ORDER
1. A learned Single Judge of this Court has made this Reference vide Order dated 7.12.2000, passed in W.P.No. 36625/2000 to a larger Bench, for reconsideration of the law as enunciated in the Division Bench judgment reported in W.P.No. 14792 - 804/1998 c/w 14095/1998 dated 9.3.2000 ( Veerashaiva Co-op. Bank Ltd. v. Presiding Officer, Labour Court and others) on the ground that amendment brought to Section 70 of the Co-operative Societies Act ousts the jurisdiction of Labour Court by conferring the jurisdiction on the Registrar of the Co-operative Societies. This Reference was placed before us on 9.4.2003 as per the order of the Hon'ble Chief Justice dated 1.4.2003.
2. Brief facts leading to the Order of Reference, as alleged, are:
The Karnataka Sugar Workers Federation (R) represented by its President has filed W.P.No. 36625/2000 challenging the validity of amendments made to the Co-operative Societies Act by the Karnataka Co-operative 2nd Amendment Act, 1997 as published in the Karnataka Gazette dated 27.3.2000, in so far as it relates to amendment made to Section 70(1)(d) and Section 70(2)(d) of the Karnataka Co-operative Societies Act, 1959 ('KCS Act' for short).
It is alleged that the petitioner is a Federation of Trade Union registered under the Indian Trade Unions Act, 1926 functioning in Sugar Factories. The petitioner Federation representing 45,000 workers being recognised as a collective bargaining agent for the purpose of negotiation and settlement of wages and service conditions of workers in the Sugar Factories, has signed settlement with the Managements. It is alleged that Industrial Tribunals appointed by the State Government under the Industrial Disputes Act, 1947 nearly after 50 years of working would adversely affect the workmen and the employees in the Co-operative sugar factories. Thus the amendment to Section 70 of the KCS Act is contrary to law and violative of Articles 14 and 21 of the Constitution and is liable to be quashed. It is prayed that the amendment to Section 70 of the KCS Act be quashed and to hold that the entire provisions of Industrial Disputes Act and other relevant labour laws would continue to apply to the employees in co-operative societies.
3. W.P. 39020/99 is filed by the Mysore Paper Mills challenging the award of the Labour Court as without jurisdiction. W.P.No. 6717/ 97 is filed by Hukkeri Taluka Co-operative Rural Electricity Supply Ltd. challenging the award of the Labour Court, Hubli.
Similarly, in W.P. 2000/97, W.P. 7965/97, W.P. 7933/97, W.P. 6304/ 2000, W.P. 21040/2000, W.P. 3997/2001, W.P. 36407/2000, W.P. 31466/2000, W.P. No. 37914/1999, W.P. No. 33528/2000, W.P No. 18025/1997, W.P. 13826/2000, W.P. 47510/2001, W.P. 25812/97 and W.P. 28946/2000, the awards of the Labour Court/Industrial Tribunal as the case may be, are challenged.
W.P. 25857/2000 is filed by one Rangaswamy challenging the letter of the Registrar of Co-operative Societies and the award of the Labour Court.
4. After W.P.No. 36625/2000 was referred to the Full Bench, the other Writ Petition, which were filed, were directed to be posted to be decided along with the said Writ Petition. The question of ousting the jurisdiction of the Industrial Tribunal by the amendment is involved in all the Writ Petitions, which are similar and identical in nature. As agreed by the parties, the question is decided by this common order.
5. It is pertinent to note that the dispute of employees of Cooperative Societies was being resolved under the Industrial Disputes Act, 1947 (in short 'ID Act') till the Division Bench of this Court rendered its decision in Veerashaiva Co-operative Bank's case, wherein the question referred was whether a dispute relating to termination of the services of an employee of a Co-operative Society to which the KCS Act is applicable, is a dispute that can be sought to be adjudicated upon by a labour forum under the provisions of the ID Act is of such importance with any decision thereon having wide impact The Division Bench while considering the various case laws held that the jurisdiction of the Labour Court is excluded. These petitions are filed challenging the subsequent amendments brought in the KCS Act and for re-consideration of the decision in Veerashaiva Co-operative Bank's case.
