Bombay High Court
Pune Zilla Madhyavarti Sahakari ... vs Pandurang Vividh Karyakari Seva ... on 2 May, 2016
Bench: M.S. Sonak
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8235 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Hanuman Vividh Karykari Seva
Sahakari Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8236 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd.
vs.
ig .. Petitioner
Harshwardhan Patil Vividh
Karyakari Seva Sahakari Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8237 of 2014
AND
WRIT PETITION NOS. 8240, 8241 OF 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Shriram Vividh Karyakari Seva
Sahakari Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8238 of 2014
AND
WRIT PETITION NO. 8244 OF 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Jay Hanuman Vividh Karyakari Seva
Sahakari Sanstha Maryadit & ors. .. Respondents
1/26
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WITH
WRIT PETITION NO. 8239 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Vijay Vividh Karyakari Seva Sahakari
Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8242 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Chaitnya Vividh Karyakari Seva
Sahakari Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8243 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Shri Hanuman Vividh Karyakari Seva
Sahakari Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8245 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Yashraj Vividh Karyakari Seva Sahakari
Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8246 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
2/26
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Shree Kalbhairvnath Vividh Karyakari Seva
Sahakari Sanstha Maryadit & ors. .. Respondents
WITH
WRIT PETITION NO. 8247 of 2014
Pune Zilla Madhyavarti Sahakari
Bank Ltd. .. Petitioner
vs.
Pandurang Vividh Karyakari Seva Sahakari
Sanstha Maryadit & ors. .. Respondents
Mr. S. S. Kanetkar for the Petitioner.
Mr. S.D. Rayrikar, AGP for Respondent Nos.2,3 and 4-State.
CORAM : M. S. SONAK, J.
Date of Reserving the Judgment : 21 April 2016.
Date of Pronouncing the Judgment : 02 May 2016.
JUDGMENT :-
1] Rule in each of these petitions. With the consent of and at the
request of learned counsel for the parties, Rule is made returnable
forthwith.
2] Learned counsel for the parties state and agree that common
issues of law and fact arise in this batch of petitions and therefore, it
would be appropriate, if this batch of petitions is disposed of by
common judgment and order. For the sake of convenience, reference
will be made to the facts and circumstances of Writ Petition No.
8235 of 2014.
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3] In all these petitions, challenge is to the orders dated 1 August
2014 made by the Divisional Joint Registrar Co-operative Societies,
Pune Division (respondent no.4) allowing the appeals instituted by
respondent no.1 in each of these petitions and directing the
petitioner to enroll respondent no.1, in each of these petitions, to
membership of the petitioner-society with effect from 8 December
2009. The orders dated 1 August 2014 shall hereinafter be referred
to as "impugned orders".
4] The petitioner is a cooperative bank deemed to have been
registered under the provisions of the Maharashtra Co-operative
Societies Act, 1960 (MCS Act). The petitioner bank is also a
Federal/Apex Society of primary agricultural societies registered
under the MCS Act, insofar as the Pune District is concerned.
Respondent No.1, in each of the petitions, are also cooperative
societies registered under the MCS Act. By applications dated 1
September 2009, respondent no.1 societies applied for membership
to the petitioner bank. By a resolution dated 28 November 2008, the
petitioner bank resolved to deny membership to respondent no.1
societies by reference to recommendations made by Vaidyanathan
Committee in the matter of registration of cooperative societies. This
decision was communicated to respondent no.1 societies on 8
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December 2009. After some delay, respondent no.1 societies
instituted appeals under Section 23 (2) of the MCS Act before the
Registrar (respondent no.4). The Registrar by order dated 8 May
2012 condoned the delay.
5] The petitioner bank, thereupon, instituted Writ Petition No.
4724 of 2012 and connected petitions to question the Registrar's
aforesaid order dated 8 May 2012. The same was rejected by the
learned Single Judge of this Court on 29 June 2012.
6] The petitioner bank, thereafter instituted Letters Patent Appeal
Nos. 133 of 2012 to 148 of 2012 to question the aforesaid order
dated 29 June 2012. The letters patent appeals were partly allowed,
the order dated 29 June 2012 confirming the Registrar's order
condoning the delay was set aside and the matter was remanded to
the Registrar for fresh consideration of the applications for
condonation of delay after afford of opportunity to the petitioner
bank to cross-examine the witnesses on behalf of respondent no.1
societies in the matter of condonation of delay. This was in terms of
order dated 8 August 2012 made by the Division Bench of this Court
in the matter of letters patent appeals.
