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Dayandeo Dattatraya Kale and ors. Vs. State of Maharashtra and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberWrit Petition Nos. 2892 and 2900 of 1991 with Writ Petition Nos. 24 and 460 of 1992
Judge
Reported in1995(3)BomCR86; (1995)IILLJ597Bom; 1995(2)MhLj930
AppellantDayandeo Dattatraya Kale and ors.
RespondentState of Maharashtra and ors.
Excerpt:
labour and industrial - validity of selection - writ petition seeking cancellation and appointment of 481 clerks and 82 persons by respondent - women folk was not invited and sex discrimination was made - petitioners were guided by their own assumptions and not by cogent evidences - even if it was assumed that grievance of petitioner was legitimate by upsetting of selection large number of workers would be thrown out - after having served 2 or 3 years of continuous services employees were entitled to claim permanency - held, selection not to be set aside. - - 1 to 8 are bound by the provisions of the constitution and must, therefore, see that the sources are distributed evenly so as to serve the common good at large. the list of candidates called from employment exchange and district.....halbe, j.1. under the directions dated 2.5.1994 by the supreme court, these writ petitions are taken up for disposal. as per the directions, these writ petitions along with two other writ petitions namely nos. 2055 of 1992 and 2921 of 1993 were directed to be disposed of before 30th june 1994. however, writ petition nos. 2055 of 1992 and 2921 of 1993 are not taken up for consideration along with the above writ petitions in view of the fact that the point involved in these two writ petitions is somewhat different from the points which have been raised in the above writ petitions. 2. the petitioners have sought for cancellation of selection and appointment of 481 clerks and 82 peons by respondent no. 8. the ahmednagar district central co-operative bank ltd. in the month of august 1991 on.....
Judgment:

Halbe, J.

1. Under the directions dated 2.5.1994 by the Supreme Court, these writ petitions are taken up for disposal. As per the directions, these Writ Petitions along with two other writ petitions namely Nos. 2055 of 1992 and 2921 of 1993 were directed to be disposed of before 30th June 1994. However, Writ Petition Nos. 2055 of 1992 and 2921 of 1993 are not taken up for consideration along with the above writ petitions in view of the fact that the point involved in these two writ petitions is somewhat different from the points which have been raised in the above writ petitions.

2. The petitioners have sought for cancellation of selection and appointment of 481 clerks and 82 peons by respondent No. 8. The Ahmednagar District Central Co-operative Bank Ltd. in the month of August 1991 on the ground that the interviews that were held were nothing but a farce; that the selection of the candidates or the posts of clerks and peons had already been secretly planned by the Directors of the Bank; that women folk was not invited for the interviews and thus there was practice of sex discrimination and accordingly, the said selection and appointment of the clerks and peons were contrary to the constitutional mandate. The further prayer is that the study group consisting of eminent citizens should be appointed and ways and means of recruitment should be devised and accordingly, the selection should take place by the committee of those persons. There should be appointed a Co-operative Service Selection Board on the same lines of Sub-ordinate Selection Boards and that would ensure fair, free and unbiased selection of meritorious candidates.

3. It may be stated that the main writ petition that is argued before us is Writ Petition No. 2892 of 1991 wherein the necessary affidavits and documents have been tendered. The documents and affidavits in other writ petitions, which are not taken up for considerations, but which are rather common to all these writ petitions, shall be considered while discussing the merits of these writ petitions. The petitioner Nos. 1 and 2 claimed to have sponsored this Writ Petition No. 2892 of 1991 as social workers whereas petitioner No. 3 has joined this petition because he was not selected although interviewed. The petitioner No. 2 is a practicing lawyer at Ahmednagar. She is mainly interested in social work aimed at promoting the cause of women folk. Petitioner No. 3 passed his B.Sc. examination and claims that he was fully eligible for selection to the post of Clerk with respondent No. 8 Bank but was wrongfully by-passed.

4. The respondent No. 1 is the State of Maharashtra. The Respondent No. 2 is the Secretary, Co-operative Department in the Government of Maharashtra. The respondent No. 3 is the Social Welfare Secretary in the State Government whereas respondent No. 4 is the Secretary in the Employment Department of the State Government. Respondent No. 5 - Maharashtra State Co-operative Bank is the apex co-operative bank registered under the Co-operative Societies Act where as respondent No. 6 has been impleaded since it is the Maharashtra Sakhar Sangh registered under the societies Registration Act and also under the Maharashtra Co-operative Societies Act, 1961. The respondent No. 7 is the National Bank for agricultural and Rural Development whereas respondent No. 8 is the Ahmednagar District Central Co-operative Bank, which is registered as a co-operative society under the Co-operative Societies Act.

5. According to the petitioner, NABARD has been established for providing credit for promotion of agriculture, small scale industries etc. for the purpose of securing the integrated rural development and prosperity of rural areas. The respondent No. 15 - Maharashtra State Co-operative Bank is under the control of respondent No. 7 - NABARD - whereas respondent No. 8 is financed by NABARD to the extent of crores of rupees in the form of loans and advances. According to the petitioners, respondents Nos. 1 to 4 come within the definition of 'State' whereas the respondents Nos. 5 to 8 are the other authorities - State instrumentalities under Article 12 of the Constitution of India and are, therefore, amenable to writ jurisdiction. The respondents Nos. 1 to 8 are bound by the provisions of the Constitution and must, therefore, see that the sources are distributed evenly so as to serve the common good at large.