6. The State has filed statement of objections defending the amendment introduced to the KCS Act. It is also contended that the learned Single Judge has to follow the Division Bench order and more so the decision in Agra Dist. Co.op. Bank Ltd. v. Prescribed Authority, Supreme Court 2001-l-LLJ 1404 is not applicable. Therefore, this Reference is incompetent.
7. The main contention of the petitioners is that the ID Act is a pre-constitutional legislation and by virtue of Article 372 read with Article 254 and item 22 of List III of VII Schedule to the Constitution, the Parliament has the power to pass the law on industrial disputes and the State of Karnataka has no legislative competence to encroach on the occupied field. Therefore, the amendment Act deserves to be declared as invalid.
8. In the alternative, it was submitted, having regard to the scheme of the ID Act and its purpose being a beneficial one, the Forum prescribed under the KCS Act must be declared as an alternative Forum for resolving industrial disputes arising among the workers of a Co-operative Society, tt is also contended that the right of worker to be represented by the Union is denied and the Presiding Officer is not having the qualification of a Judge. Therefore, the amendment is liable to be set aside.
9. In reply to the above contention, the learned Government Advocate submitted that the reference made by the learned Single Judge was incompetent, otherwise also it is with in the competence of the State to make the amendment. The question of representing the union does not arise nor it is necessary that the Presiding Officer should have the qualification of a Judge. Therefore no relief as prayed for can be granted.
10. We have heard Sri M.C. Narasimhan, Sri K. Subba Rao and Sri Kasturi at length on behalf of the petitioners and the learned Government Advocate on behalf of the State, perused the material on record and the case laws on the point.
11. Before considering the respective arguments, it will be necessary to extract the relevant portion of Section 70 of the KCS Act, which reads as under:
'70. Disputes which may be referred to Registrar for decision - (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society arises -
(a)...........
(b).........
(c)...........
(d) between the society and any other co-operative society, (or a credit agency).
such dispute shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purpose of Sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society namely .
(a) ..........
(b) ..........
(c) ...........
(d) any dispute between a co-operative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a co-operative society.'
12. Section 70 of the Act starts with a non-obstinate clause that 'notwithstanding anything contained in any law, for the time being in force'. A bare reading of Clause (d) of Sub-section 2 of Section 70 reveals that any dispute between a Co-operative Society and its employees including a dispute pertaining to terms of employment, working conditions and disciplinary action taken by a Co-operative Society against its employees, can be effectively adjudicated upon by the Registrar by following the procedure provided under Section 71 of the Act which provides for the manner in which such disputes are to be disposed of.
Admittedly, there are two distinct Acts i.e., the ID Act and the KCS Act.
13. It is settled that provision of one Act cannot be a ground to declare the other Act as ultra vires for not having that provision in that Act. It is also settled proposition of law that if two interpretations are possible, incongruity has to be avoided. If the language is clear, the same should be read. One cannot add or subtract to frustrate the purpose and object of amendment. It is settled that presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles and the burden of proving all the facts which are requisite for the constitutional invalidity, is thus upon the person who challenges the constitutionality. No doubt, the constitutionality of a provision can be challenged on the ground that it is in contravention of any fundamental right specified in para - III of the constitution or that it is not within the legislative competence of the legislature which has passed the enactment or there is contravention of any mandatory provision of the constitution which imposes limitation upon the power of the legislature.
14. The State is competent to legislate exclusively on matters pertaining to co-operative societies as per Item 32 of List II. It is a well known principle of Constitutional law that the 'words' occurring in the entries must receive their widest connotation and should include all ancillary, implied powers which would make them effective and meaningful. Besides, the State is also given the power to legislate along with the Parliament in respect of matters pertaining to industrial disputes under Item 22 to VII Schedule as occurring in concurrent list.
