# Pancham Ram Yadav v. The U.P. Co-Operative Federation Ltd. & Anr

- **Citation:** (2019) 2 ILRA 1912
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-09-02
- **Case number:** Special Appeal No. 435 of 2008
- **Bench:** Sudhir Agarwal, Manoj Misra, Rajendra Kumar-Iv
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/pancham-ram-yadav-v-the-u-p-co-operative-federation-ltd-anr-44684
- **Pages:** 14

## Headnote

A. Service Law - U.P. Co-operative
Societies Employees Service Regulation,
1975: Regulation 84; U.P. Co-operative
Federation
Limited
Karamchari
Seva
Niyamawali, 1980: Rule 83

The Single Judge while relying on the
judgment of Single Judge passed in Satya
Narain Vs Praband Nideshak and ors dispensed
the appellant from service and ordered for
recovery of pecuniary loss caused from the
embezzlement of money, thereby awarding
identical set of two punishments which are
awarded simultaneously.

The Division Bench in Virendra Kumar Gupta vs. State
of U.P. and ors without taking note of the judgment of
Single Judge of Satya Narain (Supra) emphasized that
Regulation 84 of the Regulation 1975 prevail over and
above
Niyamawali,
1980
therefore
only
one
punishment could have been awarded.

The matter has been referred to the larger
bench as to analyze the correct position of law
when punishment is awarded under Regulation
84 read with Rule 83.
Matter referred to Larger Bench (E-10)

Cases referred:-

## Text

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1912 INDIAN LAW REPORTS ALLAHABAD SERIES

V. The Government Orders
regarding evaluation norms and directions
for providing safe transportation, weight
of school bags, shall also be issued and
implemented;

VI. The Chief Secretary, State of
U.P. shall constitute a committee of various
departments to ensure concert in functioning and
coordination in implementation of the provisions
of the Right of Children to Free and Compulsory
Education Act, 2009 and directions in this
judgment. Appropriate authority shall also
regularly interface with the Government of India
for grant of funds in terms of the provisions of
the Right of Children to Free and Compulsory
Education Act, 2009;

VII. The said committee shall
submit a compliance report to the Chief
Secretary on the state of implementation
of the provisions of the Right of Children
to Free and Compulsory Education Act,
2009 and the directions in this judgment,
on a six monthly basis;

VIII. The Chief Secretary, State
of U.P., shall issue appropriate directions
from time to time to the said committee
and ensure that the provisions of the Right
of Children to Free and Compulsory
Education Act, 2009 and directions in this
judgment, are implemented rigorously
and on a time bound basis;

IX. A website shall be created by
the State Government at the state level as well
as the district level under the caption
"Saakshar Pradesh Shashakt Desh" ( ाक्षर
प्रदेश शशक्त देश), which shall upload the
progress
of
implementation
of
these
directions, and the provisions of the Right of
Children to Free and Compulsory Education
Act, 2009, details of schools in various
neighbourhoods, inspections made by the
State Authorities, and other data as may be
deemed appropriate on an up to date basis;

X. The existing schools which
were granted affiliation under the Government
Order dated 08.05.2013 and the Government
Order dated 11.01.2019, shall be granted time
till the end of the next academic session i.e. till
31.03.2021 to comply with the above said
requirements and new norms for grant of
recognition and government aid;

XI. After 31st March, 2021, the
State Government shall proceed in accordance
with law against the said schools, which fail to
fulfill the new infrastructure requirements and
norms. (This shall not apply to ongoing
proceedings against non-compliant schools).
However, at all times, the welfare of the
students shall be protected and arrangements
for admission to alternative schools shall be
made in regard to children from schools
which are not compliant with the norms for
recognition and grant of aid.

156. The writ petitions are decided finally.
----------

(2019)10ILR A 1912

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.09.2019

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE MANOJ MISRA, J.
THE HON'BLE RAJENDRA KUMAR-IV, J.

Special Appeal No. 435 of 2008

Pancham Ram Yadav
 ...Petitioner-Appellant
Versus
The U.P. Co-Operative Federation
Ltd. & Anr. ...Respondents
2 All. Pancham Ram Yadav Vs The U.P. Co-Operative Federation Ltd. & Anr.
1913
Counsel for the Petitioner:
Sri Chandan Kumar.

Counsel for the Respondents:
C.S.C., Sri Ram Gopal Tripathi, Sri V.C.
Tripathi.

A. Service Law - U.P. Co-operative
Societies Employees Service Regulation,
1975: Regulation 84; U.P. Co-operative
Federation
Limited
Karamchari
Seva
Niyamawali, 1980: Rule 83

The Single Judge while relying on the
judgment of Single Judge passed in Satya
Narain Vs Praband Nideshak and ors dispensed
the appellant from service and ordered for
recovery of pecuniary loss caused from the
embezzlement of money, thereby awarding
identical set of two punishments which are
awarded simultaneously.

The Division Bench in Virendra Kumar Gupta vs. State
of U.P. and ors without taking note of the judgment of
Single Judge of Satya Narain (Supra) emphasized that
Regulation 84 of the Regulation 1975 prevail over and
above
Niyamawali,
1980
therefore
only
one
punishment could have been awarded.

