Bombay High Court
Rambhau Son Of Ukarda Dhage, Buldhana vs The Assistant Registrar, Cooperative ... on 17 February, 2017
Author: Z.A.Haq
Bench: Z.A.Haq
Judgment 1 wp916.16.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 916 OF 2016
Rambhau son of Ukarda Dhage,
Aged about 77 years, Resident of
Bhagyodaya Cooperative Gruha
Nirman Society Limited, Khamgaon,
Tahsil : Khamgaon, District : Buldana.
.... PETITIONER.
// VERSUS //
1. The Assistant Registrar,
Cooperative Societies, Khamgaon,
District : Buldhana.
2. Shri G.Y. Khillari, Aged Major,
Occupation : Serfice, Junior Clerk
in the office of Assistant Registrar
Cooperative Societies, Khamgaon
and Authorized Officer, Bhagyodaya
Cooperative Gruha Nirman Society
Limited, Khamgaon, Tahsil : Khamgaon,
District : Buldana.
3. Vijay son of Tryambak Ingle,
Aged Major, Occupation : Not known,
Resident of Khamgaon, Tahsil :
Khamgaon, District : Buldhana.
.... RESPONDENTS
.
___________________________________________________________________
Shri A.H.Patil, Advocate for Petitioner.
Shri A.A.Madiwale, A.G.P. for Respondent No.1.
Shri Ramakant Ahirrao, Advocate for Respondent No.2.
Shri M.V.Samarth, Advocate for Respondent No.3.
___________________________________________________________________
CORAM : Z.A.HAQ, J.
DATED : FEBRUARY 17, 2017.
ORAL JUDGMENT :
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Judgment 2 wp916.16.odt 1. Heard. 2. RULE. Rule made returnable forthwith.
3. By this petition, the petitioner who is undisputedly member of the Co-operative Society in question has challenged the order issued by the Assistant Registrar, Co-operative Societies on 3 rd July, 2014 under Section 77A(1) and (2) of the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as "the Act of 1960") by which the respondent No.2 is appointed as Authorized Officer. This order states that the Authorized Officer shall continue to function either till the new Committee is constituted or for the period of 6 months, whichever is earlier. The petitioner has further prayed that the actions taken by the respondent No.2-Authorized Officer enrolling the respondent No.2 as member of the Co-operative Societies and executing sale deed dated 11th December, 2014 in his favour in respect of the property of the Co-operative Society be quashed.
4. The learned advocate for the respondent No.3 has raised preliminary objection to the maintainability of the petition on the following grounds :
i) The impugned order is appealable under Section 152 of the Act of 1960.
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ii) The petitioner claims that the property which is sold by auction by the Authorized Officer belongs to the petitioner and therefore, he is having interest adverse to the co-operative society.
iii) The petition is filed after a period of 18 months on 18th January, 2016 and the document on record of the paper book at page No.56 (Annexure-N) shows that the petitioner was aware about all the events on 13th September, 2014.
iv) That it would not be permissible for this Court to consider the prayer of the petitioner that the sale deed executed by the Authorized Officer after conducting auction be quashed.
5. The learned A.G.P. and the learned advocate for the respondent No.2-Authorized Officer have also raised preliminary objections to the maintainability of the petition on the following grounds :
i) The society has not challenged the impugned order till date which shows that the Co-operative Society is not aggrieved in the matter.
ii) There is inordinate delay in filing the petition.
6. The submission on behalf of the petitioner is that the Co- operative Society became defunct and ceased to operate and therefore, in its meeting held on 4th August, 2002 resolution Nos. 2 and 3 were passed and ::: Uploaded on - 28/02/2017 ::: Downloaded on - 27/08/2017 17:06:51 ::: Judgment 4 wp916.16.odt that action be taken as per Section 102 of the Act of 1960 and in this situation it was not permissible for the Assistant Registrar to exercise his powers under Section 77A of the Act of 1960. To support the submission Shri A.H. Patil, learned advocate for the petitioner has relied on the judgment given by this Court in the case of Kisan Vikas Ginning Pressing Limited Vs. State of Maharashtra, reported in 2001(1) ALL MR 626.
Relying on the judgment given by the Division Bench of this Court in the case of S.M. Kamble Vs. Jt. Regis., Co-op. Societies, reported in 2007(6) Mh.L.J. 890 it is submitted that it was not permissible for the Authorized Officer to take decision regarding disposal of the property of the society. It is submitted that in view of the above proposition and as the appointment of the authorised officer is illegal and void, the sale-deed executed by him has to be declared as illegal and void.
The learned advocate for the petitioner has submitted that the contention of the respondent No.3 that the petitioner is claiming ownership over the property in question is misleading and not correct. It is submitted that the petitioner is not claiming to be the owner of the property in question but his claim is that the property belongs to society and the petitioner had been in possession of the property.
