Bhagwanrao S/O Ramchandrarao ... vs The State Of Maharashtra Through ...
2006 Latest Caselaw 941 Bom

JUDGMENT

V.R. Kingaonkar, J.

Page 3099

1. Rule. Rule made returnable forthwith and heard finally by consent of the parties.

2. As per case of the petitioners term of the elected members of Vividh Karyakari Seva Sahakari Sanstha Maryadit, Talegaon (Bho), taluka Devni Page 3100 (District Latur) was to end on February 14, 2006. By virtue of Resolution No. 2 adopted in a meeting dated 27th October, 2005, it was decided by the managing body to commence the election process and for such purpose, one of the members by name Trimbak Kishanrao Sali was nominated to act as Election Officer. A proposal was submitted to the Assistant Registrar, Cooperative Societies, Udgir on 28.12.2005 to approve the nomination of the election officer for holding of the elections. It appears that before such proposal was approved by the Assistant Registrar, Co-operative Societies, Udgir-respondent No. 3, a request letter was given to said Shri Trimbak Sali on 30th December, 2005 and he was called upon to immediately declare the election programme and complete the process of election.

2A. According to the petitioners, the election programme was duly published and they were elected unopposed on 20th February, 2006 as members of the Managing Committee of the Co-operative Society. Still, however, by his order dated 10th January, 2006, during the period of said election process, Assistant Registrar - respondent No. 3 passed an order appointing administrator to take over administration of the Respondent No. 4 Co- operative Society by removing the then existing managing committee. The petitioners submit that after declaration of the results of said election, they had called a meeting of the managing committee. In a meeting dated 16th April, 2006 a resolution was passed so as to authorize the Chairman and Vice Chairman along with four other members of the committee to operate the Bank Account and conduct the monetary transactions.

3. The petitioners' case further is that while they were lawfully working as members of the managing committee of the Respondent No. 4 Co- operative Society in question, one Bhagwanrao Gaikwad who happens to be Vice President of the Maharashtra State Congress Committee, forwarded a letter dated 7.2.2006 to the Minister of Co-operation and urged to appoint an administrative committee for management of the affairs of the Respondent No. 4 -Co-operative Society. The Minister for Co-operation sent the letter to the Additional Secretary of the Co-operation Department, Mantralaya, for necessary action. The Addl. Secretary thereupon called for report about eligibility of five members who were named in the letter of Shri Bhagwanrao Gaikwad (Talegaonkar).

4. After receiving report of the Assistant Registrar respondent No. 3, certain directions were given to him by the District Joint Registrar, Co-operative Societies, Latur. In pursuance to such directions, by order dated 19th June, 2006 the Assistant Registrar respondent No. 3 appointed a committee of three (3) members to manage affairs of the said Respondent No. 4 -Co-operative Society. Respondent Nos. 5 to 7 are the said three members who were appointed to look after business of the Respondent No. 4 -Co-operative Society in question. The petitioners allege that the committee of respondent Nos. 5 to 7 is illegally appointed by the Assistant Registrar, Co-operative Societies, Udgir - respondent No. 3 on account of political pressure and without any legal basis. They further alleged that the impugned order dated 19th June, 2006 is wholly unsustainable inasmuch as, it is violative of Section 78(1) of the Maharashtra Co-operative Societies Act, 1960 and further alleged that the Assistant Registrar - respondent No. 3 acted high handedly and without Page 3101 having jurisdiction to appoint such a committee. The petitioners, therefore, impugn the order dated 19th June, 2006 issued by the respondent No. 3 purportedly under Section 78(1)(a)(ii) of Maharashtra Co-operative Societies Act, 1960.

5. Heard learned Counsel Shri Irpatgire for the petitioners, learned Government Pleader Shri N.B. Khandare for the respondents No. 1 to 3 and learned Senior Counsel Shri P.V. Mandlik for respondents No. 5 to 7.

6. Crucial question involved in the petition is: Whether the appointment of the committee comprising of respondents No. 5 to 7 by virtue of the impugned order dated 19th June, 2006 is legal, proper and sustainable?

