Bombay High Court
Sachin Nester Pereira vs The State Of Maharashtra And Ors on 9 November, 2017
Bench: M.S. Sanklecha
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELATE JURISDICTION
WRIT PETITION (St.) NO. 30663 OF 2017
Sachin Nester Pereira
An Adult, Indian Inhabitant,
presently R/at "Nest", Naglaiwadi,
Saloli, Badami Stop, Giriz,
Vasai (W), Dist. Palghar .. Petitioner
v/s.
1. The State of Maharashtra
2. The Hon'ble Minister for Co-operation,
Mantralaya, Mumbai through the office
of the Government Pleader, High Court,
Appellate Side, Bombay
3. Shri. Cias J. Fernandes,
"Bethel" Nagbhat, Undalewadi,
Near Acton Cross, Sandor,
Vasai (W), Dist. Palghar
4. The Bessein Catholic Co-operative
Bank Ltd., a Schedule Bank
having its Head Office at Papdy Naka,
Tal. Vasai, Dist. Palghar
5. Commissioner for Co-operation and
Registrar, Co-operative Societies
Maharashtra State, Pune-1
6. Ryan Ignatius Fernandes
R/at "Orchid", Diwanwadi Papdy,
Vasai (W), Palghar - 401 207
7. Noel Anthony Vaz
Priyanvel, Digha, Kokaramwadi
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Papdy, Tal. Vasai, Dist. Palghar
8. Jimmy M. Gonsalves
Anthony House, Ghas, Bharti
Post - Sopara, Tal. Vasai,
Dist. Palghar .. Respondents
Mr. Prasad Dani, Senior Counsel a/w Mr. Ajay Fernandes i/b
Mangesh Chavan for the petitioner
Ms. Neeta Karnik a/w Mr. Kishor Patil, Mr. Pravin Fernandes for
respondent no.6
Mr. S.H. Kankal, AGP for respondent nos. 1, 2 and 5
Mr. Anthony F. Foss for respondent nos. 7 and 8
Ms. Brian D'lima & Irine D'lima i/b M/s. D'lima & Associates for
respondent no. 4.
CORAM : M.S. SANKLECHA, J.
DATED : 9th NOVEMBER, 2017
ORAL JUDGEMENT :-
1. At the request of Counsel, the Petition is finally heard at the
stage of admission.
2. This petition under Article 227 of the Constitution of India
impeaches the order dated 31st October, 2017 passed by the Hon'ble
Minister for Co-operation (respondent no.2) State of Maharashtra.
The impugned order dated 31st October, 2017 has been passed in
Revision under Section 154 of the Maharashtra Co-operative
Societies Act, 1960 (the Act). It upholds the order dated 9th March,
2017 of the Commissioner and Registrar of Co-operative Societies
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(respondent no.5) holding that the petitioner has ceased to be a
member of the Board of Directors of the Bassein Catholic Co-
operative Bank Ltd. (Bank) i.e. respondent no.4 w.e.f. 9 th March,
2017 under Section 73CA of the Act. This cessation of directorship
on the ground that the petitioner had became a father of third child
on 20th March, 2016 i.e. during the tenure of his office.
3. The petitioner's grievance with the impugned order is
principally on interpretation of Section 73CA of the Act i.e. dis-
qualification therein does not apply if incurred during the tenure of
office but only applies where disqualification is incurred before
assuming office. Besides the grievance is of the procedure
(including the decision making process) followed in holding that the
petitioner had ceased to be a Director of respondent no.4 bank. It is
to be noted that the vires of Section 73CA of the Act even to the
extent it declares that a person becomes ineligible/ ceases to be a
Director on having more than two children, is not challenged.
4. Briefly, the facts leading to the passing of the impugned order
dated 31st October, 2017 and filing of this petition are as under :-
(a) On 23rd June, 2015, the petitioner was elected as a
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Director of respondent no.4 bank in general elections held on 21 st
June, 2015. The tenure of the petitioner on the Board of Directors
of respondent no.4 bank was for 5 years w.e.f. 23 rd June, 2015 i.e. till
2020.
