WA.No.463 of 2014 IN WP(C).23962/2012

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN TUESDAY, THE 25TH DAY OF MARCH 2014/4TH CHAITHRA, 1936 WA.No.463 of 2014 IN WP(C).23962/2012 ------------------------------------------AGAINST THE ORDER/JUDGMENT IN WP(C) 23962/2012 of HIGH COURT OF KERALA DATED 07-03-2014 ## APPELLANTS : RESPONDENTS 1 AND 4 : --------------------------------- 1. THE DISTRICT CO-OPERATIVE BANK, KOTTAYAM, REPRESENTED BY THE GENERAL MANAGER, DISTRICT CO-OPERATIVE BANK, H.O.POST BOX No.140, KOTTAYAM-686 001. ## 2. THE ADMINISTRATOR, DISTRICT CO-OPERATIVE BANK, KOTTAYAM-686 001. BY ADV. SRI.GEORGE POONTHOTTAM ## RESPONDENTS : PETITIONERS & RESPONDENTS 2 & 3 : -------------------------------------------- ## 1. SMITHA A.S., W/O.RATNAKARAN, H.No.12/1391, PANAYAPPILLY, KOCHI-682 002. ## 2. SABEENA BEEGUM M. W/O.NAZAR, NADAKAMALIL HOUSE, POOZHIKOL P.O., KADUTHURUTHY, KOTTAYAM-686 604. 3. KERALA PUBLIC SERVICE COMMISSION, REPRESENTED BY THE SECRETARY, KERALA PUBLIC SERVICE COMMISSION, PATTOM, THIRUVANANTHAPURAM-695 004. ## 4. THE DISTIRCT OFFICER, KERALA PUBLIC SERVICE COMMISSION, DISTRICT OFFICE, KOTTAYAM-686 001. R1 & R2 BY ADV. SRI.KALEESWARAM RAJ BY SRI.P.C.SASIDHARAN, SC, KPSC THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 25-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **ANTONY DOMINIC & ANIL K.NARENDRAN, JJ. -------------------------------------------------------------------W.A.No.463 of 2014 -------------------------------------------------------------------Dated this the 25[th] day of March, 2014** ## **JUDGMENT** ## **ANTONY DOMINIC, J.** The Writ Appeal is filed by respondents 1 and 4 in W.P. (C)No.23962 of 2012. Respondents 1 and 2 herein are the petitioners in the Writ Petition. 2. The first appellant is a District Co-operative Bank. As at present, the cadre strength of clerk/cashier in the Bank is 124 and only 81 vacancies are filled up. Of the remaining 43 vacancies, the first appellant is awaiting advice in respect of 29. There are further 14 vacancies and the dispute in this litigation is in relation to those vacancies. 3. There is a valid ranked list prepared by the Public Service Commission, a copy of which is Ext.P1. In that ranked list respondents 1 and 2 are included as Rank Nos.45 and 97. Respondents 1 and 2 filed the Writ Petition alleging that despite the existence of 14 vacancies, the same were not W.A.No.463 of 2014 2 reported to the Public Service Commission. According to them, list is to expire on 31/3/2014 and that therefore the appellants should report those vacancies. By the impugned judgment the learned Single Judge found that 14 vacancies are in existence and on that basis directed the appellants to report the substantive vacancies as expeditiously as possible so as to reach the 3[rd] respondent before 31/3/2014. It is this judgment which is under challenge before us. 4. We heard the counsel for the appellants and also the learned counsel appearing for respondents 1 and 2 and the learned Standing Counsel for respondents 3 and 4. 5. The first contention raised by the learned counsel for the appellants is that, at the instance of the Government and the Registrar the bank has given advance to certain institutions and that those accounts are now non-performing assets and that as a result the bank is running on loss. Therefore the bank has decided not to report the 14 vacancies claimed by respondents 1 and 2. The relevant averments in paragraph 2 of the appeal memorandum reads thus:- W.A.No.463 of 2014 3 “The appellant bank is presently running on heavy loss as a result of the advance of loan given at the instance of the Government and the Registrar in favour of RUBCO another State level Co-operative institution, to tide over the financial crisis of Elamkulam Service Co-operative Bank Ltd., KSRTC Employees Cooperative Society and Priyadarsini Cooperative Spinning Mill. From the four said transactions there is an overdue of around Rs.44 crores, which are now classified as a non performing asset.” As far as this contention now urged before us is concerned, as rightly pointed out by the learned counsel for respondents 1 and 2, even if what is stated is factually correct, such a contention was not urged or pleaded before the learned Single Judge. In such circumstances, this Court will not be justified in entertaining such a factual contention raised for the first time in the appeal. Therefore, we decline to entertain this contention now urged by the learned counsel for the appellant. 6. The second contention that is urged by the learned counsel for the appellants is that in terms of Rule 185(2) of the Co-operative Societies Rules, 25% of the posts in the cadre of W.A.No.463 of 2014 4 Branch Manager are to be filled up by direct recruitment. According to him, out of 59 posts of Branch Manager that were sanctioned, 14 posts were filled up by direct recruitment. It is stated that in terms of Section 80(3)(A) of the Co-operative Societies Act, these 14 vacancies were reported to the Public Service Commission and advice of suitable candidates is awaited. It is stated that in the meanwhile, since the functioning of the bank was affected on account of dearth of employees in the cadre of Branch Manager, the posts were filled up by provisional promotion from the category of Senior Accountants which posts were again filled up provisionally from among Clerk/Cashier. 7. It is stated that when Public Service Commission advises candidates to the 14 vacancies, necessarily those who are occupying those 14 posts, will face reversion to the posts of Senior Accountant and those occupying the post of Junior Accountant will be reversed to the post of Clerk/Cashier. Therefore, according to him, even if fresh candidates are appointed from the ranked list of the Public Service W.A.No.463 of 2014 5 Commission, they will have to be retrenched, when the reversions takes place. In view of the above, according to the learned counsel, the bank has decided not to fill up the vacancies for the present. 