Co-operative Societies in Punjab Not Bound to Provide Retiral Benefits at Par with State Employees
In a significant judgment dated March 5, 2026, the Punjab and Haryana High Court, presided over by Justice Harpreet Singh Brar, declared the Punjab State Cooperative Agricultural Service Society Service Rules, 1997, as ultra vires the Punjab Cooperative Societies Act, 1961. This ruling was delivered in a series of writ petitions concerning the enforcement of retiral benefits for employees of co-operative societies in Punjab.
The court examined the delegation of rule-making powers under the Punjab Cooperative Societies Act, 1961, which allows the State Government to frame rules but does not authorize further delegation to the Registrar, Co-operative Societies. The Registrar had framed the 1997 Service Rules under Rule 28 of the Punjab Cooperative Societies Rules, 1963, which the court found to be an unauthorized sub-delegation.
The court noted that the 1997 Service Rules imposed obligations on co-operative societies to provide retiral benefits equivalent to those of state government employees, despite the societies' precarious financial conditions. It was highlighted that many societies operate with minimal financial resources, relying on minor commissions and without receiving state financial support.
The judgment also addressed the applicability of the Payment of Gratuity Act, 1972, stating that it applies only to establishments employing ten or more persons. As most co-operative societies in Punjab have fewer than ten employees, the Act does not apply to them.
In conclusion, the court held that the 1997 Service Rules are unenforceable, and the writ petitions seeking their enforcement were deemed non-maintainable. The court further directed that no recovery shall be made from retired employees for benefits already disbursed.
Bottom Line:
The Punjab State Cooperative Agricultural Service Society Service Rules, 1997, framed by the Registrar, Co-operative Societies, under Rule 28 of the Punjab Cooperative Societies Rules, 1963, are declared ultra vires the Punjab Cooperative Societies Act, 1961, as sub-delegation of rule-making authority to the Registrar is not authorized by the parent statute.
Statutory provision(s): Punjab Cooperative Societies Act, 1961, Punjab Cooperative Societies Rules, 1963, Payment of Gratuity Act, 1972.
Samarjit Singh v. State of Punjab, (Punjab And Haryana) : Law Finder Doc id # 2869376
