Bombay High Court
Letters Patent Appeal No.389 Of ... vs The Hon'Ble Minister For ... on 19 November, 2012
Bench: B.R. Gavai, A.P. Bhangale
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
1) LETTERS PATENT APPEAL NO.389 OF 2012 IN
WRIT PETITION NO.956 OF 2011
AND
COUNTER APPEAL ST.NO.10752 OF 2012
IN LETTERS PATENT APPEAL NO.389 OF 2012 IN
WRIT PETITION NO.956 OF 2011
WITH
2) LETTERS PATENT APPEAL NO.390 OF 2012 IN
WRIT PETITION NO.1743 OF 2011
AND
COUNTER APPEAL NO.10753 OF 2012
IN LETTERS PATENT APPEAL NO.390 OF 2012 IN
WRIT PETITION NO.1743 OF 2011
WITH
3) LETTERS PATENT APPEAL NO.391 OF 2012 IN
WRIT PETITION NO.2149 OF 2011
WITH
4) LETTERS PATENT APPEAL NO.392 OF 2012 IN
WRIT PETITION NO.1742 OF 2011
WITH
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5) LETTERS PATENT APPEAL NO.393 OF 2012 IN
WRIT PETITION NO.2150 OF 2011
WITH
6) LETTERS PATENT APPEAL NO.394 OF 2012 IN
WRIT PETITION NO.957 OF 2011
WITH
7) LETTERS PATENT APPEAL NO.395 OF 2012 IN
WRIT PETITION NO.1741 OF 2011
WITH
8) LETTERS PATENT APPEAL NO.396 OF 2012 IN
ig WRIT PETITION NO.2148 OF 2011
AND
COUNTER APPEAL ST.NO.10754 OF 2012
IN LETTERS PATENT APPEAL NO.396 OF 2012 IN
WRIT PETITION NO.2148 OF 2011
*******
1) LETTERS PATENT APPEAL NO.389 OF 2012 IN
WRIT PETITION NO.956 OF 2011
AND
COUNTER APPEAL ST.NO.10752 OF 2012
IN LETTERS PATENT APPEAL NO.389 OF 2012 IN
WRIT PETITION NO.956 OF 2011
LETTERS PATENT APPEAL NO.389 OF 2012 IN
WRIT PETITION NO.956 OF 2011 :
Sadashiv s/o. Ganpatrao Mahajan,
Aged about 54 yrs., Occ. Agrilst.,
r/o. Waradh, Tq. Ralegaon,
Dist. Yavatmal. ........ APPELLANT
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// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Prafulla s/o. Khushalrao Mankar,
r/o. Bajoriya Nagar, Near Sai
Mandir, Yavatmal, Tah. and
Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
AND
COUNTER APPEAL ST.NO.10752 OF 2012
IN LETTERS PATENT APPEAL NO.389 OF 2012 IN
WRIT PETITION NO.956 OF 2011
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Sadashiv s/o. Ganpatrao Mahajan,
Aged about 54 yrs., Occ. Agrilst.,
r/o. Waradh, Tq. Ralegaon,
Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Prafulla s/o. Khushalrao Mankar,
r/o. Bajoriya Nagar, Near Sai
Mandir, Yavatmal, Tah. and
Dist. Yavatmal.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. A.M.Ghare, Adv. for Appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
*******
2) LETTERS PATENT APPEAL NO.390 OF 2012 IN
WRIT PETITION NO.1743 OF 2011
AND
COUNTER APPEAL ST.NO.10753 OF 2012
IN LETTERS PATENT APPEAL NO.390 OF 2012 IN
WRIT PETITION NO.1743 OF 2011
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LETTERS PATENT APPEAL NO.390 OF 2012 IN
WRIT PETITION NO.1743 OF 2011 :
Prashant s/o. Amrutrao Tayade,
Aged about 35 yrs., Occ. Agrilst.,
r/o. Pimpalkhuti, Post Zadgaon,
Tq. Zadgaon, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Sou. Geeta Vijay Patil,
Aged Major, r/o. Chalbardi, Tah.
