Case Note & Summary
The petitioners, members of the Highway Consumers Co-operative Society Ltd., challenged an interim order of liquidation passed by the Deputy Registrar of Co-operative Societies on 12th September 1986 under Section 102(1)(c)(iv) of the Maharashtra Co-operative Societies Act, 1960. The society had a yearly turnover of Rs.1.84 crores, 4144 members, authorised share capital of Rs.3,50,000, subscribed capital of Rs.2,97,000, 16 departments, and 457 employees. The Deputy Registrar issued the order without affording any hearing to the society and without recording a finding that the society's continuance was detrimental to the interests of its members or the public. The court noted that the order was passed in a routine manner without application of mind. The petitioners argued that the order violated principles of natural justice and the statutory conditions precedent for liquidation. The respondents contended that the order was interim and did not require a hearing. The court held that even an interim order of liquidation cannot be passed without hearing the society, as it has serious consequences. The court also found that the Deputy Registrar did not record any satisfaction that the society's continuance was detrimental, which is a mandatory condition under Section 102(1)(c)(iv). The court quashed the interim order and directed the Deputy Registrar to hear the society before passing any fresh order. The petition was allowed.
Headnote
A) Co-operative Law - Liquidation - Section 102(1)(c)(iv) Maharashtra Co-operative Societies Act, 1960 - Interim Order - The Deputy Registrar passed an interim order of liquidation without hearing the society and without recording satisfaction that the society's continuance is detrimental to the interests of its members or the public - Held that such an order violates principles of natural justice and statutory conditions, and is liable to be quashed (Paras 1-5).
Issue of Consideration
Whether an interim order of liquidation under Section 102(1)(c)(iv) of the Maharashtra Co-operative Societies Act, 1960 can be passed without affording a hearing to the society and without satisfying the conditions precedent for liquidation.
Final Decision
The court quashed the interim order of liquidation dated 12th September 1986 and directed the Deputy Registrar to hear the society before passing any fresh order. The petition was allowed.
Law Points
- Natural justice
- Right to be heard
- Section 102(1)(c)(iv) Maharashtra Co-operative Societies Act
- 1960
- Interim liquidation order
- Conditions precedent for liquidation
