As per case facts, Writ Petitions challenged Sections 74 and 75(1) of the Tamil Nadu Cooperative Societies Act, 1983, and related Government Orders establishing Common Cadre Service Rules, arguing they ...
WP Nos.31973 and 17071 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE OF RESERVING DATE OF PRONOUNCEMENT
11.11.2025 05.03.2026
CORAM
THE HON'BLE MR.MANINDRA MOHAN SHRIVASTAVA ,
CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE G.ARUL MURUGAN
WP Nos.31973 and 17071 of 2025
WP No.31973 of 2025
Primary Agricultural Cooperative Society
Employees Association,
Regn.No.116/TNI
rep. By its State Vice President
S.Murugesan : Petitioner
versus
1.The Secretary to Government of Tamil Nadu,
Department of Cooperation, Food & Consumer Protection,
Fort St.George, Secretariat,
Chennai 600 009
2.The Registrar of Cooperative Societies,
No.170, N.V.Natarajan Maaligai,
EVR, Periyar Road, Kilpauk,
Chennai 600 010 : Respondents
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Declaration declaring Section 74 and 75(1) of the
Tamil Nadu Cooperative Societies Act, 1983, and the consequential
G.O.(Ms) No.14 Co-operation Food and Consumer Protection (CN1)
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Department dated 12.02.2019 and G.O.(Ms) No.29, Co-operation Food
and Consumer Protection (CN1) Department dated 15.02.2024 of the
1st respondent constituting the Tamil Nadu Primary Agricultural
Cooperative Credit Society common cadre Service Rules, 2019 as ultra
vires of Art. 19(1) (c) r/w. Article 43B of the Constitution of India and
the preamble part of the Tamil Nadu Cooperative Societies Act 1983 as
amended by Act No.4 of 2013.
WP No.17071 of 2025
K.Anbalagan : Petitioner
versus
1.The Secretary to Government of Tamil Nadu,
Department of Cooperation, Food & Consumer Protection,
Fort St.George, Secretariat,
Chennai 600 009
2.The Registrar of Cooperative Societies,
No.170, N.V.Natarajan Maaligai,
EVR, Periyar Road, Kilpauk,
Chennai 600 010
3.The Administrator,
Transport Corporation Employees Cooperative Thrift &
Credit Society Limited No.X-367,
No.488, 489, 1
st
Floor, Sathguru Complex,
Anna Salai, Nandanam,
Chennai 600 035 : Respondents
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Declaration declaring Section 74 and 75(1) of the
Tamil Nadu Cooperative Societies Act, 1983 and the consequential
G.O.(Ms) No.12 dated 24.01.2024 of the 1st respondent constituting
Tamil Nadu Employees Cooperative Thrift & Credit Societies common
cadre service Rules, 2024 as Ultra vires of Art 19(1)(c) r/w Art.43-B of
the Constitution of India and the preamble part of the Tamil Nadu
Cooperative Societies Act 1983 as amended by Act No.4 of 2013.
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For Petitioner : Mr.C.Prakasam
(in WP No.31973 of 2025)
Mr.S.Sathiaseelan,
(in WP No.17071 of 2025)
For Respondents : Mr.P.S.Raman,
Advocate general,
asst. by Mrs.M.Geetha Thamaraiselvan
Special Government Pleader
(In both cases)
COMMON ORDER
THE CHIEF JUSTICE
The aforesaid two writ petitions have been filed seeking
declaration declaring Section 74 and 75(1) of the Tamil Nadu
Cooperative Societies Act, 1983, and the consequential Government
Orders dated 12.02.2019, 15.02.2024 and 24.01.2024 of the first
respondent constituting the Tamil Nadu Primary Agricultural
Cooperative Credit Society Common Cadre Service Rules, 2019 as ultra
vires Article 19(1) (c) read with Article 43B of the Constitution of India
and the preamble part of the Tamil Nadu Cooperative Societies Act,
1983, as amended by Act No.4 of 2013.
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2. Submissions made on behalf of the petitioners :
(a) Learned counsel for the petitioners contended
that Sections 74 and 75 of the Tamil Nadu Cooperative
Societies Act and common pool cadre rules affect the
autonomy of the Cooperative societies. The provisions
contained in the aforesaid two sections are State-centric
and while constituting common cadre of service in respect
of the posts of Secretaries, Assistant Secretaries,
Executive Officers, Assistant Executive Officers, General
Managers, Assistant General Managers, Managers,
Assistant Managers, Purchase Managers, Purchase Officers,
Assistant Purchase Officers, Development Officers, Chief
Accountants, Chief Accounts Officers, Accounts Officers,
State has retained absolute control in every aspect of
recruitment, disciplinary action, transfer, posting etc.
(b) The competent authority, being a committee
formed in Rule 3 sub-Rule 4 of the Tamil Nadu Cooperative
Societies Rules, alone is declared competent to recruit,
appoint, transfer, suspend, take disciplinary action,
terminate, decide all new matters etc., common cadre
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officers/employees, mostly of administrative/managerial
rank. The power which has been reserved in the hands of
the committee, thus for all legal and practical purposes, is
the supreme body, next to the State. Thus, the entire
power has been centralized in a manner that the autonomy
of the Cooperative Societies has been completely taken
away.
(c) The Cooperative Societies do not have any such
control which the State or its authority exercises in respect
of all the common cadre officers/ employees. This
statutory scheme of the Act and the rules is destructive of
complete and full autonomy of the Cooperative Societies.
It also incidentally imposes unreasonable restrictions on
the fundamental right to form Cooperative Society under
Article 19(1)(c) of the Constitution of India, as amended,
along with insertion of Article 43B of the Constitution of
India, in 2012.
