Dismissed Co-Op Bank Employee Need Not Appeal Internally Before Taking Dismissal Dispute To Labour Court: Kerala HC

In brief

The question

Whether an employee of a co-operative society must exhaust the appeal remedy under Rule 198(4) of the Kerala Co-operative Societies Rules before bringing a service dispute before the Labour Court under the Industrial Disputes Act

The court held

The Court held that the employee was not required to exhaust the appeal under Rule 198(4) before approaching the Labour Court, and that the Labour Court had correctly rejected the Bank’s maintainability objection.

It also directed

Finding no ground for interference, it dismissed the writ petition.

01Facts

The second respondent, employed by the petitioner co-operative bank as a Peon, was dismissed following disciplinary proceedings.

pp. 2–4

He challenged the dismissal directly before the Labour Court under the Industrial Disputes Act, 1947, without first appealing under Rule 198(4) of the Kerala Co-operative Societies Rules, 1969.

pp. 2–4

The Bank’s preliminary objection that the claim was not maintainable was rejected by the Labour Court.

pp. 2–4

The Bank then filed this writ petition challenging that order.

pp. 2–4

02Issues

i.Whether an employee of a co-operative society must exhaust the appeal remedy under Rule 198(4) of the Kerala Co-operative Societies Rules before bringing a service dispute before the Labour Court under the Industrial Disputes Act

pp. 5–7

ii.Whether the High Court should interfere with the Labour Court’s interlocutory order rejecting the Bank’s preliminary objection to maintainability

p. 10

03Law Applied

Section 28 of the Kerala Co-operative Societies Act, 1969 vests management of a society in its committee; however, Rule 198(3) authorises the President to impose specified penalties, while Rule 198(4) provides an appeal to the Executive Committee/Board of Management against such an order.

pp. 3, 6–7

Under Annamma K.A. v. Secretary, Cochin Co-operative Hospital Society Ltd., the Kerala Co-operative Societies Act and the Industrial Disputes Act provide concurrent forums for service disputes, and an employee may choose either forum, subject to satisfying the Industrial Disputes Act’s requirements concerning “workman,” “industrial dispute” and “industry”.

p. 8

The Court followed Veerankavu Welfare Co-operative Society Ltd. v. C. Sindhu Kumari and Channapetta Service Co-operative Bank Ltd., holding that exhaustion of the Rule 198(4) appeal is not a prerequisite to proceeding before the Labour Court.

pp. 8–10

It distinguished Managing Director, State Bank of India v. S. Murali, which concerned computation of limitation under Section 2A(3) of the Industrial Disputes Act, rather than whether the statutory appeal must be exhausted.

pp. 5–7

It also relied on Kerala State Road Transport Corporation v. Basil Scaria for the principle that courts should not ordinarily interrupt tribunal proceedings on preliminary issues where the parties can challenge the final award.

p. 10

Provisions in the judgment · 3

Kerala Cooperative Societies Act, 1969 Section 28

Industrial Disputes Act, 1947 Section 2ASection 2

04Reasoning

Rule 198(3) empowered the President to impose the dismissal penalty; the appeal provided by Rule 198(4) was an appellate remedy, not the original decision required before the employee could approach the Labour Court.

pp. 6–10

Applying Annamma and the subsequent decisions of this Court, the Court held that the employee could elect the Industrial Disputes Act forum without first pursuing the co-operative law appeal.

pp. 6–10

Murali did not assist the Bank because it addressed limitation, not exhaustion of remedies.

pp. 6–10

Further, the challenged order was interlocutory, and the Bank could raise its objections in proceedings concerning the final award.

pp. 6–10