Secretary, Karnataka Industrial Co-operative Bank Ltd. Vs. State of Karnataka - Court Judgment

Shivaraj Patil, J.

1. This Writ Appeal is by respondents 2 and 3 in W.P.No. 5649/90.

2. The respondent No. 3 herein was working as the Manager of Davanagere Branch of the first appellant - Bank, which is a Cooperative Society registered under the Karnataka Co-operative Societies Act, 1959 (for short 'the Act'). The Management of the first appellant - Bank was superseded by the Notification issued under Section 30 of the Act. The appellant No. 2 was appointed as a Special Officer.

3. The Regional Manager, Mysore Region, Mysore, by his Report dated 17-3-1987 stated that five employees of Davanagere Branch including respondent No. 3 acted detrimental to the interest of the Bank. On the basis of this Report enquiry was held against respondent No. 3 and others. When there was delay in completing the enquiry, the payment of subsistence allowance was reduced to him with effect from 1-6-1989. Aggrieved by the same, respondent No. 3 filed W.P.No. 17112/89 against the appellants, which is pending adjudication. In the meantime, respondent No. 3 requested the appellant No. 1 to permit him to retire from service on his attaining the age of superannuation, through his letter dated 26-9-1989. Again on 20-11-1989 he requested the first appellant to settle his claims at the earliest. The appellant No. 1 having acknowledged the receipt of the letter dated 20-11-1989 informed respondent No. 3 that he would be retiring from service on 29-12-1989, but the retirement benefits would not be given to him pending disposal of the enquiry. On 29-12-1989 appellant No. 2 issued the order to the effect that respondent No. 3 is to retire from the service of the Bank with effect from 29-12-1989 on his attaining the age of superannuation as per Annexure-D to the Writ Petition. Respondent No. 3 having not received any retirement benefits, wrote letter to the first appellant seeking immediate settlement of the claim, but the said letter did not receive any response. Thereafter he got issued a legal notice dated 23-1-1990 calling upon appellant No. 2 to settle his claims. Even that was of no avail. Respondent No. 3 contends that he is entitled for pension, provident fund, gratuity and other terminal benefits on his retirement from service. Since appellants did not settle his terminal benefits in spite of his request, he filed W.P. No. 5649/90 seeking a Writ of Mandamus to the appellants to treat the period of his suspension from 21-3-1987 to 29-12-1989 as on duty and to regulate his terminal and other benefits on that basis only and not on the basis of the communication dated 28-11-1989 (Annexure-C to the Writ Petition); to direct the appellants and respondent No. 1 not to conduct further enquiry in view of his retirement and for costs.

3. On behalf of appellant No. 1, Statement of Objections was filed stating that the permission to retire from service, on respondent No. 3 attaining the age of superannuation was accorded, but subject to finalisation of domestic enquiry, civil suit, Criminal Case No. 38/87 and O.S.No. 58/87. In view of the fact that respondent No. 3 was facing serious charges of misconduct and misappropriation, having caused heavy loss to the Bank, giving of retirement benefits to him did not arise, as it would be impossible to recover the amount from him in case the enquiry proceedings go against him. Respondent No. 3 was not entitled for any pension, provident fund, gratuity and other terminal benefits as claimed by him. Simply because respondent No. 3 was permitted to retire on his attaining the age of superannuation holding of the enquiry could not be said to be unjust, illegal or improper and he has got alternative remedy as provided 'Under Section 70 of the Act. As such the appellant No. 1 pleaded for the dismissal of the Writ Petition.

4. The particular contention raised on behalf of respondent No, 3 before the learned single Judge was that the respondent No, 3 having retired from service on his attaining the age of superannuation, the appellants had no jurisdiction to continue the disciplinary proceedings against him and consequently they should settle the claim of respondent No. 3 giving all the terminal benefits. It was contended that continuation of the disciplinary proceedings against respondent No. 3 was illegal and without jurisdiction. As such, his claims should have been settled as if no disciplinary proceedings were pending,

5. On behalf of the appellants it was urged that respondent No. 3 was permitted to retire subject to the condition that retirement benefits would not be given to him pending disposal of the domestic enquiry and civil and criminal cases pending against him. There was an alternative remedy available to respondent No. 3 under Section 70 of the Act and the appellant No. 1 being a Co-operative Society registered under the Act, the action taken by the appellants could not be characterised as action of the State Government. Further, the Cooperative Society is not a 'State or other Authority' so as to be amenable to the Writ jurisdiction of this Court.

