JUDGMENT - V.S. DESHPANDE, J.:---This Special Civil Application is directed against the order of the State Government dated 10-2-1977 dismissing the appeal of the petitioners preferred by them against the order of the Registrar, Co-operative Societies, Maharashtra State, dated 8th October, 1976, superseding the Managing Committee of the Satpuda Tapi Parlsar Sahakari Sakhar Karkhana Ltd., Purshottam Nagar, hereinafter referred to as the Karkhana and entrusting the management thereof to an Administrator. Few facts giving rise to this Special Civil Application can be stated thus: 2. This Karkhana was registered as a Multi-Unit Co-operative Society on 5th September, 1969 under the Multi-Unit Co-operative Societies Act, 1942 (Central Act). The area of operation of this Society consists of 376 villages from the State of Maharashtra, 47 villages from the State of Gujarat and 34 villages from the State of Madhya Pradesh, though the location of the Karkhana is at Purshottam Nagar in taluka Shahada of Dhulia district in Maharashtra. The Karkhana was established for the production of the Management of the society was entrusted to a Board of Directors otherwise known under the Act as the Managing Committee consisting of 16 members. The Karkhana commenced its operation during the year 1972-73. Originally the crushing capacity of this Karkhana was 1,250 TCD. Encouraged by the results of the achievements of the very first year the Managing Committee decided to expand the crushing capacity from 1,250 TCD to 2,500 TCD and also to set up distillery for the manufacture of alcohol, country liquor Moha liquor out of the molasses. This expansion naturally needed licences, applications for which were made to the competent authorities immediately after the decision and this expansion scheme. This necessitated, in the first place the installation of machinery and purchase involving the expenses of Lakhs of Rupees for the purchase of the machinery as also construction of the necessary building and sheds. The Managing Committee had expected to meet these capital financial requirements by increasing the subscribed capital, subsidies from the Government and also long term loan for capital investment from the Industrial Finance Corporation of India as well as other Banking Institutions. They accordingly placed orders for the machineries. In the month of August, 1974 they also made commitments with the growers of sugar-cane in the hope that the machinery will be installed before the end of February, 1974 and crushing capacity of the Karkhana would get increased. They accordingly placed orders for the machineries. In the month of August, 1974 they also made commitments with the growers of sugar-cane in the hope that the machinery will be installed before the end of February, 1974 and crushing capacity of the Karkhana would get increased. It appears that by that time the suppliers of the machinery from Calcutta had committed to the Karkhana that the added machinery will be supplied by the end of January, 1974. Application for licence, however, was not granted till the month of December, 1973. This delay in the grant of licence prevented the Industrial Finance Corporation and other Banking Institutions from advancing the long term loans. Due to the shortage of power and other difficulties, Calcutta machinery suppliers also could not instal the machinery till the month of June, 1974. This resulted firstly, in prolonging the crushing period from September, 1973 to July, 1974, instead of from November, 1973 to May, 1974 necessitating the crushing of the immature and dry sugar-cane. This consequently resulted in the fall in the quantity of sugar which ordinarily could have been produced with the same quantity of sugar which ordinarily could have been produced with the same quantity of sugar cane had the crushing operations being confined to the period from November, 1972 to May, 1974. In the first place, the Karkhana was driven to pay compensation to the growers of the tune of 10 Lakhs of Rupees for failure to purchase the sugar-cane grown by them for the factory. Secondly, as stated earlier, the average of 10-50 per cent of sugar production fell to 9.48 resulting in the loss of several lakhs of bags of gur, the loss having been estimated to the tune of Rs. 1,12,00,000/- and odd. Failure to get the long term loans from the Banking Institutions drove the Karkhana to utilise the short term loans available for the recurring expenses and to obtain them at higher rate of interest at all per cent per annum. This also resulted in preventing the Karkhana from making payment to the growers of sugar-cane who had grown sugar-cane in compliance with their commitment to the Karkhana, which in turn discouraged from them growing the sugar-cane in the coming years, viz., 1974-75 and 1975-76. This also resulted in preventing the Karkhana from making payment to the growers of sugar-cane who had grown sugar-cane in compliance with their commitment to the Karkhana, which in turn discouraged from them growing the sugar-cane in the coming years, viz., 1974-75 and 1975-76. Sugar-cane growing area stood reduced to 7000 acres in 1976-77 from the total average of 21,500 in the beginning of 1973-74 and 16,214 in 1974-75 and 10,500 in 1975-76. 