1998 Supreme(SC) 1258

1998(9) Supreme 535
Supreme Court of India
(From Allahabad High Court)
Saghir Ahmad & D.P. Wadhwa, JJ.
U.P. State Co-operative Land Development Bank Ltd. -Appellant
versus
Chandra Bhan Dubey & Ors. etc. -Respondents
Civil Appeal No. 514 of 1985
With
Civil Appeal Nos. 515-516 of 1985
Decided on 18-12-1998
Counsel for the Parties:
For the Appellant : H.S. Gururaja Rao, Sr. Advocate, K.R. Nagaraja, K.K. Tyagi, Advocates.
For the Respondent : Anil Kumar Gupta and D.K. Gupta, Advocates.

Important Points
1. An inquiry proceedings is not held as if it is a trial in a criminal case or as if it is a civil suit.
2. Uttar Pradesh Co-operative Land Development Bank is an instrumentality of State or authority as mentioned under Article 12 of the Constitution and as such amenable to writ jurisdiction.

Headnote:(i) Service Law-Disciplinary proceedings-Dismissal from ser­vice-Validity of-Delinquents were given charge memo-Opportunity of being heard given-Inquiry conducted-Show cause notice as to why they be not dismissed given and thereafter they were dismissed on basis of findings of inquiry officer-High Court holding that punish­ing officer had neither given reason for coming to conculsion of guilt of delinquents nor enclosed report which he had accepted and therefore dismissal orders were vitiated by non-compliance with rules of natural justice and in violation of statutory rules-Not sustainable-All requirements for initiation and conclusion of disciplinary proceedings have been followed-High Court fell in error in returning finding that rules of natural justice have not been followed-Judgment of High Court set aside.

       Held : All the requirements for the initiation and conclusion of the disciplinary proceedings have been followed in the present case and rules of natural justice observed. Proceedings against the respondents were initiated on the reports of the officers under whom they were working and these reports formed part of the evidence in the proceedings. An inquiry proceedings is not held as if it is a trial in a criminal case or as if it is a civil suit. Rules of natural justice require that a party against whom an allegation is being inquired into should be given a hearing and not condemned un­heard. As to what are the rules of natural justice to be followed in a particular case would depend upon the circumstances in each case and must also depend on the provisions of law under which the charges are being inquired into in the disciplinary proceedings. The respondents were apprised of the evidence against each of them and given opportunity of being heard in person and also to produce evidence in defence. Nothing more was required on the part of the Inquiry Officer. Procedure after the receipt of the reports of the Inquiry Officer was followed as prescribed. In our view, the High Court, therefore, fell in error in returning a finding that rules of natural justice or the Regulations and Service Rules which are statutory in nature have not been fol­lowed. (Para 17)

       (ii) Constitution of India-Arts. 12 and 226-Uttar Pradesh Co-opera­tive Land Development Bank Act, 1964-Writ petition by employees of Co-operative Bank-Maintainabi­lity of-Affairs of Bank are con­trolled by State Government though bank functions as a co-operative society - Employees of Government deputed to head the Bank-Service Rules have been framed under the statute and those Rules have the approval of a statutory body-Bank is certainly an extend­ed arm of State and thus an instru­mentality of State or autho­rity -Writ petition against bank is maintainable.

       Held : The language of Article 226 does not admit of any limitation on the powers of High Court for the exercise of jurisdiction thereunder though by various decisions of this Court with varying and divergent views it has been held that jurisdiction under Article 226 can be exercised only when body or authority, decision of which is com­plained, was exercising its power in the discharge of public duty and that writ is a public law remedy. (Para 21)

