Judgment

Y.V. CHANDRACHUD, CJI.:- Respondent I was appointed as an Agent of the appellant-Bank, which is a co-operative society registered under and governed by the provisions of the Madhya Pradesh Co-operative, Societies Act, 1960. By an order dated June 5, 1968 passed by one S. P. Jain, the services of respondent 1 were terminated on the ground that he had over-stayed the leave granted to him.

2. Aggrieved by that order, respondent 1 raised a dispute under S. 55(2) of the Act, before the Registrar of the Co-operative Societies. The Registrar referred the matter to the Deputy Registrar, who by an order dated Feb. 27, 1972, allowed the claim of respondent I on the ground that the order terminating the services was not in accordance with Rules 44 and 45 of the Co-6perative Bank Employees Service Rules. He also ordered the reinstatement of respondent 1 with full back salary and allowance. In an appeal filed by the Bank, the Addl. Registrar took the view that the only remedy which was open to respondent I was to claim damages for wrongful termination of his services and that, therefore, he could not be reinstated in service. Respondent I then filed an appeal before the Board of Revenue which held by an order dated Aug. 28, 1974, that S. P. Jain who held the enquiry against respondent I and passed the order terminating his services had no power to do so. The Board of Revenue set aside the order of termination and remanded the matter to the Bank for disposal in accordance with law. The writ petition filed by the Bank in the High Court of Madhya Pradesh was dismissed on Oct. 26,1978. According to the High Court, since S.P. Jain had no authority to hold the enquiry or to pass the impugned order of dismissal, the said order had no existence in the eye of law and, therefore, respondent I should be deemed to be in service and be reinstated. Aggrieved by the judgment of the High Court the Bank has filed this appeal.

3. We are in agreement with the conclusion to which the High Court has come, though for somewhat different reasons which are as follows :-

The Board of Directors of the appellant Bank was superseded by the Registrar of the Co-operative Societies by an order dated July 25, 1967 and its powers were vested in the Madhya Pradesh State Co-operative Bank, Jabalpur, which is an Apex Bank, as "officer-in-charge" of the superseded Bank. By Resolution No. 23 dated May 19, 1968, the Apex Bank confirmed the action of its Chairman/Vice-Chairman in deputing, amongst others S. P. Jain as the Chief Executive Officer of the superseded Bank. The Apex Bank had no authority or power so to appoint S. P. Jain for two reasons : In the first place, the Apex Bank being an appointee of the Registrar, had no authority to divest itself of the power conferred upon it by the Registrar and to invest S. P. Jain with that power. The only authority which could have conferred the necessary power on S. P. Jain was the Registrar. The Registrar did not confer that power upon S. P. Jain under S. 53(4) of the Act.

4. In the result, this appeal is dismissed with costs.

5. We would like to add that as long as 16 years have passed since the impugned order was passed and that too by a person who had no authority to pass it. Secondly, the consensus of opinion of the various authorities which have dealt with this matter is that, in overstaying the leave granted to him, respondent 1 was not guilty of "misconduct". It is desirable and prudent that no further proceedings be taken againts respondent for the alleged default on his part which is the subject-matter of the present proceedings.

6. We modify the order of the High Court by directing that respondent 1 will be entitled to fifty per cent of the backwages and allowances only from June 6, 1968 until Sept. 30, 1984. The appellant will take back respondent 1 in its service with effectfrom October 1, 1984.

Appeal dismissed.

For Citation : AIR 1985 SC 337