Ajay Kumar Mishra v. Registrar, Co-operative Societies, Bihar, Patna
1994-02-17
AFTAB ALAM
body1994
DigiLaw.ai
JUDGMENT Aftab Alam, J. There are thirteen petitioners in C.W.J.C. No. 4267 of 1993, two in C.W.J.C. No. 4060 of 1993 and five in C.W.J.C. No. 1782 of 1993; they all challenge the same orders on the same grounds. Hence, these applications have been heard together and are being disposed of by this judgment. The three writ applications are similar in all material aspects excepting that the Impugned orders have been assigned different annexure numbers in the three applications; for the sake of convenience I have before me the records of C.W.J.C. No. 4267 of 1993 for the purpose of writing this judgment. The facts from the other two cases would be adverted to as and when the need arises. 2. The petitioners in all the three writ applications are aggrieved by an order, dated November, 4, 1991, passed by the Registrar, Co-operative Societies, Bihar, Patna wherein, following an enquiry, it was held that the appointments of all the petitioners (in all the three cases) in the Central Co-operative Bank, Arrah, was made on an irregular basis. In consequence of this finding, the Registrar, in the aforesaid order, gave a direction to the Managing Director of the Bank to terminate all the ad hoc and irregular appointments and to fill up the resultant vacancies afresh in accordance with law. A true copy of this order is to be found at Annexure-2 in C.W.J.C. No.4267 of 1993; a copy of the same order is at Annexure-4 in C.W.J.C. No. 7782 of 1993 and at Annexure-1 in C.W.J.C. No. 4060 of 1993. The writ application in hand (C.W.J.C. No. 4267 of 1993) was originally filed assailing the aforesaid order of the Registrar. During the pendency of the writ petition, the Managing Director of the Bank following the Registrar's direction in the order, dated 04.11.91, terminated the services of 26 persons (including the twenty petitioners in these three cases} vide his order contained in memo no. 507, dated 06.07.93. This order also comes under challenge and has been brought on the record as Annexure-6 to an amendment petition filed in this case. Its copies are at Annexures 7 and 15 respectively on the records of C.W.J.C. Nos. 7782 and 4060 of 1993. 3. Before proceeding to narrate the facts it may be noted that the fate of these applications would primarily depend upon the challenge to the Registrar's order, dated 04.11.91.
Its copies are at Annexures 7 and 15 respectively on the records of C.W.J.C. Nos. 7782 and 4060 of 1993. 3. Before proceeding to narrate the facts it may be noted that the fate of these applications would primarily depend upon the challenge to the Registrar's order, dated 04.11.91. The order of the Managing Director of the Bank is merely consequential and its survival will depend upon the decision regarding the validity of the direction given to him by the Registrar. 4. The brief facts for the appreciation of the controversy are as follows : It is stated that the staff selection committee of the Bank in its meeting, dated 10.02.87, took a decision for the appointment of ten petitioners in C.W.J.C. No. 4267 of 1993 on different posts on a consolidated monthly salary. Again on 27.12.87 three more petitioners were appointed by the selection committee on the posts of Assistant Accountant in the pay scale of Rs. 730 to 1030/-. The petitioners in C.W.J. C. Nos. 4060 and 7782 of 1993 were similarly appointed on the basis of the recommendations of the staff selection committee on different posts on a consolidated monthly salary. It may be stated at this stage that in addition to the petitioners a number of other persons were also appointed on the recommendations of the staff selection committee on different posts and for different jobs. It is further stated that on 28.12.87 the Board of Directors of the Bank in terms of Clause 37 (VIII) of the Bank's bye-laws regularised the services of a number of employees (including the petitioners in the three writ applications). However, several other employees were left out from the Board of Directors' resolution, dated 28.12.87, and the services of those employees were either terminated or were left without regularisation. Herein lay the seeds and the genesis of the controversy which has come to this Court repeatedly and is finally before me' in this batch of applications. 5. A number of persons whose services were either not regularised or whose services were terminated appear to have first made a representation before the Managing Director of the Bank making a grievance of discriminatory treatment and alleging that the services of persons junior to them were regularised.
