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2016 DIGILAW 577 (RAJ)

BEENA @ MEENA SHARMA v. STATE OF RAJASTHAN

2016-04-26

MOHAMMAD RAFIQ, SABINA

body2016
ORDER : RAFIQ, J. This appeal is directed against the judgment of the learned Single Judge dated 14.05.2013, whereby the writ petition (No.5555/2013) filed by the appellant has been dismissed on the ground that respondent Alwar Urban Cooperative Bank Limited does not fall within the purview of State under Article 12 of the Constitution of India. 2. The appellant/preferred the aforesaid writ petition seeking direction to the said Bank to give her compassionate appointment in place of her deceased husband late Shri Sushil Kumar Sharma, who died while in their service. She also prayed for a direction to grant her family pension. 3. We have heard the learned counsel for the parties for final disposal of the appeal. 4. Shri Mahendra Sharma, learned counsel appearing for the appellant has argued that the husband of the appellant was confirmed in service w.e.f. 01.01.1998 vide order dated 09.05.1998. The said order was issued in compliance of the award passed by the Labour Court on 24.02.1998. Unfortunately, the husband of the appellant died while in service on 09.06.201 1. The petitioner/appellant submitted an application for compassionate appointment to the respondents on 23.06.2011. She thereafter sent reminders to the respondents on 27.02.2012 and 15.03.2012. In answer to the querries made by the respondents, she also submitted the requisite documents i.e. affidavits and mark-sheets etc. However, she has yet not been given appointment on compassionate ground. 5. Shri Mahendra Sharma, learned counsel for the appellant argued that the Registrar, Cooperative Department exercises all pervasive control over the Alwar Urban Cooperative Bank for all matters. The Joint Registrar/Deputy Registrar/Assistant Registrar having the jurisdiction of the area of Alwar District to exercise supervisory control over the said Bank. The appellant has placed on record a copy of the order dated 21.02.2006, issued by the Registrar, Cooperative Societies, Rajasthan, Jaipur, which reveals that the State Government framed the Urban Bank Employees Rules, 2006 and the service conditions of the employees of the Urban Cooperative Bank are governed under the said Rules. It is submitted that the Registrar, in exercise of powers conferred under Rule 39 of the Rajasthan Cooperative Societies Rules, 2003, has issued the aforesaid order in supersession of earlier Rules dated 18.08.1987 and issued new set of Rules, titled Urban Cooperative Bank Employees Service Rules, 2006 (hereinafter referred to as 'the Rules of 2006') with immediate effect. 6. It is submitted that the Registrar, in exercise of powers conferred under Rule 39 of the Rajasthan Cooperative Societies Rules, 2003, has issued the aforesaid order in supersession of earlier Rules dated 18.08.1987 and issued new set of Rules, titled Urban Cooperative Bank Employees Service Rules, 2006 (hereinafter referred to as 'the Rules of 2006') with immediate effect. 6. Learned counsel for the appellant further submitted that Rule 6 of the Rules of 2006 deals with methods & procedure of recruitment and provides that in case of death of an employee, compassionate appointment to his/her ward could be granted as per the provisions of Rajasthan Compassionate Appointment of Dependents of Deceased Government Servant Rules, 1996. All the monetary service benefits such as gratuity, leave encashment, selection scale etc. have granted to the employees of the respondent-Bank at par with the employees of the State Government. The disciplinary proceedings against the delinquent employees of the Bank are undertaken under the Rules framed by the State Government. 7. Learned counsel has referred to the aforesaid Urban Cooperative Bank Employees Service Rules, 2006 and submitted that appointment are made on the recommendations of the Selection Committee, which necessarily has to have one nominee of the State. In fact, appeal against the order of penalty passed by the Board of Director lies to the Registrar, Cooperative Societies, Rajasthan, Jaipur. All employees of the Bank are entitled to the benefit of Dearness Allowance, House Rent Allowance, Medical Benefits, Travelling Allowance as also Provident Fund and Bonus as per rules applicable to the employees of the State Government. It is further provided therein that ex-gratia may be paid as per the orders of the Registrar, Cooperative Societies with the approval of the Board of Directors and that payment of gratuity is also admissible in accordance with the Payment of Gratuity Act, 1972 and the Rules made thereunder. The benefit of surrender leave encashment etc. has also been granted to the employees as per the provisions of Rajasthan Service Rules. 