Full Judgment Text
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PETITIONER:
BENNY T.D. & ORS. ETC. ETC.
Vs.
RESPONDENT:
REGISTRAR OF CO-OPERATIVE SOCIETIES & ANR. ETC. ETC.
DATE OF JUDGMENT: 04/05/1998
BENCH:
S. SAGHIR AHMAD, G.B. PATTANAIK
ACT:
HEADNOTE:
JUDGMENT:
WITH
CIVIL APPEAL Nos.2557-2564 OF 1998
Arising out of SLP@ Nos. 10149-10150/97, SLP@
Nos. 15444-15448/97, SLP@
No.9728/97)
J U D G M E N T
PATTANAIK, J.
Leave granted in all the SLPs.
These 12 appeals are directed against the judgment
dated 9th April, 1997 of the Division Bench of Kerala High
Court in Writ Appeal No. 37 of 1997. The appeals titled as
Benny T.D. & Ors. Etc. vs. The Registrar of Co-operative
Societies & Anr and State of Kerala and ors. vs. K.O. Sherly
& others; relate to recruitment to the post of Clerk in
Thrissur Bank, Kerala. Appeals titled as P.J. Jose & Ors.
vs. The Registrar of Co-operative Societies & Ors. and Binu
I & Ors. etc. vs. The Registrar of Co-operative Societies &
Ors. etc. relate to recruitment to the post of Clerk in the
District Co-operative Bank Kottayam. Apart from these
appeals Trichur District Co-operative Bank also had
preferred special leave petition against the same judgment
of the Kerala High Court but withdrew the same at the time
of hearing.
In case of Thrissur Bank and advertisement was issued
on 9.11.1995 indicating the probable vacancies in the grade
of Clerk as 85 and inviting applications for filling up of
the said posts. The advertisement indicated the
qualification for being eligible to apply and also indicated
that the 10% of the vacancies is reserved for Scheduled
Castes/Scheduled Tribes. Pursuance to the said advertisement
2466 General Category candidates, 432 in-service candidates,
who are already serving in different primary societies and
87 Scheduled Castes/Scheduled Tribes candidates applied. The
Bank conducted a written test to adjudge the suitability of
the applicants for being appointed as Clerks and on the
basis of the result in the written test, those of the
candidates, who secured the prescribed minimum marks were
called for interview. It may be stated that 221 General
Category candidates, 75 in-service candidates and 6
Scheduled Casts/Scheduled Tribes candidates were called for
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the interview. On the basis of their performance in the
interview the Bank authorities prepared a panel of 154
candidates and out of the said panel decided to appoint 116
persons by Resolution of the Bank dated 5.2.1995. It is to
be noticed that though the probable vacancies as per the
advertisement was 85 but before the section process started
the vacancies came to 116 and as such resolution was passed
to appoint 116 persons. Out of the said 116 persons 87
persons belong to the General Category, 24 belong to the in-
service category, who are the existing employees of
different primary societies and 5 belong to the Scheduled
Castes/Scheduled Tribes reserved category. Some of the
applicants who could not qualify in the test held by the
Bank made a grievance before the Registrar Co-operative
Societies alleging irregularities in the selection process.
In fact, initially, they filed a writ petition before the
Kerala High Court but the High Court being of the opinion
that writ will not be maintainable against a Co-operative
Society and that statutory remedies are available under the
Kerala Co-operative Societies Act, 1969 (hereinafter
referred to as ’the Act’) did not entertain the writ
petition. Against the decision of the learned single Judge
holding a writ petition to be not maintainable, a writ
appeal was preferred and the said writ appeal is still
pending in the Kerala High Court. But pursuance to the
representations received by the Registrar alleging serious
irregularities in the selection process, the Registrar
invoked his jurisdiction and enquired into the matter. In
course of inquiry by the Registrar the Joint Registrar, Co-
operative Societies, had informed that the selection made by
the Thrissur District Co-operative Bank has been fairly made
and there was no foul play in the selection process as
alleged. The Registrar Co-operative Societies, however, came
to hold that the action of the Board of Directors of
Thrissur District Co-operative Bank in appointing 116 Clerks
by Resolution No. 2 dated 5.2.1995 and Resolution No. 10
dated 17.5.1995 is against the provisions of the kerala CO-
operative Societies Act, Rules, Bye-laws and directions and
instructions issued by the department and it amounted to
disturb the peaceful and orderly working of the Bank and it
is contrary to its better interest. On the aforesaid
conclusion the Registrar in exercise of his power under Rule
176 of the Kerala Co-operative Societies Rules, 1969
(hereinafter referred to as ’the Rules’) rescinded the
aforesaid two Resolutions of the Thrissur District Co-
operative Bank.
