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Judgment
Veerender Singh Siradhana, J.—The petitioners have instituted this joint writ application assailing the legality, validity and correctness of the order dated 26th March, 2010, terminating their deputation in Primary Land Development Banks, and calling upon them to join duty in Rajasthan Urban Cooperative Bank Limited on 1st April, 2010. Simultaneously, order dated 31st March, 2010, has also been assailed whereby the petitioners have been accorded compulsory retirement from services in the Bank interest; and therefore, have approached this Court praying for the following relief(s):--
"(i) By issuing writ of mandamus, the order dated 31.3.2010 (Annex. 1) may kindly be quashed and set aside;
(ii) By issuing writ of mandamus the order dated 26.3.2010 (Annex. 2) terminating deputation of the petitioners from primary banks may kindly be quashed and set aside;
(iii) The respondent-bank may kindly be directed to reinstate the petitioners in service or in alternate a direction may kindly be issued for transferring services of the petitioners to the primary banks in the State of Rajasthan.
(iv) The Hon''ble Court may kindly pass such other order or direction, which it may deem just, proper and expedient in the facts and circumstances of the present case.
(v) Costs throughout be also ordered to be awarded to the petitioners."
Briefly, the skeletal material facts necessary for appreciation of the controversy raised herein are that the petitioners while working as employees of the Rajasthan Urban Cooperative Bank Limited (hereinafter referred to as ''respondent-Bank'', for short), were sent on deputation for the respondent-Bank incurred losses and the Reserve Bank of India vide order dated 30th August, 2005, called upon it to close down the business of the Bank. However, its functions were revived in the year 2009. The details of the petitioners with reference to their date of appointment and designation, are as under:--
By communication dated 17th September, 2008, the petitioners were called upon to exercise their option to go on deputation to serve for Primary Banks. On 30th September, 2008, the Managing Director of the respondent-Bank, under the instructions of the Registrar of the Cooperative Societies, Government of Rajasthan, issued an order sending the petitioners on deputation to different Primary Banks. In view of the compliance of the regulatory instructions issued by the Reserve Bank of India, the respondent-Bank was allowed to resume its banking business on 19th December, 2009. As a consequence of change in the Management of the respondent-Bank, the Board of Directors formulated a Scheme for voluntary retirement i.e. ''Golden Handshake Scheme'', and called upon the petitioners to opt for voluntary retirement under the said Scheme. However, the petitioners did not find the Scheme suitable to their interest, and therefore, they did not opt for the same. It is pleaded case of the petitioner that despite availability of the vacancies on different posts and the need of employees, who would be required by 2014, along with the actual occupancy of the posts was informed by the respondent-Bank to the State Government on 21st October, 2009. Be that as it may, the Board of Directors of the respondent-Bank while deciding to terminate the deputation of the petitioners on 26th March, 2010 and calling upon them to report for duty on termination of their repatriation; to their dismay, served them with the orders of compulsory retirement made on 31st March, 2010. The petitioners preferred an appeal before the Registrar, Cooperative Societies, Rajasthan, but the same has been dismissed vide order dated 26th April, 2010, for want of jurisdiction.
Learned counsel appearing on behalf of the petitioners, reiterating the pleaded facts and grounds of the writ application, asserted that the action of the respondent-Bank in terminating the services of the petitioners in exercise of the powers under Rule 15 of the Urban Cooperative Banks, Employees Service Rules, 2006 (hereinafter referred to as ''Rules of 2006'', for short), is absolutely illegal, arbitrary and colourable exercise of power. According to the learned counsel, the case of the petitioners did not fall within the ambit of Rule 15 of the Rules of 2005, which contemplates compulsory retirement only in the event the Board of Directors is satisfied that the concerned employee be retired compulsorily for his indolence or doubtful integrity or incompetence to discharge official duties or inefficiency in due performance of official duties, and has lost his utility.
The appeal(s) instituted by the petitioners before the Registrar, Cooperative Societies, Rajasthan (separate appeal by each of the petitioner), were rejected vide order dated 26th April, 2010, since such an appeal was not maintainable under Rule 17 of the Rules of 2006, which provides for an appeal with reference to disciplinary action for misconduct.
