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1963 Supreme(MP) 49

High Court Of Madhya Pradesh
P. V. Dixit, C. J. and S. P. Bhargava, J.
KRISHNA CHANDRA GUPTA RAJARAM GUPTA - Appellant
Versus
REGISTRAR, CO-OPERATIVE SOCIETIES - Respondents
Misc. Petn. 11 Of 1963
Decided On : 04/17/1963

Advocates Appeared:
H.L.KHASKALAM, N.N.Pande, R.K.Pandey

The Board of Directors of a co-operative society registered under the Co-operative Societies Act, 1912, has the power to dismiss its employees under the bye-laws of the society, and the principles of natural justice do not apply to such dismissals.

Headnote:

CO-OPERATIVE SOCIETIES - SERVICE CONDITIONS - DISMISSAL OF EMPLOYEE - POWER OF BOARD OF DIRECTORS - PROCEDURE - PRINCIPLES OF NATURAL JUSTICE - APPLICABILITY.

Fact of the Case:

The petitioner, employed as Assistant Manager-cum-Accountant in the Dubey Co-operative Commercial Bank Limited, was dismissed from service by the Board of Directors for misconduct. The petitioner challenged the order of dismissal, arguing that the Working Committee had no power to dismiss him, that the order was retrospective and violative of natural justice principles.

Finding of the Court:

The Court held that the Board of Directors had the power to dismiss the petitioner under the bye-laws of the Bank, and that the Working Committee had been delegated this power. The Court further held that the petitioner was not entitled to salary during the period of suspension, as the order of suspension effectively suspended the entire contract of service. The Court also held that the principles of natural justice did not apply in this case, as the Board of Directors or the Working Committee were not discharging quasi-judicial duties.

Issues: 1. Whether the Working Committee had the power to dismiss the petitioner? 2. Whether the order of dismissal was retrospective and violative of natural justice principles?

Ratio Decidendi: 1. The Court held that the Board of Directors had the power to dismiss the petitioner under Clause (v) of Bye-law 36 of the Bank's bye-laws, which gave the Board the power to "appoint, confirm, terminate, accept resignation, dismiss, suspend or otherwise punish any officer or servant paid by the Bank." 2. The Court held that the order of dismissal was not retrospective, as it was effective from the date of its making. The Court also held that the principles of natural justice did not apply in this case, as the Board of Directors or the Working Committee were not discharging quasi-judicial duties.

Final Decision: The Court dismissed the petition, holding that the order of dismissal was valid and that the petitioner was not entitled to any relief.

DIXIT, C. J.

( 1 ) BY this application under Articles 226 and 227 of the Constitution of India, the petitioner, who was employed in the Dubey Co-operative Commercial Bank Limited, as Assistant Manager-cum-Accountant, prays for the issue of a writ of 'certiorari' for quashing an order of the respondent No. 3, the Board of Directors of the said Bank, dismissing him from service.

( 2 ) THE applicant was appointed to the post of Assistant Manager-cum-Accountant on 16th June 1959 by an order passed by the Chairman of the Board of Directors. He was appointed on a fixed salary of Rs. 200/- p. m. and placed on probation for a period of twelve months. Some months after his appointment, when certain mistakes and irregularities committed by the petitioner were brought to the notice of the Board of Directors, the petitioner was cautioned to be careful in the maintenance of accounts. In March 1960, Bhagwat Prasad, a peon of the Bank, made a complaint to the chairman that the petitioner had abused him and slapped him on 10th March 1960. In the same month, a complaint was made by Messrs. N. 6. Brothers, Bilaspur, against the petitioner with regard to the settlement of a loan of Rs. 500/ -. The Working Committee of the Bank, therefore, passed a resolution on 17th March 1960 suspending the applicant. On 18th March 1960 a letter was addressed to the petitioner communicating this resolution of the Working committee, and asking the applicant to express his regret for his misbehaviour towards Bhagwat Prasad. In that letter a reference was also made to the complaint made by Messrs. N. G. Brothers and the applicant was asked to give his explanation with regard to all matters within ten days. The applicant did not give any reply. He, however, addressed a letter to the Chairman of the Board of directors on 2nd April 1960 tendering his apology for having slapped Bhagwat prasad. He also expressed his regret for the acts of his complained against by messrs. N. G. Brothers. On 28th March 1960 the Working Committee passed a resolution dismissing the petitioner with effect from 18th March 1960, that is, from the date he was suspended.

( 3 ) SHRI Pande, learned counsel appearing for the petitioner, argued that the order passed by the Working Committee dismissing the petitioner from service was invalid for the reasons: that the Working Committee had no power to dismiss or suspend him and the order of dismissal could not in any case be given retrospective effect as from the date of suspension, and that it was made by the working Committee without giving to the applicant a reasonable opportunity of meeting the charges on which the Working Committee based its decision to dismiss the applicant from service. It was said that the petitioner was not given any notice to show cause against the punishment of dismissal; that no statement of allegations or charges was furnished to him and no enquiry of any kind, was held by the Working Committee; and that the order of dismissal was passed violating all rules of natural justice.

( 4 ) IN our opinion, alt these contentions are devoid cf any substance and are based on a total misconception of the conditions of service of the employees of a body such as the Bank in which the petitioner was employed. The Dubey Co-operative commercial Bank Ltd. , Bilaspur, is a society under the Co-operative Societies Act, 1912. Its affairs are regulated by the bye-laws framed by the society subject to the provisions of the Co-operative Societies Act, 1912. The bye-laws framed by the Bank set out its object and provide for membership, capital, constitution of the board of Directors, powers and duties of the Board of Directors, powers and duties of the Working Committee, and other matters. Clause (v) of Bye-law 36 gives to the Board of Directors the power "to appoint, confirm, terminate, accept resignation, dismiss, suspend or otherwise punish any officer or servant paid by the Bank or to remove or if necessary to proceed against any officer or









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