In the case of District Co-operative Bank Kottayam, the
Registrar also invoked his power under Rule 176 of the Rules
and issued a notice to the Board of Directors of the Bank
indicating the allegations of irregularities committed by
the Bank in selecting and appointing people to the post of
Clerk and called upon the Bank to show cause as to why the
Resolution Nos. 3 and 4 dated 13.4.1995 making appointments
to the post of Clerk should not be rescinded. The Bank, in
its turn, refuted the allegations made in the notice. But
the Registrar finally by his order dated 24th of October,
1996 came to hold that the entire selection of candidates
and appointments made by the Kottayam Co-operative Bank by
Resolution Nos. 3 and 4 dated 13.4.1995 are vitiated by non-
compliance of the statutory provisions and large scale
tampering of answer papers and marks list in the written
test and consequently rescinded the said Resolutions dated
13.4.1995. The aforesaid two orders of the Registrar were
challenged before the Kerala High Court by 9 Original
Petitions, 5 of which are in respect of Thrissur District
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Co-operative Bank and 4 of which are in respect of Kottayam
District Co-operative Bank. All these 9 original
applications were disposed of by the learned single Judge of
Kerala High Court by judgment dated 18th December, 1996 and
the learned single Judge dismissed all the original
petitions. Against the aforesaid judgment of the learned
single Judge 9 appeals were carried to the Division Bench
and the Division Bench disposed of those appeals by the
impugned judgment dated 9.4.1997. In case of Kottayam Bank
the Division Bench confirmed the judgment of the learned
single Judge upholding the order of the Registrar and
rescinding the Resolution of the Bank. But in the case of
Thrissur bank the Division Bench modified the order of the
Single Judge as well as that of the Registrar and directed
that the first 24 candidates in the General Category as well
as 24 in-service candidates and 5 candidates from the
Scheduled Castes/Scheduled Tribes category may be retained
in service and the appointment of rest of the persons under
the two Resolutions of the Bank, referred to earlier, must
be held to be invalid. Against the aforesaid judgment of the
Division Bench of the Kerala High Court the first 3 appeals
arising out of SLP@ Nos.9350-9352 of 1997 are by the General
Category candidates, who had been appointed by the
Resolution of the Bank but whose appointments now stand
annulled by the order of the Registrar and affirmed by the
Division Bench of High Court. The appeals filed by the State
of Kerala are against the modified decision of the Division
Bench allowing 53 persons to be retained in service in
Thrissur Bank. The appeal arising out of SLP@ No. 9728 of
1997 is by the employees belonging to the Primary Society,
who had been appointed as Clerks in the Kottayam Bank and
whose appointments stood annulled by virtue of the decision
of the Registrar and affirmed by the learned single Judge
and Division Bench of Kerala High Court. The appeals arising
out of SLP @ Nos. 10149 - 10150 of 1997 are by the direct
recruits who had been appointed as Clerks in the Kottayam
Bank and whose appointments stood annulled by the aforesaid
decisions of the Registrar and the High Court.
In the Thrissur Bank case, the Registrar formulated
following four issues:
1. Whether the Bank appointed staff in excess of the
approved strength?
2. Where the advertisement was in accordance with the
circular instructions of the Registrar of Co-operative
Societies (No. 18/91).
3. Whether the Bank followed the provisions of Section
80(4) of the Kerala Co-operative Societies Act and
Circular Instructions Nos. 28/86 and 18/91.
4. Whether the Bank complied with Rule 187 of the Kerala
Co-operative Societies Rules, 1969 in the selection of
staff from the employees of affiliated Primary
Societies.
and came to hold that material irregularities had taken
place in the appointment and the Bank appointed staff in
excess of the staff strength approved by the Registrar of
Co-operative Societies on issue No. 1. On Issue No. 2, the
Registrar came to hold that since the bank had not specified
in the advertisement that 50% of the vacancies shall be
reserved for candidates from the employees of the affiliated
Primary Societies the same amounts to violation of the
statutory provisions and is against the better interest of
the Bank. On Issue No. 3, the Registrar came to hold the
Bank committed error in not giving lower cut off marks for
the reserved category candidates to ensure their
representation as contemplated under Section 80(4) of the
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Act and the decision of the bank avoiding selection of
candidates from Scheduled Castes/Scheduled Tribes category
is against the provisions of Section 80(4) of the Act, which
in turn, contrary to the better interest of the Bank. On
Issue No. 4 the Registrar came to hold that there has been a
violation of Rule 187 of the Rules and the said Rule has bot
been strictly complied with inasmuch as while 50% of the
vacancies was to be reserved for the in-service candidates
serving in different Primary Societies but only 24 of them
got appointed as against 87 General Category candidates.
In the case of Kottayam Bank, the Registrar also came
to hold that there has been an infraction of Rule 187 of the
Rules and sub-section (4) of Section 80 of the Act, as in
the case of Thrissur Bank. In addition, to the said
infirmity the Registrar also came to hold that there has
been a large scale tampering of the answer papers and the
marks list and glaring instances of tampering in the marks
have been given as is apparent from the report of Kerala
Public men’s (Corruption, Investigation and Enquiries)
Commission, who has directed for a detailed enquiry.
