Case Note & Summary
The dispute arose from the amalgamation of Shri Sant Sawta Maharaj Gramin Bigar Sheti Sahakari Patsanstha (respondent No.5) into Mahatma Phule Nagari Sahakari Patsanstha (respondent No.4). Respondent No.5, operating in District Ahmednagar, was running into losses and could not repay depositors. Consequently, its managing committee and members initiated amalgamation proceedings. On 14.08.2009, the Annual General Meeting of respondent No.5 passed a resolution proposing amalgamation with a financially sound society. On 01.01.2010, a special general body meeting resolved with 95% majority to amalgamate into respondent No.4; 285 members were present, and the resolution was opposed by 45 defaulting members who walked out. Respondent No.4 conducted its own special general meeting on 10.01.2010 and resolved to give effect to the amalgamation. The proposal was submitted to the District Deputy Registrar, who, after receiving a favourable report from the Taluka Deputy Registrar, passed an order of amalgamation on 19.04.2010 under Section 17 of the Maharashtra Cooperative Societies Act, 1960, and Rule 16 of the Maharashtra Cooperative Societies Rules, 1961. The registration of respondent No.5 was cancelled on 20.04.2010. Respondent No.6, a defaulting member with outstanding loans of Rs.2,35,505, filed a statutory appeal before the Divisional Joint Registrar, which was dismissed on 14.02.2011, confirming the amalgamation. Respondent No.6 then preferred a revision under Section 154 of the Act before the State Government. The Minister of State for Cooperation stayed the amalgamation on 01.03.2011 and eventually allowed the revision on 05.07.2011, setting aside the amalgamation order. The appellants, depositors of respondent No.5, challenged the Minister's order by filing Writ Petition No.7649 of 2011 before the High Court. They contended that the revision was politically influenced, not maintainable, and that procedural requirements under Section 17 were duly complied with. They also highlighted that respondent No.4 had already taken over assets and liabilities, refunded 25% of deposits, and renewed the balance. Meanwhile, respondent No.4 had filed Writ Petition No.5456 of 2011, in which consent terms were attempted between respondent Nos.4, 5, and 6, but the petition was later withdrawn. The Single Judge dismissed the appellants' writ petition on 24.09.2012, leading to the present Letters Patent Appeal. The matter involves the legality of the Minister's revisional order, the effect of majority member support, and the rights of depositors.
Headnote
A) Cooperative Societies - Amalgamation - Section 17, Maharashtra Cooperative Societies Act, 1960 - The process of amalgamation required a special general body resolution and approval of the District Deputy Registrar. In this case, 95% majority of members approved amalgamation. The order of amalgamation was passed under Section 17 and Rule 16. However, the Minister later set aside the amalgamation order on revision by a defaulting member.
B) Procedural Law - Revisional Jurisdiction - Section 154, Maharashtra Cooperative Societies Act, 1960 - The Minister exercised revisional powers to set aside the amalgamation. The appellants contended that the revision was not maintainable and that the Minister ignored procedural compliance and majority support.
C) Writ Petition - Locus Standi - Depositors as 'persons aggrieved' - The appellants, being depositors of the amalgamating society, filed a writ petition against the Minister's order, asserting that they were adversely affected by the setting aside of amalgamation. The Single Judge dismissed the writ petition, leading to this LPA. (Paras 3-7).
Issue of Consideration
Whether the Minister's order setting aside the amalgamation of cooperative societies was legal and justified; whether the Single Judge erred in dismissing the writ petition; whether the revision before the Minister was maintainable; whether procedural requirements under Section 17 of the Act were complied with.
