Smt. Sivapraba and Lal Krishna v. Joint Registrar of Co-operative Societies (G), Pathanamthitta; Pallikkal Service Co-operative Bank, Limited No.722 represented by President

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **TUESDAY, THE 19TH DAY OF JULY 2016/28TH ASHADHA, 1938** ## **WP(C).No. 8805 of 2010 (A)** ## **---------------------------** ## **PETITIONER(S):** ## **-------------** **1. SMT.SIVAPRABHA, ATTENDER, THE PALLIKKAL SERVICE CO-OPERATIVE BANK,, LIMITED NO.722, REPRESENTED BY PRESIDENT,, PAYYANALLOOR.P.O, PALLIKKAL, PATHANAMTHITTA.** ## **2. LAL KRISHNA, SALESMAN,** **THE PALLIKKAL SERVICE CO-OPERATIVE BANK,, LIMITED NO.722, REPRESENTED BY PRESIDENT,, PAYYANALLOOR.P.O, PALLIKKAL, PATHANAMTHITTA.** ## **BY ADV. SRI.P.N.MOHANAN** **RESPONDENT(S):** - **--------------** ## **1. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), PATHANAMTHITTA.** **2. THE PALLIKKAL SERVICE CO-OPERATIVE BANK, LIMITED NO.722, REPRESENTED BY PRESIDENT,, PAYYANALLOOR.P.O, PALLIKKAL, PATHANAMTHITTA.** ## **BY SR. GOVERNMENT PLEADER SRI.V.VIJULAL** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07.07.2016, THE COURT ON 19-07-2016 DELIVERED THE FOLLOWING:** **WP(C).No. 8805 of 2010 (A) ---------------------------** ## **APPENDIX** ## **PETITIONERS EXHIBITS:** **EXT.P1: TRUE COPY OF THE ORDER DATED 26.4.1980 EXT.P2: TRUE COPY OF THE ORDER DATED 16.5.1980 OF THE JOINT REGISTRAR EXT.P3: TRUE COPY OF THE ORDER DATED 10.2.1987 OF THE RESPONDENT.** **EXT.P4: TRUE COPY OF THE ORDER OF THE RESPONDENT PERMITTING THE APPOINTMENT OF THE DAUGHTER OF SIVARAMAN NAIR AS JUNIOR CLERK** **EXTS.P5& P6: TRUE COPY OF THE NOTIFICATION PUBLISHED IN CHANDRIKA AND MADHYAMAM DAILIES DATED 8.11.2008** **EXT.P7: TRUE COPY OF THE RANK LIST FOR THE POST OF ATTENDER AND SALESMAN APPROVED BY THE MANAGING COMMITTEE AS PER THEIR RESOLUTION NO.64 DATED 29.12.2008** **EXTS.P8&P9: TRUE COPY OF THE APPOINTMENT ORDERS ISSUED INFAVOUR OF THE PETITIONERS.** **EXT.P10: TRUE COPY OF THE ORDER OF THE JOINT REGISTRAR DATED 25.2.2010** ## **RESPONDENTS EXHIBITS:** **NIL** ## **//TRUE COPY//** **P.A. TO JUDGE** **dlk** ## **SHAJI P. CHALY, J.** ---------------------------- W.P.(C). No. 8805 of 2010 **----------------------------------------** Dated this the 19[th] day of July, 2016 ## **JUDGMENT** This writ petition is filed by the petitioner seeking to quash Ext.P10 order issued by the first respondent, whereby the appointment of the petitioners was cancelled under Rule 176 of the Kerala Co-operative Societies Rules (hereinafter referred to as 'the Rules'). 2. Material facts for the disposal of the writ petition are thus:- Second respondent Bank invited application for the post of one Attender and a Salesman by carrying out publication in two newspapers dated 8.11.2008, evident from Exts.P5 and P6. On the basis of a written test and interview, rank list was published, evident from Ext.P7. From the rank list, petitioners were appointed on 30.12.2008 to the post of Attender and W.P.(C). No. 8805 of 2010 2 Salesman as per Exts.P8 and P9. In the meanwhile, a show cause notice dated 27.9.2008 was issued to supersede the managing committee, according to the petitioners, due to certain political reasons in respect KLe \Í of conducting the Onam Market ( ), however said action that was stayed by this Court in W.P.(C) No.30237/2008. As the Joint Registrar failed to supersede the committee, he has taken steps to rescind the appointments of the petitioners made on 30.12.2008. After a period of one year and three months of the appointment of petitioners, Ext.P10 order is issued cancelling the appointments without hearing them. 3. That apart, it is also urged that, with respect to the employment matters even if there is no period of limitation, the Joint Registrar has no jurisdiction to rescind the resolution of the managing committee under Rule 176 of the Rules, after one year and three W.P.(C). No. 8805 of 2010 3 months. That apart it is also contended that, since the constitution of Arbitration Court , the first respondent has no power to interfere in employment matters of petitioners. Hence it is contended that, Ext.P10 order is illegal and arbitrary. 