5. A number of persons whose services were either not regularised or whose services were terminated appear to have first made a representation before the Managing Director of the Bank making a grievance of discriminatory treatment and alleging that the services of persons junior to them were regularised. When no favourable order was passed by the Managing Director on their representation, some of them came to this Court in C.W.J.C. No. 8565 of 1989 (Om Prakash Sinha & Ors. Vs. The State of Bihar & Ors.). That writ petition was disposed of by order, dated 15.12.89, at the stage of admission itself. In that order this Court declined to give any specific directions in their favour but observed that it was expected that the representation filed by them would be considered and disposed of in accordance with law at an early date. It appears that in the meanwhile the Bank had forwarded the representation filed by the aggrieved employees to the Joint Registrar, Co-operative Societies, Patna Division, who had held some enquiry into the matter and had submitted his report to the Registrar, Co-operative Societies. 6. Another batch of Bank employees who were similarly aggrieved by the regularisation of the services of the petitioners also came to this Court in another writ application being C.W.J.C. No. 7172 of 1990 (Ajay Kant Upadhya & Ors. vs. Central Co-operative Bank Ltd. & Ors.). This application was also disposed of at the stage of admission itself. It appears that in that case it was brought to the notice of the Court that the same controversy was pending before the Registrar, Cooperative Societies and a report in the matter had been submitted to him by the Joing Registrar following the representation of the other batch of the aggrieved employees. The Court was further told that despite the Joint Registrar's report no action was being taken in the matter by the Registrar. This Court, accordingly, issued the following direction to the Registrar : "We, therefore, direct the Registrar, Co-operative Societies to dispose of their cases and pass a reasoned order in respect of the grievances of the petitioners that although they are senior to the juniors who have been regularised, their cases have not been considered.
This Court, accordingly, issued the following direction to the Registrar : "We, therefore, direct the Registrar, Co-operative Societies to dispose of their cases and pass a reasoned order in respect of the grievances of the petitioners that although they are senior to the juniors who have been regularised, their cases have not been considered. The matter shall be finally disposed of by the Registrar, Co-operative Societies within a period of 8 weeks from the date of receipt of a copy of this order." 7. It was on the basis of the aforesaid direction that the Registrar passed the impugned order, dated 04.11.92. Going slightly back in the narration of facts it appears that the Joint Registrar, Patna Division submitted a report, dated 30.09.91 before the Registrar. A copy of this report is to be found at Annexure-1. I n this report the Joint Registrar came to the conclusion that all the appointments were irregular as these were made not by the committee appointed by the Registrar but by the staff selection committee of the Bank and moreover, the appointments were made without making any advertisement etc. He accordingly suggested that either the aggrieved employees should also be regularised along with the petitioners or the services of all concerned,• including the petitioners, should be terminated and the resultant vacancies may be filled up afresh in accordance with rules. The Registrar on a consideration of the report agreed that the' appointments were irregular in nature. In this regard he observed that the appointments were made without following any established procedure. He further observed that rules demanded that all appointments either ad hoc or regular should be preceded by an open advertisement laying down the terms and conditions of service as also the minimum required qualifications and experience etc. for the posts; the applications received in pursuance of the advertisement should be subjected to a selection process such as an interview or" a written examination in which the respective merits of the candidates may be assessed. He also said in this order that deviations from the established process led to the appointments of a few favoured and selected persons and an ordinary person never got a chance to be considered for appointment.
