Bhupinder Singh And ORS v. Punjab State Coop.Bank

IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH CWP-14675-2001 (O&M) Date of decision: 06.08.2025 Bhupinder Singh ....Petitioner

Versus

The Registrar, Cooperative Societies, Punjab and others ....Respondents CORAM: HON'BLE MR. JUSTICE HARPREET SINGH BRAR

Present:

Mr. Uday Agnihotri, Advocate for the petitioner.

Mr. Siddharth Sandhu, AAG, Punjab.

Mr. C.L. Pawar, Advocate for respondent No.2.

Mr. Saurav Verma, Advocate with Ms. Preeti Grover, Advocate for respondent No.3.

HARPREET SINGH BRAR J. (Oral) 1.

Prayer in this writ petition filed under Articles 226/227 of the Constitution of India, is for issuance of a write in the nature of mandamus directing the respondents to count the services rendered by the petitioner with respondent No.3. Further prayer has been made to direct respondents No.1 and 2 to grant all other benefits like additional increments or placement in higher promotional scale in recognition of assignment of higher responsibilities as has been granted to similarly situated employees of respondent No.2.

2.

Learned counsel for the petitioner, inter alia, contends that the petitioner worked with respondent No.3 - The Faridkot Bathinda

Kshetriya Gramin Bank, w.e.f. 07.09.1989 upto 04.11.1996. In the year 1995, respondent No.2 - The Punjab State Cooperative Bank, advertised the post of Deputy Manager/Assistant Manager in the pay-scale of Rs.2400-4500/-. One of the condition incorporated in the said advertisement was production of the relieving certificate from the previous employee at the time of joining. On 22.10.1996, after finding the petitioner fully eligible, respondent No.2 - Bank offered appointment to the petitioner to the post of Deputy Manager as discernible from appointment letter (Annexure P-3). After the petitioner was offered appointment by respondent No.2, the petitioner on 31.10.1996, resigned from the job of respondent No.3 as discernible from document (Annexure P-4). On 07.11.

1996, the petitioner reported on duty and joined as Deputy Manager with respondent No.2 - Bank and also produced the relieving certificate and the experience certificate issued by respondent No.3 for his continuous service from 07.09.1989 to 4.11.1996 which is evident from documents (Annexures P-5 and P-6). The petitioner approached the concerned authority of respondent No. 2 - Bank firstly in the year 1997 and continued to make representations (Annexures P-7, P-10 and P-12) for his pay protection along with annual increments on account of his previous employment with respondent No.3. Finally on 19.01.2000, the petitioner made a comprehensive representation (Annexure P-12) in this regard to respondent No.2. On 05.02.2020, the prayer of the petitioner for pay protection was rejected by respondent No.

2 as discernible from document (Annexure P-13).

3.

Learned counsel for the petitioner further submits that the similarly situated 12 other persons have been granted the benefit of pay protection and annual increments on account of their previous employment before their joining with respondent No.2 - Bank. Even in the representation dated 30.05.1998 (Annexure P-10), the petitioner has cited the specific instance of one S.P.S. Dhindsa who joined as Deputy Manager along with the petitioner, after serving another department and his salary was protected by the competent authority. Further, again on 19.01.2000, the petitioner submitted a representation (Annexure P-12), to the respondent regarding grant of increment for higher responsibility and protection of his salary and he has even cited the instances of similarly situated persons who were offered employment along with the petitioner and they have been granted the benefit of pay protection and annual increments, however, respondent No.2, rejected the claim of the petitioner.

4.

Learned counsel for the petitioner further highlighted that this fact has not been controverted by respondent No.3 in its written statement, however, it is admitted that employees who previously worked in departments other than a Cooperative Bank are not entitled to pay protection. He further refers to the Punjab State Cooperative Financing Institution Service (Common Cadre) Rules, 1970-71 (hereinafter 'the Rules') (Annexure P-17) and submits that Rule 3.1(b) covers the case of the petitioner. The Rule itself does not create any distinction with respect to employees who were previously employed with any commercial bank and those who worked at a cooperative bank.

