High Court
Legal Reasoning
wp-8939-2022.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.8939 OF 20221.Shri. Rajesh Sudhakar Wattamwar,Age: 49 years, Occu.: Business,R/o. “Matoshri”, Shivajinagar, Jintur, Dist. Parbhani.2.Shri. Sanjay Changoji Kavle,Age: 40 years, Occu.: Business,R/o. Hutatma Smarak Colony,Jintur, Dist. Parbhani.3.Shri. Shyam Ramrao Katare,Age: 56 years, Occu.: Business,R/o. Near Siddheshwar Mandir,Jintur, Dist. Parbhani.4.Shri. Ganesh Ramrao Medewar,Age: 75 years, Occu.: Business,R/o. Vaibhavnagar, Near VishnuHotel, Parbhani.5.Shri. Vishnu Atmaram Shahane,Age: 45years, Occu.: Business,R/o. Harsh Jewelers, Gandhi Park,Parbhani.(All are the members of Respondent No.6 Co-operative Society).. PETITIONERSVERSUS1.The Secretary,Co-operation, Marketing and Textiles Department Mantralaya(Annexe), Madam Cama Marg,Hutatma Rajguru Chowk,Mumbai 4000322.The Commissioner for Co-operationand The Registrar, Co-operative Societies, Maharashtra State,[1]
Legal Reasoning
wp-8939-2022.odtNew Central Building,Ambedkar Wellesly Rd., Pune 4110013.The State Co-operative ElectionAuthority, Maharashtra State,Old Central Building,B. J. Road, Pune 411001.4.The District Co-operative ElectionOfficer, O/o. The District DeputyRegistrar, Co-operative Societies,Parbhani.5.The Returning Officer,Sundarlal Sawji Urban Co-operativeBank Ltd., Jintur,Jintur, District Parbhani.6.The Chief Executive Officer/ManagingDirector, Sundarlal Sawji UrbanCo-operative Bank Ltd., Jintur,Jintur, Dist. Parbhani.7.The Governor,Reserve Bank of India,Department of Regulation, CentralOffice, Central Office Building,12/13 Floor, Shahid BhagatSingh Marg, Fort, Mumbai 4000018.Kalamkar Mukundkumar Sundarlal9.Khandagale Raosaheb Rangnathrao10.Jinturkar Dilip Yashwantrao11.Sharma Subhash Mohanlal12.Shep Dhondiram Manikrao13.Shaikh Hamid Shaikh Hanif14.Soni Shriram Chhaganlal15.Goyal Ghanshyamdas Chunnilalji[2] wp-8939-2022.odt16.Jain Prakashchand Bodhulal17.Lalpotu Subhash Madhav18.Kade Chandrakant Narayan(Respondent Nos.8 to 18 : Age: All Major, Occu. : Business,All are Directors of R-6 Bank).. RESPONDENTS…Mr. Sudhir D. Patil, Advocate for the petitioners.Mr. N. S. Tekale, AGP for respondent Nos.1 and 2 – State.Mr. D. R. Talankar, Advocate a/w Mr. N. K. Tungar, Advocate forrespondent Nos.6, 8 to 18.… CORAM : SMT. VIBHA KANKANWADI AND S. G. CHAPALGAONKAR, JJ. RESERVED ON : 26th FEBRUARY, 2024. PRONOUNCED ON : 11th MARCH, 2024.JUDGMENT [Per Smt. Vibha Kankanwadi, J.] :- .Rule. Rule made returnable forthwith. Heard learned Advocatesfor the appearing parties finally by consent.2.Present petition has been filed by the petitioners for followingreliefs :-“B)This Hon’ble Court may kindly be pleased toissue Writ of Mandamus or any other Writ under Article226 of the Constitution of India thereby directing theRespondent Nos.1 to 5 to properly interpret andimplement the provisions of Section 10 2A of theBanking Regulation Act as it will have to be deemed tobe part of the Bye-laws of the Respondent No.6 Co-operative Society and needs such interpretation andconsequent implementation;[3] wp-8939-2022.odtC)Directions in the nature of Writ of Quo Warrantomay kindly be issued to the Respondent Nos.8 to 18and it may kindly be declared that the Respondentswho have been directors for a continued 8 years areautomatically disqualified to be director in view of theprovisions of Section 19 (2A) of the Banking RegulationAct as per which no director shall hold the officecontinuously for a period exceeding eight years;D)That, By Law No.39(i)(a) of Respondent no.6Society (annexed as Exhibit-“B” may kindly be declaredillegal, unreasonable and unconstitutional, and againstthe right to represent i.e. right of proportionaterepresentation and the said provision of the Bye-lawsmay kindly be quashed and set aside from the date ofits inception.”3.The petitioners claim that they are