IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.10700 of 1989 Date of decision: 14th November, 2011 Wali Deen and others … Petitioners Versus Registrar, Cooperative Societies, Haryana and others … Respondents CORAM: HON’BLE MR. JUSTICE RANJAN GOGOI, CHIEF JUSTICE HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. S.S. Dalal, Advocate for the petitioners. Mr. Randhir Singh, Additional Advocate General, Haryana for the State. 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. Whether to be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? KANWALJIT SINGH AHLUWALIA, J. By way of present petition, the petitioners have challenged the amended Rule 1.3 and 1.3 (A) of the Haryana State Central Cooperatives Consumer’s Stores Staff Service (hereinafter referred to as the Common Cadre Rules) on the ground that the said amended Rules are unconstitutional and against the provisions of law. Civil Writ Petition No.10700 of 1989 Briefly, the case of the petitioners is that they are the employees of Haryana State Federation of Consumer’s Wholesale Stores Limited, Chandigarh (hereinafter referred to as ‘CONFED’). It has been averred that CONFED is a cooperative society registered under the Punjab Cooperative Societies Act, 1961. It has been further averred that the petitioners were appointed as salesman by the Managing Director of CONFED. In the year 1979, the respondent federation CONFED framed the Haryana State Central Cooperatives Consumer’s Stores Staff Service (Common Cadre Rules). Such rules were framed with the prior approval of the Registrar as required under the Section 84-A of the Punjab Cooperative Societies Act, 1961. Section 84-A basically provides for the constitution of the common cadre of all or specific class of employees in the service of the said societies. The Common Cadre Rules were applicable to all the employees including salesman except Class IV employees. Under the Common Cadre Rules the employees could be transferred from one store to another store in the State which were members of CONFED. The employees could also be transferred in the branches of the CONFED throughout the State. In the year 1983, the respondent federation amended Rule 1.3 and 1.3 (A) of the Common Cadre Rules. By virtue of this amendment, the post of salesman, drivers, clerks, helpers and store- keepers were brought out of the ambit of the Common Cadre Rules and all the employees who were holding the above-mentioned posts were ordered to be allocated, to the stores where-ever the employees were working. The relevant provisions of Common Cadre Rules framed in the year 1979 along with the amended Rules, 1983 as mentioned in para 7 of the petition are being reproduced below: 2 Civil Writ Petition No.10700 of 1989 “ Existing Rules Amended Rules 1.3) These rules shall apply to all employees of the State Federation and Central Coop. Cons. Stores except Class-IV employees of the Federation and Central Coop. Cons. Stores who are not borne on the common Cadre. Provided that in case of the employees whose services are lend to the Federation or the Govt. or any other agency by the Registrar, Coop. Societies, Haryana, these rules shall apply only to such extent as may be specified in the terms and conditions of deputation agreed upon with the competent authority; Further provided that the existing employees of the Federation/ Stores covered by these rules, shall be taken over on the Common Cadre provided they had been promoted/recruited by the competent authority. 1.3) These rules shall apply to all employees of the State Federation and Central Coop. Cons. Stores except helpers, peons, drivers, Salesmen, Clerks and Store- keepers. The above categories of employees viz. Helpers, Peons, Drivers, Salesmen, Clerks and Store-keepers working with Central Coop. Cons. Stores, shall not be borne on the common cadre of the Federation. Provided that in case of employees whose services are lent to the Federation by the Govt./Registrar or any other institution, these rules shall apply only to such extent as are specified in the terms and conditions of deputation agreed upon by the competent authority; Provided further that all Helpers, Peons, Drivers, Salesmen, Clerks and Store-keepers working in Cooperative Stores on the date of enforcement of these rules shall stand allocated to the stores where they are working; 3 Civil Writ Petition No.10700 of 1989 Provided further that an employees aggrieved of above allocation may make an appeal to Staff Committee of the Federation for change in allocation within six months of the date of enforcement of these rules. The decision of the Staff Committee, thereon, shall be final; Provided further that Store- keepers employed by the Central Coop. Cons. Stores shall be eligible for promotion to the rank of Asstt. Manager borne on the Common Cadre of the Federation. The Federation shall prepare a joint seniority list of Store-keepers working both in Stores and Federation for purposes of promotion. 1.3(A) Notwithstanding anything contained in any resolution of bye- laws of the State Federation or a Central Coop. Cons. Store, the State Federation or a Central Coop. Cons. Store shall not make any appointment beyond the sanctioned Staff strength. 