Holding

The Bank is an instrumentality of the State and amenable to writ jurisdiction, and the disciplinary proceedings complied with statutory and natural‑justice requirements; therefore the High Court’s order setting aside the dismissals is overturned.

Summary

The Supreme Court examined three disciplinary dismissals of employees of the Uttar Pradesh State Co‑operative Land Development Bank Ltd. (the Bank). The High Court had held that the Bank was not an "authority" under Article 12 and that the dismissals violated natural‑justice rules, setting aside the orders. The Supreme Court held that the Bank, though a co‑operative society, is an instrumentality of the State because its affairs are controlled by the Government and its managing officials are on deputation, making it amenable to writ jurisdiction under Article 226. It further found that all statutory requirements and the principles of natural justice were complied with in the disciplinary proceedings. Consequently, the High Court’s finding was reversed and the writ petitions were dismissed.

Issues considered

Whether the Uttar Pradesh State Co‑operative Land Development Bank Ltd. qualifies as an "authority" or "instrumentality of the State" within the meaning of Article 12, making it subject to writ jurisdiction under Article 226.
Whether the disciplinary proceedings leading to the dismissal of the three employees complied with the U.P. Co‑operative Societies Employees' Service Regulations, 1975, the Service Rules and the principles of natural justice.
Whether Article 226 creates a distinction between public law and private law remedies.
Interpretation of the term "person" under Section 2(42) of the General Clauses Act, 1897 for the purpose of Article 226.

Legislation cited

Constitution of Indias. Article 12, s. Article 226, s. Article 367, s. Article 372
General Clauses Act, 1897s. Section 2(42)
Uttar Pradesh Co-operative Societies Act, 1965s. Section 122

Subjects

Article 12Article 226instrumentality of Statewrit jurisdictionnatural justicedisciplinary proceedingspublic law vs private lawGeneral Clauses Actco‑operative bankservice regulations

Judgment

U.P. STATE CO-OPERATIVE LAND DEVELOPMENT BANK LTD. A
v.
CHANDRA BHAN DUBEY AND ORS.

DECEMBER 18, 1998
' '
B
[S. SAGHIR AHMAD AND D.P. WADHWA, JJ.]

Constitution of India, 1950-Articles 12, 226-Uttar Pradesh Co-
operative Land Development Bank constituted under Uttar Pradesh Co-
operative Land Development Bank Act, 1964-Writ petition against- C
Maintainability of-Amenability to Writ jurisdiction of-Employees of the
appellant Bank being governed by Statutory rules and regulations-
Managing Director and the Chief General Manager of the appellant being
officials of the State sent on deputation to the appellant-Held, the affairs
of the appellant bank are controlled by the State Govt., though ii functions
as Co-operative Society amJ thus an instrumentality of the State or authority D
as mentioned under Article I 2-Uttar Pradesh Co-operative Land
Development Bank Act, 1964-U.P. Co-operative Societies Act, 1965-Section
122.

Article 226-Public law and Private law-Whether differentiated under- E
Held, prima facie from the language of Article 226 there does not appear to
exist a divide between the Public law and Private Law.

Articles 367(1); 372-General Clauses Act, 1897-Applicability to
interpretation of constution.

Service ·law: F
U.P. Co-operative Societies Employees' Service Regulations, 1975-
. Regulations 2, Clause XI; 5; 102; 103; Chapter Vil, Regulations 84; 85-
Disciplinary Proce.edings-Rules of Natural Justice-Compliance of-
Respondents served with Charge sheets charging them with various charges-
One of them taking part fully in the proceedings conducted by the Inquiry G
Officer while the other two respondents not doing so though replying to the
Show cause notice-Disciplinary authority accepting the report of the Inquiry
Officer and dismissing all the three respondents-Rules of Natural Justice-
Whether viliated-Held, all the requirements for the initiation and conclusion
of the disciplinary proceedings have been followed and rules of natural H
659
660 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A justice observed-Respondents being apprised of the evidence against each
of them and given opportunity of being heard in person and also to produce
evidence in defence-Finding of the High Court that rules of Natural justice
were vitiated set aside-UP. Rajya Sahakari Bhumi Vikas Bank Employees
Service Rules, 1976-Rule 89-U.P. Co-operative institutional Services Board

B Words and Phrases-Expression "Person" as accruing in Section 2(42)
of General Clauses Act, 1897-Meaning of

The Respondents in CA 514/85; CA 515/85 and 516/85 while working
as Branch Accountants and Driver in the Appellant Bank were served with
Chargesheets charging them with various charges. The Respondent in CA
C 514/85 replied to the chargsheet and took part fully in the proceedings
conducted by the Inquiry Officer. The Respondents in CA 515/85 and 516/
85 though replied to the show cause notice, did not take any part in the
proceedings. The disciplinary authority accepted the report of the Inquiry
Officer in respect of all the three respondents and dismissed them from
D service. Against the dismissal orders, three writ petitions were filed in the
High Court. The High Court while holding that the appellant was an
"authority" or "state" within the meaning of Article 12 of the Constitution
was of the view that the dismissal orders were vitiated by non-compliance
with the rules of natural justice and also in violation of the statutory rules
as applicable to the employees of the appellant and allowed the writ petitions.
E Hence the present appeals.

On behalf oft.he appellant Bank it was contended that the appellant was
not an "authority" or instrumentality of the State within the meaning of
Article 12 of the Constitution and hence not amenable to writ jurisdiction.
It was further contended that action against the respondents had been taken
F in accordance with the Rules as applicable to the employees of the Bank. The
orders of dismissal of the respondents were passed with he prior concurrence
of the U.P. Co-Operative Institutional Services Board as required under Rule
89 of the U.P. Rajya Sahkari Bhumi Vikas Bank EmployP.es Service Rules.

