Whether an employee of a Co-operative Society governed by the Tamil Nadu Co-operative Societies Act can invoke the appellate remedy under Section 41 of the Tamil Nadu Shops and Establishments Act?

It is appropriate to commence this order by referring to the Preamble of the Tamil Nadu Shops and Establishments Act, 1947, which reads thus: “An Act to provide for the regulation of conditions of work in shops, commercial establishments, restaurants, theatres and other establishments, and for certain other purposes.”

The Preamble indicates the legislative intent behind the enactment. The Act is a welfare legislation intended to regulate the conditions of work of employees in shops and commercial establishments where such conditions are not otherwise governed by a special statutory regime. The object of the enactment is not to create a parallel disciplinary code overriding every other special statute, but to regulate employment in establishments falling within its ambit.

The brief facts leading to the filing of the writ petition are as follows: 3.1. The petitioner Society is a Southern Railway Employees' Consumer Co-operative Stores Limited governed by the provisions of the Tamil Nadu Co-operative Societies Act, the Rules framed thereunder and its Special Bye-laws, which regulate the service conditions of its employees. 3.2. The second respondent, while serving as a Packer/Office Assistant of the petitioner Society, alleged to have scolded the female co-employee with filthy language and when the other female co-employees argued to him and to compel him to apologize her. But the second respondent never felt sorry for his untoward activity on his colleagues. Therefore, the female employees complained him before the then President of the petitioner stores in writing and requested to take appropriate action against him. Pursuant thereto, a detailed domestic enquiry was conducted. Upon conclusion of the enquiry, the Enquiry Officer found the charges levelled against the second respondent have been proved and submitted the enquiry report recommending initiation of appropriate disciplinary action. The second respondent failed to give proper explanation and the Enquiry Officer by proceedings, dated 30.08.2022, imposed the punishment of dismissal from service. 3.3. Aggrieved by the order of dismissal, the second respondent preferred an appeal before the first respondent under the Tamil Nadu Shops and Establishments Act. The first respondent allowed the appeal by setting aside the dismissal order issued by the petitioner Management. 3.4. Assailing the said order as being contrary to the provisions of the Tamil Nadu Cooperative Societies Act and the Special Bylaws governing the Society, the present writ petition has been filed

According to the learned counsel for the petitioner, once the service conditions of the employees are governed by the provisions of the Co- operative Societies Act, the Rules and the Special Bye-laws, an appeal under Section 41 of the Shops and Establishments Act is not maintainable. The petitioner further contended that the Society is exempted under Section 4(1)

In the aforesaid judgment, this Court has categorically held that, in view of the exemption under Section 4(1)(f), the provisions of the Tamil Nadu Shops and Establishments Act would not apply to Co-operative Societies whose service conditions are regulated under the Tamil Nadu Co- operative Societies Act and the Special Bye-laws framed thereunder. Accordingly, the petitioner prayed for allowing the writ petition.

Per contra, learned counsel appearing for the second respondent submitted that, notwithstanding the existence of service regulations under the Co-operative Societies Act, the Appellate Authority under the Shops and Establishments Act has jurisdiction to entertain the appeal. Reliance was placed upon the judgment of the Hon’ble Supreme Court in K.A.Annamma v. Secretary, Cochin Cooperative Hospital Society Limited reported in (2018) 2 SCC 729, to contend that the Appellate Authority was competent to entertain the appeal.

In reply, learned counsel for the petitioner submitted that the decision in K.A.Annamma's case is distinguishable and applies only in the context of industrial disputes. The very same judgment was considered by the Division Bench of this Court, which, after an elaborate discussion, held that the Appellate Authority under the Tamil Nadu Shops and Establishments Act has no jurisdiction in matters concerning employees of Co-operative Societies whose service conditions are governed by the Tamil Nadu Co- operative Societies Act, the Rules and the Special Bye-laws.

This Court has carefully considered the rival submissions and perused the materials available on record.

The short question that arises for consideration is whether an employee of a Co-operative Society, whose service conditions are admittedly governed by the Tamil Nadu Co-operative Societies Act, the Rules framed thereunder and the approved Special Bye-laws, can invoke the appellate remedy under Section 41 of the Tamil Nadu Shops and Establishments Act.

This Court is of the considered view that the impugned order cannot be sustained. The Preamble to the Tamil Nadu Shops and Establishments Act makes it clear that the enactment is a general welfare legislation intended to regulate the conditions of work in shops and commercial establishments. Simultaneously, the Legislature, by incorporating Section 4, has consciously excluded certain establishments from the purview of the Act. In particular, Section 4(1)(f) exempts establishments whose service conditions are governed by a separate law in force. The Division Bench of this Court in W.A. No.707 of 2026 has categorically held that the Tamil Nadu Co-operative Societies Act, the Rules framed thereunder and the approved Special Bye-laws constitute a complete code governing the service conditions of employees of Co-operative Societies and therefore, the provisions of the Tamil Nadu Shops and Establishments Act, including the appellate remedy under Section 41, are inapplicable. Admittedly, the petitioner Society is governed by the said statutory framework. Hence, the Appellate Authority lacked jurisdiction to entertain the appeals. The reliance placed on K.A.Annamma is misconceived, as the said decision arose in a different statutory context and does not dilute the exemption contained in Section 4(1)(f). Accordingly, the impugned orders are liable to be set aside.

In view of the above, the impugned order dated 27.11.2023 passed by the first respondent is hereby set aside and the writ petition is allowed. However, liberty is granted to the second respondent to work out the remedy before the appropriate authority under Section 153 of the Tamil Nadu Co-operative Societies Act. The period during which the proceedings remained pending before this Court shall stand excluded for the purpose of computing limitation. No costs. Consequently, connected Miscellaneous Petition is closed.