The petition under Article 226 of the Constitution of India has been filed by the petitioner for setting aside the order under No.MCAB/Adm/1174/15 dated 21st June, 1997 and the confirmation order No.MCAB/Adm/1174/98/22 dated 6th June, 1998 passed by the appellate authority whereby the petitioner was removed from the post of General Manager, Mizoram Co-operative Apex Bank Ltd. The petitioner also prayed for a direction to reinstate him to the post held by him with all service benefits. 2. Petitioner's case in brief is that initially he was appointed as Accounts Assistant in the said Bank on 25.3.1982. In due course he was promoted to the post of Accountant, Assistant Manager and eventually to the post of General Manager with effect from 15.10.1987. He was also officiating as Managing Director at the relevant time. On charges of improper sanction of loan of Rs. 38 lakhs to Smti Ruaipuii, Fancy Store, Chanmari, Aizawl, he was placed under suspension from service with effect form 27.7.1990. Charges were framed against him for sanctioning of overdraft of Rs. 38 lakhs to Smti Ruaipuii in violation of rules. A criminal case was also registered against the petitioner at Aizawl Police Station in 1989 under section 409/468/471/477A/109 of IPC. The police on completion of investigation submitted charge sheet against him. The learned Magistrate, 1st Class, Aizawl by order dated 25.11.1991 passed the GR Case No. 1264/89 discharged the petitioner as there was no prima facie case. In the disciplinary proceedings, Shri Lalthanmawia, Director, Food and Civil Supplies, was appointed as Inquiry Officer vide order dated 16.7.1991. The Inquiry officer submitted his report absolving the petitioner as the charges were not proved beyond reasonable doubt. This report was submitted on 17.7.1992 and the respondent authority did not take any decision thereon till 1996. Thereafter, in 1996, Shri Rajendra Kumar, Deputy Commissioner, Aizawl was appointed as Inquiry Officer to cause an inquiry in respect of the same charges afresh. Sri Rajendra Kumar conducted the inquiry against the petitioner de novo and submitted his report on 28.10.1996, In his findings, the Inquiry Officer observed that the petitioner displayed serious negligence, inefficiency and also acted against the interest of the Bank. Thereafter, the petitioner was removed under the Staff Service Rules as amended in 1995 by an order passed on 21.6.1997. Sri Rajendra Kumar conducted the inquiry against the petitioner de novo and submitted his report on 28.10.1996, In his findings, the Inquiry Officer observed that the petitioner displayed serious negligence, inefficiency and also acted against the interest of the Bank. Thereafter, the petitioner was removed under the Staff Service Rules as amended in 1995 by an order passed on 21.6.1997. The petitioner preferred an appeal to the Executive Committee of the Bank under Rule 103 (1) (a) (b) of the Mizoram Co-operative Apex Bank Ltd Staff Service (Amendment) Rules, 1995 against the order of removal. The appeal was dismissed and the order of removal of the petitioner, was confirmed vide order dated 6.6.1998. The petitioner raised grievance that the de novo inquiry conducted by Shri Rajendra Kumar before rejection of the inquiry report submitted by the first Inquiry Officer is voidab initio as it is beyond the settled principles of law that the departmental authority cannot order de novo enquiry. It is further alleged that the order of removal does not reflect which of the two reports formed the basis of his removal. It is also pleaded mat when the petitioner was discharged by the Magistrate for lack of prima facie case, the findings of the Inquiry Officer which is in conflict with the order of the learned Magistrate cannot be sustained. The petitioner also challenged the dismissal order on the ground that the loan of Rs. 38 lakhs was subsequently sanctioned and approved by the Executive Committee and the loanee had executed all the documents necessary for this purpose. 3. The respondents in their affidavits raised the question of maintainability of this writ petition Against the Bank on the ground that it is not a State within the meaning of Article 12 of the Constitution. It is further pleaded that the overdraft facility could not have been given to Smti Raipur without having placed the matter before the Executive Committee of the Bank. It is pleaded that the petitioner have no authority to sanction the overdraft facility to the tune of Rs. 38 lakhs without prior approval of the Executive Committee. Hence, he had violated the procedure with regard to adequate security, guarantee, etc as prescribed. All these formalities were completed by Smti Ruaipuii only after the criminal case was registered against the petitioner. 