1
Anando
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5463 OF 1996
1. Pune District Supervision Co-operative)
Society having its office at )
9, New Shukrawar Peth, )
Rameshwar Chowk, )
Pune 411 002. )
Through its Chief Executive Officer )
Shri D. T. Shirole
ig ) ..Petitioners
)
2. Daund Taluka Supervision Co-operative )
Society Limited )
having its office at )
Daund, District Pune. )
Through its Member Secretary )
and Executive Officer )
Shri N. D. Kapre )
Versus
1. The State of Maharashtra )
through its Secretary to the )
Ministry of Co-operative and Textiles, )
Mantralaya, Mumbai. )
)
2. The Registrar of Co-operative )
Societies and Commissioner of ) ..Respondents
Co-operation, Maharashtra State, )
Pune. )
)
3. The District Deputy Registrar )
Co-operative Societies, )
Pune. )
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WITH
WRIT PETITION NO.119 OF 2006
1. Mangalwedha Taluka Co-op. Supervisory)
Society Limited, Mangalwedha, )
District Solapur. )
)
2. Karmala Taluka Co-op. Supervisory )
Society Limited, Karmala, )
Taluka Karmala )
District Solapur. )
)
3. Malshiras Taluka Co-op. Supervisory )
Society Limited, Malshiras,
ig )
District Solapur. )
) ..Petitioners
4. Akkalkot Taluka Co-op. Supervisory )
Society Limited, )
C/o. Solapur D.C.Bank, )
New Building, Station Road, Akkalkot, )
District Solapur. )
)
5. Barshi Taluka Co-op. Supervisory )
Society Limited, Taluka Barshi, )
District Solapur. )
)
6. North Solapur Taluka Co-op.Supervisory)
Society Limited, 46/1, )
Govind Sadan, Murarji Peth, )
Solapur. )
Versus
1. The State of Maharashtra )
Through its Principal Secretary )
to the Ministry of Co-operation, ) ..Respondents
Marketing and Textiles, Mantralaya, )
Mumbai. )
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2. The Registrar of Co-op. Societies )
& Commissioner of Co-operation, )
Maharashtra State, )
Pune. )
)
3. The District Deputy Registrar, )
Co-operative Societies, )
Solapur. )
)
4. The Divisional Joint Registrar, )
Co-operative Societies, Pune Division, )
Pune. )
having office at Sakhar Sankul, )
Shivajinagar, )
Pune. ig )
WITH
WRIT PETITION NO.124 OF 2006
Solapur District Supervision Co-op. )
Society Ltd., a Co-operative Society duly)
registered under the MCS Act, 1960 )
bearing Registration No. SHP/GEN/33 )
date 24.03.1971 ) ..Petitioner
having its office at Solapur DCC Bank, )
Extension Building, 46, Navi Peth, )
Yogeshwari Complex, )
Solapur - 413 007. )
Versus
1. The State of Maharashtra through )
its Principal Secretary to the Ministry of
)
Co-operation, Marketing and Textiles, )
Mantralaya, )
Mumbai. )
) ..Respondents
2. The Registrar of Co-operative Societies )
& Commissioner of Co-operation, )
Maharashtra State, )
Pune. )
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3. The District Deputy Registrar, )
Co-operative Societies, )
Solapur. )
)
4. The Divisional Joint Registrar, )
Co-operative Societies, )
Pune Division, )
Pune. )
having Office at Sakhar Sankul, )
Shivajinagar, )
Pune. )
WITH
WRIT PETITION NO.2268 OF 2006
Kolhapur Zilla Dekhrekh Sahkari
Sanstha Maryadit,
)
)
Kolhapur. ) ..Petitioner
having office at Shahpuri, 4th lane, )
Kolhapur. )
Versus
1. The State of Maharashtra )
Through the Secretary, )
Co-operation Department, )
Mantralaya, )
Bombay. )
)
2. Commissioner for Co-operation )
and Registrar, Co-operative Societies, ) ..Respondents
Maharashtra State, )
Pune. )
)
3. Divisional Joint Registrar, )
Co-operative Societies, Pune Division, )
Pune. )
)
4. The District Deputy Registrar, )
Co-operative Societies, )
Kolhapur. )
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5. Kolhapur District Central )
Co-operative Bank Limited, Shahupuri, )
Kolhapur. )
WITH
WRIT PETITION NO.3145 OF 2006
Thane District Supervision )
Co-operative Society Limited, )
a Co-operative Society duly )
registered under the MCS Act, 1960 )
bearing Registration No. )
BOM/GNL/TNA/34 date 06.04.1971 )
having its office ) ..Petitioner
at C/o. Thane DCC Bank,
ig )
Kanchanganga Building, 3rd floor, )
Shivaji Peth, Thane (West), )
District Thane. )
Versus
1. The State of Maharashtra through )
its Principal Secretary to the Ministry of)
Co-operation, Marketing and Textiles, )
Mantralaya, )
Mumbai. )
)
2. Commissioner for Co-operation and )
The Registrar of Co-operative Societies, ) ..Respondents
Maharashtra State, )
Pune. )
)
3. The District Deputy Registrar, )
Co-operative Societies, )
Thane. )
)
4. The Divisional Joint Registrar, )
Co-operative Societies, Konkan Division, )
Mumbai. )
Having Office at Konkan Bhavan, )
rd
3 floor, )
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Navi Mumbai - 400 614. )
WITH
WRIT PETITION NO.4158 OF 2006
Ahmednagar Zilla Dekhrekh Sahakari )
Sanstha Limited, )
Chaurana (Bk) Branch, )
behind Market Yard, )
Ahmednagar, ) ..Petitioner
Through its Chief Executive Officer, )
Sarjerao S/o. Laxman Dahiphale, )
Age : 58 years, Occu : service, )
R/o. Ahmednagar, )
District Ahmednagar.
