Citation Codes

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Case Number

Misc. Petn. No. 177 of 1973

Attorney(S)

For Petitioner : H.N. Upadhyaya.

Judges

Shiv Dayal, C.J
S.R Vyas, J.P Bajpai@JJ.

Acts

provisions of Section 55, Sub-section (1) of the M. P. Co-operative Societies Act
provisions of Madhya Pradesh Co-operative Societies Act
provisions of the M. P. Co-operative Societies Act.
Section 55 of the M. P. Co-operative Societies Act
Madhya Pradesh Co-operative Societies Act, 1960,
provisions of the Co-operative Societies Act.
ARTICLE 226 CONSTITUTION OF INDIA
ARTICLE 12 CONSTITUTION OF INDIA
M. P. Co-operative Societies Act
provisions of Section 55 (1)

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Smart Summary

Judgment Summary — Bajpai, J.

Factual and Procedural Background

This reference arises from a dispute concerning an employee of a Co-operative Marketing Society whose services were terminated by the Society after acceptance of a resignation. The employee contested the termination on several alternative grounds: that he had not submitted any resignation at all; that any purported resignation must be forged; or that even if it bore his signature he had only written and kept it and never intended to submit it to the authority. The Division Bench did not decide these factual contentions in the reference; instead, three legal questions were referred to the court for determination.

Procedurally, the matter is a reference by a Division Bench asking the High Court to answer three specific legal questions arising from the employee's case.

Legal Issues Presented

Whether a Co-operative Society registered under the M. P. Co-operative Societies Act is a statutory body.
Whether a writ of mandamus, direction or order can be issued under Article 226 of the Constitution by a High Court against a Co-operative Society registered under the M. P. Co-operative Societies Act, 1960.
Whether the High Court can issue an appropriate writ, direction or order against a Co-operative Society or its officer who has, in violation of the Act or rules or bye-laws, dismissed its employee or terminated his services, for reinstatement and/or with back wages.

Arguments of the Parties

Employee's Arguments

He asserted that he had not submitted any resignation.
He contended that, if there was a resignation document, it must be forged.
He alternatively claimed that even if the resignation bore his signature, he had only written and kept it and never intended to submit it to the authority; he characterized the Society's acceptance as a surprise as to how it reached the authorities.

The opinion does not set out detailed counter-arguments advanced by the Society or other parties in the text provided.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Dukhoo-ram v. Co-operative Agricultural Association Ltd., Kawardha, AIR 1961 Madh Pra 289	Held that a Co-operative Society registered under the M. P. Co-operative Societies Act is an "authority" within the meaning of Article 12.	The Court notes this decision as one of the earlier Division Bench decisions that appears to take a contrary view on whether such societies fall within Article 12; it forms part of the background prompting the reference and is considered in resolving the divergence.
Ramnath Sharma v. State of Madhya Bharat, AIR 1959 Madh Pra 218	Held that a Co-operative Society registered under the M. P. Cooperative Societies Act cannot be treated as an "authority" under Article 12 and thus is not amenable to writ jurisdiction.	The Court records this contrary Division Bench decision and adopts the view consistent with it in holding that such societies are not statutory bodies for the purposes of Article 12.
Subhdev Singh v. Bhagat-ram Sardar Singh Raghuvanshi, AIR 1975 SC 1331	Supreme Court observations distinguishing bodies created by statute from bodies merely governed by statutory provisions.	The Court relies on these Supreme Court observations to support the proposition that an entity governed by statute is not necessarily a statutory body created by that statute.
Sabhajit Tewary v. Union of India, AIR 1975 SC 1329	Supreme Court observations consistent with the distinction between bodies created by statute and those governed by statutory provisions.	The Court relies on these observations to reinforce the conclusion that co-operative societies registered under the Act are not statutory bodies created by the statute.
Executive Committee of Vaish Degree College, Shamli v. Lakshmi Narain, AIR 1976 SC 888	Unreported Supreme Court decision (later reported) supporting the view distinguishing statutory creation from governance by statute.	The Court cites this decision as also supporting the view that registration under a statute does not make a body a statutory authority created by the statute.
Praga Tools Corporation v. C. V. Imanual, AIR 1969 SC 1306	Principle that mandamus lies to secure performance of public or statutory duty and that the person or authority with statutory duty need not be a public official or official body.	The Court relies on this authority to support the proposition that writ jurisdiction may extend to non-public bodies when they are under statutory obligations enforceable by mandamus.
Jaiprakash Mudakar v. A. C. Choubey, 1975 MPLJ 290 (1975 Lab IC 750) (Full Bench)	Full Bench holding that appointment/termination of principals or teachers of an affiliated private college may be governed by a College Code having the force of law; breach of such provisions permits recourse by writ petition.	The Court uses this decision to illustrate and support the position that where terms of employment are governed by statutory or quasi‑statutory rules, writ jurisdiction is available to remedy breaches of those provisions.

