Bombay High Court
Eknath Ashiram Alekar And Ors. vs State Of Maharashtra And Ors. on 2 August, 1989
Equivalent citations: 1989(3)BOMCR165
JUDGMENT B.N. Deshmukh, J.
1. Writ Petition No. 2187 of 1988 is filed by 870 petitioners, who claim to be sugar-cane growers within the area of operation and also within the reserved zone for supply of sugar cane to Respondent No. 3-Shrigonda Sahakari Sakhar Karkhana. Ltd. hereinafter called "sugar factory". Writ petition No. 417 of 1989 is filed by the 9 petitioners, who are all Directors of the said factory. As the questions involved and raised in both these petitions were almost identical and co-related, heard both these petitions together.
2. The substantial questions, which are agitated in these two petitions, are that the membership is granted by Respondent No. 5, who is chairman of the sugar factory, on one single day, i.e. on 30th June, 1988, when all the applications of as many as 3,387 persons were rushed through for the grant of membership. The petitioners contended that the membership is conferred in these 3,387 persons without following procedure prescribed by the Maharashtra Co-operative Societies Act, 1960; the Maharashtra Co-operative Societies Rules, 1961 and the Bye-laws of the sugar factory framed under the Act and Rules. It is further contended that the membership is granted to these 3,387 persons as they are politically friendly to Respondent No. 5 the present Chairman of the sugar factory.
3. The other contention raised in the petitions that as the term of the Board of Directors of the sugar factory was to expire, the membership is conferred on 30-6-1988 on 3,387 persons hurriedly, so that their names could be enrolled in the list of voters for the ensuing election to the Board of Director. According to them, the inclusion of the names of these persons is illegal and is also violative of the principles of natural justice.
4. The petitioners in Writ Petition No. 2187 of 1988 have contended that all the 870 petitioners are not only sugar-cane growers within the area of operation and within the prescribed reserved zone, but they have also supplied sugar-cane to the sugar factory. The deductions towards several factors, namely, for deposits for shares, non-refundable deposits; and by way of development deposit, were made by the sugar factory and even though, they were eligible to become members of the sugar factory on preferential basis, they are denied the membership and the membership is given to 3,387 persons, many of whom are not eligible to become members of the sugar factory at all. They also contended that there are many persons, who are not owners of any land and who have not grown and supplied sugar-cane to the sugar factory at all but, still they have been made members of the sugar factory on one single day overlooking the preferential claim of the petitioners to become members of the sugar factory.
5. On the contrary, the contention on behalf of the sugar factory and other respondents is that the writ petition is not maintainable, as it involves serval disputed questions of facts. They also maintained that the procedure prescribed by law is not at all flouted, but the membership is conferred on 3,387 persons legally and properly.
6. The contention of the Respondents further is that alternative remedy is also available to the petitioners. Not only that, but, in fact, objections were raised before the Collector for including names of 3,387 persons in the list of voters on the ground of eligibility of membership also. The objections were being considered by the competent authority and, in the meanwhile the process of scrutiny of the voters' list is stopped, because of the intervention of this Court by granting interim relief. According to them therefore the petitioners were pursuing the alternative remedy and in view of that fact, the writ petitions cannot be entertained and should not be entertained.
7. Shri K.G. Deo, learned Assistant Government Pleader, appearing for the State Government and the officers of the Co-operation Department, contended that in view of the provisions of section 91 of the Act, the petitioners can pursue the remedy available under that section by filing a dispute instead of coming to this Court by way of the writ petition.
