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2022 DIGILAW 40 (BOM)

Diksha D. Talavnekar v. Registrar of Coop. Societies

2022-01-04

MANISH PITALE

body2022
JUDGMENT : 1. These Writ Petitions give rise to a common question raised on behalf of the Petitioners as regards orders passed by the Cooperative Tribunal under the Goa Co-operative Societies Act, 2001. The nomination papers of disputants who had approached the Tribunal were held to be wrongly rejected by the Returning Officer. As a consequence, the election of the petitioners stood set aside and directions were issued in each of these cases to the Registrar of the Co-operative Societies to conduct fresh elections. On the petitioners approaching this Court, interim orders were passed in their favour, as a consequence of which they have continued as elected members of the Board of Directors of the Sahakar Urban Credit Co-operative Society Ltd. Rule was granted in all these Petitions. 2. It is relevant that the Petitioners before this Court stood elected unopposed and, therefore, the question of rejection of nomination papers of the contesting Respondents in these Writ Petitions assumes significance. The said question revolves around the interpretation of bye-law 25(i) of the Bye-laws of the Respondent-Sahakar Urban Credit Co-operative Society Ltd. The nomination papers of the contesting Respondents were rejected by the Returning Officer on the ground that they did not comply with the requirement of the said bye-law, rendering them ineligible to contest in the election to the Board of Directors of the said Credit Co-operative Society. The Tribunal in the Judgments and orders impugned in these Writ Petitions held that the Returning officer was not justified in rejecting the nomination papers of the contesting Respondents. On this basis, the disputes filed by the contesting Respondents stood partly allowed and the Orders of the Returning officer were set aside. Consequently, the Orders declaring the Respondents elected unopposed also stood set aside and a direction was given for conducting fresh elections of the said Society. 3. The Petitioners, as well as the contesting Respondents, are members of the shareholder Societies of the aforesaid Respondent-Credit Co-operative Society. They sought to contest election to the Board of Directors of the said Credit Co-operative Society and hence filed nomination papers for the same. In terms of the election program, the Returning Officer took up the scrutiny of the nomination papers of the said candidates. They sought to contest election to the Board of Directors of the said Credit Co-operative Society and hence filed nomination papers for the same. In terms of the election program, the Returning Officer took up the scrutiny of the nomination papers of the said candidates. The nomination papers of the contesting Respondents were rejected on the ground that they did not satisfy the requirement of bye-law 25(i) of the Credit Cooperative Society and hence they were ineligible to contest the elections. 4. Aggrieved by the rejection of their nomination papers, the contesting Respondents filed disputes before the aforesaid Cooperative Tribunal under Section 83 of the said Act. As noted above, the disputes were partly allowed by holding that the nomination papers could not have been rejected and that there was sufficient compliance with the aforesaid bye-law on the part of the contesting Respondents. 5. Mr. G. Panandikar, learned Counsel appearing for the Petitioners in these Writ Petitions, submitted that the Tribunal in the present case committed a grave error in reading and interpreting the bye-law 25(i) of the said Bye-laws while ignoring the relevant statutory provisions of the aforesaid Act. It was submitted that the Order of the Tribunal was rendered perverse for the reason that the specific contentions raised on behalf of the Petitioners in the context of the aforesaid statutory provisions were recorded in the impugned Orders, but they were not dealt with by the Tribunal. It was submitted that Section 60(3)(c) of the said Act specifically provided that, for a person to be eligible for being chosen as a member of the Board of Directors of a Society like the Respondent-Credit Co-operative Society, he was required to have availed service for three years in the preceding period of five years of the Society to a minimum level as specified in the Bye-laws. It was submitted that therefore, bye-law 25(i) of the aforesaid Bye-laws was necessarily required to be read in conjunction with Section 60(3)(c) of the said Act, which the Tribunal completely failed to appreciate in these cases. It was submitted that the contesting Respondents became aware of their ineligibility when the scrutiny of the nomination papers was undertaken. It was submitted that therefore, bye-law 25(i) of the aforesaid Bye-laws was necessarily required to be read in conjunction with Section 60(3)(c) of the said Act, which the Tribunal completely failed to appreciate in these cases. It was submitted that the contesting Respondents became aware of their ineligibility when the scrutiny of the nomination papers was undertaken. They realized that they had not availed of service of the Society concerned to a minimum level for three years in the preceding period of five years and, therefore, they hurriedly produced fixed deposit receipts on 12.06.2019 i.e. the second day of scrutiny of the nomination papers to claim that they had fixed deposit accounts for a period of three years and that they were eligible under the aforesaid bye-law. The learned Counsel submitted that the requirement of the aforesaid bye-law was that such service of