Muthalakodam Service Co-operative Bank Ltd. v. State of Kerala & Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR & THE HONOURABLE MRS. JUSTICE MARY JOSEPH MONDAY, THE 19TH DAY OF MARCH 2018 / 28TH PHALGUNA, 1939 WA.No. 164 of 2018 IN WPC. 35944/2015 ------------------------------------AGAINST THE ORDER IN WP(C) 35944/2015 DATED 16-03-2017 APPELLANT(S)/5TH RESPONDENT MUTHALAKODAM SERVICE CO OPERATIVE BANK LTD. NO. 1403, MUTHALAKODAM P.O., IDUKKI-686605, REPRESENTED BY ITS PRESIDENT. BY ADVS.SRI.GRASHIOUS KURIAKOSE (SR.) SRI.T.T.RAKESH SRI.GEORGE MATHEWS RESPONDENT(S)/PETITIONERS & RESPONDENTS 1 TO 4: 1. K.K.JOSEPH,KALLUNGAKUDIYIL HOUSE, MUTHALAKODAM P.O., THODUPUZHA,IDUKKI DISTRICT. 2. ELSY JOHN,W/O.K.K.JOSEPH, KALLUNGAKUDIYIL HOUSE, - MUTHALAKODAM P.O., THODUPUZHA, IDUKKI DISTRICT. 3. MAITHEEN,THRIKKADAYIL HOUSE, MUTHALAKODAM P.O., THODUPUZHA, IDUKKI DISTRICT. 4. STATE OF KERALA,REPRESENTED BY ITS SECRETARY TO GOVERNMENT, - CO-OPERATION DEPARTMENT, SECRETARIAT, TRIVANDRUM. 5. THE REGISTRAR OF CO-OPERATIVE SOCIETIES,OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES, TRIVANDRUM. 6. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), - OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, PAINAVU, IDUKKI. 7. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), - OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THODUPUZHA, IDUKKI-685584. R1 TO 3 BY ADV.SRI.P.V.BABY R4 TO 7 BY GOVERNMENT PLEADER SMT.K.R.DEEPA THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19-03-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A.NO.164/2018 ## APPENDIX APPELLANT'S EXHIBITS: ANNEXURE A:TRUE COPY OF THE ORDER IN I.A.NO.14155/2017 IN W.P. (C).NO.35944/2015 DATED 09.10.2017. RESPONDENTS' EXHIBITS:NIL //TRUE COPY// P.A.TO JUDGE ## **C.T. RAVIKUMAR & MARY JOSEPH, JJ.** ## **==========================** ## **W.A. No.164 OF 2018** ## **==========================** Dated this the 19[th] day of March, 2018 ## **JUDGMENT** _Ravikumar, J._ This intra court appeal is directed against judgment dated 16.3.2017 in W.P.(C).No.35944 of 2015 as modified as per order dated 9.10.2017 in I.A.No.14155 of 2017, of the learned Single Judge. The appellant herein was the fifth respondent and respondents 1 to 3 herein were the petitioners, therein. Respondents 4 to 7 herein were the other respondents in the writ petition. Respondents 1 to 3 herein viz., petitioners filed the aforesaid writ petition seeking the following reliefs:- - i) Issue a writ of certiorari or any other appropriate writ or order or calling for the records leading to Ext.P14 and P17 and quash the same; and - ii) Issue a writ of mandamus or any other appropriate writ or order or commanding and compelling the **W.A.164/2018** 2 respondents to implement the pay revision order treating the Society as a Class-II Society and extent all the benefits arising out of the pay revision order; and - iii) Declare that Ext.P14 and also the consequential order issued by the 3[rd] respondent in the nature of Ext.P17 are without any power authority or jurisdiction. 2. As per judgment dated 16.3.2017, the learned Single Judge quashed Exts.P14 and P17 and directed respondents 1 to 4 to take emergent steps to see that Ext.P2 pay revision is implemented by the fifth respondent society treating the society as Class II society. It was also directed that all the monetary benefits due and arrears thereof, shall be calculated and paid to the eligible employees by the fifth respondent within the time stipulated thereunder. Subsequent to the pronouncement of the judgment, the appellant herein filed I.A.No.14155 of 2017 seeking a re-hearing of the writ petition after recalling the judgment. The Registry noted a defect to the effect that once a writ petition is disposed of, no interlocutory application would lie, for re-hearing the same after recalling the judgment and for that **W.A.164/2018** 3 purpose, a review petition has to be filed in accordance with law. That objection is only to be upheld. The learned Single Judge, however, treated it as a review petition and in exercise of the inherent power, passed the order dated 9.10.2017 and made modification of the judgment by deleting the second sentence in paragraph 10 therein. In other words, as per the said order, the earlier order quashing Exts.P14 and P17 was recalled and all other conclusions, findings and directions were maintained. It is in such circumstances that this appeal has been preferred by the 5[th] respondent therein challenging the aforesaid judgment and order dated 9.10.2017 in I.A.No.14155 of 2017. 