The order of compulsory retirement has also been questioned for the respondent-Bank has subsequently resorted to outsourcing of work in the Managerial Cadre as well as in the Cadre of Assistant Manager Group-D. Moreover, the business activity of the respondent-Bank was temporarily closed under the instructions of the Reserve Bank of India, which has been restored in view of the order dated 14th December, 2009. The petitioners were sent on deputation for the respondent-Bank was not operating its business in view of the orders of the Reserve Bank of India. Further, junior persons were retained while the petitioners were accorded compulsory retirement stating them to be surplus employees, and thus, the action suffers with the vice of invidious discrimination against the petitioners vis-�-via persons junior to them. The petitioners were ready and willing to work in the Primary Banks where vacancies are available. To reinforce his submissions, the learned counsel has placed reliance on the opinion of the Hon''ble Supreme as well as of this Court in the case of S.P. Sharma Vs. Cooperative Land Development Bank Ltd. and Another, (2008) 119 FLR 507 : (2008) 4 RLW 3641 ; LRs. of Late Shri Pukhraj Gehlot Vs. The Rajasthan Civil Services Appellate Tribunal and Others, (2007) 2 RLW 1204 ; State of Rajasthan and Ors. v. RCSA Tribunal and Indra Kumar Singh: 2005 (5) WLC 547; K.G. Saxena v. Rajasthan State Agriculture Marketing Board and Ors. 2006 WLC (Raj.) UC 554 , Baikuntha Nath Das and another Vs. Chief District Medical Officer, Baripada and another, AIR 1992 SC 1029 : (1992) 73 CLT 665 : (1992) 2 JT 1 : (1992) 1 LLJ 784 : (1992) 1 SCALE 428 : (1992) 2 SCC 299 : (1992) 1 SCR 836 : (1992) 1 SLJ 177 ; Kendriya Sarvodaya Sahkari Sangh Ltd., Jaipur Vs. Shri Jawan Singh and Another, AIR 1968 Raj 33 : (1967) 1 LLJ 270 ; Bhilwara Sahkari Upbhokta Wholesale Bhandar Ltd. and Another Vs. Prescribed Authority and Another, (1982) WLN 478 ; Gujarat State Co-operative Land Development Bank Ltd. Vs. P.R. Mankad and Others, AIR 1979 SC 1203 : (1979) 38 FLR 353 : (1979) 3 SCC 123 : (1979) 2 SCR 1023 , and M.P. State Co-op. Dairy Fedn. Ltd. and Another Vs. Rajnesh Kumar Jamindar and Others, (2009) 121 FLR 917 : (2009) 6 JT 263 : (2009) 6 SCALE 17 : (2009) 15 SCC 221 : (2010) 1 SCC(L&S) 512 : (2009) 6 SCR 182 : (2009) 5 UJ 2161 .
Per contra; Mr. Man Singh Gupta, learned counsel for the respondent-Bank reiterating the contents of the reply in response to the notice of the writ application, supported the order dated 31st March, 2010 (Annexure-1 to 10), whereby the petitioners were compulsorily retired, in exercise of powers under Rule 15 of the Rules of 2006, but for two employees, namely, Shri Ram Lal and Shri Subhash Chandra Saxena, who were retired from service of the respondent-Bank under Rule 14 of the Rules of 2006. It is further contended that the Registrar, Cooperative Societies, Rajasthan, Jaipur, considering the grievances raised by the petitioners, rightly dismissed their appeals vide order dated 26th April, 2010.
The respondent-Bank in its counter affidavit has also raised a preliminary objection as to the very maintainability of the writ proceedings for the respondent-Bank is not ''State'' within the meaning of Article 12 of the Constitution of India being a Private Bank.
Moreover, the banking operations of the respondent-Bank were suspended on account of huge losses suffered as well as under the instructions of the Reserve Bank of India. The banking activities were resumed in view of the order dated 12th October, 2009, by Reserve Bank of India.
The petitioners were accorded retirement/compulsory retirement under Rule 14 and 15 of the Rules of 2006, and were also paid the amount of gratuity and leave encashment benefits. Further, the retirement/compulsory retirement of the petitioners was effected keeping in view the interest of the Bank and the performance of the petitioners, assessed on the basis of their service record. The Board of Directors after a due deliberation decided on 22nd March, 2010, to retire/compulsorily retire all the petitioners under Rule 14 and 15 of the Rules of 2006, for the petitioners lost their utility. Referring to the proceedings dated 8th March, 2010, it is further submitted that the service record of the each of petitioners was examined critically in consultation with the Legal Advisers as well as Banking Experts before arriving at the decision to retire/compulsorily retire the petitioners.
According to the counsel for the respondent-Bank, the decision has been taken keeping in view the financial health of the Bank. The petitioners were not working in the capacity of Managing Director, General Manager and Managerial Staff. To buttress his submissions, learned counsel for the respondents, has placed reliance on the opinions of the Hon''ble Supreme Court in the case of S.S. Rana Vs. Registrar, Co-operative Societies and Another, (2006) 5 JT 186 : (2006) 4 SCALE 638 : (2006) 11 SCC 634 : (2006) 2 SCR 311 Supp : (2006) 3 SLJ 334 ; General Manager, Kisan Sahkari Chini Mills Ltd., Sultanpur, U.P. Vs. Satrughan Nishad and Others, AIR 2003 SC 4531 : (2003) 8 JT 235 : (2003) 3 LLJ 1108 : (2003) 8 SCALE 343 : (2003) 8 SCC 639 : (2003) 4 SCR 349 Supp : (2004) 1 SLJ 145 : (2004) 1 UJ 227 : (2003) AIRSCW 5291 : (2003) 7 Supreme 250 ; Co-operative Central Bank Ltd. and Others Vs. Additional Industrial Tribunal and Others, AIR 1970 SC 245 : (1970) 40 CompCas 206 : (1969) 19 FLR 56 : (1970) LabIC 285 : (1969) 2 LLJ 698 : (1969) 2 SCC 43 : (1970) 1 SCR 205 ; Deccan Merchants Co-operative Bank Ltd. Vs. Dalichand Jugraj Jain and Others, AIR 1969 SC 1320 : (1969) 1 SCR 887 , and Mundrika Dubey and Others Vs. State of Bihar and Others, AIR 2008 SC 1533 : (2008) CLT 816 : (2008) 118 FLR 826 : (2008) 3 JT 156 : (2008) 2 LLJ 460 : (2008) 2 SCALE 684 : (2008) 4 SCC 458 : (2008) 1 SCC(L&S) 1050 : (2008) 2 SLJ 458 .
