KERALA PRIMARY CO OP SOCIETIES ASSOCIATION Vs. REGISTRAR OF CO OP SOCIETIES
LAWS(KER)-2003-1-95
HIGH COURT OF KERALA
Decided on January 06,2003

KERALA PRIMARY CO-OP. SOCIETIES ASSOCIATION Appellant
VERSUS
REGISTRAR OF CO-OP. SOCIETIES Respondents

JUDGEMENT

- (1.) IN these cases, the validity of two circulars issued by the Registrar of Co-operative Societies prohibiting appointments to all posts and promotions from posts lower to that of Junior Clerk in primary credit societies is under challenge. Therefore, they are being heard and disposed of by a common judgment.
(2.) FOR convenience, O. P. No. 26973/02 is treated as the main case and the exhibits in that Original Petition are referred to in this judgment. Ext. P5 dated 3. 5. 2002 is the first circular issued by the Registrar. The English translation of the said circular reads as follows: "circular No. 18. 2002 Sub: Regarding prohibition of all appointments in primary credit co-operative societies and promotions from posts below that of Junior clerk. Ref: Government Note No. 1446/m (C)/2002 dated 3. 5. 2002. . . . . . . . . . . . . . . Majority of the primary credit societies in the State are running at loss. Direct recruitments to the posts of Junior Clerk and above in these societies are done by the Co-operative Service Examination Board under S. 80b of the Kerala Co-operative Societies Act, 1969. The power to make appointments to posts below that of Junior Clerk is with the managing committee of the respective societies. It is seen that using this facility, the legal provision regarding appointments through Co-operative Service Examination Board is bypassed by appointing persons with higher educational qualifications in posts below that of Junior Clerk and giving them promotions to the vacancies of junior Clerk arising as a result of promotion or change of classification. It is convinced that this tendency has to be stopped as the same is not good for the proper functioning of the societies. In the above circumstances, it is decided to stop all appointments (to all posts) and promotions from posts below that of Junior clerk in all primary credit co-operative societies other than urban co-operative banks under the control of the Reserve Bank and newly registered co-operative banks/ societies, temporarily for a period of 6 months. (Sd/-) James Varghese, I. A. S. , Registrar of Co-operative Societies" The said circular has been issued on the basis of the directions contained in a note issued by the Minister for Co-operation. The said note which has been referred to in the above circular and available in the file, on translation, reads as follows: "majority of the primary credit co-operative societies in the State are running on loss. The appointments to the posts of clerk and above in the societies are done through the Examination Board. The respective managing committees have the power to make appointments to the posts below them. It is seen that the law that all appointments should be made through the Examination Board is bypassed by appointing persons with higher qualifications to the posts below that of junior Clerk and promoting them to the vacancies of Junior Clerk arising as a result of change of classification or promotion. This tendency has to be stopped. Therefore, the Government have decided to stop all appointments (to all posts) and promotions from the posts below that of junior Clerk in all primary credit co-operative societies except in urban co-operative banks under the control of the Reserve Bank and newly registered co-operative banks/ societies, temporarily for a period of 6 months. Therefore, as per the direction of the Honourable Minister for Co-operation, it is informed that the Registrar of Co-operative Societies shall issue a circular in this regard explaining the above said matters today itself. " (Emphasis supplied) The validity of the above said circular issued on the basis of the direction of the Government expired on 2. 11. 2002. Therefore, the registrar issued another circular dated 2. 11. 2002 (Ext. P6) extending the period of ban on appointments/ promotions for a further period of 6 months. It is stated in the second circular that since the object for which the first circular was issued has not been achieved, the second circular extending the ban by 6 months is issued subject to the result of certain Original Petitions pending before this Court. The petitioners submit that the said circulars have been issued in violation of S. 80a (3) of the Kerala Co-operative Societies Act. It is also submitted that those circulars violate the provisions contained in r. 182 (2) and 185 (1) of the Kerala Co-operative Societies Rules. It is also submitted that Appendix II issued under R. 188 of the Rules provides for reducing the number of staff when the society is running at loss and increasing it when it is working on profit. There is a built-in mechanism in Appendix-III to take care of the loss of a co-oparative society. It is also pointed out that many of the societies which are running on profit are also hit by the embargo against making appointments/ promotions. So, it is submitted that the circulars have been issued mechanically, without any application of mind. They also point out that the circulars have been issued under the dictation of the Government. They also have a case that in case sufficient employees are not there to cater to the needs of the customers, the same will result in loss of business and consequential loss to the banks. The respondents would submit that Ext. P5 circular has been issued as a temporary measure to study the problems and improve the functioning of the societies. Reliance is placed on S. 66 and S. 66a of the Act which empower the Registrar to issue appropriate directions to the co-operative societies. Relying on the preamble of the Act, the respondents submitted that the circulars have been issued to achieve the objects contained in the preamble.
(3.) I heard both sides. The learned Counsel for the petitioners relied on the decision of this Court in "elampal Service co-operative Bank Ltd. v. Government of Kerala" (2000 (3) KLT 389 ). The learned Special Government Pleader appearing for the respondents relied on the decisions of the Court in "kurian v. Joint Registrar" (1990 (1) 618)and "trivandrum District Co-operative Bank Ltd. v. State of Kerala" (1992 (1) KLT 381 ). It is not in dispute that the power to make appointments to all posts in primary credit co-operative societies is vested in the managing committees of the respective societies. Even in the case of appointments governed by S. 80b, the actual appointment is to be made by the concerned committee. This will be evident from S. 80b (3) which reads as follows: "all appointments shall be made by the committee concerned from the list of candidates after conducting an interview of the candidates and making a select list therefrom in such a manner as may be prescribed. " R. 182 (2) reiterates the power of the managing committee to make appointments. The said provision reads as follows: "the committee shall be the authority competent to appoint employees in a co-operative society. " In the light of R. 185 (1), all vacancies in primary credit co-operative societies have to be filled up by promotion, if there are qualified employees in accordance with the feeder category regulations framed with the approval of the Registrar. R. 185 (1) reads as follows: "subject to the provisions of sub-r. (2), (3) and (4), appointments to the category of posts in a society other than those mentioned in sub-r. (2), (3) and (4), shall be made by promotion on the basis of seniority in the feeder category. The feeder categories, for this purpose, shall be specified by the society by framing suitable regulations with the approval of Registrar. " Sub-rr. (2), (3) and (4) are not applicable to primary credit co-operative societies. Therefore, by virtue of the above quoted Rules, the vacancies in higher categories shall be filled up from those in the feeder categories according to seniority in all primary credit co-operative societies. The employees have a legal right to the performance of this duty by the managing committees.;


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