Orissa High Court
Nihar Ranjan Swain vs Registrar on 16 August, 2024
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 02-Sep-2024 15:22:16
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.18638 of 2020
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Nihar Ranjan Swain .... Petitioner(s)
-versus-
Registrar, Co-operative Societies, .... Opposite Party (s)
Odisha and Ors.
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. B.S. Tripathy-1, Adv.
For Opposite Party (s) : Mr. Pradeep Kumar Rout, Adv.
(for O.P.2)
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-15.05.2024
DATE OF JUDGMENT: -16.08.2024
Dr. S.K. Panigrahi, J.
1. The Petitioner, through this Writ Petition, seeks to contest the legality of the order dated 17.07.2020 of the Opp. Party no.1 by which it was held that preparation of gradation list of Banking Assistant was proper and as per order dated 20.02.2003 of the Cooperation Department followed by order dated 13.06.2003 of RCS(O). The aforesaid impugned order was passed by the Opp. Party no.1 on the face of his own finding that there was no evidence regarding circulation of gradation list of Banking Page 1 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 Assistant to the employees of the Bank meaning thereby that gradation list of Banking Assistant in question was/is provisional and tentative in nature and cannot be the basis of the impugned promotions.
2. It is alleged therein that the impugned order was/is an outcome of deliberate misinterpretation of Government Co-operation Department order dated 20.02.2003 as well as illegal and contrary to Rule 18 and 17 of the Staff Service Rules, 2011.
I. FACTUAL MATRIX OF THE CASE:
3. The brief facts of the case are as follows:
(i) Cuttack Central Cooperative Bank (hereinafter "CCC Bank/Opp. party No.2") was established in the 1956 and is a major Indian private bank with its headquarters in Cuttack having over 38 branches and ATMs countrywide.
(ii) The petitioner was initially appointed as Cadre Secretary in the Nishintko Branch of the Bank with effect from 24.11.1983 pursuant to order No.7286 dated 22.11.1983 of the Secretary of the Bank and has been continuing at present as Branch Manager I/c, City Branch of the Opp. party No.2/Bank.
(iii) During continuance of the petitioner as Cadre Secretary, Govt. in Cooperation Department in exercise of their powers conferred under Rule 33-A read with Section 123-A of the Orissa Cooperative Societies Act, 1962 issued Resolution dated 20.02.2003, inter-alia, declaring that the employees working in the time being under Common Cadre Schemes against the Common Cadre or other posts, in the S.C.S./LAMP/FSS, affiliated to the District Central Cooperative Banks Page 2 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 and in Head Office and Branches of such Banks shall be deemed to be the employees of the respective parent banks holding duty posts of the said CCBs or on deputation with the affiliated primaries concerned, as the case may be, with effect from the date of issue of the order.
(iv) In view of the aforesaid declaration, the petitioner was deemed to be an employee of the Bank with effect from 24.11.1983 i.e., the date of his joining the bank as Cadre Secretary in the Common Cadre and was entitled to be fitted against the post of Supervisor with consequential seniority, pay revision benefit and further promotion to next higher grade of Asst Manager.
(v) During continuance of the petitioner in the Bank, Human Resources Policy of the District Central Co-operative Banks namely HR Policy, 2011 (hereafter "Rules, 2011") was adopted by the Bank through their office order No.15251 dated 27.07.2011. After such adoption, the service conditions of the petitioner has now been governed by the said HR Policy, 2011 and accordingly the petitioner was re-designated as Banking Assistant by the Bank's office order dated 20.05.2013.
(vi) As per Rule-18 of the Rules 2011, the seniority of the employees was/is to be determined for each grade/category of services and determination of Policy was to be on the basis of their dates of appointment in their grade. The petitioner claims that appropriate seniority should have been given to the petitioner with effect from the date of his joining i.e., with effect from 24.11.1983.
(vii) When there was contemplation by the Opp. Party No.1 for giving 100% appointment to outsiders in the promotional post/grade/rank of Page 3 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 Assistant Manager, the petitioner's Association approached this High Court in WP(C) No.1727/2014 in which, while issuing notice this Court passed interim orders on 30.01.2014 in Misc. Case No.1709/2014 directing stay on the appointment pursuant to the advertisement dated 25.11.2013 issued by the Registrar, Cooperative Societies, Orissa without leave of this Court.
