ORDER
R. Gururajan, J.
1. The Workmen of Chikmagalur District Central Cooperative Bank Limited, represented by its General Secretary of Chikmagalur District Central Cooperative Bank Employees' Union and Ramachandra T.G. are before me challenging the orders dated 25.10.1999 issued by the Managing Director in terms of Annexure-A, the order dated 16.10.1999 issued by the Joint Registrar of Cooperative Societies in terms of Annexure-B/ order dated 25.10.1999 issued by the State Government in terms of Annexure-C, letter dated 27.10.1999 issued by the Deputy Registrar of Cooperative Societies, Chikmagalur in terms of Annexure-D in the case on hand. A direction is sought against the respondents from interfering with the terms of settlement dated 19.5.1999. The Union also wants this Court to declare Rule 17 of Karnataka Cooperative Societies Rules 1997 and Amendments to Sections 70(1), 70(2) and 70(3) of the Karnataka Cooperative Societies Act as unconstitutional, invalid and inoperative on the facts of the case.
2. Third respondent is Chikmagalur District Central Cooperative Bank Limited. Such Cooperative Banks are set up in the districts of the State. It is a Central Cooperative Bank at the district level with different types of societies affiliated to the said District Cooperative Central Bank. It is registered under the provisions of the Karnataka Cooperative Societies Act, 1959. Workmen of the Bank are members of the Trade Union. The bye-laws of the District Cooperative Central Bank enables the management or administration to deal with the conditions of service of employees to a certain extent. Petitioner association has been taking up the cause of the workmen and making representations from time to time. Several settlements have been entered into the matter of service conditions of the workmen of the bank in terms of settlement at Annexure-El, E2 and E-3. In the matter of scales of pay/ disputes have arisen and they have been resolved by way of settlements.
3. Petitioner Union made a demand on 1.5.1999 in the matter of certain service conditions to its members. After discussion and negotiations, the Management in its Board Meeting approved the proposal for revision of pay scales with certain terms and conditions. Same was unanimously adopted in the General Body Meeting of the Bank. Matter thereafter was taken up before the Conciliation Officer under Section 12(3) of the Industrial Disputes Act ('ID Act' for short). Notice was issued. Meetings were held. Ultimately, a settlement in conciliation under Section 12(3) of the Industrial Disputes Act was entered into in course of conciliation proceedings.
4. Petitioners refer to Rule 17 of the Karnataka Cooperative Operative Rules ('the Rules', for short). They also refer to the amendments made to Section 70 of the Karnataka Cooperative Societies Act ('KCS Act' for short). According to the petitioners, Rule 17 of the Rules and the subsequent amendment to Section 70 of the KCS Act could not come in the way of effective settlement in terms of the ID Act.
5. Petitioners state in para-13 of the petition that a resolution was passed by the General Body approving the settlement dated 20.5.1999. Bank appears to have sent approval to the Registrar of Cooperative Societies. In the meanwhile, petitioner Union took up the matter for implementation of the terms of settlement. There was correspondence in the matter. Bank obtained legal opinion in terms of the Annexurea Q-1 and Q-2. Bank wrote letters to the Deputy Registrar on 13.10.1999 to the Labour Commissioner on 22.10.1999 and to the Assistant Labour Commissioner on 26.10.1999. Bank thereafter agreed to implement the settlement of 19.5.1999 before the Labour Department. Arrears were made over on 8.9,1999 in terms of the settlement with effect from 1.5.1999. Pay Scales and Dearnesa Allowance were revised as per the terms of the Agreement from 1.5.1999. Thereafter, Managing Director of the Bank has issued an order dated 25-. 10.-1999 in terms of Annexure-A informing to reduce the pay scale and dearness allowance from what was agreed to under the settlement. Settlement provided for revision of pay scales with effect from 1.5.1999. However, in terms of Annexure-C, the date of implementation was stated to be effective from the date of the order dated 25.10.1999. Managing Director of the third respondent's Bank is now seeking to reduce the pay scale and also threatened to recover the amount due to the petitioner in terms of the communication. Petitioners with these facts are before this Court seeking for various prayers as referred to in the earlier paragraphs.
6. State Government has chosen to enter appearance and opposed the petition. State would say that the Cooperative Societies Act and Rules are complete in its nature. There is no ambiguity existed whatsoever in the KCS Act. The KCS Act is a self-contained code providing for consideration of disputes between the cooperative societies and their employees. Fixation or revision of pay scale of the employees of cooperative societies is one of the terms of the employment. Settlement between the management and the employees of the cooperative institution was to be entered into subject to the provisions of the KCS Act and Rules, more particularly Rule 17 of the Rules. They therefore say that they are right with regard to the impugned communications which are challenged in this petition. They further say that the object of the Rules is to improve the administrative and financial position as well aa development of the cooperative institution and to render effective banking services to its members and public at large. They want the petition to be dismissed.
