wp2905­11.doc 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2905 OF 2011 Sau.Sarika R. Mane & Ors .. Petitioners versus State of Maharashtra & Ors .. Respondents Mr.Tejpal S. Ingale for the petitioners. Ms.P.S.Cardozo, A.G.P for respondent Nos.1 and 2. Mr.Pralhad D. Paranjape for respondent No.5. Mr.S.S.Patwardhan for respondent Nos.6 to 8. CORAM : S.C.DHARMADHIKARI, J. 30th JUNE 2011. P.C.: . Rule. By consent rule made returnable forthwith. The respondents waive service. By this petition under Article 226 of the Constitution of India, the petitioners are challenging the order passed by the Minister for Co-operation, Government of Maharashtra dated 24th March 2011 in Revision Application No. 520 of 2010. By this order, the Minister allowed the revision application filed by respondent Nos.6 to 8 in this writ petition and wp2905­11.doc 2 set aside the order of the Divisional Joint Registrar, Kolhapur dated 20th June 2010. The Minister confirmed the order dated 6th May 2010 passed by the Assistant Registrar appointing the administrator under section 78 of the Maharashtra Co-operative Societies Act, 1960. 2 The affairs of the respondent No.5-Society are the subject matter of these proceedings. It is the claim of the petitioners that they are managing committee members of the Society. Respondent Nos.6 to 8 were also managing committee members. They have resigned and, therefore, the managing committee is now reduced to six persons. It is stated that the elections for the managing committee were held on 14th February 2008 for a period of five years and the term is for five years. The term thus expires on 13th February 2013. It is common ground that out of eleven members of managing committee, two members Vitthal Methe and Maruti Patil were disqualified. Thereafter, respondent Nos.6 to 8 tendered their resignations. It is stated that the petitioner No.6 had also resigned but, he subsequently withdrew the resignation. In the meeting held on wp2905­11.doc 3 15th September 2009, resignation of respondent Nos.6 to 8 came to be accepted. In terms of the by-laws of the Society, the quorum for managing committee is fixed and that has been fulfilled throughout. 3 The grievance of the petitioners is that a show cause notice came to be issued on 16th September 2009 on the complaint made by respondent Nos.6 to 8 to this writ petition. A perusal of this show cause notice with the assistance of the counsel appearing for both sides, indicates that there is a reference therein to an order passed on 31st August 2009 under section 78 of the Maharashtra Co-operative Societies Act, 1960. That order is an order of disqualification of two members of the managing committee. However, by the impugned show cause notice dated 16th September 2009, the petitioners were called upon to show cause as to why administrator should not be appointed, because the managing committee is of eleven members, out of which two have been disqualified, four have resigned and, therefore, only five members remained. These five members do not constitute the required quorum. In these wp2905­11.doc 4 circumstances, the affairs of the Society have come to a stand- still and the petitioners were directed to show cause as to why administrator should not be appointed. The petitioners gave a reply to this show cause notice and from the record it is clear that on this show cause notice, an order came to be passed on 26th October 2009 appointing an administrator to take charge of the affairs of the respondent No.5-Society and hold elections within a period of six months. This order of the Assistant Registrar, Co- operative Societies, Taluka Karveer, District Kolhapur dated 26th October 2009 was challenged by way of an appeal being Appeal No.50 of 2009. The Divisional Joint Registrar after hearing both sides on this appeal made the following order: “From the aforesaid facts if the matter is remanded back for proper adjudication as at present it is seen that there is quorum. Till the acceptance of resignation of appellant No.6 as per the constitution provision i.e By-laws of the Society. According to by-law No.40 it is the provision that in case of resignation of managing committee member there is need of acceptance. Under clause the society neither accepted nor rejected the resignation of the appellant No.6. Even the appellant No.6 has shown to be withdrawn his resignation before respondent No.1, but this act of the appellant No.6 is not just and proper. Because he ought to have withdraw resignation by filing an application before the society. As the respondent No.1 is not wp2905­11.doc 5 competent to decide the resignation of the appellant No. 6, the society has to decide the resignation as per the provisions of by-laws. Hence I relied on the ratio as laid down in 2005(4) BCR 568, paragraph Nos.3 and 4. In view of aforesaid observations, I pass the following order: : O R D E R : The appeal is hereby partly allowed. The impugned order passed by the respondent No.1 is hereby set aside and the matter is remanded back for a fresh hearing as per law.” 4 This order of 5th January 2010 