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Allahabad High Court · body

2017 DIGILAW 201 (ALL)

BRIJ MOHAN v. STATE OF U. P.

2017-01-16

P.K.S.BAGHEL

body2017
JUDGMENT Hon’ble P.K.S. Baghel, J.—The petitioner is a retired Assistant Manager in U.P. Upbhokta Sahkari Sangh Limited at Meerut. He reached his age of superannuation on 30.6.2016 thus retired. He has instituted this writ proceeding for issuance of writ of certiorari to quash the order dated 22.6.2016 passed by the Food Corporation of India, U.P. Upbhokta Sahakari Sangh Ltd., Lucknow initiating disciplinary proceedings for causing financial loss to the respondents. 2. The essential facts of the case are; the petitioner was appointed as a Cashier at Meerut Branch of U.P. Upbhokta Sahkari Sangh Limited which is an apex level Cooperative Society governed under the provisions of the U.P. Cooperative Societies Act, 1965 and Rules framed thereunder. His services are governed under the U.P. Cooperative Employees Service Regulations, 1975. 3. It is stated that the petitioner was granted promotion as Godown Keeper/Storekeeper on 3.2.1987. On 17.1.2000 he was promoted as Deputy Manager and he earned his further promotion on the post of Assistant Manager on 31.1.2014. His date of birth is 1.7.1956 thus his age of superannuation is 60 years. As mentioned above, he retired on 30.6.2016. He has been issued no dues certificate by each of the office where the petitioner had been posted during his service career. 4. On 22.6.2016 the Managing Director issued an order instituting disciplinary proceedings against the petitioner on the ground of financial misdemeanour and an enquiry officer was appointed with a direction to serve a charge-sheet upon the petitioner. The said order is stated to be served upon the petitioner subsequent to his retirement. It is stated that a perusal of the order dated 22.6.2016 goes to show that no charge-sheet was served upon the petitioner and a direction has been issued to prepare departmental charge-sheet and served it upon the petitioner. 5. It is averred that by an order of the Deputy General Manager (Finance) dated 19.7.2016 the petitioner has been issued a cheque dated 29.6.2016 for an amount of Rs. 8,53,081/- towards the provident fund. It is stated that the services of the petitioner are not pensionable and in terms of the Regulations, 1975 the petitioner is entitled for provident fund and leave encashment. The amount of provident fund, as mentioned above, has already been disbursed to the petitioner. 8,53,081/- towards the provident fund. It is stated that the services of the petitioner are not pensionable and in terms of the Regulations, 1975 the petitioner is entitled for provident fund and leave encashment. The amount of provident fund, as mentioned above, has already been disbursed to the petitioner. However, no payment of gratuity or leave encashment has been made to the petitioner and the said amount has been withheld on the ground that the disciplinary proceedings against the petitioner has been instituted. 6. The grievance of the petitioner is that Rule-84 of the Regulations, 1975 enumerates the penalty which can be awarded to an employee. It is stated that there is no provision under the Regulations, under which the amount of gratuity or leave encashment can be withheld. 7. A counter-affidavit has been filed, wherein it is stated that the services of the petitioner are not regulated under the provisions of the U.P. Cooperative Societies Employees Service Regulations, 1975 as it is a Multi-State Society hence the provisions of the Multi State Cooperative Societies Act, 2002 are applicable. It is stated that the enquiry officer has been appointed prior to petitioner’s retirement on 22.6.2016 and the enquiry officer is required to prepare a charge-sheet which has been served upon the petitioner through registered post on 15.9.2016. The total ten charges have been made by the enquiry officer against the petitioner. The charges are very serious in nature specially regarding financial irregularity. 8. In the rejoinder-affidavit the fact that the Regulations, 1975 are not applicable has been denied. It is stated that no Service Regulations have been framed under the provisions of the Multi-State Cooperative Societies Act, 2002 with regard to the Uttar Pradesh Upbhokta Sahakari Sangh and in view of the said fact the provisions of the U.P. Cooperative Societies Employees Service Regulations, 1975 would continue to apply. It is also averred in the rejoinder-affidavit that the entire counter-affidavit does not refer to any other service regulations. The petitioner has brought on the record some commendation letter issued by the Managing Director to the petitioner regarding his satisfactory services. It has been reiterated that the entire counter-affidavit is completely silent about the relevant rules under which the petitioner’s services are governed, thus, merely denying the fact that the Regulations, 1975 are not applicable, it is not sufficient. 9. It has been reiterated that the entire counter-affidavit is completely silent about the relevant rules under which the petitioner’s services are governed, thus, merely denying the fact that the Regulations, 1975 are not applicable, it is not sufficient. 9. I have heard Sri Ashok Khare, learned Senior Advocate assisted by Sri Siddharth Khare, learned counsel for the petitioner, learned Standing Counsel and Sri Nripendra Mishra, learned counsel for the respondent Nos. 2 to 6. 