S. Suryanarayana and Others vs Dist. Co-op. Officer, Visakhapatnam and Others

The petitioners 11 in number. employed in Thimmarajupeta Primary Agricultural Co-operative Society Limited (for short ''the Society), Visakhapatnam District, filed this writ petition questioning the proceedings of the 3rd respondent dated 1-10-1997 directing them to repay the ex-gratia paid to them from 1993-94 to 96-97 as the Registrar and Commissioner of Co-operative Societies as well as respondents 1 and 2 objected for payment of ex-gratia on the basis of G.O.Ms. No. 366 F.W. (FW.W&M. I) Department dated 29-10-1993.

Heard both the Counsel. The Government Order referred by the Registrar and Commissioner of Co-operative Societies has no application to the facts of the case. In that Government Order the issue for consideration before the Government was whether public enterprises either in the Cooperative Sector or Companies or Corporations have to pay the minimum statutory bonus even if they are incurring loss under payment of Bonus Act. Of course, a direction was given to all the concerned. Further, in the Government Order it is stated that the Government is taking action u/s 36 of the Bonus Act to exempt those establishments for payment of bonus if their financial position or other relevant circumstances" warrant such a course of action in public interest. Accordingly, a direction was given not to pay minimum bonus without reference to the profit and loss of the enterprises. In fact, I had an occasion to deal with the validity of that G.O. and the same was struck down in Andhra Food''s case and the matter went upto Supreme Court. Secondly, the A.P. Co-operative Societies Act deals with the day to day affairs of the Cooperative Society. Section 45 deals with the disposal of the net profits earned by the Society after the end of the accounting year and under sub-section (c) when the Society earns profit. We are concerned with sub-section (d).

Section 45 (d): Payment of bonus to employees of the Society or remuneration to a Member for services rendered by him to the Society to the extent and the manner specified in the bye-laws."

As per clause 33 (III) (c) of bye-laws approved by the Registrar of Co-operative Societies, the employees have to pay minimum oae month''s salary whether it is called bonus or remuneration. Admittedly, in this case, the Society was making profits and the Society paid only one month''s salary to these employees all these years as bonus and the action of the Society enjoins legal sanctity and no one can find fault with the action of the Society. But unfortunately, the Registrar, a senior bureaucratic of the State Government, who is expected to guide and advise the societies in implementing the provisions of the Act has forgotten that there is such a clause in the Act. He relies on G.O. Ms. No. 366 which was issued under payment of Bonus Act without applying his mind about the applicability of the G.O. to the issue with the result the petitioners have to approach this Court by way of filing of the writ petition.

In the light of the view taken by me, there are no merits in the objections raised by the Department in payment of ex-gratia to the petitioners from 1993-94 onwards and in fact it is bounden duty of the Society as long as it makes profits, to pay the bonus to its employees.

Accordingly, the writ petition is disposed of. No costs.

After dictating the judgment, the Government Pleader placed some papers said to have been furnished to the departmental officials by the Society and contends that none of the resolutions passed by the Society indicate that the Society was running in profits. I have gone through the said resolutions, but no proper light is thrown on the issue. Hence, I would like to clarify the order saving that Section 42 (d) along with bye-law 33 comes into play only when the Society makes profit otherwise not.

If the Society opines that no profit was made as per their balance sheet during those years, the Society may give a fresh notice to the petitioners duly indicating the reasons for taking a decision to recover the amounts already paid to the petitioners. The petitioners shall also file their explanation within a reasonable time if necessary by going through the books of account maintained by the Society.