38 lakhs without prior approval of the Executive Committee. Hence, he had violated the procedure with regard to adequate security, guarantee, etc as prescribed. All these formalities were completed by Smti Ruaipuii only after the criminal case was registered against the petitioner. It is further averred that the inquiry conducted by Shri Lalthanmawia had some legal flaws, and the findings given by him was also not correct for want of proper appreciation of evidence. The report was primarily based on a letter written by respondent No.l on 25.11.1991 to the Officer in-charge of Aizawl Police Station. Therefore, the disciplinary authority was not satisfied with the inquiry report submitted by Shri Lalthanmawia and a fresh inquiry was ordered. Shri Rajendra Kumar, LAS, the then Deputy Commissioner, Aizawl was directed to conduct the enquiry. The Inquiry Officer submitted his report on 28.10.1996 wherein he recorded his findings that the charges framed against the petitioner have been proved. According to the respondents, the appeal preferred by the petitioner was also duly considered and rejected by the appellate authority. 4. The question whether the Mizoram Co-operative Apex Bank Ltd is a State within the meaning of Article 12 has been raised in para-4 of the affidavit-in-opposition. According to the respondents, the Mizoram Co-operative Apex Bank .Ltd is registered under the Assam Co-operative Societies Act, 1949 extended to the State of Mizoram, but such registration is not enough to hold that the Bank is a State within the meaning of Article 12 of the Constitution. It is further pleaded that the Bank is neither a statutory body nor a department of the Govt and it has its own Rules and Bye-laws framed by the Bank itself and, as such, no writ would lie against the Bank under Article 226 of the Constitution. 5. In reply to the affidavit-in-opposition, the petitioner reiterating what is stated in the writ petition submitted that the Bank is a body constituted by the State Govt and is operating exclusively under the control of the State Govt and discharging the functions essentially governmental in nature. Therefore, a petition under Article 226 of the Constitution would lie. 6. From the pleadings above, it would appear that the question whether Mizoram Co-operative Apex Bank Ltd is a State within the meaning of Article 12 of the Constitution is required to be disposed of first. Therefore, a petition under Article 226 of the Constitution would lie. 6. From the pleadings above, it would appear that the question whether Mizoram Co-operative Apex Bank Ltd is a State within the meaning of Article 12 of the Constitution is required to be disposed of first. The necessity to have a discussion on merits of the case will rest on the answer to the above question. 7. The Bye-laws of the Mizoram Co-operative Apex Bank Ltd show that it is a registered society under the Assam Co-operative Societies Act, 1949 and established for the purpose of promoting economic interest of the members of the Bank, to grant loan to the co-operative institutions, to issue debentures and various other purposes listed in the clause 3 of the Bye-laws. The provisions relating to share capital, membership, transfer of shares as available in clauses 4, 5 and 6 as they are shown that it intends to promote the financial interest of the member societies and other investors. Clause 15 provides that the Bank will ordinarily obtain fund from share capital, nominal membership fee, deposits in the form of current savings and fixed deposits, other borrowings, admission fees, grants, subsidies and miscellaneous receipts. The State Govt has been given the option to contribute to the share capital of the Bank without any limit. Clause 16 provide the composition of the General Assembly and clause 17 provide for the functions of the General Assembly. Clause 19 shows that the Chairman, Vice Chairman and the Directors of the Board are to be elected by the members. Clause 24 shows hat the management of the Bank shall vest with the Board of Directors composed of 4 representatives from different co-operative societies and 4 nominees of the Govt of whom the Registrar of the Co-operative Societies shall be one. 8. The amendment of the Bye-laws carried out by the State Govt in 1984 show that the Directors and the Members of the Executive Committee are to be nominated by the State Govt The clause 24 (b)'after amendment reads as follows: "Notwithstanding anything contained in the Bye-laws the Board of Directors and the Executive Committee shall be nominated by the Govt of Mizoram and shall hold office until such time as the Govt permits holding of the meeting of the General Assembly Until then, the Board of Directors shall have full powers' of the General Assembly." 9. After the aforesaid amendment, it has been alleged in the reply to the affidavit-in-opposition that the Board and the Executive Committee are being constituted by the State Govt. The notifications dated 31.10. 