Orissa High Court
Ajay Kumar Panda vs Asst. Registrar Of Co-Operative .... ... on 17 December, 2024
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.7711 of 2024
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Ajay Kumar Panda .... Petitioner(s)
-versus-
Asst. Registrar of Co-operative .... Opposite Party (s)
Societies, Banki Circle, Cuttack
Advocates appeared in the case throughHybrid Mode:
For Petitioner(s) : Mr.Bikram Senapati, Adv.
For Opposite Party (s) : Mr.Saswat Das, AGA
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-13.11.2024
DATE OF JUDGMENT: -17.12.2024
Dr. S.K. Panigrahi, J.
1. The petitioner, through this petition challenges the order dated 13.03.2024 issued by the Appellate Authority-cum-Assistant Registrar of Cooperative Societies, Banki whereby the appeal filed by Opposite Party No. 3 was allowed, and the removal order dated 25.10.2019 against him was set aside.
I. FACTUAL MATRIX OF THE CASE:
2. The brief facts of the case are as follows:Page 1 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
(i) The Pandalam Service Co-operative Society ("Opposite Party No. 7") is a primary co-operative society governed under the Orissa Co-operative Societies Act, 1962, its Rules of 1965, and its Bye-laws.
(ii) Santosh Kumar Jaysingh ("Opposite Party No. 3"), serving as Secretary, was found to have allegedly engaged in financial embezzlement, misappropriation of funds, and tampering with society's records.
Consequently, he was suspended on 23.09.2019 and removed from service on 25.10.2019 under Section 28(viii) of the Act.
(iii) Opposite Party No. 3 challenged his termination by filing Service Dispute Case No. 13/2019 before the State Co-operative Tribunal but later withdrew it on 21.08.2020. Prior to this withdrawal, he had filed W.P.(C) No. 22877/2019 before the High Court, which, through its order dated 20.12.2019, directed him to proceed with the Tribunal case.
(iv) During the pendency of the dispute, Opposite Party No. 3 was instructed to hand over charges to Mr. Dharanidhar Mohanty, but instead, he filed Miscellaneous Case No. 16/2020 before the Tribunal seeking to retain society's records. The Tribunal dismissed the case on 29.06.2020 and directed Opposite Party No. 1 to conduct an inventory under Section 33(2) of the Act.
(v) Despite this, Opposite Party No. 1 failed to comply, enabling Opposite Party No. 3 to retain the society's records unlawfully. Following the withdrawal of Service Dispute Case No. 13/2019 on 21.08.2020, Opposite Party No. 2, the then Administrator, issued Order No. 23 dated 24.08.2020, arbitrarily reinstating Opposite Party No. 3 without the authority of a duly elected Committee of Management. Page 2 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
(vi) Challenging this, the petitioner filed Dispute Case No. 123/2020 under Section 68 of the Act before the Registrar of Co-operative Societies ("Opposite Party No. 5"). The Registrar, through an order dated 02.03.2024, set aside the reinstatement order of 24.08.2020, restoring the original removal order of 25.10.2019.
(vii) Opposite Party No. 3 subsequently filed Tribunal Appeal No. 09/2024 on 07.03.2024 challenging the Registrar's decision but withdrew it on 16.03.2024. The petitioner became aware of this withdrawal on 25.03.2024 upon receiving the appeal memo and withdrawal petition.
(viii) As a result, the petitioner contends that the removal order dated 25.10.2019 remains valid and binding. However, it came to the petitioner's notice through a registered letter dated 21.03.2024 that Opposite Party No. 1 issued Order No. 646 on 13.03.2024, once again reinstating Opposite Party No. 3, in violation of the Registrar's order and the binding nature of the Tribunal proceedings. II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
3. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions:
(i) The illegal action of Opposite Party No. 1 mirrors the unauthorized conduct of Opposite Party No. 2 and amounts to an illegal exercise of appellate jurisdiction in disguise over an order passed by a higher authority. Such an action is void under Section 109(1)(j) of the Orissa Co-operative Societies Act, 1962, read with Rule 22 of the PACS Staff Service Rules, 2011.Page 3 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
(ii) The removal order dated 25.10.2019 had already merged with the Tribunal's Order No. 41 dated 21.08.2020 in Service Dispute Case No. 13/2019, and the subsequent withdrawal of T. Appeal No. 09/2024 rendered Opposite Party No. 1's attempt to nullify statutory proceedings wholly void and without jurisdiction. Order No. 646 dated 13.03.2024 issued by Opposite Party No. 1 is, therefore, illegal and arbitrary, constituting a clear disregard for statutory provisions and judicial orders.