I have heard the learned counsel for the parties, and with their assistance, perused the materials available on record.
Indisputably, the respondent-Bank is a Registered Cooperative Society under the provisions of the Rajasthan Cooperative Societies Act, 2001 (for short ''the Act of 2001''). The respondent-Bank, since its inception in the year 1961, was functional until 30th August, 2005, when the Reserve Bank of India imposed a ban on the business activities of the Bank, which remained suspended for a period of about 4 years. The petitioners (employees of the respondent-Bank), vide order dated 29th September, 2008, issued by the Registrar, under the directives of the State Government, were sent on deputation vide order dated 30th September, 2008, to the Primary Cooperative Land Development Banks for a period of one year subject to reduction, extension and/or cancellation, at any time. The period of deputation was extended by the State Government vide order dated 21st October, 2009, upto 31st December, 2009. The State Government vide another order dated 31st December, 2009, extended the period of deputation upto 31st December, 2009, of further order by the Department, whichever is earlier. The Registrar, Cooperative Societies, Government of Rajasthan, vide order dated 26th March, 2010, directed that the petitioners whose deputation was to end on 31st March, 2010, be relieved with a direction to report/join the respondent-Bank on or before 1st April, 2010.
The service conditions of the petitioners are governed by the Rules of 2006. It is further contemplated that the Rules shall be come into force from the date of issuance of the order by the Registrar. No change in the Rules is permissible without prior approval of the Registrar, Cooperative Societies, Rajasthan. Under the DEFINITION clause of the Rules of 2006, the term ''Act'' means the Rajasthan Cooperative Societies Act, 2001. ''Rules'' means the Rajasthan Cooperative Societies Rules, 2003. ''Registrar'' means a person appointed to perform the functions of the Registrar of Cooperative Societies for the State under the Act of 2001. The general conditions relating to appointment of the employees are contained under CHAPTER-II of the Rules of 2006. CHAPTER-III of the Rules of 2006, deals with the METHODS AND PRINCIPLES OF RECRUITMENT. CHAPTER-IV of the Rules of 2006, deals with the maintenance of SERVICE RECORD in a prescribed service book. Annual Performance Appraisal Reports (APARs) for the financial year in respect of each employee shall to be drawn annually by the competent authority as prescribed in Annexure-C. Rule 11 provides for TERMINATION OF EMPLOYMENT. Rule 12 contemplates conditions for RESIGNATION while Rule 13 details out DISQUALIFICATION FOR EMPLOYEES. Rule 14 contemplates provision and requirement of SUPERANNUATION AND RETIREMENT whereas Rule 15 provides for COMPULSORILY RETIREMENT. CHAPTER-V contemplates disciplinary action for misconduct. Rule 33 of the Rules of 2006 makes a provision for INTERPRETATION wherever any doubt arises as to the interpretation of the Rules or where the Rules of 2006 are silent on any matter, the provisions of the Rajasthan Service Rules, Rajasthan Civil Service (Pension) Rules, 1996, and Rajasthan Civil Services (Classification, Control and Appeal) Rules, 1958, shall apply mutatis mutandis.
The respondent-Bank is governed by the mandate of the Bank Regulations Act, 1949, as amended by the Banking Laws (Application to Cooperative Societies) Act, 1965. The banking activity is also subject to the provisions of the Reserve Bank of India Act, 1934. The Rules of 2006, which contemplates provisions for compulsorily retirement, including other service conditions of the employees of the respondent-Bank, have been made applicable by virtue of the order of the Registrar, Cooperative Societies. No change in the Rules of 2006, is permissible without prior approval of the Registrar, Cooperative Societies.
