once on comparing the language of Section 69 and that of Section 70 as amended by the first amendment, a conclusion is reached that both Sections are akin to each other till 20.06.2000, a fortiori, the law laid down in Dharappa’s case insofar as it interprets Section 70 as it originally stood and amended by Amendment Act 19/1976 would apply to Section 69 of the KCS 50 Act. On the other hand, the ratio will not apply after 20.06.2000 because from that date, there was a change in the language of Section 70 which provided a clause to exclude the Jurisdiction of other Courts in express terms by Amendment Act of 2/2000.- the Labour Court in this case was competent to decide the service dispute raised by the Employee (appellant herein) under the ID Act. - Smt. K.A. Annamma ….Appellant(s) VERSUS The Secretary, Cochin Co-operative Hospital Society Ltd. …Respondent(s)

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 197 OF 2018
(Arising out of S.L.P.(C) No.29765 of 2016)
Smt. K.A. Annamma ….Appellant(s)
VERSUS
The Secretary, Cochin
Co-operative Hospital Society Ltd. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is directed against the final
judgment and order dated 21.12.2015 passed by
the High Court of Kerala at Ernakulam in W.P.(C)
No.18354 of 2010 whereby the High Court allowed
the writ petition filed by the respondent herein and
2
set aside the award dated 23.09.2009 of the Labour
Court, Ernakulam in I.D.No.32 of 2006.
3. In order to appreciate the controversy involved
in the appeal, which is essentially legal in nature,
mentioning of few undisputed facts would suffice.
Facts in brief
4. The respondent is the Cooperative Society
registered under the Kerala Co-operative Societies
Act, 1969 (hereinafter referred to as “the KCS Act”).
The appellant was an employee of the
respondent-Society. By order dated 22.03.2005, the
respondent-Society dismissed the appellant from
service.
5. The appellant, felt aggrieved of her dismissal
order, filed a complaint with the State Government
against the respondent-Society under the Industrial
Dispute Act, 1947 (hereinafter referred to as “the ID
Act”). The conciliation having failed, the appropriate
Government made an industrial reference to the
Labour Court, Ernakulum under Section 10 of the
3
ID Act for deciding the legality and correctness of
the appellant's dismissal and to pass appropriate
consequential orders, if any.
6. The Labour Court, by award dated 23.09.2009
answered the reference in appellant’s favour. It was
held that the dismissal order is bad in law and was
accordingly set aside. It was held that during the
pendency of the reference, the appellant has
attained the age of superannuation on 31.05.2007,
therefore, she was entitled to get all monetary and
other service benefits as are permissible in law.
7. The respondent, felt aggrieved of the award of
the Labour Court, filed Writ Petition (Civil)
No.18354 of 2010 in the High Court of Kerala and
questioned its legality and correctness.
8. At this stage, it is necessary to state as to how
the question involved in the writ petition, which
eventually reached to this Court was decided by the
different Benches of the Kerala High Court prior to
4
respondent’s filing the writ petition and during its
pendency.
9. The question, which frequently came up for
consideration before the different Benches of the
High Court of Kerala since 1978, was "when a
service dispute arises between an Employee of any
Co-operative Society and his Employer (Co-operative
Society), whether such dispute is triable by the forum
prescribed under the ID Act or under the KCS Act or
under both the Acts as per the choice of an aggrieved
person to select the forum under any of the two Acts
for deciding such service dispute".
10. In other words, the question was “whether a
service dispute arising between the Cooperative
Society’s Employee and his Employer is capable of
being tried by the forum prescribed under the KCS
Act or by the machinery provided under the ID Act or
it is capable of being tried under both the Acts leaving
the aggrieved person to select one forum under any of
5
the Acts of his choice out of the two for getting his/her
service dispute decided by such forum."
11. The aforesaid question was first decided by two
Full Benches of the Kerala High Court in K.
Balachandran vs. The Dy. Registrar, Co-operative
Societies & Ors., AIR 1978 Kerala 126 = 1978 KLT
249 and Sherly M.U. vs. The President,
Parappuram Milk Producers Co-op. Society Ltd.
& Ors., 2007(1)KLT 809 wherein it was held on the
facts involved in both the cases that the dispute,
which had arisen between the Co-operative Society’s
Employee and his/her Employer, was not capable of
being decided under Section 69 of the KCS Act as it
stood then.
12. This question again came up for consideration
before a Single Judge of the High Court in Board of
Directors, Edava Service Co-operative Bank vs.
The Co-operative Arbitration Court & Ors.,
2008(3) KLT 780 wherein it was held that a service
dispute between a Co-operative Society’s employee
6
and his/her employer is capable of being tried
under both the Acts inasmuch as both the Acts
enjoy concurrent jurisdiction to try and decide such
service dispute.
13. In other words, according to the Single Judge,
one Act does not exclude the other and, therefore,
both the Acts possess concurrent jurisdiction to
decide such dispute leaving the aggrieved person to
choose the forum of his/her choice under any Act
out of the two Acts.
14. This question was again considered by the
Division Bench in Thodupuzha Taluk General
Marketing Co-operative Society vs. Michael
Sebastian, 2010 (1) KLT 938 wherein the Division
Bench concurred with the view of the Single Judge
taken in Board of Directors, Edava Service
Co-operative Bank (supra). It was accordingly
reiterated.
15. Lastly, this question was considered by
another Single Bench in W.P.(C) No.30854/2007
7
entitled Chirayinkeezhu Service Co-operative
Bank Ltd. No.115 vs. K. Santosh & Anr. and then
by the Division Bench in Writ Appeal
No.2516/2009, arising out of the said writ petition.
While hearing the writ appeal, a doubt was raised
before the Division Bench about the correctness of
the earlier decision rendered in the case of
Thodupuzha Taluk General Marketing
Co-operative Society(supra) contending that the
said decision requires reconsideration for various
reasons.
16. Acceding to this prayer, the case was referred
to the larger Bench to reconsider the law laid down
in Thodupuzha Taluk General Marketing
Co-operative Society(supra). This is how the case
was placed before the larger Bench comprising of
three learned Judges.
17. While the larger Bench was hearing the case, it
was noticed that the earlier two decisions of the Full
Bench also need reconsideration because the Single
8
Judge and the Division Bench, subsequent to the
decisions of the Full Bench, have taken a slightly
different view, which appears to be in conflict with
the two Full Bench decisions, resulting in cleavage
of opinions amongst the various Benches of the
same High Court on one question. It is for this
reason, there arose a need to constitute a larger
Bench comprising of five Judges to examine the
question afresh to settle the controversy.
18. The Bench of three Judges then formulated as
many as 9 questions to enable the Bench of five
Judges to answer the questions referred by the
Three-Judge Bench.
19. By order dated 14.09.2015, the Five-Judge
Bench answered the questions referred in the case
of Chirayinkeezhu Services Cooperative Bank
Ltd. vs. Santosh, 2015(4) KLT 163(LB). However,
there was a difference of opinion amongst the five
Judges (3:2) on the questions referred.
9
20. So far as the majority view of three Judges is
concerned, it held that the service dispute arising
between the Co-operative Society’s Employee and
the Employer (Co-operative Society) is triable only
by the forum prescribed under the KCS Act, 1969
and the jurisdiction of the ID Act is excluded and
barred to try such service dispute.
21. So far as the minority view of two Judges is
concerned, it held that such service dispute is
triable under both the Acts, i.e., the KCS Act and
the ID Act. In other words, it held that both the Acts
possess and enjoy concurrent jurisdiction to decide
such service dispute and it is for the aggrieved
person to choose the forum of his/her choice out of
the two Acts to get the service dispute settled
subject to proving the ingredients of the definition of
"Workman", "Industrial Dispute" and the
cooperative Society to be the “Industry” as defined
under the ID Act, if he/she desires to invoke the
10
jurisdiction of the ID Act for deciding the service
dispute.
22. Relying upon the majority view, the writ
petition filed by the respondent(employer) in the
case at hand was allowed by the learned Single
Judge, resulting in setting aside of the award of the
Labour Court, giving rise to filing of this appeal by
way of special leave before this Court by the
employee.
23. Heard Mr. P.V. Surendranath, learned senior
counsel for the appellant and Mr. Ramesh Babu,
learned counsel for the respondent.
24. Learned counsel for the appellant (employee)
while assailing the legality, correctness and the
reasoning of the majority Judges (3) contended that
the majority view does not appear to be in
conformity with the law laid down by this Court in
Dharappa vs. Bijapur Coop. Milk Producers
Societies Union Ltd. (2007) 9 SCC 109 whereas
the view taken by the minority Judges (2) appears to
11
be in conformity with the law laid down in the case
of Dharappa(supra) and, therefore, the minority
view, according to learned counsel, deserves to be
upheld by this Court.
25. Placing strong reliance on the ratio laid down
in the case of Dharappa(supra), learned counsel
contended that if the ratio of Dharappa’s case is
applied in its correct perspective to the facts of the
case at hand, the question involved in the appeal
has to be answered in appellant's favour by
upholding the view of the minority Judges which
rightly held that both the Acts, i.e., the KCS Act and
the ID Act, possess and enjoy concurrent
jurisdiction to decide the service disputes arising
between the Co-operative Society’s Employee and
his/her Employer-Cooperative Society.
26. Learned counsel urged that the award of the
Labour Court impugned in the writ petition by the
respondent, therefore, deserves to be upheld and
the case needs to be remanded to the writ court
12
(Single Judge) for deciding the writ petition on
merits.
27. It is this submission, which the learned
counsel elaborated by placing reliance on the
decision of Dharappa(supra), the relevant provisions
of the KCS Act, 1969 and the Karnataka
Co-operative Societies Act, 1959 (hereinafter
referred to as “Karnataka CS Act”).
28. In reply, learned counsel for the
respondent-Society (Employer) contended that the
view taken by the majority of the Judges (3) being in
accordance with law, it does not call for any
interference.
29. Learned counsel elaborated his submission by
referring to the ratio of Dharappa’s case, relevant
provisions of KCS Act and Karnataka CS Act in
support of his submission.
30. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
13
find force in the submission of learned counsel for
the appellant (Employee).
31. In our considered view, we are inclined to
uphold the minority view for the reasons given infra.
32. At the outset, it is considered necessary to set
out the relevant Sections of the KCS Act, which
have bearing over the controversy:
“Section 2(i)
2(i) “dispute” means any matter touching the
business, constitution, establishments or
management of a society capable of being the
subject of litigation and includes a claim in
respect of any sum payable to or by a society,
whether such claim be admitted or not”.
Un-amended Section 69
“69.Disputes to be referred to Registrar-(1)
Notwithstanding anything contained in any
law for the time being in force, if a dispute
arises(a)
among members, past members and persons
claiming through members, past members
and deceased members; or
(b) between a member, past members or person
claiming through a member, a past member
or deceased member and the society, its
committee or any officer, agent or employee
of the society; or
(c) between the society or its committee and any
past committee, any officer, agent or
employee or any past officer, past agent or
past employee or the nominee, heirs or legal
14
representatives of any deceased officer,
deceased agent or deceased employee of the
society; or
(d) between the society and any other society; or
(e) between a society and the members of a
society affiliated to it; or
(f) between the society and a person other than
a member of the society, who has been
granted a loan by the society or with whom
the society has or had business transactions
or any person claiming through such a
person; or
(g) between the society and a surety of a
member, past member, deceased member or
employee or a person other than a member,
who has been granted a loan by the society
whether such a society is or is not a member
of the society; or
(h) between the society and a creditor of the
society, such dispute, shall be referred to the
Registrar for decision, and no court shall
have jurisdiction to entertain any suit or
other proceeding in respect of such dispute.
