Sambhaji Shivaji Kate vs State of Maharashtra Thr Department of Co. Operation and Ors.

These Petitions are filed by the Petitioners challenging the orders passed by the District Co-operative Election Officer rejecting the objections raised by them to the provisional list of voters.

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Respondent No.5 -Shri Chhatrapati Sahakari Sakhar Karkhana Ltd., Bhavaninagar, Taluka-Indapur, is a co-operative society registered under the provisions of Maharashtra Co-operative Societies Act, 1960 ( MCS Act ) and which runs a sugar factory. Petitioners are members of Respondent No.5-Society. Considering the limited issue involved in the present Petitions, it is not necessary to narrate the detailed history of past litigations relating to elections of Respondent No.5- Society. It appears that the Society had filed Writ Petition No.282 of 2023 seeking directions against the election authorities for commencing the election process and to complete the same in a time bound manner. The said petition was disposed of by recording a statement on behalf of election authorities for commencing election process. Accordingly on 8 June 2023, a provisional list of voters was published by the District Cooperative Election Officer and after deciding the suggestions and objections, the final voters list was published on 28 July 2023. Petitioners and others

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filed Writ Petition Nos.9547 of 2023, 9557 of 2023 and 9558 of 2023 in this Court challenging the said voters list. During pendency of the said Petitions, the provision relating to active and non-active members came to be cancelled on 21 August 2023 and therefore the District Cooperative Election Officer decided to publish a fresh Voters List. Accordingly, a fresh provisional Voters List was published on 5 October 2023 and suggestions and objections against the same were decided vide order dated 20 October 2023, which became subject matter of batch of petitions in this Court.

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The said list dated 20 October 2023 was again withdrawn by the District Co-operative Election Officer and a fresh list was passed on 30 November 2023, which again became subject matter of challenge in a batch of Petitions filed before this Court. However, it was found that all the affected parties were not heard while passing order dated 30 November 2023 and accordingly list dated 30 November 2023 was also withdrawn by District Co-operative Election Officer. Accordingly, fresh provisional list of voters was published on 19 December 2023 for the purpose of grant of fresh opportunity to the Petitioners to raise their objections. By impugned order dated 8 April 2024, the District Co-operative Election Officer has rejected the objections raised by the Petitioners. Order dated 8 April 2024 is the subject matter of challenge in the present Petition.

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Mr. Patwardhan, the learned counsel appearing for the Petitioner in Writ Petition No.6526 of 2024 would submit that the District Co-operative Election Officer has clearly erred in rejecting objections raised by the Petitioner by her order dated 8 April 2024. He would submit that the objection for deletion of names of defaulting members has been erroneously rejected by the impugned order. He

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would submit that there are two types of defaults with regard to payment of deficit share money by 8330 members and 61 society members. That the District Co-operative Election Officer has rejected the objection qua default in share contribution decided vide managing committee meeting dated 16 November 2021 for recovery of increased share amount in three installments of 2021-22(Rs.2000), 2022-23 (Rs.1500) and 2023-24(Rs.1500) total Rs.5000 on the ground that the cutoff date for payment of deficit share contribution is extended till end of season 2023-24. However, no consideration is made by the Election Officer with regard to the objection relating to the default committed in respect of 2012 contribution. That the extension allegedly granted upto season 2023-24 has no application to the 2012 defaults committed by several members. He would further submit that even otherwise, the extension vide resolutions dated 30 September 2021 and 16 November 2021 was in respect of payment of additional amount in excess of Rs.10,000/- as per the list provided by Respondent No.5-Society.

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So far as the objection relating to non-active members is concerned, Mr. Patwardhan would submit that District Co-operative Election Officer has erroneously rejected the said objection by recording a perverse finding that an amendment of 21 August 2023 renders the concept of active and non-active members redundant. He would invite my attention to bye-laws of the Society in support of his contention that only active members are entitled to vote in the election of Respondent No.5-Society. That under the bye-laws, only those members, who have supplied sugar cane in three out of the past five seasons can be treated as active members. Similarly, there is a concept of active society member under the bye-laws. He would also invite my attention to Rule 9 of the Maharashtra State Co-operative

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Societies (Election to Committee) Rules, 2014 ( Election Rules) in support of his contention that the concept of ‘active members’ still continues to exist qua election to the managing committee of society. That under Rule 9 only active members can be enrolled in the provisional list of voters. He would therefore submit that amendment of provisions of Section 2(19) of the MCS Act thereby deleting clause (a-1) defining the term ‘active member’ does not mean that name of even a non-active member can be included in the list of voters. He would submit that this issue is squarely covered by judgment of this Court in Sambha s/o. Gangaram Pikale Vs. State of Maharashtra and Ors.¹ in which it is held that what can be prescribed in the Act and Rules are minimum things, whereas byelaws can provide for additional matters. He would submit that mere absence of a provision in the Act dealing with the concept of ‘active member’ would not render redundant the requirement in the bye-law of being an active member to participate in the voting process. He would also rely on judgment of Division Bench of this Court in Vijay Shivaji Kokate V/s. Divisional Joint Registrar, Co-operative Societies, Nashik and others² in support of his contention that restriction put in the bye-laws on voting rights can be enforced.

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He would rely upon judgment of this Court in M.I.D.C. Prakalpgrast Majur Kamgar Sahakari Sanstha, Maryadit, Wagholi V/s. Amravati District Labour Co-operative Society’s Union and Anr.³ in support of his contention that mere denial of voting rights does not result in drastic consequences of cessation of membership and that therefore, it is not necessary to give opportunity of hearing to the members, whose names are sought to be deleted

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1 1996 (2) Mh.LJ. 182

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2 2007 (3) Mh.LJ 539

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3 2016 (5) Mh.L.J. 390

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from provisional list of voters. He would also rely upon recent judgment of the Apex Court in Adv Babasaheb Wasade and others V/s. Manohar Gangadhar Muddeshwar and Others⁴ in support of his contention that default in payment of membership fees results in the suspension of membership and denial of right to vote is an automatic consequence of loss of membership and that therefore, it is not necessary to give an opportunity of hearing to a member, who is denied right to vote. Mr. Patwardhan would accordingly pray for setting aside the impugned order passed by the District Co-operative Election Officer.

