ssp 1 LPA 148 of 2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION LETTERS PATENT APPEAL NO.148 OF 2011 IN WRIT PETITION NO.1133 OF 2011 WITH CIVIL APPLICATION NO.181 OF 2011 IN LETTERS PATENT APPEAL NO.148 OF 2011 Sadashivrao Mandlik Kagal Taluka Sahakari Sakhar Karkhana Ltd., Hamidwada Kaulage, Tal. Kagal, Dist. Kolhapur. .....Appellant versus 1. The Regional Jt. Director (Sugar) Kolhapur Region, Kolhapur. 2. Shri Yuvraj Dattatraya Patil, age 56 years, Occu – Agriculture, r/o Mouje Sangaon, Tal. Kagal, Dist. Kolhapur. 3. Shri Pratap Yashwantrao Mane, Age 49 years, Occu – Agriculture, R/o Kagal, Tal. Kagal, Dist. Kolhapur. 4. Shri Vikas Hambirrao Patil, Age 35 years, Occu – Agriculture, R/o Kurukali, Tal. Kagal, Dist. Kolhapur. 5. Shri Balasaheb Parsu Turambe, Age 50 years, Occu – Agriculture, R/o Sak, Tal. Kagal, Dist. Kolhapur. 6. Shri Dattatraya Tukaram Patil, Age 4o years, Occu – Agriculture, R/o Kenawade, Tal. Kagal, Dist. Kolhapur. 7. State of Maharashtra, Through Hon’ble Minister for Co­operation, Mantralaya, Mumbai. ..... Respondents ssp 2 LPA 148 of 2011 Mr.A.A.Kumbhakoni i/by Mr.Amit B. Borkar, for the appellant. Mr.Y.S.Jahagirdar, Senior Advocate i/by Mr.S.S.Kulkarni, for respondent Nos.2 to 6. Mr.R.M.Patne, AGP, for respondent Nos.1 and 7. CORAM: P.B.MAJMUDAR & A.A.SAYED, JJ. DATE: 28 th JUNE, 2011 ORAL JUDGMENT ( PER P.B.MAJMUDAR, J. ) : 1. This appeal is directed against the judgment and order passed by the learned Single Judge in Writ Petition No.1133 of 2011, by which the learned Single Judge allowed the writ petition filed by respondent Nos.2 to 6 herein and set aside the order of remand passed by the respondent No.7. 2. Respondent Nos.2 to 6 are the members of the appellant (for the sake of brevity, hereinafter referred to as “Karkhana”). The said Kharkhana is a specified Co­operative society engaged in the business of crushing sugarcane and manufacturing of sugar. Respondent No.1, Regional Joint Director (Sugar), is an authority who exercises, control supervision and functioning of the said Kharkhana. Respondent No.7 is the appellate authority under Section 152(a) of the Maharashtra Co­ operative Societies Act, 1960 [ for short “the Act”]. 3. Respondent Nos.2 to 6 preferred an application to the appellant Kharkhana on 07­07­2010 for supplying the list of its members. ssp 3 LPA 148 of 2011 By another application dated 26­07­2010, the said respondents also applied for certified copy of Agenda and Minutes of Meetings of Board of Directors held during period between 01­04­2008 to 30­06­2010. Since the aforesaid documents were not supplied by the Kharkhana, respondent No.1 informed the Managing Director of the Kharkhana in connection with the respondent’s grievance and it was directed that list of members of Kharkhana should be made available after receiving necessary copying charges. It is the case of present respondent Nos.2 to 6 that in spite of various reminders, the said documents were not made available to them. Respondent No.1 thereafter, informed the Kharkhana by a letter dated 24­09­2010, asking them to supply list of its members. It is also the case of respondent Nos.2 to 6 that in spite of deposit of requisite charges, the said documents were not supplied to them. Similarly, Minutes of Meetings of Board of Directors were also not made available to the concerned respondents, as according to the appellant Kharkhana, the said respondents are not entitled to have copy of the said Minutes of Meetings of Board of Directors, especially when it is not pertaining to the transaction of the said respondents and therefore, copies of Minutes of the Meetings is not required to be given to the respondent Nos.2 to 6. Respondent No.1 thereafter, on 10­11­2010 passed an order under Section 79 of the said Act, thereby directing the Kharkhana to supply list of its ssp 4 LPA 148 of 2011 members, copies of Agenda and Minutes of Meetings of Board of Directors held between 01­04­2008 to 30­06­2010. The said order was challenged by the present appellant by filing an appeal before respondent No.7. Respondent No.7 allowed the said appeal and remanded the matter to respondent No.1 on the ground that the order was passed without giving opportunity of hearing to the Society. The said remand order was challenged by respondent Nos.2 to 6 herein, before the learned Single Judge by way of Writ Petition No.1133 of 2011. The learned Single Judge came to the conclusion that looking to the scheme of Section 79 of the Act, no hearing is contemplated under sub­Section (2) of the Act. However, an opportunity of hearing is contemplated under sub­Section (3) to the officer of the society, but no hearing is contemplated so far as Society is concerned. The learned Single Judge came to the conclusion that a member is entitled to have copy of any of the documents/Registers within one month from the date of payment of such cost and as per Section 32 of the Act, a member cannot be denied of such right. The learned Single Judge also held that a member is also entitled to have Minutes of Committee Meetings and it should not be restricted only in connection with transaction in respect of such a member. According to the learned Single Judge, any transaction discussed in such meetings of the Committee, should be made available to the person at his request or ssp 5 LPA 148 of 2011 demand. The learned Single Jude accordingly found that since no hearing is contemplated under Section 79 of the Act, the State Government was wrong in remanding the matter to the original authority i.e. respondent No.1. The learned Single Judge allowed the writ petition filed by respondent Nos.2 to 6 herein, which has given rise to the present appeal at the instance of the appellant Kharkhana. 