IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.3355 of 2009 Date of decision: 7.4.2011 ______________________________________________ Kuldeep Singh & ors. …. Petitioners Versus State of H.P & ors. ` ….. Respondents Coram: The Hon’ble Mr. Justice Deepak Gupta, J. Whether approved for reporting ? Yes For the petitioners: Mr.Dilip Sharma, Advocate For the respondents: Mr.Rajesh Mandhotra, Dy.AG for respondents No.1 and 2. M/s.Ramakant and Devyani Sharma, Advocate for respondent No.3. Mr.B.C.Negi, counsel for respondents No.4 to 10. ____________________________________________ Deepak Gupta, J. (Oral) The petitioners were selected as Grade-III Officers in the respondent-Jogindra Central Co-operative Bank pursuant to the advertisement Annexure P/2 whereby the Bank invited applications for filling up three posts out 2 of which two were meant for the General category and one was reserved for the Scheduled Caste candidates. In the advertisement, it was mentioned that these three posts of Grade-III Officers were in the pay scale of Rs.7575-14250. It is not disputed that the petitioners were selected after following the proper procedure. However, after selection, the petitioners were appointed as Grade-III Officers on a consolidated salary of Rs.3500/- for the probation period of two years. The petitioners successfully completed their probation period and were regularized thereafter. The first issue which has arisen in this petition is whether the period of probation during which the petitioners served the Bank is to be counted for the purposes of increments, seniority, fixation of pay etc. The second issue which arises in this petition is that the petitioners have challenged the promotion of respondents No.4 to 10 who were already serving as Grade- III Officers in the Bank and who have promoted 3 to the grade-II posts, mainly on the ground that the said respondents did not fulfil the necessary eligibility criteria. Before coming to the merits of the case, it would be appropriate to deal with the preliminary submission raised by Sh.B.C.Negi, Advocate, appearing on behalf of the respondents No.4 to 10 that the present petition is not maintainable and no petition lies against a Co-operative Society. In support of his contention, Sh.Negi has relied upon the judgment of a Division Bench of this Court in Chandresh Kumar Malhotra Vs. H.P State Coop. Bank and others 1993(2) SLC 243 wherein this Court held as follows:- “It was contended by the learned counsel for the petitioners that since in some of the cases orders, which have been passed, in accordance with the provisions of the Service Rules have been either upheld or varied by the Registrar, and such order also being under challenge in the writ petition, the writ petition would be maintainable and this Court will be competent to issue suitable directions interfering with the orders so passed by the statutory authority. This submission also has no force. The power which has been exercised by the Registrar is under various service regulations framed by the Societies under their respective Bye-laws by virtue 4 of Rule 9(j) of the Rules and is not a statutory power exercised by the Registrar under the provisions of the Act and Rules. The power exercised is under service regulation framed by the Societies by virtue of powers contained in the Bye-laws. Since the bye-laws have no force of law as held in Co-operative Central Bank Ltd. and others Vs. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad, AIR 1970 SC 245 and affirmed in Babaji Kondaji Garad and others Vs. Nasik Merchants Co-operative Bank Ltd., Nasik and others, AIR 1984 SC 192, the service regulations also have no force of law. No doubt, the orders under challenge are passed by the Registrar, but the Registrar has exercised his power under the service Regulations and not under the Statute or the Rules.” On the other hand, Sh.Dilip Sharma, learned counsel for the petitioners has placed reliance on the judgment delivered by a learned Single Judge of this Court in CWP No.641 of 2002 titled Mehar Chand and another Vs. Jogindra Central Co-operative Bank Ltd. & ors. decided on 26.9.2007 wherein after considering the judgment in C.K.Malhotra’s case supra as well as the judgment of the Apex Court in S.S.Rana Vs. Registrar Co-operative Societies and anr., 2006 (11) SCC 634, the learned Single Judge held as follows:- 5 “The upshot of the above discussion is that the respondent-Bank is an “authority/ instrumentality” of the State and is a State within the meaning of Article 12 of the Constitution of India and is amenable to the writ jurisdiction of this Court.” The learned Single Judge has passed a detailed judgment after considering the entire law. It has been stated at the Bar that this judgment is under challenge before a Division Bench of this Court in a Letters Patent Appeal. Be that as it may, since a learned Single Judge of this Court has taken a view, I feel no reason to take a different view and accordingly hold that the Bank is an instrumentality of the State and is amenable to the writ jurisdiction of this Court. This brings us to the first question as to whether the service rendered by the petitioners while on probation should be taken into consideration for the purpose of seniority including fixation of pay etc. The material on record also shows that respondent No.3-Bank was also of the view that the period of probation had to be reckoned and taken into 6 consideration while fixing the seniority and also for the purpose of grant of increments. In annexure P/2, it was clearly mentioned that the appointment is to be made to the post of Grade-III Officers though in the advertisement itself, it is mentioned that for a period of two years, the selected Officers would be paid a consolidated salary of 3500/- per month for two years. However, the bank had to change its view in view of the instructions issued by the Registrar, Co-operative Societies to the effect that this is a bad practice and that only the service rendered from the date of regularization should be taken into account for the purposes of seniority. Sh.Dilip Sharma has drawn my attention to the instructions issued by the Central Government which provide that the period of training, if followed by regular appointment, should be taken into consideration for the purpose of drawing increments. The relevant portion of the office memorandum dated 22.10.1990 reads as follows:- 7 “The matter has been considered in the National Council (JCM) and it had been decided that in case where a person has been selected for regular appointment and before formally taking over charge of the post for which selected person is required to undergo training, training period undergone by such a Government servant whether on remuneration of stipend or otherwise may be treated as duty for the purpose