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2010 DIGILAW 55 (BOM)

SUNIL PUNDLIKRAO BHISE v. ASSISTANT REGISTRAR, CO-OPERATIVE SOCIETIES, ARVI

2010-01-12

B.P.DHARMADHIKARI

body2010
JUDGMENT :- Considering the nature of controversy and urgency, on 19-12-2009 notice for final disposal came to be issued. Contesting respondents No.2 to 9 were served by 4-1-2010 but they chose not to appear. Matter was then heard finally on 7-1-2010 and thereafter on 8-1-2010 by making rule returnable forthwith. General elections of respondent No. 3 Shriram Gharguti Paniwatap Sahakari Sanstha Maryadit (Shriram Domestic Water-distribution Co-operative Society Ltd.) were scheduled on 9-1-2010 and respondent 2 is the election officer for its conduct. Petitioner contends that nomination papers of respondents No.4 to 9 ought to have been rejected as their managing committee was superseded under section 78(1) of the Maharashtra Co-operative Societies Act, 1960 - MCS Act hereafter. Administrator of respondent 3 has placed his affidavit reply in Marathi on record on 4-1-2010 disputing the correctness of the objection raised by the petitioner. 2. It is not in dispute thathe elected managing committee of respondent No.3 Society was superseded on 27-1-2009 for not curing defects noticed in audit and for not complying with the audit objections in audit report for the period from 1997-98 to 2004-2005. It was also then found that the managing committee did not take any steps to recover the misappropriated amount of Rs. 44,407/-. Entire managing committee was found responsible for it and was removed. An administrator then came to be appointed as per law. 3. When the respondents No.4 to 9 filed their nominations in pursuance of election programme dated 17-11-2009, same were objected to by the petitioner pointing out provisos of section 78 of MCS Act and urging that these respondents were disqualified not for the term during which order appointing administrator, was made but also for next one term. His objection was rejected by respondent. No.2 on 10-12-2009 and provisions of section 152(A) MCS Act enabling him to file appeal were pointed out to him. However, as said provision contemplates appeal only against rejection of the nomination paper, this petition under Art. 226 read with 227 has been filed for quashing that order, for restraining respondents No.4 to 9 from contesting the election. 4. Adv. Chop de for petitioner has relied upon first proviso appearing after section 78(1)(b) to urge that it speaks of removal of member and hence, it also envisages removal of members i.e. more than one member. 4. Adv. Chop de for petitioner has relied upon first proviso appearing after section 78(1)(b) to urge that it speaks of removal of member and hence, it also envisages removal of members i.e. more than one member. Supersession of entire committee constitutes removal of all the members and said proviso therefore applies to it. He invites attention to other parts or proviso of section 78 to support his argument that first proviso cannot be read as restricted to section 78(1)(b) and it applies even to section 78(1)(a). Shri Kothari, Learned AGP has contended that the issue is not res integra and relied upon two judgments to urge that first proviso itself indicates that it applies to section 78(1)(b) only. Those judgments are 1996(1) MhLJ. 409 , Gurunath Madhavrao Jamalpure vs. Zilla Parishad Teacher Co-operative Credit Society and 1995(1) MhLJ. 437 , Bhujangrao Narayanrao Deshmukh vs. State of Maharashtra. In reply Adv. Chopde contended that both these judgments are delivered prior to amendments to section 78 and those amendments show the legislative intention to apply first proviso to entire section 78(1) of MCS Act. He also attempts to draw support from 2002(5) Mh.L.J. 464, Ravindra vs. Gaikwad vs. State of Maharashtra and 1996(1) MhLJ 409 , Ashok Ambadasrao Lawand vs. State of Maharashtra by urging that requirement of consultation is held mandatory not only for removal of individual but also for superseding entire body. 5. There is no dispute about the scheme of section 78(1)(a) and (b) of MCS Act as appreciated in Gurunath Madhavrao Jamalpure vs. Zilla Parishad Teacher Co-operative Credit Society and Bhujangrao Narayanrao Deshmukh vs. State of Maharashtra, 1995(1) MhLJ. 437 . The contention is restriction of application of first proviso to section 78(1)(b) thereby is not proper. It will be therefore apt to reproduce only relevant portion of section 78 here. 78. 