2005(4) ALL MR 94
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

F.I. REBELLO AND S.P. KUKDAY, JJ.

Shri. Kisan Narayan Shriram & Anr.Vs.State Of Maharashtra & Ors.

Writ Petition No.1256 of 1999

2nd March, 2005

Petitioner Counsel: Mr. G. S. GODBOLE
Respondent Counsel: Mr. C. R. SONAWANE,Mrs. POONAM BHOSALE,Dr. V. K. CHAUDHARY,Ms. K. RAJESHWARI

Maharashtra Co-operative Societies Act (1960), Ss.14, 152 - Maharashtra Co-operative Societies Rules (1961), R.13(1) - Amendment to bye-laws - Amendment would only be if the general body of society passes amendment to that effect or the Registrar directs amendment. (Paras 5, 6)

JUDGMENT

F. I. REBELLO, J.:- Rule. Heard forthwith.

The Petitioners are members of a co-operative society which is an affiliate of Respondent No.5. Respondent No.5 has members spread over various districts which were divided into two divisions which are set out below. This was the position before the appeal was disposed of by the Hon'ble Minister for State (Textiles) Mantralaya on 29-1-1999. The position of members was as under :

PUNE DIVISION :

1)

2)

3)

4)

5)

Solapur

Satara

Sangali

Kolhapur

Pune

175

4

14

6

11

MUMBAI AND NASHIK DIVISION :

1)

2)

3)

4)

5)

6)

7)

8)

9)

Mumbai

Ratnagiri

Thane

Sindhudurga

Raigad

Ahmednagar

Dhule

Nashik

Jalgaon

6

Nil

3

Nil

Nil

44

17

27

15

In terms of the bye-laws, 16 members had to be elected to respondent No.4, one from each of the districts. Earlier a writ petition was filed before this court being Writ Petition No.1064 of 1989 which came to be disposed of on 12-3-1989. The limited issue in that petition was whether the District Industrial Society should be given representation on board of directors. That came to be disposed of by order dated 12-3-1989.

2. Respondent No.3, as Registrar under the provisions of the Maharashtra Co-operative Societies Act on 11-5-1990 issued notice under Rule 13(1) of the Rules framed under the Maharashtra Co-operative Societies Act proposing amendments to bye-law No.28 being bye-law No.28(1) to 28(8) in exercise of his powers under Section 14 of the Act. The society did not oppose amendment of bye-law No.28(5) and bye-law No.28(6). They however, opposed the other amendments. By the proposed bye-laws, 16 seats were to be divided amongst various groups of societies as contained in the said proposed bye-laws. We are really concerned with the amendment to bye-law 28(1) and bye-law No.28(2). By bye-law No.28(1) it was proposed that three seats were allotted to Pune division and by bye-law No.28(2) two seats were to be allotted to Mumbai and Nashik Divisions. As the Respondent No.3 still insisted on the amendment of the bye-laws, society preferred an appeal under Section 152 of the Co-operative Societies Act and stay was granted on 17-12-1990. It is the case of the Petitioners that on 13-4-1998 Chairman of Respondent No.4 appeared before the Hon'ble Minister hearing the appeal and made a statement to accept all the amendments except amendment to bye-law No.28(1)(4). Based on that a formal amendment to the bye-law was carried out on 1-6-1998. In passing we may mention that the persons aggrieved by the rejection of the amendment to bye-law 28(1)(4) had filed petition before this court being Writ Petition No.2041 of 1999. This court by separate judgment and order passed on 23-2-2005 allowed the said petition thereby said bye-law is also now part of the bye-laws.