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7] The petitioner bank cross-examined the deponent/witness in
support of applications for condonation of delay on 27 September
2012. The Registrar, by order dated 6 November 2012, upon taking
into consideration the evidence on record, once again condoned the
delay in institution of appeals. This was made by order dated 6
November 2012.
8] The petitioner bank once again instituted Writ Petition No.
4794 of 2012 and connected petitions to question the Registrar's
aforesaid order dated 6 November 2012 condoning delay in
institution of the appeals. The learned Single Judge of this Court, by
orders dated 29 November 2012, however, dismissed the said
petitions. The letters patent appeals were dismissed by the Division
Bench of this Court by orders dated 7 August 2013.
9] At the stage when all decks were cleared for the Registrar to
hear and decide the appeals instituted by respondent no.1 societies,
the petitioner bank on 25 June 2014 , insisted that their applications
relating to maintainability of the appeals be taken up for
consideration before the appeals themselves are taken up for
consideration on merits. On 1 July 2014, the Registrar made an
order that the applications for maintainability of appeals will be
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heard alongwith the appeals themselves, so that, composite orders
can be made in the matter. The petitioner bank, then instituted Writ
Petition No. 6809 of 2014 and other companion petitions to question
the order dated 1 July 2014. The order dated 1 July 2014 was not
interfered with by this Court. However, it was directed that in case
the appeals are decided against the petitioner bank, then effect shall
not be given to such orders for a period of four weeks from the date
of communication of the same to the petitioner bank. Respondent
no.4, by impugned order dated 1 August 2014 has finally dismissed
the petitioner bank's applications questioning the maintainability of
the appeals and further allowed the appeals instituted by respondent
no.1. Hence, the present petitions by the petitioner bank.
10] Mr. S.S. Kanetkar, learned counsel for the petitioner bank, has
submitted that the very registration of respondent no.1 society was
in breach of the provisions contained in Section 4 of the MCS Act,
which provisions are to be read alongwith Government Resolutions
(GRs) dated 7 February 2001 and 3 December 2011 and Circular
dated 5 March 2007 and GR dated 3 December 2011. Mr. Kanetkar
submitted that the Government of India had appointed the Task
Force Committee under Chairmanship of Professor Vaidyanathan for
revitilization of cooperative credit structure. The said committee in
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its report, submitted in February 2005, made various
recommendations for revitalization of cooperative societies. The
Government of India as well as State of Maharashtra have accepted
most of such recommendations and resolved to implement the same.
The implementation details are contained in Circular and GRs
referred to earlier.
11] Mr. Kanetkar submitted that almost 35 societies, including
respondent no.1 societies were registered on a single date in breach
of provisions contained in Section 4(1) of the MCS Act and the
Circular and GRs referred to earlier. The proviso to Section 4 of the
MCS Act provides that no society shall be registered if it is likely to
be economically unsound, or the registration of which may have an
adverse effect on development of the cooperative movement or
registration which may be contrary to the policy directives, which
the State Government may, from time to time, issue. Mr. Kanetkar
submitted that in the present cases, the policy directives are
contained in the GRs and Circular referred to earlier and the
registration in the present cases, was in breach of such policy
directives.
12] Mr. Kanetkar submitted that in pursuance of the
recommendations of Vaidyanathan Committee, Memorandum of
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Understanding (MOU) dated 13 November 2006 was entered into
between the State of Maharashtra, Union of India and the National
Bank for Agricultural Rural Development (NBARD). In terms of such
MOU, the Union of India had consented to release finances to
promote the cooperative sector in the State of Maharashtra, though
NABARD, provided, the recommendations of Vaidyanathan
Committee are complied with, inter alia, in the matters of
registration of viable cooperative societies. Mr. Kanetkar submitted
that the petitioner bank was entitled to take into consideration the
aspect that the very registration of respondent no.1 societies was in
breach of provisions contained in Section 4 of the MCS Act, the GRs
and Circular referred to earlier, which, inter alia, incorporate the
recommendations of the Vaidyanathan Committee, in the matter of
registration of cooperative societies. Mr. Kanetkar submitted that
there is no proper adjudication as to reason assigned by the
petitioner bank for refusal to admit respondent no.1 societies to the
membership of petitioner bank. This according to Mr. Kanetkar
constitutes failure to exercise jurisdiction.
