Andhra HC (Pre-Telangana)
A.P. State Co-Operative Societies, ... vs Government Of Andhra Pradesh And Ors. on 11 September, 2002
Equivalent citations: 2003(1)ALD197
ORDER T. Meena Kumari, J.
1. The present writ petition has been filed by A.P. State Co-operative Societies Secretaries and Employees Union represented by its General Secretary Sri P. Narasimha Reddy seeking a direction to the respondents not to apply in any manner the provisions of the Andhra Pradesh Co-operative Societies Second Amendment Act, 2001 (Act 22 of 2001) (for short 'Amended Act') to the actions already taken prior to the Amended Act and completed by 25.4.2001 as the Amended Act has no retrospective effect and not to take any coercive steps by way of recoveries or re-fixation of salaries and pass such other orders. From the above prayer, the main direction the petitioner Union seeks is that the respondents be directed not to make any recoveries from the members of its union either regarding salaries or arrears of payments.
2. The brief facts of the case are as follows:
3. The petitioner unit was established in the year 1977 with registration No. B-780. The union contained 5000 members who are working as Secretaries in different PACSs in the State, The main motive of the petitioner union is to safeguard its members. It is a registered and affiliated and recognised by the authorities and it is functioning since last 20 years.
4. According to the averments stated in the affidavit, the Paid Secretaries are appointed under Half a Million Job Scheme and governed by the statutory regulations made under Section 116-A of the A.P. Co-operative Societies Act and it is stated that they are statutory employees. In pursuance of the introduction of Section 116AA, the Paid Secretaries were decategorised. It is also stated that they are governed by the same statutory regulations pending allotment. In view of the protests by the Paid Secretaries for several months, the Government of Andhra Pradesh entered into agreement with the petitioner's Union on 14.10.1991. According to the said agreement, the then Chief Minister of the Government of Andhra Pradesh agreed to draw the Paid Secretaries Pay Structure on par with Category-V of Co-operative Banks.
5. The other factors relevant to the present writ petition are that when the department tried to breach the agreement, several writ petitions have been filed, one such writ petition is WP No. 16558 of 1992 and the same was disposed of on 30.8.1996 by Sri Justice Y. Bhaskar Rao and Sri Justice P. Rama Krishnam Raju. Pursuant to the said directions in the said judgment, a Cabinet Committee was appointed directing the respondents to consider the demands. According to the petitioner, the said Cabinet Committee have made recommendations on 10.10.2000. According to the petitioner, the members of the union were directed to be paid the pay-scales till the Government took a decision. According to the petitioner, instead of implementing the recommendations of the said Cabinet Sub-Committee report, the Government have issued G.O. Ms. No. 314 dated 26.12.2000 cancelling unilaterally the Memo dated 14.10.1991. The said action of the Government in cancelling the memo dated 14.10.1991 by way of G.O. Ms. No. 314 dated 26.12.2000 has been questioned by filing WP No. 2I488 of 2000 and batch. (WA Nos.424 and 425 of 2001, 21488 of 2000; 18057 of 1999, 8423 and 18968 of 2000, 656, 896, 998, 3563, 3873, 4082, 4089, 4139, 4140 and 5739 of 2001 and 22447 of 1998).
6. When an attempt was made to revise the pay-scales, WP No. 28473 of 1997 was filed and this Court by an order dated 31.10.1997 directed not to revise the salaries and the same order is still in force. This Court in WP No. 15506 of 1989 dated 10.10.1991 directed that the pay-scales of the Paid Secretaries shall not be less than Category V of the Co-operative Banks and the said judgment has become final. The main contention of the petitioner is that the Advocate-General has also given his recommendations to the cabinet subcommittee. However, a second Cabinet Committee was formed by the Government which has negatived the decision to implement the pay-scales. Accordingly, G.O. Ms. No. 314 dated 26.12.2000 was issued. According to the writ petitioner, WP No. 22447 of 1998 along with WPMP No. 26970 of 1998 has been filed to implement the interim orders passed by this Court and this Court on 11.8.1998 in WPMP No. 26970 of 1998 has directed to implement the memo which was issued by virtue of the agreement dated 14.10.1991. The Commissioner for Co-operation and Registrar of Co-operative Societies, A.P., Hyderabad issued Memo in Rc. No. 62738/89/PACS/ CC2(3) dated 30.10.1991 communicating the Govt. Memo No. 5661/Co-op.III(2)/91 F&A Department dated 14.10.1991 to the Managing Director, A.P. State Co-operative Bank and all the District Co-operative Officers/District Co-operative Audit Officers in the State for further necessary action. In the meanwhile, the Government has enacted A.P. Act 22 of 2001 by amending 116-C which has come into force from 25.4.2001 and the said amendment was questioned in WP No. 28473 of 1997 and a Division Bench of this Court, consisting of Sri Justice B. Sudershan Reddy and Sri Justice V. Eswaraiah has upheld the said Act 22 of 2001 in its judgment dated 12.7.2002.
7. In pursuance of the cancellation of the agreement and by virtue of G.O. Ms. No. 314 dated 26.12.2000, number of writ petitions have been filed and at the stage of admission, interim orders were granted. Against the interim orders, WA Nos.424 and 425 of 2001 were filed and the same were heard along with batch of writ petitions by a Division Bench of this Court, consisting of the then Chief Justice Sri S.B. Sinha and Sri Justice V.V.S. Rao and it was held that the said agreement was void and inoperative so far as the Co-operative Society is concerned. According to the petitioners, against the said judgment, they preferred SLP (Civil) No. 250-251 of 2002 before the Supreme Court and the same was dismissed at the admission stage.
8. The Registrar of Co-operative Societies by his letter in Rc. No. 9078/2000-K2 dated 2.1.2002 has directed to the District Co-operative Officer, Kakinada to fix pay-scales and allowances under Section 116-C subject to the prior approval of the Registrar of the Co-operative Societies. While issuing the letter, the Registrar has made a mention to take appropriate action keeping in view the judgment of this Court in WA No. 424 of 2001 and batch against the members of the petitioner Union by the end of January, 2002. According to the petitioner, the said letter has been communicated to all the District Co-operative Officers in the State to take appropriate action keeping in view the above judgment and report compliance by the end of January, 2002.
9. Pursuant to the said letter, the District Co-operative Officer, Chittoor has addressed a letter to the Divisional Co-operative Officer, Madanapalle dated 11.2.2002 directing the said officer to process the proposals keeping in mind the provisions of Section 116-C of the A.P. Co-operative Societies Act, 1994 and also to provide information as contained in Rule 28(3) of the Rules. According to the petitioner, the respondents have acted upon to reduce the pay-scales from the members of its Union which is evident from the letter of one Society i.e., The Unduru Primary Agricultural Co-operative Credit Society Ltd., Unduru dated 28.3.2002. According to the petitioner, the pay-scale of the Secretary which is Rs. 10,032,00 has been revised to Rs. 4,070/-and resolved to request the Registrar of Co-operative Societies, A.P. to approve the same. According to the petitioner, the Deputy Registrar of Co-operative Societies, Narasaraopet, Guntur District has issued notice under Section 60 of the APCS Act, 1964 (for short 'APCS Act') in proceedings in Rc. No. 5/2002-A dated 28.6.2002 basing on the final audit report for the year 2000-01 stating that there are financial irregularities and fraud of the Secretary of Vellaturu PACS, Sri B. Venkateswarlu that he has drawn Rs. 1,47,1567- towards difference of salary and as DA arrears Rs. 2.47,348.46, totalling Rs. 3,94,504.46 paise and similar proceedings were issued in respect of Kondramutla PACS for Rs. 2,49,729/- in respect of its Secretary TSR Anjaneyulu i.e,, Rs. 1,17,525/- towards arrears and enhanced salary and Rs. 1,32,204/- towards V cadre arrears. In those letters, it was directed to recover the same with 24% interest from the date of occurrence till the date of realisation. According to the petitioner, the same would follow to all the Paid Secretaries who are the members of the petitioner Union in view of the letter of the Government of Andhra Pradesh, Agriculture and Cooperation (Co-op.IV) Department in Memo No. 80307Co-op.IV(1)72002-03 dated 5.7.2002.
10. The contention of the petitioner is that the respondents are not entitled to recover the salaries or arrears of salaries terming the same as nature of fraud invoking the provisions of Section 60 of the APCS Act that the respondents have no power to recover the same from the members of the petitioner Union and that they have no power whatsoever to apply the provisions of Act 22 of 2001 prior to the Amending Act, which came into force from 25.4.2001 as the Act has no retrospective effect and the respondents have no power to take coercive steps by way of recovery and fixation of salaries prior to 25.4.2001.
11. The second respondent as well as 8th respondent filed their counters.
12. In the counter of the second respondent, it has been stated that a Division Bench of this Court in WP No. 28473 of 1997 dated 12.7.2002 has upheld the validity of Section 1I6-AA and also Section 116-C of the A.P. Co-operative Societies Act. Section 116(A) was amended and new Section 116-AA was inserted by way of Act 21 of 1985 which came into force with effect from 13.9.1985 abolishing common cadre and providing for allotment of Paid Secretaries to the Societies under Rule 72 of the Co-operative Societies Rules, 1964. The Association of Paid Secretaries filed WP Nos.15506 and 17735 of 1989 and the same were disposed of directing the Government to expedite consideration of enhancement of scales of pay payable to the Paid Secretaries. Later, the Government issued memo dated 14.10.1991 revising the scales of Paid Secretaries on par with Supervisors Cadre V of District Co-operative Central Bank and the same was cancelled by G.O. Ms. No. 314, Agriculture and Cooperation Department dated 26.12.2000. It is stated in the counter that the said GO was issued in pursuance of the judgment of this Court in WP No. 16558 of 1992 and batch dated 30.8.1996. It is stated that the decaderisation of Paid Secretaries was effected on the insertion of Section 116-AA into the Act and in many districts, the allotment of Paid Secretaries to PACS was completed. It is stated that this Court has upheld Section 116-AA and the contention of the Paid Secretaries stating that they are still governed by the provisions of Section 116-A is no longer valid. It is also stated that G.O. Ms. No. 314 dated 26.12.2000 has been upheld by a Division Bench of this Court. The said GO seeks to give effect to the provisions of 116-C of the A.P. Co-operative Societies Act. Thus, there is no illegality or irregularity in ordering the recovery of salaries that were drawn excessively and contrary to rules.
13. The 8th respondent filed counter stating that the Paid Secretaries are making unjust remuneration at the cost of the Societies in which they are working and the Societies are entitled to recover from the Paid Secretaries the amount exclusively drawn by them towards wages/salaries. It is stated that the writ petition filed by the petitioner-Union is not maintainable as the cause of action, if any, is for the individual Paid Secretaries against the PACS in which he/she is working and has drawn the excess amount. It is stated that the recoveries are being made after issuing notices to the Paid Secretaries and that the action is being initiated pursuant to the Amended Act 22 of 2001.
14. Written arguments were also filed by both the learned Counsel for the petitioner as well as the A.P. State Co-operative Bank.
15. According to the learned senior Counsel for the petitioner-Union Sri S. Ramachandra Rao, it is submitted that an agreement has been entered into between the Union of Paid Secretaries and also the Government of Andhra Pradesh in Memo No. 5661/Co-op.III/2/91-1 dated 14-10-1991 to revise the pay-scales of Paid Secretaries so as to bring them on par with the Supervisor-V Cadre of the District Co-operative Central Banks. The said agreement was entered into in consultation with the Finance and Planning Department of the Government of Andhra Pradesh. The said memo dated 14.10.1991 was communicated by the Commissioner and Registrar of Co-operative Societies, Hyderabad to the Managing Director of A.P. State Co-operative Bank, Hyderabad and all the District Co-operative Officers/District Co-operative Audit Officers in the State for further necessary action. The learned Counsel for the petitioner has further argued that basing on the said memo, the members of the petitioner's union were paid salaries. When there was deviation from the said memo, the petitioner's union have filed WP No. 15506 of 1989 and a learned single Judge of this Court has directed the respondents therein to extend the pay scales on par with Category V. The learned Counsel has argued that the said judgment has become final. The petitioner Union also filed WP No. 17735 of 1989 challenging the validity of Section 116AA of the Co-operative Societies Act and also seeking other service benefits that are extended to the Secretaries who are appointed under the scheme of Half a Million Jobs. The said writ petition has conic up for consideration before a Division Bench consisting of Justice V. Sivaraman Nair and Sri Justice M.N. Rao and the said Division Bench by its judgment dated 18.7.1991 has directed the State Government to expedite the consideration of the enhancement of pay-scales of the Paid Secretaries of Primary Agricultural Co-operative Credit Societies and take a final decision on the basis of the proposals which are under consideration. The learned senior Counsel has further argued that the said Division Bench has directed the State Government to devise the necessary machinery to ensure that the revised scales of pay shall be disbursed to the persons insisted.
