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Judgment
I.S. Tiwana, J.—The two petitioner banks duly registered under the Punjab Cooperative Societies Act, 1961 (for short, the Act), terminated the services of private respondents who were working as Junior Accountants with them. On appeals preferred by these employees, the orders passed by the Board of Directors of these banks were set aside. These orders are now impugned by these banks in these two Civil Writ Petitions Nos. 4511 and 4573 of 1981. The impugned order in Civil Writ No. 4511 is Annexure P. 6 passed by the Joint Registrar on September 8, 1981 whereas in Civil Writ No. 4673, it is Annexure P. 9, dated September, 14, 1981, passed by the Registrar. Vide the last order, the Registrar while setting aside the order of dismissal of the respondent employee has appointed Junior Registrar, Cooperative Societies, Jullundur, as the Enquiry Officer to hold an enquiry afresh into the charges levelled against the said respondent. In view of the identity of the contentions raised and similarity of facts involved, the learned counsel for the parties agreed that these petitions can conveniently be disposed of through a common order and I propose to do that.
The primary contention of the learned counsel for the petitioners was that no appeals were maintainable against the orders of dismissal passed by the petitioners qua their employees under the provisions of the Punjab Cooperative Financing Institutions Service Rules, 1958 as these rules have already been held to be ultra vires. Support for this submission is sought from an earlier Division Bench judgment of this Court in Civil Writ No. 1223 of 1976 (The Chandigarh State Cooperative Bank Ltd. Chandigarh v. The Union Territory of Chandigarh through its Chief Commissioner and others C.W. No. 1223 of 1976) decided on September 10, 1976, which judgment in turn is based on an earlier Division Bench judgment of this Court in Hardial Singh v. State of Haryana 1974 S.L.W.R. 815. This submission of the learned counsel, however, appears to be totally irrelevant for the reason that the stand of the respondent authorities is that they had passed the impugned orders in exercise of their appellate jurisdiction, as available in bye-law No. 37 (iv). It is not in dispute that this bye-law has been duly framed and registered in accordance with the provisions of section 8 of the Act. Mr. Khoji, however, submitted that this bye-law itself is invalid for the same very reason for which the corresponding rule in the above noted Rules has been held to be ultra vires by the Division Bench of this Court in Civil Writ Petition No. 1223 of 1976 (supra), i.e., by providing appellate powers to himself against the actions and orders of the petitioner Societies pertaining to the conditions of service of their employees, the Registrar has assumed powers which had otherwise been denied to him under the Act. The learned counsel explained that under the Act the Registrar cannot arbitrate or refer for arbitration any matter pertaining to the conditions of services of an employee of a Cooperative Society Co-operative Central Bank Ltd. and Others Vs. Additional Industrial Tribunal and Others, and, therefore, this bye-law is against the mandate and the spirit of the Act. Mr. Khoji also sought to contend that in view of the provisions of clause (j) of Rule 8 of the Punjab Cooperative Societies Rules, 1963 (hereinafter referred to as the Rules) read with section 2(h) of the Act, the Society at the most could frame a byelaw relating to the appointment, suspension or removal of its officers only end not qua each and every employee. Thus according to Mr. Khoji, this bye-law is even beyond the scope of power vested in a Cooperative Society to frame bye-laws. These submissions of Mr. Khoji do not bear scrutiny and have essentially to be repelled. He does not dispute that the bye-laws have been framed or adopted by the Society of its own volition and have duly been registered These cannot be said to have been framed by the Registrar as was the case with regard to the Rules held ultra vires in Civil Writ No. 1223 of 1976 (supra). Therefore, in this case it cannot be attributed to the Registrar that he has assumed to himself a power through the bye-laws which had otherwise been denied to him under the Act. The question whether a right and forum for appeal could be provided for through the bye-laws was squarely settled by a Division Bench of this Court in Civil Writ No. 549 of 1968 (Moderen Cooperative Transport Society Ltd Gurgaon through its Secretary v. Registrar Cooperative Societies, Haryana, Chandigarh and others) C.W. No. 549 of 1968 decided on February 16, 1971, wherein it has specifically been held that forum of appeal can be provided for through the (bye-laws). It has also been, observed in this judgment that:--
A combined reading of all these provisions clearly justifies the making of bye-laws 12(vi) and the repeal of the 1955-Act by the 1961-Act makes no difference to the position. The ''employees'' is covered by the word ''officer'' and the cooperative society could thus make a bye-law giving a dismissed employee a right of appeal and that right of appeal has been specifically conferred by bye-law 12(vi). Therefore, the appeal was properly competent and the Registrar was wrong in coming to the conclusion that the appeal was not competent.
