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Shree Siddheshwar Sahakari Sankar Karkhana Ltd. and anr. Vs. State of Maharashtra and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Constitution
CourtMumbai High Court
Decided On
Case NumberWrit Petn. Nos. 1418, 1419 and 1330 of 1981 and 735 and 1298 of 1983
Judge
Reported inAIR1984Bom81; ILR1984Bom1784; 1983MhLJ719
ActsMaharashtra Co-operative Societies Act, 1960 - Sections 2(20), 73A(1) and 73A(5); Maharashtra Co-operative Societies (Amendment) Act, 1961; Constitution of India - Article 14
AppellantShree Siddheshwar Sahakari Sankar Karkhana Ltd. and anr.
RespondentState of Maharashtra and anr.
Appellant AdvocateR. Naik,;Y.R. Naik,;C.J. Sawant,;Ajit Shah,;M.A. Rane,;A.D. Hon and;Dilip B. Bhonsale in W.P. No. 1298 of 1983, Advs.
Respondent AdvocateD.P. Hegde, Addl. Govt. Pleader,;Rane,;R.N. Dhande and;in W.P. No. 735 of 1983, Advs.
Excerpt:
a) it was adjudged that provision 73a(5) of the maharashtra co-operative societies act, 1960 is mandatory and expressly provides that a designated officer ceases to be such after the expiration of a period of six years from the time when he became a designated officer and for three years thereafter he was barred from again becoming an authorized officer.;b) it was held perfectly permissible to refer to the objects and reasons of the bill in order to find out what was the mischief, which was sought to be prevented or remedied by the legislature by enacting a particular provision.;c) the case discussed over the object of section 73a (1) and (5) of the maharashtra co-operative societies act, 1960- it was found that the object of enactment of section 73a (1) and (5) is to prevent the.....chandurkar, actg. c.j.1. in this writ petition no. 1418 of 1981 under art. 226 of the constitution, the question raised relates to the constitutional validity of s. 73a(1) and (5) of the maharashtra cooperative societies act, 1960 (hereinafter referred to as 'the act'). this question also arises in writ petitions nos. 1419 of 1981 and 1330 of 1981 and two other petitions, namely, writ petitions nos. 735 of 1983 and 1298 of 1983. counsel appearing in these petitions were, therefore, also heard on the question referred to above and these petitions are being disposed of by this judgment.2. section 73 of the act provides that the management of every society shall vest in a committee, constituted in accordance with the act, the rules and by-laws, which shall exercise such powers and perform.....
Judgment:

Chandurkar, Actg. C.J.

1. In this Writ Petition No. 1418 of 1981 under Art. 226 of the Constitution, the question raised relates to the constitutional validity of S. 73A(1) and (5) of the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as 'the Act'). This question also arises in Writ Petitions Nos. 1419 of 1981 and 1330 of 1981 and two other petitions, namely, writ Petitions Nos. 735 of 1983 and 1298 of 1983. Counsel appearing in these petitions were, therefore, also heard on the question referred to above and these petitions are being disposed of by this judgment.

2. Section 73 of the Act provides that the management of every society shall vest in a committee, constituted in accordance with the Act, the Rules and By-laws, which shall exercise such powers and perform such duties as may be conferred or imposed respectively by the Act the Rules and the By-laws.

3. Rules have been framed under the Act and are known as the 'Maharashtra Co-operative Societies Rules, 1961 (hereinafter referred to as 'the Rules'). Under Rule 8 matters in respect of which bylaws are required to be made by the society are specified, Cl. (p) of the R. 8 (1) enables by-laws to be made in respect of 'the Chairman's powers, duties and functions and his removal on his losing support of the majority'. Cl. (o) enables by-laws to be made in respect of 'the mode of appointment either by election or otherwise and removal of members of the committee and other officer, if any their duties and powers'. It is common knowledge that all co-operative societies registered under the Act make bylaws dealing with the constitution of the Managing Committee of the Society. The petitioners in Writ Petition No. 1418 of 1981 are (1) Shree Siddheshwar Sahakari Sakhar Karkhana Ltd., Solapur, and (2) Madeppa Bandoppal Kadadi, who is the Chairman of the Board of Directors of petitioner No. 1 Society, which is a sugar factory engaged in the manufacture and processing of sugar by crushing sugarcane belonging to either its producer-members or outsiders. It is not necessary for us for the purposes of deciding the question raised in this petition to refer extensively to the constitution of the Board of Directors of petitioner No. 1 Society, but it is sufficient to mention that the Board of Directors has a Chairman who is paid an honorarium of Rs. 500/- per month and he has to attend to the day-to-day affairs of the society. Under by-law 34 (a) the Chairman and the Vice-Chairman of the Board of Directors have to be elected at the first meeting of the Board of Directors held after the election of members of the Board of Directors. In addition to the Board of Directors, there is also an Executive Committee of which the Chairman of the Board of Directors is the ex officio Chairman.

4. The Maharashtra Legislature passed in 1969 an Act called the Maharashtra Co-operative Societies (second Amendment) Act, 1969 (Act 27 of 1969) which came into force on 1st July 1971. It was by this Act that the provisions in S. 73A were introduced in the Act. S. 73A(1) and (2) of the Act provide as follows :-

5. The section and in Ss. 73C. 73D and 73E, 'a designated officer' and includes any other officer of the society as may be declared by the State government, by notification in the Official Gazette, to be a designated officer, but does not include any officer appointed or nominated by the State government or by the registrar.

6. No person shall, at the same time be or continue to be, a designated officer of more than one society falling in Category I or Category II or Category III of the categories mentioned below; and shall not be or continue to be a designated officer in more than two societies in the aggregate in the three categories:-

Category I.-Societies, the area of operation of which extends to the whole of the State.

