1 wp-2079-10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi WRIT PETITION NO. 2079 OF 2010. K.S. Chadha & Ors. ..Petitioners. v/s. Divisional Joint Registrar Co-operative Societies & Ors. ..Respondents. .... Mr. R.S. Ghadge, i/b. Mr. A.S. Desai, for Petitioners. Mr. Milind More, AGP, Respondent Nos. 1 to 3, 5 & 6. Ms. Veena Sippy, for Respondent No.9, present. .... CORAM : S.J. KATHAWALLA, J. DATE : 18TH OCTOBER 2010. P.C. Admit. 2. Mr. Milind More, learned AGP waives service on behalf of Respondent Nos.1 to 3, 5 and 6. Ms. Veena Sippy, Respondent No.9 who appears in person waives service. 3. By consent, Writ Petition is made returnable forthwith and taken up for final hearing. 4. The Petitioners are the members of the Managing Committee of Respondent No.4 Society, the tenure of which Committee came to an end on 2nd May 2010. The petitioners have 2 wp-2079-10 by this Writ petition impugned the orders dated 13th September 2010 and 30th September 2010 passed by Respondent No.2 i.e. the Deputy Registrar, C.S.D. Ward, Mumbai, whereby Respondent No.2 without assigning any reasons has modified his own earlier orders. 5. The facts in the matter are briefly set out hereunder : 6. The Managing Committee of the Respondent No.4 Society comprising of the Petitioners had admittedly taken charge on 2nd May 2007. The tenure of the Committee was for three years i.e. upto 2nd May 2010. 7. Under Section 73-H of the Maharashtra Co-operative Societies Act, 1960 (the said Act), it is the duty of every Society to arrange for elections of its members before the expiry of its term. Where there is willful failure on the part of the Committee to hold the elections to the Committee before such expiration, the Committee shall cease to function on the expiration of its term and the members thereof shall cease to hold office and the Registrar may himself take over the management of the Society or appoint an Administrator who shall hold elections within a period of six months from the date of his appointment and the Committee shall be constituted before the expiration of that period of six months. Section 77A of the said Act also empowers the Registrar, in the event 3 wp-2079-10 of defaults as set out therein, committed by the Committee to suo- motu or on the application of any Officer of the Society inter-alia appoint a Committee consisting of not more than three members of the Society, or one or more Administrators, who need not be members of the Society to manage the affairs of the Society till the new Committee enters office. 8. In the instant case, though the tenure of the Managing Committee of the Resondent No.4 Society came to an end on 2nd May 2010, the Petitioners continued to function as the Managing Committee and did not take any steps to hold fresh elections of its members before the expiry of its term. In view of the aforestated failure on the part of the Petitioners to arrange holding the elections of its members before the expiry of its term, Respondent No.2, i.e. the Deputy Registrar, C.S.D. Ward, Mumbai, pursuant to the receipt of complaints dated 2nd May 2010 and 24th May 2010 from Ms. Veena Sippy, daughter of one of the members of the Society and Respondent No.9 herein, by his order dated 25th May 2010 under sections 73-H and 77A of the said Act appointed Mr. P.S. Mhatre as the Administrator of the Society for a period of six months or upto formation of the new Committee, whichever is earlier. 4 wp-2079-10 9. The Petitioners i.e. the Members of the Managing Committee thereafter, filed an Appeal before the Divisional Joint Registrar, C.S. Mumbai Division and also applied for interim relief. The Appellate Authority by its order dated 23rd June 2010 admitted the Appeal and rejected the stay application. Though the Petitioners filed a Revision Application before the Hon’ble Minister for Co- operation and Textiles, Maharashtra State, Mantralaya, Mumbai, they did not pursue the said Revision Application and proceeded to hand over the charge of the Society to Mr. P.S. Mhatre, Administrator, appointed by the order of Respondent No.2 dated 25th May 2010. 10. By his letter dated 24th August 2008, the Administrator (Mr. Mhatre) requested the Respondent No.2 to appoint a Returning Officer for the purpose of holding elections consequent to his order dated 25th May 2010. Upon receipt of the said letter, the Deputy Registrar instead of appointing the Returning Officer passed an order dated 13th September 2010 whereby Mr. Mhatre who was appointed as the Sole Administrator of Respondent No.4 Society was replaced by a Board of Administrators, consisting of Mr. P.S. Mhatre, Mr. Anant Khot and Ms. Veena Sippy (Respondent No.9). The reason given for this change was that it would be difficult for Mr. Mhatre 5 wp-2079-10 alone to conduct the elections since the Society comprised of 300 members. Again on 30th September 2010, Respondent No.2 without assigning any reason, removed Mr. P.S. Mhatre altogether from the Board of Administrators and appointed Mr. D.A. Khandekar in place of Mr. Mhatre. 11. The learned Advocate appearing for the Petitioners has submitted that the Respondent No.2 by his order dated 25th May 2010 initially appointed Mr. Mhatre as the sole Administrator of the Society for conducting elections of the Society. However, suddenly by his order dated 13th September 2010, Respondent No.2 on a completely untenable ground, viz. that it will be difficult for Mr. Mhatre to conduct the elections of the Managing Committee of the society since the society comprises of 300 members appointed a Board of Administrators comprising of Mr. Mhatre, Mr. Khot and Ms. Sippy. Thereafter, Respondent No.2 without assigning any reason, by his order dated 30th September 2010 proceeded to remove Mr. Mhatre altogether from the Board of Administrators. It is submitted on behalf of the Petitioners that Respondent No.2 has been acting entirely at the instance of Ms. Veena Sippy, Respondent No.9, without hearing any of the Members of the society and is changing 6 wp-2079-10 the constitution of the Board of Administrators without inviting any objections and/or without assigning any reasons. 