SHRI. TUSHAR BALIRAM BACHAV AND ORS vs NASHIK DISTRICT CENTRAL CO-OPERATIVE BANK LTD.

2026:BHC-AS:10655
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.11137 OF 2024
1. Shivaji Madhav Jadhav,
Age 34 years, Occu.: Service,
Rat/ Post Desrane, Taluka Kalvan,
District Nashik 423 501
ATUL
GANESH
KULKARNI
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.03.05
11:44:00 +0530
2. Ajay Ashok Sawant,m
Age 25 years, Occu.: Service,
R/at Post Nampur, Taluka Satana,
District Nashik 423 204
3. Kundan Popat Pawar,
Age 28 years, Occu.: Service,
Rat Post Bhaur, Taluka Kalwan,
District Nashik 423 501
4. Prashant Balasaheb Ghade,
Age 27 years, Occu. Service,
R/at Post Songaon, Tal. Niphad,
District Nashik 423 303
5. Shivbhushan S. Gavare,
Age 25 years, Occu.: Service,
R/at Post Mhalsakore, Tal. Niphad,
District Nashik, 422 290
6. Sunil Santosh Pagar,
Age 36 years, Occu.: Service,
R/at Post Ganesh Nagar,
Tal. Kalwan, District Nashik 423 501
7. Anita Dagu Thakare,
Age 31 years, Occu.: Service,
Rat Post Chandori, Tal. Niphad,
District Nashik 422 201
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8. Shilpa M. Katkade,
Age 31 years, Occu.: Service,
Rat Post Nandur Shingote,
Tal. Sinnar, District Nashik 422 606
9. Amol Bhausaheb Gunjal,
Age 23 years, Occu.: Service,
Rat Post Subhash Nagar, Makarand
Wadi, Tal. Deola, Dist. Nashik 423 102
10. Kiran Rohidas Bajare,
Age 32 years, Occu.: Service,
R/at Post Mhalsakore, Tal. Niphad,
District Nashik 422 290
11. Ravindra Ramdas Arote,
Age 38 years, Occu.: Service,
R/at Plot NO.16, Rasbhihari
Meri Link Road, Nirmal Nagar,
Panchavati, Dist. Nashik 422 003.
12. Sachin Dattu Surashe,
Age 22 years, Occu.: Service,
R/at Post Talaki Vinchur,
Tal. Niphad, Dist. Nashik 422 305.
13. Chetan Trambak Murkute,
Age 29 years, Occu.: Service,
R/at Post Mhalsakore,
Tal, Niphad, Dist. Nashik 422 490
… Petitioners
Vs.
Nashik District Central Cooperative Bank Ltd,
having its office at Old Agra Road, Oppo.
Hotel Samrat, Near CBS, Nashik 422 002
Through it’s Chief Executive Officer
… Respondent
WITH
WRIT PETITION NO.11138 OF 2024
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Raju Baban Darade & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.15136 OF 2022
Anil Pandurang Sonavane & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.14973 OF 2022
Tushar Baliram Bachav & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.14972 OF 2022
Deepak Parshram Deore & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.11139 OF 2024
Kiran Ambadas Ghuge & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.15135 OF 2022
Meghdeep Deepak Sawant & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
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WRIT PETITION NO.15146 OF 2022
Shekhar Bhausaheb Hjre & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.15134 OF 2022
Sonali Rajendra Shirke & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.15145 OF 2022
Suresh Baburao Dakhane & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.14974 OF 2022
Bharat Hari Mengale & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.6647 OF 2024
Sarika Sanjay Pawar & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
WITH
WRIT PETITION NO.6930 OF 2024
Shubhangi S. Sonawane & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
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WITH
WRIT PETITION NO.6922 OF 2024
Somnath Baburao Deore & Others … Petitioners
Vs.
Nashik District Central Cooperative Bank
Respondent
Limited, through its Chief Executive OFficer …
Mr. S.R. Nargolkar i/by Mr. I.M. Khairdi for the
petitioners.
Mr. Vishwanath Patil with Mr. Harshwardhan Karande
and Mr. Kedar Nhavkar for the respondent-Bank.
Mr. Hiraman Sukhdeo Nalawde, Manager,
Administration Department, is present.
CORAM : AMIT BORKAR, J.
RESERVED ON : FEBRUARY 27, 2026.
PRONOUNCED ON : MARCH 5, 2026
JUDGMENT:
1. As the questions of law and fact arising in all the present writ
petitions are common, all the petitions are being disposed of by
this common judgment.
2. By the present writ petitions filed under Article 227 of the
Constitution of India, the petitioners challenge the Judgment and
Award dated 20 May 2022 passed by the Industrial Court, Nashik,
in the complaints which form the subject matter of each petition.
