Chattisgarh High Court
Zila Sahkari Kendriya Bank Maryadit ... vs State Of Chhattisgarh 53 Wps/717/2018 ... on 19 January, 2018
Author: Sanjay K. Agrawal
Bench: Sanjay K. Agrawal
1
AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
Writ Petition (S) No.3875 of 2017
(Arising out of order dated 11-8-2017 of the learned Managing Director,
Chhattisgarh State Co-operative Bank Limited, Head Office, Raipur)
Order reserved on: 11-1-2018
Order delivered on: 19-1-2018
Zila Sahkari Kendriya Bank Maryadit, Durg through its Chairman
Preetpal Belchandan, S/o Late Bhudhar Lal, Aged about 56 years,
Office at G.E. Road, Durg, Tahsil + Distt. Durg (C.G.)
---- Petitioner
Versus
1. State of Chhattisgarh, Through Secretary, Department of Co-
operative Societies, Ministry at Mahanadi Bhawan, New Raipur,
Distt. Raipur (C.G.)
2. Registrar, Co-operative Societies of Chhattisgarh, Block-B, 2 nd and
3rd Floor, Departmental Office, Indrawati Bhawan, New Raipur,
Distt. Raipur (C.G.)
3. Joint Registrar, Co-operative Societies, Durg Division, Maharaja
Chowk, Borsi Road, Durg, Distt. Durg (C.G.)
4. Managing Director, Chhattisgarh State Co-operative Bank
Maryadit, Headquarter Raipur, Distt. Raipur (C.G.)
5. Collector, Durg, Distt. Durg (C.G.)
6. Shri S.K. Joshi, Special Class Managing Director, Chhattisgarh
State Co-operative Bank Maryadit, Headquarter at Raipur, Distt.
Raipur (C.G.)
7. N.K. Swarnkar, In-Charge Chief Executive Officer, Zila Sahkari
Kendriya Bank Maryadit, Durg. G.E. Road, Durg, Distt. Durg (C.G.)
---- Respondents
For Petitioner: Mr. Rakesh Kumar Jha and Mr. Jai Prakash
Shukla, Advocates.
For Respondents No.1, 2, 3 and 5 / State: -
Mr. Ratan Pusty, Government Advocate.
For Respondent No.4: Mr. Prafull N. Bharat and Mr. Jitendra Shrivastava,
Advocates.
For Respondent No.6: Mr. Goutam Khetrapal, Advocate.
For Respondent No.7: Mr. Manish Upadhyay, Advocate.
For Intervener: Mr. V.G. Tamaskar, Advocate.
2
Hon'ble Shri Justice Sanjay K. Agrawal
C.A.V. Order
1. The petitioner herein is Zila Sahkari Kendriya Bank Maryadit, Durg,
a Co-operative Bank within the meaning of Section 2(d-i) of the
Chhattisgarh Co-operative Societies Act, 1960 (for short, 'the Act of
1960'). Chief Executive Officer (CEO) of the petitioner Bank Mr.
Vinod Kumar Gupta, already appointed and working as CEO, was
arrested on 9-8-2017 for charges under the provisions of the
Prevention of Corruption Act, 1988 and he was placed under
suspension leading to appointment of Mr. N.K. Swarnkar,
Additional Manager - respondent No.7 herein, as In-charge CEO of
the said Bank by the Chairman of the Bank by order dated 10-8-
2017. Respondent No.4 Chhattisgarh State Co-operative Bank
Limited feeling that the appointment has been made by the
Chairman of the Bank and not by the Board of Directors of the
Bank, passed an order on 11-8-2017 appointing Mr. S.K. Joshi,
Cadre Officer - respondent No.6 herein, to be the CEO of Zila
Sahkari Kendriya Bank Maryadit, Durg. Feeling aggrieved and
dissatisfied with the appointment of respondent No.6 as CEO of
Zila Sahkari Kendriya Bank Maryadit, Durg, the petitioner herein
through its Chairman has filed this writ petition questioning the
order passed by respondent No.4 appointing respondent No.6 as
CEO of the said Bank. Initially, at the time of admission of this
petition, a stand was taken by the petitioner Bank before this Court
that by virtue of clause (19) of Section 57-B of the Act of 1960,
respondent No.4 Bank has no authority to exercise the power of
3
appointment of CEO which led to passing of interim order dated 10-
10-2017 by this Court. Later-on, the stand taken is that respondent
No.6 is not eligible to be appointed on the post of CEO and order
passed by respondent No.4 is without jurisdiction and without
authority of law, therefore, it is liable to quashed.
