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IN THE HIGH COURT OF BOMBAY
F.I. Rebello, J.
Shalikram Shivram Khobragade others .... Petitioners.
Versus
Divisional Joint Registrar, Co-operative Societies,
Nagpur others ...... Respondents.
W.P. No. 2350 of 1997, decided on 7-10-1997.
Advocates appeared :
Mrs. K.V. Sirpurkar, for petitioners.
A.G. Mujumdar, A.G.P., for respondents Nos. 1 and 2.
Section 2(13)-Deputy Manager of District Central Co-operative Bank-Grant of certificate by him showing Federal Society -Co-society as its member and numerous societies as member have right to vote-District Central Co-operative Bank Covers Federal Society,-No other provision of the Act has been pointed out insofar as the Federal Society is concerned. From the definition clause, all that can be seen is that Federal Societies are the societies where not less than five members are themselves societies and insofar as voting rights are concerned, they are so regulated that the members which are societies have not less than four fifths of the total number of votes in the general meeting of such societies. In the instant case, on behalf of the respondents is annexed a certificate issued by the Deputy Manager of the Chandrapur District Central Co-operative Bank Limited showing that the respondent is their member holding shares of Rs. 15,80,030/- upto the end of March 1997 and that the Chandrapur District Central Co-operative Bank Ltd. is a Federal Society. It is also shown that there are over 1000 societies which are its members. It is further pointed out that all the Federal Societies have right to vote. These facts have not been controverted by the respondents Nos. 1 to 3. In the face of that, it would be clear that the Chandrapur District Central Co-operative Bank Limited is a Federal Society. In fact, copy of the show cause notice was served on petitioners Nos. 1 to 6, so also a copy forwarded to the Chandrapur District Central Co-operative Bank Limited. There is however, no record to show whether, in fact, the said copy has been received by the Chandrapur District Central Co-operative Bank Limited. Thus, the first contention on behalf of the respondents Nos. 1 to 3 that the Chandrapur District Central Co-operative Bank Limited is not a Federal Society, has to be rejected. It is clear that it is a Federal Society within the meaning of Section 2(13) of the Act.
Section 2(13)-Federal Society -Respondent annexed certificate showing Central Co-operative Bank is federal society-Fact not controverted -It is clear that it is federal society.
Section 78-Constitution under mandatory provision-Order of Assistant Registrar appointing Administrator-Validity-Held, not valid as there was no meaningful and effective consultation with Federal Society as required under Section 78 of Act-Consultation is not an empty formality and a ritual. It has to be real and meaningful. It has to be real, full and effective and not an empty formality or a ritual. Consultation would mean that the person who is sought to be consulted is provided the material based on which order is to be passed in order to enable the authority responsible to pass the order after considering the advice as given and sufficient opportunity must be given to such person to tender the advice. In the instant case, admittedly, the show cause notice was issued on 13.2.1997. Copy of the show cause notice has been purportedly sent to the Federal Society. There is nothing on record to show that the Federal Society, in fact, has received the said notice. Even assuming that the said notice was received, what is apparent is that the petitioners had filed their reply on 28.2.1997. There is nothing on record to show that copy of the reply filed by the petitioners to the show cause notice was made available to the Federal Society. The order was passed on 10.3.1997. Therefore, even if it is held that copy of the said show cause notice was sent to the Federal Society, it cannot be said that there was real meaningful and effective consultation inasmuch as the reply given by the petitioners was not made available to the Federal Society. In the light of the aforesaid discussion, the order dated 10.3.1997 has necessarily to be quashed and set aside.
Section 78-Issue of show cause notice under Section 78(1)Reply filed for withdrawal of notice by Director of Society-Respondent appointed arbitrator-Federal Society not concerned before appointment of arbitrator-Federal Society not received notice-Held-There was not a meaningful effective consultation in as much as reply not made available to Federal Society-Order liable to be quashed.-Constitution would mean that the person who is sought to be consulted is provided the material based on which order is to be passed in order to enable the authority responsible to pass the order after considering the advice as given and sufficient opportunity must be given to such person to tender the advice.
