This shall dispose of SWP No. 329/2004 and SWP No. 904/2004. In SWP No. 329/2004 challenge is to order dated 12.12.2003, whereby petitioner Ashok Kumar Jain, Deputy General Manager Jammu & Kashmir Cooperative Supply & Marketing Federation (JAKFED) (hereinafter referred to as the Federation), has been compulsorily retired from service w.e.f. 12.12.2003 after-noon, on his completing 24 years 10 months service and attaining 51 years of age. 2. However, vide order dated 18.5.2004, one Rajinder Singh, describing himself as Chairman of the Federation, recalled order dated 12.12.2003 compulsory retiring the petitioner from service. The Chairman on coming to know of the order issued by Rajinder Singh passed order dated 22.5.2004 keeping in abeyance order dated 18.5.2004 issued by Rajinder Singh. In SWP No. 904/2004 challenge by the petitioner is to order of Chairman dated 22.5.2004. 3. Before meeting with the issues involved in both the writ petitions, it deserves to be mentioned that perusal of Bye-laws of the Federation (amended upto 31st December 1975) shows that the Federation was initially registered in the year 1948 as a Cooperative Society with its Headquarter at R.S.Pora, Jammu. In the year 1960 it became an Apex Body when its headquarter was shifted to Jammu. The membership of the Federation comprises Cooperative Societies, individuals, the State Government and merchants, traders, commission agents as nominated members, having no right to vote. The objects for which the Federation was constituted, inter alia, are to arrange for the sale of agricultural produce of the members or purchased by the Federation; to prepare the produce for markets by sorting, grading, packing and re-packing; to transport produce from members residence, farms or go-downs to markets; to encourage, assist members to grow improved and standardized varieties of produce; to rent or own go-downs to facilitate storage, processing and sale of goods; to produce and supply to members, fertilizers, manure, seed and implements etc. and essential domestic requirements; to encourage thrift, self-help and cooperation among its members; to act as Warehouse men; to carry publicity and propaganda in respect of Cooperative Marketing and Supply by publication of suitable literature; to undertake all other activities calculated to further the object of the Federation; to advance loan to members on the security of their produce, raw or processed; to act as transporters and to arrange essential and consumer goods. 4. 4. Bye-laws further provide that management of affairs of the Federation shall vest in the Board of 18 Directors, i.e. one nominee from the Government; four representatives of Marketing Societies each from Kashmir and Jammu Division; four representatives from Primary Agriculture Cooperative Societies; four representatives from individual cultivators and one from Financing Agency. 5. It is stated that as against the given set up, the elected management of the Board could function in the Federation only till 29.12.1969. Thereafter, the State Government provided a nominated set of Board and since 1969 the affairs of the Federation were being managed through the nominated management constituted from time to time by the Government, till very recently when elected Body came to manage the affairs of the Federation. In the beginning the Federation was operating on small scale catering to the needs of farmers but with the increase of consumption of agricultural inputs in the State of Jammu and Kashmir the activity for distribution of fertilizer was also entrusted to it. The foodgrain procurement was later on withdrawn as the Food & Supplies Department switched over to policy of procuring foodgrains from Food Corporation of India. The distribution of fertilizer continues to be the major activity of the Federation and the business of Cement and LPG Gas Cylinders was also brought within the fold of Federation. Though Federation diversified into other various business activities and obtained LPG agencies, assorted business of making supplies to various government agencies, such as, Ministry of Defence Social Welfare Department, ICDS Projects, Cement distribution and other consumer business including maintaining a fleet of trucks, rice sheller business etc., the fact remains that diversion of funds on a very huge scale from the source of fertilizer activity continued unabated over the last few decades and in the year 1995, as a result of total bankruptcy, the Federation was left with no option but to switch over to a mechanism of "cash and carry basis" and operate on the basis of payments being deposited in advance by the societies/dealers before lifting of fertilizer stocks by the marketing societies etc. 6. Because of large scale bunglings and embezzlement of funds in the Federation, the Government of Jammu and Kashmir vide Govt. 6. Because of large scale bunglings and embezzlement of funds in the Federation, the Government of Jammu and Kashmir vide Govt. Order No. 26-GAD (Vig) of 1999 dated 11.3.1999 appointed Shri K.B.Pillai Principal Secretary to Government of J&K as Enquiry Officer (popularly known as Pillai Commission) to scrutinize the role of all concerned Officers and Officials of the Federation from the commencement of fertilizer business by the Federation and also to ascertain their responsibility and, if so, the extent thereof for failure of the system which resulted in large scale embezzlement in the Federation and whether these officers/officials were involved in embezzlements. Subsequently, Shri V. K. Soi, Director J&K Accounts Service was nominated to assist the Pillai Commission. The Pillai Commission submitted detailed report dated 31.8.2000 to the Government. In its report, the Pillai Commission brought into light massive frauds committed over past years and failure of the authorities concerned to take corrective action promptly and proceed against those found responsible/involved. 