Exhaustion of Appeal under Kerala Co-operative Societies Rules Not Mandatory Before Invoking Industrial Disputes Act Jurisdiction, Writ Petition Dismissed
In a significant judgment delivered on October 23, 2026, the Kerala High Court has clarified the legal position regarding service disputes of employees working in co-operative societies. The Court ruled that an employee dismissed by a co-operative society can directly file a claim under Section 2A(2) of the Industrial Disputes Act, 1947 before the Labour Court without first exhausting the appellate remedy provided under Rule 198(4) of the Kerala Co-operative Societies Rules, 1969.
The case arose when the 2nd respondent, a peon employed by Chokkad Service Co-operative Bank Ltd., was dismissed following disciplinary proceedings initiated by the society's President. The society contended that the dismissed employee was required to first appeal to the Executive Committee or Board of Management under Rule 198(4) before approaching the Labour Court. The Labour Court rejected the preliminary objection about maintainability, prompting the society to file a writ petition challenging this decision.
Justice Viju Abraham, presiding over the case, examined the relevant statutory framework and earlier precedents. It was held that while Rule 198(3) of the Kerala Co-operative Societies Rules empowers the President of the society to impose penalties, including dismissal, Rule 198(4) merely provides an optional appellate remedy before the Executive Committee or Board of Management. The Court distinguished this case from the earlier Division Bench ruling in Managing Director, State Bank of India v. S.Murali, where limitation for filing appeals was at issue, clarifying that the present facts relate to maintainability and not limitation.
The Court further relied on authoritative precedents, including the Supreme Court decision in Annamma K.A. v. Secretary, Cochin Co-operative Hospital Society Ltd. and subsequent Kerala High Court rulings, which affirm that both the Kerala Co-operative Societies Act and the Industrial Disputes Act have concurrent jurisdiction over service disputes. Importantly, it is the employee's prerogative to choose the forum for dispute resolution, provided the dispute meets the criteria under the Industrial Disputes Act, such as being a 'workman' and involving an 'industrial dispute.'
Additionally, the Court underscored the principle that interlocutory orders on maintainability by the Labour Court ordinarily should not be interfered with by the High Court, as parties have an adequate remedy to challenge the final award. Interference at this preliminary stage could delay the expeditious resolution of industrial disputes.
Consequently, the writ petition filed by the co-operative society was dismissed, upholding the Labour Court's order that the dismissal of the employee is maintainable before it under the Industrial Disputes Act without the need to exhaust the appeal under the Kerala Co-operative Societies Rules.
This judgment provides clarity and reassurance to employees of co-operative societies regarding their right to seek adjudication of service disputes directly before the Labour Court, facilitating swifter access to justice.
Bottom Line:
Co-operative society employee can directly invoke Section 2A(2) of the Industrial Disputes Act before the Labour Court against dismissal without exhausting appellate remedy under Rule 198(4) of the Kerala Co-operative Societies Rules; writ court should ordinarily not interfere at interlocutory stage on preliminary issue of maintainability.
Statutory provision(s): Industrial Disputes Act, 1947 Section 2A(2), Kerala Co-operative Societies Act, 1969 Section 28, Kerala Co-operative Societies Rules, 1969 Rule 198(3), Rule 198(4)
