Orissa High Court
Sri Benu Madhav Tripathy vs State Of Odisha And Others on 25 January, 2023
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 8927 of 2022
Sri Benu Madhav Tripathy .... Petitioner
-versus-
State of Odisha and Others .... Opposite Parties
Advocates appeared in this case:
For Petitioner : Mr. P.K. Rath, Advocate
For Opposite Parties : Mr. A.K. Parija, Advocate General
Mr. Iswar Mohanty, ASC
[For State of Odisha]
Mr. Budhadev Routray, Sr. Advocate
Mr. Gautam Misra, Sr. Advocate
[For OP No.7]
Mr. Sunil J. Mathews, Advocate
along with Mr. K.P. Nanda, Advocate
[For OP No.8]
CORAM:
THE CHIEF JUSTICE
JUSTICE M.S. RAMAN
JUDGMENT
25.01.2023
Dr. S. Muralidhar, CJ.
1. Challenging the re-engagement of Sri Gopabandhu Satpathy,
Opposite Party (OP) No.7, as Managing Director (MD) of the
Odisha State Co-operative Bank Ltd., Bhubaneswar (OP No.8) by
a Notification dated 2nd March, 2002 issued by the General
Administration and Public Grievance Department (GA
W.P.(C) No.8927 of 2022
Department), Government of Odisha (OP No.2), the present
petition has been filed as a Public Interest Litigation (PIL) seeking
issuance of a writ of quo warranto.
2. The main ground of challenge is that the above re-engagement
is in violation of Section 35-B (1) (b) of the Banking Regulation
Act, 1949 (BR Act) as well as Section 28 (3-b) (1) of the Orissa
Co-operative Societies Act, 1962 (OCS Act).
3. In the present petition that was filed on 7th April, 2022, notice
was issued by this Court on 21st April, 2022. After pleadings were
completed this Court, on 14th September, 2022 set down the
petition for final hearing. On that date, Sri A.K. Parija, learned
Advocate General (AG) appearing for the State of Odisha (OP
Nos.1 and 2), stated that in the meanwhile within two weeks a
fresh advertisement would be issued for filling up of the post of
the MD of the OP No.8-Bank. On 8th December, 2022 the Court
was informed that the said advertisement had been issued on 25th
November, 2022 with the last date of submission of the
applications being 22nd December, 2022. However, on that date
Mr. P.K. Rath, learned counsel for the Petitioner stated that
notwithstanding that the post may have been advertised afresh, the
continuation of the present incumbent was illegal and since his
term was expiring on 28th February 2023, the petition should be
heard at an early date. Thereafter, the present petition was heard
finally on 17th January, 2023 and judgment was reserved.
W.P.(C) No.8927 of 2022
4. This Court has heard the submissions of Sri P.K. Rath, learned
counsel for the Petitioner, Sri A.K. Parija, learned AG appearing
for the State of Odisha (OP Nos.1 and 2), Sri Budhadev Routray
and Sri. Gautam Misra, learned Senior Advocates for OP No.7
and Mr. Sunil J. Mathews along with Mr. K.P. Nanda, learned
counsel for OP No.8-Bank.
Preliminary objections
5. There were several preliminary objections raised to the
maintainability of the present petition as a PIL. The first is that
Rule 8 of the Orissa High Court Public Interest Litigation Rules,
2010 (HC PIL Rules), which reads as under, has not been
complied with by the Petitioner prior to filing of the present
petition:
"8. Before filing a PIL, the petitioner must send a
representation to the authorities concerned for taking
remedial action, akin to what is postulated in Section
80 CPC. Details of such representation and reply, if
any, from the authority concerned along with copies
thereof must be filed with the petition. However, in
urgent cases where making of representation and
waiting for response would cause irreparable injury
or damage, petition can be filed straightway by
giving prior notice of filing to the authorities
concerned and/or their counsel, if any."
