IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 22352 of 2010(T)
1. MOHANDAS M.K., JUNIOR ACCOUNTANT,
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED BY THE
... Respondent
2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES,
3. THE KOTTAYAM DISTRICT CO-OPERATIVE
4. JOY JOSEPH, SENIOR ACCOUNTANT,
5. THE KOLLAM DISTRICT CO-OPERATIVE
6. TENSY SCARIA, SENIOR ACCOUNTANT,
For Petitioner :SRI.P.RAMAKRISHNAN
For Respondent :SMT.AYSHA YOUSEFF,SC,KOLLM DISTRICT CO-
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :16/08/2010
O R D E R
K.SURENDRA MOHAN, J
...........................................
WP(C).Nos.22352 & 22888 OF 2010
............................................
DATED THIS THE 16TH DAY OF AUGUST, 2010
JUDGMENT
`C R’
Are mutual transfers permissible between two different District
Co-operative Banks ? This is the question that arises for determination
in these writ petitions.
2. Both these writ petitions challenge the transfer granted
mutually to an employee of the Kottayam District Co-operative Bank
Ltd and an employee of the Kollam District Co-operative Bank Ltd.
The proceedings are attacked as unsustainable in law and liable to be
set aside. The service regulations that permit such transfer are also
assailed as being violative of the provisions of the Kerala Co-operative
Societies Act, 1969 (`the Act’ for short) and the Rules thereunder.
Since the issues that arise for consideration are common, these writ
petitions are considered and disposed of by this common judgment.
The short facts necessary for the purpose are summarised hereunder.
3. The petitioner in WP(C)No.22352 of 2010 is working as a
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Junior Accountant in the third respondent Bank, viz, the Kottayam
District Co-operative Bank Ltd. He joined service as a Clerk/Cashier
on 14.7.1995. He was sanctioned the grade of a Junior Accountant on
17.4.2005 and was promoted to the post on 22.12.2007.
4. The fourth respondent Sri Joy Joseph, had joined service as a
Clerk/Cashier in the Kollam District Co-operative Bank only on
21.2.2001 that is, six years after the appointment of the petitioner.
However, he was promoted as a Junior Accountant on 7.3.2005 and as
a Senior Accountant on 12.2.2009.
5. While so, the 6th respondent, Smt.Tensy Scaria and Sri Joy
Joseph submitted a joint application for mutual transfer among
themselves. The request was considered by the Board of Directors of
the Kottayam District Co-operative Bank and a resolution was passed
to the effect that the Bank does not have any objection to the mutual
transfer and also resolved to post the 4th respondent, Sri Joy Joseph as
the junior-most Senior Accountant in the Bank. Since the transfer and
posting could be permitted only with the consent of the Registrar of
Co-operative Societies, such consent was also sought for. The Board of
Wpc 22352 & 22888/10 3
Directors of the Kollam District Co-operative Bank also resolved to
permit the transfer that was sought for. In the above circumstances, the
petitioner in WP(C)No.22352 of 2010 filed WP(C) No.16741 of 2010,
challenging the resolution of the Kottayam District Co-operative Bank.
The writ petition was disposed of by this court as per judgment dated
1.6.2010, Ext.P10 in WP(C)No.22352 of 2010, directing the Registrar
of Co-operative Societies to consider the grievance of the petitioner
also while passing orders in the matter. Pursuant to Ext.P10 judgment,
the matter was considered by the Registrar and Ext.P12 order has been
passed, which is the order under challenge in both these writ petitions.
A copy of the said order has been produced in WP(C)No.22888 of
2010 also, marked as Ext.P1. Pursuant to the impugned order,
Smt.Tensy Scaria and Sri Joy Joseph have been relieved, but they have
not been able to join duty in the respective posts to which they have
been transferred, because an interim order of “status quo”issued by
this Court is in force. Therefore, it is submitted that a break in service
would be the consequence, unless appropriate orders regarding the
manner in which their period of absence is to be treated, are issued in
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these proceedings.
6. The petitioners in WP(C)No.22888 of 2010 are also persons
who are working as Junior Accountants in the Kottayam District Co-
operative Bank Ltd. They too claim to be persons who were recruited
along with Smt.Tensy Scaria and Sri Joy Joseph. However, the said
persons have been promoted over them. In the above writ petition also,
identical contentions as in the other writ petition are raised. For the
sake of convenience, the documents are referred to hereinafter, in the
order in which they are marked as exhibits in WP(C)No.22352 of 2010,
unless specifically referred to otherwise.
