The power exercised by the Chairman of the Committee cannot be subject to Regulation 87: Supreme Court of India

IN THE CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 49 OF 2021 ARISING OUT OF SLPNO. 298 OF 2021 DIARY NO. 4183 OF 2020 CHAIRMAN ADMINISTRATIVE COMMITTEE U.P MILK UNION & DAIRY FEDERATION VERSUS …..APPELLANT JAGPAL SINGH ....RESPONDENT JUDGMENT HEMANT GUPTA J The challenge in the present appeal is to an order passed by the Division Bench of the High Court of Judicature at Allahabad Lucknow Bench dated 26.8.2019 affirming the order passed by the learned Single Bench on 17.5.2019 The writ petition filed before the High Court was to assail an order of punishment dated 26.10.2018 whereby the respondent1 was ordered to be reverted to the minimum pay scale and the period of suspension was to be considered as a period spent by the employee in service. However for the said suspension period the employee was not found to be entitled to any other pay or allowance except subsistence allowance and dearness allowance The order of punishment was passed after the prior approval of the hereinafter referred to as ‘employee’ Commissioner Lucknow designated as Registrar by the State Government on the same day The employee was appointed as Executive Trainee in the Centralised Services on 11.8.1984. After completion of the training period he was appointed as Manager Grade III. The employee was served with a charge sheet dated 21.4.2015 inter alia on the ground that in addition to two chambers of milk in tankers one more additional third hidden chamber having capacity of 310 liters was created by partition. Water was filled in the said additional chamber to maintain total weight of the vehicle. After weight measurement at the time of unloading of milk from the two chambers water from the additional hidden chamber was discharged. On account of manipulation in the weight measurement the Federation suffered financial losses. The employee controverted the said allegations and thus an Inquiry Officer was appointed. In the Inquiry Report dated 13.6.2018 charges nos. 1 and 3 were found to be partially proved against the employee. The Inquiry Report was then forwarded to the employee along with a show cause notice on 25.6.2018. An opportunity of personal hearing was also afforded to him. It is thereafter that the Managing Director Chairman passed an order on 26.10.2018 holding the employee guilty of all the three charges and passed an order of punishment as mentioned above after obtaining approval from the Commissioner The Registrar may from time to time frame regulation to regulate the emoluments and other conditions of service including the disciplinary control of employees in a co operative society or a class of co operative societies and any society to which such terms are applicable shall comply with those regulations and with any orders of the Registrar issued to secure such compliance 2) The regulations framed under sub sectionshall be published in the Gazette and take effect from the date of 122. Authority to control employees of co operative societies. The State Government may constitute any authority or authorities in such manner as may be prescribed for the recruitment training and disciplinary control of the employees of co operative societies or a class of co operative societies and may require such authority or authorities to frame regulations regarding recruitment emoluments terms and conditions of service including disciplinary control of such employees and subject to the provisions contained in Section 70 settlement of disputes between an employee of a co operative society and the 2) The regulations framed under sub section shall be subject to the approval of the State Government and shall after such approval be published in the Gazette and take effect from the date of such publication and shall supersede for short the ‘Act’ any regulations made under Section 121 3122 A. Centralisation of certain services. When any such service is created all employees of such societies existing on the dale of creation of such service on the posts included in such service shall be deemed to have been provisionally absorbed in the service. with effect from the date of creation of such service Provided that any such employee may by notice in writing to the prescribed authority within the prescribed period intimate his option of not becoming a member of such service and in that event his services in the society shall stand determined with effect from the date of such notice and he shall be entitled to compensation from the society which shall be Section 130. Power to make rules.