Supreme Court of India
S.S. RANAversusREGISTRAR, CO-OPERATIVE SOCIETIES AND ANR.
- Citation
- 2006 INSC 251
- Decided
- 25 April 2006
- Disposal
- Dismissed
- Bench
- S B SINHA
Holding
The co‑operative bank is not a State within Article 12 and the termination did not violate any mandatory statutory provision, so the order of termination stands.
Summary
S.S. Rana, a Branch Manager of Kangra Central Co‑operative Bank Ltd., was terminated after a disciplinary proceeding under Rule 56(b) of the bank's employee rules read with Section 35‑B(4) of the Himachal Pradesh Co‑operative Societies Act, 1968. He appealed the termination, which was dismissed, and then filed a writ petition in the Himachal Pradesh High Court alleging that the bank was a 'State' within Article 12 of the Constitution and that his termination violated principles of natural justice. The High Court dismissed the petition as non‑maintainable, holding that the bank was not a State; the matter was taken on appeal to the Supreme Court. The Supreme Court examined whether the co‑operative bank qualified as a State under Article 12, applying the tests from Ajay Hasia and related precedents, and found that the bank was not created under any statute, the State did not have deep and pervasive control, and it was not a majority shareholder. Consequently, the Court held that the termination did not breach any mandatory provision of the Act or Rules, and the writ petition remained untenable. The appeal was dismissed, upholding the termination order.
Issues considered
- Whether a co‑operative bank is a 'State' within the meaning of Article 12 of the Constitution of India.
- Whether the termination of the employee complied with the mandatory provisions of the Himachal Pradesh Co‑operative Societies Act, 1968 and the Rules made thereunder.
- Whether the principles of natural justice were observed in the disciplinary proceeding.
Legislation cited
Subjects
Article 12State within ConstitutionCo‑operative societyWrit petitionDisciplinary terminationNatural justicePublic authority
Judgment
S.S. RANA A
v.
REGISTRAR, CO-OPERATIVE SOCIETIES AND ANR.
-• APRIL 25, 2006
[S.B. SINHA AND P.P. NAOLEKAR, JJ.] B
Constitution of India-Article 12-Himachal Pradesh Co-operative
Societies Act, 1968-Sections, 31, 34 & 35-B & 36-Himachal Pradesh Co-
operative Societies Rules, 1971-Rule 56---0rder of termination passed against C
delinquent employee-Writ Petition by the employee before High Court-Writ
Petition dismissed as not maintainable holding that the Co-operative Bank is
not a State-Correctness of-Held, regulations of a Co-operative bank under
the Act does not render its activities as subject to control of the State-On
facts, the co-operative bank is not created under any Statute-State does not
exercise any direct or indirect control over the bank-Hence, the bank is not D
a State-Delinquent employee has not proved any violation of any provisions
of the Act by the Bank in passing the order of termination-Hence, the order
of termination upheld.
Respondent-Co-operative bank initiated disciplinary proceeding
against appellant, who was working as a Branch Manager, under Rule E
56(b) of the Kangra Central Co-operative Bank Employees (Terms of
Employment and Working Conditions) Rules, 1980 read with Section 35-
B(4) of the Himachal Pradesh Co-operative Societies Act, 1968. The
appellant was found guilty and an order of termination was passed against
him. The appellant filed an appeal before appellate authority which was F
dismissed. A Writ Petition filed by the appellant before High Court was
dismissed as not maintainable on the ground that the co-operative bank
is not a 'State' under Article 12 of the Constitution of India.
In appeal to this Court, the appellant contended that the respondent-
co-operative bank is a 'State' under Article 12 of the Constitution since G
its activities is to lend money to the agriculturists; that the respondents
did not comply with the principles of natural justice as required under
the Rules and the Act; and that the order of termination is violative of
the provisions of the Rules since a copy of inquiry report was not furnished
to him.
311 H
312 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.
A The respondents contended that the Co-operative bank is not a
'State' under Article 12 of the Constitution; and that the State has no deep
and pervasive control over the affairs of the Society.
