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1994 DIGILAW 404 (BOM)

Datta Digambar Sahakari Doodha Vyavasayik Sanstha Ltd. . and others v. Phaltan Taluka Sahakari Doodha Puravatha Sangh Ltd. , Phaltan

1994-08-04

A.V.SAVANT

body1994
JUDGMENT - A.V. SAVANT, J.:---Heard Shri Singhvi for the petitioners and Shri Dharmadhikari for the respondent. 2. Having regard to the nature of the controversy, and the urgency of the reliefs claimed, this petition has to be disposed of at the stage of admission itself. Hence, Rule. By consent, rule made returnable forthwith. Heard Counsel. 3. The 15 petitioners are the primary societies and the respondent-Sangh is the Taluka Federation (for short, the Sangh). The petition is by the 15 societies, who are desperately trying to become the members of the respondent-Sangh. However, in view of the forth coming elections, the Sangh wants to somehow deny the benefits of membership to the petitioners, as will be evident from the facts mentioned below. 4. According to the affidavits which have been filed before me, it is clear that the petitioners had initially applied to the respondent-Sangh between June 22 and June 28 of 1993 for the membership of the Sangh in accordance with the procedure laid down in section 23 of the Maharashtra Co-operative Societies Act, 1960. The relevant portion of the said section 23 reads as under :--- "23. Open Membership---(1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its by-laws. (1A) Where a society refuses to accept the application from an eligible person for admission as a member, or the payment made by him in respect of membership, such person may tender an application in such form as may be prescribed together with payment in respect of membership, if any, to the Registrar, who shall forward the application and the amount, if any so paid, to the society concerned within thirty days from the date of receipt of such application and the amount; and there upon if the society fails to communicate any decision to the applicant within sixty days from the date of receipt of such application and the amount by the society, the applicant shall be deemed to have become a member of such society". 5. Alongwith the applications for memberships, the petitioner-societies were required to pay the membership fee of Rs. 1000 + Rs. 5/- = Rs. 1005/- per society. This amount of Rs. 5. Alongwith the applications for memberships, the petitioner-societies were required to pay the membership fee of Rs. 1000 + Rs. 5/- = Rs. 1005/- per society. This amount of Rs. 1005 per society was deposited by the petitioners in the account of the respondent-Sangh with the Satara District Central Co-operative Bank between the said dates of June 22 and June, 28, 1993. It appears that the applications of membership, which were sent to the respondent-Sangh by the petitioners, were not accepted by the Sangh and they were refused in the last week of June, 1993, such refusals commencing from 24th June, 1993 onwards. The petitioners received the applications back from the respondent Sangh with the endorsements of refusal. This is clear from the affidavit dated 28th July, 1994 filed by Raghunath Baburao Shinde in this Court along with its annexures. 6. In accordance with the Scheme of section 23(1-A) quoted above, where the society like the respondent Sangh refuses to accept the application from an eligible person for admission as a member or the payment made by him in respect of the membership, such person may tender the application in such form as may be prescribed together with the payment in respect of the membership to the Registrar. On the refusal to accept the applications for memberships submitted by the petitioners to the respondent-Sangh, the petitioners presented the applications for membership to the Deputy Registrar between 13th and 18th August, 1993 in accordance with Scheme of section 23(1A). The original applications which were refused by the respondent Sangh and were, thus, received back by the petitioners, were submitted to the Deputy Registrar between 13th and 18th August, 1993. 7. Incidentally, it may be stated that even when initially the petitioners had submitted their applications to the respondent Sangh between 22nd and 28th June 1993, the zerox copies of such applications were also forwarded to the concerned Deputy Registrar on the 28th June, 1993. However, apart from these zerox copies, when the originals were not accepted by the respondent Sangh, in accordance with the provisions of section 23(1A) the petitioners submitted the originals to the Deputy Registrar between 13th and 18th August, 1993. As stated earlier, the membership fee of Rs. 1005/- per society was already paid into the account of the respondent Sangh between 22nd and 28th June, 1993. 8. As stated earlier, the membership fee of Rs. 1005/- per society was already paid into the account of the respondent Sangh between 22nd and 28th June, 1993. 