4. First respondent has filed a counter affidavit refuting the allegations, claims and demands made by petitioner. That part it is contended that, a complaint was received on 6.5.2009 by the first respondent alleging irregularities and fraud, in appointments made by the Board of Directors of the second respondent. The said complaint was forwarded to the Assistant Registrar of Co-operative Societies (General) Adoor and an enquiry report was submitted by him on 29.6.2009. It was reported that, the appointment made by the Board of Directors of the second respondent for the post of one Salesman and one Attender was illegal, since there were no sanctioned W.P.(C). No. 8805 of 2010 4 posts in the Bank and hence appointment to that post was made without any existing vacancy. Accordingly, first respondent issued show cause notice on 13.8.2009 to appear for a hearing on 8.9.2009 under Rule 176 of the Rules, to the Board of Directors of the second respondent, and to show cause why resolution passed by them on 29.12.2008 should not be rescinded under the Rules. 5. Thereupon, the second respondent filed W.P. (C) No.25822/2009 before this Court against the show cause notice and direction was issued to the first respondent to consider and pass orders on the contentions raised by the Bank. First respondent in compliance with the judgment of this Court, considered the case after hearing the former President and Bank Secretary and the newly elected President, and after examining all records issued the impugned order rescinding the resolution passed by the Board of W.P.(C). No. 8805 of 2010 5 Directors of the second respondent on 29.12.2008, in connection with irregular appointment made in the second respondent Bank. 6. It is also contended that, the first respondent is not bound to hear petitioners in the writ petition since under Rule 176 of the Rules the first respondent has proposed to rescind the resolutions of the Director Board of the second respondent and not the appointment of petitioners. Since their appointment itself is under question and the very resolution is under order of rescinding, their claims as employees itself have no relevance while considering resolution. Therefore, according to the first respondent, Ext.P10 order was issued in accordance with the directions issued by this Court in the writ petition referred (supra) and observing the principles of natural justice. 7. Heard learned counsel for petitioners, W.P.(C). No. 8805 of 2010 6 learned Government Pleader, learned counsel for the second respondent Bank and perused the pleadings and documents on record. 8. The question to be decided in this writ petition is whether any interference is required in Ext.P10 order passed by the first respondent rescinding the resolution of the second respondent Bank appointing petitioners. From Ext.P10 what is materially discernible is that, the second respondent has made appointments in violation of staff pattern provided under the Rules. Therefore, petitioners who are beneficiaries of the said appointments are not entitled to continue in service. The main contention advanced by the learned counsel for petitioners is that, consequent to introduction of Section 69 of the Kerala Co-operative Societies Act (hereinafter referred to as 'the Act') the first respondent has no manner of power to invoke Rule 176 of the Rules in respect of W.P.(C). No. 8805 of 2010 7 service matters. It is also contended by petitioners that, going by Ext.P10 order, show cause notice was issued on the basis of anonymous letter received with respect to the appointments made to the society. Therefore, according to the learned counsel, since there was a complainant, the complainant ought to have preferred a petition under Section 69 of the Act. 9. Yet another predominant contention raised by the learned counsel is with respect to the power of the Registrar under Rule 176, consequent to the introduction of Section 69 of the Arbitration Act. The contention of the counsel is that, section 69 of the Act starts with a _non obstante_ clause, and therefore, all other provisions of the Act is excluded and the sole remedy with respect to the appointment of petitioners was resorting to action under Section 69 of the Act. In this regard learned counsel has invited my attention to the judgment of this Court in **Prakasini v. Joint** W.P.(C). No. 8805 of 2010 8 **Registrar** [ 2006(1) KLT 199] wherein it was held that, Rule 176 cannot be invoked to resolve the service disputes, and after 2.1.2003, only the Arbitration Court or the Registrar can alone adjudicate the service disputes. 