1 Anando IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.5463 OF 1996 1. Pune District Supervision Co-operative ) Society having its office at ) 9, New Shukrawar Peth, ) Rameshwar Chowk, ) Pune 411 002. ) Through its Chief Executive Officer ) Shri D. T. Shirole ) ..Petitioners ) 2. Daund Taluka Supervision Co-operative ) Society Limited ) having its office at ) Daund, District Pune. ) Through its Member Secretary ) and Executive Officer ) Shri N. D. Kapre ) Versus 1. The State of Maharashtra ) through its Secretary to the ) Ministry of Co-operative and Textiles, ) Mantralaya, Mumbai. ) ) 2. The Registrar of Co-operative ) Societies and Commissioner of ) ..Respondents Co-operation, Maharashtra State, ) Pune. ) ) 3. The District Deputy Registrar ) Co-operative Societies, ) Pune. ) 2 WITH WRIT PETITION NO.119 OF 2006 1. Mangalwedha Taluka Co-op. Supervisory) Society Limited, Mangalwedha, ) District Solapur. ) ) 2. Karmala Taluka Co-op. Supervisory ) Society Limited, Karmala, ) Taluka Karmala ) District Solapur. ) ) 3. Malshiras Taluka Co-op. Supervisory ) Society Limited, Malshiras, ) District Solapur. ) ) ..Petitioners 4. Akkalkot Taluka Co-op. Supervisory ) Society Limited, ) C/o. Solapur D.C.Bank, ) New Building, Station Road, Akkalkot, ) District Solapur. ) ) 5. Barshi Taluka Co-op. Supervisory ) Society Limited, Taluka Barshi, ) District Solapur. ) ) 6. North Solapur Taluka Co-op.Supervisory) Society Limited, 46/1, ) Govind Sadan, Murarji Peth, ) Solapur. ) Versus 1. The State of Maharashtra ) Through its Principal Secretary ) to the Ministry of Co-operation, ) ..Respondents Marketing and Textiles, Mantralaya, ) Mumbai. ) 3 2. The Registrar of Co-op. Societies ) & Commissioner of Co-operation, ) Maharashtra State, ) Pune. ) ) 3. The District Deputy Registrar, ) Co-operative Societies, ) Solapur. ) ) 4. The Divisional Joint Registrar, ) Co-operative Societies, Pune Division, ) Pune. ) having office at Sakhar Sankul, ) Shivajinagar, ) Pune. ) WITH WRIT PETITION NO.124 OF 2006 Solapur District Supervision Co-op. ) Society Ltd., a Co-operative Society duly) registered under the MCS Act, 1960 ) bearing Registration No. SHP/GEN/33 ) date 24.03.1971 ) ..Petitioner having its office at Solapur DCC Bank, ) Extension Building, 46, Navi Peth, ) Yogeshwari Complex, ) Solapur – 413 007. ) Versus 1. The State of Maharashtra through ) its Principal Secretary to the Ministry of ) Co-operation, Marketing and Textiles, ) Mantralaya, ) Mumbai. ) ) ..Respondents 2. The Registrar of Co-operative Societies ) & Commissioner of Co-operation, ) Maharashtra State, ) Pune. ) 4 3. The District Deputy Registrar, ) Co-operative Societies, ) Solapur. ) ) 4. The Divisional Joint Registrar, ) Co-operative Societies, ) Pune Division, ) Pune. ) having Office at Sakhar Sankul, ) Shivajinagar, ) Pune. ) WITH WRIT PETITION NO.2268 OF 2006 Kolhapur Zilla Dekhrekh Sahkari ) Sanstha Maryadit, ) Kolhapur. ) ..Petitioner having office at Shahpuri, 4th lane, ) Kolhapur. ) Versus 1. The State of Maharashtra ) Through the Secretary, ) Co-operation Department, ) Mantralaya, ) Bombay. ) ) 2. Commissioner for Co-operation ) and Registrar, Co-operative Societies, ) ..Respondents Maharashtra State, ) Pune. ) ) 3. Divisional Joint Registrar, ) Co-operative Societies, Pune Division, ) Pune. ) ) 4. The District Deputy Registrar, ) Co-operative Societies, ) Kolhapur. ) 5 5. Kolhapur District Central ) Co-operative Bank Limited, Shahupuri, ) Kolhapur. ) WITH WRIT PETITION NO.3145 OF 2006 Thane District Supervision ) Co-operative Society Limited, ) a Co-operative Society duly ) registered under the MCS Act, 1960 ) bearing Registration No. ) BOM/GNL/TNA/34 date 06.04.1971 ) having its office ) ..Petitioner at C/o. Thane DCC Bank, ) Kanchanganga Building, 3rd floor, ) Shivaji Peth, Thane (West), ) District Thane. ) Versus 1. The State of Maharashtra through ) its Principal Secretary to the Ministry of ) Co-operation, Marketing and Textiles, ) Mantralaya, ) Mumbai. ) ) 2. Commissioner for Co-operation and ) The Registrar of Co-operative Societies, ) ..Respondents Maharashtra State, ) Pune. ) ) 3. The District Deputy Registrar, ) Co-operative