Case Note Junagadh

C/SCA/17274/2019 CAV JUDGMENT DATED: 05/04/2024
IN THE HIGH COURT OF GUJARAT
R/SPECIAL CIVIL APPLICATION NO. 17274 of 2019

With
CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2023
In
HON’BLE JUSTICES MR. JUSTICE BHARGAV D. KARIA

Dt. 05.04.2024
JUNAGADH DISTRICT COOPERATIVE BANK LTD.

v.
GUJARAT BANK WORKERS UNION
Whether the recruitment process initiated by the bank constitutes an "illegal change"
under Section 46(3) of the Gujarat Industrial Relations Act.
Gujarat Industrial Relations Act, 1946 — Bank's expansion and vacancies prompted
recruitment efforts, challenged by union citing a 2017 agreement (superseding 2002)
restricting it, with a Labour Court injunction halting recruitment initially. Held, bank can
recruit clerks and peons without issuing a notice of change — Recruitment must follow
NABARD guidelines and framed rules approved by the competent authority — petition is
allowed, and the Civil Application is disposed of accordingly. [Para 7-11]
Important Points:
 The bank's attempt to recruit in 2018 was challenged by the union, leading to a series
of legal proceedings.
 The Industrial Court upheld the Labour Court's decision.
 The petitioner seeks relief from the court to proceed with the recruitment process
while addressing the union's concerns about compliance with the Gujarat Industrial
Relations Act.
Page 1 of 47
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
With
CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2023
In
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
==========================================================
1 Whether Reporters of Local Papers may be allowed

