The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.18641 of 2020 (In the matter of an application under Articles 226 and 227 of the Constitution of India, 1950). Ch. Ajeet Kumar Das and Ors. …. Petitioner(s) -versus- Registrar, Co-operative Societies, Odisha and Ors. …. Opposite Party (s) Advocates appeared in the case through Hybrid Mode: For Petitioner(s) For Opposite Party (s) : : Mr. B. S. Tripathy-1 Mr. P. K.Rath, Sr. Adv. Alongwith Mr. S. Rath, Adv. CORAM: DR. JUSTICE S.K. PANIGRAHI DATE OF HEARING:-08.05.2024 DATE OF JUDGMENT: -31.07.2024 Dr. S.K. Panigrahi, J. 1. The Petitioners, through this Writ Petition, seek to contest the purported illegal actions and/or irregularities carried out by Opposite Party Nos.1 and 2 in incorporating private Opposite Party Nos.3 to 7, who were on deputation from Urban Cooperative Bank Ltd., Cuttack, into CCC Bank Ltd., Cuttack. This action was communicated via letter No.16438 dated 29.07.2020 by Opposite Party No.1 and was done in disregard of the Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 1 of 25 explicit objection submitted by the former President of the Petitioners’ Association on 21.07.2020, and in clear and blatant violation of the Central Cooperative Banks of Odisha Staff Service Rules, 2011 (hereafter referred to as the Staff Service Rules, 2011). I. FACTUAL MATRIX OF THE CASE: 2. The brief facts of the case are as follows: (i) Cuttack Central Cooperative Bank (hereinafter “CCC Bank/Opp. party No.2”) was established in the 1956 and is a major Indian private bank with its headquarters in Cuttack having over 38 branches and ATMs countrywide. (ii) The tenure of the last Committee of Management of the Opp. party No.2/Bank was expired with effect from 30.04.2020. But during the verge of expiry of their tenure; the former Committee of Management of the Bank made a Resolution on 08.02.2019 to bring staff from Urban Cooperative Bank Ltd., Cuttack on deputation for recovery of its NPA accounts of and communicated the said Resolution to Urban Cooperative Bank Ltd., Cuttack. (iii) Urban Cooperative Bank Ltd., Cuttack in their Resolution dated 24.09.2019 considered the aforesaid proposal of the Opp. party No.2/Bank and accepted the same permitting 7 of their staffs to go on deputation to the CCC Bank Ltd. for a period of one year. Thereafter, the aforesaid private Opp. Party Nos.3 to 7 with two others have joined CCC Bank Ltd. in its Head Office on deputation with effect from 01.01.2020.
Legal Reasoning
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 2 of 25 (iv) Pending joining of those private Opp. Party Nos.3 to 7 with two others in the Opp. Party No.2-Bank on deputation, the Secretary of the Opp. Party No.2-Bank in its letter No.2639 dated 12.12.2019 sought permission of the Registrar, Co-operative Societies, Odisha (hereinafter “Opp. Party No.1”) for deputation of those private Opp. Party Nos.3 to 7 with two others in the rank of Assistant Manager. (v) Thereafter, the Opp. Party No.1 accorded permission vide its letter No.28524 dated 27.12.2019 allowing deputation of the aforesaid private Opp. Party Nos.3 to 7 with two others employees of Urban Cooperative Bank Ltd Cuttack to CCC Bank Ltd. for one year on the Resolution of Urban Cooperative Bank Ltd., Cuttack dated 24.09.2019 and CCC Bank Ltd. Resolution dated 08.02.2019. (vi) Based on the aforesaid letter dated 27.12.2019 of Opp. party No.1, the Opp. Party No.2-Bank has appointed the private Opp. Party Nos.3 to 7 with two other employees of Urban Cooperative Bank Ltd., Cuttack on deputation and allowed them to work in the rank of Assistant Manager of the Bank with effect from 01.01.2020. (vii) While the matter stood thus, after completion of three months of service of those 7 staff brought on deputation from Urban Cooperative Bank Ltd., Cuttack, permanent absorption of the private Opp. parties No.3 to 7 in the Bank in the cadre of Manager was deliberated upon and finally, in their last meeting held on 24.04.2020, the former Committee of Management took up the issue to permanently absorb those private Opp. Party Nos.3 to 7 in the cadre of Manager of the Bank for discussion. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 3 of 25 (viii) Upon receipt of the above and responding thereto, the Opp. Party No.1 in its letter No.11228 dated 26.05.2020 requested the secretary of the Opp. Party No.2-Bank to submit Resolution of both the Banks to the Directorate for taking further action at their end. (ix) During the circumstances as described, Petitioner No.3, the former President of the Petitioners’ Association, became aware of the action and subsequently submitted a formal representation on 21.07.2020, criticizing said action. (x) However, the Committee of Management of the Urban Co-operative Bank vide Resolution dated 22.07.2020 (as communicated through letter No.827 dated 28.07.2020 of CEO, Urban Co-operative Bank) passed the impugned order No.16438 dated 29.07.2020 allowing permanent absorption of those private Opp. Party Nos.3 to 7 in the cadre of Manager subject to the following conditions:- 1) The employees to be absorbed in the cadre of Manager shall be junior most in the cadre 2) Their absorption will be against the vacancies and in consonance with Staff Service Rules of the Bank. 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 issue regarding appointment of 7 staff from Urban Cooperative Bank Ltd., Cuttack was pursued by the former Committee of Management of the Opp. Party No.2 Bank in connivance with its former Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 4 of 25
Legal Reasoning
