Supreme Court settles Qualification Criteria for Cooperative Bank Clerk Posts: Kerala Public Service Commission vs. K.N. Radhamani (2021)

Date of the Judgment: 6 September 2021

Citation: 2021 INSC 562

Judges: L. Nageswara Rao, J., Aniruddha Bose, J.

Can in-service candidates with a Secondary School Leaving Certificate (SSLC) apply for the post of clerk/cashier in cooperative banks, or is a bachelor’s degree mandatory? The Supreme Court of India addressed this crucial question, which impacts the career prospects of numerous in-service employees in Kerala. This case revolves around the interpretation of the Kerala Co-operative Societies Rules, 1969, and various government orders concerning the qualification criteria for these posts. The judgment was delivered by a two-judge bench comprising Justice L. Nageswara Rao and Justice Aniruddha Bose, with the opinion authored by Justice Aniruddha Bose.

Case Background

The dispute centers on the required educational qualifications for in-service candidates seeking the positions of clerk/cashier in various cooperative banks in Kerala. The Kerala Public Service Commission (KPSC) insisted on a bachelor’s degree for these posts, citing Rule 186 of the Kerala Co-operative Societies Rules, 1969, which stipulates graduation for posts with a starting pay of Rs. 250/- and above per month. However, in-service candidates argued that for them, an SSLC or equivalent qualification was sufficient, especially considering the 50% reservation for in-service employees under Rule 187 of the same rules.

Two employment notifications are at the heart of this case: one dated 26th October 1999, and another dated 25th April 2006. The 1999 notification required a B.A./B.Sc./B.Com degree with HDC or JDC, or B.Com with Cooperation or B.Sc. (Cooperation and Banking) of the Kerala Agricultural University, along with three years of regular service in the respective cadre of the Primary Co-operative Society. The 2006 notification had similar educational requirements but also mandated that the employee be in service not only on the date of application but also on the date of appointment.

Timeline:

Course of Proceedings

Several writ petitions were filed in the High Court of Kerala by SSLC-qualified in-service candidates after their candidatures were rejected by the KPSC. The KPSC argued that since the starting pay for the posts was above Rs. 250/-, a graduation degree was mandatory as per Rule 186(1) of the Kerala Co-operative Societies Rules, 1969. A Division Bench of the Kerala High Court in Valsala Devi v. Leela Bhai [(2002) 3 KLT SN 18] had previously upheld the KPSC’s position, stating that the pay scale on the date of recruitment should determine the required qualifications. This view was reiterated in Public Service Commission v. Ramesan [(2005) SCC Online Ker 297]. However, a Full Bench of the Kerala High Court, upon reference, overturned these decisions, ruling in favor of the in-service candidates. The Full Bench held that Rule 186, which pegs eligibility to a pay of Rs. 250/-, was not workable and that the in-service candidates with SSLC and JDC with three years of experience were eligible for the posts.

Legal Framework

The case primarily involves the interpretation of the following legal provisions:

• Section 109 of the Kerala Co-operative Societies Act, 1969: This section empowers the State Government to make rules to carry out the purposes of the Act. Specifically, sub-section (2)(xv) allows for rules regarding the qualifications of employees of societies. The provision reads as:
  
  “109. Power to make rules: – (1) The Government may, for the whole or any part of the State and for any class of societies, after previous publication, by notification in the Gazette, make rules (either prospectively or retrospectively) to carry out the purpose of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: – xxx xxx xxx (xv) the qualifications of employees of societies xxx xxx xxx”
• Section 80(3) of the Kerala Co-operative Societies Act, 1969: This section empowers the State Government to make rules regarding the qualifications, remuneration, allowances, and other conditions of service for officers and servants of different classes of societies. At the time, it stated:
  
  “80(3) The Government shall, in consultation with the State Co -operative Union, make rules (either prospectively or retrospectively) regulating the qualification, remuneration, allowances and other conditions of service of the officers and servants of the different classes of societies specified in Sub -S. (1).”
• Rule 186(1) of the Kerala Co-operative Societies Rules, 1969: This rule specifies the qualifications for appointment to various posts. It stipulates that for posts with a starting pay below Rs. 250/-, the qualification is SSLC or its equivalent with successful completion of the Sub Personal Co-operative Training Course (Junior Diploma in Co-operation). The relevant portion states:
  
  “186. Qualifications: (1) No person shall be eligible for appointment in any post unless he possesses the qualifications prescribed for the post as shown below: – xxx xxx xxx (ii) Other supervisory and Ministerial other than those requiring Technical Qualifications, the Starting pay which is below Rs. 250. S.S.L.C. or its posts equivalent and successful completion of the Sub Personal Co- operative Training Course (Junior Diploma in Co- operation ) xxx xxx xxx”
• Rule 187 of the Kerala Co-operative Societies Rules, 1969: This rule provides for the reservation of 50% of vacancies in apex or central societies for employees of member societies with a minimum of three years of regular service and the required qualifications for the notified posts. The rule states:
  
  “187. Vacancies in Apex Society or Central Societies. – Notwithstanding anything contained in Rule 186, in appointments to apex societies or central societies, 50% of the vacancies shall be reserved to the employees of the member societies, of the respective apex society or central society as the case may be, having a minimum regular service of 3 years in any of the cadre and having the required qualification for the notified posts in the apex society or central society.”

