Allowed

Vishwas Raosaheb Jadhav v. Babu Apparao Shinde and Ors.

Bombay HC25 Apr 2013CA/3161/2013

Case brief

AI extract

What is this about?

The High Court held that where members' resignations took immediate effect, reducing the managing committee below the quorum required to elect office bearers, the lower authority's order setting aside the Administrator's appointment could not sustain. The court quashed the impugned order and directed the Assistant Registrar to conduct fresh elections for the society.

What did the court decide?

The impugned order appointing an Administrator was quashed. Fresh elections for the society were directed.

Vishwas Raosaheb Jadhav Vs Babu Apparao Shinde and Ors. — Company and Corporate | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

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WRIT PETITION NO. 6888 OF 2012 WITH CIVIL APPLICATION NO. 3161 OF 2013

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Babu Apparao Shinde and others

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...Petitioners

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versus

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The State of Maharashtra and others

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...Respondents

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Mr. V.D. Salunke, advocate for the petitioners Mr. K.J. Ghute Patil, A.G.P. for respondent Nos. 1 to 3 Mr. V.G.Sakolkar, advocate for respondent Nos.5 to 10

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quorum : S. S. SHINDE, J. DATED : 25^th APRIL, 2013

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PER COURT :-

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Rule. Rule returnable forthwith. By consent heard finally. This writ petition takes exception to the judgment and order dated 24.7.2012, passed by the Divisional Joint Registrar, Co-operative Societies, Latur in Appeal No. 17 of 2012 and consequential notice dated 14.8.2012 conveying the meeting to be held on 21.8.2012.

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It is the case of the petitioners that, all petitioners and respondent Nos. 5 to 10 herein are elected members of respondent No.4 Vividh Karyakari Seva Sahakari Society Limited at Shirur (Wa), Tq. Nilanga, District Latur. According to the petitioners, the said

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society is notified society and managing committee of the said society consist of 13 members, including the reserved seats. The term of the managing committee is for five years.

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It is further case of the petitioners that the election of the society was held in the month of April, 2011, however, only 12 members are elected and one seat is vacant. The election results were declared by the Returning Officer and a copy of the result was sent to the Assistant Registrar, Co-operative Societies, Nilanga for declaration under Section 73 (3) of the Maharashtra Co-operative Societies Act. Accordingly, a notification is published on 31.5.2011. It is further case of the petitioners that after general elections, a meeting was scheduled for electing the Chairman and Vice Chairman on 7.6.2011, however, in absence of quorum it was stayed. Then on second time, by notice dated 1.7.2011 the meeting was called on 7.7.2011, however, it was also stayed on account of non availability of sufficient quorum. On third time, by notice dated 25.10.2011 the meeting was scheduled on 1.11.2011 and it was again cancelled due to non availability of quorum.

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It is the case of the petitioners that they have tendered resignations on 1.8.2011 to the Secretary of the society, as there were no office bearers. The Secretary, after receipt of the said resignations, had forwarded the same to the Assistant Registrar by his letter dated

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2.8.2011, with specific observations that the amongst 13 seats only 12 candidates are elected as Directors. Out of 12 directors, 6 directors have tendered resignations and therefore quorum is not complete. It is the case of the petitioners that, there is no quorum to elect Chairman and Vice Chairman, though elections are held. Therefore, the Assistant Registrar, Co-operative societies, Nilanga by exercising powers under Section 77(A) of the Societies Act, has appointed one Mr. D.T. Patankar, as an Administrator for a period of six months.

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In the meanwhile, respondent Nos. 5 to 10 herein filed an appeal No. 50 of 2011 before the Divisional Joint Registrar, Cooperative Societies, Latur. The said appeal was allowed by judgment and order dated 28.9.2011 and order dated 3.8.2011 appointing Shri Patankar as Administrator on respondent No.4 society has been set aside and the Assistant Registrar, was directed to hold a meeting of the Board of Directors for electing the office bearers. Accordingly, the Assistant Registrar, Co-operative Societies, Nilanga issued notices of the meeting. It is the contentions of the counsel for the petitioners that even the notices were issued to the petitioners herein but they have already resigned, as members of the managing committee. It is further case of the petitioners that, the Administrator started functioning w.e.f. 14.8.2012. The meting was conveyed. Notices were even issued to the petitioners though they have resigned. The petitioners filed this petition

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the same was heard on 17.8.2012 when this Court has passed a detail order.

