Arun Ganpatrao Dongle & Ors vs State Of Maharashtra & Ors
2012 Latest Caselaw 540 Bom

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                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                              CIVIL APPELLATE SIDE




                                                                                
                          WRIT PETITION NO.11364 OF 2012




                                                        
       Arun Ganpatrao Dongle & Ors.                       ... Petitioners

               Vs.




                                                       
       State of Maharashtra & ors.                        .... Respondents


       Mr.Y.S. Jahagirdar, Sr.Advocate ib Amit B. Borkar for the Petitioners
       Mr.S.K. Shinde, G.P. a/w Ms.S.S. Bhende, AGP, for the Respondent -




                                               
       State
       Mr.S.M. Oak for Respondent No.5
                               ig          CORAM: A.M. KHANWILKAR &
                                                  R.Y. GANOO, JJ.

DATED: 21.12.2012

P.C.:

1. Heard Counsel for the parties.

2. Rule. Rule returnable forthwith, by consent. Learned Government

Pleader waives service on behalf of the Respondents.

3. The relief claimed in this petition is to direct Respondent No.3 to

forthwith publish election programme of Respondent No.5 - Society as

per Rule 16 of the Maharashtra Specified Co-operative Societies

Elections to Committee Rules, 1971 (hereinafter referred to as the 'said

Rules', for the sake of brevity).

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4. The admitted facts are that the term of the present Managing

Committee of Respondent No.5 - Society was to expire on 23.11.2012.

In anticipation thereof, the process of preparation of voters' list was

commenced and it culminated with publication of final voters' list on

18.7.2012. As per the provisions of the Maharashtra Cooperative

Societies Act, 1960 (hereinafter referred to as the 'said Act', for brevity)

and the Rules framed thereunder, as applicable to the Specified

Societies, the outgoing Managing Committee is under an obligation to

ensure that the election process for installation of the newly elected

Managing Committee in Office in its place, is completed before the

expiry of its term of office.

5. After publication of final voters list, the election programme could

be published only after expiry of 30 days therefrom. However, before

the election programme could be announced, the State Government in

exercise of power under enabling provisions, issued notification

postponing the elections of all the cooperative societies in the State of

Maharashtra till 30.11.2012, due to drought condition. As a result, the

outgoing Managing Committee of Respondent No.5 society could not

take any further steps in the matter. Further, even after the extended

period was over, the Collector, Kolhapur did not declare the election

programme, inspite of representation made by the petitioners in that

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behalf, on the specious ground that it was not open to proceed with the

election programme until the existing law was amended by the State

Legislature to bring it on par with the provisions of Constitution (Ninety-

Seventh Amendment) Act, 2011 (hereafter referred to as the Act of 2011,

for brevity), which has come into force w.e.f. 15.2.2012.

6. It appears that the Collector acted upon the directions/instructions

issued by the Commissioner of Cooperation and Registrar of

Cooperative Societies, Maharashtra State, Pune, in exercise of powers

u/s 79 of the Act, dated on 30.11.2012. The same envisage that the

Cooperative societies, where elections are due, should not be

conducted until the Bye-Laws of the Society are amended before

15.2.2013. In this backdrop, the petitioners have approached this Court

on the assertion that the Bye-Laws of the Respondent No.5 society are

in conformity with all the parameters specified in the Act of 2011. In

that, the Bye-Laws of Respondent No.5 - Society provide for

reservations for Scheduled Castes or Scheduled Tribes and Women.

The only additional requirement to be complied by Respondent No.5

society was to amend the Bye-Laws so as to provide for co-option of

independent Directors / functional directors, as envisaged by Article 243

ZJ. According to the petitioners, therefore, there is no impediment for

proceeding with the election programme of Respondent No.5, to ensure

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that its newly elected Managing Committee is installed in the office at

the earliest.

