Quashed

Vasudeo Rajaram Wani and Ors. v. the State of Mah and Ors.

Bombay HC6 Feb 2013WP/460/2012

Case brief

AI extract

What is this about?

This writ petition challenged the appointment of an administrator over a cooperative society under section 78. The court held that the financial deficiencies cited in the show cause notice pertained to the 2005-2006 audit, predating the petitioners' 2008 election and their lack of record custody. Consequently, the appointment was deemed unwarranted.

What did the court decide?

Quashing and setting aside the impugned judgment and order dated 15th December, 2011 appointing the Administrator under section 78.

Vasudeo Rajaram Wani and Ors. Vs the State of Mah and… — Cooperative Societies | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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BENCH AT AURANGABAD

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WRIT PETITION NO.460 OF 2012

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1. Shri. Vasudeo Rajaram Wani, Age: 74 years, Occ: Retired Chairman, Mahalaxmi Nagari Sahakari Pat Sanstha Maryadit, Yawal, Tq. Yawal, District Jalgaon.

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2. Shri. Prabhakar Tukaram Wani, Age: Major, Occ: Agriculture,

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3. Shri. Ramesh Trymbak Deshmukh, Age: Major, Occ: Agriculture,

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4. Shri. Mahesh Vasudeo Wani, Age: Major, Occ: Agriculture,

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5. Shri. Narendra Bhikaji Reghe, Age: Major, Occ: Agriculture,

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6. Sau. Kalpana Dattatraya Kulkarni, Age: Major, Occ: Household,

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7. Shri. Bhagwat Kashiram Pawar, Age: Major, Occ: Agriculture,

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All R/o. Yawal, Tq. Yawal,
District Jalgaon.

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8. Mahalaxmi Nagari Sahakari Pat Sanstha Maryadit, Yawal District Jalgaon, Through its Chairman Shri. Vasudeo Rajaram Wani, Age: 73 years, Occ: Retired Petitioner No.1. ...PETITIONERS

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VERSUS

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`1.`	`The State of Maharashtra,`
	`Through the Secretary,` `Ministry of Co-operation,` `Mantralaya, Mumbai.`
`2.`	`Divisional Joint Registrar,` `Co-operative Societies,` `Nashik Division, Nashik.`
`3.`	`Shri. A.V. Deshpande,` `Assistant Registrar,` `Co-operative Societies,` `Yawal, Tq. Yawal,` `District Jalgaon.`
`4.`	`Shri. D.C. Shinde,`
	`Auditor,` `Co-operative Societies,`
	`Tq. Yawal, Dist. Jalgaon.`
`5.`	`Shri. D.V. Kadam,` `Co-operative Officer,` `C/o. Assistant Registrar,` `Co-operative Societies, Yawal,` `Tq. Yawal, Dist. Jalgaon.`
	`(Resp. No.5 is deleted as per` `Court's order dt.26-07-2012).`
`6.`	`Honourable Minister of State` `for Co-operation, Maharashtra State,` `Mantralaya, Mumbai.`
	`(Deleted as per Hon'ble Court's` `order dtd. 16-01-2012).`
`7.`	`Bhagatsing Devchand Patil,`
	`Age: Major, Occ: Business,`
	`R/o. Pratap Nagar, Yawal,`
	`Tq. Yawal, Dist. Jalgaon.`

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8.Navin Shriram Dohale,
Age: Major,Occ: Nil,
R/o. Yawal, Tq. Yawal,
Dist. Jalgaon.

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9.Dayaram Natthu Badgujar,
Age: Major, Occ: Nil,
R/o. Yawal, Tq. Yawal,
District Jalgaon. ...RESPONDENTS

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...

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Mr. G.V. Wani, Advocate for petitioners.
Mr. D.R. Kale, A.G.P. for Resp. Nos. 1 & 2.
Mr. D.S. Bagul, Advocate for respondent No.7.
Mr. A.B. Girase, Advocate for Resp. Nos. 8 & 9.

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...

