Kerala High Court
Jayasree M vs The State Of Kerala on 12 October, 2020
Author: Amit Rawal
Bench: Amit Rawal
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE AMIT RAWAL
MONDAY, THE 12TH DAY OF OCTOBER 2020 / 20TH ASWINA, 1942
WP(C).No.19568 OF 2020(U)
PETITIONER/S:
1 JAYASREE M.
AGED 51 YEARS
SENIOR MANAGER ( UNDER ORDERS OF TRANSFER HEAD OFFICE
BRANCH, KERALA STATE CO-OPERATIVE BANK,
THIRUVANANTHAPURAM- RESIDING AT TC 6/347 (5),
KRISHNASREE, KARIMONKULAM ROAD, VATTIYOORKAVU P.O.,
THIRUVANANTHAPURAM
2 BINDU.S.
SENIOR MANAGER ( UNDER ORDERS OF TRANSFER) PEROORKADA
BRANCH, KERALA STATE CO-OPERATIVE BANK,
THIRUVANANTHAPURAM- RESIDING AT TC
18/1114(1),KRISHNENDU, THIRUMALA P.O.,
THIRUVANANTHAPURAM
3 ANJALI.S.KUMARY
SENIOR MANAGER ( UNDER ORDERS OF TRANSFER) MEDICAL
COLLEGE BRANCH, KERALA STATE CO-OPERATIVE BANK,
THIRUVANANTHAPURAM- RESIDING AT PALLITHAZHAYIL HOUSE,
PADA NORTH, KARUNAGAPPALLY P./O.,KOLLAM
BY ADVS.
SRI.GEORGE POONTHOTTAM (SR.)
SRI.ARUN CHANDRAN
SMT.NISHA GEORGE
RESPONDENT/S:
1 THE STATE OF KERALA
DEPARTMENT OF CO-OPERATION, SECRETARIAT, MAIN BLOCK,
THIRUVANANTHAPURAM-695 001, REPRESENTED BY ITS
SECRETARY
2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES,
JAWAHAR SAHAKARANA BHAVAN, DPI JUNCTION, THYCAUD
P.O., THIRUVANANTHAPURAM-695 014
3 THE KERALA STATE CO-OPERATIVE BANK LTD.,
REPRESENTED BY CHIEF EXECUTIVE OFFICE, CO BANK
TOWERS, THIRUVANANTHAPURAM-695 001
WP(C).No.19568 OF 2020(U) 2
4 THE CHIEF GENERAL MANAGER,
THE KERALA STATE CO-OPERATIVE BANK LTD., HEAD
OFFICE, CO-BANK TOWERS, THIRUVANANTHAPURAM-695 N001
OTHER PRESENT:
SR GP SRI MOHAMMED HASHIM , SRI GILBERT GEORGE
CORREYA SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12-
10-2020, ALONG WITH WP(C).19167/2020(U), WP(C).19295/2020(J),
THE COURT ON 12-10-2020 DELIVERED THE FOLLOWING:
WP(C).No.19568 OF 2020(U) 3
JUDGMENT
Dated this the 12th day of October 2020 Petitioners, 3 in number, employees of the respondent No.3, ie., Kerala State Co-operative bank Ltd., Co-Bank Towers, Thiruvananthapuram, through the instant writ petition have challenged, the order Ext.P14 dated 17.9.2020 whereby they have been transferred and posted from Head Office Branch, KSCB to Senior Manager, Pallimukku Branch, Kollam (Petitioner No.1), Peroorkada Branch, KSCB, Thiruvananthapuram to Senior Manager, Kilikolloor Branch, Kollam (Petitioner No.2) and Medical College Branch, KSCB, Thiruvananthapuram to Branch Manager, M&E Puthenchantha Branch, Thiruvananthapuram (Petitioner No.3) with a further prayer for directing the respondents to permit the petitioners to continue to work at the same place where they are presently posted.
2. In support of the aforementioned prayer, it has WP(C).No.19568 OF 2020(U) 4 been averred that credit structure in the State was initially three layered. The Bank was defined under Section 2(rb) of the Kerala Co-operative Societies Act ('Act' for short) as the apex society having only District Co-operative Banks (DCBs) as its members. DCB's on the other hand were defined as a 'central society' the principal object of which was to raise funds to be lent to its members and individuals with jurisdiction over one revenue district. Service conditions of the employees of the Bank were governed by Kerala State Co-operative Bank Staff Regulations. Establishment of the Bank was broadly divided into four categories; Officer Grade, Senior Grade, Junior Grade and Subordinate staff. The powers and responsibilities of the officers of the Bank have been delineated in its bye laws, Ext.P1.