10. Learned counsel for the petitioner submits that after the retirement of the petitioner no departmental proceeding can be initiated. Admittedly, the petitioner has retired on 30.6.2016 and an order has been passed few days back to his retirement to initiate departmental proceedings on 22.6.2016. The said order clearly indicates that a direction has been issued to prepare a charge-sheet. The said charge-sheet has been sent to the petitioner long after his retirement. In absence of any provision for initiation or continuance of the departmental proceeding, no departmental proceeding can be initiated against a retired employee. He further submits that the Service Regulations 1975 do not permit to initiate or continue departmental proceedings against a retired employee. Hence, the entire exercise is without jurisdiction. 11. He further submits that all the allegations against the petitioner are totally misconceived, baseless and incorrect. In his reply the petitioner has denied all those allegations. Learned counsel for the petitioner has placed reliance on a judgment of the Supreme Court in the case of Devi Prakash Tiwari v. Uttar Pradesh Cooperative Institutional Service Board, Lucknow and others, (2014) 7 SCC 260 . 12. Sri Nripendra Mishra, learned counsel appearing for the respondents submits that the departmental proceedings have been initiated before the retirement of the petitioner and a direction was issued to prepare a charge-sheet and serve it upon the petitioner. It is stated that the charge-sheet has been served upon the petitioner through registered post on 15.9.2016. Sri Mishra has further submitted that the Regulations, 1975 are not applicable to the petitioner hence the departmental proceedings can be conducted against the petitioner even after his retirement. 13. I have considered the rival submissions made by learned counsel for the parties and perused the record. 14. The petitioner at the time of his retirement on 30.6.2016 was working as an Assistant Manager. 13. I have considered the rival submissions made by learned counsel for the parties and perused the record. 14. The petitioner at the time of his retirement on 30.6.2016 was working as an Assistant Manager. The respondent has issued an order on 22.6.2016, a week before his retirement, to initiate the disciplinary proceedings against him. In the said order an enquiry officer has been appointed and a direction has been issued for preparation of the charge-sheet. From the said order it is evident that no charge-sheet was served upon the petitioner before his retirement. In fact, it has been mentioned in the counter-affidavit that the charge-sheet was served upon the petitioner under the registered cover only on 15.9.2016, much after his retirement. From the said fact it is established that at the time of retirement, no charge-sheet was served upon the petitioner. 15. It is trite that a departmental proceeding is said to be initiated after furnishing a charge-sheet upon a delinquent. In the present case the facts mentioned above clearly demonstrate that the charge-sheet was served upon the petitioner after the retirement. 16. The first issue which needs to be determined is that whether the provisions of the U.P. Cooperative Societies Act, 1965 and the Regulations framed thereunder, U.P. Service Regulations, 1975 are applicable to the case in hand or not. Uttar Pradesh Upbhokta Sahakari Sangh Limited (for short, the “UPSS”) was registered as an Apex Level Body under the provisions of the U.P. State Cooperative Societies Act. Prior to U.P. State Organization Act, 2002 some of the members of this apex level society were functioning in Nainital, Haldwani, Tanakpur, Ramnagar and other districts of newly established State Uttarakhand. 17. After the enactment of the Uttar Pradesh Re-organization Act, 2000 the new State of Uttaranchal (now Uttarakhand) has been established. Thus the area of functioning of the UPSS became separate in two States; (i) State of U.P. and, (ii) Uttarakhand. Thus on the date of re-organization UPSS could not be governed under the provisions of the U.P. Cooperative Societies Act, 1965 as it is a State Act and it can regulate the affairs of only those Cooperative Societies which fall under the State of U.P. 18. Thus on the date of re-organization UPSS could not be governed under the provisions of the U.P. Cooperative Societies Act, 1965 as it is a State Act and it can regulate the affairs of only those Cooperative Societies which fall under the State of U.P. 18. A society which functions in more than one States is governed under the provisions of the Multi-State Co-operative Societies Act, 1984 which has been replaced by the Multi-State Cooperative Societies Act, 2002 which came into operation on 16.8.2002. The Section 103 of the Act of 2002 is relevant for your purposes. Section 103 is reproduced herein below: “103. Co-operative societies functioning immediately before reorganisation of States.