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Judgment
F.M. Ibrahim Kalifulla, J.—In all these appeals, the issue relates to the validity of the impugned orders passed by the first respondent, dated
12.3.1999 and 8.4.1999 in and by which the first respondent directed the respective third respondents to cancel the 18(1) settlement based on
which higher scales of pay was fixed and paid to the members of the appellants and also to recover such payments already made.
Before the learned single Judge, the appellants relied upon the earlier Division Bench decision of this Court reported in 1992 1 LLJ 747
(Thiruchirapalli Hiruthayapuram Co-op. Bank Employees Union Etc. v. Joint Registrar of Cooperative Societies, Thiruchirapalli etc.) The learned
single Judge, however, held that the issue was really covered by the order dated, 1.10.2007 passed in W.P. No. 6189 of 2005 etc. The learned
single Judge chose to rely upon the recent decision of the Hon''ble Supreme Court reported in JT 2007 (2) SC S66 (Ghaziabad Zilla Sahkari Bank
Ltd. v. Additional Labour Commissioner and Ors.).
Before us, Mr. K. Premkumar, learned counsel for the appellants once again heavily relied upon the Division Bench decision reported in 1992 1
LLJ 747 and contended that having regard to the provisions contained in the Industrial Disputes Act, 1947 (for short Act 1947), when the
existence of the 18(1) settlement was not in dispute, if at all the respondents wanted to give a go by to the terms of the settlement, they should have
resorted to termination of the said settlement under the provisions of the Industrial Disputes Act, 1947, and after the successful termination of such
settlement and restoration of the earlier pay scale, there would have been any scope for recovery.
According to the learned counsel, the Division Bench while setting aside similar such impugned orders issued earlier to nullify the settlement,
gave liberty to the authorities to resort to the appropriate process available to them in law for setting aside such settlement. By referring to the said
order of the Division Bench, the learned counsel for the appellants contended that such liberty made available to the respondents was not to take
recourse to the provisions of the Tamil Nadu Co-operative Societies Act, 1983 (for short Act 1983) but to the provisions of the 1947 Act alone.
As against the above submissions, Mr. Raja Kalifulla, learned Government Pleader in his submissions drew our attention to of the Act 1983
which gives powers to the Registrar to give directions in public interest and contended that such power once exercised by the Registrar and
directions issued, the Cooperative Societies concerned are bound by such directions.
The learned Government Pleader also brought to our notice Rule 149 of the Tamil Nadu Co-operative Societies Rules, 1988 (for short Rules
1988) and contended that the conditions of service of paid officers and servants of the Societies were all matters to which the Registrar was
empowered to exercise his jurisdiction u/s 181 of the Act 1983 and issue necessary directions.
The learned Government Pleader brought to our notice such direction issued by the Registrar of Co-operative Societies u/s 181 of the Act 1983
dated 16.10.97 and contended that the orders impugned in the writ petitions, dated 12.3.1999 and 8.4.1999 came to be issued by the respective
first respondent only in pursuance of the said direction issued by the Registrar and therefore, the same were in accordance with law and did not call
for any interference.
The learned Government Pleader also pointed out that the said directions issued by the Registrar, dated 16.10.1997 was never under challenge
and moreover, neither the directions issued u/s 181 of the Act 1983 on 16.10.1997 nor the impugned orders of the respective first respondent for
cancellation of the settlement and for the recovery can be held to be not in accordance with the earlier Division Bench decision of this Court
reported in 1992 (1) LLJ 747.
Having heard the learned counsel for the respective parties, we find force in the submission of the learned Government Pleader. In
Thiruchirapalli Hiruthayapuram Coop. Bank Employees Union Etc. v. Joint Registrar of Cooperative Societies, Thiruchirapalli etc. 1992 1 LLJ
747, the earlier Division Bench has held as under in para 3:
Learned counsel for the petitioners were anxious to suggest that the contesting respondents are not without remedy and they were suggesting
different remedies. Mr. K. Chandru, learned counsel appearing for the petitioners in some of the writ petitions, would submit that the process
under the the Act could not be resorted to and only there could be an independent approach to this Court under Article 226 of the Constitution of
India. In contrast, Mr. A.L. Somayaji, learned counsel appearing for the petitioners in some of the writ petitions would submit that the process
under the Act is not excluded in a contingency like the present one. We make it clear that we are not in the field of making any suggestion as to
what exactly is the process in law the respondents should resort to to delete the settlements, if there are grounds Justifying the same. It is sufficient
if we take note that by the impugned proceedings that result could not be achieved. The impugned proceedings are incompetent and without
jurisdiction. When we view the question from the above angle, we have no other alternative, but to countenance the grievances of the petitioners in
these cases. Accordingly, in this batch of writ petitions, we make the following order: The proceedings impugned in the writ petitions in so far as
the purport to nullify or annul the settlements arrived at under the Act shall not be enforced to the prejudice of the petitioners. We make no order
as to costs. We make it clear that we have only frowned upon the impugned proceedings in so far as they by themselves ventured to nullify or
annul the settlements under the Act. It is certainly open to the authorities concerned to resort to the appropriate process available to them in law to
achieve their end with regard to their grievances over the settlements.