Kelapur, Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
AND
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COUNTER APPEAL ST.NO.10753 OF 2012
IN LETTERS PATENT APPEAL NO.390 OF 2012 IN
WRIT PETITION NO.1743 OF 2011
Prashant s/o. Amrutrao Tayade,
Aged about 35 yrs., Occ. Agrilst.,
r/o. Pimpalkhuti, Post Zadgaon,
Tq. Zadgaon, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Sou. Geeta Vijay Patil,
Aged Major, r/o. Chalbardi, Tah.
Kelapur, Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. A.M.Ghare, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
***************
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3) LETTERS PATENT APPEAL NO.391 OF 2012 IN
WRIT PETITION NO.2149 OF 2011
Sadashiv s/o. Ganpatrao Mahajan,
Aged about 54 yrs., Occ. Agrilst.,
r/o. Waradh, Tq. Ralegaon,
Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Vinayakrao s/o. Pundlikrao Ekre,
Aged Major, r/o. Mendholi, Tah.
Wani, Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
**************
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4) LETTERS PATENT APPEAL NO.392 OF 2012 IN
WRIT PETITION NO.1742 OF 2011
Prashant s/o. Amrutrao Tayade,
Aged about 35 yrs., Occ. Agrilst.,
r/o. Pimpalkhuti, Post Zadgaon,
Tq. Zadgaon, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Narendra Anantreddy Bodkurwar,
Aged Major, r/o. Ardhawan, Tah.
Zari, Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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5) LETTERS PATENT APPEAL NO.393 OF 2012 IN
WRIT PETITION NO.2150 OF 2011
Sadashiv s/o. Ganpatrao Mahajan,
Aged about 54 yrs., Occ. Agrilst.,
r/o. Waradh, Tq. Ralegaon,
Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Chandrakant Ramarao Gade Patil,
Aged Major, r/o. Akpuri, Tah.
and Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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6) LETTERS PATENT APPEAL NO.394 OF 2012 IN
WRIT PETITION NO.957 OF 2011
Prashant s/o. Amrutrao Tayade,
Aged about 35 yrs., Occ. Agrilst.,
r/o. Pimpalkhuti, Post Zadgaon,
Tq. Zadgaon, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Manish s/o. Uttamraoji Patil,
r/o. Mahabali Nagar, Behind State
Bank, Arvi Road, Wadgaon, Tah.
and Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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7) LETTERS PATENT APPEAL NO.395 OF 2012 IN
WRIT PETITION NO.1741 OF 2011
Prashant s/o. Amrutrao Tayade,
Aged about 35 yrs., Occ. Agrilst.,
r/o. Pimpalkhuti, Post Zadgaon,
Tq. Zadgaon, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Chandrakant s/o. Dadarao Madavi,
Aged Major, r/o. Madani, Tah.
Babhulgaon, Dist. Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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8) LETTERS PATENT APPEAL NO.396 OF 2012 IN
WRIT PETITION NO.2148 OF 2011
AND
COUNTER APPEAL ST.NO.10754 OF 2012
IN LETTERS PATENT APPEAL NO.396 OF 2012 IN
WRIT PETITION NO.2148 OF 2011
Narsingrao s/o. Ragholu Saturwar,
Aged about 62 yrs., Occ. Agrilst.,
r/o. Marathwakdi, Post - Dhoki Road,
Tah. Kelapur, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Prakash s/o. Anandrao Mankar,
Aged Major, r/o. Khatla, Post -
Munzala, Tah.Kelapur, Dist.
Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. Subhash Paliwal, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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AND
COUNTER APPEAL ST.NO.10754 OF 2012
IN LETTERS PATENT APPEAL NO.396 OF 2012 IN
WRIT PETITION NO.2148 OF 2011
Narsingrao s/o. Ragholu Saturwar,
Aged about 62 yrs., Occ. Agrilst.,
r/o. Marathwakdi, Post - Dhoki Road,
Tah. Kelapur, Dist. Yavatmal. ........ APPELLANT
// VERSUS //
1. The Hon'ble Minister for Cooperation
and Textile, State of Maharashtra,
Mantralaya, Mumbai - 32.