—(1) Where, by virtue of the provisions of Part II of the State Reorganisation Act, 1956 (37 of 1956) or any other enactment relating to reorganisation of States, any co-operative society which immediately before the day on which the reorganisation takes place, had its objects confined to one State becomes, as from that day, a multi-State co-operative society, it shall be deemed to be a multi-State co-operative society registered under the corresponding provisions of this Act and the bye-laws of such society shall, in so far as they are not inconsistent with the provisions of this Act, continue to be in force until altered or rescinded. (2) If it appears to the Central Registrar or any officer authorised in this behalf by the Central Government (hereafter in this section referred to as the authorised officer) that it is necessary or expedient to reconstitute or reorganise any society referred to in sub-section (1), the Central Registrar or the authorised officer, as the case may be, may, with the previous approval of the Central Government, place before a meeting of the general body of that society, held in such manner as may be prescribed, a scheme for the reconstitution or reorganisation, including proposals regarding— (a) the formation of new multi-State co-operative societies and the transfer thereto in whole or in part, of the assets and liabilities of that society; or (b) the transfer, in whole or in part, of the assets and liabilities of that society to any other multi-State co-operative society in existence immediately before the date of that meeting of the general body (hereafter in this section referred to as the existing multi-State co-operative society). (3) If the scheme is sanctioned by a resolution passed by a majority of the members present at the said meeting, either without modifications or with modifications to which the Central Registrar or the authorised officer agrees, he shall certify the scheme and upon such certification, the scheme shall, notwithstanding anything to the contrary contained in any law, regulation or bye-laws for the time being in force, be binding on all the societies affected by the scheme, as well as the shareholders and creditors of all such societies. (4) If the scheme is not sanctioned under sub-section (3), the Central Registrar or the authorised officer may refer the scheme to such Judge of the appropriate High Court, as may be nominated in this behalf by the Chief Justice thereof, and the decision of that Judge in regard to the scheme shall be final and shall be binding on all the societies affected by the scheme as well as the shareholders and creditors of all such societies. Explanation.—For the purposes of this sub-section, “appropriate High Court” means the High Court within the local limits of whose jurisdiction the principal place of business of the multi-State co-operative society is situated. (5) Notwithstanding anything contained in this section, where a scheme under sub-section (2) includes any proposal regarding the transfer of the assets and liabilities of any multi-State co-operative society referred to in clause (b) thereof, the scheme shall not be binding on such multi-State co-operative society or the shareholders and creditors thereof, unless the proposal regarding such transfer is accepted by that multi-State co-operative society by a resolution passed by a majority of the members present at a meeting of its general body.” 19. A perusal of the said Section indicates that if an object of a Society is confined to more than one State, it shall be deemed to be Multi State Cooperative Society. Another important aspect is that its bye-laws, insofar as they are not in consistent with the provisions of the Central Act, shall continue to be in force until altered or rescinded. In the present case no material has been brought on record by the respondents that UPSS has framed its regulations or altered or rescinded the U.P. Regulations, 1975. Another important aspect is that its bye-laws, insofar as they are not in consistent with the provisions of the Central Act, shall continue to be in force until altered or rescinded. In the present case no material has been brought on record by the respondents that UPSS has framed its regulations or altered or rescinded the U.P. Regulations, 1975. By the fiction of the law it has become a Multi State Cooperative Society hence it is implied that, in my view, it shall continue to be examined under the Regulations, 1975 in terms of Section 103 of the Act No. 2002. 20. This issue was considered by the Supreme Court in the case of Naresh Shankar Srivastava v. State of U.P., 2009 (5) ALJ 496. In the said case PACSFED was an apex society and after creation of the new State Uttaranchal in terms of the Central Act it also became Multi State Cooperative Society. The Supreme Court has held as under: 23. Besides, we cannot lose sight of the fact that Section 18 of the Multi- State Act lays down a procedure for conversion of a State cooperative society into a multi-State cooperative society whereas Section 95 of Multi-State Act contained in Chapter XII deals with a specific situation in which certain cooperative societies would become deemed multi-State cooperative societies automatically by operation of law. Therefore, the finding of the High Court that until the procedure laid down for converting a cooperative society into a multi-State cooperative society is followed, the cooperative society would continue to be a State cooperative society to be governed and regulated by the provisions of U.P. Act, is not correct. 