Bombay High Court
Narayan S/O Balaji Bhange vs Maharashtra State Co-Operative Land ... on 30 July, 1990
Equivalent citations: 1991(1)BOMCR469
JUDGMENT M. S. Ratnaparkhi, J.
1. The orders passed by the respondent No. 1 on 5-8-1983 (Annexures 3, 4 and 5) promoting the respondent Nos. 2 to 6 to Category No. 8 from Category No. 9 have been challenged in this writ petition. A mandate is sought from this Court directing the responding No. 1 to promote the petitioner in Category No. 8.
2. The fact giving rise to this litigation may be briefly stated as follows:
The petitioner was working with the respondent No. 1 as a supervisor and his initial appointment dates bank to 1969. At that time, the respondent No. 1 was not in existence and it was the Nagpur District Land Mortgage Bank which was the entry appointing him. He was further promoted as supervisor in 1971 by the old Land Mortgage Bank. In 1973, the respondent no. 1---Maharashtra State Co-operative Land Development Bank was formulated by the statute and all the District Land Mortgage Banks were amalgamated with the respondent No. 1, so that with effect from the date of amalgamation the different cadres in the District Branch became the cards of the respondent No. 1. It is the contention of the petitioner that though he was working in a higher cadre of a supervisor, the persons who were junior to him (particularly the respondent Nos. 2 to 6) came to be promoted to Category No. 8, whereas he was never considered for promotion. According to him, this actions on the part of the Bank is not only arbitrary, but discriminatory too. He, therefore, wants the promotion of respondent Nos. 2 to 6 to be quashed and a further mandate to the respondent No. 1 to promote him to Category No. 8. The respondent No. 1 by their reply opposed the claim. According to them the petitioner as well as the respondent Nos. 2 to 6 were in Category No. 9 after the amalgamation of the District Units. In or about 1983, a general policy of promotion was declared by the respondent No. 1 and according to the General Policy, three years confidential records of the respective incumbents were to be examined and in case there was remark that he was not fit for promotion, his claim for promotion could not be considered at all. It is their contention that the petitioner earned such remark, and therefore, his claim was not at all considered. Other respondents did not put their appearance at all. It was also contended that the respondent No. 1 is not a State within the meaning of Article 12 of the Constitution, and therefore, no writ could lie against it.
3. Mr. Deshpande, the learned advocate for the respondent No. 1 strenuously urged before us that the respondent No. 1 was not a State within the meaning of section 10 and hence no writ of any kind could be issued against it. He urged before us that the respondent No. 1 is a corporate sole and governed by the provisions of the Co-operative Societies Act. This proposition does not appear to be correct, inasmuch as section 112 of the Maharashtra Co-operative Societies Act specifically states that there shall be a State Agricultural and Rural Development Bank for the State of Maharashtra. Thus, the respondent No. 1 is definitely a creation of the statute and it cannot beside merely as a corporate sole within the meaning of the Companies Act. Sub-section (2) and (3) of section 112 and the further provisions in section 112-A and 112-B prescribed the constitution of the Bank itself. Section 113 of the said Act appoints the registrar as a Trustee for the purpose of securing the fulfilment of the obligations of the State Government Bank to the holders of debentures issued by it. There are also further provisions which need not be gone in details at this stage. Enough to point out that the respondent No. 1 is creature of the statute and it is also regulated by the statute. It may be that the original entity may have its own Bye-laws and even the new entity (respondent No. 1) may have its Bye-laws, but that does not change the character of the entity as far as the substance is concerned. The respondent No. 1 remains a creature of the statute. Its functions are defined by the statute itself. Its functions are more in the nature of public functions rather than the private functions. The close scrutiny of the subsequent sections of this Chapter (Chapter XI) would show that this Bank has been created by the statute for a particular purpose and some of the purposes are such which ought to have been discharged by the State itself. There can, therefore, be no doubt that the petitioner is a State within the meaning of Article 12 of the Constitution. The definition of the term "State" is inclusive and its scope is quite wide. If the scheme of Chapter XI is scrutinised, it would be apparent that it is discharging the public functions vis-a-vis the Society, and some of the functions which it is discharging now are functions previously of the State itself may be commercial or otherwise. It is definitely an authority within the meaning of Article 12 of the Constitution of India, though it may not be technically an instrumentality of the State. By and large, there should be no doubt that it comes within the definition of the term "State" within the meaning of Article 12 of the Constitution of India.
