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1987 DIGILAW 92 (BOM)

Apex Marketing Federation Employees Union v. State of Maharashtra & another

1987-02-26

S.M.DAUD

body1987
JUDGMENT - Daud S.M., J.: - This petition under Article 226 of the Constitution is directed at securing an order under section 73-BB of the Maharashtra Co-operative Societies Act, 1960, (MCS Act) and a further direction to appoint nominees of the petitioner Union as members of the Board of Directors of respondent No. 2. 2. The second respondent took over from a body, hereinafter to be known as 'the old federation', as an organisation to attend to the purchase and sale of Raw Cotton procured by the State of Maharashtra under the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971. The petitioner was also a representative Union of the employees of the old federation. The substitution of the old federation by respondent No. 2 came about in August, 1984. Consequent to the substitution, certain directions were issued by the State Government, and one such, was that given on August 10, 1984. This in so far as it related to the regular staff of the old federation, placed the services of the said staff on "as is where is" basis at the disposal of respondent No. 2. The second respondent started functioning and apart from the M.C.S. Act and the Rules framed thereunder, is required, to comply with the Bye-laws. These bye-laws are at Ex. A to the petition. Bye-law 39(9) provides for including on the Board of Directors, persons chosen as Directors as per section 73-BB of the M.C.S. Act. Bye-law 42, however, lays it down that the first Board of Directors of respondent No. 2 shall nominated by the Government, that Board shall hold the office for three years, that this period is extendable up to a maximum period of two years, and that the Government may remove all or any of the Directors so nominated and fill in the vacancy so caused or otherwise at any time during the tenure of the nominated Board. 3. The Government nominated the Board on 9th October, 1984. The petitioner union made a request to the second respondent for taking on Board as Directors, the three persons nominated by it. This request, made on 28th May, 1986, was accompanied by a certificate of recognition under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The application of the petitioner was 1986, the Government vide Ex. This request, made on 28th May, 1986, was accompanied by a certificate of recognition under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The application of the petitioner was 1986, the Government vide Ex. F(1), being the English translation of the Marathi decision, replied as follows: - ".....The Board of Directors of the Federation is nominated by the Government. Hence, the provisions of section 73-BB of the MCS Act do not apply to the Federation, which may please be noted....." It is this decision of the Government which has given rise to the instant petition. Initially., the petitioner had not taken exception to the non-issuing of an order under section 73-BB of the M.C.S. Act to cover respondent No. 2. At one stage the matter was before Jahagirdar, J. and on 4th October, 1986, the learned Judge passed a direction reading thus: - "..... Perused the notification ..... dated 19th March, 1975. It does not cover the 2nd respondent society. Now that the 2nd respondent has taken over all the functions of the society at Sr. No. 3 in the notification, there is no reason why the Government should not issue a fresh notification, to cover the second respondent. The Government Pleader to inform the Government accordingly...." Apparently, no such information, as was required by the Court, was sent by the Government Pleader to the Government. It is petitioner's case that having regard to the provisions of section 73-BB and the non-raising of any objection to the proposed nomination of its three representatives to the Board of Directors, the Government was bound to include the said three representatives in the nominated Board of Directors. It was bound to do so in view of the fact that several other societies similarly placed as respondent No. 2 had a Board of Director with representatives of the employees thereon. Respondents No. 2 could not be singled out for the non-inclusion of employees' representatives on the Board of Directors. If that was allowed, it would amount to depriving the petitioners of a valuable right of representation conferred upon them by the statute, as also the Bye-laws. No doubt, section 73-BB of the M.C.S. Act gives the impression of the privilege conferred thereby, being dependent upon the issue of a general or special order by the Government. If that was allowed, it would amount to depriving the petitioners of a valuable right of representation conferred upon them by the statute, as also the Bye-laws. No doubt, section 73-BB of the M.C.S. Act gives the impression of the privilege conferred thereby, being dependent upon the issue of a general or special order by the Government. However, this power had to be exercised rationally and not in violation of Articles 14 and 16 of the Constitution. Hence, the relief for a writ to quash the Government decision at Ex. F and a mandamus to direct it to issue an order under section 73-BB and forthwith act upon the request to nominate the three persons named in its communication dated May 28, 1986 to the Board of Directors of respondent No. 2. 