16. It is also further argued by the learned senior Counsel that in WPMP No. 20859 of 1992 in WP No. 16443 of 1992, a learned Judge of this Court Sri Justice Eswara Prasad (as he then was) has directed to maintain status quo as on the date of the said order in regard to the revised pay-scales and emoluments as per Memo No. 5661/Co-op.III/2/91-l dated 14.10.1991 and also ordered not to make any recoveries in pursuance of Commissioner's Memo in Rc. No. 62738/89/PACS/Cr.2(B) dated 23.11.1992. The learned senior Counsel for the petitioner also argued that questioning the Memo in Rc. No. 627387 89 PACS/Cr.2(B) dated 14.2.1992 a batch of cases in WP No. 16558 of 1992 and batch has been filed and a Division Bench of this Court, consisting of Sri Justice Y. Bhaskar Rao and Sri Justice P. Ramakrishnam Raju by order dated 30.8.1996 directed the Government represented by the Secretary, Agriculture and Co-operation to constitute a Committee to consider the pay-scales of the petitioners and allotment of the petitioners to the Societies after taking into consideration the views of the representatives of the A.P. State Co-operative Bank, District Co-operative Central Banks, Primary Agricultural Co-operative Societies and Petitioner's Union and take a decision in accordance with the provisions of the A.P. Co-operative Societies Act and the Rules made thereunder within a period of six months from the date of receipt of the said order. The Bench also observed that until the Government takes a decision, the interim orders granted by this Court in those cases will continue. The learned Counsel has further argued that G.O. Ms. No. 314 dated 26.12.2000 was issued by the Government in pursuance of the directions of the above judgment.
17. The learned senior Counsel has also submitted that the Cabinet Sub-Committee was formed by the Government to go into the question of payment of pay-scales. The then learned Advocate General has opined that the petitioner Union is entitled to the scales on par with Category V employees of District Co-operative Banks.
18. The learned senior Counsel has submitted that the Government has passed G.O. Ms. No. 314 dated 26.12.2000 in exercise of the powers conferred by Section 131 of the A.P. Co-operative Societies Act, 1964 and the Government of Andhra Pradesh has directed the Registrar of Co-operative Societies to take action in the matters relating to the staffing pattern, qualifications, pay-scales and other allowances for employees of the Societies in accordance with the provisions under Section 116 C of the A.P.Co-operative Societies Act, 1964. It is also contended that by virtue of the said GO, the Government has cancelled the Memo dated 14.10.1991, The learned senior Counsel has further argued that the said G.O has come up for consideration before this Court and a Division Bench of this Court in WA No. 424 of 2001 and batch dated 16.10.2001 has held that the agreement dated 14.10.1991 is void and inoperative to the extent of Co-operative Societies. It is also submitted that against the said judgment, SLP was preferred and the same was dismissed at the admission stage. It is submitted that even assuming that the said GO is held to be valid, alter the Division Bench judgment in WA No. 424 of 2001 dated 16.10.2001, the Registrar of Co-operative Societies, A.P., Hyderabad issued a letter in Rc. No. 9078/2000-K2 dated 2.1.2002 to the District Co-operative Officer, Kakinada to take appropriate action keeping in view the above judgment and report compliance by January, 2002 and the said copy has been marked to all the District Co-operative Officers in the State to take appropriate action and the District Co-operative Officer has directed the Divisional Co-operative Officer, Madanapalle on 11.2.2002 to fix up the pay-scales. The learned senior Counsel has further argued that according to the above Division Bench judgment, the petitioner-union is entitled to a notice before effecting recoveries. The learned senior Counsel has also argued that the Society has fixed the pay scales under the Amended Section 116-C in pursuance of the judgment of a Division Bench in WA Nos.424 and 425 of 2001 dated 16.10.2001. The learned senior Counsel has also argued that amendment to Section 116-C was effected on 25.4.2001 and the position with reference to the Paid Secretaries existing prior to 25.4.2001 cannot be altered as the Act itself is prospective in nature and it is not retrospective in nature and the same position cannot be altered as per the amended Section 116-C and re-fix the pay-scales of the Paid Secretaries. The learned Counsel has further argued that the members of the petitioner Union cannot be subjected to Section 60 proceedings under the guise of the recovery of the salaries basing on the Audit Officers report as the members of the petitioner's union have never played fraud upon the Societies and hence the same cannot be termed as surcharge since the members of the petitioner's Union have drawn the salaries under the valid orders. The learned Counsel has further argued that a Division Bench of this Court in WP No. 16558 of 1992 and batch (Justice Y. Bhaskar Rao and Sri Justice P. Ramakrishnam Raju) by its judgment dated 30.8.1996 has directed to continue to pay the salaries till the Government has taken a decision after obtaining the views of the representatives of A.P. State Co-op. Bank, District Co-operative Central Banks, Primary Agricultural Co-operative Societies and petitioner's Unions and the interim orders granted by this Court in these cases will continue and thus, the interim orders passed in WP No. 16558 of 1992 and batch has become final and no appeal was preferred either by the State Government or anybody. The position prior to the amended Act 22 of 2001, which came into force from 25.4,2001 cannot be altered by the respondents under the guise of re-fixing the pay-scales.
19. The learned senior Counsel has further argued that the State Government has no power whatsoever to re-fix salaries under any of the provisions of the Act. As per the amended Section 116-C of the A.P. Co-operative Societies Act, a Society shall have power to fix the staffing pattern, qualifications, pay-scales and other allowances for its employees with the prior approval of the Registrar of Co-operative Societies subject to the condition that expenditure towards pay and allowances of the employees shall not exceed two per cent of the working capital or thirty per cent of the gross profit, in terms of actuals in a year whichever is less. The learned Counsel has further argued that the above provision has been upheld by a Division Bench of this Court in WP No. 28473 of 1997 by its judgment dated 12.7.2002.
20. The learned senior Counsel has further argued that while upholding Section 116-C of the A.P. Co-operative Societies Act, the Division Bench has observed that it is not necessary to go into the controversy as to whether the process of allotment of the Paid Secretaries into various societies after the abolition of common cadre has been completed or not. It is also further argued that the Bench observed that there is no basis whatsoever to contend that allotment of the Paid Secretaries to various Co-operative Societies would amount to retrenchment or removal per se and the de-caderisation had already been taken place under Section 116-A of the Act. It is also argued that the Paid Secretaries are the employees of the concerned Society and the Society with the prior approval of the Registrar is empowered and entitled to fix the staffing pattern, qualifications, pay-scales and other allowances for its employees subject to the condition that the expenditure towards pay and allowances of the employees shall not exceed two per cent of the working capital or 30 per cent of the gross profit, in terms of actuals in a year whichever is less. The learned Counsel has further argued that the observations of the Division Bench judgment is in conformity with Section 116-C which has come into force by Act 22 of 2001 with effect from 25.4.2001. The said judgment has become final.
21. The learned Counsel has relied upon the recent letter of the first respondent issued on 5.7.2002 addressing to the Commissioner for Co-operation and Registrar of Co-operative Societies and also to the Managing Director of APCOB in which it is stated that every society has to re-fix up its staffing pattern, frame service rules and get it approved by the Registrar within the fixed time as per Section 116-C of the APCS Act. It has also been contended by the learned Counsel that in the said letter it has been stated that the said exercise has not been done in the district and this is very important activity and must be done on top priority basis and there is no question of flouting of the rules on these issues and against those societies which do not comply with the rules, severe action will have to be taken for non-compliance with the law and the rule position. It is stated by the learned Counsel that a letter has been issued by the APCOB on 8.7.2002 in terms of Section 116-C(i) of the APCS Act to the General Managers of the District Co-op. Central Bank Limited and to the Chairman, District Co-operative Central Bank Limited stating that in case the provisions of Section 116-C(i) of the Act is not complied, they are advised to seek exemption from the provisions of the Act upto 30.6.2003 and also to bring down the expenditure for a period of three years within 30% of the gross profit and also to fill up the existing vacancies as per the sanctioned strength by promotion or in compliance with Section 116-C(i) of the APCS Act.
22. The learned Counsel has further argued that the Paid Secretaries are governed by the regulations framed under Section 116-A(i) of the A.P. Co-operative Societies Paid Secretaries (Common Cadre) Regulations. The learned Counsel has further argued that by virtue of the above regulations, Paid Secretary means any person appointed by the specific authority of the Appointment Committee to work as Secretary, Manager or by any other designation, carrying out the functions of Chief Executive in any of the Societies specified. The Chairman of the Appointment Committee shall have powers of appointment of the Paid Secretaries from the list of candidates. It is also argued that in view of the above regulations the contribution to the cadre fund shall be prescribed by the Government in G.O. Ms. No. 198 dated 28.3.1978. The said fund is intended to meet the cost of Paid Secretaries.
23. At this juncture, the learned senior Counsel has further argued that the Paid Secretaries are controlled by the Regulations framed under Section 116-A, and as per Sub-section (2) of Section 116-A, the Registrar has to frame regulations for classification, methods of recruitment, conditions of service, pay and allowances and discipline, conduct of the officers etc. under Section 116-AA which has come into force by Act 21 of 1985, the Registrar has power to allot employees included in the cadre to the Primary Agricultural Credit Societies as he deems fit. It is also further contended that proviso to said section has made it clear that until they are allotted, they shall continue in the posts in which they are working at the commencement of the said Act. The learned senior Counsel has argued that as per Rule 71 of the Rules, the service conditions of the common cadre employees shall be governed by the existing regulations till they are modified. The learned Counsel has further argued that this Rule 71 is in consonance with Sub-clause (2) of Section 116-A. Rule 72 controls the allotment and de-caderisation of the Secretaries to the Societies. The allotment has to be made by the Registrar. As per Sub-rule (5), the allotment of Secretaries is made as per the guidelines issued in Sub-rule (1) of Rule 71. The learned Counsel has further argued that it is not the case of the respondents that they have already allotted the Secretaries to all the Societies and it is an accepted principle that on such allotment, they would become the employees of the Co-operative Societies and in the absence of such plea, it has to be construed that the allotments have not been made and the petitioners are governed by the regulations framed under Section 116-A (i) of the A PCS Act. The learned Counsel has argued that the source can be drawn from Sub-clause (2) of Section 116-A of the APCS Act. A Division Bench in WP No. 28473 of 1997 dated 12.7.2002 has also held that the common cadre has been created for the Paid Secretaries and also Appointment Committees have been constituted. The learned Counsel has further argued that Sub-section (2) of Section 116A of the Act provides that the Registrar has to frame regulations. The learned Counsel has further argued that in the absence of any material before this Court that the allotment is over and the regulations have been framed, there cannot be any grievance that the Paid Secretaries were paid by the Societies or they have withdrawn the excess amounts. The learned Counsel has further argued that the observations made by the Division Bench finds the basis for the above proposition. As the Paid Secretaries have been paid out of common fond with the knowledge of the Societies and also with the knowledge of the Registrar, the Societies cannot have any grievance that the Paid Secretaries have misappropriated the funds and recovery should be effected. It is also further contended that the Division Bench of this Court in WP No. 16558 of 1992 and Batch dated 30.8.1996 has directed the respondents to effect payments till the Government takes a decision and the Government took a decision pursuant to the said judgment on 26.12.2000 by virtue of GO Ms. No. 314 i.e., after four years. The learned senior Counsel has further argued that a direction has been issued by the Government invoking the provisions under Section 131 of the Act directing the Registrar to effect pay-scales and other allowances as per Section 116-C and the said GO has cancelled the Memo dated 14.10.1991 which has been approved by this Court by its judgment dated 16.10.2001 in WA Nos.424 and 425 of 2001 and batch. The learned senior Counsel further submits that against the said judgment, an SLP has been filed before the Apex Court and the same has been dismissed and the judgment in SLP cannot be a binding precedent as the SLP was dismissed at the admission stage without going into the merits of the case.
