Brijendra Singh v. Aligarh Zila Sahkari Bank Ltd — 1979 DIGILAW 70 (ALL)

JUDGMENT A.N. Varma, J. - This petition has been filed under Art. 226 of the Constitution of India. It is directed against an order dated 16-8-75 passed by respondent No. 5 as Chairman of a Sub-Committee appointed by respondent No. 1. Co-operative Bank, purporting to terminate the services of the petitioner as Chief Accountant of respondent No. 1 Bank. The petitioner has also challenged the order passed by respondent No. 4, the Registrar Co-operative Society U. P. on 9-11-1977, rejecting a representation filed by the petitioner against the termination of bis services. 2. Briefly stated the material facts are as follows: - Aligarh Zila Sahkari Bank, Limited, the respondent No. 1, is a Co-operative Society registered under the U. P. Co-operative Societies Act. The petitioner was appointed as an Accountant in the aforesaid Bank in the year 1957 and subsequently confirmed on the said post. Later, in the year 1964, he was promoted as the Chief Accountant in the said Bank. 3. Purporting to act under Section 35 of the U. P. Co-operative Societies Act, the Registrar of the Co-operative Societies passed an order dated 22-12-72 superseding the Managing Committee of the respondent Bank. By another order dated 7-12-1974, the Registrar Co-operative Societies passed an order appointing the Assistant Registrar Co-operative Societies Aligarh as the Administrator of the Bank in consequence of the order superseding the Committee of Management. Against the aforesaid orders, the Committee of Management filed a writ petition in this Court being Civil Misc. Writ Petition No. 8159 of 1974. This petition was eventually allowed in part by a judgment and order dated 31-7-75. By the aforesaid judgment, this Court quashed the order dated 7-12-1974. In regard to the supersession of the Committee of Management, this Court observed that the order of supersession having run out its course, it would not be expedient to issue a writ of mandamus reinstating the Committee of Management. 4. The net result of the aforesaid facts and the order passed by this Court in Civil Misc. Writ Petition No. 8159 of 1974 mentioned above was that the powers of the administrator appointed under the above mentioned order dated 7-12-1974 ceased, and by virtue of the proviso to Section 29 (2) of the aforesaid Act. the existing Committee of Management became invested with the powers of management of the respondent Co-operative Society till the election of the new Committee of Management. 5. the existing Committee of Management became invested with the powers of management of the respondent Co-operative Society till the election of the new Committee of Management. 5. It is then alleged by the petitioner that the order which was eventually passed by the Sub-Committee on 16-8-1975 with Sri Devendra Pal Singh as its Chairman terminating the services of the petitioner was the result of the personal ill will which Sri Devendra Pal Singh bore against the petitioner. It appears that a meeting of the General Body was convened for 2-7-1975. At this meeting, the General Body passed a resolution appointing a Sub-Committee with Sri Devendra Pal Singh as its Chairman, investing it with all the powers of the management of the Society which were legally exercisable by the Committee of Management under Section 29 of the aforesaid Act. The resolution (vide Annexure "CA-1" to the counter-affidavit) recites that according to legal advice given to the respondent Bank, the Constitution of the existing Committee of Management was of doubtful validity and hence it was necessary to delegate the powers of the Committee of Management to a Sub-Committee. 6. It appears that purporting to exercise powers of management vested in it by the General Body under its aforesaid resolution dated 2-7-1975, the Sub Committee decided to terminate the services of the petitioner with immediate effect by offering him three months salary in lieu of notice. The petitioner states that he received an order dated 16-8-1975 signed by Sri Devendra Pal Singh as Chairman of the Sub-committee informing him that his services stood terminated with immediate effect on payment of three months salary in lieu of notice. 7. Aggrieved by the aforesaid order dated 16-8-1975, the petitioner submitted a representation on 29-9-1975 before the Registrar of Co-operative Societies under Section 128 of the U. P. Co-operative Societies Act. It is said in the petition that the petitioner sent several reminders to the Registrar to decide his representation and that it was only by an order dated 9-11-1977 that the petitioners representation was disposed of by the Registrar. The Registrar rejected the petitioners representation on the ground that it was not a fit case for invoking his powers under Section 128 of the aforesaid Act. 8. The Registrar rejected the petitioners representation on the ground that it was not a fit case for invoking his powers under Section 128 of the aforesaid Act. 8. Learned counsel for the petitioner has challenged the aforesaid orders dated 16-8-1975 and 9-11-1977 on the following grounds: (1) His first submission was that the petitioners services could be terminated only by the committee of management, and not by the sub-committee appointed by the general body of the Society. He submitted that under Section 29 of the aforesaid Act, the management of the Co-operative Society vested in the committee of management, and under the relevant regulations and by-laws framed by the Society, it was only the committee of management which had the