Vaijnath Shankarrao Hattiambire ... vs The State Of Maharashtra And ...
2021 Latest Caselaw 2169 Bom

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               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          BENCH AT AURANGABAD

                       915 WRIT PETITION NO. 2042 OF 2021


 1.     Vaijnath s/o Shankarrao Hattiambire
        Age 48 years, Occ. Agriculture and
        Chairman of Mahatma Jyotiba Phule
        Magasvargiya Yantramag Industrial
        Co-Op. Society Limited, Palam,
        R/o. Palam, Tq. Palam, Dist. Parbhani

 2.     Dr. Pratibhatai Shrirang Sable,
        Age 45 years, Occ. Secretary of
        Samrat Nagari Sahakari Patsanstha
        Ltd. Gangakhed,
        R/o. Gangakhed, Dist. Parbhani                        ..Petitioners

                    versus

 1.     The State of Maharashtra
        Through its secretary of Co-operative
        and Textile Department,
        Mantralaya, Mumbai

 2.     The State Co-operative Election Authority,
        Maharashtra State, Pune

 3.     The District Co-operative Election Officer
        of the Parbhani District Central
        Co-operative Bank Ltd. Parbhani @
        Divisional Joint Registrar Co-operative
        Societies, Aurangabad

 4.     The Managing Director
        Parbhani District Central Co-operative
        Bank Limited, Parbhani
        District Parbhani                                     ...Respondents

                                       .....
                   Advocate for Petitioners : Mr. V.A. Bagal
                AGP for Respondent No. 1: Mr. S.B. Pulkundwar
            Advocate for Respondent Nos. 2 and 3 : Mr. S.K. Kadam
                                       .....

                                             CORAM : V. K. JADHAV, J.

DATED : 3 rd FEBRUARY, 2021 PER COURT:-

1. None appears for respondent No.4 bank though duly served.

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The petitioners have also filed affidavit of service to that effect.

2. By consent of the respective parties, heard finally at

admission stage.

3. The petitioners are members of Co-operative Societies, which

are registered under the provisions of Maharashtra Co-operative

Societies Act, 1960 (hereinafter for the sake of brevity referred to as

"the Societies Act"). By way of present writ petition, the petitioners

are challenging the legality, validity and propriety of the order dated

15.01.2021 and 18.01.2021 passed by respondent No.3, thereby

rejecting the objection raised by the petitioners for including their

names as delegates of the societies to which they represent, in the

final voters list for the ensuing elections of respondent No.4-

Parbhani District Central Co-operative Bank Limited, Parbhani

(hereinafter for the sake of brevity referred to as "respondent No.4

Bank").

4. The learned counsel for the petitioners submits that the

societies to which the petitioners represent are the registered

societies. After registration of the petitioner societies, the petitioner

societies have passed resolution in the general body meeting for

taking the membership of respondent No.4 Bank and accordingly the

applications for membership were filed on 1.12.2014 and on 3.1.2013

respectively. The petitioner societies have also purchased the share

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capital for the membership of respondent No.4 Bank on 1.12.2014

and on 3.1.2013 itself, respectively. Learned counsel submits that in

view of the provisions of section 27(3) of the Societies Act, any new

member society of a federal society shall be eligible to vote in the

affairs of that federal society only after completion of the period of

three years from the date of its investing any part of its fund in the

shares of such federal society. Learned counsel submits that the

petitioner societies have completed three years on 30.11.2017 and

2.1.2016 respectively from the date of investment of its share in the

federal society and as such, the petitioner societies are eligible to

take part in the elections of respondent No.4 Bank. Learned counsel

submits that even respondent No.4 Bank has issued certificate

certifying therein that the petitioner societies have paid the amount

of shares on 1.12.2014 and on 3.1.2013, respectively and further, as

per the said certificate, respondent No.4 Bank has granted

membership in favour of the petitioner societies on 20.5.2017.

Learned counsel submits that the petitioner societies have passed

resolutions for sending the names of delegates to include the said

names in the voters list of respondent No.4 Bank and in view of the

same, names of the petitioner societies are required to be included in

the provisional voters list of respondent No.4 Bank. Though

respondent No.4 Bank has published the voters list on 16.3.2020,

name of the petitioner societies were not included in the provisional

voters list. Thus, the petitioners have filed objection on 18.3.2020,

however, due to outbreak of COVID-19, the election programme of

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respondent No.4 Bank was postponed. Pursuant to the new election

programme, the petitioner societies again raised objection on

5.1.2021 with similar request for inclusion of names of the delegates

of the petitioner societies in the voters list. Learned counsel submits

that respondent No.3 has not considered the date of investment of

shares for computing the period of three years and rejected the

objection raised by the petitioner on 15.1.2021 and on 18.1.2021.

Learned counsel for the petitioners, in order to substantiate

his submissions, placed reliance on the following cases:-

1. Dudhganga Vikas Seva Sanstha Maryadit vs. Distt.

Collector, Kolhapur and Others, reported in (2006) 5 SCC 250.