4. This point has been considered by the Supreme Court in Ajay Hasia v. Khalid Mujib, . The point raised in that case was very interesting. A society registered under the Jammu and Kashmir Registration of Societies Act, 1898 was formed and this society took the Government of India. The Regional College of Engineering, Srinagar was one of its 15 institutions. It was the contention of that of Engineering, Srinagar was one of its 15 institutions. It was the contention of that society that it was a private society registered under the Societies Registration Act and it was not a "State" within the meaning of Article 12 so that it could be amenable to any writ jurisdiction of the High Court. The Supreme Court took the review of the whole case law. In para 15 of the judgment it was observed:
"It is in the light of this discussion that we must now proceed to examine whether the Society in the present case is an "authority" falling within the definition of "State" in Article 12. Is it an instrumentality or agency of the Government? The answer must obviously be in the affirmative if we have regard to the Memorandum of Association and the Rules of the Society. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Utter 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 when the approval of the State and the Central Governments. The rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as 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 is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even 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 Central Government can 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 incharge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees State Government and by reason of the provision for approval, the Central Government also, have full control of the working of the society and it would not be incorrect to say that the society is merely a projection of the State and the Central Governments and to use the words of Ray. C.J., in Sukhdev Singh's case, , (supra) the voice is that of the State and the Central Governments and the hands are also of the State and the Central Governmental. We must, therefore, hold that the Society is an instrumentality or the agency of the State and the Central Governments and it is an 'authority' within the meaning of Article 12".
5. The Full Bench of the Andhra Pradesh High Court in Sri Konaseema Co-op., Central Bank Ltd. v. N. Seetharama Raju, A.I.R. 1990 A.P. 171, have considered the matter in detail though in another context. Some observations which can be found in paragraph 51 would be relevant for our purpose. The observations are as follows ;
"(i) If a particular Co-operative Society can be characterised as a 'State' within the meaning of 'Article 12 of the Constitution (applying the tests evolved by the Supreme Court in that behalf), it would also be an 'authority' within the meaning, and for the purpose, of Article 226 of the Constitution. In such a situation, an order passed by a Society against its employee in violation of the bye-laws, can be corrected by way of a writ petition. This is not because the bye-laws have the force of law, but on the ground that having framed the bye-laws prescribing the service conditions of its employees, the society must follow them is the interest of fairness. If it is left to the sweet will and pleasure of the society either to follow or not to follow the bye-laws, it would be inherently arbitrary, and may very likely give rise to discriminatory treatment. A Society, which is a 'State', has to Act in conformity with Article 14 and, for that reason, it will be made to follow the bye-laws.
(ii) Even if a Society cannot be characterised as a 'State' within the meaning of Article 12 even so a writ would lie against it to enforce a statutory public duty which an employee is entitled to enforce against the society. In such a case, it is unnecessary to go into the question whether the society is being treated as a 'person' or an 'authority' within the meaning of Article 226 of the Constitution. What is material is the nature of the statutory duty placed upon it, and the Court will enforce such statutory public duty". (The remaining portion is not material for our purpose).
6. The observations of the Andhra Pradesh High Court as reproduced above would leave no doubt that apart from the technical meaning of the terms "State", the Society which is discharging the public functions would be an authority within the meaning of Article 12 so that it is amenable to the writ jurisdiction under Article 226 of the Constitution of India.
7. The Single Judge of this Court took a similar view in Padubidri v. The Shamrao Vithal Co-op. Bank Ltd., 1989 Mh.L.J. 566 where in unequivocal terms it is held that the Shamrao Vithal Co-operative Bank Limited is a State within the meaning of Article 12 of the Constitution of India.
8. Thus the different characteristic which we find in this case do not permit as to accept the argument of Mr. Deshpande that the respondent No. 1 is not a "State" within the meaning of Article 12 of the Constitution and as such is not amenable in the writ jurisdiction. On the other hand the circumstances, (i) That the respondent No. 1 is a creature of the State and (ii) that it is discharging the public functions (which the State otherwise could have discharged through its agency) can have definitely the tendency to show that the respondent No. 1 is a State within the meaning of the Act. As such it is amenable to the writ jurisdiction of this Court.
9. This now brings us to the merits of the case. The petitioner has been working in the respondents No. 1 Bank since before its inception in 1973. After all the District Land Mortgage Banks were merged, a common cadre came to be formulated and petitioner was placed in Category 9. He was standing at Sr. No. 39, whereas the respondent Nos. 2 to 6 were standing at Sr. Nos. 40, 42, 44, 45 and 47 respectively. This was the position which prevailed prior to August 1983. In August 1983, promotions were made from Category 9 to Category 8 and the respondent Nos. 2 to 6 (who were admittedly junior to the petitioner) came to be promoted vide orders Annexures 3 to 5. Undisputedly, the petitioner did not find himself in the list of fortunate promotees.