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Mr. Chetan Patil, the learned counsel would appear on behalf of the Petitioner in Writ Petition No.7799 of 2024 (Sambhaji Shivaji Kate V/s. State of Maharashtra and Ors.). He would adopt all the submissions of Mr. Patwardhan and would additionally submit that his client has raised a separate objection relating to inclusion of names of Society members in the provisional list of voters, who had failed to adopt resolution before the cutoff date indicated in the circular dated 18 September 2023. He would submit that as per the circular dated 18 September 2023, it was declared that resolutions adopted after the cutoff date of 3 October 2023 would result in noninclusion of names of society members in the voters list. That 29 class–B society members had filed resolution after the cutoff date of 3 October 2023 and therefore their names ought to have been excluded from the list of voters. He would submit that this objection was specifically raised before the District Co-operative Election Officer, who had noted the same in her order, but the said objection has not ultimately been decided. He would rely upon provisions of sub-rule (3) of Rule 10 of Election Rules 2014 in support of his contention that

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4 2024 SCC OnLine SC 63

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cutoff date declared by Respondent No.5-Society had sanctity in law and resolution submitted after the cutoff date ought to have resulted in deletion of names of the concerned society members from the voters list. He would accordingly pray for setting aside the impugned order dated 8 April 2024.

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Mr. Mandlik, the learned counsel would appear on behalf of the Petitioner in Writ Petition (Stamp) No. 12302 of 2024 (Sudhir Nagath Bhosale) and Mr. Jadhav, the learned counsel would appear on behalf of the Petitioner in Writ Petition (stamp) No.12314 of 2024 (Shivaji Ramrao Nimbalkar) and would adopt the submissions canvassed by Mr. Patwardhan and Mr. Patil.

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Mr. Dilip Patil-Bankar, the learned senior advocate appearing for Respondent Nos.3 and 4 (District Co-operative Election Officer and State Co-operative Election Authority) would oppose the Petitions. He would submit that Section 26 of the MCS Act has been amended by the Mah. Act 28 of 2022 w.e.f. 28 March 2022. He would invite my attention to provisions of Section 26 prior to 2022 amendment, under which there was a duty cast on every member of the society to utilise minimum level of services at least once in a period of five consecutive years as specified in bye-laws of the society. That the first Proviso to clause (b) of sub-section 2 of unamended Section 26 provided for classification of a member not utilising minimum level of services at least once in a period of five consecutive years as a ‘non-active member’. He would further submit that classification of member as ‘non-active member’ under the provisions of unamended Section 26 required following of detailed procedure under Rule 20(A) of the MCS Rules, under which such member was required to be issued a communication in Form W within a period of 30 days of closure of

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financial year by Registered Post Acknowledgment Due, by speed post, by hand delivery or also by e-mail or otherwise and also by publishing of name on the notice board of the concerned society. He would submit that the decision of classification of member as ‘non-active member’ could be subjected to appeal before the Registrar under the provisions of unamended Section 26 of the MCS Act which prevailed upto the year 2022. That therefore, no member can automatically become nonactive member unless the entire process of classification as non-active member is completed. That in any case, District Co-operative Election Officer cannot rule on classification of member as non-active member. That whether the person had acquired disqualification as being a nonactive member is a question of fact, which otherwise cannot be decided while dealing with objections to provisional list of voters and the only remedy to the affected member is to file dispute under Section 91 of the MCS Act.

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Mr. Patil-Bankar would submit that under the amended Section 26 of the MCS Act, the whole concept of non-active member has been removed, which is the reason why even the definition of the term ‘active member’ has been deleted under clause (a-1) of subsection 19 of Section 2 of the MCS Act. He would further submit that reliance by Petitioner on bye-laws of the Society is misplaced. He would submit that even the bye-laws provide that only registered cane must be supplied in three out of the past five seasons. Whether a particular member had registered the sugar cane or not and whether there is non-supply of registered cane is a question of fact to be decided in respect of each individual member. He would also submit that even if unamended provisions of Section 26 were to be applied to the present case, the concept of non-utilisation of minimum level of services cannot be confused with the concept of supply of sugar cane,

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two being the entirely different concepts. Mr. Patil-Bankar would accordingly submit that the District Co-operative Election Officer has not committed any material irregularity for this Court to interfere in exercise of jurisdiction of this Court under Article 227 of the Constitution of India. He would pray for dismissal of the Petitions.

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Mr. Shekhar Jagtap, the learned counsel appearing for Respondent No.5-Sugar Factory would also oppose the Petitions. He would question the maintainability of the present Petitions by relying on judgment of the Apex Court in Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha and Another V/s. State of Maharashtra and Others.⁵ in support of his contention that preparation of electoral roll is an intermediate stage in conduct of elections and this Court cannot interfere in the election process once the election program has begun. He would submit that the District Co-operative Election Officer, has nothing to do with classification of active or non-active members nor it has jurisdiction to rule on subject classification. That the Election Officer was not provided with bifurcation of active and non-active members by the Sugar Factory and that therefore the objection of inclusion of non-active members raised before the Election Officer was clearly baseless. He would rely upon Rules 10 and 11 of the Election Rules 2014 in support of his contention that remit of enquiry before the Election Officer is extremely in a narrow compass and none of the objections raised by Petitioners fall within the ambit of such enquiry. Mr. Jagtap would accordingly pray for dismissal of the Petitions.

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Rival contentions of the parties now fall for my consideration.

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5 (2001) 8 SCC 509

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Present Petitions form a part of series of litigations filed by the Petitioners on the issue of preparation of voters list for conduct of elections of Respondent No.5 -Sugar Factory. It is not necessary to go into the details of the previous provisional and final lists of voters and what is relevant now is the provisional list of voters filed by Respondent No.5-Sugar Factory with the District Co-operative Election Officer on 5 October 2023, which was published on the same day i.e. on 5 October 2023. Petitioners had raised various objections to the said provisional list of voters dated 5 October 2023. PetitionerPruthviraj Sahebrao Jachak raised the objections to the said provisional list on 12 October 2023. Petitioner -Sambhaji Shivaji Kate also filed his objections on 12 October 2023. Similarly, objections were filed by Petitioner-Sudhir Nagath Bhosale on 13 October 2023 and Petitioner-Shivaji Ramrao Nimbalkar on 12 October 2023. Most of the objections raised by all the four Petitioners are more or less similar.