7. Petitioner, as a Field Officer, joined service of the Federation on 22.10.1979. He was promoted to the rank of Manager in the year 1981and was again promoted on probation as Regional Manager and was regularized as such on 28.6.1982. Thereafter, in 1983 he was promoted as Assistant General Manager, Food Grains and Stores; he was posted as General Manager Regional Office on 6.2.1984; he was recalled and posted as Assistant General Manager, Srinagar, on 13.8.1987 and continued to remain working in the Regional Office upto 14.12.1991. The service record of the petitioner has revealed that for maximum period he remained working as Incharge Regional Office, Srinagar. On the date of his compulsory retirement, petitioner was on deputation to Jammu & Kashmir State Road Transport Corporation, where he was discharging the functions of General Manager. 8. The challenge to order compulsorily retiring the petitioner from service, inter alia, is based on the grounds that order passed against him is mala fide; based on no evidence and arbitrary in the sense that no reasonable person could form such opinion on the basis of material which was available before the Board of Directors. A specific case, as made out by the petitioner, is that he has been regularly and successively victimized by respondents 6 to 11. He has ascribed mala fide on the part of respondents 6 to 11 in passing impugned order. A specific case, as made out by the petitioner, is that he has been regularly and successively victimized by respondents 6 to 11. He has ascribed mala fide on the part of respondents 6 to 11 in passing impugned order. In fact, nearly 50 pages of the writ petition (SWP No. 329/2004) contain allegations of malafides against respondents 6 to 11. However, respondents 4 & 5, i.e. the Federation and its Managing Director, have disputed any victimization or discrimination on the part of respondents 6 to 11 and in support of the order impugned have relied upon various acts of omission and commission on the part of petitioner during the course of his posting and working with the Federation. 9. At this stage it deserves to be mentioned that on the basis of statement made at bar by learned counsel appearing for the petitioner that respondents 6 to 11 are not necessary party and their names may be deleted, the court, vide its order dated 1.6.2004, deleted the names of respondents 6 to 11 from the array of parties. 10. The law in regard to mala fide is well settled that allegations regarding mala fides cannot be looked into in absence of the parties against whom allegations of mala fides are made. The persons against whom allegations of mala fides are made must be made party to writ petition. Since one of the ground taken by petitioner to challenge the order compulsorily retiring him from service is that it is the result of victimization and bias of respondents 6 to 11 and their names having been got deleted I am not called upon to test the order impugned on the ground of mala fides alleged against respondents 6 to 11. 11. The grounds of mala fides having been given up, the first submission of learned counsel for the petitioner is that the impugned order has been passed without any legal sanction and authority inasmuch as the Service Rules applicable to the petitioner do not envisage premature retirement of an employee. Learned counsel further submitted that invoking of SRO 233 dated 8.7.1988 for the purpose of passing order compulsorily retiring the petitioner is not at all warranted, as the petitioner is an employee of the Federation which has its own rules and bye-laws. Learned counsel further submitted that invoking of SRO 233 dated 8.7.1988 for the purpose of passing order compulsorily retiring the petitioner is not at all warranted, as the petitioner is an employee of the Federation which has its own rules and bye-laws. Impugned order No.10/Adm//00/03/3994-4002 dated 12.12.2003 reads as under :-- @TBLCEN = "OFFICE OF JAMMU & KASHMIR @TBLCEN = COOP. SUPPLY & MARKETING FEDERATION LTD. @TBLCEN = B. C. Road, Rehari, Jammu. @TBLCEN = ORDER Whereas Jammu & Kashmir Cooperative Supply & Marketing Federation Ltd is of the opinion that it is in the public interest to do so. Now, therefore, in exercise of powers conferred by Sub Rule (b) of rule 2.12 of the rules of 1975 of J&K Cooperative Supply & Marketing Federation Ltd read with Sub rule (4) of Rule 13 of rules of 1988 framed vide SRO 233 dated 8th July 1988 titled Jammu & Kashmir Cooperative Societies Service Rules, the Jammu and Kashmir Cooperative Supply & Marketing Federation hereby gives notice to Shri A. K. Jain, Dy. General Manager of Jammu & Kashmir Cooperative Supply & Marketing Federation as on date on deputation to Jammu & Kashmir State Road Transport Corporation as General Manager that he having already completed 24 years and 10 months of service and attained 51 years of age shall retire from service with effect from the afternoon of 12th December 2003. One months salary in lieu of one months notice for the month following the date of his retirement is also sanctioned in his favour. By order of the Board of Directors of Jammu & Kashmir Cooperative Supply & Marketing Federation Ltd. Sd/- Managing Director, For & on behalf of Board of Directors J&K Coop.Supply & Mktg. Fed.Ltd., Jammu." 12. The aforementioned impugned order was passed on the basis of following resolution of the Board : -- @TBLCEN = "RESOLUTION ADOPTED BY CIRCULATION BY BOARD OF DIRECTORS OF JAMMU & KASHMIR COOPERATIVE SUPPLY AND MARKETING FEDERATION LTD (JAKFED) JAMMU. Fed.Ltd., Jammu." 