4. Learned counsel for the appellant submitted that the learned Single Judge has gravely erred in holding that no hearing is contemplated to the Society before taking any action under Section 79 of the Act. Learned counsel for the appellant submitted that there is no prohibition in Section 79 regarding giving opportunity of being heard to the concerned society. It is submitted that in any case, even if learned Single Judge found that hearing under Section 79 is not contemplated, yet the learned Single Judge should have remanded the matter back to the appellate authority for deciding the other issues raised by the appellant in appeal. But the learned Single Judge decided the entire matter and on merits, it is found that the order of respondent No.1, which was subject matter of appeal before respondent No.7, was correct. 5. Mr.Jahagirdar, learned Senior Advocate appearing for respondent Nos.2 to 6, in his turn, submitted that looking to the scheme of the Act, no hearing is contemplated as per provisions contained in Section ssp 6 LPA 148 of 2011 79 of the Act. It is submitted that in such a case, hearing the Society would nothing but, a mere formality, as respondent Nos.2 to 6, being the members, are entitled to have list of members as well as relevant documents from the Society and Society cannot deny giving such documents to its members. It is submitted by the Senior learned counsel for the respondent Nos.2 to 6 that there is nothing in Section 79, which contemplates hearing before taking any action and in a given case, if the Court so thinks, may direct the authority to give hearing to the party. It is submitted that affording hearing to the Society in the instant case, would be a mere futile exercise. It is submitted that the order in question is passed under Section 79(2). It is submitted that if the order is passed under Section 79(2) (a) of the Act, hearing is not contemplated as time limit is already prescribed under Section 32 i.e. 30 days for furnishing documents. Learned Senior counsel further submitted that when no time limit is provided in the statute for taking such action, then only hearing is required to be given and the case would fall under under Section 79(2) (b) of the Act. It is contended that hearing is required to be given to the concerned Officer and not to the Society, as has been contemplated under Section 79(3) of the Act. It is also submitted that in the instant case, so far as furnishing of list of members is concerned, a notice was already issued by respondent No.1 and therefore, it cannot be said that principles ssp 7 LPA 148 of 2011 of natural justice is not complied with. 6. Learned AGP appearing for respondent Nos.1 and 7 supported the order passed by the respondent No.7 in Appeal. 7. We have heard the learned counsel appearing in the matter at length and have gone through the order passed by the learned Single Judge and the documents forming part of the appeal. In order to examine the controversy, it would be apposite to reproduce relevant provisions of the Maharashtra Co­operative Societies Act. Section 32 and 79 of the Act, read as under : ­ “32. Rights of members to see books, etc. (1) Every member of a society shall be entitled to inspect, free of cost, a the society’s office during hours, or any time fixed for the purpose by the society, a copy of the Act, the Rules and by­ laws, the last audited annual balance sheet, the profit and loss Account, a list of members of the committee a register of members, the minutes of general meeting, minutes of committee meetings and those portions of the books of records in which his transactions with the society have been recorded. (2) A society shall furnish to a member, on request in writing and on payment of such fees as may be prescribed therefor, a copy of the documents mentioned in the foregoing sub­ section within one month from the date of payment of such fees.” “79. Registrar’s power to enforce performance of obligations ­ (1) The Registrar may direct any society or class of societies, to keep proper books of accounts with respect to all sums of money received and expended by the society, and the matters in respect of which the receipt and expenditure take place, all sales and purchases of goods by ssp 8 LPA 148 of 2011 the society, and the assets and liabilities of the society, and to furnish such statements and returns and to produce such records as he may require from time to time; and the officer or officers of the society shall be bound to comply with his order within the period specified therein. (2) Where any society is required to take any action under this Act, the Rules or the bye­laws, or to comply with an order made under the foregoing sub­section, and such actions is not taken­ (a) within the time provided in this Act, the Rules or the Bye­laws, or the order as the case may be, or (b) where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing, the Registrar may himself, or through a person authorised by him, take such action, at the expense of the society; and such expense shall be recoverable from the society as if it were an arrear of land revenue. (3) Where the Registrar takes action under sub­section (2), the Registrar may call upon the officer of officers of the society whom he considers to be responsible for not complying with the provisions of this Act, the Rules or the Bye­laws, or the order made under sub­section (1) and after giving such officer of officers an opportunity of being heard, may require him or them to pay to