Jawahar Lal Gupta, J.
1. The two petitioners claim to be the President and the General Secretary of the Punjab Co-operative Bank Employees Federation. They allege that on February 22, 1997, the (Sic)deration had passed a resolution to bring certain 'scandals' to the notice of the Government; to issue a memorandum and to hold rallies against the working of the Managing Director of the Bank. In March, 1997, a memorandum was sent to the Governor. On April 4, 1997, petitioner No. 1 was transferred to Sangrur. On April 5, 1997, petitioner No. 2 was transferred to Tanda. In May, 1997, the petitioners sought a CBI enquiry. They also complained against their victimisation. On May 26, 1997, their explanation was sought vide letter, a copy of which has been produced as Annexure P-10 with the writ petition. They received the communications on June 5 and June 7, 1997 respectively. They submitted their replies on June 16, 1997 through registered post. However, on June 23, 1997, the Registrar issued instructions to the Bank to suspend the petitioners in pursuance of which they were placed under suspension vide orders dated June 27, 1997.
2. The petitioners allege that the orders of suspension are wholly illegal as those based on an erroneous assumption that they had submitted no reply to the show cause notices and they had ceased to be the office bearers of the Federation. They also allege that the Registrar had no jurisdiction to order their suspension. The petitioners further allege that respondent No. 4 had committed various irregularities which need to be enquired into and that she was not qualified to continue working as the Managing Director of the Respondent-Bank. The petitioners pray that the orders of their suspension passed on June 27, 1997, copies of which have been produced as Annexures P-12 and P-13, be quashed, a writ of mandamus be issued directing the respondent to institute the CBI inquiry against respondent No. 4 and a writ of quo-warranto be issued asking her as to 'under what authority of law she is continuing as a Managing Director of the Bank in the absence of the Board of Directors'.
3. The respondents controvert the claim made by the petitioners. A written statement has been filed on behalf of the State of Punjab and the Registrar of Co-operative Societies by Mr. V.K. Bansal, the Joint Registrar. It has been inter alia averred that according to the intimation received in the office of the Registrar, 'the petitioners were no longer the President and General Secretary of the Federation. Still, they have been addressing letters/communications to the Government on the letter heads of the Federation holding out themselves as President and General Secretary.... They were even issuing press statements. Their such activities were not only creating unnecessary work resulting in wastage of time...but also creating adverse impression about the working of the Bank which is otherwise quite satisfactory from all angles. It was in this situation that the letter dated 26.5.1997 was addressed to the petitioners to have their explanation on the points mentioned therein.' They were required to submit their reply within 15 days. The office of respondent No. 2 did not receive any reply by June 13, 1997. In this situation, orders were passed with regard to the suspension of the petitioners on that day. The reply was received on June 17 and June 18, 1997 respectively. The Federation is not a registered body. The petitioners are no longer the President and the General Secretary of the Federation. Even a registered Union has no right to make allegations against the senior officers. A Union can only pursue the cases of the employees. In the present case, the petitioners are neither the office' bearers of the Federation nor the employees of the Respondent-Bank. They violated all norms of discipline by making allegations against the functioning of the Bank. In this situation, their suspension was considered necessary. The petitioners were asked by respondent No. 1 to file 'an affidavit in proof of the allegations' against respondent No 4 but 'they did not submit any affidavit which apparently means that they have got no proof with regard to the allegations against' her and are 'adopting this method only for ulterior motives.' It has been further averred that the post of Managing Director is a whole time post in the Bank. She has been posted as Managing Director 'in accordance with the Punjab State Co-operative Financing Institutions Service (Common Cadre) Rules, 1970-71 and fulfils the requirement of being an Additional Registrar, Co-operative Societies, Punjab'. Therefore, the prayer for issue of a writ of quo warranto is liable to be dismissed on this ground alone. On these premises, it has been prayed that the writ petition be dismissed with costs.
4. Separate written statements have also been filed on behalf of Respondent No. 3 the Bank, Respondent No. 4, the Managing Director, Respondent No. 5 the Sangrur Central Co-operative Bank, Respondent No. 6 the Hoshiarpur Central Cooperative Bank and the newly added Respondent No. 8 on behalf of the Federation through its Finance Secretary, Mr. Inderjit Singh. Broadly, speaking all the allegations made in the petition have been controverted. Details regarding the good work done by Respondent No. 4 and the achievements of the bank have been given. It has been pointed out that the allegations made by the petitioners are false and baseless. Detailed reference to the various illegations shall be made at the appropriate time.