3. The facts giving rise to the present proceedings are that the
workmen filed complaints alleging unfair labour practices under
Items 5, 6, 9 and 10 of Schedule IV of the Maharashtra
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Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971. The Industrial Court dismissed the complaints
solely on the ground that the staffing pattern had not received
approval. The petitioners were appointed more than ten years
prior to the filing of the complaints, some as clerks and others as
peons. According to them, though appointed against vacant posts
and engaged in work of permanent and perennial nature, they
were denied permanency and continued as temporary employees
for several years, thereby attracting Item 6 of Schedule IV. It was
further alleged that they were subjected to discrimination,
irrespective of merit, inasmuch as they were denied benefits and
privileges available to permanent employees performing identical
or similar work, constituting unfair labour practice under Item 5. It
was also contended that despite entitlement, they were not
regularised, resulting in violation of the applicable Standing
Orders and denial of benefits flowing from the settlement executed
between the Bank and the representative union, in contravention
of the provisions of the Maharashtra Industrial Relations Act,
1947, thereby attracting Items 9 and 10 of Schedule IV.
4. The petitioners set out, in paragraph 1 of the complaint, the
names of the employees represented, the posts held by them, their
educational qualifications, provident fund numbers, and the
consolidated wages paid to them. It was specifically pleaded that
they were appointed against vacant posts and possessed the
requisite qualifications for such posts. The petitioners averred that
they accepted appointment letters containing unfair and unlawful
terms owing to financial hardship and the necessity of
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employment. It was further pleaded that they had been
continuously working from the date of initial appointment without
any termination, including technical breaks, and that provident
fund contributions were regularly deducted from their salaries.
The complaint also referred to the sanctioned staffing strength of
1934 workmen as against 1270 permanent workmen actually
working. It was pleaded that approximately 700 permanent
workmen had ceased to be in service due to superannuation,
voluntary retirement, death, or other reasons, and that no
permanent recruitment had taken place after 2005 despite the
resulting vacancies. The petitioners asserted that the work
performed was perennial in nature and that they were required to
discharge duties of a permanent character. It was further pleaded
that the respondent Bank had issued a public notice inviting
applications for recruitment against vacant posts, pursuant to
which the petitioners applied, underwent the prescribed selection
process and interviews, were selected, and continued in service on
account of satisfactory performance and conduct.
5. The complaint contained detailed pleadings regarding
discriminatory treatment, setting out particulars of the
consolidated wages paid to the petitioners as compared to the
regular pay scales and allowances, including dearness allowance,
house rent allowance and travelling allowance, paid to permanent
employees performing similar duties. It was also pleaded that
permanent employees were granted leave to the extent of 55 days,
whereas the petitioners were granted only one day of leave.
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6. The petitioners further pleaded denial of promotional
opportunities, educational allowance, vehicle and travelling
allowances, bonus or ex gratia payments, Mediclaim policy, free
medical check-up, and concessional loan facilities. It was alleged
that such denial constituted violation of the Standing Orders and
breach of the agreement between the parties. The complaint
asserted that denial of benefits available to similarly situated
employees, irrespective of merit, amounted to unfair labour
practice under Item 5 read with Items 9 and 10 of Schedule IV. It
was specifically pleaded that the petitioners were deliberately
continued on temporary status with the object of depriving them of
the benefits and privileges attached to permanency, despite
demands made to the respondent to cease and desist from
engaging in unfair labour practices.
7. The respondent Bank filed a reply to Exhibit U-2, the
application for interim relief, and adopted the same as its written
statement. The Bank admitted that the work performed was
perennial in nature. It further admitted that prior to 2005 it had
employed approximately 1800 to 1900 employees, but that about
700 employees had thereafter ceased to be in service on account of
retirement, termination, resignation, voluntary retirement, or
death, resulting in substantial reduction of workforce between
2005 and 2014-15. It was admitted that the last recruitment of
permanent employees took place in 2005. The Bank stated that a
proposal seeking approval of a staffing pattern comprising 1934
employees had been submitted and favourably recommended by
the Divisional Registrar of Co-operative Societies, Nashik Division,
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to the State Government. It was also admitted that only 1213
permanent employees were presently working as against the
requirement of 1934 employees. The Bank further admitted that
the petitioners were employed against posts that had fallen vacant
due to the reduction in workforce and that the petitioners and
other temporary workmen were performing work of perennial
nature. The Bank averred that in the absence of such temporary
employment, the functioning of the Bank would have been
severely affected and services to account holders would have been
disrupted due to inadequate staffing at branches. It was also
admitted that the petitioners were not paid wages or extended
benefits available to permanent employees under the settlement
with the representative union solely because they were treated as
temporary employees. These admissions, according to the
petitioners, established unfair labour practices under Item 5
relating to discrimination, Item 6 relating to continuation on
temporary basis to deny permanency, Item 9 relating to violation
of settlement and statutory provisions, and Item 10 relating to use
of force interpreted as violation of binding legal obligations
including Standing Orders and settlements. The Bank further
averred that, in order to manage its affairs, extensions had been
granted in the past to employees who had retired on
superannuation. It was stated that since such retired employees
were required to be paid higher wages, the petitioners were
engaged on consolidated wages of Rs. 6000 and Rs. 9000. The
petitioners contend that this amounts to an admission of unfair
labour practice under Item 6 of Schedule IV. The Bank admitted
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that it required a workforce of 1934 employees but presently had
only 1213 employees, thereby indicating vacancies exceeding 700
posts, and that such staffing requirement had been favourably
recommended by the Divisional Registrar on the Bank’s proposal.
