Renish John v. Melukavu Service Co-operative Bank Ltd and The Secretary, Co-operative Service Examination Board

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN** **FRIDAY, THE 22ND DAY OF JUNE 2012/1ST ASHADHA 1934** **WP(C).No. 30148 of 2011 (P) ---------------------------** **PETITIONER(S): -------------** **RENISH JOHN, VADASSERI HOUSE, MELUKAVUMATTOM P.O. KOTTAYAM DISTRICT.** **BY ADV. SRI.P.N.MOHANAN** **RESPONDENT(S):** **--------------** **1. MELUKAVU SERVICE CO-OPERATIVE BANK, LTD. NO. 3183, REPRESENTED BY PRESIDENT MELUKAVUMATTAM P.O. 686652, KOTTAYAM.** ## **2. THE SECRETARY,** **CO-OPERATIVE SERVICE EXAMINATION BOARD, 2ND FLOOR KERALA STATE CO-OPERATIVE BANK, BUILDING OVERBRIDGE JUNCTION, THIRUVANANTHAPURAM-695001.** **BY ADV. SRI.M.A.THOMAS KUTTY BY ADV. SMT.ASHA CHERIAN BY ADV. SRI.ANIL THOMAS, SC, CO.OP. SERVICE EXAMINATION BOARD BY ADV. SMT.K.V.RESHMI BY ADV. Dr GEORGE ABRAHAM** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 2206-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** kkj ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** - **P1: NOTIFICATION IN CATEGORY NO.10/09 PUBLISHED BY THE 2ND RESPONDENT.** - **P2: A TRUE COPY OF THE RANK LIST.** - **P3: A TRUE COPY OF THE LETTER DATED 29.10.2011 OF SMT.CINDU MOL. P4: A TRUE COPY OF THE COMMUNICATION DATED 29.09.2011 OF THE BANK** - **P5: A TRUE COPY OF THE DECISION REPORTED IN 2010(1) KLT 541. P6: A TRUE COPY OF THE DECISION REPORTED IN 2009(1) KLT 950** ## **RESPONDENT'S EXHIBITS:-** ## **NIL** ## **//TRUE COPY//** **PA TO JUDGE** ## **P.N.RAVINDRAN, J.** ## **-------------------------------------WP(C) No.30148 of 2011 --------------------------------------Dated this the 22[nd] day of June, 2012** ## **J U D G M E N T** By Ext.P1 notification dated 20.2.2009, the Kerala Co-operative Service Examination Board invited applications for appointment to 3 posts of Junior Clerk in the first respondent co-operative bank. Pursuant to the said notification, the petitioner and others applied. A written test was held by the Kerala Co-operative Service Examination Board and thereafter an interview was held by the Managing Committee of the first respondent co-operative bank and based on the marks obtained in the written test and the interview, Ext.P2 rank list was published by Kerala the Co-operative Service Examination Board on 13.11.2009 and the petitioner is serial No.6 therein. Ext.P2 rank list was valid for a period of two years in terms of the stipulations contained in rule 182(4)(vii) of the Kerala Co-operative Societies Rules, 1969. 2. After Ext.P2 rank list was published, the first respondent bank appointed the first three rank holders against three vacancies. Two days before the validity of the rank list expired, the instant writ petition was filed for an order directing the first respondent bank to make appointments to the post of Junior Clerk from Ext.P2 rank list WP(C) No.30148 of 2011 -2- and seeking other reliefs. It is contended that as against the sanctioned strength of 14 Junior Clerks and 5 Senior Clerks, there are only 2 Senior Clerks and 3 Junior Clerks in the service of the bank, that the said 3 Junior Clerks were appointed from Ext.P2 rank list, that 11 more posts of Junior Clerk are in existence, that in order to meet the requirements, the bank has appointed 2 Junior Clerks from the Employment Exchange, that the fourth rank holder who got employment in Kottayam District Co-operative Bank has sent Ext.P3 letter dated 29.10.2011 followed by Ext.P8 letter dated 3.11.2011 to the Secretary of the first respondent bank informing him that she need not be considered for appointment to the post of Junior Clerk in the first respondent bank, that the fifth rank holder who got appointment in Imanam Co-operative Bank is also likewise not interested in securing appointment in the first respondent bank and therefore, as 2 vacancies are in existence, the petitioner, the next eligible candidate, is entitled to be appointed as Junior Clerk. Relying on the decision of a Division Bench of this Court in **Kodakara Farmers Service Co-op. Bank Ltd** . v. **Neena** (2010 (1) KLT 541), it is contended that all vacancies that arise during the currency of the rank list prepared by the Kerala Co-operative Service Examination Board has to be filled up from the list, notwithstanding the fact that the number of vacancies notified was only 3. WP(C) No.30148 of 2011 -3- 3. The President of the first respondent bank has sworn to a counter affidavit dated 27.11.2011. It is stated that as per the approved staff pattern of the bank, the sanctioned strength of Senior Clerks is 7 and that of Junior Clerks is 5, that though the sanctioned strength of Junior Clerks is 5 the bank was functioning with 2 Junior Clerks for a long period of time, that one among the 2 Junior Clerks was promoted as Senior Clerk on 29.1.1997, that thereafter the bank was functioning with only one Junior Clerk, that the said Junior Clerk was also promoted as Senior Clerk on 23.6.2006, that after 23.6.2006 there were no Junior Clerks in the bank, that the Managing Committee of the bank