Benu Madhav Tripathy vs State Of Odisha And Others

The challenge in the present petition is to an order dated 25th January, 2023 issued by the Administrator of the Odisha State Co-operative Bank Ltd. (‘OSC Bank’), Bhubaneswar appointing/ engaging Opposite Party No.9 as Managing Director (MD) of the OSC Bank “on terms and conditions as applicable to retired Government servants till the post is filled up in due course”.

Interestingly, on the very date that the above impugned order was passed, this Court delivered at 10.30 am its judgment in W.P.(C) PIL No. 8927 of 2022 filed by the present Petitioner questioning a similar order dated 2nd March, 2022 issued by the GA Department re-engaging the very same person as MD of the OSC Bank. This Court by the said judgment also quashed the consequential order dated 7th March, 2022 issued by the Joint Registrar, Cooperative Societies ‘approving’ such re-engagement.

Mr. P.K. Rath, learned counsel appearing for the Petitioner points out that this time also the Registrar, Cooperative Societies has further issued an order on 25th January, 2023 approving such appointment in exercise of the power under Section 28(3-b)(1) of the Orissa Co-operative Societies Act, 1962 (OCS Act) to enable Opposite Party No.9 to discharge duties of a Chief Executive Officer (CEO) of the OSC Bank as MD.

The Petitioner also questions a communication addressed on the same date i.e., 25th January, 2023 by the Principal Secretary to the Government of Odisha in Cooperation Department an Administrator, OSC Bank to the Regional Director, Reserve Bank of India (RBI) seeking approval of such re-engagement.

This Court had in its judgment dated 25th January, 2023 held that there had to be prior approval of the RBI to such appointment/re-engagement under Section 35 B (1) (b) of the Banking Regulation Act (‘BR Act’). This Court had also held that there is no power in the Registrar, Cooperative Societies to approve the re-engagement of such person on provisional basis as CEO/MD of the OSC Bank under Section 28(3-b)(1) of the OCS Act.

Interestingly, in the above W.P. (C) PIL No. 8927 of 2022 after the final arguments were concluded on 10th January, 2023, judgment was reserved and at 10.30 am on 25th January, 2023 it was pronounced. Yet none of the orders dated 25th January, 2023, impugned in the present writ petition mention the fact that the earlier engagement of Opposite Party No.9 as MD/CEO of the OSC Bank was subject matter of challenge in W.P. (C) PIL No. 8927 of 2022. The impugned orders have been issued following the same procedure that was held illegal by this Court in the aforementioned judgment.

When specifically asked of the Government Counsel appearing before the Court whether the said judgment is subject matter of any further challenge, the answer was in the negative.

Issue notice. Mr. Mohanty, accepts notice for the Opposite Parties 1,2,3 and 4. Mr. Sunil Mathews, Advocate accepts for on Opposite Party No.8 OSC Bank. Notice to the remaining Opposite Parties by Registered Post/Speed Post returnable on the next date. Reply be filed within four weeks of service of notice. The Tracking Report be placed on record.

The Court is of the prima facie view, for the reasons noted hereinbefore that the impugned orders are in gross violation of Section 28(3-b)(1) of the OCS Actas well as Section 35-B(1)(b) of the BR Act and in teeth of the judgment passed by this Court on 25th January, 2023 in W.P. (C) PIL No. 8927 of 2022 quashing identical orders of re-engagement of very same persons i.e., Opposite Party No.9 as MD/CEO of the OSB Bank. The Court is therefore constrained to stay operation of all the impugned orders forthwith.

The result will be that Opposite Party No.9 will hand over the charge forthwith to the Registrar of Cooperative Societies and this arrangement will continue till further orders.

List on 6th April, 2023.

A copy of this order be communicated by the Registry to the Registrar, Cooperative Societies forthwith for compliance.

…………………………..