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Seetharama Naidu Vs. Chittoor Dist. Co-op. Central Bank Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Judge
Reported in(1978)IILLJ363AP
AppellantSeetharama Naidu
RespondentChittoor Dist. Co-op. Central Bank Ltd. and anr.
Excerpt:
.....and appears to be contrary to the well recognised distinction between a statutory body and a public body and the well accepted principle that a writ of mandamus may be issued against any person or body discharging a public function, not necessarily in pursuance of powers conferred under a statute by a statutory body. while adding that they would like to go into the question themselves, the supreme court observed that it is unnecessary to do so as the petitioner was asking for a relief not against the co-operative society but in regard to the order passed by the registrar who was acting as a statutory authority in the purported exercise of the powers conferred on him by the co-operative societies act. 1789; they stated that they would like to go into the question themselves if it..........court in the two decisions referred to above, the distinction between a statutory body and a public body cannot be sustained. it may be argued that this part of the full bench is too widely stated and appears to be contrary to the well recognised distinction between a statutory body and a public body and the well accepted principle that a writ of mandamus may be issued against any person or body discharging a public function, not necessarily in pursuance of powers conferred under a statute by a statutory body. it is not necessary, however, for the purpose of this writ petition, to consider whether the full bench was justified in holding that the distinction between a statutory body and a public body cannot be sustained, and whether that question deserves to be considered by a.....
Judgment:

Alladi Kuppuswami, J.

1. The petitioner was appointed as a Supervisor in the Chittoor District Co-operative Central Bank Ltd., who is the first respondent herein. He was later promoted as Bank Inspector and was confirmed in that post as from 1st January, 1963 by an order dated 28th February, 1964.

2. During the course of a detailed inspection of the Co-operative Society it was found that a sum of Rs. 1,000 collected from some members was shown as remitted to the Bank but it was not supported by any challan. The petitioner was, therefore, called upon to explain the above lapse on his part and why severe disciplinary action should not be taken against him. The petitioner submitted his explanation on 21st January, 1974. Meanwhile by an order dated 9th January, 1974 of the President he was suspended pending detailed enquiry into his conduct and character. On 12th January, 1971 the Chief Executive Officer of the Society one Narendranath passed an order under Section 55 of the Co-operative Societies Act stating that it had been brought to his notice that as a Bank Inspector the petitioner collected a sum of Rs. 1,000 from the members and the same had not been remitted into the bank under the powers con-erred in G.O. 38, Planning & Co-operation (Co-op. IV) Department, dated 22nd September, 1970 delegating the powers to him. He authorised himself to conduct an enquiry under Section 51 of the Andhra Pradesh Co-operative Societies Act into the affairs of the society with particular reference to the above transaction. The petitioner was summoned to appear before him with all documents, records, etc. Thereafter the enquiry under Section 51 was conducted and the Chief Executive Officer submitted a report on 2nd March, 1974. In that report he came to the conclusion that the petitioner with the intention to misappropriate the sum of Rs. 1,000 falsified the accounts to cheat inspecting officials and did not care to make good the misappropriated amount even after it was pointed out by Zonal Officer. As he was guilty of misappropriation it warranted very severe disciplinary action. He suggested that the Society may initiate suitable disciplinary action against the petitioner. In view of the report the President directed that charges may be framed against him and enquiry held into those charges. Accordingly the Chief Executive Officer by his memo, dated 7th March, 1974 framed the charge that the petitioner had temporarily misappropriated Rs. 1,000. The petitioner was asked to submit his written explanation to the charge. A questionnaire form also was enclosed with a direction to the petitioner to fill in and resubmit along with his written explanation. The petitioner submitted his explanation on 12th March, 1974. He pleaded that he was not guilty and the allegation that he temporarily misappropriated Rs. 1,000 was not just and correct. After considering his explanation, the President of the Society issued a show cause notice dated 24th April, 1974 in which it was stated that the explanation was carefully gone through but it was not convincing and it was proved beyond doubt that the petitioner had wilfully falsified the accounts in order to misappropriate the sum of Rs. 1,000 and was guilty of moral turpitude which was a gross misconduct as defined in Chapter XIII of the award of the Industrial Tribunal dealing with disciplinary proceedings. The petitioner was asked to show cause why he should not be dismissed from the service of the bank. The petitioner by his letter dated 25th April, 1974 stated that for submitting his further explanation he required copies of statements given by A. Seenaiah, K. Pardhasaradhi Reddi, and Doraswami Reddi before the Chief Executive Officer and the Enquiry Officer. It appears from the other records that these statements were supplied to the petitioner. The petitioner thereafter submitted his explanation on 6th May, 1974. He again reiterated that there was no misappropriation by him and the misconduct alleged was not at all established. He also complained that the prescribed procedure was not followed or the principles of natural justice were violated though he did not state how the prescribed procedure was not followed or the principles of natural justice were violated. After considering his explanation by an order dated 19th June, 1974 it was decided to revert the petitioner from Cadre IV to Cadre V instead of inflicting the proposed punishment of dismissal from service though he deserved very severe punishment. This order was passed by N. Narendranath who was by that time part-time person-in-charge, the Board having been superseded. The petitioner preferred an appeal to the Board of Directors on 22nd July, 1974 as provided in the award of the Tribunal in the chapter relating to the disciplinary proceedings. The person-in-charge again in the capacity of Board of Directors decided to modify the order dated 19th June, 1974. By an order dated 20th September, 1974 he directed only stoppage of three increments. In accordance with this resolution, proceedings were passed on 7th October, 1974 by recording the above resolution and treating the period of suspension upto the date of joining duty as period on duty.

