Nagrik Sahakari Rugnalaya And ... vs The Honble Minister, ...
2017 Latest Caselaw 7092 Bom

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                                       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                                 NAGPUR BENCH : NAGPUR



                                                         WRIT PETITION NO.977/2017

Nagrik Sahakari Rugnalaya and 
Research Center Ltd., a Society
Registered under the Maharashtra
Co-operative Societies Act, 1960, 
having its office at North Ambazari 
Road, Nagpur, through its Chairman 
Anant S/o Narayanrao Gharad.                                                                                                                                    ..Petitioner.

               ..Vs..

1.             The Hon'ble Minister, Co-operation, 
               Marketing and Textiles Department, 
               Hutatma Rajguru Chowk, Madam 
               Kama Marg, Mantralaya, Mumbai - 32. 

2.             State of Maharashtra, Department of 
               Co-operation, Marketing and Textiles, 
               through its Principal Secretary, Mantralaya, 
               Mumbai 400 032. 

3.             Commissioner of Co-operation and 
               Registrar, Co-operative Societies, Pune. 

4.             Shri Avinash S/o Ganpatrao Shegaonkar, 
               aged Major, R/o Choti Dhantoli, Mehadia 
               Square, Nagpur.

5.             Shri Vinayak S/o Vivek Dani, 
               aged Major, R/o Plot No.270, Central
               Bazar Road, Ramdaspeth, Nagpur.                                                                                                     ..Respondents.
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               Shri S.A. Dharmadhikari, Advocate for the petitioner. 
               Shri N.R. Patil, A.G.P. for respondent Nos.1 to 3. 
               Shri K.H. Deshpande, Senior Advocate with Shri A.M. Sudame, Advocate for respondent No.4.
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                                                                 CORAM :  S.C. GUPTE, J.

                                                                 DATE  :     13.9.2017.




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ORAL JUDGMENT



             Heard learned counsel for the parties. 

2. Rule. Taken up for hearing forthwith by consent of counsel.

3. The present petition challenges a revisional order passed by the

Minister of Co-operation, Marketing and Textiles passed under Section 154 of

the Maharashtra Co-operative Societies Act, 1960.

4. The controversy before the Hon'ble Minister concerns the bye-laws

of the petitioner - Society which inter alia provide for a share qualification of

holding of 10 fully paid shares of Rs.500/- each as an eligibility criterion for

contesting the election to the Board of Directors of the petitioner - Society.

Originally, the Society's bye-laws required share qualification of 1 share of

Rs.100/- for contesting elections. In the year 1991, the share capital of the

Society was raised from Rs.15,00,000/- to Rs.30,00,000/- and the value of each

share was increased from Rs.100/- to Rs.500/-. (It is the submission of learned

counsel for respondent No.4 that after the increase in the share capital, even

the State Government contributed to the share capital of the petitioner -

Society. It is submitted by learned counsel for the petitioner that this capital

has since been repaid by the Society.) This change was approved by the

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Assistant Registrar of Co-operative Societies on 7 th May, 1992. In its Annual

General Meeting of 13th August, 2003, the Society resolved to amend Bye-law

No.29(i) by altering the eligibility criterion for contesting the elections to the

Board of Directors so as to provide for holding of minimum 10 shares of

Rs.500/- each. After this amendment was rejected by the Registrar of

Co-operation, an appeal was carried by the petitioner - Society to the State

Government. By an order dated 19 th March, 2004, the State Minister of

Co-operation allowed the amendment. After this order, in pursuance of an

order passed on 21st April, 2004, the amended bye-law was approved and

registered with the Registrar of Co-operation. More than nine years after the

approval and registration of the bye-law, on 13 th August, 2013, the

petitioner - Society in its Special General Meeting resolved to amend its bye-

laws further. One of the amendments had the effect of removing the exception

in favour of the weaker section insofar as the eligibility criterion of 10 fully

paid up shares of Rs.500/- in Bye-law No.29(i) was concerned. By his order

dated 11th October, 2013, the Commissioner of Co-operation and Registrar of

Co-operative Societies, Pune registered this amendment. A revision was

preferred from that order by respondent Nos.4 and 5 herein before the Hon'ble

Minister for Co-operation under Section 154 of the Act. The revision not only

sought quashing of the approval granted on 9th October, 2013, but also of the

approval to the original amendment of Bye-law No.29(i) of 21st April, 2004

which introduced for the first time the eligibility criterion of holding of 10 fully

