Nanuram Yadav and others Vs Registrar, Co-Operative Societies and others

@JUDGMENTTAG-ORDER

Dipak Misra, J.

Invoking the extraordinary and inherent jurisdiction of this Court under Articles 226 and 227 of the Constitution of India, the petitioners have prayed for issue of a writ of certiorari for quashment of the order dated 1-8-1997 (Annexure.P1) passed by the respondent No. 1 and order dated 27-10-1997 (Annexure.P3) passed by the respondent No. 3 whereby the services of the petitioners have been terminated and further to declare Rule 61 of the Staff Service Rules (for short ''the Rules'') of the Madhya Pradesh Rajya Sahakari Bank Maryadit (for short ''the Bank'') as unconstitutional being unconscionable, arbitrary and unreasonable thereby inviting the frown of Article 14 of the Constitution and to issue a writ of mandamus commanding the respondents not to place any reliance on the report submitted by the Lokayukta dated 28-1-1997, the same being untenable and unsustainable and to affirm the order dated 4-2-2005 (Annexure.P4) passed by the M.P. State Co-operative Tribunal as justified to the extent it has set aside the order dated 21-7-1994 passed by the Additional Registrar and lancet that portion by which he has remitted the matter to the Additional Registrar for adjudication as the same was neither the warrant nor the imperative and as a natural corollary, to issue appropriate writ to the respondent No. 3 Bank to allow the petitioners to continue in their posts till they are validly terminated.

The requisite facts

The respondent No. 3 Bank is duly registered and incorporated under the M.P. Co-operative Societies Act, 1960 (for short ''the Act''). The petitioners were working on the posts of Clerk-cum-Typist which is a class V post in the administrative set up of the Bank. They had at various points of time applied for the posts of Clerk-cum-Typist. The Commissioner Co-operatives-cum-Registrar Co-operative Societies, Madhya Pradesh had sanctioned 60 posts of Clerk-cum-Typists respectively on 11-11-1994 and 29-6-1994. As pleaded, the petitioners were duly selected under Rule 3 (a) (v) of the Staff Service Rules, 1976 Rajya Sahakari Bank Maryadit as Clerk-cum-Typist against the aforesaid sanctioned vacant posts on ad hoc basis for a period of six months vide order dated 31-1-1995 as contained in Annexure.P5. On 2-7-1995, after expiry of six months, as envisaged under Rule 22 (a), the petitioners were required to appear in the written examination so that they could be appointed for a period of one year as Probationers. The petitioners took the written examination on the said date and became successful. The petitioners were required by the Bank to face interview on 20th July, 1995 by the Selection Committee. The Selection Committee recommended the names of the petitioners for appointment on regular basis. An order passed in respect of one Nanuram Yadav has been brought on record as Annexure.P6. On 29-7-1995, the petitioners were asked by the respondent Bank to furnish service-cum-security bond for a period of three years with a deposit of Rs. 5000/- security in the form of FDRs. The said condition was complied with by the petitioners.

According to the writ petitioners, they discharged the duties with utmost honesty and sincerity and taking into consideration their performance, the appointing authority under Rule 14 (b) confirmed the services of the petitioners on the posts of Clerk-cum-Typist on 31-10-1996. A copy of one such order has been brought on record as Annexure.P8. When the matter stood thus, all of a sudden, without any notice or assigning any reason, the Managing Director of the respondent Bank issued termination letter under Rule 61 of the Rules to the petitioners on 21-7-1997 after giving three months'' notice. Perplexity loomed large as the petitioners were not afforded an opportunity of being heard and they were driven to the streets in a singular stroke of pen despite the factum that their services were confirmed. It is urged that subsequently they gathered the information that the order of termination was issued by the Bank on the basis of the direction dated 1-8-1997 issued by the Commissioner Co-operatives-cum-Registrar, Co-operative Societies Madhya Pradesh to the Managing Director of the Bank on the foundation that the Lokayukta had found 58 Clerk-cum-Typist had been illegally appointed on the posts and hence, it was imperative to terminate their services taking, aid of Rule 61 of the Staff Service Rules.

It is evincible, as set forth, the Co-operative Workers'' Federation filed a complaint before the Lokayukta about the illegal appointments which was taken cognizance of by the Lokayukta who proceeded to investigate into the matter. It is contended that the said authority usurped jurisdiction and proceeded to conduct an enquiry without issuing notice to the petitioners and eventually submitted a report incorporating certain findings which had no base and no foundation, but the said report motivated the Registrar, Co-operative Societies to issue the letter dated 1-8-1997 requiring the Managing Director of the Bank to terminate the services of the petitioners under the Staff Service Rules. The Managing Director of the Bank did not apply his mind to the facts situation as well as to the status earned by the petitioners and passed the order of termination in an extremely capricious manner.

