Bombay High Court
Smt Meenakshitai Arjunrao Watti And … vs The State Of Maharashtra Through Its … on 30 January, 2025
Author: M.S.Sonak
Bench: M.S.Sonak
WP-12987-2018 (F).docx
2025:BHC-AS:4522-DB
Darshan Patil
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 12987 OF 2018
1. Smt. Meenakshitai Arjunrao Watti, ]
Aged about 53 years, Occ. Director ]
Resident of Mukkam Post Rajaswa ]
Society, Jai-Vijay Chowk, Waghapur, ]
Yavatmal. ]
2. Ashok s/o Bhaurao Mangam, ]
Aged about 44 years, Occ. Director ]
Resident of Mukkam Post Nanza, ]
Tahsil Kalamb, ]
District Yavatmal. ]
3. Prakash s/o Tulshiram Dadmal, ]
Aged about 54 years, Occ. Director ]
Resident of Mukkam Post Wagegaon ]
(Bhoyer), Tahsil Warora, ]
District Chandrapur. ]
4. Kewalrao s/o Tulshiram Kale, ]
Aged about 56 years, Occ. Director ]
Resident of Mukkam Post Gaulkheda]
Bazaar, Tahsil Chikhaldara, ]
District Amravati. ]
5. Bharatlal s/o Thukelsing Dudhnath, ]
Aged about 62 years, Occ. Director ]
Resident of Mukkam Post Deori, ]
Tahsil Deori, ]
District Gondia. ]
6. Dhanraj s/o Haribhau Mahale, ]
Aged about 42 years, Occ. Director ]
Resident of Mukkam Post Ware, ]
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Tahsil Dindori, ]
District Nashik. ]
7. Sunil s/o Chandrakant Bhusara, ]
Aged about 36 years, Occ. Director ]
Resident of Mukkam Post Hirwe ]
Pimpalwada, Tahsil Mokhada, ]
District Palghar. ]
8. Vikas s/o Dulhaji Walvi, ]
Aged about 42 years, Occ. Director ]
Resident of Mukkam Bangda, ]
Post Walsai, ]
Tahsil and District Nandurbar. ]
9. Smt. Tarabai Shankar Malekar, ]
Aged about 60 years, Occ. Director ]
Resident of Mukkam Post Saraste, ]
Tahsil Tryambakeshwar, ]
District Nashik. ]
10. Madhukar s/o Nimbaji Kadhe, ]
Aged about 49 years, Occ. Director ]
Resident of Mukkam Post Soonawale]
Tahsil Junnar, ]
District Pune. ]
11. Magan s/o Jura Walvi, ]
Aged about 59 years, Occ. Director ]
Resident of Mukkam Post Aatlipada, ]
Tahsil Nawapur, ]
District Nandurbar. ]
12. Devidas s/o Pandurang Patil, ]
Aged about 65 years, Occ. Director ]
Resident of Mukkam Post Saturle, ]
Tahsil Mokhada, ]
District Palghar. ] ...Petitioners
VERSUS
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1. The State of Maharashtra, ]
Through its Secretary, ]
Tribal Development Department, ]
Mantralaya (Extension), ]
Mumbai - 400 032. ]
2. The Maharashtra State Cooperative ]
Tribal Development Corporation ]
Limited, Nasik, ]
A society registered under the ]
Maharashtra Cooperative Societies ]
Act, 1960 having registration ]
No.P.N./G.N.L. (A) 1/1972, having ]
registered office at Adiwasi Vikas ]
Bhawan, Second Floor, Ram Ganesh ]
Gadkari Chowk, Old Agra Road, ]
Nasik - 422 002. ]
Through its President. ]
3. The Commissioner of Cooperation ]
and Registrar Cooperative Societies ]
(Maharashtra State), Second Floor, ]
New Central Building, ]
Pune - 411 001. ]
4. Shri Vishnuji Sawra, ]
The Hon'ble Minister, ]
Adiwasi Vikas Department, ]
Government of Maharashtra, ]
Mumbai and the President of the ]
Maharashtra State Cooperative Tribal]
Development Corporation Limited, ]
Nasik. ]
5. Union of India, ]
Through its Secretary of Ministry ]
th
of Law and Justice, 4 Floor, A-Wing ]
Shastri Bhavan, New Delhi, ]
110001. ] ...Respondents
__________________________________________________________
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A PPEARANCES -
Mr Sandeep S. Salunkhe, for the Petitioners.
Dr. Birendra B. Saraf, AG, a/w Ms Neha S. Bhide, GP, Mr Jay
Sanklecha, 'B' Panel Counsel, Mr S. H. Kankal, AGP, Mr.
Y. D. Patil, AGP, for the Respondent-State.
Ms Kavita N. Solunke, for Respondents 2 and 4 (MSCTDC).
