Termination in breach of an interim no-adverse-order direction is invalid; fresh hearing is mandatory.

The petitioner’s services with Zila Sahkari Kendriya Bank, Bilaspur, were terminated by order dated 1 September 2018 following proceedings concerning his educational qualifications.

After the petitioner replied to the show-cause notice, the Staff Sub-Committee issued a notice dated 2 August 2018 requiring his personal appearance on 10 August 2018.

The petitioner challenged that notice under Section 80-A of the Chhattisgarh Co-operative Societies Act, 1960, and the Registrar passed an interim order dated 8 August 2018 directing that no adverse order be passed against him.

Despite being informed of the interim order, the Staff Sub-Committee resolved on 10 August 2018 to terminate his services.

The petitioner’s challenge was dismissed on 28 August 2018, after which the Bank formally terminated his services on 1 September 2018.

In proceedings under Section 55(2) of the Act, the Joint Registrar set aside both the Staff Sub-Committee’s decision dated 10 August 2018 and the termination order dated 1 September 2018, while granting the Bank liberty to proceed afresh in accordance with law.

The Co-operative Tribunal allowed the Bank’s appeal and set aside the Joint Registrar’s order, leading to the present writ petition.

Whether the Staff Sub-Committee’s decision dated 10 August 2018 and the consequential termination order dated 1 September 2018, passed despite the Registrar’s interim direction not to take any adverse action, were legally sustainable.

Whether the Co-operative Tribunal was justified in setting aside the Joint Registrar’s order dated 5 December 2019.

Whether the Bank could be permitted to proceed afresh regarding the alleged proceeding dated 28 February 2018 and the petitioner’s educational qualifications.

The Court applied Section 55(2) of the Chhattisgarh Co-operative Societies Act, 1960, governing service disputes arising in co-operative societies.

It also applied Section 80-A of the Act, under which the Registrar entertained the petitioner’s challenge to the personal-hearing notice and issued an interim direction that no adverse order be passed.

The governing legal principle was that an administrative or disciplinary authority must comply with a subsisting interim order of a competent statutory authority; an order passed in deliberate disregard of such direction is legally infirm.

The Court further recognised the requirement of a fresh and meaningful opportunity of hearing before adverse disciplinary action is taken after the conclusion of interim proceedings.

Section 49-B of the Act was relevant to the procedure to be followed if the Bank decided to recommence proceedings.

The Registrar’s order dated 8 August 2018 expressly restrained the Bank from passing any adverse order against the petitioner. The Staff Sub-Committee had notice of that order but nevertheless resolved to terminate the petitioner on 10 August 2018, while the statutory challenge was still pending.

The subsequent dismissal of the petitioner’s application on 28 August 2018 did not retrospectively validate the earlier decision taken in breach of the interim order.

After the application was dismissed, the proper course was to provide the petitioner a fresh opportunity of hearing; instead, the Bank proceeded to issue the termination order on 1 September 2018.

Accordingly, the Joint Registrar correctly treated the Staff Sub-Committee’s decision and the consequential termination as unlawful. The Tribunal therefore erred in interfering with the Joint Registrar’s order.

However, the Joint Registrar had not conclusively determined the existence or validity of the alleged proceeding dated 28 February 2018; it had merely granted liberty to the Bank to proceed afresh and directed that the issue be examined by the Staff Sub-Committee after giving both parties an opportunity to establish the relevant record.

The High Court set aside the Co-operative Tribunal’s order dated 20 February 2020 to the extent that it interfered with the Joint Registrar’s order dated 5 December 2019.

The decision dated 10 August 2018 and the consequential termination order dated 1 September 2018 were upheld as having been rightly set aside because they violated the Registrar’s interim order and were passed without a fresh opportunity of hearing.

The Bank was permitted to proceed afresh in accordance with law, including examining the existence and legality of the alleged proceeding dated 28 February 2018, after affording both parties an opportunity to be heard.

The parties were directed to bear their own costs.