Bombay High Court

Hariom Shetkari Samuh Krushi ... vs The Divisional Joint Registrar ... on 12 February, 2021

Bench: V.K. Jadhav

                                                                           wp2962.21
                                         -1-

               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          BENCH AT AURANGABAD

                          WRIT PETITION NO. 2962 OF 2021


 Hariom Shetkari Samuh Krushi Sahitya
 Va Dhanya Godam Sahakari Sanstha
 Through its Chairman                                       ..Petitioner

                    versus

 The Divisional Joint Registrar
 Aurangabad/
 District Cooperative Election Officer
 Parbhani and others                                        ...Respondents

                                      .....
                 Advocate for Petitioner : Mr. P. D. Bachate
           Advocate for Respondent Nos. 1 and 2 : Mr. S. K. Kadam
                AGP for Respondent No. 3: Mr. K. B. Jadhavar
             Advocate for respondent No.4: Mr. K. J. Suryawanshi
                                         .....

                                               CORAM : V. K. JADHAV, J.

DATED : 12th FEBRUARY, 2021 PER COURT:-

1. By consent, heard finally at admission stage.

2. The petitioner is a Co-operative Society, registered under the

provisions of Maharashtra Co-operative Societies Act, 1960 (for short

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

challenging the legality, validity and propriety of the order dated

18.01.2021 passed by respondent No.1, thereby rejecting the

objection raised by the petitioner for including his name as delegate

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

Parbhani District Central Co-operative Bank Limited, Parbhani (for

short "respondent Bank").

wp2962.21

3. The learned counsel for the petitioner submits that the society

to which the petitioner represents is the registered society. After

registration of the petitioner society, the petitioner society has passed

resolution in the general body meeting for taking the membership of

respondent Bank and accordingly the application for membership

was filed on 09.08.2011. The petitioner society has also purchased

the share capital for the membership of respondent Bank on

09.08.2011 itself. 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 society

has completed three years on 08.08.2014 from the date of

investment of its share in the federal society and as such, the

petitioner society is eligible to take part in the elections of respondent

Bank. Learned counsel submits that even respondent Bank has

issued certificate certifying therein that the petitioner society has paid

the amount of shares on 09.08.2011 and further, as per the said

certificate, respondent Bank has granted membership in favour of the

petitioner society on 20.05.2017. Learned counsel submits that the

petitioner society has passed resolution for sending the name of

delegate to include the said name in the voters list of respondent

Bank and in view of the same, name of the petitioner society is

wp2962.21

required to be included in the provisional voters list of respondent

Bank. Though respondent Bank has published the voters list on

16.3.2020, name of the petitioner society was not included in the

provisional voters list. Thus, the petitioner has filed objection on

06.01.2021 with a request to include the name of the delegate of the

petitioner society in the voters list. Learned counsel submits that

respondent No.1 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 18.01.2021.

Learned counsel for the petitioner, 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,

wp2962.21

reported in AIR 1984 SC 192.

4. Mr. Kadam, learned counsel for respondent Nos. 1 and 2

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 society has invested any part

of its funds in the shares of respondent Bank, however, the

application submitted by the petitioner society for enrollment as a

member is to be approved by the committee of respondent 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.

5. Mr. Suryawanshi, learned counsel for respondent 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 name

of the petitioner society was enrolled as member on 20.5.2017 and

the cut-off date was on 6.5.2017. Thus, the petitioner society is 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.

wp2962.21

6. I have also heard learned A.G.P. for respondent No.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 in the petition and annexures thereto.

8. The petitioner society is a registered Co-operative society.

The petitioner society has also filed application for membership of

respondent Bank on 09.08.2011 and the petitioner society has also

purchased the share capital for membership of respondent Bank on

09.08.2011 itself. These facts are not disputed by the 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

wp2962.21

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) of the Societies Act 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 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 provision

of sub-section (3A) pertaining to an individual member of the society

wp2962.21

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

wp2962.21

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- 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 petitioner, 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

wp2962.21

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 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."

wp2962.21

14. Learned counsel for the petitioner 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 Bank.

15. So far as sub-Rule (2) of Rule 9 of the Rules of 2014 relied

upon by learned counsel for respondent Bank, 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