Madras High Court
K.Muthusamy vs The Principal Secretary To ... on 24 March, 2022
W.P.(MD) Nos.20038 & 20039 of 2020
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 24.03.2022
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.(MD) Nos.20038 & 20039 of 2020
K.Muthusamy ... Petitioner in
W.P.(MD) No.20038/2020
N.Sundararaj ... Petitioner in
W.P.(MD) No.20039/2020
-vs-
1. The Principal Secretary to Government,
Co-operative, Food and Consumer Protection Department,
Fort St. George, Chennai-600 009.
2. The Registrar of Co-operative Societies,
NVN Natarajan Maligai,
Kilpauk, Chennai-600 010.
3. The President,
NN 597, Hanumanthankudi Primary Agricultural
Co-operative Credit Society,
Hanumanthankudi, Sivagangai District. ... Respondents in
both Petitions
Common Prayer:- Petitions filed under Article 226 of the Constitution of
India praying for issuance of Writ of Mandamus extending the order passed
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W.P.(MD) Nos.20038 & 20039 of 2020
by the Hon'ble Division Bench of this Court in W.A.No.452 of 2012 in
which merging 97% DA is allowed with old pay scale, in spite of 84% DA
allowed in the impugned G.O.Ms.No.189 issued by the 1st respondent and
subsequent circular of the 2nd respondent, dated 02.12.2009 based on the
common representation, dated 09.09.2020 and consequently direct the
respondent to fix the basic pay by merging 97% DA to the petitioners w.e.f.
01.04.2008 and arrears of pay with 12% interest.
In both Petitions:-
For Petitioner : Mr.K.K.Samy
For RR1 & 2 : Mr.M.Ramesh,
Government Advocate
******
COMMON ORDER
The relief sought for in the present writ petitions is to extend the
order passed by the Hon'ble Division Bench of this Court in W.A.No.452 of
2012 in which merging 97% DA is allowed with old pay scale, in spite of
84% DA allowed in the impugned G.O.Ms.No.189 issued by the 1st
respondent and subsequent circular of the 2nd respondent, dated 02.12.2009
based on the common representation, dated 09.09.2020 and consequently, to
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direct the respondents to fix the basic pay by merging 97% DA to the
petitioners w.e.f. 01.04.2008 and arrears of pay with 12% interest.
2. The learned counsel appearing for the petitioners made a
submission that 97% of Dearness Allowance has been paid initially to the
employees of the Co-operative Societies. However, the said Dearness
Allowance is reduced to 84% in G.O.Ms.No.189. Thus, the petitioners have
chosen to file these writ petitions.
3. The learned counsel appearing for the petitioners reiterated that
no opportunity was given to the employees, while reducing the Dearness
Allowance from 97% to 84%. Thus, the decision taken is unilateral.
4. The learned counsel appearing for the petitioners submitted that
this Court has earlier considered similar issue in W.P(MD) No.9140 of 2014
etc., batch dated 19.12.2018. As per the said order, 97% of Dearness
Allowance has been given. Thus, the same benefit is to be granted to these
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petitioners also and based on the above orders, the cases of the petitioners
are also to be considered for grant of 97% of Dearness Allowance.
5. The learned Government Advocate appearing on behalf of
respondents 1 & 2 strenuously objected the contention of the petitioners by
stating that the earlier order cited by the petitioners cannot be a ground to
consider the present writ petition. The Hon'ble Division Bench has passed
judgment in W.A.No.452 of 2012, dated 20.07.2012. In fact, complete
factual particulars were not produced by the respondents before this Court
and the mistake committed by the respondents in this regard was admitted.
Even as per the order passed by this Court, the writ petitioners are not
entitled for grant of 97% of Dearness Allowance. Factual mistake occurred
was that 97% of Dearness Allowance was not at all granted to the employee
and when the said 97% Dearness Allowance was not granted to any
employee, there is no reason to grant the said 97% of Dearness Allowance
to the petitioners. The fact regarding sanctioning of 97% of Dearness
Allowance to all other employees was not brought to the notice of this
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Court, while passing order in W.P.No.9140 of 2014 etc., batch, dated
19.12.2018.
6. To substantiate the said contention, the learned Government
Advocate solicited the attention regarding the annexure to G.O.Ms.No.189,
dated 17.11.2009 as well as the order of this Court in W.P.No.9391 of 2011,
dated 12.07.2011 and the judgment of the Hon'ble Division Bench of this
Court in W.A.No.452 of 2012 dated 20.07.2012.