8. At the outset, it must be said that in both the writ petitions, several disputed questions of facts are certainly raised by the petitioners. For instance, the petitioners in Writ Petition No. 2187 of 1988 have contended that they are sugar-cane growers within the area of operation and within the reserved zone of the sugar factory, that they have supplied sugar-cane to the sugar factory for several years in the past. They have also contended that certain deductions are made under different heads from the amounts of the petitioners. They have also contended that out of 3,387 persons, to whom membership is granted, more than 1,900 persons are not sugar-cane growers at all. The question of supplying sugar-cane by these persons to the sugar factory, therefore, does not arise. Some documents are produced to show that some of the persons are not owners of any piece of land in the area of operation or in the reserved zone of the sugar factory. These facts are disputed by the Respondent-sugar factory and some other Respondents. In the nature of things, it is not possible for this Court to consider the claim of each and every. Petitioner on the factual data mentioned in the petition. There is no doubt, therefore, that the right to become member is claimed by the petitioners on certain disputed facts. So also, the grant of membership to more than 3,000 persons on 30-6-1988 is challenged on certain disputed questions of facts. It is not open for this Court, therefore, to enter into the claim of each of the petitioner individually for membership, or, to consider the claim of the petitioners as against more than 3,000 persons to whom membership is already said have been granted by Respondent No. 5 acting as Chairman of the sugar factory.
9. If that was the only position in the present case, probably it was not possible to go into the other questions raised in the petitions and consider the points raised. But, here, the main challenge in both the petitions is that the membership is granted to 3,387 persons without following proper procedure prescribed by the Act, the rules and the Bye-laws. In that event, it was open for this Court not to consider the cases of the petitioners individually, or, of any one or all of the persons on whom the membership is conferred. But, it is open for this Court to consider whether all or any of the petitioners are made to suffer by the grant of membership to over 3,000 persons without following the procedure prescribed by law.
10. It is also clear from the averments made in the petitions and also from the replies filed on behalf of various respondents that apart from the petitioners in Writ Petition No. 2187 of 1988, there are several other person, who had supplied sugar-cane to the sugar factory for number of years and the amounts are also deducted from the sugar-cane price payable to them, towards different heads, including towards deposit for shares The questions raised in the petitions, therefore, will have to be considered in this background, as the questions relate to the right of membership of sugar factory not only qua the petitioners in Writ Petition No. 2187 of 1988 or, qua the persons on whom the membership is granted on 30-6-1988, but the questions also affect the interests of so many other persons, who are not before the Court at all. We are therefore, required to proceed to consider the points raised in the petitions on merits.
11. Bye-law No. 18 of the Bye-laws of the sugar factory relates to the membership. It provides that there shall be four categories of members. The main provisions in this connection is that the right of membership will be said to have been conferred on a person on the approval of the application of the said person by the Managing Committee only. Bye-law No. 18(1) provides the terms and conditions of membership. We are mainly concerned with Condition No. 2, wherein it is provided that the person applying for membership should hold the land as owner or as tenant within the area of operation and should be cultivating sugar-cane to the extent of at least half an acre. Condition No. 5 mentioned in the Bye-law relates to making a written application for becoming member, while condition No. 7 mentions that the person should have asked for minimum of one share and should have paid minimum of Rs. 500/- towards the share amount.
12. Chapter III of the Rules deals with members, their rights and liabilities. Rule 19(ii) provides as follows:---
"No person shall be admitted as a member from of a society unless.
(i) ........
(ii) his application is approved by the committee of the society in pursuance of the powers conferred on it in that behalf and subject to such resolution as the general body of members may in pursuance of the powers conferred on it in that behalf from time to time pass, and ......"
Thus, it is clear from the provisions of Rule 19(ii) and Bye-law No. 18 that the application for membership of any person is required to be approved by the Committee of the society, subject, however, to such resolution as the general body of members may in pursuance of the powers conferred on it in that behalf from time to time pass. Mere reading of the relevant rule and the bye-law shows that power to grant approval to the membership vests with the committee of the society. That power is restricted merely to the resolution of the general body, which shows that the general body is also empowered to pass a resolution in this connection, giving directions to the managing committee and not to any other person or body.