6. In countering the above objection, Mr. Rath, learned counsel
for the Petitioner, emphasized the later portion of Rule 8 of the
HC PIL Rules which permits the PIL petition to be filed
straightway without giving prior notice "in urgent cases, where
W.P.(C) No.8927 of 2022
making of representations and waiting for response would cause
irreparable injury or damage".
7. The present petition was filed on 7th April, 2022 challenging the
impugned order dated 2nd March, 2022 issued by the GA
Department, Government of Odisha, re-engaging OP No.7 as MD
of OP No.8-Bank for a period of one year with effect from 1st
March, 2022. From the point of view of the Petitioner, since the
legality of the re-engagement was being challenged, the matter
was indeed urgent. Nevertheless, on 21st April, 2022 when notice
was accepted on behalf of the State, they did not offer to treat the
present petition as a representation for the purposes of Rule 8 of
the HC PIL Rules and to dispose it of in a time-bound manner. At
this stage, the respective stands of not only the State [OP Nos.1 to
4], OP No.7 and OP No.8 are known. With each of them
defending the impugned order of re-engagement it can be safely
stated that the deferment of the present petition awaiting the
disposal of the Petitioner's representation would have been an
empty formality and would have inevitably resulted in the
Petitioner again coming to this Court. At this stage, hardly a
month remains as far as the tenure of the re-engagement of OP
No.7 is concerned. Consequently, this preliminary objection is
negatived.
8. The next preliminary objection is that the Petitioner failed to
disclose in the writ petition that he is the member of a political
party viz., the Indian National Congress (INC) and since this has a
W.P.(C) No.8927 of 2022
material bearing on the petition, it should be dismissed on this
ground alone. It is stated that the Petitioner is President of the
District Congress Committee at Sundargarh, and has filed the
present petition with political motives.
9. Sri Gautam Misra, learned Senior Counsel appearing on behalf
of OP No.7 elaborating on this objection submitted that OP No.8-
Bank had declined the prayer of Sri Bhabani Prasad Majhi, an Ex-
President of the Sundargarh District Central Cooperative Bank,
and an active member of the Congress Party in Sundargarh district
for release of "NABARD sanctioned re-finance amount in favour
of the District Central Cooperative Bank" in connection with
which another writ petition is stated to be pending in this Court. It
is claimed that since the present Petitioner is a 'political associate'
of Sri Majhi, this petition has been deliberately filed to drag OP
No.8 into litigation by making personal allegations against OP
No.7.
10. The Court finds that the above long-winded attempt at
establishing some connection between the Petitioner and OP
Nos.7 and 8 through Sri Majhi is a bit far-fetched. Nowhere is it
suggested that the present Petitioner had anything to do with the
issue concerning the request of the Sundargarh District
Cooperative Bank for release of the NABARD sanctioned re-
finance amount. In this background, the non-disclosure of the
political affiliation of the Petitioner does not appear to have any
immediate relevance for the issue raised in the present petition,
W.P.(C) No.8927 of 2022
viz., whether the procedure envisaged under the BR Act or the
OCS Act in re-engaging a person as MD of the OP No. 8-Bank
has been followed? In Ghulam Qadir vs. Special Tribunal
(2002) 1 SCC 33 it was held as under:
"38. There is no dispute regarding the legal proposition
that the rights under Article 226 of the Constitution of
India can be enforced only by an aggrieved person except
in the case where the writ prayed is for habeas corpus or
quo warranto. Another exception in the general rule is the
filing of a writ petition in public interest. The existence of
the legal right of the petitioner which is alleged to have
been violated is the foundation for invoking the
jurisdiction of the High Court under the aforesaid Article.
The orthodox rule of interpretation regarding the locus
standi of a person to reach the court has undergone a sea-
change with the development of constitutional law in our
country and the constitutional courts have been adopting
a liberal approach in dealing with the cases or dis-lodging
the claim of a litigant merely on hyper-technical grounds.