__________________________________________________________
CORAM : M.S.Sonak &
Jitendra Jain, JJ.
RESERVED ON : 28 January 2025
PRONOUNCED ON : 30 January 2025
JUDGMENT (Per MS Sonak J):
–
1. Heard learned counsel for the parties.
2. Rule. At the request of and with the consent of the
learned counsel for the parties, the Rule is made returnable
immediately. Even otherwise, there are orders posting this
matter for final disposal.
3. The petitioners at the time of the institution of this
petition were the Directors of the Maharashtra State
Cooperative Tribal Development Corporation Limited, Nashik
(Respondent No.2) (“Corporation”). This is a society
registered under the Maharashtra Co-operative Societies Act,
1960 (“MCS Act“) and is concerned with the welfare of the
tribals.
4. The petitioners have pleaded that in terms of the bye-
laws of the Corporation, its affairs are controlled and
managed by the board of directors comprising 36 directors.
The petitioners have pleaded that the State Legislature passed
the Maharashtra State Cooperative Societies (Amendment)
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Act, 2013, effective 14 February 2013. By Section 30 of this
Amendment Act of 2013, Section 73AAA was inserted. The
first proviso to Section 73AAA (1) restricts the maximum
number of directors in the Cooperative society to 21.
5. Mr Sandeep Salunkhe, learned counsel for the
petitioners, submitted that Section 73AAA, including in
particular the first proviso to sub-section(1) thereof, is ultra-
vires, unconstitutional, null and void because:-
(a) the impugned amendment was forced upon the
State Legislature by the Constitution (97th Amendment)
Act, 2011. This Constitutional amendment was declared
ultra-vires by the Gujarat High Court vide its judgment
and order dated 22 April 2013 in Writ Petition (PIL) No.
166 of 2012. At the time of the institution of this
petition, the Hon’ble Supreme Court granted Special
Leave to Appeal the Gujarat High Court’s decision. But
no interim relief was granted.
(b) Mr Salunkhe submitted that finally, in Union of
India Vs. Rajendra N. Shah1, Hon’ble Supreme Court
upheld the Gujarat High Court’s judgment and order
except to the extent it had struck down the entirety of
Part IX-B of the Constitution of India. However, the
Hon’ble Supreme Court declared that Part IX-B of the
Constitution is operative only insofar as it concerns
multi-state cooperative societies both within the various
states and in the Union Territories of India.
1
2021 SCCOnline SC 474
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(c) Accordingly, Mr Salunkhe submitted that once the
Constitutional amendments were declared as ultra-vires
and inapplicable to cooperative societies, the impugned
amendments would also have to be declared as ultra-
vires, unconstitutional, null and void.
(d) Mr Salunkhe submitted that the Corporation was
formed to address to the welfare of the tribals. Bye-laws
had provided for 36 directors to give representation to
the various districts with sizable populations of tribals.
He submitted that without any rationale, rhyme or
reason, the legislature could not have amended the MCS
Act and restricted the number of directors to only 21.
He submitted that such a reduction is arbitrary and,
therefore, violative of Article 14 of the Constitution. He
submitted that such restriction is against the cooperative
principles and amounts to an unreasonable restriction
on the Right guaranteed by Article 19(1)(c), which
concerns the Right to form cooperative societies,
associations, or unions. Accordingly, he submitted that
the impugned amendment deserves to be struck down.
(e) Mr Salunkhe submitted that Section 73B of the
MCS Act provides for reservations inter-alia to members
belonging to the Scheduled Castes, Other Backward
Classes and De-notified Tribes or Special Backward
Classes. He submitted that in terms of the bye-laws of
the Corporation, only tribals are permitted to be
members of the Corporation. Therefore, he submitted
that mandating reservations for members who are not
tribals would be impossible to comply with. He,
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therefore, submitted that the impugned amendments
must be declared illegal, unconstitutional, null and void.
6. Mr Salunkhe submitted that the Hon’ble Supreme Court
already addressed relief for the declaration of Part IX-B,
containing Articles 243ZH to 243ZT, as ultra-vires the
Constitution of India in the case of Rajendra N. Shah (supra).
As such, the petitioners were not pressing for this relief.
7. Based on the above contentions, Mr Salunkhe submitted
that the provisions of Section 73AAA in the MCS Act are to be
struck down as arbitrary, unconstitutional, null and void. He
submitted that in any event, the provisions, to the extent they
restrict the number of directors of the Corporation to 21 or for
that matter, 25, should be struck down, and the Corporation
must be permitted to have 36 directors as provided by its bye-
laws.
8. Learned Advocate General, at the outset, submitted that
there was a presumption in favour of constitutionality, and the
petitioners have not rebutted this presumption. He submitted
that there is no challenge to the legislative competence of the
State, and no case is made out of any violation of the Articles
in Part III of the Constitution. He relied on Charanjit Lal
Chowdhury Vs. Union of India2; Amalgamated Tea Estates Vs.