3. This seems to have been noticed by the Registrar, who prima facie found that this was the result of the negligence of the Directors of the Karkhana and action under section 78 of the Maharashtra Co-operative Societies Act was called for. It may be noticed even at this stage that though the Karkhana is registered as a Society under the Central Act, the Registrar, Co-operative Societies of Maharashtra is competent to take action under section 78 of the Maharashtra Co-operative Societies Act because of the delegation of the powers by the Central Registrar under section 5-B of the Central Act, when the Society is deemed to have been registered under the Maharashtra Co-operative Societies Act. 4. A show cause notice was accordingly issued to the Directors on 24-2-1976. The Directors was called upon to answer as many as seven charges. The first charge related to the payment of compensation by the Karkhana to the tune of Rs. 10,17,576.44 to the sugar-cane growers in the area of 637.88 acres. The second charge related to the payment of the above compensation without fixing any principles or rules in that behalf and without ascertaining whether the amount of loss suffered by the sugar-cane growers was actually that such or not. The third charge related to crushing of the sugar-cane grown in 425 acres outside the command area of the Karkhana, even when the Karkhana was incompetent to crush the sugar-cane grown in 21,591.12 acres in the command area itself. The fourth charge pertained to the loss of Rs. 72,15.606/- because of the reduction in the production by 34,858 bags of sugar because of the prolonging the crushing season from 15-9-73 to 5-7-1974, i.e. in all for 292 days, as against the normal 210 days from November, 1973, the end of May, 1974. The fifth charge related to the loss of Rs. 72,15.606/- because of the reduction in the production by 34,858 bags of sugar because of the prolonging the crushing season from 15-9-73 to 5-7-1974, i.e. in all for 292 days, as against the normal 210 days from November, 1973, the end of May, 1974. The fifth charge related to the loss of Rs. 40,82,060/- because of sugar-cane grown in 1973-74 having been crushed late during the crushing season of 1974-75, the delay having caused by the drying of the sugar-cane resulting in the loss of sugar element therein. The sixth charge related to proceeding with the expansion scheme without ensuring the receipt of the required capital and the required loan from the banking institutions which resulted (a) in appropriating the short term loans obtained at the rate of 11 per cent per annum for the capital expenses; and (b) disability of the Karkhana to pay the recurring expenses including the taxes due to the Government to the tune of Rs. 92,37,588/-. The seventh charge related to the shrinkage in the sugar-cane growing area due to the non payment of price to the sugar-cane growers from 21,000 acres in 1973-74 to 10,500 acres, in the year 1974-75 and further reduction to 7000 acres only in the year 1975-76. 5. Three of the Directors, respondents Nos. 2 to 4, pleaded guilty to the allegations and supported the proposed action of the Registrar. The 12 petitioners, however, submitted a joint reply on 9th March, 1976 and additional replies on 4th June, 1976 and 15th June, 1976 and also on 15th July, 1976. The case was heard at length by the Registrar on 9th and 16th July, 1976. 6. It is after this that the Registar passed the order dated 8th October, 1976 holding all the Directors guilty of six out of the seven charges exonerating them only of charge No. 2. He also further held that the Directors were guilty of acting in contravention of the Bye-laws and Rules and also prejudicially to the interest of the Society. He therefore, thought that entrustment of the administration of the Society to the Administrator was necessary to improve the condition of the Karkhana. He accordingly superseded the Committee and appointed one Administrator for a period of one year. 7. The Petitioners preferred an appeal to the State Government. The same, however, has been dismissed on 10-2-1977. He therefore, thought that entrustment of the administration of the Society to the Administrator was necessary to improve the condition of the Karkhana. He accordingly superseded the Committee and appointed one Administrator for a period of one year. 7. The Petitioners preferred an appeal to the State Government. The same, however, has been dismissed on 10-2-1977. These concurrent orders are challenged in this special civil application under Article 226 of the Constitution. 