TaxTMI 
TaxTMI 
2004 (7) TMI 693
X X X X Extracts X X X X
X X X X Extracts X X X X
....velopment Banks constituted and registered in the State of Tamil Nadu used to be governed under Tamil Nadu Cooperative Societies Act, 1961 (for short "the 1961 Act") and the Tamil Nadu Land Development Banks Act, 1934. The State framed rules under the 1961 Act known as Madras Cooperative Societies Rules, 1963. 5. The 1961 Act and 1934 Act were repealed and replaced by Tamil Nadu Cooperative Societies Act, 1983 (for short "the 1983 Act"). Pursuant to or in furtherance of the powers conferred thereunder, the State framed rules known as the Tamil Nadu Cooperative Societies Rules, 1988 (for short "the 1988 Rules"). The 1983 Act and the 1988 Rules came into force with effect from 13.4.1988. 6. It is not in dispute that a large number of employees, i.e., about 39% of the total strength of the employees of the cooperative societies in the State of Tamil Nadu, were appointed without notifying the vacancies to the Employment Exchanges and without following the other mandatory provisions of the Act and the Rules framed thereunder relating to recruitment. 7. It is not in dispute that a large number of appointees furthermore did not have the requisite educational qualification or othe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ishment (Conferment of Permanent Status to Workmen) Act, 1981 as also the Industrial Disputes Act, 1947? (iii) Whether G.O.Ms. No. 86, dated 12.3.2001 aims at regularizing all the staff appointed to cooperative societies regardless of any defect or any violation of the Rule 149 of the Tamil Nadu Cooperative Societies Rules, 1988, as amended in 1995? (iv) in the alternative, are the illegal appointees entitled for statutory protection of regularization and permanent status by virtue of Section 3 of the Permanency Act subject to their completion of 480 man days in a continuous period of 2 years? And (v) whether personnel not covered by clause (iv) are entitled for protection under the Industrial Disputes Act, 1947?" 12. As regard Issue No. 1, it was held that the writ petitions are maintainable. Issue No. 2 was also decided in favour of the writ petitioners holding that the 1981 Act is applicable to the employees of the Cooperative Societies. 13. Issues No. 3, 4 and 5 were taken up for consideration together. 14. The Division Bench by reason of the impugned judgment opined that the provisions of the 1981 Act would not be applicable as regard appoin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent of the staff cooperative societies, the requirement of notifying the vacancies to employment exchange shall not be taken cognizance of. (vi) that no cooperative staff member appointed subsequent to G.O.Ms. No. 86, Cooperation, Food and Consumer Protection Department, dated 12.3.2001 otherwise than through employment exchange shall be continued in service and their services shall be terminated forthwith. (vii) that either the provisions of Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 or the Industrial Disputes Act, 1947, or the settlements entered under Sections 12 or 18 thereof, shall have no application to the staff of the cooperative societies appointed without adequate qualifications or beyond the cadre strength for the period from 9.7.1980 to 11.3.2001. This is equally applicable to the staff appointed to the cooperative societies, otherwise than through employment exchange, for the period from 12.3.2001 onwards." 15. Mr. S. Balakrishanan, learned senior counsel appearing on behalf of the appellant relying on or on the basis of the decision of this Court in Jacob M. Puthuparambil and Others Vs. Kerala Water ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eties. Section 170 of the 1983 Act, therefore, does not confer any power upon the State to issue the impugned order. 21. In any view of the matter such an order could not have been passed with retrospective effect condoning the actions on the part of the cooperative societies which were in flagrant violations of the provisions of the Act and the Rules made thereunder. 22. Section 182 of the 1983 Act reads as under: "182. Power of Government to give directions.-(1) The Government may, in the public interest, by order, direct the Registrar to make an inquiry or to take appropriate proceedings under this Act, in any case specified in the order, and the Registrar shall report to the Government the result of the inquiry made or the proceedings taken by him within a period of six months from the date of such order or such further period as the Government may permit. (2) In any case, in which a direction has been given under sub-section (1), the Government may, notwithstanding anything contained in this Act, call for and examine the record of the proceedings of the Registrar and pass such orders in the case as they may think fit: Provided that before passi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been stated in the impugned Government Order that all the cooperative societies are commercial establishments within the meaning of Section 2(6) of the Tamil Nadu Shops and Establishments Act, 1947. 29. The Cooperative Societies and the Land Development Banks are governed by the statutes under which they have been created as also the Rules and bye laws framed thereunder. The cooperative societies are obligated to follow the cooperative principles as laid down in the Act and the Rules framed thereunder. 30. The State had framed rules in exercise of its power conferred upon it under Section 180 of the 1983 Act in the year 1988. Rule 149 of the 1988 Rules provides for a complete code as regard the mode and manner in which appointments were required to be made and the process of appointments is required to be carried out. In terms of the said Rule, requirements to possess educational qualification and other qualifications had been laid down. One of the essential qualifications laid down for holding certain posts is 'undergoing cooperative training and previous experience'. 31. At this juncture, we may notice some of the provisions contained in Rule 149 of the 1988 Rule....