— the State Government may make rules to carry out the purposes of this Act. THE UTTAR PRADESH CO OPERATIVE SOCIETIES RULES 19684 2. Definitions In these rules unless the context otherwise requires b) “Apex Society” “Apex Level Society” or “State Level Co operative Society” means 1) tosubs.by U.P. Act 177Pradeshik Co operative Dairy Federation Ltd. 389 A. The authority or authorities under Section 122 may be constituted by the State Government by notification published in the Official Gazette substituted by Notification No. 3885 C XII CA 5(1) 69 B dt. Aug. 31 1971 published in the U.P. Gaz. Extra. dt. 31st Aug. 1971 p.2.” In terms of Section 122 of the Act and Rule 389 A of the 1968 Rules a notification was issued on 4.3.1972 constituting Uttar Pradesh Co operative Institutional Service Board for the purposes of recruitment training and disciplinary control of the employees of apex level central or primary societies. Later the Uttar Pradesh Co operative Societies Employees Service Regulations 19755 were published in the U.P. Gazette Extraordinary on 6.1.1976 in exercise of the powers conferred under Section 121 of the Act. Some of the relevant provisions read thus “2(iii) ‘appointing authority’ means “Committee of Management” or any other authority which is empowered under these regulations or the bye laws of the society concerned to make appointment iv) ‘Board’ means the U.P. Co operative Institutional Service v) toix) ‘Co operative Society’ means a Co operative Society placed under the purview of the Board by Government Notification No. 366 C XII C 3 36 71 dated March 4 1972 as amended from time to time by notifications issued under Section 122 of the Act read with Rule 389(a) of the Rules for short the ‘Service Regulations’ 87. Order imposing penalty under sub clausestoof clauseof Regulation No. 84 shall not be passed except with the prior concurrence of the Board.” Regulation 84 of the Service Regulations provides for penalties such as reduction in rank or grades held substantively by the employeeremoval from serviceor dismissal from service “Act” means the Uttar Pradesh Co operative Societies Act 1965 b) “Authority” means the Cadre Authority as constituted in accordance with rule 4 of these rules c) “Board” means the Committee of Management of the Pradeshik Co operative Dairy Federation Ltd. Lucknowd) “Committee” means the Administrative Committee constituted in accordance with rule 5 of these rules e) “Federation” means the Pradeshik Co operative Dairy Federation Ltd. Lucknow f) to3. Creation of Service. Uttar Pradesh Co operative Dairy Federation and Milk Unions Centralised Service shall consist of all the managerial posts of the Federation and the Unions except the post of Managing Director Chief for short the ‘Dairy Service Rules’ Commercial Manager and Chief General Manager of the 2) No appointment shall be made to any of the posts falling within the purview of the service by the Federation or Union from the date of enforcement of these rules Provided that the Government may place on deputation any officer of the Government on any managerial post of the federation or Union Provided further that the services of the persons already in the employment of another Co operative Society or a corporation or undertaking owned or controlled by the central or State Government or a body corporate administering a local fund or National Dairy Development Board may also be taken on deputation 4. Constitution of Cadre Authority. The Cadre Authority shall be constituted as under …Chairman The Registrar toix) Managing Director of the Federation …Member Secre Note. In case the post of the Registrar and the Manag ing Director of the Federation is held by the same officer the Chairman may nominate any member as Member Secretary and the vacancy of member so caused shall be filled by nomi nation of any other officer or the Federation by the Managing 5. Constitution of Administrative Committee. The Administrative Committee shall be constituted as under i) Managing Director of the Federation Chairman ii) A nominee of the Registrar not below the rank of Class I Officer Member iii) A nominee of the Managing Director of the Federation 9. Powers and duties of the Authority. The Authority with the prior approval of the State government shall frame regulations relating to recruitment training emoluments disciplinary control and other conditions of service of the members such regulations shall come into force from the date of their publication in the Gazette. The Authority shall— determine and modify from time to time the scales of pay for different category of posts with the approval of the Registrar ii) settle the dispute and allocate the cost of training travelling allowance salary and other allowances for the period of training and the cost of recruitment under sub rule 6) of rule 22 iii) advise the Government and the Registrar on matters relating to the Service iv) decide such policy matters concerning the Service as may be referred to it by the Committee v) exercise such other powers and perform such other duties under these rules or regulations as may be entrusted to it by the Government or the Registrar from time to time Powers and duties of the Committee. The 10. exercise overall control and supervision over the members of the Service to15. Appointing Authority. Appointing authority of and the authority exercising disciplinary control over the members of the service and the Management Trainees and the Executives shall be such as may be laid down in the Provided that till enforcement of such regulations the Chairman of the Committee shall be the appointing authority and the authority exercising disciplinary control over them.” Later Regulation 106 was inserted in the Service Regulations vide Notification No. 2295 dated 9.12.2002. The provision reads as “1. Short title commencement and application These regulations may be called the Uttar Pradesh Co operative Societies Employees’ Service They shall take effect from the date of their publication in the U.P. Gazette 3) They shall apply to all the Employees of Co operative Societies in Uttar Pradesh 2. Insertion of new Regulation. In the Uttar Pradesh Co operative Societies Employees’ Service