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Case Number

W.P No. 4523 of 2008

Advocates

R.L Khapre
P.S Tidke
T.A Mirza, AGP

Judges

C.L Pangarkar, J.

Acts

section 78(1) of the Maharashtra Co-operative Societies Act
section 154 of the Maharashtra Co operative Societies Act
section 73 of the Maharashtra Co-operative Societies Act.
ARTICLE 226 CONSTITUTION OF INDIA
section 152 of the M.C.S Act
section 73(1 AB)

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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

The petitioner is a member of Hindusthan Nagari Sahakari Pat Sanstha Ltd., Bhandara. Respondent Nos. 5 to 16 were the elected Board of Directors (Committee) of that registered co‑operative society. The petitioner observed alleged irregularities by those directors and complained to the Assistant Registrar of Co‑operative Societies, Bhandara. The Assistant Registrar appointed Shri R.N. Vasu to enquire. The Enquiry Officer submitted a report dated 9‑2‑2007 finding multiple irregularities and noting that respondent directors had not furnished the bond required by section 73 of the Maharashtra Co‑operative Societies Act.

Following the enquiry, the Assistant Registrar issued notices, considered explanations and, invoking section 78(1) of the Maharashtra Co‑operative Societies Act, passed an order superseding the committee of respondent Nos. 5 to 16 and appointed an administrator. Respondent Nos. 5 to 16 challenged that order before the Divisional Joint Registrar under section 152 of the M.C.S. Act by way of appeal. The Joint Registrar allowed the appeal, disagreed with the Assistant Registrar's findings and quashed the Assistant Registrar's order. Aggrieved by the Joint Registrar's order, the petitioner filed the present writ petition in the High Court.

Legal Issues Presented

Whether the writ petition under Article 226 is maintainable when an alternative statutory remedy (revision to the State Government under section 154 of the Maharashtra Co‑operative Societies Act) is available against the order of the Joint Registrar.
Whether the Joint Registrar had jurisdiction to entertain and decide the appeal under section 152 where part of the Assistant Registrar's action related to provisions of section 73(1AB) (non‑furnishing of bonds) and part to section 78 (supersession and appointment of administrator).
Whether the Assistant Registrar's actions under section 73(1AB) and/or section 78 resulted in an order that was patently illegal or without jurisdiction such that the High Court should entertain a writ despite the available statutory remedies.

Arguments of the Parties

Respondents' Arguments

The respondents contended that the writ petition was not maintainable because an efficacious and alternative remedy was available under section 154 of the Maharashtra Co‑operative Societies Act by way of revision to the State Government against an order of the Joint Registrar.
It was emphasised that the Assistant Registrar had passed an order under section 78 and that an appeal lay to the Joint Registrar under section 152; as against an order of the Joint Registrar, revision lies under section 154(2).

Petitioner's Arguments

The petitioner contended that a writ petition was maintainable because the order was patently illegal and without jurisdiction.
Specifically, the petitioner argued that the Assistant Registrar had also passed an order under section 73(1AB) (relating to failure to execute bonds) which is not an order under section 78; hence the Joint Registrar could not have entertained or set aside that part of the order under section 152. In other words, the Joint Registrar allegedly lacked jurisdiction to quash the section 73(1AB) consequences while hearing an appeal under section 152.
The petitioner further argued that revision under section 154 is not an adequate remedy because the Government may or may not entertain a revision application.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Smt. Kuntesh Gupta v. MGT of Hindu Kanya Mahavidyalaya (Supreme Court Service Rulings Vol. 2 129)	Cited by petitioner (context: cases dealing with jurisdictional or related issues relied upon by petitioner).	The Court held that these decisions have no bearing on the present case because the present order was not one "without jurisdiction."
Whirlpool Corporation v. Registrar of Trade Marks, Mumbai ((1998) 8 SCC 1; AIR 1999 SC 22)	Cited by petitioner alongside other Supreme Court decisions relevant to jurisdictional challenges.	The Court found this decision inapplicable to the facts because the impugned order was not without jurisdiction.
Harbanslal Sahnia v. Indian Oil Corpn. Ltd. ((2003) 2 SCC 107)	States three contingencies where a High Court may entertain a writ: (i) enforcement of fundamental rights; (ii) failure of natural justice; (iii) orders wholly without jurisdiction or challenge to vires of an Act.	The Court applied the three‑contingency test and found that none of these contingencies existed in the instant case.
Balasaheb Kondiram Pawar v. State of Maharashtra (1999 (3) Mh.L.J 982)	A precedent cited by the petitioner indicating that section 154 was "potential" and not necessarily an effective alternative remedy; suggesting writ petitions may be maintainable in some circumstances.	The Court quoted the decision but ultimately concluded (on the facts and statutory reading) that section 154 does provide an adequate remedy and is not, in this case, a bar to dismissal of the writ.
Prabhu Shriram Sahakari Dudh Vyawasaik Sanstha Maryadit, Ahmednagar v. State of Maharashtra (1999 (1) Mh.L.J 619)	Explains the hierarchical appellate scheme under sections 152 and 154 and that full‑fledged appellate authorities and revisionary powers are prescribed by the Act.	The Court relied on the principles reflected in this decision to support that statutory fora exist with adequate powers and hierarchy under the Act.
A.P. Foods v. S. Samuel ((2006) 5 SCC 469)	Affirms the principle that a writ under Article 226 should not be entertained when a statutory remedy is available, absent exceptional circumstances.	The Court applied this principle to hold that, as a statutory revision to the State is available and no exceptional circumstances exist, the writ petition should not be entertained.

