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Judgment
K. Suguna, J.—These writ petitions have been filed challenging the Government letters dated 6.10.2003 issued in Ref. No.
16941/CA1/2003-2, 7.10.2003 issued in Ref. No. 16436/CN-1/2003-3 and 18.12.2003 issued in Ref. No. 16603/CP.2/2003-3.
The facts leading to the case are:
Under Rule 149 of the Tamil Nadu Co-operative Societies Rules, taking into account the financial condition, the nature of business, the volume of
the transaction, every society shall adopt, with the prior approval of the Registrar of the Co-operative Society, a special bye-law covering the
service condition of its employees relating to cadre strength and classification of various categories of posts and qualification required thereof for
each such posts. To go into the question of pay scale, cadre strength for the various types of societies, the Government has appointed a
streamlining committee and basing on the recommendations of the said committee, the Government has issued G.O. No. 131 dated 4.6.1999 for
Primary Agricultural Co-operative Banks, G.O. No. 89 dated 16.5.2000 for Employees Co-operative Societies and G.O.Ms. No. 4(D) -1 dated
12.1.2001 for Co-operative Wholesale Stores and Primary Stores fixing the cadre strength. But, subsequent to this, in the year 2003, the
Government has issued the impugned Government Letters fixing the optimum cadre strength in respect of various societies and also with regard to
the mode of payment etc. since, these Government Letters are contrary to the provisions of the Tamil Nadu Co-operative Societies Act
(hereinafter referred to as ""Act"") as well as the rules framed thereunder and also to the Government Orders mentioned above, challenging the
same, the petitioner has filed the above writ petitions.
Learned counsel for the writ petitioner has contended that the impugned letters of the 1st respondent run contrary to G.O. No. 131 dated
4.6.1999, G.O. No. 89 dated 16.5.2000 and G.O.Ms. No. 4(D) -1 dated 12.1.2001. u/s 73 of the Act, power has been given to the Society to
appoint paid officers and servants as are necessary for the efficient performance of its functions. But, now, by way of impugned Government
letters, optimum cadre strength has been fixed without making any provision for increase in the cadre strength corresponding to increase in volume
of work. According to the learned Counsel, u/s 32 of the Act, the ultimate authority of a registered society shall vest in the general body of its
members. But, that power has been now been taken away by the impugned Government Letters. That apart, learned Counsel, has further
contended that by the impugned letters, the Government has usurped the power of the registered societies, which has been conferred by the
statute. That apart, the respondent, being the Government, should be a model employer. But, by the impugned letters, the respondent mandates the
Co-operative Societies to engage workers on daily wage basis and on contract basis, even though the work is perennial in nature. That
apart,according to the learned Counsel, the action of the 1st respondent in mandating to engage employees on daily wage basis, even for works of
perennial nature, amounts to encouraging unfair labour practice. That apart, as per Section 149 of the Act, cadre strength of different societies for
various cadres has to be fixed taking note of the nature of business and the volume of work and also the financial position. But, now, by fixing the
optimum cadre strength, the Government has, in fact, nullified the power given under the said section. According to the learned Counsel, the
impugned letters have been issued without proper application of mind and what has been granted by way of a statute, cannot be taken away by
Government Letters.
On the other hand, learned Additional Advocate General, has contended that as far as the power given u/s 73 as well as Section 32 of the Act
is concerned, it can be exercised only subject to the provisions of other sections of the Act. According to the learned Additional Advocate
General, under Sections 181 and 182 of the Act, the Government has got the power to give direction in public interest and the power u/s 32 and
Section 149 of the Act is subject to the power of the Government under Sections 181 and 182 of the Act. That apart, the impugned letters have
been issued, taking into account, the financial position prevailing in various societies alone. That apart, according to the learned Additional
Advocate General, basing on the order dated 24.10.2002 passed in W.A. Nos 2501 & 2502 of 2001 batch, the Government has issued the
impugned letters fixing the optimum cadre strength. That apart, according to the learned Additional Advocate General, the impugned letters are not
issued contrary to the existing Government Orders or to the provisions of the Act. That apart, when a direction has been issued in public interest
and for the welfare of the society, the question of unfair labour practice does not arise. As such, the learned Additional Advocate General
submitted that the prayer sought for in the writ petitions is not sustainable and the impugned Government Letters have to be upheld.
I have considered the above submissions of the respective learned Counsel.
