JUDGMENT S.K. Shah, J.
1. Rule returnable forthwith and heard finally with the consent of the parties.
2. The Petitioners have filed this writ petition under Articles 226 and 227 of the Constitution of India challenging the Order passed by the Respondent No. 1 on 9.3.2000 dismissing the Petitioners' appeal against the Order of the Additional Registrar, Co-operative Society (Administration), Maharashtra Stale, Pune dated 23.6.1999 whereby the Additional Registrar held the petitioners to be disqualified from becoming the members of the Managing Committee of the Respondent Co-operative Society.
3. The briefly stated facts leading to this writ petition are as under:
Nagrik Sahakari Rugnalaya and Research Centre Ltd., is a Co-operative Society duly registered under the provisions of the Maharashtra Cooperative Societies Act, 1960 having registration No. NGP/GNL-26/1970, situated at North Ambazari Road, Nagpur. The Petitioners are the Doctors by Profession and are practising at Nagpur having their own independent practice and establishments. The Respondents 3 and 4 are also the Members being share holders of the Society. The eminent Doctors and Social Workers of Nagpur formed the aforesaid Co-operative Society in the year 1970. The Joint Registrar, Co-operative Societies registered and classified the said Society under Section 12(1) read with Rule 10(1) of the Act of 1960.
4. The Society framed its bye-laws in the year 1976. In the year 1982, the Bye-laws were amended. These bye-laws were duly approved by the Divisional Joint Registrar, Co-operative Societies Nagpur. As per the bye-laws, the aims and objects of the Respondent Society is to run a Hospital, Maternity Home, Clinics, Diagnostics Centre, Dispensary, School, College, Hospitals and also to provide housing to the staff members and the employees of the Society. The main object of the Society is to provide to the members and their families the medical facilities for prevention diagnosis and treatment of disease at concessional charges. It is also the object of the Society to give better medical facility to the citizens at a reasonable charge by providing decent hospital, dispensary and other up to date scientific medical and surgical amenities at a concessional rate or in case of needy and poor people without any charge or at subsidised rates.
5. Clause 27 of the Bye-laws provides for composition of Board of Directors for the purpose of management of the Society. The composition of the Board of Directors provided therein includes 9 Directors to be elected by all the members from the Doctor Members who are registered under the Medical Council Act, 1956. The other 7 Directors are to be elected from different categories of constituencies like one from Co-operative Society representative constituency, three lady Directors from the constituency reserved for ladies, one from Scheduled Caste/Scheduled Tribe reserved Constituency and one from Backward Class constituency.
6. In the year 1996, the elections were held for the posts of Directors of the Society. The Petitioners were elected as Directors from Doctors Constituency. Shri Sadavarte was elected as a Director from Non-doctors Constituency. Shri Sadavarte was further elected as a Chairman of the Board. Shri Sadavarte was acting as a Chairman of the Society from 1996 till 17.10.1998 on which day he submitted his resignation of the post of Chairman.
7. There were certain allegations against Shri Sadavarte as a result of which he was forced to resign his post. For the purpose of decision of this writ petition, we are not concerned with those allegations.
8. It is alleged by the petitioners that Shri Sadavarte in connivance with the Respondents 3 and 4 filed a complaint before the Respondent No. 2. The Registrar, Co-operative Societies (Administration), Maharashtra State, Pune under Section 78, read with 73FF of the Maharashtra Co-operative Societies Act, 1960 for disqualifying the Petitioners. In the said complaint, it was alleged that the Petitioners are the specialists and they are running their private clinics and hospitals in the City of Nagpur and that they are also attached to the Respondent Society as Specialist Consultants and thereby they are enjoying the monetary benefits by way of professional fees or charges from the Society. It was further alleged that as a result of this, the Petitioners had incurred disqualification under Section 73FF(1)(e)(v).
9. On 23.6.1999 the Respondent No. 2 decided the complaint and passed an order disqualifying the Petitioners for being Directors of the Respondent Society by virtue of the provisions of Section 73FF(1)(e)(v) of the Act, 1960.
10. Being aggrieved by the said Order passed by Respondent No. 2, the Petitioners preferred an Appeal before the Respondent No. 1 i.e. Ministry for Co-operation under Section 152 of the Act, 1960. It, however, appears that with the consent of the parties and in view of the provisions of Rule 105 of the Co-operative Rules, 1961, the powers to deal with this Appeal having been invested with the Secretary of the Department of Co-operation, the Appeal came to be transferred to the Secretary of the said Department. The Secretary of the said Department passed an order on 9th March, 2000 dismissing the appeal filed by the Petitioners and confirmed the order passed by the Additional Registrar, Co-operative Society on 23.6.1999. The Secretary observed that though the Petitioners were carrying their independent profession, the word business used in Section 73FF includes profession and, therefore, there was similarity in nature of business carried on by the Society and the private hospitals run by the Petitioners, as a result of which the Petitioners had incurred disqualification under Section 73FF. The Secretary also further observed that the business of the Society and the business carried on by the Petitioners being of the same nature, it was bound to create conflict of interest between two and, therefore, the provisions of Section 73FF are attracted and the Petitioners incurred disqualification. It is this order which is impugned in the present writ petition.
