Holding

The notification directs reservation only for appointments in the initial cadre filled by direct recruitment and does not extend to promotional posts.

Summary

The appellant is a co‑operative society registered under the Andhra Pradesh Co‑operative Societies Act, 1964, whose employees are railway staff. The society’s service rules prohibited reservation in promotions, but the respondents were promoted to various posts using the reservation policy for Scheduled Castes and Scheduled Tribes. The promotions were later cancelled on the ground that the society’s rules did not allow reservation in promotional posts, and the respondents challenged the cancellation before the High Court relying on a Governor’s notification issued under Section 16 of the Act directing reservation in appointments to all posts to be filled by direct recruitment. The High Court held that the notification covered promotional posts as well; the Division Bench affirmed that view. On appeal, the Supreme Court examined the language of the notification and held that the phrase “to be filled by direct recruitment” limits the reservation direction to initial‑cadre appointments only, rendering any extension to promotional posts redundant and surplusage. Consequently, the Court set aside the High Court judgments, dismissed the respondents’ writ petition and allowed the appeal.

Issues considered

Does the Governor's notification under Section 16 of the Andhra Pradesh Co‑operative Societies Act, 1964 apply to promotional posts that are not filled by direct recruitment?
Can the principle of reservation be extended to promotions in a co‑operative society contrary to its service rules?
How should the term “appointment” be interpreted in the notification in light of the clause “to be filled by direct recruitment”?

Legislation cited

Andhra Pradesh Co-operative Societies Act, 1964s. 116-A, s. 116-B, s. 16

Subjects

reservationpromotionco-operative societiesinterpretation of statutesredundancysurplusageservice lawdirect recruitmentappointment

Judgment

SOUTH CENTRAL RAILWAY EMPLOYEES A
. '""{
CO-OPERA TJVE CREDIT SOCIETY EMPLOYEES
UNION, SECUNDERABAD
v.
REGISTRAR OF CO-OPERATIVE
SOCIETIES AND ORS.
B
___,,,. ~
JANUARY 13, 1998

[S. SAGHIR AHMAD AND G.B. PATTANAIK, JJ.]

Service Law : c
Andhra Pradesh Co-operative Societies Act, 1964 : Section 16.
:.
Reservation-Promotional posts-Applicability of-The expression
"appointment" in Notification was followed by the words "to be filled by
direct recruitment' '-Effect of-Held: Principle of reservation is applicable D
..,, A. only in respect of appointment to initial cadre and not to any appointment
....,,- in the promotional cadre.

Interpretation of Statutes :

Rules of Interpretation-Redundancy or surplusage-Avoidance of- E
The expression "appointment" in Notification was followed by the words "to
be filled by direct recruitment"-Held: The word "appointment" cannot be
interpreted to apply to promotional posts because such a interpretation
would render the latter part of the notification wholly redundant or
surplusage. F

- .> -< The appellant is a society registered under the Andhra Pradesh Co-
operative Societies Act, 1964 and the respondents were the employees of the
said society. The rules of the society categorically provided that there should
be no reservation in promotions of the employees of the society The
,
respondents were given promotion to various promotional posts by applying G
the principle of reservation. However the promotions were cancelled
subsequently on the ground that the principle for reservation had no
........
'· application in the matter of promotion.

· Being aggrieved th_e respondent filed a writ petition before the High
Court relying on the following notification issued the Governor of the State H
85
86 SUPREME COURT REPORTS [ 1998] 1 S.C. R.

A under Section 16 of the Act.
,..... '
"Governor for Andhra Pradesh hereby directs to Societies and the
appointment committee constituted under Section 116-A that the Appendix
hereto shall be followed with terred to reservation of appointments to all
\
posts in all co-operative institutions, to be filled by direct recruitment on
B temporary or regular basis."
1-
A single Judge of the High Court came, to the conclusion that the rule
of reservation applied to the promotional posts also. On appeal, the Division
Bench <if the High Court held that the notification in question was wide
enough fo include all posts in all Co-operative institutions including the
c promotional post to which the principle of reservation should be made
applicable and the word 'appointment' in the notification was not necessarily
referrable only to the stage of initial recruitment. With this conclusion the
Division Bench dismissed the appeal filed by the appellant and confirmed the
decision of the Single Judge. Hence this appeal.
D Allowing the appeal, this Court ~ '(""

