thus, employee
of Bank not entitled to ex-gratia payment-However payment already
made to employees not to recovered.
Interpretation of Statutes-Legal principle-General Act should lead
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to the special Act-Thus, U.P. Co-operative Societie~ Act, a special enactment
applicable with regard to employees of co-operative societies would
prevail over all other Labour Laws_.:.UP. Cooperative Societies Act, 1965.
Appellant-Bank is a Cooperative Society registered under the U.P.
G
Cooperative Societies Act, 1965 and the Rules. The services of the employees
of the Bank are governed by the provisions of the U.P. Cooperative S'ocieties
.....
Employees Service Regulation, 1975 framed by the U.P. Cooperative
y
Institutional Service Board. State Government issued a circular which
prohibited ex-gratia payment (over and above pay) by Cooperative Societies.
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1008
SUPREME COURT REPORTS
[2007] 1 S.C.R.
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The Registrar of the Cooperative Societies issued a similar circular and
ex-gratia payments to employees were suspended. However, the Board of
Directors passed a resolution for grant of ex-gratia to the employees. The
Chairman of the Union and the Bank entered into an agreement for
ex-gratia payment for 1999-2000 without Registrar's permission under
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Regulation 42 of the U.P. Cooperative Societies Employees Service
Regulations, 1975. Board of Directors ratified the said agreement and also
resolved that Registrar's concurrence was not required. Thereafter, the
Secretary wrote to the Chairman to refer to the Board of Directors
resolutions to the Registrar, but the Chairman failed. Secretary then
himself referred the matter to the Registrar. Board of Directors noted the
ban on ex-gratia and still decided to pay the same for 1999-2000 onwards.
The Registrar acting under Section 128(1) referred to Secretary's letters
to the Chairman under Rule 130 and granted time to the Bank to
reconsider its resolutions. In the meantime, employees of the Union filed
an application under section 6H(l) of the U.P. Industrial Disputes Act, 1947
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on the basis of rights under the Agreement. Addi.tional Labour
Commissioner allowed the ~pplication and issued recovery certificate.
Board of Directors approved ex-gratia payments again. Secretary again
referred the resolution and the Registrar annulled all Bciard of Directors
resolutions in exercise of.powers under s. 128 of the 1965 Act No appeal
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was filed against the Registrar's Order. Bank filed Writ Petition which.
was allowed and the matter was remanded to ALC. ALC held that the
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Registrar's annulment order was not proper and directed payment of exgratia amount as per the BOD's resolutions. Bank again filed Writ
Petition which was dismissed. High Court upheld the order passed by Addi.
Labour Commissioner. Hence the present appeal.
Allowing the appeals, the Court
HELD: 1. The Labour Court and Industrial Laws a

## Text

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GHAZIABAD ZILA SAHAKARI BANK LTD.
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v.
ADDL. LABOUR COMMISSIONER& ORS.
JANUARY 17, 2007
[DR. AR. LAKSHMANAN AND TARUN CHATTERJEE, JJ.]
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·~
U.P. Co-operative Societies Act, 1965-Sections 128, 135, 70, 71 and
r
102-U.P. Co-operative Societies Employees Service Regulations, 1975Regulation 42-:-U.P. Co-operative Societies Rules-Rules 130 and 131- c
U.P. Industrial Disputes Act, 1947-Section 6H-Employees of Co-operative
Bank-Ex gratia payment-Entitlement-Board of Directors passing
resolution for grant-Registrar annulling the resolutions-Additional
Labour Commissioner holding Registrar's annulling order proper and
directing payment of ex-gratia amount-Correctness of-Held: Additional
Labour Commissioner not competent to declare statutory order of the
D
Registrar as improper-Since Co-operative Societies Law provides for
I
complete machinery, Industrial Law not applicable thus, ALC's Jurisdiction
wrongly invoked and the order null and void-Ex-gratia payment being an
incentive for good work, thus governed by Regulation 42 which requires
prior approval of Registrar and the same was not sought-Also settlement
E
between the bank and its employees being private one since not arrived
at before the conciliation officer not legally enforceable-Thus, employee
of Bank not entitled to ex-gratia payment-However payment already
made to employees not to recovered.
Interpretation of Statutes-Legal principle-General Act should lead
F
;~-·
to the special Act-Thus, U.P. Co-operative Societie~ Act, a special enactment
applicable with regard to employees of co-operative societies would
prevail over all other Labour Laws_.:.UP. Cooperative Societies Act, 1965.
Appellant-Bank is a Cooperative Society registered under the U.P.
G
Cooperative Societies Act, 1965 and the Rules. The services of the employees
of the Bank are governed by the provisions of the U.P. Cooperative S'ocieties
.....
Employees Service Regulation, 1975 framed by the U.P. Cooperative
y
Institutional Service Board. State Government issued a circular which
prohibited ex-gratia payment (over and above pay) by Cooperative Societies.
H
'.
1007
1008
SUPREME COURT REPORTS
[2007] 1 S.C.R.
