N. Rajan v. The State of Kerala, Joint Registrar of Co-operative Societies (General), Administrative Committee of the Vadakara Co-operative Rural Bank Limited and the Vadakara Co-operative Rural Bank Limited

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU TUESDAY, THE 23RD DAY OF FEBRUARY 2016/4TH PHALGUNA, 1937 WP(C).No. 16026 of 2013 (C) --------------------------------------- PETITIONER : - ----------------------- N.RAJAN, THUNIDPARAMBATH HOUSE, PAZHAMKAV, VADAKARA, KOZHIKODE DISTRICT. BY ADVS. SRI.M.K.DAMODARAN (SR.) SRI.P.K.VIJAYAMOHANAN SRI.ALAN PAPALI SRI.GILBERT GEORGE CORREYA SRI.NISHIL.P.S. RESPONDENTS : - --------------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, CO-OPERATION DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM, PIN - 695 001. 2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KOZHIKODE, PIN - 673 301. 3. THE ADMINISTRATIVE COMMITTEE OF THE VADAKARA CO-OPERATIVE RURAL BANK LIMITED, NO.F 1264, REPRESENTED BY ITS CONVENOR, VADAKARA P.O., ] KOZHIKODE, PIN - 673 103. 4. THE VADAKARA CO-OPERATIVE RURAL BANK LIMITED NO.F 1264, REPRESENTED BY ITS SECRETARY, VADAKARA P.O., KOZHIKODE, PIN - 673 103. BY GOVERNMENT PLEADER SRI. A.J. JOSE AEDAIODI R3 BY ADV. SRI.B.S.SWATHY KUMAR R3 BY ADV. REMYA MURALI R3 BY ADV. SRI.VENKATESH GOPI R4 BY ADV. SRI.K.MOHANAKANNAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 16026 of 2013 (C) -------------------------------------- ## **APPENDIX** PETITIONER'S EXHIBITS : - ---------------------------------------- EXHIBIT P1 : TRUE COPY OF THE ORDER NO.C.R.P.(2) 4557/2011 DATED 08.02.2012 OF THE 2ND RESPONDENT. EXHIBIT P2 : TRUE COPY OF THE G.O.(P)NO.56/2013/CO-OP DATED 10.04.2013. EXHIBIT P3 : TRUE COPY OF THE ORDER NO.C.R.P.(2) 3620/13 KDIS DATED 15.06.2013 OF THE 2ND RESPONDENT. EXHIBIT P4 : TRUE COPY OF THE REPRESENTATION DATED 13.06.2013 AND ITS ACKNOWLEDGEMENT BY THE REGISTRAR ON 15.06.2013. RESPONDENTS' EXHIBITS : - --------------------------------------EXHIBIT R3(a) : TRUE COPY OF THE STAFF PATTERN OF THE 4[th] RESPONDENT. // TRUE COPY // P.A. TO JUDGE DMR/- **C.R.** ## **DAMA SESHADRI NAIDU, J.** --------------------------------------- ## **W.P.(c) No. 16026 of 2013** ---------------------------------------- Dated this the 23[rd] day of February, 2016 ## JUDGMENT The petitioner, a member of the fourth respondent Co-operative Society under the management of the third respondent Administrative Committee, assails Exhibit P3 order issued by the Joint Registrar of Co-operative Societies, the second respondent, permitting the third respondent to fill up ten posts of Salesman/Peon lying vacant in the Bank. 2. As seen from the record, the term of the earlier Managing Committee came to an end in August 2011 for want of quorum; as a result, on 29.08.2011, the third respondent Administrative Committee was appointed. Though the Society initially proposed to have the election on 28.10.2012, the proposal could not materialize because of the pending litigation. It is represented that SLP No.17632/2013 is pending before the Honourable Supreme Court, in which status quo orders have already been granted. 3. In the light of the pending litigation, as there is no possibility of having a regular election to the Managing Committee in immediate future, the third respondent has W.P.(c) No. 16026 of 2013 2 proposed to fill up the vacancies in the Bank. Accordingly, acting on its representation, the second respondent issued Exhibit P3 order permitting the third respondent to fill up ten vacancies. The petitioner being a member has laid challenge against Exhibit P3 order. 4. Sri. M.K. Damodaran, the learned counsel for the petitioner, has submitted that the Administrative Committee comes into existence only as a stopgap arrangement either under Section 32 or 33 of the Kerala Co-operative Societies Act (for short 'the Act'). It is, therefore, not authorized to take any policy decisions, which include the appointment of staff on a permanent basis. In support of his submissions, the learned Senior Counsel has placed reliance on **Raghavan Nair v. Joint Registrar of Co-op. Societies** _[1] ,_ **Dist. Industries Centre v. Kaithari Neithu Sahakarana Sangam** _[2] , T_ **hrissur District Co-operative Bank v. State of Kerala** _[3] ,_ **Jt. Registrar of Co-operative Societies v. T.A. Kuttappan and others** _[4] ,_ _**Hassan v. Joint Registrar of Co-operative**_ > 1 1998 (2) KLT 1068 2 1999 (1) KLJ 885 3 2003 (2) KLT 606 4 (2000) 6 SCC 127 W.P.(c) No. 16026 of 2013 3 ## _**Societies[5]**_ and _**Karunakaran Pillai v. Venugopala Pillai**[6] ._ 5. _Per contra_ , Sri. B.S. Swathy Kumar, the learned counsel for the third respondent, has submitted that the fourth respondent Bank for many years is without any Managing Committee. The Bank has 11 branches, apart from the Head Office, five retail ration shops, and a neethi store. If appointments are not made to the existing post of the salesman/peon, it is difficult for the Bank to continue the ration shops and the neethi store. Most of the ration shops are in the coastal areas, and the people of the locality mainly rely on the supply from the ration shop; it is impossible to keep the ration shop closed for a single day. In these peculiar circumstances, for the administrative convenience of the Bank, the third respondent has asked permission to make appointments. It is after a full-fledged enquiry by the Assistant Registrar that the second respondent granted sanction to the third respondent to make appointments. 6. The learned counsel has also submitted that as per Exhibit R3(a), showing the approved staff pattern, there are ten posts of Salesman/Peon. At present, there are no 5 1998 (2) KLT 746 (FB) 6 2005 (3) KLT 348 W.P.(c) No. 16026 of 2013 4 permanent Salesmen/Peons. And all the persons working in either position are employed on daily wages. 