Jammu Central Co-operative Bank Ltd. vs State of Jammu & Kashmir and Others

Mohammad Yaqoob Mir, Judge

The respondent No. 4 was Incharge Jammu Central Co-operative Bank Branch Banihal in the year 1983, allegedly has committed

embezzlement and misappropriation of public money and thereafter has set the said branch of the bank on fire. Case has been registered by Police

Station Banihal but keeping in view the dimensions of the crime committed, the case has been transferred to Crime Branch for investigation and the

investigation has culminated in filing of charge sheet (challan) against the accused along with others. On trial of the case respondent No. 4 is stated

to have earned acquittal.

Petitioner bank initiated departmental enquiry, charge sheet No. Law/24397/8 dated 14.1.1985 was served upon respondent No. 4 to show

cause as to why his services be not terminated for gross misconduct and was also directed to deposit the amount of Rs. 3,28,105.44/- , which as

per report of Inspector Branches-cum-Development Officer, Udhampur was misappropriated by the respondent No. 4.

Respondent No. 4 in reply to the charge sheet on 23.3.1985 is stated to have denied all the allegations, as a result thereof petitioner bank vide

its order No. 20535-38 dated 10.2.1986 constituted a Disciplinary Committee under the Chairmanship of Shri Dileep Singh, Additional Secretary

Finance, J&K Jammu (Director of the Bank). The said Committee recommended termination of services of the respondent No. 4 and recovery of

the embezzled amount along with interest.

The Management of the petitioner bank after examining the recommendations and the attending circumstances concluded that the respondent

No. 4 has committed misappropriation of aforesaid amount from Banihal Branch while working as Officiating Assistant Branch Manager. Finally

while noticing all the features, petitioner bank has issued order dated 30.4.1986 whereunder respondent No. 4 has been dismissed from service

and the dues payable to him were ordered to be utilized towards the part payment of the embezzled amount and steps were also ordered to be

taken for recovery of the remaining amount with interest.

The said order dated 30.4.1986 was challenged by respondent No. 4 by way of appeal before the Registrar Co-operative Societies, J&K

(hereinafter referred to as the Appellate Authority). The Appellate Authority vide detailed ordered dated 21.02.2000, after noticing all the

circumstances and features of the case and also noticing the acquittal earned by the respondent No. 4 in the criminal case concluded that the

respondent No. 4 deserved lenient view and then ordered that the respondent No. 4 be reinstated leaving it open to the petitioner bank to recover

the amount due to it from the salary of respondent No. 4 along with interest by way of reasonable installments.

Dissatisfied with the order dated 21.02.2000 passed by Appellate Authority, the petitioner bank filed a revision petition before the J&K Special

Tribunal (hereinafter referred as the Revisional Authority). The Revisional Authority vide its judgment dated 31.1.2002 has concluded that the

order passed by the Registrar is speaking order who had jurisdiction to entertain and pass appropriate order in the case, no impropriety is noticed

in the order, therefore, no modification or reversal. Accordingly revision petition has been dismissed.

Petitioner bank aggrieved by both the orders of Appellate Authority and the Revisional Authority has invoked the writ jurisdiction of this Court

by filing the instant petition.

The first contention as raised on behalf of petitioner bank is that the Appellate Authority should not have entertained the appeal because appeal

against the order of termination was not prescribed as it is only such disputes which are enumerated in sub-section (2) of Section 63 of the Co-

operative Societies Act, 1960 (hereinafter referred to as ""the Act of 1960""), which are to be dealt with by the Registrar (Appellate Authority). The

said sub-section (2) does not cover the service disputes between the Society and its employees. The same position is also reiterated in the

Cooperative Societies Act, 1989 (hereinafter referred to as ""the Act of 1989) which has repealed the old Act of 1960 Section 70(2) of the Act of

1989 also does not cover the disputes relatable to the services of the employees of the Society. Learned counsel would contend that the position

of law being clear, therefore, the orders passed by the Appellate Authority and affirmed by the Revisional Authority are without jurisdiction so are

liable to be quashed.

Learned counsel for the respondent No. 4 in opposition would contend that the Government has framed the rules which have been notified on

8th of July, 1988 vide SRO 233, where-under appeal against the order imposing a penalty has been provided for as is clear from Rule 21 of the

said Rules.

Learned counsel for the respondent No. 4 would further contend that since respondent No. 4 has earned acquittal in the criminal case and

additionally petitioner bank has been left free to recover the misappropriated amount, the petitioner bank shall have no grievance.

The important question which emerge for consideration is as to whether Appellate Authority (Registrar Co-operatives) had jurisdiction to

entertain the appeal when Appellate Authority in terms of Section 63(2) of the Act of 1960 and then in terms of Section 70(2) of the Act of 1989

read with Section 158 of the Act of 1989 was competent to hear the disputes relating to constitution, management or the business of the Co-

operative Societies to the extent those are specified in subsection (2) of Section 70 of the Act of 1989.

The rules have been framed in exercise of powers u/s 124 of the Act of 1960, which have come into force in the year 1988 but the appeal has

been preferred in the year 1986 which remained pending and was ultimately decided in the year 2002 and in the meantime when the Act of 1989

came into force the Act of 1960 was repealed. With the repealing of the Act of 1960 what would be the position of rules as notified vide SRO

233 in the year 1988 in exercise of powers conferred u/s 124 of the Act of 1960. The answer lies in the repealing provision i.e. Section 177 of the

Act of 1989 which for facility of reference is quoted hereunder:-

Repeal and savings.--(1) The Jammu and Kashmir Co-operative Society Act, 1960 (Act No. XXVIII of 1960) is hereby repealed.

