State Coop. Bank Ltd., Bhopal Vs. Nanuram Yadav & Ors  Insc
976 (25 September 2007)
Chatterjee & P. Sathasivam
APPEAL NO. 4481 OF 2007 (Arising out of SLP (C) No. 12236 OF 2006) WITH
CIVIL APPEAL NO. 4483 OF 2007 (Arising out of SLP (C) NO. 19499 OF 2006) AND
CIVIL APPEAL NO. 4482 OF 2007 (Arising out of SLP (C) NO. 3979 OF 2007) P. Sathasivam,
Leave granted in all the special leave petitions.
public appointments to be made, whether Lokayukt constituted under the M.P. Lokayukt
Evam Up-Lokayukt Adhiniyam, 1981 has jurisdiction to go into the appointment of
employees of the M.P. State Cooperative Bank and whether 60 clerks-cum-typists
appointed by the said Bank were in accordance with the service rules are the
questions to be decided in these appeals?
Madhya Pradesh State Cooperative Bank Ltd., through its Managing Director
challenges the order dated 19.04.2006 passed by the Division Bench of High
Court of Madhya Pradesh at Jabalpur in Writ Petition No. 1421 of 2005, by way
of Special Leave Petition No. 12236 of 2006 before this Court. Questioning the
very same order, some of the writ petitioners, numbering 26, who earlier
approached the High Court, filed Special Leave Petition No. 19499 of 2006
before this Court. The other writ petitioners, numbering 27, who also agitated
the matter before the High Court questioning certain directions filed another
special leave petition No. 3979 of 2007 before this Court. Inasmuch as the
issues raised and challenge in all these petitions relate to the very same
order of the High Court and are interconnected, they are being disposed of by
the following common judgment.
brief facts, in nutshell, are as follows:
24.06.1994, the Managing Director of the M.P. State Cooperative Bank Ltd.,
(hereinafter referred to as 'the Bank') requested the Cooperative Commissioner
and Registrar of the Cooperative Societies, M.P., Bhopal for appointment of 60 ad- hoc
clerks-cum-typists in the Bank. By letter dated 29.06.1994, conditional sanction
was granted for appointment of 40 clerks-cum-typists on ad-hoc basis for 6
months mentioning that in the meantime the Bank has to take steps to fill up
the vacant posts by issuing advertisement and comply the Rules keeping in view
the reservation under the Government Rules. Again, by letter dated 25.10.1994,
the Managing Director of the Bank requested for sanctioning the appointment of
another 20 clerks-cum-typists on ad-hoc basis. By letter dated 11.11.1994, the
Cooperative Commissioner and Registrar sanctioned the appointment of another 20
clerks-cum-typists on ad-hoc basis for 6 months on the condition as mentioned
in the earlier letter dated 29.06.1994.
Pursuant to the aforesaid sanction letters, on 31.01.1995, the Bank appointed
60 clerks-cum-typists on ad- hoc basis for a period of six months. After
appointment, two employees left the services of the Bank.
After expiry of six months, as envisaged under Rule 22(a) of the Staff Service
Rules, 1976, all the appointed persons (writ petitioners before the High Court)
were required to appear in the written examination so that they could be
appointed for a period of one year as probationers. All of them took the
written examination and became successful. Those persons were required by the
Bank to appear for an interview on 21.07.1995 before the Selection Committee.
The Selection Committee, after satisfying itself, recommended their names for
appointment on regular basis. All the appointed persons were asked by the Bank
to furnish service-cum-security Bond for a period of three years with a deposit
of Rs.5,000/- as security in the form of FDRs. All the appointees complied with
the said condition. While they are discharging their duties, taking into
consideration of their performance etc., the appointing authority, under Rule
14(b), confirmed their services on the post of clerks-cum-typists on
the matter stood thus, according to the writ petitioners, all of a sudden,
without any notice or assigning any reason, the Managing Director of the Bank
issued termination order under Rule 61 of the Rules on 27.10.1997. Aggrieved by
those orders, the affected persons approached the High Court. It is also the
claim of the affected persons that after getting the order of termination they
came to know that the termination order was issued by the Bank on the basis of
the direction dated 01.08.1997 issued by the Commissioner Cooperatives-
cum-Registrar to the Managing Director of the Bank on the foundation that the Lokayukt
had found 58 clerks-cum-typists had been illegally appointed on the post, hence
it was imperative to terminate their services taking aid of Rule 61 of the
Staff Service Rules.
