HEMANT VIMALNATH NARICHANIA AND ANOTHER Vs. ANAND DARSHAN C.H.S. LTD. AND OTHERS
LAWS(SC)-2016-2-56
SUPREME COURT OF INDIA (FROM: BOMBAY)
Decided on February 23,2016

Hemant Vimalnath Narichania And Another Appellant
VERSUS
Anand Darshan C.H.S. Ltd. And Others Respondents

JUDGEMENT

- (1.) Leave granted.
(2.) These appeals challenge the common Judgment and Order dated 02.08.2010 passed by the High Court of Judicature at Bombay in Writ Petition Nos.8194 of 2009 and 2980 of 2010.
(3.) The subject of division of an existing Co-operative society in the State of Maharashtra is dealt with by Section 18 of the Maharashtra Co- operative Societies Act, 1960 (hereinafter referred to as "the Act") which Section is to the following effect:- "18. POWER TO DIRECT AMALGAMATION, DIVISION AND REORGANISATION IN PUBLIC INTEREST, ETC: (1) Where the Registrar is satisfied that it is essential in the public interest, or in the interest of the cooperative movement, or for the purpose of securing the proper management of any society, that two or more societies should amalgamate or any society should be divided to form two or more societies or should be reorganised then notwithstanding anything contained in the last proceeding section but public subject to the provisions of this section, the Registrar may, after consulting such federal society as may be notified by the State Government by order notified in the Official Gazette, provide for the amalgamation, division or reorganisation of those societies into a single society, or into societies with such constitution, property, rights, interests and authorities, and such liabilities, duties and obligations, as may be specified in the order. No order shall be made under this section, unless- (a) a copy of the proposed order has been sent in draft to the society or each of the societies concerned; (b) the Registrar has considered and made such modifications in the draft order as may seem to him desirable in the light of any suggestions and objections which may be received by him within such period (not being less than two months from the date on which the copy of the order as aforesaid was received by the society) as the Registrar may fix in that behalf, either from the society or from any member or class of members thereof, or from any creditor or class of creditors. (3) The order referred to in sub-section (1) may contain such incidental, consequential and supplemental provisions as may, in the opinion of the Registrar, be necessary to give effect to the amalgamation, division or reorganisation. (4) Every member or creditor of or other person interested in, each of the societies to be amalgamated, divided or reorganised, who has objected to the scheme of amalgamation, division or reorganisation, within the period specified, shall be entitled to receive, on the issue of the order of amalgamation, division or reorganisation his share or interest, if he be a member, and the amount in satisfaction of his dues if he be a creditor. (5) On the issue of an order under sub-section (1). the provisions in sub- sections (2), (3) and (4) of section 17 shall apply to the societies so amalgamated, divided or reorganised as if they were amalgamated, divided or reorganised under that section, and to the society amalgamated, divided or reorganised. (6) Nothing contained in this section shall apply for the amalgamation of two or more co-operative banks or two or more primary agricultural credit societies." The procedure in that behalf is detailed in Rule 17 of the Maharashtra Cooperative Societies Rules, 1961 (hereinafter referred to as "the Rules) which is as under:- "17. Direction by Registrar for amalgamation, division and reorganisation of societies:- (1) Before issuing any order under sub-section (I) of Section 18 providing for the amalgamation, division or reorganisation of any society or societies, the Registrar shall prepare a draft scheme in respect of such amalgamation, division or reorganisation stating in particular the manner in which the new committee or committees, of the society or societies resulting from such amalgamation, conversion or reorganisation shall be constituted and the by-laws which such society or societies shall follow. The Registrar shall then consult such federal society as may be notified by the State Government in the Official Gazette, and after considering the suggestions, if any, that will be made by such federal society, shall send a copy of the draft of the order proposed to be issued by him under sub- section (1) of Section 18, to the society or each of the societies concerned calling upon it or them to invite objections or suggestions from any member or class of members thereof or from any creditor or class of creditors and to submit such objections and suggestions together with its own or their own suggestions and objections within a period of not less than two months from the date on which the copy of the draft aforesaid was received by it or them. (2) The Registrar shall consider all such suggestions and objections and make such modifications in the draft order as may seem to him desirable in the light of those suggestions or objections and then issue a final order under sub-section (I) of Section 18. (3) Any member or creditor of each of the societies to be amalgamated, divided or reorganised, who has objected to the scheme of amalgamation, division or reorganisation within the period specified in sub-rule (i), may apply to the Registrar for payment of his share or interest, if he be a member, and the amount in satisfaction of his dues, if he be a creditor. Such application shall be separate and distinct from the objection or suggestion which he may have submitted to the society or the Registrar under clause (b) of sub-section (2) of Section 18. It shall be competent for the Registrar to nominate an officer not below the rank of a Deputy Registrar to investigate such applications and to determine the payments required to be made to the members or creditors, as the case may be. (4) Subject to the provisions of the Act, the rules and the by-laws, the Registrar may by order require the society concerned to meet in full or satisfy otherwise all due claims of the members and creditors and thereupon the society shall be bound to meet in full or satisfy otherwise all due claims of the members and creditors within such time as may be specified by the Registrar in the order.";


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