ig )
Versus
1. The State of Maharashtra )
Through the Secretary, )
Co-operation Department, Mantralaya, )
Bombay. )
)
2. The Commissioner for Co-operation, )
Maharashtra State, )
Pune. )
) ..Respondents
3. The Chief Executive Officer and )
Divisional Joint Registrar, )
Co-operative Societies, Pune Division, )
Pune. )
)
4. The District Deputy Registrar, )
Co-operative Societies, )
Ahmednagar. )
)
5. Ahmednagar District Central )
Co-operative Bank Limited, )
Ahmednagar. )
Through its Managing Director )
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WITH
WRIT PETITION NO.7490 OF 2006
1. Sindhudurg Zilla Dekhrekh Sahakari )
Sanstha Maryadit, )
Through its Director )
Shri Prakash Ramchandra Parab )
At & Post Oras, Sindhudurg Nagari, )
District Sindhudurg. )
) ..Petitioners
2. Kudal Taluka Dekhrekh Sahakari )
Sangh Maryadit, )
Through its Director )
Shri Shivram Bhau Jadhav )
At & Post Kudal
ig )
District Sindhudurg. )
Versus
1. The State of Maharashtra )
Through its Secretary to the )
Ministry of Co-operation & )
Textiles, Mantralaya, )
Mumbai. )
)
2. The Commissioner for Co-operation )
and Registrar of Co-operative Societies, ) ..Respondents
Maharashtra State, )
Pune. )
)
3. The Divisional Joint Registrar, )
Co-operative Societies, Konkan Bhavan, )
Belapur (Navi Mumbai). )
4. The District Deputy Registrar, )
Co-operative Societies, )
District Sindhudurg. )
Having office At & post Oras, )
Sindhudurg Nagari, )
District Sindhudurg. )
)
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5. The Sindhudurg District Central )
Co-operative Bank Limited, )
Oras, Sindhudurg Nagari, )
District Sindhudurg. )
Mr. G. S. Godbole with Ms. Manjiri Parasnis, Advocate, for the
Petitioners in Writ Petition Nos.124/2006, 5463/1996,
119/2006, 3145/2006 and 4158/2006
Mr. M. L. Patil, Advocate, for the Petitioners in Writ Petition No.
2268/2006 and Dr. D. R. Talankar, Advocate, for the Petitioners
in Writ Petition No.7490/2006
Mr. C. R. Sonawane, Assistant Government Pleader, for the
Respondent Nos.1 to 4 - State
ig CORAM : A.M.KHANWILKAR &
R.M.SAVANT, JJ.
JUDGMENT RESERVED ON : 17TH MARCH, 2010
JUDGMENT PRONOUNCED ON : 22ND APRIL, 2010
JUDGMENT ( PER R.M.SAVANT, J.)
. The above group of Petitions raise a common issue
and involve identical facts and therefore, are heard and
disposed of together. The challenge in the above Writ Petitions,
save and except Writ Petition No.5463 of 1996 and W.P.No.7490
of 2006 is to the Circular dated 28th October, 2005 (Ex.O)
issued by Respondent No.2, the Letter/Order dated 19th
October, 2005 (Ex.Q) issued by the Respondent No.1 to the
Respondent No.2 and the Letter/Order dated 17th December,
2005 (Ex.P) issued by the Respondent No.4. In W. P .No.7490
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of 2006 though the challenge is to the letter dtd. 28th October,
2005 the other letters are dtd. 29th November, 2005 and 9th
January, 2006 In Writ Petition No.5463 of 1996, the challenge
is to the Letter/Order dated 25th September, 1996 issued by the
Respondent No.3. The Letter/Order dated 19th August, 1996
issued by the Respondent No.1. The said Letters/Orders are
the predecessors to the Letters/Orders impugned in Writ
Petition No.124 of 2006 and the other companion matters.
2. The Petitioners in Writ Petition Nos.124 of 2006,
2268 of 1996, 3145 of 2006, 4158 of 2006, 5436 of 1996 and
7490 of 2006 are the District Supervision Co-operative
Societies namely the Solapur District Supervision Co-operative
Society, Kolhapur Zilla Dekhrekh Sahkari Sanstha Maryadit,
Thane District Supervision Co-operative Society Limited,
Ahmednagar Zilla Dekhrekh Sahakari Sanstha Limited,
Sindhudurg Zilla Dekhrekh Sahakari Sanstha Maryadit and
Pune District Supervision Co-operative Society and another.