13] Mr. Kanetkar also submitted that the petitioner bank is not an
agro processing society and therefore, the provisions contained in
Section 23(4) of the MCS Act, upon which reliance has been placed
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by the appellate authority, are not at all applicable. This according to
Mr. Kanetkar constitutes an error apparent on face of record.
14] Mr. S.D. Rayrikar, learned AGP for respondent Nos.2 to 4, has
submitted that there was no infirmity in the registration granted to
respondent no.1 societies. In any case, the petitioner bank has, at no
stage, chosen to challenge the registration so granted to respondent
no.1 societies wayback in the year 2009. In terms of the orders made
by this Court opportunity for raising objections had been granted to
the existing societies operating in the area and the record indicates
such existing societies had in fact, endorsed their 'no objection' for
grant of registration to respondent no.1 societies. In these
circumstances, Mr. Rayrikar contended that the petitioner bank,
which is an apex society, can hardly raise issues of adverse effect on
development of cooperative movement due to unhealthy
competition etc.
15] Mr. Rayrikar submitted that even otherwise, the petitioner
bank cannot refuse membership to an eligible society on the ground
that the registration of the society was, in the opinion of the
petitioner bank, unjustified. Mr. Rayrikar submitted that the
petitioner bank has no legal right or authority to sit in judgment
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over the decision of the Registrar for granting registration to a
cooperative society and that too without initiating any proceedings
to question the grant of registration.
16] Mr. Rayrikar submitted that the petitioner society has been
allotted a definite zone or an area for its operation, i.e., Pune
district. In such circumstances, Mr. Rayrikar submitted that the
provisions contained in Section 23 (4) of the MCS Act are clearly
attracted and the petitioner bank had no right or authority to refuse
membership to respondent no.1 societies. For all these reasons, Mr.
Rayrikar submitted that the impugned orders warrant no
interference.
17] The rival contentions now fall for determination.
18] There is no merit in the contention that the very registration
of respondent no.1 societies was in contravention of the provisions
contained in Section 4 of the MCS Act. Section 4 of the MCS Act
provides that a society, which has as its objects the promotion of
economic interests or general welfare of its members, or of the
public, in accordance with co-operative principles, or a society
established with the object of facilitating the operations of any such
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society, may be registered under the MCS Act. The proviso to Section
4 of the MCS Act states that no society shall be registered if it is
likely to be economically unsound, or the registration of which may
have an adverse effect on development of the cooperative
movement, or the registration of which may be contrary to the policy
directives which the State Government may, from time to time, issue.
19] In these cases, the objects of respondent no.1 societies include
the promotion of economical interests or general welfare of its
member in accordance with cooperative principles. The issue as to
whether such societies are economically unsound or whether the
registration will have adverse effect on development of the
cooperative movement, are basically issues for the Registrar to
decide at the stage of grant of registration. Section 9 of the MCS Act
provides that if the Registrar is satisfied that a proposed society has
complied with the provisions of MCS Act and the rules made there
under or any other law for the time being in force, or policy
directives issued by the State Government under Section 4 and that
its proposed bye-laws are not contrary to the MCS Act or the rules,
he shall, within two months from the date of receipt of the
application register the society and its bye-laws. Sub-section (3) of
Section 9 of the MCS Act provides that where the Registrar refuses
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to register a proposed society, he shall forthwith communicate his
decision, with the reasons therefor, to the person making such
application and if there be more than one, to the person who has
signed first therein. Section 10 of the MCS Act provides that a
certificate of registration signed by the Registrar, shall be conclusive
evidence that the society therein mentioned, is duly registered,
unless it is proved that the registration of the society has been
cancelled.
