Bombay High Court

Sanchyareshwar Krushi ... vs The State Of Maharashtra And ... on 30 January, 2021

Bench: V.K. Jadhav

                                     1                   WP-1274-2021.odt

             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        BENCH AT AURANGABAD

                       WRIT PETITION NO. 1274 OF 2021

     Sanchyareshwar Krushi Mal Prakriya
     Ayodgik Sahakari Sanstha Ltd.,
     Pachelegaon, Taluka Jintur,
     District Parbhani,
     Through its Representative
     Santosh S/o Rajeshwar More,
     Age : 42 years, Occu: Agril.,
     R/o Pachelegaon, Taluka Jintur,
     District Parbhani.

                        Versus

     1.       The State of Maharashtra,
              Through its Secretary,
              Co-operation, Textile & Marketing
              Department, Mantralaya,
              Mumbai.

     2.       The Divisional Joint Registrar,
              Aurangabad @ District Co-operative
              Election Officer, Aurangabad,
              Taluka and District Aurangabad.

     3.       The District Co-operative Registrar,
              Co-operative Society, Parbhani,
              Taluka and District Parbhani.

     4.       The Assistant Registrar,
              Co-operative Society, Sonpeth,
              Taluka Sonpeth, District Parbhani.

     5.       The Parbhani District Central
              Co-operative Bank Ltd., Parbhani
              Through its Chief Executive Officer.


     vre/-




::: Uploaded on - 01/02/2021                    ::: Downloaded on - 09/02/2021 08:14:47 :::
                                  2                   WP-1274-2021.odt




                                 .....
     Mr. N. B. Khandare h/f Mr. N. R. Pawade, Advocate for the
     Petitioner.
     Mr. S. B. Pulkundwar, AGP for Respondent-State.
     Mr. S. K. Kadam, Advocate for Respondent No.2.
                                 .....

                               CORAM : V. K. JADHAV, J.

DATED : 30TH JANUARY, 2021

PER COURT :-

1. This pertains to non-inclusion of the name of the

petitioner in the provisional voter list prepared for the

general election of the management committee of Parbhani

District Central Co-operative Bank Ltd., Parbhani (for short,

"DCC Bank").

2. The term of the managing committee of the DCC Bank

(for short, "DCC Bank") was over and thus general election

of the said Bank was commenced by publishing provisional

voter list on 16.03.2020. The petitioner society was

registered in the year 2011 under the provisions of the

Maharashtra Co-operative Societies Act, 1960 (for short, "Act

of 1960"). The petitioner society is a member of the DCC

vre/-

3 WP-1274-2021.odt

Bank since the date of establishment of the society

continuously. Even the petitioner society has participated in

the general election of the DCC Bank conducted in the year

2015.

3. By an order dated 21.05.2019, in terms of the

provisions of Section 102 of the Act of 1960, the Registrar

has issued an interim order, thereby directing to wind up the

petitioner society.

4. On 21.02.2020, a resolution was passed and the

proposal for recommendation of name of the petitioner was

forwarded to the respondent authority. On 01.03.2020, the

petitioner enquired about the status of the proposal

forwarded by the society and learned from the authority that

the Registrar has issued an interim order, thereby directing

to wound the society. The petitioner society has placed the

copies of the audit report and also the original record to

substantiate that the society is functioning continuously. The

Registrar, on perusal of the said record, satisfied himself and

vre/-

4 WP-1274-2021.odt

by order dated 17.03.2020, vacated the said interim order of

winding up.

5. The petitioner society thereafter again passed a

resolution in respect of recommendation of the name of the

petitioner vide its resolution dated 21.12.2020. On

16.03.2020, the provisional voter list was published wherein

name of the representative of the petitioner society was not

mentioned. The petitioner society has therefore taken

objection on 14.01.2021 along with a copy of the resolution

dated 21.12.2020 before the respondent authority. However,

respondent no.2, by order dated 18.01.2021, rejected the

objection of the petitioner.

6. Being aggrieved by the order dated 18.01.2021 passed

by respondent no.2, by which the objection raised by the

petitioner for non-inclusion of the name of the petitioner in

the provisional as well as final voters list prepared for the

election of Parbhani DCC Bank was turned down, the

vre/-

5 WP-1274-2021.odt

petitioner, who is the original objector, has preferred this

Writ Petition.

7. Learned counsel for the petitioner submits that by

order dated 21.05.2019, the respondent has issued interim

order directing the petitioner society to be wound up. The

said order was passed under misconception that the society

has ceased to work. Moreover, the said interim order was not

communicated to the society though it is mandatory in view

of the provisions of Section 102 (2) of the Act of 1960. The

petitioner society has been working continuously. However,

as the petitioner society learned about passing of the said

interim order, it approached to the Registrar requesting to

vacate the said interim order. The petitioner society has

placed the audit report and the relevant original papers

before the Registrar. Accordingly, the Registrar has vacated

the said interim order. Learned counsel submits that even the

liquidator was not appointed over the petitioner society in

view of the provisions of Section 103 of the Act of 1960.

