IN THE HIGH COURT OF KERALA

 A.K. Basheer and P.Q. Barkath Ali, JJ.

W.P. (C) Nos. 31497 of 2008 and 31813 of 2009

Decided On: 24.01.2011

P.S. Karthikeyan

Vs.

The Registrar of Co-operative Societies and others

Head Note:-

Kerala Co-operative Societies Rules, 1969 - Rules 185, 185(2), 185(3), 185(4), 185(5), 185(8) and 186 - Power of Relaxation - Petitioners do not have a case that the beneficiaries of the resolutions had been involved in any disciplinary proceedings or that their character or conduct are not good - All of them have rendered creditable service to the Bank in the past, The Bank found that their future service in the capacity of Manager would be beneficial to the Bank - The only disqualification, if it can be termed so, going by the feeder category regulations is that they do not possess a degree; but their employers seem to be satisfied that their rich experience will recompense the above deficiency - The Registrar in turn had adverted to all the relevant aspects of the issue and found that the request made by the Bank was in conformity with the relevant rules.

Kerala Co-operative Societies Rules, 1969 - Rules 185, 185(2), 185(3), 185(4), 185(5), 185(8) and 186 - Power of Relaxation - There is a duty on the Committee of the Society to ensure that the request for relaxation is not made in a casual manner. The resolution to be passed by the Committee should indicate clearly the reasons justifying exemption and a history of service of the incumbent with details of punishment awarded and the results of the performance appraisal. The Registrar has to necessarily apply his mind to the entire aspects of the matter before taking a decision.

Held:- Obviously the Registrar will have to get the records verified before passing orders on the request made by the Society. Before we part, we would like to remind the authorities concerned to ensure that the power of relaxation vested in the Society as well as the Registrar is not allowed to be misused. Power of relaxation must be exercised only in exceptional cases, and such exercise must be with utmost care, circumspection and caution. The paramount concern must be the welfare of the Society and not the individual employee who might benefit from the order of relaxation. The principles of equity and good conscience must always remind and alert the authorities concerned to keep themselves within bounds of the statute.

Chronological List of Cases Cited:

1. Sreedharan Pillai Vs. State of Kerala, 1973 KLT 151
2. M. Venkateswarlu Vs. Govt. of A.P., (1996) 5 SCC 167
3. Govt. of A.P. Vs. D. Janardhana Rao, (1976) 4 SCC 226
4. State of Orissa Vs. Sukanti Mohapatra, (1993) 2 SCC 486
5. Santhosh Kumar Vs. State of A.P., (2003) 5 SCC 511

For Petitioner: N. Nandakumara Menon, Sr. Adv., V.G. Arun and T.R. Harikumar, Advs.

For Respondents: George Poonthottam, K.G. Radhakrishnan, Joice George, John Joseph Vettikad, C. Joseph Johny, Advs. and Anu Sivaraman, Special Government Pleader

J U D G M E N T

A.K. Basheer, J.

1. Since a common issue arises for consideration in these two writ petitions, they are being disposed of by this common judgment. In fact, these two petitions have been referred to the Division Bench by a learned single Judge by order dated April 5, 2010 since the learned Judge was of the view that it would be appropriate if a Division Bench considered the issue.

2. The issue relates to the sweep and amplitude of the power that can be exercised by a Co-operative Society and the Registrar of Societies under Rule 185(8) of the Kerala Co-operative Societies Rules, 1969 (for short, the Rules) to relax the educational qualification of an employee for the purpose of promotion to a higher post.

3. Petitioners are working as Senior Accountants in different branches of the Trivandrum District Co-operative Bank. They are graduates and diploma holders in co-operation and according to them, they are eligible to be promoted to the post of Branch Manager. But their employer viz., the Trivandrum District Co-operative Bank took a decision to promote three of their seniors (Respondents 3 and 4 in W.P. No. 31813/2009 and Respondent No. 4 in W.P. No. 31497/2008) to the post of Branch Manager even though they did not possess the basic qualification of a degree from a recognised University as stipulated in Rule 186 of the Rules.