(b) In the midst of his tenure as a Director of respondent
no.4 bank, the petitioner was blessed with a third child on 20 th
March, 2016. The aforesaid fact was brought to the notice of the
Registrar - respondent no.5 by one Mr. Cias J. Fernandes -
respondent no.3.
(c) In view of the above, on 15 th October, 2016 the
respondent no.5 issued a show-cause notice to the petitioner calling
upon him to show-cause as to why he continues as a Director of
respondent no.4-bank. This on the ground that on becoming a father
of a third child on 20th March, 2016, he ceased to be a Director. The
impugned notice dated 15th October, 2016 was issued under Section
73CA read with Section 78A of the Act.
(d) On 20th January, 2017, the petitioner responded to the
show-cause notice dated 15th October, 2016. In his response, the
petitioner did not dispute the fact that he is a father of three
children. However, according to him, the third child was both
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conceived and delivered after he was elected to the post of Director
to the respondent no.4 bank. Therefore, it was submitted that the
disqualification under Section 73CA of the Act would not apply. It
was further submitted by him that the vires of Section 73 CA of the
Act is a subject of challenge before the Nagpur Bench of this Court
being Writ Petition No.212 of 2017 and awaiting final decision.
Therefore, it was submitted that these proceedings be adjourned till
a decision is rendered on the constitutional validity of Section 73CA
of the Act, by the Nagpur Bench of this Court in the above Writ
Petition No.212 of 2017.
(e) On 9th March, 2017, the respondent no.5 - Registrar
passed an order under Section 73 CA r/w Section 78A of the Act
confirming the Show-Cause Notice dated 15 th October, 2016. It held
that the petitioner has ceased to be a Director of respondent no.4
bank in view of the fact that he now undisputedly has more than
two children and is hit by Section 73CA(1)(vii) of the Act. Thus,
ineligible to be remain as a Director of any Co-operative Society and
had ceased as a Director of respondent no.4 bank.
(f) Being aggrieved with the order dated 9th March, 2017,
the petitioner filed a Revision Application under Section 154 of the
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Act to the State Government. In its Revision Application, the
petitioner has contended that Section 73CA(1)(vii) of the Act cannot
be applied retrospectively to unseat a sitting member of the Board of
Directors of respondent no.4 bank. The critical date for
disqualification to apply is the date of taking the seat on Board of
Directors. It was also submitted that although Section 78A of the Act
was invoked the respondent no.5 Registrar both in the notice as well
as in his order, the federal society / bank in terms thereof was not
consulted before passing the order dated 9th March, 2017.
(g) The petitioner thereafter was heard by the Minister on
numerous dates, the last such date was 11 th October, 2017 in support
of its Revision Application. Thereafter, the impugned order dated 31 st
October, 2017, dismissed the petitioner's Revision Application.
5. Mr. Dani, learned Senior Counsel appearing in support of the
petitioner states that the impugned order dated 31 st October, 2017 is
unsustainable in law on account of following :-
(a) On plain interpretation of Section 73CA of the Act, the
disqualification therein is only applicable to a person having more
than two children at the time a person is appointed, nominated,
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elected, co-opted as a member of the Board of Directors /
Committee. It can have no application where a person such as the
petitioner has a third child, during the tenure of his office to which
he was elected.
(b) The impugned order is without reasons inasmuch as the
petitioner's contention that in terms of Section 78A of the Act, the
respondent no.5 Registrar before holding that he has ceased to be a
Director of respondent no.4 bank, had not consulted the federal
society / bank. This aspect/ grievance of the Petitioner has not been
dealt with in the impugned order.
(c) Section 73CA of the Act has to be read with Section 78A of
the Act. It is only when the Registrar holds that the petitioner has
been dis-qualified and removed in terms of Section 78A of the Act,
that the consequent order of the petitioner ceasing to be a member
on the Board of Directors of respondent no.4 bank can be passed.