He also said in this order that deviations from the established process led to the appointments of a few favoured and selected persons and an ordinary person never got a chance to be considered for appointment. He, accordingly, directed the Managing Director of the Bank to terminate all ad hoc and irregular appointments as mentioned in the Joint Registrar's report, dated 30.09.91, and to fill up the vacancies in accordance with law. 8. Following this order of the Registrar, the Managing Director of the Bank issued the order, dated 06.07.93, terminating the services of 26 persons named therein. These two orders come under challenge in these applications. 9. At this stage it will be proper to take into account a petition for intervention filed on behalf of some persons, who had earlier come to this Court in C.W.J.C. No. 8165 of 1989 (Om Prakash Sinha & Ors. Vs. The State of Bihar & Ors.). It appears that after the impugned order, dated 04.11.91, was passed by the Registrar and Managing Director of the Bank was yet to pass the consequential order, the same batch of persons once again came to this Court in C.W.J.C. No. 5469 of 1990 making a grievance that the Managing Director of the Bank was not following the direction of the Registrar, Co-operative Societies and was sitting idle over the matter. The application was disposed of by order, dated 16.12.92, recording the statement made by the counsel for the Bank that the necessary order in compliance with the Registrar's direction would be passed within a period of six months from the date of receipt/production of a copy of the court's order. Thereafter the order, dated 06.09.93, was passed by the Managing Director terminating the services of 26 persons which comes under challenge in this application. Again in this application the same batch of persons (Om Prakash Sinha & Ors.) have filed an intervention petition on 11.08.93 to resist the reliefs claimed by the petitioners. In the intervention petition filed on behalf of Om Prakash & Ors., the proposed intervenors said everything but they did not mention the fact that they had come yet again to this Court in C.WJ.C. No. 1319 of 1993.
In the intervention petition filed on behalf of Om Prakash & Ors., the proposed intervenors said everything but they did not mention the fact that they had come yet again to this Court in C.WJ.C. No. 1319 of 1993. In C.WJ.C. No. 1319 of 1993 they made a grievance that following the direction contained in the Registrar's order, dated 04.11.91, the Bank had stopped taking work from them as well and sought a direction commanding the Bank to restore them to their respective posts. This application was dismissed by order, dated 12.01.94, taking into account the statement made on behalf of the counsel for the Bank that following the Registrar's direction the services of all persons had been terminated. This Court, thus, upheld the order of termination of service of the proposed intervenors. It is stated on behalf of the proposed intervenors that their writ petition (C. WJ. C. No. 1319 of 1993) was dismissed by order, dated 12.01.94, whereas the intervention petition in this case was filed by them much earlier on 11.08.93 and, hence, there was no reference of C.WJ.C. No. 1319 of 1993 in the intervention petition. I find the explanation hardly satisfactory. The intervention petition filed in this case should at least have mentioned about the filing/pendency of C.WJ.C. No. 1319 of 1993. At any rate the dismissal of C.WJ.C. No. 1319 of 1993 was a fact having a direct bearing on this case and it was incumbent upon the proposed intervenors to bring this fact to the notice of the Bench hearing this case by filing a supplementary petition etc. They, however, chose not to disclose this fact in this case and it was brought to my notice by Mr. Bose, learned counsel appearing on behalf of the Bank. 10. Mr. Bose further submitted that there was no substance in the grievance of the proposed intervenors that the Bank had committed any adverse discrimination against them by regularising the services of the petitioners overlooking their claims. It is pointed out that the proposed intervenors were appointed for the specified job of loan collection for a specified period and it was also stipulated in their appointment letters that their services would be automatically over with the end of the period of loan collection.
It is pointed out that the proposed intervenors were appointed for the specified job of loan collection for a specified period and it was also stipulated in their appointment letters that their services would be automatically over with the end of the period of loan collection. On behalf of the proposed intervenors a supplementary affidavit has been filed to bring on record a copy of an appointment letter purportedly issued in favour of Om Prakash (proposed intervenor no. 1) to show that the terms of his appointment were similar to the petitioners in this batch of cases. In response to this supplementary affidavit the Bank has filed a reply affidavit stating that the enclosed appointment letter of Shri Om Prakash Sinha was forged and fabricated. It is further stated that in the Bank's records there was no such appointment letter issued to Shri Om Prakash. In the Bank's affidavit, a copy of the original appointment letter to the aforesaid Om Prakash has been annexed as part of Annexure-B series. From this appointment letter it is manifest that he was appointed for the loan collection work and his appointment was to come to an automatic end with the close of the loan collection period. 11. In view of the facts and circumstances as stated above I am not inclined to entertain the intervention petition on behalf of the aforesaid Om Prakash and others and it is, accordingly, rejected. 12. Now coming back to the merits of this case, Mr. Rana Pratap Singh, learned counsel for the petitioners, submitted that the impugned direction given by the Registrar, Co-operative Societies was patently without jurisdiction and the Registrar had no authority to issue any such direction to the Managing Director of the Bank. With reference to clause 48 of the bye-laws of the Bank, learned counsel submitted that in case the Registrar was of the opinion that any resolution of the Board of Directors was contrary to the provisions of the Act or the Rules he was empowered to rescind or cancel the resolution (after giving a hearing to the parties concerned) within four weeks from the date on which the Board's proceedings in question was received by him.