to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy

of the judgment ?
4 Whether this case involves a substantial question

of law as to the interpretation of the Constitution
of India or any order made thereunder ?
==========================================================
JUNAGADH DISTRICT COOPERATIVE BANK LTD.
Versus
GUJARAT BANK WORKERS UNION
==========================================================
Appearance:
MR KM PATEL, SENIOR ADVOCATE WITH MR.VARUN K.PATEL(3802) for
the Petitioner(s) No. 1
MR SHALIN MEHTA, SENIOR ADVOCATE WITH MS PARUL P
VASAVADA(2147) for the Respondent(s) No. 1
RUSHABH H MUNSHAW(8958) for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 05/04/2024
Page 2 of 47
CAV JUDGMENT
1.Heard learned Senior Advocate Mr. K.M. Patel with learned
advocate Mr. Varun Patel for the petitioner and learned Senior
Advocate Mr. Shalin Mehta with learned advocate Ms. Parul
P. Vasavada for the respondent.
2.Rule returnable forthwith. Learned advocate Ms. Parul Vasavada
waives service of notice of rule on behalf of the respondent.
3.By this petition under Article 227 of the Constitution of India, the
petitioner has challenged the order dated 27.06.2019 passed by the
Industrial Court, Rajkot in BIR Appeal (IC) No.3 of 2019 and
order dated 11.02.2019 passed by the Labour Court, Junagadh in
BIR Application No.1/2018.
4.Brief facts of the case are that the
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petitioner - Junagadh District Cooperative
Bank Ltd. is registered under the provisions
of Gujarat Cooperative Societies Act, 1961
and is engaged in banking business and
having head office at Junagadh and 44
branches at different places in Junagadh,
Porbandar and Gir Somnath Districts.
4.1) Grievance of the petitioner is concerned with regard to
the impugned orders denying the petitioner to recruit clerks and
peons in the bank under the provisions of the Gujarat Industrial
Relations Act, 1946 (For short “the Act”) originally known as the
Bombay Industrial Relations Act, 1946.
4.2) It is the case of the petitioner that prior to the
impugned orders passed in the proceedings, there was previous
litigation with regard to settlement dated 16.01.2002 between
the parties. Such
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settlement was for the period from 01.07.2001
to 30.06.2005 and on expiry of the period,
the respondent Union issued notice of change
in the year 2007 desiring change in wage
structure and other conditions of service of
employees and filed Reference (IT) No.1/2007
before the Industrial Court, Rajkot. The
dispute pursuant to notice of change of bank
was also registered as Reference (IT)
No.3/2007.
4.3) Both the references were proceeded on the interim
order stage, wherein Industrial Court by order dated 04.12.2013
partly allowed the injunction application of the respondent Union
by directing that the appointment to be made will be on temporary
basis and subject to outcome of the Reference.
4.4) The petitioner bank challenged the
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order of injunction before this Court by
preferring Special Civil Application
No.18330/2013 and respondent Union challenged
the order by preferring Special Civil
Application No.16120/2013. As the matter was
not settled between the parties, about 228
employees filed writ petition being Special
Civil Application No.2188/2016 challenging
the order dated 31.12.2015 by which
application for separate appearance was not
permitted by the Industrial Court.
4.5) Thereafter all members of employees resigned
from the membership of the respondent union and arrived at
amicable settlement with the bank on 30.06.2017. Accordingly,
both the references were withdrawn as per the award dated
15.06.2017 and the pending litigation was also withdrawn before
this Court.
Page 6 of 47
4.6) The petitioner bank thereafter on 10.05.2018
published an advertisement for recruitment for the post of Deputy
Manager, Senior Officer, Junior Officer, clerk and peon to fill up
154 vacancies as there was acute shortfall in the required staff due
to vacancies arising out of promotions, retirement and also
requirement of opening of new branches permitted by National
Bank for Agriculture and Rural Development (For short
“NABARD”). It is the case of the petitioner that at managerial and
officers’ level, the petitioner bank is required to continue
incumbents of the posts of Deputy Manager, Senior Manager,
Junior Officer who have attained the age of superannuation by
extending their term.
4.7) The respondent Union claiming to be representing the
employees of the petitioner bank as representative Union
under the
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provisions of the Act filed BIR Application
No.1 of 2018 before the Labour Court,
Junagadh alleging that proposed recruitment
is in breach of last settlement with the
respondent Union on 16.01.2022 and,
therefore, action of the petitioner bank of
undertaking recruitment process without
giving notice of change as required under
section 42(1) of the Act amounts to illegal
change as per section 46(3) of the Act.
4.8) In reply, it was contended by the petitioner bank that
settlement dated 16.01.2002 had expired and terminated long back
and was not in force and thereafter, settlement with the employees
was entered into on 30.06.2017 which would govern the criteria for
recruitment, qualification prescribed therein which were according
to the terms of instructions from NABARD and, therefore, there
was no illegal change. It
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was also pointed out that by proposed
recruitment, no new posts are created and the
recruitment was on the existing vacancies and
therefore, the recruitment of “employees” is
expressly covered by Item 6(i) of the
Schedule III of the Act and would not be
covered by Item 1 and 2 of Schedule II of the
Act and therefore, no notice of change was
required to be given.
4.9) Labour Court after considering the documents placed
on record and submissions made by both the sides by order dated
03.07.2018 allowed the application Exh.2 filed by respondent no.2
Union for interim injunction and restrained the petitioner bank
from proceeding further with the recruitment process of 154 posts
advertised on 10.05.2018.
4.10) Being aggrieved, the petitioner bank
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preferred Special Civil Application No.10800
of 2018 before this Court challenging the
order dated 03.07.2018 which was not
entertained vide order dated 25.07.2018 on
the ground that the petitioner can prefer
revision application under section 85 of the
Act before the Industrial Court.
4.11) Accordingly, the petitioner preferred Revision
Application No. 1 of 2018 which was dismissed by order dated
05.01.2019. The petitioner therefore, preferred Special Civil
Application No.1102/2019 challenging the order passed in revision
application and this Court by order dated 24.01.2019 granted
interim relief in favour of the petitioner bank by staying the order
of interim injunction against recruitment and permitted the
petitioner bank to make appointments in the clerical post and sub-
ordinate staff subject to outcome of the
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main proceeding between the parties along
with other directions. With regard to
recruitment on the posts of Managers and
Officers, as the respondent Union did not
raise any objection, the interim order passed
by this Court permitted the recruitment
subject to outcome of the proceeding for the
post of clerks and peons which was in line
with order dated 21.12.2013 passed in Special
Civil Application No.18330/2013 and Special
Civil Application No.18016/2013 between the
parties.
4.12) The respondent Union preferred Letters Patent Appeal
No.270/2019 against the order dated 24.01.2019 which was
disposed of by order dated 07.02.2019 by clarifying that the
observations made in paragraph no.9 of the said order are prima
facie and Labour Court shall not be influenced by the same.
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4.13) Labour Court thereafter by impugned Judgment and
Order dated 11.02.2019 partly allowed BIR Application No.1 of
2018 by holding that the action of the proposed recruitment by the
bank pursuant to the advertisement dated 10.05.2018, save and
except the posts of Managers and Officers amounts to illegal
change and directed the petitioner bank to withdraw the same.
4.14) The petitioner challenged the aforesaid order before
the Industrial Tribunal by preferring Appeal No.3 of 2019. The
Industrial Tribunal did not grant the interim relief and by the
impugned order dated 27.06.2019 rejected the appeal.
4.15) Being aggrieved, the petitioner has preferred this
petition challenging both the orders.
5.During the pendency of this petition, the
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petitioner bank has preferred Civil
Application No.1 of 2023 by placing on record
the current requirement of posts to be filled
up due to expansion of working of the
petitioner bank. It would therefore, be
germane to refer to the averments made in the
application as under:
”4. It is submitted that the case of the Opponent

