Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.7711 of 2024 (In the matter of an application under Articles 226 and 227 of the Constitution of India, 1950). Ajay Kumar Panda …. Petitioner(s) -versus- Asst. Registrar of Co-operative Societies, Banki Circle, Cuttack …. Opposite Party (s) Advocates appeared in the case throughHybrid Mode: For Petitioner(s) For Opposite Party (s) : : Mr.Bikram Senapati, Adv. Mr.Saswat Das, AGA CORAM: DR. JUSTICE S.K. PANIGRAHI DATE OF HEARING:-13.11.2024 DATE OF JUDGMENT: -17.12.2024 Dr. S.K. Panigrahi, J. 1. The petitioner, through this petition challenges the order dated 13.03.2024 issued by the Appellate Authority-cum-Assistant Registrar of Cooperative Societies, Banki whereby the appeal filed by Opposite Party No. 3 was allowed, and the removal order dated 25.10.2019 against him was set aside. I. FACTUAL MATRIX OF THE CASE: 2. The brief facts of the case are as follows: Page 1 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (i) The Pandalam Service Co-operative Society (“Opposite Party No. 7”) is a primary co-operative society governed under the Orissa Co-operative Societies Act, 1962, its Rules of 1965, and its Bye-laws. (ii) Santosh Kumar Jaysingh (“Opposite Party No. 3”), serving as Secretary, was found to have allegedly engaged in financial embezzlement, misappropriation of funds, and tampering with society’s records. Consequently, he was suspended on 23.09.2019 and removed from service on 25.10.2019 under Section 28(viii) of the Act.
Legal Reasoning
(iii) Opposite Party No. 3 challenged his termination by filing Service Dispute Case No. 13/2019 before the State Co-operative Tribunal but later withdrew it on 21.08.2020. Prior to this withdrawal, he had filed W.P.(C) No. 22877/2019 before the High Court, which, through its order dated 20.12.2019, directed him to proceed with the Tribunal case. (iv) During the pendency of the dispute, Opposite Party No. 3 was
Legal Reasoning
instructed to hand over charges to Mr. Dharanidhar Mohanty, but instead, he filed Miscellaneous Case No. 16/2020 before the Tribunal seeking to retain society’s records. The Tribunal dismissed the case on 29.06.2020 and directed Opposite Party No. 1 to conduct an inventory under Section 33(2) of the Act. (v) Despite this, Opposite Party No. 1 failed to comply, enabling Opposite Party No. 3 to retain the society’s records unlawfully. Following the withdrawal of Service Dispute Case No. 13/2019 on 21.08.2020, Opposite Party No. 2, the then Administrator, issued Order No. 23 dated 24.08.2020, arbitrarily reinstating Opposite Party No. 3 without the authority of a duly elected Committee of Management. Page 2 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (vi) Challenging this, the petitioner filed Dispute Case No. 123/2020 under Section 68 of the Act before the Registrar of Co-operative Societies (“Opposite Party No. 5”). The Registrar, through an order dated 02.03.2024, set aside the reinstatement order of 24.08.2020, restoring the original removal order of 25.10.2019. (vii) Opposite Party No. 3 subsequently filed Tribunal Appeal No. 09/2024 on 07.03.2024 challenging the Registrar’s decision but withdrew it on 16.03.2024. The petitioner became aware of this withdrawal on 25.03.2024 upon receiving the appeal memo and withdrawal petition. (viii) As a result, the petitioner contends that the removal order dated 25.10.2019 remains valid and binding. However, it came to the petitioner’s notice through a registered letter dated 21.03.2024 that Opposite Party No. 1 issued Order No. 646 on 13.03.2024, once again reinstating Opposite Party No. 3, in violation of the Registrar’s order and the binding nature of the Tribunal proceedings. II. SUBMISSIONS ON BEHALF OF THE PETITIONER: 3. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions: (i) The illegal action of Opposite Party No. 1 mirrors the unauthorized conduct of Opposite Party No. 2 and amounts to an illegal exercise of appellate jurisdiction in disguise over an order passed by a higher authority. Such an action is void under Section 109(1)(j) of the Orissa Co-operative Societies Act, 1962, read with Rule 22 of the PACS Staff Service Rules, 2011. Page 3 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (ii) The removal order dated 25.10.2019 had already merged with the Tribunal’s Order No. 41 dated 21.08.2020 in Service Dispute Case No. 13/2019, and the subsequent withdrawal of T. Appeal No. 09/2024 rendered Opposite Party No. 1’s attempt to nullify statutory proceedings wholly void and without jurisdiction. Order No. 646 dated 13.03.2024 issued by Opposite Party No. 1 is, therefore, illegal and arbitrary, constituting a clear disregard for statutory provisions and judicial orders. (iii) A bare perusal of the impugned order reveals serious illegalities and procedural lapses. It is cryptic and fails to specify the registration