From the counter-affidavit filed on behalf of the respondent-Bank while raising a preliminary objection as to the maintainability of the writ application for respondent-Bank is not ''State'' within the meaning of Article 12 of the Constitution of India; the required details about the share capital holding by the State Government, the extent of expenditure of the Cooperative Society met by the State Government, the independent status enjoyed, have not been specifically spelled out with the required details whereas deep and pervasive control over the Society of the State Government is apparent. The Reserve Bank of India suspended the business activities of the respondent-Bank vide order dated 30th August, 2005. According to the respondent-Bank, a capital to the tune of Rs. 1.5 crores was infused and it was subsequent to this compliance, the Reserve Bank of India, permitted the business operations of the respondent-Bank, vide order dated 12th October, 2009. No details of the shareholders, who infused the capital of Rs. 1.5 crores, have been furnished.
In the case of Pradeep Kumar Biswas and Others Vs. Indian Institute of Chemical Biology and Others, (2002) 4 JT 146 : (2002) 3 SCALE 638 : (2002) 5 SCC 111 : (2002) 3 SCR 100 , the 7 Judge Bench of the Hon''ble Supreme Court, for the purpose of determination of an agency or instrumentality, within the meaning of ''State'' as contemplated under Article 12 of the Constitution of India, laid down the following tests - (i) formation of the CSIR; (ii) objects and functions; (iii) management and control, and (iv) financial aid etc. Referring to the opinion in the case of Sukhdev Singh, Oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation Employees Associations Vs. Bhagat Ram, Association of Clause II. Officers, Shyam Lal, Industrial Finance Corporation, AIR 1975 SC 1331 : (1975) 30 FLR 283 : (1975) LabIC 881 : (1975) 1 LLJ 399 : (1975) 1 SCC 421 : (1975) 3 SCR 619 ; their Lordships for the purpose of identifying such an agency or instrumentality propounded four indica, which reads thus:--
"(1) "A finding of the state financial support plus an unusual degree of control over the management and policies might lead one to characterize an operation as state action."
(2)..... "Another factor which might be considered is whether the operation is an important public function."
(3) "The combination of state aid and the furnishing of an important public service may result in a conclusion that the operation should be classified as a state agency. If a given function is of such pubic importance and so closely related to a governmental functions as to be classified as a government agency, then even the presence or absence of state financial aid might be irrelevant in making a finding of state action. If the function does not fall within such a description then mere addition of state money would not influence the conclusion."
(4) "The ultimate question which is relevant for our purpose is whether such a corporation is an agency or instrumentality of the government for carrying on a business for the benefit of the public. In other words, the question is, for whose benefit was the corporation carrying on the business?"
In a recent pronouncement in the case of M.P. State Cooperative Dairy Federation Limited and Anr. versus Rajnish Kumar Jamidar and Ors. (supra), the Hon''ble Apex Court of the land on a survey of the earlier opinions observed that there cannot be same standard or yardstick for judging different bodies for the purpose of ascertaining as to whether any of them fulfills the requirement of law therefor or not. Further, the concept of public sector undertaking incorporated under the Companies Act or Societies Registration Act or any other Act for answer the description of ''State'' must be financed by the Central Government and be under its deep and pervasive control has also undergone a sea change. At present, the thrust is not upon the composition of the body, but duties and functions performed by it and the primary question is whether the body exercises public function. Moreover, despite holding that BCCI is not a ''State'' within the meaning of Article 12 of the Constitution, the writ application under Article 226 of the Constitution has been held to be maintainable.
Having considered the factual matrix of the case at hand, and the materials available on record, I am of the opinion that the respondent-Bank herein would fall within the purview of definition of ''State'' as contemplated under Article 12 of the Constitution.
It is submitted on behalf of the respondent-Bank that the dispute regarding to the validity of suspension and termination of employees of a Cooperative Society is a dispute touching the "management of the Society" and falls within the ambit of Section 75 of the Cooperative Societies Act, 1965, which is akin to Section 58 of the Rajasthan Cooperative Societies Act, 2001. The argument may not detain this Court for long in view of the authoritative pronouncement by the Hon''ble Apex Court of the land in a catena of judgments. In the case of Co-operative Central Bank Ltd. and Others Vs. Additional Industrial Tribunal and Others, AIR 1970 SC 245 : (1970) 40 CompCas 206 : (1969) 19 FLR 56 : (1970) LabIC 285 : (1969) 2 LLJ 698 : (1969) 2 SCC 43 : (1970) 1 SCR 205 ; referring to its earlier opinion in the case of Deccan Merchants Co-operative Bank Ltd. Vs. Dalichand Jugraj Jain and Others, AIR 1969 SC 1320 : (1969) 1 SCR 887 ; in the backdrop of Section 61of the Andhra Pradesh Co-operative Societies Act, 1964, Hon''ble Supreme Court held that the dispute between the Co-operative Central Bank and its employees relating to the alteration of the conditions of service would not be said to be a dispute "touching the business of the cooperative society". In the case of Gujarat State Co-operative Land Development Bank Ltd. Vs. P.R. Mankad and Others, AIR 1979 SC 1203 : (1979) 38 FLR 353 : (1979) 3 SCC 123 : (1979) 2 SCR 1023 , dealing with the provisions of Section 69 of the Gujarat Co-operative Societies Act, 1962, observed that any dispute touching the constitution, management or business of a society must be referred to the Registrar of Co-operative Societies. The question whether the dispute between the Co-operative Bank and one of its employee relating to termination of his services would be regarded as a dispute touching to the business of the society; the Hon''ble Supreme Court referred to the earlier decision in Deccam Merchants Co-operative Bank (supra), and Co-operative Central Bank Ltd. case (supra); and held that the said dispute could not be regarded as a dispute touching the business of the co-operative society. Thus, from the law declared by the Hon''ble Apex Court of the land in the case of P.R. Mankad and Anr. (supra), it is evident that meaning of the term ''management'' is: ''the Board of Directors'' or ''the apex body'' or ''Executive Committee'' at the helm which guides, regulates, supervises, directs and controls the affairs of the Society. From the observations made by the Hon''ble Apex Court of the land in the case of P.R. Mankad and Anr. (supra), it is also evident that the scheme and object of the legislation dealing with the Co-operative societies, the word ''management'' cannot be given a wide connotation and that a dispute raised against a Co-operative Society where a discharged servant, claims reinstatement in service, is from its very nature outside the scope of the expression ''touching the management of the Society''. The observations of the Hon''ble Apex Court of the land in the aforesaid case applies in all respects to the case at hand.