The defensibility of the termination orders was called in question before the Indore Bench of this Court and the Indore Bench granted stay on the first date of hearing but on 7-12-1997, the writ petition was disposed of as withdrawn as a consequence of which the stay order stood vacated. Similarly, two other writ petitions were filed which were withdrawn with the permission of the Court, to proceed with the alternative remedy. As set forth, they knocked at the forum of Registrar, Co-operative Societies and sought interdiction by way of stay but there was refusal to extend the prayer for stay as per order dated 23-1-1998. Being dissatisfied with the aforesaid order, the petitioners preferred an appeal before the Board of Revenue which on 21-2-1998, passed an order of stay but on the subsequent date i.e. 27-3-1998, the stay order was vacated. The presentableness of the aforesaid order was called in question in a writ petition and the writ petition was disposed of as per order dated 20-4-1998 with a direction to the Additional Registrar to dispose of the case on merits. Be it stated, the order of stay was allowed to continue. The Additional Registrar heard the matter on 14-12-2000 and reserved it for orders. After a gap of four years i.e. on 21-7-2004 the said Authority passed the final order dismissing the application as per Annexure P9. Being aggrieved, the petitioners preferred an appeal u/s 77 of the Act before the M.P. State Co-operative Tribunal with an application for grant of ad-interim stay of termination but the said application was rejected by the Tribunal. Grieved by the same, the petitioners knocked at the doors of this Court for grant of stay but the same was dismissed by the learned single Judge on 19-8-2004. Thereafter a Letters Patent Appeal was preferred, which was dismissed but a direction was given to the Tribunal to decide the appeal on merits within a definite time frame. The Tribunal, as contended, heard the appeal at length on merits of the case, set aside the impugned order dated 21-7-2004 on the ground that the evidence of witnesses 2, 3 and 4 was not signed by the Additional Registrar and, therefore, they should be re-examined and the parties may be afforded opportunity in accordance with law. The said order, Annexure P4, is the subject-matter of assail in this writ petition. Quite apart from the above, the Constitutional validity of Rule 61 of the Rules has also been raised.

Counter Affidavit by the respondent No. 3

It is the stance of the third respondents that the petitioners were served, with a notice dated 27-10-1997 (AnnEx. P2), whereby they were intimated that after expiry of three months, their services would stand terminated. Against the aforesaid order, the petitioners preferred two writ petitions forming the subject-matter of W.P. No. 1673 of 1997 and W.P. No. 1574 of 1997 and these petitions were dismissed as per order dated 17-12-1997. LPA No. 7 of 1998 was carried before the Division Bench which was decided by order dated 20-8-1998 giving the liberty to the petitioners to approach the Registrar, Co-operative Societies. It is contended that in pursuance of the recommendations made by the Lokayutkta, Madhya Pradesh, the petitioners were removed and it was within their knowledge but they did not challenge the validity of the report dated 28-8-1997 and hence, they are precluded from questioning the soundness of the said report. The assail to the report after lapse of 8 years is an exercise in futility and the said challenge is to be thrown over-board on application of doctrine of delay and laches. It is put forth that the services of the petitioners had been terminated by the respondent No. 3 on 27-7-2004 on making payment of three months'' salary-in lieu of notice and against the said order, the petitioners had preferred an application before the Tribunal for grant of stay and the same had been rejected on 12-8-2004. The said order was called in question in W.P. (S) No. 6295 of 2004. this Court had rejected the same as per Annexure R4. The said order came to be questioned in LPA No. 576 of 2004 which faced dismissal on 13-9-2004 as per Annexure R5. It is contended that in the present petition, the efforts and endeavour of the petitioners is to obtain an interim relief by way of status quo ante, which is impermissible as of termination orders have already been given effect to. It is put forth that the present writ petition has been filed against the order of remand dated 4-2-2005 by the Tribunal though such a writ petition is not maintainable. It is highlighted that the matter is pending before the Additional Registrar, Cooperative Societies, Madhya Pradesh Bhopal and an order on merit is to be passed and if any order is passed in the writ petition, that would prejudice the adjudication before the said authority.

It is the further stand in the return that the answering respondent had requested the Registrar, Co-operative Societies by letter dated 24-7-1994 for sanction of 60 posts of Clerk-cum-Typists showing the urgency for making the appointments whereupon on 29-6-1994, the Registrar, Co-operative Societies gave permission for appointment of 40 Clerks-cum-Typists for six months on the condition that within six months, regular appointments as per rules of the appointment would be made. The Managing Director of the respondent Bank on 25-10-1994 requested for 20 more posts in the said category and the permission was accorded on 11-11-1994. In pursuance of the aforesaid permission, 58 persons were appointed on ad hoc basis on 30-6-1995. Written tests only of these very persons were taken and they were interviewed by the Selection Committee. Thus, 58 persons were given regular appointment. It is highlighted that the posts were not advertised as per direction of the Registrar and vacancies were not notified under Rule 21 of the Rules. It is also put forth that most of the appointees were near relatives of the officers of the management and there was violation of the Staff Service Rules. When a complaint was made by one N.K. Saxena to the Lokayukta, Madhya Pradesh, Bhopal, he conducted a scrutiny and after conducting a thorough enquiry, the Lokayukta came to hold that there was blatant violation of the Staff Service Rules and favouritism was shown to the petitioners by the then Managing Director of the Bank. In view of the aforesaid, the services of the petitioners were terminated after giving due notice.

It is also a stand in the counter affidavit that the services of the petitioners were not confirmed with the sanction of the Registrar, Co-operative Societies, Madhya Pradesh, Bhopal though required. Emphasis has been laid on the aspect that on completion of probation, the petitioners were regularised in hot haste. The confirmation of the petitioners on the post of Clerk-cum-Typist is a plan hatched which vitiates the whole action and the steps taken by the Authority are on the foundation of the report of the Lokayukta and there is no error in the order of termination.

Rejoinder Affidavit

A rejoinder affidavit has been filed by the petitioners to the return filed by the respondents highlighting that the petitioners were put under probation for a period of one year and thereafter they were made permanent against the clear vacant and duly sanctioned posts. The petitioners have worked for ten years from the date of their entry into the service of the Bank by virtue of their initial appointments, confirmation and stay order granted by the Court and there is no justification to terminate their services. Emphasis has been laid on the factum of execution of the bond. It is put forth that the respondent Bank had filed a return earlier admitting the facts that the petitioners were appointed on ad hoc basis as Clerk-cum-Typist; that examinations were held and the petitioners were interviewed and after becoming successful in the examination and interview, their services were continued; that all those persons who were found fit in the selection, were given appointments and they were posted on the regular posts; and that bonds were executed by them debarring them from applying to any other Department forgetting new appointments for a period of three years. Acceptance of the recommendation of the Lokayukta has been seriously commented upon by the petitioners stating, inter-alia, that instead of taking recourse to the procedure as provided under the Staff Service Rules of the Bank, impromptu steps were taken for implementation of the report which has no sanction of law.