The matter has been referred to the larger
bench as to analyze the correct position of law
when punishment is awarded under Regulation
84 read with Rule 83.
Matter referred to Larger Bench (E-10)

Cases referred:-
1. Satya Narain Mishra Vs Prabandh Nideshak
& anr (2002) 1 AWC 582
2.
Vijay
Bahadur
Yadav,
Firozabad
Vs
Chairman, U.P. Co-operative Federation Ltd.
Lko & ors (1992) 2 UPLBEC 1215
3. Virendra Kumar Gupta Vs St of U.P. & ors
(2015) 7 ADJ 19
4. U.P. State Cooperative Land Development Bank
Ltd. Vs Chandra Bhan Dubey & ors (1999) 1
Supreme Court Cases 741
5. Najeebullah Siddiqui Vs Registrar, U.P. Cooperative Societies Writ Petition No. 6725 of
1989
6. Superintendent and Remembrance of Legal
Affairs, West Bengal Vs Corporation of Cal AIR
(1967) SC 997
7. Gladstone Vs Bower (1960) 3 All ER 353
(CA)
8. Bangalore Water Supply and Sewerage
Board Vs A. Rajappa & ors (1978) 36 FLR 266
9. Magor & St. Mellons R.D.C. Vs Newport
Corporation (1951) 2 All ER 839 (841)
10. Vemareddy Kumaraswamy Reddy & anr Vs
St of Andhra Pradesh (2006) 2 SCC 670
11. Star India Private Limited Vs Department
of Industrial Policy and Promotion & ors
(2019) 2 SCC 104
12. Petroleum and Natural Gas Regulatory
Board Vs Indraprastha Gas (2015) 9 SCC 209

Case followed:
1. Virendra Kumar Gupta Vs St of U.P. & ors
(2015) (7) ADJ 19

Case overruled: -

1. Satya Narain Mishra Vs Prabandh Nideshak
& anr (2002) (1) AWC 582

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. This Full Bench has been referred
two questions for adjudication by a
Division Bench of this Court vide order
dated
27.10.2017
noticing
some
inconsistencies in Regulation 84 of U.P.
Co-Operative
Societies
Employees
Service Regulations, 1975 (hereinafter
referred to as "Regulation, 1975") and
Rule 83 of U.P. Co-operative Federation
Limited Karmchari Seva Niyamawali,
1914 INDIAN LAW REPORTS ALLAHABAD SERIES
1980 (hereinafter referred to as "Rules,
1980")
and
also
expressing
its
disagreement with view taken by another
Division Bench in Virendra Kumar
Gupta Vs. State of U.P. and others in
Service Bench No. 614 of 2009, decided
on 28.07.2015.

2. The questions referred for
adjudication are as under:

"1. Whether Regulation 84 of
the
U.P.
Co-operative
Societies
Employees' Service Regulation 1975 read
with Rule 83 of the U.P. Co-operative
Federation
Limited
Karmchari
Seva
Niyamawali, 1980 services
can be
harmonized
so
as
to
uphold
the
punishment by way of dismissal of an
employee
coupled
with
an
order
directing recovery of an amount on the
charge of a financial embezzlement or
misappropriation to be included within
the fold of Regulation 84 ?

2. Whether the law laid down in
the case of Virendra Kumar Gupta Vs.
State of U.P. and others (Supra) in
respect of the true import of Regulation
84 read with Rule 83 aforesaid does not
state the correct position of law as
against the reasoning given by the
learned Single Judge in paragraph no.13
in the case of Satya Narain Mishra Vs.
Praband Nideshak and another (Supra)
and alternatively as to whether the
statement of law in that regard as
explained in the judgment of Satya
Narain Mishra Vs. Praband Nideshak
and another (Supra) should be accepted
as the correct position of law ?"

(Emphasis added)

3. The facts giving rise to the
present Reference may be stated as under.

4.