Category II.-Societies the area of operation of which extends to the whole of the State.

but extends to Greater Bombay and the authorised share capital of which is more than Rs. 10 lakhs; or

but extends to one or more districts; or

is less than a district and the authorised share capital of which is more than Rs. 10 lakhs.

Category III.-Societies, the area of operation of which does not extend to the whole of a district but extends to one or more talukas, or the authorised share capital of which is not more than rs. 10 lakhs but is not less than Rs. 5 lakhs.' Under sub-sec. (2A of S. 73A, which is introduced by Maharashtra Act 3 of 1974, it was provided that if a question arises whether or not a society falls under any of the categories referred to in sub-sec. (2), such question shall be referred to and decided by the Registrar, and his decision shall be final. We are not concerned with sub-secs. (3) and (4) of the Act, but it may be mentioned that under sub-sec. (3) it was provided that if at the commencement of Act 27 of 1969 a person is a designated officer of more than two societies in the categories specified in sub-sec, (20 or of more than one society in the same category, then unless be resigns his office in the society or societies in excess of the number prescribed under sub-sec. (2) within a period of 90 days from the commencement of Act 27 of 1969, such person shall at the expiration of the said period, cease to be a designated officer of all such societies. Sub-sec. (4) deals with the consequences of any person becoming a designated officer of societies in excess of the number prescribed under sub-sec. (2) and it is provided that unless he resigns his office in the society or societies in excess of the said number within a period of 90 days from the date on which he is elected or was appointed a designated officer of more than permissible number of society or societies then he shall cease to be a designated officer in all such societies at the expiration of the period of 90 days. Sub-sec. (5), which is then relevant, reads as follows :-

'(5) No person shall be, or shall continue to be, a designated officer of any society of any of the categories referred to in sub-sec. (2), for a consecutive period of more than six years, and at the expiration of that period any such person shall cease to be a designated officer of that society, and shall not be eligible for being re-elected or re-appointed as a designated officer, until a period of three years has elapsed after the expiry of the aforesaid period of six years.

Explanation-for the purpose of this sub-section,-

in calculating the consecutive period of six years in office, any period for which the person concerned may have been such oficer, before the commencement of the Maharashtra Co-operative Societies (second Amendment) Act, 1969, shall be ignored.

if any person resigns his office as a designated officer at any time within twelve months of the date on which the consecutive period of six years would, but for his resignation, have been completed he shall be deemed to have completed the period of six years on his resignation.'

7. Now, so far as sub-sec. (1) of S. 73A is concerned, it defines what 'a designated officer' means for the purpose of Ss. 73A, 73C, 73D and 73E. a designated officer means under S. 73A(1) the Chairman and the President. Under the definition in s. 72A(1) a 'designated officer' also includes any other officer of the society as may be declared by the State government by notification in the official gazette to be a designated officer but does not include any officer appointed or nominated by the State Government or by the Registrar. There is thus power given to the State Government to include within the definition of a 'designated officer', other officers of the society, but an officer who is appointed or nominated by the State Government or by the registrar is not a designated officer under s. 73A(1). Now, under sub-sec. (2), a person can be a designated officer only in one society falling in category I or category II or category III which are mentioned in sub-sec. (2). But at the same time, it is provided that a person cannot be or cannot continue to be a designated office in more than two societies in the aggregate in the three categories specified in sub-sec. (2). So far as the present petitions are concerned, the Sakhar Karkhana are covered by cl. (c) of category II because the area of operation of the society is less than a district and the authorised share capital of the society is more than rs. 10 lakhs.

8. It must be pointed out at this stage that the officers in respect of who the powe to declare them as designated officers can be exercised by the State Government under s. 73A are the officers who fall within the definition of 'officer' in S. 2(20) of the Act which reads as follows :-

' 'Officer' means a person elected or appointed by a society to any office of such society according to its bylaws; and includes a Chairman, Vice-Chairman, President, vice-President, Managing Director, Manager, Secretary, Treasurer, Member of the committee and any other person elected or appointed under this Act, the rules or the bylaws, to give directions in regard to the business of such society.'

9. The pre-requisite for a person to be an officer under this definition is that he should have been elected or should have been appointed by a society to any office of the society according to its bylaws. The inclusive part of the definition refers to the different offices such as Chairman. Vice-Chairman, President, Vice-President, etc, and the last part of the inclusive part of the definition indicates that the criterion to decide whether a person, who does not fall within the specified categories of officer's can be an officer within the meaning of S. 2(2) of the Act is, whether he is elected appointed under the Act the Rules or the bye laws to give directions with regard to business of such society. The criterion, therefore, for determining whether a person is an 'officer' or not is whether he is elected or appointed to give directions in regard to the business of such society.

10. It is common ground that the power under s. 73A to include any other officer of the society as designated officer has to be exercised in respect of a person who falls within the definition of 'officer' in s. 2(20) of the Act.

11. The provisions of sub-sec (5) of S. 73A, with which we are also concerned, are in the nature of a bar against an authorised officer continuing to be such for a consecutive period of more than six years. The provision is of a mandatory character and expressly provides that on the expiration of a period of six years, such person shall cease to be a designated officer of a society. There is a further bar created that such person shall not be eligible for being re-elected or re-appointed as a designated officer until a period of three years has elapsed after the expiry of the afore said period of six years. The effect of sub-sec. (5) is, therefore, twofold, namely, that a designated officer ceases to be such after the expiration of a period of six years from the time when he became a designated officer and for three years thereafter he is barred from again becoming an authorised officer. In other words, if the 'authorised officer' in question is a Chairman of the society, then he ceases to be a Chairman on the expiry of a period of six years from the date of his election and for a period of three years thereafter he cannot again stand for an election to an office, the holder of which will become an 'authorised officer' under S. 73A(1) of the Act.

