Allahabad HC Quashes Termination of 50 Assistant Managers at UP Cooperative Bank, Finds No Independent Application of Mind

Justice Rajeev Singh set aside five linked orders cancelling the appointments of 48 Assistant Managers at UP Cooperative Bank, finding the Appointing Authority acted solely on a government directive without any independent reasoning.

The Lucknow Bench of the Allahabad High Court has quashed a chain of five orders issued between April and June 2019 that cancelled the appointments of 50 Assistant Managers (General) at U.P. Cooperative Bank Limited. Justice Rajeev Singh, sitting singly, held that the Managing Committee and the Managing Director passed the termination orders without any independent application of mind—executing, in effect, a dictate from the Principal Secretary of the Cooperative Department. The judgment, pronounced on 25 August 2026 after being reserved on 29 May 2026, restores the petitioners to their posts but treats the period from termination till date as “no work no pay.”

The Dispute Before the Court

Two writ petitions—Writ-A No. 17783 of 2019 and Writ-A No. 17788 of 2019—were filed by Manish Kumar and 25 others, and Kamlesh Kumar Verma and 21 others respectively, all appointed as Assistant Managers (General) in U.P. Cooperative Bank in 2016. They sought certiorari quashing five orders: the termination orders dated 7 June 2019 issued individually by the Managing Director; an order dated 4 June 2019 from the U.P. Co-operative Institutional Service Board; a Board of Directors resolution dated 30 May 2019 cancelling appointments; an order dated 24 May 2019 from the Registrar-cum-Commissioner, Cooperative Societies; and a letter dated 27 April 2019 from the Principal Secretary, Cooperative Department. Both petitions also sought a mandamus directing that the petitioners be permitted to continue as Assistant Managers with consequential benefits including regular salary.

Because the genesis of both petitions was the same letter of 27 April 2019, Justice Rajeev Singh disposed of them by a common judgment with the consent of counsel for all sides.

Recruitment Background and Qualification Change

U.P. Cooperative Bank is an apex cooperative society functioning under the U.P. Co-operative Societies Act, 1965 and carries on banking under a licence from the Reserve Bank of India under the Banking Regulation Act, 1949. Under Section 122 of the 1965 Act, the State Government constituted the U.P. Co-operative Institutional Service Board to handle recruitment, training and disciplinary control across cooperative societies. The Board's recruitment functions are governed by the U.P. Co-operative Societies Employees Service Regulation, 1975, and the bank's own U.P. Cooperative Bank Staff Service Rules, 1981.

In April 2015, the Managing Director of the Bank wrote to the Service Board requesting recruitment for, among other posts, that of Assistant Manager, noting that the Registrar-cum-Commissioner had fixed the minimum qualification as a graduate degree in Commerce, Economics, Mathematics or Statistics with at least 50% marks, or an MBA/PGDM (Full Time) in Banking and Finance from a UGC- or AICTE-recognised institution. An advertisement was published on 26 June 2015.

Before the application deadline, the Bank's Board of Directors, at its meeting of 7 July 2015, resolved to broaden the minimum qualification to a degree in any discipline with 50% marks and requested the Registrar-cum-Commissioner to approve the change. The Registrar-cum-Commissioner, exercising power under Section 120 of the 1965 Act read with Regulation 7 of the 1975 Regulations, approved the relaxed qualification by order dated 16 July 2015. The Service Board issued a corrigendum on 22 July 2015, extended the last date for applications to 10 August 2015 and the fee deadline to 13 August 2015. The written examination result was declared on 30 September 2015 and the final result on 15 October 2015.

Litigation That Preceded the Terminations

Two writ petitions challenged the advertisement and result. Writ Petition No. 6003 (S/S) of 2015 (Jyoti Shukla v. State of UP), filed on 8 October 2015 by a candidate who had not qualified the written examination, led to a status quo order on 16 October 2015. That interim order was not extended on 18 February 2016. On 25 February 2016, the court directed that the joining of selected candidates would be subject to the final outcome of the writ petition.