(d) Article 43B of the Constitution of India, though
part of the Directive Principles of the State Policy,
nevertheless provides that the State shall endeavour to
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promote autonomous functioning. Therefore, while framing
legislation, the State's objective must be directed towards
fulfillment of these directive principles and policies. Any
provision or scheme of the legislation, which is destructive
of the autonomy would be ultra vires Article 43B of the
Constitution of India.
(e) Consequent upon insertion of Article 43B of the
Constitution of India, the preamble to the Tamil Nadu
Cooperative Societies Act was also amended, which clearly
provides that it is expedient to promote functional
autonomy.
(f) Tamil Nadu Cooperative Societies Act was enacted
prior to insertion of Article 43B of the Constitution of India.
After insertion of Article 43B of the Constitution of India,
the preamble was also amended to bring it in tune with the
new provision in the Constitution and, therefore, the Act,
after the amendment in the Constitution and the preamble,
becomes unconstitutional.
(g) As the provisions contained in Sections 74 and 75
of the Act and the Rules framed thereunder are destructive
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of the spirit of the preamble to the Cooperative Societies
Act, Sections 74 and 75 of the Act are manifestly arbitrary,
and in addition, the rules are ultra vires the provisions of
the Act itself.
(h) Earlier decision of this Court in the case of
C.Manoharan vs. State of Tamil Nadu
1
, upholding the
validity of proviso to sub-Section 3 of Section 75 of the Act
did not have the occasion to examine the validity of
Section 74 and all other provisions of Section 75 of the
Act, except the proviso. Therefore, the decision in case of
C.Manoharan (supra) is not an authority in the matter of
challenge to the provisions of Section 74 and 75 of the Act
(except proviso) and the Rules framed thereunder.
(i) Learned counsel for the petitioner would further
submit that the validity of a legislation, in appropriate
case, could be tested on the anvil of the Directive
Principles of State Policy, as enshrined in the Constitution,
and if the legislation is against the spirit of the Directive
Principles of State Policy, it could be struck down as
1
WP MD No.19975 of 2019 etc. batch, dated 26.09.2019
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violative of the Constitution of India, as also suffering from
manifest arbitrariness.
(j) In support of the various submissions made
hereinabove, learned counsel for the petitioner has placed
reliance upon the following authorities:
1. Union of India vs. Chajju Ram (2003) 5 SCC 568
2.Krisha Kumar Birla vs. Rajendra Singh Lodha (2008) 4 SCC 300
3.Casio India Company Private Limited vs. State
of Haryana
(2016) 6 SCC 209
4. National Insurance Co. Ltd. vs. Pranay Sethi (2017) 16 SCC 680
5. Arup Bhuyan vs. State of Assam (2023) 8 SCC 745
6.Dr.J.Vijayan & Others. vs. State of Kerala and
Others
(2022) 17 SCC 177
3. Submissions on behalf of the respondent:
(a) The principal submission made by the learned
Advocate-General is that the issue raised in this petition
was earlier raised before this Court in the case of
C.Manoharan v. State of Tamil Nadu (supra) , wherein
validity of proviso to sub-Section 3 of Section 75 of the Act
was challenged on similar grounds. This Court had an
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occasion to examine the scheme of the Act and the
constitution of common pool cadre. Challenge to the
validity on the ground that it adversely affects the
autonomy and thereby, is violative of Article 43B of the
Constitution of India, was repelled. The provision contained
in proviso to sub-Section 3 of Section 75, though being
much more regressive and power-centric as compared to
other provisions of Section 75 as well as Section 74, was
upheld. Therefore, it is submitted that this petition is liable
to be dismissed on this ground alone.
(b) In the case of Union of India vs. Rajendra
N.Shah
2
, the constitutional amendment to give autonomy
to Cooperative Societies has been held to be confined only
to the Central Cooperative Societies for want of ratification
by the States and therefore, the validity of the provision
contained in Section 74 and 75 of the Cooperative
Societies Act could not be judged with reference to the
provisions contained under Article 43B of the Constitution
of India.
2
2022(19) SCC 520
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(c) It is further submitted that the validity of Rule
(3) sub-Rule 4 of the Rules in the matter of appointment of
Joint Registrar of Cooperative Societies of the region
concerned as the “competent authority” was also upheld.
(d) The Directive Principles of the State Policy are
not justiciable. Therefore, the validity of the legislation
could not be judged on that ground alone.
(e) The scheme of the Cooperative Societies Act,
though it was pre-existing Article 43B of the Constitution
of India, amendment in the preamble of the Cooperative
Societies Act, clearly reveals that it confers very high
degree of autonomy in cooperative societies in the matter
of their functioning, as all the powers and functions are
exercisable by the general body and the Board.
(f) The officers and employees of the Cooperative
Society are only implementing authorities of the various
policy decisions. Therefore, the Cooperative Societies enjoy
a very high degree of functional autonomy though not
absolute in nature. The provisions relating to the powers
and functions of the Board, general council and other
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related provisions, on a conjoint reading, postulate a very
high degree of autonomy in the hands of the Cooperative
Societies.
(g) The minimal control by formulation of provisions
under the Act and the Rules is intended to regulate
functioning of the institutions and to promote functional
management in larger interest of effective functioning of
the Cooperative Societies, without interfering with their
day-to-day affairs and the decision which may be taken by
the society itself.
(h) The statutory scheme of the Act including
Sections 74 and 75 of the Act strikes a fine balance of
autonomy, coupled with regulatory provision, and such
scheme is prevalent in other institutions of local self-
governance, viz., panchayats and municipalities, where the
functional autonomy is with the elected body. However,
some of the higher officers in the administration and
management are part of the common cadre. But, in all
cases, even the officers in the common cadre functioning
in individual Cooperative Societies are subservient to the
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society and they have to act under the commands of the
Board and not the State officials or the Government.
