Krishnakumar T.R. vs N.V. Usha & Ors.

Devan Ramachandran, J.

Sometimes called “Henry VIII Clause” - often pejoratively, Section 101 and Rule 181 of the Kerala Co-operative Societies Act and the Rules thereunder respectively, vest power with the Government to offer exemption to societies registered under the provisions of the afore “Act”, from the rigour of the statutory stipulations contained therein and in the Rules. The nature and amplitude of the power of the Government acting under these provisions have often evoked strong reactions and it is not different in this case; though the question posed is, if the Government can offer exemption from the provisions of the “Rules” to a society in defiance of the conditions precedent attached to the statutory power of the Registrar of Co-operative Societies in granting exemptions to individual employees in specified circumstances.

These four appeals have been heard together, since the constitutive facts involved in them are analogous; and because the parties are common.

There are two writ petitions involved in these matters, namely, W.P.(C) No. 12753/ 2018 and WP(C) No.27368/ 2019.

The genesis for the controversy is that the then Assistant Secretary of the “Njarakkal Service Co-operative Bank Limited” (‘Bank’ for short), wanted to be promoted as Secretary, even though she was lacking in the stipulated experience; and hence the latter adopted a resolution, invoking Rule 181 of the Kerala Co-operative Societies Rules (“Rules” thereunder), to seek exemption to themselves from the said Rules from the Government, to enable such promotion.

It transpires that the Government issued orders granting exemption; and Sri.Krishnakumar – who was also an Assistant Secretary, but junior to Smt.N.V.Usha, filed W.P(C) No. 12753/ 2018 challenging the said order of the Government; while, Smt.N.V.Usha filed WP(C) No.27368/ 2019, because the order of exemption, according to her, was tinkered by the Registrar of Co-operative Societies illegally, by ordering that the benefit therein would only act prospectively, namely from its date, being 28.06.2018. Her specific case is that the exemption ought to have operated from 23.11.2016, which is the date on which the Bank had sought such from the Government through their resolution

The learned Single Judge considered the writ petitions together and dismissed them; against which, both Smt.N.V.Usha and Sri.Krishnakumar are in appeal.

For the record, W.A No.1092 of 2020 has been filed by Smt.N.V.Usha against the judgment in W.P(C) No. 12753/ 2018; while, she has filed W.A No.1717 of 2020 against the judgment in WP(C) No.27368/ 2019.

As far as Sri.Krishnakumar is concerned, he has filed W.A No.1116 of 2020 against the judgment in W.P(C) No. 12753/ 2018; as also W.A No.1084 of 2020 against the judgment in WP(C) No.27368/ 2019.

In the midst of all the pleadings and documents placed on record, the germane and short question is whether the Government obtains right under Rule 181 of the ‘Rules’, to grant exemption to the Bank, which was impermissible for the Registrar of Co-operative Societies to have granted to Smt.N.V.Usha under Rule 185(8) thereof.

The afore question has been invited because the Bank, in fact, had adopted two resolutions - one to seek exemption from the Registrar of Co-operative Societies in favour of Smt.N.V.Usha, for the purpose of her appointment as the Secretary, under the provisions of Rule 185(8) of the Rules; and the other to seek exemption for themselves from the operation of the “Act”, before the Government, under Rule 181 of the ‘Rules’.

We are told that the Registrar expressed his inability to consider the resolution preferred before him because of the rigour of Rule 185(8)(b) of the Rules, since Smt.N.V.Usha did not have the experience of five years; as mandated therein.

However, the Government, as said above, granted exemption to the Bank from the “Rules”, thus enabling them to promote Smt.N.V.Usha.

It is, therefore, ineluctable that if we are to hold that the Government had the power to grant exemption as they have done, then the appointment of Smt.N.V.Usha would have to be found to be proper; with the only other question being whether the order of Registrar, to limit the exemption from a date after 26.08.2018, would be proper.

Sri.P.N.Mohanan – learned counsel for Sri.Krishnakumar, argued that, when the “Rules” mandate that the Registrar could have granted exemption to Smt.N.V.Usha from the educational qualifications necessary for appointment as the Secretary, only if she satisfied the criteria under Sub-Rule (b) thereof, namely: that he/she should have passed the JDC or equivalent; and should have had a minimum service of five years in the feeder category; and should not be less than 45 years of age, the said Authority was legally incapacitated from acceding to it since, she did not have the unexpendable experience. He contented that it was solely to get over this, that the Society approached the Government under Rule 181 of the “Rules”, which resulted in the order of exemption dated 26.06.2018. He predicated that the Government could not have ordered exemption in the manner they have done, since it could not have granted more than what the Registrar could have done under Rule 185(8) of the “Rules”.

