Calcutta High Court (Appellete Side)
Bank Employees Association And ... vs The State Of West Bengal And Others on 2 August, 2023
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
WPA No. 15513 of 2023
Malda District Central Cooperative
Bank Employees Association and others
Vs.
The State of West Bengal and others
For the petitioners : Mr. Arnab Saha,
Mr. Abhimanyu Banerjee,
Ms. Roshni Kalam
For the State
Election Commission : Ms. Sonal Sinha,
Mr. Tarun Kumar Chatterjee,
Mr. Sujit Gupta,
Mr. Sayan Datta,
Mr. Soumen Chatterjee
For the
Respondent nos.9 and 10 : Mr. Amarendra Chakraborty
Hearing concluded on : 26.07.2023
Judgment on : 02.08.2023
Sabyasachi Bhattacharyya, J:-
1. The petitioner no.1 is an association of the employees of the Malda
District Central Cooperative Bank, a cooperative bank formed under
the West Bengal Cooperative Societies Act, 2006 (hereinafter referred
to as, "the 2006 Act").
2. The members of the petitioner no.1-Association were deputed in
polling stations for the Panchayat Elections which was concluded
recently in West Bengal. As per Section 6 of the West Bengal State
Election Commission Act, 1994 (for short, "the 1994 Act") and the
Panchayat Laws, as well as the Handbook for Returning Officers
issued by the West Bengal State Election Commission, polling
personnel for the Panchayat Elections were to be deployed from
among employees of the Central and State Governments as well as
local bodies and primary schools and colleges, working under the
State Government.
3. The moot question which arises for consideration in the present case
is whether the Malda District Central Cooperative Bank (in brief, "the
Bank") comes within the purview of Government-run institutions,
which would bring its employees within the fold of Section 6 of the
1994 Act, for the purpose of deputation in polling stations.
4. The Bank, which has been arrayed as respondent no.9, has filed a
short report on the query of Court as to whether the Bank is
Government aided and/or run under Government control, either on
the administrative or on the financial side.
5. With the report, the Bank has also annexed its audited accounts,
primarily the schedule of its balance-sheet and profit and loss
accounts.
6. Apart from citing provisions of the West Bengal Cooperative Societies
Rules, 2011 (hereinafter referred to as, "the 2011 Rules"), it is
disclosed in the Bank's report that, as per audited financial
statements of the Bank as on March 31, 2023, the Government of
West Bengal holds 55,480 shares of Rs.100 each, totaling to Rs.55.48
lakh, in the Bank. Other shareholders, together, hold 9,82,030 shares
of Rs.100 each, totaling to Rs.9,82.03 lakh. The total share capital of
the Bank is Rs.1037.51 lakh.
7. A glance at the schedule of the balance-sheet and profit and loss
accounts of the Bank does not indicate any noticeable influx of
finance directly from the Government.
8. The shareholding pattern overwhelmingly indicates that the State is
not a majority shareholder of the Bank by any stretch of imagination.
9. Hence, it cannot be said that the Bank is either Government aided or
is financially controlled by the Government of West Bengal to such an
extent that it falls within the purview of Article 12 of the Constitution
of India.
10. Admittedly, the Central Executive Officer (CEO) of the Bank is
nominated by the State Government.
11. Rule 56(1) of the 2011 Rules provides that a Government Officer,
when deputed to the service of a cooperative society under Section 53
of the 2006 Act, shall be called the Chief Executive Officer or by
whatever designation called.
12. Sub-rule (2) of Rule 56 stipulates that, subject to such conditions as
the State Government may impose, the CEO, "under control of the
Board and the Chairman", shall, in the conduct of the business of the
Society, exercise certain powers such as having control over the
employees of the society, to sanction leave, the impose any
punishment or to suspend them and to institute, defend and conduct
legal proceedings and enter into compromise or arbitration with
creditors and debtors of the society.
13. Rule 56 lays down the functions of the CEO more elaborately, which
includes key functions like receiving all moneys on behalf of the
society, operating bank accounts, negotiating bills of exchange, paying
costs and management and working expenses, etc.
14. A composite reading of Rules 56 and 57 indicate that the CEO
exercises important functions in the society. However, the lifeblood of
the powers of a CEO deputed by the State Government is
encapsulated in the phrase "under control of the Board and the
Chairman".
15. Hence, as important as the role of the CEO is in the regular
functioning of a society, the same is circumscribed by the control of
the Board and the Chairman.
16. The powers and duties of the Board of the Cooperative Societies are
enumerated in Rules 52 and 53 of the 2011 Rules. The powers and
duties of the Chairman and the Vice Chairman are stipulated in Rule
54.
17. A composite perusal of Rules 52 to 54 with Rules 56 and 57 shows
that the control exerted by the Board and the Chairman on the CEO is
all-pervasive.