2. Dhule Gramin Vikas Bhajipala Phal Phalawal Va Phule Kharedi Vikri Sahakari Sanstha Ltd. and Others vs. State of Maharashtra and Others, reported in 2007 (5) ALL MR 867.

3. Amrutdhara Dudh Utpadak Sahakari Sanstha and Another vs. The State of Maharashtra and Others, reported in 2012 (3) ALL MR 850.

4. Babaji Kondaji Garad and Others vs. Nasik Merchants Co-operative Bank Ltd., Nasik and Others, reported in AIR 1984 SC 192.

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5. Mr. Kadam, learned counsel for respondent Nos. 2 and 3

submits that in terms of Rule 19 of the Maharashtra Co-operative

Societies Rules 1961, certain conditions are prescribed to be

complied with for admission as a member. Learned counsel submits

that even assuming that the petitioner societies have invested any

part of its funds in the shares of respondent No.4 Bank, however, the

application submitted by the petitioner societies for enrollment as a

member is to be approved by the committee of respondent No.4

Bank subject to such resolution as the general body of members

may, in pursuance of the powers conferred on it in that behalf from

time to time, pass.

6. I have also heard learned A.G.P. for respondent No.1

7. I have carefully considered the submissions advanced by

learned counsel/counsel for the respective parties. With their able

assistance, I have perused the pleadings, grounds taken in the

petition and annexures thereto.

8. The petitioner societies are registered Co-operative Societies.

The petitioner societies have also filed applications for membership

of respondent No.4 Bank on 01.12.2014 and 03.01.2013 respectively

and the petitioner societies have also purchased the share capital for

membership of respondent No.4 Bank on on 01.12.2014 and

03.01.2013 respectively itself. These facts are not disputed by the

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other side.

9. The provisions of Section 27 of the Societies Act speak about

voting powers of the members. Sub-sections (3) and (3A) of Section

27 of the Societies Act are relevant for deciding the issue raised in

the present writ petition. Thus, sub-sections (3) and (3A) of Section

27 of the Societies Act are reproduced herein below:-

"27. Voting powers of members.

(1) .....

(2) .....

(3) A society which has invested any part of its funds in the shares of any federal society, may appoint one of its active members to vote on its behalf in the affairs of that federal society; and accordingly such member shall have the right to vote on behalf of the society:

Provided that, any new member society of a federal society shall be eligible to vote in the affairs of that federal society only after the completion of the period of three years from the date of its investing any part of its fund in the shares of such federal society:

(3A) An individual member of a society shall not be eligible for voting in the affairs of that society for a period of two years from the date of his enrollment as a member of such society:

Provided that, nothing in this sub-section shall apply in respect of a co-operative housing society and a co-

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operative premises society."

10. Thus, from bare reading of Section 27(3) and the proviso

thereof, it is clear that the condition for eligibility of a member to vote

in the affairs of a federal society is completion of three years from the

date of its investing any part of its funds in the shares of such federal

society. So far as sub-section (3A) is concerned, there is marked

difference between a member society and an individual member of

the society. If it is a member society, what is important and relevant is

the date of investing any part of its funds in the shares of such

federal society i.e. respondent No.4 Bank in the present case. Thus,

completion of period of three years is required to be computed from

the said date of investment. So far as the sub-section (3A) pertaining

to an individual members of the society is concern, he shall not be

eligible for voting in the affairs of the federal society for a period of

two years from the date of its enrollment as a member of that society.

Thus, for an individual member, the criterion is the date of enrollment

as member of such federal society.

11. In the case of Dudhganga Vikas Seva Sanstha Maryadit

(supra) relied upon by learned counsel for the petitioners, in para

Nos. 7 and 8, the Supreme Court has made following observations:-

"7. A mere reading of section 27 makes it explicit that a society, which has invested any part of its fund in the shares of a

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federal society, may appoint one of its members to vote on its behalf in the affairs of the federal society. Proviso to sub- section (3) of Section 27 of the Act lays down the condition of eligibility which is to the effect that any new member of a federal society shall be eligible to vote in the affairs of the federal society only after the completion of the period of 3 years from the date of its investing any part of its fund in the shares of such federal society. We may also note sub- section (3-A) of Section 27 of the Act which relates to an individual member of a society. In his case it is provided that he shall not be eligible for voting in the affairs of that society for a period of two years from the date of his enrollment as a member of such society. The legislature has consciously employed in sub-sections (3) and (3-A) words which are of significance. In the proviso to sub-section (3) the period of 3 years is reckoned from the date of the society investing any part of its fund in the shares of a federal society, whereas sub-section (3-A) provides that the period of 2 years shall be computed from the date of enrollment of an individual as a member of such federal society.

