RAGHUNATH PRASAD SINGH v. The State Of Bihar & Ors

Judgment

IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.4580 of 2008 RAGHUNATH PRASAD SINGH, son of Late-Jangbahadur Singh, resident of Village-Madhaipur, P.O.-+ P.S.-Siwaipatti Via-Meenapur, District- Muzaffarpur at present residing in the Mohalla and P.O.-Seikhpur, P.S.- Ahiyapur, District-Muzaffarpur. Versus …….Petitioner

1. The State Of Bihar 2. The Commissioner-cum-Secretary, Co-operative Department, Government of Bihar, New Secretariat, Bailey Road, Patna.

3. The Registrar, Co-operative Society, Government of Bihar, New Secretariat, Bailey Road, Patna.

4. The Managing Director, Muzaffarpur, Central Co-operative Bank Ltd., Muzaffarpur. With CWJC No.15085 of 2008 ……..Respondents. PHOOLDEO PRASAD SINGH, son of Late-Deep Narain Singh, permanent resident of Village-Dariyapur, P.O.-Siwaipatti Via-Meenapur, P.S.- Siwaipatti, District-Muzaffarpur. Versus …….Petitioner 1 The State Of Bihar 2 The Commissioner-cum-Secretary, Co-operative Department, Government of Bihar, New Secretariat, Bailey Road, Patna. 3 The Registrar, Co-operative Society, Government of Bihar, New Secretariat, Bailey Road, Patna. 4 The Muzaffarpur Central Co-operative Bank Ltd., Muzaffarpur represented through its Managing Director, Central Co-operative Bank Ltd., Muzaffarpur 5 The Managing Director, Muzaffarpur, Central Co-operative Bank Ltd., Muzaffarpur. With CWJC No.15412 of 2008 NAGNARAYAN SINGH, son of Late-Kalika Singh, permanent resident of village+P.O.-Tengraha, P.S.-Minapur, District-Muzaffarpur. Versus 1 The State Of Bihar 2 The Commissioner-cum-Secretary, Co-operative Department, Government of Bihar, New Secretariat, Bailey Road, Patna. 3 The Registrar, Co-operative Society, Government of Bihar, New Secretariat, Bailey Road, Patna. 4 The Muzaffarpur Central Co-operative Bank Ltd., Muzaffarpur represented through its Managing Director, Central Co-operative Bank Ltd., Muzaffarpur 2 5 The Managing Director, Muzaffarpur, Central Co-operative Bank Ltd., Muzaffarpur. -----------

