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1992 Supreme(Ker) 154
Judges : VISWANATHA IYER
Parameswaran Kartha - Appellant
Versus
Asst.Registrar - Respondent
Case No : O.P.Nos. 985,3154 & 1434of 1992.
Decided On : 06/24/1992
Advocates Appeared :
M. Ramachandran, A. Jayasankar, Paulson C. Varghese & P. Ramakrishnan For Petitioners Govt. Pleader (V. Bhaskara Menon) For Respondents
The main legal point established in the judgment is that re-classification of a society does not require the approval of the Registrar or Government, but increase in the existing strength of the staff does require the approval of the Registrar and appointment of additional staff appropriate for the upgraded class can be made after such approval for the increase is obtained.
Headnote:
Co-operative Society - Reclassification of Society - Kerala Co-operative Societies Act, 1969 - S.80, R.182, R.188, R.189 - The court discussed the prerogative of the society to place itself in the proper classification and to appoint and pay the staff appropriately for that classification. It concluded that re-classification of a society does not require the approval of the Registrar or Government, but increase in the existing strength of the staff does require the approval of the Registrar and appointment of additional staff appropriate for the upgraded class can be made after such approval for the increase is obtained. On up gradation, the existing staff has to be paid at the scales of pay applicable to the higher class.
Fact of the Case:
The petitioners, employees of various co-operative societies, challenged the orders rejecting the resolutions passed by the managing committees to upgrade the societies to a higher class and to pay salary accordingly to the members of its staff.
Finding of the Court:
The court found that re-classification of a society does not require the approval of the Registrar or Government, but increase in the existing strength of the staff does require the approval of the Registrar and appointment of additional staff appropriate for the upgraded class can be made after such approval for the increase is obtained. On up gradation, the existing staff has to be paid at the scales of pay applicable to the higher class.
Issues: The main issue was whether the reclassification of the societies and the payment of enhanced salary and grant of promotions to the employees consequent thereon required the prior approval of the Registrar.
Ratio Decidendi: The court held that re-classification of a society does not require the approval of the Registrar or Government, but increase in the existing strength of the staff does require the approval of the Registrar and appointment of additional staff appropriate for the upgraded class can be made after such approval for the increase is obtained. On up gradation, the existing staff has to be paid at the scales of pay applicable to the higher class.
Final Decision: The orders impugned in these cases were quashed, and the appropriate respondent was directed to pass orders on the question of increase in the staff strength in the light of the court's observations. The original petitions were allowed with no costs.
The petitioner in O.P.No.985 of 1992 is a Senior Clerk in the second respondent society, which is a credit society registered under the Kerala Co-operative Societies Act, 1969 (the act). The society had been classified in class IV of Appendix III to the Kerala Co-operative Societies Rules, 1969 (The rules) though the increase in its working capital and outstandings justified a higher classification. The managing committee of the society passed resolution Ext.P1 on 30-5-1991, resolving to upgrade the society to class III and to pay salary accordingly to the members of its staff. This was duly intimated to the first respondent, Assistant Registrar. But he informed the society by his communication Ext.P2 dated 7-11-1991 that as per the extant orders of the Government, no reclassification of any society was permissible, and that it was not proper to pay the employees, the salary admissible for a society included in class III. The petitioner who is an employee of the society and who is affected by Ext.P2 has challenged it by filing the original petition.
2. O.P.No. 1436 of 1992 is by a Co-operative Bank. Its working capital and the outs landings entitled it to be included in Class II of Appendix III. But it had been included only in Class III. The managing committee passed resolution Ext.P3 on 25-2-1991 to upgrade the classification to Class II. However, the second respondent, the Assistant Registrar of Co-operative Societies informed the petitioner by his proceedings dated 1-11-1991 that the reclassification, and the payment of enhanced salary and grant of promotions to the employees consequent thereon without the approval of the Joint Registrar were irregular. Accordingly he directed the petitioner to cancel the reclassification, and the promotions, and to take steps to recover the excess amounts paid to the employees. Petitioner challenges this order, which has been extracted in paragraph 3 of the original petition. (Ext.P4 produced as a copy of this order is really some other communication, which has nothing to do with this case).
3. A counter affidavit has been filed on behalf of the respondents, in which, while admitting that it is for the managing committee of the society to decide on the classification, it is contended that the reclassification can be brought into effect only with the prior approval of the Registrar. That was why the communication dated 1-11-1991 was issued. Norms for classification have been laid down by various circulars of the Registrar. Since the reclassification involves revision of pay and increase in the number of staff, the Registrar has to be satisfied about the achievement of the norms by the society before giving approval for the reclassification. It is his duty to see that the reclassification does not affect the working of the society adversely.
4. O.P.No.3154 of 1992 is filed by an employee of the second respondent Cooperative Society in similar circumstances as in O.P.No.985 of 1992. Here again the resolution passed by the managing committee to upgrade the society to class III was rejected by the order Ext.P1 on various grounds. It was pointed out that the additional expenditure on establishment consequent on the reclassification will be Rs.22, 086.30, which is detrimental to the shareholders. Government was taking steps to change the norms prescribed for classification and they were yet to be finalised. The reclassification sought could not be granted for these reasons. Petitioner challenges Ext.P1.
5. In all the cases, the contention of the petitioners is that as per S.80 read with rules 182 and 188, and Annexure III to the Rules, it is the prerogative of the society to place it in the proper classification, and to appoint and pay the staff appropriately for that classification. The contention is that no prior approval of the Registrar is required for effecting such a change.
6. Government Pleader on the other hand, submits that though the re-classification may be done by the society