Case Details
2013 LawText (BOM) (12) 17
Letters Patent Appeal No. 206 of 2012 in Writ Petition No.7649 of 2011
A.H. Joshi, Ravindra V. Ghuge
Mr. N.V. Gaware, Mr. S.K. Tambe, Mr. M.R. Sonawane, Mr. R.N. Dhorde, Mr. Mukul Kulkarni, Mr. S.B. Jadhav
Kedarnath Ramdayal Bang, Radhakrishna Tribakraj Bihani, Mahesh Gokuldas Asawa, Sau. Sunita Shrikant Mundada, Shrikant Shamsundar Kabra
The State of Maharashtra, The Divisional Joint Registrar Cooperative Societies Nashik Division, The District Dy. Registrar Cooperative Societies Ahmednagar, Mahatma Phule Nagari Sahakari Patsanstha Bhingar Ahmednagar, Shri Sant Sawta Maharaj Gramin Bigar Sheti Sahakari Patsanstha Songaon, Appasaheb Govind Antre, Nandkishor Shivnarayan Attal, Sou. Vishwakanta Jagdish Attal, Vijaykumar Shivnath Lahoti, Sou. Chandrakala Laxminarayana Ladhe, Smt. Alka Meenanath Antre, Dnyandeo Bhaguji Anap, Raghunath Maruti Pathare, Ashok Raghunath Jumbukar, Karbhari Waman Dhige, Kaysalyabai Rambhau Shinde, Geetabai Bhanudas Tajane
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Challenge to the order of the Minister of State for Cooperation setting aside the amalgamation of two cooperative credit societies.
Remedy Sought
The appellants (depositors of respondent No.5 society) sought to set aside the Minister's order dated 05.07.2011 and restore the amalgamation.
Filing Reason
The amalgamation was set aside by the Minister on a revision filed by respondent No.6, a defaulting member, despite the amalgamation having been approved by overwhelming majority of members and procedural compliance.
Previous Decisions
The District Deputy Registrar ordered amalgamation on 19.04.2010; the Divisional Joint Registrar dismissed the appeal and confirmed the order on 14.02.2011; on revision, the Minister of State for Cooperation set aside the amalgamation order on 05.07.2011; the appellants' writ petition challenging the Minister's order was dismissed by the Single Judge on 24.09.2012.
Issues
Whether the Minister's order setting aside the amalgamation was illegal, arbitrary, and perverse.
Whether the revision before the Minister was maintainable after the amalgamation had been fully effected.
Whether procedural requirements under Section 17 of the Maharashtra Cooperative Societies Act, 1960, were satisfied.
Whether the Single Judge erred in dismissing the writ petition without properly appreciating the contentions.
Submissions/Arguments
The defaulting members, including respondent No.6, stalled recovery proceedings by obstructing amalgamation.
The amalgamation process complied with Section 17 and Rule 16, with 95% majority support in the general body.
Respondent No.4 had already taken over assets and liabilities, refunded 25% of deposits, and renewed the balance.
Respondent No.6 is politically influential and used his connections to pressure the Minister.
The revision was not maintainable as the amalgamation order had already been implemented.
The consent terms entered into between respondent No.4, 5, and 6 were collusive and not binding on depositors.
The Single Judge failed to appreciate that the Minister acted beyond jurisdiction and against settled principles.
Judgment Excerpts
the respondent No.3 District Dy. Registrar has issued the order of amalgamation by exercising powers under Section 17 of MCS Act, 1960 and rule 16 of Maharashtra Cooperative Societies Act, 1961.
In the special general body meeting it was resolved by the general body (with 95% majority i.e. 285 members being present), to amalgamate the respondent No.5 society into the respondent NO.4 society.
The defaulting members who had borrowed huge loans from the respondent No.5 society are out to stall the further recovery proceedings.
Procedural History
The Annual General Meeting of respondent No.5 resolved on 14.08.2009 to amalgamate into a financially stable society. On 01.01.2010, a special general body meeting approved amalgamation into respondent No.4 with 95% majority. Respondent No.4 resolved to accept the amalgamation on 10.01.2010. The District Deputy Registrar directed an enquiry, and upon receipt of a favourable report, passed an order of amalgamation on 19.04.2010 under Section 17 of the MCS Act, 1960. The registration of respondent No.5 was cancelled on 20.04.2010. Respondent No.6 filed an appeal before the Divisional Joint Registrar, which was dismissed on 14.02.2011. Respondent No.6 then filed a revision under Section 154 before the State Government; the Minister stayed the amalgamation on 01.03.2011 and allowed the revision on 05.07.2011, setting aside the amalgamation. The appellants filed Writ Petition No.7649 of 2011 before the High Court challenging the Minister's order; it was dismissed by the learned Single Judge on 24.09.2012. Respondent No.4 had earlier filed Writ Petition No.5456 of 2011, which was disposed of as withdrawn on 25.01.2013. Hence, the present Letters Patent Appeal.
Acts & Sections
- Maharashtra Cooperative Societies Act, 1960: Section 17, Section 154
- Maharashtra Cooperative Societies Rules, 1961: Rule 16