Societies, ) Thane. ) ) 4. The Divisional Joint Registrar, ) Co-operative Societies, Konkan Division,) Mumbai. ) Having Office at Konkan Bhavan, ) 3rd floor, ) 6 Navi Mumbai – 400 614. ) WITH WRIT PETITION NO.4158 OF 2006 Ahmednagar Zilla Dekhrekh Sahakari ) Sanstha Limited, ) Chaurana (Bk) Branch, ) behind Market Yard, ) Ahmednagar, ) ..Petitioner Through its Chief Executive Officer, ) Sarjerao S/o. Laxman Dahiphale, ) Age : 58 years, Occu : service, ) R/o. Ahmednagar, ) District Ahmednagar. ) Versus 1. The State of Maharashtra ) Through the Secretary, ) Co-operation Department, Mantralaya, ) Bombay. ) ) 2. The Commissioner for Co-operation, ) Maharashtra State, ) Pune. ) ) ..Respondents 3. The Chief Executive Officer and ) Divisional Joint Registrar, ) Co-operative Societies, Pune Division, ) Pune. ) ) 4. The District Deputy Registrar, ) Co-operative Societies, ) Ahmednagar. ) ) 5. Ahmednagar District Central ) Co-operative Bank Limited, ) Ahmednagar. ) Through its Managing Director ) 7 WITH WRIT PETITION NO.7490 OF 2006 1. Sindhudurg Zilla Dekhrekh Sahakari ) Sanstha Maryadit, ) Through its Director ) Shri Prakash Ramchandra Parab ) At & Post Oras, Sindhudurg Nagari, ) District Sindhudurg. ) ) ..Petitioners 2. Kudal Taluka Dekhrekh Sahakari ) Sangh Maryadit, ) Through its Director ) Shri Shivram Bhau Jadhav ) At & Post Kudal ) District Sindhudurg. ) Versus 1. The State of Maharashtra ) Through its Secretary to the ) Ministry of Co-operation & ) Textiles, Mantralaya, ) Mumbai. ) ) 2. The Commissioner for Co-operation ) and Registrar of Co-operative Societies, ) ..Respondents Maharashtra State, ) Pune. ) ) 3. The Divisional Joint Registrar, ) Co-operative Societies, Konkan Bhavan, ) Belapur (Navi Mumbai). ) 4. The District Deputy Registrar, ) Co-operative Societies, ) District Sindhudurg. ) Having office At & post Oras, ) Sindhudurg Nagari, ) District Sindhudurg. ) ) 8 5. The Sindhudurg District Central ) Co-operative Bank Limited, ) Oras, Sindhudurg Nagari, ) District Sindhudurg. ) Mr. G. S. Godbole with Ms. Manjiri Parasnis, Advocate, for the Petitioners in Writ Petition Nos.124/2006, 5463/1996, 119/2006, 3145/2006 and 4158/2006 Mr. M. L. Patil, Advocate, for the Petitioners in Writ Petition No. 2268/2006 and Dr. D. R. Talankar, Advocate, for the Petitioners in Writ Petition No.7490/2006 Mr. C. R. Sonawane, Assistant Government Pleader, for the Respondent Nos.1 to 4 – State CORAM : A.M.KHANWILKAR & R.M.SAVANT, JJ. JUDGMENT RESERVED ON : 17TH MARCH, 2010 JUDGMENT PRONOUNCED ON : 22ND APRIL, 2010 JUDGMENT ( PER R.M.SAVANT, J.) . The above group of Petitions raise a common issue and involve identical facts and therefore, are heard and disposed of together. The challenge in the above Writ Petitions, save and except Writ Petition No.5463 of 1996 and W.P.No.7490 of 2006 is to the Circular dated 28th October, 2005 (Ex.O) issued by Respondent No.2, the Letter/Order dated 19th October, 2005 (Ex.Q) issued by the Respondent No.1 to the Respondent No.2 and the Letter/Order dated 17th December, 2005 (Ex.P) issued by the Respondent No.4. In W. P .No.7490 9 of 2006 though the challenge is to the letter dtd. 28th October, 2005 the other letters are dtd. 29th November, 2005 and 9th January, 2006 In Writ Petition No.5463 of 1996, the challenge is to the Letter/Order dated 25th September, 1996 issued by the Respondent No.3. The Letter/Order dated 19th August, 1996 issued by the Respondent No.1. The said Letters/Orders are the predecessors to the Letters/Orders impugned in Writ Petition No.124 of 2006 and the other companion matters. 2. The Petitioners in Writ Petition Nos.124 of 2006, 2268 of 1996, 3145 of 2006, 4158 of 2006, 5436 of 1996 and 7490 of 2006 are the District Supervision Co-operative Societies namely the Solapur District Supervision Co-operative Society, Kolhapur Zilla Dekhrekh Sahkari Sanstha Maryadit, Thane District Supervision Co-operative Society Limited, Ahmednagar Zilla Dekhrekh Sahakari Sanstha Limited, Sindhudurg Zilla Dekhrekh Sahakari Sanstha Maryadit and Pune District Supervision Co-operative Society and another. The Petitioner in Writ Petition No.119 of 2006 is a Taluka Supervision Society namely Mangalwedha Taluka Co-operative Supervision Society Limited, Solapur and others. As mentioned here in above, all the aforesaid District Supervision Co- 10 operative Societies and the Taluka Supervision Co-operative Society have challenged the Letters/Orders mentioned here in above. For the sake of convenience the facts in Writ Petition No.124 of 2006 would be referred to, as the same has been treated as lead matter. 