Case Note & Summary
The petitioner, a representative of Maharashtra State Cooperative Cotton Growers' Marketing Federation Limited (respondent No.6), filed a writ petition before the Nagpur Bench of the Bombay High Court challenging the classification of respondent No.6 as an Apex Society for Ginning and Pressing Cooperative Societies. The Director of Marketing had issued a notification on 27.01.2010 under Section 2(2) of the Maharashtra Cooperative Societies Act, 1960, placing respondent No.6 in that category. The petitioner contended that respondent No.6, which dealt with marketing of cotton, should be recognized as an Apex Marketing Society on par with respondent No.7, the Maharashtra State Cooperative Marketing Federation Limited. This classification would have entitled respondent No.6 to elect a director to the board of respondent No.5, the Maharashtra State Cooperative Bank, under Bye-law 51B. The dispute arose in the context of ongoing elections to the bank's board. The petitioner had made representations as early as September 2009, alleging that respondent No.4 acted malafidely to exclude respondent No.6 from the marketing apex category. The court had earlier directed the Director to consider the representation, leading to the impugned order. The court examined the bye-laws of both federations and found that respondent No.6’s membership was restricted to cotton ginning and pressing societies, cooperative textile mills, and sale-purchase societies operating as sub-agents in cotton-growing regions. In contrast, respondent No.7 was open to all marketing societies in the state without commodity-specific restrictions. The court held that under Section 2(2) of the Act, only one society can be the Apex Society for a given class, and since respondent No.7 already functioned as the Apex Marketing Society, respondent No.6 could not claim the same status. The court further noted that the Maharashtra Cooperative Societies Rules, 1961, in Rule 10 and the Table thereunder, distinguish between agricultural marketing societies (classified under agricultural societies) and agricultural processing societies (classified under processing societies). Respondent No.6, with its primary activity of ginning and pressing cotton, fell within the processing classification. The Director’s order was found to be a reasoned decision based on a comparison of bye-laws and membership, and the court saw no arbitrariness or malafide. The respondents’ preliminary objections regarding locus standi, maintainability, and the availability of a revision under Section 154 were noted but not decided, as the petition failed on merits. The High Court dismissed the writ petition, upholding the classification, and imposed no costs.
Headnote
A) Cooperative Law - Classification as Apex Society - Criteria for Apex Marketing Society - Maharashtra Cooperative Societies Act, 1960, Section 2(2); Maharashtra Cooperative Societies Rules, 1961, Rule 10 - The court held that for a society to be classified as an Apex Marketing Society, its membership must be open to all marketing societies in the state; where respondent No.6's byelaws limited membership to cotton-related societies, it could not be recognized as an apex marketing society, especially since respondent No.7 already occupied that position. (Paras 8-12) B) Administrative Law - Application of Mind by Authority - Validity of Director's Order - Maharashtra Cooperative Societies Act, 1960 - The Director's order dated 27.01.2010 was based on a comparison of byelaws and membership of respondent No.6 and respondent No.7, and the court found no perversity or malafide; the order was neither arbitrary nor capricious and warranted no interference under writ jurisdiction. (Paras 8-12) C) Writ Jurisdiction - Locus Standi and Alternative Remedy - Preliminary Objections - Constitution of India, Article 226; Maharashtra Cooperative Societies Act, 1960, Section 154 - Respondents raised objections regarding locus standi of the petitioner and the availability of revision under Section 154, asserting that the Single Judge lacked jurisdiction; the court did not rest its decision on these objections, finding the petition merited dismissal on merits. (Paras 5, 13) D) Cooperative Law - Distinction between Marketing and Processing Societies - Classification under Rule 10 - Maharashtra Cooperative Societies Rules, 1961, Rule 10 and Table Entries - The court noted that the Rules make a clear distinction between agricultural marketing societies and agricultural processing societies; respondent No.6, primarily a ginning and pressing society, fell under the processing category, justifying its notification as an Apex Society for Ginning and Pressing Cooperative Societies. (Paras 10-12)
Issue of Consideration
Whether respondent No.6 society should be classified as an Apex Society for Marketing Cooperative Societies under the Maharashtra Cooperative Societies Act and Rules, rather than as an Apex Society for Ginning and Pressing Cooperative Societies.
Final Decision
The High Court dismissed the writ petition, finding no merit in the challenge. The Court upheld the order dated 27.01.2010 passed by respondent No.4 classifying respondent No.6 as an Apex Society for Ginning and Pressing Cooperative Societies. The Court held that the Director had applied his mind correctly to the byelaws and rules, and the classification was justified as respondent No.6's membership was limited to cotton-related societies, whereas respondent No.7 was open to all marketing societies. The preliminary objections regarding locus standi and alternative remedy were noted but not decided, as the petition failed on merits. No costs were ordered.
Law Points
- Legal points not extracted
- The classification of a society as an Apex Society under Section 2(2) of the Maharashtra Cooperative Societies Act must be based on its byelaws and the scope of its membership
- an Apex Marketing Society must be open to all marketing societies in the state
- a society restricted to cotton-related activities cannot be treated as an Apex Marketing Society when a general marketing Apex Society already exists.