power to terminate the services of the petitioner. He further submitted that until fresh elections were held, the committee of management alone was legally entitled to function as such in view of the proviso to sub-section (2) of Section 29 of the Act. Learned counsel also submitted that the general body had no power to appoint a sub-committee and invest it with the management of the society. Nor, according to the counsel for the petitioner, did the general body have power to declare the election of the managing committee as illegal or to supersede the committee of management on that ground. The order terminating the petitioners services passed by the aforesaid sub-committee, according to the submission of the learned counsel for the petitioner is thus patently illegal and void. Learned counsel for the respondent No. 1, on the other hand submitted that general body of the society was fully empowered to appoint a sub-committee delegating to it the management of the Co-operative Society in view of the facts and circumstances recited in the aforesaid resolution of the general body dated 2-7-1975. Learned counsel for the respondents second submission was that in any case, inasmuch as the committee of management had subsequently ratified the action of the subcommittee terminating the services of the petitioner, whatever illegality there might have been in the appointment of the sub-committee by the general body and in vesting the powers of the management in that sub-committee, it was cured by such subsequent ratification made by the committee of management. (3) The third submission of the learned counsel for the respondent was that the petition was highly belated and it ought to be dismissed on the ground of laches. 9. Having heard learned counsel for the parties, we are clearly of the view that the impugned order dated 16-8-1975 is patently without jurisdiction having been passed by a body which had no power to terminate the services of the petitioner, and that the writ petition ought to be allowed. 10. The first question which falls for determination is as to which particular body has been given the power to terminate the services of an Accountant under the provisions of the U. P. Co-operative Societies Act. the Rules framed thereunder and the bye-laws of the Society. 11. Section 29 of the U. P. Co-operative Societies Act (hereinafter referred to as the Act) lays down that the management of a Co operative Society shall vest in the Committee of Management, which shall exercise such powers and perform such duties as may be conferred or imposed by the Act, Rules and the Bye-laws of the Society. Under sub-section (2) of Section 29 of the said Act. it is provided that after the expiry of its term, the Committee of Management will continue to function as such until fresh elections are held by the Society. 12. It is not disputed that by the relevant dates including 16-8-1975, fresh elections for electing a new Committee of Management had not been held. Consequently, the existing Committee of Management was empowered under the Act to continue to function as such and exercise powers vested in it under the Act, the Rules framed thereunder and the Bye-laws of the Society. The powers of management having been specifically conferred by and under a statute on the Committee of Management could not be legally exercised by the General Body. 13. We may now refer to the relevant bye-laws framed by the respondent Society. Bye-law No. 10 of these bye-laws deals exhaustively with the election of the members of the Committee of Management, as well as its powers, functions and duties. 14. Bye-law, No. 10 (Kha) (printed at page 23 of the Booklet containing the bye-laws of the respondent Society) lays down that the management of the Bank will vest in the Committee of Management. 14. Bye-law, No. 10 (Kha) (printed at page 23 of the Booklet containing the bye-laws of the respondent Society) lays down that the management of the Bank will vest in the Committee of Management. It further provides that after the term of the Committee of Management has expired, it will continue to function as such till a new Committee of Management is elected. On page 30 of the aforesaid Booklet are reproduced the special and specific powers and duties of the Committee of Management and it is recited that these are in addition to the general powers of management vested in the Committee of Management. Under Bye-law "Gha" printed on the same page i. e. page 30 of the aforesaid Booklet, it is provided that the power to appoint, suspend, dismiss, remove, or punish and fix the emoluments of the employees of the Society vests in the Committee of Management. 15. It is thus abundantly clear that the power to appoint, suspend, dismiss, or discharge, an Accountant vested specifically in the Committee of Management. It was not denied by the respondents that the petitioner was appointed by the Committee of Management in exercise of the powers mentioned above. The petitioner could therefore, be legally discharged only by the Committee of Management and not by any other authority. The above conclusion is further fortified by the Regulations called the "U. P. Co-operative Society Employees Services Regulations, 1973" which have been framed by the U. P. Co-operative Central Services Board under Section 122 of the Act. Regulation No. 19 of the same reads as follows: - "19. Termination. - Services of an employee shall be terminable : - (a) in case of a temporary employee, on one months notice in writing on either side, or in lieu thereof by payment of one months salary by the party