7. In elaboration of his submissions, the learned counsel has submitted that most of the authorities cited at the bar by the learned Senior Counsel concern themselves with the issue of policy decisions, especially as regards the admission of new members by an Administrator or Administrative Committee. About **Dist. Industries Centre** _(supra),_ the learned counsel would contend that except a stray sentence that the Administrative Committee shall not make any appointment to any post till the next committee takes charge, it has not assigned any reasons, submits the learned counsel. 8. The learned counsel has also contended that in none of the judgments referred to above has the issue whether appointing staff under exigent circumstances amounts to any policy decision been considered. According to him, the issue has gone _sub silentio_ . And, therefore, those decisions cannot be taken as precedents concerning the power of the Administrative Committee to appoint staff in identified vacancies under exigent circumstances. W.P.(c) No. 16026 of 2013 5 9. The learned counsel has further submitted that in view of the expansion of Bank, there is a felt need for urgent appointment of staff, lest the Society should suffer. When suggested about having the staff appointed on a temporary basis to tide over the crisis, the learned counsel would contend that since the staff to be appointed are required to handle lakhs of rupees, it is inadvisable to entrust such task to the employees appointed on a temporary basis. 10. The learned counsel for the fourth respondent Bank has adopted the submissions made by the learned counsel for the third respondent. 11. The learned Government Pleader, on his part, has submitted that the second respondent has taken into account all facts and circumstances before permitting the Administrative Committee to make the appointments. According to him, Exhibit P2 order is unexceptionable. 12. Heard the learned counsel for the petitioner and the learned counsel for the respondents, as well as the learned Government Pleader, apart from perusing the record. 13. Indeed, the factual controversy falls in a narrow compass. The singular issue to be decided is whether the W.P.(c) No. 16026 of 2013 6 Administrative Committee has the power to appoint employees on a permanent basis, especially, in regular vacancies. 14. The Courts have consistently held that an Administrative Committee cannot take policy decisions for it comes in the interim before a regular Managing Committee could take charge. By extending the said proposition, the Courts have also held that appointing employees on a permanent basis amounts to a policy decision; _ipso facto,_ it cannot be done by an Administrative Committee. 15. Nevertheless, the Courts have recognized the felt need of having the staff for the purpose of smooth administration. As an ameliorative measure, the Courts have also observed that an Administrative Committee can as well go for temporary appointments. 16. In _Raghavan Nair_ (supra), a learned single Judge has held that the power to effect appointment in a Co-operative Society is vested in the general body. When it constitutes an elected body, the same is vested in the elected body, which owe its existence to the general body. An administrator or an administrative committee is only expected to manage the affairs of the society and exercise the functions of the W.P.(c) No. 16026 of 2013 7 committee; it is not expected to exercise the 'powers' of an elected committee. 17. _Raghavan Nair (supra)_ proceeded on the analogy that the Registrar of Co-operative Societies has no power to effect appointments. By the same reckoning, the administrator or the administrative committee appointed by him cannot exercise the said power. The conclusion is that if an administrator effects a regular appointment in a society, that appointment shall be without jurisdiction, _ultra vires_ , and void. 18. _Raghavan Nair_ is however not oblivious to the practical problems that might arise if there were to be any absolute proposition interdicting all types of appointment. It has thus acknowledged that there may be situations where due to dearth of staff society may experience difficulties even to manage day-to-day affairs. In such situations, it may be possible for an administrator or administrative committee to appoint employees on a temporary basis with prior permission of the Registrar. 19. The emphatic observation in _Raghavan Nair_ is that such appointments will cease to have effect once the administrator or the administrative committee vacates office. W.P.(c) No. 16026 of 2013 8 In other words their continuance will be till regular recruitment takes place. 20. In _Dist. Industries Centre (supra),_ a learned Division Bench of this Court, after referring with approval to the decision of another co-equal bench, has held that the administrator, in charge of the day-to-day management of the society, shall not take any policy decision or incur huge expenditure. He shall not, therefore, make appointments to any post till the next committee take charge. 21. In fact, the rest of the judgments relied on by the learned Senior Counsel relate to the aspect of the qualifications, especially concerning the admission of new members. I do not see any need to refer to them for they cannot be said to be precedents governing the issue on hand. 22. Especially, going by the definitive judicial pronouncements of this Court in _Raghavan Nair_ and _Dist. Industries Centre (supra)_ , I cannot but hold that Exhibit P2 is unsustainable. It is, however, made clear that since there can be no absolute embargo against the powers of the Administrative Committee to ensure smooth administration of the respondent Bank, it is made clear that it may, under W.P.(c) No. 16026 of 2013 9 compelling circumstances, go for temporary appointments, which shall not give the appointees any vested right. With the above observations, this writ petition is disposed of. No order as to costs. **DAMA SESHADRI NAIDU JUDGE** DMR/-