3. The genesis of the issue which arises in the above Petitions is in the introduction of Section 69-A in the Co- operative Societies Act, 1960 (Hereinafter referred to as “Said Act”) which was introduced by way of amendment in the said Act in the year 1975 with a view to provide for proper supervision of the working of the Primary Agricultural Credit Co-operative Societies and Multipurpose Co-operative Societies. It appears that the State felt the need to establish the cadre of Societies to be known as the Co-operative State Supervision Cadre. The basic intention of the legislature in introducing Section 69-A seem to be streamlining the manner of functioning of the various Societies and facilitate the speedy recovery of loan etc. with a view to maintain proper growth and health of the Co-operative movement. It is in the said background that the said Section 69-A was introduced in the 11 statute book in the year 1975. The salient features of the said Section 69-A are as under :- (i) Co-operative State Cadre constitution of Secretaries of Primary Agricultural Credit Co- operative Society, Multipurpose Co-operative Society etc. (ii) Immediate supervisory control of the cadre given to the Taluka Supervision Society consisting of the Societies Act to which the cadre persons are deputed. (iii) Fund known as Co-operative State cadre employment fund established for the meeting expenses of the cadre. (iv) Societies deriving the benefit from the cadre to contribute to the fund. Such Societies to be notified by the State Government. (v) The State Government granted powers to make rules relating to the fund. 4. The State Government in exercise of the powers conferred under Section 69-A(4) of the said Act issued a Notification bearing No.CDR10179/3008 – (21)-2C dated 3rd March, 1979 directing all the District Central Co-operative Banks except the Bombay DCC and the Ahmednagar DCC to contribute to the Supervision Funds. The State Government also felt the need to appoint a Committee of experts to submit a report to the State Government in respect of the problems faced 12 by and the functioning of the Supervision Societies and hence, by Government Resolution dated 11th March,1989 the Respondent No.1 appointed a Committee under the Chairmanship of Padmashree Shamrao Kadam for making various recommendations to the State Government in respect of the cadre of Secretaries (Gat Sachiv). The said Committee carried out exhaustive work and submitted its report dated 5th July, 1989 to the State Government. The said report inter alia disclosed various aspects including the service conditions of Secretaries, the control to be exercised on the Primary Agricultural Credit Co-operative Society. Since at the time District Supervision Society was in existence, the Committee in its report noted that it was intended to have full time Executive Officer preferably an officer from the District Central Co- operative Bank to look after the day to day business of the Supervision Society. It was further observed by the said Committee in Clause 5.10 of its report that there was no representation of the Co-operative Societies in which the Secretaries were deputed. It was further observed that since the District Deputy Registrar of the Co-operative Society in particular District was over burdened with various legal and 13 other works under the said Act, it was impossible for the said District Deputy Registrar to devote much attention to the work of the Supervision Society. It was, therefore, the recommendation of the said Committee headed by Shri Shamrao Kadam that a Committee of eight persons having proper representation of the DCC Bank should be the Managing Committee of such Society. The aforesaid recommendation is relevant from the point of view of the present Petitions. 