6. The learned single Judge having considered the contentions raised on behalf of the parties held that by reason of Section 30A of the Act, the Special Officer was authorised to exercise and perform all the powers and functions of the Committee of the Society and Sub-section (3) of Section 30A provided that the Special Officer could exercise ail such powers and functions subject to the control of the State Government and the Registrar of Cooperative Societies. Hence, he held that the action complained of, apparently was the action of the Special Officer appointed under Section 30A of the Act and that it was a 'State' action. He also held that after the retirement of respondent No. 3 from the services of appellant No. 1 - Bank, the disciplinary control which it exercised over him ceased and that the continuance of disciplinary proceedings against respondent No. 3 was illegal and without jurisdiction. As to the alternative remedy pointed out by the appellants under Section 70 of the Act to respondent No. 3, the learned Judge took the view that where the action complained of was wholly illegal and without jurisdiction and the action did not involve any disputed questions of fact, it was open to this Court to exercise jurisdiction under Articles 226 and 227 of the Constitution of India. On the basis of these conclusions arrived at, the learned single Judge allowed the Writ Petition, quashed the disciplinary proceedings initiated against respondent No. 3 and directed the appellants to forthwith settle his claims as regards the retirement benefits payable to him. Initially appellant No. 1 filed the present Writ Appeal and subsequently respondent No. 2 in the Writ Appeal was permitted to be transposed as appellant No. 2, on the application of appellant No. 1,

7. Before us, Sri H.K. Vasudeva Reddy, learned Counsel for the appellants, vehemently contended that;

(1) Appellant No. 1 cannot be considered as a 'State or the instrumentality or agency of the State' within the meaning of Article 12 of the Constitution of India, as such, no Writ could have been issued against the appellants,

(2) In the absence of any bar to continue the disciplinary proceedings after the retirement of respondent No. 3, in respect of serious charges regarding which disciplinary proceedings were initiated could be continued; and

(3) Since respondent No. 3 had alternative and efficacious remedy under Section 70 of the Act, the learned Judge ought not to have entertained the Writ Petition.

8. On the other hand, Smt. Shailaja Shetty, learned Counsel for respondent No. 3, advanced the arguments supporting the Order under Appeal. She submitted that the Order under Appeal is just and perfectly valid. A Writ could be issued against appellant No. 1 which according to her comes within the meaning of Article 12 of the Constitution of India. She submitted that as rightly held by the learned single Judge when the action of the appellants was wholly illegal and without jurisdiction, on the undisputed facts of the case, there was no necessity to drive respondent No. 3 at that stage to avail the alternative remedy under Section 70 of the Act. She reiterated on the basis of long line of Decisions that disciplinary proceedings against respondent No. 3 could not be continued after he retired from the service of appellant No. 1 on 29-12-1989.

9. On an examination of the facts of the case and the contentions raised, according to us, the following Points arise for Consideration:

(1) Whether appellant No. 1 - Bank is a 'State or instrumentality or agency of the State' within the meaning of Article 12 of the Constitution?

(2) Whether disciplinary proceedings could be continued against respondent No. 3 after his retirement from service with effect from 29-12-1989.

(3) Whether in view of the alternative remedy available under Section 70 of the Act to respondent No. 3, the Writ Petition should have been entertained. 10. We will consider these Points in seriatum.

Re: Point No. 1:

In RAMANA DAYARAM SHETTY v. THE INTERNATIONAL AIRPORT AUTHORITY OF INDIA AND ORS., : (1979)IILLJ217SC six tests were adumbrated for determination whether a particular Society or a Company is a 'State or instrumentality or agency of the State' so as to characterise it as an 'Authority' within the meaning of the Article 12 of the Constitution. Those tests are:

(1) One thing is clear that if the entire share capital of the Corporation is held by Government, it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government.

(2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indication of the Corporation being impregnated with Governmental character.

(3) it may also be a relevant factor whether the Corporation enjoys monopoly status which is State conferred or State produced.

(4) Existence of deep and pervasive State Control may afford an indication that the Corporation is a State agency or instrumentality.

(5) If the functions of the Corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the Corporation as an instrumentality or agency of Government.

(6) Specifically, if a Department of Government is transferred to a Corporation, it would be a strong factor supportive of this inference of the Corporation being an instrumentality or agency of Government'.

