S P Chandrakarv.State of Chhattisgarh & Ors

Supreme Court Holds Service Rules Amendment Valid Despite Non-Laying Before Legislature

Case Snapshot

Case Name: S.P. Chandrakar v. State of Chhattisgarh & Ors.

Citation: 2026 INSC 769

Bench: Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh

Date of Judgment: July 30, 2026

Area of Law: Service Law, Cooperative Societies, Statutory Interpretation

The Judgment in One Line

Registrar's power to frame service rules includes power to amend them; non-laying before legislature is directory, not mandatory.

Why This Judgment Matters

This judgment clarifies two critical aspects of service law and delegated legislation. First, it establishes that the Registrar of Cooperative Societies has the inherent power to amend service rules under Section 55 of the Chhattisgarh Cooperative Societies Act, and Section 21 of the General Clauses Act supports this interpretation. Second, it resolves the long-standing ambiguity around the word "shall" in laying provisions—the Court held that Section 95(3), requiring rules to be laid before the Legislative Assembly, is directory, not mandatory. This prevents technical non-compliance from invalidating otherwise valid rule-making exercises and has significant implications for cooperative societies across the country.

Background

The appellant, S.P. Chandrakar, and respondent No. 5, Kishor Bagh, were employees of the District Central Cooperative Bank Ltd., Raipur. Their service conditions were governed by the Chhattisgarh District Cooperative Central Bank Employee Service Rules, 1982.

Rule 5(3)(a) prohibited employees appointed for technical work from being promoted to non-technical/administrative posts. The appellant, originally appointed as an Assistant Engineer (technical post), was promoted to Additional Manager (administrative post) in 2010 after the Registrar issued a notification deleting Rule 5(3)(a). Respondent No. 5 challenged this promotion before the High Court, arguing the amendment was invalid.

The learned Single Judge quashed the appellant's promotion, holding that no formal amendment order was issued and the communication was merely a circular. The Division Bench affirmed this view, relying on the principle that executive instructions cannot override statutory rules. The appellant then approached the Supreme Court.

Issues Before the Court

1. Whether the Registrar had the power to amend Rule 5(3)(a) of the Service Rules, 1982.

2. Whether the deletion of the rule was validly done by the Additional Registrar.

3. Whether non-laying of the amended rules before the Legislative Assembly under Section 95(3) renders the amendment invalid.

4. Whether the nomenclature of the order (circular vs. notification) affects its validity.

What Did the Supreme Court Hold?

The Supreme Court allowed the appeal and restored the appellant's promotion, setting aside the judgments of the High Court. The Court's reasoning was comprehensive:

Registrar Has Power to Amend Rules: Section 55(1) of the Chhattisgarh Cooperative Societies Act empowers the Registrar to frame rules governing service conditions. The Court held that the power to frame rules necessarily includes the power to amend, alter, or delete them. This is reinforced by Section 21 of the General Clauses Act, 1897, which provides that where a statute confers power to issue notifications, orders, or rules, that power includes the power to amend, vary, or rescind them.

Additional Registrar's Role Valid: The amendment was communicated by the Additional Registrar but explicitly stated "ordered by Registrar." The Act provides for Additional Registrars to assist the Registrar, and there is no bar on delegation of functions. The State also did not dispute that the amendment was done under the Registrar's orders. The Court rejected the High Court's finding that no formal order existed.

Non-Laying Before Legislature is Directory: Section 95(3) requires that all rules made under the Act "shall" be laid on the table of the Legislative Assembly. However, the section provides no consequence for non-compliance. The Court held that the word "shall" in this context is directory, not mandatory. Citing multiple Constitution Bench judgments, the Court observed that the absence of any penalty or invalidating consequence indicates the provision is directory. The purpose of laying is to inform the legislature, and non-compliance does not invalidate the rules.

Nomenclature Does Not Affect Validity: The Court rejected the argument that the amendment was only a "circular" and not a valid order. Relying on Kiran Devi v. Bihar State Sunni Wakf Board, the Court held that wrong nomenclature or reference to a power does not vitiate the action if it can be justified under some other power. The Registrar had statutory authority, and the exercise of that power is valid regardless of the label attached to it.

Promotion Not to Be Disturbed After Long Period: Although the Court noted that promotions effected long ago should not be disturbed, it clarified that in this case, the challenge was timely filed. Nevertheless, the promotion was found valid on merits, so the issue of delay was not decisive.

Key Legal Principles

1. Power to frame includes power to amend — under Section 21 of the General Clauses Act, any power to issue rules includes the power to add, amend, vary, or rescind them.

2. The word "shall" is not always mandatory — whether a provision is directory or mandatory depends on legislative intent, consequences of non-compliance, and whether the object of the legislation would be defeated.

3. Laying provisions without invalidating consequences are directory — where a statute requires laying before the legislature but provides no consequence for non-compliance, the provision is directory.

4. Nomenclature does not determine validity — an action taken under statutory power remains valid even if the label used (circular, notification, etc.) is incorrect.