that met on 23.12.2008 resolved to make appointments to 3 vacancies of Junior Clerks, that pursuant thereto, 3 vacancies of Junior Clerk were reported to the Kerala Co-operative Service Examination Board, that after a due process of selection, Ext.P2 rank list was finalised on 13.11.2009 and the 3 notified vacancies were filled up by appointing the candidates ranked 1[st] , 2[nd] and 3[rd] in the rank list with effect from 1.12.2009 and that with their joining duty all the notified vacancies were filled up. It is also stated that Smt. Deepa Joseph, one among the three newly appointed Junior Clerks availed maternity leave from 19.8.2011, and in that vacancy, Smt.P.B.Ushakumari, a candidate sponsored by the Employment Exchange was appointed on 6.9.2011 and that her service was WP(C) No.30148 of 2011 -4- terminated when Smt.Deepa Joseph rejoined duty after maternity leave. It is also sated that Smt.Beena A.C., Peon of the bank availed leave for undergoing the Higher Diploma Course in Co-operation, that in that vacancy Smt.Sunimol K.S., a candidate sponsored by the Employment Exchange was appointed for a period of three months from 19.8.2011, that the term of appointment was over by 19.11.2011 and the service of Smt.Sunimol K.S. was terminated on that day. The first respondent has stated that the net loss of the bank is Rs.59,25,619-44, that during the current year (2011-12) the loss is expected to be much higher, mainly on account of implementation of pay revision order, that prior to implementation of pay revision order the sum of Rs.5,18,186-00 was sufficient to meet the expenses for payment of salary to the employees every month, that after the implementation of the pay revision order the sum of Rs.6,50,708-00 is required for payment of salary to employees, that the additional amount required for payment of salary every year is Rs.15,90,264/-, that as the bank was not in a position to pay arrears of salary consequent on pay revision with effect from 1.7.2009, the employees agreed to forgo arrears of salary for 11 months, that notwithstanding that the bank has to pay the sum of Rs.10,13,367/- by way of arrears of salary, that about Rs.55 lakhs is payable to the Life Insurance Corporation of India towards premium payable under the Group WP(C) No.30148 of 2011 -5- Gratuity Assurance Scheme and therefore, the bank cannot afford to make any further appointment. It is stated that such being the situation, though the sanctioned strength of Junior Clerk is 5, it is not imperative that the bank should make appointments to all the sanctioned posts and that the present financial position of the bank does not permit any further appointment to be made. It is also stated that the total sanctioned strength of all categories of employees is 29, that 22 persons are presently in service and that the bank can manage its affairs with the existing staff. 4. The petitioner has filed a reply affidavit dated 8.12.2011, wherein, relying on Ext.P7 report for the years 2007-08, 2008-09, 2009-10, and 2010-11, it is contended that the bank was running at a loss only during the years 1999-00, 2001-02, 2007-08, and 2008-09, that during the years 2009-10 and 2010-11, it was running at a profit, that the profit earned by the bank during the year 2009-10 is Rs.19,03,531/- and during the year 2010-11 is Rs.46,52,235/-, and therefore, there is no basis for the contention raised in the counter affidavit produced by the first respondent that the bank is running at a loss. The petitioner has also contended relying on the report submitted by the Managing Committee of the first respondent bank that the bank which is not running at a loss cannot contend that its financial position does not permit further appointments to be made. The President of the WP(C) No.30148 of 2011 -6- first respondent bank has sworn to an additional counter affidavit dated 18.12.2011. It is contended that though the bank had made a profit during the year 2009-10 and 2010-11, the profit earned has to be set off against the loss incurred in the previous two years namely 2007-08 and 2008-09, that the accounts for the years 2009-10 and 2010-11 have not been audited and that the question whether the bank has made a profit or suffered a loss will be known only after the audit is over. In paragraph 10 of the additional counter affidavit the bank has reiterated the stand taken in the first counter affidavit that on account of pay revision it has incurred an additional expenditure of Rs.15,90,264/- per year, and that its financial position does not permit any further appointment to be made. Pursuant to the order passed by this Court, the first respondent bank has produced along with the affidavit dated 6.2.2012 a copy of the resolution adopted by its Managing Committee on 23.12.2008 and resolution Nos.457 and 458 adopted by it on 13.11.2009. 