Society's Losses No Ground to Deny Revised Pay: Raj HC

Co-operative Society's Losses No Ground to Deny Employees Revised Pay Scales: Rajasthan High Court Quashes Registrar's Order

Published: 22 October 2026 · NyayVidhan

The Rajasthan High Court held that employees of a co-operative federation cannot be denied revised pay scales on the ground that the society runs at a loss, and that the denial violated Articles 14 and 21 (para 26). Quashing the Registrar's order of 30.12.2015, it held the members of the employees' union entitled to the benefits of the Rules of 2008, later pay revisions and selection scales after 9, 18 and 27 years of service (para 31).

Key holdings

A society's losses are no ground to deny its employees revised pay scales, and they cannot be blamed for those losses (para 26).

The Court followed a co-ordinate Bench ruling and the union's own 2015 judgment, finding nothing to justify a different view (paras 26, 30).

Audited accounts showing profits, and the employer's own office note, defeated the Registrar's loss plea (paras 27-28).

Dues with arrears are to be computed within three months of the certified copy and paid within one month after that (para 32).

Judgment digest by NyayVidhan: a summary of the court's judgment, not its text. The judgment itself is the authoritative version.

Brief Facts

The petitioner union's members are employees of the Rajasthan Rajya Sahkari Avasan Sangh Ltd., a co-operative society registered under the Rajasthan Co-operative Societies Act, 1965 (para 2). The union's first writ on selection scales ended in 2006 because the benefits had already been granted (para 23). In its second writ, a co-ordinate Bench held on 15.10.2015 that the members were entitled to Sixth Pay Commission benefits and directed the Registrar, Co-operative Societies, to decide the federation's proposal (para 24). On 30.12.2015 the Registrar refused the benefits, relying on the federation's losses (paras 3, 9). The Registrar defended that order on the federation's finances and accounts (paras 13-19); the federation itself supported the union (para 21).

Court's Findings

The union's first writ was closed after the selection-scale benefits were extended, and the 15.10.2015 judgment recorded a specific finding that its members were entitled to Sixth Pay Commission benefits (paras 23-24). P.R. Swarankar, decided at the Principal Seat, had held that the Registrar could not refuse those benefits to a loss-making co-operative society's employees and that the refusal violated Articles 14 and 21 (para 25). Following it, the Court held that the members cannot be denied pay fixation under the Sixth Pay Commission or later revisions, and cannot be blamed for any losses; the Registrar placed nothing on record to justify a different view, and the denial violated Articles 14 and 21 (para 26). The loss defence also failed on the facts: audited statements showed profits from 2018-19 to 2022-23, a bare assertion that audited accounts were improper could not be accepted, and the federation's own office note of 16.02.2009 recorded regular profits and capacity to bear the burden (paras 27-28). A.K. Bindal concerned parity sought by employees of a sick government company, and Barak Upatyaka did not bar the petition because the union's earlier writs seeking similar reliefs had been entertained (para 29).

Legal Principle

Employees of a co-operative society cannot be denied revised pay scales because the society is running at a loss; they cannot be blamed for such losses, and the denial violates Articles 14 and 21. A loss plea contradicted by audited accounts showing profits cannot rest on a bare assertion that those accounts are improper (paras 26-28).

Precedents Relied Upon

P.R. Swarankar & Ors. v. State of Rajasthan & Ors. 2011 WLC (4) (Raj) 554
Applied Discussed at ¶ 8, 10, 25, 26, 30
Losses of a co-operative society are no ground to deny its employees revised pay scales, and the denial violates Articles 14 and 21; the Court followed it and found nothing on record to take a different view.
Rajasthan Rajya Sahakari Avasan Karamchari Sangh v. State of Rajasthan & Ors. S.B. Civil Writ Petition No.14262/2010
Applied Discussed at ¶ 5, 6, 14, 24, 26, 29, 30
The union's earlier writ, decided 15.10.2015, held its members entitled to Sixth Pay Commission benefits and selection-scale benefits; the Court agreed with that finding and relied on it to reject the maintainability objection.
A.K. Bindal & Anr. v. Union of India & Ors. (2003) 5 SCC 163
Distinguished Discussed at ¶ 16, 29
Relied on by the Registrar; it concerned parity sought by employees of a sick government company with government employees and did not assist the Registrar.

View all precedents (4)

State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha (2009) 5 SCC 694
Distinguished Discussed at ¶ 16, 29
Relied on by the Registrar to argue that a trade union cannot seek directions for the government to pay salaries of co-operative society employees; it did not bar this petition because the union's earlier writs seeking similar reliefs had been entertained.

Statutory Provisions