2. The Divisional Joint Registrar,
Co-operative Societies, Amravati
Division, Sahkar Sankul, Kanta
Nagar, Camp - Amravati.
3. Yavatmal District Central Cooperative
Bank Limited, through its Manager,
Yavatmal.
4. Prakash s/o. Anandrao Mankar,
Aged Major, r/o. Khatla, Post -
Munzala, Tah.Kelapur, Dist.
Yavatmal.
Director, c/o. Yavatmal, District
Central Cooperative Bank Limited,
Yavatmal. ........ RESPONDENTS
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-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Mr. A.M.Ghare, Adv. for the appellant.
Mrs.Bharti Dangre, Addl.G.P. with Mr.A.G.Mujumdar,
A.G.P. for Respondent Nos. 1 and 2.
Mr.P.C.Madkholkar, Adv. with Mr.Ram Karode, Adv.
for Respondent No.3.
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*******
CORAM : B. R. GAVAI &
A. P. BHANGALE, JJ.
DATE : 19/11/2012.
ORAL JUDGMENT (Per B. R. Gavai, J) :
1. Admit. By consent, taken up for final hearing.
2. The appellants/Original Writ Petitioners have approached
this Court by way of present intra Court appeals being aggrieved by
the part of the findings, as recorded by the learned Single Judge of
this Court in Judgment and Order, dated 16.8.2012 passed in Writ
Petition No.956 of 2011 along with companion petitions.
2. The facts, in brief, giving rise to the present appeals, are as
under :
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Respondent no.2/Divisional Joint Registrar, Co-operative
Societies, Amravati, on the basis of the report of NABARD and the
subsequent report by the District Deputy Registrar, Co-operative
Societies, Yavatmal, had issued show cause notices on 26.2.2012 to
fourteen Directors of respondent no.3/Yavatmal District Central Co-
operative Bank, who are respondent no.4 respectively in each of these
appeals, calling upon then to show cause as to why they should not be
held to be 'disqualified' under the provisions of Section 73-EA of the
Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to
as "the Act" for the sake of brevity). The basic ground raised in the
said show cause notices was that the said Directors of respondent
no.3 were the members of Primary Agricultural Co-operative Credit
Societies, which Societies were defaulters and as such, they had
incurred disqualification under the provisions of Section 73A (ii) of
the said Act. All of the said Directors submitted their replies to the
said show cause notices. The main defence raised in the reply to the
show cause notices was that the show cause notices were vague. It
was also contended that the member of the Managing Committee of
the Primary Agricultural Cooperative Credit Society cannot be termed
to be 'Office bearers of the said Society'. It was further submitted that
the said Primary Societies have already paid the outstanding amounts.
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The Divisional Joint Registrar/respondent no.2, after considering the
submissions made on behalf of the said Directors, held that the said
Directors had incurred disqualification as provided under Section 73-
EA of the said Act. Being aggrieved thereby, the said Directors filed
statutory appeals before the State Government. The Hon'ble Minister
for Co-operation, Maharashtra State, Mantralaya, Mumbai, by
Judgment and Order dated 29th September, 2010 allowed the
appeals. The appeals were, inter alia, allowed on the following
grounds :
a) That the Directors were elected prior to the date
on which Section 73-EA of the Act came into operation and
as such, disqualification would not incur retrospectively.
b) The replies filed by the petitioners were not sent
by the Divisional Joint Registrar to the Federal Society and
as such, there was no effective consultation.
c) The Primary Societies had already re-paid the
outstanding amounts and as such, disqualification was on a
non-existent ground.
d) The Divisional Joint Registrar had not consulted
the Reserve Bank of India and as such, the order passed by
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the Divisional Joint Registrar was not in consonance with the
provisions of Section 78 of the said Act.
e) That the members of the Primary Agricultural
Co-operative Credit Society could not be termed as 'Office
bearers'.
