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Case Number

W.P No. 5080 of 1996

Attorney(S)

S.L Bhapkar
A.G.P
M.Y Deshmukh
V.S Bedre

Judges

R.J Kochar, J.

Acts

3 society.4. Section 4 of the Maharashtra Co-operative Societies Act, 1960
sections 152 and 154 of the Maharashtra Co-operative Societies Act, 1960.
sections 152 and 154 of the Maharashtra Co-operative Societies Act
ARTICLE 226 A CONSTITUTION OF INDIA
ARTICLE 227 CONSTITUTION OF INDIA
Maharashtra Co-operative Societies Act

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The petitioner is a co-operative society registered under the Maharashtra Co-operative Societies Act on 26-3-1993 and functioning in the village Dahigaon (population 1,147; 197 families). The petitioner alleged it collects approximately 279 litres of milk from the village and that another society collects an average of 230 litres, leaving a total village availability of about 630 litres. The petitioner challenged administrative actions permitting and later registering a proposed third society (respondent No. 3) to collect milk in the same village.

The petitioner filed a petition under Article 227 of the Constitution of India read with Articles 14 and 19(1)(c) and (g) to challenge:

an order dated 3-10-1996 granting permission to respondent No. 3 to open a bank account and start milk collection; and
a subsequent decision dated 19-10-1996 by the Assistant Registrar granting registration to respondent No. 3.

The petitioner also challenged an order dated 18-3-1996 by the Minister for State relaxing milk-collection-related conditions. The petitioner alleged that the grant of permission and registration was contrary to Government Resolution(s) (dated 2-4-1993 and modified 29-4-1995), and that the actions were mala fide and taken under political pressure from the local MLA (respondent No. 4).

Respondent No. 3 contended that it legitimately collects milk (since 23-5-1996), that the collection did not adversely affect the petitioner, supported the authorities' decisions (including the Minister's relaxation), and argued that alternative statutory remedies under sections 152 and 154 of the Maharashtra Co-operative Societies Act, 1960 were available and should have been invoked instead of this writ.

The High Court heard the matter and delivered the impugned opinion dismissing the petition.

Legal Issues Presented

Whether the permission dated 3-10-1996 and the registration dated 19-10-1996 granted to respondent No. 3 were legally sustainable under the Maharashtra Co-operative Societies Act given the Government Resolutions governing milk collection.
Whether the Minister had power to relax the milk-collection conditions prescribed in the Government Resolution(s) (challenge to order dated 18-3-1996).
Whether the decisions impugned were tainted by mala fides or extraneous political pressure from the local MLA (respondent No. 4).
Whether the writ petition under Article 227 was maintainable in view of alternative statutory remedies available under sections 152 (appeal) and 154 (revision) of the Maharashtra Co-operative Societies Act, 1960.

Arguments of the Parties

Petitioner’s Arguments

The Government Resolution dated 2-4-1993 (and its subsequent modification dated 29-4-1995) leaves no scope for registering a third society to collect milk in the village; the statutory criteria for collection were not satisfied.
The Assistant Registrar's permission (3-10-1996) and subsequent registration (19-10-1996) of respondent No. 3 were beyond the scope of the Government Resolution and were mala fide, granted under political pressure from the local MLA (respondent No. 4).
The Minister had no power to relax the milk-collection conditions prescribed by the Government Resolution.

Respondent No. 3’s Arguments

The petitioner and the other proposed society (Sitamai Co-operative Society) are collusive and seek to block competition; the other proposed society is nominal to prevent new entrants.
Respondent No. 3 was already collecting adequate quantities of milk and the petitioner was not adversely affected by its operations.
The decisions of the Assistant Registrar, Registrar and the Minister (including the relaxation of conditions) were based on reports (e.g., of the Milk Inspector) and other material; there is nothing objectionable in those orders.
Under section 7 of the Act, the State Government has power to exempt societies from conditions; the authorities had jurisdiction to register respondent No. 3.
The petitioners should have invoked alternative statutory remedies provided by sections 152 and 154 of the Maharashtra Co-operative Societies Act rather than the writ forum; therefore the writ petition was not maintainable. Also, respondent No. 3 pointed to delay, noting it started collection on 23-5-1996 while the petition was filed on 9-10-1996.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Miss Maneck Custodji Surjarji v. Sarqfazali Nawabali Mirza, (1977) 1 SCC 227 : AIR 1976 SC 2446	That jurisdiction under Article 227 of the Constitution is extraordinary, to be exercised sparingly and not as an appellate jurisdiction.	The Court relied on this precedent to hold that Article 227 cannot be used to supplant statutory appeal/revision mechanisms; accordingly, the writ petition could be rejected because effective alternative remedies under the Act (sections 152 and 154) were available.