The Managing Committee of the Bank passed the necessary resolutions requesting for approval of the Registrar for relaxation of the qualification of these Respondents for the purpose of promotion, who in turn obliged the Managing Committee in a mechanical manner and without any application of mind. Petitioners allege that the whole exercise of making request for relaxation and grant of approval is in flagrant violation of the letter and spirit of Rule 185(8) of the Rules.

4. The common prayer in these two petitions is to issue a writ in the nature of certiorari to quash the orders passed by the Registrar acceding to the request made by the Bank to grant relaxation/exemption. They further pray for a declaration that the Bank is not "entitled to seek exemption for unqualified hands in a routine manner without there being any special reason justifying such exemption".

5. It may at once be noticed that the beneficiaries of the decision taken by the employer--Bank are admittedly non graduates, whereas the Petitioners are graduates. All of them are working in the cadre of Senior Accountant. It is beyond controversy that the beneficiaries are seniors to the Petitioners. In fact all of them are placed very high in the seniority list as compared to the Petitioners.

6. Rule 186 of the Rules which deals with qualifications of the candidates seeking appointment to various posts in a Co-operative Society postulates that no person shall be eligible for appointment in any post, unless he possesses the qualifications prescribed for the post as stipulated in the said rules. The relevant entries or clauses which are necessary for our purpose are extracted hereunder:

7. It is contended by the Petitioners that ineligible and unqualified persons are being given promotion to higher managerial posts ignoring the statutory mandate of minimum requisite qualification of graduation as provided under Rule 186 of the Rules extracted above. Petitioners allege that the Registrar has committed serious dereliction of duty by accepting the proposals forwarded by the Bank as a matter of course and in a mechanical and routine manner. In that process, large number of qualified candidates in the feeder category like the Petitioners who have been waiting for their turn for promotion are being denied their legitimate right. It is further contended by them that the rights vested in a Society to seek relaxation and the power that can be exercised by the Registrar to grant such relaxation or exemption, will have to be exercised with great circumspection, caution and discretion and that too only in deserving and exceptional cases. But what has been done in these two cases is ridiculing the wisdom of the rule making authority and rendering the rule nugatory. If the power vested in the two authorities is allowed to be exercised in such a whimsical manner, the whole concept of rule of law and fair play will remain dead letters.

8. Rule 185 which deals with promotion postulates that appointments to the categories or posts in a Society other than those mentioned in Sub-rules 2, 3 and 4 shall be made by promotion on the basis of seniority in the feeder category. It is further mandated that feeder categories shall be specified by the Society by framing suitable regulations with the approval of the Registrar. For the purpose of our case, we need only look at Sub-rule (8) of Rule 185 which, for the sake of convenience, is extracted hereunder:

“185(8). It shall be competent for the Registrar of Co-operative Societies to relax the qualification, other than basic qualification and pass in the competitive examination specified in Sub-rule (5), of an employee, for the purpose of promotion in deserving cases, on the request of a society by passing a resolution subject to the following conditions:

(a) Minimum educational qualification for ministerial and supervisory posts other than those requiring technical qualification shall be SSLC. Exemption from passing SSLC shall not be granted under any circumstances provided that in the case of employees who were appointed direct to the ministerial posts before 1-1-1974 SSLC need not be insisted.

(b) Where the academic qualification prescribed is graduation and above, exemption from acquiring the said qualification may, be considered if the incumbent satisfied the following conditions, namely:

(i) should have passed JDC or equivalent;

(ii) should have a minimum service of five years in the feeder category; and

(iii) should not be less than forty-five years of age.

(c) Employees of the Sub-staff category shall not be exempted in any case from Co-operative training qualification for promotion to the clerical category.

