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2020 DIGILAW 840 (BOM)

Dughganga Sahakari Dudh Utpadak Sangh Maryadit v. Divisional Joint Registrar, Pune

2020-08-03

N.R.BORKAR, UJJAL BHUYAN

body2020
1. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 16.06.2020 passed by the Divisional Joint Registrar of Co-operative Societies (Dairy), Pune Division, Pune i.e., respondent No. 1 (exhibit-I to the writ petition). 2. In exercise of powers under section 102(1)(c)(ii) and (iv) of the Maharashtra Co-operative Societies Act, 1960, respondent No. 1 has passed the impugned order styled as 'interim order' for liquidation of Dudhganga Sahakari Dudh Utpadak Sangh Maryadit and further in exercise of powers under section 103(1) of the aforesaid Act has appointed Shri J.P. Gavade, Assistant Registrar of Co-operative Societies, Taluka Indapur in the district of Pune i.e., respondent No. 2 as the liquidator of Dughganga Sahakari Dudh Utpadak Sangh Maryadit. 3. We have heard Mr. Surel Shah, learned counsel for the petitioner and Mr. A. Kumbhakoni, learned Advocate General, Maharashtra assisted by Mr. Kulkarni and Mr. Pabale, learned AGPs for the respondents-State. 4. Dughganga Sahakari Dudh Utpadak Sangh Maryadit is the petitioner in this case and is a co-operative society dealing with dairy and dairy products. It is registered under the provisions of Maharashtra Co-operative Societies Act, 1960. It will hereinafter be referred to as the 'petitioner society'. 5. According to the petitioner society, it has been complying with the terms and conditions of its registration which it continues to do till date. On an earlier occasion, respondent No. 1 had passed an order on 24.08.2016 for winding up of the petitioner society. Against the aforesaid order, petitioner society preferred appeal under section 104 of the Maharashtra Co-operative Societies Act, 1960 (briefly "the Act" hereinafter) before the State Government. The departmental minister acting as the appellate authority had allowed the appeal of the petitioner society vide the appellate order dated 12.05.2017 and set aside the order of liquidation. 6. Petitioner society has asserted that after the appellate order was passed, it has complied with the terms and conditions of the said order. 7. All on a sudden it received a show cause notice from respondent No. 1 on 19.05.2020 with the allegation that petitioner society has not complied with the order dated 12.05.2017; as per report of the District Special Auditor dated 10.06.2019, petitioner society has not started its functioning of collection of milk. It was alleged that under a scheme, a sum of Rs. It was alleged that under a scheme, a sum of Rs. 462.76 lakhs was sanctioned to the petitioner society out of which Rs. 395.42 lakhs was disbursed to the petitioner society. Despite the above, petitioner society had not started functioning and had not collected milk. Therefore, respondent No. 1 stated that he proposed to take action for liquidation of petitioner society under section 102(1)(c) (ii) and (iv) of the Act. 8. It is stated that petitioner society sought for time to submit reply. Subsequently, reply was submitted on 15.06.2020 through the lawyer of the petitioner society. It was asserted that petitioner society was very much functional and that the terms and conditions imposed vide the appellate order dated 12.05.2017 were complied with. That apart, respondent No. 1 was informed that petitioner society had tied up with "Amul" a renowned dairy products manufacturing society for collection of milk. Respondent No. 1 was further informed that in view of COVID-19 pandemic, milk has been declared as an essential service. Therefore, if liquidator is appointed, it would adversely affect a large number of members of the petitioner society. Stating that notwithstanding famine in Indapur Taluka, petitioner society was very much functional and collecting milk. In that view of the matter, petitioner society prayed for withdrawal of the notice. Be it stated that the aforesaid reply was sent by email on 15.06.2020 whereby petitioner society sought for personal hearing and also sought for placing on record certain documents at the time of such hearing. 9. On 17.06.2020, counsel of petitioner society submitted documents before respondent No. 1 pertaining to a compromise that was arrived at between the petitioner society and its workmen regarding acceptance of arrears due as well as the agreement entered into with Amul. 10. However, before the submission of documents as above on 17.06.2020, respondent No. 1 had already passed the impugned interim order dated 16.06.2020 holding that petitioner society was liable for liquidation and therefore, in exercise of powers conferred under section 102(1)(c)(ii) and (iv) of the Act, initiated the process for liquidation of the petitioner society and further in exercise of powers under section 103(1) of the Act appointed respondent No. 2 as the liquidator of petitioner society. By the said order, petitioner society was directed to file its reply to the interim order within one month. 11. By the said order, petitioner society was directed to file its reply to the interim order within one month. 11. Aggrieved by the aforesaid order dated 16.06.2020, petitioner society has preferred the present writ petition assailing the legality and validity thereof. 