(i) Learned Advocate General relies upon the
following authorities:
1. P.Baluchamy vs. R.K.Veluchamy and others WP Nos.7081of 2000
dated 23.06.2003
2. C.Manoharan vs. State of Tamil Nadu WP MD No.19975 of
2019 etc. batch,
dated 26.09.2019
3. B.Gopalakrishnan and others v. Secretary,
Department of Cooperation, Food and Consumer
Protection
WP Nos.22611 of 2024
etc. batch, dated
20.02.2025.
Analysis and conclusion:
4. The challenge to the constitutional validity of Sections 74 and
75(1) of the Cooperative Societies Act and consequential Government
Orders dated 12.02.2019, 15.02.2024 and 24.01.2024 constituting
Common Cadre Service Rules, 2019, and Tamil Nadu Employees
Cooperative Thrift and Credit Societies are assailed mainly on the
ground that it is ultra vires Article 19(1)(c) read with Article 43B of the
Constitution of India as also the preamble part of the Cooperative
Societies Act, as amended by Act 4 of 2013.
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5. By Constitution (97
th
Amendment Act) 2011, constitutional
status was accorded to cooperative societies. Article 19 was amended
in the manner that in clause (1) in sub-clause (c), after the words, “all
Unions”, the words, “or Cooperative Societies” was inserted.
5.1 In Part IV of the Constitution of India, after Article 43A, a
new Article 43B was inserted as below:
“43B. Promotion of co-operative societies.—The State
shall endeavour to promote voluntary formation,
autonomous functioning, democratic control and
professional management of co-operative societies.”
5.2 A new Part IXB relating to Cooperative Societies was also
inserted after Part IXA, containing various provisions with regard to
incorporation and other matters of Cooperative Societies.
6. Article 243ZI provided for incorporation of Cooperative
Societies as below:
“243ZI. Incorporation of co-operative
societies.—Subject to the provisions of this
Part, the Legislature of a State may, by law,
make provisions with respect to the
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incorporation, regulation and winding up of co-
operative societies based on the principles of
voluntary formation, democratic member-
control, member-economic participation and
autonomous functioning.”
7. After the constitutional amendment as above, a fundamental
right to form Cooperative Societies is guaranteed.
7.1. Article 43B of the Constitution of India is incorporated as
one of the Directive Principles of the State Policy stating that the State
shall endeavour to promote voluntary formation, autonomous
functioning, democratic control and professional management of
Cooperative Societies. These directive principles require the State to
make endeavour to promote autonomous functioning.
7.2. Read with Article 243ZI, empower the Legislature of the
State to make laws with respect to regulation of Cooperative Societies
based on the principles of voluntary formation, democratic member-
control, member-economic participation and autonomous functioning.
8. A conjoint reading of the aforesaid two provisions added by
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way of amendment, no doubt, provides for autonomous functioning of
the Cooperative Societies. However, none of the provisions in terms
mandate absolute or full autonomy. While Article 43B of the
Constitution of India, as a measure of Directive Principles of State
Policy, requires the State to endeavour to promote autonomy, Article
243ZI of the Constitution of India clearly provides that the Legislature
of a State may, by law, make provisions with respect to the
incorporation, regulation and winding up of co-operative societies
based on :
a) principles of voluntary formation
b) democratic member-control
c) member-economic participation
d) autonomous functioning.
9. It, however, does not flow from the aforesaid two provisions
that there is constitutional imperative for complete autonomy even to
an extent that the State Legislature is denuded of its competence to
make provisions with regard to constitution of common cadre of
services for effective and better management for effective
administration and management of the Cooperative Societies. The
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degree and extent of autonomy could be regulated by the laws made
by Legislature as would be clearly discernible from the provisions
contained in Article 243ZI of the Constitution of India. It would depend
upon the nature and extent of the control exercised by the State
through the legislative device as to what is the degree of autonomy
which Cooperative Societies enjoy under statutory scheme of a
particular state enactment relating to the Cooperative Societies.
10. The Tamil Nadu Cooperative Societies Act, 1983,
comprehensively provides for registration of societies, qualification of
members, their rights and liabilities, as also, management of the
registered societies, duties and privileges of registered societies, State
aid to registered societies, properties and funds of registered societies,
paid officers and servants of society as also, audit inquiry, inspection
and investigation, surcharge and supersession of Cooperative
Societies. It also provides a mechanism for settlement of disputes. The
Act also provides for winding up, division, amalgamation etc. of
insured cooperative bank. The Act further makes provisions with
regard to joint farming societies, lift irrigation facilities, agricultural
and rural development banks. Special provisions have been made with
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regard to short term cooperative credit structure societies. Winding up
and cancellation of societies is also permitted under the law.
11. Keeping in view the amendment in the Constitution, and
insertion of Article 43B, preamble of the Tamil Nadu Cooperative
Societies Act was also amended by Tamil Nadu Act, 2013, adding the
following provisions:
"WHEREAS it is expedient to promote voluntary formation,
autonomous functioning, democratic control and professional
management of co-operative societies in the State of Tamil Nadu;
12. In the light of the aforesaid constitutional scheme and newly
inserted provision in the Cooperative Societies Act of the State, the
scheme of Section 74 and 75 is as below :
74. Recruitment Bureaus .-
(1) The Government may, by notification constitute
Recruitment Bureaus at the State and district levels for the
recruitment of such categories of paid officers and servants
for employment by such class or classes or category or
categories of registered societies as may be prescribed.