2. A Constitution Bench of the Supreme Court in AJAY HASIA ETC. v. KHALID MUJIB SEHRAVARDI AND ORS., : (1981)ILLJ103SC while considering whether a Society registered under the Jammu and Kashmir Registration of Societies Act, 1898 could be a 'State' within the meaning of Article 12 of the Constitution, the six tests aforesaid were culled out from the Judgment in Ramana Dayaram Shetty's case. Even in subsequent Judgments of the Supreme Court, these tests were affirmed and applied in the matter of deciding the question whether a particular Society or a Company was a State within the meaning of Article 12 of the Constitution. Thus, it is clear that these tests are fairly well settled. Now we have to analyse the facts of the case and examine whether appellant No. 1 - Bank is a 'State or instrumentality or agency of the State' within the meaning of Article 12 of the Constitution applying the said tests. Before proceeding further, it is to be stated here, the learned Counsel for the parties are in agreement in stating that tests 1, 2, 3 and 6 do not apply to the facts of the case on hand. Hence, it is to be considered whether appellant No. 1 - Bank satisfies tests 4 and 5.

3. In this regard it is useful to extract relevant Bye-laws of the appellant No. 1 - Bank, which read thus:

'4(a) objects: The objects of the Bank are:

(i) To finance its members on such terms and conditions as may be specified by the Board from time to time.

(ii) To promote thrift, self-help and mutual help amongst artisans, industrialists, workers and general public and to promote economic interests and general welfare of itsmembers and general public according to co-operative principles.

(iii) To channelise or grant finances for the development of industries.

(iv) With the previous sanction of the Government and the trustee and subject to such terms and conditions as the State Government may impose, issue debentures of such denominations for such period and at such rate of interest as it may deem expedient on the security of mortgage or mortgages to be acquired or partly on mortgages held and partly to be acquired, and properties and other assets of the Bank.

(v) To receive deposits, (vi) To raise loans.

(vii) To open Branch Offices of the Bank at such suitable places as may be decided by the Board of Directors of the Bank with the approval of the Reserve Bank of India.

(viii) To enter into participation with any of the Scheduled Banks or financing agencies for furtherance of its objects.

(ix) To carry on all types of General Business of Banking as defined in Sections 5(b) and 6 of Banking Regulation (As applicable to Co-operative Societies Act, 1949.)

(x) To collect and remit to Government the loan or loans taken by its members from State Government directly under special schemes sanctioned by Government of India under the auspices of the All India Khadi and Village Industries Board, Small Scale Industries Board, All-India Handicrafts Board, Coir Board, All India Handloom Board, Central Silk Board, State Co-operative Apex Bank, etc. or otherwise under such terms and conditions as may be agreed upon by the Bank and the Government.

(xi) To undertake drawing and channelising the loans and grants sanctioned by the Government or through All-India Boards under such terms as may be agreed to by the Government and the Bank and to obtain loans from the allotments made under the State Aid to Industries Act and other Development Schemes of the Government provided in the Budget, like S.S.I., Handloom, Handicrafts, etc. etc., with a view to relearning to institutions and persons eligible for assistance in terms of the said Act and Schemes.

(b) Without prejudice to the generality of the foregoing provisions, the Bank shall also be competent:

(i) To assist and encourage the development of gainful occupations, spread habits of discipline, self-help and collective efforts among the rural population with, a view to improve their economic conditions.

(ii) To stimulate local enthusiasm and harnessing of ail resources in aid of the rural industrial drive by helping the setting up of cottage industries, village industries and small scale industries by individuals.

(iii) To provide technical advice and assistance to members and non-members with regard to cottage industries and small-scale industries.

(iv) To act as information bureau of raw-materials and finished products relating to cottage industries, village industries and small-scale industries.

(v) To advise the members with regard to production of improved and easily marketable patterns and designs using scientific methods with a view to increase the income from cottage industries, village industries and small-scale industries.

(vi) To arrange for holding of periodical conferences of industrialists and for taking necessary action on the resolutions passed at such meetings and conferences.

(vii) To publish, stock, distribute and sell leaflets, pamphlets and books dealing with the Cottage, Village and Small Scale Industrialists at no profits.

(viii) To render facilities for research work and to encourage the inculcation of scientific methods in the programme of industrialisation.

(ix) To receive contributions for the development and promotion of Cottage Industries, Village and Small Scale Industries from members, non-members and others interested in rural industries,

(x) To guide and supervise the work of members.

