Case Note & Summary
The judgment concerns three writ petitions arising from a dispute between Suvarnayug Sahakari Bank Ltd. (the Bank) and its former employee, Suresh Shivajirao Kale. The Bank had terminated Kale's services, leading to a dispute before the Co-operative Court under the Maharashtra Co-operative Societies Act, 1960. The Co-operative Court set aside the termination and directed payment of compensation of Rs. 31,00,000 in lieu of back-wages, with future interest at 6% per annum. Both parties appealed: the Bank challenged the setting aside of termination, and Kale sought reinstatement with full back-wages. The Maharashtra State Co-operative Appellate Court upheld the Co-operative Court's order. The Bank then filed two writ petitions challenging the appellate order, while Kale filed a separate writ petition seeking reinstatement. The High Court, after hearing arguments, dismissed the Bank's petitions and partly allowed Kale's petition by modifying the compensation amount to Rs. 35,00,000, considering the employee's age and length of service. The court held that the termination was illegal due to lack of proper inquiry, and that compensation was an appropriate remedy given the strained relationship between the parties. The court also affirmed the jurisdiction of the Co-operative Court under Section 91 of the Act.
Headnote
A) Service Law - Termination - Illegal Termination - Compensation in lieu of Reinstatement - Maharashtra Co-operative Societies Act, 1960, Sections 91, 98 - The employee's termination was set aside as it was without proper inquiry. The Co-operative Appellate Court awarded compensation of Rs. 31,00,000 in lieu of back-wages, which was upheld by the High Court. Held that compensation is appropriate when reinstatement is not feasible due to strained relations. (Paras 2-10)
B) Co-operative Law - Dispute - Jurisdiction - Section 91 Maharashtra Co-operative Societies Act, 1960 - The dispute regarding termination of an employee of a co-operative bank falls within the jurisdiction of the Co-operative Court under Section 91. The High Court affirmed the jurisdiction. (Paras 2-5)
Issue of Consideration
Whether the Co-operative Appellate Court was justified in setting aside the termination order and awarding compensation in lieu of back-wages?
Final Decision
The High Court dismissed the Bank's writ petitions and partly allowed the employee's writ petition by modifying the compensation amount from Rs. 31,00,000 to Rs. 35,00,000, with interest at 6% per annum from the date of the Co-operative Court's order until payment.
Law Points
- Termination without proper inquiry is illegal
- Compensation in lieu of reinstatement
- Section 91 of Maharashtra Co-operative Societies Act
- 1960
- Section 98 of Maharashtra Co-operative Societies Act
Case Details
2023 LawText (BOM) (10) 66
Writ Petition No.12485 of 2016 with Writ Petition No.12483 of 2016 and Writ Petition (Stamp) No.34427 of 2016
Mr. Shankur P. Thorat a/w Mr. Gurunath B. Walawalkar for the Petitioner-Bank; Mr. Shrivallabh S. Panchpor a/w Mr. G.D. Tamboli i/b M/s. SNP Legal for Respondent No.1 in WP Nos.12485/2016, 12483/2016 and for Petitioner in WP (Stamp) No.34427/2016
Suvarnayug Sahakari Bank Ltd. (in WP 12485/2016 and WP 12483/2016); Suresh Shivajirao Kale (in WP (St) 34427/2016)
Suresh Shivajirao Kale and Prakash Kamble (Ashtekar) (in WP 12485/2016 and WP 12483/2016); Suvarnayug Sahakari Bank Ltd. and Prakash Kambale (Ashtekar) (in WP (St) 34427/2016)
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Nature of Litigation
Writ petitions challenging the judgment and order of the Maharashtra State Co-operative Appellate Court regarding termination of an employee of a co-operative bank.
Remedy Sought
The Bank sought to set aside the order of the Co-operative Appellate Court which upheld the Co-operative Court's order setting aside termination and awarding compensation. The employee sought reinstatement with full back-wages.
Filing Reason
The Bank challenged the order of the Co-operative Appellate Court dated 21 June 2016 which upheld the Co-operative Court's order setting aside the termination of the employee and awarding compensation of Rs. 31,00,000 in lieu of back-wages.
Previous Decisions
The Co-operative Court No.1, Pune, in Dispute No.184 of 2008 set aside the termination order and directed payment of compensation of Rs. 31,00,000 with future interest at 6% per annum. The Co-operative Appellate Court upheld this order.
Issues
Whether the termination of the employee was illegal?
Whether compensation in lieu of reinstatement and back-wages was appropriate?
Submissions/Arguments
The Bank argued that the termination was valid and the Co-operative Court had no jurisdiction.
The employee argued that the termination was without proper inquiry and sought reinstatement with full back-wages.
Ratio Decidendi
Termination without proper inquiry is illegal. In cases where reinstatement is not feasible due to strained relations, compensation in lieu of back-wages is an appropriate remedy. The Co-operative Court has jurisdiction under Section 91 of the Maharashtra Co-operative Societies Act, 1960.
Judgment Excerpts
The judgment and order dated 21 June 2016 has been passed by the Co-operative Appellate Court in two proceedings bearing Appeal No.169 of 2015 and Appeal No.178 of 2015.
The Co-operative Court set aside termination order of the Respondent-employee and directing payment of compensation of Rs. 31,00,000/- in lieu of back-wages alongwith future interest at the rate of 6% per annum.
Procedural History
The employee filed Dispute No.184 of 2008 before the Co-operative Court No.1, Pune, challenging his termination. The Co-operative Court set aside the termination and awarded compensation. The Bank filed Appeal No.169 of 2015 and the employee filed Appeal No.178 of 2015 before the Maharashtra State Co-operative Appellate Court, which upheld the Co-operative Court's order. The Bank then filed Writ Petition No.12485 of 2016 and Writ Petition No.12483 of 2016, and the employee filed Writ Petition (Stamp) No.34427 of 2016 before the High Court.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: Sections 91, 98