10. The defence which has been raised by respondent No. 1 is that, while recommending persons for promotion from Category 9 to Category 8, the confidential reports of the incumbents for three preceding years were examined and the persons who were considered "not fit for promotion" were excluded. While elaborating this defence, it was urged that in 1979-80, the petitioner earned a bad remark for which he was warned. Even in the subsequent year 1982-83, a warning was given to him. This is in short, according to the respondent No. 1 was a reason for not considering the petitioner. For supporting the defence, the policy resolution adopted by the Bank (Resolution No. 40 at Annexure 1) was brought to our notice. What was urged by Mr. Deshpande was that in view of the promotion policy, the Bank did not consider the petitioner as fit for promotion, and therefore, his claim was not at all considered.
11. Before scrutinising this point, it will be necessary to refer to an undisputed factual position. We have an order issued by the respondent No. 1 on 16-10-1984 whereunder the petitioner was appointed as a Recovery Officer and necessary powers under section 156 of the Maharashtra Co-operative Societies Act were conferred on him. He was appointed as Special Recovery Officer at Katol. The Respondent Bank then issued another order on 18-10-1985 whereby he was appointed as a Special Recovery Officer. There is no much dispute that "Special Recovery Officer" come within category-8. On the other hand, we have no record the orders passed by the respondent No. 1 on 10-3-1987 and 30-6-1987 which show that 20% of the basic salary is given as additional pay to the petitioner for doing the work in the higher category. It is true that the orders dated 18-10-1985 and 16-10-1984 show that the appointment of the petitioner was for the period till the recovery work comes to an end. The circumstances emerging from these documents are that long back in 1984, the petitioner was appointed in a post which was in category 8. The word used is "appointed". He was not asked to do the higher work in addition to his own duties. This means that inspite of the adverse remarks, he was considered fit to be appointed in the cadre which was higher than his own. It is not the case of the Bank that they were short of persons during that year so that they could not find any other person than the person already condemned. The case is to be examined particularly on this background. It is enough to point out at this stage that inspite of the adverse remarks in 1979-80, 1980-81 and 1981-82 the petitioner was appointed to the higher grade. It will be proper at this stage to turn to the policy adopted by the Bank. Clause (B) of Resolution No. 40 reads:
"Those employees who have been given any punishment except warning are not to be considered for promotion in the time interval of 1 year from the date of punishment".
Then comes Clause (D) which reads as follows :
"At the time of granting promotion it is necessary that the employee has in his confidential report for the past three consecutive years the remarks to the effect that employees is qualified for the promotion.
If our three reports any one report contains the remarks disqualified for promotion that the employee should not be considered for promotion".
12. Mr. Deshpande, the learned Counsel for the respondent No. 1 strenuously urged before us that here is an employee in respect of whom the superior authority passed a remark that he was unsuitable for promotion. The confidential report for the year 1979-80 was produced for our perusal. In part II he earns 'B' grade. In part III, he earns 'C' grade and in part IV he is reported not fit to be considered for higher post. This is the only confidential report that has been put up before us for our perusal. We are now called upon to consider all these circumstances together. Here is a person who is reported to be not fit for promotion and inspite of this, he has been appointed in the higher grade by the respondent No. 1. To repeat it once again, it is not the case pleaded before us that there were no other persons except the petitioner. The petitioner continues to work in that post for years together and it is only in 1987 that he is paid that allowance of 20% of the basic salary for doing the additional work for the lapse of the year 1981-82 the petitioner has been issued warning. On 8-2-1983 also a warning was issued. This means that for the lapse he has already been punished because warning comes only as a punishment. This clearly shows that whatever lapses were there were adequately dealt with. The matter is closed then and there. Clause No. 2 of the Policy that we have referred to above shows that warnings should not be considered as punishment at the time of promotion.
13. We have thus a case before us, that a person who was working in Supervisors' cadre before the amalgamation of the Bank is a person senior to the respondent Nos. 2 to 6. He was warned in 1979-80. He has been promoted to category 8 in 1984 and he has been continued in that post of a Special Recovery Officer even till today. What this Court is called upon to decide is, whether his supervision in 1983 could be valid. Looking to the conduct of the respondent No. 1 themselves in promoting the him in 1985. If he could be promoted in 1984, there was no reason not to consider him for promotion in 1983 when respondent No. 1 was neither fair, nor just in not promoting the petitioner to the post. It is true that the petitioner has sought a writ from this Court quashing the promotions of respondent Nos. 2 to 6. But we do not propose to quash that. It would be enough if the injustice done to the petitioner is removed. From that point of view, we would direct the respondent No. 1 to give a deemed date of promotion to the petitioner in category 8 and that date shall be earlier than the date of promotion of Respondent Nos. 2 to 6. He will be entitled to all the monetary and consequential benefits. The petition is allowed to this extent and the Rule is made absolute in terms above. There shall, however, be no orders as to costs.