Union against the proposed recruitment by Bank
was based on alleged breach of settlement dated
16.01.2002 which was binding and agreed to be in
operation till 30.06.2005 by contending, inter alia
that:-
(i) It creates/increases the number of persons

to be employed in bank by proposed
recruitment/creates new posts and;
(ii) Qualification and wages are in breach of

settlement dated 16.01.2002;
and same having been done without giving notice

of change amounts to illegal change. The applicant
submits that there is no sanctioned set up of staff
in the applicant bank under any settlement or
award and therefore
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there is no question of increase in strength of

number of persons to be employed or creating new
posts requiring notice of change. Moreover, the
recruitment being subject matter covered by item
no.6 of Schedule-III, no notice of change is
required to be given after expiry of the settlement
dated 16.02.2002 on 30.06.2005 as far as
qualification is concerned.
5. The applicant bank has applied for opening of

5 New branches vide application dated 20.10.2023
made to Reserve Bank of India. Applicant states
that in different branches as also at the Head office
there is huge shortfall of staff in the category of
clerks and peons. It has therefore become
necessary to file the present application seeking
permission of this Hon'ble Court to make
appointment of 165 number of clerks and 80
number of peons subject to outcome of the
outcome of this petition.
6. The applicant states that as on 31.03.2002 (in

the year in which the settlement relied on by the
Opponent Union was arrived at), the Bank had
deposits of about Rs.122 crores which has by now
increased to manifold to about Rs. 1103 crore as
on 30.09.2023. Similarly, the loans and advances
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made by the applicant bank as on 31.03.2002 were

about Rs. 205 crore whereas as on 30.09.2023 it is
about 1207 crores. Apart from
H.O. at Junagadh, the Bank has 47 branches in 3
Districts of its area of operation viz. Junagadh,
Porbandar and Gir Somnath. Having regard to the
financial position of the Applicant Bank it falls in
the category of Class- 'B' bank as per NABARD
norms. As per the criteria fixed by NABARD as
Class-'B' bank, the applicant Bank is required to
have 204 clerks and
93 peons. As against that today there are only 52
permanent clerks and only 20 permanent peons.
Thus, there is a shortfall of 152 clerks and 73
peons. The Bank will also need further manpower
on the posts of clerks and peons of about 10 and 5
respectively on the permission to open 5 new
branches, if granted by Reserve Bank of India for
which the applicant has given application to
Reserve Bank of India on 20.10.2023. The
applicant bank expects some clerks and peons to
retire in near future. The administration and work
of the Applicant Bank is suffering seriously on
account of shortage of required manpower in the
category of clerks and peons. The Bank therefore
needs to make appointment upto 165 clerks and
upto 80 peons on urgent basis.
Page 15 of 47
7. An advertisement for recruitment of

clerks, peons and other recruitment was giving rise
to the present litigation was issued on 10.05.2018
but no recruitment could be made on account of
order of the Labour Court and Industrial Court
against which the present petition is filed. Much
time has passed after the said advertisement was
issued on 10.05.2018. The applicant states that the
advertisement inviting applications for recruitment
issued on 10.05.2018 was for approximately 60
clerks (40 for Gujarati medium Graduate and 20
for all throughout English medium candidates) and
approx. 40 peons. As stated earlier the NABARD
has issued guidelines in its Circular dated
17.05.2019 (Annexure-'C). The assessment of
manpower required by the applicant bank for the
posts of Clerks and Peons in the present
application is made on the basis of those
guidelines. The applicant bank, subject to order of
this Hon'ble Court permitting the Bank to do so,
proposes to issue fresh advertisement and
undertake recruitment of 165 clerks and 80 peons.
The qualification for the said posts will be as per
NABARD guidelines as agreed in the last
settlement with the employees
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dated 30.06.2017 (Page No.155 of the compilation

of main writ petition). The same will be as
follows:
Post Qualifications
Clerk Minimum Graduate in any
faculty.
Peon Minimum std. X and maximum XII
As far as wages are concerned, the bank proposes

