Phool Singh vs State of Haryana and Others

N.K. Sodhi, J.—What is challenged in this petition filed under Article 226 of the Constitution is the setting up of a committee by the Board of Directors of the Gurgaon Central Co-operative Bank Ltd., Gurgaon (for short ''the Bank'') for the recruitment of gunmen on the ground that the constitution of such a committee is in excess of the power of the Board of Directors.

The Bank is Central Co-operative Society deemed to be registered under the Haryana Co-operative Societies Act, 1984. Elections to its Board of Directors were last held in December, 1993 and the petitioner was elected Chairman/President of the bank. According to Bye-law 42 of the Model bye-laws of the Bank the Board of Directors is required to elect from amongst its own members, Administrative Committee consisting of the President of the Board, one of the Government nominees, five Directors and one nominee of the registrar, Co-operative Societies. Such a committee was constituted by the Board of Directors in their meeting held on 9,7.1994 with the petitioner as its Chairman. The powers of the Administrative Committee are prescribed in bye-law 42 which reads as under :-

"43. Subject to the control of the Board of Directors the administrative committee shall exercise all or any of the following powers in respect of the staff of the Bank:

i) to determine the strength of staff to be appointed on various categories in the Bank;

ii) to approve scales of pay of various categories of staff appointed/to be appointed in the Bank;

iii) to appoint staff in the Bank;

iv) to sanction increments to all members of staff of the status of Branch Manager and above;

v) to sanction earned leave to staff beyond 15 days;

vi) to approve admission of new members;

vii) to exercise any other power specifically delegated by the Board of Directors."

A perusal of the aforesaid bye-law makes it clear that the power to appoint staff in the Bank is with the Administrative Committee which power is subject to the control of the Board of Directors. We then have the Haryana State Co-operative Banks'' Staff Service (Common Cadre) Rules, 1975 (hereinafter called the Rules) which apply to all the Central Co-operative Banks in the Haryana State and govern the service conditions of the employees working in those Banks. According to Rule 3.1 the authority to administer and implement the Rules is with the provisions of the bye-laws of the bank or in the absence of such a provision with the committee constituted by the Board for administering the Rules. The Board of Directors in their meeting held on 18.7.1997 constituted a committee excluding the petitioner for recruiting the gunmen. The petitioner, no doubt, was present in the meeting and even though he opposed the constitution of such a committee he was over-ruled by the majority. It is this action of the Board which is now under challenge in this petition.

The grievance of the petitioner is that the Administrative Committee of the Bank having been constituted of which he is the chairman, it is this Committee alone which has the power to appoint staff in the Bank and that the Board of Directors could not constitute another committee to recruit the gunmen. The resolution of the Board passed on 18.7.1997 is thus said to be in excess of the powers of the Board.

In the written statement filed by some of the respondents, it is pleaded that the petitioner was present in the meeting when the committee for recruiting the gunmen was constituted and since he could not master enough strength in the meeting the decision of the majority prevailed. It is pleaded that the petitioner is estopped from challenging the constitution of the committee, it is further pleaded that the petitioner could move the Registrar u/s 27 of the Act for rescinding the resolution of the Board of Directors and since he has not resorted to that remedy he is not entitled to file the present petition.

We have heard counsel for the parties and, in our opinion, the writ petition deserves to succeed. There is no gain saying the fact that the Administrative Committee of the bank had been constituted in July, 1994 and the same is in existence. According to bye-law 43 of the bye-laws the power to appoint staff in the Bank vests exclusively in this committee though this power is to be exercised subject to the control of the Board of Directors. While exercising its control, the Board is to see that the power is exercised fairly, reasonably and in accordance with the Rules and the bye-laws. It cannot, however, give a go bye to the provisions of the Rules of the Bye-laws and constitute another committee which is not contemplated by the Rules or the bye-laws and constitute another committee which is not contemplated by the Rules and the bye-laws. It is only in cases where there is no provision for an Administrative Committee that the Board of Directors can constitute a committee to administer the Rules. No doubt the petitioner was present in the meeting held on 18.7.1997 when the committee was constituted but he opposed the constitution of such a committee. It is also true that the petitioner could not muster enough support in the meeting of the Board of Directors and the majority over-rules him. But this by itself would not justify the Board passing a resolution which is in excess of its powers. When the power to appoint staff vests in the Administrative Committee and that committee is in existence, the Board cannot take away those powers and give them to another committee.

In the result, it has to be held that the resolution passed on 18.7.1997 constitution the committee is ultra vires the powers of the Board.

Section 27 of the Act, no doubt, gives the power to the Registrar to suspend or rescind a resolution passed by the Board of Directors but it is not, in our opinion, an efficacious alternative remedy so as to non-suit the petitioner.

No other points was raised.

For the aforesaid reasons the writ petition is allowed and the resolution dated 18.7.1997 constituting a committee for recruiting the gunmen quashed. When notice of motion was issued the committee constituted by the Board of Directors was directed not to declare the result of the interviews held by it. The order was subsequently vacated by the Bench making it clear that the appointments made, if any, would be subject to the decision of the writ petition. Now that the writ petition is being allowed and the resolution of the Board of Directors set aside, the Administrative Committee of the Bank is directed to make fresh recruitment of gunmen in accordance with law. It is further directed that if appointments have already been made, they shall continue till fresh appointments are made by the Administrative Committee and that those already appointed will have a right to be considered if they are otherwise eligible. Petitioner shall have his costs which are assessed at Rs. 500/-.