The Registrar has the power under Section 78 of the Maharashtra Co-operative Societies Act 1960 to issue a show cause notice and take action against a committee or its members for any default or negligence in the performance of their duties.

JUDGMENT - Padhye, J.

1. The petitioner is a Co-operative Society registered under the Maharashtra Co-operative Societies Act 1960 having its registered office at Nagpur. It does banking business and is known as a Central Co-operative Bank within the meaning of that expression used in the Reserve Bank of India Act, 1934. The primary object of this Society is to finance the other Co-operative Societies in the district and is now covered by the Banking Regulation Act, 1949 as amended by the. Banking Laws (Application to Co-operative Societies) Act, 1965 and has been granted a licence under the Reserve Bank of India Act, 1934. The sole business of the petitioner-Society is that of banking that is to accept deposits from the public and lend the money to the Co-operative Societies in the district and to invest the deposits in other spheres.

2. The petitioner Society has framed its bye-laws according to which the Board of Directors of the Society consists of not more than 23 members and is entrusted with the management of the business and affairs of the bank. The Board is elected by the share-holders of the bank and holds office for a period of 3 years. The present Board of Directors of the petitioner was elected in September 1968 and in ordinary course will hold office till July 1971 or till the new Board of Directors assumes office. The original petitioner was Ramkrishna Paikaji Samarth who was the elected Honorary Secretary of the Board of Directors. The original petitioner Ramkrishna died during the pendency of this petition and application was made by the Society through its chairman and the Chairman for being substituted as petitioners and to continue the petition. The questions raised to the petition were of such importance and the State did not object to the substitution being made and accordingly though the matter did not fall strictly under Order 22 of the Code of Civil Procedure, the substitution was ordered as the State wanted the main contention involved in the case decided once and for all.

3. The Divisional Joint Registrar of the Co-operative Societies who is the respondent No. 1 to this petition issued a notice to the petitioner-Society through its Chairman on 7-7-1970 detailing the several acts of omission and commission by the Society and showing the several defects and irregularities on the part of the management and required the Board of Directors of the petitioner-Society as to why the Chairman and the Directors of the Board of Directors of the said bank should not be removed and one or more administrators be appointed in its place. This notice is purported to be issued under his powers under Section 78 (i) of the Maharashtra Co-operative Societies Act, 1960. Subsequently on the 9th of July 1970 a corrigendum was issued to the earlier notice dated the 7th of July 1970 suggesting some minor corrections in the earlier notices. This notice dated 7-7-1970 with the corrigendum dated 9-7-1970 is challenged by the petitioners as being without jurisdiction and the petitioners pray that Section 78 of the Maharashtra Co-operative Societies Act, 1960 be declared as not applicable to the Central Cooperative Banks and that the Divisional Joint Registrar, Co-operative Societies, has no jurisdiction to initiate any action under Section 78 against the petitioners and other members of the Board of Directors of the petitioners-Bank. The petitioners also pray for a writ of mandamus or any other appropriate writ, direction or order to quash the notice dated 7-7-1970 with its corrigendum which was issued by the Divisional Joint Registrar, Nagpur, under Section 78 of the Maharashtra Co-operative Societies Act.

4. The challenge which was originally made was three-fold. First it was urged that it was not within the power of the Registrar to interfere under Section 78 of the Societies Act with a banking institution which is governed by the Banking Regulation Act, 1949 and not by the Maharashtra Co-operative Societies Act. 1960. It is urg

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