TaxTMI 
TaxTMI 
2025 (7) TMI 60
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....red by respondent No.5 assailing the rejection of his nomination for election to the Managing Committee of respondent No.3-Society, inter alia, on the ground that as on the date of scrutiny of nominations, i.e., 6th March 2025, respondent No.5 stood as a defaulter of a cooperative bank and was, therefore, disqualified to contest the said election. 2. The factual matrix giving rise to the filing of the present petition is succinctly set out hereunder: Respondent No.1, in its capacity as the competent authority, published an election programme for conducting the election to the Managing Committee of respondent No.4-Society. As per the said programme, the last date for filing nomination papers was fixed as 5th March 2025; the scrutiny of nomination papers was scheduled for 6th March 2025, and the final list of validly nominated candidates was to be published on 7th March 2025. 3. In pursuance of the said election programme, both the petitioner and respondent No.5 submitted their respective nomination papers for contesting the election to the Managing Committee of respondent No.4. However, the petitioner raised an objection to the nomination of respondent No.5, contendin....
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....he present writ petition. 6. This Court, by order dated 21 March 2025, was pleased to issue notice for final disposal of the petition to all the respondents, making it returnable on 25 March 2025. In addition to the petitioner's independent efforts to effect service on the respondents, this Court directed respondent No.3 - the Returning Officer - to ensure that service of notice was effected upon all the respondents. In compliance with the said direction, respondent No.3 has filed an affidavit on record, affirming that on the date fixed for withdrawal of nomination papers, he had served the notice of the present writ petition upon the candidates who were present on that day at the election office. Additionally, it is stated in the said affidavit that a public notice regarding pendency of the present proceedings was also published in a widely circulated local newspaper, thereby ensuring wider dissemination of information about the proceedings. 7. On 25 March 2025, respondent No.5 appeared through his Advocate, and at the joint request of the parties, the matter was directed to be placed on 26 March 2025. On the said date, the learned Advocate for the petitioner tendered on rec....
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.... as evidenced by the affidavit filed on record. 11. In light of the above, and having regard to the urgency of the matter, the limited time available before the scheduled date of polling, and the efforts undertaken both by the petitioner and the Returning Officer to ensure wide circulation of notice, this Court is satisfied that due service of notice of final disposal has been effected on most of the respondents. 12. Mr. Patwardhan, the learned advocate appearing for the petitioner, invited the attention of this Court to the provisions of Rule 8 of the Security Interest (Enforcement) Rules, 2002 and submitted that the proviso to sub-rule (6) of Rule 8 mandates publication of an auction notice in two local newspapers, where action is initiated under Section 13(4) of the SARFAESI Act against a defaulter. He submitted that such notice, issued by Karad Urban Cooperative Bank, was duly published in the local newspaper and the original copy of the said publication was placed before the Returning Officer at the time of scrutiny of nominations. Additionally, the learned advocate submitted that a certificate issued by the said Bank declaring respondent No.5 to be a defaulter was also ....
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....iples of natural justice, including issuance of a show-cause notice to the concerned member. Furthermore, the invocation of Section 78(1) for removal of a member is not a sine qua non for attracting disqualification under Section 73FF(2). 15. The learned counsel also referred to the findings recorded by the Returning Officer while rejecting the nomination of respondent No.5. It was submitted that the Returning Officer, upon perusal of the original newspaper notice produced before him, had rightly come to the conclusion that Karad Urban Cooperative Bank had initiated proceedings under the SARFAESI Act against respondent No.5. The Returning Officer was of the view that publication of such notice in a widely circulated local daily was sufficient compliance of the requirement for determining default. It was further submitted that respondent No.5 did not dispute the existence or legality of such publication or the proceedings initiated by the said Bank. Thus, the Returning Officer, after due application of mind and upon considering the relevant material, rejected the nomination of respondent No.5 on justifiable grounds. 16. The learned Advocate for the petitioner placed reliance o....
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.... appeal untenable. 17. Further reliance was placed on the decision of this Court in Madhav Atmaram Sahakari v. Aselmo Furtado and Others, reported in 2018 (2) Mh.L.J. 258, wherein the Coordinate Bench repelled the plea of non-joinder of necessary parties. It was observed in that case that no provision had been pointed out which mandates the impleadment of other candidates whose nomination papers were rejected by the Returning Officer. The Court held that in absence of any such statutory requirement, the objection based on non-joinder could not be sustained and, accordingly, rejected the same. 18. The learned counsel then invited this Court's attention to the provisions of Section 152 (A) of the Maharashtra Cooperative Societies Act, 1960, to contend that the said provision does not stipulate or prescribe the nature of parties who must be impleaded in an appeal filed under Section 152A. He, therefore, submitted that in the absence of any express statutory mandate, a requirement to implead other candidates cannot be read into the provision by implication, especially in matters concerning rejection of nomination papers. According to him, in such cases, the only necessary parties....