which gives notice: Provided that in case of direct appointments made for a specific period, it shall not be necessary to give any notice or any pay in lieu thereof. Explanation: - Specific period means stated period of less than six months; (b) by three months notice in writing on either side in case of a confirmed employee. Explanation: - Specific period means stated period of less than six months; (b) by three months notice in writing on either side in case of a confirmed employee. Explanation : - (1) A notice given by an employee under Regulation No. 19 shall be deemed to be proper only if he remains on duty during the period of the notice: Provided that the employee may be allowed on request to avail such portion of earned leave as may be due to him which shall however not exceed the notice period." (2) The expression month used in this regulation shall be a period of thirty days commencing on the date immediately following the date on which the notice is received by the employee or the appointing authority, as the case may be." Regulation No. 21 is as follows:- - "Notice of termination of service on behalf of the employer society shall be given by the appointing authority." 16. The appointing authority in the case of the petitioner is indisputedly the Committee of Management. It is thus plain that only the Committee of Management could, under Regulation No. 21, terminate the services of the petitioner and inasmuch as admittedly the Committee of Management did not terminate the services of the petitioner the order dated 16-8-1975 passed by the Chairman of the aforesaid Sub-Committee purporting to terminate the services of the petitioner is ex facie completely without jurisdiction. 17. Learned counsel for the respondents submitted that the general body did have the power to appoint a Sub-Committee and the Sub-Committee in its turn having been invested with the power of management by the general body was also, therefore, empowered to terminate the services of the petitioner. For this submission, learned counsel for the respondents sought aid from the provisions of Section 28 of the aforesaid Act. Section 28 lays down that subject to the provisions of the Act and the Rules, the final authority of a Cooperative Society shall vest in the general body of its members in a general meeting. We do not agree with this submission. The provisions of Section 28 have been expressly made subject to the other provisions of the Act and the Rules. We do not agree with this submission. The provisions of Section 28 have been expressly made subject to the other provisions of the Act and the Rules. Consequently, when the very next section of the Act, namely, Section 29 provides that the management of the Co-operative Society shall vest in a Committee of Management constituted in accordance with the provisions of the Act, the Rules and the bye-laws, and that it shall exercise such powers and perform such duties as may be conferred or imposed by the Act, the Rules, and the Bye-laws, it is clear that the same powers which have been specifically vested in the Committee of Management by or under a statutory provision cannot be claimed to be exercisable by the general body. Indeed, if the submission of the learned counsel for the respondent is accepted, the whole scheme of the Act would become entirely unworkable. The same powers would become in that event exercisable simultaneously by two bodies, the general body as well as the Committee of Management, both constituted under statutory provisions. Section 28, therefore, cannot assist the respondents. 18. Learned counsel for the respondents next sought to place reliance on the provisions of Section 118 of the Act which read as follows: - "118. For the purpose of obtaining the opinion of the general body of a co-operative society under sub-section (1) of Section 35. The Registrar shall call a general meeting of the general body of the society, for which purpose he shall issue a notice to the members of the general body whose names have been intimated to him by the society or ascertained by him from the records. Non-receipt of the notice by any member shall not invalidate the proceedings of such meeting." 19. The learned counsel for the respondents relying upon Section 118 urged that even if it be assumed that there was some legal infirmity in the appointment of a Sub-Committee, it would not vitiate the ultimate order passed by the Sub-Committee. In our opinion, the provisions of Section 118 have no application to the facts of the present case. Section 118 only says that no act of a Co-operative Society or a Committee of Management shall be deemed invalid by reason only of any defect in the constitution of such Society or the Committee. In our opinion, the provisions of Section 118 have no application to the facts of the present case. Section 118 only says that no act of a Co-operative Society or a Committee of Management shall be deemed invalid by reason only of any defect in the constitution of such Society or the Committee. In our view, it is not a case where there was a mere defect in the constitution of the society or a Committee. The present is a case of total lack of power in an ad hoc body called the Sub-Committee created by the general body purporting to exercise the power which the general body did not have. The general body had no power to supersede the Committee of Management, and to appoint the Sub-Committee. It was, therefore, not a case of a mere defect in the constitution of a Society but it was a case of usurpation of powers by the general body, and thereafter in exercise of that power, the general body illegally appointed a sub-committee. 