2. Return has been filed principally by respondent No.4 stating inter
alia that respondent No.4 Bank is empowered to pass order
appointing CEO, as the Board of Directors of Zila Sahkari Kendriya
Bank Maryadit has failed to appoint CEO within reasonable time
and order appointing In-charge CEO has only been passed by the
Chairman of the Bank and as such, the Chairman was not
empowered to appoint CEO; order appointing CEO could have
been passed by the Board of Directors of the Bank. A document
has also been brought on record holding that the Board of Directors
/ Bank has sought instructions from the Registrar, Co-operative
Societies and in turn, the Registrar, Co-operative Societies has
ratified the action of respondent No.4 Bank (if any), as such, the
order passed by respondent No.4 is strictly in accordance with law.
3. Return has also been filed by the State/respondents No.1, 2, 3 and
5, supporting the action of respondent No.4.
4. Respondent No.6 has also filed a separate return supporting the
action of respondent No.4 Bank.
5. Return has been filed on behalf of respondent No.7 supporting the
action of the Chairman of the petitioner Bank that it is in
accordance with law.
6. Mr. Rakesh Kumar Jha, learned counsel for the petitioner, would
4
submit that respondent No.4 Bank is not empowered to appoint
CEO of the petitioner Bank, as respondent No.4 has no jurisdiction
and authority and even otherwise, the Chairman of the petitioner
Bank has already appointed respondent No.7 as In-charge CEO on
10-8-2017 and respondent No.6 is not eligible to be appointed as
CEO as per the norms and eligibility criteria prescribed by Reserve
Bank of India. He would further submit that earlier, respondent
No.6 was appointed, but his services were not found satisfactory,
therefore the petitioner Bank has filed this petition through its
Chairman questioning the appointment of respondent No.6 as CEO
of the petitioner Bank.
7. Mr. Prafull N. Bharat, learned counsel appearing for respondent
No.4, would submit that respondent No.4 is fully empowered to
appoint CEO of the petitioner Bank by virtue of the provisions
contained in Section 54(3) and Section 54(3)(b) of the Act of 1960
read with notification dated 12-1-1971. He would further submit
that the Board of Directors of the petitioner Bank sought
instructions from the Registrar, Co-operative Societies on 17-8-
2017 regarding the appointment made by respondent No.4 Bank
appointing Mr. S.K. Joshi - respondent No.6 as CEO which has
been replied on 21-8-2017 by the Registrar, Co-operative Societies
clearly informing that the appointment of respondent No.6 as CEO
is strictly in accordance with law and thereafter, the instructions
received from the Registrar, Co-operative Societies were placed for
consideration before the Board of Directors on 25-8-2017 as
subject No.3 and the Board of Directors in its resolution dated 25-8-
5
2017 duly considered the matter and accepted the appointment of
respondent No.6 as CEO as valid and in accordance with law and
resolved and instructed respondent No.7 to give the charge of the
post of CEO to respondent No.6 and accordingly, the charge of the
post of CEO was given to respondent No.6. He would also submit
that the appointment of respondent No.6 has become final as till
this date, the Board of Directors of Zila Sahkari Kendriya Bank
Maryadit has not taken any decision contrary to its resolution
(resolution No.3) dated 25-8-2017 and therefore in absence of
challenge to resolution No.3 dated 25-8-2017, the Chairman of the
petitioner Bank cannot challenge the said resolution in which he
was a party and has accepted the decision on the principle of
estoppel and acquiescence. The petitioner has also suppressed
the amendment made in Section 57-B of the Act of 1960 which has
been omitted from the statute book with effect from 14-12-2016 and
obtained interim order on 10-10-2017 from this Court, therefore, the
writ petition deserves to be dismissed on the ground of suppression
of legislative amendment and obtaining interim order by
suppression of material fact.