12. The aforementioned impugned order was passed on the basis of following resolution of the Board : -- @TBLCEN = "RESOLUTION ADOPTED BY CIRCULATION BY BOARD OF DIRECTORS OF JAMMU & KASHMIR COOPERATIVE SUPPLY AND MARKETING FEDERATION LTD (JAKFED) JAMMU. Whereas, Mr A. K. Jain has joined services of Jammu & Kashmir Cooperative Supply & Marketing Federation Ltd Jammu, on 21.02.1979; and Whereas, as per service record date of birth of Mr Jain is 07.11.1952; and Whereas, till date Mr A.K.Jain has completed 24 years and 10 months of service with J&K Cooperative Supply & Marketing Federation Ltd; and Whereas, Shri A. K. Jain has also attained 51 years of age till date; and Whereas, while serving with J&K Cooperative Supply & Mktg. Federation Ltd as Deputy General Manager Shri Jain was sent on deputation vide Govt. Order No. GAD/Ser/2/99 dated 22.02.2000 to J&K State Road Transport Corporation as General Manager and is serving therein as such till date; and Whereas J&K Cooperative Supply & Marketing Federation Ltd has framed J&K Cooperative Supply & Marketing Federation Ltd Service Rules 1975 (herein after referred to as Rules of 1975) only; and Whereas, as per clause (b) of Rule 2.12 of the Rules of 1975, J&K Cooperative Supply & Marketing Federation Ltd is empowered to retire its employee on completion of 25 years of service or attaining 50 years of age; and Whereas, the Govt. of Jammu & Kashmir vide SRO 233 dated 8th July, 1988, has framed Jammu & Kashmir Cooperative Societies Service Rules dated 8th July 1988 (hereinafter referred to as rules of 1988); and Whereas, the said rules have been made applicable to all the Societies functioning in the State of Jammu & Kashmir including J&K Cooperative Supply & Marketing Federation Ltd Jammu; and Whereas, as per Sub Rule 4 of Rule 13 of the Rules of the 1988 J&K Cooperative Supply & Marketing Federation Ltd is empowered to retire any of its employee on the completion of 20 years of service or attaining of 45 years of age; and Whereas, as stated above, Shri A. K. Jain has to his credit 24 years and 10 months of service and he has also completed 51 years of age; and Whereas, J&K Cooperative Supply & Marketing Federation Ltd Jammu has resolved after considering all the relevant material and service record of Shri A. K. Jain to retire Shri A. K. Jain from its service as being not fit to be retained in service any more by invoking Sub Rule (b) of Rule 2.12 of the rules 1975 read with Sub Rule 4 of Rule 13 of Rules of 1988 referred to supra with effect from afternoon of 12th of December, 2003, in the public interest and Whereas, in such eventualities there is no requirement of serving one months notice of above action on Mr A. K. Jain or one months pay in lieu thereof yet it is resolved that the order of retirement shall be served on Mr AKJain and he shall be paid one months pay in lieu of one months notice. Now, therefore, it is resolved by the Board of Directors of J&K Cooperative Supply & Marketing Federation Ltd on this 11th day of December 2003 afternoon that in exercise of the powers conferred by Sub Rule (b) of Rule 2.12 of the Rules of 1975 read with Sub Rule 4 of Rule 13 of Rules of 1988 referred to supra and in the interest of public that Mr A. K. Jain shall retire from service of J&K Cooperative Supply and Marketing Federation Ltd Jammu with effect from afternoon 12.12.2003. He will be paid pay of one month following the date of his retirement. He will be paid pay of one month following the date of his retirement. It is however further resolved that after the approval of the resolution by Board of Directors Sh Zahid Hussain, Managing Director JAKFED (Member Secretary of theBoard) will issue order accordingly for and on behalf of Board of Directors of Jammu & Kashmir Cooperative Supply & Marketing Federation Ltd Jammu. Sd/- Brinder Singh, Sd/- Kamal Singh, Director. Director Sd/- Balbadhar Singh Sd/- Ashok Kr.Sharma, Director. Director, Sd/- Darshan Sharma, Sd/- Mohd Yusuf Lone, Director. Director Sd/- Rajinder Singh, Sd/- Mohd Ayub Khan, Vice Chairman. Chairman." 13. Reading of impugned order shows that petitioner has been compulsorily retired from service with effect from the afternoon of 12th December 2003 by the Board by exercising power under sub-rule (b) of Rule 2.12 of the J&K Cooperative Supply &Marketing Federation Service Rules, 1975, (hereinafter referred to as 1975 Rules) read with Sub rule (4) of Rule 13 of the J&K Cooperative Societies Service Rules, 1988, (hereinafter referred to as 1988 Rules). 1988 Rules have been framed by the Government in exercise of power conferred by Section 124 of the J&K Cooperative Societies Act, 1960, making it applicable to all Societies which were functioning on the date of commencement of the Rules i.e. on 8.7.1988, or which would be created in future. 14. Under clause (o) of Rule 2 of 1988 Rules, `Society means the Cooperative District Whole-store Society/Cooperative Marketing Society/ Cooperative Sale and Supply Society/Cooperative Multipurpose Societies/ Cooperative Service Society registered under the J&K Cooperative Societies Act, 1960. 15. Admittedly, the Federation was registered as a Cooperative Society in the year 1948 and continues to be Cooperative Society till date and, therefore, submission of learned counsel for the petitioner that the 1988 Rules are not applicable to the employees of the Federation, is not sustainable. Otherwise too, sub rule (b) of Rule 2.12 of the 1975 Rules, which according to learned counsel for the petitioner apply to the employees of the Federation, provides for compulsory retiring an employee of the Federation on completion of 25 years service or attaining 50 years of age. Otherwise too, sub rule (b) of Rule 2.12 of the 1975 Rules, which according to learned counsel for the petitioner apply to the employees of the Federation, provides for compulsory retiring an employee of the Federation on completion of 25 years service or attaining 50 years of age. The only difference in 1975 Rules and 1988 Rules, is that under the former an employee can be retired on completion of 25 years service or attaining age of 50 years, whereas under the latter an employee can be retired on completion of 20 years service or attaining the age of 45 years. Admittedly, petitioner, on the date when he was compulsorily retired, had completed 24 years and 10 months of service and had attained the age of 51 years and, therefore, by applying either of the aforesaid rules the Board had the authority to compulsorily retire the petitioner in public interest at any time after his attaining the specified age or specified period of service. 16. Learned counsel for the petitioner next contended that impugned order has been passed by respondent No. 5 pursuant to directions of the Government conveyed vide communication No.GAD (Adm) 7/2003-V dated 11.12.2003 and the petitioner being not under the employment of Jammu & Kashmir Government no order could have been passed compulsorily retiring petitioner from service on mere asking of the Government. 