Holding

The employer's policy decision not to fill vacancies, particularly after the rank list expiry, is within its domain and the Registrar's approval under the Rules is required, rendering the High Court's direction to fill the vacancies unsustainable.

Summary

The appellants sought to compel a cooperative bank in Kerala to fill seven additional clerk/cashier vacancies, arguing that the Registrar's approval was not required and that the bank's financial health should not affect cadre strength. The High Court had directed the bank to fill the vacancies, but the Supreme Court held that the employer's policy decision not to fill vacancies, especially after the rank list had expired, falls within its domain and cannot be overridden by a writ. The Court noted that under the Kerala Cooperative Societies Rules, 1969, the Registrar's approval is essential for changes in staff pattern and classification, and the bank's financial condition is a relevant factor. It further observed that the expiry of the rank list precludes any direction to fill vacancies and that there was no arbitrariness or discrimination in the bank's decision. Consequently, the Supreme Court dismissed the appeals, upholding the High Court's order that the vacancies not be filled.

Issues considered

The necessity of Registrar's approval under Kerala Cooperative Societies Rules, 1969 for determining cadre strength and filling vacancies.
Whether an employer can lawfully decide not to fill existing vacancies and whether a writ court can compel such filling.
The effect of the expiry of a rank list on the authority to direct vacancy appointments.
The relevance of the cooperative bank's financial health in determining its cadre strength.
The validity of the High Court's direction to fill seven vacancies in light of the above considerations.

Legislation cited

Constitution of Indias. Article 320

Subjects

service lawcadre strengthcooperative societiesrecruitmentvacancy fillingRegistrar approvalrank list expirypublic service commissionwrit jurisdiction

Judgment

[2008] 9 S.C.R 1058
....
A SUBHA B. NAIR & ORS. •
V.
STATE OF KERALA & ORS.
(Civil Appeal No. 4176 of 2008)
MAY 27, 2008
B
[S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.] )' .
Service law - Cadre strength - Determination of - Req-
uisition by bank to fill uµ 214 posts of clerk/cashier in Co-op-
c erative Bank-Approval of 208 posts by Registrar- Only 201
vacancies filled up - Challenge to - Order of High Court that
seven more vacancies to be filled up, one vacancy having
arisen due to non-joining of duty - Justification of - Held: Or-
der of High Court sustainable - Approval of Registrar is nee-
D
essary - It is within the domain of employer to fill up existing
vacancies or not - Bank had taken a policy decision not to fill
..
up any other or further post - More so, rank list expired and •
thereafter, the vacancies could not be directed to be filled up
- Cadre strength of Co-operative Society would depend upon
its classification - Statement for classifying the branches were
E not prepared scientifically - Further, there has been comput-
erization of branches in the Bank - Kera/a Cooperative Soci-
eties Rules, 1969. ,;

Respondent-Cooperative Bank made a requisition ~
,.
F to respondent no. 4-State Public Service Commission for
appointment of 214 clerk/cashier in the Bank. The respon-
dent No.2-registrar approved only 208 posts. 201 vacan-
cies were filled up. Appellant filed writ petition on the
ground that the respondent-Bank could fill 16 more va-
cancies. The Single Judge of the High Court held that
G
having regard to the approved vacancy position, six more
vacancies could be filled up and one vacancy having 4
~
arisen due to non-joining of the candidate could also be
filled up. It issued direction to fill up seven more vacan-

H 1058
"4 SUBHA B. NAIR & ORS. v. STATE OF 1059
+- KERALA & ORS.

