Sh. Narotam Dutt Sharma v. H. P. State Co-operative Bank Ltd.
2016-12-28
TARLOK SINGH CHAUHAN
body2016
DigiLaw.ai
ORDER : Tarlok Singh Chauhan, J. This order shall dispose of the application filed by the applicant/defendant No.4 for rejection of the plaint on the ground that it does not disclose any cause of action against him. 2. The non-applicant/plaintiff (hereinafter referred to as the ‘plaintiff’), is an ex-employee of defendant No.1- bank and aggrieved by his supersession has filed this suit mainly seeking therein the decree of declaration, mandatory injunction and compensation to the tune of Rs. 1 crore on account of damages caused to his reputation as well as harassment and mental agony caused to him. 3. Besides, the H.P. State Co-operative Bank Ltd, through its Chairman/Managing Director having been impleaded as defendant No.1, the plaintiff has also impleaded the Managing Director of the Bank as defendant No.2 and in addition thereto, certain private parties including defendant No.4 Amit Kashyap, who worked as the Managing Director of defendant No.1 from the period w.e.f. 26.10.2010 to 29.01.2013 and thereafter 02.07.2013 to 27.05.2014 have also been impleaded as party defendant by name. 4. It is averred that prior to joining of defendant No.4 as Managing Director of defendant No.1-Bank, the plaintiff was not personally known to him. Whatever documents and materials were brought before him as regards the work and conduct of the plaintiff, appropriate decision in light of the extant service rules was taken thereupon, that too, in a bonafide manner without any ill-will or any other extraneous consideration. Even otherwise, in case the plaintiff was not satisfied with the action/inaction on the part of the defendant No.4, he was free to avail all suitable departmental or legal remedies against these orders, which admittedly have not been availed of or resorted to by the plaintiff. It is further averred that looking to the nature of the relief sought for in the suit, the matter if at all justiciable is inter se between the plaintiff from one hand and defendants No. 1 and 2 on the other hand and the other defendants including defendant No.4 have no concern with the same. The impleadment of the applicant/defendant No.4 by name, signifies as regards the relief No.3 i.e. relief for grant of damages/compensation to the tune of Rs. 1 crore. He has roped the applicant by name, however, such impleadment is not only unnecessary, but it is gross abuse of the process of the Court. 5.
The impleadment of the applicant/defendant No.4 by name, signifies as regards the relief No.3 i.e. relief for grant of damages/compensation to the tune of Rs. 1 crore. He has roped the applicant by name, however, such impleadment is not only unnecessary, but it is gross abuse of the process of the Court. 5. It is averred that all the actions of the applicant/defendant No.4 have been taken in his official capacity, that too, in a bonafide manner in discharge of his official duties. That apart, the averments made in the plaint as such suffer from serious vice of insufficiency inasmuch as the plaint does not disclose any cause of action against the applicant and, therefore, deserves to be dismissed. It is averred that there is lack of necessary averments or allegations against the applicant on the basis of which the decree can be passed against the defendant No.4. 6. The plaintiff has contested the application by filing a reply wherein preliminary submission has been made with regard to the maintainability of the application on the ground that the same is misconceived and therefore, deserves to be dismissed. That apart, it is claimed that a legal notice dated 17.7.2015 was issued to the applicant with the same averments, however, he failed to reply the same and, therefore, it does not lie in his mouth to make averments in the application that the suit is not maintainable. As a matter of fact, the applicant/defendant No.4 had failed to discharge his duties in accordance with rules and regulations and that too, promptly and, therefore, the suit is maintainable. In addition thereto, it is submitted that categoric allegations of malafide have been made in paras 10 to 18 of the plaint, which is indicative of legal malafide on the part of the applicant. The adamancy shown by the applicant to change the Inquiry Officer is indicative of his malafide attitude towards the plaintiff. On reply to the merits of the application, it is submitted that the private parties including the applicant are necessary parties to the suit as they cannot escape the liability as it is on account of their acts that the plaintiff has been constrained to file the instant suit. I have heard the learned counsel for the parties and have gone through the record of the case carefully. 7.
I have heard the learned counsel for the parties and have gone through the record of the case carefully. 7. It is not in dispute that the applicant/defendant No.4 has been made as a party in this suit only because he at one time remained the Managing Director of the defendant No.1-Bank. Therefore, as per the settled law the acts done in discharge of official duty, are normally protected and are immune from the prosecution provided that these acts are done in good faith are bonafide and should not be tainted with the bias of malafides. 8. Mr. P.P. Chauhan, learned counsel for the non-applicant/plaintiff would argue that it is only on account of illegal and malicious act of the applicant that he has been arrayed as a party to the suit and to buttress this submission he has relied upon the contents of paras 10 to 18 of the plaint which reads thus: “10. That the aforesaid request for change of enquiry officer made by the plaintiff vide letter dated 28.01.2011 was turned down vide letter dated 01.03.2011 illegally and maliciously and without passing a speaking order. 11. That on 24.04.2011 vide an un-dated letter the plaintiff had made a request for being promoted to the post of Senior Manager in pursuance to the approval by the Registrar dated 17.08.2010. However, no heed was paid thereto. 12. That vide impugned letter dated 11.06.2011, the request for further promotion during the pendency of the departmental proceedings made on 24.04.2011 vide an undated letter was turned down. The said communication was wholly illegal and against the well settled legal position by Hon’ble Supreme Court of India and this Hon’ble Court that in case during Departmental Promotion Committee, no chargesheet has been issued either in criminal case or departmental case, the promotions cannot be withheld. This principle of law was very much in the knowledge of the Bank and has been ignored purposely and knowingly. 13. That subsequent to the aforesaid, vide a letter of plaintiff dated 29.06.2011 it was brought to the notice of the concerned authority that since the enquiry had been conducted on 20.04.2011 and a report thereof had been submitted to the concerned authority thereof, promotion orders of the plaintiff be kindly not delayed. 14.