24. It has been contended by the respondents that in view of Section 129 of the Uttaranchal Act which came into force in 2003, 14 member societies of PACSFED in Uttaranchal would automatically become registered under the Uttaranchal Act. However, the said contention is legally untenable. Once the State of U. P. was bifurcated by the Re-organisation Act which came into force on 9.11.2000, Section 95 automatically got attracted. By virtue of Section 95 of the Multi-State Act, PACSFED becomes a Multi-State Society. On 14.2.2001, when the Central Registrar of the Multi-State Co-operative Societies issued the Registration Certificate granting registration of the PACSFED under the Multi-State Act, admittedly, the Uttaranchal Act of 2003 was not in existence. Even otherwise, a State legislation viz. By virtue of Section 95 of the Multi-State Act, PACSFED becomes a Multi-State Society. On 14.2.2001, when the Central Registrar of the Multi-State Co-operative Societies issued the Registration Certificate granting registration of the PACSFED under the Multi-State Act, admittedly, the Uttaranchal Act of 2003 was not in existence. Even otherwise, a State legislation viz. Uttaranchal Act which has been enacted subsequently cannot have an overriding effect over a central law viz. the Multi-State Act. The Uttaranchal Act can govern and regulate the cooperative societies whose objects extend to and apply within the State of Uttaranchal. So, the finding of the High Court that with the enforcement of the Uttaranchal Cooperative Societies Act, 2003, with effect from 21.5.2003, the Multi-State Act shall not be applicable is erroneous. The byelaws of the PACSFED have not been amended so far. The area of operation of the PACSFED as laid down in its byelaws is still the same as it was on the date of the reorganisation of the State of U.P. Therefore, it would be legally impermissible to say that now the area of operation of the PACSFED is confined to the State of U.P. alone and that it has ceased to be a multi-State cooperative society. As far as withdrawal of member-cooperative societies of the PACSFED operating in the State of Uttaranchal is concerned, the deemed conversion of a cooperative society into a multi-State cooperative society by virtue of Section 95 of the Multi-State Act is an irreversible process and the membership of a multi-State cooperative society in a particular State at a given point of time is only a fortuitous circumstance on the basis of which a multi-State cooperative society cannot automatically revert to assume the character of a State cooperative society. Further, there is no provision in the Multi- State Act which permits such automatic conversion of a multi-State cooperative society into a State cooperative society by operation of law. The only relevant consideration for continuance of a multi-State cooperative society as a multi-State cooperative society is that it should have its objects not confined to one State and since the objects of the PACSFED still remain the same as it was immediately before the reorganization of the State of Uttar Pradesh, it shall be deemed to be a Multi-State co-operative society by virtue of deeming provision of Section 95 of the Multi-State Act. 21. 21. Similarly, in the case of Gyan Singh Yadav and others v. State of U.P. and others, Writ Petition No. 1357 (M/B) of 2010 this Court has also taken the similar view. A Division Bench of this Court had occasioned to deal with the matter of UPSS itself in the case of Ram Krishna Pokhariyal and another v. Union of India and others, Writ Petition No. 8189 (MB) of 2012 and has held that the status of UPSS is deemed Multi State Cooperative Society. The Court issued a direction to the U.P. Cooperative Societies to refrain from interfering in the functioning of UPSS and a further direction was issued to the Central Register functioning under the Multi States Cooperative Societies Act, 2002 to allot registration number to UPSS on its completing formalities as required under the Central Acts and the Rules made thereunder. Relevant part of the judgment is extracted herein below: “In view of all the aforesaid discussion, we quash the order dated 10.10.2011 passed by the Joint Registrar, Cooperative Societies, Lucknow, respondent No. 5, with direction to the Registrar, U.P. Cooperative Societies to refrain from interfering in the functioning of the UPSS, with further and separate direction commanding the Central Registrar functioning under the Mutli State Cooperative Societies Act, 2002 (the Act of 2002) to allot registration number to the UPSS on its completing the formalities as required under the Central Acts and the Rules made thereunder. We furthermore direct that the Central Registrar as well as the Committee of Management of the UPSS shall hold election under the provisions of the Act of 2002 after granting the registration, and till the next election is conducted, the Committee of Management elected in 2010 shall continue to function during the transition and interregnum period.” 22. It is significant to mention that in spite of the directions of this Court in the case of Ram Krishna Pokhariyal (supra), the Regional Manager of the UPSS in its counter-affidavit has not disclosed the fact whether the direction of the Division Bench has been complied with or not. It has also not been mentioned in the counter-affidavit as well as the supplementary counter-affidavit that whether the UPSS after becoming a Multi State Cooperative Society has framed its bye-laws/guidelines etc. It has also not been mentioned in the counter-affidavit as well as the supplementary counter-affidavit that whether the UPSS after becoming a Multi State Cooperative Society has framed its bye-laws/guidelines etc. Both the affidavits are completely silent in respect of the service rules or the guidelines, under which the employees of the UPSS are now covered after becoming the Multi State Cooperative Societies. Although a plea has been taken in the counter-affidavit that the UPSS is a Multi State Cooperative Society and the provisions of the Regulations, 1975 are not applicable but it has not been pointed out under which Rules or Regulations the services of the employees or the petitioners’ services are governed. 