12. It is contended that there is no provision for appeal under the Act against the impugned order. Impugned order is ex-facie illegal since none of the conditions contemplated by section 102(1)(c)(ii) and (iv) of the Act have been infringed. Impugned order has been passed in breach of the principles of natural justice and for extraneous reasons in as much as the present departmental minister is a political opponent of Shri. Harshwardhan Patil, founder member of petitioner society. Entire action of liquidation and winding up of the petitioner society has been initiated at the instance of the departmental minister. 13. This Court by order dated 19.06.2020 had directed the liquidator not to take over charge of the petitioner society till 25.06.2020. On 23.06.2020, this Court continued the interim order passed on 19.06.2020 till disposal of the writ petition. Matter was thereafter heard on 13.07.2020 when it was reserved for judgment. 14. Respondents in their common affidavit in reply has taken the stand that the present action taken against the petitioner society is a continuation pursuant to the directions of the departmental minister vide the appellate order dated 12.05.2017. It is stated that the present is not a fresh case but consequential post order dated 12.05.2017 whereafter reference has been made to the operative part of the said order. It is stated that there was no report of compliance for a long time and hence Special Auditor, Pune had visited the office of the petitioner society and found that there was no compliance to the order dated 12.05.2017. Though the auditor had called for the related documents in respect of collection of milk but the same were not provided. In such circumstances, show cause notice dated 19.05.2020 came to be issued. Thereafter in the local enquiry, it was revealed that collection of milk had stopped completely. Being satisfied, respondent No. 1 took the view that petitioner society was playing with the authorities and trying to prolong the outcome of the proceedings. In such circumstances, show cause notice dated 19.05.2020 came to be issued. Thereafter in the local enquiry, it was revealed that collection of milk had stopped completely. Being satisfied, respondent No. 1 took the view that petitioner society was playing with the authorities and trying to prolong the outcome of the proceedings. He further came to the conclusion that petitioner society could not handle the institution properly when large sum of government money in the form of subsidies were availed of by the petitioner society. 14.1. It is stated that since petitioner society was not functioning and was not collecting milk, show cause notice was issued on 19.05.2020. Counsel of petitioner society through email sought for time on 05.06.2020 to file reply, which was granted. Thereafter, reply was submitted on 15.06.2020. However, not a single document was annexed thereto to show compliance of the earlier order passed in appeal. It is stated that principles of natural justice have been followed by the authority by granting sufficient opportunity of hearing to the petitioner society way back in the year 2017 when the appeal of the petitioner society was heard and allowed by setting aside the order of appointing liquidator subject to fulfillment of the conditions mentioned therein. 14.2. Referring to the document relating to compromise between petitioner society and the workmen, it is stated that it does not show any payment made by the petitioner society. Mentioning that petitioner society had not complied with a single direction in terms of the appellate order dated 12.05.2017, it is stated that petitioner society was not at all functional during the last three years. Though petitioner society has come up with the version that milk collection again started in the year 2017, no document to that effect has been submitted. Verification report dated 10.06.2019 consequent upon joint inspection carried out by District Dairy Development Officer, Pune and Assistant Registrar of Cooperative Societies (Dairy), Pune falsifies the claim of collection of milk by the petitioner society in the year 2019. Allegation of the petitioner society that impugned action is motivated being carried out under the diktat of the present Minister for Dairy Development, Government of Maharashtra has been denied and it is stated that the impugned action has been taken in accordance with law. Allegation of the petitioner society that impugned action is motivated being carried out under the diktat of the present Minister for Dairy Development, Government of Maharashtra has been denied and it is stated that the impugned action has been taken in accordance with law. Finally, it is stated that the impugned order being an interim order, no final adjudication has been made but only the procedure for winding up of the petitioner society has been started. Answering respondents have stated that they would provide another opportunity of hearing which they are bound to before passing final order. 14.3. In the above circumstances, respondents contend that there is no merit in the writ petition and seek its dismissal. 15. In its rejoinder affidavit, petitioner society has stated that attempt by the respondents to contend that notice for liquidation was for non-compliance of the appellate order dated 12.05.2017 is not only untenable but is contradictory to the report dated 10.06.2019 which records that the petitioner society is functioning but collection of milk is less. Therefore, invocation of power under section 102(1)(c)(ii) is not warranted as the said clause can only be invoked if a co-operative society has ceased to function. It is also stated that section 102(1)(c)(iv) of the Act would also not be applicable as the show cause notice dated 19.05.2020 does not refer to any contingency prescribed thereunder. 