MUKESH BHATT Vs. CENTRAL REGISTRAR COOPERATIVE SOCIETIES

JUDGEMENT

(1.) The Cooperative Store Limited, commonly identified as Super Bazar, (hereinafter referred to as the ,,cooperative society) was registered under the Multi-Unit Cooperative Societies Act, 1942. The UOI (through Ministry of Consumer Affairs) respondent No.8 in the present petition has a 72% holding in the cooperative society. On account of the cooperative society running into huge losses running into hundreds of crores of rupees, the same was ordered to be liquidated vide an order dated 5.7.02 passed by the Central Registrar acting under the extant Multi-State Cooperative Societies Act, 2002 (hereinafter referred to as the ,,said Act). On a petition being filed before the Supreme Court by the employees union, the Supreme Court passed various orders for revival of the cooperative society, the principal object of revival being to ensure that the workers do not lose their jobs.

(2.) The main petitions in the Supreme Court were S.L.P. (C) Nos. 8398-99/05. Various orders came to be passed from time to time by the Supreme Court and a reference at this stage can be made to some of these orders and the important observations therein. Vide order dated 28.2.06, the Supreme Court noted that there was a need for professional management for Super Bazar. Thereafter, on 5.5.06, the Supreme Court directed that a scheme be framed by a committee so that bidders can make bids for taking over the cooperative society. Guidelines were also laid down for evaluation of the bids. The first important order thereafter is the order dated 26.7.06, wherein, the Supreme Court noted that a solution will have to be found, considering that the said Act was applicable, so that the bidders can bring in funds towards the share capital and they should be given sufficient control of the management of the society. It was further noted that such a bidder who is ultimately selected to infuse funds should enjoy a legal status within the scheme of the Act. It was noted that to achieve the aforesaid object, it may be necessary to amend the Bye Laws or get issued appropriate directions by the Central Registrar functioning under the Act.

(3.) The next important order thereafter is the order dated 12.12.06 in which the Supreme Court noted that M/s Reliance Industries showed its disinclination to be a part of the revival process of the cooperative society by making of the bid inasmuch as under the said Act there was a restriction of a maximum holding of 20% of the shares which would not give effective control and management to the Reliance Industries. It was therefore submitted on behalf of M/s. Reliance Industries that unless appropriate amendments were made in the Act, Rules and the Bye Laws it would not be possible for Reliance Industries to invest in the cooperative society. The Supreme Court directed the counsel for the UOI to seek instructions whether the Act and the Rules can be suitably amended to cover such exceptional situations. Thereafter, various orders were passed and which considered the bids which were submitted by the different bidders. Some bids were thereafter withdrawn. The bid which was finally accepted was/is of M/s. Writers & Publishers Ltd., respondent No.7 herein. This is noted by the Supreme Court in its order dated 12.2.08.