Kerala State Engineering & Infrastructure Services Co-Operative Ltd. v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN** **WEDNESDAY, THE 3RD MARCH 2010 / 12TH PHALGUNA 1931** **WP(C).No. 6941 of 2009(K)** **-------------------------------------** ## **PETITIONER:** - **-------------------** **THE KERALA STATE ENGINEERING & INFRASTRUCTURE SERVICES CO-OPERATIVE LTD., NO.4448 (KEISCO), REPRESENTED BY ITS MANAGING DIRECTOR, IVTH FLOOR, KERALA STATE CO-OPERATIVE BANK BUILDING, OVERBRIDGE JUNCTION, THIRUVANANTHAPURAM-695 001.** ## **BY ADV. SRI.B.S.SWATHY KUMAR.** **RESPONDENTS:** **------------------------** **1. STATE OF KERALA, REP.BY ITS PRINCIPAL SECRETARY, DEPARTMENT OF CO-OPERATION, STATE SECRETARIAT, THIRUVANANTHAPURAM.** ## **2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES** **(GENERAL), THIRUVANANTHAPURAM.** **3. P.RAJASEKHARAN NAIR, TC 15/103 ALTHARA NAGAR (D10), VELLAYAMBALAM, SANKARAMANGALAM P.O., THIRUVANANTHAPURAM.** **4. THE KERALA STATE CO-OPERATIVE EMPLOYEES' PENSION BOARD, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY.** **R1 & R2 BY SR. GOVT. PLEADER SRI. K.C. SANTHOSH KUMAR, R3 BY ADV. SRI.S.CHANDRASENAN, R4 BY SRI.P.V.MOHANAN,SC,CO-OP. EMPLOYEES PENSION BOARD.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/03/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C). NO.6941/2009-K:** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXT.P.1: COPY OF THE ORDER NO. MT (2) 49621/05/K. DIS. DTD. 25/02/06 ISSUED BY R.2. EXT.P.2: COPY OF THE ORDER NO. 7592/C2/07/CO-OP. DTD. 24/10/2007 ISSUED BY THE R.1.** **EXT.P.3: COPY OF THE ORDER NO. MT (2)9813/2006 DTD. 12/11/07 ISSUED BY THE R.2.** **EXT.P.4: COPY OF THE ORDER NO. V.R/94/08 DTD. 18/03/08 OF THE ASST. REGISTRAR.** **EXT.P.5: COPY OF THE NOTICE NO. PB/EM/ADMN/4353/TPM DTD. 28/11/08 ISSUED BY R.4.** **EXT.P.6: COPY OF THE PROFORMA ANNEXED TO EXT.P.5.** ## **RESPONDENTS' EXHIBITS:** **EXT.R3.A: COPY OF THE ORDER NO. ED/E1/81 DTD. 08/02/1990.** **EXT.R3.B: COPY OF THE LETTER OF THE PETITIONER TO THE R.4. DT. 17/12/2005.** **EXT.R3.C: COPY OF THE LETTER DT. 16/01/2008 ADDRESSED TO THE PETITIONER BY THE R.4.** **EXT.R3.D: COPY OF THE LETTER DT. 11/11/2008 OF THE PETITIONER SOCIETY TO THE R.4.** **EXT.R3.E: COPY OF THE LETTER DT. 16/11/2006 ADDRESSED TO JT. REGISTRAR (GENERAL).** **EXT.R3.F: COPY OF THE ORDER NO. MT (2) 9813/2006 DT. 10/07/2007.** ## **//TRUE COPY//** **P.A. TO JUDGE.** **Prv.** ## **K.SURENDRA MOHAN, J. ------------------------------------------W.P.(C) No.6941 of 2009 ------------------------------------------Dated this the 3[rd] day of March, 2010** ## **JUDGMENT** The petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as the 'Act' for short). This Writ Petition is filed challenging the action of the Government in regularising the services of the third respondent with effect from 15.3.1995 and granting him all benefits of pay revision, pension etc. 2. According to the petitioner, to begin with the petitioner was functioning as an Engineering Consultancy Cell of the Kerala State Co-operative Bank. Later on, it was registered under the Act as the Kerala State Engineering Consultancy and Construction Co-operative Society Ltd. No.4399. Subsequently, the above Society was amalgamated with the Kerala State Infrastructure Leasing and wpc No.6941/2009 2 Financial Services Co-operative Society Ltd.No.4394. These two societies were amalgamated and the present petitioner - Society came into existence on 17.10.2004. On such amalgamation, the third respondent and 7 others who were employees of the Kerala State Engineering Consultancy and Construction Co-operative Society Ltd. became employees of the petitioner - Society. Though the petitioner contends that the services of these employees were not regularised by the first respondent in spite of innumerable representations, according to the third respondent, they were regularised in service by the Chief Engineer as per order dated 8.2.1990. On regularisation, they were directed to be paid a consolidated monthly remuneration without any increase in the emoluments, as per Ext.R3(A). It is the case of the third respondent that he continued in service on the basis of such regularisation, without any break in service. Subsequently, on completion of more than 21 wpc No.6941/2009 3 years of service from 2.8.1984, he retired on attaining superannuation on 31.12.2005. 