ADVERTISEMENT
Orissa High Court
Sagar Keshari Nayak vs State Of Odisha & Others …. Opp. … on 7 April, 2026
Author: Biraja Prasanna Satapathy
Bench: Biraja Prasanna Satapathy
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.23226 of 2022
In the matter of an application under Article 226 & 227 of
the Constitution of India, 1950.
..................
Sagar Keshari Nayak .... Petitioner
-versus-
State of Odisha & Others .... Opp. Parties
For Petitioner : Mr. D. Panda, Advocate
For Opp. Parties : Mr. C.K. Pradhan, AGA
Mr. S. Nanda, Adv. for O.P.3
PRESENT:
THE HONBLE JUSTICE BIRAJA PRASANNA SATAPATHY
Date of Hearing: 12.03.2026 and Date of Judgment: 07.04.2026
Biraja Prasanna Satapathy, J.
1. This matter is taken up through Hybrid
Arrangement (Virtual/Physical) Mode.
// 2 //
2. Heard learned counsel appearing for the Parties.
3. The present Writ Petition has been filed inter alia
challenging order dtd.26.08.2022 so passed by Opposite
Party No.1 under Annexure-5. Vide the said order, benefit
of promotion extended in favour of the Petitioner to the
rank of Asst. Manager under Grade-IV vide office order
dtd.23.06.2022, pursuant to the decision taken by the
DPC / Appointment Committee of the Bank in its meeting
dtd.22.06.2022 was withdrawn and direction was issued
to recover the excess salary drawn from the month of
June, 2022.
4. Learned counsel appearing for the Petitioner while
assailing the impugned order contended that Petitioner
while in service under the Opposite Party-Bank as a
Senior Asst. in Grade-V, the DPC / Appointment
Committee of the Opposite Party-Bank in its proceeding
dtd.22.06.2022, resolved and recommended the name of
the Petitioner along with others for their promotion to the
rank of Asst. Manager Grade-IV in the scale of pay of
Page 2 of 48
// 3 //
Rs.8,960/- to Rs.17,720/- w.e.f 01.06.2022. Pursuant to
such decision taken by the Appointment Committee in its
proceeding dtd.22.06.2022, Petitioner along with others
vide order dtd.23.06.2022 under Annexure-1, was
extended with the benefit of promotion to the rank of
Asst. Manager in Grade-IV w.e.f. 01.06.2022 and in the
said order name of the Petitioner finds place at S.L.
No.15.
4.1. Learned counsel appearing for the Petitioner
contended that after being extended with the benefit of
promotion to the rank of Asst. Manager Grade-IV vide
order dtd.23.06.2022 w.e.f. 01.06.2022, in terms of the
said order, Petitioner not only joined in the promotional
post of Asst. Manager so reflected in order dtd.29.06.2022
under Annexure-2, but also his pay was fixed in the
promotional post in the scale of pay of Rs.8,960/- to
Rs.17,720/-. Petitioner's pay was fixed at Rs.16,400/-
w.e.f. 01.06.2022.
4.2. It is further contended that after being so extended
with the benefit of promotion and consequential fixation
Page 3 of 48
// 4 //
of the pay in the promotional post, Petitioner retired from
his services, on attaining the age of superannuation on
30.06.2022. But such benefit of promotion extended in
favour of the Petitioner vide order dtd.23.06.2022
pursuant to the decision of the Appointment Committee
dtd.22.06.2022, was withdrawn vide the impugned order
dtd.26.08.2022 under Annexure-5, basing on the
decision taken by the self-same Appointment committee
in its proceeding dtd.25.08.2022.
4.3. It is contended that since Petitioner basing on the
order of promotion was allowed to join in the promotional
post with due extension of the scale of pay vide order
dtd.29.06.2022 under Annexure-2, such benefit cannot
be withdrawn with passing of the impugned order
dtd.26.08.2022 under Annexure-5, as the Petitioner by
the said date had already attained the age of
superannuation, having retired on 30.06.2022.
4.4. It is also contended that since the Petitioner was
extended with the scale of pay w.e.f. 01.06.2022 as per
order dtd.29.06.2022, in view of the decision of the
Page 4 of 48
// 5 //
Hon'ble Apex Court in the case of Rafiq Masih so
followed in the case of Thomos Daniel, no recovery can
be made from the Petitioner, Petitioner being a retired
employee. Hon'ble Apex Court in Para 18 of the judgment
in the case of Rafiq Masih and in Para-18 of the
judgment in the case of Thomas Daniel has held as
follows:-
xxx xxx xxx
"18. It is not possible to postulate all situations of hardship
which would govern employees on the issue of recovery,
where payments have mistakenly been made by the
employer, in excess of their entitlement. But that as it may,
based on the decisions referred to hereinabove, we may, as
a ready reference, summarise the following few situations,
wherein recoveries by the employers, would be
impermissible in law:
(i) Recovery from the employees belonging to Class III and
Class IV service (or Group C and Group D service).
(ii) Recovery from the retired employees, or the employees
who are due to retire within one year, of the order of
recovery.
(iii) recovery from the employees, when the excess payment
has been made for a period in excess of five years, before
the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully
been required to discharge duties of a higher post, and has
been paid accordingly, even though he should have rightfully
been required to work against an inferior post.
(v) In any other case, where the court arrives at the
conclusion, that recovery if made from the employee, would
be iniquitous or harsh or arbitrary to such an extent, as
would far outweigh the equitable balance of the employer‟s
right to recover.
Page 5 of 48
// 6 //
"18. It is not possible to postulate all situations of
hardship which would govern employees on the issue of
recovery, where payments have mistakenly been made by
the employer, in excess of their entitlement. Be that as it
may, based on the decisions referred to hereinabove, we
may, as a ready reference, summarise the following few
situations, wherein recoveries by the employers, would be
impermissible in law:
(i) Recovery from the employees belonging to Class III and
Class IV service (or Group C and Group D service).
(ii) Recovery from the retired employees, or the employees
who are due to retire within one year of the order of
recovery.
(iii) Recovery from the employees, when the excess payment
has been made for a period in excess of five years, before
the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully
been required to discharge duties of a higher post, and has
been paid accordingly, even though he should have rightfully
been required to work against an inferior post.
(v) In any other case, where the Court arrives at the
conclusion, that recovery if made from the employee, would
be iniquitous or harsh or arbitrary to such an extent, as
would far outweigh the equitable balance of the employer‟s
right to recover."
4.5. Learned counsel appearing for the Petitioner further
contended that since by the time the benefit of promotion
was withdrawn vide the impugned order dtd.26.08.2022
under Annexure-5, Petitioner had already retired on
attaining the age of superannuation w.e.f. 30.06.2022,
such withdrawal of the benefit cannot be made applicable
to the case of the Petitioner and Petitioner should be
Page 6 of 48
// 7 //
treated to have retired in the promotional post and
eligible and entitled to get his retiral benefits accordingly.
4.6. It is accordingly contended that the impugned order
dtd.26.08.2022 so far as it relates to the Petitioner, needs
interference of this Court.
5. Mr. Somanath Nanda, learned counsel appearing for
the Opposite Party-Bank on the other hand made his
submission basing on the stand taken in the counter
affidavit so filed.
5.1. Placing reliance on the stand taken in the counter
affidavit, it is contended that even though pursuant to the
decision taken by the Appointment Committee in its
proceeding dtd.22.06.2022, Petitioner along with the
others were extended with the benefit of promotion to the
rank of Asst. Manager Grade-IV vide order
dtd.23.06.2022, but the subsequent Appointment
Committee in its proceeding dtd.25.08.2022, when found
that the benefit of promotion pursuant to the
recommendation of the previous Appointment Committee
Page 7 of 48
// 8 //
has been made illegally, the said Committee
recommended to withdraw the benefit of promotion.
Basing on such decision taken by the Appointment
Committee in its proceeding dtd.25.08.2022, the
impugned order was passed on 26.08.2022 under
Annexure-5, wherein the benefit of promotion was
withdrawn.
5.2. It is also contended that even though Petitioner was
promoted to the rank of Asst. Manager Grade-IV vide
order dtd.23.06.2022, but since Petitioner was under
probation, it cannot be held that Petitioner has
successfully completed the period of probation and
accordingly entitled to continue with the benefit of
promotion.
5.3. It is contended that since as per the service rule,
such order of promotion was extended on probation and
the probation period being one year from the date of issue
of the order, Petitioner having not completed the
probation period, he has got no vested right to continue
in the promotional post.
Page 8 of 48
// 9 //
5.4. It is further contended that since the Appointment
Committee who took the decision on 22.06.2022, was not
authorized to take any decision and such a decision was
taken contrary to the provisions contained under Rule-10
of the Staff Service Rules 2003 (in short 'Rules') no
illegality or irregularity can be found either with the
decision taken by the subsequent Appointment
Committee in its proceeding dtd.25.08.2022 or with
regard to the impugned order passed on 26.08.2022
under Annexure-5.
5.5. It is further contended that the Opposite Party-Bank
is a primary Co-operative Society registered under the
provisions of Orissa Co-operative Societies Act. Taking
into account the financial position of the Bank at the
relevant point of time, Addl. District Magistrate (General),
Cuttack who was in-charge of the Administration of the
Management of the Opposite Party-Bank, could not have
taken such a decision through the Appointment
Committee dtd.22.06.2022, in allowing promotion to 109
numbers of employees in different grade including the
Page 9 of 48
// 10 //
benefit of promotion in favour of 37 Grade-V employees to
the rank of Asst. Manager, Grade-IV vide order
dtd.23.06.2022 under Annexure-1.
5.6. It is contended that subsequent Appointment
Committee after taking charge when found that the
previous Appointment Committee has taken the wrong
decision in allowing the benefit of promotion to the
Petitioner and 108 others in different rank, the
Appointment Committee in its proceeding dtd.25.08.2022
held the decision taken by the previous Appointment
Committee in its proceeding dtd.22.06.2022, as not in
accordance with law. Accordingly, basing on the
recommendation of the Appointment Committee
dtd.25.08.2022, the order of promotion was withdrawn in
respect of all the 109 employees, which includes the
present Petitioner to the rank of Asst. Manager Grade-V,
vide the impugned order dtd.26.08.2022 under
Annexure-5.
Page 10 of 48
// 11 //
5.7. It is also contended that such benefit of the
promotion in favour of the Petitioner is contrary to the
provisions contained under the Staff Service Rules, 2003.
5.8. It is also contended that the then Administrator
prior to taking a decision to extend the benefit of
promotion in the proceeding of the Appointment
Committee dtd.22.06.2022 since, neither took prior
approval of the Registrar Co-operative Societies and the
Committee so constituted is contrary to Rule-57 of the
2003 Rules, it could not have taken the decision to extend
the benefit of promotion in favour of 109 numbers of
employees.
5.9. It is also contended that save and except the present
Petitioner, none of the affected promotees have challenged
the impugned order dtd.26.08.2022.
