Madras HC upholds autonomy of Co-operative credit societies, junks Govt circular

MADURAI: Holding that cooperative credit societies have independent power and the right to fix salaries as per their financial status, which the government cannot interfere with, the Madurai Bench of Madras High Court recently quashed a circular issued in 2014 by the Registrar of Tamil Nadu Cooperative Societies laying down guidelines for societies while fixing salary and other monetary benefits of its employees. Justice S Srimathy passed the order while hearing two petitions filed in 2014 and 2015, challenging the circular with respect to Athinathapuram and Meignanapuram PACCS in Tiruchendur taluk. 

Justice Srimathy rejected the government’s argument that the circular was issued to disburse salaries uniformly in all cooperative societies in Tamil Nadu. She also said that the absence of guidelines from the Reserve Bank of India (RBI) or the National Bank for Agriculture and Rural Development (NABARD) cannot be cited as ground for issuing the circular, as there is no necessity for such guidelines 
for fixing salary and remunerations.