437 . The contention is restriction of application of first proviso to section 78(1)(b) thereby is not proper. It will be therefore apt to reproduce only relevant portion of section 78 here. 78. Power of removal of Committee or member thereof - (1) If, in the opinion of the Registrar, the committee of any society or any member of such committee makes default, or is negligent in the performance of the duties imposed on it or him by this Act or the rules or the byelaws, or commits any act which is prejudicial to the interests of the society or its members, or wilfully disobeys directions issued by the State Government, or by the Registrar for the purpose of securing proper implementation of co-operative policy and development programme approved or undertaken by the State Government or is otherwise not discharging its or his Junctions properly and diligently or where a situation has arisen in which the committee or any member of such committee refuses or has ceased to discharge its or his Junctions and diligently and the business of the society has or is likely to come to a standstill, or where any member of such committee stands disqualified by or under this Act for being a member, the Registrar may, after giving the committee or the member, as the case may be, an opportunity of stating its or his objections, if any, within 15 days from the date of receipt of notice and after consultation with the federal society to which the society is affiliated, by order - (a)(i) remove the Committee, and (ii), appoint a Committee consisting of three or more members (who shall not be the members or the Committees so removed) of the society in its place, or appoint one or more Administrators who need not be members of the society, but who shall not be the members of the Committee of the society for a period not exceeding six months, which period, at the discretion of the Registrar, be extended by a further period not exceeding three months so, however, that the total period does not exceed nine months in the aggregate. (b) remove the member and appoint any person as member of such Committee in his place, or direct the society to elect or appoint a member in his place, for the remainder of the term of office of the member so removed. (b) remove the member and appoint any person as member of such Committee in his place, or direct the society to elect or appoint a member in his place, for the remainder of the term of office of the member so removed. Provided that, the member who has been so removed, shall not be eligible to be reelected, reappointed, or re-co opted, as a member of any Committee till the expiry of the period of next one full term of the Committee from the date of which he has been so removed or till such lesser period as may be laid down under the provisions of section 73-FFF or 144-E, as the case may be. [Provided further that, the supersession or removal of the committee of the District Central Co-operative Bank or the State Co-operative Bank under this sub-section shall not be done without prior consultation with Reserve Bank of India: Provided also that, the committee of a primary agricultural cooperative credit society shall not be superseded by the Registrar, except under the following circumstances, namely : - (i) if a society incurs losses for three consecutive years; or (ii) if serious financial irregularities or frauds have been identified; or (iii) if there are judicial directives to the effect; or (iv) if there is a perpetual lack of quorum: Provided also that, the members of the Board of a primary agricultural credit co-operative society which has been superseded shall not be eligible to be re-elected, re-appointed. re-nominated or re-co-opted, as a member of the committee for a period of three years from the date of supersession of the Board.]" Above portion in square bracket inserted by the Mah. 11 of 2008 w.e.f. 29-10-2007 is strongly pressed into service to argue that it effects material changes in the scheme of section 78(1) and the earlier two judgments delivered by the learned Single Judges of this Court are no longer good thereafter. Hence, it will be appropriate to scrutinize those two judgments first. 6. Gurunath Madhavrao Jamalpure vs. Zilla Parishad Teacher Cooperative Credit Society (supra) has appreciated Bhujangrao Narayanrao Deshmukh vs. State of Maharashtra (supra) [1995(1) MhLJ.]. Hence reference to former judgment which is later in point of time will be sufficient. Following observations of this Court (Learned Single Judge) there are important for present controversy : "7. Section 78 authorizes the Registrar to remove a committee or a member. Hence reference to former judgment which is later in point of time will be sufficient. Following observations of this Court (Learned Single Judge) there are important for present controversy : "7. Section 78 authorizes the Registrar to remove a committee or a member. Needless to say that two types of defaults are dealt with in this provision. The first one is the collective act or collective omission by the committee in making default or being negligent in performance of the duties imposed on them or in willfully disobeying the directions issued by the State Government or by the Registrar for the purpose of securing proper implementation of co-operative policies approved or undertaken by the State Government or in other words, not discharging the functions of the committee properly and diligently. A collective act or omission is totally different from an individual act or omission. A committee of a cooperative society, with which the management of the society vests under section 73, is a body corporate and acts as such. Sometimes, an individual member may not be a willing party with the decision taken by the committee or might be absent when a particular act or omission was done by the committee. When it is felt that the committee as a whole, has failed in its duty, it is not necessary to scan the role played by an individual in it and the Registrar will be fully justified in removing the whole committee, as empowered by section 78. 