15.1. Further stand of the petitioner society is that the report dated 10.06.2019 does not find mention either in the show cause notice or in the impugned order. Therefore, the same cannot be relied upon. That apart, a copy of the said report was not furnished to the petitioner society and therefore, petitioner society had no opportunity to contest or controvert the same. Besides, the said report is a visit report but no intimation was ever given to the petitioner society about such visit and therefore, petitioner society had no knowledge of such visit and the consequential report. Referring to the contentions advanced by the respondents that petitioner society did not annex any supporting documents with its show cause reply, it is stated that if respondent No. 1 was not satisfied thereby, he could have sought for such documents which he did not do. Respondent No. 1 acted in undue haste and passed the impugned order just the next day of receiving the show cause reply. Respondent No. 1 acted in undue haste and passed the impugned order just the next day of receiving the show cause reply. In the process, no personal hearing was granted to the petitioner society though it had specifically asked for the same. 16. Mr. Shah, learned counsel for the petitioner submits that the impugned order is in violation of the principles of natural justice. Referring to the provisions contained in section 102(1)(c) of the Act, he submits that even though an order passed thereunder is termed as an 'interim order', the same entails adverse civil consequences on the society concerned. Though the section does not provide for any notice or hearing prior to passing of such order termed and styled as 'interim order', a Division Bench of this Court in Chandrapur Zilla Sahakari Krushi and Gramin Bahuudeshiya Development Bank Limited Vs. State of Maharashtra, 2004 (1) Mh. L.J. 232 has held that principles of natural justice are implicit and must be read into the aforesaid provision. Further contention of Mr. Shah is that the conditions precedent for invocation of power under section 102(1)(c)(ii) and (iv) are totally absent in the present case. Had an opportunity of hearing been granted to the petitioner society, it would have satisfied respondent No. 1 that the basic jurisdictional facts are absent in the present case. Therefore, the impugned order has been passed without jurisdiction. 17. On the other hand, Mr. Kumbhakoni, learned Advocate General submits that the impugned order is only an interim order. Before passing the final order, petitioner society will certainly be heard because that is the statutory requirement. Terming the present petition as premature, he submits that in the ultimate analysis, respondent No. 1 may either confirm the interim order which has been presently impugned or may vacate the same. Therefore, petitioner should avail the opportunity of hearing and make submissions before passing of final order by respondent No. 1. 17.1. Responding to the submissions of Mr. Shah placing reliance on Chandrapur (supra), he submits that he has reservations about the correctness of the ratio laid down in the said judgment and Court may consider referring it to a Larger Bench if the Court agrees with his submissions. Alternatively, he submits that in Chandrapur (supra), by one interim order, that too passed ex-parte, a number of societies were ordered to be wound up. Alternatively, he submits that in Chandrapur (supra), by one interim order, that too passed ex-parte, a number of societies were ordered to be wound up. It was in that context that this Court held that even if such an order is construed to be an interim order, principles of natural justice could not be dispensed with. However, in the present case, show cause notice was issued to the petitioner society and its reply was considered before passing the impugned interim order. Therefore, present is not a case where it can be contended that there has been violation of the principles of natural justice. That apart, he submits that principles of natural justice are flexible principles and cannot be put in a strait jacket. In an appropriate case, it may be permissible for the authority to dispense with pre-decisional notice and hearing. In support of such submissions, learned Advocate General has placed reliance on two decisions of the Supreme Court, viz., M.C. Mehta Vs. Union of India, (1999) 6 SCC 237 and Dharampal Satyapal Limited Vs. Deputy Commissioner of Central Excise, Guwahati, (2015) 8 SCC 519 . 18. In his reply submissions, Mr. Shah submits that it is not open to respondent No. 1 to initiate suo motu liquidation proceeding on the ground of non-compliance of the appellate order dated 12.05.2017. If the respondents are aggrieved by such non-compliance, remedy lies elsewhere under different provisions of the Act but certainly not under section 102(1)(c) of the Act. 19. Submissions made by learned counsel for the parties have been considered. Also perused the materials on record. 20. Before proceeding further, it would be apposite to examine section 102 of the Act. Section 102 finds place in Chapter X which deals with liquidation. For proper appreciation, section 102 is extracted hereunder in its entirety: "102. 19. Submissions made by learned counsel for the parties have been considered. Also perused the materials on record. 