2000 Supreme(Bom) 645

IN THE HIGH COURT OF BOMBAY
Dr. D.Y. Chandrachud, J.
St. Anthony’s Co-operative Society Limited.... Petitioner.
Versus
Secretary (Co-operation Textile Department) others.... Respondents.
Writ Petition No. 1357 of 2000, decided on 18-8-2000.
Advocates appeared :
J. Reis with Y.A. Choudhari and J. Rege i/b S.J. Chaurasia, for the petitioner.
R.M. Sawant, for respondent No. 1.
S.C. Dharmadhikari with M.K. Nesari and A.A. Joshi, for respondent Nos. 3 to 6.
Ms. C.K. Brahmi i/b Mahesh Menon, for respondent No. 7.

Headnote:Sections 22 and 23-Open membership-Principles of-Member of Roman Catholics by faith Restriction of membership-Applicability of bye-Law-Question of-Byelaws not applicable in open membership recognised by Section 23 of Societies Act. Section 23 of the Act embodies one of the basic principles underlying the co-operative moment which is the principle of open membership. The marginal note to Section 23 is entitled "open membership". The Section itself stipulates that the society shall not without sufficient cause refuse admission to membership to any person duly qualified under the provisions of the Act and its bye-laws. Section 22 enunciates as to who will become a member of the Society and insofar as it is material to the present case, it provides that an individual who is competent to contract under the Indian Contract Act, 1872 shall be qualified to seek membership of a cooperative society.

       The principle of open membership lies at the very foundation and the root of the co-operative movement. The judgment of a Division Bench of this Court in Karvenagar S.G.R. Sanstha v. State of Maharashtra, 1989 Mh LJ 320: AIR 1989 Born 392, traces the history of the co-operative movement and the legislative history of the provisions of the Act. In para 6 of its judgment the Division Bench enunciated the essence of the co-operative movement and the role and position of legislation in providing an appropriate fran1ework for the recognition, implementation and growth of co-operation. Statutory regulation of Co-operative societies is the means by which law has recognised the constitution oand functioning of co-operative societies. The manner in which co-operative societies will be formed and registered is laid down by statute. This rights and obligation of membership are provided by the statute. The manner in which co-operative societies will function is prescribed by law. A framework for the resolution of dispute by a hierarchy of tribunals is provided for co-operative institutions and those who participate in them as members are bound to observe the name of the statute which recognizes and regulates their activities. The benefits of the statute must equally be accompanied by a duty to observe the condition prescribed by law in the interests of the healthy growth of the cooperative movement.

       There can be no gain-saying the fact that the availability of membership without social, political or religious discrimination is the essence of tile formation of a co-operative institution. The genesis of co-operative institution lies in an association of persons who come together for mutual self help. Yet, the law provides the legal framework for the recognition, formation and implementation of co-operation. The legal incidents of co-operation are thus a matter of statute and exist insofar as the legislature has codified the rights and obligations of members and of the societies which they form.

       Section 4 of the Act provides for the registration of a co-operative society were a society has it object, the promotion of the economic interest or general welfare of its members or of the public, in accordance with the co-operative principles. The proviso to Section 4 mandates that no society shall be registered inter alia if its registration may have an adverse effect on the development of the co-operative movement or where the legislation may be contrary to the policy directives of the State Government. The formation of Cooperative Societies and conduct of business by such societies must take place within the legal framework provided by the Maharashtra Co-operative Societies Act, 1960. The statutory enactment provides an enabling framework under which co-operative societies can be registered and recognised for the purpose of the Act, and the conditions subject to which they can carry on their business. An entity which seeks registration as a co-operative institution must accept the statutory conditions or regulations subject to which co-operative societies are required to function under the provisions of the Act. The formation and functioning of co-operative societies are matters which are the subject of statutory regulation and de hors the statute, a right which would be at variance with the provisions of the Act cannot be asserted.

       Sections 22 and 23-Principle open membership-Bye-law of petitioner Co-operative Society restricting its membership to persons belonging to Reman Catholics by faith-Said bye-law violative of principle of open membership recognised by Section 23.- The principle of open membership is recognised by Section 23 of the Maharashtra Co-operative Societies Act, 1960. Therefore, a restriction in the Bye-laws of a co-operative society imposing a condition or qualification restricting membership to a particular religious group would violate the principle of open membership. Bye-law 7 (a) of the society which provided that all members shall be Roman Catholics was not consistent with the provisions of Sections 22 and 23 of the Maharashtra Co-operative Societies Act. Challenge to the order allowing memberships of the society to non catholic rejected. 1999 (1) Mh LJ 406 : 1989 Mh LJ 320 : AIR 1989 Bom 392 : AIR 1980 MP 84 : AIR 1997 Guj 136, Referred.