7. To clear the deck, it may be mentioned that the dispute regarding propriety and legality of the elections of the petitioners need not be gone into while deciding the issue regarding validity of the appointments of the respondents No. 5 to 7. The respondents have disputed status of the petitioners as elected members of the managing committee. It appears that a separate election dispute No. 42 of 2006 is raised by other two members and enquiry thereof is pending before the learned Co-operative Judge at Nanded. The respondents have alleged that without prior approval of the nomination of the Election Officer, hastily the so called election process was commenced in order to only make a show of such election though it was not actually held in accordance with the regular norms. They further submitted that the petitioners could not have transacted any business of the Respondent No. 4 Co- operative Society since an administrator was duly appointed to manage functioning of the Co-operative Society. It is contended that the election programme was not properly published and is said to have been published in a weekly called "Nav Nirman" dated 5th January, 2006 which has no much circulation and is not being regularly published. In other words it is the contention of the respondents that the election was conducted in a hush-hush manner and the attempt of the petitioners was to continue exercise of power over the Respondent No. 4 - Co-operative Society by hook or crook. These contentions are not required to be considered in the present matter. For, the only challenge put forth by the petitioners is to the appointment of the respondent Nos. 5 to 7 by virtue of the impugned order dated 19th June, 2006.

8. Learned Counsel Shri A.N. Irpatgire would submit that there are no reasons recorded by the Assistant Registrar -respondent No. 3 while passing the impugned order. He invited my attention to the text of the impugned order and contended that the discretionary power is misused by the respondent No. 3 only due to political influence exercised by the Minister for Co-operation at the behest of Shri Bhagwanrao Gaikwad, who is Vice President of the Maharashtra State Congress Committee. The learned Counsel Shri Irpatgire - would submit that discretion of the respondent No. 3 -Assistant Registrar is completely shadowed due to the instructions given to him by the Additional Secretary of the Co-operation Department and the respondent No. 2 District Deputy Registrar, Co-operative Societies, Latur. He contended that the impugned order is rendered invalid due to political interference and in view of the absence of the grounds envisaged under Section 78(1)(a)(ii) of the Maharashtra Page 3102 Co-operative Societies Act, 1960. Hence, learned Counsel Shri Irpatgire urged to quash the impugned order.

9. As against this, learned Government Pleader Shri Khandare strenuously argued that the petitioners have no locus standi to challenge the appointment of the committee. He contended that an alternative and efficacious remedy of appeal and revision is available under the provisions of the Maharashtra Co-operative Societies Act, 1960 and as such, the writ petition is not maintainable. He argued that the writ petition is not maintainable since several disputed questions of facts have been raised and are required to be addressed. He would further submit that the petitioners have suppressed material facts and hence the petition should be dismissed. According to learned Government Pleader Shri Khandare and also learned Senior Counsel Shri Mandlik, the only purpose of the petitioners is to continue their management in spite of the fact that the affairs of the Respondent No. 4 - Co-operative Society were taken over by the Administrator before the respondent Nos. 5 to 7 were appointed as members of the committee in question. The learned Government Pleader Shri Khandare urged to dismiss the petition in view of the misconduct of the petitioners, particularly because they indulged in making a farce of the election process though the administrator was in charge of the affairs of respondent No. 4 - Co-operative Society.

10. Section 78(1)(a)(ii) of the Maharashtra Co-operative Societies Act, 1960 reads as follows:

78. Power of removal of committee or member thereof. - (1) If, in the opinion of the Registrar, the committee of any society or any member of such committee makes default, or is negligent in the performance of the duties imposed on it or him by this Act or the rules or the bye-laws, or commits any act which is prejudicial to the interests of the society or its members, or willfully disobeys directions issued by the State Government, or by the Registrar for the purpose of securing proper implementation of co-operative policy and development programme approved or undertaken by the State Government or is otherwise not discharging its or his functions properly and diligently or where a situation has arisen in which the committee or any member of such committee refuses or has ceased to discharge its or his functions and diligently and the business of the society has or is likely to come to a stand-still, or where any member of such committee stands disqualified by or under this Act for being a member, the Registrar may, after giving the committee or the member, as the case may be, an opportunity of stating its or his objections, if any, within 15 days from the date of receipt of notice and after consultation with the federal society to which the society is affiliated, by order