1985, 30.11.1990, 19.4.1995, 21.1.1997 and 31.5.1999 (annexed with the reply) also show that the State Govt Wave been constituting the Board and! the Executive Committee and also appointing all the important functionaries of the Bank. Clause 16 of the Bye-laws provides for power of the General Assembly and clause 27 defines the various powers of the Board which inter alia includes the powers to-appoint the Executive Committee and to fine financial policies and to trails act any other important business of the Bank: clause 33 deals with constitution of the Executive Committee by the Board of Directors. The Board of Directors has also been authorised to appoint the Managing of Director General Manager and other officers of the Bank. The powers of the State Govt after amendment of the Bye-laws in 1984 to appoint Board of Directors and the Executive Committee have not been disputed. Although the Bank has not been created under any provision of any statute, the powers of the Govt in constituting the Board and the Executive Committee are indicative of the extent of control exercised by the State Govt. Clause 41, shows that Reserve Fund of the Bank will consist of funds received from: various sources including dividends payable to the Govt in excess of 3%. This shows that the Govt of Mizoram is committed to augment the Reserve Fund-of the Bank by contributing the dividends received by excess of 3% also shows that the Govt has been vested with unlimited in the affairs of the Bank in the interest of the Members of the Bank or of the Cooperative Movement in the State The relevant provision is quoted below "This supreme authority of the Government of Mizoram may also be exercised in the absence of any if they deem their intervention to be necessary in the interest of the Members of the Banks or the Co-operative Movement in general. The Government or the duly authorised person may fix the salary. Of any such officer and declare it to be on charge on the Bank”. 10. That; apart, clause 24 reproduced herein before show the Board of Directors shall consist of four nominees of the State Govt including the(Registrar of the Co-operative Societies. The Government or the duly authorised person may fix the salary. Of any such officer and declare it to be on charge on the Bank”. 10. That; apart, clause 24 reproduced herein before show the Board of Directors shall consist of four nominees of the State Govt including the(Registrar of the Co-operative Societies. The State Govt is also vested with powers to nominate the Board of Directory and Executive Committee and this the Govt is doing since 1984. Clause 42 provides that Bye-laws may be amended by a two third majority of members subject to the Rules made by the Govt and such-amendment shall take effect only after the: Registrar, of the Co-operative Societies approves of the same. It further provides that-any dispute touching the/ business of the Bank shall be referred to Registrar who shall dispose of the same in accordance with the procedure prescribed under the said Act and the Rules framed there under as well Clause 45 provides that the Govt also prescribe Rules in respect of the powers delegated to the Board of Directors, Executive Committee or to any officer and the Rules so framed have to be followed by the Bank authorities. The most important feature available in clause 46 is that the Bank may be liquidated only by an order of the Govt and any other authority as may be competent. 11. The above provisions of the Bye-laws are suggestive of deep and pervasive control exercised by the State Govt over the affairs of the Bank. It is a fact that the Mizoram Co-operative Apex Bank Ltd was registered under the Assam Cooperative Societies Act, 1949 as was in force in the State of Mizoram and that it was not created or established under the provisions of any statute. The Assam Act of 1949 was repelled by the Mizoram Co-operative Societies Act, 1991 and sections 96 and 107 of the Mizoram Act make it clear that after coming into force of the Mizoram Act provisions made there under shall govern the affairs of the Bank. The provisions of Assam Act as well as Mizoram Act and the Bye-laws of the Bank show that the Registrar of the Co-operative Societies has also been entrusted with the powers to regulate, the affairs of the Bank in various ways. 12. The provisions of Assam Act as well as Mizoram Act and the Bye-laws of the Bank show that the Registrar of the Co-operative Societies has also been entrusted with the powers to regulate, the affairs of the Bank in various ways. 12. Besides, it may also been seed that the object of the Bank is primarily to promote the economic interest of the members of the Bank in accordance with the principles of Co-operative movement; Clause 36 also shows that the fund of the Bank shall primarily