Court's Reasoning and Analysis

The Court proceeded by addressing, in sequence, (A) the jurisdictional challenge concerning the Joint Registrar's competence to entertain the appeal; and (B) the objection that an alternative remedy exists making the writ non‑maintainable.

A. Jurisdictional issue regarding sections 73(1AB) and 78

The petitioner argued that the Assistant Registrar had enacted consequences under section 73(1AB) (non‑execution of the prescribed bond within fifteen days resulting in a deeming fiction that the member has vacated office) and had separately passed an order under section 78; the petitioner contended that an appeal under section 152 could only be against orders under section 78 and therefore the Joint Registrar lacked jurisdiction to set aside the section 73(1AB) consequences.

The Court analysed the language and effect of section 73(1AB) and observed that the provision creates a deeming fiction: failure to execute the bond within fifteen days results in the member being "deemed to have vacated his office." The Court emphasised that such vacation occurs by operation of law and does not require a further separate administrative order of vacation. The Registrar's role is to verify whether the bonds were in fact executed within the stipulated period; only after verification that the office had fallen vacant could the Registrar proceed under section 78.

The Court concluded there is effectively only one order under section 78 to address the contingency where members have ceased to hold office or stand disqualified (including where deemed vacation has occurred under section 73(1AB)). There is no separate order contemplated by the statute under section 73(1AB). Hence, the Assistant Registrar necessarily framed the final action as an order under section 78 and an appeal under section 152 was appropriately entertained by the Joint Registrar. On that basis, the Court found the Joint Registrar's order was not without jurisdiction.

B. Adequacy of statutory remedy under section 154

The respondents contended that the writ petition was not maintainable because section 154(2) provides a specific revisionary remedy to the State Government against decisions of the Joint Registrar. The Court examined the text of section 154(2), which provides for revision to the State Government where the decision or order is passed by a Registrar, Additional Registrar or Joint Registrar.

The petitioner argued section 154 was inadequate because the Government may elect not to entertain revision. The Court reviewed precedent and statutory scheme and disagreed with the contention that section 154 is an inadequate remedy for the present case. The Court reiterated the settled principle (citing A.P. Foods v. S. Samuel and other authorities) that writ jurisdiction under Article 226 should not be exercised when a complete and efficacious statutory remedy is available unless exceptional circumstances exist.

Applying the principles, the Court found that a revision to the State Government under section 154(2) is available, adequate and efficacious, and that none of the exceptional situations (enforcement of fundamental rights, failure of natural justice, orders wholly without jurisdiction or vires challenges) identified in the cited Supreme Court authority existed on the facts of this case.

Holding and Implications

Holding: The writ petition is dismissed. The Court concluded that the Joint Registrar had jurisdiction to entertain the appeal under section 152 and that a statutory remedy by way of revision under section 154(2) to the State Government is available and adequate; therefore the High Court should not entertain the writ petition.

Implications:

The direct effect is that the order of the Divisional Joint Registrar allowing the appeal of respondent Nos. 5 to 16 and quashing the Assistant Registrar's order remains unimpaired by this writ; the writ petition is dismissed.
The petitioner is left with the statutory route of revision under section 154(2) to the State Government if he wishes to challenge the Joint Registrar's order; the Court held that this statutory forum is the appropriate and adequate forum in the absence of exceptional circumstances.
The opinion does not purport to lay down any novel precedent beyond application of the settled principle that the High Court should not exercise writ jurisdiction where a efficacious statutory remedy exists; the Court applied existing authorities to the facts and dismissed the petition.

Petition dismissed.

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Dilip v. Divisional Joint Registrar, Co-Operative Societies

1. Rule. Rule is made returnable forthwith. Heard finally with consent of the parties.

2. This writ petition is preferred against the order passed by the Divisional Joint Registrar, Co-operative Societies, Nagpur, whereby he allowed the appeal preferred by respondent Nos. 5 to 16.

