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2002 DIGILAW 171 (KER)

M. M. Rajappan v. R. Vasudevan Nair

2002-03-11

K.BALAKRISHNAN NAIR, K.S.RADHAKRISHNAN

body2002
Judgment :- Radhakrishnan, J. The question that has come up for consideration in this case is whether Rule 200 of the Kerala Co-operative Societies Rules, 1969 would save the right of the writ petitioner who had entered service prior to 1.1.1974 for promotion to the post of General Manager de hors sub-section (3A) of Section 80 of the Kerala Co-operative societies Act and Sub-rule (4) of Rule 185 read with sub-rule (1B) of Rule 186(1) of the Kerala Co-operative Societies Rules. Learned single judge took the view that the Rule 200 would still save the petitioner and allowed the writ petition and quashed Ext. P4 letter dated 31.3.2001 of the Joint Registrar and directed the Registrar of Co-operative Societies to accord sanction for appointment as General Manager. 2 Writ petitioner entered service of the Idukki District Co-operative Bank prior to 1.1.1974 and is now working as Senior Deputy General Manager of the Bank. He had B.com with Co-operation which was sufficient qualification for promotion to the post of General Manager prior to the coming into force of Rule 185 of the Rules. As per Clause 33(iii) of the bye-laws of the Bank post of General Manager could be filled up by promotion with the prior approval of the Registrar of Co-operative Societies. The Bank however passed a resolution dated 29.11.2000 resolving to promote the petitioner as General Manager and sought approval of the Registrar of Co-operative Societies. Resolution was forwarded by letter dated 30.11.2000 to the Registrar of Co-operative Societies which stated that as per Rule 200 of the Co-operative Societies Rules writ petitioner is eligible for promotion to the post of General Manager though entered service prior to 1.1.1974. Writ petitioner was then posted as General Manager on 1.1.2001. 3. Registrar of co-operative Societies by letter dated 31.3.2001 however refused approval stating that as per G.O. (P) No. 68/99/Co-op. dated 19.4.1999 substantive vacancies in the post of General Manager of District Co-operative Bank be filled up only by direct recruitment. It was also stated that retrospective effect was not given to the said order nor would the incumbent get protection under Rule 200 of the Kerala Co-operative Societies Rules. Aggrieved by the refusal of the Registrar of Co-operative Societies to approve the appointment, writ petition was preferred. 4. It was also stated that retrospective effect was not given to the said order nor would the incumbent get protection under Rule 200 of the Kerala Co-operative Societies Rules. Aggrieved by the refusal of the Registrar of Co-operative Societies to approve the appointment, writ petition was preferred. 4. Learned single judge took the view that even though Rules 185 and 186 were amended, Rule 200 stipulated that the amended rules should not be interpreted as disqualification for promotion to any higher post or posts to the employees in service of a co-operative society as on the first January 1974 provided they possessed the qualification if any prescribed in the bye-laws or other service regulations of such society. Learned judge held that in spite of amendment of Rules 185 and 186 prescribing the avenues and qualification for promotion to different posts. If the person who is in service on or before 1.1.1974 is possessed of the qualification prescribed in the bye-laws or other service regulations of the co-operative societies, his promotion to the higher post cannot be denied by contending that he is not possessed of higher qualification prescribed by subsequent amendment of the rules or the avenue for promotion to a particular post is taken away by the subsequent amendment of the rules. Learned judge therefore quashed Ext. P4 order of the Registrar declining approval to the appointment of the writ petitioner. Aggrieved by the same, this writ appeal has been preferred by the sixth respondent in the writ petition. 5. In view of the importance of the matter, we directed the Government Pleader to file a counter affidavit in the writ appeal. Consequently a detailed counter affidavit was filed by the Registrar of Co-operative Societies. When the matter came up for hearing we heard learned counsel for the appellant, Sr. T.R. Ramachandran Nair, Counsel for the writ petitioner Sri P.K. Behnan, counsel for the Bank Sri K.R. Kurup and Government Pleader Sri Lal George. 6. Before we examine the recent amendments effected to Section 80, and Rules 185, 186 etc. We have to examine the scope of Rule 200 as well as the amendment effected to the same in the year 1988. 