Explanation:- In this section and in Section
70, the term “Registrar” means the Registrar
of Co-operative Societies appointed under
sub-section (1) of Section 3 and includes any
person on whom the powers of the Registrar
under this Section and Section 70 are
conferred.
(2) For the purposes of sub-section (1), the
following shall also be deemed to be disputes,
namely:-
(a) a claim by the society for any debt or
demand due to it from a member or the
nominee, heirs or legal representatives of a
deceased member whether such debt or
demand be admitted or not;
15
(b) a claim by a surety against the
principal debtor where the society has
recovered from the surety any amount in
respect of any debt or demand due to it from
the principal debtor as a result of the default
of the principal debtor, whether such debt or
demand is admitted or not;
(c) any dispute arising in connection with
the election of the Board of Management or
any officer of the society;
Explanation:- A dispute arising at any stage
of an election commencing from the
convening of the general body meeting for
the election shall be deemed to be a dispute
arising in connection with the election.
(3) No dispute arising in connection with
the election of the Board of Management or
an officer of the society shall be entertained
by the Registrar unless it is referred to him
within one month from the date of the
election.
(4) If any, question arises whether a
dispute referred to the Registrar under the
section is a dispute as defined in clause (i) of
Section 2 the decision thereon of the
Registrar shall be final.”
Amended Section 69 by Amending Act
1/2000 w.e.f. 02.01.2003
“69. Disputes to be decided by Co-operative
Arbitration Court and Registrar(1)
Notwithstanding anything contained in any
law for the time being in force, if a dispute
arises(a)
Among members, past members and persons
claiming through members, past members
and deceased members; or
(b) Between a member, past member or person
claiming through a member, a past member
or deceased member and the society, its
16
committee or any officer, agent or employee
of the society; or
(c) Between the society or its committee and
any past committee, any officer, agent or
employee or any past officer, past agent or
past employee or the nominee, heirs or legal
representatives of any deceased officer,
deceased agent or deceased employee of the
society; or
(d) Between the society and any other society; or
(e) Between a society and the members of a
society affiliated to it; or
(f) Between the society and a person, other than
a member of the society, who has been
granted a loan by the society or with whom
the society has or had business transactions
or any person claiming through such a
person; or
(g) Between the society and a surety of a
member, past member, deceased member or
employee or a person, other than a member,
who has been granted a loan by the society,
whether such a surety is or is not a member
of the society; or
(h) Between the society and a creditor of the
society, such dispute shall be referred to the
Co-operative Arbitration Court constituted
under Section 70A in the case of
non-monetary disputes and to the Registrar,
in the case of monetary disputes and the
Arbitration Court, or the Registrar, as the
case may be, shall decide such dispute; and
no other Court or other authority shall have
jurisdiction to entertain any suit or other
proceedings in respect of such dispute.
(2) For the purposes of sub-section (1), the
following shall also be deemed to be disputes,
namely:-
(a) a claim by the society for any debt or demand
due to it from a member or the nominee,
heirs or legal representatives of a deceased
17
member, whether such debt or demand be
admitted or not;
(b) a claim by a surety against the principal
debtor, where the society has recovered from
the surety any amount in respect of any debt
or demand due to it from the principal
debtor, as a result of the default of the
principal debtor, whether such debt or
demand is admitted or not;
(c) any dispute arising in connection with the
election of the Board of Management or any
officer of the society;
Explanation- A dispute arising at any stage
of an election commencing from the
convening of the general body meeting for
the election, shall be deemed to be a dispute
arising in connection with the election;
(d) Any dispute arising in connection with
employment of officers and servants of the
different classes of societies specified in
sub-section(1) of S.80, including their
promotion and inter se seniority.
(3) No dispute arising in connection with the
election of the Board of Management or an
officer of the society shall be entertained by
the Co-operative Arbitration Court unless it
is referred to it within one month from the
date of the election.”
Unamended Section 70
70. Decision and award on disputes:-
(1) The Registrar may, on receipt of the
reference of a dispute under Section 69:-
(a) elect to decide the dispute himself; or
(b) transfer it for disposal to any person
who has been invested by the Government
with powers in that behalf; or
(c) refer it for disposal to an arbitrator
appointed by the Registrar.
18
Provided that a transfer under clause (b)
or a reference under clause (c) shall not be
made to a person equal or superior to him in
rank.
(2) The Registrar may withdraw any reference
transferred under clause (b) of sub-section (1)
or referred under clause (c) of that
sub-section and he may elect to decide the
dispute himself or transfer it to any other
person under clause (b) of sub-section (1) or
refer it to any other arbitrator under clause
(c) of that sub-section.
(3) The Registrar or such person shall decide the
dispute, or the arbitrator shall pass an award,
in accordance with the provisions of this Act
and the rules and the bye-laws and such
decision or award shall, subject to the
provisions of S.82, be final. Pending decision
or award, the Registrar, such person or
arbitrator as the case may be, may make such
interlocutory orders as he may deem
necessary in the interest of justice.
(a) the nature of the allegations showing that the
elections were vitiated.
(b) the existence of prima facie case which
means whether respondents have a chance of
success and
(c) whether the interest of justice require that
an interlocutory order must be made.
Amended Section 70 by Amending Act
1/2000
70. Award on disputes:- (1) the Co-operative
Arbitration Court, on receipt of reference of a
dispute under sub-section (1) of Sec. 69, shall
pass an award within one year in accordance
with the provisions of this Act and the rules
and the bye-laws made thereunder and such
award shall, subject to the provisions of Sec.
82, be final.
19
(2) The Co-operative Arbitration Court
may, pending award of a dispute referred to it
under Section 69, make such interlocutory
orders as it may deem necessary in the
interests of justice.
(3) The Co-operative Arbitration Court
shall have the same powers as are vested in a
civil court under the Code of Civil Procedure,
1908 (Central Act 5 of 1908), while trying a
suit in respect of the following matters,
namely:-
(i) the summoning and enforcing the
attendance of any defendant or witness and
examining the witness on oath;
(ii) the discovery and production of any
document or other material object producible
as evidence;
(iii) the reception of evidence on
affidavits;
(iv) issuing of any commission for the
examination of any witness; and
(v) any other matter which may be
prescribed.
(4) The Registrar may, on receipt of the
reference of a dispute under sub-section(1) of
Sec. 69-
(a) elect to decide the dispute himself;
or
(b) transfer it for disposal to any person
who has been invested by the Government
with powers in that behalf; or
(c) refer it for disposal to an arbitrator
appointed by the Registrar:
Provided that a transfer under clause (b)
or a reference under clause (c) shall not be
made to a person equal or superior to him in
rank.
(5) The Registrar may withdraw any
reference transferred under clause (b) of
sub-section (4) or referred under clause (c) of
that sub-section and he may elect to decide
the dispute himself or transfer it to any other
20
person under clause (b) of sub-section (4) or
refer it to any other arbitrator under clause
(c) of that sub-section.
(6) The Registrar or the person
invested with powers in this behalf shall,
decide the dispute or the arbitrator shall pass
an award in accordance with the provisions of
this Act and the rules and the bye-laws and
such decision or award shall, subject to the
provisions of Sec. 82, be final. Pending
decision or award, the Registrar, such person
or the Arbitrator, as the case may be, may
make such interlocutory orders as he may
deem necessary in the interests of justice.
100. Bar of jurisdiction of courts:- No civil or
revenue court shall have any jurisdiction in
respect of any matter for which provision is
made in this Act.”
 (Emphasis supplied)
33. Before we examine the question, it is apposite
to take note of the findings of the majority as well as
minority Judges on the question.
34. We find that both majority and minority
Judges examined the questions largely in the light
of the ratio laid down by this Court in Dharappa’s
case (supra). Indeed, the learned counsel, in their
submissions before us, did not make any attempt to
contend that the law laid down in the case of
Dharappa (supra) needs reconsideration on any
issue. On the other hand, both sides proceeded to
21
make their submissions that, firstly, Dharappa’s
case has laid down the correct principle of law on
facts involved therein and secondly, what needs to
be examined is whether its ratio applies to the facts
of this case and, if so, how and to what extent.
35. In our opinion also, it may not be necessary to
examine the issue involved in this case in the light
of any other decision except confining its
examination to the ratio laid down in Dharappa’s
case because Dharappa’s case has discussed all
earlier decisions of this Court on the subject in
extenso.
36. So far as the view of majority (3) Judges, one
concurring with two, is concerned, though they
discussed several issues in detail in their
concurring opinion but in substance, in our view,
their findings on material issues are as under:
37. First, the language of Section 69 of the KCS
Act as it originally stood is materially different from
the language used in its counter part Sections of
22
two earlier repealed Kerala Co-operative Societies
Acts of 1932 and 1951. This departure made in the
language employed in Section 69 of the KCS Act qua
language of earlier two repealed Acts is significant
and has a material bearing while answering the
questions. (Para 17/18)
38. Second, since the KCS Act, 1969 has received
the Assent of the President on 11.04.1969, it was
not necessary for the State to have obtained another
Assent of the President for enacting Amending Act
(1/2000) by which some provisions of the KCS Act,
1969 were amended w.e.f. 02.01.2003.
39. In other words, once the KCS Act of 1969 has
received the Assent of the President, it is not
necessary for the State to obtain another Assent of
the President for passing the Amendment Act
1/2000. It is more so when it has received the
Assent of the Governor (Para 45).
40. Third, on interpreting the relevant provisions
of the KCS Act, whether independently or/and in
23
juxtaposition, it is clear that the KCS Act, 1969 as
originally stood and as amended by Act (1/2000)
overrides any other law for the time being in force
including the ID Act, 1947 insofar as it deals with
the service disputes arising between the
Co-operative Society’s Employee and his/her
Employer.
41. In other words, the KCS Act, 1969 has an
overriding effect on the ID Act 1947 since its
inception insofar as it deals with the service
disputes arising between a Co-operative Society’s
Employee and his/her Employer and thus excludes
the applicability of the ID Act.
42. Any service dispute arising between a
Co-operative Society’s Employee and his/her
Employer (Co-operative Society) is, therefore, triable
only by the authorities and the forum specified
under the KCS Act 1969, whether prior to or after
the amendments made by the Amendment Act No.1
24
of 2000 and not by any authority/Court/Tribunal
under any law for the time being in force.
43. A fortiori, the jurisdiction of the Labour Court
and Industrial Tribunal under the ID Act is,
excluded and barred to decide any such service
dispute.
44. Fourth, the language of Section 69 of the KCS
Act, 1969 as it originally stood including the
amended one and that of Section 70 of the
Karnataka CS Act which fell for interpretation in
Dharappa's case is not in pari meteria with each
other and not being identical, the ratio of
Dharappa’s case may not apply to that extent while
interpreting Section 69 of the KCS Act.
45. Fifth, the Amendment Act (1 of 2000), which
amended Section 69(2)(d) of the KCS Act, is only by
way of an abundant caution and it has no effect on
Section 69 of the KCS Act.
