HIRA LAL Vs. RAILWAY SHRAMIK SAHAKARI BANK LTD

JUDGEMENT

(1.) The petitioner has filed this writ petition against the Respondent Railway Shramik Sabakari Bank, Bikaner Limited, Bikaner and prayed therein that by writ, order or direction, the resolution dated 30.9.1981 be declared invalid and the Respondent Bank may be directed to keep the petitioner in service till be is mentally and physically fit. Counsel for the Respondent has submitted that the Respondent-Society is not amenable to the jurisdiction of this Court under Article 226 of the Constitution. He has submitted that under Article 12 of the Constitution the Respondent Society does not fulfil the requirements of the State and also cannot be considered as other authorities within the territory of India or under the control of the Government of India. Before examining whether the Respondent Society falls within the purview of Article 12 and can be treated as other authorities or not, it is necessary to consider the provisions of the Rajasthan Co-operative Societies Act, 1965, hereinafter to be referred as the Act of 1965. Learned counsel for the petitioner has emphasized that under the Act itself there are numerous provisions by which it can be said that the Society falls within the purview of the definition of other authority. He has invited my attention to Section 8 of the Act of 1965 and submitted that Section 8 provides that under what circumstances the Registrar can register the society. His submission is that the application must comply with the provisions of this Act and the Rules He farther submits that the object of the proposed society must be in accordance with Section 4. He further submitted that the aims of the society cannot be inconsistent with the principles of justice, co-operation and public morality and that they must facilitate the establishment of a socialistic pattern of society. Under Articles 38 and 39 of the Constitution of India it has been provided the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice social, economic and political inform all the institutions of the national life. Under clause (2) which has been added by the 44th Amendment Act, 1978 it has been provided that the societies are created in particular to strive to minimise the inequality in income and endeavour to eliminate the inequalities in status and facilities and opportunities. He has invited my attention to Article 39 and has submitted that under clause (b) of Article 39 of the ownership and control of material lesources of the community are so distributed as best to sub-serve the common good : clause (c) further provides that the operation of economic protection does not result in concentration of wealth and means of production to common detriment. His mam submission is that the societies have been constituted in different parts of the State to achieve the objects provided under Articles 38 and 39 of the Constitution and the registration is not a mere formality just like a registration under the Partnership Act or the registration of the private limited company but is an Act which has to be performed by the Registrar to achieve the objects enumerated in Section 4 of the A ct. Punjab Co-operative Societies Act, 1961, hereinafter referred to the Act of 1961 provides under Sections 3 to 8 the provisions relating to the Registration. Section 8 of the Act of 1961 is to a great extent similar to the provisions of Section 8 of the Act of 1965. Section 16 of the Act of 1965: provides for the amalgamation, transfer of assets and liability and division of Co-operative Societies. Section 17 of the Act of 1965 provides that the Registrar on being satisfied that it is essential in the public interest or in the interest of co-operative movement or for the purpose of securing proper management of any cooperative society that two or more co-operative societies may be amalgamated The provision further provides that co-operative society may be divided to form two or more societies or should be reorganised notwith standing anything contained in section 16 but subject to the provisions ot this section the Registrar may by order provide for the amalgamation, division or reorganisation of this society into a single society, or into society with such constitution, proper rights, interest and purpose and such liabilities, tax and obligation as may be specified in the order. His contention is that the Registrar has the power to control the functioning of the societies even if he is satisfied that the society is not running in public interest or in the interest of co-operative movement. Thus he wants to emphasize that the society is under the direct control of the State Government. Under the Act of 1961 Section 13 is similar to a great extent to Sections 16 and 17 of the Act of 1965. Section 19 of the Act of 1965 provides that who can be