The learned single Judge came to hold that the Bank has
not given full effect to the provisions contained in Section
80(4) of the Act while making appointments and non-providing
of lesser cut off marks for the Scheduled Castes/Scheduled
Tribes candidates is arbitrary and the subsequent attempt of
the bank to make recruitment by way of special recruitment
for the reserved category candidates cannot cure the
illegality as well as the mandate of sub-section (4) of
Section 80. So far as infraction of Rule 187 is concerned,
the learned single Judge came to hold that under the Rule
50% of the vacancies arising in an apex society has to be
filled up by candidates possessing the additional
qualification meant in the Rule, and therefore, it must be
held that 50% of the vacancies is the quota meant for
candidates who are working in the primary society.
Consequently, there has been an infraction of Rule 187 of
the Rules. With the aforesaid conclusion the learned single
Judge did not interfere with the order of the Registrar
rescinding the Resolution of the Thrissur Bank appointing
116 persons to the post of the Clerk. In Kottayam Bank case
the learned single Judge also came to hold that there has
been a violation of sub-section (4) of Section 80 of the Act
as well as Rule 187 of the Rules, and therefore, the
Register was justified in rescinding the Resolution of the
Bank making the appointments and Register cannot be said to
have exceeded his jurisdiction in interfering with the
decisions of the Bank. So far as the finding of the
Registrar on the alleged mal-practices on the basis of the
report of the Kerala Public Men’s (Corruption, Investigation
and Enquiries) Commission is concerned the learned single
Judge came to hold that the above report should not be
relied upon by the Registrar since it was not put to the
notice of the affected persons in the show cause notice that
has been issued under Rule 176 of the Rules. But yet the
order of the Registrar rescinding the Resolution of the Bank
making the appointments cannot be interfered with because of
the infraction of sub-section (4) of Section 80 of the Act
as well as Rule 187 of the Rules.
The Division Bench in the impugned judgment affirmed
the interpretation given by the learned single Judge to sub-
section (4) of Section 80 of the Act as well as Rule 187 of
the Rules and further held that in the matter of
appointments to the post of Clerk there has been violation
of sub-section (4) of Section 80 of the Act as well as Rule
187 of the Rules by both the Banks. In case of Kottayam Bank
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the Division Bench relied upon the report prepared by the
Kerala Public Men’s (Corruption, Investigation and
Enquiries) Commission and further held that even if the said
report had not been indicated in the notice that was issued
under Rule 176 of the Rules and even if the said report had
not been put to the employees, whose appointments have been
annulled by the Registrar but the High Court would be
justified in relying upon the same in not exercising its
extra-ordinary jurisdiction under Article 226 of the
Constitution. The Division Bench, therefore, ultimately came
to hold that in case of Kottayam Bank even if the appellant
may not have been guilty to any such mal-practices but the
entire process of selection was vitiated, and therefore,
there was no other remedy than to cancel the appointments
made. In case of Thrissur Bank while it affirmed the views
of the Registrar as well as that of the learned single Judge
that there has been an infraction of sub-section (4) of
Section 80 of the Act as well as Rule 187 of the Rules but
it held "In view of the peculiar circumstances of the case
and having regard to the fact that the selection was not
tainted with any illegality, we direct that the first 24
candidates in the general merit quota be allowed to be
retained and 24 candidates who have been selected under the
member society also be allowed to be retained and 5
candidates from the list of Scheduled Castes/Scheduled
Tribes candidates may be retained in service". The order of
the Registrar annulling the appointment of rest of the
candidates, however, was affirmed.
Mr. F.S. Nariman, learned senior counsel appearing for
the appellants Benny T.D. & Others contended, that under
Sub-Section (4) of Section 80 of the Act 10% of the posts of
employees are required to be reserved for persons belonging
to Scheduled Castes and Scheduled Tribes where the method of
recruitment is by direct recruitment. Consequently in case
of Thrissur Bank 11 posts were required to be filled up by
the Scheduled Castes and Scheduled Tribes, but the said
provision cannot be interpreted to mean that the employer-
Bank is bound to recruit from amongst the applicants
belonging to the said category, 11 persons irrespective of
their suitability. The Bank having found only 5 persons
belonging to the said category suitable and having appointed
them and further having made a fresh advertisement for 6
more persons belonging to the said category as a special
recruitment there has been no violation of Sub-Section (4)
of Section 80. The Registrar as well as the High Court in
the Single Judge Bench and Division Bench committed gross
error in interpreting Sub-Section (4) of Section 80 and in
holding that the provisions of Sub-Section (4) of Section 80
has been infringed as the Bank did not take steps for having
a lesser cut off mark for the reserved category and in not
filling up all the 11 posts meant for the reserved category
people. The aforesaid erroneous construction of the
provisions of Sub-Section (4) of Section 80 vitiates of the
ultimate conclusion. The learned senior counsel further
urged that the Registrar as well as the learned single Judge
and the Division Bench in appeal have misconstrued the
provisions of Rule 187 of the Rules by interpreting the said
provisions to mean that there should be a reservation to the
extent of 50% of vacancies for the people belonging to the
Primary Society. According to Mr. Nariman, the learned
senior counsel, the only logical conclusion that can be made
of Rule 187 is that the experience of the in-service
candidates serving in different primary societies has to be
construed as an additional qualification to the extent of
50% of the vacancies. In other words, this can be treated to
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be an additional weightage for the in-service candidates
service in the primary society and by no stretch of
imagination it can be construed to be a reservation to the
extent of 50% in favour of in-service candidates serving in
the primary societies. In this view of the matter the
Registration as well as the learned Single Judge and the
Division Bench of the High Court committed error in coming
to the conclusion that Rule 187 tantamounts to reservation
of 50% of the vacancies in favour of candidates serving in
the primary societies and since only 24 of this category
were appointed as against 56 belonging to the general
category there has been an infraction of Rule 187 and
ultimately the entire process of selection gets vitiated.