Dismissing the appeal, the Court
B HELD: 1.1. Respondent Co-operative bank has not been created
under any statute. Its functions, like any other Co-operative Society, are
mainly regulated in terms of the provisions of Himachal Pradesh Co-
operative Societies Act, 1968 except as provided in its bye-laws. The State
has no say in the functions of the bank. Membership, acquisition of shares
and all other matters are governed by the bye-laws of the bank framed
C under the Act. Rule 56 of the Himachal Pradesh Co-operative Societies
Rules, 1971 does to contain any provision in terms whereof any legal right
as such is conferred upon an officer of the Society. 1321-G, G; 322-AI
1.2. It has not been shown that the State exercises any direct or
D indirect control over the affairs of the Society. The State is not a majority
shareholders. The State has the power only to nominate one director. It
cannot, thus, be said that the State exercises any functional control over
the affairs of the Society in the sense that the majority directors are
nominated by the State. The general regulations under an Act, like
Companies Act or the Co-operative Societies Act would not render the
E activities of a company or a society as subject to control of the State. Such
control in terms of the provisions of the Act are meant to ensure proper
functioning of the Society and that State or statutory authorities would
have nothing to do with its day-to-day functions. The respondent-bank is
not a State within the meaning of Article 12 of the Constitution of India.
F It has not been shown that in terminating the services of the appellant,
the respondent has violated any mandatory provisions of the Act or the
Rules framed thereunder. (322-A, B, E, F; 324-B; 325-FI
Pradeep Kumar Biswas v. /ndian Institute ofChemical Biology and Ors.,
(200215 SCC 111 CB; Ajay Hasia v. Khalid Mujib Sehravardi, (198111 SCC
G 722; Zoroastrian Coop. Housing Society Ltd. v. District Registrar, Coop.
Societies (Urban) and Ors., 120051 5 SCC 632; Sabajit Tewary v. Union of
India and Ors .. [1975) I SCC 485; Gayatri Dev. Mousumi Cooperative
Housing Society Ltd. and Ors., (2004) 5 SCC 90; U.P. State Cooperative Land
Development Ba11k Ltd. v. Chandra Bhan Dubey and Ors., 119991 I SCC 741;
Ram Sahan Rai v. Sachi Samanaya Prabandhak and Anr.. (20041 3 SCC 323;
H Nayagarh Cooperative Central Bank Ltd and Anr. v. Narayan Rath and Anr..
S.S. RANA v. REGISTRAR, CO-OPERATIVE SOCIETIES [SINHA, J.] 313
(1977) 3 SCC 576 and Bholanath Roy and Ors. v. State of West Bengal and A
Ors., (1976) Vol. l 502, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6052 of2004.
From the Judgment & Final Order dated 6.6.2003 of the High Court of
Himachal Pradesh in C.W.P. No. 331/1996. B
Vijay Kumar, Atul Shanna and Mayuri Vats for Vishwajit Singh for
the Appellant.
J.S. Attri, AAG, HP and Jodh Singh Mehta for the Respondent.
The Judgment of the Court was delivered by
c
S.B. SINHA, J. The petitioner was working as a Branch Manager in
the Kangra Central Co-operative Bank Ltd. (Respondent No.2, "Society"). A
disciplinary proceeding was initiated against him purporting to be in tenns of
Rule 56(b) of the Kangra Central Co-operative Bank Employees (Tenns of D
Employment and Working Conditions) Rules, 1980 (for short the "Rules")
read with Section 35-B(4) of the Himachal Pradesh Co-operative Societies
Act, 1968 (for short the "Act"). He was found guilty therein. The Managing
Director of the Society, by an order dated 18.11.1993, tenninated his services
purported to be in exercise of his power under Rule 2(p) of Appendix l(a)
of the Rules. In the meantime, an Administ{ator was appointed by the State E
to manage its affairs. The appellant herein preferred an appeal against the
said order terminating his services before the Administrator on or about
2.12.1993. However, the Administrator had no occasion to deal with the said
appeal. By an order dated 18. I 1.1995, the Board of Directors of the Respondent
No.2 dismissed the said appeal. He reached the age of superannuation on F
30th September, 1996.
The appellant filed a writ petition before the High Court of Himachal
Pradesh at Shimla, inter alia, praying for quashing of the order oftennination
dated 18.11.1995, as also the order of the appellate authority dated 16.1.1996.
He further prayed for grant of all consequential benefits pursuant to or in G
furtherance of the quashing of the said order of punishment.
Ti1e writ petition filed by the appellant was based on the premise that
the 1st respondent is a 'State' within the meaning of Article 12 of the
Constitution oflndia. A Division Bench of the Himachal Pradesh High Court,
by reason of the impugned _iudgment and order dated 6.6.2003, dismissed the H
314 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.