24. The learned Counsel further states that the Government never stated in G.O. Ms. No. 314 dated 26.12.2000 that the Paid Secretaries must refund which they have drawn already and the respondents have no power whatsoever under the statute directing the members of the petitioner union to refund the salaries. The learned Counsel has further argued that the respondents basing on the Audit Report for 2000-01 i.e., for the financial year ending 31.3.2001 have issued notices under Section 60 of the APCS Act shows the nature of fraud as arrears of salary and the arrears drawn as Category V employees and those withdrawals cannot be termed as surcharge for the reason that the Division Bench of this Court has directed the Government to continue to pay the salaries till the Government takes a decision and the interim orders were merged with the final order and the said order has become final as no further appeal has been preferred by the respondents and the respondents cannot issue surcharge proceedings terming it as fraud. The learned Counsel has also further agued that Section 116-C speaks only for fixing of the salaries and not for re-fixing of the salaries. In the absence of any statutory power to re-fix the salaries basing on 2% of the working capital or 30% of the gross profits which has already been upheld by this Court and as Section 116-C which is being substituted by Act 22 of 2001, has no retrospectivity, the respondents have no power whatsoever to act upon old Section 116-C of the APCS Act. The learned Counsel has also further argued that there is no power to refix the salaries either under the old Act or under Section 116-C as amended as they speak of staffing pattern and pay-scales and the powers of the Registrar. The learned Counsel has further argued that the respondents have power by virtue of the judgment in WP No. 28473 of 1997 to fix the salaries with the prior approval of the Registrar of the Co-operative Societies and the limitation being that the expenditure should not exceed 2% of the working capital or 30% of the profits with effect from 25.4.2001 and not for the period prior to that date. The learned Counsel has argued that even assuming that the agreement dated 14.10.1991 is void and inoperative from the date of declaration i.e., 16.10.2001 to the extent of the society as observed by the Division Bench in WA No. 424 of 2001, the Division Bench has not granted the consequential relief to the Societies to recover the amount. In the absence of such directions, the respondents cannot term it as surcharge and effect the recoveries under the guise of fraud. The members of the petitioner Union have never withdrawn the salaries on their own as contended and they have been paid by virtue of the final orders of this Court in WP No. 16558 of 1992 dated 30.8.1996 and in view of the finality reached to that judgment, the petitioners are entitled to draw the salaries up to 16.10.2001. In the absence of any statutory provision prescribing retrospective effect, the respondents have no right to implement the repealed Section 116-C.
25. The learned senior Counsel has further argued that after the judgment of this Court in WP No. 16558 of 1992, the Government has taken four years time to take a decision and at this stage the respondents cannot resort to the provisions under Section 116-C of the APCS Act. The learned Counsel has further argued that with reference to the locus standi, all the members of the Union are effected in view of the letter issued by the Registrar dated 2.1.2002, a copy of which has been marked to all the District Co-operative Officers of the State and directing them for compliance of the report. That shows that all the Paid Secretaries are to be affected by the said letter and thus they have common cause of action. The learned Counsel also submits that the petitioner Union is a registered union and it can sue and be sued. The learned Counsel has also argued that the rights of the members of the petitioner Union have been affected collectively and hence they can challenge the proceedings and therefore they are entitled to bring the legal proceedings under Article 226 of the Constitution of India.
26. In support of the contention of the learned senior Counsel that the surcharge proceedings under Section 60 of the A.P. Co-operative Societies Act, 1964 are not maintainable without conducting a regular enquiry, he relied upon the following decisions:
1. Challa Sanyasinaidu v. Deputy Registrar of Co-operative Society, Srikakulam, (DB),
2. Co-operative Marketing Society v. Sriramulu, 1960 (1) AnWR 57.
27. The learned senior Counsel for the petitioner-Union submits that since the cause of action is one and the same for all the members of the petitioner's Union, the petitioner's Union can approach this Court under Article 226 of the Constitution of India to represent the grievances of the members of it. In support of his contention, the learned senior Counsel relied on the following judgments.
1. CPT Service v. Raghunath, .
2. Ram Prasad v. Industrial Tribunal, .
3. D.G.O.F. Employees' Association v. Union of India, .
4. Chirajil V.W.B.K. v. Industries Board, MR 1969 Cal. 649.
5. W.B.P.W and Union v. A.U.P. Works, .
28. The learned Additional Advocate-General has argued that in view of the Division Bench judgment in WA Nos. 424 and 425 of 2001 and batch dated 16.10.2001, the members of the petitioner's Union are not entitled to enjoy the present pay-scales as they were drawing as per the earlier agreement dated 14.10.1991, which was held to be void and inoperative. The learned Additional Advocate-General has also argued that pay-scales have to be fixed in pursuance of Section 116-C of the APCS Act which was subsequently amended with effect from 25.4.2001 and the same has been upheld by the Division Bench in WA Nos. 424 and 425 of 2001 and batch. The learned Additional Advocate-General has also argued that the State Government after taking into consideration the reports submitted by the Cabinet Sub-Committee have come to the conclusion that the pay-scales have to be fixed and that a direction has to be issued to the Societies to fix the pay-scales in pursuance of Section 116-C of the APCS Act and the members of the petitioner Union are bound to refund the salaries already drawn as the same was drawn in pursuance of the interim orders of this Court. In support of his contention, he relies on the judgments of a Division Bench of this Court in WA Nos. 424 and 425 of 2001 dated 16.10.2001 and in WP No. 28473 of 1997 dated 12.7.2002. The learned Additional Advocate General also submits that in view of the above judgments, the proceedings initiated by the second respondent are perfectly valid and legal and in view of the observations made by the Division Bench, the agreement dated 14.10.1991 has become void and inoperative and it has to be termed as nonexistent and as the salaries have been drawn in pursuance of the interim orders, the respondents are entitled to recover the same.
29. The learned senior Counsel appearing for the 8th respondent i.e., A.P. State Co-operative Bank Ltd. submits that NABARD is funding agency and the NABARD has suggested that the expenditure towards the pay of the employees and other establishment charges should not exceed 2% of the working capital or 30% of the gross profit in terms of actuals in a year. It is also submitted that the Amended Act has not brought new situation and even without amended Act, the PACS are entitled to recover the said amount as they are illegally drawn by the Secretaries.
30. The learned senior Counsel has also further submitted that after Division Bench judgment dated 16.10.2001 in WA Nos.424 and 425 of 2001 and batch, the Registrar of Co-operative Societies, Andhra Pradesh, Hyderabad has addressed a letter dated 2.1.2002 in Rc. No. 9078/2000-K2 to all the District Co-operative Officers in the State directing to fix pay-scales and allowances under Section 116-C subject to the prior approval of the Registrar of Co-operative Societies. Those orders were challenged by way of filing writ petitions and stay was granted as the Secretaries have drawn the salaries as per the Memo dated 14.10.1991 and hence there is no illegality and it is inconformity with the statement.
31. It is not in dispute that the Paid Secretaries have been appointed under a Half-a-Million Jobs Scheme and it is also not in dispute that when the Paid Secretaries went on strike in the year 1991, the Government with the approval of the then Chief Minister has entered into an agreement dated 14.10.1991 fixing the pay-scales on par with Cadre V employees of the District Co-operative Central Banks. The material annexed to the writ petition goes to show that the said agreement has been conveyed by the Registrar of Co-operative Societies by his letter No. 62738/89/PACS/CC2(3) dated 30.10.1991 to all the Person-in-charges of PACSs in the Division for necessary action. But, however, when there was deviation from the agreement, the Paid Secretaries approached this Court by filing different writ petitions and one of such cases being WP No. 16558 of 1991 and this Court granted directions to the respondents to pay the salaries in pursuance of the said agreement.
32. The material annexed to the writ petition shows that in WP No. 15506 of 1989, this Court directed the respondents to pay the salaries in pursuance of the memo dated 14.10.1991. When the Registrar of Co-operative Societies issued a circular in Rc. No. 62738/89/PACS/Cr.2(B) dated 14.2.1992 deviating the agreement dated 14.10.1991, different writ petitions have been filed by the Union, namely WP No. 16558 of 1992 and batch and the same came up for consideration before Sri Justice Y. Bhaskar Rao (as he then was) and Sri Justice P. Ramakrishnam Raju and the said writ petitions were disposed of with the following directions:
"In view of the above circumstances, the question is, whether the pay-scales fixed by the Government which are now kept in abeyance, are fixed in accordance with the provisions of the A. P. Co-operative Societies Act and Rules made thereunder. It is not disputed that before the Government issuing the Memo the State Co-operative Bank, the District Co-operative Central Banks and Primary Agricultural Co-operative Societies were not given any notice and their views were not taken into consideration. Therefore, in view of the above circumstances, instead of going into the merits of these cases, we think it just and proper to direct the Government represented by the Secretary, Agricultural and Co-operation to constitute a Committee to consider the pay scales of the petitioners and allotment of the petitioners to the Societies after taking into consideration the views of the representatives of the A.P. State Co-operative Bank, District Co-operative Central Banks, Primary Agricultural Co-operative Societies and petitioners' Union and take decision in accordance with the provisions of the A.P. Co-operative Societies Act and the Rules made thereunder within six months from the date of receipt of this order.
Until the Government takes the decision, the interim orders granted by this Court in these cases will continue. The writ petitions are disposed of accordingly."
33. After the above judgment in WP No. 16558 of 1992, the Government has taken a decision nearly after a period of four years by issuing G.O. Ms. No. 314 Agriculture and Cooperation (Co-op.III) Department dated 26.12.2000, the relevant para reads as follows:
"Now, therefore, in exercise of the powers conferred by Section 131 of the Andhra Pradesh Co-operative Societies Act, 1964 (Act 7 of 1964), the Government of Andhra Pradesh hereby direct the Registrar of Co-operative Societies to take action accordingly in matters relating to the staffing pattern, qualifications, pay-scales and other allowances for employees of the Societies, in accordance with the provisions under Section 116 C of the APCS Act, 1964."
Further, G.O. Ms. No. 314 dated 26.12.2000 cancels the Memo No. 5661/Co-op.III/2/911 dated 14.10.1991.
34. While the G.O. Ms. No. 314 dated 26.12.2000 was questioned by a batch of writ petitions, this Court has granted interim suspension of the said GO. Against the interim orders, the respondents preferred WA Nos.424 and 425 of 2001 and the batch of writ petitions also came up for consideration before a Division Bench consisting of the then Chief Justice Sri S.B. Sinha and Sri Justice V.V.S. Rao. The Division Bench after considering the entire material on record held that the G.O. Ms. No. 314 dated 26.12.2000 is valid and the agreement reached in Govt. Memo No. 5661/Co-op.III/ 2/91-1 dated 14.10.1991 is void and inoperative so far as the Co-operative Societies are concerned and the Division Bench has further observed as follows:
"Furthermore, the directions in the writ petitions are not in tune with the provisions contained in Section 116-AA and Section 116-C of the Act. If the prayer of the petitioners is to be granted, the same would run counter to the power of the State as contained in Section 131 of the Act. By reason of Section 131, the Government cannot issue any directions which are contrary to the Act and the Rules as held by a Division Bench of this Court in MARVS Saibabu v. Commissioner and Registrar of Co-operative Societies.
35. The Division Bench has also further observed that the Scheme and the purport of the Act as regards the recruitment of staff is envisaged in terms of Section 116-C of the Act. Expenditure to be incurred on the staff has direct nexus with the profit earned by the Co-operative Societies or the working capital. In that view also, we are of the opinion that the prayer made in the writ petition cannot be granted.
36. It is also a fact that against the said judgment in WA Nos.424 and 425 of 2001 and batch dated 16.10.2001, SLP (Civil) Nos. 250-251 of 2002 have been preferred before the Apex Court and the same were dismissed at the admission stage.
37. In pursuance of the above judgment, the Registrar of Co-operative Societies has addressed a letter to the District Co-operative Officer on 2.1.2002 in Rc. No. 9078/2000-K2 which reads as follows:
"According to above judgment of the Hon'ble High Court of Andhra Pradesh (WA Nos.424 and 425 of 2001 and batch dated 16.10.2001) giving a pay-scale for the PACS employees in the said cadre does not correspond to their approved pay-scales and employments. Consequent to such orders every PACS should adopt the pay scales under Section 116-C of the A.P. Coop. Societies Act 7 of 1964 with prior approval of Registrar of Co-operative Societies from the date of order of Hon'ble High Court in WA Nos.424 and 425 of 2001 i.e., with effect from 16.10.2001. In WP No. 2361 of 2000, the Hon'ble High Court ordered on 21.11.2001 that 'not to recover the enhanced salary and decide the issue of recovery after affording opportunity of being heard to the petitioners'. The Hon'ble High Court in WA No. 464 of 2001 in WP No. 5431 of 1990 upheld the validity of 116-AA and 116-C of the APCS Act 7 of 1964 (copy enclosed). You have reported that de-caderisation and allotment of said Secretaries to PACS in East Godavari District was not completed under Section 116-AA of the APCS Act 7 of 1964 in the reference 4th cited. In view of the validity Government G.O. Ms. No. 314, Agriculture and Cooperation (Coop.111) Department dated 26.12.2000 and cancellation of Government Memo No. 5661/Co-op.III/2 dated 14.10.1991 and ordering that no case has been made out for granting any relief to the petitioners in WA Nos.424 and 425 of 2001 in WP No. 21488 and in batch of 24 writ petitions the pay-scales of the 342 respondents Societies in WP No. 18057/99 has to be fixed (pay scales and allowances) under Section 116-C subject to prior approval of the Registrar of Co-operative Societies.
