Urban Co‑operative Banks Amenable to Article 226 for Enforcement of Statutory Service Rules; No Extension Beyond SRO 233 Retirement Age Without Government Amendment
1. Introduction
In MOHAMMAD SHAFI RESHI v. UNION TERRITORY OF J AND K (GOVT COOPERATIVE DEPARTMENT) AND ORS
(Jammu & Kashmir and Ladakh High Court, Srinagar; decided on 20-07-2026),
the petitioner—an employee of the Urban Cooperative Bank Limited, Anantnag (UCB)—invoked
Article 226 to challenge orders dated 27 February 2025, 28 February 2025
and 05 March 2025 relieving him from the post of GM/CEO and withholding retirement benefits.
The petitioner had superannuated at 58 years on 31 March 2021 under SRO 233 of 1988,
but the Bank’s Board of Management purported to grant him an extension up to 31 March 2026.
After supersession of the Board and appointment of a Board of Administrators under
Section 29(4) of the Jammu and Kashmir Co-Operative Societies Act, 1989,
the petitioner was relieved mid-extension.
The case raised three connected issues: (i) whether a writ is maintainable against a co-operative bank for a service dispute,
(ii) whether the petitioner had a legal right to continue beyond 58 years on the strength of the Board’s extension order,
and (iii) the extent to which the Court could examine disputes relating to the validity of supersession/management of the co-operative society
given Section 70 of the 1989 Act.
2. Summary of the Judgment
-
Maintainability upheld: Even if UCB is not “State” under Article 12,
it performs public functions (banking; accepting public deposits under RBI regulation) and is therefore
amenable to writ jurisdiction under Article 226 as “any person or authority”.
-
But petition dismissed on merits: The petitioner’s continuance beyond 31 March 2021
had no legal foundation because Rule 13(1) of SRO 233 of 1988 fixes retirement at 58 years,
and the Board had no competence to grant extension absent a government amendment to the statutory rules.
-
Section 70 restraint: The Court declined to decide, in writ jurisdiction,
the broader controversy about the competence of the Registrar to supersede the Board/appoint administrators under Section 29(4),
holding that disputes “touching the constitution or management” of a co-operative society are to be referred to the Registrar under Section 70.
3. Analysis
3.1 Precedents Cited
(a) “Ghulam Rasool Dar v. J&K State Cooperative Bank Ltd. & Anr.”
This decision was the respondents’ principal authority to resist maintainability. It held that a co-operative bank is not “State” under
Article 12 and that pure service disputes governed by service rules adopted under bank bye-laws (treated as contractual and not “law”)
are generally not amenable to writ jurisdiction.
The present judgment treats Ghulam Rasool Dar as factually distinguishable:
here, retirement and extension were governed not merely by bye-laws but by statutory rules—SRO 233 of 1988,
framed under rule-making power and “saved” under the later co-operative law framework.
That statutory anchor supplied the “public law” element missing in the earlier case.
Pradeep Kumar Biswas is invoked (via the discussion in Ghulam Rasool Dar) for the “deep and pervasive control”
test used to determine whether a body is an instrumentality of the State under Article 12.
The High Court does not re-apply the test to finally label UCB as “State”; instead, it pivots to the broader Article 226 inquiry:
a body may be outside Article 12 yet still be within Article 226 if it performs public duties.
This is the judgment’s doctrinal fulcrum on maintainability. The Supreme Court’s articulation—quoted in the judgment—marks the modern shift:
maintainability depends less on “who the respondent is” and more on the nature of the function,
the source of power, and the effect on legally protected rights.
The High Court uses Ajay Vijh to justify a liberal reading of “any person or authority” in Article 226 and to
root jurisdiction in the presence of public law elements.
(d) “Binny Ltd. & Anr. v. V. Sadasivan & Ors., (2005) 6 SCC 657”
Binny Ltd. supplies the conceptual definition of “public function”:
where an entity seeks to achieve a collective benefit for the public (or a section of it) and is accepted as having authority to do so.
The High Court maps this to banking—especially deposit-taking from the public—where trust, depositor protection, and systemic stability
create a public dimension even when the entity is not “State”.
(e) “Mohammad Yousuf Mir & Anr. v. Union Territory of J&K and Ors., JKJ ONLINE 90274”
This Division Bench decision is treated as binding on the substantive service issue:
it holds that the retirement age of co-operative society employees governed by SRO 233 of 1988 can be altered
only by amending the statutory rules, not by ad hoc decisions of the society/management.
The present judgment applies this to conclude that any purported extension beyond 58 is without authority of law,
rendering the petitioner’s “extended tenure” legally unenforceable.
3.2 Legal Reasoning
(i) Maintainability under Article 226: from “status” to “function”
The Court adopts a two-step approach:
-
Article 12 is not determinative for Article 226: Even assuming UCB is not “State”,
Article 226 reaches “any person or authority” when public duties are involved.
-
Banking as a public function: UCB accepts deposits from the public (the Court cites the statutory definition of “banking”
under Section 5(b) of the Banking Regulation Act, 1949) and operates under RBI oversight.
This creates a public-duty element (depositor protection, financial stability, public trust).
Crucially, the Court differentiates contractual service disputes (often non-justiciable in writ)
from enforcement of statutory service norms. It holds the latter supplies the public law content necessary for writ review.