be utilised for the purpose of granting loans and credit to the Co-operative Societies registered under the Co-operative Societies Act in force in Mizoram, It is, therefore, clear that the Bank was established primarily with the object of advancing the cause of Co-operative Movement in the State of Mizoram. Although the extent of share subscribed to by the State Govt has not been made available before this Court, but from the objectives and the powers vested in the State Govt, there is no room for doubt that the Bank is playing an important rote in the Co-operative Movement of the State which is one of the avowed principles of the State Policy. The Bank is undoubtedly discharging an essential governmental function in the cause of Co-operative Movement in the State. 13. A Division Bench of this Court in Surendra Nath Kalita vs. Assam Co-operative Apex Bank Ltd & others (1989 (1) GLJ 54/Mealt with the status of the Assam Cti-Operative Apex Bank. The Division Bench concluded f that Assam Cooperative Apex Bank was a State within the meaning of the Article 12 of the Constitution. For better appreciation, the observation in para 11 is quoted below: “11. The Division Bench concluded f that Assam Cooperative Apex Bank was a State within the meaning of the Article 12 of the Constitution. For better appreciation, the observation in para 11 is quoted below: “11. Situated thus, from the record of this case, relevant Act, annual reports, Memorandum of Association and Bye-laws, staff rules and the above notification of the Government of Assam dated 22.4.1986, we can safely hold that (1) the State Govt is the chief funding source for financial resources of the Bank; (2) composition of the Administrative Council and the Board of Directors of the Bank is dominated by representatives appointed by the State Government; (3) important rules and regulations for management of Bank and also regulation of me conditions of services of me members of me staff require approval of the State; (4) the Bank has to comply with direction of the State Govt on important matters; (5) the Chief Executive of the Bank, namely, the Managing Director is appointed by the State; (6) the, State Government has got power to reconstitute the Board of Directors as has been done in the year 1986; Thus there is existence of deep add pervasive State control over the respondent-Bank. We have also noted that the respondent Bank gets subsidies on various accounts from the State Govt and also undertakes some activities on instructions of the Govt including part of .the governmental activities such as financing of Go-operative Societies and Co-operative Banks extending cash credit for distribution of essential commodities by co-operative sector and making available loans for agricultural purpose. Applying the tests as indicated above we hold that the respondent Bank namely, the Assam Co-operative Apex Bank Ltd is an instrument­ality of the State and as such amenable to the writ jurisdiction of this Court." 14. In Ajay Hasia's case ( AIR 1981 SC 487 ), the Supreme Court extended the horizon of Article 12 of the Constitution by observing that whether a Corporation was created by a State or not is immaterial for the purpose of determining if such a Corporation is a State within the meaning of Article 12. The Supreme Court was of the view that determination of such a question shall primarily rest on the purpose of which the said Corporation was created. The Supreme Court was of the view that determination of such a question shall primarily rest on the purpose of which the said Corporation was created. Discussing a number of decisions on this point rendered by the Govt including that in International Airport Authority's case ( AIR 1979 SC 1628 ), the Supreme Court suggested that apart from the object for which the Corporation is created, the financial assistance by the State, monopoly status conferred on the Corporation and the extent of control by the State are also relevant factors to be taken into consideration for determining the question. 15. The Division Bench while considering the question of Assam Co-operative Apex Bank relied mainly upon the above decision of the Supreme Court and on the findings recorded in para 11 quoted above, came to the conclusion that Assam Co-operative Apex Bank Ltd is an instrumentality of the State. 16. It is a fact that Mizoram Cooperative Apex Bank Ltd is riot created under any statute. It is a registered society. The extent of share capital held by 'the State has also not been indicated in the instant case by either of the parties. The striking similarities in the aims arid objects of the two Banks and the functions discharged being essentially governmental in nature. I am of the opinion that the Mizoram Apex Bank is an instrumentality of the State of Mizoram and, as such, amenable to the writ jurisdiction of this Court. There is no escape from this Conclusion in view of the decision in Ajay Hasia and Surendra Nath (supra). 