8. Mr. Paranjape first contended that the Registrar, Co-operative Societies of Maharashtra had no jurisdiction to proceed with the inquiry to take any action under section 78 of the Maharashtra Co-operative Societies Act or to pass any order thereunder, as the society is Registered under the Central Act and the Registrar appointed by the Central Government under the Central Act alone is competent to take action, if any, even if it is found to have been warranted. Now, it is true that admittedly the present Societys area of operation covers certain villages beyond the State of Maharashtra. Admittedly, the area of operation of the Karkhana is not confined to the State of Maharashtra alone, but extents to a few villages in Gujarat and Madhya Pradesh and admittedly Karkhana has been registered not under the Maharashtra Co-operative Societies Act but under the Multi-Unit Co-operative Societies Act (Central Act). It is also true that under section 4(2) of the Central Act in the event of the Central Registrar of Co-operative Societies being appointed under the Central enactment such Central Registrar alone to the exclusion of the State Registrar possessed the powers and functions exercisable by the Registrar of the Co-operative Societies of the State in which such Society is actually registered. However, section 5-B of the Central Act contemplates delegation of the powers of the Central Registrar to the Registrar of the Co-operative Societies of the State. Mr. C.J. Sawant, the learned Additional Government Pleader appearing for the State, draw our attention to the Notification dated 30th January, 1976, under which the powers of the Central Registrar are delegated to the Registrar Co-operative Societies, Maharashtra and few other officers. It is not disputed that the Karkhana also is deemed to have been registered under the Maharashtra Co-operative Societies Act, though, is in fact, it has been registered under the Central Act. It is not disputed that the Karkhana also is deemed to have been registered under the Maharashtra Co-operative Societies Act, though, is in fact, it has been registered under the Central Act. In view of section 5-B of the Central Act and the Notification issued thereunder, it is not possible to hold that the Registrar of Co-operative Societies, Maharashtra, had no jurisdiction to take action under section 78 to supersede the Committee and entrust the Management of the Society to an administrator. 9. Mr. Paranjape then contends that more negligence on one occasion or the other cannot attract the Penal provision of section 78 unless negligence is proved to be of a persistent character. We are unable to see any merit in this contention. The adjective persistently only control the word default and not the word negligence in the opening part of the section. This will be clear if the implication of the comma between the words persistently makes default and or is negligent are borne in mind. The contention is thus without any substance. 10. Mr. Paranjape, then contends that even if the allegations made against the petitioner are held to have been proved, these at best indicate merely an effect of judgment on the part of the Directors. Mere error of judgment, so contends Mr. Paranjape, cannot amount to negligence within the meaning of section 78 of the Act. Whether in a given case circumstances point to a mere effect of judgment on the parts of the Director or acts and commissions alleged, amount to negligence could essentially be a question of fact. Exhaustive arguments were advanced by Mr. Paranjape in this behalf who took us through the findings recorded by the two authorities as well as the material relief on by the said authorities and the material relied on by the petitioners in support of their contentions before the two authorities. Though in all seven charges are framed, charges can be boiled down into two, charges Nos. Paranjape in this behalf who took us through the findings recorded by the two authorities as well as the material relief on by the said authorities and the material relied on by the petitioners in support of their contentions before the two authorities. Though in all seven charges are framed, charges can be boiled down into two, charges Nos. 1,3,4 and 5 pertained to the rash and negligent act in making commitments with the sugar-cane growers and directing them to grow sugar-cane which would be required to meet the needs on installation of the additional machinery, in terms of the expansion scheme, while charges 6 and 7 relates to the negligent act in the matter of proceeding to make long term capital investment without ensuring the grant of such loan by the Industrial Finance Co-operation and the Central Bank of India from whom a total amount of Rs. 84 lakhs of loan was expected to be received on long term basis to meet the capital investment arising out of the expansion schemes. 11. Dealing with the first charge consolidated above, it will be illuminating to recite some of the undisputed facts. The actual sugar production work of the Karkhana was carried, for the first time, during that period appears to have encouraged the Managing Committee to resort to ambitious plans in dispute, one of it being to instal additional machinery for increasing the crushing capacity of factory from 1,250 TCD to 2,500 TCD. A resolution to this effect was passed by the Managing Committee and the General Body meeting on 31-1-1973. It was estimated that by 15th February, 1974, the Karkhana will be able to get additional machinery installed so as to increase so as its crushing capacity as decided. Between March, 1973, to June, 1973 steps were taken to place orders for the purchase of the machinery, though the licence for the additional machinery was not granted till 31-12-1973 on their application dated 15-3-1973. In terms of the Bye-laws, the Managing Committee has to chalk out its crushing programme for the coming year and issue instruction to the cane growers to grow cane, according to the requirements of this programme. In terms of the