Learned counsel submits that in terms of the provisions of

vre/-

6 WP-1274-2021.odt

Section 103 sub-section (3), only after a final order is passed

confirming the interim order, the officers of the society shall

vacate their offices and while the winding up order remains

in force, the general body of the society shall not exercise

any powers. In terms of Sub-section (2) of Section 103, in

terms of the interim order, the officers of the society shall

hand over to the liquidator the custody and control of all the

property, effects and actionable claims to which the society is

or appears to be entitled, and of all books, records and other

documents pertaining to the business of the society and,

shall have no access to any of them. Learned counsel submits

that in the instant case, after passing of the said interim

order dated 21.05.2019, no liquidator was appointed and

the petitioner society was continuously functioning even

thereafter. The learned counsel submits that in the ensuing

election of the DCC Bank, the petitioner society has

remained unrepresented and the same is also in the

backdrop that subsequently, the interim order directing the

society to wind up also came to be vacated.

vre/-

7 WP-1274-2021.odt

8. Learned counsel for the petitioner, in order to

substantiate his contention, placed reliance in a case

Vineshkumar Mavjibhai Parmar v. Dethali Gopalak Vividh

Karyakari Sahakari Mandali Limited and Others, reported in

(2017) 1 SCC 273.

9. Learned counsel for the petitioner submits that the

Supreme Court had an occasion to deal with a similar issue

with reference to the provisions of the Gujarat Cooperative

Societies Act, 1961 which provisions are pari mataria to the

provisions of the Act of 1960.

10. Learned counsel Mr. S. K. Kadam appearing for

respondent no.2-Election Officer submits that as per the

schedule of the program of election of the DCC Bank, the

provisional voter list was to be published on 16.03.2020 and

the objections, if any, were invited till 26.03.2020 which is

subsequently postponed due to outbreak of Covid-19.

Learned counsel Mr. Kadam submits that at present, the final

vre/-

8 WP-1274-2021.odt

voter list is prepared and notified also. In view of the same,

no interference is required in the impugned order.

11. Learned counsel Mr. Kadam further submits that in

terms of the provisions of Sub-section (2) of Section 103 of

the Act of 1960, the officers of the society shall have no

access to any records and other documents pertaining to the

business of the society and therefore, after passing of the

interim order dated 21.05.2019, recommendation of the

name of the petitioner cannot be made vide resolution dated

21.12.2020.

12. I have also heard learned AGP for the respondent

State.

13. In order to provide for the orderly development of the

co-operative movement in the State of Maharashtra, the law

relating to the co-operative societies in the State was

consolidated and amended by the enactment of Maharashtra

Co-operative Societies Act, 1960. In the instant case, the

vre/-

9 WP-1274-2021.odt

petitioner society has approached this Court for non-

inclusion of the petitioner society in the voter list for the

election of the DCC Bank. Though the petitioner society

raised objection, it was turned down mainly on the ground

that the petitioner society has recommended the name of the

petitioner as its representative to be included in the voter list

during subsistence of the interim order passed by respondent

no.2 directing the petitioner society to wind up.

14. In terms of the provisions of Section 102 of the Act of

1960, the Registrar may issue an interim order to the society

directing it to be wound up. In terms of the provisions of

Sub-section (2) of Section 102 of the Act of 1960, a copy of

such interim order shall be communicated, in the prescribed

manner, to the society calling upon it to submit its

explanation to the Registrar within a month from the date of

issue of such order and the Registrar, on giving an

opportunity to the society and to the creditors of the society,

if any, of being heard, may issue final order, vacating or

vre/-

10 WP-1274-2021.odt

confirming the interim order. Section 102 of the Act of 1960

is reproduced hereinbelow :

"102. (1) If the Registrar, -

(a) after an inquiry has been held under section 83 or an inspection has been made under section 84 or 89A or on the report of the auditor auditing the accounts of the society, or

(b) on receipt of an application made upon a resolution carried by three-fourth of the members of a society present at a special general meeting called for the purpose, or

(c) of his own motion, in the case of a society which-

(i) has not commenced working, or

(ii) has ceased working, or

(iii) possesses shares or member's deposits not exceeding five hundred rupees, or

(iv) has ceased to comply with any conditions as to registration and management in this Act or the rules or the by-laws,

is of the opinion that a society ought to be wound-up, he may issue an interim order directing it to be wound-up.

