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1996 Supreme(Online)(SC) 11

SUPREME COURT
K. Ramaswamy, J
Union of India (Railway Board) and Others v. J. V. Subhaiah and Others
C. A. No. 12148, 12149, 12150 of 1995



Advocates:
For the Appellants: Shri Tulsi
For the Respondents: Shri K. Madhava Reddy, Mrs. Chandan Ramamurthy

Employees of cooperative societies cannot be classified as Railway servants, as they operate under the cooperative law without Railway administrative control, thus not entitled to benefits reserved for Railway employees.

Headnote:(A) Constitutional Law - Article 14 - The Court examined whether employees of cooperative societies operating under State Act could be treated as Railway employees. Employment conditions governed by the respective Societies Act with no Railway Administrative control was noted. (Paras 1-22)

(B) Welfare Measures - Status of employees in cooperative societies serving Railway personnel was discussed; they cannot claim rights as regular employees under Railway Establishment Manual. Prior orders deemed unsustainable. (Paras 5-18)

(C) Constitutional Rights - The principle of equality was addressed; held that distinctions in employment status were valid under Article 14, as prior decisions were misapplied. (Paras 20-21)

Table of Content
1. court grants leave, examining rights of cooperative employees. (Para 1 , 2 , 3)
2. discussion on the statutory framework governing cooperative societies. (Para 4 , 5 , 12)
3. court finds prior decisions unsustainable in law regarding employee classification. (Para 17 , 20 , 21)
4. final verdict rules against claims of cooperative employees as railway servants. (Para 22 , 23)

1. Leave granted in all the special leave petitions.

2. The respondents were admittedly appointed in Railway Employees' Consumer Cooperative Stores at Rajahmundry, Visakapatnam, Vijianagaram and Dharmavaram in South Central Railway. They filed different O. As. before the Central Administrative Tribunal (CAT), Hyderabad Bench seeking declaration that they are "regular Railway employees in Class III posts" and entitled to be paid regular salary for continuous service from the date of the respective appointments in the Societies and also consequential promotion, increments and payment of arrears of salary. The CAT, Hyderabad Bench following the decision of the Madras Bench delivered on June 29, 1990 in O.A. No. 305/88 allowed O. As. and gave the directions for grant of the reliefs referred to earlier but payment of salary was directed to be made from the date on which respective applications were filed. By the time the present Special Leave Petitions came to be filed, a two Judge Bench of this Court by order dated September 7, 1994 made in C.A. No. 2932/91 confirmed the order of the CAT, Madras Bench but the review petition was pending. When these appeals had come up for hearing on October 16, 1995 it was pointed out to another Bench by the Additional Solicitor General that despite the dismissal the matter required examination and for that reason notice was already issued in another case, viz. C.A. @ SLP 24287/95. All the matters were accordingly tagged together. After the dismissal of the review petition a two Judge Bench by order dated November 13, 1995 referred the matter to this Bench. Thus these appeals by special leave.

3. The admitted facts are that the respondents were appointed by the respective Railway Cooperative Stores registered under the Andhra Pradesh Cooperative Societies Act , 1964 as amended from time to time. The Cooperative Stores were organised by the Railway Administration as social welfare measure to inculcate thrift and cooperative spirit in the management of the societies, distribution of essential commodities and lending of credit facilities etc. to the members of the societies. Under the bye laws, respective societies consist of serving members of the Railway Administration at the respective places. Normally these societies are formed at railway junctions. They are organised under the instructions issued by the Railway Administration in the Railway Establishment Manual (non statutory orders). Working of the societies are supervised by the welfare officers appointed by the Railway Administration. It is in dispute as to whether salaries to welfare officers are paid by the societies concerned or by the Railway Administration but that is not material for disposal of these appeals. It is also not in dispute that one third of the members of the societies are nominated by the Railway Administration.

4. Shri Tulsi, learned Additional Solicitor, General contended, on the facts, that Cooperative Stores registered under the Cooperative Societies Act, a State Act and the articles of association or the bye laws of the societies are sanctioned by the Registrar of Cooperative Societies (for short, "The Registrar") of the concerned State appointed by the State Government under the respective State Acts. The constitution of the societies is regulated and registered under the State Act. Appropriate law, rules and bye laws provide that the General Body of the society periodically elects the members of the committee which in turn elects the President or general body itself elects the President, for a specified term. The President and the


























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