Gujarat High Court
Arvindbhai Mulubhai Bhutaiya And Ors. vs Amreli District Central Co-Op. Bank ... on 2 March, 1998
Equivalent citations: (1998)2GLR1740
JUDGMENT M.R. Calla, J.
1. This batch of six Special Civil Applications have been filed by the employees of the Amreli District Central Co-operative Bank claiming relief against the termination of their services and in one of the petitions, i.e., Special Civil Application No. 6135 of 1997 for operating the Savings Bank Account No. 258. Whereas the essential question about the maintainability of the writ petitions under Article 226 of the Constitution of India against the respondent-Amreli District Central Co-operative Bank Ltd., is common in all these petitions and there are certain other common questions of law of course based on identical facts, all these Special Civil Applications were heard together and the same are being decided by this common judgment and order.
2. Hearing of these petitions commenced on 13-8-1997 and the matter was argued on several dates till today, i.e., 9-10-1997 as per the convenience of the learned Counsels appearing for the parties.
3. The facts relating to Special Civil Application No. 5552 of 1997:
This petition has been filed on behalf of 23 petitioners in all. They all claim to have been appointed as clerks on the basis of the selections held in pursuance of the notice inviting applications published through advertisement dated 14-3-1996 for which interview call letters were issued on 16-12-1996 and the interviews were held on 28th, 29th and 30th, December, 1996. Initially appointment was given to them on probation and the orders were issued on 16-1-1997. The petitioners have also come with the case that their performance was considered by the respondent-Bank in the meeting of the Executive Committee held on 10-5-1997 and having found their work to be satisfactory, orders were issued on the very same day, i.e., on 10-5-1997 giving them regular appointment on permanent basis and also giving them the regular scale of clerk. It has been alleged that the election of the new Board of Directors took place in June/July, 1997 and there was a change of group of power in the Bank and instead of Shri Dilipbhai Nanubhai Sanghani, Shri Manubhai Kotadia took over as the new Chairman on 25/26-7-1997 and immediately thereafter, i.e., on 28-7-1997 itself the decision was taken to terminate their services and orders were issued on the very same day, i.e., on 28-7-1997. Special Civil Application was filed on 30-7-1997 and all of them are continuing in service at present on the basis of the interim order dated 30-7-1997 which was passed in presence of both the sides as Mr. Mangukia had appeared on 30-7-1997 itself to oppose the petition.
4. Special Civil Application No. 5573 of 1997 has been filed by a group of 9 petitioners who claim to have been appointed as Secretaries on the basis of the selections held in pursuance of notice inviting applications through advertisement dated 5-2-1996 for which interview call letters were sent on 24-2-1996, interviews were held on 2-3-1996 and on the basis of the selection, appointment was given to them vide orders dated 12-3-1996. It is also the case of the petitioners that performance of these petitioners were considered by the respondent-Bank in the meeting of its Executive Committee held on 10-5-1997 and the orders giving them regular absorption in the service in the regular scale were issued on the very same day, i.e., on 10-5-1997. While they were so continuing in the service, the elections of the new Board of Directors were held in June/July, 1997 and there was a change in the group in power and instead of Shri Dilipbhai Nanubhai Sanghani, Shri Manubhai Kotadia took over as Chairman on 25/26-7-1997 and immediately thereafter on 28-7-1997 a decision was taken to terminate them and accordingly orders were issued on the very same day, i.e., 28-7-1997. This Special Civil Application was filed on 30-7-1997 and at present these petitioners are continuing in service on the strength of the interim order passed on 30-7-1997.
5. Special Civil Application No. 5617 of 1997 has been filed by 4 petitioners who claim to have been appointed as Clerks on the basis of the selections held in pursuance of the notice inviting applications through advertisement dated 14-3-1996 for which interview call letters were issued on 15-12-1996, interviews were held on 28th, 29th and 30th December, 1996 and on their being selected appointment on probation was given vide order dated 16-1-1997. It is also petitioners' case that their performance was considered by the respondent-Bank in the meeting of its Executive Committee held on 10-5-1997 and on their performance being found to be satisfactory, orders were issued on 10-5-1997 itself giving them regular appointment on permanent basis and confirming them in the regular scale of clerk. It is alleged that the elections of the Board of Directors were held in June/July, 1997 and with the change in the group in power, in place of Shri Dilipbhai Nanubhai Sanghani, Shri Manubhai Kotadia took over as Chairman on 25/26-7-1997 and immediately thereafter the decision was taken on 28-7-1997 itself to terminate the services of the petitioners and accordingly orders were issued on 28-7-1997. However, at present these petitioners are continuing in service on the strength of the interim order of This Court dated 1-8-1997.
6. Special Civil Application No. 5627 of 1997 has been filed by 4 petitioners who claim to have been appointed as clerks on the basis of the selection held in pursuance of the notice inviting applications vide advertisement dated 14-3-1996, for which interview call letters were issued on 16-12-1996, interviews were held on 28th, 29th and 30th December, 1996. According to the petitioners, their names were included in the waiting list prepared in the aforesaid selection and petitioner Nos. 1 to 3 were given appointments initially on probation on 15-5-1997 and the petitioner No. 4 was given appointment on probation later on 19-7-1997. It is also the case of the petitioners that later on petitioner Nos. 1 to 3 were made permanent on 19-7-1997 on the basis of the decision taken at the meeting of the Executive Committee of the respondent-Bank. Petitioner No. 4, however, continued to be on probation. Thereafter, with the change of the group in power, as aforesaid, a decision was taken to terminate the services of all these petitioners in the meeting of the Board of Directors held on 28-7-1997 and on the same day their termination orders were issued. At present these petitioners are continuing in service as recorded in the order sheet dated 4-8-1997.
7. Special Civil Application No. 5628 of 1997 has been filed by 5 petitioners, who claim to have been appointed as Peons. These petitioners have come with a case that in November 1996 there was temporary requirement of Peons and they were appointed as daily wagers. A copy of one such standard order dated 9-11-1996 has been placed on record. Similar type of orders were passed with regard to other petitioners. It is also the case of these petitioners that while they were so working as daily wagers since November 1996, permanent vacancies on the post of Peon became available and on 19-7-1997 a Resolution was passed appointing these petitioners on permanent basis and on the basis of the Resolution dated 19-7-1997 orders appointing them on permanent basis were issued on the very same day, i.e., 19-7-1997. A copy of one of such orders dated 19-7-1997 has been placed on record. On the strength of this order dated 19-7-1997 they reported on duty as permanent Peons on 24-7-1997. Election of the new Board of Directors took place in June/July, 1997 and on 25/26 July, 1997 Shri Manubhai Kotadia took over as the Chairman in place of Dilipbhai Nanubhai Sanghani and immediately thereafter on 28-7-1997 a decision was taken to terminate the services of these petitioners and accordingly orders terminating their services were issued on 28-7-1997. The present Special Civil Application was filed on 1-8-1997 and these petitioners are at present continuing in service as recorded in the order sheet dated 4-8-1997.
8. Special Civil Application No. 6135 has been filed by one petitioner, who had been initially appointed in the Bank as Clerk on 1-9-1957 and in due course he reached the position of General Manager on 30-5-1994. On 22-6-1994 the Registrar was informed about the wide experience and good work of the petitioner and the Registrar then granted approval for his appointment on 19-9-1994. On 6-9-1995 the respondent-Bank granted 3 years' extension to the present petitioner after his retirement. The petitioner then tendered his resignation on 19-6-1997 and the same was accepted on 5-7-1997. On 8-7-1997 the Life Insurance Corporation was intimated about the amount of gratuity and the same was given to the Gratuity Trust by Life Insurance Corporation on 26-7-1997 and the same was credited into the petitioner's Account. It is also the case of the petitioner that he is holder of Savings Account No. 258 with the respondent-Bank. Election of the new Board of Directors were held in June/July, 1997 and Shri Manubhai Kotadia took over as the new Chairman on 25/26-7-1997 and in the first meeting of the Board of Directors held on 28-7-1997 a decision was taken to freeze the petitioner's account. It is also the case of the petitioner that in his Savings Account No. 258 a sum of Rs. 46,104-45 Ps. was lying in addition to the amount of Gratuity, i.e., Rs. 3,49,246/-, which was credited to his account and thus total amount of Rs. 3,95,350-45 Ps. which was lying in his Account, was freezed (sic). He came to know of it on 8-8-1997 (through letter dated 4-8-1997, which was served upon him on that day) when he wanted to operate his account by drawing a withdrawal cheque for a sum of Rs. 10,000/-. The petitioner has sought the setting aside of the decision/Resolution No. 4(14) dated 28-7-1997 (Annexure 'A') and the letter dated 4-8-1997 by which his Account was freezed. The petitioner thus seeks direction against the respondent-Bank so as to allow him to operate his Savings Account No. 258. This Special Civil Application was filed by the petitioner on 20-8-1997.
9. Apart from the pleadings in the respective Special Civil Applications, the following affidavits, rejoinders, sur-rejoinders etc., have been filed by the parties:
Special Civil Application No. 5552 of 1997:
(i) Affidavit-in-reply dated 4-8-1997 (by respondent-Bank)
(ii) Affidavit-in-rejoinder dated 8-8-1997 (by petitioner No. 16)
(iii) Affidavit-in-sur-rejoinder dated 11-8-1997 (by respondent-Bank)
(iv) Addl. Affidavit dated 12-8-1997 (by petitioner No. 21)
(v) Further affidavit-in-reply dated 20-8-1997 (by respondent-Bank)
(vi) Affidavit-in-rejoinder to further affidavit dated 26-8-1997 (by petitioner No. 10)
(vii) Affidavit-in-sur-rejoinder dated 27-8-1997 (by respondent-Bank)
(viii) Synopsis dated 1-9-1997 (by respondent-Bank)
(ix) Reply affidavit to the affidavit in sur-rejoinder dated 2-9-1997 (by petitioner No. 1)
(x) Further affidavit-in-reply dated 10-9-1997 (by respondent-Bank)
(xi) Further affidavit-in-rejoinder to the further affidavit-in-reply dated 12-9-1997 (by petitioner No. 16) Special Civil Application No. 5573 of 1997:
(i) Affidavit-in-reply dated 5-8-1997 (by respondent-Bank)
(ii) Affidavit-in-rejoinder dated 8-8-1997 (by petitioner No. 9)
(iii) Affidavit-in-sur-rejoinder dated 11-8-1997 (by respondent-Bank) Special Civil Application No. 5617 of 1997:
(i) Affidavit-in-reply dated 5-8-1997 (by respondent-Bank)
(ii) Affidavit-in-rejoinder dated 8-8-1997 (by petitioner No. 2)
(iii) Affidavit-in-sur-rejoinder dated 11-8-1997 (by respondent-Bank) Special Civil Application No. 5627 of 1997:
(i) Affidavit-in-reply dated 6-8-1997 (by respondent-Bank)
(ii) Affidavit-in-rejoinder dated 11-8-1997 (by petitioner No. 1) Special Civil Application No. 5628 of 1997:
(i) Affidavit-in-reply dated 6-8-1997 (by respondent-Bank)
(ii) Affidavit-in-rejoinder dated 11-8-1997 (by petitioner No. 1) Special Civil Application No. 6135 of 1997:
(i) Affidavit-in-reply dated 26-8-1997 (by respondent-Bank)
(ii) Affidavit-in-rejoinder dated 26-8-1997 (by petitioner)
(iii) Affidavit-in-reply dated 28-8-1997 (by respondent-Bank)
(iv) Affidavit-in-rejoinder to the second affidavit-in-reply dated 12-9-1997 (by petitioner)
10. It thus appears that the respondent-Bank has sought to traverse the claim of the petitioners and sought to defend the impugned orders of the termination passed against the petitioners in Special Civil Applications Nos. 5552, 5573, 5617, 5627 and 5628 of 1997 and in Special Civil Application No. 6135 of 1997 the respondent-Bank has sought to defend the Resolution passed by the Bank freezing the Savings Account No. 258 of the petitioner Z. L. Vaghasia as also the letter dated 4-8-1997 sent to the petitioner by the respondent-Bank.