13. In the present case, it is the contention of the petitioners that the managing committee of the sugar factory has not at all granted membership to 3,387 persons on 30-6-1988, nor the managing committee had granted approval to the applications of those persons individually or collectively. The contention raised in the petition in this regard is disputed by the concerned respondents by contending that the general body of the sugar factory has passed a resolution conferring power and right on respondent No. 5 as the chairman of sugar factory to grant membership. For that purpose, reliance is placed on the resolution of the general body held on 20-2-1988. We are concerned with Resolution No. 5 passed in that general body meeting. Resolution No. 5 is to the following effect:---
"To take note of the budgetary proposals forwarded by the managing committee for the year 1986-87 and to empower the managing committee to increase the share capital as per the Bye-laws."
This was the subject matter of Resolution No. 5. This subject matter was the part of the agenda, which was communicated to the members of the sugar factory who were called upon to attend the general body meeting. Under this head and while considering this resolution, it is mentioned in the proceedings that the general body has resolved that as the extention of the capacity is granted and though new shares were available for sale, the sale has not taken place till then, and the Chairman was authorised to give membership by making sale of new shares. Relying on this part of the resolution, it was contended that grant of shares by respondent No. 5 Chairman to 3,387 persons on 30-6- 1988 was proper and legal.
14. As already noted above, under the provisions of the Bye-laws and the Rules, it is the Managing Committee and not respondent No. 5 Chairman, who is empowered to consider the application for membership, but the applications for membership can be approved only by the Managing Committee, or, the Board of Directors.
15. The resolution, which is passed, was not the subject matter of the agenda. The main item for which the general body meeting was called upon to consider was regarding increase in the share capital and to note down the budgetary proposals for the year 1986-87. Though that subject was circulated to the members of the general body, while passing the resolution on the subject, it is factually mentioned at the end of the resolution that the shares, which were approved by the State Government, were lying unsold for number of years and it is necessary to make all efforts to increase the share capital and, therefore, respondent No. 5-Chairman of the sugar factory was authorised to sell the share to new members.
16. Apart form the fact that the question of selling the shares to new members was not part of the agenda of the meeting, the question is : Whether the general body has such power to authorise the Chairman of the sugar factory to sell the shares to the new members ? As noted earlier, the provisions of the rules and the bye-laws empower the Committee of the society to grant approval to the applications for membership. The right conferred by sub-rule (ii) of Rule 19 of the said rules relating to the power of the general body is of giving directions to the managing committee regarding the shares. Considering the provisions of the rule from any angle, it cannot be said that a blanket power is conferred on the general body to authorise any person or any body other than the committee of the society to grant approval to the membership of new shareholders. To our mind, therefore, the resolution is ultra vires the powers conferred on the general body of the society by the provisions of law.
17. We, therefore, hold that Resolution No. 5 to that extent is passed in excess of the powers vested in the general body of the society. That part of the said resolution being separable from the other text of the resolution is required to be set aside as illegal.
18. Shri Mhase, learned Counsel appearing for respondent No. 3, contended that the general body of the sugar factory is the final authority and has overriding powers over the activities of the managing committee, established under a bye-law for the general management. According to him, such power is vested in the general body as per sections 72 and 73 of the Act. For that purpose, he has relied upon a decision of Division Bench of this Court in A.I. Co-operative Housing Society Limited v. Laxminarayan Goel and others, 1969 Mh.L.J. 886. That authority does not help him at all. What is held by this Court is that the provisions of section 72 of the Act specifically vests final authority of every Society in the general body and it is subject only to the provisions of the Act and the rules made thereunder. The finality of the power of the general body is not absolute, but is subject to the provisions of the Act the rules and the bye-laws and the same is made clear in the decision itself.
19. There is, therefore, no substance in the contention that the general body had a power to authorise respondent No. 5 to grant new membership, irrespective of the committee of the sugar factory.