7. During the pendency of this petition, the Commissioner of

Cooperation and Registrar has issued another Circular dated

17.12.2012 - which declares that even in case of default in conducting

elections within the statutory period, no action will be taken against the

concerned Society. This Circular has been issued because the State

Government is in the process of finalising the new legislation which will

be soon enacted and brought into force so as to amend the provisions

of the existing Cooperative Societies Act to bring it on par with the

parameters specified in the Constitution Amendment Act 2011 relating to

allocation of seats and including the maximum number of Directors of a

cooperative society.

8. The principal question that needs to be considered is: Whether it

is open to postpone the election programme of any Society, in this case

a specified society, inspite of expiry of term of office of the outgoing

Board. For answering this question, it may be apposite to advert to the

newly inserted Article 243 ZK. The same reads thus:

"243 ZK. Election of members of board. - (1) Notwithstanding anything contained in any law made by the Legislature of a State, the election of a board shall be conducted before the expiry of the

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term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the office

of members of the outgoing board.

(2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections

to a co-operative society shall vest in such an authority or body, as may be provided by the Legislature of a State, by law:

Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such election."

It may be also useful to advert to the relevant portion of Article 243 ZJ,

providing for term of Office of elected members of the Board. The same

reads thus:

"243 ZJ. Number and term of members of board and its office bearers. -

            (1)     ....
        


            (2)    The term of office of elected members of the board and its
     

office-bearers shall be five years from the date of election and the term of office-bearers shall be coterminous with the term of the board:

Provided that the board may fill a casual vacancy on the

board by nomination out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the board is less than half of its original term.

(3) ........" (emphasis supplied).

9. On a bare reading of the abovequoted provisions, it is seen that it

contains non-obstante clause and a mandate that the election of a

Board of every cooperative society shall be conducted before the expiry

of the term of the Board so as to ensure that the newly elected members

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of the Board assume office immediately on the expiry of the office of the

Members of the outgoing Board. No State legislation can whittle down

this mandate. The provision in the Constitution does not delineate any

exceptions, to the rule of installing elected members of the Board

immediately on the expiry of the term of the outgoing Board, so as to

permit the Legislature of a State to legislate on the subject to allow the

outgoing Board of the Cooperative Society to remain in office beyond

the period of five years from the date of its election. This provision is

intended to introduce uniformity and certainty in respect of tenure of

members of Board and the office-bearers of all the cooperative societies

across India.

10. Be that as it may, even the existing provisions of the Maharashtra

Cooperative Societies Act mandate that on expiry of the term of office,

the outgoing Board is duty bound to ensure that the newly elected

members of the Board assume office on the expiry of their term.

Considering the mandate in the provisions of the Constitution of India as

amended, as also in the State enactment of 1960, there is hardly any

option to the outgoing Board. At the same time, even the State

Authorities are duty bound to ensure that the newly elected members of

the Board assume office immediately on expiry of the term of office of

the outgoing Board. Thus understood, it is unfathomable that the State

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Authorities could issue directions or instructions to the societies, where

elections were due to be held after the coming into force of the

Constitution Amendment Act, to withhold or defer elections until the

amending State Act is brought into force to bring the existing State

enactment in conformity with the provisions of the Constitution

Amendment Act or for that matter, until the Society amends its Bye-

Laws to adhere to the parameters specified in the Constitution

Amendment Act. Abiding by such instructions of the State Authorities, in

law, the concerned Societies would expose themselves to the inevitable

action of appointment of Administrator consequent to expiry of term of

office of the outgoing Board.

11. The provision introduced by the Constitution Amendment Act

opens with non-obstante clause, which overrides the State legislations

as also Bye-Laws of the concerned societies to the extent the same are

inconsistent with or derogatory to the provisions introduced by the

Constitution Amendment Act governing the number and term of

members of the Board and its office-bearers or election of members.