It is the case of the Petitioner that thereafter respondent Nos.7 and 8 preferred another appeal to the Minister purportedly under Section 152 of the Act. By this appeal they proposed further amendment to bye-laws 28(1)(a) to 28(1) and 28(2). Bye-laws as proposed were that in Pune Division, Solapur should be allotted two seats and one seat be allotted to district Satara, Sangali Kolhapur and Pune. Similarly they proposed the amendment to bye-law 28(2) by which the Districts of Mumbai, Ratnagiri, Thane, Sindhudurga, Raigad and Ahmednagar were to be given one seat and the districts of Dhule, Nashik and Jalgaon were to be given one seat. It is the contention of the Petitioners that without authority from the society, the chairman appeared before the Hon'ble Minister and agreed to the amendment. Pursuant to appeal being allowed, Respondent No.3 by order of 6-2-1999 directed respondent No.4 to carry out that amendment as set out earlier. It is this order which is the subject matter of the present petition.

3. On behalf of the Respondent Nos.6 and 7, the learned counsel contends that the amendment is just and equitable and in furtherance of the co-operative principles. It is submitted that considering the number of voters that Solapur has in Pune Division and Ahmednagar has in Mumbai and Nashik Division, representation would go mainly only to societies from Solapur and Ahmednagar. It is in that context that the amendment was proposed and accepted. It is further submitted that it was open in appeal to the Minister to allow such amendment and once such amendment was allowed, society was bound to carry out the amendment. All that respondent No.3 has done by order of 6-2-1999 is to act in furtherance of the order passed by the Hon'ble Minister.

On the other hand, the learned counsel for the Petitioner points out that the order passed in appeal and the consequential order of 6-2-1999 are totally without jurisdiction. It is pointed out that amendment to the bye-laws was proposed by Respondent No.1 in exercise of his powers under Section 14 of the M.C.S. Act. As the society was aggrieved they preferred an appeal. In that appeal, before the Minister based on the statement made objection to bye-laws other than 28(1)(4) was not pressed. Consequently formal amendment to the bye-laws was carried out on 1-6-1998. On the amendment being carried out there was total compliance with the direction issued under Section 14 and consequently it was not open to Respondent nos.7 and 8 to prefer an appeal against the non-existing direction. It is therefore, submitted that the action is totally without jurisdiction and consequently impugned orders are liable to be set aside.

4. The amendment to the bye-laws can be carried out either pursuant to the powers conferred under Section 13 and or Section 14 of the M.C.S. Act. Section 13 is the power by which the Society itself if the proposed amendment is passed at the general meeting of the society, can forward the same to the registrar for registration of the amendment to the bye-laws. The registrar then has to dispose of the same within two months from the date of receipt. Procedure as set out in Sub-Section 1(A) of Section 13 has to be complied. Other sub sections of Section 13 need not be adverted to.

We then have the Section 14 which reads as under :

"(1) If it appears to the Registrar that amendment of the bye-laws of a society is necessary or desirable in the interest of such society, he may call upon the society, in the manner prescribed to make the amendment within such time as he may specify.

(2) If the society fails to make the amendment within the time specified, the Registrar may after giving the society an opportunity of being heard and after consulting such State Federal Society as may be notified by the State Government, register such amendment and issue to the society a copy of such amendment certified by him. With effect from the date of the registration of the amendment in the manner aforesaid, the bye-laws shall be deemed to have been duly amended accordingly and the bye-laws as amended shall, subject to appeal (if any), be binding on the society and its members."

Rules have been framed under the Act which are known as Maharashtra Co-operative Societies Rules, 1961. In so far as Section 14 is concerned, relevant rule is Rule 13. Relevant rule as far as we are concerned is rule 13(2) and 13(3) which are reproduced here below :

"13(2) For the purposes of sub section (2) of Section 14, the Registrar shall send a copy of the notice to the State Federal Society duly notified under that sub-section with a request to offer its comments on the amendment within such time as may be specified by him. If the State Federal Society fails to offer its comments within the specified time, it may be presumed by the Registrar that the said society has no objection to the amendment.

(3) If after considering the comments of the State Federal Society, if any, the Registrar considers that there is no objection to registering the amendment, he shall send a written notice in Form "F" by registered post to the registered address of the society calling upon it to show cause in writing, or through a properly authorised representative to appear before the Registrar on the date specified in the notice, as to why the proposed amendment should not be registered within the time specified in the notice in Form "E"."