5. Learned counsel for the parties have been heard.
On behalf of the petitioners, Mr. Rajiv Atma Ram has vehemently contended that the orders of suspension were wholly illegal. Respondent No. 4 was not qualified to continue as the managing Director in view of the fact that the Board of Directors had been superseded. The Directors having gone, the Managing Director must follow. It was further contended that in view of the allegations made in the petition, a direction for the holding of a CBI enquiry against respondent No. 4 deserved to be issued.
6. On behalf of the Respondent-State of Punjab, Mr. G.S. Grewal, the learned Advocate General submitted that keeping in view the fact that the reply submitted by the petitioners had been received in the office of the Registrar, the matter shall be examined afresh and that the orders of suspension, copies of which have been produced as Annexures P-12 and P-13, may be taken to have been withdrawn. He submitted that the Registrar shall re-consider the matter and pass such orders as may be considered necessary. He further pointed out that no ground for holding any enquiry was made out. The allegations made by the petitioners had been looked into by the Government and no substance was found therein. Equally, the appointment of respondent No. 4 as Managing Director was in conformity with law. Learned counsel for respondent No. 3 and 4 also reiterated the factual position and pointed out that the petitioners are mere busy bodies who have no locus standi to challenge her continuance as Managing Director or to seek an enquiry into the performance of her duties. It was also contended that the prayer for the issue of a writ of quo-warranto should be declined on the ground of delay alone.
7. In view of the statement of the learned Advocate General, Punjab, that the matter would be re-examined by the Registrar and the orders of suspension may be taken to have been withdrawn, the grievance of the petitioners with regard to the orders at Annexure P-12 and P-13 is rendered infructuous.
8. The two questions that remain to be considered are :-
(i) Do the circumstances of the case warrant that a direction for an enquiry by the C.B.I. or some other agency of the Government be issued;
(ii) Whether a writ of quo warranto deserves to be issued against respondent No. 4?
Reg. (i)
The petitioners allege that Respondent No. 4 :-
(i) distributed gifts worth Rs. 23 lacs, from the funds of the Bank during her tenure as Managing Director. The names of the persons to whom these gifts were given are shrouded in mystery.
(ii) She and her relations are owners of a building in Sector 35. The rent of this building was Rs. 10,800/-. It 'was increased by Rs. 7,700/- from buck date'. The building of Sector 26 was vacant and a new building in Sector 8 was taken at an exorbitant rent of Rs. 24,500/- per month. In spite of the directions of the High Court, no action had been initiated 'against respondent No. 4 and the reasons are obvious'.
(iii) Bank property like Air Conditioners, Coolers, Fans, Carpets, Wooden/Godrej Furniture etc. worth lacs of rupees is missing from the Bank.
(iv) The Bank purchased about 20 cars. Only seven or eight are sufficient for use of the officers. Respondent No. 4 has kept her position infact by offering the cars to 'resourceful quarters'. Respondent No. 4 herself is using a Contessa Air-Conditioned car.
(v) The Bank had purchased a piece of plot in Sector 34. It had made a provision of Rupees seven crores for construction which has now been increased without any justification. Respondent No. 4 had given an advance of Rs. 42 lacs to the Contractor illegally. In addition, the Bank had advanced Rs. 38,39,647/- as secured advance to the contractor which is 75% of the material brought at site. However, the contractor had submitted bills for Rs. 51,71,036.48 only during the year 1995-96 and in this way Rs. 27,81,392/- stood recoverable from the contractor. No action has been taken in spite of the fact having been pointed out by the Senior Auditor.
(vi) The Managing Director had spent lacs of rupees on foreign tours.
(vii) Huge amounts have been spent on hospitality etc.
9. A memorandum was sent to the Minister for ordering a CBI enquiry against the fourth respondent in the first week of March, 1997. As a result, she had become inimical against the petitioners. Instead of instituting any enquiry against the respondent, the Registrar had issued a show cause notice to the petitioners.
