WA/2023/2026 of The Managing Director Vs P.Padmanaban on 10 September 2026

Judgment

(Judgment of the Court was delivered by S.M.Subramaniam J.) Under assail is the writ order dated 02.04.2026 passed in W.P.No.19725 of 2022.

2. The Tamil Nadu Co-operative Federation Limited is the appellant before this Court. The first respondent herein filed a writ of Mandamus seeking a direction to settle his retirement benefits ie., Gratuity, Provident Fund, Earned Leave Salary, Security Deposit and other monetary benefits of Rs.18,30,600/- with interest of 12 per cent p.a from the date of retirement till payment to the petitioner in the light of the decision of this Court reported in 2015 (6) MLJ 684.

Brief Facts

3. The first respondent served as Junior Assistant and resigned from the post on 11.01.2019. The resignation was accepted by the Management of the Co-operative Society and he was relieved from service. However, the terminal benefits due to him had not been settled. Thus, the first respondent directly approached this Court by instituting a writ of Mandamus seeking a direction to settle his terminal benefits. The Writ Court allowed the writ petition citing the judgment of this Court reported in A.Sengodan Vs. The Registrar of Co-operative Societies, Chennai1. Contention of the Appellant

4. Mr.S.Kanmani Annamalai appearing on behalf of the appellant would submit that the writ petition is not maintainable in view of the judgment of the larger Bench of this Court in the case of K. Marappan v. The Deputy Registrar of Co-operative Societies, Namakkal2. Pertinently, a direction was issued by the Writ Court to pay terminal benefits. As far as the appellant is concerned, the first respondent was not an employee served in the appellant Federation. Thus the direction issued is not in consonance with the provisions of the Act. He further contend that the Society employees are 1 (2015) 6 MLJ 684 2 (2006) 4 CTC 689

governed under the Byelaws of the Society and therefore the settlement of terminal benefits are to be made in accordance with the procedures with the Act and Rules. The Writ Court, merely relying on the Division Bench judgment in the Sengodan’s case cited supra allowed the writ petition and thus the present appeal has been instituted. Contention of 1

st Respondent

5. Mr.M.S.Palaniswamy, learned counsel appearing for the first respondent would mainly contend that non-settlement of terminal benefits including Gratuity, Provident Fund, Earned Leave Salary, Security Deposit and other monetary benefits are to be construed as violative of Article 21 of the Constitution of India and therefore the writ petition is entertainable. In this context, he would rely on Sections 78 and 79 of the Tamil Nadu Cooperative Societies Act (hereinafter referred to as ‘the Act’), which speak about gratuity and provident fund. He would further submit that there was no valid reason for non-settlement of terminal benefits in favour of the first respondent, which resulted in filing of the writ petition. Learned Single Judge has allowed the writ petition relying upon the Division Bench judgment and thus the writ appeal is to be rejected. Learned counsel relied on the judgment of a Division Bench of this Court dated 12.10.2020 in W.A.No.234 of 2020 (The Registrar of Cooperative Societies and Others -vs- N.Ravichandran).

Discussions

6. This Court has considered the rival submissions made between the parties to the lis.

7. Though the Division Bench of this Court in the case of The Registrar of Co-operative Societies (Housing) and two others -vs- N.Ravichandran (in W.A.No.234 of 2020) dated 12.10.2020 issued a direction to settle the terminal benefits in the said case by referring the larger Bench judgment in Marappan’s case, this Court has to consider the spirit of the larger Bench judgment and find out whether a writ petition is maintainable under Article 226 or not. It is all about following the judgment of the larger Bench of this Court in the case of Marappan cited supra. The directions issued in Marappan’s case are bound to be adopted in its letter and spirit and further to find out, whether the order passed by the co-equal Bench is consonance with the judgment of the Larger Bench is to be considered.

8. The principle is settled in the case of National Insurance Company Limited -vs- Pranay Sethi (2017 (16) SCC 680, wherein the Constitution Bench of the Hon’ble Supreme Court of India ruled that, when Larger Bench judgment holds the field then the judgment passed by the co-equal Bench need not be followed by another co-equal Bench. Larger Bench judgment is to be followed as precedent.

9. Let us now consider the dictum made by the Five Judges (Larger Bench) of High Court of Madras in the case of K. Marappan v. The Deputy Registrar of Co-operative Societies, Namakkal (2006) 4 CTC 689. For better understanding of the directives issued in the said case, Para 50 of the judgment is extracted hereunder: “ 50. From the above discussion, the following propositions emerge:-

(i) If a particular co-operative society can be characterised as a "State" within the meaning of Article 12 of the Constitution (applying the tests evolved by the Supreme Court in that behalf), it would also be “an authority” within the meaning and for the purpose of Article 226 of the Constitution. In such a situation, an order passed by a society in violation of the bye- laws can be corrected by way of writ petition.