the members of respondentNo.6 – Co-operative Society. Respondent No.6 has been grantedlicence by Reserve Bank of India to carry banking business.Respondent No.6 has 21 branches in the State. It is said that the areaof operation of the society/bank is the entire State of Maharashtrahaving 20420 members as on 01.04.2022. According to thepetitioners, there are Model of Bye Laws of the Co-operative Societies,which they want to rely, especially Bye-law No.39, which has beenreproduced in the petition. According to the petitioners, respondentNo.2 by its letter No.21/1094 dated 31.05.2021 granted approval tothe amendment of the Bye Laws of respondent No.6 – Co-operativeSociety. The petitioner contend that the said bye-laws are not as per[4] wp-8939-2022.odtthe model bye-laws. The bye-laws now provide that the ExecutiveManagement of the Bank shall vest in the hands of Board of Directorsconsisting of nineteen Directors including General Category Directors,Reserve Category Directors, Expert Directors and Functional Directors.Nine Directors from General Category Directors should be from thedistance within 25 kilometers from head office and three Directorswould be from the above 25 Kilometers from head office. Theclassification that has been made, i.e. two Directors from women, oneDirector from SC/ST category, one Director from OBC category, oneDirector from VJNT/SBC/DTNT category, is unreasonable, illogical andillegal. The petitioners claim that they are unaware whetherrespondent No.6 and respondent No.2 have followed the procedureprescribed in the Act and Rules or not. It is then stated that thekilometer rule is also illegal and unreasonable. It is then stated thatrespondent No.5 had given an advertisement in newspaper on06.06.2022 intimating the election programme of respondent No.6 asper Section 19 of the Maharashtra Co-operative Societies (Election toCommittee) Rules, 2014. The schedule has been given. Petitioner No.1had taken objection. Representations were also sent to the concernedministry. According to the petitioners, the candidates, who weredirectors for more than eight years, were not eligible to contest theelection again and, therefore, the petitioners have approached by wayof this writ petition for the above-said reliefs. [5] wp-8939-2022.odt4.Affidavit-in-reply has been filed on behalf of respondent No.6 byNilesh Nirmalkumar Kalamkar working as Chief Executive Officer ofrespondent No.6/Bank. According to him the Banking Regulation Act,1949 is applicable to the co-operative banks only regarding bankingoperations and not for the management of the co-operative banks.Respondent No.6 had amended the bye-laws and then they have beenapproved by respondent No.2. Those bye-laws were never challengedby the petitioners, which were in existence prior to the amendment.The amendments were passed unanimously by the members presentin the general body meeting on 28.04.2013. The registering authorityapproved those bye-laws on 12.03.2014. The said approval,therefore, was not challenged till the date of the present petition bythe petitioners. Now, when the elections have been declared, theyhave been challenged as back door entry to take objection in respectof candidature of a particular person. The rules of the bye-laws whichare challenged are not illogical or illegal. In fact, similar terms areseen in almost every co-operative society/bank, as the members whohave association with the bank from the beginning attached to bankand residing within the periphery of the banks, are always allottedmore seats. 