(iii) A bare perusal of the impugned order reveals serious illegalities and procedural lapses. It is cryptic and fails to specify the registration date, the appeal number, any directive for document production, or the identity of the officer responsible for compliance. Such glaring omissions render the order unsustainable under the PACS Staff Service Rules, 2011, and the O.C.S. Act, 1962.
(iv) Furthermore, Opposite Party No. 3's history disqualifies him from holding any position within Opposite Party No. 7 Society. His record includes a monetary penalty of ₹17,00,000 passed against him under Section 67 of the O.C.S. Act in S.P. Case No. 9/2017 and pending criminal proceedings in Baideswar P.S. Case No. 100/2019 under Section 409 IPC for the misappropriation of ₹17,69,286, corresponding to G.R. Case No. 418/2019 before the learned S.D.J.M., Banki. Despite interim protection granted by this Court in ABLAPL No. 17991/2019 on 27.10.2021, which directed him to deposit ₹8,00,000, Opposite Party No. 3 evaded compliance with Section 91 Cr.P.C. notices issued by the Page 4 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 Vigilance Department on 01.01.2021 and failed to produce critical records of the society, reflecting his continued malafide conduct.
(v) The petitioner, aggrieved by the Vigilance Department's prolonged inaction despite this Court's observations in CRLMP No. 1695/2020 on 13.01.2021, sent a communication dated 11.03.2024 to the S.P. Vigilance, Cuttack Division, urging immediate implementation of the Court's directions. However, no steps have been taken to date.
(vi) Notably, pursuant to Order No. 646 dated 13.03.2024, Opposite Party No. 3, through a communication dated 21.03.2024, instructed Opposite Party No. 1 to recall the order. Yet, Opposite Party No. 1 has failed to act, and instead appears complicit in ensuring the irregular continuance of Opposite Party No. 3/ permitting him to operate the society's accounts in collusion with the Branch Manager of Kalapathar Branch of Banki Central Cooperative Bank Ltd. ("Opposite Party No. 4"). This collusion raises strong suspicions of a concerted effort to misappropriate society's funds/ assets/ and properties.
(vii) The impugned order dated 13.03.2024, therefore, reflects a lack of transparency, manifest malafides, and dubious conduct by Opposite Party No. 1, acting in connivance with Opposite Parties No. 2 to 4 to further illegal interests through Opposite Party No. 3. Such an untenable order is void ab initio, lacks legal sanction, and is non- existent in the eyes of the law.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY:
4. Per contra, learned counsel for the Opp. Party earnestly made the following submissions in support of his contentions:Page 5 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
(i). The petitioner placed the Opp. Party No.3 under suspension on 23.09.2019, citing allegations of misappropriation of society funds and tampering with records. However, the removal order dated 25.10.2019 was issued without serving any notice, providing a charge memo, or following the due process as mandated under Rule 22 of the Notification dated 07.02.2011 issued by the Registrar of Cooperative Societies, Odisha ("Opp. Party No.5"). The required procedures, including communicating specific charges in writing, conducting a formal inquiry, furnishing the inquiry report, and issuing a notice regarding the proposed penalties, were not adhered to before imposing the major penalty of removal.
(ii). Furthermore, the petitioner failed to produce any documents substantiating the allegations against the deponent, including the alleged audit report, either before the appellate authority or this Court. These procedural and evidentiary deficiencies highlight a complete disregard for the rules and principles of natural justice. The Opp. Party No. 1, after thoroughly verifying the records, observed gross violations of the prescribed procedures. Consequently, on 13.03.2024, the authority quashed the removal order dated 25.10.2019 and directed the reinstatement of the deponent.
(iii). The Appellate Authority also noted that the petitioner's actions were arbitrary and unsupported by evidence. It appears that the petitioner acted with malafide intentions/ possibly driven by the deponent's refusal to comply with alleged undesired demands made during the petitioner's tenure as President of the society. Despite these findings, Page 6 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 the deponent has remained out of employment since 25.10.2019 through no fault of their own.
(iv). In light of these facts, the deponent respectfully prays for the interim order dated 04.04.2024 to be vacated and requests permission to resume duty in the society. The deponent seeks justice for the wrongful and arbitrary actions taken against them and urges this Court to consider the violations of procedure and lack of evidence in the matter. .