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Learned counsel appearing for the petitioners submits that it is undisputed position that, out of 13 managing committee members, 12 members are elected. The election of one member is set aside by the co-operative court and one more member is disqualified. The present petitioners have also resigned. Therefore, there is no quorum to conduct meeting to elect the Chairman and Vice Chairman of respondent No.4 society. It is submitted that, to complete the quorum, the requirement is of 7 members and there are no 7 members, therefore, there was no option with the Assistant Registrar to exercise the powers under Section 77(A) of the Societies Act to appoint the Administrator to look after the affairs of the respondent No.4 society.

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Learned counsel invited my attention to page 14 of the compilation, i.e. the proposal forwarded by the Assistant Registrar and also to other annexures to the petition and submitted that even the Apex Body i.e. Latur District Central Co-operative bank has concurred for appointment of the Administrator. It is submitted that in view of the judgment of this Court in the case of Prakash Mahadeo Khot & others vs. Maruti Dadu Khot & Ors, (supra) once resignations are tendered, the same has to take immediate effect. In the present case,

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the petitioners have resigned and the Secretary of respondent No.4 society has accepted the resignations and forwarded the same immediately to the Assistant Registrar. Therefore, relying upon the pleadings in the petition, annexures thereto, counsel appearing for the petitioners submits that the impugned order passed by the Divisional Joint Registrar, Co-operative societies, Latur in Appeal No. 17 of 2012 is required to be quashed and set aside.

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On the other hand, learned counsel appearing for respondent Nos. 5 to 10 submits that there was no case for exercising powers under Section 77(A) of the Societies Act by the Assistant Registrar. According to the learned counsel, out of remaining elected members, the Chairman and Vice chairman can be elected. There is no need of appointment of Administrator. Learned counsel tried to justify the order passed by the Divisional Joint Registrar relying upon the reasons therein. He submits that no administrator can be appointed when there is elected Board of Directors. Therefore, relying upon the reasons recorded by the Divisional Joint Registrar, Co-operative Societies, Latur and also in view of the fact that respondent Nos. 5 to 10 are elected members, he submits that this writ petition deserves to be dismissed. The learned AGP tried to justify the order passed by the Divisional Joint Registrar.

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I have given careful consideration to the submissions of the counsel for the parties. This Court while issuing notices to the respondents on 17.8.2012, has passed detail order, which is reproduced herein below:-

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“1. Heard learned counsel appearing for the petitioners and the learned AGP appearing for the respondent Nos. 1 to 3.

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2. Learned counsel appearing for the petitioners submits that the elections of the respondent No.4 society were held on 25.5.2011. There were in all 12 managing committee members elected. However, subsequently on 1.8.2011, 6 managing committee members have tendered their resignations with immediate effect. Learned counsel submits that the managing committee of respondent No.4 society consist of 13 members. However, only 12 members got elected. It is submitted that to complete the quorum, requirement of 7 members is necessary. However, in view of the resignations tendered by 6 members, no such quorum can be fulfilled to conduct the meeting. Be that as it may, pursuant to the directions issued by the Divisional Joint Registrar, Co-operative Societies, Latur, in appeal No. 17 of 2012, the Secretary of respondent No.4 society has issued notice for conducting the meeting for electing the Chairman and Vice Chairman of the respondent No.4 society and the said meeting is scheduled to be held on 21.8.2012.

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It is submitted that though 6 members have resigned in the month of August, 2011, notices are issued even to those members also for attending the meeting on 21.8.2012. It means that the members who have tendered resignations, will also be allowed to participate in the meeting to cast their votes in the election to the post of Chairman and Vice Chairman. According to the learned counsel appearing for the petitioners, in the first instant, such meeting cannot be held since the requirement of quorum is not fulfilled and secondly the members, who

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have tendered their resignations, have been issued the notices, as the said members cannot be asked to participate in the meeting and further to allow them to cast their votes, because they have tendered their resignations.

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3. Learned AGP prays for time to take instructions.

