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IN THE HIGH COURT OF BOMBAY
Milind N. Jadhav, J.
Reuben Alphonso - Appellant
Versus
State of Maharashtra & Ors. - Respondents
Writ Petition (L) No. 12214 of 2023
Decided On : 22-12-2023
DISQUALIFICATION - Maharashtra Co-operative Societies Act - Sections 83, 88 - The court addressed the disqualification of elected members of a co-operative society under Sections 83 and 88 of the Maharashtra Co-operative Societies Act, 1960. It emphasized the necessity of adhering to principles of natural justice, highlighting that the inquiry process lacked proper hearing and consideration of the petitioners' responses. The court found that the actions taken against the petitioners were unjustified and influenced by complaints from disgruntled members, leading to the quashing of the disqualification order and reinstating the elected committee's authority to manage the society's affairs.
Fact of the Case:
The petitioners, elected members of the Kendwell Co-operative Housing Society, were disqualified for five years by the Deputy Registrar based on an inquiry report without proper reasoning. The petitioners contended that the Administrator had unlawfully continued to manage the society, disregarding their election and the court's previous orders.
Finding of the Court:
The court found that the inquiry conducted under Sections 83 and 88 of the Maharashtra Co-operative Societies Act was flawed, lacking adherence to natural justice principles. The court noted that the petitioners had provided adequate explanations for the expenditures in question, and the Administrator's continued management was unjustified.
Issues: Whether the disqualification of the petitioners was valid given the lack of a fair hearing and consideration of their responses, and whether the Administrator should continue managing the society's affairs.
Ratio Decidendi: The court held that the principles of natural justice must be followed in administrative inquiries, and any action taken without a fair hearing is liable to be quashed. The court emphasized that the elected committee should be allowed to manage the society unless proven otherwise through a fair inquiry.
Final Decision: The court quashed the disqualification order and the appointment of the Administrator, directing the establishment of a new managing committee to oversee the society's affairs for four months while a fresh inquiry is conducted.
JUDGMENT
1. Heard Mr. Quraishy, learned Advocate for Petitioners and Mr. More, learned Addl. G.P. for Respondent Nos. 1 to 3.
2. This Petition is filed under Article 226 of the Constitution of India taking exception to an order dated 06.04.2023 passed by Respondent No. 3 - Deputy Registrar Co-operative Societies disqualifying three freshly elected members of the Managing Committee for a period of five years by accepting the inquiry report under Section 83 and 88 of the Maharashtra Co-operative Societies Act, 1960 (for short 'the said Act') but without giving any reasons.
3. Briefly stated the facts are outlined herein under:-
3.1. Petitioner Nos. 1, 2 and 3 are members of Kendwell Coop. Housing Society Ltd who are duly elected in the election held by the Returning Officer on 18.01.2023 and declared as office bearers on 10.02.2023. Grievance in the Petition is that Respondent No. 4 appointed as Administrator in 2021 has still continued as Administrator of the Society. Serious complaints and averments against the Administrator are made in the Petition which are adverted to later.
3.2. Three Petitioners along with 5 other Managing Committee Members were appointed as the elected Managing Committee after conducting elections in the month of January 2021 but before they could take charge of the society affairs from the existing Administrator, they were disqualified by order dated 06.04.2023 resultantlty leading to the society being managed by the Administrator. The facts of this case are such which call for interference by the Court. After perusing the pleadings and annexures to the Writ Petition, a clear impression is conveyed that on some pretext or the other, the elected Managing Committee will not be allowed to run the affairs of the society and the Administrator should keep on continuing to manage the affairs of the society and play havoc with the funds of the society as complained by the Petitioners.
3.3. It is seen that during the Covid period on 09.11.2020 Respondent No. 3 issued a show cause notice under Section 77 of the said Act to the society. The society represented by the Petitioners, who are its ex-office bearers filed a detailed reply on 01.12.2020 along with all supporting documentary evidence in response to the said show cause notice but without hearing the society or even considering its reply the Respondent No. 3 passed an order on 22.12.2020 under Section 77A of the said Act directing the Administrator to take charge of the Society. In view of this order, on 21.01.2021 when a hearing was scheduled before the Respondent No. 2, Appellate Authority against the order of appointing the Administrator, the Respondent No. 4 Administrator came on to the premises of the society along with police force and took charge of the society. On the same date i.e. 21.01.2021 Appellate Authority granted an order of status quo permitting the Petitioners to file their say. This order of status quo is flouted by the Administrator. However on 02.02.2021 the Respondent No. 2 admitted the appeal against the appointment of Administrator but rejected the interim stay resultantlty compelling the Petitioners to rush to this Court by filing Writ Petition (St) No. 3960 of 2021. In that Writ Petition, this Court restored the status quo order and listed the Petition for hearing on the next date but despite that order the Respondent No.4 Administrator who had taken charges of the society with the help of the police remains in charge of the Society from that date till today by flouting this Court's order.
3.4. Thereafter for a period of two years despite the Petitioners pursuing the office of Respondent Nos. 2 and 3, elections were not held until January 2023. The process for conducting the election of the society commenced in June 2022 and when it was underway a fresh notice was issued to the Petitioners (being ex-office bearers of the Society) under Section 83 of the said Act on 19.09.2022 alleging and imputing upon details of certain expenditure incurr
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