Orissa High Court
Ajay Kumar Panda vs Asst. Registrar Of Co-Operative …. … on 17 December, 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: 25-Dec-2024 17:32:41
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.7711 of 2024
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Ajay Kumar Panda .... Petitioner(s)
-versus-
Asst. Registrar of Co-operative .... Opposite Party (s)
Societies, Banki Circle, Cuttack
Advocates appeared in the case throughHybrid Mode:
For Petitioner(s) : Mr.Bikram Senapati, Adv.
For Opposite Party (s) : Mr.Saswat Das, AGA
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-13.11.2024
DATE OF JUDGMENT: -17.12.2024
Dr. S.K. Panigrahi, J.
1. The petitioner, through this petition challenges the order dated
13.03.2024 issued by the Appellate Authority-cum-Assistant Registrar of
Cooperative Societies, Banki whereby the appeal filed by Opposite
Party No. 3 was allowed, and the removal order dated 25.10.2019
against him was set aside.
I. FACTUAL MATRIX OF THE CASE:
2. The brief facts of the case are as follows:
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Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
(i) The Pandalam Service Co-operative Society (“Opposite Party No. 7”) is
a primary co-operative society governed under the Orissa Co-operative
Societies Act, 1962, its Rules of 1965, and its Bye-laws.
(ii) Santosh Kumar Jaysingh (“Opposite Party No. 3”), serving as Secretary,
was found to have allegedly engaged in financial embezzlement,
misappropriation of funds, and tampering with society’s records.
Consequently, he was suspended on 23.09.2019 and removed from
service on 25.10.2019 under Section 28(viii) of the Act.
(iii) Opposite Party No. 3 challenged his termination by filing Service
Dispute Case No. 13/2019 before the State Co-operative Tribunal but
later withdrew it on 21.08.2020. Prior to this withdrawal, he had filed
W.P.(C) No. 22877/2019 before the High Court, which, through its order
dated 20.12.2019, directed him to proceed with the Tribunal case.
(iv) During the pendency of the dispute, Opposite Party No. 3 was
instructed to hand over charges to Mr. Dharanidhar Mohanty, but
instead, he filed Miscellaneous Case No. 16/2020 before the Tribunal
seeking to retain society’s records. The Tribunal dismissed the case on
29.06.2020 and directed Opposite Party No. 1 to conduct an inventory
under Section 33(2) of the Act.
(v) Despite this, Opposite Party No. 1 failed to comply, enabling Opposite
Party No. 3 to retain the society’s records unlawfully. Following the
withdrawal of Service Dispute Case No. 13/2019 on 21.08.2020, Opposite
Party No. 2, the then Administrator, issued Order No. 23 dated
24.08.2020, arbitrarily reinstating Opposite Party No. 3 without the
authority of a duly elected Committee of Management.
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
(vi) Challenging this, the petitioner filed Dispute Case No. 123/2020 under
Section 68 of the Act before the Registrar of Co-operative Societies
(“Opposite Party No. 5”). The Registrar, through an order dated
02.03.2024, set aside the reinstatement order of 24.08.2020, restoring the
original removal order of 25.10.2019.
(vii) Opposite Party No. 3 subsequently filed Tribunal Appeal No. 09/2024
on 07.03.2024 challenging the Registrar’s decision but withdrew it on
16.03.2024. The petitioner became aware of this withdrawal on
25.03.2024 upon receiving the appeal memo and withdrawal petition.
(viii) As a result, the petitioner contends that the removal order dated
25.10.2019 remains valid and binding. However, it came to the
petitioner’s notice through a registered letter dated 21.03.2024 that
Opposite Party No. 1 issued Order No. 646 on 13.03.2024, once again
reinstating Opposite Party No. 3, in violation of the Registrar’s order
and the binding nature of the Tribunal proceedings.