The Petitioner in Writ Petition No.119 of 2006 is a Taluka
Supervision Society namely Mangalwedha Taluka Co-operative
Supervision Society Limited, Solapur and others. As mentioned
here in above, all the aforesaid District Supervision Co-
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operative Societies and the Taluka Supervision Co-operative
Society have challenged the Letters/Orders mentioned here in
above. For the sake of convenience the facts in Writ Petition
No.124 of 2006 would be referred to, as the same has been
treated as lead matter.
3. The genesis of the issue which arises in the above
Petitions is in the introduction of Section 69-A in the Co-
operative Societies Act, 1960 (Hereinafter referred to as “Said
Act”) which was introduced by way of amendment in the said
Act in the year 1975 with a view to provide for proper
supervision of the working of the Primary Agricultural Credit
Co-operative Societies and Multipurpose Co-operative Societies.
It appears that the State felt the need to establish the cadre of
Societies to be known as the Co-operative State Supervision
Cadre. The basic intention of the legislature in introducing
Section 69-A seem to be streamlining the manner of
functioning of the various Societies and facilitate the speedy
recovery of loan etc. with a view to maintain proper growth
and health of the Co-operative movement. It is in the said
background that the said Section 69-A was introduced in the
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statute book in the year 1975. The salient features of the said
Section 69-A are as under :-
(i) Co-operative State Cadre constitution of
Secretaries of Primary Agricultural Credit Co-
operative Society, Multipurpose Co-operative
Society etc.
(ii) Immediate supervisory control of the cadre
given to the Taluka Supervision Society consisting
of the Societies Act to which the cadre persons are
deputed.
(iii) Fund known as Co-operative State cadre
employment fund established for the meeting
expenses of the cadre.
(iv) Societies deriving the benefit from the cadre to
contribute to the fund. Such Societies to be
notified by the State Government.
(v) The State Government granted powers to make
rules relating to the fund.
4. The State Government in exercise of the powers
conferred under Section 69-A(4) of the said Act issued a
Notification bearing No.CDR10179/3008 – (21)-2C dated 3rd
March, 1979 directing all the District Central Co-operative
Banks except the Bombay DCC and the Ahmednagar DCC to
contribute to the Supervision Funds. The State Government
also felt the need to appoint a Committee of experts to submit a
report to the State Government in respect of the problems faced
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by and the functioning of the Supervision Societies and hence,
by Government Resolution dated 11th March,1989 the
Respondent No.1 appointed a Committee under the
Chairmanship of Padmashree Shamrao Kadam for making
various recommendations to the State Government in respect of
the cadre of Secretaries (Gat Sachiv). The said Committee
carried out exhaustive work and submitted its report dated 5th
July, 1989 to the State Government. The said report inter alia
disclosed various aspects including the service conditions of
Secretaries, the control to be exercised on the Primary
Agricultural Credit Co-operative Society. Since at the time
District Supervision Society was in existence, the Committee in
its report noted that it was intended to have full time Executive
Officer preferably an officer from the District Central Co-
operative Bank to look after the day to day business of the
Supervision Society. It was further observed by the said
Committee in Clause 5.10 of its report that there was no
representation of the Co-operative Societies in which the
Secretaries were deputed. It was further observed that since
the District Deputy Registrar of the Co-operative Society in
particular District was over burdened with various legal and
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other works under the said Act, it was impossible for the said
District Deputy Registrar to devote much attention to the work
of the Supervision Society. It was, therefore, the
recommendation of the said Committee headed by Shri
Shamrao Kadam that a Committee of eight persons having
proper representation of the DCC Bank should be the Managing
Committee of such Society. The aforesaid recommendation is
relevant from the point of view of the present Petitions.
5. It appears that the State Government i. e.
Respondent No.1 herein considered the said report and after
such consideration issued a Government Resolution dated 13th
October, 1989 accepting various recommendations of the said
Shamrao Kadam Committee in respect of the recommendations
in respect of the District Level Supervision Society. It was
decided that by the State Government vide Clause 4(a) to the
Schedule of the said Resolution to accept the recommendations
of the Committee. In the light of the said Government
Resolution dated 13th October, 1989 the Model Bye laws for the
District Co-operative Supervision Societies were prepared by
the Registrar. The said Model Byelaws were thereafter
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approved. The Petitioners above named, who are the District
Supervision Societies adopted the Model Byelaws. Under the
said Model Byelaws especially Bye-law Number 15, the
constitution of the Managing Committee of the District
Supervision Society having a total of ten members is
conceptualized. The said Clause provides that the Assistant
Registrar of Co-operative Societies or an Officer of the District
Central Co-operative Bank to be appointed as Ex-officio
officer/Chief Executive Officer either on deputation or with
additional charge. Thus, it was left to the Managing Committee
of the Societies like the Petitioners to choose as to whether an
Officer of the rank of the Assistant Registrar of the Co-operative
Department or an Officer of the District Central Co-operative
Bank to be appointed as the Executive Officer or Secretary.