11. The learned Counsel for the Petitioners contended that the Doctor's profession cannot be termed and styled as business within the meaning and terminology of Section 73FF of the Act. There is a fundamental distinction between "Business" and "Profession". The "Business" is a profit earning activity and the "Profession" implies a personal intellectual skill coupled with manual skill. It is contended that the profession carried by the Petitioners as Medical Practitioners cannot be termed as 'Business' and cannot be said to be included by the term 'business' used in the provision of Section 73FF of the Act. He further contended that the business carried on by the Society was to provide medical facilities to the family members of the Members of the Society and public at large at cheaper rate and without any charge to the poor and needy persons. Such is not a business carried on by the Petitioners when they are pursuing their own private practice as Medical Practitioners. He also further contended that by virtue of the second proviso of the Bye-law 12, the persons who are qualified to be the members of the Society are the persons having professional or business interest in the area of operation of the Society. The Petitioners carrying on their practice in the area of operation of the Society, therefore, cannot be disqualified on that count. It is, therefore, contended that the order passed by the Respondent No. 1 Secretary disqualifying the Petitioners to be the members of the Committee is not sustainable and the same needs to be set aside.
12. As against this, the learned Counsel for the Respondents contended that the Orders passed by both the authorities below are legal and proper and need no interference by this Court. He also contended that the Petitioners were making profit out of their services rendered in the Hospital which is their business in their individual practice also and, therefore, it is conflicting with the business of the Society and, therefore, by virtue of the provisions of Section 73FF(1)(v) of the Act, they are disqualified to be the members of the Board of Directors or Managing Committee.
13. As regards the last contention raised on behalf of the Respondents, there is no evidence on record nor that question was raised and considered by any of the two authorities below. Therefore, that needs no consideration in this petition. Admittedly, every doctor who renders his services in the Society's Hospital is paid his concessional charges as per the provisions of bye-laws. That cannot mean that such Doctors are profiteering.
14. For the purpose of seeing whether the Petitioners are disqualified to be the members of the Board or the Managing Committee, it is necessary to refer the provisions of Section 73FF(1)(v) of the Act. The relevant provision reads as under:
Section 73FF. Disqualification for membership of committee.-(1) Without prejudice to the other provisions of this Act or the rules made thereunder in relation to the disqualification of being member of a committee, no person shall be eligible for being appointed, nominated, elected, co-opted or, for being a member of a committee, if he-
(i)
(ii)
(iii)
(iv)
(v) carries on business of the kind carried on by the society either in his name or in the name of any member of his family or he or any member of his family is a partner in a firm or a director in a company which carries on business of the kind carried on by the society.
This provision, therefore, makes it clear that no person can be eligible for being appointed, nominated, elected, co-opted for being a member of the Committee, if he carries on business of the kind carried on by the Society. By virtue of the provisions of Section 78 of the Act, such person can be removed by the Officer empowered under the said provisions viz. The Registrar.
15. Thus, it will be necessary to see if the Petitioners who are admittedly carrying on their own medical practice in the area of operation of the Society, can be said to be disqualified under the aforesaid provisions. For that purpose, it will be necessary to see whether the petitioners are carrying on business of the kind carried on by the Society. If the answer is yes, the Petitioners would obviously be disqualified from being the Members of the Committee or Board of Directors.
16. For that purpose, it would be necessary to consider what is the business of the Society. The business of the Society is clarified in the Bye-laws which provides for the object of the Society. The relevant objects of the Society which depict the business of the Society, are incorporated in the Bye-law No. 3 of the approved bye-laws of the Society. They are as under:
3(e) - To provide for the members and their families medical facilities for prevention, diagnosis and treatment of disease at concessional charges.
3(f) - To give the citizen better facilities for medical help at a reasonable charge, by providing decent hospitals, dispensary and other up to date scientific medical and surgical amenities.
3(g) - To render medical aid to the needy and poor free of charge or at subsidised rates.
From these objects of the Society, it is clear that the business of the Society is to provide better medical facilities to the family members of the Members of the Society as also to the citizens at concessional and reasonable charges and to the needy and poor either free of charge or at subsidised rates. Thus, the business of the Society is to help the family members of the Members of the Society as also to the citizens and poor and needy persons those who cannot afford to have medical services of the specialist doctors in their private dispensaries or hospitals.
17. It is vehemently submitted on behalf of the Respondents supporting the view taken by the two authorities below including the Secretary of the Co-operation that although the Petitioners are carrying on their medical profession, it is the profit making and the business of the Society is also the same and, therefore, the business carried on by the Petitioners is in conflict with the business carried on by the Society and, therefore, the Petitioners are disqualified from being the members of the Committee.