3. We have heard the learned senior counsel appearing for the appellant, the learned counsel for respondents 1 to 3 and also the learned Government Pleader. 4. Essentially, the contention of the learned senior counsel for the appellant is that the modified order in I.A.No.14155 of 2017 would reveal that earlier order interfering with Exts.P14 and P17 was **W.A.164/2018** 4 recalled and the effect and impact of recalling of the order quashing Exts.P14 and P17, would be restoration of those orders and if that be so, in the light of Exts.P14 and P17, the learned Single Judge ought not to have granted the other prayers. In other words, it is the submission that the learned Single Judge, after recalling the order of quashment of Exts.P14 and P17, had failed to consider the actual impact and effect of their restoration on Ext.P2 pay revision order. It is contended that Ext.P2 pay revision order, ought not to have been given effect to, by treating the society as Class-II, as on 1.4.2009. The learned senior counsel has also contended that the classification of societies is being done in the light of the provisions under section 80(1) of the Kerala Co-operative Societies Act (for short, 'the Act') read with Rule 182 of the Kerala Co-operative Societies Rules and that such classification is automatic in terms of Appendix III to the Act. In such circumstances, a resolution passed by the Bank would be declarative in nature and any order passed by the authorities relating classification/re-classification would also be declarative in **W.A.164/2018** 5 nature, and therefore, it should take its effect retrospectively. The essence of the contentions is that in the light of Exts.P14 and P17, the society ought not to have been treated as Class-II society as on 1.4.2009 whereas it ought to have been treated only as Class-IV society. 5. Per contra, the learned counsel for respondents 1 to 3 submitted that the benefit of Ext.P2 could not be declined to the petitioners once it is evident that as on 1.4.2009, the society was actually belonging to Class-II. It is the contention that a bare perusal of Ext.P2 would reveal that the entitlement to pay revision benefits flowing from it, would depend upon the actual status of the society as on the relevant date. In such circumstances, a re-classification done to the society with retrospective effect, cannot take away the right accrued and enjoyed by its staff. It is submitted that there is absolutely no reason to interfere with the judgment as also the order passed in the aforesaid I.A. by the learned Single Judge. For a proper consideration of the rival contentions, it is only worthwhile to extract **W.A.164/2018** 6 Section 80 (1) & (2) of the Act and Rule 182 of the Rules:- **Section 80(1):** The Government shall classify the societies in the State according to their type and financial position. (2) The Government shall, in consultation with the Registrar, fix or alter the number and designation of the officers and servants of the different classes of societies specified in subsection (1). **Rule 182.Classification under Section 80(1)** :-(1) For the purpose of sub-section (1) of S.80, the societies in the State shall be classified as shown in Appendix III: [Provided that the Government may on their own motion or otherwise, after consultation with the Registrar, revise such classification once in every three years] 6. A perusal of section 80 of the Act reveals that the power to classify the societies in the State according to their type and financial position vests with the Government and Sub-section 2 thereof reveals that this shall be done in consultation with the Registrar. Going by Rule 182, classification has to be done as shown in Appendix III. The proviso thereunder makes it clear that Government may on their own motion or otherwise, after consultation with the Registrar, revise such classification once in every three years. In the case on hand, as per the **W.A.164/2018** 7 judgment dated 16.3.2017, the learned Single Judge quashed Exts.P14 and P17. Ext.P14 is the resolution of