As such, the stand taken by respondent No.2 is contrary to the statutory rules itself. Further, the approach of respondent No.2 is highly inequities as similarly situated persons have been granted the benefit of pay protection and annual increments whereas the case of the petitioner has been arbitrarily rejected.

5.

Learned counsel for respondent No.2, at the outset, has taken the issue regarding maintainability of the present writ petition against respondent No.2 and submits that respondent No.2 is not a 'State' within the meaning of Article 12 of the Constitution of India and as such, the present writ petition is not maintainable. He relies upon the judgment of this Court in Romesh Kumar vs The State of Haryana, 1977 PLJ 424. He further refers to the advertisement (Annexure P-2) and submits that even in the advertisement, it has been clearly mentioned as follows:- "2. In complete application or the experience certificate except Central Bank/State Coop. Bank or Commercial Bank will not be accepted."

6.

He further contends that the petitioner has not applied through proper channel and as such, his claim for pay parity has rightly been rejected by the competent authority.

7.

I have heard learned counsel for the parties and perused the record of the case with their able assistance. 8.

The issue involved in the present writ petition is whether the 'Cooperative Society' falls within the meaning of Article 12 of the Constitution of India and whether the present writ petition would be maintainable for the relief claimed on account of violation of the Rules.

As far as the case of maintainability is concerned, the same is clearly covered by the judgment of coordinate bench in Krishan Kant vs Punjab State Cooperative Agricultural Development Bank Limited and others passed in CWP No.27527 of 2017, decided on 23.02.2023. The operative part of the said judgment, reads as follows:- "7.

The issues involved in the present writ petition are : a) whether Cooperative Society falls within the ambit of 'State' as enumerated under Article 12 of the Constitution of India?'. b) 'whether the writ petition would be maintainable against a Cooperative Society despite the fact that it does not fall within the ambit of 'State'?.

8.

So far as the first issue is concerned Seven Judges Bench of Apex Court in the case of Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology, (2002) 5 SCC 111 while considering the test as laid down in the case of Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 and overruling the view taken in Sabhajit Tewari vs. Union of India and others, (1975) 1 SCC 485 observed as under :

"40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, exhypothesis, be considered to be a State within the meaning of Article 12. The question in each case would be - whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State."

9. The question w.r.t. Punjab State Co-operative Land Mortgage Bank being a 'State' or not already stands answered by Full

Bench of this Court in the case of Pritam Singh vs. State (FB), AIR 1982 Punjab and Haryana 228. The Full Bench following the principles laid down in Ajay Hasia's case (supra) concluded as under :- "25. From the above, the conclusion, therefore, is inevitable that it has not even remotely been established that respondent No. 3 the mortgage bank (against which alone the primary relief is claimed), is an instrumentality or agency of the State. Consequently, it cannot be deemed to be an authority within the meaning of Art. 12 of the Constitution of India and thus not amenable to a writ of certiorari under Art. 226 of the Constitution of India, which is the primary relief sought.

26. Repelled on his primary plank to establish that the mortgage bank was an instrumentality of the State and consequently amenable to the writ jurisdiction (despite the fact of its being registered under the Co-operative Societies Act), Mr. Saini made a tactical retreat to make a flanking attack which seems to be equally futile. It was forcefully contended that in spite of the fact that the mortgage bank may not be an authority under Art. 12 of the Constitution of India, a writ of certiorari will nevertheless still lie for quashing the order of the Managing Director of the respondent mortgage bank, whereby the petitioner has been compulsorily retried. This contention might merit some dubious tribute to the ingenuity of the learned counsel but the same is patently fallacious." It needs to be mentioned that in afore-said judgment Full Bench approved the view taken by Single Bench viz-a-viz the respondent-Bank in this case holding that it is not 'State'. 10.