Bye-laws, the Managing Committee has to chalk out its crushing programme for the coming year and issue instruction to the cane growers to grow cane, according to the requirements of this programme. It is not in dispute that even before the month of August, 1974, the Managing Committee did chalk out such programme on 20th July, 1973 on the assumption that functioning of the additional machinery will become possible by 15th February, 1974. It appears that the supplier Calcutta concern had in terms of its original commitment agreed to supply the machinery by the end of January, 1974. However, on or about 30th October, 1973, the Calcutta concern pleaded its inability to stick up to its commitment because of 80 per cent cut in the power as also the strikes and industrial unrest. There was another letter in the month of November pleading its inability even to stand by the commitment that was made in the month of October, 1973. The result was that machinery could not be received by the Karkhana till the end of May, 1974, and could not be installed till 20th July, 1974. The crushing season of 1973-74 had to be stopped by 5-7-1974. Thus the additional machinery could not be availed for the crushing season of the year 1973-74 and the Karkhana was driven to consume the entire ordered sugar-cane with the Karkhanas existing capacity of 1,250 TCD. 12. The immediate first consequence of this was that the crushing programme had to be unduly prolonged from September, 1973 to July, 1974 though ordinarily this has to be done between November and May, as it is during this period that sugar element of the sugar-cane can be utilised to its maximum extent when the sugar-cane is neither immature nor shows tendency of drying up. This resulted in the fall in the percentage of recovery of the sugar from the said sugar-cane from 10.50 per cent to 9.48 per cent. This immediately affected the quantity of sugar that could have been extracted from the same quantity of sugar-cane. Another consequence of this inability to get additional machinery installed in time was that sugar-cane growing are about 2581.13 acres could not be crushed at all. The Karkhana had to pay compensation of about Rs. This immediately affected the quantity of sugar that could have been extracted from the same quantity of sugar-cane. Another consequence of this inability to get additional machinery installed in time was that sugar-cane growing are about 2581.13 acres could not be crushed at all. The Karkhana had to pay compensation of about Rs. 10 lakhs as indicated earlier for the sugar-cane grown in about 637.18 acres and sugar-cane grown in the remaining area was required to be consumed during the year 1974-75. This again resulted in further reducing the sugar element in the sugar-cane to 6 per cent causing loss of recovery of sugar therefrom. 13. It is true that the Managing Committee could not have taken any action as contemplated by Bye-law No. 59 as such action could have been taken only in the month of August. The Managing Committee was not aware about the inability of the supplying concern to supply the machinery as promised by the end of January, 1974. Knowledge about this incapacity can be said to have been drawned on them only on 30-10-1973, when, for the first time, the supplying concern indicated its inability and the circumstances which caused their such inability. The point of importance, therefore, is can the Managing Committee be said to have acted with due care and attention in committing itself to several sugar-cane growers, members and non-members, and growers within their area and outside their area of operation on the mere promise of the supplying concern to supply the machinery by the end of January, 1974. Both the Inquiry Officer as well as the Appellate Authority appear to us to be justified in holding that the Karkhana was negligent in assuming that everything would go according to its programme, though the supply of the machinery from the Calcutta concern would in the very nature of things depend upon several factors. Possibility of some delay due to the known factors in such concern in these days ought to have been foreseen by the Managing Committee and entire years programme should not have been drawn up as if the additional machinery could be installed by 17th February, 1974, as they had estimated at the time when the negotiations were carried on by them with the supplying concerns. We are unable to find any fault with this view of that two authorities below, in the face of the above undisputed facts. We are unable to find any fault with this view of that two authorities below, in the face of the above undisputed facts. Several controversies are raised on behalf of the petitioners contending that (1) it was not possible for them to foresee that supplying concern would not supply the machinery by the end of January as committed by them; (2) it was not possible for them to divert the sugar-cane grown by the sugar-cane growers in terms of their programme dated 20-7-1973 without for more losses; (3) that such procedure is adopted even by other sugar factories; and (4) they have still tried to minimise the losses by getting the maximum possible production of sugar by extending the crushing season up to July, 1974. It appears that about 68.90 lakhs