J&K Govt Can Appoint Interim Managing Director Of Cooperative Bank Under Supervisory Powers: High Court

The High Court of Jammu & Kashmir and Ladakh has held that the Government is vested with supervisory and control powers over a Cooperative Credit Structure Society under Section 32A of the Jammu and Kashmir Cooperative Societies Act, 1989 and, in that capacity, can make an interim arrangement for discharging the functions of the Managing Director.The Court was hearing an application seeking stay of Government Order by which the additional charge of Managing Director of the Jammu and Kashmir Cooperative Bank was assigned to a senior officer of the Bank pending constitution of an elected Board of Directors.Justice Sanjay Dhar observed, “.. Prima facie, it does appear that the Government is vested with jurisdiction of supervision and control over a Cooperative Credit Structure Society and in that capacity the Government has the power to make an interim arrangement for discharging the functions of a Managing Director of the respondent Bank.”The petitioner, Mohammad Latief Dar, had been appointed as Chief Executive Officer-cum-Managing Director of the Jammu and Kashmir Cooperative Bank on April 1, 2017. In 2020, he was removed from the position and attached to the office of the Divisional Commissioner, Kashmir. Though he was reinstated in 2021, the reinstatement order stipulated that he would not be assigned any sensitive responsibilities and would only handle specified non-sensitive portfolios. The petitioner challenged the Government's subsequent attempts to appoint interim Managing Directors of the Bank. In an earlier round of litigation, the Court had quashed a Government Order by which another officer had been appointed as interim Managing Director, holding that the Government lacked authority to make such an appointment. That judgment had attained finality. Despite this, the Government issued the impugned order dated April 15, 2026 assigning the additional charge of Managing Director to Ms. Shabana Buch, stated to be the senior-most officer in the Bank's hierarchy. The petitioner contended that the order was beyond the Government's jurisdiction and constituted an attempt to overreach the earlier judgment. The Government defended the order by submitting that the Bank was functioning without either a nominated or elected Board of Directors and was facing an administrative vacuum. In such circumstances, it was necessary to ensure continuity in day-to-day operations and governance. Court's Observations:The Court noted that the petitioner's reinstatement in 2021 was expressly conditional and that the order prohibiting him from handling sensitive assignments continued to remain in force. Since the office of Managing Director inherently involved sensitive functions, the petitioner could not, prima facie, claim a right to resume full charge of that office, the Court underscored. Examining Section 32A of the Jammu and Kashmir Cooperative Societies Act, the Court observed that although Cooperative Credit Structure Societies enjoy autonomy in financial and internal administrative matters, such autonomy is expressly made subject to the “overall supervision and control of the Government.” The Court held, “.. The Government, in exercise of its power of supervision and control, prima facie, was well within its jurisdiction to make an interim arrangement to take care of the sensitive functions that are to be discharged by a Managing Director.” Addressing the petitioner's reliance on the earlier judgment quashing a similar appointment, the Court observed that Section 32A had not been brought to the notice of the Coordinate Bench when that judgment was delivered. It held that a judgment rendered in ignorance of a relevant statutory provision may be treated as per incuriam and therefore not binding as a precedent. The Court also emphasized that the impugned order did not induct an outsider into the Bank's management. Instead, the additional charge had been assigned to a senior officer already serving within the respondent Bank, thereby minimizing interference with the Bank's autonomy in staffing and posting matters. At the same time, the Court noted that an important question regarding the precise scope and extent of the Government's supervisory powers under Section 32A vis-a-vis the autonomy of Cooperative Credit Structure Societies would require detailed examination at the final hearing of the writ petition. The High Court thus held that, prima facie, Section 32A of the Jammu and Kashmir Cooperative Societies Act empowers the Government to make an interim arrangement for discharge of the functions of Managing Director of a Cooperative Bank in the exercise of its supervisory and control powers, particularly where the Bank is functioning without a Board of Directors and the petitioner is barred from handling sensitive responsibilities.Finding no prima facie illegality in the impugned Government order, the Court dismissed the application seeking interim stay, admitted the writ petition to hearing, and directed that the matter ...

J&K Govt Can Appoint Interim Managing Director Of Cooperative Bank Under Supervisory Powers: High Court

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J&K Govt Can Appoint Interim Managing Director Of Cooperative Bank Under Supervisory Powers: High Court

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