IV. COURT'S REASONING AND ANALYSIS:
5. Before adverting on the merits of the instant petition, this Court finds it apposite to discuss the settled law with regards to the maintainability of writ petition pertaining to service matters against a cooperative society.
6. The short question for adjudication in the instant petition is that whether the Opp. Party No.7/Cooperative Society is amenable to the writ jurisdiction of Courtin the instant writ petition which involves a service dispute.
7. It is pertinent to note that this Court, in the case of Ch. Ajeet Kumar Das and Ors. v. Registrar, Co-operative Societies, Odisha and Ors.,1 has already adjudicated upon a similar issue. The said judgment, disposed of on 31.07.2024, is relevant for the present matter. For the sake of clarity and to ensure proper adjudication of the case at hand, the relevant discussion from the aforesaid judgment is reproduced herein
8. Article 12 of the Constitution of India has defined the term "State" as follows:
1
W.P.(C) No.18641 of 2020, Ori HC Page 7 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 "12. Definition.--In this Part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India."
9. The constitutional history reveals that the term "other authorities" as referenced in Article 12 has been the subject of extensive judicial examination. This examination has led to the establishment of a comprehensive body of jurisprudence dedicated to its interpretation. The evolution of this legal framework highlights the significance of "other authorities" in defining the scope of constitutional rights and governmental powers.
10. In the case of Ajay Hasia and others v. Khalid MujibSehravardi,2 a Constitution Bench of the Supreme Court, while approving the tests laid down in the case of RamanaDayaramShettyv. International Airport Authority of India &Ors.,3 as to when a corporation can be said to be an instrumentality or agency of the government, observed which runs thus:-
"The tests for determining as to when a corporation can be said to be an instrumentality or agency of government may now be culled out from the judgment in the International Airport Authority case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which 2 (1981 ) 1 SCC 722 3 (1979) 3 SCC 489 Page 8 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 has some nexus with the government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority case as follows:
(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government ;
(2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character;
(3) It may also be a relevant factorwhether the corporation enjoys monopoly status which is State conferred or State protected;
(4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality ;
(5) If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government ;
(6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of Government.
If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the International Airport Authority case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12." Page 9 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
11. Then, in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others,4 a seven-judge Bench of the Apex Court, meticulously examined and endorsed the criteria established in the RD Shetty(supra) and reaffirmed in the Ajay Hasia(supra) for determining when a corporation can be classified as an "instrumentality" or "agency" of the government, thereby falling within the scope of the term 'authority' as defined in Article 12 of the Constitution. The Bench referenced the case of Chander Mohan Khanna v. NCERT,5 wherein the Apex Court, after evaluating the memorandum of association and operational rules, concluded that the NCERT was primarily an autonomous entity. It was determined that its functions were not exclusively governmental, and government oversight was limited to ensuring proper utilization of grants. Since its funding was not entirely derived from government sources, it did not meet the criteria of a State instrumentality under Article 12. Additionally, the Bench cited the decision in Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers' Association,6 where it was established that the company qualified as an authority under Article 12. This conclusion was based on the fact that the company was substantially funded and financially controlled by the government, operated under a Board of Directors appointed and removable by the government, and undertook functions of significant public interest under governmental oversight. 4 (2002) 5 SCC 111 5 (1991) 4 SCC 578 6 (2002) 2 SCC 167 Page 10 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
12. The evolving landscape of state control and the increasing involvement of private entities in what is termed as "public functions" have prompted the Supreme Court to address the issue of liability for such private actors. A "public function" refers to a role traditionally reserved for governmental authorities. Private sector individuals or entities are deemed to be executing a public function when they undertake responsibilities historically associated with government entities.