(viii) Thereafter, during pendency of the aforesaid WP(C) No.1727/2014, Secretary of the Opp. Party No.2-Bank had published a Gradation List on 12.03.2018 of Banking Assistants as on 01.01.2018. Purportedly, the President of the Committee of Management as well as Secretary of the Opp. party No.2/Bank requested the petitioner's Association (the writ petitioner in WP(C) No. 1727/2014) to withdraw the said writ petition and allow the Bank to finalise the said Gradation List and to proceed with the matter of promotion of existing Banking Assistants to the next higher grade of Asst. Manager.
(ix) After withdrawal of the writ petition, the petitioner found that the Gradation List of Banking Assistants as on 01.01.2018 prepared by the Secretary of the Bank on 12.03.2018 was not in terms of Rule-19 of the Staff of Service Rules, 2011 and employees with lesser years of service were placed at higher place than the employees senior to them in service. In the Gradation List, employees despite being junior to the petitioner in service were placed above him by ignoring their dates of entry into service.
(x) Considering the aforesaid aspect the petitioner's Association raised their Written Demand vide letter No.28 dated 31.01.2019 before the Opp. Page 4 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 party No.1 being the appropriate authority under Cooperative Societies Act dealing with the service conditions of employees of all the Cooperative Banks for appropriate relief, which is impliedly for modification and/or variation and/or correction of the Gradation List dated 12.03.2018.
(xi) The Opp. Party No.1 without considering the case of the petitioner in its proper perspective passed order No.15795 dated 17.07.2020 by which the said Opp. party while holding that there was no evidence regarding circulation of gradation list of Banking Assistant to the employees of the Bank further illegally held that preparation of gradation list of Banking Assistant was proper and as per order dated 20.02.2003 of the Cooperation Department followed by order dated 13.06.2003 of RCS(O). II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
4. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions:
(i) During 2nd week of March, 2018, the President of the Committee of Management had given assurance to the Association that appropriate Gradation List would be prepared in terms of the Staff Service Rules, 2011 with the criteria namely length of service of all the employees of the Bank including members of the Association, those who were declared as employees of the Parent Bank as per Govt. Notification dated 20.02.2003.
(ii) It was assured that seniority would be considered on the basis of the date of entry into service with consequential service benefits including promotion of its members would be considered and given. However, Page 5 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 there was a condition put by the Committee of Management that the Committee of Management would ensure compliance of the aforesaid assurance in the event the writ application filed by our Association bearing WP(C) No.1727/2014 is withdrawn by the Association. Based on such assurance the petitioner's Association had withdrawn the writ petition WP(C) No.1727/2014 by filing a memorandum dated 14.03.2018 by clearly indicating that such withdrawal was on the basis of the assurance given by the former President of the Committee of Management as aforesaid. Based on the said memorandum dated14.03.2018, the writ application WP(C) NO.1727/2014 was dismissed as withdrawn.
(iii) But, the former President of the Committee of Management as well as Secretary of the Opp. party No.2-Bank had not honored their assurance as aforesaid and allowed promotion to the juniors in the service namely Susil Kumar Ray and others to the post of Banking Assistant in the scale of pay of Rs.9,300-34,800/- with GP of Rs.4200/- based on the aforesaid provisional Gradation List of Banking Assistant dated 12.03.2018 and Resolution of the Appointment Sub-Committee held on 31.03.2018 vide office order No.6956 dated 31.03.2018 of the Secretary of the Bank. It is worth indicating here that though promotion was said to have been given vide office order dated 31.03.2018, yet as the same was done in a clandestine manner, the said office order was in fact issued in May, 2018 based on which those promotes have submitted their joining report only after 01.05.2018.
Page 6 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16
(iv) The Opp. Party No.2 continued to perpetrate further illegalities through their Appointment Sub-Committee in giving further promotion to another 6 juniors to the petitioner to the rank of Asst. Manager (Junior Management) in the scale of pay of Rs.9,300-34,800/- with GP of Rs.4200/- vide office order No.3511 dated 06.03.2019 of the Secretary of the Bank. It is worth indicating here that juniors who have been promoted to the post of Asst. Manager in March, 2018 & February, 2019 have already been given further promotion to the post of Manager during January, 2020 giving retrospective effect of such promotion with effect from November, 2019.