3. The facts giving rise to this petition are as follows—

The petitioner is the member of the society known as Hindusthan Nagari Sahakari Pat Sanstha Ltd. Bhandara. Respondents Nos. 5 to 16 are the Board of Directors of the Co-operative Society. The said Society is registered. The petitioner, who is the member of the said Society noticed certain irregularities committed by respondents No. 5 to 16. Therefore, he made complaint to the Assistant Registrar of Co-operative Society, Bhandara. The Assistant Registrar Co-operative Societies accordingly appointed Shri R.N Vasu to submit enquiry report. Said Vasu conducted an enquiry and submitted report on 9-2-2007 in which he found many irregularities. The Enquiry Officer also found that the respondent Nos. 5 to 16 have not furnished a bond as contemplated by section 73 of the Maharashtra Co-operative Societies Act. In pursuance to the said report, respondent No. 2 i.e the Assistant Registrar issued a notice to respondents No. 5 to 16 calling their explanation. They submitted their explanation. After considering the explanation as well as the complaint and after giving opportunities to the parties, respondent No. 2 passed an order under section 78(1) of the Maharashtra Co-operative Societies Act superseding the Committee of respondents No. 5 to 16 and appointing an administrator. The said order was challenged before the Divisional Joint Registrar by respondents No. 5 to 16 under section 152 of the M.C.S Act by way of appeal.

4. The Joint Registrar disagreeing with the finding of the Assistant Registrar allowed the appeal and quashed the order and being aggrieved by that, this writ petition has been preferred.

5. I have heard the learned counsel for the petitioner and the respondents.

6. The foremost contention that is raised by the learned counsel for the respondents is that the writ petition in the instant case is not maintainable since an efficacious remedy is available under section 154 of the Maharashtra Co— operative Societies Act by way of revision. Shri Tidke, learned counsel for the respondents submits that the Assistant Registrar passed an order under section 78 of the Act and the petitioner had preferred an appeal under section 152 of the Act before the Joint Registrar. He submits that as against an order of the Joint Registrar, a revision lies under section 154(2) of the Act. Section 154 reads as follows—

“154(2) - Under this section, the revision shall lie to the State Government if the decision or order is passed by the Registrar, the Additional Registrar or a Joint Registrar, and to the Registrar if passed by any other officer.”

7. It is clear from the section that a revision could be filed before the Government against the order of the Joint Registrar. Shri Khapre, learned counsel for the petitioner submits that even if a remedy by way of revision may be available that does not necessarily bar a writ petition. He contends that when order passed is patently illegal and without jurisdiction, a writ petition does lie. He contends that an appeal to the Joint Registrar could lie only as against the order under section 78 of the Act and the Assistant Registrar had also passed an order under section 73(1AB) of the Act which is not an order under section 78 and therefore, the Joint Registrar could not have entertained an appeal as against that part of the order. It is clear from section 152 that an appeal against order under section 73(1AB) is not provided under section 152. Learned counsel for the petitioner submits that Joint Registrar therefore had no jurisdiction to set aside the order under section 73(1 AB) while entertaining an appeal under section 152. I do not find substance in the contention. Section 73(1AB) reads as follows—

“73(1AB) The members of the Committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society. Every such member shall execute a bond to that effect within fifteen days of his assuming the office, in the form as specified by the State Government by general or special order. The member who fails to execute such bond within the specified period shall be deemed to have vacated his office as a member of the Committee.

8. The section says that where the elected members fail to furnish bond within fifteen days of assuming the office, they shall be deemed to have vacated the office. It is by deeming fiction that the member loses his office and right to hold it. In fact, no order of such vacation as such would be necessary. By operation of law they cease to hold such office. The office of the member, therefore, falls vacant on 16th day upon failure to execute the bond. There is, however, no doubt that the Assistant Registrar will have to verify the position as to whether such bond was executed and furnished or not within stipulated time to take further necessary steps. Such verification would all the more be necessary to confirm that the office has fallen vacant. In the instant case, none of the members had furnished bond and as such office had fallen vacant. This fact that the respondent had failed to execute the bond came to the notice of the Registrar only after he took inspection. He could not have, therefore, taken any action under section 78 unless it was confirmed that the bonds were not furnished within the stipulated time. After it comes to the knowledge of the Registrar that the said post of the member has fallen vacant and the member ceases to hold office, the Registrar can then alone proceed under section 78 of the Act. Beside section 78 of the Act, there is no other provision in the Act to take care of contingencies where all members of the Committee are deemed to have vacated the office. Section 78 says that when a member of the committee has ceased to discharge his function or when such member stands disqualified, the Registrar is to remove them and appoint another committee and administrator. Thus, whenever a disqualification occurs under section 73(1AB), the Registrar would no doubt be required to take steps under section 78 of the Act. There is, therefore, to my mind only one order under section 78 after the deemed vacation of the office. There is no separate order under section 73(1AB) and no separate order under the said section is contemplated. The Registrar had, therefore, necessarily passed an order under section 78 only. Consequently an appeal under section 152 was rightly entertained by the Registrar. I have already pointed out that the revision against an order of the Joint Registrar can be filed before the Government.