3. Recruitment to the services of the Bank were taken over by the Kerala Public Service Commission ('KPSC') pursuant to the introduction of Section 80 (3A) to the Act. By this amendment, appointment to co-operative societies included in Schedule I of the Act were to be made from the select list furnished by the KPSC. The WP(C).No.19568 OF 2020(U) 5 Government, ostensibly to remove costs in providing credit, sought to remove the DCBs from the credit layering structure, caused amendment in the Act by introducing chapter X C inserting Section 74 H, whereby, the Registrar has been empowered to amalgamate DCBs with the Kerala State Co-operative Bank on the basis of the resolution passed by the DCBs in accordance with Section 14A of the Act. Section 74 H (4) also made it clear that on and from the date of amalgamation, the transferor Banks would cease to exist with its registration cancelled. Provisions were also made for the constitution of an Interim Board, who under the terms of clause (7) thereof were to take necessary steps to complete the amalgamation process and to conduct election to the Board of Directors.
4. Learned counsel for the petitioner submits that the constitutional validity of the Section 14A and 74H was challenged before this Hon'ble Court in W.P.(C) No. 6512/2019 and connected cases. All the writ petitions were dismissed by judgment dated 29.11.2019, reported as Abdulrahiman P and Ors. Vs. State of Kerala and Others (2020 (1) KHC 507). Vide Ext.P5 dated WP(C).No.19568 OF 2020(U) 6 3.10.2018, Reserve Bank of India accorded in principle approval to the proposal of the Government to amalgamate thirteen(13) DCBs with Kerala State Co-operative Bank by fulfillment of certain conditions as enumerated therein. One of the condition was that the Bank 'must get their technology in place for smooth transfer of services to existing clients with carefully configured software to enable the system integration with all DCBs (Condition No.xi).
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5. However, vide letter dated 7 October 2019, Reserve Bank of India communicated to the Chief Secretary of Government of Kerala on the subject of de- layering of short term Co-operative Credit Structure (STCCS) - Amalgamation of DCBs in Kerala State Co- operative Bank Ltd., by imposing certain conditions. In consultation with NABARD , it was decided to accord final approval to the proposal of the Government of Kerala to amalgamate 13 DCBs in Kerala that have approved the Scheme of Amalgamation (SOA) at least by a simple majority in their General Body Meeting. However, the said WP(C).No.19568 OF 2020(U) 7 approval shall be contingent subject to the outcome Court verdict wherein the validity of the amendment made to the provisions of Section 14A of the Kerala Co-operative Societies Act, was challenged. The approval was also subject to certain conditions. By referring to condition No.V and VI, it was submitted that the approval shall be valid for a period of six months till March 31, 2020. Thereafter, the Government of Kerala would submit a status report through NABARD to Reserve Bank. The conditions enumerated in the previous letter, particularly No.X , XI, XIII and XV were required to be complied with.
6. Registrar of Co-operative Society by proceedings dated 29.11.2019 brought the scheme for the transfer of assets and liabilities of DCBs to KSCB in force. On amalgamation, all the assets and liabilities of the said 13 DCBs as they stood immediately before the transfer, shall without any further act, instrument, or deed, shall stand transferred to and vested with the KSCB. The, shares, held by the members of the DCBs (transferor banks) shall be deemed to be the shares of the KSCB (transferee bank) as such. The administrators appointed were ceased to WP(C).No.19568 OF 2020(U) 8 exist. The scheme of amalgamation was also enclosed wherein as per sub clause iv of clause 6, Government will make a scheme for cadre integration, seniority, promotion, transfer, service conditions and such other matters related to the employees of the Transferor Bank and the Transferee Bank in the service of the Transferee Bank. By laying emphasis aforementioned clause, Learned Senior counsel submited that the process of framing of the scheme is still under consideration and in the absence of the same the impugned transfer order is vitiated in law being irrational and fallacious. Government of Kerala vide notification dated 16.7.2020 inserted Chapter IIIA to the Rules. Rule 28A(5) of the Kerala Co-operative Societies Rules empowered the Government to make changes in the recruitment rules, staff regulations, promotion policy and other establishment matters of the Bank. The aforementioned draft notification also invited suggestions or objections but no such suggestions and objections were made and ultimately, the aforementioned section was approved.
7. On the other hand, learned counsel appearing on WP(C).No.19568 OF 2020(U) 9 behalf of the respondent submits that once the scheme has been accepted on account of approval granted by the RBI and the Government, the petitioners have no grievance to challenge their place of posting as there is no District Co- operative Bank is in existence. Even the Administrators appointed during the interregnum also ceased to exist. The order of transfer do not envisage any demotion or change of cadre as the pay has been protected. Through the instant writ petition an attempt is made to bring up the issue of constitutional validity which has already attained finality, which should not be permitted to go unnoticed. Government is under the process of framing the Rules regarding the service conditions, regulations etc. By concluding his argument it was submitted that, in fact, no cause of action accrued in favour of the petitioner to file the writ petition.
8. I have heard the learned counsel for the parties and appraised the paper book. The scheme of amalgamation accompanied by the proceedings of the Registrar of Co-operative Societies specifically provided that the Government shall make scheme for cadre WP(C).No.19568 OF 2020(U) 10 integration. Sub clause IV of 6 of Ext.P7, Scheme of amalgamation reads as under:
"iv. The Government will make a scheme for cadre integration, seniority, promotion, transfer, service conditions and such other matters related to the employees of the Transferor Bank and the Transferee Bank in the service of the Transferee Bank."