... cies. In appeal, order of High Court was upheld. Hence, A
the present appeal.
Appellants contended that the High Court commit-
ted a serious error as the approval of Registrar in such
matters was not necessary; and that in any event profit-
...... ability or otherwise of the Cooperative Bank was not a B
relevant factor for determining the cadre strength.
Respondent-Cooperative Bank, Kerala Public Ser-
vice Commission and the State of Kerala contended that
the rank list having expired on 31.12.2004, the High Court c
could not have issued any writ on the petition filed by the
appellants as the Bank had taken a policy decision not to
fill up any other or further post; and that under Rule 182
of the Kerala Cooperative Societies Rules, 1969, the ap-
.... proval of the Registrar is imperative .
D
Dismissing the appeals, the Court
HELD: 1.1 After the processes were gone into for ap-
pointment of Clerk-cum-cashier in the Bank, rank list was
prepared on or about 18.09.2001. Its validity expired on
or about 31.12.2004. Some persons did not join the posts. E
The vacancies remained unfilled. Another requisition for
filling up of the vacancies position was notified again on
~ or about 10.05.2005 by which date the validity of the ea·r-
" lier rank list expired. Pursuant or in furtherance thereof
the Commission already conducted an examination on F
10.05.2008, and in terms thereof a fresh rank list would
be prepared. [Para 6] [1064-B,C & D]
1.2 A decision on the part of an employer whether to
fill up the existing vacancies or not is within its domain.
G
On this limited ground in absence of discrimination or ar-
~ bitrariness, a writ court ordinarily would not interfere in
such matters. [Para 7] [1064-D & E]
Deepa Keyes v Kera/a State Electricity Board (2007) 6
SCC 194; K. Thu/aseedharan v Kera/a State Public Service H
1060 SUPREME COURT REPORTS [2008] 9 S.C.R. I'-

-;.

A Commission, Trivandrum and Others (2007) 6 SCC 190 - /

relied on.
1.3 Recruitment to a post having regard to the provi-
sions contained in Article 320 of the Constitution of India
must be made by the Committee in terms of the Statutory
B Rules. Kerala Cooperative Societies Rules, 1969 has un-
dergone a change in 2004 by way of Kerala Cooperative
,.. ..
Societies (Amendment) Rules, 2004. Thus, it may not be \...:
I
entirely correct that the Registrar will have no say in the
matter. [Paras 9, 11 and 12] [1064-G; 1065-E,F & G]
c
1.4 Financial heath of a bank is a relevant factor. In
the instant case, from the profit and loss account it ap-
peared that the statement for classifying the branches
were not prepared scientifically and hence a true picture
of the financial position was not reflected therein. The Reg- ~
D ,
istrar has the responsibility to see that the Cooperative
Societies function effectively and efficiently. A Coopera-
tive Bank according to the guidelines issued by NABARD,
should be in a position to maintain the cost of manage-
ment to working fund at the optimum level of 2%. The cost
E of management, however, of the Cooperative Bank was
found to be 8%, which according to the registrar, was at
an alarming level as has been observed by the Auditor.
[Paras 12 and 13] [1065-G,H; 1066-A & B] ~
.
F 1.5 The cadre strength of Cooperative Society would
depend upon its classification thus, although the Regis-
trar may not have anything to do therewith directly, but
the same would follow as a necessary corollary. The clas-
sification norms which were prescribed by the Govern-
ment long time back may not be valid in the present day
G
situation having regard to the computerization programme
resorted to by the Bank. [Paras 14 and 15] [1066-B,C & D] ~
4 ,
1.6 In the absence of any material it is difficult for a
court to arrive at a firm conclusion that having regard to
H the fact that over a period of time the Cooperative Bank
SUBHA B. NAIR & ORS. v. STATE OF 1061
~
KERALA & ORS.

had opened many more new branches or the volume of A
its operation had increased requiring appointments of more
persons. What would be the effect of computerisation is
also not known. Only because the Bank has sent a requi-
sition or had been making recruitments in other catego-
ries of staff by itself may not be a ground for issuance of B
;. -..... a writ of or in the nature of mandamus, although the Co-
operative Bank had adopted a policy decision not to fill
up more than 201 vacancies which stands filled up to 208
vacancies in terms of the judgment of High Court. [Para
16] [1066-H; 1067-A,B & C] c
Shankarsan Dash v. Union of India (1991) 3 SCC 47;
Jitendra Kumar & Ors. v. State of Haryana & Anr. 200.~(2) SCC
161 - referred to.
_... 1. 7 The question as to whether there existed 7 va-
D
;. cancies or 16 vacancies in the aforementioned situation
loses all significance. It is assumec,1 that as per the requi-
sition, 9 more vacancies could be filled up but it is trite
that if the employer takes a policy decision not to fill up
any existing vacancy, only because a person's name is
found in the select list, the same by itself would be a ground E
to compel the bank to fill them up. [Para 18] [1068-A & 8]
1.8 After the expiry of rank list, vacancies should not
+ be directed to be filled up. The direction cannot be issued
t
only on sentiment/sympathy. Thus, no relief can be granted F
to the appellants. [Paras 19, 20 and 21] [1068-C & D]
CIVIL APPELLATE JURISDICTION : Civil Appeal NO.
4176 of 2008
From the final Judgment dated 18/7/2006 of the High Court
G
of Kerala at Ernakulam in W.A. Nos. 2275, 2527 and 2622 of
~
--.- 2005
WITH
C.A. Nos. 4177 and 4178 of 2008
1-1
1062 SUPREME COURT REPORTS [2008] 9 S.C.R.