(d) The resolution of the Board of Directors of the society should indicate clearly the reasons justifying exemption and a history of service of the incumbent with details of punishment awarded and results of the performance appraisal.

(e) The incumbent should not have been punished by imposing any of the following penalties within a period of five years prior to the date of resolution:

(i) Withholding of increments with cumulative effects;

(ii) Withholding of promotion.

(iii) Recovery from the pay of the whole or part of any pecuniary loss caused to the society, by negligence or breach of orders or otherwise.

(iv) Reduction to a lower rank.

(f) The Board of Directors shall verify and satisfy themselves about the competency of the incumbent to the post to which he is promoted.

(g) Exemption from qualifications other than Co-operative Training qualification should be obtained at the time of each promotion to each cadre which means ministerial cadre, supervisory cadre and chief executive.”

The power to relax educational qualification was introduced in 1988 in Rule 185(2) of the Rules. In 1999 the above rule was re-numbered as Rule 185(4). Later in 2005 Sub-rule (8) was further amended. Till this last amendment the above rule read thus:

“185 (4): It shall be competent for the Committee of a Society to relax the qualifications, other than pass in the competitive examination specified in Sub-rule (5) of an employee for the purpose of promotion in deserving cases with the prior approval of the Registrar and for reasons to be recorded.”

9. It can be seen that prior to the last amendment, the Committee of a Society could relax the qualification in a deserving case, of course, with the prior approval of the Registrar. But going by the provisions contained in the above Sub-rule, as it now stands, the role of the Registrar has become a little more prominent If a request is made by the Committee of a Society to relax the educational qualification of any one of its employees by passing a resolution in this regard, the Registrar shall be competent to relax the qualification. Thus there is an apparent subtle shift in the power of both the Society and the Registrar, though in the ultimate analysis there may not be a significant paradigm shift in the power of the Registrar.

10. It may at once be noticed that Sub-clauses (d), (e) and (f) cast a duty on the Committee of the Society to ensure that the request for relaxation is not made in a casual manner. The Committee shall verify and satisfy itself "about the competency of the incumbent to the post to which he is promoted". More importantly, Clause (d) stipulates that the resolution to be passed by the Committee should indicate clearly the reasons justifying exemption and a history of service of the incumbent with details of punishment awarded and the results of the performance appraisal. The Registrar has to necessarily apply his mind to the entire aspects of the matter before taking a decision. Obviously the Registrar will have to get the records verified before passing orders on the request made by the Society.

11. Our attention has been invited to a few decisions which, according to the learned Counsel, will have a bearing on the issue involved in these cases.

12. In Sreedharan Pillai Vs. State of Kerala, 1973 KLT 151 a Full Bench of this Court had occasion to consider the validity, scope and application of Rule 39 of the Kerala State and Subordinate Services Rules, 1958. The above rule empowers the Government "to deal with cases of any person or persons serving in a civil capacity under the Government of Kerala or any candidate for appointment to a service in such manner as may appear to the Govt. to be just and equitable". The case of the Petitioners before the Full Bench was that Rule 39 does not confer any general exemption or en masse relaxation of the provisions of the general or special rules in favour of a class or group of persons. What is warranted is only a special treatment being given to any specific case or cases, where after due application of the mind of the competent authority, a just and equitable decision is arrived at. The other contention was that Rule 39 does not empower an order being passed in direct contravention of any substantive provision contained either in the general or special rules. It was urged that the rule merely permits a relaxation of the rigour of such provision, in so far as it pertains to procedural or exceptional matters in respect of which no vested right can be postulated as having accrued to any of the other officers in the service.

