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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
WRIT PETITION No. 3154 OF 2010.
Sau. Aruna Bhagwant Tiple,
Aged 52 years, Occupation - Housewife,
resident of 34-C, Bhosle Nagar, Nagpur
Tq. and District Nagpur.
ig ....PETITIONER.
VERSUS
1. The Divisional Joint Registrar,
Cooperative Societies, Nagpur.
2. The District Deputy Registrar,
Cooperative Societies, Nagpur
Sahakar sadan, Hindustan Colony,
Amravati Road, Nagpur.
3. Chakradhar Swami Nagri Sahakri
Pata Sanstha Limited, Nagpur,
218, Omnagar, Sakkardara,
Nagpur.
4. Shri Prabhakar Harishchandraji Bagawe,
Resident of Old Nandanwan, Near
Hanuman Mandir, Nagpur.
5. Shri Narendrakumar Krushnaji Diwate,
resident of 63, Gurudeonagar,
Nagpur. ....RESPONDENTS
.
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Mr. A.H. Patil, Advocate for Petitioner.
Mr. Kankale, Learned A.G.P. for respondent nos. 1 and 2.
Mr. S.G. Shukla, Advocate for Respondent No.3.
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CORAM : B.P. DHARMADHIKARI, J.
Date of reserving the Judgment. - 15.10.2010.
Date of Pronouncement. - 25.10.2010.
JUDGEMENT.
By this petition filed under Articles 226 and 227 of the
Constitution of India, the petitioner – an Ex-Director of respondent
no.3- Cooperative Credit Society has questioned her removal dated
11.03.2010 under Section 78[1] of the Maharashtra Cooperative
Societies Act, 1960 (hereinafter referred to as “MCS Act” for short) on
account of disqualification and dismissal of her appeal under Section
152 of the MCS Act on 24.05.2010. Respondent no.2 has declared her
disqualified under the provisions of Section 73-FF [1][vi] of the MCS
Act after noticing that she is working as Pigmy Agent for respondent
no.3 Society, and hence there was conflict of interest.
2. I have heard Shri A.H. Patil, learned Counsel for petitioner,
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Shri Joshi, learned A.G.P. for respondent nos. 1 and 2 and Shri S.G.
Shukla, learned Counsel for respondent no.3. By consent of parties
Rule is made returnable forthwith and matter is heard finally.
3. Shri Patil, learned Counsel appearing on behalf of petitioner
has contended that the petitioner is Director and not salaried employee.
For salaried employee, concept of office of profit as specified under
Section 73FF [1] is relevant, but then as petitioner is Director of a
Credit Cooperative Society and such Society is neither instrumentality
of a State or Local Body, the disqualification is not attracted.
4. According to him, the concept of office of profit in so far as
disqualification is concerned, can be pressed into service only if such
office is held under Government, Municipality or Local Authority to
which any pay, salary etc., are attached. The learned Counsel has
stated that as the Pigmy agent only earns commission which is neither
salary nor remuneration, she is not earning over and above such
commission, hence her disqualification is totally unwarranted. To
explain scope of office of profit, he has placed reliance upon the
judgment of Hon’ble Apex Court reported at AIR 2001 SC 2583 (Shibu
Soren .vrs. Dayanand Sahay), AIR 2006 SC 2119 (Jaya Bacchan .vrs.
Union of India ). Infact learned Counsel for petitioner has placed a
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brief note in writing on this subject. To show to this Court the extent of
field occupied by Section 73 FF, he has relied upon the Division Bench
judgment of this Court reported at 1987 Mh.L.J. 944 = 1988 All India
Coop.Tribunal Journal 1 (Murlidhar Bhaulal Malu .vrs. Sudhakar
Honaji Patil and another). He has also urged that the provisions of
Section 78[1] and 73 FF of MCS Act, occupy different fields and for said
purpose, he has relied upon the judgment of Full Bench of this Court
reported at 2009 (6) Mh.L.J. 500 (Narayan Gujabrao Bhoyar .vrs.
Yeotmal Zilla Parishad Karmachari Sahakari Pat Sanstha and others)
and Division Bench judgment of this Court reported at 2003 [3] All MR
554 (Narayan Kisanrao Samundre and others .vrs. State of Maharashtra
and others).
5. He has urged that in show cause notice, as served upon the
petitioner, there was no reference to any failure to comply with the
legal requirement or any disobedience and hence, the inquiry as
conducted on its strength is bad. Moreover, reply to show cause notice
submitted by the petitioner has not been looked into at all and thus
there is failure to exercise jurisdiction.
6. Shri S.G. Shukla, learned Counsel for respondent no.3 has
relied upon the very same judgment reported in case of Murlidhar
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Bhaulal Malu .vrs. Sudhakar Honaji Patil and another (supra), to show
that importance is given to duty of a person as a Director and his
interest which may be against the society. He has further urged that in
1991 LIC 557 (The Management of Indian Bank, Madras .vrs. The
Presiding Officer, Industrial Tribunal (Central) Madras and another) as
also in 2001 (1) CLR 986 (SC) (Indian Banks Association .vrs.
