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        Companies Law

        1990 (3) TMI 369 - HC - Companies Law

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        Co-operative society bye-laws are not law; writ relief depends on State status or a statutory public duty. Bye-laws of a co-operative society under the Andhra Pradesh Co-operative Societies Act do not have the force of law merely because they are approved or ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Co-operative society bye-laws are not law; writ relief depends on State status or a statutory public duty.

                          Bye-laws of a co-operative society under the Andhra Pradesh Co-operative Societies Act do not have the force of law merely because they are approved or controlled under the statute. The society was held not to be State under Article 12 on the facts, as the regulatory control and limited Government shareholding did not establish deep and pervasive control or performance of governmental functions, though a society that does qualify as State remains subject to Article 14 and writ scrutiny in appropriate cases. Writ jurisdiction does not ordinarily enforce a purely non-statutory contract of service or bye-law service terms, except where a statutory public duty is involved. The connected termination and suspension matters were dealt with by directing recourse to statutory or departmental remedies.




                          Issues: (i) Whether the bye-laws of a co-operative society governed by the Andhra Pradesh Co-operative Societies Act have the force of law; (ii) whether a co-operative society can be characterised as State under Article 12 and, if so, whether its actions affecting employees are amenable to writ jurisdiction; (iii) whether a writ petition lies to enforce the terms of a non-statutory contract or service conditions founded only on bye-laws; and (iv) whether the termination and suspension orders in the connected matters could be interfered with.

                          Issue (i): Whether the bye-laws of a co-operative society governed by the Andhra Pradesh Co-operative Societies Act have the force of law.

                          Analysis: Bye-laws framed by a co-operative society were held to be distinct from delegated legislation. They are approved, amended, and controlled under the statute, but they do not derive legislative force from the Act in the manner of rules made by a competent delegate. The constitutional definition of law in Article 13(3)(a) does not itself convert every bye-law into law; only bye-laws that truly have the force of law fall within that expression. Earlier Supreme Court decisions on municipal bye-laws were distinguished because those bye-laws were made under statutory delegations of legislative power and were therefore materially different.

                          Conclusion: The bye-laws of a co-operative society governed by the Act do not have the force of law.

                          Issue (ii): Whether a co-operative society can be characterised as State under Article 12 and, if so, whether its actions affecting employees are amenable to writ jurisdiction.

                          Analysis: The tests of governmental ownership, financial support, monopoly, deep and pervasive State control, public importance of functions, and transfer of governmental functions were applied to the society in question. Although some regulatory control existed, the society's shareholding by Government was small, its operations were confined to members, and its functions were not shown to be closely tied to governmental functions. The society was therefore not treated as State. At the same time, the Court recognised that if a co-operative society does fall within Article 12, its conduct must conform to Article 14 and its bye-laws may be enforced in writ jurisdiction to prevent arbitrariness.

                          Conclusion: The appellant-society was not a State under Article 12, but a society that does qualify as State would be bound by Article 14 and amenable to writ control in appropriate cases.

                          Issue (iii): Whether a writ petition lies to enforce the terms of a non-statutory contract or service conditions founded only on bye-laws.

                          Analysis: Mandamus, certiorari, and prohibition were treated as public law remedies, not vehicles for enforcing private contractual rights. A non-statutory contract of service cannot ordinarily be enforced through Article 226 merely because one party is a public body. The Court distinguished decisions relied on for a broader proposition and held that a writ would lie only where a statutory public duty is involved. In the employment context, statutory protection under the Shops and Establishments law may still furnish a writ-ground where the mandatory statutory duty is violated.

                          Conclusion: A writ petition does not lie to enforce a purely non-statutory contract of service or bye-law based service terms, except where a statutory public duty is shown.

                          Issue (iv): Whether the termination and suspension orders in the connected matters could be interfered with.

                          Analysis: In the appeal concerning termination, the Court held that the matter required statutory examination under the Shops and Establishments legislation and directed the employee to pursue the available appeal remedy, while preserving interim continuance pending that appeal. In the later writ petition challenging a recruitment-related grievance, the petition failed for want of any enforceable right. In the suspension matter, the writ petition was also dismissed, though the employee was left to pursue the co-operative authorities and the enquiry was directed to be concluded expeditiously.

                          Conclusion: The writ appeal was allowed with directions to pursue the statutory appeal, while the connected writ petitions were dismissed.

                          Final Conclusion: Co-operative society bye-laws under the Andhra Pradesh Co-operative Societies Act are not law, writ relief against a society depends on State character or a statutory public duty, and private contractual service disputes are ordinarily outside Article 226, though statutory employment protections may still be enforced.

                          Ratio Decidendi: Bye-laws of a co-operative society do not acquire the force of law merely because they regulate service conditions, and writ jurisdiction under Article 226 is available only where the society is State under Article 12 or where a statutory public duty is involved, not for enforcement of a purely non-statutory contract.


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