46. So far as the view of minority Judges (2) is
concerned, in substance, it held:
25
47. First, the question involved in the case is
squarely covered by the ratio laid down in
Dharappa’s case.
48. Second, Section 69 of the KCS Act and Section
70 as it originally stood and as amended by first
Amendment Act (19 of 1976) of the Karnataka CS
Act, are identically worded and, therefore, the ratio
of Dharappa’s case would apply while interpreting
Section 69 of the KCS Act.
49. Third, the Assent of the President was required
for passing the Amendment Act No.1 of 2000 of the
KCS Act.
50. Fourth, since no Assent of the President was
obtained, the Amendment Act (1 of 2000) did not
make any effect on the exclusion of the jurisdiction
of the forum under the ID Act. That apart, Section
69 or Section 100 of the KCS Act also does not have
a clause akin to Section 70 of the Karnataka CS Act
as amended by Amendment Act (2 of 2000)
providing therein a clause for express exclusion of
26
the jurisdiction of the Civil Court, the Labour Court
and the Industrial Tribunal from deciding the
service dispute.
51. Fifth, the jurisdiction of Section 69 under the
KCS Act before and after the amendment of the KCS
Act by Amendment Act (1 of 2000) remains intact.
52. Sixth, the jurisdiction of both the Acts, i.e., the
KCS Act and the ID Act is concurrent.
53. A fortiori, any service dispute arising between a
Co-operative Society’s Employee and his/her
Employer (Co-operative Society) is triable under
both the Acts and it is for the aggrieved person to
select one forum of his/her choice out of the two to
get his/her dispute settled subject to proving that
he/she is a workman, the dispute is an industrial
dispute and the Cooperative Society is an industry
as defined in the ID Act.
54. Seventh, notwithstanding the amendment
brought about in Section 69 of the KCS Act by
Amendment Act (1 of 2000), the jurisdiction of the
27
Labour Court under the ID Act is not excluded and
thus not barred.
55. And lastly, in the light of these findings, all
decided cases taking this view are held correctly
decided and, therefore, do not need any
reconsideration.
56. In our opinion, the fate of this appeal depends
upon the question as to what extent the ratio of
Dharappa’s case applies to the issues involved in
the case at hand.
57. It is, therefore, necessary to first examine the
facts and the ratio of Dharappa's case.
58. Dharappa was a daily wager working in the
Karnataka Milk Federation Unit Bijapur (hereinafter
referred to as “the Federation”), which is a
Co-operative Society registered under the Karnataka
CS Act. The Federation on 01.03.1980 terminated
Dharappa's services.
59. Dharappa felt aggrieved of his termination,
filed an application to the Labour Court, Hubli
28
under the ID Act. The application was later
transferred to the Labour Court, Bijapur. According
to Dharappa, his termination order was bad and
illegal inasmuch as the Federation failed to ensure
compliance of mandatory requirements of Section
25-F of the ID Act prior to passing his termination
order. According to Dharappa, he had continuously
worked for more than 240 days in one calendar
year, hence he was entitled to enjoy the protection
available to a workman under the ID Act before
terminating his services.
60. The respondent-Federation denied Dharappa's
claim. Parties adduced their evidence. The Labour
Court, by award dated 15.10.1996, allowed
Dharappa's application and set aside the
termination order. The Labour Court held that the
termination order was bad because Dharappa had
worked for more than 240 days continuously in one
calendar year and yet the Federation prior to his
termination did not pay him any retrenchment
29
compensation as provided in the ID Act. The Labour
Court, however, awarded 50% back wages to
Dharappa because it was noticed that he
approached the Labour Court almost after 10 years
from the date of his termination.
61. The Federation, felt aggrieved of the award of
the Labour Court, filed a writ petition in the
Karnataka High Court questioning therein the
legality and correctness of the award. During the
pendency of the writ petition, the Division Bench of
the same High Court in another case (Veerashaiva
Co-op. Bank Ltd. vs. Presiding Officer, Labour
Court, (2001) 3 Kar.LJ 519) held that since the
remedy and the procedure prescribed under the
Karnataka CS Act was comprehensive, the service
disputes arising between a Co-operative Society’s
Employee and his Employer (Co-operative Society)
has to be tried under the Karnataka CS Act and the
jurisdiction of the Labour Court under the ID Act to
decide such disputes is barred.
30
62. The Full Bench of the same High Court in
another case in Karnataka Sugar Workers
Federation vs. State of Karnataka, (AIR 2003 Kar
HCR 1802) later approved this view of the Division
Bench.
63. Relying upon the aforesaid view of the Division
Bench and the Full Bench, the learned Single Judge
allowed the Federation's writ petition and quashed
the award of the Labour Court. It was held that the
provisions of the ID Act are not applicable to a
service dispute raised by an Employee of a
Co-operative Society against his Employer. A liberty
was granted to Dharappa to take recourse to the
appropriate remedy under the Karnataka CS Act to
challenge his termination order.
64. Dharappa felt aggrieved and filed a writ appeal
before the Division Bench. The Appellate Court
placing reliance on the view of the Full Bench in
Karnataka Sugar Workers Federation’s case
(supra) dismissed the appeal. It was inter alia held
31
that the appropriate remedy of Dharappa lies in
invoking Section 70 of the Karnataka CS Act by
filing a dispute before the specified authority for its
adjudication. It is against this decision, Dharappa
felt aggrieved and filed appeal by special leave in
this Court.
65. Before this Court, Dharappa raised two
points, out of which we are concerned only with one
point, viz., whether jurisdiction of the Labour Court
under the ID Act for deciding the service dispute
arising between a Co-operative Society’s Employee
and his Employer is barred by virtue of Section 70
of the Karnataka CS Act and, if so, from which date.
66. It is this question, which was examined by this
Court extensively in the light of the relevant
provisions including Section 70 of the Karnataka CS
Act as it stood originally and later amended twice
coupled with a question as to what is the effect of
the grant of the Assent of the President given to the
second amendment of Section 70 made in the
32
Karnataka CS Act by Amendment Act (2/2000) and
the previous case law on the subject.
67. It was noticed that the Karnataka CS Act was
enacted by the State of Karnataka after obtaining
the Assent of the President on 11.08.1959. Section
70 of the Act as it originally stood deals with the
disputes arising between the parties named therein
and provides a forum for the adjudication of such
disputes, which also includes service disputes.
68. Section 70 was first amended by the State of
Karnataka by the Amendment Act (19/1976). It
received the Assent of the Governor on 07.03.1976.
The Amending Act came into force on 21.01.1976.
By this Amending Act, two clauses, namely, clauses
(d) and (e) were added to Section 70.
69. Section 70 was then amended second time by
the State in 1997 by Amendment Act (2 of 2000).
This Amending Act, however, received the Assent of
the President on 18.03.2000 and was thereafter
brought in force with effect from 20.06.2000. This
33
Amending Act specifically provided therein for the
first time "no Civil or Labour or Revenue Court or
Industrial Tribunal shall have jurisdiction to entertain
any suit or other proceedings in respect of any
dispute specified in Section 70".
70. The learned Judge Raveendran, J. speaking for
the two Judge Bench succinctly dealt with the issue
in question in Paras 13, 14, 16 and 17 and held as
under:
“13. The effect of the amendments to
Section 70 of the KCS Act, by Act 2 of
2000 is that if any dispute (including any
dispute relating to the terms of
employment, working conditions and
disciplinary action), arose between a
cooperative society and its employees or
past employees or heirs/legal
representatives of a deceased employee,
on and from 20-6-2000, such dispute had
to be referred to the Registrar for decision
and no civil court or Labour Court or
Industrial Tribunal would have jurisdiction
to entertain any suit or proceeding in
respect of such dispute.
14. Even prior to 20-6-2000, having regard
to the amendment to Section 70 of the
KCS Act by Act 19 of 1976 with effect
from 20-1-1976, any dispute between a
cooperative society and its employees or
past employees or heirs/legal
representatives of a deceased employee
including a dispute regarding the terms of
employment, working conditions and
34
disciplinary action taken by a cooperative
society, was deemed to be a dispute
touching the constitution, management,
or business of a cooperative society which
had to be referred to the Registrar for
adjudication. But prior to 20-6-2000, there
was no express exclusion of the
jurisdiction of the Labour Court and
Industrial Tribunal. As a result, if an
employee of a cooperative society
answered the definition of “workman” and
the dispute between the cooperative
society and its employee fell within the
definition of an “industrial dispute”, then
the employee had the choice of two
alternative forums — either to raise a
dispute before the Registrar under Section
70 of the KCS Act or seek a reference to
the Labour Court/Industrial Tribunal
under Section 10(1)(c) of the ID Act [or
approach the Labour Court by an
application under Section 10(4-A) of the ID
Act].
16. Though the Karnataka Cooperative
Societies Act, 1959 was reserved for the
assent of the President and received his
assent on 11-8-1959, the Amendment Act
19 of 1976 which added Clause (d) to
sub-section (2) of Section 70 (whereby a
dispute between a cooperative society and
its present or past employee(s) in regard to
any disciplinary action or working
conditions was deemed to be a dispute
touching the constitution, management,
or the business of a cooperative society),
was neither reserved for, nor received the
assent of the President. In the absence of
the assent of the President, Clause (d) of
Section 70(2) could not be called in aid to
contend that Section 70(1)(c) of the KCS
Act would prevail over the provisions of
the Industrial Disputes Act. Consequently,
even after the 1976 Amendment to the
KCS Act, the Labour Courts and Industrial
Tribunals functioning under the ID Act
35
continued to have jurisdiction in regard to
disputes between a society and its
workmen if the cooperative society
answered the definition of an “industry”
and the dispute was an “industrial
dispute”. But when sub-section (1) of
Section 70 of the KCS Act was further
amended by Act 2 of 2000 by specifically
excluding the jurisdiction of Labour Courts
and Industrial Tribunals with the
simultaneous addition of the words
“notwithstanding anything contrary
contained in the Industrial Disputes Act,
1947” in Clause (d) of Section 70(2) of the
KCS Act, the said Amendment Act (Act 2
of 2000) was reserved for the assent of the
President and received such assent on
18-3-2000. The amended provisions were
given effect from 20-6-2000. Therefore,
only with effect from 20-6-2000, was the
jurisdiction of Labour Courts and
Industrial Tribunals excluded in regard to
disputes between a cooperative society
and its employees (or past employees)
relating to terms of employment, service
conditions or disciplinary action. It follows
therefore that in the year 1996, the
Labour Court had the jurisdiction to make
an award in regard to such a dispute. The
High Court could not have interfered with
it on the ground that Section 70 of the
KCS Act was a bar to the jurisdiction of
the Labour Court to decide the dispute.
