SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -1- IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR ::: ORDER 1. S.B. Civil Writ Petition No.6887/2009 Pawan Kumar. vs. State of Raj. and ors. 2. S.B. Civil Writ Petition No.6141/2009 Sawan Kumar Saha. vs. Raj. State Cooperative Spinning and Ginning Mills Federation Ltd. and ors. 3. S.B. Civil Writ Petition No.4183/2009 Sushil Kumar vs. Raj. State Cooperative Shrotirya Spinning and Ginning Mills Federation Ltd. and ors. 4. S.B. Civil Writ Petition No.5148/2009 Kalyan Singh. vs. Raj. State Cooperative Spinning and Ginning Mills Federation Ltd. and ors. 5. S.B. Civil Writ Petition No.6888/2009 Satya Narayan. vs. State of Raj. and ors. DATE OF ORDER :: 29.7.2009 SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -2- PRESENT HON'BLE MR. PRAKASH TATIA, J. Mr.SD Vyas a/w Mr.MS Purohit, for petitioners. Mr.CP Trivedi ) for the respondents. Mr.IS Pareek ) ------ BY THE COURT : REPORTABLE Heard learned counsel for the parties. The petitioners are the employees of units of Rajasthan State Cooperative Spinning and Ginning Mills Federation Ltd. (for short 'the federation'). Earlier there were four cooperative societies namely, Rajasthan Cooperative Spinning Mills Ltd., Gulabpura ; Gangapur Cooperative Spinning Mills Ltd., Gangapur ; Ganganagar Sahakari Spinning Mills Ltd., Hanumangarh and Gulabpura Cooperative Ginning Pressing Society Ltd., Gulabpura. These units merged in one society by constituting Rajasthan State Cooperative SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -3- Spinning and Ginning Mills Federation Ltd. The age of superannuation of the employees of the federation was 58 years. Then a decision was taken by the State Government under Rule 39(4) of the Rajasthan Cooperative Societies Rules, 2003 on 17.9.2008 that the age of superannuation of the employee be increased upon fulfilling the conditions for the societies in which there is capital of the State in the society or some fund has been given to the society by the State. The Board of Directors, keeping in mind the interest of the society, may take a decision to increase the age of superannuation from 58 to 60 years. The procedure has been prescribed by the said order dated 17.9.2008 which provides that the societies which are not earning loss in last 3 years and they are earning net profits in last 3 years and in those societies, the strength of the employees is not more than the sanctioned strength of the employees, then the Board of Directors may take a decision to increase the age of superannuation referred above. Not only that, but it has been provided that even if the society is not running in profits in last 3 years or in a society where SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -4- the strength of the employees is more than sanctioned strength, then also the society may take a decision in the interest of the society to increase the age of superannuation from 58 to 60 years. It is provided that if any decision is taken to increase the age of superannuation, then the resolution will be sent to the Registrar, Rajasthan Cooperative Societies, Jaipur. By subsequent order dated 22.9.2008, further procedure was provided that what information will be given to Registrar and how the proposal will be considered by the Registrar and while considering the proposal of the society, what factors will be considered. The factors which are to be considered by the Registrar are that the authorised officer will assess the future profits of the society taking into account the business of the society. If there is accumulated loss, then in how many years that can be wiped out if there are more employees working against the sanctioned strength, then whether their contribution is useful or not. After considering these factors, the Registrar was supposed to take a decision and approve or reject the proposal of increase in the age of SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -5- superannuation of the employees. The petitioner's case is that a resolution (Annex.4) was taken by the Federation clearly stating therein that out of last 3 years, for 2 years, the Federation is running in profit. The sanctioned strength of the employees is 389 which has been modified to 269 and existing employees are 245. Out of 245 employees, 70 have been sent on deputation. The Federation observed that the strength of staff is less and there is no possibility of fresh appointments as there is ban imposed by the State Government against the new appointments and for taking in employment on contract basis, the State Government's prior approval is needed which takes too much time. After considering the relevant facts, the Federation decided to resolve for increase of the age of superannuation of its employees from 58 to 60 years. The said resolution was sent for approval of the Registrar and vide communication dated 23.10.2008, the proposal was rejected by the office of the Registrar, Cooperative Societies. The petitioners, therefore, have preferred SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -6- these writ petitions to challenge the decision of the Registrar dated 23.10.2008. Replies have been filed by the Federation who took the decision to increase the age of superannuation but opposing the writ petition seriously on the strength of rejection of their proposal made by the Registrar. It has been vehemently submitted that the Federation is running in huge losses and, therefore, the age of superannuation of the employees cannot be increased. This Court directed the Federation to submit additional affidavit and explain the situation that how the Federation itself has taken a decision of increasing the age of superannuation after clearly stating that the Federation is running in profits in last 2 years out of 3 years. In the additional affidavit, it has been stated and learned counsel for Federation drew my attention to the various copies of the orders submitted along with additional affidavit to show that the Federation was running in huge losses and it is given aid by the State Government under the SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -7- Act of 1961 and because of that aid only, the Federation is running. It is also pointed out by learned counsel for Federation that the consolidated income of Federation clearly shows