HC stays SCARD Bank’s 60% salary reduction order

The High Court of J&K and Ladakh Monday stayed an order by the Managing Director (MD) of J&K State Cooperative Agriculture and Rural Development (SCARD) Bank Ltd that only 40 percent of salary should be paid to the employees of the Kashmir division till the condition of the bank revives.

Forty-seven employees of the bank have approached the court with the contention that they have been adversely affected by the order issued on December 22 by the MD, who, they said, “purportedly acted upon the directions of the administrator” for the order.

“The direction is specific to the Kashmir division only. The order per se does not make any sense as to on what basis or reasons the MD of respondent No 4 (J&K State Cooperative Agriculture and Rural Development Bank Ltd) has resorted to such a course of action,” a bench of Justice Rahul Bharti said.

The court issued notice to J&K through Commissioner Secretary Cooperative Department, RakeshDubey, Administrator J&K State Cooperative Agriculture and Rural Development Bank Ltd, Joint Registrar (Banking and Finance), Cooperative Societies, Registrar Cooperative Societies, J&K, Jammu and Kashmir State Cooperative Agriculture and Rural Development Bank Ltd through its Managing Director, General Manager, J&K State Cooperative Agriculture and Rural Development Bank, Regional Office, Jammu, National Bank for Agriculture and Rural Development, through its Chairman.

In the meantime, the court stayed the operation of the order dated December 22, 2023, of the MD J&K State Cooperative Agriculture and Rural Development Bank Ltd read with the communication dated December 20, 2023, of the administrator.

“There shall be no deduction concerning the salary of the petitioners or for that matter of other employees of the respondent No 4 of Kashmir division,” the court said. “This order is, however, subject to objections from the other side.”

In their petition filed through senior advocate M Y Bhat, the petitioners submitted that the order passed by the MD is “illegal”.

The petitioners contended that they are entitled to receive a salary, and the said right amounts to the right to hold property.

“The right falls within the purview of Article 300 A of the constitution and as such the J&K government cannot deprive a person of his right to hold property,” they contended.

The employees submitted that the right to receive salary had been acknowledged and protected by the courts time and again and thus, the respondents (authorities) cannot pass arbitrary orders to deprive them of the same.

“The impugned order lacks a legal backing and has been passed by the Respondents in absolute violation of the fundamental and human rights of the petitioners subjecting them to mental anguish without any fault of theirs and thus the order deserves to be quashed as would be in the interest of justice,” they said.

They contended that the “financial conditions of the bank cannot be made a ground to make substantial salary cuts, and the issuing authority in doing so has transgressed the law and principles of natural justice”.

Underscoring that the authority of the administrator is illegal and void, the petitioners said: “The provisions of the Cooperative Societies Act, 1989 provides in Section 29 that there shall be an elected Committee for a Cooperative Society, and if need be a Board of Management or Administrator may be appointed under the Sections 29 and 30 for 3 months, or 6 months in circumstances beyond control.

“However, it is quite astonishing that in the case of J&K SCARDB elections have not been held for the last 20 years and thus, the appointment of the administrator in itself is illegal and the order passed by him also has no authority.”

What the petitioners say

The impugned order lacks legal backing and has been passed by the respondents in absolute violation of the fundamental and human rights of the petitioners subjecting them to mental anguish without any fault of theirs and thus the order deserves to be quashed as would be in the interest of justice.

The authority of the administrator is illegal and void.

The financial conditions of the bank cannot be made a ground to make substantial salary cuts, and the issuing authority in doing so has transgressed the law and principles of natural justice.

The provisions of the Cooperative Societies Act, 1989, provide in Section 29 that there shall be an elected Committee for a Cooperative Society, and if need be a Board of Management or Administrator may be appointed under Sections 29 and 30 for 3 months, or 6 months in circumstances beyond control.

It is quite astonishing that in the case of J&K SCARDB elections have not been held for the last 20 years and thus, the appointment of the administrator in itself is illegal and the order passed by him also has no authority.