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4. Upon hearing counsel for the petitioners and upon perusal of the pleadings in the petition, annexures thereto, prima facie, it appears to this Court that, in absence of fulfillment of quorum, conducting of such meeting may not be sustainable under the relevant Rules. Learned counsel has pressed into service the exposition of this Court in the case of Prakash Mahadeo Khot & Os. vs. Maruti Dadu Khot & Ors reported in 2005(4) Bom.C.R. 568 to contend that if the resignation are tendered, the same can be applicable with immediate effect. I find considerable substance in the arguments of the counsel for the petitioner. This court in the case of Prakash (supra) in para 6 has taken a view that in absence of any constitutional, contractual or legal requirement, the resignation must be regarded as unilateral in character and when tendered with immediate effect, took effect immediately.

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5. In the background of afore stated discussions, issue notice to the respondents returnable on 27.8.2012. Humdast allowed.

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6. Learned AGP waives notice for respondent Nos. 1 to 3.

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7. The petitioners to serve the respondent Nos. 4 to 10 and file affidavit of service, to that effect, before the returnable date.

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8. Ad-interim relief in terms of prayer clause “C” till the next date of hearing.

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9. Registry to issue authenticated copy of this order to the requesting party.”

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It is undisputed position that, to have quorum, the requirement of 7 elected members, out of 13, to be present in the meeting is necessary. It is also not in dispute that the managing committee of respondent No.4 society consist of 13 members. Though elections have been held for 13 members, only 12 members got elected and out of those 12 members, election of one member is set aside by the Co-operative Court, as it is evident from the judgment and order passed by the co-operative court, which is placed on record by the petitioners. The assertion of the petitioners that another member is disqualified is also not specifically disputed by the respondents. Apart from the above, all petitioners have tendered resignations and the lower authority has recorded in its order that out of 12 members, 6 members have resigned as directors of the said society. Therefore, on this admitted position that, 6 directors have resigned, one is disqualified and election of one other director is set aside and there only five members are remained and therefore, there is no possibility of having quorum to elect Chairman, Vice Chairman or any other office bearers.

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In view of the authoritative pronouncement of this court in the

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case of Prakash Khot (supra) the resignations tendered by the petitioners as director of respondent No.4 society had taken immediate

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effect. This court in case of Prakash (supra) has taken a view that if the resignations are tendered with immediate effect in absence of any constitutional, contractual or legal requirement, the resignations must be regarded as unilateral in character and when tendered with immediate effect, took effect immediately. Therefore, in my considered opinion, the judgment and order passed by the Divisional Joint Registrar, setting aside the order of the Assistant Registrar, Cooperative Societies, Nilanga cannot sustain in law.

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Apart from what is discussed herein above, it is undisputed position that, for completing the quorum, presence of 7 directors is necessary. However, in the present case, out of elected 12 members, 6 have resigned. One member is disqualified and another’s election is set aside. Therefore, there is no possibility of completion of quorum for conducting the elections of Chairman and Vice Chairman. It is a matter of record that, the meetings were conveyed at least on four occasions to elect the Chairman and Vice Chairman, however, the said meetings were either postponed or cancelled for not having requisite quorum. In that view of the matter, in my opinion, the best course available to the Assistant Registrar to hold fresh elections of respondent No.4 society. Though the powers are vested in the Assistant Registrar is to appoint the Administrator, however, the Administrator can be appointed at once only for a period six months.

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Therefore, in the light of the discussion made herein above, the impugned judgment and order of the Divisional Joint Registrar, Cooperative Societies, Latur dated 24.7.2012 in Appeal No. 17 of 2012 is quashed and set aside.

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The Assistant Registrar, Co-operative Societies, Nilanga is directed to take necessary steps to hold fresh election of respondent No.4 society in accordance with the provisions of Maharashtra Cooperative Societies Act 1960 and Rules of 1961 thereunder and the bylaws of the said society. The parties to the petition will be at liberty to approach the Assistant Registrar, Co-operative Societies, Nilanga for early elections of respondent No.4 society. Rule made absolute in the above terms. Writ petition is accordingly disposed of.

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In view of disposal of writ petition, nothing further remains to be adjudicated in civil application No. 3161 of 2013, and the same therefore, stands disposed of.

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( S. S. SHINDE, J. )

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rlj/

Vishwas Raosaheb Jadhav v. Babu Apparao Shinde and Ors.

Case brief

What is this about?

What did the court decide?

Vishwas Raosaheb Jadhav v. Babu Apparao Shinde and Ors.

Case brief

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