APHC010701572018 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3396] WEDNESDAY, THE THIRD DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE DR JUSTICE VENKATA JYOTHIRMAI PRATAPA WRIT PETITION No. 36282/2018 Between: S.VENKAT REDDY, S/O SRIRAMA REDDY, AGED ABOUT 62 YEARS, RIO DONDAPADU, ELURU, WEST GODAVARI DISTRICT. ...PETITIONER AND 1. THE STATE OF ANDHRA PRADESH COOPERATIVE DEPARTMENT, REPRESENTED BY ITS PRINCIPAL SECRETARY SECRETARIAT, VELAGAPUDI, AMARAVATHI, GUNTUR DISTRICT. 2. THE DISTRICT COOPERATIVE OFFICER, ELURU, WEST GODAVARI DISTRICT. 3. THE DEPUTY REGISTRAR OF COOPERATIVE SOCIETIES, ELURU, WEST GODAVARI DISTRICT. 4. THE COOPERATIVE CENTRAL BANK EMPLOYEES COOPERATIVE SOCIETY LIMITED, NO.142, RR PETA, ELURU, WEST GODAVARI DISTRICT, REP. BY ITS SECRETARY. 5. J N V V S D V P SRINIVAS RAO, S/O LATE RATNAM, AGED ABOUT 47 YEARS, SECRETARY, COOPERATIVE CENTRAL BANK EMPLOYEES COOPERATIVE SOCIETY LIMITED NO.142, RR PETA, ELURU,WEST GODAVARI DISTRICT. ...RESPONDENT(S): Counsel for the Petitioner: 1. V V N NARAYANA RAO Counsel for the Respondent(S): 1. MEKA RAHUL CHOWDARY 2. GP FOR COOPERATION (AP) The Court made the following: ORDER: This Writ Petition is filed under Article 226 of Constitution of India with the following prayer for: 2 “.... a Writ of Mandamus declaring the 4th respondent in not releasing the gratuity and leave encashment in favour of the petitioner in terms of the compromise entered in W.P.M.P.No.8185 of 2013 in W.P.No.38354 of 2012 and contrary to the general body resolution of the 4th respondent society dated 30.9.2012 is illegal, arbitrary, unconstitutional and in violation of Articles 14 and 21 of the Constitution of India and consequently direct the respondents to release/pay the gratuity and leave encashment in favour of the petitioner as per the compromise entered in W.P.M.P.No.8185 of 2013 in W.P.No.38354 of 2012 and as per the General Resolution of the 4th respondent society dated 30.9.2012 forthwith.” 2. Heard Sri V.V.N.Narayana Rao, learned counsel for the Petitioners, Sri M.Rahul Chowdary, learned Standing Counsel for Respondent No.4 and the learned Government Pleader for Cooperation. 3. Learned counsel for the Petitioners would submit that Petitioner No.1 was appointed as a Clerk in Respondent No.4 – Society, in the year 1982 and subsequently promoted as an Accountant and retired from service on 30.09.2014, on attaining the age of superannuation. Learned counsel for the Petitioners would further submit that, Respondent No.4, was established under the provisions of A.P.Cooperative Societies Act, 1964, as such it is a State within the meaning of Article 12 of the Constitution of India. Learned counsel would further submit that, except the gratuity and leave encashment, Respondent No.4 – Society had settled all the retirement benefits of Petitioner No.1. Several representations of Petitioner No.1 in that regard, proved futile. Learned counsel for the Petitioners would further submit that, questioning the inaction of Respondent No.4 – Society, Petitioner No.1 filed W.P.No.10698 of 2018 before this Court and the same was disposed of vide Order dated 02.04.2018, at the admission stage, directing Respondent No.4 herein to consider the claim of Petitioner No.1 herein and to take appropriate steps. Pursuant to the said Order, Respondent No.4 had issued a notice 3 dated 25.05.2018 to Petitioner No.1 asking him to clear the dues of Rs.3,81,537-44 ps for settlement of terminal benefits, though Petitioner is No.1 is liable to pay Rs.60,286/- only. Learned counsel would further submit that, as the gratuity which was amended in the General Body Meeting dated 31.07.1988 was not given effect to the employees of Respondent No.4 – Society, Petitioner No.1 and another employee had filed W.P.No.38354 of 2013 before the Composite High Court of Andhra Pradesh, Hyderabad, and during pendency of the said writ petition, Respondent No.4 – Society and the Petitioners in the said petition, had entered into a compromise and also agreed to pay gratuity to them as per the Award of the DCCB, Eluru. In view of the said compromise, W.P.No.38354 of 2012 was closed vide Order dated 03.06.2014. As Respondent No.4 had not paid the gratuity to Petitioner No.1, he got issued a legal notice dated 16.08.2018 to the President of Respondent No.4 – Society, who in turn got issued a reply dated 31.08.2018 stating that, the-then Management was unaware of the compromise entered by the previous Management, which is nothing but depriving the rights of the Petitioners. 