High Court
Facts
901-WP-7440-2024IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWrit Petition No. 7440 Of 2024Shri. Bharat s/o Shivaji PerneAge : 58 years, Occu. : Agri.,R/o. Tandurwadi,Tq. Rahuri, Dist. Ahmednagar.Shri Sanjay s/o Sayaram PoteAge : 56 years, Occu. : Agri., R/o. Manori, Tq. Rahuri,Dist. Ahmednagar....PetitionerVersus1.The State of Maharashtra,Through Secretary, Cooperation Department,Maharashtra State, Mantralaya, Mumbai.2.Regional Joint Director (Sugar)And Joint Registrar CooperativeSocieties, AhmednagarOffice at Trilok Chamber,Lal Taki Road, Ahmednagar.3.Maharashtra State Cooperative ElectionAuthority, through DDR, Ahmednagar,Dist. Ahmednagar,4.Dr. Baburao Bapuji TanpureSahakari Sakhar Karkhana Limited,Shivaji Nagar, Rahuri, Tq. Rahuri,Dist. Ahmednagar....Respondents1 of 18
Legal Reasoning
901-WP-7440-202424.It is noticed that power under Section 157 of the Act has beenmisused by the respondents. The authorised officers should not havebeen continued for more than one year after the term is over. Theextension to the Administrator was not in accordance with law. Underthese circumstances, it was an abuse of power to grant any exemptionfrom application of rigors of Section 77A of the Act.25.Considering the sequence of events and the manner in whichimpugned orders are passed, we are of the considered view thatrecourse taken to the liquidation of the respondent No.4 is illegal andwith oblique intentions. Prima facie, we do not find the compellingcircumstances to resort to liquidation proceedings. Presently, theelection expenses have already been deposited with the ElectionAuthority. A candid statement has been made ensuring concluding ofthe election process by the end of May 2025. Therefore, the interimorder dated 07.10.2024 cannot be an impediment for directing toconduct election and for quashing the impugned orders. We find thatDistrict Deputy Registrar, Rahuri would be a fit person to look afterand oversee the Administration. We, therefore, pass following order.17 of 18 901-WP-7440-2024ORDER(i)The respondent No.3/State Co-operative Election Authority shallcommence the election process and shall conclude the same by theend of May, 2025 as per tentative programme placed on record atExhibits X and Y. (ii)The respondents or their officers are restrained from postponing,halting or terminating the election process which is to be undertakenby the respondent No.3. (iii)Till the conclusion of election process, District Deputy RegistrarCo-operative Societies, Ahmednagar, is appointed for administrationand the supervision of the respondent No.4/Society by replacing earlierauthorized officer.(iv)Orders dated 26.07.2024 and 23.07.2024 passed by RegionalJoint Director (Sugar), Ahmednagar and respondent No.2 are quashedand set aside.(v)Rule is made absolute in the above terms.[ SHAILESH P. BRAHME ] [ S. G. MEHARE ] JUDGE JUDGEKomal Kamble/18 of 18
Arguments
901-WP-7440-2024_______________________________________________________Shri V. D. Salunke, Advocate for the PetitionersShri A. S. Shinde, Addl. G.P. for Respondent Nos. 1 and 2Shri S. K. Kadam, Advocate for Respondent No. 3Shri S. S. Thombre, Advocate for Respondent No. 4_______________________________________________________WithWrit Petition No. 10332 Of 2022Shri. Amrut Annasaheb DhumalAge : 51 years, Occu. : Agri.,R/o. At Post. Musalwadi, Tq. Rahuri,Dist. Ahmednagar.... PetitionerVersus1.The State of Maharashtra,Through Secretary, Corporation & Textile Department,Maharashtra State, Mantralaya, Mumbai-32.2.The Commissioner for Co-operation,Maharashtra State, Pune.Central Building-411 001.3.The State Co-operative Election AuthorityMaharashtra State, Pune,Old Central BuildingGround Floor, Pune-411 003.4.Dr. Baburao Bapuji Tanpure Co-Operative SugarFactory,Through its AdministratorShri shivaji nagar, Tq. Rahuri,Dist. Ahmednagar 5.The Regional Joint Director (Sugar),Ahmednagar, Dist. Ahmednagar ... Respondents2 of 18 901-WP-7440-2024_______________________________________________________Shri A. B. Kale, Advocate for the PetitionerShri A. S. Shinde, Addl. G.P. for Respondent Nos. 1, 2 and 5Shri S. K. Kadam, Advocate for Respondent No. 3Shri A. D. Sonkawade, Advocate h/f Shri A. V. Hon, Advocate forRespondent No. 