Case Note & Summary
The writ petition was filed in the High Court of Judicature at Bombay, Bench at Aurangabad, challenging the order of the Minister for State, Cooperation Department, passed in revision under Section 154 of the Maharashtra Cooperative Societies Act, 1960. The petitioner was a director of respondent no.1 credit cooperative society. The District Deputy Registrar had held that the petitioner incurred disqualification under Section 73CA(4) read with by-law no.44(5) of the society, on the ground that he was simultaneously director of another credit cooperative society. The Divisional Joint Registrar had quashed the D.D.R. order and dismissed the complaint of respondent no.2, but the Minister allowed respondent no.2's revision and confirmed the D.D.R. order, quashing the Divisional Joint Registrar's order. The petitioner challenged this before the High Court. The facts showed that by-law no.44(5) debarred a member from holding director's post if he was director of another credit cooperative society. The petitioner had tendered resignation as director on 06/08/2019, copies of which were received by the society and the D.D.R. the same day. No provision in the Act or by-laws specified manner of acceptance of resignation. The legal issues were whether by-law no.44(5) was inconsistent with Section 73A of the Act, and whether the resignation operated immediately without acceptance. The petitioner argued that Section 73A contained exhaustive grounds of disqualification and did not debar a person from being director of two societies; therefore the bylaw was illegal. He also argued that his resignation took effect immediately. The respondents contended that the bylaw merely added an additional reasonable qualification and was valid; and that the resignation was unilateral and never accepted, so the petitioner continued as director. The court rejected the first argument. It held that Section 73A defined a designated officer as Chairman/President or other officer declared by the State Government, and a director did not fall within that definition. The section did not lay down eligibility conditions for directors, whereas bylaw no.44 did. Thus both operated in different spheres and were not inconsistent. The court relied on Sambha Pikale, which held that the Act and Rules prescribe minimum disqualifications and additional qualifications can be prescribed by approved by-laws. It also noted that Section 73FF was renumbered as Section 73CA and provided that a person shall not be eligible for committee membership if disqualified under the Act or Rules, reinforcing by-law validity. The Supreme Court decision in Babaji Garad was distinguished as dealing with a direct statutory conflict, not the present case. On the second issue, the court found that no dispute existed about the fact of resignation. Since no provision prescribed acceptance, the court followed the Division Bench decisions in Arun Rajurkar and Prakash Khot, as well as the Supreme Court in Moti Ram v. Param Dev, which held that a unilateral resignation communicated to the competent authority takes effect from the date of communication. The petitioner's resignation dated 06/08/2019 was communicated to the society and the D.D.R. on the same date, so he ceased to be a director from that date. The available excerpt of the judgment does not record the final operative order, but the court's reasoning indicates that the petition would succeed on the resignation ground, with the disqualification order liable to be set aside.
Headnote
A) Cooperative Societies - By-laws and Statutory Provisions - Additional Disqualifications - Maharashtra Cooperative Societies Act, 1960, Sections 73A, 73CA - Bylaw 44(5) of respondent society debarring its director from being director of another credit cooperative society was not inconsistent with Section 73A because Section 73A addressed only designated officers and did not regulate eligibility of directors, leaving room for by-law qualifications - Court followed Sambha v State to hold that Act and Rules prescribe minimum standards, and additional reasonable qualifications may be prescribed under approved by-laws - Held that bylaw 44(5) was valid and not inconsistent (Paras 7-9). B) Cooperative Societies - Disqualification of Committee Members - Section 73CA, Maharashtra Cooperative Societies Act, 1960 - Section 73CA (formerly Section 73FF) inter alia provides that a person shall not be eligible for committee membership if he has incurred disqualification under the Act or Rules, which supports considering by-law-based disqualifications - Court held there was no substance in argument that bylaw 44(5) conflicted with statutory provisions (Para 9). C) Precedent - Applicability - Babaji Kondaji Garad v. Nasik Merchants Co-operative Bank Ltd., (1984) 2 SCC 50 - Supreme Court decision on conflict between statute and by-law regarding reserved seats was distinguishable because present bylaw operated in a field where Act was silent and did not contradict a statutory mandate - Held that Babaji Garad was not applicable to present facts (Para 10). D) Cooperative Societies - Resignation of Director/Chairman - Manner and Effective Date - Maharashtra Cooperative Societies Act, 1960 (no specific provision) - When neither Act nor by-laws prescribe manner of resignation, a resignation tendered by a director operates from date of tender/communication to the society and requires no acceptance - Court relied on Arun Rajurkar and Prakash Khot and Supreme Court in Moti Ram v. Param Dev; petitioner's resignation dated 06/08/2019 was received by society and D.D.R. same day and therefore he ceased to be director before disqualification dispute - Held resignation effective from 06/08/2019 (Paras 11-12).
Issue of Consideration
Whether bylaw no.44(5) of respondent no.1 society, which debarred a member from being director of two credit cooperative societies, was inconsistent with Section 73A of the Maharashtra Cooperative Societies Act, 1960; whether the petitioner's resignation tendered on 06/08/2019 operated unilaterally and immediately, without needing acceptance, thereby ceasing to be a director before the disqualification dispute arose.
Final Decision
Not mentioned in the provided judgment excerpt; the final operative order is not recorded.
Law Points
- Additional qualifications or disqualifications can be prescribed by approved by-laws of a cooperative society when the Act and Rules are silent
- Section 73A of the Maharashtra Cooperative Societies Act
- 1960 defines designated officer and does not govern directors
- Section 73CA (formerly Section 73FF) provides eligibility conditions for committee members
- resignation of a director of a cooperative society operates from the date of tender/communication to the society and requires no acceptance when no statutory or by-law provision prescribes acceptance
- unilateral relinquishment communicated to competent authority takes effect from date of communication
- statute prevails over by-law only when there is direct conflict