10. In the written statement filed on behalf of the third respondent, it has been slated that the petitioners have made 'irresponsible allegations........without any rhyme or reason'. In fact, the Bank has achieved tremendous progress during the tenure of respondent No. 4. Figures have been quoted to show that in the year 1992-93, the 'Turnover advances' of the Bank were Rs. 167.61 crores. The 'working Capita!' was Rs. 766.93 Crores. The Bank had made gross recoveries of 98.73%. As against this, the turn-over advances have risen to Rs. 2552.18 crores. The working capital has risen to Rs. 1269.99 crores. The recovery is to the extent of 99.45%. The profits of the Bank have risen from Rs. 14.54 crores to Rs. 23.00 crores. In addition, it has been pointed out that 'during this period only, the Bank was awarded the Best Performance Award, by National Federation of State Co-operative Banks (NAFSCOB).' It has been further pointed out that 'the petitioners cannot act on behalf of the Federation, as they are no longer President and General Secretary respectively of the Federation. Secondly, even the Federation has no legal entity as such. It is only the Unions of the State/Central Co-operative Banks, which are registered either under the Trade Unions Act or under the Societies Registration Act........the petitioners cannot take the shelter under the banner of the Federation and resort to mud-slinging on the clean image of the respondents..... They have committed an act of serious indiscipline and misconduct. Still further, with regard to the allegations made by the petitioners, it has been stated as under :-
'(i) Every year, the Bank distributes gifts to its employees, its valued customers and good depositors to the tune of Rs. 3 to Rs. 5 lacs. This amount is approved by the Registrar and the Board of Directors authorise this expenditure by passing a resolution. The Bank is a commercial organisation and for the purpose of belter prospects of its business, the Board of Directors authorise the expenditure. The fact that the gifts are given to the employee 'is well known to everyone including the petitioners. However, the petitioners have concealed this material fact.......and have preferred to level allegations that the manner in which the gifts are distributed is shrouded in mystery. There are at present 700 employees of the Bank who are given the gifts on the eve of new Year in January every year'. Copies of the approval given by the Registrar and the resolutions passed by the Board of Directors have been attached as annexures with the written statement.
(ii) With regard to the building in Sector 35, the respondents points out that 'it was rented by the Bank - Much prior to the posting of Respondent No. 4 as Managing Director...The respondent Bank rented this building in the year 1981 @ Rs. 7500/-per month...this is a 3-storeyed building in the main market of Sector 35. There was no increase in the rent of this building for a number of years. The increase in (he rent was ordered only on September 1, 1988. The rate of rant was increased to Rs. 11,800/- per month. Thereafter, the increase was made w.e.f. 1.4.1994 vide resolution of the Executive Committee dated 6.4.1994. The rent of the building was increased after a gap of five years 7 months nominally. The increase was prospective and not retrospective. The decision to increase the rate of rent was taken after the Survey Report submitted by a Committee (which) consisted of Chief Project Officer and Deputy General Manager (Development)......The rent fixed is Rs. 18,500/-. The Market Rent of the building is not less than Rs. 50,000/- per month'. It has been further pointed out that some mischievous persons had made a complaint to the then Minister for Co-operation about the increase in rent of the Building. On the receipt of the complaint, a detailed note was submitted by the Bank to the Financial Commissioner, Co-operation. The Financial Commissioner had put up the following note on October 26, 1995 :-
'May please see. The rent of the building, I suppose, is quite reasonable for the Bank. Rates in the market are quite high as compared to the rent being paid in the case of the present building. The owner rather wants to get it vacated from the Bank as indicated above
Sd/-F.C.C. 26.10.1995' .With regard to the vacation of the building in Sector 26, it has been pointed out that the landlord had initiated ejectment proceedings against the Bank in the year 1989. The learned Rent Controller had passed the ejectment order- proceeding ex parte against the Bank on February 1,1991. Application for setting aside the ex parte proceedings was moved an April 11,1991. It was dismissed on September 30, 1993. In December 1992, the Bank took the matter very seriously. It engaged a Senior Advocate to file the revision petition. This was dismissed on November 18, 1991. The judgment is reported in 1994(1) P.L.R. 627. The allegation that a direction for holding an enquiry had been given has been described as false. It was after the orders of the High Court that the building was vacated.
(iii) The allegations that articles are missing, has been denied. It has been pointed out that 'no article is missing......Under Section 48 of the Co-operative Societies Act, 1961, there is a statutory audit by the Department of Co-operative Audit. The Chief Auditor, Co-operative Societies, Punjab, is independent and functions directly under the control of the Financial Commissioner (Co-operation) Punjab. The purchase of each article is reflected in the stock Register and audit is conducted every year. The Auditor also obtains physical verification report from the concerned officer of the concerned Branch and at no point of time, any report about the missing of any article, has been received..the allegation has been concocted to paint an unwarranted and unjustified picture to mislead this Hon'ble Court.