4_______________________________________________________CORAM:S. G. MEHARE ANDSHAILESH P. BRAHME, JJ.RESERVED ON:22nd JANUARY, 2025PRONOUNCED ON: 5th FEBRUARY, 2025J U D G M E N T [Per Shailesh P. Brahme, J.] :- 1. Rule. Rule is made returnable forthwith. Heard both sidesfinally at the admission stage, considering the exigency in the matter.2.Both the petitions pertain to election of the ManagingCommittee of respondent No.4/Sugar Factory, the appointment andcontinuation of an administrator over it. The facts and circumstancesare common. We, therefore, propose to decide both petitions bycommon judgment by referring to the paperbook of Writ Petition No.7440 of 2024.3.The predominant relief claimed in both petitions is a directionto conduct election of the Managing Committee of respondent No. 4and quashing of orders dated 26.07.2024 passed by Regional Joint3 of 18 901-WP-7440-2024Director (Sugar), Ahmednagar, 23.07.2024 passed by Under SecretaryGovernment of Maharashtra and communication dated 01.08.2024issued by Regional Joint Director (Sugar), Ahmednagar. The gravamenof the petitioners’ contentions is that the term of last-electedManaging Committee was from 24.06.2016 to 23.06.2021. Instead ofconducting the election before or immediately after the expiration ofthe term, the respondents engaged in dilatory and perfunctory tacticsby appointing Administrative Committee and thereafter appointment ofAdministrator. They further perpetuated the illegalities by extendingthe term of Administrator. The unprecedented action of therespondents is against the provisions of the Maharashtra CooperativeSocieties Act, 1960 (for the sake of brevity and conveniencehereinafter referred to as “the Act”). Further grievance is that, todayalso, no steps are taken for proceeding with the election despite thepetitioners’ persuasions.4.The term of the earlier Managing Committee expired on23.06.2021. A committee of three authorized officers was appointed byrespondent No. 2 under Section 77A of the Act, vide order dated20.03.2023, for a period of twelve months. The charge was taken by4 of 18 901-WP-7440-2024the said committee on 21.03.2023. No steps were taken for conductingthe election during the stipulated period. The respondent No. 2appointed Assistant Registrar as Administrator by superseding thecommittee vide order dated 26.07.2023. His term was extended forone year vide order dated 14.03.2024. Thereafter, his term was furtherextended by the respondent No. 1 vide order dated 23.07.2024, upto31.12.2024. A letter to that effect was addressed by learnedCommissioner (Sugar) on 01.08.2024.5.The lawyers appearing on both sides are ad idem that theelection of the Managing Committee needs to be conducted. Thematters were heard on 29.08.2024, and it was expressed by learnedcounsel appearing for the respondent No.3/State Co-operative ElectionAuthority that, for want of funds, the election could not be conducted.An amount of Rs. 10,00,000/- was only deposited with respondentNo.3. Therefore, time was granted to the respondents to convey as towhen it would be possible to hold the election. Thereafter, on11.10.2024, learned counsel for respondent No.3 informed this Courtthat remaining balance amount had been deposited and it was nowpossible to conduct the election. In the interregnum period, elections5 of 18 901-WP-7440-2024could not be conducted due to the Parliamentary and Assemblyelections. 6.Both sides are unanimous that there is no hurdle in conductingthe elections. Respondent No.3 has requisite funds for the same.Learned counsel, Mr. Kadam, for respondent No.3 has tendered onrecord the proposed programme of election as well as public noticeissued on 22.01.2025 to indicate that the authority is set out to holdthe election. On instructions, learned counsel, Mr. Kadam, forrespondent No.3 submits that the election process will be concludedby the end of May 2025. The proposed programme for finalising thevoter list, as well as concluding the election process, has beentendered on record and marked as Exhibit Nos. X and Y, respectively.We accept the statement and trust that the election process willconclude without any hindrance by the end of May 2025.7.There has been an inordinate delay in conducting the elections.We need not go