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....rroneous appreciation of law and ignores relevant material placed on record, this Court ought to exercise its writ jurisdiction and quash the impugned order. 21. Per contra, Shri Godbole, the learned Senior Advocate appearing on behalf of respondent No.5, has strenuously opposed the maintainability of the present writ petition as framed and filed, inter alia, on the ground of non-joinder of necessary parties. Inviting the attention of this Court to an unreported judgment of a Division Bench in the case of Tukaram Hari Khamkar v. Shree Bharat Urban Co-operative Bank Ltd. & Ors. (Writ Petition No.2614 of 1982 and connected matters), the learned Senior Advocate submitted that the Division Bench has categorically held that in an appeal preferred under Section 152A of the Maharashtra Cooperative Societies Act, 1960, all candidates whose nomination papers have been accepted and whose rights may be affected by the outcome of the appeal are necessary parties. 22. He further placed reliance on the judgment of a Coordinate Bench of this Court in Vijaysingh Krishnarao Parbat v. Returning Officer, Janata Sahakari Bank Ltd. & Ors., reported in 2003 (2) Mh.L.J. 485, wherein it was observed....
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....d curable and can be challenged only by way of an election petition. 26. Referring to the SARFAESI Act, the learned Senior Advocate contended that reliance on a newspaper publication to declare a person a defaulter is legally unsustainable, particularly since there exists a possibility of rival candidates orchestrating such publications to disqualify competitors. He pointed out that the scheme of the SARFAESI Act permits a secured creditor to initiate proceedings under Section 13 thereof even in cases where default is disputed, and hence such initiation alone cannot conclusively establish that a person is a defaulter. 27. It was submitted that unless there exists cogent and conclusive proof of default, such as a certificate under Section 101 or an award under Section 91 of the MCS Act, a candidate cannot be disqualified merely on the basis of newspaper publication. In this regard, the learned Senior Advocate placed reliance on the following decisions to assert that this Court has consistently held that interference in the election process must be exercised sparingly and only in cases of exceptional illegality: 28. i) Nashik District Labour Contract Co-operative Socie....
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....the writ court to exercise its extraordinary jurisdiction under Article 226 or supervisory jurisdiction under Article 227 of the Constitution of India so as to interrupt or stall the democratic process of election. Any irregularity or illegality in the acceptance or rejection of nomination papers, according to the said decision, is amenable to challenge by way of an election petition under Section 91, wherein all relevant issues can be adjudicated upon by leading both oral and documentary evidence. 32. Shri Bankar, therefore, urged that the petitioner, if aggrieved by the order passed by the appellate authority under Section 152A of the MCS Act or by the acceptance of nomination of any candidate, is not without a remedy and can avail of the statutory recourse under Section 91 of the Act after the conclusion of the election. He submitted that entertaining the present writ petition at this stage would amount to permitting pre-election interference in contravention of the well-settled legal position laid down by this Court and the Hon'ble Supreme Court in a catena of decisions. Accordingly, it was submitted that the writ petition is not maintainable and deserves to be dismissed on ....
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..../- and the auction was scheduled to be conducted on 17 March 2024. The most significant aspect of the notice is the statement of arrears as on 26 February 2025. It records that the dues under one loan account stood at Rs. 10,91,904/- plus interest, and the total arrears amounted to Rs. 6,52,52,922.68/-. 37. On the date of scrutiny, i.e., 6 March 2025, the petitioner filed a specific objection before the Returning Officer asserting that respondent No.5 had defaulted in repayment of multiple loans availed from Karad Urban Cooperative Bank, and that recovery proceedings under the SARFAESI Act had been initiated due to persistent default, thereby rendering respondent No.5 disqualified under Section 73CA. 38. In response, the reply filed by respondent No.5 is noticeably vague and evasive. Other than making a bare denial that he is not a defaulter and is not disqualified under Section 73CA, respondent No.5 failed to furnish any material particulars as to whether he had availed the loan in question, whether the loan was repaid in full, or if the notice published in the newspaper was unauthorized or fabricated. The absence of specific rebuttal lends credence to the objection raised b....