If a person approaching the court can satisfy that the
impugned action is likely to adversely affect his right
which is shown to be having source in some statutory
provision, the petition filed by such a person cannot be
rejected on the ground of his having not the locus standi.
In other words, if the person is found to be not merely a
stranger having no right whatsoever to any post or
property, he cannot be non-suited on the ground of his not
having the locus standi."
11. Consequently, the above preliminary objection is also
rejected.
Procedure under the GA Department Resolution
12. In order to understand the main ground of challenge on merits
to the re-engagement of OP No.7 as MD of OP No.8-Bank, it is
W.P.(C) No.8927 of 2022
necessary to set out the text of the impugned notification dated 2nd
March, 2022 which reads thus:
"NOTIFICATION
Bhubaneswar, Dated the 02nd March, 2022
No. GAD-SER1-IAS-0023-2016-5880/AIS.I
In pursuance of the provisions contained in Para-4 of
the General Administration Department Resolution
No.23750/Gen. dtd. 27.08.2014, Shri Gopabandhu
Satpathy, IAS (Retd.) is re-engaged as Managing
Director, Odisha State Co-operative Bank for a
period of one year w.e.f. 01.03.2022.
By order of the Governor
Manoj Kumar Mohanty
Special Secretary to Government"
13. It must straightway be noted that the source of power for the
said re-engagement of OP No.7 as MD, is stated to be the
resolution dated 27th August, 2014 of the GA Department.
However, the said resolution which sets out the 'comprehensive
guidelines relating to engagement of retired government servants'
has nothing to do with appointment of an MD of a Co-operative
Bank. It applies only to re-engagement of retired government
servants for government assignment.
14. In any event, even the said guidelines do not appear to have
been followed. Para 3 of the said guidelines issued under GA
Department resolution dated 27th August, 2014 is titled 'Selection
Process' and states that the selection of retired government
W.P.(C) No.8927 of 2022
servants will be through an open advertisement and that there will
be a Selection Committee for the post required to be filled up by
re-employment. Admittedly in the present case, no advertisement
was issued immediately prior to the re-engagement of OP NO.7 as
MD of OP NO.8. No Selection Committee met to choose him for
the post. Clearly, Para 3 of the said guidelines, even assuming that
it applies, has not been complied with. Therefore, with the very
source of the re-engagement of the OP No.7 as stated in the
impugned Notification dated 2nd March 2022 being legally
flawed, the said impugned notification cannot be legally
sustained.
Procedure under the OCS Act
15. Mr. Parija, learned AG, then sought to justify the re-
engagement of OP No.7 as MD by referring to his initial
appointment as MD of OP No.8-Bank at a time when he was still
working in the Government. Reference was drawn to an order
issued by the Registrar, Cooperative Societies, Odisha on 1st July,
2020 referring to a GA Department notification dated 29th June,
2020 appointing OP No.7 as MD of OP No.8-Bank being
"approved in terms of Section 28(3-b)(1) of the OCS Act and the
Rules framed thereunder". Reference is also made to a resolution
passed by the OP No.8-Bank delegating powers to OP No.7 in
terms of bye-laws of the Bank. It appears that on 7th March, 2022
the Joint Registrar, Cooperative Societies also issued a similar
order approving the re-engagement of OP No.7 as MD of OP
No.8-Bank for a period of one year with effect from 1st March,
W.P.(C) No.8927 of 2022
2022 under the same provision viz., Section 28(3-b)(1) of the
OCS Act.
16. Mr. P. K. Rath, learned counsel for the Petitioner drew
attention to the wording of Section 28(3-b)(1) of the OCS Act,
which reads thus:
"28. xxx xxx xxx
(3-b) (1): Notwithstanding anything contained in this Act,
there shall be a Chief Executive for every society, by
whatever designation called, who shall be appointed on
whole time basis by the Committee subject to the approval
of the Registrar. Such Chief Executive shall be deemed to
be a member of the Committee in the case of an apex
society and any other society or class of societies as the
State Government may, by notification from time to time,
specify."