Indeed, Article 243 ZT provides for continuance of such provisions in the

Act, Rules or Bye-Laws until the concerned State Legislature amends or

repeals the same or until the expiration of one year from the

commencement of the Act of 2011, whichever is less. Article 243 ZT

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reads thus:

"243 ZT. Continuance of existing laws. - Notwithstanding anything in this Part, any provision of any law relating to co-operative

societies in force in a State immediately before the commencement of the Constitution (Ninety-seventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a

competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less."

Because of this special provision, the dispensation provided in the State

Legislature or the Rules framed thereunder and the Bye-Laws of the

concerned society regarding the number and term of Members of Board

and its office-bearers are saved until amendment to the State legislation

but that validation cannot transcend beyond 15th February, 2013 - upon

expiry of one year from the commencement of Constitution Amendment

Act, 2011.

12. As aforesaid, the existing provisions of the State Act of 1960 also

obligates the outgoing Board as well as the State Authorities to ensure

that the newly elected members assume office before the expiry of the

term of the outgoing Board upon expiry of five years from the date on

which the first meeting of the Board was held. Considering the fact that

the State Government had issued direction to defer the conduct of

elections of the Societies due to drought condition and the period

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specified in the said notification having expired on 30.11.2012, it has

become imperative for the society and in particular, the outgoing Board

of Respondent No.5 society as also the State Authorities, in law, to

install the newly elected Board at the earliest by declaring the election

programme as per Rules of 1971.

13. Once this position is accepted, there is hardly any option for the

society to delay the election programme and at the same time, the State

Authorities are duty bound to ensure that the concerned society

complies with the said requirements failing which, must suffer the

consequences of appointment of Administrator, as provided by the

existing provisions of the Cooperative Societies Act in addition to other

legal action against the defaulting members of the outgoing Board.

Neither the Circular issued by the Commissioner dated 17.12.2012 nor

the order passed on 30.11.2012 can whittle down the said mandate of

Article 243 ZK read with Article 243 ZJ.

14. Having said this, it necessarily follows that not only the outgoing

office-bearers and members of the Board but also the State Authorities

are enjoined to ensure that the newly elected members of the Board

assume office immediately on the expiry of the office of the members of

the outgoing Board. It is common ground that as of today, no law has

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been enacted by the State Legislature though it was so desired by the

provisions of the Article 243 ZT. Considering the purport of Article

243 ZT and the obligation of the outgoing Managing Committee, the

newly elected members of the Board, will have to assume office as early

as possible, as the term of the outgoing Managing Committee has

already expired on 23.11.2012. Accordingly, there is no reason why the

issuance of election programme of Respondent No.5 Society should be

deferred at all.

15. According to the petitioners, the number of Directors specified by

the Bye-Laws of the Respondent No.5 society does not exceed 21, as is

provided by Article 243ZJ. Besides, the Bye-Laws of the Respondent

No.5 provide for allocating seats for the specified category of members

as referred to in the Constitution Amendment Act. A comparative chart

was handed in to us to explain that position. It was, however, fairly

accepted that the Bye-Laws do not make provision for co-option of

Directors, which may have to be additionally provided as per the

Constitution Amendment Act. The petitioners are, however, willing to

comply with that requirement as and when the new legislation is

enacted or as may be provided in that legislation.

16. In our considered opinion, merely because the existing Bye-Laws

of Respondent No.5 Society makes no provision for appointment of upto

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two independent Directors by co-option - who are to be appointed in

addition to the number of elected Directors specified in Article 243 ZJ(1)

- can be no justification to put on hold the election programme of

Respondent No.5 society. For, the appointment of those additional

Directors will be by co-option, and not by election. Further, the election

of Respondent No.5 society must be governed by the existing provisions

of the State Legislation and the Rules framed thereunder and its Bye-

Laws, as it had become due and is being held before the amendment of

the State Legislation and also before expiry of one year from the

commencement of the Constitution Amendment Act. Ordinarily, the

amendment of the State legislation is made with prospective effect.