(2) Notwithstanding such repeal anything done, any action taken, order or notification issued, rule or bye-laws made under the provisions of the

aforesaid Act, shall, in so far the same are not inconsistent with the provisions of this Act, deemed to have been done, taken, issued, made under

the corresponding provisions of this Act.

Plain reading of sub-section (2) is clear to the effect that amongst others notification issued or rules made under the provisions of the Act of 1960

subject to inconsistency to the provisions of the Act of 1989 shall be deemed to have been issued under the corresponding provisions of this Act

which in turn would mean that the rules notified vide SRO 233 in exercise of powers conferred by Section 124 of the Act of 1960 will remain in

force by holding that the same have been deemed to have been issued under the Act of 1989. So in short the said rules despite repealment of the

Act of 1960 are in force for being followed.

Again a question emerge that the appeal has been presented before the Appellate Authority prior to 8th of July, 1988 i.e. prior to the framing

of rules as notified vide SRO 233, whether those could be prospective in effect. The answer is provided in Rule 1 itself which reads as under:-

Short title and commencement:-

(i) These rules may be called the Jammu and Kashmir Co-operative Societies Service Rules, 1988.

(ii) They shall be applicable to all societies which are at present functioning or which will be created.

The wording used i.e. it shall be applicable to all societies which are at present functioning or which will be created, would mean that these rules

will apply to all pending matters. Since the appeal was also pending so same would be governed by the said rules. The term ""other societies"" in

Note (1) to sub-rule (4) of Rule 24 has been explained to include cooperative bank as well. Therefore, the question can be safely answered in

affirmative as the rules would govern the pending matters as well.

Learned counsel for the petitioner bank relied on the judgment of this Court rendered in Ab. Majid Dar Vs. Kashmir Mercantile Co-operative

Bank Ltd. and Others, . In the said judgment it has been noticed that the rules, namely, Jammu and Kashmir Cooperative Societies Service Rules,

1988 were framed under SRO 233 in exercise of rule making power conferred upon the Government u/s 124 of the J&K Co-operative Societies

Act, 1960 but the said Act has been repealed by the Act of 1989 but it is also recorded that assuming SRO 233 has its application but still appeal

under the said Rules is provided for against an order imposing penalty. The penalties are provided for under Rule 19 of the said Rules. The

suspension of an employee is not one of the penalties under Rule 19 and suspension is directly dealt with under Rule 20, therefore appeal is

impermissible against an order of suspension under SRO 233.

In the reported judgment order of suspension was under challenge. The point urged was that the appeal against service matters is not

permissible under the Act of 1960 but then rules framed under the said Act notified vide SRO 233 were taken note of but again appeal was held

not to be maintainable because suspension was not a penalty, so no appeal against suspension would lie. This judgment is not of any help to the

learned counsel for the petitioner.

Coming to the basic order of termination dated 30.4.1986, whether same stands the test of legality has to be answered in light of the above

referred rules. Rule 19 provides for penalties which include dismissal from service of the society. Rule 19(2) provides that no penalty shall be

imposed on any member of the service unless proper enquiry has been held giving reasonable opportunity to the employee of being heard and

thereafter he has been charge sheeted and his reply thereto is considered. Proviso to Rule 19(2) is to the effect that in case authority proposes to

impose penalty of dismissal, then a show cause notice indicating the penalty proposed to be imposed shall be served to the employee.

Perusal of the order dated 30.4.1986 would indicate that before imposing the major penalty of dismissal, the requisite notice to show cause as

to why penalty be not imposed has not been served upon the respondent No. 4 as was a requirement. Such default infringed the right of the

respondent No. 4. This aspect of the matter has not been looked into by the Appellant Authority and in case same circumstance would have been

taken note of, the order of termination would have been set aside on that basis but the Appellate Authority otherwise while setting aside the order

of termination has given power to the bank to recover the amount if any due to it from the salary of respondent No. 4 along with interest and the

Revisional Authority has affirmed the same.

It may not be out of place to mention that the respondents No. 1 and 3 in their reply have stated that SRO 233 of 1988 has been held to be

applicable to the Co-operative banks operating within the State of Jammu and Kashmir, therefore, right of appeal has been kept in-tact, the appeal

before the respondent No. 3 was competent. It is also stated that the orders impugned i.e. order passed by the Appellate Authority and order

passed by Revisional Authority do not suffer from any illegality or impropriety. It is also stated that the authorities have found that the punishment

awarded to the respondent No. 4 was excessive so was modified. In short respondents No. 1 and 3 in their objections have clearly supported the

judgments/orders as passed by the Appellate Authority and the Revisional Authority.

In the aforesaid background what emerges is that the basic order of termination dated 30.4.1986 was bad in law so was otherwise required to

be set aside by the Appellate Authority. Despite that interests of the petitioner bank have been safeguarded by reserving their right to recover the

embezzled amount from the salary of respondent No. 4 along with interest in installments.

For the aforestated reasons, the writ petition deserves dismissal, so shall stand dismissed. In the peculiar facts of the case no order as to costs.