SMT. KAMALA vs. STATE OF KARNATAKA

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 7th DAY OF AUGUST, 2012 PRESENT THE HON'BLE MR.JUSTICE K.L.MANJUNATH AND THE HON’BLE MR.JUSTICE V.SURI APPA RAO WRIT APPEAL NOS.3702-3703/2011(S-RES) BETWEEN 1 SMT. KAMALA D/O LATE M SHIVAPPA AGED ABOUT 58 YEARS R/O NO. 2559, 4TH CROSS CHAMUNDIPURAM MYSORE 2 SRI. S N SUBBE GOWDA S/O SRI. NAJUNDE GOWDA AGED ABOUT 59 YEARS R/O NO. 112, J S S SCHOOL ROAD RAGHAVENDRA NAGAR MYSORE

... APPELLANTS (By Sri : T N RAGHUPATHY, ADV. ) AND : 1 STATE OF KARNATAKA MINISTRY OF CO-OPERATION BY ITS PRINCIPLE SECRETARY BANGALORE 2 MYSORE CHAMARAJNAGARA DISTRICT CO-OPERATIIVE MILK PRODUCERS UNION LTD SIDDARTHA NAGARA, T NARASIPURA ROAD MYSORE-570 011

... RESPONDENTS R

2 (By Smt : M.C.AKKAMAHADEVI, AGA FOR R1; SRI.ABHINAV R, ADV. FOR R2 ) THESE WRIT APPEALS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION NO.14533/2010 AND 14652-53/2010(S-RES) DATED 18/02/2011. THESE APPEALS COMING ON FOR PRELIMINARY HEARING THIS DAY, MANJUNATH J, DELIVERED THE FOLLOWING: JUDGMENT The appellants are questioning the legality and correctness of the order passed by the Learned Single Judge in W.P.NO.14533/10 and 14652-53/10 dt.18.2.2011. 2. Heard the learned counsel for the parties. 3. The following facts are not in dispute in these appeals: The appellants are the employees of the 2nd respondent – Cooperative Society. The 2nd respondent – Union by circular dt.12.10.2001 informed the employees to opt for Voluntary Retirement Scheme. Accordingly, the appellants submitted their applications opting to take voluntary retirement on

3 20.10.2001 and 26.10.2001 respectively later they gave a representation seeking permission to withdraw their consent as per letter dated 23.10.2001 and 31.10.2001 respectively. 4. The circular dt.12.10.2001 reads as hereunder: “ With the aim of schieving an over-all improvement in administration of Administrative offices, Cooling Centers and Branch Offices within purview of the management of Mysore- Chamarajanagara District Milk Union and to enable the Union to reach its intended goals by improving its financial health and to utilise human resource to its maximum, the subject was placed for deliberation before the Executive Committee during its meeting held on 27.09.2001. The same having been discussed in detail and albeit and the fact that the Union is not in the best of financial position, it was decided that the – ‘Voluntary Retirement Scheme’ could be offered to willing employees and accordingly, the terms and conditions thereof have been proposed as under: 1 ‘Voluntary Retirement’ would apply to the employees of the Union in general. 2 ‘Voluntary Retirement Scheme’ has been prepared in accordance with the Income Tax act.

4 3 Employees opting for the said scheme are required to have a minimum of 10 years in service or should be of a minimum age of 40 years as on 31.10.2001. 4 Employees opting for the said scheme should have a minimum of 5 years of balance service as on 31.10.2001. 5 The ‘Offer amount’ would be equivalent to the sum total of the gross salary (basic pay + D.A.) for a period of 3 months for every year of service put in or for the balance years of service remaining, whichever is less, subject to the maximum limit of a sum amounting to Rs.5 lakhs. 6 Applications submitted by employees opting for the said scheme are precluded from being re- called under any circumstance whatsoever. 7 The scheme is being introduced in anticipation of Government approval and implementation of the same would be subject to such approval of the Government. The offer amount stated supra is apart from the provident fund, gratuity and other emoluments payable as per applicable statutes The right to accept or reject such applications opting for the said scheme is reserved with the Managing Director. His decision taken in the interest of the Union would be final. The last date for filing applications for the said scheme is fixed on 31.10.2001.”

