The restriction on the number of directors in cooperative societies to 21 under Section 73AAA of the MCS Act is constitutional and does not violate Articles 14 or 19(1)(c) of the Constitution.

JUDGMENT :

M.S. Sonak J.

1. Heard learned counsel for the parties.

2. Rule. At the request of and with the consent of the learned counsel for the parties, the Rule is made returnable immediately. Even otherwise, there are orders posting this matter for final disposal.

3. The petitioners at the time of the institution of this petition were the Directors of the Maharashtra State Cooperative Tribal Development Corporation Limited, Nashik (Respondent No.2) (“Corporation”). This is a society registered under the Maharashtra Co-operative Societies Act, 1960 (“MCS Act”) and is concerned with the welfare of the tribals.

4. The petitioners have pleaded that in terms of the bye- laws of the Corporation, its affairs are controlled and managed by the board of directors comprising 36 directors. The petitioners have pleaded that the State Legislature passed the Maharashtra State Cooperative Societies (Amendment)Act, 2013, effective 14 February 2013. By Section 30 of this Amendment Act of 2013, Section 73AAA was inserted. The first proviso to Section 73AAA (1) restricts the maximum number of directors in the Cooperative society to 21.

5. Mr Sandeep Salunkhe, learned counsel for the petitioners, submitted that Section 73AAA, including in particular the first proviso to sub-section (1) thereof, is ultra-vires, unconstitutional, null and void because:-

(a) the impugned amendment was forced upon the State Legislature by the Constitution (97th Amendment) Act, 2011. This Constitutional amendment was declared ultra-vires by the Gujarat High Court vide its judgment and order dated 22 April 2013 in Writ Petition (PIL) No. 166 of 2012. At the time of the institution of this petition, the Hon’ble Supreme Court granted Special Leave to Appeal the Gujarat High Court’s decision. But no interim relief was granted.

(b) Mr Salunkhe submitted that finally, in Union of India Vs. Rajendra N. Shah, 2021 SCC Online SC 474 Hon’ble Supreme Court upheld the Gujarat High Court’s judgment and order except to the extent it had struck down the entirety of Part IX-B of the Constitution of India. However, the Hon’ble Supreme Court declared that Part IX-B of the Constitution is operative only insofar as it concerns multi-state cooperative societies both within the various states and in the Union Territories of India.

(c) Accordingly, Mr Salunkhe submitted that once the Constitutional amendments were declared as ultra-vires and inapplicable to cooperative societies, the impugned amendments would also have to be declared as ultra-vires, unconstitutional, null and void.

(d) Mr Salunkhe submitted that the Corporation was formed to address to the welfare of the tribals. Bye-laws had provided for 36 directors to give representation to the various districts with sizable populations of tribals. He submitted that without any rationale, rhyme or reason, the legislature could not have amended the MCS Act and restricted the number of directors to only 21. He submitted that such a reduction is arbitrary and, therefore, violative of Article 14 of the Constitution. He submitted that such restriction is against the cooperative principles and amounts to an unreasonable restriction on the Right guaranteed by Article 19(1)(c), which concerns the Right to form cooperative societies, associations, or unions. Accordingly, he submitted that the impugned amendment deserves to be struck down.

(e) Mr Salunkhe submitted that Section 73B of the MCS Act provides for reservations inter-alia to members belonging to the Scheduled Castes, Other Backward Classes and De-notified Tribes or Special Backward Classes. He submitted that in terms of the bye-laws of the Corporation, only tribals are permitted to be members of the Corporation. Therefore, he submitted that mandating reservations for members who are not tribals would be impossible to comply with. He, therefore, submitted that the impugned amendments must be declared illegal, unconstitutional, null and void.

6. Mr Salunkhe submitted that the Hon'ble Supreme Court