It is also noted that no statutory provision or legal basis requiring
prior approval of the staffing pattern was pleaded or cited by the
Bank.
8. Upon hearing the parties, the learned Industrial Court, by
the impugned Judgment and Award dated 20 May 2022, dismissed
the complaints filed by the petitioners.
9. Learned counsel for the petitioners, Mr. Nargolkar, submitted
that each of the petitioners has been in continuous service for
more than ten years and possesses the requisite qualifications for
the posts held by them. It was contended that provident fund
contributions are regularly deducted and deposited under the
respective provident fund code numbers, as reflected in the
tabulated statement placed on record. The petitioners, who are
working as clerks, are paid consolidated wages of Rs. 9000, while
those working as peons are paid Rs. 6000. It was submitted that
they have been denied dearness allowance, periodic wage
revisions, and all benefits and privileges available to permanent
workmen. It was further contended that such treatment amounts
to violation of the Standing Orders applicable to the respondent
Bank. According to the petitioners, they were appointed against
vacant posts and have continuously worked from the date of initial
appointment without any termination, whether oral or written,
and therefore their service is continuous in law. It was further
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submitted that while the Bank had approximately 1950 permanent
employees in the year 2005, only about 1270 permanent
employees remained in service on the date of filing of the
complaint, and that no permanent recruitment has been made
after 2005 despite cessation of service of nearly 700 employees
due to retirement, voluntary retirement, resignation, death, and
other reasons.
10. It was further submitted that the petitioners are granted only
one casual leave per month and are denied all other benefits and
concessions. The petitioners continue to receive consolidated
wages of Rs. 9000 and Rs. 6000 respectively, whereas permanent
employees are paid in regular time-scale pay bands with periodic
increments and are entitled to dearness allowance, house rent
allowance, travelling allowance, fifteen days casual leave, thirty
days privilege leave, ten days medical leave, and maternity leave
of 180 days for female employees.
11. It was submitted that dearness allowance linked to the
Consumer Price Index, 1960 Series, with 2001 as the base year, is
not granted or merged with basic pay in the case of the petitioners.
Further, promotional avenues available to permanent employees,
including promotion from subordinate cadre to Jamadar, Driver,
Clerical, Grade III, Grade II, Grade I, Special Grade and managerial
cadre, are denied to the petitioners. It was also contended that
post allowance, educational allowance, travelling allowance,
bonus, ex gratia payments, Mediclaim policy, medical check-up
allowance and other service benefits are not extended to them.
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12. According to the petitioners, denial of the aforesaid benefits
is solely on the ground that they are treated as temporary
employees, thereby constituting discrimination under Item 5 of
Schedule IV of the MRTU and PULP Act. It was further submitted
that the petitioners have been deliberately continued on temporary
status with the object of denying them the benefits and privileges
attached to permanency. It was submitted that there is no statutory
requirement mandating prior approval of the staffing pattern and
that approximately 700 vacant posts are available in the
establishment. Learned counsel further submitted that the
testimony led on behalf of the petitioners remained unshaken in
cross-examination and that no material contradictions emerged
when compared with the version set out in the affidavit of
evidence.
13. Inviting attention to the affidavit of evidence filed on behalf
of the respondent through Shri H. S. Nalwade, it was submitted
that the said witness had been employed with the Bank since 09
May 1992, initially as Deputy Chief Officer (Administration) and
thereafter as Chief Officer (Administration). The witness stated
that the petitioners could not claim benefits of permanency as they
were engaged as temporary employees and that, in the absence of
approval of the staffing pattern, they could not be regularised.
However, in cross-examination, the witness admitted that the
petitioners were appointed against vacant posts, that they were
performing the work of permanent employees, and that their
services had never been terminated since initial appointment. The
witness also admitted the documents placed on record and further
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admitted that services of more than 800 employees had ceased
since 2005.
14. It was further submitted that, as per the advice issued by
NABARD dated 03 July 2009, matters relating to staffing pattern
and recruitment policy of central co-operative banks fall within the
domain of the respective institutions as part of reforms in the co-
operative sector, and that appropriate action could therefore be
initiated by the concerned banks themselves. It was argued that
such advice issued by NABARD is merely advisory in nature and
does not possess statutory force.
15. On the basis of the pleadings in the complaint, the
admissions contained in the written statement, the detailed and
categorical evidence led by the petitioners, the unshaken oral
testimony, the admissions elicited in cross-examination, and the
advice issued by NABARD, it was submitted that the petitioners
have duly established commission of unfair labour practices under
Items 5, 6, 9 and 10 of Schedule IV of the MRTU and PULP Act.
16. Learned counsel for the respondent Bank, Mr. Vishwanath
Patil, submitted that the respondent NDCC Bank is a District
Central Co-operative Bank operating throughout Nashik District
with branches in all fifteen talukas. It was submitted that the Bank
performs diverse banking functions including disbursement of
agricultural and crop loans, financing of agricultural implements,
irrigation facilities, tractors, wells, seeds and fertilizers,
implementation of Government subsidy schemes, grant of gold
loans, mobilisation of deposits, provision of locker facilities and
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undertaking recovery proceedings. It was further contended that
the Bank is required to implement various Government schemes
from time to time without receiving any separate administrative
grant towards manpower expenditure, and failure to implement
such schemes may expose the Bank to regulatory and legal
consequences.
