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The Organizer,Dehri C.D. & C.M. Union ... vs The State Of Bihar & Ors on 6 August, 2013

Bench: Chief Justice, Ashwani Kumar Singh

                      IN THE HIGH COURT OF JUDICATURE AT PATNA
                                    Letters Patent Appeal No.1005 of 2011
                                                           In
                                Civil Writ Jurisdiction Case No. 12878 of 2003
                  ======================================================
                  The Organizer, Dehri C.D. & C.M. Union Limited Fazalganj, Sasaram,
                  District-Rohtas
                                                       .... .... Respondent/Petitioner/Appellant
                                                        Versus
                  1. The State of Bihar
                  2. The Secretary, Co-Operative Department, Bihar, Patna
                  3. The Registrar, Co-Operative Societies, Bihar, Patna
                  4. The Joint Registrar, Co-Operative Societies, Patna Division, Patna
                  5. The District Co-Operative Officer, Rohtas, Sasaram
                                                        ....... Respondents/Respondents 1st Party
                  8. Nawal Kishore Singh, son of Late Madho Singh, resident of village-
                  Khorampur, P.S.- Dhanarua, District- Patna.
                  9. Sushil Kumar Sinha, son of Shri Satya Narayan Prasad, resident of
                  village- Darihat, P.S.- Ayoratha, District- Rohtas.
                                                    .... .... Respondents/Respondents 2nd Party
                  ======================================================
                  Appearance :
                  For the Appellant       :      Mr. Vindhyachal Singh, Advocate.
                                                 Mr. Rameshwar Singh, Advocate.

                  For the State          :       Mr. Lalit Kishore, P.A.A.G.
                                                 Mr. Vikash Kumar, A.C. to PAAG.

                  For the respondent nos. 8-9:
                                        Mr. T.N.Matin, Sr. Advocate.
                                        Mr. Rajni Kant Singh, Advocate.
                  ======================================================
                  CORAM: HONOURABLE THE CHIEF JUSTICE
                         and
                         HONOURABLE MR. JUSTICE ASHWANI KUMAR SINGH
                  ORAL ORDER

                  (Per: HONOURABLE THE CHIEF JUSTICE)

17   06-08-2013

This Appeal under Clause 10 of the Letters Patent has been preferred by the Respondent No. 7, Organizer, Dehri C.D. & C.M. Union Limited (hereinafter referred to as 'the Society'), a Society registered under the Bihar Co-operative Societies Act, 1935 (hereinafter referred to as 'the Act') against the order dated 4th February 2010 made by the learned single Judge in CWJC No. 12878 of 2003.

The Society is engaged in distribution of L. P. Gas cylinders. For certain financial irregularities committed by two of 2 Patna High Court LPA No.1005 of 2011 (17) dt.06-08-2013 2/5 its employees, the respondent nos. 8 and 9 herein, the said respondents were removed from service under order dated 1 st October 2003 made by the Administrator of the Society.

Without referring to chequred history of the Letters Patent Appeals and the Review Petition preferred by the appellant, we may note that the learned single Judge has entertained the writ petition against a purely private organisation on the premise that at the relevant time, the Managing Committee of the Society was superseded and was managed by an Administrator appointed by the State Government. The Administrator being a servant of the State, a petition under Article 226 of the Constitution against the order made by the Administrator was maintainable. The learned single Judge has relied upon a Full Bench judgment of this Court in the matter of Rajendra Prasad Sah vs. The State of Bihar & Ors. (F.B.); {2000(4)PLJR 273}. We are also shown the judgment of the Division Bench in the matter of Nand Kishore Rai & Ors. Vs. The State of Bihar & Ors.; {1988 PLJR 1065}. In the matter of Nand Kishore Rai (supra), the Division Bench of this Court has held that though the respondent was a Co-operative Society not amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution, the order impugned having been made by a Government servant, the Administrator; while the Managing Committee was under supersession, a writ petition under Article 226 was maintainable. Similar view has been expressed by the Full Bench of the High Court in the matter of Rajendra Prasad Sah (supra) in respect of the Bihar State Co-operative Marketing Union Limited (BISCOMAUN), a Co-operative Society.