Arguments

Arguments of the Kerala Public Service Commission (KPSC):

• The KPSC contended that Rule 186 of the Kerala Co-operative Societies Rules, 1969, mandates a bachelor’s degree for posts with a starting pay of Rs. 250/- and above. Since the posts of clerk/cashier in the cooperative banks had a starting pay above this threshold, a graduation degree was essential for all candidates, including in-service ones.
• The KPSC relied on the Government Order (GO) of 1986, which prescribed graduation as the qualification for direct recruitment to the posts of clerk/cashier. They argued that this GO was issued under Section 80 of the Kerala Co-operative Societies Act, 1969, and was therefore a valid rule.
• The KPSC also argued that the communication from the Registrar of Co-operative Societies in 1982, which stated that qualifications should be based on pre-revision scales of pay, was not valid and could not override the statutory rules.
• The KPSC cited the Supreme Court’s dismissal of the appeal in Valsala Devi (supra), arguing that it was a binding precedent on the issue of qualification criteria.

Arguments of the In-Service Candidates:

• The in-service candidates argued that Rule 187 of the Kerala Co-operative Societies Rules, 1969, specifically provided for a 50% reservation for them, and that the qualification for in-service candidates was SSLC with JDC and three years of experience, as per the GO of 1988.
• They contended that the GO of 1988, which was issued under Section 80 of the Kerala Co-operative Societies Act, 1969, specifically provided for different qualification criteria for in-service candidates, and that this GO should prevail over the general rule in Rule 186.
• The candidates argued that the pay scale mentioned in Rule 186 was outdated and not applicable in the present context. They relied on the 1982 communication from the Registrar of Co-operative Societies, which clarified that qualifications should be based on pre-revision scales of pay.
• They argued that the Supreme Court’s dismissal of the appeal in Valsala Devi (supra) was not a binding precedent as it was related to promotion and not direct recruitment, and that the Full Bench of the Kerala High Court had correctly interpreted the rules and regulations.

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the point of law raised in these appeals stands already concluded or not in view of the Coordinate judgment in the case of Valsala Devi (supra).
2. Whether the provisions of Rule 186 made under Section 109 of the 1969 Act and the scope of operation of the Regulations made under Section 80 thereof are applicable in this case.
3. Whether the lack of consultation with the State Co-operative Unions would render the Rules made under Section 80 not implementable.
4. Whether the KPSC was justified in prescribing eligibility criteria different from that prescribed by the statute.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

The court also considered the following legal provisions:

Judgment

The Supreme Court dismissed the appeals filed by the Kerala Public Service Commission (KPSC), upholding the Full Bench decision of the Kerala High Court. The Court held that for in-service candidates applying for the post of clerk/cashier in District/Central Co-operative Banks, the minimum eligibility criteria regarding qualification is SSLC or equivalent, and the floor-level pay stipulation in Rule 186 would not apply. The Court reasoned that the 1988 Service Regulations, made under Section 80(3) of the Kerala Co-operative Societies Act, 1969, specifically addressed the qualification criteria for in-service candidates in District/Central Co-operative Banks, and that these regulations should prevail over the general rule in Rule 186.

How each authority was viewed by the Court?

• Valsala Devi v. Leela Bhai [(2002) 3 KLT SN 18]: The Court distinguished this case, stating that it related to promotion and not direct recruitment. The Court also noted that the 1982 circular and the 1988 regulations were not considered in that decision.
• Public Service Commission v. Ramesan [(2005) SCC Online Ker 297]: The Court also distinguished this case, as it followed the decision in Valsala Devi and did not consider the 1982 circular and the 1988 regulations.
• State Of U. P. v. Manbodhan Lal Srivastava [(AIR) 1957 SC 912]: The Court relied on this case to hold that the lack of consultation with the State Co-operative Union did not render the rules made under Section 80(3) of the Act invalid.

The Court observed, “The 1982 circular read with the Service Regulation for employees of the Co-operative Banks reflected that there was no requirement of having a benchmark pay level for the posts of clerk/cashier under applicable rules for non-graduate in-service candidates to apply for the subject-posts.”

The Court also noted, “The provisions of Rule 186 relate to Co-operative Societies in general whereas the GO of 1988 relates to service Regulations of a sub-species – District/Central Co-operative Banks.”