Proceedings before various foras and this Court

Initial order was passed in W.P. No. 1673 of 1997 and W.P. No. 1674 of 1997. this Court had granted stay and eventually, in the final order dated 17-12-1997, this Court after referring to so many aspects in paragraphs 20 to 23 expressed the view as under:

20. True it is that recourse to Article 226 is normally not proper where statutory forum is available. In State of U.P. and another Vs. Labh Chand, it is held as under:

When a statutory Forum or Tribunal is specially created by a statute for redressal of specified grievances of persons on certain matters, the High Court should not normally permit such persons to ventilate their specified grievances before it by entertaining petitions under Art. 226 of the Constitution is a legal position which is too well settled.

Confronted with objection about alternative remedy, the counsel for petitioners seeks to withdraw these writ petitions with liberty to resort to alternative remedy within reasonable time and to take steps for ''status-quo'' in regard to service matter.

This limited prayer is not opposed.

Ex consequenti, I decline admission and dismiss these writ petitions as withdrawn, without finally expressing opinion on merits of matter so as to keep all sides immune from possible prejudice, with no orders as to costs.

In L.P.A. No. 9 of 1998, this Court issued following directions:

Meanwhile status quo is ordered to be maintained as it exists today in respect of appellants'' present position and status till the Registrar considers their case for grant of appropriate interim relief, if any, prayed for. Appellants are required to approach the Registrar with their respective petitions within two weeks from today, who in turn shall consider and dispose these of in accordance with law within three months from the date of receipt of this order.

Thereafter the matter was adjudicated by the authorities and eventually the Tribunal vacated the order of stay on 12-8-2004 which was assailed in W.P. (S) No. 6295 of 2004. The learned single Judge declined to interfere and passed the following order:

Petitioners have challenged the order dated 21-7-2004 of the Additional Registrar, M.P. Co-operative Societies before the M.P. State Cooperative Tribunal. By the impugned order dated 12-8-2004, the Tribunal has rejected the application for stay. The Tribunal has fixed the case for hearing on 9-11-2004. It is directed that the Tribunal will finally hear both the sides on that date and then pass a final order. Considering the report of the Lokayukta which is referred in the order of the Additional Registrar, the petitioners cannot be permitted to continue in the service of respondent No. 1 M.P. Rajya Sahakari Bank Maryadit till the decision of the appeal by the Tribunal. The finding of the Lokayukta is that there have been grave irregularities in the appointment of the petitioners. The petition is dismissed.

The said order was assailed in L.P.A. No. 576 of 2004 and the Division Bench considering the submissions of the Learned Counsel for the appellant to the effect that the observations made by the learned single Judge should be deleted or the Tribunal be directed not to be influenced by the observations made by the learned single Judge, expressed the opinion as under:

Considering the prayer, it is not in dispute that the main case of the appellant is pending before the M.P. State Co-operative Tribunal. The Tribunal vide order dated 12-8-2004 has considered the prayer of interim stay and by reasoned order has rejected it. The order was challenged before the learned Single Judge and the contentions raised before the learned single Judge were considered and decided by the impugned order. The order has been passed on an interim stay application. It is a settled law that any observations or finding recorded while deciding the prayer of interim relief, the merits of the case are not affected, The aforesaid observations have been made just to decide the prayer for grant of interim relief and it will not affect the merits of the case.

So far as the prayer of the appellant that the Tribunal be directed to prepone the hearing of the case is concerned, the appellant may file an appropriate application before the Tribunal for fixing a date of hearing in the month of October, 2004 after supplying copy of the application to the other side. On filing such an application, the Tribunal shall fix a date of hearing according to its convenience in the month of October, 2004. With the aforesaid directions, this appeal stands finally disposed of.

Thereafter, the Tribunal took up the matter and vide Annexure P4 dated 4-2-2005, in a composite order, decided the two First Appeals F.A. No. 201 of 2004 and F.A. No. 223 of 2004. The Tribunal took note of the fact that the Additional Registrar had pronounced the judgment after lapse of four years and that evidence of witnesses had not been considered properly. In paragraphs 27 to 30, the Tribunal expressed the view as under:

27. In this regard, a principle has been laid down by the Hon''ble Supreme Court in case laws reported in 2000 (1) Supreme 209 Bhawan Dass Phateh Chand Daswani and others vs. H.P.A. International and ors. that the judgment has been pronounced 5 years after the hearing of the final arguments then it is liable to be rejected on this ground alone and Hon''ble Supreme Court without considering the merits in the appeal allowed it by remitting it. The said judicial illustrations has been referred with full context in view of the present case.

In view of the aforesaid judicial illustrations, the impugned order passed by Ld. Addl. Registrar in the present case is defective due to its pronouncement 3 1/2 years after the final arguments. The statements of the witnesses are not found to be recorded in accordance with the law. Due to this reason also, the impugned order is defective or erroneous.

As a result of aforesaid analysis both the appeals are allowed in view of the aforementioned judicial illustrations and impugned order is rejected without expressing any opinion on the merits of the case and this case is remitted back to Ld. Additional Registrar, Bhopal with a direction that he should pass an order again in accordance with law by providing the opportunity for the cross-examination of PW-2 Smt. Suchi Prabha Sharma, PW-3 Shri Ashok Kr. Chandel and PW-4 Shri Shabbir Khan and by providing an opportunity to the respondent and after hearing the contentions of the parties.