3. The case of the petitioner is that the eight employees who were absorbed by the petitioner on amalgamation as stated above were not regularised for the reason that they were originally engaged on daily wages. However, they were allowed to continue on a consolidated monthly remuneration. While so, the first respondent issued Ext.P2 order dated 24.10.2007 directing the second respondent to fix the scale of pay of the third respondent on “imaginary” basis from 15.3.1995. On the above basis, it is also directed to fix the contribution to the Pension Board and to pay the same. According to the petitioner, Ext.P2 is without any justification for the reason that the petitioner has been paid a consolidated amount towards pensionary benefits due to an unregularised employee and he had retired from service. The petitioner also came to know that the second respondent had as per an order dated 10.7.2007 wpc No.6941/2009 4 regularised the services of the third respondent with effect from 15.3.1995, which is the date of registration of the Kerala State Engineering Consultancy and Construction Co-operative Society Ltd. Thereafter, by Ext.P4 proceedings, the petitioner has been directed to deposit the contribution payable in respect of the 4[th] respondent within a period of 15 days. The 4[th] respondent has thereafter issued a notice, directing the petitioner to deposit an amount of Rs.1,81,714/- as the contribution of the petitioner to the Pension Fund in respect of the third respondent. The pro-forma annexed to Ext.P5 shows the calculation of the amount is Ext.P4. The petitioner has filed this Writ Petition challenging Exts.P2, P3, P4, P5 and P6 as being unsustainable and liable to be set aside. 4. The contentions of the petitioner are resisted by the other respondents. The third respondent has filed a counter affidavit producing Exts.R3(A) to R3(F) documents to contend that the case of the petitioner wpc No.6941/2009 5 is unsustainable in law and fact. According to the third respondent, the petitioner has fixed the salary of the third respondent at Rs.4160/-, as can be seen from Ext.R3(D). Having so fixed the salary of the third respondent, it is contended that it is not open to the petitioner to challenge the proceedings of the Government fixing the salary. The third respondent also relies on Ext.R3(B) dated 17.12.2005 which is addressed by the petitioner to the Secretary of the Pension Board, Thiruvananthapuram. As per Ext.R3 (B), it is stated that it was due to the fault of the petitioner Society that the contributions of the employees as well as the management could not be remitted on time. Therefore, it is requested that the employees of the petitioner also be included in the pension scheme. Ext.R3(B) makes a further request to consider the case of the third respondent separately in an expeditious manner for the reason that he was about to retire. It is further pointed out that as per Exts.R3(E) and R3(F), the services of the third wpc No.6941/2009 6 respondent was regularised. It is therefore pointed out that the contentions of the petitioner are absolutely baseless. 5. The 4[th] respondent has filed a separate counter affidavit justifying the proceedings, Ext.P6 and P6(A). According to the 4[th] respondent, the calculations in Ext.P6 are correct and fully in confirmity with the relevant provisions of law. The demand notice Ext.P5 has been issued for the reason that the petitioner has not remitted the amount demanded, which is due as per law. According to the 4[th] respondent, the fixation has been made only with effect from 15.3.1995, the date of registration of the earlier Society. After the said date, the pay of the third respondent has been fixed on the basis of the revisions in pay made by the Government. The calculations in Ext.P6 are therefore submitted to be justified and in accordance with law. 6. I have heard Sri.B.S.Swathi Kumar who appears for the petitioner, Sri.S.Chandrasenan who wpc No.6941/2009 7 appears for the third respondent, Mr.P.V.Mohanan who appears for the 4[th] respondent as well as the learned Government Pleader. I have also anxiously considered the contentions of the rival parties. 7. It is not disputed that the third respondent had been continuously in service from 2.8.1984. He was initially appointed on daily wages in the Engineering Consultancy Cell. Subsequently, on 15.3.1995, a Society by name, Kerala State Engineering Consultancy and Construction Co-operative Society Ltd.No.4399 was formed and the petitioner and seven others who were employees of the Engineering Consultancy Cell were absorbed into the service of the said Society. It is also not disputed that while continuing to work as an employee of the said Society, the Society was amalgamated with another Society No.4394. Thus, the petitioner and seven others became the employees of the petitioner Society. Though the petitioner and others were initially recruited as employees on daily wages, subsequently, wpc No.6941/2009 8 they were re-designated as employees on monthly remuneration as per Ext.R3(A). However, the case of the petitioner is that their pay scale was not fixed. Reliance is also placed on Ext.P1 letter of the second respondent declining to fix the pay scale of the third respondent for the reason that it was not clear whether he satisfied the required qualifications for appointment to the post that he was occupying. 