17. It is not in dispute that because of large scale bunglings and embezzlement of funds in the Federation the Government had appointed Pillai Commission to scrutinize the role of all Officers/Officials and fix the responsibility, if any, on the person(s) for such bunglings/ embezzlement of funds in the Federation. Pillai Commission in its report dated 31.8.2000, apart from other officers of the Federation, found that petitioner too had been instrumental in paving ways for the mis-appropriations/embezzlements taking place in the Valley, besides being responsible for non maintenance of proper records. In his voluminous report, Pillai Commission noted that vide charge sheet served upon petitioner by Managing Authority of the Federation under No. 1212 dated 17.6.1994, he was shown implicated on account of following serious charges :-- "(a) reported disappearance of vital records from Srinagar office of JAKFED taken away by Sh.A.K.Jain, DGM. (b) Shortages of fertilizer in various stores and LPG cylinders. (c) Sh. A.K.Jain had retained nearly Rs. 2 Crores as un-remitted sale proceeds of fertilizer and rice. (d) Sh. (b) Shortages of fertilizer in various stores and LPG cylinders. (c) Sh. A.K.Jain had retained nearly Rs. 2 Crores as un-remitted sale proceeds of fertilizer and rice. (d) Sh. Jain had shown purchased saffron worth Rs. 2.00 crores through M/s Mohi-ud-din and Co. This had no approval of the competent authority. (e) Sh. Jain had made payment of Rs.40.00 lacs to the Seller of Ashipora Complex which is unauthorized and without approval of competent authority. (f) LPG gas stoves worth crores of rupees have been directly purchased at a commission of Rs. 200 per piece." 18. The Pillai Commission observed that on the basis of charge sheet served on the petitioner, the Federation failed to take up any follow up action and there was complete silence on the part of the management over the issue. 19. It appears that on receipt of the Pillai Commission report the Government sought information from the Federation regarding follow up action taken against the Officers/Officials who were found responsible for embezzlement/misappropriation. In response thereto, Managing Director brought to the notice of the Government the acts of omission and commission as well as irregularity committed by petitioner. Government was also informed that petitioner though was an employee of the Federation but, on the basis of order dated 22.2.2000 passed by Commissioner/Secretary to Government General Administration Department, he joined the J&K State Road Transport Corporation (hereinafter referred to as SRTC) as General Manager without seeking any permission from the Federation in this regard. Later on, when he requested Managing Director of the Federation to issue LPC in his favour, the Managing Director informed the Chairman JAKFED, who also happened to be the Minister Incharge of the Cooperative Societies, that petitioner while his posting in Regional Office, Srinagar, petitioner had created sales tax liability of around Rs. 77.01 lacs on sale of Saffron and as Drawing & Disbursing Officer he had released payments to the suppliers of Saffron, apparently in post haste, without deducting the Sale Tax at source as per Section 16 (c) of Sales Tax Act, 1962. The Managing Director sought guidance from the Chairman (Minister Incharge) as to whether L. P. C. in favour of petitioner should be issued when he, as drawing & disbursing officer, is responsible for creating liability against the Federation. The Managing Director sought guidance from the Chairman (Minister Incharge) as to whether L. P. C. in favour of petitioner should be issued when he, as drawing & disbursing officer, is responsible for creating liability against the Federation. The Chairman directed the Managing Director to delink the question of issue of LPC and advised him to initiate appropriate action against the petitioner as per the procedure and also suggested that action for irresponsible behaviour of the petitioner in joining J&K SRTC without getting relieved from the Federation, may be initiated simultaneously. 20. The record has further revealed that during special audit, record of Regional Office Srinagar (viz Day Book, General Ledger, Voucher File etc.) pertaining to year 1988-89 and 1989-90 were found missing. While tracing the missing record, it came to light that petitioner who was the then Deputy General Manager Incharge of Regional Office, Srinagar, did not render any proof of remitting the record nor he gave any clues about whereabouts of the said record. Any queries made on the subject were avoided by him on one pretext or the other. The non-cooperation of petitioner, according to Managing Director, was deliberate as there were other charges pending against him. Perusal of letter dated 12.5.2001 addressed to Dr. G.A.Dar, the Registrar Cooperative Societies, Jammu, by Managing Director shows that as per the decision of the Managing Authority (Meeting No. 261) charges against petitioner were sought to be probed by an independent agency to be appointed by the Administrative Department, but the Administrative Department instead of directing any independent agency to probe the charges against the petitioner desired that the matter may be got investigated by the Federation at its own level. Faced with such a situation, Managing Director asked the Registrar Cooperative Societies to take action in the matter on the basis of facts stated in the communication dated 14.12.2000. Again vide letter dated 16.11.2001, Principal Secretary & Secretary to Government Agriculture Production Department, J&K Government, Jammu, was requested to refer the case to the appropriate agency for investigation of the charges illucidated therein. 21. The Government and also the Registrar Cooperative Societies did not take any action in the matter. Again vide letter dated 16.11.2001, Principal Secretary & Secretary to Government Agriculture Production Department, J&K Government, Jammu, was requested to refer the case to the appropriate agency for investigation of the charges illucidated therein. 