9. This takes me to the contention whether the writ petition should, therefore, be entertained or not. According to Shri Khapre, learned counsel for the petitioner, since part of the order of Joint Registrar is without jurisdiction, the writ petition is maintainable. The foregoing discussions would show that there is only one order under section 78 and no order under section 73(1AB) of the Act and I have also found that the appeal was rightly entertained by the Joint Registrar. The order passed by him is, therefore, not without jurisdiction. Mr. Khapre relied on the decision of the Supreme Court reported in Supreme Court Service Rulings (Vol. 2) 129, Dr. (Smt.) Kuntesh Gupta v. MGT of Hindu Kanya Mahavidyalaya and (1998) 8 SCC 1 : AIR 1999 SC 22, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai. These decisions have no bearing on the case at hand as the order is not one without jurisdiction. Similarly in a decision reported in (2003) 2 SCC 107, Harbanslal Sahnia v. Indian Oil Corpn. Ltd., the Supreme Courts holds that the High Court may entertain the writ petition in three contingencies. (i) Where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where orders or proceedings are wholly without jurisdiction or the where virus of an Act is challenged. None of the above contingencies exists in the case at hand.

10. Shri Khapre, learned counsel for the petitioner, contends before me that the revision under section 154 of the Act is not an adequate remedy. He contends that if section 154 is read, it would be clear that the Government may or may not entertain a revision. I am unable to agree to the submission. Revisional power can be exercised by the State of its own motion or upon an application and it can decide the legality and propriety of the decision under challenge. Shri Khapre had relied upon a decision of this Court reported in 1999 (3) Mh.L.J 982, Balasaheb Kondiram Pawar v. State of Maharashtra. The Court observes as follows—

5. It is, therefore, clear that the party cannot claim as a matter of right to move the Government for revision of the impugned orders. If that is so, section 154 cannot be called as an alternative and efficacious remedy. The Supreme Court has indeed, a very succinctly described section 154- being potential but not compulsive. This power is reposed in Government to intervene to do justice when occasion demands it and of the occasion for its exercise, the Government is made the sole Judge. According to me, therefore, the present writ petition is maintainable.”

The very same learned judge while dealing with the provisions of section 152 and 154 of the Act observes as follows in another decision reported in 1999 (1) Mh.L.J 619, Prabhu Shriram Sahakari Dudh Vyawasaik Sanstha Maryadit, Ahmednagar v. State of Maharashtra.

“4. ……… 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.”

11. Upon going through the section itself, it is clear that an adequate remedy by way of revision is available. The authority i.e the State can certainly go into the question of legality and propriety of the order under challenge. I do not find upon going through the scope of section 154 that the remedy provided is in any way inadequate. The Supreme Court in a recent decision reported in (2006) 5 SCC 469, A.P Foods v. S. Samuel, observes as follows—

6. In a catena of decisions it has been held that a writ petition under Article 226 of the Constitution of India should not be entertained when the statutory remedy is available under the Act, unless exceptional circumstances are made out.

12. A bare reading of section 22 of the Act makes the position clear that where the dispute arises between an employer and employees with respect to the bonus payable under the Act or with respect to the application of the Act in public sector then such dispute shall be deemed to be an industrial dispute within the meaning of the ID Act.

13. As disputed questions of fact were involved, and alternative remedy is available under the ID Act, the High Court should not have entertained the writ petition, and should have directed the writ petitioners to avail the statutory remedy.”

12. Thus, the clear ratio is that the Court should not entertain when statutory remedy is available. We have seen that the revision does lie to the State Government against the order of Joint Registrar. The remedy is both adequate and efficacious. When a particular forum is provided that remedy must be availed. The restraint has to be observed or else the High Court would be flooded with litigation and the very purpose of creating alternate forum would be defeated. That has to be avoided and the forum created under the Act must be left to deal with the disputes. Therefore, I do not find that the writ petition can be entertained. Same is dismissed.

Petition dismissed.

Dilip v. Divisional Joint Registrar, Co-Operative Societies

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Respondents' Arguments

Petitioner's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

A. Jurisdictional issue regarding sections 73(1AB) and 78

B. Adequacy of statutory remedy under section 154

Holding and Implications

Dilip v. Divisional Joint Registrar, Co-Operative Societies

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