Rule 14 and 15 of the Rules of 2006, which have been invoked in the instant case at hand while terminating the employment of the petitioners, reads thus:--
"14. SUPERANNUATION AND RETIREMENT:
The age of superannuation shall be 58 years but the age of superannuation for class IV shall be 60 years subject to the proviso that service of an employee who attain the age of 55 years shall be terminable at a notice of 3 months on either side. Where it appears, desirable in the interest of the Bank, the Board shall have the discretion to re-employ a person who retires under this Rule for such period but not beyond the age of 60 years and on such terms and conditions as the Board may determine in each case.
COMPULSORY RETIREMENT:
(i) At any time, after a Bank employee has completed 15 years qualifying service or has attained the age of 50 years, whichever is earlier, the Board of Directors, upon having been satisfied that the concerned employee has on account of his indolence or doubtful integrity or incompetence to discharge official duties or inefficiency in the performance of official duties, has lost his utility, may require the concerned employee to retire in Bank interest giving specific grounds to arrive at the decision. In case of such retirement, the employee shall be entitled to retiring benefits.
(ii) In such a case, the Bank shall give a notice in writing to the employees at least three months before the date on which he is required to retire in the bank interest or three months'' pay and allowances in lieu of such notice."
From the communication dated 21st October, 2009, addressed to the Joint Registrar (Banking), Cooperative Societies Rajasthan, Sahakar Bhawan, Jaipur, by the respondent-Bank, it is reflected that there was a proposal for professionally qualified ''Head of Operation'' and ''Managerial Staff'' for the Bank. The communication further specifically stipulated that the proposed new staffs were not intended to replace the 14 staff members (12 clerical and 2 sub staff) already on deputation as per the State Government orders, who were to be absorbed in suitable positions in the Bank, in the course of time, depending upon the Bank''s progress, satisfaction of the State Government, RBI and stakeholders. The communication further reflects urgency of the requirement since the respondent-Bank resumed full functioning on 14th October, 2010, consequent upon receipt of permission from Reserve Bank of India on 12th October, 2009.
A glance of Rule 14 of the Rules of 2006, would reveal that the age of superannuation shall be 58 years, but the age of superannuation for class IV shall be 60 years subject to the proviso that service of an employee who attained the age of 55 years shall be terminable at a notice of 3 months on either side. Rule 14 has been invoked in case of Shri Ram Lal and Shri Subhash Chand Saxena. Rule 15 has been involved in the matter of rest of the petitioners.
Under Rule 15 of the Rules of 2006, an employee of the Bank who has completed 15 years qualifying service or attained the age of 50 years, whichever is earlier, the Board of Directors, upon having been satisfied that the concerned employee has on account of indolence or doubtful integrity or incompetence to discharge official duties or inefficiency in due performance of official duties, has lost his utility, may require the concerned employee to retire in Bank interest giving specific grounds to arrive at the decision.
From the counter affidavit and the additional affidavit submitted on behalf of the respondent-Bank, an attempt was made to explain the grounds of compulsory retirement. In the additional affidavit, interest of the Bank has been construed to mean the financial condition of the Bank leading to compulsory retirement of the petitioners in addition to unsatisfactory record of service of the petitioners. But to the contrary, the respondent-Bank intended to employ fresh hands, as would be reflected from communication dated 21st October, 2009. Moreover, compulsory retirement under Rule 15 of the Rules of 2006, could be resorted for any of the reasons as contemplated under the Rule and that too, by the Board of Directors.
