Writ Petition No.3165 of 2001

4th September, 2001

Petitioner Counsel: Shri. D. N. PATIL
Respondent Counsel: Shri. UMAKANT PATIL, Shri. P. M. SHAH, Shri. MUKUL KULKARNI

Cases Cited:
Suresh Ambadasrao Warpurkar Vs. State of Maharashtra, 1997(1) ALL MR 335 [Para 5,8,9]
Sahebrao /so Sakhoji Deshmukh Vs. The State of Maharashtra, W.P.No. 3367/1995 dt.- 19-7-199 [Para 5 5,16]
Sahebrao Narayanrao Patil Vs. State of Maharashtra, 2000 (3) Mh.L.J. 644 [Para 6,17]
Jayram Sakharam Pachore Vs. State of Maharashtra, 2001(2) ALL MR 179=2000 (4) Mh.L.J. 254 [Para 6,11,12]
Shamburaj Shivajirao Desai Vs. Director of Sugar, Maharashtra State, Pune, 1994 Mh.L.J. 892 [Para 6,15]

JUDGMENT

JUDGMENT :- Heard the learned Advocates for the parties. Perused the records. Rule. By consent, rule made returnable forthwith.

2. The petitioners challenge the order dated 30th July, 2001 passed by the respondent no.5 Divisional Deputy Registrar, Cooperative Societies (Dairy), Nashik Division, Nashik whereby an administrator has been appointed for the management of the respondent no.8.

3. The facts in brief, relevant for the decision are that the last elections for the managing committee of the respondent no.8 were held in the year, 1994 and the petitioners were elected as members of the managing committee and they assumed their office on 12th April, 1994. The term of the elected committee of the respondent no.8 was to expire on 11th April, 1999. Prior to the expiry of the said term, the petitioners by letter dated 15th February, 1999 brought the said fact to the notice of the respondent no.5 herein so that the necessary steps be taken for holding fresh elections for the managing committee of the respondent no.8. Pursuant thereto, by letter dated 23rd February, 1999, the respondent no.5 intimated the respondent no.7 to hold elections for the managing committee of the respondent no.8 as the respondent no.7 being the Collector is the authority for holding such elections under the Maharashtra Cooperative Societies Act, 1960 (hereinafter called as "the said Act"). The respondent no.7 on his part accordingly, prepared the election programme. However, the elections could not be held as the Government of Maharashtra postponed the elections of all the Cooperative Societies in the State of Maharashtra till 30th September, 1999. Meanwhile, the Government of Maharashtra also issued notification dated 9th July, 1999 classifying the class of dairy societies for the purpose of holding elections either by the Collector or by Cooperative Department. However, the said notification was withdrawn by another notification dated 18th November, 1999 and it was decided to hold the elections of dairy societies through the Collector. Accordingly, the Collector again prepared the election programme for elections for the managing committee of the respondent no.8 by issuing notification dated 10th April, 2000 and the voters' list was finalised on 16th June, 2000. However, again the Government by notification dated 19th June, 2000 postponed the elections of the Cooperative societies in the State till 30th September, 2000 on account of rainy season. The elections were further postponed by the Government of Maharashtra by notification dated 5th September, 2000 on account of census work. Thereafter, the Collector, by letter dated 22nd May, 2001, asked the respondent no.8 to deposit a sum of Rs.25,000/- initially and to make arrangement for further expenses for holding the elections. The respondent no.8 along with letter dated 8th June, 2001 deposited a sum of Rs.15,000/- with the Collector respondent no.7. The respondent no.7 prepared the election programme by issuing notification dated 4th June, 2001 and accordingly, the voters' list was to be finalised by 14th August, 2001. However, the elections were again postponed by the Government of Maharashtra till September, 2001 on account of rainy season. Meanwhile, the respondent no.5 issued notice dated 23-5-2001 to the Chairman of the respondent no.8 with a direction to publish the same disclosing the intention to take action in terms of the provision contained in section 77A of the said Act and in fact, by order dated 30th July, 2001, appointed the administrator for the management of the respondent no.8, and accordingly the administrator started functioning from 1-8-2001.