For this purpose, parties are given direction through their counsel they should remain present in the Court of Ld. Additional Registrar on 28-3-2005 at 11 AM for further proceedings.

Contentions raised on behalf of the Learned Counsel for petitioners

The Learned Counsel for the petitioners has raised the following contentions :

(i) The Lokayukta had no jurisdiction to enquire into the matter of appointment inasmuch as the petitioners are not covered under the provisions of the M.P. Lokayukta Evam Up-Lokayukta Adhiniyam, 1981. Further the Lokayukta has committed gross error by not affording an opportunity of hearing to the petitioners and submitting a report behind their back.

(ii) The Registrar of Co-operative Societies has committed immense irregularity in implementing the report forthwith without following due procedure of law inasmuch as the termination of the petitioners, who were permanent employees, by giving three months'' notice is absolutely unjustified and unsustainable.

(iii) Rule 61 of the Staff Service Rules is unconscionable, unfair and unreasonable and opposed to public policy and hence, ultra vires Art. 14 of the Constitution.

(iv) The petitioners being permanent employees could not have been ousted from their service without initiating appropriate proceedings against them.

(v) The order of the Tribunal cannot be allowed to stand as the issue of constitutional validity could not have been adjudicated by the Tribunal and the Tribunal has totally erred by remanding the matter for adjudication.

(vi) The order of remand to the Additional Registrar would not sub-serve the cause of justice as nothing would turn out on the same inasmuch as the constitutional validity of the service rules is the substratum of grievance of the petitioners.

Submissions urged by the Learned Counsel for respondents

The Learned Counsel for the respondents had contended as follows:

(i) The recommendations of the Lokayukta have been made after proper enquiry keeping in view the irregularities in the matter and hence, no fault can be found with the same. The Lokayukta while conducting an enquiry is not required to hear the petitioners and there is no violation of any of the provisions of the Adhiniyam. The enquiry conducted by the Lokayukta is within his competence and the report would show that there has been compliance of principles of natural justice.

(ii) The compliance of the recommendations by the Registrar, Cooperative Societies cannot be found fault with as the report was absolutely valid in the eye of law.

(iii) The Registrar, Co-operative Societies has the authority to direct the respondent Bank to comply with the recommendations of the Lokayukta and, therefore, no fault can be found with the same.

(iv) As the matter is subjudice before the Additional Registrar, Cooperative Societies, the controversy should not be adjudicated in this writ petition.

(v) The removal of the petitioners is not in violation of principles of natural justice as the doctrine of audi-alteram partem is not attracted. The removal of the petitioners from service cannot be regarded as erroneous as their appointments were improper and in violation of the rules.

(vi) The petitioners'' removal does not fall in the category of removal under Rule 61 as they were removed on the basis of recommendations of the Lokayukta.

(vii) The petitioners have no locus standi to challenge the validity of Rule 61 and Rule 64 of the Staff Rules.

(viii)The writ petition is barred by principles of constructive res-judicata inasmuch as the petitioners in the earlier writ petitions ought to have challenged the Constitutional validity of the staff service rules.

The compartmentalisation of submissions

At this juncture, it is condign to state that though we have noted the contentions of the Learned Counsel for the parties, we think it appropriate to state that certain aspects are not to be dealt with at this stage as that is likely to have repercussions in future proceedings in view of the directions which we are eventually going to issue. The challenge to the jurisdiction and the competence of the Lokayukta submitting a report, the contents of the report, the findings recorded, in our considered opinion, are not to be adverted to despite vehement criticism of the same by Mr. M.K. Shukla, Learned Counsel for the petitioners, who has drawn our attention to the decisions rendered in the case of Institution of Andhra Pradesh lokayukta/UPA-Lokayukta, A.P. Vs. T. Rama Subba Reddy and Another, and Rama Rao vs. Lokayukta, (1996) 5 SCC 304.

As we have segregated the aforesaid part of contentions, we are disposed to think that contentions which are essential to be dealt with because of their fundamental character for adjudication of the lis before us can be put into five compartments, namely

(i) Whether this Court can adjudicate the controversy though the matter has been remitted by the Tribunal to the Additional Registrar, who can enter into the factual controversy and also confer the benefit on the employees and whether the availability of alternative remedy debars the petitioners to agitate their grievances before this Court.

(ii) Whether the doctrine of constructive res judicata is attracted in the instant case.

(iii) What is the nature of Rule 61 of the Staff Service Rules and whether the said Rule invites the wrath of Art. 14 of the Constitution of India.

(iv) If the Rule 61 is declared ultra-vires the Constitution, whether in the obtaining factual matrix, the petitioners can be conferred any benefit.

We shall deal with the first facet first. It is demonstrable that the Tribunal has remitted the matter on the ground that the authority concerned had passed the order after lapse of three and half years and had not taken into consideration the evidence of three witnesses. The question that gets frescoed is whether while the matter is subjudice before the Additional Registrar, Cooperative Societies, this Court should dwell upon the same. Ordinarily, this Court would have been at loathe to deal with the same but, a pregnant and significant one, the petitioners, as has been indicated hereinabove, have called in question the validity of Rules and the same cannot be dealt with by the Additional Registrar, Co-operative Societies. Submission of Learned Counsel for the petitioners is that delineation with regard to the rule is the foundation and corner stone for adjudication of the lis in question and the grievance of the petitioners would remain unmitigated and the adjudication by the Additional Registrar, Cooperative Societies would be a Sisyphean endeavour. It is well settled in law that the Tribunal with limited jurisdiction cannot deal with the validity of the Rules. We may hasten to clarify that the matter is different when the Rules are assailed before the Central Administrative Tribunal or State Administrative Tribunal as per the law laid down in L. Chandra Kumar Vs. Union of India and others,