5.Heard learned Advocate Mr. Sudhir D. Patil for the petitioners,learned AGP Mr. N. S. Tekale for respondent Nos.1 and 2 – State and[6] wp-8939-2022.odtlearned Advocate Mr. D. R. Talankar along with Advocate Mr. N. K.Tungar for respondent Nos.6, 8 to 18.6.At the outset, we would like to say that though the amendmentto the bye-laws appears to have been made in the year 2021 i.e.approved by respondent No.2 by letter No.21/1094 on 31.05.2021, weare unable to get from the copy that has been produced, as to whichamendment was carried out by the said approved letter. The earlierby-laws i.e. prior to 31.05.2021 are not produced on record, especiallyon the background that in the affidavit-in-reply it has been specificallystated that the amendments were passed unanimously by themembers present in the general body meeting on 28.04.2013 andwere approved by the registering authority on 12.03.2014.Respondent No.6 has, therefore, specifically contended that the rulesof the bye-laws, which the petitioners want to challenge, wereapproved in 2013 and 2014, then challenge to the same by filingpetition on 04.08.2022, therefore, suffers from delay and laches. Somany inactions had taken place in between 2013 to 2021.7.Another fact to be noted is that when the bye-laws wereamended in the general body meeting where in fact the petitionershad the opportunity to object, in absence of any evidence that suchobjection was raised by the petitioners in the general body meeting;the petitioners cannot be allowed to agitate it by filing writ petition.[7] wp-8939-2022.odtWrit of mandamus or any other kind of writ under Article 226 of theConstitution of India, therefore, cannot be issued when such decisionwas taken to amend the bye-laws in the general body meeting.8.The learned Advocate for the petitioners had taken us throughthe relevant provisions of Banking Regulation Act and the MaharashtraCooperative Societies Act. Learned Advocate for respondent No.6 hasalso taken us through those provisions. The petitioners want to rely onSection 10A(2A)(i) of the Banking Regulation Act, as amended in2020. In fact, as aforesaid, evidence has not been produced beforethis Court as to exactly when rule No.39 of the bye-laws of respondentNo.6 – Society which the petitioners want to challenge, came intoexistence. If it is as per respondent No.6 amended in 2013, then it isdoubtful as to whether Section 10A(2A)(i) of Banking Regulation Actwould be applicable. Learned Advocate for respondent No.6 has rightlysubmitted that the Banking Regulation (Amendment) Act, 2020 cameinto effect from 29.06.2020 and was made applicable to bankingsector/banks and consequently to co-operative banks subject tomodifications. Section 56 stood amended by the Banking Regulation(Amendment) Act, 2020 and it was made applicable to co-operativebanks. Section 4 of the Banking Regulation (Amendment) Act, 2020clearly states that clauses f(i), f(ii) and (g) were omitted. Thereafter,Section 53-A came to be added which had reference of the powers toexempt co-operative banks in certain cases. In fact, the Banking[8] wp-8939-2022.odtRegulation Act (as applicable to co-operative societies) is applicable torespondent No.6, which deletes the application of Section 10(2A) ofthe Banking Regulation Act for the cooperative banks.9.Thus, it can be seen that the supreme authority to enact thebye-laws was the general body meeting as regards respondent No.6and it appears that the petitioners had not challenged those rules andregulations within reasonable time. Now, when the elections havebeen declared, it appears that the attempt is made by way of writpetition. If those persons, who want to contest the elections, whoaccording to the petitioners are not entitled to fill forms, thendefinitely the petitioners would be at liberty to take objectionswhereupon the competent authority would decide the said objection.The petitioners cannot use Article 226 of the Constitution of India tostall the election programme and, therefore, this is not a fit casewhere we should exercise our constitutional powers. The petitiontherefore stands dismissed. 10.Rule is discharged.[ S. G. CHAPALGAONKAR ] [ SMT. VIBHA KANKANWADI ] JUDGE JUDGEscm[9]