A said writ petition holding that the writ petition was not maintainable. The
appellant is, thus, before us.
Mr. Vijay Kumar, learned counsel appearing on behalf of the appellant
submitted that the High Court committed a serious error in coming to the
conclusion that respondent No. I is not a 'State' within the meaning of Article
B 12 of the Constitution of India. According to the learned counsel, the activities
of the Co-operative Society being to lend money to the agriculturists, the
same would come within the purview of the law laid down by a Seven Judge
Bench of this Court in Pradeep Kumar Biswas v. Indian Institute ofChemical
Biology & Ors., reported in [2002) 5 SCC 111. It was further contended that
C in temls of the provisions of the Rules framed under the Himachal Pradesh
Co-operative Societies Act, 1968, the respondent No. I was obligated to comply
with the principles of natural justice. It was submitted that the impugned
order is violative of the provisions of the Rules as, inter alia, a copy of the
inquiry report was not supplied to the Appellant, it was wholly unsustainable.
D Mr. J.S. Attri, the learned Additional Advocate General for the State of
Himachal Pradesh, on the other hand, would support the judgment contending
that it is not a case where the State had deep and pervasive control over the
affairs of the Society. It was pointed out that out of three directors in the
Board, the State could appoint only one. The decision of the Board of Directors
in all matters is final. The membership of the State in the Co-operative
E Society was limited.
The legislature of the State of Himachal Pradesh enacted the Himachal
Pradesh Co-operative Societies Act, 1968; some of the relevant provisions
whereof are:
F "31. Final authority in co-operative society:- The final authority in a
co-operative society shall vest in the general body of members
in a general meeting:
Provided that where the bye-laws of a co-operative society
provide for the constitution of a smaller body consisting of
G delegates of the society elected or selected in accordance with
such bye-laws, the smaller body shall exercise such powers of
the general body as may be prescribed or as may be specified in
the bye-laws of the society;
xxx xxx xxx
H
S.S. RANA v. REGISTRAR, CO-OPERATIVE SOCIETIES [SINHA, J.] 315
34. Managing Committee:- The management of every society shall A
vest in a managing committee constituted in accordance with the
rules and the bye-laws, which shall exercise such powers and
perform such duties as may be conferred or imposed respectively,
by this Act, the rules and the bye-laws.
xxx xxx xxx B
35-B. Appointment, powers and functions of Managing Directors:-
(!) Where the Government has subscribed to the share capital of
a co-operative society to the extent of rupees five lakhs or more,
the Government may, notwithstanding anything contained in the
bye laws of the society, nominate another member in addition to C
those nominated under section 35 and appoint him as Managing
Director:
Provided that no person shall be appointed as Managing
Director of a co-operative society unless he is a member of the
Indian Administrative Service or Himachal Pradesh D
Administrative Service or Class-I Officer of the co-operative
Department, except the Himachal Pradesh State Co-operative Land
Development Bank and the Himachal Pradesh State Co-operative
Milk Federation where technical persons may by appointed as
Managing Directors.
E
(2) A person nominated and appointed as the Managing Director
under sub-section (I) shall be ex-officio member of the committee
and shall hold office during the pleasure of the State Government
and shall have a right to participate in the deliberations of the
committee and shall also have the right to vote.
(3) The Managing Director appointed under sub-section (!) shall
F
exercise such powers as are assigned to him under the bye-laws
or delegated to him by the committee. He shall discharge all
such functions, consistent with the bye-laws or delegated to him
by the committee. He shall discharge all such functions, consistent
with the bye-laws, as are assigned to him by the Government or G
the Registrar. He shall work under the superintendence and control
of the committee.
(4) The Managing Director of a co-operative society shall be its
principal executive officer. All employees of the society shall
function and perfonn their duties under his superintendence and H
316 SUPREME COURT REPORTS (2006] SUPP. I S.C.R.
A control.
(5) The Managing director appointed under sub-section (I) shall be
deemed to be on deputation with the society and his salary and
allowances, as determined by the State Government, shall be
paid from the funds of the society.