6. In 1991 the Board of Directors of the respondent No. 8 Bank passed a resolution for recruitment of 350 clerks and 50 peons although their financial condition did not permit such mass recruitment. The Directors are the sugar barons and are in one way or the other connected with political circles and the different limbs of the Government. They are also the leaders in the filed of co-operation and some of them have been either Members of Parliament of Members of State Legislature. They, therefore, decide to employ their close relations in the Bank and it is alleged that the vacancies were systematically distributed amongst them and also the Director of Employment, District Deputy Registrar of Co-operative Department and other Government Officers. The secret list was prepared before hand and on the basis of the so called interviews dated 18th August 1991, the selection was officially confirmed of these candidates. The others were interviewed but obviously for no purpose because they did not have any chance of selection as they had no God fathers in the Selection Board.

7. The petitioners submitted that the members of the Managing Committee of respondent No. 8 had illegally received Rs. 35,000/- to Rs. 40,000/- from each candidate and their names were obviously included in the secret selection list and the interviews were not only fake and factitious but they were essentially a farce, to mislead the public at large. The list of candidates called from Employment Exchange and District Social Welfare Officer, Ahmednagar was virtually ignored and the candidates, who were not recommended by any of the above offices, were allowed to attend interviews and this was available in the letters dated 23rd August 1991 and the replies dated 27th August 1991. Both the District Employment Officer and District Social Welfare Officer stated that the candidates, who were not recommended, were selected; that the names of the lady candidates were not called and that these offices not their representatives were allowed to attend interviews which were held at 14 places simultaneously for which 14 Selection Committees were appointed. According to the petitioners, the interviews were held on 18th August 1991 at 14 centers and the unskilled persons and laymen were appointed at the costs of the candidates who had necessary merits to work as clerks and peons. The petitioner No. 3 Incas has contended that he was registered with the District Employment Officer but his name was not recommended. However, he attended the interview and was interviewed by the selection penal on 18th August 1991 but the said interview was nominal and for namesake.

8. In regards to the previous selection, it is contended that on 3rd June 1990, appointment letters were issued to 13 male candidates without any interview and that the recruitment was in contravention of the Government Circular providing that such appointments should not be made without previous permission of the Government and District Deputy Registrar, as the delegate of the Government. When a grievance was made to that effect, a climate of fear and intimidation amongst social workers and unemployed candidates was generated and they were threatened with dire consequences. The petitioners alleged that the members of the Managing Committee have accumulated lakes of rupees from the candidates and that the selection is mala fide, illegal and opposed to morals. Similar recruitment were made in the years 1990, 1991 and 1992 and same should be declared as illegal. The petitioners have contended that a comprehensive selection procedure should be devised in the co-operative sector and that the selection board should be on the lines with the Subordinate Selection Board constituted under the law. This would eliminate corruption, favoritism and mal-practices.

9. According to the petitioners, the respondent No. 8 is the State; the same is financed by the Government and that the same is under complete control of the Government and hence the selection of the above candidates made in contravention of the Government directives, should be quashed. We may here indicate that all the selected candidates have been made parties by the petitioners under the orders of the Court. The petitioners have accordingly prayed for quashing this recruitment and have sought for appointment of proper Board for selection of the candidates. The exclusion of the female candidates also invites breach of the Constitution under Articles 15 and 6 and this is an additional ground to quash the selection. This is on the basis of the fact that the Bank employment is a public employment.

10. On behalf of respondent No. 8, three affidavits have been field. One is dated 7.3.1992 by Yeshwant Deorao Bhandare, the Managing Director; the other is dated 17-6-1994 by Bhausaheb Bhikaji Kothari, the Managing Director of respondent No. 8 and their third is dated 23.6.1994 by Deputy General Manager Sahebrao Jaganath Dhumal. They are considered together. According to respondent No. 8 is not the State within the meaning of Article 12 of the Constitution. It is also not a local authority or any other State instrumentality. The respondent No. 8 is a federal society defined under the Maharashtra Co-operative Societies Act and that respondent No. 8 advances loans to individuals against their deposits of against gold and other security. This is with a view to provide finance to the members. The employees are recruited on the basis of contracts and that the respondent No. 8 does not receives any grant, financial assistance or other aid from the State or other State finance agencies. The respondent No. 8 is carrying on the business of banking for the benefit of customer and hence the employment with the bank is not public employment. It is a Bank defined in section 2(10) of the Maharashtra Co-operative Societies Act. The decisions are taken by the members and that there are only Government guidelines for efficient working of the Bank.

11. The allegations regarding payment of Rs. 35,000/- to Rs. 40,000/- by the candidate to the members of the Managing Committee have been stoutly denied. It is, however, admitted that the first resolution passed on 25th June 1991; that the concerned officers were requested for list of the registered candidates with them; that the interviews were held on 18th August 1991 and that each panel comprising of one Director and two employees was formed at different places. It is also claimed that the representatives of the Government nominees have attended that selection. As many as 2277 clerks and 495 peons were interviewed and only those who had merits were selected. Quite a sizable number of them are graduates. It is denied that those vacancies were filled by those candidates who are the close relations of the Directors and whose interviews were nominal. As the employees were not made parties, it was contended that they were the necessary parties who were likely to be affected by these writ petitions. We may, however state that all the employees have been made the respondents.

12. Regarding the interviews, it is contended that the questionnaire was circulated so as to ascertain the common merits standard of the candidates. Regarding the female candidates, it is contended that the places where the candidates were to be appointed were far away from Nagar; that those places had no residential accommodation; that the offices at those places had no sanitary arrangements for the female. There was also no police station or out pot at those places and on account of this there be a feeling of insecurity for the female candidates and hence the names of female candidates were not called for. At the meeting of 21st August 1993, the Selection Committee met and decided upon these candidates for appointment on the basis of their merits.

