K.Mathialagan v. The Tamilnadu Cooperative Milk Producers Federation Limited Staff Association

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 18.4.2009CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE N.KIRUBAKARANWrit Appeal No.2743 of 2002& W.A.M.P.No.4644 of 2002K.Mathialagan .. Appellantvs.1. The Tamilnadu Cooperative Milk Producers Federation Limited Staff Association, (Reg.No.779/CPT/05), Rep. by its President, Madras-600 051.2. The Goverment of Tamilnadu, Rep. by its Secretary, Animal Husbandry Department, Fort St.George, Chennai-600 009.3. The Tamilnadu Cooperative Milk Producers Federation Limited Rep. by its Managing Director, Aavin Illam, Madhavaram Milk Colony, Madras-600 051... RespondentsWrit Appeal against the order dated 27.6.2002 passed by thelearned single Judge in Writ Petition No.16043 of 1995 on the fileof this Court.This Writ petition presented to this Court under Article 226of the constitution of India to issue a writ of certiorarifiedmandamus, calling for the records relating to the order of the 2ndrespondent in Ref.No.12787/Petn/Estt.5/95 dated 7.11.1995 andquash the same and to direct the respondents 1 and 2 to fill upthe vacancies of the various posts from office assistant to DeputyManager in the respondent federation by promotion from among thefederation employees as contemplated under the service rules. https://hcservices.ecourts.gov.in/hcservices/ For appellant : Mr.G.JeremiahFor respondents: No appearance for R-1 Mr.D.Sreenivasan, Addl.G.P. for R-2 Mr.P.Narayanamoorthy for R-3JUDGMENT(The Judgment of the Court was delivered by S.J.Mukhopadhaya,J)The Writ Appeal has been preferred by Mr.K.Mathialagan, whowas the third respondent in the Writ Petition, against the orderdated 27.6.2002 passed by the learned single Judge in WritPetition No.16043 of 1995. 2. In the said Writ Petition, the first respondent herein,namely Tamil Nadu Co-operative Milk Producers Federation LimitedStaff Association (hereinafter referred to as 'the StaffAssociation'), challenged the order dated 7.11.1995 issued by thethird respondent herein, namely the Tamil Nadu Co-operative MilkProducers' Federation Limited, whereby and whereunder, theappellant was appointed as Assistant in the third respondent-Co-operative Milk Producers' Federation Limited. 3. The learned single Judge held that the appointment was notlegal, as no direction was given by the State Government to absorbcertain persons working in the Tamil Nadu Magnesium and MarineChemicals Limited, and due to its closure, at the time, theappellant was so appointed.4. As the case could be disposed of on a short point, it isnot necessary to discuss all the facts except the relevant one, asmentioned hereunder.5. The appellant-Mathialagan, who was working as Assistant inthe Tamil Nadu Magnesium and Marine Chemicals Limited, wasappointed by proceedings in Reference No.12787/Pers/Ess.5/95,dated 12.10.1995, as Assistant in the third respondent-Co-operative Milk Producers' Federation Limited, on permanentabsorption basis in the scale of pay of Rs.1,200-2,040/- withother usual allowances. The said Tamil Nadu Magnesium and MarineChemicals Limited, was earlier shut down on 31.1.1993 andtherefore, the appellant was appointed in the service asAssistant. https://hcservices.ecourts.gov.in/hcservices/

6. Challenging the said proceedings dated 7.11.1995, thefirst respondent-Staff Association filed Writ Petition No.16043 of1995 before this Court, on the ground that the said appointmentwas illegal. The third respondent-Co-operative Milk Producers'Federation Limited, while opposing the said Writ Petition, took aspecific plea that the Writ Petition was not maintainable againstthe third respondent- Co-operative Milk Producers' FederationLimited, which is a Co-operative Society under the Tamil Nadu Co-operative Societies Act. Similar stand was taken on behalf of theState of Tamil Nadu. 7. It was also brought to the notice of the learned singleJudge that, in the meantime, the State Government issuedG.O.Ms.No.59, dated 20.2.1997 from the Industries Department,wherein, the State Government, having noticed that the Tamil NaduMagnesium and Marine Chemicals Limited, a Government of Tamil Naduundertaking, was shut down on 31.1.1993 due to technology problemand uneconomical operating conditions, a final decision ofrevival/rehabilitation of the Tamil Nadu Magnesium and MarineChemicals Limited was likely to take considerable time and toavoid unproductivity drain on the exchequer of the StateGovernment, it was decided to absorb the workers in one or otherundertaking of the State Government. 