11. At the very threshold these petitions were opposed and sought to be thrown out on behalf of the respondent-Bank on the basis that Amreli District Central Cooperative Bank Ltd., Amreli is neither a 'State' nor an 'authority' within the meaning of Article 12 of the Constitution of India and, therefore, the writ petitions against the Amreli District Central Co-operative Bank Ltd., are not maintainable and there is no question of issuing any writ, order or direction against the respondent-Bank by This Court in exercise of its powers under Article 226 of the Constitution of India. This objection has been raised in the nature of preliminary objection which goes to the question of the very maintainability of the writ petitions and, therefore, the Court considered it necessary to decide this objection first, before dealing with the other points. The case of the respondent-Bank is that it is essentially a Co-operative Society registered under the provisions of the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as 'the Act'). The Management of the Society vests in its General Body as provided under Section 73 of the Act. Subject to the overall control of the Board of Directors, the Management of the Society has to be carried out by Committee constituted under the provisions of the Act as provided under Section 74 of the Act. By virtue of the Amendments made in the Act, vide Gujarat Act No. 23 of 1981 and No. 6 of 1982 certain Societies had been defined as Special Co-operative Societies and their elections are to be held and conducted as provided in Chapter XIA of the Act. The elected Committee of the Bank is in full control of the Management. There is no Government interference in the working of the Bank. The bye-laws of the Bank provide that the Board of Directors shall consist of 15 elected Directors, 1 Nominee of the Gujarat State Co-operative Bank and the District Registrar. Over and above the aforesaid 17 members of the Board of Directors, the Government has power to nominate 3 Directors on the Board of Directors of the Bank provided the criteria for exercise of the power to nominate such Directors, as provided in Section 80 of the Act, is satisfied. The Bank has to carry out its business within the parameters of the provisions of the Act and the objects for the incorporation of the respondent-Bank have been provided in Chapter II of the bye-laws. The objects are in the nature of doing the banking business. The manner of doing the business is based on co-operative movement. The bye-laws extensively provide as to what business the Bank shall carry out. The bye-laws provide for the constitution of the Board of Directors and their functions and duties also. The general guidelines provided by National Bank for Agriculture and Rural Development ('NABARD' for short) in respect of the Banks are that the Management cost of the Bank shall not be more than 2% of its overall functional cost. 1% cost of the functioning would be about Rs. 50/- lacs. In 1995-96, the expenses incurred by the respondent-Bank were about 2.41% towards the Management cost which has increased in the year 1996-97 to 3.41% and in case the present staff is continued it would go much higher. The function of the respondent-Bank is pure and simple business of banking and the manner of doing the business is based on co-operative movement, which is codified by the Statute and the Act known as "Gujarat Cooperative Societies Act". According to the learned Counsel for the respondent-Bank only because the respondent-Bank is governed by the statutory provisions, it cannot be said that the respondent-Bank is either an 'agency' or an 'instrumentality' of the State. Except doing financial business the Bank does not indulge in any other activities, which can be said to be any duty or obligation of State. According to the respondent every financial institution, be it banking or non-banking, is required to follow the norms and Regulations framed by the Regulatory Authority like Reserve Bank of India or other institutions. Therefore, such non-Governmental financial agencies and/or institutions cannot be brought under the purview of the writ jurisdiction. On the basis of the facts and provisions, as above, an objection has been raised that the respondent-Bank is not a 'State' or the 'other authority' as defined under Article 12 of the Constitution of India and, therefore, it is not amenable to the writ jurisdiction.
12. As against it, it has been submitted by Mr. Jayant Patel on behalf of the petitioners that the respondent-Bank, though registered under the Act, is a District level Federal Co-operative Bank and it is under the direct control of the Reserve Bank of India under the Banking Regulations Act. The operations of the respondent-Bank are huge and NABARD gives finance to the Gujarat State Co-operative Bank Ltd., and the Gujarat State Co-operative Bank Ltd., in turn finances the respondent-Bank for the purposes of distributing the same finance to the various primary level Co-operative Societies. Considering the large number of operations, the importance of the banking activities in the co-operative field and considering the fact that the respondent-Bank is a District level Federal Bank and is also a specified Co-operative Society under Section 74C of the Act, to which special importance is given by the Government as well as in the Scheme of the Act, the respondent-Bank is 'an agency' or 'instrumentality' of the State within the meaning of Article 12 of the Constitution of India. While making reference to the averments made in the rejoinder (Page 102 of the paper-book and internal page 28 of the rejoinder in Special Civil Application No. 5552 of 1997) Mr. Patel has submitted that the Central Government had introduced Comprehensive Crop Insurance Scheme from 1985-86 and as per this Scheme a District level Bank acts as the Nodal agency-Bank, i.e., agency for implementation of the said Scheme. Under the said Scheme the liability of indemnification is to be shared by the General Insurance Corporation of India which is a Government organization and the State Group Insurance Fund, which is to be created by the State Government itself. A copy of the Scheme has been enclosed as Annexure 'J' to the rejoinder referred to as above. Mr. Patel has submitted that a study of this Scheme would show that the respondent-Bank is acting as a direct agent for this Scheme of Crop Insurance introduced by the Government of India. Reference has been made to the various clauses of this Comprehensive Crop Insurance Scheme in support of the argument that the respondent-Bank is working as an 'agency' or 'instrumentality' of the State. Reference has also been made to several provisions of the National Bank for Agriculture and Rural Development Act, 1981 to highlight the nature of functions, which can be said to have been entrusted to a Co-operative Society like respondent-Bank in the context of the provisions of the NABARD and the control of NABARD over Co-operative Societies like the respondent-Bank. Mr. Patel has also referred to the various provisions of the Gujarat Co-operative Societies Act and the Rules made thereunder and the bye-laws of the respondent-Bank, the details about which are given hereinunder.
13. Under Section 2(7) of the Gujarat Co-operative Societies Act, 1961 (which will hereinafter be referred to as 'the Act'), a 'co-operative bank' means a society registered under this Act doing the business of banking, as defined in clause (b) of Sub-section (1) of Section 5 of the Banking Companies Act, 1949. Under Section 2(19) of the Act, 'society' means a Co-operative Society registered, or deemed to be registered, under this Act. Section 3(1) provides that the State Government shall appoint a person to be the Registrar of Co-operative Societies for the State for carrying out the purposes of this Act. Section 11 empowers the Registrar to decide the question for the purposes of formation, or registration or continuance of a Society as also the question relating to the admission of a person as a member of a Society. Under Section 13 it is provided that no amendment of the bye-laws of a Society shall be valid until registered under this Act. Under Section 14(1) it has been provided that, if it appears to the Registrar that an amendment of the bye-laws, except in respect of the name or objects of the Society, is necessary or desirable in the interest of such Society, he may call upon the Society, in the prescribed manner, to make the amendment within such time as he may specify. It is provided in Section 14(2) that if the Society fails to make the amendment within the time so specified, the Registrar after giving the Society an opportunity of being heard and with the prior approval of the State Co-operative Council, may register the amendment, and shall thereupon issue to the Society a copy thereof certified by him. With effect from the date of the registration of the amendment in the manner aforesaid, bye-laws shall be deemed to have been duly amended accordingly; and the bye-laws as amended shall be binding on the Society and its members. Section 17 provides for the previous sanction of the Registrar in case of amalgamation, transfer, division or conversion of the Society. Section 17(e) vests in the Registrar power to direct amalgamation and re-organization of the Society in public interest. Section 20 provides for the cancellation of the registration by the Registrar on the conditions mentioned in this section. According to Section 76 the qualification for the appointment of the Manager, Secretary, Accountant or any other officer or employee of the Society and the conditions of service of such officers and employees shall be such as may, from time to time, be prescribed; prescribed means prescribed by the Rules. Under Section 2(18) "Rule" means Rules made under this Act. Section 76B provides for the removal of the officers by the Registrar as also clothes the Registrar with the power to direct the Society to elect or appoint a person or a qualified member in the vacancy caused by such removal. Section 81 provides for supersession of the Committees of a Society having Registrar as its member, and in respect of a Committee of a Society which does not have the Registrar as its member, it has been provided that if the Registrar is of the opinion that the Committee is making persistent defaults or is negligent in the performance of the duties imposed on it by this Act or the Rules or the bye-laws or does anything which is prejudicial to the interest of the Society or its members he may supersede it. It is also provided in Section 81 that the State Government or the Registrar, as the case may be, may remove the Committee and appoint a Committee of one or more members of the Society, in its place or one or more administrator who need not be members of the Society. Under Section 81(2) the Committee or the Administrator so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have power to exercise all or any of the functions of the Committee or of any officer of the Society, and take all such action as may be required in the interests of the Society. Section 82 provides for the powers of the Registrar to enforce the performance and obligations and the books of accounts with respect to all sums of money received and spent by the Society as also the statement of assets and liabilities of the Society and such statements and returns and such records have to be furnished to the Registrar as may be ordered by him from to time and the officers of the Society are bound to comply the order within the period specified therein. The consequences of noncompliance of such orders of the Registrar have been provided in Sub-section (2) of Section 82(3). Section 86(1) provides that the Registrar may hold an inquiry into constitution, working and financial conditions of a Society. Under Section 96 the disputes touching the constitution, management or business of a Society have to be referred to the Registrar in the cases mentioned thereunder and such disputes are to be settled by a nominee or Board of nominees appointed by the Registrar. Under Section 107 the Registrar has the power to order the winding up of the Society in certain cases mentioned in Section 107 itself. Section 160(1) provides that the Registrar, of his own motion or otherwise if satisfied in public interest or for the purposes of securing the proper implementation of co-operative production and other development programmes approved or undertaken by the State Government or for linking and coordinating of co-operative activities such as marketing and credit, or securing the proper management of the business of the Society generally or preventing the affairs of the Society being conducted in a manner detrimental to the interests of the members, or of the depositors or the creditors thereof, it is necessary to issue directions to any class of Societies generally or to any Societies in particular, may issue directions to them, from time to time, and all Societies or the Societies concerned, as the case may be, shall be bound to comply with such directions.