I, therefore, request you to take appropriate action keeping in view of the Hon'ble High Court orders in WA Nos.424, 425 of 2001 and WP No. 18057/99, WA No. 464 of 2001 in WP No. 5431 of 1990 and WP No. 2326/ 2001 against the petitioners and report compliance by the end of January, 2002.
Yours faithfully, Sd/-xxx for Registrar of Co-op. Societies Copy to all District Co-operative Officers in the State to take appropriate action keeping in views of the above judgments and report compliance by end of January, 2002.xxx"
38. In the meanwhile, the Deputy Registrar of Co-operative Societies, Narasaraopet issued Notice under Section 60(1) of the APCS Act in Rc. No. 4/2002-E dated 28.6.2002 to the Secretary of Vellaturu FACS Ltd. basing on the audit report directing to show-cause why the amount mentioned in the said notices, i.e., Rs. 1,47,156/- as arrears difference between new and old salary of the Secretary and Rs. 2,47,348.46 paise as DA arrears, which was termed as fraud committed by the Secretary, may not be surcharged. It was also directed to recover the same amount with 24% interest per annum from the date of occurrence till the date of realisation.
39. The learned senior Counsel at this juncture submits that the action of the respondents in issuing notices under Section 60 of the Act by showing the nature of fraud as difference between new and old salary and DA arrears and directing the Secretary to pay the same with 24% interest per annum is in violation of the provisions of the Act and the Rules. The learned senior Counsel also submits that difference between old and new salary and DA arrears cannot be termed as surcharge and the proceedings under Section 60 cannot be issued as no fraud was committed by the Secretaries and that they have drawn the salaries with proper authorisation of the competent authority.
40. Now, the point to be decided is whether the respondents have got any power to recover the salaries, which were paid pursuant to the agreement dated 14.10.1991, by way of surcharge notices under Section 60 of the APCS Act?
41. The main contention advanced by the learned Additional Advocate-General is that the petitioner union has no locus standi to question the proceedings and the Secretaries in their individual capacity have to question the proceedings under Section 60 of the APCS Act. However, it is pertinent to note that after disposal of WA Nos.424 and 425 of 2001 and batch dated 16.10.2001, the Registrar in his proceedings dated 2.1.2002 has directed the District Co-operative Officer, Kakinada to re-fix the salaries under Section 116-C of the APCS Act subject to prior approval of the Registrar of Co-operative Societies and the same has been marked to all the District Co-operative Officers in the State. In view of the above, it has to be held that there is common cause of action and the petitioner's Union has right to file writ petition championing the cause of its members. It is also to be observed that in earlier round of litigation, the Union has filed the writ petitions and the respondents have never taken any objection for agitating the rights of the members of its Union. Moreover, the petitioner Union is a registered one and it can sue and be sued. Moreover, all the members of the Union are affected by the notices issued under Section 60 of the APCS Act and hence the petitioner's Union can agitate the rights of its members. The Supreme Court in the case of Shramik Uttarsh Sabha v. Raymond Woolen Mills Ltd., , and the Calcutta High Court in the case of DGOF Employees' Association (supra) has held that the Union can agitate the rights of its members.
42. The material annexed to the writ petition shows that under Section 116(A)(1) of the A.P. Co-operative Societies Act, 1964, the Andhra Pradesh Agricultural Credit Societies Paid Secretaries (Common Cadre) Regulations have been framed. According to the said Regulations, "Appointment Committee" means the Appointment Committee constituted by the Registrar of Co-operative Societies under Section 116-A(1) of the APCS Act for recruitment and regulation of services of Paid Secretaries of viable/potentially viable Primary Agricultural Credit Societies xxxxx. "Paid Secretary" has been defined under Regulation 2(iii) of the A.P. Agricultural Credit Societies Paid Secretaries (Common Cadre) Regulations any person appointed by the special authority of the Appointment Committee to work as Secretary, Manager or by any other designation, carrying out the functions of Chief Executive in any of the Societies specified. As per Regulation 2(x), 'Competent Authority' means the authority empowered to deal with any matter as prescribed under these Regulations. As per Regulation 2(xii), Cadre Fund means the Fund constituted for meeting the cost of Paid Secretaries. As per Regulation 3 of the above Regulations, the Appointment Committee shall have power to prescribe the procedure for appointments to the posts of Paid Secretaries in Primary Agricultural Credit Societies and the Committee shall arrange for recruitment of persons to the posts of Paid Secretaries . The Chairman of the Appointment Committee shall have powers of appointment of the Paid Secretaries from the list of candidates recruited by the committee in accordance with the procedure laid down for their transfer from one Society to another and exercise disciplinary control over them. As per Clause (iv) of Regulation 3, the Government has to contribute lump sum amount to the extent of short fall in the contribution under items (i) (ii) above over the expenditure and the salaries of Paid Secretaries. The Cadre Fund is intended mainly to reimburse the deficits, if any, in the maintenance of Cadre Fund at the Co-operative Central Bank level in meeting the cost of Paid Secretaries. For this purpose, the Chairman, State Level Cadre fund authority shall obtain claims from the Chairman, Appointment Committee in a proforma to be prescribed. The State cadre fund authority in conformity with such regulations and directions as may be issued by the Registrar of Co-operative Societies from time to time will formulate the guidelines for maintenance and utilisation cadre fund at the State level or at the Co-operative Central Bank's level. The Chairman, Appointment Committee shall arrange payment of salaries to the Paid Secretaries of the Societies every month after obtaining such necessary date and information from the Managements of the Societies regarding attendance and performance of the Paid Secretaries during the month. In the case of Large Sized Co-operative Societies and Rural Banks, the salary of only the Secretary/Manager will be met from the Cadre Fund and the salaries of the staff, if any, shall be met by the Societies from their own resources. It is also further stated in the Regulations that in case the contributions collected at the Co-operative Central Bank level are not adequate to meet the cost of all the Paid Secretaries, the Appointment Committee may approach the State Cadre Fund Authority for the difference amount to meet the actual deficits by submitting claims in the proforma prescribed by the State Cadre Fund Authority.
43. In view of the strike by the Paid Secretaries, the Government has entered into an agreement with the members of the petitioner's Union on 14.10.1991 and the main grievance of the respondents is that the members of the petitioner Union have started drawing salaries on par with the Cadre 5 of the District Co-operative Banks in view of the said agreement dated 14.10.1991.
44. At this juncture, it is very pertinent to note that original Section 116-A which was inserted by Act 10 of 1970 was substituted as Sections 116-A and 116-AA by Act 21 of 1985 with effect from 25.4.1985. By virtue of Section 116-AA of APCS Act, 1964, the common cadre for all categories of employees other than those specified in Section 116-A constituted before the commencement of the A.P. Co-operative Societies Act (Amendment) Act, 1985 and existing at such commencement shall stand abolished with effect on and from the commencement and upon such abolition, it shall be lawful for the Registrar, to allot, subject to such rules as may be made in this behalf, the employees included in the cadre so abolished to such Primary Agricultural Credit Societies as he may deem fit. As per Section 116-A of the APCS Act, 1964, a common cadre of employees has been constituted for certain societies and Sub-clause (2) of the said section deals with the classification and methods of recruitment, conditions of service, pay and allowances and discipline and conduct of the officers specified in Sub-section (1) shall be such as may he provided by regulations to be framed by the Registrar.
45. However, Rule 71 of the A.P Co-operative Societies Rules, 1964 deals with service conditions of Common Cadre Employees under Section 116-A, which read as follows:
"71. Service conditions of Common Cadre Employees under Section 116-A:
The service conditions of Common Cadre Employees under Section 116-A shall be governed by the existing regulations till they are modified by the rule made in this behalf by the Government."
46. The allotment of decaderised Secretaries to the Societies has to be regulated by Rule 72 which shows that the allotment shall be made by the Registrar and on such allotment to the Society, the Secretary shall be deemed to be the employee of the society. As per Sub-rule (3)(b) of Rule 72 of the Rules, the service conditions of the Secretaries working in the societies shall be governed by such service regulations as may be framed by the Registrar for adoption by the Societies. Till such allotment, the disciplinary control shall be governed by the Common Cadre Regulations existing prior to the abolition as per Rule 72(5) of the Rules which reads as follows:
"(5) Notwithstanding anything contained in Sub-rule (4), until the allotments of the Secretaries is made to the Primary Agricultural Co-operative Societies as per the guidelines laid down in Sub-rules (1) and (2), the Secretaries for the purpose of disciplinary control, shall be governed by the Common Cadre Regulations existing prior to the abolition of common Cadre of Secretaries of Primary Agricultural Co-operative Societies and General Managers of the Co-operative Central Banks on a decision by the Registrar shall initiate action against the said Secretaries for lapses committed by them in the societies they are working after the decaderisation"
47. The above rule specifies that until the allotment of the Secretaries is made to the Primary Agricultural Co-operative Societies as per the guidelines laid down in Sub-rules (1) and (2), the disciplinary control over such Secretaries shall be governed by the Common Cadre Regulations existing prior to the abolition of the common Cadre of Secretaries of Primary Agricultural co-operative Societies. From the above, it is clear that the Secretaries are governed by the regulations existing prior to the abolition of common cadre of Secretaries for the purpose of disciplinary control.
48. In the meanwhile, Section 116-C of the APCS Act has been amended by the Government by virtue of Act 22 of 2001 with effect from 25.4.2001. Section 116-C of the APCS Act reads as follows:
"116-C. STAFFING PATTERN OF SOCIETIES:-
(1) A society shall have power to fix the staffing pattern, qualifications, pay-scales and other allowances of its employees with the prior approval of the Registrar of co-operative Societies subject to the condition that expenditure towards pay and allowances of the employees shall not exceed two per cent of the working capital or thirty per cent of the gross profit, in terms of actuals in a year whichever is less.
(2) xxxx"
49. As per the above Section, the Society has to fix up the staffing pattern, qualifications, pay-scales and other allowances of its employees with the prior approval of the Registrar of Co-operative Societies but restrictions have been made on the expenditure that the expenditure shall not exceed 2% of the working capital or 30% of the gross profit in terms of the actuals in a year.
50. The above provision has come up for consideration before a Division Bench of this Court in WP No. 28473 of 1997 and the Division Bench by its judgment dated 12.7.2002 has upheld the provisions under Sections 116-A, 116 AA and 116-C of the APCS Act. The Division Bench while upholding the amendment to Section 116-C, which came into effect from 25.4.2001 by Act 22 of 2001, has observed that "it is not necessary to go into the controversy as to whether the process of allotment of the Paid Secretaries into various Societies after the abolition of common cadre has been completed or not in pursuance of Section 116-AA of the APCS Act." The Division Bench has also had an occasion to deal with the common fund as enunciated in the regulations framed under Sub-clause (1) of Section 116-A, which has been created to meet the costs of the Paid Secretaries. The Division Bench on 12.7.2002 has rendered the said judgment in WP No. 28473 of 1997.
51. As contended by the learned Additional Advocate-General, Section 116-C of the APCS Act has been substituted by the Act 22 of 2001 on 25.4.2001. The amended Act provides for fixing of staffing pattern, pay-scales etc. In this context, it is pertinent to extract Section 116-C of the APCS Act before and after the amendment:
Section 116-C of Old Act Section 116-C of the New Act Staffing Pattern of Societies:
Staffing pattern of Societies:
A society shall have power to fix the staffing pattern, qualifications, pay-scales and other allowances for its employees with the prior approval of the Registrar of Co-operative Societies.
No appointment or removal of a Chief Executive by whatever name called of any society, or class of Societies as may be prescribed, which are in receipt of financial aid from the Govern-ment, shall be made without the prior approval of the Registrar of Co-operative Societies.
A society shall have power to fix the staffing pattern, qualification, pay-scales and other allowances of its employees with the prior approval of the Registrar of Co-operative Societies subject to the condition that expenditure towards pay and allowances of the employees shall not exceed two per cent of the working capital or thirty per cent of gross profit, in terms of actuals in a year whichever is less.