(xii) The petitioner also learnt that the said promotion order has not been published in the Bank's website, but promotion orders have been issued individually to the persons concerned. If an independent is caused the aforesaid statement of the petitioner would be appropriately substantiated. While the matter stood thus, the petitioner could further ascertain that another clandestine attempt has been made by the opp.party No.2-Bank by order of its' President for giving promotion to further juniors to the petitioner in service to the post of Asst. Manager (Junior Management).
(xiii) In this context, reference be placed to office order No.3506 dated 19.02.2020 of the Secretary of the Bank issued by order of the President of the Committee of Management asking 68 employees to attend the Head Office of the Bank on 23.02.2020 for Written Test and Interview for such promotion.
Page 7 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16
(xiv) Upon acquiring knowledge of such fact, the petitioner who was placed at Sl. No. 111 in the gradation list, could procure a copy of the said letter dated 19.02.2020 of the Secretary of the Bank and found that though Sasikant Prusty (SI.No.22) and Niranjan Sarangi Sutar (Sl. No.37) were retired from service, yet they were called upon to attend the interview. Similarly from Sl.No.57 (Sadasib Das) to Sl. No.68 (Sunita Das) despite being placed at Sl. No. 168 to 180 in the gradation list and being much more junior to the petitioner in service were called upon to attend the interview whereas the petitioner was ignored on the pretended plea that the petitioner has been under suspension.
(xv) The petitioner could further ascertain from reliable source that the notice given to 68 persons was only a formality and they would be given promotion to the post of Asst. Manager immediately upon finalization of the process even by 24.02.2020. The petitioner could further ascertain that the present Committee of management before expiry of their tenure in April, 2020 would give promotion to the persons of their choice upon getting pecuniary benefit from them. The petitioner has reliably learnt that there are 38 posts are lying vacant in the post of Asst. Manager, against which the aforesaid impugned selection process has been started.
(xvi) So far as the case of the petitioner is concerned, he was placed under suspension since August, 2014 and despite repeated directions by this Court neither his Subsistence Allowance as due to him has been paid nor the proceeding initiated against him has so far been concluded deliberately and willfully with a view to denying him the aforesaid Page 8 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 promotion to the post of Asst. Manager despite being senior to many employees in the Gradation List and the challenge made by the petitioner was the subject matter in WP(C) No.22575/2014 disposed of on 08.11.2016, WP(C) No.16211/2019 and WP(C) No.27410/2019 disposed of on 03.02.2020. As a matter of fact, the petitioner has been subjected to harassment and humiliation as he was then the President of the Association, which filed WP(C) No. 1727/2014, which was withdrawn on 16.03.2018 based on the assurance given by the President, which was also the subject matter of Memorandum dated 14.03.2018. (xvii) Recently this Court directed disposal of the disciplinary proceeding against the petitioner within a period of three months with a further direction that in the event the proceeding is not concluded within the same period, the same would be deemed to be closed. The proceedings has been treated to be closed with effect from 05.05.2020. (xviii) The facts indicated above with the documents in support thereof would reveal that promotions have been given to juniors to the petitioner in service in a clandestine manner and that too by not allowing the Opp. Party No.1 to take a final decision on the representation of the petitioner's Association dated 31.01.2019. Being aggrieved by the aforesaid illegalities and irregularities committed by the Opp. Party No.2-Bank, the petitioner approached this Court in WP(C) No.7047/2020 with a prayer for quashing for quashing the process of promotion dated 19.02.2020 and for finalizing the Gradation List of Banking Assistants issued by the Secretary of the Bank on 12.03.2018 first and then to Page 9 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 proceed with the process of promotion to Banking Assistants to the post of Assistant Manager and Manager.