(a)(i) remove the committee, and

(ii) appoint a committee consisting of three or more members (who shall not be the members of the committees so removed) of the society in its place, or appoint one or more Administrators who need not be members of the society, but who shall not be the members of the committee so removed to manage the affairs of the society for a period not exceeding six months, which period, at the discretion of the Registrar, be extended by a further period not exceeding three months so, however, that the total period does not exceed Page 3103 nine months in the aggregate:

Provided that, the Registrar shall have the power to change the committee or any member thereof or the administrator or administrators appointed under paragraph (ii) at his discretion even before the expiry of the period specified in the order made under this sub-section;

11. A plain reading of Section 78(1)(a)(ii) would make it amply clear that the Registrar is first required to formulate an opinion that the committee of any society or any member of such committee has made a default or there is negligence in the performance of the duties imposed on the committee or any member thereof, as contemplated under the said Act or the Rules or the Bye-laws. Another ground on which removal of the committee or members of the committee can be ordered and replacement of a new committee can be directed is that the members of the committee if are found to have committed any act which is prejudicial to the interest of the society or its members or they willfully disobey the directions given by the State Government or by the Registrar then such appointment can be made. There are some other instances when the committee can be appointed. Needless to say, for making appointment of a committee as provided under sub-clause (1)(a)(iii) it is essential that the Registrar must form an opinion that such appointment is essential owing to the reasons stated in sub-clause (1). Another important legal aspect is that the appointment can be made only after giving an opportunity to the duly elected members of the committee of stating their objections, if any, within fifteen (15) days from the date of receipt of the notice.

12. Further more, consultation with the federal society to which the society is affiliated is also contemplated under sub-clause (1). Needless to say, the exercise of the power under Section 78(1)(a)(ii) is not unbridled and the Registrar cannot arbitrarily exercise such power without their being sufficient reason to do so. The Registrar is required to follow procedure enumerated in Rule 64 of the Maharashtra Co-operative Societies Rules, 1961 before making appointment of a new committee. In the present case, the petitioners, rightly or wrongly, had staked their claims as elected members of the managing committee.

13. It appears that the respondent No. 3 Assistant Registrar had appointed one Shri S.A. Pangu, Officer of the Co-operative Department, as administrator to manage the affairs of the Respondent No. 4 -Co-operative Society as per order dated 10th January, 2006. The respondents have placed on record a letter dated 31.7.2006 issued by the Latur District Central Co-operative Bank Ltd., Talegaon Branch, which indicates that all the monetary transactions were operated by the administrator after his such appointment.

14. The petitioners claim that they are elected unopposed. There are large number of voters and it is rather difficult to countenance correctness of the election process when the administrator was appointed and had taken over charge of the affairs of the Respondent No. 4 - Co-operative Society. It is significant to note that the petitioners never challenged legality of the order of appointment of the administrator. There is good deal of substance in the contention of the respondents that the petitioners have not approached the Court with clean hands. Still, however, it cannot be said that they have not disclosed the true facts and have suppressed any material fact. For, in Page 3104 the petition itself they have made it clear that the appointment of the administrator was effected by order dated 10th January, 2006 issued by the respondent No. 3. The relevant averments in paragraph 6 of the petition are thus:

6. The respondent No. 3 during the election of Respondent No. 4 had passed the order dated 10.01.2006 Under Section 78 of the Maharashtra Co-operative Societies Act, 1960 and removed the then Managing Committee of the respondent No. 4 and appointed Administrator on the respondent No. 4 society.

15. So, it is difficult to say that the petitioners have suppressed any material fact at the time of filing the present petition.