of Rupees were received by way of rebate by the Karkhana in terms of the policy laid down by the Government of India depending on the quantity of sugar bags produced by each Karkhana. Both the facts finding authorities were not impressed by these contentions raised by the Karkhana and we are unable to see any error of law in their approach, when concurrently facts finding authorities found against the Karkhana on these points. It is pertinent to note in this context that the Registrar took notice of the fact that even after the receipt of the intimation from the supplying concern on 30-10-1973, the Management did not take any steps whatsoever to divert the excess sugar-cane to different other sugar producing concern who have been found by the Registrar to have been in need of such sugar-cane due to the scarcity conditions therein. The Registrar has, in fact, enclosed a statement along with his order indicating the names of the concerns and their need of additional sugar-cane for the consumption at their Karkhana. The management in this case appears to have moved for the first time, in the month of January, 1974 when hectic efforts appear to have been made, firstly, to persuade the Calcutta concern to send the machinery at the earliest or find out any substitute for the same or get the required power from the State Government itself pending delivery of the added machines by the Calcutta concern. Karkhana did not try to divert the supplies to other factories till March 1974. Mr. Karkhana did not try to divert the supplies to other factories till March 1974. Mr. Paranjape has not explained why no action could have been taken by the Managing Committee immediately on receipt of the letter from the supplying concern on 30-10-1973 by asking the members to dispose of their sugar-cane. Mr. Paranjape, however, drew our attention to the say of the Managing Committee in their explanation that any such diversion would have caused loss to the tune of Rs. 45/- per ton by way of transport expenses. In the memo of the special civil application this loss is shown to be at Rs. 41/-. There is nothing to show as to what exactly would have been loss, as there is no direct and specific evidence on this behalf. At any rate, our attention was not drawn to any evidence beyond the assertions made by the Karkhana in their written statements as also in the course of arguments before the authorities below. The fall in the yield of sugar from sugar-cane is attributed by the Managing Committee to seven different reasons in the course of arguments. However, Mr. Sawant, learned Additional Government Pleader, drew our attention to page 103 of the paper-book, i.e. the written statement filed by the Chairman P.K. Patil, on 15th June, 1976, before the Officer in which it is expressly admitted that the main reason of the reduction of sugar element in the sugar-cane was the prolongation of the crushing season beyond the normal period of crushing season. Mr. Paranjape also tried to dispute the figures of actual profits or lossess indicated by the Registrar in his order to meet the point raised on behalf of the Managing Committee that prolongation of the crushing season at any rate helped them to get the rebate of Rs. 60.90 lakhs. We do not propose to go into the details of these contentions. Once it is admitted that production of sugar was reduced as a result of the prolongation of the season, the exact quantity being not very material to the point as to whether the management was negligence in committing themselves to the cane growers merely on the promise of the supplying concern to supply the machinery by the end of January without taking into account the probable contingencies and mishaps due to which the possibility of machinery not being installed ought to have been foreseen by them. We may, however, refer to the letter written by the Karkhana to the percentage of sugar production from 10.50 per cent to 9.48 has been admitted specifically and cause thereof therein to be the late installation the machinery and prolongation of the season. It is difficult to find any fault in the calculation made by the Registrar. According to him, the loss of sugar production comes to Rs. 1,12,00,000/- and odd. In this view of the matter, it is difficult to hold that the authorities below committed any error of law in finding the Managing Committee negligent in the matter of commitment to the cane grower. 14. More serious appears to us to be the conduct of the Managing Committee in proceeding to make capital investment without ensuring that the required loan of Rs. 84 lakhs will be available from the Industrial Finance Corporation as well as from the Central Bank of India. An amount of Rs. 1,26,00,000/- appears to have been invested by the Managing Committee towards the purchase of the machinery even by June, 1974, when there was no indication of readiness to grant the loan applied for by the two finance institutions. By September, 1973, both the institutions had made it clear that applications for their loan cannot be entertained unless first the Karkhana succeeds in getting a licence for the installation of the additional machinery. Admittedly this licence was not granted to the Karkhana till 31-12-1973. The same is true with regard to the expansion scheme and