4. Per contra, learned Standing Counsel for Respondent No.4 would submit that the writ is not maintainable either in fact or in law. Learned Standing Counsel would further submit that, no such terms of compromise as alleged to have entered into between Petitioners in W.P.No.38353 of 2012 and Respondent No.4 – Society. It is further submitted that the Award of DCC Bank which was relied on by the Petitioners was passed under Section 18 of 4 the Industrial Disputes Act, 1974 and the same cannot be made applicable to the employees of Respondent No.4 – Society. Learned Standing Counsel would further submit that, in the light of the general body resolution dated 05.03.2017, which set aside the earlier resolution dated 30.09.2012, which was passed by playing fraud on the Members of the Society, the earlier resolution is not enforceable. It is further submitted that Respondent No.4 – Society was started for the welfare of the employees of DCC Bank and the Awards / Agreements are meant for the employees of the Bank along and not for the employees of the Society. Learned Standing Counsel would further submit that, the earlier Management was misled by Petitioner No.1 and got passed the resolution dated 30.09.2012. Hence, prayed for dismissal of the petition. 5. Learned Government Pleader for Cooperation would submit that, since Respondent No.4 is an Employees’ Cooperative Society and the dispute is with regard to its employee, the same has to be referred to the concerned Registrar, but not to this Court by way of a Writ. It is further submitted that Respondent No.4 – Society does not come under the purview of Article 12 of the Constitution of India. 6. Learned counsel for the Petitioners, in reply, would submit that, Respondent No.4 – Society ignored the decision taken by the previous Management and has taken a different stand, which is no tenable under law. In support of his contentions learned counsel has placed reliance on the 5 judgments of the Hon’ble Supreme Court of India in Mohinder Singh Gill and another1, wherein, it was held as under: “8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (1): "Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to, do. Public orders made by public authorities are meant to have public effect and are intended to effect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself." Learned counsel has further placed reliance in Suzuki Parasrampuria Suitings Private Limited vs. Official Liquidator of Mehendra Petrochemicals Limited and others2, wherein, the Hon’ble Supreme Court held as follows: “12. A litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands.....” Learned counsel for the Petitioners has placed reliance on the judgment of the Hon’ble Supreme Court in Ajay Hasia and others vs. Khalid Mujib Sehravardi and others3, wherein, it was held as under: 1 (1978) 1 SCC 405 2 (2018) 10 SCC 707 3 (1981) 1 SCC 722 6 “9. The tests for determining as to when a corporation can be said to be a instrumentality or agency of Government may now be called out from the judgment in the International Airport Authority's case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority's case as follows (1) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of Government." (2) "Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character." (3) "It may also be a relevant factor.......whether the corporation enjoys monopoly status which is the State conferred or State protected." (4) "Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality." (5) "If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government." (6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government." If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the International Airport Authority's case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12. 7 ***** 15. It is in the light of this discussion that we must now proceed to examine whether the Society in the present case is an "authority" falling within the definition of "State" in Article 12. Is it an instrumentality or agency of the Government? The answer must obviously be in the affirmative if we have regard to the Memorandum of Association and the Rules of the Society. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is in charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. It will thus be seen that the State Government and by reason of the provision for approval, the Central Government also, have full control of the working of the Society and it would not be incorrect to say that the Society is merely a projection of the State and the Central Governments and to use the words of Ray, C.J. in Sukhdev Singh's case (supra), the voice is that of the State and the Central Governments and the hands are also of the State and the Central Governments. We must, therefore, hold that the Society is an instrumentality or agency of the State and the Central Governments and it is an 'authority' within the meaning of Art. 12. It is in the light of this discussion that we must now proceed to examine whether the Society in the present case is an "authority" falling within the definition of "State" in Article 12. Is it an instrumentality or agency of the Government? The answer must obviously be in the affirmative if we have regard to the Memorandum of Association and the Rules of 8 the Society. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is in charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. It will thus be seen that the State Government and by reason of the provision for approval, the Central Government also, have full control of the working of the Society and it would not be incorrect to say that the Society is merely a projection of the State and the Central Governments and to use the words of Ray, C.J. in Sukhdev Singh's case (supra), the voice is that of the State and the Central Governments and the hands are also of the State and the Central Governments. We must, therefore, hold that the Society is an instrumentality or agency of the State and the Central Governments and it is an 'authority' within the meaning of Art. 12.” 7. Admittedly, Petitioner No.1, who filed the writ petition, is an employee of Respondent No.4 – Society. During pendency of the present petition, Petitioner No.1 died, as such, Petitioner Nos.2 to 4, who are his legal representatives, were brought on record as per the orders of this Court in I.A.No. 1 of 2019 dated 11.12.2019. There is no dispute about the death of Petitioner No.1. 9 8. Originally the present writ petition was filed by Petitioner No.1 seeking a direction to the Respondents to pay the gratuity and leave encashment of Petitioner No.1. However, the claim is restricted to payment of gratuity only. It is pertinent to mention that, in the General Body Meeting held on 31.07.1988, Respondent No.4 – Society got amended the bye-laws and gratuity, as per which, every permanent employee of the Society shall be eligible to the benefit of gratuity scheme, on the death while in service, on the basis of 15 days pay for each for year of service with a minimum of five months pay and maximum of fifteen months pay to his heirs, executors, assignees or nominees; and also on becoming physically or mentally disabled to continue in service, resignation, voluntary retirement, termination of service for whatever reason or superannuation. Admittedly, Petitioner No.1 retired from service on 30.09.2014. Therefore, the above amendment was in subsistence as on the date of retirement of Petitioner No.1, on attaining the age of superannuation. Since the said amendment was not given effect to Petitioner No.1 and another employee of Respondent No.4 – Society, they moved this Court by filing W.P.No.38354 of 2012. During the pendency of the said Writ Petition, Respondent No.4 – Society and the Petitioners therein, had entered into a compromise, wherein, the Society under Resolution No.5, had agreed to implement the Award of DCC Bank, Eluru dated 18.09.2010 and to pay the gratuity to Petitioner No.1 herein and another, with effect from 01.11.2011. In that view, W.P.M.P.No.8185 of 2013 in W.P.No.38354 of 2012 was filed to record the said compromise. Accordingly, this Court, while 10 considering the said compromise, vide Common Order dated 03.06.2014, closed the said writ petition. For ready reference, the said order is extracted hereunder: “Both the petitioners, being the employees of the respondent Society, filed W.P.No.4007 of 2012 assailing the action of Respondent Society in refusing to revise the salaries of the petitioners in terms of bipartite settlement entered into between the employees and the Society earlier. Similarly, the petitioners also filed W.P.No.38354 of 2012 questioning the