into fixing the liability for the delay, but, the factremains that for more than three and half years, respondent No.4/Sugar Factory has been without properly elected Managing Committee.This situation is not only unconstitutional but also against the rule of6 of 18 901-WP-7440-2024law. It should not be perpetuated further. Therefore, we are inclinedto issue even prohibitory orders to the respondents as well asstakeholders, for not stalling or postponing the elections any furtherand in any contingency.8.Learned counsel for the petitioners relied on the judgment dated24.01.2008 in the matter of Ramesh Bhairoba Mane Vs. State ofMaharashtra in Writ Petition No. 8040 of 2006. In that case, theelections were not held after the constitution of cooperative society,and a provisional board of directors was appointed over it. The tenureof the said board was directed to be extended and the board wasreconstituted by giving an extension as the period of previous boardwas coming to an end. A direction was solicited for the appointmentof Administrator until the completion of election process and furtherextension of the provisional board was also challenged in the petition.In that context, the provisions of Section 73(1A) and Section 157 ofthe Act were examined, and the findings were recorded in paragraphNos. 10, 11, 13, 14 and 15. 9.The ratio laid down in paragraph No. 15 of the said judgmentwould be of no assistance in these petitions. In the case at hand,7 of 18 901-WP-7440-2024although directions are solicited to conduct elections, simultaneously,orders appointing the administrator and his extension of tenure arealso challenged. In the present case, the term of the lastly electedbody expired on 23.06.2021 and thereafter, instead of conductingelection, an administrative committee of authorized officers wasappointed. Thereafter, the administrator was appointed. In the presentcase, we are concerned with the powers under Section 77A(3), 77A(1)(b)(ii) and 73(1A) read with 157 of the Act. Such was not the situationin the cited judgment.10.Further reliance is placed on the judgment of Bhaskar EknathraoShinde Vs. State of Maharashtra reported in 2008 (3) AIR Bom R 116.In that case writ of certiorari or the directions were solicited inrespect of challenging order dated 31.08.2007 and final voter list. Adirection to publish fresh voter list was also solicited. The DivisionBench was not dealing with the matter of appointing theadministrative committee comprised of authorized officers after expiryof tenure of outgoing committee. Rather the issue of extension oftenure of the Administrator was under consideration. Therefore, onfacts, the case is distinguishable and its ratio would not assist the8 of 18 901-WP-7440-2024present matter for addressing the issues. 11.Learned Counsel Mr. A. B. Kale, placed reliance on thejudgment of Vishnupant Eknath Khandale & ors. Vs. The State ofMaharashtra & ors. in Writ Petition No. 5656 of 2020. In that case,the interpretation of Sub-Section (3) of Section 73AAA of the Act wasunder consideration. The core issue was as to whether the membersare deemed to have vacated the office on the expiry of the term ofthe Society after five years. The members whose term was over werestill continued in the office unofficially, and they were alleged to havesquandered the funds, which was the cause of action in that case. Thesaid judgment also does not assist us in addressing the issues. Thecase in hand is distinguishable.12.Learned counsel Mr. V. D. Salunke for the petitioner submitsthat orders dated 26.07.2023 and 23.07.2024 are against Section73AAA(3) as well as proviso to Section 77(3) of the Act. Those ordersare arbitrary and there is usurpation of powers. It is furthersubmitted that powers under Section 157 of the Act should not havebeen invoked for granting extension to the administrator upto31.12.2024. He would further submit that the Administrative9 of 18 901-WP-7440-2024Committee appointed vide order dated 20.03.2024 failed to conductthe election during 12 months and there was no reason to appointsole administrator. It is further submitted that there is gross misuseof powers in granting extension. The Administrator and therespondent No.2 acted in collusion so as to avoid