to pay consolidated wages of Rs.20,000/-per
month to clerks and Rs. 15,000/- per month as
consolidated wages to peons for the period of first
six months from the date of appointment. It may
be stated that the consolidated wages proposed to
be paid as above, are more than total wages
payable at the minimum of basic pay scale of clerk
and peons as per Settlement dated 16.01.2002
which is relied on by the Opponent Union and the
applicability of which is disputed by Applicant
bank at this stage. Further on expiry of 6 months
from the date of appointment, clerks and Peons
will be paid wages as per settlement dated
03.06.2017.”
6.The petitioner bank has therefore, prayed for permission to
undertake recruitment procedure
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and appointment upto 165 number of clerks and
upto 80 number of peons on permanent basis as
per qualification agreed in settlement dated
30.06.2017.
7.Learned Senior Advocate Mr. K.M. Patel for the petitioner bank
submitted that due to the pending litigation, the petitioner bank is
unable to recruit clerks and peons after following due procedure of
recruitment as per Circular No.131/2019 dated 17.05.2019 issued
by NABARD containing the recommendations of the Committee
for assessment of Human resources in Short Term Cooperative
Credit Structure in the post CBS Environment and guidelines for
Human Resource Policy wherein recommendation of recruitment
procedure is prescribed. It was submitted that the petitioner bank is
desirous of recruiting the clerks and the peons to carry out day to
day functions of the petitioner bank. It was
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submitted that there is no fixed number of
persons employed by the petitioner bank
either fixed by the petitioner bank or the
respondent Union in settlement of 2002. It
was therefore submitted that both the Labour
Court and the Industrial Tribunal have
committed an error by invoking the provisions
of section 42(1) read with Item No.1 and 2
of Schedule II read with section 46 of the
Act instead of applying Item No.6 (i) of the
Schedule III of the Act.
7.1) Learned Senior Advocate Mr. Patel also referred to
and relied upon section 116 of the Act which provides for
agreement etc. when cease to have effect to submit that there is no
illegal change as per section 46(3) of the Act as held by both the
courts below as no notice of change is required to be issued by the
petitioner bank for employment including reinstatement and
Page 19 of 47
recruitment as provided in Schedule III of
the Act as there is no permanent or semi-
permanent increase in the number of persons
employed or to be employed in occupation of
the petitioner bank.
7.2) In support of his submission, reliance was placed on
the decision of Apex Court in case of Ashok K. Jha and others v.
Garden Silk Mills Limited and another reported in (2009) 10
Supreme Court Cases 584 to submit that the Hon’ble Apex Court
after considering the provisions of section 3(18) which defines
“industrial matter” and section 42(1) pertaining to notice of change
as well as Item No. 1 and 2 of Schedule II and item no.2 of
Schedule III has held that mere transfer of workers within the
establishment would not attract Item No.1 and 2 of Schedule
II but would be covered by Item No.2 of
Schedule III as there is a specific item in
Page 20 of 47
this regard for assignment of work and
transfer of workers within the establishment.
It was therefore, submitted that similarly in
the facts of the present case as the
petitioner bank is desirous of recruitment to
the post of clerks and peon, item No.2 of
Schedule II which refers to permanent or semi
permanent increase in number of persons
employed or to be employed would be not
applicable as there is no predetermined
number of permanent or semi-permanent number
of persons employed by the petitioner bank.
7.3) Reliance was placed on the decision in case of
Division Bench of Bombay High Court in case of Yamuna Mills
Company Ltd v. Majoor Mahajan Mandal, Baroda and others
rendered in Special Civil Application Nos. 30 and 31 of 1957 dated
13.03.1957, wherein it is observed by the Bombay High Court that
when an employer desires to bring about a
Page 21 of 47
change in respect of an industrial matter
specified in Schedule III, there is no
corresponding obligation on the employer to
give notice of change. It was further
submitted that the Bombay High Court in the
said decision has held that after termination
of award, it would be open for both the sides
to bring about a change without the notice of
change such as matters enumerated in Schedule
III to proceed to bring about the change
because the impediment placed by section
46(3) is removed. It was therefore, submitted
that once award dated 2002 has ceased to
exist on its termination between the parties
in the year 2005, there was no need to issue
notice of change as contemplated in Schedule
II as recruitment would fall within realm of
Schedule III of the Act.
8.On the other hand, learned Senior Advocate Mr. Shalin Mehta
for the respondent submitted
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that settlement dated 16.01.2002 would
continue to operate and the petitioner bank
has committed breach of the provisions of
section 42(1) of the Act by not issuing the
notice of change to the respondent Union
which is a registered representative Union,
amounting to illegal change as per the
provisions of section 46(3) of the Act. It
was therefore, submitted that both the Courts
below have rightly partly allowed the
application filed by respondent Union holding
that there is an illegal change by issuing
advertisement dated 10.05.2018 by the
petitioner bank for recruitment of clerks and
peons.
8.1) Learned Senior Advocate Mr. Mehta referred to the
averments made in reply to additional affidavit filed on behalf of
the petitioner bank to submit that the question in this petition
is not whether the
Page 23 of 47
petitioner bank is entitled to make any
recruitment when necessary but whether the
bank is entitled to make recruitment to the
newly created posts, requiring new
qualifications and prescribing new wages
under the guise of making recruitment. It was
submitted that such provisions of Schedule II
(Item nos. 2, 4 and 9) of the Act, norms of
recruitment to public posts for making such
recruitment are required to be followed by
issuing notice of change to the respondent
Union. It was therefore, submitted that the
only demand of respondent Union is to make
recruitment for the existing post according
to the rules and even if the petitioner bank
wants to create new categories of posts with
better wage scales and requiring higher
qualifications providing for better
administration, respondent Union has no
objections to such rationalisation but it
should be done in accordance with the
Page 24 of 47
provisions of law i.e. the provisions of the
Act by giving notice of change to the Union
and in the event of Union’s objections and
after referring the matter to Industrial
Court, who will be the final arbiter in such
circumstances.
8.2) It was submitted that it is not possible to understand
why the petitioner bank is feeling shy in pursing such course of
issuing notice of change and accepting the decision of Industrial
Court. It was therefore, submitted that intention of the petitioner
bank is to ignore the respondent Union by ignoring the provisions
of Schedule
II of the Act for not issuing the notice of
change.
8.3) It was submitted that most of the appointments made
by the petitioner bank since 2001 are made without following
due
Page 25 of 47
process of law by employing near and dear
ones of the higher officers. It was submitted
that the respondent Union is only desirous of
following the mandatory requirements of the
provisions of the Act to fill up the
vacancies or for creation of new category of
posts carrying higher qualification or
prescribing better wages after giving notice
of change to respondent Union which is
working as representative and approved Union
for the last 50 years.
8.4) It was further submitted that after the order passed by
the Labour Court on 11.02.2009, the petitioner bank has recruited
more than 100 persons as daily wagers, clerks and peons giving
them substantial rise, sending them for training and then appointing
them directly as clerk or junior officers in violation of orders
impugned in this petition.
Page 26 of 47
9.Having considered the submissions made by learned advocates for
both the sides, it would be germane to refer to the relevant
provisions of the Act:
“3(18) "Industrial matter" means any matter