8. While the Tamil Nadu Co-operative Milk Producers'Federation Limited and the State Government have appeared throughcounsel and took similar plea that the Writ Petition was notmaintainable against the Co-operative Society (the thirdrespondent in the Writ Appeal) in question, in spite of notice inthe present Writ Appeal, the first respondent-Staff Associationhas not appeared.9. Learned counsel appearing on behalf of the appellant-K.Mathialagan, while also took the same plea that the WritPetition was not maintainable against the Co-operative Society,namely, the third respondent-Tamil Nadu Co-operative MilkProducers' Federation Limited, also took a plea that the appellantwas otherwise entitled for absorption in one or other publicsector undertaking of the Government of Tamil Nadu, pursuant toG.O.Ms.No.59, dated 20.2.1997 issued from the IndustriesDepartment. 10. We have heard learned counsel appearing for the partiesand perused the records.11. The question relating to the maintainability of the WritPetition against a Co-operative Society, fell for considerationbefore different Courts from time to time. In the case of https://hcservices.ecourts.gov.in/hcservices/ "A.Umarani vs. Registrar, Coop. Societies", reported in 2004 (7)SCC 112, while the Supreme Court did not express its opinion as towhether a Co-operative Society is a "State" within the meaning ofArticle 12 of the Constitution of India, observed as follows:"60. Although we do not intend to expressany opinion as to whether the cooperativesociety is a "State" within the meaning ofArticle 12 of the Constitution of India but itis beyond any cavil of doubt that the writpetition will be maintainable when the actionof the cooperative society is violative ofmandatory statutory provisions. In this caseexcept the nodal centre functions andsupervision of the cooperative society, theState has no administrative control over itsday-to-day affairs. The State has not createdany post nor could it do so on its own. TheState has not borne any part of the financialburden. It was, therefore, impermissible forthe State to direct regularisation of theservices of the employees of the cooperativesocieties. Such an order cannot be upheld alsoon the ground that the employees allegedlyserved the cooperative societies for a longtime."12. The question of maintainability of a Writ Petitionagainst a Co-operative Society, subsequently fell forconsideration before a Larger Bench consisting of Five HonourableJudges of this Court, in the case of "Marappan,K. vs. The DeputyRegistrar of Co-operative Societies, Namakkal", reported in 2006(4) CTC 689, and in the said case, the Court held as follows:"21. From the above discussion, thefollowing propositions emerge:(i) If a particular co-operative society canbe characterised as a 'State' within themeaning of Article 12 of the Constitution(applying the tests evolved by the SupremeCourt in that behalf), it would also be 'anauthority' within the meaning and for thepurpose of Article 226 of the Constitution. Insuch a situation, an order passed by a societyin violation of the bye-laws can be correctedby way of Writ Petition;(ii) Applying the tests in Ajay Hasia it isheld that a co-operative society carrying onbanking business cannot be termed as an https://hcservices.ecourts.gov.in/hcservices/ instrumentality of the State within themeaning of Article 12 of the Constitution;(iii) Even if a society cannot becharacterised as a 'State' within the meaningof Article 12 of the Constitution, a Writwould lie against it to enforce a statutorypublic duty cast upon the society. In such acase, it is unnecessary to go into thequestion whether the society is being treatedas a 'person' or 'an authority' within themeaning of Article 226 of the Constitution andwhat is material is the nature of thestatutory duty placed upon it and the Courtwill enforce such statutory public duty.Although it is not easy to define what apublic function or public duty is, it canreasonably said that such functions aresimilar to or closely related to thoseperformable by the State in its sovereigncapacity.(iv) A society, which is not a 'State' wouldnot normally be amenable to the writjurisdiction under Article 226 of theConstitution, but in certain circumstances, awrit may issue to such private bodies orpersons as there may be statutory provisionswhich need to be complied with by allconcerned including societies. If they violatesuch statutory provisions a writ would beissued for compliance of those provisions.(v) Where a Special Officer is appointed inrespect of a co-operative society which cannotbe characterised as a 'State' a writ would liewhen the case falls under Clauses (iii) and(iv) above.(vi) The bye-laws made by a co-operativesociety registered under the Tamil Nadu Co-operative Societies Act, 1983 do not have theforce of law. Hence, where a society cannot becharacterised as a 'State', the serviceconditions of its employees governed by itsbye-laws cannot be enforced through a WritPetition.(vii) In the absence of special circumstances, https://hcservices.ecourts.gov.in/hcservices/ the Court will not ordinarily exercise powerunder Article 226 of the Constitution of Indiawhen the Act provides for an alternativeremedy.