(2) No appointment or removal of a Chief Executive by whatever called of any society, or class of societies as may be prescribed which are in receipt of financial aid from the Government, shall be made without the prior approval of the Registrar of Co-operative Societies.
52. The amended Section 116-C of the APCS Act, has created a power in the Society to fix the staffing pattern, qualifications, pay-scales and other allowances of its employees with the prior approval of the Registrar of Co-operative Societies subject to the condition that expenditure towards pay and allowance shall not exceed two per cent of the working capital or thirty per cent of the gross profit. The difference between the Amended Act and Un-amended Act is that in the Un-amended Act, there was no ceiling limit on the expenditure towards pay and allowances of the employees whereas in the Amended Act, the ceiling limit has been prescribed as 2% of the Working Capital and or thirty per cent of the profit whichever is less. In the absence of mentioning of the retrospective operation of Section 116-C of the APCS Act, it has to be construed that it is prospective in operation. It is also to be noted that the cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective in operation.
53. To the above principle, support can be derived from the following catena of decisions:
i. Venkata Subamma v. Ramayya, AIR 1932 PC 92.
ii. Shiv Bahadur Singh v. State of U.P., .
iii. Union of India v. Madan Gopal, .
iv. Arjan Singh v. State of Punjab, .
54. The Privy Council in the case of Venkata Subbamma v. Ramayya (1932 PC 92) has held that where a section of a statute has been substituted by a repealed one, it should be interpreted as it stands, and not with reference to the reading of the repealed section. Thus, the effect of the substituted Section will come into effect from the date of substitution only. From the above, it is clear that Section 116-C of the APCS Act as amended by Act 22 of 2001, in the absence of any retrospective operation is prospective in operation with effect from 25.4.2001. The above section no doubt deals with the fixing of staffing pattern and pay-scales of the employees subject to the restrictions stated in the section.
55. Rule 4 of A.P. Co-operative Society Rules states that (i) it shall be competent to the Registrar to frame model bye-laws for each class or classes of societies and to suggest modifications thereto, from time to time; (ii) Such model bye-laws shall be adopted by a Society with such modifications, if any, as may be suggested by the Society and agreed to by the Registrar. Rule 5 of the APCS Rules deals with the subject-matter of the bye-laws, which has been substituted by G.O. Ms. No. 37, Agriculture and Cooperation (Co-op.IV) Department dated 28.1.2002.
56. Rule 5 of the above APCS Rules reads as follows:
"The bye-laws of a society shall not be contrary to the provisions of the Act and Rules and may deal with all or any of the matters specified below and with such other matters incidental thereto as may be deemed necessary by the society :-
(1) the name and address of the society (2) to (23) xxxx (24) the method of recruitment, the conditions of service and the authority competent to fix, revise or regulate the scales of pay and allowance to be paid to the officers and servants of the society and the procedure to be followed in the disposal of disciplinary cases against them.
(25) to (35) xxxx"
57. It is to be noted that the above Rule 5 of the APCS Rules has been substituted with effect from 25.1.2002. It is no doubt true that the Societies have to frame its model bye-laws fixing the conditions of service and also revising and regulating the pay-scales in pursuance of Rule 5 of the ARCS Rules which has come into operation only with effect from 28.1.2002. It is also evident from the letter of the District Co-operative Officer, Chittoor dated 11.2.2002 wherein GO Ms. No. 37 dated 28.1.2002 has been mentioned. Here also, it has to be observed that in the absence of retrospective operation, its shall be deemed to be in operation from 28-1-2002 i.e., the date of issuance of the GO. The relevant portion of the letter of the District Co-operative Officer, Chittoor dated 11.2.2002 is extracted below for ready reference:
"The Registrar of Co-operative Societies has instructed to take necessary action keeping in view of the judgment issued by the Hon'ble High Court in WP No. 2361 of 2001. Accordingly, duly communicating the copy of the judgment and the GO 2nd cited, you have been instructed to obtain proposals under Section 116-C of the APCS Act 7 of 1964 from Primary Agrl. Co-operative Societies in your jurisdiction, you have also been instructed to process the proposals duly creating awareness or obtaining signatures of Person-in-charge concerned and the Final Audit reports or financial statements prepared and countersigned by the circle auditors.
In this connection it is to further inform you that while processing the proposals you have to bear in mind the stipulations of the latest amendments of the APCS Act, 1964 (116-C Staffing pattern of societies) concerned rules (Rule 28) detailed below.
(G.O. Ms. No. 37, Agrl. & Corpn. (Co-op.IV) Dept. dated 28.1.2002) Rule 28(3) all existing societies shall also furnish to the Registrar details of
(i) Persons working in the society against the existing posts along with their qualifications.
(ii) Job Chart Nature of work/Pay-Scales for each post/categories.
(iii) to (vii) xxx (4) Every Society within 45 days of registration shall frame and submit to the Registrar for approval its staffing pattern which shall include:
(a) Service rules for its employee, specifying staffing pattern, qualifications, method of appointment, scales of pay and allowances, responsibilities, duties, training, securities and disciplinary rules etc.
(b) Revision of any of the service rules or pay-scales etc., shall be made by the General Body on the recommendation of the Managing Committee provided the staff cost and contingencies are less than 2% of the working capital or less than 30% of the gross profit under intimation to the Registrar of Co-operative Societies. Provided further that if it is found to be in excess of the said norms either in Audit Inspection or inquiry, the excess so spent shall be recoverable from members of the Managing Committee concerned under Section 60(1) of the APCS Act and the Registrar shall have the powers to cancel such pay revision or modify it as deemed fit and adjust securities furnished by the paid servants.
xxxx"
Sub-rule (2) of Rule 28 of the APCS Rules makes it clear that all the existing societies with and without State aid shall, if not already approved, prepare service rules, within 45 days from the date of enforcement of these rules and submit to the Registrar for approval, which, among others, shall include the following if already not done so, with regard to staffing pattern, scale of pay and allowances, method of filling of posts, qualifications, and rules regarding disciplinary proceedings and other service matters, Sub-rule (3) of Rule 28 of APCS Rules deals with information to be furnished to the Registrar with regard to persons working in the society, job chart, staff cost and contingent cost, identification of surplus staff, pay scales of existing staff and working capital and gross income. Sub-rule (4) of Rule 28 of the APCS Rules postulates that the Society shall within 45 days from the date of its registration and submit the staffing pattern to the Registrar for approval. Sub-rule 4(b) of Rule 28 of APCS Rules deals with the expenditure to be met on the staff cost and the said section reads as follows:
"(b) Revision of any of the service rules or pay-scales etc., shall be made by the General Body on the recommendation of the Managing Committee provided the staff cost and contingencies are less than 2% of the working capital or less than 30% of the gross profit under intimation to Registrar of co-operative Societies. Provided further that if it is found to be in excess of the said norms either in audit, inspection or inquiry, the excess so spent shall be recoverable from members of the Managing Committee concerned under Section 60(1) of the A.P. Co-operative Societies Act and the Registrar shall have the powers to cancel such pay revision or modify it as deemed fit and adjust securities furnished by the paid servants"
58. The above rule should be read along with Section 116-C of the APCS Act which has come into force from 25.4.2001. Rule 28 of the APCS Rules , which came into existence by virtue of GO Ms. No. 37 dated 28.1.2002, imposes condition that staff cost and contingencies should be less than 2% of the working capital or less than 30% of the gross profit. From the above discussion, it is very clear that the Registrar of the Societies have to follow the above rules and they have got the power to fix or re-fix the pay-scales only with effect from 28.1.2002. As per Sub-rule (2) of Rule 28 of the APCS Rules, the Societies have to prepare service rules within 45 days and submit for approval to the Registrar, if not already done with regard to the staffing pattern, scale of pay and allowances etc. This shows that according to the above rule, the Society which has not received approval of the Registrar with regard to the service rules should get approval within a period of 45 days from 28.1.2002.
59. At this juncture, it has to be made clear that if at all any revision of scales could be made, it is only in accordance with Rule 28(4)(b) of the APCS Rules by virtue of G.O. Ms. No. 37 dated 28.1.2002. It has also to be noted that a letter has been issued by the Principal Secretary to the Government on 5.7.2002 annexed as material paper by the petitioner's Union in Memo No. 8030/Co-op.IV(1)72002-03, which reads as follows:
"As stated above, as per the recent amendments made, every Society has to determine its staffing pattern, review its existing employees strength, and give details of their pay-scales etc. and seek approval of the Registrar within a time frame as prescribed in the rules. I find that the exercise has not been done in the district. This is a very important activity and must be done on top priority basis. There is no question of flouting of the rules on these issues. Those societies which do not comply with the rules and the law should be proceeded against and severe action will have to be taken against them for non-compliance with the law and the rule position."
60. The above memo shows that the Societies have to act upon the amended rules by determining its staffing pattern, review of its existing employees strength and give details of their pay scales and seek approval of the Registrar. The above letter also contains that if the Societies do not comply with the rules, severe action will have to be taken against them for non-compliance. From the above, it could be culled out that the Societies have to adhere to the amended Rule 28 of the APCS Rules which has been substituted by G.O. Ms. No. 37 dated 28.1.2002.
61. Rule 71 of the APCS Rules controls the service conditions of common cadre employees of Section 116-A of APCS Act. The above rule, however, says that the employees in common cadre are governed by the existing regulations till they are modified in accordance with the rules made in this behalf by the Government. Sub-rule (3)(a) of Rule 72 of APCS Rules makes it clear that the Secretary, on allotment to a Society, shall be deemed to be the employee of that Society and the service conditions of the Secretaries shall be governed by such service regulations as may be framed by the Registrar. Sub-rule (5) of Rule 72 of APCS Rules says that until the allotments of the Secretaries is made to the Primary Agricultural Co-operative Societies, the Secretaries for the purpose of disciplinary control shall be governed by the common cadre regulations existing prior to the abolition of the common cadre secretaries of the Primary Agricultural Co-operative Societies. From the above, it is clear that the Secretaries of Primary, Agricultural Co-operative Societies are governed by the service conditions of Common Cadre Employees under Section 116-A of the APCS Act and shall also be governed by the existing regulations till they are modified by the rules made in this behalf by the Government.
62. In the absence of any material placed before this Court that the regulations have been modified, it shall be construed that old regulations under Section 116-A of the APCS Act will govern the field. If the un-amended Section 116-A of the APCS Act is read with Rule 72(5), the Secretaries are governed by the common cadre regulations. The regulations that are placed before the Court by the petitioners are prior to the abolition of the Common Cadre. In the absence of any material placed by the respondents modifying the regulations, it has to be construed that the regulations framed under Section 116A(i) of the APCS Act shall continue. Even otherwise, the Societies have to adhere to the fixation of Pay-Scales as per the Amended Rule 28 of the APCS Rules.
63. The learned senior Counsel also contends that even though the respondents have issued notices under Section 60 of the APCS Act to two of the Secretaries working in Vellaturu PACS and Kondramutla PACS, the apprehension of the petitioner's Union is that the same notices would follow to all the Secretaries of the Societies with an intention to recover the salaries which have been paid pursuant to the agreement dated 14.10.1991, under the guise of letter of the Registrar of Co-operative Societies dated 2.1.2002. The apprehension of the members of the petitioner Union appears to be genuine in view of the nature of fraud shown in the notices under Section 60 APCS Act notices as difference of salary drawn and also, arrears of Vth cadre Secretary.
64. While considering the validity of Memo dated 14.10.1991, a Division Bench of this Court in its judgment in WA Nos.424 and 425 of 2001 dated 16.10.2001 has held that the said Memo is void and inoperative to the extent of Co-operative Societies However, it has to be observed that the said Division Bench has never ordered the recoveries to be made from the Paid Secretaries and did not grant any consequential relief of recoveries.