16. As stated earlier, the only issue to be determined in the present petition is as to whether the appointment of the three members committee is legal, proper and sustainable. The other sidelining issues need not be brought within the ambit of the present petition. A perusal of copy of the letter dated 7th February,l 2006 sent by Bhagwanrao Gaikwad, Vice President of the Maharashtra Pradesh Congress Committee, would show that he was aware of the fact that on 10th January, 2006 the administrator was appointed to manage the affairs of the Respondent No. 4 Co- operative Society in question. He stated in the letter dated 7th February, 2006 that a committee of five members named in the letter be appointed. His letter was endorsed by the concerned Minister for Co-operation and as such, the Additional Secretary called a detailed report regarding eligibility of the five persons named in the letter for their appointment as members of the committee. Since there was no immediate response to the first letter of the Additional Secretary, another letter dated 8th May, 2006 was issued by way of reminder and the report was directed to be submitted immediately. The report was accordingly submitted on 3.7.2006 by the Assistant Registrar respondent No. 3 to the District Deputy Registrar, Cooperative Societies. The respondent No. 3 Assistant Registrar reported that two of the suggested members were ineligible whereas three of them were eligible. Learned Counsel Shri Irpatgire states that amongst three eligible members, respondent No. 5 Sou. Kalindabai Bhagwanrao Gaikwad is the wife of Bhagwanrao Gaikwad at whose instance the action to appoint a committee was commenced and the impugned order appears to have been passed. She was appointed as Chairman of the committee.

16. Further correspondence would make it amply clear that instructions were given by the higher authorities to the Assistant Registrar and as such, the respondents No. 5 to 7 were appointed through the impugned order. The text of the impugned order (P.63) would show that the Assistant Registrar did not apply his mind. In the impugned order itself the Assistant Registrar has clearly mentioned that as per the instructions received from the office of the Additional Secretary and District Deputy Registrar of Co-operative Societies, i.e. respondent No. 2, the committee was appointed.

17. The impugned order itself is enough to show that the respondent No. 3 -Assistant Registrar acted "under instructions" of the higher authorities. It is rightly submitted by learned Counsel Shri Irpatgire that there was no efficacious alternative remedy available because the higher authorities were also parties to the process of constituting the committee of respondents No. 5 Page 3105 to 7. The writ petition cannot be dismissed on the ground that alternative remedy by way of appeal under Section 152 of the Maharashtra Co-operative Societies Act, 1960 was available to the petitioners inasmuch as, there was legitimate apprehension in the minds of the petitioners that the appellate authority would not have taken any different view and it was futile to prefer any revision thereafter. It is well settled that rule of alternative remedy is not a rigid and fixed rule which may disentitle the petitioners from seeking remedy by way of writ petition.

18. The availability of alternative remedy by itself would not be a sufficient ground to relegate the petitioners to such remedy if it is found that their apprehension regarding efficaciousness of the remedy is well founded. As mentioned earlier, the Additional Secretary, Co-operation Department, as well as the District Deputy Registrar (respondent No. 2) gave instructions to the Assistant Registrar and hence, the impugned order was issued. If that be so, then the apprehension of the petitioners regarding the alternative remedy being of no much avail to them is quite justified. They cannot be pushed to adopt such alternative remedy when it is probable that the end product would meet adverse civil consequences and they will have to just undergo a formality of exhausting such alternative remedy. In case of U.P. State Spg. Co. Ltd. v. R.S. Pandey the Apex Court has held:

There are two well-recognised exceptions to the doctrine of exhaustion of statutory remedies. First is, when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. Moreover where the proceedings themselves are an abuse of process of law the High Court in an appropriate case can entertain a writ petition. (Para 16)

19. In the case in hand the fact situation is that there appears an abuse of process of law since without independently using his discretion, available under Section 78(1)(a)(ii), the Assistant Registrar has passed the impugned order as instructed or to say bluntly "as dictated" by the higher authorities. Consequently, inspite of there being provision for appeal under Section 152 of Maharashtra Co-operative Societies Act, 1960 I am inclined to entertain the writ petition and hence, the argument that due to availability of alternative remedy, is rejected.

