PRALHAD & ORS. versus DEORAO & ORS.

Citation: [2009] 8 S.C.R. 777 · Decided: 12-05-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

-
[2009] 8 S.C.R. 777 
PRALHAD & ORS. 
v. 
DEORAO & ORS. 
(Civil Appeal No. 3493 of 2009) 
MAY 12, 2009 
[S.B. SINHA AND CYRIAC JOSEPH, JJ.) 
Maharashtra Co-operative Societies Act, 1960 - s. 157 
- Co-operative society registered under the Act - Writ petition 
A 
B 
for direction to conduct election of Board of Directors of C 
Society and for quashing the order passed by State uls. 157 
appointing nominated Board of Administrators of the Society 
- High Court quashing the order, directing that election of the 
Society be held - Interference with - Held: Not called for -
Purported order passed by State u/s. 157 was not in 
D 
accordance with law. 
Respondent No. 3-Co-operative society was 
registered under the Maharashtra Cooperative Societies 
Act, 1960 in year 1991. The Sate Government had a share 
E 
capital. The affairs of the society were not managed and 
no meeting was held. The State appointed a committee 
to manage the affairs of the society for of three years but 
it took no steps. The term of the Committee was extended 
and an administrator was appointed. Since 1994 no 
election was held. In 2004, a Special General Meeting was 
F · 
convened and request was made to the State to grant 
financial assistance and also to appoint an Administrative 
Board. It was also resolved that no election be held 
unless respondent no. 3 becomes functional. First 
Respondent filed writ petition for a direction upon the G 
respondent no.5 to conduct election of the Board of 
Directors of the Society within a fixed time frame, and that 
the order dated 29.6.2007 passed by the respondent no. 
6 appointing a nominated Board of Administrators of the 
777 
H 
778 
SUPREME COURT REPORTS 
{2009] 8 S.C.R. 
A Society till 19.6.2009 be quashed. The said order was 
passed during pendency of the writ petition but was not 
produced before the High Court. By the said order ,the 
Administrative Board appointed by the State Government 
was dissolved, and in exercise of powers u/s 157 of the 
B Act, the State Government appointed Administrative 
Boar:! of new persons who were eligible for appointment 
as Administrator, for a period of 2 years i.e. till 19.06.2009. 
High Court quashed the said order directing the 
appellants to hold the election of the Society. Hence the 
c present appeal. 
Dismissing the appeal, the Court 
HELD:1.1. Section 157 of the Maharashtra Co-
operative Societies Act, 1960 empowers the State by 
D general or special order to exempt any society or class 
of societies other than co-operative credit structure entity 
• 
from any of the provisions of Act, or of the rules made 
thereunder, and/or to direct that such provisions would 
apply to such society or class of societies other than co-
E operative credit structure entity with such modifications 
not affecting the substance thereof as may be specified 
-
therein. The proviso appended thereto, however, 
provide~; that no order to the prejudice of any society 
shall be passed, without an opportunity being given to 
-
F such society to represent its case. The Act was evidently 
,.....
enacted for the purpose of giving effect to the cooperative 
movement. It is based on a constitutional policy. [Paras 
13 and 14) [787-F-H; 788-A] 
G 
1.2. The preamble of the Act clearly shows that the 
same was enacted with a view to give effect to the 
provisions contained in Part IV of the Constitution of 
India. The State is empowered onder the Act to issue a 
. ~
general or special order directing exemption from 
application of the provisions of the Act. It must, however, 
H 
PRALHAD & ORS. v. DEORAO & ORS. 
779 
be done in an exceptional situation. An order by the State 
A 
providing for a power of delegated legislation must be 
·' 
exercised in the manner laid down therein. An order in 
terms of section 157 of the Act must be issued in terms 
of the provisions contained in Article 162 of the 
Constitution of India. [Para 14] [788-F-H] 
B 
1.3. The State of Maharashtra before the High Court 
·" 
as also before this Court did not bring on record any 
material to show as to under what circumstances the said 
power was exercised. The necessity to exercise the said c 
power has not been disclosed. However, exercise of 
such power is a conditional one. The proviso appended 
to Section 157 mandates an opportunity of being heard .. 
There is nothing on record to show that such an 
opportunity was provided. It cannot be understood as to 
D 
why the copy of the Government Order as such is not 

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