Allowing the appeal, this Court
G
HELD: I. All the requirements for the initiation and conclusion of the
disciplinary proceedings have been followed in the present case and rules of
natural justice observed. Proceedings against the respondents were initiated
on the reports of the officers under whom they were working and these
reports formed part of the evidence in the proceedings. An inquiry proceeding
H is not held as if it a trial in a criminal case or as of it is a civil suit. The
U.P. STATE CO-OP. LAND DEVE. BANK LTD. v. C.B. DUBEY 661
respondents were apprised of the evidence against each of them and given A
opportunity of being heard in person and also to produce evidence in defence.
Nothing more was required on the part of the Inquiry Officer. Procedure
after the receipt of the reports of the Inquiry Officer was followed as
prescribed. The High Court, therefore; fell in error in returning a finding
that rules of natural justice or the Regulations and Service Rules which are B
statutory in nature have not been followed.

Nagendra Nath Bora & Anr. v. Commissioner of Hills.

Division and Appeals, Assam & Ors., AIR (1958) SC 398, referred to.

2.1. The affairs of the appellant are controlled by the State Government C
though it functions as a co-operative society and it is certainly an extended
arm of the State and thus an instrumentality of the State or authority as
mentioned under Article 12 of the Constitution. The service condition of the
employees of the appellant particularly with regard to disciplinary proceedings
against them are statutory in nature and thus writ petition was maintainable D
against the appellant. (671-H; 672-A; 679-A)

2.2. The Managing Director and Chief G~eral Manager of the appellant
are officials of the State sent on deputation to the appellant. These two
officers are at the helm of the affairs of the appellant. It is difficult to
imagine a situation where a Government sends one of its employees on E
deputation to head a body or institution not controlled by that Government
even though the employee may be paid out of the funds of that body or
institution unless there is specific provision of law so entitling the
Government. Service Rules have been framed under the statute and those
Rules have the approval of a statutory body. Exercise of power of dismissal
by the appellant has to be in accordance with the statutory regulations and F
with the approval of the statutory body. (672-8-Cj

Sukhdev Singh and Ors. v. Bhagatram Sardar Singh Raghuvanshi and
Anr... (1975)1SCC421, referred to.
G
2.3. In view of the fact that control of the State Government on the
appellant is all pervasive and the employees had statutory protection and
therefore the appellant being an authority or even instrumentality of the
State would be amenable to writ jurisdiction of the High Court under Article
226 of the Constitution. 1t may not be necessary to examine any further the
question if Article 226 makes a divide between public law and private law. H
662 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A Primafacie from the language of Article 226 there does not appear to exist
such a divide. To understand the explicit language of the Article it is not
necessary for this Court to rely on the decision of English Courts as rightly
cautioned by the earlier Benches of this Court. Article 226 while empowering
the High Court for issue of orders or directions to any authority or person ,..
B does not make any such difference between public functions and private
functions. (677-H; 678-A-B)

2.4. When the language of Article 226 is clear, no shackles can be put
on the High Courts to limit their jurisdiction by putting an interpretation
on the words which would limit their jurisdiction. When any citizen or
C person is wronged the High Court will step in to protect him, be that wrong
be done by the State, an instrumentality of the State, a company or a co-
.
operative society or association or body of individuals whether incorporated
or not, or even an individual. Right that is infringed may be under Part III
of the Constitution or any other right which the law validly made might
confer upon him. 1678-E-F)
D
3. Under clause (1) of Article 367 unless the context otherwise requires,
the General Clauses Act, 1897, Shall, subject to any adaptations and
modifications that may be niade therein under Article 372 apply for the
interpretation of the Constitution as it applies for the interpretation of an
E Act of the Legislature of the Dominion of India. "Person" under Section
2(42) of the General Clauses Act shall include any company, or association
or body of individuals, whether incorporated or not. Constitution is not a
statue. It is a fountain head ofall the statutes. (678-D-E)

Engineering Mazdoor Sabha, (1963( Suppl. l SeR 625,640, affirmed.
F
Rohtas Industries ltd and Anr. v. Rohtas Industries Staff Union and Ors.,
(1976) 2 SCC 82; life Insurance Corporation of India v. Escorts ltd. and
Ors., (1986) I sec 264; Andi Mukta S.M. V.S.S.J M.S. Trust and Ors. v. V.R.
Rudali and Ors., (1989) 2 SCC 691; Executive Committee of Vaish Degree
G College Sham/i and Ors. v. Lakshmi Narain and Ors., (1976) 2 sec 58;
Deepak Kumar Biswas v. Director of Public Instructions, (1987) 2 SCC 252;
Dwarkanath HUF v. ITO, Special Circle Kanpur and Anr., (1965) 3 SCR
536; Praga Tools Corporation v. Shri C.A. /manual, (1969) 1 SCC 585; Air
India Statutory Corporation and Ors. v. United Labour Union and Ors., [1997)
9 SCC 377; Sri Konaseema Co-operative Central Bank Ltd. and Amalapuram
H and Anr. v. N. Seetharama Raju, AIR (1990) AP 171, referred to.
U.P. STATE CO-OP. LANDDEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA, J.] 663
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 514of1985 A
Etc.

From the Judgment and Order dated 24.2.84 of the Allahabad High Court
in W.P.Nos. 4727of1983.

H.S. Gururaja Rao, K.R. Nagaraja and K.K. Tyagi for the Appellant. B
Anil Kumar Gupta and D.K. Gupta for the Respondents.