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CORAM : S.S. SHINDE, J.

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 RESERVED ON : 22-01-2013
 PRONOUNCED ON : 06-02-2013

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JUDGMENT :

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.Rule. Rule made returnable forthwith.

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Heard finally with the consent of the parties.

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2.The background facts for filing this writ
petition, as disclosed in the writ petition, are
as under :-

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.The petitioner Nos. 1to 7 are the elected

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Directors of petitioner No. 8 Society and they are

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elected for the said post in the year 2008. It is

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the case of the petitioners that, respondent No.8

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i.e. Mahalaxmi Nagari Pat Sanstha, Yawal is in
financial troubles because of the mismanagement
done by the earlier Board of Directors. The test
audit for the year 2005-2006 also reflects this
position.

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.The petitioner Nos. 1 to 7 contested the
elections held in the year 2008 and in fact are
depositors of the said society and have taken over
the management with a purpose to streamline
affairs of the society and bring it back to its
original position. It is further case of the
petitioners that, earlier Chairman who does not
wish to hand over the charge is trying to create
obstacles one after another and in fact has not
handed over the record of the society even in
spite of order passed by various authorities.

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3.It is further case of the petitioners
that, the Divisional Joint Registrar (C.S.) issued
notice under section 78(1) of the M.C.S. Act, 1960

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to the present Board of Directors on the basis of

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an audit of the year 2005-2006. The petitioners at
the relevant time approached this High Court by
way of filing Writ Petition bearing No. 3243 of
2010, which was partly allowed. While disposing
of the said writ petition, the High Court
observed that, in case any adverse order is passed
against the present petitioners under section 78
of the M.C.S. Act, the said order would not take
effect for 15 days from the order of service of
the said order.

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.The petitioners herein, approached the
Divisional Joint Registrar (C.S.) and filed say
to the notice issued to them under section 78 of
the M.C.S. Act, 1960. It is the case of the
petitioners that, the Divisional Joint Registrar
(C.S.), without considering reply filed and
available record, has passed an order superseding
the Board of Directors consisting of present
petitioners and has appointed Administrator vide
its order dated 14th July, 2010. The petitioners

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aggrieved by the said order dated 14th July, 2010
approached the Minister for Co-operation,
Government of Maharashtra, by way of filing appeal

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under section 152 of the M.C.S. Act, 1960

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alongwith the stay application, however, the
concerned officer has orally expressed inability
to place the matter for hearing before Minister in
view of ongoing monsoon session at the relevant

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time, and in fact, that appeal or stay application
could not be heard before 3rd August, 2010. The
petitioners in the aforesaid facts and
circumstances, approached the High Court by way of
Writ Petition No. 6743 of 2010 wherein the High

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Court extended stay. On 14th September, 2010 the
concerned Minister heard the appeal and dismissed
the same. The petitioners immediately preferred
Writ Petition No. 8390 of 2010 and requested for
interim relief which was granted in their favour

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and ultimately, the petition was allowed on 25th

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August, 2011 and the appeal was remanded back for
fresh hearing before the Minister. It is further

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case of the petitioners that, after remand, they

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had appeared in the said matter on 14th September,
2011, however, said appeal came to be dismissed on
15th December, 2011. Hence, this writ petition.

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4.Learned Counsel appearing for the

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petitioners submitted that, both the authorities
below have not at all addressed issues involved in
the matter as to the fact, whether the newly

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elected body was handed over the charge till the
report dated 29th January, 2009 was prepared. It
is submitted that, Joint Registrar (C.S.), Nashik,

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on one hand issuing directions to the Ex-Manager
and Ex-Chairman to hand over charge while as on
the other hand, had initiated proceeding under
section 78 of the M.C.S. Act for not conducting
the business, which was clearly under political
pressure. It is further submitted that, both the
authorities below have overlooked the fact that,

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all the financial misdeeds enumerated in the
notice related to the year 2005-2006 while as the

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present petitioners were elected on 15th July,
2008. It is submitted that, the authorities have

