A) Abstract / Headnote

The case Ernakulam Regional Cooperative Milk Producers Union Ltd. v. Nithu & Ors. (2024) concerns the issue of regularization of casual laborers employed by a cooperative society, which was challenged before the High Court of Kerala. The society’s notification inviting applications for regular recruitment led the respondents to seek permanent employment, bypassing the remedies under the Industrial Disputes Act, 1947 (ID Act). The Supreme Court analyzed whether the High Court was justified in directing regularization, emphasizing that such disputes typically require a factual inquiry before the proper labor authorities under the ID Act. Ultimately, the judgment of the High Court was quashed, with the Court advising the respondents to exhaust their remedies under the ID Act.

Keywords: Judicial Review, Industrial Disputes Act, Writ Jurisdiction, Regularization, Cooperative Society.

B) Case Details

• i) Judgment Cause Title: Ernakulam Regional Cooperative Milk Producers Union Ltd. v. Nithu & Ors.
• ii) Case Number: Civil Appeals No. 1455 – 1462 of 2024
• iii) Judgment Date: January 31, 2024
• iv) Court: Supreme Court of India
• v) Quorum: Hima Kohli and Ahsanuddin Amanullah, JJ.
• vi) Author: Justice Ahsanuddin Amanullah
• vii) Citation: [2024] 1 S.C.R. 1235; 2024 INSC 230
• viii) Legal Provisions Involved: Article 226 of the Constitution of India, Industrial Disputes Act, 1947
• ix) Judgments Overruled by the Case: None
• x) Related Law Subjects: Constitutional Law, Labor Law, Administrative Law

C) Introduction and Background of Judgment

This appeal emerged from a notification issued by the Ernakulam Regional Cooperative Milk Producers Union in 2011, which invited applications for regular recruitment. The respondents, casual laborers engaged on a contract basis with the appellant society, sought regularization of their employment through a writ petition, bypassing the procedural recourse under the Industrial Disputes Act, 1947. The High Court of Kerala, through its judgment, had directed the society to prepare a list of laborers eligible for regularization. Displeased, the appellant challenged the High Court’s directive, contending that it was outside the High Court’s jurisdiction under Article 226 and that the respondents had not fulfilled the criteria for regularization under the ID Act.

D) Facts of the Case

The appellant society, under its cooperative guidelines, hired casual laborers primarily drawn from member families. The employment terms were temporary, clarified by circulars in 1992 and 2010. The circulars restricted eligibility for permanent employment and stated that casual laborers would not receive preferential treatment for permanent positions. Despite this, the respondents, who had worked intermittently as Plant Attenders, filed for regularization when a formal recruitment notification was released in 2011. The respondents did not pursue remedies under the ID Act, filing a writ petition directly in the High Court instead. The appellant argued against regularization, asserting the respondents lacked the required work tenure and that their positions were temporary.

E) Legal Issues Raised

1. Validity of Regularization Order by High Court: Whether the High Court could order regularization without due compliance with ID Act procedures.
2. Judicial Review Limitations: The appropriateness of invoking Article 226 to bypass statutory remedies provided under labor law.
3. Factual Determination Requirement: The necessity of fact-finding by labor authorities versus judicial intervention in employment disputes.

F) Petitioner / Appellant’s Arguments

1. Jurisdictional Overreach: The appellant argued that it is a cooperative society and does not fall under Article 12 of the Constitution as a “State,” thus not directly subject to judicial review under Article 226. Regularization claims should have been adjudicated through the ID Act, not a writ petition.
2. Temporary and Rotational Employment: The respondents were employed temporarily under specific circulars, which expressly stated that their positions were not intended for permanency or preferential treatment.
3. Insufficient Working Days: The respondents failed to meet the minimum workdays required (240 days in a year) to claim regularization, as upheld in precedents like State of Karnataka v. Umadevi (2006).

G) Respondent’s Arguments

1. Continuous Service Assertion: The respondents claimed they had worked over 240 days annually, entitling them to regularization under the ID Act. They contended the cooperative structure should not preclude their rights to secure employment.
2. Judicial Review and Fundamental Rights: The respondents argued that judicial review under Article 226 is permissible for enforcement of fundamental rights, especially in cases involving job security and regularization.
3. Public Service by Cooperative Society: Since the cooperative serves public interests and received governmental support, it qualifies as a “State,” making it subject to constitutional mandates for fair employment practices.

H) Related Legal Provisions

1. Industrial Disputes Act, 1947: Provides mechanisms for addressing industrial disputes, particularly disputes involving employment conditions, regularization, and entitlements of workers.
2. Article 226, Constitution of India: Confers jurisdiction upon High Courts to issue writs for enforcement of fundamental rights or for any other purpose.
3. Article 12, Constitution of India: Defines “State” for the purposes of fundamental rights, influencing the scope of judicial review in employment disputes.

I) Judgment

a. Ratio Decidendi

1. Need for Fact-finding under ID Act: The Court held that claims requiring evidence-based determination, such as employment tenure and conditions, should proceed through the proper labor tribunal under the ID Act. The judicial review under Article 226 cannot replace fact-intensive inquiries that specialized labor authorities are equipped to handle.

2. Doctrine of Alternative Remedies: The Supreme Court reaffirmed that Article 226 relief is discretionary and should not replace available statutory remedies, especially where disputed facts are central. Writ jurisdiction should be exercised only in exceptional cases where statutory avenues are either unavailable or inadequate.

3. Unjustified High Court Order: The High Court erred in ordering regularization based on incomplete factual findings and without sufficient cause to invoke extraordinary jurisdiction under Article 226.

b. Obiter Dicta

The Court emphasized that a cooperative society functioning for public welfare does not automatically fall under Article 12. It clarified the significance of Article 16’s equal opportunity mandate, which excludes employment preferences based on membership in a cooperative society, as it contradicts constitutional values of equality.

c. Guidelines Issued

The Court allowed the respondents to seek redress under the ID Act within six months. This interim protection was granted to prevent abrupt job loss while they pursue formal claims.

J) Conclusion & Comments

This judgment underscores the judiciary’s restraint in employment matters, advocating for statutory remedies through labor courts and tribunals. It reinforces the judiciary’s stance on the doctrine of alternative remedies, promoting a structured approach to employment disputes. The Supreme Court’s directives emphasize the need for labor-related issues to be channeled through appropriate administrative mechanisms, reserving judicial review for instances of clear statutory or procedural violations. The ruling respects cooperative societies’ unique structure while balancing employees’ rights under industrial law.

K) References

1. State of Karnataka v. Umadevi, (2006) 4 SCC 1.
2. Gazula Dasaratha Rama Rao v. State of Andhra Pradesh, AIR 1961 SC 564.
3. Yogender Pal Singh v. Union of India, (1987) 1 SCC 631.
4. Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1.
5. Radha Krishan Industries v. State of Himachal Pradesh, (2021) 6 SCC 771.