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Issues: (i) Whether the State had authority under the Tamil Nadu Cooperative Societies Act, 1983 and Article 162 of the Constitution of India to issue the Government Order regularising appointments made in violation of the statutory recruitment framework; (ii) Whether appointments made contrary to Rule 149 of the Tamil Nadu Cooperative Societies Rules, 1988 could be regularised or protected under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and the Industrial Disputes Act, 1947.
Issue (i): Whether the State had authority under the Tamil Nadu Cooperative Societies Act, 1983 and Article 162 of the Constitution of India to issue the Government Order regularising appointments made in violation of the statutory recruitment framework.
Analysis: The statutory scheme of the 1983 Act and the 1988 Rules governed recruitment to cooperative societies and required compliance with prescribed qualifications, procedure, cadre strength, reservation, and other mandatory conditions. Section 170 of the 1983 Act permitted exemption only in the manner contemplated by the Act and did not confer a general power to validate illegal appointments. Section 182 enabled directions to the Registrar in specified cases, not a blanket order of regularisation. Article 162 could not independently supply power where the source of authority had to be traced to the statute. A government order purporting to condone appointments made in breach of the Act and the Rules was therefore beyond power.
Conclusion: The State had no authority to issue the Government Order for such regularisation, and the order was invalid.
Issue (ii): Whether appointments made contrary to Rule 149 of the Tamil Nadu Cooperative Societies Rules, 1988 could be regularised or protected under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and the Industrial Disputes Act, 1947.
Analysis: Rule 149 constituted a complete code governing recruitment to cooperative societies, and appointments made without observing its mandatory requirements were illegal. The 1981 Act applied only to industrial establishments, and cooperative societies could not be assumed to fall within that description in the absence of a factual and legal basis. In any event, an appointment made in breach of statutory recruitment rules could not be cured by regularisation, since regularisation is not a mode of recruitment and illegality at the root of appointment cannot be ratified. The Industrial Disputes Act, 1947 and settlements under it were also held inapplicable to such illegally appointed staff.
Conclusion: Appointments made in violation of Rule 149 could not be regularised, and no protection was available under the 1981 Act or the Industrial Disputes Act, 1947.
Final Conclusion: The challenge to the Government Order failed, and the appeals were dismissed because illegal appointments in cooperative societies could not be validated or continued by invoking general executive power, permanency legislation, or equitable considerations.
Ratio Decidendi: Where recruitment to a statutory body is governed by mandatory rules, an appointment made in breach of those rules is void and cannot be regularised by executive order or by invoking general constitutional executive power.