7. 6. Before we examine the recent amendments effected to Section 80, and Rules 185, 186 etc. We have to examine the scope of Rule 200 as well as the amendment effected to the same in the year 1988. 7. The Kerala Co-operative Societies Act was enacted with a view to provide for the orderly development of the Co-operative sector in the State, by organizing the Co-operative Societies as self governing, democratic institutions to achieve the objects of equity, social justice and economic development, as envisaged in the directive principles of State Policy of the Constitution of India and to consolidate, amend and unify the law relating to Co-operative Societies in the State. The Act came into force in the State on 12.5.1969. Section 109 of the Act provides that the Government may, for the whole or any part of the State and for any class of societies, after previous publication, by notification in the Gazette make rules either prospectively or retrospectively to carry out the purposes of the Act. It also provides for making rules laying down qualifications of employees of the societies. Rules 182 to 200 have been so framed and they came into force with effect from 1.1.1974 of which Rule 200 reads as follows : 200. Savings : Nothing in these rules as amended by the Kerala Co-operative Societies (Amendment) Rules, 1988 in G.O. (MS) No 18/88/Co-op. dated 17th day of June 1988 or any rule made thereunder shall operate to debar from enjoyment by any person or employee of any privilege of emoluments or any right except age of retirement, to which he is entitled by the term of any contract or agreement or conditions of service subsisting between such person and a Co-operative Society as on the 1st January 1974. Nothing in these rules as amended by the Kerala Co-operative Societies (Amendment) Rules 1988 in G.O. (MS) No 18/88 Co-op. dated 17th day of June 1988 shall be interpreted as disqualification for promotion to any higher post or posts to the employees in service of a Co-operative society as on the 1st January, 1974, provided they possessed the qualifications, if any, prescribed in the bye laws or other service regulations, of such society." The scope of Rule 200 viz-a-viz Rule 182 came up for consideration before a Full Bench of this court in Bhaskaran v. Additional Secretary (1987 (2) KLT 903). The Full bench after exhaustively considering the questions held as follows : We shall, therefore, summarise our conclusion on the interpretation and application of Rule 200 of the Kerala Co-operative Societies Rules, bearing in mind that the employees of the Co-operative Societies in Service on 1.1.1974, the existing employees are the beneficiaries under this provisions; (1) That all rights which the existing employees were entitled on or before 1.1.1974 are preserved. (2) As for privileges pre-existing privileges of emoluments alone are saved under the rule. (3) The existing employees are entitled to promotion to one higher post without reference to the qualification prescribed by the new rules, provided they were qualified under the old rules or bye-laws. (4) If no qualification was fixed prior to 1.1. 1974, promotion can be effected only in accordance with the qualification and condition provided under the new rules, after 1.1.1974 and (5) A plea for relaxation is only a claim of privilege and this privilege is not protected under rule 200. This privilege ripens into a right only when it is granted. As this right is protected, relaxation granted before 1.1.1974 can be pressed into service relying on this rule. Relaxation of the qualification prescribed under the old bye-law thus cannot be made after the new rule has come into force. We have indicated that the Full Bench was dealing with the scope of Rule 200 viz-a-vis Rule 182. Rule 200 came into force on 1.1.1974. Aforementioned decision was rendered on 6.11.1987. Rule 200 was further amended as per the Kerala Co-operative Societies (Amendment) Rules 1988 in G.O. (Ms) No 18/88 /co-op. dated 17.6.1988 as SRO No 724/88 in the Kerala Gazette No. 52 dated 17.6.1988, which reads as follows : "Nothing in these rules or any rules made thereunder shall operate to debar from enjoyment of any person or employee of any right or privilege or emoluments to which he is entitled by the term of any contract or agreement or conditions of service subsisting between such person and a Co-operate Society on the date on which these Rules shall come into force. Nothing in these Rules shall be interpreted as disqualification for promotion to a higher post and benefits