Appointment letters were issued on 23 February 2016, noting that appointments were subject to the writ proceedings. Petitioners joined and worked as Assistant Managers from February 2016 until the termination orders of June 2019—a period of roughly three and a half years. Their work and conduct were described as outstanding by supervising officials. Regulation 17(1) of the 1975 Regulations sets a probation period of one year, yet the petitioners were never confirmed in service during this period.

Writ Petition No. 6003 (S/S) of 2015 was ultimately dismissed on 1 March 2023 on the ground that the petitioner had not challenged the selections themselves, had not impleaded the selected candidates, and had participated in the process without obtaining the cut-off marks.

The Inquiry and the Government's Direction to Terminate

A complaint by an NGO called Sahkar Bharti prompted an inquiry ordered on 10 October 2018. The inquiry report dated 7 January 2019 concluded that Mr. Ravikant Singh, the then Managing Director of the Bank (who was also Additional Commissioner/Additional Registrar), had ignored relevant rules at the time of appointment of 50 Assistant Managers and that, in collusion with another then-Managing Director Pramod Kumar Upadhyay, had reduced the qualification for the post. The report also found that appointment letters were issued in a hasty manner after the interim order in the writ petition was not extended on 18 February 2016.

On the basis of this report, FIR No. 13 of 2020 was registered under Sections 420, 467, 468, 471 and 120-B IPC at Police Station SIT, Lucknow, naming several senior officials—including the then Commissioner/Registrar, then Chairman, then Managing Directors and then Secretary of the Bank—on the allegation that the qualification change was made to facilitate the appointment of the kith and kin of office bearers. The respondents before the High Court did not dispute that not a single one of the petitioners was chargesheeted in the criminal case.

On 27 April 2019, Mr. M.V.S. Rami Reddy, Principal Secretary, Cooperative Department, addressed a letter to the Commissioner/Registrar, Cooperative, directing cancellation of the appointments of the 50 irregularly appointed Assistant Managers. A follow-up letter of 24 May 2019 from the same officer to the Managing Director instructed him to proceed with cancellation and to file a caveat before the High Court for effective representation. The Board of Directors then resolved on 30 May 2019 to cancel the appointments, authorised the Managing Director to file a caveat, and formally terminated services. The Service Board confirmed the termination by letter dated 4 June 2019. Individual termination orders were issued to each petitioner on 7 June 2019.

How the Bench Reasoned

Justice Rajeev Singh found it undisputed that the appointments were cancelled purely on the direction contained in the Principal Secretary's letter of 27 April 2019. The court noted that the letter contained no allegation or finding of any illegal act by the petitioners themselves. The qualification change had been made by the Registrar-cum-Commissioner, who was the competent authority under Section 120 of the 1965 Act read with Regulation 7 of the 1975 Regulations. The selection process was completed in accordance with that change. The Registrar-cum-Commissioner had categorically stated in a counter affidavit filed in the earlier writ proceedings that the qualification was prescribed in accordance with law.

Examining the sequence of events, the court observed that the Board meeting of 30 May 2019 was convened specifically to implement the Principal Secretary's directive. The resolution passed at that meeting mirrored the language and conclusions of the government letters; it also separately resolved to file a caveat as the Principal Secretary had directed. The Managing Director then passed the formal termination orders. The court found that neither the Managing Committee nor the Managing Director had independently assessed the matter before acting.

The court relied on the Supreme Court's decision in M.P. State Cooperative Bank Limited, Bhopal v. Nanuram Yadav and others, reported in 2007 (8) SCC 264, for the proposition that termination of an employee cannot be carried out merely on the recommendation of a higher authority if there has been no proper application of mind by the appointing authority.

The court also took note of the fact that the criminal proceedings arising from the same inquiry had not proceeded to a chargesheet against the then Commissioner/Registrar, the very officer whose conduct in approving the qualification change was the basis of the government's action. No disciplinary proceeding had been initiated against him either. The petitioners, who had no role in the qualification change, bore the entire consequence.

Outcome

Justice Rajeev Singh allowed both writ petitions and set aside all five impugned orders and decisions dated 27 April 2019, 24 May 2019, 30 May 2019, 4 June 2019 and 7 June 2019. The petitioners are directed to be allowed to resume their duties in the positions they held before the termination orders. The period from the date of termination until resumption of duty is treated as “no work no pay” and will carry no salary entitlement.