8. The scheme of sub-section (1A) of section 23 requires that when the Registrar receives such applications from the applicants, who are desirous of becoming members and whose applications are refused by the society, like the respondent Sangh, the registrars has to forward the said applications within 30 days from the date of receipt of such applications, to the society concerned viz. the respondent Sangh in the present case. It is further stipulated that when the Registrar forwards the applications to the society, like the respondent Sangh, it has to communicate its decision to the applicant within 60 days from the date of receipt of such application. It is finally provided in the concluding part of sub-section (1A) of section 23 that if the Sangh failed to communicate its decision to the petitioners within 60 days from the date of the receipt of the application, the applicants like the petitioners shall be deemed to have become members of the society-respondent Sangh. 9. In the above set of facts, the petitioners filed a dispute on the 10th May, 1994 in the Co-operative Court, at Satara. The relief prayed for in the dispute was that the petitioners were the deemed members of the respondent Sangh and hence, the respondent Sangh should not interfere with the rights of membership of the petitioners. A specific declaration was prayed for to the effect that the petitioners had become the deemed members with effect from 19th November, 1993. This was based on the sequence of events contemplated by the scheme of section 23(1-A) as mentioned above. Pending the suit, an application for interim relief was made at Exh. 5 with the prayer that the respondent Sangh should not interfere with the petitioners right of membership on the basis of their deemed membership with effect from 19th November, 1993. The respondent Sangh opposed the application for interim relief and contended that the petitioners were not entitled to claim the benefit of the provisions of section 23(1-A) relating to deemed membership. 10. The respondent Sangh opposed the application for interim relief and contended that the petitioners were not entitled to claim the benefit of the provisions of section 23(1-A) relating to deemed membership. 10. The learned trial Judge came to the strange conclusion that though the respondent Sangh was willing to recognise the petitioners as members, the petitioners had not substantiated their case that they had approached the Sangh "with the intention of becoming its members". It was further observed that the milk supplied by the petitioners was being accepted by the Sangh and payments were being made to the petitioners and, therefore, there was acquiescence on the part of the petitioners. It was then stated that such acquiescence would not entitle them to claim the status of deemed membership. The relevant observations in the trial Court order are quoted below for a ready reference:- "On the contrary, the opponent Sangh is willing to recognise them as members of the society but disputants are failed to substantiate that they have approached to Sangh with an intention to become members of it". "Their milk is accepted and the disputants are taking payments and there is no complaint regarding it". "The acquiescence is a de-merit while considering to grant temporary injunction. Applying test of acquiescence it appears that on the facts of the case the situation has become such as it would be dishonest or unconscionable for the disputants having the deeming right of membership sought to be enforced". It was further held that the right claimed was of deemed membership and was not actually in existence and, therefore, no inconvenience would be caused to the petitioners if no interim relief was granted to them. On such a strange reasoning, the learned trial Judge refused to grant the interim relief. In the result, the application for interim relief was dismissed on May 20, 1994. 11. Being aggrieved by the said order, the petitioners filed Appeal No. 169 of 1994 before the Co-operative Appellate Court. The Appellate Court also did not appreciate the correct legal position flowing from the provision of section 23(1A) of the Act. The relief prayed for was confused with the relief in connection with the ensuing elections for including the names in the voters list, which was not the scope of the application for interim relief. The Appellate Court also did not appreciate the correct legal position flowing from the provision of section 23(1A) of the Act. The relief prayed for was confused with the relief in connection with the ensuing elections for including the names in the voters list, which was not the scope of the application for interim relief. Reliance placed by the petitioners on the concept of deemed membership arising under section 23(1A) was found to be misplaced. In the result, the Appeal was dismissed on the 7th June, 1994. Though the operative part of the order gives an impression that the application for interim relief in the pending appeal was rejected, both the learned Counsel have stated before me that the appeal itself has been dismissed. 