Nothing contained in this section shall apply to any of the
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posts in respect of which common cadre of service has
been constituted under section 75.
(2) The manner of constitution of the Recruitment
Bureaus and the procedure to be followed by such Bureaus
be such as may be prescribed.
75. Constitution of common cadre of service.-
(1) Notwithstanding anything contained in this Act or
the bylaws made there under and subject to the rules made
by the Government in this behalf, the Government may, in
the interest of the co-operative movement, constitute from
time to time, by order in respect of-
(i) scheduled co-operative societies: or
(ii) Primary societies affiliated to such scheduled co-
operative societies, or
(iii) co-operative sugar mills, co-operative spinning
mills, co-operative tea factories and such other registered
societies prescribed for the purpose of sub-section (4) of
section 33; or
(iv) such other class or category of registered
societies in which the Government have taken shares or
given financial or other assistance as may be notified by
the Government.
One or more common cadre o service in respect of
the posts of secretaries, assistant secretaries, executive
officers assistant executive officers general managers,
assistants general managers, managers, assistant
managers. Purchase managers, purchase officers, assistant
purchase officers, development officers, chief accountants,
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chief accounts officers, accounts officers and such other
class or classes of posts as may be notified by the
Government. The common cadre of service under this
section may be constituted either separately in respect of
the said posts in any group of registered societies
mentioned in item (i) or item (ii) or item (iii) or item (iv) as
the case may be or jointly for the aforesaid posts in one or
more of the groups of registered societies mentioned in the
said items (i), (ii), (iii), and (iv) or of two or more of the
registered societies in any one of the groups mentioned in
the said items.
(2) When any such common cadre of service is
constituted under sub-section (1) in respect of any post, all
the employees holding, such posts on the date of
constitution of such common cadre of service, shall be
deemed to have been absorbed in the common cadre of
service with effect on land from the date of constitution of
such common cadre of service:
Provided that the salary (including allowances) of
any such employees shall not be varied to his
disadvantages;
Provided further that any such employee may, within
such period as may be prescribed, by notice in writing to
the competent authority constituted under sub-section (3)
intimate his option for not becoming a member of such
common cadre of service, and in that event, his services in
the registered society shall stand determined with effect on
and from the date of such notice and he shall be entitled to
either.-
(i) all the terminal benefits to which he would have
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been eligible under the by-laws or contract or award
applicable to him immediately before the date of
constitution of such common cadre of service as if such
employee had retired from service ; or
(ii) compensation which shall be equivalent to fifteen
days, salary of such employee (including allowances) for
every completed year of continuous services or any part
thereof in excess of six months whichever is higher.
Explanation. _
For the purpose of this sub-section," continuous
services" shall means an uninterrupted services including
service which may by interrupted on account of sickness or
authorized leave or an accident.
(3) The order under sub-section (1) shall provide for
the constitution of the competent authority which shall be a
committee consisting of both officers of the Government
and non-officials and the total strength of such committee
shall not exceed five, from among whom one of the officers
of the Government not below the rank of Joint Registrar in
the Co-operative Department or not below such rank in
other departments of the Government as may be
prescribed shall be appointed by the Government as the
chairman to exercise the powers of recruitment,
appointment, transfer and disciplinary control (including
censure, stoppage of increment, withholding of promotion,
suspension by way to punishment, reduction to a lower
rank in the seniority list or to a lower post or time scale
whether in the same service or in another service or to a
lower stage in a time scale, compulsory retirement,
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removal or dismissal) and such other powers as may be
prescribed in respect of holders of posts in such other
powers as may be prescribed in respect of holders of posts
in such common cadre of service. After the constitution of
such competent authority, the registered society concerned
cadre of service, exercise any of the powers which are
conferred shall not in respect of holders of posts in such by
or under this Act or the rules made thereunder on the
competent authority in respect of each common cadre of
service: There shall be a separate competent authority in
respect of each common cadre of service.
Provided that the Government may direct that for such
period not exceeding three years from the date of
constitution of a common cadre of service, such committee
in relation to that common cadre of service, shall consist of
only a single officer of the Government not below the rank
of Joint Registrar in the Co-operative Department or not
below such rank in other departments of the Government
as may be prescribed; and such officer shall be the
"competent authority constituted under sub-section (3) of
section 75" for the purposes of this Act and any reference
to the competent authority in this Act shall, for the period
mentioned in this proviso, be construed as a reference to
the single officer aforesaid.
Provided further that the registered society under which an
employee borne on a common cadre of service is for the
time being employed shall also have the power to impose
on such employee the penalty of censure or stoppage of
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increment up to two years without cumulative effect.”
13. Sections 74 and 75 are part of Chapter VIII, which deals
with paid officers and servants of the society. Section 73 provides that
subject to the provisions of sections 74, 75, 76 and 77 and subject to
the Rules made in this behalf, a registered society may appoint such
paid officers and servants as are necessary for the efficient
performance of its functions; provided that the qualifications for the
appointment of paid officers and servants, the conditions of service
including disciplinary control and the cadre strength of such officers
and servants of a registered society or class or category of registered
societies shall be such as may be prescribed. Therefore, Section 73
confers power on the Cooperative Societies to appoint paid officers and
servants as may be necessary for the efficient performance of its
functions. Section 74 provides for recruitment bureau for the
recruitment of such categories of paid officers and servants for
employment by such class or classes or category or categories of
registered societies as may be prescribed. Section 75 provides for
constitution of common cadre of service and empowers the
Government to constitute from time to time by order, common cadre
of service, in the interest of the cooperative movement.
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14. The validity of proviso to sub-Section 3 of Section 75 was
challenged in the case of C.Manoharan (supra).