13. In AnandiMukta& Others v. V.R. Rudani& Others,7 the Supreme Court clarified that the phrase "any person or authority" under Article 226 of the Constitution is not confined to statutory bodies and government instrumentalities. Instead, it extends to any individual or entity engaged in performing a public function. Then, in Zee Telefilms Ltd. & Others v. Union of India,8 the Supreme Court delineated the scope of "other authorities" under Article 12 of the Constitution. This category includes state-created corporations and societies engaged in trading, bodies involved in research and development related to government functions, and private entities performing public duties or undertaking activities similar to those of government entities. Additionally, in Janet Jeyapaul v. SRM University & Others,9 the Court found that SRM University was engaged in a public function through its educational activities
14. The aforementioned decisions clarify that the precise type of entity--be it a society, cooperative society, or company--does not solely determine its status. What is essential is the degree of governmental control over 7 1989 (2) SCC 691 8 (2005) 4 SCC 649 9 2015 (16) SCC 530 Page 11 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 the entity and its operationality in a manner similar to a "public function." The tests described must be collectively applied and assessed. There is no fixed formula for this determination; instead, various factors may become significant in different factual scenarios to establish whether the entity qualifies as an authority under Article 12 of the Constitution.
15. It is a settled position of law that for any other authority to fall within the domain of the writ jurisdiction it should be discharging a "public duty" and the dispute between the parties shall persist regarding the non- performing of such public duty or function. It is pertinent to note that the Supreme Court has time and again reiterated that when the dispute pertains to the service matters and there is no element of public duty involved in it, then the dispute falls within the domain of private dispute and is not amenable to the jurisdiction of the writ Court.
16. It is undisputed that the Society has not been constituted under any specific Act. However, it functions similarly to any other Co-operative Society and is primarily regulated by the provisions of the Orissa Cooperative Societies Act, except where otherwise provided in the Society's bye-laws. The State has no role in the day-to-day functioning of the Society. Matters such as membership, acquisition of shares, and other related affairs are governed by the bye-laws framed under the Act. The terms and conditions of officers of the Co-operative Society are, indisputably, governed by the applicable Rules.
17. It has not been shown before this court that the State exercises any direct or indirect control over the affairs of the Society for deep and Page 12 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 pervasive control. It cannot, thus, be said that the State exercises any functional control over the affairs of the Society.
18. In S.S. Rana v. Registrar, Co-Operative Societies,10the Supreme Court dealt with the question of amenability of non-statutory cooperative societies under Art. 226 of the Constitution. The relevant excerpt is produced hereinbelow:
"The respondent No.1-Society does not answer any of the afore- mentioned tests. In the case of a non-statutory society, the control thereover would mean that the same satisfies the tests laid down by this Court in Ajay Hasia vs. Khalid MujibSehravardi [(1981) 1 SCC 722]. [See Zoroastrian Coop. Housing Society Ltd. vs. District Registrar, Coop. Societies (Urban) &Ors. reported in 2005 (5) SCC632.] It is well settled that general regulations under an Act, like Companies Act or the Co-operative Societies Act, would not render the activities of a company or a society as subject to control of the State. Such control in terms of the provisions of the Act are meant to ensure proper functioning of the Society and the State or statutory authorities would have nothing to do with its day-to-day functions."
19. In Krishna Mohan v. State Of U.P.,11the Allahabad High Court has held that Co-operative societies, though subject to statutory supervision and regulatory oversight by authorities like the Registrar, Joint Registrar, and the Government, do not fall under the deep and pervasive control of the State. The court observed as following:
"17. Societies are, of course, subject to the control of the statutory authorities like Registrar, Joint Registrar, the Government, etc. but cannot be said that the State exercises any 10 2006 (11) SCC 634 11 WRIT(A) No. - 2329 of 2019; All HC Page 13 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 direct or indirect control over the affairs of the society which is deep and all pervasive. Supervisory or general regulation under the statute over the co-operative societies, which are body corporate does not render activities of the body so regulated as subject to such control of the State so as to bring it within the meaning of the "State" or instrumentality of the State. Above principle has been approved by this Court in S.S. Rana v. Registrar, Co-operative Societies and another (2006) 11 SCC 634. In that case this Court was dealing with the maintainability of the writ petition against the Kangra Central Co- operative Society Bank Limited, a society registered under the provisions of the Himachal Pradesh Co-operative Societies Act, 1968. After examining various provisions of the H.P. Co- operative Societies Act this Court held as follows:
"9. It is not in dispute that the Society has not been constituted under an Act. Its functions like any other cooperative society are mainly regulated in terms of the provisions of the Act, except as provided in the bye-laws of the Society. The State has no say in the functions of the Society. Membership, acquisition of shares and all other matters are governed by the bye-laws framed under the Act. The terms and conditions of an officer of the cooperative society, indisputably, are governed by the Rules. Rule 56, to which reference has been made by Mr Vijay Kumar, does not contain any provision in terms whereof any legal right as such is conferred upon an officer of the Society.
