Pushpalatha O.K. and Sheeba Rani.V.J. v Naramanoozhy Service Co-operative Bank Ltd and others

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE FRIDAY, THE 1ST DAY OF MARCH 2013/10TH PHALGUNA 1934 WP(C).No. 10646 of 2012 (E) ---------------------------- PETITIONERS: -------------------------- 1. PUSHPALATHA O.K, PEON - NARANAMOOZHY SERVICE CO-OPERATIVE BANK LTD. NO. 3910 NARANAMOOZHY.P.O. R-PERUNAD, PATHANAMTHITTA. 2. SHEEBA RANI.V.J PEON NARANAMOOZHY SERVICE CO-OPERATIVE BANK LTD. NO. 3910 NARANAMOOZHY.P.O. R-PERUNAD, PATHANAMTHITTA. BY ADV. SRI.P.N.MOHANAN ## RESPONDENTS: ----------------------- 1. NARANAMOOZHY SERVICE CO-OPERATIVE BANK LTD. NO. 3910, REPRESENTED BY ITS PRESIDENT, NARANAMOOZHY.P.O, R-PERUNAD, PATHANAMTHITTA - 689 711 2. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) PATHANAMTHITTA - 689 645. 3. ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES RANNI, PATHANAMTHITTA - 689 672. 4. SHANI PHILI ISSAC, - JUNIOR CLERK NARANAMOOZHY SERVICE CO-OPERATIVE BANK LTD. NO. 3910, NARANAMOOZHY.P.O, R-PERUNAD, PATHANAMTHITTA - 689 711. 5. THE DISTRICT LABOUR OFFICER, PATHANAMTHITTA - 689 645. R1 BY ADV. SRI.JACOB P.ALEX R1 BY ADV. SRI.JOSEPH P.ALEX R4 BY ADV. SRI.ARUN CHANDRAN BY GOVERNMENT PLEADER SMT.LILLY K.T. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## WP(C).No. 10646 of 2012 (E) APPENDIX PETITIONERS' EXHIBITS : EXHIBIT-P1-TRUE COPY OF THE RESOLUTION DATED 04/01/20011 OF THE BANK. EXHIBIT-P2-TRUE COPY OF THE RESOLUTION DATED 16/09/2006 OF THE MANAGING COMMITTEE EXHIBIT-P3-TRUE COPY OF THE PAPER NOTIFICATION DATED 07/11/2005 EXHIBIT-P4-TRUE COPY OF THE ORDER DATED 13/09/2006 EXHIBIT-P5-TRUE COPY OF THE APPOINTMENT ORDER DATED 18/09/2006 OF THE 2ND PETITIONER. EXHIBIT-P6-TRUE COPY OF THE AUDIT OBJECTION OF THE IST RESPONDENT. EXHIBIT-P7-TRUE COPY OF THE RESOLUTION OF THE MANAGING COMMITTEE DATED 07/05/2010 EXHIBIT-P8-TRUE COPY OF THE JUDGMENT REPORTED IN 200O (3) KLT 389. EXHIBIT-P9-TRUE COPY OF THE RESOLUTION DATED 27/06/2001 ALONG WITH THE COVERING LETTER OF THE BANK. EXHIBIT-P10-TRUE COPY OF THE INTERIM ORDER DATED 30/08/2010 EXHIBIT-P11-TRUE COPY OF THE JUDG MENT DATED 12/06/2006 IN W.P(C) 32963/2005 EXHIBIT-P12-TRUE COPY OF THE PETITION DATED 16/02/2009 OF THE 4TH RESPONDENT. EXHIBIT-P13-TRUE COPY OF THE RESOLUTION NOS. 880, 881 AND 882 DATED 22/01/2010 OF THE BANK. EXHIBIT-P14-TRUE COPY OF THE RESOLUTION OF THE COMMITTEE DATED 25/06/2011 EXHIBIT-P15-TRUE COPY OF THE SETTLE MENT MEMORANDUM DATED 06/07/2011 BEFORE THE DISTRI CT LABOUR OFFICER. EXHIBIT-P16-TRUE COPY OF THE PROVISIONAL SENIORITY LIST DATED 29/02/2012 EXHIBIT-P17-TRUE COPY OF THE OBJECTION DATED 01/03/2012 FILED BY THE PETITIONER. EXHIBIT-P18-TRUE COPY OF THE PETITION DATED 16/03/2012 EXHIBIT-P19-TRUE COPY OF THE RESOLUTION NO. 5 DATED 04/04/2012 OF THE BANK. EXHIBIT-P20-TRUE COPY OF THE RESOLUTION NOS. 7, 8 AND 9 DATED 04/04/2012 EXHIBIT-P21-TRUE COPY OF THE RESOLUTION NOS. 10, 11, 12 AND 13 DATED 04/04/2012. EXT.P22- COPY OF RESOLUTION DTD 12.11.2001 OF R1 WP(C).No. 10646 of 2012 (E) -2- EXT.P23- COPY OF RESOLUTION DTD 20.8.2004 OF R1 EXT.P24- COPY OF RELEVANT PAGES OF AUDITED BALANCE SHEET OF THE YEAR 2000-2001 EXT.P25- COPIES OF ORDER DTD.13.2.2012 OF JOINT REGISTRAR AND RESOLUTION NOS.425 & 426 EXT.P26- COPY OF AUDIT CERTIFICATE DTD.30.11.2011 OF THE YEAR 2008-2009 EXT.P27- COPIES OF DECISION DTD 20.11.2012 OF JOINT REGISTRAR AND THE RESOLUTION NO.61 AND 62 DTD.16.5.2012 OF THE BANK. ## RESPONDENTS' EXHIBITS : EXT.R(1)a: COPY OF ORDER NO.CRP-6628/85 DTD 8.10.1986 ISSUED BY R2. EXT.R(1)b: COPY OF AFFIDAVIT IN WP(C) NO.21441 OF 2010 FILED BY R2 EXT.R(1)c: COPY OF ORDER NO.CRP(1)/641/12 DTD.13.2.2012 OF R2 EXT.R(1)d: COPY OF ORDER NO.CRP(1)3616/12 DTD.20.11.2012 OF R2. /TRUE COPY/ P.A.TO JUDGE cms ## A.M.SHAFFIQUE, J. ---------------------------------W.P(C) No.10646 OF 2012 ---------------------------------- Dated this the 1[st] day of March, 2013 ## JUDGMENT The writ petition is filed for a direction to the first respondent to include the names of petitioners in Ext.P16 seniority list in the appropriate dates depending upon their date of joining service. The factual circumstance involved in the case would disclose that the first petitioner was appointed as Peon on 13.9.2006 and the second petitioner as Peon on 18.9.2006 in the first respondent Bank. The probation as declared and they were also enrolled in the P.F and Co-operative Employees Pension Scheme. 