Mr. nariman, learned senior counsel also urged that the
Registrar committed serious error of record in holding that
the bank appointed staff in excess of the staff strength
approved by the Registrar, inasmuch as it was nobody’s case
that there did not exist 116 vacancies in the Bank of the
date when the Resolution was passed for appointment of 116
persons and the aforesaid conclusion of the Registrar is
based upon no materials at all. According to learned senior
counsel if the aforesaid conclusion of the Registrar is
based on the ground that the advertisement having indicated
probable number of vacancies to be 85 the recruitment could
not have been made beyond the said advertisement then it
cannot be held that there was appointment of staff in excess
of the staff strength. The advertisement merely indicates
the probable vacancies but by the time selection is made and
recruitment is made all subsequent vacancies have to be
taken into account and that is why appointments had been
made in favour of 116 persons. The conclusion of the
Registrar, therefore, on that score is wholly erroneous. Mr.
Nariman, learned senior counsel also urged that the fact
that 5 Scheduled Caste persons were recruited is not
disputed and merely because the register of candidates did
not show against the names to be Scheduled Castes/Scheduled
Tribes it cannot be said to be an infraction of Sub-Section
(4) of Section 80. In the context of interpretation of Rule
187 Mr. Nariman urged that Circular No. 18 of 1991 on which
the Registrar relied upon and the High Court has also relied
upon nowhere indicates that there should be reservation to
the extent of 50% of the vacancies in favour of the members
of the primary societies for being recruited as clerks in
the Apex Bank and in that view of the matter by relying upon
a wrong circular the ultimate conclusion is vitiated.
Mr. V.R. Reddy, learned Additional Solicitor General
appearing for the Registrar of Co-operative Societies,
however, strenuously urged that Rule 187 being an additional
qualification for the purpose of appointment to the post of
clerk in the Apex Society the said additional qualification
should be treated as a part of Rule 186. According to Mr.
Reddy both these Rules should be read together and if Rule
187 is treated as a part of Rule 186, the conclusion becomes
irresistible that no person can be appointed to the extent
of 50% of the vacancies excepting those possessing
additional qualification mentioned in Rule 187. In other
words, according to Mr. Reddy a conjoint reading of Rules
186 and 187 would mean that the 50% of the vacancies have to
be filled up by open candidates and other 50% of the
vacancies have to be filled up by in-service candidates
serving in different primary societies who possess the
additional qualification. On such an interpretation being
applied to the facts in hands there cannot be any doubt that
the Bank Authorities contravened Rule 187 in appointing only
24 in-service candidates whereas 87 open candidates were
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appointed and in this view of the matter the Registrar and
the High Court was justified in cancelling the Resolution of
the Bank making the appointments.
Mr. K.N. Bhat, learned Additional Solicitor General
appearing for the State of Kerala further contended that the
Division Bench was wholly in error in finding out a via
media after coming to the conclusion that in the matter of
appointments there has been a violation of Sub-Section (4)
of Section 80 as well as Rule 187. According to the learned
Additional Solicitor General the recruitment to the post of
clerk in the Bank having been governed by statutory
provisions and the Bank Authorities having contravened those
statutory provisions the entire selection process gets
vitiated and, therefore, Division Bench was not justified in
sustaining the appointments of some in the aforesaid
selection process.
Mr. Vaidyanathan, learned senior counsel appearing for
appellants in Kottayam Bank case reiterated the contentions
raised by Mr. Nariman so far as the interpretation of Sub-
Section (4) of Section 80 of the Act and Rule 187. He
further urged that even if Rule 187 to be treated as part of
Rule 186 then entire selection process cannot be set aside.