That
U.P.
Co-operative
Federation Limited (hereinafter to as
'PCF') is an Apex Level Co-operative
Marketing
Society,
constituted
and
registered under the provisions of U.P.
Co-operative
Societies
Act,
1965
(hereinafter referred to as 'U.P. Act,
1965'). Petitioner, Pancham Ram Yadav,
was appointed as Storekeeper with the
respondent-PCF on 09.03.1981. In 1988,
he was working in a godown situated at
Dandi, near Mama-Bhanja Talab in transyamuna area of Allahabad. In the night of
22/23 April, 1993, a theft was committed
in the said godown in respect whereto a
First Information Report was lodged at
Police Station, Naini, Allahabad on
23.04.1993 registered as Case Crime No.
297 of 1993, under Sections 409, 457 and
380 I.P.C. It was reported that 361 bags of
sugar were stolen. During investigation,
police arrested one Suraj Bhan Singh and
also recovered 101 sugar bags. One of the
facts noticed during investigation was that
the locks of godown were not broken and
bags of sugar were stolen. Considering
the matter, in detail, Managing Director,
PCF, passed an order of suspension on
18.05.1993
placing
petitioner
under
suspension and appointing one S.P. Singh,
General Manager, Head Quarter, as
Enquiry Officer. A charge-sheet dated
22.01.1994 was served upon petitioner
levelling four charges. During inquiry,
upon being transferred, Enquiry Officer
was changed and one Prateek Sanjar,
General Manager, PCF was appointed as
Enquiry
Officer
by
order
dated
30.10.1994 who completed enquiry and
submitted report holding charges proved
against petitioner. Thereafter, a showcause notice dated 29.05.1998 was issued
to petitioner and ultimately punishment
order dated 03.03.2000 was passed by
Managing
Director,
PCF
imposing
2 All. Pancham Ram Yadav Vs The U.P. Co-Operative Federation Ltd. & Anr.
1915
punishment of dismissal from service
with the approval of Institutional Service
Board and also for recovery of Rs.
2,69,130.14. This punishment order dated
03.03.2000 was challenged by petitioner
in Writ Petition No. 18891 of 2000. The
ground on which punishment order was
assailed before learned Single Judge is
that two punishments could not have been
awarded in view of Regulation 84 of
Regulation, 1975 but learned Single Judge
(Hon'ble D.P. Singh, J.) relying on an
earlier Single Judge judgment in Satya
Narain Mishra Vs. Prabandh Nideshak
and another : 2002 (1) AWC 582 rejected
the submission and dismissed the writ
petition vide judgment dated 12.11.2007.

5. Petitioner, Pancham Ram Yadav,
then came up in Special Appeal No. 435 of
2008 (Earlier No. 238 (Def.) of 2008) and
Division Bench, though agreed with the
view taken by learned Single Judge, but
finding another Division Bench judgment
taking a different view in its way, made this
reference to Larger Bench to answer the
questions noticed hereinabove.

6. Section 121 of U.P. Act, 1965
confers power upon Registrar to frame
Regulations to regulate emoluments and
other conditions of service including
disciplinary control of employees in a Cooperative Society or a class of Co-operative
Societies and any Society to which such
terms are applicable, shall comply with
those Regulations and any orders of
Registrar issued to secure such compliance.
Regulations framed in sub-Section (1) of
Section 121 of U.P. Act, 1965 are required
to be published in the Gazette and take
effect from the date of such publication.

7. Section 122 of U.P. Act, 1965
confers power upon State Government to
constitute an Authority or Authorities, in
such manner as may be prescribed for
recruitment, training and disciplinary
control of employees of Co-operative
Societies, or a class of Co-operative
Societies, and may require such Authority
or Authorities to frame Regulations
regarding recruitment, emoluments, terms
and conditions of service including
disciplinary control of such employees
and subject to the provisions contained in
Section 70, settlement of dispute between
an employee of a Co-operative Society
and the Society.

8. Regulations framed under subsection (1) of Section 122 of U.P. Act,
1965 are subject to approval of State
Government and publication in the
Gazette. After publication in Gazette the
said Regulation would supersede any
Regulations made under Section 121 of
Act, 1965.

9. In exercise of powers under subsection (1) of Section 122 of U.P. Act,
1965 (U.P. Act No. XI of 1966), read with
Rule 389-A of Rules, 1968, Governor,
vide Notification dated 04th March, 1972,
as
amended
by
Notification
dated
February
7,
1973,
constituted
an
Authority, namely, U.P. Co-operative
Institutional Service Board (hereinafter
referred to as the 'Board'), for recruitment,
training and disciplinary control of
employees of Apex Level Societies,
Central or Primary Societies (excluding
Co-operative Cane Development Unions
which include U.P. Co-operative Cane
Unions
Federations
Ltd.,
Lucknow)
whose area of operation extends to more
than one District or State, District or
Central Co-operative Banks, District Cooperative Federations, Co-operative Milk
Unions including Kanpur Co-operative
1916 INDIAN LAW REPORTS ALLAHABAD SERIES
Milk Board, Co-operative Cane Sugar
Factories, Co-operative Textile Mills and
U.P. Co-operative Housing Federation.
The constitution of Board and functions to
be exercised by it are also provided in the
said Notification and the same read as
under:-

"U.P.
Co-operative
Institutional Service Board

1. The Board shall consist of -

(i) A Chairman appointed by
State Government from amongst a serving
or retired Additional Registrar, who has
put in at least ten years' service in the U.P.
Co-operative Service Class I.

(ii) Two members appointed by
the State Government from amongst
serving or retired officers of the U.P. Cooperative Service Class I.

2. The Chairman or a member
of the Board shall hold office for a term
of two years from the date on which he
enters upon his office and such term may
be extended from time to time subject to
the condition that the total period of such
extended terms does not exceed four years
or until he attains the age of 60 years,
whichever is earlier.

3. (i) The Board shall have a
secretary and such other staff as the State
Government may from time to time
sanction to enable the Board to carry out
its business.

(ii) The Secretary and other staff
of the Board shall be appointed by the
Board
and
shall
be
under
the
administrative control of the Chairman,
provided that the Chairman may delegate
any of his powers relating to the
administrative control to any member of
the Board.