13. That subsequent to the aforesaid, vide a letter of plaintiff dated 29.06.2011 it was brought to the notice of the concerned authority that since the enquiry had been conducted on 20.04.2011 and a report thereof had been submitted to the concerned authority thereof, promotion orders of the plaintiff be kindly not delayed. 14. That in the month of June 2012, the plaintiff received an order whereby the plaintiff was informed that though the enquiry report had been submitted by the enquiry officer on 22.04.2011 wherein all three charges levelled against the plaintiff stood proved the same was not being accepted in view of the objection raised by the plaintiff. It was further pointed out therein that the enquiry had been conducted within a day. Hence a de-novo enquiry by the same official was ordered, copy of which was received through fax by the plaintiff on 15.06.2012. It is further stated that the said inquiry has been conducted by Sh. Jitender Jamwal, the then Assistant Manager in District Office Mandi and the Defendant No.6 herein, who was present on 20.04.2011 and which fact is discernible from the order dated 12.10.2012 and also verifiable from the fact that the proceedings have been written in his handwriting. The said Sh. Jitender Jamwal was neither Inquiry Officer nor in anyway connected with the inquiry. The said Sh. Jitender Jamwal was working in District Office, Mandi and the plaintiff was working under him and during the course of their official dealings, there were clashes between the two on many occasion and the said Sh. Jitender Jamwal used to threat the plaintiff with dire consequences. This is how the said defendants No. 5 and 6 have taken undue interest in harming the career and reputation of the plaintiff by holding the inquiry in illegal and arbitrary manner. 15. That in response to the aforesaid order directing a de-novo enquiry by the same official, the plaintiff once again reiterated his objection qua the appointment of the same enquiry officer. The same was filed/received in the office of the concerned authority, i.e. the defendant Nos. 2, 4 and 5 on 20.06.2012. 16. That thereafter to the utter surprise of the plaintiff vide impugned order dated 12.10.2012 the Managing Director of the Bank i.e. the defendant Nos.
The same was filed/received in the office of the concerned authority, i.e. the defendant Nos. 2, 4 and 5 on 20.06.2012. 16. That thereafter to the utter surprise of the plaintiff vide impugned order dated 12.10.2012 the Managing Director of the Bank i.e. the defendant Nos. 2 and 4 have ordered the dismissal of the plaintiff from service in the utmost illegal, arbitrary and malicious manner with a view to harass the plaintiff as well as jeopardize his reputation. 17. That from aforementioned facts and attending circumstances it is clearly evident that the memorandum dated 28.09.2010 was issued post grant of approval dated 17.08.2010 wherein the promotion of the plaintiff by the Registrar had been approved on 22.04.2011 but till June, 2012 no action had been taken thereon. Moreover, after June, 2012 nothing has been done qua the pending enquiry which had been ordered undated and received by the plaintiff through fax on 15.06.2012. 18. That the aforesaid facts and attending circumstances reflected a complete non-application of mind on the part of the Managing Director i.e. the defendant Nos. 2 and 4 besides malicious act on his part with a view to harass the plaintiff and cause loss of reputation and monetary benefits to him. As the Managing Director of the Bank, i.e. the defendant Nos. 2 and 4, re-ordered holding of fresh enquiry, as the enquiry report submitted on 22.04.2011 was completed within a day. After having passed the aforesaid order received by the plaintiff in 15.06.2012, the Managing Director of the Bank i.e. the defendant Nos. 2 and 4 took a volte face and based on the enquiry report submitted on 22.04.2011 which was completed within a day proceeded to dismiss the plaintiff.” 9. As observed earlier, it is only on account of the fact that the applicant/defendant No.4 has been impleaded as a party as at the relevant time he served as Managing Director of the Bank, therefore, malafide in the case of the applicant would mean any act performed by him not for the proposed purpose. 10. What is the true import of malafides in relation to exercise of power has been succinctly brought forth by Hon’ble Mr. Justice Krishna Iyer in State of Punjab and another vs. Gurdial Singh and others, AIR 1980 SC 319 in his Lordship’s inimitable style in the following manner: “9.
10. What is the true import of malafides in relation to exercise of power has been succinctly brought forth by Hon’ble Mr. Justice Krishna Iyer in State of Punjab and another vs. Gurdial Singh and others, AIR 1980 SC 319 in his Lordship’s inimitable style in the following manner: “9. The question, then, is what is mala fides in the jurisprudence of power? Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad faith which invalidates the exercise of power - sometimes called colourable exercise or fraud on power and often-times overlaps motives, passions and satisfactions - is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfillment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion. In a broad, blurred sense, Benjamin Disraeli was not off the mark even in Law when he stated: "I repeat…...that all power is a trust -- that we are accountable for its exercise -- that, from the people, and for the people, all springs, and all must exist". Fraud on power voids the order if it is not exercised bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purpose and intent of the power, whether this be malice- laden or even benign. If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power, vitiates the acquisition or other official act.” 11. It is more than settled that malafide should be pleaded by specific allegations.