By the impugned Government Letters, the optimum cadre strength has been fixed for various cadres for various societies. As per the impugned
Government Letter dated 6.10.2003, the cadre strength of Wholesale Stores and Primary Stores has to be fixed as detailed below:
(i) all sub-staff required for co-operative wholesale stores will be appointed only on contract basis.
(ii) in Co-operative Wholesale Stores, for each fair price shop having more than 1000 family cards one salesman will be appointed and in all shops
having more than 1000 family cards, another salesman will be appointed.
(iii) No packer will be appointed in these shops.
(iv) The employees required for distribution of Kerosene in these shops will be taken on daily wages on the days when kerosene is distributed.
(v) As far as the liquor shop run by the wholesale stores are concerned, since they have been temporarily allotted, if there are no surplus,
employees instead of appointing permanent employees one ore two employees shall be appointed to each shop on daily wages based on
requirements. Since money transactions will be involved in these shops. It was decided that they may be appointed on contract basis after
obtaining proper security.
(vi) As far as the cooking gas section of the wholesale stores is concerned, it was decided that a full time employee may be appointed for serving
5000 family cards and if the cards are more, another employee may be appointed. It was also decided to appoint a delivery boy on daily wages to
deliver gas to 1500 card holders.
(vii) Since 2 employees are necessary to distribute petrl in a petrol bunk, it was decided to appoint a full time employee as Bill Clerk and 2 filling
boys ondaily wges in each of the petrol bunks run by the wholesale stores. If more employees are required they may be appointed on daily wages.
(viii) As far as the supermarkets run by the wholeslae stores are concerned, employees shall be appointed based on the sales in the past 3 years. In
each Supermarket 2 employees will be appointed on full time basis and the balance based on the sales. If the sales turn over exceeds Rs. 5 lakhs
one part time employee will be appointed for the turnover of every Rupees three lakhs. The expenditure on the employees will not exceed 2% of
the sales turnover.
With regard to Primary Agricultural Co-operative Banks, the optimum cadre strength shall be as follows:
--------------------------------------------------------------
a) upto Rs. 50 lakhs 1 Assistant Secretary
b) Rs. 50 lakhs to Rs. 1 crore
of working capital 1 Secretary
c) Between Rs.1 crore and
Rs. 2 crores 1 Secretary and 1 Assistant
d) For every additional
Rs. 1 crore 1 Additional Assistant
---------------------------------------------------------------
No office assistant, No jewel appraiser, No watchman and No salesman will be appointed.
However, a minimum of one watchman for the Banks which have a turnover of Rs. 1 crore will be sanctioned to protect the properties. No scale
of pay will be fixed for them and they will be paid from out sourcing. This category will not be covered by the cadre strength.
With regard to Employees Co-operative Societies, the optimum cadre strength should be fixed as hereunder:
-----------------------------------------------------------
a) Loan outstanding upto
Rs. 50 lakhs :: Part time employee
b) Rs. 50 lakhs to Rs.1crore :: One Secretary
c) Rs. 1 crore to Rs. 2 crores :: One Assistant
d) Rs.2 crores to Rs.5 crores :: Two Assistant
e) Rs.5 crores to Rs.10 crores :: Three Assistants with
-----------------------------------------------------------
(Except Watchman, Jewel Appraiser, Office Assistant)
For the above said three societies, by the impugned Government Letters (cited supra), the optimum cadre strength has been fixed. u/s 73 of the
Act, power has been given to a registered society for appointment of paid officers and servants as are necessary for the efficient performance of its
functions. But, now, by fixing the optimum cadre strength, by way of Government Letters, in fact, the 1st respondent usurped the power of the
registered societies. When a specific power has been given under the statute to a registered society, with regard to appointment of paid officers
and servants of the society, the society cannot be deprived of that power and the same cannot be exercised by the Government either in the guise
of public interest or in the guise of issuing only guidelines. That apart, u/s 32 of the Act, the ultimate authority of a registered society is only the
general body of the society. But,by the impugned Government Letters, the general body of the society becomes functus officio since, the power of
the general body has been now exercised by the 1st respondent. That apart, the Government has issued three Government Orders basing on the
recommendations of the streamlining committee fixing the cadre strength for different cadres. Now, contrary to the said Government Orders, by
way of Government Letters, the Government has fixed the optimum cadre strength. In fact, the Government Letters, which are under challenge in
these writ petitions, are contrary to the Government Orders issued with regard to cadre strength as detailed below:
CO-OPERATIVE WHOLESALE STORES AND PRIMARY STORES
Particulars
Streamlining Committees recommendations
G.O.4(D) Operation Food and Consumer Protection Department dt.12.1.2001 Letter No. 16941 /CA1 /2003-2 dt 6.10.2003
Categories of Employees and Cadre Strength
General Manager
Manager
Supervisor
Assistant
Junior Assistant
Salesman
Assistant Salesman
As per Streamlining Committee''s recommendations
Only restriction is - salary expenditure should not exceed 2% of the turnover
All sub-staff only on contract basis.