20. Before proceeding further, it would be apposite to examine section 102 of the Act. Section 102 finds place in Chapter X which deals with liquidation. For proper appreciation, section 102 is extracted hereunder in its entirety: "102. Winding up-(1) If the Registrar: (a) after an inquiry has been held under section 83 or an inspection has been made under section 84 or on the report of the auditor auditing the accounts of the society, or (b) on receipt of an application made upon a resolution carried by three-fourths of the members of a society present at a special general meeting called for the purpose, or (c) of his own motion, in the case of a society which- (i) has not commenced working, or (ii) has ceased working, or (iii) possesses shares or members deposits not exceeding five hundred rupees, or (iv) has ceased to comply with any conditions as to registration and management in this Act or the rules or the bye laws, is of the opinion that a society ought to be wound up, he may issue an interim order directing it to be wound up. (2) A copy of such order made under sub-section (1) shall be communicated, in the prescribed manner, to the society calling upon it to submit its explanation to the Registrar within a month from the date of the issue of such order, and the Registrar, on giving an opportunity to the society and to the creditors of the society, if any, of being heard, may issue a final order, vacating or confirming the interim order." 20.1. Since it is the case of the respondents that the impugned order has been passed under section 102(1)(c)(ii) and (iv), it may not be necessary to delve into the circumstances covered by clauses (a) and (b). Since it is the case of the respondents that the impugned order has been passed under section 102(1)(c)(ii) and (iv), it may not be necessary to delve into the circumstances covered by clauses (a) and (b). If the said two clauses are excluded, we find that what section 102(1)(c) contemplates is that if the Registrar of his own motion in the case of a society which has not commenced working or has ceased working or possesses shares or members' deposits not exceeding five hundred rupees or has ceased to comply with any conditions as to registration and management as provided in the Act or the rules or the bye-laws, is of the opinion that a society ought to be wound up, he may issue an 'interim order' directing it to be wound up. Adverting specifically to the facts of the present case where respondent No. 1 has invoked clause (c)(ii) and (iv) of sub-section (1) of section 102, what therefore falls for consideration is that the Registrar must suo motu form an opinion that a society should be wound up because it has ceased working or it has ceased to comply with any conditions as to registration and management as provided under the Act or the rules and bye-laws framed thereunder then he may issue an 'interim order' directing the society to be wound up. As per sub-section (2), a copy of the order made under sub-section (1) shall be communicated to the society in the prescribed manner calling upon it to submit its explanation to the Registrar within a month from the date of issue of such order and the Registrar, after giving an opportunity to the society and to the creditors of the society, if any, of being heard, may issue a final order vacating or confirming the interim order. 20.2. A literal reading of the above two sub-sections would go to show that while there is no provision for notice and hearing before passing an interim order under sub-section (1), sub-section (2) specifically provides that copy of such an order should be served upon the society in question in the prescribed manner giving it an opportunity to submit its explanation within one month and thereafter on hearing the society and its creditors, if any, Registrar may pass the final order which may either vacate the interim order passed under sub-section (1) or confirm the same. Therefore, while no pre-decisional notice or hearing is provided in sub-section (1), the same is specifically provided in sub-section (2). 21. Before proceeding further, we may also refer to section 103 of the Act. Section 103 is extracted hereunder: "103. (1) When an interim order is passed under the last preceding section or a final order is passed under that section, for the winding up of a society, the Registrar may in accordance with rules, appoint a person to be Liquidator of the society, and fix his remuneration. (2) On issue of the interim order, the officers of the society shall hand over to the Liquidator the custody and control of all the property, effects and actionable claims to which the society is or appears to be entitled and, of all books, records and other documents pertaining to the business of the society and, shall have no access to any of them. (3) When a final order is passed confirming the interim order, the officers of the society shall vacate their offices, and while the winding up order remains in force the general body of the society shall not exercise any powers. (4) The person appointed under this section as Liquidator shall, subject to the general control of the Registrar, exercise all or any of the powers mentioned in section 105. The Registrar may remove such person and appoint another in his place, without assigning any reason. (5) The whole of the assets of the society shall on the appointment of Liquidator under this section vest in such Liquidator, and notwithstanding anything