The Registrar not having complied with Section 78A of the Act,
cannot hold that the petitioner is dis-qualified and ceased to be a
member of the Board of Directors of respondent no.4 bank.
(d) Rule 58 of the Co-operative Societies Rules, 1961 (Rules)
which empowers the Registrar to issue an order of cessation of
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membership of committee of the Society such as on board of
directors in this case, is ultra-vires the Rule making power in Section
165 of the Act. Thus, no power can be exercised by the Registrar
under Rule 58 of the Rules to hold a person is dis-qualified from
membership of the Committee / Board of Directors under Section
73CA of the Act.
6. On the other hand, Mr. Kankal, learned AGP for the State and
Ms. Karnik, learned Counsel appearing for respondent no.6 support
the impugned order dated 31st October, 2017 and submit as under :-
(a) Section 73CA of the Act makes it clear that the
disqualification listed therein leads to cessation of office. This is for
falling foul of its provisions, while in office and not necessarily in
respect of its breach prior to election, appointment, nomination or
co-option to the Board of Directors / Committee of the Society;
(b) The entire issue on procedural breach of non-removal of
the petitioner under Section 78A stands concluded by the decision of
the full bench of this Court in Narayan S/o Gujabrao Bhoyar Vs.
Yeotmal Zilla Parishad Karmachari Sahakari Path Sanstha
Maryadit, Yeotmal & Anr. 2009(6) Mh.L.J. 500. In the above case,
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the Court in the context of orders passed for cessation of a
membership of the Committee / Board of Directors under Section
73FF of the Act being precursor to Section 73CA of the Act
(identically worded) held that the invocation of Section 78 of the Act
being precursor to Section 78A of the Act was not a sine qua non for
holding that a person has ceased to be member under Section 73FF
of the Act. The ratio of the above decision would apply to the
present facts. This is primarily a case of cessation of a member in the
Board of Directors and not removal; and
(c) Admittedly, the show-cause notice dated 15 th October,
2016 and order dated 9th March, 2017 passed by the Registrar did
invoke Section 78A of the Act while holding that the petitioner has
ceased to be a Director of the respondent no.4 bank. However, a
mere reference to an incorrect Section / provision of law will not
make the proceedings / order bad in law, if the exercise of the power
can be traced / sourced to another provision. In this case, the
exercise of power by the Registrar in passing the order is traced to
Rule 58 of the Rules.
7. Before considering the rival submissions, it would be useful to
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reproduce the relevant provisions, which arise for consideration in
the context of the submissions made by the rival parties.
"73CA . [Dis-qualification of committee and its
members]
(A1) .................
(1) Without prejudice to the other provisions of this Act
or the rules made thereunder in relation to the
disqualification of being member of a committee, no person
shall be eligible for being elected appointed, nominated, co-
opted or, for being a member of a committee, if he -
(i) is a defaulter of any society;
Explanation - For the purposes of this clause, the term
"defaulter"
(a) to (d) and (f) .... .... .... ....
(e) in the case of housing societies, a member who
defaults the payment of dues to the society within three
months from the date of service of notice in writing served
by pose under certificate of posting demanding the payment
of dues;
(ii) ......
(iia) .......
(iii) .......
(iv) has incurred any dis-qualification under this Act or
the Rules made thereunder
(v) .......
(vi) .......
(vii) has more than two children :
Provided that, a person having more than two
children on the date of commencement of the Maharashtra
Co-operative Societies (Third Amendment) Act, 2001
(hereinafter in this clause referred to as "the date of such
commencement"), shall not be disqualified under this clause
so long as the number of children he had on the date of such
commencement does not increase :
Provided further that, a child or more than one child
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born in a single delivery within the period of one year from
the date of such commencement shall not be taken into
consideration for the purpose of dis-qualification mentioned
in this clause.
Explanation - For the purposes of this clause -
(a) where a couple has only one child on or after the date
of such commencement, any number of children born out of
a single subsequent delivery shall be deemed to be one
entity;
(b) "child" does not include an adopted child or children."