7. Respondent No. 3 bank has filed an affidavit. Bank would say that in all cases/ unless scales are approved under Rule 17 of the Rules/ even if there is a settlement, the same will not be given effect to. Acceptance of settlement by the General Body in no way improve the situation so as to make the settlement binding and enforceable. The respondent Bank further says that the very existence of the Bank is at stake and is classified as Category-D as per the audit report, and that it is with great difficulty that the employees are still continued in service, and that as per the present situation it is very difficult to meet the establishment cost. The third respondent wants the petition,, to be dismissed. Petitioner has filed a rejoinder to the objections filed by the third respondent and has produced various reports.
8. Heard the learned Counsel for the petitioner Sri M.C. Narasimhan, learned Senior Counsel. He would argue that the impugned endorsements are required to be set aside on the peculiar facts of this case. He would invite my attention to the scope of Industrial Disputes Act vis-a-vis the Cooperative Societies Act. He would say that a settlement entered in conciliation is a statutory settlement and is binding on all parties. Such a statutory settlement cannot be subjected to further approval in terms of the endorsements. He would rely on several judgments in this regard in support of his submissions. Per contra, learned Government Advocate would argue that in terms of the Cooperative Societies Rules settlements are required to be approved, as otherwise, settlements have no force in law. He would also argue that the financial position of the bank is affected on account of the existing settlement. He wants the petition to be dismissed.
9. After hearing, I have carefully perused the material on record.
10. Section 70 of the Cooperative Societies Act reads as under:
70. Disputes which may be referred to Registrar for decision.
(1) XXX XXX XXX
(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) xxx
(b) xxx
(c) xxx
(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 terras of employment, working conditions and disciplinary action taken by a cooperative society notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947).
(e) xxx
The said provision has been subsequently amended in terms of the amended provisions.
Rule 17 of the Karnataka Cooperative Societies Rules, 1960 reads as under:
17. Officers and employees of Cooperative Societies, qualification, etc.,(1) Subject to the budget allotment sanctioned by the general body, the managing committee shall prescribe from time to time the strength of the establishment of the society and the scale of pay and other allowances admissible to each member thereof with the prior approval of the Government:
Provided that no post which is to be filled by deputation or otherwise of a Government Servant shall be created except with the prior approval of the Government.
2. No person shall be eligible for appointment to the posts mentioned below unless he possesses the qualification specified against them.
11. In the light of the said statutory provisions, let me see as to whether the impugned endorsements are in violation of the statutory provisions. Annexure-A is issued by the Managing Director of the Chikmagalur District Cooperative Central Bank Limited, Chikmagalur in the light of the Government Order dated 25.10.1999. The order dated 25.10.1999 is filed at Annexure-C. In the said order, the Government has stated, that in terms of powers under Rule 17 of the Rules a settlement has to be with certain conditions. The specific terms have been mentioned in Annexure-C. Annexure-B is a letter addressed by the Joint Director to the Managing Director with regard to settlement. Annexure-J is a settlement between the parties in terms of the settlement dated 19.5.1999.
12. Employees Union placed a charter of demands to the management of Chikmagalur District Central Cooperative Bank Limited on 1.5.1999 regarding the demands for revision of pay scales/ dearness allowance, house rent allowances, etc. to be effective from 1.7.1998 and the arrears of salary to be drawn from 1.5.1999. Bilateral agreement had been entered into before the Labour Commissioner on 17.6.1976 regarding revision of pay scales. It expired on 30.8.1985. Representatives of the Board of Management of the Bank and of the Union constituted a sub-committee to look into the matter relating to the improvements of service conditions of the bank employees. Recommendations were placed before the Board of Management. The Board approved the same and entered into a bilateral agreement with the employees' union. Management thereafter placed the demands made by the workmen on 1.5.1999 before the Board of Directors. After prolonged discussion, certain terms were emerged between the parties. Thereafter, in the absence of any amicable settlement between the parties, they approached the Assistant Labour Commissioner and the, Conciliation Officer to intervene in the matter, and with his assistance and interference, they have entered into a settlement in conciliation. Parties have signed before the Assistant Labour Commissioner, and the settlement is in conciliation.
13. Industrial Disputes Act provides for resolution of disputes by way of arbitration, adjudication, settlement, etc. Section 18 deals with settlement in terms of the I.D. Act. Section 18(1) binds the parties to the agreement whereas Section 18(3) provide for a conciliation settlement. Conciliation proceedings are available in terms of Section 12 of the ID Act. Settlements entered into in conciliation, as held by the apex court, has statutory protection in terms of the ID Act. Any settlement entered in conciliation certainly is -binding not only on the signatories to the settlement but also is binding on all the workmen - past, present and future.