Secretary Sri Sadasiba Sadangi and Mr.R.K.Swain, Establishment Officer of the Bank in a clandestine manner and was never made public and was kept secret as such deputation was not authorized as per Rule- 19 of the Staff Service Rules, 2011. (ii) According to Rule-19 of the Staff Service Rules, 2011, the managing Committee of the Bank may employ a person in the service of the bank on deputation from Government/Orissa State Co-operative Bank/RRBs/NABARD/RBI only. In the present case, Urban Co-operative Bank, Cuttack is not coming under any of the aforesaid categories of institution/Bank authorizing such deputation. (iii) As per the information received by the Petitioners, there was no consensus between the Directors/Members of Committee of Management. But the former Secretary of the Bank by enclosing a so- called Extract of the Resolution of the Committee of Management, in the letter No.251 dated 27.04.2020, requested the Opp. Party No.1 to accord its approval / permission for absorption of those private Opp. Party Nos.3 to 7 permanently in the cadre of Manager in the Bank. (iv) The extract of the Resolution dated 24.04.2020 as enclosed by the Opp. Party No.2 in his letter dated 27.04.2020 would reveal that such extract was only signed by the Secretary Mr. Sadasib Sarangi and Ex-President Mr. B.P.Swain on 27.04.2020. The said so- called extract shall by no stretch of imagination be taken to be the extract of "Resolution of Committee of Management" comprising of 15 members including President, Secretary and DRCS, Cuttack-l. The aforesaid fact would reveal that there has been a clandestine move initiated by Mr. Sarangi, Page 5 of 25 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 the former Secretary of the Bank in connivance of former President of the Committee of Management through active participation of Mr.R.K.Swain, Establishment Officer of the Bank, to permanently absorb those private Opp. Party Nos.3 to 7, those who were brought on deputation from Urban Cooperative Bank Ltd. with effect from 01.01.2020 in a manner contrary to law and in a manner contrary to Rule-19 of Staff Service Rules, 2011. (v) Assuming, arguendo, without conceding, that the private opposing parties are to be permanently absorbed into CCC Bank Ltd., they should have been integrated into their respective cadres of Senior Assistant and Junior Assistant. They could not have been permanently absorbed into the Manager cadre, as this cadre is two levels higher than their original cadre in the Urban Co-operative Bank. (vi) Though, the private Opp. Parties have joined in the Bank with effect from 01.01.2020, yet their achievement towards recovery of loan extended by the Bank was meager as against position and to the best of the information of the petitioners’ Association the percentage of recovery would be around 0.02% and as such, they are not even efficient to man the Recovery Squad. However, by manipulating facts, the impugned resolution was passed with the malafide intension to allow further benefits to those private Opp. Party Nos.3 to 7 in a clandestine manner, though they are not entitled for the same. (vii) The impugned order was passed in a most illegal and arbitrary manner by the Opp. Party No.1 and in gross violation of Rule-19 of the Staff Service Rules, 2011, which Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 is the only enabling provision for Page 6 of 25 "Appointment by Deputation to the Bank". Further, there is no provision in the Staff Service Rules, 2011 authorizing the Opp. Party No.1 to pass the impugned order and/or to accord permission for such illegal deputation. The petitioner reasonably apprehends that the impugned order was passed by the Opp. Party No.1, which was just before his retirement was/is an outcome of irrelevant and extraneous considerations. The impugned order was passed by the Opp. Party No.1 in colorable exercise of his power ignoring the provisions of Rule-19 of the Staff Service Rules, 2011. (viii) The impugned order also suffers from gross non- application of mind as the said Opp. party No.1 has deliberately and willfully ignored the objections raised by the petitioner no.3 in his representation dated
Decision
21.07.2020. In that view of such issues, the impugned order is liable to be quashed with a direction to the Opp. Party No.2 to forthwith repatriate the private Opp. Party Nos.3, 4, 8 to their parent bank. (ix) The impugned decision was taken by the Opp. Party No.1 at the instance of the Opp. Party no.2; ignoring the expressed objections filed by the Petitioner No.3 dated 21.07.2020. As the deputation of those staff from Opp. Party No.3 was/is itself bad, illegal and ab initio void and not permissible under Rule-19 of the Staff Service Rules, 2011. It was taken only with a view to blocking the promotional avenues of the petitioners in the cadre of Banking Assistant and Assistant Manager. Therefore, the impugned order dated 29.07.2020 of the Opp. Party No.1 is liable to be quashed with consequential orders in the manner as prayed for. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 7 of 25 III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES: 4. Per contra, learned counsel for the Opp. Parties earnestly made the following submissions in support of his contentions: (i). Cuttack Central Cooperative Bank Ltd. is registered as a central cooperative society duly registered under the provisions of the OCS Act, 1962 and the Rules framed thereunder. It is managed by its own Committee of Management having its own independent legal entity as a body-corporate. It is a creature as per the provisions of the OCS Act, 1962 and therefore Cuttack Central Cooperative Bank Ltd. is not and should not be construed as an instrumentality of the State. (ii). The petitioners have not availed the alternate remedy available under Section 113 of the OCS Act, 1962 which has not been exhausted. Further, the resolution questioned in this writ petition has not been assailed under the provisions of the OCS Act, 1962. As the writ petitioners have not availed the alternate remedy available under law therefore the present writ petition is not