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.... disqualification under Section 73FF is self- operative upon compliance with the principles of natural justice, namely, the issuance of a show-cause notice. Therefore, the reliance placed by the Appellate Authority on Kerabaji and Keshavrao-both of which have been specifically overruled by the Full Bench in Narayan Gujabrao Bhoyar-is clearly misconceived and legally untenable. Once a binding Full Bench judgment declares the law on a subject, it is incumbent upon all subordinate forums and authorities to follow the law so laid down. The principle of judicial discipline demands that where a coordinate or larger Bench has settled the position, the same ought to be given effect to without deviation. Thus, the Appellate Authority, by overlooking the ratio of the Full Bench in Narayan Gujabrao Bhoyar and by relying upon decisions which stand impliedly and expressly overruled, has committed a serious error apparent on the face of the record, warranting interference in exercise of supervisory jurisdiction. 42. Therefore, prima facie, this Court is of the considered view that respondent No.5 appears to fall within the category of "defaulter" as defined under Section 73CA of the Maharasht....
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....were used correctly - it is not a full-scale appeal on facts. Therefore, allowing new evidence would go beyond the legal limits of this summary appeal. 46. The Act has made a clear distinction between two types of legal remedies: Section 152A is meant for a summary appeal - a quick and focused examination of the Returning Officer's decision, only on legal and procedural grounds. Section 91, on the other hand, allows for a detailed election petition where full evidence can be led, witnesses can be examined, and questions like a candidate's eligibility or other issues affecting the election can be properly investigated. 47. If new documents are allowed to be brought in during an appeal under Section 152A, it would upset the entire scheme of the Act. A simple and quick appeal would turn into a full trial, something which the legislature never intended. The law has given Section 91 as the correct forum for such detailed inquiries. Ignoring that would amount to bypassing the legal process. 48. In general legal practice, courts do not allow new documents or evidence to be filed at the appellate stage unless it is clearly shown that such evidence could not be di....
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...., challenging the rejection of a nomination paper, all validly nominated candidates are necessary parties to such appeal. In this context, it is pertinent to refer to the decision of the Division Bench of this Court in Kishor Rajaram Sawant vs Returning Officer in LPA No.142 of 1996, decided on 26th July 1996, wherein reliance was placed on an earlier Division Bench judgment in Tukaram Hari Khamkar v. Shree Bharat Urban Co-operative Bank Ltd. & Ors. (Writ Petition No.2614 of 1982 and connected matters). In the said judgments, the Division Bench has categorically held that in an appeal preferred under Section 152A of the MCS Act, challenging the rejection of a nomination paper, all validly nominated candidates are necessary parties to such proceedings. 53. The reasoning adopted by the Division Bench is rooted in the statutory scheme of Section 152A. Sub-section (1) thereof declares that the list of validly nominated candidates shall be final and binding, subject only to the outcome of an appeal under sub- section (2). The Division Bench observed that if the statutory finality attached to the list of nominated candidates is to be rendered subject to appellate scrutiny, and the res....
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....me Court examined in detail the provisions of Section 82 and Section 86(4) of the Representation of People Act, 1951, and categorically held that the contest in an election petition is statutorily designed to be confined to the candidates who contested the election, and none else. Section 82 mandates that a petitioner shall join as a respondent any candidate against whom allegations of corrupt practice are made. The Court observed that the concept of "proper parties" is alien to election jurisprudence under the said Act and that only those individuals who are expressly mentioned in the statute may be joined as respondents. It was further held that although the Civil Procedure Code may be applicable to the extent provided, its provisions are subordinate and subject to the scheme of the Representation of People Act, and cannot be invoked to enlarge the category of parties or to override specific statutory mandates. 58. The Hon'ble Supreme Court thus held in unequivocal terms that no party other than those permitted under Section 82 or 86(4) of the Representation of People Act, 1951 may be joined in election petitions. The purpose behind such restriction is to preserve the limited ....
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....ench in Tukaram Hari Khamkar (supra), and the subsequent decision in Kishor Rajaram Sawant (Supra), which appear to have read into Section 152A an implied requirement of impleadment of all validly nominated candidates, need reconsideration. The issue strikes at the core of maintainability, scope, and workability of election appeals under the MCS Act. While procedural safeguards must be respected, they cannot be expanded so as to defeat the purpose of the statute or impede access to remedies. 63. Mr. Godbole, the learned Senior Advocate appearing for the respondents, placed reliance on various authoritative pronouncements of the Hon'ble Supreme Court and of this Court, which have consistently held that once the election process has been set in motion, the writ jurisdiction of this Court under Article 226 of the Constitution of India ought not to be invoked, except in rare and exceptional circumstances. In view of the aforesaid submission, it becomes necessary to examine the legal position governing the scope of judicial interference under Article 226 of the Constitution of India in matters concerning elections under the MCS Act, particularly when the process of election has been ....
