Bonus rules not same for all farm co-op banks

The Supreme Court ruled last week that primary agricultural co-operative banks, separate undertakings with their own balance sheets, were not bound to pay bonus at the rate paid by the apex bank.

The primary banks might be earning profits at some time or making losses at the other. They should not be linked to the performance of the apex co-operative bank for the payment of bonus to the employees, the Supreme Court said in the Haryana State Co-operative Land Development Bank Ltd vs Co-operative Banks Employees Union case.

Earlier, the Punjab and Haryana High Court had allowed the petition of the employees' union and directed payment of bonus to the employees of the individual banks according to the rate applicable to the apex bank. The bank appealed to the Supreme Court successfully.

The bank argued that mer-ely because the staff of the individual co-operative banks were drawn from the apex state bank, it did not mean that they continued to be employees of the apex bank.

On the contrary, they were employees of the primary banks with different service conditions.

It was also argued that if the allocable surplus was to be taken as a whole, including the financial results of both the apex bank and the primary banks for payment at par with that of the staff of the apex bank, there had to be aggregation of the profits of the primary banks, which were running at a loss with that of the apex bank.

Unless that was done, there was no rationale for the direction given by the high court to pay at par with the employees of the apex bank, it was argued.

Setting aside the high court order, the apes court said the primary banks kept separate books of accounts and balance sheets and they were distinct entities with their own registration, incorporation and other legal requirements. Therefore, they could not be clubbed with the apex bank, the court said.