(xix) Thereafter the personal hearing was conducted by the opp.party No.1 on 23.06.2020 and 30.06.2020. However, the Opp. party no.1 without considering the case of the petitioner in its proper perspective passed order No.15795 dated 17.07.2020 by which the Opp. party No.1 held that there was no evidence regarding circulation of gradation list of Banking Assistant to the employees of the Bank further illegally held that preparation of gradation list of Banking Assistant was proper and as per order dated 20.02.2003 of the Cooperation Department followed by order dated 13.06.2003 of RCS(O). However in the said impugned order the Opp. party No.1 has directed the Opp. Party No.2 to consider promotion of the petitioner by taking into his seniority and merit as per HR Policy, 2011.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
5. Per contra, learned counsel for the Opp. Parties earnestly made the following submissions in support of his contentions:
(i). Cuttack Central Cooperative Bank Ltd. is registered as a central cooperative society duly managed by its own Committee of Management having its own independent legal entity as a body-
corporate. It is a creature as per the provisions of the OCS Act, 1962 and therefore Cuttack Central Cooperative Bank Ltd. is not and should not be construed as an instrumentality of the State.
(ii). The petitioners have not availed the alternate remedy available under Section 113 of the OCS Act, 1962 which has not been exhausted. Further, Page 10 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 the resolution questioned in this writ petition has not been assailed under the provisions of the OCS Act, 1962. As the writ petitioners have not availed the alternate remedy available under law therefore the present writ petition is not maintainable, rather this writ petition is an abuse of process of law
(iii). The writ petition is misconceived, frivolous, grossly barred by limitation. Further, the writ petition is barred under law as no liberty has been granted vide order dated 16.3.2018 passed in WP(C) No.1727 of 2014 to raise the same question again by the petitioner on the self same ground by filing another writ petition.
(iv). The aforementioned prayers made by the petitioner is inconsistent since the seniority list prepared by the Opp. Party Bank relating to cadre Secretaries who are included in Group VI-A employee is based upon various letters and guidelines of the Government from time to time as he as well as similar footing employees were not the regular employee of the Bank in the initial joining.
(v). The petitioner was initially appointed as Cadre Secretary on 24.11.1983 by the Primary Co- operative Society which is a separate establishment having its own managing committee. As per Govt. guidelines, the said Society was functioning under the supervision and administrative control of the Cuttack Central Co. Operative Bank Ltd. While continuing as Cadre Secretary, in pursuance to order No. 6929 dated 13.04.2003 of Registrar of Cooperative Societies (RCS) Odisha, the posts of Cadre Secretaries were included under all CCBs and accordingly treated as Grade VI-A employees under the Central Cooperative Banks. Page 11 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16
(vi). The RCS in the aforesaid order has directed to adopt the gradation list of cadre secretaries if any finalized by the cadre committee as well as to finalize gradation list inviting objection and proposal from among the said employees prescribing certain guidelines. Nowhere in the aforesaid order it has been stated that their date of joining shall override above the Original employees working under Grade-VI-A. In view of that, even if the petitioner had joined in the PACS in the year, 1983, he has been accepted as employee of the Bank with effect from 20.2.2003 under Grade-VI-A services of CCB.
(vii). While the matter thus stood, in pursuance to letter No. 15957 dated 8.8.2005 of the RCS Odisha, the said post has been redesignated as Junior Supervisor. In view of the service criteria prescribed by the RCS Odisha, the petitioner and the similarly situated employees who have been included under Grade VI-A services, subsequently have been placed Junior to all regular employees in the cadre. Accordingly, the Cuttack Central Cooperative Bank published final gradation lists of Junior supervisors of Gr. VI-A from time to time i.e. dated 1.10.2020, dated 1.12.2013 indicating the position of the petitioner Sl.No-152, S.No. 82 respectively.
(viii). Thereafter, in accordance with Human Resource Policy for the Central Cooperative Banks of Odisha incorporating the Staff Service Rules 2011, the petitioner's service has been re-designated as Banking Assistant under the categories of posts prescribed under Rule -4 of the aforesaid Rules. The said guidelines are applicable to all Cadre Secretaries working under different Central Co-operative Banks in the State. Copy Page 12 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 of the relevant portion of re-designated posts incorporated in the HR Policy is annexed herewith as
(ix). As far as the recent gradation list is concerned, the Cuttack Central Cooperative Bank published a gradation list of Banking Assistants as on 01.01.2018 and finalized the same after inviting objections from all concerned. The said gradation list was widely circulated among all branches under the Cuttack Central Cooperative Bank Ltd., The petitioner who was officiating as President of the Cuttack Central Cooperative Bank Employees Association was intimated inviting objection if any. The vice president and Joint Secretary of the said association have accepted the same. Similarly, the said gradation list was also communicated to Central Cooperative Bank Employees Union by its Secretary Sri Raj Kishore Swain.