17. The next objection raised on behalf of the writ petitioner is that disciplinary authority does not have the powers to order de novo enquiry and as such, the second enquiry initiated and completed at the instance of the Executive Committee is without any authority of law. Consequent thereupon, it is pleaded that the punishment of dismissal imposed upon the petitioner cannot be sustained, 18. It would appear that the Staff Service Rules prepared by the Board of Directors in exercise of clause 46 of the Bye-laws deal with disciplinary matters in details. Consequent thereupon, it is pleaded that the punishment of dismissal imposed upon the petitioner cannot be sustained, 18. It would appear that the Staff Service Rules prepared by the Board of Directors in exercise of clause 46 of the Bye-laws deal with disciplinary matters in details. The proceedings of minutes of the Board held on 8.9.1992 while considering the first inquiry report resolved as follows: “ The Board after detailed examination of the inquiry report did not agree with inquiry report and its findings on article of charges due to various irregularities and procedural mistakes committed in the inquiry. The Board, therefore, decided to take further action on inquiry report as per Rule 15 (1) of the CCS (CCA) Rules, 1965.” 19. It would appear that the Board was not satisfied with the first inquiry report and, therefore, decided to go for further action as per Rule 15 (1) of the CCS (CCA) Rules, 1965. Thereafter, Shri Rajendra Kumar, Deputy Commissioner, Aizawl District was appointed and he had inquired into the matter afresh and submitted his report holding that the charges against the petitioner have been proved. While " deciding to go for a fresh inquiry, the Board in their resolution referred to Rule 15 (1) of the CCS (CCA) Rules, 1965 although the Board has been authorised under the Staff Service Rules to direct fresh inquiry. It is evident from the provisions incorporated in Rule 100 (3) (i) of the Staff Service Rules. The incorrect recital of legal provision will not vitiate the action taken in pursuance of the resolution. The Board have the powers to direct a fresh inquiry and it was accordingly done. Even under CCS.(CCA) Rules, the disciplinary authority and not the appellate authority alone have the powers to direct de novo inquiry. This is evident from the decision in Union of India & others vs. P. Thayagrajan (1999) 1 SCC 733 where the Supreme Court has clarified that the disciplinary authority has also the powers to order d& novo enquiry. Therefore, the objection against the de novo inquiry made at the instance of the disciplinary authority has no force. 20. The. learned counsel for the petitioner highlighted procedural error regarding the manner-in which the evidence is recorded. The documents placed by the respondents along with their affidavit in-opposition and the additional affidavit show some, lapses in the disciplinary proceeding. Therefore, the objection against the de novo inquiry made at the instance of the disciplinary authority has no force. 20. The. learned counsel for the petitioner highlighted procedural error regarding the manner-in which the evidence is recorded. The documents placed by the respondents along with their affidavit in-opposition and the additional affidavit show some, lapses in the disciplinary proceeding. The evidence appears to have recorded in, violation of the provisions of Rule 100 (2) (xiii) of the Staff Service Rules .and the copy of the enquiry report do not appear to have been furnished to the petitioner That apart, die punishment o£ dismissal do not appear to have been proposed. But these grounds are of no value. The charge against the petitioner relates to irregular sanction of overdraft facility in favour of one Smt. Ruaipuii for a sum of Rs. 38.00 lacs. The petitioner in his written statement filed against the articles of charges admitted that the amount of Rs. 38.00 lacs was sanctioned in good faith as the party was sound. Paras 3 and 4 of the written statement are quoted below : “3. That Pi Ruaipuii, Fancy, Stores, Chanmari C/o Hotel Embassy, Aizawl was a very good customer of the Bank, further, she had promised that she would deposit Rs. 1.00 crore shortly. Believing the promise of Pi Ruaipuii in good faith I had sanctioned over draft facility for Rs 38 lacs. 4. That the entire amount of Rs. 38.00 lacs was sanctioned on three different dates. Initially Pi Ruaipuii applied to the bank for overdraft facility of Rs. 35 1acs. After Rs. 35 lacs was sanctioned, she again submitted an application for sanctioning another Rs. 3 lacs. I had sanctioned the entire amount to her, because she could provide proper security for the said overdraft amount taken by