L. Narasimha Reddy, J.
1. In this batch of writ petitions, common questions of fact and law arise. Hence they are disposed of through a common judgment.
2. The petitioners in this batch of writ petitions are employed in the Vasavi Cooperative Urban Limited, Hyderabad, the 1st respondent herein (hereinafter referred to as 'the Bank'). Through individual orders dated 19-4-2003, their services were terminated. The reasons for termination, as stated in the orders, are that there is severe liquidity crises in the Bank, resulting in imposition of restrictions on the normal business by the Reserve Bank of India under Section 35A of the Banking Regulations Act and that the limits of expenditure imposed under Section 116C of the A.P. Co-operative Societies Act (For short 'the Societies Act') and the staffing pattern approved thereunder, were exceeded. The petitioners were extended the benefits of one month's notice pay, service compensation contemplated under Section 47 of the A.P. Shops and Establishments Act, 1988 (for short 'the Shops Act') and salary for the period from 1-4-2003 to 19-4-2003.
3. The petitioners contend that the orders of termination are contrary to the specific provisions of law contained in various enactments and the action of the 1st respondent-bank was unreasonable, illegal and arbitrary. They contend that the Union of the petitioners-employees had submitted representations and complaints to the Reserve Bank of India (RBI) as well as the Registrar of Co-operative Societies, the 2nd respondent, about the unhealthy trend, which was set in the Bank, but was of no avail. They further contend that sensing certain drastic steps in view of the contemporary developments, the Union addressed letter dated 16-4-2003 and sought for a meeting with the Bank to resolve the crisis. A reply dated 17-4-2003 is said to have been received from the 2nd respondent wherein it was indicated that steps are being taken to assess the work load and to make an attempt to revive the Bank. The petitioners contend that the request for a meeting was not acceded to and, to their surprise; the impugned orders of termination were issued. Hence, the present writ petitions.
4. It is firstly contended that the Shops Act governs the relationship of the petitioners with the bank and the provisions of Societies Act cannot supersede or override those of the Shops Act and that Section 47 of the Shops Act was not complied with, while issuing orders of termination. The 2nd contention is that the provisions of the Industrial Disputes Act are also applicable. They contend that the step taken by the respondents amounts to rationalization or restructuring and that the procedure contemplated under Section 9A of the Industrial Disputes Act (for short 'the ID Act') was not followed, the impugned proceedings cannot be sustained. They further contend that the principle of 'last come go first' was also not observed.
5. In the counter-affidavit filed by the 1st respondent, it is stated that, taking into account the volume of the business and the parameters of Section 116C of the Societies Act, the 2nd respondent, through his proceedings dated 14-11-1997, approved and fixed the strength at 340. It is stated that 60 additional posts were sanctioned/ approved by the 2nd respondent, through his proceedings dated 20-7-1999. The bank pleads that ignoring this approved staff structure, 350 excess appointments were made in the recent past, and that it became one of the factors for deterioration of its financial position. Since it was not possible to tide the bank over the financial crisis, it has been resolved to adhere to the staff structure to the approved level and to terminate the services of the others, duly following the procedure prescribed under the relevant enactments. It is averred that the benefits, as provided for under Section 47 of the Shops Act, have been meticulously calculated in respect of each of the petitioners and were extended, along with the order of termination itself. The 1st respondent contend that the question of, following the procedure stipulated under Section 9A of the ID Act does not arise, since the 1st respondent did not rationalize or restructure the approved strength. The financial position of the Bank is also presented with reference to facts and figures.
6. Sri S. Ravindranath, learned Counsel for the petitioners, in addition to elaborating the contentions raised in the affidavit, has also advanced the contention that the impugned proceedings are also violative of Section 116C of the Societies Act, since the approval of the 2nd respondent was not obtained before resorting to termination. He has placed reliance upon the judgments of this Court as well as the Supreme Court in support of his contentions that the impugned proceedings are violative of the provisions of the Shops Act, Societies Act and the ID Act. He submits that the respondents have effected deductions from the amounts payable under Section 47 of the Shops Act, towards recovery of loans and thereby there is non-compliance with the said provision.
