Kailash Nath Mehrotra v. U. P. Upbhokta Sahkari Sangh Ltd
1974-01-09
PREM PRAKASH
body1974
DigiLaw.ai
ORDER Prem Prakash, J. - In this petition under Article 226 of the Constitution Kailash Nath Mehrotra an employee of the U.P. Upbhokta Sahkari Sangh (to be hereinafter referred to as the Federation), seeks to obtain a Rule against the Federation and its Secretary, respondent No. 2. to show cause why Annexure 10 dismissing him from service of the Federation be not quashed and why the petitioner be not directed to continue in the service of the Federation. Cause has been shown on behalf of the opposite parties by filing a counter-affidavit as also at the time of hearing of the Rule. 2. The admitted and stipulated facts are these. The Federation is a Society registered under the U.P. Co-operative Societies Act, 1965 (to be mentioned hereinafter as the Act). The objects of the Federation are primarily to assist in the promotion and organisation of the wholesale consumer co-operative stores. Bye-laws of the Federation made in exercise of the .power under Rule 15 of the U.P. Co-operative Societies Rules, inter alia, enumerate the powers exercisable by the Secretary and bye-law 37 (4) authorises the Secretary to suspend and punish clerical and inferior staff of the Federation (drawing pay below Rs. 200/-), subject appeal to the Board of Directors. In other cases, he may suspend an employee with the concurrence of the President. Alongside these Bye-laws the Federation adopted the Service Rules known as the U.P. Co-operative Federation Service Rules. Rule 17 provides the procedure for holding a disciplinary enquiry into the conduct of an employee: it provides that the employee will be given an opportunity to be heard in person if he so desires and if the explanation submitted by the employee was found unsatisfactory, the punishment that is proposed to be given to him will be communicated to him and he will be required to show cause why the proposed punishment - be not - given to him. If no further explanation is received or the explanation is unsatisfactory, the Executive Committee or the Secretary, as the case may be. will award the punishment to him if the Executive Committee or the Secretary is satisfied that the punishment is deserved. 3. The petitioner was suspended by the Secretary on 15th July, 1967, because there were certain complaints against him (vide Annexure 2). A charge-sheet (Annexure 4) was served upon him the disciplinary enquiry was commenced by the then Secretary.
will award the punishment to him if the Executive Committee or the Secretary is satisfied that the punishment is deserved. 3. The petitioner was suspended by the Secretary on 15th July, 1967, because there were certain complaints against him (vide Annexure 2). A charge-sheet (Annexure 4) was served upon him the disciplinary enquiry was commenced by the then Secretary. O.P. Sharma, but when the petitioner served a notice on the Secretary in the month of April. 1968. the Executive Committee of the Federation appointed the Joint Secretary to hold the enquiry into the charges. The petitioner was afforded an opportunity to explain his conduct and as a result of that enquiry the Joint Secretary submitted his findings absolving the petitioner from the charge of criminal breach of trust, but he, however, held him guilty for not maintaining the accounts regularly and for incurring expenditure in excess of the amount sanctioned by the Board (vide Annexure 18). The Secretary of the Federation was of the view that the charge of breach of trust had been brought - home to the petitioner and in that light he placed his comments before the Board. In its meeting held on 18th January 1969. the Board ratified the order of dismissal which was served upon the petitioner (it being Annexure 10 dated 18th January. 1969). It may be noted that no second show-cause notice as regards the punishment pro-posed to be imposed upon the petitioner was served before making the order contained in Annexure 10. The contention of the Federation is that the second show-cause notice was not thought necessary in the circumstances of the present case as a similar show-cause notice dated 23rd March. 1968 had been served upon him and the reply of the petitioner dated 5th April, 1968. had been received in the course of the disciplinary enquiry done by the then Secretary, Sri Sharma, and that the second enquiry held by the Joint Secretary was a mere concession given to the petitioner. 4. On these facts the petitioner has asked the Court to quash the order of dismissal on grounds, first, that the Federation committed a violation of R. 17 in not affording the second opportunity to the petitioner as regards the punishment proposed to be awarded to - him. Secondly, the Executive Committee of the Federation did not pass the order of dismissal, the Secretary being incompetent to do so.
