MUKTARUDDIN AHMED KHAN v. MIDNAPORE CO-OPERATIVE LAND DEVELOPMENT BANK LTD.
1988-03-17
SUDHIR RANJAN ROY
body1988
DigiLaw.ai
SUDHIR RANJAN ROY, J. ( 1 ) THE respondent No. 1, the Midnapore Co-operative land Development Bank Ltd. (in short, the respondent Bank) is a Bank in the co-operative Sector constituted by and/or under the West Bengal Co-operative societies Act, 1973 and/or Rules framed thereunder known as West Bengal co-operative Societies Rules, 1974. ( 2 ) THE said Bank formerly used to be managed by its Chairman and the board of Directors, but for the past several years it is being managed by an executive. Officer, appointed by the respondent No 2, the Registrar of Co operative societies. West Bengal and the Board of Directors of the said Bank has since been superseded. ( 3 ) THE respondent Bank inter alia advances long term loans to its members upon mortgage or creation of charge on immovable properties under several and different schemes envisaged by the said Bank, that is, rearing of piggery, sinking of shallow tubewell with pumps for irrigation of agricultural land, for establishment of small village based Cottage Industries etc. ( 4 ) FOR preparation of each mortgage or charge deeds, the Bank requires the services of Deed writers, Bond copyists and writers. ( 5 ) THE said Deed writers (Moharrars), Bond Copyists and writers as aforesaid, require considerable experience regarding understanding of purchase of lands, J. L. R. O. Certificates, prior mortgage deeds, if any, Rent Receipts possessory titles, economic viability of the Projects etc. ( 6 ) THE petitioners in the instant writ petition are working as Deed writers and Bond copyists and Writers for the respondent Band since 1968 onwards and they have already put in 8 to 18 years of service. Most of them are graduates of a recognised University of West Bengal and have acquired considerable efficiency and expertise in their work. ( 7 ) PRIOR to January 13,1986 the petitioners Deed writers (Mohrars) used to be paid Rs. 10/- per deed at piece rate by the members of the said Bank seeking loan and the Bond copyists and writers used to be paid Rs. 10/- for each bond and/or deed at piece rate by the respondent Bank. ( 8 ) ALTHOUGH the work done by the petitioners is perennial in nature covering a period of more than 240 days ia a year, they have no security of employment or benefits available to the other employees of the Bank.
10/- for each bond and/or deed at piece rate by the respondent Bank. ( 8 ) ALTHOUGH the work done by the petitioners is perennial in nature covering a period of more than 240 days ia a year, they have no security of employment or benefits available to the other employees of the Bank. ( 9 ) THE petitioners consequently, have been appealing to the concerned authorities of the Bank to absorb them in the employment of the said Bank so that the petitioners might have some security of an employment and consequential benefits as enjoyed by other employees of the Bank. ( 10 ) BY Memo No. 1700 Emp/3c-26/78, dated August 3, 1979, the Chief secretary to the Government of West Bengal inter alia directed all Government agencies and/or Departments including the respondent Bank that casual and such other categories of workers who have been engaged in a perennial type of work for a continuous period of more than three years may be absorbed in the regular establishments as on temporary basis in the existing vacancies and if suitable vacancies are not available, to create such vacancies for the purpose of absorption of such categories of workers in consultation with the Finance department of the Government (Annexure 'a' ). ( 11 ) BY Memo No, 1114, dated January 27, 1982 the Special Officer and ex-Officio Additional Registrar of Co-operative Societies forwarded a copy of the said Memo No. 1700 Emp. , dated 3-8-79 to the Executive Officers of all the Co-operative Banks including the respondent-Bank (Annexure 'c' ). ( 12 ) PURSUANT to the said Memo dated January 27, 1982 the Tamluk Cooperative land Development Bank absorbed six Contract Moharars as Field moharars in their regular establishment. However, the respondent Bank refused to implement the Memorandum No, 1700 Emp. dated 3-8-79 in spite of numerous appeals and requests. ( 13 ) BUT on January 13,1986 the respondent-Bank in partial implementation of the said Scheme decided to fix the monthly wages of the petitioners at Rs. 350/- (consolidated) with Rs. 100/- per month as travelling allowance (Annexure 'f' ).