(iii) The Secretary of the Board
shall be from amongst the officers of the
U.P. Co-operative Service Class II.

4.
The
emoluments
of
the
Chairman, Members and the staff of the
Board shall be determined and paid by the
State Government.

5. The Chairman or a Member
shall cease to hold office from the date he
ceases to hold the qualifications necessary
for his being the Chairman or a Member, as
the case may be.

6. The State Government may
remove the Chairman or a Member where it
is the opinion that he ---

(a) has been guilty of misconduct
of gross negligence of duty as such
Chairman or Member; or

(b) has become of unsound mind,
or has become deaf and dumb, or blind or
suffers from leprosy; or

(c) has been convicted for any
offence involving moral turpitude; or

(d) is in default (at least for a
period of six months) to a co-operative
society in respect of any loan taken by him
or is a judgment-debtor, or

(e) has taken up any paid or
honorary job in any Co-operative Society.

7. The Board shall undertake the
job of training of the employees only after
prior permission of the State Government is
obtained in that respect.

8. The office of the Board shall
be headquartered as Lucknow, but the
Board may hold its sittings in any place or
places within the State for performance of
its duties and functions.

9. The Board shall frame its
own rules of business and shall submit a
copy thereof to the State Government.

10. The Board shall frame
regulations
regarding
recruitment,
emoluments, terms and conditions of
2 All. Pancham Ram Yadav Vs The U.P. Co-Operative Federation Ltd. & Anr.
1917
service including disciplinary control
within three months of its constitution:

Provided that the said period
may be extended by the State Government
from time to time."

10. In the Constitution of the Board
and other aspects, as contained in
paragraphs 1 and 2 of the Notification
dated 04th March 1972, subsequently
amendment was made and paragraphs 1
and 2 of Notification dated 04th March
1972 were substituted by Notification
dated 31st August 1988, as under:-

"AMENDMENTS

1. The Board shall consist of
three members appointed by the State
Government
from
amongst
Serving
Officers of category 'A' of the U.P. Cooperative Service, who have put in atleast
10 years of service in that category. The
Seniormost members shall be appointed
Chairman by State Government:

Provided that a person who is
the Chairman or a member of the Board
at the commencement of this para and is a
Serving Additional Registrar shall be
deemed to have been appointed under this
para.

2. The State Government may,
at any time transfer a member of the
Board to his parent service.

A member of the Board or
Chairman shall retire on attaining the age
of his superannuation."

11.

By
certain
subsequent
Notifications, some other Authorities
were notified under Section 122 (1) to
govern specified types of Co-operative
Societies inasmuch as by Notification
dated
24th
February
1974,
Cane
Commissioner was constituted as an
Authority competent to perform functions
under Sub-section 1 of Section 122 in
respect of all the employees of Cooperative
Cane
Development
Union
including U.P. Co-operative Cane Union
Federation Ltd., Lucknow. Similarly, by
Notification dated 06th August 1977,
Commissioner
and
Secretary,
Sugar
Industry
and
Cane
Development
Department, Uttar Pradesh was notified as
competent
authority
for
recruitment,
training and disciplinary control of the
employees of all Co-operative Sugar
Mills in Uttar Pradesh and U.P. Cooperative Sugar Factories Federation
Limited, Lucknow. The above reference
is only to place the facts straight.

12. Section 130 of U.P. Act, 1965
confers power upon State Government to
frame Regulations so as to carry out the
purposes of U.P. Act, 1965 and some of
the matters, without prejudice to the
generality of the power under sub-section
(1), are detailed in sub-section (2) of
Section 130 of U.P. Act, 1965.

13. In exercise of powers under
Section 130 of U.P. Act, 1965, U.P. Cooperative
Societies
Rules,
1968
(hereinafter referred to as Rules, 1968)
were framed by State Government. Rule
389-A of Rules, 1968 provided as under:

"389-A.
The
authority
or
authorities under Section 122 may be
constituted by the State Government by
Notification published in the Official
Gazette."

(Emphasis added)

14. For the purpose of present
matter, we need not go into any
Regulations alleged to have been framed
under Section 121 for the reasons that in
exercise of powers under Section 122 (2),
Regulations, 1975 have been framed
1918 INDIAN LAW REPORTS ALLAHABAD SERIES
under Section 1 of Section 122 and
published in the Gazette. They have
superseded existing Regulation on the
date of publication of Regulations, 1975
which was published in U.P. Gazette
(Extraordinary) dated 06.01.1976.

15. Regulation 2 (ix) of Regulation,
1975 defines "Co-operative Societies" for
the purposes of Regulation, 1975 and
reference to Co-operative Societies placed
under
the
purview
of
Board
by
Government
Notification
dated
04th
March 1972. 'Employees' governed by
Regulation,
1975
are
defined
in
Regulation 2 (xi) and reads as under:

"(xi) 'employee' means a person
in whole-time service of a co-operative
society, but does not include a casual
worker employed on daily wages or a
person in part-time service of a society."