8. However, section 78 also empowers the Registrar to consider the acts and omissions by an individual, who are members of the committee and take action against them. If an individual member is found guilty of the lapses as mentioned in sub-section (l) of section 78. the Registrar may remove him. If a committee is removed, the Registrar has a power to appoint a committee consisting of three or more members who shall not be the members of the committee so removed or appoint one or more Administrators, who need not be the members of the society for a period of six months, which can be extended by further three months. The members of the committee. which is removed. are not entitled to be reappointed as the members of the committee appointed by the Registrar but they are very much eligible for reelection when the new election takes place. 9. The members of the committee. which is removed. are not entitled to be reappointed as the members of the committee appointed by the Registrar but they are very much eligible for reelection when the new election takes place. 9. In the light of this provision. we have to consider that what is the purpose and import of the proviso added below Clause (b) of sub-section (l) of section 78 by the Act No. 13 of 1994. The proviso is as follows: "Provided that, the member who has been so removed, shall not be eligible to be re-elected, re-appointed, re-nominated or re-co-opted, as a member of the committee till the expiry of the period of next one full term of the committee from the date on which he has been so removed. " Firstly, we will have to bear in mind that this is a penal provision which has to be construed strictly. This imposes an action of punishment and therefore, unless the words of the Statute are clear, we cannot bring more persons under the umbrella of this provision than is intended by the Legislature. It speaks about the single member and not of committee. It has been added just below Clause (b) of sub-section (l). which provides for removal of the member. 10. It is true that in some cases. a proviso may be applicable to whole of the section and not only to any part thereof It is also true that in cases. the proviso may be a substantive provision itself and could be read without reference to the main section. But the present case is not so. If under section 78, the Registrar removes somebody and the case is not covered by section 75-FFF, then what should be the period for which the person so removed is disqualified? It has been provided for by this proviso. If this proviso would not have been there, an interpretation would have been possible that if a member is removed by the Registrar, then he is entitled for reelection whenever such election takes place without any period of disqualification. This would have been contrary to the intention of the Legislature which is very much explicit from the scheme of the Act. as is evident from reading section 73-FFF and 78 together. Therefore. I do not find that a different view from the view taken by Mane. J.. This would have been contrary to the intention of the Legislature which is very much explicit from the scheme of the Act. as is evident from reading section 73-FFF and 78 together. Therefore. I do not find that a different view from the view taken by Mane. J.. in Bhujanzrao 's case (cited supra) is required or any reconsideration of the Bhujanzrao 's case is necessary. 11. The view that the proviso applies to the members when individually removed for individual act is not based on a mechanical approach that the proviso follows Clause (b) of sub-section (J) but it is based on the consideration that the provisions about disqualification will have to be read as a whole and the statute will have to be put to a homogeneous construction. The purposeful reading of the proviso impugned brings one to an inevitable result that it was provided for a different purpose than was taken care in Clause (a)(ii) of sub-section (1) of section 78. which is disqualifying the members of the erstwhile committee from being nominated as the members of the committee appointed by the Registrar. The Legislature thought that when an individual member is removed for his act or omission. he will have to be kept away from the co-operative movements for a certain period and the period has been prescribed in the proviso. 