17. It was submitted that in the year 2005 the respondent Bank
had approximately 1800 to 1900 employees. Thereafter, between
2005 and 2014-15, nearly 700 employees ceased to be in service
on account of retirement, resignation, promotion, death and
voluntary retirement. According to the respondent, no permanent
recruitment has been undertaken since 2005. As on date, only
about 640 permanent employees are stated to be in service,
whereas the manpower requirement for efficient functioning is
approximately 1934 employees.
18. The respondent submitted that due to acute shortage of
manpower, a detailed staffing pattern proposal seeking sanction
for 1934 posts was submitted. The Divisional Joint Registrar, Co-
operative Societies, Nashik Division, by communication bearing
Outward No. 4591 dated 29 September 2015, forwarded the
proposal to the competent authority for approval. However, the
staffing pattern has not been sanctioned by the Government till
date. It was contended that in the absence of sanctioned posts, the
respondent Bank is legally precluded from making permanent
appointments.
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19. It was further submitted that owing to continuous depletion
of permanent staff and to prevent disruption of essential banking
operations across the district, the respondent Bank, out of
administrative necessity and exigency, appointed approximately
400 persons, including the present petitioners, on temporary basis
and on consolidated remuneration. According to the respondent,
such appointments were not made against sanctioned permanent
posts and were effected only to ensure continuity of banking
services and implementation of Government schemes.
20. The respondent contended that since the staffing pattern had
not been sanctioned, recruitment through the prescribed
procedure, as required by competent authorities and regulatory
bodies including the Co-operative Department and NABARD, could
not be undertaken. It was submitted that the appointments made
in the year 2016 were temporary, conditional and purely to meet
urgent administrative requirements, and that the petitioners were
fully aware of the temporary nature of their engagement at the
time of appointment.
21. Dealing with the petitioners’ contention that they had
completed more than 240 days of service and were performing
work of permanent nature, the respondent submitted that such
factors by themselves do not confer a legal right to permanency or
entitlement to benefits available to regular employees, particularly
when the appointments are not made against sanctioned posts.
22. It was further submitted that the National Bank for
Agriculture and Rural Development (NABARD) functions as an
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apex supervisory body for District Central Co-operative Banks in
Maharashtra and across India, and that such banks are supervised
by NABARD and the Reserve Bank of India for facilitating rural
credit and expansion of the banking network. Reliance was placed
on NABARD’s communication dated 31 December 2009 addressed
to the Secretary or Principal Secretary, Department of Co-operation
and the Registrar of Co-operative Societies, wherein it was stated
that for implementation of the Government of India package for
revival of rural co-operative credit institutions, a working group
under the chairmanship of Shri S.K. Mitra, Executive Director, was
constituted to formulate comprehensive human resource policy
guidelines. It was submitted that guidelines relating to staffing,
recruitment, transfer and promotion policy were forwarded to
State Co-operative Banks and Central Co-operative Banks for
consideration and adoption, and that such guidelines were
expressly described as suggestive in nature, permitting individual
banks to adapt them in accordance with their requirements.
23. The respondent further relied upon NABARD guidelines
dated 27 September 2010 issued to Chief Executive Officers of
District Central Co-operative Banks in Maharashtra regarding
recruitment of personnel, pursuant to decisions taken in the State
Level Task Force meeting held on 09 September 2010. It was
submitted that the said communication referred to broad norms
laid down by the Mitra Committee for categorisation of branches,
assessment of staffing requirements and selection or promotion of
staff, and directed banks to take such norms into account while
undertaking recruitment. It was further contended that the
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guidelines stated that co-operative banks and other entities in the
Short-Term Co-operative Credit Structure were required to adhere
to directions issued pursuant to decisions of the State Level Task
Force, and that non-compliance could invite supervisory and
regulatory action by NABARD and the Reserve Bank of India.
24. It was submitted that the respondent Bank functions under
the control and supervision of the Co-operative Commissioner,
Registrar of Co-operative Societies, NABARD, Reserve Bank of
India, Divisional Joint Registrar and other statutory authorities.
According to the respondent, all appointments and financial
decisions are required to conform to statutory mandates and
regulatory directions, and the Bank cannot create posts or
regularise services in the absence of Government sanction.
25. It was contended that the learned Industrial Court rightly
appreciated the evidence on record and correctly held that in the
absence of sanctioned posts and approval of staffing pattern, no
direction for regularisation or grant of permanency could be
issued. It was further submitted that the Industrial Court rightly
concluded that no unfair labour practice is made out where the
employer itself is unable to make permanent appointments due to
non-sanction of the staffing pattern by the Government.
26. The respondent submitted that there was no mala fide
intention or unfair method adopted to deprive the petitioners of
lawful benefits. According to the respondent, temporary
appointments were made solely to ensure that essential banking
services across the district were not paralysed, and in the absence
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of such appointments it would have been impossible for the Bank
to discharge its statutory and public functions. It was further
submitted that the findings recorded by the Industrial Court are
findings of fact based on appreciation of evidence and do not
suffer from perversity or jurisdictional error. The present writ
petitions, according to the respondent, seek re-appreciation of
factual findings, which is impermissible in writ jurisdiction under
Article 226 of the Constitution of India.