5. It appears that the State Government i. e. Respondent No.1 herein considered the said report and after such consideration issued a Government Resolution dated 13th October, 1989 accepting various recommendations of the said Shamrao Kadam Committee in respect of the recommendations in respect of the District Level Supervision Society. It was decided that by the State Government vide Clause 4(a) to the Schedule of the said Resolution to accept the recommendations of the Committee. In the light of the said Government Resolution dated 13th October, 1989 the Model Bye laws for the District Co-operative Supervision Societies were prepared by the Registrar. The said Model Byelaws were thereafter 14 approved. The Petitioners above named, who are the District Supervision Societies adopted the Model Byelaws. Under the said Model Byelaws especially Bye-law Number 15, the constitution of the Managing Committee of the District Supervision Society having a total of ten members is conceptualized. The said Clause provides that the Assistant Registrar of Co-operative Societies or an Officer of the District Central Co-operative Bank to be appointed as Ex-officio officer/Chief Executive Officer either on deputation or with additional charge. Thus, it was left to the Managing Committee of the Societies like the Petitioners to choose as to whether an Officer of the rank of the Assistant Registrar of the Co-operative Department or an Officer of the District Central Co-operative Bank to be appointed as the Executive Officer or Secretary. 6. The purpose and intent of establishment of the Supervisory Co-operative Societies at the Taluka and District level is to have direct and effective control over the working of the various Primary Rural Credit Co-operative Societies. The intention is to see that the work of recovery of loans which are lent and disbursed by the various Societies to its members 15 should be done properly and efficiently, and also to ensure that the Societies make repayment of their loans which are taken from the District Central Co-operative Banks. As can be seen the approved Model Bye-laws give a choice to the District Co- operative Supervision Society to have either an Assistant Registrar or an Officer from the District Central Co-operative Bank as its Chief Executive Officer according to its choice. The Co-operative movement at the Taluka level depends upon finance from the District Co-operative Central Banks and since the loans are provided by the concerned District Central Co- operative Bank a proper control of the District Central Co- operative Bank over the recovery of loans was thought essential. With a view to give some sort of autonomy to the District Co-operative Supervision Societies, they were given a choice of either having an Officer from the District Central Co- operative Bank or an Officer of the Co-operative Department as Member Secretary-cum-Chief Executive Officer. Since the work of the Chief Executive Officer of the District Supervision Society involves the work of supervision over the work of the Block Secretary and recovery of the loan of the District Central Co- operative Bank, a person having expertise in financial matters 16 and recovery of loans in the Co-operative Sectors was required to be the Chief Executive Officer of the Taluka Co-operative Society. The approved Model Bye-laws, therefore, provide for autonomy to the Supervision Societies in the matter of the appointment of the Chief Executive Officer. It would be relevant to note that the District Central Co-operative Bank in each of the Districts in respect of which the Petitions have been filed make a major contribution to the Supervision Fund from which the affairs of the respective Petitioners – Societies are conducted. The contribution of the concerned District Central Co-operative Bank is increasing by the year and due to the said contribution made by the District Central Co-operative Bank, the Societies like the Petitioners above named are able to sustain themselves and function. It would be pertinent to note that the Apex Society of the