65. A Division Bench of this Court in WP Nos. 16558 of 1992 and batch dated 30.8.1996 while dealing with the proceedings in Rc. No. 62738/89/PACS/Cr.2(B) dated 14.2.1992 has directed the Government to take a decision within a period of six months and also directed to continue to pay the salaries till the decision is taken by the Government. The above writ petition was disposed of on 30.8.1996 and the said judgment has become final as no appeal was filed against the judgment by the respondents. In pursuance of the directions of this Court in WP No. 16558 of 1992 dated 30.8.1996, the Paid Secretaries have been paid the salaries. It is pertinent to note that the Government has taken a decision nearly after four years by issuing G.O. Ms. No. 314 dated 26.12.2000. In the said G.O. Ms. No. 314 dated 26.12.2000, the Government has directed the Registrar to act upon under Section II6-C of the APCS Act and cancelled the Memo dated 14.10.1991. Thus, it should be construed that the Memo dated 14.10.1991 has been cancelled from the date of G.O. Ms. No. 314 i.e., from 26.12.2000. However, the said G.O. Ms. No. 314 dated 26.12.2000 has become final due to dismissal of WA Nos.424 and 425 of 2001 and batch dated 16.10.2001. In the above WA Nos. 424 and 425 of 2001, the Division Bench held that the Memo dated 14.10.1991 as void and inoperative. Hence, it has to be construed that the date of cancellation of the said Memo shall be from 26.12.2000. But, in view of the observations of the Division Bench in WA Nos.424 and425 of 2001 that the memo dated 14.10.1991 is void and inoperative so far as the Co-operative Societies are concerned, it has to be decided whether the said cancellation of the memo gives any right to the Societies to claim recoveries by way of notices under Section 60 of the APCS Act terming it as surcharge,
66. The Apex Court in the case of Behram Khurshid Pesikaka v. State of Bombay, , has observed that the effect of legislation without legislative competence is non est. It was also observed that nevertheless a law enacted without legislative competence remains on the statute-book till a Court of competent jurisdiction adjudicates thereon and declares it to be void. When the Court declares it to be void, it is only then it can be said that it is non est for all purposes.
67. The Supreme Court in the case of Somaiya Organics (India) Ltd v. State of UP., , has followed the above principle. In view of the above proposition, it has to be held that the Memo dated 14.10.1991, which has been cancelled by G.O. Ms. No. 314 dated 26,12.2000 is void from the date it was declared void and inoperative by the judgment dated 16.10.2001 in WA Nos.424 and 425 of 2001. When several writ petitions and writ appeals i.e., WA Nos.424 and 425 of 2001 and batch have been filed relating to the said GO, this Court by its order dated 2.1.2001 has granted interim suspension and those cases i.e., WA Nos.424 and 425 of 2001 and batch were disposed of by judgment dated 16.10.2001.
68. The learned senior Counsel Sri E. Manohar submits that the Societies have advanced monies which have been received by them in the form of funds from the NABARD and hence the Societies are entitled to recover the monies paid to the Paid Secretaries in the form of salaries by virtue of the cancellation of the Memo. The above contention is made with reference to the notices issued under Section 60 of the APCS Act. Sub-clause (1) of Section 60 of the APCS Act has been added with effect from 21.7.2000 by virtue of Act 15 of 2000, which reads as follows:
"60. SURCHARGE:- (1) Notwithstanding anything contained in any other law for the time being in force wherein the course of an audit under Section 50 or an inquiry under Section 51 or an inspection under Section 52 or Section 53, or the winding up of a society, it appears that any person who is or was entrusted with the organization, affairs or management of the society or any past or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or has been guilty of breach of trust in relation to the society or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has made any payment contrary to the provisions of this act, the Rules or the Bye-laws, the Registrar himself, or any person specially authorised by him in this behalf, of his own motion or on the application of the committee, liquidator or any creditor or contributor, may inquire into the conduct of such person or officer or servant and make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar or the person authorised as aforesaid thinks just or to contribute such sum to the assets of the society by way of compensation in respect of the misappropriation, misapplication of funds, fraudulent retention, breach of trust, or wilful negligence as the Registrar or the person authorised as aforesaid thinks just.
xxxx"
69. A reading of the above Section 60 of APCS Act shows that in the course of audit under Section 50 of the APCS Act or enquiry under Section 51 of the APCS Act, if it is found that the officer or servant of the Society has mis-appropriated the amount or fraudulently retained the amount or other property or has been guilty of, is liable for surcharge. The notices under Section 60 of APCS Act dated 28.6.2002 shows that they have been issued to the Secretaries to recover the amounts of difference of previous salary and existing salary and the arrears of Vth cadre arrears, which were allegedly paid to them illegally. The said notices have been issued basing on the audit report for the year 2000-01.
70. The learned senior Counsel for the petitioner's Union submits that the financial year 2000-01 ended on 31.3.2001. At that time, G.O. Ms. No. 314 dated 26.12.2000 has been suspended by this Court on 2.1.2001. A Division Bench of this Court has finally decided the matter on 16.10.2001. In view of the above submissions, it has to be examined whether the salaries drawn by the Co-operative Societies by virtue of the orders of this Court in WP No. 16558 of 1992 and batch dated 30.8.1996 would amount to fraud and the amount so paid would be recoverable under Section 60 of APCS Act terming it as surcharge. It should be observed that in the notices issued under Section 60 of APCS Act, no fraud has been shown except showing the drawal of arrears and salary and the salaries drawn in the Cadre V under the column of fraud.
71. In similar circumstances, the Apex Court in the case of Venkata Subba Rao v. Stale of A.P., , has held that surcharge imposed by the executive without any authority of law is wholly invalid. The relevant observations of the Supreme Court in this regard are extracted below for ready reference:
"(14) WHILE things were going on in this State with the prices fixed operating to determine the purchase and the sale price of these procuring agents, Government raised the purchase and sale price of paddy and rice in or about July, 1947. They then directed these procuring agents to pay over to them as a surcharge the difference between the original and the enhanced price on the stock of paddy held by them on the day previous to the rise in price. These miller-merchants resisted the levy but were forced to make the payment which they did under protest. There were similar rises in prices on 7-12-1947 and on 21-11-1948 and in a similar manner the amounts of these surcharges were collected from the several millers, the amount payable by each being calculated on the stock of paddy or rice remaining with them on 6-12-1947 and 20-11-1948 respectively.
(15) The main defence of the Government was that the millers were really the agents of the Government and so were accountable to them for the extra profit they would have made by reason of the increase in the price effected by Government. Besides, it was also asserted that the demand for the 'surcharge' was authorised or permitted by the terms of the 'procuring agreement' entered into with them as also by the conditions of the licences which were granted to them under which they were permitted to trade in paddy or rice. There was also a minor point raised that the suits were barred by Section 16 of the Essential Supplies Act, 1946. As stated earlier, suits filed in some of the Courts were dismissed accepting the defence raised by the Government while those filed in other Courts succeeded and decrees were passed for the repayment of the several sums collected by the Government. Appeals filed to the High Court from these decrees and then those filed by the Government were allowed while those by the miller plaintiffs were directed to be dismissed by a common judgment from which most of the, appeals before us arise. We should, however, mention even at this stage that besides this common question there have been other defences raised to some of these suits to which it would be necessary to advert but we shall defer stating them until after we "have finished with the points that are common to all these appeals.
(18) SEVERAL millers in the three districts of East and West Godavari and Krishna whose business consisted in buying paddy, milling them and selling the rice, applied to the Government for appointment as procuring agents in accordance with this notification. Before however they could be appointed as procuring agents each of them had to execute an agreement in a form prescribed by rules and as the terms of this agreement from the core of the case of the State Government on the question of Agency it is necessary to refer to them in some detail. The heading of this model agreement which was signed by each one of the appellants reads Agreement executed by Procuring Agent/Authorised wholesale Distributor. It then proceeds: I,......... having been appointed a dealer for the purchase, storage and distribution of paddy, rice or.... under the Intensive Procurement Scheme and or Informal Rationing Scheme, shall abide by all the provisions prescribed from time to time by or under the said schemes and any directions issued thereunder in particular I undertake to purchase paddy, rice.... that are available for purchase in the area allotted to me at the rates prescribed from time to time by the Commissioner of Civil Supplies, Madras, or any officer authorised by him in this behalf. I undertake to store paddy, rice or millets purchased by me in proper godowns and to be responsible for their safe custody. I also undertake to sell the stocks of paddy, rice or millets with me to the persons to whom I am directed to sell it at such rates as may be prescribed from time to time. I agree to deposit with the District Supply Officer........ District Rs. 2,000.00 against the fulfilment of this undertaking. I agree to the forfeiture by the District Supply Officer........District of this deposit for any breach by me or by any person acting on my behalf for failure on my part to comply with or to secure compliance with the aforesaid provisions, regulations and duties prescribed from time to time under the Intensive Procurement and or Informal Rationing Scheme. On the execution of this agreement they were appointed as agents for purchasing paddy and rice determined as surplus with the ryots. This appointment was notified in the District Gazette arid as against each group of agents the area in which they were authorised to procure was set out.
(22) PADDY was thus being procured from the producers by the millers appointed so to procure under the Procurement Order we have set out earlier and they were disposing of the rice after milling the paddy procured to wholesalers and retailers at the prices fixed by the Government. Similarly those millers who had entered into contracts to supply rice to the District Supply Officer were duly fulfilling the terms of the contract and were being paid the prices stipulated in the agreements subject to any deductions that were made on account of interior quality, deterioration of goods etc. While things were in this state, the Government of Madras promulgated, on the 17th of July, 1947, what is termed 'a bonus scheme' for subsidizing cultivators to induce them to increase their production so as to have more surpluses for enabling procurement of larger quantities. The amount of the bonus was Re. 1.00 per maund of surplus paddy. Out of this one-half was to be passed on to the consumers by enhancing by eight annas a maund the wholesale and retail prices and the other half was to be paid to producers by the Government themselves. This increase in price was to take effect from 27-7-1947. Instructions were issued to the Collectors and revenue officials to ascertain the quantity of rice and paddy lying with procuring agents as also wholesalers at the end of the day's transactions on 26-7-1947 i.e., the stock remaining unsold which had been obtained by them at prices prevailing before the enhancement of price which was to have effect from the next day and to require them to pay over to the Government as 'a surcharge' the enhanced prices at which they were permitted to sell after that date, namely, eight annas per maund of paddy and twelve annas per maund of rice. Demands were made on some of the appellants for the payment of this surcharge. When they failed and neglected to pay surcharge demanded they were threatened, with the cancellation of licences which they held under the Licensing Order and by reason of this threat, it is stated that, they made the payments demanded from them.
(23) A similar and further increase in price was effected in the first week of December, 1947. The increase was Rs. 2.00 per maund of rice and Rs. 1161/- per maund of paddy. The procuring agents, wholesalers and others who had stocks were, by the orders of Government issued on that occasion, directed to disclose the stock of paddy and rice with them as on the evening of 6.12.1947 and in respect of the stock oh that date, they were directed to pay to the Government the surcharge' at the rates specified earlier. Demands were made on this basis on several of the appellants and when they refused to do so, two methods of recovery were adopted in order to enforce the demand. In the case of some of them where there were amounts owing by Government on account of rice supplied under the contract for supply referred to earlier or by reason of the Government having collected the amounts from purchasers who were authorised to lift stocks from the procuring agents, the Government deducted the 'surcharge' from the amounts due by them and paid only the balance. This was one method. The other method was that which had been adopted for the realisation of the 'surcharge" levied in July, 1947, namely, by threatening them with cancellation of their licences to deal in paddy and rice.
(24) BEFORE proceeding further and for the sake of completeness and to avoid having to revert to it later it would be convenient to mention here the ground upon which the surcharge was justified in the G.O. dated 6-12-1947 by which it was imposed. In paragraph 8 after setting out the quantity of rice and paddy on which the surcharge would be levied and collected, the G.O. continued: "Increased prices at the rate of Rs. 2.00 per maund of rice........ will have to be collected as surcharge on the quantity available with the wholesalers and retailers on the evening of 6-12-1947, as directed in Government Memo No...... The collection of this surcharge will be unearned profit to Government. The Government direct that this profit should be utilised to set off the amount recoverable as surcharge,' (25) PAUSING here, it may be pointed out that it appears from the evidence that even with the adoption of these methods the Government were unable to realise the surcharges from every one of the procuring agents or other dealers wholesale and retail on whom these surcharges had been levied. We are mentioning this in order to indicate the change in the methods adopted for the recovery of the surcharge when it was imposed on the next occasion and this was on the 21st of November, 1948. By a G.O. of that date the Government directed the Collectors to levy on all stocks of paddy and rice with the procuring agents, wholesalers and retailers on the evening of 20-11-1948, a further surcharge and recover the same from them. Some of the appellants paid this amount under protest; in the case of others the amount of the surcharge was deducted from the sums payable to them by Government for the supply by them of rice. In the case of certain others the Board of Revenue which had found that there were some merchants who had failed to pay the two earlier surcharges that had been imposed, suggested the adoption of a new method in order to realise the sum. This was that the Collectors should issue orders of requisition of paddy in the possession of these merchants in respect of the quantities which were ascertained as being with them on the 20th of November, 1948, and release the stocks by cancelling the requisition order only on their payment of the surcharges or on their executing at writing agreeing to make the payment. We shall have occasion to refer to the special defence raised by Government in respect of this class of stockholders in the proper place.