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
3. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) The illegal action of Opposite Party No. 1 mirrors the unauthorized
conduct of Opposite Party No. 2 and amounts to an illegal exercise of
appellate jurisdiction in disguise over an order passed by a higher
authority. Such an action is void under Section 109(1)(j) of the Orissa
Co-operative Societies Act, 1962, read with Rule 22 of the PACS Staff
Service Rules, 2011.
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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
(ii) The removal order dated 25.10.2019 had already merged with the
Tribunal’s Order No. 41 dated 21.08.2020 in Service Dispute Case No.
13/2019, and the subsequent withdrawal of T. Appeal No. 09/2024
rendered Opposite Party No. 1’s attempt to nullify statutory
proceedings wholly void and without jurisdiction. Order No. 646 dated
13.03.2024 issued by Opposite Party No. 1 is, therefore, illegal and
arbitrary, constituting a clear disregard for statutory provisions and
judicial orders.
(iii) A bare perusal of the impugned order reveals serious illegalities and
procedural lapses. It is cryptic and fails to specify the registration date,
the appeal number, any directive for document production, or the
identity of the officer responsible for compliance. Such glaring
omissions render the order unsustainable under the PACS Staff Service
Rules, 2011, and the O.C.S. Act, 1962.
(iv) Furthermore, Opposite Party No. 3’s history disqualifies him from
holding any position within Opposite Party No. 7 Society. His record
includes a monetary penalty of ₹17,00,000 passed against him under
Section 67 of the O.C.S. Act in S.P. Case No. 9/2017 and pending
criminal proceedings in Baideswar P.S. Case No. 100/2019 under Section
409 IPC for the misappropriation of ₹17,69,286, corresponding to G.R.
Case No. 418/2019 before the learned S.D.J.M., Banki. Despite interim
protection granted by this Court in ABLAPL No. 17991/2019 on
27.10.2021, which directed him to deposit ₹8,00,000, Opposite Party No.
3 evaded compliance with Section 91 Cr.P.C. notices issued by the
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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
Vigilance Department on 01.01.2021 and failed to produce critical
records of the society, reflecting his continued malafide conduct.
(v) The petitioner, aggrieved by the Vigilance Department’s prolonged
inaction despite this Court’s observations in CRLMP No. 1695/2020 on
13.01.2021, sent a communication dated 11.03.2024 to the S.P. Vigilance,
Cuttack Division, urging immediate implementation of the Court’s
directions. However, no steps have been taken to date.
(vi) Notably, pursuant to Order No. 646 dated 13.03.2024, Opposite Party
No. 3, through a communication dated 21.03.2024, instructed Opposite
Party No. 1 to recall the order. Yet, Opposite Party No. 1 has failed to
act, and instead appears complicit in ensuring the irregular continuance
of Opposite Party No. 3/ permitting him to operate the society’s
accounts in collusion with the Branch Manager of Kalapathar Branch of
Banki Central Cooperative Bank Ltd. (“Opposite Party No. 4”). This
collusion raises strong suspicions of a concerted effort to
misappropriate society’s funds/ assets/ and properties.
(vii) The impugned order dated 13.03.2024, therefore, reflects a lack of
transparency, manifest malafides, and dubious conduct by Opposite
Party No. 1, acting in connivance with Opposite Parties No. 2 to 4 to
further illegal interests through Opposite Party No. 3. Such an
untenable order is void ab initio, lacks legal sanction, and is non-
existent in the eyes of the law.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY:
4. Per contra, learned counsel for the Opp. Party earnestly made the
following submissions in support of his contentions:
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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
(i). The petitioner placed the Opp. Party No.3 under suspension on
23.09.2019, citing allegations of misappropriation of society funds and
tampering with records. However, the removal order dated 25.10.2019
was issued without serving any notice, providing a charge memo, or
following the due process as mandated under Rule 22 of the
Notification dated 07.02.2011 issued by the Registrar of Cooperative
Societies, Odisha (“Opp. Party No.5”). The required procedures,
including communicating specific charges in writing, conducting a
formal inquiry, furnishing the inquiry report, and issuing a notice
regarding the proposed penalties, were not adhered to before imposing
the major penalty of removal.