8. Having regard to the plain words used in Section 27(3) of the Act, the appellant Society having invested its fund in the shares of Kolhapur District Central Cooperative Bank Ltd., Respondent 2 herein on 30-12-2002, it became eligible to vote in the affairs of the federal society after 30-12-2005. We are informed that the date of investment by the appellant Society and its enrollment as a member of the federal society is the same, namely, 30-12-2002. Ex facie, therefore, in terms of Section 27(3) of the Act, in April 2006 when the election was due to be held, the appellant Society was entitled to appoint one of its members to vote on its behalf in the affairs of the federal society Respondent 2, having completed the period of 3 years from the date of its investment in shares of Respondent 2 society on 30-12-

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2005."

12. In the case of Dhule Gramin Vikas Bhajipala Phal

Phalawal Va Phule Kharedi Vikri Sahakari Sanstha Ltd. (supra),

relied upon learned counsel for the petitioners, the Division Bench of

this Court, by referring the observations made by the Supreme Court

in the case above i.e. Dudhganga Vikas Seva Sanstha Maryadit

(supra), in para 18 of the judgment has made following

observations:-

"18. We find from perusal of the provisions of Section 27(3) of the Act, 1960 that there is no ambiguity in its application. Considering the interpretation put up by the Apex Court and the Division Bench of the Bombay High Court in their judgment to the provisions of Section 27 of the Act read with Rule 4 of the Committee Rules it can be safely held that the members society of the federal society shall be eligible to vote in the affairs of the federal society after completion of period of three years from the date of its investing funds in the shares of the federal society."

13. In the case of Amrutdhara Dudh Utpadak Sahakari

Sanstha and Another (supra), relied upon by learned counsel for

the petitioner, the learned Single Judge of this court (Coram : S. V.

Gangapurwala, J.) in para 10 of the judgment has made the

following observations:-

"10. Even sub section (3) of Section 27 of the said Act lays

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down that the society which has invested any part of its funds in the shares of the federal society, may appoint any of its members to vote on its behalf in the affairs of that federal society. The said sub section (3) of Section 27 of the said Act does not warrant that a specific membership has to be conferred on the society. It only mandates that the said Society should have invested any part of its funds in the shares of any federal society. In the present case, none of the respondents dispute the fact that the petitioners have invested part of their funds in the shares of the respondent no.4 -Society. The only embargo put on the rights of such a Society to vote is that it should have completed three (3) years from the date of its investing any part of its funds in the share of any federal society in view of proviso (3) to Section 27. In the present case, the petitioners have invested their part of the funds in the shares of respondent no.4 in the year 2002. Even the said restriction laid down in proviso would not apply in this case."

14. Learned counsel for the petitioners has further placed his

reliance on the judgment in the case of Babaji Kondaji Garad and

Others vs. Nasik Merchants Co-operative Bank Ltd., Nasik

(supra) wherein, in para 10 of the judgment, the Supreme Court has

considered the use of expression "shall" by the Legislature and

observed that the intention of the Legislature in using the word "shall"

manifest its intention. Learned counsel submits that in the instant

case, in the proviso of sub-section (3) of Section 27 the word "shall"

is used and as such, the petitioner society is eligible to vote in the

ensuing elections of respondent No.4 Bank.

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15. So far as the sub-Rule (2) of Rule 9 of the Maharashtra Co-

operative Societies (Election to Committee) Rules, 2014 relied upon

by learned counsel for respondent Nos.2 and 3, the period of three

years as provided in sub-Section (3) of Section 27 of the Societies

Act is to be computed from the date of enrollment of member to the

date when the election of the managing committee members of the

society becomes due. In sub-Rule (2) a reference has been given to

sub-section (3) of Section 27 of the Societies Act. However, even if

there is any inconsistency, needless to say that the Act prevails over

the Rules.

16. It is pertinent to note that though the petitioner societies, in all

writ petitions to be decided separately but on identical facts, with the

same issue, were registered long back in the year 2011, 2013, 2014,

2015 respectively, however, respondent No.4 Bank has enrolled

them as member on one and the same day i.e. on 20.5.2017. Thus,

the only irresistible inference could be drawn is that care has been

taken while enrolling those petitioner societies as members that they

should not be eligible to vote in the ensuing elections of respondent

No.4 Bank in terms of the provisions of Section 27(3) of the Societies

Act and the proviso thereof. It thus appears that prescribing common

date of enrollment has been done with some oblique motive and I do

not fine any explanation for that.

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17. In view of the above and considering the relevant provisions

and the ratio laid down by the Supreme Court and the Division Bench

of this Court and also the Single Judge of this Court, I am of the

considered opinion that the impugned orders are not sustainable and

the same are liable to be quashed and set aside. In view of the

same, I proceed to pass the following order:-

ORDER

I. Writ petition is hereby allowed in terms of prayer clause "B".

II. Writ petition is accordingly disposed of.

( V. K. JADHAV, J.)

rlj/