(emphasis added)
In fact, the Division Bench made it clear that it did not even intend to make a suggestion as to what exactly is the process in law that should be
resorted to by the authorities to annul the settlement if there are grounds warranting the same. On the other hand, the Division Bench left it open to
the authorities to resort to such powers which are vested in them to rectify any anomalous situation by deleting the settlements if there are grounds
to justify such action. A reading of the above extracted portion of the Division Bench however makes it clear that such power need not necessarily
be traceable to the provisions of the Industrial Disputes Act alone. In this context we can usefully to Section 181 of the Act 1983 which reads as
under:
Power of Registrar to give directions is the public Interest, etf. - (1) Where the Registrar is satisfied that in the public interest or for the
purpose of securing proper implementation of co-operative production and other development programmes approved or undertaken by the
Government or to secure the proper management of the business of any class of registered societies generally, or for preventing the affairs of any
registered society being conducted in a manner detrimental to the interests of the members of the depositors or the creditors thereof, it is necessary
to issue directions to eny class of registered societies generally or to any registered society or registered societies in porticular he may by order
issue directions to them from time to time and all registered societies or the registered society concerned, as the case may be, shall be bound to
comply with such directions.
(2) The Registrar may, by order, modify or cancel any directions issued under Sub-section (1) and in modifying or cancelling such directions my
impose such conditions as he may deem fit
(underlining is ours)
A reading of the said provision makes it clear that the said provision empowers the Registrar to issue such directions if he is satisfied that in
public interest or for the purpose of securing proper implementation of co-operative production and other developmental programmes and also to
secure the proper management of the business of any class of registered societies generally or for preventing the conduct of any society which
would otherwise be detrimental to the interest of its members or depositors or creditors such directions are imminently required. The powers thus
invested with the Registrar u/s 181 of the Act 1983 is wide enough and so iong as such powers are exercised keeping in mind the purport and
intend of the said provision and with a view to fulfil the statutory obligations prescribed therein, there would be no scope for anyone to contend that
the exercise of such power could be called in question.
In fact, under Rule 149 of the Rules 1988/ it is specifically provided that by taking into account its nature of business, volume of transaction
and financial position, frame a special bye-law, with prior approval of the Government, and such special bye-law should prescribe inter alia the
service conditions of its employees, scale of pay and allowances etc. for each such post.
In fact, it was brought to our notice that by G.O. Ms. No. 289, dated 18.12.1998 a Committee was constituted to revise the scale of pay and
other service conditions of the employees of the co-operative banks with effect from 1.7.1997 and that subsequently, under G.O. Ms. No. 186,
dated 16.8.2000 such revision in scales of pay of different posts came to be prescribed with effect from 1.7.1997 to be in operation for a period
of five years. Therefore, it can be safely concluded that the provisions contained in the 1983 Act as well as the Rules framed thereunder were
being implemented in regard to the prescription of pay scales and other service conditions by the authorities concerned from time to time. In fact, a
perusal of the impugned orders disclose that contrary to the provisions contained in the 1983 Act and the Rules, the individual societies instead of
adhering to the directions issued by the Registrar of Co-operative Societies, u/s 181 of the Act 1983 were entering into various settlements with
their employees under the provisions of the I.D. Act and thereby torpedo the statutory directions issued by the Registrar of Co-operative Societies
u/s 181 of the 1983 Act.
In fact, Rule 149 of the Rules 1988 came into being by way of G.O. Ms. No. 212, dated 4.1.1997, i.e., after the pronouncement of the
Division Bench decision reported in 1992 1 LLJ 747. On the basis of the judgment of the earlier Division Bench, the State Government in order to
restrain the individual Societies entering into such wage settlements without reference to the viability of the concerned Co-operative Societies
thought it fit to incorporate the provision in the Rules by introducing Rule 149.
By no stretch of imagination, the said Rule can be said to be either conflicting with the provisions of I.D. Act or introduced with any other
ulterior motive to defeat the lawful rights of the employees of any of the registered societies. The purport of the rule is to ensure that a registered
society does not become defunct or unwieldy and any of the registered societies should not be allowed to be closed due to dearth of funds by
mismanagement. Therefore, the constitution of the Committee for formulating the common wage structure for the employees of the registered Co-
operative Societies by G.O. Ms. No. 289, dated 18.12.1998 and the subsequent G.O. Ms. No. 186, dated 16.8.2000 were all in furtherance of
the fulfilment of the above objective of the State Government.
In the light of the above factors, we are convinced that the orders impugned in the writ petitions issued by the first respondent directing the
respective co-operative societies to cancel the settlements which came to be arrived in contravention of the directions issued by the Registrar of the
Co-operative Societies, dated 16.10.1997 issued u/s 181 of the Act 1983 by invoking Section 166 of the Act 1983 are perfectly justified. We are
also convinced that the Division Bench decision reported in 1992 1 LLJ 747 upon which heavy reliance was placed upon by the appellant does
not in any way support the stand of the appellant. On the other hand, we can only state that the subsequent direction issued by the Registrar of Co-
operative Societies, dated 16.10.1997 by invoking the powers vested in him u/s 181 of the Act 1983 was validly made and the impugned orders
dated 12.3.1999 and 8.4.1999 passed in pursuance of the said directions of the Registrar, dated 16.10.1997 as well as by applying Section 166
of the Act 1983 were all in tune with the observations made in the above referred to Division Bench decision and therefore, we do not find any
scope to interfere with the impugned orders. Moreover, so long as the directions issued by the Registrar, dated 16.10.1997, u/s 181 of the Act
1983 remains in force, the subsequent directions and the impugned orders issued by the first respondent by invoking Section 166 of the Act 1983
were well within the powers and jurisdiction of the first respondent.
It will have to be stated that the appellant not having challenged the directions of the Registrar, dated 16.10.1997 issued u/s 181 of the Act
1983, cannot be permitted to challenge the consequential orders passed u/s 166 of the Act 1983 impugned in the writ petitions.
Looked at from any angle, we do not find any scope to interfere with the orders impugned in the writ petitions and therefore, the order of the
learned single Judge impugned in these appeals cannot also be interfered with.
The Writ Appeals fail and the same are dismissed. No costs. Connected M. Ps. are also dismissed.