Secondly, the Executive Committee of the Federation did not pass the order of dismissal, the Secretary being incompetent to do so. 5. Counsel on behalf of the Federation made a feeble attempt to sustain the order as one passed under Rule 17 of the Service Rules. I have no hesitation in rejecting this contention Rule 17 as I have already pointed out. makes it necessary for the Federation to serve a second show-cause notice against the proposed punishment. It may be that the then Secretary Sri Sharma held an enquiry and the petitioner in the course of that enquiry was asked to show cause against the proposed punishment of dismissal. but once the Federation had decided to hold a fresh disciplinary enquiry, the earlier proceedings became non-existent and it was, therefore, obligatory upon the Federation to comply with the rigour of Rule 17 after the Joint Secretary had submitted his findings and the decision taken to dismiss the petitioner from service. That having not been done, it follows that the order was not made in compliance with Rule 17 of the Service Rules. 6. Counsel for the Federation next urged that even on the basis that the order of dismissal had been passed in violation of Rule 17 a declaration for reinstatement of the petitioner with full pay and emoluments is illegal as amounting to enforce a contract of personal service and that the remedy of the petitioner lay in a suit for damages on the ground of breach of contract of service. In the argument of the learned counsel there was a relationship of pure master and servant and nothing more. According to the counsel, the Bye-laws and the Rules did not create any statutory obligation of a mandatory nature. Hence the termination of service - by the Federation even in Preach of - conditions of service laid down by the Service Rules would only attract the general law of master and servant and cannot result in a declaratory decree about continuity of service being granted or a mandamus being issued 7. Counsel on behalf of the petitioner urged that the Bye-laws have been framed by the Federation in exercise of the power conferred upon it by Rule 15 (xviii) of the Co-operative Societies Rules and.
Counsel on behalf of the petitioner urged that the Bye-laws have been framed by the Federation in exercise of the power conferred upon it by Rule 15 (xviii) of the Co-operative Societies Rules and. therefore, they have statutory effect and they impose statutory restriction of a mandatory nature on the Federation in respect of procedure to be adopted for taking disciplinary action. In particular, the learned counsel has invited me to some provisions of the Act from which he seems' to argue that the Federation being a Society registered under the Act, over which the Registrar of Co-operative Societies exercises effective control, and the Bye-law making power having been conferred upon the Society under the Rules, there is a contract on which the law imposes rights and duties enforceable by mandamus and to these provisions, which are the basis of the contention. I shall now turn. 8. An application for registration of the Society and the Bye-laws has to be made to the Registrar of Co-operative Societies appointed by the State Government together with the proposed Bye-laws under Section 6 of the Act, If the Registrar is satisfied that the proposed Bye-laws are not inconsistent with the provisions of the Act and the Rules and the objects of the proposed Society are in accordance with the Act, the Registrar registers the Society and its Bye-laws. The amendment of the Bye-laws is not operative unless it has been registered under the Act and Section 12 provides that the proposal for amendment of1 the Bye-laws shall not be accepted by the Registrar unless the Registrar is satisfied that the proposed amendment is not contrary to the objects specified in Section 4 of the Act and is not contrary to the other provisions of the Act or the Rules. Under Section 29 the management of every Co-operative Society vests in a Committee of Management constituted in accordance with the Act and the Rules and the Bye-laws. Section 35 confers power of supersession and suspension of the Committee of Management upon the Registrar who is - authorised by Section 65 to hold an enquiry into the constitution, working and financial condition of the Co-operative Society. The Registrar under Section 72 is also given the power of winding up the Society in the circumstances - mentioned therein.
Section 35 confers power of supersession and suspension of the Committee of Management upon the Registrar who is - authorised by Section 65 to hold an enquiry into the constitution, working and financial condition of the Co-operative Society. The Registrar under Section 72 is also given the power of winding up the Society in the circumstances - mentioned therein. Section 113 gives the power to make rules to the State Government to provide "the matters in respect of which the Co-operative Society Shall or may make Bye-laws." Such Co-operative Societies, as were existing on the date the Act came into force, were required to bring their Bye-laws in conformity with the Act and the Rules as provided by Section 131. In this scheme of the Act the learned counsel seeks support to his contention that the Federation being a body working under the aegis of the Act, over which the Registrar has power of supervision and control, the Bye-laws constitute statutory restrictions upon the exercise of power by the Federation in respect of matters provided therein, the violation of which is enforceable by a Rule of Mandamus. 9. It is well settled that duties imposed on Corporation, not by virtue of express provision of law or charter, or necessarily arising from the nature of the privileges or obligations conferred, but arising out of private contractual relations involving no question of public trust or duty, will not be enforced by a mandamus either against the trustees or the [corporation. The aggrieved party is left to his ordinary remedies, either at law or equity. This is necessarily so. for mandamus is limited to the enforcement of obligations imposed by law; and for the further reason that the writ cannot be substituted for a decree of specific performance in equity. (Ferris on the law of Extraordinary Legal Remedies, pp. 351-352). The condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. It is, therefore, clear that a declaration can be issued against a person or an authority or a corporation where the impugned act i: in violation of a statute under which it is set up or a public duty or responsibility imposed on such person, authority or body by such statute.
