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2025 Supreme(Telangana) 72
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
T.MADHAVI DEVI, J.
Gujja Rajavardhan Reddy and others - Appellant
Versus
The State of Telangana and others - Respondent
W.P.Nos. 428, 1686, 6884 & 4309 Of 2023
Decided On : 09-06-2025
Advocate Appeared:
For the Appellant : G V SHIVAJI
For the Respondent:ADDL ADVOCATE GENERAL
The court affirmed that the autonomy of Primary Agricultural Cooperative Societies under Section 115(D) of the Telangana Cooperative Societies Act cannot be infringed without proper guidelines from NABARD and must respect principles of natural justice.
Headnote:(A) Telangana Cooperative Societies Act, 1964 - Sections 115
(C), 115
(D), 116
(C), and 131 - Government Order No.44 dated 17.12.2022 challenged for violating autonomy of Primary Agricultural Cooperative Societies (PACS) and procedural fairness - Petitioners argue G.O. undermines PACS autonomy under Section 115
(D) and lacks proper guidelines from NABARD - Court finds G.O. not based on mandatory guidelines, thus violating natural justice principles. (Paras 1-20)
(B) Autonomy of PACS - The court emphasized the statutory autonomy granted to PACS, subject only to guidelines from RBI/NABARD, which were not properly established in this case. (Paras 16-18)
(C) Procedural Fairness - The court noted that affected parties were not given a sufficient opportunity to represent their views before the issuance of the G.O., violating principles of natural justice. (Paras 18-20)
Facts of the case:
Employees of various PACS in Telangana challenged G.O.Ms.No.44, claiming it undermines their autonomy and violates the Cooperative Societies Act by centralizing staffing decisions.
Findings of Court:
The G.O. was set aside due to lack of proper guidelines from NABARD and failure to provide affected parties a chance to be heard.
Issues: Whether G.O.Ms.No.44 violated the autonomy of PACS as per Section 115
(D) and whether it was issued without affording due process to affected parties.
Ratio Decidendi: The court ruled that G.O.Ms.No.44 was invalid as it did not follow the mandatory guidelines required under the Act and did not provide affected employees with an opportunity to respond.
Result: G.O.Ms.No.44 set aside.
ORDER :
W.P.Nos.428, 1686 & 6884 of 2023:
In all these writ petitions, the petitioners are employees working in various Primary Agricultural Co-operative Societies (PACS) located the Districts of Mahaboobnagar, Ranga Reddy, Nagarkurnool, Siddipet and Narayanpet. The petitioners are working as Chief Executive Officers, Staff Assistance and Clerks, etc. The Government of Telangana has issued G.O.Ms.No.44, Agriculture and Co-operation (Coop-II) Department, dated 17.12.2022 issuing guidelines in the name of uniform Human Resource (HR) Policy for Primary Agricultural Cooperative Societies (PACS) employees, whereunder the Primary Agricultural Cooperative Societies (PACS) have been categorized into A, B, C and D Categories basing on the business level of the respective societies and further mentioned permitted staff structure in respect of the PACS. The said G.O., further imposed restrictions over the powers of PACS in appointment of staff and payment of salaries etc., and separate committees called State Level Committee (SLC) and District Level Committee (DLC) were formed for the said purpose. The above G.O., is thus challenged on the ground that it vitiates the provisions of Section 115(D) of Telangana Cooperative Societies Act , the petitioners have filed the present writ petitions claiming that G.O.Ms.No.44, dated 17.12.2022 is issued in violation of powers vested under Section 131 of Cooperative Societies Act. In addition to the averments made in the respective writ petitions, the learned senior counsel appearing for the petitioners has advanced to the following written arguments:
(i) It is submitted that as per Section 115-D of Telangana Co-operative Societies Act, the Primary Agriculture Co- operative Society are having autonomous status, subject to any guidelines issued by the NABARD/RBI. It is submitted that after enactment of above provision 115-C and 115-D, by way of amendment, vide Act No.16/2007, as all the Primary Agriculture Co-operative Society were under financial bankruptcy, the Government of India announced a package for revival of Co- operative Credit structure, aiming to bring the Co-operatives to an acceptable level of health through financial re-structuring.
(ii) It is submitted that as part of revival package, MOU executed by the state for autonomy in financial and administrative matters especially staffing, recruitment of staff in the society. Further as per MOU entered between Government of India and NABARD, the Registrar of Co-operative Societies may issue guidelines for the benefit of Primary Agriculture Co- operative Society, but there need not be any directions from the State Government and actual staffing and compensation may be decided by the respective cooperatives, on the basis of capacity to pay. While that being the binding terms of understanding. i.e. MOU, the State Government issued impugned G.O.Ms.No.44 Agriculture and Cooperation Department, dated 17-12-2022, usurping the powers and autonomous status of Primary Agriculture Co-operative Society, as powers to recruitment of staff in Primary Agriculture Co-operative Society and other service conditions are now completely put in hands of State Level Committees and District Level Committees.
(iii) It is further submitted that Section 115(D) completely gives autonomous status to Primary Agriculture Co-operative Society, however subject to guidelines issued by RBI/NABARD. However, in the instant case there are no such guidelines issued by RBI/NABARD, but the impugned G.O. has been issued, referring to a letter of correspondence addressed by the NABARD vide Ref No.NB.HO.IDD.Coop/1420/V/10(A)/ 2018-19, dated 27- 02-2019. Further in para (2) of impugned G.O., it has been stated that the NABARD, through Letter dated 27-02-2019, under ref.No.(2) in the G.O., "has communicated operational guidelines on HR policy for Primary Agriculture Co-operative Society, recommended by the National Federation of State Co-operative Banks Committee. It is submitted that the Gov
