IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 17TH SEPTEMBER 2009 / 26TH BHADRA 1931 WP(C).No. 37490 of 2007(K) -------------------------- PETITIONER(S): --------------- 1. V.J. SEBASTIAN, SECRETARY, MELUKAVU HOUSING CO-OPERATIVE SOCIETY LTD.NO.K.671, MELUKAVUMATTOM P.O., KOTTAYAM. 2. JOSE MATHEW, ATTENDER, MELUKAVU HOUSING CO-OPERATIVE SOCIETY LTD.NO.K.671, MELUKAVUMATTOM P.O., KOTTAYAM. BY ADV. SRI.JOSE J.MATHAIKAL RESPONDENT(S): --------------- 1. THE STATE OF KERALA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM. 2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, KOTTAYAM. 3. THE MELUKAVU HOUSING CO-OPERATIVE SOCIETY LTD.NO.K.671, MELUKAVUMATTOM P.O., KOTTAYAM, REPRESENTED BY ITS PRESIDENT. BY GOVERNMENT PLEADER MR. K.S.MOHAMMED HASHIM FOR R1 ADV SRI.K.G.CLEETUS THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/09/2009, THE COURT ON DELIVERED THE FOLLOWING: WP(C).No. 37490 of 2007(K) APPENDIX PETITIONERS EXHIBITS: EXT.P1 - TRUE COPY OF THE ORDER DATED 10.2.1998 BY SECOND RESPONDENT. EXT.P2 - TRUE COPY OF THE JUDGMENT DATED 23.12.2005 IN O.P. NO. 6758 OF 1998. EXT.P3 - TRUE COPY OF APPEAL PETITION DATED 27.2.2007. EXT.P4 - TRUE COPY OF THE GO(RT) NO. 742/2007/COOP DATED 30.11.2007. EXT.P5 - TRUE COPY OF GENERAL BODY RESOLUTION NO.6 DATED 6.1.2008. // TRUE COPY // PA TO JUDGE rhs S. SIRI JAGAN, J ............................................... W.P(C) No. 37490 of 2007 ................................................. Dated this the 17th day of September, 2009 J U D G M E N T Petitioners are the only two employees of the 3rd respondent Co-operative Society. It is a housing society. Entire work of the society is carried out by them. The society is running on a profit. The profit is stated to be only because of the hard work put in by the petitioners. Recognising the devotion to the work of the petitioners, the society decided to give them additional payment of one month's salary in an year. Every year amount has been so paid from 1986 onwards. But in 1998, the 2nd respondent Joint Registrar of Co-operative Societies objected to such payment and by Ext.P1, directed recovery of the additional amounts paid to the petitioners, petitioners challenged the same before this court by filing O.P. No. 6758 of 1998 in which by Ext.P2 judgment petitioners were relegated to the remedy by way of appeal before the Government. Petitioners appeals were rejected by Ext.P4 order. Petitioners are challenging Exts.P1 and P4 orders. W.P(C) No. 37490 of 2007 -2- 2. According to the petitioners, they have not done anything wrong in the matter. It is recognizing their devoted work, which has resulted in huge profit to the society, that the society decided to give them one month's salary in addition to the normal salary which can be termed as bonus. For the last so many years such amounts have been paid to the petitioners. It would be a travesty of justice, if the petitioners are directed to refund the same is the contention raised. A counter affidavit is filed by the 2nd respondent supporting the impugned orders. According to the 2nd respondent a Co-operative society registered under the Kerala Co-operative Societies Act is bound by the Act, Rules and orders issued by the Government in the matter of payment of salary and other benefits to its employees. There is no provision of law enabling a society to simply pay to its employees amounts as chosen by the society. A society does not have any such powers to give away money belonging to the society to some of its employees. Therefore such unauthorized payment has to be recovered is the contention raised. 3. I have considered the rival contentions in detail. 4. I have no doubt in my mind that a society is bound by W.P(C) No. 37490 of 2007 -3- the Kerala Co-operative Society Act and Rules and cannot distribute money as they please to their employees. Salary and other benefits have to be paid only in accordance with law. Therefore I am not inclined to hold that the impugned orders are totally unsustainable. 5. However, I find that the society is a profit making society and these two employees are the only employees of the society. Therefore the profits made by the society can only be on account of the hard work put in by these petitioners. At this point of time, if the petitioners are directed to refund the entire amount received by them, such lowly paid employees may not be in a position to muster enough money to refund the same. Therefore I am of opinion that some amounts which can be properly be computed as bonus can be allowed to be retained by the petitioners from the amounts unauthorisedly received by them. In fact, such a benefit is supported by the 2nd respondent in their counter affidavit. In paragraph 3 of the counter affidavit it is stated thus: “3. The third respondent society is registered under the Co-operative Societies Act and Rules. Therefore the third respondent is liable to follow the mandates of Kerala Co-operative Societies Act and Rules and other regulations issued by the government as well as the Registrar of Co-operative Society. The salary other allowances of employees of Co-operative W.P(C) No. 37490 of 2007 -4- Society and their staff pattern etc. are fixed by the authority by taking into consideration of the financial position of the society. This is being done by the Registrar of Co-operative Societies on the basis of relevant government orders and guidelines in that behalf. As per circular issued by the Registrar of Co- operative Societies the bonus to an employee can be released at the rate of 8.33% of the salary. But the bonus shall not be exceeded Rs.2,500 per year. In the case of the societies having allocable surplus it may give 20% of salary as allowances but the salary for the purpose of bonus is limited to Rs.2,500/- per month. Therefore 20% of Rs.30,000/- (2,500x12) which will come to Rs.60,000/- alone can be released to the employees.” 6. However the calculation of amount therein is mistaken. Actually the amounts so payable if recokoned as bonus would only by Rs. 6,000/- per year and not Rs.60,000/-. Accordingly, I dispose of this writ petition with a direction that from the amounts refundable by the petitioners as per the impugned orders an amount at the rate of Rs.6,000/- per year shall be adjusted as bonus paid to the petitioners. However, I make it clear that petitioners would not be eligible to such payment after the date of Ext.P1. The petitioners shall be permitted to refund the balance amount in reasonable instalments. The writ petition is disposed of as above. S. SIRI JAGAN, JUDGE rhs