(x). The petitioner had filed Writ Petition bearing W.P.(C) No.1727 of 2014 seeking direction to prepare gradation list considering their date of joining as seniority, but the said writ petition has been finally dismissed and withdrawn vide Order dated 16.3.2018 by this High Court. The averments taken regarding the withdrawal of such writ petition basing upon the assurance of the then Secretary to consider their seniority from the date of joining is false and strictly denied and there is no evidence regarding such assurance.
(xi). After finalization of gradation list of the Banking Assistants in the year 2018, the promotion has given against the vacant post of Assistant Managers considering the suitability with due regards to seniority from Banking Assistants.
Page 13 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 IV. COURT'S REASONING AND ANALYSIS:
6. Before adverting on the merits of the instant petition, this Court finds it apposite to discuss the settled law with regards to the maintainability of writ petition pertaining to service matter against the cooperative bank.
7. The short question for adjudication in the instant petition is that whether the Opp. Party No.2/bank is amenable to the writ jurisdiction of Court in the instant writ petition which involves a service dispute.
8. In the matter of Ch. Ajeet Kumar v. Registrar, Co-operative Societies, Odisha and Ors.,1 I had the occasion to deliberate on the amenability of service disputes involving Cooperative Societies/Banks under Article 226 of the Constitution. In the interest of definitively establishing the position of this court, I find it necessary to reaffirm the ruling in this case.
9. Article 12 of the Constitution of India has defined the term "State" as follows:
"12. Definition.--In this Part, unless the context otherwise requires/ 'the State' includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India."
10. The constitutional history reveals that the term "other authorities" as referenced in Article 12 has been the subject of extensive judicial examination. This examination has led to the establishment of a comprehensive body of jurisprudence dedicated to its interpretation. The evolution of this legal framework highlights the significance of 1 W.P.(C) No. 18641 of 2020, Ori HC Page 14 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 "other authorities" in defining the scope of constitutional rights and governmental powers.
11. In the case of Ajay Hasia and others v. Khalid Mujib Sehravardi,2 a Constitution Bench of the Supreme Court, while approving the tests laid down in the case of Ramana Dayaram Shetty v. International Airport Authority of India & Ors.,3 as to when a corporation can be said to be an instrumentality or agency of the government, observed which runs thus:-
"The tests for determining as to when a corporation can be said to be an instrumentality or agency of government may now be culled out from the judgment in the International Airport Authority case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority case as follows:
(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;
2
(1981 ) 1 SCC 722 3 (1979) 3 SCC 489 Page 15 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 (3) It may also be a 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.
If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the International Airport Authority case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12."
12. Then, in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others,4 a seven-judge Bench of the Apex Court, meticulously examined and endorsed the criteria established in the RD Shetty (supra) and reaffirmed in the Ajay Hasia (supra) for determining when a corporation can be classified as an "instrumentality" or "agency" of the government, thereby falling within the scope of the term 'authority' as defined in Article 12 of the Constitution. The Bench referenced the case of Chander Mohan Khanna v. NCERT,5 wherein the Apex Court, after evaluating the memorandum of association and operational rules, concluded that the NCERT was 4 (2002) 5 SCC 111 5 (1991) 4 SCC 578 Page 16 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 primarily an autonomous entity. It was determined that its functions were not exclusively governmental, and government oversight was limited to ensuring proper utilization of grants. Since its funding was not entirely derived from government sources, it did not meet the criteria of a State instrumentality under Article 12. Additionally, the Bench cited the decision in Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers' Association,6 where it was established that the company qualified as an authority under Article 12. This conclusion was based on the fact that the company was substantially funded and financially controlled by the government, operated under a Board of Directors appointed and removable by the government, and undertook functions of significant public interest under governmental oversight.
13. The evolving landscape of state control and the increasing involvement of private entities in what is termed as "public functions" have prompted the Supreme Court to address the issue of liability for such private actors. A "public function" refers to a role traditionally reserved for governmental authorities. Private sector individuals or entities are deemed to be executing a public function when they undertake responsibilities historically associated with government entities.
