Bombay High Court
Gopikrishna Dudha Utpadak ... vs Assistant Registrar Cooperative ... on 29 September, 2016
Bench: Prasanna B. Varale
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
: NAGPUR BENCH : NAGPUR.
WRIT PETITION NO. 856 OF 2015
PETITIONER : Gopikrishna Dudha Utpadak Sahakari
Sanstha, through its Secretary,
Shri Murari S/o Jairam Deshmukh,
Aged about 52 years,
Office at Amgaon, Tah. Wadsa,
Dist. Gadchiroli.
ig - VERSUS -
RESPONDENTS : 1] Assistant Registrar,
Cooperative Society (Milk), Gadchiroli.
2] Shri D. D. Karpe,
Cooperative Officer Class-II,
Gadchiroli.
WITH
WRIT PETITION NO. 858 OF 2015
PETITIONER : Bhagyalaxmi Dudha Utpadak Sahakari
Sanstha, through its President,
Shri Yadavrao S/o Motiram Thakre,
Aged about 55 years,
Office at Kinhala, Tah. Wadsa,
Dist. Gadchiroli.
- VERSUS -
RESPONDENTS : 1] Assistant Registrar,
Cooperative Society (Milk), Gadchiroli.
2] Shri D. D. Karpe,
Cooperative Officer Class-II,
Gadchiroli.
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Mr. P. S. Tidke, Advocate for the petitioners.
Mr. H. R. Dhumale, A.G.P. for the respondent no.1
None for the respondent no.2, though served.
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::: Uploaded on - 03/10/2016 ::: Downloaded on - 05/10/2016 00:23:42 :::
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CORAM : PRASANNA B. VARALE, J.
DATE : SEPTEMBER 29, 2016.
ORAL JUDGMENT
By this petition, the petitioner-societies challenge the orders
passed by the respondent no.1 - Assistant Registrar, Cooperative
Societies, Gadchiroli, dated 30.10.2014, thereby issuing final order
under Section 102 of the Maharashtra Cooperative Societies Act, 1960.
The respondent no.1 was of the opinion that the petitioner-societies
need to undergo liquidation and further appointed an officer from the
Cooperative Department Shri D. D. Karpe, as a liquidator.
2] The petition was admitted by this Court by order dated
18.03.2015 and interim relief was granted.
3] The learned counsel for the petitioner submitted that the
petitioner-societies were registered for doing milk business through its
members. The society was running smoothly and was taking various
steps to achieve the objects for which the society was formed. The
learned counsel further submitted that the petitioner-societies have their
own bye-laws. The learned counsel further submitted that it was
alleged in the impugned final orders passed by the respondent-Assistant
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Registrar that the petitioner-societies failed to conduct Annual General
Meeting before 30th of September. It was further alleged that the
petitioner-societies failed to submit the audit statement on completion
of the financial year before 15th of May. It was also alleged that the
petitioner-societies failed to take necessary steps for adopting the model
bye-laws in view of the amendment effected in the Maharashtra Co-
operative Societies Act.
4] Mr. Tidke, the learned counsel for the petitioner-societies
submitted that though, in the final orders it was stated that an
intimation by communication, dated 02.04.2014 to remain present
along with the record, so also communication dated 31.05.2014 about
passing of interim order under Section 102 of the Act and calling
explanation in that respect were forwarded to the petitioner-societies,
they never received either the interim order passed by the concerned
authority or any notice/communication calling upon the petitioners to
submit say/explanation. Thus, the petitioner societies had no
opportunity of hearing. The learned counsel for the petitioner-societies
submitted that the final orders passed by the respondent no.1 authority
are unsustainable on the ground of failure to observe the principles of
natural justice i.e. no opportunity of hearing was granted to the
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petitioners at any point of time i.e. either at the time of passing interim
order or passing final order. The learned counsel further submitted that
though, the final orders impugned in the petitions refer to the date as
30.10.2014, the orders were received by the petitioner-societies on
10.01.2015.
5] The focus of the submissions of the learned counsel for the
petitioners was on failure of the authority concerned to observe the
principles of natural justice. The learned counsel submitted that the
orders passed by the respondent-authority are the orders of drastic
nature putting the wheels of running societies at a stand still position.