A
The Registrar of the Cooperative Societies issued a similar circular and
ex-gratia payments to employees were suspended. However, the Board of
Directors passed a resolution for grant of ex-gratia to the employees. The
Chairman of the Union and the Bank entered into an agreement for
ex-gratia payment for 1999-2000 without Registrar's permission under
B
c
Regulation 42 of the U.P. Cooperative Societies Employees Service
Regulations, 1975. Board of Directors ratified the said agreement and also
resolved that Registrar's concurrence was not required. Thereafter, the
Secretary wrote to the Chairman to refer to the Board of Directors
resolutions to the Registrar, but the Chairman failed. Secretary then
himself referred the matter to the Registrar. Board of Directors noted the
ban on ex-gratia and still decided to pay the same for 1999-2000 onwards.
The Registrar acting under Section 128(1) referred to Secretary's letters
to the Chairman under Rule 130 and granted time to the Bank to
reconsider its resolutions. In the meantime, employees of the Union filed
an application under section 6H(l) of the U.P. Industrial Disputes Act, 1947
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on the basis of rights under the Agreement. Addi.tional Labour
Commissioner allowed the ~pplication and issued recovery certificate.
Board of Directors approved ex-gratia payments again. Secretary again
referred the resolution and the Registrar annulled all Bciard of Directors
resolutions in exercise of.powers under s. 128 of the 1965 Act No appeal
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was filed against the Registrar's Order. Bank filed Writ Petition which.
was allowed and the matter was remanded to ALC. ALC held that the
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Registrar's annulment order was not proper and directed payment of exgratia amount as per the BOD's resolutions. Bank again filed Writ
Petition which was dismissed. High Court upheld the order passed by Addi.
Labour Commissioner. Hence the present appeal.
Allowing the appeals, the Court
HELD: 1. The Labour Court and Industrial Laws are not applicable
where complete machinery has been provided under the provisions of the
U.P. Cooperative Societies Act. The Additional Labour Commissioner has
no jurisdiction to pass orders in the nature it has been passed. Thus, the
order of High Court is set aside. [Paras 81 & 83) [1052-F, 1055-B-C]
2.1. The general legal principle in interpretation of statutes is that
'the general Act should lead to the special Act'. Upon this general principle
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of law, the intention of the U.P legislature is clear, that the special
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GHAZIABAD ZILA SAHAKARI BANK LTD. v. ADDL. LABOUR COMMR.
1009
enactment UP Co-operative Societies Act, 1965 alone should apply in the
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matter of employment of Co-operative Societies to the exclusion of all other
Labour Laws. It is a complete code in itself as regards employment in cooperative societies and its machinery and provisions. The general Act-U.P.
Industrial Disputes Act, 1947 a whole has and can have no applicability and
stands excluded after the enforcement of the UPCS Act. This is also clear
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from necessary implication that the legislature could not have intended
'head-on-conflict and collision' between authorities under different Acts.
[Para 59) [1033-B-D]
The Co-operative Central Bank Ltd. & Ors. v. The Additional
Industrial Tribunal, Andhra Pradesh & Ors, [1969) 2 SCC 43; R.C.Tiwari
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v. MP. State Co-operative Marketing Federation Ltd. & Ors., (1997) 5
SCC 125; Belsund Sugar Co. Ltd. v. State of Bihar & Ors., [1999) 9 SCC
620; Allahabad Bank v. Canara Bank & Anr., [2000) 4 SCC 406; State
of Punjab v. Labour Court, Jul/under & Ors., [1980) 1 SCC 4 and U.P.State
Electricity Board v. Shiv Mohan Singh & Anr., [2004) 8 SCC 402, referred
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to.,
2.2. A prior general Act may be affected by a subsequent particular
or special Act if the subject-matter of the particular Act prior to its
enforcement was being governed by the general provisions of the earlier
Act. In such a case the operation of the particular Act may have the effect
of partially repealing the general Act, or curtailing its operation, or adding
conditions to its operation for the particular cases. (Para 62) (1036-C-D]
'Principles of Statutory Interpretation' by G.P. Singh, referred to.
2.3. A general Act's operation may be curtailed by a later Special Act
even if the general Act will be more readily inferred when the later Special
Act also contains an overriding non-obstante provision. Therefore the
Additional Labour Commissioner's, jurisdiction was wrongly invoked and
his order under section 6H of the U.P. Industrial Disputes Act, 1947 is
without jurisdiction and hence null and void. In view of the said general
legal principle, it is immaterial whether or not the government has
enforced section 135 of the Uttar Pradesh Cooperative Societies Act, 1965
because, in any case s. 135 had been included in the Act only by way of
clarification and abundant caution. In the alternative if it is to be presumed
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that the ingredients of s.6H are not satisfied then also there is no
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SUPREME COURT REPORTS
[2007] 1 S.C.R
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adjudicated claim but only a highly disputed claim of the workman.
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[Paras 63, 64 & 65] [1036-E, 1037-E-F, 1037-G]
Central Inland. Water Transport Corporation v. The Workmen and
Another, [1974] 4 SCC 696 and Town Municipal Council, Athani v. The
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Presiding Officer Labour Courts, Hubli and Ors, Etc., (1969] 1 SCC 873,
referred to.
3.1. The ALC, in law is not competent to declare the statutory order
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of the Registrar, CS, under section 128 of the UPCS Act to be 'not proper'
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and thereby to disregard the same. An order under S.128 is final and
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binding and cannot be questioned in view of S. 102 and even otherwise on
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general principles of law, an authority under the UPID Act cannot ignore
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or wish away the statutory consequences of the statutory order passed by
the Registrar under sections 128, 102 etc of the UP Co-operative Societies
"!