7. A perusal of the order in G.O.Ms.No.181, dated 17.11.2009
reveals that a Stream Line Committee was constituted for the purpose of
fixing uniform scale of pay/salary to the employees of all the Co-operative
Societies across the State. The Steam Line Committee considered the issue
and submitted its recommendation. Accordingly, the Government issued
G.O.Ms.No.189, Co-operative Food and Consumer Protection Department,
dated 17.11.2009. Under Section 181 of the Tamil Nadu Co-operative
Societies Act, the Registrar of Co-operative Societies is empowered to issue
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directions in the interest of Co-operative Societies and in the public interest.
Section 182 of the said Act contemplates that the Government can issue
directions in the interest of public and administrate the affairs of the Co-
operative Societies registered under the provisions of the Tamil Nadu Co-
operative Societies Act. In the event of issuing any orders, the Registrar of
Co-operative Societies has to implement the same and report to the
Government.
8. The order in G.O.Ms.No.189, cannot be construed as an order
directly fixing Dearness Allowance to the employees of the Co-operative
Societies. The basic fact to be understood with reference to the said
G.O.Ms.No.189 is that the Government issued certain guidelines to be
followed by the Registrar regarding the implementation of the uniform scale
of pay and the Dearness Allowance. The very purpose and object of issuing
the Government Order in G.O.Ms.No.189 is that the financial condition of
each Co-operative Society is to be considered and in order to monitor and
control the affairs of the Co-operative Society, such consistency in grant of
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salary to the employees is required. Thus, the Government thought fit to
issue circulars containing certain instructions enabling the respective Co-
operative Societies to enter into 12(3) Settlement under the Industrial
Disputes Act, 1947 with the employees so as to pay such salary. In other
words, the Government Order was passed enabling the Co-operative
Societies to fix uniform scale of pay and enter into 12(3) Settlement under
the Industrial Disputes Act. G.O.Ms.No.189 states that appropriate actions
have to be initiated by the Registrar of Co-operative Societies. In this
regard, paragraph Nos.5 and 6 of G.O.Ms.No.189 read as follows:
“5.,t;thizfspd;go bjhlf;f ntshz;ikf;
Tl;Lwt[ fld; rq;fg; gzpahsh;fs; 1.4.2008 Kjy; Cjpa
cah;t[ bgw jFjp cilath;fs; Mth;. ,t;t{jpa cah;tpdhy;
gzpahsh;fSf;F tHq;fg;gl ntz;oa epYitj; bjhif mth;fsJ
tUq;fhy itg;g[ epjpf;fzf;fpy; tut[ itf;fg;gl ntz;Lk;.
6.g[jpa rk;gsk; mspf;Fk; nghJ bjhlf;f ntshz;ikf;
Tl;Lwt[ fld; rq;fq;fs; jkJ gzpahsh;fSf;F rk;gsk; tHq;Fk;
jFjpapid (Capacity to Pay) cWjpt;gLj;jpf; bfhs;SkhWk; nkw;fz;l
rk;gs cah;tpdhy; Vw;gLk; TLjy; Tl;Lwt[ fld; rq;fq;fSf;Fk;
bjhptpf;f Tl;Lwt[r; rq;fq;fspd; gjpthsh; mwpt[Wj;jg;gLfpwhh;.”
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9. Para 6 of the Government Order stipulates that the Registrar of
Co-operative Societies should initiate action for fixation of Dearness
Allowance to the employees of the Co-operative Societies by considering
the financial condition as well as the capacity of the Societies to pay the
Dearness Allowance to its employees. Thus, it was made clear by the
Government that the financial condition of the Societies is to be considered
and uniform Dearness Allowance is to be paid in consonance with the
financial condition of the Societies. The Registrar has to initiate steps to
implement the said guidelines to the Co-operative Societies. Thus, the
Government Order in G.O.Ms.No.189 dated 17.11.2009 is not an absolute
order granting 97% of Dearness Allowance to all the employees of the Co-
operative Societies across the State of Tamil Nadu. The scope of the
Government Order in G.O.Ms.No.189 is to fix the uniform Dearness
Allowance, as far as possible, with reference to the financial condition of
each Co-operative Society. For example, if any Society is in liquidated
condition and acute financial loss, then it may not be possible for the said
management to pay 97% of Dearness Allowance to all the employees,
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depriving the rights of the members of the Society. Salary or Dearness
Allowance cannot be paid to the employees so as to drive such Co-operative
Societies to further financial loss.
