TaxTMI 
TaxTMI 
1995 (12) TMI 379
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....ected to be made from the date on which respective applications were filed. By the time the present Special Leave Petitions came to be filed, a two-Judge Bench of this Court by order dated September 7, 1994 made in C.A. No.2932/91 confirmed the order of the CAT, Madras Bench but the review petition was pending. When these appeals had come up for hearing on October 16, 1995 it was pointed out to another Bench by the Additional Solicitor General that despite the dismissal the matter required examination and for that reason notice was already issued in another case, viz., C.A. @ SLP 24287/95. All the matters were accordingly tagged together. After the dismissal of the review petition a two-Judge Bench by order dated November 13, 1995 referred the matter to this Bench. Thus these appeals by special leave. The admitted facts are that the respondents were appointed by the respective Railway Co-operative Stores registered under the Andhra Pradesh Co-operative Societies Act, 1964 as amended from time to time. The Co-operative Stores were organised by the Railway Administration as social welfare measure to inculcate thrift and cooperative spirit in the management of the societies, distribu....
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....eties. The share capital, though deducted from the salary of the member-employees, is only by way of an amenity to enable them to organise, as a co-operative movement, for self-help and thrift. The Administration has no control over selection, appointment and payment of salaries to the staff of the society. No qualifications are prescribed in that behalf. It is due to administrative exigencies of the concerned Stores or the Societies that appointment or dismissal can be made by the President/committee as per the procedure prescribed under the respective Acts or the Rules or bye-laws made thereunder. Thereby the Railway Administration has no managerial or administrative control over the staff of the Stores/Societies. The conditions of service of the officers of the Railway Administration are not applicable to them. If the Society is liquidated by the Registrar for its mismanagement the employees of the Societies seek the remedy only against the Societies. The societies have not been impleaded as respondents. The ratio in M.M.Khan & Ors. v. Union of India & Ors. [(1990) Supp. SCC 191] cannot be applied to the employees of the Societies/Stores. The rent-free accommodation and provisio....
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....f the respective contentions a question giving rise to far-reaching consequences emerges for decision in these appeals. The question is whether the officers, employees and servants appointed by a Co-operative Society/Stores registered under the Co-operative Societies Act of a State or Societies Registration Act (for short, `the Society') and organised as a welfare measure to inculcate co-operative movement, self-help and thrift among the officers and servants of Railway Administration, can be declared to be regularly appointed Railway employees? Whether they are Railway employees defined under the Railway Establishment Manual and entitled to all the consequential benefits? Before adverting to the instructions in the Railway Establishment Manual, it would be profitable to consider the legal setting of the appointments of the employees and servants of the Society. In this case since admittedly the A.P. Co-operative Societies Act [7 of 1964] (for short `the Act') is applicable, its provisions and of the predecessor Acts repealed thereunder and of the Rules made thereunder as amended from time to time and bye laws of the society are required to be examined. The Act was enacted ....
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....n the constitution, management or the business of the Society other than a dispute regarding disciplinary action taken by the Society or its committee against a paid employee of the Society, shall be resolved by arbitration on a reference under Section 62 and recovery of the monies due to it. Chapter IX deals with winding up of and cancellation of the registered Societies. Liquidator gets appointed to wind up the Society. Chapter X deals with execution of the decisions, decrees or orders. Chapter XI provides for constitution of a Co-operative Tribunal, appointment of the members of the Tribunal, appeal thereto, revision to the Registrar and review of the orders had been provided in Sections 76,77 and 78. Chapter XII deals with offences and penalties. Section 79 (1) (a) provides that "it shall be an offence under the Act, if a committee, an officer, employee or any member of the society willfully makes a false return or furnishes false information, on a lawful order or direction issued" under the Act. Clause (aa) provides that "if the committee, an officer, employee or any member of the society furnishes false information to gain admission or to continue as member of....
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.... related to any director or member of the committee of a financing bank to which the society is affiliated except with the prior approval of the Registrar. (5) Notwithstanding anything contained in the bye-laws/special bye-laws, service regulations or common cadre regulations of the co-operative societies, every paid servant and officer of a society, other than those in the last grade service, shall retire from service on the afternoon of the last date of the month in which he attains the age of 58 years. 29. Appointment of Secretary:- Every financing bank, every credit society with limited liability and a working capital of not less than Rupees one lakh shall appoint a paid secretary. The paid secretary shall be disqualified for being appointed as, and for being a member of the committee of the financing bank, the society or the mortgaged bank, as the case may be:" A conspectus of these provisions would clearly indicate that registration of the society, election to the committee, the term thereof, rights and liabilities of the members and office bearers are regulated under the Act. Power to appoint officers, employees and servants of the society is given to the President o....
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....nd code. The Society enjoys autonomy as a body corporate subject to the provisions of the Act, Rules and bye-laws. It enjoys exclusive power to appoint and keep disciplinary control over the staff in its establishment. The tenure is subject to bye-laws, Rules and Act and law so long as the Society is not liquidated as per law. In Co-operative Central Bank Ltd. & Ors. etc. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad [(1969) 2 SCC 43] this Court had held that Industrial Disputes Act would apply to the employees appointed under the Act by the Co-operative Central Bank. It would, thereby, be clear that appointments of the staff of the establishment, control and disciplinary actions are regulated under the provisions of the Act, the Rules and the remedies provided under law. The question, therefore, emerges whether the officers, employees and servants appointed by Co-operative Society organised under the Railway Establishment Manual could be treated as Railway servants. Paragraph 10B of the Indian Railway Establishment Code defines "Railway Servant" to mean "a person who is a member of a service or who holds a post under the administrative control of the....
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.... was one of the mandatory requirements as a part of efficient Railway Administration. Where the employees are 250 and above, Section 46 of the Factories Act mandates the industrial establishment to establish and maintain canteens. If the employees are 100 and above, though it was not mandatory but maintenance of a canteen under the Railway Establishment Manual is a part of the Railway Administration. In that factual and legal setting, this Court was to consider the effect of non-statutory recognised canteens registered under the Co-operative Societies Act and the staff appointed in those societies. It was held that the management of the Societies was controlled by the Railway Administration by appointing a Chairman or Secretary as a member of the Society. The nominees of the Railway Administration are statutorily obligated to bring to the notice of the Railway Administration all the management and affairs of the committee which is likely to affect the interests of the Railway Administration in its capacity as the owner of the premises and furniture equipments etc. If the decision of the committee is likely to be of a considerable magnitude it is required to be brought to the notice....
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....ay Administration and is later deducted from their salary. It also gives free accommodation for housing the Stores, electricity, free medical aid in its hospitals to those employed by the Stores. In the Manual it is specifically stated that they are entitled to traveling passes when they go to attend the committee meetings. Even otherwise the facilities extended are optional and are only a part of on-going welfare measure. It is seen that service conditions of the employees, officers and servants of the Stores/Societies are not regulated by the Railway Administration. They are governed by the bye-laws of the Societies subject to control and sanction by the Registrar under the State Act or the relevant provisions. There is no obligation on the part of the Railway Administration to provide security for those employees. The disciplinary control by the Society concerned is subject to other laws and is exclusively domestic in character. The Railway Establishment Code is not applicable to them. Their appointment is subject to bond prescribed by the Registrar. The arrears of funds or misappropriated amounts etc. are recoverable under the provisions of the State Act and the Rules made the....