Act. Also the Registrar's directions and order requiring the BOD to
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reconsider its (offending) resolutions and finally annulling the same in
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exercise of his powers under S.128 are statutory in nature. They are still
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valid and occupy the field. They become final and binding under s.102
because, no appeal was filed under S.98 of the CS Act and no arbitration
reference was made under Sections 70 and 71 of the CS Act.
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[Paras 68 & 69] [1044-B-D]
3.2. ALC and the High Court wrongly appreciated the Secretary's
functions and procedure under Rule 130 as subsisting rather than merely
supplementing the Chairman's power and procedure, including suo moto
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power and procedure, under S.128 of the Act r/w Rule 131. The Secretary
as well as the Registrar fully complied with the procedure under s. 128 and
Rule 130 on facts. (Paras 70 & 72) (1044-E, 1048-E]
·~.,..
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Nedurimilli Janardhana Reddy v. Progress of Democratic Students
Union & Ors., (1994] 6 SCC 506 and Life Insurance Corporation of India
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v. Escorts Ltd. & Ors., [1986] 1 SCC 264, referred to.
3.3. In the instant case, the Additional Labour Commissioner allowed
the payment as an ex~gratia payment to the employees of the Cooperative
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Bank from the public fund. The meaning of the word 'Bonus' according to
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the new English dictionary is a boon or gift, over and above, what is
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GHAZIABAD ZILA SAHAKARI BANK LTD. v. ADDL. LABOUR COMMR.
lOll
normally due as remuneration to be received. This imports the concept of A
some ex-gratia payment. It was ex-gratia payment on account of which it
is not possible to employ a term of service on the basis of employed contract.
The payment made as ex-gratia payment would not constitute any precedent
for future years. The ex-gratia payment made in the instant case was
neither in the nature of production bonus nor incentive bonus nor customary
nor any statutory bonus. It cannot be regarded as part of the contract
'employment'. Therefore, the ex-gratia payment made by the bank cannot
be regarded as remuneration paid or payable to the employees in fulfillment
of the terms of the contract of employment within t~e meaning of definition
under Section 2(22) of the I.D. Act, 1947. [Para 73] [1048-F-H, 1049-A)
3.4. The Registrar has power to determine the terms of the employment
of the Society from time to time, frame regulations to regulate the
emoluments and other conditions of service etc. under Section 121 of the
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U.P. Cooperative Societies Act, 1965. The Registrar has power to annul the
Resolution of the Cooperative Societies or cancel the orders passed by an
officer of the Society in certain cases under Section 128. The Registrar
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can cancel any order passed by an officer of a Cooperative Society, if he
is of the opinion that the Resolution or the order, as the case may be, is
not covered by the objects of the society or is in contravention of the
provisions of the Act, the Rules or the bye-laws of the Society. Rule 130
gives the power to the Secretary of the Cooperative Society to move the
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Chairman of the Society in writing to refer the matter to the Registrar for
his decision. In Section 135, the provisions contained in the Industrial
Disputes Act, 1947 and the U.P. Industrial Disputes Act, 1947 shall not
apply to Cooperative Societies. [Para 74] [1049-B-E]
3.5. The emoluments and other kinds of allowances payable to the
employees of the Bank are also governed by the provisions contained in the
Service Regulations, 1975. In the instant case, payment of ex-gratia amount
to the employees of the bank is a policy matter. No agreement or settlement
between the bank and its employees have been arrived at before the
Conciliation Officer nor any money is due to the employees under the
provisions of Section 6-J(2) of the U.P. Act, 1947 or under any settlement
or any award given under the provisions of this Act. There was no
settlement in the eyes of law and is not valid or enforceable or binding.
Therefore, the application under Section 6-H(l) is an illegal settlement
arrived at between the Chairman and the Employees' Association viz.
Respondent Nos. 3 and 4. [Paras 74 & 83) (1049-F-G, 1055-B)
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SUPREME COURT REPORTS
[2007] 1 S.C.R
3.6. In view of Regulation 42 it is crystal clear that for giving
pecuniary benefits or allowances to the employees governed by the
Regulations, 1975, the Registrar's general or special order is necessary
and if the particular Cooperative Society wants to grant the benefit, then
it can be given only with the permission of the Registrar. In the instant
case, no permission was ever sought from the Registrar, rather on the
contrary, action was taken contrary to the circulars issued by the Registrar,
Cooperative Societies, U.P. issued from time to time, prohibiting payment
of ex-gratia in this regard. Respondent No. 1 had no jurisdiction to
adjudicate the matter of employees with regard ~o the payment of ex-gratia
amount which runs contrary to the Regulation 42 of the Service Regulations,
1975 as well as th~ Circulars issued by the Registrar, Cooperative
Societies, U.P. and the Additional Re~~strar (Banking), Cooperative Societies
U.P. (Paras 76 & 77] (1050-D-F]
.