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First objection raised by the Petitioners was with regard to failure to clear dues of fertilizers and seeds by some of the members and it appears that the District Co-operative Election Officer has agreed to delete the names of members, who had arrears towards purchase of fertilizers and seeds. In that view of the matter Mr. Patwardhan and Mr. Chetan Patil have not pressed the point of deletion of names of defaulting members relating to fertilizers and seeds.

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The next objection raised by the Petitioners was about deletion of names of 8330 individual members and 61 society members, who are defaulters in respect of payment of share contribution money. It was Petitioners’ objection that in a special meeting of the managing committee held on 16 November 2021,

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resolution No.2(B) was adopted for recovery of increased share amount in three instalments of 2021-22 (Rs.2000), 2022-23 (Rs.1,500), and 2023-24 (Rs.1,500). Petitioners relied upon list of defaulter members, who had failed to clear the dues towards share money to indicate that the Respondent-Society did not dispute the factum of defaults committed by them. They also relied upon circular issued by the Society threatening such defaulting members of denial of right of voting in the event of non-clearance of dues towards the share contirbution amounts. Petitioners rely upon judgment of this Court in

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M.I.D.C. Prakalpgrast Majur Kamgar Sahakari Sanstha, Maryadit, (supra) in support of their contention that default in payment of share money must result in disqualification for a member from casting his vote under sub-section (10) of Section 27 of the MCS Act.

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The District Co-operative Election Officer has dealt with above objection by relying on Resolution No.20 dated 8 May 2023 extending the time period to clear dues of share money till end of season 2023-24. The Election Officer held that since time to make good the default was extended till end of crushing season 2023-24 and accordingly rejected the objection qua individual members and society members, who were yet to clear arrears of share monies. When Petitioners sought to question the correctness of said Resolution No.20 dated 8 May 2023, the Election Officer repelled the said objection holding that she does not have jurisdiction to decide the issue of validity of resolution adopted by the managing committee, which could only be questioned before the Co-operative Court under Section 91 of the MCS Act. Since there was extension upto the end of season 2023-24, the objection for deletion of names for 8330 individual members and 61 society members, who were yet to clear arrears of

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share money, has rightly been rejected by the District Co-operative Election Officer.

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Faced with the above situation, Mr. Patwardhan has submitted that even if rejection of objection qua defaulting members in respect of clearance of arrears of share money pursuant to resolution dated 16 November 2021 is to be accepted as correct, Petitioners’ objection was not restricted only to liability to clear share money as per 2021 resolution and that a separate liability was created by 2012 resolution for clearance of increased share monies and that the District Co-operative Election Officer has not considered or dealt with the said objection. However, perusal of the objections raised by Petitioners with regard to default in share amount would indicate that there was no reference in the objections relating to the resolution adopted in the year 2012. It would be apposite to reproduce the objection raised by Petitioner-Pruthviraj Sahebrao Jachak, which reads thus:

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From the aforesaid list that is provided by Karkhana, it is clearly seen that in all 8330 members have defaulted in paying their dues towards their share contribution and 61 society members have defaulted in making payment towards their share contribution and additional share contribution. It is submitted that the Managing Committee in its special meeting dated 16/11/2021 by passing resolution No.2 (B) has decided mode to recover increased share amount in 3 installments 2021-2022 Rs.2,000/- 2022-2023 Rs.15,00/and 2023-24 Rs.15,00/ Total Rs.5,000/- The karkhana has also sent demand notice/letters to all members for payment of increased share amount. The karkhana by letter dated 4/3/2022 informed me that the karkhana has sent demand notice/letter to members and also provided list. Hereto annexed and marked as Exhibit C to F are the copies of the list provided by the Karhana mentioning the names of the members who have defaulted in payment of their share contribution, resolution dated 16/11/2021, and letter dated 4/3/2022 sent to me notice/letter sent to defaulter member. As the list itself refers to these members are defaulter members, thus, the fact that the aforesaid members are defaulters is - not even disputed by the Karkhana but, however, for no cogent reason the names of these defaulter members have been included in the provisional voters list of Karkhana. It is pertinent to note that circular which has been

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issued by Karkhana has also called upon the members to make payment of their share dues and it is further stated in the said circular that if the same is not done the possibility of they getting disentitled to vote cannot be ruled out. Thus, the aforesaid circular further establishes the fact that if the members do not pay their share dues then they would incur disqualification of their right to vote. Hereto annexed and marked as Exhibit G is the copy of the said circular. Section 26 of the said act clearly states that no member shall exercise the rights qua the society, until he has made payment to the society in respect of membership or acquired such interest in the society, as may be prescribed and specified under the by-laws of the society, from time to time. That it is also pertinent to note that the applicability of section 27 (10) of the said act is not restricted to the society who lends money. Section 27 (10) of the said act applies to all Co-op Societies. Prior to amendment to the said Act i.e. prior to 14-2-2013, section 27 (10) of the said act was applicable only in the case of an Agricultural Credit Society. However after 14-2-2013 section 27 (10) of the said act has been amended and now it is not restricted to the agriculture credit society and it applies to all societies. It is further pertinent to note that as per the amended section 27 (10) of the said act a member shall whenever he is a defaulter as provided in the explanation in clause (i) sub-section 1 of section 73CA, will have no right to vote in the affairs of the society. The specific provision in section 73CA makes it abundantly clear that the provision of section 27(10) of the said act is not restricted to societies lending money, but is applicable to all societies including a Sugar Factory. The bye-laws of the Karkhana have also by making reference to section 27(10) of the said act provided for disqualification of a defaulting member from casting his vote.

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In support of my contention concerning the removal of the names defaulter members being removed from the voters list, I am relying upon the judgment of this Hon'ble Court in the case of M.I.D.C. Prakalpagrast Majur Kamgar Sahakari Sanstha Maryadit, Wagholi Vs. Amravati District Labour Cooperative Society Union and another reported in 2016(5) Mh.L.J. 390. Hereto annexed and marked as Exhibit H is the copy of the said judgement.