14. The Gujarat Co-operative Societies Rules, 1965 (which will hereinafter be referred to as 'the Rules') have been framed to give effect to the various provisions of the Act including the sections to which reference has been made hereinabove, vesting powers on the Registrar and the manner in which the control is exercised by the Registrar with regard to the functioning of the Societies and their constitution, management and business.
15. Mr. Mangukia in support of his submissions on the question of maintainability of the petition that Amreli District Central Co-operative Bank Ltd., is not amenable to writ jurisdiction under Article 226 has placed reliance on the decision of the Supreme Court in Ajay Hasia v. Khalid Mujib Sehravardi , in which case the Supreme Court considered the question as to whether a College, administration and management of which are carried on by a society registered under the Jammu & Kashmir Registration of Societies Act, 1898, could be held to be an instrumentality or agency of the State or an authority within the meaning of Article 12. Having regard to the Memorandum of Association and the Rules of the Society, it was held that the Society is an instrumentality of the State and the Central Government and it was an authority within the meaning of Article 12 of the Constitution of India. The Supreme Court found that the composition of the Society was dominated by the representives appointed by the Central Government and the Governments of Jammu and Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the College are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Government. The Supreme Court also considered that the Rules to be made by the Society are also required to have the prior approval of the State and the Central Government and the accounts of the Society, were also to be submitted to both the Governments for their scrutiny and satisfaction. The Society has also to comply with the directions that may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments was indeed deep and pervasive. The Government had also the power to appoint any other person or persons to be members of the Society and any member of the Society, other than a member representing the State or the Central Government, could be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is in charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of State and the Central Government. Thus, the State Government and by reason of the provision for approval, the Central Government also had full control of the working of the Society. However, the Supreme Court has found that for the purpose of determining the question as to whether any body or Corporation is an 'authority' within the meaning of Article 12 or not, the test is whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be made not as to how the juristic person is born but why it has been brought into existence. It may be a society registered under the Societies Registration Act or any other similar statute. Whatever be its genetical origin, it would be an 'authority' within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. Mr. Mangukia next cited the decision of the Supreme Court in the case of Section Section Dhanoa v. Delhi Municipality . In this case, the question for consideration before the Supreme Court was as to whether the definition of public servant under Section 21(12) of the I.P.C. does not include a civil servant working on deputation with Co-operative Society and as to whether for his prosecution the sanction under Section 197 Cr. P. C. was necessary. The Supreme Court held that a member of the Indian Administrative Service, whose services are placed at the disposal of a cooperative society (Super Bazaar) registered under the Bombay Co-operative Societies Act, 1925 is not a public servant within the meaning of Clause (12) of Section 21 of the Penal Code for the purposes of Section 197 of the Cr. P. C. During his period of deputation, he was not an officer in the service or pay of the Government, nor was he in the service of a local authority, a corporation established by or under an Act or a Government company. The term "corporation" is wide enough to include private corporations. But in the context of clause (12) of Section 21 of the Penal Code, the expression "corporation" must be given a narrow legal connotation, and it means a corporation created by the Legislature and not a body or society brought into existence by an act of a group of individuals. Since the Co-operative Society is not a statutory body because it is not created by a statute, the Co-operative Society is, therefore, not a Corporation established by or under an Act of the Central or State Legislature. Thus, the question which was considered and decided in this case by the Supreme Court was as to whether a Co-operative Society not being a statutory body nor being created by a statute, could be taken as a Corporation under Clause (12)(b) of Section 21 of the I.P.C. and this decision of the Supreme Court is not an authority on the question as to whether a Co-operative Society can be any "other authority" within the meaning of Article 12 of the Constitution of India or not. The next authority which was cited by Mr. Mangukia is the decision of the Supreme Court in Central Inland Water Transport Corporation Ltd. and Anr. v. Brojo Nath . The Supreme Court held that Central Inland Water Transport Corporation Ltd., is not only a Government Company as defined in Section 617 of the Companies Act, but was wholly owned by the Central Government and two State Governments jointly. The activities carried on by the Corporation are of vital national importance and such a Corporation could not be described as a trading company. Mr. Mangukia has also placed reliance on Tekraj v. Union of India . It was a case with regard to the Institute of Constitutional and Parliamentary Studies. The Institute is registered under Societies Registration Act and the Supreme Court held that this Institute was neither an 'agency' nor an 'instrumentality' of the State so as to come within the purview of "other authority". It has also been observed that in a given case some of the features may emerge so boldly and prominently that a second view may not be possible. Reliance has also been placed by the learned Counsel for the respondent-Bank in the case of A.I.S.S.E. Association v. Defence Minister-cum-Chairman B.O.G., S.S. Society, reported in AIR 1989 SC 88. In this case the Supreme Court considered as to whether Sainik School Society is a State amenable to writ jurisdiction. The Supreme Court held that the employees of such Sainik School and Kendriya Vidyalaya form different classes and the plea of discrimination and equal pay equal work was not available. However, certain directions were given by the Supreme Court with regard to the conditions of the service of the employees. Mr. Mangukia placed strong reliance on V. I. Khalifa v. Satubha Tapubha Vaghela reported in 1988 (2) GLH 73 : 1988 (1) GLR 679, in which it has been held by the single Bench of This Court that Surendranagar Cooperative Bank Ltd., is not a State within the meaning of Article 12 of the Constitution and the issue of the writ would not be justified to rectify an alleged private wrong consisting of dismissal of the petitioner from service. In this very judgment reference has been made to a Division Bench judgment of This Court reported in 1984 GLH (UJ-71) 50 Ram Narayan Rai v. Managing Director Kaira Co-op. Milk Producers' Union Ltd. and the part of the portion, which has been quoted in Para 13, reads as under:
We accept the proposition of law that even a co-operative society or even a company established under the provisions of the Companies Act can be an instrumentality or agency of the State, and therefore, the nature of its birth by itself is hardly a factor to be taken serious note of while deciding the question.
However, it was found by the Division Bench in that case that the concerned Cooperative Society was manned and managed by citizens privately without any effective or substantial control over its management and conduct of affairs by the State or its agency and that the Society in essence had been created by the milk producers for their own benefit and if any social and welfare activities are conducted by it incidentally for the benefit of the general population in the District or in the State, it cannot be said that it is an "instrumentality" of the State.
In the same judgment in Para 14 a reference has been made to the order passed in Special Civil Application No. 4255 of 1982 decided on 4-4-1984 dealing with same question in regard to the Kodinar Rural Electricity Co-operative Society Ltd., wherein it was held that it was not a State as envisaged in Article 12 of the Constitution. It has been further mentioned that in Special Civil Application No. 2885 of 1984 while dismissing the petition summarily on 14-8-1984 it was observed that the Amreli Jilla Madhyastha Sahakari Bank Ltd., Amreli was not a State since it was not shown an instrumentality or hand of the State in discharging State functions.
16. Besides the aforesaid reported decisions reliance has also been placed on a decision dated 30-6-1994 rendered by a single Bench of This Court in Special Civil Application Nos. 259 and 260 of 1994 in the case of L.K.L. Construction Co. Ltd. v. Krishak Bharati Co-operative Ltd. In this decision rendered by the single Bench several cases have been considered and thereafter in para 15 it has been held that the point is finally concluded by a decision of the Division Bench of This Court in Letters Patent Appeal No. 375 of 1985 decided on 1/2-2-1994 wherein it was held that Gujarat State Fertilizer Co. Ltd. (G.S.F.C.) is not a State within the meaning of Article 12 of the Constitution. It has been thus held that Krishak Bharati Co-operative Ltd., cannot be said to be a State, or 'other authority' or 'instrumentality' of the State within the meaning of Article 12 of the Constitution of India and the petitions filed against it are not maintainable and on this ground alone the petitions were dismissed. The Division Bench while deciding this Letters Patent Appeal No. 375 of 1985 on the facts of that case came to the conclusion that manufacture of fertilizer was not a public duty, but is purely a manufacturing activity. It was a commercial undertaking run by the G.S.F.C. Ltd., and it manufactures and sells fertilizers just as other private and public sector Companies, who are in the same line. However, it appears that in this case the parties had arrived at an agreement between then which was filed in the Court and the Appeal filed by the G.S.F.C. Ltd. was allowed and disposed of in terms of the agreement between the parties. The next unreported decision relied upon by Mr. Mangukia is the decision dated 6-8-1997 in Special Civil Application No. 8555 of 1996. It was a Special Civil Application against the Banaskantha Jilla Madhyastha Sahakari Bank Ltd. filed by a former Manager of the Bank who had been dismissed from the service. In this case the question of maintainability against the respondent-Bank was decided on the basis of the judgment of This Court in the case of V. I. Khali/a (supra) and it was held that the writ against the respondent-Bank was not maintainable.