3.7. The impugned judgment suffers from complete non-application of
mind on the merits of the case in as much as whole pleadings even before
the Labour Commissioner or before the High Court was that the
payment of ex-gratia to the employees are against the objects of the society
and it is in contravention of Regulation 42 of the Service Regulations, 1975
and contrary to the provisions of the Act, 1965 and contrary to the
provisions of the Rules 1968, Government orders/circulars of Registrar
and other laws applicable, the Chairman of the bank suo motu, without
there being any power or legal authority unilaterally entered into a private
settlement with the employees of the bank. To avoid such a situation of
illegal agreements by the Chairman who is an elected representative and
to protect misuse of public fund by the employees amongst themselves, the
cooperative Act Rules and Regulations framed thereunder requires prior
permission of the Registrar Co-operative Societies for grant of any pecuniary
benefits because Regulation 42 of the U.P. Cooperative Societies Employees
Service Regulations 1975 provides that any allowance or pecuniary benefits
to employees shall be given only by the special order of the Registrar
Cooperative Societies, U.P. which order was missing throughout.
[Para 78) (1050-H, 1051-A-D]
3.8. The present dispute does not relate to 1947 Act, it is related to
the provisions contained under the Societies Act, 1965 as well as where a
circular issued by the Registrar of Cooperative Societies and more
specifically Regulation 42 of Service Rules, 1975. Therefore, the private
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settlement made does not fall under section 6-H(I) of the U.P. Act, 1947.
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GHAZIABAD ZILA SAHAKARI BANK LTD. v. ADDL. LABOUR COMMR.
1013
In other words, the payment of ex-gratia is an incentive for an employee for
his good work. Therefore, it is governed by Regulation 42(2) that any
cooperative society may also grant pecuniary incentive only with the prior
permission of the Registrar to any employee or a class of employees for
outstanding performance. It clearly provides that for payment of ex-gratia,
permission of the Registrar is must. Regulation 42 is itself very clear and
is not in conflict with any of the provisions of the U.P. Act, 1947. The
respondents themselves admitted in their counter affidavit that the settlement
was not entered into during conciliation proceeding. Therefore, the said
private settlement could not have been legally enforced being an invalid
settlement No private settlement can give a legal enforceable right. It is
wrong to suggest that payment of ex-gratia amount to the employees over
and above their salary is the matter ofU.P. Act, 1947. It is very clear and
there is special provision in Rule 42 to the Service Rules, -1975. The
cooperative society is a State Government subject and every State Government
has right to make laws in their respective States and there are different
cooperative societies Acts in different States. [Para 79] [1051-D-H]
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3.9. With regard to the submission that ex-gratia is being paid for
several years and therefore the ex-gratia payment should be continued,
records placed reveal that ex-gratia payment was conditionally paid upto
1999-2000 and in every resolution, the Board of Directors has been clearly
mentioning that ifthere is any objection from the Department, audit etc.,
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the amount of ex-gratia will be recovered from the employees. In the audit
reports for several years, the auditors as well as the department have
objected for such payments. It is made clear that the payments whlch have
already· been made even though there is audit objection need not be
recovered from the employees. However, the employees will not be entitled
for any ex-gratia payment from now onwards. [Para 80] [1052-A-C]
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3.10. Services of the employees of the Bank are governed by service
regulations 1975 framed under the Act.of 1965 and the bye laws of the
bank.The provisions under Section 70 of the U.P. Cooperative Societies
Act, 1965 provides complete machinery that ifthere is any dispute between
the employers and the employees of the Cooperative Society, the matter
shall be referred to the Arbitrator as provided under Section 70 of the U.P.
Cooperative Societies Act, 1965. [Para 81] [1052-D-E]
R.C. Tiwari v. MP. State Co-operative Marketing Federation Ltd &
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Ors., [1997] 5 sec 125, relied on.
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SUPREME COURT REPORTS
[2007] 1 S.C.R.
CIVIL APPELLATE illRlSDICTION: Civil Appeal No. 5230 of2004.
From the final Judgment and Order dated 4.4.2003 of the High Court
of Judicature at Allahabad in Civil Misc. Writ Petition No. 12890/2003.
WITH
C.A. No. 523 I of2004.
Sunil Gupta, Ratnakar Das, S. W.A. Qadri, Kamlendra Mishra, Rajeev
Dubey, Vivek Vishnoi, Fuzail Khan, Javed M. Rao, Shahid Ali Rao and
Musharraf Chawdhry for the Appellant.
Sandeep Singh, Pradeep Misra for the Respondent No. l.
Indira Jaisingh, Bharat Sangal, R.R. Kumar, Samyadip Chatterji and
Suchita Sharma for the Respondent Nos. 2 to 4.
The Judgment of the Court was delivered by
DR. AR. LAKSHMANAN, J. : l. The present appeals were filed
challenging the final judgment and order dated 04.04.2003 passed by the
High Court of Judicature at Allahabad in Civil Misc. Writ Petition No. 12890
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of 2003 whereby the High Court dismissed the writ petition.
2. The consequence of the dismissal of the writ petition is that the High
Court has affirmed the order dated 15.03.2003 passed by the Addi. Labour
Commissioner, Ghaziabad, U.P., who according to the appellant has got no
power to pass such an order explaining the scope of the powers of the
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Registrar under Section 128 of the U .P. Cooperative Societies Act.