4 Civil Writ Petition No.10700 of 1989 Provided that the Committee of the State Federation or of a Central Coop. Cons. Store shall sanction Staff strength with the prior approval of the Registrar. Provided further that all future vacancies occurring in Central Coop. Cons. Stores shall be reported to the State Federation for providing suitable incumbents who may, on their discretion, lend the services of suitable persons on deputation or provide suitable persons for appointment to work against the vacancies and that fresh recruitment shall only be made by a Central Coop. Cons. Store after obtaining Non- Availability Certificate from the State Federation.” The main contention of the counsel for the petitioners is that Common Cadre Rules were framed under Section 84-A of the Punjab Cooperative Societies Act, 1961 which provide that the Registrar may require the society to constitute a common cadre of all or specific class of employees. The section further provides that when the common cadre is constituted the society shall with the prior approval of the Registrar, make rules for the regulation of recruitment and conditions of service of such employees. Section 84-A reads as under: “84-A. Constitution of common cadre of employees of certain societies:- (1) An apex society may suo moto, and when required to do so by the Registrar, shall constitute a common cadre of all or specified class of 5 Civil Writ Petition No.10700 of 1989 employees in the service of that society or in the service of the central societies which are members of the Apex Society or in the service of the primary societies which are members of the apex society or the aforesaid societies. (2) When a common cadre of employees is constituted under sub-section (1), the Registrar, shall, notwithstanding anything contained in any law for the time being in force or any agreement, settlement or award, determine the pay scales and allowances admissible to such employees and apex Society shall make rules for the regulation of recruitment and conditions of service of such employees with the prior approval of the Registrar. Provided that no such employee shall be allowed dearness allowance at a rate higher than that admissible to the employees of the Government drawing pay at the same rate.” It has been urged that bare perusal of Section 84-A reveals that the same does not make any provision for addition or deletion of any class of employees in the Common Cadre. It has been argued that neither Section 84-A nor any other provision of the Punjab Cooperative Societies Act, 1961 allows the cooperative society to delete any class of employees from the Common Cadre. To buttress his submission, counsel for the petitioners has placed reliance on Section 37 of the Haryana Cooperative Societies Act which specifically empowers the Registrar to delete any class of employees from the common cadre in consultation with the society. Section 37 reads as under: “37. Constitution of common cadre:- (1) The Registrar may require an apex society to constitute a common cadre of all or a specific class of employees in the service of that society or in the services of the central societies which are members of the apex society, or of the 6 Civil Writ Petition No.10700 of 1989 service of the primary societies which are members of the apex society or the aforesaid central societies. (2) When a common cadre is constituted under sub- section (1), the Registrar shall make rules to regulate recruitment and the conditions of service of such employees, and their strength in consultation with the cadre society: Provided that the Registrar may add or delete any class of employees from the common cadre in consultation with the cadre society.” It would be pertinent to mention that Punjab Cooperative Societies Act, 1961 which was applicable to State of Haryana was repealed and was replaced by the Haryana Cooperative Societies Act which came into force on 15.10.1984. By comparing the two provisions it has been argued by Mr. S.S. Dalal, learned counsel for the petitioners that when the Common Cadre Rules were amended in the year 1983 there was no provision by virtue of which a class of employees could be deleted from the Common Cadre. It was only when the Haryana Cooperative Societies Act came into effect the Registrar could have deleted any class of employees from the Common Cadre. Thus, when the Common Cadre Rules were amended in the year 1983, the same were without the mandate of law and thus are liable to be set aside. The learned counsel appearing for the State has argued that the contention of the petitioners is devoid of any merit as the petitioners have challenged the vires of the Rules only in the year 1989 by which time Haryana Cooperative Societies Act had come into force. The counsel has adverted to the provisions of Section 22 of Punjab General Clauses Act, 1898 which contains the same principle as enshrined in 7 Civil Writ Petition No.10700 of 1989 Section 24 of General Clauses Act, 1897 in support of his submissions. Both the provisions are being reproduced below: “22. Continuation of orders, etc. issued under enactments repealed and re-enacted- Where any Punjab Act is repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, form or bye- law made or issued under the repealed Act, shall so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment notification, order, scheme, rule, form or bye-law made or issued by under the provisions so re-enacted.” “24. Continuation of orders, etc, issued under enactments repealed and re-enacted - Where any (Central Act) or Regulation, is after the commencement of this Act, repealed and reenacted with or without modification, then, unless it is otherwise expressly provided any (appointment notification) order, scheme, rule, form or bye-law (made or) issued under the repealed Act or Regulation shall, so far as it is not inconsistent with the provisions re-enacted, continue in force and be deemed to have been (made or) issued under the provisions so reenacted, unless and until it is superseded by any (appointment, notification) order, scheme, rule, form or bye- law, (made or) issued under the provisions so re-enacted (and when any (Central Act) or Regulation, which, by a notification under Section 5 or 5A of the Scheduled Districts Act, 