conferred by these rules to the existing employees of any co-operative society." Government also introduced another rule, Rule 201 by notification G.O. (Ms) No 18/88/Co-op. Nothing in these Rules shall be interpreted as disqualification for promotion to a higher post and benefits conferred by these rules to the existing employees of any co-operative society." Government also introduced another rule, Rule 201 by notification G.O. (Ms) No 18/88/Co-op. dated 17.6.1988 as SRO No 724/88 in the Kerala Gazette Ex. No, 52 dated 17.6.1988 which reads as follows : 201. Special provisions in respect of certain promotions- All promotions of employees, who were in service of any Co-operative Society before the commencement of the Kerala Co-operative Societies (Amendment), Rules, 1988 issued under G.O. (Ms) No 18/88 Co-op. dated 17th day of June 1988 made to any higher post or posts after the 1st day of January, 1974 and before the publication of the said rules in the Gazette shall be deemed to have been made in accordance with the provisions of Rules 185 and 200 as amended by the said rules. In this connection, we may also point out that after the Full Bench decision in Bhaskaran's case, supra (1987 (2) KLT 903), the Kerala Co-operative Societies Amendment Act amended Sections 80 and 109, expressly conferring power to make rules retrospectively. Sub-section (3) of Section 80 of the Act empowers the Government to make rules regulating the conditions of service of employees of different co-operative societies specified in sub-section (1). Section 109 states that the Government may, for the whole or any part of the State and for any class of societies, after previous publication, by notification in the Gazette make rules either prospectively or retrospectively to carry out the purposes of the Act. The Full bench in Bhaskaran's case, while interpreting Rule 200 took the view that when the old bye-laws or service rules provide that the employees can continue in service till they attain the age of 60 years, this right is preserved and protected under Rule 200. It was also held that Circulars issued by the Registrar as defined under the Act compelling the existing employees appointed before 1.1.1974 to retire on attaining the age of 58 years was in conflict with the protection afforded under Rule 200. Rule 183(2) which stood at that time stipulated that no employee shall be eligible continue in service of a society after the last day of the month in which he attains the age of 58 years. Rule 183(2) which stood at that time stipulated that no employee shall be eligible continue in service of a society after the last day of the month in which he attains the age of 58 years. Since there was difficulty with regard to the unanimity in the age of retirement as pointed out earlier, notification was issued by the Government dated 17.6.1988 in exercise of the powers conferred by Section 109 read with Section 80(3) substituting new rule 200 to the Kerala Co-operative Societies Rules 1969 which we have already extracted earlier. That amendment was challenged contending that State had sought to annual the decision of the Full Bench by substituting the new rule 200 as well as not saving the age of retirement. A Division Bench of this court in Ramakrishna Pillai v. State of Kerala (1988 (2) KLT 102) repelled the said challenge. The court held as follows : "It is thus open to the rule-making authority to make a rule different from the one that was interpreted by a court of law. Apart from interpreting rule 200, the rights of the parties were not determined by this court in the earlier decision. On the contrary this court made it clear that it cannot adjudicate upon the rights of the parties as no writs lie against the co-operative societies." It was also held that what the state has done was to substitute the new rule 200, as a new saving clause. Further it was stated that all that has been done by the rule making authority was to make a new rule, different in scope and content and dissimilar to the old rule interpreted by the court. The Full bench of this court only interpreted Rule 200 which was then in force. 1988 amendment was interpreted by the Division Bench in Ramakrishna Pillai v. State of Kerala (1988 (2) KLT 102) holding that the amendment has not the effect of annulling the decision of the Full Bench of this court in Bhaskaran's case. 8. We may examine the scope of the new amended rule in the above background. We have indicated that State has got the power to frame rules prospectively as well as retrospectively. 