Case Note & Summary
The petitioner, Anant Gunvantrao Sable, was elected as a director of the Amravati District Central Co-operative Bank Ltd. (respondent no.4). The respondent no.5, Jagan Narhari Harde, alleged that the petitioner participated in a Managing Committee meeting on 6th March 2010 which resolved to shift the Surji Branch to Anjangaon, and the branch was shifted to a building jointly owned by the petitioner and his brother. Consequently, the respondent no.5 claimed that the petitioner stood disqualified under Section 73CA(1)(vi) of the Maharashtra Co-operative Societies Act, 1960. The petitioner challenged this disqualification by way of a writ petition. The legal issue was whether letting out premises to the co-operative bank disqualified the petitioner as a director under the said provision. The court analyzed the language of Section 73CA(1)(vi), which disqualifies a person who 'has taken on lease' any property of the society. The court noted that the provision only covers a lessee, not a lessor. The court emphasized that disqualification provisions are penal in nature and must be strictly construed. Since the petitioner was a lessor, not a lessee, he did not fall within the ambit of the disqualification. The court allowed the petition, quashed the order of disqualification, and directed that the petitioner be allowed to continue as a director.
Headnote
A) Co-operative Law - Disqualification of Director - Section 73CA(1)(vi) Maharashtra Co-operative Societies Act, 1960 - Interpretation of 'lessor' - The petitioner, a director, let out his jointly owned premises to the co-operative bank. The respondent contended that this disqualified him under Section 73CA(1)(vi) which disqualifies a person who 'has taken on lease' any property of the society. The court held that the provision only covers a lessee, not a lessor, and cannot be extended by implication. The disqualification provision being penal must be strictly construed. (Paras 2-8)
B) Co-operative Law - Strict Construction of Penal Provisions - Section 73CA(1)(vi) Maharashtra Co-operative Societies Act, 1960 - The court held that since the provision creates a disqualification, it must be interpreted strictly. The words 'has taken on lease' clearly refer to a lessee, and a lessor is not covered. The court rejected the argument that the provision should be read to include lessor by implication. (Paras 6-8)
Issue of Consideration
Whether the petitioner, by virtue of having let out premises jointly owned by him to the respondent no.4 – Co-operative Bank, can be said to be disqualified to hold the post of Director under the provisions of Section 73CA (1) (vi) of the Maharashtra Co-operative Societies Act, 1960?
Final Decision
The court allowed the writ petition, quashed the order disqualifying the petitioner, and directed that the petitioner be allowed to continue as a director of the respondent no.4 bank.
Law Points
- Disqualification under Section 73CA(1)(vi) of Maharashtra Co-operative Societies Act
- 1960
- Lessor not included in disqualification
- Strict interpretation of penal provisions
- No implied inclusion of lessor
Case Details
2016 LawText (BOM) (09) 130
Writ Petition No.6102 of 2015
Mr. N.A. Gaikwad for petitioner, Mr. K.L. Dharmadhikari for respondent nos.1 to 3, Mr. J.B. Kasat for respondent no.4, Mr. A.M. Ghare for respondent no.5
The State of Maharashtra, The Joint Registrar, Co-operative Societies, Amravati, The District Deputy Registrar, Co-operative Societies, Amravati, The Amravati Distt. Central Co-operative Bank Ltd., Jagan Narhari Harde
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition challenging disqualification of a director of a co-operative bank under Section 73CA(1)(vi) of the Maharashtra Co-operative Societies Act, 1960.
Remedy Sought
The petitioner sought quashing of the order disqualifying him as a director and a direction to allow him to continue as a director.
Filing Reason
The petitioner was disqualified on the ground that he had let out his jointly owned premises to the co-operative bank, allegedly falling under Section 73CA(1)(vi) which disqualifies a person who 'has taken on lease' any property of the society.
Issues
Whether the petitioner, by letting out premises jointly owned by him to the respondent no.4 – Co-operative Bank, is disqualified to hold the post of Director under Section 73CA(1)(vi) of the Maharashtra Co-operative Societies Act, 1960?
Submissions/Arguments
Petitioner argued that he is a lessor, not a lessee, and Section 73CA(1)(vi) only disqualifies a person who 'has taken on lease' property of the society, i.e., a lessee.
Respondent no.5 argued that the petitioner participated in the meeting where the resolution to shift the branch was passed and that the branch was shifted to his building, thus he should be disqualified.
Ratio Decidendi
Section 73CA(1)(vi) of the Maharashtra Co-operative Societies Act, 1960 disqualifies only a person who 'has taken on lease' property of the society, i.e., a lessee. A lessor is not covered by the provision. Disqualification provisions being penal must be strictly construed and cannot be extended by implication.
Judgment Excerpts
The question that arises for consideration in this Writ Petition is : Whether the petitioner, by virtue of having let out premises jointly owned by him to the respondent no.4 – Co-operative Bank, can be said to be disqualified to hold the post of Director under the provisions of Section 73CA (1) (vi) of the Maharashtra Co-operative Societies Act, 1960?
The provision of Section 73CA (1) (vi) disqualifies a person who 'has taken on lease' any property of the society. The petitioner is a lessor, not a lessee. The disqualification provision being penal must be strictly construed.
Procedural History
The petitioner was elected as a director of the Amravati District Central Co-operative Bank Ltd. The respondent no.5 alleged that the petitioner participated in a meeting on 6th March 2010 which resolved to shift the Surji Branch to Anjangaon, and the branch was shifted to a building jointly owned by the petitioner. Consequently, the petitioner was disqualified under Section 73CA(1)(vi). The petitioner filed this writ petition challenging the disqualification.
Acts & Sections
- Maharashtra Co-operative Societies Act, 1960: 73CA(1)(vi)
