Case Note & Summary
The petitioners, Smt. Jaya Admane (Secretary) and Sanjay Dhabekar (President) of Samta Grahak Sahakari Sanstha, challenged an order dated 31st March 2001 passed by the District Deputy Registrar, Cooperative Societies, Nagpur (respondent no. 3) under Section 102(1)(c)(ii)(iv) of the Maharashtra Cooperative Societies Act, 1960, which directed the winding up of the society's affairs. The petitioners contended that the society was continuously conducting its business and its accounts were regularly audited and certified by the Department of Cooperation. They argued that before passing the liquidation order, it was mandatory for the Deputy Registrar to hold an enquiry under Section 83 of the Act concerning the society's constitution, working, and financial conditions, and also to conduct an inspection under Section 84 of the Act. Neither of these procedural steps was taken. Additionally, the impugned order incorrectly stated that the society had failed to communicate its new address to the authorities, whereas the society had in fact informed the Deputy Registrar of its change of address by letter dated 19.7.1987. The Assistant Government Pleader did not seriously dispute these submissions. The court examined the record and found that the letter dated 19.7.1987 (Annexure-1) indeed showed that the society had communicated its new address. The court also noted that the impugned order did not reflect any enquiry under Section 83 or inspection under Section 84. Consequently, the court held that the liquidation order was arbitrary and bad in law, as it violated the mandatory procedural requirements of the Act. The court allowed the petition, quashed the impugned order, and directed that the society be permitted to function in accordance with law. The rule was made absolute with no order as to costs.
Headnote
A) Cooperative Law - Winding Up of Society - Mandatory Enquiry - Section 102(1)(c)(ii)(iv) read with Sections 83 and 84 of the Maharashtra Cooperative Societies Act, 1960 - The Deputy Registrar passed an order winding up the affairs of a cooperative society without holding an enquiry under Section 83 regarding its constitution, working and financial conditions, and without conducting inspection under Section 84 of the Act. The court held that such procedural requirements are mandatory and their non-compliance renders the liquidation order arbitrary and bad in law. (Paras 1-5)
B) Cooperative Law - Change of Address - Communication to Authorities - The society had informed the Deputy Registrar of its new address by letter dated 19.7.1987, but the impugned order erroneously observed that the society failed to communicate its new address. The court noted this factual error. (Para 4)
Issue of Consideration
Whether the order of liquidation under Section 102(1)(c)(ii)(iv) of the Maharashtra Cooperative Societies Act, 1960 is valid without prior enquiry under Section 83 and inspection under Section 84 of the Act.
Final Decision
The court allowed the petition, quashed the impugned order dated 31st March 2001, and directed that the society be permitted to function in accordance with law. Rule made absolute with no order as to costs.
Law Points
- Natural justice
- mandatory enquiry before winding up
- Section 83 enquiry
- Section 84 inspection
- Maharashtra Cooperative Societies Act
- 1960
Case Details
2014 LawText (BOM) (07) 125
Writ Petition No. 5208 of 2004
Mr. P. S. Tidke for petitioners, Mr. D. M. Kale, Assistant Government Pleader for respondents
Smt. Jaya w/o Chandrakant Admane and Sanjay s/o Rambhaurao Dhabekar
State of Maharashtra through Secretary, Cooperation and Textiles Department, Divisional Joint Registrar, Cooperative Societies, District Deputy Registrar, Cooperative Societies, and Liquidator
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Nature of Litigation
Writ petition challenging order of liquidation of a cooperative society.
Remedy Sought
Petitioners sought quashing of the order dated 31st March 2001 passed by respondent no. 3 under Section 102(1)(c)(ii)(iv) of the Maharashtra Cooperative Societies Act, 1960, and permission to continue running the society.
Filing Reason
The Deputy Registrar passed a liquidation order without holding mandatory enquiry under Section 83 and inspection under Section 84 of the Act, and based on an incorrect observation that the society failed to communicate its new address.
Previous Decisions
An ad-interim order was passed by the court permitting the petitioners to run the fair price shop, which was confirmed on 6.10.2006 when rule was issued.
Issues
Whether the order of liquidation under Section 102(1)(c)(ii)(iv) of the Maharashtra Cooperative Societies Act, 1960 is valid without prior enquiry under Section 83 and inspection under Section 84 of the Act.
Submissions/Arguments
Petitioners argued that the society was continuously doing business and its accounts were audited; that before passing the liquidation order, enquiry under Section 83 and inspection under Section 84 were mandatory but not conducted; and that the observation regarding non-communication of new address was incorrect.
Respondents did not seriously dispute the submissions.
Ratio Decidendi
Before ordering winding up of a cooperative society under Section 102(1)(c)(ii)(iv) of the Maharashtra Cooperative Societies Act, 1960, the Registrar must hold an enquiry under Section 83 regarding the society's constitution, working and financial conditions, and may conduct inspection under Section 84. Non-compliance with these mandatory procedural requirements renders the liquidation order arbitrary and bad in law.
Judgment Excerpts
Petitioners have assailed order 31st March 2001 passed by respondent no. 3 District Deputy Registrar, Cooperative Societies, Nagpur under Section 102 (1) (c) (ii) (iv) of the Maharashtra Cooperative Societies Act, 1960 (for short “the Act”) winding all the affairs of Society viz. Samta Grahak Sahakari Sanstha...
Learned counsel for petitionerSociety submits that... before passing order under Section 102 of the Act, it was obligatory for respondent no. 3 to hold enquiry as contemplated under Section 83 of the Act regarding constitution, working and financial conditions of the petitionerSociety.
As regards the communication of new address, from letter dated 19.7.1987 (Annexure1 to the petition), it is seen that the petitioner Society had informed change in its address...
impugned order no where reflects that enquiry as contemplated under Section 83 or inspection under Section 84 of the Act was conducted.
Procedural History
The Deputy Registrar passed the liquidation order on 31st March 2001. The petitioners filed Writ Petition No. 5208 of 2004 in the Bombay High Court, Nagpur Bench. An ad-interim order was passed permitting the petitioners to run the fair price shop, which was confirmed on 6.10.2006 when rule was issued. The petition was finally heard and decided on 7th July 2014.
Acts & Sections
- Maharashtra Cooperative Societies Act, 1960: Section 102(1)(c)(ii)(iv), Section 83, Section 84