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Thus, there is no whisper in the objections raised by the Petitioner with regard to alleged demand of share money pertaining to the year 2012. Thus, what is sought to be argued before me with regard to alleged default in respect of the resolution adopted in the year 2012, was never raised before the District Co-operative Election Officer in the objections filed by Petitioners. In that view of the matter, the point relating to alleged default in pursuance of

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Resolution of 2012, raised for the first time before this Court, deserves summary rejection.

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The next and the main objection raised by the Petitioners is with regard to inclusion of names of non-active members in the list of voters. According to Petitioners, the bye-laws provide for voting right only to active members and that active members meant only those members, who had supplied sugarcane in three out of previous five crushing seasons. Petitioners have relied upon bye-law No.16, which deals with classes of members by dividing them into producer members, society members and nominal members. Relevant part of bye-laws reads thus:

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१६) सभासद वर्ग� -

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उत्पादक सभासद, सहकारी संस्था व नाममात्र सभासद

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अ ) उत्पादक सभासद :

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उत्पादक सभासद होण्यासाठी खालील अटी पूर्ण� कराव्या लार्गतील.

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१) वय १८ वर्षे& पूर्ण� आणिर्ण भारतीय करार कायद्यातील तरतुदीनुसार करार करर्णेस पात्र असला पाहिहजे.

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२) मालक, संरक्षि0त मालक अथवा साधे कूळ / सहहिहस्सेदार (co -owner ) अशा व्यक्तीचे नाव कूळ म्हर्णून जहिमनीच्या ७/१२ उताऱ्यात नोंदलेले असर्णे आवश्यक आहे (संबंक्षिधत व्यक्ती एकत्र कुटुंबातील असल्यास त्याला मालक या नात्याचे पोटहिनयमातील तरतुदीप्रमार्णे हिकमान उसाच्या 0ेत्राचा हिवचार करून मालकी हक्क असर्णे आवश्यक आहे.)

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३) त्याने संस्थेच्या काय�0ेत्रातील त्याच्या प्रत्य0 लार्गवडी 0ेत्राची व त्याने धारर्ण केलेल्या ऊस लार्गवडी लायक सव� जहिमनीच्या र्गावाची नवे, सव& नंबर / र्गट नंबर, 0ेत्र, पार्णी पुरवठ्याची व्यवस्था इत्यादी सव� तपणिशलासह संस्थेमध्ये नोंद केली पाहिहजे आणिर्ण संस्थेस खालीलप्रमार्णे लेखी करार करून हिदला पाहिहजे.

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१) वरिरलप्रमार्णे नमूद केलेल्या तपणिशलात वेळोवेळी झालेला कुठलाही बदल, तो बदल झाल्यापासून तीन महिहन्याचे आत संस्थेस कळहिवर्णे.

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२) त्यांच्या जवळ असलेली ऊस लार्गवडीस लायक जमीन व पार्णी पुरवठ्याची व्यवस्था ल0ात घेता त्याने जास्तीत जास्त हिकती ऊस लावावा याबद्दल संचालक मंडळाचे वेळोवेळी केलेल्या सूचनांचे तो पालन करेल.

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३) संस्थेच्या काय�0ेत्रात असलेल्या त्याच्या जहिमनीतील भार्गाच्या प्रमार्णात उसाचे उत्पादन तो संस्थेत पुढीलप्रमार्णे तजहिवजीसाठी आर्णून देईल.

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४) सभासद होण्याबद्दल त्याने लेखी अज� केला असला पाहिहजे.

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५) रुपये १००/- इतकी प्रवेश फी त्याने भरली असली पाहिहजे.

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६) ठार्णे कमीत-कमी एका भार्गाची मार्गर्णी केली पाहिहजे व पोटहिनयम ८ प्रमार्णे प्रत्येक भंर्गापोटी हिकमान रुपये १०,०००/- भरले पाहिहजे.

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७) सभासदाने त्याचे भार्गाचे प्रमार्णापे0ा कारखान्याकडे नोंदहिवलेला जादा ऊस र्गळीत करर्णे कारखान्यास एखाद्या हंर्गामात शक्य नसेल तर कारखाना कोर्णत्याही परिरस्तिस्तथीत तसे हंर्गाम वर्षेा�च्या १५ सप्टेंबर पूवY संबंक्षिधत सभासदास नोंदर्णीकृत हाकेनी कळतील .

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Bye-law No.17(A) deals with ‘producer members’ and in addition to laying down eligibility criteria for being enrolled as producer member, it further deals with the concept of ‘active producer members’. It provides thus:

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हि[याशीलउत्पादकसभासद :

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१) मार्गीलपाचर्गाळपहंर्गामांपैकीहिकमानतीनहंर्गामातसभासदानेधारर्णकेलेल्याभार्गाच्या प्रमार्णातसंस्थेसनोंदकेलेलाऊसपुरवठाकेलाअसलापाहिहजे.

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२) हि[याशीलसभासदासकारखान्याच्यासंचालकमंडळहिनवडूर्णुकीतमतदानाचाअक्षिधकार राहील. महाराष्ट्रसहकारीसंस्थाअक्षिधहिनयम१९६०चेकलाम२७(१०) मधीलतरतुदीनुसार संस्थेच्याथकबाकीदारासमतदानाचाअक्षिधकारराहर्णारनाही.

¶152

Bye-law No.17(B) deals with Co-operative Society members and the same also makes a provision for ‘active society members’ and provides thus:-

¶153

हि[याशील संस्था सभासद:

¶154

१) जरसंस्थाऊसउत्पादनकरीतअसेलतरमार्गीलपाचर्गाळपहंर्गामांपैकीहिकमानतीन हंर्गामातसंस्थेनेधारर्णकेलेल्याभार्गाच्याप्रमार्णातऊसपुरवठाकेलाअसलापाहिहजे.