The Judgment of the Court was delivered by

D.P. WADHW A, J. These three appeals are directed against the common C
judgment dated February 24, 1984 of the Division Bench of the Allahabad
High Court (Lucknow Bench) holding that the appellant is an "authority" and
an instrumentality of the State and as such amenable to the writ jurisdiction
of the High Court and setting aside thi: dismissal orders passed against the
respondents being violative of the Service Rules as applicable to them.
D
Respondent - Chandra Bhan Dubey (CA 514/85) was working as a
Branch Accountant in the Nakur Branch, District Saharanpur of the appellant.
It was alleged that he committed various irregularities and a charge-sheet
dated June 27, 1980 was served upon him containing various charges. These
included that Dubey locked the Bank premisses affecting the very prestige E
of the Bank as well as of Branch Manager; that he disclosed confidential letter
of the Bank to an unauthorized person; that he did not manage properly to
keep with him the cash and draft receipt books failure of which facilitated Shri
Birendra Kumar Sharma, Assistant Accountant of the Bank (since suspended)
to commit embezzlement and in that he conspired with Sharma; and that he
derelicted in the discharge of his duties. Dubey was apprised of the evidence F
proposed to be used in the disciplinary proceedings.

In the cases of Kanta Prasad Sharma (CA No. 515/85) and Bhaskara
Chandra Uppadhyaya (CA No. 516/85), Driver and Branch Accountant of the
Bank respectively charges were that they being the full time employees of the G.
bank participated in the strike which was banned in the Bank by the State
Government and thus declared illegal which disrupted the normal working of
the Bank; that both of them created an atmosphere of terror along with .others
and also obstructed other employees of the Bank from working; and thus they
instigated them to strike; and that they created indiscipline in the Bank by
participating and organising a meeting illegally in the premises of the Bank H
664 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A during office hours without prior pennission of the competent authority in .
which meeting slogans were raised, exciting speeches delivered and abusive
words used against the Bank management and they were thus guilty of
misconduct; that they caused dis-reputation of the Bank by issuing pamphlets
containing baseless allegations against the higher officials of the Bank; that
B with the object of organising an unlawful strike they established a "Sangharsh
Kosh" and demanded Rs. IO from every employee of the Bank for the purpose;
and that they organised Employee Joint Action Committee of the Bank without
proper registration under the Rules and without prior approval of the competent
authority and associated an outsider as convener in that Committee and thus
created disorder and disturbed the peace in the premises of the Bank. Against
C Kanta Prasad Sharma it was also a charge that he was suspended by order
dated June 19, 1981 but he did not hand over the charge fonnally and by
absenting himself in an unauthorised way and further that after his suspension
he was attached to Regional Office, Bareilly but he did not join there so far.
Similarly, Bhaskara Chandra Uppadhyaya was further charged that when he
was suspended on June 19, 1981 and attached with Regional Officer, Gorakhpur,
D he did not join there. The evidence on which the charges were framed and
which were to be proposed to be used during the course of disciplinary
proceedings were stated in the charge-sheets.

Respondent - Dubey replied to the charges denying the same. He said
E he would like to appear in person before the Inquiry Officer and put up his
version. He wanted certain documents which he said were not made available
to him along with the charges and on that account he said he was not in a
position to examine and cross-examine the witnesses. Dubey was granted
opportunity to inspect the documents which he did. He again submitted his
reply and ended up by stating as under :-
F
"Respected Sir, Regarding all the above reports of embezzlement I
wish to state that I have done my duty to the best of my ability and
in the best interest of Bank and the customers. I am absolutely
innocent. Therefore, I may kindly be exempted from the charges framed.
If any error is committed in letter, I may be excused. In future on the
G occasion of personal hearing I will clear my position after accepting
preliminary and detailed reports.''

Dubey was then infonned by the Inquiry Officer to present himself
before him for hearing and he was asked to give in writing or orally whatever
he wanted to say in his defence. He did appear before the Inquiry Officer on
H the date and time fixed. Thereafter he sent further reply and stated that he
U.P. STATE CO-OP. LAND DEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA,J.] 665

had nothing to say more in his defence. The Inquiry Officer sent his report A
holding charges 2 to 5 proved against him. A show cause notice was issued
to Dubey as to why he be not dismissed from the service of the Bank. He
gave reply to the show cause notice. After receipt of his answer to the show
cause notice the disciplinary authority held the charges established against
Dubey and by order dated July 22, 1983 dismissed him from Bank's service.
B
Respondent - Sharma replied to the show cause notice. He did not ask
for any personal hearing. The Inquiry Officer submitted his report holding the
charges proved against Sharma. He was served with a show cause notice as
to why he be not dismissed from the service of the Bank. He gave no reply.
The disciplinary authority held the charges proved and ordered dismissal of C
Sharma by order dated July 20/22, 1983.

Respondent Uppadhyaya submitted his reply to the charge-sheet served
upon him. He did not desire any personal hearing and only wanted that his
explanation as given in his reply be considered sympathetically. The Inquiry
Officer found the charges proved against Uppadhyaya and submitted his D
report to the disciplinary authority. Uppadhyaya was served with a show
cause notice as to why he be not dismissed from service in view of the
charges proved against him. He did not send any reply to that. The disciplinary
authority accepted the report of the Inquiry Officer and by order dated July
20/22, 1983 dismissed Uppadhyaya from service of the Bank. E

Against the dismissal orders three writ petitions were filed in the High
Court which, as noted above, were allowed by the impugned judgment. The
High Court negatived the plea of the appellant that it was not amenable to
writ jurisdiction being not an "authority" or "State" within the meaning of
Article 12 of the Constitution. On merit the High Court was of the view that F
relevant Rules regarding holding of inquiry against the delinquent employees
were not followed and that the orders of dismissal did not contain any reason.
High Court help that it was not necessary for the appellant to give any show
cause notice to the respondents proposing order of dismissal but held that
if it was not necessary for the bank to send copy of the report of the inquiry G
officer then the punishing authority should have either given reasons for
coming to the conclusion of the guilt of the respondents or enclosed the
report which it had accepted. High Court was thus of the view that the
dismissal order were vitiated by non-compliance with the rules of natural
justice and also in violation of the statutory rules as applicable to the
employees of the appellant. High Court, however, left it open to the appellant, H
666 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A if it so chose, to proceed with the inquiry afresh from the stage after the
receipt of the replies from the respondents to the charge-sheets served upon
them.