15. First proviso to Section 75 of the Act enabled the State
Government to appoint a single officer as a committee, to function as
a common cadre authority. Challenge to such a provision providing for
appointment of a single officer as a committee to function as common
cadre authority, though was challenged as affecting the autonomy of
the Cooperative Society, as enshrined under Article 43B of the
Constitution of India, the challenge was repelled.
It was held as below:
“24. The sum and substance of the arguments of the
petitioners is that the autonomy of the Co-operative Society as
enshrined under Article 43-B of the Constitution of India is being
infringed by introduction of the common cadre. To be noted,
Article 43-B of the Constitution of India falls in Part-IV, which
deals with Directive Principles of State Policy and they are not
justifiable and based on the same, the Court would not normally
issue directions for implementation, except in cases relating to
environmental issues and other issues of public importance. The
petitioners are salaried employees of the Societies. All of them
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appear to be in the good books of the elected Board of
Directors, who have supported them by passing a resolution to
the effect that their cases are indispensable. Any such resolution
cannot bind the Authorities. The appointment to a post in a Co-
operative Society is an appointment to a public office. Therefore,
necessarily, the procedures contemplated under the provisions
of the Act have to be adhered to before any appointment is
made. This applies to promotions as well. Thus, to say that the
Societies are free to do anything as per their will and pleasure is
a submission to be outrightly rejected.
25. The powers and duties that can be discharged by the
President and the elected Board of Members of the Society are
clearly circumscribed under the Act. Any violation thereof, they
are liable to be removed or proceeded with against them. This
equally applies to the paid employees of the Society. Therefore,
to state that constitution of common cadre system will affect the
autonomy of the Society is an argument, which is to be
rejected. The petitioners have misunderstood the scope of
autonomy, which is referred to in Article 43-B of the Constitution
of India or that matter in Article 243ZI of the Constitution of
India. The autonomy, which is referred to therein pertains to the
autonomous functioning of the Co-operative Society. It does not
mean that the Co-operative Society can take law unto
themselves and frame their own policy for recruitment, transfer
and to regulate their business as per their whims and fancies.
The purport of Article 43-B of the Constitution of India is to
make the State endeavour to promote voluntary formation,
autonomous functioning, democratic control and professional
management of the Cooperative Societies. The other way of
putting it is, by conferring of powers of self governance, it does
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not mean that the power is unregulated or unbridled. Therefore,
the arguments of the learned counsels for the petitioners have
to necessarily fail.
26. An argument was putforth that the respondents are
estopped from reintroducing common cadre system, after
having abolished the same earlier by taking note of the report of
the Task Force and the memorandum of understanding. There
can be no estoppel against the statute. At the relevant point of
time, the situation and the manner in which the co-operative
societies were managed were taken note of. The High Court was
flooded with litigations and very often by the Secretary and paid
employees of the Society challenging the order of the Registrar
refusing to accept the revision of scales of pay. Extreme cases
were dealt by this Court, where the paid employees in collusion
with the elected Board of Directors entered into a settlement
under Section 18(1) of the Industrial Disputes Act and in few
cases under Section 12(3) of the Industrial Disputes Act and
unilaterally revised their pay and allowance multi-fold. This
resulted in draining the finances of the Societies and ultimately
driving them to be defunct. Those settlements were ultimately
invalidated and the unintended benefits, which were availed by
those paid employees and Secretaries were directed to be
recovered. Thus, in the given facts, a report was submitted and
the Government, in 2008, passed an order in G.O.Ms.No.122,
Cooperation, Food and Consumer Protection (CN1) Department,
dated 04.07.2008, abolishing the common cadre service in
respect of the post of Secretary of Primary Agricultural Co-
operative Banks. From the objects and reasons of the impugned
enactment, we find that it is intended to have efficient staff in
the Societies, so that the Societies shall function viably and also
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provide various services in an efficient manner. Thus, the State
cannot be pinned down by applying the principles of estoppel,
which have no application to the facts of the case.
27. Arguments on the validity of the proviso to Section
75(3) of the Act was on the ground that for the first three years,
there will be a Single Officer in the rank not below the Joint
Registrar in the Co-operative Department as a competent
authority constituted under Section 75(3) of the Act This
provision has been in existence ever since the Act came into
force. The proviso is in the nature of an interim arrangement
having a specified period, (i.e.) not exceeding three years and
we find no reason to hold the provision to be unconstitutional
and the petitioners have not been able to establish any
unconstitutionality in the provision to Section 75(3) of the Act.
Therefore, the argument that the proviso to Section 75(3) of the
Act is ultra vires to the Constitution of India has to fail.
28. To be noted that common cadre system is in respect
of various posts in the Co-operative Department. If that be the
position, it can hardly be stated that by introducing the common
cadre system to the post of Secretary in Primary Agricultural
Co-operative Credit Society will affect the autonomy of the
Society is an unacceptable argument.
16. Though several authorities were cited at the bar before us by
both parties, in view of the aforesaid decision in the case of
C.Manoharan, we are unable to uphold the challenge relating to the
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provisions of Section 74 and 75(1) of the Tamil Nadu Cooperative
Societies Act as violative of any of the provisions of the Constitution of
India, much less Article 43B of the Constitution of India. It only
provides for constitution of a common cadre of service.
