Orissa High Court
Prafulla Kumar Patra vs The Chief Executive Officer .... ... on 8 November, 2024
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
IN THE HIGH COURT OF ORISSA AT CUTTACK
WP(C) No. 2239 of 2017
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Prafulla Kumar Patra .... Petitioner(s)
-versus-
The Chief Executive Officer .... Opposite Party (s)
(I/c), Urban Co-operative
bank Ltd., Rourkela & Anr.
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. Ramakanta Sarangi, Adv.
For Opposite Party (s) : Mr. Bidesh Ranjan Behera, Adv.
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-04.10.2024
DATE OF JUDGMENT: -08.11.2024
Dr. S.K. Panigrahi, J.
1. In the instant Writ Petition, the petitioner challenges the legality and
propriety of the orders of punishment dated 24.11.2016 and prays for
quashing of the same.
2. The petitioner seeks reinstatement in service as Sr. Assistant along with
all service benefits.
I. FACTUAL MATRIX OF THE CASE:
3. The brief facts of the case are as follows:
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
(i) The petitioner was appointed as a Junior Assistant in the Urban
Cooperative Bank, Rourkela, on 29.11.2000. After completing over a
decade of dedicated service, he was subsequently promoted to the post
of Senior Assistant on 15.03.2012.
(ii) On 05.10.2015, a show-cause notice was issued to the petitioner, alleging
that he had fraudulently processed a loan for one Sri Deepak Jaiswal,
thereby facilitating the unauthorized disbursement of Rs. 1,78,000 to a
third party.
(iii) The petitioner was placed under suspension vide order dated
13.10.2015, facing serious accusations of gross misconduct, financial
irregularities, and negligence of duty.
(iv) Subsequently, on 01.01.2016, a formal charge sheet (Proceeding No.
1967) was issued against the petitioner, encompassing allegations of
misconduct, financial mismanagement, breach of trust, and negligence.
(v) Following that, on 28.01.2016, the petitioner was allowed to verify
relevant records. After reviewing the documents, the petitioner
submitted a detailed response on 03.02.2016, denying the charges.
(vi) Dissatisfied with the petitioner's explanation/ the authorities
appointed an Enquiry Officer. After due investigation, the Enquiry
Officer submitted his report on 18.07.2016, concluding that the
charges--including those of fraudulent activity (Charge No. 1), financial
mismanagement (Charge No. 2), and misrepresentation of information
(Charge No. 3)--lacked sufficient evidence and were therefore
unproven.
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
(vii) However, the Disciplinary Authority did not accept the findings of the
Enquiry Officer. Consequently, on 24.11.2016, the Authority imposed a
set of punitive measures, including treating the suspension period as
such, demoting the petitioner to the post of Junior Assistant, and
imposing a penalty of three consecutive yearly increments withheld.
The disciplinary order, now challenged in the present writ petition, thus
stands as the subject of contention.
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
4. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) The show cause notice was issued on 05.10.2015 by the Chief Executive
(I/C) was without any valid reason or basis/ as the petitioner's role was
limited to appraisal and documentation of the loan proposal. The loan
amount was sanctioned and disbursed properly on 17.04.2014, with the
customer withdrawing the full loan amount as per the agreed terms.
(ii) Upon being instructed to contact the customer for repayment, the
petitioner facilitated the repayment, and the customer subsequently
cleared the outstanding loan balance on 08.10.2015, thus settling the
loan account.
(iii) The petitioner submitted that despite the Enquiry Officer's report dated
18.07.2016 exonerating them from all charges, he was directly subjected
to punishment without being issued a second show-cause notice.
Furthermore/ the imposition of 'stoppage of three consecutive yearly
increments' was handwritten in a subsequent order/ resulting in two
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
separate punishments for the same charge, thereby falling in trap of the
doctrine of "double jeopardy."
(iv) The petitioner further submitted that despite making repeated requests
for the necessary documents to respond to the show cause notice and
for the inquiry report, the same were not provided, thereby violating
the principles of natural justice and fairness in the disciplinary
proceedings.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
5. The Learned Counsel for the Opposite Parties earnestly made the
following submissions in support of his contentions:
(i) The dispute regarding the petitioner's service and disciplinary action is
governed by Section 67-B of the Orissa Co-operative Societies Act, 1962,
and should be adjudicated by the Co-operative Tribunal.
(ii) The petitioner has already appealed under Rule 37 of the Staff Service
Rules, making the writ petition not maintainable.