It was pointed out that in this case the Board's resolution in question was dated 28.12.87 and, therefore, it was no longer open to the Registrar in 1991 to hold the regularisation of services, in terms of the resolution, irregular and to issue direction for the termination of the appointments. 13. I do not see any substance in this objection and in my opinion the Registrar manifestly derived his authority from the direction issued by this Court. As noted above, this Court by order, dated 12.07.91, passed in CW.J.C. No. 7172 of 1990 had directed the Registrar, in no uncertain terms, to look into the grievances of the petitioners in that case and to dispose of their cases by a reasoned order. Following the order of this Court the Registrar passed the impugned order and it can cartainly not be held bad for want of any authority or jurisdiction. 14. Coming now to the merits of this case, Mr. Rana Pratap Singh, learned counsel for the petitioners, submitted that the Registrar committed a serious error in char acterising the petitioners' appointments as irregular and that too without affording an opportunity of hearing to the petitioners. Learned counsel submitted that the Registrar had not cited any specific statutory provision either from the Act or the Rules for the violation or infringement of which the appointments could be held irregular. It was pointed that the Registrar had said that the appointments were bad simply because they were not made on the basis of an advertisement and a selection process. Mr. Singh submitted that the petitioners' appointment, made in 1987, could not be held to be bad simply for want of an advertisement and a selection process. 15. Before proceeding to examine the validity of the reasons assigned by the Registrar for holding the appointments irregular it would be important to bear in mind the differences in the legal positions prevailing before and after the Bihar & Orissa Co-operative Societies Act underwent large scale and fundamental amendments in the year 1989r It is true that after the 1989 amendments which completely changed the face of the Act, a certain class of societies qualify as 'State' within the meaning of Article 12 of the Constitution and their actions are, therefore, required to be in accord with the constitutional guarantees of reasonableness and equality etc.
It is equally well established, however, that before the 1989 amendments a society registered under the Co-operative Societies Act was held not to be State within the meaning of Article 12 and, hence, the rights guaranteed under Articles 14 and 16 of the Constitution were held to be not enforceble against it. It may also be remembered that before the 1989 amendments the Governmental control over the societies was of a limited extent and was not as comprehensive as it became as a result of the amendments. Finally it should be borne in mind that the petitioners' appointments were made in 1987 when the amendments were yet to come and the respondent Bank, a society registered under the Co-operative Societies. Act was not a State and, hence, its actions were not amenable to test on the touch-stone of Articles 14 and 16 of the Constitution. 16. In the case of Harender Narain Banker VS. The State of Bihar & Ors., 1985 PLJR, 1078, a Bench of this Court had held that the Bihar State Co-operative Marketing Union Ltd. was in no way an instrumentality or agency of the State and, therefore, it was not amenable to the writ jurisdiction under Article 226 of the Constitution. 17. In a more recent decision in the case of Bihar State Co-operative Marketing Union Ltd. VS. The State of Bihar & Ors., 1991 (1) PLJR, 333, it was held vide paragraphs 5 and 6 as follows : "5. It is difficult to uphold the contention so urged on behalf of the petitioner. The question of invoking Articles 14 and 16 of the Constitution of India will arise only if it is held that Biscomaun is 'State' within the meaning of Article 12 of the Constitution of India. So far as this Court is concerned, the question is not res integra, and is concluded by a binding precedent of this Court in the case of Harendra Narain Banker vs. State of Bihar ( 1985 PLJR 1078 ). In that case the question squarely arose for consideration by the Court whether the Bihar State Cooperative Marketing Union Ltd., a society registered under the Bihar and Orissa Co-operative Societies Act, 1935 is in essence, an instrumentality or agency of the State and, consequently, amenable to the writ jurisdiction of the High Court.