(iv) With regard to the Cars, it has been pointed out that 'there are Four Air-Conditioned Cars (Contessa and 3 Ambassador), 10 Ambassador Cars (Non-air-Conditioned), two jeeps and 2 cash vans. The entitlement to use an air-conditioned car by the Managing Director has been sanctioned by the Registrar, Co-operative Societies, Punjab. The Contessa Car which is being used by respondent No. 4 was purchased much before her joining the Bank as Managing Director. The allegation that the cars are being used by any other person has been denied. The orders sanctioning the purchase of vehicles have been produced with the written statement.
(iv) With regard to the construction on the piece of plot in Sector 34, it has been pointed out that the Bank had purchase the plot on July 19, 1991. No steps were taken to construct a building. The Board of Directors decided to construct, the building because the delay was resulting in increase in the cost of construction every year. The Board constituted a building Committee comprising of 'members of the Board, Chief Engineer, nominee of Registrar...Executive Engineer, Deputy General Manager (Development). The Building Committee was even provided the assistance of a retired Chief Engineer as Technical Advisor'. The Committee invited tenders and after due negotiations with the contractors, the work was allotted to M/s. Amar Chand Sharma and Associates. A contract was signed with the approval of the Building Committee. It provided for giving 'mobilisation funds to the contractor with interest @ 8%.' In conformity with the provisions of the contract, advance was given to the contractor. Furthermore, the secured advances were also 'given to the contractor in accordance with the provisions of the contract and the advances were adjusted out of the running bills submitted by the contractor from time to time. No excess payment has ever been made to the contractor'.
(vi) With regard to the expenditure on foreign visits, it has been pointed out that 'according to the Punjab State Co-operative Bank Limited, Chandigarh Employees (Foreign Travel) Rules, 1966, Chairman and Managing Director of the Respondent-Bank are entitled to spend $ 300 per day while abroad, where no amount is spent by the sponsoring agency and the whole expenditure is to be met out of the daily allowance to be drawn as per T.A. Rules. While attending the study tour, respondent No. 4 claimed the daily allowance at the rate of $ 300 per day, as pew her entitlement as the sponsoring agency did not incur any expenditure'.
(vii) With regard to the expenses alleged to have been incurred on dry fruits, brief case and meeting of the National Federation of the State Co-operative Banks as also the opening of a Branch at Chandigarh, the suggestions of extra expenditure etc. have been denied. It has been mentioned that an amount of Rs. 49,130/- was spent on distribution of sweets, dry fruits etc. on the eve of Deepawali to the valuable customers. This was in conformity with the past practice. Furthermore, it has been pointed out that a meeting of the national Federation of State Co-operative Banks was held in Chandigarh. On July 20,1996, the Chairman and Managing Director of all the State Co-operative Banks in the country had participated. The Deputy Chief Minister of the State of Madhya Pradesh who happened to be the Chairman of the State Co-operative Bank had also participated. Senior persons from the Government of India, Reserve Bank of India and NABARD also participated in this meeting. Necessary arrangements for hospitality, boarding and lodging of the participants were made by every State. On this occasion, Rs. 35,011/- were spent on Brief Cases etc. which were given as momentos to the dignitaries. Details with regard to the expenditure incurred on various other matters have also been given. The petitioners' allegation that Rs. 50,000/- were spent at the time of the opening of a Branch in Sector 10, Chandigarh, has been denied. It has been pointed out that only Rs. 8200/- were spent.
