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Nayagarh Cooperative Central Bank Ltd. And Another v. Narayan Rath And Another
Factual and Procedural Background
Respondent 1, Narayan Rath, had been functioning as Secretary of the Nayagarh Cooperative Central Bank Ltd. since 25 May 1955. His appointment was resolved in a meeting presided over by the Registrar of Cooperative Societies, who thereafter took no steps either to regularise or to annul the appointment for more than thirteen years.
On 21 August 1968, the Registrar suddenly issued an order disapproving Rath’s appointment on two grounds: (i) absence of the Registrar’s prior approval and (ii) alleged lack of requisite qualifications. Relying on that disapproval, the Bank’s President terminated Rath’s services on 26 August 1968, and the Board of Management ratified the termination on 4 September 1968.
Rath filed Writ Petition OJC 863 of 1968 before the Orissa High Court on 28 August 1968, challenging both the Registrar’s disapproval and the consequent termination. By judgment dated 9 February 1970, the High Court set aside both orders. The Bank and its President (the appellants) obtained special leave and filed the present appeal before the Supreme Court.
Legal Issues Presented
- Whether a writ petition under Article 226 of the Constitution is maintainable against a cooperative society registered under the Cooperative Societies Act.
- Whether the Registrar of Cooperative Societies could, after acquiescing for thirteen years, validly disapprove Rath’s appointment as Secretary, and whether the Bank’s subsequent termination order was therefore lawful.
Arguments of the Parties
Appellants (Nayagarh Cooperative Central Bank Ltd. and its President)
- The High Court erred in holding that a writ petition lies against a cooperative society; Article 226 is not attracted to such bodies.
- It was stated from the Bar that Rath has since been removed after a disciplinary enquiry and has filed another writ petition, indicating that the current dispute should not determine the larger issue of writ maintainability against cooperative societies.
Respondent 1 (Narayan Rath)
The opinion does not contain a detailed account of the respondent’s legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court deemed it unnecessary to resolve the broad constitutional question of writ maintainability against cooperative societies. It observed that, in substance, Rath’s challenge was directed against the Registrar, a statutory authority acting under the Cooperative Societies Act; hence the writ was maintainable on that limited footing.
On the merits, the Court focused on the Registrar’s prolonged acquiescence. Having presided over the very meeting that appointed Rath and having allowed him to function for over thirteen years, the Registrar could not belatedly invalidate the appointment. Such retroactive disapproval was characterised as undesirable and legally unsustainable. Because the President’s termination order was entirely derivative of the Registrar’s invalid disapproval, it too was null.
The Court expressly cautioned that the High Court’s judgment should not be treated as precedent on the broader issue of writs against cooperative societies, leaving that question open for future determination.
Holding and Implications
APPEAL DISMISSED; High Court’s decision affirmed.
The Supreme Court upheld the quashing of both the Registrar’s disapproval order and the Bank’s termination order. Costs of the appeal were awarded to Respondent 1. The judgment carries limited precedential value: it does not settle whether cooperative societies are amenable to writ jurisdiction, confining its effect to the specific statutory conduct of the Registrar in this case.
Y.V Chandrachud, J.— This is an appeal by special leave against the judgment dated February 9, 1970 of the High Court of Orissa, setting aside the order dated August 21, 1968 passed by the Registrar of Cooperative Societies and the order dated August 26, 1968 passed by the President of the Nayagarh Cooperative Central Bank Ltd. The Bank is the first appellant while its President is the second appellant in this appeal. Respondent 1, Narayan Rath, has filed the writ petition in the High Court asking that the aforesaid orders removing him from service should be set aside. Respondent 2 is the Registrar of Cooperative Societies, Bhubaneshwar, Orissa.
2. Respondent 1 was functioning as a Secretary of Nayagarh Cooperative Central Bank from May 25, 1955 till May 13, 1968. On August 21, 1968, the Registrar passed an order disapproving the appointment of Respondent 1 as secretary of the Bank on the ground that he was functioning as a secretary without his approval and that he was not qualified to hold the post of a secretary. On August 26, 1968, the President of the Bank issued an order terminating the services of Respondent 1 and that order was ratified by the Board of Management of the Bank on September 4, 1968. On August 28, 1968, the respondent filed a writ petition (OJC 863 of 1968) challenging the order whereby his services were terminated. The High Court having allowed that writ petition, the appellants have filed this appeal by special leave of this Court.
3. The learned Advocate-General appearing on behalf of the appellants contends that the High Court was in error in taking the view that a writ application under Article 226 of the Constitution can lie against a Cooperative Society registered under the Cooperative Societies Act. This is a question of far-reaching importance, but in view of the facts of this case we do not think that it is necessary to decide it. As stated above, Respondent 1 was appointed as a secretary of the Bank on May 25, 1955 and the appointment was made in a meeting over which the Registrar of Cooperative Societies had himself presided. Beyond informing the Bank from time to time that appropriate steps may be taken to terminate respondent 1's services, nothing at all was done by the Registrar either for regularising the appointment of Respondent 1 or for removing him from service. It was thirteen long years after the date of appointment that on August 21, 1968 the Registrar issued an order disapproving the appointment of Respondent 1 as secretary of the Bank. It was in pursuance of that order that the President issued an order five days later terminating the services of Respondent 1. The President's order was ratified by the Board of Management on September 4, 1968.
4. The writ petition filed by Respondent 1 could succeed, in our opinion, on the narrow ground that he had been permitted to function for over thirteen years as secretary of the Bank and that his appointment as Secretary was decided upon in a meeting over which the Registrar of Cooperative Societies had himself presided. The writ petition in substance is directed not against any order passed by the Cooperative Bank but against the order passed by the Registrar disapproving the appointment of Respondent 1 as secretary of the Bank. It was not open to the Registrar, in our opinion, to set aside Respondent 1's appointment as a secretary after having acquiesced in it and after having for all practical purposes, accepted the appointment as valid. It is undesirable that appointments should be invalidated in this manner after a lapse of several years.
5. 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.
6. We would like to observe that the judgment of the High Court should not be treated as an authority for the proposition that a writ petition is maintainable against a cooperative society. That question shall have to be decided by the High Court as and when it arises in the light of the decisions of this Court.
7. The learned Advocate-General made a statement at the Bar that Respondent 1 has been removed from service after a disciplinary enquiry but that he has challenged that order by filing a writ petition in the High Court of Orissa. If that be so the question as to whether a writ application can be maintained against a cooperative society can very appropriately be decided in the proceeding which is pending before the High Court. We will only repeat that the High Court will not treat its judgment of February 9, 1970 as a precedent on that question.
8. With these observations, we uphold the ultimate decision of the High Court, though for different reasons, and dismiss this appeal. Appellant 1 will pay Respondent 1 the costs of this appeal.
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