04. 07.07.2009 This three writ petitions are by employees of Muzaffarpur Central Co-operative Bank. They have superannuated prior to or in 2008 on attaining the age of 58 years. Their grievance is that consistent with the decision of the State Government dated 24.03.2005 the Board of Directors of the Co-operative Bank having taken a decision on 23.05.2005 to enhance the age of superannuation of employees of the said Co-operative Bank from 58 to 60, they were wrongly superannuated at the age of 58 and as such should be deem to have continued in service up to the age of 60. Respondent Bank has appeared and contested the claim. With consent of parties, this writ petition has been heard at length at this stage for final disposal. Without going into various controversies, I am noting facts which are relevant for the order that I propose to pass and those facts are not in dispute. Muzaffarpur Co-operative Bank is a Co- operative duly registered under Bihar Co-operative Societies Act, 1935 and the rules framed thereunder. This is a Central Co-operative Bank. It has many employees. In view of the Act, the Rules, the bye-laws as applicable to this Co-operative Bank, it was competent to frame its own 3 rules and regulations for its employees in relation to their service and service conditions and matters of discipline connected therewith. Such Central Co-operative Banks unfortunately did not make their own rules. To bring about uniformity amongst various Central Co-operative Banks the State Government in exercise of powers under Section 66(B) of the Act framed the service rules for the staff of the Central Co-operative Banks in Bihar which was notified on 01.02.1994. They were made by the State Government in the department of Co-operative. Thus seen the service rules were made by the State Government and Chapter-8 thereof contained Rule 21 which provided that the employees would superannuate at the age of 58. “[66B. (1) Notwithstanding anything contained in this Act or the rules and bye-laws made thereunder, the State Government may, from time to time, by special or general order, determine the nature and number of posts to be created and the mode of recruitment or personnel by Co-operative Societies and prescribe among other things- (1) (2) (3) (4) (5) the qualifications, age and experience. The pay scale and other emoluments. The method of recruitment. The conditions of service, and The disciplinary procedure to be followed.] 4 (2) any appointment made in contravention of the order of the State Government under sub-section (1) shall be void as if no such appointment ever existed and salary and other allowances paid if any, shall be recoverable under Section 40]” Reference to Section 66(B) would show that in matters of rules of employees, once rules were framed by the State Government they were binding on all Central Co- operatives and any action taken in contravention thereof was declared to be void and subject to penal action. Now the question is with regard to the efficacy of the decision of the Board of Directors of this Central Co- operative Bank which was taken on 23.05.2005. It appears that considering various aspects of the matter the State Government took a decision to enhance the age of superannuation of all its employees from 58 to 60. This decision was published on 24.03.2005. It appears that the Board of Directors of Muzaffarpur Central Co-operative Bank Limited having come to know of this decision and wanting to confer the same privilege/right of its employees, took the decision on 23.05.2005 to extend the age of superannuation from 58 to 60 years of its employees. This decision has not been acted upon in the case of the petitioners and this is what has brought the petitioners to this Court. 5 On behalf of the petitioners, it is submitted that the Board of Directors are competent to take a decision in regard to the age of superannuation of its employees. Prima facie the contention is correct. A Co- operative is a juristic entity. It is to be controlled and governed by its Board of Directors. Normally one would consider the Board of Directors to be autonomous and independent but that is not the case in full in the present. A reference to various provisions of the Act would show that the concept of total autonomy and independence of the Co-operative and its Board of Directors is a misnomer under the Act. One of the examples of this is Section 66(B) wherein the directives of the State Government in relation to matters mentioned therein is final and binding on the Co-operative whether it likes it or not. Further a reference to Rule 33 would show that if Co-operative took any decision contrary to the Act, the Rules, the bye-laws or the directions issued thereunder, the Registrar of Co-operative was competent to annul the same. Thus seen only a limited functional autonomy of the Board of Directors is given. The directions of the State Government issued under Section 66(B) are final and binding. Thus it is not correct to submit that Board of Directors were free and competent to legislate in respect of age of superannuation. The Board of Directors were bound by the service rules as 6 framed by the State Government as aforesaid. It specifically provide for the age of superannuation. It is well settled that a rule made by an authority can only be amended by that authority or by an authority of superior efficacy or by an Authority to whom such power may be delegated. In the present case the Board of Directors does not fulfill or fitting to any of the said three descriptions. In that view of the matter, it has to be held in the year 2005, the Board of Directors had no authority to alter or amend the service rules as framed by the State Government and thus the resolution of the Board of Directors dated

23.05.2005 had no effect in law and can not be enforced by this Court. Next it is submitted on behalf of the petitioner that the Board of Directors again took a similar decision on

16.07.2007 and this time Board of Directors referred to an alleged decision of the State Government dated 15.05.2006 which authorized the Co-operatives, on fulfillment of certain conditions to take a decision with regard to enhancement of age of superannuation to 60 years whether this Co-operative fulfill those conditions or not is not being gone into because it is not necessary. This is so because while dealing with the said alleged decision of the State Government dated 15.05.2006, a division Bench of this Court in LPA No. 752 of 2007 and analogous cases 7 dated 27.11.2007 has held that the said decision though taken by the Secretary in the Department of Co-operative, Government of Bihar with approval of the State Minister having not been placed before the State Cabinet nor having the approval of the State Cabinet, it was not the decision of the State Government. In that view of the matter, being bound by the division Bench Judgment, it has to be held that the so called decision of the State Government dated

15.05.2006 is not governmental decision and if that is not the governmental decision there is no authorization to the Co-operatives to alter the government made service rules for the Co-operative. The decision of the Board of Directors dated 16.07.2007 is thus of no consequence and can not be enforced. In the counter affidavit, it has been pointed out that now on 26.12.2008 the State Government has taken a decision to permit enhancement of age of superannuation of the employees of the Central Co-operative Banks if they so decide and it is pursuant thereto on 05.01.2009 the Board of Directors of the Muzaffarpur Central Co-operative Bank took a decision to enhance the age of superannuation of its employees from 58 to 60. This decision of the Board of Directors has not been made retrospective. It would thus ordinarily be prospective in application. Petitioners already having superannuated 8 long before this decision can not get advantage of this decision. The writ petitions are thus meritless and are dismissed as such. Shageer (Navaniti Prasad Singh, J)