20] From the aforesaid scheme, it is quite clear that so long as the
registration of the society stands and so long as such registration has
not been cancelled by the Registrar, the certificate of registration
shall be conclusive evidence of the fact that the society was duly
registered. This means that any party, without seeking and obtaining
the cancellation of registration, cannot, ordinarily contend that the
society in respect of whom a certificate of registration has been
issued by the Registrar, was wrongly registered or that the same
should be regarded as having been wrongly registered. Such
collateral challenges are not consistent with the scheme of the
provisions contained in MCS Act.
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21] The petitioner bank, therefore, cannot contend that the
registration granted to respondent no.1 societies was legally infirm
or that the same ought not to have been granted and that too in
proceedings relating to denial of membership to such societies by the
petitioner bank, which is itself an apex society. The appellate
authority, in the facts and circumstances of the present cases, was
therefore, justified in rejecting such ground and allowing the
appeals instituted by respondent no.1 societies.
22] Further, as rightly pointed out by Mr. Rayrikar, issues in
relation to registration of respondent no.1 societies had in fact arisen
in Writ Petition No. 8001 of 2013 and connected matters. Although,
the petitions were not entertained, inter alia, on the grounds of lack
of locus standi of the petitioners, this Court, did advert to the issue of
adverse impact on development of cooperative movement, in case,
registration were to be granted to respondent no.1 societies,
particularly since there were large number of other cooperative
societies already operating in the area. Mr. Kanetkar, appearing for
the petitioners in the said petitions had submitted that such
registration would breed unhealthy competition between the
cooperative societies and therefore, impact upon the development of
cooperative movement in the area concerned. In this context, this
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Court, in its common judgment and order dated 6 May 2014 made
in Writ Petition No. 8001 of 2013 and connected matters, at
paragraphs 7 and 8 observed thus:
7. That apart, the impugned order is passed on 18th
August 2009 and Respondent No.1 was registered in the year
2009. Respondent No.1 thereafter filed an application for
enrollment with the Pune District Central Co-operative Bank
and litigation in this regard is pending. The fact remains that
Respondent No.1 society has started functioning from 2009
itself. The Petitioner has contended that he came to know
about the impugned order in the month of April 2012. Despite
this, petition came to be filed in the month of August 2013,
ie., after the lapse of one and half year from the alleged date
of knowledge and near about after four years of existence of
Respondent No.1. The Petitioner has not explained this delay.
Therefore, on the ground of delay and latches also, I am not
inclined to entertain this writ petition.
8. Before parting with the matters, I must make reference
to the submission made by Mr. Kumbhakoni. On the basis of
instructions given by Mr. Santosh Patil, Officer on Special
Duty from Co-operation Department, Mr. Kumbhakoni
made a submission that the existing societies in the
village in which Respondent No.1 is registered, have
given no objection for registration of new society. He
tendered for my perusal original of such no objection
given by the existing societies. Thus the existing
society/societies in the village has/have no objection for
the registration of Respondent No.1. However, the
Petitioner having no concern with the area of operation of
Respondent No.1, has challenged the impugned order. The
challenge in above circumstances cannot be entertained.
(emphasis supplied)
23] From the aforesaid, it is quite clear that this Court was
satisfied that the existing societies in the area of operation had given
their "no objection" for the registration of respondent no.1 societies.
The contention with regard to unhealthy petition and impact upon
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the cooperative movement on account of the registration of
respondent no.1 societies, therefore, at this stage, cannot prevail.
Further, if the petitioner bank, was indeed serious in its contention
that the very registration of respondent no.1 societies was in
contravention of the provisions contained in Section 4 of the MCS
Act or the policy directives issued by the State Government from
time to time, then, nothing prevented the petitioner bank from
taking out appropriate proceedings at the appropriate stage and
before the appropriate forum for frontally questioning such
registration. The petitioner bank, having failed to do this, cannot
indirectly ignore the effect of such registration and on the said basis,
deny membership to respondent no.1 societies by raising a collateral
plea that registration was itself legally infirm or ought not to have
been granted by the Registrar.
24] Reliance placed by Mr. Kanetkar upon the decision of this
Court in case Hiradgaon Vividh Karyakari Seva Sahakari Society
Ltd. Vs. The State of Maharashtra & ors. 1, does not really support
the case of the petitioner bank. In the said case, this Court has held
that if registration of a society is likely to be counter productive for
the purpose of registration of the society itself, then the proviso to
Section 4 of the MCS Act enables the authority to refuse registration.