13. It is further contended that at the time of interview, the District Deputy Registrar, the Employment Exchange Officer were intimated and that they were parties to these proceedings right from the first meeting held on 25th June 1991. Hence there was no question of taking permission. The concerned officers signed the selection list and approved the minutes of the first meeting. There was manifest consent by the Government nominees, whose permission was contemplated under the Government Resolution.

14. On the question of control by the Government, it is contended that the authorised share capital of respondent No. 8 Bank is Rs. 15 Crores out of which Rs. 12.65 Crores is the paid up capital for the year 31.3.1994. Out of that capital, share of the State is only Rs. 69 lakhs. The State was given dividend for this share holding and there was, therefore, no question of any control or ownership by the State. Under section (10) read with 2(13) of the Act, it is manifest that the Bank is subject to the regular control by the Reserve Bank under section 5(1)(b) of the Banking Regulation Act. This is a sort of regulatory control in order to inculcate financial discipline but this cannot tantamount to Bank being called a State.

15. Regarding female candidates, it is contend that the Bank is not subject to fundamental rights under Article 14 and 16 because the employment is not the employment under the State or public employment. The petitioners, more particularly, petitioners Nos. 1 and 2, have no direct connection with this employment. The petitioner No. 3 has surrendered to the interview and therefore, the petition is liable to be dismissed. As regards the recruitment, it is stated that with the expansion in banking operations, and with the retirement of several employees in sight, the resolution was passed by the bank on 25.6.1991. Vide letter dated 26.6.1991, District Employment Exchange Officer, Social Welfare Officer and the Project Officer of the Adiwasi Welfare were asked to send the lists of candidates registered with them. They forwarded the lists on 24th July 1991 and 26th July 1991. Adiwasi Welfare Officer sent his list on 8th July 1991. The interviews were fixed on 18th August 1991 and as there were many talukas in Nagar district, it was decided that in order to save the expenses of the poor candidates, the interviews should be held at 14 places. The Selection Board for each place comprised of one Director and two employees viz. Development Officers. The questionnaire was prepared and circulated to the panel members so as to ascertain the merit of candidates to be interviewed. It is also contended that on 7th August 1991, the District Employment Exchange Officer, the Social Welfare Officer were informed that the interviews were to be held on 18th August 1991; that they should attend those inter views personally or depute their representative.

16. On the basis of this programme, the interview were held on 18th August 1991 and candidates of merit were selected. 129 recruits are post graduate. The performance data of the candidates was fed to the computer and the merits list of 481 clerks and 81 peons was accordingly drawn. Thus all the necessary precautions were observed in selection of the candidates. There was neither favoritism nor corruption this affair. The allegation regarding payment of bribe to the Director has also been stoutly denied. We may here indicate that the amount of bribe or under table payments in various petitions are different. In one petition, this amount is about Rs. 40,000/- whereas in other, it is Rs. 45,000/- and in third it is Rs. 50,000/-. This would show that the pleading in this behalf is most uncertain and, therefore, doubtful. Specific allegations regarding the relations of one Deshpande, District Employment Exchange Officer being selected, is also denied. The grievance of one Khetre that he was nominally interviewed is also denied. Regarding the previous list of 1990, it is contended that those candidates were not given appointments because the election of Board of Directors was in progress. Even the impugned recruitment was postponed because of the said election. Regarding the financial control, it is stated that the loan of Rs. 113 Crores secured by respondent No. 8 from the Maharashtra State Co-operative Bank is covered by the securities worth double that amount. For all these reasons, respondent No. 8 has contended that the petition deserves to be dismissed.

17. There is an affidavit by Madhukar Sakharam Khotkar dated 18th June 1994 who is the General Secretary of Ahmednagar District Central Co-operative Bank Employees Union. According to him, this is an union recognised under the Bombay Industrial Relations Act and that this union represents all the employees. Khotkar has practically adopted the same stand taken by respondent No. 8. According to him, the Bank is not the State. The employment is not public employment; that the recruitment took place after the proper procedure; that the interviews took place at 14 places because of peculiar circumstances indicated by the respondent No. 8. It is also contended by Khotkar that the petitioners have no interest in this employment and the petition deserves to be dismissed.

18. The respondents Nos. 1 and 2 have filed affidavit of one Subhash Dondiram Mane, District Deputy Registrar, Co-operative Societies, Ahmednagar. According to Mane, the Government of Maharashtra by Notification No. DCB-1280/69790/(937)/JI dated 29th May 1981 had issued directions under section 79A of the Act barring the recruitment of staff in cooperative banks without prior approval of Commissioner of Co-operation and Registrar of Co-operative Societies, Maharashtra State. By the Notification No. VIBHAG/1586/CR/27/22 dated 30th April 1986. It was directed that the co-operative institutions employing more than 10 persons should call for list of candidates from Employment Exchange, Social Welfare Department and Tribal Welfare Department and that the intimation of interviews should be given to the candidates before one month from the date of interview. Vide Government Notification No. DCB/2881/45200/CR-1090/22 C dated 8th August 1989, it was directed that the backlog of backward class people should be completed and till then Bank should not recruit any new candidate without prior permission of the District Deputy Registrar, Co-operative Societies. According to Mane, all these resolutions have not been followed and that no previous permission was taken for recruitment of clerks and peons. According to him, even the names of lady candidates were not called. There was no notice given in local paper about this recruitment. The candidates who were not recommended, were also interviewed and selected. The respondents Nos. 1 and 2 have thus supported the petition.

