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1999 DIGILAW 93 (PAT)

Anem Malikarjuna Rao v. All India Handloom Fabrics Marketing Co-operative Society Ltd.

1999-02-09

RADHA MOHAN PRASAD

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JUDGMENT : Radha Mohan Prasad, J. The petitioner in this writ petition has assailed the validity of the ORDER :dated 7.1.1992 issued by the Secretary of All India Handloom Fabrics Marketing Co-operative Society Ltd. (sponsored by the Government of India), hereinafter referred to as 'the Society', dismissing him from the service of the Society with immediate effect and advising him to settle his dues, if any, with the Manager, Tassar Silk Export Division, Bhagalpur. 2. In short, the relevant facts are that the petitioner initially after obtaining diploma in Handloom Technology from Indian Institute of Handloom Technology at Salem was appointed as Senior Sales Assistant in the Society. On his promotions, he was lastly posted as Assistant Depot Manager at Tassar Silk Export Division, Bhagalpur, were he received letter dated 26.7.1991 containing Articles of charges against him and requiring him to submit his show cause. The petitioner submitted his show cause denying the allegations and specifically stated herein that he never misused any official authority vested in him nor misappropriated any amount of society funds nor indulged in any corrupt practice nor violated any service Rules of the Society. The petitioner also stated that during the period 1988-89 when he was posted as Assistant Depot Manager, Nuapatan, the production of the Unit under his charge increased to the tune of Rs. 15 lacs due to his personal initiative. Thereafter it appears that the Secretary of the Society Respondent no.3 directed for holding an enquiry against the petitioner and Enquiry Officer was appointed before whom he appeared on 24.9.1991. It is alleged that instead of showing the relevant documents and registers the Enquiry Officer proceeded with the examination of witnesses and started putting irrelevant questions to him by way of cross-examination. It is also alleged that some witnesses were also called to state against the petitioner under pressure and he was not given any opportunity to cross examine them. According to the petitioner, in fact, no opportunity was given to him, yet the Enquiry Officer wrongly recorded that all opportunity was given to him. It is also alleged that the petitioner was not permitted to examine any witnesses on his behalf nor the documents showing increase in the production during the year 1988-89 was placed in the enquiry showing the good performance of' the petitioner. It is also alleged that the petitioner was not permitted to examine any witnesses on his behalf nor the documents showing increase in the production during the year 1988-89 was placed in the enquiry showing the good performance of' the petitioner. According to the petitioner, the procedure adopted by the Enquiry Officer in conducting the enquiry was against all the principles of natural justice so much so that he was not supplied any copy of the findings of the Enquiry Officer nor was given any opportunity to explain or assail the same, and on 7.1.92 he received the impugned ORDER :of dismissal from Respondent no.3. 3. Counter affidavit has been filed on behalf of Respondent no. 3 in which it is stated that the Respondent Society is not at all a Government of India undertaking incorporated for the purpose, amongst others, to support, protect, maintain, increase and promote the cause of handloom industry in general and to support, protect and maintain and promote the sales of handloom goods within the country and abroad or that Respondent no. 1 is an organ of the State. It is, thus, stated that the writ petition is not maintainable in view of the fact that Respondent no. 1 is not at all State within the meaning of Article 12 of the Constitution and as such is not amenable to the writ jurisdiction of this Court. According to the Respondents, the Society is Co- operative Society initially registered under the Maharashtra State Co-operative Societies Act. However, it is admitted that after passing of the Multi State Co-operative Societies Act, 1984, the Society is governed under the provisio,1S of the said Act and is a National Co-operative Society, which has its own bye-laws and Rules and regulations, and giving the details as to how the Board of Directors are appointed. It is stated that on applying the tests laid down by the Supreme Court in a number of JUDGMENT :s, it is clear that there is no vast and pervasive State control and the financial contributions of the State is also only about 2%. There is no unusual degree of control by the State over the management of the Society. It is stated that on applying the tests laid down by the Supreme Court in a number of JUDGMENT :s, it is clear that there is no vast and pervasive State control and the financial contributions of the State is also only about 2%. There is no unusual degree of control by the State over the management of the Society. It is further stated that the Society is not rendering any important public service being obligatory functions of the State, nor it is carrying out any Governmental activities and Governmental functions of vital public importance, as such, it is contended that the writ application is fit to be dismissed in limine on this ground alone. 