(1) The petitioner was working as branch manager of the jammu andkashmir bank limited, hyderabad. While so, a charge - sheet containing 11 charges was framed against the petitioner and the petitioner was asked to show cause. The petitioner submitted his explanation on 12 - 1 - 1984 denying the charges. An enquiry officer was appointed and he conducted the enquiry. One charge was dropped and two charges were held partly proved. On the basis of the said findings of the enquiry officer, a second show - cause notice was issued by the bank to the petitioner on 16 - 5 - 1984 calling upon him to show cause why he should not be dismissed from service. The petitioner submitted his explanation in june, 1984. But the disciplinary authority passed an order dated 7 - 6 - 1985 accepting the recommendations of the enquiry officer and holding that the petitioner deserved dismissal from service in view of the findings as well as the past record and conduct of the petitioner where he was awarded punishment on the ground of proved case of embezzlement etc. Against the said order of dismissal, the petitioner submitted an appeal before the appellate authority and the said appeal was rejected by an order dated 22 - 5 - 1986. The order of the appellate authority was communicated to the petitioner by the manager of the srinagar branch stating that the appellate authority had rejected his appeal. Questioning the order of dismissal and the rejection of the appeal, the petitioner preferred this writ petition.

(2) The learned counsel for the petitioner raised four points in thiswrit petition. The first submission was that the findings arrived at by the enquiry officer on the charges held proved or partly proved are such that no reasonable person could arrive at such conclusions the second point was that the order of disciplinary authority dated 7 - 6 - 1985 does not give any reasons what - so - ever. The third was that the order of the appellate authority dpes not give any reasons. The fourth was that the punishment of dismissal was passed not only upon the findings against the petitioner in the enquiry but also taking into account the past conduct of the petitioner in relation to an embezzlement charge much earlier and that the past conduct was not the subject matter of the show - cause notice and the petitioner was later exonerated.

(3) The learned counsel for the respondent - bank, while contendingthat the above submissions are not correct, has raised a further question that the jammu and kashmir bank is a company and is not amenable to art. 226 of the constitution of india. The learned counsel has relied upon certain unreported decisions of jammu and kashmir high court holding that a writ does not lie 'against the respondent - bank. He contends that the writ petition is, therefore, liable to be dismissed.

(4) I shall first take up the question of maintainability of the writpetition under art. 226 of the constitution of india.

(5) In recent times, there is considerable mixing up of slightly differentbut overlapping concepts of what is meant by the words 'person' or 'authority' for purposes of art. 226 of the constitution of india and what is meant by 'other authorities' in the definition of 'state' in art. 12 for purposes of giving the benefit of the provisions of part iii of the constitution of india. It is clear that relief under art. 226 could be granted for violation of statutory and also other rights which may not amount to fundamental rights. What is a 'state' for purposes of art. 12 will a fortiori be an 'authority' for purposes of art. 226 but the converse is not always true. In the present case, petitioner is not claiming enforcement of any fundamental right against the respondent bank and so the stricter tests for bringing the bank under art. 12 need not be applied but if the stricter tests are themselves satisfied, the bank will a fortiori be amenable to art. 226 of the constitution of india.

(6) The recent judgment of a division bench of this court inv. Narasinga rao vs. Prudential co - op. Urban bank has explained this distinction between art. 12 and 226 but the judgment is being quoted often by respondents in several cases as deciding that no society or company is amenable to art. 226. It has become necessary to explain the judgment in some detail. In that case, the learned judges, no doubt, held that, on facts, the bank there, which was a society registered under the a. P. Co - operative societies act, was not a 'state' and as the matter related to alleged violation of bye - laws by the society, no directions to enforce the bye - laws could be issued. The learned judges, i may point out, nowhere stated that under no circumstances could a society be a 'state' for purposes of art. 12 nor did they say that if there were mandatory laws or rules or duties of a public nature which bound a society, it would not be subject to art. 226. In fact, they clearly stated :

"it cannot, therefore, be stated as a rule of law that a writ does lie or does not lie, against a co - operative society. It is the nature of the power/function/duty that is decisive."

