Holding

The Apex Bank had no authority to delegate the power conferred by the Registrar, rendering the dismissal order void.

Summary

The Gwalior District Co‑operative Central Bank Ltd., whose board had been superseded by the Registrar of Cooperative Societies and placed under the control of the Madhya Pradesh State Cooperative Bank (the Apex Bank), dismissed employee Ramesh Chandra Mangal for allegedly overstaying leave. The dismissal was ordered by S.P. Jain, appointed as Chief Executive Officer by the Apex Bank. Various tribunals set aside the dismissal, but the Apex Bank appealed, arguing it had the authority to delegate the power to dismiss under Section 53(4) of the Madhya Pradesh Cooperative Societies Act. The Supreme Court held that the Apex Bank, being an appointee of the Registrar, could not divest the power conferred on it by the Registrar nor invest that power in S.P. Jain; only the Registrar could confer such authority. Consequently, the dismissal order was void, the employee was reinstated, and awarded fifty percent of back wages from 5 June 1968 to 30 September 1984. The appeal by the bank was dismissed with costs.

Issues considered

Whether the Apex Bank had authority under Section 53(4) of the Madhya Pradesh Cooperative Societies Act to delegate the power to dismiss an employee to S.P. Jain.
Whether the dismissal order passed by S.P. Jain was valid and enforceable.

Legislation cited

Madhya Pradesh Cooperative Societies Act, 1960s. 53(4), s. 55(2)

Subjects

Administrative lawDelegation of powersCooperative societiesEmployment terminationReinstatementBack wagesSection 53(4)Apex bank authority

Judgment

\
856

I
'
GWALIOR DISTRICT CO-OPERATIVE
CENTRAL BANK LTD. GWALIOR
B
v.

RAMESH CHANDRA MANGAL AND ORS.

September 26, 1984
c [Y. V. CHANDRACHUD, C. J., D. A. DESAI AND M. P. THAKKAR, JJ.]

Administrative Law-Madhya Pradesh Cooperative Societies Act, 1960, s.
53 (4)-De/egation ofpower-Power conferred upon Apex Bank by Registrar of
Cooperative Societies-Whether Apex Bank could re-delj~gate such power in
some other authority-Held : No. The Apex Bank had no p.1wer to rede/egate its
D authority.

The Board of Directors of the appeilant bank was superseded by the
Registrar of the Cooperative Societies and its powers were: vested in the M.P.
State Cooperative Bank which is an Ape:\ Bank as ''offit:er-in-charge .. of the
superseded bank. The Apex Bank appointed one S.P. Jain as the Chief Execu-
E tive Officer of the appellant bank.

Respondent No. 1, an employee of the appellant bank, was dismissed from
~ervice by S.P. Jain on the ground that he had overstayed the leave granted to
him. The Dy. Registrar of Cooperative Societies set aside the said order of
dismissal and directed reinstatement of respondent No. 1, but it was reversed by
the Addi. Registrar in appeal by the appellant Bank. In further appeal by
F
Respondent No. 1 the Board of Revenue set aside the order of termination.
The High Court in the Writ Petition filed by appellant-Bank agreed - with the
Board of Revenue and also ordered reinstatement of Respondent No. 1.

Dismissing the appeal by the appellant-Bank and m1odifying the order of
the High Court,
G
HELD : The Apex Bank had no authority or po~ver so to appoint S.P. ·
Jain for two reasons : In the first place, the Apex Bank, being an appointee of
the Registrar, had no authority to divest itself of the powE:r conferred upon it by
the Registrar and to in'test S.P. Jain with that power. The only authority which
could have conferred the necessary power on S.P. Jain was the Registrar. The
Registrar did not confer that power upon S.P. Jain under section 53 (4) of the
H Act. · Therefore, the said order had no existence in the eye of law. [858D·E1
COOPT. BANK v. R.C. MANGAL (Chandrachud, C.J.) 857

' 1979
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 996 of A

From the Judgment and Order dated 26.10.78 of the Madhya
Pradesh High Court in Misc. Petition No. 176/74.
B
S.N. Kacker, S.K. Ghambir and Ashok Mahajan for the appel-
!ant.