19. There is also on record counter affidavit by one Dayandeo Dattatraya Kale petitioner No. 1 - who has cited the names of several candidates related to the Directors or the Government Officers. According to him, the relation of Mane, i.e. his real brother has been recruited. The son of district Deputy Registrar was also selected. The Zilla Parishad President who is Director, has also got his nephew selected and this was done by paying Rs. 40,000/- to Rs. 45,000/- for the posts of clerk and Rs. 15,000/- for the posts of peons. According to Kale, when the fundamental right of the petitioner or the eligible candidates has been breached, the writ under Article 226 of the Constitution is clearly maintainable. It is also stated in the said affidavit that the Bank is financed by the Government and that the Government has effective control in the affairs of the Bank. There are other recitals to which reference does not appear to be necessary. The same have appeared in the foregoing paragraphs.

20. To the facts of other writ petitions, we shall come later but it will have to be stated that the main bone of contention raised by respondent No. 8 Bank is that the Bank is not the State or the State instrumentality or any other local authority as envisaged under Article 12 of the Constitution. For this purpose, there are catena of decisions which have been cited on behalf of the respondent No. 8. The counsel for respondent No. 8 has taken us through various rulings and they may be referred in brief. In the case of Mohinder Singh & Others v. O. P. Khatri and others reported in Labour Law Journal 1994, 888 the Delhi High Court held that the co-operative societies registered under the Delhi Co-operative Societies Act, 1972 did not fulfill the tests laid down by the Supreme Court in the case of Ajay Hasia v. Khalid Mujib reported in : (1981)ILLJ103SC and in the case of R. D. Shetty v. International Airport Authority of India reported in : (1979)IILLJ217SC . It is purely a private co-operative society although registered under the Act. The bye-laws of the society do not meet any of the conditions mentioned for constituting the society as the State. It is, therefore, not the State. The same view is taken by the Gujarat High Court in the case of Shahabuddin Chaudhari v. State of Assam reported in : (1994)ILLJ1028Guj . The Madhya Pradesh High Court took the similar view in the case of Dinesh Kumar Sharma v. M. P. Dugdha Mahasangh Sahakari Maryadit reported in 1994 LLJ 513. The Supreme Court in : AIR1977SC112 in the case of Nayagarh Co-operative Central Bank v. Narayan Rath did not agree with the view of the Orissa High Court that the co-operative society is a State. The Supreme Court observed :-

'The High Court has dealt with the question whether a writ petition can be maintained against a co-operative society but we are inclined to the view that the observations made by the High Court and its decision that such a writ petition is maintainable, are not strictly in accordance with the decision of this Court.'

21. In : (1956)ILLJ242All in the case of Dalel Singh v. Honorary Secretary, Co-operative Union the Court observed that the co-operative societies are no doubt creation of Statute but just like any other joint stock company. The Registrar is given certain powers of general supervision over the societies and he has power to hold enquiries in the constitution, working and financial condition of the society but this power can only be exercised in cases where the entire working of the society is defective and it has been given to protect the interest of the share holders and those who have to deal with the society. This does not however mean that the Registrar has the power to interfere in the day to day administration of the society. Therefore, the Registrar cannot be deemed to be the head of the co-operative society and he should not be deemed to have the power to interfere in the matters of appointments and dismissal of its employees. The State Government has still less powers to do anything in the matter. The writ of certiorari cannot be issued against the Secretary of the Co-operative Union, dispensing services of the petitioner.

22. This Court in 1993 MLJ 1 in the case of Shamrao Vithal Co-operative Bank Ltd. v. Padubidri Patabhiram Bhat and others held that :

'A co-operative society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 and under section 103(1) of the Multi State Co-operative Societies Act, 1984 which carries on the business of banking and is, therefore, governed by the Banking Regulation Act, 1949 does not fall within the expression 'State' under Article 12 of the Constitution of India. Under the general legislation dealing with co-operative societies and also under the special legislation dealing with multi state co-operative societies, there are clear provisions which indicate that these societies have to be run on co-operative principles. Final authority vests in the members of the societies. Such societies cannot be considered as instrumentalities of the State. Similarly, every organisation which carries out a function which is of public importance does not necessarily become 'State' under Article 12. Conferment of 'Statehood' depends upon various factors also, such as the nexus of such organisations with the State, the extent of State control, whether it is entirely financed by the State or by private individual, whether the same function was originally carried out by a Department of the State and so on. Banking is a function of public importance, Nationalised banks do carry out these functions under the control of the State. But that does not mean that Banks which are not so controlled, or banks which are set up by private organisations or co-operatives societies become 'State' under Article 12 of the Constitution of India.'

The petitioner Bank in that writ petition was registered under the Maharashtra Co-operative Societies Act and this court, speaking through the Full Bench, observed that the Bank was not the State. The Court also found that there was no deep and pervasive control of the government in the affairs of the petitioner Bank.

23. We feel that in the case of Kohaseema Co-operative Bank v. V. N. Sharam Raju reported in A.I.R. 1990 A.P. 171, the High Court of Andhra Pradesh has considered this aspect at length and has formulated this decision so as to establish that the Cop-operative Bank is not a State instrumentality. They are reproduced as below. :-

'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 the Government.

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 the governmental character.

It may also be a relevant factor whether the corporation enjoys monopoly status which is the State conferred or State protected.

Existence of 'deep and pervasive control' may afford an indication that the corporation is a State agency or instrumentality.

If the function of the corporation 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.

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.'