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3. According to the appellant under the U.P. Cooperative Societies Act,
1965 (hereinafter called 'the Act') read with U.P. Cooperative Societies
Employees Service Regulation, 1975 framed by U.P. Cooperative Industrial
Service Board and which has also been approved by the Governor and
published in the official gazette under Section 122 of the U.P. Cooperative
Societies Act, 1965, a full fledged remedy and mechanism to agitate the
grievances of the employees of Cooperative Societies are already contained.
According to the appellant, the U.P. Cooperative Societies Act, 1965 being
a special enactment will prevail over the U.P. Industrial Disputes Act and in
any view of the matter application made by the employees of the Bankunder
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GHAZIABAD ZILA SAHAKARl BANK LTD. 1•. ADDL. LABOUR COMMR.[LAKSHMANAN, J.] 1015
Section 6H(l) of the U .P. l.D. Act on the basis of an agreement improperly
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entered into is not maintainable. Therefore, it is submitted that the Addi.
Labour Commissioner U.P. Ghaziabad exceeded his jurisdiction in passing
the order dated 15.03.2003.
4. By the said order, the Addi. Labour Commissioner allowed the
payment of Rs.11, l 0,398 as an ex-gratia payment to the employees of
the appellant-Bank for the year 1999-2000 from the public fund.
According to the Bank, if such a payment is allowed, then there are 50 more
such banks and employees of said Banks who will claim same relief on the
ground of parity and discrimination which will erode the public money
running in several crores as similar payments made were the reasons for
liquidation of District Cooperative Bank, Gonda. It was further contended
that if the above payment is allowed, then all credit Cooperative Societies
• will crumble down and the cooperative movement shall vanish in the entire
State of U .P.
BACKGROUND FACTS:
5. The U.P. Cooperative Societies Employees Service Regulations, 1975
were framed by the U.P. Cooperative Institutional Service Board constituted
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by the State Government. The Government issued a circular prohibiting exgratia payment (over and above pay) hy Cooperative Societies. In September,
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1989, the Registrar, Cooperative Societies issued circulars prohibiting payment
of ex-gratia amounts on 11.09.1987, 10.05.1995, 29.10.1997 and 17.02.2000
since the same was contrary to Rules. Accordingly, ex-gratia payments to
employees were suspended. However, on 13.01.2001, the Board of Directors
passed a resolution for grant of ex-gratia to employees on 13.01.2001.
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Agreement for ex-gratia payment for 1999-2000 was entered by the Chairman
of the Union without Registrar's permission under Regulation 42.
Agreement reads thus:
"AGREEMENT
Keeping in view, the position likely to ensue on resorting to total
strike, talks were held, as per programme fixed prior to 24.01.2001,
in the interest of bank, between Sarvashri Mukesh Gaud, Nirdosh
Singh, Ghandharva, Satyendra Singh, and K.P. Singh, on behalf of
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SUPREME COURT REPORTS
[2007] 1 S.C.R
the Cooperative Bank Employees Union Ghaziabad as well as
Sarvashri S.S. Bhatia, Rakesh Sharma, Vinod Kumar and Narendra
Prasad Sharma on behalf of the Cooperative Bank Staff Association
Union, Ghaziabad both being the organization of Bank employees
on one side, and Shri Krishna Veer Singh Sirohi, the Chairman of
the Bank on behalf of the District Cooperative Bank Ltd. Ghaziabad
(The Soil Sahkari Bank Ltd. Ghaziabad) on the other side, on the
subject of the Joint Notice No. C-1 dated 26.12.2000.
After the talks, a consensus was arrived at to the effect that
the following two demands will be met by the Chairman by the 20th
ofFebruary, 2001.
I.
The paylllent of the ex-gratia amounts pertaining to the year
1999-2000 to the Bank employees on basis of their character
rolls.
2. -
Paylllent of one special increment to employees on completion,
by them of ten years, continuous service in accordance with
the circular letter of the Registrar.
On the above-mentioned assurance, both the organizations,
keeping in view the interest of the bank, decided thai the resorting
to the total strike proposed prior to 24. 1.2001 in accordance with
the programme fixed after sending the notice No. C-1 dated
26.12.2000 by both the organizations is deferred to 20.02.2001.
This consensus also was arrived at that if on account of any
circumstances, the demands are not met satisfactorily within the
saidfzxed period, the programme proposed on 24.01.2001 under the
Notice referred to above, will be commenced with effect from
21.2.2001, to the legality whereof the Chairman agreed.
Both the sides, after going through this agreement and after
having agreed to the agreement, signed the same this 23rd day of
January, 2001at5.00 p.m. at the Bank Head Quarters R-2/100, Raj
Nagar, Ghaziabad.
Workmen's Side
On behalf of Cooperative Bank
Employees Union, Ghaziabad,
Employer's side
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GHAZIABAD ZITA SAHAKARI BANK LTD. v. ADDL. LABOUR COMMR.[LAKSHMANAN, J.] 1017
Sd/- Illegible
I. Mukesh Gaud
-do2. Nirdosh Singh
-do3. Satyendra Singh -do4. K.P. Singh
-doSd/- Illegible
(Krishna Veer Singh
Sirohi) Chairman, Distt.
Cooperative Bank Ltd.
Ghaziabad.
A
Cooperative Banks Staff
B
Association Unit, Ghaziabad.
I. S.A. Bhati
Sd/- Illegible
2. Rakesh Sharma
-do3. Vinod Kumar
4. Narendra Prasad Sharma
-do-
-doc
.