5.10. It is also further contended that since by the time
the benefit of promotion was withdrawn vide the
impugned order, the probation period was not over, it
Page 11 of 48
// 12 //
cannot be held that Petitioner was holding the
promotional post by the time he retired on 30.06.2022.
5.11. It is also contended that the decision by the
Appointment Committee to withdraw the benefit being a
policy decision of the Bank, it is not amenable for
challenge before this Court in a Writ Petition.
6. In support of the aforesaid submission, reliance was
placed to a decision of the Hon'ble Apex Court in the case
of Government of West Bengal & Ors. vs. Amal
Satpathy & Ors. Reliance was placed to Para-15 to 21
has held as follows:-
"15. The primary question that arises for our consideration in
the present appeal is whether respondent No. 1, who was
recommended for the promotion before his retirement but did
not receive actual promotion to the higher post due to
administrative delays, is entitled to notional financial benefits
of the promotional post after his retirement?
16. We have perused the pleadings and the records and have
given our thoughtful consideration to the submissions
advanced by the learned counsel for the parties.
17. The relevant provision i.e., Rule 54(1)(a) of the West
Bengal Service Rules, is extracted hereinbelow for the sake of
ready reference:
"Pay on Officiating Appointment- 54(I)(a): Subject to the
provisions of Chapter VII, a Government employee who is
appointed to officiate in a post shall not draw pay higher
than* "his substantive pay" in respect of a permanent
post, other than a tenure post, unless the officiating
appointment involves the assumption of duties and
responsibilities of greater importance than those
attaching to the post, other than a tenure post, on
which he holds a lien, or would hold a lien had it not
been suspended:
Page 12 of 48
// 13 //
Provided that the Governor may specify posts outside the
ordinary line of a service the holders of which may,
notwithstanding the provisions of this rule and subject to
such conditions as the Governor may prescribe, be given any
officiating promotion in the cadre of the service which the
authority competent to order promotion may decide, and may
thereupon be granted the same pay as they would have
received if still in the ordinary line."
(emphasis supplied)
18. Upon a bare perusal of Rule 54(1)(a) of the West Bengal
Service Rules, it is clear that promotion cannot be
retrospectively granted after retirement, as it requires the
actual assumption of duties and responsibilities of the
promotional post. In the present case, since respondent No. 1
superannuated before the final approval of his promotion, he
could not have formally assume the charge of the promotional
post of Chief Scientific Officer. Therefore, although respondent
No. 1 was recommended for promotion, Rule 54(1)(a) of the
West Bengal Service Rules precludes him from getting the
financial benefits of the promotional post without having
taken on the responsibilities of the said post i.e. Chief
Scientific Officer.
19. It is a well settled principle that promotion becomes
effective from the date it is granted, rather than from the date
a vacancy arises or the post is created. While the Courts have
recognized the right to be considered for promotion as not
only a statutory right but also a fundamental right, there is no
fundamental right to the promotion itself. In this regard, we
may gainfully refer to a recent decision of this Court in the
case of Bihar State Electricity Board v. Dharamdeo Das9,
wherein it was observed as follows:
"18. It is no longer res integra that a promotion is
effective from the date it is granted and not from the
date when a vacancy occurs on the subject post or when
the post itself is created. No doubt, a right to be
considered for promotion has been treated by courts not
just as a statutory right but as a fundamental right, at
the same time, there is no fundamental right to
promotion itself. In this context, we may profitably cite a
recent decision in Ajay Kumar Shukla v. Arvind Rai10 where,
citing earlier precedents in Director, Lift Irrigation Corporation
Ltd. v. Pravat Kiran Mohanty11 and Ajit Singh v. State of
Punjab12, a three-Judge Bench observed thus:
41. This Court, time and again, has laid emphasis on right to
be considered for promotion to be a fundamental right, as was
held by K. Ramaswamy, J., in Director, Lift Irrigation Corpn.
Ltd. v. Pravat Kiran Mohanty in para 4 of the report which is
reproduced below:
„4....... There is no fundamental right to promotion, but an
employee has only right to be considered for promotion, when it
arises, in accordance with relevant rules. From this perspective
in our view the conclusion of the High Court that the gradation
list prepared by the corporation is in violation of the right of
respondent-writ petitioner to equality enshrined under
Article 14 read with Article 16 of the Constitution, and the
Page 13 of 48
// 14 //
respondent-writ petitioner was unjustly denied of the same is
obviously unjustified.‟
42. A Constitution Bench in Ajit Singh v. State of Punjab, laying
emphasis on Article 14 and Article 16(1) of the Constitution of
India held that if a person who satisfies the eligibility and the
criteria for promotion but still is not considered for promotion,
then there will be clear violation of his/her's fundamental right.
Jagannadha Rao, J. speaking for himself and Anand, C.J.,
Venkataswami, Pattanaik, Kurdukar, JJ., observed the same
as follows in paras 22 and 27:
„Articles 14 and 16(1) : is right to be considered for promotion a
fundamental right
22. Article 14 and Article 16(1) are closely connected. They
deal with individual rights of the person. Article 14 demands
that the „State shall not deny to any person equality before the
law or the equal protection of the laws‟. Article 16(1) issues a
positive command that:
„there shall be equality of opportunity for all citizens in matters
relating to employment or appointment to any office under the
State‟.
It has been held repeatedly by this Court that clause (1) of
Article 16 is a facet of Article 14 and that it takes its roots from
Article 14. The said clause particularises the generality in
Article 14 and identifies, in a constitutional sense "equality of
opportunity" in matters of employment and appointment to any
office under the State. The word "employment" being wider,
there is no dispute that it takes within its fold, the aspect of
promotions to posts above the stage of initial level of
recruitment. Article 16 (1) provides to every employee otherwise
eligible for promotion or who comes within the zone of
consideration, a fundamental right to be "considered" for
promotion. Equal opportunity here means the right to be
"considered" for promotion. If a person satisfies the eligibility
and zone criteria but is not considered for promotion, then there
will be a clear infraction of his fundamental right to be
"considered" for promotion, which is his personal right.
"Promotion" based on equal opportunity and seniority attached
to such promotion are facets of fundamental right under Article
16(1).
***
27. In our opinion, the above view expressed in Ashok Kumar
Gupta [Ashok Kumar Gupta v. State of U.P.13, and followed
in Jagdish Lal [Jagdish Lal v. State of Haryana14, and other
cases, if it is intended to lay down that the right guaranteed to
employees for being "considered" for promotion according to
relevant rules of recruitment by promotion (i.e. whether on the
basis of seniority or merit) is only a statutory right and not a
fundamental right, we cannot accept the proposition. We have
already stated earlier that the right to equal opportunity in the
matter of promotion in the sense of a right to be "considered" for
promotion is indeed a fundamental right guaranteed under
Article 16(1) and this has never been doubted in any other case
before Ashok Kumar Gupta [Ashok Kumar Gupta v. State of
U.P.], right from 1950.‟
Page 14 of 48
// 15 //
20. In State of Bihar v. Akhouri Sachindra Nath15, it was held
that retrospective seniority cannot be given to an employee from
a date when he was not even borne in the cadre, nor can
seniority be given with retrospective effect as that might
adversely affect others. The same view was reiterated in Keshav
Chandra Joshi v. Union of India16, where it was held that when
a quota is provided for, then the seniority of the employee would
be reckoned from the date when the vacancy arises in the quota
and not from any anterior date of promotion or subsequent date
of confirmation. The said view was restated in Uttaranchal
Forest Rangers' Assn. (Direct Recruit) v. State of U.P.17, in the
following words:
„37. We are also of the view that no retrospective promotion or
seniority can be granted from a date when an employee has not
even been borne in the cadre so as to adversely affect the direct
recruits appointed validly in the meantime, as decided by this
Court in Keshav Chandra Joshi v. Union of India held that when
promotion is outside the quota, seniority would be reckoned from
the date of the vacancy within the quota rendering the previous
service fortuitous. The previous promotion would be regular only
from the date of the vacancy within the quota and seniority shall
be counted from that date and not from the date of his earlier
promotion or subsequent confirmation. In order to do justice to
the promotes, it would not be proper to do injustice to the direct
recruits......
38. This Court has consistently held that no retrospective
promotion can be granted nor can any seniority be given
on retrospective basis from a date when an employee has
not even been borne in the cadre particularly when this
would adversely affect the direct recruits who have been
appointed validity in the meantime."
(emphasis supplied)
20. In the instant case, it is evident that while respondent No. 1
was recommended for promotion before his retirement, he could
not assume the duties of the Chief Scientific Officer. Rule 54(1)(a)
of the West Bengal Service Rules, clearly stipulates that an
employee must assume the responsibilities of a higher post to
draw the corresponding pay, thus, preventing posthumous or
retrospective promotions in the absence of an enabling provision.
21. While we recognize respondent No. 1's right to be considered
for promotion, which is a fundamental right under
Articles 14 and 16(1) of the Constitution of India, he does not hold
an absolute right to the promotion itself. The legal precedents
discussed above establish that promotion only becomes effective
upon the assumption of duties on the promotional post and not on
the date of occurrence of the vacancy or the date of
recommendation. Considering that respondent No. 1
superannuated before his promotion was effectuated, he is not
entitled to retrospective financial benefits associated to the
promotional post of Chief Scientific Officer, as he did not serve in
that capacity".
Page 15 of 48
// 16 //
6.1. Reliance was also placed to a decision of this Court
in the case of Rita Priyadarsini Mohanty vs. State of
Odisha & Ors., W.P.(C) No.6100 of 2023 decided on
21.10.2024, in addition to the decision in the case of
Amal Satpathy as cited (supra).
6.2. Reliance was placed to a decision of the Hon'ble
Apex Court in the case of State of Punjab & Ors. vs.
Amar Nath Goyal & Ors., reported in 2005(6) SCC-754.
Reliance was placed to Para-25, 26 and 28, which reads
as follows:-
"25. The only question, which is relevant and needs consideration, is
whether the decision of the Central and State Governments to restrict
the revision of the quantum of gratuity as well as the increased ceiling
of gratuity consequent upon merger of a portion of dearness allowance
into dearness pay reckonable for the purpose of calculating gratuity,
was irrational or arbitrary.
26. It is difficult to accede to the argument on behalf of the employees
that a decision of the Central Government/State Governments to limit
the benefits only to employees, who retire or die on or after 1-4-1995,
after calculating the financial implications thereon, was either
irrational or arbitrary. Financial and economic implications are very
relevant and germane for any policy decision touching the
administration of the Government, at the Centre or at the State level.
xxx xxx xxx
28. Even at that time, interestingly, the benefits were not made
admissible from 1-3-1988 i.e. the date of the Average Consumer Price
Index of 729.91, but from a much further date i.e. 16-9-1993. The
Central Government adopted the same policy while issuing OM dated
14-7-1995. Although, dearness allowance linked to the All India
Consumer Price Index 1201.66 (as on 1-7-1993), was treated as
reckonable part of dearness allowance for the purpose of calculating
the death-cum-retirement gratuity, the benefit was actually made
available to the employees who retired or died on or after 1-4-1995.