3. Being aggrieved thereby, the present appellants filed Writ
Petitions before this Court. The learned Single Judge, while
dismissing the petitions, upheld the findings of the Hon'ble Minister to
the effect that there was no effective consultation with the Federal
Society and therefore, the order passed by the Divisional Joint
Registrar on this count was not sustainable. However, the learned
Single Judge reversed the findings of the Hon'ble Minister to the
effect that the said Directors were not the Office bearers of the Society
and that the provisions of Section 73-EA could not be made
retrospectively applicable to the Directors and that, since the
outstanding amount was already repaid, the disqualification does not
stand. The learned Single Judge, however, found that the order
passed by the Divisional Joint Registrar was not sustainable on
additional ground that the same was in breach of principles of natural
justice.
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4. The appellants have approached this Court basically being
aggrieved by the findings of the learned Single Judge on the aspect of
effective consultation and violation of principles of natural justice.
5. The Directors have also approached this Court by way of
separate appeals and counter claims challenging the findings by the
learned Single Judge which are adverse to their interest. However, in
view of the orders being passed in these appeals, the
appellants/Directors have not pressed their appeals and the counter
claims and have withdrawn them with liberty to raise challenge to the
findings of the learned Single Judge before the appropriate forum at
an appropriate stage.
6. In that view of the matter, in the present appeals, we are
only concerned with the findings of the learned Single Judge
regarding want of effective and prior consultation and breach of
principles of natural justice.
7. Mr.Subhash Paliwal, learned Counsel appearing on behalf
of the appellants, has submitted that, in the appeals before the
Hon'ble Minister, the appellants have not specifically pleaded that
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there was no effective consultation as there was no resolution of the
Managing Committee of the Federal Society. The learned Counsel
submitted that the learned Single Judge could not have come to the
finding in that respect unless there was specific pleading by the
respondents/Directors in the appeal memos before the State
Government. The learned Counsel in this respect relies on the
Judgment of the Constitution Bench of the Apex Court in the case of
Daman Singh and Ors. vs. State of Punjab and Ors. reported in (1985)
2 SCC 670 and the Bench of the Apex Court in the case of Ajodhya
Bhagat and Ors. vs. The State of Bihar and Ors. reported in AIR 1974
SC 1886.
8. Mr.Paliwal, learned Counsel further submits that the
finding of the learned Single Judge in respect of breach of principles
of natural justice is also not sustainable in law. The learned Counsel
submits that what is required for incurring disqualification
u/s.73EA(ii) is that :
I) The person should be a Director of a District
Central Co-operative Bank.
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II) He should be an Office bearer of a Primary
Agricultural Co-operative Credit Society and that the said
person should be either a defaulter of a Primary Agriculture
Co-operative Credit Society or an Office bearer of a
defaulter Primary Agricultural Co-operative Credit Society.
9. The learned Counsel submits that, in the show cause
notices, it is specifically mentioned that the Directors were members
of the Primary Agricultural Co-operative Credit Societies and that the
said Primary Agriculture Co-operative Credit Societies were
defaulters. It is further submitted that the amount outstanding
towards the District Central C-operative Bank was also mentioned in
the said show cause notices. It is, therefore, submitted that all the
factors which were necessary for the Directors to answer an issue
regarding disqualification u/s.73-EA(ii) of the Act were put in the
notice to the Directors. It is submitted that, not only that, but the
report of the NABARD and the report of the District Deputy Registrar,
which were demanded by the Directors, were also supplied to them.
The learned Counsel, therefore, submitted that there was sufficient
compliance of the principles of natural justice. The learned Counsel
further submits that the Directors were incharge of the affairs of the
District Central Co-operative Bank and also the Primary Agricultural
21 lpa389.12.odt
Co-operative Credit Societies and as such, no prejudice was caused to
them.