11. On these premises, the third respondent maintains that the allegations are false and that no enquiry needs to be ordered. Still further, it has been pointed out in paragraph 24-A that 'the allegations are baseless'. The detailed observations of respondent Nos.1 and 2 have been reproduced. In the note of respondent No. 2, it has been mentioned that he has 'closely monitored the working of the Punjab State Co-operative Bank from almost a year and a half now and as such, it can be said with certitude that the P.S.C.B. has made outstanding progress on all fronts under the stewardship of Mrs. Harbans Kaur Bahia, presently M.D.......This fact has been acknowledged by NABARD and other National Institution which scrutinise the working of the Co-operative Banks periodically as per the parameters, which are quite stern'. It has also been pointed out that 'decisions on all the points raised in the complaint have been taken at the competent level thereby absolving the M.D. of any personal interest/vested interest'. The Registrar goes on to point out that 'while polarisation of the staff unions has promoted a spate of complaints, some disgruntled and discredited elements in the Co-operative Bank as well as the Field Officers are trying to vitiate the minds of the new Political Executives including F.C.C. who is also relatively new to the Co-operative Department'. The Registrar had, thus, proposed that 'the present complaint deserves no further attention and may accordingly be filled please'. The Financial Commissioner had forwarded the file with the observation that M.O.C. (Minister of Cooperation) may also kindly see. On May 25, 1997, the Minister had signed the note. This signified his approval. It appears that the file had been separately put up to the Chief Minister also. On this basis, it has been pointed out that the Financial Commissioner, the Minister and the Chief Minister had decided to file the complaint. On these premises, it was maintained that no ground for ordering any enquiry is made out.
12. The petitioners filed Civil Misc. application No. 20419 of 1997 for permission to place on record the replication to the written statements of respondent Nos. 3 and 4. This application was taken up for hearing alongwith the main writ petition. On behalf of the respondents, it was pointed out that if the replication has to be taken on record, they would need time to file a rejoinder. On this, learned counsel for the petitioners had stated that he would not rely on any of the averments made in the replication and that it may be ignored. Resultantly, learned counsel for the petitioners had not referred to any of the averments in the replication. It was, thus, not made a part of the record. The application was rejected.
13. Irrespective of that, it may be noticed that the averment in para 24-A of the written statement that the Registrar and the State Government had found the complaint to be false or that it warranted no enquiry has been vaguely controverted by the petitioners. The fact that the Bank had made profits has not been shown to be false.
14. Even respondent No. 4 has filed a separate written statement giving the details regarding the factual position and controverting the claim made by the petitioners.
15. After hearing counsel for the parties and examining the record of the case, we are not persuaded to hold that a case for ordering an enquiry either by the CBI or any other agency is made out. It is true that the petitioners have accused respondent No. 4 of having 'misappropriated the funds of the Bank to the tune of crores of rupees'. However, they have not been able to show that she had incurred any expenditure on her own and without the approval of either the Board of Directors or the Registrar of Co-operative Societies. Still, further, as noticed above, various expenses as mentioned by the petitioners have been duly explained by the respondent-Bank. The Government had itself looked into the complaint made by the petitioners upto the level of the Chief Minister and found that no ground for ordering an enquiry was made out. Still further, even at the time of the hearing of the case, counsel for the petitioners was asked to pin-point any particular expense which may have been incurred by respondent No. 4 unauthorisedly or any evidence which may indicate that she had misappropriated the funds. In fact, in the written statement filed by respondent No. 3, the note on the file has been reproduced. A perusal of the note dated May 6, 1997 shows that the Financial Commissioner had observed as under :-
'Leaders of the Federation also met me and I asked them if they have any solid proof against any officer, they may submit the same to me. If they failed to do so or their proofs are found baseless, then it becomes our duty to sternly deal with such undesirable elements so that they are not able to blackmail the senior officers'.
After his note, the file appears to have been seen by the Minister on May 23, 1977 and by the Chief Minister on May 30, 1997. In the replication filed by the petitioners, they have undoubtedly stated that 'it is wrong and denied that the Financial Commissioner Co-operation asked the petitioners for any proof against any officer'. However, they have produced none even at the time of the hearing of the case. Still further, to test the truth or otherwise of their statements in the petition, it may be noticed that in para 8(h), it has been alleged as under :-
'While opening the Branch of the Bank in Sector 10, Chandigarh, in the month of.........a sum of Rs. 50,000/- was shown as expenditure on account of hospitality charges whereas there were hardly 50 persons present at the time of opening of Branch who were served with simple tea and biscuits but the expenditure was shown of Shivalik View, Hotel, Chandigarh.'
In the written statement filed on behalf of respondent No. 3, it was stated as under :-
'That the contents of Sub-para (h) of para 8 of the writ petition as stated are absolutely wrong and vehemently denied. Further, it has been alleged in the writ petition that an expenditure of Rs. 50,000/- was incurred on the hospitality at the time of opening of a branch of the Bank in Sector 10, Chandigarh. This is a false allegation. Only a sum of Rs. 8,200/- was incurred. Success of a bank branch depends upon the propaganda and publicity at the time of its opening. With this purpose in view, all the shopkeepers and the residents in the nearby area, were invited. The Branch in functioning quite successfully.'