Similarly, the increase in the ceiling of gratuity was a mere
Page 16 of 48
// 17 //
consequential step, which was also made applicable from 1-4-1995.
As we have already noticed, 1-4-1995 was the date suggested by the
Fifth Central Pay Commission ("Pay Commission") in its Interim
Report. The Central Government took a conscious stand that the
consequential financial burden would be unbearable. It, therefore,
chose to taper down the financial burden by making the benefits
available only from 1-4-1995. It is trite that, the final recommendations
of the Pay Commission were not ipso facto binding on the Government,
as the Government had to accept and implement the recommendations
of the Pay Commission consistent with its financial position. This is
precisely what the Government did. Such an action on the part of the
Government can neither be characterised as irrational, nor as
arbitrary so as to infringe Article 14 of the Constitution".
6.3. Reliance was placed to a decision of the Hon'ble
Apex Court in the case of State of Tripura & Ors. vs.
Anjana Bhatacharjee & Ors., reported in AIR 2022 SC
4019. Reliance was placed to Para-9, 10, 13.1, 13.2,
13.3, 15, 16, 18 & 19, which reads as follows:-
"9. That the writ petition was vehemently opposed by the State. A
counter-affidavit was filed opposing the writ petition in which it
was specifically submitted on behalf of the State that due to the
financial burden on the State, which the State was not in a
position to bear the additional burden of revised pension, a policy
decision has been taken to grant the benefit of revised pension
notionally from 1-1-2006 to 31-12-2008 and to grant the actual
benefit of the revised pension from 1-1-2009 only.
10. It was vehemently submitted on behalf of the State before the
High Court that being a policy decision, the same may not be
interfered with in a writ petition under Article 226 of the
Constitution of India. It was submitted that it is not normally
within the domain of any court to weigh the pros and cons of the
policy or to scrutinize it and test the degree of its beneficial or
equitable disposition for the purpose of varying, modifying, or
annulling it, based on however sound and good reasoning, except
where it is arbitrary or violative of any constitutional, statutory or
any other provision of law.
xxx xxx xxx
13.1. It is submitted that unless it is found that such a policy
decision is arbitrary and/or violative of the Constitution, statute or
any other provision of law, the High Court is precluded from
Page 17 of 48
// 18 //
interfering with the policy decision in exercise of powers of judicial
review under Article 226 of the Constitution of India.
13.2. It is further submitted by the counsel appearing on behalf of
the State that a detailed affidavit was filed on behalf of the State
pointing out the financial constraint and/or the financial burden
on the State if the arrears of revision of pension is paid from 1-1-
2006. However, the High Court has, without any further
discussion and without giving any cogent reasons observed that
the rationale of financial crunch on the State exchequer has not
satisfied the Court at all.
13.3. It is further submitted that the financial burden on the State
can be a valid ground to fix a cut-off date for the purpose of
payment of revision of pension. Heavy reliance is placed on the
decisions of this Court in State of Punjab v. Amar Nath
Goyal [State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754 :
2005 SCC (L&S) 910] and State of Bihar v. Bihar Pensioners
Samaj [State of Bihar v. Bihar Pensioners Samaj, (2006) 5 SCC 65
: 2006 SCC (L&S) 913] in this regard.
xxx xxx xxx
15. We have heard the learned counsel appearing on behalf of the
State at length. We have gone through and considered the
impugned judgment and order [Anjana Bhattacharjee v. State of
Tripura, 2017 SCC OnLine Tri 271] passed by the High Court.
Before the High Court, Rule 3(3) of the Pension Rules, 2009 was
under challenge, which is reproduced hereinabove. Rule 3(3) of
the Pension Rules, 2009 has been struck down by the High Court
by holding that the same is arbitrary and violative of Article 14 of
the Constitution of India. Before the High Court, it was the specific
case on behalf of the State that because of heavy financial burden
and there being financial constraints, the State is not in a position
to bear the heavy burden of additional revised pension and
therefore, the State formulated a policy decision to the effect that
the revised pension shall be paid from 1-1-2006 to 31-12-2008
notionally and actual revision of pension shall be disbursed from
1-1-2009 only.
16. A detailed affidavit was filed on behalf of the State justifying
the above policy decision providing/granting the revision of pay
from 1-1-2009 only and to grant the benefit of revised pension
notionally from 1-1-2006 or from the date of retirement till 31-12-
2008. Before the High Court on affidavit, it was stated, which is
also reproduced by the High Court in the impugned judgment and
order [Anjana Bhattacharjee v. State of Tripura, 2017 SCC OnLine
Tri 271] , as under : (Anjana Bhattacharjee case [Anjana
Bhattacharjee v. State of Tripura, 2017 SCC OnLine Tri 271] , SCC
OnLine Tri para 11)
"11. ... „However, vide Rule 3(3) ibid Financial benefit was made
admissible from 1-1-2009 or from the date of
superannuation/retirement whichever was later. For all other
cases, the pension was computed notionally as per revised rates
of scale of pay. Since the petitioner retired on 28-2-2007 so her
revised pension up to 31-12-2008 was computed notionally. The
claim of the petitioner is to allow her arrears of pension as per
revised rates for the period from 1-3-2007 to 31-12-2008. It is a
fact that financial condition of the State has been passing through
turbulent time since the recommendations of the Twelfth Finance
Commission. State Government has to depend on Central
Page 18 of 48
// 19 //
Government funding for meeting up its plan and non-plan
expenditure. The funding by the Central Government is based on
the recommendations of the Finance Commission. Finance
Commission under estimated State's projections of non-plan
revenue expenditure which included salaries, pension and interest
payment (Non-flexible and committed expenditure). For example,
the State Government presented a realistic picture of Rs 3944.79
crores towards meeting up expenditure towards pension as per
revised pay scales. Contrary to it, the Finance Commission
assessed a cumulative expenditure of Rs 2779.09 crores which
was Rs 1165.70 less than the actual assessment by the State
Government. 12th Finance Commission calculated pension at Rs
342.01 crores during the year 2008-2009 and Rs 413.83 crores
during the year 2009-2010. This is an increase of approximately
9% over 2007-2008 and 21% over 2008-2009. However, as per
actual implication, the expenditure during 2008-2009 and 2009-
2010 has been Rs 356.43 crores and Rs 559.89 crores
respectively which is 14% and 57% higher than that of previous
years. Thus, due to under assessment of the State's financial
position by the Finance Commission, there has been a shortfall in
funding on non-plan revenue expenditure. It was now required to
make payment of pension without compromising with the State's
finances on development front. As such financial benefit towards
payment of pension was considered from 1-1-2009. All other
cases of retirement falling within 1-1-2006 to 31-12-2008 were
allowed pension fixed notionally. Further, payment of arrears of
pension will have a huge impact on the State finances as there are
large numbers of retirees during that period. Considering, the
constrained financial position of the State, it is not possible to
consider further payment of arrears of pension to the similarly
situated persons as it would give rise to huge financial burden on
the State Exchequer which will disturb the financial equilibrium of
the State.‟ "
Xxx xxx xxx
18. When specific statistics were provided before the High Court
justifying its policy decision and the financial crunch/financial
constraint was pleaded, there was no reason for the High Court to
doubt the same. As such the findings recorded by the High Court
in the impugned judgment and order [Anjana
Bhattacharjee v. State of Tripura, 2017 SCC OnLine Tri 271] are
contrary to the averments made in affidavit filed on behalf of the
State Government. From the affidavit filed before the High Court
reproduced hereinabove, we are satisfied that a conscious policy
decision was taken by the State Government to grant the benefit
of revision of pension notionally from 1-1-2006 or from the date of
superannuation till 31-12-2008 and to pay/grant the benefit of
revision of pension actually from 1-1-2009, which was based on
their financial crunch/financial constraint.
19. Whether the financial crunch/financial constraint due to
additional financial burden can be a valid ground to fix a cut-off
date for the purpose of granting the actual benefit of revision of
pension/pay has been dealt with and/or considered by this Court
in Amar Nath Goyal [State of Punjab v. Amar Nath Goyal, (2005) 6
SCC 754 : 2005 SCC (L&S) 910] . In the aforesaid decision, it is
observed and held by this Court that financial constraint can be a
valid ground for fixation of cut-off date for grant of benefit of
Page 19 of 48
// 20 //
increased quantum of death-cum-retirement gratuity. In paras 26,
32 and 33 of the said judgment [State of Punjab v. Amar Nath
Goyal, (2005) 6 SCC 754 : 2005 SCC (L&S) 910] , it is observed
and held as under : (SCC pp. 763 & 765)
"26. It is difficult to accede to the argument on behalf of the
employees that a decision of the Central Government/State
Governments to limit the benefits only to employees, who retire or
die on or after 1-4-1995, after calculating the financial
implications thereon, was either irrational or arbitrary. Financial
and economic implications are very relevant and germane for any
policy decision touching the administration of the Government, at
the Centre or at the State level.
***
32. The importance of considering financial implications, while
providing benefits for employees, has been noted by this Court in
numerous judgments including the following two cases. In State of
Rajasthan v. Amrit Lal Gandhi [State of Rajasthan v. Amrit Lal
Gandhi, (1997) 2 SCC 342 : 1997 SCC (L&S) 512] this Court went
so as far as to note that:
„17. ... Financial impact of making the Regulations retrospective
can be the sole consideration while fixing a cut-off date. In our
opinion, it cannot be said that this cut-off date was fixed
arbitrarily or without any reason. The High Court was clearly in
error in allowing the writ petitions and substituting the date of 1-
1-1986 for 1-1-1990.‟ [Id, SCC p. 348, para 17 (emphasis
supplied).]
33. More recently, in Veerasamy [T.N. SEB v. R. Veerasamy,
(1999) 3 SCC 414 : 1999 SCC (L&S) 717] this Court observed that,
financial constraints could be a valid ground for introducing a cut-
off date while implementing a pension scheme on a revised basis
[Id, SCC p. 421, para 15] . In that case, the pension scheme
applied differently to persons who had retired from service before
1-7-1986, and those who were in employment on the said date. It
was held that they could not be treated alike as they did not
belong to one class and they formed separate classes."