The next issue that we would like to address is whether challenge to the vires of the rule is impermissible and unsustainable being hit by the principles of constructive res judicata. We have produced various orders passed by this Court on various occasions. The issue of Constitutional validity of the Rule was not raised as the petitioners were challenging the orders from various spectrums and this Court has always remanded the matter indicating that there is an alternative remedy. The submission of Mr. Kale and Mr. R.S. Jha, learned Senior Counsel for the respondents is that the said issue should have been raised before this Court in earlier writ petitions. The challenge to Constitutional validity of the rule is a different matter. It is not a case where the writ petitions were dismissed on merits. Had the writ petitions been dismissed on merits on the ground of the report submitted by the Lokayukta or on the basis of action taken by the Registrar, Co-operative Societies and giving the stamp of approval to the same, the matter would have been totally different and there would have been no necessity for reopening of the issue. As is evincible and manifest, this Court never adjudicated the lis on merits. In fact, on all occasions, this Court expressed the opinion that it was not expressing any opinion on the merits of the case. In the last L.P.A., this Court also clarified the order of the learned single Judge. In this context, we may profitably refer to the decision rendered in the case of Nand Kishore Vs. State of Punjab, , wherein in paragraph 19, it has been held as under:

19. It would then have to be seen the twin play of the notion of deemed constitutionality and bar of constructive res judicata. Raising the constitutionality of a provision of law, as it appears to us, stands on a different footing than raising a matter on a bare question of law, or mixed question of law and fact, or on fact. There is a presumption of constitutionality can be crossed over. When a person enters a Court for relief and does not substantially in issue, it only means and implies that he goes by the presumption of constitutionality. He cannot on this stance be deemed to have raised the question of constitutionality and the question of constitutionality to have been decided against him and such matter to have been directly and substantially in issue. The constitutionality of the Rule relating to compulsory retirement cannot be deemed to have been questioned and decided against the appellant on the principles of ''might and ought'' or it being ''directly and substantially in issue''. It cannot be taken as a rule that one of the pleas, either by the plaintiff or the defendant, in every suit or proceeding, must of necessity relate to the constitutionality of the law on which the cause is founded or defended in order to obviate the plea of constructive res judicata being raised in an eventuality. It cannot also be taken as a rule that constitutionality of the law involved is a matter directly and substantially in issue, and if not raised renders mute decision in favour of its constitutionality barring the plea being raised in a subsequent suit. If there be read such a rule in all civil litigation, it would, to our mind, be against public policy vexing and burdening the Courts to go into the constitutionality of provisions of law in every case. When under the impugned Rule, the Government assumed to itself the power to compulsorily retire a permanent government servant after ten years of qualifying service, the Courts act of striking that Rule as unconstitutional is the law which appeared on the scene, not only to break the presumption of constitutionality but to declare it void..........

In this regard, it would be appropriate to refer to decision rendered in the case of Kesho Ram and Co. and Others etc. Vs. Union of India (UOI) and Others, , wherein a three-Judge Bench of the Apex Court ruled that once validity of a provision is upheld by Court, all grounds must be presumed to have been considered by the Court and fresh litigation challenging validity of the same provision on some additional grounds would be barred by principle of res judicata.

Tested on the anvil of the aforesaid pronouncement of law, it is clear as crystal that plea of constructive res judicata as raised by the respondents is of no avail in the case at hand, inasmuch as there had never been consideration with regard to the constitutional validity of the Rule and hence, principle of ''might and ought'', in our considered opinion, would not get attracted. Resultantly we repel the aforesaid submission of the Learned Counsel for the respondents.

Presently we shall proceed to deal with next compartment i.e. validity of the Rule. Rule 61 comes under the heading ''Termination or Resignation of Service''. Rule 61 which is under challenge, reads as under:

61. The services of a permanent employee may be terminated by the Managing Committee or Staff Committee of the Bank, after giving three months notice or three months pay in lieu of notice.

Submission of Mr. Shukla and Mr. Mishra, Learned Counsel for the petitioners is that such a Rule offends Article 14 of the Constitution because of its very nature. They have placed heavy reliance on the decision rendered in the case of Delhi Transport Corporation Vs. D.T.C. Mazdoor Congress and Others, , wherein Their Lordships came to hold that such a Regulation confers unguided, arbitrary, unrestricted and uncanalised power without any guidelines on the authorities to terminate the services of the employees without confirming the principles of natural justice and equality as envisaged under Article 14 of the Constitution of India and, therefore, the same is unconstitutional. Their Lordships further held that such a Regulation is meant to be a naked power of hire and fire rule as the authorities have been vested with unguided and arbitrary power to dispense with services of any category of employees. The Apex Court expressed the view that the fundamental rights can ill-afford to be consigned to the limbo of underfined premises and uncertain application as that would be a mockery of them. It was further ruled that before depriving an employee of means of livelihood and his dependents the procedure prescribed for such deprivation must be fair and reasonable under Article 14 of the Constitution of India. Being of this view, their Lordships declared a similar Regulation as constitutionally invalid.