17. The 1976 Amendment to the KCS Act
did not bring about any inconsistency with
the provisions of the ID Act nor did it
purport to prevail over the provisions of
the ID Act. Its effect was merely to provide
an additional or alternative forum for
adjudication of the disputes between
cooperative societies and its employees,
relating to employment, working
conditions and disciplinary action. The
1976 Amendment Act, therefore, was
valid, even in the absence of the assent of
36
the President. On the other hand, the
2000 Amendment specifically excluded the
jurisdiction of Industrial Tribunals and
Labour Courts under the ID Act, and
intended to prevail over the provisions of
the ID Act in regard to adjudication of
disputes. The said Amendment required
the assent of the President and was, in
fact, reserved for the assent of the
President and obtained his assent. If the
1976 Amendment was to be read as
excluding the jurisdiction of the Industrial
Tribunals and Labour Courts, then it was
necessary to read the provisions of Section
70, as amended by the 1976 Act, as
prevailing over the provisions of the ID
Act. In which event, it would have required
the President’s assent, and in the absence
of such assent, the amendment to the
extent it purported to prevail over the
Central enactment, would have been void.
Therefore, the only way to read the 1976
Amendment is to read it in a literal and
normal manner, that is, as not excluding
the jurisdiction of the Industrial Tribunals
and Labour Courts but as merely
conferring a concurrent jurisdiction on the
Registrar under Section 70 of the KCS
Act.”
71. The learned Judge then in concluding Paras 24
and 25 held as under :
“24. The resultant position can be
summarised thus:
(a) Even though Clause (d) was added in
Section 70(2) with effect from 20-1-1976,
Section 70(1) did not exclude or take away
the jurisdiction of the Labour Courts and
Industrial Tribunals under the ID Act to
decide an industrial dispute between the
society and its employees. Consequently,
even after insertion of Clause (d) in
Section 70(2) with effect from 20-1-1976,
37
the Labour Courts and Industrial Tribunals
under the ID Act, continued to have
jurisdiction to decide disputes between
societies and their employees.
(b) The jurisdiction of Labour Courts and
Industrial Tribunals to decide the disputes
between cooperative societies and their
employees was taken away only when
sub-section (1) and sub-section (2)(d) of
Section 70 were amended by Act 2 of 2000
and the amendment received the assent of
the President on 18-3-2000 and was
brought into effect on 20-6-2000.
(c) The jurisdiction to decide any dispute
of the nature mentioned in Section 70(2)
(d) of the KCS Act, if it answered the
definition of industrial dispute, vested
thus:
(i) exclusively with Labour Courts and
Industrial Tribunals till 20-1-1976;
(ii) concurrently with Labour
Courts/Industrial Tribunals under the ID
Act and with Registrar under Section 70 of
the KCS Act between 20-1-1976 and
20-6-2000; and
(iii) exclusively with the Registrar under
Section 70 of the KCS Act with effect from
20-6-2000.
25. We therefore hold that the award of
the Labour Court was not without
jurisdiction. We, however, make it clear
that this decision shall not be applied to
reopen matters decided relying on
Veerashaiva Coop. Bank1 and Karnataka
Sugar Workers Federation2 which have
attained finality.”
38
72. In our considered opinion, the ratio of
Dharappa’s case is that firstly, Section 70 of the
Karnataka CS Act as it originally stood and
amended by first Amendment Act 19 of 1976 adding
therein two clauses (d) and (e) to Section 70,
whether one reads it independently or/and in
juxtaposition with other Sections would find that it
did not provide for express ouster or exclusion of
the jurisdiction of the Labour Court/Industrial
Tribunal under the ID Act.
73. In other words, it did not create any express
bar for the Labour Court/Industrial Tribunal from
deciding the service disputes arising between a
Cooperative Society’s Employee and his/her
Employer (Co-operative Society).
74. Second, any Co-operative Society’s Employee
satisfying the definition of the expression
"Workman", “Industrial Dispute" and the
Co-operative Society to be an “Industry” as defined
under the ID Act has the choice to select one forum
39
out of the two forums for filing a case in relation to
his service dispute, i.e., either to file a case under
the Karnataka CS Act or to seek an industrial
reference under Section 10 of the ID Act or to file an
application under Section 10(4-A) of the ID Act.(Para
14).
75. Third, both the Acts, namely, Karnataka CS
Act and the ID Act possessed and enjoyed
concurrent jurisdiction over such service disputes
till 20.06.2000.
76. Fourth, consequent upon the second
amendment made by the State of Karnataka in
Section 70 by Amendment Act 2/2000, which
received the Assent of the President on 18.03.2000
and was brought into force on 20.06.2000, the State
legislature, for the first time, provided an express
provision for exclusion of the jurisdiction of the Civil
Court or Labour Court or Industrial Tribunal to
decide any service dispute arising between a
40
Co-operative Society’s Employee and his/her
Employer (Co-operative Society).
77. The effect of introducing such amended
provision was that the provisions of the ID Act were
held no longer applicable for deciding such service
disputes. In other words, jurisdiction of the ID Act
then stood excluded from deciding such service
disputes from 20.06.2000 onwards. A fortiori, only
the authorities specified under the Karnataka CS
Act were held competent and possessed jurisdiction
to try such disputes from 20.06.2000 onwards.
78. Fifth, by way of rule of caution, the question of
such nature should be decided by the Courts
primarily keeping in view the language employed in
the concerned State Act.
79. Sixth, Article 254 of the Constitution is
attracted when there is a repugnancy between any
provision(s) of the State Act such as Karnataka CS
Act and the provision(s) of any existing law enacted
41
by the Parliament on the subject falling in
concurrent list such as the ID Act.
80. The inconsistency should be so irreconcilable
that it must come in direct head on collusion with
any provision of the Central Act in the field thereby
creating a situation that obeying one Act would
result in disobeying the other.
81. Seventh, if such a situation arises in any case,
the State law (Karnataka CS Act) which is reserved
for President's Assent and on receiving the
President's Assent, will prevail over the Central law
(ID Act) in that State by virtue of Article 254 (2) of
the Constitution.
82. Now coming to the facts of the case at hand,
when we examine the question in the light of the
ratio of Dharappa’s case, culled out above, on
comparison, we find substantial similarity between
the language of Section 69 of the KCS Act as it
originally stood and later amended by the
Amendment Act 1 of 2000 with that of the language
42
employed in Section 70 of the Karnataka CS Act as
it originally stood along with amended one by first
Amendment Act 19/ 1976.
83. In other words, we notice that the phraseology
and language of both unamended and amended
Section 69 of KCS Act and Section 70 of the
Karnataka CS Act as amended by first amendment
by Act 1/2000 are in pari materia with each other.
84. First, the KCS Act and the Karnataka CS Act
have received the Assent of the President at the time
of their respective enactment.
85. Second, the KCS Act-Amendment Act 1/2000
received the Assent of the Governor so also
Amendment Act 19/76 of Karnataka CS Act
received the Assent of the Governor.
86. Third, Section 69 and Section 70 start with a
non-obstante clause, viz., "Notwithstanding anything
contained in any law for the time being in force, if a
dispute arises ……………."
43
87. Fourth, Section 69 and Section 70 end with
the words "such dispute shall be referred to the
Registrar and no court shall have jurisdiction to
entertain any suit or other proceeding in respect of
such dispute".
88. Fifth, (the KCS Act and the Karnataka CS Act)
had no provision expressly providing for ouster of
the jurisdiction of Civil Court, Labour Court and the
Industrial Tribunal from deciding service disputes
alike the one introduced by Karnataka State for the
first time in Section 70 by the Amendment Act of 2
of 2000 with effect from 20.06.2000 with the Assent
of the President.
89. This, in our view, indicates that till
20.06.2000, there was similarity between the KCS
Act and Karnataka CS Act. However, after Section
70 was amended by Act No.2/2000 w.e.f.
20.06.2000 providing therein a specific clause
expressly excluding the jurisdiction of the Civil,
Labour and Revenue Court and Industrial Tribunal
44
to decide the service disputes, the scheme of the two
Acts no longer remained similar.
90. Similarly, we find that the identical wording
occurring in the beginning and the end of Section
69 and Section 70 was interpreted in Dharappa’s
case wherein it was held that such provisions
cannot be construed as providing an express
exclusion of the jurisdiction of other Courts
including that of the Labour Court and the
Industrial Tribunal under the ID Act. On the other
hand, it was held that the Karnataka CS Act
possesses concurrent jurisdiction for deciding the
services disputes upto 20.06.2000. (see para 14/16
of Dharappa)
91. This interpretation of Dharappa’s case, in our
view, would squarely apply to the provisions of the
KCS Act if Section 69 is also suitably amended by
the State of Kerala by making Section 69 at par with
amended Section 70 of Karnataka CS Act. As on
date, it is not so.
45
92. Though the KCS Act was amended by
Amendment Act 1 of 2000 (w.e.f. 02.01.2003) but it
did not bring about any kind of inconsistency or
repugnancy in the KCS Act qua any provision of the
ID Act, 1947. Had the KCS Act including the
amending one by Act 1/2000 brought about any
kind of inconsistency or repugnancy between the
provisions of the KCS Act and the ID Act such as
the one brought about by the second Amendment
Act (2/2000) in Section 70 of Karnataka CS Act
w.e.f. 20.06.2000 qua the ID Act and had such
amended provisions of the KCS Act received the
Assent of the President, the provisions of the KCS
Act too would have prevailed over the ID Act in the
State by virtue of Article 254 (2) of the Constitution.
93. Such is not the case here because though the
KCS Act received the Assent of the President at the
time of its enactment so also the Karnataka CS Act
received, this Court while interpreting Section 70 as
amended by Act No.19/1976 of the Karnataka CS
46
Act with the Assent of the Governor, has held in
Dharappa’s case that Section 70 did not create any
inconsistency or/and repugnancy with any
provisions of the ID Act and possessed concurrent
jurisdiction over such service dispute. This ratio of
Dharappa’s case would apply to Section 69 of the
KCS Act because we have held that Section 69 is in
pari materia with Section 70 of the Karnataka CS
Act.
94. That apart, the amending KCS Act (1 of 2000)
having received the Assent of the Governor did not
bring about any inconsistency or repugnancy with
the provisions of the ID Act. In any event, in the
absence of the Assent of the President to the
amending KCS Act 1/2000, even if any
inconsistency or repugnancy exists between the
provisions of the KCS Act and the ID Act, it is the ID
Act which will prevail over the KCS Act by virtue of
Article 254 (1) of the Constitution but not
vice-a-versa.
47
95. The law in relation to Article 254 of the
Constitution and how it is applied in a particular
case is fairly well settled by the series of decisions of
this Court. This Article is attracted in cases where
the law is enacted by the Parliament and the State
Legislature on the same subject, which falls in List
III - Concurrent list.
96. In such a situation arising in any case, if any
inconsistency or/and repugnancy is noticed
between the provisions of the Central and the State
Act, which has resulted in their direct head on
collusion with each other which made it impossible
to reconcile both the provisions to remain in
operation inasmuch as if one provision is obeyed,
the other would be disobeyed, the State Act, if it has
received the Assent of the President will prevail over
the Central Act in the concerned State by virtue of
Article 254 (2) of the Constitution.
97. A fortiori, in such a situation, if the State Act
has received the Assent of the Governor then the
48
Central Act would prevail over the State Act by
virtue of Article 254 (1) of the Constitution.
98. It is this principle, which was applied by this
Court in the case of Dharappa while comparing the
provisions of the Karnataka CS Act including its two
amendments with that of the provisions of the ID
Act.