6.4. With regard to the submission that in absence of the
prior approval of the Registrar of Co-operative Societies
the Committee could not have taken the decision in its
proceeding dtd.22.06.2022, reliance was placed to a
decision of the Hon'ble Apex Court in the case of Rahas
Bihari Das & Ors. vs. State of Orissa & Ors., reported
Page 20 of 48
// 21 //
in 1994(II) OLR-391. Reliance was placed to Para-2, 3, 4,
6(i), 8 & 9, which reads as follows:-
"2. The petitioners have averred in the writ application
that the Orissa Co-operative Housing Corporation
Limited (opposite party No. 4) is the apex Society within
the ambit of Section 2(a) of the Act. The Committee of the
said Society has been superseded since October, 1990,
and the Registrar of Cooperative Societies in exercise of
his power under Sub-section (1) of Section 32 of the Act
has been appointing different persons to manage the
affairs of the Society. One Shri Prasant Mohapatra was
appointed as the Administrator of the apex Society by
the Registrar and the said appointment was assailed in
this Court In O.J.C. No. 873 of 1994, inter alia, on the
ground that the appointment has been made by the
Registrar not in exercise of his statutory power under
the provisions of Section 32(1) of the Act, but at the
instance of the Chief Minister of the State. This Court by
its order dated 12-4-1994 quashed the appointment and
directed the Registrar to make a fresh appointment
without being influenced by any extraneous
consideration. On the very next day of the order of this
Court, I.e. on 13-4-1994, the Registrar again appointed
the very same person as the Administrator of the apex
Society. The subsequent appointment was again
challenged by the members of the Jaipur Sub-Divisional
House Building Cooperative Society Limited in O.J.C. No.
3025 of 1994 and this Court issued notice in the matter
and stayed the appointment of Shri Mohapatra and
directed that it would be open to the Registrar to permit
the Managing Director to carry on the affairs of the apex
Society. Pursuant to the aforesaid observation made by
this Court, the Managing Director was permitted by the
Registrar to exercise the powers of the Managing
Committee of the Society and while exercising the
powers of the Committee of Society has passed orders
on 16-5-1994 admitting 46 new members to the apex
body. It is alleged in the writ application that not only
the aging Director could not have taken the decision of
admission of members to the body even though by virtue
of the deeming provision he exercised the power of me
Committee of Society, but also the said decision of the
Managing Director is vitiated the elected President. It is
further stated that the apex Society being a Society by
Page 21 of 48
// 22 //
mala fides and it is intended only to get the nominated
Director Shri Mohapatra as of Primary of different
organizations and persons having no connection with
the house-building itself is an example of gross malice. It
is further stated that indiscriminate admission of the
firms and private limited companies as the members of
the apex body without examining the requirement of
sound, business of those non-housing primary societies,
firms and private limited companies, is contrary to
Section 7 of the Act and such decision on the eve of the
election notice, election notice having been issued on
17th of May, 1994, and the order admitting new
societies having been made on 16th of May, 1994, is
nothing but a malicious act on the part of the Managing
Director for exposing the cause of Shri Mohapatra who
had been installed twice, but has been prevented
because of the orders of the Court from functioning as
the President of the apex body. The petitioners also have
stated that even if these new societies could be
admitted as members of the apex body, but in
accordance with the provisions of the Act, the Rules and
the Bye-laws, they cannot have any voting right and
they would be merely nominal members. The petitioners
have also stated that prior to 16-5-1994, the apex body
had 68 members and on 16-5-1994, the 46 new
members were included.
3. Opposite parties 2 and 3 have filed a return stating
therein that the power of admitting members to the apex
body lies with the Committee of management under
Section 28(1) of the Act and the Registrar has no role to
play therein. It has been further stated that if there is
any inconsistency between the provisions of the Act and
the Bye-laws, then the Act would prevail.
4. On behalf of the Managing Director who was
exercising the powers of the Committee of Management
under Section 32(1) of the Act, a detailed counter-
affidavit has been filed. It has been stated therein that
any society which is registered under the Orissa Co-
operative Societies Act can apply for membership of the
apex society and once such societies are admitted they
can exercise their electoral rights. It is only the non-
cooperative body corporates or other individuals though
are eligible to be members of the apex society, but would
be nominal members and cannot exercise the electoral
rights. Accordingly both 'A' and 'B' categories of
Page 22 of 48
// 23 //
members of the apex body have the electoral rights. It
has been further averred that Section 16 of the Act
provides as to who can be members of the co-operative
Societies and Section 16(1)(b) deals with membership of
the Central and apex Societies. So far as the Inclusion of
new members to the apex body is concerned, it has been
averred that the Managing Director was exercising the
powers of the Committee of Management and admitted
the members on the basis of their applications as the
applicants were found to be eligible and qualified to be
the members of the apex body. With regard to the
allegation that non-housing co-operative societies have
also been members of the apex body, It has been stated
that such members were there since 1986 and it is not
for the first time that such members have been
admitted. According to the counter-affidavit, the 46
members were admitted as per the Resolution dated 16-
5-1994, annexed as Annexure-G/4 to the counter-
affidavit. It has been averred that admission or refusal
of membership is within the powers and functions of the
Committee and it needs no approval of the Registrar or
the General Body and, therefore, the Managing Director
who was exercising the powers of the Committee of the
apex body has admitted the members on 16-5-1994. It
is to be noticed that though in the writ application
several allegations of malice on the part of the Managing
Director in the matter of admission of the new members
had been made, and the Managing Director himself has
filed the return, but no denial to those allegations is
there.
xxx xxx xxx
6.(i) Whether a Managing Director exercising the powers
of the Committee of Management under Sub-section(1) of
Section 32 of the Act and being the Committee itself by
virtue of the deeming provisions in Sub-section(2) of
Section 32, could admit new members to the apex body,
or he was entitled to only discharge the routine matters
leaving the question of admission of new members to
the elected body itself ?.
xxx xxx xxx
8. Coming to the first question, the power to admit
members of a Society vests with the Committee of
Society as contained in Section 28(1)(a) (1) of the Act.
After supersession of the Committee of Management of a
Page 23 of 48
// 24 //
Society by the Registrar under Sub-section (1) of S.-32 of
the Act, when an Administrator is appointed to manage
the affairs of the Society, such Administrator exercises
all or any of the functions of the Committee of the
Society and is entitled to take all such actions as may
be expedient in the interest of the Society and he is
deemed for all purposes of the Act and the Rules and
Bye-laws to be the Committee of such Society, as
provided in Sub-section (2) of Section 32. Thus, by virtue
of the deeming provision contained in Sub-section (2) of
Section 32 of the Act, the Administrator becomes the
Committee of such Society.
A crucial question thus arises for consideration as to
whether a person who by virtue of a deeming provision
of a statute becomes the Committee of Society can or
should exercise all the powers of the Committee under
the Act or should exercise only day to day
administration of the Society until an elected Committee
is brought into action. In the case of Padma Charan
Samantsinghar vs. The Registrar of Co-operative
Societies Bhubaneswar MANU/OR/0050/1981 a Bench
of this Court was considering the status of an
Administrator appointed under Sub-section (1) of Section
32 of the Act and was examining the question whether
such a person can be equated with the Committee
defined in Section 2(c) of the Act. Construing Sections
32(1) and 2(c) of the Act, the learned Judges came to
hold (at page 151 and 152):--
"....... Sub-section (2) does not have the effect of
converting the Committee of Administrators to a
Committee in terms of the bye-laws. Sub-section (1)
must be confined to the 'Committee' in which under the
Act or the Bye-laws, the management of the affairs of
the society vests. The Administrator of the Committee of
Administrators is not such a Committee. The effect of
Sub-section (2) is only in regard to exercise of powers
and the deeming provision therein cannot be extended to
make the Committee of Administrators a Committee
referred to in Sub-section (1) and in terms of the
definition in Section 2(c) of the Act.
A somewhat similar question in the context of Sections
28 and 32(2) of the Act came up for consideration in the
case of Janarden Rout v. Election Officer, Cuttack
Central Co-opera- live Bank Ltd. MANU/OR/0331/1990
1990 (2) OLR 511. The learned Judges came to hold :--
Page 24 of 48
// 25 //
".........Hence, though in the election to the apex or the
central body, the co-operative societies who are the
members are to be represented by delegates duly
authorized in that behalf by their committees, yet so far
as either an Administrator or Authorized Officer is
concerned, they are subject to the control of the
Registrar even in the matter of functioning as
Committees of management while sending the
delegates. There cannot be any denial of the fact that
the Administrators or Authorized Officers are not the
Committee of management themselves but are mere
substitutes for them by way of a deeming provision
which is even absent so far as Section 28(1-a) is
concerned........"
In the case of Satyanarayan Patnaik v. State of Orissa
(O.J.C. No. 1667 of 1986, disposed of on 29-9-1986),
this Court was considering the question as to the person
in whom power of a municipal council is vested after
dissolution of the municipal council under subsection (5)
of Section 401 of the Orissa Municipal Act. In that case it
had been observed that discharging the powers of an
elected body temporarily does not make the person so
discharging the duties, the elected body itself. In a
statute when the expression 'deemed to be' is used, it
create a fiction and a thing is treated to be that which,
in fact, it is not. A (fiction is a legal assumption that a
thing is true which is either not true, or what is probably
false as true. Therefore, a legal fiction has to be strictly
confined to the area in which it operates. When a person
is deemed to be something, the only meaning possible is
that whereas he is not in reality that something, the Act
of Parliament requires him to be treated as if he were.
The legal fiction must be limited to the purposes
indicated by the context and cannot be given a larger
effect. The context is vital. When a statute enacts that
something shall be deemed to have been done, which in
fact and truth was not done, the Court is entitled and
bound to ascertain for what purposes and between
what persons the statutory fiction is to be resorted to
and full effect must be given to the statutory fiction and
it should be to its logical conclusion or Administrators of
the sub-section (1) of Section 32 of the Act to manage the
affairs of the Society, by virtue (2) and Bye-laws to be
the Committee of such Society. Sub-section (2) of Section
32 further provides that the exercise of power by such
deemed committee shall be subject to the control of the
Page 25 of 48
// 26 //
Registrar and to such instructions as he may from time
to time give. The appointment of such deemed
Committee is also for a specified period and does not
exceed the aggregate period of four years. From this it
follows that the legislature has created such legal fiction
for definite purpose, namely, to manage the affairs of
the society till a properly constituted Committee comes
into being on being elected. In the case of Bengal
Immunity Co. Ltd. v. State of Bihar,
MANU/SC/0083/1955 the Supreme Court held that
legal fiction is created only for some definite purpose
and the same is to be limited for the purpose for which it
was created and should not be extended beyond that
legitimate field. The Administrator having been
appointed for a limited purpose, the legal fiction created
for him under sub-section (2) of Section 32 of the Act
should not be allowed to operate beyond the limited
field of day to day running of the business of the
Society. In this view of the matter of a statutory fiction
by which an Administrator is deemed to be a Committee
of Society under subsection (2) of Section 32 and
exercises the power of the Committee, the first question
posed, requires answer as to whether the purposes of
the Act enjoin upon the Administrator to exercise all the
functions of the Committee of Society or merely some
functions of the Committee could be exercised by him.
The Administrator is appointed when a Committee of
Society is under supersession to manage the affairs of
the Society as provided in sub-section (1) of Section 32.