7. Separate counter affidavits have been filed by respondents 4,
5 and 6, opposing the prayers in the writ petition. According to the
respondents, the petitioners are not at all persons who come within the
scope of the expression, `persons aggrieved’ so as to entitle them to
challenge Ext.P12 proceedings. It is pointed out that the petitioners in
both these cases are only Junior Accountants whereas the mutual
transfer is effected to the higher post of Senior Accountant. Therefore,
they have not suffered any injury by virtue of such transfer. Further, it
Wpc 22352 & 22888/10 5
is pointed out that since the Rules permit mutual transfer, the same is
not liable to be interfered with. No chances of promotion of the
petitioners would be affected for the reason that the person who has
been transferred to Kollam, viz Tensy Scaria, is younger than Sri Joy
Joseph. Therefore, since Joy Joseph would retire on a date earlier to
that of Smt Tensy Scaria, it is pointed out that no prejudice is caused
to the petitioners. On the contrary, the retirement of Sri.Joy Joseph on
an earlier date would provide more opportunities for promotion to the
juniors. In view of the fact that Ext.P12 has been issued in due
compliance with all the procedural requirements that are stipulated by
the service regulations, it is submitted that, Ext.P12 suffers from no
infirmity whatsoever.
8. According to Sri.P.Ramakrishnan, counsel for the petitioner
in WP(C)No.22352 of 2010, Section 80(3) of the Kerala Co-operative
Societies Act (`the Act’ for short), provides that the service conditions
of the employees of the third respondent Bank are to be governed by
the Rules made in consultation with the State Co-operative Union.
However, no rules have been so framed. Instead, the Government have
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issued Ext.P1 Service Regulations. Ext.P1 has been amended by Ext.P2
dated 18.12.1989, incorporating Clause 11 B(2)(c) providing that inter
bank transfer of employees of the same category of posts may be made
if mutually agreed upon by the Board of Directors of the respective
Banks. Later on, sub-section 3A to Section 80 of the Act was
introduced by which, it is provided that all appointments of officers to
the District Co-operative Banks for which direct recruitment is resorted
to, is to be made from a select list to be furnished by the Kerala Public
Service Commission(KPSC). Pursuant to the above, the KPSC
initiated steps for conducting selection to the post of Clerk/Cashier in
various District Co-operative Banks. In order to facilitate such
selection, model regulations were framed by the KPSC, which is
Ext.P3. In the meanwhile, the Government issued an order dated
26.2.2008 amending clause 11 B(2)(c) of Ext.P1 providing for inter
bank transfer where the same is mutually agreed upon by the Board of
Directors of the respective Banks, provided that the person so
transferred would be the junior most in the category in which he/she
joins, and that the basic pay drawn by the said employee in the Bank
Wpc 22352 & 22888/10 7
shall be protected by the Bank to which he/she is transferred. It is also
provided that the transfer should be in consultation with the KPSC and
that the Bank from which such transfer is made should report the
resultant vacancy to the KPSC for fresh advice.
9. On the basis of the above directions, it is contended that there
is no provision for a mutual transfer, since the provisions referred to
above speak only of transfer of an individual employee and for
reporting of the resultant vacancy to the KPSC. When a mutual transfer
is granted, there cannot be any resultant vacancy, and therefore it is
contended that such a mode of transfer is not envisaged by the Rules. It
is also contended that since the mode of recruitment to the post of
Senior Accountant is by promotion, by permitting mutual transfer, a
mode of appointment not contemplated by the Rules is being resorted
to, without any statutory authorisation. For the above reason, it is
contended that Ext.P12 is liable to be set aside. It is further pointed out
that the person who has been transferred to the Kottayam District Co-
operative Bank, being a person who has become senior to the
petitioners taking advantage of the better promotional avenues
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available in his parent Bank, would now be placed above the
petitioners resulting in loss of avenues of promotion to them. Yet
another contention raised on behalf of the petitioners is that since what
is contemplated is that the person who gets the benefit of the transfer
should be permitted to join duty only as the junior most in the category
in which he/she joins, the fourth respondent should be permitted to join
only as the junior most in the category of Accountants and not as the
junior most Senior Accountant. Reliance is also placed on Ext.P8
communication issued by the Joint Registrar of Co-operative Societies
to the effect that the question of finalising the norms regarding the
Service Regulations permitting inter district transfers of employees
was only under consideration. Since Ext.P8 is issued after the issue of
Ext.P4 Government order, it is contended that the issue is still alive and
pending consideration of the authorities. It is also contended that
Ext.P12 is not permissible in law for the reason that no provision of
law enables the issue of such an order.
