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PUNJAB AND HARYANA HIGH COURT
R.L. Anand, J.
Punjab State Coop. Bank Ltd. - Appellant
Versus
Milkha Singh and another - Respondents
Regular Second Appeal No. 1344 of 1993.
Decided On : 3 May, 1996
APPEAL - MAINTAINABILITY - ORDER 29 RULE 1 CPC - COOPERATIVE SOCIETY - RESOLUTION OF BOARD OF DIRECTORS - MANAGING DIRECTOR - POWER TO FILE APPEAL - PUNJAB COOPERATIVE SOCIETIES ACT - BYE LAWS - REGULATION 46.8 - PRELIMINARY OBJECTION - APPEAL DISMISSED AS INCOMPETENT.
Fact of the Case:
Punjab State Cooperative Bank Ltd. (appellant) challenged the judgment and decree of the District Judge, Gurdaspur, who affirmed the judgment and decree of the trial Court declaring the orders passed by the appellant and Gurdaspur Central Bank Ltd. (respondent No. 2) as illegal, null and void. The appellant contended that the orders were passed after a proper enquiry and in accordance with the principles of natural justice.
Finding of the Court:
The High Court held that the appeal was incompetent as it was not maintainable in the absence of a resolution passed by the Board of Directors of the appellant authorizing the Managing Director to file the appeal. The Court noted that Order 29 Rule 1 CPC requires a pleading on behalf of a corporation to be signed and verified by a Director or other principal officer who is able to depose to the facts of the case. However, the decision to file an appeal or not rests with the Board of Directors, which is the heart and soul of the corporation.
Issues: 1. Whether the appeal was maintainable in the absence of a resolution passed by the Board of Directors authorizing the Managing Director to file the appeal? 2. Whether Regulation 46.8 of the Bye Laws of the appellant-Bank conferred sufficient power on the Managing Director to institute the appeal without an independent decision of the Board of Directors?
Ratio Decidendi: 1. Order 29 Rule 1 CPC requires a pleading on behalf of a corporation to be signed and verified by a Director or other principal officer who is able to depose to the facts of the case. However, the decision to file an appeal or not rests with the Board of Directors, which is the heart and soul of the corporation. 2. Regulation 46.8 of the Bye Laws of the appellant-Bank only gives powers to the Managing Director to institute, conduct, defend any legal proceedings by or against the Bank but the decision to institute or defend the proceedings has to be taken by the Body Corporate for functions of its Managing Director.
Final Decision: The appeal was dismissed as incompetent, leaving the parties to bear their own costs.
R.L. Anand, J. - This defendants appeal has been directed against the judgment and decree dated 19.4.1993 passed by the District Judge, Gurdaspur, who affirmed the judgment and decree of the trial Court dated 15.10.1990 passed by Senior Sub Judge, Gurdaspur.
2. Brief facts of the case are that Shri Milkha Singh son of Shri Puran Singh filed a suit for declaration against Punjab State Cooperative Bank through its Managing Director-defendant No. 1 and against the Gurdaspur Central Bank Ltd., Gurdaspur through its Managing Director-defendant No. 2 seeking declaration to the effect that order passed by defendant No. 1 vide endorsement No. CC/Sr.Acct/EA2/266-68 dated 13.7.1984 against the plaintiff withholding further promotion of the plaintiff for two years as resolved by the Administrator of the defendant vide resolution No. 731 dated 25.6.1984 is illegal, null and void, ineffective, without jurisdiction, unconstitutional, against the principles of natural justice in violation of service regulation as contained in Common Cadre Rules 1970-71. The plaintiff also claimed consequential relief in the shape of promotion with effect from 1974 and other benefits. The other declaration which was sought by the plaintiff was that order passed by defendant No. 2 on 28.1.1995 as conveyed to the plaintiff vide endorsement No. CC./Sr.Acctt.33/3414-16 dated 6.2.1985 wherein the suspension period with effect from 6.5.1974 to 19.4.1978 was regularised as per the leave of the kind due was illegal, null and void, unconstitutional and against the principles of natural justice.
3. The case set up by the plaintiff was that he is in continuous service of the defendants since 1957 and was posted with defendant No. 2 till 1978. Defendant No. 1 is an Apex Cooperative Society registered under the Cooperative Societies Act and certain employees of defendant No. 1 are governed under the Common Cadre Rules 1970-71, framed under the Cooperatives Societies Act. The plaintiff being the Senior Accountant, the service condition was governed by the Common Cadre Rule. The plaintiff alleges that defendant No. 2 in the branch of defendant No. 1 got a false case registered against the plaintiff, as a result of which the plaintiff was placed under suspension vide order dated 6.5.1974. One Gurdit Singh, Assistant Manager working with defendant No. 2 was also challaned alongwith the plaintiff in that criminal case in the Court of Chief Judicial Magistrate, Gurdaspur who acquitted both the accused i.e. plaintiff and Gurdit Singh on 26.11.1977. During the pendency of the criminal trial, plaintiff was charge sheeted alongwith Gurdit Singh on 4.12.1975. The detailed reply was given to the charge sheet on 21.1.1976. During the pendency of the criminal case of the departmental proceedings, the case was also referred to the Arbitrator who gave findings in his favour and plaintiff was exonerated of the charges levelled against him. Department also filed appeal against the decision of arbitrator which was also dismissed by the Assistant Registrar Cooperative Society. Defendant No. 2 filed a revision against the orders of the Appellate Authority and that revision was also dismissed by the Deputy Secretary on 31.5.1983. After the completion of the enquiry, the defendant No. 1 conveyed orders dated 13.7.1984 referred to above. Similarly, the orders dated 28.1.1985 were conveyed vide endorsement No. CC/Sr.Acctt. 33/3414-16 dated 6.2.1985 treating the suspension period of the plaintiff as a leave of kind due. The plaintiff alleges that these two orders are illegal because as joint enquiry was held against the plaintiff and Gurdit Singh was illegal and it was so held by the Civil Court in its judgment dated 24.10.1985 passed in civil suit No. 216 of 18.9.1984 decided by the Court of Sh. O.P. Goel, Additional Senior Sub Judge, Gurdaspur. Further the Enquiry Officer could not sit over the judgment of the criminal Court. The charge sheet issued to the plaintiff was illegal, without
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