20. There is also no substance in the contention that the subject matter was pending before the Collector by way of objections raised to the list of voters. It must be noted at this stage, having regard to the provisions of the Maharashtra Specified Co-operative Societies (Election to Committees), Rules. 1971, that the petitioner in Writ Petition No. 2187 of 1988 had no right to challenge the list of voters or to get their names included in the voters, list, because, under the provisions of Rules 4 and 6 of the 1971 Rules, the power is conferred on the members of the society only. Admittedly, the petitioners in Writ Petition No. 2187 of 2988 were not admitted to membership at all Natu rally, therefore they had no right under the relevant rules to raise any objection to the membership of 3,387 persons nor they had any right to make application for inclusion of their names in the list of voters. In this connection, reference can be made to the decision of this Court in Dhondiba Parshuram Lakade and others v. Someshwar Sahakari Sakhar Karkhana Ltd. and others, 1979 Mh.L.J. 311, where, while construing the provisions of the 1971 rules, regarding the election to specified co operative society viz., the sugar factory this Court has held that the Collector cannot under Rule 6(1) embark on an enquiry into the entitlement to membership of persons shown in register of members. He is only permitted to ensure identity of the other concerned. In view of this decision, it cannot be said that the question of membership of the persons shown in the register by the sugar factory was open to challenge before the Collector in an enquiry into the validity of the electoral roll under Rule 6 (1) of the 1971 Rules.
21. The learned Counsel appearing for respondents Nos. 3 and 5 have contended that as per Rule 6, sub-rule (5), of the 1971 Rules, which was brought on the statute book after the decision of this Court mentioned above, such a power vests is the Collector. We fail to understand as to how the provisions of sub-rule (5) of Rule 6 of the 1971 Rules affect the ratio laid down by this Court in Dhondiba's case (supra), because, what is provided in sub-rule (5) is that any person, who is member of the society as on 30th day of June of the year immediately preceding the year in which such election is due and whose name is not included in the final list of voters, may apply to the Collector for getting his name included in the final list of voters. Sub-rule (6) of Rule 6 provides for enquiry in such a situation. The question of challenge to membership of the persons, who are already included in the list of voters, is not at all covered by the provisions of sub-rule (5) or sub-rule (6) of Rule 6 of the 1971 Rules.
22. It was also contended that as the provisional list of voters is forwarded to the Collector through the District Deputy Registrar, it should be presumed that the said list is forwarded by the District Deputy Registrar after scrutiny into the membership also. We are unable to appreciate as to how such a presumption can arise, more so, in the facts of the present case. There is ample documentary evidence on record produced by the petitioners to show that even though the District Deputy Registrar and other authorities of the Co-operation Department were directing respondent No. 3 sugar factory and respondent No. 5 Chairman not to grant membership to any person without following the procedure prescribed by law, the membership was granted by the Chairman. Reference can be made to the document produced at Exhibit 'Q, wherein the Regional Deputy Director of Sugar, Ahmednagar, had informed the managing director of the sugar factory that inspite of clear directions given to the sugar factory, new membership is being granted in violation of the provisions of the Act, Rules and the bye-laws. The managing director was further informed that the Regional Deputy Director of Sugar is visiting the sugar factory for holding enquiry in the matter of membership. There is also an order of the Deputy Director (Sugar). Ahmednagar, on record at Exhibit 'R'. In that order, it is clearly mentioned that the shares are sold to new members, ignoring the directions given by the concerned authorities and also by flouting the provisions of law. It was further mentioned in the order that new members are approved by not following the provisions of the Act. The rules and the bye-laws. Not only that, but the managing director of the sugar factory has all the while represented to the petitioners and others that no new shares are being sold by the factory. Exhibit 'N' is the letter dated 29-6-1988 of the managing director of sugar factory to petitioner No. 1 in Writ Petition No. 417 of 1989, informing him that the committee of the sugar factory has not yet adopted the policy regarding the sale of new shares. Not only that, petitioner No. 1 was further informed that he (the managing director) has given instructions to the accountant not to accept any amount towards the new share This letter is dated 29-6-1988 and actually shares are sold to 3,387 persons on 30-6-1988 i.e., on the very next day. The petitioners are justified in contending that the shares are sold in the background of ensuing election.