15. A perusal of the record reveals that the subject matter of amendment Act impugned in the Writ Petition is enacted by the Legislature in exercise of the power conferred under Entry 32 to List II of the VII Schedule to the Constitution of India which deals inter alia with Co-operative Societies and the bill which was passed by the Legislators of Karnataka was reserved for the assent of the President. The original records produced by learned Government Advocate, however, disclose that the amendment bill 2 of 1997 was introduced in the Legislative Assembly on 25.8.1997 and was passed by the Legislative Assembly on 14.5.1998 and was passed by the Legislative Council on the same day ie., 14.5.1998. Thereafter, since the provisions of Clause 3 were repugnant to the Industrial Disputes Act, 1947 which is an existing law the bill was forwarded to the Governor for reserving the same for the assent of the President of India. The Governor by order dated 14.6.1998, reserved the Bill for the assent of the President and the President of India gave his assent on 18.3.2000, the same was published in the gazette on 27.3.2000 and amended provision has come into effect from 20.6.2000.
16. So far as the argument regarding legislative competence is concerned, as stated, the State is also given the power to legislate along with the Parliament in respect of matter pertaining to industrial disputes under Item 22 to VII Schedule as occurring in concurrent list. It is also equally well known that where the legislative competence of a legislature to enact a law is impugned, the law can be justified as falling within one or more entries of the relevant legislative lists, so also parts of it may be justified falling under one Entry and parts under another. A reference can be made to the decision of the Supreme Court in State of Bombay v. Narotham Das, AIR 1959 SC 69 and State of Bombay v. Balsara, AIR 1951 SC 318. Therefore, it is futile to contend that the State has no legislative competence to amend Section 70(2)(d) of the KCS Act by ousting the jurisdiction of the Labour Court or Industrial Tribunal, as it can do so in exercise of powers under both Entries referred to above. Under the circumstances, the amendment cannot be said to have no competence.
17. So far as the argument regarding repugnancy between the State law and the law made by the Parliament is concerned, Article 254(2) of the Constitution, in that regard, reads as under:
254: Inconsistency between laws made by Parliament and laws made by the Legislatures of States:
(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent list, then, subject to the provisions of Clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect of one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature or such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State.
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
In view of the said entry 32 in List 2 of VII Schedule to the Constitution, the legislative competence of the Legislature cannot be disputed. The amendment Act received the assent of the President on 18.3.2000 and therefore, the amendment is saved even though, as argued, it is repugnant to some of the provisions of the Central Act i.e., Industrial Disputes Act in matters stated under Section 70(2)(d) of the KCS Act.
18. So far as the argument pertaining to the question of right of workers to be represented by the Union is concerned, it is not tenable. It is seen from the definition under Section 2A of the ID Act, that a workman can raise an industrial dispute in cases of an employer discharging, dismissing, retrenching or otherwise terminating the services of an individual workman and such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman or union of workmen is a party to the dispute. At the same time, it is also seen that the workman cannot make a dispute of a general nature. In other words, the dispute pertaining to charter of general demands can be espoused collectively by the union only and not by an individual. Therefore, the argument that the union is deprived of the opportunity to raise a dispute is in no way attracted and on that basis, the amendment cannot be quashed. That apart, nothing can be added to the clear intention of the amendment and on this ground also the amendment cannot be held to be invalid. No doubt, the term 'ultra vires' means 'beyond the power or legal authority'. In the instant case, as discussed, it was within the competence of the State to make an amendment. The amendment so made received assent of the President of India. The argument of Mr. Kasturi, learned Senior Counsel that even if the assent has been given by the President on the State Act, the same is not binding, cannot be accepted, in view of the above discussion. More so, no material has been placed to substantiate the argument. Therefore, the said amendment cannot be held to be ultra vires.