¶155

२) जर्णसंस्थाऊसतोडर्णीववाहातूककरतअसेलतरमार्गीलपाचर्गाळपहंर्गामांपैकी हिकमानएकाहंर्गामातसंस्थेनेऊसतोडर्णीववाहतुकीचेकामकाजकेलेअसलेपाहिहजे.

¶156

३) हि[याशीलसंस्थासभासदांस कारखान्यांच्यासंचालकमंडळहिनवडर्णुकीतमतदानाचा अक्षिधकारराहील.

¶157

४) हि[याशीलसंस्थेचाकारखान्याच्याकामकाजामध्येभार्गघेर्णाराप्रक्षितहिनधीहाहि[याशील संस्थेचाहि[याशीलसभासदअसलापाहिहजे.

¶158

५) महाराष्ट्रसहकारीसंस्थाअक्षिधहिनयम१९६०चेकलम२७(१०) मधीलतरतुदीनुसार संस्थेच्याथकबाकीदारासमतदानाचाअक्षिधकारराहर्णारनाही.

¶159

According to Petitioners, 21172 members of Respondent No.5Society had not supplied sugarcane in three out of the last five crushing seasons and in that regard, they have relied upon list supplied by Respondent No.5- Society.

¶160

There are two aspects with regard to application and interpretation of bye-law Nos.17A and 17B relating to classification of members as ‘non-active members’ and their right to vote.

¶161

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Going by plain language of bye-law No.17A, active producer member means the one who has supplied cane, registered with the sugar factory, in proportion to the shares held by him/her. Thus, mere failure to supply sugarcane to the factory does not automatically convert a member into non-active producer member. For such classification, it must be proved that the concerned member had registered particular quantity of sugarcane for being supplied to the factory and such registration must be in proportion to the shares held by such member and there needs to be a failure to supply registered cane to the sugar factory. Therefore, reliance by Petitioner on mere list of voters, who had failed to supply sugarcane to Respondent No.5Society, was totally irrelevant for their classification as non-active producer members.

¶164

Perusal of covering letter dated 10 October 2023 by Respondent No.5-Society by which relevant information was supplied to the Petitioner- Pruthviraj Sahebrao Jachak would indicate that he had sought information relating to names of members, who had failed to supply cane in three crushing seasons from 2016-17 to 2020-21. He did not seek information relating to registration of cane by those members. As observed above, if a member does not register cane for supply, he need not supply any cane in a particular season. The byelaw preventing a member from voting in the elections would apply only to those members, who fail to supply registered cane to the factory in three out of five crushing seasons. Disqualification does not apply to every member who does not register cane with factory.

¶165

The other and more vital issue is with regard to the interpretation of provisions of the MCS Act, MCS Rules 1961 and

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Election Rules 2014. Section 26 of the MCS Act deals with suspension of right of membership till making of due payment by the owners. Section 26, as it stands today in the statute book, reads thus:-

¶170

26. No rights of membership to be exercised till due payments are made

¶171

A member shall be entitled to exercise such rights as provided in the Act, rules and by-laws:

¶172

Provided that, no member shall exercise the rights, until he has made such payment to the society in respect of membership, or acquired such interest in the society, as may be prescribed and specified under the by-laws of the society, from time to time:

¶173

Provided further that, in case of increase in minimum contribution of member in share capital to exercise rights of membership, the society shall give a due notice of demand to the member and give reasonable period to comply with it.

¶174

However, Section 26 of the MCS Act has been substituted by Mah. Act 28 of 2022 w.e.f. 28 March 2022. Section 26, as it stood prior to 28 March 2022, read thus:

¶175

26. Rights and duties of members

¶176

(1) A member shall be entitled to exercise such rights as provided in the Act, rules and by-laws:

¶177

Provided that, no member shall exercise the rights, until he has made such payment to the society in respect of membership, or acquired such interest in the society, as may be prescribed and specified under the by-laws of the society, from time to time:

¶178

Provided further that, in case of increase in minimum contribution of member in share capital to exercise right of membership, the society shall give a due notice of demand to the members and give reasonable period to comply with.

¶179

(2) It shall be the duty of every member of a society,-

¶180

(a) to attend at least one general body meeting within a consecutive period of five years:

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Provided that, nothing in this clause shall apply to the member whose absence has been condoned by the general body of the Society;

¶184

(b) to utilise minimum level of services at least once in a period of five consecutive years as specified in the by-laws of the society:

¶185

Provided that, a member who does not attend at least one meeting of the general body as above and does not utilise minimum level of services at least once in a period of five consecutive years, as specified in the by-laws of such society shall be classified as non-active member:

¶186

Provided further that, when a society classifies a member as a non-active member, the society shall, in the prescribed manner communicate such classification, to the concerned member within thirty days from the date of close of the financial year:

¶187

Provided also that, a non-active member who does not attend at least one meeting of the general body and does not utilise minimum level of services as specified in the by-laws, in next five years from the date of classification as nonactive member, shall be liable for expulsion under section 35:

¶188

Provided also that, a member classified as non-active member shall, on fulfillment of the eligibility criteria as provided in this sub-section be entitled to be re-classified as an active member:

¶189

Provided also that, if a question of a member being active or non-active member arises, an appeal shall lie to the Registrar within a period of sixty days from the date of communication of classification:

¶190

Provided also that, in any election conducted immediately after the date of commencement of the Maharashtra Cooperative Societies (Amendment) Act, 2013, all the existing members of the society shall be eligible for voting, unless otherwise ineligible to vote.

¶191

Thus, under the unamended Section 26, there was a provision for classification of a member as a non-active member, who did not attend at least one meeting of general body or did not utilise minimum level of services at least once in five consecutive years as provided in the bye-laws of the society. The decision classifying a

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member was made appealable before Registrar within 60 days from the date of communication of classification under 5^th proviso to clause (b) of sub-section (2) of unamended Section 26 of the MCS Act. Rule 20A of Rules of 1961 provides for mode of communication to classification of non-active member and provides thus:

¶196

20A. Mode of communication of classification of non-active member

¶197

If a member is classified as non-active member, the society shall communicate such classification in Form ‘W’, to the concerned member within thirty days from the date of close of the financial year by Registered Post Acknowledgment Due, by Speed Post, by and delivery, by e-mail or otherwise and also by publishing name or names of such members on notice board of the concerned society:

¶198

Provided that, on fulfillment of conditions, the member shall be reclassified as active member.

