1 wp986.11(1) IN THE HIGH COURT OF JUDICATURE OF BOMBAY, BENCH AT AURANGABAD WRIT PETITION NO. 986 OF 2011 1. Gautam S/o Kacharu Jagtap Age : 45 years, Occ : Agriculture, 2. Dnyandeo S/o Parwat Warpe Age : 35 years, Occ : Agriculture, 3. Dinkar S/o Murlidhar Warpe Age : 45 years, Occ : Agriculture, All R/o Kanoli, Tq. Sangamner, District Ahmednagar. ..PETITIONERS -VERSUS- 1. The Assistant Registrar Co-operative Societies (Milk), Ahmednagar, Dist. Ahmednagar. 2. Prakash Rambhau Rahane Age : 47 years, Occ : Legal Practitioner, R/o Vakil Colony, Behind Bhoritkar Mala, Sangamner, Tq. Sangamner, Dist. Ahmednagar. 3. Sanjay S/o Kailas Warpe Age : 25 years, Occ : Agriculture, 4. Sandeep S/o Eknath Warpe Age : 35 years, Occ : Agriculture, 5. Saurabh S/o Suresh Zavare Age : 26 years, Occ : Agriculture, 6. Vimal W/o Shashikant Zavare Age : 35 years, Occ : Household, & Agri., 7. Paraji S/o Bhausaheb Warpe Age : 27 years, Occ : Agriculture, 2 wp986.11(1) 8. Yakub S/o Ramchandra Jagtap Age : 35 years, Occ : Agriculture, 9. Rohidas S/o Kashinath Warpe Age : 32 years, Occ : Agriculture, 10. Smt. Parighabai S/o Sopan Warpe Age : 40 years, Occ : Household & Agri., 11. Sanjay S/o Deoram Warpe Age : 30 years, Occ : Agriculture, 12. Babasaheb S/o Vitthal Warpe Age : 33 years, Occ : Agriculture, 13. Babasaheb S/o Machindra Warpe Age : 24 years, Occ : Agriculture, 14. Rajendra S/o Sayaji Warpe Age : 37 years, Occ : Agriculture, 15. Machindra S/o Vasant Jagtap Age : 30 years, Occ : Agriculture, 16. Archana W/o Sachin Warpe Age : 27 years, Occ : Household, & Agri., 17. Kesharbai S/o Waman Warpe Age : 32 years, Occ : Agriculture R.Nos. 3 to 17 all resident of Kanoli, Tq. Sangamner, District Ahmednagar. ..RESPONDENTS ..... Mr. V.D. Hon, Advocate for petitioners. Mr. D.R. Korade, A.G.P. for respondent no.1. Mr. R.N. Dhorde, Advocate for respondent no.2. Mr. C.K. Shinde, Advocate for respondent nos. 3 to 17. ..... (CORAM : B.P. DHARMADHIKARI, J.) DATED : 13TH APRIL, 2011. 3 wp986.11(1) ORAL JUDGMENT : 1. The dispute is about eligibility of respondents 3 to 17 to vote in elections of a cooperative society by name Shri Balaji Sahkari Doodh Utpadak Sanstha ie Shri Balaji Cooperative Milk Producers Society registered under the Maharashtra Cooperative Societies Act,1960 for the tenure 2011 to 2016. This Court issued notice for final disposal on 09.02.2011. Thereafter, on 28.02.2011 poling then scheduled on 02.03.2011 was permitted to continue and votes cast by 15 respondents in dispute i.e. respondent nos. 3 to 17 before this Court were directed to be placed in sealed envelop. The declaration of result however, has been stayed. 2. At the outset Advocate Mr. Dhorde appearing for respondent no.2-Returning Officer has stated that each voters had about 5 to 6 votes to cast and votes of all respondents except one vote has been preserved separately. He contends that one vote cast by one of the respondents and meant for reserved category inadvertently got mixed with other votes. 3. Advocate Mr. Hon has contended that provisions of Section 27(3-A) of the Maharashtra Co-operative Societies Act, 1960, referred to as 1960 Act for brevity, permits an individual member 4 wp986.11(1) who has completed two years as such after his enrollment only to exercise right of voting. He states that though passing of alleged resolution dated 27.12.2009 by Society is very much in dispute, for the purposes of this Petition the said date also can be presumed as correct one. Even from the said date, till the date of publication of election programme on 07.01.2011, the respondent nos. 3 to 17 had not put in two years of memberships. According to him, therefore, the objections raised by the petitioners before the Returning Officer within time as stipulated in the election programme ought to have been allowed. As their objections were not looked into, the petitioners were constrained to approach Assistant Registrar i.e. respondent no.1 and the said Authority then directed deletion of names of members who had not completed 2 years but that also was not being implemented. Hence, Petition was required to be filed. 4. He invites attention to provisions of Section 30 of the Maharashtra Co-operative Societies Act, 1960 to argue that shares can be transferred to legal heirs provided legal heirs are duly admitted as a members. In this case, the respondent nos. 3 to 17 may be treated as admitted to membership on 27.12.2009 and hence, even in view of that provision, their names could not have been included in the voters list. He further contends that as votes 5 wp986.11(1) cast by these respondents are preserved separately, the same need to be ignored and result of the election should be declared accordingly. 5. Learned A.G.P. relies upon the reply affidavit filed by the respondent no.1 to point out that because of passing of resolution dated 27.12.2009 in their favour, respondents 3 to 17 are found to be eligible. 6. Advocate Mr. Dhorde for Returning Officer has urged that the present Returning Officer has been added as party respondent on 22.02.2011 and hence was not in office when the voters list came to be published or objection to it was filed. 7. Advocate Mr. Shinde for respondent nos. 3 to 17 contends that preparation and finalization of voters list is integral part of process of election and that process is already over. He therefore relies upon the judgment of this Court reported at "1994 Mh. L.J. 1115" - Ramkishan Bhanudas Shinde and others V/s State of Maharashtra and others, and the judgment of Hon'ble Apex Court reported at "AIR 2001 S.C. 3982" -- Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha, and another V/s State of Maharashtra and others, to 6 wp986.11(1) urge that this Court should not interfere at this stage as several disputed questions arise. According to him, remedy under Section 91 of the Maharashtra Co-operative Societies Act, 1960 is most appropriate in the present situation. 