Bombay High Court
Vithal S. Vernekar And 5 Ors vs Sandesh Mandrekar And 4 Ors on 16 April, 2025
2025:BHC-GOA:759
2025:BHC-GOA:759 WP 87-2025
Jose
IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NO. 87 OF 2025
1. Shri. Vithal S. Vernekar
Aged 68 years,
Indian National,
Office at Bicholim V. K. S. S.
Society, Bicholim - Goa.
2. Shri. Ramakrishna Parab
Aged 74 years, Indian National,
Office at Mulgao - Shirgao
V. K. S. S. Society,
Asnora, Bicholim - Goa
3. Shri. Sakha Nanda Malik
Aged 60 years, Indian National
Office at Mahalaxmi V. K. S. S.
Society, Kudne, Bicholim - Goa.
4. Shri. Prakash Naik
Aged 68 years, Indian National,
Office at Navodit Veling,
Priol V. K. S. S. Society, Ponda - Goa.
5. Shri. Kanta Gaonkar
Aged 65 years, Indian National,
Office at Gawane-Group V. K. S. S.
Society, Gawane Sattari, Goa
6. Shri. Govind Narvekar
Aged 52 years, Indian National
Office at Raia Rachol Co-operative
Society, Raia, Salcete-Goa. ... Petitioners
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WP 87-2025
Versus
1. Shri. Sandesh Mandrekar,
s/o Narayan Mandrekar,
Age 38 years, Indian National,
r/o 223/1, S. B. B. Road,
Alto Porvorim, Bardez - Goa
2. The Registrar of
Cooperative Societies,
Department of Co-operation,
Government of Goa,
5th Floor, Sahakar Sankul,
Patto, Panaji, Goa.
3. The Returning Officer
Election to the Board of Directors of
Goa State Co-operative Marketing
and Supply Federation Ltd.,
Office of Asst. Registrar &
Asst. Election Officer of
Co-operative Societies,
Office at Central Zone,
Sahakar Bhavan, Near Municipal
Market, Panaji - Goa.
4. The Goa State Cooperative
Marketing and Supply
Federation Ltd.
Through the Managing
Director/Administrator,
P. O. Box No. 294, Sahakar
Bhavan, Near Municipal
Market, Panaji, Goa. ...Respondents
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Mr. Girish Sardessai with Mr. Prasanna Chawdikar and Ms.
Smrati Bangera, Advocates for the Petitioner.
Mr. Shivan Desai with Mr. Aniroodh Sardesai and Ms. Maria
Viegas, Advocates for Respondent No.1.
Mr. Deep Shirodkar, Additional Government Advocate for the
Respondent Nos.2 and 4.
CORAM : VALMIKI MENEZES, J.
RESERVED ON : 24TH MARCH, 2025.
PRONOUNCED ON : 16th APRIL, 2025.
ORAL JUDGMENT:
1. Rule. Rule made returnable forthwith. With the consent
of the learned Advocates for the parties, the petition is heard
finally and disposed of.
2. The Petitioners impugn herein Judgment dated
13.12.2024 allowing Cooperative Appeal No.23/2021 of the
Respondent No.1 under Section 83 of the Goa Cooperative
Societies Act, 2001 (the Act). By the impugned Judgment, the
Cooperative Tribunal has set aside an order dated 05.03.2021
passed by the Respondent No.2 (Registrar of Cooperative
Societies) rejecting the nomination paper of the Respondent
No.1; the impugned Judgment, as a consequence of holding the
nomination paper of Respondent No.1, has set aside the
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WP 87-2025
election of the Petitioner Nos.1 to 6 and Respondent No.5
herein (Respondent Nos.4 to 10 before the Tribunal), to the post
of Directors to the Board of Directors of Respondent No.4 for
the period 2021 to 2026. The Tribunal has further directed
Respondent Nos.2 and 4 herein to declare a fresh election, for
the post of Directors to the Board of Directors of Respondent
No.4 within 60 days from the order, and to cause the election
to be held in accordance with law.