24. We may here point out that neither the petitioners nor respondents Nos. 1 to 7 have been able to point out that the entire share capital of the bank is financed by the Government; that the financial assistance is of such extent that almost the entire expenditure is made by the Government to recapitulate what has been contended by respondent No. 8, the share capital of the bank is Rs. 15 Crores, out of which Rs. 12.65 Cores is the subscribed capital. The Government share is only Rs. 69 lakhs for which the Government receives the dividend. the deposits of the bank are of Rs. 278 Cores and the loan of Rs. 113 Cores from respondent No. 5 is covered by the security deposits. In all the affidavits filed on behalf of the respondent No. 8, it is categorically stated that the bank does not receive any financial aid; that there is no State participation in the expenditure by the bank. On the other hand, the affairs of the bank are vested in the members of the bank; that the day to day business of the bank is carried out through the Managing Committee and the officers of the bank. We have therefore, no hesitation in holding that the respondent No. 8 is not financed or aided by the Government; that no part of the expenditure is met by the Government. It must also be stated that the functions performed by bank are not public functions and the same has been decided in the case of Shamlal Vithal Co-operative Bank (supra). To this, we shall turn later while considering the submission of the petitioners that the bank employment is public employment.

25. On the question of deep and pervasive control, we may indicate that the Full Bench in Shamlal Vithal Co-operative Bank Ltd. (supra) has held that referring to the bye-laws and sections of the Maharashtra Co-operative Societies Act, the Bank is not under the deep and pervasive control. The Andhra Pradesh High Court in the above case referred to various sections of the Co-operative Societies Act and has indicated that there is indeed deep and pervasive control of the State in the affairs of the petitioner bank. We may cursorily go through the provisions of the Maharashtra Co-operative Societies Act in order to ascertain the position. Under section 11, the Registrar has power to decide whether the person is an agriculturist or not and whether he is eligible for membership. Section 12 relates to classifications of societies which the Registrar has to make. Registrar has power to direct amalgamation, division or reorganisation of the societies in public interest. Under section 18A of the Act, the Registrar is entitled to order amalgamation of co-operative banks in the public interest. Section 50 deals with the State aid to the societies but the same has to be by way of Principle State Partnership Fund. We find that so far as respondent No. 8 is concerned, there is no such fund seen in the affairs of the bank. Under section 78, the Registrar has power to supersede the Committee which commits default or is negligent in performance of the duties entrusted to it or under the Rules. Under section 79, the Registrar has powers to enforce the performance of the obligations under the Act i.e. to keep books of accounts with respect to sums received and spent. Under section 79A, the Government has power to issue directions in public interest but we may indicate that in case of default, the Registrar has only power to remove a member of the committee, committing default or to remove an employee, who is also directed to carry out the directions.

26. This would show that the control under section 79A does not go to prove total control over the affairs of the society. On the other hand, under sections 72 and 73 of the Act, the final authority in every society vests in the general body of the society in general meeting. The day to day affairs are carried out by the committee vested with the rights. The provisions under the Co-operative Societies Act do not vest any ownership rights in the State. We feel that so far as respondent No. 8 Bank is concerned, it is difficult to hold that it is a State. There is not an iota of evidence to show that the Bank is substantially aided by the Government that major part of the expenses are met by the Government; that the day to day management is vested in the Government; On the other hand, the final arbiter of the affairs of the bank is the members in the general meeting and the members of the Managing Committee in the administration of the affairs of the Bank. The petitioners have not been able to dislodge this proposition which appears to be overwhelming and is supported by the documents on record.

27. When we look to the bye-laws, we find that they do not contain a symptom of Government aid. The objects of the bank are elucidated in bye-law No. 2. The aims and objects of the bank are to finance co-operative societies; to advance loans to the agriculturists, to advance loans to ordinary and nominal members of the society, to purchase, sell, transfer, endorse or pledge Government Promissory Notes, Municipal and Port Trust Bonds, to receive money on current, savings and fixed and other accounts, to act as Bankers to Zilla Parishad, Ahmednagar, to finance directly to individual artisans, craftsmen and small entrepreneurs, to guarantee payment of money on behalf of customers on proper security. None of these objects indicate any government control. On the other hand, they are the objects which are normally envisaged by an ordinary bank. They are not the functions performed by the State and hence the argument that the respondent No. 8 Bank is a State or State instrumentality under Article 12 has to be rejected.

28. After having arrived at a conclusion that the respondent No. 8 bank is not the State nor the State instrumentality, we are required to consider the next argument on behalf of the petitioners. According to the petitioners, the Bank is required to perform public duty or statutory public duty and that is to disburse finances to meet the financial needs of the public and that is the object with which the respondent No. 8 Bank has been registered under the Maharashtra Co-operative Societies Act. The employees constitute the vital ingredient in the performance of banking operations. The bank employment is public employment and there is every right for the petitioners to seek employment with the respondent No. 8 Bank. The allegations are made that the list of employees was prepared even beforehand; that the interviews simultaneously carried out at 14 centers was nothing but a farce and that the ultimate recruitment of the clerks and peons cannot be sustained and must, therefore, be struck down.

29. In the first instance, it will have to be considered as to whether any public or statutory public duty is attached to respondent No. 8 Bank. In that behalf, the learned counsel for the bank has urged that in the bye-laws, there is not a single bye-law which dilate on the conditions of recruitment. The employment is governed by the standing order under the Bombay Industrial Relations Act, 1946. The standing order is to be found in Schedule I under section 35 of the Act. Counsel 14 is in regard to employment or reemployment of the probationers or bad lies or temporary or casual workmen and their conditions of service. The petitioners, if at all have any right, have the right to approach the necessary forum under the above act of 1946 but since the bank is neither the State nor any instrumentality of the State, the employment with the bank cannot be said to be the public employment and that the writ of mandamus cannot be issued. The employees are governed by the standing order - impliedly terms of contract.