18. As against this, the learned Counsel for the Petitioners submitted that there is a marked difference between the profession carried on by the Petitioners and the business carried on by the Society.
19. It is necessary to understand the correct meaning of the words used in the aforesaid provisions viz. "carries on business of the kind carried on by the Society". Thus, the member of the Committee who carries on business of the kind carried on by the Society would be disqualified from being the member of the Committee. The word "business" used in this provision, is not used in the ordinary sense of the term business i.e. any commercial activity or profit making activity. Business of the kind carried on by the Society means the activity of the Society which may or may not be the business as understood in common parlance. Thus, whether the Petitioners are carried on profession that has rendered intellectual services would not be material. What would be necessary to be seen is whether the activity carried on by the Petitioners is of the kind carried on by the Society and if the answer is yes, the Petitioners would be disqualified from being Members of the Committee. 1 his view finds support from the observations of the Apex Court in the case of Deccan Merchants Co-operative Bank Ltd. v. Dalichand Jugrqj Jain and Ors. , in which the Apex Court was considering the word "business" used in the provisions of Section 91 of the Maharashtra Co-operative Societies Act. The relevant observations are as under:
In this sub-section the word "business" has been used in a narrower sense and it means the actual trading or commercial or other similar business activity of the society which the society is authorised to enter into under the Act and the Rules and its bye-laws.
20. Since it is undisputed that the Petitioners are also having their own dispensaries or hospitals, it will be necessary to see whether such activities of the Petitioners could be said to be of the kind carried on by the Society. In this regard, it has to be noted that the object of the Hospital run by the Respondent Society as stated above, was to provide medical facilities to the members of the families of the Members of the Society and to the citizens at concessional charges or reasonable charges and also to provide medical facility to the needy and poor either free of charge or at subsidised rates. Although the Petitioners are also having medical practice, there is nothing on record to indicate that they are also providing the medical facility to the members of the families of the Members of the Society or to the citizens at concessional rate or reasonable charges and to provide medical aid to the needy and poor either free of charge or at subsidised rates in absence of such evidence merely because the Petitioners are carrying on their own private medical practice in their own clinic or at Hospital, it cannot be said that such activity is of the kind of the activity carried on by the Society so that the Petitioners could be barred under the provisions of the Section 73FF read with Section 78 of the Act.
21. In this regard it is also to be specifically noted that the membership as provided by Clause 11 of the Bye-laws of the Society is restricted to the Doctor Members and non-Doctor members. It is further pertinent to note that as per Clause 27 of the Bye-laws, the composition of the Board of Directors is of 9 Directors who are elected by all members from Doctor members who are registered as medical practitioners. The other 7 Directors who could be elected on the Board of Directors are from Non-Doctor Members. Thus, the composition of the Board of Directors is of in all 16 Directors of which 9 are from the Doctor constituency and 7 from non-Doctor constituency. It is further to be noted that as per the second proviso to Clause 12 of the Bye-laws, a person who is admitted as a member of the Society must be a person residing in the area of operation of the Society and who is having personal professional or business interest in the area of operation of the Society. From these Bye-laws, it is clear that the persons having professional or business interest in the area of operation of the Society including the Doctors who are carrying on their profession in the area of operation of the Society, can be the Members of the Society. It is the Board of Directors who would be taking policy decision and running Management of the Society. Out of 16 Directors, 9 are required to be from Doctors constituency. Therefore, basically, the hospital which is run by the Respondent Society is run with the help of the Doctors who are having professional interest in the area of operation of the Society. When such are the Directors of the Board and the Members of the Society as per the Bye-laws of the Society, every Member and Director is required to have his profession as a Doctor in the area of operation of the Society. The only thing which prohibits any Member of the Society from becoming the Member of the Committee or Board of Directors is one whose activity would be in conflict with the activity of the Society. Therefore, in absence of any evidence on record as against the Petitioners to show that they are carrying on such business which is of the kind carried on by the Society, they cannot be disqualified by virtue of Section 73FF of the Act. Merely because they are carrying on their own medical profession in their own clinics and hospitals that by ipso facto cannot be said to be the business of the kind carried on by the Society as the term used in Section 73FF of the Act. The people who are unable to pay regular charges of the specialist in their private hospitals alone would go to the Society's hospitals where they can get services of same specialist but at a concessional charges. Others who can afford to pay more would go to the private hospitals. Thus, it is a matter of choice of the people or patients. Therefore, the activity of Petitioners running their private hospitals cannot be said to be in conflict with the activity of the society.
22. Under these circumstances, the view taken by the Respondent No. 1 Secretary (Co-operation) and the Respondent No. 2 Registrar of the Cooperative Societies, is contrary to the provisions of Section 73FF of the Act. The impugned orders passed by the authorities, therefore, are required to be quashed and set aside. The impugned orders are, therefore, quashed and set aside. Rule made absolute in the above terms.