Case: Babaji Kondaji Garad Etc Vs. Nasik Merchants

Construction of Sec. 73B of the Maharashtra Cooperative Societies Act, 1960 (Act for short) figures in these two appeals arising from the two decisions rendered by the Bombay High Court, covering the same point and reaching the same conclusion, but the latter one does not take note of the earlier decision. Re: S.L.P. (Civil) No. 773283: The Nasik Merchants Co-operative Bank Ltd., the first respondent, is a co-operative Bank deemed to be registered under the Act and is governed by the Act. It was registered on June 11, 1959. It is a specified society within the meaning of the expression in Sec. 73G(1)(vii) of the Act. Accordingly the election of the members of the Committee and the election of the office-bearers by the Committee of the first respondent would be subject to the provisions of Chapter XI-A and has to be conducted in the manner prescribed in the Chapter. The Committee in which management of the first respondent vests, is designated as Board of Directors. The term of the members of the Board of Directors is five years. The election to the Board of Directors for the period 1981-82 to 1985-86 became due. As required by Sec. 144-C, t he Collector having jurisdiction in the matter notified the programme of election on October 29, 1981. At the relevant time, the strength of the Board of Directors was 15 in number. 14 Directors were to be elected by members and one was to be nominated by the Central Co-operative Bank. It is not disputed but in fact conceded that the election programme notified by the Collector did not specify that the two seats on the Board of Directors of the first respondent would be reserved seats; one for the members belonging to the Scheduled Castes or Scheduled Tribes and one for the weaker section of the members who have been granted loans from the society of an amount not exceeding Rs. 200 during the year immediately preceding as required by Sec. 73B of the Act. Poll was held on December 14, 1981 and the counting of votes took place on December 14, 1981 and the result was declared on December 17, 1981. Respondents 3 to 16 were declared elected. Thereupon the present petitioner, a member of the first respondent-Bank and belonging to the Joshi community which is recognised as a Scheduled Tribe moved an election petition under Sec. 144 before the Additional Commissioner, Nasik, calling in question the election of respondents 3 to 16 to the Board of Directors of the firs respondent-Bank inter alia on the ground that the whole of the election programme is vitiated on account of its non-compliance with the mandatory statutory provision enacted in Sec. 73B which prescribes reservation of seats; one in favour of Scheduled Castes or Scheduled Tribes and another in favour of weaker section from the members who had borrowed loans not exceeding Rs. 200 in the year preceding the yea r of election (reservation for weaker section for short). There were other grounds on which the election of respondents 3 to 16 was called in question but they are no more relevant and need not clutter the record here. The Additional Commissioner as per his judgment and orderFebruary 8, 1982 held that despite the failure of the first respondent-Bank to amend bye-law 41 (correct bye-law appears to be 40) even after repeated reminders by the District Deputy Registrar, the mandate of Sec. 73B will have precedence overt he unamended bye-law 40 and as the election process was set in motion in contravention of the mandatory provision contained in Sec. 73B and the relevant rules, the result of the election has been materially affected and accordingly declared the election of respondents Nos. 3 to 16 as void and ineffective and directed the Collector, Nasik to hold the election de novo.Respondents Nos. 3 to 7 and 9, 10 and 12 and 14 to 16 filed Writ Petition No. 392 of 1982 in the High Court of Judicature at Bombay under Art. 227 of the Constitution for a writ of certiorari. A Division Bench of the Bombay High Court granted the writ and made the rule absolute holding that it is not imperative that the reserved seats must be filled in only by election and the mandate of Sec. 73B would be adequately complied with if reserved seats are filled in by co-option and therefore, there is no error in conducting the election. Accordingly, the order of the Additional Collector was quashed and set aside and the election petition wasthe petition for special leave to appeal came up before this Court, a direction was given that the matter will be disposed of at t he stage of granting special leave as if it is an appeal. Hence this appeal by special leave. Re. C.A. No. 1810/81: The Parbhani District Central Co-operative bank Ltd., the second respondent is a co-operative bank deemed to be registered under the Act. It is a specified society within the meaning of the expression in Sec. 73G. The term of members of the Board of Directors expired. Accordingly, the Collector of Parbhani, the first respondent notified programme of election commencing from March 30, 1981 and ending with the counting of votes and declaration of result on April 24, 1981. The election was held and the result was announced and respondents No. 3 to 12 were declared elected. Thereafter the meeting of the elected members of the Board of Directors is to be convened to elect the office bearers. At that stage, the two appellants filed Writ Petition No. 1484 of 1981 in the Bombay High Court questioning the validity of the election of the respondents 3 to 12 inter alia on the ground that the election was held in violation of Sec. 73B of the Act.A Division Bench of the Bombay High Court held that there was some confusion between the procedure for election prescribed in the rules and the by e-laws and the one prescribed in Sec. 73B and therefore, the Collector did not take steps to hold election to the reserved seats. The Court further held that the first petitioner did not take any objection until the whole election process was completed and at a later stage approached the Court to throttle down the election of the office-bearers and that this might indicate a waiver of the right on the part of the petitioner and also it amounts to acquiescence and therefore, no interference is called for at the instance of the petitioner. The Court also observed that co-option being an alternative to election to the reserved seats, the mandate of Sec. 73B would be satisfied if the Board of Directors co-opts two members to provide representation to the two reserved seats. Approaching the matter from this angle, the writ petition was dismissed. Hence this appeal by special leave.