10. The learned Counsel relies on the judgment of the Apex
Court in case of Ashok Kumar Sonkar .vs Union of India and Ors.
reported in (2007) 4 SCC 54 in support of a proposition that, unless
prejudice is caused to the party an order could not be set aside on the
ground of violation of principles of natural justice.
11. For appreciating the rival contentions, it would be
necessary to refer to the provisions of Section 73-EA of the Act.
Section 73-EA of the Act is reproduced hereunder :
"73-EA : Disqualification for being director of District
Central Cooperative Bank or State Cooperative Bank :
' Without prejudice to the other provisions of this Act or the
Rules made thereunder in relation to the disqualification of
being a member of a Committee, no person shall be eligible
for being appointed, nominated, co-opted or, for being a
director of a District Central Co-operative Bank or of the
State Co-operative Bank if he :
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i) is a person who represents a society other than a
primary agricultural credit cooperative society on the board
of a District Central Cooperative Bank or State Cooperative
Bank, if the society to whom he represents has committed a
default towards the payments of such bank for a period
exceeding 90 days.
ii) is a person who is defaulter of a primary
agricultural credit cooperative society or is an office bearer
of a defaulting primary agricultural cooperative credit
society.
ii) is a person, who represents a society whose
managing committee is superseded. "
12. It is not in dispute that, though the provisions of Section
73-EA of the Act provide for additional disqualification, the
procedure, as contemplated under Section 78 of the Act, is required to
be followed before removing any person from the Managing
Committee of the Society. It is also not in dispute that the provisions
of Section 78 requires consultation to be made with the Federal
Society before an action of removal of a Director could be taken by a
Competent Authority.
23 lpa389.12.odt
13. Before we proceed to consider the merits of the present
appeals, it will be necessary to consider the preliminary objection
raised in the appeals that a party cannot be permitted to raise new
grounds which are not raised earlier. The learned Counsel specifically
relies on paragraph 17 of the judgment in the case of Ajodhya Bhagat
and Ors. (cited supra). The said paragraph reads thus :
" The Solicitor General rightly contended that no
arguments had been advanced before the High Court
with regard to notification not being by the Collector,
and that there was no satisfaction of the Collector with
regard to Section 4 notification. He rightly submitted
that the Government would have given answer on facts,
and, therefore, this Court is not only deprived of facts but
also of the judgment of the High Court on these aspect.
We are, therefore, unable to allow the appellants to
canvass those two grounds. "
14. In the said case, the appellants before the Apex Court had
challenged the proceedings for acquisition of their lands. The High
Court dismissed the petition rejecting the contention regarding mala-
fides and invalidity of the notification u/s.4 of the Land Acquisition
Act. Being aggrieved thereby, an appeal was preferred before the
24 lpa389.12.odt
Apex Court. In the appeal, for the first time, it was sought to be urged
that there was no satisfaction of the Collector with regard to Section 4
notification. In this factual background, the Apex Court found that the
argument which was not advanced before the High Court and which
contention could have been very well answered by the State
Government before the High Court, could not be permitted to be
advanced before the Apex Court for the first time.
15.
Insofar as the Judgment of the Apex Court in the case of
Daman Singh and Ors. (cited supra) is concerned, the learned
Counsel relies on the observations of the Apex Court in paragraph 13,
which reads thus :
" The final submission of Shri Ramamurthi was that
several other questions were raised in the writ
petition before the High Court but they were not
considered. We attach no significance to this
submission. It is not unusual for parties and counsel
to raise innumerable grounds in the petitions and
memoranda of appeal etc., but, later, confine
themselves, in the course of argument to a few only of
those grounds, obviously because the rest of the
grounds are considered even by them to be untenable.
25 lpa389.12.odt
No party or counsel is thereafter entitled to make a
grievance that the grounds not argued were not
considered. If indeed any ground which was argued
was not considered it should be open to the party
aggrieved to draw the attention of the court making
the order to it by filing a proper application for
review or clarification. The time of the superior
courts is not to be wasted in enquiring into the
question whether a certain ground to which no
reference is found in the judgment of the subordinate
court was argued before that court or not ?