In that case the question squarely arose for consideration by the Court whether the Bihar State Cooperative Marketing Union Ltd., a society registered under the Bihar and Orissa Co-operative Societies Act, 1935 is in essence, an instrumentality or agency of the State and, consequently, amenable to the writ jurisdiction of the High Court. After exhaustive consideration of the case law on the subject a Division Bench of this Court held that Biscomaun is in no wayan instrumentality or agency of the State. It is a Co-operative Society registered under the Bihar and Orissa Co-operative Societies Act, 1935, and it followed inevitably that it was not amenable to writ jurisdiction under Article 226 of the Constitution of India. 6. In view of the aforesaid decision of this Court the first limb of the argument must be rejected, since the question of applicability of Articles 14 and 16 of the Constitution will not apply in the instant case. At the time when the appointment was made, Biscomaun was a registered Co-operative Society, being managed by its Managing Committee consisting of Board of Directors, Managing Director and the Chairman and was, therefore, not State within the meaning of Article 12 of the Constitution of India. Its action, therefore, could not be tested on the touchstone of Articles 14 and 16 of the Constitution of India. No doubt, after appointment of an Administrator, the actions of the Administrator can be said to be the actions of the State and his actions must pass the test of fairness and reasonableness. 18. Now coming back to the order of the Registrar it appears that he sought to test the validity of the appointments made in 1987 on the basis of the legal position prevailing at the time of the passing of the order, i.e., after the 1989 amendments in the Act and the rules. He held the appointments irregular because there were no advertisements laying down the minimum required qualifications, experience etc. followed by any selection of candidates on the basis of a written test or interview. Now, in the absence of any statutory provision laying down such a mode of recruitment the requirements insisted upon by the Registrar can only be referable to Articles 14 and 16 of the Constitution.
followed by any selection of candidates on the basis of a written test or interview. Now, in the absence of any statutory provision laying down such a mode of recruitment the requirements insisted upon by the Registrar can only be referable to Articles 14 and 16 of the Constitution. But as noted above the question of invoking of Articles 14 and 16 of the Constitution of India in case of a cooperative society did not arise on the dates when the appointments were made and on the basis of the Co-operative Societies Act as it then stood. The provisions (If Articles 14 and 16 of the Constitution having no application to the appointments in question it would be quite erroneous to hold them bad and irregular for the reasons assigned by the Registrar. 19. This position does not improve by the two counter affidavits filed in this case; one on behalf of the Registrar, Co-operative Societies, respondent no. 1, and the other by the Bank and its officials, respondents 3 to 6. In the counter affidavits it is reiterated that the appointments were invalid for want of an advertisement and a selection process. In addition to what is stated in the impugned order in this regard it is further stated in the counter affidavit that the appointments were made in breach of the mode of recruitment as prescribed under Order no. 8601, dated 21.07.86. Both the counter affidavits placed reliance on the aforesaid order, a copy of which is to be found at Annexure-A in both the counter affidavits. The order, dated 21.07.86, on which strong reliance has been placed is actually an order issued by the Registrar under Rule 33 of the Bihar Co-operative Societies Rules, 1959. I wish to emphasize at this stage that the order in question has not been issued by the State Government in terms of Section 66B of the Act in which sub-section (2) was inserted by the amending Act of 1989 with retrospective effect. The order contained in Annexure-A, on the other hand, has been issued by the Registrar in exercise •of powers under Rule 33 of the Rules. In its first paragraph this order referred to various instructions and directions earlier issued from time to time under Rule 33 and Section 66B of the Act.