(viii) ........
(ix) ........
2. A member who has incurred any dis-qualification
under sub-section (1), shall cease to be a member of the
committee and his seat shall thereupon be deemed to be
vacant.
3. ........
3A. .......
4. .........
78A. Power of supersession of committee or removal of
member thereof.
(1) If in the opinion of the Registrar, the committee or
any member of such committee has committed any act,
which is prejudicial to the interest of the society or its
members or if the State Co-operative Election Authority has
failed to conduct the elections in accordance with the
provisions of this Act or where situation has arisen in which
the committee or any member of such committee refuses or
has ceased to discharge its or his functions and the business
of the society has, or is likely to, come to a stand-still, or if
serious financial irregularities or frauds have been
identified or if there are judicial directives to this effect or, if
there is a perpetual lack of quorum or, where in the opinion
of the Registrar the grounds mentioned in sub-section(1) of
section 78 are not remedied or not complied with, or where
any member of such committee stands disqualified by or
under this Act for being a member of the committee, the
Registrar may, after giving the committee or the member, as
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the case may be, an opportunity of stating its or his
objections in writing as provided under sub-section (1) of
section 78 and after giving a reasonable opportunity of
being heard, and after consultation with the federal society
to which the society is officiated comes to a conclusion that
the charges mentioned int eh notice are proved, and the
administration of the society cannot be carried out in
accordance with the provisions of this Act, rules and by-
laws, he may by order stating reasons therefor,-
(a) (i) supersede the committee; and
(ii) appoint a committee consisting of three or
more members of the society otherwise than the members of
the committee so superseded, in its place, or appoint an
administrator or committee of administrators who need not
be the members of the society, to manage the affairs of
society for a period not exceeding six months:
Provided that, the Registrar shall have the power to
change the committee or any member thereof or
administrator or administrators appointed at his discretion
even before the expiry of the period specified in the order
made under this sub-section:
Provided further that, such federal society shall
communicate its opinion to the Registrar within forty-five
days, from the date of receipt of communication, failing
which it shall be presumed that such federal society has no
objection to the order of supersession or removed of a
member and the Registrar shall be at liberty to proceed
further to take action accordingly:
Provided also that, in case of a society carrying on the
business of banking, the provisions of the Banking
Regulation Act, 1949, shall also apply and the committee
shall not be superseded for a period exceeding one year:
Provided also that, nothing in this sub-section shall
apply to a society, where there is no Government
shareholding or loan or financial assistance in terms of any
cash or kind or any guarantee by the Government:
(b) remove the member :
Provided that, the member who has been so removed
shall not be eligible to be re-elected, re-co-opted or re-
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nominated as a member of any committee of any society till
the expiry of period of next one term of the committee from
the date on which he has been so removed:
Provided further that, in case of society carrying on
the business of banking, the provisions of the Banking
Regulation Act, 1949, shall also apply.
(2) The provisions of sub-sections (3), (4), (5) and (6) if
section 78 shall apply mutatis mutandis, in relation to
supersession or removal under this section."
Section 165
(1) The State Government may for the whole or any part
of the State and for any society or class of societies, make
rules for the conduct and regulation of the business or such
society or class of societies, and for carrying out the
purposes of this Act.
(2) In particular, and without prejudice to the generality
of the foregoing power, such rules may."
(i) to (lxxv) ......
Rules
58 - Dis-qualification of committee and its members
When on communication by the Chief Executive
Officer or society or otherwise, the Registrar comes to
know that any member of the committee incurs
disqualification as mentioned in section 73 CA and the
Bye-laws, the Registrar shall, after giving an opportunity
of being heard, issue an order of cessation of
membership of such member from the committee of the
society;
Provided that, the Registrar shall decide the matter
within sixty days from t he date of such communication or
otherwise."
8. Before dealing with the grievance of the petitioner, the
accepted / undisputed facts are that the petitioner :-
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(i) was elected as Director of respondent no.4 bank on 23 rd June,
2015 for a tenure of five years; and
(ii) during his tenure as a Director of respondent no.4 bank, he
had been blessed with a third child on 20th March, 2016.