commissioning other projects, commissioning the distillery at a cost of Rs. 55 lakhs, country liquor unit at a cost of Rs. 120 lakhs, country liquor unit at the cost of Rs. 10.45 lakhs and Moha manufacturing unit at a cost of Rs. 7 lakhs. In the absence of any loans from these financing institutions the Karkhana was driven to utilise the medium term bridge loans ordinarily made available for the current expenses. This according to the Registrar, has resulted in additional interest of Rs. 18 lakhs. This also necessitated the available money with them meant for current expenses investing in the capital expenses, which in turn disabled the Karkhana from making payments of the sugar-cane price for the year 1974-75 as also advance price for the year 1975-76. This according to the Registrar, has resulted in additional interest of Rs. 18 lakhs. This also necessitated the available money with them meant for current expenses investing in the capital expenses, which in turn disabled the Karkhana from making payments of the sugar-cane price for the year 1974-75 as also advance price for the year 1975-76. This, according to the Registrar and the Appellate Authority, is the cause of the shrinkage in the sugar-cane growing area from the big area of 21,000 and odd acres in the year 1973-74 the area stood reduced to only 7,000 acres when the inquiry was being held in the month of August, 1976. On behalf of the Managing Committee, Mr. Paranjape contended that failure to pay the amount was not the sole reason for the shrinkage. Absence of required rainfall and tendency to grow food grains in view of the rising prices therein also guided the sugar-cane growers to abandon sugar-cane growing and resort to growing food grains instead. Both the authorities are not satisfied that shrinkage could be either due to the shortage in rainfall or to the rising prices of the food-grains. Grievance of both the authorities is that no evidence was produced before them to show that actually sugar-cane growers connected with the Karkhana had in fact diverted the sugar-cane growing areas towards food-grain growing areas. Mr. Paranjape drew our attention to an extract from the Shahada Agricultural Market Committees records showing how the food-grain prices went up during the year 1974-75. Both the authorities appear to us to be right in not placing much reliance on this extract, as these extracts merely show that in regard to certain food-grains prices have increased. That extract is not enough to show that actually, to the sugar-cane growers connected with the Karkhana, food-grain cultivation proved to be mere profitable and prices of the sugar-cane were necessarily lesser. It is difficult to find any fault with the two authorities below if they did not think it proper to place any reliance whatsoever on this extract. In this context it is worthwhile referring to the report of the committee appointed by the Industrial Finance Corporation to which reference is extensively made by the Registrar. It is difficult to find any fault with the two authorities below if they did not think it proper to place any reliance whatsoever on this extract. In this context it is worthwhile referring to the report of the committee appointed by the Industrial Finance Corporation to which reference is extensively made by the Registrar. Though the loan applied for in the year 1973-74 was not granted by the Industrial Finance Corporation, it had already granted loans worth lakhs of Rupees for the original undertaking when the working of the Karkhana commenced. The concern of the Industrial Finance Corporation or their investment guided them to appoint such a Committee to carry a probe into the financial affairs of the Karkhana. The Committee appears to have taken a grave view of the manner in which the Karkhana managed its financial affairs. It is letter dated 6th February, 1976, the Industrial Finance Corporation indicated how the liquid position of the Society as on 30-6-1975 was negative to the extent of over 110 lakhs. The Society was found to be in arrears of tax to the Government to the tune of Rs. 93 lakhs and arrears with regard to the cane suppliers to the tune of Rs. 150 lakhs. According to it, this unsatisfactory stage of affairs was due to the fact that the society did not follow the necessary financial discipline. According to it, the Karkhana was bound to suffer heavy losses, if the state of affairs continue to remain the same. It has also observed Taking an overall view, the Committee observed that the above State of affairs reflected seriously on the quality of management. In view of this material it is very difficult to find any fault within the authorities below, when they found the Managing Committee negligent in the matter of proceeding with the projects without ensuring the availability of the finances before entering the adventures. 