TaxTMI 
TaxTMI 
1991 (10) TMI 319
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....k. 2. For the purpose of this petition it is necessary to state in brief the history of this Bank, Prior to 30th June 1981 there was a Co-operative Bank known as the Ismailia Cooperative Rank Limited. Respondent No. 8 was the President of this bank since March 1979. There was also in existence another cooperative hank known as the Masalawala Cooperative Bank Limited. Both these banks were registered under the Maharashtra Co-operative Societies Act, 1960. Both these banks were amalgamated by an order dated 30th June 1981 passed by the Divisional Joint Registrar, Co-operative Societies, Bombay, in exercise of powers conferred on him under sub-section (1) of Section 17 of the Maharashtra Co-operative Societies Act, 1960. As a result of this amalgamation a new bank viz., respondent No. 6 Bank was brought into existence and the registration of the two amalgamating banks in terms of the provisions of S. 9(1) of the Maharashtra Co-operative Societies Act, 1960 were cancelled from the date of the order of amalgamation. 3. As per the scheme of amalgamation, a Board of Directors consisting of eight directors was nominated to hold office for a period of three years from the date of the orde....
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....om this order of the learned single Judge was filed by the petitioners, being Appeal No. 444 of 1989. The same was, however, withdrawn by the petitioners on 20th April 1989 stating that the petitioners will take recourse to a fresh petition in case respondent No. 8 gets elected as the President of the Board of Directors of respondent No. 6 Bank. 8. Thereafter elections were held on 23rd April 1989. Respondent No. 8 was elected as the President of the Board of Directors of respondent No. 6 Bank. The results were declared on 27th April 1989. Immediately thereafter, on 9th May 1989 the present writ petition was filed. This petition was rejected at the stage of admission by a learned single Judge of this Court by his order dated 27th June 1989. The learned single Judge has recorded in his order that the petitioners had restricted their petition to the contention that section 37 of the Multi-State Co-operative Societies Act, 1984 precludes respondent No. 8 from offering himself as a candidate for the April 1989 poll. The learned Judge dismissed the writ petition on the ground that the appropriate remedy was to move the statutory authority under the Multi-State Co-operative Societies Ac....
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....gh Court Rules on the Original Side, the writ petition has come up for disposal before us instead of before a single Judge. 11. Originally, this writ petition was directed to be heard along with a number of other writ petitions where the constitutional validity of certain provisions of the Multi-State Co-operative Societies Act are under challenge. The parties, however, have agreed to de-link this writ petition from the other writ petitions pending before this Court. The learned Advocates for the respondents, who have argued before us, have stated at the outset that they are not challenging the constitutional validity of the Multi-State Cooperative Societies Act, 1984 for the purpose of this petition. They do not, therefore, desire to go into the question of legislative competence to enact the Multi-State Co-operative Societies Act. This contention has, therefore, not been argued before us. The learned Advocates for the respondents have also stated before us that they do not wish to press the contention that an alternative remedy under section 91 of the Maharashtra Cooperative Societies Act, 1960 is available to the petitioners. Hence no arguments have been advanced on this questi....
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.... multi-State Co-operative Society." Ordinarily, therefore, any dispute as to whether the nomination of respondent No. 8 was rightly accepted by the returning officer, or whether the election of respondent No. 8 to the office of the president of the board of directors of respondent No. 6 Bank in April 1989 is valid in view of the provisions of S. 37, would have gone before the Central Registrar under S. 74 of the said Act. Section 74, however, has been stayed as set out earlier. 15. The respondents, however, contend that there is another alternative remedy which is available to the petitioners under section 40 of the Multi-State Co-operative Societies Act, 1984. Section 40 provides- "If in spite of cessation of office under circumstances mentioned in section 34, section 36, section 37 or section 39 a member of the board refused to vacate his office, the Central Registrar shall, by order in writing, remove him from such office." Section 34 deals with disqualifications for being a member of a board, such as being adjudged an insolvent or of unsound mind or being convicted for an offence involving moral turpitude. There are also other disqualifications which are set....
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.... set out in the sections cited earlier. It is true that under Section 90(1)(f), an appeal is provided against an order made by the Central Registrar under Section 40 removing a member from his office. But looking to the nature of the disputes which are the subject-matter of the present writ petition, in our view, section 40 does not provide a suitable alternative forum for adjudication of these disputes. 17. In this connection our attention was drawn to similar provisions under the Maharashtra Co-operative Societies Act, 1960. Under section 73FF(2) of the Maharashtra Co-operative Societies Act, a member who has incurred any disqualification under subsection (1), shall cease to be a member of the committee and his seat shall thereupon be deemed to be vacant. Under section 78(1) of the Maharashtra Co-operative Societies Act, where any member of the committee stands disqualified by or under this Act for being a member, the Registrar may, after giving the committee or the member, as the case may be, an opportunity of stating its or his objections, if any, within fifteen days from the date of receipt of notice and after consultation with the federal society to which the society is affi....