Although the vires of Section 73CA(1)(vii) of the Act has not been
challenged, yet it is submitted by the petitioner that Section 73CA(1)
(vii) of the Act on its interpretation would not apply in case a third
child born after the petitioner has entered office as a Director on the
Board of respondent no.4 bank.
9. It is submitted that the disqualification under Section 73CA(1)
(vii) of the Act is by virtue of a person not being eligible to be
member of the committee in case the person has more than two
children, only at the time of his election, appointment, nomination,
or co-option on the board of directors / committee. A dis-
qualification incurred subsequent to he being elected, appointed,
nominated, and co-opted, would not attract Section 73CA(1)(vii) of
the Act. Thus, in such a case it is urged that there can be no
cessation of membership of the committee. This interpretation is
based on the words "shall be eligible for being elected, appointed,
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nominated, co-opted or for being a member of Committee" would
mean at the time of election. The word "eligible" means legally
qualified i.e. capacity to hold a post in the absence of disqualification
specified therein. The words which require consideration in sub-
section(1) of Section 73 CA of the Act are "no person shall be eligible
for being appointed, nominated, elected, co-opted or, for being a
member of the society". Thus, the plain reading of the above would
indicate that a person who stands disqualified by various sub-clauses
therein is not eligible i.e. capable of being elected, nominated,
appointed, co-opted or for being a member of the Committee. The
aforesaid clause if analyzed would read as :-
No person shall be eligible:
(a) for being appointed, nominated, elected, co-opted;
or
(b) for being a member of the Committee.
Therefore, the ineligibility would not only make a person
incapable of being elected etc. but also from continuing as a member
of the Committee. This is so as the words being elected, nominated,
co-opted, appointed is a distinct class of persons who are dis-
qualified from being considered for the office, in view of
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disqualification for being a member of the committee. Thus, where a
person after being elected, incurs any disqualification indicated in
Section 73CA of the Act, he becomes ineligible to be a member of the
committee i.e. the second category. It is from the day he incurs the
dis-qualification, that he becomes ineligible to continue as a member
of the Committee/ Board of Directors.
10. The above view finds further support by sub-section (2) of
Section 73CA of the Act, which declares that on incurring
disqualification under sub-section (1) thereof, the person shall cease
to be a member of the committee. This ceasing of being a member of
the Committee is either because the person was already ineligible
from contesting the election or being appointed, co-opted etc.
because of the disqualification incurred earlier or became ineligible
from continuing as a member on incurring of the dis-qualification
after having became a member of the committee. Thus, the
submission that sub-section (2) of Section 73CA of the Act is only
restricted to those members of the committee, who had incurred any
dis-qualification listed out in sub-section (1) thereof prior to their
election, appointment etc. to the Board of Directors / Committee is
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contrary to the plain reading of section. In fact, the interpretation
advanced by the petitioner does violence to the plain language of
Section 73CA of the Act. Besides, frustrating the stated purpose /
object of the legislation in introducing Section 73CA of the Act which
is that a person shall not be eligible to be appointed, elected, co-
opted etc. if he has more than two children and he would also cease
to be eligible, if he has more than two children after taking office as
a member of the Committee. This, is clearly evident from plain
reading of Section 73CA of the Act. If the submission of the
petitioner is to be accepted, then, a defaulter of the society would
only mean that the person has to be defaulter before he is elected,
co-opted etc. as a member of the committee and thereafter he would
have a license to commit a default in making due payment to the
society and yet be a part of the committee which manages the Co-
operative Society. In fact, the provisions of Section 73CA of the Act
are self-operative and in a case like this one, where the petitioner
does not dispute that he has more than two children, then instead of
litigating, a member should suo moto tender his resignation as he
happens to have more than two children during the tenure of his
office. This in fact, is the statutory terms of his appointment/
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election as a member of the committee. Thus, I do not find any merit
in the petitioner's above contention.
