THE PATIALA CENTRAL COOPERATIVE BANK LTD. versus THE PATIALA CENTRAL COOPERATIVE BANK EMPLOYEES UNION AND ANR. ETC.

Citation: [1996] SUPP. 6 S.C.R. 347 · Decided: 16-09-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed

Judgment (excerpt)

THE PATIALA CENTRAL COOPERATIVE BANK LTD. 
A 
v. 
THE PATIALA CENTRAL COOPERATIVE 
BANK EMPLOYEES UNION AND ANR. ETC. 
SEPTEMBER 16, 1996 
[B.P. JEEVAN REDDY, S.C. SEN AND S.B. MAJMUDAR, JJ.} 
B 
Labour Law-Industrial Disputes Act, 1947-Section 19--Agree-
ment-Termination of-Agreement Validly terminated Under Section C 
19(2)-Effect and Scope-Terms of the agreement can not be enforced after 
the agreement is validly terminated under Section 19(2). 
Punjab Co-operative Societies Act 1961-Section 84-B-Bar on pay-
ment of Deamess Allowance at a higher rate than the rate admissible to the 
Government employees drawing the same p~alidity-Not ultravires the D 
State Legislature-It is a valid legislation. 
On the basis of a charter of demands of the respondents, a Union of 
the petitioner Bank, a comprehensive agreement dated May 28, 1973 ~as 
executed inter alia providiqg the fixation of pay scales after classifying the 
various categories of staff, Fixation Formula providing for pay rise, 
provision for dearness allowances, travel allowance, house rent 'allowance, 
E 
city compensation allowance and various other allowances. As a matter of 
fact, the agreement embraced all aspects of the service condition. The 
agreement dated May 28, 1973 was valid for a period of four years and 
came to end on 31st March, 1977. On the expiry of the agreement, a dispute F 
arose between the parties interalia about the payment of Dearness Al-
lowance in terms of the agreement dated 28th May, 1973. The Union 
asserted that the aforesaid agreement is binding even after the period 
mentioned in the agreement and the agreement can not be unilaterally 
repudiated as per the provisions of S.19(2) of the Industrial Disputes Act, G 
1947. The respondent Union also claimed that as no notice terminating the, 
agreement had been given by the petitioner bank, the agreement continued. 
to be in force and was binding upon the petitioner and the payment of 
Dearness Allowance specified in the agreement can not be avoided by the 
petitioner'. The respondent Union also contended that the introduction of 
Section 84-B by amending Act, 1981, in the Punjab Co-Operative Societies H 
347 
348 
SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. 
A Act, 1961, inter alia providing that the Dearness Allowance at a higher rate 
than admissible to the Government Employee with the same pay rate shall 
not be admissible to an employee of the co-operative society, can not in 
any way abrogate an agreement protected by the provisions of the In-
dustrial Disputes Act. 
B 
The respondent Union filed a Writ Petition in the High Court·and 
besides reiterating their earlier stands, challenged the virus of Section 
84-B of the Punjab Co-operative Societies Act, 1961 as being violative of 
Section 19 of the Industrial Disputes Act, for the reason that the Punjab 
Cooperative Societies Act is a general Act and it can not curtail or control 
C the specific provisions of the Industrial Disputes Act, in any manner 
whatsoever. The High Court held that Section 84-B of the Punjab Coopera-
tive Societies Act was violative of the Industrial Disputes Act and also 
ultravires the State Legislature of Punjab. The amended Section 84-B 
could not take away the effect of settlement dated 28th May, 1973 and the 
agreement/settlement could continue to be subsisting, and binding between 
D the parties and class III and IV employees of the petitioner bank were held 
entitled to claim Dearness Pay in terms of the 1973 agreement. The High 
Court further held that service condition of an employee can not be 
changed in any of the matter mentioned in Fourth Schedule without giving 
notice under Section 19(2) of the Industrial Dispute Act and this being so, 
E the unilateral withdrawal of city compensatory allowance and dearness 
allowance by the Bank affected the service condition of the respondent and 
attracted the mandatory condition of Section 9-A of the Industrial Dispute 
Act. 
F 
G 
H 
In appeal to this Court, the respondent in their counter affidavit did 
not dispute the factual aspect of the case including the issuance of notice 
dated 25.2.1978 terminating the ~greement dated 28th May, 1973 issued by 
the petitioner. 
Allowing the appeal, this Court 
HELD : (Per Sen, J.) 1. It is not in dispute that notice was given on 
25th Feb. 1978, terminating the agreement dt. 28th May, 1973 and the 
agreement was validly terminated by the Management and the same ceased 
to operate from that date. [362-C] 

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