State of Kerala3; B.K. Pavitra Vs. Union of India4; State of A.P.
Vs. McDowell & Co.5; State of MP Vs. Rakesh Kohli 6; Dr Jaya
Thakur Vs. Union of India7 in support of his contentions.
2
1950 SCC Online SC 49 at Pr.40-43
3
(1974) 4 SCC 415 at Pr.10-12
4
(2019) 16 SCC 129 at Pr. 96 and 97
5
(1996) 3 SCC 709 at Pr. 43
6
(2012) 6 SCC 312 at Pr. 16, 17, 26-28
7
(2023) 10 SCC 276 at Prs.70-74
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9. Learned AG submitted that the allegations regarding the
violation of Articles 14 or 19 are extremely vague and bereft
of any particulars. He submitted without unambiguous
pleadings, challenges to the constitutionality of statutory
provisions should not be entertained. He relied on Amrit
Banaspati Co. Ltd. Vs. Union of India & Ors. 8; Aparna
Chaterjee Vs. Union of India9; Bank of Baroda Vs. Rednam
Devi10; Ashutosh Gupta Vs. State of Rajasthan11.
10. Learned AG submitted after the decision of the Gujarat
High Court or after this decision was partly upheld by the
Hon’ble Supreme Court in Rajendra Shah (supra), it may have
been open to the State Legislature to delete impugned
amendments, but it was not obligatory to do so. Still, the
State Legislature consciously chose to retain the amendments.
He submitted that the State Legislature made further
amendments to the MCS Act, which relaxed the restriction on
the maximum number of directors in committees for
cooperative societies subject to the fulfilment of specified
conditions. In this regard, he referred to the Maharashtra
Cooperative Societies (3rd Amendment) Act, 2021.
11. Learned AG submitted that there was no question of the
State Legislature being forced to carry out amendments to the
MCS Act. He submitted amendments that were introduced or,
in any event, retained because the legislature is best suited to
understand and appreciate the needs of its people. He
submitted that the State Government undertook a detailed
study regarding the functioning of the cooperative societies.
8
(1995) 3 SCC 335
9
2022(5) MhLJ 447 at Prs. 12-15
10
(1998) 4 SCC 470 at Pr. 13
11
(2002) 4 SCC 34 at Pr. 5 to 7
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There was consultation with various stakeholders through a
conference convened by the State Cooperative Ministers.
Accordingly, the learned AG submitted that no
unconstitutionality was involved in the impugned
amendments.
12. Learned AG submitted that issues concerning fixing the
maximum number of committee members or reservations are
essentially policy matters. He submitted that to save a clear
case of violation of any of the provisions in Part III, the courts
should not interfere with policy, mainly when such policy is
reflected in its statutory provisions like the MCS Act.
Accordingly, he submitted that there was no
unconstitutionality involved in the impugned amended
provisions of the MCS Act
13. Learned AG submitted that cooperative principles
require elections to managing committees or boards of
cooperative societies to be held on time. Accordingly, he
submitted that interim reliefs, if any, restraining the holding of
such elections should be vacated so that the State Cooperative
Election Authority (Authority) can proceed with the holding
of elections as soon as possible. Learned AG referred to the
order dated 25 November 2019 passed by the Hon’ble
Supreme Court in Baburao s/o Banduji Kubde Vs. Yavatmal
District Central Cooperative Bank Limited & Ors., in Special
Leave to Appeal (c) No. 8004 of 2019.
14. For all the above reasons, learned AG submitted that this
petition may be dismissed and the interim order, if any, be
vacated.
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15. Ms. Kavita Solunke, learned counsel for the second and
fourth respondents, adopted the arguments advanced by the
learned AG. She submitted that this petition may be dismissed
and interim orders, if any, vacated.
16. The rival contentions now fall for our determination.
17. The challenges in this petition are the following: –
(a) The Corporation’s resolution dated 09
December 2015 under the chairpersonship of the
fourth respondent and the Government Resolution
(GR) dated 29 June 2016 restricting the number
of directors on the board of directors to govern the
affairs of the Corporation from 36 to 21.
(b) To declare the insertion of Part IX-B
containing articles 243ZH to 243ZT as ultra-vires
to the Constitution of India and to strike down the
same.
(c) To declare Section 73AAA of the MCS Act as
ultra-vires the Constitution of India and to strike
down the same in the city before the wash and
aside of the same.
18. Insofar as the challenge to inserting Part IX-B in the
Constitution of India is concerned, Mr Salunkhe fairly
submitted that the Hon’ble Supreme Court has already
addressed this issue in the case of Rajendra N. Shah (supra).
Accordingly, Mr Salunkhe clarified that the petitioners were
not pressing for relief concerning the insertion of Part IX-B in
the Constitution of India.