17. Mr. Rath submitted that the above provision applies to
appointment of a Chief Executive of a Co-operative Bank "on
whole time basis." Secondly, it indicates that the appointment has
to be made by the Committee of the Co-operative Society
constituted under Section 28(1) of the OCS Act and not by the
Government as has been done in the present case. Thirdly, it was
pointed out that it envisages approval being granted by the
Registrar of Co-operative Societies whereas the order in this case
it has been issued on 7th March, 2022 by the Joint Registrar.
18. In reply, Mr. Parija, learned AG appearing for the State
referred to a Government resolution in terms of which the powers
of the Registrar exercisable for the purposes of Section 28 of the
W.P.(C) No.8927 of 2022
OCS Act have been delegated to the Joint Registrar. It is
accordingly submitted that the Joint Registrar, Co-operative
Societies could have validly issued the order dated 7th March,
2022. Next, Mr. Parija submitted that Section 41 of the OCS Act
envisages direct partnership of the State Government and
cooperative Societies and in this case, on instructions, he stated
that the State Government has a 25% share in the Opposite Party
No.8 Co-operative Society Bank. He submitted that the
Government therefore would have a say in the re-engagement of
an ex-bureaucrat as MD on a temporary basis for one year
pending appointment of a regular incumbent.
19. Mr. Parija submitted that in 2018 an advertisement had been
issued for appointment of an MD of the OP NO.8-Bank on regular
basis but no one was found suitable for such appointment. He
submitted that the re-engagement of Opposite Party No.7 as MD
of Opposite Party No.8-Bank was provisional and only for a
limited period of one year and since an advertisement had already
been issued, this Court ought not to interfere with the impugnmed
notification of re-engagement. He added that OP No.7 had an
impeccable reputation and good established credentials when he
was working as MD on a regular basis of the OP No.8-Bank prior
to his re-engagement. Thirdly, he submitted that any interference
with the impugned order of re-engagement of a former bureaucrat
as MD of a Co-operative Bank of the State would have far-
reaching ramifications for all other appointments made by the
W.P.(C) No.8927 of 2022
Government to similar posts in other bodies in which the
Government had a stake.
20. The above submissions have been considered. It is abundantly
clear that the engagement of a person as Chief Executive, or by
any other name called which could include an MD, in terms of
Section 28 (3-b) (1) of the OCS Act has to be on (a) whole time
basis and (b) only by the Committee of the concerned Co-
operative Society and not by the Government. In fact, there is no
provision in the OCS Act that envisages the State Government
appointing either a Chief Executive or an MD of a Co-operative
Bank. The 'Committee' has been defined under Section 2 (c) of
the OCS Act to mean "the managing committee of a Society by
whatever name called, to which the management of the affairs of
the Society is entrusted by or under this Act or by the Bye-laws of
the Society". It is not understood, therefore, how the Registrar of
Co-operative Societies or his delegate, the Joint Registrar, has
been granting 'approval' under the said provision to the
engagement or re-engagement of OP No.7 as MD of OP No. 8-
Bank. It is also not understood how the GA Department of the
State Government has issued the advertisement for filling up of
such post on a regular basis since the appointment has to be under
Section 28(3-b) of the OCS Act by the Committee constituted
under Section 28(1) of the OCS Act and by no other body,
including the State Government.
W.P.(C) No.8927 of 2022
21. It may also be noted here that there is no provision in the OCS
Act for engagement of a person as Chief Executive of OP No.8-
Bank on provisional basis for a temporary period. It only
envisages appointment on 'whole time basis' and that too by the
Committee, as defined under Section 2(c) of the OCS Act and as
constituted under Section 28 (1) of the OCS Act. Therefore,
notwithstanding the earlier orders of appointment of OP No.7 as
MD of OP No.8-Bank and the impugned Notification dated 2nd
March, 2022 or its approval by the order issued by the Joint
Registrar of Co-operative Societies on 7th March, 2022, the fact
remains that in the present case the re-engagement was not by the
Committee of the OP No. 8-Bank as contemplated by Section 28
(1) of the OCS Act.
