No ex-gratia for employees of Co-operative Societies: SC

New Delhi, Jan 28 (UNI) In a major ruling, the Supreme Court has ruled that employees of the Uttar Pardesh Co-operative Socities are not entitled to any ex-gratia payment.

A Bench, comprising Justices A R Lakshmanan and Tarun Chatterjee, while allowing the appeals filed by the UP government and Ghaziabad Zila Sahkari Bank Ltd set aside the judgment of Allhabad High Court dated April 4, 2003 directing the bank to pay ex-gratia payment to its employees.

Additional Labour Commissioner, Ghaziabad had allowed the payment of Rs 11,10,398 to the employees of the appellant bank for the year 1999-2000.

The bank had contended that there were 50 such banks in the state and if employees of other banks also demanded similar relief on the basis of parity, it would erode public money running into several crores, and cited the example of District Co-operative Bank, Gonda, which went in liquidation due to similar payments.

The appellants had further pleaded that if such payments were not stopped than all credit co-operative societies would crumble down and the entire Co-Operative Movement in the state vanish.

The state government issued a circular prohibiting ex-gratia payments over and above pay and the Registrar of the UP Co-Operative Societies in September, 1989, also issued similar circulars.

The apex court in its judgment noted, ''In our opinion, the impugned judgment suffers from complete non-application of mind on merits of the case in as much as whole pleadings even before the Labour Commissioner or before the High Court was that the payment of ex-gratia to the employees are against the objects of the society and it is in contravention of Regulation 42 of the Service Regulations 1975 and contrary to the provisions of the Act, 1965.

''The Chairman of the bank suo moto, without there being any legal authority, unilaterally entered into a private settlement with the employees of the bank on January 23, 2001,'' the court said.

The apex court, while setting aside the order of the Labour court and the High Court, concluded, ''The payments already made need not be recovered at this distance of time from the employees of the bank.

However, we make it clear that the employees are not entitled to ex-gratia payment from now onwards.'' UNI