Case Note & Summary
The dispute in this writ petition relates to the disqualification of respondent No.4, Prafulla s/o Khushalrao Mankar, as a Director of the Yavatmal District Central Cooperative Bank Limited (the Bank) under clause (ii) of Section 73EA of the Maharashtra Co-operative Societies Act, 1960 (the Act). The ground for disqualification was that respondent No.4 was an office bearer of a defaulted Primary Agricultural Credit Cooperative Society, namely Saoner Gramin Vividh Karyakari Sahakari Sanstha Maryadit, Ralegaon. The Divisional Joint Registrar (respondent No.2), exercising power under Section 78(1) of the Act, passed an order on 12-5-2010 removing respondent No.4 as Director on the ground that he had incurred the disqualification. This order was set aside by the Hon'ble Minister of Cooperation, Maharashtra State, on 29-9-2010 in Appeal No.341 of 2010 under Section 152 of the Act. The petitioner, Sadashiv s/o Ganpatrao Mahajan, claiming to be a member of Adiwasi Seva Sahakari Sanstha Ltd., which is a member-society of the Bank, filed this petition challenging the Minister's order. The court first addressed the preliminary objection regarding the petitioner's locus standi, holding that as a member of a member-society, the petitioner has sufficient interest in the affairs of the Bank and thus has locus to file the petition. On merits, the court examined the nature of disqualification under Section 73EA(ii). It held that the disqualification is automatic and is incurred by a person upon becoming an office bearer of a defaulting society. The Registrar's order under Section 78(1) is merely a ministerial act to give effect to the disqualification, not a quasi-judicial determination. The court found that the Minister, as appellate authority, failed to consider the relevant material and did not apply his mind to the facts. The Minister's order was based on irrelevant considerations and was therefore unsustainable. Consequently, the court allowed the writ petition, set aside the Minister's order dated 29-9-2010, and restored the order of the Divisional Joint Registrar dated 12-5-2010.
Headnote
A) Co-operative Law - Disqualification of Director - Section 73EA(ii) read with Section 78(1) of Maharashtra Co-operative Societies Act, 1960 - Automatic Disqualification - The disqualification under clause (ii) of Section 73EA is incurred automatically upon a person becoming an office bearer of a defaulting society. The Registrar's order under Section 78(1) removing such person is merely a ministerial act giving effect to the disqualification, not a quasi-judicial determination. (Paras 5-7) B) Co-operative Law - Appellate Power - Section 152 of Maharashtra Co-operative Societies Act, 1960 - Non-Application of Mind - The Minister, as appellate authority, failed to consider the relevant material and did not apply his mind to the facts. The order setting aside the disqualification was based on irrelevant considerations and is unsustainable. (Paras 8-10) C) Co-operative Law - Locus Standi - Member of Member-Society - The petitioner, being a member of a society which is a member of the Bank, has sufficient interest to challenge the order of the Minister, as the affairs of the Bank affect his rights. (Para 4)
Issue of Consideration
Whether the order of the Minister setting aside the disqualification of respondent No.4 as Director under Section 73EA(ii) of the Maharashtra Co-operative Societies Act, 1960 is valid and sustainable in law.
Final Decision
The writ petition is allowed. The order dated 29-9-2010 passed by the Hon'ble Minister of Cooperation, Maharashtra State, Mumbai in Appeal No.341 of 2010 is quashed and set aside. The order dated 12-5-2010 passed by the Divisional Joint Registrar, Cooperative Societies, Amravati Division, Amravati is restored. Rule is made absolute accordingly. No order as to costs.
Law Points
- Disqualification under Section 73EA(ii) is automatic upon being office bearer of a defaulting society
- Registrar's order under Section 78(1) is ministerial
- appellate authority must consider relevant material and apply mind