4. The allegations regarding the irregularities committed in holding of the enquiry male in paragraph 16 to 21 of the writ petition have been denied in paragraph 11 of the counter affidavit. It is stated that the Enquiry Officer gave every opportunity of looking to all the relevant documents and registers according to the wishes of the petitioner. According to the respondent it is incorrect to state that the writ petitioner was not given any opportunity of cross-examination of witnesses produced by the presenting officer. It is alleged that on the other hand the writ petitioner himself did not take the opportunity and refused to cross-examine the witnesses branding them as liers. According to the Respondents, the writ petitioner opted to give his statement and he was rightly cross-examined by the Enquiry Officer as well as the Presenting Officer. It is also stated that the enquiry was conducted on three dates and the statements were duly recorded and the writ petitioner after reading the contents thereof put signature on each of the dates. Signature of the Enquiry Officer, Presenting Officer and the Reporting Officer were also taken on each of the dates and full opportunity of hearing and looking to any of the documents, which he liked, were given to the writ petitioner. The Enquiry Officer submitted his report on 16.10.91 and all the attending facts and circumstances pertaining to the charges in question were thoroughly considered by the Enquiry Officer and he ultimately came to a finding that the charges levelled against the petitioner stood fully proved. According to the Respondents, many of the charges levelled against the petitioner had been admitted by himself. According to the Respondents, many of the charges levelled against the petitioner had been admitted by himself. However, in paragraph 12 of the counter affidavit, it is admitted that the petitioner was not provided with the findings of the Enquiry Officer as, according to the Respondents, the Society was not bound to do so under the Rules. 5. Mr. Dwivedi, learned senior counsel appearing for the Respondents raised preliminary objection regarding maintainability of the writ petition, as, according to the Respondents, the Respondent-Society is not a State within the meaning of Article 12 of the Constitution of India and thus, is not amenable to the writ jurisdiction of this Court. According to him, Co-operative Society functioning in several States attains the status of National Co-operative Society, if its field of operation extends to whole of India and vice versa. The Co-operative Society mentioned in second Schedule of Multi State Co-operative Societies Act, 1984 are such Co-operative Societies which are registered under the Multi Unit Cooperative Societies Act, 1942 and have been acknowledged by the Act to have the status of National Co-operative Society. They have not been created under or by the Statute by the Union Government nor they are the limbs of the State. It has been submitted that as to whether a Company or Society is an instrumentality or agency of the Government or not and whether it is an authority under Article 12 of the Constitution has been set-forth and settled down by the leading JUDGMENT : of the Constitution Bench of the apex Court in the case of Ajoy Hasia vs. Khalid Mujib, reported in 1981 Supreme Court 487. The apex Court after considering all the earlier pronouncements as well as other relevant authorities have ultimately set forth the tests for determining as to whether a Company or Society is State within the meaning of Article 12 of the Constitution. 6. Learned Counsel relied upon the following tests : (i) One thing is clear that if the entire share capital of the Corporation is held by the Government, it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government. (ii) Where the financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indicati6n of the Corporation being impregnated with Governmental character. (ii) Where the financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indicati6n of the Corporation being impregnated with Governmental character. (iii) It may also be a relevant factor, whether the Corporation enjoys monopoly status, which is the State conferred or State protected. (iv) Existence of deep and pervasive State control may afford an indication that the Corporation is a State Agency or Instrumentality. (v) If the functions of the Corporation is 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. (vi) 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. 7. According to the learned counsel for the Respondents, in the facts and circumstances of the present case, the Respondent-Society is not covered by any of the said tests making it State within the meaning of Article 12 of the Constitution and amenable to writ jurisdiction of this Court. 