maintainable, rather this writ petition is an abuse of process of law (iii). The petitioners in the aforesaid writ petition have challenged the absorptions of these opposite parties in the cadre of Manager by the Committee of Management which is competent for such absorptions in view of the provisions contained under Section 28 of the OCS Act, 1962. These opposite parties were absorbed as such in the cadre of Manager considering their earlier position in the establishment of the Cuttack Urban Bank Ltd. and respective pay scales. On the other hand, the present petitioners are in the cadre of Banking Assistants under Grade - Page 8 of 25 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 VIA being absorbed in the establishment of the opposite party Bank while working in different affiliated primary societies on abolition of Cadre Scheme. Therefore, the petitioners have no cause to challenge the absorptions of these opposite parties in the establishment of this opposite party Bank. The resolution of the Committee of Management and the approval of the Registrar thereon is for the larger interest of the opposite party Bank for reduction in NPA position. Therefore, the petitioners have no valid ground to file this writ petition. (iv). No illegality has been committed either by the Management of the Opp. Party No.2 or by the Opp. party No.1 or even by the former Secretary- in-Charge of the Bank Sri Sadasiv Sarangi in absorbing these opposite parties in the establishment of the Bank with an object to mobilize the defaulters and to pursue them for liquidation of their outstanding dues thereby to reduce the NPA position of the Bank (v). The ’Staff Service Rule 2011’ as referred by the Petitioners in this paragraph is otherwise known as ’H.R. Policy- 2011’ which is a set of guidelines prepared by the Registrar of Cooperative Societies, Odisha by exercising his power vested under section 33A of the OCS Act, 1962 fixing the service conditions of the employees. (vi). From the conjoint reading of Clause-19 of the HR Policy-2011 it is very much clear that the employees of the other Cooperative Societies can be brought on deputation and can be appointed on absorptions in the establishment of the Bank. Therefore, the allegation of the petitioners to the extent that the order of the Registrar of Cooperative Societies dated 29.07.2020 was issued in a clandestine manner, is an allegation in vague. Page 9 of 25 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 The petitioners, on the basis of such vague allegation and misleading facts, have filed the present writ petition which is an abuse of process of law and therefore the present writ petition is liable to be dismissed with cost (vii). The aforesaid decision of the Committee of Management of the Opposite Party Bank is in the interest of the Bank Keeping in view its outstanding loan position and NPA position. Pursuant to such resolution dated 08.02.2019, a proposal / request was submitted before the Cuttack Urban Cooperative Bank Ltd., Cuttack for lending its employees having 15 (fifteen) years of experience in Loan recovery and experience in recovery under the provisions of the SARFAESI Act. Considering the request of the opposite party Bank, the Management of the Cuttack Urban Cooperative Bank Ltd. invited options / applications from its eligible employees who were interested to join in the establishment of the opposite party Bank on deputation. After exercising options by the employees, names of these opposite parties were sponsored by the Urban Cooperative Bank Ltd. to the opposite party Bank. On receipt of the above options, following due procedures, these opposite parties were engaged on deputation with the approval of the Registrar of Cooperative Societies, Odisha. No provision of the H.R. Policy 2011, as alleged by the petitioners, was violated. Similarly, the Registrar of Cooperative Societies, Odisha, who is competent under law, accorded approval by exercising his authority vested under Sec-33A of OCS Act, 1962 for the larger interest of the opposite party Bank. In view of the above the allegations of the petitioners in this paragraph -5 are all Page 10 of 25 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 baseless and misleading for which the present writ petition is liable to be dismissed by this Court. IV. COURT’S REASONING AND ANALYSIS: 5. 6. 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 matter against the cooperative bank. The short question for adjudication in the instant petition is that whether the Opp. Party No.2/bank is amenable to the writ jurisdiction of Court in the instant writ petition which involves a service dispute. 7. Article 12 of the Constitution of India has defined the term "State" as follows: "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." 8. 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. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 11 of 25 9. In the case of Ajay Hasia and others v. Khalid Mujib,1 a Constitution Bench of the Supreme Court, while approving the tests laid down in the case of Ramana Dayaram Shetty v. International Airport Authority of India & Ors.,2 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 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; 1(1981 ) 1 SCC 722 2(1979) 3 SCC 489 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 14-Aug-2024 16:08:13 Page 12 of 25 factor in classifying (4) Existence of deep and pervasive State control may afford an is a State agency or indication that the corporation 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 instrumentality or agency of the corporation 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." is an 10. Then, in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others,3 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,4 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