dated 3-8-79 in spite of numerous appeals and requests. ( 13 ) BUT on January 13,1986 the respondent-Bank in partial implementation of the said Scheme decided to fix the monthly wages of the petitioners at Rs. 350/- (consolidated) with Rs. 100/- per month as travelling allowance (Annexure 'f' ). ( 14 ) THE petitioners accepted the said offer and joined their respective duties on the verbal understanding of the Executive Officer of the Bank that though the order appointing them would remain effective till June 1986, the petitioners will be gradually absorbed in the regular pay scale of the Bank with admissible allowances in implementation of Memo No. 1700 Emp. dated 3-8-79. ( 15 ) HOWEVER, inspite of such specific understanding, the Executive Officer of the Bank by a Memo dated 29-5-86 whimsically, must arbitrarily and unlawfully purported to discontinue the employment of the petitioners with immediate effect (Annexure 'g' ). ( 16 ) IT is the said order (Annexure 'g') which the petitioners have challenged in the instant writ petition. ( 17 ) THE claim of the petitioners has been seriously opposed by the respondents nos. 1 and 2 by filing two separate affidavits in opposition. ( 18 ) ACCORDING to the respondents, the Memo No. 1700 Emp dated 3-8-79 has no manner of application to the respondent-Bank since it is a Bank under the Co operative Sector. It is the further case of the respondents that for sanction of loan the Bank does not require any help from outsiders including the petitioners. As a matter of fact, the petitioners are outsiders having no link or connection with the management of the Bank and the Executive Officer. They are neither regular employees of the Bank nor are they paid from the public exchequer and they are also not governed by the West Bengal Service rules. I hey are paid by the loanee and are self-employed persons and consequently no question of their being absorbed in the regular establishment of the bank actually arises. ( 19 ) BY a Memo/order dated 31-1-86 the Deed writers and Bond writers were allotted jobs for indoor as well as outdoor work on a fixed remuneration of Rs. 350/- per month and Rs. 100/- as travelling allowance. Similar appointent was also given to the Bond writers.
( 19 ) BY a Memo/order dated 31-1-86 the Deed writers and Bond writers were allotted jobs for indoor as well as outdoor work on a fixed remuneration of Rs. 350/- per month and Rs. 100/- as travelling allowance. Similar appointent was also given to the Bond writers. But the said appointments were given purely on a contract basis and not on regular basis and was for a fixed term upto the month of June, 1986. As a matter of fact, no appointment letters were issued to the petitioners by the Bank. On the expiry of the period of contract the services of the petitioners were automatically terminated. ( 20 ) THE respondents have also challenged the maintainability of the instant writ petition on the ground that the respondent-Bank is not an agency or an instrumentality of the State within the meaning of Article 12 of the constitution of India. ( 21 ) NOW, since the question regarding the maintainability of the writ petition is a very vital question touching the root of the matter, it may be useful at the outset to consider whether the respondent-Bank is an agency or instrumentality of the State within the meaning of Article 12 of the Constitution. If the question is in the negative there will be no other alternative but to reject the writ petition on the ground that it is not maintainable in law. ( 22 ) AS already seen, the respondent-Bank, namely the Midnapore Cooperative land Development Bank Ltd. is a Bank in the Co-operative Sector constituted under the West Bengal Co-operative Societies Act and/or Rules framed thereunder. The object of the Bank as it will appear from the bye-laws is to create funds for lending out to its members against mortgage of their immovable properties and particularly agricultural lands. The State of West bengal as one of the partners is the holder of 25,000 redeemble shares of the value of Rs. 100/- each. The nominal share capital of the Bank is Rs. 45,00,000/- (forty-five lac) divided into 99500 ordinary shares of the value of rs. 20/- and 200 preference shares of the value of Rs. 50/- each. ( 23 ) MR.
100/- each. The nominal share capital of the Bank is Rs. 45,00,000/- (forty-five lac) divided into 99500 ordinary shares of the value of rs. 20/- and 200 preference shares of the value of Rs. 50/- each. ( 23 ) MR. Lala, the learned Counsel representing the petitioners, contended that since the State of West Bengal is the major contributor of the fund of the bank, it should be presumed that the respondent Bank is an agency or instrumentality of the State. He also contended that the State Government has a pervasive control over the functioning of the Bank. In support thereof he also referred to the Memorandum No. 1114 (24) dated January 27, 1982 of the special Officer and Ex Officio Additional Registrar of Co-operative Societies, west Bengal addressed to the Executive Officer/manager of the different co-operative Land Development Banks forwarding a copy of the Memo No. 1700-Emp, dated 3-8-79 and another Memo of the Labour Department, directing their implementation (Annexure 'a' to the petitioners affidavit-in-reply ). Mr. Lala specifically pointed out that a copy of the said Memo was forwarded to the Chairman of the respondent-Bank. ( 24 ) IN Ramana Dayaram Shetty v. International Airport Authority of India, [ air 1979 SC 1628 ], it was pointed out by the Supreme Court that "a corporation may be created in one or two ways. It may be either established by statute or incorporated under a law such as the Companies Act, 1956 or the Societies registration Act, 1963. Where a corporatioa is wholly controlled by government not only in its policy making but also in carrying out the function entrusted to it by the law establishing it or by the charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of government". ( 25 ) THE matter came up for further consideration before the Supreme court in Tekraj Vasandi v. Union of India and others, [ (1988) 1 SCC 236 ]. ( 26 ) IN the said case the Supreme Court considered all the relevant decisions of the Court on the point.