Sri.P.C.Sasidharan – learned counsel for Smt.Usha, in refutation, submitted that the above contentions of Sri.P.N.Mohanan are factually and legally incorrect because, his client had the educational qualification, as also the minimum service in the feeder category, and was also above 45 years of age, to thus deserving of having been granted exemption by the Registrar himself. He added that the Bank, nevertheless, decided to approach the Government, under Rule 181 of the “Rules”, for no reason that can be attributed to his client - which has been granted; and consequently, that the Registrar could not have, thereafter, modified that order, by directing that the exemption therein would apply only prospectively from 28.06.2018 and not from 23.11.2016, when the resolution had been passed. He prayed that, therefore, the appeals filed by his client be allowed and the appeals filed by Sri.Krishnakumar be dismissed.

Sri.M.M.Monaye – learned Standing Counsel for the Bank, submitted that his client had adopted the resolutions in question because, Smt.N.V.Usha was much more Senior to Sri.Krishnakumar in the category of Assistant Secretary; and had acquired JDC qualification, as also the minimum service in the feeder category and being over 45 years in age. He explained that, even though his client had adopted a resolution to request the Registrar to pass orders of exemption in favour of Smt.N.V.Usha, under the provisions of Rule 185(8) of the “Rules”; they thought it better, on the side of caution, to adopt an additional resolution, to seek exemption from the “Rules” for themselves from the Government, under Rule 181 of it.

Sri.M.M.Monaye reiteratingly explained that, the afore was done only because Smt.N.V.Usha fully deserved the promotion — which she was granted later — being the senior most in service; and has now retired from service. He concluded his submissions, asserting that, in fact, there would be no purpose in this Court considering the merits of these matters at this stage, for the reason that not only has Smt.N.V.Usha retired, but also because Sri.Krishnakumar T.R. has been appointed subsequently as a Secretary.

As indicated above, the main thrust of the arguments of Sri.P.N.Mohanan is that the Government could not have granted exemption to the society under Rule 181 of the “Rules”, disregarding the requisites mentioned in Rule 185(8)(b) thereof.

To get a grip of the afore contention, one will have to read Rule 181 of the “Rules”, for which purpose, it is extracted under:

It is rather perspicuous that Rule 181 vests the State Government with plenary powers to exempt any society or class of societies from the provisions of the “Rules”; and can even direct that such provisions would apply only with such modifications as may be specified in the order. This power is in contradistinction to the one vested in the Government under Section 101 of the “Act”, which allows them, normally, to exempt any society from its provisions only in public interest.

To paraphrase, Section 101 of the “Act” extends to situations where the government deems it necessary to exempt a society from its provisions - in which case, they can do so only if they are satisfied that it is necessary to do so in public interest; while, under Rule 181 of the “Rules”, such a restriction, for the Government to exclude a society or class of societies from the provisions of the “Rules”, are not stipulated.

Ineluctably, therefore, when the power of the Government under Rule 181 of the “Rules” is restricted by nothing more than the obligation to act judiciously, keeping in mind the purpose and objects sought to be achieved, it can never be conceded that they cannot do what the Registrar could not have done under Rule 185(8) of the “Rules”. Any argument to the contrary would stand untenable because, Rule 181 sanctions power to the Government to exempt a society or class of society from any provision of the “Rules”; and that includes Rule 185 thereof also. It is well settled that an order under Rule 181 of the “Rules” cannot be challenged as a mere administrative order because, the power which flows from it is essentially incidental to subordinate legislative power (see for support Purushothaman Nair v. State of Kerala [2008 (4) KLT 879].

The afore being said, as per the admitted positions of the parties, Smt.N.V.Usha was the seniormost of the Assistant Secretaries in the services of the society; and it was to ensure that she obtained the opportunity of being promoted as Secretary, that the latter applied for exemption before the Government. The accession of the Government to such a request can surely not seem to be unjust or unfair.

In the conspectus of the admitted fact that Smt.N.V.Usha has retired from service, we do not think that it will be justified for us to intervene in her appointment, particularly since the exemption obtained by the society was not on account of any action that can be directly attributed to her. To add to this, Sri.Krishnakumar T.R. is now stated to be working as Secretary; and to that extent, his grievance also stands allayed.

The surviving question is whether the order of the Government could have been interpreted by the Registrar, to hold that the exemption therein operates only from 26.06.2018, being its date. We notice that the learned Single Judge has approved this; but are forced to a different opinion because, it is well settled that, when the Government issued its order without a specific date being fixed for it to operate from, or without showing it to be either prospective or retrospective, it will indubitably relate back to the date on which the resolution was passed by the society. In this case, the resolution, admittedly, was adopted on 23.11.2016; and we are, therefore, of the view that the holdings in the judgment in WP(C) No.27368/2019 – that the order of the Government, produced as Ext.P10 therein, operates only prospectively - cannot obtain forensic favour.

In the afore circumstances:

Needless to say, all consequences pursuant to our declarations above will follow.