THE HON’BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY W.P.No.37648 of 2025 and W.M.P.No.42132 of 2025 The Management, Tamil Nadu Co-operative Marketing Federation,

by Sekar Reporter · February 13, 2026

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Orders reserved on : 29.01.2026

Orders pronounced on : 12.02.2026

CORAM :

THE HON’BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY

W.P.No.37648 of 2025

and W.M.P.No.42132 of 2025

The Management,

Tamil Nadu Co-operative Marketing Federation,

Represented by its Secretary,

No.91, St. Mary’s Road,

Chennai – 600 018. .. Petitioner

Versus

1. The General Secretary,

Tamil Nadu Co-operative Marketing

Federation Employees Progressive Union,

No.91, St. Mary’s Road,

Chennai – 600 018.

2. The Registrar of Co-operative Societies,

No. 170, E.V.R. Periyar High Road,

Kilpauk, Chennai – 600 010 . .. Respondents

(R2 suo motu impleaded as per the order,

dated 12.02.2026 in W.P.No.37648 of 2025)

Prayer : Writ Petition filed under Article 226 of the Constitution of India seeking a Writ of Certiorari, by calling for the records leading to the issuance of the order, dated 12.08.2025 passed in O.P.No.216 of 2024 by the learned I Additional Labour Court, Chennai and quash the same.

For Petitioner : Mr.B.Aravind Srevatsa

For Respondents : Mr.R.Jayaram, for R1

: Mrs.M.Geetha Thamaraiselvan,

Special Government Pleader,

for R2

ORDER

This Writ Petition is filed challenging the award passed by the I Additional Labour Court, Chennai, dated 12.08.2025 in O.P.No.216 of 2024. By the Government Order, dated 04.09.2024, the questions as to whether the Demand Nos.1 to 5, raised by the trade union, were justified and if so, to pass further orders, were referred for adjudication by the Labour Court. The Labour Court, by the impugned award, dated 12.08.2025 held that all the four demands raised by the respondent union are justified. Aggrieved by the same, this Writ Petition is filed.

2. The management namely, Tamil Nadu Co-operative Marketing Federation is an apex society registered under the Tamil Nadu Co-operative Societies Act, 1981. It is stated that the primary functions of the management are to identify the agricultural input requirements for the farmers and to arrange for storage and distribution of fertilizers, seeds, pesticides and agricultural implements through the co-operative outlets, to provide market support to the affiliated Member Co-operative Marketing Societies in procuring, storing and marketing of agricultural commodities, to provide storage facilities for perishable agricultural commodities and agro-based products by maintaining cold storage plants, to undertake manufacture of agricultural inputs such as granulated fertilisers, manure mixture, quality seeds and distribution of kerosene.

3. It is stated that the shareholders of the petitioner management are the primary co-operative marketing societies working on the taluk level in the districts of Thanjavur, Thiruvarur and Nagapattinam, the Thanjavur Co-operative Marketing Federation, Thiruvarur, Tamil Nadu Warehousing Corporation and the Government of Tamil Nadu. The first respondent is the trade union registered under the Trade Unions Act, 1926, representing the workmen under the petitioner management. With reference to the employees working under the petitioner management, it is stated that the revision of wages takes place once in five years. By a settlement entered into under Section 12(3) of the Industrial Disputes Act, 1947, the last wage revision was for the period between 01.01.2017 upto 31.12.2021 and the same was approved by the Registrar of Co-operative Societies on 19.02.2019. Thus, the next wage revision fell due with effect from 01.01.2022.

4. The first respondent union raised several demands with reference to pay hike and several rounds of discussions were held with the management. Thereafter, a dispute was raised and there was conciliation before the Deputy Commissioner of Labour, Chennai and after holding conciliation at the headquarters, a settlement was agreed between the management and the workmen for 30% hike in the wages. Accordingly, a settlement under Section 12(3) of the Industrial Disputes Act, 1947 was entered into on 14.07.2023. An understanding was reached between the workmen and the management to merge the Dearness Allowance along with the basic wages and to grant 30% hike of such merged wages and accordingly, to send a revised proposal to the Registrar of Co-operative Societies.