12. Now, petitioner No. 2 in Writ Petition No. 1418 of 1981 was elected for the first time as a Chairman of the Society on 2nd July 1969. The first regular elections of the Chairman and the Board of Directors took place in Sept. 1973. That was initially for a period of three years, but by Act No. 36 of 1975 which came into force with effect from 19th Feb. 1976, this period was changed to five years. The petitioners being apprehensive that petitioner No. 2 would cease to be a designated officer, namely, the Chairman, has filed petition No. 1418 of 1981 for a declaration that the provisions of S. 73A(1) and S. 73A(5) are violative of Arts. 14 and 19 of the Constitution and that they suffer from the vice of excessive delegation in so far as S. 73A(1) was concerned. The relief sought also was that the respondents, namely, the State of Maharashtra and the Commissioner for Co-operative Societies should be prohibited from removing petitioner No. 2 as a designated officer under S. 73A(5) of the Act. Though in the petition, the provisions of s. 73A(1) and (5) were challenged on the ground of their being volatile of Art. 300A of the Constitution, that challenge was not canvassed before us.

13. Dr. Naik, the learned counsel appearing on behalf of the petitioners, has contended that in the definition of 'officer' in S. 2(20) of the Act, the Legislature has collected several categories of persons but that out of these, the Legislature has picked up only the President and the Chairman while making the substantive provision in s. 73A(1) and therefore, s. 73A(1) is violative of Art. 14 of the Constitution. In so far as the provision in s. 73A(1) empowering the State government to include any other officer of the Society as a designated officer is concerned, the argument was that this is a naked arbitrary power given to the State Government which is without any guidelines and further since the relevant part of S. 73A(1) cannot be severed from the other part of S. 73A(1), the entire provision of S. 73A(1) must be declared as ultra vires.

14. More or less the same argument has been advanced by Mr. Rane on behalf of the respondent in Writ Petition No. 735 of 1983. Mr. Rane's argument was that the classification made, namely, the Chairman and the President as well as the other persons who were notified as designated officers such as Vice-Chairman, Vice-President, Secretary, Managing Director by notification dt. 29th July 1971 does not bring together persons of the same character as these persons do not belong to the same class. The argument was that powers and functions of the same officer may differ from society to society and even as between the Chairman and the President, the functions may not be similar, with the result that persons of different character have been herded together, but they are treated alike and consequently, the provision in s. 73A(1) of the Act must be struck down as violative of Art. 14. Mr. Rane had also argued that were guidelines prescribed by the Legislature on which the State Government can exercise its power to add to the list of designated officers mentioned in s. 73A.

15. It may be stated at this stage that by a notification published in the Maharashtra Government Gazette dt. 29th July 1971, for the purposes of a S. 73A(1) the following persons have been notified as designated officers :-

(i) Vice-Chairman.

Vice-President,

Secretary, additional secretary on the Joint Secretary when he is a salaried employee of the society, and

the Managing Director or Join Managing Director when he is a salaried employee of the society.

16. It is necessary at this stage to refer to the purpose for which the Legislature thought it necessary to enact the provisions in S. 73A. It is perfectly the provisions to refer to the Objects and, Reasons of the Bill in order to find out, what was the mischief which was sought to be prevented or remedied by the Legislature by enacting a particular provision. The statement of Objects and reasons of Bill No. 10 of 1969, which came to be enacted as Maharashtra Act 27 of 1969, is to be found in Part V of the Maharashtra Government Gazette dt. 27th March 1969 at p. 103. The relevant clause reads :

'Clause 12.- In the Co-operative movement in this State a group of persons have been holding the key positions in several important co-operative institutions simultaneously and for long periods, with the desired extent and the movement is tending to become a close preserve of a few individuals. To check this unhealthy tendency and to give a more democratic character to the co-operative instituations, it is necessary to prescribe certain limitations in the Statute itself. Accordingly, it has been proposed that a person should not hold an important office like Chairman or President in more than one society at each of the three levels. Viz. Apex, District and Taluka level, Similarly, it has been proposed that a person should not hold such office at more than two levels at the same time. It is also proposed to provide that a person should not be a designated officer of any such society for more than six consecutive years.'

17. The statement made in the Objects and Reasons, therefore, indicates that the Legislature took note of the fact that a group of persons has been holding key positions in several co-operative institutions simultaneously and for long periods with the result that new leadership was not being built up to the desired extent and the movement tended to become the preserve of a few individuals. That is why it was thought necessary that the tenure of persons holding certain offices should be restricted and to begin with, it was enacted that the office of Chairman or President in more than one society at each of the three levels, namely, apex district and taluka levels should not be held by the same person and it was further thought necessary to prescribed that a person should not be designated officer of any such society for more than six consecutive years.

18. The whole object of enactment of S. 73(1) and (5), therefore, was to prevent the co-operative societies becoming a preserve of a few individuals because for a long time, the same group of persons dominated the co-operative societies. The reasonable period during which the person could be allowed to continue to hold the office of a designated officer was determined by the Legislature at six years. Sub-sec (5) of S. 73A thus apart from providing that a person shall not continue to be a designated officer for more than the consecutive period of six years, had therefore necessarily to provide for an automatic termination of the status as on authorised officer at the expiry of the said period of six years.