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paid up shares of Rs.500/- each for contesting the elections to the Board of

Directors. The revision was allowed by the Hon'ble Minister on 23 rd January,

2017. That order is impugned in the present petition.

5. The impugned order indicates that the Hon'ble Minister has

cancelled and set aside the amendment approved on 9 th October, 2013 to

Bye-law No.29(i) and restored the Bye-law to its position immediately prior to

the amendment of 9th October, 2013. In effect, what this means is that the

amendment introducing the eligibility criterion of holding of 10 fully paid up

shares of Rs.500/- each for contesting the elections to the Board of Directors

was left untouched and merely the exception in favour of the weaker section in

respect of this eligibility criterion, which existed in the originally amended

bye-law, was restored by cancelling the amendment of 9 th October, 2013 which

did away with that exception. Essentially, the argument of the petitioner

before the Hon'ble Minister centered around the very introduction of the

eligibility criterion of holding of 10 fully paid up shares of Rs.500/- each for

contesting the elections to the Board of Directors. The complaint was that out

of 4030 members of the Society, only 30 members satisfy the criterion of 10

fully paid up shares of Rs.500/- each, whilst remaining 4000 members only

have 1 fully paid up share of Rs.500/-, and in the premises, in the light of the

eligibility criterion introduced in Bye-law No.29(i) in 2004, only these 30

members can participate in the elections to the Board of Directors. The

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complainants were aggrieved that this undermined the very democratic

structure and functioning of the petitioner - Society. In fact, what seems to

have weighed with the Hon'ble Minister is this argument and yet, strangely, the

Hon'ble Minister in his order merely does away with the removal of the

originally existing exception from this eligibility criterion in favour of the

weaker section, leaving the originally amended eligibility criterion intact so far

as the general category of members is concerned. Secondly, and even more

strangely, the order of the Hon'ble Minister claims that it would be in the

interest of justice to restore the original provision in the bye-law of 'eligibility

criterion of 1 fully paid up share of Rs.100/-'. What is reflected in the operative

part of the order, however, is restoration of the Bye-law to its position which

obtained prior to 9th October, 2013. As noted above, Bye-law No.29(i), as it

stood prior to 9th October, 2013, provided for eligibility criterion of 10 fully

paid up shares of Rs.500/- each for contesting the elections with the exception

of weaker sections. In these circumstances, the impugned order of the Hon'ble

Minister cannot be sustained. It suffers from grave illegalities in exercising his

jurisdiction and authority under Section 154 of the Maharashtra Co-operative

Societies Act, 1960.

6. In the premises, Rule is made absolute by quashing and setting aside

the impugned order dated 23rd January, 2017 passed by the Hon'ble Minister

and remanding the matter to the Hon'ble Minister for a fresh hearing in

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accordance with law.

7. It is clarified that the observations made in this order are for the

purpose of deciding the present writ petition. All rights and contentions of the

parties concerning the controversy, namely, whether or not the eligibility

criterion of holding of a minimum of 10 fully paid up shares of Rs.500/- each

for contesting the elections to the Board of Directors of the petitioner - Society,

should be sustained or not, are kept open.

8. A copy of this order, duly authenticated by the Sheristedar of the

Court, shall be produced by the petitioner before the Hon'ble Minister on 18 th

September, 2017 at 11 a.m. The Hon'ble Minister will decide the revision

application as expeditiously as possible and preferably within a period of 4

weeks from that date.

9. Till the Hon'ble Minister decides the revision application, elections

shall not be held to the Board of Directors of the petitioner - Society.

10. In the facts and circumstances of the case, there shall be no order as

to costs.

JUDGE Tambaskar.