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Judgment
Petitioners who belonged to Scheduled Caste category and who earned promotions from tune to time by virtue of the reservation policy in promotions also by the Society, filed this writ petition questioning the orders of the Secretary, South Central Railways Employees Credit Society, Secunderabad (for short ''the Society'') in trying to revert them under the guise of implementing the judgment of the Supreme Court in Civil Appeal No. 4343 of 1998 dated 13-1-1998 in South Central Railways Employees Co-operative Society Employees Union and others the respondent-society was registered under the provisions of A.P. Co-operative Societies Act, 1964 and it is governed by the provisions of that enactment. That docs not mean it cannot take decisions not covered by the provisions of the Act. In fact, in the instant case, the 34th Annual General Body Meeting of the Society at its meeting held on 26-9-1959 passed an unanimous resolution to apply the service rules of Railways to its employees. In resolution No.21, it adopted the following resolutions:
"Resolved that with effect from 1-12-1962 the rules applicable to the employees of the Society in respect of superannuation, leave, discipline and conduct shall be similar to those in force on the Railways."
Subsequently, respondent No.5 entered into an agreement with the Managing Committee of the Society on 7-4-1979. Item No.3 of the agreement relates to the implementation of reservation policy which is hereunder :
"Quota and Implementation: Rest is to be maintained as per the instructions contained in the brochure followed by the Railways if there is any backlog on this account. This has to be cleared by adjusting against the future vacancies."
It is not in dispute that by the time the resolution is adopted, the Central Government, its undertakings were following the rule of reservations in appointment by promotion. Following the said principle the Society also implemented the reservation policy in promotions and all the petitioners were promoted under that policy.
While things stood thus, the A.P. Cooperative Societies Act was amended by the Act 19 of 1976. In the amending Act a new Section 116-B was introduced dealing with reservation to be implemented by the Co-operative Societies governed by the Act and it is useful to extract the same herennder:
"116-B: Power of Government to give directions to societies etc.: The Government may give directions, to a Society or class of societies or an appointment committee constituted u/s 116-A to make provision,-
(a) for the reservation of appointments or posts under any such Society in any cadre created under the said Section in favour of, or
(b) for the grant of any special concessions in the matter of appointment to any such posts or cadre to, the Scheduled Castes, the Scheduled Tribes and Backward Classes and the Society or appointment committee shall be bound to comply with such directions and to give effect to any provisions so made."
From a reading of the Section, it is seen that the Government is empowered to give directions to any Society or class of societies to observe rule of reservation in matters of appointments to the posts, in the Society. As and when such a direction is given, the Society concerned has to give effect to such provision. Thereafter, in exercise of the said power, the Government issued G.O.Ms, No.55 dated 1-2-1977 directing implementation of reservation in appointments to all posts in Co-operative Institutions to be filled up by direct recruitment on temporary/ regular basis. Subsequently, the Registrar seemed to have given a clarification stating that rule of reservation is not applicable- in promotion and it is meant only for direct recruitment. The said clarification seemed to have been questioned by the petitioner in WP No.8051 of 1982 on the file of this Court. The learned single Judge of this Court held that an appointment includes appointment by promotion and the Registrar is not justified in giving clarification that rule of reservation is not applicable in the matter of promotion. Accordingly, writ petition was allowed. When the matter was carried in appeal, a Division Bench of this Court confirmed the view taken by the learned single Judge, Aggrieved by the said judgment, the 5th respondent filed Civil Appeal No.4343 of 1988 before the Supreme Court. The Supreme Court held that the directions given by the Government applies only in respect of the appointment in the initial cadre and not in appointments in the promotional cadre. Stating so, the Civil Appeal filed by the 5th respondent-Union was allowed.
Now, the impugned order has been passed under the guise of implementation of the orders of the Supreme Court.