1 2014 (1) ALL MR 867
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This decision is inapplicable to the issue with which we are presently
concerned. In these cases, the Registrar, upon satisfaction that the
registration of respondent no.1 societies was not counter productive,
has in fact granted registration. Till date, such registration has not
been cancelled. Attempts on the part of some other societies to
challenge this registration have not met with any success. The record
indicates existing societies in the area of operation have endorsed
their no objection to the registration of respondent no.1 societies.
For all these reasons, the decision in case of Hiradgaon Vividh
Karyakari Seva Sahakari Society Ltd. (supra), is not attracted to
the facts and circumstances of the present cases.
25] In the aforesaid circumstances, there is no warrant to interfere
with the impugned orders made by the appellate authority. Reliance
placed by the appellate authority upon the provisions contained in
Section 23(4) of the MCS Act is only for the purposes of buttressing
its conclusion that the denial of membership to respondent no.1
societies was illegal and improper. Even without reference to the
provisions contained in Section 23(4) of the MCS Act, the appellate
authority would have been entitled to make the impugned orders or
take the view, which it has ultimately taken in the impugned orders.
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26] Mr. Kanetkar, is not right in his submission that the provisions
contained in Section 23(4) of the MCS Act were not attracted
because the petitioner bank is not an agro processing society and
further that the provisions contained in Section 23(4) of the MCS
Act apply only to admission of a natural person and not societies like
respondent no.1.
27] Section 23 of the MCS Act, reads thus:
Section 23 - Open membership.- (1) No society shall, without
sufficient cause, refuse admission to membership to any person
duly qualified therefor under the provisions of this Act and its
by-laws.
[(1A) Where a society refuse to accept the application from an
eligible person for admission as a member, or the payment made
by him in respect of membership, such person may tender an
application in such form as may be prescribed together with
payment in respect of membership, if any, to the Registrar, who
shall forward the application and the amount, if any so paid, to
the society concerned within thirty days from the date of receipt
of such application and the amount; and thereupon if the society
fails to communicate any decision to the applicant within sixty
days from the date of receipt of such application and the amount
by the society, the applicant shall be deemed to have become a
member of such society.] [If any question arises whether a person
has become a deemed member or otherwise, the same shall be
decided by the Registrar after giving a reasonable opportunity of
being heard to all the concerned parties.]
(2) Any person aggrieved by the decision of a society, refusing
him admission to its membership, may appeal to the Registrar
(within a period of sixty days from the date of the decision of the
society]. [Every such appeal, as far as possible, be disposed of by
the Registrar within a period of three months from the date of its
receipt:
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Provided that, where such appeal is not so disposed of
within the said period of three months, the Registrar shall record
the reasons for the delay.]
(3) The decision of the Registrar in appeal, shall be final and
the Registrar shall communicate his decision to the parties within
fifteen days from the date thereof.
(4) Without prejudice to the foregoing provisions of this
section, in the case of agro-processing societies or any other
society for which a definite zone or an area of operation is
allotted by the State Government or the Registrar, it shall be
obligatory on the part of such society to admit, on an application
made to it, every eligible person from that zone or the area of
operation, as the case may be, as a member of such society,
unless such person is already registered as a member of any
other such society, in the same zone or the area of operation.
28] Although, it may be true that the petitioner bank may not be
an agro processing society, it must be noted that Section 23(4) of the
MCS Act applies not merely to an agro processing society, but also to
societies for which a definite zone or an area of operation is allotted
by the State Government or the Registrar. In the present cases, it was
not disputed that the petitioner bank being an apex bank, has been
allotted a definite area of operation, i.e., Pune district. In such
circumstance, it cannot be said that the provisions of Section 23(4)
of the MCS Act were not at all attracted to the facts and
circumstances of the present cases.
29] Further, there is no warrant to construe the expression 'every
eligible person' as it appears in Section 23(4) of the MCS Act to mean
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and apply to only natural person and not societies like respondent
no.1. Section 23(1) of the MCS Act also provides that no society
shall, without sufficient cause, refuse membership to "any person
duly qualified" under the provisions of the MCs Act and its bye-laws.
