Mumbai: Grant of membership of a cooperative society to any person can be challenged only by filing a dispute before the co-operative court under section 91 of the Maharashtra Co-Operative Societies Act (MCS Act), 1960, held the Bombay High Court recently.
Justice Arun Pednekar of the Aurangabad bench observed: “If membership is granted to any person is in contravention of MCS Act and is thus disputed, then the same can be remedied only by filing a dispute under section 91 of MCS Act by giving proper notice to the aggrieved person and the same has to be done by adopting appropriate proceedings before the Cooperative Court…”
Proceedings under section 79A are misconceived: Court
“The proceedings under section 79A are misconceived. As there can be no public interest direction under section 79A of MCS Act in contravention of section 23 of MCS Act, the writ petition is dismissed,” the court added.
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Section 23 of the Act provides that a society shall not refuse membership to any qualified person without any sufficient cause. Section 79A provides that the state government can pass directions against the cooperative society in public interest.
The HC was hearing a petition filed by office holders of the respondent Parner Taluka Sahakari Bank Limited – a cooperative society under the Act – challenging membership of 1405 members. The plea claimed that the bank illegally inducted 1405 members without following due procedure only for the purpose of the election as they are favourable to the elected body. They further claimed that they had filed several complaints before the Commissioner for Cooperation and Registrar, Co-operative Societies, Ahmednagar.
Membership of only 13 members was invalid
The Commissioner called for an enquiry report from the District Deputy Registrar and Assistant Registrar of the Cooperative Societies. The latter submitted a report saying that 144 members did not sign the membership application or complete KYC. Hence, the Assistant Registrar recommended action under section 79A of the Act against the bank. The bank contended that documentation of only 13 newly inducted members was not complete. Hence, the Commissioner declared that membership of 1392 members is legal and membership of only 13 members was invalid.
The petitioners filed a revision petition before the Minister of Co-operation, Textile and Marketing Department which was dismissed. Hence, they approached the high court.
The court said that the fact that all the membership applications were accepted in one day makes no difference as the applications were scrutinised and found to be valid by the Commissioner. The court further held that merely because the Assistant Registrar reported that 144 members did not sign the membership form or did not comply with the KYC norms, is not sufficient to revert their membership. The commissioner has verified the entire record and held that the membership of 1392 members is legal and valid, the court observed.
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