(ii) Statutory service rules prevail over management resolutions
On merits, the Court treats SRO 233 of 1988 as the governing and binding statutory framework.
Under Rule 13(1), retirement occurs at 58 years.
The Board of Management’s resolution/order extending service to 2026 is held ultra vires (beyond competence) and
non-est (void in law).
The petitioner’s “premature relieving” argument therefore fails: one cannot be “prematurely” relieved from a tenure that never had
legal existence under the statutory rules.
(iii) Section 70 channeling: constitutional restraint in co-operative governance disputes
While the petitioner attacked the Registrar’s power under Section 29(4) and the authority of the Board of Administrators,
the Court refuses to adjudicate those governance questions in writ because Section 70 of the Act of 1989
mandates that disputes “touching the constitution or management” of a co-operative society be referred to the Registrar, and bars court jurisdiction.
This is a significant procedural holding: even where writ jurisdiction is otherwise available,
the Court may confine itself to the legality of the impugned service action under statutory service rules and decline to enter
the co-operative “management/constitution” thicket routed by the legislature to the Registrar’s dispute mechanism.
(iv) RBI approval point
The petitioner relied on RBI circular guidance (para 5.4, RBI Circular dated 25 June 2021) to argue that prior RBI approval was mandatory
before removal of the CEO. RBI responded that a notification dated 23 March 2021, issued under
Sections 53A and 56 of the Banking Regulation Act, 1949, exempted certain primary co-operative banks (below the deposit threshold)
from the applicability of the prior-approval regime under Section 35B read with Section 56.
The Court did not base dismissal primarily on the RBI point; instead, it held the petitioner had no legal right to continue after 58,
making the approval debate largely non-dispositive in outcome.
3.3 Impact
-
Broader writ exposure for co-operative banks: The judgment strengthens the proposition that
co-operative banks—especially licensed deposit-taking entities under RBI oversight—may be amenable to Article 226
on a “public function/public duty” analysis even if they are not “State” under Article 12.
-
Clearer line between bye-law contracts and statutory rules: It reinforces a practical litigation divide:
(a) service disputes founded merely on bye-laws/contract may face maintainability objections,
while (b) disputes grounded in statutory rules (like SRO 233 of 1988) are more likely to attract writ scrutiny.
-
Constraints on ad hoc extensions in co-operative institutions: Boards of Management of co-operative societies/banks
are put on notice that retirement-age alterations/extensions require government amendment of statutory rules where such rules apply.
Any contrary “extension” risks being treated as void, exposing both the institution and the employee to uncertainty (including on pay/benefits).
-
Section 70 as a jurisdictional gatekeeper: Parties challenging supersession/administrator appointments
should expect the High Court to direct them toward the statutory dispute-resolution route where the controversy “touches” constitution/management,
even if collateral service relief is sought.
4. Complex Concepts Simplified
- Article 12 (“State”)
-
A constitutional definition used mainly for enforcing fundamental rights. Not every regulated entity is “State”.
Courts apply tests like “deep and pervasive control” (discussed through Pradeep Kumar Biswas).
- Article 226 (“any person or authority”)
-
A broader High Court power than Article 12: writs can issue even against non-State bodies if they perform public duties
or if statutory obligations affecting rights are involved.
- Public function / public duty
-
Activities that serve a public or a significant section of the public and carry responsibilities beyond private contract.
Banking—especially accepting public deposits—often has this character due to depositor protection and financial stability concerns.
- Bye-laws vs statutory rules
-
Bye-laws are typically internal rules of a society and often treated as contractual in character.
Statutory rules (like SRO 233 of 1988) are made under legislative authority and have the force of law.
- Ultra vires / non-est
-
“Ultra vires” means beyond legal power. “Non-est” means treated as void—legally nonexistent.
Here, the Board’s extension beyond 58 was held to be beyond its power and therefore void.
- Section 70 bar (co-operative disputes)
-
A statutory channeling provision: disputes touching the constitution/management of a co-operative society must go to the Registrar,
and courts are generally barred from entertaining suits/proceedings on those disputes.
5. Conclusion
The High Court’s decision has a dual significance. First, it affirms a modern Article 226 approach—guided by
AJAY VIJH v. INDIAN BANKS ASSOCIATION and Ors., 2026 SCC Online SC 1295 and
Binny Ltd. & Anr. v. V. Sadasivan & Ors., (2005) 6 SCC 657—that a co-operative bank engaged in
deposit-taking and regulated banking can be subject to writ jurisdiction as a public-function body, even if not “State” under Article 12.
Second, on merits, it strictly enforces statutory service norms:
under Rule 13(1) of SRO 233 of 1988, retirement at 58 cannot be bypassed by management resolutions,
and any extension without government amendment is void—consistent with
Mohammad Yousuf Mir & Anr. v. Union Territory of J&K and Ors., JKJ ONLINE 90274.
The outcome—dismissal of the petition—turns on the absence of a legally enforceable right to continue beyond statutory superannuation,
while simultaneously clarifying that statutory-rule-based service claims against deposit-taking co-operative banks may still be justiciable in writ,
and that co-operative governance disputes are often routed to the Registrar under Section 70.