A C.N. Sree Kumar, P.R. Nayak, Thomas Joseph A., D.
Parashar and Malini Poduval for the Appellant.

Vipin Nair, S. Balaji, P.B. Suresh, Vivek Sharma (for M/s.
Temple Law Firm), Roy Abraham, Seema Jain, Himinder Lal,
P.V. Dinesh and Sindhu T.P. for the Respondents.
B
The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.
2. Appellants are before us aggrieved by and dissatisfied
c with a judgment and order dated 18.07.2006 passed by the
Kerala High Court in Writ Appeal Nos.2275, 2527 and 2622 of
2005 affirming the judgment and order dated 7.9.2005 passed
by a learned single judge of the said Court.

3. Recruitment to the posts is made by the respondent
D No. 4 - Commission. A requisition was made for filing up of
214 posts. Allegedly, the respondent No.2 approved only 208
posts. 201 vacancies were filled up. Contending inter alia that
the Respondent - Cooperative Bank could fill 16 more vacan-
cies, a writ petition was filed. A learned single judge of the High
E Court opined that having regard to the approved vacancy posi-
tion, six more vacancies could be filled up and one vacancy
having arisen due to non-joining of the same could also be filled
up. A direction was, therefore, issued to fill up seven more va-
+
cancies. An intra-court appeal was preferred thereagainst, which
F by reason of the impugned judgment has been dismissed opin-
.
ing:
"The vacancies already stand reported to the Public
Service Commission in implementation of the interim order
passed on 10.12.2004 and this report shall be deemed to
G have been in respect of the vacancies occurred before
the expiry of the list, limited to the vacancies available.
There cannot have any dispute on that. In Ext.P10, the
•
Registrar had approved the staff strength sanctioning only
208 posts of clerk/cashier. Out of that, only 201 are in
H position. Therefore, there are remaining 7 vacancies.
SUBHA B. NAIR & ORS. v. STATE OF 1063
1
' 1
KERALA & ORS. [S.B. SINHA. J.]

; These 7 vacancies shall be taken as, as mentioned above, A
reported before 31.12.2004 and the candidates shall be
advised as if the report had been received before the
expiry of the said date, following the appropriate ratio and
communal rotation as applicable to the post. As the Public
Service Commission had received the report regarding B

. ·.""'
the Non Joining Duty vacancy only on 10.5.2005, they
need consider it as one in respect of the vacancies that
had arisen after the expiry of the list. When the Registrar
had sanctioned only 208 posts, whatever be the resolution
in Ext.R4(g) or the contentions raised in the counter c
affidavit, the bank is disabled from appointing persons
any more than what is contained in the order of the
Registrar. Moreover, because of the computerization of
the branches and other modern facilities introduced in the
banking business, necessarily there may be reduction in
J- D
the number of vacancies. Therefore, the view taken by the
~
learned Single Judge to direct 7 vacancies to be advised,
cannot be said to be unjustified to invite interference in
these appeals."
4. Mr. Sree Kumar, learned counsel appearing on behalf E
of the appellants submits that the High Court committed a seri-
ous error in so far it failed to take into consideration that having
regard to the decision of the said Court in Elampa/ Service
-"} Coop. Bank Ltd. v. Government of Kera/a, [2000 (3) KLT 389],
f approval of Registrar in such matters was not necessary and in F
any event profitability or otherwise of the Cooperative Bank being
not a relevant factor for determining the cadre strength and, thus,
the impugned judgment cannot be sustained.
5. Mr. Roy Abhraham; Mr. P.V. Dinesh and Mr. Vipin Nair,
lerned counsel appearing on behalf of the Respondent - Co- G
operative Bank, Kerala Public Service Commission and the
-r- State of Kerala, on the other hand, submit that the ranked list
having expired on 31•1 December, 2004 the High Court could
not have issued any writ on the petition filed by the appellants
herein, particularly in view of the fact that the Bank had taken a H
1064 SUPREME COURT REPORTS [2008] 9 S.C.R.