Court's reasoning:
Alternatively, one can bring in Hydons test more often noticed by this Court that in order to arrive at true intendment of a statute, the Court should pose to itself the questions; (1) what was the situation prior to the provision under construction, (2) what mischief or defect was noticed before introducing the provision, (3) whether it was remedial and (4) the reason for the remedy.Applying this test, the same result would follow inasmuch as looking to the position and the plight of Scheduled Castes and Scheduled Tribes and the weaker section of the members of a society, though they would be subject to the dictate of the society they had no voice in the managerial councils and that to raise the stature and status of such persons so as to bring them on the footing of equality with other segments of the society, reservation was provided in the absence of which those in whose favour reservation was made could not get elected t o the decision making bodies. While ascertaining the true canon of construction applicable to Sec. 73B, these aspects must stare into our face.Before going in search of any external aids of construction, let us look at the language employed by the Legislature because no canon of construction can be said to be more firmly established than this that the Legislature uses appropriate language to manifest its intention. No controversy was raised with regard to the power of Legislature to prescribe reservation of seats in the committee in which the management of the society vests. The use of the expression shall in Sec. 73B clearly mandates obligation torespect, we find it difficult to subscribe to this untenable approach that a view of law or a legal provision expressed by a Government Officer can afford reliable basis or even guidance in the matter of construction of a legislative measure. It is the function of the Court to construe legislative measures and in reaching the correct meaning of a statutory provision, opinion of executive branch is hardly relevant. Nor can the Court abdicate in favour of such opinion.The provision contained in Chapter XI-A applies to election to the committees of specified societies categorised in Sec. 73B. Sec. 144-C requires the Collector to draw an election programme and arrange for conducting the election or under his control by the Returning Officer according to the programme. Now the election programme has to be published. The programme therefore, must in order to comply with legal formality show whether any of the seats to be filled in are reserved and specify the class in whose favour reservation has been made, so as to give notice to persons eligible for contesting election to reserved seats. This becomes manifestly clear from the form prescribed for filling in the nomination paper being Form No. 2 appended to the rules. In the case of reserved seats a further declaration has to be made in the nomination form that the candidate belongs to Scheduled Castes or Scheduled Tribes or Vimukta Jati or the weaker section candidate. And this declaration has to be signed by the candidate himself. Now therefore, the Collector, a statutory authority charged with a duty to hold election according to the Act, must specify in the election programme inter alia that there are reserved seats to be filled in by election and the class in whose favour reservation is ma de. This will be notice to the members eligible for contesting election to reserved seats so that they may fill in their nomination. There is not even a whisper in the election programme whether any of the seats were reserved. The omission is glaring and fatal. As pointed out earlier, election has to be held to form the committee. Sec. 73 requires the Collector to hold election in accordance with the Act including Sec. 73B. The failure to hold election in accordance with the Act including Se c. 73B would vitiate the whole election programme from commencement till the end. It would all the more be so because the failure to hold election according to the provisions of the Act which denies an opportunity to the persons who are eligible to get elected to the reserved seats would certainly vitiate the whole election programme. One can safely conclude that the election is held in violation of Sec. 73B. Therefore, in our opinion, the High Court was in error in upholding the election, which is ex facie illegal, invalid and contrary to law.Accordingly both these appeals succeed Civil Appeal arising from S.L.P. No. 7732/83 is allowed and the decision of the High Court is quashed and set aside and the one rendered by the Additional Commissioner is restored.