It would, therefore, be reasonable for us to construe that
while the elected body has been superseded by the
Registrar and an Administrator is appointed, such
Administrator called upon by statute to manage the
affairs of the society in the interregnum until a fresh
Committee of Society is constituted. Keeping in view the
co-operative movement and the object of having co-
operative societies under the control of a Registrar, it
would not he proper to hold that the Administrator
appointed by the Registrar to manage the affairs of a
Society though by virtue of the deeming provision is the
Committee of Society, can take a policy decision in
relation to the society in question. We are of the
considered opinion that a Managing Director being
appointed as the Administrator of the Committee of
Management can only discharge the duties and normal
functions of the society white the society is under
supersession and is not entitled to take any policy
Page 26 of 48
// 27 //
decision in relation to the society in question which
power west on the elected body itself, inasmuch as the
Administrator is not the 'society' itself, but by virtue of
the deeming provision is deemed to 'be a society'. This
being the position, the further question which requires a
probe is whether admission of members of a society
tantamount to a policy decision or is an ordinary
function relating to the affairs of the society. Under
section 16-A of the Act, no person shall be eligible for
being admitted as a member of the society If he does not
satisfy the requirements of the Act and the rules and
Bye-laws 'thereunder. Under Section 16(1)(b) of the Act,
no person is entitled to be admitted as a member of a
society other than a primary society except any society;
the State Government; the Central Government, and any
other person as may be prescribed. The proviso to the
aforesaid clause indicates that an individual may be
admitted only as a nominal member. Under the
definition of 'apex society' in Section 2(a). only societies
can be its members. Under the Proviso to Section 2(a),
individuals or body corporates may be taken as nominal
or associate membership of the Corporation is open.
Thus, whether admission of certain categories its
members an contained in Bye-law 2(a) and Bye-law 7(a)
provides as to whom the as the society for sot and
whether applications being made, the applicants could
be refused admission for sufficient reasons, are all in
the nature of a policy decision which has to be taken
bearing in mind several germane factors and cannot be
brought within the expression of "normal affairs of the
society and, therefore, an Administrator who has been
appointed to manage the affairs of the society though by
virtue of the deeming provision contained in Sub-section
(2) of Section 32 becomes the Committee of Society. yet
is not entitled to decide the question of admission of
members to the society. Therefore, in our considered
opinion, the decision of the Administrator (dated 16-5-
1994 to admit 46 members to the 'apex body cannot be
construed to be within the power of the said
administrator who has merely become a Committee of
Society by a deeming provision and as such the said
decision is invalid and inoperative and is liable to be
struck down.
9. Coming to the second question posed by us, we are
also persuaded to accept the submission of Mr. Acharya
for the petitioners that the Administrator admitted 46
Page 27 of 48
// 28 //
persons on 16-5-1994, the day before the election
notification for the Committee of Society was notified in
a hush-hush manner with unusual haste without
application of his mind fully to the relevant materials
and without examining the applications of the several
applicants and, therefore, such decision must be held to
be an abuse of power of the administrator. It is in this
context the conduct of the Administrator and the earlier
decisions of the registrar assume significance. As has
been held by this Court in O. J. C. No. 873 of 1994, the
Registrar appointed Shri Prasant Mohapatra as the
Administrator not in exercise of his statutory power but
at the instance of the Chief Minister and, therefore, that
decision was quashed making it clear that it would be
open for the registrar to pass a fresh order appointing a
proper person as the Administrator of the apex body
without being influenced by any extraneous
consideration. This order was passed by this Court on
12-4-1994. Оп 13-4-1994, the Registrar of Cooperative
Societies, appointed the self-same person as the
Administrator of the apex body and the said decision
was challenged in O. J. C. No. 3025 of 1994 and this
Court by an interim order stayed the appointment of
said Shri Mohapatra and permitted the Registrar, either
to revoke the order of appointment or to permit the
Managing Director to carry on the affairs of the
Corporation or the Registrar may himself manage the
affairs of the apex body and it is pursuant to this
interim direction, the Managing Director was permitted
to exercise the power under Sub-section (1) of Section 32
of the Act. On the face of the aforesaid blatant abuse of
power by the Registrar, when the Managing Director
was appointed as the Administrator by the Registrar
and then that Managing Director admits as many as 46
members to the apex body one day before the
notification for election to the-Committee of Society of the
apex body was given and such admission having been
undertaken by the Administrator without any scrutiny
or without any application of mind, as the file produced
before us indicates, it can safely be concluded that the
impugned decision of the Managing Director is not the
outcome of elimination of all relevant and germane
materials in the interest of the apex body, but is
calculated and is an attempt to support the candidature
of said Shri Mohapatra for whom the Registrar has
already exhibited his bias, and is a deliberate attempt
to push the cause of said Shri Mohapatra in the
Page 28 of 48
// 29 //
forthcoming election to the Committee of society. Such an
order of the Managing Director, therefore, must be held
to be a grossly malicious action intended to espouse the
cause of a particular individual whom the Registrar has
been trying to thrust arbitrarily, but has been prevented
from so doing because of the Court's intervention. In the
aforesaid premise, the order of the Managing Director
dated 1194 admitting 46 new members to the apex
body cannot be sustained and we, accordingly quash
the same.
6.5. Reliance was placed to a decision of the Hon'ble
Apex Court in the case of Joint Registrar of Co-
operative Societies vs. T.A. Kuttappan & Ors.,
reported in AIR 2000 SC 2378. Reliance was placed to
Para-1, 2, 3 and 7, which reads as follows:-
"1.These appeals by special leave are against a common order
made in OPs Nos. 12184, 14840, 14886, 15700, 17258, 18396
and 20913 of 1997. Section 32 of the Kerala Cooperative Societies
Act, 1969 (hereinafter referred to as "the Act") enables the
Registrar of Cooperative Societies to supersede the Committee of
Management under the circumstances set forth in sub-section (1)
thereto. After supersession of the Committee of Management, the
Registrar can appoint an administrator or administrators or a
committee as provided in Section 32(1)(a) and (b) of the Act. Such
committee or administrator or administrators so appointed shall,
subject to the control of the Registrar and to such instructions as
he may from time to time give, have power to exercise all or any of
the functions of the committee or of any officer of the society and
take all such action as may be required in the interests of the
society. When the administrator appointed on supersession of the
Committee of Management of certain cooperative societies wanted
to enrol new members to the society the same was objected to and
the original petitions under Article 226 of the Constitution were
filed before the High Court on the ground that the Registrar is only
expected to carry on day-to-day functions of the society and see
that election is conducted and a new committee in accordance
with the Act, rules and bye-laws of the society is constituted. It
was contended before the Court that the earlier decision
in George v. Jt. Registrar [1985 KLT 836] is no longer good law in
the light of the decision of this Court in K. Shantharaj v. M.L.
Nagaraj [(1997) 6 SCC 37] . The Full Bench of the High Court, after
referring to the earlier decision of the High Court and the decision
of this Court in K. Shantharaj [(1997) 6 SCC 37] held that the
Page 29 of 48
// 30 //
admission of a member is not mere "function" of the committee,
but is a "power" of the committee to admit members or not as
provided in bye-laws of the society. The committee can exercise
only certain functions and not any powers and, therefore, the
administrator or a committee appointed as aforesaid has no
power to enrol new members. This order is in challenge in these
appeals.
2. It is now brought to our notice that subsequent to the
decision of the High Court, the provisions of Section 32 have been
amended so that the administrator or the committee will have
power to exercise all or any of the powers and functions of the
committee. It is further brought to our notice that in Cherthala
Agricultural Rural Development Bank v. Jt. Registrar [(2000) 1 KLJ
291 (FB)] it has been held that the decision in the case before us
holding that the administrator has no power to enrol new
members would have prospective and not retrospective effect. The
scope of neither the amended Section 32 of the Act nor the
decision in Cherthala Agricultural Rural Development Bank v. Jt.
Registrar [(2000) 1 KLJ 291 (FB)] is required to be considered by
us in these proceedings.
3. The question whether an administrator appointed during
supersession of a Committee of Management of a cooperative
society can enrol new members is no longer res integra. When an
identical question came up before this Court for consideration in K.
Shantharaj case [(1997) 6 SCC 37] this Court held that from the
language of Section 30 [which is similar to Section 32(4) of the Act]
and Section 30-A of the Karnataka Cooperative Societies Act,
1959, it would be clear that the administrator, subject to control of
Registrar exercise all or any of the functions of the society, and
the Special Officer, subject to control of the State Government and
the Registrar exercise and perform all the powers and functions of
the committee of the society and in the interest of the society can
take such action as is necessary for proper functioning of the
society as per law. He should conduct elections as is enjoined
thereunder, that is, he is to conduct election with the members as
on the rolls and by necessary implication, he is not vested with
the power to enrol new members of the society. In the light of this
clear enunciation of law the view taken by the High Court appears
to be correct.
xxx xxx xxx
7. If we carefully analyse the provisions of the Act, it would be
clear that the administrator or a committee appointed while the
Committee of Management of the society is under supersession
cannot have the power to enrol new members and such a question
ought not to be decided merely by indulging in an exercise on
semantics in ascertaining the meaning of the expression "have
power to exercise all or any of the functions ...". Whether an
authority is discharging a function or exercising a power will have
to be ascertained with reference to the nature of the function or
the power discharged or exercised in the background of the
enactment. Often we do express that functions are discharged or
powers exercised or vice versa depending upon the context of the
duty or power enjoined under the law if the two expressions are
interchangeable. What is necessary to bear in mind is that nature
of function or power exercised and not the manner in which it is
done. Indeed this Court, while considering the provisions of
Page 30 of 48
// 31 //
Section 30-A of the Karnataka Act, which enabled a Special
Officer appointed to exercise and perform all the powers and
functions of the Committee of Management or any officer of the
cooperative society (and not merely functions), took the view that
the administrator or a Special Officer can exercise powers and
functions only as may be required in the interests of the
cooperative society. In that context, it was stated that he should
conduct elections as enjoined under law, that is, he is to conduct
elections with the members as on the rolls and by necessary
implication, he is not vested with power to enrol new members of
the society. We may add that a cooperative society is expected to
function in a democratic manner through an elected Committee of
Management and that Committee of Management is empowered to
enrol new members. Enrolment of new members would involve
alteration of the composition of the society itself and such a power
should be exercised by an elected committee rather than by an
administrator or a committee appointed by the Registrar while the
Committee of Management is under supersession. This Court has
taken the view, it did, bearing in mind these aspects, though not
spelt out in the course of the judgment. Even where the language
of Section 30-A of the Karnataka Act empowering a Special Officer
to exercise and perform all the powers and functions of the
Committee of Management of a cooperative society fell for
consideration, this Court having expressed that view, we do not
think, there is any need to explore the difference in the meaning of
the expressions "have power to exercise all or any of the functions
of the committee" in the Act and "exercise all or any of the
functions of the committee" in the Karnataka Act as they are not
different and are in substance one and the same and difference in
language will assume no importance. What is of significance is
that when the Committee of Management of the cooperative
society commits any default or is negligent in the performance of
the duties imposed under the Acts, rules and the bye-laws, which
is prejudicial to the interest of the society, the same is superseded
and an administrator or a committee is imposed thereon. The duty
of such a committee or an administrator is to set right the default,
if any, and to enable the society to carry on its functions as
enjoined by law. Thus, the role of an administrator or a committee
appointed by the Registrar while the Committee of Management is
under supersession, is, as pointed out by this Court, only to bring
on an even keel a ship which was in doldrums. If that is the
objective and is borne in mind, the interpretation of these
provisions will not be difficult".