10. Mr.Ashok Shenoy, who appears for the petitioner in WP(C)
No.22888 of 2010, raises an additional contention to the effect that the
Wpc 22352 & 22888/10 9
amendments to the Service Regulations themselves are ultra vires the
Act and the Rules. According to the counsel, Section 80(3) of the Act
confers power on the Government to make Rules in consultation with
the State Co-operative Union, regulating the qualification,
remuneration, allowances and other conditions of service of the officers
and servants of the different classes of societies. Section 109 confers a
general power on the Government to make Rules for carrying out the
purposes of the Act. In exercise of the above powers, the Kerala Co-
operative Service Rules have been framed. Particular reliance is placed
on Rule 182(3) which provides that the Committee shall appoint
employees from the select list of candidates furnished by the KPSC. As
per Sub rule 5 of the said rule, with respect to societies and posts not
governed by Section 80(3A) and Section 80 B of the Act, appointments
shall be made by the Committee after conducting a written test and
interview as per the guidelines issued by the Registrar. As per Rule
185(1), appointments to the categories of posts in a society other than
those mentioned in sub rules 2, 3 and 4 thereof shall be made by
promotion on the basis of seniority in the feeder category. The posts
Wpc 22352 & 22888/10 10
mentioned in sub rules 2, 3 and 4 are supervisory posts made mention
of in the said provision. The post of a Senior Accountant is not
enumerated in any one of the said provisions. Therefore, the
appointments to the post of Senior Accountant has to be made by
promotion from the feeder category. Rule 185 A provides for
appointment by way of deputation or on contract basis for a specified
period not exceeding five years. According to the counsel for the
petitioners, the above being the only provisions that provide for
appointment to the various posts, any mode of appointment not
stipulated by one of the above provisions is impermissible.
Appointment by transfer from one district to another or by mutual
transfer is not stipulated by any provision of the Act or the Rules.
Therefore, it is contended that the mutual transfer that has been granted
is liable to be set aside. The counsel also places reliance on the
Recruitment Rules for District Co-operative Banks, 1998, which are
Model Rules adopted by the third respondent Bank. The Rules are
produced as Ext.P5 in WP(C)No.22888 of 2010 and have been adopted
by the 3rd respondent as per Ext.P6. It is pointed out that Rule 3 of
Wpc 22352 & 22888/10 11
Ext.P5 does not contemplate an appointment by transfer. Therefore, it
is contended that by permitting the mutual transfer, the above
provisions are violated.
11. Adv.Moly Jacob, who appears for the Kollam District Co-
operative Bank points out that the Service Regulations have been in
existence from the year, 1986 onwards with a provision for inter bank
transfer and that the amendment that permits inter district transfer was
introduced in 1989 by Ext.P2 in WP(C)No.22352 of 2010.
Subsequently, the provision was amended as per Ext.P4 dated
26.2.2008, providing for a consultation with the KPSC as an additional
condition for such transfer. However, the provisions were not
challenged by anyone though they have been on the statute book for the
past two decades. It is further pointed out that the employee who is
transferred would join only as the junior most in the category to which
he is transferred and therefore, no prejudice whatsoever is caused to the
other employees of the Bank.
12. Adv.T.A.Shaji, who appears for the Kottayam District Co-
operative Bank relies on Section 101 of the Act to submit that the
Wpc 22352 & 22888/10 12
Government has the power to exempt societies from any of the
provisions of the Act and is therefore, sufficiently empowered to permit
transfers as in the present case by the grant of such exemption. It is
further submitted that Rule 185 of the Rules is not violated for the
reason that in the present case, there is neither an appointment nor
promotion, there is only a transfer. It is also submitted that the KPSC
was consulted in the present case as required by the Rules.
13. Adv.P.V.Asha who appears for the 6th respondent, Tensy
Scaria also supports the contentions of the other counsel and submits
that in the present case, there is no appointment but only a transfer.
Adv. Joby Thamby who appears for the fourth respondent also supports
the contentions of the other counsel. It is submitted that he was relieved
from the parent society on 16.7.2010 and that he has not been able to
join duty in the service of the society to which he has been transferred
for the reason that the interim order of this court has prohibited him
from doing so. It is submitted by the fourth and sixth respondents that
the impugned order does not cause any prejudice to the petitioners
since the sixth respondent who is younger in age has been transferred
Wpc 22352 & 22888/10 13
out and an older person has taken her place. It is pointed out that the
petitioners are in fact benefited by the transfer.