In this context, we may fruitfully refer to a Two-Judge Bench decision rendered in the case of Binny Ltd. and Another Vs. V. Sadasivan and Others, . In the said decision, Their Lordships distinguished and explained the decision rendered in the case of Delhi Transport Corporation (supra). It is worth reproducing paragraphs 26 and 27 of the aforesaid decision as follows:

26. It is important to understand the real dicta laid down in the background of the facts involved therein. The appellant was a public sector undertaking and in that view of the matter it was held that the contract of employment and the service rules which gave absolute and arbitrary power to terminate the service of the employees were illegal. It may be also noticed that the termination clause was referred to in the context of the contract read as a whole and no enquiry was contemplated under the rules even in the case of allegation of misconduct and it was held to be violative of the principles of natural justice. It was also held to be violative of section 23 of the Contract Act as it was opposed to public policy to terminate the services of the employee without conducting an enquiry even on the ground of misconduct. Public-policy principles can be applied to employment in public sector undertakings in appropriate cases. But the same principles cannot be applied to private bodies. There are various labour laws which curtail the power of the employer from doing any anti-labour laws which curtail the power of the employer from doing any anti-labour activity. Sufficient safeguards are made in the labour law enactments to protect the interests of the employees of private sector. The service rules and regulations which are applicable to government employees or employees of public sector undertakings stand on a different footing and they cannot be tested on the same touchstone or enforced in the same manner. Therefore, the decision rendered by this Court in Central Inland case is of no assistance to the respondents in Civil Appeal No. 1976 of 1998 or to the appellant in the civil appeal arising out of SLP (Civil) No. 6016 of 2002.

In the second case also, namely, Delhi Transport Corpn. vs. D.T.C. Mazdoor Congress the appellant was a public sector undertaking and the main controversy was about the term "other authorities" under Article 12 of the Constitution. Both in Central Inland and DTC cases, the decision of a public sector undertaking was under challenge and the question raised was whether the principles of natural justice and fairness were to be applied. It was held that this Court has got jurisdiction to consider this question by invoking the principles of judicial review. But it would be noticed that in both the cases, it was a public sector undertaking coming within the purview of "other authorities" under Article 12 of the Constitution.

In this regard we may usefully refer to the decision rendered in the case of Ajit Kumar Nag Vs. General Manager (P.J.), Indian Oil Corporation Ltd., Haldia and Others, . In the said case, the Apex Court distinguished the case of Delhi Transport Corporation (supra) on the ground as being not applicable inasmuch as Their Lordships were dealing with a fact situation where the employee of a Corporation, namely Indian Oil Corporation Limited was concerned and it was held that Article 311 of the Constitution of India has usual application to the facts of the case. The Apex Court was dealing with Standing Order 20 (vi) of the Certified Standing Orders of the Corporation, which empowered the General Manager, after being satisfied to record reasons in writing that it is neither expedient nor in the interest of security to continue a workman, he may be removed or terminated from service without following the due procedure and read down clause (iii) of the said Standing Order 20. The said provision was assailed to be unconstitutional being violative of Articles 14 and 311 of the Constitution on the ground that the concerned Standing Order namely clause (vi) of Standing Order 20 does not confer a blanket or uncanalised power on the General Manager, inasmuch as sufficient guidelines and safeguards have been provided in the Standing Orders themselves such as the power is conferred on the highest administrative head of the Corporation, eventualities have been specifically and expressly stated in clause (vi) of the Standing Order 20, satisfaction of the General Manager that such an eventuality has arisen, there is stipulation for recording of reasons in writing and furthermore, a right of appeal against the decision of the General Manager is provided. In addition, Their Lordships further expressed the view that any order passed was assailable under Articles 226 and 227 of the Constitution. Quite apart from the above, the Apex Court ruled that a provision which is otherwise legal and valid and intra-vires cannot be declared as unconstitutional or ultra-vires merely on the ground that there is possibility of abuse or misuse of such power. Their Lordships further referred to the decision in the case of Satyavir Singh and Others Vs. Union of India (UOI) and Others, wherein it has been held that taking of appropriate action in exceptional circumstances is a matter of assessment to be made by the disciplinary authority and must be judged in the light of the circumstances then prevailing. The challenge in the said case was to dispensation with the enquiry in the Second Proviso to Article 311(2) of the Constitution. It is worth noting here, Their Lordships repelled the submission that the power conferred on the General Manager was against public policy and in that context, distinguished the law laid down in the decisions rendered in the case of Central Inland Water Transport Corporation Limited and Another Vs. Brojo Nath Ganguly and Another, and Delhi Transport Corporation (supra). We may reproduce herein below paragraph 52 which deals with the same:

52. In our opinion, the ratio laid down in Central Inland Water Transport Corpn. Ltd. vs. Brojo Nath Ganguli and in Delhi Transport Corpn. vs. D.T.C. Mazdoor Congress is not relevant or applicable to the case on hand. In those cases, power had been conferred on the authority to dispense with services of a permanent/confirmed employee. this Court, therefore, held that such a provision cannot be said to be in consonance with law. In Brojo Nath Ganguly the Court observed that the provision was against public policy reflected in section 23 of the Contract Act, 1872 and the provision was described as a Henry VIII clause.

We have noted the aforesaid two decisions as an ancillary contention was raised that the Delhi Transport Corporation (supra) would not be applicable to a rule governing the conditions of service of the employees of a Federation, may be a Bank, which is a Co-operative Society in essentiality. To appreciate the aforesaid submission, it is imperative to refer to the decision rendered in the case of Narendra Pal Singh vs. M.P. Dugdh Mahasangh, Bhopal, 1993 MPLJ 786 wherein the Full Bench expressed the view as under :

2. Whether the two co-operative societies, registered u/s 9 of the Act, are in essence, instrumentalities and agencies of the State and, consequently, amenable to writ jurisdiction of the High Court, is the question to be decided. If the answer to this question is in the negative, whether the High Court can issue an appropriate writ, direction or order against the co-operative society or its officers who act in violation of the Act or the Rules or the bye-laws and/or fail to discharge statutory public duty, is also the question, which we have been called upon to answer in this reference."