re-election.13.Learned counsel Mr. A. B. Kale for another petitioner adopts thesubmission of Advocate Mr. V. D. Salunke. In addition to that, hesubmits that elections ought to have been conducted immediately afterthe term is over. As per Section 73CC read with 77A(3) of the Actmaximum period of one year was permissible for postponing theelections. He would further submit that it is gross dereliction of theduties of the Administrative Committee and thereafter administrator innot conducting the elections in time. They are liable for action. It isfurther submitted that deliberately elections were postponed and anattempt is made to liquidate the sugar factory. The interim orderdated 07.10.2024 passed by the respondent No.5/Regional JointDirector indicates the conduct of the authorities. 14.Learned counsel placed reliance on judgments of this Court andthe Hon’ble Supreme Court in the matter of Vishnu Panth Eknath10 of 18 901-WP-7440-2024Khandagale Vs. State of Maharashtra in Writ Petition No. 5656 of2020 and Bharat Sanchar Nigam Vs. M/s Tata Communicationsreported in 2022 LiveLaw (SC) 792.15.Per contra, learned AGP Mr. A. S. Shinde, repels thesubmissions by referring to its paragraph Nos. 4 to 6 of the affidavits-in-reply. The sequence of events is disclosed in those paragraphs,which led the authorities to appoint Administrator and thereafter toresort to liquidation proceedings. He would submit that impugnedorders are issued in accordance with law and under the compellingcircumstances. It was not possible to meet out the expenses ofelection and therefore, arrangement was required to be made to lookafter the co-operative society. It is further submitted that impugnedorders are appealable as per Section 152 of the Act as well asrevisable. Hence, the petitioners cannot be entertained.16.We have also heard Mr. S. S. Thombre, appearing forAdministrator. He submitted that the judgments cited at bar cannot bemade applicable, as those were the cases wherein continuation of theprivate body or the individual members or Board of Directorscomprising of private persons was under challenge. In the present11 of 18 901-WP-7440-2024case, public servants were appointed in Administrative Committee andthereafter as an Administrator. He further submitted that continuationof Administrator is permissible and that Section 157 of the Act isapplicable to the fact situation. 17.We are testing the validity of the order dated 26.07.2023 passedunder Section 77A(1)(b)(ii) and 77A(3) of the Act, and the order dated23.07.2024 passed under Section 157 read with 77A of the Act. Thereis no dispute that the term of elected body expired on 23.06.2021.The Administrative Committee of the Authorized officers wasappointed vide order dated 20.03.2023, after about two years. Thesaid committee comprised of public servants of the Co-operativeDepartment. Thereafter, Mr. Deepak Paraye, was appointed asAdministrator, who was Assistant Registrar at Taluka Rahuri. Hisappointment was continued upto 31.12.2024. The covering letterdated 14.03.2024 issued by respondent No.2 discloses that the proposalfor the extension of the Administrator’s tenure by one year wasforwarded due to the Parliamentary and Assembly elections.18.The respondent No.2 issued an interim order on 07.10.2024under Section 102 of the Act, appointing a liquidator. The12 of 18 901-WP-7440-2024Administrator, who was already in office, wrote letter on 08.10.2024to respondent No.2, stating that there was no need to appoint aliquidator. 19.Both petitions were filed with multiple prayers. The directions toconduct the election were solicited besides challenge to the ordersdated 26.07.2023 and 23.07.2024. There is no dispute regarding therelevant facts. We are directing the respondent No.3/ElectionAuthority to conduct the elections. Under these circumstances, wethink it proper to examine the validity of the orders under challengewithout relegating the parties to the Appellate or Revisional Authority.We overrule objection regarding alternate remedy of the petitioner.Once the term of five years is over, it is expected of the respondentsto proceed with the election. Respondent No.4/Co-operative Societyhas been without a duly elected Managing Committee for more thanthree years. We have