19. Now, so far as the concept of discrimination violating the provisions of Art. 14 of the Constitution is concerned, the principle is well settled in a series of decisions of the Supreme Court, in Ram Krishna Dalmia v. Justice Tendulkar, : [1959]1SCR279 , the principles to be borne in mind while determining whether a particular enactment is violative of the doctrine of equality in Art. 14 of the Constitution have been laid down by the Supreme Court and these principles have been reiterated and followed in later cases. The principles relevant for the purposes of the present case are:

that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles;

that it must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds;

that while good faith and knowledge of the existing conditions on the part of a Legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the Court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation.

20. These principles have been reiterated in the decisions on which Dr. Naik realied. Dr. Naik has firstly relied on the decision dealing with the validity of the Special courts Act in In Re Special Courts Bil, 1978, : [1979]2SCR476 , in which the Supreme Court in para 73 has once again laid down the different propositions which emerged from the judgments of the Supreme Court with regard to the applicability of Art. 14 of the Constitution. These are in no way different from the ones which wer laid down in Ram Krishna Dalmia's case cited (supra). Dr. Naik has also invited our attention to the latest decision of the Supreme Court in D. S. Nakara v. Union of India, : (1983)ILLJ104SC , where again the same principles were reiterated and it was observed that the fundamental principle was that Art. 14 forbids class legislation but permits reasonable classification for the purpose of legislation, which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that the differentia must have a rational nexus to the object sought to be achieved by the statute in question.

21. Now, so far as the substantive provision in S. 73A(1) is concerned, the Legislature has made a positive provision that the Chairman and the President shall be treated as designated officers. It is no doubt true that the definition of officer in S. 2(20) of the Act includes several categories of persons such as a Chairman, a Vice-Chairman, a President, a Vice-President, a Managing Director, Manager, Secretary, treasurer and a member of the committee. But it is difficult for us to see how, when an express provision is made in respect of a Chairman and a President by enacting that they shall be treated as designated officers, the provision in S. 73A becomes bad because only two of the persons who are defined as 'officer' are selected for being the subject of legislation in so far as their tenure of office is concerned. We have referred earlier to the Objects and Reasons of the Act. The legislature knows best the trend of the co-operative movement in the State. It also knows the state of the co-operative movement and if in the view of the legislature, the Chairman or the President or other persons occupied a position of power and it is necessary to restrict their tenure, we fail to see how such an enactment can be challenged on the ground of being violative of Art. 14 of the Constitution.

22. It is necessary to point out that the enactment in S. 73A in so far as the Chairman and the Preisdent is concerned would necessarily stand independent of the definition in s. 2(20) of the Act because it is a positive expression of the will of the Legislature that persons of these two categories are designated officers and they will not be permitted to hold the office of Chairman or President for consecutive period of more than six years, he shall cease to held that office on the expiry of the period of six years. Section 73A does not treat Chairman of one Society differently from the Chairman of another society. It is not doubt a legislation which takes within its sweep every Chairman and every President. It is also possible that the functions of Chairman and President may very from society to society. It was at one stage argued before us that a President of the society is elected merely to preside over the general body of members, while a Chairman is a person who is often the Chairman of the Managing Committee and who may some times under the by-laws also take the Chair of the President of the society at the annual general meeting of the members of the society. In the cases that are before us today, we have not come across a case where under the by-laws there is any President who holds office for more than six years. Strictly speaking, we are not concerned with a case of a President at all and the petitioner No. 2, who is the Chairman of the society, cannot challenge the provision in s. 73A on the ground that a President is normally under stood to be only a President of the annual general meeting, then the question of his holding the office for a consecutive period of more than six years cannot arise. It is, however, obvious that when the Legislature refers to the Chairman and the President, it has in mind a person who held such office for a consecutive period of more than six years or at least six yeas or at least for a term for which members of the Managing Committee or the Board of Directors are elected. This is, therefore, not a case of persons of different categories being grouped together. It is a case of persons holding positions of power being subjected to the same legislation having regard to the fact that such persons were found to occupy positions or offices in a co-operative society for a long period, with the result that the society became their exclusive preserve.

23. There is also no substance in the contention raised by Mr. Rane that persons of different categories are herded together in the definition of 'officer' in S. 2(20)of the Act, and therefore, the provision in S. 73A will be violative of Art 14 of the Constitution. Section 2(20) is a definition section and each category of persons specified therein has been functions which he performs or the office which he occupies is a co-operative society. Where several persona are being described by a general noun like an officer, we fail to see how by any stretch of imagination Art. 14 can be brought into the picture. There is a clear indication in s. 2(20) of the Act that only those persons who are elected or appointed to give directions in regard to the business of such society can be called officers. Indeed S. 73A has inbuilt requirement which must be satisfied before it is attracted because it deals only with an officer, who is a person who has power to give directions in regard to the business of the society having regard to the definition in S. 2(20). Thus if the list of persons, who are enumerated in the definition in s. 2(20), is scrutinised, it will be seen than each one of them has a power to give directions in regard to the business of a society.

24. It would have been quite permissible for the State Legislature to make independent provisions in respect of each of such officers specifying them as designated officers or in respect of each class of officers a provision restricting their tenure could have been made. Instead of adopting that form of legislation, the form which the Legislature has now adopted is that power has been given to the State Government to add to the list of designated officers initially consisting of the Chairman or the President and to all of them, the restrictive provision with regard to their tenure and ineligibility for further election to the post of authorised officer for a further period of three years has been made. We shall presently deal with the challenge made to that part of S. 73A which gives power to the Government to add to the list of authorised officers. But in so far as Section 73A is concerned, it is difficult for us to even see how a provision, which, properly construed, is intended to limit the tenure of office of every person of each specified category, can be attacked on the ground of being violative of Article 14 of the Constitution.