Being bound by ratio of law laid down by the Full Bench in Pritam Singh's case (supra), I have no hesitation in holding that the respondent-Cooperative Society is not 'State' or instrumentality thereof and, thus, would not fall within ambit of Article 12 of the Constitution of India. Resultantly, the first question framed in Para 7 stands answered in favour of the respondent.

11.

Now coming on to the second issue. The law has evolved. Owing to the change post economic liberalization of the country in the 1990s, role of the State is getting limited. Doctrine of laissez-faire is the norm. However, it has led to creation of a parallel eco-system wherein bodies of different characters and species are performing public functions. The Apex Court in the case of Anadi Mukta Sadguru vs. V.R. Rudani and others, (1989) 2 SCC 691 made following observations :- "The term "authority" used in Article 226, in the con- text, must receive a liberal meaning unlike the term in Article

12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Art. 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as nonfundamental rights. The words "Any person or authority" used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied."

12.

In the case of St. Mary's Education Society and another vs. Rajendra Prasad Bhargava and others, 2022 SCC OnLine SC 1091 while concluding the law w.r.t. maintainability of writ petition against the State instrumentality/bodies involved in public functions held as under :

"(a) An application under Article 226 of the Constitution is maintainable against a person or a body discharging public duties or public functions. The public duty cast may be either statutory or otherwise and where it is otherwise, the body or the person must be shown to owe that duty or obligation to the public involving the public law element. Similarly, for ascertaining the discharge of public function, it must be established that the body or the person was seeking to achieve the same for the collective benefit of the public or a section of it and the authority to do so must be accepted by the public.

(b) Even if it be assumed that an educational institution is imparting public duty, the act complained of must have a direct nexus with the discharge of public duty. It is indisputably a public law action which confers a right upon the aggrieved to invoke the extraordinary writ jurisdiction under Article 226 for a prerogative writ. Individual wrongs or breach of mutual contracts without having any public element as its integral part cannot be rectified through a writ petition under Article 226. Wherever Courts have intervened in their exercise of jurisdiction under Article 226, either the service conditions were regulated by the statutory provisions or the employer had the status of "State" within the expansive definition under Article 12 or it was found that the action complained of has public law element.

(c) It must be consequently held that while a body may be discharging a public function or performing a public duty and thus its actions becoming amenable to judicial review by a Constitutional Court, its employees would not have the right to invoke the powers of the High Court conferred by Article 226 in respect of matter relating to service where they are not governed or controlled by the statutory provisions. An educational institution may perform myriad functions touching various facets of public life and in the societal sphere.

While such of those functions as would fall within the domain of a "public function" or "public duty" be undisputedly open to challenge and scrutiny under Article 226 of the Constitution, the actions or decisions taken solely within the confines of an ordinary contract of service, having no statutory force or backing, cannot be recognised as being amenable to challenge under Article 226 of the Constitution. In the absence of the service conditions being controlled or governed by statutory provisions, the matter would remain in the realm of an ordinary contract of service.

(d) Even if it be perceived that imparting education by private unaided the school is a public duty within the expanded expression of the term, an employee of a nonteaching staff engaged by the school for the purpose of its administration or internal management is only an agency created by it. It is immaterial whether "A" or "B" is employed by school to discharge that duty. In any case, the terms of employment of contract between a school and non-teaching staff cannot and should not be construed to be an inseparable part of the obligation to impart education. This is particularly in respect to the disciplinary proceedings that may be initiated against a particular employee. It is only where the removal of an employee of nonteaching staff is regulated by some statutory provisions,

its violation by the employer in contravention of law may be interfered by the court. But such interference will be on the ground of breach of law and not on the basis of interference in discharge of public duty.

(e) From the pleadings in the original writ petition, it is apparent that no element of any public law is agitated or otherwise made out. In other words, the action challenged has no public element and writ of mandamus cannot be issued as the action was essentially of a private character."

