IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.9.2008 CORAM THE HON'BLE MR.JUSTICE S.J.MUKHOPADHAYA AND THE HON'BLE MR.JUSTICE V.DHANAPALAN Writ Appeal Nos.1103 & 1104 of 2008 The Periyar District Cooperative Land Development Bank Employees' Union (Regd.No.128/PYR), rep. by its General Secretary No.74-E.1, Kavin Nagar Chenniamalai Road Perundurai 638 052 Appellant in Erode District. .. W.A.No.1103/08 K.Selvaraj R.Gurusamy Appellants in P.Panneerselvam .. W.A.No.1104/08 Vs. The State of Tamil Nadu rep. by its Secretary to Government Cooperation, Food & Consumers' Protection Department Secretariat, Chennai 600 009. The Registrar of Coop. Societies No.170, E.V.R.Periyar High Road Respondents 1&2 Kilpauk, Chennai 600 010. .. in both W.As. No.K.598, Perundurai Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Perundurai 638 052, Erode District. No.D.R(L).C-3 Dharapuram Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Dharapuram 638 656 Erode District. https://hcservices.ecourts.gov.in/hcservices/ No.D.R(L).C-7 Kangeyam Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Kangeyam 638 701, Erode District. No.D.R(L).C-1 Vellakoil Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Vellakoil 638 111 Erode District. No.K.517 Kambiliampatty Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Kambiliampatty 638 056 Erode District. No.D.R(L).C-6 Mulanur Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Mulanur 638 106 Erode District. No.K.555.Bhavani Coop. Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Bhavani 638 301 R3 to R9 in Erode District. .. W.A.No.1103/08 The Harur Cooperative Primary Agricultural & Rural Development Bank Ltd. Rep. by its Special Officer Harur 636 903 Respondent-3 in Dharmapuri District. .. W.A.No.1104/08 ----- Appeals against the common order of the learned Single Judge dated 27.6.2008 made in W.P.Nos.8801 and 8826 of 2008. WP 8826 of 2008: A Writ of Certiorarified mandamus callingfor the entire records relating to the impugned orders passed by the first respondent in G.O.Ms.No.186 Cooperation, Food & Consumer Protection Department dated 16.08.2000 and consequential order of the third respondent dated 03.03.2008 and quash the same in so far as the petitioners herein as unlawful and null and void and consequently direct the respondents to allow the salary and other allowances including terminal benefits in terms of the concluded settlements under Section 18(1) of the Industrial Disputes Act, 1947. WP 8801/2008 : A writ of Certiorarified mandamus calling for the entire https://hcservices.ecourts.gov.in/hcservices/ records relating to the impugned orders passed by the first respondent in G.O.Ms.No.186 co-operaation, Food & Consumer Protection Department dated 16.08.2000 and quash the same in so far as the petitioners are concerned as unlawful and null and void and consequently direct the respondents to allow the salary and other allowances including terminal benefits in terms of the concluded settlements under Section 12(3) of the Industrial Disputes Act, 1947. ----- For Appellants : Mr.K.Prem Kumar For Respondents 1&2 : Mr.Raja Kalifullah, Spl.G.P. ----- J U D G M E N T (Delivered by S.J.MUKHOPADHAYA,J.) The appellants, having unsuccessfully challenged G.O.Ms.No.186 dated 16.8.2008 passed by the State Government, Co-operative, Food and Consumer Protection Department, have preferred the above writ appeals. 2. The appellants are Union of Periyar District Co-operative Land Development Bank (hereinafter referred to as the "Bank") and its employees. They challenged the aforesaid G.O.Ms.No.186 dated 16.8.2000 with further prayer to direct the Bank authorities to allow salary and other allowances including terminal benefits in terms of settlement made under Section 12(3) of the Industrial Disputes Act, 1947 or the settlement made under Section 1891) of the Industrial Disputes Act, 1947. 3. By the aforesaid G.O.Ms.No.186 dated 16.8.2000, the State Government fixed the scale of pay of different posts in the Bank. The learned single Judge, giving reference to a decision of a Division Bench of this Court in T.N.V.K.V.V.S.A.P.Madya Sangam v. Deputy Registrar of co-operative Societies [2008 (2) LLN 236], dismissed the writ petition. 4. The learned counsel appearing on behalf of the appellants submitted that the State Government had no jurisdiction to fix the condition of service. The power is vested with the Board of Directors under Section 73 of the Tamil Nadu Co-operative Societies Act, 1983. He further submitted that the settlement made by the Board of Directors with the employees and its Union, either under Section 12(3) or under Section 18(1) of the Industrial Disputes Act, 1947 cannot be annulled by the impugned G.O.Ms.No.186 dated 16.8.2000. 5. The learned Special Government Pleader appearing on behalf of the State, while referring to the Division Bench decision of this Court (cited supra), relied upon Rule 149 of the Tamil Nadu Co-operative Societies Rules, 1988 (for brevity the "Rules"). According to them, the Board of Directors cannot fix the scale of pay without the prior https://hcservices.ecourts.gov.in/hcservices/ approval of the State Government. 6. In this regard, learned counsel for the appellants submitted that Rule 149 was amended vide G.O.Ms.No.373 dated 29.10.2002 whereby the expression "with the prior approval of the Registrar of Co-operative Societies" was deleted and the expression "with the prior approval of the Government" was substituted. 