8. Mr. Goutam Khetrapal, learned counsel appearing for respondent
No.6, would support the action of respondent No.4 Bank, whereas
Mr. Manish Upadhyay, learned counsel appearing for respondent
No.7, would support the action of the Chairman of the petitioner
Bank.
9. Mr. V.G. Tamaskar, learned counsel appearing for the intervener,
would submit that most eligible person be appointed as CEO of the
6
petitioner Bank.
10. I have heard learned counsel for the parties and considered their
rival submissions made herein-above and also gone through the
record with utmost circumspection.
11. In order to adjudicate the point in dispute, it would be appropriate to
notice the provisions contained in Section 54(1), (2) and (3) of the
Act of 1960 which read as under: -
"54. Appointment of Managers, Secretaries
and other officers.--(1) No society shall appoint a
Manager, Secretary, Accountant or other paid officer
unless he holds such qualifications as may be
prescribed.
(2) The Apex and Central Societies shall
maintain such cadres of officers and other servants as
the State Government may, by order, direct and the
conditions of service of members of such cadre shall
be such as the Registrar may, by order, determine.
(3) The State Government may, by notification,
specify the class of societies which shall employ
officers from such cadres maintained by the Apex or
Central Societies under sub-section (2) as may be
specified therein and it shall be obligatory on the part of
such class of societies to accept and appoint such
cadre officers on the cadre posts as and when deputed
by the Apex or Central Societies."
12. Thereafter, in exercise of power conferred under Section 54(3) of
the Act of 1960, the State Government has issued a notification
which states as under: -
^^vf/kl wp uk Ø- 258&413&i an z g &1-71] fnuk ad 12-01-
1971&e/;izns'k lgdkjh lfefr;ka vf/kfu;e] 1960 ¼Øekad 17 lu~
7
1961½ dh /kkjk 54 dh mi/kkjk ¼3½ }kjk iznRr 'kfDr;ksa dks iz;ksx esa
ykrs gq, jkT; 'kklu] ,rn~ }kjk ;g mfYyf[kr djrk gS fd uhps
nh xbZ vuqlwph ds dkWye ¼3½ esa of.kZr lgdkjh lfefr;ka mDr
vuqlwph esa muds lkeus ds dkWye ¼2½ esa dh rRLFkkuh izfof"V esa 'kh"kZ
lgdkjh lfefr;ksa }kjk xfBr fd;s x;s laoxksaZ esa ls gh mudks
miyfC/k ds vuqlkj inkf/kdkjh fu;qDr djsaxs%&
vuq l wp h
Lkgdkjh lfefr;k s a dk
Øek ad 'kh"kZ lgdkjh lfefr dk uke
uke
¼1½ ¼2½ ¼3½
1- e/;izns'k jkT; lgdkjh cSad dsUnzh; lgdkjh cSad
fyfeVsM
2- izkFkfed lgdkjh Hkwfe
e/;izns'k jkT; Hkwfe fodkl cSad fodkl cSad
3-
e/;izns'k jkT; lgdkjh foi.ku la?k izkFkfed lgdkjh foi.ku
lfefr;ka rFkk izfØ;k
lfefr;kaA
¼ e/;izns'k jkti=] Hkkx&1] fnukad 19-02-1971 esa izdkf'kr ½^^
13. Thereafter, the Act of 1960 has suffered amendment by the
Chhattisgarh Co-operative Societies (Amendment) Act, 2016 with
effect from 14-12-2016 and in sub-section (3) of Section 54,
following provisions have been inserted: -
"(a) The eligibility criteria to hold the office of Chief
Executive Officer of any Co-operative Bank shall be as
such as may be prescribed by the Reserve Bank in this
regard.