It was strenuously argued on behalf of the petitioners that the Board of Directors did not undertake the required exercise either while exercising the discretion as contemplated under Rule 14 of the Rules of 2006, in terminating the employment of Shri Ram Lal and Shri Subhash Chand Saxena or while compulsorily retiring rest of the petitioners under Rule 15 for their indolence or doubtful integrity or incompetence to discharge official duties or inefficiency in due performance of official duties or for having lost their utility by furnishing specific grounds, to arrive at that decision. It was in this backdrop of the facts, the learned counsel for the respondent-Bank was called upon to produce the relevant record from where it could be reflected that the Board of Directors did consider the service record of the petitioners while exercising discretion under Rule 14 in terminating the employment of the petitioners for the reasons thereof or while effecting compulsory retirement of the petitioners for reasons contemplated under Rule 15 of the Rules of 2006.
From the record produced, it is reflected that the matter was referred to the Legal Advisers of the respondent-Bank, who on the basis of the service record of the petitioners, furnished their legal opinion for action as contemplated under Rule 14 and/or 15 of the Rules of 2006. From the additional affidavit filed on behalf of the respondent-Bank, the details furnished as to the assessment of the service record of each of the petitioners are same as furnished by the Legal Advisers of the respondent-Bank in their legal opinion available on record on their letterheads.
The minutes of the Staff Sub Committee convened on 8th March, 2010 (annexed as Annexure-A), further reflects that the matter of the petitioners was considered by the Committee for their period of deputation, was likely to end on 31st March, 2010, and in order to minimize the establishment expenses, those employees, who are not having good record of service, their services may be dispensed with by way of COMPULSORY RETIREMENT or invoking the provisions of SUPERANNUATION AND RETIREMENT. From the minutes, it is also reflected that the record of the employees, who were sent on deputation, was to be considered before taking a decision in the matter by the Bank in association with the Legal Advisers as well as the Banking Expert (Contract). The Committee while furnishing its report was also advised to keep in view the earlier report. From the record furnished by the learned counsel for the respondent-Bank, there is no material or any report indicating that the entire record of service of the petitioners was considered by the competent authority in association with the Legal Advisers and the Banking Expert (Contract).
The proceedings of the meeting of the Board of Directors convened on 22nd March, 2010, which have been placed on record along with the additional affidavit as Annexure-B, reflect that the Registrar, Cooperative Societies, Jaipur, was requested to instruct the petitioners to report for duty in the respondent-Bank on 1st April, 2010, as their deputation period was to end on 31st March, 2010. Further, having considered the decision of the earlier meetings held on 24th February, 2010 and 10th March, 2010, decision was taken to terminate the employment of the petitioners invoking the power under Rule 14 and 15 of the Rules of 2006, by payment of 3 months pay and allowances in lieu of notice.
Thus, from the materials available on record, it is evident that the entire record of the service of the petitioners was not considered by the Board of Directors rather relevant record was made available to the Legal Advisers of the respondent-Bank, who on the scrutiny of the record, furnished their opinion(s), which was acted upon by the respondent-Bank.
The original record furnished by the learned counsel for the respondent-Bank consists of "attendance register" for the period with effect from 1st July, 2009, till date. "Register" containing the details of the proceedings of the Board of Directors with effect from 1st July, 2009 to 27th April, 2011, and an envelope separately containing legal opinions of the advisers of the Bank, namely, M. Fasail Baig and Subhash Chand Kumawat, which have been furnished on 9th March, 2010. No record of contemporaneous proceedings was made available to indicate that the process was in fact conducted and carried out, by the competent authority as contemplated under Rule 14 and 15 of the Rules of 2006, before the impugned action was taken. From the details of the proceedings of the Board of Directors, as reflected from the register, it is seen that the meeting convened on 22nd March, 2010, was attended by 7 members including the Chairman and the Managing Director. The attendance register though reflects attendance of all the 7 members, but the proceedings have not been signed by all the members. The proceedings of the Board of Directors bear signatures only of the Chairman and the Managing Director. The register of the proceedings of the Board of Directors contains the details of the proceedings typed on a computer and the typed sheets have been pasted on the pages of the register, which have been serially paginated. The proceedings of the meeting convened on 22nd March, 2010, are available from page 50 to 72 along with annexed Schedule followed by proceedings of the meeting. Proceedings drawn on 6th April, 2010, with reference to the election of the Deputy Chairman, who was elected unopposed, are available at Page 73. At page 74, the proceedings of the meeting convened on 22nd May, 2010 in the 11th meeting, have been placed on record. The proceedings of the meeting of the Board of Directors of the respondent-Bank dated 31st March, 2010, have not been made available, rather an office note drawn on 31st March, 2010, has been furnished in a separate sheet reflecting about the ''Bank''s Board of Directors'' resolution already passed to verify the service records of all the staff members and consider the possibility of Superannuation and Retirement/Compulsory Retirement based on the individual service files and records of the staff, according to the Service Rules. The Office Note reads thus:--
"The Rajasthan Urban Co-operative Bank Ltd.
