C. Pavithran and Others v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL FRIDAY, THE 2[ND] DAY OF JULY 2021 / 11TH ASHADHA, 1943** ## **WP(C) NO. 20237 OF 2014** ## **PETITIONERS:** 1 C.PAVITHRAN, SECRETARY, THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L.18, P.O. THOLAMBRA, PERAVOOR (VIA), KANNUR DIST-670673 2 N.K.BHASKARAN, ACCOUNTANT, THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L. 18, THOLAMBRA, PERAVOOR VIA, KANNUR DIST, PIN-670673 3 K.DAMOADARAN, SENIOR CLERK, CLERK,THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L. 18, THOLAMBRA, PERAVOOR VIA, KANNUR DIST, PIN-670673 4 P.V. SHAJAN, JUNIOR CLERK, THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L. 18, THOLAMBRA, PERAVOOR VIA, KANNUR DIST, PIN-670673 5 LUCY GEORGE, PEON, THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L. 18, THOLAMBRA, PERAVOOR VIA, KANNUR DIST, PIN-670673 6 O.GEETHA, PARTTIME SWEEPER,THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L. 18, THOLAMBRA, PERAVOOR VIA, KANNUR DIST, PIN-670673 BY ADVS. SRI.M.SASINDRAN SRI.P.K.SUBHASH ## **RESPONDENTS:** 1 STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, WP(C) NO. 20237 OF 2014 -2- **==> picture [78 x 45] intentionally omitted <==** DEPARTMENT OF CO-OPERATION, SECRETARIAT,THIRUVANANTHAPURAM-695001 - 2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), THIRUVANANTHAPURAM-695001 - 3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KANNUR-670001 - 4 THOLAMBRA SERVICE CO-OPERATIVE BANK LTD NO L.L.18, P O THOLAMBRA, PERAVOOR VIA, KANNUR DIST – 670673. REPRESENTED BY ITS SECRETARY **==> picture [80 x 32] intentionally omitted <==** GP SRI B HARISH KUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.07.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 20237 OF 2014 -3- ## **JUDGMENT** Petitioners have approached this Court by laying challenge to order Exts.P4 and P5 dated 28.09.2013 and 24.05.2014, whereby on classification of the Society the salary scale of the employees were re-structured resulting into reduction in pay and allowances. During the course of hearing it has been brought to the notice of this Court that the controversy similar to in this case, had already been decided by this Court in the reported judgment cited as 2018(2) KHC 988 **Kerala Co-operative Employees Front and Another V. Government of Kerala and others** . This fact has not been disputed by the counsel representing the respondents. 2. I have heard counsel for the parties and appraised the paper books. 3. Paragraph Nos.15 & 17 of the aforesaid WP(C) NO. 20237 OF 2014 -4- ## judgment reads as under: “The Co-operative Societies Act is an enactment to secure social and economic justice as proclaimed in the Constitution of India. The aim and object of a welfare State cannot be overlooked while interpreting the statutory provisions. The very ideal of a welfare State is to embrace the elements of economic justice based on the socialist concept in which the concern of the State is public welfare and not profit maximisation. The pay and allowances to an employee therefore cannot be made dependent on profit of a co-operative society. When the State wants to regulate the affairs of a co - operative society, the laws made by the State will have to be in harmony with the larger frame of the system of law referable to the source of power. Thus, the general conditions of law and the established principles on which such law is based is the legal rule while applying interpretation of the enactment. The capacity of the employer would be relevant if the State does not want to interfere with the freedom of the citizens in the economic pursuit The State is having a free choice under the Constitution either to regulate / restrict the economic pursuits of citizens or to give a freedom to citizens. However, while pursuing the socio economic justice in contemplation of the aims and objectives of a welfare State, the scheme of such regulation must have due WP(C) NO. 20237 OF 2014 -5- regard to the directive principles of the State policy in the light of the ideals of socialism proclaimed in the preamble. Thus, the action emanating out of the regulation should not be repulsive to the aims and objectives of an enactment based on socio economic justice and such action need to be corrected by the Court, otherwise it would frustrate the very purpose of the larger system of law in which such an enactment is made. It is open for the Government to fix the pay and allowances. But it cannot reduce such pay and allowances merely referring to the financial position of the society. Such an action is