Division Bench of the High Court, by impugned order, while allowing the writ
petition, came to the following conclusion:-
The Rule 61 of the Staff Selection Rules is ultra- vires and unconstitutional.
The order dated 04.02.2005 passed by the Tribunal vide Annexure.P4 is quashed.
The issue as to the status earned by the writ petitioners is remanded to the
M.P. Cooperative Tribunal for adjudication.
The M.P. Cooperative Tribunal shall finalise the lis within a period of four
months from the date of order."
the above-said conclusions/directions, as stated earlier, the Bank as well as
their employees/writ petitioners filed the above appeals.
heard Mr. S.K. Gambhir and Mr. S.K. Dubey, learned senior counsel and Mr.
Krishna Mohan Shukla, learned counsel for the appellant and Mr. B.S. Banthia
and Mr. Ramesh Babu M.R., learned counsel for the respondents.
S.K. Gambhir, learned senior counsel, appearing for the Bank, raised the
The appointment of 58 employees is not only contrary to the directions of the
Commissioner Cooperative and Registrar, Cooperative Societies dated 29.6.1994
for holding regular appointments after advertisement etc. but also contrary to
Rule 21 of the Rules;
The process adopted was a farce as only these candidates were put to written
test and interview in which none of them was unsuccessful. The selection itself
was a result of favourtism and nepotism and contrary to the provisions of Arts.
14 and 16 of the Constitution of India;
When the initial appointment itself was illegal and void ab initio, such
appointments could not be made regular and there was no question to determine
who has jurisdiction upon enquiry, found that all the appointments were farce,
pre-planned and intended to help the favoured persons. Since the said report has
not been set aside, the recommendation of the Lokayukt is binding on the
The validity of Rule 61 was not called for because the employees were not
entitled to any notice and their services deserve to be dispensed with
Mr. S.K. Dubey, learned senior counsel and Mr. Krishna Mohan Shukla, learned
counsel, appearing for the employees, raised the following contentions:
The High Court having found Rule 61 invalid, there is no need to remit the
matter to the Tribunal to find out the status of employees;
has no jurisdiction to go into the appointment of these employees;
Inasmuch as the employees concerned were subjected to written test, interview,
executed security bond, successful in their probation period, satisfied Staff
Service Rules, the order of the Managing Director terminating their services
without notice and enquiry merely based on the direction of the Registrar of
the Cooperative Societies, cannot be sustained;
In any event, the Registrar is obliged to examine the report of the Lokayukt
before accepting the recommendations made therein;
have considered the rival contentions and the relevant materials.
Before analyzing the claim of both the parties, it is useful to refer to
relevant provisions of the Staff Service Rules of Madhya Pradesh Rajya Sahakari
Bank Maryadit which were approved by the Registrar, Co-operative Societies, M.P.
Bhopal and made applicable with effect from 19th November, 1976.
deals with 'Classification of Employees'. Rule 3 (b) defines "Permanent
Employees" which reads as follows:
A "Permanent Employee" means an employee who has been appointed as
permanent employee or who has been confirmed on a vacant permanent post as
Chapter-6 deals with selection of personnel in the Bank.
21 and 22(a), which are relevant, read as follows:
All vacancies falling within the purview of the employment exchange
(Notification of vacancies) Act, 1959 shall be duly notified to the employment
exchange concerned. The post/posts may also be advertised in the local or All India Newspapers at the option of the
appointing authority. The advertisement should give scales of pay, dearness
allowance, the essential and preferential qualifications, age limit etc."
Candidates for the posts in Grade Vth and such other posts shall have to
undergo a written test in the manner prescribed by the 'Staff Committee'.