(26) WITH this narration we are now in a position to deal with the arguments addressed to us in these appeals. As would be seen from what we have stated earlier, the contention urged by the State of Andhra Pradesh was that the appellants were the agents of the Government and were, therefore, liable to account to them for the profits which they derived over and above the commission or remuneration which was fixed for them by the relevant notification of Government fixing the prices which might be charged. The learned Judge of the High Court were not prepared to accept this submission that the appellants were agents of the Government, but they nevertheless held -that on a proper construction of the Intensive Procurement Order, 1947, read in conjunction with the terms of the notification appointing the several plaintiffs as 'procuring agents' coupled with the agreement which they executed to whose clauses we have already adverted, the plaintiffs were under a fiduciary obligation to Government which was akin to, though not exactly the same as an agency, by reason whereof they were bound to pay over to the Government the extra profit which they had made by the enhancement of the prices effected by the Government on the three occasions. The contention raised on behalf of the plaintiffs that the 'surcharge' was in reality a tax which was illegally levied by executive order was rejected by them.
(28) THE point that has now to be considered is whether the description of the plaintiffs as 'pro-curing agents' and the undertaking by them in the agreements which they executed to purchase the paddy offered, to store them in proper godowns and to sell them at prescribed prices to persons who had obtained requisite permission to purchase rice or paddy, would make them agents of the Government so as to (a) render Government liable to indemnify them for any losses Which they might sustain in the business, and (b) conversely in a situation of immediate relevance, enable the Government to claim any profit made by them over and above the "remuneration" permitted to them.
(35) THE respondent can derive no advantage from the obligation on the part of the procuring agents to store the paddy or rice properly a stipulation on which Mr. Agarwala laid considerable stress-and this for two reasons : (1) The purpose of the clause was to ensure that there was no loss of foodgrains which were then a scarce commodity. That this is so would be apparent from the terms of Section 3(2)(d) of the Essential Supplies Act which was effectuated by Clause 9 of the licence granted under the Madras Food grains Control Order, 1947 which applied to all dealers in food grains, be they procuring agents (who also, as stated earlier had to obtain and obtained these licence;) wholesalers or retailers. This clause reads: "9. The licensee shall comply with any directions that may be given to him by the Government or by the officer issuing this licence in regard to the purchase sale or storage for sale of any of the food grains mentioned in paragraph (1)..... The second reason is that the agreement executed by the procuring agents in which this clause as regards storage in proper godowns and undertaking responsibility for the safe custody of the grain occurs, is one which was a form intended for execution not merely by procuring agents but also authorised wholesale distributors i.e., those who purchased their requirements from procuring agents; admittedly the authorised wholesale dealers were not 'agents' and the fact that this condition was insisted on even in their case is clear proof that it has no relevance to the question now under discussion. It therefore, appears to us that the expression 'agent' was used in the Intensive Procurement Order as well as in the agreements merely as a convenient expression to designate this class of dealers.
(36) BEFORE proceeding further it is necessary to advert to the decision of the High Court of Assam in Bhowrilal Maliesri and Ors. v. State of Assam (1) on which Mr. Agarwala placed considerable reliance in support of this contention regarding agency. The Government of Assam had passed an ad hoc order directing certain food grain dealers to lift certain quantities of food grains from a Government Depot with a view to its being sold to persons nominated in that behalf by the Government. The dealers complied with this direction but when they tried to sell it to the persons nominated by the Government the latter refused to purchase or to accept the goods sold on the ground that the stuff was unfit for human consumption. At the time when the dealers took possession from Government godowns they had paid the price fixed by the Government and they filed a suit for the recovery of the price and the damage suffered by them on foot of indemnity claimable by an agent from a principal. The High Court of Assam upheld their claim and held that an agency had been constituted between the parties under which an obligation had been cast on the Government to make good the lots suffered by the dealer. We do not see how this decision assuming it is correct, on which we pronounce no opinion, bears any resemblance to the case on hand. There the dealers were required by Government to acquire from Government food grains which was Government property on the basis that they would be able to sell the same to purchasers designated. The terms of the contract were that they should pay the value in the first instance and recover it from the purchasers specified by Government. It was in such a situation that an agency was held to arise. The position in the case before us is totally different. By reason of the exercise of statutory power trade in food grains was controlled and placed under a licensing system. No persons could buy or sell rice or paddy exceeding specified limits of quantity unless be held a licence to do so. Dealers were classified into three classes, procuring agents, wholesalers and retailers. We are now concerned with procuring agents. Before the introduction of the licensing system, the millers as part of their business used to purchase paddy from growers, hull them in their mills and sell the rice obtained to wholesalers who in their turn sold to retailers from whom the consumers obtained their requirement. This method of trading and the same trade channels were utilised by the Government for the purpose of exercising control over the acquisition and distribution of foodgrains. In the first instance, the supplies available with producers for procurement was determined by Government so as not to leave with them more than what could reasonably be needed for their use. The producer was required to sell the quantity thus determined so as to make it available to the general public. The quantity having thus been determined the millers were brought under the Control Orders by requiring them to take out licences for purchase or sale of paddy and it is in the context of this method of utilising the trade channels for the purpose of procuring and distributing supplies of essential food grains that the legal relationship between the parties has to be viewed. As pointed out earlier, the agreement executed by procuring agents was in the same form and contained the same stipulations as that executed by 'wholesale authorised distributors'. These wholesale dealers thus undertook the same obligations as procuring agents to purchase, store and distribute paddy and rice in accordance with the licensing orders and the directions issueable under them. Obviously this could not turn the wholesalers into 'agents'. The argument that the procuring agents were agents because they were remunerated by the allowance of a commission in the shape of the margin or difference between the price fixed for procurement and for sale by them has already been dealt with and need not be repeated.
(37) Mr. Agarwala next submitted that assuming that even if he were not right in these contentions that the plaintiffs were the agents of the Government still they were under a fiduciary obligation to Government. Reference was, in this connection, made to Section 88 of the Indian Trusts Act which reads : "Where a trustee, executor, partner, agent, director of a company, legal adviser, or other person bound in a fiduciary character to protect the interests of another person, by availing himself of his character, gains for himself any pecuniary advantage, or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained". The relevance of this provision was explained by saying that even though the plaintiffs might be legal owners of the paddy and rice procured by them, the beneficial interest in these goods vested in Government and that thus the plaintiffs being persons bound in a fiduciary character to protect the interest of Government had obtained a pecuniary advantage by availing themselves of their position. We must plainly confess that we are unable to appreciate this argument. A fiduciary relationship would, no doubt, have arisen if the plaintiffs were agents, but if this were rejected we do not see on the basis of what relationship the fiduciary obligations can be rested. The purchase of paddy and rice by them was not as benamidars for Government, for their purchases were on their own account with their own monies though at prices fixed by the Government because of the control orders; they could sell their good, to others, only the buyers had to be licensed as also to the Government. The control exercised under statutory laws in respect of these matters cannot obviously render the trade of the plaintiffs one which they carried on for the benefit of the Government. If so, we fail to perceive the legal basis upon which the plaintiffs could be said to hold the stocks of grain with them for the benefit of Government. We have already pointed out that all risks of loss, deterioration, interest charges, godown rent etc., were all their responsibility. In the circumstances, we consider there is no basis for the suggestion of a fiduciary obligation de hors a principal and agent relationship.
(38) IT was then said that assuming that the plaintiffs were not agents and that they were the full and absolute owners of paddy and rice with them and which they held on their own account and for their benefit, still the direction to pay the surcharges was a direction which the Government was authorised to issue under the terms of the licence granted to the plaintiffs to deal in the stocks procured by them. For this submission reliance was placed on clause (9) of the Licence under Food grains Licensing Order issued to them which ran: 'The licensee shall comply with any directions that may be given to him by the Government or by the officer issuing this licence in regard to purchase, sale or storage for sale of any of the foodgrains mentioned in paragraph.' It was said that the direction to pay a surcharge was a direction in regard to the sale of the stocks. Further support was sought on a similar clause in the agreement executed by the procuring agents under which they agreed "to abide by all the provisions prescribed from time to time by or under the said scheme or any directions issued thereunder". We do not see any substance in this argument. The direction to pay such amounts as might be demanded by Government is certainly not a direction contemplated or provided for by the scheme, namely, the Procurement Scheme nor is it a direction as regards the sale. Indeed, learned Counsel did not, when this was pointed out, seriously press this submission for our acceptance.
(39) BEFORE proceeding further it would be convenient to ascertain the precise legal category into which the surcharge would fall. The dealers including the procurement agents were dealing on their own account in the matter of purchase and sale of paddy and rice. The price at which they could buy was fixed and the relevant licensing orders specified that they were to sell at the prices which were in force from time to time. While things were in this state, the price at which the procuring agents, wholesalers and others could sell was raised of course, in respect of the stocks purchased by them after that date they would have paid a higher price which would be compensated by the higher price at which they were permitted to sell, but we are concerned with the stocks on-hand already purchased and remaining with them on 26-7-1947, 4-12-1947 and 20-11-1948. Under the Food grains Control Order under which they were licensed to deal in food grains, they were entitled to sell the stocks with them at the prices fixed under the Price Control Order and prevailing on the date of the sale. They would, therefore, have, on an increase in the selling price, the benefit of the enhanced prices. It was this that was sought to be mopped up by Government by the three impugned orders by which the difference between the old and the new prices was directed to be collected as "surcharge".
(40) IT was not suggested that the surcharges could be justified under any of the provisions contained in the Essential Supplies (Temporary Powers) Act. They were not imposed by notified orders promulgated under Section 3 of that enactment and if they were, the question would have to be seriously considered whether such orders would be within the rule making power under that Act. We have already pointed out that they could not be justified as authorised directions which were permitted to be issued either under the Procurement Order, the agreement executed in pursuance thereof or the Food grains Control Order and the licences issued thereunder. That was why the only serious argument that was raised was an attempt to justify them on the ground of the same being a liability to account on behalf, of an agent and this contention we have already negatived as lacking substance. There was thus no legal basis upon which the surcharge could be justified and it would, therefore, follow that subject to any argument based upon the claim being barred by limitation, the claim to the refund of the same could not be resisted."
72. Basing on the observations of the Supreme Court in the above case i.e., Venkata Subbarao's case , it has to be held that the amounts which have been paid to the members of the petitioner's Union by the orders of this Court in WP No. 16558 of 1992 and batch dated 30.8.1996 till the Government took a decision cannot be termed as surcharge.
73. The Supreme Court in the case of B.C. Banerjee v. State of M.P., , has held that no tax, fee or compulsory charge can be imposed by any law, rule or regulation unless the statute under which the subordinate legislation is made specifically authorised the imposition. In the case of Lilasons Breweries Pvt. Ltd. v. State of M.P., , has held that Rule 22 of MP Excise Act permitting to raise demand of additional excise duty to meet the expenses of the officers was held ultra vires. It is pertinent to note the observations of the Supreme Court in the case of Ahmedabad Urban Development Authority v. Sharadkumar, . In the said case, the Apex Court has held that regulations framed under the Gujarat Town Planning and Urban Development Act by the Development Authority for imposing of development fee was held unauthorised and illegal inasmuch as no express provision for imposition of such fee is made in the said Act.
74. The Supreme Court in the above cited decisions has held that there should be some express provision in the Act to impose any tax or development charges or to recover any amount excess paid. In the case on hand, this Court in judgment No. 28473 of 1997 or in WA Nos. 424 and 425 of 1999 has not specifically directed to recover the amounts, which are said to have been paid excessively pursuant to the agreement dated 14.10.1991 and that even the amended Section 116-C did not specifically state to recover the said amounts. In the absence of any provision in the Act, issuing notice by the respondents to recover the amounts, which are said to have been paid pursuant to the agreement dated 14.10.1991 as surcharge as if the Paid Secretaries committed fraud, is, in the opinion of this Court, illegal and improper.
75. The Division Bench of this Court in WP No. 28473 of 1997 dated 12.7.2002 has observed as follows:
"It is not necessary to go into the controversy as to whether the process of allotment of the Paid Secretaries into various societies after the abolition of common cadre has been completed or not.