12. In the above mentioned facts, Shri Singhvi has made two-fold submissions before me. In the first place, Counsel contended that the applications were initially submitted to the respondent-Sangh between 22nd and 28th June, 1993 and the zerox copies thereof were also submitted to the Deputy Registrar on the 28th June, 1993. The Deputy Registrar, in turn, wrote to the respondent Sangh on 16th July, 1993 forwarding therewith the list of the names of societies, including the petitioners. From the submissions made before me, it appears that zerox copies sent to the Deputy Registrar were also forwarded by him to the respondent Sangh to do the needful in the matter of membership of the petitioner-societies. Counsel contended that this set of papers was received by the Sangh on 16th July, 1993 and granting 60 days period, which was to expire on the 14th September, 1993, the petitioners would be deemed members with effect from 15th September, 1993. There was no communication by the respondent Sangh to the petitioners and all that the respondent Sangh did was to write a letter on the 6th August, 1993 to the Deputy Registrar informing him of its reluctance to entertain the applications of the petitioners on one ground or the other. Relying upon the failure on the part of the respondent to communicate to the petitioners its decision within 60 days from 16th July, 1993, Counsel contended that the petitioners would be entitled to the claim of being deemed members with effect from 15th September, 1993. Relying upon the failure on the part of the respondent to communicate to the petitioners its decision within 60 days from 16th July, 1993, Counsel contended that the petitioners would be entitled to the claim of being deemed members with effect from 15th September, 1993. It is not possible to accept this contention because this is not the precise case made out either in the plaint or in the application for interim relief. The case made out is the second submission before me which Shri Singhvi has argued in the alternative. 13. The precise case which was sought to be made out in the courts below and is the second submission is that the original applications submitted to the respondent Sangh between 22nd June, and 28th June, 1993 were returned since they were not at all accepted by the respondent Sangh. The petitioners received them back and submitted them to the Deputy Registrar between the 13th and 18th August, 1993 in accordance with sub-section (1-A) of section 23. The Deputy Registrar ought to have sent the same to the respondent Sangh at any case before the 17th or 18th September, 1993, because the outer limit prescribed by the section is 30 days from the date of the receipt of the Applications, the last date of the receipt of the Applications being 18th August, 1993. The Sangh in its turn ought to have communicated its decision to the petitioners within 60 days, from 18th September, 1993, that is to say on or before 17th November, 1993 and since that has not been done, the petitioners claim to have become the members - deemed members - with effect from 19th November, 1993 as per the provisions of section 23(1-A). In short, the petitioners claim to have become deemed members of the respondent Sangh by virtue of the failure on the part of the respondent Sangh to communicate its decision to the petitioners within 60 days from the date of the receipt of the applications by the Sangh from the Deputy Registrar. 14. As against this, Shri Dharmadhikari for the respondent Sangh contends that the Sangh received the first bunch of applications on 16th July, 1993, from the Deputy Registrar. This was the set of papers, viz. the zerox copies of the original applications submitted by the petitioners to the Sangh between 22nd and 28th June, 1993. 14. As against this, Shri Dharmadhikari for the respondent Sangh contends that the Sangh received the first bunch of applications on 16th July, 1993, from the Deputy Registrar. This was the set of papers, viz. the zerox copies of the original applications submitted by the petitioners to the Sangh between 22nd and 28th June, 1993. As stated earlier, when the petitioners submitted the original applications to the Sangh between 22nd and 28th June, 1993, they had also forwarded the zerox copies of their applications to the Deputy Registrar on 28th June, 1993. The Deputy Registrar, in turn, wrote to the respondent Sangh on 16th July, 1993. Thus, the respondent Sangh received the zerox copies of the applications from the Deputy Registrar on 16th July, 1993. On 6th August, 1993, the Sangh wrote to the Deputy Registrar pointing out the alleged reasons why the petitioners could not be granted membership. According to the Counsel, this is sufficient compliance with the provisions of sub-section (1A) of section 23 and, therefore, the deeming provisions would not apply. It is not possible to accept this contention of Shri Dharmadhikari. It is true that he tried to contend that informing the Deputy Registrar the reasons for a refusal to grant membership to the petitioners would be sufficient compliance with the provisions of section 23(1A) and was enough to prevent the operation of the deeming provisions. However, after some arguments on the true interpretation of the provisions of section 23(1-A) Shri Dharmadhikari very fairly stated that it was necessary for the respondent-Sangh to communicate its decision to the petitioners within sixty days from the date of receipt of such applications i.e. to say, within 60 days from 16th July, 1993. No such communication was admittedly addressed by the respondent Sangh to the petitioners and the only communication which was addressed on receipt of the applications on 16th July, 1993, was the letter dated 6th August 1993, issued by the respondent-Sangh to the Deputy Registrar. However, this controversy need not detain me longer since I am not inclined to accept the first contention of Shri Singhvi, since that was not the precise case in the lower courts. 