20. Learned counsel for the respondents also made a faint attempt to seek support from a Bye-law of the Society printed at page 34 of the aforesaid Booklet which contains provisions analogous to Section 118 of the Act. It says that no act of the Committee of Management shall be deemed void merely because some members of the Committee have been illegally elected or if the constitution of the Committee of Management is found to be defective. For the reasons for which we have rejected the submission of counsel for respondents in regard to the application of Section 118 of the Act, we reject his submission based on this Bye-law as well. 21. We have found no provision in the Act or the Rules or in the bye-laws of the Society, which can be construed as empowering the General body to declare the election of the Committee of Management as illegal and thereupon to strip the Committee of Management of its statutory powers, functions and duties, and vest them in a Sub-Committee. The resolution of the General Body marked as Annexure "CAA.-l" to the counter-affidavit superseding the Committee of Management and investing all the functions and duties of the same in a Sub-Committee was thus entirely without any sanction of law. The resolution of the General Body marked as Annexure "CAA.-l" to the counter-affidavit superseding the Committee of Management and investing all the functions and duties of the same in a Sub-Committee was thus entirely without any sanction of law. The appointment of the Sub-Committee itself being wholly without the authority of the law, the impugned order passed by it purporting to terminate the services of the petitioner was also a fortiori entirely void and inoperative in law. 22. We may now deal with the second point urged by the counsel for respondents, namely, that even if the order of the termination of service was legally defective in its inception, it was ratified by the new committee of Management. Learned counsel for the respondents placed reliance on the allegations made in paragraph 15 the counter-affidavit filed on their behalf, wherein it has been stated that twice the matter came up before the Committee of Management, but each time, the Committee approved and maintained the earlier decision taken against the petitioner on 16-8-1975 terminating his services. It further appears that the matter of termination of the petitioners services had come up before the newly constituted Committee of Management in connection with the petitioners representation made to the Registrar. The Registrar appears to have called for some comments from the Committee of Management and it is in that connection that the Committee of Management is said to have approved the action taken against the petitioner. The respondents hive not filed with their counter-affidavit the precise resolutions of the Committee of Management by which the matter of termination of the petitioners services is alleged to have been considered by it nor have they reproduced the terms in which the said approval was made by the Committee of Management. It has also not been stated in the counter-affidavit as to whether in consequence of these resolutions, the newly constituted Managing Committee issued any fresh notice to the petitioner terminating bis services from a latter date or endorsing the order dated 16-8-1975 passed by the Sub-Committee terminating the petitioners service. 23. It has also not been stated in the counter-affidavit as to whether in consequence of these resolutions, the newly constituted Managing Committee issued any fresh notice to the petitioner terminating bis services from a latter date or endorsing the order dated 16-8-1975 passed by the Sub-Committee terminating the petitioners service. 23. In the absence of the exact resolutions passed by the newly constituted Managing Committee and in the absence of any averment that the provisions of Regulation 21 quoted hereinabove were complied with even by the newly constituted Committee of Management, it is not possible for us to refuse relief to the petitioner on the basis of the vague and general allegations made in paragraph 15 of the counter-affidavit. In our view, even if we assume that the newly constituted Committee of Management had in -some indirect way endorsed the decision of the above mentioned Sub-Committee terminating the petitioners services, that by itself could not fulfil the mandatory requirements of Regulations Nos. 19 and 21 quoted above under which the services of the petitioner could legally be terminated in law by means of three months notice in writing given by the Committee of Management, which in the present case was the appointing authority. 24. We are also of the view that the invalidity of the order passed by the Sub-Committee on 16-8-1975 could not be cured by mere ratification by the newly constituted Committee of Management. In our view, an act of a Body which totally lacks power to do that act is incapable of being ratified. Learned Counsel for the petitioner cited before us the decision of the Andhra Pradesh High Court in the case of R. Apparao v. Registrar Co-operative Societies Hyderabad reported in (1973) 9 Co-op LJ 187. In that case, the services of the petitioner Apparao had been terminated by a Sub-Committee constituted by the Managing Committee of the respondent Bank in accordance with a Bye-law which was unregistered, under the Andhra Pradesh Cooperative Societies Act: the bye-law, in order to be effective, was required to be registered. Acting under the