has not been challenged by anybody. In terms of this order, the Assistant Registrar heard the matter again and once again on 6th May 2010, he proceeded to appoint an administrator of the respondent No.5-Society. The petitioners before me challenged that order by filing Appeal No.48 of 2010 before the Divisional Joint Registrar, Kolhapur. This appeal was heard and on 20th June 2010 it came to be allowed. The Divisional Joint Registrar while allowing the appeal, clearly held that the earlier appellate order (Appeal No.50 of 2009 decided on 5th January 2010) is very clear and according to it, the Assistant Registrar should have given a fresh show cause notice. wp2905­11.doc 6 Neither the fresh show cause notice is issued, nor the federal Society is consulted by the Assistant Registrar. Therefore, his order dated 6th May 2010 superseding managing committee and appointing administrator is erroneous. Consistent with this reasoning, he has allowed the appeal but, what he has directed is that the Assistant Registrar is at liberty to take appropriate action as per law. It is this order of the Divisional Joint Registrar which had been challenged by the respondent Nos.6 to 8, to this writ petitio, by filing an revision application before the State Government being Revision Application No.520 of 2010. This revision application was allowed on 8th September 2010. However, the petitioners before me challenged that order, and this Court in Writ Petition No.7546 of 2010 decided on 4th October 2010 proceeded to set aside this order and the revision application was directed to be heard again. All points were kept open. 5 The revision application was heard in pursuance of this order once again on 24th March 2011. It came to be allowed and that is why this writ petition. wp2905­11.doc 7 6 With the assistance of Mr.Ingle and Mr.Patwardhan who are appearing for the contesting parties to this writ petition, I have perused the petition and all annexures thereto. While an attempt was made to show some of the documents to me to indicate that there was quorum or lack of it or that one Bapu Atigre, who is said to have resigned, has been shown to have attended a meeting held on 15th September 2009, suffice it to note for the purpose of the present writ petition that the said Bapu Atigre was a party alongwith the petitioners to the Appeals before the Divisional Joint Registrar. He has all throughout been impleaded as either appellant or petitioner. Even in this writ petition, he is one of the party petitioner. In such circumstances and when it is stated that some proceedings in about his resignation are pending in the Co- operative Court, it will not be proper for me to express any opinion on the contents of the documents which have been shown to me by Mr.Ingle and Mr.Patwardhan. 7 To my mind, the Minster was in clear error in allowing revision application. The Minister in the entire order passed by wp2905­11.doc 8 him on two occasions, has not applied his mind to the fact that when the Divisional Joint Registrar firstly passes an order on 5th May 2010 and subsequently on 20th June 2010 is it really open for the Assistant Registrar to pursue the proceeding arising out of the show cause notice which has been issued on 16th September 2009. That show cause notice on which an order was passed appointing an administrator cannot be pursued any further. In this case, it would be pertinent to note at this stage itself, that on 26th October 2009, the Assistant Registrar made an order in furtherance of the show cause notice dated 16th September 2009 superseding the managing committee and appointing an administrator. This order was challenged by the petitioners before me by filing an appeal being Appeal No.50 of 2009 before the Divisional Joint Registrar. He allowed the appeal and remanded the case for fresh consideration. Whether this remand means the show cause notice survives and, therefore, can be proceeded further or whether this remand means that the Assistant Registrar could only issue a fresh show cause notice or not, is once again a matter not in dispute. The understanding of the authorities is that, this order was not challenged by any of the contesting wp2905­11.doc 9 respondents further. They have accepted the same. In pursuance of the said remand, a fresh order was made on 6th May 2010. When that order was made, what has been observed is that the said Bapu Atigre and others are party to the proceedings instituted by one Digambar, in Co-operative Court No.I. There were certain affidavits produced. The issue was, whether he has resigned or whether he tendered his resignation and has withdrawn the same. There was an issue raised as to whether parties could have acted upon the managing committee’s decision. On all these aspects, the Assistant Registrar proceeded to hear the parties. Admittedly, these are not part of the show cause notice issued on 16th September 2009. He still proceeds to take note of the said events and in continuation of the show cause notice that had been issued by him, once again, appoints an administrator. The Divisional Joint