According to learned senior counsel said Rule 187 can be
held to be mere directory and not mandatory. On the
conclusion of the Division Bench that the selection has been
vitiated by illegality and mal-practices like tampering of
marks Mr. Vaidyanathan contended that the said allegation
neither was put to the Bank in the notice issued under Rule
176 nor the report of the Public Enquiry Commission had been
supplied to the Bank or the affected party. Consequently,
the Division Bench committed gross error of law in holding
that the entire selection process gets vitiated on account
of irregularities and mal practices adopted
Mr. Sukumaran, learned senior counsel appearing for the
Registrar in the said Kottayam Bank case contended, that
when the selection made was not objective and fair and even
the Public Enquiry Commission found tampering of marks in
respect of several candidates the dispute cannot be treated
as purely adversarial as it involve public interest, and
judged from that stand point the entire selection process
must be held to have been vitiated and the High Court did
not commit any error in annulling the Resolution making
appointments to the posts of clerks. In support of this
contention the learned senior counsel placed reliance on a
decision of this Court in Pritpal Pal Singh & ors. vs. State
of Haryana & Ors. (1994) 5 Supreme Court Cases 695.
In view of the rival submission at the Bar, the first
question that arises for consideration is whether :
the conclusion of the High Court that there has been an
infraction of sub-section (4) of Section 80 of the Act is at
all correct? For a better appreciation of the point in
issue, sub-section (4) of Section 80 of the Act is quoted
hereinbelow in extenso:
"Notwithstanding anything contained
in sub-section (1) or sub-section
(2), ten per cent of the posts of
employees of every society shall be
reserved for appointment from
persons belonging to the Scheduled
Castes and Scheduled Tribes were
the method of appointment to such
posts is by direct recruitment."
A plain meaning of the aforesaid provision is that 10
per cent of the posts which are to be filled up by direct
recruitment must be kept reserved for the Scheduled Castes
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and Scheduled Tribes people. In the case in hand, when the
total number of posts to be filled up were 116, 10 per cent
of the said posts would work out at 11. As has been stated
earlier, pursuance to the advertisement issued in case of
Trissur Bank 87 Scheduled Castes and Scheduled Tribes
candidates had applied and after the written test only six
of them passed the minimum prescribed standard fixed by the
employer. But one of them was disqualified for having filed
a wrong declaration and five were appointed. It is an
admitted case that for six posts meant for the aforesaid
reserved category of Scheduled Castes/Scheduled Tribes
persons a fresh advertisement had been issued to hold a
special recruitment so as to fill up the quota of 11, there
is neither any allegation nor any finding that the quota
meant for Scheduled Castes/Scheduled Tribes candidates has
been usurped either by General category candidates or by
candidates belonging to Primary Societies. In this view of
the matter, we fail to understand how can it be held that
there has been a violation of sub-section (4) of Section 80
of the Act. From the impugned judgment of the High Court, it
appears that since the Bank did not give any relaxation in
favour of Scheduled Castes/Scheduled Tribes candidates by
fixing a lower marks for passing, the court has come to the
conclusion that there has been a violation of sub-section
(4) of Section 80 of the Act. In our considered opinion, the
conclusion of the High Court on the aforesaid basis is
wholly erroneous. Neither the Act nor the Rules made
thereunder nor even the guidelines issued by the Registrar
prescribing procedure for appointment to the post in the
apex society anywhere even whisper that there should be a
lesser standard of scrutiny for the Scheduled
Castes/Scheduled Tribes candidates. It is well settled that
when recruitment to posts is governed by statutory rules
framed in exercise of power under proviso to Article 309 of
the Constitution, said Rules must be strictly adhered to or
else the appointments would be struck down for not being in
conformity with such statutory Rules. Since the statuary
rules of recruitment in the present case did not provide for
a lower standard of scrutiny for the reserved Scheduled
Castes/Scheduled Tribes category of candidates and even the
Registrar had not issued any such direction, the Bank cannot
be held liable for not having prescribed a lesser standard
of scrutiny for reserved candidates nor on that ground it
can be said that there has been a violation of sub-section
(4) of Section 80 of the Act. In this view of the matter,
the conclusion of the High Court with regard to alleged
infraction of sub-section (4) of Section 80 of the Act is
wholly unsustainable and the same must be quashed. It may be
stated in this connection that though five of the candidates
belonging to Scheduled Castes/Scheduled Tribes were
appointed and this fact has not been denied but yet the High
Court erroneously came to the conclusion that such
appointments were made on the merit quota. This conclusion
is based on the fact that against these candidates there has
been no mentioning of Scheduled Castes or Scheduled Tribes.
As it appears from the relevant materials produced, that the
General category candidates in whose favour appointments had
been issued up to the 86th position and the Scheduled
Castes/Scheduled Tribes candidates who were appointed had
secured the ranks much below namely 92, 93, 95 onwards. The
conclusion of the High Court that they got the appointment
from the merit quota is on the face of it erroneous.