HELD: I. On a plain reading of the notification issued by the Governor
under Section 16 of the Andhra Pradesh Co-operative Societies Act, 1964
it is crystal clear that the direction of the Governor was to follow the
principle of reservation in appointments rn all posts in all co-operative
E
institutions to be filled by direct recruitment either on temporary or on
regular basis. It is an undisputed fact that the promotional posts in the
societies cannot be filled up by direct recruitment and therefore, the only
conclusion that can be arrived at is that the aforesaid direction of the
Governor to apply the principle of reservation is only in respect of
F appointments in the initial cadre and not to any appointments in the promotional
cadre. The Division Bench of the High Court while giving wide interpretation
)c ..
to the expression 'appointment' in the notification has completely overlooked '
the latter part of the said notification to the effect "to be filled by direct
recruitment on temporary or regular basis'· The interpretation given by the
G High Court to the notification by giving a wide interpretation to the word
'appointment makes the latter part of the notification wholly redundant or
surplusage. It is a cardinal principle of construction not to brush aside
words used in a statute of in a notification issued under a statute and full
effect must be given to the entire words of an instrument. Applying the said
principle to the notification the conclusion is that no direction has been
H given by the Governor to apply the policy of reservation in appointments to
SOUTH RAIL. CO-OP. SOC. EMP. UNION v. REGIST OF CO-OP. SOC. [G.B PATTANAIK, J.] 87

the promotional post. The High Court therefore, committed serious error of A
law in interpreting the aforesaid notification and by holding that the policy
of reservation has been made applicable to the promotional posts also.
189-G-H; 90-A-CJ

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4343 of 1988.
B
.... ~
From the Judgment and Order dated 2.12.87 of the Andhra Pradesh High
Court in Writ Appeal No. 1064/83.

K. Subba Rao and A. Subba Rao for the Appellant.

C.N. Sreekumar B. Kanta Rao and T. V .S. Narasimachari (N.P.) for the c
Respondents.

The Judgment of the Court was delivered by
/
G.B. PATT ANAIK, J. The appellant is a society registered under the
.. /
.l. Andhra Pradesh Co-operative Societies Act and the members of the society
are the employees of South Central Railway. The society in turn maintains
D

certain staff members for running the affairs of the society. The service
conditions of such employees of the society governed by the bye-laws of the
society. Bye law 33 of the society is empowered the committee of management
to frame service regulation pertaining to the service conditions of the officers
E
and the employees of the society. Pursuant to the aforesaid power the society
has framed a set of rules with the approval of the Registrar of Co-operative
Societies determining the service conditions of the employees of the society.
The said rules of society categorically provided that there should be no
reservation in promotions of the employees of the society. The private
... -,(_ respondents filed a writ petition No. 8051 of 1982 challenging the order of
cancellation of their appointment dated 10.8.1982 and that writ petition was
F

allowed by the learned single Judge of the Andhra Pradesh High Court. On
an appeal being filed by the present appellant the Division Bench of the High
Court dismissed the appeal and affirmed the judgment of the learned single
Judge. It may be stated that the private respondents were given promotions
on 9.8.1982 to various promotional posts by applying the principle of
G
reservation for Scheduled Castes and Scheduled Tribes but that order was
\
cancelled by order dated I 0.8.1982 on the ground that under the rules of the
society dealing with the service conditions of its employees the principle of
reservation has no application iii the matter of promotion. T~e learned single
Judge came to the conclusion that the rule of reservation applies to the H
~(
'
88 SUPREME COURT REPORTS [ 1998] 1 S.C.R.

A promotional posts also. On appeal, the Division Bench of the High Court
interpreted the notification issued by the Governor of Andhra Pradesh in
exercise of powers conferred by Section 16 of the Andhra Pradesh Co-
operative Societies Act, 1964 and held that the notification in question is wide
enough to include all posts in all co-operative including the promotional post
to which the principle of reservation should be made applicable and the word
B appointment in the notification is not necessarily referable only to the stage
of initial recruitment. With this cnnclusion the Division Bench dismissed the
appeal filed by the present appellant and confirmed the decision of the
learned single Judge. Hence the present appeal.