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not considered the fact that, when the Ex-Chairman

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and Ex-Manager, to cover up their financial
misdeeds were creating hurdles in handing over
charge and therefore, the petitioners could not
function in proper manner. It is submitted that,
the application moved by the depositors was in

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fact a creation of Ex-Manager and Ex-Director just
to pressurize the authority to pass an order of
appointment of Administrator. It is submitted
that, the authorities below have also overlooked

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the fact that, all the Directors are in fact
depositors of the society and had been elected
unanimously unopposed and it was only bunch of
depositors, who are hard supporters of the Ex-
Director and Ex-Manager forwarded application just
to protract the proceeding and create pressure to
obtain favourable orders. It is submitted that,
intervention application of respondent Nos. 7 to 9

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allowed by the Minister, was without hearing the
petitioners herein and said was to favour the
present respondent Nos. 7 to 9. It is submitted
that,theperiodforwhichfinancial

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misdeeds/irregularities are shown in the notice,
are during period in which the petitioners are not
in custody of the record of the society.
Therefore, learned Counsel appearing for the
petitioners, relying upon the pleadings in the
petition, annexures thereto, would submit that,
this petition deserves to be allowed.

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appearing for respondent Nos. 1 and 2 invited my
attention to the affidavit in reply and submitted
that, in fact the entire record was in the office
of the society and therefore, the contention of
the petitioners that, the record was not handed
over to them by the earlier managing committee, is
unacceptable. It is submitted that, the charge of

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the said society is taken by the petitioners on
15th July, 2008 and therefore, they cannot escape
from the liability as contended in the notice
given to them.

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6.Learned Counsel appearing for respondent

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Nos. 8 and 9 vehemently opposed the prayer in the
writ petition and submitted that, perusal of the

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show cause notice issued to the petitioners would
clearly demonstrate as many as 10 charges against
the petitioners. It is submitted that, there are
illegalities and irregularities in distribution of

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loan by the members of the managing committee. It
is submitted that, both the authorities after in

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depth inquiry and after satisfying that, the
petitioners have committed irregularities and
illegalities while conducting the affairs of the
society, has passed order thereby appointing
Administrator, therefore, this Court may not
interfere in the said order in writ jurisdiction.

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It is submitted that, though the Government has
granted funds to disburse it to the beneficiaries,
the present petitioners are not taking steps to
distribute the said funds received from the
Government for allotment to the beneficiaries.
Therefore, the Counsel relying upon the reasons
recorded by the authorities below and also the
contents of the show cause notice and other

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material placed on record, would contend that,
this petition is devoid of any merits, same may be
rejected.

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7.Learned Counsel appearing for respondent
No. 7 has vehemently opposed the prayer in the
petitionandsubmittedthat,financial
irregularities and misdeeds are during the period
of the petitioners when they were members of the
managing committee of the respondent society. It
is submitted that, mere glance on the show cause
notice would make it abundantly clear that,
charges levelled therein are during the period of
the petitioners. It is submitted that, the charge
is already given to the petitioners in the year
2008 itself and entire record is in the office of
the society and therefore, the contention of the
petitioners that, the record is not handed over by
the earlier managing committee deserves to be
rejected. Therefore, the Counsel for respondent
No. 7 would submit that, the petition is devoid

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of any merits and same may be rejected.

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8.I have given careful consideration to the

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rival submissions. With the able assistance of
the Counsel appearing for the respective parties,
perused the entire material placed on record,
pleadings in the petition, annexures thereto,

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reply filed by respective respondents and the
documents placed on record. The copy of the show
cause notice is placed on record by the
petitioners from pages 28 to 32 at Exhibit-H of
the compilation of the petition.