(b) If the concerning Co-operative Bank fails to appoint
Chief Executive Officer under the eligibility criteria
within a specified period, in such a condition the
registrar may appoint such eligible officer of the Bank."
14. A conjoint reading of the aforesaid provisions and the above-stated
notification would show that the Apex and Central Societies shall
maintain such cadres of officers and other servants as the State
8
Government may, by order, direct and the conditions of service of
members of such cadre shall be such as the Registrar may, by
order, determine. Second part of sub-section (3) of Section 54 of
the Act of 1960 would show that it is obligatory on the part of such
class of societies to accept and appoint such cadre officers on the
cadre posts as and when deputed by the Apex or Central Societies
and for that, the notification dated 12-1-1971 has been issued. With
effect from 14-12-2016, the amendment incorporated in sub-
section (3) of Section 54 of the Act of 1960 would show that if the
concerned Co-operative Bank fails to appoint Chief Executive
Officer fulfilling the eligibility criteria prescribed therein within a
specified period, in such a condition, the Registrar may appoint
such eligible officer of the Bank.
15. In the instant case, respondent No.4 appointed respondent No.6
(cadre officer) as CEO of the said Bank on 11-8-2017 in exercise of
power and authority conferred under Section 54(3) of the Act of
1960 read with notification dated 12-1-1971. When the matter
reached to the said Bank, the Board of Directors of the said Bank
considered the appointment made by respondent No.4 Bank in light
of the amendment incorporated in Section 54(3) by way of clauses
(a) and (b) and decided to seek instructions from the Registrar, Co-
operative Societies as to whether the appointment of respondent
No.6 is to be made by the Apex Bank (respondent No.4) or the
District Co-operative Bank (petitioner). In para 4 of the memo
dated 17-8-2017 seeking instructions from the Registrar, Co-
operative Societies, Chhattisgarh, Raipur, following facts were
9
mentioned by the Chairman of the petitioner Bank: -
^^4@ ekuuh; v/;{k egksn; }kjk lnL;ksa dks la'kksf/kr vf/kfu;e
nLrkost voyksdu djok;k] tks fuEukuqlkj gS&
dk;kZy; iath;d] lgdkjh laLFkk ;sa N-x- }kjk izlkfjr i=
Ø-@fof/k@78@lkekU;@2016@17] u;k jk;iqj] fnukad
02@01@2017 esa N-x- lgdkjh lfefr;ka vf/kfu;e dh /kkjk 1960
dh fofHkUu /kkjkvksa esa fd, x, la'kksf/ku ckcr~ NRrhlx<+ jkti=
¼vlk/kkj.k½ fnukad 14-12-2016 layXu dj vko';d dk;Zokgh gsrq
cSad dks izkIr gqvk Fkk] ftlesa /kkjk 54 la'kks/ku ewy vf/kfu;e dh
mi/kkjk ¼3½ ds ¼nks½ mi/kkjk ¼3½ ds uhps fuEufyf[kr tksM+k tkos&
^^¼d½ fdlh lgdkjh cSad ds eq[; dk;Zikyu vf/kdkjh dk in
/kkj.k djus ds fy, ik=rk ekin.M ,sls gksus] tSlk fd bl laca/k esa
fjtZo cSad }kjk fofgr fd;k tkosa-
¼[k½ ;fn lacaf/kr lgdkjh cSad ik=rk eki n.M ds varxZr eq[;
dk;Zikyu vf/kdkjh dh fu;qfDr fofufnZ"V le;kof/k ds Hkhrj djus
esa foQy jgrk gS rks ,slh n'kk esa jftLVªkj cSd
a ds ,sls ik=