9. Vide Ext.P9, Government proposed to constitute a committee to address the grievances of employees if any after integration by defining six posts of General Managers for the Head office, one post of Chief General Manager and similarly Managing Director. With regard to other officers also, similar designations have been allocated. But the fact of the matter is by introduction of Sub Rule 5 of Rule 28A of the Kerala Co-operative Societies Rules, 1969, the Government by notification is required make changes regarding recruitment, rules, staff regulations, promotions and the process is still under way.
10. Sub Rule 5 of Section 28A of Kerala Co-
operative Societies Rules reads thus:
"28A. Special provisions in respect of the Kerala WP(C).No.19568 OF 2020(U) 11 State Co-operative Bank (1.1) xxxxx (1.2) xxxxx (1.3) xxxxx (1.4) xxxxx (1.5) Government shall by notification in the official Gazette make changes in recruitment rules, staff regulations, promotion policy and all other establishment matters of the Kerala State Co-operative bank, in consultation with the Kerala Public Service Commission, based on the proposals from Registrar of Co-operative Societies from time to time.
It is not in dispute that the Government has so far not framed any rules and regulations qua recruitment/promotion policy in respect of the establishment matters of KSCB in consultation with Kerala Public Service Commission. In the absence of the same, the impugned orders of transfer in my view, even if it amounts to same cadre ought not to have taken place as on amalgamation of DCBs; all the assets and liabilities of transferor banks would that be of the transferee bank and they would be discharging same duties till finalization by Government through notification.
As an upshot of my findings the impugned order Ext.P14, to the extent it relates to petitioners is ordered to WP(C).No.19568 OF 2020(U) 12 be kept in abeyance and shall not be given effect until and unless the Government in letter and spirit adheres to the approval of scheme and provisions of sub Rule (5) of Rule 28A, in accordance with law. The writ petition stands allowed in the aforementioned terms.
Sd/-
AMIT RAWAL
sab JUDGE
WP(C).No.19568 OF 2020(U) 13
APPENDIX OF WP(C) 19568/2020
PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE RELEVANT PORTION OF
THE KERALA STATE CO-OPERATIVE BANK
STAFF REGULATIONS
EXHIBIT P2 TRUE COPY OF THE RECRUITMENT RULES FOR
THE KERALA STATE CO-OPERATIVE BANK
LTD., THIRUVANANTHAPURAM
EXHIBIT P3 TRUE COPY OF THE RELEVANT PORTIONS PAY
REVISION ORDER BEARING G.O(MS)
NO.51/2015/CO-OP DATED 31.03.2015
EXHIBIT P4 TRUE COPY OF THE RELEVANT PORTIONS PAY
REVISION ORDER BEARING G.O(MS)
NO.61/2015/CO.OP DATED 04.05.2015
EXHIBIT P4A TRUE COPY OF THE G.O(MS) NO.76/2015/CO-
OP DATED 09.06.2015
EXHIBIT P5 TRUE COPY OF THE COMMUNICATION
NO.DCBR.CO.RCBD NO.1007/19.51.007/2018- 19 DATED 03.10.2018 ISSUED BY THE RESERVE BANK OF INDIA EXHIBIT P6 TRUE COPY OF THE COMMUNICATION NO.DCBR.CO.RCBD NO.1007/19.51.007/2019- 20 DATED 17.10.2019 ISSUED BY THE RESERVE BANK OF INDIA EXHIBIT P7 TRUE COPY OF THE PROCEEDINGS OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES BEARING NO.CB(5) 784/2019 DATED 29.11.2019 EXHIBIT P8 TRUE COPY OF THE REPLY/COMMUNICATION DATED 15.07.2020 ISSUED BY THE RESERVE BANK OF INDIA EXHIBIT P9 TRUE COPY OF THE DOCUMENT STYLED AS CADRE INTEGRATION EXHIBIT P10 TRUE COPY OF THE PROCEEDINGS REF NO.KSCB/P & E/PD/II/ORGANIZATIONAL STRUCTURE /348/2020-21 DATED 21.05.2020 ISSUED BY RESPONDENT NO.3 WP(C).No.19568 OF 2020(U) 14 EXHIBIT P11 TRUE COPY OF THE GAZETEE NOTIFICATION NO.1698 DATED 16.07.2020 EXHIBIT P12 TRUE COPY OF THE MEMORANDUM REF NO.PO & E/PD/II/T & P7/3488/2018-19 DATED 14.02.2019 ISSUED BY THE MANAGING DIRECTOR OF RESPONDENT NO.3 EXHIBIT P13 TRUE COPY OF THE MEMORANDUM REF NO.P & E/PD/II/T &P/719/2018-19 DATED 21.05.2018 ISSUED BY THE MANAGING DIRECTOR OF RESPONDENT NO.3 EXHIBIT P14 TRUE COPY OF THE MEMORANDUM NO.KSCB/HR/PD/II/T & P/7/1692/2020-21 DATED 17.09.2020 ISSUED BY THE 4TH RESPONDENT WP(C).No.19568 OF 2020(U) 15