Candidates passing at such test shall be eligible for appointment only after
the selection at personal interview by the 'Selection Committee' consisting of
Chairman of the Bank or his nominee Director, Registrar, Cooperative Societies
M.P. or his nominee not below the rank of Joint Registrar, Cooperative
Societies, M.P. & Managing Director of the Bank for deciding the selection
further that for the selection of technical staff Chief Engineer of the Bank
shall additional member of the committee. It is also provided that when elected
board ceases to function, by any reason, Chairman of the Bank shall be replaced
by the Officer-In-Charge of the Bank remaining members of the 'Selection
Committee' will remain the same. The meeting of 'Selection Committee' will be presided
by the Chairman of the Bank/Officer-In-Charge of the Bank as the case may be.
Presence of all the members of the committee shall be necessary for the
per Rule 23(a)(iv), employees in Grade III, IV and V, the Selection Authority
is Selection Committee and the Appointing Authority is Managing
Director/General Manager/Deputy General Manager or any person authorized by the
Managing Director. Rule 23(c) makes it clear that appointment made to fill a
vacancy of a permanent post shall be made on probation unless otherwise
specifically mentioned in the order of appointment given to the employee.
Under Section 55(1) of the Madhya Pradesh Cooperative Societies Act, 1960
(hereinafter referred to as "the Act"), the Registrar of Cooperative
Society has been given power to frame Service Rules of the employees working
under different cooperative institutions and in furtherance of the powers given
under the aforesaid provision, the Registrar has framed the service conditions
for the employees of the appellant-Bank, which are called Madhya Pradesh Rajya Sahakari
Bank Employees (Terms of Employment and Working Conditions) Rules, 1976. It is
also brought to our notice that these Staff Service Rules have since been
amended from time to time. We have already referred to the Rules which are
applicable to the issues raised in these appeals.
Mr. S.K. Gambhir, learned senior counsel appearing for the appellant-Bank, by
drawing our attention to the principles laid down by this Court in various
decisions in respect to public appointments, submitted that inasmuch as the
entire procedure and the selection made are contrary to the Rules, first those
persons are not entitled to any notice in compliance with principles of natural
justice and secondly all of them are liable to be sent out without further
enquiry. In support of his submission, he relied on the of Haryana & Ors.,
(1994) 4 SCC 165. While considering fraud, nepotism, favouritism and
arbitrariness in public appointments, this Court, in paragraphs 19 and 20 of
the judgment, laid down the following principles which read as under:
It is highly regrettable that the holders of public offices both big and small
have forgotten that the offices entrusted to them are sacred trusts. Such
offices are meant for use and not abuse. From a Minister to a menial everyone
has been dishonest to gain undue advantages. The whole examination and the
interview have turned out to be farcical exhibiting base character of those who
have been responsible for this sordid episode. It shocks our conscience to come
across such a systematic fraud. It is somewhat surprising the High Court should
have taken the path of least resistance stating in view of the destruction of
records, that it was helpless. It should have helped itself. Law is not that
the above circumstances, what are we to do? The only proper course open to us
is to set aside the entire selection.
plea was made that innocent candidates should not be penalised for the misdeeds
of others. We are unable to accept this argument. When the entire selection is
stinking, conceived in fraud and delivered in deceit, individual innocence has
no place as "Fraud unravels everything". To put it in other words,
the entire selection is arbitrary. It is that which is faulted and not the
we hereby set aside the selection of Taxation Inspectors."
(2002) 3 SCC 146, this Court following the law laid down in Krishan Yadav's
case (supra), upheld the Railway Board's decision to cancel the selection on
the ground of fraud committed by the Selection Authorities.
Court, in paragraph 12 of the judgment, concluded as under:
As per the report of the CBI whole selection smacks of mala fides and
arbitrariness. All norms are said to have been violated with impunity at each stage
viz. right from the stage of entertaining applications, with answer-sheets
while in the custody of Chairman, in holding typing test, in interview and in
the end while preparing the final result. In such circumstances it may not be
possible to pick out or choose any few persons in respect of whom alone the
selection could be cancelled and their services in pursuance thereof could be
terminated. The illegality and irregularity are so inter-mixed with the whole
process of the selection that it becomes impossible to sort out the right from
the wrong or vice versa.
result of such a selection cannot be relied or acted upon.