5. I heard Sri.P.N.Mohanan, learned counsel appearing for the petitioner, Sri.M.A.Thomaskutty, learned counsel appearing for the first respondent bank and Smt. P.V.Reshmi, learned standing counsel appearing for Kerala Co-operative Service Examination Board. Sri.P.N.Mohanan, learned counsel appearing for the petitioner contended that as the approved staff strength of Junior Clerks is 5 and WP(C) No.30148 of 2011 -7- the bank had made a profit during the year 2009-10 and 2010-11 after the rank list was published, the bank which has not taken a conscious decision that all the sanctioned posts of Junior Clerk need not be filled up, cannot be heard to contend that its financial position does not permit it to make further appointments. The learned counsel also placed reliance on the unreported decision of this Court in W.P.(C) No.1527 of 2011 in support of the said contention. Relying on the decision of the Division Bench of this Court in **Kodakara Farmers Service Co-op. Bank Ltd.** v. **Neena** (2010 (1) KLT 541), the learned counsel contended that the mere fact that only 3 vacancies were notified is not a reason to limit the appointments to 3 and that the bank is bound to fill up all the vacancies which arise during the currency of Ext.P2 rank list by appointing candidates from that list. 6. Per contra, Sri.M.A.Thomaskutty, learned counsel appearing for the first respondent bank contended that notwithstanding the fact that the sanctioned strength of Junior Clerks is 5 and no Junior Clerk is in service in the bank after 23.6.2006, the Managing Committee of the bank that met on 23.12.2008 resolved to fill up only three posts of Junior Clerk and that decision, a copy of which is on record as Ext.R1 (a), has to be reckoned as a conscious decision taken by the bank to limit the number of appointments to 3. The learned counsel appearing for the bank invited my attention to resolution No.457 dated WP(C) No.30148 of 2011 -8- 13.11.2009 by which the Managing Committee resolved to publish the rank list approved by the Kerala State Co-operative Service Examination Board and resolution No.458 dated 13.11.2009 by which the Managing Committee resolved to fill up 3 notified vacancies of Junior Clerk by appointing the first three candidates from Ext.P2 rank list and contended that as the bank had taken a conscious decision to fill up only 3 vacancies, the mere fact that the rank list was valid for a period of two years and 2 vacancies were in existence, is not a reason to hold that the petitioner is entitled to be appointed against the vacancies. Relying on the decision of a learned single Judge of this Court in **Mohanan** v. **State of Kerala** (2010 (3) KLJ 10) which was affirmed by the Division Bench in W.A.No.1881 of 2010, the learned counsel appearing for the first respondent bank contended that the loss incurred by the bank is a relevant factor to be taken into account to decide whether it can be make appointments to posts that remain vacant and therefore for that reason also, the petitioner cannot compel the bank to fill up the vacancies of Junior Clerk. Relying on the decision of the Apex Court in **S.S.Balu and another** v. **State of Kerala and others** (2009 (2) SCC 479), the learned counsel appearing for the first respondent bank contended that the petitioner has no legal right to be appointed merely for the reason that his name appears in the rank list and the bank has the right to fill up or not to WP(C) No.30148 of 2011 -9- fill up the vacancies, and for those reasons also, the reliefs prayed for by the petitioner cannot be granted. 7. I have considered the submissions made at the Bar by learned counsel on either side. I have also gone through the pleadings and the materials on record. The fact that the sanctioned strength of Junior Clerks in the first respondent bank is 5 is not in dispute. The bank has positively averred that though the sanctioned strength of Junior Clerks is 5, it was managing its affairs with 2 Junior Clerks till 29.1.1997. When one among the two Junior Clerks was promoted to the category of Senior Clerk, it was managing with one Junior Clerk till 23.6.2006. The lone Junior Clerk was also promoted to the post of Senior Clerk on 23.6.2006 and thereafter there was no Junior Clerk in the service of the bank. These averements have not been disputed by the petitioner or proved to be incorrect. Since both the Junior Clerks in the service of the bank became Senior Clerks by 23.6.2006, the bank decided to fill up 3 vacancies of Junior Clerk as per Ext.R1(a) resolution dated 23.12.2008. It is evident from said the resolution that the Managing Committee of the bank resolved to make appointments to only 3 out of the 5 sanctioned posts of Junior Clerk. From Ext.P2 rank list the first three candidates were appointed on 13.11.2009 and they joined duty on 1.12.2009. With the appointment of the first three candidates, all the notified vacancies were filled up. The main WP(C) No.30148 of 2011 -10- contention raised by the learned counsel appearing for the petitioner is that as the sanctioned strength of Junior Clerks is 5, the bank ought to have made a conscious decision not to fill up the remaining two vacancies and that having not been done, the bank cannot take shelter under the plea that its financial position does not permit it to make further appointments. It is in support of the said contention that the learned counsel appearing for the petitioner relies on the unreported decision of this Court in W.P.