Otherwise also I find that the present bye-law. No. 37(iv) is not contrary to any specific provision of the statute or the rules framed there- under nor has Mr. Khoji brought to my notice any such conflict. Further I find that sub-rule (2) of Rule 8 which lays down that "the bye-laws of Cooperative Society may further provide for such matters as are incidental to the organisation of the Society and the management of its business" provide enough of plenary powers to the Cooperative Society to frame such a bye-law. This question, however, ( was not gone into in Hardial Singh''s case (supra) on which Mr. Khoji relies Further Mr. Kuldip Singh, learned counsel for the respondent, does not appear to be wrong in submitting that the petitioner-Societies cannot be allowed to raise this question and thereby to assail the vires or validity of the above noted bye-law for the simple reason that it has been framed or adopted by these Societies of their own volition and it being in the nature of an Article of Association of a Company incorporated under the Companies Act, could be changed, amended, or done away with by the Cooperative Societies at any time. I find merit in this submission of the learned counsel.
Mr. Khoji next contended that even if the above noted bye-law it held to be valid and thus the appeals filed by the private respondents to be competent, still they could not be granted the relief of reinstatement by the appellate authority in view of the mandate of the Supreme Court in S.B. Dutt Vs. University of Delhi, The argument in a nut shell was that in view of the provisions of section 14 of the Specific Relief Act, a contract of personal service cannot be specifically enforced. This contention of the learned counsel has again to be repelled as I find that he has completely misconstrued the above noted judgment of the Supreme Court. That it was a case where the petitioner had sought arbitration with regard to various disputes of his in terms of section 45 of the Delhi University Act and latter obtained a decree from the Court of Sub Judge, Delhi, making the award in his favour a rule of the Court and it was in that context that their Lordships observed thus:--
There is no doubt that a contract of personal service cannot be specifically enforced. Section 21 Cl. (b) of the Specific Relief Act, 1977 and the second illustration under this clause given in the section makes it so clear that further elaboration of the point is not required. It seems to us that the present award does purport to enforce a contract of personal service when it states that the dismissal of the appellant "has no effect on his status", and "He still continues to be a Professor of the University". When a decree is passed according to the award, which if the award is unexceptionable, has to be done u/s 17 of the Arbitration Act after it has been filed in Court, that decree will direct that the award be carried out and hence direct that the appellant be trested as still in the service of the respondent. It would then enforce a contract of personal service, for the appellant claimed to be a professor under a contract of personal service, and so offend section 2(b).
No such situation arises here The respondent employees are not seeking to enforce their right of service through the intervention of civil Court and rather have availed of the forum made available to them by the petitioner-Societies themselves by providing for an appeal against their orders It is not disputed nor can it be that the appellate authority enjoys the same powers as the original authority (Board of Directors in these cases) whose orders were impugned in the appellate forum.
Mr. Khoji, however, deserves to succeed in the light of his last submission when he contended that even if the appeals against the orders of the petitioner-Societies terminating the services of the respondent-employees were competent, then these could only be determined or decided by the authority specified in the bye-law and none else This bye-law reads as follows:--
The powers and duties of the Board of Directors shall be:--
.... .... .... .... ....
(iv) To appoint, dismiss, suspend or punish salaried or unsalaried employees of the bank provided that any employee aggrieved by an order of the Board of Directors dismissing, suspending or otherwise punishing him may appeal therefrom to the Registrar (who may delegate this power of deciding such appeal to the Deputy Registrar) and the decision of the appellate authorit shall be final and binding on him.
Pithily put the submission of Mr. Khoji is that the authority other than the Registrar or his delegetes, Deputy Registrar, is not competent to hear the appeal under the above noted bye-law. He maintains that even though the Joint Registrar has been appointed to assist the Registrar and enjoyed all the powers of the Registrar under the Act, vet he cannot be treated as a Registrar under the bye-laws According to Mr. Khoji, the distinction between the Act and the Rules framed thereunder and the bye law made by the appellant societies in exercise of the statutory powers conferred on them has to betaken notice of. Mr. Kuldip Singh learned counsel for the respondents refutes the submission of Mr. Khoji on the basis of the provisions of sub sections (2) and (3) of section 3 of the Act read with the Punjab Government notification dated September 12, 1963, conferring all the powers of the Registrar under the Act on all the Joint Registrars in the State. Sub sections (2) and (3) of section 3 provide that the Government may appoint a person to assist the Registrar in his functions under the Act and it may also appoint such number of Additional Registrars, Joint Registrars, Deputy Registrars, Assistant Registrars, or other persons with such designations as it may think fit and may by general or special order confer on any person appointed under sub-section (2) all or any of the powers of the Registrar under the Act. According to Mr. Kuldip Singh when the bye-law makes a reference to Registrar, it refers to a person appointed as Registrar under the Act.