relating to employment, work, wages, hours of
work, privileges, rights or duties of employers or
employees, or the mode, terms and conditions of
employment, and includes-
(a) all matters pertaining to the relationship

between employers and employees, or to the
dismissal or non-employment of any person,
(b) all matters pertaining to the demarcation of

functions of any employee or classes of
employees;
(c) all matters pertaining to any right or claim

under or in respect of or concerning a registered
agreement or a submission, settlement or award
made under this Act;
(d) all questions of what is fair and right in

relation to any industrial matter having regard to
the interest of the person
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immediately concerned and of the community as a

whole;
42. Notice of change. (1) Any employer intending

to effect any change in respect of an industrial
matter specified in Schedule II shall give notice of
such intention in the prescribed form to the
representative of employees. He shall send a copy
of such notice to the Chief Conciliator, the
Conciliator for the industry concerned for the local
area, the Registrar, the Labour Officer and such
other person as may be prescribed. He shall also
affix copy of such notice at a conspicuous place on
the premises where the employees affected by the
change are employed for work and at such other
place as may be directed by the Chief Conciliator
in any particular case.
(2) Any employee desiring a change in respect

of an industrial matter not specified in Schedule I
or III give a notice in the prescribed form to the
employer through the representative of employees,
who shall forward a copy of the notice to the Chief
Conciliator, the Conciliator for the industry
concerned for the local area, the Registrar, the
Labour Officer and
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such other person as may be prescribed.
(3) When no settlement is arrived at in any

conciliation proceeding in regard to any industrial
dispute which has arisen in consequence of a
notice relating to any change given under sub-
section (1) or sub-section (2), no fresh notice with
regard to the same change or a change similar in
all material particulars shall be given before the
expiry of two months from the date of the
completion of the proceeding within the meaning
of section 63. If at any time after the expiry of the
said period of two months, any employer or
employee again desires the same change or a
change similar in all material particulars, they
shall give fresh notice in the manner provided in
sub-section (1) or (2), as the case may be.
(4) Any employee [or a representative

union] desiring a change in respect of (i) any order
passed by [the] employer under standing orders, or
(ii) any industrial matter arising out of the
application or interpretation of standing orders, or
(iii) an industrial matter specified in Schedule III,
"[except item (5) thereof) shall make an
application
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to the Labour Court '[and as respects change

desired in any industrial matter specified in item 5
of Schedule III, to the Industrial Court):
Provided that no such application shall lie unless

the employee for a representative union) has in the
prescribed manner approached [the] employer with
a request for the change and no agreement has
been arrived at in respect of the change within the
prescribed period.
46. Illegal change.- (1) No employer shall make

any change in any standing order settled under
Chapter VII without following the procedure
prescribed therefore in this Act.
(2) No employer shall make any change in any

industrial matter mentioned in Schedule II -
[(ai) before giving notice of the change as required

by the provisions of sub- section (1) of section 42;]
(i) within the period provided for in sub-section

