1 MNM IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.513 OF 2010 Shankar Maruti Naik ...Petitioner Vs. Balaso Parasharam Patil & Ors. ...Respondents AND WRIT PETITION NO.514 OF 2010 Balwant Dattatray Patil ...Petitioner Vs. Sakharam Naru Chavan & Ors. ...Respondents Mr. S.D. Patil, Advocate for the Petitioners Mr. Amit Borkar, Advocate for Respondent No.3 Mrs.Neha Bhide ‘B’ Panel, A.G.P for Respondent No.4 CORAM : SMT.ROSHAN DALVI, J. DATED : 20TH JANUARY, 2010 P.C. : 1. Rule. Rule returnable forthwith. 2. Respondent No.1 in both the Petitions have filed their nominations for election of Respondent No.3 Society. The Petitioner has challenged the nominations on the ground that the Respondent No.1 is the salaried 2 employee in some other Society. The Petitioner has obtained the certificate of that Society showing the employment of the Respondent No.1 who worked with the Petitioner. In Petition No.513/2010 the Respondent No.1 is shown to be a Chemist in one Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd., Kolhapur. In Petition No.514/2010 the Respondent No.1 is shown to be the Secretary of one Shree Hanuman Sahakari Pani Puravatha Mandali Ltd., Kolhapur. 3. The Petitioner relies upon the strict and literal interpretation of Section 73- FF (1)(vi). The Section lays down the disqualification of the membership of the Committee of the Co-operative Societies. Sub Section (vi) is in respect of the disqualification of the salaried employee of any Society or a person holding any office of profit under any Society. 4. Since Respondent No.1 in these Petitions are the Chemist and the Secretary being the salaried employees of their respective Societies the Petitioner seeks to oust them from the elections of the Respondent No.3 Society. 5. The constitutional validity of Section 73-FF came to be challenged. The Division Bench of this Court in the case of Murlidhar Bhaulal Malu Vs. Sudhakar Honaji Patil and others 1988 C.T.J.1 considered Constitutional validity of the aforesaid Sub-clause. Whilst upholding the Constitutional validity the Court observed that the purpose and object of the Subsection was to avoid conflict between interest and duty for showing the inability of a person to be appointed/nominated/elected and / or to be the member of a Committee. In paragraph 10 of the judgment it was observed that the 3 word ‘any’ in Sub Section (vi) cannot be read torn from its context. Since Section 73-BB provides for reservation of seats for the employees on the Committee of the Society and such representative of the employees is also entitled to be elected as an officer of such Society or to vote at the election of the officers of such Society, the provisions of Section 73-FF (1) must be considered only taking into account the purpose and object for setting out the disqualification. It is observed that there is imperative need for maintaining neutrality and impartiality. There is a need for avoiding the likelihood of conflict between interest and duty. The object is to secure independence of the members of the Committee so that the salaried employees of the Societies are not included in a Committee, since they being employees as well as Committee members may be in a position to receive favours or benefits from the executive, being under the obligation of the Committee members of the Society and being subordinate to the Society such members may be amenable to executive influence. 6. Consequently, it is seen that the interpretation of Section 73-FF is dependent upon the provision contained in Section 73-BB and hence the salaried employee who is sought to be disqualified as the salaried employee is the one who is of that Society alone. Consequently, the observation of the Division Bench is that due to reservation of seats for salaried employees on the Committee they would be disqualified from being elected on the Committee. The elected members are, therefore, distinct and separate from the members occupying the reserved seats on the Committee of the Societies. It would be for such members holding a position where there would be a likelihood of conflict between the interest and duty. It would 4 be such member who may not be neutral and impartial whilst taking decisions of the Committee. It would be such member who would be under the obligation or influence of the executive. Hence the specific words in paragraph 10 of the judgment relating to the aforesaid Sub Section are “……salaried employees of the Society concerned……” it is, therefore, observed thus:- “.......Such a conflict between interest and duties only qua the same Society…..” 7. It is, therefore, seen that the disqualification with regard to salaried employees of the Society is only qua the salaried employee of the Society in which the election of the Committee has to take place. 8. Mr. S.D.Patil on behalf of the Petitioner contends that a reading of paragraph 10 of the judgment in the case of Murlidhar (supra) shows that any salaried employee of any Society would be disqualified if there is a conflict of interest which can be shown between his appointment as the salaried employee and his election to the Committee. That argument cannot be accepted in view of the fact that such argument would require a wholly new Sub Section setting out another disqualification which can only be provided by the Legislature, since by interpretation a Court can read down a statute but not read up a statute. Such an interpretation cannot be made. 9. It may be mentioned that if the Legislation had contemplated any 5 circumstances as would give rise to a position creating conflict between interest and duty the Legislature would have legislated that as one of the further disqualifications in Section 73-FF of the Act, much as is contained in Section 299 of the Companies Act in which, taking into account the conflict that may arise between interest and duty, the Legislation has made a specific provision for disclosure of interest by Directors and the requirement of the sanction of the Board for contracts in which some of the Directors are interested under Section 297 thereof. 10.There is absolutely no apprehension of conflict between interest and duty in Writ Petition No.513/2010 in which Respondent No.1 is a Chemist of another Society. None is shown. However in writ Petition No.514/2010 an apprehension or likelihood of conflict between interest and duty may be taken to be remotely shown because Respondent No.1 is the Secretary of the aforesaid Shree Hanuman Sahakari Pani Puravatha Mandali Ltd., Kolhapur. Respondent No.3 Society has a deposit of Rs.5,66,440/- in Shree Hanuman Sahakari Pani Puravatha Mandali Ltd., Kolhapur which deals with the water supply to certain farmers would be in a position to sway or be amenable to be swayed by other members of that Society. Based upon that fact the apprehension is sought to be made out that there would be conflict of interest and duty of Respondent No.1 as a Committee Member and considering the object of Section 73-FF (1)(vi) of the Act he would stand disqualified. Such an apprehension cannot be entertained even before the Respondent No.1 is elected and is allowed to hold the office as the Committee member. The Respondent No.1 is statutorily not disqualified from being elected. 6 11.However if as a Committee member, upon being elected, Respondent No.3 does any act by which his duty towards Respondent No.3 Society is jeopardised by his interest in Shree Hanuman Sahakari Pani Puravatha Mandali Ltd., Kolhapu, the acts of Respondent No.3 may be challenged. 12.Consequently the Writ Petitions are dismissed. Rule is discharged. (SMT.ROSHAN DALVI, J.)