Assuming that the amendment of the State legislation is to be given

retrospective effect, it may then have to provide for the consequence for

having more number of Directors than the number specified by the

amended State legislation - though it may be less than the maximum

number specified by Article 243ZJ. That retrospective law will be

applicable to societies, even wherever the election of a Board has

already been conducted as in the case of elections becoming due after

the amendment of State legislation comes into effect or on expiry of

period specified in Article 243 ZT, whichever is earlier. In respect of

such societies the amendment Act of State legislation can and ought to

additionally provide for co-option of persons to be members of the Board

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and / or functional Directors. Moreover, the Constitution (Ninety

Seventh Amendment) Act having come into force w.e.f. 15.2.2012 itself,

even if the existing Bye-Laws of the Society make no provision in that

behalf, Respondent No.5 society will be obliged to provide upto two

seats for independent co-opted Directors. The modality of how co-

option of Directors is to be made, is yet to be articulated by the State

and no law has been brought into force in that regard. It is indisputable

that the provisions of the Constitution (Ninety-Seventh Amendment) Act

have come into force with prospective effect from 15.2.2012. In

absence of legislation regarding the procedure for appointment of upto

two independent Directors by co-option, the cooperative societies

cannot do anything in the matter - despite coming into force of the

provisions of Constitution Amendment Act w.e.f. 15.2.2012. The State

Legislature is obliged to enact law in that behalf within one year from

15.2.2012. As informed by the learned Government Pleader, that

procedure is already in progress and the State would take all measures

to ensure that at least Ordinance is issued before 15.2.2013 to suitably

amend the provisions of the State enactment of 1960 to bring it in

conformity with the provisions contained in the Constitution Amendment

Act.

17. We make it clear that we are not finally answering the controversy

raised before us by the petitioners that the extant regime provided for

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under the existing Bye-Laws of Respondent No.5 society are in full

compliance with the provisions of the Constitution (Ninety-Seventh

Amendment) Act, 2011, except to the limited extent of providing for

additional upto two independent Directors by co-option. That question

be examined by the Collector in the first place who, in turn, may issue

appropriate directions including for declaration of election programme of

Respondent No.5 society on such terms and conditions as he may

deem fit, to be concluded at the earliest as per the norms specified by

the existing provisions of Cooperative Societies Act and the Rules

framed thereunder.

18. The learned Government Pleader was at pains to argue that, if the

State Legislature provides for less number of Directors than the

maximum number specified by Article 243 ZJ; and in the event the

election of Respondent No.5 is conducted on the basis of the existing

Bye-Laws, there would be excess number of Directors elected on the

Board of Directors of Respondent No.5. In that case, it will be in breach

of the law to be enacted by the State Legislature. This argument does

not commend to us. It is not the argument of the Government Pleader

that the State Legislature is intending to amend the law with

retrospective effect and to govern the elections already concluded. As

and when the State Legislature brings in law to reduce the number of

Directors on the Board even below the maximum number of 21

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Directors specified in Article 243 ZJ, or 18 elected directors as presently

provided in the Bye-Laws of Respondent No.5, there is no doubt that

Respondent No.5 will have to abide by such legal provision. As of

today, the law permits Respondent No.5 to elect 18 members on its

Board of Directors - which includes seats reserved for Scheduled Caste

or Scheduled Tribe / Women, etc. So long as that dispensation is in

place and the election is conducted and concluded on that basis, we

see no reason as to how the future legislation to be brought by the State

Government, can have any impact on such concluded elections, unless

it provides specifically to cover even those elections.

19. In the circumstances, if the Collector, Kolhapur after examining

the stand of the petitioner and Respondent No.5 is satisfied that the

dispensation provided in the existing Bye-Laws is in compliance with the

requirements of maximum number of elected Directors of a Cooperative

Society and also complies with the requirement of seats for specified

category, will be bound to issue direction for publication of election

programme, to be completed expeditiously in accordance with the law in

force. That shall be done within two weeks from today.

20. Writ Petition is disposed of accordingly.

                 (R.Y. GANOO, J.)                       (A.M. KHANWILKAR,J.)



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