contained in any law for the time being in force, if any immovable property is held by a Liquidator on behalf of the society, the title over the land shall be complete as soon as the mutation of the name of his office is effected, and no Court shall question the title on the ground of dispossession, want of possession or physical delivery of possession. (6) In the event of the interim order being vacated, the person appointed as Liquidator shall hand over the property, effects and actionable claims and books, records and other documents of the society to the officers who had delivered the same to him. (6) In the event of the interim order being vacated, the person appointed as Liquidator shall hand over the property, effects and actionable claims and books, records and other documents of the society to the officers who had delivered the same to him. The acts done, and the proceedings taken by Liquidator, shall be binding on the society, and such proceedings shall, after the interim order has been cancelled under the preceding section, be continued by the officers of the society." 21.1. As per sub-section (1) of section 103, when an interim order is passed under section 102(1) or a final order is passed under section 102(2) for winding up of a society, the Registrar may appoint a person to be the liquidator of the society and fix his remuneration. Sub-section (2) says that once an interim order is passed, officers of the society shall handover the custody and control of all the property, effects and actionable claims to which the society is entitled, of all books, records and other documents pertaining to the business of the society to the liquidator. Once those are handed over to the liquidator, officers of the society shall have no access to any of them. Sub-section (5) says that on appointment of the liquidator, the whole of the assets of the society shall vest in such liquidator. Though under sub-section (6) it is provided that if the interim order passed under section 102(1) is subsequently vacated, the liquidator shall handover the property, effects and actionable claims and books, records and other documents of the society to the officers who had delivered the same to him, the acts done and the proceedings taken by the liquidator shall be binding on the society and even if the interim order is cancelled, the same shall be continued by the officers of the society. 22. Though section 104 provides for filing of appeal against final order of winding up made under section 102(2), there is no provision for filing of appeal against an interim order passed under section 102(1). 23. Section 102 was examined in detail by a Division Bench of this Court in Chandrapur (supra). In that case, certain categories of cooperative banks were ordered to be liquidated vide interim order passed under section 102(1)(c)(iv) of the Act. 23. Section 102 was examined in detail by a Division Bench of this Court in Chandrapur (supra). In that case, certain categories of cooperative banks were ordered to be liquidated vide interim order passed under section 102(1)(c)(iv) of the Act. When this was challenged before a Single Bench, the writ petitions were dismissed whereafter the matter was taken up in appeal. Division Bench noticed that there was no statutory provision which would require the Registrar to hear a society before passing of an interim order under section 102(1) of the Act though it was statutorily provided for before passing of final order under section 102(2). The crucial issue was whether the Registrar could take such a drastic decision of initiating liquidation proceeding even if termed as interim without hearing the society? After examining the provisions of section 102 as well as section 103 of the Act, Division Bench held that section 102(1) is a drastic and draconian provision empowering the Registrar to issue an order for winding up of a society which order is termed as an 'interim order'. It was further noticed that consequence of such an interim order was to handover virtually the entire society to the liquidator. Posing a question to itself as to whether the Legislature had intended to put such a draconian power to wind up or wipe out a society in the hands of the Registrar without hearing the society before passing an 'interim order', the consequence and effect of which is not less injurious or harmful than the final order, it was opined that the answer to such a question would have to be in the negative. It was held that before passing an order styled as 'interim order' affecting crystallized and vested rights, pre-decisional hearing would be necessary as such an order would have immediate and grave prejudicial repercussions on the person concerned. Therefore it was held that a pre-decisional hearing must be read into section 102(1). Any interim order to wind up an existing and running establishment or undertaking would amount to sounding a death bell and nothing less; the entire business and affairs of the society in respect of which an interim order to wind up has been passed would come to a standstill as the consequent steps would be to handover the society including its property and record to the liquidator. In such circumstances, it was held and declared that principles of natural justice cannot be dispensed with before taking an action under section 102(1)(c) of the Act. Registrar is duty bound to grant hearing to the concerned society against which an interim order of winding up is proposed or contemplated. Having declared