16. Chapter-VI of Regulations, 1975
deals with conduct and discipline of the
employees of Co-operative Societies
governed by Regulations, 1975 and
contains Regulations 62 to 83. Thereafter
comes Chapter-VII which deals with
penalties, disciplinary proceedings and
appeals.
Regulation
84(i)
talks
of
penalties and reads as under:-

"84. Penalties.- (i) Without
prejudice to the provisions contained in
any other regulation, an employee who
commits a breach of duty enjoined upon
him or has been convicted for criminal
offence or an offence under section 103 of
the Act or does anything prohibited by
these regulations shall be liable to be
punished by any one of the following
penalties: -

(a) censure,

(b) with holding of increment,

(c) fine on an employee of
Category IV (peon, chaukidar, etc.).(d)
recovery from pay or security deposit to
compensate in whole or in part for any
pecuniary loss caused to the co-operative
society by the employee's conduct,

(e) reduction in rank or grades
held substantively by the employee,

(f) removal from service, or

(g) dismissal from service."

(Emphasis added)

17. The punishment contemplated under
Regulation 84 can be imposed by competent
authority in the manner and as per the
procedure prescribed under Regulation 85 of
Regulations, 1975. Regulations, 1975 are
deemed to be operative to the extent of their
inconsistency with any labour laws as
provided by Regulation 103 which reads as
under:-

"103.The provisions of these
regulations
to
the
extent
of
their
inconsistency, with any of the provisions
of the Industrial Disputes Act, 1947, U.P.
Dookan
Aur
Vanijya
Adhishthan
Adhiniyam,
1962,
Workmen's
Compensation Act, 1923 and any other
labour laws for the time being in force, if
applicable to any co-operative society or
class of co-operative societies, shall be
deemed to be inoperative."

18. Regulation 106 confers power
upon State Government to pass such
orders, not inconsistent with Regulations,
1975, as deemed necessary and to remove
difficulty
arising
in
relation
to
emoluments, terms and conditions of
service,
termination,
dismissal
or
removal, adoption or merger.

19. Then comes Regulation 102
which contemplates framing of Service
2 All. Pancham Ram Yadav Vs The U.P. Co-Operative Federation Ltd. & Anr.
1919
Rules by a Co-operative Societies with
the approval of Board. It reads as under:-

"102.(i)
Subject
to
the
provisions of these regulations, a cooperative society shall within three
months from the date of coming into force
of the regulations (unless an extension of
time is allowed by the Board in writing)
frame service rules for its employees.

(ii) The service rules framed
under sub-clause (i) shall be submitted to
the Board for approval and shall be
operative only after the approval.

(iii) Notwithstanding, anything
contained
in
these
Regulations
the
existing employees shall have an option
to continue to be governed by the
existing service rules, if any, in the
society
only
in
respect
of
their
emoluments and benefits or to opt the new
services rules on these matters.

Explanations.- (1) Provisions
relating to pay, increments and allowance
(other
than
travelling
allowance),
probation,
confirmation,
retirement,
provident fund, and gratuity, shall be
deemed as included in term "emoluments
and benefits".

(2) In case of any doubt or
dispute interpretation in respect of matter
mentioned in (1) above, reference shall be
made to the Board and its decision shall
be final.

(3) Existing service rules means
authentic service rules framed by and
with the approval of the competent
authority."

(Emphasis added)

20. It is the admitted case of
respondents that Rules, 1980 have been
framed by PCF pursuant to resolution
dated 18.11.1977 approving the said
Rules which was approved by Board, vide
letter dated 20.04.1979, proposing some
amendments/corrections.
Thereafter,
matter was again examined and PCF
passed a resolution dated 11.03.1980 and
the same was approved by Board vide
letter dated 04.12.1980.

21. In the present case, we are
concerned with Rule 83 of Rules 1980,
which reads as under:-

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micU/kksa ij izfrdwy izHkko Mkys fcuk fdlh
deZpkjh dks tks vius drZO;ksa dk dkbZ mYya?ku
djrk gS ;k n.M vijk/k vf/kfu;e dh /kkjk
103 ds v/khu fdlh vijk/k ds fy;s fl) nks"k
gqvk gS ;k lsok fu;ekoyh }kjk izfrf"k) dksbZ
dk;Z djrk gS] rks mls fuEu 'kkfLr;ksa esa ls ,d
;k vf/kd 'kkfLr;ksa }kjk nf.Mr fd;k tk
ldsxk A

1⁄4d1⁄2 fuUnk]

1⁄4[k1⁄2 osru o`f) ij jksd]

1⁄4x1⁄2 Js.kh 4 ds fdlh deZpkjh
1⁄4pijklh] pkSdhnkj vkfn1⁄2 ij tqekZuk]

1⁄4?k1⁄2 deZpkjh ds vkpj.k }kjk
QsMjs'ku dks gksus okyh fdlh /ku laca/kh {kfr
dks iw.kZr;k vFkok vkaf'kd :i ls {kfriwfrZ djus
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vfuok;Zr% lEc) deZpkjh dks nh tk;sxh vkSj
deZpkjh ds lsok vfHkys[k esa bl vk'k; dh
izfo"V dh tk;sxhA