6. The purpose and intent of establishment of the
Supervisory Co-operative Societies at the Taluka and District
level is to have direct and effective control over the working of
the various Primary Rural Credit Co-operative Societies. The
intention is to see that the work of recovery of loans which are
lent and disbursed by the various Societies to its members
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should be done properly and efficiently, and also to ensure that
the Societies make repayment of their loans which are taken
from the District Central Co-operative Banks. As can be seen
the approved Model Bye-laws give a choice to the District Co-
operative Supervision Society to have either an Assistant
Registrar or an Officer from the District Central Co-operative
Bank as its Chief Executive Officer according to its choice. The
Co-operative movement at the Taluka level depends upon
finance from the District Co-operative Central Banks and since
the loans are provided by the concerned District Central Co-
operative Bank a proper control of the District Central Co-
operative Bank over the recovery of loans was thought
essential. With a view to give some sort of autonomy to the
District Co-operative Supervision Societies, they were given a
choice of either having an Officer from the District Central Co-
operative Bank or an Officer of the Co-operative Department as
Member Secretary-cum-Chief Executive Officer. Since the work
of the Chief Executive Officer of the District Supervision Society
involves the work of supervision over the work of the Block
Secretary and recovery of the loan of the District Central Co-
operative Bank, a person having expertise in financial matters
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and recovery of loans in the Co-operative Sectors was required
to be the Chief Executive Officer of the Taluka Co-operative
Society. The approved Model Bye-laws, therefore, provide for
autonomy to the Supervision Societies in the matter of the
appointment of the Chief Executive Officer. It would be
relevant to note that the District Central Co-operative Bank in
each of the Districts in respect of which the Petitions have been
filed make a major contribution to the Supervision Fund from
which the affairs of the respective Petitioners – Societies are
conducted. The contribution of the concerned District Central
Co-operative Bank is increasing by the year and due to the said
contribution made by the District Central Co-operative Bank,
the Societies like the Petitioners above named are able to
sustain themselves and function.
It would be pertinent to note that the Apex Society
of the Supervisory Co-operative Society is the Maharashtra
Government Sanvargikaran Society Limited, Pune. The said
Society, in its Annual General Meeting has decided that it
would be in the interest of the Supervision Society to appoint
employee of the District Central Co-operative Bank as Chief
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Executive Officer by Resolution No.1A passed in the meeting
dated 12th November, 1994, it was decided that the
Commissioner of Co-operation, be reported to issue a specific
direction to appoint a Bank Officer as Chief Executive Officer of
the District Supervision Society. It would also be pertinent to
note that Resolution was also passed in the meeting dated 11th
October, 1994 of the Apex Society that in all the District
Supervision Co-operative Societies, a Officer from the
concerned DCC Bank should be appointed as Chief Executive
Officer. A meeting was also held on 12th November, 1999 under
the chairmanship of the then Hon’ble Minister for Co-operation
of the State of Maharashtra in respect of the difficulties of the
Block Secretary and it was clarified therein vide Resolution No.
3 that the Executive Officer of the District Supervision Society
and Taluka Supervision Society should be appointed from the
DCC Bank and that if necessary amendment be made to that
effect in the Bye-laws. From the above conspectus of facts it
can be seen that a conscious decision was taken at the
Government level to appoint an Officer of the District Central
Co-operative Bank as the Executive Officer of the District
Supervision Society so as to ensure timely payment of the
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Salary of the Block Secretaries and to ensure proper control
over the working of the Co-operative Credit Societies and
Primary Societies with a view to have proper loan recovery, it
was also felt necessary that District Central Co-operative Bank
should have control over working of the Credit Society. From
the averments made in all the above Petitions, all the
Petitioners above named which are District Supervision
Societies had appointed an Officer from the concerned District
Central Co-operative Bank as its Chief Executive Officer-cum-
Member Secretary and it is their case that due to the experience
and knowledge of the said Officer, there was substantial
improvement in the working of the Petitioner – Societies.
There was also an autonomy vested in them either to appoint
an Officer from the Co-operative Department of the State
Government i. e. Assistant Registrar or an Officer from the
District Central Co-operative Bank as Executive Officer. This
autonomy was available to them under the Bye laws which are
duly approved by the State Government inasmuch as there are
model Byelaws prepared by the Respondent No.2 herein.
Therefore, there was no authority with the Respondents herein
to direct the Petitioner – Societies to appoint an Officer from
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the Co-operative Department as their Secretary/Executive
Officer. As such the impugned directions have the effect of
curtailing the rights, that the Petitioner – Societies have as
regards their management.