It is, therefore, clear that a declaration can be issued against a person or an authority or a corporation where the impugned act i: in violation of a statute under which it is set up or a public duty or responsibility imposed on such person, authority or body by such statute. Unless there is a violation of a public or statutory duty in the performance of which the relater has sufficient legal interest, no mandamus can issue. We have, therefore, to see whether in cases, such as the one before' me. a declaration by issue of the Rule of Mandamus could be granted, and that turns upon the decision of the question whether the relationship in the present was that of pure master and servant of some other relation. 10. In pure master and servant cases, the most that can be obtained is damages if the dismissal is wrongful; no order for re-instatement can be made, so no room exists for a declaration that the dismissal is void. But there may be cases in which there is an element of public employment or service supported by statute, in the nature of the office or status which is capable of protection. If any of these elements exists, then, in my opinion, whatever the terminology used and even though in some inter paries aspects the relationship may be 'called that of master and servant, there may be essential procedural requirements to be followed and failure to observe them ma' result in an order of dismissal being declared to be void. 11. This distinction was clearly perceived in cases which at various occasions came before our Supreme Court as also before the House of Lords in England. 'In Vine v. National Dock Labour Board, ((1956)1 3 All ER 939 at p. 944) dealing with a registered dock labourer, Viscount Kilmur LC said that the situation was entirely different from the ordinary master and servant easel and referred to his status as a registered worker which he was entitled to have secured. And Lord Kalth said: "This is not a straightforward relationship of master and servant." The dock labour scheme gave the dock worker a status, supported by statute. Vine's case was followed with approval by the Supreme Court in Calcutta Dock Labour Board v. Jaffar Imam ( AIR 1966 SC 282 ) : (1966 Cri LJ 189).
And Lord Kalth said: "This is not a straightforward relationship of master and servant." The dock labour scheme gave the dock worker a status, supported by statute. Vine's case was followed with approval by the Supreme Court in Calcutta Dock Labour Board v. Jaffar Imam ( AIR 1966 SC 282 ) : (1966 Cri LJ 189). The scheme framed by the Central Government in exercise of the powers conferred on it by sub-section (1) of section 4 of 'the Dock Workers (Regulation of Employment) Act, 1948. prescribed an opportunity being given to the worker before taking disciplinary action against him. In S.R. Tewari v. District Board Agra (1964) 3 SCR 55 : (AIR 1364 SC 1680) the Supreme Court after examining a number of tests, laid down that there were only three well recognised exceptions to the general rule under the law of master and servant where such a declaration would be issued, namely. (1) cases of public service falling under Article 311 (2) of the Constitution. (2) (Cases falling under the Industrial law. and (3) cases where acts of statutory bodies are in breach of mandatory obligation imposed by statute. "In Prabhakar Ramakrishna. Jodh v. A.L. Pande ( (1965) 2 SCR 713 ) the Supreme Court quashed the order of the governing body of the College terminating the appellant's services on the ground that the "College Code" made in pursuance of the Ordinance making power under the provisions of the University of Saugar Act had the force of law and the provisions of the Code relating to the security of tenure fell within the statutory power of - affiliation granted to the University under the Act, Life Insurance Corporation of India v. Sunil Kumar Mukherjee, ( AIR 1964 SC 847 was another case in which the order of termination of "the services of Mukherjee by the Corporation in purported exercise of the power under the Regulation was set aside. 'But that was a case where the order was made in contravention of the Order issued by the Central Government by virtue of the powers conferred upon it on Section II (2) of the Life Insurance Corporation Act 1956. The provisions of the Order in law partook of the character of the Rules framed under Section 48 of Lie Act, The dismissal made inconsistently with the - provisions of the said Order was adjudged as being without jurisdiction and.