And stated that if there is a violation of a statutory duty of a public nature, or a wrong quasi - judicial order passed a writ could issue. A. Fortiori, if fundamental rights (say) falling under arts. 14, 16 of the constitution were involved and a society, on facts, is a 'state', this court could issue a writ under art. 226 of the constitution of india. In fact, it was held that in respect of the bank there, "capital is not contributed by the state". In other words, the bank there did not satisfy the tests laid down for being treated as a 'state'. Further, only violation of bye - laws was involved and not breach of any statutoty duties of a public nature. The bench accepted that if there was such a situation, a writ could be issued against the society treated as a 'person', and, in fact, they accepted the principle in t. Gattaiah vs. The commissioner of labour decided by p. A. Choudary, j. And the affirmation thereof by the division bench in idl chemicals ltd. V. T. Gattaiah the division bench in v. Narasinga rao's case (1 supra) has, therefore, clearly accepted that statutory public duties could be enforced even against 'persons' under art. 226. But no writ was issued because the bye - laws of the society being not equivalent to statutory rules or other duties of a public nature, could not be enforced.

(7) Recently the supreme court has had occasion to deal with art. 226more clearly than ever before and decision, in my view, is a clear affirmance of the view in gattaiah's case (2 supra) as confirmed on appeal in that case and as also accepted in v. Narasinga rao's case (i supra) this recent decision of the supreme court is reported in smark vs. V. R. Rudani.

(8) In that case, a public trust was running a college and the pay - scalespayable to the teachers were decided by the vice - chancellor of the university and the college which was affiliated to the university was liable to pay them. The trust refused to pay and closed down the college. Thereupon the teachers chimed monetary benefits on the ground that they were 'continuing in service', in law. The high court allowed the writ petitions filed against the trust. Before the supteme court, the trust argued that it was not amenable to art 226 of the constitution of india. The supreme court held that the employees were entitled to terminial benefits and monetary relief could be granted. Shetty, j. Speaking for the court held that mandamus lay against the college, which was an aided one. Two earlier cases decided by the supreme court were then distinguished. The case in executive committee of vaish degree college vs. Shamli where a suit was filed against the college (which was a registered co - operative society) , was distinguished as a case merely deciding that a decree for reinstatement could not be passed against an employer which was not a statutory body. The case in deepak kumar biswas vs. D p. I was also distinguished as a case of a claim for reinstatement against a private college. It was observed by shetty, j. That it would have been different if the parties in those cases had claimed monetary benefits on the ground that they legally 'continued in service'. A mandamus, could then be issued under art. 226. In other words, it in vaish degree college case (5 supra) which was a 'co - operative society', the parties came by writ and asked for a declaratory relief and consequential monetary relief, the same could be granted under art 226 even though the society was not a 'state'.

(9) The supreme court in smark trust case (4 supra) observed thatthe university ordinance was binding on the college. Though the ordinance issued by the university was not a statute by itself, the same was lawful one and created a public duty on the trust to comply with its terms by paying terminal benefits to the teachers. Shetty j. Observed that if the rights are purely of a private character, no mandamus can issue. If the management of the college is purely a private body with no public duty, mandamus will not be issued. The aided - institutions, like government institutions, discharge public functions by way of imparting education to students. They are subject to rules and regulations of the affiliating university. The activities are closely supervised by the university authorities. Employment in such institutions therefore, is not devoid of any public character. (the evolving indian administrative law by m. P. Jain (1983) p. 266).

(10) The supreme court has pointed out that the law relating tomandamus has made the most spectacular advances. After referring to the prerogative writs in england, the court referred to the british law commissioner s recommendations in 1978, order 53 and the new developments in certiorari, mandamus, declaration and injunction as stated by lord denning (closing chapter p. 122) , and observed that in england mandamus could issue only against 'public authoriti s' but there is no such limitation in india. Shetty, j. Stated :

"art. 226 confers wide powers on the high courts to issue writs in the nature of prerogative writs. This is a striking departure from the english law. Under art. 226 writs can be issued to 'any person or authority'. It can be issued tor the enforcement of any of the fundamental rights and for any purpose."