3. The petitioner has filed this writ petition praying for the issue of a writ of certiorari quashing the order dated 7th October, 1974. The main contention of the writ petitioner is that Narendranath figured in the disciplinary proceedings as the person who framed charges, who conducted the enquiry, who imposed the punishment and also as the appellate authority. He was both the prosecutor as well as the Judge and hence the enquiry conducted and the Order passed is opposed to the principles of natural justice. Secondly, no enquiry was conducted at all and the order was passed after Considering merely the explanation of the petitioner. The authority treated the enquiry conducted under Section 51 of the Act as part of the departmental enquiry against the petitioner and no separate enquiry was conducted. Hence the order is not only against the principles of natural justice but contrary to the disciplinary proceedings rules contained in the award of the Industrial Tribunal published in G.O. Ms. 576, dated 23rd April, 1970. In the counter-affidavit filed by the second respondent it is contended that the dispute is between a co-operative society and its employee and as such the matter cannot be decided in an application under Article 226 of the Constitution. The writ petition is not maintainable against a co-operative society. On the merits, it is submitted that the rules contained in G.O. 576 were correctly followed. It is also not correct to say that the enquiry officer who conducted the enquiry was himself the disciplinary authority, the enquiry officer and the appellate authority. As a matter of fact the Board of Directors has inflicted a lesser punishment, namely, stoppage of three increments instead of reversion from Cadre IV to Cadre V. In these circumstances it is stated that the writ petition may be dismissed.