(xi) To establish and support or aid in the establishment and support of funds calculated to benefit employees.

(xii) To act as liquidator or administrator of any indebted Bank/Society in case such appointment is offered by the Registrar.

(xiii) To arrange for training to its staff members.

(xiv) To purchase, take on lease or in exchange, hire or otherwise acquire any immovable property which the Bank may think convenient for the prospects of its business or to construct, maintain and alter any buildings or godowns necessary or convenient for its business.

(xv) To provide such facilities, amenities and assistance as may be considered necessary tor the welfare of the employees of the Bank.

(c) Without prejudice to the generality of the foregoing objects, the Bank shall further be competent

(i) To do all or any of the above things and all such other things as are incidental to or may be thought conducive to the attainment of the above objects and the development of Cottage, Village and Small Scale industries and the improvement of the economic condition of members engaged or depending on Cottage, Village and Small Scale Industries.

(ii) To inspect offices, business premises, other buildings belonging to its members through such persons as may be deputed for the purpose from time to time with a view to safeguard the financial interest of the Bank.

(iii) To invest funds of the Bank in the manner provided in Section 58 of the Act.

(iv) To do all such things as may be considered incidental or conducive to the attainment of the above objects.

14. Functions of the General Body:

(a) The following among other matters shall be considered by the General Body:

(i) Approval of the programme of the activities of the Bank prepared by the Committee for the coming year.

(ii) Consideration of the Annual Report, the latest available audit report and the disposal of net profits.

(iii) Amendments to Bye-laws, if any. (iv) Budget for the next year.

(v) If any Directors are not to be elected/selected such election/selection.

(b) xxxxx

15. Board of Directors: (d) The Management of the affairs of the Bank shall vest in a body called the Board of Directors consisting of 24 Directors including the President of the Board.

(b) The Board of directors shall be constituted as follows:

(i) Three (3) nominees of the Government of Karnataka.

(ii) Twenty (20) to be elected by the Regional Committees at the rate of one each for the 18 Revenue Districts other than Bangalore; one for Bangalore Rural District and one for Bangalore City Corporation area.

(iii) Representative from Karnataka State Co-operative Apex Bank

(c) (d) xxxxx

16. President and Vice-President: The duly constituted Board of Directors shall every year at their first meeting elect one of the elected Directors of the Board as the President and another Director as the Vice-President of the Board of Directors.

21. Executive Committee: (A)(i) There shall be an Executive Committee consisting of 9 (Nine) members, including the President, Vice-President one member nominated by the StateGovernment out of their nominees and six other Directors elected by the Board of Directors from among its members.

(ii) to (vi) xxxxx

27. Loans and Advances:

(1) Loans, advances and other types of financial assistance required shall be granted to its members only under the terms, conditions and rates of interest to be specified by the Board of Directors of the Bank from time to time for different types of loans, advances, etc.

(2) The nature and mode of security for the loans and scale of fees for scrutiny of loan applications, etc., shall be specified in the Subsidiary Rules.

(3) (4) xxxxx

4. We think it appropriate to refer to certain provisions of the Act, which will have some bearing on the question to be decided.

Under Section 26, the final authority of a Co-operative Society shall vest in the General Body of Members subject to the provisions of the Act, Rules and the Bye-laws. Management of Co-operative Societies vests in the Committee under Section 28A. Section 29 gives the power to the State Government to nominate not more than three persons or one-third of the total number of Members of the Committee of the Co-operative Society, whichever is less in respect of the Societies stated in the said Section. Under Section 30 the Committee of a Co-operative society can be superseded. Under Section 30A a Special Officer could be appointed to perform all the powers and functions of the Committee of the Co-operative Society subject to the control of the State Government and the Registrar. Under Section 54 where State aid amounting to not less than two lakhs of Rupees is given to any Co-operative Society the State Government may exercise such control over the conduct of the business of such Society as shalt suffice in the opinion of the State Government to safeguard the interests of the State on being satisfied that it is necessary in the public interest so to do.

5. In view of the Bye-laws of the appellant No. 1 - Bank and the provisions of the Act we will now analyse and examine whether there exists 'deep and pervasive State Control' over the affairs of the appellant No. 1-Bank.