Registrar in Appeal No.48 of 2010 at the instance of the present petitioners opines that the earlier order of the Divisional Joint Registrar in Appeal No.50 of 2009 does not mean that the earlier proceedings can be continued but the understanding is that a fresh show cause notice will have to be issued. Therefore, Assistant Registrar’s order wp2905­11.doc 10 acting in furtherance of the same show cause notice and appointing an administrator of the respondent No.5-Society is bad in law. Additionally, the Divisional Joint Registrar by order dated 28th June 2010 holds that there is no consultation with the federal society and that is contemplated by sub-section 1of section 78. On both these issues, he set asides the order dated 6th May 2010 and gives liberty to take appropriate action to the Assistant Registrar in accordance with law. 8 When this was the nature of the dispute before the Minister, least that was expected of him was that he will, as an impartial adjudicator, decide the matter. However, it is not without coincidence that his findings are nothing but reiteration and affirmation so also expression of agreement with the written arguments tendered before him. The written arguments that have been referred to by him have been referred earlier also in an order passed by him which came to be set aside by this Court. The Minister has gone about narrating and stating the facts and faulting the Divisional Joint Registrar for not taking into account certain stipulations in the by-laws. He also faults the Society for wp2905­11.doc 11 not maintaining the records in relation to the resignation of Bapu Atigre. The Minister, then, proceeds to hold that because of the interim orders of the Co-operative Court and on account of lack of quorum, the order passed by the Assistant Registrar is justified and, therefore, an administrator needs to be appointed. In the opinion of the Minister, the affairs of Society have come to a stand-still. From a reading of this order, I find absolutely no reference to the two relevant and crucial factors as to whether the proceedings could have been continued when the earlier show cause notice and the order made in pursuance thereof had been set aside and if at all they could have been continued as allegedly understood by all parties, was there any necessity of consultation with the federal society and whether that requirement has been fulfilled in the present case. These issues though highlighted remain unanswered and undecided in the order passed by the Minister. The Minister has also not adverted to the fact that between 15th September 2009 and 6th May 2010 there have been several meetings held of this very managing committee. If the affairs of the Society have come to a stand-still allegedly, then, how could these meetings have been held and whether there was wp2905­11.doc 12 justification for appointing an administrator in March 2011 on the basis of a show cause notice of 2009 are also matters which remain unconsidered and undecided by the authority, namely, the Minister for Co-operation/the State Government. 9 In such circumstances, the order being vitiated by total non-application of mind and the failure to consider the aspects noted above, leaves me with no alternative but to quash and set aside the same. The order is also vitiated by an error apparent on the face of the record inasmuch as it does not take into account the true effect and legal consequences of the orders of the Divisional Joint Registrar in Appeal No.50 of 2009 and Appeal No.48 of 2010. Further, it is perverse inasmuch as when arguments have been raised on the point of lack of consultation with the federal society, the Minister does not deem it fit to refer to the material produced in that behalf. For all these reasons, this writ petition succeeds. Rule is made absolute in above terms. However, it is clarified that this Court has not expressed any opinion on the issue as to whether affairs of the Society have come to stand-still or whether affairs can be continued despite wp2905­11.doc 13 disqualification of two managing committee members and on account of the resignation of respondent Nos.6 to 8 effective from 15th September 2009. If the Assistant Registrar is of the opinion that the affairs need to be corrected because they have allegedly come to a stand-still, then, despite my order it would be open for him to consider the matter afresh and take an action in accordance with law. However, it is clarified that in no case this order, direction and observation therein shall be construed as this Court permitting revival of the proceedings initiated pursuant to the earlier show cause notice. Thus, that show cause notice and all proceedings in pursuance thereof stand quashed and set aside. Therefore, the affairs will have to be judged in the present day light, considering the present circumstances and only if the intervention of the Assistant Registrar is justified then he can proceed to take necessary action in accordance with law. However, all pleas and contentions of both sides in that behalf are kept open. (S.C.DHARMADHIKARI, J)