vf/kdkjh dh fu;qfDr dj ldsxk-**
mijksDr ewy vf/kfu;e esa la'kksf/kr mi/kkjk 3 ¼d½ ,oa ¼[k½
tqM+us ls eq[; dk;Zikyu vf/kdkjh dh fu;qfDr dk vf/kdkj lacaf/kr
ftyk cSad dks gS vFkok visDl cSad dks gS] 'kh"kZ cSad ,oa ekuuh;
iath;d] lgdkjh laLFkkvksa ls izkIr i= ds voyksdu ls la'k; dh
fLFkfr mRiUu gks x;h gS] mijksDr i= ,oa jkti= esa izdkf'kr
la'kks/ku dh Nk;kizfr layXu gS-
-------------
-------------
vr% mijksDr la'k; ij fcUnqokj cSd a dks ekxZn'kZu nsus dh Ñik djsa rkfd Jh tks'kh ds eq[; dk;Zikyu vf/kdkjh ds in ij dk;ZHkkj lkSaius ds laca/k esa izkIr ekxZn'kZu ds vk/kkj ij fof/k lEer fu.kZ; cSad }kjk fy;k tk lds-^^
16. The Registrar, Co-operative Societies, considered the memo dated 17-8-2017 quoted herein-above seeking instructions by the Chairman of the petitioner Bank and clearly held by its memo dated 10 21-8-2017 that the appointment of respondent No.6 made by respondent No.4 is strictly in accordance with law. Upon receipt of memo dated 21-8-2017, matter was placed before the Board of Directors in which the Chairman of the petitioner Bank through whom this writ petition has been filed, was also present. Subject No.3 and its resolution of the meeting dated 25-8-2017 of the Board of Directors of the petitioner Bank state as under: -
^^fo"k; Ø-3 Jh ,l-ds- tks'kh] laoxZ vf/kdkjh visDl cSad jk;iqj ds ftyk lgdkjh dsUnzh; cSad e;kZ- nqxZ esa eq[; dk;Zikyu vf/kdkjh ds in ij inLFkh ds laca/k essa dk;kZy; iath;d] lgdkjh laLFkk;sa ls izkIr ekxZn'kZu ds ikyukFkZ@fØ;kUo;u ckcr-
e ar O;& lapkyd e.My dh cSBd fnukad 16-08-2017 ds izLrko Ø- 13 ¼5½ ds vuqlkj Jh ,l-ds- tks'kh] laoxZ vf/kdkjh visDl cSd a jk;iqj ds ftyk lgdkjh dsUnzh; cSad e;kZ] nqxZ esa eq[;
dk;Zikyu vf/kdkjh ds in ij inLFkh ds laca/k esa NRrhlx<+ jkti= ¼vlk/kkj.k½ fnukad 14-12-2016 /kkjk 54 dk la'kks/ku ewy vf/kfu;e dh mi/kkjk ¼3½ ¼d½ ¼[k½ ds varxZr eq[; dk;Zikyu vf/kdkjh fu;qfDr ds laca/k esa ekxZn'kZu nsus ckcr cSad ds i= Ø-@iz'kk-&1@1330] nqxZ fnukad 17@08@2017 ds }kjk Jheku~ iath;d ls ekaxk x;k Fkk] rn~laca/k esa dk;kZy; iath;d] lgdkjh laLFkk ;sa N-x- ls ekxZn'kZu nsrs gq, ys[k fd;k x;k gS fd visDl cSad jk;iqj }kjk Jh ,l-ds- tks'kh] laoxZ vf/kdkjh ds ftyk lgdkjh dsUnzh; cSad e;kZ- nqxZ esa eq[; dk;Zikyu vf/kdkjh ds in LFkkiuk dk vkns'k fof/k lEer gS] visDl cSad jk;iqj ds vkns'k dk ikyu fd;k tkuk lqfuf'pr djsa rnkuqlkj v/;{k egksn; }kjk dk;kZy;
iath;d ds funsZ'k dk ikyu djrs gq, fnukad 23-08-2017 dks 11 lapkydx.k Jh jekdkar f}osnh] Jh pafnzdk izlkn ns'keq[k ,oa Jh f'ko pUnzkdj ls ijke'kZ mijkar Jh ,l-ds- tks'kh dks cSad ds izHkkjh eq[; dk;Zikyu vf/kdkjh dks fn;k x;k] muds }kjk tkpZ fn;k x;k ftldh loZ lEefr ls iqf"V dh tkrh gS-^^