The Management of the affairs of the Bank vests in the Board of Directors consisting of totally 24 Directors including the President of the Board. Out of them three shall be Government nominees, 20 shall be elected by the Regional Committees and one shall be the representative from Karnataka State Co-operative Apex Bank. The President and Vice-president are to be elected by the duly constituted Board of Directors out of the elected Directors. The Board of Directors have vast powers as is evident from Bye-law No. 19 and discharge several functions under Bye-law No. 20, Bye-law No. 21 speaks of Executive Committee consisting of 9 members including the President, Vice-President, one Member nominated by the State Government out of their nominees and six other Directors elected by the Board of Directors from among its Members. The said Executive Committee exercises the various functions, such as, transfer of membership and transfer of shares of members from one Region to another Region, refund of lapsed dividend on the shares held by the members, disposal of loan applications, investment of surplus funds of the Bank, taking proper action for recovery of arrears, consideration of cases of settlement of loans relating to Societies and Bank and confirmation of sale of lands, etc. The President or in his absence the Vice-President shall preside over all the meetings of the Board of Directors as is clear from Bye-Law No. 23.

Thus, in the affairs of the appellant No. 1 - Bank there is no 'deep and pervasive State Control'. Mere power of giving general directions for the purpose of carrying out the objects of the Act, power of supersession of Committee, appointment of a Special officer and holding enquiry by the Registrar in given set of circumstances cannot be taken as exercising deep and pervasive control by the State on the affairs of the Bank so as to satisfy fourth test.

6. Now turning to the fifth test whether the functions of the Society are of public importance and closely related to the Government functions, it is too general to be precise. As observed by the Supreme Court in Ramana Dayaram Shetty's case;

'today the expression 'governmental function' is a vague and indefinite description. In a welfare society like ours, it is difficult to draw the demarcating line between governmental and nongovernmental functions. Similarly, it is equally difficult to say with precision which is a function of public importance, and which is not'.

The appellant No. 1 Bank herein cannot be called a public body inasmuch as it has no duty towards the public and its duty is only towards its Members, It does not possess any power to take action or pass orders affecting the rights of the Members of the public. Its actions are confined to its Members and its employees. It is not a statutory body and it is one which has come into existence in accordance with the provisions of the Act nor it can be said that in reality behind the appellant No. 1's Bank there is the executive power of the State. Further, the contract of service between appellant No. 1 and respondent No. 3 could not be treated as belonging to 'public law field', it was a simple contract of service.

7. In the case of CHANDER MOHAN KHANNA v. THE NATIONAL COUNCIL OF EDUCATIONAL RESEARCH AND TRAINING AND ORS. the Supreme Court in para-3 has stated thus:

'Article 12 should not be stretched so as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression 'State'. A wide enlargement of the meaning must be tempered by a wise limitation. It must not be lost sight of that in the modern concept of welfare State, independent institution, corporation and agency are generally subject to State control. The State control does not render such bodies as 'State' under Article 12. The State control, however vast and pervasive, is not determinative. The financial contribution by the State is also not conclusive. The combination of State aid coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is 'State'. If the Government operates behind a corporate veil, carrying out governmental activity and governmental functions of vital public importance, there may be little difficulty in identifying the body as 'State' within the meaning of Article 12 of the Constitution [See: (i) P.K. Ramachandra Iyer v. Union of India, : (1984)ILLJ314SC ; (ii) Central Inland Water Transport Corporation v. Brojonath Ganguli, : (1986)IILLJ171SC ; and (iii) Tekraj Vasandhi alias K.L Balasandhi v. Union of Inida, : (1988)ILLJ341SC ]'.

In TEKRAJ VASANDHI ALIAS K.L. BASANDHI v. UNION OF INDIA, the Supreme Court has observed thus;

'In a Welfare State .... Governmental control is very pervasive and touches all aspects of social existence..... A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion'.The Full Bench Judgment of this Court in the case of RUDRAPPA v. THE STATE OF KARNATAKA AND ORS., in our opinion cannot be applied to the facts of this case as in that Judgment the question was whether the Primary Co-operative Agricultural and Rural Development Bank was an authority within the meaning of Article 12 of the Constitution. It stands on a different footing, having different functions and the funds used by the Bank are entirely Government funds. The following statement of the Supreme Court in the case of Tekraj is extracted in the said Judgment