14. I have heard the counsel for the respective parties in detail. I
have also considered the rival contentions anxiously.
15. On facts, it is worth noticing that the sixth respondent
Smt.Tensy Scaria is a person who was admittedly recruited into
service along with the petitioners in 1995 to the post of Junior
Clerk/Cashier. They also become Junior Accountants at about the same
time. However, Smt.Tensy Scaria was promoted as a Senior
Accountant and is admittedly working in the said post. The petitioners
have not challenged her promotion. Nor do they have any grievance
against the same. Smt.Tensy Scaria has been transferred to Kollam
District Co-operative Bank and Sri Joy Joseph has been transferred to
her place in the Kottayam District Co-operative Bank by Ext.P12
proceedings. Sri Joy Joseph being a person older to Smt.Tensy Scaria
would retire earlier and therefore no prejudice is caused to the
petitioners by his transfer to the Kottayam District Co-operative Bank.
In fact, as rightly contended by the counsel for the respondents, such
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transfer would only enure to the benefit of the petitioners by providing
them with better prospects for promotion. Since the position of
Smt.Tensy Scaria above the petitioners is not being disputed or
questioned, the transfer of Sri Joy Joseph to her position cannot cause
any prejudice or detriment to the petitioners as contended. Further, in
the present case, Sri Joy Joseph is to join as the junior most Senior
Accountant in the Kottayam District Co-operative Bank. Even if it is
assumed that there are no Senior Accountants in the bank who are
junior to Smt.Tensy Scaria, the petitioners cannot be said to have
suffered any prejudice by the transfer of Sri Joy Joseph to her place.
Therefore, technically, the petitioners are not aggrieved by Ext.P12
proceedings.
16. The next contention of the petitioners is that there is no
provision either in the Act or the Rules enabling the respondents to
permit a mutual transfer as authorized in Ext.P12. However, it is
admitted by the petitioners that the Service Regulations adopted by
both the banks permit transfer of employees from one bank to another
as well as from one district to another. If transfer of an employee from
Wpc 22352 & 22888/10 15
one bank to another is permissible, a mutual transfer among two
employees is also equally permissible. This is for the reason that
instead of transferring one person from one bank to the other, and vice
versa, a mutual transfer only combines together two individual
transfers. The same is resorted to only by consent. Therefore, I do not
find any force in the objections against the same.
17. Reference is made to the Service Regulations to contend that
the impugned transfer amounts to appointment, which is not
permissible by adopting the device of transfer. It is to be noted that the
Service Regulations clearly permit transfer of an employee from one
bank to the other. When such inter bank transfers are permitted, it
cannot be said that such transfers amount to appointment that is not
permissible. If a posting by transfer does not amount to appointment
when it is a one way transfer, it cannot become anything more, when it
is a mutual transfer. This is for the reason that in the case of a mutual
transfer the persons transferred occupy respectively, the very same post
that was earlier occupied by the other.
18. The further contention of the petitioners that inter bank
Wpc 22352 & 22888/10 16
transfers are not supported by the provisions of the Act or Rules also
lacks substance for the reason that neither the Act nor the Rules contain
any prohibition against such transfer. Since power has been granted to
the Government to frame rules and regulations regarding service
conditions, by Section 80(3) of the Act, the Government has the
necessary powers to frame rules permitting transfer of employees. It is
also worth noticing from the provision for transfer in the Service
Regulations that transfer is permissible only in cases where the
respective Board of Directors of the transferor as well as the transferee
bank resolves to permit the same. Further, the person who gets the
benefit of the transfer joins the service of the transferee bank, only as
the junior most in the category to which he/she is transferred. Thereby,
the interests of the persons who are already in the service of the bank
are also protected.
19. The next contention of the petitioners is that the methods of
appointment contemplated by Rule 182, 185 and 185A are only direct
recruitment, promotion and deputation. Therefore, an appointment by
transfer is violative of the Rules. The contention cannot be accepted for
Wpc 22352 & 22888/10 17
the reason already stated above that transfer is not a mode of
appointment but only a mode of regulating the posting of employees.
Since the KPSC was also consulted before the impugned proceedings
were issued, I do not find any grounds to interfere with the same.
20. For the foregoing reasons, the writ petitions fail and they are
therefore dismissed. Since it is pointed out that Smt.Tensy Scaria and
Sri Joy Joseph who were relieved on 16.7.2010, have been out of
service, they shall be permitted to join duty pursuant to the impugned
proceedings without any break in service. No costs.
K.SURENDRA MOHAN, JUDGE
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