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Deepak Ananda Patil vs The State of Maharashtra & Ors.

Civil Appeal · 2023 INSC 11Decided 4 Jan 2023
Civil Appeal Nos. 88-89 of 2023
Dr. Dhananjaya Y. Chandrachud · Pamidighantam Sri Narasimha · S. Abdul Nazeer

Background

Shri Chhatrapati Rajaram Sahakari Sakhar Karkhana, a cooperative sugar factory in Kolhapur district with over 17,000 cultivator members, requires each "producer member" under its bye-laws to be an adult who occupies land within the factory's area and grows sugarcane on at least 10 gunthas. In 2019 some complainants asked the Registrar to remove about 2,000 members as ineligible. The Regional Joint Director (Sugar), working under a High Court deadline to finish within two months, issued a single omnibus show-cause notice to the society and on 14 February 2020 struck off 1,415 members in one order. A departmental appeal to the Minister of Cooperation failed, and the Bombay High Court dismissed the members' writ petitions, holding only that the Registrar had power under Section 11 of the Maharashtra Cooperative Societies Act to enquire into eligibility even after the society's formation.

Decision Breakdown

The Supreme Court allowed the appeals and set aside the High Court's judgment, the Regional Joint Director's order and the Minister's appellate order. It found that a verification committee's report, which contained the findings on each individual member's eligibility, was relied on but never given to the members or the society, and there was no member-by-member consideration of the ground of ineligibility or the supporting documents. Citing the well-settled principle (reaffirmed in T. Takano vs SEBI) that an authority cannot decide against a person on material that person has not been shown and allowed to answer, the Court held this was a clear breach of natural justice that plainly prejudiced the members, some of whom had been enrolled since 1984. Removing a member from a cooperative is a serious consequence, so the rules of fair hearing must be observed for each member individually, not through one blanket order. The matter was sent back to the Regional Joint Director with directions to supply the committee's report, complaints and documents within one month, allow replies within another month, and then pass fresh orders after hearing the members within three months.

Lesson Learnt

No authority can take away your rights, such as membership of a cooperative, on the basis of a report or evidence you were never shown; you are entitled to see the material against you and to answer it. Mass or "omnibus" decisions affecting many individuals still require the authority to consider each person's case on its own facts.

Official source (sci.gov.in)View Judgment (PDF)

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