6.6. With regard to the submission that Petitioner since
was on probation and accordingly had no vested right to
continue with the benefit, reliance was placed to a
decision in the case of Dasarathi Mahapatra vs. State
Page 31 of 48
// 32 //
of Orissa & Ors. reported in AIR, 1969, Orissa, 215.
Reliance was placed to Para-4 to 9, which reads as
follows:-
"4. The State of Orissa contends that as the petitioner had been
promoted temporarily until further orders to the higher rank of
Joint Director, Public Health he had no manner of right to hold
the post and as in the higher rank he was found unsuitable, his
reversion to his substantive post of Civil Surgeon does not carry
with it any stigma and does not entail any penal consequences
and as such cannot be construed as a penalty to attract the
operation of Article 311.
5. It is now well settled that a reduction in rank may be by way
of punishment or it may be an innocuous thing. If the
Government servant has a right to the particular rank, then the
very reduction from that rank will operate as a penalty for he
will then lose the emoluments privileges of that rank. If,
however, he has no right to the particular rank, his reduction
from an officiating higher rank to his substantive lower rank will
not ordinarily be a punishment. But the mere fact that the
servant has no title to the post or the rank and the Governmant
has by contract, expressed or implied, or under the rules, the
right to reduce him to a lower post does not mean that an order
of reduction of a servant to a lower post or rank cannot in any
circumstances be a punishment. The real test for determining
whether the reduction in such a case is not by way of
punishment is to find out if the order of reduction also visits the
servant with any penal consequences. Thus, if the order entails
or provides for forfeiture of his pay or allowance or the loss of his
seniority in the substantive rank or stoppage or postponement of
his future chances of promotion, then that circumstance may
indicate that although in form the Government has purported to
exercise its right to terminate the employment or to reduce the
servant to a lower rank under the terms of the contract of
employment or under the rules, in truth and reality the
Government has terminated the employment as and by way of
penalty. The Court, therefore, has to apply the two tests
mentioned above, namely, (1) whether the servant had a right to
the post or the rank or (2) whether he has been visited with evil
consequences referred to above. If the case satisfies either of the
two tests, then it must be held that the servant has been
punished and if the requirements of the rules and Article 311
have not been complied with, the reduction in rank must be held
to be wrongful and in violation of the constitutional right of the
servant. (See P.L. Dhingra v. Union of India [A.I.R. 1958 S.C. 36.]
).
6. Shri R.N. Misra appearing for the petitioner does not dispute
that the petitioner has not acquired any right to hold the post of
Joint Director and that his appointment was only temporarily
made until further orders. He, however, contends that the
petitioner's reversion was not occasioned by any want of
Page 32 of 48
// 33 //
vacancies in the higher cadre, because on his reversion, an
officer still junior to him has been promoted to fill up his place,
and that in view of this fact and also the fact that officers junior
to him in the substantive rank and who were promoted
simultaneously with him to the higher cadre, have been allowed
to continue in such higher cadre, the petitioner's reversion in the
circumstances must be deemed to be by way of penalty. In
support of this contention he relies on P.C. Wadhwa v. The Union
of India [A.I.R. 1964 S.C. 423.] , M. Ramaiah v. The State of
Mysore [A.I.R. 1965 Mysore 164.] , and State of Andhra
Pradesh v. X. Chinna Reddi [A.I.R. 1963 A.P. 412.] . The decision
in Wadhwa's case proceeded on the basic fact that for members
of All India Services like the Indian Police Services to which
Wadhwa belonged, promotion was a matter of right and that a
person borne on junior scale of pay has a right to hold the post in
senior scale depending upon the availability of a post and
consequently if a person holding a post in the senior scale,
though in an officiating capacity, is found to be unfit to hold that
post, action will have to be taken against him as required under
Rule 5 of the Discipline and Appeal Rules because his reversion
to a post in the lower scale would amount to reduction in rank
within the meaning of Article 311. Obviously no such
considerations can be applied in the case of the service to which
the petitioner belongs. In M. Ramaiah v. The State of
Mysore [A.I.R. 1965 Mysore 164.] , the petitioner Ramaiah along
with six others, some senior and some Junior to him, in the
substantive rank were appointed to officiate in higher posts.
Subsequently, the petitioner alone was reverted to his
substantive post, the order being that for a period of one year
thereafter during which his work would be assessed, he would
not have any promotion. In those circumstances, Ramaiah's
reversion to his substantive post was held to be a penalty
because for a period of one year after his reversion he was not to
have any promotion. This meant that there was postponement of
his chances of promotion in the substantive rank. In the instant
case, there being no such order postponing the petitioner's
chances of promotion in future, the decision in Mysore
case cannot be of any help to the petitioner. Mr. Misra contends
that the petitioner has just about a year to retire and during this
period he may not in usual course get any chance of further
promotion. That is altogether a different matter and cannot be
pressed into service to judge the nature of the impugned order.
In State of Andhra Pradesh v. X. Chinna Reddi [A.I.R. 1963 A.P.
412.] , the petitioner who was as Upper Division Clerk in the
Collector's office, Guntur was on his application appointed as an
Upper Division Clerk in the Andhra Secretariat Service which
was in a higher scale of pay. He completed the probation in the
latter service and was declared to be an approved probationer.
Some time thereafter, be was reverted to his former post in the
Guntur Collectorate, and he therefore came to the High Court
complaining that this amounted to reduction in rank within the
meaning of Article 311. The High Court, on a consideration of the
rules on the subject, came to the conclusion that under the
relevant rules, an approved probationer can only be transferred
to serve in a post borne on the same cadre or class and that he
can be reverted only for want of vacancy. Although an approved
probationer does not as such acquire the status of a permanent
Page 33 of 48
// 34 //
member of the service, the fact does remain that he awaits
appointment as a full member of the service. It is in these
circumstances that their Lordships held that the reversion of the
petitioner in that case amounted to a penalty attracting the
operation of Article 311. None of these cases therefore on which
Sri Misra relies can be of any assistance to him. A Division
Bench of this Court had occasion to consider the identical
question in Baradakanta Misra v. State of Orissa [I.L.R. 1966
Cutt. 503.] . The petitioner in that case was a Subordinate Judge
who had been temporarily promoted to the higher rank of A.D.M.
(J.). Some time afterwards, he was reverted to his substantive
rank of Subordinate Judge. Admittedly at that time an officer (Sri
S. Naik) who was junior to him in the rank of Subordinate
Judges and who had been promoted to the higher rank of A.D.M.
(J.), was allowed to continue as such. The grievance of the
petitioner was that the order of reversion passed against him
without reverting his junior Sri S. Naik on the principle of "Last
come first go" resulted in the loss of his seniority and as such it
visited him with penal consequences. Ahmad, C.J. after an
elaborate discussion of the law on the subject and the various
decisions cited at the Bar over-ruled the contention. His Lordship
observed--
"Lastly it has to be noted that when a promotion to a higher post
as an officiating hand is not available to be claimed as a matter
of right on the basis of seniority alone but is to be made after
selection by the authority concerned on the principle of seniority-
cumsuitability, situation like this bound to follow, when an
officiating employee not having been found suitable on trial is
reverted under the rules of service to bis substantive post. It is
not uncommon that at a time a number of officers may have been
acting as officiating hands in the higher posts. It is true that in
such a case if any of them has to be reverted exclusively on the
ground of the exigencies of service alone and not for the reason
or his being found unsuitable for the post, the usual principle of:
"last come first ge" will ordinarily be followed
(vide Ramaswamy v. I.G. of Police [A.I.R. 1966 S.C. 175.] . This
state of affairs, however, will prevail only so long as reversion is
due exclusively to the exigencies of service. But where reversion
of an officiating hand is due to the fact that on trial be is found
not suitable, the principle of "last come first go" can have no
relevancy or applicability. It is quite understandable that in such
a case the officer who is reverted on the ground that on trial he
has been found not suitable may not be then the juniormost in
the higher rank. In that case it will necessarily follow that
notwithstanding his seniority he will be reverted while those
standing junior to him in that rank will continue to officiate as
before. Therefore, that circumstance by itself can be no ground
for holding that his reversion resulted in any loss of his seniority
in the substantive rank".
7. The same view was expressed by the Supreme Court in The
Divisional Personnel Officer, Southern Railway,
Mysore v. Raghavendrachar [A.I.R. 1966 S.C. 1529.] . In that
case, the respondent and one James Blazey were promoted from
the lower grade of Train Examiners to officiate in the higher
grade. The respondent was shown against item no. 2 and
Blazey against item no. 3 in the promotion list. The promotion of
Page 34 of 48
// 35 //
both was purely in provisional basis. Later on, the respondent
was reverted to the lower grade while Blazey was retained in
the higher grade. The respondent having complained that this
circumstance indicated that his reversion was by way of
penalty, their Lordships held that the respondent's rank in the
substantive post, that is, in the lower grade, was in no way
affected by the reversion. In the substantive grade the
respondent retained his rank. He was visited with no penal
consequences. Once it was accepted that the respondent had no
right to the post to which he was provisionally promoted, his
reversion did not amount to a reduction in rank.
8. It was further contended by Sri Misra that Government's view
that the petitioner was found unsuitable in the higher post cast a
stigma on him and although the order of reversion appeared
innocuous on the fact of it, it is clear that petitioner's reversion
was ordered by way of penalty. It was also contended with
some amount of vehemence that the Government's action
reverting the petitioner was mala fide. It may be noticed that in
the order reverting the petitioner to his substantive post, the
Government indicated no reasons. It is only in answer to the
writ, petition that Government in their counter stated that the
petitioner was given ad hoc promotion to the post of Joint
Director, Health on trial basis and since he was not found
suitable after trial, he was reverted to his substantive post of
Civil Surgeon. It was further stated that the services of the
petitioner were placed at the disposal of the Labour Department
for appointment as Administrative Medical Officer for a period of
not exceeding one month. But as the petitioner was not found
acceptable to the Labour Department, the Administrative
Department, namely, the Health Department had to review his
case and they found him unsuitable for the post of Joint Director,
Health to which he was promoted on ad hoc basis and therefore
he was reverted. During hearing, Sri Misra for the petitioner has
attacked this action of Government as mala fide, although no
such allegation was made in the writ petition itself. It may be
noticed that the order of reversion did not indicate any reason
and there is nothing in the order to oast any stigma on the
petitioner. For every order of discharge or reversion, there is
always a reason and once it is found that the right exists with
the Government under the terms of the contract or the rules to
revert the petitioner, the motive operating in the mind of the
Government is wholly irrelevant. If there is no stigma on the face
of the order, one cannot look into the background to discover
whether any such stigma can be inferred.