The impugned judgment is assailed before us. It is submitted that
Qrders of dismissal of the respondents were passed with the prior concurrence
B of the U.P. Co-operative Institutional Services Board (for short, 'the Service
Board') as required under Rule 89 of the U.P. Rajya Sahkari Bhumi Vikas Bank
Employees Service Rule (for short, 'Service Rules'). It is stated that appellant
is not an "authority" or instrumentality of the State and no writ could be
issued against it and further that the action against the respondents had been
C taken in accordance with the Rules as applicable to the employees of the
Bank.

Before we consider the rival contentions it may be appropriate at this
stage to set out the relevant provisions of law as applicable in these appeals.

D The appellant though a co-operative society. registered under the U.P.
Co-operative Societies Act, I965 (for short, "Societies Act') is constituted
under the Utter Pradesh Co-operative Land Development Bank Act, 1964 (for
short, the 'Bank Act'). It is, therefore, governed by the provisions of both
these Acts and the Rules framed thereunder. Section 122 of the Societies Act
prescribes constitution of an authority to control employees of co-operative
E societies. This Section we may reproduce as under :
"122. Authority to control employees of co-operative societies:- (I)
The State Government may constitute an authority or authorities, in
such manner as may be prescribed, for the recruitment, training and
disciplinary control of the employees of co-operative societies, or a
F class of co-operative societies, and may require such authority or
authorities to frame Regulations regarding recruitment, emoluments,
terms and conditions of service including disciplinary control of such
employees and, subject to the provisions contained in Section 70,
settlement of disputes between an employee of a co-operative society
G and the society.

(2) The Regulations framed under sub-section (1) shall be subject to
the approval of the State Government and shall, after such approval,
be published in the Gazette, and take effect from the date of
such publication and shall supersede any Regulations made under
H Section 121."
U.P. STATE CO-OP. LANDDEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA,J.) 667
The State Government constituted Uttar Pradesh Co-operative A
· Institutional Service Board (the Service Board). This Service Board with the
approval of the Governor of the State ofUttar Pradesh promulgated Regulations
called U.P. Co-operative Societies Employees' Service Regulations, 1975 (for
short, the 'Regulations') which were published in the U.P. Gazette dated 6th
January 1976. The Regulations were applicable with effect from the date of
their publication in the U.P. Gazette. Clause (xi) of Regulation 2 defines B
'employee' which means a person in whole-time service of a co-operative
society, but does not include a casual worker employed on daily wages or a
person in part-time service of a society. Under Regulation 5 recruitment for
all appointments in a co-operative society shall be made through the Board
which means the U.P. Co-operative Institutional Service Board. C
Under Regulation 102 a co-operative society is empowered to frame
service rules for its employees which however, are to be subject to the
provisions of the Regulations. Under Regulations 103, the Regulations shall
be deemed to be inoperative to the extent they are inconsistent with any of
the provision of the Industrial Disputes Act, 1947, U.P. Dookan Aur Vanijya D
Adhisthan Adhiniyam, 1962. Workmen's Compensation Act, 1923 and any
other labour laws for the time being in force. Regulations 102 and 103 may
be set out as under:

"I 02. (I) Subject to the provisions of these regulations, a co-operative
society shall within three months from the date of coming into force E
of these regulations (unless an extension of time is allowed by the
Board in writing frame service rules for its employees.

(ii) The service rules framed under sub-section (i) shall be submitted
to the Board for approval and shall be operative only after the approval.
F
(iii) Notwithstanding anything contained in these Regulations the
existing employees shall have an option to continue to be governed
by the existing service rules, if any, in the society only in respect of
their emoluments and benefits or to opt the new service rules on these
matters.
G
Explanations :- (I) Provisions relating to pay, increments and allowances
(other than travelling allowance), probation, confirmation, retirement,
provident fund and gratuity shall be deemed as included in the term
"emoluments and benefits".
(2) In case of any doubt or dispute in interpretation in respect of the H
668 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A matter mentioned in (I) above, reference shall be made to the Board
whose decision shall be final.

(3) Existing service rules means authentic service rules framed by and
with the approval of the competent authority.

B 103. The provisions of these regulations to the extent of their
inconsistency, with any of the provisions of the Industrial Disputes
Act, 1947. U.P. Dookan Aur Vanijya Adhisthan Adhiniyam, 1962,
Workmen's Compensation Act, 1923 and any other labour laws for the
time being in force, if applicable to any co-operative society or class
of co-operative societies, shall be deemed to be inoperative.
c
Chapter VII of the Regulations contains provisions for penalties,
disciplinary proceedings and appeals. Under Regulation 84, an employee
can be removed from service and he is to be provided with the copy
of the order of punishment. The penalty of removal from service
cannot be imposed without recourse to disciplinary proceedings. An
D
err.ployee cannot be removed or dismissed by an authority other than
by which he was appointed unless the appointing authority has made
prior delegation of such authority to such other person or authority
in writing. Regulation 85 provides in detail as to how disciplinary
proceedings are to be conducted. Any order of removal or dismissal
E from the service or reduction in rank or grade held substantively by
the employee cannot be passed except with the prior concurrence of
the Service Board as required under Regulation 87.