¶199

Thus, under the provisions of Section 26 of the MCS Act as it stood prior to 28 March 2022 amendment, there was a detailed procedure provided for classification of a member as a non-active member. After following the said process, the concerned Society could communicate the decision classifying the member as a non-active member within a period of 30 days of date of closure of financial year. Such a member classified as ‘non-active’ member becomes liable for expulsion under Section 35 of the MCS Act. Thus, no member automatically becomes non-active member in absence of a classification after following the process mandated under un-amended Section 26 r/w Rule 20A of the MCS Rules 1961. Therefore, even if the exercise of deletion of name of any non-active member from list of voters was to be done prior to 28 March 2022, the District Cooperative Election Officer could not have, on its own, proceeded to delete the name of any member by treating him/her as non-active

¶200

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member. In short, even prior to 2022 amendment, it was not lawful for District Co-operative Election Officer to take a decision about status of any member as an active or non-active member. Such classification could only be made by the Society, which could be subjected to appeal before the Registrar.

¶204

However, in the present case, provisions of Section 26 of the MCS Act, as it stands today after the 2022 amendment, are applicable, which has completely dealt away with classification of a member as active or non-active member. Section 26 of the MCS Act, as it stands after 28 March 2022, provides for only denial of rights to a member unless he has made such payments to the society in respect of membership as are prescribed under the bye-laws of the Society.

¶205

Provisions under Section 27 of the MCS Act have also undergone a change w.e.f. 28 March 2022 by Mah. Act 28 of 2022 where sub-section (1A) has been deleted. Section 27 deals with voting powers of members and the amended Section 27 after 28 March 2022 reads thus:

¶206

27. Voting powers of members

¶207

(1) Save as otherwise provided in sub-section (2) to (7), both inclusive, no member of any society shall have more than one vote in its affairs; and every right to vote shall be exercised personally and not by proxy:

¶208

Provided that, in the case of an equality of votes the Chairman shall have a casting vote:

¶209

Explanation. -For the purposes of this sub-section, "votes to more than one candidate from the panel" shall be treated as one vote.]

¶210

1(A) (deleted)

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(2) Where a share of a society is held jointly by more than one person, "the person whose name stands first in the share certificate, if present, shall have the right to vote. But in his absence the person whose name stands second, and in the absence of both, the person whose name stands next, and likewise, in the absence of the preceding persons the person whose name is next on the share certificate, who is present and who is not a minor, shall have the right to vote.

¶214

(3) A society which has invested any part of its funds in the shares of any federal society, may appoint one of its members to vote on its behalf in the affairs of that federal society; and accordingly such member shall have the right to vote on behalf of the society:

¶215

Provided that, any new member society of a federal society shall be eligible to vote in the affairs of that federal society only after the completion of the period of three years from the date of its investing any part of its fund in the shares of such federal society:

¶216

Provided further that, where the election is to a reserved seat under section 73-B, no person shall have more than one vote.

¶217

(3A) An individual member of a society shall not be eligible for voting in the affairs of that for a period of two years from the date of his enrollment as a member of such society:

¶218

Provided that, nothing in this sub-section shall apply in respect of a co-operative housing society and a co-operative premises society.

¶219

(4) A company or any other body corporate constituted under any law for the time being in force which has invested any part of its funds in the shares of a society may appoint any one of its directors or officers to vote on its behalf in the affairs of such society; and accordingly such director or officer shall have the right to vote on behalf of the company or body corporate.

¶220

(5) Where a firm has invested any part of its funds in the shares of a society, any one of its partners appointed by the firm shall be entitled to vote in the affairs of the society on behalf of the firm.

¶221

(6) A local authority or public trust which has invested any part of its funds in the shares of a society, may appoint any of its members or trustees, to vote on its behalf in the affairs of that society; and accordingly such persons shall have the right to vote on behalf of the local authority or the public trust, as the case may be.

¶222

(7) In the case of a federal society, the voting rights of individual members thereof shall be such as may be regulated by the rules made under this Act and by the bye-laws of the society

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(8) No nominal member shall have the right to vote and no such member shall be eligible to be a member of a committee or for appointment as a representative of the society on any other society.

¶226

(9) No nominee of the Government or of any financing bank on the committee of any society shall be entitled to vote at any election of officers of such committee such as, the President, Vice-President, Chairman, Vice-Chairman, Secretary. Treasurer or any other officer by whatsoever designation called, who holds the office by virtue of his election to that office.

¶227

(10) If a member has taken a loan from the society, such member shall, whenever he is a defaulter, as provided in the Explanation to clause (I) of sub-section (1) of section 73CA have no right to vote in the affairs of the society:

¶228

Provided that, a member shall not be deemed to be a defaulter if he has discharged his obligation to deliver his marketable produce to the marketing or processing society and the value of such produce is not less than the amount of his dues, even if the actual settlement of his dues, either in whole or in part, takes place at a later stage.

¶229

(11) The agricultural credit society may issue suitable orders for the purpose of carrying out the provisions of sub-section(10).

¶230

Sub-section (1A) of Section 27 prior to amendment dated 28 March 2022 read as under:-

¶231

(1A) Notwithstanding anything contained in sub-section (1), an active member who subsequently fails to participate in the affairs of the society and to use the services up to the minimum level as specified, from time to time, in the by-laws, shall cease to be an active member and shall not be entitled to vote.

¶232

Provided that, the provision of this sub-section shall not be applicable in respect of elections of societies to be conducted on or before the 31st March 2022.

¶233

Thus, sub-section (1A) provided for cessation of active membership and denial of right to vote to a member, who fails to participate in the affairs of the society and to use services upto minimum level as specified.