Further, the Court stated, “In these circumstances, in our opinion, if an advertisement is made providing for eligibility criteria different from that statutorily prescribed, it would be open to the candidates to challenge the legality of such eligibility criteria.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the specific regulations made under Section 80(3) of the Kerala Co-operative Societies Act, 1969, which catered to the service conditions of employees of District/Central Co-operative Banks. The Court emphasized that the 1988 regulations, which prescribed SSLC with JDC and three years of experience as the qualification for in-service candidates, should prevail over the general rule in Rule 186. The Court also took into account the practical interpretation of the rules by the authorities over time, as evidenced by the 1982 circular and various government orders. The Court noted that the benchmark pay stipulation in Rule 186 was not intended to apply to in-service candidates, and it was not permissible for the KPSC to prescribe eligibility criteria that were beyond what was statutorily prescribed.

Logical Reasoning:

Key Takeaways

• For in-service candidates applying for the post of clerk/cashier in District/Central Co-operative Banks in Kerala, the minimum educational qualification is SSLC or its equivalent, along with a Junior Diploma in Co-operation (JDC) and three years of experience in an affiliated primary cooperative society.
• The floor-level pay stipulation in Rule 186 of the Kerala Co-operative Societies Rules, 1969, does not apply to in-service candidates applying for these posts.
• The 1988 Service Regulations, which were made under Section 80(3) of the Kerala Co-operative Societies Act, 1969, specifically address the qualification criteria for in-service candidates in District/Central Co-operative Banks, and these regulations prevail over the general rule in Rule 186.
• The Supreme Court emphasized that the Public Service Commission cannot prescribe eligibility criteria that are beyond what is statutorily prescribed.

Directions

The Supreme Court directed the Public Service Commission to take appropriate steps based on the performance or position in the selection process of the candidates who had applied for the posts, consistent with the judgment.

Development of Law

The ratio decidendi of this case is that for in-service candidates applying for the post of clerk/cashier in District/Central Co-operative Banks, the minimum educational qualification is SSLC or its equivalent, along with a Junior Diploma in Co-operation (JDC) and three years of experience in an affiliated primary cooperative society. This judgment clarifies that specific regulations made under Section 80(3) of the Kerala Co-operative Societies Act, 1969, which cater to the service conditions of employees of District/Central Co-operative Banks, prevail over the general rules made under Section 109 of the Act. This is a departure from the earlier position of law as laid down in Valsala Devi v. Leela Bhai [(2002) 3 KLT SN 18], which was overruled by the Full Bench of the Kerala High Court.

Conclusion

The Supreme Court’s decision in Kerala Public Service Commission vs. K.N. Radhamani & Ors. settles the long-standing dispute regarding the qualification criteria for in-service candidates applying for the post of clerk/cashier in cooperative banks in Kerala. The Court’s judgment ensures that in-service candidates with SSLC and JDC with three years of experience are eligible for these posts, aligning with the specific regulations made for the District/Central Co-operative Banks. This judgment provides clarity and relief to numerous in-service employees aspiring for these positions.

Category

Parent Category: Kerala Co-operative Societies Act, 1969

Child Categories:

• Section 109, Kerala Co-operative Societies Act, 1969
• Section 80, Kerala Co-operative Societies Act, 1969
• Rule 186, Kerala Co-operative Societies Rules, 1969
• Rule 187, Kerala Co-operative Societies Rules, 1969
• Service Law
• Cooperative Banks
• In-Service Candidates
• Educational Qualifications

FAQ

Q: What is the minimum educational qualification for in-service candidates applying for the post of clerk/cashier in cooperative banks in Kerala?

A: The minimum educational qualification is SSLC or its equivalent, along with a Junior Diploma in Co-operation (JDC) and three years of experience in an affiliated primary cooperative society.

Q: Does the floor-level pay stipulation in Rule 186 of the Kerala Co-operative Societies Rules, 1969, apply to in-service candidates?

A: No, the floor-level pay stipulation in Rule 186 does not apply to in-service candidates applying for the post of clerk/cashier in District/Central Co-operative Banks.

Q: What is the significance of the 1988 Service Regulations in this case?

A: The 1988 Service Regulations, which were made under Section 80(3) of the Kerala Co-operative Societies Act, 1969, specifically address the qualification criteria for in-service candidates in District/Central Co-operative Banks, and these regulations prevail over the general rule in Rule 186.

Q: Can the Public Service Commission prescribe eligibility criteria that are beyond what is statutorily prescribed?

A: No, the Supreme Court emphasized that the Public Service Commission cannot prescribe eligibility criteria that are beyond what is statutorily prescribed.

Q: What was the earlier position of law before this judgment?

A: The earlier position of law, as laid down in Valsala Devi v. Leela Bhai [(2002) 3 KLT SN 18], was that a bachelor’s degree was mandatory for all candidates, including in-service ones, for posts with a starting pay above Rs. 250/-. This position was overruled by the Full Bench of the Kerala High Court, which was subsequently upheld by the Supreme Court.