Dated 23.1.2001
Place: Ghaziabad."
6. According to the Bank, this agreement is not a settlement under
Section 2(t) of the U.P. Industrial Disputes Act, 1947 read with Rules 5(1)
D
and 2 of the U.P. Industrial Dispute Rules, 1967. On 03.02.2001, the Board
of Directors ratified the said agreement and also resolved that Registrar's
concurrence was not required:
RESOLUTION No. I passed on the meeting of the Board of
Directors of Bank held on 3.2.2001.
E
Resolution
Consideration of the
proceedings of
last meeting.
Decision
The Secretary, Bank read over the
proceedings of the last meeting, which
are confirmed unanimously with this
decision that the norms prescribed
towards the fulfillment of 40 per cent
target of deposit enhancement in
respect of the payment of the ex-gratia
amounts vide Resolution No.14 passed
on 13.1.2001 and condition ofobtaining
Registrar's concurrence thereto are not
confirmed. Accordingly, the payment
of ex-gratia amounts be made to the
Bank employees.
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SUPREME COURT REPORTS
[2007) 1 S.C.R.
Sd/- Illegible
Secretary/General Manager"
7. On 14/17.02.2001, Secretary wrote to the Chairman to refer to the
Board of Directors resolutions dated 13.01.2001 and 3 .2.200 I to the Registrar.
The Chairman failed to do so. Hence, the Secretary himself referred the
matter to the Registrar under Rule 130.
"A true translated copy of the order dated 7.3.2001 passed by the
Deputy Registrar Cooperative Societies, U.P. Meerut Division,
Meerut.
ORDER
Whereas "The Ghaziabad Zila Sahkari Bank Ltd." (The Ghaziabad
District Cooperative Bank Ltd.) which is called hereinafter as Bank,
is a Cooperative Society registered under the U.P. Cooperative
Societies Act and rules.
Whereas it has been decided, by the Board of Directors of the
Bank, vide Resolution No. 14 dated 13.1.2001 and in this continuation
vide Resolution No. 1 dated 3.2.2001, on the demand of the Bank
employees Organisation (Union), to make the payment of the exgratia amount in accordance with the prescribed norms like the
previous year, whereon the Secretary, District Cooperative Bank
Ltd., Ghaziabad has vide his letter No. 18980 dated 17.2.2001,
recommended to annul both the aforesaid Resolutions under Section
128 of the U.P. Cooperative Societies Act, 1985.
Whereas in the aforesaid context, a divisional meeting was held,
".ide Registrar's circular letter No. C-74 dated 29.10.1997 and dated
22.1.2001, in district Ghaziabad under the Chairmanship of the
Hon'ble Minister of Corporation in which the Registrar and other
employees/higher officers as well as all the Secretaries, Distt.
Cooperative Banks Ltd. of the division participated and when the
Secretary Distt. Cooperative Bank Ltd. Ghaziabad sough for the
directions on the aforesaid payment referred to above, the Registrar
clearly directed that the payment of ex-gratia amount be not made
contrary to the circular letters issued by the Department.
..
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GHAZIABAD ZILA SAHAKARI BANK LTD. '" ADDL. LABOUR COMMR.[LAKSHMANAN, J.) 1019
-1
Now, therefore, I Naval Kishore, Deputy Registrar, Cooperative
A·
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Societies, U.P. Meerut Division, Meerut, in exercise of powers of
the Registrar conferred by the Government Order No. 3328-C/12.
CA 25(1 )/67 dated 24.6.1969, do hereby require the Chairman/Board
of Directors, District Cooperative Bank Ltd. Ghaziabad under
Section 128(1) of the U.P. Cooperative Societies Act, 1965, to reB
consider the Resolution No. 14 dated 13.1.2001 and Resolution
No ...... dated 3.2.2001, which are in respect of the payment of ex-
\r
gratia amounts to bank employees. The said exercise may please
be completed within 15 days. Please . ensure the action under
reference, within the ambit of the circular letter issued by the
Registrar, Cooperative Societies, U.P. Lucknow.
c
Sd/- Naval Kishore
Deputy Registrar
Cooperative Societies, U.P. Meerut
- '
Division Meerut."
D
1
8. On 25.02.2001, Board of Directors noted the ban on ex-gratia and
still decided to pay the same for 1999-2000 onwards.
-·
"THE GHAZIABAD DISTRICT COOPERATIVE BANK LTD.
Head Office: R-2/100, Raj Nagar, Ghaziabad
E
RESOLUTION NO. 9: passed under "other Items (I) at the Seventh
Annual General Body.Meeting held on 25.2.2001.
Resolution
Decision
The consideration of
The Chairman of the Bank intimated that
F
...
the payment of
the payment of the ex-gratia amount
,,.
ex-gratia amount
to the bank employees and officers for
to the bank
the year 1999-2000 has not been made
employees
as yet, while sanction has already
and officers.
been accorded by the Board of Directors
to the payment of the ex-gratia amounts.
G
The payment of ex-gratia amounts has
been banned at the level of Registrar,
'
Cooperative Societies.
. )'
After deliberation, in view of the
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[2007] l S.C.R.
continuously. Enhancing position of .the
bank's profitability, this is unanimously
decided that the ex-gratia payments for
the year 1999-2000 be made to the bank's
Employees/officers.