19. Thus, challenges that survive concern the resolution
dated 09 December 2015 and GR dated 29 June 2016, as well
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as the challenge to the constitutional validity of section
73AAA of the MCS Act as obtained on the date of institution
of the petition. No independent arguments were advanced to
challenge the resolution dated 09 December 2015 or GR dated
29 June 2016. Mr Salunkhe submitted that if Section 73AAA
of the MCS Act is struck down, then the resolution dated 09
December 2015 or the GR dated 29 June 2016 would be of no
avail and based upon the same, there could be no reduction in
the number of directors on the board of the second
respondent Corporation. Accordingly, he submitted the main
challenge in this petition was to the Constitutional validity of
Section 73AAA of the MCS Act.
20. Before we consider the provisions of Section 73AAA of
the MCS Act and the challenges to them, it is necessary to
briefly refer the constitutional provisions, the decision of the
Hon’ble Supreme Court in Rajendra Shah (supra), and the
provisions of Section 73AAA.
21. The central government contemplated reforms in
legislation relating to cooperative societies in the states and
union territories. In this regard, several consultations were
held with the State Governments. A conference of the State
Co-operative Ministers was held in 2004, wherein
amendments were also discussed. A resolution was passed at
the conference of the State Co-operative Ministers.
Subsequently, on 10th May 2005, a High-Power Committee
was appointed to review the co-operative sector’s
achievements, identify the sector’s challenges and suggest
appropriate policy and legislative changes required in the co-
operative legislation across the country.
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22. Based upon all this groundwork, the Constitution (106
Amendment) Bill, 2006, was introduced in Lok Sabha on
22nd May 2006, which contemplated the introduction of Part
IX-B to the Constitution. Draft Article 243ZJ(1) in the Bill
restricted the maximum number of directors of a co-operative
society to twenty-one, except for a state-level co-operative
society. The Standing Committee on Agriculture (14th Lok
Sabha) considered the said Bill and submitted their report
after inviting the views of various State Governments and the
High-Power Committee on 20th August 2007. The report
recommended that the maximum number of Directors in a
cooperative Society, including for state-level co-operative
societies, should be restricted to 21 irrespective of their size.
This was because it has been observed that there were huge
boards that made it very difficult to arrive at reasonable
decisions.
23. The Standing Committee recommended as under:
“Clause 243 ZJ (1) The Clause read as under: “The board
shall consist of such number of directors as may be
provided by the Legislature of a State, by law: Provided
that the maximum number of directors of a cooperative
society shall not exceed twenty-one, except in the case of a
State level cooperative society”.
The Committee note that this Clause specifies that the
maximum number of Directors shall not exceed twenty-
one except in the case of a State level co-operative society.
It has been observed that in many cases there are very
large boards and it is very difficult to arrive at reasonable
decision. The Committee, therefore, recommend that the
maximum number of directors including functional
directors should be restricted to twentyone for all
cooperatives irrespective of their sizes. Hence, the words
‘except in case of a State Level co-operative society’ should
be deleted from the proviso to Clause 243 ZJ (1).
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24. The Cabinet considered the Standing Committee report
in a meeting held on 8 August 2008. The agriculture minister
gave the requisite notice for consideration of the Bill in
accordance with the rules of procedure. However, the Bill
could not be discussed in the Lok Sabha and lapsed when the
Lok Sabha was dissolved on 18 May 2009.
25. The High-Power Committee submitted its report in May
2009. After receipt of the final report of the High-Power
Committee in May 2009, the Constitution (111th
Amendment) Bill, 2009, was presented in Lok Sabha and
referred to the Committee of Agriculture for detailed
examination. The Committee, after inviting the views of
various stakeholders, submitted its report in August 2010.
Thereafter, the said Bill was approved in both houses, and the
Constitution (97th Amendment) Act, 2011 was passed,
amending the Constitution to inter alia include Article 43-B
and insert Part IX-B to the Constitution. Article 243ZJ of the
Constitution restricted the maximum number of directors of a
cooperative society to 21. Unlike the previous Constitutional
Amendment Bill and in terms of the recommendation of the
Standing Committee, the exception for State level co-
operative societies was removed. Article 243ZT further
provided that notwithstanding anything in this Part, any
provision of law relating to co-operative societies in force in a
State immediately before the commencement of the
Constitutional (Ninety Seventh Amendment) Act, 2011, which
is inconsistent with the provisions of Part IX-B, shall continue
to be in force until amended or repealed by a competent
legislature or until the expiration of one year from such
commencement, whichever was less.
