THE HONOURABLE CHIEF JUSTICE:

This batch consisting of thousands of cases (some writ appeals but mostly writ petitions) raise an important point of regularisation of illegal employment in several cooperative societies across the State of Tamil Nadu.

2. Hitherto, the cooperative societies and land development banks were being governed by the Tamil Nadu Cooperative Societies Act, 1961, and the Tamil Nadu Land Development Banks Act, 1934, respectively. Repealing the above two, was enacted the Tamil Nadu Cooperative Societies Act, 1983. It received the assent of the President on 15.7.1983 but was brought into force only on framing the Rules titled, ‘The Tamil Nadu Cooperative Societies Rules, 1988’ with effect from 13.4.1988. The above Act and the Rules are hereinafter referred to as the ‘Act’ and the ‘Rules” respectively. It is needless to mention that the societies and the land development banks, hitherto registered under the repealed Acts of 1961 and 1934, are deemed to be the cooperative societies under the new Act of 1983. In addition, several other cooperative societies have been registered under the Act of 1983. Rules have been framed to give effect to the Act and for internal management of societies, bye-laws have been registered with the Registrar of Cooperative Societies. The societies are formed specifying the area of operation and basing upon the same, they are defined as primary, central and apex societies. The apex society has got area of operation all over the State of Tamil Nadu, the central society over a district/part of the State of Tamil Nadu and a primary society for the local area. There are several classes and categories of societies like farming societies, dairy societies, fishery societies, housing societies, industrial societies, labour contract societies, irrigation societies, oil seeds growers’ societies, cooperative unions, cooperative training institutes, consumer societies etc. There are also some credit societies like agricultural service societies, land development bank, financial bank, urban bank, urban credit society, employees’ credit society etc, whose principal objects are to lend money to their members, by levying interest. Some cooperative societies have also undertaken the business of distribution of commodities under public distribution system. Any society which does not come under a specific category is called a miscellaneous society.

3. The cooperative societies are managed by the elected managing committees with periodical tenures, be it three or five years. During the absence of the elected bodies, the Special Officers man the same and they are from among the departmental staff. Each cooperative society was entitled to recruit staff to aid the elected bodies in the discharge of the functions of the society. Under the Madras Cooperative Societies Rules, 1963, framed under the Act of 1961, the bye-laws required to contain, among other things, (i) the age at the entry in service and for retirement on superannuation; (ii) the minimum educational and other qualifications for the several categories of employees, (iii) the method of recruitment of candidates…. There was no specific provision obligating the drawal of candidates from employment exchange. That was introduced for the first time by Rule 10 (a) of General Rules, which was inserted by an amendment and gazetted on 9.7.1980. This date 9.7.1980 assumes significance as the Government was considerate in dealing with the staff recruited in cooperative societies otherwise than by drawal from employment exchange. There is also a reasonable basis for condoning the lapse of non-drawal of the list from the employment exchange for the period upto 8.7.1980. But the recruitment of the staff in cooperative societies, without notifying the vacancies to the employment exchange and calling the list therefor, went on even after 8.7.1980. In the process, several appointees did not even satisfy the requirement of educational qualifications and