(ii) Applying the tests in Ajay Hasia it is held that the respondent society carrying on banking business cannot be termed as an instrumentality of the State within the meaning of Article 12 of the Constitution.

(iii) Even if a society cannot be characterised as a "State" within the meaning of Article 12 of the Constitution, even so a writ would lie against it to enforce a statutory public duty cast upon the society. In such a case, it is unnecessary to go into the question whether the society is being treated as a “person”

or “an authority” within the meaning of Article 226 of the Constitution and what is material is the nature of the statutory duty placed upon it and the Court will enforce such statutory public duty. Although it is not easy to define what a public function or public duty is, it can reasonably said that such functions are similar to or closely related to those performable by the State in its sovereign capacity.

(iv) A society, which is not a "State" would not normally be amenable to the writ jurisdiction under Article 226 of the Constitution, but in certain circumstances, a writ may issue to such private bodies or persons as there may be statutory provisions which need to be complied with by all concerned including societies. If they violate such statutory provisions a writ would be issued for compliance of those provisions.

(v) Where a Special Officer is appointed in respect of a co- operative society which cannot be characterised as a "State" a writ would lie when the case falls under Clauses (iii) and (iv) above.

(vi) The bye-laws made by a co-operative society registered under the Tamil Nadu Co-operative Societies Act, 1983 do not have the force of law. Hence, where a society cannot be characterised as a "State", the service conditions of its employees governed by its bye-laws cannot be enforced through a writ petition.

(vii) In the absence of special circumstances, the Court will not ordinarily exercise power under Article 226 of the Constitution of India when the Act provides for an alternative remedy.

(viii) The decision in M.Thanikkachalam v. Madhuranthagam

Agricultural Co-operative Society, 2000 (4) CTC 556 is no longer good law, in view of the decision of the seven-Judge Bench of the Supreme Court in Pradeep Kumar Biswas case and the other decisions referred to here before.”

10. Clause (i) to Para 50 indicates that if a particular society is wholly owned or the Government possess more than 51% of shares, then such cooperative society can be characterised as “State” within the meaning of Article 12 of the Constitution of India.

11. Clause (ii) to Para 50 emphasises the tests contemplated by the Hon’ble Supreme Court of India in the case of Ajay Hasia Etc vs Khalid Mujib Sehravardi & Ors. (191) 1 SCC 722. The Supreme Court in the said case ruled that a Cooperative Society carrying on banking business cannot be termed as an instrumentality of the “State” within the meaning of Article 12 of the Constitution of India.

12. Clause (iii) to Para 50 carves out an exception by stating that a writ would lie against a cooperative society to enforce a statutory public duty cast upon the society. In respect of this clause, a distinction is to be made. “Statutory public duty” is a duty to be performed towards the public in general

by a cooperative society and would not cover the service matters of the employees of a cooperative society which is governed under Rule 149 of the Tamil Nadu Cooperative Societies Rules 1988 and the special bye-laws approved by the Registrar of Cooperative Societies prescribing service conditions. Therefore, the “statutory public duty” cast upon a society cannot be expanded so as to entertain a writ petition filed by the employees for redressal of their grievance relating to their service matters. The service related grievance of the employees of the cooperative society cannot be termed as “statutory public duty” cast upon the society.

13. Clause (iv) to Para 50 reiterates that a society which is not a ‘State’ would clearly not be amenable to writ jurisdiction. Pertinently, a writ may lie against private bodies on certain exceptional circumstances and in this regard, the Hon’ble Supreme Court of India carves out the principles and circumstances under which a writ would lie and directions can be issued against the private bodies. However, service related grievances cannot be fit into ‘public duty’ cast upon a co-operative society.

14. Importantly, in Clause (vi) to Para 50 the Larger Bench ruled that the byelaws made by a registered cooperative society do not have the force of law. Hence, where a society cannot be characterised as a

“State”, service conditions of the employees governed by its byelaws cannot be enforced through a writ petition.

15. In the context of the present case, the direction in Clause (vi) to Para 50 of the judgment in Marappan’s case would squarely apply. The larger Bench in unequivocal terms reiterated that the service conditions of the employees of the cooperative society are governed under its byelaws, which are approved by the Registrar of Cooperative Societies under the provisions of the Tamil Nadu Cooperative Societies Act. Once the byelaws relating to the service conditions are approved, then no writ would lie to redress the service related grievance of an employee under Article 226 of the Constitution of India.

16. That apart, the byelaws are approved in exercise of the powers conferred under the Act. Byelaws are framed by virtue of the guidelines issued under Rule 159 of the Tamil Nadu Cooperative Society Rules 1988.