Court's Reasoning and Analysis

The Court framed its analysis by reference to the relevant provisions of the Maharashtra Co-operative Societies Act and the proper role of the High Court under Article 227:

Purpose and scope of section 4: The Court observed that section 4 permits registration of societies promoting economic interest or general welfare according to co-operative principles. The proviso to section 4 prohibits registration if a society is likely to be economically unsound or adverse to the co-operative movement or contrary to State policy. There is no numerical restriction on the number of societies; the test is public interest, economic soundness and furtherance of co-operative principles (not monopolistic tendencies).
Registration framework: The Court noted that sections 6, 8 and 9 set out registration conditions and procedure; section 9 authorises the Registrar to grant registration if conditions are satisfied.
Availability of statutory remedies: Orders under section 9 (and decisions under section 4) are challengeable by appeal under section 152 (which provides a full-fledged appellate forum with regular appellate powers) and by revision under section 154 (vesting revisionary powers in the State Government). The Act creates a detailed hierarchy for appeal and revision.
Factual nature of dispute: The impugned matters involved primarily questions of fact — amounts of milk collected by different societies and their practical impact. The Court held that such factual disputes are for the appellate/revisional authorities empowered by the Act, not for the High Court in its extraordinary jurisdiction.
Role of political representation: The Court rejected the petitioner's contention that involvement by the local MLA rendered the decisions mala fide. The Court reasoned that representation by an MLA on behalf of constituents is not improper and, standing alone, does not convert an administrative decision into one tainted by malice.
Article 227 cannot substitute as appellate forum: Relying on the Supreme Court authority cited, the Court emphasised that Article 227 is an extraordinary jurisdiction to be exercised sparingly and not as an alternative to statutory appeal mechanisms. Because the petitioner had not used the available and efficacious statutory remedies (sections 152/154) and had instead invoked Article 227, the writ petition was liable to be rejected on maintainability grounds.
Merits considered briefly: Independently of the maintainability point, the Court found no illegality or perversity in the authorities' orders after considering the material before them (reports and figures) and therefore saw no basis for intervention in the exercise of extraordinary writ jurisdiction.

Holding and Implications

Holding: The writ petition is dismissed.

Implications and immediate consequences as stated by the Court:

The dismissal was grounded primarily on the availability of alternative statutory remedies under sections 152 and 154 of the Maharashtra Co-operative Societies Act, 1960 and the principle that Article 227 is an extraordinary jurisdiction not to be used as an appellate substitute.
The Court further held that, on merits, there was no illegality or perversity in the impugned orders and no demonstrable mala fide or capricious action by the registering authorities, the Minister, or the local MLA.
Direct effect: The petitioner’s challenge to the orders (permission to open bank account/collect milk and the subsequent registration) was rejected; the opinion records "No order as to costs."
The Court did not state that it was creating any new legal precedent beyond applying established principles regarding the limited scope of Article 227 and the availability of statutory appeal/revision remedies under the Act.

Final Entry: Petition dismissed.

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Prabhu Shriram Sahakari Dudh Vyawasaik Sanstha Maryadit, Ahmednagar v. State Of Maharashtra And Others