4. The action stated to have been taken under section 77A of the said Act and the order passed thereunder on 30th July, 2001 is sought to be challenged by the petitioners on the ground that the proviso to section 73G(2B) of the said Act specifically provides that where the Collector fails to hold election to the committee of any such society, the term of office of the members of the committee of that society shall be deemed to have been extended till the date immediately preceding the date of the first meeting of the newly constituted managing committee and since the newly constituted managing committee is yet to come into existence, the action under section 77A of the said Act is bad in law. In this regard, it is also the contention of the petitioners that the Government of Maharashtra has extended the term of the members of the managing committee of the respondent no.8 by its notification dated 19th December, 2000 for six months; it is the contention of the petitioners that the provisions of section 77A are not at all attracted in the facts and circumstances of the case and considering the provision of section 73G(2B) Proviso of the said Act. According to the petitioners, therefore, the order passed by the respondent no.5 is without jurisdiction. Lastly, it is the contention of the petitioners that the impugned order has been passed without following the basic principles of natural justice inasmuch as, all the members of the managing committee of the respondent no.8 were not afforded sufficient opportunity of being heard in the matter before passing the impugned order.

5. Placing reliance in the decision of the Division Bench of this Court in the matter of Suresh Ambadasrao Warpurkar and others Vs. State of Maharashtra reported in 1997(1) ALL MR 335, the learned Advocate appearing for the petitioners has contended that in view of the proviso to section 73G(2B) of the said Act, till the newly elected committee takes charge of the management of the society, the present committee is entitled to continue to be in the management of the respondent no.8 and the delay in holding the election for new committee was not on account of any fault on the part of the petitioners or any one of them but, it was in the circumstances, explained in the petition that is, on account of repeated postponements of the election by the State Government and being so, there was no occasion for the appointment of the administrator under section 77A of the said Act. It is the contention of the petitioners that the petitioners on their part had duly informed the respondent no.5 about the term which was to expire in April, 1999 well before the expiry of the said term and it was on account of the circumstances beyond the control that the elections for the managing committee of the respondent no.8 were postponed from time to time and the petitioners continued to be the members of the managing committee of the respondent no.8 was also confirmed by the Government by issuing notification dated 19th December, 2000. Referring to section 157 of the said Act, it was sought to be contended that the Government has ample powers to exempt the society from the application of the provisions of the said Act and the fact that such powers have been exercised in the case of the respondent no.8 is apparent from the order dated 19th December, 2000. Reference was also made to the provisions contained in section 77 of the said Act which grants immunity from any penalty for the actions done in good faith by the committee and its members in relation to the management of the society. According to the learned Advocate for the petitioners, the Government having exercised the powers under Section 157 of the said Act, first to condone the delay in holding the elections and further to extend the period of tenure of the petitioners as members of the managing committee, there was no occasion for the respondents to exercise the power under section 77A of the said Act. Reference is also made to an unreported decision of the Division Bench of this Court in Writ Petition No.3367 of 1995 (Sahebrao s/o Sakhoji Deshmukh and another Vs. The State of Maharashtra and others) delivered on 19th July, 1995. Referring to section 73H of the said Act, it was contended that only in case of obligation of the committee to hold elections and wilful failure in that regard by the committee, the respondents could have been perhaps justified in taking the action under section 77A of the said Act. Considering the fact that the petitioners were not responsible for the delay in holding election and it was solely on account of repeated postponement thereof by the Government, that the elections could not be held till this date, there was no cause of action under section 77A of the said Act. It was also contended that the order having been passed without affording proper opportunity of being heard in the matter to the petitioners, the same is in utter failure of the basic principles of natural justice and, therefore, is liable to be set aside. It was further contended that though in the month of April, 1999 the proviso to subsection (2B) was not on the statute book, the similar provision was in force till 1996 and was reintroduced in November, 2001 and the same discloses the intention of the legislature that there shall be minimum interference in the management of the Cooperative societies and the administration thereof is to be left to the members of such society and only in extreme cases interference can be justified under section 77A of the said Act. Bearing the same in mind and considering the fact that the petitioners continued to be in the management of the respondent no.8, according to the learned Advocate for the petitioners there is absolutely no justification for the action under section 77A of the said Act.