       The appellant is functioning as a co-operative society under the Societies Act but it has been constituted under the provision of the Bank Act. In exercise of power conferred on the State Government by Section 30 of the Bank Act, Rules have been framed called “the U.P. Co-operative Land Development Banks Rules, 1971 . For the service condition of the employees of the appellant, we have to refer to the Societies Act and the Regulations framed by the U.P. Co-operative Institutional Service Board constituted under Section 122 of the Societies Act as well as to the Service Rules framed by the appel­lant under Regulation 102 of the Service Regulations. Service Rules framed by the appellant shall be operative only after their approval by the Institutional Service Board. Any order of dismissal by the appellant can be issued only after its approval by the aforesaid Board. If we refer to the Bank Act, it will be seen that under Section 3 there shall not be more than one State Land Development Bank for the whole of the State of Uttar Pradesh and that sole Bank is the appel­lant. It has thus exclusive jurisdiction for whole of the State of Uttar Pradesh. It can admit as members Land Development Banks whose number can be as many as may be deemed necessary by the Registrar of the Co-operative Society for the State of Uttar Pradesh. Appellant is also vested with various powers under the Bank Act which powers are not available to a co-operative society registered merely under the Societies Act. If we refer to some of the provisions of the Bank Act it will be seen that the Registrar of the co-operative societies for the State of Uttar Pradesh shall be the Trustee for the purpose of securing the fulfillment of the obligations of the State Land Devel­opment Bank to the holders of debentures issued by the Board of Direc­tors. The powers and functions of the Trustee shall be governed by the provisions of the Bank Act and by the instrument of Trust executed between the appellant and the Trustee as modified or substituted from time to time by their mutual agreement and with the approval of the State Government. Trustee is to be a corporation sole. The Board of Directors of the appellant may from time to time issue debentures of various denominations with the previous sanction of the State Govern­ment and the Trustee and subject to such terms and conditions as the State Government may impose against the unconditional guarantee by the State Government for repayment in full of the principal and payment of interest thereon or on the security of mortgages, charges or hypothe­cations etc. Under Section 9 of the Bank Act, the State Government constitutes a Guarantee Fund on such terms and conditions as it may deem fit, for the purpose of meeting losses that might arise on ac­count of loans advanced by the Land Development Banks on the security of mortagages not being fully recovered due to such circumstances as may be prescribed. The appellant and the Land Development Banks shall contribute to such fund at such rates as may be prescribed. Under Rule 6 of the Bank Rules the Guarantee Fund shall be maintained by the Finance Department of the State Government in the Public Accounts Section of the State Accounts and all contributions to the Fund and interest earned on investment made from the fund shall be credited direct to the Fund. It is not necessary for us to quote various other sections and rules but all these provisions unmistakably show that the affairs of the appellant are controlled by the State Government though it functions as a co-operative society and it is certainly an extended arm of the State and thus an instrumentality of the State or authority as mentioned under Article 12 of the Constitution. (Para 19)

       The Service Rules that the Managing Director and Chief General Manager of the appellant are officials of the State sent on deputation to the appellant. These two officers are at the helm of the affairs of the appellant. It is difficult to imagine a situation where a Government sends one of its employees on deputation to head a body or institution not controlled by that Government even though the employee may be paid out of the funds of that body or institution unless there is specific provision of law so entitling the Government. We also find that Service Rules have been framed under the statute and those Rules have the approval of a statutory body. Exercise of power of dismissal by the appellant has to be in accordance with the statu­tory regulations and with the approval of the statutory body. (Para 20)

       In view of the fact that control of the State Government on the appellant is all pervasive and the employees had statutory protec­tion and therefore the appellant being an authority or even instrumen­tality of the State would be amenable to writ jurisdiction of the High Court under Article 226 of the Constitution. (Para 25)

       (iii) Constitution of India-Art. 226-Writ jurisdiction-Scope and ambit of Article 226.

       Held : It does appear to us that Article 226 while empowering the High Court for issue of orders or directions to any authority or person does not make any such difference between public functions and private functions. It is not necessary for us in this case to go into this question as to what is the nature, scope and amplitude of the writs of habeas corpus, mandamus, prohibition, quo warranto and certiorari. They are certainly founded on the English system of jurisprudence. Article 226 of the Constitution also speaks of directions and orders which can be issued to any person or author­ity including, in appropriate cases, any Government. Under clause (1) of Article 367 unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under Article 372 apply for the interpreta­tion of the Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India. “Person” under Sec­tion 2(42) of the General Clauses Act shall include any company, or association or body of individuals, whether incorporated or not. Constitution is not a statute. It is a fountain head of all the stat­utes. When the language of Article 226 is clear, we cannot put shack­les on the High Courts to limit their jurisdiction by putting an interpretation on the words which would limit their jurisdiction. When any citizen or person is wronged, the High Court will step in to protect him, be that wrong be done by the State, an instrumentality of the State, a company or a co-operative society or association or body of individuals whe­ther incorporated or not, or even an individual. Right that is infringed may be under Part III of the Constitution or any other right which the law validly made might confer upon him. But then the power conferred upon the High Courts under Article 226 of the Constitution is so vast, this court has laid down certain guidelines and self-imposed limitations have been put there subject to which High Courts would exercise jurisdiction, but those guidelines cannot be mandatory in all circumstances. High Court does not interfere when an equally efficacious alternative remedy is available or when there is established procedure to remedy a wrong or enforce a right. A party may not be allowed to by-pass the normal channel of civil and criminal litigation. High Court does not act like a proverbial `bull in china shop’ in the exercise of its jurisdiction under Article 226. (Para 25)