It is not even the case of Mr. Kanetkar that reference to the term
"person" in Section 23(1) of the MCS Act is restricted only to a
natural person. If this be so, then there is no reason to assign some
different meaning to the same term, when it comes to interpretation
of such term in Section 23(4) of the MCS Act. There is nothing,
either in the plain language or for that matter in the context, to
support some different construction.
30] That apart, Section 22 of the MCS Act , reads thus:
22. Person who may become member. - (1) Subject to the
provisions of section 24, no person shall be admitted as a
member of a society except the following, that is to say-
(a) an individual, who is competent to contract under the
Indian Contract Act, 1872;
(b) a firm, company or any other body corporate constituted
under any law for the time being in force, or a society
registered under the societies Registration Act, 1860;
(c) a society registered, or deemed to be registered, under
this Act;
(d) the State Government or the Central Government;
(e) a local authority;
(f) a public trust registered under any law for the time
being in force for the registration of such trusts;
(g) the depositor or the financial service user;
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Provided that, the provisions of clause (a) shall not apply
to an individual seeking admission to a society exclusively
formed for the benefit of students of a school or college:
Provided further that, subject to such terms and
conditions as may be laid down by the State Government by
general or special order, a firm or company may be admitted as
a member only of society which is a federal or urban society or
which conducts or intends to conduct an industrial
undertaking:
Provided also that, any firm or company, which is
immediately before the commencement of this Act, a member of
a society deemed to be registered under this Act, shall have,
subject to the other provisions of this Act, the right to continue
to be such member on and after such commencement.
Explanation.-For the purpose of this section "an urban
society" means a society the business of which mainly falls
within the limits of a municipal corporation, municipality,
cantonment or notified area committee.
(1A) Notwithstanding anything contained in sub-section (1),
the State Government may, having regard to the fact that the
interest of any person or class of persons conflicts or is likely to
conflict with the objects of any society or class or societies, by
general or special order, published in the Official Gazette,
declare that any person or class of persons engaged in or
carrying on any profession, business or employment shall be
disqualified from being admitted, or for continuing, as
members or shall be eligible for membership only to a limited
extent of any specified society or class of societies, so long as
such person or persons are engaged in or carry on that
profession, business or employment as the case may be; and the
question whether a person is or is not so engaged in or carrying
on any profession, business or employment or whether a person
belongs or does not belong to such class of persons as declared
under this sub-section and has or has not incurred a
disqualification under this sub-section shall be decided by the
Registrar under section 11.
(1B) Notwithstanding anything contained in sub-section (1),
where the Registrar has decided under section 11 that a person
has incurred a disqualification under subsection (1A), the
Registrar or the person not below the rank of District Deputy
Registrar of Co-operative Societies, authorised by him in this
behalf, may, by order, remove such person from the
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membership of the society; and such person shall cease to be a
member of the society on expiration of a period of one month
from the date of receipt of such order by him.
(2) Where a person is refused admission as a member of a
society, the decision (with the reasons therefor) shall be
communicated to that person within fifteen days of the date of
the decision, or within three months from the date of receipt of
the application for admission, whichever is earlier. If the society
does not communicate any decision to the applicant within
three months from the date of receipt of such application the
applicant shall be deemed to have been admitted as a member
of the society. If any question arises whether a person has
become a deemed member or otherwise, the same shall be
decided by the Registrar after giving a reasonable opportunity
of being heard to all the concerned parties.
31] From the aforesaid, it is quite clear that the term "person"
referred to in Section 22 includes not just an "individual", who is
competent to contract under the Indian Contracts Act, 1872, but also
includes a firm, a company or any other body corporate constituted
under any law for the time being in force, or a society registered
under the societies Registration Act, 1860 and most importantly a
society registered or deemed to be registered under the MCS Act.