7. It appears that the Respondent No.3 herein by
Order dated 28th September, 1996 directed the Petitioners –
Societies that in pursuance of the letter dated 19th August, 1996
issued by the Respondent No.1 herein i. e. the State
Government, he was appointing himself as Secretary/Executive
Officer of the Petitioner – Societies. As the said letter 20th
September, 1996 indicates the same was issued by the
Respondent No.3 in view of the letter dated 19th August, 1996
issued by the Respondent No.1. Aggrieved by the said
Letter/Order issued by the Respondent No.1 dated 19th August,
1996 and the Letter/Order dated 20th September, 1996 issued
by the Respondent No.3. The Petitioner in Writ Petition No.119
of 2006 had filed Writ Petition No.4905 of 1996 in this Court
challenging the legality, validity and propriety of the said
Letters/Orders. The said Writ Petition came to be admitted by
this Court. An interim relief came to be granted thereby
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staying the appointment of the Respondent No.2 – as the Chief
Executive Officer of the Petitioner – Societies. Another Writ
Petition No.4904 of 1996 came to be filed by one Mohol Taluka
Sahakari Maryadit and another challenging the same Order
dated 19th August, 1996 passed by the Respondent No.1. The
said Writ Petition was also admitted. Interim reliefs were
granted staying the said Letter/Order dated 19th August, 1996.
8.
Whilst the said Writ Petitions were pending, a
Circular came to be issued on 20th January, 2003 which was
purportedly issued as a consequence of the decision taken in
the meeting conveyed in the office of NABARD. The said
decision was to the effect that in all the District Supervision Co-
operative Societies, the officer of the concerned District Central
Co-operative Bank should be appointed as the Chief Executive
Officer. The said Circular, therefore, was placed on record by
the Petitioner – Societies by way of an Affidavit-in-rejoinder in
the said Writ Petition No.4905 of 1996. The said Writ Petitions
being 4904 of 1996 and 4905 of 1996 were disposed of by this
Court by accepting the Circular dated 23rd January, 2003 issued
by the Commissioner for Co-operation and the Registrar of the
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Co-operative Society, that the officer of the concerned District
Central Co-operative Bank would function as Chief Executive
Officer and Member Secretary of the concerned District and
Taluka level Supervision Societies by Judgment and Order
dated 27th February, 2003. It is the case of the Petitioners that
the said Judgment and Order dated 27th February, 2003 has
attained finality as the matter was not carried in Appeal to the
Apex Court by the State Government.
9. Inspite of the said Circular dated 23rd January, 2003
issued by the Commissioner for Co-operation and Registrar of
Co-operative Society on the basis of which Writ Petition Nos.
4904 of 1996 and 4905 of 1996 came to be disposed of by
Order dated 27th February, 2003. The Chief Executive Officer of
the Maharashtra State Cadres Co-operative Society Limited,
who is Divisional Joint Registrar of the Co-operative Societies,
Pune Region, Pune, informed the Petitioners that the
Respondent No.2 herein has issued Order/Circular dated 28th
October, 2005 directing that the District Deputy Registrar of
Co-operative Societies in every District should be appointed as
Member Secretary and Chief Executive Officer of the District
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Supervisory Society and directing that the Deputy
Registrar/Assistant Registrar of Co-operative Society in every
Taluka should be appointed as Member Secretary and Executive
Officer of the Taluka Supervisory Society. The said Circular
dated 20th October, 2005, it appears has been issued by the
Respondent No.2. On the basis of said Letter/Order dated 19th
October, 2005 issued by the Respondent No.1, it further
appears that on the basis of the Letter/Order dated 19th
October, 2005, the Respondent No.4 herein has issued the
Letter/Order dated 17th December, 2005 and by the said Order,
the Respondent No.4 herein has directed that in furtherence of
the Circular dated 28th October, 2005 issued by the Respondent
No.2, he was appointing the Respondent No.3 herein as
Member Secretary/Executive Officer of the Petitioner –
Societies. As indicated above, the said Circular dated 20th
October, 2005, the letter dated 8th November, 2005 and the
Order dated 17th December, 2005 issued by the Respondent No.
4 are impugned in the above Petitions. As mentioned earlier in
so far as Writ Petition of 1996 is concerned, the said Writ
Petition raises the same challenge as raised in the year 1996 by
Writ Petition Nos.4904 of 1996 and 4905 of 1996 challenging
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the predecessor/Order/Circular issued by the Respondent No.1
which were impliedly withdrawn in view of the Circular dated
20th January, 2003 issued by the Commissioner for Co-
operation and Registrar of the Societies and on the basis of
which the said Writ Petitions being numbers 4904 of 1996 and
4905 of 1996 were disposed of.
10. We have heard Mr. G. S. Gobdole, the learned
Counsel for the Petitioners in all the Writ Petitions except Writ
Petition Nos.2268 of 2006 and 7490 of 2006, Mr. M. L. Patil,
the learned Counsel appearing for the Petitioners in W. P. No.
2268/2006, Dr. D. R. Talankar in W. P. No.7490/2006 and Mr.
C. R. Sonawane, the learned Assistant Government Pleader.
11. On behalf of the Petitioners, it is contended by the
learned Counsel Shri Godbole that the Respondent No.1 – State
having appointed the said Shamrao Kadam Committee to go
into the various aspects of the functioning of the said
Supervision Societies and having accepted the
recommendations of the said Committee by issuing a
Government Resolution dated 13th October, 1989. It was not
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open for the Respondent No.1 to take a decision contrary to
decision which has been taken vide said Government
Resolution dated 13th October, 1989 without there being any
material to support such a decision. The learned Counsel
further submitted that the Orders do not disclose that the State
Government has taken a decision pursuant to any new study
being carried out as regards the functioning of the Supervision
Societies. The entire action, therefore, according to the learned
Counsel in issuing the impugned Orders is capricious and
arbitrary.