'It is the time to turn to the facts of the present case to find out as to what the conclusion should be when the tests formulated by the several cases of this Court referred to above are applied. There cannot indeed be a strait jacket formula. It is not necessary that all the tests should be satisfied for reaching the conclusion either for or against holding an institution to be 'State'. In a given case some of the features may emerge so boldly and prominently that a second view may not be possible. There may yet be other cases where the matter would be on the border line and it would be difficult to take one view or the other outright'.3. : (1992)ILLJ331SC

4. : (1988)ILLJ341SC

5. W.P.No. 11134 of 1989 DD 26-7-1991

Thus, it follows that the facts of each case are to be considered to find out as to what the conclusion should be when the tests formulated referred to above are applied inasmuch as there cannot be strait jacket formula,

8. The learned Judge proceeded on the basis that the Special Officer appointed was a Government Servant acting under the control of the Government and the Registrar, so appellant No. 1 - Bank was an authority within the meaning of Article 12 of the Constitution. The Special Officer appointed was to discharge the functions of the Committee. So, the action taken against respondent No. 3 in question was the action of the Committee and not of the Special Officer and the relief was also sought against appellant No. 1 - Bank and not against the Special Officer. Merely because a Special Officer was appointed to discharge the functions of the Committee, it did not alter the character of appellant No. 1 - Bank so as to bring it as an Authority within the meaning of Article 12 of the Constitution.

9. Under the circumstances, we are of the opinion that appellant No. 1 - Bank does not satisfy the fifth test on the facts of the case on hand so as to make it an 'Authority' within the meaning of Article 12 of the Constitution.

10. Although certain other Decisions of other High Courts were cited by the learned Counsel for respondent No. 3 to take a contrary view that appellant No. 1 - Bank is a 'State', we think it unnecessary to refer to all of them in view of the Judgments of the Supreme Court aforesaid and in view of the fact that the Decisions of the other High Courts cited deal with the cases covered by respective State enactments, special provisions contained therein and Bye-laws applicable to those Societies as well as on the facts of those cases.

11. Thus, we have no hesitation to hold that appellant No. 1 - Bank is not a 'State' or the instrumentality or agency of the State within the meaning of Article 12 of the Constitution of India,Re: Point No. 2:

12. It is the crystalised Judicial view that an employer cannot proceed in the exercise of his disciplinary jurisdiction against an ex-employee who has retired from service on attaining the age of superannuation. The disciplinary control which an employer or master exercises over his employee or servant subsists so long as master and servant relationship continues. The learned Judge referred to the Decisions in STATE OF ASSAM v. PADMA RAM, C.L. VARMA v. STATE OF MADHYA PRADESH AND ANR.; ANNAJI BABAJI v. PATSON AGENCIES; STATE OF KARNATAKA v. NAIK, and other Decisions in support of the view that disciplinary proceedings cannot be continued after the retirement of an employee from service on attaining the age of superannuation. The learned Counsel for the appellants was not in a position to dispute this legal position. However, he submitted that considering the seriousness of the charges levelled against respondent No. 3 and in the interest of justice the disciplinary proceedings could be continued against respondent No. 3 even after retirement. It is to be noted that there is no provision enabling appellant No. 1 - Bank to continue the disciplinary proceedings against respondent No. 3 even after retirement. We are of the firm view that in the absence of any such enabling provision the appellant No. 1 - Bank could not continue the disciplinary proceedings against respondent No. 3, In this regard the learned Judge was right in his conclusion on this point. We have no reason to differ.Re.Point No. 3:

13. It cannot be disputed that respondent No. 3 has an alternative remedy under Section 70 of the Act. When the action of the appellants was on the face of it without authority of law and unsustainable there would have been no difficulty in exercising jurisdiction under Article 226 of the Constitution of India had we held that appellant No. 1 - Bank was a 'State or instrumentality or agency of the State' within the meaning of Article 12 of the Constitution, but not having so held it is not possible to give relief to respondent No. 3 by issuing a necessary Writ. In view of the facts and circumstances of the case, respondent No. 3 must raise a dispute under Section 70 of the Act. In case, he raises such a dispute within four weeks from today, the authorities shall adjudicate and pass orders within three months from the date of receipt of a copy of this Order without raising the bar of limitation.

6. : AIR1965SC473

7. 1989 FLR 786

8. 1982 (1) KLJ 156

9. 1984 (1) KLC 248

14. In the result, for the reasons stated and conclusions arrived at by us, this Writ Appeal is allowed. The order under Appeal is set aside and the Writ Petition is dismissed subject to what is stated above. There shall be no order as to costs.