23. Regarding the claim of the petitioners in Writ Petition No. 2187 of 1988, it was contended on behalf of respondents Nos. 3 and 5 that out of 870 persons, more that 100 petitioners are already granted membership. So also, it is contended that as per the policy adopted by respondent No. 5 in the matter of allotment of shares, another 131 petitioners are eligible to become members of the sugar factory. The question does not come to an end there. What is contended regarding the rest of the petitioners and other persons, who have supplied sugarcane to the sugar factory, is the deductions towards share amount is not made by the sugar factory and even though the deductions were made. Many of them have withdrawn that amount. Regarding some others, it was also contended that the amount fell short of Rs. 500/-, which was required as per Condition No.7 of Bye-law No.18 of the relevant bye-laws. There is no substance in this contention also, because, admittedly, the new shares were available with the sugar factory from the year 1985. Till 1989 they were not offered for sale by the sugar factory. Many of the petitioners and many others, who are not before the Court, had no knowledge at all that the shares were being offered for sale. If the petitioners and others were made aware of by giving notice, individually or even by a public notice, the petitioners, who were required to approach this Court for considering their claim for membership, would not have failed to apply with the necessary requirements even regarding payment of Rs. 500/ towards share amount. Merely because the share amount lying in the names of some of the petitioners fell short of Rs. 500/-, it cannot be said that, given opportunity, they would not have complied with the requirements. In fact, the conduct of the respondents clearly shows that public offer of sale of the shares was never made and they never intended to do that also, because, from the letter of the managing director dated 26-6-1988 it is clear that they wanted at least some persons to be kept in darkness regarding the sale of the shares. The deficiency, which is agitated in this Court, in the claim of the petitioners is raised by way of a defence to answer the petition. If respondents Nos. 3 and 5 were really interested in doing things lawfully, then they would not have failed to inform the petitioners and others that the shares are offered for sale. On the contrary they have informed some of the petitioner at least that no share is being sold as late as on 29-6-1988. And in fact, the shares are admittedly sold on 30-6-1988, which indicates that the pointing out towards the deficiency of the claim is clearly an afterthought and cannot be considered at all.
24. We have allowed the application for intervention on behalf of some of the persons who are granted membership. Shri Dhorde, learned Counsel who appeared for the Interveners, had contended that in the absence of any material before this Court, the challenge to the membership of 3,387 persons, who are granted membership on 30-6-1988, is very vague and cannot be considered. His further contention is that every person, who is eligible, is entitled to become member of the sugar factory and, as such, the grant of membership to more than 3000 persons is not open for challenge at this stage. He has placed reliance upon section 23(4) of the Act. According to him, the allotement of share is not dependent on the increase of the share capital or on the extension of the capacity of the sugar factory. He says, if a person is otherwise eligible, every such person is entitled to become member of the sugar factory and, in view of this, the challenge to the conferment of the membership on 3, 387 persons is not open in this writ petition. We would have accepted the contention of Shri Dhorde if we were satisfied that the applications of each one of the 3,387 persons were scrutinised by the managing committee of the sugar factory and the question of eligibility was determined by the managing Committee of the sugar factory. Then, probably, it was not open for challenge. But, here admittedly the applications did not at all go to the managing committee of the society. The applications were admittedly considered by respondent No. 5-Chairam alone on the basis of the resolution of the general body. We cannot, therefore, consider that the eligibility of those 3,387 persons is scrutinised by the competent authority.
