Kerala State Handlooms Weaves Co-operative Society Ltd., Hantex, Thiruvananthapuram v. State of Kerala represented by the Secretary to Government, Industries Department, Government Secretariat, Thiruvananthapuram; Mohammed Basheer, Manager, Hantx International Garments, Padinarethara, Wayand

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN** **TUESDAY, THE 1ST APRIL 2008 / 12TH CHAITHRA 1930** **WP(C).No. 15452 of 2006(M)** **---------------------------------------** **PETITIONER:** ## **-------------------** **KERALA STATE HANDLOOM WEAVES CO-OPERATIVE SOCIETY LTD., HANTEX, THIRUVANANTHAPURAM, REP. BY THE PRESIDENT.** **BY ADV. SRI.M.K.CHANDRA MOHANDAS** **RESPONDENTS:** **-----------------------** **1. STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.** **2. MOHAMMED BASHEER, MANAGER, HANTX INTERNATIONAL GARMENTS, PADINARETHARA, WAYANAD.** **BY GOVERNMENT PLEADER SRI. P.K.RAVIKRISHNAN R2 BY ADV. SRI.K.RAMKUMAR (SR)** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/03/2008, THE COURT ON 01.04.2008 DELIVERED THE FOLLOWING:** ## **W.P.(C) NO. 15452/2006** ## **APPENDIX** **PETITIONERS EXHIBITS** **EXT.P1:- COPY OF THE PROCEEDINGS OF THE MANAGING DIRECTOR DT. 6.4.95. EXT.P2:- COPY OF THE GOVERNMENT ORDER NO.A2/GU/WND/AO2/95 DT. 6.10.97. EXT.P3:- COPY OF THE PROCEEDINGS NO.A3-GU-W/H-1766/97 DT. 12.1.98** **EXT.P4:- COPY OF THE PROCEEDINGS DT. 13.10.05 OF THE MINISTER FOR INDUSTRIES AND SOCIAL WELFARE.** **EXT.P5:- COPY OF THE GOVERNMENT ORDER G.O.(RT) 31/05/ID DT. 9.1.06.** _**/**_ **TRUE COPY/** **P.S. TO JUDGE** **tss** ## **Thottathil B. Radhakrishnan, J.** ================================== W.P.(C)No.15452 of 2006 ================================== Dated this the 1[st] day of April, 2008. ## **JUDGMENT** Petitioner is a co-operative society in which the Government of Kerala has subscribed directly to the share capital in terms of Section 42 of the Kerala Co-operative Societies Act, 1969, hereinafter referred to as the “Act”. The second respondent was appointed as manager in the Wayanad garment unit of the petitioner temporarily for three months as per the proceedings of the Managing Director of the petitioner on 6-4-1995 for Rs.1,500/- per month, going by the impugned Ext.P5. His service was thereafter extended upto 1997, raising the consolidated pay to Rs.3,000/-. On 29- 12-1997, the committee of the society resolved to terminate his services. He filed O.P.No.1271 of 1998. This Court stayed his termination. He was thereafter appointed as P.A. to Sri.Mammutty, MLA. WPC15452/2006 ## -:2:- 2. While so, the second respondent made a representation on 10-8-2005. This led to a conference being convened on 13-10-2005 in the Chamber of the Minister for Industries and Social Welfare. That meeting, chaired by the Minister, was attended by the President of the petitioner as also Government officials, including the Director of Handloom and Textiles and the Managing Director of the petitioner. Going by Ext.P4 minutes, all participants of that meeting were convinced that the second respondent was originally posted on a temporary basis. The President of the petitioner also agreed to this. However, going by the last sentence of the first paragraph of Ext.P4, the President of the petitioner objected to the proposal regularizing the service of the second respondent. 3. Regarding that, it has been pointed out that those recruited after the second respondent WPC15452/2006 ## -:3:- were already regularized in the Wayanad garment unit and that the posting of the second respondent was well before the Public Service Commission was authorized to make selections for direct recruitment and still further that while dealing with the case of Smt.Ragini, the PSC had offered its remarks that their concurrence is not required. Accordingly, stating that it is in consideration of all the facts stated in Ext.P4 and on humanitarian grounds, a decision was taken to regularize the service of the second respondent with retrospective effect. Acting on Ext.P4 minutes, the impugned Ext.P5 was issued on 9-1-2006. That is a Government Order issued through the industries department by the Secretary to the Government by the order of the Governor. This writ petition is filed on 14-6-2006 challenging the decision contained in Exts.P4 and P5. It is filed by the society represented by its president. WPC15452/2006 ## -:4:- 4. The second respondent has filed a counter affidavit asserting that it is within the powers of the Government to pass orders, particularly when the Government holds more than 90% of the shares in the petitioner's society and the same is functioning only on the grant of the Government. Ext.P5 order is thus pleaded to be one with jurisdiction. It is further contended that Ext.P5 is the result of the agreement of parties and it cannot be questioned by a signatory of those proceedings. It is also contended that a society entirely owned by the Government of Kerala cannot question the action of the Government. It is urged that there is inexcusable delay in challenging Exts.P4 and P5 and the president of the petitioner had waited for a change in the ministry to file this writ petition. It is further pleaded in paragraph 3 of the counter affidavit that different other persons have been regularized and on facts, the impugned order ought to stand. The authority WPC15452/2006 ## -:5:- of the president to represent the petitioner is challenged by contending that in terms of the byelaws, the Managing Director is vested with the authority to represent the petitioner society in litigations. 5. In support of the writ petition, the learned counsel for the petitioner relying on the decision of the Division Bench of this Court in **- Elampal Service Co operative Bank Ltd. v.