3. The facts relevant to the decision of this petition are as
under:
a. The Respondent No.4 is a Class B Cooperative
Federal Society, whose primary members are other
Consumer Cooperative Societies within the State of
Goa, registered under the Act. For the purpose of
elections and representation, every constituent
Consumer Cooperative Society member of the
Respondent No.4 is required to elect/nominate a
delegate, who has the right to file his nomination to
various elected posts in the Board of Directors of
the Respondent No.4.
b. The Respondent No.1/Original Appellant before the
Tribunal is a delegate of Shri Mahalsa Consumer
Cooperative Society, which is a Class B member of
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the Respondent No.4 Federation. Pursuant to the
election program for the Board of Directors of
Respondent No.4 being published by the
Respondent No.3, the Respondent No.1 submitted
his nomination form for which scrutiny was held
between 03.03.2021 and 05.03.2021. On
03.03.2021, the Petitioner No.1 filed objections to
the nomination of Respondent No.1, alleging that he
was not eligible to stand for elections being
disqualified by the provisions of Section 60(1)(d) of
the Act. Along with the objections, a certificate
dated 01.03.2021 issued by A.M. Mulgaonkar and
Co., Chartered Accountants, was annexed. The
objections were opposed by the Respondent No.1
by filing a reply dated 04.03.2021, disputing the
documents produced by the Petitioner No.1, despite
which the Respondent No.2 published a list of valid
nominations, wherein the name of the Respondent
No.1 did not find inclusion.
c. By the impugned order of 05.03.2021, relying upon
the contents of the certificate issued by the
aforementioned Chartered Accountant, the
Respondent No.3 rejected the nomination of
Respondent No.1 holding that the proprietor of one
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Vedant Paints and Vedant Stationery was a family
member of the Respondent No.1, and undertook a
business of similar kind as carried out by the
Respondent No.4 Federation. The nomination was
rejected on the ground that the Respondent No.1
stood disqualified from being a Director in terms of
Clause (d) of Sub-Section 1 of Section 60 of the Act.
d. Subsequently, elections came to be held without the
nomination of the Respondent No.1, who was
precluded from contesting these elections by the
rejection of his nomination through the impugned
order; pursuant to the elections held, the Petitioners
and Respondent No.5 were declared elected to the
Board of Directors of the Federation.
e. On an appeal being filed before the Tribunal, the
impugned order was set aside, and as a
consequence, the entire election process was also
set aside and a direction was issued calling for fresh
elections after including the Respondent No.1 as a
nominee. The Tribunal has proceeded to hear the
challenge to the impugned order as an election
dispute under Section 83(1) of the Act.
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4. The following questions are to be determined in this
petition:
(a) Whether the interpretation given by the Tribunal to
the provisions of Clause (d) of Sub Section 1 of
Section 60 of the Act, that where the business
carried out by the family of the member of a Society,
covers only a few of the products/services carried
on by the Society, there can be no disqualification
incurred by that member, is a correct interpretation?
(b) Whether the Tribunal has committed any error in
holding that the Petitioners had not proved that the
Respondent No. 1 had incurred a disqualification
under Clause (d) of Sub Section 1 of Section 60 of
the Act?
SUBMISSIONS
5. Shri. Girish Sardessai, learned Advocate appearing for
the Petitioners, makes the following submissions:
(a) That the Tribunal has arrived at an incorrect legal
interpretation of Clause (d) of Sub Section 1 of
Section 60 of the Act and given a restrictive
meaning to the provision; the Tribunal has
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committed error of law by holding that since the
business conducted by the brother of Respondent
No. 1 was that of sale of stationary items, ice cream
and some retail items was in the nature of a retail
shop, was different from the business carried out by
the Respondent No. 4/Federation whose business in
the nature of super markets/Department Stores,
which is extensive, not limited to stationary
business and carried out over the entire State of
Goa.
(b) It was submitted that the Tribunal had further
committed an error of law in interpreting that the
Returning Officer was required to carry out a
detailed inquiry into the allegations levelled against
the Respondent No. 1, to disqualify him; he submits
that the process of considering objections against a
nomination, is summary in nature, and in the present
case, the Returning Officer has acted within the
bounds of the jurisdiction conferred upon him under
Section 60. He relies upon a Judgment of the
Supreme Court in N. T. Veluswami Thevar V/s G.
Raja Nainar (AIR 1959 SC 422) to contend that the
enquiry which is made by the Returning Officer is
summary in character and a challenge to rejection
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or acceptance of a nomination paper would be
required to be done by an Election Petition and not
by an Appeal under Section 83.