action of the respondent Society in not extending the benefit of gratuity which is said to be in violation of bylaw No.23(2)(l) dated 31.07.1998. Now the petitioners came up with a miscellaneous petition W.P.M.P.No.8185 of 2013 in W.P.No.38354 of 2012 representing that the petitioners on one hand and the respondent Society on the other, have amicably resolved the issue, inasmuch as the Society has agreed to the demands of the petitioners to extend the benefit of gratuity as well as the revised pay. A perusal of the record shows that the respondent Society passed a resolution dated 30.09.2012 to meet the demands of the petitioners thereby providing them the service benefits which are the subject matter of the writ petitions. In the light of the submissions made by the learned counsel for the petitioners and the learned Standing Counsel for the respondent Society and in terms of W.P.M.P.No.8185 of 2013, this Court is of the opinion that nothing survives in these writ petitions to be adjudicated upon and are accordingly closed as having become infructuous.” 9. Subsequent to the passing of the above common order, the Management of Respondent No.4 – Society has changed and rejected the said proposal. In view of the judicial order passed by this Court by recording the compromise between Respondent No.4 – Society on one hand and Petitioner No.1 and another employee on the other, which attained finality, as no appeal has been preferred against the same, Respondent No.4 – Society, at this juncture, cannot reject the said proposal, on the flimsy ground that the 11 New Management is not aware of the said compromise. As held by the Hon’ble Supreme Court in Suzuki Parasrampuria’s case, referred to supra, Respondent No.4 cannot take contradictory stands in the same case. It cannot be permitted to approbate and reprobate on the same facts. What was agreed by the-then Management of Respondent No.4 – Society before the Court by way of a compromise binds on the subsequent Management also. 10. The activities of Cooperative Central Bank Employees’ Cooperative Society are generally confined to a single State and are governed by the respective State Cooperative Societies Act. They are also regulated by the State Government through registration, audit and rule making processes. It is the contention of the learned counsel for the Petitioner that, as was held by the Hon’ble Supreme Court in Ajay Hasia’s case referred to supra, since Respondent No.4 – Society was established under the provisions of A.P.Cooperative Societies Act, 1964, it can be construed as a State Agency, which is within the meaning of Article 12 of the Constitution of India. Be that as it may, though the learned counsel representing both sides vehemently argued on this issue, in view of the Common Order dated 03.06.2014 passed by the Composite High Court in W.P.Nos.4007 and 38354 of 2012, this Court is not inclined to express anything on this point. 11. Needless to say that, compromise recorded by the Court between the Petitioner and the earlier Management binds the successors in office unless it is against the statute. Here, the issue is regarding the gratuity which is purely based on the terms between the employer and the employee, Furthermore, 12 Petitioner herein is the employee of Respondent No.4 – Society but not the Bank. In that view, the present Management of the Society cannot take a view which is diametrically opposite and contrary to the terms agreed and recorded in the compromise in the earlier litigation. 12. In view of the foregoing discussion and the judgments referred to supra, this Court is of the considered view that the Petitioner Nos.2 to 4, who are the legal representative of deceased Petitioner No.1, who was an Accountant of Respondent No.4 – Society, are entitled to gratuity. 13. In the result, the Writ Petition is allowed. Respondents are directed to pay the gratuity of deceased Petitioner No.1 to Petitioner Nos.2 to 4, who are his legal representatives, as per the compromise entered in W.P.M.P.No.8185 of 2013 in W.P.No.38354 of 2012 and as per the General Body Resolution of Respondent No.4 – Society, dated 30.09.2012 forthwith. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed. _________________________________________ Dr.JUSTICE VENKATA JYOTHIRMAI PRATAPA Date:03.09.2025 Dinesh 13 HON’BLE DR. JUSTICE VENKATA JYOTHIRMAI PRATAPA W.P.No.36282 of 2018 Dt.03.09.2025 Dinesh