not a case where a question of misconduct on the part of a candidate is to be
gone into but a case where those who conducted the selection have rendered it
wholly unacceptable. Guilt of those who have been selected is not the question
under consideration but the question is could such selection be acted upon in
the matter of public employment? We are therefore of the view that it is not
one of those cases where it may have been possible to issue any individual
notice of misconduct to each selectee and seek his explanation in regard to the
large scale widespread and all pervasive illegalities and irregularities
committed by those who conducted the selection which may of course possibly be
for the benefit of those who have been selected but there may be a few who may
have deserved selection otherwise but it is difficult to separate the cases of
some of the candidates from the rest even if there may be some. The decision in
the case of Krishan Yadav (supra) applies to the facts of the present case. The
Railway Board's decision to cancel the selection cannot be faulted with. The
appeal therefore deserves to be allowed."
the case of A. Umarani vs. Registrar, Cooperative Societies & Ors., (2004)
7 SCC 112, this Court has reiterated the principles to be followed in the
matter of public employment. In that case, in the State of Tamil Nadu, a large number of employees of
Cooperative Societies were appointed without notifying the vacancies to the
employment exchange and without following the other mandatory provisions of the
Act and the Rules framed thereunder relevant to recruitment. A large number of
appointees furthermore did not have the requisite educational qualification or
other qualification like cooperative training, etc. The reservation policy of
the State was not followed by the cooperative societies. The recruitments were
made beyond the permissible cadre strength. With a view to condone the serious
lapses on the part of the cooperative societies in making such appointments in
illegal and arbitrary manner, the State Government issued various orders from
time to time, in terms whereof such appointments were sought to be regularized
fixing a cut-off date therefor. Latest order was G.O. Ms. No. 86 dated
12.3.2001 by which the cut-off date was extended up to 11.3.2001 and which
sought to regularize appointments made after 8.7.1980 without notifying the
employment exchange in respect of those employees who had completed 480 days of
service in two years, purported to be in terms of the T.N. Industrial
Establishments (Conferment of Permanent Status to Workmen) Act, 1981. The
legality and validity of the said Government order was challenged before the
High Court, inter alia, held that the said order shall not operate for
regularization of any employee recruited by the cooperative societies in
violation of sub-rule (1) of Rule 149 of the T.N. Cooperative Societies Rules,
1988, as amended by G.O. Ms. No. 212 dated 4.7.1995. The primal question for
consideration in that appeals before this Court was whether the State had the
requisite authority to direct regularization of services of the employees of
the cooperative societies by reason of the impugned order.
dismissing the appeals, this Court, in paragraphs 39, 40, 41, 45, 68 and 69,
held as under:
Regularisation, in our considered opinion, is not and cannot be the mode of
recruitment by any "State" within the meaning of Article 12 of the
Constitution of India or any body or authority governed by a Statutory Act or
the Rules framed thereunder. It is also now well-settled that an appointment
made in violation of the mandatory provisions of the Statute and in particular
ignoring the minimum educational qualification and other essential
qualification would be wholly illegal. Such illegality cannot be cured by
taking recourse to regularisation. (See State of H.P. v. Suresh Kumar Verma and
Anr., (1996)7 SCC 562).
is equally well-settled that those who come by backdoor should go through that
door. (See State of U.P. and Ors. v. U.P. State Law Officers Association &
Ors.,(1994) 2 SCC 204).
furthermore cannot give permanence to an employee whose services are ad-hoc in
regularisation is, thus, permissible in exercise of the statutory power
conferred under Article 162 of the Constitution if the appointments have been
made in contravention of the statutory Rules.
a case of this nature this court should not even exercise its jurisdiction
under Article 142 of the Constitution of India on misplaced sympathy.
Teri Oat Estates (P) Ltd. v. U.T., Chandigarh and Ors.(2004) 2 SCC 130, it is stated:
have no doubt in our mind that sympathy or sentiment by itself cannot be a
ground for passing an order in relation whereto the appellants miserably fail
to establish a legal right. It is further trite that despite an extra-ordinary
constitutional jurisdiction contained in Article 142 of the Constitution of
India, this Court ordinarily would not pass an order, which would be in
contravention of a statutory provision."