"31. In the result, we dispose of the reference made in the two petitions by giving our answer to question No. 1 in negative. However, we answer question No. 2 as follows :

Even if the respondent/societies cannot be characterized as ''State'' within the meaning of Article 12 of the Constitution and as such, are not amenable to writ jurisdiction, if the society or its officers act in violation of statutory provisions and/or fail to discharge statutory public duty, a writ would lie for enforcement of statutory obligations and public duty.

In this regard, we also refer with profit to the decision rendered in the case of Dinesh Kumar Sharma vs. M.P. Dugdha Mahasangh Sahakari Maryadit and another, 1994 MPLJ 692 = 1994 RN 400 wherein the Division Bench after referring to section 55(1) of the Act expressed the view as under:

12. A Full Bench of this Court in the case of Sewaram Totaram Parigir vs. Board of Revenue and another, 1983 MPLJ 645 - 1983 JLJ 627 = 1983 RN 353, after relying on a decision of the Supreme Court in the case of The Co-operative Central Bank Ltd. (supra) and considering the provision of section 55 of the Act, said that when the rules framed are approved u/s 55(1) by the Registrar relating to the terms of the employment and working conditions of the workers, such rules are statutory rules and cannot be equated with bye-laws framed for internal management and working of the society. It is well settled that where a statute authorises either a Government or any other authority to frame rules and rules are so framed, the rules will have the force of statute. The rules framed u/s 55(1) of the Act will, therefore, be statutory.

this Court in cases of Sohanlal vs. Guna Central Co-operative Bank Ltd. and others, reported in 1992 RN 258; and Kashi Prasad vs. District Central Co-operative Bank Ltd. Tikamgarh and others reported in 1992 (1) MPJR 362, following the decision of the Full Bench in Sewaram Totaram Pargir''s case (supra) restated the view that the rules framed u/s 55(1) of the Act by the Registrar have a statutory force.

In view of the aforesaid, we are of the considered opinion as the rules have statutory force, the Constitutional validity can be gone into and the ratio of Delhi Transport Corporation (supra) that has been distinguished in the case of Binny Ltd. (supra) could not be attracted to the present case. We are also of the considered opinion that the decision rendered in the case of Ajit Kumar Nag (supra) is also distinguishable since the law laid down in Delhi Transport Corporation (supra) was neither relevant nor applicable in that case, power had not been conferred on the authority to dispense with the services of a permanent/confirmed employee. At this stage, it would not be out of place to state that a judgment is not to be read as a statute. It must be construed upon reading the same as a whole and the ratio therefrom is required to be culled out from reading the same in its entirety and not only a part of it. This view of ours gets fortified from the decisions rendered in the case of Ramesh Chand Daga Vs. Rameshwari Bai, , Zee Telefilms Ltd. and Another Vs. Union of India (UOI) and Others, and P.S. Sathappan (Dead) by Lrs. Vs. Andhra Bank Ltd. and Others, . The ratio of the Delhi Transport Corporation (supra) would be applicable to the case at hand and once the dictum laid therein is applied, the rule has to pave path of vitiation, there being no other option. Resultantly the rule has to be declared invalid, that being an inevitable fall out, and we so do.

Now we shall proceed to deal with the sequitor of the invalidation of the said rule. Submission of Mr. Jha, learned Senior Counsel is that the initial appointment being invalid, the confirmation is totally inconsequential and ipso facto, it cannot be said that unless there is a misconduct, the employee cannot be removed. The Learned Counsel for the respondents has commended us to the decision rendered in the cases of Kendriya Vidyalaya Sangathan and Others Vs. Ajay Kumar Das and Others, and Union of India and Others Vs. O. Chakradhar, . In the case of Ajay Kumar Das (supra), employees were appointed by one K and their services were terminated and their continuation in service itself was under a cloud and in an enquiry serious lapses had been noticed in the matter of recruitment. The orders issued after the termination of services of K were not valid and, therefore, the question of observance of principles of natural justice would not arise. Their Lordships took note of the fact that taking advantage of the interim order, persons were appointed.

In the case of O. Chakradhar (supra), in 1995, the Railway Recruitment Board had issued an advertisement for recruitment to the post of Junior Clerk-cum-Typist, after three years the Railway Board found that the candidates had not been subjected to Type-writing test which was the essential requirement and that there were also certain irregularities in the conduct of examination. After considering the matter totally and taking into account the report of CBI and serious nature of irregularities, the Railway Recruitment Board took a decision to cancel the entire panel and to terminate the services of all the candidates appointed. In that context, the Apex Court came to hold that in view of the nature and the extent of illegalities and irregularities committed in conducting a selection have to be scrutinized in each case so as to come to a conclusion about the future course of action to be adopted in the matter. If the mischief placed is so widespread and all-pervasive, affecting the result, so as to make it difficult to pick out the person who have been unlawfully benefited or wrongfully deprived of their selection, it will neither be possible nor necessary to issue individual show-cause notices to each selectee. The only way out would be to cancel the whole selection. Their Lordships expressed the view that the decision rendered in the case of Krishan Yadav and another Vs. State of Haryana and others, applies to the case at hand inasmuch as the irregularities committed in the selection and performance of test vitiates the whole section and under that circumstances the principles of natural justice is not applicable. Their Lordships also expressed the view that it is difficult to separate the cases of some of the candidates from the rest, even if there may be some.