15. Mr. Paranjape relied on the letter of the Government dated 15th June, 1973 recommending sanction of the licence for the additional machinery to the Chief Director of the Government of India. It is true that the said letter gives a very rosy picture about the financial conditions as also the, capacity of the Karkhana to cope up with the expanded scheme. Paranjape relied on the letter of the Government dated 15th June, 1973 recommending sanction of the licence for the additional machinery to the Chief Director of the Government of India. It is true that the said letter gives a very rosy picture about the financial conditions as also the, capacity of the Karkhana to cope up with the expanded scheme. We are, however, unable to see how this letter by itself can go to disapprove the findings of the two authorities below arrived at after a thorough probe into the matter and investigation of several circumstances found against the petitioners. Reliance by Mr. Paranjape on the decision of the Government of Maharashtra in the month of March, 1974 to stand guarantee for the loan that the Karkhana had obtained from the Maharashtra State Co-operative Bank to the tune of Rs. 40 lakhs appears to us to be misconceived. It must be noted that this loan amount was already obtained by the Karkhana in the month of March, 1973, itself, several reasons should have goaded the Government to go to the rescue of the Karkhana. It is sufficient to note that any such Act on the part of the Government cannot amount to a certificate of the Karkhanas financial condition being good, when on the actual probe it is found to the contrary. We are, therefore, unable to hold that it is merely a case of error of judgment and not a case of negligence, as found by the two authorities below. We are not much impressed by the contention of Mr. Paranjape that the same practice is followed in other Karkhana also. In fact, we do not think that practice so followed in other Karkhana can be of any assistance in determining the negligence or otherwise of the petitioners, in the facts and circumstances of this case. In fact, the circumstances in which these other Karkhana are alleged to have acted are not at all on the record to facilitate any actual decision thereon. 16. Mr. Paranjape also contended that section 78 contemplates consultation with the Federal Society and though the Registrar took decision to supersede the Committee notwithstanding the fact that the Federal Society had advised to the contrary. Suffice it to say that section merely requires the Registrar to consult and not to act, accordingly to the advise tendered by such Society. 16. Mr. Paranjape also contended that section 78 contemplates consultation with the Federal Society and though the Registrar took decision to supersede the Committee notwithstanding the fact that the Federal Society had advised to the contrary. Suffice it to say that section merely requires the Registrar to consult and not to act, accordingly to the advise tendered by such Society. In fact, it has already been held by the Division Bench of this Court to which one of us was a party that consultation conceived under section 78 is intended to give an opportunity to the said Society to ensure that the said Society or affiliated Society thereto are not adversely affected by the proposal tot take action under section 78 of the Act. 17. Mr. Paranjape also contended that action under section 78 can only be taken where some contemplated mischief is to be prevented, and is not intended to cover cases where the Act is sought to be prevented, which has already been done. We do not see any merit in this contention. Several Acts and commissions have been enumerated in section 78 itself which authorise the Registrar to take action against the member of the Managing Committee as a whole. Negligence of the management in the discharge to its duties is one of the circumstances which enables the Registrar to remove or supersede the Managing Committee. 18. It was also faintly suggested that it is only when the negligence is committed in the discharge of the duties under the Rules and the Bye-laws that action under section 78 can be contemplated. Mr. Paranjape contends that there is no Bye-law or Rule under the Co-operative Societies Act which is alleged to have been violated. This contention also is devoid of any substance. Duties and responsibilities of the Directors of the Managing Committee are enumerated in the Bye-law sub-clauses (5), (11) and (18), of Bye-law 54(2) can be said to cover the impugned lapses. 19. It was also vehemently contended that present Minister Shivajirao Patil, was at the bottom of this action by the Registrar and the orders are mala fide. Now at the relevant time Shivajirao Patil was merely a M.L.A. and not a Minister, secondly, no specific allegations are made against the Registrar. Thirdly, facts found militates against the existence of mala fide. It was also vehemently contended that present Minister Shivajirao Patil, was at the bottom of this action by the Registrar and the orders are mala fide. Now at the relevant time Shivajirao Patil was merely a M.L.A. and not a Minister, secondly, no specific allegations are made against the Registrar. Thirdly, facts found militates against the existence of mala fide. In fact letter of the I.F.C. dated 6-2-1976 appears to have alarmed the Registrar indicating how immediate action was called for. Show cause action is dated 24-2-1976. The contention is devoid of substance. 20. There is thus no merit in this petition. 21. Rule is accordingly discharged with costs. 22. Mr. Paranjape also prays for leave to appeal to the Supreme Court under Article 133 of the Constitution. Leave refused. -----