23. In my opinion, in view of Section 103, the Regulations, 1975 will continue to be governed until it is altered or rescinded. In absence of any contrary material on record, it is difficult to hold that the Regulations, 1975 are not applicable to the petitioner as there cannot be any vacuum with regard to the service conditions of the employees. The Supreme Court in the case of Dev Prakash Tewari (supra) had occasion to consider the similar issue. In that case also the services of the appellant were governed under the provisions of the Regulations, 1975 and the disciplinary proceedings were initiated under the Regulation-85 of the Uttar Pradesh Cooperative Societies Employees Service Regulations, 1975 by serving a charge-sheet and he was dismissed. The disciplinary proceedings were initiated against him in the year 2006 and while it was pending, the appellant therein reached the age of superannuation and retired as Assistant Engineer on 31.3.2009. The Court held that after his retirement the disciplinary proceedings have been left as there was no provision under the Regulations, 1975 to continue the disciplinary proceedings after the retirement. The Supreme Court relying on the case of Bhagirathi Jena v. Board of Directors, O.S.F.C. and others, (1999) 3 SCC 666 , in the matter of Dev Prakash Tiwari (supra) has held as under: “6. An occasion came before this Court to consider the continuance of disciplinary inquiry in similar circumstance in Bhagirathi Jena’s case (supra) and it was laid down as follows: “5. Learned Senior Counsel for the respondents also relied upon clause (3)(c) of the Regulation 44 of the Orissa State Financial Corporation Staff Regulations, 1975. An occasion came before this Court to consider the continuance of disciplinary inquiry in similar circumstance in Bhagirathi Jena’s case (supra) and it was laid down as follows: “5. Learned Senior Counsel for the respondents also relied upon clause (3)(c) of the Regulation 44 of the Orissa State Financial Corporation Staff Regulations, 1975. It reads thus; “When the employee who has been dismissed, removed or suspended is reinstated, the Board shall consider and make a specific order: (i) Regarding the pay and allowances to be paid to the employee for the period of his absence from duty, and (ii) Whether or not the said period shall be treated as a period on duty.” 6. It will be noticed from the abovesaid regulations that no specific provision was made for deducting any amount from the provident fund consequent to any misconduct determined in the departmental enquiry nor was any provision made for continuance of departmental enquiry after superannuation. 7. In view of the absence of such provision in the abovesaid regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30-6-1995, there was no authority vested in the Corporation for continuing the departmental enquiry even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.” 7. In the subsequent decision of this Court in U.P. Coop. Federation case, U.P. Coop. In the absence of such authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.” 7. In the subsequent decision of this Court in U.P. Coop. Federation case, U.P. Coop. Federation Ltd. v. L.P. Rai, (2007) 7 SCC 81 , on facts, the disciplinary proceeding against employee was quashed by the High Court since no opportunity of hearing was given to him in the inquiry and the management in its appeal before this Court sought for grant of liberty to hold a fresh inquiry and this Court held that charges levelled against the employee were not minor in nature, and therefore, it would not be proper to foreclose the right of the employer to hold a fresh inquiry only on the ground that the employee has since retired from the service and accordingly granted the liberty sought for by the management. While dealing with the above case, the earlier decision in Bhagirathi Jena’s case (supra) was not brought to the notice of this Court and no contention was raised pertaining to the provisions under which the disciplinary proceeding was initiated and as such no ratio came to be laid down. In our view the said decision cannot help the respondents herein.” 24. A perusal of the aforesaid judgment it is manifestly clear that the facts of this case are squarely covered by the judgment in Dev Prakash Tewari (supra). Learned counsel for the petitioner has failed to point out any provision under the Regulations, 1975 or any other guidelines under the Act, 2002 to continue the disciplinary proceedings after the employee has retired. Accordingly, the order dated 22.6.2016 is set aside and it is held that the disciplinary proceedings initiated vide order dated 22.6.2016 stand lapsed. Accordingly, the writ petition is allowed. 25. It will be open to the respondents that in case any fresh Regulations under the Act, 2002 have been framed and under the newly framed Regulations or bye-laws if the authorities have jurisdiction to proceed against a retired employee, they may take action in accordance with law. 26. No order as to costs.