Sd/- Illegible
General Manager"
9. The Secretary again wrote to the Chairman to refer BOD Resolution
dated 25.02.2001 to the Registrar. The Chairman failed to do so. Hence, the
Secretary himself referred the matter to the Registrar under Rule 130.
10. On 07.03.2001/19.03.2001, the Registrar acting under Section 128(1)
referred to Secretary's letters to the Chairman under Rule 130 and granted
time to the Bank to reconsider its resolutions dated 13.01.2001, 03.02.2001
and 25 .02.200 I.
11. On 08.05.2001, 161 employees of the Union moved an application
under Section 6H(l) of the U.P.I.D. Act purporting to be on the basis of
rights under the Agreement dated 23.01.2001. On the same day, the Deputy
Labour Commissioner issued notice to the Bank.
Section 6H(l) reads thus:
"6H. Recovery of money due from an employer- 0) Where any
money is due to a workman from an employer under the
provisions of sections 61 to 6R or under a settlement or award, or
under an award given by an adjudicator or the State Industrial
Tribunal appointed or constituted under this Act, before the
commencement of the Uttar Pradesh Industrial Disputes (Amendment
and Miscellcrieous Provisions) Act, 1956, the workman may, without
prejudice to any other mode of recovery make an application to the
State Government for the recovery of the money due to him, and
if the State. Government is satisfied that any money is so due, it
shall issue a certificate for that amount to the Collector who shall
proceed to recover the same as if it were an arrear of land
revenue ..... "
12. An application was filed under Section 6H(l) of the Act which
reads as follows:-
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GHAZIABAD ZILA SAHAKARI BANK LTD."· ADDL. LABOUR COMMR.[LAKSHMANAN, J.] 1021
To
The Deputy Labour Commissioner U.P.
Lohiya Nagar, Ghaziabad.
Dated: 8.5.2001
We, the undersigned applicants, are entitled to receive a sum
of Rs.11,05,333 (Rupees Eleven Lacs Five thousand three hundred
A
thirty three only) from Mis. Ghaziabad Zila Sahakari Bank Ltd.,
B
R-21100, Raj Nagar, Ghaziabad as per the settlement dated
23.01.2001 between the management and their workmen which was
affirmed subsequently by the Board of Directors in its meeting held
on 03.02.2001. But even after making the repeated requests by the
workmen through their union namely Co-operative Bank employees
C
Association and Co-operative Bank Association have not paid one
months wages (Basic pay plus Dearness Allowance) to the
employees as ex-gratia for the financial year 1999-2000 so far the
photocopy of the resolution passed by the Board of Directors
related to the aforesaid settlement dated 3.2.2001 are attached only
to the original copy of the application for ready reference and
D
marked respectively as Annexure 'A' & 'B'.
xxxx
xxxx
xxxx
13. The bank filed objections before the Additional Labour
Commissioner (hereinafter called 'the ALC;) referring to the ban on ex-gratia
and Registrar's directions dated 07.03.2001and19.03.2001 to reconsider. On
15.05.2001, the ALC allowed the application under Section 6H and issued
recovery certificate on the ground that the employer (Bank) has no objection.
The said order reads thus:
''ORDER
Dated 15.5.2001 :
The parties are present. On behalf of the employers, written
statement has been filed. The workman-side has to file no records.
Hence the proceedings relating hearing are closed. On behalf of the
workmen, a demand has been raised towards payment of sum of
money on the basis of agreement, which has been denied by the
employers. No objection about the amount of money mentioned in
the application has been raised on behalf of the employers. Hence,
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[2007] l S.C.R.
the recovery certificate for the ordered sum of money be issued.
Sci/- Illegible
Endt. Bank's letter No. Mu.Ka/01-02/Prasha/l 137 dated 14.5.2001
has been sent by the undersigned.
Sci/- Illegible
15.5.2001"
14. On 26.05.2001, Board of Directors approved ex-gratia payments
again. On 30.05 .200 l, the Secretary again referred the resolution. On 22.06.200 l,
the Registrar annulled all Board of Directors resolutions dated 13.01.2001,
03.022001, 25.02.2001 and26.05.2001 in exercise of powers under Section 128
of the U.P.C.S. Act, which reads thus:
"128. Registrar's power to annual resolution of a co-operative
society or cancel order passed by an· officer of a co-operative
society in certain cases-The Registrar may-
(i) annul any resolution passed by the Committee of Management,
or the general body of any co-operative society;
or
(ii) cancel any order passed by an officer of a co-operative society;
if he is of the opinion that the resolution or the order, as the case
may be, is not covered by the objects of the society, or is in
contravention of the provisions of this Act, the rules or the byelaws of the society, whereupon every such resolution or order shall
become void and inoperative and be deleted from the records of the
society:
Provided that, the Registrar shall, before making any order,
require the Committee of Management, general body or officer of
the co-operative society to reconsider the resolution, or as the case
may be, the order, within such period as he may fix but which shall
not be less than fifteen days, and if he deems fit may stay the
operation of that resolution or the order during such period."
' .....