21. The Government and also the Registrar Cooperative Societies did not take any action in the matter. In this background I find merit in the submission of learned counsel for the respondents that since the petitioner was posted in J&K SRTC, the Board felt that enquiry, if any, initiated to prove charges against the petitioner may take considerable time and, therefore, the Board on perusal of petitioners service record, the acts of his omission and commission, charges of corruption and the irregularities committed by him, decided to compulsorily retire him. I further find merit in the submission of learned counsel for the respondents that simply because copy of impugned order was endorsed to Principal Secretary to Government General Administration Department in reference to communication dated 11.12.2003 by itself is not enough to conclude that impugned order was passed on the asking of the Government. Perusal of impugned order shows that its copy was not only sent to Principal Secretary to Government General Administration Department but also to other functionaries of the Government. In this view of the matter, I do not find any merit in the submission made by learned counsel for the petitioner that impugned order was passed on the asking of the Government. 22. Mr A. K. Sawhney, learned counsel appearing for the petitioner, next contended that there was no material on the basis of which Board could form an opinion to compulsorily retire the petitioner. Learned counsel contended that there are more than 47 employees in the Federation against whom criminal cases of embezzlements are pending in criminal courts and the Vigilance Department has sought sanction from the Government, but instead of proceeding against them the petitioner alone has been compulsorily retired. Learned counsel also submitted that earlier too petitioner was targeted but he got relief when he approached the court of law. 23. It is now well settled that `public interest is the guiding factor in considering whether the power of premature retirement should be exercised or not . Learned counsel also submitted that earlier too petitioner was targeted but he got relief when he approached the court of law. 23. It is now well settled that `public interest is the guiding factor in considering whether the power of premature retirement should be exercised or not . It follows that formation of the opinion to prematurely retire an employee must be based on material which has reasonable nexus with `public interest as understood in the context of the rule relating to premature retirement. If on the basis of material or service record, the authority concerned forms an opinion that an employee has ceased to be useful and should be retired prematurely then it cannot be contended that requisite opinion was not formed on the basis of material on record. The Court would not interfere with the exercise of power if the opinion has been made bona fide and on the basis of material available on record. 24. The question which arises for consideration is that whether there was sufficient material justified to form opinion by the Board to compulsorily retire the petitioner ? 25. As noted earlier, the Pillai Commission has indicted petitioner as he was one of the officer responsible for misappropriation/ embezzlements in the Federation, besides being responsible for non-maintenance of proper accounts. The other material highlighted by respondents 4 & 5 in their counter regarding the integrity and honesty of the petitioner reads as under:-- "(i) As per the cash book, salary for the month of February 1991 has been shown drawn twice, but disbursed only once as is evidenced by the pay acquaintance roll for the period. Inaction on the part of Shri Jain resulted into illegal retention of Rs. 1,19,616.24 by the cashier with the formers connivance who besides being the drawing and disbursing officer for the JAKFED Regional Office, Srinagar, was also its incharge. (ii) Shri A.K.Jain has drawn an amount of Rs. 3.00 lac from the State Cooperative Bank, Srinagar, vide cheques No. 096508 dated 16.10.1991 and reflected only Rs. 30,000.00 in the books of Accounts as also on the counter foil of the cheques, resulting into misappropriation of Rs. 2,70,000.00. (iii) Shri Jain made a payment of Rs. (ii) Shri A.K.Jain has drawn an amount of Rs. 3.00 lac from the State Cooperative Bank, Srinagar, vide cheques No. 096508 dated 16.10.1991 and reflected only Rs. 30,000.00 in the books of Accounts as also on the counter foil of the cheques, resulting into misappropriation of Rs. 2,70,000.00. (iii) Shri Jain made a payment of Rs. 6.16 Lac as per below noted detail, for the purchase of butter but neither the butter nor the same proceeds were received in the JAKFED : @Z_TBL_BEG = COLUMNS(4), DIMENSION(IN), COLWIDTHS(.5000,E1,E1,E1), ABOVE(.1000), BELOW(.1000), HGUTTER(.0555), VGUTTER(.0555), KEEP(OFF) @Z_TBL_BODY = TABLE TEXT, TBLCEN, TBLCEN, TBLCEN , S.No., Draft No. Dated, Amount , 1. , 256026,, 10.6.1991, Rs. 1,00,000.00 , 2. , 256022,, 24.5.1991, Rs. 2,16,000.00 , 3. , 0411551,, 29.5.1991, Rs. 3,00,000.00 @Z_TBL_BODY = TABLE TEXT, TABLE TEXT, TBLCEN, TBLCEN , , Total:, Rs. 6,16,000.00 @Z_TBL_END = (iv) Shri Jain made a payment of Rs. 65,400.00 to one M/S New Bonanza Trading Corporation vide Cheque No. 052013 dated 25.5.1991 for purchase of walnuts but neither the sale proceeds nor the walnuts were received in the JAKFED. (v) There appears to be a willful involvement of the officials of the Regional office, in embezzling the recognized trucks, since some of the trucks were shown engaged twice in a day for a destination as far as 150 km in Kupwara District from the dispatching stores. (vi) It is given to understand that there are trucks, which have been dispatched from Regional Office Srinagar to stores in the valley but the concerned store-keepers refused to acknowledge the same. (vii) An amount of Rs. 14.01 Lac as imprest shown advanced to the Field Officers / Managers during the year 1990-91 was not shown