25. The other argument, which was pressed into service for respondents Nos. 3 and 5 and also for the Interveners, is that the managing committee, or, the board of direction; the sugar factory has granted approval to the action of the Chairman-respondent No.5 in granting membership to more than 3,000 persons on 30-6-1988. They have relied upon the Resolution No. 11 passed in the meeting of the managing committee on 18-8-1988. Resolution No. 11 relates to approving the authorisation by the general body to the Chairman regarding enrolment of new membership. The proceedings of the meeting are produced at Exhibit 'N'. There is no dispute that the subject-matter of this resolution was not on the agend and was taken up in the meeting as a special subject. In this connection, it is necessary to refer to a communication by the nine directors dated 18-8-1988 itself, which is produced at Exhibit A-4. The nine directors, under their signatures had protested the consideration of any subject, which was not on the agenda. They had also proposed that no new subject other than the subjects mentioned in the agenda shall be discussed in the meeting at all. They had informed this under their own signatures. The copy of the same was also forwarded to the Regional Deputy Director (Sugar), Ahemdnagar, to make a request that this communication of the petitioners, i.e., the nine directors, should form part of the proceedings. Inspite of best efforts made by the nine directors, requesting not to consider any special subject on the agenda; not only that, but their informing the Regional Deputy Director of Sugar that this communication of theirs should from part of the proceedings, we do not find any place to this communication in the proceedings of the meeting dated 18-8-1988 produced before us at Exhibit 'N'. In this connection, it must be noted that these very directors and some other persons were protesting and were in communication with the Regional Deputy Director of Sugar and other authorities of the Co-operation Department, informing them that the membership is likely to be conferred by respondent No. 5 Chairman illegally and without following proper procedure of law. It is impossible to conceive that they will be party to the resolution thereafter in a meeting dated 18-8-1988. The communication dated 18-8-1988 seems to be genuine in the light of the conduct of these nine directors in the past for several months. Not only that but some of them have approached the authorities before 30-6-1988 bringing to their notice that the membership is likely to be conferred by respondent No. 5-Chairman illegally and that too, without bringing the subject to the notice of the managing committee. In view of the past conduct of these nine directors, we prefer to rely on the communication dated 18-8-1988, Exhibit A-4, rather than resolution No. 11 mentioned in the proceedings of the meeting dated 18-8-1988.
26. The second aspect of this matter is that even assuming that such a resolution is passed in the meeting of the managing committee, the law does not permit passing of such resolution in excess of the powers vested in the managing committee. As stated earlier, the applications of membership are to be considered and approved by the managing committee. From the resolution, it does not seem that the applications were considered by the managing committee and thereafter the approval is granted. Such approval cannot be said to be approval within the meaning of Rule 19(ii) and for the purposes of Bye-law No. 18 also. Therefore. There is no substance in the contention in this regard.
27. The arguments advanced on behalf of respondents Nos. 3, 5 and Interveners, some of them relate to the technical matters, such as, that the petitioners in Writ Petition No. 2187 of 1988 and other persons had not filed applications as required by the bye-law for the membership; or, that the applications, if made by those petitioners and some other persons, in the year 1978, exhausted and no fresh applications were made after the shares were available for sale. From the record, which is produced before us, we find that some of the petitioners and other persons had preferred applications for getting shares not only in the year 1978, but subsequently also in the year 1983. No material is produced before us to show that the persons, who were granted membership on 30-6-1988 did make fresh applications any time. We do not find any substance in this contention, because inspite of the fact that new shares were available for sale, right from 1985, the persons, who had supplied the sugar cane, were not directed to forward their applications for membership, nor, that they were made aware of the fact that new shares are available for sale
28. The shares available for sale form 1985 and still no steps were taken for their sale to the eligible persons. But, some persons are granted shares abruptly on 30-6-1988. The claim of the petitioners and other persons cannot be brushed aside on the ground that no applications were pending in that behalf seeking membership of the sugar factory. The fact that as many as 870 persons have approached this Court for getting shares indicates that if they had knowledge and if opportunity was given to them, they would not have failed to prefer applications in the prescribed form, but also have complied with the requirements of share amount and would have met other conditions as per the bye-laws. From the record produced in this petition, it is clear that an attempt was made till 29-6-1988 to impress upon some of the persons that the sugar factory is not going to sale the shares, without following proper procedure of law. Inspite of such representation being made till 29-6-1988, on the very next day, i.e., 30-6-1988, more than 3000 shares are sold. It shows that there is no substance in the technical arguments raised on behalf of the respondents.