(1) of section 44 unless an agreement is arrived at;
[(ii) where no agreement is arrived at before the

completion
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of the conciliation proceedings and during the

period of ten days thereafter,)
(iii) where no settlement is arrived at, before the

date on which the award of the arbitrator or the
Industrial Court, or as the case may be, decision of
the Wage Board, comes into operation.]
(3) No employer shall make any such change

in contravention of the terms of a settlement,
[effective award, registered agreement or effective
order or decision of a Wage Board).
(4) Any change made in contravention of

the provisions of sub- section (1), (2) or (3) shall
be illegal.
(5) Failure to carry out the terms of any

settlement, award, "(registered agreement or
effective order or decision of a Wage Board], [a
Labour Court or the Industrial Court affecting
Industrial matters] shall be deemed to be an illegal
change.”
Schedule II (Section 42)
1. Reduction intended to be of permanent or

semi-permanent
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character in the number post or of persons

employed or to be employed in any occupation or
process or department or departments or in a shift
not due to force majeure.
2. Permanent or semi-permanent increase in

the number of persons employed or to be
employed in any occupation or process or
department or departments.
3. Dismissal of any employee except as

provided for in the standing orders applicable
under this Act.
4. Rationalisation or other efficiency system

of work, [whether by way of experiment or
otherwise]
5. All matters pertaining to shift working which

are not covered by the Standing Orders applicable
under this Act.
6. Withdrawal of recognition to unions of

employees.
7. Withdrawal of any customary concession or

privilege or change in usage.
8. Introduction of new rules of discipline or

alteration of existing rules and their interpretation,
except in so far
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as they are provided for in the standing, orders

applicable under this Act.
9. Wages including the period and mode of

payment.
10. Hours of work and rest intervals.
11. All matters pertaining to leave and

holidays, other than those specified in items 6 and
7 in Schedule 1.
SCHEDULE III
(Section 42)
(1) Adequacy and quality of materials and

equipment applied to the workers.
(2) Assignment of work and transfer of

workers within the establishment.
(3) Health, safety and welfare of employees

(including water, dining sheds, rest sheds, latrines,
urinals, creches, restaurants and such other
amenities).
(4) Matters relating to trade union

organization, membership and levies
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(5) Construction and interpretation of awards,

agreements and settlements.
(6) Employment including -
(i) reinstatement and recruitment;
(ii) unemployment to persons previously

employed in the industry concerned
(7) Payment of compensation for closure)”
10. Considering the above provisions of the Act and the facts
emerging from the record from 2002 onwards and the litigation
between the parties, it appears that the petitioner bank has adopted
an approach of ignoring the respondent Union by consistently
contending that the petitioner bank is not required to issue any
notice for change as contemplated under the provisions of section
42(1) read with Schedule II Item (1) and (2) on the ground that the
aspect of recruitment would fall under Item No.(6)(i) of
Schedule III,
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and therefore, the provisions of section
42(1) of the Act would not be applicable. In
such circumstances, it is not in dispute that
recruitment would fall under the employment
category of Item No.(6) of Schedule III and
as held by the Apex Court in case of Ashok K.
Jha and others v. Garden Silk Mills Limited
and another (supra), no notice of change
would be required to be issued for items
falling under Schedule III of the Act.
However, on perusal of Item No.2 of Schedule
II which provides for permanent or semi-
permanent increase in the number of persons
employed or to be employed, the same would be
applicable in the facts of the case when the
petitioner bank wants to increase the number
of employees in the post of clerks and peons
to which the provisions of the Act would be
applicable, however, there is no fixed
number of clerks and peons who were working
in the year 2002. Admittedly by passage of
Page 35 of 47
time and due to the expansion of work of the
petitioner bank, the requirement of clerks
and peons have increased manifold as stated
by the petitioner bank in the averments made
in the Civil Application which are reproduced
here-in-above and accordingly, the petitioner
bank would not be required to follow the
provisions of the Act by issuing notice of
change to the respondent Union with regard to
increase in permanent or semi-permanent
number of persons employed or to be employed
as required as per Item No.2 of Schedule II.
Therefore, vacancies of clerks and peons are
concerned, the recruitment process would be
governed by Item No.6(i) of Schedule III of
the Act which would not require any notice of
change. It is also pertinent to note that the
settlement arrived at by the petitioner bank
with the employees on 30.06.2017 is not as
per the provisions of the Act, as such
settlement was not with the registered Union
Page 36 of 47
as per section 3(30) of the Act which
provides for “registered union’ means a Union
registered under this Act. It is not in
dispute that respondent Union is a registered
Union as well as representative Union.
“Representative of employees” are defined
under section 3(32) means a representative of
employees entitled to appear or act as such
under sub-section (30) and “representative
Union” is defined under section 3(33) which
means a Union for the time being registered
as a Representative Union under the Act.
Therefore, the settlement arrived with the
employees on 30.06.2017 is not either with
registered Union or representative employee
or representative Union and therefore, such
settlement would be out of purview of section
42 of the Act which provides for notice of
change to the representative employees if the
petitioner bank intends to effect any change
in respect of industrial matter specified in
Page 37 of 47
Schedule II of the Act. Industrial matter as
defined in section 3(18) means any matter
relating to employment, work, wages etc.
Therefore, the recruitment which is part of
the employment as relied upon by the
petitioner to invoke Item No.6 of Schedule
III of the Act would be an industrial matter
and therefore, if the petitioner bank wishes
to increase the permanent number of persons
employed which was prevailing at the relevant
time in the year 2002 when the settlement was
arrived at between the petitioner, in absence
of any fixed number of posts of clerks and
peons as agreed between the petitioner and
respondent Union, it would not be governed by
Item No.2 of Schedule II of the Act.
Moreover, as such settlement has ceased to
exist since 2005 and in absence of any other
settlement between the parties, both the
Courts below have erred in relying upon such
settlement. As such, there is no settlement
Page 38 of 47
after 2005 between the parties and notice of
change issued by the respondent Union in the
year 2007 has also been withdrawn after the
settlement arrived at between the petitioner
bank and the employees in the year 2017.
Therefore, for all intents and purpose,
respondent Union has ceased to become a
registered Union representing the employees
of the petitioner bank. Therefore, the
impugned order insisting for notice of change
as contemplated under section 42(1) of the
Act and holding that the advertisement dated
10.05.2018 amounts to illegal change as per
section 46(3) are therefore, contrary to the
facts on record and are accordingly, liable
to be quashed and set aside. The petitioner
bank is therefore, not required to issue any
notice of change as contemplated in Item No.2
of Schedule II read with section 42(1) of the
Act as held by the Apex Court in case of
Ashok K. Jha and others (supra) as under:
Page 39 of 47
“17. Section 46(4) provides that no employer shall