admitted as the members of the Society. To a great extent similar provisions have been made in the Act of 1965, under Section 15 of the said Act. Learned counsel for the Respondent has further invited my attention to Section 30 relating to the annual general meeting which is to a great extent similar to Section 24 and Section 25 of the Act of 1961. He has further emphasized and drew my attention to clause (2) of Section 31 and submitted that if a special general meeting of the Co-operative Society is not called in accordance with the requisition referred to in sub-section (1) the Registrar or any other person authorised by him in this behalf shall have the power to call such meeting and that meeting shall be deemed to be a meeting called by the committee. Clause (3) of the said section further provides that the Registrar shall have the power to order that the expenditure incurred in calling the meeting under sub-section (!) shall be paid out of the funds of the society. He has referred Section 35 and submitted that the Government nominees may be on the committee. He has further submitted that the Registrar has a power to remove the committee or member there of and has further power to appoint the Government servant or any public man as an Administrator to manege the affairs of the society. His contention is that it is not necessary under Section 36 that the person so appointed should be the member of the society. Any stranger can be appointed Administrator. Section 27 of the Act of 196! provides that if in the opinion of the Registrar a committee or any member of the committee persistently defaults or is negligent in performance of the duties imposed on him by this Act or the reference or byelaws made thereunder or commits any act which is prejudicial to the society and also on number of other grounds the Registrar may remove the committee and appoint a Government servant as an Administrator to manage the affairs of the society for a period not exceeding one year as may be specified in the order. Section 27 of the Act of 1961 and Section 36 of the Act of 1965 though similar to a great extent but materially differ on some important aspects, namely, that under Section 27 the time limit is fixed ; that the Registrar can appoint the Administrator for a period of one year; whereas under Section 36 no time limit has been fixed. Similarly under Section 27 only the Government Officer can be appointed as an Administrator whereas the scope of Section 36 has been widened and even a puplic man can be appointed as an Administrator. Thus Section 36 of the Act of 1965 gives more power to Registrar compared to Section 27 of the Act of 1961. Learned counsel has further invited my attention that under Chapter V of the Act of 1965 special privileges have been given to the society which cannot be given to an individual, from and even to the companies registered under the Companies Act. Under the Act of 1961, to a great extent, similar provisions have been, provided under Chapter V of the Act of 1961, Learned counsel for the Respondents has further invited my attention towards Sections 63, 70, 71, 74, 118,130,131,141 and 148. Similar sections have been provided under Chapter VIII and Chapter X, XA and Chapter XII of the Act of 1961. There is a great similarity between the two but there are some distinguishing features also in the same. Under the Rajastban Co-operative Societies Rules of 1966, Rule 41 provides that notwithstanding anything contained ia the bye-laws of the society on Co-operative Society shall appoint any person as it is paid officer or employee in any category of service, unless be possesses tbe qualification and famishes the security if so specified by the Registrar from time to time for such categorical service in the society or for the class of the society to which it belongs. His condition of service of the employees of the society shall be as specified by the Registrar. The learned counsel for the petitioner has invited my attention towards the case G. P. Gopi Nath Nayyar v. The Slate (AIR 1977 Ker 36]. Then Lordships held that there may be rarely instances in which the introduction of such uniform condition of service may temporarily given rise to hare ship but that will be no grounds for invalidating the prescription of any service conditions made under the Act. These powers are comparative wider in scope than the provisions of Punjab Co-operative Law. Considerations of individual hardship will have to subserve more important considerations relating to the attainment of common welfare of the larger batch of employees of different class of Co-operative Society in general. Thus he emphasized that the societies are not free even to appoint the persons to their choice to carry on the business of the society, but they have to act under the control and command of the Registrar.

