The Madras High Court (Madurai Bench) clarified that, upon merger of cooperative societies, employees of the transferor society are deemed to have joined the transferee society from the date of merger for the purpose of seniority and promotion. The Court further held that a writ petition challenging show cause notices is premature where an alternative remedy of revision is available under the Tamil Nadu Cooperative Societies Act, 1983.
Background & Facts
The Dispute
The dispute arose from a promotion to the post of Attender/Fertilizer Salesman in Krishnapuram Primary Agricultural Cooperative Credit Society. N.Kalimuthu, appointed as Salesman on 16.06.2014, was promoted to Attender by order dated 01.09.2022. R.Nagalakshmi, who had been appointed as Saleswoman in Pudupatti Primary Agricultural Cooperative Credit Society on 08.05.1998, claimed seniority and contended that she should have been promoted to the vacant Attender post. The Deputy Registrar of Cooperative Societies, Aruppukottai Circle, issued a show cause notice dated 20.02.2023 to the Administrator of Krishnapuram Society seeking explanation for the alleged unlawful promotion of N.Kalimuthu overlooking R.Nagalakshmi’s claim. Subsequently, the Administrator, Krishnapuram Society, issued a further show cause notice dated 10.10.2023 to N.Kalimuthu calling for explanation as to why his promotion should not be cancelled. Both notices were challenged before the learned Single Judge by way of a writ petition.
Key Facts
- N.Kalimuthu joined Krishnapuram Society as Salesman on 16.06.2014.
- He was promoted to Attender/Fertilizer Salesman by order dated 01.09.2022.
- R.Nagalakshmi was appointed as Saleswoman in Pudupatti Society on 08.05.1998.
- Pudupatti Society was merged with Krishnapuram Society by order of the District Supply Officer dated 11.01.2009.
- Consequent to the merger, R.Nagalakshmi joined Krishnapuram Society in the year 2010.
- The Deputy Registrar, Cooperative Societies, Aruppukottai Circle, issued a show cause notice on 20.02.2023 to the Administrator, Krishnapuram Society seeking explanation for the promotion of N.Kalimuthu.
- The Administrator, Krishnapuram Society, issued a show cause notice on 10.10.2023 to N.Kalimuthu seeking explanation as to why his promotion should not be cancelled.
- The learned Single Judge passed an order on 06.12.2023 quashing both show cause notices and allowing the writ petition.
- The Division Bench of this Court had previously held in (2009) 4 MLJ 955 (R.Seeniyappan v. Industries Commissioner and Director of Industries and Commerce, Chepauk, Chennai and others) that there cannot be absorption of surplus employees of other societies.
- The Writ Petition (W.P.(MD)No.25920 of 2023) was filed seeking certiorarified mandamus for records relating to the proceedings of the third respondent dated 20.02.2023 and the consequential order dated 10.10.2023, and a direction to permit N.Kalimuthu to work continuously in the promotional post of Attender.
Procedural History
- 20.02.2023: Show cause notice issued by Deputy Registrar to Administrator, Krishnapuram Society.
- 10.10.2023: Show cause notice issued by Administrator, Krishnapuram Society to N.Kalimuthu.
- 06.12.2023: Order of the learned Single Judge quashing both notices and allowing the writ petition.
- 07.09.2026: Reserved for judgment.
- 21.09.2026: Pronounced judgment.
Parties' Positions
For the Appellants (Administrator, Krishnapuram Society and R.Nagalakshmi): Contended that the learned Single Judge failed to recognise the merger of the two societies, that staff integration after merger created a common seniority list, that R.Nagalakshmi was senior by virtue of her service from 08.05.1998 and her joining Krishnapuram Society in 2010 post-merger, and that the Single Judge’s reliance on the precedent in (2009) 4 MLJ 955 was misplaced as that case dealt with absorption of surplus employees, not a merger scenario.
For the Respondent (N.Kalimuthu, Joint Registrar and Deputy Registrar): Argued that there was no concept of transfer of employees from one society to another except in case of merger, that the appellant in W.A(MD)No.151 of 2025 was only deputed and could not claim seniority in Krishnapuram Society, that the learned Single Judge correctly appreciated the facts and that the writ petition was premature as an alternative remedy of revision lay under Sections 152 and 153 of the Tamil Nadu Cooperative Societies Act, 1983.
Relief Sought
The appellants sought to set aside the order of the learned Single Judge dated 06.12.2023, to have the show cause notices reinstated, and to permit further proceedings after obtaining explanation from the writ petitioner and the administrator regarding the promotion of N.Kalimuthu to the post of Attender. The respondent sought dismissal of the writ appeals and affirmation of the Single Judge’s order.
The Legal Issue
The central questions were: (1) Whether, following a merger of cooperative societies, an employee of the transferor society is entitled to claim seniority in the transferee society for promotion purposes; and (2) Whether a writ petition challenging show cause notices is maintainable when an alternative remedy of revision is available under Sections 152 and 153 of the Tamil Nadu Cooperative Societies Act, 1983.