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....stage. The Division Bench cautioned, however, that such interference must be sparing and must not become a routine course of action. Each case must turn on its own facts and must be examined through the lens of whether interference is necessary to uphold the sanctity of the electoral process or to prevent manifest injustice. The principle that elections should proceed unimpeded must be balanced against the imperative that the process is conducted fairly, lawfully, and without arbitrary exclusion of eligible candidates. Thus, the settled position of law is that while the High Court must ordinarily refrain from interfering once the election process has commenced, such restraint is not an inflexible rule, and in appropriate cases where there is clear and demonstrable illegality apparent on the face of the record, particularly where there is a jurisdictional error or violation of statutory provisions, this Court is not powerless to act. In such cases, judicial intervention prior to the conduct of polling may be permissible, provided it does not result in undue disruption of the election programme. 66. The aforesaid view taken by the Division Bench of this Court in Pandurang Hindurao....
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....not lay down an absolute bar to judicial interference at the pre- election stage, and that it would be open to the Court to interfere where the illegality is glaring and ex facie apparent, and where grave injustice would be occasioned if such action were to be left uncorrected. 67. At this stage, it is also necessary to consider the binding pronouncement of the Hon'ble Supreme Court in Election Commission of India v. Ashok Kumar & Ors., (2000) 8 SCC 216. In the said case, while considering the maintainability of writ petitions under Article 226 of the Constitution after the commencement of election proceedings governed by the Representation of the People Act, 1951, the Apex Court delineated the scope of judicial review in such matters. It was held that though courts should ordinarily refrain from interfering once the election process has commenced, the jurisdiction of the High Court under Article 226 is not completely ousted and may still be exercised in exceptional cases, provided a dual test is satisfied: (i) That the relief sought from the Court does not have the effect of retarding, interrupting, protracting or stalling the counting of votes or the declaration of el....
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....a), where the impugned action of the Returning Officer, either in accepting or rejecting a nomination paper, is shown to be vitiated by a patent legal infirmity, or is ex facie without jurisdiction, or if the action is arbitrary or actuated by mala fides, the High Court may step in to ensure that the purity and legality of the electoral process are not compromised. It is a settled principle that the process of election must conform not only to the letter of the law but also to its spirit. Acceptance of a nomination paper is not a mere ministerial act; it is a quasi-judicial function to be exercised in accordance with the applicable statutory provisions, rules, and bye-laws. An error at this stage- particularly one that results in permitting a person who is statutorily disqualified or otherwise ineligible-has the potential to vitiate the entire process and defeat the mandate of a free and fair election. As such, while the general rule, as propounded in N.P. Ponnuswami (supra), is that disputes relating to elections must be addressed post-election by way of an election petition, that rule is not without exception. In this regard, it is pertinent to refer to the judgment of the Suprem....
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....ught can be granted without disturbing the larger electoral timeline or causing prejudice to the democratic process. 71. The Hon'ble Supreme Court in the case of Deoraj v. State of Maharashtra & Ors., (2004) 4 SCC 697, authoritatively expounded the scope and ambit of the power of the High Court to grant interim relief in cases where denial of such relief would virtually result in rendering the final relief infructuous. The Court observed that although an order granting interim relief may not be a fully reasoned one, the classic tripartite test of a strong prima facie case, balance of convenience, and irreparable injury generally operates in the background. It was further held that there may arise extraordinary situations where withholding interim relief would amount to defeating the ends of justice and effectively result in a denial of the very relief sought in the writ petition. In such circumstances, the Court is not precluded from granting interim relief which may have the effect of granting final relief itself, provided the case falls within the rare and exceptional category. 72. In paragraph 12 of the judgment, the Supreme Court observed: "Situations emerge wher....
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....ance with law, and any action by the Returning Officer that violates statutory requirements - such as failure to consider material disqualification or non-compliance with mandatory provisions of the Rules or Bye-laws - is amenable to judicial scrutiny at the pre- election stage. 75. In the facts of the present case, this Court is satisfied that the petitioner has demonstrated a case of such exceptional nature as would warrant interference at this stage. The material on record indicates that during the scrutiny of nomination papers, a specific objection was raised by the petitioner pointing out that respondent no. 5 had defaulted on a substantial financial liability amounting to over Rs. 6 crores, as evidenced by a public notice issued by the secured creditor, published in a widely circulated newspaper. The original publication was duly produced before the Returning Officer during the scrutiny proceedings. Despite this, the Appellate Authority, relying on overruled judgment and ignoring original newspaper containing notice under rule 8(6) of rules, proceeded to accept the nomination paper. In such circumstances, the omission on the part of the Appellate Authority to give due cons....