8. We may examine the scope of the new amended rule in the above background. We have indicated that State has got the power to frame rules prospectively as well as retrospectively. Section 80 of the Co-operative Societies Act empowers the Government to classify the societies in the State according to their type and financial position and to make rules either prospectively or retrospectively regulating the qualification, remuneration, allowances and other conditions of service of the officers and servants of the different classes of societies. In 1995 a new sub rule, sub-section (3A) was introduced to Section 80 which was published in the Kerala Gazette dated 5.8.1995. it is profitable to extract sub-section (3A), which reads as follows : "(3A) Notwithstanding anything contained in this Act or the rules made or orders issued thereunder or in the bye-laws of any society relating to the recruitment and conditions of service of officers and servants of societies, all appointments of officers and servants of the societies mentioned in the Schedule for which direct recruitment is resorted to shall be made from a select list of candidates furnished by the Kerala Public Service Commission". Sub-section (3B) of Section 80 of the Act is as follows ; "(3B) All appointments made by direct recruitment to the societies referred to in Sub-section (3A) or on after the 25th day of April 1995 and before the date of publication of the Kerala Co-operative Societies (Amendment) Ordinance, 1995 (Ordinance No 10 of 1995) shall be invalid." Chapter XII of the Kerala Co-operative Societies Act deals with 'Establishment'. As per Section 80, societies shall be classified according to their type and financial position and contained in appendix III. Rule 182 (3) states that in respect of societies covered by sub-section (3A) of Section 80 of the Act, the committee shall appoint the employees from the select list of candidates furnished by the Kerala Public Service Commission. Rule 182(4) (viii) stipulates that all appointments to the vacancies shall be made by the committee from the select list so published. Rule 185 (1) deals with promotion. This rule was amended by SRO 369/99 published in the Kerala Gazette dated 28.4.1999. The rule as amended reads as follows : 185. Promotion. Rule 182(4) (viii) stipulates that all appointments to the vacancies shall be made by the committee from the select list so published. Rule 185 (1) deals with promotion. This rule was amended by SRO 369/99 published in the Kerala Gazette dated 28.4.1999. The rule as amended reads as follows : 185. Promotion. (1) Subject to the provisions of sub-rules (2), (3) and (4), appointments to the categories of posts in a society, other than those mentioned in sub-rules (2), (3) and (4), shall be made by promotion, on the basis of seniority in the feeder category. The feeder categories for this purpose shall be specified by the society by framing suitable regulations, with the approval of the Registrar. (4) Substantive vacancies in the following posts shall be filled up only by direct recruitment; (i) General Manager in the Kerala State Co-operative Bank and in the District Co-operative Banks; (ii) Secretary in the Kerala State Co-operative Agricultural and Rural Development Bank. The above mentioned rules stipulate that subject to the provisions of sub-rules (2), (3) and (4), appointments to the categories of posts in a society, other than those mentioned in sub-rules (2), (3) and (4) shall be made by promotion. Therefore, appointment to the posts included in Rule 185(4) (i) and (ii) can only be made by direct recruitment, as provided in Section 80(3A) read with Rule 182(3) of the Kerala Co-operative societies Rules. 9. Rule 186 deals with 'Qualifications' which says that no person shall be eligible for appointment in any post unless he possess the qualifications prescribed for the post notified therein. Qualification for appointment by direct recruitment to substantive vacancies as provided in Rule 185(4) is provided in Rule 186 (1B), which reads as follows : 186. Qualifications : (1) No person shall be eligible for appointment in any post unless he possess the qualifications prescribed for the post as shown below- (1B) All posts to be filled up by direct recruitment under sub-rules (3) and (4) of rule 185 Master's Degree in Business Administration or any other equivalent qualification recognized by the Universities in the State or membership of the Institute of Chartered Accountants of India, with experience of not less than 3 years in Managerial supervisory cadre in Co-operative Institutions /Scheduled Banks/Government/Quasi Government Institutions/Public Limited Companies. Aforementioned provision introduced