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There is also deletion of definition of term ‘active member’ under Section 2 (19)(a-1) of the MCS Act by way of Mah. Act 28 of 2022 w.e.f. 28 March 2022. Prior to the amendment the term ‘active member’ was defined under clause (a-1) of Section 2(19) of the MCS Act as under:

¶237

“Active member” means member, who participates in the affairs of the society and utilised the minimum level of services or products of that society as may be specified in the by-laws’

¶238

Even otherwise, the unamended provisions of Section 26 provided for classification as non-active member who failed to utilize minimum level of services atleast once in a period of five consecutive years. Thus, the concept of ‘failure to supply cane’ cannot be confused with the concept of ‘failure to utilize minimum level of services’ envisaged under unamended Section 26 of the MCS Act.

¶239

Conspectus of the above discussion is that the entire concept of active and non-active membership has been done away with by the amendment of the MCS Act effected from 28 March 2022. Now there is no concept of classification of any member as non-active member nor there is a provision for denial of right to vote to such classified non-active member. Amended provisions of MCS Act would obviously prevail over the bye-laws of Respondent No.5-Society. It cannot be that after deletion of concept of active and non-active members and after recognition of right of every member to vote in the election of the society, bye-laws can still be given effect to for denial of voting right by classifying a person as non-active member.

¶240

Reliance of Mr. Patwardhan on judgment of this Court in Sambha Gangaram Pikale (supra) does not cut any ice. In

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paragraph 5 of the judgment co-ordinate Bench of this Court held as under:-

¶245

Shri Talekar submitted that since disqualifications have been prescribed under section 73FF and section 73FFF of the Act of 1960 and under Rule 58 of the Maharashtra Co-operative Societies Rules, 1961, no further qualifications can be laid down under the bye-laws. The argument is fallacious. What has been prescribed in the Act and Rules are the minimum things which cannot be given go-by by any Co-operative Society. Therefore, disqualifications as are laid down in the Act and rules cannot be watered down by the Society by framing bye-laws contrary to it. But it does not mean that the additional qualifications cannot be prescribed under the bye-laws. In many cases, qualification in respect of residence is prescribed. In many cases, number of shares which should be held by a member for being entitled for election as Director are also prescribed. It cannot be said that no additional qualifications can be prescribed under the rules. It would be within the jurisdiction of the Registrar to examine whether the bye-laws including such qualifications are proper and reasonable. Since the present bye-law is approved by the Registrar, it can well be presumed that the Registrar has accepted its necessity.

¶246

The issue before this Court in Sambha Gangaram Pikale (supra) was entirely different. The issue was whether further qualification could be prescribed in the bye-laws in addition to provisions of Sections 73FF and 73FFF of the MCS Act and Rule 58 of the MCS Rules, 1961 relating to disqualification. This Court was not concerned with the issue as to whether any provision in the bye-law would survive after deletion of the main provision in the Act.

¶247

Mr. Patwardhan has also relied upon judgment of Division Bench of this Court in Vijay Shivaji Kokate (supra) in which it is held in paragraph 8 as under:

¶248

It is in this context that we may now examine the issue before us. The Managing Committee consists of 17 elected members, out of which 10 seats are reserved for general category members and seven seats are reserved seats which includes one member from non-borrowing category. Section 73-C(3) statutorily provides that in Agricultural Credit Societies which gives loans to the individuals for raising crops, there shall not be

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more than one representative on the committee of such society from amongst non borrowing members. The further requirement is that such member should be elected only from amongst the members who have not taken any loans. In other words, a member who can be elected to that seat must be a non borrower alone. The section is silent as to who can vote for electing such non member. The bye-law, however, restricts the right to vote only to members belonging to non-borrowing category. It is further provided that such a member if he takes a loan during the period of his membership, will cease to be a member of the Managing Committee. Can it be said that such bye-law is contrary to section 73C(3) and even if it is contrary, if the bye-law is certified, is it open to this Court to strike down the said bye-law without the parties resorting to the mechanism provided under the provisions of the Act.

¶253

Bye-laws of a co-operative society are not statutory in character though they may have a statutory flavour. They are in the nature of rules made for managing the internal affairs of the society. Amendment of bye-laws which are certified, is as provided by sections 13 and 14 of the Act. A Registrar can only certify those bye-laws which are not inconsistent with the Act and the Rules and to any direction issued by the State Government. Once the bye-laws are certified and registered, they are binding until such time the bye-laws are amended or a person aggrieved pursues the remedies under the mechanism provided by the Act, to set aside the bye-laws. It would not be open to a Writ Court in the exercise of its extraordinary jurisdiction to quash the bye-laws when the party aggrieved has a remedy by way of mechanism under the provisions of the Act. Apart from section 13 there is power in the Registrar under Section 14, to direct a society to amend its bye-laws. It may further be noted that the section contemplates that there cannot be more than one member from the non borrower category in the case of Agricultural Credit Society. In other words, though non borrowing members are members, the Act has imposed a restriction that not more than one such member should be represented on the committee. The Act does not take away the right of such non-borrower members from voting for other categories, as noted by the judgments referred to, with which we are in respectful agreement. The object of such representation is that non-borrowing members should also have a say in the running of the society and that their representative should not be elected by persons other than non-borrowers considering that normally in a co-operative society there would be more borrowing members than non-borrowing members. In fact, according to the figures given by the petitioner at the time of filing of the petition, there was about 662 members of which 514 were from borrowers category and 148 are from non-borrowers category. The question is whether such a bye-law is invalid? In our opinion, in the absence of any bar in the Act and the object behind the provision for providing for representation of a non-borrowing member on the managing committee and considering the model bye-laws based on which the amendment to the bye-laws of respondent No. 3 have been carried out, it was well within the jurisdiction of the registrar to have certified the bye-laws. The bye-laws as amended were approved by the General Body of the society and have been certified by the Registrar.