It was the further submission of the learned counsel that if an
opportunity would have been granted to the petitioner-societies, they
could certainly have satisfied the authority concerned on the aspect of
non-compliance of submission of audit statements and on the aspect of
adopting Model Bye-laws, but as no such an opportunity was granted,
the petitioner- societies were faced with the drastic order as bolt from
the blue and subjected to a serious prejudice. The learned counsel
further submitted that in near-like similar and identical facts and
situation, the Division Bench of this Court dealing with the provisions of
Section 102(1) & (2) of the Maharashtra Co-operative Societies Act,
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1960 and dealing with the identical order of appointment of liquidator,
disapproved the approach of the authority concerned of passing the
order without giving an opportunity of hearing to the concern society.
6] The learned Assistant Government Pleader for the
respondent no.1 made an attempt to support the orders impugned in
the petitions. The learned AGP submitted that as per Section 102(2)
of the Act of 1960, the petitioner- societies have a remedy to prefer an
appeal.
7] As stated above, the point for consideration before this
Court is whether the orders passed by the authority concerned,
impugned in these petitions i.e. final order appointing Liquidator on the
petitioner-societies without giving an opportunity of hearing, are
sustainable ?
8] In my opinion, the learned counsel for the petitioners was
justified in submitting that the issue is squarely covered by the
judgment of the Division Bench of this Court. The learned counsel was
also justified in submitting that in an identical situation, this Court in
the detailed judgment took stock of the situation and passed the order,
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thereby setting aside the order of the Assistant Registrar appointing the
Liquidator by way of interim order. It would be useful for our purposes
to refer to the judgment of the Division Bench of this Court reported in
2004(1) Mh.L.J. 232 in the case of Chandrapur Zilla Sahakari Krushi
and Gramin Bahuudeshiya Development Bank Ltd. .vs. State of
Maharashtra. The Division Bench framed the very issue, which reads
that -
"14. The crucial issue before us, however, is whether the
Registrar can take such a drastic decision, even if
termed as interim, without hearing the Societies ?
The Division Bench then observed thus :
"16. It is therefore, obvious that there is neither pre-
decisional hearing before the interim order is passed nor
such order is allowed to be appealed against. There is
only post-interim decisional hearing before the final
order is passed to vacate or confirm the interim order.
Section 103 further empowers the Registrar to appoint
a Liquidator of the society, even after the interim order
of winding up of the society. It further mandates that
after the interim order is passed, the society shall hand
over to the Liquidator the custody and control of all the
property, effects and actionable claims to which the
Society is entitled and the whole record pertaining to
the business of the Society and thereafter the Society
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will have no access to the same. Such is the drastic and
draconian provision empowering the Registrar to issue
an interim order to the Society to be wound up.
(emphasis supplied)
9] In the reported judgment, 2004(1) Mh.L.J. 232, cited supra,
though, an attempt was made before the Division Bench to justify the
interim order by drawing support from the judgment of the Hon'ble
Apex Court in the case of Liberty Oil Mills .vs. Union of India (AIR 1984
SC 1271), the Division Bench was pleased to observe that the judgment
of the Apex Court only supports the view of the Division Bench. The
Division Bench of this Court further refers to the judgment of the
Division Bench of Gauhati High Court in the case of Deputy Secretary to
the Govt. of Assam, Panchayat and Community Dev. Department .vs.
Moying Ch. Pegu and others, (AIR 1983 Gau.55) and observed that the
learned Judges (Gauhati High Court) have virtually codified the
principles and it would be a beacon light for the Courts considering the
issue like the one which we are called upon to decide. The Division
Bench then further referred to nine contingencies visualised by the
Division Bench of the Guahati High Court. It would not be necessary to
go into those nine contingencies. Suffice to refer to the basic
observation of the Division Bench of Gauhati High Court on the aspect
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of principle of natural justice. It was observed that - "natural justice is
undoubtedly a brooding omnipresence because of the strides made by the
Courts in India during the last two decades but the Courts have always
struck a balance between the expansion of the Rule and the empirical
socio-economic needs, public interest and the authority of the legislature".