25. Even assuming that some argument on the basis of Art. 14 can be advanced. It is clear that the classification is based on a clear and intelligible criteria namely. Their power to control the affairs of the co-operative society and if this has achieved, namely, to free the co-operative societies from the ever continuing influence of only one group of persons, we fail to see how even otherwise, the provision can be attacked on the ground of being violative of Art. 14 of the Constitution.

26. Mr. Rane has referred to two decisions which, in our view, need not be considered in detail because they only highlight the well known and well established principle that discrimination amy result from equals being treated differently or unequals being treated in the same manner. The two decisions relied upon by Mr. Rane were : Moopil Nair v. State of Kerala, : [1961]3SCR77 , where it was held that lack of classification creates inequality, and State of Kerala v. Haji K. Kutti, : [1969]1SCR645 , in which it was held that where objects, persons or transactions essentially dissimilar are treated by the imposition of a uniform tax, discrimination may result, for, refusal to make a rational classification may itself in some cases operate as denial of equality.

27. Dr. Naik has also referred us to an unreported decision of the Gujarat High Court in Rasiklal Patel v. Kailasgauri Ramanlal Metha (Special Civil) Application No.452 of 1968), decided on 23rd Sept., 1970.* Here the question related to the validity of cls. (c). (d) and (e) of S. 96(1) of the Gujarat Co-operative Societies Act, which was similar to the provisions in S. 91(1), (c), (d) and (e) of the Act and these provisions have been held to be invalid as being violative of Art. 14 of the Constitution. There is no new principle laid down in this decision and it si, wellknown that the question as to whether Art. 14 of the Constitution is violated or not is a matter which has to be decided on the facts and circumstances of each case. It is necessary for a petitioner, who challenges a statutory provision on the ground that it si violative of Art. 14, not merely to prove that there is a differential treatment, but it is also to be shown that the persons in respect of whom a discrimination is alleged are similarly circumstanced compared to those who have not been discriminated against. We may refer to the decision of the Supreme Court in Probhudas v. Union of India, : AIR1966SC1044 . In which the Supreme Court pointed out as follows:-

28. It cannot be too strongly emphasized that to make out a case of denial of the equal protection of the laws under Article 14 of the Constitution, a plea of differential treatment is by itself not sufficient. An applicant pleading that Art. 14 has been violated must make out that not only he had been treated differently from other but he has been so treated from persons similarly circumstanced without and reasonable basis, and such differential treatment is unjustifiably made.' (para. 8).

29. We may also at this stage point out that by consent of parties, liberty was given to the State to refer to and affidavit which was filed in Special Civil Application No.1322 of 1977, which is an earlier petition filed by the petitioner but was withdrawn. In that affidavit made by the Officer, Agriculture and Co-operatioin, Government of Maharashtra, it was denied that the only functions of the Chairman and the Vice-Chairman when acting as a Chairman was only to preside over the Board of Directors' meetings. The affidavit recited several powers and functions of the Chairman of the first petitioner under Bye-laws 26 (A) and 26 (B) 24(3) (A), 34 (B),45 (I), 43(30), 48 and 48(7). It was pointed out that the Chairman exercises extensive powers and that een the actions of the Managing Committee are subject to the approval of the Chairman. The affidavit states that in actual inexperience of the functioning of the societies, it has been noticed that the Chairman and the other designated officers of the society are not merely figure-heads, but the members of the Managing Committee of the society for all intents and purposes delegate their powers and functions to the Chairman and other designated officers and actually the Chairman and the other designated officers are active participants in taking the final decisions.

30. It is urged by Dr. Naik that the real power in a co-operative society vests in a general body because the society functions through the general body. Technically there can be no challenge to the proposition that the society functions through the general body. But it is also wellknown that the general body meets only periodically and probably once in a year, but the day to day affairs of the society are in the hands of the Chairman or the Managing Director, as in the present case, or in the hands of the Board of Directors and the Executive Committee. It was this concentration of power in the same hands for a continued period of time which was sought to be remedied by the Legislature and it is, therefore, no argument to say that thee society function only through the general body and, therefore, there cannot be any concentration of power in any particular person.

31. This brings us to the second question as to whether that part of S. 73A, which empowers the Government to add to the list of designated officers by declaring certain officers as designated officers, is bad on the ground of vesting arbitrary and uncontrolled power in the State Government.

32. It is common ground that the power under S. 73A to be exercised by the Government for declaring a particular officer as a designated officer is subject to two restrictions. The first restriction is that such power is to be exercised only in respect of an officer who satisfiers the description in S. 2(20) of the Act, that is to say, he should by any one of the persons specified in S. 2(20) or such an officer should be a person elected or appointed under the Act to give directions in regard to the business of such society. There is also a limitation implicit in S. 73A(1) itselt. The limitation is that a person who is an officer appointed or nominated by the State Government or by the Registrar cannot be designated as a designated officer. It is, therefore, difficult to hold that the power of the Government is completely uncontrolled. Indeed the power is a very restricted power and it cannot be exercised in respect of any person who does not satisfy the requirement of S. 2(20). The power can also not be exercised in respect of one who is a person appointed or nominated by the State Government or by the Registrar. We must also not forget that each one of the officers specified in S. 2(20) or even a person who might fall in the residuary clause in S. 2(20) is a person who will be actively involved in the day to day affairs of the society because the very guideline in S. 2(20) for a person to be called an officer is that he must be elected or appointed under the Act, the Rules and the By-laws to give directions in regard to the business of such society. Once there is a guideline laid down by the Legislature in so far as the restricted category of persons in respect of whom such power to designate as designated officer can be exercised, it is obvious that this power will be exercised only with a view to achieve the object of the enactment, namely, to prevent a co-operative society becoming a preserve of a few people who are in a position to manage or to give directions with regard to the business of the society. Such power cannot, therefore, be said to be an arbitrary or a naked power. A delegation of the kind which is to be found in S. 73A(1) is not unknown in the field of legislation and is indeed a very common feature of legislative enactments.