17. On this aspect of the matter, Mr. Jayant Patel has also cited series of decisions. In the case of Modern Food Industries (India) Ltd., Ahmedabad v. M.D. Juvekar the Division Bench of This Court was concerned with the question as to whether a Government Company like Modern Food Industries (India) Ltd., Ahmedabad incorporated under the Companies Act was an 'agency' or 'instrumentality' of the State or not and in the backdrop of the provisions contained in the Memorandum of Articles of Association of the Company it was held that Modern Food Industries (India) Ltd., Ahmedabad was an 'authority' within the meaning of Article 12 of the Constitution of India. In 1991 Lab. IC 1583 (Narayan v. Maharashtra State Co-operative Land Development Bank Ltd.), the Nagpur Bench of Bombay High Court held that Maharashtra State Co-operative Land Development Bank Ltd. was a creature of Statute and writ petition against the same was maintainable, though it may not be technically an 'instrumentality' of the State. In the case of P. Krishna Rao v. The Andhra Pradesh Co-operative Central Agricultural Development Bank Ltd. reported in 1984 Lab. IC 131 on the basis of the various provisions of the Andhra Pradesh Co-operative Societies Act, 1964 and the bye-laws it was held that Andhra Pradesh Co-operative Central Agricultural Development Bank Ltd., was an 'instrumentality' or an 'agency' of the Government of Andhra Pradesh and was, therefore, an 'authority' within the meaning of Article 12 and a writ of mandamus was issued to the Bank. In 1986 (1) SLR 222 Phool Chand v. State of Rajasthan and Ors. the Division Bench of Rajasthan High Court has held that the Central Co-operative Bank Ltd., Bharatpur was an instrumentality of the State for the purpose of Article 12 of the Constitution of India. In A. M. Ahamed and Co. v. Union of India the Division Bench of Madras High Court held that the National Agricultural Co-operative Federation of India Ltd., (NAFED) is a Co-operative Society registered under the Delhi Co-operative Societies Act, in relation to its activity as canalising agency for export of onions to Singapore and Malaysia is an 'authority' as contemplated by Article 12. It was also held on the basis that the activity of NAFED was as a canalising agency and in the Scheme of canalisation, it is really the Government which acts through the canalising agency. In 1991 (1) SLR 209 The Gurdaspur Central Co-operative Bank Ltd. v. The Presiding Officer, Labour Court, Gurdaspur and Ors. the writ petition was held to be maintainable against the Co-operative Society by the Punjab and Haryana High Court. In AIR 1987 MP 212 Hari Om v. State of M.P. and Anr. a Division Bench of the Madhya Pradesh High Court held that Madhya Pradesh Rajya Laghu Van Upaj (Vyapar Avam Vikas) Sahakari Sangha Maryadit had been appointed as an 'agent' of the State under M. P. Tendu Patta (Vayapar Viniyaman) Niyamavali. The main benefit was to be derived by the State and not by the Sangh and it was found that in the very nature of things the State as such could not function without the help of its servants or employees and that inevitably introduces the concept of 'agency' in a narrow and limited sense. In Grih Kalyan Kendra Workers' Union v. Union of India the Supreme Court did not consider the question as to whether the Grih Kalyan Kendra was an instrumentality of the State within the meaning of Article 12 or not but the Court proceeded on the assumption that Grih Kalyan Kendra was a State for the purpose of Chapter 4 of the Constitution and the writ petition filed under Article 32 of the Constitution of India was held to be maintainable and the petitioners were held entitled to invoke the jurisdiction of the Supreme Court for the enforcement of their fundamental right founded on the principle of equal pay for equal work.
18. On the question of the scope of the powers of This Court under Article 226 also Mr. Patel has cited certain decisions as under:
In Shri Anadi Mukta Sadguru S.M. V.S.J.M.S. Trust v. V.R. Rudani popularly known as Shri Anadi Mukta's case, the Supreme Court held that the issue of writ of mandamus under Article 226 is not confined against statutory authorities and instrumentalities of the State. It can also be issued to any other person or authority performing public duty even if the duty is not imposed by the Statute. In Unni Krishnan J. P. v. State of A. P. the Apex Court after considering series of decisions has quoted Lord Denning on the scope of judicial review at page 2207 in para 82 saying that the Courts are not bound hand and foot by the previous law. They are to have regard to it. So the previous law as to who are and who are not public authorities is not absolutely binding. Nor is the previous law as to the matters in respect of which relief may be granted. This means that the Judges can develop the public law as they think best. That they have done and are doing. (It has been quoted from the Closing Chapter by Rt. Hon. Lord Denning.) Having quoted Lord Denning as above, the Supreme Court has further observed on this very page, i.e., 2207 that, "there (England) however, the prerogative writ of mandamus is confined only to public authorities to compel performance of public duty. The 'public authority' for them mean every body which is created by statute and whose powers and duties are defined by statute. So Government departments, local authorities, public authorities, and statutory undertakings, and Corporations, are all public authorities. But there is no such limitation for our High Courts to issue the writ in the nature of mandamus. Article 226 confers wide powers on the High Courts to issue writs in the nature of preogative writs." According to Supreme Court this is a striking departure from the English law, and under Article 226, writs can be issued to 'any person or authority' and further that it can be issued 'for the enforcement of any of the fundamental rights and for any other purpose'. Having reproduced Article 226 in this very para 82 at page 2207, the Supreme Court has noted the scope of this Article as has been explained by Subba Rao, J. in Dwarkanath v. I.T.O. . While elaborating on this aspect of the matter, the Supreme Court has considered that Article 226 is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature of the powers, the purpose for which and the person or authority against whom it can be exercised. It can issue writs in the nature of prerogative writs as understood in England, but the scope of those writs also is widened by the use of the expression 'nature' for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them. According to the Supreme Court, the High Court can also issue directions, orders or writs other than the prerogative writs. It enables the High Court to mould the reliefs to meet the peculiar and complicated requirements of this country and any attempt to equate the scope of the power of the High Court under Article 226 of the Constitution with that of the English Courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of Government into a vest country like India functioning under a federal structure. Such a construction defeats the purpose of the Article itself.
The Supreme Court has then considered that, the term 'authority' used in Article 226, in the context must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words 'any person or authority' used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied. In 1997 (2) SLR 117 Vazir Sultan Tobacco Co. Ltd. v. V.S. T. Industries Canteen Workers' Union the Division Bench of the Andhra Pradesh High Court after a thorough prospecting of the scope, the power of judicial review and to issue any prerogative writ, direction or order in exercise of the plenary power of the High Courts under Article 226 of the Constitution of India has summarised the judicial conscious as under:
(i) The High Court's power under Article 226 of the Constitution is as wide as the amplitude of the language used indicates and so can affect any person even a private individual and be available for any other purpose, even one for which another remedy may exist.
(ii) Strictly speaking, the inhibitions recognised by the Courts in England upon the powers of the Courts to issue prerogative writs do not operate in India except as self-imposed restrictions by the Courts themselves;
(iii) Wise and clear restraints on the use of extraordinary remedy have been indicated in various pronouncements of the Supreme Court and High Courts, and the High Courts will not go beyond those wholesome inhibitions. However, where the situation warrants or exceptional circumstances cry for timely judicial interdict or mandate, the Courts shall have the power to issue any writ, order or direction. In the words of the Supreme Court "the mentor of law is justice and a potent drug should be judiciously administered. Speaking in critical restrospect and protentous prospect, the writ power has, by and large, been the people's sentinel on the qui vive and to cut back on or liquidate that power may cast a peril to human rights.
(iv) Mandamus, certiorari and prohibition are recognised as public law remedies. They are not available to enforce private law rights;
(v) The word 'authority' in Article 226 of the Constitution of India is not restricted to the same meaning as the words 'other authorities' should receive in the definition of the 'State' in Article 12 of the Constitution of India. The former must receive a liberal meaning. The latter is relevant only for the purpose of enforcement of fundamental rights. The High Court's power under Article 226 of the Constitution, however, unlike the power of the Supreme Court under Article 32 of the Constitution is more pervasive in the sense that it can issue writs for enforcement of fundamental rights as well as non-fundamental rights. The words 'any person or authority' used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on that body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party, no matter by what means the duty is imposed.
The aforesaid summarisation by the Division Bench of the Andhra Pradesh High Court appears to be founded on the reasoning given by the Supreme Court in Unni Krishnan's case (supra). The Division Bench of the Andhra Pradesh High Court in this very judgment in the later part while referring to the dicta in Praga Tools Corporation v. C.V. Imanual has quoted the words of Professor De Smith as under:
To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract.
In K. Krishnamacharyulu v. Sri Venkateswara Hindu College of Engineering, the enforcement of the Government instructions entitling pay scale to non-Government employees at par with their counterpart in the Government Institutions were sought to be enforced against the Management of the private college. It was held that the employees are entitled for the enforcement of the parity. The Supreme Court in this case has concluded that when an element of public interest is created and the Institution is catering to that element, a teacher, being an arm of the Institution, is also entitled to avail of the remedy provided under Article 226; the jurisdiction part is very wide. The writ petition was accordingly held to be maintainable. In Misc. Mazdoor Sabha v. State reported in , the Division Bench of This Court the question of maintainability of the writ petition under Article 226 of the Constitution of India in detail. The Division Bench considered that sewing thread division of Ahmedabad Jubilee Mills had stopped working and all the divisions are closed and, therefore, the employees of Diwan Chemtex Industries Ltd., were not to be given work after working hours with effect from 3-2-1988 and on this ground the services of all its employees being 74 in number were terminated. Considering the import of the words "any other authorities" as contained in Article 226 of the Constitution of India, the Division Bench considered the moot question as to whether a private Company is covered by the phrase 'any person' as employed by sub-clause (1) of Article 226. The Division Bench has noted that the word 'person' is not defined by the Constitution, but reference has been made to Article 367 of the Constitution, which defines 'unless the context otherwise required, the General Clauses Act, 1897 shall, subject to any adaptations and modifications that may be made therein under Article 272, apply for the interpretation of this Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India., Under the General Clauses Act, 1897, the definition of the term 'person' is provided by Section 3(42) as meaning any company or association or body of individuals, whether incorporated or not. Thus, in the context of Article 226(1), the definition of the term 'person' has been applied by the Division Bench and consequently it has been safely assumed that while the framers of the Constitution employed the term 'person' in Article 226(1), the said term had the same meaning as laid down in Section 3(42) of the General Clauses Act, 1897, as provided by Article 367 of the Constitution and consequently it was held that provision of Article 226( 1) would apply to companies like respondents in that case. It is of course clear that in the ultimate analysis the writ was issued against the respondent-Company on the basis of the view taken by the Division Bench that though the Company was not an 'instrumentality' of the State nor it was a creature of any statute, it was enjoined to follow statutory obligations imposed on it by Sees. 25FFA and 25FFF before it could close down its undertaking and render entire working force in its institution to destitution and starving and thus there was a failure to follow statutory obligations imposed on it, viz., Sees. 25FFA and 25FFF.