At this stage, it is condign to state that in both the cases, Their Lordships were not dealing with cases of permanent employees and the factual matrix was different but, a pregnant and indubitably an unavoidable one, sixty-four thousand million dollar question that emerges for consideration is whether in a given case when there are serious and enormous allegations as regards the irregularities that had entered into the marrows of mass scale appointments, would it be seemly and appropriate to direct reinstatement of the employees because of the invalidation of the rule in question, solely on the foundation that recourse was taken to the said rule. It cannot be forgotten that a confirmed employee has a status, a permanent/ confirmed employee cannot be thrown by issuing notice and, therefore, such a rule has to be struck down. Yet, a simple answer to the posed question would be an anathema to the basic conception of law, for law does not countenance anarchy, chaos, fraud and throwing of all the procedures to the winds. If the initial entry is absolutely obnoxious and unsustainable and further the confirmation is not in consonance with the rules, the issue Would be whether there should be an enquiry only on the ground of misconduct or there can be an enquiry with regard to the entry and confirmation. An unlawful benefit obtained in an erroneous manner, if forms the infrastructure or the plinth the superstructure pyramided or incremented on the same is bound to collapse because the base is basically ruinable. this Court cannot be oblivious of the fact that serious allegation have been made with regard to the selection process. They may be right or wrong, they may be true or incorrect, they may have substance or they are sans substance, they may be proven or may not be proven, but it cannot be straightway said that as the petitioners were confirmed, their orders of termination have to be lanceted because the rule has been declared ultra-vires or unconstitutional. This is not one of those cases where an employee, who had become permanent and there is no allegation with regard to status, has been thrown overboard by taking recourse to the Henry VIII clause under the service rules or regulations. In the case at hand, number of allegations have been made with regard to initial appointments as well as confirmation. Thus, we do not think it appropriate to quash the orders of termination and direct the reinstatement of the petitioners. Once we do not pave the aforesaid path, the issue would be what relief can be granted to the petitioners.

We have stated hereinbefore, there are allegations and hence we cannot quash the orders of termination and direct reinstatement. The controversy cannot end there. As is evincible, the Co-operative Tribunal has remitted the matter to the Additional Registrar, Co-operative Societies on certain grounds. While not directing reinstatement, we cannot ignore submission of Learned Counsel for the petitioners that the principles of natural justice would be attracted because of the complexity of the case. We have already stated that in the case of Kendriya Vidyalaya Sangathan and Others Vs. Ajay Kumar Das and Others, and Union of India and Others Vs. O. Chakradhar, , Their Lordships were not dealing with the cases of permanent/ confirmed employees and hence, expressed the view that the principles of natural justice would not be applicable. The present fact situation frescoes a different picture. Hence, we are inclined to hold that the principles of natural justice would be applicable. However, we are not inclined to accept the submission that because of noncompliance of principles of natural justice, the termination orders would pave the path of destruction, for principles of natural justice are neither rigid nor immutable. It is not to be regarded as an unruly horse. Doctrine of audi-alteram partem has to have acceptable flexibility and cannot be imprisoned in the stonewalls of total rigidity. It cannot have a mechanical application. It has to sub-serve a purpose. A pragmatic approach has to be read into the fundamental conception of natural justice rather than Kantian rigorism. The Court of law cannot totally close its eyes to the practical parameters while applying the said principle. Be it noted, we are not expressing the view that following of the principles of natural justice would be an exercise in futility, a Sisyphean endeavour. We have also not expressed any opinion with regard to the stand and stance of the petitioners that they have been wrongly appointed and seemly confirmed. We have not invoked our extra-ordinary and equitable jurisdiction under Arts. 226 and 227 of the Constitution of India for quashing of the termination orders. We are inclined to think that in the present case, three principles have to be invoked, namely, doctrine of striking of balance, doctrine of post-decisional hearing and doctrine of relation back. The first one, we are disposed to think, is necessitous so that the parties are entitled to put their respective stand before the forum to which we are going to remit the matter. The second doctrine would be applied so that the cause of justice would be sub-served since all aspects can be scanned through by the forum. The third principle we are invoking for protecting the interest of the petitioners. To elaborate : if the forum to which we are going to remand the matter, arrives at the conclusion that the appointments and confirmations were regular, the petitioners shall be relegated to their earlier status which can include their continuity in service.

As far as consequential benefits are concerned, all other spectrums would follow, the doctrine of relation back. As far as grant of backwages is concerned, without closing the shutters, we leave it to the discretion of the forum. Be it reiterated, we have not expressed any opinion and left it to the adjudicating authority for use of its discretion. A criticism has been advanced by the Learned Counsel for the petitioners that the Tribunal should not have remanded the matter to the Additional Registrar. True it is, limited prayer has been made for quashing of the same and for adjudication of the matter by this Court. We have already held the rule as unconstitutional and, therefore, the said rule does not become remora for the Tribunal to enter upon the lis. The Tribunal is the final fact finding authority. It can collect the material, delve into the evidence, dwell upon the grievance, scan the rules, peruse the records and also look into all other possible facets to find out how the petitioners had entered into service and how they had been confirmed. In view of the aforesaid, we think, the forum to which the matter is to be remanded is the M.P. Co-operative Tribunal.

Ex-consequenti, we proceed to enumerate our conclusions in seriatim as under:

(i) The Rule 61 of the Staff Selection Rules is ultra-vires and unconstitutional.

(ii) The order dated 4-2-2005 passed by the Tribunal vide Annexure P4 is quashed.

(iii) The controversy is remanded to the M.P. Co-operative Tribunal for adjudication with regard to the status earned by the petitioners.

(iv) The M.P. Co-operative Tribunal shall finalise the lis within a period of four months from the date of order. The Tribunal shall not be influenced by the fact that this Court has not directed reinstatement and invoked the concept of post-decisional hearing. The Tribunal shall independently decide the lis in question keeping in view the law in the field.

The writ petition is allowed to the extent indicated above. There shall be no orders as to costs.