Therefore, even if, it is held that copy of the said show cause notice was sent to the Federal Society, it cannot be said that there was real meaningful and effective consultation inasmuch as the reply given by the petitioners was not made available to the Federal Society.
Section 78-Show cause notice issued to Federal Society-Nothing on record to show notice was received-Directors filed their reply no effective consultation-Reply not made available-Order, dt. 10.3.1987 appointing Administrator quashed and order dt. 17.7.1997 quashed and set aside.
2. The petitioners were Directors of respondent No. 4 Society which is a Co-operative Society registered under the Maharashtra Co-operative Societies Act, 1960 (for short, the 'Act'). The elections to the Society were held on 3-12-1995 and thirteen members were elected out of which petitioners Nos. 1 to 6 are some of the elected members and petitioners Nos. 7 to 9 are the co-opted members. It seems that the action of the Board of Directors in co-opting two members in place of two other members who had been disqualified, was enquired into the respondent No. 2. By order dated 19-9-1996, respondent No. 2 directed the members of the Managing Committee that they were to invite the disqualified members to attend the meetings of the Managing Committee as according to respondent No. 2, they were not disqualified in law, failing which action under section 78 of the Act would be taken against the office bearers of the Society. A show cause notice thereafter came to be issued to six Directors under section 78(1) on 13-2-1997. The petitioners Nos. 1 to 6 submitted their reply on 28-2-1997 and pointed out therein that the notice should be withdrawn. No show cause notice was issued to petitioners Nos. 7 to 9. Thereafter, by an order dated 10-3-1997, respondent No. 2 appointed one Shri Bhandari as an Administrator. The petitioners herein preferred an appeal against the order dated 10-3-1997. Application for stay was also moved and prayed for. No order was passed thereon. However, the matter was finally heard on 2-4-1997 and by order dated 17-7-1997, the appeal preferred by the petitioners was rejected. It is the order appointing the Administrator as also the order rejecting the appeal which are impugned by this writ petition.
3. The principal contention raised on behalf of the petitioners is that before appointing the Administrator, the respondent No. 2 did not consult the Federal Society of which the respondent No. 4 was the member and as such, the order dated 10-3-1997 is liable to be set aside and consequently also the order dated 17-7-1997 is liable to be set aside.
Against this, on behalf of the respondents Nos. 1 to 3, it is contended that the respondent No. 4 is not a Federal Society; that assuming but not admitting that the respondent No. 4 is a Federal Society, copy of the show cause notice was issued to the respondent No. 4 and the respondent No. 4 has chosen not to offer its comments and as such, there has been consultation with the respondent No. 4. At any rate, it is pointed out that consultation is not mandatory but directory, as held by this Court in the case of (Karbhari Govindrao Patil v. B.D. Pawar)1, 1976 Mh.L.J. 841. It is further pointed out that there are subsequent Division Bench judgments taking a contrary view, a learned Single Judge of this Court in Writ Petition No. 322 of 1996 has come to the conclusion that the views taken by the Division Bench in Karbhari's case (supra) is diametrically opposite to the view taken by another Division Bench of this Court in (Suresh Dyandeo Khumkar v. State of Mah.)2, 1987(3) Bom.C.R. 211 and the same has been referred for consideration by a larger Bench. It is contended that this is a judgment by itself and as such, this Court should not, in the view of the reference, take any other view of the matter.
4. Several judgments in the matter of precedents have been cited, but no judgment has been cited at the bar or brought to my notice to point out that in a case where one learned Single Judge of this Court, on coming to a view that there is conflict between two Division Bench judgment, has referred the matter for consideration to a larger Bench, another Single Judge is precluded from considering the matter based on the Division Bench judgment of this Court.
5. In the first instance, affidavits and counter-affidavits have been filed to point out that the District Central Co-operative Bank Limited, Chandrapur which t
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