30. It has been urged by the counsel for the petitioners that although the respondent No. 8 is held to be not the State but a registered Co-operative Society under the Maharashtra Co-operative Societies Act, the question of public duty cannot be brushed aside to slightly. In : (1989)IILLJ324SC in the case of Anandi Mukta Sadguru Shree Kuktajee Vandasji Swami Suvarna Jayanti Mahotsav Smarak Trust v. V. R. Rudani and others, it is observed by the Supreme Court that there may be cases where the private individual or authority may be subject to writ jurisdiction of the High Court in cases they perform public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of duty imposed on the body. The duty must be judged in the light of positive obligation owned by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligations exists, mandamus cannot be denied.

32. In that case, the pay scales of the academic staff were recommended by the Chancellor and accepted by the Government and the University, therefore, issued necessary directions to the affiliated colleges to pay their teachers in terms thereof. The appellant, instead of implementing that directions, terminated the services of 11 teachers on the ground that they were surplus and approached the University for permission to remove them. The permission was of course denied. The college management, therefore, did not propose to admit students from academic year 1975-76 and the academic staff, therefore, was entitled to terminal benefits. But the management did not do so. The Supreme Court was pleased to issue the writ for compliance of the above letter by the University for payment of scales. It was argued that the college was a private institution but the Court observed that under Article 226, there is couched in comprehensive phraseology the wider powers to be exercised by the high Court. It was held that although the college was a private institution, the payment of the scales was rather mandatory because the scales were prescribed by the university and that the colleges were bound to comply with those directions. The college was an institution engaged in imparting educational and instructions. The staff appointed for the purpose was being supervised by the University and it would, therefore, mean that the payment became the part of the public duty which the college was bound to perform.

33. However, the respondent No. 8 has contended that there are no employment terms enunciated in the bye-laws. By virtue of the standing orders, the relations between employees and employers are governed and in that context, it could never the said that the employment becomes the public employment and that respondent No. 8 is performing any public or statutory duty. We do not find a lot of substance in this argument. The fact remains that the petitioners were not able to bring on record any term or scheme of employment which the Bank has to administer. The petitioners likewise have not been able to satisfy that the bank is performing any statutory or public function. The main purpose of establishment of the bank has been well indicated in the paragraphs hereinbefore and we, therefore, feel convinced that merely because large scale employment was done, the respondent No. 8 performs any public duty. In that behalf, we may examine the law of Mandamus that has been developed from time to time.

34. The learned counsel for respondent No. 8 has taken us through various citations on the Administrative Law. The learned author Wade in his book on Administrative Law, 6th Edition page 649 has stated that :-

'The prerogative remedy of mandamus has long provided the normal means of enforcing the performance of public duties by public authorities of all kinds.'

In Halsbury's Law of England, 4th Edition (Reissue 1) at page 237 in paragraph 132, it is observed :-

'An order of mandamus will be granted ordering that to be done which the Statute requires to be done and for this rule to apply, it is not necessary that the party or corporation on whom the statutory duty is imposed should be a public official or an official body. In order, however, for an order of mandamus to issue for the enforcement of statutory right, it must appear that the statute in question imposes a duty, the performance or non-performance of which is not a matter of discretion and if a power or discretion only, as distinct from a duty, mandamus will not be granted.'

By way of illustration, it was indicated that an Act of Parliament had entitled a body to take lands compulsorily, mandamus would lie to compel that body once it had given notice of its intention to take land to proceed with the compulsory purchase. Occasional mandamus may be sought to enforce a non-statutory duty such as duty of the police to prosecute offenders who break the law or the duty of a local authority to produce documents which a councillor reasonably needs for proper performance of his duties. When the rights of private persons are affected, the mandamus can be issued against the State or its officers.

35. De Smith in his book on Judicial Review of Administrative, 4th Edition at page 540, observed :-

'Mandamus lies to secure the performance of a public duty, in the preference of which the applicant has a sufficient legal interest. The performance must be demanded and if refused, the remedy lies.'

However, the duty to be performed must be of a public nature. The mandamus will not lie to order admission or restoration to an office that is essentially of a private character. (Obligations owed by a company towards its members). To enforce a mandamus, public duty does not necessarily has to be imposed by the Statute. It may be sufficient for the duty to have been imposed by a Charter, common law, custom or even contract. By way of illustration, it is stated that a writ of certiorari will be issued to quash determination of the compensation by Criminal Injuries Compensation Board, a non-statutory body set up by administrative action for discharge of a public function. The Board can be ordered to hear the application although it cannot be ordered to make payment.

36. P. P. Craig in his book on Administrative Law, 2nd Edition at page 391 has observed that the duty is public if it flows from the statute, prerogative, common law, charter, customs or even contract. In : (1973)ILLJ254Del in the case of National Seeds Corporation Employees Union v. National Seeds Corporation, it was held that for issue of writ of mandamus, there should be statutory obligation on a private employer like the petitioner to follow the provisions of section 9A of the Industrial Disputes Act, as for example reducing House Rent allowance without notice. The Court held that since the company was registered under the Companies Act, this could not be the statutory obligation of the company. Hence no writ could be issued. The employees may allege violation of section 9A of the above Act before the competent Tribunal but not in writ jurisdiction.

37. In 1994 2 C.L.R. 119 in the case of Girish Chandra Saxena v. The Chief Executive. Standard Chartered Bank, the High Court of Allahabad observed that the bank is neither the Governmental authority nor agency or instrumentality and, therefore, the writ for reinstatement by an employer against the bank was not maintainable. The bank was not discharging any statutory duty or public duty. The Supreme Court in : [1957]1SCR738 in the case of Sohan Lal v. Union of India laid down that normally a writ of mandamus is not issued against the private individual directing him to do a particular act unless the duty is shown to be in the nature of public duty. In the case of Dena Nath v. The national Fertiliser Ltd. reported in 1992 2 C.L.R. 1. the Supreme Court observed :

'We are thus of the firm view that in proceedings under Article 226, merely because contractor or the employer had violated any provisions of the Act or the Rules, the Court could not issue any mandamus....'