Workmen of Syndicate Bank and others) Pigmy Agents are held to be
employees. The learned Counsel has urged that both the lower
Authorities have considered the entire relevant material and as there is
no jurisdictional error, the petition deserves to be dismissed.
7. Learned A.G.P. appearing for respondent no.2 has supported
the impugned orders. He states that the petitioner is holding the office
of profit and show cause notice gave her adequate notice thereof.
Earning of commission as Pigmy Agent by such Director may militate
with his/her duties and therefore, action as taken is in accordance with
law.
8. Perusal of show cause notice dated 14.01.2010 reveals that
it expressly mentions Section 78[1] as also Section 73FF [1][vi] of the
MCS Act. It is also mentioned that petitioner is collecting amount
towards daily deposits, fixed term deposits and taking commission
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from respondent no.3 Society. She was therefore called upon to
furnish her explanation. The explanation was accordingly furnished by
her on 23.02.2010. That explanation as also reply of society is looked
into and then impugned order has been passed on 11.03.2010. The
order expressly refers to provisions of Section 73FF [1][vi] of the MCS
Act, and hence, I, do not find any substance in the grievance of
violation of principles of natural justice or failure to exercise
jurisdiction.
9. Reliance upon the judgment in case of Shibu Soren .vrs.
Dayanand Sahay (supra) or in Jaya Bacchan .vrs. Union of India (supra)
show consideration of concept of office of profit, in the light of the
constitutional provision. The word “office” carries with it certain
emoluments. It is held to be office, even if the holder thereof chooses
not to receive/draw such emoluments. The further reference to these
judgments in present circumstances is not necessary. Provisions of
Section 73FF [1][vi] of the MCS Act envisage holding of office of profit
in society i.e. not in Cooperative Society registered under the MCS Act.
The same therefore, cannot be co-related with any Government or any
Local Authority. The petitioner holds office of profit under the
respondent no.3 Society, in as much as by working as Pigmy Agent, she
is earning commission regularly. Her appointment as Pigmy Agent is in
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terms of resolution of the Executive Committee of respondent no.3
dated 16.04.2005. Resolution no.6[3], shows that there were
applications made by petitioners and other ladies, and thereafter, her
appointment as R.D. Agent of Pigmy Agent is accepted. The resolution
stipulates that they have to place a security deposit with the society and
enter into an agreement and the Executive Committee has recorded
that it is agency of society given to petitioner. Agreement executed on
stamp paper of Rs.50/- between the Society and petitioner does not
mention any date any where, but then it casts some obligation upon the
petitioner. Column made for specifying amount of indemnity bond is
left blank therein. Column showing amount of security deposit is also
blank. Column for date is also blank.
10. Provisions of MSC Act no where define the term ’employee’
or ‘workman’ or ‘servant’. In this situation it is apparent that in order to
find out that whether there is any master-servant relationship or not,
recourse may be required to be taken to provision of labour law or civil
law. Control of master and payment of remuneration for work done are
the basic ingredients. In judgment in case of Indian Banks
Association .vrs. Workmen of Syndicate Bank and others (supra)
dispute was between Indian Banks Association and Syndicate Bank.
The Hon’ble Apex Court has considered the status of Pigmy Agents and
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held that they are workmen under Section 2[s] of the Industrial
Disputes Act and commission received by them is wages. This
judgment, therefore, is applicable even in present facts. Petitioner by
becoming Pigmy Agent of respondent no.3 occupies a position which
enables her to receive commission for amounts collected by her for
depositing it with respondent no.3 society. Thus she earns profit for
herself because of that position. In any case she is covered by first part
of Section 73FF [1][vi] of the MCS Act, which disqualifies a salaried
employee. These disqualifications are prescribed to maintain purity of
cooperative movement. A person occupying any position which may
place him in conflict with interest of Society, cannot be permitted to
administer the society. The Division Bench of this Court in Murlidhar
Bhaulal Malu .vrs. Sudhakar Honaji Patil and another (supra) has
emphasized this aspect only. Actual accrual of conflict is not relevant.
The emphasis placed by the Division Bench is on neutrality and
impartiality to avoid even likelihood of conflict between interest and
duty. The object is held to be secure independence for members of
committee and to ensure that such committee does not include persons
who are salaried employees of the Society concerned or are in position
to influence. In present matter, the other issues resolved by the
Division Bench in said judgment are not very relevant. It can be seen
that no lacunae can be found in otherwise complete scheme of Section
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73 FF [1][vi] of the MCS Act. Interpretation to advance the object of
provision needs to be accepted. If such assignment or agreement is held
out of clutches of Section 73 FF [1][vi], it will create loophole not
envisaged in the scheme.
11. The contention that, provisions of Section 78[1] of the MCS
Act and Section 73FF [1] of the Act operate in independent spheres, is
also not relevant. It is not the argument of petitioner that she cannot
be disqualified under Section 78[1] of the MCS Act.
12. In view of this discussion, I find nothing wrong with the
concurrent findings reached by respondent no.1 Divisional Joint
Registrar and respondent no.2 District Deputy Registrar. Petition is
therefore, dismissed with no order as to costs. Rule discharged.
JUDGE
Rgd.
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