Court rules Cooperative Bank's extension of service without legal authority; writ petition dismissed.
In a significant ruling, the Jammu & Kashmir and Ladakh High Court dismissed a writ petition filed by Mohammad Shafi Reshi, challenging his premature retirement from the Urban Cooperative Bank (UCB), Anantnag. The court upheld that Reshi's extension of service beyond the age of 58 was granted without legal authority, rendering his continuation in service void.
The petitioner, Mohammad Shafi Reshi, was relieved from his position as the General Manager/Chief Executive Officer of UCB, Anantnag, after his extension of service was deemed unauthorized. Reshi, who joined the bank in 1987, was due to retire on March 31, 2021, upon reaching the age of superannuation. However, the bank's Board of Management had granted him a three-year extension starting April 1, 2023.
The court, presided over by Mr. Shahzad Azeem, J., found that the extension was granted by the bank's Board of Management, which was later superseded by a Board of Administrators due to alleged illegalities. The court ruled that the Board of Management had no authority to extend service beyond the prescribed retirement age of 58, as established under SRO 233 of 1988.
The petitioner argued that the orders for his retirement violated principles of natural justice as no hearing was granted to him. He further contended that the extension was granted by a valid board and that his removal without prior approval from the Reserve Bank of India violated statutory guidelines. However, the court observed that the extension could only be authorized through amendments to the statutory rules by the government, not by the bank's Board of Management.
The court also addressed the maintainability of the writ petition, noting that while cooperative banks may not be considered a "State" under Article 12 of the Constitution, they perform public functions, making them amenable to writ jurisdiction under Article 226. The nature of UCB, Anantnag’s operations, including accepting public deposits and being under RBI regulation, was deemed a public function.
The court's decision underscores the importance of adhering to statutory rules governing service conditions and reinforces the limitations of a cooperative bank's management in altering such conditions without proper legal authority. The dismissal of the petition and the vacation of interim orders signify the court's stance on upholding statutory provisions over unauthorized administrative decisions.
Bottom line:-
Cooperative Bank - Writ petition maintainability - A Cooperative Bank performing public functions such as accepting public deposits and advancing loans is amenable to writ jurisdiction under Article 226 of the Constitution of India, even if it is not a "State" or "instrumentality of State" under Article 12.
Statutory provision(s): Article 226 of the Constitution of India, Cooperative Societies Act, 1989 (Section 29(4), Section 70), SRO 233 of 1988, Banking Regulation Act, 1949 (Sections 53A and 56).