5. Delegation to Additional Registrar is permissible — where the statute provides for officers to assist the Registrar, delegation of functions is valid unless barred.

6. Executive instructions cannot override statutes — this principle was distinguished; here, the Registrar was exercising statutory power, not issuing mere executive instructions.

Important Precedents

State of U.P. v. Manbodhan Lal Srivastava, AIR 1957 SC 912

• A Constitution Bench held that the use of "shall" does not necessarily mean mandatory; courts must ascertain legislative intent from the whole scope of the statute.

Atlas Cycle Industries Ltd. v. State of Haryana, (1972) 2 SCC 601

• Distinguished between three types of laying clauses (simple laying, negative resolution, affirmative resolution) and held that non-compliance with simple laying does not invalidate rules.

K.T. Plantation (P) Ltd. v. State of Karnataka, (2011) 9 SCC 1

• Affirmed the principles in Atlas Cycle regarding the directory nature of laying provisions without invalidating consequences.

State of M.P. v. Hukum Chand Mills Karamchari, 2024 SCC OnLine SC 302

• Held that the identical provision under the Madhya Pradesh Cooperative Societies Act is directory and only for informational purposes.

Kiran Devi v. Bihar State Sunni Wakf Board, (2023) 6 SCC 574

• Held that wrong nomenclature or reference to a power does not vitiate the action if it can be justified under some other power.

Municipal Corpn. of Ahmedabad v. Ben Hiraben Manilal, (1983) 2 SCC 422

• Established that a wrong reference to the power under which action was taken does not per se vitiate the action.

Practical Impact

For advocates: This judgment is crucial when challenging or defending service rules framed under cooperative societies legislation. It establishes that the Registrar's power to amend rules is broad and that procedural lapses like non-laying before the legislature do not automatically invalidate rules.

For future litigation: High Courts will now be more circumspect in quashing promotions based on technical objections to rule amendments. The judgment also provides clarity on the interpretation of "shall" in laying provisions, which applies across various statutes.

May be cited: In any service dispute involving cooperative societies, and in cases where the validity of delegated legislation is challenged on grounds of non-compliance with laying provisions.

Lawcurb Quick Insight

The Court's interpretation of Section 21 of the General Clauses Act is significant—it means that whenever a statute grants power to frame rules, that power automatically includes the power to amend, unless expressly excluded. This principle has wide application beyond cooperative societies.

Lawcurb Practice Note

When challenging a service rule amendment, do not rely solely on non-laying before the legislature unless the statute expressly provides for invalidation. Instead, attack the substantive validity of the amendment or the authority's power to make it.

Remember This Ratio

Non-laying of rules before the legislature is directory when no consequence for non-compliance is provided; it does not invalidate the rules.

Exam Lens

Q: What is the distinction between mandatory and directory provisions, and how is it determined? A: Whether a provision is mandatory or directory depends on legislative intent, ascertained from the scope of the statute, consequences of non-compliance, presence of penalties, and whether the object of the legislation would be defeated. The use of "shall" is not conclusive.

Q: What is the significance of Section 21 of the General Clauses Act, 1897? A: It provides that where any Act confers power to issue notifications, orders, rules, or bye-laws, that power includes the power to add to, amend, vary, or rescind them, exercisable in the like manner and subject to the like conditions.

Q: Can an Additional Registrar exercise the powers of the Registrar under the Chhattisgarh Cooperative Societies Act? A: Yes, unless expressly barred. The Act provides for Additional Registrars to assist the Registrar, and delegation of functions is permissible. In this case, the order explicitly stated "ordered by Registrar," confirming the exercise of the Registrar's power.

Final Outcome

• Appeal allowed — the Supreme Court set aside the judgments of the learned Single Judge and the Division Bench of the High Court.

• Promotion restored — the appellant's promotion to Additional Manager dated 30.12.2010 is held valid and subsisting.

• Amendment held valid — the deletion of Rule 5(3)(a) of the Service Rules, 1982, by the Registrar was a valid exercise of statutory power under Section 55 of the Chhattisgarh Cooperative Societies Act.

• Non-laying directory — the requirement under Section 95(3) to lay rules before the Legislative Assembly is directory; non-compliance does not invalidate the rules.

• No costs — the appeals were disposed of without any order as to costs.

Lawcurb Verdict

This judgment is a masterclass in statutory interpretation. By holding that the power to frame rules includes the power to amend and that non-laying before the legislature does not invalidate rules, the Court has adopted a pragmatic approach that prevents technicalities from defeating substantive rights. It reaffirms that courts must look at the substance of the exercise of power rather than its form. For cooperative societies and service law practitioners, this judgment provides much-needed clarity on the scope of the Registrar's powers and the consequences of procedural non-compliance.

This report is prepared by Lawcurb for educational and informational purposes only. It is a concise summary of the judgment and should not be construed as legal advice. Readers are encouraged to refer to the original judgment before relying on any legal proposition.