the case of Indian Drugs & Pharmaceuticals Ltd. vs. Workmen, Indian Drugs
& Pharmaceuticals Ltd., (2007) 1 SCC 408, after referring the decision in Uma
Devi's case (supra) and other decisions, this Court observed that the
appointments made without following the appropriate procedure under the
Rules/Government Circulars and without advertisement or inviting application
from the open market was held to be in fragrant breach of Arts. 14 & 16 of
the Constitution of India. It was further held that the Rules
of recruitment cannot be relaxed and the Court/Tribunal cannot direct
regularization of temporary appointees de hors the Rules, nor can it direct
continuation of service of a temporary employee (whether called a casual, ad
hoc or daily-rated employee) or payment of regular salaries to them.
is clear that in the matter of public appointments, the following principles
are to be followed:
appointments made without following the appropriate procedure under the
Rules/Government Circulars and without advertisement or inviting applications
from the open market would amount to breach of Arts. 14 & 16 of the Constitution
cannot be a mode of appointment.
appointment made in violation of the mandatory provisions of the statute and in
particular, ignoring the minimum educational qualification and other essential
qualification would be wholly illegal. Such illegality cannot be cured by
taking recourse to regularization.
Those who come by back door should go through that door.
regularization is permissible in exercise of the statutory power conferred
under Art. 162 of the Constitution of India if the appointments have been made
in contravention of the statutory Rules.
Court should not exercise its jurisdiction on misplaced sympathy.
the mischief played so widespread and all pervasive, affecting the result, so
as to make it difficult to pick out the persons who have been unlawfully
benefited or wrongfully deprived of their selection, it will neither be
possible nor necessary to issue individual show-cause notice to each selectee.
only way out would be to cancel the whole selection.
When the entire selection is stinking, conceived in fraud and delivered in
deceit, individual innocence has no place and the entire selection has to be
Keeping in mind the abovementioned principles, we have to consider whether the
appointments were made in accordance with the Rules by following the procedure?
If our answer is in the affirmative, all appointments have to be upheld and the
orders terminating their services are to be quashed.
letter dated 24.6.1994 (Annexure P-1), Mr. Balram Prasad Sharma, Managing
Director of the Bank requested the Cooperative Commissioner and Registrar,
Cooperative Societies, M.P. that against 100 vacant posts of Clerks-cum-
Typist, at least 60 posts should be filled up from ad hoc appointment of
eligible persons so that work of the Bank may be executed efficiently. Pursuant
to the said request, Mr. R.N. Sharda, Additional Registrar, by his reply dated
29.6.1994 (Annexure P-2), after considering the request of the Managing
Director of the Bank permitted to appoint 40 persons on ad hoc basis for six
months. In the same proceedings, the Additional Registrar reiterated that the
posts should be filled up within six months after issuing legal advertisement
and according to Rules and keeping in view the reservation under Government
letter dated 11.11.1994 (Annexure P-3), the Joint Registrar accorded permission
to fill up 20 more posts for six months on ad hoc basis under prescribed
P-1, P-2 and P-3 make it clear that based on the large number of vacancies in
the post of Clerk-cum-Typist, and on the request of the Managing Director of
the Bank, the Registrar who is empowered to sanction, permitted the Bank to
fill up 60 vacant posts by following the procedure.
Mr. Gambhir, learned senior counsel, submitted that it was the complaint of the
Bank that all the above-mentioned vacant posts were filled up without following
the procedure prescribed in Rules 21,22,23 of the Rules. In other words,
according to the Bank, without proper intimation to the employment exchange and
advertisement in the newspapers mentioning all the details and without
following the rule of reservation, these persons were appointed and
subsequently regularized in the cadre of service. Rule 21 which we have already
extracted in the paragraphs (supra) makes it clear that the vacancies should be
notified to the employment exchange.