7. We heard the learned counsel for the parties and noticed the rival contentions. 8. In the case of T.N.V.K.V.V.S.A.P.Madya Sangam v. Deputy Registrar of co-operative Societies [2008 (2) LLN 236], the validity of an order passed by the Deputy Registrar of Co-operative Societies (Housing) fell for consideration whereby the authorities directed the concerned Society to cancel the settlement made under Section 19(1) of the Industrial Disputes Act, 1947, based on which, higher scale of pay was fixed and paid to the members of the petitioner Union (Sangam). In the said case, the Division Bench noticed the history for substitution of Rule 149 of the Rules and observed as under: "In fact, Rule 149 of the Rules 1988 came into being by way of G.O.Ms.No.212 dated 4 January 1997, i.e., after the pronouncement of the Division Bench decision reported in Tiruchirapalli Hiruthayapuram Co-operative Bank Employees Union v. Joint Registrar of Co-operative Societies, Tiruchirapalli (vide supra). On the basis of the judgment of the earlier Division bench, the State Government in order to restrain the individual societies entering into such wage settlements without reference to the viability of the concerned co-operative societies thought it fit to incorporate the provision in the Rules by introducing Rule 149." 9. From the aforesaid judgment, it would be evident that the State Government, in order to restrain the individual Society entering into such wage settlements without reference to the viability of the concerned co-operative societies, introduced and incorporated Rule 149 of the Rules. 10. Under Rule 149, every Society have been mandated to frame bye- laws covering the service conditions, including the scale of pay and allowances for each of the post, with the prior approval of the State Government. Rule 149(1) of the Rules is quoted here under: "Rule 149.- Conditions of service of paid officers and servants of Societies.- (1) Every society shall, taking into account its nature of business, volume of transaction and financial position, adopt, with the prior approval of the Government, a Special by-law covering the service conditions of its employees. The special by-law shall, inter alia, prescribe the following: https://hcservices.ecourts.gov.in/hcservices/ (i) Cadre strength and classification of various categories of posts and the qualifications required thereof for each such posts. (ii) The method of recruitment for each such posts. (iii) The scale of pay and allowances for each such posts. (iv) Conditions of probation for each such posts. (v) Duties and responsibilities for each such posts. (vi) Leave for various kinds admissible and, the conditions thereto for each such posts. (vii) The penalties that may be imposed upon, the procedure for taking disciplinary action and inflicting various kinds of punishments on an employee holding each such post and the authority competent to entertain and dispose of appeal made against an order of punishment imposed by the competent authority on a disciplinary proceedings. (viii)Conditions relating to acquisition and disposal of movable and immovable property: Provided that a minimum period of three years of satisfactory service shall be prescribed for eligibility for promotion from one category to the immediate next higher category of post: Provided further that the Co-operative Training at the appropriate level may be prescribed as a necessary qualification for specific categories of non-technical posts. ... " 11. As far as Section 73 of the Tamil Nadu Co-operative Societies Act, 1983 is concerned, the said provision empowers the registered Society to make appointment of paid officers and servants as are necessary for the efficient performance of Sections 74, 75, 76 and 77 and subject to the Rules made in that behalf. In view of Section 73, no Co-operative Society can make any appointment of paid officers in violation of Rule made in that behalf, including Rule 149 of the Rules. 12. In view of the specific mandate made under the Act and Rules, we hold that the Co-operative Societies, including the Bank in question or its Board of Directors, cannot enter into any settlement with regard to wages of paid employees and staffs, without prior approval of the State Government. 13. It is informed that the respondent Bank has not framed any by- law under Rule 149. If no such by-law has been framed by the Bank prescribing the condition of service, such as scale of pay of its employees and staff in that case, it is always open to the State Government to make minimum prescription of the scale of pay to be paid in favour of such employees and staffs. 14. We find no illegality in the impugned Government Orders and therefore, we are not inclined to interfere with the order passed by the https://hcservices.ecourts.gov.in/hcservices/ learned single Judge. Accordingly, the appeals are dismissed. However, there is no order as to costs. Consequently, M.P.No.1 of 2008 is also dismissed. Kpl Sd/- Asst. Registrar /true copy/ Sub Assistant Registrar To 1. The Secretary to Government Cooperation, Food & Consumers' Protection Department Secretariat, Chennai 600 009. 2. The Registrar of Coop. Societies No.170, E.V.R.Periyar High Road Kilpauk, Chennai 600 010. +2 C.Cs TO MR.MR.K.PREMKUMAR Advocate, S.R.NO.34901 & 34902 +1 C.C TO Government Pleader, High Court, S.R.NO.54902 W.A.Nos.1103 & 1104 of 2008. LA (CO) 17/10/2008 https://hcservices.ecourts.gov.in/hcservices/