99. This takes us to examine another question.
The majority Judges, as we find, proceeded to
examine the questions by attempting to compare
the language employed in the relevant Sections of
the two repealed KCS Acts of 1932 and 1951 with
that of the language of Section 69 of the KCS Act
1969 and noticing some departure in the language
employed in Section 69, came to a conclusion that
the language of Section 69 is comprehensive enough
to exclude the jurisdiction of the Labour Court
under the ID Act. The majority Judges also took
note of some more Sections of the KCS Act and
noticing some dis-similarity in the scheme of the
49
KCS Act and Karnataka CS Act held that Section 69
of the KCS Act overrides the provisions of the ID Act
since inception. We find ourselves unable to agree
with the approach of the majority.
100. In our view, when this Court in Dharappa’s
case has interpreted the language of Section 70 of
the Karnataka CS Act, the questions involved herein
should have been examined by comparing the
language employed in Section 69 of the KCS Act
with the language employed in Section 70 of the
Karnataka CS Act rather than to compare with the
repealed provisions.
101. In other words, once on comparing the
language of Section 69 and that of Section 70 as
amended by the first amendment, a conclusion is
reached that both Sections are akin to each other
till 20.06.2000, a fortiori, the law laid down in
Dharappa’s case insofar as it interprets Section 70
as it originally stood and amended by Amendment
Act 19/1976 would apply to Section 69 of the KCS
50
Act. On the other hand, the ratio will not apply after
20.06.2000 because from that date, there was a
change in the language of Section 70 which
provided a clause to exclude the Jurisdiction of
other Courts in express terms by Amendment Act of
2/2000.
102. In the light of foregoing discussion, we are of
the considered opinion that the view of majority
Judges cannot be upheld whereas the view of the
minority Judges deserves to be upheld and is
accordingly upheld.
103. We accordingly hold that the KCS Act and the
ID Act both possess and enjoy the concurrent
jurisdiction to decide any service dispute arising
between the Co-operative Society’s Employee and
his/her Employer (Co-operative Society).
104. We also hold that it is the choice of the
Employee concerned to choose any one forum out of
the two forums available to him/her under the two
Acts (the KCS Act and the I.D. Act) to get his/her
51
service dispute decided. It is, however, subject to
satisfying the test laid down under the ID Act that
the employee concerned is a “workman”, the dispute
raised by him/her is an “industrial dispute” and the
Co-operative Society (Employer) is an “Industry” as
defined under the ID Act.
105. In the light of the aforesaid finding, all those
cases, which have taken contrary view, stand
overruled.
106. As a result of our conclusion, in our view, the
Labour Court in this case was competent to decide
the service dispute raised by the Employee
(appellant herein) under the ID Act. The case is
accordingly remanded to the writ Court to decide
the respondent’s writ petition for examining the
legality and correctness of the award of the Labour
Court on merits in accordance with law.
107. In view of foregoing discussion, the appeal
succeeds and is, accordingly, allowed. The
impugned judgment is set aside.
52

………...................................J.
[R.K. AGRAWAL]
 ...……..................................J.
 [ABHAY MANOHAR SAPRE]
New Delhi;
January 12, 2018 

admission process for MBBS/BDS and PG courses pursuant to a circular dated 14.11.1995 of the State Government.= Due to the MRC’s choice, one reserved category seat is occupied, and one seat among the choices available to general category candidates remains unoccupied. Consequently, one lesser-ranked reserved category candidate who had choices among the reserved category is affected as he does not get any choice anymore. To remedy the situation i.e. to provide the affected candidate a remedy, the 50th seat which would have been allotted to X – MRC, had he not opted for a seat meant for the reserved category to which he belongs, shall now be filled up by that candidate in the reserved category list who stands to lose out by the choice of the MRC. This leaves the percentage of reservation at 50% undisturbed. We reiterate that, 50% reservation rule should not be breached under any circumstance. - Tripurari Sharan and Anr. ....Appellants Versus Ranjit Kumar Yadav & Ors. ....Respondents

1
 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. _157 OF 2018
(Arising out of SLP (Civil) No. 7756 of 2017)
Tripurari Sharan and Anr. ....Appellants

Versus
Ranjit Kumar Yadav & Ors. ....Respondents
With
CIVIL APPEAL NO. 158 OF 2018
(Arising out of SLP(C) No.21019 of 2017)
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
Leave granted.
2. Judgment dated 28.10.2016 passed by the High Court of
Judicature at Patna in MJC No. 3680 of 2016 in CWJC No.16673 of
2016 and connected matters is called in question in these appeals. By
the said judgment, the full Bench of the High Court answered the
2
reference made to it by the Division Bench of the Patna High Court in
the matter of validity or otherwise of admission process for MBBS/BDS
and PG courses pursuant to a circular dated 14.11.1995 of the State
Government.
3. Before proceeding further it would be pertinent to note the
relevant circular i.e. circular no. 226(24) dated 14.11.1995 which reads
as under:
“According to this new system, applicable with
immediate effect, candidates of reserved classes, who on
the basis of merit, are entitled to get admission against
50% seats of the general category, having transferred
them in the list of their respective reserved class, they
will be facilitated with admission in college and subject
of their choice on the basis of their merit in at
(respective) list. Thus, after transfer from one to another
list, those candidates of that (respective) reserved class,
who found place in the bottom of the separate list,
prepared for that (respective) class, naturally will come
down and can come out of the seats available in the
ratio of the percentage prescribe for that (respective)
reserved class. To avoid this situation and in any case
to avoid the adverse impact on the number of seats
prescribed for reserved class after transferring
candidates of that class only into that list and so that
candidates in the bottom of the list also could not be
deprived of admission and so that candidates of reserves
class, selected on the basis of merit could not be
deprived of being consolidated in general seats. To
ensure it, this system will be applicable that after above
stated transfer, candidates at the bottom of list of their
respective reserved class, though being at the bottom of
the merit list of this list, shall be absorbed against 50%
3
seats, available for general category and they shall be
allotted colleges and subject available for the general
seats on the basis of choice in the order of merit in that
list. Thus, the list which will be prepared against 50%
seats, available for general category, candidates
transferred by above stated method from the list of
reserved class will be absorbed in that list only and they
will also be facilitated admission.”
As per the aforementioned circular, a Meritorious Reserved
Candidate (MRC) is treated as general merit candidate and is allotted a
seat in the general merit category; such MRC may instead choose to
take up a seat from amongst the seats earmarked for that particular
reserved category to which he belongs to gain admission in the college of
his preference; on doing so, the choice of seat in the general category left
by the MRC will go to a candidate of the reserved category.
4. It was contended before the Patna High Court by the
appellants that the seat which remained unfilled because of
migration/shifting of a MRC to the reserved category should be filled up
by the candidates from the general category list inasmuch as the MRC
virtually shifts himself to the reserved category. Per contra it was
contended by the contesting respondents that such seat should
continue to be filled up by the ousted candidates at the bottom of the
reserved category list, in view of the fact that the MRC continues to be a
4
general category candidate. By the impugned judgment, the Patna High
Court answered the reference in favour of the respondents as under:
“15. In view of the discussions above and what has
been held by Supreme Court in cases of Ramesh Ram
(supra) and Ritesh R. Sah (supra) we arrive at the
following conclusion(s) :-
(i) There is an obvious distinction between qualifying
through a common entrance test for securing admission
to medical courses in various institutions vis-a-vis a
common competitive examination held for filling up
vacancies in various services.
(ii) This distinction arises because all candidates receive, in
a case of common entrance test held for securing
admission in medical institutions, the same benefits of
securing admission in one of the medical institutions, in
a particular course, whereas in the case common
selection process adopted for filling up vacancies in
various services, there are variations, which accrue to
the successful candidates, because the services may
differ in terms of status and conditions of service
including pay scale, promotional avenues, etc.
Consequence of migration of an MRC to the concerned
reserved category shall be, therefore, different in case of
the admission to various medical institutions vis-a-vis
selection to various posts.
(iii) In case of admission to medical institutions, an MRC
can have in, for the purpose of allotment of institutions,
of his choice, the option of taking admission in a college,
where a seat in his category is reserved. Though
admitted against a reserved seat, for the purpose of
computation of percentage of reservation, he will be
deemed to have admitted as an open category candidate,
rather he remains an MRC. He cannot be treated to
5
have occupied a seat reserved for the category of
reservation he belongs to. Resultantly, this movement
will not lead to ouster of the reserved candidate at the
bottom on the list of that reserved category. While
his/her selection as reserved category candidate shall
remain intact, he/she will have to adjusted against
remaining seats, because of movement of an MRC
against reserved seats, only for the purpose of allotment
of seats.
(iv) In the case of filling up of posts based on common
competitive selection process in different services,
situation will be entirely different, when an MRC opts to
move to the reserved category, which he belongs to, for
getting a service/post of his choice. In such a situation,
the candidate, at the bottom of list of the concerned
category, will have to move out and the slot, in the
general merit list, will stand vacated, because of
migration of the MRC will have to be filled up from
general merit list. Otherwise, if the open seats are
allowed to be filled up by candidates of reserved
categories, it will result into extending the benefit of
reservation beyond fifty percent, which is
constitutionally impermissible.
16. The reference is answered accordingly.”
While deciding the reference as mentioned supra, the full
Bench of the Patna High Court has distinguished between two sets of
cases viz. (a) case of securing admission to medical courses in various
institutions through a common entrance test; and (b) case of filling up of
vacancies in various civil services through common competitive
examination.
6
5. In the matter on hand, we are concerned with securing
admission to medical courses through a common entrance test and the
procedure to be followed in case of a MRC and allotment of seat in
college.
6. It was submitted by Shri Shekhar Naphade and Shri
Subramonium Prasad, learned Senior Counsel, on behalf of the
appellants, that the reservation cap in admissions to medical colleges
cannot exceed 50% in any case. They argued that a MRC migrates to
the reserved category when he chooses a seat earmarked for the
reserved category. Resultantly, the seat vacated by MRC being a general
category seat must necessarily be filled up by general category
candidates.
For the respondents, Shri Prashant Bhushan, learned
Counsel, supporting the decision of the Patna High Court argued that
the MRC continues to be part of the general category even after opting
for a seat in the reserved category. He contended that the reserved
category candidate who is affected by the choice of the MRC must be
given a choice of seats in the general category. Ms. Meenakshi Arora,
learned Senior Counsel, submitted that by the process adopted, the 50%
reservation is not breached.
7
7. Often, in a competitive examination held for the purpose of
admission in technical and medical institutions etc. some candidates
belonging to reserved category/categories, qualify for the higher ranking
on the basis of their own merit and depending on their performance in
the common entrance test, are placed in the general merit list. Such
class of candidates belonging to reserved categories who qualify on their
own merit, to be placed in general merit list, are described, for the
purpose of convenience, as Meritorious Reserved Candidate (MRC). It is
by now well settled that a MRC who goes on to occupy a general
category seat is not counted against the quota reserved for a reserved
category candidates, but is treated as an open competition candidate or
general merit candidate. This Court in the case of Indra Sawnhey v.
Union of India, 1992 Supp (3) SCC 217 has observed thus:
“In this connection it is well to remember that the
reservations under Article 16 (4) do not operate like a
communal reservation. It may well happen that some
members belonging to, say, Scheduled Castes get selected
in the open competition field on the basis of their own
merit; they will not be counted against the quota reserved
for Scheduled Castes; they will be treated as open
competition candidates” (emphasis
supplied)
8
Even in service matters, the same principle is made applicable. The
aforementioned principle of Indra Sawnhey (supra) is followed for
admissions to seats in medical colleges, and the same was followed in
the case of R.K. Sabharwal v. State of Punjab, (1995) 2 SCC 745.
