In a significant legal ruling, the Aurangabad bench of the Bombay High Court has underscored the authority of co-operative societies in handling the resignation of board members.
High Court Bench quashed an order issued by the Registrar (Co-operative Societies), emphasizing that the board of directors cannot be dissolved merely due to the resignation of half of its members before those resignations have been formally accepted by the society.
Justice Kishore C Sant presided over the case, which was brought before the court by Vinayak Chavhan, the elected Chairman of a co-operative society. Chavhan challenged an order passed by the Divisional Joint Registrar, Cooperative Societies, Aurangabad, which aimed to dissolve the board of directors and appoint an authorized officer under the provisions of the Maharashtra Co-Operative Societies Act, 1960.
Brief Facts:
The court's decision stemmed from an incident in which six out of twelve members of the society's board had submitted their resignations simultaneously. These resignations, however, had not been officially accepted by the society at the time the Registrar's order was issued. The court highlighted that the Registrar's actions were premature, as the society had not yet made a decision regarding the resignations during its scheduled meeting on February 16, 2022.
Contentions by the Parties:
Vinayak Chavhan, the elected Chairman, argued that the Registrar's dissolution order was procedurally flawed, citing improper acceptance of resignations and a premature decision before a scheduled meeting. Chavhan highlighted the absence of required notices. On the other hand, the Divisional Joint Registrar, Cooperative Societies, Aurangabad, contended their authority to dissolve the board under statutory provisions, emphasizing the need for swift action to maintain the society's stability amidst resignations. The Registrar stressed adherence to their legal power and their responsibility to safeguard the society's interests
Observations by the Court:
Justice Sant emphasized, "The Registrar has hurriedly proceeded to pass the order without adhering to proper procedures. The By Laws were duly passed and accepted, making it clear that the society was to make a decision on the resignations."
Furthermore, the court ruled that the Registrar's power to appoint a committee or authorized officer, as outlined in the Maharashtra Co-Operative Societies Act, should only be exercised when specific contingencies arise, and proper procedures, including displaying notices, are followed. In this case, the Registrar had failed to issue a notice as required by law, inviting objections and suggestions with respect to the proposed dissolution of the board.
Decision of the Court:
The court set aside the impugned order, thereby allowing the writ petition.
Case Name: Vinayak Ukharam Chavhan vs Divisional Joint Registrar
Coram: Justice Kishore C Sant
Case No.: WRIT PETITION NO. 521 OF 2023
Advocates of the Petitioners: Mr. Kamalakar J. Suryawanshi
Advocates of the Respondent: Ms. D.S. Jape, Mr. L.H. Kawale and Mr. R.V. Gore
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