Under Regulation 85 disciplinary proceedings against an employee shall
F be conducted by the Inquiry Officer with due observance of the principles
of natural justice for which it shall be necessary that -

"(a) the employee shall be served with a charge-sheet containing
specific charges and mention of evidence in support of each charge
and he shall be required to submit explanation in respect of the
G charges within reasonable time which shall not be less than fifteen
days;

(b) such an employee shall also be given an opportunity to produce
at his own cost or to cross-examine witnesses in his defence and shall
also be given an opportunity of being heard in person, if he so
H desires;
U.P. STATE CO-OP. LAND DEVE. BANK LTD. v. C.B. DUBEY (D.P. WADHWA, J.] 669

( c) if no explanation in respect of charge-sheet is received or the A
explanation submitted is unsatisfactory the competent authority may
award him appropriate punishment considered necessary."

Under Regulation 102 of the Regulations appellant has framed Service
Rules for its employees called the U.P. Rajya Sahakari Bhumi Vikas Bank
Employees Service Rules 1976. These Rules have been duly approved by the B
authority under Section 122 of the U.P. Co-operative Societies Act, 1965. For
the purpose of any disciplinary proceeding against the employee of the
appellant these Service Rules are to be in conformity with the Regulations.
The requirement for disciplinary proceedings in case where penalty of dismissal
is imposed are that (I) disciplinary proceedings shall be taken against the C
employee on a report made to this effect by the inspecting authority or an
officer of the Bank under whose control the employee is working. (2) the
disciplinary proceedings shall be conducted by Inquiry Officer appointed by
the appointing authority, (3) the Inquiry Officer shall observe the priqciples
of natural justice for which it shall be necessary that the employee shall be
served with a charge sheet containing specific charges, the evidence in D
support of each charge and the employee shall be required to submit explanation
in respect of the charge within a reasonable time which shall be not less than
15 days. The employee shall also be given an opportunity to cross examine
or to produce witnesses in his defence at his own cost and shall also be given
an opportunity of being heard in person, if he so desires. If no explanation E
in respect of charge sheet is received or the explanation submitted is
unsatisfactory the competent authority may award him punishment considered
necessary. Order imposing penalty or dismissal from service shall not be
passed against the employee except with the prior concurrence of the Service
Board. A copy of the order of punishment shall be given to the employee
concerned. No penalty or dismissal from service shall be imposed unless a F
show cause notice has been given to the employee and he has either failed
to reply within the specified time or his reply found to be unsatisfactory by
the competent authority.

It will be seen that all the requirements for the initiation and conclusion G
. of the disciplinary proceedings have been followed in the present case and
rules of natural justice observed. Proceedings against the respondents were
initiated on the reports of the officers under whom they were working and
these reports formed part of the evidence in the proceedings. An inquiry
proceedings is not held as if it is a trial in a criminal case or as if it is a civil
suit. Rules of natural justice require that a party against whom an allegation H
670 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A is being inquired into should be given a hearing and not condemned unheard.
As to what are the rules of natural justice to be followed in a particular case
would depend upon the circumstances in each case and must also depend on
the provisions of law under which the charges are being inquired into in the
disciplinary proceedings. In Nagendra Nath Bora & Anr. v. Commissioner of
B Hills Division and Appeals, Assam & Ors., AIR (1958) SC 398 at p.409) this
Court held that "the rules of natural justice vary with the varying constitution
of statutory bodies and the rules prescribed by the Act under which they
function; and the question whether or not any rules of natural justice had
been contravened should be decided not under any pre-conceived notions,
but in the light of the statutory rules and provisions." The respondents were
C apprised of the evidence against each of them and given opportunity of being
heard in person and also to produce evidence in defence. Nothing more was
required on the part of the Inquiry Officer. Procedure after the receipt of the
reports of the Inquiry Officer was followed as prescribed. In our view, the
High Court, therefore, fell in error in returning a finding that rules of natural
justice or the Regulations and Service Rules which are statutory in nature
D have not been followed.
We now consider the question if the appellant is amenable to the writ
jurisdiction of the High Court under Article 226 of the Constitution.

Article 226, in relevant part, is as under :
E
~'226. Power of High Courts to issue certain writs. -(I) Notwithstanding
anything in Article 32 every High Court shall have power, throughout
the territories in relation to which it exercises jurisdiction, to issue to
any person or authority, including in appropriate cases, any
Government, within those territories directions, orders or writs,
F including writs in the nature of habeas corpus, mandamus, prohibition,
quo warranto and certiorari, or any of them, for the enforcement of
any of the rights conferred by Part III and for any other purpose."

We have seen above that the appellant is functioning as a co-operative
G society under the Societies Act but it has been constituted under the provision
of the Bank Act. In exercise of power conferred on the State Government by
Section 30 of the Bank Act, Rules have been framed called "the U.P. Cooperative
Land Development Banks Rules, 1971 ". For the service condition of the
employees of the appellant, we have to refer to the Societies Act and the
Regulations framed by the U.P. Cooperative Institutional Service Board
H constituted under Section 122 of the Societies Act as well as to the Service
U.P. STATE CO-OP. LAND DEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA, J.J 671