It was further observed that the case before the Division Bench i.e.
interim order passed by the Registrar appointing Liquidator was one of
the case covering the illustrative contingencies carved out by the
Division Bench of the Gauhati High Court. The Division Bench of this
Court further observed that "It is, therefore, crystal clear that before
passing an interim order affecting the crystallized and vested rights, pre-
decisional hearing would be necessary as such orders would have
"immediate and grave prejudicial repercussions on the person concerned"
and, therefore, it would be desirable to hear him before the order of
suspension is passed". The Division Bench then in clear and
unambiguous words observed that 'We, therefore, are of the firm opinion
that the principles of natural justice cannot be dispensed with for the
action under Section 102(1)(c) of the Act. The Registrar is duty bound to
grant hearing to the concerned Society against which an interim order of
winding up is proposed or contemplated." (emphasis supplied)
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10] The Division Bench of this Court in its reported judgment
cited supra, on assessing the interim order passed by the Registrar
under Section 102(1)(c) of the Act further observed that, "we fail to
understand how the Registrar can act "on his own" unless he puts the
material gathered by him to concerned Society ? There is always an
otherwise in every matter. All the facts situation prescribed in section
102(1)(c) from the very nature do warrant hearing the Society before
issue of interim order to wind up. In all these eventualities, the Registrar
must act on very good and tangible material before passing the semi-fatal
order of winding up of a Society". The Division Bench further observed
that "we must remember that the Registrar under the Act is the
Administrative Head with large judicial and quasi-judicial powers vested in
him. The powers conferred on him under Section 102 are akin to the
powers of a Court of Law. They have all the semblance and trappings of
judicial powers which he must exercise with great care and
circumspection". The Division Bench then refers to the another
judgment of the Division Bench of this Court in the case of Yeshwant
Bandhkam Majur Sahakari Soc. Ltd. .vs. Assistant Registrar of Co-op.
Societies and another ; (1998 (3) All MR 837). It would be useful to
note that in Yeshwant Bandkam Majur Sahakari Soc.'s case, it was
informed to the Division Bench that the Registrar had passed final order
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under Section 102(2) ordering final winding up of the Societies during
the intervening period. As the Division Bench was of the opinion that
the order impugned in the petition needed to be quashed and set aside,
the Division Bench observed that it is needless to say that the
consequences of quashing the interim order would be that the final
orders would also fall as held by the Supreme Court in the judgment of
Haribhau Dagdu Tandale .vs. Industrial Co-operative Association Ltd and
others ; (JT 1969(9) SC 211).
11] The learned counsel for the petitioner also relied on the
judgment of the learned Single Juge of this Court, reported in 2014 (6)
Mh.L.J. 200 in the case of Jaya w/o Chandrakant Admane and
another .vs. State of Maharashtra and others in support of his submission
that before initiating any proceeding for winding up the society, the
inviting provisions of Sections 83, 84 and 102 of the Act of 1960 and
enquiry or inspection is sine qua non.
12] Thus, it leaves no scope to arrive at a conclusion that the
respondent - Assistant Registrar, Cooperative Societies, Gadchiroli
before passing the orders dated 30.10.2014, was required to grant an
opportunity of hearing to the petitioner-society and once this position is
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accepted, the only conclusion which can be drawn is, the orders passed
by the Assistant Registrar, impugned in these petitions are clearly
unsustainable.
13] In the result, the writ petitions are allowed.
The orders impugned in the petition passed by respondent
no.1 - Assistant Registrar, Cooperative Societies, dated 30.10.2014 are
quashed and set aside.
Needless to state that if the respondent-authority is of the
opinion to initiate any action against the petitioner-societies under the
provisions of the Maharashtra Cooperative Societies Act, 1960, more
particularly under the provisions of Section 102, the authority can
initiate the proceedings by following the principle of natural justice i.e.
by giving an opportunity of hearing to the petitioner societies.
Rule is made absolute in the aforesaid terms. No order as
to costs.
JUDGE
Diwale
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C E R T I F I C A T E
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