(emphasis supplied.) jaganratha shetty, j. Then referred to the observations of subba rao, j, in dwarkanath vs. I. T - o and pointed out the distinction between art. 226 and art. 12 mating that the term 'authority' used, in art. 226, in the context must receive a 'liberal meaning' unlike the terms in art. 12, that art. 12 is relevant only for the purpose of enforcement of fundamental rights under art. 32, that art. 226 confers power on the high courts to issue writs for enforcement of the fundamental rights as well as non - fundamental rights. Shetty, j. Finally stated :

"the words 'any person or authority' used in art. 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the state. They may cover any other person or body performing public duty. The form of the body concerned is not vtry much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the persons or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists, mandamus cannot be denied. Here again, we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute,"

I may state here that in narasinga rao's case (1 supra) it was stated that the public duties are to be imposed by statute but the above observations make it clear thrt they need not necessarily be imposed by statute. It was further observed that mandamus is a very 'wide' remedy which must be easily available to reach injustice whenever it is found and that 'technicalities' should not come in the way of granting relief under art. 226. The case in praga tools corporation vs. C. A. Imanuel was also referred to in this context.

(11) Summarising the position under art. 226, it is clear that, apartfrom breach of fundamental rights or statutory rights, a writ could be issued if duties of a public nature are involved. These writs could be issued against 'persons or authorities' even if the authorities are not statutory authorities or instrumentalities of the state. Art. 226 includes any 'person or authority' doing public duties. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body no matter by what means the duty is imposed. The public duty imposed need not be by statute. A relief of declaration that the action of the person or the body is illegal could be given with consequential relief. If the above conditions are satisfied, a writ under art. 226 could issue even against a co - operative society or a private company or a person, and even though these are not 'state' within art. 12. However, a contract of service, could not be enforced against a non - statutory body though a declaration that the termination was unlawful and consequential monetary reliefs could be granted. In fact, in ajai hasia vs. Khalid mujib the body was a 'society' and in central inland water transport corpn. Vs. Brojo nath ganguly the body was a government company, and art. 12 was held satisfied, having regard to these tests. In aisse assn vs. Defence the sainik school 'society' was held to be a 'state'. So is the position in p. K. R. Lyer vs. Union of india which is also a case of a 'society'.

(12) The law as to what is 'state' for purposes of art. 12 for enforcingfundamental rights has, in recent times expanded considerably and is perhaps just settling down. Sukhdev singh vs. Bhagatram may be treated as the starting point of this expansion and particularly the judgment of mathew, j. Therein. Then came ramanna vs. I. A. Authority of india ajay hasia vs. Khalid mujlb (9 supra) and som prakash vs. Union of india. In the latter cases, ramanna's case was analysed and tests were culled out therefrom deciding whether a company or society or other authority is a 'state' for purposes of art. 12.

(13) For deciding whether an authority is a 'state' for purposes ofart. 12, one has to see if any of the following tests are satisfied. (1) it' the entire share - capital of the corporation is held by the government, it would go a long way towards indicating that the corporation is an instrumentality or agency of government. (2) if the financial assistance is so much as to meet almost entire expenditure of the corporation, it would be some indication of the same being impregnated with governmental character. (3) existence of deep and pervasive control by the state may afford an indication that the corporation is a state agency or instrumentality. (4) monopoly status of a corporation may be another indication of a corporation being a state. (5) if the functions of the corporation are of public importance and are closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of government. (6) specifically, if a department of government is transferred to corporation, it would be a strong factor supportive of the interference of the corporation being an instrumentality or agency of government. (7) if a government company or a co - operative society or other society also satisfied these tests as stated specifically in ramanna's case and som prakash case, they may also coms under article 12. In ajay hasia (9 supra) , p. K r. Iyer's case (12 supra) and sainik school (11 supra) cases the 'societies' were held to be 'state 'under article

12. (8) it is not necessary that all the tests should be satisfied for reaching the conclusion either for or against holding an institution to be a state within art. 12 (tekraj vs. Union of india)