(iii) The petitioner was involved in processing a loan for Deepak Kumar
Jaiswal using fake documents, and later paid off the loan balance from
his own funds to settle the account.
(iv) That the petitioner's claims regarding requesting documents are denied,
as the petitioner was familiar with the records and filed a show-cause
reply on 30.11.2015.
(v) That the Enquiry Officer's report, was not accepted by the disciplinary
authority, and the punishment was imposed following due process.
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
(vi) That the punishment of stoppage of three consecutive yearly increments
was initially omitted, despite having been passed by a Board Resolution
but corrected manually in the order
IV. EXAMINATION OF THE LEGAL MATRIX
6. Heard learned counsel for the respective parties and duly perused the
materials placed on record.
7. I had the occasion to address the issue of the amenability of service
matters concerning cooperative banks in Ch. Ajeet Kumar Das and Ors.
v. Registrar, Co-operative Societies, Odisha and Ors1., where this Court
has held that service matters pertaining to cooperative banks lacking a
"public character" do not fall within the scope of Article 226. For a more
comprehensive understanding, the relevant discussion is presented in
the following paragraphs.
8. At the outset, before delving into the factual matrix of the case, this
Court considers it necessary to determine whether the Opposite Party
bank is amenable to the writ jurisdiction in the instant matter, which
pertains to a service dispute.
9. Article 12 of the Constitution of India defines "State" as follows:
"12. Definition.--In this Part, unless the context otherwise
requires, 'the State' includes the Government and Parliament
of India and the Government and the Legislature of each of the
States and all local or other authorities within the territory of
India or under the control of the Government of India."
10. The term "other authorities" under Article 12 has been extensively
examined in a catena of judgments, which have established tests to
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
determine whether a particular authority qualifies as a "State" or "other
authority" under Article 12.
11. To this effect, it would be appropriate for this Court to refer to the case
ofAjay Hasia & Ors. v. Khalid Mujib Sehravardi & Ors2., wherein the
following six tests were formulated out from its earlier judgment in
Ramana Dayaram Shetty v. International Airport Authority of India &
Ors3:
"(1) 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.
(2) Where the financial assistance of the State is so much as to
meet almost the entire expenditure of the corporation, it would
afford some indication of the corporation being impregnated
with governmental character.
(3) It may also be a relevant factor...whether the corporation
enjoys 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
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 of the corporation being an instrumentality or
agency of Government."
(1981) 1 SCC 722.
(1979) 3 SCC 489.
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
12. Likewise, in Pradeep Kumar Biswas & Ors. v. Indian Institute of
Chemical Biology & Ors.4, the Supreme Court emphasized that the tests
formulated in Ajay Hasia (supra) are not rigid and that the
determination of whether a body constitutes a "State" under Article 12
should depend on the cumulative facts established in each case. The
Court held that a body is considered a "State" if it is financially,
functionally, and administratively dominated by or under the control of
the Government, and such control must be pervasive and particular to
the body in question. Mere regulatory control, whether under statute or
otherwise, does not suffice to establish State control or make the body a
State.
13. Given that this matter pertains to the maintainability of a Writ Petition
concerning cooperative societies, it is essential to examine relevant
judicial precedents on the issue. Courts have consistently demonstrated
reluctance in extending writ jurisdiction over cooperative societies,
generally refraining from holding such entities amenable to such
oversight.
14. In Kulchhinder Singh v. Hardayal Singh Brar,5 the Supreme Court
adjudicated upon the fact whether a writ pertaining to service matters
can be entertained against the cooperative society. The relevant portion
of the judgment is reproduced herein below:
"8. The question as to whether a cooperative society is a public
authority has fallen for judicial notice and Amir Jamia [ILR
1969 Del 202] contains an elaborate discussion of the
(2002) 5 SCC 111.
AIR 1976 SC 2216.
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Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
controversial topic covering decisions, English and Indian. It
is also true that at least Madhya Pradesh (Dukhooram
[Dukhooram Gupta v. Cooperative Agricultural Association
Ltd., AIR 1961 MP 289] ) and Calcutta (Madan Mohan
[Madan Mohan Sen Gupta v. State of W.B., AIR 1966 Cal 23]
) have considered whether a writ will issue against a
cooperative society, simpliciter. Kumkum Khanna [ILR (1976)
1 Del 31] deals with a private college governed by a university
ordinance.
