The Kerala State Co-operative Bank Recruitment Rules, 2023 validly reserve posts for employees of member societies, overriding conflicting provisions of the Kerala Co-operative Societies Act, 1969.

JUDGMENT

[WP(C) Nos.21050/2024, 19831/2024, 30360/2024, 40191/2024]

These Writ Petitions have been filed by the petitioners seeking to quash the notification issued by the Kerala Public Service Commission notifying the selection to the post of Office Attendant and Clerk/Cashier in the Kerala State Co-operative Bank. The primary ground which challenged the notification is that the rules framed by the Government, i.e. the Kerala State Co-operative Bank Recruitment Rules, 2023 are in violation of the provisions contained in the Kerala Co-operative Societies Act , 1969 and the Rules framed thereunder.

2. The petitioners are the employees of Nominal and Associate member Societies of the Kerala State Co-operative Society. They are not members of the Primary Agricultural Society and Urban Co- operative Bank.

3. Before the amalgamation of the District Co-operative Banks in the Kerala State Co-operative Bank, an Apex Society, the District Co-operative Banks in each District were the Apex Society of all Primary Societies in the District. There was a three-tier system in respect of Co-operative Societies in Kerala --Primary, Central Society (District Co-operative Banks) and Apex Society (State Co-operative Bank). Before amalgamation, the Apex Society of the Primary Societies were District Co-operative Banks.

4. The State Government had accorded sanction for delayering the short-term credit structure in the State after obtaining the final approval from the Reserve Bank of India. The short-term credit structure was delayered by amalgamation and transfer of assets and liabilities of all 14 District Co-operative Banks with Kerala State Co- operative Bank was done with effect from 29^th November 2019. On amalgamation, the employees of the District Co-operative Banks became the employees of the Kerala State Co-operative Bank.

5. Section 80 (3A) was inserted in the Co-operative Societies Act by Act 6 of 1995 which reads as under:

“Notwithstanding anything contained in this Act or the Rules made or orders issued thereunder or in the bye-laws of any society relating to the recruitment and conditions of service of officers and servants of societies, except the chief executive of the societies, all appointments of officers and servants of the Societies mentioned in the Schedule I for which direct recruitment is resorted to shall be made from a select list of candidates furnished by the Kerala Public Service Commission and in making such recruitment the reservation principles under Rule 14 to 17 of the Kerala State and Subordinate Service Rules, 1958 shall be followed. The appointment of Chief Executive of Apex Societies shall be made by the Government after fixing qualifications.”

6. Schedule-I of the Co-operative Societies Act included 14 District Co-operative Banks in addition to the Apex Society. By Act 1 of 2019, the District Co-operative Banks except Malappuram District Co-operative Bank stand amalgamated with the Kerala State Co-operative Bank and Schedule-I of the Act also underwent amendment by which the enabling provision to the Public Service Commission to select candidates for direct recruitment to the District Co-operative Banks was deleted. Kerala Public Service Commission was enabled to make selection for the District Co- operative Banks and Kerala State Co-operative Bank by virtue of the Kerala Public Service Commission (Additional Functions as respects certain So