(2.) Before examining the various provisions of the Act and the Rules referred above to find out whether the Registrar acts as a Government servant and controls the societies under the provisions referred to above acts as a guide, philosopher and a tribunal or in administrative capacity as authority. We will have to consider the concept of the co-operative movement in general and its implementation in the State of Rajasthan through the Act of 1965 and the Rules of 1966 in particular. Counsel for both the parties have invited my attention to the number of citations which will be referred here after and have submitted that it is necessary to consider the relevant provisions referred above for arriving at the decision whether the society falls within the purview of the other authority or not. Before referring to the citations I will also like to refer the bye-laws of the society which the counsel for the respondent has produced before me to day and its genuineness is not under challenge. Under bye-laws 11 it has been provided that who can be the members of the society. Under the present bye-law only the railway employee working within the area can became the member of the society who fulfils the requisite qualification mentioned therein and even if a member who ceses to be the employee of the railway ceases to be the member of the society. Under bye-laws 24 it has been provided: X X X [Matter in Hindi not printed here Ed.] Other persons of the Board are elected from different sections of the Railway. ' Under bye-law 28 clause (4 President/Chairman has no power to vote except exercising the casting vote. Under bye-law 24 clause (2) reference has been made about the powers of the Vice President/Vice Chairman. This society has been established in the year 1925 and bas also been registered as Cooperative Society. Learned counsel for the petitioner has vehemently submitted that the society does not fall within the purview of "other authorities." The interpretation given to the word "other authorities" is changing fast and the scope narrowed down earlier has been broadened by the recent decision of the Supreme Court. In Somprakash v. Union of India [AIR 1981 SC 212] it has been held : "If a statutory coporation body or other authority is an intrumentality or agency of the Government, it would be an authority" ard therefore "State" within the meaning of the expression in Article 12, and is subject to the same constitutional limitations as Government. The preponderant considerations for pronouncing an entity as State agency or instrumentality are (i) financial resources of the State being the Chief funding source (ii) functional character being govermental in essence (iii) plenary control residing in Government (iv) prior history of the same activity having been carried on by Government and made over to the new body and (v) some clament of authority or command. Whether the legal person is a corporation created by a statute, as distinguished from under a statute, is not an important critetion although it may be an indictum. A careful study of the features of the Airport Authority and a Government company covered by Sections 7, 9, 10 and 12 of Burma Shell (Acquisition of Undertakings in India) Act, 1976) discloses a close parallel except that the Airport Authority is created by a statute while Bharat Petroleum (notified under Section 7 of the Act) is recognised by and clothed with rights and duties by the statute. Applying the constellation of criteria collected from Airport Authority [AIR 1979 SC 1628] on a cumulative basis, to the given case, there is enough material to hold that the Bharat Petroleum Corporation is "State" within the enlarged meaning of Article 12. The commonsense signification of the express "other authorities" under the control of the Government of India is plain and there is no reason to make any exclusion on sophisticated grounds such as that the legal person must be a statutory corporation, must have power to make laws, must be created by and not under a statute and so on " In Ajay Hasia v. Khalid Mujib [AIR 1981 SC 487], their Lordships have held: "It is immaterial for determining whether a Corporation is aa authority whether the Corporation is created by a statute or under the statute The test is whether it is an instrumentality or "agency of the Government" and not as to how it is created. The enquiry has to be not as to how the juristic person is bora but why it has been brought into existence The Corporation may be a statutory corporation created by statuteor it may be a Government company or a company formed under the Companies Act or it may be a society registered under the Societies Registration Act or any other similar statute. Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12. if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factor, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12. A juristic entity which may be "State" for the purpose of Part XIV or any other provision of the Constitution." In Ajay Hasia's case (supra) the college is established and its administration and management are carried on by society registered under the Jammu and Kashmir Registration of Societies Act of 1898. Their Lordships held that having regard to the memorandum of association and the Rules of the Society a society is an instrumentality or the agency of the State and the Central Government and it is an authority within the meaning of Article 12. The composition of the society is dominated by the representatives appointed by the Central Government and the Governments of Jammu and Kashmir Punjab, Rajasthan and Uttar Pradesh with the approval of the Government. The money is required' for running the college is provided entirely by the Central Government and the Government of Jammu and Kashmir and even if any other monies are to be received by the society it can be done only with the approval of the State and the Central Government. The Rules to be made by the society are also required to have the prior approval of the State and the Central Government. The society has also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee.

(3.) The learned counsel for the non petitioner further invited my attention to a case Pritam Singh Gill v. State of Rajasthan [AIR 1982 Punj and Har 228], Their Lordships have discussed the various propositions and came to a conclusion