19. On the analysis of the various authorities cited by the parties on the question as to whether the Amreli District Central Co-operative Bank Ltd., is an authority or an instrumentality or agency of the State within the meaning of Article 12 of the Constitution of India or not, in view of the decisions of This Court in the case of V. 1. Khalifa v. Satubha Tapubha Vaghela (supra) and the unreported decisions in the case of L.K.L. Construction Co. Ltd. v. Krishak Bharati Co-operative Ltd. (supra) in Special Civil Application Nos. 259 and 260 of 1994 decided on 13-6-1994, the Division Bench decision of This Court in L.P.A. No. 375 of 1985 decided on 1/2 February, 1994, Special Civil Application No. 855 of 1996 decided on 6-8-1997 based on V. 1. Khalifa's case (supra) and the Division Bench Judgment of This Court reported in 1984 GLH (UJ-71) 50 (supra), Special Civil Application No. 4255 of 1982 decided on 4-4-1984 and Special Civil Application No. 2885 of 1984 decided on 14-8-1984 referred in Paras 13-14 of the V. I. Khalifa's case (supra) and other decisions in this regard relied upon by Mr. Mangukia and several other decisions, which have been cited by Mr. Jayant Patel, it is clear that even if it is accepted as a proposition of law that a Co-operative Society or even a Company registered under the provisions of the Companies Act can be an "instrumentality" or "agency" of the State and it is not necessary that such body must be a creature of the statute, it cannot be held that the Amreli District Central Co-operative Bank Ltd., is an 'authority' within the meaning of Article 12 of the Constitution of India. True it is that in Special Civil Application No. 2885 of 1984 decided on 14-8-1984 there is no elaborate discussion with regard to the scheme of the Act, rules and bye-laws and the functions discharged by the Amreli Jilla Bank, Amreli but the fact remains that the Court has not agreed with the submission that the Banking business is essentially a State function and it had been categorically observed that the said Bank is not shown to be an instrumentality or hand of the State in discharging State functions and the petition was summarily rejected. I do find that so far the element of deep and pervasive control of the State Government is concerned, the same is wanting over the respondent-Bank and I do find that the State Government also does not hold the substantial share capital in the respondent-Bank. In this view of the matter, when the respondent-Bank itself has been held to be not covered by the expression 'other authority' or the 'agency' or the 'instrumentality' of the State by a Co-ordinate Bench of This Court and the order dated 14-8-1984 is particularly with regard to this very respondent-Bank of Amreli, the respondent-Bank cannot be taken to be an 'authority' within the meaning of Article 12 of the Constitution as an 'instrumentality' or 'agency' of the State. The management of the Society vests in its General Board under Section 73 and subject to the overall control of the Board of Directors, the management of the Society has to be carried out by a Committee constituted under the provisions of the Act as provided under Section 74. Thus, the elected Committee of the Bank had full control over the management and there is no Government interference. According to the bye-laws, the Board of Directors consist of 15 elected Directors, the Government has the power to nominate only 3 Directors on the Board. The argument of Mr. Jayant Patel that the respondent-Bank is under the direct control of Reserve Bank of India under the Banking Regulations Act cannot be sufficient to bring the respondent-Bank within the ambit of 'other authority' or the 'instrumentality' or 'agency' of the State because the control of the Reserve Bank of India is only for the purpose of banking business as required under the Banking Regulations Act. In Modern Food Industries (India) Ltd., Ahmedabad v. M. D. Juvekar (supra) the Division Bench of This Court was concerned with the case of a Government Company and in Narayan v. M. Section Co-op. Land Devep. Bank Ltd. (supra) the Bombay High Court considered the case of the Maharashtra State Co-operative Land Development Bank Ltd., which was a creature of the Statute. In M. K. Agarwal v. Gurgaon Gramin Bank reported in 1988 (1) SLR 790 the Supreme Court was directly concerned with the Gurgaon Gramin Bank and the State Rural Bank was constituted under Regional Rural Banks Act, 1976 and the Supreme Court found that it was made of State's 'flesh and bones' and was, therefore, an instrumentality of the State. Therefore, these decisions are of no avail in the present case. The decision rendered by the Division Bench of Rajasthan High Court in the case of Phool Chand, reported in 1986 (1) SLR 222 (supra), in which Bharatpur Central Co-operative Bank Ltd., Bharatpur was held to be an 'instrumentality' of the State, does support the contention of Mr. Jayant Patel in this regard, but in view of the decisions of our own High Court, the respondent-Bank cannot be held to be an 'authority' on the basis of the Division Bench decision of the Rajasthan High Court. In (supra), the National Agricultural Co-operative Federation of India Ltd., i.e., NAFED, which is a Cooperative Society registered under the Delhi Co-operative Societies Act, was held to be a "State" because of its activity as canalising agency for export of onions to Singapore and Malaysia and the Banking activity carried on by the respondent-Bank would be treated at par with the activity of the canalising agency of the Government. In 1991 (1) SLR 209 (supra), the Punjab and Haryana High Court rejected the preliminary objection over the maintainability of the writ petition against the Cooperative Society by saying that such a Co-operative Society had been held to be a "State" within the meaning of Article 12 of the Constitution by a judicial pronouncements. However, the judicial pronouncements have not been detailed out and this decision rendered by the Punjab and Haryana High Court cannot be taken to be an authority so as to lend support to the contention of Mr. Jayant Patel in view of the decisions of This Court. The Sahakari Sangh in the case of Hari Om v. State of M. P. (supra) had been appointed as the Agent under the provisions of M. P. Tendu Patta (Vyapar Viniyaman) Adhiniyam and M. P. Tendu Patta (Vyapar Viniyaman) Niyamavali and, therefore, this decision also is of no avail to the petitioners on the question of holding the respondent-Bank to be an 'authority' under Article 12. In (supra) the question about Grih Kalyan Kendra being an 'instrumentality' of the State was not considered in detail and the Supreme Court proceeded on the assumption that Grih Kalyan Kendra is an 'instrumentality' of the State as has been mentioned in para 5 itself and, therefore, on the basis of this judgment the respondent-Bank cannot be held to be an 'authority' or 'agency' or 'instrumentality' of the State.
20. Even so, Mr. Jayant Patel, learned Counsel for the petitioners, was at pain to submit that several contentions, which he has raised in this regard, have not been adjudicated in the earlier decisions of This Court. These contentions may be summarised as under:
(i) NABARD, which had been held to be an 'authority' under Article 12 gives finance to the Gujarat State Co-operative Bank Ltd., and the Gujarat State Cooperative Bank Ltd., in turn finances the respondent-Bank for the purposes of distributing the same finance to the various primary level Co-operative Societies. This, according to Mr. Patel, is a Governmental function discharged by the respondent-Bank.
(ii) The respondent-Bank is a District level Federal Bank and is also a specified Co-operative Society under Section 74C of the Act to which special importance is given by the Bank and under Section 74C the Government has the power to appoint a member of the Board or Director of the respondent-Bank and, therefore, the respondent-Bank should be taken as an 'agent' or 'instrumentality' of the State.
(iii) The Central Government had introduced Comprehensive Crop Insurance Scheme from 1985-86 and as per this Scheme a District level bank acts as the Nodal agency-Bank, i.e., the agency for implementation of the said Scheme and under the said Scheme the liability of indemnification is to be shared by the General Insurance Corporation of India, which is a Government organisation and the State Group Insurance Fund is created by the State Government itself. The copy of the Scheme is at Annexure 'J' to the rejoinder and Mr. Patel's contention is that the study of this Scheme would show that the respondent-Bank is acting as a direct agent for this Scheme of Crop Insurance introduced by the Government of India.
(iv) Under the National Bank for Agriculture and Rural Development Act, 1981 there are several provisions with regard to the nature and functions entrusted to Co-operative Society like the respondent-Bank and there is a control of NABARD over the respondent-Bank.
(v) The bye-laws of the respondent-Bank are required to be approved by the Registrar and no amendment of the bye-laws is valid until registered under the Act.
(vi) Under Section 14(1) of the Gujarat Co-operative Societies Act, the Registrar himself may call upon the Society to amend the bye-laws if he considers such amendment to be necessary and desirable in the interest of such Society and under Section 14(2) if the Society fails to make such an amendment within the time specified by the Registrar, the Registrar himself, after giving an opportunity to the Society, and after prior approval of the State Co-operative Council, may register the amendment and such amendment is deemed to be effective from the date of such registration and the bye-laws, as amended, are binding on the Society and its members.
(vii) In case of amalgamation, transfer, division or conversion of the Society, the previous sanction of the Registrar is necessary under Section 17. Section 17(e) vests power on the Registrar to direct amalgamation and re-organisation of the Society in public interest.
(viii) Under Section 20 Registrar has power to cancel the Registration.
(ix) Under Section 76 the qualifications for appointment of the Manager, Secretary, Accountant or any other officer or employee of the Society and the conditions of service of such officers and employees has to be such as may be prescribed from time to time. Such conditions of service are to be prescribed by Rules made under the Act.
(x) Under Section 76B the officers of the Society can be removed by the Registrar and the Registrar has also the power to direct the Society to elect or appoint a person or a qualified member in the vacancy.
(xi) The State Government and the Registrar has the powers to remove the Committee and appoint a Committee under Section 81.
(xii) The Administrator under Section 81(2) has powers to exercise all or any of the functions of the Committee or of any officer of the Society and to take all such action as may be required in the interest of the Society, subject to the control of the Registrar.
Mr. Patel has submitted that the aforesaid submissions have not been considered and dealt with in any of the earlier decisions on this point and all these submissions require an effective adjudication in detail. His contention is that on the basis of the aforesaid submissions, the respondent-Bank is certainly discharging functions of public importance related to Government functions, which is a relevant factor so as to classify the respondent-Bank as an 'agency' or 'instrumentality' of the State.
21. I have considered the aforesaid submissions. I find that even with the aid of the submissions, as aforesaid, it is not possible to hold that the functions, as aforesaid, discharged by the respondent-Bank are of public importance closely related to Government functions. In such matters, when a Co-operative Society is working as a Banking Society, it may have to conform to the Scheme, which may be evolved by the agencies like NABARD or the Scheme such as the Comprehensive Crop Insurance Scheme by the Central Government and the Societies like the respondent-Bank may be used for the purpose of implementation of such Scheme as a part of the Co-operative movement. However, it cannot be said that they are essentially Governmental functions nor it can be said that by seeking implementation of this Scheme through the Society like the respondent-Bank, the Government or other bodies like NABARD or the Gujarat State Co-operative Bank acquires any control over the respondent-Bank merely because a Society like the respondent-Bank is financed for the purpose of distributing the finance to the primary level Cooperative Societies. Similarly, there is nothing in the Scheme of the Gujarat State Co-operative Societies Act or the Rules made thereunder and the bye-laws of the respondent-Bank, to which reference has been made hereinabove, to indicate or show either the holding of the substantial share capital by the State Government or the deep and pervasive control by the State Government or any monopoly rights have been conferred by the State or protected by the State or that the functions are of public importance closely related to Governmental functions and, therefore, on consideration of all the aspects in entirety, it cannot be held that the respondent-Bank is an 'authority' within the meaning of Article 12 of the Constitution of India or an 'agency' or 'instrumentality' of the State. Thus, the conclusion is that in a given case, a Co-operative Society, whether created by the Statute or not or even a Limited Company for that purpose may be an 'authority' under Article 12 or an 'agency' or 'instrumentality' of the State but it will depend upon the nature of functions and duties, which it seeks to discharge under the provisions of the Act under which it was registered, Rules made thereunder and its own bye-laws and that would also depend upon the question as to how much finance is shared by the Government, what is the extent of the control over the management and functions of such Society, whether the functions discharged by the Society are of public importance closely related to Governmental functions, whether any monopoly rights have been conferred by the State or protected by the State, but on consideration of the various submissions, which have been made by the parties in the present case, the Court is of the considered opinion that the respondent-Bank does not withstand the touchstone laid down by the Supreme Court and our own High Court and it does not meet the test so as to come within the ambit of 'other authorities' or 'agency' or 'instrumentality' of the State within the meaning of Article 12 of the Constitution of India.