repugnant to the goal of a welfare State based on socialist ideals. Socialist principles being part of basic structure of the Constitution must guide the State while evolving its economic policy and social welfare. Socialism seeks economic democracy to raise standard of living focusing on public interest and welfare in precedence to private profit. The socio-economic justice is achieved through such policy of the State by making necessary legislations in this regard. The Government could have linked the profit with the career of an employee by way of giving incentives. Anyway it is for the State Government to consider in what manner the pay and allowances have to be fixed. Given the background of social and economic dimensions of co-operative laws, the Legislature need to declare its policy. The Constitution entrusted this task to the State Legislature under entry 32 of List II-State List of WP(C) NO. 20237 OF 2014 -6- the Seventh Schedule of the Constitution. It is true that the State has power and freedom to determine its economic policy. The source of this plenary power to make laws is traceable to Constitution. It is for the Legislature to decide by its policy whether to reduce pay and allowances by renouncing the idea of social welfare and economic justice based on socialist elements. Our Constitution has given such freedom to the Legislature. The executive power of the State under Art.162 of the Constitution is co-extensive with the legislative power of the Legislature. Since the State Legislature has already made law with regard to the subject, the power of the State Government therefore is only as a delegatee. In the absence of law, the State Government cannot dilute the aims and objectives of co-operative laws by reducing pay and allowances of an employee consequent upon degradation of the society. It is even doubtful whether the State Legislature can delegate such power to the executive, as it involves essential legislative power in regard to the economic policy covered by the subject entrusted to the State Legislature under the Constitution (See Messrs. Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh and others, 1954 KHC 447: AIR 1954 SC 224: 1954 SCR 803 1954 ALJ 203, Rajnarain Sinah v. Chairman, Patna Administration Committee, Patna and another, 1954 KHC 522 AIR 1954 SC 569: 1955 (1) SCR 290, The Municipal Corporation of Delhi v. Birla Cotton, WP(C) NO. 20237 OF 2014 -7- Spinning and Weaving Mills, Delhi and another, 1968 KHC 456 AIR 1968 SC 1232 1968 (3) SCR 251, Gwalior Rayon Mills Mfg. (Wvg.) Co. Ltd. v. Asstt. Commissioner of Sales Tax and others, 1974 KHC 637: AIR 1974 SC 1660: 1974 (4) SCC 98: 1974 (2) SCR 879: 1974 Tax LR 2017: 1974 (94) ITR 204 and N. K Papiah & Sons v. The Excise Commissioner and another, 1975 KHC 548 AIR 1975 SC 1007 1975 (1) SCC 492: 1975 Tax LR 1523 1975 (35) STC 537) Since in these cases this Court having already adverted that no such power was given to the Government before the amendment to S.80(6) of the Co operative Societies Act in the year 2013, this question has to be decided in a broader angle in an appropriate challenge on a future date. 17. Note 6 to Appendix III as challenged in these writ petitions to the extent ordering reduction of the salary is without power. The power to fix the pay and allowances cannot include the power to reduce salary unless such power is expressly given to the Government. The accrued rights of an employee can be only divested through the legislative power and the Government can use such power only if it is so authorised” 4. In view of the judgment aforesaid, order Exts.P4 &P5 are set aside. Writ petition is allowed in the same terms as in the judgment cited supra. Recovery if any, WP(C) NO. 20237 OF 2014 -8- effected from the petitioners despite the order of stay, certainly the same shall be restored to the petitioners without any delay. ## **Sd/-** **AMIT RAWAL JUDGE** vv WP(C) NO. 20237 OF 2014 -9- ## **APPENDIX OF WP(C) 20237/2014** ## **PETITIONER ANNEXURE** EXHIBIT P1 A TRUE COPY OF THE SRO NO 9/2010 DTD 4/1/2010 EXHIBIT P2 A TRUE COPY OF THE CIRCULAR DTD 2/4/2013 OF THE 2ND RESPONDENT EXHIBIT P3 A TRUE COPY OF THE PROFORMA SUBMITTED BY THE 4TH RESPONDENT SOCIETY IN PURSUANCE TO EXT P2 CIRCULAR EXHIBIT P4 A TRUE COPY OF THE ORDER DTD 28/9/0213 ISSUED BY THE 3RD RESPONDENT EXHIBIT P5 TRUE COPY OF THE COMMUNICATION DTD 24/5/2014 ISSUED IN PURSUANCE TO EXT P4 ORDER EXHIBIT P6 A TRUE COPY OF THE ORDER DTD 5/2/2013 MORATORIUM FOR RECOVERY OF AGRICULTURAL LOANS EXHIBIT P7 A TRUE COPY OF THE INTERIM ORDER DTD 26/5/2014 IN WPC NO 13203/2014