make any change in any industrial matter
mentioned in Schedule II before giving notice of
change as required by the provisions of sub-
section (1) of Section 42 and any change made in
contravention of the provisions of sub-Section (1),
(2) of (3) shall be illegal.
18. Item 1 of Schedule II reads:
" Reduction intended to be of permanent or semi-
permanent character in the number of persons
employed or to be employed in any occupation or
process or department or departments or in a shift
not due to force majeure."
19. Item 2 of Schedule II refers to:
"Permanent or semi- permanent increase in the
number of persons employed or to be employed in
any occupation or process or department or
departments."
20. Item 2 of Schedule III reads:
" Assignment of work and transfer of workers
within the establishment."
21. A close look at the Item Nos.
1 and 2 of Schedule II and Item 2 of Schedule III
would show that insofar as assignment of work
and transfer of workers within the
Page 40 of 47
establishment is concerned, the subject is precisely

and specifically covered by Item 2 of Schedule
III. The expression,
`assignment of work and transfer of workers
within the establishment' is plain and admits of no
ambiguity. If the orders of transfer are of the
description mentioned in item 2 of Schedule III,
item 2 of Schedule III must come into full play.
Item nos. 1 and 2 of Schedule II operate altogether
in a different field.
22. Basically, Items 1 and 2 of Schedule II deal
with reduction in the number of persons employed
or to be employed in any occupation or process or
department or departments or in a shift or
permanent or semi permanent increase in the
number of persons employed or to be employed in
any occupation or process or department or
departments. A mere transfer of workers within
the establishment would not attract Item Nos. 1
and 2 of Schedule II but would be covered by Item
2 of Schedule III as there is a specific item in this
regard. A specific item would exclude the items of
general character and, in that view of the matter, in
the matters of transfer of workers within the
establishment and assignment of work by
the
Page 41 of 47
employer, the specific Item 2 of Schedule III is

attracted.
xxxx
25. We are not persuaded by the submission of
the learned Counsel for the appellants that there is
a basic difference in the nature of machines in the
Crimping and Twisting Departments and that
workers are not trained to work at Twisting
Machines. If that were so, the workers ought to
have led evidence in that regard which they never
did.
26. The Division Bench of the High Court in
this regard considered the matter thus:
"...We do appreciate that transfer of the employees
from one department to another, in absence of
corresponding transfer, would necessarily result
into reduction in manpower in one department and
corresponding increase in the manpower in the
other department. But, we are unable to agree that
Item 1 of the Schedule II to the Act is intended to
cover the cases like the one before us. Had that
been the legislative intent the "assignment of work
and the transfer of workers within the
establishment" would not have been included in
Schedule III to the act. If the reasoning of the
Industrial court were accepted,
Page 42 of 47
the above referred Item 2 in Schedule III to