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26. The MCS Act was amended by the Amendment Act to
bring its provisions in consonance with Part IX-B of the
Constitution. One of the amendments was the insertion of
Section 73AAA in the MCS Act. This is transcribed below for
the convenience of reference:
“12[73AAA. Constitution of committee
(1) The Committee shall consist of such number of
members as may be provided in the by-laws:
Provided that, the maximum number of members of the
committee shall not exceed twenty one:
[Provided further that, in case of an apex society and, in
13exceptional circumstances, in case of any other society, the
Registrar may increase the number of members of the
committee upto twenty-five with the prior approval of the
State Government:][Provided also that], the provisions of the Banking
14Regulation Act, 1949, shall apply to all the societies
carrying the business of banking.
(2) The Committee may co-opt “expert directors”
relating to the objects and activities undertaken by the
society:
Provided that, the number of expert directors shall not
exceed two, which shall be in addition to the maximum
number of members of the committee as specified in the
first proviso of sub-section (1):
[Provided further that, the Committee may nominate one
15person as a functional director:
Provided also that, in the case of such societies or class of
societies, as the State Government may by general or
special order notify, where the number of permanent
employees of the society is twenty-five or more, the
committee shall include,–
12
Section 73AAA was inserted by Mah. Act No. 16 of 2013 dt. 13-8-2013, s.30, (w.e.f. 14-2-2013).
13
Proviso was inserted by Mah. 28 of 2022 dt. 28-3-2022, s.7(1), (w.e.f. 28-3-2022).
14
Substituted for the words “Provided further that” by Mah. 28 of 2022 dt. 28-3-2022, s.7(2), (w.e.f. 28-3-
2022).
15
Proviso was substituted by Mah. 36 of 2016 dt. 17-10-2016, s.3(a), (w.e.f. 2-3-2016).
Page 14 of 26
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(i) where the committee consists of not more
than eleven members, one representative of the employees
of the society; and
(ii) where the committee consists of more than
eleven members and not more than twenty-one members,
two representatives of the employees of the society.
Such representatives of the employees shall be selected by
the union or unions recognised under the Maharashtra
Industrial Relations Act, or the Maharashtra Recognition of
Trade Unions and Prevention of Unfair Labour Practices
Act, 1971, from amongst the employees of the society.
Where there is no such recognised union or unions or
where there is no union at all or where there is a dispute
in relation to such issues including whether a union is
recognised or not, then such representatives of the
employees shall be elected by the employees of the society
from amongst themselves in the prescribed manner. No
employee who is under suspension shall be eligible for
being selected or elected or for being continued as a
member of the committee under this proviso:
Provided also that, the representative of the employees
selected or elected as per the provisions of the third
proviso shall have the right to take part in the meetings of
the committee, but shall have no right to vote therein.]
16
[Provided also that, 17[in respect of society, excluding the
Housing Society, having assistance of the Government in
the form of share capital, loan, guarantee, grant, the
Government land or any other form whether cash or kind],
the committee shall also include following two members
nominated by the Government, namely:–
(i) one Government Officer not below the rank
of the Assistant Registrar of Cooperative Societies, and
(ii) one person having such requisite experience
relating to the work of the society and such qualifications,
as may be specified by the Government, by an order
published in the Official Gazette:]
18
[* * *]:
16
Proviso was substituted by Mah. 36 2016 dt. 17-10-2016, s.3(b), (w.e.f. 2-3-2016).
17
Substituted for the words “in respect of the society having contribution of the Government towards its
share capital” by Mah. Act 64 of 2018, s.2, (w.e.f. 8-6-2018).
18
Proviso was omitted by Mah. 36 of 2016 dt. 17-10-2016, s 3(c), (w.e.f. 2-3-2016).
Page 15 of 26
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Provided also that, the functional directors and the
members nominated by the state Government under the
third proviso of a society shall also be the members of the
committee and such members shall be excluded for the
purposes of counting the total number of members of the
committee specified in the first proviso to sub-section (1):
Provided also that, such expert directors shall not have the
right to vote at any election of the society and shall not be
eligible to be elected as office bearers of the committee.
(3) The term of the office of the elected members of the
committee and its office bearers shall be five years from
the date of election and the term of the office bearers shall
be co-terminus with the term of the committee 19[and on
the expiry of the term of the committee, the members shall
be deemed to have vacated their offices as members of the
committee].
[Provided that, if the term of office of the elected
20
members of the committee and its office bearers has
expired, and if the election to the committee of the society
could not be held due to 21[imposition of lockdown in the
State in view of the Covid-19 pandemic,] the orders issued
by the Government, from time to time, or any reason not
attributable to the members of the committee of the
society, such members and office bearers of the committee
shall be deemed to have continued as members and office
bearers of the committee till new committee is duly
constituted:]
[ [Provided further that], if the election to the
22 23
Committee of the society could not be held for any reason
not attributable to the members of the Committee of such
Society, the existing members of the Committee shall be
deemed to have continued till new committee is duly
constituted.]
(4) Any casual vacancy in the committee may be filled
in from amongst the members belonging to the same
category of persons in respect of which a casual vacancy
has arisen.