6. On the other hand, it is sought to be contended on behalf of the respondents that the term of elected body constituted by the petitioners for the management of the respondent no.8 expired in April, 1999 and the petitioners had no right to continue to be in management of the respondent no.8, after expiry of the said period. It is also contended on behalf of the Government that in any case, the petitioners are not entitled to be in the office of the managing committee of the respondent no.8 after expiry of the period of six months allowed under the order dated 19-12-2000 as sought to be contended by the petitioners. Referring to the decision of the Division Bench in the matter of Sahebrao Narayanrao Patil and another Vs. State of Maharashtra and others reported in 2000 (3) Mh.L.J. 644, it was submitted by the learned Asstt. Government Pleader that since the term of the petitioners had expired during the period when the proviso to section 73G(2B) was not on the statute book, the petitioners are not entitled to take any benefit of the said proviso introduced w.e.f. 13th November, 2000. Further, the learned Senior Counsel appearing for the private respondents, placing reliance upon the decision of the Division Bench in the matter of Jayram Sakharam Pachore and others Vs. State of Maharashtra reported in 2000 (4) Mh.L.J. 254 : (2001(2) ALL MR 179), the learned Single Judge of this Court in the matter of Shamburaj Shivajirao Desai and others Vs. Director of Sugar, Maharashtra State, Pune and others reported in 1994 Mh.L.J. 892 submitted that in the facts and circumstances of the case, the provisions contained in proviso to section 73G(2B) of the said Act are not at all attracted. Drawing attention to the order dated 19th December, 2000, it was submitted that the said order nowhere extended the term of the petitioners but, only permitted the elections to be held within six months from the date of the said order. According to the learned Senior Counsel, in the absence of specific order of extension of the term of the committee constituted of the petitioners by the Government under section 73G(2B) of the said Act, the consequences under section 77A(1)(b) have to follow and viewed from this angle, no fault can be found with the impugned order appointing the Administrator for the management of the respondent no.8.

7. It is not in dispute that the respondent no.8 is a specified society to which the provisions of section 73G of the said Act are applicable. In terms of subsection (2) of section 73G of the said Act, when the election of all the members of the committee of any such society is held at the same time, the members elected on the committee at such general election shall hold office for period of five years from the date on which the first meeting is held, unless the period is extended by the State Government, for reasons to be recorded in writing, for a period not exceeding one year, however that the total period does not exceed six years in the aggregate. Sub-section (2B) provides that where, for any reason whatsoever, the election of the members of the committee is not held or could not be held before the expiry of the term or the extended term, as the case may be, of the existing committee, the members including the officers of the committee shall cease to hold office on the expiry of its term or extended term, as the case may be, and they shall be deemed to have vacated their offices. It is also matter of record that sub-section (2B) contained a proviso till 5th September, 1996 to the effect that "Provided that where the Collector fails to hold election to the committee of any such society, the term of office of the members of the committee of that society shall be deemed to have been extended till the date immediately preceding the date of the first meeting of the newly constituted committee." After deletion of the said proviso w.e.f. 5th September, 1996, the same proviso was re-introduced but, w.e.f. 13th November, 2000.

8-9. The Division Bench of this Court, in Suresh Ambadasrao Warpurkar's case had an occasion to consider the proviso to sub-section (2B) of the said Act and it was observed that :

"The provision is to meet the exigencies of the new committee not coming in office before expiry of the term of old committee. This is a composite and two fold provision. By the first part, it provides that the members will vacate the office as soon as their term expires and the second part provides that if the Collector fails to hold the election, the first part will not come in operation and the members will continue in office."

The above observations however, were made in the following circumstances disclosed in para no.9 of the said decision, which read thus :

"It is needless to say that cause of failure to hold the elections is the crux of the matter. If the Collector has failed to hold elections for the reason of non-cooperation or non-supply of required material like the list of members to be included in the voters' list or the requisite costs for election to be deposited by the said society, then the members cannot get a right to continue in office till the new elections take place and an alternate arrangement like appointment of Administrator will have to follow. But when the failure of the Collector is because of the Government's directions not to hold the elections or because of the failure of the Collector's own machinery to hold the elections, then the committee will continue in office till the elections take place. The appointment of an Administrator under section 77A read with section 73G(2B) has nothing to do with the performance of the existing committe."