14. In Anandi Mukta & Others v. V.R. Rudani & Others,7 the Supreme Court clarified that the phrase "any person or authority" under Article 226 of the Constitution is not confined to statutory bodies and government instrumentalities. Instead, it extends to any individual or 6 (2002) 2 SCC 167 7 1989 (2) SCC 691 Page 17 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 entity engaged in performing a public function. Then, in Zee Telefilms Ltd. & Others v. Union of India,8 the Supreme Court delineated the scope of "other authorities" under Article 12 of the Constitution. This category includes state-created corporations and societies engaged in trading, bodies involved in research and development related to government functions, and private entities performing public duties or undertaking activities similar to those of government entities. Additionally, in Janet Jeyapaul v. SRM University & Others,9 the Court found that SRM University was engaged in a public function through its educational activities
15. The aforementioned decisions clarify that the precise type of entity-be it a society, cooperative society, or company-does not solely determine its status. What is essential is the degree of governmental control over the entity and its operationality in a manner similar to a "public function." The tests described must be collectively applied and assessed. There is no fixed formula for this determination; instead, various factors may become significant in different factual scenarios to establish whether the entity qualifies as an authority under Article 12 of the Constitution.
16. It is a settled position of law that for any other authority to fall within the domain of the writ jurisdiction it should be discharging a "public duty" and the dispute between the parties shall persist regarding the non- performing of such public duty or function. It is pertinent to note that the Supreme Court has time and again reiterated that when the 8 (2005) 4 SCC 649 9 2015 (16) SCC 530 Page 18 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 dispute pertains to the service matters and there is no element of public duty involved in it, then the dispute falls within the domain of private dispute and is not amenable to the jurisdiction of the writ Court.
17. It is not in dispute that the Society has not been constituted under an Act. It functions like any other Co-operative Society are mainly regulated in terms of the provisions of the Orissa Cooperative Societies 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.
18. It has not been shown before this court that the State exercises any direct or indirect control over the affairs of the Society for deep and pervasive control. It cannot, thus, be said that the State exercises any functional control over the affairs of the Society.
19. In S.S. Rana v. Registrar, Co-Operative Societies,10 the Supreme Court dealt with the question of amenability of non-statutory cooperative societies under Art. 226 of the Constitution. The relevant excerpt is produced hereinbelow:
"The respondent No.1-Society does not answer any of the afore- mentioned tests. In the case of a non-statutory 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.] It is well 10 2006 (11) SCC 634 Page 19 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 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."
20. In Krishna Mohan v. State of U.P.,11 the Allahabad High Court observed that while Cooperative Societies are indeed subject to oversight by statutory authorities such as the Registrar, Joint Registrar, and the Government, it cannot be asserted that the State exercises deep or all-encompassing control over their affair. The court held as following:
"17. Societies are, of course, subject to the control of the statutory authorities like Registrar, Joint Registrar, the Government, etc. but cannot be said that the State exercises any direct or indirect control over the affairs of the society which is deep and all pervasive. Supervisory or general regulation under the statute over the co- operative societies, which are body corporate does not render activities of the body so regulated as subject to such control of the State so as to bring it within the meaning of the "State" or instrumentality of the State. Above principle has been approved by this Court in S.S. Rana v. Registrar, Co-operative Societies and another (2006) 11 SCC 634. In that case this Court was dealing with the maintainability of the writ petition against the Kangra Central Co- operative Society Bank Limited, a society registered under the provisions of the Himachal Pradesh Co-operative Societies Act, 1968. After examining various provisions of the H.P. Co- operative Societies Act this Court held as follows:11
WRIT(A) No. - 2329 of 2019; All HC Page 20 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 "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 cooperative 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. 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 was the Society 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 characterised as public authority?
11. Respondent 2, the Society does not answer any of the aforementioned tests. In the case of a non-statutory society, the control thereover would mean that the same satisfies the tests laid down by this Court in Ajay Hasia v. Khalid Mujib Sehravardi. [See Zoroastrian Coop. Housing Society Ltd. v. Distt. Registrar, Coop. Societies (Urban).] Page 21 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16
12. It is well settled that general regulations under an Act, like the Companies Act or the Cooperative 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."The fact that cooperative societies are subject to the control of statutory authorities such as the Registrar, Joint Registrar, and the Government does not imply that the State exercises direct or indirect control over the society's affairs in a manner that is deep and all-pervasive."