The next question that arises for consideration is :
whether the High Court was justified in coming to the
conclusion that both the Banks, namely, Trissur Bank as well
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as Kottayam Bank has violated the provisions of Rule 187 of
the Rules? In view of the contentions raised by Mr. Reddy,
the learned Additional Solicitor General, appearing for the
Registrar in this connection and the reasoning on which the
High Court came to hold that there has been a violation of
Rule 187, it would be appropriate to extract Rules 186 and
187 in extenso:
"Rule 186. Qualifications :-
(1) No person shall be eligible for
appointment in any post unless he
possesses the qualifications
prescribed for the post as shown
below:
(i) All posts other than those
requiring technical
qualifications, the starting
pay of which is Rs. 250/- and
above:
A. A Degree in Commerce or
Masters Degree in Arts of
a recognised University,
with Co-operation as
special subject
OR
B. (i) B.A., B.Sc., or
B.Com. degree of a
recognised University and
(ii) Higher Diploma in
Co-operation (HDC of
State Co-operative
Union of Kerala or
HDC, and HDCM of the
National Council for
Co-operative
Training) or
successful
completion of the
Subordinate (Junior)
Personnel Co-
operative Training
Course (Junior
Diploma in Co-
operation).
C. Diploma in Rural Services
with CO-operation as
optional subject.
OR
D. B.Sc. (Co-operation &
Banking) Degree of the
Kerala Agricultural
University.
(ii) Other supervisory and
Ministerial posts other than
those requiring Technical
qualifications, the starting
pay of which is below Rs.
250/-:
S.S.L.C. or its equivalent and
successful completion of
Subordinate Personnel Co-
operative Training Course
(Junior Diploma in Co-
operation).
(iii) Typist:
S.S.L.C. or its equivalent
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with Type-writing (Lower).
(iv) Stenographer:
S.S.L.C. or its equivalent
with Type-writing (Lower)
(v) All other posts with starting
pay below Rs. 100:
Seventh Standard.
Note:- (1) Nothing in this Rule
shall apply to the present
incumbents for the present post
they hold.
xxx xxx xxx
187. Vacancies in Apex Society:
Notwithstanding anything contained
in Rule 186 for appointments to the
50% of the vacancies arising in the
Apex Society or (other Federal type
Society having other societies as
its members) experience in the
societies which are members of the
respective Apex Society or Federal
type society, as the case may be,
(shall be a necessary additional
qualification)."
In the impugned judgment the High Court, interpreting
Rule 187 of the Rules recorded its conclusion that 50% of
the vacancies in an apex society must be filled up with
persons having the additional qualification mentioned in
Rule 187, which in turn, would mean that the quota for such
candidates who are working in the member society is fixed at
50% of the vacancies. On a plain reading of Rule 187, by
itself, it is difficult for us to accept the conclusion
arrived at by the High Court to the effect that 50% of the
vacancies are reserved for employees of Primary Co-operative
Societies affiliated to the Bank. A combined reading of
Rules 186 and 187 would lead the only conclusion that though
the qualification for the posts of "Clerk" had been
enumerated in Rule 186 but in respect of 50% of vacancies
arising in the apex society, the in-service candidates
serving in the Primary Societies will get the advantages as
their experience would be treated as an additional
qualification. In this view of the matter, it is difficult
for us to hold that under Rule 187, 50% of the vacancies in
the apex society is kept reserved for the in-service
candidates serving in the Primary Societies. Mr. Reddy the
learned Additional Solicitor General appearing for the
Registrar faced with this position urged that though under
Rule 187 apparently there has been no reservation for in-
service candidates but the said Rule should be read as a
part of Rule 186, both the Rules being operative in the same
field, namely, prescribing qualification for appointment to
the post of "Clerk" and on such a construction being given
it would be logical to hold that no person would be eligible
for appointment to the 50% of the vacancies arising in the
apex society unless he possesses the necessary additional
qualification as provided in Rule 187. such a construction
cannot be given to Rule 187 in view of the opening words of
the said Rule starting with a non-obstante clause. When a
particular provision in a statute begins with a non-obstante
to the effect "notwithstanding anything contained" the idea
is obvious that the provision embraced in the non-obstante
clause will not be an impediment for the operation of the
enactment. It would, thus, be impermissible to construe
Rule 187 in the manner as contended by Mr. Reddy, the
learned Additional Solicitor General, nor is it possible for
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us to agree with the construction made by the High Court in
coming to the conclusion that under Rule 187, 50% of the
vacancies arising in the apex society has to be kept
reserved for persons belonging to the Primary Societies. The
construction put to the Rule 187 by the High Court is wholly
erroneous and the same cannot be sustained and consequently
the ultimate conclusion that there has been an infraction of
Rule 187 is unsustainable in law. From the assertions made
by the Bank in the special leave petition which they had
filed, it appears that the Bank had fixed 52 as the cut off
marks in the written test for the direct recruits both
General and Scheduled Castes/Scheduled Tribes candidates and
44 for employees belonging to the Primary Societies and
those of the candidates who secured more than 44 from
amongst applications belonging to the Primary Society they
had been called for interview and on the basis of the marks
secured in interview the same being added to their marks in
the written test, final selection was made. In case of
Trissur Bank, 432 candidates belonging to the Primary
Society had applied for and only 75 of them secured marks
above 44 and were called for interview and finally 24 of
them were found suitable and were appointed. Under the Rules
as well as the guidelines issued by the Registrar providing
the procedure for making recruitment the power of the
employer to adjudge suitability has not been taken away in
any manner. While, therefore, Rule 187 gives a leverage in
favour of in-service candidates serving in the primary
society for being considered for the posts of "Clerk" in the
apex society by taking their experience as an additional
qualification but such additional qualification even after
being taken into account if a person is adjudged unsuitable
there is no compulsion on the employer to appoint such
unsuitable person. In the aforesaid premises, we are of the
considered opinion that the High Court committed serious
error of law by holding that there has been a violation of
Rule 187 since 50% of the vacancies have not been filled up
by the candidates serving in different primary societies.