See Champaklal v. Union of India [A.I.R. 1964 S.C. 1254.] and N.
Saksena v. The State of Madhya Pradesh [A.I.R. 1967 S.C.
1264.] . In dealing with this aspect of the matter, the real
character either of termination of service or of reduction in rank
must be determined by reference to the material facts that
existed prior to the order. If in a case where a temporary servant
attacks the validity of his discharge on the ground of mala fides
on the part of the authority, the latter to resist the plea of mala
fides refers to certain facts justifying the order of discharge and
these facts relate to misconduct, negligence or inefficiency of the
said servant, it cannot logically be said that in view of the plea
thus made by the authority long after the order of discharge, it
should be held that the order of discharge was the result of
Page 35 of 48
// 36 //
considerations set out in the said plea. That is not even the case
here because mala fides on the part of the Government have not
been pleaded in the petition. We have pointed out relying on B.K.
Misra's case referred to above that the authority concerned has
the right to revert an officer, if found unsuitable, although it may
so happen that his juniors in the substantive cadre are allowed
to continue to officiate in the higher post.
9. Mr. Misra lastly contends that right from the time of the
promotion, the petitioner was working in the Labour Department
to which his services had been lent and that he was tried not for
a single day in the post of Joint Director of Health under the
Health Department to which he was promoted and that in such
circumstances, the plea of the Government that he was found
unsuitable in the post of Joint Director cannot be accepted. This
argument can hardly be accepted. As rightly contended by the
learned Government Advocate it may be that Government in
considering the case of the petitioner for a promotion to the
higher rank was of opinion even initially that he was not
suitable for appointment in any of the posts of Joint Directors
under the Health Department, but wished to try him in the post
of Administrative Medical Officer under the Labour Department
which is generally meant for officers of the cadre of Joint
Directors and after trial having found him unsuitable even in the
post of Administrative Medical Officer decided to revert him. It
may also be, as contended by the learned Government Advocate,
that after the Labour Department found him to be unsuitable,
Government considered whether be was suitable to be appointed
as one of the Joint Directors under the Health Department and
came to the conclusion that he was not suitable. Whether it is
the one or the other, that is exclusively a matter for the decision
of Government and it would not be open to the Court to question
that decision. In the result, therefore, the petition must fail and is
dismissed. But in the circumstances of the case, there will be no
order as to costs".
6.7. Reliance was placed to a decision of the Hon'ble
Apex Court in the case of Parshotam Lal Dhingra vs.
Union of India, reported in AIR 1958 SC-36. Reliance
was placed to Para-36 to 38, which reads as follows:-
"36.It does not, however, follow that, except in the three
cases mentioned above, in all other cases termination of
service of a Government servant who has no right to his
post, e.g., where he was appointed to a post, temporary or
permanent, either on probation or on an officiating basis
and had not acquired a quasi-permanent status, the
termination cannot, in any circumstance, be a dismissal or
Page 36 of 48
// 37 //
removal from service by way of punishment. Cases may
arise where the Government may find a servant unsuitable
for the post on account of misconduct, negligence,
Inefficiency or other disqualification. If such a servant was
appointed to a post, permanent or temporary, either on
probation or on an officiating basis, then the very
transitory character of the employment implies that the
employment was terminable at any time on reasonable
notice given by the Government. Again if the servant was
appointed to a post, permanent or temporary, on the
express condition or term that the employment would be
terminable on say a month's notice as in the case of Satish
Chander Anand v. Union of India MANU/SC/0097/1953:
[1953]4SCR655, then the Government might at any time
serve the requisite notice. In both cases the Government
may proceed to take action against the servant in exercise
of its powers under the terms of the contract of
employment, express or implied, or under the rules
regulating the conditions of service, if any be applicable,
and ordinarily in such a situation the Government will take
this course. But the Government may take the view that a
simple termination of service is not enough and that the
conduct of the servant has been such that he deserves a
punishment entailing penal consequences. In such a case
the Government may choose to proceed against the servant
on the basis of his misconduct, negligence, Inefficiency or
the like and inflict on him the punishment of dismissal,
removal or reduction carrying with it the penal
consequences. In such a case the servant will be entitled to
the protection of Art. 311(2).
37. The position may, therefore, be summed up as follows:
Any and every termination of service is not a dismissal,
removal or reduction in rank. A termination of service
brought about by the exercise of a contractual right is not
per se dismissal or removal, as has been held by this
Court in Satish Chander Anand v. The Union of India
(supra). Likewise the termination of service by compulsory
retirement in terms of a specific rule regulating the
conditions of service is not tantamount to the infliction of a
punishment and does not attract Art. 311(2), as has also
been held by this Court in Shyam Lal v. The State of Uttar
Pradesh MANU/SC/0134/1954: (1954) IILLJ139SC. In
either of the two abovementioned cases the termination of
the service did not carry with it the penal consequences of
loss of pay, or allowances under r. 52 of the Fundamental
Rules. It is true that the misconduct, negligence,
Page 37 of 48
// 38 //
Inefficiency or other disqualification may be the motive or
the inducing factor which influences the Government to
take action under the terms of the contract of employment
or the specific service rule, nevertheless, if a right exists,
under the contract or the rules, to terminate the service the
motive operating on the mind of the Government is, as
Chagla C.J. has said in Shrinivas Ganesh v. Union of India
(supra), wholly irrelevant. In short, if the termination of
service is founded on the right flowing from contract or the
service rules then, prima facie, the termination is not a
punishment and carries with it no evil consequences and
so Art. 311 is not attracted. But even if the Government
has, by contract or under the rules, the right to terminate
employment without going through the procedure
prescribed for inflicting the punishment of dismissal or
removal or reduction in rank, the Government may,
nevertheless, choose to punish the servant and if the
termination of service is sought to punishment and the
requirements of Art. 311 must be complied with. As
already stated founded on misconduct, negligence,
inefficiency or other disqualification, then it of the servant
has got a right to continue in the post, then, unless the
contract of employment or the rules provide to the contrary,
his services cannot be terminated otherwise than for
misconduct, negligence, Inefficiency or other good and
sufficient cause. A termination of the service of such a
servant on such grounds must be a punishment and,
therefore, a dismissal or removal within Art. 311, for it
operates as a forfeiture of his right and he is visited with
the evil consequences of loss of pay and allowances. It
puts an inedible stigma on the officer affecting his future
career, A reduction in rank likewise may be by way of
punishment or it may be an innocuous thing. If the
Government servant has a right to a particular rank, then
the very reduction from that rank will operate as a penalty,
for he will then lose the emoluments and privileges of that
rank. If, however, he has no right to the particular rank,
his reduction from an officiating higher rank to his
substantive lower rank will not ordinarily be a
punishment. But the mere fact that the servant has not
title to the post or the rank and the Government has, by
contract express or implied, or under the rules, the right to
reduce him to a lower post does not mean that an order of
reduction of a servant to a lower post or rank cannot in
any circumstances be a punishment. The real test for
determining whether the reduction in such cases is or is
not by way of punishment is to find out if the order for the
Page 38 of 48
// 39 //
reduction also visits the servant with any penal
consequences. Thus if the order entails or provides for the
forfeiture of his pay or allowances or the loss of his
seniority in his substantive rank or the stoppage or
postponement of his future chances of promotion, then that
circumstance may indicate that although in form the
Government had purported to exercise its right to terminate
the employment or to reduce the servant to a lower rank
under the terms of the contract of employment or under the
rules, In truth and reality the Government has terminated
the employment as and by way of penalty. The use of the
expression "terminate" or "discharge" is not conclusive. In
spite of the use of such innocuous expressions, the court
has to apply the two tests mentioned above, namely, (1)
whether the servant had a right to the post or the rank or
(2) whether he has been visited with evil consequences of
the kind hereinbefore referred to. If the case satisfies
either of the two tests then it must be held that the servant
has been punished and the termination of his service must
be taken as a dismissal or removal from service or the
reversion to his substantive rank must be regarded as a
reduction in rank and if the requirements of the rules and
Art. 311, which give protection to Government servant
have not been complied with, the termination of the service
or the reduction in rank must be held to be wrongful and in
violation of the constitutional right of the servant.
38. Applying the principles discussed above it is quite
clear that the petitioner before us was appointed to the
higher post on an officiating basis, that is to say, he was
appointed to officiate in that post which, according to
Indian Railway Code, r. 2003(19) corresponding to F.R.
9(19), means, that he was appointed only to perform the
duties of that post. He had no right to continue in that post
and under the general law the Implied term of such
appointment was that it was terminable at any time on
reasonable notice by the Government and, therefore, his
reduction did not operate as a forfeiture of any right and
could not be described as reduction in rank by way of
punishment. Nor did this reduction under Note 1 to r. 1702
amount to his dismissal or removal. Further it is quite clear
from the orders passed by the General Manager that it did
not entail the forfeiture of his chances of future promotion
or affect his seniority in his substantive post. In these
circumstances there is no escape from the conclusion that
the petitioner complain that the requirements of Art. 311(2)
were not complied with, for those 311(2) do not come into
Page 39 of 48
// 40 //
play at all. In this view of the matter the petitioner cannot
complaint that the requirements of Art.311(2) were not
complied with, for those requirements never applied to him.
The result, therefore, is that we uphold the decision of the
Division Bench, although on somewhat different grounds.
This appeal must, therefore, be dismissed with costs.
Vivian Bose, J."
6.8. Reliance was placed to a decision in the case of
R. Vishwanatha Pillai vs. State of Kerala & Ors.
reported in AIR 2004 SC-1469. Reliance was placed to
Para-16 & 17, which reads as follows:-
"16. In Ishwar Dayal Sah v. State of Bihar [1987 Lab IC 390 : 1987
BBCJ 48 (Pat)] the Division Bench of the Patna High Court
examined the point as to whether a person who obtained the
appointment on the basis of a false caste certificate was entitled to
the protection of Article 311 of the Constitution. In the said case the
employee had obtained appointment by producing a caste
certificate that he belonged to a Scheduled Caste community which
later on was found to be false. His appointment was cancelled. It
was contended by the employee that the cancellation of his
appointment amounted to removal from service within the meaning
of Article 311 of the Constitution and was therefore void. It was
contended that he could not be terminated from service without
holding departmental inquiry as provided under the Rules. Dealing
with the above contention, the High Court held that if the very
appointment to the civil post is vitiated by fraud, forgery or crime or
illegality, it would necessarily follow that no constitutional rights
under Article 311 of the Constitution can possibly flow. It was held:
(Lab IC pp. 394-95, para 12)
If the very appointment to civil post is vitiated by fraud, forgery or
crime or illegality, it would necessarily follow that no constitutional
rights under Article 311 can possibly flow from such a tainted force. In
such a situation, the question is whether the person concerned is at all
a civil servant of the Union or the State and if he is not validly so, then
the issue remains outside the purview of Article 311. If the very entry
or the crossing of the threshold into the arena of the civil service of the
State or the Union is put in issue and the door is barred against him,
the cloak of protection under Article 311 is not attracted.