10. It has not been shown before us that the State exercises any direct or indirect control over the affairs of the Society for deep and pervasive control. The State furthermore is not the majority shareholder. The State has the power only to nominate one Director. It cannot, thus, be said that the State exercises any functional control over the affairs of the Society in the sense that the majority Directors are nominated by the State. For arriving at the conclusion that the State has a deep and pervasive control over the Society, several other relevant questions are required to be considered, namely, (1) Howwas the Society created? (2) Whether it enjoys any monopoly character? (3) Do the functions of the Society partake to statutory Page 14 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 functions or public functions? and (4) Can it be characterised as public authority?
11. Respondent 2, the Society does not answer any of the aforementioned tests. In the case of a non-statutory society, the control thereover would mean that the same satisfies the tests laid down by this Court in Ajay Hasia v. Khalid MujibSehravardi. [See Zoroastrian Coop. Housing Society Ltd. v. Distt.Registrar, Coop. Societies (Urban).]
12. It is well settled that general regulations under an Act, like the Companies Act or the Cooperative Societies Act, would not render the activities of a company or a society as subject to control of the State. Such control in terms of the provisions of the Act are meant to ensure proper functioning of the society and the State or statutory authorities would have nothing to do with its day-to-day functions."The fact that cooperative societies are subject to the control of statutory authorities such as the Registrar, Joint Registrar, and the Government does not imply that the State exercises direct or indirect control over the society's affairs in a manner that is deep and all-pervasive."
20. Based on the aforementioned, it is now well established that a cooperative society does not fall within the purview of Article 12 of the Constitution solely by virtue of being under the jurisdiction of the Registrar of Cooperative Societies. Nonetheless, I shall now deal with the amenability of service matters of the Cooperative Societies to the jurisdiction of Art 226.
21. In Kulchhinder Singh v. Hardayal Singh Brar,12the Supreme Court adjudicated upon the fact whether a writ pertaining to service matters 12 AIR 1976 SC 2216 Page 15 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 can be entertained against the cooperative society. The relevant portion of the judgment is reproduced herein below:
"8. The question as to whether a cooperative society is a public authority has fallen for judicial notice and Amir Jamia [ILR 1969 Del 202] contains an elaborate discussion of the controversial topic covering decisions, English and Indian. It is also true that at least Madhya Pradesh (Dukhooram [Dukhooram Gupta v. Cooperative Agricultural Association Ltd., AIR 1961 MP 289] ) and Calcutta (Madan Mohan [Madan Mohan Sen Gupta v. State of W.B., AIR 1966 Cal 23] ) have considered whether a writ will issue against a cooperative society, simpliciter. KumkumKhanna [ILR (1976) 1 Del 31] deals with a private college governed by a university ordinance.
9. Many other rulings have also been brought to our notice, but we do not think it necessary elaborately to investigate these issues notwithstanding the fact that Shri Gupta, appearing for the contesting respondent, challenged each one of the grounds stabilising his submission on rulings of this Court, of the High Courts and the English courts.
10. The reason why we are not inclined to add to the enormous erudition on the point already accumulated in case law is that a close perusal of the writ petition will disclose that essentially the appellant is seeking merely to enforce an agreement entered into between the employees and the cooperative bank.
11. There is no doubt that some of the legal problems argued by Sri Ramamurthy deserve in an appropriate case jurisprudential study in depth, although much of it is covered by authority. But assuming, for argument's sake, that what he urges has validity, the present case meets with its instant funeral from one fatal circumstance. The writ petition, Page 16 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 stripped of embroidery and legalistics, stands naked as a simple contract between the staff and the society agreeing upon a certain percentage of promotions to various posts or an omnibus, all-embracing promise to give a quota to the existing employees. At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellant is that the remedy of Article 226 is unavailable to enforce a contract qua contract. We fail to see how a supplier of chalk to a government school or cheese to a government hospital can ask for a constitutional remedy under Article 226 in the event of a breach of a contract, bypassing the normal channels of civil litigation. We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service rule or statutory duty. What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or sovereign obligation or public function of a public authority. Private law may involve a State, a statutory body, or a public body in contractual or tortious actions. But they cannot be siphoned off into the writ jurisdiction.