so, Division Bench again posed a question to itself as to how the Registrar can act "on his own" unless he has the requisite material before him and puts the material gathered by him to the concerned society? Division Bench distinguished between the scenarios contemplated by clauses (a) and (b) on the one hand and clause (c) on the other hand of sub-section (1) of section 102. Under section 102(1)(a) and (b), Registrar has tangible material collected from the society itself under an enquiry in terms of section 83 or section 84 of the Act which sections provide for full-fledged hearing. Coming to clause (c) which empowers the Registrar to take suo moto action, Division Bench held that all the fact situations mentioned therein from the very nature do warrant hearing the society before passing of 'interim order' to wind up. Principles of natural justice are implicit in the provisions of section 102, particularly in section 102(1)(c) of the Act. 24. Upon thorough consideration of the provisions contained in section 102(1)(c) read in conjunction with section 103 of the Act, we are in respectful agreement with the views expressed in Chandrapur (supra). Though an order passed under sub-section (1) of section 102 is termed as an 'interim order', considering the consequences that would befall a society against which such an order has been passed having regard to the mandate of section 103 of the Act there can be no manner of doubt that principles of audi alteram partem has to be read into in the said provision because an order passed thereunder entails adverse civil consequences on the society in question. 25. The two decisions relied upon by learned Advocate General are clearly distinguishable in the facts of the present case. In M.C. Mehta (supra), Supreme Court held that if on admitted or indisputable factual position, only one conclusion is possible and permissible, court need not issue a writ merely because there is violation of the principles of natural justice. 25. The two decisions relied upon by learned Advocate General are clearly distinguishable in the facts of the present case. In M.C. Mehta (supra), Supreme Court held that if on admitted or indisputable factual position, only one conclusion is possible and permissible, court need not issue a writ merely because there is violation of the principles of natural justice. That apart, court would refuse to exercise its discretion of striking down the order under impugnment under Articles 32 or 226 if such striking down will result in restoration of an illegal order. In that case, it was found on admitted and indisputable facts that grant of a writ would be in vain. Again in Dharampal Satypal Limited (supra), Supreme Court held that even though in a case there is violation of the principles of natural justice, it may by itself not lead to a conclusion that the order under challenge is always null and void. Validity of the order has to be decided on the touchstone of prejudice. Ultimate test is always the same, namely, the test of prejudice or the test of fair hearing. In the facts of that case, it was found that issuance of notice was totally futile in view of the law laid down on the particular point in R.C. Tobacco (P) Ltd. Vs. Union of India, (2005) 7 SCC 725 . That being the position it was held that non-issuance of notice did not result in any prejudice to the appellant. 26. While at natural justice, we may remind ourselves that rules of natural justice are to be followed for doing substantial justice. If an action results in infringement of any civil rights or liberties or leads to any adverse civil consequences it must be preceded by observance of the principles of natural justice. Applicability of principles of natural justice is not dependent upon any statutory provision. No decision prejudicial to a party should be taken without affording an opportunity of hearing or supplying the material which is the basis for the decision. 27. Adverting to the impugned order, we find that the show cause notice was issued on 19.05.2020 to which petitioner submitted reply on 15.06.2020. Immediately on the next day, i.e., on 16.06.2020, the impugned order was passed. Impugned order says that though the petitioner had submitted its reply, no documents were annexed with it. 27. Adverting to the impugned order, we find that the show cause notice was issued on 19.05.2020 to which petitioner submitted reply on 15.06.2020. Immediately on the next day, i.e., on 16.06.2020, the impugned order was passed. Impugned order says that though the petitioner had submitted its reply, no documents were annexed with it. It is stated that though reference was made to an affidavit regarding payment of dues to the workmen, neither copy of such affidavit nor any other evidence were produced. Regarding agreement entered into with Amul, again it is stated that no evidence to that effect was produced. On that basis, it was held that the written reply was not at all satisfactory and that liquidation process should be initiated. 28. On due consideration, we are of the view that having regard to the stand taken by the petitioner society in its show cause reply, if respondent No. 1 wanted or desired further materials to be considered in support of the contentions, it could have very well sought for the same from the petitioner society. After all directing liquidation of a society is a drastic measure and ordinarily should be taken only as the last option. Non-seeking of materials/evidence from the petitioner society more so in the context of the petitioner society seeking a hearing does not appear to be justified; rather it appears that impugned action has been taken in undue haste without calling for and examining the related materials. 