In the replication, it has been stated as under :-
'Sub-para (h) is wrong and denied and that of the corresponding paragraph of the writ petition is reiterated.'
16. A perusal of the above shows that when an expenditure of only Rs. 8,200/- was incurred, the petitioners raised it to Rs. 50,000/-. They allege that hardly 50 persons were present at the time of the opening of the Branch at Chandigarh. They were even unable to give the date on which the function had taken place. When the allegations are specifically denied, they are unable to furnish any proof. The petitioners tried to project that respondent No. 4 had distributed 'gifts worthy Rs. 23 lacs, from the funds of the respondent No. 3 Bank during her tenure as Managing Director but to whom these gifts were given is shrouded in mystery'. On behalf of the respondent-Bank, it was pointed out that the gifts are given to the employees, the customers and good depositors. The cost ranges from Rs. 3 to 5 lacs, per year. The expenditure is approved by the Registrar and the Board of Directors by passing a resolution. In the replication, the petitioners do not deny the fact that the gifts had been given to the employees. They further state that 'no doubt the sanction of the Registrar was obtained for distribution of the gifts but the question is - to whom these gifts were distributed. The gifts were not distributed to the customers as alleged and let respondent No. 4 produce the records for the same'. The petitioners, it appears, have black soot in both the hands. They are just throwing it around in the hope that some of it would stick.
17. Even if it is assumed that the petitioners were the office bearers of the Federation of the employees, it did not give them a licence to indulge in mud-slinging or to make irresponsible and reckless allegations. While it may be legitimate for a Union to plead the cause of its members, it is not at all entitled to make irresponsible allegations against senior officers or to tarnish the image of the Institution. Equally, the members of the Union, or a Federation are not entitled to indulge in indiscipline and issue memorandum of the kind the petitioners have been. The respondent- Bank having made profit, it appears that the allegations of misappropriation or | mismanagement as made by the petitioners are only calculated to browbeat and blackmail the senior officers. Such persons are not entitled to invoke the power of this Court under Article 226 of the Constitution. While the Court would jealously try to ensure purely in every institution in the State, it shall be hesitant to intervene at the asking of persons whose own bonafides are suspect. The petitioners are trying to accuse the Managing Director. They have even stated that the Financial Commissioner had never asked them for any proof. They have contradicted everyone, It does not appear to be safe to depend upon their averments.
18. Mr. Rajiv Atma Ram submitted that respondent No. 4 had charged daily allowance at an excessively high rate of Rs. 300/- per day during her visit abroad. He appears to be right. However, it is the admitted position that this rate was as per the rules framed by the Bank. The Registrar and the Government may look into the advisability of modifying the rules and reducing the allowance. However, the respondent having charged the money in conformity with the rules, it cannot be said that she is guilty of misconduct. In view of the above, we find no ground to order any enquiry against respondent No. 4.
19. The question is, thus, answered against the petitioners. Their prayer is declined.
Reg: (ii)
20. Mr. Rajiv Atma Ram submitted that the Government had nominated three Directors on the Board of the Bank viz. the Registrar, the Chief Auditor and the Finance Secretary or his nominee. In addition to them, the Government had nominated respondent No. 4 as a Director Under Section 26 of the Act. On May 5, 1997, the Board of Directors was removed and an Administrator was appointed. As a consequence, even respondent No. 4 shall stand removed alongwith the other Government nominees on the Board. As such, she cannot continue as a Managing Director of the Bank. Still, respondent No. 4 'being a resourceful lady and because of the bounties showered by her upon high-ups is still continuing as the Managing Director of the Bank.'