However, the issue before us is more nuanced – whether MRC can opt
for a seat earmarked for reserved category? “If answer is yes” then since
MRC exercises the option of admission to the seats in different colleges
earmarked for reserved category candidates, should a less meritorious
reserved category candidate who is affected by such process be given
admission to the college left over by MRC consequently?
This would be better understood by a simplified example. Let
it be assumed that there are 100 seats available through one common
entrance examination to PG courses in various medical colleges across
the country. Of these, 50 are general category seats and the remaining
50 are reserved category seats. X, a reserved category candidate, is
assigned rank number 50 on account of his performance in the entrance
examination. Thus he is just above the cut-off for reserved category
candidates, and has got an open merit rank. Hence, X is a MRC;
however, X being in general category is not willing to accept the seat
available for general category at the time of his counselling. He wants
9
admission in another college of his preference which is incidentally
reserved for reserved category candidates, and a seat in the same is
available in the reserved category. Consequently, X chooses a seat
available in the college meant for reserved category candidate based on
his merit among the reserved category candidates. As he does so, one
seat in the general category list of 50 candidates remains unoccupied. In
that context, two questions arise for consideration:
i. Whether X – MRC can opt for a seat earmarked for reserved
category?
ii. If answer is yes; what happens to the 50th seat which was to be
allotted to X – MRC (i.e. 50th general merit candidate) had he opted
for a seat meant for the reserved category to which he belongs?
8. This court has repeatedly including the judgment in the case
of Indra Sawhney (supra), has concluded that the aggregate reservation
should not exceed 50%. Therefore, even when a MRC opts for a seat
reserved for reserved category candidates, caution has to be exercised to
maintain the reservation to 50%. So also it is not open for the
authorities to deny a MRC a seat in the college of his preference based
on his merit, if such seat is available at the relevant point of time and
the same is reserved for candidates of the reserved category to which the
10
MRC belongs. This is because there may be instances where a MRC
may not get a seat in the institution of his choice on the basis of his own
merit in the general merit. Under such circumstances, he may opt to be
treated notionally as a candidate belonging to the reserved category only
for the purpose of getting a seat in the college reserved for reserved
category students. If such MRC is to be placed in the reserved merit list
of his category, he would be ranking high and may get better choice of
institution or course. A MRC cannot be placed in a disadvantageous
position by not permitting him to be treated as reserved candidate, as
that would amount to making him suffer for his better performance in
the competitive examination.
In the case of Shri Ritesh R. Sah v. Dr. Y.L. Yamul, (1996)
3 SCC 253, this Court has had an occasion to deal with both the above
questions. This Court held that a MRC who has opted for a seat in the
college reserved for reserved category will not migrate/shift to reserved
category but should be treated as part of the general category only.
However, only for the purpose of getting better choice of seat in the
college, he may opt to take a seat in the college reserved for the reserved
category. This Court observed thus:
11
“17…In view of the legal position enunciated by this
Court in the aforesaid cases the conclusion is irresistible
that a student who is entitled to be admitted on the
basis of merit though belonging to a reserved category
cannot be considered to be admitted against seats
reserved for reserved category. But at the same time the
provisions should be so made that it will not work out to
the disadvantage of such candidate and he may not be
placed at a more disadvantageous position than the
other less meritorious reserved category candidates. The
aforesaid objective can be achieved if after finding out
the candidates from amongst the reserved category who
would otherwise come in the open merit list and then
asking their option for admission into the different
colleges which have been kept reserved for reserved
category and thereafter the cases of less meritorious
reserved category candidates should be considered and
they will be allotted seats in whichever colleges the seats
should be available. In other words, while a reserved
category candidate entitled to admission on the basis of
his merit will have the option of taking admission to the
colleges where a specified number of seats have been
kept reserved for reserved category but while computing
the percentage of reservation he will be deemed to have
been admitted as a open category candidate and not as
a reserved category candidate.”
Right from the year 1996, the law is well settled that the provisions
should be so made that they will not work out to the disadvantage of a
MRC and he would not be placed at a more disadvantageous position
than the less meritorious reserved category candidates. Aforementioned
objective can be achieved if, after finding out the candidates from
amongst the reserved category who would otherwise come in the open
12
merit list and then asking their option for admission into the different
colleges which have been kept reserved for reserved category, the cases
of less meritorious reserved category candidates are considered.
In other words, the reserved category candidate is entitled to
admission on the basis of his merit, and he will have the option of
taking admission to the colleges where a specified number of seats are
kept reserved for the reserved category. However, while computing the
percentage of reservation, he will be deemed to have been admitted as
an open category candidate and not as a reserved category candidate.
9. Shri Shekhar Naphade and Shri Subramonium Prasad,
learned Senior Counsel on behalf of the appellants, relying upon the
Constitution Bench judgment in the case of Union of India v. Ramesh
Ram and Others, (2010) 7 SCC 234, contended that a seat left over in
the general category by a MRC because of his option of a seat in the
reserved category, should be filled up by a general merit candidate and
not by a reserved category candidate. They relied upon paragraph 39 of
the said judgment, which reads as follows:
“39. A significant aspect which needs to be discussed is
that the aggregate reservation should not exceed 50% of
all the available vacancies, in accordance with the
decision of this Court in Indra Sawhney v. Union of
13
India, (1992) Supp 3 SCC 217. If the MRC candidates
are adjusted against the Reserved Category vacancies
with respect to their higher preferences and the seats
vacated by them in the General Category are further
allotted to other Reserved Category candidates, the
aggregate reservation could possibly exceed 50 % of all
of the available posts.”
Before commenting on the judgment of the Constitution
Bench in Ramesh Ram (supra), it would be beneficial if the facts and
contexts referred thereto are looked into.
In the said matter, the Constitutional validity of Sub-Rules (2)
to (5) of Rule 16 of the Civil Services Examination Rules, for the civil
services examinations from 2005 to 2007, was involved. Rule 16(2) was
as follows,
“16(2) While making service allocation, the candidates
belonging to the Scheduled Castes, the Scheduled Tribes
or Other Backward Classes recommended against
unreserved vacancies may be adjusted against reserved
vacancies by the Govt. if by this process they get a
service of higher choice in the order of their preference.”
This Court, after examining the rival contentions on record, held that a
MRC opting for a reserved category seat should be treated as a reserved
category candidate, which means that he is deemed to have
migrated/shifted from the general category to the reserved category to
14
which he belongs once and for all, and that the vacant general category
seat left by a MRC should be filled by a general category candidate. It
arrived at the following findings:
“50. We sum up our answers-:
i) MRC candidates who avail the benefit of Rule 16 (2)
and adjusted in the reserved category should be counted
as part of the reserved pool for the purpose of
computing the aggregate reservation quotas. The seats
vacated by MRC candidates in the General Pool will be
offered to General category candidates.
ii) By operation of Rule 16 (2), the reserved status of an
MRC candidate is protected so that his/ her better
performance does not deny him of the chance to be
allotted to a more preferred service.
iii) The amended Rule 16 (2) only seeks to recognize the
inter se merit between two classes of candidates i.e. a)
meritorious reserved category candidates b) relatively
lower ranked reserved category candidates, for the
purpose of allocation to the various Civil Services with
due regard for the preferences indicated by them.
iv) The reserved category candidates "belonging to OBC,
SC/ ST categories" who are selected on merit and placed
in the list of General/Unreserved category candidates
can choose to migrate to the respective reserved
category at the time of allocation of services. Such
migration as envisaged by Rule 16 (2) is not inconsistent
with Rule 16 (1) or Articles 14, 16 (4) and 335 of the
Constitution.”
In Ramesh Ram (supra), this Court has seemingly and
intrinsically arrived at a diametrically opposite decision from Ritesh R.
15
Sah (supra). Indeed, the aggregate reservation should not exceed 50%
of the available vacancies. While we are undoubtedly bound by Ramesh
Ram (supra), the very judgment justified why it is so different from
Ritesh R. Sah (supra). It categorically held that there is a distinction
between selection and admission of PG candidates as in Ritesh R. Sah
(supra), and selection and appointment of UPSC candidates as in
Ramesh Ram (supra). While in postgraduate admissions, the results
will grant all the candidates the same benefit irrespective of rank (i.e.,
admission in medical colleges), the results in UPSC selections give
varying benefits to varying rank-holders, as the allocation of services is
based on rank. This Court thus held that in case of UPSC selections, the
general category seat vacated by a MRC to occupy a reserved category
seat, must be filled up by candidates from the general category. It also
held that such MRC should be counted in the reserved category (and not
in the general category, as Ritesh R.Sah (supra) did) in order to prevent
the reservation cap from exceeding 50%. It would be beneficial to look
into Paragraphs 31, 32, 66 and 67 of Ramesh Ram (supra) for the
purpose of distinguishing the said matter from the matter on hand and
they read as follows:
16
“31. The respondents have also placed strong reliance
on this Court's decision in Ritesh R. Sah v.
Dr.Y.L.Yamul (1996) 3 SCC 253). The question in that
case was whether a Reserved Category candidate who is
entitled to be selected for admission in open competition
on the basis of his/her own merit should be counted
against the quota meant for the Reserved Category or
should he be treated as a general candidate. The Court
reached the conclusion that when a candidate is
admitted to an educational institution on his own merit,
then such admission is not to be counted against the
quota reserved for Scheduled Castes or any other
Reserved Category. However, it is pertinent to note that
this decision was given in the context of admissions to
medical colleges …”
“32. There is an obvious distinction between qualifying
through an entrance test for securing admission in a
medical college and qualifying in the UPSC
examinations since the latter examination is conducted
for filling up vacancies in the various civil services. In
the former case, all the successful candidates receive
the same benefit of securing admission in an
educational institution. However, in the latter case there
are variations in the benefits that accrue to successful
candidates because they are also competing amongst
themselves to secure the service of their choice. For
example, most candidates opt for at least one of the first
three services [i.e. Indian Administrative Service (IAS),
Indian Foreign Service (IFS) and Indian Police Service
(IPS)] when they are asked for preferences. A majority of
the candidates prefer IAS as the first option. In this
respect, a Reserved Category candidate who has
qualified as part of the general list should not be
disadvantaged by being assigned to a lower service
against the vacancies in the General Category especially
because if he had availed the benefit of his Reserved
Category status, he would have got a service of a higher
preference. With the obvious intention of preventing
such an anomaly, Rule 16 (2) provides that an MRC
17
candidate is at liberty to choose between the general
quota or the respective Reserved Category quota.”
“66. The decision in Anurag Patel in turn referred to the
earlier decision in Ritesh R. Sah v. Dr. Y.L. Yamul.
However, we have already distinguished the judgment in
Ritesh R. Sah. That decision was given in relation to
reservation for admission to post graduate medical
courses and the same cannot be readily applied in the
present circumstances where we are dealing with the
examinations conducted by UPSC. The ultimate aim of
civil services aspirants is to qualify for the most coveted
services and each of the services have quotas for
reserved classes, the benefits of which are availed by
MRC candidates for preferred service. As highlighted
earlier, the benefit accrued by different candidates who
secure admission in a particular educational institution
is of a homogeneous nature. However, the benefits
accruing from successfully qualifying in UPSC
examination are of a varying nature since some services
are coveted more than others.