Reference to the provisions contained in sub-section (1A) of Section
22 of MCS Act also supports such construction. This being the
position, it is not possible to accept the contention that the term
"person" referred to in Section 23(4) of the MCS Act is restricted
only to a natural person and not societies like respondent no.1
societies.
dss j-wp-8235-14-G.doc
32] Mr. Kanetkar also contended that respondent no.1 societies are
economically unsound and if they are enrolled as a member of the
petitioner bank, the petitioner bank will have no option, but to
advance loans or financial assistance to them. Relying upon the bye-
laws of the petitioner bank, Mr. Kanetkar submitted that any
member of the petitioner bank, in order to qualify as an "active
member" is required to avail loan from the petitioner bank. For this
reason, Mr. Kanetkar submitted that the membership of respondent
no.1 societies cannot be foisted upon the petitioner bank,
particularly since their financial position is quite unsound.
33] There are several reasons on account of which, Mr. Kanetkar's
aforesaid contention cannot be accepted. In the first place, this was
not the precise reason stated by the petitioner bank for the purposes
of denial of membership. Secondly, there is nothing in the bye-laws
of the petitioner bank, which obligates the petitioner bank to
advance loans to each and every member, irrespective of whether or
not claim for loan is justified or not. Obviously, the petitioner bank
will have its own rules, regulations and policies in the matter of
advance of loans or financial assistance. The petitioner bank will
also have its own procedures for determination of viability,
repayment capacity etc. All that bye-laws provide is that the
petitioner bank may not advance loan to any person or entity, other
dss j-wp-8235-14-G.doc
than its member. This does not mean that the petitioner bank is
obliged to advance loan to each and every member, irrespective of
whether or not such member fulfills other prescribed requirements
in the matter of availment of such loans or financial assistance.
34] In order that a member of the petitioner bank qualifies to be
"an active member" , such member is required to attend atleast one
general body meeting in the preceding five years and to avail of one
of the three specified services within the preceding five years. The
specified services include investment of a sum of Rs. 10,000/- by
way of fixed deposit for a period of two years with the petitioner
bank; obtaining loan from the petitioner bank or making use of the
banks locker facility for a period of one year. This means that it is
not peremptory that a member has to obtain loan from the petitioner
bank in order to qualify as an active member. In order to be
qualified as an active member, a member may invest the prescribed
amount for the prescribed period or avail bank's locker facility as
prescribed. Accordingly, it is not possible to accept the belated
contention of Mr. Kanetkar.
35] The petitioner bank has kept away respondent no.1 societies
from the membership since the year 2009. The petitioner bank
questioned the orders condoning delay in institution of appeals by
dss j-wp-8235-14-G.doc
respondent no.1 societies. At the instance of the petitioner bank, the
orders condoning delay were set aside by this Court and opportunity
for cross-examination was granted to the petitioner bank. The
Registrar, once again condoned the delay relying upon the material
on record. The petitioner bank once again questioned this decision
by instituting writ petitions and letters patent appeals. Upon
dismissal, the petitioner bank raised preliminary objection to the
maintainability of the appeals. The order stating that such objection
would be considered at the stage of disposal of the appeals itself was
again questioned by the petitioner bank by instituting writ petitions.
In this manner, the petitioner bank has postponed even the
adjudication of the appeals instituted by respondent no.1 since the
year 2011.
36] In Shalini Shyam Shetty & Anr. vs. Rajendra Shankar Patil 2,
the Hon'ble Apex Court has held that the High Courts cannot at the
drop of a hat, in exercise of its power of superintendence under Arti-
cle 227 of the Constitution of India, interfere with the orders of tri-
bunals or courts inferior to it. Nor can it, in exercise of this power,
act as a court of appeal over the orders of courts or tribunal subordi-
nate to it. The parameters of interference by High Courts in exercise
of power of superintendence have been repeatedly laid down by this
2 (2010) 8 SCC 329
dss j-wp-8235-14-G.doc
court. In this regard the High Court must be guided by the principles
laid down by the Constitution Bench of this court in Waryam Singh
Vs. Amarnath3, which have been repeatedly followed by the subse-
quent Constitution Benches and various other decisions of this
Court.
37] Upon cumulative consideration of the aforesaid facts and
circumstances, in my judgment, this is not a fit case to interfere with
the impugned orders in the exercise of extraordinary and equitable
jurisdiction under Articles 226 and 227 of the Constitution of India.
These petitions are therefore dismissed
38] Rule is discharged in all petitions. The interim orders, if any,
stand vacated.
39] There shall be no order as to costs.
[M. S. SONAK, J.]
3 AIR 1954 SC 215