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Judgment 5 wp916.16.odt
7. After considering the submissions made on behalf of the respective parties, I am of the view that the preliminary objection raised on behalf of the respondent No.3 to the maintainability of the petition on the ground that the impugned order is appealable under Section 152 of the Act of 1960 has to be overruled.
The learned A.G.P. and the advocates for the respondent Nos. 2 and 3 have not been able to point out any provision which enables the Assistant Registrar to appoint Authorized Officer to administer the affairs of the society if the society becomes defunct. The respondents relied on the provisions of Section 77A(1)(b-1) of the Act of 1960 to support the order of appointment of the Authorized Officer. This provision enables the Registrar to take action if there is stalement in the constitution of the committee or the committee has ceased to function and vacuum is created in the management. In the present case none of the above situation prevailed but the society itself had become defunct.
8. As rightly pointed by the learned advocate for the petitioner "Committee" is different entity from the "Society". Section 2(7) of the Act of 1960 defines "Committee" as follows :
"2(7) "Committee" means the committee of management or board of directors (or the governing body or other directing body of a co-operative society, by whatever name called, in which the management of the affairs of a society is entrusted." ::: Uploaded on - 28/02/2017 ::: Downloaded on - 27/08/2017 17:06:51 :::
Judgment 6 wp916.16.odt Section 2(27) of the Act of 1960 defines "Society" as follows :
"2(27) "Society" means a co-operative society registered, or deemed to be registered, under this Act which is an autonomous association of persons, united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the co-operative principles and values."
The provisions of Section 77A(1)(b-1) of the Act of 1960 cannot be resorted to when the society has become defunct and has ceased to carry on its operations.
The impugned order refers to the resolution dated 4 th August, 2002. The Assistant Registrar, while issuing the order appointing Authorized Officer was aware about the resolution passed by the society on 4 th August, 2002 that action should be initiated as per Section 102 of the Act of 1960.
9. It being so, the Assistant Registrar could not have appointed the Authorized Officer exercising powers under Section 77A of the Act of 1960. In the judgment given in the case of Kisan Vikas Ginning Pressing Limited (supra) this Court has dealt with the same issue and has laid down that if the society had already passed resolution expressing its intention to bring end to itself and the resolution is intimated to the Registrar, the Registrar has to initiate action as per Section 102 of the Act of 1960 and action cannot be taken as per Section 77A of the Act of 1960. The conclusions are in paragraphs 7 and 8 as follows :
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Judgment 7 wp916.16.odt "7. Having regard to the facts of the present case, I am of the view that the society having resolved to convert itself into a public limited company, it expressed a clear intention to bring an end to itself. The society having intimated this resolution of the society, the Assistant Registrar was entitled to treat this either as an application for winding up in the event it was found that in compliance with Section 102(1)(b) or could have on his own motion initiated the winding up procedure on the ground that the society has ceased to function. It was neither legal nor proper or necessary for the Assistant Registrar to have appointed an Administrator on the society, in exercise of his powers under Section 77A of the Act which assumes that the co-operative society is functioning and the Managing Committee of the society has failed to hold the election after the expiry of the term of the earlier Managing Committee. Section 77A further provides in sub section (2) that the Administrator shall have powers to discharge the function of the committee or any officer of the society. This further shows that the purpose of appointment of an Administrator is to carry on the function of the society. Section 77A therefore cannot be brought into play where the society has ceased to function as a society as result of its own decision. Such a situation would attract the provisions of Section 102 of the Act which provide for liquidation.
8. In the result, I find that there is no justification for the Assistant Registrar to have passed the impugned order dated 04.07.2000 by which the Administrator has been appointed on the petitioner Co-operative society. I, therefore, set aside the said order. The Assistant Registrar is further directed to take appropriate action under section 102 of the Maharashtra Co-operative Societies Act, 1960, as may be appropriate and liquidate the said society. The Assistant Registrar may treat the letter dated 17.04.1999 written by the petitioner Co-operative society intimating that it has resolved to convert itself into a public limited company, as an application for winding up, provided it otherwise complies with the provisions of Section 102(1)(b) of the Act. He may act on his own motion under Section 102 of the Act."
10. In the facts of the present case, when the Registrar was aware about the resolution passed by the society on 4 th August, 2002 the Assistant ::: Uploaded on - 28/02/2017 ::: Downloaded on - 27/08/2017 17:06:51 ::: Judgment 8 wp916.16.odt Registrar could not have exercised powers under Section 77A of the Act of 1960. Therefore, it has to be held that the order issued by the Assistant Registrar on 3rd July, 2014 is illegal and without authority and the appointment of the Authorized Officer is void ab initio.
