Bombay High Court
Krushiraj Phale Va Bhagipala ... vs The State Of Maharashtra And ... on 3 February, 2021
Bench: V.K. Jadhav
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 1679 OF 2021
KRUSHNA SHETAKARI DHANYA ADHIKOSH SEVA SAHAKARI
SANSTHA LTD., KAWALGAON, TQ. PURNA, DIST. PARBHANI AND
OTHERS
VERSUS
THE STATE OF MAHARASHTRA AND OTHERS
WITH
WRIT PETITION NO. 1680 OF 2021
BADWANI SHETKARI SAMUHA KRUSHI SAHITYA PURWATHA VA
DHANYA GODAM SEVA SAHAKARI SANSTHA LTD., BADWANI AND
OTHERS
VERSUS
THE STATE OF MAHARASHTRA AND OTHERS
WITH
WRIT PETITION NO. 1733 OF 2021
DADAHARI VARAHA PALAN SAHAKARI SANSTHA LTD., WARPUD, TQ.
DIST. PARBHANI AND OTHERS
VERSUS
THE STATE OF MAHARASHTRA AND OTHERS
WITH
WRIT PETITION NO. 1734 OF 2021
KRUSHIRAJ PHALE VA BHAJIPALA KHAREDI VIKRI SAHAKARI
SANSTHA LTD., MIRKHEL, TQ. DIST. PARBHANI AND OTHERS
VERSUS
THE STATE OF MAHARASHTRA AND OTHERS
.....
Advocate for Petitioners : Mr. S. B. Ghatol Patil
AGP for Respondent Nos. 1 to 3 in WP No. 1679 of 2021 and 1680 of
2021: Mr. S.B. Pulkundwar
AGP for R. Nos. 1 to 3 in WP No. 1733 of 2021: Mr. K.B. Jadhavar
AGP for R. Nos. 1 to 3 in WP No. 1734 of 2021: Mr. R.D. Sanap
Advocate for Respondent Nos. 4 and 5 : Mr. V. H. Dighe
Advocate for Respondent No.6 : Mr. K. J. Suryawanshi
.....
CORAM : V. K. JADHAV, J.
DATED : 3 rd FEBRUARY, 2021
PER COURT:-
1. By consent, heard finally at admission stage.
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2. The petitioners are Co-operative Societies 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 petitions, the petitioners are challenging the
legality, validity and propriety of the orders dated 15.01.2021 and
18.01.2021 respectively, passed by respondent No.5, thereby
rejecting the objections raised by the petitioners for including the
names of delegates of the petitioner societies in the final voters list in
the ensuing elections of respondent No.6- Parbhani District Central
Co-operative Bank Limited, Parbhani (hereinafter for the sake of
brevity referred to as "respondent No.6 Bank").
3. The learned counsel for the petitioners submits that after
registration of the petitioner societies, the petitioner societies have
passed resolutions in the general body meetings for taking
membership of respondent No.6 Bank and accordingly the
applications for membership were filed. The petitioner societies
have also purchased the share capital for the membership of
respondent No.6 Bank on 03.02.2014, 15.09.2016, 28.08.2015,
15.01.2016, 05.09.2013, 24.06.2019, 20.05.2017 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.
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Learned counsel submits that the petitioner societies have
completed three years on 02.02.2017, 14.09.2019, 27.08.2018,
14.01.2019, 04.09.2016 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.6 Bank.
Learned counsel however fairly concedes that petitioner nos. 7 and 8
in Writ Petition No. 1734 of 2021 have not completed 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 even
respondent No.6 Bank has issued certificates on 03.01.2020,
02.01.2020, 22.1.2020, respectively certifying therein that the
petitioner societies had paid the amount of shares on 03.02.2014,
15.09.2016, 28.08.2015, 15.01.2016, 05.09.2013, 24.06.2019,
20.05.2017 respectively and further, as per the said certificate,
respondent No.6 Bank has formally affirmed the membership 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.6 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.6 Bank. Though respondent No.6 Bank has published the voters
list on 16.3.2020, names of the petitioner societies were not included
in the provisional voters list. Thus, the petitioners have filed objection
on 17.3.2020, 16.3.2020, 06.01.2021 respectively. However, due to
outbreak of COVID-19, the election programme of respondent No.6
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Bank was postponed. Pursuant to the new election programme, the
petitioner societies again filed written objection / written arguments
on 12.1.2021 and 14.01.2021 respectively, with similar request for
inclusion of names of the delegates of the petitioner societies in the
voters list. Learned counsel submits that respondent No.5 has not
considered the date of investment of shares for computing the period
of three years and rejected the objections raised by the petitioners on
15.1.2021 and 18.01.2021 respectively.
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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4. Mr. Suryawanshi, learned counsel for respondent No.6 Bank
submits in terms of the provisions of sub-rule (2) of Rule 9 of the
Maharashtra Co-operative Societies (Election to Committee) Rules
2014, the period of three years provided in sub-section (3) of Section
27 of the Societies Act is to be counted from the date of enrollment of
member to the date when the election of the managing committee
members of the society becomes due. In the instant case, the names
of the petitioner societies were enrolled as members on 20.5.2017
and the cut-off date was on 6.5.2017. Thus, the petitioner societies
are not eligible to vote in the affairs of the federal society as the
period of three years is not completed from the date of its enrollment.
5. Learned counsel for respondent Nos. 4 and 5 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.6 Bank, however, the
applications submitted by the petitioner societies for enrollment as
members are to be approved by the committee of respondent No.6
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.
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6. I have also heard learned A.G.P. for respondent Nos. 1 to 3.
7. I have carefully considered the submissions advanced by
learned 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 duly registered under the
provisions of the Societies Act. The petitioner societies have also
filed applications for membership of respondent No.6 Bank and have
also purchased the share capital for membership of respondent No.6
Bank on on 03.02.2014, 15.09.2016, 28.08.2015, 15.01.2016,
05.09.2013, 24.06.2019, 20.05.2017 respectively. These facts are
not disputed by the respondents.
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
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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-
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.6 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
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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
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.
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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-
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
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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 petitioners, 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
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.6 -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.6 in the year 2002. Even the said
restriction laid down in proviso would not apply in this
case."
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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 societies are eligible to vote in the
ensuing elections of respondent No.6 Bank.
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.4 and 5, 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,
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2015 respectively, however, respondent No.6 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.6 bank in terms of the provisions of Section 27(3) of the Societies
Act and the proviso thereof. Learned counsel appearing for
respondent No.6 bank has failed to tender any explanation as to why
there is belated enrollment of the said petitioner societies as
members of the bank. It thus appears that prescribing common date
of enrollment has been done with some oblique motive.
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 order is not sustainable and
the same is liable to be quashed and set aside.
18. So far as petitioner nos. 7 and 8 in Writ Petition No. 1734 of
2021 are concerned, since they have purchased shares of
respondent no.6 Bank on 24.06.2019 and 20.05.2017, their case is
not covered under the provisions of Section 27(3) of the Societies
Act.
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19. In view of the above, I proceed to pass the following order:-
ORDER
I. Writ petitions Nos. 1679 of 2021, 1680 of 2021 and 1733 of
2021 are hereby allowed in terms of prayer clause "B".
II. Writ petition No. 1734 of 2021 is partly allowed in terms of
prayer clause "B" to the extent of petitioner Nos. 1 to 6.
III. The writ petition No. 1734 of 2021 is rejected to the extent of
petitioner Nos. 7 and 8.
IV. Writ petitions are accordingly disposed of.
( V. K. JADHAV, J.)
rlj/