29. The learned Assistant Government Pleader, Shri Deo, appearing for the State and officers of the Co-operation Department, so also, the learned Counsel for respondents Nos. 3, 5 and the Interveners, laid stress on the provisions of section 91 of the Act regarding settlement of disputes. According to them, the alternative remedy is available to the petitioners and others under section 91 for approaching the Co-operative Court. We are unable to appreciate as to how the remedy under section 91 of the Act come in the way of the petitioners in seeking relief by way of this petition under Article 226. In the present case, the question of membership of 3,387 persons is not an isolated act, but, by virtue of their membership, they are included in the list of voters. In fact, the very purpose of enrolling as many as 3,387 persons on 30-6-1988 is to confer right to vote at the ensuing election on these persons. The claim of the membership, therefore, has to be seen in the light of the fact that their names also are included in the list of voters. Surprisingly, in the present case, the authorities of the Co-operation Department, on the one hand, had directed respondents Nos. 3 and 5 not to enrol members without following proper procedure prescribed by law; and, at the same time, on the other hand, they had forwarded the list of voters, as communicated to them by the sugar factory, to the Collector. The list contained the names of 3,387 persons, who were enrolled on 30-6-1988. The authorities of the Co-operation Department, therefore, at one stage, were directing respondents Nos. 3 and 5 not to grant membership without following proper procedure of law to the persons; and, at the same time, knowing fully well that some persons are enrolled by respondents Nos. 3 and 5 on 30-6-1988 flouting the directions given by the authorities of the Co-operation Department, still forwarded the provisional list of voters containing the names of such persons. The question of membership to more than 3,000 persons has thus become integral part of the list of voters for the ensuing elections, as their names were forwarded as required by the 1971 Rules to the Collector through the officers of the Co-operation Department.
30. Section 91 of the Act excludes from its operation the elections to specified co-operative societies. There is no dispute that the sugar factory is such a specified co-operative society. As the question of membership has become integral part of the voters' list, the dispute under section 91 could not have been raised, challenging the voters' list, on the ground that newly added members on 30-6-1988 are not eligible to become members of the sugar factory.
31. The remedy under section 91 of the Act, therefore, cannot be said to be available to the petitioners and others. The petitioners in Writ Petition No. 2187 of 1988 cannot even be said to be members of the sugar factory at this stage.
32. The other contention was that the Collector was scrutinising the voters' list in the light of the objections submitted before him. The objections related to the grant of membership to more than 3,000 persons. As the matter was pending before the Collector, who was the competent authority to finalise the list of voters, it is not necessary to interfere at this stage in this writ petition. We are unable to appreciate this contention also, because, even though the objections were being raised for the inclusion of those more than 3,000 persons as voters in the list, the Collector could not have decided the legality or validity of membership of these persons. While construing the provisions of the 1971 Rules in this regard, the Division Bench of this Court has held in Dhondiba's case (cited supra) that the Collector cannot under Rule 6 (1) embark upon an enquiry into the entitlement of persons mentioned in register of members. He is only permitted to ensure identity of the voters concerned. The question at the most before the Collector for consideration was regarding the identity of the voter and he could not have considered the question of entitlement to membership of the persons in an enquiry of such nature. The subsequent addition of sub-rule (5), in our opinion, does not affect the ratio laid down in that decision
33. Sri Chapalgaonkar relied upon the decision of the Supreme Court in Bar Council of Delhi and another v. Surjeet Singh and others, and contended that this is a fit case wherein this Court is required to interfere, as the elections which are likely to be held on the basis of defective voters' list, will be invalid. We are in agreement with this proposition, as the provisional voters' list in the present case consisted of about 9,000 voters, out of which more than 3,000 persons were enrolled on 30-6-1988. The entitlement to membership of these persons is under challenge. As the membership is conferred without following the proper procedure prescribed by law. The same is challenged. The entitlement of membership of more than one-third of the voters included in the provisional list of voter is being challenged. So also, the Collector had no jurisdiction to go into the question of entitlement to membership. The petitioners had no other recourse than to prefer writ petition under Article 226. In view of the ratio laid down by the Supreme Court in Delhi Bar Council's case (cited supra), this Court is required to interfere at this stage.