her.” 21. It would appear from the above that the sanction of the amount before execution of the-necessary documents has been admitted by the petitioner. In subsequent paragraphs he had tried to exonerate him on the plea that he had instructed the subordinate officers to get the documents executed before payment. The sanction accorded in violation of the rules without approval of the Executive Committee cannot be lightly taken to mine the gravity of the misconduct. Subsequent execution of the prescribed documents and ratification of the order of sanction by the Executive Committee cannot be treated as mitigating factors. The sanction accorded in violation of the rules without approval of the Executive Committee cannot be lightly taken to mine the gravity of the misconduct. Subsequent execution of the prescribed documents and ratification of the order of sanction by the Executive Committee cannot be treated as mitigating factors. The fact remains that the petitioner had sanctioned the amount on an application submitted on, a plain paper by Smti Ruaipuii without observing prescribed procedure. There is also nothing on record to show that he had taken due care to ensure that the amount was not released before the documents were executed. Loan Rules of the Bank which have been framed by the Executive Committee under the provisions of Bye-laws 36 (a) (V) provide guidelines for sanction and payment of loan/overdraft, etc. Para 6 of the Rules relating to overdraft facility indicates that demand pronote, fixed deposit receipt duly discharged, letter of lien, etc, are to be furnished before drawl is allowed. But in the instant case the documents were not obtained. Therefore, the petitioner, who has admitted that the loan/overdraft facility was given by him without observing the required formalities, cannot raise objection on procedural irregularities as because Rule 100 (2) (iv) dispense with the requirement of inquiry in respect of the article of charges admitted by an employee in his written statement. In view of the admission made by the petitioner in his written statement 'about sanctioning of overdraft without following the formalities, the alleged irregularities in the departmental proceeding, if any, will not be of any help to the petitioner. The enquiry made even after admission of the offence was in fact redundant. The petitioner will have to show that he has been prejudiced due to above procedural defects. 22. It is evident that the petitioner is not a holder of any civil post under the State Govt and His case has to be examined as per provisions of the Staff Services Rules applicable to the officers of the Bank. After a careful consideration of the materials on record, I am of the opinion that non-furnishing of the copy of the statement of witnesses, copy of the enquiry report and omission to serve notice of proposed punishment cannot salvage the case of the petitioner in view of the admission made by him about the sanction and payment of the amount in an irregular manner. That apart, the overdraft facility being permissible only against fixed deposit, it was not expected of an officer holding the rank of General Manager to sanction such facility for an amount to the tune of Rs. 38.00 lacs before completion of the procedure. The ultimate finding recorded by the Inquiry Officer as to his misconduct in view of his admission is not likely to suffer any change even if the matter is remanded back for the above procedural irregularities. 23. The learned counsel for the petitioner submitted that the punishment of dismissal has been disproportionate to the offence committed. It would appear that the petitioner had joined the services of the Bank as an Assistant and by dint of his labour and sincerity, rose to the position of General Manager and was at h the relevant time officiating as Managing Director. The overdraft facility given by him before completion of the procedure was later on ratified by the Executive Committee and the loanee also executed all the relevant documents. Thus, it appears that the Bank has not suffered any loss on account of irregular sanction of overdraft facility. That being the position, any of the opinion that the punishment of dismissal from service has been top harsh and disproportionate to the alleged misconduct. It is, therefore, ^proposed to remand the matter back to the disciplinary authority for re-examining the matter and taking a decision as to the penalty to be imposed other than the penalty of dismissal/removal. This shall be done after affording an opportunity to the petitioner to submit his case on the question of penalty only. 24. In the result, the writ petition is allowed. The penalty of dismissal imposed is hereby set aside and the matter is remanded back to the disciplinary authority for disposal afresh as observed above. No order as to costs.