the managing committee of the Bank re-classifying the society as Class-IV with effect from 1.4.2009. Ext.P17 is an order passed by the Joint Registrar (General) of the Cooperative Societies, Idukki approving Ext.P14 resolution. As per Ext.P14, it was resolved thus:- 1.4.2009 മതൽ ക�സ IV ൽ പവർത�കനതക��ണ ബ�ങ�ക� 1.4.2009 മതൽ ക�സIV ആയ� Re-classify ക*യനത�ന ത-രമ���ച. ഇത�ൽ ബഹ: ജ5�യ�ന ര5�സ�റക: അ<ഗ-��രത���യ� അജ>ക�കനത�ന< . ത-രമ���ച As per Ext.P17, the Joint Registrar ordered thus:- 1403-)0 �മർ മതലജB�:< സർവ-സ� സഹ�രണ ബ�ങ� ഭരണസമ�ത�യക: **23.08.12** കല **231-** )0 �മർ ത-രമ��പ��ര< **1.4.2009** മതൽ ജ�രള സഹ�രണ ��യമ< *ട< **182** അനബന< **3** പ��ര< :� ബ�ങ�ക� ക�സ� **IV** ആയ� തര<ത�ര�ച�ടളത� അ<ഗ-�ര�ച� ഇത���ൽ ഉതരവ�കന **. 4.1.2010** കല സ **.** ഉ **.(** >� **)** �മർ **2/10** സഹ **(** എസ� **.** ആർ **.** ഒ **.9/10)** പ��ര< സ<ഘകത റ-ക�സ�ഫW **.** ക*യ� അ<ഗ-�� ര< വ�ജYണത�ണ� 7. As noticed hereinbefore, as per order in I.A.No.14155 of **W.A.164/2018** 8 2017, the learned Single Judge had recalled the order quashing Exts.P14 and P17. At the same time, the rest of the directions issued under the judgment were retained. We have already taken note of the fact that the core contention of the appellant is that when Exts.P14 and P17 are restored, the writ petitioners viz., respondents 1 to 3 are not entitled to get the benefit of Ext.P2 treating the society as Class-II as on 1.4.2009 and to apply for its approval of the Joint Registrar. In the contextual situation, it is only relevant to refer to Ext.P17. True that as per Ext.P14, the society passed resolution re-classifying it as ClassIV with effect from 1.4.2009 and to apply for its approval of the Joint Registrar. The said resolution was passed only on 23.8.2012. The Joint Registrar, in turn, passed Ext.P17 granting approval to the said resolution and further making it clear that the society should reclassify the society in tune with G.O. dated 4.1.2010 and get approval for the same. The learned senior counsel appearing for the appellant contended that there is no requirement for getting a further approval once the approval is granted by the Joint Registrar. **W.A.164/2018** 9 8. The question involved in the case on hand is virtually regarding the right of employees to get pay revision benefits flowing from Ext.P2. Going by Ext.P2, entitlement to such benefits purely depends upon the classification of the society concerned as on 1.4.2009. True that as per the judgment, the learned Single Judge quashed Exts.P14 and P17 and subsequently recalled the order of quashment of Exts.P14 and P17 as per order in I.A.No.14155/2017. In such circumstances, at the first blush, it would appear that the contention of the appellants that by virtue of the order recalling the order quashing Exts.P14 and P17 it should be deemed that as on 1.4.2009 the society was class-IV and had the consequential effect of making the employees disentitled to claim the benefits flowing from Ext.P2 pay revision order, has some substance. In the contextual situation, it is relevant to refer to a Single Bench decision of this Court in **Mohanan v. State of Kerala** reported in **2012 (3) KLT 92** . The question considered therein was whether the pay revision benefits once granted could be recovered pursuant to an amendment to the **W.A.164/2018** 10 relevant Rules with retrospective effect. The learned Single Judge held that a vested right could not be affected by any amendment of rules with retrospective effect and further went on to hold that pay revision as order could not be withdrawn per government subsequently based on another. For holding so, the learned Single Judge relied on the decision of the Hon'ble Apex Court in **Chairman, Railway Board & Ors. v. C.R.Rangadhamaiah & Ors. [1997 (6) SCC 623]** . It was held therein that when a benefit which was granted with regard to promotion or pay scale is sought to be reversed from an anterior date, such action would violate Articles 14 and 16 of the Constitution. 9. In the impugned judgment, the learned Single Judge relied on a decision of the Apex Court in **Vice Chancellor, M.D.University, Rohtag v. Johan Singh [(2007) 5 SCC 77].