CIVIL WRIT JURISDICTION CASE No.7042 OF 1995 With CIVIL WRIT JURISDICTION CASE No.9940 of 1996 In the matter of an applications under Article 226 of the Constitution of India -------- In CWJC No.7042 of 1995 BIBHUTI BHUSAN SAHA---------------------------Petitioner Versus THE UNION OF INDIA & ORS--------------------Respondents In CWJC No. 9940 of 1996 CHITRANJAN PRASAD SINGH----------------------- Petitioner Versus THE CHAIRMAN/PRESIDENT, NATIONAL CO-OPERATIVE CONSUMERS’ FEDERATION OF INDIA LTD. & OTHERS ------------------------ Respondents --------- For the petitioners: M/S. Swaraj Kumar Ghose and Giridhar Gopal Tiwary. For the respondents: M/S. Sandeep Kumar, Banwari Sharma and Shiv Kumar. ---------- P R E S E N T THE HON'BLE MR. JUSTICE AJAY KUMAR TRIPATHI ***** Ajay Kumar Tripathi,J Since a common question of law arises for consideration in both the writ applications, they have been heard together and are being disposed of by a common order. 2. Both the petitioners were employees of National Co-operative Consumers’ Federation of India Ltd and were at the time posted at Patna. Certain verification of stocks and accounts led the respondents to believe that the two petitioners, one being the Branch Incharge and the other L.D.C. acting as Store Keeper had swindled some money by not accounting for certain Disco pencils and Video games, ranging - 2 - from about Rs.14, 000/- to Rs.25, 000/- became the reason why the disciplinary enquiry was initiated. Articles of charges were framed, served and enquiry held. Finding of guilt thereafter came to be recorded with regard to atleast some of the charges and vide order dated 24.2.1995 the President of the Organization while exercising power under Regulation 33 (d) of the Bye-laws of National Co- operative Consumers’ Federation of India Ltd. decided to impose punishment of termination from service on both these petitioners. These orders of punishment are under challenge in both the writ applications. 3. At the outset an objection has been taken by the learned counsel appearing on behalf of the respondents that the writ applications are not maintainable primarily on two grounds. Firstly, the Federation in question is an apex body of a Co-operative Society and does not come within the definition of State under Article 12 of the Constitution of India and therefore not amenable to writ jurisdiction. The second objection is with regard to the cause of action not having arisen within the territorial jurisdiction of Patna High Court. 4. According to respondents the enquiry was held at Lucknow and the orders in question came to be passed in Delhi. The Court therefore decides to deal with these two preliminary objections before moving on the merits of the issues involved. 5. Learned senior counsel appearing on behalf of the petitioners submits that the objection about the body not being the State within Article 12 of the Constitution of India is misplaced because the - 3 - respondents are creation under section 44 of the multi State Co- operative Society Act 1984. Sub section (4) gave pre-dominant right and governing role in matters of regulating the affairs of Federation. Central Government not only holds more than 77 per cent of the shares but also appoints the Managing Director of the Federation who generally happens to be a senior IAS Officer. The affairs of the Federation is closely monitored by the Ministry of Civil Supplies Consumers’ Affairs and Public Distribution, Government of India and the annual reports furnished by the Ministry always carries a separate chapter on the working and the status of the Federation. If this is not evidence to show that the Central Government has pervasive control over the affairs of the Federation then what more would be required. Not only this, reliance has been placed on several decisions which have been rendered by the Hon`ble Supreme Court where elaborate interpretation has been given in such matters. One of these decisions relied upon is the case of State of U.P. v. Neeraj Awasthi and others, (2006) 1 SCC 667, where a cooperative body has been held to be a State. The decisions rendered in the case of Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and others, (2002) 5 SCC 111 and Virendra Kumar Srivastava v. U.P. Rajya Karmachari Kalyan Nigam and another, (2005) 1 SCC 149 have been relied upon to reinforce the same argument that the respondents are amenable to the writ jurisdiction. As an alternative argument learned Senior Counsel appearing on behalf of the petitioners also relies on a decision rendered in the case of Shri Anandi Mukta Sadguru Shree - 4 - Muktajee Vandasjiswami Suvarna Jayatni Mahotsav Smarak Trust and others vs. V R Rudani and others, AIR 1989 SC 1607 for the proposition that the High Courts have a wider jurisdiction to exercise especially while sitting under Article 226 of the Constitution of India. The look at the constitutional provision would show that the authority of the Court under Article 226 and power can be exercised to issue to any person or authority including a society of the kind in appropriate cases. Article 226 (1) & (2) is reproduced hereunder for easy reference: “226. Power of High Courts to issue certain writs.