Regulations 1975 after Regulation 105 the following regulation shall be inserted namely: “106. The State Government or the Registrar may pass such orders not inconsistent with these Regulations as it or he deems necessary just and proper to remove any difficulty arising in relation to emoluments terms and conditions of service appointment or re appointment termination dismissal or removal deputation or merger.” The Cadre Authority was required to frame regulations in terms of Rule 9 of the Dairy Service Rules with the prior approval of the State Government relating to recruitment training emoluments disciplinary control and other conditions of service of the members whereas the Administrative Committee under Rule 10 was to exercise overall control and supervision over the members of the service. Rule 15 of the Dairy Service Rules contemplated that the Appointing Authority and the authority exercising disciplinary control over the members of the service shall be such as may be laid down in the regulations. However the proviso contemplated that till the enforcement of such regulations the Chairman of the Administrative Committee shall be the Appointing Authority and would act as the authority exercising disciplinary control as well. The Administrative Committee in exercise of the powers conferred under Rule 10 read with proviso to Rule 15 passed an office order on 8.8.2016 that prior to imposing of penalty the approval of Dairy Milk Commissioner Registrar would be mandatory. The relevant extract from the said Circular reads as under “… Therefore in the matter of employees of Centralised Service Cadre until the provisions of Uttar Pradesh Cooperative Society Employees Service Rules 1975 are applicable till then prior to imposing of penalty the approval of Dairy Milk Commissioner Registrar is mandatory. Therefore the Chairman Administrative Committee Uttar Pradesh Cooperative Dairy Federation and Dairy Milk Federation Centralised Service Cadre PCDF Hqrs. Lucknow is hereby directed that prior to imposing penalty against the members of aforesaid cadre the prior approval of Dairy Milk Commissioner Registrar under the provisions of Regulation 87 of Uttar Pradesh Cooperative Society Employees Service Rules 1975 may be obtained necessarily.” It is in terms of the said Circular that the order of punishment was passed against the employee after approval from the Commissionerdischarging functions as the Registrar The High Court relied upon a judgment of Division Bench of the High Court in Chandra Pal Singh v. State of U.P. & Ors.7 wherein it was held that prior approval of the Board was not obtained as is required under Regulation 87 of the Service Writ A No. 452611 passed on 9.1.2018 Regulations. It was noted that though in terms of notification dated 17.11.1979 Service Regulations ceased to apply but provisions as were existing before the provisions of Service Regulations would be applicable to the employees of the Centralised Services in terms of the resolution dated 20.9.1984. It was also held that the notification dated 17.11.1979 was not mentioned in the resolution dated 20.9.1984. Thus it was concluded that the order of punishment without approval of the Board was not legal in terms of Regulation 87 of the Service Regulations. Hence the order of punishment was quashed. The relevant extract from Chandra Pal Singh reads as under “Considered the submissions of learned counsel for the parties and perused the record. As far as the approval part is concerned admittedly no approval concurrence was obtained by the Board before passing the order of dismissal from service. In view of the provision of Regulation 87 of U.P Cooperative Societies Employees Service Regulation 1975 concurrence of the Board is required before passing the order of dismissal. According to notification dated 17.11.1979 Pradeshik Cooperative Dairy Federation Ltd including the Primary Milk Cooperative Society were put out of purview of U.P. Cooperative Societies Employees Service Regulation 1975 with respect to the recruitment training and disciplinary control and by the same notification selection committee was constituted for category 1 and 2 employees of cooperative dairy federation. Hence in case of the Centralised Services the provision of Regulation 87 ceased to apply and whatever provision was applicable before the provision of Regulation 1975 was adopted which will be applicable to the employees of Centralised Services When the provision was adopted by the resolution of the Board dated 20.9.1984 the notification of 1979 was not mentioned in the same and the resolution regarding adoption of the provisions of Pradeshik Cooperative Society Employees Service Regulation 1979 were adopted till regulation for the Centralised Services was framed Subsequently it was clarified and approved vide order dated 31.1.2000 by the Dairy Commissioner Registrar and the resolution dated 20.9.1984 was approved. Hence till regulations are framed the provisions of U.P. Cooperative Societies Employees Service Regulations 1975 are 17. We find that the High Court in the impugned judgment and in Chandra Pal Singh proceeded on wrong assumptions of facts and law. Factually in the present appeal the disciplinary proceedings against the employee were initiated on 21.4.2015. The Inquiry Report was submitted on 13.6.2018 wherein the charges nos. 1 and 3 were found to be proved. Thus there was no question of recording