If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power, vitiates the acquisition or other official act.” 11. It is more than settled that malafide should be pleaded by specific allegations. Merely to say that the action was not justified and it was out of bias that the impugned action was taken, is not, in the least, any allegation of malafide. 12. The legal meaning of ‘malice’ and the grounds for holding an action of the State to be malafide was considered by the Hon’ble Supreme Court in State of Andhra Pradesh and others vs. Goverdhanlal Pitti (2003) 4 SCC 739 wherein malice were attributed to the State in the matter of acquiring of land and it was held : “12. The legal meaning of malice is "ill-will or spite towards a party and any indirect or improper motive in taking an action". This is sometimes described as "malice in fact". "Legal malice" or "malice in law" means 'something done without lawful excuse'. In other words, 'it is an act done wrongfully and wilfully without reasonable or probable cause, and not necessarily an act done from ill feeling and spite'. It is a deliberate act in disregard of the rights of others'. [See Words and Phrases legally defined, Third Edition, London Butterworths 1989]. 13. Where malice is attributed to the State, it can never be a case of personal ill-will or spite on the part of the State. If at all, it is malice in legal sense, it can be described as an act which is taken with an oblique or indirect object. Prof. Wade in its authoritative work on Administrative Law [8th Edn., at pg. 414] based on English decisions and in the context of alleged illegal acquisition proceedings, explains that an action by the State can be described mala fide if it seek to 'acquire land' 'for a purpose not authorised by the Act'. The State, if it wishes to acquire land, should exercise its power bona fide for the statutory purpose and for none other'. 14.
The State, if it wishes to acquire land, should exercise its power bona fide for the statutory purpose and for none other'. 14. The legal malice, therefore, on the part of the State as attributed to it should be understood to mean that the action of the State is not taken bona fide for the purpose of the Land Acquisition Act and it has been taken only to frustrate the favourable decisions obtained by the owner of the property against the State in the eviction and writ proceedings.” 13. Reverting back to the case, a perusal of paras 10 to 18 of the plaint reveal that only general and vague allegations of malafides have been alleged and the same obviously cannot be treated to be a foundation for the malafide. There must be specific pleading regarding malafides and as observed above, the mere use of expression as ‘malafides’ or for extraneous reasons or for an ulterior motive etc. is not enough and details must be furnished and material facts have to be set out against the particular person alongwith the incidents in a manner as provided under Order 6 Rule 4 CPC. 14. Having failed to establish ‘malice’ in fact, Mr. P.P.Chauhan, learned counsel for the plaintiff would then argue that malice in law is writ large in the action of the applicant. This plea is not legally tenable after all legal malafide on the part of the applicant/defendant No.4 can only be understood to mean that the action of the applicant is not taken bonafidely. There is a marked difference between a wrong, erroneous or an illegal decision from the one which is tainted with malafide. From the perusal of the pleadings as quoted above, it is clearly evident that the allegations of malafide are far too general and vague and lack any specific facts and acts and, therefore, such vague allegation cannot be treated to be with foundation for the malafide. Allegations of malafide require high order of credibility, particularly when the imputations are made against the holder of an office having higher responsibility. There must be an averment to bad faith. After all, the malafide means dishonest intention of corrupt motive. Further, the malice must be based on factual matrix which cannot remain in the realm of insinuation, surmises, conjectures or vague suggestions. 15.
There must be an averment to bad faith. After all, the malafide means dishonest intention of corrupt motive. Further, the malice must be based on factual matrix which cannot remain in the realm of insinuation, surmises, conjectures or vague suggestions. 15. In Ludovico Sagrado Goveia vs. Cirila Rosa Maria Pinto and others (2016) 9 SCC 615 , the Hon’ble Supreme Court held as under: “24. Ground VI is totally vague and lacking in particulars. A charge of malafides has to be made out with great clarity and particularity. Also, the appellant cannot claim to be in the dark as every auction-sale was publicly advertised in newspapers. We, therefore, do not accede to the counsel’s fervent plea to remit the rest of the writ petition to the High Court for hearing.” 16. Confronted with this situation, learned counsel for the non-applicant/plaintiff would then argue that even in absence of specific instances regarding malafides, he would establish the same by leading evidence as he has sufficient weapons in his armoury to establish and prove these facts. 17. I am afraid that even such contention cannot be accepted, as it is more than settled that the pleadings are the foundation of the evidence and no amount of evidence beyond the pleadings can be led. This position has been long settled and was reiterated by a learned Division Bench of this Court (of which I was a member) wherein this Court has elaborately considered in detail the relevance of pleadings in State of Himachal Pradesh and others versus Baldev and others 2016 (1) SLC 361 and it was observed as under:- “38. While deciding a civil suit, the pleadings are the foundation of the case. The pleadings play an important role in making the judgment and decree and that is why it is said that the pleadings are the heart, soul and essential foundation of a judicial verdict. It is the bedrock of the judicial disposal. 39. In the instant case, at the cost of repetition, the plaintiffs-respondents have not prayed for relief of compensation or recovery of possession, no such foundation was laid. 40. The Apex Court in the case titled as State of Orissa & Anr. versus Mamata Mohanty, reported in 2011 AIR SCW 1332, held that the relief, not founded on pleadings, cannot be granted. It is apt to reproduce para 35 of the judgment herein: "35.