22. In the writ submissions filed on behalf of the State, it is
contended that the tenure of the Committee of Management of OP
No.8-Bank had expired and no new Committee had been
constituted under Section 32 (1) of the OCS Act. It is stated that if
a new Committee is not constituted due to failure of the State Co-
operative Election Commission to conduct an election, the
Management of the Society would vest in the Registrar of
Cooperative Societies and the Registrar shall have the power to
exercise all the functions of the Committee including the power to
appoint MD/Chief Executive under Section 28 (3-b) of the OCS
Act.
W.P.(C) No.8927 of 2022
23. A perusal of the order dated 7th March, 2022 of the Joint
Registrar reveals that it only conveys 'approval' to the re-
engagement of OP No.7 as MD of OP No.8-Bank by the
impugned Notification dated 2nd March, 2022 of the Government,
which as already noticed, has no say in the matter. Further, the
text of Section 28(3-b) of the OCS Act itself indicates that the
approval is to be granted by the Registrar for a 'whole time'
appointment and not a provisional or temporary re-engagement.
Even if one were to accept that in the absence of elections, it is
Registrar who exercises the functions of the Committee of the OP
No. 8-Bank in terms of Section 28 (1) of the OCS Act, then the
Registrar could have only issued an order of appointment (not re-
engagement) and that too on 'whole-time basis'. Then again, such
order could not have been issued by the Government of Odisha.
Going by the procedure now adopted for filling up the post of MD
on whole time basis i.e. issuance of an advertisement, it is plain
that even that procedure was not followed by the Registrar prior to
the re-engagement of OP NO. 7 as MD of OP No. 8-Bank on
provisional basis. The Court, therefore, concludes that both the
impugned Notification dated 2nd March 2022 issued by the GA
Department re-engaging OP NO. 7 as MD of OP No. 8-Bank, as
well as the order dated 7th March 2022 issued by the Joint
Registrar, Cooperative Societies 'approving' such re-engagement,
are in violation of Section 28 (3-b) (1) of the OCS Act, and are,
therefore, legally unsustainable.
W.P.(C) No.8927 of 2022
24. It was repeatedly urged both by Mr. Routray and Mr. Misra,
learned Senior Counsel appearing for OP No.7 that he was fully
'qualified' for being appointed as MD of OP No.8-Bank and no
writ of quo warranto could issue to quash his re-engagement.
25. The above submission overlooks the fact that a writ of quo
warranto has been sought in the instant case not on the ground
that OP No.7 lacks the essential qualifications for the post of MD
but that the mandatory statutory procedure to be followed under
the OCS Act and the BR Act for such appointment has not been
followed.
Procedure under the BR Act
26. The central ground of challenge to the re-engagement of OP
No.7 as MD of OP No.8-Bank is that Section 35-B (1) (b) of the
BR Act which requires prior approval of the Reserve Bank of
India (RBI) for such re-engagement has not been complied with.
27. Earlier, the said provision was deleted from the BR Act by
way of an amendment with effect from 1st March, 1966. However,
by Amendment Act 39 of 2020 dated 29th September, 2020, the
provision contained in clause (y) of Section 56 was omitted from
the BR Act meaning thereby that Section 35-B (1) (b) of the BR
Act stood revived. The Government of India by a Gazette
Notification notified the date of coming into force of the revived
Section 35-B (1) (b) of the BR Act to be 1st April, 2021. The said
provision reads as under:
W.P.(C) No.8927 of 2022
"35-B. xxx xxx xxx
(1) (a) xxx xxx xxx
(b) no appointment or re-appointment or termination of
appointment of a chairman, a managing or whole-time
director, manager or chief executive officer by whatever
name called, shall have effect unless such appointment, re-
appointment or termination of appointment is made with
the previous approval of the Reserve Bank.