11. It was next contended on behalf of the petitioner that the
impugned order dated 31st October, 2017 has not considered and
dealt with the petitioner's submission that in the absence of Section
78A of the Act being complied in its full rigour i.e. including
consultation with the federal society, the petitioner could not have
been held to be disqualified. Admittedly, this submission has not
been dealt with in the impugned order. No doubt, the show-cause
notice as well as the order dated 9th March, 2017 passed by the
Registrar - respondent no.5 did invoke Section 78A of the Act and
yet Section 78A was not complied with in its entirety inasmuch as
consultation with the federal society was not done before unseating
the petitioner from his elected post. This by holding the petitioner
was disqualified to be a member of the committee. Even if the same
is not referred to in the impugned order, the issue still is whether
Section 78A of the Act applies in the present facts, as the exercise of
power by the Registrar-Respondent No.5 is in terms of Rule 58 of the
Rules. It is this specific provision which gives power to the
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respondent to pass orders of cessation of membership of a committee
in case of persons who incur disqualification under Section 73CA of
the Act after following the principles of natural justice. It is
axiomatic in law that once a power exists to perform a particular
function, reference to an incorrect provision of law while exercising
that function will not stop the Authority from performing the
function nor would the exercise of such power be rendered illegal on
that account, as held by the division bench of this Court in Anirudha
Vs. Ramnivas Meena, 2005(4) Mh.L.J. 42. In fact, as held by the
Apex Court in M. Mani Vs. Sangeeta Theatre 2004(12) SC 278
"It is well settled that if an authority has a power under the law merely
because while exercising that power the source of power is not
specifically referred to or reference is made to a wrong provision of law,
that by itself does not vitiate the exercise of powers so long as the power
does exist and can be traced to a source available in law".
Thus, in the absence of prejudice being shown by the Petitioner
because of the impugned order non-dealing with its submissions,
there is no reason to set aside the impugned order for fresh
consideration. In fact, full opportunity was given to the Petitioner
before me to establish that on consideration of the above submission
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in the present facts, the impugned order is unsustainable because of
the above. This they were unable to establish.
12. The reliance by the respondents upon Rule 58 of the Rules to
support the exercise of powers under Section 73CA of the Act is
taken exception to by the petitioner. This on the ground that the
conferment of power under Rule 58 of the Rules to the Registrar is
ultra-vires the Rule making power under Section 156 of the Act. In
particular, attention is invited to sub-section (2) to Section 156 of the
Act to submit that in the absence of any specific clauses therein to
make Rules to declare a person disqualified, the same is ultra-vires
the Rule making power. This submission completely ignores the fact
that sub-section (2) of Section 156 of the Act is without prejudice
to the general power to make Rules under sub-section (1) thereof.
In fact, the issue is now settled by the Apex Court in Assistant
Collector of Central Excise Vs. Ramkrishna Kulwant Ravi , AIR
1989(SC) 1829. In the above case, Rule 10A of the Central Excise
Rules, 1944 (Excise Rule) was being challenged as being ultravires
the Rule making power under Section 37 of the Central Excise Act,
1944 (Excise Act). The Court held that Section 37(1) of the Excise
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Act enable the Central Government to make rules to "carry into effect
the purposes of the Act". Section 37(2) of the Excise Act enumerated
the issues / matters for which the Rules could be made for. It
provided "in particular and without prejudice to the generality of the
foregoing powers". Thus, the Court held that enumerated issue in
sub-section (2) of Section 37 of the Excise Act was not exhaustive of
the Rules, which could be made. Therefore, any Rule which could be
shown to have been made "to carry its effect the purpose of the Act"
will have an legitimate source. In this case, Section 165(1) and (2)
of the Act are similarly worded. Therefore, Rule 58 of the Rules is
not ultravires to Section 165 of the Act. The source of framing the
Rule 58 of the Rules is found in Section 165(1) of the Act i.e. for
carrying out purposes of the Act.