22. However, the matter does not end here. The question still remains as to whether in the facts and circumstances of the case, any writ, order or direction can be issued against the respondent-Bank under Article 226 of the Constitution of India. Mr. Jayant Patel appearing on behalf of the petitioners has resolutely argued that the scope of Article 226 is wider than that of Article 32 of the Constitution of India. The jurisdiction of the Supreme Court under Article 32 can be invoked only in cases where there is a breach of the fundamental right and fundamental rights can be enforced only against those bodies which are covered by Article 12 of the Constitution of India. But so far as Article 226 is concerned, the writ can be issued even for the purpose of rights, which are not fundamental, and as has been provided in Article 226 it is to any person and for any other purpose. Therefore, Article 226 is couched in a large and wider terminology and it has been so considered, construed and explained in various decisions and even after holding that a particular body is not covered by the term 'State' or 'other authority' or an 'agency' or 'instrumentality' within the scope of Article 12, the writs have been issued when the Court has found that such body has failed to discharge the duty cast upon it under any statute and such writs, orders or directions in the nature of writ have been issued by This Court itself. Mr. Patel has placed strong reliance on the five decisions; three of which have been rendered by the Supreme Court, one by Andhra Pradesh High Court and one by our own High Court. Reference has already been made to the aforesaid decisions in the earlier part of this order. I have considered the aforesaid submissions made by Mr. Patel on the question of the scope of Article 226 and find that this submission made by Mr. Patel is not without force. In Shri Anadi Mukla 's case (supra), the case went to the Supreme Court from our own High Court. It has been clearly ruled by the Supreme Court that the issue of the writ of mandamus under Article 226 is not confined to statutory authorities and instrumentalities of the State only and further that it can be issued to any other person or authority performing public duty and that such duty need not be imposed by the State Government. Para 19 of Shri Anadi Mukla's case (supra) is reproduced as under:
The term "authority" used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words "any person or authority" used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied.
Hence, as a principle the issue of any order or direction in the nature of mandamus cannot be denied on the ground that the body against which the writ is sought to be issued is not an 'authority' or 'agency' or 'instrumentality' of the State under Article 12 nor it can be denied on the ground that the duty to be enforced is not imposed by the statute. The following quotation on the development of this law by Professor De Smith has been referred by the Supreme Court in Para 21 of the judgment as under:
To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract.
(Judicial Review of Administrative Action 4th Edn. p. 540).
The Supreme Court has shared this view and has opined that the judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into watertight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available 'to reach injustice wherever it is found' and technicalities should not come in the way of granting that relief under Article 226 and the objection about the maintainability of the writ petition was rejected by the Supreme Court in this case. In (supra) the dictum laid down in Shri Anadi Mukta 's case (supra) has been followed; scope of Article 226 has been further explained vis-a-vis the issue of prerogative writ in England and while referring to the Supreme Court decision rendered in Dwarkanath v. l.T.O. i.e. it has been held that Article 226 is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found and that Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights and the words 'any person or authority' used in Article 226 are not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. What is relevant is the nature of the duty imposed on the body and the duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied. In K. Khshnamacharyulu 's case (supra) the significant observation made by the Supreme Court in Para 4 is that, "When an element of public interest is created and the institution is catering to that element, the teacher, being the arm of the institution, is also entitled to avail of the remedy provided under Article 226." When the State launches a co-operative movement and the Government and its agencies introduced several Schemes for the benefit of public at large and such Schemes are sought to be implemented through the co-operative society like the respondent-Bank, it can safely be said that the element of public interest is created and such bodies do cater to that element of public interest and the employees of such Society are certainly the arms of such Co-operative Societies, through which the co-operative movement is taken care of and in such cases it cannot be said that there is no creation of the element of public interest. Reference has also been made to Vazir Sultan Tobacco Company Ltd. 's case (supra), a Division Bench decision rendered by the Andhra Pradesh High Court, in which the reasoning given in the aforesaid Supreme Court decisions has been summarised as has already been quoted in the earlier part of this order. And the last but not the least case cited by Mr. Patel in this regard is a Division Bench decision of our own High Court reported in (supra), which has also been discussed in the earlier part of this order and in view of the authoritative pronouncements by the Division Bench of This Court in this Misc. Mazdoor Sabha 's case (supra), This Court has no hesitation in holding that in a given case a writ order or can be issued against a co-operative society like the respondent-Bank even if it is not an 'authority' or an 'agency' or 'instrumentality' of the State under Article 12 of the Constitution of India, in the writ jurisdiction of This Court in the nature of public law remedy. The only rider is that it cannot be invoked for enforcement of any private right against such body. The only question, therefore, now remains is as to whether there was any statutory obligation on the respondent-Bank as an employer in the nature of public duty or obligation and not private duty and obligation and this aspect of the matter has to be dealt with now so as to adjudicate as to whether the petitioners are entitled to the issue of such an order of direction in the nature of writ in their favour vis-a-vis the respondent-Bank and which is that statutory obligation on the respondent-Bank as an employer in the nature of public duty or obligation, which it has failed to discharge. This aspect is to be dealt with in later part of this order while considering the merits.
23. On behalf of the respondent-Bank it was also urged that the petitioners are guilty of suppression of facts and that the petitioners have alternative remedy. In support of these objections Mr. Mangukia has cited . Ananthan Pillai v. State of Kerala and Ghelabhai Popatbhai Tarpara v. Agricultural Produce Market Committee, Kalavad on the question of suppression of facts and 1979 GLR 701 Gujarat State Co-operative Land Development Bank v. P.R. Mankad and Shamkishore v. Municipal Corporation of Delhi on the question of alternative remedy. It may be straightaway observed that these objections may not detain the Court from adjudicating the case on merits for the simple reason that no factual foundation has been laid in support of these objections and I find on the basis of the pleadings of the parties that there is no such suppression of fact which can be said to be deliberate or a case of misstatement of fact, which was false or incorrect to the knowledge of the petitioners. There is no doubt that in case there is a deliberate suppression of fact, the party is not entitled to be heard on merits but in the facts of the present case, I do not find that the petitioners have made any such misstatement of fact which can be said to have been false to their own knowledge at the time of filing the petitions and nothing wrong is found against their conduct as petitioners before This Court and, therefore, these petitions cannot be thrown on the objection of suppression of facts. Even the objection with regard to alternative remedy cannot be sustained because in such like matters when the order is passed against the petitioners, they would be deprived of invoking the jurisdiction of This Court under Article 226 when there is no other alternative adequate equally efficacious remedy. In absence of any such equally efficacious remedy, the Court does not find it a fit case to throw away these petitions on the question of alternative remedy and this objection is not found to be tenable. Thus, all the preliminary objections raised on behalf of the respondent-Bank fail.
24. Coming to the merit of the case, in five out of six petitions, i.e., Special Civil Application Nos. 5552, 5573, 5617, 5627 and 5628 of 1997, the grievance has been raised against the termination of the petitioners and in the 6th petition, i.e., Special Civil Application No. 6135 of 1997 the prayer has been made by the ExGeneral Manager of the respondent-Bank so as to allow him to operate his Savings Bank Account No. 258. I would, therefore, first deal with the 5 Special Civil Applications, numbered as above, with regard to the termination of the employees. The facts relating to each of these 5 Special Civil Applications have been briefly stated in earlier part of the order in Para 3. On the basis of the pleadings of the parties and the grounds which have been urged by both the sides, the following questions arise for consideration and adjudication by This Court:
(i) Whether the respondent-Bank has failed to discharge its obligations under the Bombay Industrial Relations Act and the Standing Orders made thereunder while terminating the services of the petitioners concerned in these 5 Special Civil Applications?
(ii) Whether the termination of the petitioners is not bona fide and has been ordered for extraneous reasons?
(iii) Whether the petitioners in these 5 Special Civil Applications were not entitled to be given an opportunity of hearing or an action inspired notice before their termination and as to whether the principles of natural justice have been violated by the respondent-Bank?