The above ratio would clearly support the arguments on behalf of respondent No. 8 that the respondent No. 8 Bank is not a 'State' and does not perform any public duty in the matter of employment. We have indicated that no conditions are prescribed about employment in any of the bye-laws of the bank. Whatever is available for governing the relations between employees and employer in the standing order under the above Act. We are, therefore, unable to persuade ourselves to hold that the bank was performing any public duty or statutory public duty.

38. This takes us to the third aspect and that is alleged gross irregularities committed by the respondent No. 8 in carrying out the process of holding interviews and breach of certain Government Resolutions. In the first instance, it is pointed out that this recruitment was carried out without previous permission to the Commissioner of Co-operation - in this case, the District Deputy Registrar, who is the delegate. The government order dated 29th May 1981, has been referred to in the affidavit of District Deputy Registrar Mane. This Notification was partially modified by another Notification dated 5th August 1981 and in that, it was stated that the first notification would operate only so long as the backlog of backward class candidates is not made up. In the affidavit filed by Sahebrao Jaganath Dhumal on behalf of the Bank, it is clearly stated that before the recruitment dated 30th June 1991, the bank had completely filled the entire backlog and was, therefore, not subject to limitations indicted above. We do find that the necessary backlog was filled up on 30th June 1991 as is seen in Schedule I page 232 at Exh. I. The same was even exceeded slightly on 30th September 1991 and was maintained on 31st December 1992. Apart from that, it has been urged by the learned counsel for the Bank that the District Deputy Registrar was present all along the proceedings connected with this recruitment. He is the Member of the Board of Directors as per the bye-laws and he was present when the first proposal was mutated on 25th June, 1991. His presence can be seen by the extract of attendance bearing his signature. He was also present when the minutes of the previous meeting were approved on 30th July 1991. He was also intimated about the interviews and it could not, therefore, he said that the recruitment was carried out without previous permission.

39. On the other hand, it has been pointed out that as the Government nominee, the District Deputy Registrar although had no voting right, had however the right to get his dissenting view recorded in the minute book on a particular issue. This is to be found in clause 30 Explanation II of the bye-laws. The learned counsel has, therefore, rightly submitted that if the District Deputy Registrar was so much conscious about the previous permission, he could have recorded his dissent when the resolution was adopted for carrying out the recruitment of 350 clerks and 50 peons in the first meeting. On the other hand, he was a party when the minutes were confirmed. It cannot, therefore, lie in the mouth of the District Deputy Registrar to say that this Notification of 1981 has been breached. We do agree with this submission.

40. In support thereof, the learned counsel for the Bank has relied on : AIR1977SC112 in the case of Nayaghar Co-operative Central Bank v. Narayan Rath and other. In that case, the services of the Secretary were terminated in 1968 under the orders passed by the Registrar of co-operative Societies. It was found that the secretary was in service since 1955 and the appointment was made in a meeting over which the Registrar of Co-operative Societies had himself presided. The Registrar from time to time intimated to the institution to take proper steps but nothing beyond that. The Court held that the Registrar had for purposes, acquiesced in the appointment of the secretary. The same ratio could be applied in this case and it will have to be stated that the District Deputy Registrar had impliedly acquiesced to the recruitment to be carried out.

4.1 Apart from that, the learned counsel has drawn our attention to other circulars and in the circular dated 8th August 1989, it was clearly stated that once the backlog is wiped out, no permission was essential. We may not refer to other Government Circulars. Suffice it to say at this stage that the District Deputy Registrar had acquiesced to the recruitment being made.

42. The next point which has been urged is that at the time of interviews, the social Welfare Officer or his representative or the Project Officer for Tribal Welfare were not intimated. However, the record clearly shows that the list of candidates were called from them; that the interviews were carried out at about 14 places and that the final selection lists were approved by the Social Welfare Officer. The necessary copies of the selection lists have been produced and we find that some are signed by the Social Welfare Officer. The practice of holding interviews at 14 places has been seriously challenged but in that behalf, it has been contended by the respondent bank that as the places of interview could be far away from the residential places of the candidates, the interviews were spread over to various talukas and the selection panels were appointed. The necessary record in that behalf has been tendered by respondent No. 8 Bank.

43. Now so far as finding fault with the holding interviews at various places simultaneously, the Supreme Court in the case of State of Himachal Pradesh v. Amar Nath Sharma reported in 1994 2 CLR 822 has considered the similar mode of conducting interviews. In that case also, the selection committees were appointed for various districts. They carried out the interviews simultaneously. Some of the Selection Boards gave lumpsum marks; some gave separate marks for certain subjects whereas some Selection Boards only gave the names of the selected candidates. This was challenged before the Court and the Court held :-

'The High Court, in our view, was not justified in quashing the selection procedure. The High Court has acted merely on surmises and conjectures. We have not been able to find any material illegality in the conduct of interviews. Simply because a candidates obtained less marks for educational qualifications and more marks in the interviews, it is no ground to reach the conclusion that the candidate was favoured. The special selection committees at various district levels adopted their own procedure to hold the interviews. At some places, lumpsum marks were awarded in respect of general knowledge and personality whereas at other places, 20 marks were divided into general knowledge and personality separately. We see no illegality in the manner of holding the interviews.'

The learned counsel for the respondent No. 8 has stated that in order to ascertain the efficacy of the candidates, the questionnaire was circulated to all the centres of interviews. The questions had been very comprehensive and the replies thereto decided upon the merits of the candidates. We are of the view that this would be adequate compliance in law for the purposes of selection.

