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CASE NO.: Appeal (civil)  5279 of 2006

PETITIONER: U.P. Co-op Spg. Mills Federation Limited and another

RESPONDENT: RAM PRATAP YADAV & ORS

DATE OF JUDGMENT: 05/10/2007

BENCH: H.K. Sema & Altamas Kabir

JUDGMENT: J U D G M E N T

Altamas Kabir,J.

       This appeal by way of special leave is directed  against the judgment and order dated 18th January, 2005  passed by the High Court of Judicature at Allahabad in  Civil Misc. Writ Petition No. 51699 of 2000, whereby the  order challenged in the writ petition was quashed and  the writ petition was allowed.

       As will appear from the materials on record, the  respondent No. 1 herein, Shri Ram Pratap Yadav, was  appointed as Secretary/General Manager of the Mau-Aima  Sarkari Katai Mills Limited at Mau-Aima in Allahabad on  24th January, 1990 by the U.P. Co-operative Spinning  Mills Federation Limited (hereinafter referred to as  \023Federation\024), which is the apex body of various Co- operative Spinning Mills in the State of Uttar Pradesh.    During his tenure as such General Manager of the Mau- Aima Spinning Mill various complaints were received  against him in regard to serious financial  irregularities alleged to have been committed by him.  A  charge-sheet containing 15 charges was served on him, of  which the Enquiry Officer found charges 1, 4, 11 and 14  to have been fully proved, while charges 3, 8, 9, 12 and  13 were held to have been partly proved.   The other 6  remaining charges, were held not to have been proved.    The enquiry report was thereafter placed before the  Disciplinary Authority, which, while confirming the  report of the Enquiry Officer, omitted charge No. 8  holding that the same had not been proved either fully  or partly.

       On the basis of his findings the Disciplinary  Authority removed the respondent No. 1 from the service  of the U.P. Co-operative Spinning Mill Federation  Limited by his order dated 9th May, 1996.   The order of  his removal was challenged by the respondent No. 1  before the Appellate Authority after three years on 7th  July, 1999.  The said appeal filed by the respondent  No.1 was ultimately dismissed on 11th July, 2000.

       It may, however, be stated that the respondent No.  1 had challenged his removal by way of a writ petition  in 1996 and the same was disposed of with leave to make

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a representation before the concerned authority of the  Federation.  Subsequently, he filed Civil Misc. Writ  Petition No. 51699 of 2000 challenging the order dated  9th May, 1996 by which he was removed from the service of  the Federation.

       The main contention of the respondent No.1/Writ  Petitioner was set out in paragraphs 14, 15, 16 and 17  of the writ petition which have been extracted in the  judgment of the Allahabad High Court impugned in the  instant proceedings and are also re-produced hereinbelow  for the sake of reference :-

\02314. That before dispending with the  services of the petitioner no approval of  the U.P. Co-operative Institutional  Service Board as envisaged by Regulation  87 read with Section 84 of U.P. Co- operative Societies Employees Service  Regulation, 1975 has been obtained.

15.     That the U.P. Co-operative  Institutional Service Board has been  established by means of a notification  dated 4.3.1972 under Section 122(1) of  the U.P. Co-operative Societies Act, 1965  conferring power upon the U.P. Co- operative Industrial Service Board with  regard to employees of the categories of  co-operative societies specified in the  said notification.

16.     That the aforesaid notification  covers \023apex level societies\024.  The apex  level society are defined under Section  2(1-4) of the 1965 Act as including co- operative societies whose membership  includes at least one other Central Co- operative Society, whose area of  operation covers the whole of U.P. and  whose primary object is to facilitate the  operation of co-operative society  affiliated to it.  For convenience  Section 2(a-4) of the 1965 Act is  extracted below:

2(a-4) \023Apex society\024, \023Apex level  society\024 or \023State level co-operative  society\024 means \026

(1)     U.P. State Co-operative  Land  Development Bank Ltd. Lucknow;

(2)     U.P. Co-operative Bank Ltd.,  Lucknow;

(3)     U.P. Co-operative Federation Ltd.,  Lucknow;

(4)     Pradeshik Co-operative Dairy  Federation Ltd., Lucknow;

(5)     U.P. Co-operative Union Ltd.,

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Lucknow;

(6)     U.P. Upbokta Sahkari Sangh Ltd.,  Lucknow;

(7)     U.P. Co-operative Sugar Federation  Ltd.