8. He has relied upon the reply affidavit filed on behalf of the respondent nos.3 to 17 to point out that death of earlier share holders/original members is much prior to two years of 7.01.2011 and admittedly, the respondent nos. 3 to 17 are their legal heirs. Immediately, after their death, the respondents become members and the petitioners have not pleaded any specific date in their Petition to show that on it these respondents have been conferred membership. He has relied upon the judgment of this Court reported at " 2009(4) Bom.C.R. 657" - Gondia District Central Co-operative Bank Ltd., V/s State of Maharashtra and others, particularly the observations on page no. 5 of the print-out, to argue that every heir of deceased member automatically becomes a member of Co-operative Society. In this view of the matter, according to him, Petition needs to be dismissed and the votes cast by these respondents need to be counted for the purposes of declaration of result. 9. On 20.08.2011, this Court has noted that total number of 7 wp986.11(1) voters eligible to participate in election as per voters list was 438 and out of it, dispute was in relation to 15 voters. Hence, direction was issued to keep votes cast by those 15 respondents separate and to complete the election process. 10. Perusal of the judgment of this Court in Gondia District Central Co-operative Bank Ltd., V/s State of Maharashtra and others (supra) reveals that it was filed by a District Central Co- operative Bank and grievance was about the membership to be given to individuals in it i.e. Federal Society. The Reserve Bank of India had instructed to see that individual membership is reduced to minimum. This Court found that it expected that no new members be admitted and as far as possible existing individual membership be reduced. The existing membership could be reduced by persuading individuals to accept price of the share & give up the membership. It held that even the Reserve Bank of India would not have a right to issue instructions not to transfer the shares to the heirs of the deceased. It cannot even prohibit transfer of shares of those members who may be alive and wish to transfer their share inter vivos. It is stated that same can be done by the legislative act alone and not by administrative instructions & an individual will have a right to transfer the share unless prohibited by law. Therefore, where a death of a member holding share occurs, 8 wp986.11(1) the heirs upon proof of heirship, would certainly be entitled to have them transfered to them. The share can be compulsorily redeemed inter vivos or by an act of legislature and not otherwise. Other connected Petition considered there was filed by heirs of deceased members challenging such bar. It is in this back ground that Court has found that Section 23 of the Maharashtra Co- operative Societies Act, 1960 does not apply to such heirs of deceased members. That objection raised by Counsel for the petitioner-bank was rejected and in the course, it has been observed that every heir of deceased member would automatically become a member of Federal society. This observation is due to availability of heirs ready & willing to become members & to discharge their obligations accordingly. The federal society viz district central bank mainly pleaded RBI directions in defence & hence this Court there had no occasion to comment upon legislative purpose or object behind S. 29 & 30 of 1960 Act. In AIR 2004 S.C. 909 --M. S. Madhusoodhanan v. Kerala Kaumudi Pvt. Ltd, Hon. Apex Court in paragraph 138 states it as settled law that shares are movable properties and are transferable. It further mentions that as far as private companies defined in the Companies Act, 1956 are concerned, the Articles of association restrict the shareholder's right to transfer shares and prohibit any invitations to the public to subscribe for any shares in, or 9 wp986.11(1) debentures of, the company. Hence, I find that the observations of this Court pressed into service by the respondents 3 to 17 do not imply that a heir or nominee not satisfying the eligibility conditions must still be made a member & no where lay down a law at least to govern present situation. 11. Before me, the position that in order to claim right to cast vote the respondent nos.3 to 17 must establish their membership over a period of two years is not in dispute. Provisions of Section 27(3A) of the Maharashtra Co-operative Societies Act, 1960 are very clear in this respect. The perusal of the provisions of Section 29 of 1960 Act reveals that those provisions deal with the transfer inter vivos of shares. Section 30 thereafter deals with cases of transfer of interest on the death of members. Perusal of its sub- section (1) shows that if there is any nomination by deceased, the share devolves upon such nominee and in absence of nomination to such person as may appear to committee to be the heir or a legal representative of the deceased member. This is followed by proviso adding a rider and that rider stipulates that such nominee or the heir or a legal representative, as the case may be, must be duly admitted as a member of society. It is therefore apparent that after death of member, there has to be a view or an opinion in favour of such successor that he/she appeared to the committee of 10 wp986.11(1) Society to be heir or legal representative