19. So far as the argument that the Statute excludes jurisdiction of an established Court or Tribunal, a strict construction will be adopted and the words of the statute will be given a restricted meaning. As already stated, even under the ID Act the individual can raise dispute without the aid of the union. Similarly, such dispute can also be resolved by the Authority appointed under the Cooperative Societies Act. When the KCS Act expressly excludes the jurisdiction of the Labour Court and the Industrial Tribunal in respect of matters covered under Section 70 the provisions of the I.D. Act stand excluded to that extent only. In respect of all matters which are not covered under Section 70, the I.D. Act applies.
20. The other argument raised is that the Registrar of Societies is not a trained judicial person where the Presiding Officer of the Labour Court or Industrial Tribunal is a qualified District Judge, and therefore, Section 70 should be declared as invalid. The argument is not attracted as the powers which have been granted to a Judge of Labour Court or Industrial Tribunal are quasi-judicial in nature. Further, he has been empowered under the statute and enjoined to resolve the dispute therein. Similarly, the competent authorities appointed under various Acts like Shops and Commercial Establishments Act, Payment of Wages Act, Workmen's Compensation Act, Employees' State Insurance Act, are exercising their power to adjudicate the dispute pertaining to various labour matters in spite of the fact that they are not qualified as District Judge. Yet, they are functioning as Presiding Officers. Be that as it may. The other argument that the Registrar is likely to be biased in favour of management is also not a ground to hold the amendment invalid as the aggrieved parties are always entitled to challenge the individual orders, if necessary.
21. So far as the contention of the learned Government Advocate that the reference was incompetent as the learned Single Judge is bound to follow the decision of the Division Bench in Veerashaiva Co-operative Bank's case is concerned, it cannot be disputed that the learned Single Judge is bound to follow the decision of the Division Bench. The proposition of law is not disputed. The contention has some substance. A reference can be made to the decision of the 5 Judges Bench of this Court in B. Haleshappa v. State of Karnataka and Ors., ILR 2002 KAR 4306 decided on 23.8.2002 and the decision of the Supreme Court in Pradip Chandra Parija v. Pramod Chandra Patnaik, AIR 2002 SC 296. However, this controversy is involved in number of cases which are tagged to this case and the matter is of great importance. Heard the matter at length. As agreed by the parties this Full Bench considers the issue and decides the reference upholding the validity of the amendment and in view of this it is not required to reconsider the view taken by Division Bench in Veerashaiva Co-operative Bank's case (supra).
22. Now we take up the cases cited before us.
23. It is pertinent to note that the effect of the provisions of Section 70(2)(d) of the KCS Act regarding ouster of jurisdiction came up for consideration before this Court in Harugeri Urban Cooperative Bank v. State of Karnataka, 1981 (1) Kar.L.J. 136 and Government Employees Co-operative Bank Ltd. v. Marthanda Bhima Hangal, ILR 1976(1) KAR 111. This Court held that after the amended provisions of the Societies Act came into force, both the Registrar of Societies and the Industrial Tribunal/Labour Court, under the Industrial Disputes Act had concurrent jurisdiction to decide the disputes. The choice was given to the aggrieved person to choose either of the Forums i.e, under the ID Act or the KCS Act with a restriction that once the Forum was chosen, the same should be pursued to the logical end and had the effect of exhausting the remedy. This view continued to hold the field till the decision rendered by the Division Bench in M/s. Veerashaiva Co-operative Bank Ltd. v. Presiding Officer, Labour Court and Ors., ILR 2000 KAR 3743 decided on 9.3.2000, and Rajajinagar Co-operative Bank Ltd. v. Presiding Officer, 2002(1)LLJ 684 decided on 27.8.2001. As stated, we are agreeing with the reasoning of Veerashaiva's case.