27. The respondent contended that the petitioners have no
vested or enforceable legal right to claim permanency in the
absence of sanctioned posts, and that grant of such relief would
compel the respondent to act contrary to statutory provisions and
regulatory control, thereby adversely affecting the financial and
administrative discipline of the institution. In the above
circumstances, the respondent prayed that the present writ
petitions be dismissed and the Judgment and Award passed by the
learned Industrial Court, Nashik, be upheld, along with such
further reliefs as this Court may deem fit in the interest of justice.
REASONS AND ANALYSIS:
Consideration of facts of present case
28. At this stage it becomes necessary to carefully examine the
facts which emerge from the pleadings, the admissions made by
the parties, and the evidence placed on record. The petitioners
have been working with the respondent Bank for several years.
According to them they were appointed against vacant posts, they
possess the required educational qualifications, and they have
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continued in service without interruption for a long period of time.
The material placed on record lends support to this assertion.
Documents produced before the Court show continuous
engagement of the petitioners by the Bank. The records also
indicate that provident fund contributions were regularly deducted
from their wages and deposited with the appropriate authorities.
Deduction of provident fund generally reflects a continuing
relationship between employer and employee. When such
deductions are made over a long period of time, it indicates that
the employer treated the engagement as ongoing arrangement.
29. It is true that the petitioners were paid consolidated wages
and were not placed on regular pay scales. However the nature of
the work performed by them remained constant. The duties
discharged by them were part of the regular functioning of the
Bank. These were not occasional assignments or work limited to a
particular project. The work formed part of the normal banking
activity carried out in the branches.
30. The pleadings and evidence of the respondent Bank
themselves contain certain admissions which are relevant. The
Bank has admitted that the work performed by the petitioners is of
a perennial nature. When an employer itself acknowledges that
the work is permanent and necessary for the day to day
functioning of the institution, it indicates that the work exists on a
continuing basis and is not temporary or seasonal.
31. The Bank has further stated that after the year 2005 a large
number of permanent employees ceased to be in service. This
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happened due to retirement, voluntary retirement, resignation and
in some cases death of employees. As a result the number of
permanent staff reduced considerably. At the same time the Bank
continued its operations through several branches and remained
responsible for implementing various banking activities and
government schemes.
32. This factual situation explains the circumstances in which
temporary employees came to be engaged in large numbers. When
permanent employees left service and vacancies arose, the
functioning of the institution could not be allowed to stop.
Banking operations require staff for day to day work such as
clerical duties, customer service, record maintenance and other
routine functions. In that background the Bank continued
engaging temporary employees including the present petitioners.
33. Another aspect which cannot be overlooked is the admitted
manpower gap within the Bank. The Bank itself placed on record
that it had submitted a proposal seeking approval for a staffing
pattern of approximately 1934 employees. In that proposal the
Bank accepted that the number of permanent employees in service
had fallen much below the requirement necessary for proper
functioning of the institution. This admission shows that the
shortage of staff was real. The Bank itself acknowledged that its
existing employees were inadequate for the volume of work
handled by the institution. The engagement of the petitioners must
therefore be viewed in this factual context. They were not brought
in for a short duration or for seasonal work. Their engagement was
directly connected with the vacancies created due to reduction of
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permanent staff. The Bank’s own pleadings indicate that without
such engagement the regular functioning of branches and the
implementation of government schemes would have been seriously
affected.
34. The evidence led by the petitioners also deserves
consideration. During the course of trial the petitioners produced
material to show their long years of service and the duties
performed by them. The cross examination of these witnesses did
not bring out any serious contradiction. Their version regarding
the nature of work and continuity of service remained largely
unshaken. More importantly, the witness examined on behalf of
the respondent Bank made certain admissions during cross
examination. The witness accepted that the petitioners were
working against vacant posts. The witness also admitted that the
duties performed by them were similar to the duties performed by
permanent employees. It was further admitted that since their
initial appointment the services of the petitioners had never been
terminated. When the employer acknowledges that the employees
are working on vacant posts and are performing duties similar to
permanent staff, it supports the factual foundation of the
petitioners’ case.
35. At the same time the Court must also consider the
explanation offered by the respondent Bank. The Bank has stated
that it faced administrative difficulties due to the absence of a
sanctioned staffing pattern. According to the Bank the competent
authorities had not formally approved the required number of
posts. Because of this situation the Bank continued making
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appointments on a temporary basis. This explanation may explain
the manner in which the appointments were described by the
Bank. However it does not change the factual reality which
emerges from the record. The petitioners continued to work for
long periods of time. They performed duties which were regular
and necessary for the functioning of the institution. Their
engagement was not limited to a short or experimental period.
36. Another relevant factual aspect relates to the difference in
service conditions between permanent employees and the
petitioners. The permanent employees of the Bank were placed on
regular pay scales and were entitled to allowances and other
service benefits. The petitioners on the other hand continued to
receive fixed consolidated wages. This position continued despite
the fact that many of them had worked for several years. The
difference in treatment between the two categories of employees is
not denied by the respondent Bank. The only explanation offered
is that the petitioners were treated as temporary employees and
therefore were not entitled to regular service benefits.