13. Learned counsel has also invited my attention to a Division Bench judgment of this Court in **Ravindran v. State of Kerala** [2007(3) KLT 558] wherein it was held that, any dispute arising in connection with employment of officers and servants of different classes of societies including their promotion and _inter se_ seniority is to be decided by Arbitration Court. Yet another judgment brought to my notice is **Jayarani v. Assitant Registrar of Cooperative Societies** [2016(2) KLJ 446] wherein also it was held that an employee of a society or a third party questioning any aspects with respect to the terms of service in the society, shall approach only the Co-operative Arbitration Court under Section 69 of the W.P.(C). No. 8805 of 2010 9 Act and the Registrar does not have power to adjudicate upon the service disputes in a society. 10. So also contended that, in accordance with the classification of the Bank under Appendix III, there are provisions for seven employees. That, as per Ext.P2, the Joint Registrar has sanctioned one additional post of Salesman and as per Ext.P3, one more additional post was created and thus altogether the bank had a staff pattern of nine employees. In that regard learned counsel has invited my attention to a judgment of this Court in **Elampal Co-operative Bank Ltd. v. Government of Kerala** [2000(3) KLT 389] and contended that, once a post is sanctioned, no previous approval for appoint of the staff is required. The sum and substance of the contention put forth by the learned counsel is that, since as per Exts.P2 and P3, existing staff pattern was altered and therefore, the appointment of petitioners made by the W.P.(C). No. 8805 of 2010 10 second respondent Bank is in accordance with law, and therefore, the finding of the first respondent in that regard in Ext.P10 cannot be sustained under law. 11. Yet another contention advanced by the learned counsel is that, petitioners were not heard before the resolution was rescinded and has invited my attention to a Division Bench judgment of this Court in **Purushothaman v. Registrar** [1996 (2) KLT 26] and specifically to paragraph 7 of the judgment which read thus:- “7. The ordinary Rule which regulates all procedure is that persons who are likely to be affected by the proposed action must be afforded an opportunity of being heard as to why that action should not be taken. The hearing is to be given depending upon the facts and circumstances of each situation. As observed by the Constitution Bench of the Supreme Court in _Olga Tellis v. Bombay Municipal Corporation_ (1985) 3 SCC 545, W.P.(C). No. 8805 of 2010 11 the proposition that notice need not be given of a proposed action because there can possibly be no answer to it, is contrary to the well recognised understanding of the real import of the rule of hearing. Their Lordships went on to state that it is the dialogue with the person likely to be affected by the proposed action which meets the requirement that justice must also be seen to be done. Procedural objections are often raised by unmeritorious parties. Judges may then be tempted to refuse relief on the ground that a fair hearing could have made not difference to the result. As observed by H.W.R.Wade in 7[th] Edition of Administrative Law, in principle it is vital that the procedure and the merits should be kept strictly apart, since otherwise the merits may be prejudiced unfairly. The learned authors quoted the following observation made by the Lord Wright in _General Medical Council v. Spackman_ (1943) AC 627.” ## 12. So also, learned counsel has invited my W.P.(C). No. 8805 of 2010 12 attention to the Full Bench judgment of this Court in **Aji v. State of Kerala** [1995(1) KLT 363(FB)] and canvassed the proposition that, even though the power of the Registrar is not limited only to supervise the financial dealings of the society, he cannot act in an arbitrary and capricious manner. The judgment in **Poonjar Co-operative Bank Ltd. v. State of Kerala** [2004(1) KLT SN (C.No.50)] was also pressed into service and invited my attention to the second head note which held that, after regular selection employees appointed as trainees are liable to be heard before their services are terminated. Therefore, according to the counsel since petitioners were not heard, Ext.P10 order suffers from vice of arbitrariness. 