Supervisory Co-operative Society is the Maharashtra Government Sanvargikaran Society Limited, Pune. The said Society, in its Annual General Meeting has decided that it would be in the interest of the Supervision Society to appoint employee of the District Central Co-operative Bank as Chief 17 Executive Officer by Resolution No.1A passed in the meeting dated 12th November, 1994, it was decided that the Commissioner of Co-operation, be reported to issue a specific direction to appoint a Bank Officer as Chief Executive Officer of the District Supervision Society. It would also be pertinent to note that Resolution was also passed in the meeting dated 11th October, 1994 of the Apex Society that in all the District Supervision Co-operative Societies, a Officer from the concerned DCC Bank should be appointed as Chief Executive Officer. A meeting was also held on 12th November, 1999 under the chairmanship of the then Hon'ble Minister for Co-operation of the State of Maharashtra in respect of the difficulties of the Block Secretary and it was clarified therein vide Resolution No. 3 that the Executive Officer of the District Supervision Society and Taluka Supervision Society should be appointed from the DCC Bank and that if necessary amendment be made to that effect in the Bye-laws. From the above conspectus of facts it can be seen that a conscious decision was taken at the Government level to appoint an Officer of the District Central Co-operative Bank as the Executive Officer of the District Supervision Society so as to ensure timely payment of the 18 Salary of the Block Secretaries and to ensure proper control over the working of the Co-operative Credit Societies and Primary Societies with a view to have proper loan recovery, it was also felt necessary that District Central Co-operative Bank should have control over working of the Credit Society. From the averments made in all the above Petitions, all the Petitioners above named which are District Supervision Societies had appointed an Officer from the concerned District Central Co-operative Bank as its Chief Executive Officer-cum- Member Secretary and it is their case that due to the experience and knowledge of the said Officer, there was substantial improvement in the working of the Petitioner – Societies. There was also an autonomy vested in them either to appoint an Officer from the Co-operative Department of the State Government i. e. Assistant Registrar or an Officer from the District Central Co-operative Bank as Executive Officer. This autonomy was available to them under the Bye laws which are duly approved by the State Government inasmuch as there are model Byelaws prepared by the Respondent No.2 herein. Therefore, there was no authority with the Respondents herein to direct the Petitioner – Societies to appoint an Officer from 19 the Co-operative Department as their Secretary/Executive Officer. As such the impugned directions have the effect of curtailing the rights, that the Petitioner – Societies have as regards their management. 7. It appears that the Respondent No.3 herein by Order dated 28th September, 1996 directed the Petitioners – Societies that in pursuance of the letter dated 19th August, 1996 issued by the Respondent No.1 herein i. e. the State Government, he was appointing himself as Secretary/Executive Officer of the Petitioner – Societies. As the said letter 20th September, 1996 indicates the same was issued by the Respondent No.3 in view of the letter dated 19th August, 1996 issued by the Respondent No.1. Aggrieved by the said Letter/Order issued by the Respondent No.1 dated 19th August, 1996 and the Letter/Order dated 20th September, 1996 issued by the Respondent No.3. The Petitioner in Writ Petition No.119 of 2006 had filed Writ Petition No.4905 of 1996 in this Court challenging the legality, validity and propriety of the said Letters/Orders. The said Writ Petition came to be admitted by this Court. An interim relief came to be granted thereby 20 staying the appointment of the Respondent No.2 – as the Chief Executive Officer of the Petitioner – Societies. Another Writ Petition No.4904 of 1996 came to be filed by one Mohol Taluka Sahakari Maryadit and another challenging the same Order dated 19th August, 1996 passed by the Respondent No.1. The said Writ Petition was also admitted. Interim reliefs were granted staying the said Letter/Order dated 19th August, 1996. 