37. Thus, when the material on record is appreciated as a whole,
certain facts become clear. The number of permanent employees in
the Bank reduced substantially over the years. The work of the
institution however continued and remained perennial in nature.
The petitioners were engaged against available vacancies created
due to reduction in permanent staff. They continued to work for
long periods without interruption. Their services were necessary
for maintaining normal banking operations. The Bank itself
acknowledged the shortage of staff and even submitted proposals
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seeking approval for a larger staffing pattern. No evidence has
been placed on record to show that the petitioners were engaged
for purely temporary or time bound assignments.
38. Once this factual background is kept in view, the Court can
now examine the legal questions concerning the existence of a
staffing pattern, the scope of statutory powers, and the nature of
the guidance relied upon by the respondent Bank.
On NABARD’s communications.
39. The respondent Bank has placed reliance on certain
communications issued by NABARD. According to the Bank these
communications derive authority from Section 35(6) of the
Banking Regulation Act and therefore must be treated as binding
directions.
40. Section 35 of the Banking Regulation Act deals with
inspection of banking institutions. It empowers the Reserve Bank
of India to inspect the affairs, books and accounts of banking
companies. Such inspection is intended to ensure that the financial
affairs of banks are conducted in a sound and prudent manner. Sub
sections (1) to (5) deal with various aspects of inspection. They
provide for scrutiny of records, examination of officers, production
of documents and other related matters. These provisions enable
the authority to monitor the functioning of banks and to take
necessary steps if irregularities are noticed. However these
provisions do not deal with service conditions of employees,
staffing policies or creation of posts within an institution.
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41. Sub-section (6) of Section 35 extends certain powers of the
Reserve Bank to NABARD in relation to Regional Rural Banks. The
language of the provision shows that the power transferred
authorises NABARD to conduct inspection and supervisory scrutiny
in a manner similar to the Reserve Bank for specific categories of
banks. The provision does not confer authority on NABARD to
frame service regulations or to prescribe mandatory staffing
pattern having the force of law. The provision does not authorise
NABARD to override statutory powers vested in the State
Government under other legislation. In particular it does not
empower NABARD to decide matters relating to service
regularisation or creation of posts within cooperative societies
governed by separate statutes.
42. When an authority conducts inspection under Section 35 it
assesses the financial health and management practices of the
bank. During such exercise the authority may issue observations or
communications indicating areas of concern. These
communications may contain suggestions. They may advise
institutions to take certain steps. Such guidance may be practically
important and institutions may consider it seriously while
managing their affairs. However the legal character of such
communication remains advisory unless the statute clearly
provides otherwise. For a direction to acquire binding force it
must be supported by statutory authority or incorporated in rules
framed under the statute.
43. A careful reading of Section 35 shows that the consequences
expressly contemplated by the provision relate to regulatory steps.
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These include actions such as restricting acceptance of deposits or
recommending steps towards winding up of a bank in extreme
situations. The provision does not deal with matters such as service
regularisation, approval of staffing patterns or determination of
employee permanency. Therefore the argument that every
communication issued by NABARD becomes binding in matters
relating to staffing cannot be accepted. The scope of the statutory
provision cannot be extended beyond what the text of the law
actually provides.
44. The reasoning of the respondent Bank proceeds on the
assumption that because NABARD exercises supervisory powers
similar to those of the Reserve Bank, its guidelines must bind the
institution in all administrative matters. The nature and extent of
power exercised by a statutory authority must be gathered from
the statute itself. A power to inspect or supervise cannot be
converted into a power to frame binding rules unless the statute
clearly authorises such rule making. If the legislature intended
NABARD’s communications to have binding force in matters of
staffing or service conditions, it would have expressly provided so
in the statute. In the absence of such language the Court cannot
infer such authority. Viewed in this light the communications
issued by NABARD regarding staffing or recruitment must be
understood as guidelines issued in the course of supervisory
powers. However these communications do not operate as
statutory directions. They cannot override powers which may be
exercised by the State Government under provisions such as
Section 79A of the Maharashtra Co operative Societies Act.
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Statutory power under Section 79A.
45. Section 79A gives authority to the State Government to issue
directions to co operative societies. This power can be exercised
when the Government finds that such directions are necessary in
public interest or for proper administration of the society. The
section also states that the State may act on the basis of a report
submitted by the Registrar. At the same time the wording of the
provision makes it clear that the Government may also act
otherwise. This means that even if there is no formal report of the
Registrar, the Government can still exercise its power if relevant
material placed before it shows that intervention is required. The
conditions mentioned in Section 79A also indicate the purpose of
the provision. The State Government may issue directions when it
is satisfied that such directions are required in public interest. It
may also act when the directions are necessary for effective
implementation of co operative development programmes. The
provision further mentions securing proper management of the
business of the society. It also speaks of preventing the affairs of
the society from being conducted in a manner which is detrimental
to the interests of members, depositors or creditors.