(C) No.1527 of 2010. 8. In that case, the approved cadre strength of Junior Clerks was eight. A notification to fill up five vacancies was issued on 5.04.2008. Thereafter, a rank list was published on 22.01.2008. From that rank list, five candidates were appointed on 27.01.2009. One among them resigned to take up employment in District Cooperative Bank. Thereafter, two out of the remaining four junior clerks who were appointed on 27.01.2009 were promoted as Senior Clerks during the currency of the rank list. Thereafter, five more candidates were appointed from the very same rank list on 5.4.2010. Thus as against the five vacancies notified, ten candidates were appointed. Out of the first five persons appointed, one resigned to take up employment elsewhere and two out of the remaining four were promoted and thereupon, five other candidates were appointed from the very same rank list. The bank resisted the writ petition filed by a WP(C) No.30148 of 2011 -11- candidate included in the rank list on the ground that as the sanctioned strength of Junior Clerks is eight any further appointment will be a surplusage and additional financial burden without any corresponding benefit to the bank. In that case that this Court held that apart from the statement in the counter affidavit that any further appointment will be a surplusage and additional financial burden to the bank without any corresponding benefit, there is no material to show that the Managing Committee of the bank had taken a conscious decision not to fill up all the vacancies of Junior Clerk. The writ petition was accordingly allowed and the petitioner was directed to be appointed against one of the two vacancies which were admittedly in existence during the currency of the rank list. 9. In the instant case, the situation is however different. It is evident from Ext.P7 report produced by the the petitioner that when the Managing Committee resolved on 23.12.2008 to fill up three vacancies of Junior Clerk (all the five sanctioned posts of Junior Clerk were lying vacant at that time), the bank was running at a loss. As per the audited balance sheet, during the year 2007-2008, the bank had suffered a loss of Rs.24,18,895/-. During the year 2008-2009 the loss went up to Rs.35,06,725/-. The Managing Committee which met on 23.12.2008 therefore resolved, to make appointments to only three out of the five sanctioned posts of Junior Clerk. In other words WP(C) No.30148 of 2011 -12- though five posts of Junior Clerk were in existence and all the posts were lying vacant, the Managing Committee took a conscious decision to fill up only a lessor number of posts than the sanctioned posts. As a matter of fact, the resolution is very clear to the effect that only three posts out of the posts sanctioned as per the approved staff pattern is to be filled up. It cannot therefore be said that the bank had not taken into account its financial position when the Managing Committee resolved to fill up only three out of the five posts. That apart, the bank has in the counter affidavit and the additional counter affidavit stated that the additional financial outlay on account of implementation of pay revision with effect from 01.07.2009 is Rs.15,90,264 per annum, that the financial outlay towards payment of arrears of salary and allowances is Rs.10,13,367/- and that the liability on that account would have gone up had it not been for the gracious gesture of the employees to forego arrears of salary and allowances for a period of 11 months. Though Ext.P7 report would show that the bank had made a profit during the years 2009-2010 and 2010-11, it is evident from Ext.P7 annual report that the accounts have not been audited and that the profit, if any, found to have been made after audit will have to be adjusted against the loss suffered by the bank in previous two years. From the materials on record it cannot therefore be said that the considerations which weighed with the Managing WP(C) No.30148 of 2011 -13- Committee when it decided to fill up only three out of the five posts of Junior Clerk were not relevant. As held by a learned Single Judge of this Court in **Mohanan** v. **State of Kerala** which was affirmed by the Division Bench in W.A.No.1881 of 2010 the financial position of a society is certainly a relevant factor to be taken account while deciding whether the society should be burdened with additional financial commitments by appointing the petitioner. The loss suffered by the society and the additional financial outlay is certainly a relevant factor which can be taken into account for the purpose of deciding whether the bank should be compelled to appoint one more candidate. I therefore find no reason to grant any of the reliefs prayed for by the petitioner. For the reasons aforesaid, I hold that there is no merit in the writ petition. The writ petition fails and is accordingly dismissed. No costs. Sd/- **P.N.RAVINDRAN, JUDGE.** Rkc/sj // true copy// PA to Judge