B 36. Powers to depute Government servant to manage affairs of a co-
operative society:- The State Government may, on the application
of a society and on such conditions as may be prescribed, depute
a Government servant to the service of the society for the purpose
of managing its affairs and the Government Servant so deputed
c shall exercise such powers and perform such duties as may be
prescribed.
xxx xxx xxx
70. Access to documents:- The Registrar and, subject to any restriction
prescribed, an auditor, arbitrator or any person conducting
D supervision or inspection or audit or inquiry shall at all reasonable
times have free access to the books, accounts, documents,
securities, cash and other properties, belonging to or in the custody
of a society."
Pursuant to or in furtherance of the rule making power contained in the
E said Act, the State made Rules known as the Himachal Pradesh Co-operative
Societies Rules, J971, some of which are relevant for the purpose of this
case. Rules are as under:
"38. Constitution of Managing Committee :
F (I) The managing committee of a Co-operative society shall be
constituted by:-
(a) election from amongst the members of the society at the
annual/special general meeting;
(b) appointment by the Registrar in the manner provided in the
G Rule 39;
(c) nominees of the Government under section 35 of the Act;
and
(d) nominees of the other Co-operative Societies as provided in
H the bye-laws.
S.S. RANA v. REGISTRAR, CO-OPERATIVE SOCIETIES [SINHA, J.] 317
(2) The managing committee of the society shall have not less than A
five nor more than twenty-one members, including the
Government nominee as may be fixed in the bye-laws.
(3) The terms of the Managing Committees constituted under sub-
rule (I) shall be-
B
(a) in relation to Primary
Societies ..... 2 years;
(b) in relation to
Secondary Societies and .... .3 years;
(c) in relation to apex societies .... .4 years; c
Provided that the out-going managing committee shall, unless the
State Government otherwise directs, continue to function till another
Managing Committee is constituted under these rules;
Provided further that no person shall be eligible to hold office of D
President or Vice-President or elected Member of the Managing
Committee continuously for more than two terms unless a period of
two years has elapsed after then expiry of the term of the Managing
Committee in which he last hold office of President or Vice-President
or Vice-President or elected member.
E
(4) The committee shall, as soon as may be possible, elect from
among its members a President, Vice President and such other
officers as are specified in the bye-laws unless they provide for
such election by general meeting.
F
(5) A casual vacancy in the office of an elected member shall be
filled up by co-option from amongst the members of the society
by the managing committee. The managing committee member
so co-opted shall qualify all the conditions laid.down in the rules
for membership of the committee· of a society and shall retire
within 90 days or at the next annual general meeting, whichever G
is earlier, and the vacancy thus caused shall be filled up at such
meeting by election of a managing committee member in whose
place originally occurred.
(6) Any dispute relating to the election to a committee of a member H
318 SUPREME COURT REPORTS [2006) SUPP. I S.C.R.
A or an officer shall be referred to the Registrar under section 72
of the Act within 30 days from the date of declaration of the
result of such election.
39. Appointment of Managing Committee Member by the Registrar-
(!) Notwithstanding any limits prescribed in the bye-laws, in
B order to represent appropriate interest, the Registrar shall have
pow!!rS to appoint an additional number of members for the
Managing Committee, not exceeding one-third of the number of
elected member:
c Provided that the total number of committee members so appointed
or nominated and elected under clauses (a) (b), (c) and (d) of sub-rule
(I) of rule, 38 shall not exceed the maximum limit laid down under
sub-rule (2) of rule 38.
I. (I-A) Out of the persons appointed under sub-rule (I) one shall
D be a person belonging to scheduled castes, one belonging to
scheduled tribes and the remaining, if any, representing other
appropriate interests including the interests of women, unless a
member each belonging to the Scheduled castes and scheduled
tribes and representing other interests has already been elected
on such Committee.
E
2. (2) The members so appointed under sub-rules (I) and (I-A) shall
hold office till the next election of the Managing Committee or
till another person is appointed in his place, whichever is earlier
and shall have the right to vote. The Registrar shall either confirm
their membership to the committee or shall appoint other persons
F in their place for the next term of the Committee.
(3) Managing Committee members appointed under this rule may or
may not be the members of the society but should have all the
qualifications prescribed for membership of a Co-operative
Society and the managing committee.
G
(4) If a vacancy occurs in the office of an appointed member on the
managing committee the vacancy shall be filled up by an
appointment by the Registrar, and not by co-option.