** **Government of Kerala (2000 (3) KLT 389)** argued that the matter of making appointments etc. are entirely within the exclusive domain of the society and its powers and the Government cannot rescind the powers of the society in that regard. It is further pointed out that the impugned Ext.P5 is wholly without jurisdiction and Ext.P4 is not with the concurrence of the committee of the petitioner. WPC15452/2006 ## -:6:- 6. Per contra, the learned senior counsel for the second respondent reiterated the contentions raised in the counter affidavit and pointed out that the impugned decisions stand and there is no reason to extend the visitorial jurisdiction of this Court at the instance of the president of a society, that too, in the writ petition filed long after Ext.P4 minutes and Ext.P5 decision rendered more than five months before the institution of this writ petition. It was pointed out that Ext.P4 was a decision with the concurrence of all concerned. 7. Before proceeding to consider the binding nature of any decision that may be referable to Ext.P4 and the effect of Ext.P5 Government Order, it has to be noticed that there can be no controversy that the president of the petitioner society objected to the proposal to regularize the service of the second respondent. This is WPC15452/2006 -:7:- categoric from the last sentence of the first paragraph of Ext.P4. This was disputed by the learned counsel for the second respondent. 8. As is apparent from Ext.P5, the petitioner was clinging on after 29-12-1997 only on the basis of the interim order granted in O.P.1271 of 1998. That state of affairs was continuing when the conference that led to Ext.P4 minutes was held and Ext.P5 order was issued on 9-1-2006. Going by the records of this Court, thereafter on 12-12-2006, O.P.1271 of 1998 was dismissed on the submission on behalf of the petitioner therein, namely the second respondent herein, that the said original petition had become infructuous. The foundation for any negotiation that led to Exts.P4 and P5 Government Order was an interim order given by this Court in exercise of extra ordinary jurisdiction under Article 226 letting a temporary recruit to continue in the employment of the petitioner. The state of WPC15452/2006 ## -:8:- affairs obtained by that interim order cannot, in any manner, be interfered with, defused or bettered by any executive action. Ext.P4 minutes and Ext.P5 order disclose that pending judicial determination of the claim of the second respondent regarding the quality of his employment under the petitioner as to his entitlement to continue in service, the Government interfered by issuing Ext.P5, that too, by convening a meeting at the behest of the Minister for Industries and Social Welfare acting on the basis of a representation by the second respondent. In my considered view, Exts.P4 and P5 is a clear affront and interference with the judicial process and order on the basis of which the second respondent was continuing to work under the petitioner. 9. Be that as it may, as already noticed, the President of the petitioner objected to the proposal to regularize the service of the second WPC15452/2006 ## -:9:- respondent. The committee of the petitioner society had taken note of the decision in that regard. It did not participate in Ext.P4 meeting. Section 9 of the KCS Act provides that co-operative societies are to be bodies corporate. The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted. There is no provision in the Co-operative Societies Act for the Minister or the Government to interfere with the affairs of a society, even if it be one to which Section 42 of the Act applies. The powers of the Registrar in appeal or revision by the Government has aways been understood as only to be of supervisory nature, with power to interfere only in the interest of a society. That does not include WPC15452/2006 ## -:10:- the power to interfere with the affairs of the society at the behest of and in the interest of any particular employee and such interference is not called for, in a case to case basis, as has been done in the situation in hand. At any rate, the Government and the Minister had absolutely no authority to impress and impose any decision on the petitioner. This is all the more so because the President of a democratically elected committee of the petitioner had objected to the regularization of the second respondent's service and such objection is part of Ext.P4 minutes. Even otherwise Exts.P4 and P5 result in unauthorised, unsolicited, unlawful and uncalled for interference with the affairs of co-operative society, which, as already noticed, is a bodies corporate. 10. By now, it has been well settled that a temporary employment cannot be regularized by such procedures as has been adopted as per Exts.P4 and WPC15452/2006 ## -:11:- P5. The second respondent does not have a case that his initial entry in the service of the petitioner was through a transparent process. His continued employment with the petitioner as on the date of Exts.P4 and P5 was only on the basis of the interim order issued by this Court in O.P.No.1271 of 1998. No equities on the basis of that interim order ought to be permitted to be worked upon by a decision at the Governmental level or at the level of the Minister, that too, when it is imposed on a society on the teeth of opposition even by the President of the society. Exts.P4 and P5 are unreasonable, arbitrary and is a result of colourable exercise and resultant fraud on powers in as much as those decisions are made to appear without any power being available to issue such decisions. Exts.P4 and P5 are tainted with nepotism, favouritism and unauthorized encroachment into the affairs of the petitioner society without any authority of power. WPC15452/2006 -:12:- 11. The President of the petitioner has filed this writ petition after voicing his dissent to the proposal that cropped up in the meeting that led to Ext.P4. Even if I were to assume that this writ petition is filed in his personal capacity, Hantex deals with public funds. Admittedly, more than 90% of the shares are held by the Government. This is all the more so why, selection, appointment and regulation of service etc. ought to be transparent. For the foregoing reasons, this writ petition succeeds. In the result, this writ petition is allowed quashing Exts.P4 and P5. ## **Thottathil B.Radhakrishnan,** sl. **Judge.**