(14) However, in serveral cases and before me also, the case in pragatools corporation vs. C. V. Imanue has been referred to pointing that no writ was issued under art. 226 against a government company even though 88% shares were held by the government. This case decided in 1969, has been explained in several of the later cases, as being merely an authority on the question as to when a mandamus could issue and as not an authority regarding the width or amplitude of art. 12 or art. 226. In praga tools case, it was held that a writ could not issue for enforcing an agreement arrived at between the union and the company even though 88% of the shares were owned by the government. Referring to this case, it was observed in ramanna's case that was not a case where the corporation was claimed to be an instrumentality' of government or an authority within art. 12 the only question was whether a writ of mandamus could lie and it was held that as there was no duty imposed on praga tools corporation by statute, no writ of mandamus could issue against it. Again in som prakash case, the supreme court distinguished praga tools case mating that there, there was 'no specific reference to art. 12', as such although it was mentioned earlier in the judgment that the company was a separate legal entity and could not be said to be either a government corporation or an industry run by or under the authority of the union government. Again in central inland water transport corporation ltd. Vs. Brojo nath ganguly (10 supra) case also it was stated that 'no question of violation of any fundamental right' was raised in praga tools case. In tekraj's case reference is made almost to ail the cases in which praga toos case has been distinguished holding that that case is not an authority either for art. 12 or art. 226. It may be noted that in these recent cases, not only praga tools case but also s l. Agarwal vs. G. M. Hindustan steel ltd. , sabhajit tewary vs. Union of india relating respectively to hindustan steel and council of scientific and industrial research, were also distinguished as cases not deciding anything concerning art. 12 or 226.

(15) Basing on these principles, the question arises whether thejammu and kashmir bank is amenable to a writ. The case before me is no doubt, not concerned with any fundamental right and therefore even if the bank does not satisfy the tests for being treated as a 'state', a writ could issue if the bank is an 'authority or person' within artide 226. Of course, if it satisfies the tests for being treated as a 'state' under art 12, the provisions of art. 226 a fortiori apply.

(16) The reason why in most cases, the courts go to art. 12 in mattersnot dealing with fundamental rights is that the tests laid down for purposes of art. 12 are more detailed and clear and if a case comes under art. 12, there is no difficulty in applying art. 226, even though no fundamental light is enforced on facts i have referred to the distinction between art 12 and 226 in detail so that the decision in v. Narasinga rao"s (1 supra) case may be understood on principle as also on facts and not be quoted for saying generally that no writ could be issued against a co - operative society or a government company under any circumstances. A writ could issue as explained by the supreme court in smark's case even against a 'person' or 'non - statutory authority' for their performing statutory or public duties. A close reading of v. Narasinga rao's case does not detract from this legal principle. I shall test the jammu and kashmir bank initially in the context of art. 12.

(17) The jammu and kashmir bank established in 1938, is a governmentcompany, under sec. 617 of the companies act, the government owning more than 50% shares. That by itself may not be sufficient to bring it under the words 'state' in art. 12. But apart from this, it is not disputed that (as stated in a printed brochure produced before me) , the state of j and k owns 92% of the share - capital, that it is a bank for the government of j and k, that the clause iii (c) of its memorandum of association states that the bank is "acting as agenit for government or local authorities', that as per sub - clause (r) (2) , it 'undertakes' and 'transacts' government business including the making of loans to co - operative credit banks or for agricultural and industrial purposes. This bank has itself sponsored two regional rural banks (i) the jammu rural bank and (ii) the kamraz rural bank, each having 94 branches (i. E. , in all 188). And the jammu and kashmir bank iteself has branches all over the country. It is also a convenor of the state level banker's committee and has the lead - bank responsibility for the four districts of the j and k state. In ajai hasia's case (13 supra) it was held that if the entire share capital or 'almost' the entire share capital is held, a body would be a' state'. In manmohan singh vs. Commissioner the grant to the school was only 95% but still, the school was held to be a state under art. 12, as highlighted in central inland water case (10 supra) (at p. 1597). I do not agree with the full bench decision of the orissa high court in banabihari tripathy vs. Registrar co - op. Societies which held that a society registered under the co - operative societies act could never be a 'state' for purposes of art. 12 or an 'authority or person' for purposes of art. 226. Ln fact para 9 of the judgment says it depends on whether the relevant tests are satisfied or not. In the present case, inasmuch as 92% of the shires are held by the government of j and k and in view of the other undisputed characteristics listed above by me, i have no difficulty in holding j and k bank to be 'state' even for purposes of art. 12.