other words, intimation to the employment exchange and calling for a list of
candidates is a mandatory one. On the other hand, the above Rule makes it clear
that advertisement in the local or all India newspapers is at the option of the appointing authority. To put it
clear, if there is proper intimation to the employment exchange regarding the
vacancy and a request for eligible candidates, that would satisfy Rule
is the specific case of the Bank that the said Rule was not fully complied
with. In support of his submission, learned senior counsel appearing for the
Bank, heavily relied on the report of Lokayukta. We shall deal with the
complaint, enquiry and ultimate decision by the Lokayukt in the later
Insofar as the compliance of the Rules is concerned, learned counsel appearing
for the employees, by drawing our attention to the statement made by the
officers of the Bank before the Additional Registrar, contended that there was
no violation of any of the Rules. One Mr. S.Kumar, former General Manager of
the Bank was examined as witness No.2 before the Additional Registrar wherein
he specifically deposed to the effect that all qualified applicants were
invited as per the service rules, have to undergo written examination and who
found successful were required to face interview by the Selection Committee of
the Bank based on the report of the Selection Committee. According to him,
those persons were appointed by the competent authority under the service
respect of a specific question, namely, whether the Bank had written a letter
to the employment exchange for the names to be sent for the vacant posts, he
answered "yes, the letter was sent two months before". When he was
asked whether any list was received from the employment exchange, he answered
"No". In respect of another question whether the Bank had given
advertisement prior to the regular appointment, he answered "No, because
as per the Rules, it was necessary to write to the employment exchange and that
was done". When he was confronted with the letter dated 27.04.1996 of the
employment exchange wherein it is stated that no such letter calling for a list
was ever received, he emphatically denied and asserted that "false entry
is not done by the Bank". After verifying the records, he concluded that
all those persons who possess the necessary qualifications as per the service
Rules of the Bank alone were given appointments after completing the
formalities in accordance with the Rules.
One Mr. A.K.Parsi, then Assistant Manager (Admn.) in the Bank deposed before
the same authority that from the year 1995, the writ petitioners were working
with the Bank.
to him, initially they were appointed on ad-hoc basis in the post of
clerk-cum-typist, thereafter, in the month of July, 1995, the employment
exchange was informed and they were appointed on a regular pay-scale. In the
cross- examination, after explaining the procedures to be followed, he asserted
that in the case of the petitioners also those procedures were adopted and
prior notice was published. He further reiterated that all the candidates who
were successful in the interview were appointed and only then the Selection
Committee selected those persons and all the selected candidates were kept
under probation for a period of one year.
also informed before the Addl. Registrar that all the successful candidates who
completed their probation period were asked to execute a bond. He highlighted
that as per the bond, the appointees are to serve the Bank at least for three
years and in fact deposited Rs.5,000/- as security. He also highlighted that though
some of the selectees sought permission to pursue higher studies but permission
was not granted due to the undertaking given by them by way of executing a
The above-mentioned statement of General Manager and Assistant Manager (Admn.)
of the Bank cannot be lightly ignored. If we consider the correspondence
between the Bank and the Registrar in respect of large number of vacancies,
permission by the Registrar, who is none else than the competent authority,
coupled with assertion of two responsible officers, it cannot be said that the
procedures have not been strictly followed. No doubt, the employment exchange
had intimated Lokayukt that there was no such information/request from the
Bank, however, the fact remains that there was no such communication to the
Registrar and under what circumstance, the same was intimated to the Lokayukt.
The above-mentioned particulars show that procedures have been complied with
before selecting those persons in the vacant posts. The private respondents/writ
petitioners demonstrated that taking note of large number of vacancies in the
post of clerk-cum-typist and urgency in filling up the same due to
administrative reasons, after getting proper sanction from the competent
authority i.e. Registrar, intimating the same to the employment exchange, they
were initially appointed for a period of six months on ad-hoc basis and
thereafter by conducting written examination followed by interview, they were
selected. It is also brought to our notice that after completion of
probationary period of one year, these persons were posted in the regular
cadre. Though few selectees were related to the then Managing Director of the
Bank, on this ground alone, their appointments cannot be interfered with. The
High Court has lost sight of relevant material aspects and confirmed the order
of termination mainly based on the report of the Lokayukt.
Now, let us consider complaints, proceedings and the ultimate
decision/recommendation of Lokayukt. The Government of Madhya Pradesh in order
to make provision for the appointment and functions of certain authorities for
the enquiry in the allegations against public servants and for matters
connected therewith, enacted the M.P. Lokayukt Evam Up-Lokayukt Adhiniyam,
1981. As per definition 2(f) Lokayukt means a person appointed as the Lokayukt
under Section 3. Public servant as defined in Section 2(g) reads thus:
(g) "Public servant" means person falling under any of the following
categories, namely,- (i) Minister;
person having the rank of a Minister but shall not include Speaker and Deputy
Speaker of the Madhya Pradesh Vidhan Sabha and Neta Pratipaksha;
officer referred to in clause (a);
officer of an Apex Society or Central Society within the meaning of clause
(t-1) read with clauses (a-1), (c-1) and (z) of Section 2 of the Madhya Pradesh
Co-operative Societies Act, 1960 (No. 17 of 1961);
Any person holding any office in, or an employee of-
Government company within the meaning of Section 617 of the Companies Act,
Corporation or local authority established by State Government under a Central
or State enactment.