(8)     U.P. Cane Unions Federation Ltd.,  Lucknow;

(9)     U.P. Industrial Co-operative  Association Ltd., Kanpur; or

(10)    Any other central co-operative  society fulfilling the following  conditions:-

(i)     it includes in its membership at  least one other central co-operative  society in the same time of business or  trade; and (ii)    its area of operation covers the  whole of Uttar Pradesh; and (iii)   its primary object is to  facilitate the operation of the co- operative societies affiliated to it as  ordinary members;

17.     That the termination of service of  the petitioner in the absence of approval  from the Co-operative Institutional  Service Board is totally without  authority and illegal.\024

     As will appear from a reading of the aforesaid  paragraphs, his service conditions were said to be  governed and regulated by the U.P. Co-operative  Societies Employees Service Regulations, 1975, which  came into effect in the State of U.P. upon publication  in the U.P. Gazette Extraordinary dated 6th January,  1976. It was the petitioner\022s case that Regulation 87 of  the said Regulations made it incumbent for the concerned  co-operative societies to impose major penalty only with  prior concurrence of the U.P. Co-operative Institutions  Service Board.  For the sake of reference Regulation 87  is reproduced hereinbelow:-

\02387. Order imposing penalty under sub- clause (e) to (g) of clause (1) of  Regulation No. 84 shall not be passed  except with the prior concurrence of the  Board\024.              It was the contention of the Respondent No. 1 that  since the Federation had not obtained the prior  concurrence of the aforesaid Board the major punishment  of dismissal imposed on the respondent was void and was  liable to be quashed.                The Allahabad High Court confined itself mainly to  the question regarding non-compliance of the provision

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of Regulation 87 by the Federation, which did not  contest the contention of the Respondent No. 1 in that  regard.  The High Court also held that although it was  pleaded in the writ petition that no proper enquiry had  been held, the same had not been specifically denied,  and consequently such an allegation must be deemed to  have been admitted.         The High Court also recorded that from the orders  of the Disciplinary Authority as well as the Appellate  Authority, it was clear that they did not consider the  defence set out by the respondent No. 1 and merely  concurred with the report of the Enquiry Officer.  On  the aforesaid findings, the Allahabad High Court allowed  the Writ Petition and quashed the order of removal from  service impugned in the Writ Petition.   On the strength  of the judgment and order of the High Court the  respondent No. 1 was reinstated in service on 3rd  December, 2005 and he is continuing to work with the  Federation since his reinstatement.

       The Federation is in appeal before us against the  said judgment and order of the Allahabad High Court.                 On behalf of the appellant it has been submitted  that the High Court had wrongly proceeded on the basis  that the services of the Respondent No. 1 were governed  by the U.P. Co-operative Societies Employees Service  Regulations 1975 which contains Regulation 87 referred  to hereinabove.                It was submitted that at the first meeting of  Committee of the Management of the Federation held on 4th  March, 1983 Agenda No. 10 was included to consider the  adoption of Service Rules, Medical and other allowances  as well as advances to the staff of the Federation.   In  the minutes of the said meeting the Resolution adopted  in respect of the said Agenda was recorded as follows :

\023It is \023Resolved that till the Federation  is able to frame its own Service Rules,  T.A., Medical, other allowances and  advances rules for the Staff of the  Federation, the rules prevailing in this  direction in U.P. State Textile  Corporation Ltd. may be adopted as they  are.\024

       Accordingly, the service Rules of the employees of  the Federation were taken out of the purview of the 1975  Regulations and were brought under the Rules of the U.P.  State Textile Corporation Ltd. from 4th March, 1983.

       Under the said Rules of the U.P. State Textile  Corporation provision has been made in Rule 4 for  imposition of penalties.  Clause B thereof indicates the  major penalties, which could be imposed on an employee,  which include removal from service, which would not  ordinarily be a disqualification for future employment.    The said rules also provide for dismissal, which would  be a bar against future employment.         Rule 14 sets out the procedure for imposing major  penalties and Rule 21 provides for appeal that an  employee may file against an order imposing upon him any  of the prescribed penalties, within one month from the  date of the communication of the order appealed against.