12. The controversy before us in substance will turn on the construction and scope of the agreement when the claim to a quota as founded cannot be decided in writ jurisdiction without going back on well-settled guidelines and even subverting the normal processual law -- except perhaps in extreme cases which shock the conscience of the Court or other extraordinary situation, an aspect we are not called upon to explore here. We are aware of the wide amplitude of Article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by his short, though, wrong cut."Page 17 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
22. The Delhi High Court in Satyapal Singh v. The Delhi State Cooperative Bank13relied on KulchhinderSingh(supra)and held that the service matters of the cooperative society is not amenable to the writ jurisdiction since, there is no element of public duty involved. Such kinds of disputes are of private nature and do not fall within the ambit of the writ jurisdiction.
23. In Konaseema Co-operative Central Bank Ltd. v. N. SeetharamaRaju,14the Andhra Pradesh High Court held that bye-laws made by co-operative societies do not have the force of law. They are in the nature of contract, terms of contract, between the Society and its employees, or between the Society and its members. The relevant excerpt is produced hereinbelow:
"The bye-laws made by a co-operative society registered under the A.P. Co-operative Societies Act do not have the force of law. They are in the nature of contract, terms of contract, between the Society and its employees, or between the Society and its members, as the case may be. Hence, where a Society cannot be characterised as a 'State'/ the service conditions of its employees, governed by bye-laws, cannot be enforced through a writ petition. However, in the matter of termination of service of the employees of a co-operative society, Section 47 of the A.P. Shops and Establishments Act provides a certain protection, and since the said protection is based upon public policy, it will be enforced, in an appropriate case, by this Court under Article 226 of the Constitution. Ordinarily, of course, an employee has to follow the remedies provided by the A.P. Shops and Establishment Act; but, in an appropriate case, this Court will interfere under Article 226, if the violation of a 13 W.P.(C) 7462/2022; Del HC 14 AIR 1990 Andhra Pradesh 171 Page 18 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 statutory public duty is established. It is immaterial which Act of Rule casts such a statutory public duty.
Mandamus, certiorari, and prohibition are public law remedies. They are not available to enforce private law rights. Every act of a society which may be a 'State' within the meaning of Article 12, does not necessarily belong to public law field. A society/ which is a 'State'/ may have its private law rights just like a Government. A contractual obligations, which is not statutory, cannot be enforced by way of a writ petition under Article 226 of the Constitution. Prior to entering into contract, however. Article 14 operates, as explained by the Supreme Court in E.E. & C. Ltd. v. State of West Bengal, AIR 1975 SC 226 and RamanaDayaramShetty, (1979) 3 SCC 489 : AIR 1979 SC 1628."
24. From the aforementioned discussion, it has been established that, for an organization to be deemed as performing a public function, such function must be inherently associated with those performed by the State in its sovereign capacity. From the preceding discussion, there is no evidence on record to suggest that the Respondent/Society undertakes functions comparable to those exclusively carried out by State authorities. The Respondent/Society is a non-statutory entity that does not perform any public function. Moreover, the Respondent/Society does not hold any monopoly status conferred or mandated by law. Although the State may promote such entities as part of its social policy or economic development initiatives, this encouragement does not equate to the performance of a public function.
25. In the present case, the lack of State control over the management of the Respondent/Society significantly influences the conclusion that the Page 19 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 Respondent/Society does not fall within the definition of a public authority. The Respondent/Society operates under democratic control, and the ultimate authority regarding the service conditions of its employees lies with the management of the Respondent/Society.
26. Therefore, in thispetition, the Respondent/Society does not qualify as a "State" or "instrumentality of the State" within the meaning of Article 12 of the Constitution and is thus not subject to the jurisdiction of Article 226.
V. CONCLUSION:
27. In light of the comprehensive exposition of the law provided above, and given the absence of any pleadings by the petitioner to substantiate that the respondent qualifies as a State, it is deemed unnecessary to make any further observations on this matter.
28. However, the Government is instructed to take cognizance of the alleged irregularities in cooperative societies and banks. This Court has been inundated with numerous such cases, reflecting a systemic issue that requires urgent attention. The Government is, therefore, advised to take immediate and proactive measures to address and rectify these irregularities to ensure transparency, accountability, and proper functioning of these institutions.
29. The petitioner is hereby advised to approach the appropriate forum for the redressal of his grievance in accordance with the provisions of the Odisha Co-operative Societies Act.
Page 20 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41
30. The Writ Petition is not maintainable and is, accordingly, dismissed.
(Dr.S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 17th Dec., 2024/ Page 21 of 21