said unregistered bye-law, the Managing Committee had constituted a Sub-Committee to discharge its functions. Acting under the said unregistered bye-law, the Managing Committee had constituted a Sub-Committee to discharge its functions. The petitioner challenged the order of the Sub-Committee dismissing him from service on the ground that the bye-law not being registered was invalid and that consequently the constitution of the Sub-Committee as well as the action taken by it terminating the petitioners services were void in law. The respondent Bank had sought to justify the termination of die petitioners services on the ground that the action of the Sub-Committee had been ratified by the Managing Committee. The High Court of Andhra Pradesh allowing the writ petition held that the so-called ratification by the Managing Committee could not legally validate a void action of the Sub-Committee. The material facts of the case before the Andhra Pradesh High Court and the case before us are similar. We are in complete agreement with the ratio of this case. In any case, inasmuch as it has not been asserted in the counter-affidavit that the newly constituted body had also served any notice in terms of Regulation No. 21 on the petitioner, the second submission of the learned counsel for the respondent also fails. 25. The last submission of the learned counsel for the respondent was that the petition ought to be dismissed as being highly belated. Learned counsel for the respondents urged that the impugned order of dismissal was passed as far back as 16-8-1975, whereas the writ petition was filed on 16-2-1978. Learned counsel for the respondents submitted that though the petitioner had submitted a representation to the Registrar invoking the powers of the Registrar under Section 128 of the aforesaid Act, he was not justified in sending reminder after reminder and in awaiting the decision of the Registrar. Learned counsel for the respondent further urged that the petitioner was not justified in invoking the powers of the Registrar under Section 128 which was not applicable to the facts of the present case. 26. Having heard learned counsel for the parties, we are not satisfied that the petitioner was guilty of laches. The petitioner had submitted his representation on 29-9-75 invoking the powers of the Registrar under Section 128 of the Act immediately after the notice of termination of service. 26. Having heard learned counsel for the parties, we are not satisfied that the petitioner was guilty of laches. The petitioner had submitted his representation on 29-9-75 invoking the powers of the Registrar under Section 128 of the Act immediately after the notice of termination of service. The petitioner produced before us a copy of his representation in which he had categorically challenged the validity of the order of termination of his services on the ground that the Sub-Committee had no power to terminate his services, and that the resolution of the General Body dated 2-7-1975 was null and void. In our view, the petitioner was right in thinking that he might get full relief if the Registrar exercising his powers under Section 128 had annulled the resolution passed by the General Body on 2-7-1975. The petitioner had not been sleeping over his rights. The representation was rejected only on 9-11-1977. The writ petition has been filed within a reasonable time from the date of the rejection of the representation. Learned counsel for the respondent relied on a decision of the Supreme Court, Rabindra Nath Bose v. Union of India ( AIR 1970 SC 470 ). That was a case in which petitioner had been making representation after representation after the rejection of his previous representations on the same facts. The facts of that case are materially different from the facts of the present case. In the present case, the petitioner has come to the Court immediately after his representation had been rejected by the Registrar. Consequently, he cannot be blamed for awaiting the decision of the Registrar. We also do not agree with the contention of the learned counsel for the respondent that the provisions of Section 128 were not attracted to the facts of the present case. The Registrar has been given the power to annul a resolution of the General Body if he is of the opinion that the resolution is in contravention of the provisions of the Act. The petitioner as a party aggrieved by the said resolution was undoubtedly entitled to invoke the powers of the Registrar and request him to annul the resolution. 27. In our view, the petitioner was diligently and bona fide prosecuting a legitimate remedy and he has come to the Court without losing any time. We are not satisfied that the petitioner has been guilty of laches. 27. In our view, the petitioner was diligently and bona fide prosecuting a legitimate remedy and he has come to the Court without losing any time. We are not satisfied that the petitioner has been guilty of laches. The third submission of the learned counsel for the respondent thus also fails. 28. Our conclusion, therefore, is that the order dated 16-8-1975 is completely void in law having been passed by a body which had no power to pass such an order. The said order being completely void in law, does not affect the right of the petitioner to continue in service as the Chief Accountant of respondent No. 1. 29. In the result, the petition succeeds and is allowed. The order passed by respondent No. 5 on 16-8-1975 (annexed to the writ petition as Annexure "3") is quashed. The petitioner will be entitled to his costs from respondent No. 1.