13. After evaluating the rival submissions made across the Bar, in my view the first question to be considered is whether the subject issue is to be considered by invoking Section 69 of the Act. The W.P.(C). No. 8805 of 2010 13 contention raised in that regard by petitioners is that, since the action was initiated pursuant to a complaint, the first respondent does not have power to consider the issue. However, even according to petitioners and on perusal of the impugned order, what is discernible is, the complaint received is an anonymous one and therefore, it is clear that, the complainant was not ready and willing to raise any dispute with respect to the employment of petitioners by invoking section 69 of the Act. First respondent, who is a statutory authority, no doubt, cannot invoke Section 69 challenging the appointment of petitioners. Merely because, a third party or any other employees of the society have not challenged the appoint of petitioners, that will not stand in the way of considering illegal appointments by the first respondent invoking powers under Rule 176 of the Rules. That apart, if there is an illegal appointment and none of the members of the W.P.(C). No. 8805 of 2010 14 society or any other employees of the society are not challenging it that will be enabling the society to continue its illegal action, and which will also lead to many anomalous situations. Therefore, in my considered opinion, the Registrar was vested with enough power to invoke Rule 176 of the Rules and in that regard Ext.P10 order passed by the Registrar cannot be said to be bad and illegal. 14. So far as the staff pattern of the society is concerned, eventhough petitioners have a case that the society has appointed petitioners in accordance with staff pattern, first respondent after verifying the fact situations and staff pattern provided under Appendix III has arrived at a conclusive finding. The same is a factual circumstance considered by the first respondent taking note of the factual situations with respect to vacancies and the staff pattern of the second respondent society. Therefore, I do not find W.P.(C). No. 8805 of 2010 15 any illegality in that regard, to interfere with the said factual finding entered by the Registrar. 15. So far as the third issue is concerned, whether petitioners were entitled for personal hearing before their services were terminated, true, under Rule 176 of the Rules, first respondent is considering the question of rescinding a resolution taken by a society. However, the said resolution was one affecting the appointment of petitioners in the society as per selection made after issuing notification. Therefore, petitioners who were appointed to lower category of posts may not have been conscious enough with respect to the staff pattern and the power of the second respondent to appoint such persons etc. etc. Petitioners have submitted their applications, appeared for the examination and the interview and depended fully on the notification issued by the society. Therefore, petitioners can only be termed to 16 W.P.(C). No. 8805 of 2010 be innocent in the matter of appointment, and therefore, before any adverse orders are passed, in my considered opinion, an opportunity should have been provided to contest the proceedings. So are the proposition laid down in the judgments of this Court referred (supra). In that view of the matter I think interference with Ext.P10 order passed by the first respondent is required. Therefore, I set aside Ext.P10 order to the extent the same has not provided an opportunity of hearing to petitioners. 16. Therefore, there will be a direction to the first respondent to re-consider the resolution with respect to the appointment of petitioners after providing an opportunity of hearing to petitioners and the respondent Society and take a decision on the same, in accordance with law, within two months from the date of receipt of a copy of this judgment untramelled by the observations with respect to the W.P.(C). No. 8805 of 2010 17 staff pattern and vacancies. 17. From the proceedings I find that, on 22.3.2010, this Court has stayed the operation of Ext.P10 order, and therefore, the interim order passed will continue, till a decision is taken by the first respondent as directed above. Writ petition is disposed of accordingly. Sd/- ## **SHAJI P. CHALY, JUDGE** dlk/13/7/