The order contained in Annexure-A, on the other hand, has been issued by the Registrar in exercise •of powers under Rule 33 of the Rules. In its first paragraph this order referred to various instructions and directions earlier issued from time to time under Rule 33 and Section 66B of the Act. It then went on to say that on a reconsideration of the entire matter, fresh directions were being issued under Rule 33. Paragraph 5 of this order provided that in matters of appointment and promotion of employees in the Banks the procedures/rules (including those relating to reservation) fixed by the Government shall be followed and for any deviations from the procedure the Board of Directors of the Bank concerned shall be answerable. The order in question also constituted a committee for dealing with the matters relating to appointment and promotion of employees in the Banks. It is stated in the counter affidavit filed on behalf of the Registrar that the petitioners' appointments were bad for breach of the statutory directions contained in this order inasmuch as the appointments were not made by the committee constituted under this order but by the staff selection committee of the Bank. Further, the appointments were made in violation of paragraph 5 of the order because they were not made, as in the case of Government employees, on the basis of an advertisement and a selection process. Now, it is to be noted that the order in question was not issued by the Government under Section 66B of the Act wherein sub-section (2) was inserted in 1989 with retrospective effect. On the other hand, the order in question was issued by the Registrar under Rule 33 of the Bihar Co- operative Societies Rules. Although this rule also underwent an amendment by notification, dated 02.09.89, the amendment has not been made retrospective. Therefore, in order to appreciate the nature of the order contained in Annexure-A it would be necessary to examine Rule 33 as it stood on 21.07.86, the date of the issuance of the order. Rule 33 as it stood at the material time is reproduced below: "33. Appointment of paid employees.
Therefore, in order to appreciate the nature of the order contained in Annexure-A it would be necessary to examine Rule 33 as it stood on 21.07.86, the date of the issuance of the order. Rule 33 as it stood at the material time is reproduced below: "33. Appointment of paid employees. - (1) The appointment of a paid employee in any registered society shall be subject to such conditions as to qualifications, designation, scale of pay and travelling allowances, furnishing of security, compulsory contribution to provident fund, grant of leave, salary increment, transfer, punishment, suspension, removal or dismissal as may from time to time, be determined by the Registrar by general or special order. (2) A registered society aggrieved by any order of the Registrar under sub-rule(1) may within sixty days of the receipt of such order, prefer an appeal against the order to the State Government and the decision of the State Government thereon shall be final." (emphasis added) 20. From the Rule it is manifest that the Registrar by general or special order was empowered to determine conditions relating to qualifications, designation, scale of pay and travelling allowance, furnishing of security, compulsory contribution to provident fund grant of leave, salary increment, transfer, punishment, suspension, removal or dismissal. The Rule did not empower the Registrar to lay down any mode of recruitment or to constitute a committee for selection for appointment. It, therefore, follows that the provisions relating to the mode of recruitment and the constitution of the committee for appointment in Banks as contained in the order, dated 21.07.86, were ultra vires Rule 33 and, hence were invalid and unenforceable. The consequential finding would be that the appointments of the petitioners were not hit by any statutory provisions. I have also found that the provisions of Articles 14 and 16 were not applicable to the Bank at the material time when in 1987 it was not 'State' within the meaning of Article 12 of the Constitution but only a society governed by the provisions of the Act, the rules and the bye-laws. In my considered opinion, therefore, the Registrar's order holding the petitioners' appointments as irregular and directing them 10 be terminated for that reason is wholly unreasonable, arbitrary and unsustainable in law.
In my considered opinion, therefore, the Registrar's order holding the petitioners' appointments as irregular and directing them 10 be terminated for that reason is wholly unreasonable, arbitrary and unsustainable in law. I have, therefore, no option but to interfere in the matter and I hereby do 'so by setting aside the impugned order, dated 04.11.91, passed by the Registrar. As a con-sequence the order, dated 06.07.93, passed by the Managing Director would fall down automatically. 21. In the result, all the three writ applications are allowed and all the petitioners therein are directed to be reinstated. 22. Before parting with this case it may be noted that Mr. Mukhopadhya, who appeared on behalf of the proposed intervenors, submitted that since the proposed intervenors had worked in the Bank for some time they may be given the benefit of past experience as and when the Bank choose to fill up further vacancies. 23. Mr. Bose, learned counsel appearing on behalf of the Bank, has no objection to this prayer and it is, accordingly, expected that for filling up any vacancies in future the proposed intervenor respondents and persons similarly situated would be given some benefit for their past service with the Bank and would also be entitled to relaxation of age to the extent they actually worked in the Bank.