(c) He further submits that the Tribunal has exceed the
jurisdiction vested in it by not only setting aside the
order rejecting the nomination, but setting aside the
entire election.
6. Learned Advocate Shri. Shivan Dessai, appearing for
Respondent No. 1, supports that impugned Judgment and
advances the following submissions:
(a) That though the matter before the Administrative
Tribunal was registered as a co-operative Appeal,
the Tribunal, has proceeded on the basis that it was
an election disputes under Section 83(1) of the Act
and has infact, exercised jurisdiction under that
provision; the order setting aside the
disqualification order passed by the Returning
Officer and consequent setting aside of the election
is within the powers of the Tribunal, whilst deciding
an election dispute.
(b) Whilst supporting the broader interpretation
rendered by the Tribunal to Clause (d) of Sub
Section 1 of Section 60 of the Act, learned Counsel
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for Respondent No.1 has placed reliance on a
Judgment of this Court in Nanaji Bhokre V/s
Commissioner reported in AIR 1994 Bombay, 204,
to contend that there was no material allegation as
required by the provisions of Section 60 made in the
objections to permit the Returning Officer to reject
the nomination.
(c) Learned Advocate for the Respondents submits that
the objections to a nomination are required to be
clearly pleaded with supporting evidence that
would enable the Returning Officer to summarily
decide whether the disqualification is incurred, in
the present case the pleadings are totally vague and
the documents, a certificate of Accountant produced
to support the objections, does not even disclose the
source for the conclusions stated therein. It was
submitted that where the documents were disputed,
the same could not be considered at all for deciding
the objections for disqualifying the Respondent No.
7. For deciding the questions formulated above, for
determination in this petition, it would be apposite to first quote
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the provisions of Clause (d) of Sub Section 1 of Section 60 of
the Act.
"60. Disqualification for being director.--
(1) In addition to such criteria as may be
specified in the bye-laws, a person shall be
ineligible for being chosen as a director, if
he,--
.....
(d) carries on business of the kind carried
on by the society, either in his name or in
the name of any member of his family or he
or any member of his family is a partner in
a firm or a director in a company which
carries on business of the kind carried on
by the society;"
8. There is no ambiguity in the explanation to clause (d),
which specifies who are the family members referred to in the
clause. The only question is whether if such member or a family
member of his family conducts a business of the kind carried
on by the Society should give such a meaning, as to include
even a single product or service which is part of the business of
the Society/Federation. The intent, it appears from the
provision, is to avoid any serious competition by a member or
a member of his family, operating a similar business within the
area of operation of the Society's business. This would
necessarily require the provision to be interpreted from case to
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case, more so considering the expanse and reach of the Society
or Federation's business and the specific products or services
that its business sells or provides.
9. According to the reply filed by the Respondent No. 1 to
the objections to his nominations, the Federation runs a
Department Store or Supermarket for retail sale of a wide range
of products. The Respondent contends that the categories of
products that the Federation deals with and their corresponding
HSN No. as per GST website are entirely different from HSN
No. of the products sold by the family member of Respondent
No. 1. According to the reply, the classification of the two
businesses are completely different and distinct as also the area
where the retail business of the Federation is carried out is at
Panaji, while that of the family member is at Porvorim.
10. In paragraph 16 of the petition, the Petitioners pleads that
subsequent to the passing of the order, from information
gathered by them, the business of the family member of the
Respondent No. 1 under the name and style of "Vedant
Stationary and Agencies" is not only for stationary items such
as notebooks, but was also selling umbrellas, raincoats, ice
creams, LED bulbs and other items which are also sold by
Respondent No.4/Federation.
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Therefore, assuming that a few of the class of products
dealt with in the business of the family member of the
Respondent No. 1 are also sold, amongst a vast number of other
products forming part of the business of Respondent No. 4,
which runs a Department Store/Supermarket, could this be
considered as a business of the kind carried out by the Society.
11. The purpose of clause (d) is to disqualify a member of the
Federation, who on his own or through a family member carries
out a competing business. The business carried out by him
should be of similar nature, extent and width in terms of the
products or services as the one carried out by the Federation or
Society of which he is a member. If the business of the member
or his family is such that it deals with one or a few of the
products or services which may be carried out by the business
of federation, that by itself would not render a member
disqualified from a nomination for elections. The nature or
class of business, as a fact, would have to be demonstrated by
the objector to be, prima facie, similar and of the kind that
could be termed a competing business, in its territory of
operation and the range of products and services. Merely
because some of the products or services dealt with by the
business of the member or his family are similar in nature, this,
ipso facto would not render the member disqualified.