2. Pursuant to an audit objection dated 31.10.2009 as Ext.P6, stating that the posts were not sanctioned by the Registrar, the first respondent discontinued to pay salary to the second petitioner. Ext.P7 is the said order. 3. It is said that the second petitioner preferred writ petition W.P.(C) No.19450 of 2010 challenging the non payment of salary and an interim order was passed by this Court staying Exts.P6 and P7. The said writ petition is still pending consideration. W.P(C) No.10646 OF 2012 2 4. The petitioners points out that their right to get promotion is affected on account of them not being in the seniority list. It is pointed out that the 4[th] respondent was originally appointed as a salesman on 2.7.2001 in the turn of one Kamalasanan who was dismissed from service. However, the Labour Court directed Kamalasanan to be reinstated. Mr.Kamalasanan retired from service on 30.6.2006. Thereafter, the 4[th] respondent was re-appointed on 22.1.2010 with effect from 8.7.2009 on account of the retirement vacancy of Sri.Kamalasanan. According to the petitioners, the continued service of the 4[th] respondent commenced from 22.1.2010. When Ext.P16 seniority list is prepared, the names of petitioners did not find a place and according to them, it is on account of the audit objection, Ext.P6. Though the petitioners submitted Exts.P17 and P18 representations to change the seniority list, by Ext.P19 the seniority list was confirmed. According to the petitioners, this was done to promote the 4[th] respondent as clerk from the post of salesman. Ext.P20 is the decision taken by the Bank to promote the 4[th] respondent as clerk. 5. The main contention raised by the petitioner is that, as W.P(C) No.10646 OF 2012 3 per the Classification, the Bank is in Class IV and in terms of Appendix III, they were entitled to appoint two Peons. Therefore, the audit objection Ext.P6 which indicates that prior sanction is required from the Registrar, Co-operative Societies for appointment is bad in law. Reference is made to the Division Bench judgment of this Court in **Elambal Service Co-operative Bank Ltd. v. Government of Kerala** ( **2000(3) KLT 389)** wherein this Court having taken into consideration the position of law as on the said date opined that when the staff pattern is fixed by the rule itself, the Society is free to appoint staff as per the staff pattern fixed in Appendix III if the appointment is made according to the type and Class to which the Society belongs. 6. The respondent Bank has filed a counter affidavit inter alia contending that the respondent is Classified as Class V Society as per Appendix III to Rule 188 of the Kerala Cooperative Society Rules 1969 (hereinafter referred to as the Rule) read with Section 80 of the Co-operative Societies Act, 1969 (hereinafter referred to as the Act). This Classification was made by the second respondent as per order dated 8.10.1986. W.P(C) No.10646 OF 2012 4 As per the said Classification only one attender/Peon was possible. The Bank worked in Class-V with the said staff pattern up to 31.3.2000. Thereafter, Ext.P1 resolution dated 4.1.2001 was passed, and it was decided to reclassify the Bank as Class IV. Pursuant to the said decision, the Bank requested the second respondent to issue approval for appointment of three clerks and two Peons. According to them, no further appointments were made based on the said request. Subsequently based on Ext.P3 notification, Exts.P4 and P5 appointment orders were issued to the petitioners on the respective dates of appointment. It is based on the audit objection alleging that the appointment of the petitioners is not in accordance with the provisions of the Act and Rules, their names were not entered into the seniority list. As per the audit objection, it is stated that the Classification of the Society of the Bank from Class V to Class IV is not approved. 7. Reference is also made to the affidavit filed by the Government in W.P.