40. The Apex Court in the case titled as State of Orissa & Anr. versus Mamata Mohanty, reported in 2011 AIR SCW 1332, held that the relief, not founded on pleadings, cannot be granted. It is apt to reproduce para 35 of the judgment herein: "35. Pleadings and particulars are required to enable the court to decide the rights of the parties in the trial. Thus, the pleadings are more to help the court in narrowing the controversy involved and to inform the parties concerned to the question in issue, so that the parties may adduce appropriate evidence on the said issue. It is a settled legal proposition that "as a rule relief not founded on the pleadings should not be granted." Therefore, a decision of a case cannot be based on grounds outside the pleadings of the parties. The pleadings and issues are to ascertain the real dispute between the parties to narrow the area of conflict and to see just where the two sides differ. (Vide : Sri Mahant Govind Rao v. Sita Ram Kesho, (1898) 25 Ind. App. 195; M/s. Trojan & Co. v. RM. N.N. Nagappa Chettiar, AIR 1953 SC 235 ; Ishwar Dutt v. Land Acquisition Collector & Anr., AIR 2005 SC 3165 : (2005 AIR SCW 578); and State of Maharashtra v. Hindustan Construction Company Ltd., (2010) 4 SCC 518 : (2010 AIR SCW 2265)) " 41. The parties, the Courts of first instance, the Appellate Courts or the Revisional Courts cannot travel beyond the pleadings in view of the mechanism provided in CPC, which provides as to what procedure is to be followed after trial stage, i.e. after framing the issues, in terms of Order XIV CPC and how it has to be taken to its logical end after framing the issues. 42. The Apex Court in the case titled as Hari Chand versus Daulat Ram, reported in AIR 1987 Supreme Court 94, held that when the plaintiff fails to prove his case as pleaded in the plaint, the relief cannot be granted by the Court, which is neither pleaded nor prayed. It is apt to reproduce para 11 of the judgment herein: "11. On a consideration of all the evidences on record it is clearly established that the alleged encroachment by construction of kuchha wall and khaprail over it are not recent constructions as alleged to have been made in May 1961.
It is apt to reproduce para 11 of the judgment herein: "11. On a consideration of all the evidences on record it is clearly established that the alleged encroachment by construction of kuchha wall and khaprail over it are not recent constructions as alleged to have been made in May 1961. On the other hand, it is crystal clear from the evidences of Ramji Lal P.W. 1 and Daulat Ram D.W. 1 that the disputed wall with khaprail existed there in the disputed site for a long time, that is 28 years before and the wall and the khaprail have been affected by salt as deposed to by these two witnesses. Moreover the court Amin's report 57C also shows the said walls and khaprail to be 25-30 years old in its present condition. The High Court has clearly come to the finding that though the partition deed was executed by the parties yet there was no partition by metes and bounds. Moreover there is no whisper in the plaint about the partition of the property in question between the co-sharers by metes and bounds nor there is any averment that the suit property fell to the share of plaintiffs vendor Ramji Lal and Ramji Lal was ever in possession of the disputed property since the date of partition till the date of sale to the plaintiff. The plaintiff has singularly failed to prove his case as pleaded in the plaint." 43. The Apex Court in the case titled as Bachhaj Nahar versus Nilima Mandal & Ors., reported in 2009 AIR SCW 287, held that the Court cannot, on finding that the plaintiff has not made out the case putforth by him, grant some other relief. It is apt to reproduce para 12 of the judgment herein: "12. It is thus clear that a case not specifically pleaded can be considered by the court only where the pleadings in substance, though not in specific terms, contains the necessary averments to make out a particular case and the issues framed also generally cover the question involved and the parties proceed on the basis that such case was at issue and had led evidence thereon.
As the very requirements indicate, this should be only in exceptional cases where the court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and that the parties being conscious of the issue, had led evidence on such issue. But where the court is not satisfied that such case was at issue, the question of resorting to the exception to the general rule does not arise. The principles laid down in Bhagwati Prasad and Ram Sarup Gupta (supra) referred to above and several other decisions of this Court following the same cannot be construed as diluting the well settled principle that without pleadings and issues, evidence cannot be considered to make out a new case which is not pleaded. Another aspect to be noticed, is that the court can consider such a case not specifically pleaded, only when one of the parties raises the same at the stage of arguments by contending that the pleadings and issues are sufficient to make out a particular case and that the parties proceeded on that basis and had led evidence on that case. Where neither party puts forth such a contention, the court cannot obviously make out such a case not pleaded, suo motu." 44. The pleadings and particulars are necessary to enable the Court to decide the rights of the parties in the trial. 45. The Apex Court in the case titled as National Textile Corporation Ltd. versus Nareshkumar Badrikumar Jagad & Ors., reported in 2011 AIR SCW 6180, has laid down the same principle. It is apt to reproduce para 7 of the judgment herein: "7. Pleadings and particulars are necessary to enable the court to decide the rights of the parties in the trial. Therefore, the pleadings are more of help to the court in narrowing the controversy involved and to inform the parties concerned to the question in issue, so that the parties may adduce appropriate evidence on the said issue. It is a settled legal proposition that "as a rule relief not founded on the pleadings should not be granted". A decision of a case cannot be based on grounds outside the pleadings of the parties. The pleadings and issues are to ascertain the real dispute between the parties to narrow the area of conflict and to see just where the two sides differ. (Vide: M/s. Trojan & Co.