Court's Reasoning and Analysis

The Court approached the three referred questions sequentially and by reference to the distinction between entities created by statute and entities merely governed by statutory provisions:

Definition of "statutory body": The Court reasoned that for an institution to be a statutory body it must be created by a statute and must owe its existence to that statute. The primary inquiry is whether the institution's existence originates in the statute itself.
Distinction applied to co-operative societies: The Court drew a distinction between (a) institutions created by a statute (for example, ONGC or LIC, which owe their existence to statute) and (b) institutions formed by individuals whose affairs are regulated by statutory provisions. A co-operative society, the Court observed, is formed by persons pursuing shared aims and objects and is then registered under the M. P. Co-operative Societies Act; registration subjects it to statutory rules and regulations but does not mean it was created by the statute. Relying on Supreme Court observations (Subhdev Singh, Sabhajit Tewary, and Executive Committee of Vaish Degree College), the Court concluded that such registration does not impart a statutory character.
Implications for Article 12 and writ jurisdiction: Because a co-operative society registered under the Act does not fall within the definition of "other authorities" in Article 12, it is ordinarily not amenable to writ jurisdiction under Article 226. However, the Court clarified that writs (such as mandamus) are available to enforce public or statutory duties where a statute or rules impose a legal obligation on the society and create a corresponding legal right in an individual. The essential condition for issuing mandamus is the existence of a legal right to the performance of a legal duty.
Mandamus and non-public bodies: Citing Praga Tools, the Court emphasized that the authority on whom a statutory duty is imposed need not be a public official or a public body for mandamus to lie; what matters is the existence of the statutory obligation and the corresponding right.
Employment and statutory protection: Turning to the third question, the Court stated that where dismissal or termination contravenes statutory provisions, bye-laws or rules framed under the Act, the High Court can issue writs (including reinstatement with back wages) if a proper case is made for interference and the Court chooses to exercise its discretion. The Court explained that in such cases the employee seeks enforcement of a statutory right (not specific performance of a contract of personal service): if termination is null and void because made in violation of statutory provisions, there was no lawful repudiation and the employee may be declared to continue in service.
Specific statutory example — Section 55: The Court analyzed Section 55 of the M. P. Co-operative Societies Act, pointing out that the Registrar may frame rules governing terms of employment and that societies must comply with orders issued by the Registrar. Section 55(2) provides a statutory forum (the Registrar or an appointed officer) to decide employment disputes and makes such decisions binding. The Court held that where rules framed under Section 55 or directions by the Registrar create obligations that prohibit dismissal without compliance and the society violates those rules, an employee may approach the High Court to enforce the statutory right. Conversely, in the absence of any statutory rule governing a particular employee's terms, the matter is governed by general master‑servant law and does not ordinarily attract writ jurisdiction.

Holding and Implications

Holding:

First question: The court answered in the negative — a Co-operative Society registered under the M. P. Co-operative Societies Act is not a statutory body created by the statute for the purposes of Article 12.
Second question: The court's answer is qualified: "Writ can be issued in such cases where the Society has not carried out any legal obligation or has acted in violation of any statutory provisions."
Third question: The court answered in the affirmative — the High Court can issue an appropriate writ, direction or order (including for reinstatement and/or back wages) where dismissal or termination contravenes the provisions of the Act, rules or bye-laws and a proper case for interference is made out.