20. The learned Counsel Shri Mandlik would submit that the petition is liable to be dismissed for the reason that several disputed facts are involved. Similar is the contention of the learned Government Pleader Shri Khandare. Both of them submitted that the election of the petitioners itself is a disputed fact. They would submit that the subsequent resolutions of the managing committee as well as the transactions of the administrator are disputed questions of facts. According to them, when several disputed questions of Page 3106 facts are involved, the petition deserves to be dismissed. I find it difficult to accept such contentions. The reason is not far to seek. The questions posed above, in fact, are not involved in the matter. Herein, the dispute lies in a narrow compass regarding the propriety and legality of the impugned order. The question to be addressed is - whether placing of the said three members i.e. respondent Nos. 5 to 7 - in the reins of the respondent No. 4 - Cooperative Society and making them managers of all the affairs thereof by a stroke of pen is legal. No other controversial questions of fact need examination. The objection on this ground is, therefore, untenable and stands rejected.

21. The petitioners have alleged that during the election process the respondent No. 3 issued order dated 10th January, 2006 under Section 78 of the Maharashtra Co-operative Societies Act, 1960 and removed the then managing committee. They clearly stated that the administrator was appointed. It need not be reiterated that the petitioners did not challenge appointment of the administrator in the present petition and hence, the order dated 10th January, 2006 falls outside the scope of the present petition. It appears from the record that the Administrator actually took charge of the Respondent No. 4 - Co-operative Society on 18th January, 2006 and was functioning as such before the impugned appointment of the three members committee. The term of the administrator could be extended if the Assistant Registrar was of the opinion that smooth functioning of the Respondent No. 4 - Co-operative Society may be ensured by doing so. No notice was given to anyone. Nobody was heard regarding appointment of the three members committee. The Chairman of the committee, namely, Sou. Kalindabai Bhagwanrao Gaikwad happens to be wife of the Vice President of the Congress Committee Bhagwanrao Gaikwad, who sought appointment of such a committee and at whose instance the appointment of the committee took momentum. The principles of natural justice are violated in view of the fact that without appropriate enquiry such appointment was made and the wife of the complainant was bestowed with powers of the chairman. Hence the impugned order is unsustainable and liable to be quashed.

22. Though the petitioners have alleged that there was political influence of Hon'ble Minister for Co-operation yet there is hardly any substratum placed on record to substantiate such allegation. The only thing the Honourable Minister appears to have done is that he endorsed the letter issued by Bhagwanrao Gaikwad, Vice President of the State Congress Committee and forwarded the same to the co-operation department. He did not give any specific recommendation on the proposal mooted in the letter of the Vice President - Bhagwanrao Gaikwad. The petitioners could not pinpoint any role of the Hon'ble Minister for Co-operation in giving impetus to the impugned order. It cannot be presumed that the impugned order is the outcome of any influence of the Hon'ble Minister for Co-operation without there being certain reliable evidence in this behalf. No such finding on surmises can be reached. It is probable that the action was taken on assumptive prevarication at the secretary level. Considering the available record, I find it difficult to countenance the argument that the impugned order is outcome of political pressure.

23. The learned Counsel Shri Irpatgire submitted that the duly constituted managing committee of the petitioners had taken some policy decisions and Page 3107 they could not have been dislodged by making appointment of the three members committee. The factual aspect regarding validity of elections of the petitioners and the so called resolutions passed by them is not being examined in the present petition. In fact, much can be said about conduct of the petitioners and the haste made by them in proceeding ahead with the election programme although there was no approval granted by the Assistant Registrar to the proposed nomination of the election officer. Their acts are also not so much so fair.