The question that falls for consideration of this Court would be whether the decision taken by the Society in the capacity of an employer to observe rule of reservation in favour of reserved categories in matters of promotion also violates constitutional mandatory and the statutory provisions of the Act and the notification given thereunder. It is now well known fact that in Indra Sawhney etc. etc Vs. Union of India and others, etc. etc., , though the policy of implementing reservations in matters of promotion was not an issue. The Supreme Court in exercise of its powers under Article 141 of the Constitution of India went into this question and held that reservation policy should be followed at the initial stage of recruitment and the same cannot be implemented in matters of promotion. The Central Government which is casted with the responsibility of bringing down the inequalities not only in the income but also in status knowing the factual position under which the reserved category of employees are labouring brought an amendment to the Constitution to set at naught that the portion of judgment relating to Scheduled Castes, Scheduled Tribes by Section 2 of 77th Amendment Act that came into force on 17-6-1995. Under the said Amendment Act Clause 4(a) was introduced under Article 16 giving constitutional flavour to the reservations in promotions also insofar as it relates to Scheduled Castes and Scheduled Tribes. After the amendment, the judgment of the Supreme Court to that extent became redundant. Hence, the action of the respondent-Society in following the rule of reservation in promotions is in accordance with the constitutional mandate. Now, we have to see whether any of the provisions of the Act or the notification prohibits the Society, employer to implement the policy of reservation in promotions.
I have gone through the provisions of the Act and the rules made thereunder. Absolutely there was no prohibition for implementing the rule of reservation in matters of promotion also if the employer wishes to implement the same. The role of the Government under the Act is to sec the general policy of the Government with regard to recruitment and the provisions of the Act are implemented in their true spirit. In fact Section 116-B was introduced by way of an amendment when most of the Societies refused to implement the rule of reservation, to compel them to follow the policy of the Government while making appointments in their organisations. Merely because the notification says that reservation has to be applied in matters of recruitment on temporary or regular basis, docs not mean that the Government of Andhra Pradesh restrained the Societies from following the policy of their own which is permissible in law and have the constitutional flavour. In this case, though the Society is registered under the provisions of Andhra Pradesh Co-operative Societies, the benefits of the employees working in the Railways were extended to its employees way back in 1959 when the general body of the Society passed an unanimous resolution to follow the rules of Central Government with regard to service conditions of its employees. Further, self-same union which is now opposing reservation policy was a party to the agreement entered into between the parties on 7-4-1979 where under both the parties agreed for implementation of rule of reservation in matters of promotions. The 5th respondent-Union seemed to have not only filed the writ appeal against the judgment of the learned single Judge wherein clarification given by the Registrar was further clarified but also carried the matter to Supreme Court suppressing the real facts of the case and obtained the judgment. I am surprised to see from the judgment of the Supreme Court, a sentence which is as hereunder:
"Pursuant to aforesaid powers the Society has framed set of rules with the approval of the Registrar to Co-operative Societies determining service conditions of the employees of the Society. The said rules of Society categorically provided that there should be no reservation in promotions of the employees of the Society."
while the factual position is altogether different. The Counsel for the Union was not able to show any such model bye-laws. I am of the opinion that all the real facts were not placed before the Supreme Court before judgment was delivered. Hence, I beg to differ with the view taken by the Supreme Court.
The issue can be looked from another angle also. All these petitioners were promoted at a time when the policy was in vogue i.e., on 9-8-1992 whereas clarification of the Registrar was on 23-8-1982. Further, it is doubtful whether that clarification can be really made applicable to bye-laws of the Society in the light of the resolutions and agreements referred to supra. In fact, the Society framed its own bye-laws under Sections 6 and 7 of the Act. Every Society is entitled to frame its own bye-laws but they should not contravene the provisions of the Act and the Rules made thereunder. It can also be seen that u/s 30 of the Act, the ultimate authority shall vest in the General Body of the Society, of course, subject to provisions of the Act, Rules and Bye-laws made thereunder. In the light of the above provisions, any policy decision taken by the Society as long as it is permissible in law and not opposed to the provisions of the Act cannot be questioned either by the Registrar or any other authority. That being the legal position. I am of the opinion tliat the Society did not commit any illegality or irregularity in observing the rule of reservation in matters of promotion also.
Further, even before introduction of Section 116-B in the Act, this Society was following the rule of reservation not only at the time of initial recruitment, but also in promotion. It is not known under what circumstances the Registrar has given clarification stating that the notification given by the Government is applicable only to the initial recruitment. At any rate, the said clarification was not given on any doubt expressed by the petitioner-Society. Further, the Registrar gave clarification how he understood the notification but he never prohibited the employer implementing the rule of reservation in matters of promotion. To that extent, the Act and the Rules are silent. Hence, the Societies registered under the Act are entitled to pursue their own policy in making appointments. Further, as long as the statutory notification given by the Government is not violated, the 4th respondent not being a State nor Authority which come under Article 12 of the Constitution of India, the relationship between the employee and the Society is purely contractual in nature and the Court even cannot compel the Society not to follow the same in its wisdom.
Accordingly, the writ petition is allowed. But in the circumstances of the case, no order as to costs.