46. Therefore, the question of adequate staffing naturally falls
within the concept of proper management. When manpower
shortage affects the functioning of a co operative bank, the issue
clearly falls under Section 79A. In such circumstances the State
Government can examine the situation and issue appropriate
directions. Framing or approving a staffing pattern is therefore
well within the area which the section intends to cover, provided
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the State forms its satisfaction on the basis of relevant material.
47. Once the State Government issues directions under Section
79A all societies concerned shall be bound to comply with such
directions. The directions issued under this provision carry
statutory force because they flow directly from the authority
granted by the legislature. If the State Government approves or
directs a staffing pattern under Section 79A, the society concerned
becomes legally bound to follow that direction. Such a directive
stands on a different footing from advisory communications or
policy giudelines.
48. Sub-section (2) of the same provision further clarifies the
nature of the power. It provides that the State Government may
modify or cancel any direction issued earlier. Sub section (3)
provides that if persons responsible for implementing such
directions fail to comply without good reason, the Registrar has
authority to take action.
49. When all these parts of Section 79A are read together, a clear
statutory scheme becomes visible. The section allows the State
Government to issue binding directions in public interest. It allows
modification or cancellation of such directions as circumstances
change. It also provides a mechanism through the Registrar to
ensure compliance. Therefore, where the functioning of a co
operative bank is affected due to shortage of staff and the State
Government examines the issue, the issuance or approval of a
staffing pattern falls squarely within this statutory scheme.
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50. In the context of the present case the respondent Bank has
not produced before this Court any order issued by the State
Government under Section 79A which prescribes or approves a
staffing pattern applicable to the Bank. The Bank has repeatedly
argued that it could not take decisions regarding staffing or grant
permanency to employees because the staffing pattern had not
been sanctioned. However when such a contention is raised, the
first requirement is to show that there exists a statutory direction
or restriction which actually binds the society. If the Bank claims
that it was prevented from acting because of law, then the source
of such restriction must be clearly shown. In the present case no
such order has been placed on record.
51. Section 79A operates through directions issued by the State
Government. Those directions must exist in writing. They must
also indicate that the Government has applied its mind and has
reached satisfaction that the direction is necessary in public
interest or for proper management of the society.
52. Only when such a direction is issued does it become binding
on the society concerned. In the absence of any such written order
the Bank cannot rely upon a alleged restriction. A statutory
prohibition cannot be presumed. It must be shown through a
specific order, notification or directive issued under the authority
of the statute. The Bank cannot say that it was legally prohibited
from taking staffing decisions. Judicial reasoning must be based on
material which is actually placed before the Court. Since no order
under Section 79A has been produced, there is no statutory
direction shown to this Court which prevented the Bank from
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acting.
53. The Industrial Court appears to have proceeded on the
assumption that the Bank was restrained from making permanent
appointments because the staffing pattern had not been
sanctioned. However the record does not show any statutory order
which created such restraint. As a result the conclusion reached by
the Industrial Court lacks a legal basis.
54. The pleadings and admissions placed before this Court also
show that the Bank itself recognised a serious shortage of
manpower. It continued engaging employees for several years to
perform work which was admitted to be perennial in nature. If the
Bank could engage temporary employees continuously in order to
maintain its operations, it becomes difficult to accept the argument
that it was completely powerless to take any staffing decisions. The
absence of formal sanction cannot be treated as an absolute legal
barrier when no statutory direction prohibits such action.
Therefore in the present case, in the absence of any order under
Section 79A, this Court cannot accept the contention that staffing
decisions were legally prohibited or that the question of
permanency could never arise.
55. At this stage, it becomes necessary to consider the legal
principles relating to regularisation. The law laid down by the
Supreme Court in Casteribe must be kept in view.
56. The first principle is that regularisation does not
automatically follow from long service. The Supreme Court has
repeatedly stated that courts cannot order regularisation in a
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manner which defeats statutory recruitment rules. Public
employment cannot be filled through backdoor entry. If an
appointment is made in complete violation of statutory
requirements, such appointment cannot be validated merely
because the employee has worked for many years. At the same
time the Supreme Court has also recognised the reality of
employment relationships. In many institutions employees are
engaged for long periods. They perform regular work which is
necessary for the establishment. The employer continues to take
benefit of their services while denying them the status and benefits
attached to regular employment. In such situations the Court
cannot close its eyes to the practical reality.
57. In this context the judgment in Casteribe assumes
importance. In that case the Supreme Court examined the powers
of the Industrial and Labour Courts under the MRTU and PULP
Act. The Court considered whether relief of permanency could be
granted where employees were kept temporary for many years
while performing work of permanent nature. The Supreme Court
held that where unfair labour practice under Item 6 of Schedule IV
is established, the Industrial Court is not powerless. Item 6 deals
with the practice of keeping employees as temporary or casual for
years together with the object of denying them permanency. If such
conduct is proved, the Court can grant appropriate relief to remove
the unfair labour practice. An employer cannot repeatedly engage
workers on temporary basis for work which is clearly permanent
and then rely on that temporary label to deny them legal rights.
When the facts show that the work is continuous and necessary
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and the employer itself maintains such arrangement for years, the
Court is entitled to look beyond the label and examine the real
nature of employment.