(ii). Furthermore, the petitioner failed to produce any documents
substantiating the allegations against the deponent, including the
alleged audit report, either before the appellate authority or this Court.
These procedural and evidentiary deficiencies highlight a complete
disregard for the rules and principles of natural justice. The Opp. Party
No. 1, after thoroughly verifying the records, observed gross violations
of the prescribed procedures. Consequently, on 13.03.2024, the authority
quashed the removal order dated 25.10.2019 and directed the
reinstatement of the deponent.
(iii). The Appellate Authority also noted that the petitioner’s actions were
arbitrary and unsupported by evidence. It appears that the petitioner
acted with malafide intentions/ possibly driven by the deponent’s
refusal to comply with alleged undesired demands made during the
petitioner’s tenure as President of the society. Despite these findings,
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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
the deponent has remained out of employment since 25.10.2019 through
no fault of their own.
(iv). In light of these facts, the deponent respectfully prays for the interim
order dated 04.04.2024 to be vacated and requests permission to resume
duty in the society. The deponent seeks justice for the wrongful and
arbitrary actions taken against them and urges this Court to consider
the violations of procedure and lack of evidence in the matter. .
IV. COURT’S REASONING AND ANALYSIS:
5. Before adverting on the merits of the instant petition, this Court finds it
apposite to discuss the settled law with regards to the maintainability of
writ petition pertaining to service matters against a cooperative society.
6. The short question for adjudication in the instant petition is that
whether the Opp. Party No.7/Cooperative Society is amenable to the
writ jurisdiction of Courtin the instant writ petition which involves a
service dispute.
7. It is pertinent to note that this Court, in the case of Ch. Ajeet Kumar Das
and Ors. v. Registrar, Co-operative Societies, Odisha and Ors.,1 has
already adjudicated upon a similar issue. The said judgment, disposed
of on 31.07.2024, is relevant for the present matter. For the sake of clarity
and to ensure proper adjudication of the case at hand, the relevant
discussion from the aforesaid judgment is reproduced herein
8. Article 12 of the Constitution of India has defined the term “State” as
follows:
1
W.P.(C) No.18641 of 2020, Ori HC
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41“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.”
9. The constitutional history reveals that the term “other authorities” as
referenced in Article 12 has been the subject of extensive judicial
examination. This examination has led to the establishment of a
comprehensive body of jurisprudence dedicated to its interpretation.
The evolution of this legal framework highlights the significance of
“other authorities” in defining the scope of constitutional rights and
governmental powers.
10. In the case of Ajay Hasia and others v. Khalid MujibSehravardi,2 a
Constitution Bench of the Supreme Court, while approving the tests laid
down in the case of RamanaDayaramShettyv. International Airport
Authority of India &Ors.,3 as to when a corporation can be said to be an
instrumentality or agency of the government, observed which runs
thus:-
“The tests for determining as to when a corporation can be
said to be an instrumentality or agency of government may
now be culled out from the judgment in the International
Airport Authority case. These tests are not conclusive or
clinching, but they are merely indicative indicia which have to
be used with care and caution, because while stressing the
necessity of a wide meaning to be placed on the expression
“other authorities”, it must be realised that it should not be
stretched so far as to bring in every autonomous body which2
(1981 ) 1 SCC 722
3
(1979) 3 SCC 489Page 8 of 21
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41has some nexus with the government within the sweep of the
expression. A wide enlargement of the meaning must be
tempered by a wise limitation. We may summarise the relevant
tests gathered from the decision in the International Airport
Authority case as follows:
(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 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 factorwhether 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.
If on a consideration of these relevant factors it is found that
the corporation is an instrumentality or agency of
government, it would, as pointed out in the International
Airport Authority case, be an ‘authority’ and, therefore,
‘State’ within the meaning of the expression in Article 12.”