7. As regard ID Act, placing reliance upon the judgment of the Supreme Court in Lokmat Enterprises Pvt., Ltd. v. Shankarprasad, : (1999)IILLJ600SC , and the judgment of this Court in W.P. No. 8923 of 2002 and batch dated 26-7-2002, the learned Counsel submits that the orders of termination are the result of rationalization of the staff structure and the same could have been resorted to, only in accordance with the procedure prescribed under Section 9A of the ID Act. Since the said procedure was not complied with, the learned Counsel submits, the orders of termination cannot be sustained. Disagreeing with the contention that no rationalization has taken place, the learned Counsel submits that irrespective of the fact whether an employee was within the approved strength, or whether the appointment was only temporary in nature, once it is decided by the Management to get rid of a particular number of employees, adherence to procedure under Section 9A of the ID Act is mandatory. It is his contention that the Bank is an 'Industry' within the meaning of Section 2(s) of the ID Act.
8. Shri Ashok Anand Kumar, learned Standing Counsel for the 1st respondent-Bank, on the other hand, submits that all the petitioners were extended the benefits, which they were entitled to under Section 47 of the Shops Act. As regards deduction, the learned Counsel submits that having regard to the definition of 'wages' occurring in the Shops Act, it is not at all impermissible for making deductions of the amounts, which the employee is due to the Bank.
9. So far as compliance with Section 9A of the ID Act is concerned, the learned Counsel submits that there is neither any factual basis nor legal justification to invoke the same. According to him, adherence to the approved strength cannot be termed as rationalization or reduction of staff strength. It is his contention that even where rationalization takes place, compliance with the provisions would arise, if only the instance falls within the ambit of Section 25J of the ID Act; and submits that such a situation does not arise in this case. He places reliance upon the judgment of the Supreme Court in Krishna District Co-operative Marketing Society Limited v. N.V.P. Rao, : (1987)IILLJ365SC , in support of his contentions. He further submits that Section 116C requires the Societies registered under the Societies Act to ensure that the establishment expenditure does not exceed 30% of the gross profit or 2% of the working capital and the present attempt is only to ensure compliance with the same. According to him, there is nothing in this Section, which requires prior approval of the 2nd respondent before termination of any employee. The learned Counsel also submits that the Bapk is not an 'industry' as defined under Section 2(J) of the ID Act.
10. The 1st respondent-Bank had received serious set back in its business in the recent past. The reasons therefor are not the subject matter of this batch of writ petitions. Several Directors were arrested and prosecution was launched against them. The RBI as well as the 2nd respondent have initiated various steps in this regard.
11. The petitioners were employed in various posts in the last about 2 years. The respondents have taken exception to the appointment of the petitioners and several others in excess of the approved strength of 400. As many as 350 of such employees were chosen for termination.
12. In terminations of this nature, the function of the Courts is only to ensure the compliance with the provisions of the relevant enactments. In W.P.No. 8923 of 2002 and batch, this Court while dealing with the retrenchment of an employee under Section 25F of the ID Act, observed as under:
'Section 25F(a) requires indication of reasons for retrenchment in the notice to be served on the employee. However, such a notice can be dispensed with if the employer pays the wages for one month. This factor diminishes the importance of reasons. As long as the discharge of employee is not by way of punishment, the reasons for retrenchment even when they are stated in the notices are not justiciable. When law concedes that much freedom to an employer to plan his activity, subject of course to following the conditions stipulated therein, it is not open to the retrenched employee to plead that there was no justification for the employer in resorting to the retrenchment.'
13. Therefore, it has to be seen as to whether there is any non-compliance with the provisions of any enactment. Even in this regard, a distinction needs to be maintained. If the non-compliance with any statute can be established without the necessity of verification of facts, this Court can certainly adjudicate upon the same and grant necessary relief. However, where there exist disputed questions of fact and appreciation of evidence to record findings on such questions is necessary, it is not possible to undertake the same in writ petitions under Article 226 of the Constitution of India. The parties may have to be required to avail the remedy provided for under the relevant statutes.
14. Before dealing with the principal submissions advanced on behalf of the petitioners, as stated in the affidavit, it is necessary to deal with the submission made by the learned Counsel for the petitioners across the Bar, which is to the effect that the respondents could not have retrenched the petitioners, without obtaining prior approval of the 2nd respondent, as required under Section 116-C of the Societies Act. Section 116-C reads as under:-
'116C. Staffing pattern of societies .--(1) A society shall have power to fix the staffing pattern, qualifications, pay scales and other allowances for its employees with the prior approval of the Registrar of Co-operative Societies subject to the condition that expenditure towards pay and allowances of the employees shall not exceed two percent of the working capital or thirty percent of the Gross profit, in terms of actuals in a year whichever is less.
(2) No appointment or removal of a Chief Executive by whatever name called of any society, or class of societies as may be prescribed which are in receipt of financial aid from the Government, shall be made without the prior approval of the Registrar of Co-operative Societies.'