24. The other case which is relied by the petitioner in support of their contention about the invalidity of the amendment Act is Cooperative Central Bank Limited v. Addl. Industrial Tribunal, Andhra Pradesh, : (1969)IILLJ698SC wherein it has been laid down by the Supreme Court as follows:
'It is no doubt true that the Act is an enactment passed by State Legislature which received the assent of the President, so that, if any provision of a Central Act, including the Industrial Disputes Act, is repugnant to any provision of the Act, the provision of the Act will prevail and not the provision of the Central Industrial Disputes Act. The general proposition urged that the jurisdiction of the Industrial Tribunal under the Industrial Disputes Act will be barred if the disputes in question can be competently decided by the Registrar under Section 61 of the Act is therefore, correct and has to be accepted.'
The above said observations have been relied upon by the Division Bench of this Court in RAJAJINAGAR CO-OPERATIVE BANK LIMITED v. PRESIDING OFFICER (supra). However, the decision in CO-OPERATIVE CENTRAL BANK LIMITED v. INDUSTRIAL TRIBUNAL ANDHRA PRADESH HYDERABAD is not helpful in the facts of the present case as in that case as already culled out above, the Supreme Court has specifically observed that when the Act has received the assent of the President the provisions of the Act would prevail and not the provisions of the I.D. Act. Their Lordships in that case observed that transfer of some of the employees and the fact that the dispute has been raised as regards to the provisions of Section 61 of the Andhra Pradesh Co-operative Societies Act as it then existed which did not exclude the jurisdiction of Labour Courts and Industrial Tribunals. On the fact of that case, the Apex Court found that the dispute that was referred to Industrial Tribunal did not fall within the ambit of Section 61 and held that Industrial Tribunal had jurisdiction to decide the dispute. On the same ground the decision in Gujarat State Co-operative Land Development Bank Limited v. P.R. Mankad and Anr., : [1979]2SCR1023 is also not helpful to the petitioner. Similarly the decision of the Supreme Court in Agra Co-operative Societies Act v. Prescribed Authority, 2001(1) LLJ 1404 decided on 27.2.2001, is also not helpful as in that case having regard to the provisions of Section 70 of the UP Co-operative Employees Service Regulation and having regard to the earlier decision of the Co-operative Central Bank Limited v. Addl. Industrial Tribunal, Andhra Pradesh referred to above and the fact that the question of maintainability of the dispute between the Labour Court had not been raised at the earlier point of time though Writ Petitions had been filed before the High Court when the matter was pending before the Labour Court and having regard to the contents of the provisions of Section 70 of the UP Co-operative Societies Act as it then existed as on 9.5.1980, the Supreme Court held that once the petitioners in the said case had approached the Labour Court they must pursue it to its logical end rather than stating another proceeding on the new enactment.
25. On the other hand in R.C. Tiwari v. M.P. State Cooperative Marketing Federation Limited, : (1997)IILLJ236SC , the Supreme Court after considering the provisions of M.P. Co-operative Societies Act and the I.D. Act, Section 10, which is identical to the provisions of Section 70 of the K.C.S. Act held that the reference under Section 10 of the I.D. Act has to be excluded in view of the specific provisions in Societies Act pertaining to disciplinary proceeding against the employee and contesting the earlier decision of the Supreme Court in CO-OPERATIVE CENTRAL BANK LIMITED v. ADDL. INDUSTRIAL TRIBUNAL, ANDHRA PRADESH (supra), on the ground that the said decision has been rendered on the basis of the relevant provisions of Andhra Pradesh Co-operative Societies Act which had come up for consideration before the Supreme Court.
26. A Division Bench of this Court in VEERASHAIVA COOPERATIVE BANK LIMITED v. PRESIDING OFFICER, LABOUR COURT(supra) following the decision in R.C. TIWARI v. M.P. STATE CO-OPERATIVE MARKETING FEDERATION LIMITED (supra), and after referring to the other decision of the Supreme Court has held that the remedy provided under Section 10 of I.D. Act is clearly excluded in view of the provisions of the K.C.S. Act and therefore the reference to the Labour Court under Section 10 of the I.D. Act was not maintainable. As the said decision is based upon the provisions of the Act and the decision of the Supreme Court, the law declared by the Apex Court is binding and has to be followed. Otherwise also we do not find any reason to disagree with the said judgment of this Court as stated.