Though the High Court dismissed the writ petition as
well as the writ appeals preferred against the judgment of
the learned single Judge by coming to the conclusion that
there has been violation of sub-section (4) of Section 80 of
the Act and Rule 187 of the Rules but the Registrar had
annulled the resolutions of the Bank appointing persons to
the post of Clerk on other grounds also and since the
legality of the order of the Registrar invalidating the
appointment made was challenged in the High Court by filing
writ petitions, it is necessary to examine the other grounds
also. From a perusal for consideration would indicate that
the Registrar had also struck down the appointment on two
other grounds, namely, the Bank had appointed staff in
excess of the approval strength and secondly the
advertisement was not in accordance with the Circular-
instructions of the Registrar of Co-operative Societies No.
18 of 1991. Coming to the question as to whether appointment
had been made in excess of the staff strength approved by
the Registrar, it appears that apart from the above
statement made by the Registrar in his order no material has
been brought on to the record to support the aforesaid
conclusion of the Registrar. Merely because in the
advertisement issued by the bank probable number of
vacancies had been indicated to be lesser than the number of
persons finally appointed, one cannot jump to the conclusion
that there has been an excess appointment beyond the staff
strength approved by the Registrar. It is well known that
during the time when an advertisement is issued and by the
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time when process of selection starts and ultimately
appointment orders are issued on account of several factors
the number of posts may be increased, the factors being
retirement of persons on attaining superannuation, death of
several employees, promotion of the employees to higher
posts and for variety other grounds. In such contingencies,
when appointments are made depending upon the vacancies
available and in excess of the vacancies advertised it
cannot be said that the appointment has been made in excess
of the strength of the cadre approved. There is neither any
allegation nor may material to sustain the finding of the
Registrar that in fact appointment has been made in excess
of the posts approved by the Registrar. The said conclusion,
therefore, must be held to be a conclusion based on no
evidence and accordingly cannot be sustained.
The next question relates to the Circular - instruction
of the Registrar of Co-operative Societies No. 18 of 1991.
The said circular is dated 7th of June, 1991. It provides
the procedure relating to recruitment for appointment of
employees in Co-operative institutions. We have carefully
considered the aforesaid circular. Clause 4(e) of the
circular stipulates that the conditions with regard to age-
limit, qualifications, mode of appointment as laid down in
the rules framed under Section 80 such as rules 183, 186,
187 of the Kerala Co-operative Society Rules shall be
strictly followed. In view of our earlier conclusion that
there has been no violation of Rule 187 of the Rules, the
conclusion of the Registrar that appointment has been made
in contravention of the aforesaid circular No. 18 of 1991
also falls through and the said conclusion cannot be
sustained.
Apart from the aforesaid question which are common in
respect of recruitment in both the Banks, in case of
Kottayam Bank the Division Bench of the High Court had
categorically found that the recruitment itself is vitiated
on account of large scale mal-practice. It may be stated
that the Registrar while issuing notice under Rule 176 of
the Rules to the Board of Directors of Kottayam District Co-
operative Bank by letter dated 24th of July, 1986 did not
indicate about any large scale mal-practice adopted in the
test conducted by the bank excepting to the effect: "The
marks awarded and the consolidated marks recorded are
corrected and manipulated." Some of the candidates were
given less marks and some others were given higher marks.