17. The argument that the functional autonomy of the
cooperative society is taken away in view of the provision of
Constitution of common cadre services is not correct in view of a very
comprehensive scheme of management and administration of affairs of
cooperative societies by their elected representatives constituting
Managing Committee and the Board. In this regard, provisions
contained in Section 32 and 33 of the Act are complete answer and are
reproduced herein below:
“32.General meetings .-
(1) (a) Subject to the provisions of this Act, the rules and
the by-laws, the ultimate authority of a registered society
shall vest in the general body of its members:
Provided that nothing contained in this clause shall affect
the exercise by the board or any officer of a registered
society of any power conferred on such board or such
officer by this Act or the rules or by the by-laws.
(b) Notwithstanding anything contained in clause (a) where
the area of operations of a registered society is not less
than such area as may be prescribed, or where the
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registered society consists of not less than such number of
members as may be prescribed, the registered society may
provide by an amendment of its by-laws for the
constitution of smaller body consisting of such number of
the members of the registered society as may be
prescribed, elected in accordance with the rules
(hereinafter referred to as the representative general body)
to exercise all or any of the powers of the general body as
may be specified in the by-laws and any reference, by
whatever form of words, in the Act to the general body or a
meeting thereof shall, where a representative general body
has been constituted under this clause, have effect in
respect of the powers exercisable by the representative
general body as if such reference were a reference to the
representative general body or a meeting thereof, as the
case may be:
Provided that thee representative general body shall not
alter any provision in the by-laws relating to its constitution
or powers:
Provided further that nothing in this clause shall be
construed as empowering the representative general body
to elect the member of the board of the registered society;
and the members of the board of that society shall be
elected by all the members of the society in such manner
as may be prescribed.
(c) The exercise of any power by the representative general
body shall be subject to such restrictions and conditions as
may be specified in the rules or the by-laws.
(2) A general meeting of a registered society shall be held
in a co-operative year for the purpose of-
(a) approval of the budget for the ensuing year with
reference to the programme of the activities of the society
prepared by the board:
Provided that if the general meeting does not approve the
budget before the commencement of the year to which it
relates, even after the budget is placed before it, the board
shall refer the budget to the Registrar for approval. The
registrar after examining the reasons for the non-approval
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for the budget by the general meeting, shall have power to
modify the budget taking into account the interests of the
registered society.
(b) consideration of the audit report and the annual report;
(c) disposal of the balance of the net profits as specified in
sub-section (2) of section 72;
(d) consideration of the details of the services, if any
rendered to any member of the board or any such near
relation as may be prescribed of any member of the board
during the preceding year,
(dd) appraisal of the programme of the activities of the
society; and
(e) consideration of any other matter which may be
brought forward in accordance with the by-laws:
Provided that nothing contained in this sub-section shall
prevent the registered society from convening general
meetings as often as may be necessary in the interest of
the society.
(3) (a) The board may, at any time, call a special general
meeting of the registered society, and shall call such a
meeting within one month of the date of a requisition in
that behalf from-
(i) such number of the members or proportion of the total
number of members as may be specified in the by-laws; or
(ii) the board of the financing bank to which the society is
affiliated; or
(iii) any other registered society of such class as may be
prescribed for the purpose; or
(iv) the Registrar.
(b) The requisition referred to in clause (a) shall be in
writing and shall specify the subjects that shall be placed
for consideration at the special general meeting.
(4) (a) If the board refuses or fails to call a meeting in
accordance with a requisition under clause (a) of sub-
section (3) or under sub-section (1) of section 25 or if, in
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the opinion of the Registrar, there is no board or officer
competent under this Act or the rules or the bylaws to call
a meeting, or if there be an order of the Registrar or of the
civil court restraining the board to function, the Registrar
shall if he is satisfied that there are sufficient and valid
reasons to convene the special general meeting, call the
meeting himself.
(b) If at a special general meeting of the registered society
the quorum is not present for holding the meeting,-
(i) in cases where the meeting was called in pursuance of
requisition from the members, the meeting shall stand
dissolved; and
(ii) in any other case, the meeting shall stand adjourned to
such other day, time and place as the board or the
Registrar may determine. If, at the adjourned meeting
also, the quorum is not present for holding the meeting,
the members present shall be the quorum.
(c) In respect of any meeting called under clause (a) of this
sub-section, the Registrar may, notwithstanding anything
contained in the by-laws of the society, determine the
period of notice for such meeting, the time and place of the
meeting and the subjects to be considered thereat and may
preside over such meeting or authorise any person to so
preside.
(5) The Registrar may order that the expenses incurred in
calling the special general meeting shall be paid out of the
funds of the society or any other registered society at
whose instance such meeting was called or by such person
as, in the opinion of the Registrar, was responsible for the
refusal or failure to call the meeting under sub-section (4).
33. Constitution and meetings of the board .-
(1) (a) The management of every registered society shall
vest in a board constituted in accordance with the
provisions of this Act, the rules and the by-laws, which
shall exercise such powers and perform such duties as may
be conferred or imposed on it by this Act, the rules and the
by-laws:
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Provided that of the members to be elected to the board of
every registered society, there shall be thirty per cent
reservation for women and eighteen per cent reservation
for Scheduled Castes and Scheduled Tribes:
Provided further that the members of the board may co-opt
not exceeding two persons having experience in the field of
banking, management, finance or specialisation in
agriculture, sericulture, dairy, marketing, small or cottage
industry or in any other field relating to the objects and
activities undertaken by the registered society, as members
of the board of the registered society:
Provided also that the board may also consist of such
number of functional directors, not exceeding nine, as may
be prescribed in the rules or in the by-laws of the
registered society
Explanation I. __ For the purpose of this proviso and for
clause (c) of sub-section (2), ―functional director means a
‖
paid officer of the society or an officer of Government
department or representative of central or apex society or
such other bodies like Reserve Bank of India or National
Bank for Agriculture and Rural Development having relation
with functioning of the registered society.