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9.The notice itself clearly shows that,

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there was audit of the society for the year
2005-2006 where irregularities were found and
certain deficiencies are mentioned in the report
by the Auditor and the managing committee is not
removing the said deficiencies. All ten (10)
deficiencies which are shown in the show cause
notice relates to audit report of the Auditor for
the year 2005-2006. The first deficiency mentioned
in the show cause notice is about distribution of

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the loan amount than prescribed limit to the
relatives of the managing committee members. The
allegation is that, no list of borrowers is handed
over by the managing committee to the Auditor for
inspection. The new managing committee has not
taken any steps to recover the said loan amount
and also to make available relevant record for the
perusal of the Auditor. There is further
allegation that, new managing committee has not
made efforts to recover the said loan amount.
There is also irregularity in investing funds of
the respondent society. The record is not
maintained by the new managing committee. There
are other deficiencies which are shown in the show
cause notice. It is also mentioned that, arrears
towards loan are to the extent of 69.53% and the
newly managing committee has not made efforts to
recover the loan. However, the fact remains that,
those serious deficiencies relate back to the year
2005-2006.

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10.The contention of the Counsel for the

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petitioners is that, the petitioners got elected
in the year 2008 and earlier managing committee
did not hand over the relevant record and
documents to the newly managing committee and as a
result, new managing committee consisting of
petitioners as a members of the managing
committee, could not take steps to remove the
deficiencies. Learned Counsel invited my

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attention to the fact that, even the authorities
did not take steps to hand over charge to the
newly managing committee for considerable period.
It is submitted that, the entire proceedings
initiated against the petitioners are with
intention to remove the petitioners and bring the
Administrator in their place.

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11.Therefore, upon careful perusal of the

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material placed on record, it appears that,
deficiencies or charges which are shown in the
show cause notice necessarily relate to the
financial year 2005-2006. It appears that, on the
basis of audit carried out for the year 2005-2006,

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the Auditor found serious deficiencies and said
deficiencies are mentioned in the show cause
notice. It is admitted position that, during said
period, the present petitioners were not managing
committee members and first time, they got elected
in the year 2008. Upon careful perusal of the
documents placed on record, it clearly appears
that, the relevant record and documents are handed
over to the managing committee of the respondent
society some where in the year 2009. It was
consistent stand of the petitioners that, the
custody of the record is with the Chairman of the
earlier committee and he is not handing over the
same and as a result, the petitioners are not able
to function effectively as a members of the
managing committee.

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12.Therefore, taking overall view of the
matter, in my opinion, the petitioners who got
elected as members of the managing committee of
the respondent society in the year 2008, could not
have been held responsible for serious

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deficiencies in the audit report which was for the
year 2005-2006. Therefore, viewed from any angle,
the appointment of Administrator by the Government
in place of elected managing committee represented

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by present petitioners was unwarranted and
uncalled for. Therefore, the impugned judgment

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and order dated 15th December, 2011 passed in
Appeal No. 544 of 2010 by respondent No. 6 Hon'ble

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Minister for Co-operation, State of Maharashtra,
confirming the order passed under section 78(1) of
the Maharashtra Co-operative Societies Act, 1960

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by the Divisional Joint Registrar (C.S.) Nashik
Division, Nashik, dated 14th July, 2010 bearing
No. 5745 of 2010, is quashed and set aside.

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13.Rule made absolute in terms of prayer
clause (B).

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14.However, it is made clear that, if

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authorities wish to take any further steps in
respect of conduct of affairs of the society
during the period of present managing committee,

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they are at liberty to do so taking recourse to

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the relevant provisions of law. This Court has

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not expressed any opinion about the same. This

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Court has quashed the impugned judgment and order

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and appointment of Administrator on the ground
that, deficiencies/charges shown in the show cause
notice relate back to the audit for the year
2005-2006 for which the present managing committee
i.e. petitioners who got elected in the year 2008

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could not have been held responsible.

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15.The writ petition stands disposed of.

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 sd/-
 [S.S. SHINDE, J.]

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sut/Feb13

Vasudeo Rajaram Wani and Ors. v. the State of Mah and Ors.

Case brief

What is this about?

What did the court decide?

Vasudeo Rajaram Wani and Ors. v. the State of Mah and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

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