5. Pursuant thereto, on 28.07.2023, a detailed proposal was submitted by the management to the Registrar of Co-operative Societies. In the proposal, the details of the turn over of the federation in respect of the years 2019-2020, 2020-2021, 2021-2022, were given. The details of the profit and the expenditure incurred by way of salary and that it is about 1.33% for the year 2019-2020, 1.29% for the year 2020-2021 and 1.24% for the year 2021-2022 were given which is way less than 3% that is permitted by the Registrar of Co-operative Societies. It was also further mentioned in the proposal that during the years 1998-2012, since the federation was on cumulative loss, the due revision of wages for the employees was not given. The details as to how the new pay band will be calculated and what will be the financial implications in respect of each and every cadre, was also given in detail. It was stated that a sum of Rs.2,17,65,052/- would be the additional financial burden for the society and if considered for the year 2021-2022, it would only be 1.52% of the total turn over. It was also further stated that federation is functioning with optimum cadre strength. The society can bear the financial burden of merging 17% Dearness Allowance that is being paid along with the basic wages and to give 30% hike and therefore, sought for prior approval to enter into a 12(3) settlement with the workmen.

6. It must be noted that the special bylaw was also framed under the Tamil Nadu Co-operative Societies Rules, 1988 which also make it mandatory to get the prior approval to obtain the approval of the Registrar of Co-operative Societies before entering into any wage/settlement/revision with the workmen.

7. On 19.01.2023, in reply to the proposal, the Registrar of Co-operative Societies granted approval, but, on the scales of pay mentioned thereunder in the communication by permitting 20% hike instead of 30% and fixing 14% Dearness Allowance as the starting rate in the revised pay. It also granted approval of 30% hike in the House Rent Allowance and the details of approval with reference to various other heads, are also mentioned.

8. Pursuant to the approval, a bilateral settlement under Section 18(1) of the Tamil Nadu Co-operative Societies Act, 1983 was entered into by implementing the wage hike as per the directives of the Registrar of Co-operative Societies that is by merging 17% Dearness Allowance with basic and granting a hike of 20%. The other allowances were also revised according to the directives of the Registrar. It can be seen that on behalf of the management, Secretary of the society signed. Some of the office bearers of the first respondent trade union and another trade union by name, Bamani TANFED Anna Staff union had signed the settlement. It is stated that the same was also implemented. The General Secretary of the first respondent trade union and some of the office bearers have walked out of the negotiation and they were not the parties to the settlement.

9. Thereafter, they had raised the four demands primarily, revolving around the 30% hike which was referred for adjudication by the Government. Before the Labour Court, one K.Kamatchi was examined as W.W.1 and Ex.W-1 to Ex.W-13 were marked. On behalf of the management, one Ganapathi was examined as M.W.1 and Ex.M-1 to Ex.M-10 were marked. The Labour Court considered the case of the parties and held that the Registrar of Co-operative Societies is no way connected with the affairs of the workmen and the management and the settlement, either under Section 12(3) or under Section 18(1) of the Industrial Disputes Act, 1947 should be signed only by them and a settlement under Section 12(3) is placed on a higher pedestal since it involves the conciliation of the officer also. The Labour Court further held that when the management and the workmen had come to an understanding about 30% hike vide Ex.W-3, the Registrar of Co-operative Societies cannot arbitrarily interfere with the same. It is not within the domain of the Registrar of the Co-operative Societies to have modified the increase to 20%. When the management had originally consented to 30%, only because the Registrar’s interference, the same is now reduced and accordingly, held that the claim of the workmen to grant them 30% pay hike as per the original understanding in Ex.W-3 is justified and passed an award. Aggrieved by the same, the management is before this Court.

10. Heard Mr.B.Aravind Srevatsa, learned Counsel for the petitioner, Mr.R.Jayaram, learned Counsel for the first respondent and Mrs.M.Geetha Thamaraiselvan, learned Special Government Pleader for the second respondent.

11. Mr.B.Aravind Srevatsa, learned Counsel for the petitioner would submit that when a settlement thereafter had been entered into under Section 18(1) of the Industrial Disputes Act, 1947, whereby, the majority of the workmen have agreed for the 20% hike, thereafter, the present Claim Petition is not maintainable. In support of his proposition, the learned Counsel would rely upon the judgment of the Hon’ble Supreme Court of India in ITC Ltd. Workers’ Welfare Association and Anr. Vs. management of ITC Ltd. and Anr.[1]. He would also submit that the findings of the Labour Court that the Registrar of Co-operative Societies cannot interfere with the settlement is also incorrect in law. The learned Counsel would rely upon the judgment of this Court in Tamil Nadu Vatta Kooturavu Veetu Vasathi Sangangalin Anaithu Paniyalargal Madya Sangam Vs. The Deputy Registrar of Cooperative Societies (Housing) and Ors.[2].