27. It is also relevant to point out that all those judgments were rendered prior to the amendment of Section 70 by Karnataka No. 2 of 2000 where there was no express exclusion of the jurisdiction of the Labour Courts or Industrial Tribunals to deal with the disputes arising under Section 70. Probably, because of the conflicting judgments, the Legislature thought it fit to make its intention clear by amending Section 70 by which they expressly excluded the jurisdiction of Labour and Industrial Tribunals to deal with disputes arising under Section 70.
28. Once the validity of the amendment is upheld as discussed, and when the law expressly bars the jurisdiction of Labour Courts and Industrial Tribunals to decide the disputes arising under Section 70, the aforesaid judgments rendered by the Division Bench of this Court would stand vindicated.
29. A reference can be made of the decision in Sagarmal v. Distt. Sahkari Kendriya Bank, 1997(9) SCC 354 decided on 1.10.1996 wherein removal of an employee by the co-operative bank was challenged and the High Court held that the reference under Section 10(1)(d) of such removal was incompetent and the award made therein was a nullity and distinguished the Full Bench decision in Rashtriya Khadan Mazdoor Sahakari Samiti Limited v. Presiding Officer, Central Govt. Industrial Tribunal-cum-Labour Court, 1975 MPLJ 583. Their Lordships observed that the only question before the High Court was the competence of a reference under Section 10 of the I.D. Act, and not the availability of the remedy under the Madhya Pradesh Co-operative Societies Act or the Madhya Pradesh Industrial Relations Act. The view taken by the High Court was that the reference under Section 10 of the I.D. Act, was incompetent and, therefore, the award made therein is a nullity and does not suffer from any infirmity. Under the circumstances, in view of the amendment applicability of I.D. Act is barred and a nullity.
30. It is seen that a Co-operative Society is constituted and registered under the statute and such registered body has to follow the mandatory provisions of Rules and Regulations. The employees of the Co-operative Society may also be governed by the contract of personal service, but whenever dispute touching the constitution, management or business of a co-operative society arises between a society and another co-operative society and so also the disputes arising regarding the terms of employment, working conditions and disciplinary action taken by the co-operative society, such disputes may be adjudicated by the Registrar of the Co-operative Societies as stated. A reference can be made to the decision taken by the Supreme Court in Ram Sahan Ral v. Sachiv Samanaya Prabandhak, : (2001)ILLJ1073SC , wherein it was observed that the mere fact that there may be occasions where the Union or the Federation of the Societies may raise certain demands which may not fall within the ambit of Section 70 of the K.C.S. Act and cannot be decided by the Registrar or his nominee and that such disputes can be referred to the Industrial Tribunal or Labour Court, would not render the provisions of the Amendment Act unconstitutional as the Amendment Act incorporates the provisions ousting the jurisdiction of Industrial Tribunal or Labour Court only in respect of matters which can be decided by the Registrar or his nominee in respect of a dispute under Section 70 of the K.C.S. Act .
31. In view of what we have discussed above, we hold that the provisions of Section 70 of Karnataka Co-operative Societies (Amendment) Act, 1997 which has come into effect from 20.6.2000 are valid with the legislative competence and constitutional. Therefore, no reconsideration is required as stated.
32. No other point was argued before us.
33. As discussed and for the reasons stated above, the decision of this Court in M/s. VEERASHAIVA CO-OPERATIVE BANK LIMITED v. PRESIDING OFFICER, LABOUR COURT AND ORS. (supra) does not require any reconsideration. The matters are referred to learned Single Judge for deciding the cases accordingly. The Writ Petitions shall be listed before the learned Single Judge for disposal on merits, in accordance with law.