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12. Section 73-FF(v) of the Maharashtra Co-operative
Societies Act 1960, is somewhat pari material with the
provisions of Clause (d) of Sub Section 1 of Section 60 of the
Goa Act. These provisions came up for interpretation and
found that they would be applied in terms of their interpretation
and scope of summary inquiry to be conducted by the
Returning Officer in Nanaji Bhokre (supra). The relevant
paragraphs of the Judgment are quoted below:
"8. Coming to the merits of the order,
unfortunately it seems that both the
Returning Officer and the Divisional
Commissioner have not bothered to go into
the language of S. 73-FF(V) of the Act.
This is how the section goes:
"S. 73-FF. (1) Without prejudice to the
other provisions of this Act or the rules
made thereunder in relation to the
disqualification of being a member of a
committee, no person shall be eligible for
being appointed, nominated, elected, co-
opted or, for being a member of a
committee, if he--
...
(v) carries on business of the kind carried
on by the society either in his name or in
name of any member of his family or he or
any member of his family is a partner in a
firm or a director in a company which
carries on business of the kind carried on
by the society;
Explanation: - For the purposes of this
clause, the expression "family" means a
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wife, husband, father, mother, brother,
sister, son, daughter, son-in-law or
daughter-in-law."
It is undoubtedly true that the brother of
the petitioner is running a shop in his own
name. It is further undoubtedly true that
the said business is akin to the business of
the society. However, what is really absent
is that this business which is being run by
the brother is not being carried for and on
behalf of the petitioner. The look at the
language would show that the
disqualification is invited when the said
business carried, on by the person who
wishes to be elected or wants to continue
as a member of the Managing Committee
either in his name or surreptitiously in the
name of l some other relative. Therefore,
there has to be an allegation against the
person that fact it is the business of such
person and the same is being run in the
name of t brother or a relative. Merely
because a member of the family is running
the busine that by itself will not draw the
disqualification. It will have still to be
proved that there is some nexus between
the concerned person and that business.
The business if it is run by any of the
member of the family of the person
concerned ipso facto will not invite the
disqualification. Now considering the
complaint, it is nowhere suggested that the
said brother is carrying on the business in
fact on behalf of his brother, i.e., the
present petitioner Or that it is in fact the
business of the petitioner and, therefore,
the petitioner should stand disqualified.
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9. Shri Madkholkar, the learned Asstt.
Govt. Pleader, however, drew my attention
to the words that if such person is or any
member of his family is a partner in a firm
or a director in a company which carries
on such business, then also that fact by
itself would draw the disqualification.
Here the situation is entirely different.
"Firm" is defined under Sec. 2(14) of the
Act which says that the "firm" means a firm
registered under the Indian Partnership
Act, 1932. There is no allegation that there
is in existence any such firm or that the
brother of the petitioner is a partner in
such firm. There is further no allegation
that there is any company and that the
brother of the petitioner is a director in
such company. Shri Madkholkar questions
the position and contends that it is really
anomalous that if the brother merely
remains a partner in the firm it is sufficient
to draw the disqualification while if the
brother actively does a business as a
proprietor will not draw such
disqualification. It is not for this Court to
question the wisdom of the Legislature but
the real reason appears to be the business
as a proprietor may not be as wide or as
substantial as that of a firm or a company
and, therefore, probably if the brother or
any member of a family carries on business
on his own and without being connected or
without having any nexus with the
concerned person, no disqualification
would ipso facto follow. The Divisional
Commissioner has completely ignored this
aspect and has chosen to stamp the order
of the Returning Officer as a correct order
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merely on the ground that there is in fact
such business going on in the name of the
brother. The essential finding that it is the
petitioner who is carrying on the business
in the name of his brother is wanting. Since
the relevant finding is wanting the order
passed by the Divisional Commissioner
must be held to be incorrect. For the same
reasons, the order passed by the Returning
Officer must also be held to be incorrect.