Practical Consequences

Direct effects of the decision, based on the opinion text:

Co-operative societies registered under the M. P. Co-operative Societies Act are generally not regarded as statutory authorities under Article 12 and therefore are not per se amenable to writ jurisdiction under Article 226.
Where the Act or rules made under it impose statutory duties on a society and create corresponding legal rights in individuals (for example, rules framed under Section 55 governing employment and disciplinary procedure), the High Court may entertain writ petitions to enforce those statutory rights and to compel compliance.
An employee dismissed in violation of statutory provisions may seek declaratory relief and reinstatement (with consequent back wages where appropriate) on the ground that the termination was null and void as contrary to statute; in such a case the remedy is framed as enforcement of statutory right rather than specific performance of a personal service contract.

The opinion focuses on the direct legal consequences for the parties and the circumstances in which writ relief is available; it does not purport to lay down any broader novel doctrine beyond applying the cited authorities and statutory text to the referred questions.

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Ramswarup Gupta v. M.P State Co-Operative Marketing Federation Ltd. And Others

Bajpai, J.

1. This reference stems from a humdrum case of an employee of a Co-operative Marketing Society, whose services have been brought to an end by accepting his resignation and thereafter the employee had taken practically all possible alternative stands by saying that firstly he had not at all submitted any resignation; or if there is any, the same must be forged or even if it bears his signature, he had simply written the same and kept it and never intended to submit it to the authority for acceptance. According to him, it was nothing but a surprise as to how the same could reach the authorities for further action. However, we are at present not concerned with the facts of the case inasmuch as only the following three questions of law have been referred : for being answered by us and we have to confine ourselves to the same :

(i) Whether Co-operative Society, registered under the M. P. Co-operative Societies Act is a statutory body ?

(ii) Whether a writ of mandamus, direction or order can be issued under Article 226 of the Constitution by a High Court against a Co-operative Society registered under M. P. Co-operative Societies Act, 1960 ?

(iii) Whether the High Court can issue an appropriate writ, direction or order against a Co-operative Society or its officer, who has, in violation of the Act or rules or bye-laws, dismissed its employee or terminated his services, for reinstatement and/or with back wages ? (sic)

2. The Division ' Bench of this Court was inclined to make this reference in view of certain observations in Dukhoo-ram v. Co-operative Agricultural Association Ltd., Kawardha, AIR 1961 Madh Pra 289 and Ramnath Sharma v. State of Madhya Bharat, AIR 1959 Madh Pra 21'8, which prima facie appear to be divergent. In AIR 1961 Madh Pra 289 (supra) it has been observed and held by the Division Bench of this Court that a Co-operative Society registered under the M. P. Co-operative Societies Act is an authority within the meaning of Article 12 of the Constitution of India- However, in AIR 1959 Madh Pra 218 (supra), it was held by another Division Bench of this Court that a Cooperative Society, registered in accordance with the provisions of the M. P. Cooperative Societies Act, cannot be treated as an authority within the meaning of Article 12 of the Constitution of India and as such will not be amenable to writ jurisdiction. According to the Division Bench, a Co-operative Society registered under the provisions of the Co-operative Societies Act is not a statutory body. In this back-ground, his reference has arisen and we shall deal with all the three questions referred to us for being answered.

3. Before any institution can be said to be a statutory body, it must be created by a Statute and must owe its existence to the Statute. This is the primary thing which has to be seen for deciding the first question. It will be necessary to mark a distinction between an institution which is not created by or under a Statute but is governed by certain statutory provisions for the proper maintenance and administration of its affairs, and the one which is created by the Statute and owes its existence to the same. We come across a number of institutions which though not created by or under any statute, are after formation governed by certain statutory provisions regulating their affairs. Simply by doing so, they do not become statutory bodies. For instance, a company being incorporated in accordance with the provisions of the companies act cannot be said to be a body created by the Companies Act. A company so registered and incorporated in accordance with the provisions of the companies act cannot be a statutory body because it is not created by the Statute. It is nothing but a body created in accordance with and governed by the provisions of the Statute. The same is the case of a Co-operative Society. According to the requirements of law, for the time being in force, certain number of persons form a Society with certain aims and objects. That Society requires registration in accordance with the provisions of the M. P. Co-operative Societies Act. After having been so registered, it becomes liable for following certain rules, regulations and directions framed and issued under the provisions of the Co-operative Societies Act. But such a Society is not created by the provisions of the M. P. Co-operative Societies Act itself. It still remains a body which, after having come into existence, is governed in accordance with the provisions of certain statute. It does not have a statutory character like the Oil and Natural Gas Commission or the Life Insurance Corporation, which institutions owe their existence to the Statute itself and have been created by the Statute. For the aforesaid provisions, we rely on the observations made by their Lordshisps of the Supreme Court in Subhdev Singh v. Bhagat-ram Sardar Singh Raghuvanshi, AIR 1975 SC 1331 and Sabhajit Tewary v. Union of India. AIR 1975 SC 1329. An unre-ported decision D/- 12-12-1975 of the Supreme Court in Civil Appeal No. 1543 of 1974 = (since reported in AIR 1976 SC 888), (Executive Committee of Vaish Degree College, Shamli v. Lakshmi Narain) also supports the aforesaid view.