of any disagreement with the findings recorded by the Inquiry Officer. A show cause notice was subsequently served upon the employee enclosing a copy of the Inquiry Report on 25.6.2018 The employee was given an opportunity for personal hearing as well. Thereafter an order of punishment was passed after obtaining approval from the Commissionerof the Dairy Service Rules. Such Administrative Committee constituted under Rule 5 of the Dairy Service Rules is the Appointing Authority till the time Regulations are framed in terms of Rule 15 of the said Rules. Therefore the Resolution dated 20.9.1984 will not deter mine the Appointing or Disciplinary Authority the same being cov ered the Statutory Rule namely the Dairy Service Rules. The Dairy Service Rules have been framed in exercise of the juris diction conferred under Section 122A of the Act. The Regulations can be framed by the Registrar or the State either under Section 121 or 122 of the Act or in terms of Rule 9 of the Dairy Service Rules. Such Rules would have precedence over the Regulations which are framed or are required to be framed either by the Regis trar or by the Authority entrusted with the task of recruitment training and disciplinary control. Therefore in terms of proviso to Rule 15 the Chairman of the Administrative Committee is the Ap pointing and Disciplinary Authority. Hence the Service Regulations would be inapplicable to determine the Appointing Authority and or the Disciplinary Authority in respect of the employees of Co opera tive Milk Societies. The attention of the Division Bench in Chandra Pal Singh was not drawn to Rule 15 of the Dairy Service Rules. The proviso to the said Rule empowered the Administrative Committee constituted under Rule 5 as an Appointing Authority and the authority to exercise disciplinary control over the employees of the centralised services till the time regulations are framed. The resolution dated 20.9.1984 would thus be applicable in respect of other service conditions. However with regard to disciplinary control it would be the Dairy Service Rules which would be applicable 22. Regulation 106 of the Service Regulations empowers the State Government or the Registrar to pass such orders not inconsistent with the Regulations in respect of termination dismissal or removal. The punishment imposed is of reversion and not of either termination dismissal or removal. Therefore Regulation 106 will not be applicable. There is also no inconsistency or difficulty which the State Government or Registrar is empowered to remove in exercise of powers conferred under Regulation 106. In Chandra Pal Singh the finding of the Division Bench that the 1979 notification is not mentioned in the resolution of the Cadre Authority passed on 20.9.1984 is untenable in view of statutory rules contemplating the Appointing Authority. Therefore the order of punishment passed by the Chairman of the Administrative Committee in terms of proviso to Rule 15 is by the competent The Administrative Committee however passed an office order on 8.8.2016 that the Chairman shall seek prior approval of Dairy Milk Commissioner Registrar prior to imposing penalty. Such decision of the Administrative Committee is self regulatory and has been ap plied by the Administrative Committee in the present case as well while seeking prior approval of the Milk Commissioner Registrar. As mentioned before the 1975 Regulations were framed in exercise of power conferred under Section 122 of the 1965 Act. Till the time 1975 Regulations were framed the entire statutory regime in terms of which service conditions including disciplinary control of employees in a co operative society or class of co operative societies could be regulated was in terms of Sections 121 and 122 of the 1965 Act. Regulation 875 Regulations therefore has to be seen as part of such general statutory regime. 26. On 16.04.1976 Section 122 A was inserted in the 1965 Act which now provided for centralization of services. This Section opens with a non obstante clause and thus the intent is to give an overriding effect over the general regime contemplated by Sections 121 and 122 of the 1965 Act. Section 122 A of the 1965 Act empowers the Government by rules to provide for creation of one or more services of employees of such co operative society or class of co operative societies as the Government may think fit and prescribe inter alia conditions of service including appointment and removal of persons appointed to such service. It was in exercise of power conferred under Section 122 A of the 1965 Act that 1984 Rules were framed. Rule 15 of the 1984 Rules stipulates that the appointing authority and the authority exercising disciplinary control over the members of the service shall be such as may be laid down in the Regulations and till such Regulations are brought in force ‘the Chairman of the Committee shall be the appointing authority and the authority exercising disciplinary control over them’ In terms of the specific statutory regime referable to Section 122 A of the 1965 Act Rule 15 thus would be the governing principle rather than Regulation 87 framed in exercise of regulation making power referable to the general dispensation under Sections 121 and 122 of the 1965 Act. Rule 15 does not contemplate that the Chairman of the Committee is required to have any prior concurrence of any authority. It would therefore be incorrect to rely upon or import