The objection is also completely silent In
fact if the last part of the objection is read,
it will be seen that the section has been
completely misunderstood even by the
objector who was under the impression
that if the business is being carried on by
any of the family members then that by
itself would draw the disqualification
under the section. In short, there being no
such material allegation as required under
Section 73-FF(v) of the Act, it must be held
that the Election Officer was in error in
rejecting the nomination paper and the
Divisional Commissioner was also in error
in confirming the said order. Both the
orders will have, therefore, to be set
aside."
13. The interpretation rendered by me to the provisions of
clause (d) of the Goa Act find support from the interpretation
given to similar provision in a similar fact situation by the
Judgment of this Court in Nanaji Bhokre (supra). For the
aforementioned reasons, no fault can be found with the
interpretation given by the Tribunal to the scope of the
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provisions of clause (d) and the application of this
interpretation to the facts of the present case, as can be found
in paragraph 20 of the impugned Judgment. The Tribunal has
rightly held that the nature and scope of the business carried out
by the Federation, from the facts on record is much wider and
more extensive than the business carried out by the family
members of the Respondent No. 1, which is a mere retail shop.
I therefore hold that the first point for determination in the
affirmative.
14. In the present case, the allegations in the
complaint/objections dated 03.03.2021 only state that the
candidates do not fulfil Section 60(d) of the Act and are
disqualified from being Directors. The objections do not state
the nature of the business carried out, products or services dealt
with in the business or in what manner they compete with the
products and services, or the area of operation of the business
of the Federation. Apart from the objections being vague and
devoid of materials particular for the Returning Officer to make
a summary inquiry and decide, reliance placed on a disputed
certificate issued by an Accountant, not even supported by an
affidavit, could not even be considered as evidence of such
competing business. Apart from this there is no other material
on record to verify the nature of the business in terms of
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products and services that the Federation indulges in or even
the Territory within which it operates such Department Stores.
15. The Returning Officer ought to have rejected the
objections of the Petitioners at the threshold, since the
objections were vague and totally devoid of any specific
allegations to support a case for disqualification under Clause
(d) of Sub Section 1 of Section 60 of the Act. Reliance on a
certificate of Chartered Account which was disputed and not
even supported by an affidavit would certainly not be
considered as proof of allegations and much less, when there
was no material whatsoever before the Returning Officer to
compare the nature of the business of the Respondent No. 1 or
his family member with that of the Federation. On going
through the entire record, the nature of the business of the
federation was never placed before the Returning Officer, nor
does he make any reference to the material which forms basis
for his conclusion that the business run by the member through
his family member was of the kind run by the Federation. The
findings of the facts rendered in the order of the Returning
Officer dated 05.03.2021 are therefore without any foundation.
16. In Nanaji Bhokre (supra), this Court has taken a view that
where the objections are completely silent and make no
material allegations as are required by the section, it must be
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held that the Returning Officer was in error in rejecting the
nomination paper. The Judgment further holds that where there
is no allegations in the objections, that even if such business is
similar, it is being run by the family member for and on behalf
of the member of the Federation, the objections ought to be
rejected.
17. The facts in the present case are exactly similar to the one
dealt with by this Court whilst rendering Judgment in Nanaji
Bhokre (supra).
The objections do not make any factual allegation, much
less allege that the business of the family member was run on
behalf of the Respondent No. 1 or even that business is of the
kind run by the Federation. All that the objections state is that
the candidate (Respondent No. 1) does not fulfil the
requirements of Section 60(d) and is disqualified from being a
Director. The objections are devoid of any reference to the
nature of business, products dealt with or area of business or
make any reference to the similar products dealt with in the
business of the Federation. The objections also do not alleged
that the business was carried out on behalf of the Respondent
No.1, who was the member of the Federation. Merely because,
the brother of the Respondent No. 1 carries out a similar
business, it would not render the Respondent No. 1
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disqualified, unless the objections specifically aver that the
brother's business was carried out on behalf of the Respondent
No. 1 himself. The objections are devoid of such an allegation.