1⁄431⁄2 fuUnk djus ds vykok dksbZ Hkh
'kkfLr rc rd vkjksfir ugha dh tk;sxh tc rd
fd deZpkjh ds dkj.k crkus dh uksfVl u ns nh xbZ
gks vkSj ;k rks og fofufnZ"V le; ds Hkhrj mRrj
nsus esa vlQy jgk gks vFkok mRrj n.M nsus okys
vf/kdkjh }kjk vlarks"ktud ik;k x;k gksA

1⁄441⁄2 1⁄4d1⁄2 vkjksfir deZpkjh dks
leqi;qDr izkf/kdkjh }kjk vijk/k dh xEHkhjrk ds
vuqlkj n.M fd;k tk;sxk%
1920 INDIAN LAW REPORTS ALLAHABAD SERIES

izfrcU/k ;g gS fd [k.M 1⁄411⁄2 ds
mi[k.M 1⁄4M-1⁄2] 1⁄4p1⁄2 ;k 1⁄4N1⁄2 ds v/khu dksbZ 'kfDr
vuq'kklfud dk;Zokgh fd;s fcuk vkjksfir ugha
dh tk;sxhA

1⁄4[k1⁄2 dksbZ deZpkjh ml izkf/kdkjh ls
ftlds }kjk og fu;qDr fd;k x;k Fkk fHkUu
fdlh izkf/kdkjh }kjk rc rd gVk;k ;k inP;qr
ugha fd;k tk;sxk tc rd fd fu;qDr izkf/kdkjh
us ,sls vizkf/kdkj dk izfrfu/kk;u ,sls vU;
O;fDr ;k izkf/kdkjh dks fyf[kr :i esa igys gh
u dj fn;k gksA

1⁄451⁄2 fu;qDr izkf/kdkjh ;k mlds }kjk
izkf/kd`r O;fDr osru o`f) jksdus dk vkns'k nsrs
le; ml vof/k dk tc rd ds fy;s og jksdh
xbZ gS vkSj bldk fd D;k mlls Hkfo"; dh
osru o`f);ka vFkok inksUufr LFkfxr gksxh]
mYys[k djsxkA^^"

(Emphasis added)

22. The question up for our
consideration is that Regulation 84 of
Regulations, 1975 which confers power
upon competent authority to impose
anyone of the punishments prescribed in
Regulation 84 while Rule 83 of Rules,
1980 talks of anyone or more of the
punishments prescribed in Rule 83 and
therefore the first question is "whether to
the extent only one punishment is
permissible
under
Rule
83,
is
it
inconsistent with Regulation 84; or, Rule
83 will have an independent operation
without being affected in any manner by
Regulation 84.

23. One of the earlier decision cited
before us is that of a Single Judge
(Hon'ble D.P.S. Chauhan, J.) in Vijay
Bahadur
Yadav,
Firozabad
Vs.
Chairman, U.P. Co-operative Federation
Ltd. Lucknow and others : (1992) 2
UPLBEC
1215,
wherein,
after
reproducing Regulation 84 in a short
judgment, learned Single Judge has held
that the punishment order providing three
penalties cannot be sustained. After
quoting Regulation 84 in paragraph 4 of
the judgment, learned Single Judge has
observed
that
under
aforesaid
Regulations,
punishing
authority
is
authorised to impose any one of the
penalties provided thereunder, and not
more than one.

24. This decision has been followed
in Virendra Kumar Gupta Vs. State of
U.P. and others 2015 (7) ADJ 19 by a
Division Bench comprising of Hon'ble S.
N. Shukla and Akhtar Husain Khan, JJ. It
has been held therein that Rules framed
by
a
Co-operative
Society
under
Regulation 102 are subject to the
provisions of Regulations, 1975 in view
of section 122 and for this purpose,
reliance is placed on Supreme Court
judgment in U.P. State Cooperative Land
Development Bank Ltd. versus Chandra
Bhan Dubey and others : (1999) 1
Supreme Court Cases 741. Having said
so, Court has said that Rule 84 of Rules,
1975 shall prevail over Regulation 83 of
Regulations, 1980 and since superior
statutory provision permits imposition of
only one penalty, hence more than one
penalty cannot be imposed.

25. In Satya Narain Mishra's case
(supra),
learned
Single
Judge
was
confronted with the decision of the earlier
Single Judge in Vijay Bahadur Yadav
(supra) which was followed in Writ
Petition No. 6725 of 1989 (Najeebullah
Siddiqui Vs. Registrar, U.P. Co-operative
Societies), decided on 02.02.1996 but
having noticed above two decisions,
learned Single Judge (Hon'ble Sunil
Ambwani, J.) proceeded to consider the
issue of misappropriation of public money
by an employee of bank and observed that
such misconduct cannot be treated lightly,
2 All. Pancham Ram Yadav Vs The U.P. Co-Operative Federation Ltd. & Anr.
1921
and
if
some
amount
has
been
misappropriated by a bank employee and
he is imposed any other punishments and
not recovery, that will proved to be an
incentive to such an employee to siphon
away huge public funds and thereafter get
only one punishment, may be dismissal,
but no recovery at all. The observations
made by learned Single Judge in Satya
Narain
Mishra's
case
(supra),
in
paragraph 13, reads as under:-