17. The point was again examined by a Full Bench of the Patna
High Court in Rita Mishra v. Director, Primary Education, Bihar [AIR
1988 Pat 26 : 1988 Lab IC 907 : 1987 BBCJ 701 (FB)] . The question
posed before the Full Bench was whether a public servant was
entitled to payment of salary to him for the work done despite the fact
Page 40 of 48
// 41 //
that his letter of appointment was forged, fraudulent or illegal. The
Full Bench held: (AIR p. 32, para 13)
"13. It is manifest from the above that the rights to salary, pension
and other service benefits are entirely statutory in nature in public
service. Therefore, these rights, including the right to salary, spring
from a valid and legal appointment to the post. Once it is found that
the very appointment is illegal and is non est in the eye of the law, no
statutory entitlement for salary or consequential rights of pension and
other monetary benefits can arise. In particular, if the very
appointment is rested on forgery, no statutory right can flow from it."
6.9. With regard to the permissibility, to recover the
excess payment, reliance was placed to the decision of
this Court in the case of Binapani Patnaik vs. State of
Odisha & Ors., reported in 2024 (1) OLR-827. Reliance
was placed to Para-6.1 to 7.2, which reads as follows:-
"6.1. It is contended that even though petitioner was
sanctioned with family pension at a lower rate as
reflected in Para-6 of the counter so filed by Opp.
Party No.2, but the bank wrongly released higher
amount w.e.f 28.10.2008. When the said fact was
brought to the notice of the bank by Opp. Party No.2
vide his letter dt.04.08.2020 under Annexure-2, a
sum of Rs.8,300/- was recovered from the monthly
pension of the petitioner w.e.f August, 2020 till July,
2023. Pursuant to the interim order passed by this
Court, no further recovery has been made after July,
2023. Learned counsel for the bank contended that
since Petitioner was sanctioned with the family
pension at the rate indicated in para 6 of the counter
so filed by Opp. Party No.2, and the Petitioner was
released with higher pension amount wrongly by the
bank which is not disputed, no reality is there on the
part of the bank to recover the amount so paid in
excess w.e.f 8.10.2008, as it is public money, which
has been wrongly paid.
4.2. It is also contended that similar Issue was issue
before the High Court of Karnataka in W.P(C)
No.20321 of 2021. High Court of Karnatak taking into
account the fact that petitioner therein has been paid
Page 41 of 48
// 42 //
in excess, which is public money, directed for
recovery of a sum of Rs.4,000/- per month from the
family pension of the Petitioner. The stand taken by
the High Court of Karnatak in Para 10 & 11 of the
order dt. 27.10.2022 is reproduced hereunder.
"10. Pension, trite, not a bounty or a gratis that is
granted to the Pensioner or the spouse of the
Pensioner as a family pension, for the Bank to deal
with it as its whim and fancy. It is to be noticed that
the husband of the Petitioner is not an employee of
the Bank, He has only his account in the bank.
Pension is deposited rightly in the CPPC. The State
Government has not paid any excess pension to the
husband of the Petitioner. It is the irresponsibility of
the Officers of the Bank, which has led to such over
payment. Therefore, to generate a balance in the facts
and circumstances becomes necessary. The amount
that is deposited into the account of the husband of
the Petitioner is neither the money belonging to the
callous officers nor the money that belonged to the
husband of the Petitioner. It is "public money".
Therefore, I deem It appropriate to permit recovery of
the amount in equal monthly instalments of
Rs.4,000/- (Rupees four thousand only) from the
hands of the Petitioner.
11. For the aforesaid reasons, I pass the following:
ORDER
(1) Writ Petition is allowed.
(II) A mandamus shall issue to the respondent/Bank
to re-credit the amount that is recovered l.e.
Rs.6,40,000/- or whatever, from the account of the
Petitioner, within two weeks from the date of receipt
of a copy of this order and also pay appropriate
pension without any deductions on this issue.
SPONSORED
(III) The Bank is at liberty to recover Rs.4,000/- every
month from the family pension of the Petitioner till the
alleged excess amount deposited in the account of the
husband of the Petitioner gets cleared.”
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// 43 //
7. Having heard learned counsel appearing for the
parties and after going through the materials
available on record, this Court finds that on the death
of the Petitioner’s husband, she was sanctioned with
the family pension with the rate as indicated in Para-
6 of the counter so filed by Opp. Party No.2. Petitioner
does not dispute the amount so sanctioned in her
favour as indicated In Paragraphs-6 of the counter
affidavit.
7.1. Since on the face of the amount sanctioned
toward family pension, Petitioner admittedly has
received higher amount because of the fault
committed by bank, this Court is of the view that the
Petitioner is required to pay back the amount to the
bank as it amounts to receipt of excess amount which
was never sanctioned by the Government. The
amount so received in excess by the Petitioner and
indicated in Annexure-2 being public money, no
Illegality can be attributed to Opp. Party No.2 and 4 in
recovering the excess payment.
7.2. In view of the same, this Court placing reliance
on the decision of the Karnataka High Court as cited
supra is not inclined to Interfere with the request
made by Opp. Party No.2 to recover the excess
payment as Indicated in Annexure-2. Taking into
account the fact that a sum of Rs.2,73,000/- has
already been recovered from the family pension of the
petitioner, it is observed that the bank from this
month onwards will recover a sum of Rs.1,000/- per
month from the monthly pension of the Petitioner till
the amount is so recovered or till Petitioner is alive,
whichever is earlier.
Learned counsel appearing for the Petitioner also
fairly accept the view of this Court with regard to
recovery of sum of Rs.1,000/- per month from the
monthly pension of the petitioner from this month
onwards.
With the aforesaid observation and direction, the Writ
Petition is disposed of.”
6.10. Making all the submissions, learned counsel
appearing for the Opposite Party-Bank contended that
Page 43 of 48
// 44 //
since by the time the benefit of promotion extended vide
order dtd.23.06.2023 was withdrawn with passing of the
impugned order dtd.25.08.2022 under Annexure-5,
Petitioner was under probation, Petitioner had no vested
right to continue with the benefit.
6.11. It is also contended that since the decision of the
Bank to withdraw the benefit is a policy decision of the
Bank, the same cannot be interfered with, in exercise of
the power conferred on this Court under Article-226 of
the Constitution of India.
6.12. It is also contended that since the Committee who
took the decision in its proceeding dtd.22.06.2022, was
not a Committee constituted in accordance with law, the
decision taken by the said Committee being illegal, benefit
extended basing on such decision of the Committee
cannot be allowed to continue.
7. To the submission made by Mr. S. Nanda, learned
counsel appearing for the Opposite Party-Bank, learned
counsel appearing for the Petitioner contended that since
Page 44 of 48
// 45 //
Petitioner after getting the benefit of promotion retired on
30.06.2022, Petitioner had no occasion to complete the
probation period, if any.
7.1. It is also contended that in the order of promotion so
issued under Annexure-1, there is no such stipulation
that such benefit is under probation.
7.2. It is also contended that since benefit of promotion
was duly implemented with extension of the scale of pay
so admissible to the promotional post and by the time,
the impugned decision was taken on 26.08.2022 to
withdraw the benefit, Petitioner had already retired w.e.f.
30.06.2022, such benefit cannot be withdrawn so far as it
relates to the Petitioner. It is accordingly contended that
the impugned order needs interference of this Court.
8. Having heard learned counsel appearing for the
Parties and considering the submissions made, this Court
finds that Petitioner while continuing as a Grade-IV
employee under the Opposite Party-Bank, basing on the
decision taken by the Appointment Committee in its
Page 45 of 48
// 46 //
proceeding dtd.22.06.2022, Petitioner along with 108
others were extended with the benefit of promotion to
different rank including to the rank of Asst. Manager in
Grade-IV vide order dtd.23.06.2022 under Annexure-1.
Basing on such order of promotion, Petitioner not only
joined in the promotional post of Asst. Manager, Grade-IV
but also he was extended with the benefit of the scale of
pay so applicable to the promotional post as per order
dtd.29.06.2022 under Annexure-2.
8.1. However, it is found that such benefit of promotion,
extended vide order dtd.23.06.2022 was withdrawn vide
the impugned order dtd.26.08.2022 under Annexure-5,
basing on the subsequent decision taken by the self-same
Appointment Committee in its proceeding
dtd.25.08.2022.
8.2. Considering the materials available on record, it is
the view of this Court that, since by the time the
subsequent Committee in its proceeding dtd.25.08.2022
resolved and recommended to withdraw the benefit of
promotion, so acted upon by the Opposite Party-Bank
Page 46 of 48
// 47 //
with issuance of the impugned order dtd.26.08.2022
under Annexure-5, Petitioner had already retired from his
services on attaining the age of superannuation on
30.06.2022, neither the decision taken by the
Appointment Committee in its proceeding dtd.25.08.2022
be made applicable to the case of the Petitioner nor the
impugned order passed by the Opposite Party-Bank vide
order dtd.26.08.2022 under Annexure-5.
8.3. Not only that since by the time such benefit was
withdrawn, Petitioner had already retired while holding
the promotional post with extension of the scale of pay so
applicable to the promotional post vide order
dtd.29.06.2022 under Annexure-2, it is the view of this
Court that Petitioner is not liable to refund the excess
payment if any in view of the decision of the Hon’ble Apex
Court in the case of Rafique Masiha so followed in the
case of Thomos Daniel so cited (supra).
8.4. It is also the view of this Court that since by the
time the benefit was withdrawn vide order
dtd.26.08.2022, Petitioner had already retired while
Page 47 of 48
// 48 //
holding the promotional post on 30.06.2022, Petitioner is
eligible and entitled to get all such benefits so admissible
to the promotional post including his retiral benefits. In
view of the same, the decisions relied on by the learned
counsel for the Opp. Party -Bank is quite distinguishable
and not applicable to the facts of the present case.
8.5. In view of the aforesaid analysis, this Court while
quashing the impugned order dtd.26.08.2022 so issued
by Opposite Party No.1 under Annexure-5, so far as it
relates to the Petitioner, directs the Opposite Party-Bank
to extend all the benefits as due and admissible in favour
of the Petitioner in the promotional post of Asst. Manager
including his retiral benefits.
9. Accordingly, the Writ Petition stands disposed of.
(Biraja Prasanna Satapathy)
Judge
Signature Not Verified
Orissa High Court, Cuttack
Digitally Signed Dated the 7th April, 2026/Subrat
Signed by: SUBRAT KUMAR BARIK
Reason: Authentication
Location: HIGH COURT OF ORISSA, CUTTACK
Date: 08-Apr-2026 17:09:06
Page 48 of 48