Fair price shop-if more than 1000 family cards - 1 salesman
No packer
Kerosene - on daily wage for the day of distribution
Liquor shop - since temporary - on contract basis
Cooking Gas - for 5000 family cards - one full time employee. If more - more employees can be appointed.
1500 card holders - one delivery boy on daily wage basis.
Petrol bunk - 2 bill-clerks on full-time basis - if more employees required - on daily wage basis
Two employees on full time basis - If turnover exceeds 5 lakhs - one part-time employee for every 3 lakhs. However expenditure should not
exceed 2% of sales turnover (existing employees service protected)
PRIMARY AGRICULTURAL CO-OPERATIVE BANKS
Particulars
Streamlining Committee''s recommendations
G.O.131, Cooperation Food and Consumer Protection Department dt.4.6.99
Letter No. 16436/ CN.1/2003-3, dt. 7.10.2003
Groups
------------------------------------
Cadre Strength
Working Capital
------------------------------------
Upto 25 lakhs - ""C
25 to 50 lakhs - ""B
50 lakhs & above - ""A
------------------------------------
Post A B C
------------------------------------
Secretary 1 1 1
Asst.Secy 1 - -
Sr.Asst. 1 1 -
Assistant 2 1 1
Salesman/ 1 1 1
Bill clerk
Call boy/ 1 1 -
Watchman
------------------------------------
Total 7 5 3
------------------------------------
- For every Rs. 25 lakhs increase of working capital
- can have one Assistant and for every 50 lakhs
- one Sr. Asst and one Assistant
- Existing employees services in excess
of the above protected.
------------------------------------
Working Capital
------------------------------------
Upto 25 lakhs - ""C
25 to 50 lakhs - ""B
50 lakhs & above - ""A
------------------------------------
Post A B C
------------------------------------
Secretary 1 1 1
Asst.Secy 1 - -
Sr.Asst. 1 1 -
Assistant 2 1 1
Salesman/ 1 1 1
Bill clerk
Call boy/ 1 1 -
Watchman
------------------------------------
Total 7 5 3
------------------------------------
- No additional Assistant or Sr. Assistant
for increase in working capital.
As per G.O. 131
---------------
Optimum Cadre
Strength
Upto 50 lakhs - 1 Asst. Secy.
50 lakhs-1crore - 1 Secy.
1 - 2 crores - 1 Secy.
1 Assistant
Every Additional
1 crore - 1 Additional
Assistant
- No Office Assistant
- No Jewel Appraiser
- No Watchman
- No Salesman
- If more than one crore
- minimum one watchman would be awarded
- watchman only through outsourcing.
EMPLOYEES CO-OPERATIVE SOCIETIES
Particulars
Streamlining Committee''s Recmmendations
G.O.Ms. No. 89 dated 16.5.2000
Letter No. 16603/ CP2/ 2003-3 dt.18.12.2003
Grade
-----
Cadre Strength
Based on Loan Outstanding
- less overdues
More than 1 crore - ""A
50 lakhs to 1 crore - ""B
Upto 50 lakhs - ""C
Loan Secy. Acct Asst. O.A.
Outstanding
---------------------------------------------
Upto 50 lakhs 1 - - -
50-1crore 1 - 1 -
1-1.5crore 1 - 1 -
1.5-2crore 1 1 1 1
2-2.5crore 1 1 2 1
2.5-3crore 1 1 3 1
3-3.5crore 1 1 4 1
3.5-5crore 1 1 5 1
---------------------------------------------
- 1 Post of Assistant Secretary may be created if loan
outstanding exceeds Rs. 4 crores
- One Assistant for every 50 lakhs if member loan outstanding
over and above 5 crores
- One Accountant for every 4 Assistants.
- Assistant Secretary for every 4 Accountants
- One Office Assistant for every 10 staff members.