10. Every Co-operative Society is an independent entity. The
byelaws of the Co-operative Societies are approved by the competent
authority under the provisions of the Tamil Nadu Co-operative Societies
Act. The Co-operative Societies are not funded by the Government and it is
not a 'State' within the meaning of Article 12 of the Constitution of India.
The power of the Society is empowered to run the administration of the
Society, under the provisions of the Tamil Nadu Co-operative Societies Act.
The independent administration of the Co-operative Societies cannot be
interfered with by the Registrar or by the Government without following the
procedure contemplated under the provisions of the statues and rules.
11. The very nature of the administration of the Co-operative
Societies registered under the provisions of the Tamil Nadu Co-operative
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Societies Act is autonomous. Thus, the powers of the Government and
Registrar to control the affairs of the interest of the public are within the
provisions of the Tamil Nadu Co-operative Societies Act and Rules. Thus, to
regulate the affairs of the Co-operative Societies, the Government or
Registrar are issuing instructions or Circulars. Under these circumstances,
the Government issued the order stating that considering the financial
condition of the Society, Dearness Allowance is to be fixed by the Co-
operative Societies across the State. Thus, 97% of Dearness Allowance to be
paid to all the employees is not a conclusive decision contemplated in the
Government Order. This apart, annexure to the Government Order states
that 97% of Dearness Allowance granted earlier in G.O.Ms.No.131, dated
04.06.1997 is reduced to 84%. The reason for reduction was the overall
financial difficulties which were faced in many number of Co-operative
Societies, across the State of Tamil Nadu. Large number of Co-operative
Societies are now running in acute financial loss and considering those
factors, the Government issued directions to the Registrar to regulate the
payment of Dearness Allowance so as to minimize the financial loss in the
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interest of the members of the Co-operative Societies, who have invested
their hard earned money. The public interest is the prime criteria for
reduction of the Dearness Allowance. The Stream Line Committee also had
recommended such reduction taking note of various factors and the
prevailing situation and such a recommendation is an expert opinion and
accepting the same, the Government issued G.O.Ms.No.189.
12. With this background, let us consider the order passed by this
Court. The learned counsel for the petitioners relied on the order of this
Court passed in W.P.No.9140 of 2014 etc., batch, dated 19.12.2018.
However, the recommendation of the Stream Line Committee, which was
implemented by the Government by reducing the Dearness Allowance from
97% to 84% and the order passed by this Court on earlier occasion
regarding the fixation of Dearness Allowance at 84% with reference to the
counter filed by the respondents, were not brought to the notice of this
Court by the respondents. In view of the fact that those factors were not
brought to the notice of this Court, it is not appropriate to follow the same
order. The earlier order of the Division Bench of this Court unambiguously
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speaks about the Dearness Allowance to be paid to the employees of the Co-
operative Societies. The earlier order of the Division Bench as well as the
order passed in the contempt petition, unambiguously state that Dearness
Allowance is to be paid as per the counter affidavit filed by the Government
in the earlier writ petition filed in W.P(MD).No.9399 of 2011.
13. In the said writ petition in W.P(MD).No.9399 of 2011, the
Principle Bench of Madras High Court passed an order as follows, “In view
of the said admitted factor, this Court is of the considered view that it is
suffice to direct the respondents herein to maintain the fixation of Dearness
Allowance stated by the first and second respondents in the counter filed
before this Court in the earlier writ petition in W.P.No.4761 of 2010 as
incorporated above for 'A' and 'B' class employees as well as 'C' and 'D'
employees”.
14. The matter was taken before the Hon'ble Division Bench of
this Court in W.A(MD).No.452 of 2012 and the Division Bench also
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confirmed the said order on 20.07.2012. The Hon'ble Division Bench has
stated that no interference is required, particularly, when the said
submission has not been so far withdrawn by the appellants. Therefore, the
Hon'ble Division Bench also passed an order confirming the order passed by
the learned Single Judge that Dearness Allowance is to be paid as per the
counter affidavit filed by the Government/respondent.