1. Rule. By consent rule made returnable forthwith.

2. The petitioner society has filed the present petition under Article 227 of the Constitution of India read with Articles 14, 19(1)(c)(g) to challenge the permission dated 3-10-1996 granted to a proposed co-operative society i.e the respondent No. 3. The petitioner society was registered under the Maharashtra Co-operative Societies Act on 26-3-1993. The society's functioning is in the village Dahigaon having population of 1147 of 197 families. The petitioner society contends that it is collecting milk approximately 279 liters from the village. The petitioner has further stated that there is another society which is also collecting milk on an average 230 liters. This latter society is also a proposed society from the said village. According to the petitioner, the total availability of the milk in the village is approximately 630 liters. On the basis of the Government Resolution dated 2-4-1993, there is no scope for registering the third society. According to the petitioner, permission to the third proposed society cannot be granted as the criteria prescribed in the said Government resolution for collection of milk are not satisfied. The petitioner society contends that the decision to grant such permission to the respondent No. 3 is not only beyond the scope of the Government Resolution dated 2-4-1993 but, is mala fide and under the political pressure from the local M.L.A respondent No. 4 herein. According to the petitioner the conditions prescribed in the Government Resolution were relaxed for collection of the milk. The petitioner had initially challenged the order dated 3rd October, 1996 granting permission to the respondent No. 3 to open Bank Account and start milk collection. It appears that after the writ petition was filed, the respondent No. 3 was granted registration on 19-10-1996 by the respondent No. 2. The petitioner has challenged by amendment, the decision of the respondent No. 2 the Assistant Registrar to grant registration to the respondent No. 3 society on 19-10-1996. The petitioner has amended petition after leave granted by this Court. The petitioner challenged both these decisions of the Assistant Registrar i.e the order dated 3rd October, 1996 granting permission to the respondent No. 3 society to open Bank account and collect milk and also the decision dated 19-10-1996 to register the respondent No. 3 society under the provisions of the Act. The petitioner also challenged the order dated 18-3-1996 passed by the respondent No. 5 the Minister for State relaxing the conditions for the respondent No. 3 society for collection of milk. According to the petitioner, the Minister had no powers to relax the milk collection conditions prescribed in the Government resolution dated 2-4-1993 and subsequently, modified by another Government Resolution dated 29-4-1995. The main thrust of the petitioner's opposition to the registration of the respondent No. 3 society in the village is that of political pressure and influence, in particular the local M.L.A respondent No. 4. The petitioner has, therefore, based its case that in spite of there being no scope for registration of third society, the authorities have registered the third society for collection of milk solely for the extraneous reasons i.e political pressure.

3. The main contesting society i.e respondent No. 3 has submitted that the petitioner society and the another proposed society i.e Sitamai Co-operative Society are hand-in-gloves with each other and there is only difference in the name. The second proposed society is nominal to prevent a third society to come in the village. On behalf of the respondent No. 3 it is further submitted that they are collecting adequate milk and the petitioner society will not be adversely affected at all. The respondent No. 3 has naturally supported the decisions of the authorities including the decision of the Minister who have relaxed the milk collection condition. The respondent No. 3 society has further submitted that looking at the present collection of the milk as recorded by the Federation, Ahmednagar Zilla Sahakari Doodh Vyavsaik Sangh, the third society was rightly registered and that under section 7 the State Government has power to exempt the society from any conditions. It is also submitted that the Minister, the Assistant Registrar as well as Registrar all have considered the report of the Milk Inspector and all other material from record and, there is nothing objectionable in the order of the authorities to register the respondent No. 3 society and also to grant permission to it to open Bank Account and collect milk. Apart from the merits, the respondent No. 3 has taken a serious exception to the maintainability of the very writ petition on the ground of alternative remedy available under sections 152 and 154 of the Maharashtra Co-operative Societies Act, 1960. According to the learned Advocate for the respondent No. 3 all the impugned orders dated 3rd October, 1996 passed by the Assistant Registrar, the order dated 18-10-1996 passed by the Minister and the order dated 19-10-1996 passed by the Assistant Registrar granting registration to the respondent No. 3 can be challenged under sections 152 and 154 of the Maharashtra Co-operative Societies Act and since there is statutory alternative remedy provided for, the present writ petition is not maintainable. It is also submitted that the respondent No. 3 society has been collecting milk from the village since 23-5-1996 while the petition is filed on 9-10-1996 and, therefore, it suffers from delay. Pursuant to the order dated 13-3-1996 passed by the Honourable Minister to relax the conditions of milk collection, the respondent No. 3 society had started collection of milk. The petitioner had not challenged the said order and the respondent No. 3 had already started collection of milk on a large scale successfully. To stop the functioning of respondent No. 3 society after such a long period is not proper, contends the learned Advocate for the respondent No. 3. It is further submitted on behalf of the respondent No. 3 that even at present they are collecting milk on a large scale without adversely affecting the petitioner society or its other proposed Seetamai Society. It is, therefore, submitted on behalf of the respondent No. 3 society that the present petition is filed to have its own monopoly in the village and to thwart the growth of the village and progress and prosperity of the villagers. According to third respondent, there is lot of scope and vacuum for the functioning of the respondent No. 3 society.