8. However the learned counsel for respondents 1 and 2 submitted that, as long as substantive vacancies as defined in Rule 5 of the General Rules of KS and SSR are in existence the bank is obliged to fill up those vacancies. According to him, the reason now assigned by the bank to avoid reporting the vacancies before the expiry of the Ranked List is not valid or bonafide. He therefore contended that the bank is liable to report those vacancies. Counsel also placed reliance on the Apex Court judgment in **Asha Kaul & another Vs. State of Jammu & Kashmir & others** [(1993) 2 SCC 573] and in particular paragraph 8 thereof. 9. In the judgment relied on by the learned counsel for respondents 1 and 2 it has been held thus in paragraph 8 :- “It is true that mere inclusion in the select list does not confer upon the candidates W.A.No.463 of 2014 6 included therein an indefeasible right to appointment (State of Haryana v. Subhash Chander Marwaha; Mani Subrat Jain v. State of Haryana; State of Kerala v. A.Lakshmikutty) but that is only one aspect of the matter. The other aspect is the obligation of the Government to act fairly. The whole exercise cannot be reduced to a farce. Having sent a requisition/request to the Commission to select a particular number of candidates for a particular category, - in pursuance of which the Commission issues a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the Government- the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment. We do not think that any Government can adopt such a stand with any justification today. This aspect has been dealt with by a Constitution Bench of this Court in Shankarsan Dash v. Union of India where the earlier decisions of this Court are also noted. The following observations of the Court are apposite: (SCC pp.50-51, para 7) “It is not correct to say that if a number of vacancies are notified for appointment and W.A.No.463 of 2014 7 adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied. Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post. Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies. However, it does not mean that the State has the licence of acting in an arbitrary manner. The decision not to fill up the vacancies has to be taken bona fide for appropriate reasons. And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted. This correct position has been consistently followed by this Court, and we do not find any W.A.No.463 of 2014 8 discordant note in the decisions in State of Haryana v. Subhash Chander Marwaha, Neelima Shangla v. State of Haryana or Jatendra Kumar v. State of Punjab.” Reading of the above paragraph shows that when the Public Service Commission has completed the process of selection and has prepared a Ranked List it is not open to the appointing authority to refuse appointment at its whims and fancies. But if the appointing authority has taken a bonafide decision for appropriate reasons not to fill up the vacancies, a candidate whose name is included in the Ranked List cannot compel an unwilling employer to fill up the vacancies by appointing candidates from the Ranked List. Therefore the question is whether the decision taken by the Bank not to report the vacancies to the PSC is a bonafide one or is a malafide one taken on extraneous considerations. 10. Insofar as this case is concerned, it cannot be disputed that 14 persons who were promoted provisionally to the posts of Branch Manager are occupying posts which are W.A.No.463 of 2014 9 earmarked to the direct recruitment quota. Therefore even if at a later point of time, as and when the Public Service Commission advise candidates, reversion is inevitable and it will have a chain effect. When reversion takes place there will be no place to accommodate the candidates from the ranked list to the 14 vacancies of clerk/cashier. In this background, if the employer bank has taken a conscious decision not to report the vacancies, such a decision in our view, cannot be said to be a malafide decision. It is true that the respondents contended that if such a contingency arises the excess hands can be retrenched in terms of the provisions contained in the Industrial Disputes Act. Though such a course may be open to the employer, according to us, it is for the employer to decide whether appointment should be made and since the employer has the freedom to take a bonafide decision not to fill up the vacancies, the option of the retrenchment available to the employer cannot be a justification for this Court to force the employer to make appointment as suggested by respondents 1 and 2. W.A.No.463 of 2014 10 11. Relying on Exts.P6 and P7, two newspaper reports, learned counsel for respondents 1 and 2 contended that posts are being filled up from other sources ignoring the ranked list made available by the Public Service Commission. However the learned counsel for the appellants answered this contention by referring to the averments in ground-A in the appeal memorandum. The relevant portion of this reads thus:- “Appointment in the Bank otherwise on advice by the PSC was lastly made in the year 1995. Thereafter no appointment to the post of Cashier/Clerk has been resorted in the Bank by direct recruitment otherwise on advice by the PSC. There is no other employee appointed in the Bank other than through the mode as prescribed except the promotions given from among the feeder category following the ratio as contained in the recruitment rules.” On this basis he asserted that there is no appointment of any nature has been made by the bank deviating from the mandate of Section 80(3)(A) of the Act and we record the submission. W.A.No.463 of 2014 11 The result of the discussion is that the learned Single Judge was not justified in ordering the bank to report the vacancies and the judgment cannot be sustained and is set aside. The Writ Appeal is allowed. ## **ANTONY DOMINIC, JUDGE** ## **ANIL K.NARENDRAN, JUDGE** skj True copy P.A. To Judge