The rule empowers the Registrar to make appointments on the
H managing committee of a society to represent certain appropriate
S.S. RANA v. REGISTRAR, CO-OPERATIVE SOCIETIES [SINHA, J.] 319
interests not represented on the committee. The appointments made A
under this rule shall be subject to the provisions contained under
sub-rule 2 of rule No.38.
~ xxx xxx xxx
40. Proportion of individuals and societies for constituting committee B
- In a Co-operative Society, the membership of which is not exclusively
confined to individuals the representation of individuals and societies
on the committee and the general body shall be such as may be laid
down in the bye-laws of the Co-operative Society.
-
50. Duties of Managing Committee. - The managing committee shall c
observe in all their transactions the provisions of the Act, rules and
bye-laws, and in particular, shall perform the following duties:
..._
(a) to receive and disburse money;
(b) to maintain true accounts of money received and expended, and
D
accounts of the assets and liabilities;
(c) to prepare for submission to the annual general meeting -
( 1) Receipt and Disbursement Statement;
(2) Balance Sheet;
E
(3) Trading and Profit and Loss Account;
(4) Appropriation of Profits;
(d) to prepare the statements of accounts required at audit and to
place them before the Auditor;
F
(e) to prepare, and submit all statements and returns, required by the
Registrar in such form as he may direct;
(t) to enter accounts of the society regularly and periodically in
proper books;
(g) to maintain a register of members up to date;
G
~ (h) to facilitate the inspection of books and audit of accounts of the
society by those entitled to inspect/audit them;
(i) to convene general meetings;
H
320 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.
A U) to convene the annual general meeting in due time;
(k) to ensure that loans and advances are applied for the purposes
for which they are made, and that they are punctually repaid;
(I) to examine and take prompt action in cases of all arrears and
defauits in repayments of loans and advances;
B
(m) to perform such other duties as may be entrusted by the general
meeting; and
(n) in general to carry on the business of the society in accordance
with its bye-laws.
c xxx xxx xxx
56. Officers and employees of Co-operative Societies -
(I) Notwithstanding anything contained in the bye-laws of a society,
no Co-operative Society shall appoint any person as its paid
D officer or employees in any category of service unless he possesses
the qualifications and furnishes the security, if so specified by
the Registrar, from time to time, for such category of service in
the society, or for the class of society to which it belongs. The
conditions of service of the employees of the societies shall be
E specified by the Registrar.
(2) No Co-operative society shall retain in service any paid officer
or employee, if he does not acquire the qualification or furnish
-
the security as is referred to in sub-rule (I) within such time as
the Registrar may direct.
F (3) No Co-operative society shall employ a salaried officer or servant
with total monthly emoluments exceeding rupees 'one thousand'
without the previous permission of the Registrar. The promotion
of an employee to a higher post shall be deemed to be an
appointment under this sub-rule.
G (4) The Registrar may for special reasons to be recorded in writing
relax in respect of any paid officer or employee. The provisions
of this rule in regard to the qualifications he should possess or
the security he should furnish.
(5) "Where, in the course of an audit under section 61, or an
H
S.S. RANA v. REGISTRAR, CO-OPERATIVE SOCIETIES [SINHA, J.] 321
inspection under section 65 or an inspection under section 66, or A
an inquiry under section 67, it is brought to the notice of the
Registrar that the paid officer or servant of the society had
committed, or has been otherwise responsible for mis-
appropriation breach of trust or other offence, in relation to the
society or has willfully neglected or failed to discharge his duties B
and functions as enjoined on him under the Act, rules or bye-
laws or is otherwise responsible for any act or omission thereby
adversely affecting the interest of the society, the Registrar if in
his opinion there is prima facie evidence against the paid officer
or servant, and suspension of such paid officer or servant is
necessary in the interest of the society, direct the committee of C
the society, pending the investigation and disposal of the matter,
as the case may be, to place or cause to be placed such paid
officer or servant under suspension from such date and for such
period as may be specified by him.
(6) On receipt of a direction from the Registrar under sub-rule (5), D
the committee of society shall notwithstanding any provision to
the contrary in the bye-laws, place or cause to be placed the paid
officer or servant under suspension forthwith.
(7) If the committee fails to comply with the direction issued under
sub-rule (5), the Registrar may make an order placing such paid E
officer or servant under suspension from such date and for such
period as he may specify in the order and thereupon the paid
officer or servant, as the case may be, shall be under suspension.