8. On the basis of Ext.P1, it is contended by the petitioner that the third respondent was not qualified for appointment to the post of Head Clerk. However, a reading of Ext.P1 shows that the same has been issued only for the reason that there were no sufficient materials available before the said authority regarding the qualifications of the third respondent. The rejection of the request as per Ext.P1 is only for the reason that the authority was not in a position to find out whether the third respondent was qualified or not. Therefore, Ext.P1 does not preclude a reconsideration of the claims of the third respondent, wpc No.6941/2009 9 supported by proper documents. According to the third respondent, he is a B.Sc Degree holder with a Post Graduate Diploma in Personnel Management, Public Relations and Journalism. He also holds an LL.B. Degree. It is not seriously disputed that the third respondent had entered service on 2.8.1984 in the Engineering Consultancy Cell as a daily wages employee and that he had continued in service till his retirement on attaining superannuation. The third respondent has produced Ext.R3(A) dated 8.2.1990 by which, all the employees of the Engineering Consultancy Cell were re-designated as employees on monthly remuneration without any increase in emoluments. Ext.R3(B) submitted by the petitioner to the 4[th] respondent also describes the third respondent and seven others who were in the service of the petitioner as employees on monthly remuneration. Therefore, it is not open to the petitioner to turn around and contend that the third respondent was only an employee on daily wages. The third wpc No.6941/2009 10 respondent also relies on Rule 26(C) of the bye laws of the Kerala State Engineering Consultancy and Construction Co-operative Society No.4399 to contend that all the employees of the Engineering Consultancy Cell were absorbed as employees of the said Society. Therefore, with the formation of the said Society, the third respondent and others were absorbed into the service of the Kerala State Engineering Consultancy and Construction Co-operative Society, from the date of its formation, 15.3.1995. 9. It is further seen from Ext.R3(B) that the petitioner/Society had taken a decision on 15.10.2005 (Decision No.4) to remit the employer's contribution to the pension fund, computing the service of the third respondent and other employees from 15.3.1995 onwards. In the above circumstances, Ext.R3(B) letter was issued by the petitioner to the 4[th] respondent. It can be further seen from Ext.R3(B) that the petitioner has requested the 4[th] respondent to take urgent action in the matter for the reason that wpc No.6941/2009 11 the third respondent was retiring on 31.12.2005. Having requested the 4[th] respondent to take up the case of the third respondent urgently, in view of his impending retirement, it is not open to the petitioner to question the act of the authorities in considering his case separately. However, the proceedings for sanctioning the pension of the third respondent was not finalised before his retirement and therefore, the third respondent has retired from service. 10. The third respondent continued to represent to the authorities requesting for the sanction of his pension. Ext.R3(E) shows that an enquiry was conducted by the Joint Registrar (General) and that after ascertaining the facts and circumstances of the case he had recommended the regularisation of the services of the third respondent. Pursuant to Ext.R3 (E), the second respondent Registrar of Co-operative Societies regularised the services of the third respondent and has issued Ext.R3(F) proceedings fixing his scale of pay. Therefore, the contention of wpc No.6941/2009 12 the petitioner that the scale of pay of the third respondent was not fixed and that he had not been regularised, is not sustainable. It is also worth noticing that Ext.R3(F) has not been challenged by the petitioner, till date. 11. The further contention of the petitioner is that the third respondent is not qualified for appointment to the post of Head Clerk and therefore, his services were not liable to be regularised. The counsel for the petitioner relies on Rule 186(1) of the Kerala Co-operative Societies Rules (hereinafter referred to as the 'Rules' for short) to contend that the petitioner is not qualified to be appointed to the post of Head Clerk. The counsel for the third respondent on the other hand places reliance on Rule 181 of the Rules to point out that the Government has the power to grant exemption from the Rules, which power has been exercised in favour of the third respondent. It is pointed out that as per the decision reported in **Praveen Chandran** v **State of Kerala** (2008(1) KLT wpc No.6941/2009 13 478), the Government has the power to exempt. Particular reliance is placed on paragraph-5 of the said decision where Thottathil