21. Then, in Anand Prakash v. The Delhi State Co-Operative Bank Ltd. & Anr.,12 the Delhi High Court held that the writ petition against cooperative bank may not be maintainable just because it is performing a banking function. The relevant excerpt is produced hereinbelow:
"10. I have put to the counsel for the petitioner whether, if a private company instead of framing its own rules adopts the rules aforesaid applicable to the government servants to its employees, a writ petition would lie against the private company also. The counsel for the petitioner has fairly stated that it would not be. Similarly, merely because a Society adopts the rules applicable to Government servants to its own employees would not convert the said Co- operative Society into Government. The said contention of the petitioner is thus rejected.
11. Similarly, merely because the respondent is performing banking function would also not make the writ petition maintainable. It is not shown that the function so performed by the respondent is monopolistic. According to the document handed over by the petitioner himself there are as many as 32 12 2011 SCC OnLine Del 1841 Page 22 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 Co-operative Societies in Delhi performing the banking functions. This is besides the other banks operating in Delhi. Thus the said ground for maintainability of the writ petition is also rejected."
22. Based on the aforementioned, it is now well established that a cooperative society or its associated bank does not fall within the purview of Article 12 of the Constitution solely by virtue of being under the jurisdiction of the Registrar of Cooperative Societies or due to its engagement in banking functions. Nonetheless, I shall now deal with the amenability of service matters of the Cooperative Societies to the jurisdiction of Art. 226.
23. In Kulchhinder Singh v. Hardayal Singh Brar,13 the Supreme Court adjudicated upon the fact whether a writ pertaining to service matters can be entertained against the cooperative society. The relevant portion of the judgment is reproduced herein below:
"8. The question as to whether a cooperative society is a public authority has fallen for judicial notice and Amir Jamia [ILR 1969 Del 202] contains an elaborate discussion of the controversial topic covering decisions, English and Indian. It is also true that at least Madhya Pradesh (Dukhooram [Dukhooram Gupta v. Cooperative Agricultural Association Ltd., AIR 1961 MP 289] ) and Calcutta (Madan Mohan [Madan Mohan Sen Gupta v. State of W.B., AIR 1966 Cal 23] ) have considered whether a writ will issue against a cooperative society, simpliciter. Kumkum Khanna [ILR (1976) 1 Del 31] deals with a private college governed by a university ordinance.13
AIR 1976 SC 2216 Page 23 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16
9. Many other rulings have also been brought to our notice, but we do not think it necessary elaborately to investigate these issues notwithstanding the fact that Shri Gupta, appearing for the contesting respondent, challenged each one of the grounds stabilising his submission on rulings of this Court, of the High Courts and the English courts.
10. The reason why we are not inclined to add to the enormous erudition on the point already accumulated in case law is that a close perusal of the writ petition will disclose that essentially the appellant is seeking merely to enforce an agreement entered into between the employees and the cooperative bank.
11. There is no doubt that some of the legal problems argued by Sri Ramamurthy deserve in an appropriate case jurisprudential study in depth, although much of it is covered by authority. But assuming, for argument's sake, that what he urges has validity, the present case meets with its instant funeral from one fatal circumstance. The writ petition, stripped of embroidery and legalistics, stands naked as a simple contract between the staff and the society agreeing upon a certain percentage of promotions to various posts or an omnibus, all-embracing promise to give a quota to the existing employees. At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellant is that the remedy of Article 226 is unavailable to enforce a contract qua contract. We fail to see how a supplier of chalk to a government school or cheese to a government hospital can ask for a constitutional remedy under Article 226 in the event of a breach of a contract, bypassing the normal channels of civil litigation. We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service rule or statutory duty. What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or sovereign obligation or public function of a public authority. Private law may involve Page 24 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 a State, a statutory body, or a public body in contractual or tortious actions. But they cannot be siphoned off into the writ jurisdiction.
12. The controversy before us in substance will turn on the construction and scope of the agreement when the claim to a quota as founded cannot be decided in writ jurisdiction without going back on well-settled guidelines and even subverting the normal processual law -- except perhaps in extreme cases which shock the conscience of the Court or other extraordinary situation, an aspect we are not called upon to explore here. We are aware of the wide amplitude of Article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by his short, though, wrong cut."