the society the expenses paid or payable by it to the State Government as a result of their failure to take action and to pay to the assets of the society such sum not exceeding twenty­five rupees as the Registrar may think fit for each day until the Registrar’s direction are carried out.” 8. As per the provisions of Section 32(1) of the Act, a member of the society is entitled to inspect, free of cost, a copy of the Act, the rules and the by­laws, audited annual balance sheet, the profit and loss account, a list of members of the committee, a register of members, the minutes of general meeting, minutes of committee meetings, as ssp 9 LPA 148 of 2011 contemplated under the said Section. A society is required to furnish to a member, on his request in writing and on payment of such fees as may be prescribed, a copy of any documents mentioned in the said Section, within one month from the date of payment of such fees, as is contemplated in sub­Section (2) of Section 32 of the Act. 9. In the instant case, respondent No.2 to 6 demanded list of members as well as resolutions passed by the Managing Committee from time to time during the relevant period. During the course of hearing, a list of members of the Society is already provided to the learned Senior counsel appearing for respondent Nos.2 to 6. The same is also accepted by the Advocate on record, subject to right of verification of the said list. So far as the other document i.e. resolutions passed by the Managing Committee is concerned, it is argued by the learned counsel for the appellant that since the concerned respondents are not entitled to get the same as it did not pertain to any transaction in connection with such a member. The consequence of non­compliance i.e. not furnishing the documents as provided under Section 32 of the Act, is provided under Section 79 of the Act. 10. The question which requires consideration is as to whether while passing any order under Section 79 of the Act, hearing is required to be given to the concerned Society, against whom such orders is to be ssp 10 LPA 148 of 2011 passed. In view of the provisions of Section 79, the Registrar is empowered to give necessary direction to any Society or class of societies to keep proper books of accounts in connection with money received and expenditure incurred. Sub­section (2) is in connection with failure on the part of the Society to comply with the provisions of the Act or rules or by­ laws. The Registrar in such eventuality, is entitled to take such action at the expense of the Society and such expense shall be recoverable from the society as if it were arrears of land revenue. Sub­Section (3) no doubt provides clear provision of observing principles of natural justice so far as officer of the society is concerned, who is responsible for not complying with the provisions of the Act. 11. Learned counsel for the appellant, in order to substantiate his say that before taking any action under Section 79(2) of the Act, the concerned society is required to be heard, has placed reliance on a decision of the Supreme Court in the case of Management of M/s.M.S.Nally Bharat Engineering Co. Ltd. V/s. State of Bihar1 wherein the Supreme Court observed in para 17 and 24 as under : ­ 17. In Swadeshi Cotton Mills V/s. Union of India2 Sarkaria, J., speaking for himself and Desai, J., said that irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi­judicial, a duty to act fairly, that is, in consonance with the fundamental 1 (1990) 2 SCC 48 2 (1981) 1 SCC 664 : (1981) 2 SCR 533 ssp 11 LPA 148 of 2011 principles of substantive justice is generally implied. The presumption is that in a democratic polity wedded to the rule of law, the State or the legislature does not intend that in the exercise of their statutory powers its functionaries should act unfairly or unjustly. In the same case, Chinnappa Reddy, J., added (at p 212) that the principles of natural justice are now considered so fundamental as to be ‘implicit in the concept of ordered liberty’. They are, therefore, implicit in every decision making function, call it judicial, quasi­judicial or administrative. The learned Judge went on to state that where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The implication of natural justice being presumptive, it should be followed by the authorities unless it is excluded by express words of statute or by necessary implication. 24. In the present case, the State has withdrawn the pending reference from the Labour Court, Dhanbad and transferred it to another Labour Court at the distant District of Patna, on the representation of the workman, without getting it verified from the management. The State in fairness ought to have got it verified by giving an opportunity to the management which is a party to the pending reference. Denial of that opportunity is a fatal flaw to the decision of the government. 12. Learned counsel for the appellant also placed reliance on a decision of the Supreme Court in the case of Indian National Congress (I) V/s. Institute of Social Welfare and Ors.,1 wherein it was held as follows : 24. The legal principles laying down when an act of a statutory authority would be a quasi­judicial act, which emerge from the aforestated decisions are these : where (a) a statutory authority empowered under a statute to do any act (b) which would prejudically affect the subject (c) although there is no lis or two contending 1 (2002) 5 SCC 685 ssp 12 LPA 148 of 2011 parties and the contest is between the authority and the subject and (d) the statutory authority is required to act judicially under the statute, the decision of the said authority is quasi­judicial. 