Referring to those observations in Suresh Ambadasrao Warpurkar's case, it was sought to be contended that since new election have not been held, the old committee has to continue till the first meeting of the newly elected body. Placing reliance on the observations of the Division Bench, it was sought to be contended that on account of failure of the part of the Collector to hold elections, the term of the elected body cannot be held to have come to an end so as to warrant an action under section 77A of the said Act. It is to be noted that the observations of the Division Bench were in a situation where undisputedly, the proviso to section 73G(2B) was in force and applicable. The said decision was delivered on 18th January, 1996. At the relevant time, the proviso as quoted was very much there on the statute book. The decision, therefore, can be applicable to a situation where the proviso is found on the statute book on the date of expiry of the term of the committee and not otherwise.

10. In the case in hand, undisputedly the elections to the managing committee of the respondent no.8 were held in 1994 and the petitioners, on being elected, assumed charge on 12th April, 1994 and their term in terms of section 73G(2) of the said Act expired on 11th April, 1999. Though, referring to order dated 19th December, 2000, it was strenuously contended that the same extended the period for six months from the date of the order and in terms of the provisions contained in section 157 read with section 73G of the said Act the order dated 19th December, 2000, on the face of it, discloses that the same was passed in exercise of powers under section 73-IB of the said Act. Section 73-IB provides that where due to scarcity, drought, flood, fire, or any other natural calamity or rainy season or any election programme, of the State Legislative Assembly or Council or the House of the People or a local authority, coinciding with the election programme of any society or class of societies or such other reasons as, in the opinion of the State Government, are exceptional, it is not in the public interest to hold elections to any society or class of societies, the State Government may, notwithstanding anything contained in the said Act, or in any rules, or by-laws made thereunder, or any other law for the time being in force, for reasons to be recorded in writing, by general or special order, postpone the election of any society or class of societies, for a period not exceeding six months at a time which period may further be extended so, however, that the total period shall not exceed one year in the aggregate. Apparently, section 73-IB speaks of postponement of election and not extension of the tenure of the managing committee. It was then sought to be contended that mere reference to section 73-IB will not change the nature of the order if in fact, the order results in extension of tenure of the committee. There is no doubt that any mistake in mentioning the correct provision of law cannot render the order to be bad in law as also need not change the effect flowing from the order. Bare reading of the order dated 19th December, 2000 discloses that in para 1 thereof, it refers to expiry of tenure of the elected body in April, 1999 and the necessity of six months time to be extended for elections of new body. Para 2 thereof refers to drought situation in the taluka and necessity for six months time extension for elections of the new committee of the society as well as to the drought situation in the locality resulting in financial difficulties for the society. The third para refers to the order having been passed under section 73-IB of the said Act and thereby granting extension of the period of six months for election of new committee for the society. The fourth para refers to the statement to the effect that within the said period the managing committee may hold elections. Apparently, therefore, there is nowhere reference to the extension of tenure of elected body comprising of the petitioners either for six months or for any period, either from the expiry of the tenure from April, 1999 or from any other time. Apparently, therefore, the order dated 19th December, 2000 nowhere speaks of extension of the tenure of the managing committee consisting of the petitioners and, therefore, the order dated 19th December, 2000 cannot be said to have been passed in exercise of powers under section 73G(2) of the said Act.

11. It is however, the contension of the petitioners that irrespective of such order, by virtue of the proviso to sub-section (2B) of Section 73G, read in proper perspective considering the intention of the legislature, the petitioners are entitled to continue to be in lawful management of the respondent no.8. As already observed above, there was no proviso providing for continuation of the tenure of the managing committee in charge of the management of the society till the date of the first meeting of newly constituted committee on account of failure on the part of the Collector to hold elections within the stipulated period under the Act during the period from 5th September, 1996 to 13th November, 2000. In other words, during the relevant period when the tenure of the managing committee comprising of the petitioners expired i.e. on 11th April, 1999, the proviso was not on the statute book. Barring the said proviso to subsection (2B), undisputedly, there is no other provision which would entitle to committee to claim extension of their period which enables the elected committee to continue to be in office till the new committee takes charge and considering the provisions under sub-section (2), the tenure of the elected committee comes to an end on expiry of the period of five years. In the circumstances, it was sought to be contended by the learned Advocate for the petitioners that the very fact that the proviso has been reintroduced, the intention of the legislature is clear to the effect that the elected body shall continue to hold the management of the society and only in exceptional cases that the powers under section 77A could be exercised by the authorities. Undoubtedly, the proviso as it stands today, may lend some support to the contention canvassed on behalf of the petitioners regarding the intention of the legislature. However, the fact remains that the legislature was fully aware at the time of introduction of the said proviso that the proviso of like nature was on the statute book till 5th September, 1996 and it was deleted therefrom and it was being reintroduced and in its wisdom has chosen the same to be effective prospectively. Whether such a proviso can be said to have been introduced retrospectively or not is totally different issue and does not arise for consideration in this petition. Moreover, the deletion of the old proviso was the subject matter of challenge before this Court in Jayram Sakharam Pachore's case and therein, the Division Bench has held thus:-