8. Learned counsel for the appellant, in support his arguments, has cited a Division Bench judgment of this Court in D.B. Special Appeal (W) No.529/2015-Rajasthan Urban Co-operative Bank Ltd. Vs. Ajay Kumar Katewa & Ors. The benefit of surrender leave encashment etc. has also been granted to the employees as per the provisions of Rajasthan Service Rules. 8. Learned counsel for the appellant, in support his arguments, has cited a Division Bench judgment of this Court in D.B. Special Appeal (W) No.529/2015-Rajasthan Urban Co-operative Bank Ltd. Vs. Ajay Kumar Katewa & Ors. and other connected six appeals, dated 12.01.2016, wherein the said Cooperative Bank also a cooperative Bank in the State, has been held to be State under Article 12 of the Constitution of India. According to the learned counsel, the issue raised in the present appeal is squarely covered by the aforesaid judgment of the Division Bench. Learned counsel has also relied on the judgments of the Supreme Court in U.P. State Co-operative Land Development Bank Limited Vs. Chandra Bhan Dubey And Ors., (1999) 1 SCC 741 and Ram Sahan Rai Vs. Sachiv Samanaya Prabandhak And Another, (2001) 3 SCC 323 . He also relied on the judgments of the Supreme Court in Ajay Hasia Vs. Khalid Mujib Sehravardi, (1981) 1 SCC 722 and in Pradeep Kumar Biswas Vs. Indian Institute of Chemical Biology, (2002) 5 SCC 111 , and argued that as per the law laid down therein the bank must be held to be State within the meaning of Article 12 of the Constitution of India. 9. Per contra, Shri Manoj Bhardwaj, learned counsel appearing for the respondents has opposed the appeal and argued that the learned Single Judge was perfectly justified in dismissing the writ petition as not maintainable because the respondent-Bank does not have the character of a State within the meaning of Article 12 of the Constitution of India. Learned Single Judge has rightly dismissed the writ petition as there was nothing on record to show that any proportion of shareholding of the bank is owned by the State and the State can exercise administrative control over the said bank. Learned counsel, in support of his arguments, has cited the judgment of the Supreme Court in S.S. Rana Vs. Registrar, Coop. Societies And Another, (2006) 11 SCC 634 . He argued that the Supreme Court in that case has held that Kangra Central Cooperative Bank Ltd. was a society under the Himachal Pradesh Cooperative Societies Act, 1968. It has not been constituted under a statute. Registrar, Coop. Societies And Another, (2006) 11 SCC 634 . He argued that the Supreme Court in that case has held that Kangra Central Cooperative Bank Ltd. was a society under the Himachal Pradesh Cooperative Societies Act, 1968. It has not been constituted under a statute. Its functions like any other cooperative society are mainly regulated in terms of the provisions of the Himachal Pradesh Cooperative Societies Act, 1968, except as provided for 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. 10. Learned counsel submitted that same is the position in the present case, therefore, the respondent-Bank cannot be held to be a State within the meaning of Article 12 of the Constitution of India. He also relied on a Larger Bench decision of this Court in Gopal Prasad Varshney Vs. Bank of Rajasthan Ltd., 2009(3) WLC(Raj.) 1 and argued that in that case the Bank of Rajasthan Limited, which was a private company, was held to be not a State within the meaning of Article 12 of the Constitution of India and not amenable to the writ jurisdiction. Moreover, the learned counsel has argued that clause 29 of the Model Bylaws of Urban Co-operative Banks merely provides that in the event of the State Government contributing to the share capital of the Bank or otherwise rendering financial assistance in any other form as mentioned in Clause 29(i), it may be that Government may nominate three Directors the Board of Directors of the Bank. Since no such share capital has been contributed by the State, it does not have any right to control over the bank. Learned counsel has also relied on the judgment of the Himachal Pradesh High Court in C.W.P No.-3634/2012-Vikram Chauhan Vs. The Managing Director & Others, decided on 14.05.2013. 11. Learned counsel relied on the additional affidavit dated 13.04.2016, filed by the respondents and argued that as per order dated 02.05.1985, there are only two sanctioned posts of Class-IV employees with the respondent-Bank and its cadre strength has still not been enhanced. Presently, these two posts are occupied by Shri Suresh Chand Saini and Shri Bablu Ram Saini, who were appointed on 01.04.1991 and 01.12.1991 respectively. Presently, these two posts are occupied by Shri Suresh Chand Saini and Shri Bablu Ram Saini, who were appointed on 01.04.1991 and 01.12.1991 respectively. Apart from these two persons working on the sanctioned posts, there are two more persons working with the respondent-Bank, namely Shri Lekhraj Saini and Shri Premchand Saini, who were appointed vide order dated 01.01.1999, who are not working against the sanctioned posts. The husband of the appellant was appointed on 09.05.1998 on the post of Peon with the respondent-Bank and he died while in service on 09.06.2011. The post against which the husband of the appellant was working was also not a sanctioned post. Since the bank has been running in loss, it has taken a decision not to make any such appointment. Rather it has decided to accept the applications of the existing employees for voluntary retirement. 