17. The aforesaid subject and resolution passed by the Board of Directors of the petitioner Bank would show that the Board of Directors considered the matter thoroughly and decided to accept the appointment made by respondent No.4, as the Registrar, Co- operative Societies has clearly held that the appointment of respondent No.6 is in accordance with law. Not only this, the Board of Directors directed the handing over of charge to respondent No.6 from respondent No.7 which has been done and it has been given to respondent No.6. Thereafter only, the writ petition has been filed by the Chairman of the Bank in the name of the Bank. When objection was taken by respondent No.4, then resolution has been passed on 24-11-2017 by the Board of Directors ratifying the challenge made by the Chairman of the petitioner Bank.
18. It is quite vivid from the aforesaid narration of facts that respondent No.4 Apex Bank is entitled to make appointment from amongst the cadre officers on the post of CEO by virtue of the provisions contained in Section 54(3) of the Act of 1960 read with the notification and the Central Co-operative Bank is obliged to accept and appoint the cadre officer as indicated by respondent No.4 which is an Apex Society and in exercise of that power, the appointment has been made. Not only this, in view of the 12 amendment incorporated with effect from 14-12-2016 in Section 54 of the Act of 1960 inserting clauses (a) and (b) in sub-section (3) of Section 54, admittedly, in the present case, the Board of Directors of the petitioner Bank failed to make appointment of Chief Executive Officer of the Bank within reasonable time and the Chairman has only made appointment on 10-8-2017, then only, respondent No.4 Bank has stepped-in and appointed respondent No.6 as CEO which the Board of Directors of the Bank has accepted upon receipt of instructions from the Registrar, Co- operative Societies, by order dated 21-8-2017. The Board of Directors of the petitioner Bank had already accepted the appointment made by respondent No.4. Even otherwise, the Registrar, Co-operative Societies, as required under Section 54(3)
(b) of the Act of 1960, has already ratified the action of respondent No.4. Since the Board of Directors of the petitioner Bank had already accepted the appointment of respondent No.6 as CEO and it has already been acted upon and in view of the provisions contained in Section 54(3)(b) of the Act of 1960, it cannot be held that the appointment of respondent No.6 on the post of CEO is without jurisdiction and without authority of law.
19. The impugned order passed by respondent No.4 Apex Bank is also ratified by the Registrar, Co-operative Societies and duly accepted by the Board of Directors of the petitioner Bank. Ratification by definition means the making valid of an act already done. This principle is derived from the Latin maxim "ratihabitio mandato aequiparatur", namely, 'a subsequent ratification of an : equivalent 13 to a prior authority to perform such act' and as such, ratification assumes an invalid act which is retrospectively validated.
20. The expression "ratification" was succinctly defined by the English Court in one old case, Hartman v. Hornsby1 as under:
" 'Ratification' is the approval by act, word, or conduct, of that which was attempted (of accomplishment), but which was improperly or unauthorisedly performed in the first instance."