A decision of a case cannot be based on grounds outside the pleadings of the parties. The pleadings and issues are to ascertain the real dispute between the parties to narrow the area of conflict and to see just where the two sides differ. (Vide: M/s. Trojan & Co. v. RM N.N. Nagappa Chettiar, AIR 1953 AIR 235; State of Maharashtra v. M/s. Hindustan Construction Company Ltd., AIR 2010 SC 1299 ; and Kalyan Singh Chouhan v. C.P. Joshi, AIR 2011 SC 1127 )." 18. The learned counsel for the non-applicant/plaintiff would thereafter argue that an adverse inference ought to be drawn against the applicant/defendant No.4 as despite the service of notice under Section 80 CPC upon the applicant, he did not choose to contest the same by filing reply and thereby attorned to the contents therein and would rely upon the judgment rendered by the three Hon’ble Judges of the Hon’ble Supreme Court in Salem Advocate Bar Association, T.N. vs. Union of India (2005) 6 SCC 344 wherein it was held as under: “38. Section 80(1) of the Code requires prior notice of two months to be served on the Government as a condition for filing a suit except when there is urgency for interim order in which case the Court may not insist on the rigid rule of prior notice. The two months period has been provided for so that the Government shall examine the claim put up in the notice and has sufficient time to send a suitable reply. The underlying object is to curtail the litigation. The object also is to curtail the area of dispute and controversy. Similar provisions also exist in various other legislations as well. Wherever the statutory provision requires service of notice as a condition precedent for filing of suit and prescribed period therefore, it is not only necessary for the governments or departments or other statutory bodies to send a reply to such a notice but it is further necessary to properly deal with all material points and issues raised in the notice. The Governments, Government departments or statutory authorities are defendants in large number of suits pending in various courts in the country. Judicial notice can be taken of the fact that in large number of cases either the notice is not replied or in few cases where reply is sent, it is generally vague and evasive.
The Governments, Government departments or statutory authorities are defendants in large number of suits pending in various courts in the country. Judicial notice can be taken of the fact that in large number of cases either the notice is not replied or in few cases where reply is sent, it is generally vague and evasive. The result is that the object underlying Section 80 of the Code and similar provisions gets defeated. It not only gives rise to avoidable litigation but also results in heavy expense and cost to the exchequer as well. Proper reply can result in reduction of litigation between State and the citizens. In case proper reply is sent either the claim in the notice may be admitted or area of controversy curtailed or the citizen may be satisfied on knowing the stand of the State. There is no accountability in the Government, Central or State or the statutory authorities in violating the spirit and object of Section 80. 39. These provisions cast an implied duty on all concerned governments and States and statutory authorities to send appropriate reply to such notices. Having regard to the existing state of affairs, we direct all concerned governments, Central or State or other authorities, whenever any statute requires service of notice as a condition precedent for filing of suit or other proceedings against it, to nominate, within a period of three months, an officer who shall be made responsible to ensure that replies to notices under Section 80 or similar provisions are sent within the period stipulated in a particular legislation. The replies shall be sent after due application of mind. Despite such nomination, if the Court finds that either the notice has not been replied or reply is evasive and vague and has been sent without proper application of mind, the Court shall ordinarily award heavy cost against the Government and direct it to take appropriate action against the concerned Officer including recovery of costs from him.” 19. It is not in dispute that defendant No.1 is only a Co-operative Society and not Government and, therefore, the provisions of Section 80 CPC do not apply. However, learned counsel for the non-applicant/plaintiff would persist that defendant No.1 being a statutory authority would nonetheless fall within the definition of Government as provided under Section 80 CPC.
It is not in dispute that defendant No.1 is only a Co-operative Society and not Government and, therefore, the provisions of Section 80 CPC do not apply. However, learned counsel for the non-applicant/plaintiff would persist that defendant No.1 being a statutory authority would nonetheless fall within the definition of Government as provided under Section 80 CPC. However, I find this contention to be based upon a complete misunderstanding of the provisions of the H.P. State Co-operative Societies Act. Defendant No.1 is only constituted and not created under the Act and functions like any other Co-operative Society and is mainly regulated in terms of the provisions of the Act, except as provided in the byelaws of the Society. The State has no say in the functions of the Society, membership, acquisition of shares and all other matters are governed by the byelaws framed under the Act. The terms and conditions of the employees of the Cooperative Society indisputably are governed by the Rules. 20. For the proper understanding of this proposition, it would be necessary to advert to the judgment rendered by the Hon’ble Supreme Court in S.S. Rana vs. Registrar, Coop. Societies and another (2006) 11 SCC 634 , wherein it was observed as under: “9. It is not in dispute that the Society has not been constituted under an Act. Its functions like any other Cooperative Society are mainly regulated in terms of the provisions of the Act, except as provided in the bye-laws of the Society. The State has no say in the functions of the Society. Membership, acquisition of shares and all other matters are governed by the bye-laws framed under the Act. The terms and conditions of an officer of the Co-operative Society, indisputably, are governed by the Rules. Rule 56, to which reference has been made by Mr. Vijay Kumar, does not contain any provision in terms whereof any legal right as such is conferred upon an officer of the Society. 10. It has not been shown before us that the State exercises any direct or indirect control over the affairs of the Society for deep and pervasive control. The State furthermore is not the majority shareholder. The State has the power only to nominate one director.