by SRO No. 369/99 published in Kerala Gazette No. 44 dated 28.4.1999 would positively show that for posts mentioned in sub-rules (2),(3) and (4) of Rule 185, as the case may be, direct recruitment be made only by the Public Service Commission provided the societies have been included in the Schedule to Section 80 (3A) of the Act. Post of General Manager in the Kerala State Co-operative Bank and District Co-operative Bank is included in Rule 185(4) of the Rules. Schedule to Section 80 (3A) takes in Idukki district Co-operative Bank as well which is shown as item 21 in the Schedule. We are in this case concerned with the post of General Manager. General Manager is specifically included in Rule 185(4)(i) and Idukki District Co-operative bank has been included in the Schedule to Section 80(3A). We have indicated that Rule 185 was amended by virtue of SRO No 369/99 dated 28.4.1999. The question to be considered is whether those employees who were in service as on 1.1.1974 are saved by Rule 200. We have already extracted Rule 200 in the earlier part of the judgement. Rule 182(3) and the amendment effected to Rule 185 vide SRO 369/99 published in the Kerala Gazette dated 28.4.1999 as well as the qualification prescribed in Rule 186(1B) are not saved by Rule 200. Unless Rule 200 save those amendments persons like the writ petitioner cannot seek the benefit of saving clause. 10. Contention was raised by the counsel for the writ petitioner that since petitioner had entered service prior to 1.1.1974 a right has been accrued to him. Consequently de hors the amendment effected by SRO 369/99 dated 28.4.1999 he is entitled to get promotion to the post of General Manager. Counsel submitted as per the Full Bench decision of this court in Bhaskaran's case, supra as well as Rule 200 enables those categories of persons to claim promotion. We find it difficult to accept the said contention. Mere fact that he had a right to get promotion prior to 1.1.1974 and by the then existing bye-laws would not mean de hors any statutory provision he is entitled to get promotion. We are of the view Rule 200 does not save those rights. Rule 200 saves only those rights which are saved by Rule 200. Mere fact that he had a right to get promotion prior to 1.1.1974 and by the then existing bye-laws would not mean de hors any statutory provision he is entitled to get promotion. We are of the view Rule 200 does not save those rights. Rule 200 saves only those rights which are saved by Rule 200. Further under Section 80(3) of the Act Government could make rules either prospectively or retrospectively regulating qualification and other conditions of service. Service conditions are liable to alternation by subsequent changes and may be introduced by rules except to the extent of protecting promotions that have already been earned under the previous rules. On amendment, the revised rules would govern the future promotions of all persons in the concerned service. Right to promotion is a condition of service, which means all those conditions which regulate the holding of a post by a person right from the time of his appointment till his retirement and even beyond it. We are of the view it is fully within the competence of the rule making authority to decide as a matter of policy the sources from which the requirement of manning a particular post be drawn up. The General Manager of a District Co-operative Bank, in the instant case is one of such posts. 11. The rule making authority never intended to bring in SRO 369/99 dated 28.4.1999 with the ambit of Rule 200. So long as amendment brought in subsequent to 1988 with regard to method of appointment and qualification were not brought within the fold of Rule 200, we are of the view persons like the petitioner are bound by the amended rules. Rules which are not saved cannot be brought in to the umbrella of the saving clause. A saving clause which is inserted in the repealing statute in order to protect or save a person as regards rights which he may have acquired under the then existing law cannot use it for construction of the Act or to extend it so as to give a wider scope to the Act ignoring the very purpose for which saving clause was inserted. We may remember we are dealing with saving clause in a rule and not a parent enactment. General rule is that when a parent Act is repealed all laws made thereunder stand repealed. We may remember we are dealing with saving clause in a rule and not a parent enactment. General rule is that when a parent Act is repealed all laws made thereunder stand repealed. The effect of repeal is to dry up the source of power. In Watson