X X X X Extracts X X X X
X X X X Extracts X X X X
....said rules. 37. The 1983 Act was furthermore amended in the year 1995 providing for cadre strength which is directly relatable to the income of the cooperative societies. 38. Provisions of the Act and the Rules framed thereunder reflect the legislative recruitment policy. The said provisions are, thus, mandatory in nature. 39. Regularisation, in our considered opinion, is not and cannot be the mode of recruitment by any "State" within the meaning of Article 12 of the Constitution of India or any body or authority governed by a Statutory Act or the Rules framed thereunder. It is also now well-settled that an appointment made in violation of the mandatory provisions of the Statute and in particular ignoring the minimum educational qualification and other essential qualification would be wholly illegal. Such illegality cannot be cured by taking recourse to regularisation. (See State of H.P. Vs. Suresh Kumar Verma and Another, (1996) 7 SCC 562). 40. It is equally well-settled that those who come by backdoor should go through that door. (See State of U.P. and Others Vs. U.P. State Law Officers Association & Others, (1994) 2 SCC 204) 41. Regularisation furthermore cannot g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an and others Vs. State of Karnataka and others [AIR 1994 SC 55] and V. Sreenivasa Reddy and others Vs. Govt. of Andhra Pradesh and others [AIR 1995 SC 586]. 47. The said decisions have been recently noticed by a Division Bench of this Court in Sultan Sadik Vs. Sanjay Raj Subba and Others [(2004) 2 SCC 377]. 48. In State of M.P. and Another Vs. Dharam Bir [(1998) 6 SCC 165], it was observed that the government services are essentially a matter of status rather a contract and in that context it was observed: "26. Whether a person holds a particular post in a substantive capacity or is only temporary or ad hoc is a question which directly relates to his status. It all depends upon the terms of appointment. It is not open to any government employee to claim automatic alteration of status unless that result is specifically envisaged by some provision in the statutory rules. Unless, therefore, there is a provision in the statutory rules for alteration of status in a particular situation, it is not open to any government employee to claim a status different than that which was conferred upon him at the initial or any subsequent stage of service. 27. Applying these....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een requiring strict conformity with the Recruitment Rules for both direct recruits and promotees. The view is that there can be no relaxation of the basic or fundamental rules of recruitment." 53. It was further observed: "29. Similarly, in State of Orissa v. Sukanti Mohapatra ((1993) 2 SCC 486 : 1993 SCC (L&S) 607 : (1993) 24 ATC 259) it was held that though the power of relaxation stated in the rule was in regard to "any of the provisions of the rules", this did not permit relaxation of the rule of direct recruitment without consulting the Commission and the entire ad hoc service of a direct recruit could not be treated as regular service. Similarly, in M. A. Haque (Dr.) v. Union of India ((1993) 2 SCC 213 : 1993 SCC (L&S) 412 : (1993) 24 ATC117) it was held that for direct recruitment, the rules relating to recruitment through the Public Service Commission could not be relaxed. In J&K Public Service Commission v. Dr. Narinder Mohan ((1994) 2 SCC 630 : 1994 SCC (L&S) 723 : (1994) 27 ATC 56) it was held that the provisions of the J&K Medical Recruitment Rules could not be relaxed for direct recruitment. The backdoor direct recruitments, could not be permitted. (See al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt establishment. The Court would adopt pragmatic approach in giving directions. The directions would amount to creating of posts and continuing them despite non availability of the work. We are of the considered view that the directions issued by the High Court are absolutely illegal warranting our interference. The order of the High Court is therefore, set side." 59. A Division Bench of this Court in Surendra Kumar Sharma Vs. Vikas Adhikari and Another [(2003) 5 SCC 12] upon noticing the decision of this Court in Delhi Development Horticulture Employees' Union (supra) observed: " A good deal of illegal employment market has developed, resulting in a new source of corruption and frustration of those who are waiting at the Employment Exchanges for years. Not all those who gain such back-door entry in the employment are in need of the particular jobs. Though already employed elsewhere, they join the jobs for better and secured prospects. That is why most of the cases which come to the courts are of employment in government departments, public undertakings or agencies. Ultimately it is the people who bear the heavy burden of the surplus labour. The other equally injur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounds to grant the relief of regularization. There is nothing on record to show that the employees concerned were appointed after following due procedure for selection. Apparently, they were picked and chosen by the university authorities to cater to the exigencies of work in the Nodal Centre." 63. In Jacob M. Puthuparambil (supra) whereupon Mr. Balakrishnan placed strong reliance, a 3-Judge Bench of this Court noticed that by reason of the statutory rules, regularization was sought to be made of such employees who were appointed under posts required to be filled if (i) it is necessary in public interest and (ii) where an emergency has arisen to fill any particular post which has fallen vacant, immediately. Therein it was further noticed that Clause (e) of Rule 9 provided for regularization of service of any person appointed under clause (i) of sub-rule (a) if he had completed continuous service of two years on December 22, 1973, notwithstanding anything contained in the rules. 64. Jacob M. Puthuparambil (supra) has been distinguished by this Court in several decisions including 3-Judge Bench of this Court in Director, Institute of Management Development, U.P. Vs. Pushpa Sriv....