Head Office, Jaipur
Date : 31.03.2010
Office Note
The Bank''s Board of Directors passed Resolutions to verify the service records of all the staff members and consider the possibility of Superannuation and Retirement/Compulsory Retirement based on the individual service files and records of the staff, keeping in mind the Service Rules governing the employees, accordingly following steps were taken by Bank.
Set up a committee of 4 senior and experienced staff and experts to examine the individual records of all the employees and prepare a fact sheet based on their service record.
This report was prepared and placed before the Board of Directors/Staff Sub Committee of the Board for discussion and further steps, if any.
It was decided by the board that the services of a Labour Law Consultant and Advocate be engaged to examine various issues.
Labour Law Consultant and Advocate came to H.O. and examined the individual service records in view of Service Rules governing the employees.
Advocates report was also discussed before the Board of Directors along with the fact sheet of all employees individually.
The Board of Directors examined the files, records, fact sheet , advocate''s report of employees members individually in detail and after satisfaction decided the following action in the Board of Directors Meeting of 22.03.2010:
(a) Superannuation and Retirement of following 3 employees under Urban Cooperative Bank''s Employees Service Rules, 2006.
Sh. Ram Prakash Gupta
Sh. Subhash Chand Saxena
Sh. Ram Lal
(b) Compulsory Retirement of following 8 employees under Urban Co-operative Bank''s Employees Service Rules, 206.
Sh. Ram Avtar Sharma
Sh. Shiv Dayal Sharma
Sh. Shri Ram Jat
Sh. Ajay Kumar Katewa
Sh. Bhagirath Ram
Sh. Sanjay Dadhish
Sh. Rameshwar Lal
Sh. Jogenra Mandal
Following action please:
Please take this on individual service book and life of the concerned Employees.
We have already taken advice of our Legal Advisor.
Accordingly prepare the orders and also three month''s salaries Banker''s Cheque as per their service record in lieu of notice.
Pl. put up accordingly.
From the Office Note, as extracted above, reflects the steps taken to set up a meeting of 4 senior and experienced staff and Banking Expert (on contract), to examine the individual records of all the employees and prepare a fact sheet based on their service record. The report was prepared and placed before the Board of Directors/Staff Sub Committee of the Board for discussion and further steps, if any. Consultation with the Labour Court Consultant and Advocate were engaged to examine the issues. The Labour Law Consultant and Advocate examined the individual service record. The reports submitted by the Advocates have been stated to be discussed by the Board of Directors along with the fact sheet of all the employees individually. The decision to retire the employees appears to have been arrived at prior to 22nd March, 2010, as is reflected from the proceedings of the Board of Directors referring to the resolutions in the meeting held on 24th February, 2010 and 10th March, 2010. From the proceedings of the meeting convened on 24th February, 2010 and 10th March, 2010, it is revealed there is not even a whisper with reference to the consideration of the matter as contemplated under Rule 14 and 15 of the Rules of 2006, for termination of the employment of the petitioners on superannuation and retirement/compulsory retirement.
It is surprising that the proceedings as reflected from the Office Note dated 31st March, 2010, have been drawn separately. Since complete record was not made available, the counsel for the respondent-Bank was reminded to do the needful time and again, and it was on 6th May, 2015, record pertaining to report on analysis of service record by the Committee has been made available. The report of analysis of service record dated 20th March, 2010, is contained in two sheets separately. The report of the existing employees of the Bank, including those on deputation, has been enclosed as Annexure-I, with the details i.e., name, designation, date of birth, year of joining, number of years of service in 2009, retirement year, present salary, educational qualifications, etc., running into seven sheets (2 + 5).
The ''attendance register'' is serially paginated from Page 1 to 60, and so also the register of the proceedings of the ''Board of Directors'' is also serially paginated from Page 1 to 277. The office note dated 31st March, 2010, and the report on analysis of service record dated 20th March, 2010, along with Annexure thereto, have been prepared in separate sheets, and no reason to maintain this particular record separately, have been put forth by the respondent-Bank. So also the legal opinions have been furnished on separate sheets without there being any reference number and date, in response to which the legal opinions have been furnished. The fact sheet reflecting consideration of the service record of the petitioners by the Committee of 4 senior and experienced staff and Banking Expert (on contract), which examined the individual records of the employees on 20th March, 2010, furnished for perusal of the Court on 6th May, 2015, appears to be documents generated subsequently to fill up the lacuna. The report prepared and placed before the ''Board of Directors'' for discussion on the basis of ''Report on Analysis'' dated 20th March, 2010, has also not been furnished.
Thus, it is evident that the ''Office note'' reflecting the steps taken and the matter was considered by the Board of Directors as contemplated under Rule 14 and 15 of the Rules of 2006, has not been adopted while terminating the employment of the petitioners by way of superannuation and retirement/compulsory retirement as contemplated under the Rules. From the facts and materials available on record, there is no contemporaneous evidence of the fact that the ''Board of Directors'', considered the record of the petitioners in accordance with the mandate of Rule 14 and 15 of the Rules of 2006. The procedure of constitution of Committee including a Banking Expert (on contract) devised by the ''Board of Directors'', is contrary to the mandate of Rule 14 and 15 of the Rules of 2006.