v. Winch (1916 K.B. 688) it was held that when a bye-law is made in an act of Parliament, the repeal of the Act abrogate the byelaw unless the bye law is preserved by the repealing act by means of a saving clause or otherwise. In this connection it is also relevant to refer to the proviso to Rule 185A which says that no such contract appointment shall be made to the posts mentioned in sub-rules (2), (3) and (4) of Rule 185 or to any other post in any society, which is engaged in banking business. This proviso makes the intention of the statute clear that appointments shall be made only in a regular manner through direct recruitment as the case may be. 12. We are of the view if at all persons who entered service prior to 1.1.1974 have got a right that is an inchoate right. There is nothing to show that an act was done or any advantage taken of to term it as accrued right. The apex court in a recent decision in Thyssen Stablunion GMBH v. Steel Authority of India Limited (1999 (9) SCC 334) while dealing with rights accrued and held as follows : "Various decisions have been cited before us to show as to what is a mere right and what is right accrued or acquired. We have to examine this question with reference to the provisions of Section 6 of the General Clauses Act if it could be said that when the arbitral proceedings have commenced under the old Act, a party has acquired a right to have the award and thereafter enforced under the old Act. The question that arises for consideration is if a right has accrued to the party or it is merely an inchoate right. The three cases referred to namely, Abbott v. Ministry for Lands, Hungerfood Investment Trust Ltd. v. Haridas Mundhra and DC. Bhatia v. Union of India show that something more is required for a vested right to accrue. The question that arises for consideration is if a right has accrued to the party or it is merely an inchoate right. The three cases referred to namely, Abbott v. Ministry for Lands, Hungerfood Investment Trust Ltd. v. Haridas Mundhra and DC. Bhatia v. Union of India show that something more is required for a vested right to accrue. Right to exist but then nothing was done or advantage taken of the enactment under which the right existed till it was repealed. An act gave right and the new act which repealed the old Act took away that right. Mere right to take advantage of the provision of an Act is not a right accrued." The contention of the petitioner that right has been accrued to him which has been saved by rule 200 and consequently all statutory amendments effected subsequently cannot have the effect of taking away that right has to be rejected. There is a clear provision in the parent statute that is, Co-operative Societies Act that is, Section 80(3A) which specifically states that notwithstanding anything contained in this Act or the rules made or orders issued there under or in the bye-laws of any society relating to the recruitment and conditions of service of officers and servants of societies, all appointments of officers and servants of the societies mentioned in the Schedule for which direct recruitment is resorted to shall be made from a select list of candidates furnished by the Kerala Public Service Commission. This provision is in the parent Act employing a non-obstante clause. A section beginning with non-obstante clause gives the enacting part of Section in case of conflict an overriding effect. Rule 200 cannot take away or nullify the effect of any provision in the parent Act. Section 80(3A) was given effect to fully by Rules 182(3), 185(1) and 185(4) read with Rule 186(1)(1B). Rule 200 cannot be interpreted so as to set at naught those provisions in the parent Act supplemented by the amended rules. 13. We are therefore of the opinion that Rule 200 does not save those persons who entered service prior to 1.1.1974 form the rigor of statutory provision of Section 80(3A) read with Rules 109(1)(xv), 182(3), 185(1), 185(4) read with Rule 186(1)(1B). 14. 13. We are therefore of the opinion that Rule 200 does not save those persons who entered service prior to 1.1.1974 form the rigor of statutory provision of Section 80(3A) read with Rules 109(1)(xv), 182(3), 185(1), 185(4) read with Rule 186(1)(1B). 14. In such circumstances we are of the view learned single judge was not justified in taking the view that persons like the petitioner are entitled to get promotion to the post of General manager de hors the amendment. We therefore declare that the Registrar has rightly rejected approval of appointment of the writ petitioner. Appeal is accordingly allowed. Judgment of the learned judge is set aside.