Summary
On complaints under Section 11 of the Maharashtra Co-operative Societies Act, the Regional Joint Director (Sugar) removed 1,415 members of a Kolhapur sugar co-operative as ineligible under its bye-laws. He acted on one omnibus show-cause notice sent to the society, under a High Court deadline. The minister's appeal and the High Court writ petitions failed. The Supreme Court set aside all three orders. A committee report containing findings on each member's eligibility had been relied on but never disclosed. Following T. Takano and B. Karunakar, a quasi-judicial authority must disclose relevant material it relies on, and the non-disclosure clearly prejudiced the members. Ouster from membership demands individual consideration, which never happened. The matter was remitted with directions to disclose the report and complaints, take replies and decide afresh after a hearing.
Issues
- Whether an order under Section 11 of the Maharashtra Co-operative Societies Act, 1960 removing about 1,415 members as ineligible, passed on an omnibus notice without disclosing the committee report relied upon or considering individual eligibility, violated natural justice.
Provisions considered
- Sections 11 and 152, Maharashtra Co-operative Societies Act, 1960An order under Section 11 ousting members has serious consequences, and natural justice must be observed for each member whose membership is to be ended; the appellate order under Section 152 suffered from the same defect. (¶¶ 5, 9, 21)
- Articles 136 and 226 (natural justice), Constitution of IndiaA quasi-judicial authority must disclose relevant material it relies upon; non-disclosure vitiates the decision where prejudice is shown (T. Takano v. SEBI, ECIL v. B. Karunakar). (¶¶ 17, 18, 19)
Held
- The committee report with findings on individual eligibility was relied upon and relevant but was never supplied to the members or the society; since no other specific grounds of ineligibility were furnished, its non-disclosure clearly prejudiced them. (¶¶ 16, 17, 18, 19)
- Acting in haste under a court-fixed deadline on an omnibus notice, neither the Regional Joint Director nor the appellate authority considered the ground of ineligibility or the material relating to each member, which was a clear breach of natural justice given the serious consequence of ouster. (¶¶ 20, 21)
- Although the High Court decided only the Section 11 jurisdiction point, serious factual objections had been raised, and ousting so many members without individual consideration would be a miscarriage of justice; the matter is remitted with directions for disclosure of the report, complaints and documents within one month, replies within one month, and a fresh decision after hearing within three months. (¶¶ 22, 23)
Result
Civil Appeal Nos. 88-89 of 2023 allowed; the Bombay High Court judgment dated 22.09.2022 in W.P. Nos. 4647 and 4609 of 2021, the Regional Joint Director's order dated 14.02.2020 and the appellate order dated 18.02.2021 set aside and the proceedings restored for fresh decision; the connected special leave petitions restored and disposed of in those terms.