8. Mr. Keshav, learned Senior Counsel appearing for the petitioner submitted that after independence of the country for achieving the object of a welfare State, the Union and State Governments created various instrumentality, like Government Companies or Corporations, which have been held to be the instrumentalities of the State and State under Article 12 of the Constitution. According to him, the Respondent-Society was a statutory Society included in Schedule 2, item 15 of "list of National Societies under the Multi state Co- operative Societies Act, 1984 to discharge the State function of promoting Handloom Industry, its foreign trade, standrdisation, trade mark, quality control etc. It has been further contended that the Central Government has complete control over the National Societies, under the provisions of Act, 1984. Section 2(m) defines National Co-operative Society specified in Schedule; Section 5(c) prohibits registration of any other Multi state Co-operative Society having similar area of operation and identical objects. The Respondent Society has complete monopoly in the country in relation to marketing and export of Handloom Products under the direction and control of the Central Government. It has been further submitted that no individual is' entitled to become a member of National Society in his personal capacity. The Respondent Society has complete monopoly in the country in relation to marketing and export of Handloom Products under the direction and control of the Central Government. It has been further submitted that no individual is' entitled to become a member of National Society in his personal capacity. The Central Government has the control of holding of the shares in the Society. The electoral roll for the election of the members of the Board is also under the direct control of the Central Government under Section 35. Section 41 provides for the nominee on the Board and the function of the Board is subject to the Rules. The appointments of Chief Executive Officer and all managerial posts, and the Rules for recruitments, remuneration, allowance and condition of service of the Officers of National Co-operative are under the direct control of the Central Government. The fund of the Society has to be utilised only for the objects of the State as prescribed under the Act. In case of winding up of the National Society the surplus of the assets has to be divided with the previous sanction of the Central Government under Section 82 of the Act. Thus, according to Mr. Keshav, it is evident that the Central Government has got full control over the function of National Societies, and the Respondent-Society has been registered for the promotion of Handloom Industry and is entitled to monopoly in national and international trade of Handloom Products. The objects enumerated in clause A,B,F,H,I,J,K,L,M,N,P,R and P of the bye-laws of the Society are functions of the State. In the Board of Directors, three Directors are nominated by the Government of India from amongst its officers to have effective and direct control over the Society. According to the learned counsel. National Societies under the Multi State Co-operative Society Act, 1984 has the similar status and objects as that of Government Companies or Corporations and is State within the meaning of Article 12 of the Constitution of India. It is submitted that the law laid down by the Hon'ble Supreme Court with regard to issuance of mandamus has gradually gone under a great change. It is submitted that the law laid down by the Hon'ble Supreme Court with regard to issuance of mandamus has gradually gone under a great change. According to him, in Anandi Gupta case, reported in A.I.R. 1989 Supreme Court 1607, the apex Court has extended the scope of mandamus, and the ratio of Anandi Gupta case has been subsequently affirmed by the Constitution Bench JUDGMENT : reported in A.I.R. 1993 Supreme Court 2178, which have been followed by a Division Bench of this Court in a JUDGMENT : reported in A.I.R. 1998 Patna 9 : 1997(2) PLJR 66 . In the case K. Krishnamacharyulu & others Vs. Sri Venkateswara Hindu College of Engineering & another reported in A.I.R. 1998 Supreme Court 295, the apex Court has further widened the scope of the mandamus for the enforcement of fundamental right even by Private Institution for payment of equal pay for equal work. Thus, it was contended that the Respondent was an organ of the State amenable to the writ jurisdiction of this Court and there is no substance in the preliminary objection raised on behalf of the Respondents regarding maintainability of the writ petition on the said ground. 9. On merit, it was contended that in the staff regulations, it is specifically provided that in case of absence of President, the Vice-President shall conduct the enquiry and they alone could take action against the Officers, subject to sanction by the Executive Committee. In the case of the petitioner, enquiry was held by an officer appointed by the Secretary and the punishment has been imposed by the Secretary without the sanction of the Executive Committee. 