13. Thus, the proposition that emerges is that for an establishment to be a 'State' as defined under Article 12 of the Constitution of India, it must pass the tests as enumerated by Apex Court in Ajay Hasia's case (supra) and reiterated by the Constitution Bench in the case of Pradeep Kumar Biswas (supra). In case the establishment against whom writ has been filed falls within the ambit of Article 12 and can be termed as 'State', there would be no doubt about the same being amenable to writ jurisdiction. However, writ petition will not be held to be maintainable against a body discharging public function merely because it does not fall within the definition of 'State'. The test is : whether cause of action pleaded by the petitioner involves breach of statutory provision? In the case of Cooperative Society also though it is not 'State' but a breach of statutory Rules would render it amenable to writ jurisdiction.

14.

Even in the case of S.S. Rana vs. Registrar Co-operative Societies & Anr. (2006) 11 SCC 434 Apex Court held as under :- "8. ....It is not in dispute that the Society has not been constituted under an Act. Its functions like any other Cooperative Society are mainly regulated in terms of the provisions of the Act, except as provided in the bye-laws of the Society. The State has no say in the functions of the Society. Membership, acquisition of shares and all other matters are governed by the bye-laws framed under the Act. The terms and conditions of an officer of the Cooperative Society, indisputably, are governed by the Rules. Rule 56, to which reference has been made by Mr. Vijay Kumar, does not contain any provision in terms whereof any legal right as such is conferred upon an officer of the Society.

9. It has not been shown before us that the State exercises any direct or indirect control over the affairs of the Society for deep and pervasive control. The State furthermore is not the majority shareholder. The State has the power only to nominate one director. It cannot, thus, be said that the State exercises any functional control over the affairs of the Society in the sense that the majority directors are nominated by the State. For arriving at the conclusion that the State has a deep and pervasive control over the Society, several other relevant questions are required to be considered, namely : (1) How the Society was created ?;

(2) Whether it enjoys any monopoly character ?; (3) Do the functions of the Society partake to statutory functions or public functions ?; and (4) Can it be characterised as public Authority ?

10. The respondent No. 1-Society does not answer any of the afore-mentioned tests. In the case of a non-statutory society, the control thereover would mean that the same satisfies the tests laid down by this Court in Ajay Hasia v. Khalid Mujib Sehravardi, (1981)1 SCC 722. [See Zoroastrian Coop. Housing Society Ltd. v. District Registrar, Coop. Societies (Urban) & Ors., 2005(5) SCC 632].

11. It is well settled that general regulations under an Act, like Companies Act or the Co-operative Societies Act, would not render the activities of a company or a society as subject to control of the State. Such control in terms of the provisions of the Act are meant to ensure proper functioning of the Society and the State or statutory authorities would have nothing to do with its day-to-day functions.

12. The decision of the Seven Judge Bench of this Court in Pradeep Kumar Biswas (supra), whereupon strong reliance has been placed, has no application in the instant case. In that case, the Bench was deciding a question as to whether in view of the subsequent decisions of this Court, the law was correctly laid down in Sabhajit Tewary v. Union of India & Ors., (1975) 1 SCC 485, and it not whether the same deserved to be overruled. The majority opined that the Council of Scientific and Industrial Research (CSIR) was a 'State' within the meaning of Article 12 of the Constitution of India. This Court noticed the history of the formation thereof, its objects and functions, its management and control as also the extent of financial aid received by it. Apart from the said fact it was noticed by reason of an appropriate notification issued by the Central Government that CSIR was amenable to the jurisdiction of the Central Administrative Tribunal in terms of Section 14(2) of the Administrative Tribunals Act, 1985. It was on

the aforementioned premises this Court opined that Sabhajit Tewary (supra) did not lay down the correct law. This Court reiterated the following six tests laid down in Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722:

"(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government.

(2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with Governmental character.

(3) It may also be relevant factor ...whether the corporation enjoys monopoly status which is State conferred or State protected.

(4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality.

