Orissa High Court
Pramod Kumar Pradhan vs The Management Of Angul .... Opposite ... on 16 August, 2024
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.15312 of 2011
Pramod Kumar Pradhan .... Petitioner(s)
Mr. Shibashish Misra, Adv.
-versus-
The management of Angul .... Opposite Party(s)
United Central Co-
operative Bank Ltd., Angul
& Ors.
Mr. Baidhar Sahoo, Adv.
for O.P.1
CORAM:
DR. JUSTICE S.K. PANIGRAHI
Order ORDER
No. 16.08.2024
06. 1. This matter is taken up through hybrid arrangement.
2. In filing this Writ Petition, the Petitioner has made the
following prayer:-
"It is therefore, most respectfully prayed that Your
Lordships would be graciously pleased to admit the
writ application, issue rule NISI in the nature of writ
of certiorari/mandamus calling upon the Opposite
Party to show cause as to why the charge sheets
dated 26.10.2009 and 22.03.2010 as at Annexure-3
and 8 respectively, Enquiry Reports, both dated
16.10.2010 as at Annexuers-16 and 17 and order of
termination dated 30.10.2010 as at Annexure-13, shall
not be quashed and if the Opposite Parties, more
particularly the Opp. Parties No.1 and 2 fail to show
cause or shows insufficient cause, the said Charge
Sheets, Enquiry Reports and the Order of
Signature Not Verified Termination as at Annexures-2, 8, 13, 16 and 18 and
Digitally Signed may kindly be quashed.
Signed by: AYASKANTA JENA
Designation: Personal Assistant And further, the Hon'ble Court be pleased to
Reason: Authentication
Location: High Court of Orissa
Date: 20-Aug-2024 10:46:36
direct the Opp.parties to treat the period of
suspension i.e. from 09.12.2009 to 30.10.2010 as on
duty and further direct the Opp.parties No.1 and 2 to
Page 1 of 12
pay the petitioner all consequential benefits, what he
would have got had he not been suspended and / or
terminated w.e.f. 30.10.2010."
3. At the outset, learned counsel for the Opposite Party
No.1 submits that this Court has earlier decided the
similar issue by the judgment dated 31.07.2024 passed in
W.P.(C) No.18641 of 2020 (Ch. Ajeet Kumar Das and Ors.
Vrs. Registrar, Co-operative Societies, Odisha and Ors.).
He, therefore, submits that this Writ Petition may be
disposed of in the light of the judgment passed in the
case of Ch. Ajeet Kumar Das and Ors. Vrs. Registrar, Co-
operative Societies, Odisha and Ors. (supra).
4. Learned counsel for the Petitioner submits that he has
no objection, if this matter is disposed of in the light of
the judgment passed in the case of Ch. Ajeet Kumar Das
and Ors. Vrs. Registrar, Co-operative Societies, Odisha
and Ors. (supra).
5. On perusal of the records and judgment passed in the
case of Ch. Ajeet Kumar Das and Ors. Vrs. Registrar, Co-
operative Societies, Odisha and Ors. (supra), it appears
that similar issue has already been decided by this Court
in the said judgment, which was disposed of on
31.07.2024. the ordering portion of the said judgment is as
follows:-
Signature Not Verified
Digitally Signed "The short question for adjudication in the instant petition is
Signed by: AYASKANTA JENA
Designation: Personal Assistant that whether the Opp. Party No.2/bank is amenable to the writ
Reason: Authentication
Location: High Court of Orissa jurisdiction of Court in the instant writ petition which involves a
Date: 20-Aug-2024 10:46:36
service dispute.
Page 2 of 12
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."
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 "other authorities" in defining the scope of
constitutional rights and governmental powers.
In the case of Ajay Hasia and others v. Khalid Mujib,1 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.,2 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
Signature Not Verified indication of the corporation being impregnated with governmental
Digitally Signed
Signed by: AYASKANTA JENA character;
Designation: Personal Assistant
Reason: Authentication
Location: High Court of Orissa
Date: 20-Aug-2024 10:46:36
1
(1981 ) 1 SCC 722
2
(1979) 3 SCC 489
Page 3 of 12
(3) It may also be a relevant factorwhether 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."
Then, in Pradeep Kumar Biswas v. Indian Institute of
Chemical Biology and Others,3 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,4 wherein the Apex Court, after evaluating the
memorandum of association and operational rules, concluded that
the NCERT was 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,5
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
Signature Not Verified
removable by the government, and undertook functions of significant
Digitally Signed public interest under governmental oversight.
Signed by: AYASKANTA JENA
Designation: Personal Assistant
Reason: Authentication
Location: High Court of Orissa
Date: 20-Aug-2024 10:46:36
3
(2002) 5 SCC 111
4
(1991) 4 SCC 578
5
(2002) 2 SCC 167
Page 4 of 12
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.
In Anandi Mukta & Others v. V.R. Rudani& Others,6 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 entity engaged in performing a public function. Then,
in Zee Telefilms Ltd. & Others v. Union of India,7 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,8 the Court found that SRM University was
engaged in a public function through its educational activities.
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.
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 dispute pertains to the service matters
Signature Not Verified and there is no element of public duty involved in it, then the dispute
Digitally Signed
Signed by: AYASKANTA JENA falls within the domain of private dispute and is not amenable to the
Designation: Personal Assistant
Reason: Authentication
Location: High Court of Orissa
jurisdiction of the writ Court.
Date: 20-Aug-2024 10:46:36
6
1989 (2) SCC 691
7
(2005) 4 SCC 649
8
2015 (16) SCC 530
Page 5 of 12
It is not in dispute that the Society has not been constituted
under an Act. It functions like any other Co-operative Society but
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.
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.
