"Public Duty On Government Pay Dues": Madras High Court Directs Government To Pay Gratuity And Other Benefits To Employees Of Co-Operative Societies

The petitioners were employees of three Co-Operative societies- a) Puducherry Public Servants Co-operative Stores P-456; b) Ariyankuppam Public Servants Stores P-455; and c) Bharathi Co-operative Consumer Stores Ltd., P-564 and were employed as Salesman/ Assistant Clerk/ Supervisors etc. Their period of service was between 20-25 years.

According to the bye-laws of the Societies, the employee who had put in more than five years of continuous service in the store was eligible for gratuity, apart from other benefits like earned leave encashment, and EPF contributions, ESI benefits, and other admissible entailments.

Since the stores were running at a loss, by March and April of 2007, the salaries payable to the petitioners were stopped, and ultimately on 22.01.2013, the Government had ordered for winding up of all these Stores. Attempts were made to accommodate employees including the petitioners in other Stores and Societies but the same was futile. The present petition was filed for disbursement of their unpaid salaries, gratuity, earned leave encashment, EPF Contributions, ESI benefits and other admissible entailments along with interest.

The petitioners argued that since these stores were fully owned by the Government, and since the Government could not rehabilitate or provide alternate employment for the petitioner, it was bound to settle the dues. The statutory dues of gratuity cannot be avoided or averted.

The respondents on the other hand contended that the petition was not maintainable in view of the decision in K.Marappan Vs. The Deputy Registrar of Co-operative Societies and Another, where a Five Judge Bench of the Madras High Court had held that a Society could not be characterised as a State and that the service conditions of its employees governed by its bye-laws, cannot be enforced through a Writ Petition.

The court was however not inclined to follow this view and observed that even in the decision quoted by the respondents, it was held that even though Society cannot be Characterized as a State within the meaning of Article 12 of the Constitution, a writ was maintainable to enforce a statutory public duty cast upon the Society. In the present case, since there was a public duty upon the Government, the petition was maintainable.

The court relied on the decision in Parimal Chandra Raha and Others v. Life Insurance Corporation of India and Others (1995) and State of Jharkhand and Another v. Harihar Yadhav & Others (2014) and went on to lift the veil between the Societies and the Government. The court held that there was a public duty upon the Government of Puducherry to pay the dues of the petitioner in connection with their services in the respective stores.

Case Title: K Ravichandran and others v. The Chief Secretary and others

Case No: W.P No. 12505 of 2015 and others

Citation: 2022 LiveLaw (Mad) 239

Counsel for Petitioners: Mr V Vijayshankar