21. In the written statement filed on behalf of the State Government and the Registrar, it was pointed out that she had been appointed in accordance with the Common Cadre Rules of 1970. The rules provide that when there is no Administrative Committee or Board of Directors, a Committee of officers consisting of Managing Director, Additional Registrar, Cooperative Societies (Credit) and General Manager of the Apex Bank shall perform the duties of the Administrative Committee. Thus, the continuance of respondent No. 4 is in accordance with the Rules. Similarly, in the written statement filed on behalf of respondent No. 3, it has been averred that the rules have been framed Under Section 84(A) of the Punjab Cooperative Societies Act, 1961. In these rules, there is a provision for appointment to the post of Managing Director. In Rule 2.3(b), it has been provided that the appointment to various posts under different categories of service may be made from sources given in Annexure II. A perusal of Annexure II would show that the Managing Director has to be appointed by transfer of a person 'who is not below the rank of Additional Registrar, Cooperative Societies, Punjab.' It has been further mentioned that the fourth respondent was appointed as the Managing Director on December 23, 1992. At that time, the Government had not invested Rs. 20 lacs or more in the Respondent-Bank. Therefore, the provisions of Section 26 of the Act were not even remotely attracted. Still further, it has been pointed out that the Board of Directors is separate from the Managing Director. The existence of the Administrative Committee is co-terminus with that of the Board of Directors. However, in the absence of the Board or the Administrative Committee, the functions arc to be performed by a committee as constituted under the Common Cadre Rules.
The solitary argument of Mr. Rajiv Atma Ram was that the Board having been removed, a Managing Director who is merely a member cannot continue in office. He also referred to the provisions of Bye-law 29 to contend that the Managing Director is a member of the Board of Directors. Learned counsel is right to this extent. The Managing Director is a member of the Board. However, it is incorrect to imagine that the existence of a Managing Director is co-terminus with that of the Board. To decide the question in the present case, it is apt to notice the provisions as contained in Common Cadre Rules. These read as under :-
'1.4. These Rules shall be administered by a Committee constituted by the Board (referred to as Administrative Committee). The provisions of the laws 41, 42, 43 and 44 of the Punjab State Coop. Bank Ltd. Chandigarh shall mutatis mutandis apply in the matter of constitution, quorum, meeting, powers of the Administrative Committee and dissent by the Register of his nominee.
XX XXX XXProvided further that in case there is no Administrative Committee, on account of any reasons whatsoever Managing Director, General Manager of Apex Court and the Additional Registrar, Cooperative Societies (Credit) shall jointly exercise all powers vested in and discharge all duties cast on the Administrative Committee as mentioned in the Punjab State Cooperative Financing Institutions Service (Common Cadre) Rules, 1970-71.
2.3.(b) Appointment to the various posts under different categories of the , service may be made from the sources stated in Annexure II in the percentages prescribed therein.'
ANNEXURE II
Sources from which the appointments may be made for various posts.
1. M.D. Apex Bank (Category I)
(a) By transfer on deputation from Co-op. Deptt. not below the rank of Additional Registrar, Coop. Societies, Punjab.'
A perusal of the proviso to the rule as quoted above shows that whenever there is no Administrative Committee, its functions are discharged by a committee of which the Managing Director is a member. It, clearly indicates that the Managing Director continues to function even when the Board or the Administrative Committee ceases to exist. Still further, the appointment of the Managing Director is by 'transfer on deputation of a person not below the rank of Additional Registrar.' The post is, thus, a part of the Common Cadre. Its appointment is duly regulated by the rules. It is not dependent on the existence of the Board. If the contention raised by the counsel for the petitioners is accepted, the result would be very anomalous. The Chief Executive of the Bank shall not be there. How will the affairs be managed Who will discharge the duties of the Committee of which the Managing Director is a member The learned counsel was unable to give any indication.
22. Even otherwise, it was admitted that respondent No. 4 was duly appointed as a Managing Director by the competent authority. The order of appointment has not been produced. It has not been shown that the appointment is contrary to any rule or law. It has not been shown that her continuance in the office is in violation of any statutory provisions. The faint suggestion that it is contrary to Bye-law 29 for the Bank, cannot be sustained as nothing has been produced to show that the tenure of the Managing Director is co-terminus with that of the Board. The appointment being in conformity with the provisions of the Common Cadre Rules, it cannot be said that the respondent is a usurper who may deserve to be ousted from the office.
23. In view of the above, no ground for the issue of a writ of quo-warranto to oust respondent No. 4 from her office is made out.
24. Even the second question is answered against the petitioners.
25. So far as the challenge to the orders of suspension is concerned, the petitioner has been rendered infructuous. On the other two matters, the petitioners are not entitled to any relief. The writ petition is, consequently, dismissed. Keeping in view the fact that the petitioners are low-paid employees, there shall be no order as to costs.
26. It may be mentioned that with regard to the air-conditioned cars, we had issued certain directions at the time of preliminary hearing on July 17, 1997. We are passing a separate order in that behalf.