We are in respectful disagreement with the aforesaid view expressed by the Full Bench and the Division Bench of this Court.

The Hon'ble Supreme Court has, as early as in the matter of Bangalore Water Supply & Sewerage Board v. A. Rajappa and Others etc., {AIR 1978 SC 969}, settled the principles which will determine whether or not an organisation is a 'State' within the meaning of Article 12 of the Constitution. The tests, largely speaking, are two fold. First; the hold of the Government in management of the organisation and second; the functions performed by such organisation. If the Government has a substantial stake in the organisation and in its management and the organisation performs public functions, such organisation is held to be an instrumentality of the State and a 'State' within the meaning of Article 12 of the Constitution. The aforesaid principle has been further analysed over the years, under several judgments.

In our opinion, the supersession of a Managing Committee of an organisation under some statutory provisions and the Government stepping in to replace the Managing Committee would neither change the constitution of the organisation nor its functions, the key tests. If the Administrator happens to be a Government servant that would not amount to the Government taking over the management of the organisation or Government having a substantial hold over the management of the organisation.

In the present case, the appellant is a Society registered under the Act. For better management of the registered society, Section 41(5) of the Act enjoins the Registrar, Co- operative Societies to appoint an Administrator to replace the Managing Committee of a society. In absence of a duly elected Managing Committee, the Registrar, Co-operative Societies, under his order dated 19th April 2001 made in exercise of power conferred by Section 41(5) of the Act, appointed the District Co-

operative Officer, Rohtas to be the Administrator of the Society. The District Co-operative Officer in his capacity of the Administrator of the Society lodged F.I.R. against the writ petitioners for the financial irregularities allegedly committed by them and also took disciplinary action against them. The District Co-operative Officer performed those functions as would be performed by the Managing Committee of the Society and not as a Government officer. The supersession of the Managing Committee of the Society and the appointment of the Administrator both are fortuitous circumstances, which do not affect either the constitution of the Society or the functions performed by the Society. If there were no alteration in the constitution of the Society or its functions, the Society, which was otherwise not a 'State' within the meaning of Article 12 of the Constitution, would not become instrumentality of the State or for that matter a 'State' within the meaning of Article 12 of the Constitution.

In our opinion, in absence of the duly elected Managing Committee of the Society, appointment of a Government servant as an Administrator is a mere fortuitous circumstance which has no effect upon the constitution or the functions of the Society. If, having regard to its constitution and its functions, the Society is not an instrumentality of the State, it does not become instrumentality of the State merely because the Administrator happens to be a Government servant.

If we follow the above referred two decisions of this Court, it would result into a ludicrous situation. Any society which is not a 'State' would become a 'State' within the meaning of Article 12 of the Constitution while it is under the management of the Administrator and the Administrator happens to be a 5 Patna High Court LPA No.1005 of 2011 (17) dt.06-08-2013 5/5 Government servant. Thus, intermittently the society will not be a 'State' if it is managed by the duly elected Managing Committee or is under the control of the Administrator who is not a Government servant, but will become a 'State' if the Administrator is a Government servant. We do not suppose any organisation can intermittently be a 'State' depending upon the fortuitous circumstances.

The matter, having been decided by the Full Bench of this Court, calls for a review by a larger Bench of five judges. The Appeal is referred to a larger Bench of five judges for decision on the following point.

Whether or not the co-operative society registered under the Act, which by its constitution and its functions is not an instrumentality of the State or is not a 'State' within the meaning of Article 12 of the Constitution would be deemed to be an instrumentality of the State or a 'State' within the meaning of Article 12 of the Constitution while it is under the control of an Administrator appointed under Section 41(5) of the Act, if the Administrator happens to be a Government servant.

The learned advocate for the appellant will furnish three additional sets of paper book within 15 days from today.

The matter be posted for hearing before the larger Bench on 12th September 2013 at 2:15 P.M. (R.M. Doshit, CJ) (Ashwani Kumar Singh, J) Sujit/-