9. Many other rulings have also been brought to our notice,
but we do not think it necessary elaborately to investigate
these issues notwithstanding the fact that Shri Gupta,
appearing for the contesting respondent, challenged each one of
the grounds stabilising his submission on rulings of this
Court, of the High Courts and the English courts.
10. The reason why we are not inclined to add to the enormous
erudition on the point already accumulated in case law is that
a close perusal of the writ petition will disclose that essentially
the appellant is seeking merely to enforce an agreement entered
into between the employees and the cooperative bank.
11. There is no doubt that some of the legal problems argued by
Sri Ramamurthy deserve in an appropriate case
jurisprudential study in depth, although much of it is covered
by authority. But assuming, for argument's sake, that what he
urges has validity, the present case meets with its instant
funeral from one fatal circumstance. The writ petition,
stripped of embroidery and legalistics, stands naked as a
simple contract between the staff and the society agreeing
upon a certain percentage of promotions to various posts or an
omnibus, all-embracing promise to give a quota to the existing
employees. At its best, the writ petition seeks enforcement of a
binding contract but the neat and necessary repellant is that
the remedy of Article 226 is unavailable to enforce a contract
qua contract. We fail to see how a supplier of chalk to a
government school or cheese to a government hospital can ask
for a constitutional remedy under Article 226 in the event of a
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
breach of a contract, bypassing the normal channels of civil
litigation. We are not convinced that a mere contract agreeing
to a quota of promotions can be exalted into a service rule or
statutory duty. What is immediately relevant is not whether
the respondent is State or public authority but whether what is
enforced is a statutory duty or sovereign obligation or public
function of a public authority. Private law may involve a
State, a statutory body, or a public body in contractual or
tortious actions. But they cannot be siphoned off into the writ
jurisdiction.
12. The controversy before us in substance will turn on the
construction and scope of the agreement when the claim to a
quota as founded cannot be decided in writ jurisdiction
without going back on well-settled guidelines and even
subverting the normal processual law -- except perhaps in
extreme cases which shock the conscience of the Court or other
extraordinary situation, an aspect we are not called upon to
explore here. We are aware of the wide amplitude of Article
226 and its potent use to correct manifest injustice but cannot
agree that contractual obligations in the ordinary course,
without even statutory complexion, can be enforced by his
short, though, wrong cut."
15. This stance was reiterated by the Delhi High Court in Satyapal Singh v.
The Delhi State Cooperative Bank6 wherein it has held that the service
matters of the cooperative society are not amenable to the writ
jurisdiction since, there is no element of public duty involved. Such
kinds of disputes are of private nature and do not fall within the ambit
of the writ jurisdiction.
16. An examination of the jurisprudence on this matter reveals that for an
organization to be deemed as performing a public function, such a
W.P.(C) 7462/2022; Del HC.
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
function must be inherently linked to those performed by the State in its
sovereign capacity. In the absence of a public duty, the organization
cannot be considered amenable to writ jurisdiction.
17. In the instant matter, there has been no compelling evidence presented
to establish that the State exercises either direct or pervasive control
over the Society's operations or management. The absence of such
control undermines any claim that the Society functions as an
instrumentality or agency of the State.
18. Furthermore, there is no indication that the Society is engaged in
discharging any public duty in its sovereign capacity and therefore the
Society cannot be deemed to be performing a public function. As such,
it is not amenable to writ jurisdiction under Article 226 of the
Constitution.
19. In matters of service disputes within cooperative societies, the
appropriate remedy is usually found within the governing statutes or
specific service rules. The petitioner has already pursued an appeal
under Rule 37 of the Staff Service Rules, indicating the availability of an
alternative and adequate remedy. Given that the service rules and the
Orissa Co-operative Societies Act provide specific procedural avenues,
the writ jurisdiction of this Court should not ordinarily be invoked
unless there is a clear violation of statutory or fundamental rights,
which is not demonstrated here.
V. CONCLUSION:
20. Considering the facts outlined above and the availability of effective
and appropriate alternative remedies, this writ petition is deemed
Designation: AR-CUM-SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
unsustainable and is, accordingly, dismissed. The petitioner is granted
the liberty to approach the Cooperative Tribunal under Section 67-B of
the Odisha Cooperative Societies Act, 1962, for adjudication of the
present dispute.
21. Interim order, if any, passed earlier stands vacated.
(Dr.S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 8th Nov., 2024/