67. The order of CAT is valid to the extent that it relied
on the ratio propounded by this Court in Anurag Patel v.
U.P. Public Service Commission. Even though that
decision had in turn relied on the verdict of this Court in
Ritesh R. Sah v. Dr. T.L. Yamul, the latter case is
distinguishable from the present case with respect to
the facts in issue. However, we cannot approve of the
conclusions arrived at in the Central Administrative
Tribunal order as it failed to take note of the unique
characteristics of UPSC examinations.”
(Emphasis supplied)
Hence it is amply clear that, the Constitution Bench makes a
distinction between two types of selections, i.e., selection to medical
colleges through a common entrance test, and selection to posts in
services through the UPSC examination.
18
It is also pertinent to note that the Constitution Bench has
virtually but impliedly approved Ritesh R. Sah (supra) insofar as the
procedure to be adopted in cases of admissions to medical colleges
through a common competitive examination is concerned. In view of the
above, the principles laid down in Ramesh Ram (supra) may not be
applicable to the facts of this case, inasmuch as this is a case pertaining
to admission in medical colleges and whereas Ramesh Ram (supra)
pertains to selections to the posts for services through the UPSC
examination.
This Court, in the case of Alok Kumar Pandit v. State of
Assam & Ors. 2012 (13) SCC 516, has reiterated that the dictum laid
down in Ramesh Ram (supra) is applicable only to admission to various
services in the UPSC.
10. Ritesh R. Sah (supra) was subsequently followed in Samta
Aandolan Samiti v. Union of India, (2014) 14 SCC 745 wherein this
Court observed thus:
“22. No doubt, while doing so, the Court in Ramesh Ram
case was of the opinion that such meritorious reserved
candidates (MRC) who avail the benefit of Rule 16(2) of
the Civil Services Examination Rules (which permitted
such inter-se transfer) and are eventually adjustment in
the reserved category, they should be counted part of
reserved category for the purpose of computing
19
aggregate reservation quota. However, it was
categorically stated that this proposition applies when
there is an appointment to a service under the State and
categorically excluded the cases of admission in
educational institutions. In so far as admission in
educational institutions is concerned, such a MRC was
to continue to be treated as belonging to general
category, which position he attained because of his
initial merit. The Court noted that this was so held in
Ritesh R. Sah v. Dr. Y.L. Yamul (1996) 3 SCC 253.”
… … …
“24. Since, we are concerned with the admission to
medical course, aforesaid judgment squarely applies to
the present case. Thus we find that neither upper limit
of 50% reservation is breached, nor any rights of the
Petitioners are violative or the action of the Respondents
have been to their prejudice in any manner. Thus, we do
not find any merit in the present petition, which is
accordingly dismissed. No costs.”
(Emphasis supplied).
11. Shri Naphade and Shri Prasad also sought to rely upon the
decision of a Coordinate bench of this Court in State of Bihar v. M.
Neethi Chandra, (1996) 6 SCC 36, wherein this Court observed as
follows:
“10. Let us take a situation in which in a particular
reserved category there are x number of seats but the
candidates qualifying according to criteria fixed for that
category are X+5 with the best among them also
qualifying on merit as general candidates. According to
the arrangement made by circular No. 20, the first
candidate gets a choice along with the general category
candidate but being not high enough in the list, gets a
20
choice lesser than what he could secure in the reserved
category to which he was entitled. The x number of
seats could then be filled up with the four qualifying
candidate being denied admission for want of seats. This
would have been harsh for the best candidate as well as
violative of Articles 14 and 16 of the Constitution. On
the other hand, if the direction of the High Court is
followed, the first x number of candidates get seats
according to merit against the reserved seats but the
remaining 5 will also have to be 'adjusted' against the
open seats of regular candidates. These 5 will be those
who are not qualified according to the general merit
criteria and so will necessarily displace 5 general
candidates who would be entitled to seats on merit.”
… … …
“12. In a particular year, the number of such candidates
may be much larger and thus the method evolved by the
High Court may create much hardship. The method will
also not be in tune with the principles of equality. Hence
the method evolved by the High Court will have to be
struck down.
13. At the same time, as pointed out above, all is not
well with the Government circular No. 20 as it operates
against the very candidates for whom the protective
discrimination is devised. The intention of the circular
No. 20 is to give full benefit of reservation to the
candidates of the reserved categories. However, to the
extent the meritorious among them are denied the
choice college and subject which they could secure
under the rule of reservation, the circular cannot be
sustained. The circular, therefore, can be given effect
only if the reserved category candidate qualifying on
merit with general candidates consents to being
considered as a general candidate on merit-cum-choice
basis for allotment of college/institution and subject.”
(emphasis supplied)
21
M. Neethi Chandra (supra) was upheld by a three-Judge
bench of this Court in Dr. Anil Kumar v. State of Bihar, (1998) 9 SCC
405, but to the extent that it held that a MRC should not be forced to
choose seat from the general category. However, it needs to be
mentioned that M. Neethi Chandra (supra) may not be applicable to the
facts of this case. In the case of M. Neethi Chandra (supra), this Court
was concerned with a different circular altogether, i.e., Circular No.
11/K1 -1022/91-K20 (“Circular No. 20”), issued by the Government of
Bihar, Department of Personnel and Administrative Reforms on
07.02.1992 on the subject of “provision for reservation for nominating
(admission) of Scheduled Caste/Tribes/Backward class/Extremely
Backward Class/Female into the Professional Training Institutes.” That
circular was challenged on the basis that MRCs were not allowed to
choose the seats kept reserved for the reserved category. Paragraph 6 of
that circular reads as follows:
“6. As there is provision in direct appointment to the
effect that the candidates belonging to reserved classes,
who are selected on the basis of merit, would not be
adjusted against reserved seats, similarly maintaining
the same arrangement here also the candidates selected
on the basis of merit for admission into professional
training institutes would not be adjusted against the
reserved quota for the candidates of reserved classes.”
22
The judgment of the High Court that was set aside by this
Court in M. Neethi Chandra (supra) had devised a completely different
way of conducting PG admissions, which was not at all akin to the
present case. The High Court in the said matter has sought to fill up
reserved category posts first and adjust any reserved category
candidates not allotted a seat in the general category. This Court in M.
Neethi Chandra (supra) summarized the method of allotment of seats
adopted by the High Court thus,
“To remove the anomalies, the High Court devised a
method of allotment of seats by which the reserved seats
are offered first (i.e. before the general seats are filled) to
the candidates of the reserved category on merit, and
after all the reserved seats are so filled up, all other
qualifying candidates of the reserved category are
"adjusted" against open seats in the general category
along with the general merit candidates and offered
seats on merit-cum- choice basis (see para 11 of the
judgment).”
12. In the matter on hand, it is not the case that any other
candidate of the reserved category, other than the candidate taking up
the MRC’s general category place in choosing general category seat, will
be adjusted. Moreover this issue is not under challenge in the present
case, as both sides are admittedly not contesting the right of a MRC to
23
choose a seat earmarked for the reserved category. On the other hand,
it is fairly submitted by Shri Naphade and Shri Prasad that a MRC has
got a right to choose a seat earmarked for reserved category/categories.
However, they are only worried that the aggregate reservation should not
exceed 50%.
It follows from the cases cited above that the 50% reservation
rule should not be breached under any circumstances. As mentioned
supra, a MRC in medical admissions has more marks than the last
general merit candidate, hence he shall be treated as a general category
candidate. Only a choice of college seats in the reserved category is open
to him. In this manner, the number of seats in each category remains
constant and the upper limit of 50% reservation is not breached.
13. It is clear from Ritesh R. Sah (supra), that in the case of
admission to postgraduate medical institutions, a MRC who chooses to
avail of the option of admission to a college with seats kept for the
reserved category is deemed to have been admitted as an open category
candidate. He continues to be open category candidate. There is no
migration into the reserved category even if a MRC opts for a seat
earmarked for reserved category candidates. The lowest-ranking
24
candidates who qualified in the reserved category, cannot hence have
option for colleges/seats in reserved category on account of the MRC’s
choice, may be adjusted against the choices of college seats then
available in the general category left over by MRC. However such
reserved category candidates continue in reserved category, except for
such option. Thus, by treating a MRC as a general category candidate,
the number of reserved seats remains the same, and reservations do not
exceed 50%. This is also consistent with the principles of equity. In view
of the above, we could not find any reason to disagree with the
conclusions reached by the full Bench of the High Court.
14. In light of the cases discussed hereinabove, both questions
are answered as follows:
i) A MRC can opt for a seat earmarked for the reserved category,
so as to not disadvantage him against less meritorious reserved
category candidates. Such MRC shall be treated as part of the
general category only.
ii) Due to the MRC’s choice, one reserved category seat is
occupied, and one seat among the choices available to general
category candidates remains unoccupied. Consequently, one
25
lesser-ranked reserved category candidate who had choices
among the reserved category is affected as he does not get any
choice anymore.
To remedy the situation i.e. to provide the affected candidate a
remedy, the 50th seat which would have been allotted to X –
MRC, had he not opted for a seat meant for the reserved
category to which he belongs, shall now be filled up by that
candidate in the reserved category list who stands to lose out by
the choice of the MRC.
This leaves the percentage of reservation at 50% undisturbed.
15. We reiterate that, 50% reservation rule should not be
breached under any circumstance.
16. The High Court has succinctly dealt with the issue as well as
the case law on the point. It has rightly held that Ritesh R. Sah (supra)
governs admissions in medical institutions. We see no reason to
interfere.
26
17. Appeals are accordingly dismissed. No order as to costs.
.................................................J.
(ARUN MISHRA)
.................................................J.
(MOHAN M. SHANTANAGOUDAR)
New Delhi;
January 11, 2018

I.C. Sharma …. Appellant(s) Versus The Oriental Insurance Co. Ltd. … Respondent(s) = a householder insurance policy - a burglary took place = The claim should not have been rejected only on the ground that invoices were not produced. = It is not the case of the Insurance Company that these items were not stolen. The claim should not have been rejected only on the ground that invoices were not produced. The affidavit of the appellant clearly indicates both the nature of the items lost and the value thereof. This is supported by corroborative evidence of the list of items given to the police. Once the insurance company itself changed its policy from ‘as per list policies’ to ‘policies for consolidated amounts’, then an insured is not expected to give the item-wise details along with the valuation. We may also add that if the insurance company desires that item-wise valuation should be given for items over and above a certain value then it is the duty of the insurance company to advise the insured at the time of issuing the first policy of insurance and at the time of each renewal. The 12 insurance company must at the time of accepting the premium advise the policy holder properly. The insurance company cannot accept the premium without asking for any details and later deny its liability on the ground that such details were not given.

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3167 OF 2017
I.C. Sharma …. Appellant(s)
Versus
The Oriental Insurance Co. Ltd. … Respondent(s)
J U D G M E N T
Deepak Gupta J.
1. This appeal filed by the complainant/consumer is directed
against the order dated 29.09.2014 passed by the National
Consumer Disputes Redressal Commission (for short ‘the National
Commission’), New Delhi, disposing of the revision petition filed by
the parties and also against the order dated 22.02.2016 disposing
of the review petition filed by the appellant.