8. Whilst the said Writ Petitions were pending, a Circular came to be issued on 20th January, 2003 which was purportedly issued as a consequence of the decision taken in the meeting conveyed in the office of NABARD. The said decision was to the effect that in all the District Supervision Co- operative Societies, the officer of the concerned District Central Co-operative Bank should be appointed as the Chief Executive Officer. The said Circular, therefore, was placed on record by the Petitioner – Societies by way of an Affidavit-in-rejoinder in the said Writ Petition No.4905 of 1996. The said Writ Petitions being 4904 of 1996 and 4905 of 1996 were disposed of by this Court by accepting the Circular dated 23rd January, 2003 issued by the Commissioner for Co-operation and the Registrar of the 21 Co-operative Society, that the officer of the concerned District Central Co-operative Bank would function as Chief Executive Officer and Member Secretary of the concerned District and Taluka level Supervision Societies by Judgment and Order dated 27th February, 2003. It is the case of the Petitioners that the said Judgment and Order dated 27th February, 2003 has attained finality as the matter was not carried in Appeal to the Apex Court by the State Government. 9. Inspite of the said Circular dated 23rd January, 2003 issued by the Commissioner for Co-operation and Registrar of Co-operative Society on the basis of which Writ Petition Nos. 4904 of 1996 and 4905 of 1996 came to be disposed of by Order dated 27th February, 2003. The Chief Executive Officer of the Maharashtra State Cadres Co-operative Society Limited, who is Divisional Joint Registrar of the Co-operative Societies, Pune Region, Pune, informed the Petitioners that the Respondent No.2 herein has issued Order/Circular dated 28th October, 2005 directing that the District Deputy Registrar of Co-operative Societies in every District should be appointed as Member Secretary and Chief Executive Officer of the District 22 Supervisory Society and directing that the Deputy Registrar/Assistant Registrar of Co-operative Society in every Taluka should be appointed as Member Secretary and Executive Officer of the Taluka Supervisory Society. The said Circular dated 20th October, 2005, it appears has been issued by the Respondent No.2. On the basis of said Letter/Order dated 19th October, 2005 issued by the Respondent No.1, it further appears that on the basis of the Letter/Order dated 19th October, 2005, the Respondent No.4 herein has issued the Letter/Order dated 17th December, 2005 and by the said Order, the Respondent No.4 herein has directed that in furtherence of the Circular dated 28th October, 2005 issued by the Respondent No.2, he was appointing the Respondent No.3 herein as Member Secretary/Executive Officer of the Petitioner – Societies. As indicated above, the said Circular dated 20th October, 2005, the letter dated 8th November, 2005 and the Order dated 17th December, 2005 issued by the Respondent No. 4 are impugned in the above Petitions. As mentioned earlier in so far as Writ Petition of 1996 is concerned, the said Writ Petition raises the same challenge as raised in the year 1996 by Writ Petition Nos.4904 of 1996 and 4905 of 1996 challenging 23 the predecessor/Order/Circular issued by the Respondent No.1 which were impliedly withdrawn in view of the Circular dated 20th January, 2003 issued by the Commissioner for Co- operation and Registrar of the Societies and on the basis of which the said Writ Petitions being numbers 4904 of 1996 and 4905 of 1996 were disposed of. 10. We have heard Mr. G. S. Gobdole, the learned Counsel for the Petitioners in all the Writ Petitions except Writ Petition Nos.2268 of 2006 and 7490 of 2006, Mr. M. L. Patil, the learned Counsel appearing for the Petitioners in W. P. No. 2268/2006, Dr. D. R. Talankar in W. P. No.7490/2006 and Mr. C. R. Sonawane, the learned Assistant Government