12. The learned Counsel further submitted that the
model Bye-laws have been approved by the Respondent No.2 in
which is ingrained the decision of leaving it to the Supervision
Societies to appoint the Assistant Registrar or the Deputy
Registrar as the Chief Executive Officer of the Supervision
Societies. Having approved the Model Bye-laws, if the
Respondent No.1 wanted a change in the set up then an
appropriate action under Section 14 of the said Act ought to
have been taken by the Respondent No.1 to amend the said
Model Bye-laws. The learned Counsel submitted that the
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Respondents in issuing the directions as contained in the
impugned Letters/Orders have virtually interfered in the
management of the Supervision Societies by directing them to
appoint the District Deputy Registrar as the Secretary/Chief
Executive Officer of the Supervision Societies which is contrary
to the mandate of Sections 72 and 73 of the said Act. The
learned Counsel further submitted that in view of the past
litigation wherein the predecessor Letters/Orders issued by the
Respondents whereby similar action taken by the Respondents
was challenged and which Writ Petitions were disposed of in
view of the Circular issued by the State Government dated 23rd
January, 2003, whereby the Respondents had once again
reverted to the original position of leaving the choice to the
Supervision Societies of appointing either the Assistant
Registrar or an Officer of the District Central Co-operative
Bank. The Respondents therefore in now issuing the impugned
Orders have acted in an unreasonable and arbitrary manner.
The learned Counsel further submitted that in view of the fact
that the earlier litigation challenging an identical action taken
by the State having been disposed of on the basis of the
Circular dated 23rd January, 2003, it was not open for the
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Respondent No.1 to once again resort to the self same action
without there being any material available with the Respondent
No.1. According to the learned Counsel the said Order passed
in the said Writ Petitions having become final, it was not open
for the State to resort to the same action. The learned Counsel
lastly submitted that the Respondents in issuing the impugned
Letters/Orders have thereby acted virtually in total disregard to
the Orders passed in the said Writ Petition Nos.4904 of 1996
and 4905 of 1996. The learned Counsel for the Petitioners,
therefore, submitted that the above Writ Petitions are required
to be allowed by quashing and setting aside the impugned
Letters/Orders.
13. The learned Counsel Shri M. L. Patil and Dr. D. R.
Talankar for the Petitioners in Writ Petition No.2268/2006 and
Writ Petition No.7490/2006 did not advance any other
submission, however they submitted that the Writ Petitions
filed by the said Petitioners should be allowed.
14. On behalf of the Respondents the learned Assistant
Government Pleader Shri Sonawane submitted that the
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impugned Letters/Orders are issued under the provisions of the
said Act and especially Section 69-A thereof. The learned
Assistant Government Pleader submitted that the said action
has been taken with a view to see that the policies of the
Respondent No.1 i. e. the State are implemented. The learned
Assistant Government Pleader further submitted that the
impugned Letters/Orders have been issued as the Respondent
No.1 was of the view that the control of the Supervision
Societies ought to be in a person, who is independent and who
is not amenable to the influence of the Managing Committee as
it was seen that the Managing Committee at times is influenced
by vested interest in particular matters. The learned AGP
submitted that in any event, the post of the Chief Executive
Officer has been created to act as a control over the affairs and
management of the Societies so that the Society is not run in a
manner which is detrimental to the Co-operative movement.
Hence, to ensure the said objective the Respondents thought it
fit to issue the Letters/Orders which are impugned in the
present Petitions.
15. We have heard the learned Counsel for the parties
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and have given our anxious consideration to the rival
contentions.
16. In view of the stand taken by the Respondent No.1
– State that the impugned Letters/Orders have been issued in
terms of Section 69-A of the said Act. It would be appropriate
to consider whether the said provision confers power on the
Respondent No.1 to take the action as has been taken in the
instant case. The said Section 69-A is reproduced herein
under :-
“(69-A. Constitution of Co-operative State Cadre
of Secretaries of certain societies andestablishment of Employment Fund for such
cadre. – (1) There shall be constituted a Co-
operative State Cadre of Secretaries of primary
agricultural credit societies, multipurpose co-
operative societies and service co-operatives andsuch other classes of societies as may be prescribed
in this behalf (hereinafter in this section referred to
as “the Co-operative State Cadre”) consisting of
persons recruited for this purpose by the Central
Societies notified in this behalf by the StateGovernment. The number of persons to be
recruited and their conditions of service shall be
determined by the Central Societies in accordance
with such general or special guidelines, if any, as
may be issued by the State Government, from time
to time.
(2) A Central Society may, from time to time,
depute any person appointed by it to that Cadre to
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work under any society referred to in sub-section
(1), as it may consider necessary. Where any such
person is posted to work under any society, his
services shall be taken over by the society on such
post, for such period and on such other terms and
conditions, as the Central Society may determine,
but the person so posted shall draw his salary and
allowances from the Fund established under sub-
section (3).