(8) The officer or servant suspended under this rule shall be re-
instated only after the previous approval of the Registrar." F
Respondent No. I-Co-operative Society also framed its bye-laws in terms
of Rule 2(c) whereof the Board would mean all Directors of the Bank or the
Managing Committee.
It is not in dispute that the Society has not been constituted under an
Act. Its functions like any other Co-operative Society are mainly regulated in G
terms of the provisions of the Act, except as provided in the bye-laws of the
Society. The State has no say in the functions of the Society. Membership,
acquisition of shares and all other matters are governed by the bye-laws
framed under the Act. The terms and conditions of an officer of the Co-
operative Society, indisputably, are governed by the Rules. Rule 56, to which H
322 SUPREME COURT REPORTS (2006) SUPP. I S.C.R.
A reference has been made by Mr. Vijay Kumar, does not contain any provision
in terms whereof any legal right as such is conferred upon an officer of the
Society.
It has not been shown before us that the State exercises any direct or
indirect control over the affairs of the Society for deep and pervasive control.
B The State furthermore is not the majority shareholder. The State has the
power only to nominate one director. It cannot, thus, be said that the State
exercises any functional control over the affairs of the Society in the sense
that the majority directors are nominated by the State. For arriving at the
conclusion that the State has a deep and pervasive control over the Society,
C several other relevant questions are required to be considered, namely: (I)
How the Society was created?; (2) Whether it enjoys any monopoly character?;
(3) Do the functions of the Society partake to statutory functions or public
functions?; and (4) Can it be characterized as public Authority?
The respondent No. I-Society does not answer any of the afore-mentioned
D tests. In the case of a non-statutory society, the control thereover would mean
that the same satisfies the tests laid down by this Court in Ajay Hasia v.
Khalid Mujib Sehravardi, [ 1981] I SCC 722. [See Zoroastrian Coop. Housing
Society Ltd. v. District Registrar, Coop. Societies (Urban) & Ors., reported
in 12oos1 5 sec 632. J
E It is well settled that general regulations under an Act, like Companies
Act or the Co-operative Societies Act, would not render the activities of a
company or a society as subject to control of the State. Such control in terms
of the provisions of the Act are meant to ensure proper functioning of the
Society and the State or statutory authorities would have nothing to do with
F its day-to-day functions.
The decision of the Seven Judge Bench of this Court in Pradeep Kumar
Biswas (supra), whereupon strong reliance has been placed, has no application
in the instant case. In that case, the Bench was deciding a question as to
whether in view of the subsequent decisions of this Court, the law was
G correctly laid down in Sabajit Tewary v. Union of India & Ors., (1975] I
sec 485, and it not whether the same deserved to be overruled. The majority
opined that the Council of Scientific and Industrial Research (CSIR) was a
'State' within the meaning of Article 12 of the Constitution of India. This
Court noticed the history of the formation thereof, its objects and functions,
its management and control as also the extent of financial aid received by it.
H
S.S. RANA v. REGISTRAR, CO-OPERATIVE SOCIE}IES [SINHA, J.] 323
Apart from the said fact it was noticed by reason of an /ppropriate notification A
issued by the Central Government that CSIR was amenable to the jurisdiction
of the Central Administrative Tribunal in terms of Section 14(2) of the
Administrative Tribunals Act, 1985. It was on the aforementioned premises
this Court opined that Sabhajit Tewary (supra) did not lay down the correct
law. This Court reiterated the following six tests laid down in Ajay Hasia v. B
Khalid Mujib Sehravardi, [1981] I SCC 722:
"(I) One thing is clear that if the entire share capital of the
corporation is held by Government, it would go a long way towards
indicating that the corporation is an instrumentality or agency of
Government.
c
(2) Where the financial assistance of the State is so much as to
meet almost entire expenditure of the corporation, it would afford
some indication of the corporation being impregnated with
Governmental character.
(3) It may also be relevant factor .... whether the corporation enjoys D
monopoly status which is State conferred or State protected.
(4) Existence of deep and pervasive State control may afford an
indication that the corporation is a State agency or instrumentality.
(5) If the functions of the corporation are of public importance E
and closely related to Governmental functions, it would be a relevant
factor in classifying the corporation as an instrumentality or agency
of Government.
(6) 'Specifically, if a department of Government is transferred to
a corporation, it would be a strong factor supportive of this inference' F
of the corporation being an instrumentality or agency of Government."