4. Somewhere before the petition was admitted, respondent No. 1 filed their affidavit. In this affidavit it was contended that the relief claimed in the petition could not be granted as no order, as required by section 73-BB had been issued. The second respondent had been registered in the year 1984. It was in its infancy and the management of the said respondent was in the hands of a nominated Board of Directors. No elections to the Board of Directors had been held. All that I can discern from this jumble of words is, the defence that the right of the employees to be on the Board of Directors depended upon the issue of a special or general order under section 73-BB. No such order had been issued and, therefore, the very basis of the petitioner's claim did not exist. At the stage of hearing, an additional ground put forth by Counsel representing the State, is, that the relief claimed by the petitioner cannot be granted as it would infringe Bye-law 42. To my mind, the reliefs claimed by the petitioner have to be granted and I allow the petition for reasons given below. 5. First, let me take up the ground put forth in the affidavit opposing admission. This affidavit having been tendered on behalf of respondent No. 1. Now it is true that the right of representation conferred upon the employees by section 73-BB springs into existence upon passing of an order, whether general or special, by the State Government. 5. First, let me take up the ground put forth in the affidavit opposing admission. This affidavit having been tendered on behalf of respondent No. 1. Now it is true that the right of representation conferred upon the employees by section 73-BB springs into existence upon passing of an order, whether general or special, by the State Government. This, however, does not mean that the State Government has an unfettered right to decide, as to if and when, such an order should be issued. The object of section 73-BB is to give a voice to the employees of certain societies in the management of the latter's affairs. This is a valuable right and cannot be left to the unfettered discretion of the State Government. The only reason advanced by the State Government for not issuing an order under section 73-BB vis-a-vis respondent No. 2. It unconvincing. It is said that the second respondent has come into existence in 1981 and having regard to its tender age, the Government did not think it proper to saddle it with Directors, other than those in whom the Government had confidence. But nothing prevented the Government from making a choice from amongst employees to be nominated on the Board of Directors. That apart, if the implication is that the employees' representatives are a bunch of trouble-makers whose presence is undesirable in respect of new institutions, the same cannot be sustained. If representatives of employees get a right of representation on the Board of Directors, which is statutorily conceded - and it is so conceded by incorporating section 73-BB in the M.C.S. Act - there is no reason why employees of the new federation should be deprived of the benefit thereof. 6. This takes me to the other ground advanced by the Counsel viz. that Bye-law 42 would be contravened, if the proposal of the petitioner were to be accepted. Bye-law 42 gives to Government an exclusive right to nominate the first Board of Directors; but the right to nominate has to be so read as to make section 73-BB meaningful. If some provision has to give way, it will be the Bye-law, rather than the section. Therefore, while conceding to the State Government the right to nominate the first Board of Directors under Bye-law 42, there should be no difficulty in directing it to give effect to the mandate incorporated in section 73-BB. If some provision has to give way, it will be the Bye-law, rather than the section. Therefore, while conceding to the State Government the right to nominate the first Board of Directors under Bye-law 42, there should be no difficulty in directing it to give effect to the mandate incorporated in section 73-BB. Thus viewed, the nominated Board of Directors can be made to include the employees' representatives. Therefore, the reliefs claimed by the petitioner have to be granted and, hence, the order: - ORDER Respondent No. 1 do issue a special order as required by section 73-BB of M.C.S. Act and make the same applicable to the Board of Directors of respondent No. 2 inclusive of the existing nominated Board and further do accept the proposal of petitioner conveyed through respondent No. 1 to appoint three of its nominees on the Board of Directors. Rule in the above terms made absolute, with parties being left to bear their own costs. Order accordingly.