date, the appeal number, any directive for document production, or the identity of the officer responsible for compliance. Such glaring omissions render the order unsustainable under the PACS Staff Service Rules, 2011, and the O.C.S. Act, 1962. (iv) Furthermore, Opposite Party No. 3’s history disqualifies him from holding any position within Opposite Party No. 7 Society. His record includes a monetary penalty of ₹17,00,000 passed against him under Section 67 of the O.C.S. Act in S.P. Case No. 9/2017 and pending criminal proceedings in Baideswar P.S. Case No. 100/2019 under Section 409 IPC for the misappropriation of ₹17,69,286, corresponding to G.R. Case No. 418/2019 before the learned S.D.J.M., Banki. Despite interim protection granted by this Court in ABLAPL No. 17991/2019 on 27.10.2021, which directed him to deposit ₹8,00,000, Opposite Party No. 3 evaded compliance with Section 91 Cr.P.C. notices issued by the Page 4 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 Vigilance Department on 01.01.2021 and failed to produce critical records of the society, reflecting his continued malafide conduct. (v) The petitioner, aggrieved by the Vigilance Department’s prolonged inaction despite this Court’s observations in CRLMP No. 1695/2020 on 13.01.2021, sent a communication dated 11.03.2024 to the S.P. Vigilance, Cuttack Division, urging immediate implementation of the Court’s directions. However, no steps have been taken to date. (vi) Notably, pursuant to Order No. 646 dated 13.03.2024, Opposite Party No. 3, through a communication dated 21.03.2024, instructed Opposite Party No. 1 to recall the order. Yet, Opposite Party No. 1 has failed to act, and instead appears complicit in ensuring the irregular continuance of Opposite Party No. 3/ permitting him to operate the society’s accounts in collusion with the Branch Manager of Kalapathar Branch of Banki Central Cooperative Bank Ltd. (“Opposite Party No. 4”). This collusion raises strong suspicions of a concerted effort to misappropriate society’s funds/ assets/ and properties. (vii) The impugned order dated 13.03.2024, therefore, reflects a lack of transparency, manifest malafides, and dubious conduct by Opposite Party No. 1, acting in connivance with Opposite Parties No. 2 to 4 to further illegal interests through Opposite Party No. 3. Such an untenable order is void ab initio, lacks legal sanction, and is non- existent in the eyes of the law. III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY: 4. Per contra, learned counsel for the Opp. Party earnestly made the following submissions in support of his contentions: Page 5 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (i). The petitioner placed the Opp. Party No.3 under suspension on 23.09.2019, citing allegations of misappropriation of society funds and tampering with records. However, the removal order dated 25.10.2019 was issued without serving any notice, providing a charge memo, or following the due process as mandated under Rule 22 of the Notification dated 07.02.2011 issued by the Registrar of Cooperative Societies, Odisha (“Opp. Party No.5”). The required procedures, including communicating specific charges in writing, conducting a formal inquiry, furnishing the inquiry report, and issuing a notice regarding the proposed penalties, were not adhered to before imposing the major penalty of removal. (ii). Furthermore, the petitioner failed to produce any documents substantiating the allegations against the deponent, including the alleged audit report, either before the appellate authority or this Court. These procedural and evidentiary deficiencies highlight a complete disregard for the rules and principles of natural justice. The Opp. Party No. 1, after thoroughly verifying the records, observed gross violations of the prescribed procedures. Consequently, on 13.03.2024, the authority quashed the removal order dated 25.10.2019 and directed the reinstatement of the deponent. (iii). The Appellate Authority also noted that the petitioner’s actions were arbitrary and unsupported by evidence. It appears that the petitioner acted with malafide intentions/ possibly driven by the deponent’s refusal to comply with alleged undesired demands made during the petitioner’s tenure as President of the society. Despite these findings, Page 6 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 the deponent has remained out of employment since 25.10.2019 through no fault of their own. (iv). In light of these facts, the deponent respectfully prays for the interim order dated 04.04.2024 to be vacated and requests permission to resume duty in the society. The deponent seeks justice for the wrongful and arbitrary actions taken against them and urges this Court to consider the violations of procedure and lack of evidence in the matter. . IV. COURT’S REASONING AND ANALYSIS: 5. 6. 