18. Another important indicator is provided in Rule 59 of the 2011 Rules,
which provides the procedure in case of difference of opinion between
the Board and the CEO on any matter concerning the affairs of the
society. The limited power of the CEO in case of such a difference is
to record his views in the minute book and to refer the matter to the
Registrar; but the decision of the Board shall be final and binding
upon him, if not otherwise directed by the Registrar in writing, after
obtaining approval from the State Government.
19. Hence, the limited scope were the opinion of a CEO may prevail is
when his reference to the Registrar obtains an approval of the
Registrar as well as the State Government within 45 days from the
date of the reference of the matter to the Registrar. However, such a
case is exceptional and the usual norm is that the decision of the
Board prevails.
20. In the present case, the CEO, who is the ex officio director of the
Bank, has been deputed by the Government, but the Bank has an
elected Board of Directors. Out of the said Board of Directors, there is
one Government nominee director, who is hopelessly outnumbered by
elected directors, since there are a total of eleven elected directors and
two co-opted directors.
21. Rule 63 of the 2011 Rules is also required to be looked into, in order
to ascertain the full dimension of the power of a State nominee in the
Board. A glance at the same indicates, in crux, that the State
nominee, even if he or she has a dissent, can only note a deviation
from the Government Policy, but has no direct role to play in the
decision-making process, even if the Board deviates from a
Government Policy.
22. Thus, on a composite reading of the entire provisions of the Rule, even
where the Board has a State Government nominee and a Government
deputed CEO, the role of the State Government is minimal, apart from
certain scope of interference in fringe-situations. Otherwise, neither
the State Government nor the Central Government has any role to
play or control over the functioning of cooperative societies. If a
contrary interpretation is to be drawn, every cooperative society in
West Bengal would be directly under State control, which is not the
intended position of law.
23. Thus, even taking into account the deputation of the CEO and Board
member by the State Government, it cannot be said that the State has
any executive control or administrative control over the Bank at all.
24. Insofar as finance is concerned, as already discussed, the State does
not actively aid the Bank, nor has a majority shareholding in the
Bank. Thus, the State Government does not have financial control
over the Bank either.
25. Moving on to the parent Act, Section 2(2) of the 2006 Act stipulates
that, save as otherwise expressly provided in the Act, the State shall
not interfere in the management and operation of the cooperative
societies and shall recognize cooperative societies as democratic
institutions owned, managed and controlled by members for their
economic and social betterment, operating their business based on
mutual aid and cooperative principles.
26. Section 3 enumerates the cooperative principles, including voluntary
membership in the society, irrespective of caste, creed, race and
religion, democratic control by the members, members holding share
capital and distribution of the economic results so as to avoid one
member gaining at the expense of the other, autonomy and concern
for communities.
27. The said principle, embodied in Section 2(2) combined with Section 3
of the 2006 Act, are the very antithesis of State control. The only
discordant note is in Section 23 of the 2006 Act, which provides that if
the State Government is of opinion that in order to secure profit
management of any Central Cooperative Bank, it is necessary to do so,
the State Government may make a scheme for amalgamation of the
bank with any other similar bank.
28. However, such a scheme has to be by an order published in the
Official Gazette stating the specific reasons therefor. Such an exercise
on the part of the State Government is an exception and does not
come within the purview of regular functioning.
29. Again, sub-section (3) of Section 23 of the 2006 Act envisages that an
order of amalgamation made by the State Government shall not be
made unless a copy of the proposed order, including the Scheme, is
sent to the transferor bank and transferee bank calling upon them to
invite objections or suggestions from the members, creditors and
depositors thereof and to submit such objections and suggestions
together with the own suggestions and objections of the bank to the
State Government, which would be considered by the State
Government and might stimulate modifications in the proposed order.
30. Thus, it is seen that sufficient checks and safeguards circumscribe
such interference by way of amalgamation, on the decision of the State
Government, which cannot, thus, be said to be a regular control by
the State Government in the functioning of the co-operative society.
31. In the instant case, the State is neither a majority shareholder, nor
has any financial role to play in the Bank.
32. Hence, a detailed scrutiny of the law and the facts of the present case
indicate that the Bank is not controlled, financed, aided or run by the
State Government for the purpose of coming within the purview of
Section 6 of the West Bengal State Election commission Act, 1994 or
other pari materia statutes.
33. Hence, it cannot but be observed that the deputation of employees of
the Malda District Central Cooperative Bank, for election duty in
polling stations for the Panchayat elections, is de hors the law and
cannot be sanctioned.
34. Since, in the recently concluded Panchayat Elections, employees of
the Bank have already performed polling duties, which could not be
helped since the present challenge was made in close proximity to the
election, the said deployment cannot be reversed.
35. However, it is hereby held that the State Government does not have
any jurisdiction or authority to depute employees of the above named
Bank for election duty in polling stations in respect of Panchayat
polls.
36. WPA No.15513 of 2023 is disposed of accordingly, in the light of the
above observations.
37. There will be no order as to costs.
38. Urgent certified server copies, if applied for, be issued to the parties
upon compliance of due formalities.
( Sabyasachi Bhattacharyya, J. )