A policy decision not to fill up any other or further post. It was fur-
.,. r
thermore submitted that in terms of Rule 182 of the Kera la Co-
operative Societies Rules, 1969, the approval of the Registrar
is imperative.
6. Indisputably requisition was made by the respondent-
B Bank to the Commission for appointment of 220 clerk-cum-
cashier in the Bank. After the processes were gone into ranked T •
list was prepared on or about 181h September, 2001. Its validity
expired on or about 31st December, 2004. Some persons did
not join the posts. The vacancies remained unfilled.
c
Another requisition for filling up of the vacancies position
was notified again on or about 101h May, 2005 by which date
the validity of the earlier ranked list expired. It is now accepted
at the Bar that pursuant or in furtherance thereof the Commis-
sion has already conducted an examination on 101h May, 2008,
D ....
and in terms thereof a fresh rank list would be prepared.
1
7. A decision on the part of an employer whether to fill up
the existing vacancies or not is within its domain. On this lim-
ited ground in absence of discrimination or arbitrariness, a writ
E court ordinarily would not interfere in such matters. This has been
so held by this Court in Oeepa Keyes v. Kera/a State Electric-
ity Board, [(2007) 6 SCC 194] observing that the rank list hav-
ing expired and the validity having not been extended, no relief
could be granted to the appellants therein. ..,..
~
F 8. Similar view has also been expressed by this Court in
K. Thulaseedharan v. Kera/a State Public Service Commis-
sion, Trivandrum and others, [ (2007) 6 SCC 190 ]
9. Recruitment to a post having regard, to the provisions
contained in Article 320 of the Constitution of India must be
G
made by the Committee in terms of the Statutory Rules.
Rule 188 of the 1969 Rules provides for a staff pattern in .,... •
the following terms:-
"188. Staff Pattern. - Every society shall adopt the staff
H
SUBHA B. NAIR & ORS. v. STATE OF 1065
KERALA & ORS. [S.B. SINHA, J]
~
pattern indicated in Appendix Ill to these rules, according A
to the type and class to which it belongs :
Provided that where any society cannot adopt such staff
pattern due to its financial position, the members of the
committee may work; in an honorary capacity in lieu of
appointing any paid employee : B

··~ Provided further that where any society is in need of any
change in the pattern of staff including the scale of pay
under special circumstances the same may be made by
the society with the prior approval ·of the Registrar of Co- c
1 operative Societies."
10. A Division Bench of the Kerala High Court in Elampa/
Service Cooperative Bank Ltd. (supra) opined that the power
of the Registrar either to rescind a resolution or reclassification
made by the Cooperative Society can be exercised so as to D
... enable him to set them aside, stating:-
•
"If reclassification made by the petitioner Bank is incorrect,
the Registrar is not helpless in setting aside the resolution
passed."
E
11. Rules appear to have undergone a change in 2004 by
way of Kerala Cooperative Societies (Amendment) Rules, 2004.
Note 4Appended to Appendix II under Serial No.2m under Class
IV of the 1969 Rules reads as under:-
-;.
; F
"Note 4 :- Classification made by the Societies should be
got certified and approved by the registrar of Co-operative
Societies before being implemented."
12. Thus, it may not be entirely correct that the Registrar
will have no say in the matter. Financial heath of a bank is a G
relevant factor.

-,. 13. In this case from the profit and loss account it appeared
that the statement for classifying the branches were not pre-
pared scientifically and hence a true picture of the financial po-
~
sition was not reflected therein. The Registrar has the respon- H
1066 SUPREME COURT REPORTS [2008] 9 S.C.R

+
A sibility to see that the Cooperative Societies function effectively
and efficiently. A Cooperative Bank, according to the guide-
lines issued by NABARD, should be in a position to maintain
the cost of management to working fund at the optimum level of
2 %. The cost of management, however, of the Cooperative
B Bank in question was found to be 8 %, which according to the

.,. .
Registrar, was at an alarming level as has been observed by
the Auditor.