15. However, this controversy need not detain me longer since I am not inclined to accept the first contention of Shri Singhvi, since that was not the precise case in the lower courts. 15. On the alternative submission of Shri Singhvi, however, Shri Dharmadhikari contended that as far as the original applications that were submitted to the Deputy Registrar between 13th and 18th August, 1993 are concerned, the Deputy Registrar seems to have sent them to the respondent - Sangh as late as on 11th January, 1993 and it was on 7th March, 1994 that the respondent-Sangh wrote to the Deputy Registrar explaining its reluctance to entertain the applications of the petitioners on one ground or the other. Again Shri Dharmadhikari tried to contend that the communication to the Deputy Registrar within 60 days of 11th January, 1994 was sufficient compliance with the provisions of sub-section (1-A) of section 23 to prevent the operation of the deeming provisions. 16. I am not impressed by this submission of Shri Dharmadhikari. In the first place, if the original applications which were refused by the respondent-Sangh and were received back by the petitioners were submitted to the Deputy Registrar between 13th and 18th August, 1993, it was obligatory on the part of the Deputy Registrar to have forwarded the said applications to the Sangh within 30 days i.e. to say on or before 17th or 18th September, 1993. This is on the basis of the last date of receipt of the applications being 18th August, 1993. This was not done. Assuming that it was done, then, within 60 days from 18th September, 1993, the respondent-Sangh was obliged to communicate its decision to the petitioners failing which the petitioners are entitled to be deemed as members of the respondent-Sangh. Thus, Shri Singhvi is right in his alternative submission that, in any case, with effect from 19th November, 1993, i.e. to say on the expiry of 60 days from 18th September, 1993, the petitioners would be entitled to be deemed to have become members of the respondent-Sangh in view of the concluding portion of sub-section (1A) of section 23 of the Act. In fact, after 18th September, 1993,60 days would expire on 17th November 1993 (September 12 + October 31 + November 17 = 90 days). In fact, after 18th September, 1993,60 days would expire on 17th November 1993 (September 12 + October 31 + November 17 = 90 days). However, since the relief prayed for in the plaint and in the application for interim relief is for a declaration that the petitioners have become deemed members with effect from 19th November, 1993, I am mentioning that date. 17. It would be clear from the above position that the findings of the two courts are wholly unsustainable and they have not considered the scheme of the provisions of section 23(1A). The said provisions have a definite time-bound schedule to be adhered to at each of the stages. That has not been adhered to either by the Deputy Registrar or by the respondent-Sangh. The result is that on the expiry of the statutory period provided for in section 23(1A), the petitioners are entitled to be deemed to have become the members of the respondent-Sangh. 18. Apart from the above, in the affidavit filed by the respondent-Sangh in this Court, there is a categorical statement contained in Para 12 of the affidavit of Kantilal Kisan Pandit as under: "I further say that the willingness of the respondent to enroll the petitioners are members will not in any manner advance the case of the petitioners much less substantiate the same". Shri Dharmadhikari very fairly stated that he stood by the above statement made in the affidavit. However, what he was so worried was the consequences of the petitioners becoming members in view of the forthcoming elections. I must make it clear that, that is not the subject matter of the present petition. In fact, there are some other petitions pending in this Court which have a bearing on the election to the Managing Committee of the respondent Sangh such as Writ Petition No. 1813 of 1994, Writ Petition No. 2760 of 1994 and Writ Petition No. 2765 of 1994. Suffice it to say that the order passed by this Court in L.P.A. No. 103/94 arising out of Writ Petition No. 1813 of 1994 has been confirmed by the Supreme Court on 15th July, 1994 while rejecting S.L.P. No. 10815-16 of 1994. Suffice it to say that the order passed by this Court in L.P.A. No. 103/94 arising out of Writ Petition No. 1813 of 1994 has been confirmed by the Supreme Court on 15th July, 1994 while rejecting S.L.P. No. 10815-16 of 1994. However, I must hasten to add that these matters have no direct bearing on the precise issue involved in this petition, excepting that the respondent-Sangh seems to be somehow trying to contrive a situation, on the eve of election, whereby some members are either expelled or kept away from taking part in the election for one reason or the other. 