4. As regards the second question whether a writ of mandamus, direction or order can be issued under Article 226 of the Constitution of India by a High Court against a Society registered under Madhya Pradesh Co-operative Societies Act, 1960, it is apparent that, as observed by us ear-lier, a Co-operative Society registered under the provisions of Madhya Pradesh Co-operative Societies Act does not fall within the definition of the term "other authorities" as stated in Article 12 of the Constitution and is not a statutory body. Therefore, it will suffice to observe that normally such societies will not be amenable to writ jurisdiction of the High Court except in cases where according to the provisions of the statute or rules or regulations framed under tine Act by which the Society is governed, there is a statutory or public duty imposed on it, and the enforcement of which is being sought Article 226 of the Constitution provides that, every High Court shall have power to issue to any person or authority orders or writs in the nature of habeas corpus, mandamus etc. for the enforcement of any of the rights conferred by Part III of the Constitution and for any other purpose. It is well understood that a mandamus lies to secure the performance of public or statutory duty, in the performance of which one, who applies for it, has a legal right and interest. For the reasons stated above, the condition precedent for issue of a mandamus will be that there must be a legal right to the performance of a legal duty. An order of mandamus is nothing but a command directed to a person. Corporation or Tribunal requiring them to do a particular thing which pertains to their office and is in the nature of public duty. It is, however, not necessary that the person or the authority on whom the statutory duty is imposed, must be a public official or an official body. We rely on Praga Tools Corporation v. C. V. Imanual, AIR 1969 SC 1306 in this respect. But if there is a statutory obligation in respect of any subject-matter on the society to carry out the same and the Society fails to do so, or acts in contravention of the same, it may be a proper subject-matter for issuing a writ in appropriate cases commanding compliance of the statutory requirements. In other words, so long as no case is made out of any breach of statutory provisions or existence of legal right in one, who claims the writ, and a legal obligation in the Society to do something, no writ can be issued against the Society. Whenever, it is pointed out that any statutory provi- sions requiring the Society to act in a particular manner creates a right or interest in favour of the person concerned, it will be permissible for such person to approach the High Court for seeking the writ of mandamus to direct the Statute and not to commit breach of the same. Thus, we would like to make it clear that the Co-operative Society will be amenable to writ jurisdiction only in cases relating to performance of legal obligations and duties imposed by a Statute creating a corresponding legal right in one.

5. As regards the third question, whether the High Court can issue writ, direction or order against Co-operative Society or its officer, who has, in violation of the provisions of the Act or rules or bye-laws, dismissed its employee or terminated his service, the observations made in the context of the second question make it clear that in such cases, where the dismissal or termination of service is in contravention of the statutory provisions, writ can be issued if a proper case is made out for interference and the High Court is inclined to exercise its discretionary powers in the subject-matter before it. Whenever, there is a statutory requirement directing the Society to perform the same, and if the Society does not obey it and acts in violation of the same, the person who comes to the Court claiming a writ does not come for the performance of the contract of service, but virtually comes for the enforcement of his legal rights, created in his favour by virtue of the provisions of the Statute, directing the Society to act in a particular manner. It may be true that there might be a contract of service between the Society and its employee, but such aspects of the employment which are governed by the Statutory provisions will always be an appropriate subject-matter for issuing a writ, if there is any failure on the part of the employer-Society to perform the legal obligation or any action is taken in violation of the statutory provisions. Under the common law, the Court will not ordinarily force an employer to retain the services of an employee whom it no longer wants to continue in employment but this rule is subject to certain well recognised exceptions. It is always open to the Courts in appropriate cases to declare that as the dismissal from service was in contravention of the Statutory provisions, the person so dismissed continues to remain in service, even though by so doing the Court forces the employer to continue to employ the servant whom it does not desire to employ. Where the relationship between the employer and the employee is governed by Statute or subordinate legislation, the termination of service, which is the same thing as repudiation, may in given situation be null and void because it was done in violation of the statutory provisions. In that event, it will not have the effect of putting an end to the contract of service and the employee will be entitled to a declaration that his services would continue. The doctrine that "contract of personal service cannot be specifically enforced" will not stand in way to the employee because the termination itself being null and void, there was no repudiation at all in the eye of law and as such, there was no question of enforcing specific performance of the contract of employment. What the employee would be claiming in such a case is not the enforcement of a contract of personal service but declaration of the statutory invalidity of the act done by the employer.