1874 (14 of 1874) or any like law, has been extended to any local area, has, by a subsequent notification, been withdrawn form the re-extended to such area or any part thereof, the provisions of such Act or Regulations shall be 8 Civil Writ Petition No.10700 of 1989 deemed to have been repealed and re-enacted in such area or part within the meaning of this Section.” By placing reliance on the provision of Section 22 of Punjab General Clauses Act, 1898 which would be applicable in the instant case, it has been argued that as per this provision all orders, rules or bye-laws passed under the repealed act would continue when the new act is re-enacted in the same and substantially similar terms. Since Haryana Cooperative Societies Act, has come into existence after the repeal of Punjab Cooperative Societies Act, 1961 and is re-enacted in somewhat similar terms therefore by virtue of Section 22, all rules made under the Punjab Cooperative Societies Act, 1961 would be deemed to be passed under the Haryana Cooperative Societies Act. It has been therefore urged that rules under challenge which were initially made under Punjab Cooperative Societies Act, 1961, after its repeal will now be deemed to be passed under Haryana Cooperative Societies Act. Hence, since under the Haryana Cooperative Societies Act the Registrar was competent to delete any class of employees from the common cadre, the petitioners are precluded to challenge the legality of the said rules. It is the contention of the counsel for the petitioner that even if there was any illegality, the same stands cured in view of the provision of the Punjab General Clauses Act. We have heard learned counsel for the State. No doubt, the reading of the provision would depict that in case an Act is replaced by another Act, any notification, rule, bye-law or appointment made under the old Act, may be deemed to continue under the re-enacted law provided the modifications in the new Act are not repugnant to the old Act. However, we are not inclined to accept the contention of the counsel 9 Civil Writ Petition No.10700 of 1989 for the State as provisions of General Clauses Act will apply to a valid enactment or rule. As has been held by the Allahabad High Court in the case of ‘Jairam Singh and others v. State of Uttar Pradesh and another’, AIR 1962 All. 350 that this principle will only apply when the enactment is valid. But if the enactment is unconstitutional, it shall be presumed that the Act had never been passed. It was further held that the provisions of General Clauses Act will not apply to an enactment which never existed in the eyes of law. Therefore, if the rules under challenge are deemed to be unconstitutional under the Punjab Cooperative Societies Act, 1961, they are deemed to have never existed in the eyes of law and subsequent re-enactment of Haryana Cooperative Societies Act will not in any manner validate the rules which were otherwise found to be ultra-vires of Punjab Cooperative Societies Act, 1961. Therefore, it will be incumbent for the respondents to demonstrate that the rules under challenge were validly enacted and subsequent enactment of Haryana Cooperative Societies Act wherein the power was given to the Registrar will have no bearing on the validity of the rules. It has been next urged by the counsel for the State that the contention of counsel for the petitioners that there was no power to add or delete any category of employees in the Common Cadre Rules is misconceived. It has been argued that from the bare perusal of Section 84-A of Punjab Cooperative Societies Act, 1961 it is apparent that the Registrar can require the Apex society to constitute a common cadre of all or specific class of employees and after the constitution of the common cadre the apex society can make rules for regulation of recruitment and conditions of service of such employees. It has been urged that since the Registrar can require the Apex society to constitute 10 Civil Writ Petition No.10700 of 1989 a common cadre of specific class of employees, it is implicit that the Apex society with the permission of the Registrar can remove a class of employees from the common cadre. To substantiate his argument, counsel has placed reliance on Sections 14 and 19 of Punjab General Clauses Act, 1898 which read as under: “14. Power to appoint to include power to suspend or dismiss – Where, by any Punjab Act a power to make any appointment is conferred, then, unless a different intention appears, the authority having for the time being power to make the appointment shall also have power to suspend or dismiss any person appointed whether by itself or any other authority by it in exercise of that power. XXXX XXXX XXXX XXXX XXXX XXXX 19. Power to make to include power to add to, amend, vary, or rescind orders, rules or bye-laws – Where, by any Punjab Act a power to issue notifications or make orders, rules or bye-laws is conferred, then that power includes a power exercisable in the like manner and subject to like sanction and conditions (if any) to add, to amend, vary or rescind any notifications, orders, rules or bye-laws so issued or made.” It is pertinent to mention that the above-mentioned provisions are similar to Sections 16 and 21 of General Clauses Act, 1897. The counsel for the State has further placed reliance on ‘Sampat Prakash v. State of J&K’ AIR 1970 SC 1118 and ‘Union of India and Others v. Indian Charge Chrome and Another’ (1999) 7 SCC 314 to fortify his submissions. The contention of the counsel for the State is that since there is a power to constitute a common cadre consisting of all or specific class of employees, inherent in it is the power to remove a class 11 Civil Writ Petition No.10700 of 1989 of employees from the common