IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 563 OF 2011 [Arising out of SLP(C) No.20193 of 2008]

HASSAN  DISTRICT  CENTRAL  CO- OOPERATIVE BANK LTD.

.......APPELLANT  

Versus

JOINT REGISTRAR OF CO-OOPERATIVE  SOCIETIES & ANR.

.....RESPONDENTS

O R D E R

Leave granted.  

2. The second respondent was an employee of the  

appellant Bank.   Rule 153 of the Staff Service Rules of  

the employees of the Hassan District Co-operative Central  

Bank Ltd., provides for compulsory retirement and relevant  

portion thereof is extracted below:

“153. COMPULSORY RETIREMENT

The Board has the right to compusorily  retire  an  employee  after  completion  of  ten  years of service or on attainment of the age of  45  years  whichever  is  earlier,  if  the  Board  decides  that  his/her  services  are  not  satisfactory as could be found from the service  records  and  personal  files.   The  grounds  on  which such compulsory retirement of an employee  may  be  effected  are  indicated  in  rules  governing compulsory retirement.

RULES GOVERNING COMPULSORY RETIREMENT:

xxx         xxx  xxx      xxx”

....2.

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Exercising the power under the said Rules, the Board of  

Directors  passed  a  resolution  dated  13.8.2002  to  

compulsorily retire the second respondent from the service  

of the appellant in terms of Rule 153.  In pursuance of it,  

an  office  order  dated  30.9.2002  was  issued  compulsorily  

retiring the second respondent from services with effect  

from 1.10.2002 by paying three months salary in lieu of  

notice.

3. The second respondent raised a dispute under  

Section 70(2) of the Karnataka Co-operative Societies Act,  

1959 ('Act' for short). The Joint Registrar, by Award dated  

5.11.2005, allowed the dispute holding that the appellant-

bank had not followed the procedure contemplated under Rule  

153  in  passing  the  order  of  compulsory  retirement.  

Consequently,  he  set  aside  the  order  of  compulsory  

retirement reserving liberty to the appellant to impose any  

other appropriate punishment in accordance with the service  

rules.   

4. As the said order was not implemented for  

more  than  a  year,  the  second  respondent  filed  W.P.  

No.8823/2007  seeking  a  direction  to  the  appellant  to  

reinstate him in service as ordered by the Joint  Registrar  

and for a further direction to pay him the salary dues from

30.9.2002  

.....3.

- 3 -

with all consequential benefits.  A learned single Judge of  

the High Court, by order dated 20.9.2007,  disposed of the  

said writ petition with a direction to the appellant to  

comply with the order passed by the Joint Registrar.  He  

also  directed  the  appellant  to  dispose  of  the  

representation  submitted  by  the  second  respondent  herein  

seeking certain reliefs.  Learned single Judge passed the  

said order as the Bank had not challenged the order of the  

Joint Registrar.

5. The Bank filed a writ appeal challenging the  

order of the learned single Judge on 19.11.2007. On the  

same  day,  the  Bank  also  filed  an  appeal  before  the  

Karnataka Appellate Tribunal challenging the Award of the  

Joint  Registrar  dated  5.11.2005  (which  is  stated  to  be  

still  pending).   A  Division  Bench  of  the  High  Court  

dismissed  the  writ  appeal  by  the  impugned  order  dated  

19.2.2008. While doing so, the High Court has held that  

Rule  153  of  the  appellant's  Staff  Services  Rules  was  

contrary to Rule 18 of the Karnataka Co-operative Societies  

Rules, and, therefore, “unenforceable”.  The said order is  

challenged in this appeal by special leave.

6. The first contention raised by the appellant

was  

......4.

- 4 -

that in an appeal filed by the appellant Bank against the  

order of learned single Judge disposing of employee's writ  

petition  for  implementation  of  the  Award  of  Joint  

Registrar, the Division Bench could not have held that Rule  

153  of  the  Staff  Services  Rules  was  ineffective  or  

unenforceable, as such a prayer was not made by any one.  

Learned  counsel  for  the  contesting  respondent  (second  

respondent) very fairly conceded that the Division Bench  

could not have pronounced upon the validity of Rule 153 of  

the Staff Services Rules when that was not under challenge  

and that too in an appeal by the Bank challenging the order  

directing  implementation  of  the  Award  of  the  Joint  

Registrar.  Therefore, the order of the Division Bench, to  

the extent it invalidates Rule 153, is liable to be set  

aside.  

7. Insofar as the order of the Division Bench  

affirming the direction of the learned single Judge for  

implementation of the Award of the Joint Registrar, all  

that is to be observed is that if the appellant succeeds in  

the appeal filed before the Karnataka Appellate Tribunal  

against the award dated 5.11.2005 of the Joint Registrar,  

it need not implement the said Award dated 5.11.2005. This  

is   so   because   the   learned   single  Judge  directed

.......5.

- 5 -

implementation of the said order only on the ground that it  

had not been challenged.  If the appellant loses the said  

appeal  pending  before  the  Karnataka  Appellate  Tribunal,  

obviously it has to implement the Award dated 5.11.2005.   

8. Therefore,  we  dispose  of  this  appeal  as  

follows:

(i) The order of the High Court declaring/observing that  

Rule 153 of the Appellant's Staff Service Rules is invalid  

and unenforceable is set aside.

(ii) The direction of the learned single Judge affirmed  

by the Division Bench that the award dated 5.11.2005 has to  

be implemented is subject to the outcome of the pending  

appeal  of the appellant against the said award, before  

the   Karnataka Appellate Tribunal.   

(iii) We  request  the  Karnataka  Appellate  Tribunal  to  

dispose of the pending appeal expeditiously.

(iv) If the award of the Joint Registrar is not stayed by  

the Karnataka Appellate Tribunal, the appellant is bound to  

implement the order, unless it is set aside.

  ......................J.             (  R.V.  

RAVEENDRAN )

New Delhi;    ......................J. January 14, 2011.              ( A.K. PATNAIK )