having fixed deposits ought to have been availed by the contesting Respondents in three preceding years and merely opening fixed deposit accounts of Rs.10,000/-for a period of three years from 12.06.2019, did not satisfy the mandatory requirement of the aforesaid Bye-laws. 6. The learned Counsel appearing for the Petitioners invited attention of this Court to the statement of objects and reasons of the Goa Co-operative Societies Amendment Bill 2013, whereby Section 60(3)(c) was introduced in the aforesaid Act to emphasise that the said amendment was made to bring the said Act in conformity with the provisions of The Constitution (97th Amendment) Act, 2011. According to the learned Counsel appearing for the Petitioners, the emphasis in the said statute read with the aforesaid bye-law was on continued association with the concerned Society of such persons who desired to contest elections to represent the said Societies on the Board of Directors of the Respondent-Credit Co-operative Society. On this basis, it was contended that the impugned Judgments and Orders passed by the Tribunal deserved to be set aside. 7. It was contended by Mr. Vithal Naik, the learned counsel appearing for the contesting respondents in all the Petitions, that there was no error committed by the Tribunal while passing the impugned Judgments and Orders. On this basis, it was contended that the impugned Judgments and Orders passed by the Tribunal deserved to be set aside. 7. It was contended by Mr. Vithal Naik, the learned counsel appearing for the contesting respondents in all the Petitions, that there was no error committed by the Tribunal while passing the impugned Judgments and Orders. It was submitted that a proper reading of bye-law 25(i) of the aforesaid Bye-laws would show that having a fixed deposit of Rs.10,000/-for a term of three years with the concerned Society was enough and that, therefore, when the contesting Respondents produced the fixed deposit receipts dated 12.06.2019, before the Returning Officer, their nomination papers ought to have been accepted. It was submitted that reading bye-law 25(i) in conjunction with Section 60(3)(c) of the aforesaid Act was erroneous. It was emphasized that before the said amendment was brought into force, introducing Section 60(3)(c) of the aforesaid Act in the year 2014, the said Bye-laws did exist and the requirement of the Bye-laws was certainly satisfied by having a fixed deposit for the aforesaid amount for a term of three years. It was also submitted that the rejection of nomination papers of the contesting Respondents was against the spirit of democracy, because such rejection had left only the Petitioners in the electoral fray, as a result of which they were elected unopposed. The learned counsel relied upon the Judgment of the Hon’ble Supreme Court in the case of Vipulbhai M. Chaudhary vs Gujarat Cooperative Milk Marketing Federation Limited & Ors., (2015) 8 SCC 1 , in support of the said contention. 8. The learned Additional Government Pleaders appearing for the respondent authorities sought to justify the orders passed by the returning officer. 9. In order to examine the contentions raised on behalf of the rival parties, it would be appropriate to refer to the relevant bye-law and the concerned statutory provisions. 10. Bye-law 25(i) of the Bye-laws concerning the Respondent-Cooperative Credit Society reads as follows : “25. ELIGIBILITY FOR ELECTION AS MEMBER OF THE BOARD OF DIRECTIONS (BOD) No member of the Society shall be eligible to contest the election to the Board of Director of the Society if – (i) He does not hold the requisite number of fully paid up shares of 600 number or having Saving account transaction of minimum of Rs. ELIGIBILITY FOR ELECTION AS MEMBER OF THE BOARD OF DIRECTIONS (BOD) No member of the Society shall be eligible to contest the election to the Board of Director of the Society if – (i) He does not hold the requisite number of fully paid up shares of 600 number or having Saving account transaction of minimum of Rs. 6000/-per annum continuously for 3 years in the Society or having fixed deposit of Rs. 10,000/-for a term of 3 years with the Society at the time of declaration of Board of Director.” 11. Section 60(3) of the aforesaid Act, reads as under: “60. Disqualification for being director. - (1) … (2) … (3) In order to be eligible for being chosen as director of the board of directors of a society which has been in existence for more than three years, a member, - (a) shall have been a voting member of the society for at least three years immediately preceding the year of election; (b) shall have attended three annual general meetings of the society during the period of five years preceding the election; (c) shall have availed for three in the preceding period of five years the service of a society to a minimum level as specified in the bye-laws.” 12. This Court is of the opinion that there is no substance in the contention raised on behalf of the contesting Respondents that byelaw 25(i) of the said Bye-laws has to be read in isolation and independent of Section 60(3)(c) of the aforesaid Act. A bare perusal of the above quoted Section 60(3)(c) of the aforesaid Act shows that the eligibility of a person to be chosen as a member of the board of Directors of the Respondent-Credit Co-operative Society hinges on such person having availed services of the concerned Society for a period of three years in the preceding period of five years to a minimum level as specified in the Bye-laws. The very fact that the aforesaid statutory provision specifically refers to the Bye-laws, clearly indicates that bye-law 25(i) of the said Bye-laws