12. Per contra, Mr.R.Jayaram, learned Counsel for the first respondent trade union would take this Court as to the scales of pay and the detailed justification as to why 30% hike has to be granted. He would submit that the outer limit fixed by the Registrar of Co-operative Societies is only 3% of the total turn over. In the instant case, even if the hike is granted, the expenditure by way of salary, would be way less than 2% even if the entire cadre strength is filled. As a matter of fact, the federation, at all times, was functioning with huge vacancies and these staff were manning additional responsibilities and were putting in yeoman service and the federation was making and is making good amount of profit. There was no justification on the part of the Registrar of Co-operative Societies to have interfered with the lawful understanding that was made. The learned Counsel would take this Court in detail about the final audit certificates for the federation for the years 2022-2023, 2023-2024 etc., and submit that the management is a profit making entity and cannot be put on par with the other institutions.

13. I have considered the rival submissions made on either side and perused the material records of the case.

14. Firstly, it can be seen that the special bylaw was marked as Ex.M-10 and the Clause-4(d) reads as follows:-

“d. No settlement under 12 (3) or 18(1) of the Industrial Dispute Act, 1947, with the employees union or association with regard to pay and allowances shall be made by the Board or any officer of the Federation without prior approval in writing of the Registrar.

Provided further that no such settlement shall be signed on behalf of the Federation except by an Officer or Officers duly authorized in writing by the Registrar in this behalf.

Provided also that no payment of any special pay or special allowances ex-gratia or any other perquisites shall be granted except through such settlement (or) with the sanction of the General Body and the Registrar in writing.

Provided also that where the expenditure on establishment charges is beyond its paying capacity, the Federation may, with the approval of the writing, General Body, implement a lesser scale of pay or reduce or dispense with the allowances to the extent necessary.”

Thus, it can be seen that the prior approval, in writing from the Registrar of Co-operative Societies, is essential as per the special bylaws.

15. The law in this regard has been settled by the Hon’ble Division Bench of this Court in Tamil Nadu Vatta Kooturavu Veetu Vasathi Sangangalin Anaithu Paniyalargal Madya Sangam (cited supra) and after considering Section 181 of the Co-operative Societies Act, it was held in paragraph Nos.9 and 10 as follows:-

“9. A reading of the said provision makes it clear that the said provision empowers the Registrar to issue such directions if he is satisfied that in public interest or for the purpose of securing proper implementation of co- operative production and other developmental programmes and also to secure the proper management of the business of any class of registered societies generally or for preventing the conduct of any society which would otherwise be detrimental to the interest of its members or depositors or creditors such directions are imminently required. The powers thus invested with the Registrar under Section 181 of the Act 1983 is wide enough and so long as such powers are exercised keeping in mind the purport and intend of the said provision and with a view to fulfil the statutory obligations prescribed therein, there would be no scope for anyone to contend that the exercise of such power could be called in question.

10. In fact, under Rule 149 of the Rules 1988/ it is specifically provided that by taking into account its nature of business, volume of transaction and financial position, frame a special bye-law, with prior approval of the Government, and such special bye-law should prescribe inter alia the service conditions of its employees, scale of pay and allowances etc. for each such post.”

16. Further, it is also useful to refer to paragraph Nos.13 and 14 of the said judgment which read as follows:-

“13. By no stretch of imagination, the said Rule can be said to be either conflicting with the provisions of I.D. Act or introduced with any other ulterior motive to defeat the lawful rights of the employees of any of the registered societies. The purport of the rule is to ensure that a registered society does not become defunct or unwieldy and any of the registered societies should not be allowed to be closed due to dearth of funds by mismanagement. Therefore, the constitution of the Committee for formulating the common wage structure for the employees of the registered Co-operative Societies by G.O. Ms. No. 289, dated 18.12.1998 and the subsequent G.O. Ms. No. 186, dated 16.8.2000 were all in furtherance of the fulfilment of the above objective of the State Government.

14. In the light of the above factors, we are convinced that the orders impugned in the writ petitions issued by the first respondent directing the respective co-operative societies to cancel the settlements which came to be arrived in contravention of the directions issued by the Registrar of the Co-operative Societies, dated 16.10.1997 issued under Section 181 of the Act 1983 by invoking Section 166 of the Act 1983 are perfectly justified. We are also convinced that the Division Bench decision reported in 1992 1 LLJ 747 upon which heavy reliance was placed upon by the appellant does not in any way support the stand of the appellant. On the other hand, we can only state that the subsequent direction issued by the Registrar of Co-operative Societies, dated 16.10.1997 by invoking the powers vested in him under Section 181 of the Act 1983 was validly made and the impugned orders dated 12.3.1999 and 8.4.1999 passed in pursuance of the said directions of the Registrar, dated 16.10.1997 as well as by applying Section 166 of the Act 1983 were all in tune with the observations made in the above referred to Division Bench decision and therefore, we do not find any scope to interfere with the impugned orders. Moreover, so long as the directions issued by the Registrar, dated 16.10.1997, under Section 181 of the Act 1983 remains in force, the subsequent directions and the impugned orders issued by the first respondent by invoking Section 166 of the Act 1983 were well within the powers and jurisdiction of the first respondent.”

