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2019 Supreme(Bom) 2533

IN THE HIGH COURT OF BOMBAY
A.A. SAYED, M.S. KARNIK, JJ.
Chandrashekhar M. Ghule Patil - Appellant
Versus
State of Maharashtra and Ors. - Respondents
W.P. Nos. 4887 of 2018, 9550 of 2017 and Civil Appln. No. 2670 of 2017
Decided On : 02-05-2019

Advocates Appeared:
For the Appellant :Aspi Chinoy, Senior Advocate, G.S. Kamble instructed by Bhushan V. Mahadik, A.Y. Sakhare, Senior Advocate, Joel J. Carlos and S.B. Talekar instructed by Talekar and Associates.
For the Respondents: S.U. Kamdar, Senior Counsel, Jyoti P. Jadhav, AGP, Bhushan Walimbe, Tejas Pawar and R.V. Govilkar.

Headnote:

Societies (Amendment) Act, 2013 - section 88(1) - Cooperative Societies Act 1960 - Granting extension of time - Granted ad-interim relief - Issue of order - Writ Petitions are filed under Article 226 of Constitution seeking a declaration that amendment to section 88 of Cooperative Societies Act 1960 (MCS Act for short) vide Maharashtra Cooperative Societies (Amendment) Act 2017 (Act XXXIII of 2017) [For Amendment Act refer (Journal Section)] (hereinafter referred to as Amendment Act) is ultra and unconstitutional- By Amendment Act two provisos court-e- 3rd and 4th provisos are inserted to section 88(1) of MCS Act providing for extension of time by Government on a report of Registrar or suo moto for completion of inquiry proceedings by Authorised Officer under said section 88(1)- time period for completing inquiry proceedings under section 88(1) respondent No- 4 (Authorized Officer) communicated to petitioners that inquiry is fixed on when further cross-examination of witness of respondent Bank would commence- Aggrieved thereby petitioners have filed present Writ Petitions – Held, Court have already held that 4th proviso to section 88 has been expressly made retrospective in operation- In paragraphs 12 to 14 above we have discussed relevant provisions as regards nature of inquiry contemplated under MCS Act and MCS Rules- It is prerogative of Legislature to provide time-frame for completion of inquiry contemplated in section 88 of MCS Act- Right from year 1960 when MCS Act was enacted re was no outer limit prescribed for completion of inquiry under section 88- It is only between that inquiry under section 88 was made time bound- It appears that prior to 2013 since re was no timeframe provided inquiry proceedings which is in essence proceedings for recovery dragged on for years together and Legislature therefore in its wisdom thought it fit to add 1st and 2nd provisos to section 88 by Amendment Act of 2013 by which an outer limit of two years was provided which could be extended by maximum period of 6 months Order accordingly

JUDGMENT :

A.A. Sayed, J.

1. Civil Application No. 2670 of 2017 is taken out by the Applicant in Writ Petition No. 9550 of 2017 for impleadment and in the alternative for intervention. We allow the Civil Application to the extent of intervention by permitting the learned Counsel for the Applicant to canvass submissions.

2. The Writ Petitions are filed under Article 226 of the Constitution seeking a declaration that the amendment to section 88 of the Maharashtra Cooperative Societies Act, 1960 ("MCS Act" for short) vide the Maharashtra Cooperative Societies (Amendment) Act, 2017 (Maharashtra Act XXXIII of 2017), [For Amendment Act, refer 2017 (4) Mh.LJ. 32 (Journal Section)] (hereinafter referred to as 'the Amendment Act') is ultra vires and unconstitutional. By the Amendment Act, two provisos i.e. 3rd and 4th provisos are inserted to section 88(1) of the MCS Act providing for extension of the time by the Government on a report of the Registrar or suo moto, for completion of the inquiry proceedings by the Authorised Officer under the said section 88(1). The Writ Petitions also challenge the Government order dated 13-6-2017 granting extension of time to complete the inquiry which was being conducted by the respondent No. 4 (Authorized Officer) under section 88(1) of the MCS Act and the communication dated 15-6-2017 of respondent No. 4 fixing the date of hearing for further inquiry. According to the petitioners, the inquiry proceedings under section 88(1) had lapsed on 21-11-2016 and cannot be revived by the Amendment Act which came into force on 26-4-2017.

3. The petitioners in both the Petitions were former Directors of the Maharashtra State Co-operative Bank (hereinafter referred to as 'the respondent Bank'). The respondent Bank is the Apex Co-operative Bank in the State of Maharashtra and it caters mainly to the need of agricultural sector. It is an Apex body for about 31 District Central Co-operative Banks in the State and also provides financial assistance to the said Banks. On 7-1-2013 an order was passed by the Commissioner for Co-operation and Registrar of Co-operative Societies (hereinafter referred to as "the Registrar") under section 83 of the MCS Act appointing Additional Registrar Co-operative Societies, for conducting an inquiry with regard to the working and financial condition of the respondent Bank for the period 2007-08 to 2010-11 and submit a Report. Upon the Report being submitted by the Additional Registrar, the Registrar passed an order on 22-5-2014 appointing the respondent No. 4 as Authorized Officer to conduct an inquiry under section 88(1). of the MCS Act for the purposes of fixing responsibility for the monetary loss caused to the respondent Bank by the delinquent office bearers (including the petitioners herein). Pursuant to the show cause notices and replies, the respondent No. 4 framed charges and issued charge-sheet on 10-9-2015. Pleadings came to be filed and the witness of the respondent Bank was being cross-examined, when on 29-11-2016 an Application came to be filed by the petitioner in Writ Petition No. 9550 of 2017 pointing out that the term of inquiry has expired as contemplated under the 1st and 2nd provisos of section 88(1) of the MCS Act, and therefore, the inquiry proceedings stood abated as on 21-11-2016 (i.e. 2 1/2 years from the order dated 22-5-2014 of the Registrar appointing an Authorized Officer to conduct the inquiry). The Amendment Act, came into force w.e.f. 26-4-2017 and the MCS Act stood amended by insertion of the 3rd and 4th provisos to section 88(1) of the MCS Act. On 13-6-2017, upon the recommendation of the Registrar, the State Government exercising powers under the 4th proviso to section 88(1) of the MCS Act (as amended) extended the time period for completing the inquiry proceedings under section 88(1) upto 30-6-2018. On 15-6-2017, respondent No. 4 (Authorized Officer) communicated to the petitioners that the inquiry is fixed on 30-6-2017 when further cross-examination of

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