33. In Tata Iron & Steel Co. v. Workmen, : (1972)IILLJ259SC , the Supreme Court while pointing out the necessity of such delegation observed as follows (at p.1922).-

'Now, the increasing complexity of modern administration and the need for flexibility capable of rapid readjustment to meet changing circumstances which cannot always be foreseen, in implementing our socio-economic policy pursuant to the establishment of a welfare State as contemplated by our Constitution, have rendered it convenient and practical, may, necessary, for the legislatures to have frequent resort to the practice of delegating subsidiary or ancillary powers to delegates of their choice...... Again such measures cannot provide for all possible contingencies because one cannot, visualise various permutations and combinations of human conduct and behaviour. This explains the necessity for delegated or conditional legislation.'

34. It is also well established that delegation of legislative power is permissible only when the legislative policy and the principles are adequately laid down and the delegate is ony empowered to carry out the legislative policy within the guidelines laid down by the Legislature. It is also well established that the Legislature cannot abdicate its authority and cannot pass on to some other body the obligation and the responsibility imposed on it by the Constitution, but it can only utilise other bodies or authorities for the purpose of working out the details of the essential principles laid down by it.

35. In Delhi Municipality v. B.G.S. & W. Mills AIR 1968 SC 1233, the question which arose was with regard to the validity of S. 150 of the Delhi Municipal Corporation Act which empowered the Corporation to levy any of the additional taxes by describing the maximum rate of tax to be levied; to fix class or classes of persons or the description or descriptions of articles and properties to be taxed and to lay down the system of assessment and exemption, if any, to be granted. Ift was held that this was not an unguided power and could not be said to amount to excessive delegation laying down the principle on which the question as to whether a provision amounts to excessive delegation or not, the Supreme Court on a review of several authorities observed in para 28 as follows:-

'A review of these authorities therefore leads to thee conclusion that so far as this Court is concerned the principle is well established that essential legislative function consisted of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legisiature. Nor is there any unlimited right of delegation inherent in the legislative power itself. This is not warranted by the provisions of the Constitution. The legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act, where the legislative policy is enunciated with sufficient clearness or a stand ard is laid down, the courts shoud not interfere. Shat extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the particular Act with which the Court has to deal including its preamble. Further it appears to us that the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation.'

36. What is the duty of a Court when the Court is called upon to determine the validity of a legislation which is challenged on the ground that there is excessive delegation, is explained by the Supreme Court in Devi Das v. State of Punjab, : [1967]3SCR557 , and it was pointed out that it is for a Court to hold on a fair. Generous and liberal construction of an impugned statute whether the Legislature has exceeded the permissible limits of delegation. The Supreme Court reproduced the following passage from the decision in Vasanlal Maganbhai Sanjanwala v. State of Bombay, : 1978CriLJ1281

'The Constitution confers a power and imposes a duty on the legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously, it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of deleation. An overburdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation. It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the court to the extent of always trying to discover a dormant or latent legislative policy to sustain an authorities. IFt is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature.'

37. In the well-known decision of the Supreme Court in Edward Mills Co.Ltd.v. State of Ajmer AIR 1955 SC where a notification issued by the State of Ajmer fixing the minimum wages in respect of the employment in textile industry within the State and the provisions of the Minimum Wages Act, 1948, were challenged on the ground that the Minimum Wages Act nowhere prescribed the principles nor laid down any standards which could furnish any guidance to the administrative authority in making a selection with regard to employment in respect of which the Government was of opinion that the minimum wages should be fixed under the Act and such power was exercised under S. 27 of the Minimum Wages Act. It was pointed out that though there was undoubtedly an element of delegation implied in the provisions of S. 27 of the Act because the Legislature in a sense authorised another body specified by it to do something which it might do itself, such delegation, if it could be so-called at all, did not in the circumstances of that case appear to be unwarranted and unconstitutional.

38. We may also refer to the decision of the Supreme Court in Mohamedalli v. Union of India. : (1963)ILLJ536SC , in which S. 1(3)(b) of the employees' provident Funds Act was held to be valid on the ground that it does not confer any uncontrolled or uncanalised power on the appropriate Government and was, therefore, not invalid on the ground of excessive delegation. S. 1(3)(b) provided that the Act applies to any other establishment employing 20 or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided that the Central Government may, after giving not less than two months notice of its intention so to do by notification in the Official Gazette, apply the provision of this Act to any establishment employing such number of persons less than 20 as may be specified in the notification. While dealing with a challenge to such a delegation, the Supreme Court observed as follows (at p. 985):-

'It is clear that the last mentioned case : 1960CriLJ671 illustrates the rule that the question whether or not a particular piece of legislation suffers from the vice of excessive delegation must be determined with reference to the facts and circumstances in the background of which the provisions of the statute impugned had been enacted. If, on a review of all the facts and circumstances and of the relevant provisions of the statute, the Court is in a position to say that the legislature had clearly indicated the underlying principle of the legislation and laid down criteria and proper standards but had left the application of these principles and standards to individual cases in the hands of the executive, it cannot be said that there was excessive delegation of powers by the legislature. On the other hand, in a review of those facts and circumstances and the provisions of the statute, including the preamble, leaves the Court guessing as to the principles and standards, then the delegate has been entrusted not with the mere function of applying the law to individual cases, but with a substantial portion of legislative power itself.'