12. Having heard the learned counsel for the parties and perused the judgments cited by them, we find that the learned Single Judge has not dismissed the writ petition on merits, but only on the ground that the respondent-Bank is not falling within the purview of State under Article 12 of the Constitution of India. Therefore, we will not go into the merits of the case but would confine ourselves examining correctness of the impugned judgment only on that aspect alone. 13. Recently in a case arising out of the Rajasthan Urban Cooperative Bank Ltd., a coordinate Bench of this Court held the said bank to be a State under Article 12 of the Constitution of India. The same set of rules/bye-laws are applicable to the aforesaid Bank and the respondent-Bank. The Division Bench in that case had the occasion to consider the provisions of Rajasthan Cooperative Societies Act, 2001 as also the Rules of 2003. The Division Bench has also examined the impact of the Urban Cooperative Bank Employees Service Rules, 2006, which rules govern the service conditions of the employees of the respondent[ Bank as well. The Division Bench had also the advantage of considering the judgments of the Supreme Court in Ajay Hasia Vs. Khalid Mujib Sehravardi(supra) and Pradeep Kumar Biswas Vs. Indian Institute of Chemical Biology(supra). Similar objections were raised therein that the respondent-Bank was not a State under Article 12 of the Constitution of India. The Division Bench had also the advantage of considering the judgments of the Supreme Court in Ajay Hasia Vs. Khalid Mujib Sehravardi(supra) and Pradeep Kumar Biswas Vs. Indian Institute of Chemical Biology(supra). Similar objections were raised therein that the respondent-Bank was not a State under Article 12 of the Constitution of India. It would be therefore appropriate to reproduce para 6, 7, 21, 22, 23, 24 and 25 of the said judgment, which read as under:- “6. At the outset, we may refer to the Rules of 2006 which govern the service conditions of the respondents. These Rules have come in force from the date of issuance of orders by the Registrar. No change in the Rules is permissible without prior approval of the Registrar, Cooperative Societies, Rajasthan. In terms of the definition in the Rules of 2006, the term ‘Act’ means the Rajasthan Cooperative Societies Act, 2001. ‘Rules’ refer to the Rajasthan Cooperative Societies Rules, 2003. ‘Registrar’ is a person appointed to perform the functions of the Registrar of Cooperative Societies for the State under the Act of 2001. The general conditions relating to appointment of the employees are contained under Chapter-II of the Rules of 2006. Chapter-III of the Rules of 2006 deals with the methods and principles of recruitment. Chapter-IV of the Rules of 2006 deals with the maintenance of service record in a prescribed service book. Annual Performance Appraisal Reports (APARs) for the financial year in respect of each employee shall be drawn annually by the competent authority as prescribed in Annexure-C. Rule 11 provides for termination of employment. Rule 12 provides for conditions for resignation while Rule 13 spells out disqualification for employees. Rule 14 refers to the superannuation and retirement whereas Rule 15 provides for compulsory retirement. Chapter-V contemplates disciplinary action for misconduct. Rule 33 of the Rules of 2006 provides for interpretation and stipulates that wherever any doubt arises as to the interpretation of the Rules or where the Rules of 2006 are silent on any matter, the provisions of the Rajasthan Service Rules, Rajasthan Civil Service (Pension) Rules, 1996, and the Rajasthan Civil Services (Classification, Control and Appeal) Rules, 1958, shall apply mutatis mutandis. 7. The Bank is governed by the mandate of the Bank Regulations Act, 1949, as amended by the Banking Laws (Application to Cooperative Societies) Act, 1965. 7. The Bank is governed by the mandate of the Bank Regulations Act, 1949, as amended by the Banking Laws (Application to Cooperative Societies) Act, 1965. The banking activity is also subject to the provisions of the Reserve Bank of India Act, 1934. The Rules of 2006, which contemplate provisions for superannuation/retirement and compulsory retirement, including other service conditions of the employees of the Bank, have been made applicable by virtue of the order of the Registrar, Cooperative Societies. No change in the Rules of 2006 is permissible without prior approval of the Registrar, Cooperative Societies. 