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Apart from that, as we have noted earlier, the bye-law by itself is clear and unambiguous. In respect of the seat for non borrowers members only the non borrowing members are entitled to exercise their franchise. Not only that, the explanation to bye-law 37 further provides that once a non-borrower is elected and during the term of office takes a loan, he is automatically disqualified as non-borrower member of the managing committee. It cannot be said that such a bye-law which confers a right on non-borrowing members, is contrary to Section 73C of the Act or the judgments of this Court which were cited. In our opinion, therefore, it will not be possible for this Court in the exercise of its extraordinary jurisdiction to quash the bye-law as framed and certified by the Registrar under the provisions of the Act. Petitioners, if aggrieved, will have to resort to the remedy of amending the bye-laws in terms of section 13 of the Act or to move the Registrar under section 14 of the Act and if aggrieved by the decision of the Registrar, then to seek remedy under the Act. This Court will not strike down the bye-law in the exercise of its extraordinary jurisdiction considering that it is not statutory. However, the challenge to the orders of the Certifying Officer and the orders passed in appeal or revision, as the case may be, the decision certifying the bye-law can be examined and if contrary to law, will be struck down, which will have the effect of the bye-law being not certified and consequently not a part of the certified bye-laws.

¶259

The issue before the Division Bench in Vijay Kokate (supra) was with regard to interpretation of provisions of Section 73-C(3) of the MCS Act providing for composition of managing committee of agricultural credit society, which has made a provision of election of one member from amongst non-borrower members. This Court observed that Section 73-C(3) of the MCS Act was silent as to who can vote for electing such non-member but bye-laws restricted the right to vote only to members belonging to non-borrowing category. The issue before this Court was whether the relevant bye-law was contrary to Section 73-C(3) of the MCS Act and whether it was open for this Court to strike down the said bye-law. In my view, the judgment would have no application to the present case as it was found that the concerned bye-law was not contrary to Section73-C(3) of the MCS Act.

¶260

In my view therefore, the District Co-operative Election Officer has rightly rejected the objections relating to deletion of names

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of non-active members from the list of voters. The Election Officer has rightly held that the names of defaulting members or alleged nonactive members could not be deleted from the provisional list of voters without offering them an opportunity of hearing. In both the cases of default in payment of share money as well as failure to supply registered cane in three out of five crushing seasons, there would be a separate factual enquiry qua each member and there cannot be wholesome deletion of entire batch of such members without even granting them an opportunity of hearing. Though Mr. Patwardhan relied upon M.I.D.C. Prakalpgrast Majur (supra) in support of his contention of non-necessity of service of notice on member from voters list, in my view said judgment would not apply to the fact situation in the present case. This Court held in paragraph 25 of the judgment as under:

¶265

Similarly, the argument that if the rules of natural justice are made applicable to a section dealing with disqualification of a member for being continued as a member of the Committee, there is no reason why the principles of natural justice int heir full force and effect could not be applied to a case involving denial of voting right also holds no water. The reason being that cessation of membership is something which is drastic in nature and has permanent effect. The legislative intent of making compliance with the principles of natural justice is also sufficiently indicated in Rule 58 of the Rules, 1961. For this reasons, the Division Bench held that minimum compliance with the rules of natural justice and declaration by a competent authority in compliance with the provision of Rule 58 are necessary for cessation of the membership of a Committee. On the other hand, the consequences of section 27(10) are not so drastic and do not have any permanent effect. A member does not lose his membership. He only loses his voting right and that to temporarily till he makes the repayment of dues of society. Then opportunity is also given to him to clear the dues. So in my humble opinion, the applicability of principles of natural justice int heir full force and effect to section 27(10) cannot be seen.

¶266

However, as rightly pointed out by Mr. Patil-Bankar whether a concerned member has registered his cane for supply to the society

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and whether there was failure on his part to make supply of registered quantity is a question of fact, which needs to be decided in case of individual member and such decision cannot be taken without hearing the concerned member.

¶271

This leaves the last issue of separate objection raised by Petitioner-Sambhaji Shivaji Kate relating to Society members, who had failed to file resolution prior to the cutoff date i.e. 3 October 2023. The objection raised by Petitioner- Mr. Sambhaji Shivaji Kate in this regard was absolutely vague. The said objection was raised by him by way of a separate handwritten application dated 13 October 2023 in addition to his detailed application already filed on 12 October 2023. Said objection reads thus:-

¶272

उपरोक्त हिवर्षेयानुसार हिद . १२/१०/२०२३ रोजी श्री . छत्रपती स .सा . का . लिल. भवानीनर्गर कारखान्याने 'ब' वर्ग� प्रक्षितहिनधी ठराव असे एकत्र २९ सदस्यांचे ठराव आपले काया�लयात हिद. ३/१०/२०२३ हिह अंक्षितम मुदत संपल्यानंतर दाखल केलेले आहेत. सदर दाखल ठराव हे मुदतीत न आल्याने त्यांची नवे मतदार यादीत समाहिवष्ट करून घेण्यास माझी हरकत आहे. तसेच दाखल २९ संस्था यांचेकडे कारखान्याची शेअस� ची थकबाकी आहे त्यामुळे त्यांची नवे मतदार यादीमध्ये समाहिवष्ट करू नयेत व त्यास माझी हरकत आहे.

¶273

कळावे, येर्णेप्रमार्णे हरकत अज� असे.

¶274

There were no material particulars about any particular society, who allegedly filed resolution after the cutoff date of 3 October 2023 prescribed in the circular dated 18 September 2023. Though, this objection appears to be not dealt with by the District Co-operative Election Officer, in my view, the objection was otherwise incapable of being decided in absence of any material particulars.

¶275

The conspectus of the above discussion is that no case is made out by the Petitioners for interference in the order dated 8 April 2024 passed by the District Co-operative Election Officer. The Petitions are

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Page No. 30 of 31

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21 March 2025

¶278

Megha 20_WP_6526_2024_fc_corrected.docx

¶279

devoid of merits and are accordingly dismissed without any orders as to costs.

¶280

[SANDEEP V. MARNE, J.]

¶281

After the judgment is pronounced, the learned counsel appearing for the Petitioners pray for continuation of interim order operational since 30 May 2024. The request is opposed by the learned counsel appearing for the Respondents. Considering the findings recorded for dismissal of the Petitions, the request for continuation of stay is rejected.

¶282

[SANDEEP V. MARNE, J.]

¶283

Note : This judgment is corrected vide order dt 26 March 2025

¶284

Page No. 31 of 31 21 March 2025

Sambhaji Shivaji Kate v. State of Maharashtra Thr Department of Co. Operation and Ors.

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Sambhaji Shivaji Kate v. State of Maharashtra Thr Department of Co. Operation and Ors.

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