(C).No.21441 of 2010 which is produced as Ext.R1(b), wherein paragraph 5 and 6 reads as under: “5. As per Appendix III of Act and Rule and the Classification norms the Bank can appoint the following staff in Class IV: W.P(C) No.10646 OF 2012 5 |Secretary|1| |---|---| |Accountant|1| |Senior Clerk|1| |Attender|1| |Peon|1| And also if the working capital of the Bank exceeding 14 crores the Bank can appoint one additional peon if they achieved the Classification norms relating to Class IV Bank. Eventhough the Bank has sought the change of Classification from Class V, the above Bank has not achieved all the conditions mentioned in the norms and Appendix III i.e, percentage of overdue under loan should not exceed 30%. Overdue of the Bank is 34.77% & 31.16. 6. From the above it is clear that the resolution No.350 dated 4.1.2001 of the managing committee of the Bank is not in accordance with the Classification norms and Appendix III of the Act and Rules prevailed in that period. Another condition mentioned in the above norms is bank can appoint additional staff only with the prior permission obtained from the Department. But the Bank appointed one additional peon without the permission of the department and not yet obtained the sanction from the Department.” 8. Therefore, according to the Bank, since the Government has taken a view that the Bank had not achieved all the conditions mentioned in the norms for changing the Classification to Class-IV, as far as the Bank is concerned it can W.P(C) No.10646 OF 2012 6 only accept the said findings of the Department. 9. The short question that arises for consideration in this writ petition is regarding the Classification of the Bank as on the date when the petitioners were appointed to the post of Peon. According to the respondent Bank, though a decision was taken by the Managing Committee to Classify the Bank as Class IV, the same had not been approved by the Registrar. This is the same contention urged by the Government and as evident from Ext.P6. But the fact remains that, when the Bank took a decision to reclassify them as Class IV as evident from Ext.P22, there was no provision by which the Bank was liable to get the permission or approval from the Registrar to reclassify them from one Class to the other Class. It was purely within the discretion of the Managing Committee to Classify them depending upon the parameters specified under the Rules. However, it is a different question if the auditors had come to a conclusion that the Bank was not entitled to get the reclassification as has been done by them in terms of Ext.P22. It is admitted that the Managing Committee had taken a decision to reclassify the Bank as Class-IV. The said Classification is not found to be incorrect in W.P(C) No.10646 OF 2012 7 any manner by the auditor in Ext.P6. The only reason stated by the auditor in Ext.P6 as far as the appointment of the staff is concerned is that prior approval was not obtained from the competent authority. In fact as held by the judgment of the Division Bench in Elambal SCB's case (supra), no such permission was required as it was open for the Society to appoint persons as per the staff pattern provided under Appendix III. No doubt, there is a change in the Rules by way of an amendment which had come into force in 2004. Therefore, as on 2004 when the amendment had come into force, the Bank was already Classified under Class IV. That being the situation, the Division Bench judgment squarely applies to the factual situation involved in the case and therefore, the appointment of the petitioners cannot be found to be illegal in any manner. 10. Though a contention has been urged by the learned counsel for the respondent Bank that the Bank is now permitted to be Classified under Class III, the said factual situation may not affect the rights of the petitioners since the petitioners are already appointed when the posts were available as per Appendix III to the Rules. In that view of the matter, this writ petition is to W.P(C) No.10646 OF 2012 8 be allowed directing the first respondent Bank to include the petitioners in the seniority list taking into consideration their appointment with effect from 13.9.2006 and 8.9.2006 respectively. Consequently, the petitioners are entitled for promotion as per the prescribed procedure. This may be done within a period of two months from the date of receipt of a copy of this judgment. A.M.SHAFFIQUE, JUDGE. cms