(5) If the functions of the corporation are of public importance and closely related to Governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government.

(6) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference' of the corporation being an instrumentality or agency of Government." This Court further held :

"This picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article

12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State." (Emphasis supplied)

13. As the respondent No. 1 does not satisfy any of the tests laid down in Pradeep Kumar Biswas (supra), we are of the opinion that the High Court cannot be said to have

commtted any error in arriving at a finding that the respondent-Bank is not a State within the meaning of Article 12 of the Constitution of India.

14. We are, however, not oblivious of a three judge Bench decision in Gayatri De v. Mousumi Cooperative Housing Society Ltd. & Ors., 2004(3) RCR (Civil) 204 : (2004) 5 SCC 90, wherein this Court held a writ petition to be maintainable against the cooperative society only stating : "We have, in paragraphs supra, considered the judgments for and against on the question of maintainability of writ petition. The judgments cited by the learned Senior Counsel appearing for the respondents are distinguishable on facts and on law. Those cases are not cases covered by the appointment of a Special Officer to manage the administration of the Society and its affairs. In the instant case, the Special Officer was appointed by the High Court to discharge the functions of the Society, therefore, he should be regarded as a public authority and hence, the writ petition is maintainable."

15. The said decision, therefore, is of no assistance to us.

16. Our attention has also been drawn to U.P. State Cooperative Land development Bank Ltd. v. Chandra Bhan Dubey & Ors., 1999(1) S.C.T. 593 : (1999) 1 SCC 741, wherein the writ petition was held to be maintainable principally on the ground that it had been created under an Act. Reliance has also been placed upon Ram Sahan Rai v. Sachiv Samanaya Prabandhak & Anr., 2001 (2) S.C.T. 231 : (2001) 3 SCC 323, wherein again the appellant thus was recruited in a Society constituted under the U.P. Cooperative Land Development Bank Act, 1964 and this Court, having examined different provisions of rules, byelaws and regulations, was of the firm opinion that the State Government exercised all-pervasive control over the Bank and moreover its employees were governed by statutory rules, prescribing an entire gamut of procedure of initiation of disciplinary proceedings by framing a set of charges culminating in inflicting of appropriate punishment, after complying with the requirements of giving a show-cause and an opportunity of hearing to the delinquent.

17. It is, therefore, evident that in Ram Sahan Rai (supra) also the cooperative society was held to be established under a statute. We may notice that in Nayagarh Cooperative Central Bank Ltd. & Anr. v. Narayan Rath & Anr., (1977) 3 SCC 576, this Court was of the opinion that :

"The High Court has dealt with the question whether a writ petition can be maintained against a cooperative society, but we are inclined to the view that the observations made by the High Court and its decision that such a writ petition is maintainable are not strictly in accordance with the decisions of this Court. We would have liked to go into the question for ourselves, but it is unnecessary to do so as Respondent 1 by his writ petition, was asking for relief not really against a cooperative society but in regard to the order which was passed by the Registrar, who was acting as a statutory authority in the purported exercise of powers conferred on him by the Cooperative Societies Act. The writ petition was in that view maintainable."

18. We may notice in some decisions, some High Courts have held wherein that a writ petition would be maintainable against a society if it is demonstrated that any mandatory provision of the Act or the rules framed thereunder, have been violated by it. [See Bholanath Roy & Ors. v. State of West Bengal & Ors., (1996) Vol. 1 Calcutta Law Journal 502].

19. The Society has not been created under any statute. It has not been shown before that in terminating the services of the appellant, the Respondent has violated any mandatory provisions of the Act or the rules framed thereunder. In fact, in the writ petition no such case was made out." (emphasis supplied)

15. In the present writ petition, the petitioner prays for writ of mandamus and not for writ of certiorari. Trite it is that in order to invoke the mandamus jurisdiction, the petitioner is under obligation to show public or statutory duty laid on the respondent and to demonstrate an equally clear legal right to enforce the same. On the aforesaid principle, ratio of law laid down by Full Bench of this Court in Pritam Singh's case (supra) is fully in-line with exceptions carved out in S.S. Rana's case (supra). Now the question arises is: whether the Punjab State Cooperative Agricultural Development Bank Service Common Cadre Rules, 1978 are mandatory?.