10. It has not been shown before us that the State exercises any direct or indirect control over the affairs of the Society for deep and pervasive control. The State furthermore is not the majority shareholder. The State has the power only to nominate one director. It cannot, thus, be said that the State exercises any functional control over the affairs of the Society in the sense that the majority directors are nominated by the State. For arriving at the conclusion that the State has a deep and pervasive control over the Society, several other relevant questions are required to be considered, namely: (1) How the Society was created?; (2) Whether it enjoys any monopoly character?; (3) Do the functions of the Society partake to statutory functions or public functions?; and (4) Can it be characterized as public Authority? 11. Respondent No.2, the Society does not answer any of the afore-mentioned tests. In the case of a nonstatutory society, the control thereover would mean that the same satisfies the tests laid down by this Court in Ajay Hasia vs. Khalid Mujib Sehravardi [ (1981) 1 SCC 722 ]. [See Zoroastrian Coop. Housing Society Ltd. vs. District Registrar, Coop. Societies (Urban) & Ors. reported in 2005 (5) SCC 632 .] 12. It is well settled that general regulations under an Act, like Companies Act or the Co-operative Societies Act, would not render the activities of a company or a society as subject to control of the State. Such control in terms of the provisions of the Act are meant to ensure proper functioning of the Society and the State or statutory authorities would have nothing to do with its day-to-day functions. 13. The decision of the Seven Judge Bench of this Court in Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology (2002) 5 SCC 111 , whereupon strong reliance has been placed, has no application in the instant case. In that case, the Bench was deciding a question as to whether in view of the subsequent decisions of this Court, the law was correctly laid down in Sabajit Tewary vs. Union of India & Ors. [ (1975) 1 SCC 485 ], and it not whether the same deserved to be overruled. The majority opined that the Council of Scientific and Industrial Research (CSIR) was 'State' within the meaning of Article 12 of the Constitution of India.
[ (1975) 1 SCC 485 ], and it not whether the same deserved to be overruled. The majority opined that the Council of Scientific and Industrial Research (CSIR) was 'State' within the meaning of Article 12 of the Constitution of India. This Court noticed the history of the formation thereof, its objects and functions, its management and control as also the extent of financial aid received by it. Apart from the said fact it was noticed by reason of an appropriate notification issued by the Central Government that CSIR was amenable to the jurisdiction of the Central Administrative Tribunal in terms of Section 14(2) of the Administrative Tribunals Act, 1985. It was on the aforementioned premises this Court opined that Sabhajit Tewary (supra) did not lay down the correct law. This Court reiterated the following six tests laid down in Ajay Hasia vs. Khalid Mujib Sehravardi [ (1981) 1 SCC 722 ]: "(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with Governmental character. (3) It may also be relevant factor ….. whether the corporation enjoys monopoly status which is State conferred or State protected. (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (5) If the functions of the corporation are of public importance and closely related to Governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. (6) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference' of the corporation being an instrumentality or agency of Government." This Court further held (Pradeep Kumar Biswas case, SCC P. 134, para 40): " 40. This picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12.
This picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be -- whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State." (Emphasis supplied) 14. As the respondent No.1 does not satisfy any of the tests laid down in Pradeep Kumar Biswas (supra), we are of the opinion that the High Court cannot be said to have committed any error in arriving at a finding that the respondent-Bank is not a State within the meaning of Article 12 of the Constitution of India.” 21. Notably, defendant No.1-Bank in the instant case is not different from the bank which was in issue before the Hon’ble Supreme Court in S.S. Rana’s case. That apart, this Court has otherwise repeatedly held that defendant No.1- bank to be not falling within the meaning of Article 12 or under Article 226 of the Constitution. (Refer: Chandresh Kumar Malhotra vs. H.P.State Coop. Bank and others 1993 (2) Sim. L.C. 243, Vikram Chauhan vs. The Managing Director and others Latest HLJ 2013 (HP) 742 (FB), Thalappalam Ser. Co-op. Bank Ltd. and others vs. State of Kerala and others 2013 AIR SCW 5683 and Sanjeev Kumar and others vs. State of H.P. and others Latest HLJ 2014 (HP) 1061). 22. It needs to be clarified that defendant No.1 is a Co-operative Society governed by the Act wherein though there is a provision for mandatory notice provided under Section 76, however, the same is applicable only to the cases where the dispute touches the Constitution, management or the business of the Society.