Arguments Presented
For the Appellant/Petitioner
The appellants argued that the merger of Pudupatti Society with Krishnapuram Society by order dated 11.01.2009 resulted in integration of staff and a common seniority list. They relied on the fact that R.Nagalakshmi had joined Krishnapuram Society in 2010 consequent to the merger and thus possessed seniority over N.Kalimuthu, who joined only in 2014. They contended that the learned Single Judge erred in holding that there was no concept of transfer except merger, ignoring the integrated staff structure post-merger. They further argued that the precedent relied upon by the Single Judge, R.Seeniyappan v. Industries Commissioner and Director of Industries and Commerce, Chepauk, Chennai and others ((2009) 4 MLJ 955), was distinguishable as it dealt with absorption of surplus employees, not a scenario where two societies merged and their employees were integrated.
For the Respondent/State
The respondent argued that the learned Single Judge correctly held that there was no concept of transfer of employees from one society to another except in the case of merger, and that the appellant in W.A(MD)No.151 of 2025 had only been deputed to Krishnapuram Society and could not claim seniority there. They emphasized that the Single Judge had correctly appreciated the facts and that the writ petition was premature because an efficacious alternate remedy of revision lay under Sections 152 and 153 of the Tamil Nadu Cooperative Societies Act, 1983, which the writ petitioner had not availed. They also pointed out that both impugned proceedings were merely show cause notices calling for explanation and not final orders cancelling promotion.
The Court's Analysis
The Court began by noting that the learned Single Judge had extracted Rule 149(2-A) of the Tamil Nadu Cooperative Societies Rules, 1988, which stipulates that deputation should be for a period of not less than one year and not exceed three years. However, the Court found that the premise of deputation was incorrect because the two societies had merged by order dated 11.01.2009, and consequent to that merger, the staff of the two societies were integrated and a common staff list had to be maintained. The Court held that, on merger, the employees of the transferor society are deemed to have joined the transferee society from the date of merger for the purpose of seniority and promotion. Therefore, R.Nagalakshmi, who had been appointed in Pudupatti Society on 08.05.1998 and joined Krishnapuram Society in 2010 post-merger, was senior to N.Kalimuthu, who joined only in 2014.
The Court further distinguished the precedent relied upon by the Single Judge, R.Seeniyappan v. Industries Commissioner and Director of Industries and Commerce, Chepauk, Chennai and others ((2009) 4 MLJ 955), observing that it dealt with the absorption of surplus employees of other societies, a situation distinct from a merger where staff integration occurs. The Court emphasized that the Single Judge’s reasoning was therefore not applicable to the facts of the present case.
On the issue of maintainability, the Court held that the writ petitioner had rushed to court prematurely without first giving an explanation to the show cause notices issued on 20.02.2023 and 10.10.2023. It noted that a revision would lie to the Registrar against any proceedings in which an appellate provision is not available under Section 152 of the Tamil Nadu Cooperative Societies Act, 1983, and that such a revision would lie under Section 153 of the Act. Since the writ petitioner had not availed this alternative remedy, the writ petition was premature.
The Court concluded that the order of the learned Single Judge dated 06.12.2023 necessarily had to be interfered with and set aside. It directed that further proceedings be issued after obtaining necessary explanation from the writ petitioner and the appellant in W.A(MD)No.373 of 2024/Administrator, Krishnapuram Society regarding the promotion of the writ petitioner to the post of Attender.
The Verdict
The Writ Appeals (W.A(MD)Nos.373 of 2024 and 151 of 2025) were allowed. The order of the learned Single Judge dated 06.12.2023 was set aside. The writ petition (W.P.(MD)No.25920 of 2023) was dismissed. The Court directed that further proceedings be issued after obtaining necessary explanation from the writ petitioner and the appellant in W.A(MD)No.373 of 2024/Administrator, Krishnapuram Society regarding the promotion of the writ petitioner to the post of Attender. No order as to costs was passed.
What This Means For Similar Cases
Seniority Post-Merger Is Determined by Date of Merger
Employees of a transferor cooperative society are deemed to have joined the transferee society from the date of merger for seniority and promotion purposes. Practitioners must examine the date of merger and the actual integration of staff when assessing seniority claims.
- Check the merger order and subsequent integration notifications.
- Compare service dates of the claimant and the promotee, adjusting for post-merger joining dates.
- Argue that seniority flows from the merger date, not from the date of actual reporting after merger.
Alternative Remedies Must Be Exhausted Before Approaching Writ Jurisdiction
Where a statutory remedy of revision is available under the Tamil Nadu Cooperative Societies Act, 1983, a writ petition challenging show cause notices is premature. Parties must first avail of the revision remedy before approaching the High Court.
- Verify whether a revision lies under Sections 152 and 153 of the Act.
- File a revision petition with the Registrar before considering writ jurisdiction.
- Only if the revision remedy is unavailable or ineffective should writ jurisdiction be invoked.
Show Cause Notices Are Not Final Orders and Require Explanation Before Judicial Intervention
Show cause notices issued under Section 166 of the Tamil Nadu Cooperative Society Act, 1983, call for explanation and are not final orders cancelling promotion. Judicial intervention at this stage is premature unless the party fails to provide explanation after being given an opportunity.
- Treat show cause notices as preliminary steps seeking explanation.
- Advise clients to submit a timely explanation to the authority issuing the notice.
- Only after explanation is sought and not provided, or if the explanation is rejected, consider further remedies.