B.Radhakrishnan J. has held as follows: “In terms of R.181, the Government has the power to grant exemption to any registered society or class of societies from any of the provisions of the Rules. That power is to grant exemption for the institution as such, i.e., the Society or to a class of Societies. That rule is not one, whereby the Government can meddle with individual cases of employees. Therefore, the Government cannot pick and choose between different employees of a Co-operative Society while making an order of exemption under R.181. If the Government concludes, as has been done as per Ext.P4 order, that the Society is entitled to exemption under R.181, there is no reason why the benefit of that exemption shall not be available to all the employees of that Society. When the Government has exercised power under R.181 and exempted the Society from the provisions of R.185(8)(b)(u), such relaxation applies to the institution, i.e. the Society and not to any individual employee. Therefore, Exts.P4 and P5 series decisions, whereby the Government made those orders as if the exemption granted thereby is for the purpose of the employees named in those orders, can be treated only as an order of exemption to the institution, the society, and not an order of exemption confined to be in favour of the employees mentioned therein. Hence, the benefit of the decisions contained in Exts.P4 and P5 series granting exemption, would inure to the benefit of all the employees of wpc No.6941/2009 14 that establishment, including the petitioners.” 12. It is true that in the present case also, the exemption appears to have been granted only to the third respondent, though there are eight employees in the petitioner-society. While conceding the power to the Government to grant exemption, the above decision has only added a rider, that the exemption shall enure to the benefit of all the employees of the Society. Since nobody has a case that the exemption given is one that is applicable to the third respondent alone, it has to be held that the exemption granted would be available to the other employees of the petitioner Society also. In any view of the matter, the observations quoted above cannot help the petitioner in contending that the Government had no power to grant exemption to the third respondent from the prescribed qualifications. As already noted above, the petitioner has not challenged Ext.R3(F), till date. I also notice that it was the specific request of the wpc No.6941/2009 15 petitioner Society that the case of the third respondent should be considered separately and expeditiously for the reason that he was retiring on 31.12.2005. Having made such a request, it is not open to the petitioner to question the exemption granted to the petitioner on the ground that only the third respondent's services have been regularised while the requisition for regularisation of the services of the other employees are still pending. Though it is contended that Exts.P2 and P3 proceedings are vitiated by extraneous consideration, there is absolutely no evidence or material to warrant such a conclusion. Ext.R3(E) report of the Joint Registrar has also recommended the regularisation of the services of the third respondent. The Joint Registrar (General) in his report has noticed the fact that the third respondent was working all along in an establishment that was not part of a Co-operative Society and that it was only when their establishment was amalgamated with the petitioner society that the wpc No.6941/2009 16 rules became applicable to them. In such circumstances, considering their long service and the anomaly resulting from the rules which became applicable to them on amalgamation with the petitioner Society, it was recommended to regularise their services as a measure for removal of the hardship caused. The action cannot be found fault with on any ground. 13. It has been substantiated by Sri.P.V.Mohanan who appears for the 4[th] respondent Pension Board that the amounts demanded are justified by the provisions of the pension scheme. The calculation statement Ext.P6 also supports the above contention. 14. The third respondent has retired from service on 31.12.2005. But, he has not been paid his pension till date. He has also been dragged to this Court to fight his litigation by the petitioner's action in challenging his regularisation. The conduct of the petitioner in challenging the action of the wpc No.6941/2009 17 Government after having recommended regularisation of the third respondent before the regularisation of the other employees, is without any justification. Therefore, the third respondent is entitled to the costs of this litigation. For the foregoing reasons, there are no grounds to interfere with the impugned proceedings. The Writ Petition is accordingly dismissed with costs to the third respondent. ## K.SURENDRA MOHAN, Judge css/