34. It was also contended on behalf of the Interveners that none of the persons from those, who are granted membership on 30-6-1988, are made parties to the petition and in the absence of those persons, no relief can be granted in these petitions. It is true that in both the petitions, none of those affected persons are made parties, but an application was made for intervention on behalf of some of such persons in Writ Petition No. 417 of 1989. That application was granted and intervention by some of the persons was allowed. Not only that, but the arguments advanced on behalf of them were heard by us at the time of hearing of both these writ petitions. Similar question was considered by the Supreme Court in Prabodh Verma and others v. State of Uttar Pradesh and others, and It was held on the question of necessary parties that if the persons to be vitally affected, large in number, are not made respondents, the High Court should not proceed with writ petition without insisting on such persons or some of them in representative capacity being made respondents. In view of this ratio laid down by the Supreme Court, in this case, even though the petitioners had failed to make any one of the 3,387 persons as respondents, the fact that some of such of the persons had intervened in the proceedings and were heard cannot be ignored, and as the entire hearing of both the petitions, including the claim of the Interveners, is heard together the basic requirement of notice and opportunity stands satisfied in the present case.
35. On the question of relief to be granted, much arguments were advanced on both sides. It was contended on behalf of the Respondents that if this Court cannot embark upon an enquiry of such nature by itself, there are no provisions in the Act by which this Court can direct the officers of the State Government, and particulary the officers of the Co-operation Department, to make an enquiry into the question of memberships. The provisions of section 89-A of the Act, in our opinion, and sufficient to direct the authorities of the Co-operation Department to hold an enquiry in the matter. Section 89-A of the Act provides that it shall be competent for the Registrar to inspect or cause to be inspected the working of any society to ensure that (a) the provisions of the Act, the Rules and the bye-laws of the society are being property followed by the society. So also, Clause (d) of said section 89-A provides that the Registrar is required to ensure that the society is following the co-operative principles and the directives or directions given by the State Government in accordance with the provisions of the Act, and the Rules made thereunder. In present case, as already stated, the provisions of the Act, the Rules and the bye-laws are not followed by the sugar factory while granting new membership to more than 3000 persons. Not only that, but the directions given by the authorities in this regard were overlooked.
36. A useful reference can be made to the decision of Division Bench of this Court (Aurangabad Bench) in Writ Petition No. 1166 of 1986, wherein directions were given to the Registrar of Co-operative Societies to hold an enquiry.
37. We, therefore, set aside the membership granted to 3,387 persons on 30-6-1988 by Respondents Nos. 3 and 5 direct the Joint Director of Sugar, Maharashtra State, Pune, to hold an enquiry in the matter and then grant membership to such of those eligible persons, who are entitled to become members of the sugar factory. While granting membership, the Joint Director of Sugar shall take into consideration the preferences required to be given as per the bye-laws.
38. The Joint Director of Sugar should give notice to all those persons, who are not members of the sugar factory and who have supplied sugar-cane in the past, and consider the question of eligibility as per the provisions of the Act, the Rules and the Bye-laws, including any preferences required to be given to any class of persons in the matter of membership. The applications shall be invited from such of the persons. They should also be given opportunity to meet the deficiencies, if any, regarding the conditions, whichever, are applicable. The Joint Director of Sugar, while granting membership, shall bear in mind the provisions of section 23(4) of the Act. After holding enquiry, the list of new members of the sugar factory shall be forwarded to the sugar factory to make the corrections in the registers to enable them to include the names of these persons as members of the sugar factory All those who would be directed by the Joint Director of Sugar to be enrolled as members of the sugar factory shall be deemed to be members as on 30-6-1988. The enquiry shall be completed, as far as possible, within, six months.
39. With these directions, both the petitions are disposed of. No order as to costs.