13. After an elaborate consideration of the entire gamut of the issue, the Full Bench held that "it is not ordinarily open to the State Government under Rule 39 even after its amendment, to exercise the power under the Rule in direct contravention of a mandatory provision in the existing rules and that the only exception to the said principle is that in rare and exceptional cases where the circumstances are such that a reasonable classification of the particular case or cases is validly possible for the purpose of Articles 14 and 16, a relaxation of the rigour of any Rule or even an exemption from its provision may be granted". It was further held that a general order granting an exemption in favour of a larger or undefined group of persons is not warranted under Rule 39. Their Lordships laid down that the actual exercise of the power must be preceded by a careful application of the mind of the authority to all the relevant facts and circumstances. It was further emphasised that the power of relaxation has to be sparingly exercised and it must be restricted in cases of a very exceptional nature.

14. In M. Venkateswarlu Vs. Govt. of A.P., (1996) 5 SCC 167 the power of relaxation under Rule 47 of the Andhra Pradesh State and Subordinate Service Rules which is akin to Rule 39 of the Kerala Rules, had come up for consideration. In this case, their Lordships had also considered the question whether it was necessary to issue notice to all the persons who were likely to be affected if relaxation was granted to a particular employee. While noticing the dictum laid down in Govt. of A.P. Vs. D. Janardhana Rao, (1976) 4 SCC 226 the Court held that the rule does not ex facie contemplate any notice being given.

15. In State of Orissa Vs. Sukanti Mohapatra, (1993) 2 SCC 486 the Apex Court noticed that recruitments which had been made years back in total disregard of the Rules were sought to be regularised in exercise of the powers vested under Rule 14 of the relevant rules. The Court held that the power of relaxation cannot be misused to legitimise illegal appointments.

16. In Santhosh Kumar Vs. State of A.P., (2003) 5 SCC 511 also the Apex Court had found that Rule 47 of the Andhra Pradesh State & Subordinate Service Rules had been invoked by the Government "for good reasons".

17. The above decisions have laid down in general terms that the power of relaxation has to be used to ensure justice and equity without nullifying the operation and effectiveness of the Rules in the guise of relaxing their rigour.

18. Petitioners have not challenged Rule 185(8) in the writ petitions. They do not have a case that the Society is not empowered to grant relaxation; nor do they contend for the position that the Registrar is not competent to exercise his power envisaged under the above sub-rule. The primary concern of the Petitioners is that their chances of promotion would be adversely affected if the beneficiaries of the resolution are promoted. They have raised a further contention that by promoting unqualified/under qualified persons to managerial posts, the quality of service to the public will be affected.

19. We have carefully perused the resolutions passed by the Managing Committee of the Bank and also the orders passed by the Registrar giving nod of approval for relaxation. Even though it would have been desirable if the resolutions were a little more explicit and in tune with the specifications contained in Sub-rule (8) of Rule 185, we are satisfied that the resolutions clearly spell out the reasons justifying exemption.

20. As has been mentioned earlier, Petitioners do not have a case that the beneficiaries of the resolutions had been involved in any disciplinary proceedings or that their character or conduct are not good. All of them have rendered creditable service to the Bank in the past, The Bank found that their future service in the capacity of Manager would be beneficial to the Bank. The only disqualification, if it can be termed so, going by the feeder category regulations is that they do not possess a degree; but their employers seem to be satisfied that their rich experience will recompense the above deficiency. The Registrar in turn had adverted to all the relevant aspects of the issue and found that the request made by the Bank was in conformity with the relevant rules. Therefore we do not find any reason to interfere with the orders passed by the Registrar.

21. Before we part, we would like to remind the authorities concerned to ensure that the power of relaxation vested in the Society as well as the Registrar is not allowed to be misused. Power of relaxation must be exercised only in exceptional cases, and such exercise must be with utmost care, circumspection and caution. The paramount concern must be the welfare of the Society and not the individual employee who might benefit from the order of relaxation. The principles of equity and good conscience must always remind and alert the authorities concerned to keep themselves within bounds of the statute.

22. For the foregoing reasons we do not find any reason to interfere with the orders passed by the Registrar.

Writ Petitions fail and they are accordingly dismissed.