17. Therefore, the service conditions and service related issues are either contemplated or governed under the Rules or byelaws of a Cooperative Society, as the case may be. Thus, service related grievance of the employees of the Cooperative Societies cannot be redressed by entertaining a writ petition under Article 226 of the Constitution of India since a cooperative society registered under the Act is not a “State” within the meaning of Article 12 of the Constitution of India. Every violation of Statutes, Rules or Byelaws cannot be termed as violation of statutory public duty cast upon the society under Clause (ii) to Para 50 of the larger Bench judgment. Thus, the employees of the cooperative societies are bound to redress their grievances at the first instance by exhausting the alternative remedy contemplated under the byelaws or under Section 153 of the Tamil Nadu Cooperative Societies Act and thereafter approach the Court of law.

18. In Clause (vii) to Para 50, the Larger Bench reiterated that the Court will not ordinarily exercise the powers under Article 226 of the Constitution of India when the Act provides for alternative remedy. In respect of service matters, there are no special circumstances warranting exercise of powers under Article 226 of the Constitution of India by the High Court. Therefore, service related grievance of the employees are to be redressed by exhausting the alternative remedy contemplated under the Statute at the first instance and no writ is maintainable before the High Court under Article 226 of the Constitution of India.

19. The Larger Bench of this Court in Marappan’s case held that the decision in M.Thanikachalam vs. Maduranthakam Agricultural Producers Co-operative Society (2000) 4 CTC 556 is no longer good law in view of the decision of the seven-Judge Bench of the Supreme Court in Pradeep Kumar Biswas’s case (2002) 5 SCC 111.

20. Regarding exhausting of alternative remedy contemplated under the Statute, the Apex Court emphasises that entertaining a writ petition and adjudication of disputed facts are not desirable, which may result in causing prejudice to either of the parties. The disputed facts are to be adjudicated based on the documents in original and evidences to be produced. The High Court in exercise of the powers of judicial review under Article 226 of the Constitution of India cannot conduct a roving enquiry, merely based on the affidavit or selected copies of documents. Such disputed facts cannot be adjudicated, as there is likelihood of causing miscarriage of justice in the event of undertaking any such adjudication. This exactly is the reason why the Constitutional Courts have time and again reiterated that an aggrieved person, at the first instance, has to exhaust the alternative remedy contemplated under the Statute. The factual finding made by the original authority and the appellate / revisional authority under the Statute are of greater assistance to the High Court for the purpose of exercise of judicial review in an effective manner.

21. As far as the Cooperative Society employees are concerned, there are various mechanisms to deal with service matters as well as disciplinary matters. But High Court may not be in a position to adjudicate those issues since there is a possibility of several reasons for a cooperative society for settling or not settling the terminal benefits, as the case may be. Such reasons are to be considered by the competent authority under the Act and only after passing a speaking order by such authorities under the Act, the High Court will be in a position to entertain the writ petition. This being the legal safeguards provided not only to the employees but also to the management of the Cooperative Society, entertaining a writ petition without exhausting the alternative remedy is not desirable.

22. In the present case, the writ order has been passed relying on the judgment of the Division Bench in the case of A.Sengodan Vs. The Registrar of Co-operative Societies, Chennai (2015) 6 MLJ 684 cited supra. However, the spirit of the Larger Bench judgment of this Court as well as the seven-judge Bench judgment of the Hon’ble Supreme Court have not been considered by the writ Court. Therefore, this Court is of the considered view that the said Division Bench judgment relied on by the Writ Court cannot be construed as a precedent to be followed in view of the judgment of the Larger Bench of this Court in Marappan’s case cited supra.

23. In view of the above discussions, the writ order impugned dated 02.04.2026 made in W.P.No.19725 of 2022 is set aside. However, the first respondent is at liberty to prefer a revision petition under Section 153 of the Tamil Nadu Cooperative Societies Act to redress his grievance, if any exists. In the event of filing any such review petition, the competent authority under the Act shall entertain the same without reference to the delay and decide the issues on merits and in accordance with law as expeditiously as possible.

24. The writ appeal is allowed accordingly. No costs. Consequently, connected miscellaneous petition is closed. (S.M.S.,J.) (K.G.R.,J.) 10-09-2026 Index: Yes Speaking order Neutral Citation: Yes KST

To

1. The Registrar Of Co-operative Society(housing) No.48, Ritherdon Road, Vepary, Chennai 600 007.

2. The Deputy Registrar Of Co-operative Society(housing) Cuddalore.

3. II 631, Thirukovilur Co-operative Housing Society, Rep by its President, Thirukovilur-605 757.

S.M.SUBRAMANIAM J. AND KRISHNASWAMY GOVINDARAJAN J. KST WA No. 2023 of 2026 AND CMP NO. 17584 OF 2026 10-09-2026