25. 23 petitioners in all are concerned in Special Civil Application No. 5552 of 1997. Initial appointment was given to them vide orders issued on 16-1-1997 on probation as clerks. Their appointment was based on selection held in pursuance of a notice inviting application published through advertisement dated 14-3-1996 and the interviews were held on 28th, 29th and 30th December, 1996. While they were so continuing on probation the Executive Committee met on 10-5-1997 and on 10-5-1997 itself orders were issued on permanent basis giving them the regular pay scale of clerk. The election of the new Board of Directors took place in June/ July, 1997 and the new Chairman took over on 25/26, July, 1997 and immediately, thereafter, on 28-7-1997 a decision was taken to terminate their services and on the very same date, i.e., on 28-7-1997 their termination orders were issued. Similarly, 9 petitioners were concerned with Special Civil Application No. 5573 of 1997, who were joined as Secretaries on the basis of selection held in pursuance of the notice inviting applications through advertisement dated 5-2-1996 for which interviews were held on 2-3-1996 on the basis of the selection, appointments were given to them vide orders dated 12-3-1996. The Executive Committee of the respondent-Bank met on 10-5-1997 and they were absorbed in the regular scale vide orders issued on the same date, i.e., 10-5-1997. While they were so continuing as Mantris, their services were terminated on 28-7-1997 in the same manner as the services of the 23 petitioners, concerned in Special Civil Application No. 5552 of 1997. Four petitioners, who are concerned in Special Civil Application No. 5617 of 1997, were appointed as Clerks on the basis of the selection held in pursuance of the notice inviting application through advertisement dated 14-3-1996 for which interviews were held on 28th, 29th, 30th, December, 1996 and on the basis of their selection, they were also appointed on probation vide orders dated 16-1-1997. Thereafter, the Executive Committee met on 10-5-1997 and orders were issued on 10-5-1997 itself giving them regular appointment on permanent basis and confirming them in the regular scale of clerk. Their services were also terminated on 28-7-1997 in the like manner, as aforesaid. The 4 petitioners, who are concerned in Special Civil Application No. 5627 of 1997, were also appointed as Clerks on the basis of the selection held in pursuance of the notice inviting applications dated 14-3-1996 in the same manner as aforesaid. The names of these 4 persons were first included in the waiting list and petitioner Nos. 1 to 3 were initially appointed on probation on 15-5-1997 and the 4th petitioner was appointed on probation on 19-7-1997 only. Later on, the petitioner Nos. 1 to 3 were made permanent on 19-7-1997 on the basis of the decision taken at the meeting of the Executive Committee of the respondent-Bank while the petitioner No. 4 continued to be on probation. The services of all these 4 petitioners were also terminated in the same manner, as aforesaid, on 28-7-1997. Five petitioners, who are concerned in Special Civil Application No. 5628 of 1997, claim to have been appointed as Peons. According to them they were appointed as daily wagers and a copy of one such order dated 9-11-1996 has been placed on record stating that similar type of orders were issued with regard to other petitioners. The case of these 5 petitioners is that they were continuing as daily wagers since November 1996. The permanent vacancies became available on 19-7-1997 and Resolution was passed appointing them on permanent basis on 19-7-1997 and orders were issued accordingly on the same date, i.e., 19-7-1997 and, thereafter, their services were also terminated in the same manner, as aforesaid, on 28-7-1997. The orders with regard to their appointment on probation and making them regular have been placed on record. The issue of the orders to this effect has not been disputed. The fact that their services were terminated on 28-7-1997 with immediate effect has also not been disputed. However, the respondent-Bank had sought to traverse the claim of the petitioners and the petitions have been opposed by pointing out that the predecessor Board of Directors had invited applications even without the availability of sufficient number of posts, the selections were not proper. In some cases, it has been pointed out that even the relatives of some candidates were there in the Selection Committee, the objections have also been raised about the requirements of eligibility with regard to age, qualification and experience in certain cases and the background in which the selections were held contrary to the requirements of the respondent-Bank and to accommodate the petitioners in the services of the Bank. Much argument was raised on behalf of the respondent-Bank with reference to the objections, as aforesaid, and the alleged irregularities committed by the predecessor Board of Directors and the Executive Committee while inviting applications contrary to the requirements of the Bank, while holding selections, while issuing initial appointment orders and thereafter making them regular etc., and it has also been stated with regard to the 5 petitioners concerned in Special Civil Application No. 5628 of 1997 that while they were working as daily wagers since November 1996 they were made permanent by the predecessor Board of Directors on 19-7-1997 only. In any case, the factum of the appointment of these 45 employees as Clerks, Mantris and Peons on 16-1-1997,12-3-1996,16-1-1997 and 15-5-1997 and making 5 daily wager peons, who were working as such since November 1996, as permanent on 19-7-1997 and their termination on 28-7-1997 is not disputed.
26. Whatever may have been the objections with regard to the selections and appointments given to these petitioners, the fact is that these 45 petitioners had been given appointments in the respondent-Bank and they were continuing in the service of the respondent-Bank from the dates, as aforesaid, irrespective of the fact whether they are treated as ad hoc or temporary or probationers or permanent. Mr. Patel has invited the attention of This Court to the provisions of the Bombay Industrial Relations Act and it has been contended that under Rule 33 of the Gujarat Co-operative Societies Rules the Managing Committee of the Society has the power to appoint, to give salary to staff for the conduct of the business of the Society and to define their duties. Mr. Patel has invited the attention of the Court to the averments made in Para 2.2 of the Special Civil Application No. 5552 of 1997 and it has been submitted that the Standing Orders for governing the service conditions of the employees of the respondent-Bank have been registered under the Bombay Industrial Relations Act on 13-3-1980 and Clause 22 providing for their termination of the employment reads as under:
22. Termination of Employment:
(1) The employment of a permanent employee or probationer may be terminated by one month's notice or on payment of one month's wages (including all allowances) in lieu of notice.
(2) The reason for termination of service under clause (1) of this Standing Order shall be recorded in writing and shall be communicated to him, if he so desires, at the time of discharge unless such communication, in the opinion of the Manager is likely directly or indirectly to lay any person open to civil or criminal proceedings at the instance of the employee.
(3) A permanent employee desirous of leaving the service of the Bank shall give one month's notice in writing to the Manager. He shall then if he leaves the service, be given an order of relief signed by the Manager.
(4) If any permanent employee leaves the service of the Bank without giving notice, he shall be liable to pay the Bank one month's wages (including all allowances) in lieu of notice.
(5) The service of any other employee may be terminated or he may leave service, on one week's notice.
(6) An order relating to discharge or termination of service shall be in writing and shall be signed by the Manager. A copy of such order shall be supplied to the employee concerned. In cases of general retrenchment, closing down, strike or lock-out no such order may be given.
(7) Every employee will retire from service on attaining an age of 58 (fiftyeight years). Extension not exceeding 5 years in all may be given at the discretion of the Board of Directors. Every employee, if he desires will voluntarily retire from service of the Bank after completion of 30 years of his service.
(8) An employee before retirement shall be granted the privilege leave due to him on his applying for it or salary and allowances in lieu thereof.
The averments made in Para 2.2 of the Special Civil Application have been replied in Para 28 of the affidavit-in-reply dated 4-8-1997 filed by the respondent-Bank, which reads as under:
28. With reference to averments made in Para 2.2 of the petition, I offer no comments. I crave leave to refer to and reply upon the provisions of the Order at the time of hearing of this petition.
It is, therefore, clear that the factum of the registration of the bye-laws and the bye-law 22 with regard to termination of employment, as has been quoted by the petitioners, has not been disputed. According to Standing Order No. 22(1) appointment of the permanent employee or probationer can be terminated by one month's notice or on payment of one month's wages in lieu of notice. The reason for termination under clause (1) is required to be recorded in writing as provided in Standing Order No. 22(2). According to Standing Order No. 22(5), the service of any employee, other than permanent or probationer, may be terminated on week's notice. It is, therefore, clear that the respondent-Bank as an employer was under an obligation under the aforesaid Standing Orders, registered under the Bombay Industrial Relations Act, which is at par with statutory obligation and yet the services of each of these 45 petitioners were terminated without following the aforesaid Standing Order No. 22 and the violation of Standing Order No. 22 is ex facie clear. Even if the respondent-Bank seeks to dispute before This Court the status of the petitioners as permanent employee or as probationers or as a regularly appointed employee and even if some of them are not treated to be permanent and are employees of status other than permanent or probationer and even if it is assumed in favour of the respondent-Bank that the status of permanent employees was wrongly conferred upon the petitioners, the fact remains that at the time of termination of their services, Standing Order No. 22 had to be complied and the respondent-Bank could not have terminated their services in the manner it terminated on 28-7-1997. It is, therefore, held that the respondent-Bank had failed to discharge its obligations under the Standing Orders registered under the Bombay Industrial Relations Act and, therefore, the termination orders cannot be sustained in the eye of law.
27. So far as the question as to whether the services of these petitioners were terminated for extraneous reasons and that it is a case of lack of bona fides is concerned, the facts and circumstances preceding and attendant to the termination orders dated 28-7-1997 cannot be lost site of. It is not in dispute that these petitioners were continuing in service since January 1996, March 1996, January 1997, May and July 1997 and November 1996/July 1997. It is also not in dispute that the election of the new Board of Directors took place in June/July 1997 and the Chairman of the new Board of Directors took over on 25/26 July, 1997 and immediately thereafter, i.e., within a period of 3 days on 28-7-1997 the decision was taken to terminate them and the termination orders were issued accordingly on the same date. i.e., 28-7-1997. Even with regard to the objections, which have been raised on behalf of the respondent-Bank against the manner in which the vacancies were advertised and the selections were held and the appointments were given to these petitioners by the predecessor Board of Directors, one fails to understand as to how the new Board of Directors immediately upon entering the office took up the matter as if it was the first item on their agenda to terminate their services and the same was put into action and sought to be accomplished on the same date, i.e., on 28-7-1997. In such like matters, when the country is facing the grave problem of unemployment, employment is a very valuable right related to livelihood. If at all the new Board of Directors had found in a period short of 3 days of its taking over, that the selections and appointments given to the petitioners were improper or that there was any irregularity committed by the earlier Board of Directors in appointment of these petitioners or that their selection was not in accordance with law or that appointments had not been given to them in accordance with the bye-laws, and the services of these petitioners were required to be terminated for any reason including the grounds of lack of eligibility on the part of these petitioners for the posts held by them, the new Board of Directors could not terminate their services without following the relevant Standing Orders which were applicable. In such matters the malice or lack of bona fides operates in a subtle manner. It may be placing a heavy burden on the petitioners to prove by any positive evidence that the action of the new Board of Directors was mala fide and, therefore, the legitimate inference has to be drawn from the circumstances attendant and preceding to the passing of the termination orders or the hot haste in which the termination orders were issued without any scrutiny. It is clearly spelled out from the chronology of events and the manner in which the termination orders have been passed that these orders lack bona fide and have been passed for extraneous reasons, for reasons which cannot be said to be germane and without following the conditions which were required to be followed. In such set of circumstances, This Court is of the considered opinion that even if it is not a case of malice in fact, the case of malice in law is made out. When an order is passed for a purpose, which is not permissible under law or for a purpose which is not authorised under the law and the desired motivated result is brought about by ignoring or violating the law, it would constitute a case of malice in law and in the facts of the present case there is ample material to show that these orders were passed in hot haste and sought to be put to the logical end on the very day so as to render 45 employees jobless by one stroke of pen in violation of the Standing Orders. The same certainly smacks of lack of bona fides and in any case these orders cannot be said to have been passed for a purpose and object authorised by law even if it is assumed in favour of the respondent-Bank that the selections and appointments given at the time of predecessor Board of Directors suffered from any infirmities or irregularities as pointed out by the respondent-Bank.