7. Logic or reasons herein are challenged because of subsequent amendments to section 78 and on no other ground. The first proviso as in force when the judgment in case of Gurunath (supra) [ 1996(1) MhLJ. 409 J was delivered is already appearing in paragraph 9 of said judgment reproduced above. The words "or till such letter period as may laid down under the provisions of section 73-FFF or 144-E, as the case may be." came to be added at its end by substituting entire proviso by Maharashtra Amending Act 7 of 1997. It is apparent that addition of these words has not made any material alteration to warrant any change in approach towards its interpretation. Second proviso or "further proviso" added after this again shows that it speaks of supersession of the entire committee of particular type of societies named therein and makes a special provision for consultation with Reserve Bank of India in that contingency. Second proviso or "further proviso" added after this again shows that it speaks of supersession of the entire committee of particular type of societies named therein and makes a special provision for consultation with Reserve Bank of India in that contingency. It cannot be interpreted to mean that consultation with Reserve Bank of India is obligatory in case of supersession of other type of societies also dealt with under section 78(1 )(a). On the contrary it expressly uses the words to restrict it to removal of entire committee of District Central Co-operative or State Co-operative Banks. This added provision beginning with words "provided further that" therefore again restricts its operation to contingency specified therein and is not of general application. Said proviso could have been inserted after existing proviso to section 78(1)(a) but then express words employed therein restrict it to collective action under that part and its placement below section 78( 1 )(b) does not in any way alter the legislative scheme. Amendment thereafter beginning with "provided also that" in relation to primary agricultural credit co-operative societies is again very clear and it applies only in contingencies specified therein. Legislature has thereby enacted special provision and procedure for supersession of managing committees of primary agricultural credit co-operative societies. It also prescribes a separate and different period of 3 years disqualifies for election a member of such superseded managing committee. Thus for collective default also expressly the individual has been disqualified from contesting the election for 3 years from the date of supersession of the Board. This is deviation expressly made by the legislature and therefore it constitutes a special provision. It only shows that where legislature wanted to so disqualify an individual member for collective default, it has made provision therefor. It could have enacted similar amendment and changed express words of first proviso to section 78( 1 )(b) to provide disqualification for individual members in case of collective responsibility. Section 78(lA) of MCS Act imposing restriction on member's right to resign is again totally irrelevant for present purposes. Efforts of Adv. Chopde to distinguish earlier 2 judgments on strength of these subsequent provisions added by amendments cannot be countenanced. Language of each provision is unambiguous and they operate in distinct field earmarked for them by the legislature. Section 78(lA) of MCS Act imposing restriction on member's right to resign is again totally irrelevant for present purposes. Efforts of Adv. Chopde to distinguish earlier 2 judgments on strength of these subsequent provisions added by amendments cannot be countenanced. Language of each provision is unambiguous and they operate in distinct field earmarked for them by the legislature. It is apparent that they have no bearing on each other and any attempt to artificially stretch them to reach the goal desired by Ad". Chopde militates with express words thereof and is totally misconceived and unsustainable. Section 78 itself is a penal provision necessitating strict interpretation. Intention of imposing a disqualification for next term also therefore must be clearly spelt out. In Gurunath Madhavrao lama/pure vs. Zilla Parishad Teacher Co-operative Credit Society (supra) [ 1996(1) Mh.L.J 409 J reconsideration of view in Bhujangrao Narayanrao Deshmukh vs. State of Maharashtra (supra) [ 1995(1) Mh.L.J 437 J was sought and that request was rightly rejected. Scheme of section 78 shows that collective defaults and individual wrongs are separately dealt with there and legislative intent to provide different consequences is apparent. Supersession/removal of managing committee and removal of a member/s are mutually exclusive concepts dealt with accordingly thereunder by the legislature. Nothing could be pointed out to ignore the words "the member who has been so removed" used in first proviso of section 78(1 )(b). The underlined words unerringly indicate removal for individual faults under that part i.e. section 78(1 )(b) of the MCS Act. It is to be noted that there is no and there carmot be any challenge to legislative wisdom in these proceedings. 8. Ravindra vs. Gaikwad vs. State of Maharashtra and Ashok Ambadasrao Lawand vs. State of Maharashtra (both supra) consider requirement of consultation with federal society due to express language of section 78(1) itself and does not consider the effect of subsequent amendments. These rulings are therefore irrelevant here. As the entire managing committee of respondent 3 Society was superseded vide order dated 27-1-2009, bar on contesting election for next one full term prescribed by first proviso to section 78( 1 )(b) is not applicable in present case. No case is made out to reconsider the law as already settled on this point. 9. No interference is warranted in the impugned order. Writ petition is therefore dismissed. Rule discharged with no order as to costs. Petition dismissed.