11. Though the learned advocate for the respondent No.3 tried to distinguish the judgment given in the case of Kisan Vikas Ginning Pressing Limited (supra) by submitting that the provisions of Section 102 of the Act of 1960 are not mandatory, and it is up to the satisfaction of the Registrar whether action as per Section 102 of the Act of 1960 should be initiated or not, nothing is pointed out to show that the Registrar took a decision that action as per Section 102 of the Act of 1960 was not required to be taken and the powers under Section 77A of the Act of 1960 were to be exercised. Therefore, it has to be held that the appointment of the Authorised Officer is illegal and void.
12. Once it is held that the appointment of the Authorized Officer is illegal and void, the action taken by him will have to be held to be illegal. The learned advocates for the respondents, relying on the provisions of Section 77 of the Act of 1960, have submitted that even if the appointment of the Authorized Officer is held to be invalid, the actions taken by him while discharging his duties as Authorised Officer cannot be held to be invalid. ::: Uploaded on - 28/02/2017 ::: Downloaded on - 27/08/2017 17:06:51 :::
Judgment 9 wp916.16.odt The learned advocate for the respondent No.3 has relied on the judgment given by Hon'ble Supreme Court in the case of Gokaraju Rangaraju Vs. State of A.P., reported in AIR 1981 SC 1473.
The submission cannot be accepted for two reasons :
Firstly, the Authorized Officer could not have taken decision regarding disposal of the property of the society as laid down in the judgment given by the Division Bench of this Court in the case of S.M.Kamble (supra). Secondly, in the present case the appointment of the Authorized Officer is not held to be invalid, but held to be illegal and void-ab-initio.
13. The conduct of the respondent Nos. 1 and 2 and their high handed action is on record. By the order issued by the respondent No.1 Assistant Registrar on 3rd July, 2014 the respondent No.2 was appointed as Authorized Officer, the appointment being till constitution of the new Committee or till 6 months from the date of order whichever was earlier. The constitution of the new committee could not take place. The appointment of the respondent No.2 as Authorized Officer came to an end on 2 nd January, 2015. There is nothing on the record to show that any further order was issued directing continuance of the Authorized Officer. On 13 th January, 2017 this Court passed order calling upon the respondent Nos. 1 and 2 to file affidavit explaining under what authority the respondent No.2 continued as ::: Uploaded on - 28/02/2017 ::: Downloaded on - 27/08/2017 17:06:51 ::: Judgment 10 wp916.16.odt authorized officer. Though the respondent Nos. 1 and 2 have filed affidavits nothing is placed on record to show that any further order was issued continuing the Authorized Officer over the affairs of the society.
14. I am conscious that in normal course while exercising extraordinary jurisdiction the prayer for cancelling the sale-deed should not be considered, however, as the appointment of Authorized Officer is found to be illegal and void ab initio and the Authorized Officer even otherwise could not have taken any decision to sell the property of the society, in my view, I would be failing in my duty if the wrong done is not corrected.
15. Hence, the following order :
i) The order issued by the Assistant Registrar on 3rd July, 2014 appointing respondent No.2 as Authorized Officer is set aside.
ii) The decision of the respondent No.2 to enroll the respondent No.3 as member of the society is quashed.
iii) The sale-deed executed by the respondent No.2 as Authorized Officer in favour of the respondent No.3 on 11th December, 2014 in respect of the property of the society is declared to be illegal and is cancelled.
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Judgment 11 wp916.16.odt
iv) The Registrar, Co-operative Societies shall conduct an enquiry
against the concerned Assistant Registrar and the respondent No.2-Authorized Officer for abusing their powers and authority and in the matter of continuation of respondent No.2 as Authorized Officer beyond the period of six months without any order from the competent authority. The action taken report shall be placed on record of this petition within four months.
Shri A.A.Madiwale shall intimate this order to the Registrar, Co- operative Societies immediately.
Rule is made absolute in the above terms. In the circumstances, the parties to bear their own costs.
At this stage, the learned advocate for the respondent No.3 has submitted that without prejudice to his rights of challenging this judgment, the order may be passed regarding refund of the amount paid for purchasing the property in question, along with interest.
The advocate for the respondent No.2 is not in a position to make statement whether the amount is still available with the society or not. ::: Uploaded on - 28/02/2017 ::: Downloaded on - 27/08/2017 17:06:51 :::
Judgment 12 wp916.16.odt The respondent No.3 will be at liberty to initiate appropriate proceedings for recovery of the amount along with interest, if so advised according to law.
The advocate for the petitioner prays that the effect and operation of this judgment be kept in abeyance for 6 weeks to enable the respondent No.3 to take appropriate action in the matter.
In view of the conclusions recorded above, this prayer is rejected.
JUDGE RRaut..
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