This Court further held:
"This picture that ultimately emerges is that the tests formulated
in Ajay Hasia are not a rigid set of principles so that if a body falls G
within any one of them it must, ex hypothesi, be considered to be a
State within the meaning of Article 12. The question in each case
would be whether in the light of the cumulative facts as established,
the body is financially, functionally and administratively dominated
by or under the control of the Government. Such control must be
H
324 SUPREME COURT REPORTS (20061 SUPP. I S.C.R.
A particular to the body in question and must be pervasive. If this is
found then the body is a State within Article 12. On the other hand,
when the control is merely regulatory whether under statute or
otherwise, it would not serve to make the body a State. "
(Emphasis supplied)
B
As the respondent No. I does not satisfy any of the tests laid down in
Pradeep Kumar Biswas (supra), we are of the opinion that the High Court
cannot be said to have committed any error in arriving at a finding that the
respondent-Bank is not a State within the meaning of Article 12 of the
Constitution of India.
c
We are, however, not oblivious of a three judge Bench decision in
Gayatri De v. Mousumi Cooperative Housing Society Ltd. & Ors., [2004) 5
SCC 90, wherein this Court held a writ petition to be maintainable against the
cooperative society only stating:
D "We have, in paragraphs supra, considered the judgments for and
against on the question of maintainability of writ petition. The
judgments cited by the learned Senior Counsel appearing for the
respondents are distinguishable on facts and on law. Those cases are
not cases covered by the appointment of a Special Officer to manage
E the administration of the Society and its affairs. In the instant case,
the Special Officer was appointed by the High Court to discharge the
functions of the Society, therefore, he should be regarded as a public
authority and hence, the writ petition is maintainable."
The said decision, therefore, is of no assistance to us.
F
Our attention has also been drawn to U.P. State Cooperative Land
Development Bank Ltd. v. Chandra Bhan Dubey & Ors., [1999] 1 SCC 741,
wherein the writ petition was held to be maintainable principally on the
ground that it had been created under an Act. Reliance has also been placed
upon Ram Sahan Rai v. Sachiv Samanaya Prabandhak & Anr., [2001] 3 SCC
G 323, wherein again the appellant thus was recruited in a Society constituted
under the U.P. Cooperative Land Development Bank Act, 1964 and this
Court, having examined different provisions of rules, bye-laws and regulations,
was of the firm opinion that the State Government exercised all-pervasive
control over the Bank and moreover its employees were governed by statutory
H rules, prescribing an entire gamut of procedure of initiation of disciplinary
S.S. RANA v. REGISTRAR, CO-OPERATJVE SOCIETIES [SINHA, J.] 325
proceedings by framing a set of charges culminating in inflicting of appropriate A
punishment, after complying with the requirements of giving a show-cause
and an opportunity of hearing to the delinquent.
It is, therefore, evident that in Ram Sahan Rai (supra) also the cooperative
society was held to be established under a statute. We may notice that in
Nayagarh Cooperative Central Bank Ltd. & Anr. v. Narayan Rath & Anr., B
[1977] 3 SCC 576, this Court was of the opinion that
"The High Court has dealt with the question whether a writ petition
can be maintained against a cooperative society, but we are inclined
to the view that the observations made by the High Court and its
decision that such a writ petition is maintainable are not strictly in C
accordance with the decisions of this Court. We would have liked to
go into the question for ourselves, but it is unnecessary to do so as
Respondent 1 by his writ petition, was asking for relief not really
against a cooperative society but in regard to the order which was
passed by the Registrar, who was acting as a statutory authority in the D
purported exercise of powers conferred on him by the Cooperative
Societies Act. The writ petition was in that view maintainable."
. We may notice in some decisions, some High Courts have held wherein
that a writ petition would be maintainable against a society if it is demonstrated
that any mandatory provision of the Act or the rules framed thereunder; have E
been violated by it. [See Bholanath Roy & Ors. v. State of West Bengal &
Ors., reported in (1996) Vol.I Calcutta Law Journal 502.]
The Society has not been created under any statute. It has not been
shown before that in terminating the services of the appellant, the Respondent
has violated any mandatory provisions of the Act or the rules framed F
thereunder. In fact, in the writ petition no such case was made out.
For the foregoing reasons, the appeal being devoid of any merit is
dismissed. However in the facts and circumstances of the case, there shall be
no order as to costs.
G
B.S. Appeal dismissed.
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