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....also read the provisions for resolving disputes under S. 74 onwards into S. 40. The best that we can do, therefore, is to read the principles of natural justice as impliedly included in S. 40. Thus, in our view, the very fact that any detailed procedure for adjudication of any dispute under S. 40 is not provided, indicates that S. 40 is meant for conferring a supervisory jurisdiction on the Central Registrar for enforcement of Ss. 34, 36, 37 and 39. It is not meant for adjudication of disputes between members and/or officers of a Multi-State Co-operative Society, much less a dispute relating to the election of an officer of the society, which is expressly governed by S. 74. 20. Since, in our view, S. 40 does not provide an adequate alternative remedy to the petitioners in the present case, we need not go into the question whether it is mandatory for the petitioners to avail of an alternative remedy under S. 40 or not. The fact that an alternative remedy is available, is generally a ground for not entertaining a writ petition. But it is, ultimately, a matter of policy whether discretion under Art. 226 should be exercised in such a case or not. 21. In the present case, even if we c....
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....jected on the ground that an alternative remedy under the relevant statute was not availed of, particularly in a case like the present one where there is a clear violation of S. 37 as will be set out hereafter. 23. It is also pointed out by the petitioners that the Multi-State Co-operative Societies Act, 1984 is comparatively a new Act and the provisions of S. 37 have not come up for interpretation so far. It is, therefore, desirable that these provisions be interpreted. Looking to all these circumstances, in our view, this is not a fit case where the petition should be rejected on the ground that the petitioners have not availed of a statutory remedy under S. 40 of the Multi-State Co-operative Societies Act. 24. It was also urged that this writ petition is not maintainable against respondent No. 6 Bank and against respondent No. 7 returning officer because respondent No. 6 cannot be considered as a State within the meaning of that term under Art. 12 of the Constitution. In support of this submission Mr. Sathe, learned Counsel appearing for respondent No. 6, drew our attention to Full Bench judgments of (1) Kerala High Court in the case of P. Bhaskaran v. Additional Secretary, Ag....
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....-Slate Co-operative Society after he has held this office during two consecutive terms, whether full or part. The explanation to S. 37 provides that where a person was holding office inter alia of the president at the commencement of this Act and he is again elected to that office after such commencement, he shall, for the purpose of this section, be deemed to have held office for one term before such election. A plain reading of S. 37 along with the explanation would show that in a case like the present one, where a person was already holding the office of the president at the commencement of the Act in September 1985, and is subsequently elected as the president again, his earlier term before the election will also count as a term for the purpose of S. 37. In other words, if a person is president at the commencement of the Act and he is thereafter elected at any subsequent date as a president again, he cannot, on the expiry of his elected term, again stand for the office of the president for one full term of three years. In the present case on 16th September 1985, when the Act came into force, the 8th respondent was holding office of the president of the 6th respondent Bank by vi....
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.... purpose of the main part of S. 37 which prevents a consecutive holding of office for more than two terms. A question may, however, arise about a person who was holding office at the commencement of the Act. The explanation deals with this transitory situation where a person was holding the office of the president or vice-president or chairman or vice-chairman at the commencement of the Act. In such a case the disqualification, in order to apply, will take into account his earlier term also which he held at the commencement of the Act. If we accept the interpretation put by Dr. Naik, the earlier nominated term cannot be taken into account at all, even though a person may have held the post in question for a number of years as a nominated president or vice-president, as the case may be. Such an interpretation is not warranted. It would defeat the purpose of Section 37. 29. In this connection a reference may be made to the Statement of Objects and Reasons underlying the enactment. Of course, the Statement of Objects and Reasons cannot be brought in aid for interpreting Section 37. Nevertheless, it does indicate the background and the circumstances in which this legislation was broug....
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....re of the person holding the office in a co-operative society. Interpreting the explanation as excluding a nominated term would defeat the very object of the section and the explanation. 30. It was urged before us that Section 37 is a penal provision and, therefore, it must be strictly construed. Hence the Explanation must be confined only to cases where the term held at the commencement of the Act was an elected term. This submission, in our view, is misconceived. Section 37 cannot be construed as a penal provision at all. It is, in effect, a remedial measure which seeks to prevent the same person from holding a position of power in a co-operative society for a very long period of lime. As set out at page 448 of G. P. Singh's Principles of Statutory Interpretation, Fourth Edition 1988 - "Every modern legislation is actuated with some policy and speaking broadly has some beneficial object behind it. Penal statutes, on the other hand, are those which provide for penalties for disobedience of the law and are directed against the offender. . . . ." In case of remedial statutes the doubt is resolved in favour of the class of persons for whose benefit the statute is en....