Explanation. --For the purposes of this sub-section, any
provision conferring any benefit or providing any amenity
or perquisite, in whatever form, whether during or after the
termination of the term of office of the chairman or the
manager or the chief executive officer by whatever name
called or the managing director, or any other director,
whole-time or otherwise, shall be deemed to be a provision
relating to his remuneration."
28. Mr. Parija, learned AG, referred to the fact that OP No.8-Bank
had by a letter dated 3rd March, 2022 intimated NABARD and
RBI of the re-engagement of OP No.7 as MD of OP No.8-Bank
and neither RBI nor NABARD had communicated any objection
to such re-engagement. He accordingly submitted that there was
substantial compliance with the requirement of Section 35-B (1)
(b) of the BR Act.
29. The Court is unable to accept the above submission. Section
35-B (1) (b) of the BR Act makes it clear in no uncertain terms
that appointment or re-appointment of an MD of a Cooperative
Society Bank, which would include OP No.8-Bank, cannot have
effect unless it is made "with the previous approval of the Reserve
Bank." There is no document placed on record indicating that
W.P.(C) No.8927 of 2022
there was any 'previous approval' of the RBI to the re-
engagement of OP No.7 as MD of OP No.8-Bank. In fact, in
issuing the impugned Notification dated 2nd March, 2022 the G.A.
Department, Government of Odisha appears to have completely
overlooked the aforementioned mandatory requirement under
Section 35-B (1) (b) of the BR Act.
30. The outcome of the above discussion is that the impugned
Notification dated 2nd March, 2022 re-engaging OP No.7 as MD
of OP No.8-Bank for a period of one year with effect from 1st
March, 2022 is not only in violation of the binding provisions of
Section 28 (3-b) (1) read with Section 28(1) of the OCS Act but is
also contrary to Section 35-B (1) (b) of the BR Act and is,
therefore, unsustainable in law.
31. As held in B. Srinivasa Reddy v. Karnataka Urban Water
Supply & Drainage Board Employees' Association (2006) 11
SCC 731 "Writ of Quo warranto does not lie if the alleged
violation is not of a statutory provision." In other words, where a
clear violation of the statutory provisions in the appointment of a
holder of a public post is made out, as in the present case, such
writ of quo warranto can and should be issued. As explained
hereinbefore, it is abundantly clear that the re-engagement of OP
No.7 as MD of OP No.8-Bank it is contrary to both the
aforementioned statutory provisions and, therefore, the case for
issuance of a writ of quo warranto is made out.
W.P.(C) No.8927 of 2022
32. The Court clarifies that the above conclusion does not in any
manner reflect on the capability or integrity of OP No.7 or his
qualification to hold the post of MD of OP No.8-Bank since that
is not in issue in the present petition. It is also clarified by this
Court that since what is under challenge in the present petition
which seeks a writ of quo warranto, is the legality of order of re-
engagement of OP No.7 as MD of OP No.8-Bank, this judgment
would not ipso facto result in invalidating any other appointment
made by the Government of any person to any other post in a
public body or a Co-operative Bank. The validity of such orders
of appointment will have to be examined on a case-by-case basis.
33. For all of the aforementioned reasons, the Court quashes the
impugned Notification dated 2nd March, 2022 issued by the G.A.
Department re-engaging OP No.7 as MD of OP No.8-Bank and
the consequential order dated 7th March, 2022 issued by the Joint
Registrar, Co-operative Societies approving the said re-
engagement of OP No.7.
34. The writ petition is allowed in the above terms. No order as to
costs.
(S. Muralidhar)
Chief Justice
(M.S. Raman)
Judge
S.K. Jena/Secy.
W.P.(C) No.8927 of 2022
