High Court · 2024
Facts
(1) wp-3352-2001.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.3352 OF 2001Kamadhenu Sahakari Grahanirman Sanstha Ltd., Jadhavwadi, New Market Area, Aurangabad, through its Secretary...PetitionerVersus1.Suresh S/o. Narayan Madekar,Age: Major, occu. resident of R-N 11/A, CIDCO, behind Hotel Sharad, Aurangabad;2.The Joint Additional Registrar,Cooperative Societies, Aurangabad;3.The Secretary,Cooperation Department,Government of Maharashtra Mantralaya, Mumbai-400032;4.The State of Maharashtra ..Respondents....Mr. Madhav Ghode h/f Mr. P. K. Joshi, Advocate for Petitioner.Mr. P. R. Katneshwarkar, Advocate for Respondent No.1.Mr. N. D. Raje, AGP for Respondent Nos.2, 3 and 4.… CORAM : S. G. CHAPALGAONKAR, J. DATED : 12th JULY 2024..JUDGMENT:- 1.Rule. Rule made returnable forthwith. By the consent of theparties, matter is taken up for final hearing at the stage ofadmission.2.The petitioner impugns the judgment and order dated12.08.1998 passed by the Joint Additional Registrar, Co-operative (2) wp-3352-2001.odtSociety, Aurangabad in Appeal No.80/1997 as well as order dated18.07.2001 passed by the Secretary, Co-operation Department,Government of Maharashtra in Revision Petition No.96/1999.3.The petitioner is Co-operative Housing Society registeredunder Maharashtra Co-operative Societies Act, 1960 (for short‘MCS Act, 1960’). The respondent no.1 was its member. Thegeneral body meeting of the Society was held on 08.12.1991,wherein it was decided that each member should contributeRs.12,000/- towards development expenses of the Society. Therespondent no.1 was present in the meeting. Neither, he depositthe amount as per resolution nor had he made application forextension of time. On 11.07.1993, the general body meeting of theSociety was convened. The respondent no.1 was served with thenotice of meeting. However, he deliberately remained absent atmeeting. Hence, Resolution was passed on 11.07.1993 to expel himfrom membership on the count of his non-cooperation. The decisionof the Society was referred to Taluka Deputy Registrar,Cooperative Society, Aurangabad for confirmation. On 11.08.1994,said Authority confirmed and upheld the decision of expulsion ofrespondent no.1. Aggrieved by the said decision, respondent no.1filed Appeal under Section 152 of the MCS Act, 1960 beforerespondent no.2-Joint Additional Registrar, Co-operative Society,Aurangabad. The said Appeal came to be allowed. Then aggrievedpetitioner-Society filed Revision before state, which came to bedismissed vide impugned order dated 18.07.2001. Consequently,Taluka Registrar, Co-operative Society issued communicationdated 01.08.2001 to implement the decision of respondent no.2dated 12.08.1998. Aggrieved by the aforesaid orders, thepetitioner-Society has filed present Writ Petition. (3) wp-3352-2001.odt4.Mr. Ghode, learned Advocate appearing for the petitionervehemently submits that in general body meeting dated08.12.1991, the decision was taken to contribute Rs.12,000/- permember towards development expenses of the Society. Therespondent no.1 was party to such Resolution. He failed to makepayment and acted contrary to the bye-laws of the Society. He hadnot made any application for extension of time to deposit theamount. Due to non-cooperation of respondent no.1, the Societypassed Resolution dated 11.07.1993 to expel him. The cheque ofRs.7000/- was posted to respondent no.1 against his shares.However, he refused to accept the same. Thereafter, specialmessenger was sent with a request to accept the cheque. However,respondent no.1 refused to accede the request. Thereafter,petitioner-Society decided to implement the decision of expulsiontaken in the meeting dated 11.09.1993. The reference was made tothe Competent Authority, who gave sufficient opportunity torespondent no.1 to put up his stand and thereafter, passed theorder affirming/upholding the decision of the Society. TheAppellate Authority as well as Revisional Authority failed toappreciate the material on record and conduct of respondent no.1leading to decision of expulsion, while upsetting the decision ofTaluka Deputy Registrar and Resolution of the Society.5.Per contra, Mr. Katneshwarkar, learned Advocate appearingfor respondent no.1 vehemently submits that respondent nos.2 and3 have recorded elaborate reasons in support of their decisions.The decision of the Society was inconsistent with the statutoryprovisions contained under MCS Act, 1960 and Rules framedthereunder. Such a decision is rightly set aside by the AppellateAuthority and confirmed in the Revision by the Secretary. Insupport of his contentions he relies upon the judgment of this (4) wp-3352-2001.odtCourt in case of Aderabad Co-Operative Housing Society Ltd.Vs. Divisional Joint Registrar, Co-Operative Societies &Ors.1, wherein it is held that the procedure contemplated underRule 29 of the MCS Rules is mandatory. The notice containingagenda of general meeting needs to be served on the membersproposed for expulsion at least one month in advance. In absenceof such mandatory notice, Resolution passed by the Society cannotbe sustained in law.6.Having considered submissions advanced by the learnedAdvocates appearing for the respective parties, it is not in disputethat respondent no.1 was member of the petitioner-Society andunder Resolution dated 11.07.1993 passed in general body meeting,the Society expelled the petitioner from the membership andResolution was referred for confirmation to the Taluka DeputyRegistrar, who consented for action. However, Appellate Authorityi.e. respondent no.2, noting that provision dealing with expellingmember under MCS Act, 1960 and Rules framed thereunder werenot followed, set aside decision of the Society. With a view toappreciate the rival submission, it is apposite to refer relevantprovisions of MCS Act, 1960. Section 35 of the MCS Act, 1960provides