7 and 8 speak about matters which may be enquired into by Lokayukt or Up-Lokayukt
and matters not to be enquired by the said authorities. Section 10 makes it
clear that both Lokayukt or Up-Lokayukt in each case before it, decide the
procedure to be followed for making the enquiry and in so doing ensure that the
principles of natural justice are satisfied. Section 12 mandates that after
enquiry into the allegations, the Lokayukt or Up-Lokayukt is satisfied that
such allegation is established, submit a report in writing, communicate his
findings and recommendations along with the relevant documents, materials and
other evidence to the competent authority. Though detailed arguments were
advanced pointing out that Lokayukt was not competent to go into the
appointments that were made, in view of Section 2(g)(iv), we are of the view
that officers of the apex society or central society under M.P. Cooperative
Societies Act are amenable and there is no need to elaborate the said aspect in
this matter since we are concerned about the validity or otherwise of the
appointment of the employees in the Bank. It is seen from the materials that
after the appointments of the aforesaid 58 employees, a complaint was lodged
with Lokayukt by one Shri N.K. Saxena and the said complaint was investigated
by the Lokayukt. Though it is stated that the Lokayukt afforded an opportunity
of hearing to the Chairman of the petitioner Bank as well as officials of the
Bank and Cooperative Department, admittedly the employees were not afforded
notice or opportunity of being heard in the enquiry by the Lokayukt. It is not
in dispute that on receipt of the report of Lokayukt, the competent authority
forwarded the same to the Registrar of Cooperative Societies who, in turn,
without taking a decision or an order by following the service rules or any of
the provisions of the M.P. Cooperative Societies Act mechanically directed the
Managing Director of the Bank to terminate all the appointees. We are of the
view particularly, as observed earlier, though the officers of the apex society
under M.P. Cooperative Societies Act are amenable to the jurisdiction of the Lokayukt,
the persons concerned who are lower-grade employees i.e. clerks-cum-typists
cannot be terminated without following the service rules applicable to them. It
is not in dispute that elaborate procedures are to be followed before
terminating the service of an employee under the provisions of the M.P.
Cooperative Societies Act and the service rules made thereunder. In those
circumstances, in the absence of opportunity to the employees, the termination
order which was sent at the instance of Commissioner, Cooperative Societies
based on the report of Lokayukt cannot be sustained.
the light of the factual details, while reiterating the above-mentioned
principles in the matter of public appointment, we are of the considered view
that the authorities were not justified in terminating the services of these
workmen. In view of our conclusion, it is unnecessary to go into the
correctness or otherwise of Rule 61 of the Rules and the said issue is left
open. We are also of the view and as rightly pointed out by counsel appearing
for the employees that there is no need to remit the matter to the Registrar or
any other authority for determination of their status. The said direction of
the High Court is also liable to be set aside.
the light of the above discussion, we pass the following order:-
conclusion with regard to Rule 61 of the Staff Selection Rules is not warranted
and the issue is left open;
The decision of the Bank as well as Registrar of the Cooperative Societies
terminating the services of the employees based on the report of the Lokayukt
cannot be sustained and the same is liable to be set aside.
In view of our above conclusion, there is no need to remand the issue to the
Registrar or any other authority for adjudication with regard to the status
earned by these employees, consequently the said direction of the High Court is
also set aside.
the result, Civil Appeal No. 4481 of 2007 arising out of SLP (C) No. 12236 of
2006 filed by the Bank is disposed of on the above terms. Civil Appeal No. 4483
of 2007 arising out of SLP (C) No. 19499 of 2006 and Civil Appeal No. 4482 of
2007 arising out of SLP (C) No. 3979 of 2007 filed by the employees are
allowed. However, there shall be no order as to costs.
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