44. In Writ Petition No. 2900 of 1991, the petitioners are the lady candidates, who were not called for interviews. The respondent No. 8 has stated that the places of postings were spread over the entire Ahmednagar district. At majority places, there was no residential accommodation for females nor proper sanitary arrangements. Even the security was doubted because of absence of police station. Hence the concerned authorities were requested as far as possible to see that no lady candidate was recommended. The learned counsel for the petitioners has contended that this was in gross violation of Articles 15 and 16 of the Constitution. But we have indicted at length that the respondent No. 8 Bank is not a State and that it does not perform any public duty while recruiting the candidates.

45. Apart from that, the learned counsel for the respondent No. 8 Bank has relied on few cases. In A.I.R.1979 S.C. 1968 in the case of Miss C. B. Muthamma v. Union of India, the Supreme Court has observed :

'We do not mean to universalise or dogmatise that men and women are equal in all occupations and all situations and do not exclude the need to pragmatise where the requirements of particular employment, the sensitivities of sex or the peculiarities of societal sectors or the handicaps of either sex may compel selectivity. But save where the differentiation is demonstrable, the rule of equality must govern.'

46. The learned counsel for the petitioner has contended that the ladies could be posted at taluka places. However, when the posts are transferable, the female candidates cannot be conferred any advantage to the detriment of male candidates. The accommodation for female candidates at a particular place cannot be carried throughout the tenure of service of that candidate and in that light, if respondent No. 8 did not recruit any female candidate, the same cannot be struck down.

47. In the case of Air India v. Nargesh Meerza reported in A.I.R. 1981 SC. 1830, the Supreme Court held that what Articles 15(1) and 16(2) prohibit is that discrimination should not be made only and only on the ground of sex. These Articles of the Constitution do not prohibit the State from making discrimination on the ground of sex covered with other considerations. We, therefore, find no fault with the measure adopted by the respondent No. 8 Bank. Hence Writ Petition No. 2900 of 1991 cannot be considered. In Writ Petition No. 460 of 1992, the petitioner was not selected although he had put in some service with the bank. However, he himself appeared for the interview and, therefore, availed of the procedure for selection. No grievance, therefore, can be made by the petitioner. In Writ Petition No. 24 of 1992, the petitioner was also not selected. However, in the view which we have taken, the grievance of the petitioner cannot be considered.

48. The learned counsel for the petitioner in the main petition has contended that the Courts must see that the rule of law in properly observed in the executive acts. The decision of the Supreme Court in the case of State of Haryana v. Piara Singh reported in 1992 2 CLR 890 has been relied upon. However, we feel that the authorities cited by him in this behalf need not be considered in view of the conclusions we have recorded above. He has also drawn our attention to : [1987]1SCR458 in the case of Shivajirao Nilangekar Patil v. Dr. Gosawi so also in the case of Bandh Mukti Morcha v. Union reported in : [1984]2SCR67 . Whereas we fully agree with those ratios laid down in those cases, they cannot be invoked by the petitioners in this matter.

49. We also considered the argument of the petitioner that in terms of the government Resolutions, the candidates from Employment Exchange, from Department of Social Welfare and from the Project Officer of Tribal Welfare should alone have been considered and appointed. However, it cannot be lost sight of that the vacancies under Employment Exchange (Compulsory Notification of the Vacancies) Act, 1959 provide for additional channel for recruitment where the employer is not bound to recruit all those candidates. It has been pointed out in this petition that about 80 candidates from the list of candidates supplied by the above department were recruited to the posts of clerks and one to the post of peon. The learned advocate for respondents No. 9 to 571 has contended that all the candidates who have been selected, are registered with the Employment Exchange. He has tendered the necessary schedule in that behalf. The same has been doubted on the ground that some of the candidates were registered after the recruitment in 1991. However, there is no basis for believing this argument.

50. The learned counsel for respondent No. 1 relied upon the affidavit of the Assistant Registrar of Co-operative societies tendered in writ petition No. 2055 of 1992. The defects in recruitment have been pointed out. We have gone through all the details and we feel that none of the submissions raised in the affidavit need to be considered.

51. Before parting with this matter, we may observe that the allegations in all the writ petitions are not only vague but appear to be exaggerated. On the point of payment to members of the Board, the amount has been varying between Rs. 40,000/- to Rs. 50,000/- in different petitions without any iota of evidence. This would, therefore, show that the petitioners are guided by their own assumptions and not by any cogent evidence.

52. We may also indicate that the Supreme Court in : AIR1991SC295 in the case of H. C. Puttaswamy v. The Hon'ble Chief Justice of Karnataka High Court has pleased to observe that although the Hon'ble Chief Justice had no powers to recruit the Court staff, without consulting the Public Service Commission, the Supreme Court on review of the facts found that as many as 392 candidates were appointed and quashing the appointments would put the selected candidates to grave prejudice. Accordingly, the Supreme Court did not tinker with the appointments made by the Chief Justice. The Court observed that the circumstances of the case justify humanitarian approach. In this case, we find that the employees have been selected and appointed since August 1991. We have also found that the petitioners have no reasons to approach the Court but even if it is assumed that the grievance of the petitioner is legitimate, we are not inclined to upset the selection because as many as 481 employees would be thrown out after having served for more than 2 to 3 years. It is urged that 240 days' continuous service enable them to claim permanency but without adverting upon that aspect, we feel that the selection need not be set aside. The argument were also made in regard to locus and improper affidavits but we do not wish to dwell on them in this matter. Hence for the foregoing reasons, all the writ petitions have to be dismissed. Accordingly, the following order.

53. All the Writ Petitions are dismissed. Rule discharged. There shall be, however, no order as to costs.

October 18, 1994.


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