"If a proviso of a statute has been deleted by the legislature it is not for this Court to reincorporate it in the statute which is purely a function of the legislature. While interpreting the law, it is not for the Court to rely upon a provision which does not exist in the statute books. The plea taken by the petitioners in support of their continuation in the office cannot be supported by the proviso which was not, in fact, for the last about more than four years in the Act and the plea that it should be deemed to exist so as to allow the petitioners to continue in office and that too beyond the statutory period of six years, is required to be considered only for being rejected."

It was also held therein thus :

"Section 73G(2B) of the Act stipulates that where, for any reason whatsoever, the election of the members of the committee was held or could not be held before the expiry of the term or the extended term, as the case may, all the existing committee members, including the officers of the committee, shall cease to hold office on the expiry of its term or extended term, as the case may be, and they shall be deemed to have vacated their offices. The operation of these provisions is automatic on expiry of the original term or the extended term, as the case may be."

Being so, the contention about the continuation of the petitioners as managing committee after 11th April, 1999 is totally devoid of substance. Postponement of election by the Government also cannot enure to the benefit of the petitioners to take shelter under the newly introduced provisions.

12. One may wonder, what happens after such situation where the committee's tenure gets over under section 72G(2) and no elections are held and, therefore, no new committee comes into existence? What would be the situation as regards the management of such societies from the date of expiry of the tenure of the elected body? Certainly, the legislature, in such cases, has taken care by introducing the provisions under section 77A (1)(b) as is contended by the learned Senior Counsel appearing on behalf of the private respondents. Section 77A (1)(b) provides that where the Registrar is satisfied that, the term or extended term, as the case may be, of the committee of any society or of any of its members has expired or for any other reason election is held and there is a failure to elect all or any of the members required to fill the vacancies, the Registrar may, either suo motu or on the application of any officer of the society, by order appoint (i) any member or members of the society to be the member or members of the committee to fill the vacancies; (ii) a committee, consisting of not more than three members of the society, or one or more administrators, who need not be members of the society, to manage the affairs of the society till a new committee enters upon office. Apparently, therefore, even in case where the term of the committee is not extended or even after extension, no elections are held and, therefore, no new committee is constituted, the Registrar is empowered to take proper steps to appoint administrator. In this regard, in Jayram Pachore's case, it has been held thus :

"Section 73G(2B) read with section 73G(2) of the Act states that on expiry of the original tenure or the extended tenure, the outer limit being of six years, the elected members cease to hold office of the managing committee. However, these provisions do not stipulate any alternate arrangement for the administration of the society in that eventuality namely when the elected members cease to hold office on completion of their original term or extended term. Such an issue had also come up for our consideration in the case of "Ratnakar Anand Daste and others Vs. State of Maharashtra and others", Writ Petition No.1136 of 2000 and we had relied upon the provisions of section 73H of the Act which states that the committee shall cease to function on the expiry of its term and the members thereof shall cease to hold office and the Registrar may himself take over the management of the society or appoint an Administrator who shall not be from amongst the members of the committee, the term of which has so expired and the Registrar or Administrator shall hold the elections within a period of six months and the committee shall be constituted before the expiration of that period."

