Registrar’s Circular Validly Deleted Promotion Bar, Rules Supreme Court; Cooperative Bank Employee’s Promotion Restored
Facts
The appellant, S.P. Chandrakar, and respondent No. 5, Kishor Bagh, were employees of the District Central Cooperative Bank, Raipur. The dispute concerned promotion to the post of Additional Manager.
Originally, Rule 5(3)(a) of the Chhattisgarh District Cooperative Central Bank Employee Service Rules, 1982 prohibited employees appointed for technical posts from being appointed or absorbed to non-technical posts. On 4 July 2005, the Registrar, Cooperative Societies, exercised powers under Section 55(1) of the Chhattisgarh Cooperative Societies Act, 1960 and deleted Rule 5(3)(a), (b) and (c). Subsequently, on 13 August 2010, the Additional Registrar communicated that technical employees would also be eligible for promotion.
Based on this amendment, the appellant was promoted as Additional Manager on 30 December 2010. The respondent challenged the promotion. After nearly thirteen years, the Single Judge quashed the promotion, and the Division Bench affirmed that decision on the ground that the amendment had merely been communicated through a circular and not by a valid statutory amendment. The appellant approached the Supreme Court.
Issues
- Whether the Registrar possessed statutory power under Section 55(1) of the Chhattisgarh Cooperative Societies Act to amend the Service Rules.
- Whether the deletion of Rule 5(3)(a), (b) and (c) was legally valid.
- Whether communication through the Additional Registrar rendered the amendment invalid.
- Whether failure to lay the amended rules before the Legislative Assembly under Section 95(3) invalidated the amendment.
- Whether the appellant’s promotion was liable to be set aside.
Appellant’s Arguments
The appellant contended that:
- The Registrar possessed express statutory authority under Section 55(1) to frame service rules.
- The power to frame rules necessarily included the power to amend or delete them.
- The amendment deleting Rule 5(3)(a) had in fact been approved by the Registrar.
- The Additional Registrar merely communicated the Registrar’s decision.
- The High Court wrongly treated the amendment as an executive instruction rather than a valid statutory exercise of power.
Respondents’ Arguments
The respondents argued that:
- Rule 5(3)(a) had never been validly amended.
- The document dated 13 August 2010 was merely a communication or executive circular.
- No formal statutory amendment had been issued under Section 55(1).
- Executive instructions cannot override statutory service rules.
- Consequently, the appellant, being a technical employee, remained ineligible for promotion to an administrative post.
Analysis of the Law
The Supreme Court held that:
- Section 55(1) expressly authorises the Registrar to frame service rules governing cooperative societies.
- By virtue of Section 21 of the General Clauses Act, 1897, the power to frame rules necessarily includes the power to amend, vary or rescind them.
- The Additional Registrar merely conveyed the Registrar’s decision, as the communication itself stated that it was issued “Ordered by Registrar.”
- The State itself never disputed that the amendment had been approved by the Registrar.
- Section 95(3), requiring rules to be laid before the Legislative Assembly, is directory rather than mandatory because the statute prescribes no consequence for non-compliance.
Precedent Analysis
The Court relied upon:
- State of U.P. v. Manbodhan Lal Srivastava — The expression “shall” may be directory depending upon legislative intent.
- State of U.P. v. Babu Ram Upadhya — Determination of whether statutory provisions are mandatory or directory depends on legislative purpose.
- Bhikraj Jaipuria v. Union of India — Consequences of non-compliance determine whether procedural requirements are mandatory.
- Atlas Cycle Industries Ltd. v. State of Haryana — Explained various categories of legislative laying procedures and their legal effect.
- K.T. Plantation (P) Ltd. v. State of Karnataka — Reiterated principles governing legislative laying requirements.
- State of M.P. v. Hukum Chand Mills Karamchari — Similar laying provision held to be directory.
- Kiran Devi v. Bihar State Sunni Wakf Board — Wrong nomenclature or incorrect reference to power does not invalidate an otherwise lawful exercise of statutory authority.
- Municipal Corporation of Ahmedabad v. Ben Hiraben Manilal — Validity depends upon existence of power, not the form or label of the order.
Court’s Reasoning
The Supreme Court held that the High Court erred in treating the Registrar’s amendment as a mere executive instruction.
The Court observed that:
- The Registrar possessed statutory authority to amend the service rules.
- The Additional Registrar’s communication clearly stated that it was issued pursuant to the Registrar’s orders.
- Section 21 of the General Clauses Act automatically extends the power to frame rules to include amendment and deletion.
- The absence of legislative laying under Section 95(3) did not invalidate the amendment because the provision contains no consequence for non-compliance and is therefore directory.
- Merely describing the amendment as a “circular” or “communication” did not affect its legal validity when the statutory source of power clearly existed.
- The appellant had continuously worked on the promoted post for approximately thirteen years and ought not to lose the benefits of a valid promotion merely because of prolonged judicial proceedings.
Conclusion
The Supreme Court allowed the appeal.
The judgments of the Single Judge and Division Bench were set aside. The Court restored the appellant’s promotion as Additional Manager, protected his seniority, directed grant of all consequential promotional benefits, and awarded 50% back wages, payable within two months, failing which interest at 6% per annum would become payable.
Case Details
Case: S.P. Chandrakar v. State of Chhattisgarh & Others
Court: Supreme Court of India
Case Number: Civil Appeal arising out of SLP (C) No. 8726 of 2024
Bench: Hon’ble Justice Sanjay Karol and Hon’ble Justice Augustine George Masih
Date: 30 July 2026
Citation: 2026 INSC 769
Result: Appeal allowed. The Supreme Court restored the appellant’s promotion, protected his seniority, granted consequential promotional benefits and directed payment of 50% back wages with interest in case of default.
