SHRIPATRAO LIMBAJI KADAM Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) This is a petition by thirteen members of the committee of the Sakhar Karkhana which itself is petitioner No. 14. This petition has been filed to challenge the order Ex.-D to the petition dated the 25th of August 1978 passed by the Director of Sugar and Additional Registrar, Co-operative Societies, Maharashtra State, Poona-9. By this order the appointment of the committee of petitioners Nos. 1 to 13 has been terminated and one K.S. Jaiswal, District Deputy Registrar, Co-Operative Societies, Beed, has been appointed administrator of petitioner No. 14 'Karkhana for the period ending with the 31st of December 1978 or till the elected Board of 'Directors of the Karkhana is formed and assumes charge, whichever is earlier.

(2.) "Most of the facts are undisputed. The dispute relates to- the interpretation of the provisions of sub-sec (1) of Section 78 of the Maharashtra Co-operative Societies 'Act, 1960, and more particularly the powers and rights of the Director of Sugar and the Additional Registrar of Co-operative Societies with regard too the appointment, continuance or discontinuance of the committee appointed under sub-clause (i) of clause (a) of sub-section"(1) of Section 78 or one or more administrators appointed under sub- clause (ii) of clause (a) of sub-sec. (1) of Section 78 of the same Act. Admittedly, petitioner No. 14 as a co-operative sugar factory was registered on the 14th of June 1974. The first meeting of this society was called on the 15th of July 1974. It was adjourned to the 20th of July 1974. On that day, as per provisions of the Co-operative Societies Act and the by laws of the Society, a board of twelve members was nominated by the general body till the rgularly elected Board of Directors took over the management By about the 28th of September 1975, nine out of the twelve members resigned. The quorum for the meeting of the Board of Directors as per the by-laws was one third.of the sanctioned strength. It means that a minimum of four Directors ought to be there for forming a quorum of the managing committee. As the Directors that remained after nine persons resigned were only three, there, was no possibility of having a quorum and hence no possibility of the managing committee meeting lawfully of transacting any business. The Director of Sugar, therefore,thought that a situation had arisen ' in which a majority of the members had ceased to perform their functions and the business of the Society had or was likely to come to a stand-still. Since he formed this opinion, he acted under subsec. (1) of Section 78 and issued show cause notice to the remaining three members. He accepted their explanation, heard them and naturally concluded that the business of Society could not be carried on lawfully and the remaining three members must be removed from the Board of Directors. Accordingly, he removed them. When the Registrar takes this action under sub-section (1) of Section 78, he is further obliged to pass an order for appointing a committe consisting of three or more members of the Society in the place of the old committee or to appoint one or more administrators who need not not be members of the Society. Accordingly, respondent No. 2 passed an order dated 12-2-1975 Ex. A to the petition. Under this order which is expressly stated to be under Section 78 (1) (a) (i), he appointed a committee of ten members, their period of appointment was initially for one year from the date they assumed charge unless some earlier order was passed terminating their appointment. This committee has all the powers of an elected Board of Directors as per by-laws of the Karkhnaa By further order date 1-1-1977 the period of this committee was extended up to the 31st of Decemer 1977 or until further orders, whichever was earlier. That order is Ex. B to the petition. In March 1977 three more members were added to the same committee. However, two of them resigned and the committee nominated two members in their place on the assumption that it had a right of nomination as well, which is available under the by-laws to the elected Board of Directors. Mr. C. J. Sawant, the Counsel-representing the respondents, has some doubt about the legality and correctness of this procedure, but that point is not relevant at all for the decision of this petition and has not been either argued or considered by us.

(3.) In October 1977, the existing committee requested respondent No. 2 to further extend its period till the end of 1978, but no specific order has been passed in that behalf. The committee has just continued to function, as no specific orders were passed by respondent No. 2.