39. Such then are the tests on which the validity of a legislation, which is challenged on the ground of excessive delegation, is to be determined. As we have already pointed out the Legislature has clearly indicated the officers who could be designated as 'designated officers'. The Legislature has also indicated that officers, who are appointed or nominated by the State Government or by the Registrar, will not be notified as designated officers. Among the officers, who could be designated as designated officers, were only those who were in a position to give directions in regard to the business of the society. Therefore, there was clear legislative policy, having regard to the object with which S. 73A was enacted, which was laid down by the Legislature. The guidelines were also laid down by requirements of S. 2(20) and the officers, who could not have been designated as designated officers. Have been expressly excluded in S. 73A(1) itself. Ift is, therefore, difficult to sustain any challenge to the provisions in S. 73A on the ground that there is excessive delegation.

40. We need not, therefore consider the argument that the clause relating to deligation could not be severed from the rest of the section and, therefore, the section itself is bad. Even otherwise, it is obvious that if the clause empowering the government to notify certain persons as designated officers was bad on some ground or the other, then so far as the Chairman and the President are concerned, the provisions of S. 73A(1) could still be given effect to irrespective of whether there is or there is not a power to notify additional specified officers.

41. It is necessary at this stage to point out that it is now a uniform pattern in co-operative law all over the country to restrict the tenure of certain officers and similar provisions have been made in the relevant laws relating to co-operative societies in other parts of the country. In the Delhi Co-operative Societies Act, 1970, there is a disqualification clause in S. 31(5) which reads as follows.-

31 (5). 'Notwithstanding anything contained in this Act, a person shall be disqualified for election as, or for being the President, Vice- President, Chair man, Vice-Chairman, Managing Director, Secretary, Joint Secretary or Treasurer of a Committee,-

if he has held any such office on that committee during two consecutive terms, whether fill or part;

if he holds any such office on a committee of another co-operative society of the same type;

if he holds any such office on the committees of three or more co-operative societies of a different type or different types......'

42. In the Punjab Co-Operative Societies ACt, there is more or less a similar provision in S. 26B which reads as follows :-

26B. 'Restrictions on membership etc.- (1) No individual shall, at any time, be a member of committee of-

more than two primary societies; and

more than one central and one apex society :

Provided that nothing in this subsection shall apply to a member nominated under sub-sec. (2) of S. 26 or to a member of the Committee of an apex or central society nominated to serve on the committee of another apex or central society as the case may be, in accordance with the provisions of their by-laws.No person shall be eligible for being elected to the committee of any co-operative society after he has served on the committee of that society whether before or after or partly before and partly after the commencement of the Punjab Co-operative Societies (Amendment) Act, 1969, for a continuous period of not less than six years, unless a period of not less than three years has expired since he last so served.

Explanation.-For the purpose of computing the period of six years under sub-sec. (2), if a person ceased to serve on the committee on account of resignation tendered bu him he shall be deemed to have served for the full terms in which resignation was tendered.'

43. This is, therefore, a normal pattern which appears to have been adopted as implementation of a policy laid down on a national basis. We find a reference to this in the affidavit of the Officer on Special Duty, in which it is stated that an All-India Conference of the Chief Ministers and of State Ministers for Co-operation was held ar Madras on 12th June 1968 and the important measures suggested by the said conference in regarding to the curbing of vested interests in co-operative societies were as follows :-

Restriction on holding office for more than the prescribed number of terms;

Restriction on holding office simultaneously in a number of institutions;

Regular election by an independent authority.

44. It is stated in the affidavit that on the basis of the guidelines giving in the All-India Conference of the Chief Ministers and the State Ministers for Co-operation and on the basis of the knowledge of the actual working of the various co-operative societies obtained by the Government through its Co-operative Department under its supervisory powers, it was noted that 'the real powers in the said co-operative societies was being monopolised by their chairman and/or vice-chairman and/or other designated officers' and that in keeping with the national policy of removing vested interests from co-operative institutions for attaining the object of the co-operative movement of uplift of weaker and poorer sections of the society and with a view to make the co-operative societies broadbased and democratic institutions rather than to allow them to be monopolised by a few persons and for the purpose of orderly development fot he co-operative movement and further in accordance with the relevant directive principles of the State policy enunciated in the Constitution of India, the provisions in S. 73A were inserted in the Act by Maharashtra Act 27 of 1969.

45. It was then argued by Dr. Naik that having regard to the provision in cl. (b) of the Explanation S. 73A(5), the object of the section itself is being defeated and the section itself would be come bad because there is a discrimination between officers who have worked for less than five years and those who have resigned within one year of the completion of their period of six years.