21. The law of ratification was applied by the Supreme Court in Parmeshwari Prasad Gupta v. Union of India2. In that case, the Chairman of the Board of Directors had terminated the services of the General Manager of a Company pursuant to a resolution taken by the Board at a meeting. It was not in dispute that the meeting had been improperly held and consequently the resolution passed in the said meeting terminating the services of the General Manager was invalid. However, the Board of Directors then convened subsequent meeting and in this meeting affirmed the earlier resolution, which had been passed in improper meeting. On these facts, Their Lordships held as under: (SCC pp. 546-47, para
14) "14. ... Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance of the invalid resolution of the Board of Directors passed on 16-12- 1953 to terminate his services, it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the Board of Directors. The point is that even assuming that the Chairman was 1 142 Mo 368 : 44 SW 242 at p. 244 (1897) 2 (1973) 2 SCC 543 14 not legally authorised to terminate the services of the appellant, he was acting on behalf of the Company in doing so, because, he purported to act in pursuance of the invalid resolution. Therefore, it was open to a regularly constituted meeting of the Board of Directors to ratify that action which, though unauthorised, was done on behalf of the Company. Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on 17-12-1953."
This view was approved by the Supreme Court in the matter of High Court of Judicature for Rajasthan v. P.P. Singh and another3.
22. The aforesaid principle of law of ratification was again applied by the Supreme Court in the matter of Maharashtra State Mining Corpn. v. Sunil4. In this case, the respondent was an employee of the appellant Corporation. Consequent to a departmental enquiry, he was dismissed by the Managing Director of the appellant. The respondent then filed a writ petition before the High Court. During the pendency of the writ petition, the Board of Directors of the appellant Corporation passed a resolution ratifying the impugned action of the Managing Director and also empowering him to take decision in respect of the officers and staff in the grade of pay the maximum of which did not exceed Rs 4700 p.m. Earlier, the Managing Director had powers only in respect of those posts where the maximum pay did not exceed Rs 1900 p.m. The respondent at the relevant time was drawing more than Rs 1800 p.m. Therefore, at the relevant time, the Managing Director was incompetent to 3 (2003) 4 SCC 239 4 (2006) 5 SCC 96 15 dismiss the respondent. Accordingly, it was held 5 by the Bombay High Court that the order of dismissal to be invalid. It was further held that the said defect could not be rectified subsequently by the resolution of the Board of Directors. The appellant then filed the appeal in the Supreme Court by special leave. A three-Judge Bench of the Supreme Court, while allowing the appeal and setting aside the order of the Bombay High Court held as under: (Sunil case (supra), SCC pp. 96G-h & 97a-b) "The High Court rightly held that an act by a legally incompetent authority is invalid. But it was entirely wrong in holding that such an invalid act could not be subsequently "rectified" by ratification of the competent authority. Ratification by definition means the making valid of an act already done. The principle is derived from the Latin maxim ratihabitio mandato aequiparatur, namely, 'a subsequent ratification of an act is equivalent to a prior authority to perform such act'. Therefore, ratification assumes an invalid act which is retrospectively validated.
* * * In the present case, the Managing Director's order dismissing the respondent from the service was admittedly ratified by the Board of Directors unquestionably had the power to terminate the services of the respondent. Since the order of the Managing Director had been ratified by the Board of Directors such ratification related back to the date of the order and validated it."
23. The above-stated principle of ratification and judgments relied upon above-mentioned have been followed with approval by the 5 Sunil v. Maharashtra State Mining Corpn., 2005 SCC OnLine Bom 758 : (2006) 1 Mah LJ 495 16 Supreme Court recently in the matter of National Institute of Technology and another v. Pannalal Choudhury and another 6 and it was held as under: -
"33. Applying the aforementioned law of ratification to the facts at hand, even if we assume for the sake of argument that the order of dismissal dated 16-8-1996 was passed by the Principal and Secretary who had neither any authority to pass such order under the Rules nor was there any authorisation given by the BoG in his favour to pass such order yet in our considered view when the BoG in their meeting held on 22-8-1996 approved the previous actions of the Principal and Secretary in passing the respondent's dismissal order dated 16-8-1996, all the irregularities complained of by the respondent in the proceedings including the authority exercised by the Principal and Secretary to dismiss him stood ratified by the Competent Authority (Board of Governors) themselves with retrospective effect from 16-8-1996 thereby making an invalid act a lawful one in conformity with the procedure prescribed in Rules."