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GHAZIABAD ZITA SAHAKARI BANK LTD.,. ADDL. LABOUR COMMR.[LAKSHMANAN, J.) 1023
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15. It is to be noted that no appeal was filed against the Registrar's
A
Order under Section 98 (l)(h) before the State Government nor any step was
taken for arbitration under Section 70 and the same became final and
conclusive under Section 102.
16. The Bank filed Writ Petition being No. 22573 of 2001 against the
B
order passed by the ALC dated 15.05.2001 which was allowed and the matter
"·
was remanded by the High Court for re-decision by the ALC in view of the
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fact that (a) the Bank had filed an objection and (b) the Registrar had now
passed the annulment order dated 22.06.2001.
17. On remand, the ALC held Registrar's annulment order was not c
proper and directed that ex-gratia amount be paid as per BOD's resolutions.
According to the Bank, the ALC performed adjudication of disputed claims
under Section 6H which provides in a legitimate case only execution of preadjudicated rights i.e. a determined sum to be paid. Writ Petition No. 12890
of 2003 was filed by the Bank against the above order passed by the ALC
D
dated 15 .03 .2003 was also dismissed by the impugned order dated 04.04.2003.
{·
18. We heard Mr. Sunil Gupta, learned senior counsel for the appellant
and Mr. Ratnakar Das, learned senior counsel in C.A. No. 5231 of2004 and
Mr. Sandeep Singh, learned counsel for RI and Ms. Indira Jaisingh, learned
senior counsel ably assisted by Mr. Bharat Sangal, learned counsel for R2
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to R4.
LACK OF JURISDICTION:
19. Mr. Sunil Gupta, learned senior counsel for the appellant submitted
F
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that the ALC's jurisdiction was wrongly invoked and his order dated
15.03.2002 under Section 6H of the U.P. l.D. Act was without jurisdiction,
null and void. According to Mr. Sunil Gupta, the general legal principle is
that, general act should yield to the subject act. Upon this general principle
oflaw, the intention of the U.P. Legislature is clear, namely, that the special
G
enactment, U.P.CS Act, 1965 alone should apply in the matter of employment
of cooperative societies to the exclusion of all labour laws.
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20. For this proposition, Mr. Sunil Gupta relied on the following
judgments of this Court:
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SUPREME COURT REPORTS
(2007] l S.C.R
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(l)
The Co-operative Central Bank Ltd. & Ors. v. The Additional -
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Industrial Tribunal, Andhra Pradesh & Ors., (1969] 2 SCC 43 (paras
2,6,7)
(2)
R.C.Tiwari v. MP. State Co-operative Marketing Federation Ltd. &
Ors., (1997] 5 SCC 125 (para 3)
(3) . Belsund Sugar Co. Ltd. v. State of Bihar & Ors., (1999] 9 SCC 620
(paras 16, 17,48,49)
(4)
Allahabad Bank v. Canara Bank & Anr., (2000] 4 SCC 406 (paras 3841, 50)
(5)
State of Punjab v. Labour Court, Jul/under & Ors., (1980] l SCC 4
(paras 7-10)
(6)
UP.State Electricity Board v. Shiv Mohan Singh & Anr., (2004] 8 SCC
D
402 (paras 56,87-91)
The question of Section 135
21. In view of the general legal principle, Mr. Gupta submitted that it
is immaterial whether or not the Government has enforced Section 13 5 UPCS
E
Act because in any case the said provision had ·been included in the Act
only by way of clarification and abundant caution.
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22. He further submitted that the enforcement of the entire intent of the
legislature in the form of enforcement of the entire scheme and provisions
of the Act having taken place, is wholly immaterial and that the clarificatory
and cautionary provision of Section 135 has not been given by the
Gov.::mment and an appointed date for enforcement under Section 1(3) and
that such non-appointment of date makes no difference to the legal
consequences of the aforesaid general principle of law which, in any case,
results in exclusion and implied repeal of the U.P.l.D. Act on first legal
principles.
23. Mr. Gupta also submitted that the ingredients of Section 6H are not
satisfied. According to learned senior counsel, there_ is no money due and
no settlement in the eyes of law. Indeed, there is no adjudicated claim but
only a highly disputed claim of the workmen.
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GHAZIABAD ZILA SAHAKAR1 BANK LTD. r. ADDL. LABOUR COMMR.[LAKSHMANAN. J.J 1025
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24. In regard to his contention that no money is due, Mr. Gupta relied
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on Central Inland Water Transport Corpn. v. The Workmen & Anr., (1974]
4 SCC 696 (paras 11 to 16) and Town Municipal Council, Athani v. The
Presiding Officer, Labour Courts, Hubli & Ors., [ 1969] 1 SCC 873 (para 8).
25. With regard to his contention that there is no settlement in the eyes
B
of law, learned senior counsel submitted that the agreement dated 23.01.200 I
between the Chairman of the Bank and the workmen is not a settlement in
)-
the eyes of law and is not valid or enforceable or binding on the Bank. He
relied on Triveni Glass Ltd. v. State of UP, [2005] Labour and Industrial
Cases 494, in support of this contention made.
26. In the alternative, Mr. Gupta contended that ALC, in law is not c
competent to declare the statutory order of the Registrar under Section 128
of the Act to be not proper and thereby the same has to be disregarded.
An order under Section 128 is final and binding and cannot be questioned
in any Court in view of Section 102.
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FINALITY CLAUSE:
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27.