(2A) The immediate initial supervisory control on
the person appointed to the cadre and deputed or
posted to work as secretary under each of the
societies referred to in sub-section (1) shall be with
the Taluka Supervision Society consisting of the
societies, in each respective Taluka to which such
persons are deputed, as members thereof and
registered for the purpose. The Taluka Supervision
Society, shall exercise such powers and discharge
such functions or perform such duties as may be
conferred or imposed on it by the bye-laws of such
society.
(3) An Apex society notified in this behalf by the
State Government shall establish a Fund to be
called ” the Co-operative State Cadre Employment
Fund”, which when established, shall be deemed to
have been established with effect from the 1st day of
July, 1973. It shall be utilised for meeting the
expenses on the salaries, allowances and other
emoluments to be paid to the persons appointed to
the Co-operative State Cadre and the other
expenditure relating to the Cadre.
(4) (a) Every society or class or classes of societies,
which in the opinion of the State Government,
derive any benefit, directly or indirectly, from the
services of any Secretary belonging to the Co-
operative State Cadre of Secretaries, and
(b) Every other body corporate carrying on any
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trade, business or industry or class or classes of
such corporate bodies, which in the opinion of the
State Government, derives such benefit as
aforesaid, and which are notified by the State
Government in this behalf, from time to time, by
general or special order, shall, with effect from the
1st day of July, 1977, contribute annually to the said
Fund, at such rate and in such manner as may be
prescribed, and different rates may be prescribed
for different societies or other corporate bodies or
class or classes of societies or class or classes of
other corporate bodies. In determining the rate or
rates of contribution, the State Government shall
take into consideration the expenditure referred to
in sub-section (3), the services likely to be rendered
and the financial condition of the societies or other
bodies concerned.
Explanation. – Notwithstanding anything contained
in any law for the time being in force, for the
purposes of levy and collection of the contribution
to the said Fund by any other corporate body to
which section applies, such corporate body shall be
deemed to be a society governed by this Act.)
(5) Where there a failure to comply with the
requirements of the last preceding sub-section, the
Registrar may serve a demand notice on the society
concerned to pay the contribution within two
months from the date of demand. Such demand
shall be a charge on the income of the society. If
the contribution is not paid within the period
aforesaid, the Registrar may direct any Bank or
person having custody of the funds of the society to
pay the amount of the contribution immediately,
and such Bank or person shall comply with the
orders of the Registrar. Every payment made
pursuant to such direction shall be a sufficient
discharge to such Bank or person from all liability
to the society in respect of any sum so paid by it or
him out of the moneys of the society in his custody.
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(6) The State Government may make rules
regulating all matters connected with or ancillary to
the custody and maintenance of, the payment of
moneys into, and the expenditure and withdrawal
of moneys from, the said Fund.
(7) Notwithstanding anything contained in sub-
sections (1) to (6), on and from the 1st day of
January, 2009, nothing in sub-sections (1) to (6)
shall apply to a co-operative credit structure entity.)
17. A reading of the said Section, therefore, discloses
that it is under the said Section that Co-operative State Cadre
of Secretaries of primary agricultural Credit Societies,
multipurpose Co-operative Societies and service Co-operative
Societies and such other classes of Societies as may be
prescribed in that behalf consisting of persons recruited for this
purpose by the Central Societies notified in this behalf of the
State Government, is postulated. The power of regulation, if
any, as can be seen is only in sub-section 6 of the said provision.
The said regulatory power is only limited to all matters
connected with or ancillary to the custody and maintenance of
the payment of monies into and the expenditure and
withdrawal of monies from the said fund. The said Section,
therefore, does not give any regulatory power in so far as the
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management of the Societies is concerned which management
in terms of the said Act is vested with the Managing Committee
of the Society. In our view, therefore, reliance placed by the
Respondent No.1 on Section 69-A for issuing the impugned
letters/orders is totally misplaced hence, the impugned
letters/orders which have the effect of interfering with the
management of the Societies do not have the statutory backing
and are therefore illegal.