46. Now, as already pointed out, the effect of sub-sec. (5) of S. 73A is that on the expiry of six years, the designated officer ceases to be as such and he is not eligible for being re-elected or re-appointed as a designated officer until a period of three years has elapsed after the expiry of the aforesaid period of six years. There is an Explanation to sub-sec. (5). The effect of cl. (a) of the Explanation is that any period for which the person concerned may have been an officer before the commencement of Act 27 of 1969, that is, prior to 1st July 1971, is to be excluded for the purpose of computing the period of six years. The effect of cl. (b) of the Explanation is that if a person resigns his office as a designated officer within 12 months from the date on which the consecutive period of six years would be completed, he shall be deemed to have completed the period of six years on his resignation. To take an illustration, if a person who was due to complete his consecutive period of six years on 31st Dec. 1983, it is not open to such person to say that he does not fall within the bar created by S. 73A(5) because he has not cmpleted the consecutive is introduced, the effect of which is that any authorised officer who holds office for even a dau more than five years will designated officer for a consecutive period of six years even though he resigns at any time after the completion of his five years, he goes out of the bar under S. 73A(5), while a person who resigns one day after five years of office falls within the bar under S. 73A(5). Now, it is obvious that the Explanation was intends to avoid any device which may be resorted to by an authorised officer by resigning his office before the competion of the period of six years. For this purpose the Legislature provided that one who resigns with one year of the competion for the period of siz years would be deemed to have completed six years. This is not a legislation which deals with a designated officer who has not completed five years as a designated officer. The subject of legislation is a person who is a designated officer for a consecutive period of six years. Therefore, a person, who may have resigned his office even prior to the completion fo five years cannot be said to be similarly circumstanced or situated as compared with a person who has resigned his office after the completion of five years. There is this no substance in the argument that S. 73A(5) will become bad on the ground that the person who has resigned priod to the completion of five years as a designated officer has resigned after the completion of five years as a designated officer.

47. Though in the petition at one stage Dr. Naik has sought to argue that the provision in S. 73A(5) is violate of fundamental right under Art. 19(1)(c) of the Constitution, that challenge was expressly given up before us. We need not, therefore, deal with the challenge on the ground of violation of Art. 19(1)(c) of the constitution.

48. Having regard to the view which we have taken S. 73A(1) and (5) must be held to be valid. Writ Petition No. 1418 of 1984 must, therefore, fail and is dismissed. Writ Petition No. 1330 of 1981 must also fail and is dismissed and Writ petition No. 1419 of 1981 is also dismissed. In these petitions, the substantial prayer is with regard to the validity of S. 73A(1) and (5) and the injunction granted earlier prevented the State from implementing the provisions of S. 73A of the ACt. Interim injunction now vacated. However, in the circumstances, we make no order as to costs.

49. Writ Petition No. 735 of 1983 :

This petition has been filed bu the shareholders of what is known as Bhogawati Sahakari Sakhar Karkhana Ltd. for a writ of quo warranto against respondent No. 1 on the ground that he ahs been the Chairman of respondent No. 2 karkhana for more than a consecutive period of six years and, therefore, writ should be issued to respondent No. 13 State of Maharashtra directing it to remove respondent No. 1 from the office of the Chairman of respondent No. 2. In this case, the facts are not in dispute Respondent No. 1 was initially elected for one year as a Chairman of the provisional committee on 26th Feb. 1976. The petitioners case is that the tweed of the provisional committee was extended from time to time and the last time it was extended was on 25th Feb. 1981. Thereafter elections were held in Oct. 1981 and respondent No. 1 was elected as a Chairman for a period of five years from 31st Dec. 1981. Admittedly respondent No. 2-Society falls within cl. (c) of Category II of S. 73A(2). When this petition was admitted, respondents Nos. 1 and 2 also filed a petition, being Writ Petition No. 1298 of 1983, praying that S. 73A(1) and (5) of the Act should be struck done on the same grounds on which the constitutional validity of that section was challenged in Writ petition No. 1418 of 1981 which we have disposed of just now. That petition filed bu the Co-operative Society and the Chairman was kept for admission along with the other cases. Bow, in the petition filed by the Co-operative Society and the Chairman, copies of orders issued from tine to time extending the period of the Provisional Board of Directors have been produced. Admittedly the first meeting was held on 26 th Feb. 1976 on which day, the Chairman was authorised to declare the names of the Board of Directors, and on the same day, a Board of Directors consisting of 12 persons including the Chairman was approved for one year. Thereafter the Director of Sugar and Additional Register, Co-operative Societies, issued an order on 5th Oct, 1977 acting under Bye-law 30 and extended 'the Existing term of the Provisional Board of Directors which expired on 26-9-77' for a period ending on 31st Dec. 1977 or until further extended up to 31st Dec. 1978. It was then extended up to 15th July 1980 and again extended up to 25th Feb. 1981. These facts are not in dispute. The learned counsel for the Chairman and the Society, however, contended that the orders of the Registrar must be read as orders of appointment of the Chairman as contemplated by the last part of S. 73A. The effect of the last part of S. 73A is that a designated officer does not include an officer appointed or nominated nu the State Government or the Register. The argument is that the orders issued from time to time extending the period of office must be read as orders of appointment by the Registrar and, therefore, the bar under S. 73A(1) and (5) would not apply in the case of the Chairman.

50. On a bare reading of the orders, it is clear that what was extended was 'the existing term of the Provisional Board of Directors'. The Provisional Board of Directors was elected at the first general meeting held on 26th Feb. 1976. It is obvious to us that from 26th Feb. 1976, the Chairman has been in office for more than consecutive period of six years.

51. Mr. Saeant, who appeared on behalf of the petitioners, however, had considerable difficulty in answering our question as to how a writ of quo warranto could be issued to the Chairman and how any writ could be issued to the State of Maharashtra directing the State Government to remove the Chairman from office. Mr. Sawant fairly conceded that there was no provision under which he could ask the State Government to remove the Chairman of the Society nor could a writ of quo warranto be issued because the Chairman did not hold any public office. Therefore, even though it was apparent that the Chairman had been in office for a consecutive period of more than six years, no relief could be given to the petitioners and the petition was therefore, liable to be dismissed. Writ Petition No. 735 of 1963 is thus dismissed; no order as to costs.

52. Writ Petition No. 1296 of 1963:

In view of the decision in Writ Petition No. 735 of 1983 and the decision in Writ Petition No. 1418 of 1981. Writ Petition No. 1298 of 1982 must also be rejected. No order as to costs.

53. Ordered accordingly.


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