‘Case of Hurt Ego’: Madhya Pradesh High Court Quashes Suspension of Cooperative Bank CEO | Labels Action Politically Motivated After Refusal to MLA’s Transfer Demand
Sanchayita Lahkar
The High Court of Madhya Pradesh at Jabalpur, Single Bench of Justice Vivek Jain held that the suspension order issued against a Chief Executive Officer of a District Central Cooperative Bank was passed in an arbitrary and biased manner influenced by political pressure. The Court found that the suspension, allegedly based on misconduct involving a conversation with elected representatives, was primarily instigated by three Members of the Legislative Assembly and subsequently advanced through official channels at the behest of the Minister of Cooperatives. The Court stated that the suspension was a misuse of administrative power and lacked legal justification, directing that the impugned suspension order be quashed. It further ordered the immediate reinstatement of the officer with all service benefits for the suspension period.
The Court also determined that the alternative statutory remedies available to the petitioner under the M.P. Cooperative Societies Act, 1960, were not efficacious given the circumstances surrounding the suspension. It stated that the principle that "justice must not only be done, but must also appear to be done" must be upheld, particularly when there is an apparent likelihood of bias.
The petitioner, an officer serving as Chief Executive Officer of a District Central Cooperative Bank in Sidhi, challenged his suspension which cited misconduct on grounds of alleged misbehavior and the use of unparliamentary language during a phone conversation with a female Member of Legislative Assembly (MLA). The respondent State authorities stated that the petitioner’s conduct violated Clause 47 of the Bank’s Service Regulations.
According to the petitioner, his suspension followed a legitimate administrative action: the transfer of one Ashok Sharma, Clerk, from Gandhi Gram Branch to Sidhi Branch. The petitioner claimed he was acting within his authority and jurisdiction. The petitioner contended that the MLA objected to the transfer as it concerned an employee posted within her assembly area. The MLA allegedly scolded the petitioner over the phone and demanded that the order be revoked. The petitioner maintained that he explained his reasons and acted within his statutory powers.
Soon after the conversation, a complaint letter was sent on the MLA’s letterhead, co-signed by two other MLAs, alleging misbehavior and indecent conduct on the petitioner’s part. The letter was addressed to the In-charge Minister of the District, urging removal of the petitioner and disciplinary action.
The State contended that the MLA’s intervention was permissible, stating that people's representatives are entitled to communicate with officers under their jurisdiction to bring to light issues of governance, including matters relating to transfers. It further claimed that the suspension order was part of a routine administrative process and did not result from political pressure.
The State raised a preliminary objection regarding the maintainability of the writ petition, arguing that an alternative statutory remedy was available to the petitioner under Section 55(2) and Section 77(14) of the M.P. Cooperative Societies Act, 1960. Under Section 55(2), the Joint Registrar has authority over disciplinary issues, while Section 77(14) vests the M.P. State Cooperative Tribunal with supervisory powers.
The petitioner submitted that the remedy under Section 55(2) was ineffective because the Joint Registrar, as a subordinate officer under the Cooperative Department, might be influenced by the Cooperative Minister, who had approved the suspension. Similarly, the petitioner questioned the independence of the Tribunal, asserting that the Chairman and Members were appointed and eligible for reappointment at the discretion of the State Government.
The petitioner stated that the entire process leading to his suspension was influenced by elected representatives due to his refusal to rescind a transfer order. He submitted that the complaint was not based on any procedural or performance-related issue but instead reflected the MLA’s personal displeasure.
On reviewing the materials, the Court examined the complaint letter dated 05.06.2025 signed by three MLAs, the note sheet initiated by the In-charge Minister, and the subsequent endorsements by the Cooperative Minister and senior officials. It noted that no specific indecent words had been quoted in the note sheet. The quoted portion attributed to the petitioner did not, according to the Court, constitute indecency.
The Court recorded: "It is settled in law that justice should not only be done, but should also appear to be done. It is settled in law that not only bias, but also likelihood of bias incapacitates an authority."
The Court addressed the issue of alternative remedy, stating: "Though alternative remedy lies under Section 55(2) of the Act of 1960, once in the present case, the suspension has been demanded by three MLAs and proposal forwarded by the In-charge Minister of the District to the Cooperative Minister of the State... it cannot be said that the Joint Registrar by exercising powers under Section 55(2) would not be influenced."
Regarding the statutory Tribunal, the Court stated: "The Chairman and members, though are appointed for a fixed term, they can always be reappointed by the State Government. Once the State Government is retaining itself the power to re-appoint... it cannot be said that the Chairman and members can freely pass orders against the wishes of the Departmental Minister."
The Court cited Ashok Kumar Yadav v. State of Haryana, noting: "What is objectionable in such a case is not that the decision is actually tainted with bias but that the circumstances are such as to create a reasonable apprehension... that there is a likelihood of bias affecting the decision."
On the question of misconduct, the Court noted: "The language which is quoted in the note sheet does not amount to any indecency. The petitioner was working as Chief Executive Officer... transferred an officer within the district, within his jurisdiction and within his authority."
The Court observed the sequence of actions: "The MLAs of the district were prevailing the petitioner to transfer a petty employee... when the petitioner refused to buckle under the pressure... this led to the entire unpleasant institution."
It further stated: "It is not the case of espousing the cause of public as has been projected before this Court. Rather it is a case of espousing the cause of a Clerk of Bank and pressuring the CEO of the bank for cancelling the transfer."
On the propriety of the elected representative's conduct, the Court referred to Mohd. Maqsood Ali vs. State of U.P., stating: "There is no presumption that transfers at the instance of MP or MLA would be vitiated."
However, the Court distinguished the present case, stating: "This is not a case of an MP or MLA bringing to notice the public grievances... It was the case where the public representative was projecting the cause of single employee."
The Court directed: "Consequently, the order Annexure P-1 suspending the petitioner is held to be an order passed in exercise of excessive powers and actuated by bias and at behest of MLA and the MLA having over reached her jurisdiction to bring the just grievances of public to notice of the bank authority."
It held that: "The impugned suspension order deserves to be and is hereby quashed."
Further, the Court ordered: "The petitioner will be reinstated forthwith with all benefits for the suspension period."
Petition was allowed.
Advocates Representing the Parties:
For the Petitioners: Shri Anil Lala – Advocate
For the Respondents: Shri Prashant Singh – Advocate General with Shri Kapil Duggal – Advocate
Case Title: Rajesh Raikwar v. State of M.P. and Others
Case Number: WP-20531-2025
Bench: Justice Vivek Jain
