JUDGMENT

SHARMA, J.:— The main question before us is whether a Regional Rural Bank established by a notification under S. 3 of the Regional Rural Banks Act, 1976 is "State" for the purposes of Part III of the Constitution of India. This appeal by special leave arises out of a suit by the respondent No. 1, an employee of the appellant Bank, challenging the validity of a disciplinary proceeding against him and the order of his dismissal from service passed therein. The trial court decreed the suit and the decree was confirmed by the Additional District Judge in appeal and by the High Court in second appeal.

2. The facts briefly stated, omitting the details which are not relevant for the purpose of this judgment, are in a short compass. The respondent No. I was, in 1981, served with a lengthy charge-sheet containing many accusations, some of them being serious, and he was called upon to file his show cause. A large number of documents were mentioned in the charge-sheet and the respondent demanded copies thereof for the purpose of filing his reply. According to the appellant several opportunities were given to the respondent to inspect the documents (excepting a few in respect of which privilege was claimed), but the respondent did not avail of them with the object of protracting and frustrating the inquiry. According to the High Court, the opportunity given by the appellant was not adequate. Due to certain circumstances the inquiry could not make any progress for sometime. A new inquiry officer entrusted with the proceeding took up the matter on 5-7-1983, when the respondent No. I contended that he must be given an adequate opportunity of examining the relevant documents for facilitating him to file his written statement. There is serious controversy between the parties as to the interpretation of the conduct of the delinquent servant and the approach adopted by the inquiry officer, on the 5th of July and the subsequent dates, but we do not consider it necessary to deal with this aspect in detail as we agree with the view of the High Court that as the respondent was not given adequate opportunity to examine the documents, he was handicapped in filing his show cause and defending himself effectively.

3. The suit was filed by the respondent immediately after the order dated 5th July. 1983 was passed. The disciplinary proceeding, however, proceeded ex parte and ultimately the respondent was dismissed from service. By an amendment of the plaint, the respondent was allowed to challenge the dismissal order also.

4. The respondent has asserted that it was the vindictive attitude of the Bank authorities which led to the initiation of the disciplinary proceeding against him and the order of this suspension, and the inquiry have been vitiated by serious violation of principles of natural justice. Besides denying these allegations, the appellant Bank contended that having regard to the nature of relationship of master and servant between the parties, the decree for re-instatement of the respondent was illegal and the suit as framed was not maintainable. Even assuming that the respondent proves his case on merits, his remedy would be a suit for damages. Alternatively, if the respondent is held to be a public servant so as to enable him to ask for re-instatement in the service, the suit must be dismissed as not maintainable in view of the provisions of the U.P. Pubic Services (Tribunal) Act, 1976. There has also been a stout denial of the allegations relating to violation of principles of natural justice.

5. Both the learned advocates representing the parties invited us to go deeply into the facts, but we have declined to do so, as all the three courts below have considered the matter in great detail and we- agree with the High Court that the inquiry officer should have given adequate opportunity to the; respondent to examine the relevant documents for the purpose of preparing hi reply. Not having done so, the further order in the proceeding mu