of its deceased member. Obviously, such view or conclusion can be recorded through its resolution by committee of society either in favour of or against the claimant or then expressing opinion that particular third person appears to be heir or legal representative of deceased member. Thereafter, only the share can be transferred to that nominee or heir/legal representative only if such person is “duly admitted” as a member of the society. The proviso therefore leaves no manner of doubt that if such person i.e. nominee or claimant is not admitted duly as member, share can not be transferred to him. It is settled position that such share is “property” which can devolve as per the relevant law of inheritance. Such share of deceased may carry with it certain obligations or liabilities and question also arises whether a legal heir, who does not claim or inherit any movable or immovable estate of deceased, can refuse to become a member of Society. Conversely, question also arises whether Society can refuse membership to any heir or nominee, if it finds him/her not fulfilling the requirements of its bye-laws. Whether personal law of inheritance of deceased & scheme in 1960 Act are different & which one is decisive & needs primacy are the moot issues. These questions do not arise for determination here & parties also have not addressed this Court in that regard. But it shows that the death of member by itself may not result in transfer of share to a 11 wp986.11(1) particular person i.e. either as nominee or legal representative or even as heir. In any case, application of mind by Society through its executive committee is pre-requisite. It may be demonstrated by one or more resolutions passed in the matter either by such committee or then by Society. 12. Here, as per election programme, the objections to voters list were to be accepted till 21.01.2011 and then were to be decided on 22.01.2011. It is not in dispute, the present petitioners raised their objections before the Returning Officer on 21.01.2011 itself. The Returning officer has given communication which states that 15 respondents before this Court had submitted consent letters to society for grant of membership and on 27.12.2009 vide resolution no. 8 Society has granted them that membership. The said communication issued by the Returning Officer is not in dispute before this Court. Resolution dated 27.12.2009 is also produced before this Court by the petitioners as one of the exhibits and it mentions that some of the legal heirs of deceased members had applied to society and those applications were read out and accepted accordingly. Thereafter name of deceased member and against his names name of his legal heir has been recorded. Resolution states that the society has thus appointed legal heirs of deceased members and entry should be taken in record of society. 12 wp986.11(1) Leaving aside dispute about existence of this resolution, it is clear that in terms of proviso to Section 30 sub-section (1), the respondent nos. 3 to 17 have become members for the first time on 27.12.2009. They do not inherit seniority of deceased and have to become members in their own right as per said proviso and then only period of two years envisaged in S. 27(3A) begins to run. They therefore can complete period of two years only on 26.12.2011 and hence, were not eligible to be included in the voters list on 07.01.2011 when election programme came to be published. 13. Advocate Mr. Shinde has argued that Society is necessary party to this Petition. However, in the light of material which has come on record, it is apparent that the Returning Officer has supplied necessary documents and the society is not necessary party. Not only this, the respondent nos.3 to 17 have not brought on record anything to show that any disputed questions arise. They have not pleaded that before 27.01.2009, they had attended any meeting of society or they received any notice from the society as members. There is no challenge by them in any manner to resolution dated 27.12.2009 and they have opted to stand or fall with it. 13 wp986.11(1) 14. The judgment of the Hon'ble Apex Court in Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha and another V/s State of Maharashtra and others (supra) and the judgment of this Court in Ramkishan Bhanudas Shinde and others V/s State of Maharashtra and others (supra) no doubt show a bar to interference by this Court but then it is not absolute. Law settled is noted by the Division Bench of this Court has in judgment reported at "2006(3) Mh.L.J. 592" -- Dalsing S/o Shamsing Rajput V/s State of Maharashtra and others, where it held that interference in writ jurisdiction is permissible when it subserves the interest of society and furthers process of election. I am therefore not inclined to accept the arguments of bar of interference raised by Advocate Mr. Shinde. I have in WP 251 & 257 of 2011 decided on 2nd & 3rd February, 2011 here at Aurangabad, already taken a similar view. It is therefore not necessary to dwell more on this aspect. 15. In this situation, it is apparent that the respondent nos. 3 to 17 have no right to vote and their votes therefore can not be treated as valid and can not be counted while declaring the results of election. Accordingly, the Petition is allowed. The order of the Returning Officer at Exhibit `C' dated 22nd January, 2011 is hereby quashed and set aside. The respondent no.2-Returning Officer 14 wp986.11(1) shall ignore the votes cast by the respondent nos.3 to 17 and declare the result of election accordingly. Rule is made absolute accordingly. No costs. (B.P. DHARMADHIKARI) JUDGE gas/wp986.11