Thus, the first finding of the Labour Court as if the Registrar of Co-operative Societies have got nothing to do with the settlement, cannot be sustained.

17. The legal position, whenever the employees of the Co-operative Societies approach the Labour Court/Industrial Tribunal with reference to the demands such as pay hike, can be summarised as follows:-

(i) If the activity of the Co-operative Society falls within the definition of ‘industry’, certainly, the employees, who fall within the definition of ‘workmen’, have a right to approach the Labour Court/Industrial Tribunal under the Industrial Disputes Act, 1947/Industrial Relations Code, 2020;

(ii) At the same time, the Co-operative Societies are also bound by the scheme of the Tamilnadu Co-operative Societies Act, 1983 and pursuant to Section 181 of the Act and Rule 149 of the Tamilnadu Cooperative Societies Rules, 1988 and the bylaws framed thereunder, any wage settlement requires a prior approval from the Registrar of Co-operative Societies, though in other cases it is simply between the Workmen and the Management. The Registrar of Co-operative Societies, apart from norms that are fixed uniformly in exercise of power such as 3% of the total turn over etc., can also additionally consider the parity in scale of pay between similar posts, but, at the same time, can take into consideration the financial viability of the society also;

(iii) If the Registrar of Co-operative Societies refuses consent or gives an approval with modifications, then, the management of the Co-operative Societies bound by such order and the management can give consent/enter into settlement only in terms of such order of the Registrar of Co-operative Societies;

(iv) If the trade union or the employees, who are aggrieved, apart from taking such steps as against the order of the Registrar, can also approach the Labour Court/Industrial Tribunal for fixation of pay etc.

(v) As and when they approach the Labour Court, the Labour Court/Industrial Tribunal cannot decide the issue merely because prior to the order of the Registrar, the management has tentatively agreed with the workmen. The Labour Court/Industrial Tribunal has to consider the claim on its own merits based on the general principles of law, that is, industry-cum-region rule.

(vi) Under the said rule, due consideration should also be made for the appropriate orders of the Registrar of Co-operative Societies and it must be kept in mind that the Registrar of Co-operative Societies also passes orders on the industry-cum-region rule. But, the Labour Court/Industrial Tribunal will not be bound by the order of the Registrar of Co-operative Societies and if, in a case, it finds justification in the claim of the workmen, it can pass an award based on the evidence on record.

18. In this case, it is true that there was settlement between the management and the workmen and the society has the financial resources and it is well within the 3% of the expenditure limit. The same has also to be taken into account by the Registrar of Co-operative Societies. But, the Registrar of Co-operative Societies also considers the overall scales of pay prevalent throughout the State in respect of respective categories, thereby, ensuring proper management of business of any class of registered society. Thus, in the said context, no exception whatsoever can be taken that originally, when the dispute was pending before the Deputy Commissioner of Labour, the management and the workmen had arrived at tentative settlement with the further understanding that revised proposal will be sent to the Registrar of Co-operative Societies for approval. The said understanding was adhered to by the management by sending an elaborate proposal duly claiming the justification for the same. However, when the Registrar had considered the same, it is simply ordered to follow a particular scale of pay and he had reduced the hike to 20%, the management is bound to follow the same.

19. Subsequently, Section 18(1) settlement has been entered into on the basis of the said approval granted by the Registrar. It is a bilateral settlement and was not entered before the conciliation officer and therefore, the submission of the learned Counsel for the management that by virtue of the dictum of the Hon’ble Supreme Court of India in ITC Ltd. Workers’ Welfare Association’s case (cited supra), the same would be binding on all the employees, cannot be countenanced as Section 18(3) will not come into play in the instant case. Therefore, the petitioner, claiming to be the persons who have not subscribed to the Section 18(1) settlement, can always approach the Labour Court or the Tribunal, as the case may be, making the demands of wage hike.

20. However, the Labour Court, which has the powers to independently assess and come to the conclusion as to the justifiability of the demands, did not make any findings in respect thereto and on the contrary, allowed the claim only by holding that the Registrar of Co-operative Societies has no business to interfere. The said finding is incorrect and not in consonance with laws laid down by the Division Bench of this Court in Tamil Nadu Vatta Kooturavu Veetu Vasathi Sangangalin Anaithu Paniyalargal Madya Sangam’s case (cited supra).

