Court overturns liquidation order under Co-operative Societies Act due to lack of natural justice.

The court found considerable merit in the writ petition challenging the interim order for liquidation under the Maharashtra Co-operative Societies Act. It held that the order was illegal, passed without adherence to natural justice principles, and lacked valid grounds for liquidation. Emphasizing that liquidation should be a last resort, the court set aside the impugned order dated 16.06.2020, ruling in favor of the petitioner and quashing the order without costs.

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Issues Involved:
1. Legality of the interim order for liquidation.
2. Compliance with the principles of natural justice.
3. Validity of the grounds for liquidation.
4. Continuation of previous proceedings.

Detailed Analysis:

1. Legality of the Interim Order for Liquidation:
The petitioner sought the quashing of the interim order dated 16.06.2020 by the Divisional Joint Registrar of Co-operative Societies (Dairy), Pune, which directed the liquidation of the petitioner society under section 102(1)(c)(ii) and (iv) of the Maharashtra Co-operative Societies Act, 1960. The Registrar also appointed a liquidator under section 103(1) of the Act. The petitioner argued that the impugned order was ex-facie illegal as none of the conditions under section 102(1)(c)(ii) and (iv) were infringed, and it was passed for extraneous reasons, including political motivations.

2. Compliance with the Principles of Natural Justice:
The petitioner contended that the impugned order was passed in breach of the principles of natural justice. Despite submitting a reply to the show cause notice, the petitioner was not granted a personal hearing. The court examined section 102 of the Act, which allows the Registrar to issue an interim order for winding up a society without pre-decisional notice or hearing. However, the court referred to the precedent set in Chandrapur Zilla Sahakari Krushi and Gramin Bahuudeshiya Development Bank Limited Vs. State of Maharashtra, where it was held that principles of natural justice are implicit and must be read into section 102(1)(c). The court agreed that a pre-decisional hearing is necessary due to the adverse civil consequences of such an order.

3. Validity of the Grounds for Liquidation:
The respondents argued that the action was a continuation of the appellate order dated 12.05.2017, which set aside an earlier liquidation order subject to certain conditions. The petitioner claimed compliance with these conditions, including tying up with "Amul" for milk collection. The respondents, however, alleged non-compliance based on a report dated 10.06.2019, which stated that the petitioner society had not started milk collection. The court found that the impugned order was passed in undue haste without seeking further materials from the petitioner to substantiate its claims. The court emphasized that liquidation is a drastic measure and should be taken only as a last resort.

4. Continuation of Previous Proceedings:
The respondents contended that the impugned order was not a fresh case but a continuation of the previous appellate order. The court rejected this argument, stating that once an order is set aside by a superior authority, it becomes inoperative. The court held that the Registrar must clearly state and point out specific non-compliances before invoking suo motu jurisdiction under section 102(1)(c). The court found that the Registrar did not provide specific facts and instances of non-compliance, making the impugned order untenable.

Conclusion:
The court found considerable merit in the writ petition, holding that the impugned order dated 16.06.2020 was untenable in law and on facts. The order was set aside and quashed. The writ petition was allowed with no order as to costs.

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