(viii) The decision in M.Thanikkachalam v.Madhuranthagam Agricultural Co-operativeSociety, 2000 (4) CTC 556, is no longer goodlaw, in view of the decision of the Seven-Judge Bench of the Supreme Court in PradeepKumar Biswas case and the other decisionsreferred to here before."13. So far as the present case is concerned, from the Bye-Laws of the third respondent-Tamil Nadu Co-operative MilkProducers' Federation Limited, it appears that it is a registeredCo-operative Federation under Sub-Section (1) of Section 9 of theTamil Nadu Co-operative Societies Act, 1961, on the basis oflimited liability, vide registration dated 15.12.1980. As per theBye-Laws, there is a Board of Directors for the third respondent-Tamil Nadu Co-operative Milk Producers' Federation Limited and aPersonnel Committee is constituted under Bye-Law No.25.8. TheChairman and the Managing Director of the Tamil Nadu Co-operativeMilk Producers' Federation Limited, are independent authoritiesunder the Bye-Laws, clothed with the power as per the Bye-Laws.Under Bye-Law 4.1, the 'funds' may be raised by (i)shares, (ii)debentures, (iii)deposits, (iv)loans, (v)grants, aids andsubsidies, (vi)donations and (vii)entrance fees. The authorisedshare capital of the Federation is Rs.10 crores, divided into1,00,000 shares of Rs.1,000/- each. As per Bye-Law No.4.3, thefunds to be raised under sub-clauses (ii), (iii) and (iv) of Bye-Law 4.1 relating to the raising of funds, quoted above, the fundsshould not exceed 12 times of the total of paid up share capitaland reserve fund less accumulated losses. The membership of theFederation includes three types, namely, ordinary, nominal andState Government, but there appears to be no direct control ofthe State Government over the Federation and thereby, there isnothing on record to suggest that the Federation comes within themeaning of the 'State' under Article 12 of the Constitution ofIndia or is a 'wing' of the "State".14. In the present case, a specific plea was raised by theState Government and the Co-operative Milk Producers' FederationLimited that the Federation is not a "State" within the meaningof Article 12 of the Constitution of India and that the WritPetition was not maintainable. Though such a specific plea wastaken, but the learned single Judge, without discussing the saidissue, passed the impugned order by merely noticing the statementmade by the first respondent-Staff Association that the third https://hcservices.ecourts.gov.in/hcservices/ respondent-Co-operative Milk Producers' Federation Limited is alimb of the Government of Tamil Nadu. We find that no document ordecision was brought to the notice of the learned single Judge bythe first respondent-Staff Association (writ petitioner) to showthat the Tamil Nadu Co-operative Milk Producers' FederationLimited is a limb of the State Government and in the absence ofsuch evidence, such a plea cannot be accepted. 15. It is not in dispute that the appellant was in theservices of the Tamil Nadu Magnesium and Marine ChemicalsLimited, working as Assistant. Thus, he was qualified forappointment to the post of Assistant. It is also not in disputethat as per G.O.Ms.No.59, dated 20.2.1997 issued from IndustriesDepartment of the Government of Tamil Nadu, the appellant isentitled for absorption in any of the State Government's publicsector undertakings, as the other undertaking, namely, the TamilNadu Magnesium and Marine Chemicals Limited, where the appellantwas working, was shut down on 31.1.1993 due to technology problemand uneconomical operating conditions. Such a stand having beentaken by the State Government in the year 1997, we are of theview that in the year 2002, when the impugned order was passed,the learned single Judge ought not to have interfered with theorder of appointment of the appellant. 16. This apart, if an experienced hand of one of the StateGovernment's undertaking is appointed in the third respondent-Co-operative Milk Producers' Federation Limited, in the absence ofany illegality brought on record, we are of the opinion that nointerfere is called for.17. For the reasons aforesaid, while we hold that the WritPetition against the third respondent-Tamil Nadu Co-operativeMilk Producers' Federation Limited, in respect of the appointmentof the appellant, is maintainable, we further hold that there wasno ground made out to interfere with the appointment of theappellant. We accordingly set aside the impugned order dated27.6.2002 passed by the learned single Judge in Writ PetitionNo.16043 of 1995 and dismiss the said Writ Petition and allowthis Writ Appeal. No costs. W.A.M.P. is closed. CsSd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Secretary, Goverment of Tamilnadu, Animal Husbandry Department, Fort St.George, Chennai-600 009.2. The Managing Director, Tamilnadu Cooperative Milk Producers Federation Limited Aavin Illam, Madhavaram Milk Colony, Madras-600 051.+ 1 cc to Mr. G. Jeremiah, Advocate, SR No.1577+ 1 cc to Mr. P. Narayanamoorthy, Advocate, SR No.15360+ 1 cc to the Government Pleader, SR No.15563MBS(CO)SR/5.5.2009Writ Appeal No.2743 of 2002