(18) In the unreported judgments of j and k high court in jagdishchander gupta \s. J and k bank ltd. 22 and in m. S. Want vs. J and k bank ltd 23 though most of the case law under art. 12 was noticed, the various characteristics cf the bank enumerated above, including the fact of the j and k. Government holding 92% of the share - holding, have not been noticed. The court only said it was a government company holding more than 50% shares. In view of the various characteristics listed above in detail, i hold that the j and k bank is a 'state' under art. 12. A fortiorari, it is amenable to art. 226.

(19) Coming to the merits of the case, when the j and k bank is astate under art. 12 a writ could issue if there is violation of principles of natural justice. Enforcing the principle of natural justice against a 'state' would be higher than and not the same thing as enforcing a non - statutory rule. An order of a disciplinary body which is a 'state' could be quashed if there is violation of principles of natural justice.

(20) Now, the past conduct of the petitioner has been definitely takeninto account in arriving at the quantum of punishment while passing the final order on 7 - 6 - 1985. The said fact was admittedly not communicated in the second show cause notice dated 16 - 5 - 1984. It is the petitioner's case (see para 13 of w. P.) that subsequently the punishment for the earlier incident in 1976 was substantially modified on 8 - 8 - 1979 (ann. V) and he would have brought this to the notice of the disciplinary authority. In my view, this amounts to violation of principles of natural justice and, therefore the order of the disciplinary authority is liable to be quashed. The decision of the supreme court in state of mysore vs. Manche gowda holds that if the past conduct of the employee is taken into account while arriving at the quantum of punishment, the employee must be given notice of the same in the second show cause notice. If that is not done, the order ot the punishment will be vitiated. The reasoning in m. R. Peddanna vs. Central board of direct taxes, new delhi is also similar. This past conduct is referred to in the main part of the order though not in the preamble part of the order starting with the words 'whereas', and in my view, it is the main part of the order that is relevant. Even otherwise, the disciplinary authority must be treated as having this in mind when the preamble part was also drafted. The author of the order cannot be said to be not having the past conduct in mind before or at the time of drafting the preamble part of the order.

(21) Inasmuch as the order of punishment is liable to be set asideon the above ground, it is not necessary for me to consider the other arguments of the learned counsel for the" petitioner that the order passed by the disciplinary authority is not a reasoned order, though prima facie, this contention of the petitioner, in my opinion, is not correct in view of the decisions of the supreme court in state of madras vs. Srinivasan, union of india vs. K. Rajappa and tara chand vs. Delhi municipality.

(22) Coming to the appellate order, apart from not dealing with thespecified points stated in rule 101 of part ii of the rules, even if the rules are termed as non - statutory, the absence of reasons in an appellate disciplinary authority's order has not been countenanced by the supreme court as in r. P. Bhatt vs. Union of india (rule is identical) , som datt vs. Union of india tarachand vs. Delhi municipality and by our high court in union of india vs. Mahendra kumar32 and d, sitaramaiah vs. C g. M. Stare bank. The appellate order is also liable to be quashed.

(23) The writ petition is allowed and the order passed by the appellateauthority dt. 22 - 5 - 1986 and the order passed by the disciplinary authority dt. 7 - 6 - 1985 are both quashed.

(24) This will not, however, preclude the respondents from giving anappropriate second show cause notice to the petitioner and deciding the question afresh in the light of the observations made above. As to what should happen to the period between the date of dismissal and the fresh order, if any, that may be passed, it will be for the respondents to take a decision. I am sure that the procedure mentioned in rule 109 will be adopted, if the respondents consider it necessary to do so.

(25) The writ petition is accordingly allowed as stated above. Thereshall be no order as to costs.