1. The prayer in this original petition is to declare that Ext.P1 memorandum is unsustainable and is liable to be quashed. There is also a prayer for a direction to the respondents to recover and permit monthly instalments as requisitioned by the petitioner Society in time as provided under Section 37 of the Kerala Cooperative Societies Act, 1969 and as declared in Ext.P7 judgment.

2. The petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as the KCS Act). The members of the Society are employees of the KSRTC. The Society grants loan to the employees and the monthly instalments towards repayment of the loans are remitted to the Society by the KSRTC on the basis of an agreement, whereby the employee has consented for deducting the amount towards the instalments from his salary. The remittances were made initially, but later became very irregular. The grievance of the petitioner is that even though amounts are deducted from the salary of the employees, corresponding remittances are not made towards the loan accounts and the amounts are held back by the KSRTC.

3. The petitioner submits that when there is a default in the payment, the option left to the Society is to prefer an arbitration case under Section 69 of the KCS Act. After obtaining an award, execution applications are filed, and directions have also been issued for recovering the amount from the principal debtor and from his salary. The agreements between the Society and the KSTRC are governed by Section 37 of the KCS Act. The issue regarding non-payment by the KSRTC has come up before this Court on earlier occasions also. In the Judgment dated 05.04.2002 in OP No.37952 of 2001, this Court had considered the issue and directed the KSRTC to make the payments immediately. The Court stated the prejudice that has been caused due to the delay in paying the amounts in time, both to the Society as well as to the employees, and observed that they are free to work out their remedies either before the Civil Court or before the arbitrator under the KCS Act.

4. Ext.P1 is a memorandum which has been issued on 18.06.2025 by the KSRTC stating that they will no longer deduct any amount from the salary of the employee and remit to the Society. While considering the legality of Ext.P1, details of certain other proceedings are necessary to be stated. This Court had, in several writ petitions, issued directions to the KSRTC to pay the amounts due to the Society. There were also writ petitions in which the employees had approached the Court stating that amounts have been deducted from their salaries but not remitted to the Societies towards their loan amounts. When the directions were not complied with, contempt petitions had also been filed. While dealing with a batch of writ petitions cases, this Court had after hearing the parties felt that, since the KSRTC was not performing their obligation to pay the amounts which have been collected from the employees to the Co-Operative Societies as per the agreement, it will be beneficial for the employees if they are paid the entire salary and they can make the remittances to the Societies themselves. This Court had hence directed the KSRTC not to deduct any amount from the salaries of the employees. Even though the direction was well intended, it so happened that the amounts due to the Societies were not remitted either by the KSRTC or by the employees. Taking cue from the directions issued by this Court, the KSRTC issued Ext.P1 memorandum. In Ext.P1 memorandum, the KSRTC apart from saying that amounts will not be deducted also stated that from henceforth salary certificates will not be issued for the purpose of availing of loans. That is to say that the undertaking as per Section 37 of the KCS Act, to deduct the amount payable to the Society from the salary, was to be removed from the certificate that was to be issued. In the above circumstances, this Court on 08.07.2025 recalled the order issued earlier on 10.06.2025 and made clear that the KSRTC will have to continue to act as per the contracts executed under Section 37 of the KCS Act and that the order dated 10.06.2025 shall not be a reason to withdraw from the obligations. On the same day, an interim order was passed in this writ petition holding that the first portion of the memorandum regarding recovery based on agreements already entered into, can no longer be continued in view of the order passed on the same day, in the batch of cases. The grievance to that extent already stood redressed. In the above circumstances, it is not necessary to discuss the judgments of this Court under Section 37 of the KCS Act.

5. The other aspect that remains is regarding the direction to remit the amounts which have already been collected but not remitted to the Societies. In the absence of details regarding the amounts collected, it is not possible to issue any positive directions on that behalf. Regarding the second part of the memorandum, which says that the KSRTC would no longer issue salary certificate with an undertaking under Section 37, the Standing Counsel for the KSRTC submitted that the KSRTC is not bound to take up the obligation of deducting amounts from the salary and paying into the Society. Section 37 of the Act says that notwithstanding anything contained in any law for the time being in force, a member of a Society may execute an agreement in favour of the Society providing that his employer or the officer disbursing his salary or wages shall be competent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement and to pay the amount so deducted to the Society in satisfaction of any debt or other demand owing by the member to the Society. Section 37(2) says that on the execution of such an agreement, the employer or the officer disbursing the salary or wages of any such member as is referred to in sub-section (1) shall, if so required by the Society by requisition in writing, and so long as such debt or demand or any part of it remains unpaid, make the deduction in accordance with the agreement, and pay the amounts so deducted to the Society within seven days from the date of the deduction. The consequence of not deducting is stated in Section 94(5) of the Act. Section 94(5) says that any employer or officer who, without sufficient cause, fails to deduct any amount as required by sub-section (2) of section 37 or fails to pay to a Society the amount deducted by him under that sub-section within a period of seven days from the date on which such deduction is made, shall be punishable with fine which may extend to five thousand rupees. Section 95(4) of the Act says that no prosecution shall be instituted under sub-sections (2), (3), (4), (5), (6) and (7) of Section 94 without the previous sanction of the Registrar. Apart from the above two provisions, there are no other consequences contemplated under the KCS Act, if the employer does not deduct the amount. Moreover, it also says that if there is sufficient cause, the employer need not deduct the amount. Hence, it will not be proper for this Court to issue a mandamus to the employer to agree to deduct amount from the employee's salary and pay to the Society. So also, if the employer decides not to give any such undertakings in future, the same cannot be interfered with by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India. However, this will not affect the case of agreements which are already entered into and cases where salary certificates have already been issued undertaking to deduct amount from the salary and to remit it to the Society.

6. A Division Bench of this Court in Chengamanad Service Co-operative Bank Ltd. V. P.R.Mohanan and Others [2009 (3) KHC 205 (DB)] has held that a writ of mandamus will not lie against the Disbursing Officer directing him to deduct an amount from the salary of an employee for repayment of loan advanced by Society and the employer can only be prosecuted under Section 94(5) read with Section 95 of the Act.

7. In the above circumstance, Ext.P1 insofar as it deals with future course of action of the KSRTC cannot be interfered with in this writ petition. Before parting with the case, it is necessary to make certain observations regarding the functioning of the KSRTC regarding the payment of amounts to the Society. There are several Societies formed by employees of the KSRTC and all these Societies are granting loans to the employees. The only security based on which the loans are granted is the salary certificate, which contains an undertaking to deduct the amount from the salary and to pay it to the Society. To say that no amounts are being deducted as required and to say that the KSRTC has failed to deduct the amount without sufficient cause are two different aspects. Worser will be the situation where the KSRTC has not remitted the amount to the Society as required under the Act. As far as the first aspect is concerned, since no deduction has been made from the salary, it can be stated that there is sufficient cause for not remitting the amount to the Society. However, if amount has been deducted, there can be no excuse for not remitting the amount. This virtually amounts to unjust enrichment by the employer. It is high time that the State Government which has control over the functioning of KSRTC, views this aspect with the required seriousness and take corrective action.

                  The writ petition is disposed of with the above observations.