(2) A copy of such order made under sub-section (1) shall be communicated, in the prescribed manner,

vre/-

11 WP-1274-2021.odt

to the society calling upon it to submit its explanation to the Registrar within a month from the date of the issue of such order, and the Registrar, on giving an opportunity to the society and to the creditors of the society, if any, of being heard, may issue a final order, vacating or conforming the interim order."

15. In terms of the provisions of Section 103 (1), after

passing of an interim order, the Registrar may also appoint a

person to be liquidator of the Society and in terms of the

provisions of Sub-sections (2) and (3), certain provisions are

prescribed as to the business of the society to be transacted

on appointment of the liquidator. Section 103 of the Act of

1960 is reproduced hereinbelow:

"103. (1) When an interim order is passed under the last preceding section or a final order is passed under that section, for the winding-up of a society, the Registrar may, in accordance with the rules, appoint a person to be Liquidator of the society, and fix his remuneration.

(2) On issue of the interim order, the officers of the society shall hand over to the Liquidator the custody and control of all the property, effects and actionable

vre/-

12 WP-1274-2021.odt

claims to which the society is or appears to be entitled, of all books records and other documents pertaining to the business of the society and, shall have no access to any of them.

(3) When a final order is passed confirming the interim order, the officers of the society shall vacate their offices, and while the winding-up order remains in force, the general body of the society shall not exercise any powers.

(4) The person appointed under this section as Liquidator shall, subject to the general control of the Registrar, exercise all or any of the powers mentioned in section 105. The Registrar may remove such person and appoint another in his place, without assigning any reason.

(5) The whole of the assets of the society shall on the appointment of Liquidator under this Section vest in such Liquidator, and notwithstanding anything contained in any law for the time being in force, if any immovable property is held by a Liquidator on behalf of the society, the title over the land shall be complete as soon as, the mutation of the name of his office is effected, and no Court shall question the title on the ground of dispossession, want of possession or physical delivery of possession.

(6) In the event of the interim order being vacated, the person appointed as Liquidator shall hand over the property, effects and actionable claims and books,

vre/-

13 WP-1274-2021.odt

records and other documents of the society to the officers who had delivered the same to him. The acts done, and the proceedings taken by liquidator, shall be binding on the society, and such proceedings shall, after the interim order has been cancelled under the preceding section, be continued by the officers of the society."

16. In the instant case, though on 21.05.2019 the interim

order directing the petitioner society to be wound up was

passed by the Registrar concerned, however, no record is

placed pointing out that there was sufficient compliance of

Sub-section (2) of Section 102 of the Act of 1960. The

petitioner has consistently stated in his objection and even

before the respondent authorities that a copy of such interim

order was neither communicated to him in the prescribed

manner, nor a liquidator was appointed in terms of the

interim order directing the petitioner society to be wound

up. It is not brought to my notice that after passing of the

interim order directing the petitioner society to be wound

up, the Registrar has appointed a liquidator. On the other

hand, it reveals from the available record that by subsequent

vre/-

14 WP-1274-2021.odt

order dated 17.03.2020 the Registrar concerned has

withdrawn the earlier interim order directing the petitioner

society to be wound up. It is thus clear that the petitioner

society remained unrepresented in the ensuing election of

the DCC Bank.

17. The Hon'ble Supreme Court, in the case of

Vineshkumar Mavjibhai Parmar (Supra), relied upon by

learned counsel for the petitioner, in the similar set of facts,

after considering the provisions of Sections 107 and 108 of

the Gujarat Co-operative Societies Act, 1961, which are

pari materia to the provisions of Sections 102 and 103 of the

Act of 1960, in para no. 25 of the Judgment, has made the

following observations:

"25. The Gujarat Legislature expressly provided under the Societies Act for the curtailment of certain rights of the officers of the societies facing liquidation proceedings. It must be remembered that at the same time it also declared that such officers cease to be the officers of the Society only when a final order of winding up is passed. In a given case if the Registrar

vre/-

15 WP-1274-2021.odt

after an appropriate enquiry following the interim order of winding up decides not to finally wind up the society, the officers of the society would once again be entitled to exercise all the rights associated with it and perform all the functions attached to the office. Therefore, merely because the officers of Credit Society facing liquidation are disabled from enforcing certain rights attached to the office or perform certain obligations appended to the office, it does not necessarily follow that they are disabled from performing every function entrusted by law to such office."

18. In the instant case, the Registrar, after an appropriate

enquiry following the interim order of winding up, has

decided not to finally wind up the society. Even as per the

record available and in terms of the submissions made on

behalf of the parties, a liquidator was also not appointed

following the interim order. In view of the same, if the

petitioner society has recommended name of its

representative on 21.02.2020 and even exercised the right of

recommending name of the representative after vacating the

interim order of winding up, the petitioner society is not

disabled from performing every function. This aspect should

vre/-