6. For instance, Section 55 of the M. P. Co-operative Societies Act envisages certain statutory obligations in respect of the terms of employment and working conditions. The Registrar has empowered to frame rules governing the terms of employment in certain cases of employment by the Society or class of societies. The provisions of Section 55, Sub-section (1) of the M. P. Co-operative Societies Act contain a mandate that the Society shall comply to such rules or orders issued by the Registrar. Section 55 (2) provides a forum for deciding a dispute regarding the terms of employment, working conditions and the disciplinary action taken by the Society which may arise between the Society and its employee. However, this does not mean that due to availability of this alternative remedy, the jurisdiction under Article 226 of the Constitution can never be invoked in proper cases where the violation of the provisions of Section 55 (1) is apparent. The text of Section 55 is reproduced below :-- "55. Registrar's power to determine terms of employment in societies :-- (1) The Registrar may from time to time frame rules governing the terms of employment and worknig conditions in a society or a class of societies and the society or the class of societies to which such terms of employment and of working conditions are applicable shall comply with the order that may be issued by the Registrar in this behalf. (2) Where a dispute including a dispute regarding terms of employment, working conditions and disciplinary action taken by a society, arises between a society and its employees, the Registrar or any officer appointed by him, not below the rank of Assistant Registrar, shall decide the dispute and his decision shall be binding on the society and its employees." (underlining is ours).* Thus, when according to the rules framed under Section 55 (1) of the Act or directions issued by the Registrar in exercise of powers thereunder, there are provisions governing the terms of employment of any servant of the society and they prohibit the society from dismissing its employees without complying the requirements as stated in the rules and if the society terminates the services of its employee without complying the same, the employee concerned can always approach the High Court for enforcing the legal right, which has been created in his favour due to the corresponding legal obligation and duty imposed on the society to act in a particular manner. Such an employee will approach the Court not for enforcement of contract of service but for the enforcement of the legal right created in his favour by virtue of the provisions that he could not be dealt otherwise in the matter of his employment in violation of the provisions of the rules. However, if there is no such rule or statutory provisions regarding the terms of employment of a particular employee, the same will be definitely governed by the general law of master and servant and since it will not be a case of breach of any statutory provision or failure to perform legal obligation or legal duty imposed by law, such an employee cannot approach the High Court for claiming a writ for reinstatement or directions to the Society to deal with him in any particular manner.

7. The decision reported in Jai-prakash MudaKar v. A. C. Choubey, 1975 MPLJ 290 = (1975 Lab IC 750) (FB) also supports the view we have taken in the earlier paragraphs. A Full Bench of this Court in the aforesaid case had observed, while dealing with the case of a Principal of a private college affiliated to Ravi-shankar University, that appointment and termination of services of a Principal or teacher of the private college was not a pure matter of contract but was also an item covered by the College Code which has the force of law. If any action was taken by the Governing body of the affi- liated college in breach of the provisions of the college Code, the aggrieved person could have recourse to have an action by a writ petition.

8. For these reasons, we answer the first question in the negative, the third question in the affirmative and the second question as follows :-- "Writ can be issued in such cases where the Society has not carried out any legal obligation or has acted in violation of any statutory provisions."

Ramswarup Gupta v. M.P State Co-Operative Marketing Federation Ltd. And Others

Judgment Summary — Bajpai, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Employee's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Practical Consequences

Ramswarup Gupta v. M.P State Co-Operative Marketing Federation Ltd. And Others

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