18. It would be significant to note that after the said
Section 69-A was introduced in the statute book the
Respondent No.1 – State had appointed a Committee headed
by an expert in the Co-operative field Shri Shamrao Kadam, for
making various recommendations to the Respondent No.1 in
respect of the cadre of the Secretaries. The said Committee had
gone into various aspects of the service conditions of the
Secretaries and the control over the Supervision Societies over
the Primary Societies. The Committee in its report has noted
that it was necessary to have a full time Executive Officer
preferably an Officer from the concerned District Central Co-
operative Bank to look after day to day business of the
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Supervision Societies. It was further observed by the
Committee that since the District Deputy Registrar of Co-
operative Societies in the particular District was already
overburdened with various legal and other matters falling
within his jurisdiction under the said Act. It was not practically
possible for the District Deputy Registrar to pay much attention
to the work of the Supervision Societies. It was, therefore, the
recommendation of the said Shamrao Kadam Committee that a
Committee of eight persons having a representative of the
District Central Co-operative Bank who should be the Managing
Committee of such Supervision Societies. It is further,
significant to note that the said report of the Shamrao Kadam
Committee was accepted by the State Government and
consequently, Government Resolution dated 13th October, 1989
came to be issued accepting the various recommendations
made by the said Shamrao Kadam Committee. Clause 4(a) of
the Schedule to the said Government Resolution specifically
refers to the recommendations of the Committee in respect of
the District Level Supervision Societies. As a result of the
acceptance of the Report of the said Shamrao Kadam
Committee, Model Bye-laws were prepared by the Registrar
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and approved. In terms of Bye law No.15 of the Model Bye
laws an Assistant Registrar of Co-operative Society or an Officer
of the District Central Co-operative Bank is to be appointed as
Ex-officio Secretary/Chief Executive Officer of the Supervision
Societies. The aforesaid facts, therefore, indicate that
Respondent No.1 had taken a conscious decision based on the
recommendations of the Shamrao Kadam Committee which
decision was reflected in the approved Model Bye Laws framed
by the Registrar and therefore, the State without there being
any material on record or without there being any further study
being carried out could not have reversed the decision already
taken of leaving it to the Supervision Societies either to appoint
the Assistant Registrar or an Officer of the District Central Co-
operative Bank as the Chief Executive Officer. The impugned
Letters/Orders, therefore, in our view are unsustainable on the
said ground also.
19. The said decision in our view is also contrary to the
Bye-Laws especially in the fact situation of this case wherein
Model Bye Laws were framed pursuant to the decision taken by
the State Government to accept the recommendations of the
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said Shamrao Kadam Committee and the Bye Laws having been
framed by incorporating the essence of the recommendations of
the said Committee in the Bye Laws.
20. It is also required to be seen that essentially the
functioning of the Supervision Societies is to supervise the
Primary Societies who advance loans to the agriculturists for
various purposes. The said loans are advanced under the aegis
of the concerned District Central Co-operative Banks. The
concerned District Central Co-operative Banks, therefore, have
a stake in the proper functioning of the said Supervision
Societies as the recovery of the loans advanced by them
depends on the Supervision Societies. The District Central Co-
operative Banks have, therefore, a stake in the functioning of
the Supervision Societies and therefore, in the said context the
Shamrao Kadam Committee had observed that it would be in
the interest of the District Central Co-operative Banks that an
Officer of the said Bank, functions as a Chief Executive
Officer/Secretary of the Supervision Societies. The impugned
Letters/Orders, therefore, have the effect of interfering with the
functioning of the said Supervision Societies, who otherwise
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were entitled to choose between the Assistant Registrar or an
Officer of the District Central Co-operative Bank to be the Chief
Executive Officer or Secretary of the Supervision Societies. A
conscious decision taken, therefore, is sought to be reversed by
an executive fiat without there being any material for the same.
Another aspect to be noted is that if the District
Deputy Registrar is required to play two roles namely the Chief
Executive Officer as also discharge his duties as District Deputy
Registrar under the said Act it would result in conflict of
interests as the District Deputy Registrar then would have to
decide upon the actions taken by him as a Chief Executive
Officer of the Supervision Societies which would not be in the
interest of the functioning of the Supervision Societies or his
functioning as the District Deputy Registrar.
It would also be significant to note that the similar
action of the Respondents in the year 1996 was challenged by
the supervision societies by filing Writ Petition Nos.4904 of
1996 and 4905 of 1996 which Writ Petitions came to be
disposed of in view of the Order passed in the year 2003. By
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which Order the Respondents had again reverted back to the
original position, whereby leaving the choice of choosing
between the Assistant Registrar or an Officer of the DCC Bank
to act as Chief Executive Officer to the concerned supervision
society. The said Order passed in the said Writ Petition Nos.
4904 of 1996 and 4905 of 1996 having become final and
binding, it was not open for the Respondents to once again
reverse the decision as contained in the said Circular. In our
view, therefore, the impugned Letters/Orders are unsustainable
on the aforesaid ground also and would therefore have to be
quashed and set aside
. Insofar as Writ Petition No.5463 of 1996 is
concerned, it appears that the said Writ Petition remained to be
disposed of along with Writ Petition Nos.4904 of 1996 and
4905 of 1996, and is therefore pending. For the aforesaid
reasons, the said Writ Petition would also have to be allowed
and is accordingly allowed. Therefore, for all the aforesaid
reasons the impugned Letters/Orders dated 28th October, 2005
(Ex.O), 19th October, 2005 (Ex.Q) and 17th December, 2005
(Ex.P) are unsustainable and are, therefore, quashed and set
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aside as also the letters dtd. 29th November, 2005 and 9th
January, 2006 Exhibit ‘G2’ and ‘G3’ in W. P. No.7490 of 2006.
21. Rule is accordingly made absolute in terms of
prayer clause (b) of all the Petitions except W. P. No.7490 of
2006 wherein it is made absolute in terms of prayer clause (c)
with parties to bear their respective costs.
(R.M.SAVANT, J.) (A.M.KHANWILKAR, J.)
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