22. It needs to be clarified that defendant No.1 is a Co-operative Society governed by the Act wherein though there is a provision for mandatory notice provided under Section 76, however, the same is applicable only to the cases where the dispute touches the Constitution, management or the business of the Society. However, even this provision does not apply to the disputes involving the matters pertaining to service of the employees of the Co-operative Society as held by this Court in Sumer Chand Katoch vs. The Kangra Central Cooperative Bank Ltd. 1996 (2) Sim. L.C. 134 wherein it was held as under: “13. The next question is whether the District Judge is right in rejecting the plaint under Order VII, Rule 11 (d), C P. C. on the ground that the suit was not maintainable without giving notice under section 76 of the Act. Section 76 of the Act is :- "76. Notice necessary in suits.- No suit shall be instituted against a society or any of its officers in respect of any act touching the constitution, management or the business of the society, until the expiration of two months after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims ; and the plaint shall contain a statement that such notice has been so delivered or left." 14. By now it is well settled that section 76 of the Act is mandatory and its compliance is must and does not permit any exception as is apparent from its language, which is couched in negative terms. Its language is similar to that of section 80, C. P C , which fell for consideration of the Supreme Court of India in State of Madras v C. P. Agencies, AIR 1960 SC 1309 , wherein the learned Judges have held that:- "........ . Section 80 is express, explicit and mandatory and admits of no implications or except ions............ The object of section 80 is manifestly to give the Government or the public officer sufficient notice of the case which is proposed to be. brought against it or him so that it or he may consider the position and decide for itself or himself whether the claim of the plaintiff should be accepted or resisted.
The object of section 80 is manifestly to give the Government or the public officer sufficient notice of the case which is proposed to be. brought against it or him so that it or he may consider the position and decide for itself or himself whether the claim of the plaintiff should be accepted or resisted. In order to enable the Government or the public officer to arrive at a decision it is necessary that it or he should be informed of the nature of the suit proposed to be filed against it or him and the facts on which the claim is founded and the precise reliefs asked for." 15. Under section 76 of the Act also notice of two months is required to be delivered to the Registrar, Cooperative Societies or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims so that the Registrar may look into the matter and issue appropriate directions to the management of the cooperative society either to contest the claim or to accept it in the interest of the society From the scheme of the Act it is clear that the Registrar, Co-operative Societies is a statutory authority who exercises overall control in respect of constitution, management and business of a co-operative society, as such, he plays a vital role in respect of a disputes touching the constitution, management and business of the society. Section 76 of the Act further provides that the plaint shall contain a statement that such a notice has been so delivered or left Therefore, if the mandatory notice under section 76 of the Act is not delivered or left, the plaint can be rejected under Order VII, Rule II (d), C P. C In view of this, the District Judge is right to the extent that compliance of section 76 of the Act is mandatory before a suit is entertained in respect of a dispute touching the constitution, management or the business of the society. (Please see: Gangappa Gurupandappa Gugwad v. Rachawwa, AIR 1971 SC 442 and The Jwali Harijan Co-operative Agricultural Society v. Maghu etc etc . AIR 1992 HP 34 . 16.
(Please see: Gangappa Gurupandappa Gugwad v. Rachawwa, AIR 1971 SC 442 and The Jwali Harijan Co-operative Agricultural Society v. Maghu etc etc . AIR 1992 HP 34 . 16. However, the vital question for the application of section 76 of the Act is whether the matter in respect of setting aside the termination order and grant of consequential relief is a matter touching the constitution, management or the business of the society, as stated in section 76 of the Act. This Court may hold without any fear of contradiction that it is not an act touching she constitution and the business of the society. In Deccan Merchants Co-operative Ltd v. Dalichand Jugraj Jain, AIR 1969 SC 1320 ; Co-operative Central Bank Ltd v Additional Industrial Tribunal, Andhra Pradesh, AIR U70 SC 245 and The Allahabad District Co operative Ltd v Hanuman Dutt Tewari, AIR 1982 SC !20, it is held by the learned Judges of the Supreme Court that since the word 'business' is Equated with the actual trading or commercial or other similar business activity of the society, the dispute relating to conditions of service of the workman employed by the society cannot be held to be a dispute touching the business of the society. 17. The words 'touching the constitution, management or the business of a co-operative society used in section 76 of the Act also occur in section 72 of the Act, which provides than any dispute touching the constitution, management, or the business of a co-operative society arising between the parties stated therein, shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. Undoubtedly, these words used in both these sections carry the identical meaning. Section 72 of the Act is para materia to section 96 of the Gujarat Co-operative Societies Act, 1961, which fell for consideration of learned Judges of the Supreme Court in The Gujarat State Co-operative Land Development Bank Ltd v, P. R. Mankad and another (supra). Interpreting the expression 'management of the society', it was held that :- "35. ……..Grammatically, one meaning of the term 'management' is : 'the Board of Directors' or 'the apex body or Executive Committee at the helm which guides, regulates, supervises, directs and controls the affairs of the Society.