4. In our view the contention that the writ petition is not maintainable has to be accepted. In the recent decision of the Supreme Court in Sukhdev Singh v. Bhagatram : (1975)ILLJ399SC , the distinction between a body created by the statute and a body created in accordance with the provisions of the statute was pointed out. For instance a company incorporated under the Companies Act is not created by the Companies Act but comes into existence in accordance with the provisions of the Act, Similarly, a co-operative society is not created by the Co-operative Societies Act but is governed by the provisions of that Act. In Vaish Degree College v. Lakshmi Naraian 1976-II L.L.J. 163 : A.I.R. 1976 S.C. 888, this distinction was emphasised and it was held that the executive committee of a degree college which is registered under the registration of Co-operative Societies Act is not a statutory body merely because it is affiliated to the University or is regulated by the provisions of the University Act or the statutes made thereunder. In Arya Vidyava Sablia, Kashi v. K. K. Srivastava : (1976)IILLJ95SC it was held that Dayanand Mahavidyala Degree College is not a creature of statute but an entity like a company or a co-operative society or other body which is governed by a statute. Therefore, the Court cannot order reinstatement of a servant who has been dismissed by the college authorities. These decisions were followed by a Full Bench of this Court in W.P. 2162 of 1975, dated 11th July, 1977 where it was held that a school conducted by a society registered under the Non-trading Societies Act is not a statutory body and is not amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution. They further observed that in view of the observations of the Supreme Court in the two decisions referred to above, the distinction between a statutory body and a public body cannot be sustained. It may be argued that this part of the Full Bench is too widely stated and appears to be contrary to the well recognised distinction between a statutory body and a public body and the well accepted principle that a writ of mandamus may be issued against any person or body discharging a public function, not necessarily in pursuance of powers conferred under a statute by a statutory body. It is not necessary, however, for the purpose of this writ petition, to consider whether the Full Bench was justified in holding that the distinction between a statutory body and a public body cannot be sustained, and whether that question deserves to be considered by a fuller bench, as we have other decisions dealing directly with co-operative societies. The maintainability of a writ petition against a co-operative society fell to be considered also in Kulchinder Singh v. Hardayal Singh Brar : (1976)IILLJ204SC , where a writ petition was filed praying for an order or direction requiring the Punjab State Co-operative Land Mortgage Bank not to proceed with the filling up of the post of accountants, etc., in violation of an agreement between the co-operative bant and the employees. The High Court dismissed the application on the preliminary ground that no writ petition would lie against a co-operative bank registered under the Co-operative Societies Act. Considerable argument was addressed in the Supreme Court as to whether a cooperative society is a public authority. The Supreme Court observed that it was not necessary to investigate this question elaborately as it was of the view that the appellant was seeking merely to enforce an agreement entered into between the employees and the co-operative bank. While stating that though some of the legal problems argued before it deserve appropriate jurisprudential study in depth, the Supreme Court observed that the case could be disposed of on the simple ground that what the writ petitioner sought to enforce is a binding contract. What was immediately relevant was not whether the respondent was a State or Public authority but what was enforced was 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 tortuous actions. For instance, a supplier of chalk to a Government School or cheese to a Government Hospital cannot apply under Article 226 in the event of breach of contract bypassing the normal channels of civil litigation. In Nayagarh Co-operative Central Bank v. Narayan : AIR1977SC112 , a writ petition was filed questioning the order of Registrar of Co-operative Societies disapproving the appointment of the petitioner as Secretary of the Bank and on the basis of that order the President of the Bank terminated the services of the petitioner. In the High Court it was contended that the writ petition against a co-operative society was not maintainable. The High Court negatived the contention and held it was maintainable. The Supreme Court observed that the observations made by the High Court and its decision that such a writ petition was maintainable are not strictly in accordance with the decision of the Supreme Court. While adding that they would like to go into the question themselves, the Supreme Court observed that it is unnecessary to do so as the petitioner was asking for a relief not against the co-operative society but in regard to the order passed by the Registrar who was acting as a statutory authority in the purported exercise of the powers conferred on him by the Co-operative Societies Act. In that view the writ petition was maintainable.

5. From the various decisions referred to above it is seen that the present view of the Supreme Court is that a writ petition does not lie against a Co-operative Society, though in Kulchinder v. Hardayal (1977) 2 S.C.J. 88, they indicated that this question might deserve appropirate jurisprudential study in depth and in Nayagarh Co-operative Central Bank v. Narayan (1976) Lab. I.C. 1789; they stated that they would like to go into the question themselves if it became necessary. As far as this Court is concerned it has uniformly taken the view that a writ petition does not lie against a co-operative society, especially when it relates to matters concerning the society find its employees. In C.V. Narasimha Naidu and Ors. v. The Chittoor Dist. Co-operative Bank Ltd. (1971) 2 A P. J. (S.N.) 16 one of us Kuppuswamy, J. following the decision of a Division Bench of this Court in Lakshmiah v. Special T.C.M. Society : AIR1962Mad169 , held that an order Under Article 226 of the Constitution cannot be issued to quash the proceedings of a co-operative society. We do not consider it necessary to deal with the decisions of the other High Courts. We may, however, note that there has been a difference of opinion between the various High Courts on this question.