of drawing increments.” The State of Himachal Pradesh has taken a conscious decision on 19.2.1991 to adopt this office memorandum for the State Government employees also. What is probation? Probation is the period when a person who has been selected is kept under observation and if his service, behaviour and other factors are found upto the mark, the person is regularized in service. In case the employer finds that the person is not suitable then without casting a stigma on the said person, his services can be terminated during the period of probation. Here we are dealing with a case where the appointment was made after following the procedure prescribed under the 8 rules and regulations. An advertisement was issued. Applications were invited. Thereafter, written test and interviews were conducted and the best persons were selected. The selection of the petitioners has been made after following the due procedure prescribed by law. In my view, it cannot be said that the period on which these persons were on probation did not amount to service. This is not the purpose of “probation” or of “regularization” or “confirmation”. I am supported in taking the aforesaid view by a Constitution Bench Judgment of the Apex Court in Direct Recruit Class-II Engineering Officers’ Association and ors. Vs. State of Maharashtra and ors. 1990(77) SCC 1607 wherein the Apex Court held as follows:- “44. To sum up, we hold that: (A) Once an incumbent is appointed to a post according to rule, his seniority has to be counted from the date of his appointment and not according to the date of his confirmation. The corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as a stop-gap 9 arrangement, the officiation in such post cannot be taken into account for considering the seniority.” The Apex Court in the aforesaid judgment has made it absolute clear that if even an officiating appointment made according to the rules is followed by regularization then it has to be counted for all intents and purposes. The case of the petitioners is even stronger. They were not officiating but had been selected after following the due procedure and, therefore, the service rendered by them during the period of probation had to be counted both for purposes of seniority as well as for grant of increments. This brings us to the second question as to whether respondents No.4 to 10 were eligible under the rules to be promoted Grade- II officers. The relevant rules in this behalf read as follows:- Existing Service Rules for direct recruits For Promotees d)Grade-II Officer i) A second class degree of a recognized i) A degree of recognized University or CAIIB or HDC/DCBM. 10 University. ii) Associate of II B. iii) Banking line experience of 5 years. ii) A minimum of 3 years service as officer Grade- III. These rules clearly provide that when Grade-III officers serving in the Bank had to be promoted as Grade-II officers, they must possess a degree of a recognized university or CAIIB or HDC/DCMB. None of the private respondents fulfilled these essential qualifications. The defence of the Bank appears to be that the Bank for the last many years had been treating the diploma of cooperative banking (DCB) equivalent to the diploma of Cooperative Banking Management (DCBM). The Registrar, Co-operative Societies in his reply has clearly stated that these diplomas could not be declared to be equal since the diplomas which are made equivalent as per the rules, i.e., DCBM and HDC are both of nine months diplomas whereas DCB is only a three months’ course. 11 It has been strenuously contended by Sh.Ramakant Sharma that since the past practice continued for many years whereby DCB was considered to be equivalent to DCBM, the Bank following such past practice had appointed the private respondents as Grade-II Officers. Can past practice replace the Rules? In my opinion, when there are statutory rules or even bye-laws which have the force of law past practice cannot overrule statutory provisions which have the force of law. In Kumari Manju and anr. Vs. State, AIR 1972, Himachal Pradesh 37, a Division Bench of this Court held that the rule making power is strictly speaking a legislative power and the rules framed by a college which is either run by the State or is a State aided institution would be law enforceable in Court. Once there are statutory rules, no past practice contrary to the Rules even if it may have been practiced for many years can be permitted to replace the statutory rules or 12 bye-laws. If the Bank felt that persons with diploma in DCB should be made eligible, there was nothing which prevented the Bank from amending the Rules and including the DCB as one of the equivalent diplomas. But without amending the rules, the officials of the Bank cannot make unequals equal. Therefore, the promotion of respondents No.4 to 10 as Grade- II officers has to be quashed. Sh.Ramakant Sharma has also pointed out that out of the private respondents, respondents No.4 and 6 retired on 30.4.2010 and respondent No.9 is due to retire on 30.4.20011 and respondent No.5 is to retire on 31.6.2011. It is submitted that a number of vacant posts of Grade-II officers are available and the petitioners can be adjusted. It is not only the question of adjustment of the petitioner. It is also the question of grant of seniority to them. Once this Court has held that the service of the petitioners from 2002 on probation has to be taken into consideration for grant of seniority, 13 they were eligible for consideration in the year 2007 when the respondents were promoted. Therefore, these promotions have to be set aside. Accordingly the promotions of respondents No.4 to 10 are set aside. The Bank is directed to constitute a fresh Departmental Promotion Committee (DPC) and make fresh promotions after taking into consideration the candidature of the petitioners. This exercise be completed by 31st August, 2011. It is also make clear that on or before the said date, the Bank can approach the Registrar, Cooperative Societies for relaxation of the educational qualifications in the special circumstances of the case and the Registrar shall consider the same. It is however, made clear that even if relaxation is granted, the respondents No.4 to 10 cannot rank senior to the petitioners. The benefit of increments shall also be given to the petitioners and the arrears of this account shall be paid to the petitioners on or before 31st August, 2011 failing which the Bank shall be 14 liable to pay interest @ 9% per annum. In case the petitioners are found eligible and are granted promotion w.e.f. 2007 then they shall be entitled to all consequential benefits including arrears of pay which shall be paid to them by 31st December, 2011. The petition is disposed of in the aforesaid terms. No order as to costs. April 7, 2011 ( Deepak Gupta ) (m) Judge