- (1) Notwithstanding anything in article 32 every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including [writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.] (2) The power conferred by clause (1) to issue directions, orders or writs to any Government authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.” - 5 - 6. A plain reading of the provisions of Constitution would further show that in the case of the Hon`ble Supreme Court it is only matters of violation of fundamental rights that the power under Article 32 can be exercised. But the constitutional framers have conferred upon the High Court a wider power to exercise over authority to cure illegalities where it is demonstrated that a legal or constitutional right is violated. In view of the legal position in this regard the Court has difficulty in accepting the preposition and objection raised by the respondents that the Court lacks authority, to exercise over the matter or the respondent, Federation. 7. In so far as to the cause of action is concerned, the respondents do not dispute that both the petitioners were posted at Patna at the relevant time, one was holding the post of an Assistant Manager while the other was a LDC. The charges have been drawn up and enquiry was held against them for so-called non accounting of certain quantity of disco pencils and video games and the cause behind the enquiry related to the working of these petitioners while being posted at Patna. Merely because on transfer the enquiry was held at yet another place, it does not mean that no part of cause of action had arisen within the territorial jurisdiction of Patna High Court. The Court therefore opines that even this objection is misplaced. 8. Coming to the merits of the matter, several submissions have been made on behalf of the petitioners. One is that by exercising power of imposing order of punishment, the President of the organization who is the appellate authority usurped the jurisdiction of - 6 - the disciplinary authority. This has implication for the petitioners because substantive right of appeal has been taken away. The disciplinary authority in such cases is the Managing Director and the appeal lies with the Board of Directors headed by the President. If the President himself decides to act as disciplinary authority, then serious prejudice is caused to the statutory provision and substantive right of appeal. In this regard reliance has been placed by the learned Senior Counsel appearing on behalf of the petitioners on a decision reported in the case of Surjit Ghosh v. Chairman & Managing Director, United Commercial Bank & others, 1995 (2) SLR 11. 9. The second limb of attack on the order of punishment is that there is a serious error of law which has been committed by the President by invoking Regulation 33(d) of the Bye-laws as amended up to 22nd April, 1994. Regulation 33 deals with the powers of the President. Regulation 33(d) is reproduced below for easy reference because that is the issue for consideration in the writ application: “33. (d) The President shall be competent to decide whether a situation of emergency has arisen. When a decision to this effect is taken by the President, he shall be competent to exercise all powers of the Board of Directors. Any action taken or any action passed by the President in pursuance of this authority shall be placed in the next meeting of the Board of Directors.” 10. A bare perusal of the provision of regulation 33(d) would show that the President has been empowered to decide certain issues when a situation of emergency has arisen. Such decision is - 7 - subsequently rectified by the Board of Directors. 11. In the present case exercise of authority of a disciplinary authority on a set of charges against two employees was not an emergent situation. The power under regulation 33(d) is not to be usurped by the President by snatching away what is vested in a disciplinary authority which is the Managing Director in the present case. This according to the petitioners makes the order of punishment untenable if not an illegal. There seems to be force in this contention of the petitioners. Further the order does not even indicate the emergent situation for exercise of power under regulation 33(d). 12. Learned counsel appearing on behalf of the respondents submits that there was an emergent situation because large amount of money had been swindled by the two petitioners and it was in the interest of protecting the organization from further financial losses that the President decided himself to punish the guilty. 13. The enthusiasm of the President in exercising such powers is not appreciated by this Court. An all India Organization having branches across the country will have some financial or disciplinary problems of this kind because of the misconduct of its employees but whether such action is an emergent situation of the kind where every other authority has to surrender its power to the President, cannot be appreciated or accepted as a cogent reason, for exercise of authority under regulation 33(d). 14. The Court therefore does come to a considered opinion that two orders of punishment dated 24.2.1995 passed against the two - 8 - petitioners namely, Bibhuti Bhusan Saha and Chitranajan Prasad Singh deserve to be interfered with and the two orders of punishment stand quashed. The consequential order passed in appeal also stands set aside. 15. The writ applications are allowed. There will be no order as to costs. (Ajay Kumar Tripathi, J) Patna High Court; The 11th September, 2008. R.K.Pathak (NAFR).