Interpreting the expression 'management of the society', it was held that :- "35. ……..Grammatically, one meaning of the term 'management' is : 'the Board of Directors' or 'the apex body or Executive Committee at the helm which guides, regulates, supervises, directs and controls the affairs of the Society. In this sense, it may not include the individuals who under the overall control of that governing body or Committee, run the day-today business of the Society.......... Another meaning of the term 'management' may be: 'the act or acts of managing or governing by direction, guidance, superintendence, regulation and control the affairs of a society'. 36. A still wider meaning of the term which will encompass the entire staff of servants and workmen of the Society, has been convassed for by Mr. Dholakia The use of the term 'management' in such a wide sense in section 96 (1) appears to us, to be very doubtful. 37. Be that as it may, what has been directly bidden 'out-of-bounds for the Registrar by the very scheme and object of the Act, cannot be indirectly inducted by widening the connotation of 'management', A construction free from contexual contraints, having the effect of smuggling into the circumscribed limits of the expression 'any dispute', a dispute which from its very nature is incapable of being resolved by the Registrar, has to be eschewed. Thus considered, a dispute raised against the Society by its discharged servant claiming reliefs such as reinstatement in service with back wages, which are not enforceable in a Civil Court is outside the scope of the expression 'touching the management of the Society* used in section 96 (I) of the Act of 1961, and the Registrar has no jurisdiction to deal with and determine it Such a dispute squarely falls within the jurisdiction of the Labour Court under the B I. R. Act." 18.
In view of these clear observations of the learned Judges of the Supreme Court, the District Judge was not right in relying upon the judgment of Rajasthan High Court in Sawai Madhopur Co-operative Marketing Society Ltd v. Rajasthan State Co-operative Tribunal, Jaipur and another (supra) The learned Judge of Rajasthan High Court took the view that having regard to the provisions of the Rajasthan Co operative Societies Act and the Rules, the dispute in question relating to validity of the suspension and termination is a dispute touching the management of the society and falls within the ambit of section 75 of the Rajasthan Co operative Societies Act. According to them, the ambit and import of word 'touching' are very wide and it includes any matter which relates to the management of the society, more particularly, when the Registrar deals with the matters relating to the officers and employees as provided in the Act and the Rules. Section 75 of the Rajasthan Cooperative Societies Act is para materia to section 72 of the Act and also section 96 of the Gujarat Co-operative Societies Act, which was under consideration of the learned Judges of the Supreme Court in The Gujarat State Co-operative Land Development Bank Ltd v. P R Mankad and another (supra). The learned Judges of the Rajasthan High Court have tried to distinguish the judgment of the Supreme Court by stating that, "it appears that attention of their Lordships of the Supreme Court was not drawn to the provision of section 76 under Chapter VII of the Gujarat Act and the Rules made thereunder". Section 76 of the Gujarat Cooperative Societies Act falls under Chapter VII, which deals with the management of societies and reads as under :- "76. The qualifications for the appointment of a manager, secretary, accountant or any other officer or employee of a society and the conditions of service of such officers and employees shall be such as may, from time to time, be prescribed ; Provided that no qualification shall be prescribed in respect of any officer not in receipt of any remuneration." 19.
The qualifications for the appointment of a manager, secretary, accountant or any other officer or employee of a society and the conditions of service of such officers and employees shall be such as may, from time to time, be prescribed ; Provided that no qualification shall be prescribed in respect of any officer not in receipt of any remuneration." 19. The reasoning of learned Judges of Rajasthan High Court is that consideration of section 76 of the Gujarat Co-operative Societies Act and the Rules made thereunder prescribing the qualification for the officers and employees of the society would have assisted the learned Judges of the Supreme Court to give wider meaning to the term 'management' covering within its encompass the disputes of appointment, termination and other conditions of service of the officers and the employees of the society. With all respect to the learned Judges of Rajasthan High Court, this Court finds it difficult to agree with this reasoning given by them. It cannot be presumed that the learned Judges of the Supreme Court did not consider section 76 of the Gujarat Co-operative Societies Act for coming to their conclusion inspite of their not referring this section in their judgment. Even if the provision like section 76 of the Gujarat Co-operative Societies Act figures in a chapter pertaining to the management of the societies it does not lead to the conclusion that the term 'management* which grammatically means 'the Board of Directors or 'the apex body or 'Executive Committee at the helm would include the officers and employees of the society, who run the day-to-day business under their overall control. Moreover, the Rajasthan Cooperative Societies Act and Rules and the Act and Rules of the State of Himachal Pradesh materially differ in respect of the provisions pertaining to the Officers and employees of the society, more specifically, section 148 (2) (xxvii) and (xxx), as reproduced in paragraph 6 of the judgment in Sawai Madhopur Co-operative Marketing Society Ltd. v. Rajasthan State Co-operative Tribunal, Jaipur and another (supra), on which the learned Judges of Rajasthan High Court mainly based their conclusion.
Therefore, applying the ratio of the judgment of the Supreme Court in The Gujarat State Co-operative Land Development Bank Ltd. v. P. R. Mankad and another (supra), this Court holds that the dispute pertaining to termination of the services of the appellant-plaintiff is not the dispute touching the management of the respondent-defendant bank for which notice under section 76 of the Act was required before filing of the suit.” 23. In view of the aforesaid discussion, I find merit in this application and the same is accordingly allowed and consequently, the plaintiff’s suit as against defendant No.4/applicant is ordered to be rejected and his name is ordered to be struck off from the array of the defendants in the memorandum of parties. Amended memo of parties be filed within a week.