cadre. He has further drawn our attention to the decision in Sampat Prakash case wherein principles contained in Section 21 of the General Clauses Act have been applied for interpretation of the Constitution as well. In the said case it was held as under: “On the face of it, the submission that Section 21 cannot be applied to the interpretation of the Constitution will lead to anomalies which can only be avoided by holding that the rule laid down in this section is fully applicable to all the provisions of the Constitution. As an example, under Article 77(3), the President, and, under Article 166(3), the Governor of a State are empowered to make rules for the more convenient transaction of the business of the Government of India or the Government of the State, as the case may be, and for the allocation among Ministers of the said business. If, for the interpretation of these provisions, Section 21 of the General Clauses Act is not applied, the result would be that the rules once made by the President or a Governor would become inflexible and the allocation of the business among the Ministers would for ever remain as laid down in the first rules. Clearly, the power of amending these rules from time to time to suit changing situations must be held to exist and that power can only be found in these articles by applying Section 21 of the General clauses Act. There are other similar rule-making powers, such as the power of making service rules under Article 309 of the Constitution. That power must also be exercisable from time to time and must include within it the power to add to, amend, vary or rescind any of those rules. The submission that Section 21 of the General Clauses Act cannot be held to be applicable for interpretation of the Constitution must, therefore, be rejected.” 12 Civil Writ Petition No.10700 of 1989 Similarly in a recent decision in the case of ‘Shree Sidhbali Steels v. State of U.P.’, (2011) 3 SCC 193 it has held by the Hon’ble Supreme Court as under: “Section 21 is based on the principle that power to create includes the power to destroy and also the power to alter what is created. Section 21, amongst other things, specifically deals with power to add to, amend, vary or rescind the notifications. The power to rescind a notification is inherent in the power to issue the notification without any limitations or conditions. Section 21 embodies a rule of construction. The nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification, etc. However, there is no manner of doubt that the exercise of power to make subordinate legislation includes the power to rescind the same. This is made clear by Section 21. On that analogy an administrative decision is revocable while a judicial decision is not revocable except in special circumstances. Exercise of power of a subordinate legislation will be prospective and cannot be retrospective unless the statute authorises such an exercise expressly or by necessary implication. 39. The principle laid down in Section 21 is of general application. The power to rescind mentioned in Section 21 is without limitations or conditions. It is not a power so limited as to be exercised only once. The power can be exercised from time to time having regard to the exigency of time.” We are in agreement with the counsel for the State that the principle enshrined in Section 19 of Punjab General Clauses Act, 1898 will be applicable to the instant case. If the contention of the counsel for the petitioners is accepted it will lead to absurd conclusion as it would imply that though the Registrar can require the Apex Society to create a 13 Civil Writ Petition No.10700 of 1989 common cadre of all or specified class employees but once the common cadre is created he has no power to add or delete any class of employees to the common cadre. As has been held by the courts on various occasions inherent in the power to create, is the power to alter and destroy also. Thus, we hold that inherent in the power to constitute a common cadre of all or specified class of employees is the power to alter and therefore in the same way a common cadre can be created of all or specified class of employees, by following the same procedure any class of employees can be added to or deleted from the common cadre. In view of the above-mentioned discussion we find no merit in the contention of the counsel for the petitioners and hold that under the Act, any class of employees can be deleted from the common cadre by following the proper procedure. Before parting, we would also like to record that counsel for the State had also argued that the petition suffers from delay and laches. However, since the matter had been pending in this Court for a long time we have examined the case on merits. We however find some merit in the contention of counsel for the State that in equity also petitioners are estopped from raising this claim. It has been brought to our notice by the counsel for the State that when the rules were amended in the year 1983 all employees were given an opportunity to file an appeal. However, the petitioners wanted to work in the stores, which were near to their respective native villages, so they did not file any appeal and were absorbed in their local stores. It is only when the Stores could not pay their salaries, they have challenged the validity of the rules at a belated stage. Therefore, after having heard the counsel for the parties and examined the record, we hold that no case in law or in equity is made out 14 Civil Writ Petition No.10700 of 1989 in favour of the petitioners. Resultantly, the present petition is dismissed being devoid of any merit. No order as to costs. [RANJAN GOGOI] CHIEF JUSTICE [KANWALJIT SINGH AHLUWALIA] JUDGE November 14, 2011 rps 15