13. Moreover, in any event, the issue of Section 78A of the Act
being applicable for invocation / implementation of Section 73CA of
the Act is concerned, stand settled against the petitioner by the full
bench decision of this Court in Narayan (supra) while dealing with
Section 73 FF and 78 of the Act, which are admittedly the precursors
to Section 73CA and 78A of the Act, and are similarly worded. The
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full bench in Narayan (supra) had an occasion to consider the issue
whether the cessation of membership under Section 73FF(2) of the
Act is automatic or whether it is necessary to take action and pass
an order of removal under Section 78 of the Act. The full bench has
held that the provisions of Section 73 FF of the Act (precursor of
Section 73A) and 78 (precursor of Section 78A) are independent
provisions and operate in their respective fields. They are distinct
and different. The Court held that the provisions of Section 73FF of
the Act has to be applied with the minimum compliance to the
principles of natural justice. Incidentally, now Rule 58 of Rules
specifically provides for giving of notice and hearing the party
concerned before holding that a person ceases to hold office as a
member of managing committee under Section 78CA of the Act. The
Court held that the removal as postulated under Section 78 is not
sine qua non for holding cessation of a person's membership of the
committee.
14. In fact, the question for consideration before the full bench in
Narayan (supra) was as under :-
Whether the cessation of membership under Section 73FF(2) is
automatic or whether it is necessary to take action and pass an
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order of removal under Section 78 of the Act?
This was answered in the negative by recording its answers to
the question raised as under :-
"(a) Provisions of sections 73FF and 78 are independent
provisions and operate in their respective fields on the
stated grounds and their consequences are distinct and
different. They are not even indispensably interdependent.
(b) The declaration of a defaulter resulting in
disqualification as contemplated under Section 73FF(1) has
to be made by minimum compliance to the principles of
natural justice which will have to be read into the
provisions of section 73. The competent forum would be
expected to issue a notice / intimation calling upon the
member of the committee to show cause as to why he be not
declared as a defaulter. Considering his reply, if any
submitted, a declaration shall be made.
(c) Once such a declaration is made in compliance with
the provisions of Rule 58, the provisions of section 73FF(2)
will come into play automatically and there shall be
cessation of membership of the committee of that member
and his seat shall be deemed to have fallen vacant,
obviously not affecting his primary membership of the
Society adversely unless otherwise removed / expelled from
such membership in accordance with law.
(d) We make it clear that passing of an order of removal
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as postulated under section 78(1) is not a sine qua non to
invocation of the provisions for cessation of membership of
the Committee in terms of section 73FF(2) of the Act.
(e) Consequences of disqualification incurred by a
member of a Committee stated under section 73FF (1) are
certainly distinct and different than the consequences
flowing from an order made for removal under section
78(1) of the said Act - In a case under section 73FF, upon
earning disqualification, there is cessation of membership
of the Committee and automatic vacation of seat for the
period as regulated under the provisions of section 73FFF -
While the order of removal passed under Section 78(1)
would remain in force unless disturbed / set aside by the
Competent Authority under the provisions of the Act."
(emphasis supplied)
15. Thus, the aforesaid decision of the full bench of this Court in
Narayan (supra) would cover the issue of invocation of Section 78A
of the Act while holding a cessation of membership of a Committee
under Section 73CA(1)(vii) of the Act against the Petitioner.
16. In the above view, Petition dismissed. No order as to costs.
(M.S. SANKLECHA, J.)
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17. At this stage, Mr. Fernandes, learned Counsel appearing for the
petitioner seeks stay of this order since the petitioner intends to
challenge the same before the Apex Court. In the facts and
circumstances of the case, there shall be a stay of this order for a
period of 4 weeks from the date this order is uploaded and available
on the High Court website. The above stay shall be on the same
condition as that was operating during the pendency of the
petitioner's Revision Application before the Hon'ble Minister i.e. the
petitioner herein shall not pilot any major policy decisions or
decision involving major financial repercussions to be bank.
(M.S. SANKLECHA, J.)
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