14. Industrial Disputes Act is a Central Legislation. It is a Special Act dealing with the industrial units. Cooperative Societies Act is a general Act as compared with the I.D. Act. Cooperative Societies Act deals with various aspects of the cooperative societies in the matter. Therefore, it can be safely presumed that the I.D. Act is a Special Act as compared to the Cooperative Societies Act in so far as industrial disputes are concerned. Law is well settled that a settlement under the Special Act would prevail over the General Act. In fact, there are several litigations with regard to the power of the Registrar in the light of Rule 17 of the Rules. A Full Bench of this Court in Writ Petition No. 11380 of 1988 disposed of on 25.2.1992 (reported in : ILR1996KAR2069 } has considered the scope of the Karnataka Cooperative Societies Act, 1959 vis-a-vis the Industrial Employment (Standing Orders) Act, 1946, After noticing various aspects of the matter, the Full Bench has ruled that a rule made under the provisions of Cooperative Societies Act is a rule of general application and that it does not consider the individual cases, and that therefore, there was no scope for the rule to provide for the rule to provide for the circumstances prevailing in a particular industry, like a sugar industry. The Court ultimately holds that Rule 18 of the Cooperative Societies Rules was not specifically notified with reference to Section 13-B of the Standing Orders Act, and that the said rules would not exclude the operation of the Standing Orders Act in respect of matters covered by the said Rule 18 in the said judgment.
18. The Supreme Court in The Automobile Products of India and Ors. v. Rukmaji Bala and Ors. : (1955)ILLJ346SC , has ruled that the Labour Appellate Tribunal was error in holding that it had jurisdiction to impose conditions as a prerequisite for granting permission to the employer company to retrench its workmen while exercising its power under Section 22 of the 1950 Act read with Section 33 of the 1947 Act.
19. A Division Bench of the High Court of Judicature, Madras in Tiruchipalli Hirudayapuram Cooperative Bank Employees Union, Etc., Etc., v. Joint Registrar of Cooperative Societies, Tiruchirapalli, Etc., Etc. (1992)1 LLJ 747, has ruled that 'what the Registrar of Cooperative Societies has done was not only unorthodox but also not fitting with any precept of law' and that further ruled that 'by the impugned circular, the respondent cannot adjudicate over the settlements and unilaterally set at naught the settlements apparently fitting in with the provisions of the Industrial Disputes Act and that there is lack of jurisdiction and competency in law in this regard'. The said Division Bench has further held that Section 153 of the Cooperative Societies Act, 1983 could be availed of at all to review of or revise settlements 'arrived at under the Industrial Disputes Act and that such a settlement does not at all fall within the ambit of Section 153 of the Cooperative Societies Act, 1983.
20. This Court in Roshanand Ors. v. State of Karnataka and Ors. 1991(3) KLJ 159, has ruled that a Special Provision is not controlled by the General Provision; that the general provision does not make a dent in the special provision so long as it holds sway; and that only where the special provision cannot be invoked, the general provision takes over.
21. The Supreme Court in Rajasthan State Road Transport Corporation and Anr. Etc., Etc., v. Krishna Kant, Etc., Etc. : (1995)IILLJ728SC , has ruled reading as follows:
The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to Civil Courts. Indeed the powers of the courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to an industrial dispute.
22. In the light of the above referred judgments, this Court has to hold that a statutory' settlement in terms of the Industrial Disputes Act has to be respected, regarded and acted upon, since it has taken its birth from the statute, with the aid of conciliation, and, such a settlement cannot be subjected to further conditions by the Registrar of Cooperative Societies in exercise of Section 70 of the Karnataka Cooperative Societies Act. If any such power is conceded in favour of the Registrar, then, such concession would be running counter to the object of the special law' in bringing parties together by way of conciliation in a conciliation-settlement, and the supremacy of the conciliation settlement would be . diluted and in some cases it would be destroyed. Therefore, this Court has to strike a balance between Rule 18 and, the conciliation settlement in terms of the provisions of the Industrial Disputes Act. A conciliation settlement could not be subject to powers of the Registrar of Cooperative Societies as he has no jurisdictions power to impose his own conditions in terms of his power. Rule 17 in such case cannot be invoked at all. In the circumstances, I have no hesitation in accepting the argument of Sri Narasimhan that the various endorsements issued against the settlements have to be declared as unsustainable in law. I accept his arguments.
23. Coming to the prayer of striking down Rule 17, this Court has to take the said Rule 17 as being inapplicable to conciliation settlements. If so read, the object of both the Acts are achieved. In the circumstances, I would rather read down Rule 17 as being inapplicable to any of the conciliation settlement and therefore it is necessary for this Court to strike down the said rule.
24. This Court however has to notice certain factual position of the matter, including various settlements, in terms of the materials placed on record. If the management has any difficulty with regard to settlements there are avenues and methods are available in terms of the Industrial Disputes Act. Instead of availing that remedy, management cannot nullify a conciliation settlement by way of several endorsements.
25. In the circumstances, this petition is accepted. Impugned endorsements running contrary to the settlement are set aside. Ordered accordingly. No costs.