Explanation II..__ For the purpose of sub-section (1) and
(2), while calculating the eighteen per cent or thirty per
cent of reservation, the fraction, if any, shall be ignored if it
is less than half, or rounded off to the nearest whole
number if it equal to or more than half:
Provided also that nothing contained in the first proviso
shall be deemed to prevent any women or the members of
the Scheduled Castes and Scheduled Tribes for whom
representations have been made thereunder in the board of
any registered society from being elected to any of the
seats in the board of such registered society:
Provided also that, in the case of a society registered after
the commencement of this Act, the persons who have
signed the application to register that society may
constitute an interim board to conduct the affairs of that
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society for a period of three months from the date of
registration or for such further period or periods not
exceeding six months in the aggregate from the date of
registration as the Registrar may consider necessary; but
the interim board constituted under this proviso shall cease
to function as soon as a board has been constituted in
accordance with the provisions of this Act, the rules and the
by-laws.
(2) Notwithstanding anything contained in clause (a) of
sub-section (1), but subject to sub-section (3), in the case
of every scheduled co-operative society the board shall
consist of,-
(a) Such number of members elected from such area or
from such class or category of registered societies as
maybe prescribed, of whom eighteen per cent shall be
elected from members of Scheduled Castes and Scheduled
Tribes and thirty per cent shall be elected from women, as
provided in the first proviso to sub-section (1);
(b) such number of co-opted members not exceeding two
as may be prescribed; and
(c) such number of functional directors not exceeding nine,
as may be prescribed in the rule:
Provided that nothing contained in clause (a) shall be
deemed to prevent any woman or the members of the
Scheduled Castes and Scheduled Tribes for whom
reservation have been made thereunder in the board of any
scheduled co-operative society from being elected to any of
the seats in the board of such scheduled co-operative
society.
(3) The board shall consist of-
(a) in the case of an apex society and a central society, not
less than eleven and not more than twenty-one members
as may prescribed in the rules or in the by-laws of the
society; and
(b) in the case of primary society, not less than seven and
not more than twenty-one members as may be prescribed
in the rules or in the by-laws of the society.
(4) (a) The number of co-opted members and functional
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directors mentioned in subsection (1) and sub-section (2)
shall be excluded for the purpose of counting the total
number of members specified in sub-section (3);
(b) Notwithstanding anything contained in this Act, the co-
opted members and functional directors shall have the right
to participate and vote at the meetings of the board but
shall not be entitled to vote at, or contest for, any election
in the registered society in their capacity as such members.
(7) The Government shall appoint a managing director or
chief executive officer to-
(i) every apex society,
(ii) every scheduled co-operative society, and
(iii) such other registered societies as may be notified by
the Government. The qualifications and the powers and
functions of the managing director or chief executive officer
shall be such as may be prescribed:
Provided that where the by-laws of any other registered
society provide for the appointment of a managing director
or chief executive officer by the Registrar such appointment
shall be made by the Registrar.
(8) Where the Government or a financing bank have or has
taken shares in, or given financial or other assistance to, a
registered society, the Government or the financing bank,
as the case may be, may notwithstanding anything
contained in sub-section (1) or sub-section (2), nominate
to the board of such registered society not more than two
functional directors if such registered society is an apex
society, and one functional director in other cases, and
where the Government or a financing bank nominate under
this sub-section, then not withstanding anything contained
in sub-section (3), the number of functional directors of the
board shall stand increased by such number as is
nominated under this subsection. The Government or the
financing bank may at any time withdraw any person or
persons so nominated and fill up the vacancy or vacancies
by fresh nomination:
Provided that where both the Government and financing
bank have taken shares or given financial or other
assistance, the Government shall determine whether the
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Government or the financing bank or both may make the
nominations:
Provided further that the nominee of the Government to a
board of a registered society under this sub-section shall be
a Government servant:
(9) Every functional director, who is a Government servant
nominated to a board of a registered society shall refer to
the Government in the case of an apex society, and to the
Registrar in the case of any other registered society any
resolution of the board of such apex society or other
registered society, as the case may be, which is not in
accordance with this Act, the rules or the by-laws of the
society or which is against the interest of such apex society
or other registered society, as the case may be. On receipt
of such report, the Registrar or the Government, as the
case may be, shall take such action as he or they may
deem necessary.
(10) (a) The term of office of a member who is elected to
any board constituted under this Act, the rules or the by-
laws shall be five years.
(b) Every co-opted member of the board shall hold office
only for such period for which the members of the board
who have co-opted the member would have been entitled
to hold office.
(c) The Government, the Registrar, the prescribed authority
or the financing bank or the board of another society or
other interest may at any time withdraw any co-opted
member or functional director if his or her action is
detrimental to the interest of the society and fill up the
vacancy or vacancies.
(11) (a) Notwithstanding anything contained in this Act,
election of members to the board of a registered co-
operative society shall be conducted before the expiry of
the term of office of the members of the board so as to
ensure that the newly elected members of the board
assume office immediately on the expiry of the term of
office of members of the outgoing board.
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(b) The superintendence, direction and control of the
preparation of the electoral rolls for, and conduct of, all
elections to a co-operative society shall vest in the Tamil
Nadu State Co-operative Societies Election Commission
constituted under section 33-A.
(c) Save as otherwise provided in this Act or rules,-
(i) the member of the board of a registered society shall be
elected by the members of the registered society by secret
ballot in such manner as may be prescribed;
(ii) the office-bearers of a registered society shall be
elected by the elected members of the board from among
themselves by secret ballot in such manner as may be
prescribed:
Provided that any casual vacancy in the office of a member
of the board shall be filled up by the board by nomination
out of the same class of members in respect of which the
casual vacancy has arisen, if the remaining term of office of
the board is less than half of its original term:
Provided further that any casual vacancy in the office of a
member of the board, shall be filled up by election in such
manner as may be prescribed, if the remaining term of
office of the board is not less than half of its original term.