21. Further, it must also be noted in the instant case that when a proposal is made to the petitioner management to the Registrar of Co-operative Societies, it is categorically mentioned by them that during the years 1998-2012, when the society was making cumulative loss, the wage revision, that was due, was never granted to the workmen. The society, therefore, wanted to make good the same by now granting 30% hike as the society is running in profit.

22. On a perusal of the approval order that was passed for 20%, there is no answer or application of mind with reference to the said claim. While it is true, the Registrar of Co-operative Societies will also look into the uniformity of the scales of pay, at the same time, when the uniformity or the eligible pay hike was denied when the concerned society was making loss and subsequently, on account of the efforts put in by the employees when the fortune of the society has made a turn around and it is making profit and when the society wants to catch up with the non-grant of hikes earlier, it is for the Registrar of Co-operative Societies to have considered the same and passed a reasoned order in respect thereof. The same does not seem to have been done. In the instant industrial dispute, obviously, the Registrar of Co-operative Societies is also not a party. Therefore, finding one way or the other could not be made.

23. On account of the interplay between the powers of the Registrar of Co-operative Societies on the one hand and the jurisdiction of the Labour Court/Industrial Tribunal to decide upon the justifiability of the pay hike on the other, this unique anomaly has arisen. However, this Court, in exercise of jurisdiction under Article 226 of the Constitution of India, can resolve the impasse by impleading the Registrar of Co-operative Societies as the second respondent in the Writ Petition and accordingly, a separate order is passed, impleading the Registrar of Co-operative Societies as the second respondent and Mrs.M.Geetha Thamaraiselvan, learned Special Government Pleader takes notice in respect of the second respondent. Notwithstanding the order passed on 15.03.2024, the Registrar of Co-operative Societies shall take up the proposal, dated 28.07.2023 for reconsideration. He can also hear the first respondent union and such other trade union or the employees and the petitioner management, especially, consider the submission that earlier due increase in wages was not granted while the society was making cumulative loss and to consider whether any of the workmen involved were affected on account of the same and take a decision as to whether the claim of the management, agreeing to grant 30% hike, is justified or pass fresh orders of approval.

24. The award of the Labour Court, dated 12.08.2025 shall stand set aside and the matter is remanded back to the I Additional Labour Court, Chennai. The matter shall await the decision afresh to be made by the Registrar of Co-operative Societies and the orders afresh passed by the Registrar of Co-operative Societies, shall be placed on record by either of the parties. Depending on the decision, if the Registrar of Co-operative Societies agreed for further enhanced revision which is agreeable by all the parties, then, accordingly, the fresh award can be passed. If the order that is passed by the Registrar of Co-operative Societies is not agreeable to the workmen or the management and they want further adjudication, it would be open for both sides to let in such additional evidence, if any and the Labour Court shall decide the claim on its own merits in accordance with law. It is made clear that it would be open for the workmen to justify that additional hike has to be given and their claim on merits in accordance with law and it will also be open for the management to take a stand in consonance with the orders of the Registrar of Co-operative Societies as to how the wages that are being granted would be fair and proper. The Labour Court shall pass fresh award after consideration of the case of the parties.

25. In view thereof, this Writ Petition is allowed on the following terms:-

(i) The award of the I Additional Labour Court, Chennai, dated 12.08.2025 passed in O.P.No.216 of 2024, shall stand set aside;

(ii) The second respondent namely, the Registrar of Co-operative Societies, shall take up the proposal, dated 28.07.2023 for reconsideration and issue notice to the management as well as the respondent union and also any such other union or employees after hearing both the sides and giving due opportunity to all concerned, an order shall be passed either affirming the earlier order, dated 15.03.2024 or agreeing for any such modification and in any event, reasoned order shall be passed as to the stand that is taken by both the workmen as well as the management in that regard;

(iii) The said exercise shall be completed within a period of two months from the date of receipt of a web-copy of this order;

(iv) The Labour Court shall await the said decision and once a decision is taken, a copy thereof shall be marked by either of the parties and if not, the Labour Court shall take the same on file as a Court document and proceed further to decide the reference in accordance with the observations made above.

(v) There shall be no order as to costs. Consequently, connected miscellaneous petition is closed.

12.02.2026

Neutral Citation : yes

grs

1. The I Additional Labour Court,

Chennai.

2. The Registrar of Co-operative Societies,

No. 170, E.V.R. Periyar High Road,

Kilpauk, Chennai – 600 010 .

D.BHARATHA CHAKRAVARTHY, J.

grs

W.P.No.37648 of 2025