The provisions of the Order in law partook of the character of the Rules framed under Section 48 of Lie Act, The dismissal made inconsistently with the - provisions of the said Order was adjudged as being without jurisdiction and. therefore, a nullity. In their recent 'decision in Sirsi Municipality v. C.K.F. Tellis, ( AIR 1973 SC 855 ) the Supreme Court declared the dismissal of the respondent as illegal and void because it was made in violation of Rule 143 which imposed a mandatory obligation as regards the procedure to be followed in such matters. The Rules were made in exercise of power conferred upon the Municipality by the statute. Said their Lordships. "Where a public body is empowered to terminate employment on specified grounds or where a public body does not - observe the procedure laid down by legislation......... the courts have declared such dismissal from public employment to be invalid." (vide page 859). 12. On the other hand, there are some cases where it has been held that a breach of contract of employment is not capable of finding a declaratory judgment of subsistence of employment for the reasons that a declaration of unlawful termination and restoration to such service in such a case of contract of employment would be indirectly an instance of specific performance of contract for personal service which is not permissible under the law of Specific Relief Act, One such case, which refer to is Vidyodaya University ox Cevlon v. Silva, (1964) 3 All ER 865) which concerned with a University Professor who was dismissed without hearing. He succeeded before the Supreme Court of Ceylon in obtaining an order of certiorari to quash the decision of the University, but that judgment was set aside by the Privy Council on the ground that the relationship was that of master and servant to which the remedy of certiorari had no application.
He succeeded before the Supreme Court of Ceylon in obtaining an order of certiorari to quash the decision of the University, but that judgment was set aside by the Privy Council on the ground that the relationship was that of master and servant to which the remedy of certiorari had no application. A similar question arose before the Supreme Court in Executive Committee of U.P. State Warehousing Corporation Ltd. v. Chandra Kiran Tyagi ( (1970) 2 SCR 250 ) : ( AIR 1970 SC 1244 : 1970 Lab IC 1044) where the respondent was a warehouse man in the employment of the Corporation established by the Agricultural Produce (Development and Warehousing) Corporation Act, 1956 the Corporation was given power by Section 54 of the Act to make regulations and on,e such regulation made by the Corporation dealt with the termination of service of an employee other than by way of punishment while Regulation 16 dealt with penalties. The termination of the respondent's service was not in conformity with Regulation 16. In spite of a breach committed by the appellant of Regulation 16 (3) the Supreme Court held at page 269. "An order made in breach of the regulations would be contrary to such terms and conditions, but would not be in breach of any statutory obligation, as was the position which this Court had to deal with in the Life Insurance Corporation's case (supra). In the instant case- a breach has been committed by the appellant of regulation 16 (3) when passing the said order of dismissal, inasmuch as the procedure indicated therein has not been followed. The Act does not guarantee any statutory status to the respondent, nor does it impose any obligation on the appellant in such matters." In the Indian Air Lines Corporation v. Sukhdeo Rai ( AIR 1971 SC 1828 ) : (1971) 1 Lab IC 1129 the respondent, a motor over was dismissed by an order dated February 6, 1956. He filed a suit alleging that the enquiry had been conducted in contravention of the procedure prescribed by regulations made by the Corporation under section 45 of tire Act and. therefore, the dismissal was void-. The High Court gave the relief of declaration. but the Supreme Court set aside the declaration granted by the High Court observing: "The regulations contain the terms and conditions which govern the relationship between the Corporation and its employees.
therefore, the dismissal was void-. The High Court gave the relief of declaration. but the Supreme Court set aside the declaration granted by the High Court observing: "The regulations contain the terms and conditions which govern the relationship between the Corporation and its employees. Though made under the power conferred by the statute, they merely embody the terms - and conditions of service in the Corporation but do not constitute a statutory restriction as to the kind of contracts which the Corporation can make with its servants or the grounds on which it can terminate them. That being so. and the Corporation having undoubtedly the power to dismiss its employees, the dismissal of the respondent was with jurisdiction, and although it was wrongful in the sense of its being in breach of the terms and conditions which governed the relationship between the corporation and the respondent it did subsist." In Praga Tools Corporation v. C.V. Imanual ( AIR 1969 SC 1306 ) an employee of a Company, known as Praga Tools Corporation, was refused the declaration as regards the continuity of his service on the ground that no such declaration can be granted against a Company registered under the Companies Act and not set up under any statute or having any public duty and responsibility to perform under such a statute. In Vidya Ram Misra v. Managing Committee. Shri Jai Narain College, (AIR 972 SC 1450) : (1972 Lab IC 829) the Supreme Court held that a Lecturer appointed by the Managing Committee of a College affiliated to the Lucknow University does not hold any office of public employment or status which is capable of protection. The ratio was stated thus at page 1454: "On a plain reading of Statute 151, it is dear that it only provides that the terms and conditions mentioned therein must be incorporation - entered into between the college and the teacher concerned. It does not say that the terms and conditions have any legal force, until and unless they are embodied? in an agreement. To put it in other words. the terms and conditions of service mentioned in Statute 151 have proprio vigore no force of law. They become terms and conditions of service only by virtue-of their being incorporated m the contract. Without the contract, they have no vitality and can confer no legal rights." 13.