Recommendations Accepted
------------------------
Loan Secy. Acct. Asst O.A.
Outstanding
-----------------------------------------------
Upto 50 lakhs 1 - - -
50-1crore 1 - 1 -
1-1.5crore 1 - 1 -
1.5-2crore 1 1 1 1
2-2.5crore 1 1 2 1
2.5-3crore 1 1 3 1
3-3.5crore 1 1 4 1
3.5-5crore 1 1 5 1
5-10crore 1 1 5 1
10 crore and
above 1 1 6 1
-----------------------------------------------
- Additional posts-recommendations not accepted
- in view of computerisation being made for societies having
2 crores and above working capital
------------------------------------------------
Upto 50 lakhs - 1 part time employees
50-1 crore - One Secretary
1 - 2 crore - One Assistant
2-5 crores - 2 Assistant
5 - 10 crores - 3 Assistant with a
ceiling of 5 Assistant
------------------------------------------------
existing employees services protected - Not to fill any
vacancies arising out of retirement, death etc.
The Government Orders were issued by the order of the Governor whereas the Government Letters, impugned in these writ petitions, have been
issued by the Secretary to the Government.
The contention of the learned Additional Advocate General that the power conferred u/s 72 as well as u/s 73 is subject to the other provisions
namely, the power given u/s 182 of the Act to the Government cannot be accepted since, as far as Section 182 is concerned, it reads as follows:
Power of Government to give directions.- (1) The Government may, in public interest, by order, direct the Registrar to make an inquiry or to
take appropriate proceedings under this Act, in any case specified in the order and the Registrar shall report to the Government the result of the
inquiry made or the proceedings taken by him within a period of six months from the date of such order or such further period as the Government
may permit.
(2) In any case, in which a direction has been given under Sub-section (1), the Government may, notwithstanding anything contained in this Act,
call for and examine the record of the proceedings of the Registrar and pass such orders in the case as they may think fit:
Provided that before passing any order under this sub-section, the person likely to be affected by such order shall be given an opportunity of
making his representation.
As per this Section, in cases where there is any mal-administration or where the administration of a particular society is in challenge, the
Government, by exercising the power under the said Section can direct the Registrar to make an inquiry and can take appropriate proceedings
under the Act. But, here, the Government Letters have been issued by the Secretary to the Government namely, the 1st respondent and not with
regard to any maladministration or any mismanagement of any particular society, but with regard to fixing the optimum cadre strength in various
categories of three types of societies. As such, relying on Section 182 of the Act, the 1st respondent cannot take a stand that by exercising the
power u/s 182 of the Act, the Government has issued the impugned Government Letters. That apart, as far as Section 181 is concerned, the
power under that Section can be exercised only with regard to the affairs of any particular society and administration thereof by the Registrar. As
such, the stand taken by the learned Additional Advocate General that by exercising the power under Sections 181 and 182 of the Act, the
impugned letters have been issued will not stand at all. That apart, u/s 73 of the Act, which deals with appointment of paid officers and servants,
the registered societies are given the power to make appointment of officers and servants for the efficient functioning of the societies and that
power is subject to the provisions of Section 74, 75, 76 and 77 of the Act. The subject in issue in the impugned Government Letters will not fall
either u/s 74, or Section 75 or Section 76 or u/s 77. That apart, as rightly contended by the learned Counsel for the petitioner, by the impugned
letters, the Government has usurped the power of the society and directed the societies to have particular number of employees as maximum. In
the case of Primary Agricultural Co-operative Banks, according to the impugned Government Letter dated 7.10.2003, upto the working capital of
Rs. 50 lakhs, only one Assistant Secretary is permitted. If the working capital is from Rs. 50 lakhs to Rs. 1 crore, one Secretary is permitted. As
far as Primary Agricultural Co-operative Banks are concerned, their main concern is advancing small loans to agriculturists. The work involves
verification of land, verification of genuineness of the loan application by visiting the place of the borrower and if the loan is obtained by pledging
the jewels, the quality of the jewels has to be assessed and the value has to be fixed, which can be done only by a jewel appraiser. But,as per the
impugned Government Letter dated 7.10.2003, the Primary Agricultural Co-operative Banks cannot appoint an office assistant, jewel appraiser, a
watchman and also salesman. If loan is obtained by pledging the jewels, the quality of the jewels cannot be assessed and the value cannot be fixed
without the assistance of a jewel appraiser. That apart, it is highly impossible for a single employee to do all the work without the administrative
staff since, as per the above said Government Letter, upto Rs. 50 lakhs, the said Bank is eligible only for one Assistant Secretary. The total
functioning of the Bank depends upon paid employees. If one is on leave, practically the functions of the Bank would come to a halt. That part, on
many occasions and on many loans, the Government grants subsidies. If one employee has to manage the entire show, there is every possibility of
the subsidies being misutilised. That apart, in certain Primary Agricultural Co-operative Banks, fertilisers are sold to farmers in small quantities. But,
as per the impugned letter, no salesman can be appointed. Apart from that, one has to pack the fertilisers and weigh the same. Since, as per the
Government Letter, the said Bank cannot appoint either a salesman or an office assistant, practically, the work cannot be carried out. As far as
Primary Agricultural Co-operative Banks are concerned, by G.O.Ms. No. 131 dated 4.6.1999, if the turnover is from Rs. 25 lakhs to Rs. 50
lakhs, 3 employees are permitted and if the turnover is more than Rs. 50 lakhs, then 7 employees are permitted. Whereas as per the impugned
Government Letter dated 7.10.2003, only one employee is permitted which is contrary and counter to the cadre strength fixed by the Government
Order.