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
11. Then, in Pradeep Kumar Biswas v. Indian Institute of Chemical
Biology and Others,4 a seven-judge Bench of the Apex Court,
meticulously examined and endorsed the criteria established in the RD
Shetty(supra) and reaffirmed in the Ajay Hasia(supra) for determining
when a corporation can be classified as an “instrumentality” or
“agency” of the government, thereby falling within the scope of the
term ‘authority’ as defined in Article 12 of the Constitution. The Bench
referenced the case of Chander Mohan Khanna v. NCERT,5 wherein the
Apex Court, after evaluating the memorandum of association and
operational rules, concluded that the NCERT was primarily an
autonomous entity. It was determined that its functions were not
exclusively governmental, and government oversight was limited to
ensuring proper utilization of grants. Since its funding was not entirely
derived from government sources, it did not meet the criteria of a State
instrumentality under Article 12. Additionally, the Bench cited the
decision in Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers’
Association,6 where it was established that the company qualified as an
authority under Article 12. This conclusion was based on the fact that
the company was substantially funded and financially controlled by the
government, operated under a Board of Directors appointed and
removable by the government, and undertook functions of significant
public interest under governmental oversight.
4
(2002) 5 SCC 111
5
(1991) 4 SCC 578
6
(2002) 2 SCC 167
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
12. The evolving landscape of state control and the increasing involvement
of private entities in what is termed as “public functions” have
prompted the Supreme Court to address the issue of liability for such
private actors. A “public function” refers to a role traditionally reserved
for governmental authorities. Private sector individuals or entities are
deemed to be executing a public function when they undertake
responsibilities historically associated with government entities.
13. In AnandiMukta& Others v. V.R. Rudani& Others,7 the Supreme Court
clarified that the phrase “any person or authority” under Article 226 of
the Constitution is not confined to statutory bodies and government
instrumentalities. Instead, it extends to any individual or entity engaged
in performing a public function. Then, in Zee Telefilms Ltd. & Others v.
Union of India,8 the Supreme Court delineated the scope of “other
authorities” under Article 12 of the Constitution. This category includes
state-created corporations and societies engaged in trading, bodies
involved in research and development related to government functions,
and private entities performing public duties or undertaking activities
similar to those of government entities. Additionally, in Janet Jeyapaul
v. SRM University & Others,9 the Court found that SRM University was
engaged in a public function through its educational activities
14. The aforementioned decisions clarify that the precise type of entity–be
it a society, cooperative society, or company–does not solely determine
its status. What is essential is the degree of governmental control over
7
1989 (2) SCC 691
8
(2005) 4 SCC 649
9
2015 (16) SCC 530
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
the entity and its operationality in a manner similar to a “public
function.” The tests described must be collectively applied and
assessed. There is no fixed formula for this determination; instead,
various factors may become significant in different factual scenarios to
establish whether the entity qualifies as an authority under Article 12 of
the Constitution.
15. It is a settled position of law that for any other authority to fall within
the domain of the writ jurisdiction it should be discharging a “public
duty” and the dispute between the parties shall persist regarding the
non- performing of such public duty or function. It is pertinent to note
that the Supreme Court has time and again reiterated that when the
dispute pertains to the service matters and there is no element of public
duty involved in it, then the dispute falls within the domain of private
dispute and is not amenable to the jurisdiction of the writ Court.
16. It is undisputed that the Society has not been constituted under any
specific Act. However, it functions similarly to any other Co-operative
Society and is primarily regulated by the provisions of the Orissa
Cooperative Societies Act, except where otherwise provided in the
Society’s bye-laws. The State has no role in the day-to-day functioning
of the Society. Matters such as membership, acquisition of shares, and
other related affairs are governed by the bye-laws framed under the
Act. The terms and conditions of officers of the Co-operative Society
are, indisputably, governed by the applicable Rules.
17. It has not been shown before this court that the State exercises any
direct or indirect control over the affairs of the Society for deep and
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
pervasive control. It cannot, thus, be said that the State exercises any
functional control over the affairs of the Society.