6. We would, however, prefer to rest our decision on the ground that what the petitioner is seeking to enforce is a purely contractual right and in substance his case is that there has been a wrongful interference with his conditions of service by the stoppage of three increments. As the Supreme Court pointed in Kulchinder Singh v. Hardayal Singh Brar, (1977) 2 S.C.J. 88, where a petitioner is seeking to enforce a contract he cannot invoke the jurisdiction under Article 226 bypassing the normal channels of civil litigation. Even in W.P. No. 3711 of 1970, dated 7th June, 1971 another ground for dismissing the writ petition was that in terminating the services of its own employees the co-operative society cannot be said to be acting in the discharge of a public duty. In considering whether a particular body is an institution amenable to jurisdiction under Article 226, it was observed that it is to be ascertained whether the particular act complained of is one which was done in discharge of a public duty. A statutory body entrusted generally with the performance of a public duty may still perform several acts which cannot be considered to be public functions, like entering into a contract for the purchase of goods or other property. While doing so it is not discharging a public function. Similarly, it was held that termination of the services is one connected only with the contract of employment a fortiori in this case, the stoppage of increments cannot be regarded to be a public function but is only one connected with the contract. Even in Ramswarup v. M.P. State Co-operative M. Fedaration : (1977)ILLJ271MP , relied on by the learned Counsel for the petitioner all that was held was that normally co-operative societies will not be amenable to writ jurisdiction except in cases relating to performance of legal obligations and duties imposed by a statute creating a corresponding legal right in one. It was held that the High Court can issue an appropriate writ against a co-operative society or its officer who has, in violation of the Act or rules of bye-laws dismissed its employee or terminated his services. This decision in our view in so far as it holds the writ petition lies against a co-operative society runs counter to the decisions of the Supreme Court. But even this decision is of no assistance to the petitioner in this case where no statutory provision or rule is violated.

7. It was, however, contended that the conditions of service are regulated by G.O. Ms. No. 576, Home dated 23rd April, 1970 which was a G.O. publishing the award of the Industrial Tribunal, Hyderabad in I.D. No. 13/67 between the workmen and employers of 25 Co-operative Central Banks. Chapter 13 of the award deals with disciplinary proceedings. It provides that a person against whom disciplinary action is proposed to be taken shall be informed of the particulars of the charge and shall be given an opportunity to give his explanation. Sufficient time should be given to him to produce any evidence that he may wish to tender in his defence. He shall be permitted to appear before the officer conducting the enquiry to cross-examine any witness and to examine witness and produce other evidence in his defence. He shall also be given a hearing as regards the nature of the proposed punishment in case any charge is established against him. As according to the petitioner all these requirements are not satisfied it is argued that there is a breach of the terms of the award. It was contended that as such a breach would be in the same position as the breach of a statute or rule, this Court is entitled to interfere in such a case. It has, however, been held that an award has no statutory force or law and hence writ of mandamus cannot be issued on the ground that there was a contravention of the award : vide Sitaramaiah v. Bank of Broda (1971) 2 A.P.L.J. 94. In K. M. Mukherjee v. Secy. S.B.I. : (1969)ILLJ50Cal it was held that an award of an Industrial Tribunal can have no more statutory force than the decree of a civil Court. When an employee is dismissed in contravention of the award relating to banks, he cannot invoke jurisdiction under Article 226. Similarly in Ram Kishan v. O/c. Central Bank of India Ltd. : AIR1958All413 , it was held that an award cannot be placed on a higher footing than a decree of a civil Court. The learned Counsel for the petitioner, however, drew our attention to Workman in B. & C. Mills v. B. &C.; Mills 1970-I L.L.J. 26, where it was held that the standing orders certified under the Industrial Employment (Standing Orders) Act has statutory force and are binding upon employer and employees as statutory terms and conditions of service. We do not consider that an award which takes the place of an agreement between the parties is in the same position as a standing order made under the provisions of a statute.

8. As we have upheld the contention that the writ petition is not maintainable against a co-operative society for the reliefs claimed we do not consider it necessary or proper to go into the merits of the case. The writ petition is dismissed, but in the circumstances without costs.


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