16. It need not look far as the said issue also stands concluded by Full Bench of this Court in Jasbir Singh vs. Commissioner (Appeals), Jalandhar Division and others, 2011(4) RCR (Civil) 1, wherein it has been held that :- "37. There are three categories of Service Rules which can be framed to regulate the conditions of service of the employees of the Society. In first category, a registered Society under the Societies Act can frame its own Service Rules to regulate the service conditions of its employees. The Rules may be binding between the Society and its employees.

The second category of the Rules is those rules which are formulated under Section 85(2) (xxxviii), which empower the Government to frame Service Rules for any Co-operative Society or for class of societies with regard to qualifications for employees of a Society or class of society and the conditions of service subject to which persons may be employed by Societies. Such Rules so framed have the force of Statute and are deemed to be incorporated as a part of the Statute, whereas this principle does not apply to the first category of Rules framed by the Society because those Rules merely govern the internal management, business or administration of a society. They are of the nature of the Articles of Association of a Company incorporated under the Companies Act.

They may be binding between the persons affected by them, but they do not have the force of a statute. But the second category of Rules is the Statutory Rules and they have the force of the statute. Similarly, there is third category of Rules known as Common Cadre Rules. These rules could have been framed under Section 84-A of the Punjab Act which provide that an apex society may suo motu and when required to do so by the Registrar shall constitute a common cadre of all, or specified class of employee in the service of that society or in the service of the central societies which are members of the apex society or in the service of the primary societies which are members of the apex society.

Sub-section (2) further provides that when a common cadre of employee is constituted under sub-section (1), the Registrar shall notwithstanding anything contained in any law for the time being in force or any agreement, settlement or award determine the pay scales and allowances admissible to such employees and Apex Society shall make rules for the regulation of recruitment and conditions of service of such employees with the prior approval of the Registrar.

colour and stand on the same footing as that of the Statutory Rules."

17. Thus Full Bench of this Court has already held that the Common Cadre Rules are mandatory in nature and, thus, the writ of mandamus to enforce the same would be maintainable in view of settled law."

9.

Accordingly, in view of the judgment rendered in Krishan Kant's case (supra), the issue of maintainability is decided in favour of the petitioner. Further, the act and conduct of respondent No.2 in denying the pay protection and annual increments to the petitioner, is violative of Articles 14 and 16 of the Constitution of India. Moreover, once respondent No.2 has adopted the Rules and if they were in operational at the time of employment of the petitioner, respondent No.2 cannot deviate therefrom. As such, respondent No.2 shall also be forbidden from taking a stand which is not in conformity with Rule 3.1(b) of the Rules. Further still, the said Rules do not draw any distinction or make any classifications against employees who previously worked at bank other than a cooperative bank. 10.

Moreover, reference can be made to the judgment of Hon'ble Supreme Court in D.S. Nakara and others vs Union of India, 1983(1) SCC 305, wherein it has been held that Article 14 of the Constitution prohibits arbitrariness in State action and ensures fairness and equality. It applies when individuals similarly situated are treated unequally without a reasonable basis. Any discriminatory action must be justified by a valid, non-arbitrary, and non-discriminatory principle, failing which it is liable to be struck down.

11.

In view of the above, the present petition is allowed and respondent No.2 is directed to grant pay protection as well as annual increments to the petitioner on account of the services rendered by him with respondent No.3, w.e.f. 25.08.1989 to 04.11.1996. 12.

All pending applications, if any, also stands disposed of. (HARPREET SINGH BRAR) JUDGE 06.08.2025 yakub Whether speaking/reasoned:

Yes/No Whether reportable:

Yes/No