must necessarily be read with Section 60(3)(c) of the said Act. 13. The very fact that the aforesaid statutory provision specifically refers to the Bye-laws, clearly indicates that bye-law 25(i) of the said Bye-laws must necessarily be read with Section 60(3)(c) of the said Act. 13. A perusal of Section 60(3)(c) of the said Act shows that it is mandatory for a person contesting such elections to the Board of Directors of a Society like Respondent-Credit Co-operative Society, to have availed the services of the concerned Society for three years in the preceding period of five years to a minimum level as specified in the Bye-laws. A perusal of bye-law 25(i) of the said Bye-laws shows that it has three limbs of services, either of which ought to have been availed by the candidate contesting the election. It is crucial that availing of either of such services in terms of Section 60(3)(c) of the said Act has to be for three years in the preceding period of five years. 14. In the present case, all the contesting Respondents claimed to have satisfied the requirement of bye-law 25(i) of the Bye-laws by opening fixed deposits of Rs.10,000/-for a term of three years during the scrutiny of the nomination papers. In fact, all the contesting Respondents took the fixed deposits on 12.06.2019, which was the second day of the scrutiny of the nomination papers. On this basis, they claimed that since they had taken fixed deposits and produced the receipts showing that such fixed deposits were for a term of three years from 12.06.2019, they had indeed satisfied the requirement of bye-law 25(i) of the aforesaid Bye-laws. This clearly shows that the contesting Respondents themselves staked their claim of eligibility in terms of the last limb of bye-law 25(i) of the said Bye-laws. 15. It needs to be tested whether such an act on the part of the contesting Respondents satisfies the bye-law read with Section 60(3)(c) of the aforesaid Act. In the above-quoted clause (c) of subsection (3) to Section 60, the crucial words are “shall have availed for three years in the preceding period of five years the service of a society to a minimum level as specified in the byelaws.” It is significant that the requirement is that such candidates seeking to contest elections shall have availed the service of a minimum level specified in bye-law 25(i) of the said Bye-laws “for three years in the preceding period of five years”. This Court is of the opinion that the whole purpose of introducing the said requirement in the statute by way of amendment was to ensure that persons who intend to contest elections should be associated with the concerned Society for at least three years in the preceding period of five years running up to the elections, thereby demonstrating that eligibility to contest the elections was concerned with the actual association of such candidates with the Society concerned by having availed service of the Society. The object of the amendment was to bring the provisions of the said Act in conformity with the provisions of the Constitution (97th Amendment) Act, 2011. It is significant that by the said amendment of the Constitution, co-operative spirit in the true sense was sought to be imbued in Co-operative Societies, necessarily requiring those persons associated with such Societies on a regular basis being elected as members of the Board of Directors so that they could perform their duties as expected and in terms of the cooperative spirit. 16. The action of the contesting Respondents in taking fixed deposits for amounts of Rs.10,000/-for a future period of three years at the eleventh hour and during the scrutiny of nomination papers, clearly does not satisfy the requirement of bye-law 25(i) of the said Bye-laws read with Section 60(3)(c) of the aforesaid Act. This Court is of the opinion that holding otherwise would run counter to the statutory requirement read with the aforesaid Byelaws. 17. The Tribunal in this case completely failed to appreciate the aforesaid aspect of the matter by holding that the nomination papers of the contesting Respondents were wrongly rejected. In fact, the Tribunal not only erred in holding that the contesting Respondents were eligible to contest the elections as per bye-law 25(i) of the Bye-laws on the date of scrutiny of the nomination papers, but it further went on to erroneously hold that the Petitioners in these Writ Petitions had clung to power with the support of the Returning Officer and they avoided facing the electorate. It was found that this act was subversive of democratic principles. 18. It was found that this act was subversive of democratic principles. 18. In this context, considering the facts of the present case, reliance placed by the learned counsel appearing for the contesting respondents on the judgement of the Supreme Court in the case of Vipulbhai M. Chaudhary vs Gujarat Cooperative Milk Marketing Federation Limited (supra) is also found to be misplaced. This is because the spirit of democracy requires contest amongst eligible candidates in the electoral fray. If in a given situation, only a single candidate is found to be eligible, he or she is bound to be elected unopposed. But it cannot be said that when there is only one candidate found to be eligible, his or her election unopposed would be subversive of democratic principles. Hence, it is found that the Tribunal erred in passing the impugned Judgments and Orders. 19. In view of the above, the Writ Petitions are allowed. The impugned Judgments and Orders dated 30.04.2021 are quashed and set aside and the disputes filed by the contesting Respondents are dismissed. 20. Rule is made absolute in above terms.