16. In the afore-said case, validity of the relevant provisions of
the Punjab Co-operative Societies Act, 1961; particularly Section
13(8) therein was for consideration before the Constitution Bench of
the Apex Court. A grievance was sought to be made before the Apex
Court that though several questions were raised before the High
Court, the same were not considered by the High Court. In this
background, the afore-said observations have been made by the
Constitution Bench.
17. In the present case, it is the appellants who had
approached this Court by way of Writ Petition under Article 226 or
26 lpa389.12.odt
227 of the Constitution of the India. It is not the
respondents/Directors who had approached the learned Single Judge
of this Court. In any case, it could be seen from the memo of appeals
filed by the petitioners before the State Government that the
following two grounds are specifically raised :
"10. That on perusal of the order dated 12-05-2010
it will demonstrate that there was no effective and
meaningful consultation with Federal Society and hence the
order is illegal and needs to be set aside.
12. That, the Respondent No.1 failed to take into
consider that the Respondent No.2 had never demanded the
alleged outstanding amount as mentioned in the show
cause notice and therefore, unless and until demand notice
is made no default under the Act can be constituted to
incur any kind of disqualification and therefore, the notice
issued by Respondent No.1 U/Sec.78, dt.26-02-2010 was
premature in absence of demand notice and therefore, the
said order passed by Respondent No.1 is illegal and needs
to be set aside. "
18. It can, thus, clearly be seen that specific ground with
regard to want of effective and meaningful consultation with the
27 lpa389.12.odt
Federal Society has been specifically raised by the appellants. It can
further be seen that a specific ground regarding demand not being
issued to the appellants and therefore, the notice issued u/s.78 of the
Act not being valid in law, has also been raised. Considering these
grounds, the appeals, as filed by the respondents/Directors, were
allowed by the State Government and being aggrieved thereby, the
petitioners/appellants have approached this Court. In this
background, if the petitioners/appellants were of the opinion that
there was an effective consultation, the onus was on the appellants to
canvass before the learned Single Judge that, in fact, there was an
effective consultation. In that view of the matter, we find that the
reliance placed by the learned Counsel for the appellants on the
afore-said two judgments of the Apex Court is of no use to the case of
the appellants.
19. Insofar as effective consultation is concerned, the learned
Single Judge has basically gone on the premise that consultation with
the Federal Society would mean consultation with the Board of
Directors of the Federal Society. The learned Single Judge has held
that consultation would not mean consultation with the Managing
Director, who is not elected Director of the Federal Society. The
28 lpa389.12.odt
learned Single Judge has held that, for an effective consultation, it
should be shown that entire material was placed before the Board of
Directors of the Federal Society. It has been further held that it must
be shown that the Board of Directors have applied their mind and
thereafter, have come to some conclusion either way, before giving
their opinion to the competent Authority. We have also perused the
document which is sought to be relied on behalf of the appellants in
support of the contention that there was effective consultation. The
said document, which is a communication dt.7.5.2010 addressed by
the Managing Director of the Federal Society, states that the
Authority concerned, after considering the replies of the concerned
Directors, should take action in accordance with the provisions of the
Maharashtra Co-operative Societies Act. On perusal of the said
communication itself, it would appear that there is even not a
whisper as to whether the said material was placed before the
Managing Committee of the Federal Society and as to whether the
Managing Committee of the Federal Society had applied its mind and
arrived at any decision. In that view of the matter, we do not find
that the learned Single Judge has erred in coming to a finding that
there was no effective consultation.