21. In so far as the contention of the appellant that the writ petition was not maintainable as the appellant bank is not a State falling under Article 12 of the Constitution of India is concerned, we find no merit in this submission as well. The Supreme Court in the case of Ajay Hasia Versus Khalid Mujib Sehravardi [ (1981) 1 SCC 722 ] had propounded the following six tests for determining whether an authority would fall in the definition of State as an instrumentality or agency of the Government. “(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 a relevant factor … whether the corporation enjoys monopoly status which is Stateconferred 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.” 22. (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.” 22. The Supreme Court in the case of Pradeep Kumar Biswas Versus Indian Institute of Chemical Biology [ (2002) 5 SCC 111 ] has held that the tests formulated in Ajay Hasia's case (supra) were not to be applied rigidly so that if a body falls within any one of them it has to be considered a State within the meaning of Article 12 and the question which has to be considered in each case is to whether the body is financially, functionally and administratively under the control of the Government. This control must be particular to the body in question and must be pervasive. Mere regulatory control by the Government would not make the body a State. 23. The appellant had raised a preliminary objection before the Single Bench that it is a duly registered bank under the Rajasthan Cooperative Societies Act, 2001 and does not fall under the definition of “State” nor it is an instrumentality of State as defined under Article 12 of the Constitution of India. However, no further details had been put forth regarding the composition of the bank including the nature and mode of appointment of Board of Directors as well as its financial share holding. The appellant is stated to have infused a capital to the tune of Rs. 1.5 Crores consequent upon which the RBI permitted it to recommence its business operations vide order dated 12.10.2009. However, no details of the share holders who infused this capital have been furnished. 24. It is also borne out from the record that the respondent employees of the bank were sent on deputation by the Registrar Cooperative Societies on the directions of the State Government to the primarily cooperative land development banks vide orders dated 29.09.2008 and 30.09.2008. The period of their deputation had been extended vide orders of the State Government dated 21.10.2009 and 31.12.2009. The Registrar, Cooperative Societies vide order dated 26.03.2010 directed that the petitioners whose deputation was to end on 31.03.2010 be relieved with a direction to join the appellant bank on or before 01.04.2010. 25. The period of their deputation had been extended vide orders of the State Government dated 21.10.2009 and 31.12.2009. The Registrar, Cooperative Societies vide order dated 26.03.2010 directed that the petitioners whose deputation was to end on 31.03.2010 be relieved with a direction to join the appellant bank on or before 01.04.2010. 25. Therefore, the State control over the appellant bank is apparent and in the absence of further particulars on the issue we are of the view that the Single Bench has rightly held it to fall under the definition of State under Article 12 of the Constitution of India and the writ petition to be maintainable.” 14. In the aforesaid case, the Division Bench also had the occasion to consider the ratio of the judgment of Supreme Court in S.S. Rana Vs. Registrar, Coop. Societies And Another(supra) and following observations have been made by the Division Bench in para 28 of the judgment:- “28. In the case of S.S. Rana vs. Registrar, Co-operative Societies (Supra) the State did not have any direct or indirect control over the affairs of the Society which was deep and pervasive. It was also not a major share holder. It had the power of nominating only one out of the three members of the Board of Directors. It was further held that there was no violation of any mandatory provisions of the Act or the rules framed thereunder while terminating the services of the appellant therein. The Supreme Court had also noticed that some High Courts had held that writ petition would be maintainable against a Society if it is demonstrated that any mandatory provisions of the Act or the rules framed thereunder have been violated by it. It is reiterated that in the instant case the violation of the rules is apparent.” 15. Although, the learned counsel for the respondents has sought to re-argue the matter all over again that the respondent-Bank is not a State, but we do not want to go into the details, in view of the considered judgment recently delivered by a coordinate Bench of this Court, more particularly when we are not persuaded to take a different view. 16. We may only add that in U.P. State Co-operative Land Development Bank Limited Vs. 16. We may only add that in U.P. State Co-operative Land Development Bank Limited Vs. Chandra Bhan Dubey And Ors.