(13) The ordinary meetings of a board shall be held at least
once in every three months for which a notice of not less
than three clear days shall be given. The managing director
or the chief executive officer, in consultation with the
president or chairperson and in his absence the vice-
president or vice-chairperson, as the case may be, of such
board or where there is no managing director or chief
executive officer, the president or the chairperson of such
board, shall convene the meeting of such board.
(14)(a) The managing director or the chief executive officer
in consultation with the president or the chairperson or in
his absence the vice-president or the vice chairperson of
the board or where there is no managing director or the
chief executive officer, the president or the chairperson of
such board, may, at any time, call a special meeting of the
board and shall call such a meeting within fifteen days of a
requisition in that behalf from-
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(i) not less than one third of the members of the board; or
(ii) the board of the financing bank to which such
registered society is indebted; or
(iii) any other registered society of such class as may be
prescribed for the purpose; or
(iv) the Registrar, for which a notice of three clear days
shall be given to the members of the board.
(b) the requisition referred to in clause (a) shall be in
writing and shall specify the subjects that shall be placed
for consideration at such requisitioned meeting.
(15) If the managing director or the chief executive officer
or the president or the chairperson, as the case may be,
fails to call a meeting in accordance with a requisition
under clause (a) of sub-section (14), the Registrar shall, if
he is satisfied that there are sufficient and valid reasons to
convene the board meeting, call the meeting himself and
order that the expenses incurred in convening the meeting
shall be paid out of the funds of the society.”
18. The entire argument of the learned counsel for the petitioner
rests on a fallacious submission that the constitutional scheme
mandates full and complete autonomy in the functioning of the
cooperative institutions. We have elaborately dealt with hereinabove,
with reference to the provisions contained in Article 43B and Article
243ZI of the Constitution of India that though the newly inserted
provisions in the Constitution provides for autonomous functioning, it
cannot be said that the State Legislature is denuded of its competence
to make provision with regard to constitution of common cadre of
services. After all, day-to-day functioning of the cooperative societies
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is not affected by constitution of common cadre services and
appointments made on administrative, managerial and other important
posts. In the matter of formation of its policies, implementation
thereof, extending various benefits to its members, constitution of
common cadre of services does not come in the way. On the other
hand, constitution of such cadre is intended to ensure better
administrative and functional management of the affairs of the society,
which only seeks to advance, the cooperative movement and not
thwart the same.
18.1. True, there is certain degree of control exercised by
the State and its officials insofar as disciplinary action and transfer is
concerned, it only affects the measure of autonomy. However, it
cannot be said that mere constitution of a common cadre of service
and exercising certain degree of control in the matter of disciplinary
action, transfer, pay etc., cooperative societies are completely denuded
of their autonomous nature of functioning. Even before the
amendments in the Constitution of India, as referred to above,
management of registered societies vests only in their elected bodies
in the Board.
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19. The object behind giving power to the government to form a
common cadre appears to secure the proper management of the
societies, and cannot be construed as unreasonable or adverse to the
interest of the society and thus reasonable restrictions under Article
19(4) of the Constitution of India. Constitution of a recruitment bureau
under Section 74 is intended only to streamline transparent process of
recruitment by the bureau without interference by individual
Cooperative Societies or anyone. Section 74 does not apply to common
cadre employees and applies only to entry level posts which are to be
filled up by direct recruitment. Section 73 empowers the Cooperative
Societies to appoint paid officers and servants. Recruitments are
governed by provisions contained under the Cooperative Societies
Rules.
20. It can thus be stated that with a fairly high degree of
autonomy enjoyed by Cooperative Societies under the scheme of the
Tamil Nadu Cooperative Societies Act in all its affairs, certain degree of
control is in the hands of the State insofar as constitution of common
cadre of services is concerned. The Rules are being framed to regulate
the process of recruitment, appointment, transfer, disciplinary action,
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pay etc.
20.1. The aforesaid scheme of the Act and Rules do not impair
the autonomous functioning of the Cooperative Societies but are
intended to only ensure an effective, streamlined, transparent,
accountable administration and management of the society. Such a
scheme of the act does not altogether take away complete
autonomous functioning of the cooperative society, yet reserves to the
Cooperative Societies great deal of autonomy.
21. The petitions are sans substratum and accordingly
dismissed. There will be no order as to costs. Consequently, WMP
Nos.35813 and 19354 of 2025 are closed.
(MANINDRA MOHAN SHRIVASTAVA, CJ.) (G.ARUL MURUGAN, J.)
05.03.2026
Index : Yes
Neutral Citation: Yes
tar
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WP Nos.31973 and 17071 of 2025
To
1.The Secretary to Government of Tamil Nadu,
Department of Cooperation, Food & Consumer Protection,
Fort St.George, Secretariat,
Chennai 600 009
2.The Registrar of Cooperative Societies,
No.170, N.V.Natarajan Maaligai,
EVR, Periyar Road, Kilpauk,
Chennai 600 010
3.The Administrator,
Transport Corporation Employees Cooperative Thrift &
Credit Society Limited No.X-367,
No.488, 489, 1
st
Floor, Sathguru Complex,
Anna Salai, Nandanam,
Chennai 600 035
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THE HON'BLE CHIEF JUSTICE
AND
G.ARUL MURUGAN , J.
(tar)
Pre- delivery order in
WP Nos.31973 and 17071 of 2025
05.03.2026
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Legal Notes
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