"13. In case bank employee who
is found to have embezzled the amount,
the public policy demands that apart from
the punishment given by departmental
authority, he be held responsible for the
recovery of the pecuniary loss caused by
the employee to the Bank. If an employee
is held to be liable to only one of the
punishments, it may become an incentive
to misappropriate or embezzle a large
amount and escape liability of such
misappropriation or embezzlement. The
punishment of reversion or removal or
dismissal on the ground of misconduct
should be with direction of recovery to
make good the loss caused due to such
misconduct. Regulation 84, providing for
penalties and stating that the employee is
liable to be punished by any one of the
penalty has thus to be interpreted to mean
that in case of misappropriation or
embezzlement which is the misconduct on
account of which the employee has been
penalised, the recovery of the amount of
pecuniary loss caused to the bank is
necessary to be coupled with the penalty
effected upon delinquent employee. In
V.K. Bahadur u. State Bank of India.
2001 L&IC 935, this Court following the
judgment in State Bank of India v. T.J.
Paul, AIR 1999 SC 1994 ; Kailash Nath
Gupta Vs. Enquiry Officer : 1997 (1)
AWC 2.63 (NOC): 1997 ACJ 896, held
that where financial irregularities of
serious nature are found proved against
the bank employee no lenient view should
be taken. A bank runs on public
confidence. A greater integrity and
devotion is required from bank employee
in comparison to employees of other
organisations.
If
the
allegation
of
embezzlement, misappropriation or gross
negligence is found to be established
causing pecuniary loss to the bank on
account of delinquent employee, the
amount of loss must be made good by
him. In the present case, only half of the
doubtful recoveries have been sought to
be made good, and in the circumstances it
is held that imposition of penalty of
reversion along with recovery of the
amount, does not violate Regulation 84 of
the U. P. Co-operative Societies Service
Regulation. 1975."

26. His Lordship (Hon'ble Sunil
Ambwani, J.) has sought to interpret
Regulation 84 in the manner that in case
of misappropriation and embezzlement, if
an employee is penalized, the order of
recovery of the amount of pecuniary loss
caused to the employer is necessary to be
coupled with the penalty inflicted upon
delinquent employee. His Lordship has
referred to this Court's judgment in V.K.
Bahadur u. State Bank of India. 2001
L&IC 935, wherein, it was held that
financial irregularities of serious nature, if
proved against a bank employee, no
lenient view should be taken. A greater
integrity and devotion is required from
bank
employees
in
comparison
to
employees of other organizations. If the
allegations
of
embezzlement,
misappropriation or gross negligence is
found to be established causing loss to the
bank, such employee may be required to
make the loss good.
1922 INDIAN LAW REPORTS ALLAHABAD SERIES

27. There is clear disagreement on
the part of the learned Single Judge in
Satya Narain Mishra's case (supra) and
from earlier judgment in Vijay Bahadur
Yadav's case (supra) as also Najeebullah
Siddiqui Vs. Registrar, U.P. Co-operative
Societies (supra) but instead of referring
the matter to Larger Bench, his Lordship
has taken a different interpretation, which,
in our opinion, was not appropriate and
the proper course was to refer the matter
to a Larger Bench.

28. The Division Bench making
present
reference
has
expressed
its
agreement with the learned Single Judge
in Satya Narain Mishra's case (supra)
and the reason is apparent that an
employee who has caused loss to
employer by embezzling public money
etc. must be made liable to make the loss
good and strict interpretation of statutory
provision, if allows, such person would
escape
such
liability,
hence
such
interpretation would not be in public
interest but would be the boom to the
employee concerned.

29. Faced with these two views
expressed in the above two sets of
judgments, we have examined the scope
and ambit of Regulation 84 of Regulation,
1975 vis-a-vis Rule 83 of Rules, 1980.

30. Rules, 1980, if would have been
framed in an independent exercise of
power under some provision of U.P. Act,
1965, things would have been much
easier but, here, the real problem is that
Rules, 1980 have been framed in exercise
of power under Regulation 102 of
Regulation, 1975. Such Rules have to be
subordinate and subject to Regulation,
1975 and cannot be allowed to travel
beyond specific provisions contained in
Regulations, 1975. It is not a case where
Regulations, 1975 is silent and, therefore,
Rule, 1980 travels on a field which is
unoccupied. On the contrary, here is a
field covered by Regulation 84 of
Regulations, 1975 which very specifically
provides that only one of the punishments
prescribed can be imposed. However Rule
83 of Rules, 1980 states that anyone or
more punishment can be imposed. The
words used in both the provisions are
distinct. Regulation 84 while restrict
power of punishing authority to the extent
of imposing one punishment, there is no
such restriction in Rule 83 of Rules, 1980.
On
the
contrary
Rule
83
permits
imposition of more than one punishment.