5 5. The last date to file the applications to avail the benefit under the scheme was 31.10.2001 and thereafter time was extended upto 31.11.2001. Without considering the applications filed by the appellants herein seeking permission to withdraw their consent, the respondent-2 passed an order retiring the appellants under the Voluntary Retirement Scheme. 6. Challenging the order’s of retirement, disputes were raised u/s 70 of the Karnataka Cooperative Societies Act before the Joint Registrar of Cooperative Societies, Mysore Region, Mysore in case Nos.5/2002- 03 and 8/2002-03 contending that without knowing the consequence they had submitted their applications to take Voluntary retirement within stipulated time and even before closure of the time stipulated to make an application they had withdrawn their consent and that respondent-2 without considering their request to withdraw the application submitted for voluntary retirement, passed an order illegally and therefore they requested the Joint Registrar to

6 reinstate them and allow them to continue in service till they attain the age of superannuation and to pay backwages. The dispute raised by the appellants came to be allowed on 17.5.2003 by the Joint Registrar directing the 2nd respondent to continue the appellants in service by giving continuity of service annulling the decision of the 2nd respondent dt.5.9.2002. 7. Aggrieved by the same, the 2nd respondent filed an appeal before the KAT, Bangalore in Appeal No.684/03. The Tribunal by its order dt.19.2.2010 allowed the appeal filed by the 2nd respondent and set aside the order passed by the Joint Registrar of Cooperative Societies, Mysore. 8. Aggrieved by the same, the appellants filed the Writ Petitions before the learned Single Judge. The learned Single Judge relying upon clause 6 of the Circular came to the conclusion that when once an application filed seeking permission to retire from the service under the scheme, the appellants have no right to withdraw the same. Accordingly, the Writ

7 Petitions are dismissed. Challenging the same the present appeals are filed. 9. The learned counsel for the appellants, Mr. Raghupathy, contends that clause-6 of the circular has no application to the facts and circumstances of this case and that the Judgment relied upon by the learned Single Judge rendered by the Apex Court in STATE BANK OF PATIALA VS. RAMESH CHANDER KANOJI [(2004) 2 SCC 651], has no application because in the aforesaid Judgment, Management was required to create a fund and after creation of fund, applications were invited and an employee having submitted an application later cannot be permitted to withdraw on account of financial consequence of the State Bank of Patiala. According to him, the Judgment relied upon by the other side is distinguishable because in the present case as per circular dt.12.10.2001 the Executive Committee of the respondent-2 passed a resolution on 27.9.2001 wherein the Managing Director was permitted to avail loan from Cooperative Bank and other Government

8 organisation only after considering the applications filed by the employees who were eligible to take voluntary retirement keeping the best interest of respondent-2. Therefore on the date of circular issued on 12.10.2001, 2nd respondent had not determined the number of employees who were eligible to take voluntary retirement and no steps were taken by the Managing Director of respondent-2 to avail loan from various Banks to settle the dues payable to the applicants who had submitted for voluntary retirement. According to him, the resolution of 2nd respondent dt.27.9.2001 could be implemented by the Managing Director only after scrutiny of the applications received by him after the last date to submit the application was over. According to him, the last date to submit the application was fixed on 31.10.2001 and the same was further extended upto 31.11.2001. Relying upon these two dates, he contends that the Managing Director of respondent-2 can request the Banks to grant loan to respondent-2 to settle the amount payable under the voluntary

9 retirement scheme only after ascertaining the applications received by it. According to him, in the instant case even before 31.10.2001 and 31.11.2001 the appellants had withdrawn their applications and therefore the respondent-2 had not taken any steps to avail the loan from other financial institutions to settle the dues payable to the appellants. He further contends that clause-6 of the circular is a redundant clause and the same has been introduced without application of mind. According to him, clause-6 should have been read as, an applicant cannot be permitted to withdraw the permission after the last date to file the application. But in the instant case as 2nd respondent had not even made any arrangement to avail the loan in order to settle the dues under the scheme, the Judgment of the Apex court in State Bank of Patiala’s case has no application. He further contends that the learned Single Judge without considering the factual aspects has wrongly dismissed the Writ Petitions and requests the court to allow the appeal.

