Prior government approval governs wage fixation and service conditions in co-operative societies under statutory rules.

Under the Tamil Nadu Co-operative Societies Act, 1983 and Rule 149 of the 1988 Rules, service conditions of a co-operative society, including scale of pay and allowances, are subject to a special by-law with prior Government approval. The society's Board cannot independently fix wages or enter into binding wage settlements outside that statutory framework. In the absence of a by-law under Rule 149, the Government may prescribe the minimum scale of pay. On that basis, wage fixation and the settlement in question were not legally sustainable, and the Government Orders were upheld.

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Issues: Whether the State Government had jurisdiction to fix the service conditions and scale of pay of employees of a co-operative society, and whether settlements concerning wages and allowances could be entered into without prior approval of the Government.

Analysis: Section 73 of the Tamil Nadu Co-operative Societies Act, 1983 makes appointments by a society subject to the Rules framed under the Act. Rule 149 of the Tamil Nadu Co-operative Societies Rules, 1988 requires every society to adopt a special by-law covering service conditions, including scale of pay and allowances, with the prior approval of the Government. The scheme of the Act and Rules shows that wage fixation and related service conditions cannot be settled by the society or its Board of Directors independently of the statutory requirement of prior approval. In the absence of a by-law framed under Rule 149, the Government may prescribe the minimum scale of pay.

Conclusion: The settlement and wage fixation undertaken without prior approval of the Government were not legally sustainable, and the challenge to the Government Order failed.

Final Conclusion: The writ appeals were dismissed, and the impugned Government Orders were left undisturbed.

Ratio Decidendi: Where the governing statute and rules require prior governmental approval for service conditions of a co-operative society, the society or its Board of Directors cannot validly fix wages or enter into binding wage settlements independently of that approval.

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