24. Reverting to the factual matrix and applying the law of ratification to the facts of the present case, it is quite vivid that the order passed by respondent No.4 Bank has been considered by the Board of Directors of the petitioner Bank and after taking instructions from the Registrar, Co-operative Societies, who is the authority competent under Section 54(3)(b) of the Act of 1960, it has duly accepted and acted upon by accepting the said order and irregularity, if any, stood ratified and it cannot be held that the order passed by respondent No.4 is illegal and without authority of law. 6 (2015) 11 SCC 669 17
25. Thus, from the aforesaid legal analysis, it is quite apparent that respondent No.4 has appointed respondent No.6 as CEO of the petitioner Bank in exercise of power conferred under Section 54(3)
(b) of the Act of 1960 read with the notification dated 12-1-1971 and even otherwise, that order has been ratified by the Registrar, Co-operative Societies by order dated 21-8-2017 and that order has been accepted by the petitioner Bank in its meeting of the Board of Directors with open eyes after due deliberation and after seeking instructions from the Registrar, Co-operative Societies in which I do not find any illegality or error of jurisdiction requiring interference in exercise of power under Article 226 of the Constitution of India.
26. As a fallout and consequence of aforesaid discussion, the writ petition deserves to be and is accordingly dismissed. No order as to cost(s).
27. Before parting with the record, a note of caution is necessary for the Chairman of the petitioner Bank, who has filed this writ petition. The writ petition has been filed and it was argued before this Court at the time of admission of petition that the order passed by respondent No.4 is contrary to law in view of the scheme of Section 57-B, clause (19), of the Act of 1960, which, in fact, (Section 57-B) has been omitted from the statute book by Amendment Act No.34 of 2016 with effect from 14-12-2016. This fact of omission of Section 57-B from the statute book was very well within the knowledge of the petitioner's Chairman which is apparent from his representation / memo dated 17-8-2017 by which he has clearly 18 stated the omission of Section 57-B of the Act of 1960 and the addition of clauses (a) and (b) of sub-section (3) of Section 54 of the Act of 1960. Para 5 of the representation / memo dated 17-8- 2017 states as under: -
^^5@ cSad ds lapkyu e.My dh cSBd fnukad 18-03-2017 dks fy, x, fu.kZ; esa /kkjk 57 ¼[k½ ds foyksiu i'pkr~ D;k laLFkkvksa ds fgr esa vkSj fu;e fufeZr fd;k tkuk gS\ rkfd laLFkk vius fgrksa ds fy, ikWfylh rS;kj dj izxfr dh vksj vxzlj gks lds] bl laca/k esa ekuuh; v/;{k egksn; ds ek/;e ls Hkkjrh; fjtoZ cSad ,oa ukckMZ dks i= Hkstk x;k Fkk ,oa ukckMZ }kjk Jheku~ iath;d] lgdkjh laLFkk;sa N-x- dks i= fy[kk x;k gS] ftl ij visf{kr dk;Zokgh vizkIr gS] mijksDr i=ksa@lapkyd e.My }kjk ikfjr fu.kZ; dh Nk;kizfr layXu gS-^^
28. The aforesaid fact would clearly show that though the Chairman of the petitioner Bank was fully aware of the omission of Section 57-B of the Act of 1960 from the statute book, yet he relied upon the said omitted provision before this Court on 10-10-2017 and obtained interim order. It is not the case where the petitioner's Chairman was not aware of the omission of the provision of Section 57-B and relied upon before this Court. It is extremely serious. It appears that in order to obtain interim order, such an omitted provision has been relied upon. It is a case where the petitioner should be saddled with heavy costs. But considering the peculiar facts of the case and directing him to be careful in future and that he will not indulge in such an activity, I leave the matter as it is with the aforesaid observation.
Sd/-
(Sanjay K. Agrawal) Judge Soma