C Mr. A. Subba Rao learned counsel appearing for the appellant contended
that under Section 116 B of the Andi1ra Pradesh Co-operative Societies Act
the Government no doubt has the power to give direction to a society or class
of s.ocieties or appointment committees to make provisions for the reservation
of appointment or posts under any such society in any cadre created under
the said section in favour or for the grant of any special concession in the
D matter of appointments to any such posts or cadre to the Scheduled Castes,
Scheduled Tribes and Backward Castes and the society or appointment
committee shall be bound to comply with such directions and give effect to
any provisions so made. But in the case in hand in exercise of such po\ver
the notification that has been issued by the Governor of Andhra Pradesh
E does not bring within its purview the promotional post to which the principle
of reservation would get attracted and as such the impugned judgment of the
High Court is unsustainable in law. According to the learned counsel for the
·appellant the High Court while interpreting the notificatior. in question has
not considered the later part of the notification which has ultimately vitiated
the conclusion arrived at.
F
Learned counsel appearing for the respondent on the other hand
contended that in view of the wide powers of the Government to issue
directions contained in Section 116 B of the Andhra Pradesh Co-operative
societies Act and in view of the fact that the railways have been following
G the principal of reservation in promotional posts and further the appellant
society itself having followed the principle of reservation for some length of
time it would not be in the public interest to hold that the principle of
reservation should not apply in respeci of promotional posts. The learned .,
counsel further contended that in view of the provisions contained in Article
16(4)(a) of the Constitution, it is a constitutional mandate that the State can
H make hws for reservation in matter of promotion of any class or classes or
SOUTH RAIL CO-OP SOC EMP. UNION v. REGIST. OF CO-OP. SOC [GB PATTANAIK,J.] 89
post in the service under the State in favour of Scheduled Castes and A
Scheduled Tribes and such constitutional mandate shou Id be borne in mind
while interpreting the relevant notification.

Having heard the learned counsel for the parties and having examined
the relevant provisions of the Andhra Pradesh Co-operative Societies Act as
well as the notification issued by the Governor of Andhra Pradesh in exercise B
of power conferred under the provisions of Andhra Pradesh Co-operative
Societies Act, we have no hesitation to hold that the Government has wide
powers to give directions to the societies for applying the principal of
reservation in the matter of promotion to the posts under the society. But the
real question arises for consideration is whether the notification that has been C
issued by the Governor of Andhra Pradesh did provide for reservation in the
promotional posts of the co-operative societies? The notification in question
is extracted hereinbelow in extenso:

"Notification:

In Exercise of the powers conferred by Section 16 of the Andhra D
Pradesh Co-operative Societies Act, 1964), (Act 7of1964), the Governor
(of Andhra Pradesh hereby directs to Societies and the appointment
committee constituted under Section 116-A of the Appendix hereto
shall be followed with regard to reservation of appointment to all
posts in all posts in all cooperative institutions, to be filled by direct E
recruitment on temporary or regular basis.'')

On a plain reading of the aforesaid notification it is crystal clear that
the direction of the Governor was to follow the principle of reservation in
appointment to all posts in all co-operative institutions to be filled by direct
recruitment either on temporary or on regular basis. It is an undisputed before F
that the promotional posts in the societies cannot be filled up by direct
recruitment, and therefore, the only conclusion that can be arrived at is that
the aforesaid direction of the Governor to apply the principle of reservation
is only in respect of appointments in the ·initial cadre and not to any
appointments in the promotional cadre. The Division Bench of the High Court G
while giving wide interpretation to the expression 'appointment' in the
notification has completely overlooked the latter part of the said notification
to the effect ''to be filled by direct recruitment 011 temporary or regular
basis". The interpretation given by the Hig't Court to the notification by
giving a wide interpretation to the word 'appointment' makes the latter part
of the notification wholly redundant or surplusage. It is a cardinal principle H
90 SUPREME COURT REPORTS [ 1998] I S.C.R.

A of construction not to brush aside words used in a statute or in a notification
issued under a statute and full effect must be given to the entire words of
an instrument. Applying the said principle to the notification, which is for
consideration before us, we had no hesitation to come to the conclusion is
that under the said notification no direction has been given by the Governor
B to apply the policy of reservation in appointments to the promotional posts.
The High Court, therefore, committed serious error of law in interpreting the
aforesaid notification and by holding that the policy of reservation has been
made applicable to the promotional posts also. We accordingly set aside the
impugned judgment of the High Court as well as the judgment of the learned
single Judge and hold that though it was open to the Govt. to apply the f
C principle of reservation but by the impugned Noti:ication it has not been
made applicable to the promotional posts available in the society. This appeal
accordingly is allowed and the writ petition filed by the private respondents
stand dismissed. There will be no order as to costs.

v.s.s. Appeal allowed.