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A classic case of the "fence eating the crop" which reveals what ails our State owned bodies. The 2nd respondent, Kerala State Co-operative Federation for Fisheries Development Ltd. [for brevity "Matsyafed"], is a Co-operative Society, which is a State Level Apex Society, having as its members the Primary Fishermen Welfare Societies within the State. Initially the State had formed a Corporation, by name "Kerala Fisheries Corporation Ltd.", to take over the activities, till then run by the Fisheries Department of the Government of Kerala. Recurring losses landed the Corporation in trouble, which necessitated all the loss making major units of the Fisheries Corporation to be transferred back to the Department. The Fishermen's Welfare Societies constituted under the Kerala Fishermen Welfare Societies Act, 1980 also suffered a similar fate on account of lack of sufficient finance. Matsyafed was constituted in the year 1984, so as to facilitate financing from the National Financial Institutions and took over the Corporation and the co-operative organizations in the fisheries sector. Matsyafed too is said to be reeling under financial travails, one of the reasons for which, is decipherable from the facts of the instant case.

3. It would be appropriate first to look into the facts of O.P.No.32511 of 2002. The petitioners in the said writ petition were selected as Assistant Secretaries by direct recruitment after conducting a competitive examination and interview by the Institute of Management in Government. All the petitioners were employees of the Department of Fisheries and their appointment to Matsyafed was on deputation basis, on usual terms and conditions governing deputation to foreign service. Later, on exercising an option to get absorbed in Matsyafed, their lien in the Fisheries Department was terminated and they were absorbed as Assistant Secretaries, in the service of the Matsyafed, as is evident from Exhibit P2. Their initial appointment to the post of Assistant Secretary was immediately after the constitution of the Matsyafed in 1984 and their absorption was in May and June,1990, as is seen from Exhibit P2.

12. Admittedly the 2nd respondent, Matsyafed, is reeling under accumulated losses; and the Government and the Matsyafed have filed counter affidavits resisting the claim for pay parity. What is essentially sought for is a "peg" to hang the "cloak" of responsibility. This Court should not act in convenience to the parties and an illegality definitely has to be looked at in the perspective of the larger interest of the State as also the public generally and particularly the fishermen; for whose welfare the Matsyafed is said to be constituted. Definitely the constitution of Matsyafed, in the co-operative sector is not to enable livelihood to its employees and its functions cannot also be reduced to, provision of periodic pay-revisions in tune with the rising price index. An illegality cannot be perpetrated merely for reason of a mistake having been committed in revising the pay scales of admitted juniors; by conferring the very same benefit to admitted seniors.

29. Hence, the power exercised by the Supreme Court to interdict recovery, in the other two cases, was declared as one invoked under Article 141 of the Constitution of India. In such circumstance, it may not be proper for this Court to interdict recovery, having found that the revision of scales of pay granted to the Junior Executives (Marketing) were not in accordance with the revised pay scales nor in accordance with the recommendation of the Matsyafed. However, the Matsyafed would be entitled to pass orders deferring the refund to a period by granting easy instalments in repaying the excess amounts directed to be refunded. The Government shall pass orders in accordance with this judgment within two months from today and the Matsyafed within a month thereafter, fixing the pay scale of the Junior Executives (Marketing), as indicated herein.