After giving my thoughtful consideration to the matter I find that the submission of Mr. Khoji must prevail. It is true that u/s 3 of the Act it is open to the State Government to appoint a Joint Registrar to assist the Registrar and to confer on him all or any of the powers of the Registrar under the Act, but the section speaks of the conferment of powers of the Registrar under the Act only and not under the bye laws framed by the Society. The bye-laws cannot be treated as a part of the Act. This aspect of the matter has been considered by a Division Bench of the Madhya Pradesh High Court in Dukhuram Gupta Vs. Co-operative Agricultural Association Ltd. and Others, and it was held thus:--
We are unable to acceded to the contention that the joint Registrar was competent under bye-law No. 38 to accord approval to the resolution of the Managing Committee dismissing the petitioner. Under the said bye-law, the approval has to be of the Registrar. In the bye-laws of the Association, there is no provision permitting the Government or the Registrar to delegate to any other authority the power of the Registrar under bye-law No 38.
Mr. Kuldip Singh further sought to sustain the impugned orders on the plea that a mere violation of a bye law cannot be styled as a violation of any law and, therefore, this violation even if there, cannot be impugned through these proceedings under Article 226 of the Constitution of India. For this submission of his, the learned counsel sought support from the observations made in Co-operative Central Bank Ltd. and Others Vs. Additional Industrial Tribunal and Others, . I do not find any merit in this submission and to me it appears that the learned counsel has not properly; construed the above noted pronouncement. No doubt it is true that bye-laws, as contemplated by the Act, can only be framed to govern the internal management, business or administration of a Society and are almost in the nature of Articles of Association of a Company incorporated under the Companies Act, yet it cannot be plausibly argued that they even do not bind the persons affected by them and have no legal meaning The observation in the above noted case by their Lordships of the Supreme Court that "the bye laws of a Cooperative Society framed in pursuance of the provisions of the Act cannot be held to be law or to have the force of law was made in the context where it was sought to be argued that the Industrial Tribunal while adjudicating upon an industrial dispute under the Industrial Disputes Act had no jurisdiction to grant relief contrary to the existing bye-laws as applicable to the parties to the dispute and thus could not act against law in granting the relief not envisaged by the bye laws The following observations in that judgment make the whole position manifestly clear :--
We are unable to accept the submission that the bye-laws of a co-operative society framed in pursuance of the provisions of the Act can be held to be law or to have the force of law. It has no doubt been held that, if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. That principle, however, docs not apply to bye-laws of the nature that a co-operative society is empowered by the Act to make. The bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They may be binding between the persons affected by them, but they do not have the force of a statute. In respect of byelaws laying down conditions of service of the employees of a society, the bye-laws would be binding between the society and the employees just in the same manner as conditions of service laid down by contract between the parties. In fact, after such bye-laws laying down the conditions of service are made and any person enters the employment of a society those conditions of service will have to be treated as conditions accepted by the employee when entering the service and will thus bind him like conditions of service specifically forming part of the contract of service. ... ... ... The jurisdiction which is granted to Industrial Tribunal by the Industrial Disputes Act is not the jurisdiction of merely administering the existing laws and enforcing existing contracts. Industrial Tribunals have the right even to vary contracts of service between the employer and the employees which jurisdiction can never be exercised by a civil Court or a Registrar acting under the Co-operative Societies Act, so that the circumstance that, in granting relief on issue No. 1, the Tribunal will have to vary the special bye-laws framed by the Cooperative Bank does not lead to the inference that the Tribunal would be incompetent to grant the reliefs sought in this reference.
Thus Mr. Kuldip Singh cannot possibly argue that the infraction of the bye-laws in these cases is of no consequence.
The ancillary submission of the learned counsel that there being no violation of any statutory provision, rule or any other condition having that status, no writ petition is competent, is again devoid of merit for the reason that what is assailed in these cases are the orders of the Registrar, a statutory authority. Somewhat similar question has been examined by their Lordships of the Supreme Court in Deoki Nandan Prashar v. The Agra District Cooperative Bank, Agra and others 1972 S.L.R. 803 wherein it has been observed (para 12) in this regard that in such matters the violation of any statutory or non-statutory (bye-laws of a Cooporative Society) rule does not really make any difference as far as the jurisdiction of the High Court under Article 226 of the Constitution of India is concerned. The bye-laws are as much binding on the employer and the employee as on the Registrar himself.
In the light of the above discussion, impugned orders Annexures P. 6 and P. 9 are quashed the first as totally without jurisdiction and the second to the extent so far as it directs the holding of a fresh enquiry against the respondent employees by the Joint Registrar. As a necessary consequence of this the case (C W P. No 4511 of 1981) goes back to the Registrar for disposal in accordance with law and the observations made above. The other case is remanded to petitioner''s Board of Directors for decision afresh in accordance with law. I make no order as to costs.