10. There may be some substance in the submission of Mr. Keshav that the impugned ORDER :cannot be sustained in view of the fact that admittedly a copy of the enquiry report was not given to the petitioner before the ORDER :dismissing him from service was passed and thereby the petitioner has been deprived of the right of making effective appeal besides the same being in violation of the principles of natural justice. There may also be substance in the submission that the ORDER :impugned has been made by an authority not competent to pass, as the sanction of the Executive Committee which was necessary in case of imposing punishment to the petitioner was not there and the enquiry conducted was also in clear violation of the principles of natural justice. But in view of the settled law, I find it difficult to hold that the Respondent-Society is State within the meaning of Article 12 9f the Constitution and/or that a writ petition can be maintained against it. It may be true that the Respondent-Society was included in item 15 of Schedule 11 of the list of National Societies under the Multi state Co-operative Societies Act, 1984, but that itself cannot make it a State within the meaning of Article 12 of the Constitution of India for invoking the writ jurisdiction of this Court. From the bye-laws of the Society, I find that it has not been made under any of the provisions of 1984 Act. It has simply been registered vide certificate issued by the Central Registrar of Cooperative Societies. The administrative affairs of the All India Society vest in an Executive Committee, consisting of President, Vice-President, Secretary and three other members elected by the Board of Directors from amongst themselves, under clause 14 of the bye-laws, like other Societies registered under different State Co-operative Societies Act, the statements of accounts are to be audited and approved by the general body and sent to the Central Registrar of Co-operative Societies. It is true that clause 12 of the bye-laws provides for nomination of three Directors by the Government of India from amongst their officers, but there appears to be no independent and direct control of Government of India over the Society, in the matter of administrative affairs. A close scrutiny of the provisions of the bye-laws clearly shows that the State has no manner of control over the Society except in accordance with the provisions of the Act itself, which provides for curbing and regulating the powers of the Central Registrar. Under clause 11 of the bye-laws, the ultimate authority in all matters relating to the affairs of All India Society is the general body of the members. Under clause 11 of the bye-laws, the ultimate authority in all matters relating to the affairs of All India Society is the general body of the members. It is, thus, clear that the Society can neither be held to be a limb of the State nor the same has any deep and pervasive control over its functioning. In the case of Harendar Narain Banker vs. The State of Bihar and others, reported in 1985 P.L.J.R. 1078, a Division Bench of this Court held and found that Biscomaun, a prime Co-operative Society of the State of Bihar is not a State within the meaning of Article 12 of the Constitution though more than 90% of the capital of it had been provided by the State Government and even its Chief Executive Officer was an officer of the State. The only exception made therein was that if the Biscomaun was being controlled by the Administrator appointed by the State Government, then writ will be maintainable against the action of the Administrator. The JUDGMENT :s relied upon by the learned Senior Counsel appearing for the petitioner are of no avail in the facts and circumstances of the present case. 11. In the case of R. Krishna Macharyulu and others Vs. Sri Ventakeshwar Hindu College of Engineering & another reported in 1998 Supreme Court 295. The appellant and six others were appointed on daily wages to the post of lab. Assistant as non-teaching staff of the Respondent Private College. The writ petition and appeal seeking equal pay having been dismissed, they filed appeal before the apex Court for direction to pay them equal pay for equal work on par with other Government employees. The Supreme Court only on the basis of executive instructions issued by the Government, which gave them right to claim the pay scales so as to be on par with the Government employees, held that the writ was maintainable. It was held that the State has obligation to provide facilities and opportunities to the people to avail all the right to education. The Private Institutions cater to the needs of educational opportunities, the teacher duly appointed to a post in the private institution also is entitled to seek enforcement of the ORDER :s issued by the Government. It was held that the State has obligation to provide facilities and opportunities to the people to avail all the right to education. The Private Institutions cater to the needs of educational opportunities, the teacher duly appointed to a post in the private institution also is entitled to seek enforcement of the ORDER :s issued by the Government. Accordingly, it was held that when an element of public interest is created and the institution is catering to that element, the teacher, an arm of the institution, is also entitled to avail of the remedy provided under Article 226 of the Constitution. 12. In the present case, nothing has been shown that there was any ORDER :issued by the Government for enforcement of which the present writ petition has been filed. Under such circumstances, in my opinion the said decision of the apex Court cannot be of any avail to the petitioner in the facts and circumstances of the present case. The writ petition is, thus, dismissed, being not maintainable. In the facts and circumstances, however, there shall be no ORDER :as to costs.