5. Perusal of Section 14 would show that the Registrar suo motu can if it appears that the amendment to the bye-laws is necessary or desirable, and in the interest of justice, require the society to carry out the amendment. On failure by the Society to comply, Registrar has to follow the requirement of sub-Section (2) which are (a) giving society an opportunity of being heard; (b) consulting the Federal Society as may be notified by the State Government and (c) Register such amendment and issue to the society a copy of such amendment certified by him. While carrying out exercise under Sub-Section (2) he has to follow the procedure laid down in sub-rules (2) and (3) of Rule 13 which is that the comments of the Federal Society should be invited, within the time specified and if by that time society fails to offer its comments, it is presumed that the society has no objection to the amendment. If comments have been forwarded and if the Registrar considers that there is no objection to registering the amendment, then he can by written notice call the society to show cause in writing or through a properly authorised representative to appear before the Registrar. In other words, hearing has to be given to the society after the comments of the Federal Society are received.

In the instant case, record is not clear as to whether the comments of the Federal Society were called or whether the society itself failed to carry out the amendment. Record however, shows that the petitioners herein had preferred an appeal. It appears that ultimately it was not pressed for whatever reasons except to one bye-laws. That appeal came to be dismissed and the bye-laws were formally amended. In other words the direction issued under Section 14 of the M.C.S. Act was complied with. The amendment therefore, became part of the certified bye-laws.

As noted earlier, amendment to the bye-laws would only be if the general body of the society passes the amendment to that effect or the Registrar directs amendment. The society admittedly after carrying out the amendment has not passed any resolution in the general body meeting the (sic) further amended bye-law No.28, nor has the Registrar issued any direction for amendment of bye-law No.28. Inspite of that appeal seems to have been preferred by Respondent nos.7 and 8. The appeal would lie under Section 152 if there be an order or decision amongst others under Sections 13 and 14. When appeal was preferred by Respondent Nos.7 and 8 there was no order or decision under Section 13. In so far as Section 14 is concerned, also at the time of filing appeal or even thereafter there was no order or decision. In other words, appeal itself was not maintainable before Respondent No.2.

6. Respondent Nos.7 and 8 as it appears had preferred an appeal purported to be against the order directing amendment to the bye-laws by Respondent No.2 in exercise of powers under Section 14. The appeal was not in respect of the amendment of the bye-laws pursuant to the said direction or rejection but the proposed amendments were totally different from what the Registrar has directed the society to do in exercise of his powers under Section 14. This respondent Nos.7 and 8 as individuals could not have done nor could respondent No.2 sit to exercise jurisdiction in respect of non-existing order. The assumption of jurisdiction therefore, by Respondent No.2 in an appeal against a non existing order and thereafter allowing the appeal, even may be on the admission of the President of Respondent No.5 was totally without jurisdiction. Respondent No.2 had to address himself to the question, whether there was any appellable order before him which he chose not. He purposely proceeded based on the statement made before him by the Chairman and then proceeded to allow the appeal and amendment to the bye-laws as proposed by Respondent Nos.7 and 8. The entire action was without jurisdiction and consequently the petition will have to be allowed and impugned order set aside.

Before parting we may mention that if Respondent Nos.7 and 8 felt need for further amendment to the bye-laws of Respondent No.5, then Respondent No.5 had to pass resolution in the general body meeting or at the highest Respondent Nos.7 and 8 could have represented to Respondent No.2 for amendment which they had sought in their appeal. It would then be for Respondent No.2 if he considers for whatever reasons that the amendments are required, to direct the society under Section 14 to further amend the bye-laws as proposed by him. No such exercise was undertaken instead appeal was preferred directly to the Minister. As we have noted earlier, the appeal was without jurisdiction.

In the light of that petition made absolute in terms of Prayer Clause (b).

Petition allowed.