in an agreement. To put it in other words. the terms and conditions of service mentioned in Statute 151 have proprio vigore no force of law. They become terms and conditions of service only by virtue-of their being incorporated m the contract. Without the contract, they have no vitality and can confer no legal rights." 13. From a reading of the above, it seems to me that a distinction has to be drawn between a case in which the employment is one of a public character or one - partaking of the nature of an office or one which is given statutory protection or status and one which is essentially of a private character, and in relation to which no question of public trust or duty, arises. 14. I come now7 to toe present case. Neither the Act nor the Rules made thereunder by the State Government give protection to an employee of 1he Co-operative Society registered under the Act, Bye-laws have, no doubt, been made by the Society under Rule 15 of the Co-operative Societies Rules, but the bye-law of a Society stands on a different footing from a bye-law made by a municipal corporation in exercise of the power conferred by the statute creating it. The municipal corporation is endowed with legislative sovereignty the exercise of which has no limits so long as it is within the objets and trust for which there cower is conferred. The municipal corporations are "political sub-divisions of the-State" and they are subject to be changed modified or destroyed as the exigencies of (he public interest may demand. The State can overrule their action whenever it is deemed unwise or unjust or even abolish them altogether in the legislative-discretion. As observed in Kruag v. Johnson, (1898) 2 QB 91) "a bye-law (in the case of County Council) is an ordinance affecting the public or some portion of the public imposed by some authority clothed with the statutory powers or something to he done or not to be done, and pained by some sanction or penalty for its non-observance. It necessarily involves restriction of liberty of action by persons who come under its operation as to acts which, but for the bye-law they would be free to do or not to do as they pleased.
It necessarily involves restriction of liberty of action by persons who come under its operation as to acts which, but for the bye-law they would be free to do or not to do as they pleased. Further, it involves this consequence that if validly made, it has the force of law within the sphere of its legitimate operation. The power to make-bye-laws is accompanied by certain safeguards indicated by the Act creating the Corporation and the Legislature has the Power to modify or take away the powers they have delegated to the corporation. In making a bye-law a Co-operation society does neither act as a delegate of the Legislature n-or does the bye-law affect or abridge the rights of others not concerned with the society. In that respect they have not the force of law. I am fortified in this view by the observation of the Supreme Court in Co-operative Central Bank Ltd. v. Addl. Industrial Tribunal Andhra Pradesh, (AIR 1970 SC 145) : 1970 Lab IC 285 where at page 252 it was observed that the bye-laws that can be framed by the Society under the Act are similar m nature to the articles of association of a company incorporated under the Companies Act and such articles of association have never been held to have the sanction of law. 15. The mere circumstances that the Federation was constituted under the Co-operative Societies Act and the Registrar exercised supervision and control over its management, and the bye-laws are required to be in conformity with the Act and the Rules, does not mean that the contracts of employment made with its employees by the Federation were other than the ordinary contracts of master and servant. One has to examine the framework and context of the employment to see whether elementary rights are conferred upon the employee expressly or by necessary implication and whether the employer was under some statutory obligation or limitation by reason of which it could not terminate the services of an employee except by complying with such an obligation, In the Act or in the Rules, as I have just said, we do not find any such statutory restriction or limitation which limits the power of the Federation in terminating that relationship. The bye-laws cannot be construed so as to impose such a statutory obligation.
The bye-laws cannot be construed so as to impose such a statutory obligation. Viewed in these aspects, the present case does not therefore fall within the exception recognised by the Supreme Court in S.R. Tewari's ease (1964) 3 SCR 55 : ( AIR 1964 SC 1680 ) (supra) and in the consequence the petitioner's remedy lies in a suit for damages. No writ can issue against the Federation. 16. In the result, the petition fails and the Rule is dismissed. In the circumstances' of the case, costs shall be borne by the parties.