acknowledged. (viii) Under receipt No. 4029 dated 12.3.1991 Rs. 23,400/- shown received from Marketing Society, Pulwama, was not shown accounted for in the Cash Book leading to misappropriation. (ix) There has been detected a shortage of 509 filled cylinders and 956l empty cylinders totalling 1445 cylinders at Regional Office, Srinagar. This figure further increases when the reports furnished by various authorities on the handling of LPG by Srinagar office are scrutinized. (x) The entry pertaining to the debiting of an amount of Rs. 12,000/- to Shri Faiz Khalid, Manager, on 8.3.1991 appears doubtful due to his non-appearance. (xi) Closing cash balance on 29.6.1991 for Rs. This figure further increases when the reports furnished by various authorities on the handling of LPG by Srinagar office are scrutinized. (x) The entry pertaining to the debiting of an amount of Rs. 12,000/- to Shri Faiz Khalid, Manager, on 8.3.1991 appears doubtful due to his non-appearance. (xi) Closing cash balance on 29.6.1991 for Rs. 251,000 required to be carried over as opening balance as on 1.7.1991 was not shown handed over by Shri Jain to his successor. (xii) Suspected embezzlement of Rs. 4,80,250/- was detected during the course of verification of posting of counter foils/cash receipts in the cash book in respect of one cash receipt book bearing No. 4001-4100. @Z_TBL_BEG = COLUMNS(4), DIMENSION(IN), ABOVE(.1000), BELOW(.1000), HGUTTER(.0555), VGUTTER(.0555), KEEP(OFF) @Z_TBL_BODY = TABLE TEXT, TABLE TEXT, TABLE TEXT, TABLE TEXT , Receipt No., Date, Amount , 4015, 27.12.1990, 12,200.00 , 4019, 29.01.1991, 12,000.00 , 4029, 12.03.1991, 23,400.00 , 4032, 12.03.1991, 20,800.00 , 4033, 13,03,1991, 24,800.00 , 4034, 16.03.1991, 17,000.00 , 4057, 22.04.1991, 10,000.00 , 4058, 23.04.1991, 50,000.00 , 4059, 23.04.1991, 43,000.00 , 4060, 24.04.1991, 65,000.00 , 4061, 26.04.1991, 75,000.00 , 4062, 27.04.1991, 18,000.00 , 4063, 29.04.1991, 10,000.00 , 4064, 29.04.1991, 09,550.00 , 4065, 29.04.1991, 20,000.00 , 4066, 30.04.1991 , 70,000.00 @Z_TBL_END = (xiii) It has been further revealed that from the Cash receipt book bearing S.No. 8301 to 8400 used for issuing receipts to various agencies / individuals, some of the cash receipts were either not entered in full or not posted at all and the amount realized thereon embezzled. The cash receipt number are 8309, 8310, 8311, 8317, 8318, 8319, 8320, 8321, 8322, 8323, 8325, 8326, 8327, 8328 and 8329. (xiv) There were shown to have been raised fictitious debts by showing 1.38 trucks loads of fertilizers as dispatched to stores which as alleged were not actually received at the destinations. The storekeepers concerned confirmed non receipt of 138 such consignments. (xv) A doubtful payment of Rs. 2,07,320.00 was however charged off in the cash book as freight paid to the transporters. Similar doubtful/fictitious entries of freight payment amounting to Rs. 31,76,321.45 were shown charged off in the cash from 15.03.1990 to 26.06.1991 as there are no supporting vouchers for the same. (xvi) There is a loss of vital record including cash book from 01.07.1991 to 08.12.1991." 26. Similar doubtful/fictitious entries of freight payment amounting to Rs. 31,76,321.45 were shown charged off in the cash from 15.03.1990 to 26.06.1991 as there are no supporting vouchers for the same. (xvi) There is a loss of vital record including cash book from 01.07.1991 to 08.12.1991." 26. In addition to the above, petitioner was also charged under Sections 120-B, 468, 409, 201, 467 RPC and 5(2) of the Prevention of Corruption Act and Crime Case No. 9 of 1995 was registered against the petitioner by the Vigilance Department. The case pertained to embezzlement of Rs. 6,39,836.86. Vide order dated 1.10.1997, Special Judge Anti Corruption, Kashmir, discharged petitioner as sufficient evidence on record was not found to draw an inference that there was conspiracy between the petitioner and other two accused. The order dated 1.10.1997 was challenged by the State in Criminal revision No. 17/1997 but the same was dismissed by learned Single Judge of this court on 13.11.2001. 27. Vide order dated 20.10.1993 petitioner was suspended pending enquiry into the embezzlement/misappropriation of funds in the Regional Office of Federation at Srinagar and during the period of suspension petitioner was ordered to be attached with Divisional Commissioner, Jammu. The order of suspension was challenged by petitioner in SWP No. 1316/1993 on the ground that Managing Director was not competent to suspend the petitioner as his appointing authority was the Board. Vide interim order dated 3.11.1993 the order suspending petitioner was stayed. It appears that even after passing of interim order the petitioner remained attached with the Divisional Commissioner, Jammu, and that led to filing of contempt petition (i.e. COA No. 73/1994 ) by the petitioner. Notice in this contempt petition was issued to Managing Director and General Manager of the Federation. In the aforesaid writ petition respondents were directed to produce the record. On one date counsel appearing for respondents expressed his inability to produce the record relating to suspension order of the petitioner and other connected matters, which led to the court observing that in case record is not produced appropriate inference would be drawn against the respondents. Two LPAs were filed, one against the order passed in writ petition and second passed in contempt petition. Two LPAs were filed, one against the order passed in writ petition and second passed in contempt petition. Before the LPA Bench respondents submitted that during pendency of writ petition respondents had moved an application (CMP No. 539 of 1994) praying for final disposal of writ petition as the order suspending him had been withdrawn and cause of action alongwith lis came to an end. Vide order dated 19.8.1994, LPA Bench disposed of the appeals giving liberty to the Federation to pass any appropriate order in future, which may be warranted in law.Vide order dated 23.11.1994 petitioner was again placed under suspension pending enquiry into the case of misappropriation / embezzlement. That order came to be challenged by petitioner in SWP No. 1386/1994. Vide interim order dated 2.12.1994 order suspending the petitioner was stayed. On 19.11.1996 petition was admitted and stay order was allowed to continue during pendency of writ petition. It appears that Federation, for reasons best known to it, did not choose to file counter and even none represented and appeared on behalf of the Federation before the writ-Court on 3.7.2000, when the petition was called for hearing and finally disposed of. Since there was no representation on behalf of the Federation, the writ-Court allowed the petition mainly relying on the order passed by the Special Judge Anti Corruption discharging the petitioner in a corruption case. 28. It may be true that petitioner was able to get relief from the court against the order of his suspension but that by itself is not enough to hold that impugned order is an order of punishment. The track record of the petitioner while in service is far from satisfactory. Not only Pillai Commission indicted the petitioner but there have been serious allegations of corruption against him. In view of his doubtful integrity it cannot be contended that sufficient material was not there before the Board to form a bona fide opinion to compulsorily retire the petitioner in public interest. 29. Learned counsel for the petitioner lastly contended that there has been violation of principles of natural justice inasmuch as no opportunity of hearing was given to petitioner before passing impugned order. 30. Compulsory retirement does not involve civil consequences, as there is no loss of anything earned by an employee. There is no loss of pension also. 29. Learned counsel for the petitioner lastly contended that there has been violation of principles of natural justice inasmuch as no opportunity of hearing was given to petitioner before passing impugned order. 30. Compulsory retirement does not involve civil consequences, as there is no loss of anything earned by an employee. There is no loss of pension also. To retain an employee who can render useful service is always in `public interest. It is only when he ceases to render useful service that it would not be in public interest to keep him in service. Since compulsory retirement does not attach any stigma and is not penal in nature, therefore, rules of natural justice have no application. In State of Sikkim & Ors. v. Sonam Lala & Ors., AIR 1991 Supreme Court 534, their Lordships of the Supreme Court have held that before passing an order of compulsory retirement principles of natural justice need not be followed. The submission of learned counsel for the petitioner in this regard is thus rejected. 31. At this stage it also needs to be taken note of that after order dated 12.12.12003 compulsorily retiring the petitioner was passed by the Board, petitioner challenged the order in the present writ petition (SWP No. 329/2004). While writ petition was pending decision one Rajinder Singh, who happened to be the Vice Chairman, by describing himself as Chairman, passed two orders on 18.5.2004. In one order he remarked that SRO 233 dated 8.7.1988, which was applied to the case of petitioner for compulsory retiring him, was not applicable to the Federation and so application of SRO 233 for retiring the petitioner is a clear case of mis-use of authority which amounts to bad governance. He ordered an enquiry against Managing Director and Deputy General Manager, who according to him, were instrumental for applying SRO 233. By second order he recalled order dated 12.12.2003 compulsory retiring the petitioner. Order dated 18.5.2004 reads as under :-- " Office of Chairman JAKFED B.C Road Jammu @TBLCEN = ORDER Whereas, JAKFED after minutely and very carefully considering the representation of Shri A.K.Jain, the then Gen. Manager SRTC on deputation, who has been retired from the service vide order No. 10/Adm/00/03/3994-4002 dated 12.12.2003 is convinced that order of dated 12.12.2003 has been passed in haste manner without evaluating the service records of Shri Jain vis-`-vis other officials of the federation. Manager SRTC on deputation, who has been retired from the service vide order No. 10/Adm/00/03/3994-4002 dated 12.12.2003 is convinced that order of dated 12.12.2003 has been passed in haste manner without evaluating the service records of Shri Jain vis-`-vis other officials of the federation. Now it has come to our notice that vital issues in fact, has totally been ignored which has effected the service career of Shri Jain. In order to keep high standard of administrative transparency and to ensure fairplay and equal justice, the administrative propriety demands detailed review on the whole issue. In order to give a true and fair view of the matter, the order No. 10/Adm/00/03/3994/4002 dated 12.12.2003 is recalled w.e.f. date of its issue. Shri A. K. Jain who was on deputation as Gen. Manager SRTC is directed to assume his duties as Gen. Manager JAKFED forthwith. By order competent authority. Sd/-Chairman, JAKFED." 32. However, Chairman on coming to know about the aforequoted order directed that order passed by Rajinder Singh be kept in abeyance and matter was directed to be placed in the meeting of the Board of Directors to be held on 29.5.2004. 33. Before Board of Directors could meet to discuss the matter and take appropriate action, petitioner filed SWP No. 904/2004 challenging order dated 22.5.2004 passed by Respondent No. 3, whereby order dated 18.5.2004 passed by Rajinder Singh was kept in abeyance. On 29.5.2004 Board of Directors met to discuss the matter. As many as 10 members of the Board, including the Chairman, who signed the resolution, were present and passed the following resolution :-- " Resolution adopted by the Board of Directors of JAKFED in the Board meeting held on 29.05.2004. 