(supra), the Supreme Court has held the bank to be an instrumentality of the State and an authority under Article 12 of the Constitution of India on the terms that it is controlled by the State Government, more particularly in regard to the disciplinary proceedings. The Supreme Court in that case took note of the fact that the status of the said bank is of a cooperative society, registered under the U.P. Co-operative Societies Act, 1965 and constituted under the Utter Pradesh Co-operative Land Development Bank Act, 1964, but on examination of the different provisions of the rules, bye-laws and regulations, held that all of them unequivocally indicates that the State Government exercises all pervasive control over the bank and its employees are governed by statutory rules, prescribing an entire gamut of procedure of initiation of disciplinary proceedings by framing a set of charges and culminating in inflicting of appropriate punishment, after complying with the requirements of giving a show-cause and an opportunity of hearing to the delinquent. 17. Following the aforesaid judgment, the Supreme Court reiterated the same view in Ram Sahan Rai Vs. Sachiv Samanaya Prabandhak And Another (supra), that the District Cooperative Bank in that case is an instrumentality of the State and an authority under Article 12 of the Constitution of India. 18. For all the aforesaid reasons, we, therefore, hold that the respondent-Bank is an instrumentality of the State. In the present case, we may only add by way of repetition that the respondent-Bank shall consider the case of the appellant for appointment on compassionate ground in terms of the provisions of the Rajasthan Compassionate Appointment of Dependents of Deceased Government Servant Rules, 1996, as provided in Rule 6 of the Urban Cooperative Bank Employees Service Rules, 2006. Rule 7 of the Rules of 2006 provides for procedure for direct recruitment envisaging constitution of selection committee for different three categories i.e. for Chief Executive, for Officers and for clerical staff, in which there is representative of Registrar, Cooperative Societies, being Joint Registrar/Assistant Registrar/Deputy Registrar of the Cooperative Department. Rule 7 of the Rules of 2006 provides for procedure for direct recruitment envisaging constitution of selection committee for different three categories i.e. for Chief Executive, for Officers and for clerical staff, in which there is representative of Registrar, Cooperative Societies, being Joint Registrar/Assistant Registrar/Deputy Registrar of the Cooperative Department. Rule 8 provides that for the purposes of recruitment by promotion, a selection strictly on seniority-cum-merit basis shall be made from amongst eligible persons and in the same selection, referred to above, the case of promotion shall be considered under the provisions of the Rules. Rule 17 provides for disciplinary action for misconduct, wherein the Board of Directors has been made the Appellate Authority for the decisions given by the Chief Executive, but in case decisions are given by the Board of Directors of the Bank, the Registrar of the Cooperative Societies is designated as the Appellate Authority. According to Rule 18 of the Rules of 2006, the conditions relating to pay and allowance, Dearness Allowance, House Rent Allowance, Medical Benefits and Travelling Allowance and any Special Allowance, shall be governed by the orders issued by the Registrar, Cooperative Societies, Rajasthan from time to time and adopted by the Board of Directors. According to Rule 19, the Provident Fund Act has been made applicable and the employees of the bank shall be entitled to the benefits of GPF on basic pay and dearness allowance as also the bonus. Further, ex-gratia has also been made admissible as per the orders of the Registrar, Cooperative Societies. As per Rule 20, payment of gratuity is also admissible to the employees of the bank. Rule 21 provides for benefit of surrender leave encashment. The benefit of encashment of Privilege Leave on retirement has also been made admissible under the Rajasthan Service Rules. 19. Apart from all the aforesaid provisions, there are many other provisions otherwise applicable to the employees of the State Government, which have also been made applicable to the employees of the Cooperative Bank. In view of all these provisions, it can safely be concluded that the shareholding alone may not be a decisive factor for deciding the status of the respondent-Bank and the State Government has otherwise been shown to exercise all pervasive control over the respondent-Bank, which certainly is an instrumentality of the State and an authority under Article 12 of the Constitution of India. 20. 20. In the result, the appeal succeeds and is allowed. The impugned order dated 14.05.2013 is set aside the matter is remitted to the Single Bench for its decision on merits.