noticed that the outgoing Managing Committeewas holding over from 23.06.2021 to 21.03.2023, as rightly pointedout by learned counsel Mr. A. B. Kale. The Administrative Committeecame to be appointed on 20.03.2023. No steps were taken to musterthe funds for conducting the elections.13 of 18 901-WP-7440-202420.It is pertinent to note that Administrative Committee, whichtook charge on 21.03.2023 was for only twelve months. TheCommittee failed to take steps for conducting elections during theprescribed period and was continued until the sole Administrator wasappointed vide order dated 26.07.2023. This appointment ofAdministrator beyond twelve months is against proviso to Section77A(3), which is as follows:“The Maharashtra Cooperative Societies Act, 19601.…..2.…..77A.Appointment of member of committee, newcommittee or Administrator, where there is failure toelect member, to constitute committee or wherecommittee does not enter upon office —(1) …(3) The Committee or Administrator so appointed shallhold office for a period of six months from the date ofassuming the management of the society and shall makenecessary arrangements for constituting a new committeewithin the said period and for enabling the new Committeeincluding any new Committee referred to in sub-clause (f) ofsub-section (1), which is determined by the Court to havebeen legally elected, to enter upon office.Provided that, if a new committee is not, or cannot beconstituted at the expiry or termination of the term of officeof the committee or Administrator, for any reason beyond14 of 18 901-WP-7440-2024the control of the committee or Administrator, the term ofoffice of the committee or Administrator, as the case may be,shall be deemed to be extended, until the new committee isduly constituted.”21.It is apposite to consider Section 73CC of the Act, which is asfollows:“The Maharashtra Cooperative Societies Act, 19601.…..2.…..73CC.Where due to scarcity, drought, flood, fire or anyother natural calamity or [rainy season or due to scarcity,drought, flood, fire, hailstorm or any other natural calamityfarmers, farm labourers or other persons on large scale havesuffered resulting in reduction in numbers of voters and onthe implementation of any Government Scheme made fortheir rehabilitation, there is likelihood of increase innumbers of voters or due to] any election programme, of theState Legislative Assembly or Council or House of thePeople or a local authority, coinciding with the electionprogramme of any society or class of societies, in theauthority, in the opinion of the State Government, it is notin the public interest to hold elections to any society or classof societies, the State Government may, notwithstandinganything contained in this Act or the rules, or bye-lawsmade thereunder, or any other law for the time being inforce, for reasons to be recorded in writing, by general orspecial order, postpone the election of any society or class ofsocieties, for a period not exceeding six months at a time,which period may further be extended so, however, that, thetotal period shall not exceed one year in the aggregate.]15 of 18 901-WP-7440-202422.For the contingencies stated in above provision, the StateGovernment is empowered to postpone the election, but thepostponement shall not exceed total period of one year in aggregate.In this case, due to postponement of election, the tenure of theAdministrator was sought to be extended upto 31.12.2024 videcovering letter dated 14.03.2024. This proposal is again contrary tothe proviso to Section 77A(3) of the Act. The elections of therespondent No.4/Society was already postponed beyond one year dueto Parliamentary and Assembly elections. By order dated 23.07.2024,the tenure of the Administrator was extended upto 31.12.2024 underthe garb of Section 157 of the Act. This extension is also against77A(3).23.The respondent No.4/Society could not deposit the expenses ofthe election. The Administrative Committee and thereafterAdministrator failed to take effective steps to raise the funds to meetthe election expenses. It was possible to raise the funds, as it wastranspired during the course of hearing that the respondentNo.4/Society had independent source of income and runs schools andcolleges. 16 of 18