** Going by the said decision, unless express power is provided for issuing orders with retrospective effect, the actions or orders of persons or bodies delegated with power can only be prospective in operation. In the **W.A.164/2018** 11 case on hand, revision of pay was effected as per Ext.P2. Indisputably, going by Ext.P2, the entitlement of pay revision benefits flowing from the same would depend upon the classification of the society concerned as on 1.4.2009. The contention of the petitioners viz., respondents 1 to 3 is that as on 1.4.2009, the society belonged to Class-II. The said position is not disputed. In fact, it is indisputable and the said fact is also evident from Exts.P14 and P17. The learned counsel for respondents 1 to 3 brought to our attention Ext.P1 dated 9.7.1985 issued by the Joint Registrar. As per the same, the appellant society which was Class-III was classified as Class-II with effect from 1.7.1984. Ext.P2 is dated 25.2.2011. As on that day, the society was a Class-II society. Ext.P14 itself would reveal that a resolution reclassifying the society was passed only on 23.8.2012. What was done thereunder was to re-classify the appellant society which was earlier classified as Class-II as Class-IV with retrospective effect from 1.4.2009. It obtained the approval of the Joint Registrar only as per Ext.P17 dated 20.9.2012. In such circumstances, even if it is held that **W.A.164/2018** 12 the re-classification was made subsequently the fact is that as on 1.4.2009, it was a class-II society. Though Exts.P14 and P17 were initially quashed as per the judgment dated 16.3.2017 and subsequently, the order of their quashment was recalled. Despite the modification of the judgment to that effect, the writ petitioners did not prefer any appeal. In the circumstances, we do not propose to consider the correctness of the order in the said I.A. Hence, the question is even if the society was classified as Class-IV with retrospective effect, whether it could take away the benefits accrued in view of Ext.P2. We have already noted the position that going by Ext.P2 what matters is classification of the society as on 1.4.2009. Exts.P1, P14 and P17 would reveal that as on 1.4.2009, the society was actually a Class-II society. A re-classification virtually, a degradation effected with retrospective effect, cannot take away the pay revision benefits accrued by the revision petitioners in terms of Ext.P2. It is to be noted that Ext.P2 has not been cancelled, varied or modified in any manner. What was contended by the appellants is that **W.A.164/2018** 13 the society was degraded as Class IV society, with retrospective effect from 1.4.2009 as per Ext.P14 dated 23.8.2012. Ext.P2 is dated 25.2.2011. The learned senior counsel appearing for the appellants relied on a decision of a Single Bench of this Court in **Sherthallai Urban Co.op. Bank Ltd v. State of Kerala** reported in **1984 KLT 971** virtually to canvass the position that a further approval required to be obtained going by the recital in Ext.P17, is absolutely unwarranted. The case dealt with in the said decision pertains to the legality of the condition imposed by the Joint Registrar that appointments in the upgraded society should be made with his approval. It was held that once the staff pattern was fixed under Appendix III, prior approval of the Joint Registrar for appointments to fill up the posts, is not required. Here, the staff pattern was fixed under Appendix III, after the classification of the appellant society as Class II. It is while the said classification was in force that Ext.P2 was issued. In such circumstances, the said decision got no application to the case on hand. The learned Single Judge is correct in holding that the **W.A.164/2018** 14 subsequent amendment or re-classification cannot adversely affect the employees of the society. We find no reason to interfere with the judgment of the learned Single Judge which was modified as per the order in I.A.No.14155 of 2017. The benefits as ordered by the learned Single Judge as per judgment dated 9.10.2017 shall be granted to the employees of the appellant society as expeditiously as possible, at any rate, within a period of two months from the date of receipt of a copy of this judgment. Subject to the above, this appeal is dismissed. **Sd/-** **C.T. RAVIKUMAR (JUDGE)** **Sd/-** **MARY JOSEPH (JUDGE)** **spc/** //True copy// Sd/- P.A.to Judge **W.A.164/2018** 15 **C.T. RAVIKUMAR, J.** **W.A.164/2018** 16 **JUDGMENT September, 2010**