18. In S.S. Rana v. Registrar, Co-Operative Societies,10the Supreme Court
dealt with the question of amenability of non-statutory cooperative
societies under Art. 226 of the Constitution. The relevant excerpt is
produced hereinbelow:
“The respondent No.1-Society does not answer any of the
afore- mentioned 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 vs. Khalid
MujibSehravardi [(1981) 1 SCC 722]. [See Zoroastrian
Coop. Housing Society Ltd. vs. District Registrar, Coop.
Societies (Urban) &Ors. reported in 2005 (5) SCC632.] 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 its day-to-day functions.”
19. In Krishna Mohan v. State Of U.P.,11the Allahabad High Court has held
that Co-operative societies, though subject to statutory supervision and
regulatory oversight by authorities like the Registrar, Joint Registrar,
and the Government, do not fall under the deep and pervasive control
of the State. The court observed as following:
“17. Societies are, of course, subject to the control of the
statutory authorities like Registrar, Joint Registrar, the
Government, etc. but cannot be said that the State exercises any10
2006 (11) SCC 634
11
WRIT(A) No. – 2329 of 2019; All HCPage 13 of 21
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41direct or indirect control over the affairs of the society which is
deep and all pervasive. Supervisory or general regulation under
the statute over the co-operative societies, which are body
corporate does not render activities of the body so regulated as
subject to such control of the State so as to bring it within the
meaning of the “State” or instrumentality of the State. Above
principle has been approved by this Court in S.S. Rana v. Registrar,
Co-operative Societies and another (2006) 11 SCC 634. In that case this
Court was dealing with the maintainability of the writ petition against
the Kangra Central Co- operative Society Bank Limited, a society
registered under the provisions of the Himachal Pradesh Co-operative
Societies Act, 1968. After examining various provisions of the H.P. Co-
operative Societies Act this Court held as follows:
“9. It is not in dispute that the Society has not been constituted
under an Act. Its functions like any other cooperative society are
mainly regulated in 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 cooperative society,
indisputably, are governed by the Rules. Rule 56, to which 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.
10. 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. 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, several other
relevant questions are required to be considered, namely, (1)
Howwas the Society created? (2) Whether it enjoys any monopoly
character? (3) Do the functions of the Society partake to statutoryPage 14 of 21
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Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41functions or public functions? and (4) Can it be characterised as
public authority?
11. Respondent 2, the Society does not answer any of the
aforementioned 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 MujibSehravardi. [See
Zoroastrian Coop. Housing Society Ltd. v. Distt.Registrar, Coop.
Societies (Urban).]
12. It is well settled that general regulations under an Act, like the
Companies Act or the Cooperative 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 its day-to-day
functions.”The fact that cooperative societies are subject to the
control of statutory authorities such as the Registrar, Joint Registrar,
and the Government does not imply that the State exercises direct or
indirect control over the society’s affairs in a manner that is deep
and all-pervasive.”
20. Based on the aforementioned, it is now well established that a
cooperative society does not fall within the purview of Article 12 of the
Constitution solely by virtue of being under the jurisdiction of the
Registrar of Cooperative Societies. Nonetheless, I shall now deal with
the amenability of service matters of the Cooperative Societies to the
jurisdiction of Art 226.
21. In Kulchhinder Singh v. Hardayal Singh Brar,12the Supreme Court
adjudicated upon the fact whether a writ pertaining to service matters
12
AIR 1976 SC 2216
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Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
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
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. KumkumKhanna [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,Page 16 of 21
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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41stripped 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 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.”
Page 17 of 21
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
22. The Delhi High Court in Satyapal Singh v. The Delhi State
Cooperative Bank13relied on KulchhinderSingh(supra)and held that
the service matters of the cooperative society is 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.