for “expulsion of members”. Sub-clause (1) with provisoappended thereto is relevant in the facts of the present case, whichreads thus:“(1) A society may, by resolution passed by a majority of notless than three-fourths of the members entitled to vote who arepresent at a general meeting held for the purpose, expel amember for acts which are detrimental to the interest orproper working of the society : Provided that, no resolution shall be valid, unless the memberconcerned is given an opportunity of representing his case to12007 (5) All MR 510. (5) wp-3352-2001.odtthe general body and no resolution shall be effective unless itis approved by the Registrar.”7. To supplement provisions of Section 35(1) of MCS Act, 1960,Rules 28 and 29 are framed under Rules of 1961. Rule 29prescribes for “procedure for expulsion of members”. Rule 29 readsas under:“29. Procedure for expulsion of members.(1) Where any member of a society proposes to bring aresolution for expulsion of any other member, he shall give awritten notice thereof to the Chairman of the society. Onreceipt of notice or when the committee itself decides to bringin such resolution, the consideration of such resolution shallbe included in the agenda for the next [general body meetings][Substituted 'general meeting' by Notification No. CSL-2014/697/C.R.04/13C, dated 30.8.2014 (w.e.f. 23.12.1961).]and a notice thereof shall be given to the member againstwhom such resolution is proposed to be brought, calling uponhim to be present at the [general body meetings] [Substituted'general meeting' by Notification No.CSL-2014/697/C.R.04/13C, dated 30.8.2014 (w.e.f.23.12.1961).] to be held not earlier than a period of one monthfrom the date of such notice and to show cause againstexpulsion to the general body of members. After hearing themember, if present, or after taking into consideration anywritten representation which he might have sent, the generalbody of members shall proceed to consider the resolution.(2) When a resolution passed in accordance with sub-rule (1)is sent to the Registrar [along with application, the Registrarmay consider the resolution and after due inquiry and givingreasonable opportunity of being heard to such member givehis decision within ninety days from the date of receipt ofapplication and communicate the same to the society and themember concerned.] [Substituted 'or otherwise brought to hisnotice along with application, the Registrar may consider theresolution and after making such enquiries as he may deemfit, give his approval and communicate the same to the societyand member concerned or otherwise brought to his noticealong with application, the Registrar may consider theresolution and after making such enquiries as he may deemfit, give his approval and communicate the same to the societyand member concerned.' by Notification No. CSL-2014/697/C.R.04/13C, dated 30.8.2014 (w.e.f. 23.12.1961).] (6) wp-3352-2001.odtThe resolution shall be effective from the date of suchapproval.”8.The minute reading of the aforesaid clauses depicts that theSociety is empowered to expel the member by Resolution passed bynot less than three-fourth of the members entitled to vote who arepresent at a general meeting held for the purpose, expel a memberfor acts which are detrimental to the interest or proper working ofthe society. The proviso prescribes for opportunity of hearing beinggiven to the member during general body meeting. FurtherResolution needs approval from the Registrar. Rule 29 furtherelaborates that when Society proposes to bring the Resolution forexpulsion of any member, he shall be given written notice of suchResolution including agenda for the next general body meeting,calling upon him to present. Rule further stipulates that minimumperiod of one month shall be given from the date of service of noticeto show cause against proposed expulsion and after hearing orconsidering the written representation of the member, the generalbody shall pass appropriate Resolution. Rule further prescribesthat even the Registrar, who is referred that Resolution requires togrant opportunity of hearing to the member before he accordsapproval to such Resolution.9.In the present case, it is not discernible from record thatrespondent no.1 was served with an advance notice, containingsubject of expulsion as agenda of meeting and calling upon him toput up his stand during such meeting. Apparently, Resolution ofexpulsion has been passed during the meeting dated 11.07.1993without serving agenda of meeting for proposed expulsion ofrespondent- member.
Legal Reasoning
(7) wp-3352-2001.odt10.Perusal of the impugned order passed by the AppellateRevisional Authority shows that concurrent finding of fact isarrived that the petitioner-Society failed to comply the mandate ofRule 29 while passing the Resolution dated 11.07.1993.11.This Court in case of Aderabad Co-Operative HousingSociety Ltd. (supra) observed that the enquiry contemplatedunder Rule 29 is not mechanical or idle formality. The Registrar isrequired to satisfy himself that mandatory notice of not less thanone month has been served upon the members containing agendaof expulsion in proposed general body meeting. This Court arrivedat conclusion that mere service of notice is not sufficient, but itshould be compliant of minimum time period and requisitecontents incorporating agenda for expulsion. Any shortfall isconsidered to be fatal. Applying the principles of law espoused bythis Court, there is no scope to justify resolution dated 11.07.1993passed by petitioner society and consequential approval granted byTaluka Deputy Registrar, Co-operative Society. The respondentnos.2 and 3 are justified in upsetting such decision in appellate andrevisional jurisdiction.12.Consequently, Writ Petition sans merit and the same isdismissed.13.Rule is discharged. (S. G. CHAPALGAONKAR) JUDGEDevendra/July-2024