28. So far as the question as to whether the petitioners were entitled to any opportunity of hearing or an action inspired notice or that the principles of natural justice are required to be followed or not are concerned, it may be observed that once an employee holds an appointment in his favour, may be of any status, if his services are sought to be terminated on the ground that his selection or appointment suffers from any infirmity or that it was irregular or that an employee did not possess a particular requirement in respect of eligibility pertaining to age, qualification or experience, that by itself would not divest him of the right of opportunity. Merely by alleging that any fraud has been committed or perpetrated, it cannot be assumed that in fact a fraud had been committed. Those cases in which any fraud is committed or a false document is given or by making a false assertion or withholding of a disclosure, which could have disentitled him from seeking employment, would stand on a different footing and therefore, it is not necessary for This Court to consider the cases, which have been cited on behalf of the respondent-Bank in which the decisions have been taken on the premises that a fraud had in fact been perpetrated. The essence of the matter is that the petitioners in the present cases had appointments based on selection and were continuing in the employment since 1996/1997, as have been given in the earlier part of the order and therefore, if their services were sought to be terminated on any of the grounds, which are now disclosed before This Court by the respondent-Bank, such termination orders could not have been issued without affording an opportunity of hearing to these petitioners. In any case, the respondent-Bank was certainly under an obligation to give atleast an action inspired notice to these petitioners that for such and such reasons their services were intended to be terminated, that they were lacking eligibility with regard to age, qualification or experience, that their selection was not in accordance with the bye-laws or that there was no requirement and yet the predecessor Board of Directors had appointed them to accommodate them in service as a favour to them or that their selections suffer from the infirmity because of the participation of any relation as a member of the Selection Committee or that their appointments had become an undue financial liability on the respondent-Bank, which the respondent-Bank could only ill-afford and therefore, their services were required to be terminated. No such action inspired notice was given to them. It is settled law that as and when any action is sought to be taken to the prejudice of the person such action cannot be taken against him without hearing him, without giving him an action inspired notice and without following the minimum requirement of the principles of natural justice. Even if attributes of infirmity and irregularity in the selection and appointment are traced out by an authority which comes as a successor, it cannot be pleaded that because the selection and appointment suffers from infirmity or irregularity or was beyond the actual requirement of employer, the concerned employee is deprived of the right of hearing or an action inspired notice and that the employer stands relieved of its burden and obligation to follow the principles of natural justice. The principles of natural justice are primordial in character and in such matters when an action is taken to the prejudice of a person and with adverse consequences, the matter of essence is that the duty is cast upon such authority to hear the affected employee before passing the order entailing adverse consequences. It does not depend upon satisfaction of the authority that the other party has no defence to make or that the authority by itself is satisfied that no useful purpose would be served by giving the notice or that the other party has nothing to say about any of the grounds on which the action is sought to be taken to his prejudice. It has more to do with the duty with which the authority deciding to take action is charged, such requirement of giving opportunity, giving action inspired notice or following the principles of natural justice, may be burdensome to some minds but that price, a small price indeed has to be paid, if at all, we mean the rule of law to prevail. The Court has, therefore, no hesitation in holding that the petitioners were entitled to an opportunity of hearing, at least an action inspired notice, and the minimum requirements of principles of natural justice. Admittedly, none of these requirements have been complied with by the respondent-Bank at the time of passing the termination orders with regard to these 45 petitioners, upon whom the termination was inflicted at a stretch on the same day, i.e., on 28-7-1997 so as to make this order a fait accompli against them and, hence their termination as such cannot be sustained in the eye of law.
29. It may also be mentioned that during the course of hearing a suggestion was made to the learned Counsel for the respondent-Bank that if the Bank so chooses it was open for them to withdraw the present impugned orders and to pass orders afresh after affording a reasonable opportunity of hearing to the concerned petitioners on the ground on which their services were sought to be terminated. But Mr. Mangukia after taking instructions from the Chairman of the respondent-Bank, stated that the respondent-Bank was not prepared to follow such course of action and, therefore, the matters were heard further in detail.
30. The upshot on consideration of the position of law, as has been discussed hereinabove, on the basis of the various decisions rendered by the Supreme Court, the other High Courts as well as the decisions of This Court, is that the action of the respondent-Bank in terminating the services of the 45 petitioners in all, concerned in the 5 Special Civil Applications, as numbered above, cannot be sustained in the eye of law and whereas the Court has come to the conclusion that a writ, order or direction can be issued under Article 226 of the Constitution of India for any other purpose and to carry out the duty judged in the light of the positive obligations owed by the respondent-Bank and whereas the respondent-Bank has failed to discharge the positive obligation cast upon it under the Standing Orders framed and certified under the Bombay Industrial Relations Act, This Court finds it to be a fit case for issue of the writ, order or direction against the respondent-Bank in the facts and circumstances of this case. Although in the facts of this case, the respondent-Bank is found to have failed to carry out the duty and the positive obligations cast upon it under the Standing Orders and under the Bombay Industrial Relations Act and such public duty under the provisions of the Standing Orders and the Bombay Industrial Relations Act, I also find that such writ also could be issued on failure of discharge of the public duty under charter, common law, custom or even contract as per the quotation of Professor De Smith, to which reference has been made hereinabove and this view of Prof. De Smith, had been shared by the Supreme Court, as mentioned in Para 21 of Shri Anadi Mukta's case (supra). By no stretch of imagination the Standing Orders framed under the Bombay Industrial Relations Act can be treated at a pedestal lower than a charter or common law or custom or even contract. It may be further mentioned that under the common law and custom also the respondent-Bank was under an obligation to follow the principles of natural justice before passing the orders and appraise the concerned petitioners as to on what ground their services were sought to be terminated. In Praga Tools Corporation v. C.V. Imanual, Supreme Court has observed that the writ could be issued against a person or body to carry out the duties placed on them by the Statutes even though they are not public officials or statutory body and according to the observations of Subba Rao, J. in Dwarkanath v. Income Tax Officer, reported in , Article 226 confers a wide power on the High Courts to reach injustice wherever it is found and, therefore, This Court considers it to be a fit case for issue of the writ against the respo and accordingly all these Special Civil Applications are allowed and the termination orders passed qua each of the petitioners in these 5 Special Civil Applications on 28-7-1997 are hereby quashed and set aside and it is ordered that all the petitioners shall be entitled to all consequential benefits. Rule is made absolute in all these 5 Special Civil Applications, i.e., Special Civil Application Nos. 5552, 5573, 5617, 5627 and 5628 of 1997. No order as to costs.
Special Civil Application No. 6135 of 1997:
31. So far as the petitioner in this Special Civil Application is concerned, it may be pointed out that this petitioner had initially joined as a Clerk on 1-9-1957 and according to him in due course of time he reached the position of General Manager on 30-5-1994 and the Registrar of Co-operative Societies had granted approval for his appointment as such on 19-9-1994. It is the further case of the petitioner that three years extension was granted to him by the respondent-Bank on 6-9-1995, but he tendered his resignation on 19-6-1997 and the same was accepted on 5-7-1997. The L.I.C. was informed about the amount of gratuity due to this petitioner and the same was given to the Gratuity Trust by L.I.C. on 26-7-1997 and it had been credited to the petitioner's Savings Account No. 258 with the respondent-Bank. Thus, the petitioner was free to operate his Savings Account No. 258 and withdraw the amount, but the new Board of Directors in its first meeting held on 28-7-1997 decided to freeze the petitioner's account. He came to know about the freezing of his account on 8-8-1997 through Bank's letter dated 4-8-1997 and, therefore, he has sought the setting aside of the decision/resolution No. 4(14) dated 28-7-1997 and the letter dated 4-8-1997 and a direction against the respondent-Bank to allow him to operate Savings Account No. 258. In the affidavit-in-reply dated 26-8-1997, which has been filed on behalf of the respondent-Bank, it is found that the respondent-Bank has no objection in allowing the petitioners to withdraw the amount from his Staff Savings Account if he hands over complete charge to his successor in office and hands over all the files and documents and executes a security bond and yet in affidavit-in-reply dated 28-8-1997 it has been stated in para 5 by the respondent-Bank that no accounts of the petitioner is attached. In fact, the petitioner has been advised to give appropriate security and the hesitation of the petitioner is obvious inasmuch as the petitioner knows very well that all the misconduct was committed during the tenure as Manager and that the petitioner also appears to be sure that his liability is likely to occur and, therefore, the petitioner does not want to give the surety. It has been further stated that the petitioner was very close to the Chairman and, therefore, his resignation had been got accepted by the Executive Committee though no such business was on the agenda. It is further stated that the petitioner was favoured by making payment of terminal benefits without verifying whether the petitioner would be liable to any liabilities or not and the order of payment of gratuity is illegal, the Board had decided without going into the validity of the Payment of the Gratuity Act. If the petitioner gives appropriate security, he may be permitted to withdraw the said amount.
32. It is thus obvious that the real dispute is about the security which had not been furnished by the petitioner in terms of the document dated 15-5-1996, which had been annexed as Annexure R/l with the affidavit-in-reply dated 28-8-1997 and the respondent-Bank is of the opinion that the petitioner was guilty of some misconduct. On behalf of the petitioner, it has been stated that he had given the security of the amount for which he was required to give security at the time of his appointment and even now he was prepared to give the security for a sum of Rs. 20,000/- as has been mentioned in the document Annexure R/l dated 15-5-1996. Thus, the petitioner is ready and willing to give the security for a sum of Rs. 20,000/- as mentioned in Annexure R/l and so far as other allegations regarding misconduct or that Board of Directors in predecessor had favoured the petitioner are concerned, the petitioner may be subjected to any inquiry in accordance with law, but merely because the new Board of Directors felt that he had been favoured or that he had not handed over the files and the resignation had not been accepted, it could not be said that the respondent-Bank was justified in not allowing the petitioner to operate his account; although the impugned Resolution No. 4(14) reproduced at page 29 of the Special Civil Application goes to show that even the new Board of Directors has maintained the acceptance of the petitioner's resignation. It is, therefore, obvious that the respondent-Bank could at the most call upon the petitioner to execute the bond in terms of the document Annexure R/l dated 15-5-1996 and could call upon him to face the inquiry, if any, in accordance with law. No such inquiry has been formally commenced even uptil now and it may be open for the petitioner to take all factual as well as legal submissions if at all such an inquiry is decided to be held, but the fact remains that the respondent-Bank was not justified in not allowing the petitioner to operate his Staff Savings Account No. 258 and to issue the letter dated 4-8-1997 in terms of the impugned Resolution insofar as it concerns the present petitioner. Once the employer itself has credited the amount of gratuity to the petitioner's account, merely because the Account is with the respondent-Bank itself, the respondent-Bank could not then take a somersault and say that it will not allow the petitioner to operate the Account. No employer can legitimately withhold the retrial benefits of a person, who was in its service and once the petitioner had ceased to be the employee after acceptance of the resignation and his retrial dues had been credited to his account, the respondent-Bank, as a Banker owed a duty to the petitioner as an account holder customer to allow him to withdraw his amounts as per his requirements. If at all any inquiry could be held in accordance with law, the respondent-Bank could have initiated such an inquiry, but it could not stop the petitioner from operating his own account.
32.1 In the facts and circumstances of this case, it is ordered that while it will J be open for the respondent-Bank to hold any inquiry against the petitioner, if permissible under law and in accordance with law, if the respondent-Bank so chooses, the petitioner shall be allowed to operate his Staff Savings Account No. 258 provided he furnishes security bond for a sum of Rs. 20,000/- as required under the document dated 15-5-1996, i.e., Annexure R/l enclosed with the affidavit-in-reply dated 28-8-1997 within a period of two weeks from today or from the date the certified copy of this order is made available. Special Civil Application No. 6135 of 1997 is accordingly allowed and the Rule is made absolute in the terms as aforesaid. No order as to costs.