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       It was submitted that a glance at the enquiry  report would indicate that the enquiry had been held  fairly and upon offering sufficient opportunity to the  respondent to meet the charges brought against him and  on consideration of the materials on record the Enquiry  Officer held that some of the charges had been fully  proved against the respondent and that some of the  charges had been partly proved against him.  The Enquiry  Officer also recorded that the remaining charges had not  been proved.   The enquiry report was placed before the  Disciplinary Authority, which disagreed with the finding  of the Enquiry Officer as far as charge No. 8 was  concerned, and, accordingly, the said charge was also  held not to have been proved against the respondent.  It  was submitted that the High Court, without discussing  the enquiry report or the order passed by the  Disciplinary Authority, simply made an observation that  there was no specific denial of the averments made in  the writ petition in that regard.   On the other hand,  it was pointed out that such an allegation had been  specifically denied in paragraph 8 of the counter  affidavit filed on behalf of the respondent Nos. 3 to 6  before the Allahabad High Court and it was categorically  stated that the termination order had been passed after  due examination of relevant materials and after offering  full opportunity to the respondent herein.   It was  submitted further that the same averments had been  reiterated in paragraph 9 of the counter affidavit,  which the High Court appears to have overlooked.       

       It was, therefore, urged that since the order of  the High Court was on the understanding that the 1975  Regulations applied in the petitioner\022s case, the same  was passed on mis-application of the law governing the  service conditions of the respondent and the same was,   therefore, liable to be set aside.

       Mr. Shekhar, learned senior counsel appearing for  the respondent, based his submissions on the  understanding that it was the 1975 Regulations which  were applicable to the respondent and that the High  Court did not commit any error in holding that in the  absence of prior concurrence from the Board, in terms of  Regulation 87, the order of removal from service was  erroneous and was liable to be quashed.

       Mr. Shekhar submitted that the notification dated  16th October, 1981, by which textile mills had been  excluded from the purview of the 1975 Regulations, had  not been brought to the notice of the High Court, and,  in any event, the same did not refer to spinning mills,  such as Mau-Aima Spinning Mill, where the respondent had  been posted as Secretary/General Manager after his  appointment by the Federation.

       Mr. Shekhar sought to make a distinction between  \021spinning mills\022 and \021textile mills\022 and submitted that  notwithstanding the aforesaid notification dated 16th  October, 1981, spinning mills continued to remain within  the purview of the 1975 Regulations and the High Court  had, therefore, rightly held, that in the absence of  prior concurrence of the Board, the order removing the  petitioner from service had been passed without  jurisdiction.

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       On a careful consideration of the submissions  advanced on behalf of the parties and the materials on  record, it appears to us that had the notification dated  16th October, 1981, and Minutes of the first meeting of  the Committee of the Management of the Federation held  on 4th March, 1983, been placed before the High Court,  the High Court may not have proceeded on the  understanding that the 1975 Regulations applied to the  respondent and that the order of removal from service  passed without prior concurrence of the Board, was in  violation of the said Regulations and could not,  therefore, be sustained.

       The Notification dated 16th October, 1981, issued by  the State Government makes it quite clear that co- operative textile mills were to be excluded from the  purview of 1975 Regulations.  The subsequent resolution  adopted by the Federation on 4th March, 1983 made the  position even more clear by resolving that till the  Federation was able to frame its own service Rules, the  Rules prevailing in the U.P. State Textile Corporation  were to be adopted as they were.

       In other words, the Regulations of 1975 were not to  apply to the employees of the Federation from 4th March,  1983.   However, Mr. Shekhar had taken the stand that  notwithstanding the notification of 16th October, 1981,  the 1975 Regulations continued to apply to spinning  mills since only co-operative textile mills had been  excluded from the operation of the 1975 Regulations.   Mr. Shekhar invited us to make a distinction between  spinning mills and textile mills, which we are unable to  appreciate, since basically spinning mills and textile  mills are complementary to each other. In our view,  \023spinning mills\024 would also come under the description  of \023textile mills\024.    

       We have no hesitation, therefore, in agreeing with  the submissions made on behalf of the appellant that the  service of the respondent was governed not by the 1975  Regulations but by the Rules of the U.P. State Textile  Limited.   The question of compliance with the  provisions of the Regulations which provide for  obtaining prior concurrence of the Board, would not  arise in the instant case.   It is unfortunate that  neither the Notification of 16th October, 1981 nor the  Minutes of the Meeting of Federation held on 4th March,  1983 had been brought to the notice of the High Court by  the appellant, but since the same has been brought to  our notice, we cannot allow the erroneous application of  the 1975 Regulations to continue.

       We, therefore, allow the appeal and set aside the  order of the High Court impugned in the appeal.  We,  however, make it clear that no recovery shall be made  from the respondent on account of his services after  reinstatement.

       Having regard to the peculiar facts of this case,  the respective parties will bear their own costs.