In S.S. Rana v. Registrar, Co-Operative Societies,9 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 MujibSehravardi [(1981) 1 SCC 722]. [See Zoroastrian Coop. Housing Society Ltd. vs. District Registrar, Coop. Societies (Urban) &Ors. reported in 2005 (5) SCC632.] It is well settled that general regulations under an Act, like Companies Act or the Co-operative Societies Act, would not render the activities of a company or a society as subject to control of the State. Such control in terms of the provisions of the Act are meant to ensure proper functioning of the Society and the State or statutory authorities would have nothing to do with its day-to-day functions." (Emphasis Supplied) In Krishna Mohan v. State of U.P.,10 the Allahabad High Court has held that supervisory or general regulation under the statute or by any state authority over cooperative societies, which are body corporates, does not make their activities subject to such control by the State that they would be considered an extension or instrumentality of the State. The relevant portion is produced hereinbelow:
"17. Societies are, of course, subject to the control of the Signature Not Verified statutory authorities like Registrar, Joint Registrar, the Digitally Signed Government, etc. but cannot be said that the State exercises Signed by: AYASKANTA JENA Designation: Personal Assistant Reason: Authentication any direct or indirect control over the affairs of the society Location: High Court of Orissa which is deep and all pervasive. Supervisory or general Date: 20-Aug-2024 10:46:36 9 2006 (11) SCC 634 10 WRIT(A) No. - 2329 of 2019; All HC Page 6 of 12 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:
"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 characterized 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 Signature Not Verified control thereover would mean that the same satisfies the tests laid Digitally Signed down by this Court in Ajay Hasia v. Khalid MujibSehravardi. [See Signed by: AYASKANTA JENA Designation: Personal Assistant Zoroastrian Coop. Housing Society Ltd. v. Distt.Registrar, Coop. Reason: Authentication Location: High Court of Orissa Date: 20-Aug-2024 10:46:36 Societies (Urban).] Page 7 of 12
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."
Then, in Anand Prakash v. The Delhi State Co-Operative Bank Ltd. &Anr.,11 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 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."
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 supervisory jurisdiction of the Registrar of Cooperative Signature Not Verified Societies or due to its engagement in banking functions. Digitally Signed Signed by: AYASKANTA JENA Nonetheless, I shall now deal with the amenability of service matters Designation: Personal Assistant Reason: Authentication Location: High Court of Orissa of the Cooperative Societies to the jurisdiction of Article 226. Date: 20-Aug-2024 10:46:36 11 2011 SCC OnLine Del 1841 Page 8 of 12 In Kulchhinder Singh v. Hardayal Singh Brar,12the 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.
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 Signature Not Verified Digitally Signed enforce a contract qua contract. We fail to see how a supplier Signed by: AYASKANTA JENA Designation: Personal Assistant of chalk to a government school or cheese to a government Reason: Authentication Location: High Court of Orissa hospital can ask for a constitutional remedy under Article 226 Date: 20-Aug-2024 10:46:36 in the event of a breach of a contract, bypassing the normal 12 AIR 1976 SC 2216 Page 9 of 12 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 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." (Emphasis supplied) The Delhi High Court in Satyapal Singh v. The Delhi State Cooperative Bank13 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.
In Konaseema Co-operative Central Bank Ltd. v. N. Seetharama Raju,14 the Andhra Pradesh High Court contributed to the narrative and 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:
"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 Signature Not Verified its employees, or between the Society and its members, as the case Digitally Signed Signed by: AYASKANTA JENA may be. Hence, where a Society cannot be characterized as a 'State', Designation: Personal Assistant Reason: Authentication the service conditions of its employees, governed by bye-laws, cannot Location: High Court of Orissa Date: 20-Aug-2024 10:46:36 be enforced through a writ petition. However, in the matter of 13 W.P.(C) 7462/2022; Del HC 14 AIR 1990 Andhra Pradesh 171 Page 10 of 12 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."
1. 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 State in its sovereign capacity.
2. Taking a cue 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".
3. 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 Signature Not Verified definition of a public authority. The deputation of employees from Digitally Signed another bank and their subsequent absorption by the Signed by: AYASKANTA JENA Designation: Personal Assistant Respondent/Bank does not imply that it has undertaken a public Reason: Authentication Location: High Court of Orissa function. The Respondent/Bank operates under democratic control, Date: 20-Aug-2024 10:46:36 and the ultimate authority regarding the service conditions of its employees lies with the management of the Respondent/Bank.
Page 11 of 124. Therefore, in this petition, the Respondent/Bank does not qualify as a "State" or "instrumentality of the State" within the meaning of Article 12 of the Constitution and is thus not subject to the jurisdiction of Article 226.
I. CONCLUSION:
In light of the comprehensive exposition of the law provided above, and given the absence of any pleadings by the Petitioners to substantiate that the Opposite Party/bank qualify as a State instrumentality, it is deemed unnecessary to make any further observations on this matter.
6. Considering the submissions made on behalf of both the parties and taking into account the judgment dated 31.07.2024 passed in W.P.(C) No.18641 of 2020, this Court is inclined to accede to the submission of the learned counsel for the Opposite Party No.1. Accordingly, this Court permits the Petitioner to approach the appropriate forum for redressal of his grievance.
7. It is further directed that if the Petitioner approaches the authority concerned for redressal of his grievance within a period of fifteen working days hence, the authority concerned would consider such claim of the Petitioner as per the law by condoning the delay, if any, liberally.
8. The Writ Petition is, accordingly, disposed of.
Signature Not Verified (Dr. S.K. Panigrahi) Digitally Signed Signed by: AYASKANTA JENADesignation: Personal Assistant Judge Reason: Authentication Location: High Court of Orissa Date: 20-Aug-2024 10:46:36 Ayaskanta Page 12 of 12