24. The Delhi High Court in Satyapal Singh v. The Delhi State Cooperative Bank14 relied on Kulchhinder Singh (supra) and held that the service matters of the cooperative society are not amenable to the writ jurisdiction since there is no element of public duty involved. Such kinds of disputes are of private nature and do not fall within the ambit of the writ jurisdiction.
25. In Konaseema Co-operative Central Bank Ltd. v. N. Seetharama Raju,15 the Andhra Pradesh High Court held that bye-laws made by co- operative societies do not have the force of law. They are in the nature of contract, terms of contract, between the Society and its employees, or between the Society and its members. The relevant excerpt is produced hereinbelow:
14
W.P.(C) 7462/2022; Del HC 15 AIR 1990 Andhra Pradesh 171 Page 25 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 "The bye-laws made by a co-operative society registered under the A.P. Co-operative Societies Act do not have the force of law. They are in the nature of contract, terms of contract, between the Society and its employees, or between the Society and its members, as the case may be. Hence, where a Society cannot be characterised as a 'State'/ the service conditions of its employees, governed by bye-laws, cannot be enforced through a writ petition. However, in the matter of termination of service of the employees of a co-operative society, Section 47 of the A.P. Shops and Establishments Act provides a certain protection, and since the said protection is based upon public policy, it will be enforced, in an appropriate case, by this Court under Article 226 of the Constitution. Ordinarily, of course, an employee has to follow the remedies provided by the A.P. Shops and Establishment Act; but, in an appropriate case, this Court will interfere under Article 226, if the violation of a statutory public duty is established. It is immaterial which Act of Rule casts such a statutory public duty.
Mandamus, certiorari, and prohibition are public law remedies. They are not available to enforce private law rights. Every act of a society which may be a 'State' within the meaning of Article 12, does not necessarily belong to public law field. A society/ which is a 'State'/ may have its private law rights just like a Government. A contractual obligations, which is not statutory, cannot be enforced by way of a writ petition under Article 226 of the Constitution. Prior to entering into contract, however. Article 14 operates, as explained by the Supreme Court in E.E. & C. Ltd. v. State of West Bengal, AIR 1975 SC 226 and Ramana Dayaram Shetty, (1979) 3 SCC 489 : AIR 1979 SC 1628."
26. From the aforementioned discussion, it has been established that, for an organization to be deemed as performing a public function, such function must be inherently associated with those performed by the Page 26 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 State in its sovereign capacity. From the preceding discussion, there is no evidence on record to suggest that the Respondent/Bank undertakes functions comparable to those exclusively carried out by State authorities. The Respondent/Bank is a non-statutory entity that does not perform any public function, as banking services are provided by both private and State entities. Moreover, the Respondent/Bank does not hold any monopoly status conferred or mandated by law. Although the State may promote such entities as part of its social policy or economic development initiatives, this encouragement does not equate to the performance of a public function.
27. In the present case, the lack of State control over the management of the Respondent/Bank significantly influences the conclusion that the Respondent/Bank does not fall within the definition of a public authority. The matter and policy concerning promotion of employees is indeed 'not' a public function. The Respondent/Bank operates under democratic control, and the ultimate authority regarding the service conditions of its employees lies with the management of the Respondent/Bank. Thus, a cooperative bank's employee is neither a State nor the function performed by it can be covered in the aspect of a public function. Moreover, there is no violation of any statutory provision when there is a dispute pertaining to the dispute between the bank and its employees.
28. Therefore, in this petition, the Respondent/Bank does not qualify as a "State" or "instrumentality of the State" within the meaning of Article Page 27 of 28 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 02-Sep-2024 15:22:16 12 of the Constitution and is thus not subject to the jurisdiction of Article 226.
V. CONCLUSION:
29. In light of the comprehensive exposition of the law provided above, and given the absence of any pleadings by the Petitioner to substantiate that the respondent qualifies as a State or its instrumentality, it is deemed unnecessary to make any further observations on this matter.
30. The Writ Petition is, accordingly, disposed of granting liberty to the Petitioner to take recourse to remedies available before a Competent Forum.
31. The Writ Petition is, therefore, dismissed.
32. Interim order passed earlier stands vacated.
(Dr. S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 16th August, 2024/ Page 28 of 28