( 25 ) THE matter came up for further consideration before the Supreme court in Tekraj Vasandi v. Union of India and others, [ (1988) 1 SCC 236 ]. ( 26 ) IN the said case the Supreme Court considered all the relevant decisions of the Court on the point. Reliance was placed mainly upon the decisions in the International Airport Authority's case (supra) and the relevant tests for determining whether a corporation is an agency or instrumentality of the State, were culled out from the said decision as follows : (1) One thing is clear that if the entire share capital of the corporation is held by government, it would go a long way towards indicating that the corporation is an instrumentality or agency of government. (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of t e corporation, it would afford some indication of the corporation being impregnated with governmental character. (3) It may also be a relevant factor whether the corporation enjoys monopoly status which is State conferred or State protected. (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (5) If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of government. (6) "specifically, if a department of government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of government. ( 27 ) APPLYING the aforesaid tests in the instant cafe, it is found that the entire share capital of the corporation (respondent i'ank) is not held by the government though the Government holds the majority of the shares. ( 28 ) IT cannot also be said that the financial assistance tendered by the state is sufficient to meet the entire expenditure of the corporation. There also does not appear to be the existence of any deep and pervasive State control. The other conditions also are cot fulfilled. ( 29 ) COMING to the facts of Tekraj Vasandi's case (supra), the annual contribution from the Government was found to be substantial so much so, that it constituted the main source of funding.
There also does not appear to be the existence of any deep and pervasive State control. The other conditions also are cot fulfilled. ( 29 ) COMING to the facts of Tekraj Vasandi's case (supra), the annual contribution from the Government was found to be substantial so much so, that it constituted the main source of funding. Regarding the pervasive control cf the Government over the corporation (ICPS), it appeared that the minister of Law tried to exercise his authority as the controlling Department of government in the matter of making grants. There were also other relevant factors to which the attention of the Supreme Court was drawn on behalf of the appellants, namely, that the President of India, had inaugurated the Society; the Speaker ot the Loksabha was its first President and three ministers, a former Chief Justice of India and the Former Attorney General joined AS its Vice President; some public officers were also associated in the administrative set up of the Society, but even then it was held by the Supreme court that the Society/corporation was neither an agency or instrumentality of the State within the meaning of Article 12 of the Constitution. ( 30 ) IN the instant case though the State funding is substantial, it can not be said that the contribution made by the State is the mam source of funding. As a matter of fact, substantial amount of money comes from other sources. ( 31 ) AS regards the alleged pervasive control of the Government, the simple fact that the Government ftom time to time have been issuing instructions to tke Bank, does not establish the fact of such pervasive control. As a matter of fact the respondent Bank in spite of such communications did not consider it necessary to comply with the relevant Government Memo No. 1700 Emp, dated 3-8-1979. This shows that though the Government has been trying to exercise control over the Bank, such control is not at all effective.