Be that as it may, in the recent past, there is no adversity reported against the petitioners. By now, it is well settled that while considering the entire service record more importance has to be attached to the record and performance of the employees during the later years. While there is no reason to presume that the competent authority, who accords compulsory retirement to the employees will not act bonafidely or will not consider the entire service record disproportionately, but such authority should form the opinion on the totality of the entire service record.
In the case of Baikunth Nath Das (supra), the Hon''ble Apex Court of the land propounded the five principles and one of them is that principles of natural justice have no place in the context of an order of compulsory retirement. This does not mean that judicial scrutiny is excluded altogether. While the High Court or the Hon''ble Supreme Court would not examine the matter as an appellate court, they may interfere if they are satisfied that the order is passed (a) mala fide or (b) that it is based on no evidence or (c) that it is arbitrary - in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be a perverse order.
From the records and materials furnished by the respondent-Bank for perusal of the Court, there is a serious doubt about the fact that the matter, while resorting to the termination of the employment of the petitioners as per the mandate of Rule 14 and 15 of the Rules of 2006, was dealt with in accordance with the procedures contemplated therein. The record maintained separately in separate sheets as compared to the one produced, which is maintained in the ''attendance register'', and in the ''register of proceedings of the Board of Directors'', raises a serious doubt as to its contemporaneity. Furthermore, there is no evidence on record as to the attendance of the senior members of the Committee, which also included a Banking Expert on contract, who prepared the report on analysis of service record of the petitioners. There is no evidence that the report on analysis of service record was placed before the ''Board of Directors'', and the matter was dealt with as ordained by Rule 14 and 15 of the Rules of 2006.
In the case of Mundrika Dubey and Others Vs. State of Bihar and Others, AIR 2008 SC 1533 : (2008) CLT 816 : (2008) 118 FLR 826 : (2008) 3 JT 156 : (2008) 2 LLJ 460 : (2008) 2 SCALE 684 : (2008) 4 SCC 458 : (2008) 1 SCC(L&S) 1050 : (2008) 2 SLJ 458 , the Hon''ble Supreme Court opined in no uncertain terms, in the backdrop of the rules relevant therein, that compulsory retirement can be ordered in the ''Banks interest'', but such an order can be sustained legally only when the service record is considered, and the satisfaction is arrived at that retention of the employee is not justified subject to fulfillment of the requirement of the rules of compulsory retirement.
In the instant case at hand, there is no consideration at all by the ''Board of Directors'', of the service record of the petitioners, rather a new method was adopted by making the relevant record available to the Legal Advisers, who furnished their opinions. Moreover, even according to the report of the Sub Committee and the decision taken by the ''Board of Directors'', as reflected from the material placed on record along with the additional affidavit as well as record made available on 6th May, 2015; the ''Report on Analysis of Service Record'' dated 20th March, 2010, cannot be relied upon for its contemporaneity. The service record of the petitioners was to be scrutinized and assessed by the ''Board of Directors'' as contemplated under Article 14 and 15 of the Rules of 2006, but the procedure was never adopted for the reasons best known to the respondent-Bank.
The respondent-Bank no doubt has a right to COMPULSORILY RETIRE such employees, who have lost their utility to ensure efficiency in public service in accordance with Rule 15 of the Rules of 2006, and also to SUPERANNUATE AND RETIRE such employees invoking the power under Rule 15 of the Rules of 2006, in the event the conditions stipulated therein are fulfilled. The competent authority under the Rules is required to undertake the exercise as per Rules of 2006, and not to outsource the assessment, and consideration of the service record for the satisfaction of an authority not contemplated under the Rules of 2006. Since the competent authority, as contemplated under the Rules of 2006, has not exercised the power while superannuating and retiring the employees either in exercise of power under Rule 14 or while effecting compulsory retirement of the petitioners in exercise of power under Rule 15 of the Rules of 2006, I have no hesitation to hold that the impugned orders terminating the employment of the petitioners invoking power under Rule 14 and 15 of the Rules of 2006, is absolutely illegal, and bad in the eye of law.
For the reasons and discussions herein above, the writ application succeeds and is hereby allowed. The impugned order dated 31st March, 2010 (Annexure-1 to 10); is hereby quashed and set aside. The petitioners shall be entitled to all the consequential benefits on national basis.
It is made clear that the respondent-Bank will be at liberty to invoke the power under Rule 14 and 15 of the Rules of 2006, in accordance with the procedure prescribed therein, if so advised, without being in any manner influenced by this judgment.
In view of the final adjudication on the writ application, the stay application stands closed.
However, in the facts and circumstances of the case, there shall be no order as to costs.