that the Federation has accumulated losses and the Federation though runs in profit for 2 years in last 3 years but in immediately preceding year, the Federation was in loss. In view of the above, learned counsel for the respondent vehemently submitted that the decision of the Federation to increase the age of employees was an erroneous decision and, therefore, the order passed by the Registrar is just and legal. Learned counsel for the Federation in support of his contention relied upon the judgment of the Hon'ble Supreme Court delivered in the case of K. Nagaraj and ors. vs. State of Andhra Pradesh and anr. reported in AIR 1985 SC 551 and one judgment of this Court delivered in Prasann Kumar vs. Rajasthan Cooperative Dairy Federation Ltd. & Anr. (S.B. Civil Writ Petition No.3710/2004). Learned counsel for the Federation also pointed out that not only this but even a committee has been constituted by the State SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -8- Government on 5.6.2009 and that committee will look into the issues about financial condition of Federation and its running and whether this Federation may be continued or not and in case, the Federation is closed, where the employees be absorbed. Copy of this order dated 5.6.2009 has been placed on record as Annex.R.3/2 in writ petition no.6141/2009 Learned counsel for the State also justified the order passed by the Registrar, Cooperative societies. I considered the submissions of learned counsel for the parties and perused the facts of the case as well as the documents placed on record and also perused the judgments relied upon by learned counsel for the respondents. It will be worthwhile to mention here that learned counsel for the Federation pointed out that before Annex.4, placed on record by the petitioner, a resolution was passed by the Board of Directors of the respondent Federation on SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -9- 26.9.2008 to increase the age of superannuation of the employees of the society from 58 years to 60 years and that was rejected by the Registrar, Cooperative Societies by the impugned order dated 23.10.2008 and learned counsel for the respondent Federation further submitted that another resolution (in fact, it was not new resolution but it is approval of earlier resolution only) was passed by the Federation on 21.11.2008, copy of which has been placed on record by the petitioner as Annex.4 in S.B. Civil Writ Petition No.6141/2009, which copy was given to the petitioner when he applied under Right to Information Act. Meaning thereby, even after rejection of the first resolution of the Federation to increase the age of superannuation of its employees from 58 to 60 years by the Registrar, the Federation approved the resolution dated 26.9.2008 by reiterating it which appears to be verbatim the same as the resolution of 26.9.2008. Be it as it may be, even after resolutions of Federation to increase the age of superannuation of its employees, the Federation is opposing the increase of age of superannuation of SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -10- the employees on the ground that it has accumulated losses running into crores and the decision taken by them was wrong. From the facts mentioned above, it is clear that the State Government issued the order on 17.9.2008 empowering the Board of Directors of the cooperative societies to take a decision whether it will be in the interest of the society to increase the superannuation age of its employees and while doing so, they were required to take care of the fact that the society must not only not run in loss but also must be running in profits for last 3 years and the employees strength must not be more than the sanctioned strength and the increase of age of superannuation is also in the interest of the society. That is one part of the order dated 17.9.2008. The second part of the order dated 17.9.2008 gives liberty to even those societies to increase the age of superannuation of the employees which are not running in profits for last 3 years and even the society is running in losses. However, it has not been made clear whether the society which is SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -11- running in losses for all the last 3 years can also take the resolution to increase the age of superannuation from 58 to 60 years. In the present case, even the respondents' own case is that the Federation suffered loss in 1 year out of last 3 years and that is fact position further fortified from the documents placed on record by the respondents along with additional affidavit. The running in loss in one year is no disqualification for taking a resolution to increase the age of superannuation from 58 to 60 years in view of sub- clause (kha) of Clause (2) of the order of State Government dated 17.9.2008. Therefore, that cannot be a ground for straightway rejection of the resolution taken by the Board of Directors of the society. The another contention raised by learned counsel for the Federation is that there is huge accumulated loss in the account of the respondent Federation. That may be true but that itself is no ground for rejection of the proposal of the Board of Directors taken consciously by mentioning that even in last three years, the Federation is SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -12- running in profits for last two years. It cannot be presumed that the Board of Directors did not had any knowledge that the State is giving aid to the Federation or they had no knowledge that the State Government has constituted the committee for examining the affairs of the Federation. The Board of Directors clearly mentioned in their resolution that out of last three years, the society is running in profit only in two years. If merely because no details of accumulated losses and aid of Government has been referred, it cannot be presumed that the Board of Directors while taking said decision had not considered those aspects. If that is to be presumed against the Board of Directors simply because there is no mention of detail facts in their resolution, then the same is position in the order of the Registrar who also did not gave any reason for his satisfaction for rejection of the resolution of the Board of Directors of the Federation. Even accumulated loss in the