1990 (3) TMI 369 - HC - Companies Law

Summary

Issues Involved:
1. Whether a writ petition lies against a Co-operative Society, and if it does, in what circumstances?
2. Whether the bye-laws framed by a Co-operative Society have the force of law?
3. Whether the appellant in W.A. No. 69/1986 is a 'State' within the meaning of Art. 12?
4. Whether a writ petition lies to enforce the terms of a non-statutory contract?

Summary:

1. Whether a writ petition lies against a Co-operative Society, and if it does, in what circumstances?
The Court examined the applicability of writ petitions against Co-operative Societies. It was established that a writ petition can lie against a Co-operative Society if it is characterized as a 'State' within the meaning of Art. 12 of the Constitution. This is because such a society must follow its bye-laws in the interest of fairness, ensuring compliance with Art. 14. Even if a society is not a 'State', a writ can lie to enforce a statutory public duty.

2. Whether the bye-laws framed by a Co-operative Society have the force of law?
The Court held that the bye-laws of a Co-operative Society do not have the force of law. They are considered terms of a contract between the Society and its employees or members. This was affirmed by the Supreme Court in Co-operative Central Bank Ltd. v. Industrial Tribunal, Hyderabad, and B.K. Garad v. Nasik Merchants' Co-operative Bank Ltd. The Court emphasized that the power to make laws belongs to the Legislature and other authorities empowered by the Constitution, and bye-laws do not constitute delegated legislation.

3. Whether the appellant in W.A. No. 69/1986 is a 'State' within the meaning of Art. 12?
The Court applied the tests from Ramana Dayaram Shetty and Ajay Hasia v. Khalid Mujib to determine if the appellant, Sree Konaseema Co-operative Central Bank, is a 'State'. It found that the Government's shareholding was negligible and the Bank did not enjoy a monopoly status or deep and pervasive State control. Therefore, the appellant-Society cannot be characterized as a 'State' within the meaning of Art. 12.

4. Whether a writ petition lies to enforce the terms of a non-statutory contract?
The Court reiterated that mandamus, certiorari, and prohibition are public law remedies and are not available to enforce private law rights. A contractual obligation that is not statutory cannot be enforced by way of a writ petition under Art. 226 of the Constitution. This principle was affirmed by the Supreme Court in various cases, including Radhakrishna Agarwal v. State of Bihar and L.I.C. of India v. Escorts Ltd. The Court also discussed the impact of Section 47 of the A.P. Shops and Establishments Act, which provides certain protections to employees and can be enforced by a writ of mandamus in appropriate cases.

Application of Principles:
- W.A. No. 69/1986: The respondent's termination was found to violate Section 40 of the A.P. Shops and Establishments Act. The Court directed the respondent to file an appeal, and pending the appeal, the respondent shall continue in service.
- W.P. No. 13286/1988: The petition was dismissed as it lacked allegations that the respondent-Bank is a 'State' within the meaning of Art. 12.
- W.P. No. 1780/1989: The petition was dismissed as there was no basis for interference with the suspension order. The petitioner was advised to approach the Co-operative authorities.