4. Section 4 of the Maharashtra Co-operative Societies Act, 1960 permits registration of a society having its objects, the promotion of economic interest or general welfare of its members or of the public in accordance with the co-operative principles or a society established with the object or facilitating the operations of any such society. Proviso to section 4 prohibits registration of any society if it is likely to be economically unsound or if the registration of such a society might have an adverse effect on development of the co-operative movement or it may be contrary to the policy directives which the State Government may from time to time issues. It is, therefore, clear from the bare reading of section 4 that the rule is to promote the growth of the co-operative movement in public interest and the exception is if such a registration of the society would be economically unsound and would have adverse effect on the co-operative movement and the public interest. There is no restriction in the said section for registration on the number of societies to be registered. The only principle which is to be observed by the authorities is that public interest should be safeguarded by considering the economical interest and general welfare of the members of the society and of the public at large. It is implicit in the section that co-operative principles must be enhanced and not any monopolistic system is to be encouraged. Section 6 prescribes conditions of registration which a proposed society has to satisfy. Section 8 prescribes for application for registration while section 9 authorises the registrar to grant registration to a proposed co-operative society if it satisfies the conditions and criteria prescribed under the Act. The orders passed by the Registrar under section 9 of the Act to register or not to register a co-operative society are challengeable under section 152 of the Act by filing an appeal. Section 152 provides for appeals against the orders or decisions under sections 4, 9 etc. (we are concerned with these two sections). Full-fledged appellate authorities are prescribed and they are armed with the regular powers of appellate forums. A complete hierarchy is also given under the said section. The decisions or orders or awards passed are treated as final subject to the provisions for revision in the Act. Similarly, section 154 has vested the State Government with the revisionary powers. Even in this section, minute hierarchy is created with the powers.

5. In the present case, the petitioner society is challenging the orders of the authorities passed under sections 4, 8 and 9 of the Act. All these orders are based on bare and simple questions of facts and figures i.e the collection of milk by the different societies. In the aforesaid circumstances, any party which is aggrieved by any order or decision under the aforesaid sections has to resort to the appeal remedy as appellate authority can go into all the questions of facts and figures. It is not the function of High Court to consider that how much milk is collected by which society and what is the scope in the village. It cannot be said that merely because the local M.L.A in the interest of the local village people, moves in the matter, the decisions of the authorities become tainted with mala fides and the orders of the authorities become mala fide. If the local M.L.A does not espouse the cause of his constituency, no one else would be in a better position to do so. I do not find anything wrong in the respondent No. 4 local M.L.A to have moved in the matter and to have represented the cause of the villagers for registration of third society in the village. It is for the local M.L.A to have assessed the situation in the village and to have represented the economic interest of the villagers before the registering authorities. It is for the local M.L.A to consider the welfare of the people of the village. He has to represent and attend the local causes and grievances of the people. In fact, it is his bounden duty to look after the interest of the villagers. The High Court exercising extraordinary jurisdiction under the Constitution cannot go into all these minute local questions of the people. I do not find that either local M.L.A or the registering authorities or the Minister was actuated with any legal malice or other capricious reasons to grant registration to the respondent No. 3 society. To resolve the local conflicts and to find amicable solutions for the local problems particularly, in the co-operative society matters, the legislature has wisely provided for internal machinery by way of providing of appeals and revisions in the matters of such problems which are to be considered by those very persons who are fully acquainted with the ground realities of the villages. It is, therefore, not permissible for any aggrieved party to bypass appeal and revisional provisions as they are the more efficacious remedies for the peculiar problems of the co-operative movement. Since the petitioner has not availed of the alternative and equally efficacious remedy and has rushed to file present petition purportedly under Article 227 of the Constitution of India, according to me, the writ petition deserves to be rejected on this ground alone. I am fully supported in this respect by a decision of Supreme Court reported in (1977) 1 SCC 227 : AIR 1976 SC 2446, between Miss Maneck Custodji Surjarji v. Sarqfazali Nawabali Mirza. The Supreme Court observed as under:

“The jurisdiction under Article 227 of the Constitution is an extraordinary jurisdiction which is to be exercised sparingly and in appropriate cases and it is not to be exercised as if it were an appellate jurisdiction or as if it gave unfettered and unrestricted power to the High Court to do whatever it liked.”

6. Even otherwise, I do not find any illegality or perversity in the impugned orders of the authorities. The authorities have considered the facts and figures before them and they have come to their own conclusions which cannot be gone into by the High Court in its extraordinary jurisdiction under Article 226 of the Constitution of India.

7. The writ petition is, therefore, dismissed. No order as to costs.

Petition dismissed.

Prabhu Shriram Sahak... v. State Of Maharashtra...