25. Applying the aforesaid principle, we are of the view that the presence of a lis or contest between the contending parties before a statutory authority, in the absence of any other attributes of a quasi­judicial authority is sufficient to hold that such a statutory authority is quasi­judicial. However, in the absence of a lis before a statutory authority, the authority would be quasi­judicial authority if it is required to act judicially. 27. What distinguishes an administrative act from a quasi­ judicial act is, in the case of quasi­judicial functions under the relevant law the statutory authority is required to act judicially. In other words, where law requires that an authority before arriving at a decision must make an enquiry, such a requirement of law makes the authority a quasi­judicial authority. 13. Reliance has also been placed by the learned counsel for the appellant on a ruling of the Apex Court in the case of Prakash Ratan Sinha V/s. State of Bihar & Ors.,1 in which case, the Supreme Court has held :­ 10. In Canara Bank V. Debasis Das2, this Court has held in para 19 (SCC p 572) that “19............ Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. This Court has elaborated the expression “civil consequence” by observing that (Debasis Das case) “encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and non­ pecuniary damages. This Court has further stated that in its wise umbrella 1 (2009) 14 SCC 690 2 (2003) 4 SCC 557 : 2003 SCC (L&S) 507 ssp 13 LPA 148 of 2011 comes everything that affects a citizen in his civil life. 13. The law in this regard has been settled by several decisions of this Court. The principle that emerge from the decisions of this Court is that if there is a power to decide and decide detrimentally to the prejudice of a person, duty to act judicially is implicit in exercise of such a power and that the rule of natural justice operates in areas not covered by any law validly made. 14. Learned Senior counsel for the respondent Nos.2 to 6 on the other hand, placed reliance on a ruling of the Apex Court in the case of Ashok Kumar Sonkar V/s. Union of India and Ors.,1 wherein it was held in para 26 as follows : ­ 26. This brings us to the question as to whether the principles of natural justice were required to be complied with. There cannot be any doubt whatsoever that the audi alteram partem is one of the basic pillars of natural justice which means no one should be condemned unheard. However, whenever possible, the principle of natural justice should be followed. Ordinarily in a case of this nature the same should be complied with. Visitor may in a given situation, issue notice to the employee who would be effected by the ultimate order that may be passed. He may not be given an oral hearing, but may be allowed to make a representation in writing. 15. Relying on the said observations, it is argued by the learned Senior counsel for the respondent Nos.2 to 6 that in a given case, it is not necessary to follow principles of natural justice or to hear a person if it may be a mere formality. As per the scheme of the Act, a member is 1 (2007) 4 SCC 54 ssp 14 LPA 148 of 2011 entitled to have a copy of requisite documents on payment of fees as per Section 32 of the Act. The consequence of not complying with the said provision, is provided under Section 79 of the Act. However, in our view, in a case where society is a defaulting society who is not complying with any of the provisions of the Act and has not taken any action as per the requirements of the Act or the rules or by­laws, as the case may be, the Registrar is entitled to take appropriate action as per Section 79 of the Act. Considering the provisions of Section 79 of the Act, it is not possible for us to accept the submission of the learned counsel for the respondents that hearing is contemplated only in a case which may fall under Section 79(2) (b) and not under Section 79(2)(a) on the ground that when time limit is given under Section 32 of the Act for taking action, then the Registrar can straight way take action if the society fails to take action in this behalf. But when no time limit is given for taking such action, then only hearing can be given and the case would under Section 79(2)(b) of the Act. The Section clearly provides that the Registrar or through a person authorized by him, can take such action as deemed fit, at the expense of the society meaning thereby that in a given case, the Registrar can take action, which action is required to be taken by the Society. In the present case, the expense can be recovered from the society as an arrears of land revenue as contemplated by Section 79 of the Act. When the Registrar is empowered ssp 15 LPA 148 of 2011 to take action under Section 79, the Registrar is taking the same action which the Society is required to take under Section 32 of the Act. However, in a given case, there may be justification on the part of the society for not providing documents sought for by the person, like in a given case, if there is a dispute whether such person demanding the documents is a member or not or if the documents are destroyed by any natural calamity. In a given case, balance sheet for some reasons might not have been prepared. In such an eventuality, even if society fails to take any action under Section 32 of the Act in connection with demand of certain documents and if the Registrar is taking such action, in our view, the minimum requirement of principles of natural justice regarding giving hearing to the society is required to be given and it cannot be said