31. Looking to the purpose and
objective of the provisions dealing with
disciplinary
proceedings
and
the
punishment to be imposed upon an
employee, there cannot be any doubt that
an employee, if found guilty of serious
misconduct of embezzlement of public
funds, he must be imposed major
penalties of reduction in rank or dismissal
or removal but, simultaneously, if such
misconduct has also caused loss to the
employer, one cannot have any doubt that
punishment of recovery should also be
imposed upon him so that such employee
may not escape without making good the
loss caused to the employer on account of
misconduct. This object is very loud and
must be given effect but, in our view,
when Statute is specific, clear and
categorical there is no reason that court
must provide casus omissus and read
something
therein
which
legislating
competent authority has chosen not to do.

32. It cannot be said that Board who
actually drafted Regulations, 1975 and got
it approved from State Government was
2 All. Pancham Ram Yadav Vs The U.P. Co-Operative Federation Ltd. & Anr.
1923
not
aware
that
several
kinds
of
punishments have been prescribed in the
Statutes and provision could be made to
impose more than one punishments, still it
has chosen not to do so and has chosen
not to make any amendment in Regulation
84 till date. If we add the words "or more"
after the word "anyone" in Regulation
84(1), it will amount to a judicial
legislation and will change the scope and
ambit of Regulation in its entirety. The
law on the subject is that Court should not
add anything in the Statute when
otherwise Statute is clear.

33. Normally a casus omissus
should not be read by Court in the statute
and should not be easily supplied unless it
is found by implication that it was the
intention of legislature and hence in the
scheme of the statute, it is necessary. This
Court is aware that the rules of the
interpretation are not rules of laws and are
not to be followed like rules enacted by
legislature
in
Act
as
observed
in
Superintendent and Remembrance of
Legal
Affairs,
West
Bengal
Vs.
Corporation of Calcutta, AIR 1967 SC
997. The principles of interpretation serve
only as a guide. A casus omissus cannot
be supplied by Court. There is no
presumption that a casus omissus exists
and language permitting Court should
avoid creating a casus Omissus where
there is none. It would be appropriate to
recollect the observations of Devlin, L.J.
in Gladstone Vs. Bower,(1960) 3 All ER
353 (CA):

"The Court will always allow
the intention of a statute to override the
defects of working but the Court's ability
to do so is limited by recognized canons
of interpretation. The Court may, for
example,
prefer
an
alternative
construction, which is less well fitted to
the words but better fitted to the intention
of the Act. But here, there is no
alternative construction; it is simply a
case of something being overlooked. We
cannot legislate for casus omissus."

34. In Bangalore Water Supply
and Sewerage Board Vs. A. Rajappa
and others 1978 (36) FLR 266, Court
quoted with approval the following
observation of Lord Simonds in Magor &
St.
Mellons
R.D.C.
Vs.
Newport
Corporation, (1951) 2 All ER 839 (841):

"The duty of the Court is to
interpret the words that the Legislature
has
used.
Those
words
may
be
ambiguous, but, even if they are, the
power and duty of the Court to travel
outside them on a voyage of discovery are
strictly limited."

35. It would be appropriate at this stage
to remind another principle that though a
Court cannot supply a real casus omissus, it
is equally evident that it should not so
interpret a statute as to create casus omissus
when there is really none.

36. In Vemareddy Kumaraswamy
Reddy and another Vs. State of Andhra
Pradesh 2006 (2) SCC 670 Court
reiterated
that
while
interpreting
a
provision, Court only interprets the law
and cannot legislate. If a provision of law
is misused and subject to the abuse of
process of law, it is for the legislature to
amend, modify or repeal it if deemed
necessary. The legislative casus omissus
cannot
be
supplied
by
judicial
interpretative process.

37. Recently, in Star India Private
Limited Vs. Department of Industrial
1924 INDIAN LAW REPORTS ALLAHABAD SERIES
Policy and Promotion and others (2019)
2 SCC 104, Court referring to earlier
judgment in Petroleum and Natural Gas
Regulatory Board Vs. Indraprastha
Gas Ltd. (2015) 9 SCC 209 has held,
where there is a casus omissus, such
lacuna cannot be filled up by judicial
interpretative process.

38. In this view of the matter, we
find no reason to expand scope of
Regulation 84 beyond what is stated
specifically therein and/or to allow Rule
83 to operate beyond Regulation 84 which
is part of principal legislation under which
Rule 83 has been framed and has to be
subordinate thereto.

39. We, therefore, hold that
Regulation 84 shall prevail over Rule 83
and to the extent Rule 83 is inconsistent
with Regulation 84, it is ultra vires and
cannot be given effect to.

40. Having said so, we may also
make it clear that it would not result in
allowing an employee of a Co-operative
Society to swallow funds of a Cooperative Society and go unburdened with
the loss it has caused to the employer. By
virtue of departmental enquiry, once it is
established that an employee has caused
some loss to the employer, in our view, it
will become a civil liability of such an
employee to make good the loss caused to
the employer or employer can claim
discharge of such liability by employee by
paying such amount, failing which, to
proceed for recovery in any other manner
as provided in law. For example, since
such
loss/civil
liability
touches
the
business of Co-operative Society, its
dispute can be resolved under Section 70
of U.P. Act, 1965 or the said amount can
be recovered by bringing an action in civil
law.