This Section requires the societies constituted under the Societies Act to comply with two principal requirements. The first one is that the staffing pattern of each society shall be fixed with the prior approval of the Registrar of Co-operative Societies; and the 2nd one is about the limits of the expenditure on establishment vis-a-vis the net profits or capital of the society. Sub-section (2) has no application to this case. The petitioners do not complain about any of these two aspects. On the other hand, it is the 1st respondent, which contends that it was with a view to ensure compliance with these two aspects that the retrenchments were resorted to.
15. There is nothing to indicate in Section 116C of the Societies Act that prior approval of the 2nd respondent is necessary to retrench any employee of a society. Approval is needed only for the purpose of fixing the staffing pattern. Even if the said requirement is to be extended too far, it can only result in placing restrictions on alteration of staffing pattern, once approved. It is not the case of the petitioners that they were within the approved staffing pattern. Hence, this contention cannot be accepted.
16. One important aspect pleaded by the petitioners is that the 1st respondent did not comply with the provisions of Section 47 of the Shops Act. The nature of alleged non-compliance relates to the deductions effected by the 1st respondent from the benefits extended to some of the petitioners. Learned Counsel submits that such deductions are not permissible. He also submits that since the amount contemplated under Section 47 remains unpaid, it cannot be said that there was any valid termination. The contention of the respondents is that having regard to the definition of 'wages' under the Shops Act, no exception can be taken to such deductions. Equally important is the contention as regards the non-compliance with Section 9A of the ID Act. This contention is based on the allegation that the retrenchment of the petitioners is the result of restructuring or rationalization of the staffing pattern.
17. On behalf of the 1st respondent, strong objection is raised as to the permissibility of adjudication into such claims in the writ petitions. To counter this, reliance is placed upon several judgments of the Supreme Court as well as this Court by the petitioners in support of their contentions as regards the maintainability of the writ petitions and consequences of non-compliance with the statutory provisions. On the basis of the Judgment of the Supreme Court in Syed Azam Hussain v Andhra Bank Ltd., 1995 (2) LU 126, it is contended that the 1st respondent is an 'Industry', Relying upon the judgment in Lokmat case (supra) and the Judgment of this Court in WP No. 8923 of 2002 and batch, it is submitted that the respondents have not complied with Section 9A of the ID Act.
18. On a consideration of the cases referred to above and examination of the relevant provisions, it is evident that the question as to whether the 1st respondent is an 'Industry' and thereby it is required to follow the provisions of Section 9A of the ID Act needs recording of finding on certain disputed questions of fact. Whether the 1st respondent has undertaken any rationalization, whether the retrenchment of the petitioners is the consequence and whether it was under obligation to follow Section 9A cannot be decided without there being specific pleadings before a Court, which can record evidence and render its findings. It is true that the Supreme Court in Lokmat case (supra) and this Court in W.P.No. 8923 of 2002 and batch, dealt with the circumstances under which Section 9A gets attracted. However, it needs to be noticed that the matters came before the Supreme Court as well as this Court only after adjudication by the Tribunals constituted under the ID Act. It was on the basis of the findings recorded therein, that the adjudication was undertaken in the said cases, it is not the case here.
19. Similarly, the factum of deduction from the benefits extended to some of the petitioners and the consequences flowing therefrom can be decided only after recording certain findings on certain issues touching on the conditions subject to which the loans or advances were extended to the petitioners while in service, the standing orders prevailing in the 1st respondent-Bank and also the interpretation of the term 'wages' in the light of the provisions of the Shops Act. It is not as if the petitioners have to approach different Tribunals or authorities for this purpose. It was held in Krishna District Co-operative Society Limited (supra) that it is permissible for an authority under the Shops Act to adjudicate upon the aspects covered by the ID Act also.
20. Having regard to these circumstances, this Court is of the view that the petitioners have to approach the authorities under the Shops Act or the Labour Court constituted under the ID Act for appropriate relief. A detailed discussion into the various contentions raised as regards non-compliance with several provisions of the Shops Act and the ID Act is not undertaken, because it may circumscribe the scope of adjudication before the concerned forum.
21. For the reasons stated above, the writ petitions are disposed of, leaving it open to the petitioners to work out their remedies in accordance with the provisions of the A.P. Shops and Establishments Act, 1988 and/or the industrial Disputes Act. The fact that the petitioners have accepted the benefits extended to them shall not be treated as their acquiescence in the validity of the orders of termination. There shall be no order as to costs.