But while considering the legality of the resolutions passed
by the bank appointing several persons the Registrar took
into consideration on the so-called report of the Kerala
Public Men’s (Corruption, Investigation and Enquiries)
Commission who had directed for a detailed enquiry and on
that basis came to the ultimate conclusion that the
appointment of candidates made by the Kottayam District Co-
operative Bank is vitiated. The learned Single Judge came to
the conclusion, and in our opinion rightly, that in the
absence of any detailed particulars of the alleged
irregularities in the notice issued to the bank under Rule
176 and in the absence of report of the Kerala Public Men’s
(Corruption, Investigation and Enquiries) Commission being
made available to the bank or the persons appointed, it is
not open to the bank or the persons appointed, it is not
open to the Registrar to come to the conclusion about the
irregularity and said conclusion is vitiated on account of
gross violation of the principle of natural justice. The
Division Bench, however, disagreed with the conclusion of
the learned Single Judge on the score and relied upon the
report of the Commission and came to hold that the entire
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selection process was vitiated by illegality and
irregularity and therefore there is no other option than to
cancel the appointments of all the candidates. The Division
Bench was conscious of the fact that the persons to be
adversely affected by the impugned decision had not been
given an opportunity inasmuch as the relevant documents had
not been put to them nor even to the bank who made
recruitment but yet brushed aside the principle of natural
justice and did not focus its attention to the same and on
the other hand came to the conclusion that the process of
selection got vitiated on account of alleged irregularity
and illegality. In our considered opinion the Division Bench
patently committed an error in relying upon the report of
the Commission and in recording a finding that
irregularities have been committed in the selection
notwithstanding the fact that the said report had not been
made available to the Bank or to the affected parties. That
apart, as stated earlier in the notice that was issued by
the Registrar there was no particulars given and on such
vague assertions made, it was not permissible to record a
conclusion that there has been any irregularity in the
process of selection. The said conclusion of the Division
Bench much accordingly be set aside.
Mr. Sukumaran the learned senior counsel relied upon
the decision of this Court in Pritpal Pal Singh & ors. vs.
State of Haryana & Ors. (1994) 5 Supreme Court Cases 696 and
urged that in view of the findings of the Public Inquiry
Commission that there has been tampering of marks in respect
of several candidates and as such there has been no fair and
objective selection, the public interest demands annulment
of the entire selection and a court should not shirk its
responsibility by directing annulment of selection on the
mere technicality that the Report of the said Public Inquiry
Commission had not been given to the Bank or any of the
persons to be affected. In the aforesaid case, selection
made by the Haryana Subordinate Services Selection Board for
appointment to the post of Assistant sub-Inspectors of
Police was annulled by this Court on coming to a conclusion
that the selection made by the Board was not objective and
fair. This Court held that the matter which involved the
public interest could not be treated as purely adversarial.
But in the course of hearing the Court being of the opinion
that the problem to be resolved was much too serious to be
dealt with on adversarial contentions and in view of glaring
infirmities in the process of selection which the court
noticed, all the persons including those who had been
selected and appointed were directed to be duly noticed, so
that, the court could decide as to whether the entire
selection process was infirm and quash the selection. To
achieve the aforesaid objective, the court had called upon
the Chief Secretary to the State Government to furnish upon
affidavit particulars regarding constitution of the Board,
the names and qualification of its members and to produce
the record and minutes of the Board’s meeting. In other
words, the Court complied with the principles of natural
justice by giving notice to the affected parties of all the
relevant materials and then on receiving explanations from
those persons by way of affidavit in this Court and taking
into account the contentions raised by those persons,
ultimately decided the matter. The ratio of the aforesaid
case will have no application to the present case inasmuch
as neither the Bank nor any of the affected parties have
been given a copy of the Report of Public Inquiry Commission
on which Report the Registrar had relied upon as well as the
Division Bench of the High Court had relied upon and came to
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a conclusion by relying upon such Report without giving any
opportunity to the parties concerned to have their
submission. It would tantamount to gross violation of the
principle of natural justice which cannot be brushed aside
on the ground that public interest demands annulment of the
selection. In our opinion, the ratio of the aforesaid
decision cannot be applied to the case in hand.
In view of our conclusions as aforesaid, we hold that
the order of the Registrar in annulling the resolutions of
the Trissur District Co-operative Bank Limited as well as
the resolution of the District Co-operative Bank Limited as
well as the resolution of the District Co-operative Bank,
Kottayam is vitiated with manifest error and as such the
said order of the Registrar cannot be sustained and we
accordingly quash the same. The judgments of the High Court
passed by the learned Single Judge as well as the Division
Bench in writ appeal are also erroneous and the same are
therefore set aside and the writ petitions filed by the
respective petitioners stand allowed. Necessarily,
therefore, the appointments made to the post of Clerk by
Resolution No. 2 dated 5.2.1995 and Resolution No. 10 dated
17.5.1995 passed by the Board of Directors of Trissur
District Co-operative Bank is held to be valid and similarly
appointment made to the post of Clerk by Resolution Nos. 3
and 4 dated 13.4.1995 passed by the Board of Directors of
District Co-operative Bank, Kottayam must be held to be
valid. Civil Appeals arising out of S.L.P. @ Nos. 9350-9352
of 1997, Civil Appeal arising out of S.L.P. @ No. 9728 of
1997, Civil Appeals arising out of S.L.P. @ Nos. 10149-10150
of 1997, stand allowed and Civil Appeals arising out of
S.L.P. @ Nos. 15444-15448 of 1997 filed by the State of
Kerala stand dismissed but in the circumstances there will
be no order as to costs.