15. Let us now consider the counter affidavit filed by the
respondent/Registrar in W.P.No.4761 of 2010. The relevant paragraphs of
the counter read as under:
“15.With regard to the averments made in
paragraph 8 of the affidavit, it is submitted that the petitioner
alleges if the impugned Government Order is implemented the
salary of many of the employees may be reduced by Rs.1000/-
to 8,000/-. This allegation of the petitioner is false and
baseless. The petitioner has not cited any example to justify
the allegation. It is true that the Primary Agricultural Co-
operative Credit Societies are classified into four categories
viz., A.B,C,D based on the quantum of their own resources and
their profitability. It is humbly submitted that for effecting any
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increase in the pay and allowances, the institution should
possess the capacity to pay and for that, the institution must be
able to generate enough income which depends on its cost of
funds and net margin in operation. If society is making profit
thus, it is seen that its net margin is positive and therefore it
can give more salary. Similarly, if society operates with own
funds it will earn more net interest income. Thus, the quantum
of Establishment and Contingence must depend on net interest
income and other income and not on mere working capital. A
society can have a large working capital and still make loss, if
recovery of loans is poor. Therefore, it is correct in the interest
of societies to fix pay scales based on own resources and
profitability. Further, it is not correct that there is reduction in
salary, because of the above Government order. In fact,
employees in all 4 categories have been given a hike of
10% /5% as the case may be depending on the category after
merging the Dearness Allowances with Basic Pay. It is given in
the following lines.
For 'A' and 'B' classes =(Basic pay as on
1.4.08+D.A as on 1.4.08)
10% of the above
=New Basic Pay.
For C&D Classes =(Basic pay as on
1.4.08+D.A as on
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W.P.(MD) Nos.20038 & 20039 of 2020
1.4.08+5% of the above)
=New Basic Pay.
In fact totally pay increase as on 1.4.2008 stands at 26% for A
and B category of 18% for C and D category. Therefore, the
apprehension of the petitioner that there will be reduction of
salaries of some of the members is imaginary, since the new
basic pay arrived at on the above mentioned formula will have
5 to 10% increase of their present basic pay, plus additional
pay because of merger of Dearness Allowances.”
16. The counter affidavit extracted above did not admit or accept
the payment of 97% of Dearness Allowance to the employees of the Co-
operative Societies. Contrarily, the manner in which the Dearness
Allowance is to be calculated alone is enumerated in the counter affidavit
and accepting the said counter affidavit, the order was passed by this Court
in W.P.No.9399 of 2011, which was confirmed by the Hon'ble Division
Bench in W.A.No.452 of 2012. Thus, the Government at no point of time
agreed or stated that 97% of Dearness Allowance shall be paid to the
employees of the Co-operative Societies. Contrarily, the Government
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W.P.(MD) Nos.20038 & 20039 of 2020
reiterated that it may not be possible to pay 97% of Dearness Allowance to
all the employees across the State of Tamil Nadu working in Co-operative
Societies and the guidelines issued by the Registrar also ensured that 84%
of Dearness Allowance is paid and such payment is also subject to the
financial condition prevailing in each and every Co-operative Society
registered under the provisions of the Act. The Government invoking its
power under Section 182 of the Act, issued such directions in the interest of
public and in order to protect the interest of the Co-operative Societies
across the State of Tamil Nadu.
17. The Government Order was issued in order to regulate the
payment of Dearness Allowance with reference to the financial condition
prevailing in each and every Co-operative Society. The Registrar has to
make an assessment and considering the said factors as well as the financial
conditions, approve the payment of salary to the employees. The very
purpose and object for issuing such guidelines under Section 182 of the Co-
operative Societies Act, is to prevent abuse or misuse of public funds by the
administration of the Co-operative Societies.
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18. Thus, the directions or circulars are issued in the interest of
the administration of the Co-operative Societies and the public interest
cannot be said to be irregular or illegal. Further, G.O.Ms.No.189 nowhere
states that 97% of Dearness Allowance is to be paid to all the employees of
all the Co-operative Societies across the State of Tamil Nadu. The
Government orders are to be interpreted completely so as to ensure that the
purpose and object set out in the orders are met with pragmatic approach as
required and pick and choose a particular sentence or word cannot be a
ground to grant the relief. The overall purpose and object as well as the
intention of the Government to regulate the affairs of the Co-operative
Societies are also to be understood so as to adopt the practical approach in
the matter of fixation of salary to the employees of the Co-operative
Societies.
19. These being the principles to be followed, this Court has no
hesitation in arriving the conclusion that the writ petitioners have not
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established any acceptable grounds for the purpose of granting the relief and
accordingly, these writ petitions stand dismissed. No costs.
24.03.2022
Index:Yes
Speaking Order
abr
To
1. The Principal Secretary to Government,
Co-operative, Food and Consumer Protection Department,
Fort St. George, Chennai-600 009.
2. The Registrar of Co-operative Societies,
NVN Natarajan Maligai,
Kilpauk, Chennai-600 010.
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W.P.(MD) Nos.20038 & 20039 of 2020
S.M.SUBRAMANIAM, J.
abr
W.P.(MD) Nos.20038 & 20039 of 2020
24.03.2022
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