Rules framed by the appellant under Regulation I02 of the Service Regulations. A
Service Rules framed by the appellant shall be operative only after their
approval by the Institutional Service Board. Any order of dismissal by the
appellant can be issued only after its approval by the aforesaid Board. If we
refer to the Bank Act, it will be seen that under Section 3 there shall not be
more than one State Land Development Bank for the whole of the State of
Uttar Pradesh and that sole Bank is the appellant. It has thus exclusive B
jurisdiction for whole of the State of Uttar Pradesh. It can admit as members
Land Development Banks whose number can be as many as may be deemed
necessary by the Registrar of the Cooperative Society for the State of Uttar
Pradesh. Appellant is also vested with various powers under the Bank Act
which powers are not available to a cooperative society registered merely C
under the Societies Act. If we refer to some of the provisions of the Bank Act
it will be seen that the Registrar of the cooperative societies for the State of
Uttar Pradesh shall be the Trustee for the purpose of securing the fulfillment
of the obligations of the State Land Development Bank to the holders of
debentures issued by the Board of Directors. The powers and functions of
the Trustee shall be governed by the provisions of the Bank Act and by the D
instrument of Trust executed between the appellant and the Trustee as modified
or substituted from time to tim~ by their mutual agreement and with the
approval of the State Government. Trustee is to be a corporation sole. The
Board of Directors. of the appellant may from time to time issue debentures
of various denominations with the previous sanction of the State Government E
and the Trustee and_ subject to such terms and conditions as the State
Government may impose against the unconditional guarantee by the State
Government for repayment in full of the principal and payment of interest ·
thereon or on the security of mortgages, charges or hypothecations etc.
Under Section 9 of the Bank Act, the State Govemm . constitutes a Guarantee
Fund on such terms and conditions as it may deem fir, for the purpose of F
meeting losses that might arise on account of loans advanced by the Land
Development Banks on the security of mortgages not being fully recovered
due to such circumstances as may be prescribed. The appellant and the Land
Development Banks shall contribute to such fund at such rates as may be
prescribed. Under Rule 6 of the Bank Rules the Guarantee Fund shall be G
maintained by the Finance Department of State Government in the Public
Accounts Section of the State Accounts and all contributions to the Fund
and interest earned on investm'!!nt made from the fund shall be credited direct
to the Fund. It is not necessary for us to quote various other sections and
rules by all these provisions unmistakably show that the affairs of the appellant
are controlled by the State Government though it functions as a cooperative H
672 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A society and it is certainly an extended arm of the State and thus an·
instrumentality of the State or authority as mentioned under Article 12-ofthe
Constitution.

We also find from the Service Rules that the Managing Director and
Chief General Manager of the appellant are officials of the State sent on
B deputation to the appellant. These two officers are at the helm of the affairs
of the appellant. It is difficult to imagine a situation where a Government
sends one of its employees on deputation to head a body or institution not
controlled by that Government even though the employee may be paid out
of the funds of that body or institutions unless there is specific provision of
C law so entitling the Government. We also find that Service Rules have been
framed under the statute and those Rules have the approval of a statutory
body. Exercise of power of dismissal by the appellant has to be in accordance
with the statutory regulations and with the approval of the statutory body.
In Sukhdev Singh and Others v. Bhagatram Sardar Singh Reghuvanshi and
Another, [1975] I SCC 421, a Constitution Bench of this Court held that
D Regulations being framed under statutory provisions would have the force of
law.

The language of Article 226 does not admit of any limitation on the
powers of High Court for the exercise of jurisdiction thereunder though by
various decisions of this Court with varying and divergent views it has been
E held that jurisdiction under Article 226 can be exercised only when body or
authority, decision of which is complained, was exercising its power in the
discharge of public duty and that writ is a public law remedy. In Rohtas
Industries Ltd., & Anr. v. Rohtas Industries Staff Union & Ors .. (1976] 2 SCC
82, it was submitted before the Constitution Bench that an award under
F Section I OA of the Industrial Disputes Act, 1947 savours of a privates
arbitration and was not amenable to correction under Article 226 of the
Constitution. The Court said as under :

"The expansive and extraordinary power of the High Courts under
Article 226 is as wide as the amplitude of the language used indicates
and so can affect any person even a private individual - and be
,G available for any (other) purpose - even one for which another remedy
may exist. The amendment to Article 226 in 1963 inserting Article 226
(IA) reiterates the targets of the writ po\\'er as inclusive of any person
by the expressive reference to "the residence of such person". But it
is one thing to affirm the jurisdiction, another to authorise its free
H exercise like a bull in a china shop". This Court has spelt out wise and
U.P. STATE CO-OP. LAND DEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA,J.] 673
clear restraints on the use of this extraordinary remedy and High A
Courts will not go beyond those wholesome inhibitions except where
the monstrosity of the situation or other exceptional circumstances
cry for timely judicial interdict or mandate. The mentor of law is justice
and a potent drug should be judiciously administered. Speaking in
critical retrospect and portentous prospect, the writ power has, by B
and large, been the people's sentinel on the qui vive and to cut back
on or liquidate that power may cast a peril to human rights. We hold
that the award here is not beyond the legal reach of Article 226,
although this power must be kept in severely judicious leash.

Many rulings of the High Courts, pro and con, were cited before C
us to show that an award under Section 1OA of the Act is insulated
from interference under Article 226 but we respectfully agree with the
observations of Gajendragadkar, J. (as he then was) in Engineering
Mazdoor Sabha, [1963] Supp. 1 SCR 625, 640 which nail the argument
against the existence of jurisdiction. The learned Judge clarified at
~~: D
"Article 226 under which a writ of certiorari can be used 'in
an appropriate case, is, in a sense, wider than Article 136, because ·
the power conferred on the High Courts to issue certain writs
is not conditioned or limited by the requirement that the said
writs can be issued only against the orders of courts or tribunals. E
Under Article 226(1 ), an appropriate writ can be issued to any
person or authority, including in appropriate cases any
Government, within the territories prescribed. Therefore, even if
the arbitrator appointed under Section 1OA is not a tribunal
under Article 136 in a proper cases.' a writ may lie against his F
award' under Article 226".

