Kerala High Court
Kerala State Transport Workers … vs State Of Kerala Represented By The … on 24 February, 2026
Author: T.R.Ravi
Bench: T.R.Ravi
WP(C) NO. 23986 OF 2025
2026:KER:15968
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
TUESDAY, THE 24TH DAY OF FEBRUARY 2026/5TH PHALGUNA, 1947
WP(C) NO. 23986 OF 2025
PETITIONER:
KERALA STATE TRANSPORT WORKERS
CO-OPERATIVE SOCIETY LTD NO. T 133,
S.S. KOVIL ROAD,
THAMPANOOR,
THIRUVANANTHAPURAM
REPRESENTED BY ITS SECRETARY,
SMT.SINDHU T.S.,
PIN - 695001.
BY ADV SRI.N.UNNIKRISHNAN
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE SECRETARY TO GOVERNMENT
TRANSPORT 'A' DEPARTMENT,
GOVERNMENT SECRETRIAT,
THIRUVANANTHAPURAM,
PIN - 695001
2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES
JAWAHAR CO-OPRATIVE BHAVAN,
D.P.I. JUNCTION,
THYCAUD POST OFFICE,
THIRUVANANTHAPURAM,
PIN - 695014
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3 KERALA STATE ROAD TRANSPORT CORPORATION
TRANSPORT BHAVAN, FORT,
THIRUVANANTHAPURAM
REPRESENTED BY THE CHAIRMAN & MANAGING
DIRECTOR.,
PIN - 695023
SHRI.DEEPU THANKAN, SC, KSRTC
SRI.P.SANTHOSH KUMAR, SPL.GOVT. PLEADER
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 18.09.2025, THE COURT ON 24.02.2026 DELIVERED
THE FOLLOWING:
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T.R. RAVI, J.
--------------------------------------------
W.P.(C)No.23986 of 2025
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Dated this the 24th day of February, 2026
JUDGMENT
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
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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.
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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
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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
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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
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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
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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
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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
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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
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with the required seriousness and take corrective action.
The writ petition is disposed of with the above
observations.
Sd/-
T.R. RAVI
JUDGE
Pn
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APPENDIX OF WP(C) 23986/2025
PETITIONER’S EXHIBITS
Exhibit P1 A TRUE COPY OF MEMORANDUM NO.
BUD.6/002184/2025 DATED 18.06.2025 ISSUED
BY THE 3RD RESPONDENT
Exhibit P2 A TRUE COPY OF CERTIFICATE OF SALARY
LIABILITY AND MEMBERSHIP IN CO-OPERATIVE
FOR LOAN DATED 27.05.2013 SUBMITTED BY SHRI
L. HARSHAKUMAR, A MEMBER OF THE PETITIONER
SOCIETY.
Exhibit P3 A TRUE COPY OF CONSENT LETTER SUBMITTED BY
ONE L.HARSHAKUMAR DATED 14.06.2013
Exhibit P4 A TRUE COPY OF SURETY BOND DATED 14.06.2013
EXECUTED BY SHRI.L.HARSHAKUMAR AND 3
SURETIES
Exhibit P5 A TRUE COPY OF AWARD DATED 27.09.2022 IN
A.R.C. NO. 10427/2022 PASSED IN THE CASE OF
SHRI.L.HARSHAKUMAR AND OTHERS, FOR
REFERENCE
Exhibit P6 A TRUE COPY OF ORDER DATED18.12.2024 IN
E.A. 1073/2023 IN AWARD NO. 10427/2022
ISSUED BY THE SPECIAL SALES OFFICER IN
RESPECT OF SHRI. HARSHAKUMAR AND OTHERS
Exhibit P7 A TRUE COPY OF JUDGMENT DATED 05.04.2002 IN
O.P. NO. 37952/2001 (KERALA STATE TRANSPORT
WORKERS CO-OPERATIVE SOCIETY AND ANOTHER
VS. KSRTC AND OTHERS)
Exhibit P8 A TRUE COPY OF ORDER DATED 14.02.2007 IN
R.P. NO. 119/2007 IN W.A. NO. 2060/2006
FILED BY THE PETITIONER SOCIETY
Exhibit P9 A TRUE COPY OF JUDGMENT DATED 12.10.2011 IN
W.P.(C) NO. 26861/2011 FILED BY ONE G.
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MURALEEDHARAN NAIR AND ANOTHER VS. KSRTC
AND OTHERS
Exhibit P10 A TRUE COPY OF INTERIM ORDER DATED
10.06.2025 IN C.O.C NO. 1735/2023 IN W.P.
(C) NO. 19552/22 FILED BY THE KSRTC
EMPLOYEES CO-OPERATIVE SOCIETY LTD. R710
CHALAKUDY