19
Inserted by Mah. 50 of 2018 dt. 9-8-2018, s.2, (w.e.f. 13-6-2018).
20
This proviso was added by Mah. 6 of 2022 dt. 20-1-2022, s.2(i), (w.r.e.f. 24-3-2020).
21
Del. By Mah. Act No. 26/2023
22
This proviso was added by Mah. 27 of 2020 dt. 12-10-2020, s.2, (w.e.f. 10-7-2020).
23
Substituted for the words “Provided that” by Mah. 6 of 2022 dt. 20-1-2022, s.2(ii), (w.e.f. 2-11-2021).
Page 16 of 26
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(5) (a) If, at any general election of members of the
committee, the committee could not be constituted after
declaration of results, then notwithstanding anything
contained in this Act or the rules or the by-laws of the
society, the returning officer or any other officer or
authority conducting such election shall, within seven days
of the declaration of two-thirds or more number of
members, forward their names together with their
permanent addresses to the Registrar, who shall, within
fifteen days from the date of receipt thereof by him,
publish or cause to be published such names and addresses
by affixing a notice on the Notice Board or at any
prominent place in his office; and upon such publication
the committee of the society shall be deemed to be duly
constituted. In determining two-thirds of the number of
members, fraction shall be ignored:
Provided that, such publication shall not be deemed,–
(i) to preclude the completion of elections of the
remaining members and the publication of their names
and the permanent addresses of the elected members
likewise as and when they are available; or
(ii) to affect the term of the office of members of
the committee under the Act;
(b) the names of the remaining members after
they are elected (together with their permanent
addresses), may also thereafter be likewise published by
the Registrar.]”
27. Meanwhile, the Constitution (97th Amendment) Act,
2011, was challenged before the Gujarat High Court. The
Gujarat High Court held that the insertion of Part IX-B by the
Constitution (97th Amendment Act), 2011, was
unconstitutional because it effectively sought to change List II
of the 7th Schedule of the Constitution of India without
following the procedure contemplated under the proviso to
Article 368(2) of the Constitution. This Judgment was
challenged before the Hon’ble Supreme Court.
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28. The Hon’ble Supreme Court in Rajendra Shah (supra)
partly upheld the judgment of the Gujarat High Court. The
Supreme Court held that the applicability of Part IX-B to the
State Cooperative Societies effectively sought to change the
lists under the 7th Schedule by encroaching on the power of
the States to legislate on subjects set out of List II without
following the procedure contemplated under Article 368(2).
The Supreme Court, however, held that Part IX-B of the
Constitution would continue to apply to Multi-state Co-
operative societies. In effect, the Hon’ble Supreme Court held
that the power to legislate in respect of State cooperative
societies was within the exclusive domain of the State
Government under List II of the 7th Schedule of the
Constitution of India. The same could not be indirectly
encroached upon by inserting Part IX-B to the Constitution
without following the procedure contemplated under the
proviso to Article 368(2).
29. After the Gujarat High Court and the Hon’ble Supreme
Court decided that Part IX-B of the Constitution did not apply
to State cooperative societies, the State legislature was free to
undo the amendments made to the MCS Act. In fact, after
considering these decisions, the legislature consciously chose
to retain the provision but made further amendments to the
MCS Act, which relaxed the restriction on a maximum
number of directors in committees for Cooperative Societies in
certain circumstances.
30. The Maharashtra Co-operative Societies amended
section 73AAA of the MCS Act (Third Amendment) Act, 2021
(Maharashtra Act no. XXVIII of 2022) to add a proviso
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enabling the Registrar to increase the number of Members of
the Committee of Apex Societies and, in exceptional
circumstances, of any other society up to 25 members with
prior approval of the State Government.
31. The Statement of Objects & Reasons for the 2021
Amendment makes the object clear:
“A new Part IX-B regarding Co-operatives Societies has
been inserted in the Constitution of India by the
Constitution (Ninety Seventh Amendment) Act, 2011. The
Government of Maharashtra has made various
amendments in the Maharashtra Co-operative Societies
Act, 1960 (Mah. XXIV of 1961) (hereinafter referred to as
“the said Act”, so as to make the provisions in the said Act
in consonance with the constitutional provisions of the
said Part IX-B.
2. The Gujarat High Court in the case of Rajendra Shah Vs
Union of India Chief Director (Co-operation)
(C/WPPIL/166 of 2012) has declared the said
Constitutional Amendment Act inserting Part IX-B ultra-
virus the Constitution. The Supreme Court, in Civil Appeal
No. 9108-9109 of 2014 has upheld the judgement of the
Gujarat High Court except to the extent that it strikes
down the entirety of Part IX-B of the Constitution of India.