In Life Insurance Corporation of India v. Escorts Ltd. and Ors., [1986]
1 SCC 264 another Constitution Bench had to say as under :

"It was, however, urged by the learned counsel for the company that G
the Life Insurance Corporation was an instrumentality of the State and
was, therefore, debarred by Article 14 from acting arbitrarily. It was,
therefore, under an obligation to state to the court its reasons for the
resolution once a rule nisi was issued to it. If it failed to disclose its
reasons to the court, the court would presume that it had no valid
reasons to give and its action was, therefore, arbitrary. The learned H
674 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A counsel relied on the decisions of this Court in Sukhdev Singh,
Maneka Gandhi, International Airport Authority and Ajay Hasia.
The learned Attorney General, on the other hand, contended that
actions of the State or an instrumentality of the State which do not
properly belong to the field of public law but belong to the field of
private law are not liable to be subjected to judicial review. He relied
B on O'Reilly v. Mackman, Davy V. Spelthone, I congress del Partido,
R. V. East, Berkshire Health Authority and Redhakrishna Aggarwal
v. State of Bihar. While we do find considerable force in the contention
of the learned Attorney General it may not be necessary for us to
enter into any lengthy discussion of the topic, as we shall presently
c see. We also desire to warn ourselves against readily referring to
English cases on questions of Constitutional Law, Administrative Law
and Public Law as the law in India in these branches has forged ahead
of the law in England, guided as we are by our Constitution and
uninhibited as we are by the technical rules which have hampered the
development of the English law".
D
In Andi Mukta SM V.S.S.JMS. Trust & Ors. v. V.R. Rudani & Ors.,
[ 1989] 2 sec 691 a two Judge Bench of this Court was considering the
question of "issue of a writ of mandamus or writ in the nature of mandamus
or any other appropriate writ or direction or order directing the appellant trust
E and its trustees to pay to the respondents their due salary and allowances
etc. in accordance with the Rules framed by the University and to pay them
compensation under certain Ordinance of the University". The High Court
before which the issue was raised held in favour of the respondents. This
Court noted that the essence of the attack on the maintainability of the writ
petition under Article 226 by the appellant was that it being a trust registered
F under the Bombay Public Trust Act was managing the college where the
respondents were employed was not amenable to writ jurisdiction of the High
Court. In other words, the contention was that trust being a private institution
against which no writ of mandamus could be issued. In support of the
contention, the appellant referred two decisions of this Court : Executive
G Committee of Vaish Degree College Shamli and Ors. v. Lakshmi Narain and
Ors., [1976] 2 SCC 58 and Deepak Kumar Biswas v. Director of Public
Instructions, [ 1987] 2 SCC 252. This Court, however distinguished those two ·"ti,
decisions and said that the facts before it were different and that there was ~
no plea for specific performance of contractual service by the respondents
now in the case before it. Respondents were not seeking a declaration that
H they be continued In service and they were not asking for mandamus to put
U.P. STATE CO-OP. LAND DEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA, J.] 675

them back into the college. But they were claiming only the terminal benefits A
and arrears of salary payable to them. The question thus was whether the
trust could be compelled to pay by writ of mandamus? The Court noted the
observations of Subba Rao, J. in Dwarkanath and H.U.F. v. ITO, Special
Circle Kappur and Anr., [1965) 3 SCR 536 as under:

"This article is couched in comprehensive phraseology and it ex facie B
confers a wide power on the High Courts to reach injustice wherever
it is found. The Constitution designedly used a wide language in
describing the nature of the power, the purpose for which and the
person or authority against whom it can be exercised. It can issue
writs in the nature of prerogative writs as understood in England; but C
the scope of those writs also is widened by the use of the expression
"nature", for the said expression does not equate the writs that can
be issued in India with those in England, but only draws an analogy
._from them. That apart, High Courts can also issue directions, orders
or writs other than the prerogative writs. It enables the High Courts
to mould the reliefs to meet the peculiar and complicated requirements D
of this country. Any attempt to equate the scope of the power of the
High Court under Article 226 of the Constitution with that of the
English courts to issue prerogative writs is to introduce the unnecessary
procedural restrictions grown over the years in a comparatively small
country like England with a unitary form of Government into a vast E
country like India functioning under a federal structure. Such a
construction defeats the purpose of the article itself."

The Court also noted the observations of this Court in Praga Tools
Corporation v. Sh. C.A. lmanual, [1969) 1 SCC 585 as under:

"It is, however, not necessary that the person or the authority on
F
whom the statutory duty is imposed need be a public official or an
official body. A mandamus can issue, for instance, to an official of a
society to compel him to carry out the terms of the statutes under or
by which the society is constituted or governed and also to companies
or corporations to carry out duties placed on them by the statutes G
authorising their undertakings. A mandamus would also lie against a
company constituted by a statute for the purpose of fulfilling public
responsibilities. (Cf. Halsbury's Laws of England, 3rd Edn., Vol. II, p.
52 and onwards).

The Court then said : H
676 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A "The term "authority" used in Article 226, in the context, must receive
a liberal meaning unlike the term in Article 12. Article 12 is relevant
only for the purpose of enforcement of fundamental rights under
Article 32. Article 226 confers power on the High Courts to issue writs
for enforcement of the fundamental rights as well as non-fundamental
rights. The words "any person or authority" used in Article 226 are,
B 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
very much relevant. What is relevant is the nature of the duty imposed
on the body.
c The duty must be judged in the light of positive obligation owned by
the person or authority to the affected party. No matter by what means
the duty is imposed, if a positive obligation exists mandamus cannot
be denied."

And finally it said as under :
D
"Here again we may point out that mandamus cannot be denied on
the ground that the duty to be enforce is not imposed by the statute.
Commenting on the development of this law, Professor De Smith ·
states : "To be enforceable by mandamus a public duty does not
necessarily have to be one imposed by statute. It may be sufficient
E
for the duty to have been imposed by charter, common law, custom
or even contract." We share this view. The judicial control over the
fast expanding maze of bodies affecting the rights of the people
should not be put into watertight compartment. It should remain
flexible to meet the requirements of variable circumstances. Mandamus
F is a very wide remedy which must be easily available 'to reach injustice
wherever it is found". Technicalities should not come in the way of
granting that relief under Article 226. We, therefore, reject the
contention urged for the appellants on the maintainability of the writ
petition."