2. Briefly stated the facts of the case are that the appellant had
first purchased a householder insurance policy from the Oriental
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Insurance Company (‘the Insurance Company’ for short) on
23.12.2000. This policy was renewed till 22.12.2005. As per this
policy the coverage of articles/items in the house of the appellant
was “as per list”. It is not disputed that thereafter the Insurance
Company discontinued “as per list” policies and instead started
issuing policies for consolidated amounts. The original policy had
expired on 22.12.2005 and fresh policy as per new scheme was
taken out on 19.01.2006 and this was renewed from time to time.
The last renewal was from 19.01.2007 to 18.01.2008.
3. The appellant had gone to the United Kingdom. Some time,
between 27.01.2008 to 30.01.2008, a burglary took place inside the
premises of the appellant, and he was informed about the same by
a neighbor on 31.01.2008. The appellant requested his nephew to
inform the Insurance Company and an FIR was also registered with
the Mehrauli Police Station in South Delhi. The Insurance
Company was also informed about the burglary on 31.01.2008 or
on the next day. The police could not trace out the crime.
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4. The Insurance Company first offered a sum of Rs. 3,500/- to
the appellant sometime in November, 2008 which he refused to
accept. He, thereafter, met certain higher officials of the Insurance
Company and an amount of Rs.29,920/- was offered to him. Being
dissatisfied, the appellant filed a claim before the District Consumer
Disputes Redressal Forum (for short ‘the District Forum’), which
was disposed of by the District Forum on the ground that the
articles mentioned therein were not mentioned in the list.
Thereafter, the appellant filed an appeal before the State Consumer
Disputes Redressal Commission (for short ‘the State Commission’)
which was allowed on 15.01.2014 and he was awarded a sum of
Rs.4,03,150/-.
5. Revision petitions were filed both by the appellant claiming
interest and compensation and by the Insurance Company against
the order of the State Commission. The main ground in the petition
filed by the Insurance Company was that a large number of items
which had been claimed to be stolen were not insured and there
was a lot of under-insurance. The National Commission held that
once the appellant had supplied a list of articles for the first policy,
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if there was any change he should have filed a fresh list and since a
large number of articles were not mentioned in the list the claimant
was only entitled to an amount of Rs.21,000/- towards the value of
stolen gold articles; Rs.5,929/- towards the depreciated
value of Citizen watch; Rs.7,000/- for repair of door latches etc.;
and Rs.16,000/- towards the value of stolen clothes after making
appropriate deduction for under-insurance of clothing. The
complainant was also awarded compensation of Rs.5,000/- towards
the cost of litigation etc. The appellant filed an SLP before this
Court and he was granted liberty to file a review petition before the
National Commission mainly on the ground that the policy of
2008-2009 was not considered by the National Commission.
6. The National Commission in the review petition took into
consideration the fact that the new insurance policy did not require
a list of items to be given. It, thereafter, awarded amounts under
various heads as follows:-
i) Jewellery and valuables - Claimant claimed that the
jewellery lost was worth Rs.1,84,150/- but the insurance package
was only for Rs.1,00,500/-. The National Commission ordered the
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Insurance Company to pay the amount after making adjustment for
under-insurance;
ii) Two cutlery sets in silver valuing Rs.31,000/- - The
National Commission held that these items were not insured and
did not fall under the heading of ‘kitchenware/crockery/cutlery
sets’.
iii) Clothing - The insured value of clothing was
Rs.55,000/- and the claimant claimed Rs.87,000/-. The National
Commission directed payment of this amount after making
adjustment for under-insurance.
iv) Electrical/Mechanical appliances - The appellant
claimed a sum of Rs.66,000/- for loss of electrical and mechanical
appliances, as against the coverage of Rs.1,82,500/-. This claim
was rejected on the ground that the claimant failed to produce bills
of invoices towards this amount.
v) Miscellaneous items - The appellant claimed
Rs.28,000/- for loss of miscellaneous items including watches
valuing Rs.20,000/- as against the coverage of Rs.41,000/-. He
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has been awarded only Rs.8,000/- and the claim for watches of
Rs.20,000/- has been rejected on the ground that he failed to
produce purchase invoices.
vi) Repair of locks, doors, latches, safe etc. - The appellant
was awarded Rs.7,000/- for repair of locks, doors, latches, safe etc.,
as claimed by him.
vii) The claimant was also awarded compensation of
Rs.10,000/- and interest @ 9% per annum.
7. Aggrieved, the appellant is before this Court.
8. The only legal issue which arises for consideration is “what is
under-insurance – and the effect thereof?”. Under-insurance
basically means that the insured has taken out an insurance policy
in which he has valued the insured items for a sum which is less
than the actual value of the insured item. In a country like India
this is normally done to pay a lesser premium. This is, in fact,
harmful to the policy holder and not to the Insurance Company
because even if the entire insured property is lost, the policy holder
will only get the maximum sum for which the property has been
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insured and not a paisa more than the sum insured. To give an
example, in case a person takes out the householder policy covering
fire insurance and gives the value of the structure of his house and
goods stored therein at Rs.50,00,000/- even though the value of the
same is Rs.1,00,00,000/- then even if the entire house and goods
are completely lost in a fire, he cannot get an amount above
Rs.50,00,000/- even though the value may be more.
9. If all the insured goods are lost then there is no problem. The
insured is entitled to the amount for which the goods were insured
even if that be less than the actual value of the goods. In case a
person gets a painting insured for Rs.1,00,000/- though the value
of the same is Rs.10,00,000/-, if the painting is lost the insured is
entitled to Rs.1,00,000/- only. If all the insured goods falling under
one head are stolen or lost then the insurance company cannot
apply the principle of averaging out because, though the loss may
be Rs.10,00,000/-, the claimant will get only one Rs.1,00,000/-as
per the value assessed and the insurance premium paid by him.
10. The Insurance Company can however apply the principle of
averaging out when all the goods are not destroyed. Supposing the
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entire house was insured for Rs.50,00,000/-, but on valuation it is
found that the value of the structure and the goods was
Rs.1,00,00,000/- and if the policy holder claims that he has
suffered loss of Rs.40,00,000/- then he will be entitled to only
Rs.20,00,000/-, by applying the principle of averaging out. What
this means is that if the value of the goods is more than the sum for
which they are insured then it is presumed that the policy holder
has not taken out insurance policy for the un-insured value of the
goods. The claim is allowed by applying the principle of averaging
out, i.e. the insured is paid an amount proportionate to the extent
of insurance as compared to the actual value of the goods insured.
11. To clarify the matter further, we may give another example.
Supposing, the insurer owns two paintings of Rs.5,00,000/- each
but pays premium for insurance cover of Rs.1,00,000/- for both the
paintings. If one painting is lost, even though the value of the
painting may Rs.5,00,000/- he will not get Rs.1,00,000/- but will
get only Rs.50,000/-, as proportionate amount. Therefore, when a
group of items is insured under one heading and only some of the
items and not all items are lost/stolen then the principle of
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under-insurance will apply. However, if all or most of the items of
value covered under the policy are stolen, then the insurance
company is bound to pay the value of the goods insured.
12. Applying this principle we may now deal with this case.
i) Jewellery and valuables - The entire jewellery and
valuables were insured for Rs.1,00,500/- but the claimant claimed
that the value of jewellery stolen was Rs.1,84,150/-. In this case
the entire jewellery was stolen. Therefore, the averaging out clause
will not apply and the claimant is entitled to a sum of Rs.1,00,500/-
under this head.
ii) Silver cutlery sets - The case of the claimant is that
these were insured under the head of ‘kitchenware/crockery/
cutlery’ items. According to him, the value of these sets is
Rs.31,000/-. Obviously kitchenware/crockery/cutlery will include
many other items lying in the kitchen and in the dining room.
Silver cutlery sets would normally fall under the head ‘jewellery and
valuables’ and since the claimant has been awarded the maximum
amount payable under that head, now he cannot divert the claim
for silver cutlery to the head ‘kitchenware/crockery/cutlery’. This
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Court can take judicial notice of the fact that in any middle class
household kitchenware/crockery/cutlery would value more than
Rs.18,000/-. It is obvious that silver cutlery valuing Rs.31,000/-
could not be insured under the head kitchenware/crockery/cutlery’
which was valued only for Rs.18,000/-. Therefore, the National
Commission was right in holding that there was no coverage for this
item.
iii) Clothing - The appellant claims that he has suffered a
loss of Rs.87,000/- , as against the coverage of Rs.55,000/-.
However, on perusing the statement of the appellant himself we find
that he has shown Rs.87,000/- to be the value of only six items of
clothing. There must have been many other items of clothing in the
house and when all the clothing has been insured under one
heading, it will include clothing items of all types, both expensive
and in-expensive. Admittedly, all items of clothing were not stolen
and, therefore, in this case the principle of under-insurance will
have to apply and the National Commission was right in directing
that the payment be made after applying principle of
under-insurance.
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iv) Electrical/Mechanical appliances - The coverage
under this head was Rs.1,82,500/- and the claimant claimed only
Rs.66,000/- and he gave the details of the items. This claim has
been rejected only on the ground that he had not produced invoices
of the same. The case of the appellant was that those items were
gifted by his son. The items such as CD changer, video camera,
DVD player, Camera etc. could be found in any middle class
household. It is not the case of the Insurance Company that these
items were not stolen. The claim should not have been rejected
only on the ground that invoices were not produced. The affidavit
of the appellant clearly indicates both the nature of the items lost
and the value thereof. This is supported by corroborative evidence
of the list of items given to the police. Once the insurance company
itself changed its policy from ‘as per list policies’ to ‘policies for
consolidated amounts’, then an insured is not expected to give the
item-wise details along with the valuation. We may also add that if
the insurance company desires that item-wise valuation should be
given for items over and above a certain value then it is the duty of
the insurance company to advise the insured at the time of issuing
the first policy of insurance and at the time of each renewal. The
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insurance company must at the time of accepting the premium
advise the policy holder properly. The insurance company cannot
accept the premium without asking for any details and later deny
its liability on the ground that such details were not given.
Therefore, we accept the claim of the claimant and he is entitled to
Rs.66,000/- under this head.
v) Miscellaneous items - On the same reasoning as
given for electrical/mechanical appliances we accept the claim of
the appellant of Rs.20,000/- for loss of four watches and, therefore,
he is entitled to Rs.28,000/- under this head.
vi) Repair of locks, doors, latches, safe etc. - The claimant
has already been awarded Rs.7,000/-under this head.
13. In addition thereto, we are of the view that the claimant
should be awarded Rs.25,000/-towards compensation and
litigations expenses etc. On the aforesaid amounts the appellant
shall be entitled to an interest @12% per annum w.e.f. 01.01.2009
till payment. The Insurance Company shall be entitled to
adjust/deduct the amounts already paid/deposited by it.
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14. The appeal is disposed of in the above terms. Pending
applications, if any, shall also stand disposed of.
15. The Registry is directed to send a certified copy of this
judgment to the appellant, who appeared in person.
………………………..J.
(Madan B. Lokur)
…………………………J.
(Deepak Gupta)
New Delhi
January 10, 2018