76. Further, the Division Bench in the above WP No. 28473 of 1997 observed as follows:
"We accordingly hold that the members of the petitioner-Union are not entitled for any pay scales/revised pay-scales on par with Category-V Supervisors of the DCCBs. They cannot equate themselves with any other employees including Category-V Supervisors of the DCCBs. The Paid Secretaries are the employees of the concerned society. The society with the prior approval of the Registrar is empowered and entitled to fix the staffing pattern, qualifications, pay-scales and other allowances for its employees subject to the condition that the expenditure towards pay and allowances of the employees shall not exceed two per cent of the working capital or 30 per cent of the gross profit, in terms of actuals in a year whichever is less."
77. The above judgment was rendered by the Division Bench of this Court on 12.7.2002 declaring that the members of the petitioner union are not entitled to any pay-scales on par with Category V Supervisors of DCCBs and the findings of the Division Bench are in conformity with Section 116-C of the APCS Act, as amended by the Act 22 of 2001, which has come into force from 25.4.2001. I have no hesitation to hold that the Societies have to fix up the salaries in pursuance of the observations made by the Division Bench and in conformity with Section 116-C of the APCS Act as substituted by the Amended Act 22 of 2001 with effect from 25.4.2001. In view of the above observations, it has to be held that the salaries already paid by the Societies cannot be termed as fraud or misrepresentation made by the members of the petitioner's Union and they have been paid the said salaries by virtue of the Memo of the Government dated 14-10-1991. However, the said memo has been cancelled by G.O. Ms. No. 314 dated 26.12.2000. It has to be seen that the Paid Secretaries were directed to be paid the salaries by this Court in WP No. 16558 of 1992 dated 30.8.1996 in terms of Memo of the Government dated 14.10.1991 and hence the same cannot be directed to be recovered by issuing surcharge notices under Section 60 of the APCS Act. Moreover the Government in G.O. Ms. No. 314 dated 26.12.2000 also did not state anything about recoveries.
78. Rule 28 of the APCS Rules, which deals with the officers and Servants of the Society has been substituted by G.O. Ms. No. 37 dated 28.1.2002. As per clause (4) of Rule 28 of the APCS Rules, every society within 45 days of registration shall frame and submit to the Registrar for approval of its staffing pattern. The same shall include the service rules for its employee, specifying staffing pattern which includes the service rules for its employees, staffing pattern, qualifications of its employees, method of appointment, scales of pay and allowances, responsibilities, duties etc. As per clause (4)(b) of the Rule 28 of the APCS Rules, the revision of any of the service rules or pay-scales etc., shall be made by the General Body on the recommendation of the Managing Committee. However, ceiling has been fixed on the staff cost and contingencies that it should be less than 2% of the working capital or less than 30% of the gross profit under intimation to the Registrar of co-operative Societies. The pay-scales of the existing staff also to be furnished to the Registrar. In view of the decisions cited supra, it has to be held that GO Ms. No. 37 came into effect from 28.1.2002. As per the above GO, it does not give any power to the Registrar to revise the pay-scales retrospectively and also it does not empower them to re-fix the pay-scales. A plain reading of Section 116-C of the APCS Act also shows that the Society shall have power to fix the staffing pattern, qualifications, pay-scales and other allowances subject to the condition that the expenditure towards pay and allowances of the employees shall not exceed two per cent of the working capital or thirty per cent of the gross profit, in terms of the actuals in a year whichever is less. Even Section 116-C(1) of the APCS Act does not give right to the Registrar to refix the pay-scales retrospectively.
79. The amended Section 116-C, which came into effect by Act 22 of 2001, was questioned before this Court by the petitioner herein by filing WP No. 28473 of 1997 and the Division Bench of this Court has upheld the above amendment by its judgment dated 12.7.2002. It has also to be further observed that GO Ms. No. 314 dated 26.12.2000 has been suspended by this Court on 2.12.2001 and the said suspension is continued till 16.10.2001 when the Division Bench by its judgment dated 16.10.2001 held that the Memo dated 14.10.1991 was void and inoperative. In view of the observations made by the Division Bench in WA Nos.424 and 425 of 2001 and batch, the pay-scales which have already been paid by virtue of the orders of this Court cannot be recovered as surcharge and hence the Secretaries are not liable for any surcharge proceedings issued under Section 60 of the APCS Act and the Societies are not liable to recover the salaries which have already been paid to them pursuant to the Memo dated 14.10.1991 of the Government.
80. The learned Additional Advocate-General on the other hand strenuously submits that the petitioner's Union aggrieved by the judgment in WA Nos.424 and 425 of 2001 preferred SLP No. 656 of 1998 before the Apex Court and the Apex Court has dismissed the same on 21.1.2002 at the admission stage. It is also submitted by the learned Additional Advocate-General that in the said SLP, the petitioner's Union raised a plea that the respondents may be directed not to recover the salaries. Thus, it is contended by the learned Additional Advocate-General that as the SLP has been dismissed by the Apex Court at the time of admission, it amounts that the plea raised by the petitioner's Union not to recover the salaries which are said to have been paid excessively pursuant to the Memo dated 14.10.1991 has also been rejected by the Apex Court.
81 The above contention has to be examined with reference to the law laid by the Apex Court that doctrine of precedent under Article 141 of the Constitution of India does not apply to an order rejecting the SLP. The following case law supports the above proposition.
1. Hari Singh v. State of Haryana, .
82. In the case of Hari Singh (supra), the Apex Court observed as follows with regard to the effect of admitting and rejection of the SLP:
"Article 136(1) confers overriding and extensive powers of granting special leave to appeal or rejection thereof in the discretion of the Supreme Court. Article 136 does not confer a right to appeal, it confers only a right to apply for special leave to appeal, which taking all facts and circumstances into consideration may be granted or rejected. Even in a case where special leave application is rejected, the order of the High Court does not merge in the order of the Supreme Court, as is the case while exercising the appellate power. Similarly when special leave petition is entertained against any final or interlocutory order, the Supreme Court does not convert itself into a Court of appeal."
83. The Supreme Court in a recent judgment in the case of Kunhayammed v. State of Kerala, , has observed that exercise of jurisdiction by the Apex Court under Article 136 of the Constitution of India is in two stages i.e., grant of leave and hearing of appeal and the refusal to grant leave does not mean that the order impugned is affirmed. The observations of the Apex Court in this regard are extracted below for ready reference:
"The exercise of jurisdiction conferred on Supreme Court by Article 136 of the Constitution consists of two steps: (i) granting special leave to appeal; and (ii) hearing the appeal. The distinction is clearly demonstrated by the provisions of Order XVI of the Supreme Court Rules framed in exercise of , the power conferred by Article 145 of the Constitution. Thus, a petition seeking grant of special leave to appeal and the appeal itself, though both dealt with by Article 136 of the Constitution, are two clearly distinct stages. The legal position which emerges is as under:
1. While hearing the petition for special leave to appeal, the Court is called upon to see whether the petitioner should be granted such leave or not. While hearing such petition, the Court is not exercising its appellate jurisdiction; it is merely exercising its discretionary jurisdiction to grant or not to grant leave to appeal. The petitioner is still outside the gate of entry though aspiring to enter the appellate arena of Supreme Court. Whether he enters or not would depend on the fate of his petition for special leave.
2. If the petition seeking grant of leave to appeal is dismissed, it is an expression of opinion by the Court that a case for invoking appellate jurisdiction of the Court was not made out;
3. If leave to appeal is granted the appellate jurisdiction of the Court stands invoked; the gate of entry in appellate arena is opened. The petitioner is in and the respondent may also be called upon to face him, though in an appropriate case, in spite of having granted leave to appeal, the Court may dismiss the appeal without noticing the respondent.
4. Inspite of petition for special leave to appeal having been filed the judgment decree or order against which leave to appeal has been sought for, continues to be final, effective and binding as between the parties. Once leave to appeal has been granted, the finality of the judgment, decree or order appealed against is put in jeopardy though it continues to be binding and effective between the parties unless it is a nullity or unless the Court may pass a specific order staying or suspending the operation or execution of the judgment, decree or order under challenge.
Further, the Supreme Court made the following observations;
"The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme Court can be reversed or modified only after granting leave to appeal and then assuming appellate jurisdiction over it. If the order impugned before the Supreme Court cannot be reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage"
84. In view of the above observations of the Apex Court, it has to be held that the contention of the learned Additional Advocate-General that the Supreme Court has confirmed the judgment of this Court in WA Nos.424 and 425 of 2001 has no force.
85. Further, in view of the findings at paras, 66 and 67, the agreement dated 14.10.2001 is void and inoperative only from 16.10.2001 i.e., from the date of judgment in W.A. Nos.424 and 425 of 2001 and batch.
86. In this connection, it is relevant to submit that in the WA Nos.424 and 425 of 2001, the respondents did not seek any consequential relief of recovery of the amount said to have been paid excessively and the Division Bench in the judgment in the above WAs did not direct to recover the same from the members of the petitioner's Union. As the Division Bench has not granted any consequential relief for recovery of the money, it cannot be said that the Societies have got power to recover the same by terming it as surcharge. In the absence of such consequential relief, the Societies have no power whatsoever to recover the salaries of the members of the petitioner's Union by issuing surcharge notices from 16.10.2001 i.e., the date of judgment in WA Nos.424 and 425 of 2001.
87. The Supreme Court in the case of State of Madhya Pradesh v. Bhailal Bhai, , has held that the High Court under Article 226 of the Constitution of India can grant consequential relief. But, in the case on hand, this Court did not grant any consequential relief of recoveries from the Paid Secretaries in any of the judgments of the Division Bench i.e., WA Nos.424 and 425 of 2001 dated 16.10.2001 and WP No. 28473 of 2001 dated 12.7.2001, much less the respondents did not seek the relief to recover the amounts which are "said to have been paid excessively.
88. It is relevant to note that Section 116-C of the APCS Act has been amended by virtue of Act 22 of 2001, which came into force from 25.4.2001. The Division Bench has upheld the validity of the Act 22 of 2001 by its judgment-dated 12.7.2002 in WP No. 28473 of 1997. The Division Bench while upholding the amendment brought to Section 116-C of APCS Act did not order the recoveries though it was held that the members of the petitioner's Union are not entitled for salaries of Category V Supervisors of DCC Banks.
89. In the absence of any consequential relief sought by the respondents in WA Nos. 424 and 425 of 2001 and in WP No. 28473 of 1997, the respondents have no power whatsoever to recover the salaries said to have been paid excessively under the guise of surcharge prior to 16.10.2001 as held in para 72, on which date this Court has declared the Memo dated 14.10.1991 as void and inoperative arid also in the absence of any specific direction in G.O. Ms. No. 314 dated 26.12.2000 by the State Government with regard to recoveries of the salaries already paid to the members of the petitioner's Union.
90. As observed above, the members of the petitioner's Union were paid salaries pursuant to the agreement entered between the Government and the petitioner's Union dated 14.10.1991 and also in pursuance of the Division Bench judgment in WP Nos. 16558 of 1992 and batch dated 30.8.1996. Thus, there is no fraud or misrepresentation on the part of the members of the petitioner's Union in drawing the salaries which the respondents now terming it as having been paid excessively and hence the same cannot be recovered from the members of the petitioner's Union by way of surcharge.
91. In this connection, it is relevant to note the observations of the Supreme Court in the case of Sahib Ram v. State of Haryana, 1994 (5) SLR 753. In the said case, the Apex Court has observed that if any mis-representation or fraud played by the employee in drawing the excess salaries has not been proved, the so called excess amount, if any paid, shall not be recovered from the persons to whom the excess salary has been paid.
92. In the case on hand, it is not the case of the respondents that the members of the petitioner's Union have drawn the salaries excessively by way of fraud or mis-representation. Moreover, the members of the petitioner's Union have been paid salaries pursuant to the Memo dated 14.10.1991 and also in pursuance of the Division Bench judgment in WP Nos. 16558 of 1992 and batch dated 30.8.1996 and also in view of the fact that the Memo dated 14.10.1991 was cancelled by the State Government only on 26.12.2000 in G.O. Ms. No. 314, which was upheld by this Court in WA Nos.424 and 425 of 2001 and batch on 16.10.2001 and hence the salaries so paid them cannot be recovered even on this ground also.
93. Under the above circumstances, it has to be held that the Memo dated 14-10-1991 is void and inoperative only from the date of judgment in WA Nos.424 and 425 of 2001 and batch dated 16-10-2001 and therefore the respondents have no right to recover the salaries paid to the members of the petitioner's Union pursuant to the said Memo dated 14-104991 till 16-10-2001.
94. For the reasons recorded from paragraph 41 onwards and as observed above, this writ petition is accordingly allowed. No costs.