The court reaffirmed the principle of open membership under the Maharashtra Co-operative Societies Act, ruling that unjustified denial of membership violates legal provisions and principles of natural justice.

JUDGMENT :

S.G. Chapalgaonkar, J.

1. Rule. Rule made returnable forthwith. By the consent of the parties, matters are taken up for final hearing at the stage of admission.

2. The petitioners in respective Writ Petitions approaches this Court under Article 227 of the Constitution of India impugning order dated 29.07.2015 passed by the Hon’ble Cabinet Minister for Co-operation, in Revision Applications filed by the Ahmednagar Merchant’s Co-operative Bank Ltd. Ahmednagar i.e. respondent no.4.

3. Petitioners contend that they are investors or account holders of respondent no.4-Bank and having regular transactions with bank. Respondent no.4 operates in entire Ahmednagar District, admits individual members, who are found compliant of conditions stipulated under Section 22 of the Maharashtra Co-operative Societies Act, 1960 (for short ‘M.C.S. Act, 1960’) and bye-laws. The petitioners claims eligible to be admitted as members.

4. The petitioners preferred applications seeking membership alongwith requisite documents and Demand Drafts towards membership fees. The respondent no.4-Bank never communicated any deficiency in their applications. However, Director board of respondent no.4-Bank passed a Resolution, refusing membership to the petitioners on erroneous grounds. The decision of bank is contrary to concept of open membership, recognized under Section 23 of the M.C.S. Act, 1960.

5. The petitioners, aggrieved by the decision of respondent no.4- Bank preferred Appeal before Commissioner of Co-operation and Registrar Co-operative Societies-respondent no.2, who allowed the Appeal directing respondent no.4-Bank to admit the petitioners as members from the date of decision in Appeal. However, respondent no.4-Bank assailed decision of Appellate Authority by filing Revision Application under Section 154 of the M.C.S. Act, 1960 before the Hon’ble Minister-respondent no.1. The said Revision came to be allowed upsetting order passed in Appeal. According to the petitioners Hon’ble Ministers order is contrary to the concept of open membership. The well reasoned order passed by the Appellate Authority is reversed in casual manner and without following principles of natural justice without adding petitioners as party in Revision filed by Bank.

6. Per contra, respondent no.4-Bank justifies rejection of the membership since en-block applications were moved for membership by persons, unconcerned with the business of respondent no.4-Bank. Further applicants were not holding eligibility in conformity with bye-laws. According to respondent no.4, right of membership is qualified and not absolute. The Managing Committee of the Bank took conscious decision in the interest of administration of the Bank and refused bulk applications submitted with the obvious reasons.

7. Mr. Gaware, learned Advocate appearing for the petitioners submits that Section 22 of the M.C.S. Act, 1977 prescribes qualification for admitting member of Society. Section 27 prescribes that no Society would refuse admission to membership without sufficient cause, once the applicant is duly qualified in terms of provisions of M.C.S. Act, 1960 and bye-laws of the Society. In the present case, there is nothing to indicate that the applicants were disqualified for being admitted to the membership. The Resolution of the director board sans justifiable reasons to refuse membership to the petitioners. He placed reliance on judgment of this court in Writ Petition No.14305/2019 in case of Mr. Ashok Sakharam Ovhal and Ors. Vs. The Hon’ble Cooperative Minister, Cooperative Ministry dated 15.02.2022, wherein this Court disapproved decision of the Director Board of respondent Bank, refusing membership, consequently, issued direction to grant such application while setting aside the order of the Hon’ble Minister. Mr. Gaware would further point out that in view of the amendment in Section 27 (incorporated by Maharashtra Cooperative Societies (Third Amendment) Act, 2021) substantial change has been introduc