29 lpa389.12.odt
20. Insofar as the second ground regarding principles of
natural justice is concerned, the learned Counsel for the appellants
relies on paragraph 32 of the Judgment of the Apex Court in the case
of Ashok Kumar Sonkar (cited supra), which reads thus :
" In P.D. Agrawal v. State Bank of India [(2006) 8 SCC
776 : (2007) 1 SCC (L&S) 43] this Court observed : (SCC
791, para 30)
"30. The principles of natural justice cannot be put in a
straitjacket formula. It must be seen in circumstantial
flexibility. It has separate facets. It has in recent time also
undergone a sea change. "
It was further observed : (SCC pp.793-94,
para 39) :
"39. Decision of this Court in S.L.Kappor v. Jagmohan
[(1980) 4 SCC 379] whereupon Mr.Rao placed strong
reliance to contend that non-observance of the principles
of natural justice itself causes prejudice or the same should
not be read 'as it causes difficulty of prejudice', cannot be
said to be applicable in the instant case. The principles of
natural justice, as noticed hereinbefore, have undergone a
sea change. In view of the decisions of this Court in State
30 lpa389.12.odt
Bank of Patiala vs. S.K.Sharma [(1996) 3 SCC 364 :
1996 SCC (L&S) 717] and Rajendra Singh v. State of
M.P. [(1996) 5 SCC 460] the principle of law is that some
real prejudice must have been caused to the complainant.
The Court has shifted from its earlier concept that even a
small violation shall result in the order being rendered a
nullity. To the principle/doctrine of audi alteram partem,
a clear distinction has been laid down between the cases
where there was no hearing at all and the cases where
there was mere technical infringement of the principle.
The Court applies the principles of natural justice having
regard to the fact situation obtaining in each case. It is not
applied in a vacuum without reference to the relevant facts
and circumstances of the case. It is no unruly horse. It
cannot be put in a straitjacket formula. (See Viveka Nand
Sethi v. Chairman, J & K Bank Ltd. [(2005) 5 SCC 337 :
2005 SCC (L&S) 689] and State of U.P. v. Neeraj Awasthi
[(2006) 1 SCC 667 : 2006 SCC (L&S) 190 : JT (2006) 1
SC 19]. See also Mohd. Sartaj v. State of U.P. [ (2006) 2
SCC 315 : 2006 SCC (L&S) 295 : (2006) 1 Scale 265]".
The principles of equity in a case of this nature,
in our opinion, will have no role to play. Sympathy, as is
well known, should not be misplaced. "
21. The afore-cited case arose out of cancellation of
appointment of an employee who was appointed de hors the
31 lpa389.12.odt
provisions of Articles 14 and 16 of the Constitution of India and also
in violation of statutory rules prescribing the eligibility of a candidate
to be appointed. Finding that the person appointed did not possess
the prescribed qualification, the Apex Court held that the
appointment was illegal and ab initio void. The Apex Court itself has
distinguished illegal appointment as against irregular appointment
which could be regularized in the facts of a particular case. Finding
that the appointment of the appellant before the Court was ab initio
void and illegal, the afore-said observations have been made
regarding principles of natural justice.
22. Nodoubt that, by now, it is a settled principle of law that
the principles of natural justice cannot be put in any straitjacket
formula. What should be the principles of natural justice in the
particular factual situation would depend upon the facts of each case.
The learned Single Judge analysing the scope of Section 73-EA of the
Act found that the show cause notices which were given to the
respondents/Directors were not sufficient so as to enable them to
meet the allegations made against them. The learned Single Judge,
while arriving at a finding, has also taken into consideration the
gravity of the resultant consequences which would follow upon the
32 lpa389.12.odt
action being taken against the Directors under the provisions of
Section 78 r/w. Section 73(1) AE of the said Act. We do not find that
the learned Single Judge has erred in holding that the show cause
notices which were issued to the Respondents/Directors herein were
not such which would enable them to effectively answer the
allegations made against them. Insofar as the contention of the
appellants regarding prejudice being caused to them is concerned, we
find that the reasoning given by the learned Single Judge that, in
view of gravity of the resultant consequences, a stricter adherence to
the principles of natural justice was required, can be in no way
faulted with.
In the result, no merit is found in the present appeals.
The appeals are, therefore, dismissed. However, in the facts and
circumstances, no orders as to costs.
In view of dismissal of the present appeals, all the pending
Civil Applications are disposed of.
JUDGE JUDGE
jaiswal