The Supreme Court in the said judgment has declared that
Part IX-B of Constitution of India is operative only in so far
as it concerns multi-state co-operative societies both within
the various states and in the Union Territories of India. The
Government considers it expedient to make certain
amendments in the said Act for the interest of the society
members and for smooth functioning of the co-operative
movement.
3. The salient features of the proposed amendments to the
saidAct are as follows:–
(1)… …
(2) …
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(3) to amend section 73AAA to enable the Registrar to
increase the number of members of committee of apex
society and, in exceptional circumstances, of any other
society upto twenty-five, with the prior approval of the
State Government, in order to give representation to all
revenue divisions, districts or talukas in the committee of
the apex societies or any other Society, as the case may
be;”
j. Thus, the State Legislature after being conscious
that Part IX-B introduced by the Constitution (97th
Amendment) Act, 2011 to the Constitution was no longer
applicable to State Co-operative Societies amended the
MCS Act and provided for increase in the number of
Members of the Committee of Co-operative Societies in
certain circumstances. However, the State Legislature did
not think it appropriate to reintroduce provisions for
reservation to economically weaker section of the society
or for the employees of the Co-operative Societies. Various
other provisions of the MCS Act were also amended after
the State Legislature noticed that the Part IX B of the
Constitution was no longer applicable to State Cooperative
Societies.”
32. In terms of Article 246 of the Constitution, read with
Entry 32 of List II of the VIIth Schedule to the Constitution,
the State Legislature was empowered to legislate on matters
concerning Co-operative Societies. Therefore, no challenge
was raised by the Petitioners about the legislative competence
of the State Legislature to amend the MCS Act and insert
Section 73AAA therein. After the decision of the Hon’ble
Supreme Court in Rajendra Shah (supra), the State
Legislature, perhaps, could have withdrawn the impugned
amendments. Still, it would not be correct to hold that the
State Legislature was bound to withdraw the impugned
amendments. The record shows that the State Legislature
consciously decided to not only retain the impugned
amendments but carry out further amendments to the MCS
Act. Thus, the impugned provisions are those that the State
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Legislature has retained in its present form, even after taking
cognizance of the Hon’ble Supreme Court’s decision in
Rajendra Shah (supra). Learned Advocate General submitted
that the State Legislature has evinced a clear intention to
restrict the number of directors or committee members to 21
or up to a maximum of 25 in the exceptional circumstances
referred to in the third proviso.
33. Learned Advocate General, in the notes of arguments
submitted by him, stated the following at paragraph 10:-
“10. As detailed hereinabove, there was a detailed study
as regards the functioning of the Co-operative Societies
and consultation with the various State Governments
including a conference of the State Co-operative Ministers.
It is with the avowed object of improving the Co-operative
movement in the State of Maharashtra that the
amendments were introduced to the MCS Act. Under
Article 43B of the Constitution, the State is obliged to
endeavor to ensure democratic control and the
professional management of the co-operative societies. The
rationale underlying the introduction of the constitutional
amendments would be equally applicable to the
amendments introduced by the State Legislature to the
MCS Act. Neither the Gujarat High Court nor the Hon’ble
Supreme Court held that any of the amendments
introduced by the constitutional amendments constituted
an infringement of any rights recognized in Part III of the
Constitution. The decision of the Hon’ble Supreme Court
was confined to the procedural aspect of compliance with
the proviso to Article 368(2) In fact, the Hon’ble Supreme
Court has proceeded to hold that Part IX B would continue
to apply Multi State Co-operative Societies. After being
fully conscious that the provisions of Part IX-B of the
Constitution are no longer applicable to the State Co-
operative Societies, the State Legislature enacted the
Maharashtra Co-operative Societies (Third Amendment)
Act, 2021 (Maharashtra Act no. XXVIII of 2022) to further
amend the provisions of the MCS Act. Thus, after the
decision of the Hon’ble Supreme Court, the State
Legislature being conscious that Part IX-B was no longer
applicable as chosen to amend certain provisions andPage 21 of 26
WP-12987-2018 (F).docxretained the other amendments which were earlier
introduced.”
34. Upon due consideration of Mr Salunkhe’s first
contention, we find no merit therein. Although it is correct
that Part IX-B of the Constitution would not apply to Co-
operative Societies other than multistate Co-operative
Societies both within the various States and the Union
Territories of India, still, the position that the State
Legislatures have the legislative competence to legislate about
Co-operative Societies was reiterated by the Hon’ble Supreme
Court. Therefore, on the ground that a portion of Part IX-B of
the Constitution was held ultra-vires, the impugned
amendments introduced by the State Legislature cannot be
struck down.
35. The argument that the State Legislature was forced to
bring about such an amendment cannot be accepted. In any
event, the State Legislature has now decided to retain the
amended provisions. The State Legislature has, in fact, further
amended the provisions. Therefore, based on the decision of
the Gujarat High Court, which was partly upheld by the
Hon’ble Supreme Court in Rajendra Shah (supra), no case is
made out to strike down the impugned amendment. The State
Legislature has acted within its legislative competence.
