RAOSAHEB BAPU BADBADE Vs. UNION OF INDIA

JUDGEMENT

(1.) BY this Petition, filed under Article 226 of the Constitution, order dated August 20, 1992, passed by Respondent No. 6 in Appeal No. 7 of 1992, while exercising appellate powers under Multi-State Co-operative societies Act, 1984, is under challenge. Only few facts are required to be stated to appreciate the grievance urged on behalf of the Petitioners. The. , respondent No. 5 as a sugar factory and a Multi-State Co-operative Society. The factory enrolled 5000 producers members in the year 1988 and thereupon a dispute was filed before the Director of Sugar, State of Maharashtra, complaining that enrolment of members was in violation of the Bye-laws as the authorised capital did not permit enrolment of additional members without increasing the share capital. An interim relief was sought restraining the 5000 members from enjoying the advantage of membership, and the interim relief was granted initially on August 1, 1988 and confirmed on April 10, 1989. On March 20. 1992, the final order was passed recording the finding that the sugar factory had no right to increase the number of members without increase of share capital.

(2.) DURING the pendency of the dispute, on July 24, 1989, the General body Meeting of the factory was called and the Bye-laws were proposed to be amended by raising the share capital from Rs. 2,50,00,000/- to Rs. 3,06. 00, 000/ -. The amended Bye-law interalia provided that Rs. 3,00,00,000/- should be divided into 30,000 shares of Rs. 1. 000/- each reserved for producer-member. The Bye-law was approved by the Registrar, on October 3, 1989. The Joint Registrar, Urban Banks, in exercise of powers under section 35 (1) of Multi State-Co-operative Societies Act, 1984, declared the Election Programme of the sugar factory. The election Programme was declared on June 15, 1992 for holding election for 12 seats of the Board of Directors. The provisional list was published on June 19 and the last date of filing objections to Voters' list was 29th June 1992. The scrutiny of objections was to be held on July, 2, 1992, and publication of final List was to be made on July 4, 1992.

(3.) THE final decision in regard to the dispute about the enrolment of 5000 members was recorded on March 19, 1992. The existing Board of the sugar factory suddenly enrolled 2346 new members on March 30, 1992. Additional 283 and 1017 were enrolled on April 16 and 881 more members were enrolled on May 1, 1992. All these members who were enrolled from march 30, 1992 were initially not the members of sugar factory. In November 1991 the Respondent No. 4 who is the producer member of the factory had filed dispute before the Director of Sugar, State of Maharashtra, complaining about the activities of the Board of Directors and apprehending that the additional members will be enrolled contrary to Bye-laws only with a view to further the interest of the existing Board of Directors in the ensuing election. In this dispute on April 27, 1992, an application was filed for interim relief restraining additional members who were enrolled between march 20, 1991 to May 1, 1992. The gravamen of the complaint was that the Bye-laws do not permit enrolment of fresh members and the increased share capital should be made available only to the producer members. Initially the Director of Sugar passed the order on May 6, 1992 granting interim relief but as that order was passed without hearing the factory, a fresh order was passed on June 4, 1992, restraining the new members who were enrolled from march 30, 1992 onwards from exercising right of membership. Against the order passed by the Director of Sugar, an appeal ,was carried before the appellate Authority i. e. Respondent No. 6 and the interim relief pending the dispute was confirmed, and these two orders are under challenge.