http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 2  

CASE NO.: Appeal (civil)  6227 of 2004

PETITIONER: Prabhu Dayal

RESPONDENT: Sadhan Sahkari Samiti Mujuri Vikas Khand Paniyara & Ors

DATE OF JUDGMENT: 27/02/2008

BENCH: Dr. ARIJIT PASAYAT & C.K. THAKKER & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T  

CIVIL APPEAL NO.6227 OF 2004

Dr. ARIJIT PASAYAT, J.

1.      Challenge in this appeal is to the judgment of the learned  Single Judge of the Allahabad High Court allowing the writ  petition filed by respondents - Sadhan Sahkari Samiti Mujuri  Vikas Khand Paniyara (hereinafter referred to as the  ’Cooperative society’).  Challenge in this appeal was to the  recovery order issued by the labour authorities on the basis of  a compromise award.   

2.      Background facts in a nutshell are as follows:

       Appellant was appointed as Salesman in the respondent- society which had four employees, as such the labour laws  were not applicable to it.  But the appellant filed cases under  the Payment of Wages Act, 1963 (in short the ’Act’) which were  allowed and the society was directed to pay a sum of  Rs.4,830/-.  In pursuance of the direction in terms of Section  15 of the Act, the amount was paid to the appellant in March,  1988.  He again filed an application under Section 6-H of the  Uttar Pradesh Industrial Disputes Act, 1947 (in short ’U.P.  Act’) making a grievance that he was being paid less than  minimum wages payable under the Act.  The said claim was  also decided ex-parte.  Thereafter he claimed that he had been  terminated.  He made grievances in that regard and on that  basis a reference was made to the Labour Court, Gorakhpur  which was registered as Adjudication Case no.334 of 1987.   Before the Labour Court, parties entered into a settlement and  an award was passed on 9.12.1988 whereunder the appellant  was entitled to receive a sum of Rs.12,726/-.  However, a  condition was stipulated that the present appellant shall  withdraw all applications and proceedings made before various  authorities under the labour laws including under the Act and  also under Section 6-H of the U.P. Act.  The amount has been  paid to the appellant. However, he did not withdraw the  proceedings and wanted their continuance, and some  adjudication has also been made ex-parte.   

In the writ petitions, stand of the appellant-society was  that Act did not apply to the society in view of the notification  dated 30.6.1988. It was also urged that the U.P. Act does not  apply to it as the service conditions of the appellant are

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 2  

governed by statutory regulations. The High Court found  substance in the plea raised by the respondent-society and  allowed the writ petition and set aside the orders dated  31.12.1988, 25.9.1989, 31.3.1990, 6.9.1990 and the award  dated 9.12.1988 which was made on the basis of a settlement  arrived at between the parties.                       

       Appellant has challenged legality of the High Court’s  order on the ground that in any event an award made on  compromise cannot be set aside.  

3.      Learned counsel for the respondents supported the  impugned judgment.

4.      In Himanshu Kumar Vidyardhi and Ors. v. State of Bihar  and Ors. (1997 (4) SCC 391), 1t was held that industrial laws  do not apply to the employees whose service conditions are  governed by statutory rules. So, U.P. Act does not apply to  employees of the cooperative society. The notification dated  30.6.1988 issued under sub-section (2) of Section 26 of the  Minimum Wages Act, 1948 (in short ’the Wages Act’) makes  the position clear that provisions of the aforesaid Act are not  applicable to the service of workman employed under the  societies which are registered with the Registrar of Cooperative  Societies.  It was indicated that the salaries and conveyance  etc. paid by the registrar of the cooperative societies are also  reviewed from time to time.              5.      In R.C. Tiwari v. M.P. State Cooperative Marketing  Federation Ltd. And Ors. (AIR 1997 SC 2652) this Court had  held that in view of the arbitration clause in the Uttar Pradesh  Societies Act (in short ’Societies Act’) provisions of the  Industrial Disputes Act are not applicable.   

6.      Therefore, the High Court was justified in its view. But so  far as award dated 9.12.1988 is concerned, the same was  made on the basis of a settlement between the parties.  That  being so, the High Court ought not to have set aside the  award.  In the ultimate result, the appeal is allowed by setting  aside that part of the impugned order relating to award dated  9.12.1988.  There shall be no order as to costs.