T.U. Mehta, S.S. Khanduja, R.D. Jain, Mehfooz Khan and
Yashpal Dhingra for the respondents. a
The Judgment of the Court was delivered by

CHaNDRACHUD, C: J. Respondent 1 was appointed as an Agent
of the appellant-Bank, which is a co-operative society registered
under and governed by the provisions of the Madhya Pradesh Co- D
operative Societies Act. 1970. By an order dated June 5, 1968
passed by one S.P. Jain, the services of respondent 1 were r.termina-
ted on the ground that he had over-stayed the leave granted to him.

Aggrieved by that order, respondent 1 raised a dispute under
section 55(2} of the Act, before the Registrar of the Co-operative E
Societies. The Registar referred the matter to the Deputy Register,
who by an order dated February 27, 1972, allowed the claim of
respondent 1 on the ground that the order terminating the services was
not in accordance with Rules 44 and 45 of Co-operative Bank
Employees Service Rules. He also ordered the reinstatment of respon-
dent 1 with full back salary and allowances. In an appeal filed by the F
Bank, the Addi. Registrar took the view that the only reme.dy which
was open to respondent 1 was to claim damages for wrongful termina-
tion of his services and that, therefore, he could not be reinstated in
service Respondent I than filed an appeal before the Board of Revenue
which held by an order dated August 28, 1974, that, S.P. Jain who G'
held the enquiry against respondent 1 and passed the order termina-
ting his services had no power to do so. The Board of Revenue set
aside the ord.er of termination and remanded the matter to the Bank
for disposal in accordance with law. The writ petition filed by the j
Bank in the High Court of Madhya Pradesh was dismissed on
October 26, 1973. According to the High Court, since S.P. Jain
had no authority to hold the enquiry or to pass the impugned order
of dismissal, the said order had no existence in the eye of law and, R
858 SUPREME COURT REPORTS [1985] l s.c.R.

A
therefore, respondent 1 should be deemed to be in service and be
reinstated. Aggrieved by the judgment of the High Court the Bank
r
has filed this appeal.

We are in agreement with the conclusion to which the High
B Court has come, though for somewhat different reasons which are
as follows :-

"The Board of Directors of the appellant-Bank was supersed
ed by the Registrar!of the Co-operative\Societies by an order
dated July 25, 1967 aud its powers were vested in Madhya
Pradesh State Cooperative Bank, Jabalpur, which is an
Apex Bank, as "officer-in-charge" of the superseded Bank.
By Resolution No. 23 dated May 19, 1968, the Apex Bank
confirmed the action of its Chairman/Vice Chairman in
deputing, amongst others S.P. Jain as the Chief Executive
Officer of the superseded Bank. The Appex Bank had no
authority or power so to appoint S.P. Jain for two reasons :
D In the first place, the Apex Bank, being an appointee of
the Registrar, had no authority to divest itself of the power
conferred upon it by the Registrar and to invest S.P. Jain
with that power. The only authority which could have
conferred the necessary power on S.P. Jain was the
Registrar. The Registrar did not confer that power upon
E S.P. Jain under Section 53(4) ot' tLc Act".
In the result, this appeal is dismissed with costs.
We would like to add that as. long as 16 years have passed
since the impugned order was passed and that too by a perspn who
had no authority to pass it. Secondly, the consensus of opinion of
F the various authorities which have dealt with this matter is that, in
overstaying the leave granted to him, respondent 1 was not guilty of
"misconduct". It is desirable and prudent that no further proceed-
ings be taken against respondent 1 for the alleged default on his
part, which is the subject-matter of the present proceedings.

G We modify the order of the High Court by directing that
respondent 1 will be entitled to fifty per cent of the ~back wages and
allowances only from June 5, 1968 until September 30, 1984. The
appellant will take back respondent 1 in its service with effect from
October I, 1984.

M.L.A. Appeal dismissed.
H