High Court Of Madhya Pradesh
A. H. Khan and H. R. Krishnan, JJ.
RAMNATH SHARMA - Appellant
Versus
STATE OF M.B. - Respondents
Civil Misc. Case 56 Of 1955
Decided On : 12/30/1958
CO-OPERATIVE SOCIETIES - WRIT JURISDICTION - EMPLOYEES OF CO-OPERATIVE SOCIETIES - WHETHER HIGH COURT CAN ENTERTAIN APPLICATIONS UNDER ARTICLE 226 OF THE CONSTITUTION - PRINCIPLES OF NATURAL JUSTICE - WHETHER HIGH COURT CAN INSIST ON CO-OPERATIVE SOCIETIES FOLLOWING ARTICLE 311 OF THE CONSTITUTION - EXECUTIVE DIRECTION GIVEN BY STATUTE TO THE REGISTRAR CO-OPERATIVE SOCIETIES - WHETHER SUBJECT TO HIGH COURT'S SUPERVISION OR DIRECTION EXERCISED BY WRITS UNDER ARTICLE 226 OF THE CONSTITUTION.
Fact of the Case:
The Manager of the Gird District Co-operative Bank Ltd. was removed from service by the Registrar Co-operative Societies under Rule 52 (2) of the Gwalior Co-operative societies Rules, 1997. The Manager challenged the order of removal by filing a writ petition under Article 226 of the Constitution.
Finding of the Court:
The High Court held that it did not have the jurisdiction to entertain the writ petition filed by the Manager. The Court held that the Registrar Co-operative Societies was exercising executive power and that the High Court could not interfere with the exercise of such power unless it was shown that the Registrar had acted illegally or in violation of the principles of natural justice.
Issues: 1. Whether the High Court has jurisdiction to entertain applications under Article 226 of the Constitution by employees of a co-operative society? 2. Whether the High Court can insist on a co-operative society following Article 311 of the Constitution in dealing with its employees? 3. Whether the powers of executive direction given by statute to the Registrar Co-operative Societies are subject to the High Court's supervision or direction exercised by writs under Article 226 of the Constitution?
Ratio Decidendi: 1. The High Court does not have jurisdiction to entertain applications under Article 226 of the Constitution by employees of a co-operative society. This is because co-operative societies are not State as defined in Article 12 of the Constitution and, therefore, cannot be directed by writ. 2. The High Court cannot insist on a co-operative society following Article 311 of the Constitution in dealing with its employees. This is because Article 311 applies only to members of the civil service of the State or of the Union. 3. The powers of executive direction given by statute to the Registrar Co-operative Societies are not subject to the High Court's supervision or direction exercised by writs under Article 226 of the Constitution. This is because the Registrar is exercising executive power and the High Court cannot interfere with the exercise of such power unless it is shown that the Registrar has acted illegally or in violation of the principles of natural justice.
Final Decision: The High Court dismissed the writ petition filed by the Manager.
( 1 ) THIS is an application under Article 226 of the Constitution, by the Manager of the Gird District Co-operative Bank Ltd. , who was removed by the order of the registrar Co-operative Societies, under Rule 52 (2) of the Gwalior Co-operative societies Rules, Sm. 1997 framed under Section 78 of the Gwalior Co-operative societies Act, 1997, continuing at the time to be in force, as being deemed to have been made under the corresponding Section 82 of the Madhya Bharat Cooperative societies Act, 1. 955,
( 2 ) THE questions for consideration are:
(1) Whether, in general, the High Court will entertain applications under article 226 of the Constitution by the employees of a Bank or a corporation (other than a statutory corporation created by statute), (2) Whether on the principles of natural justice the High Court can insist on such a corporation following the Article 311 of the Constitution in dealing with its employees, and (3) Whether powers of executive direction given by statute to the registrar Co-operative Societies to check abuses and secure the proper function of co-operative banks, are subject to the High Court's supervision or direction exercised by writs under Article 226 of the constitution.
( 3 ) THE facts of the case are simple. The applicant used to be the manager of the gird District Co-operative Bank Ltd. Sometime towards the end of 1955 the Bank's affairs were found to be in unsatisfactory state, and the Registrar, Co-operative societies, made certain investigations. On 1-10-1955 he wrote to the Vice-Chairman (the Chairman being ex-officio the Collector) who is the person in charge of the day-to-day working of the Bank, regarding irregularities noticed in the transactions or the Bank's Branch at Dabra. The Registrar held the Manager as well as the Agent responsible, and wanted to know of the action the Board (of the Bank) was taking or had taken against him. No time limit was fixed for the Board's reply, which obviously meant that it should be immediate or early; the Registrar, in fact, was already camping at Gwalior to see the matter through. Besides this, he wanted certain loans to be recovered and the losses made good and threatened to hold the Board itself responsible. For this he gave time till the 5th November. I am mentioning this particularly, because one argument of Shri Dubey, counsel for the applicant, was that the 5th November was the date fixed for the Board's explanation of what it was doing in regard to the management; that is not correct. The Registrar waited for a week; as no reply was given by the Board, he wrote to the Vice-chairman on the 7th October holding the Manager and the Agent to be responsible for the irregularities and directing under Rule 52 (1) of the Gwalior Cooperative societies Rules, 1997 that these employees, being unfit to hold any responsible post under the Bank, should be removed from service. He wanted a compliance report by 9-10-55.
( 4 ) THE Bank, however, was not anxious to obey the order of the Registrar. On the contrary. it entered into a lengthy correspondence and comments indicating that it was not prepared to obey the Registrar. Rule 52 has provided for such a contingency also. Normally, after investigating and hearing the bank, if it has anything to say, the Registrar will order it to remove the offending employee. But if it happens, as here, that the bank or the society contumaciously refuses to obey, the Registrar himself can order under Rule 52 (2) that the employee is removed. A pertinaciously bad society or bank can be dealt with, by the supersession of the Board. In fact, we are told the Board has been superseded, and that another application has been filed by it. But that is another matter. ( 5 ) THE first question in all such cases is, whether, generally speaking, it would be proper for a High Court to issue a writ or direction on a company or a cooperative society, for "any purpose other than the enforcement of fundamental rights. " thoug
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