14. The cadre strength of a Cooperative Society would
depend upon its classification thus, although the Registrar may
c not have anything to do therewith directly, but the same would r-
follow as a necessary corollary.
'
15. It furthermore appeared that the classification norms
which were prescribed by the Government long time back may
not be valid in the present day situation having regard to the
D
computerization programme resorted to by the Bank. ....
In its counter-affidavit the State of Kerala averred:-
..
"The Central Banks Conference, which is the forum
constituted to take stock of the progress and to review the
E problem faced by the credit structure in the state consisting
the representatives of District Co-operative Banks, Kerala
State Co-operative Bank, Government, Registrar of Co-
operative Societies, has of the view that the present
classification norms needs changes in par with the present +-
F credit scenario and slow growth of the movement, threat
~

posed by the new generation banks in the wake
globalization and liberalization, a committee has been
constituted to study the aspect and the committee
recommended to change the classifications of District Co-
G operative Bank urgently, lest the very existence of the banks
will be in peril. The proposal is under active consideration
of the Government, and it is expected that the classification
norms will be revised soon."
~ •
16. In the absence of any material it is difficult for a court
H
SUBHA B. NAIR & ORS. v. STATE OF 1067
KERALA & ORS. [S.B. SINHA, J.]

"i" to arrive at a firm conclusion that having regard to the fact that A
• over a period of time the Cooperative Bank had opened many
more new branches or the volume of its operation had increased
requiring appointments of more persons. What would be the
effect of computerisation is also not known. Only because the
Bank has sent a requisition or had been making recruitments B
in other categories of staff by itself may not be a ground for
issuance of a writ of or in the nature of mandamus, although the
··~
Cooperative Bank had adopted a policy decision not to fill up
more than 201 vacancies which stands filled up to 208 vacan-
cies in terms of the judgment of the learned Single Judge of the c
High Court.

17. In Shankarsan Dash v. Union of India [(1991) 3 SCC
47], this Court held:

"7 . It is not correct to say that if a number of vacancies are
D
notified for appointment and adequate number of
>-
candidates are found fit, the successful candidates acquire
• an indefeasible right to be appointed which cannot be
legitimately denied. Ordinarily the notification merely
amounts to an invitation to qualified candidates to apply
for recruitment and on their selection they do not acquire E
any right to the post. Unless the relevant recruitment rules
so indicate, the State is under no legal duty to fill up all or
any of the vacancies. However, it does not mean that the
State has the licence of acting in an arbitrary manner.
~
• The decision not to fill up the vacancies has to be taken F
bona fide for appropriate reasons. And if the vacancies or
any of them are filled up, the State is bound to respect the
comparative merit of the candidates, as reflected at the
recruitment test, and no discrimination can be permitted.
This correct position has been consistently followed by G
this Court, and we do not find any discordant note in the
decisions in State of Haryana v. Subhash Chander
• "" Marwaha, Neelima Shangla v. State of Haryana, or
Jatendra Kumar v. State of Punjab."
H
1068 SUPREME COURT REPORTS [2008] 9 S.C.R.

A [See also Jitendra Kumar & Ors. v. State of Haryana &
Anr, [ 2008 (2) sec 161 J.

18. The question as to whether there existed 7 vacancies
or 16 vacancies in the aforementioned situation looses all sig-
nificance. We would assume that as per the requisition, 9 more
8 vacancies could be filled up but it is trite that if the employer
takes a policy decision not to fill up any existing vacancy, only
because a person's name is found in the select list, the same
by itself would be a ground to compel the bank to fill them up.

c 19. Rules of the Cooperative Societies as has been inter-
preted by this Court in Deepa Keyes (supra) and K.
Thulaseedharan (supra) clearly show that after the expiry of
rank list, vacancies should not be directed to be filled up.
20. This Court furthermore cannot issue a direction only
D on sentiment/sympathy.
21. For the reasons aforementioned no relief can be
granted to the appellants. The appeals fail and are dismissed.
However, in the facts and circumstances of the case, there shall
be no order as to costs.

N.J. Appeals dismissed.

..