29. In Zenit Metaplast Private Limited Vs. State of Maharashtra, (2009) 10 SCC 388 , Supreme Court observed that every action of the state or its instrumentalities should not only be fair, legitimate and above-board but should be without any affection or aversion. It should neither be suggestive of discrimination nor even apparently give an impression of bias, favouritism and nepotism. Anything done in undue haste can also be termed as arbitrary and cannot be condoned in law. 30. In the reply affidavit, stand taken by the respondents is that the impugned action is in continuation of the previous appellate order; it is not a fresh case. Let us examine the correctness of this stand. 31. As already noted, petitioner society was earlier subjected to a final order dated 24.08.2016 directing its winding up. This was put to challenge in appeal filed under section 104 of the Act. Let us examine the correctness of this stand. 31. As already noted, petitioner society was earlier subjected to a final order dated 24.08.2016 directing its winding up. This was put to challenge in appeal filed under section 104 of the Act. By the appellate order dated 12.05.2017, appellate authority held that despite the shortcomings in the petitioner society, it was necessary to have an effective society to develop the milk business in Indapur Taluka, to strengthen the primary societies, to increase their numbers and to provide them guidance. Therefore, appellate authority took the view that petitioner society should be given another opportunity in the interest of milk business in Indapur Taluka. The appeal of the petitioner society was allowed subject to the following terms and conditions: "a. The appellant to clear entire dues of the existing and retired employees within 2 months from the date of order. b. The milk collection of the society shall increase to 40,000 litres per day within three months from the date of order. c. To increase the primary dairy societies within the Taluka and to take concrete steps to start the closed down primary dairy societies which have gone in liquidation/winding up. d. The society shall clear all its other legally tenable/ statutory dues demanded from the society within six months from the date of order. e. The affairs of the society shall be strictly carried out in accordance with the Act, Rules and the registered bye-laws of the society. f. If there are no satisfactory compliances of the above directions, the society shall note that it be liable for appropriate action." 31.1. Consequently, the final order dated 24.08.2016 was set aside. 32. When an order is set aside by a superior authority, the consequence thereof is that it becomes inoperative; it is rendered null and void; it is erased from the record book as if it was never passed. Advanced Law Lexicon, 3rd Edition, Reprint 2007 defines the expression 'set-aside' to mean to annul, quash, render void or nugatory. Similarly, in Supreme Court on Words and Phrases, Second Edition, it is stated that the ordinary meaning of the words 'set-aside' is to revoke or quash, the effect of which is to make the interim order inoperative or non-existent. 33. Advanced Law Lexicon, 3rd Edition, Reprint 2007 defines the expression 'set-aside' to mean to annul, quash, render void or nugatory. Similarly, in Supreme Court on Words and Phrases, Second Edition, it is stated that the ordinary meaning of the words 'set-aside' is to revoke or quash, the effect of which is to make the interim order inoperative or non-existent. 33. Therefore, to contend that the impugned order dated 16.06.2020 is a continuation of the previous proceeding which led to passing of final order dated 24.08.2016 is clearly an untenable proposition and certainly does not stand to reason. When respondent No. 1 says that the terms and conditions of the appellate order dated 12.05.2017 have not been complied with and for that reason he seeks to invoke the suo motu jurisdiction under section 102(1)(c), he has firstly to clearly state and point out as to what are the non-compliances and to what extent. Only after the non-compliances or the extent thereof are put forward by the Registrar or by his nominated officer then only the society in a question can be expected to respond to the same. Otherwise it will end up being a roving and fishing enquiry which is not permissible. In any case, to arrive at the finding that a society has ceased working which is the condition stipulated in section 102(1)(c)(ii) or that it has ceased to comply with any condition as to registration and management which is the condition contained in section 102(1)(c)(iv), specific facts and instances must be brought on record and thereafter the concerned society should be called upon to controvert. This is conspicuously absent in the present case. 34. For the aforesaid reasons, we find considerable merit in the writ petition. Following the discussions made above, impugned order dated 16.06.2020 passed by respondent No. 1 cannot be sustained being wholly untenable in law as well as on facts. The same is accordingly set aside and quashed. 35. Writ petition is allowed but there shall be no order as to costs. 36. This order will be digitally signed by the Private Secretary of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.