As a matter of fact the respondent Bank in spite of such communications did not consider it necessary to comply with the relevant Government Memo No. 1700 Emp, dated 3-8-1979. This shows that though the Government has been trying to exercise control over the Bank, such control is not at all effective. ( 32 ) IT appears that the management of the Bank is run by the Managing committee and the Executive Officer appointed by the Bank does not exercise any power of the said Managing Committee, as it will clearly appear from the letter of the Executive Officer dated 30-10-1987 addressed to the Secretary of the Midnapore Co-operative Land Development Bank Employees Association (Annexure 'a' to the affidavit-in-reply of the petitioner), ( 33 ) IT also appears that the main function cf the Bank is to advance loans to its members and it cannot be said that the Bank is thereby discharging governmental functions. ( 34 ) CONSIDERING the facts and circumstances above, I am not inclined to hold in agreement with Mr. Lala, the learned Counsel for the petitioners, that the respondent-Bank is an agency or instrumentality of the State within the meaning of Article 12 of the Constitution and this makes the instant writ petition not maintainable in law. ( 35 ) HOWEVER, assuming for the time being that the writ petition is maintainable in law, it may be considered whether the petitioners are entitled to the benefit of the Government Memo No. 1700, dated 3-8-79. By the said Memo (Annexure 'a' to the writ petition) the Deputy Secretary to the Government of West Bengal laid down the principles to be followed in the matter of absorption of casual and other categories of workers under the State Government. But significantly, there is nothing dependable to show that the petitioners were ever employed by the respondent-Bank either as casual workers or in any other capacity barring isolated instance of contractual appointment for a period of six months from January to June, 1986. ( 36 ) THE petitioners are Deed writers (Moharars) and Bond writers and as stated in paragraphs 11 and 12 of the writ petition, the Deed writers (Moharars) used to be paid Rs. 10/- per deed at piece rate by the members of the respondent-Bank seeking loan and the Bond Copyists and Writers used to be paid Rs.
( 36 ) THE petitioners are Deed writers (Moharars) and Bond writers and as stated in paragraphs 11 and 12 of the writ petition, the Deed writers (Moharars) used to be paid Rs. 10/- per deed at piece rate by the members of the respondent-Bank seeking loan and the Bond Copyists and Writers used to be paid Rs. 10/- for each bond and/or deed at one piece rate by the said Bank. ( 37 ) EVIDENCE, however, is absolutely lacking as to whether the Bond copyists and Writers used to be paid their remuneration out of the public exchequer. On the other hand, the case of the respondents is that they used to be paid Rs. 10/- for each Bond and/or Deed out of the money realised from the members. ( 38 ) IT seems that the services of the petitioners are utilised by the members of the Bank for writing out deeds, bonds etc. for raising loans from the Bank and in that sense the petitioners appear to be nothing but self employed persons earning their living by writing out bonds, deeds etc. for the prospective loanee members of the Bank. ( 39 ) IN fact, the petitioners have not endeavoured to produce any document to show that they were ever employed as casual workers by the Bank prior to January, 1986 and were paid out of the funds of the Bank. ( 40 ) MR. Lala, the learned Counsel representing the petitioners, in this connection referred to certain correspondence for the purpose of showing that the petitioners are not total outsiders and self employed persons as sought to be proved by the respondents. But, unfortunately, from none of the said correspondence annexed to the affidavit-in-reply as well as the supplementary affidavit it can be ascertained whether the petitioners were ever employed by the respondent-Bank even on casual basis. ( 41 ) IT is true that the petitioners were given festival advances from time to time recoverable in monthly instalments but from that alone it cannot be inferred that they were given such advances as employees of the Bank.
( 41 ) IT is true that the petitioners were given festival advances from time to time recoverable in monthly instalments but from that alone it cannot be inferred that they were given such advances as employees of the Bank. ( 42 ) IT is quite likely that in view of the nature of the job performed by the petitioners they have established close links with the Bank authorities and possibly out of sympathetic consideration for them the Bank had been giving the festival advances to meet their demands during the festive occasions. ( 43 ) IT seems to be apparently clear that the petitioners in view of such close bnks with the respondent-Bank, are now trying to take advantage of the Government Memo No. 1700 Emp dated 3-8-1979 by trying to establish them as casual workers of the said Bank performing duties of a perennial nature. ( 44 ) THE Executive Officer of the Bank, as it appears, has been trying earnestly to create some opportunities for the petitioners so that they might be absorbed in the regular establishment of the Back and it was he who was instrumental in giving contractual appointments to the petitioners for a period of six months from January to June, 1986 (Annexure 'f to the writ petition ). It was, however, made clear that the employment so given to the petitioners was purely contractual in nature and not regular employment. The petitioners having agreed to accept the terms contained in Annexure 'f' they were given such employments which were discontinued with effect from 39-5-86 (Vide annexure 'g' to the writ petition ). ( 45 ) THUS, firstly, the instant writ petition is not maintainable since the respondent-Bank is neither an agency instrumentality of the State within the meaning of Article 12 of the Constitution. And then even assuming that the writ petition is maintainable, the petitioners have failed to establish that they are entitled to the benefit of the Government Memo. No. 1700-Emp, dated 3-8-1979. ( 46 ) IN the above view of the matter, the petitioners are not entitled to the relief as prayed for. ( 47 ) THE writ petition is, accordingly, dismissed without any order for cost. Petition dismissed.