19. In my view, having regard to the above factual and legal position, both the courts below were clearly in error in refusing to grant interim relief to the petitioners. I am aware that the dispute is pending in the trial Court. However, having regard to the urgency of the nature of the relief that was prayed for, both the learned Counsel agreed that this petition should be disposed of finally on the basis of the affidavits that were filed in this Court. In the light of the said affidavits and the material that was placed before me, there is no escape from the conclusion that the petitioners had initially submitted their applications for membership to the respondent Sangh between 22nd and 28th June 1993. The respondent refused to accept the said applications and the envelopes bearing the endorsments of refusal were returned to the petitioners. Thereafter, the petitioners submitted the original applications to the Deputy Registrar between 13th and 18th August, 1993. Initially, when the petitioners applied to the respondent-Sangh between 22nd and 28th June, 1993, they had already complied with the requirement of payment of Rs. 1005/- per society towards the membership fees. They had, by way of abundant caution, submitted the xerox copies of their applications to the Deputy Registrar on 28th June, 1993. On receipt of the zerox copies from the petitioners, the Deputy Registrar had sent the same to the respondent-Sangh on 16th July, 1993 but no action was taken whatsoever by the respondent-Sangh thereafter. 20. Apart from the above, when the originals were submitted to the Deputy Registrar between 13th and 18th August, 1993, he ought to have sent them to the respondent-Sangh on or before 17th or 18th September 1993 i.e. within 30 days from 18th August, 1993. 20. Apart from the above, when the originals were submitted to the Deputy Registrar between 13th and 18th August, 1993, he ought to have sent them to the respondent-Sangh on or before 17th or 18th September 1993 i.e. within 30 days from 18th August, 1993. It was obligatory on the Deputy Registrar to forward the applications received by him by 18th August, 1993, to the respondent-Sangh within 30 days from the date of receipt. The respondent-Sangh, in turn, was obliged to communicate its decision within 60 days from the date of receipt of the applications from the Deputy Registrar. Such communication must be to the applicants petitioners. Taking any view of the matter, there is no option left but to conclude that the petitioners are entitled to the interim relief that they have prayed for. They are entitled to the interim declaration that they are deemed to have become the members of the respondent-Sangh with effect from 19th November, 1993. 21. Incidentally, it may be mentioned that the concept of deemed membership is also embodied in section 22 of the Act dealing with the procedure for enrollment of a member. Sub-section (2) of section 22 of the Act provides that when the society accepts the application for membership, it must communicate to the applicant its decision within a particular time frame. If the society does not communicate any decision to the applicant within three months from the date of the receipt of such application, the applicant shall be deemed to have been admitted as a member of the society. Sub-section (2) of section 22 may be reproduced for ready reference: "(2) Where a person is refused admission as a member of a society, the decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months from the date of receipt of the application for admission, whichever is earlier. If the society does not communicate any decision to the applicant within three months from the date of the receipt of such application, the applicant shall be deemed to have been admitted as a member of the society". As indicated above, sub-section (1A) of section 23 embodies the same principle when after refusal by the society the applicant approaches the Deputy Registrar and the Deputy Registrar has to forward the application to the society within thirty days. As indicated above, sub-section (1A) of section 23 embodies the same principle when after refusal by the society the applicant approaches the Deputy Registrar and the Deputy Registrar has to forward the application to the society within thirty days. The society, in its turn, has to communicate its decision to the applicant within sixty days, failing which the applicant is deemed to have become the member of the society, as has happened in the present case. 22. In the result, both the impugned orders are quashed and set aside. The petitioners application Exh. 5 in the trial Court for interim relief is hereby granted. Rule in the Writ Petition is made absolute in terms of prayers (a) and (b). Consequently, Exh. 5 in the trial Court, which is Exh. B to this writ petition, stands allowed. 23. I wish to make it clear that the view which I have taken is on the basis of such material as was placed before me by both the learned Counsel. The dispute is pending in the trial Court and the parties are free to lead their evidence. After this is done, the trial Court is free to come to its own conclusions. 24. Rule made absolute as above. No order as to costs. 25. Issuance of certified copy, if applied for, be expedited. Writ Petition allowed. *****