23. In Konaseema Co-operative Central Bank Ltd. v. N.
SeetharamaRaju,14the Andhra Pradesh High Court held that bye-laws
made by co-operative societies do not have the force of law. They are in
the nature of contract, terms of contract, between the Society and its
employees, or between the Society and its members. The relevant
excerpt is produced hereinbelow:
“The bye-laws made by a co-operative society registered under
the A.P. Co-operative Societies Act do not have the force of
law. They are in the nature of contract, terms of contract,
between the Society and its employees, or between the Society
and its members, as the case may be. Hence, where a Society
cannot be characterised as a ‘State’/ the service conditions of
its employees, governed by bye-laws, cannot be enforced
through a writ petition. However, in the matter of termination
of service of the employees of a co-operative society, Section 47
of the A.P. Shops and Establishments Act provides a certain
protection, and since the said protection is based upon public
policy, it will be enforced, in an appropriate case, by this Court
under Article 226 of the Constitution. Ordinarily, of course,
an employee has to follow the remedies provided by the A.P.
Shops and Establishment Act; but, in an appropriate case, this
Court will interfere under Article 226, if the violation of a13
W.P.(C) 7462/2022; Del HC
14
AIR 1990 Andhra Pradesh 171Page 18 of 21
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41statutory public duty is established. It is immaterial which Act
of Rule casts such a statutory public duty.
Mandamus, certiorari, and prohibition are public law
remedies. They are not available to enforce private law rights.
Every act of a society which may be a ‘State’ within the
meaning of Article 12, does not necessarily belong to public
law field. A society/ which is a ‘State’/ may have its private
law rights just like a Government. A contractual obligations,
which is not statutory, cannot be enforced by way of a writ
petition under Article 226 of the Constitution. Prior to
entering into contract, however. Article 14 operates, as
explained by the Supreme Court in E.E. & C. Ltd. v. State of
West Bengal, AIR 1975 SC 226 and RamanaDayaramShetty,
(1979) 3 SCC 489 : AIR 1979 SC 1628.”
24. From the aforementioned discussion, it has been established that, for an
organization to be deemed as performing a public function, such
function must be inherently associated with those performed by the
State in its sovereign capacity. From the preceding discussion, there is
no evidence on record to suggest that the Respondent/Society
undertakes functions comparable to those exclusively carried out by
State authorities. The Respondent/Society is a non-statutory entity that
does not perform any public function. Moreover, the
Respondent/Society does not hold any monopoly status conferred or
mandated by law. Although the State may promote such entities as part
of its social policy or economic development initiatives, this
encouragement does not equate to the performance of a public function.
25. In the present case, the lack of State control over the management of the
Respondent/Society significantly influences the conclusion that the
Page 19 of 21
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
Respondent/Society does not fall within the definition of a public
authority. The Respondent/Society operates under democratic control,
and the ultimate authority regarding the service conditions of its
employees lies with the management of the Respondent/Society.
26. Therefore, in thispetition, the Respondent/Society does not qualify as a
“State” or “instrumentality of the State” within the meaning of Article
12 of the Constitution and is thus not subject to the jurisdiction of
V. CONCLUSION:
27. In light of the comprehensive exposition of the law provided above, and
given the absence of any pleadings by the petitioner to substantiate that
the respondent qualifies as a State, it is deemed unnecessary to make
any further observations on this matter.
28. However, the Government is instructed to take cognizance of the
alleged irregularities in cooperative societies and banks. This Court has
been inundated with numerous such cases, reflecting a systemic issue
that requires urgent attention. The Government is, therefore, advised to
take immediate and proactive measures to address and rectify these
irregularities to ensure transparency, accountability, and proper
functioning of these institutions.
29. The petitioner is hereby advised to approach the appropriate forum for
the redressal of his grievance in accordance with the provisions of the
Odisha Co-operative Societies Act.
Page 20 of 21
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 25-Dec-2024 17:32:41
30. The Writ Petition is not maintainable and is, accordingly, dismissed.
(Dr.S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 17th Dec., 2024/
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