1. Whereas vide order No.10/Adm/00/03/3994-4002 dated 12.12.2003 Board of Directors of Jammu & Kashmir Cooperative Supply & Marketing Federation Ltd. (JAKFED) retired Shri A. K. Jain, Deputy General Manager of JAKFED serving at that time as General Manager J&K State Road Transport Corporation on deputation with effect from the afternoon of 12th of December 2003 and also sanctioned one months salary in lieu of one months notice for the month following the date of his retirement under the relevant provisions of service rules as are indicated in the order dated 12.12.2003 referred to supra. 2. 2. And whereas Shri A. K. Jain filed service writ SWP No. 329/04 titled A.K.Jain V/s State & Others challenging his order of retirement dated 12.12.2003 as well as for other reliefs, the Honble High Court of J&K at Jammu and the same is pending disposal. 3. And whereas Shri A.K.Jain did not succeed in obtaining any interim directions against the order of his retirement dated 12.12.2003 from the Honble High Court in SWP No.329/04 referred above; 4. And whereas power to issue above said retirement order or to amend, alter or rescind the same exclusively vests with Board of Directors of JAKFED under law. 5. And whereas the Board of Directors have never delegated such powers to any individual like Chairman, Vice Chairman, Director or any other officer of the JAKFED. 6. And whereas Vice Chairman of JAKFED namely Shri Rajinder Singh vide his order No.P/C/8-11 dated 18.5.2004 without any authority express or implied, illegally recalled the order No. 10/Adm/00/03/3394-4002 dated 12.12.2003 which is subject matter in dispute in SWP No. 329/04 referred to above and wherein JAKFED is protecting its action with all zeal and endeavor. 7. And whereas the order dated 18.05.2004 was issued by Shri Rajinder Singh, Chairman JAKFED impersonating himself as Chairman JAKFED. Further order was issued by him at Purkhoo native place and bears no official seal or dispatch number of JAKFED. 8. And whereas it has wrongly been stated in the order No. P/C/8-11 dated 18.05.2004 that the matter was reconsidered by Board of Directors of JAKFED as no such matter was considered at any time and place by Board of Directors of JAKFED. As a matter of fact last meeting of Board of Directors was held on 20.03.2004 and in the said meeting no such matter was discussed or deliberated. After that Board of Directors have met today on 29.05.2004, it is further pointed out that no such matter was placed for consideration before any member of the Board by circulation as well right from the issuance of order dated 12.12.2003 till date. 9. And whereas under order No. P/C/1-7 dated 18.05.2004 Shri Rajinder Singh Vice Chairman JAKFED also made some wrong and uncalled for observations against the Managing Director and Deputy General Manager of JAKFED without any jurisdiction or power. 10. 9. And whereas under order No. P/C/1-7 dated 18.05.2004 Shri Rajinder Singh Vice Chairman JAKFED also made some wrong and uncalled for observations against the Managing Director and Deputy General Manager of JAKFED without any jurisdiction or power. 10. And whereas vide above quoted order Vice Chairman also without any power and jurisdiction ordered the enquiry against the Managing Director and Deputy General Manager of JAKFED. 11. And whereas Vice Chairman also issued following orders, PS/CM/04/12-16 dated 05.05.2004, PS/CM/04/17-22 dated 5.5.2004, PS/CM/O4/25-27 dated 5.5.2004, PS/ CM /04 /28-31 dated 5.5.2004, PS/CM/04/32-35 dated 8.5.2004, P/C/8-11 dated 18.5.2004 and PC / 13-14 dated 20.5.2004 without any authority and jurisdiction. 12. And whereas all the directions quoted subsequently to the one as stated at top are issued by the Vice Chairman without any authority or power or competence and suffer from same patent error of jurisdiction, competence as the one quoted at the top. 13. And whereas all above quoted orders thus are void abinitio and non-existence in the eyes of law. 14. And whereas Chairman as well as Managing Director expressly did not accept the above quoted illegal and void directions issued by the Vice Chairman. 15. And whereas a meeting of BOD was convened today viz. 29.05.2004 in Head Office of JAKFED at B. C. Road Jammu to discuss along with others the above said matter denovo. 16. And whereas all above said orders were discussed threadbare by the Directors on the Board of JAKFED. 17. And whereas after thorough deliberations the Board of Directors have come to the conclusion that all above quoted orders are issued by Vice Chairman JAKFED without any power, authority or competence and as such are nullity in the eyes of law. It is, therefore, resolved by the Board of Directors of the JAKFED that the orders No. PS/CM/04/12-16 dated 5.5.2004, PS/CM/04 /17-22 dated 5.5.2004, PS/CM/04/23-27 dated 5.5.2004, PS/CM/p4/28-31 dated 5.5.2004, PS/CM/04/32-35 dated 8.5.2004, P/C/8-11 dated 18.5.2004 and PC/13-14 dated 20.5.2004 are void abinitio and nullity in the eyes of law and shall not confer any right or any benefit to any individual or individuals whether in service of JAKFED or not and also the said orders will not create any liability / obligation against any person or persons / officials of JAKFED and for all practical purposes will be considered as non existent right from the date of their issue." 34. The order compulsorily retiring the petitioner was on the basis of resolution passed by the Board, as the Board alone was competent to prematurely retire him. Rajinder Singh, who happened to be the Vice Chairman had no authority to assume power of the Chairman and issue an order recalling the order which was earlier passed in pursuance of the Board resolution. 35. It also needs to be noticed that the manner in which Rajinder Singh, Vice Chairman, passed order recalling impugned order dated 12.12.2003 and that too when he himself was a party to the resolution of the Board compulsorily retiring the petitioner clearly shows the extent to which the petitioner manipulated things in his favour. The order passed by Rajinder Singh Vice Chairman being totally illegal, Chairman did not commit any illegality in keeping that order in abeyance. 36. Thus, in the facts and circumstances of the case, no exception can be taken to order dated 12.12.2003 compulsorily retiring the petitioner and, therefore, both the writ petitions, being without any merit, are dismissed, with no order as to costs.