Whatever may have been the motive of the State legislature at
the time of introducing Section 73 AAA, even after the
decision of the Gujarat High Court, which was partly upheld
by the Hon’ble Supreme Court in Rajendra Shah (supra), the
State Legislature consciously chose to not only retain the
introduced provision but also further amend the same. In any
event, it is well settled that the Legislature’s motives are
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irrelevant to determining the Constitutionality or otherwise of
the legislation it enacts.
36. The next argument is about the corporation being
formed to promote the welfare of tribals, and the provision of
36 directors in the bye-laws was to give adequate
representation to the various districts in which such tribals
had a sizable population. It was contended that the State
Legislature had ignored this vital consideration and, therefore,
the impugned amendment was arbitrary and violative of
Article 14 of the Constitution.
37. The above contention cannot be accepted because the
decision on the maximum number of directors is essentially a
policy decision. By restricting the number to 21 or, in
exceptional cases to 25, no constitutional provision can be
said to have been violated. A restriction cannot even be called
an unreasonable restriction on the right to form an association
or a Co-operative Society. In any event, no such arguments
were advanced on these lines. These are essentially policy
matters, and unless a case of clear violation of the rights in
Part III of the Constitution is made out, the Courts, in
exercising their powers of judicial review, do not strike down
legislation.
38. The above argument does not overcome the
presumption of constitutionality. The Legislature is presumed
to better understand its people’s Needs. It is supposed to have
considered the experience of cooperative societies and the
problems of decision-making due to unwieldy committee or
board size. Based on such arguments, The Constitutional
Courts do not strike down legislation. From the perusal of the
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pleadings, no ground regarding violation of Article 19(1)(c) of
the Constitution is adequately raised or made out. Even the
ground based on the alleged breach of Article 14 is quite
vague. The entire emphasis was that the bye-laws allowed 36
directors, but the impugned amendment now restricts this
number to 21 or 25; therefore, the provision is arbitrary or
unconstitutional. This is not acceptable. Without proper
pleadings, it would not be safe to entertain challenges to
statutory provisions.
39. Mr. Salunkhe made some submissions based on Section
73B of the MCS Act. However, the provisions of Section 73B
of the MCS Act are not challenged in this Petition. Sections
73AAA and 73B of the MCS Act provide for the inclusion of
certain persons, such as expert directors, permanent salaried
employees, and members belonging to the Scheduled Castes,
Scheduled Tribes, Other Backward Classes, De-notified Tribes,
or Special Backward Classes, in the committees or the board
of directors. However, that by itself will not render such
provisions ultra vires or unconstitutional.
40. The provisions relating to reservations are primarily
enabling. Whether or not to provide for reservations is mainly
a policy decision. In such circumstances, there is no question
of entertaining challenges not supported by proper pleadings.
It was not clear whether the Petitioners objected to the
reservations provided or to some of the earlier reservations
that were deleted. The effect of the Corporation allegedly not
permitting non-tribals to the membership of the society and
its impact on the reservation provisions is not a situation we
must deal with in this petition. Based on this premise, in any
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event, no case is made out to strike down the impugned
amendments in the MCS Act.
41. Based on none of the grounds urged by Mr. Salunkhe,
any case is made to grant any relief to the Petitioners. The
Petition was premised on the circumstance that upon the
declaration of Part IX-B to the Constitution as partly ultra
vires, the amendments introduced by the State Legislatures
were also bound to be declared ultra vires, illegal or
unconstitutional. This premise overlooks that the Hon’ble
Supreme Court in Rajendra Shah (supra) has reiterated that
the State Legislature has the legislative competence to
legislate about cooperative societies. In the entire Petition,
there is no serious challenge based on the contravention of
any of the provisions of Part III of the Constitution.
42. For all the above reasons, this Petition is liable to be
dismissed and is hereby dismissed. Interim order, if any, is
hereby vacated. Interim Applications, if any, are disposed of.
43. If the elections are due and have not been held due to
any interim orders, we direct the State Cooperative Election
Authority (Authority) to take all steps to hold them as
expeditiously as possible. Such elections must be concluded
within a maximum of six months from today. This is consistent
with the statement made by the learned Advocate General in
Writ Petition No.4547 of 2018. Meanwhile, suppose the board
whose term has expired is continuing. In that case, it shall
take no major policy decisions or expend or authorise the
expending of any Corporation funds other than for its routine
day-to-day operations and activities. Under no circumstances
should such boards continue beyond six months from today.
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44. This Petition is disposed of under the above terms
without any cost orders.
(Jitendra Jain, J) (M. S. Sonak, J)
Signed by: Darshan Patil
Designation: PA To Honourable Judge Page 26 of 26
Date: 30/01/2025 17:52:21