the principles of Rule 87 in substitution of clear intent and mandate of Rule 184 Rules. The Resolution dated 20.09.1984 or for that matter the Office Order dated 08.08.2016 which are pure departmental executive instructions cannot displace statutory Rule 15 and the process contemplated therein and import a requirement which would be in the teeth of Rule 15 The learned Single Bench found that the Chairman of the Adminis trative Committee and that the Milk Commissioner are one and the same person which vitiates the order of punishment passed. We do not find any merit in the said finding. Sir William Wade in his Administrative Law stated “But there are many cases where no substitution is possible since no one else is empowered to act. Natural justice then has to give way to necessity for otherwise there is no means of deciding and the machinery of justice or administration will break down It was further stated “In administrative cases the same exigency may arise Where the statute empowers a particular minister or official to act he will usually be the one and only person who can do so. There is then no way of escaping the responsibility even if he is personally interested. Transfer of responsibility is indeed a recognised type of ultra vires. In one case it was unsuccessfully argued that the only minister competent to confirm a compulsory purchase order for land for an airport had disqualified himself by showing bias and that the local authority could only apply for a local Act of The Milk Commissioner has been appointed as Registrar in exercise of the powers conferred on the State Government by the Act. The approval from the Registrar is in terms of the resolution of the Administrative Committee constituted in terms of Dairy Service Rules. The exercise of the powers under the Act are conferred by designation. The prior approval of the punishment is by the Registrar. If incidentally the person holding the post of Registrar is also Chairman of the Administrative Committee it cannot be said to be illegal as he is exercising the powers of Registrar as well as of the Chairman of the Administrative Committee in terms of the Act or the Rules. The Chairman is the Disciplinary Authority in terms of proviso to Rule 15 of the Dairy Service Rules. Though the Administrative Committee has resolved that the approval of the Dairy Milk Commissioner Registrar would be mandatory but such Resolution has to be read in the context of proviso to Rule 15 which confers jurisdiction on the Chairman of the Administrative Committee to be a Disciplinary Authority. Since the Chairman of the Administrative Committee happens to be the Registrar the decision to impose punishment may not require prior approval. However if the prior approval has been sought from the office of Registrar that will not vitiate the proceedings. Viewed thus the power exercised by the Chairman of the Committee in the instant case cannot be subject to Regulation 87 Therefore there is nothing wrong in the exercise of power by the Chairman of the Committee in the present case. Thus we do not find any error in the order of punishment passed by the Administrative Committee. We find that the orders passed by the High Court are not based upon correct appreciation of law and facts. Consequently the orders are set aside and the writ peti tion is dismissed. The appeal is allowed NEW DELHI MARCH 23 2021 UDAY UMESH LALIT S. RAVINDRA BHAT

Summary: There was nothing wrong with the exercise of power by the Chairman of the Committee and The power exercised by the Chairman of the Committee cannot be subject to Regulation 87. This remarkable judgment was upheld in the case of CHAIRMAN ADMINISTRATIVE COMMITTEE U.P. MILK UNION &amp; DAIRY FEDERATION CENTRALIZED SERVICES vs. JAGPAL SINGH [CIVIL APPEAL NO. 49 OF 2021] which was headed by Hon’ble Justice HEMANT GUPTA, J. This appeal was made to challenge the order passed by the Division Bench of the High Court of Judicature at Allahabad, Lucknow Bench dated 26.8.2019, affirming the order passed by the learned Single Bench on 17.5.2019. In the intra-court appeal, the Division Bench of the High Court referred to the inquiry reports dated 9.5.2014 and 15.10.2014 to hold that the employee had not been given any disagreement note, rather he was exonerated in those reports. However, it is to be noted that the Division Bench overlooked the fact that they were preliminary inquiries. Further, in terms of Section 122 of the Act and Rule 389-A of the 1968 Rules, a notification was issued on 4.3.1972 constituting Uttar Pradesh Co-operative Institutional Service Board for the purposes of recruitment, training, and disciplinary control of the employees of apex level, central or primary societies. The court held that “Regulation 84 of the Service Regulations provides for penalties such as reduction in rank or grades held substantively by the employee (clause e), removal from service (Clause f), or dismissal from service (Clause g). As per Regulation 87 of the Service Regulations, the aforesaid punishment could not be passed except with the prior concurrence of the Board.” The court further stated that “It may be stated that all the powers of Registrar in respect of all Co-operative Milk Societies were conferred on the Milk Commissioner Uttar Pradesh by the State Government vide notification dated 19th May 1976 in the exercise of powers conferred under sub-section 2 of Section 3 of the Act.”