7. Before adverting on the merits of the instant petition, this Court finds it apposite to discuss the settled law with regards to the maintainability of writ petition pertaining to service matters against a cooperative society. The short question for adjudication in the instant petition is that whether the Opp. Party No.7/Cooperative Society is amenable to the writ jurisdiction of Courtin the instant writ petition which involves a service dispute. It is pertinent to note that this Court, in the case of Ch. Ajeet Kumar Das and Ors. v. Registrar, Co-operative Societies, Odisha and Ors.,1 has already adjudicated upon a similar issue. The said judgment, disposed of on 31.07.2024, is relevant for the present matter. For the sake of clarity and to ensure proper adjudication of the case at hand, the relevant discussion from the aforesaid judgment is reproduced herein 8. Article 12 of the Constitution of India has defined the term “State” as follows: 1W.P.(C) No.18641 of 2020, Ori HC Page 7 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 “12. Definition.--In this Part, unless the context otherwise requires, “the State” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.” 9. The constitutional history reveals that the term “other authorities” as referenced in Article 12 has been the subject of extensive judicial examination. This examination has led to the establishment of a comprehensive body of jurisprudence dedicated to its interpretation. The evolution of this legal framework highlights the significance of “other authorities” in defining the scope of constitutional rights and governmental powers. 10. In the case of Ajay Hasia and others v. Khalid MujibSehravardi,2 a Constitution Bench of the Supreme Court, while approving the tests laid down in the case of RamanaDayaramShettyv. International Airport Authority of India &Ors.,3 as to when a corporation can be said to be an instrumentality or agency of the government, observed which runs thus:- “The tests for determining as to when a corporation can be said to be an instrumentality or agency of government may now be culled out from the judgment in the International Airport Authority case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression “other authorities”, it must be realised that it should not be stretched so far as to bring in every autonomous body which 2(1981 ) 1 SCC 722 3(1979) 3 SCC 489 Page 8 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 has some nexus with the government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority case as follows: (1) 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 Government ; (2) 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 governmental character; (3) It may also be a relevant factorwhether the corporation enjoys monopoly status which is State conferred or State protected; (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality ; (5) If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant the corporation as an instrumentality or agency of Government ; (6) “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. If on a consideration of these relevant factors it is found that the corporation instrumentality or agency of government, it would, as pointed out in the International Airport Authority case, be an ’authority’ and, therefore, ’State’ within the meaning of the expression in Article 12.” in classifying is an factor Page 9 of 21 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 11. Then, in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others,4 a seven-judge Bench of the Apex Court, meticulously examined and endorsed the criteria established in the RD Shetty(supra) and reaffirmed in the Ajay Hasia(supra) for determining when a corporation can be classified as an “instrumentality” or “agency” of the government, thereby falling within the scope of the term ’authority’ as defined in Article 12 of the Constitution. The Bench referenced the case of Chander Mohan Khanna v. NCERT,5 wherein the Apex Court, after evaluating the memorandum of association and operational rules, concluded that the NCERT was primarily an autonomous entity. It was determined that its functions were not exclusively governmental, and government oversight was limited to ensuring proper utilization of grants. Since its funding was not entirely derived from government sources, it did not meet the criteria of a State instrumentality under Article 12. Additionally, the Bench cited the decision in Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers’ Association,6 where it was established that the company qualified as an authority under Article 12. This conclusion was based on the fact that the company was substantially funded and financially controlled by the government, operated under a Board of Directors appointed and removable by the government, and undertook functions of significant public interest under governmental oversight.