12. On the other hand, Ms. Veena Sippy has made serious allegations against the Petitioners. She has submitted that she has no trust or faith in the Petitioners. She has also submitted that this Court should not order elections of the Managing Committee of the society since the elections would not be in the interest of the society. The reason given by her for not holding elections is that a majority of the members of the Respondent No.4 Society are ‘duffers’. She has further submitted that the Administrator has to first bring the society out of the doldrums and set right the defaults committed by the erring Committee members of the society. 13. The learned AGP appearing for Respondent Nos.1 to 3, 5 and 6 has submitted that since there is a complete lack of trust between the members inter-se and further since holding of elections to the Managing Committee of the society is the need of the hour, this Court may appoint an Officer of this Court as an Election Officer to hold/conduct the elections of the Managing Committee of the society. It is submitted that if Ms. Veena Sippy has any complaints qua the earlier Managing Committee members, she may be allowed 7 wp-2079-10 to pursue her grievance before the appropriate forum under the provisions of the Co-operative Housing Societies Act, 1960. 14. I have considered the submissions advanced on behalf of the Petitioners, Ms. Veena Sippy and the learned AGP appearing for Respondent Nos. 1 to 3, 5 and 6. The order dated 25th May 2010 shows that the Administrator is appointed under sections 73-H and 77A of the said Act only because the earlier Managing Committee failed to hold fresh elections of the Managing Committee prior to their term of three years coming to an end. The purpose for appointment of an Administrator or the Board of Administrators is therefore clear viz. to hold the elections of the Managing Committee and thereafter, hand over the charge of the society to the newly appointed Managing Committee. The said purpose is not changed though the sole Arbitrator was replaced by a Board of Administrators. The contention of Ms. Veena Sippy that the elections of the Managing Committee of the society should not be held because the members of the said society are ‘duffers’, is untenable and cannot be accepted. The submission of Ms. Sippy that the Administrator has to first bring the society out of the doldrums by rectifying the defaults committed by their earlier Managing Committee, is also untenable, since the order appointing the 8 wp-2079-10 Administrator / Board of Administrators is passed under sections 73-H and 77A of the said Act, which sections deal with appointment of an Administrator/Board of Administrators to manage the affairs of the society only till a new Committee enters upon office, and is not under section 78 of the said Act. The grievance of Ms. Sippy against any of the members of the said society including the past members of the Managing Committee of the society can always be pursued by her before the appropriate authority under the provisions of the Maharashtra Co-operative Societies Act, 1960. From the arguments advanced before this Court, it was quiet apparent that there is an atmosphere of mistrust and animosity prevailing amongst several members of the society. The Respondent No.2 ought to have invited objections from the members of the society and ascertained the atmosphere prevailing in the society before constituting Boards of Administrators in place of the sole Administrator. The impugned orders are therefore, passed arbitrarily and without application of mind. Be that as it may, it will be in the interest of one and all, if the elections to the Managing Committee of Respondent No.4 Society are conducted by an independent Officer appointed by this Court at the earliest and in the meantime, the day-to-day affairs of the society including the power to issue cheques is given to an independent 9 wp-2079-10 Committee comprising of the Co-operative Officers with certain conditions prescribed by this Court. Hence, the following order is passed : (i) The orders dated 13th September 2010 and 30th September 2010 passed by Respondent No.2 are set aside. (ii) Mr. Narvekar, Company Registrar of this Court is appointed as an Election Officer to conduct the elections of the society within a period of 60 days from today. (iii) Mr. Narvekar, Election Officer, shall deal with the objections raised by any member pertaining to the inclusion of any name in the list of voters in accordance with law. (iv) Any member of the society, after the said elections are held, shall be entitled to file a dispute under section 91 of the Maharashtra Co-operative Societies Act, 1960 to impugn the election of any member to the Managing Committee on any of the grounds available in law, including the ground that the member/s elected to the Managing Committee was/were not qualified to contest the elections. (v) This order shall not preclude any member of the society including the member Mrs. Savitri Sippy from continuing any proceedings already filed against the society or from instituting any 10 wp-2079-10 fresh proceedings under the law against the society or any member of the society or any member of the earlier Managing Committees of the society. (vi) Pending the elections, Mr. S.H. More, Co-operative Officer-I, Mr. V.T. Ingle, Co-operative Officer-II and Mrs. S.S. Sawant, Accountant Co-operative Officer shall be in charge of the day-to-day affairs of the society, subject to the following : (a) Any of the above two Officers shall sign the cheques on behalf of the society for making any payments towards security charges and statutory payments, such as, water charges, property taxes, etc. (b) Any of the above two Officers shall issue cheques towards any bills received by the society not exceeding Rs.5,000/-. (c) Any of the above two Officers shall sign the salary cheques of the employees who are working for the society like lift-man, pump-man, Manager, etc. (d) The said Committee shall hand over charge to the newly appointed Managing Committee and shall not sign any cheques on and from the date of elections. 15. Rule is accordingly, made absolute in terms of the above order and the Writ Petition is disposed of, with no order as to costs. [ S.J. KATHAWALLA, J. ]