10 10. Per contra, the learned counsel for respondent-2 contends that since clause-6 of the circular is binding on the appellants as clause-6 of the circular has not been challenged by the appellants, the learned Single Judge is justified in dismissing the Writ Petitons following the decision of the Apex court in State Bank of Patiala’s case. In the circumstances, he requests the court to dismiss the appeal. 11. Having heard the counsel for the parties, the only point to be considered by us in this appeal is: 1) Whether the appellants had power to withdraw the applications filed by them to seek voluntary retirement and on account of such an application filed by the appellants to withdraw their application, whether respondent-2 can contend that the appellants are precluded from withdrawing the applications? 2) Whether the order of the learned Single Judge suffers from any infirmity?

11 12. We have narrated all the facts of this case in detail in the preceding paragraphs. Therefore, there is no dispute that the employees of the respondent-2 who were willing to take VRS could have filed an application on or before 31.11.2011. As per resolution respondent-2 dt.27.9.2001 authorisation was granted to the Managing Director of the respondent-2 to find out the eligible applicants to avail the scheme and thereafter to approach the Banks to avail the loan and settle the dues payable to the employees who opted for VRS. In other words, till 31.11.2001 the Managing Director of respondent-2 could not have processed the papers to avail the loan from any financial institutions in order to implement the resolution dt.27.9.2001. Clause-6 of the circular says when once an application is filed, the applicants are precluded from withdrawing the same. But in the STATE BANK OF PATIALIA’s case, a similar question arose, wherein their Lordships have held that as the scheme was funded as the Management was required to create fund as the creation of fund would depend

12 upon the number of applications, considering the liability of the scheme would impose on other valuable facts, if the employees are allowed to withdraw at any time after its closure, it would not be possible to work out the scheme as all calculations of the Management would fail. Therefore, it is clear that when once the last date was over and if any fund is created by the Bank and if any employee is permitted to withdraw as the scheme itself would collapse, Their Lordships have ruled that the applicants are precluded from withdrawing the application after the last date. 13. In the instant case, the circular was issued on 12.10.2001 fixing the last date to file an application on 31.10.2001 and it was further extended upto 31.11.2001. Admittedly the 1st appellant had filed on 20.10.2001 and she has made an application to withdraw her consent on 23.10.2001 within 3 days. Similarly, the 2nd appellant has filed an application on 26.11.2001 and filed the application to withdraw on 4.6.2002. Therefore it is clear so far as the appellant-

13 1 is concerned, within 3 days she has filed an application to withdraw much prior to the last date fixed as per circular and also within the extended period. This aspect of the matter has not been considered by the Appellate Tribunal as well as the learned single Judge. In the circumstances, we are of the view that removal of appellant-1 by respondent-2 under the VRS scheme is illegal and bad in law because as on the date of filing the application by the appellant, scheme itself was not implemented and no steps had taken by the Managing Director to arrange for fund by borrowing loan from the financial institutions. 14. So far as the 2nd appellant is concerned, we are of the view that the Judgment of STATE BANK OF PATIALA would squarely applicable. The application filed by him on 26.11.2001 and an application was filed for withdrawal on 4.6.2002 much after the closure of the scheme. As the last date to file the application was 30.11.2001 since the appellant-2 had

14 not filed an application for withdrawal within the extended period if the application filed by appellant-2 is not accepted by the 2nd respondent, this court cannot interfere with the same. 15. In the result, the appeal filed by the appellant in W.A.No.3702/11 is allowed. The appeal filed by the 2nd appellant in W.A.No.3703/11 is dismissed confirming the order of the learned Single Judge. Sd/- JUDGE Sd/- JUDGE Ak