58. Another important principle emerging from the Casteribe
judgment is that adjudication under the MRTU and PULP Act
operates in a different field from constitutional challenges relating
to recruitment. The Supreme Court clarified that when unfair
labour practice is proved, the Industrial Court can issue directions
to remove that unfairness. The relief is not granted merely because
the employee has served for a long time. The relief is granted
because the conduct of the employer falls within the prohibited
practices defined by statute. The Court cannot grant relief in a
manner which creates posts where none exist or which ignores
statutory prohibitions. The Court must examine whether work
actually exists, whether the institution requires manpower and
whether the appointments were made to meet that need. When
these factors are present and employees are continued for many
years, refusal of permanency may itself indicate unfair labour
practice.
59. In the present matter these principles provide the legal
parameters for examination. The issue before the Court is not a
claim for regularisation based solely on length of service. The
Court has to see whether the employer, despite admitted vacancies
and continuous work, kept the employees on temporary status for
years and thereby denied them benefits which were available to
others performing the same duties.
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60. The Court must examine whether the facts of the present
case fall within the parameters recognised by law regarding unfair
labour practice and regularisation.
61. The first important feature is the nature of work. The
respondent Bank has not disputed that the duties performed by the
petitioners are of perennial and continuous character. Banking
work does not stop at any time of the year. Branches operate every
working day. Deposits are accepted, loans are processed and
customer services are provided regularly. The duties performed by
the petitioners form part of these normal banking activities. They
are not seasonal tasks. They are not linked to any temporary
project.
62. The second aspect relates to continuity of service. The
petitioners have worked for many years. Their services were never
terminated by any formal order. Provident fund deductions were
made from their wages. They continued to work in the same
establishment for long periods. When an employer retains workers
year after year, it indicates that their services are required on a
continuing basis.
63. The third factor arises from the admissions of the respondent
Bank. The Bank accepted that after the year 2005 many permanent
employees had left service due to retirement and other reasons. It
also admitted that no permanent recruitment was carried out
thereafter. At the same time the Bank acknowledged that a
shortage of manpower existed and that a proposal for a staffing
pattern involving a large number of posts had been submitted.
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These admissions show that vacancies and institutional need were
genuine. The petitioners were not engaged in excess of
requirement.
64. The explanation offered by the Bank is that appointments
were made on temporary basis because the staffing pattern had
not been sanctioned. This explanation may justify the initial
decision to appoint employees temporarily. However the issue
before the Court is whether continuation of this arrangement for
several years, despite admitted perennial work and existing
vacancies, results in unfair labour practice.
65. Another circumstance which cannot be ignored is the
difference in service conditions. Permanent employees performing
similar duties received regular pay scales, allowances, leave
benefits and opportunities for advancement. The petitioners,
however, continued to receive fixed consolidated wages.
66. Applying the principles laid down in Casteribe , the Court
must consider whether the conduct of the employer falls within
Item 6 of Schedule IV. This item refers to the practice of keeping
employees temporary with the object of depriving them of
permanency.
67. In the present case the circumstances point in that direction.
The work is permanent. The service of the petitioners is long and
continuous. The need for manpower is admitted. Vacancies exist.
Yet the employees remain on temporary status without benefits
available to permanent staff. At the same time the Court remains
conscious that regularisation cannot be granted in violation of
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statutory provisions. Relief must therefore be granted in a manner
consistent with law. In the present case the existence of statutory
power under Section 79A and the absence of any binding
prohibition become relevant considerations. Once it is seen that
there is no statutory direction preventing staffing decisions, the
denial of permanency cannot be justified on that ground.
68. In view of the discussion made above, this Court finds that
the Industrial Court failed to appreciate the legal position and the
factual material placed on record. The findings recorded by the
Industrial Court therefore cannot be sustained in law. The petitions
consequently deserve to be allowed. Relief shall follow in terms of
the operative order.
69. For the reasons stated above, I pass the following order:
(i) The writ petitions are allowed;
(ii) The Judgment and Award dated 20 May 2022 passed
by the Industrial Court, Nashik are quashed and set aside;
(iii) The respondent Bank is held to have engaged in unfair
labour practices under Items 5 and 6 of Schedule IV of the
MRTU and PULP Act by continuing the petitioners on
temporary basis for prolonged periods despite existence of
vacancies and requirement of permanent work.
(iv) The respondent Bank shall, within a period of twelve
weeks from the date of this order, undertake an exercise for
regularisation of the petitioners against available vacant
posts, subject to verification of individual eligibility,
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educational qualifications and service record.
(v) Upon completion of such exercise, eligible petitioners
shall be granted permanency with continuity of service for
all consequential purposes.
(vi) The petitioners shall be entitled to pay and service
benefits in the applicable regular pay scale prospectively
from the date of regularisation. Monetary benefits, if any,
shall be computed and paid within sixteen weeks thereafter.
(vi) Till completion of the exercise directed above, the
respondent Bank shall not terminate the services of the
petitioners or alter their service conditions to their prejudice.
(vii) Rule is made absolute in the above terms. No order as
to costs.
70. At this stage, learned Advocate for the respondent-Bank
seeks stay of the judgment. However, for the reasons recorded in
this judgment, oral request for stay is rejected.
(AMIT BORKAR, J.)
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