24. The learned Senior Counsel Shri Mandlik invited my attention to the fact that the Secretary of the respondent No. 4 -Cooperative Society has been suspended for alleged act of manoeuvring the proceedings of the meeting dated 10th April, 2006 and other documents prepared at the instance of the petitioners. His argument is that the petitioners have acted high handedly and in collusion with the secretary of the Respondent No. 4 - Co-operative Society and hence they have no right, whatsoever, to seek any relief in the present petition. It is also argued that there is no breach of any fundamental right of the petitioners and hence the writ petition should not be entertained. I do not agree. The petitioners may not have any right as elected members or members of the managing committee of the Respondent No. 4 - Co-operative Society. Yet being the members of the said society they can move this Court so as to rectify the administrative or quasi judicial action which amounts to abuse of the powers. The impugned order would cause adverse civil consequences to them. Hence they have locus to challenge the said order.

25. The learned Counsel Shri Irpatgire seeks to rely upon certain observations in Yusuf Khan Mahboob Khan Pathan v. Riazuddin Allauddin and Ors. 2001(2) Mh.L.J. 408. A Single Bench of this Court was pleased to hold that where the order cannot stand test of judicial scrutiny, since it was passed by the Divisional Sub Registrar of Cooperative Societies without following principles of natural justice and was totally unsustainable, the objection that the writ petition should not he entertained due to availability of alternative remedy, deserves to be rejected. The learned Counsel Shri Irpatgire would further rely upon Chandrika Jha v. State of Bihar and Ors. . This authority deals with the question of abuse of the legal process. In the given case, the Chief Minister had issued orders for extension of the term of the first Board of Director, by usurping the statutory function of the Registrar. This authority, with due respect, is not of much help to the petitioners inasmuch as, the Hon'ble Minister for Co-operation has not passed any order. Then, learned Counsel Shri Irpatgire would further rely upon some observations in Tarlochan Dev Sharma v. State of Punjab and Ors. . It has been observed by the Apex Court that in a democracy governed by rule of law, once elected to an office in a democratic institution, the incumbent is entitled to hold the office for the term for which he has been elected unless his election is set aside by a prescribed procedure known to law.

Page 3108

26. All said and done, the impugned order regarding appointment of the committee of the respondents No. 5 to 7 is without any legal substratum. The internal correspondence between the concerned authorities and the recitals of the impugned order, considered together, would reflect non application of judicial mind by the Assistant Registrar and his meek surrender to the instructions of the higher authorities. The Assistant Registrar appears to have echoed to his master's voice instead of taking any independent decision. I am at pains to note that the impugned order is no short of abuse of the legal process. Consequently, the impugned order will have to be quashed. Still, however, I do not think it proper to give any clean chit to the petitioners and allow them to manage the affairs of the Respondent No. 4 -Co-operative Society unless the election dispute is determined in their favour. I think that the appointed administrator shall be allowed to function until the election dispute is determined and in the mean while, tentative election programme is required to be prepared and proceeded with up to the stage of casting the votes. For, an equitable arrangement is essential in the interregnum period so as to meet the ends of justice.

27. In the result, the petition is partly allowed. The impugned order is quashed. The status quo ante shall be maintained and the appointed administrator should take charge of the Respondent No. 4 -Co-operative Society immediately. He shall report compliance of this direction to the Registrar of this Court within one week from the date of this order. He shall prepare tentative Election Programme for the elections of the managing committee members, including Chairman and other members for the respondent No. 4 - Cooperative Society, within a period of two weeks and shall proceed with the elections which shall be conducted up to the stage of casting the votes. The Election Programme should be so prepared that the stage of casting the votes would be reached before 15th of January, 2007. In the mean while, the Co-operative Court at Nanded is directed to expedite final hearing of the election dispute raised by Malba s/o Ramrao Ghonse and another (Election Dispute No. 42/2006) and to decide the same, as far as possible, within a period of three (3) months. The Administrator shall arrange for tentative Election Programme with a clear notice to all the concerned that the elections shall be subject to the result of election dispute mentioned above. The final results of the election be not declared without leave of this Court. The Administrator may seek further directions regarding extension of time, if so required. Rule made absolute partly. No order as to costs.