18. A perusal of the Tribunal's order would reveal that it has
reached the finding that there was no allegation in the
objections that the Respondent No. 1 was carrying out a
business of the kind carried out by the Federation and nor there
are averments in the objections or allegations to prove that the
business of the family member was carried out in the name of
and on behalf of the Respondent No. 1. It is also held that there
is no material on record or even allegation made that the
Respondent No. 1, was a partner in the firm or the Director of
the company carrying out the business of the kind carried out
by the Federation. The findings on this issue which are in
paragraphs 21 and 22 of the order are based on the record and
cannot be termed to be perverse. The Tribunal has correctly
applied the law on the subject to the facts of the case and its
Judgment on this aspect cannot be termed either illegal or
suffering from any legal infirmity. I therefore, hold the second
point for determination, i.e. whether the Tribunal has
committed any error in holding that the Petitioners had not
proved that the Respondent No. 1 had incurred a
disqualification under Clause (d) of Sub Section 1 of Section
60 of the Act, in the negative.
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19. Referring to the Judgment of N. T. Veluswami (supra),
which deals with the scope of the inquiry to the objections to
the nominations and the remedy against grant or rejection of
the same, it would be necessary to quote the following
paragraph from that Judgment.
"9. It was contended for the respondent
that the proceedings before the Tribunal
are really by way of appeal against the
decision of the Returning Officer, and that,
therefore, the scope of the enquiry in the
election petition must be coextensive with
that before the Returning. Officer, and
must be limited to the ground taken before
him. It was argued that a decision could be
said to be improper only with reference to
a ground which was put forward and
decided in a particular manner by the
Returning Officer, and that therefore the
expression improperly rejected would, in
its true connotation, restrict the scope of
the enquiry before the Tribunal to the
ground taken before the Returning Officer.
We are unable to agree with this
contention. The jurisdiction which a
Tribunal exercises in hearing an election
petition even when it raises a question
under Section 100(1)(c) is not in the nature
of an appeal against the decision of the
Returning Officer. An election petition is
an original proceeding instituted by the
presentation of a petition under Section 81
of the Act. The respondents have a right to
file written statements by way of reply to it;
issues have to be framed, and subject to the
provisions of the Act, the provisions of the
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Civil Procedure Code regulate the trial of
the petition. All the parties have the right
to adduce evidence, and that is of the
essence of an original proceeding as
contrasted with a proceeding by way of
appeal. That being the character of the
proceedings, the rule applicable is that
which governs the trial of all original
proceedings; that is, it is open to a party to
put forward all grounds in support of or
negation of the claim, subject only to such
limitations as may be found in the Act.
It should be noted in this connection that if
a petition to set aside an election on the
ground of improper rejection of a
nomination paper is in the nature of an
appeal against the decision of the
Returning Officer, then logically speaking,
the decision of the Tribunal must be based
only on the materials placed before the
Returning Officer given with respect to the
ground which was urged before him, and
no fresh evidence could be admitted before
the Tribunal except in accordance with
Section 41, Rule 27. The learned Judges in
the court below, however, observe that
though the enquiry before the Tribunal is
restricted to the particular ground put
forward before the Returning Officer, it is
not restricted to the material placed before
him, and that all evidence bearing on that
ground could be adduced before the
Tribunal. This, in our view, is quite correct.
The enquiry which a Returning Officer has
to make under Section 36 is summary in
character. He may make "such summary
enquiry, if any, as he thinks necessary"; he
can act suo motu. Such being the nature of
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the enquiry, the right which is given to a
party under Section 100(1)(c) and Section
100(1)(d) (i) to challenge the propriety of
an order of rejection or acceptance of a
nomination paper would become illusory,
if the Tribunal is to base its decision only
on the materials placed before the
Returning Officer."
20. In the present case, the Tribunal has, in fact, treated the
matter before it as an election Petition and proceeded on the
basis and in line with what has been held by the Supreme Court
in N. T. Veluswami (supra), that the scope of its jurisdiction was
co-extensive with that of the Returning Officer. The Tribunal
has proceeded to consider all evidence having a bearing on the
case and has arrived at a conclusion that the nomination was
erroneously rejected. In fact, further in line with what has been
held by the Supreme Court, the Tribunal has rightly set aside
the election on the ground of improper rejection of a
nomination paper. No separate Election Petition is required to
be filed for that purpose and the election could be set aside on
the ground of improper rejection of nomination alone.
21. The impugned Judgment does not call for any
interference in the supervisory jurisdiction of this Court under
Article 227 of the Constitution of India and is therefore
rejected. No costs.
16th April, 2025
WP 87-2025
22. Rule discharged.
VALMIKI MENEZES, J.
16th April, 2025