G In Air India Statutory Corporation and others v. United Labour Union and
Ors., (1997] 9 SCC 377, this Court Speaking through a Bench of three Judges
said :

"The public law remedy given by Article 226 of the Constitution is to
issue not only the prerogative writs provided therein but also any
H order or direction to enforce any of the fundamental rights and "for
U.P. STATE CO-OP. LANDDEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA, J.] 677

any other purpose". The distinction between public law and private A
law remedy by judicial adjudication gradually marginalised and became
obliterated. In LIC v. Escorts Ltd., [I 986] I SCC 264 at 344, this Court
in paragraph I 02 had pointed out that the difficulty will lie in
demarcating the frontier between the public law domain and the private
law field. The question must be decided in each case with reference B
to the particular action, the activity in which the State or the

. instrumentality of the State is engaged when performing the action,
the public law or private law character of the question and the host
of other relevant circumstances. Therein, the question was whether
the management of LIC should record reasons for accepting the
purchase of the shares? It was in that fact-situation that this Court C
held that there was no need to state reasons when the management
of the shareholders by resolution reached the decision. This Court
equally pointed out in other cases that when the State's power as
economic power and economic entrepreneur and allocator of economic
benefits is subject to the limitations of fundamental rights, a private D
Corporation under the functional control of the state engaged in an
activity hazardous to the health and safety of the community, is
imbued with public interest which the State ultimately proposes to
regulate exclusively on its industrial policy. It would also be subject
to the same limitations as held in M.C. Mehta and Ors. v. Union of
India and Ors., [1987] I SCC 395". E
A Full Bench of the Andhra Pradesh High Court in Sri Konaseema Co-
operative Central Bank ltd., Amalapuram and Anr. v. N. Seetharama Raju,
AIR (1990) A.P. 17 I, was considering the question whether a writ petition lay
against a cooperative society and if it does, in what circumstance. After
examining various decisions and treatises on the subject it was stated that F
even if a society could not be characterised as a 'State' within the meaning
of Article 12 even so a writ would lie against it to enforce a statutory public
duty which an employee is entitled to enforce against the society. In such a
case, it is unnecessary to go into the question whether the society is being
treated as a 'person', or an 'authority', within the meaning of Article 226 of G
the Constitution. What is material is the nature of the statutory duty placed
. '-• upon it, and the Court is to enforce such statutory public duty.

In view of the fact that control of the State Government on the appellant
is all pervasive dnd the employees had statutory protection and therefore the
appellant being an authority or even instrumentality of the State would be H
678 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A amenable to writ jurisdiction of the High Court under Article 226 of the
Constitution. It may not be necessary to examine any further the question if
Article 226 makes a divide between public law and private law. Prima facie
from the language of the Article 226 there does not appear to exist such a
divide. To understand the explicit language of the Article it is not necessary
B for us to rely on the decision of English Courts as rightly cautioned by the
earlier Benches of this Court. It does appear to us that Article 226 while
empowering the High Court for issue of orders or directions to any authority
or person does not m;tll.e any such difference between public functions and
private functions. It is not necessary for us in this case to go into this
question as to what is the nature, scope and amplitude of the writs of habeas
C corpus, mandamus, prohibition, quo warranto and certiorari. They are certainly
founded on the English system of jurisprudence. Article 226 of the Constitution
also speaks of directions and orders which can be issued to any person or
authority including, in appropriate cases, any Government. Under clause (I)
of Article 367 unless the context otherwise requires, the General Clauses Act,
I897, shall, subject to any adaptations and modifications that may be made
D therein under Article 372 apply for the interpretation of the Constitution as
it applies for the interpretation of an Act of the Legislature of the Dominion
of India. "Person" under Section 2(42) of the General Clauses Act shall
include any company, or association or body of individuals, whether
incorporated or not. Constitution in not a statute. It is a fountain head of all
E the statutes. When the language of Article 226 is clear, we cannot put
shackles on the High Courts to limit their jurisdiction by putting an
interpretation on the words which would limit their jurisdiction. When any
citizen or person is wronged, the High Court will step in to protect him, be
that wrong be done by the State, an instrumentality of the State, a company
or a cooperative society or association or body of individuals whether
F incorporated or not, or even an individual. Right that is infringed may be
under Part III of the Constitution or any other right which the law validly
made might confer upon him. But then the power conferred upon the High
Courts under Article 226 of the Constitution is so vast, this court has laid
down certain guidelines and self-imposed limitations have been put there
G subject to which High Courts would exercise jurisdiction, but those guidelines
cannot be mandatory in all circumstances. High Court does not interfere when
an equally efficacious alternative remedy is available or when there is
.,.,-
established procedure to remedy a wrong or enforce a right. A party may not
be allowed to by-pass the normal channel of civil and criminal litigation. High
Court does not act like a proverbial 'bull in china shop' in the exercise of its
H jurisdiction under Article 226.
U.P. STATE CO-OP. LANDDEVE. BANK LTD. v. C.B. DUBEY [D.P. WADHWA, J.] 679
We, therefore, hold that appellant is an authority controlled by the State A
Government and the service condition of the employees of the appellant
particularly with regard to disciplinary proceedings against them are statutory
in nature and thus writ petition was maintainable against the appellant. To this
extent, we agree with the High Court. However, disciplinary proceedings were
held against the respondents in accordance with law with due observance of
the rules of natural justice. The judgment of the High Court is, therefore, not B
correct to that extent.

The appeals are, therefore, allowed impugned judgment of the High
Court holding that the dismissal of the respondents was not legal is set aside
and the writ petitions filed by the respondents are dismissed. C
MP. Appeals allowed.