the Act would become nugatory.
The cardinal principle of

interpretation of statutes requires that
the interpretation which would render a part of
the legislation nugatory or otiose should be
avoided. What is required is
harmonization or conciliation
amongstthe two seemingly
contradictory or repugnant
provisions in an enactment.
As the matter "assignment
of work and transfer ofworkers
within the establishment" has
been specifically included in
Schedule III to the Act, it cannot be
artificially brought under Item 1 of Schedule II by
reference to the presumable consequences of
such transfer or assignment of work."
We agree with the view of the High Court and for
the reasons already indicated above, we answer
question (1) in the negative.”
11. In view of the above dictum of law, the petitioner bank
would not be required to issue any notice of change as recruitment
would fall under Item No.6(i) of Schedule III for which no notice is
required under section
Page 43 of 47
42(1) of the Act.
12. The petition is therefore, allowed in the aforesaid terms.
The impugned judgment and order dated 27.06.2019 passed by the
Industrial Court, Rajkot and order dated 11.02.2019 passed by the
Labour Court, Junagadh are quashed and set aside and
Accordingly, the petitioner bank is entitled to undertake
recruitment for the posts of the clerks and peons without issuing
any notice of change. However, the petitioner bank is required to
follow the recruitment process as contemplated by NABARD as
per circular dated 17.05.2019. The respondent bank is also directed
to frame the rules of recruitment on the basis of such
recommendation and thereafter undertake the recruitment process
after framing such rules and getting approval from the competent
authority. Rule is made absolute to the
Page 44 of 47
aforesaid extent. No order as to cost.
13. Civil Application also stands disposed of accordingly.
Page 45 of 47
RAGHUNATH R NAIR
Page 46 of 47
(BHARGAV D. KARIA, J)
Page 47 of 47

Case Note Junagadh

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C/SCA/17274/2019 CAV JUDGMENT DATED: 05/04/2024

IN THE HIGH COURT OF GUJARAT

R/SPECIAL CIVIL APPLICATION NO. 17274 of 2019

HON’BLE JUSTICES MR. JUSTICE BHARGAV D. KARIA

JUNAGADH DISTRICT COOPERATIVE BANK LTD.

 The Industrial Court upheld the Labour Court's decision.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 17274 of 2019

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BHARGAV D. KARIA

1 Whether Reporters of Local Papers may be allowed

2 To be referred to the Reporter or not ?

3 Whether their Lordships wish to see the fair copy

4 Whether this case involves a substantial question

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

1.Heard learned Senior Advocate Mr. K.M. Patel with learned

Advocate Mr. Shalin Mehta with learned advocate Ms. Parul

P. Vasavada for the respondent.

2.Rule returnable forthwith. Learned advocate Ms. Parul Vasavada

waives service of notice of rule on behalf of the respondent.

petitioner has challenged the order dated 27.06.2019 passed by the

Industrial Court, Rajkot in BIR Appeal (IC) No.3 of 2019 and

order dated 11.02.2019 passed by the Labour Court, Junagadh in

BIR Application No.1/2018.

4.Brief facts of the case are that the

petitioner - Junagadh District Cooperative

Bank Ltd. is registered under the provisions

of Gujarat Cooperative Societies Act, 1961

and is engaged in banking business and

having head office at Junagadh and 44

branches at different places in Junagadh,

Porbandar and Gir Somnath Districts.

4.1) Grievance of the petitioner is concerned with regard to

the impugned orders denying the petitioner to recruit clerks and

peons in the bank under the provisions of the Gujarat Industrial

Bombay Industrial Relations Act, 1946.

4.2) It is the case of the petitioner that prior to the

impugned orders passed in the proceedings, there was previous

litigation with regard to settlement dated 16.01.2002 between

the parties. Such

settlement was for the period from 01.07.2001

to 30.06.2005 and on expiry of the period,

the respondent Union issued notice of change

in the year 2007 desiring change in wage

structure and other conditions of service of

employees and filed Reference (IT) No.1/2007

before the Industrial Court, Rajkot. The

dispute pursuant to notice of change of bank

was also registered as Reference (IT)

4.3) Both the references were proceeded on the interim

order stage, wherein Industrial Court by order dated 04.12.2013

partly allowed the injunction application of the respondent Union

by directing that the appointment to be made will be on temporary

basis and subject to outcome of the Reference.

4.4) The petitioner bank challenged the

order of injunction before this Court by

preferring Special Civil Application

No.18330/2013 and respondent Union challenged

the order by preferring Special Civil

Application No.16120/2013. As the matter was

not settled between the parties, about 228

employees filed writ petition being Special

Civil Application No.2188/2016 challenging

the order dated 31.12.2015 by which