As far as Wholesale Stores and Primary Stores are concerned, as per the impugned Government Letter dated 6.10.2003, all sub-staff have to
be appointed only on contract basis, which is against the norms of Industrial Disputes Act, Contract Labour (Regulation & Abolition) Act,
Permanency Act. In the case of Fair Price Shops, where the number of family cards exceed 1000, one salesman is permitted. But, even in case of
Wholesale Stores and Primary Stores which are having family cards below 1000, salesman is required to disburse the provisions to the card-
holders. That apart, there is no provision at all for appointment of packers. If that is so, it would be impossible for the wholesale societies to deliver
the goods to primary societies for distribution in packages. Further, kerosene bunk shops are permitted to engage employees on daily wage basis
on the day of distribution. In the case of cooking gas, a part-time employee is permitted only if the family cards are more than 5000. Even though
the nature of work is perennial, the impugned letter mandates to have only employees on daily wage basis. In the case of petrol bunks, only two bill
clerks on full time basis is permitted and if more employees are required, the Society has to engage only on daily wage basis. As rightly contended
by the learned Counsel for the petitioner, certain co-operative petrol bunks are working round the clock. As such, the optimum cadre strength
fixed with regard to Wholesale Stores and Primary Stores by the impugned Government Letter dated 6.10.2003 does not have any nexus with the
object sought to be achieved and it is also arbitrary and unsustainable.
That apart, in every society, the Secretary is the functional head as per the bye-laws. But, by the impugned Government Letter dated
18.12.2003, only in cases wherein the loan outstanding exceeds Rs. 50 lakhs, one Secretary can be appointed and that only employee has to
admit the members, process the loan applications, verify the records, grant loans, prepare the monthly statement, verify the collection and make
entries, which is practically and highly impossible. Hence, the cadre strength, which has been fixed by the impugned Government Letters is contrary
to the cadre strength fixed by the Government Orders issued basing on the recommendations of the streamlining committee. That apart, when a
power has been given by the statute to a registered society, that cannot be exercised by the 1st respondent. As such, the impugned letters have
been issued by the 1st respondent without jurisdiction. That apart, with regard to the contention of the learned Additional Advocate General that
basing on the judgment in W.A. Nos. 2501 & 2502 of 2001 batch alone, the impugned Government Letters are passed, as per the said judgment,
in societies, where the cadre strength is not fixed, has to adopt special bye-law in conformity with Sub-rule (1) of Rule 149 of the Tamil Nadu Co-
operation, Food and Consumer Protection Department dated 4.7.1995. In the said judgment, no power has been given to the 1st respondent to
fix the optimum cadre strength. That apart, there is no whisper in the said judgment regarding fixation of optimum cadre strength for any society. As
such, the above contention of the learned Additional Advocate General also will not stand. Besides, as per the impugned order, certain posts are
treated as vanishing category. It will affect the avenues of promotion of the employees of the feeder category. In a number of cases, basing on this,
one has to retire in the post to which he was originally recruited. For the reasons stated above, the impugned Government Letters are quashed and
the writ petitions are allowed. No costs. Consequently, connected W.V.M. Ps and W.P.M. Ps are closed.