account of the society itself is no ground for rejection of the resolution of the Board of Directors as it is not SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -13- provided in the order dated 17.9.2008 and only it has been provided that either the society should be in profit in last three years or even it may not be so. If the intention was to debar all societies from increasing the age of superannuation which have accumulated loss as on 17.9.2008 or as on the date of meeting of the Board of Directors than there would not have any reason to look into financial position of the society for last three years as accumulated losses itself would have disentitled the societies in taking such resolution of increase of age of superannuation. Further, the State Government in its order dated 22.9.2008 clearly mentioned that even if there is accumulated loss in the account of the society, then also on this ground, the Registrar, Cooperative Societies straightaway was not supposed to reject the decision of the Board of Directors to increase the age of superannuation from 58 years to 60 years. Further, what the Registrar could have done is that he could have assessed that in how many years, the accumulated loss can be wiped out. Therefore, the order passed by the Registrar with this one reason and by SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -14- ignoring the order dated 22.9.2008, the rejection of the proposal of the Board of Directors is quite contrary to the State Government's order dated 22.9.2008. If we take into the other contentions submitted by learned counsel for the federation, then it is a fact that the Federation was running in losses since long. Since long the Federation is given aid by the State government under the provisions of the Act of 1961 and it is still going on as per learned counsel for the federation, therefore, for all these years, the State Government did not thought it fit to close down the Federation. Till the Federation is closed, the Board of Directors are competent to take decision about all matters for which they are empowered and the employees have legitimate right to claim benefit of the policy framed by the State itself. It is not a case where the employees are demanding certain benefits and seeking direction against the State to give benefit for no decision has been taken by the State Government. It is a case where the State has decided to give benefit SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -15- to the employees of all the cooperative societies. Once the State has taken a decision to give benefit and put certain conditions than upon fulfilling the conditions, the employees become entitled to the benefit offered by the State itself. If there are some restrictions, then beyond those restrictions, no restrictions can be imposed and the State's authority arbitrarily cannot reject the decision of the societies taken in accordance with law. The State Government in the order dated 17.9.2008 very specifically gave a reference of the Rule under which they have power to issue this order. It will be worthwhile that the order of the State Government is not under challenge and learned counsel for the Federation relied upon the judgment of this Court delivered in the case of Prasann Kumar (supra) wherein also it has been held that a policy decision or order passed by the State Government under the provisions of the society are valid binding and no relief can be granted against the policy decision. That judgment fully supports the petitioners in as much as, the SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -16- petitioners are not claiming any relief against the Government's own decision but they are claiming relief under the orders passed by the State Government. At this juncture, this Court is constrained to observe that the Federation who took the decision, knowing it well that the Federation has accumulated losses and the Federation earned profits for 2 years in last 3 years and will have difficulty in running the unit because of ban against the fresh appointment and, therefore, the age of superannuation of the existing employees be increased, then how the Federation could have assailed its own decision ? In the reply affidavit nothing has come on the record which suggests that the Federation as a whole committed a blunder or ignored all facts and thereafter took the decision to increase the age of superannuation from 58 to 60 years. It will be shocking that after rejection of the resolution of the Board of Directors by the Registrar on the ground of poor financial SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -17- condition of the Federation, the Federation approved the decision datedd 26.9.2008 on 21.11.2008 i.e. after the order of the Registrar dated 23.10.2008 and yet they are justifying the order dated 23.10.2008 passed by the Registrar. If the Federation and its Board of Directors were of the view that the order of the Registrar was just and legal and in the interest of Federation, then if there was any need, could have withdrawn their earlier resolution. At this stage, learned counsel for federation tried to justify the resolution dated 21.11.2008 by saying that in the meeting of 21.11.2008, previous meeting was approved by the Board of Directors. However, though this contention has not been stated as such in the reply, since learned counsel for Federation stated so, then it is important that the respondents should have made it clear in the reply and at that time, could have taken a resolution that the proposal of the Federation has been rejected and, therefore, there is no need to approve the minutes and the minutes should have been modified or withdrawn. SBCWP No.6887/2009 Pawan Kumar. Vs. State of Raj. & Ors alongwith other connected matters. -18- In view of the above reasons, all these writ petitions are allowed and the order of the Registrar, Cooperative Societies dated 23.10.2008 is set aside. In view of the fact that the Board of Directors took a decision to increase the age of superannuation from 58 to 60 years and loss to Federation in one year is no bar in increasing the age of superannuation and accumulated loss is also no bar, therefore, the petitioners, who have been superannuated, shall be allowed to continue till the age of 60 years. (PRAKASH TATIA), J. S.Phophaliya/-