LITTLE GIBBS CO OP HOUSING SOCIETY LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE two petitioners in this Special Civil Application challenge the legality and validity of order passed by the Government of Maharashtra on 8th November 1970 in exercise of their revisional jurisdiction under Section 154 of the Maharashtra Co-operative Societies Act, 1960, hereinafter referred to as "the Act". Petitioner No. 1 is a Co-operative housing Society registered under the Act in or about the year 1960. Petitioner No. 2 is one of the 13 shareholders of the said society and also Honorary Secretary appointed as such at the General Body meeting held on 27-10-1968. The facts, which gave rise to this special Civil Application, briefly are that on 3rd September 1964 the Assistant Registrar, Co-operative Societies, passed an order directing an inquiry in the affairs of this society under Section 83 of the Act. On 28-5-1968 the Inquiry Officer submitted his report and referred therein to several irregularities and malpractices. The Deputy Registrar then sent extracts of the said report to the society presumably in terms of subsection (4) of S. 83 on 28-6-1968. On 11-9-1968 the then Managing Committee of the Society resigned en bloc. The District Deputy Registrar thereupon convened a General Body meeting of the Society on 27-10-1968. Normally the balance-sheet and statements of accounts of this society for the year ending on 30th June 1968 should have been placed before the expiry of the month of September 1968. It, however, appears that for some reasons or the other the accounts of this society remained unaudited and such statements were not ready for placing before any such Annual General Meeting. At the said meeting on 27-10-1968 referred to as "eighth Annual General Body meeting" an Adhoc Managing Committee was elected, and petitioner No. 2 to this petition was elected as Honorary Secretary of the same. Some differences of opinion seem to have arisen between the Adhoc Managing Committee on the one hand and the District Deputy Registrar on the other hand in regard to the precise follow up actions to be taken to comply with the findings of the Inquiry Officer. It is unnecessary to make a detailed reference to all these differences. On 1-2-1969, the Honorary Secretary of the Society seems to have complained against the District Deputy Registrar to the Divisional Joint Registrar, Bombay, but he seems to have virtually refused to take any notice of the same and, on the contrary, by his letter dated 11-4-1969 asked the Secretary vaguely to proceed with the follow up action in compliance with the report of the Inquiry Officer.

(2.) ON 26-4-1968 the District Deputy Registrar served a notice under Section 78 (I) of the Act on the Chairman and Secretary and all the Members of the Adhoc Committee of the Society calling upon them to show cause as to why the said Adhoc Committee should not be superseded "in the interest of smooth and proper functioning of the Society" as in his opinion "the Adhoc Managing Committee. . . . . . . . . . . . . . has not been functioning properly. " By explanation dated 8th May 1969 cause was shown against the said proposed action, by the Honorary Secretary. At the end of the said letter the Secretary had requested the District Deputy Registrar to give him and the members of the said Adhoc Committee a personal hearing. On 18-10-1969, however, the District Deputy Registrar without any further enquiry or hearing passed an order superseding the said Adhoc Managing Committee under sub-section (1) of S. 78 of the Act and appointed one B. S. Gokral as the Administrator to manage the affairs of the said Society. The Society thereupon preferred an appeal to the Divisional Joint Registrar and on 17-1-1970 the said appeal was allowed and the supersession order of the District Deputy Registrar dated 18-10-1969 was set aside. It appears that seven other members of this Society out of the total strength of 13 had also appeared before the Divisional Joint Registrar seeking his permission to intervene and support the supersession order and their request seems to have been granted and the appeal of the society seems to have been allowed only after hearing them. These seven members then preferred a revision application to the State under Section 154 of the Act. This is how the impugned order dated 8th September 1970 came to be passed by the Government.

(3.) THE principal contention of Mr. H. G. Advani, the learned advocate appearing for the petitioners, is two-fold. The findings recorded by the Government in their order dated 8th September 1970, according to Mr. Advani, are at variance with and on matters other than the charges levelled against the petitioners in the notice dated 26th April 1969. He, therefore, contends that the petitioners have been deprived of the management of the Society and their office of the Managing Committee on the basis of charges and/or causes on which they have not been afforded any opportunity to show cause. This action is, therefore, in contravention of the Scheme and provisions in Section 78 and accordingly entirely illegal. He further contends that even if the findings recorded by the State Government are accepted as correct and binding, the same still do not make out any case for action under Section 78 of the Co-operative Societies Act.