In the case in hand, as already observed above, the period of elected committee comprising of the petitioners, expired on 11th April, 1999. In the circumstances, it was expected from the concerned Registrar to take appropriate steps in terms of the provisions contained under section 77A (1)(b) of the said Act. Though the respondent - Government has chosen to file an affidavit-in-reply running in 16 pages along with various annexures, has not disclosed any reason for the inaction on the part of the concerned Registrar to appoint administrator or to take necessary action in terms of section 77A (1)(b) of the said Act from 12th April, 1999 till the date of passing of the impugned order. While being fully aware of the limitations of this Court while considering the petition of the nature before this Court, at the same time, when a patent failure on the part of the Government Officer to take appropriate action in the matter is disclosed to this Court, the Court cannot be a silent spectator. It was expected from the respondent Government to disclose the reasons, if any, for the inaction on the part of the concerned Registrar to take necessary action in terms of section 77A of the said Act in relation to the respondent no.8 for the period from 12th April, 1999 till the date of passing of the impugned order. The provisions contained in section 77A of the said Act are not the ornamental powers of the Registrar but, they speak of obligations and duties of the Registrar in the interest of the cooperative societies and any failure in that regard by the Registrar has to be considered with all seriousness it deserves and viewed from this angle, the justification for the delay in action under section 77A in the matter was certainly expected from the respondent Government. Nonetheless, the delay in this regard cannot create any right in favour of the petitioners.

13. Reference of section 157 of the said Act on behalf of the petitioners is also meaningless. Section 157 provides that the State Government may, by general or special order exempt any society or class of societies from any of the provisions of this Act, or of the rules made thereunder, or may direct that such provisions shall apply to such society or class of societies with such modifications not affecting the substance thereof, as may be specified in the order: Provided that, no order to the prejudice of any society shall be passed, without an opportunity being given to such society to represent its case. Undisputedly, there is no order passed by the Government exempting the respondent no.8 from any of the provisions of the said Act. Being so, it is not understood how the provisions contained in section 157 of the said Act can be of any help to the petitioners.

14. The contentions regarding failure on the part of the respondents to observe the basic principles of natural justice relate to the failure on the part of the respondents to hear the petitioners individually before passing the impugned order. As already observed above, section 73G(2) specifically provides that the term of the committee shall be for five years and it can be extended for a period to the maximum of one year by specific order by the Government. Apart from the fact that no such extension is granted, even assuming that extension is granted, the moment the period of six years expires, the elected members cease to be in the office of the managing committee and, therefore, they cannot claim any right to continue to be in the office of the managing committee and, for the same reason, there is no question of them being heard in the matter of exercise of powers under section 77A of the said Act. In such circumstances, the situation contemplated under section 77A (1)(b) in case of expiry of period of term of the committee itself rules out any necessity of any hearing being granted to the members whose term has expired. Being so, the contention about non compliance of the principles of natural justice is absolutely devoid of substance.

15. The view that I am taking in this matter is clearly supported by the decision of the learned Single Judge in Shamburaj Shivajirao Desai's case. In the said case, the learned Single Judge, after considering the provisions of section 73G(2B), has held that the total term including the extended term of the committee cannot be more than six years and the moment that period expires, the authority is empowered to take appropriate action in terms of section 77A of the said Act.

16. As regards the decision of the Division Bench in Writ Petition No. 3367 of 1995, the same is of no help to the petitioners. The order appointing the Administrator therein which was under challenge was communicated to the petitioners through letter dated 30-6-1995 when the proviso to section 73G(2B) was very much there on the statute book. Being so, the ruling has to be considered bearing in mind the law as was in force at the time of taking action under section 77A.

17. As regards the decision in Sahebrao Narayanrao Patil's case, the decision therein was given in peculiar facts of the case and the same is not of much help in the case in hand.

18. In the result, the petition fails and is hereby dismissed. But, the matter does not end there. As already observed above, there is prima facie, case of failure on the part of the concerned Registrar to take appropriate action in the matter since 12th April, 1999 till the date of issuance of the impugned order. An appropriate inquiry in that regard is necessary by the competent officer on behalf of the Government to fix the responsibility for such failure and to take action in that regard as well as to verify whether such inaction has resulted in any loss to the respondent no.8 and to fix the responsibility in that regard and to take necessary action for the same. The Chief Secretary of the Government of Maharashtra is, therefore, expected to do the needful for such inquiry in the matter. With these observations, the petition is disposed of and the rule is discharged, with no order as to costs.

Rule discharged.