Holding

Officers of credit societies under liquidation retain the statutory right to elect members of market committees until a final winding‑up order is made, and thus cannot be barred from the electoral process.

Summary

The Supreme Court examined whether members of the managing committees of cooperative credit societies, which were subject to winding‑up proceedings under Section 107 of the Gujarat Co‑operative Societies Act, could vote in elections for Agricultural Produce Market Committee members as prescribed by Section 11(1)(i) of the Gujarat Agricultural Produce Markets Act. The Court held that the liquidation process only curtails certain rights of the officers and does not strip them of every statutory function conferred by another law. Section 11(1)(i) creates a distinct right for officers of credit societies to elect market committee members, a right that cannot be removed without express legislative authority. Since officers cease to be officers only upon a final winding‑up order, they retain the electoral right until such an order is passed. Consequently, the High Court's decision to delete their names from the voters' list was set aside and the appeals were dismissed.

Issues considered

Whether officers of cooperative credit societies facing liquidation under the Gujarat Co‑operative Societies Act are disqualified from participating in elections to Agricultural Produce Market Committees under the Gujarat Agricultural Produce Markets Act
Interpretation of the phrase "co‑operative societies dispensing agricultural credit" in Section 11(1)(i) of the Markets Act
Effect of an interim winding‑up order on the statutory rights of society officers

Legislation cited

Gujarat Agricultural Produce Market Rules, 1965s. Rule 7
Gujarat Agricultural Produce Markets Act, 1963s. 10, s. 11, s. 9
Gujarat Co-operative Societies Act, 1961s. 107, s. 108(3)(b), s. 110

Subjects

Cooperative societiesLiquidationElectoral rightsStatutory interpretationPublic mischiefGujarat lawAgricultural produce market committee

Judgment

(2016] 9 S.C.R. 866

A VINESHKUMAR MAVJIBHAI PARMAR
v.
DETHALI GOPALAk VIVIDH KARYAKARI
SAHAKARI MANDALI LTD. AND ORS.
'B (Civil Appeal No. 3888of2015)
NOVEMBER 16, 2016
[J. CH_ELAMESWAR AND PRAFULLA C. PANT, JJ.]
Agricultural Produce Market Committees:
c Gujarat Agricultural Produce Markets Act, 1963 (the Markets
Act) - ss.9,10 and 11 - Gujarat Co-operative Societies Act, 1961
(the Societies Act) - ss.107,108(3)(b) and 110 - Plea of appellant
that members of the Managing Committees of co-operative societies
(Officers of the Society) cannot participate in the election process
D of Agricultural Produce Marketing Committee constituted under the
Markets Act, when liquidation proceedings uls. l 07 of the Societies
Act are pending against them - Held: The legislature of Gujarat by
s.11 (1) of the Markets Act conferred on officers of a class of Credit
Societies (dispensing agriculture credit) to have an additional
function of electing melnbers of the market committees - Further,
E Legislature expressly provided under the Societies Act for the
curtailment of certain rights of the officers of societies facing
liquidation proceeding~ - However, at the same time it also declared
that such officers cease to be officers of the Society only when a
final order of winding up is passed - Therefore, merely because the
F officers of Credit Society facing liquidation are disabled from
enforcing certain rights attached to the office, it.does not necessarily
follow that they are disabled from perforn1_il}g every function
entrusted by law - Debarring managing committee members from
discharging their statutory obligation under the Markets Act would
G be productive of public mischief - Such an interpretation of the
statute must be avoided - Agriculture Produce Market Rules,] 965
- r. 7 - Co-operative Societies.
Dis,missing the appeals, the Court
HELD: 1. The. powers of the liquidator are specified under
H Sectio~ VO of the Gujarat Co-operative Societies Act, 1961
866
VINESHKUMAR MAVJIBHAI PARMAR v. DETHALI GOPALAK VIVIDH 867
KARYAKARJ SAHAKARI MANDALI LTD.

(Societies Act), the liquidator virtually becomes the caretaker A
manager of the society whose winding up is impending. At the
same time, Sec. 108(3)(b) of the Societies Act ~tipulates that the
officers of the cooperative society vacate their offices only on
the passage of the final order of winding up. Obviously, they
continue to be the office bearers but are disabled from enjoying
B
certain rights attached to the office and performing certain
functions to be performed by the holders of the office. [Para
21 ][875-E-F; 876-A]
2. The rights and functions of the OFFICERS' of a co-
operative society are many. Some of them are crel!_ted by the
statute under which the office is created. Others could be the c
creation of subordinate legislation (in the context of the present
case, even the bye laws of the society). The existence or tack of
such rights and functions depend upon the scheme and tenor of
the SOCIETIES ACT and the subordinate legislation made
thereunder. Such rights and functions are put an end to only by D
the operation of law i.e., the SOCIETIES ACT. [Para 22)[876-B-
C]
3. Apart from that, nothing prevents the legislature from
conferring by another law ailditional rights or functions on a person
holding an office created under the SOCIETIES ACT. The E
legislature of Gujarat by Section 11(1) of the Gujarat Agriculture
Produce Markets Act, 1963 (Markets Act) conferred on the 0

OFFICERS of a class of CREDIT SOCIETIES (dispensing
agriculture credit) an additional function of electing members of
the market committees. Such function is neither conferred on
the OFFICERS of all the societies functioning under the F
SOCIETIES ACT nor such function includes the right to elect
eveq.JUember of the concerned market committee. Such a
function obviously _creates a right in the officers of the societies.
Such a statutory right could not be taken away in the absence of
any express authority of law. [Paras 23, 24][876-C-E] G
4. The Gujarat legislature expressly provided under the
SOCIETIES ACT for the curtailment of certain rights of the.
officers of societies facing liquidation proceedings. At the same
time it also declared that such OFFICERS cease to be the officers
of the Society only when a final order of winding up is passed. In H
868 SUPREME COURT REPORTS [2016] 9 S.C.R.

A a given case ifthe Registrar after an appropriate enquiry following
the interim order of winding decides not to finally wind up the
society, the OFFICERS of ~he society would once again be entitled
to exercise all the rights associated with it and perform all the
functions attached to the office. Therefore, merely because the
officers of CREDIT SOCIETY facing liquidation are disabled from
B
enforcing certain rights attached to the office or perform certain
obligations appended to the office, it does not necessarily follow
that they are disabled from performing every function entrusted
by law to such office. [Para 25)[876-F-G; 877-A]
5. Credit Societies against which there is an 'interim order'
c of winding up are temporarily debarred from dispensing
agricultural credit, by virtue of the operation ofla~. The embargo
imposed by such interim order may or may not fructify into a final
order of winding up. On the face of such possibility of the society
resuming its activity of "dispensing agricultural credit" - to debar
D its managing committee members from discharging their statutory
obligation under the MARKETS ACT would be productive of
public mischief. Such an interpretation of the statute must be
avoided. [Para 31][878-E-G]
MC. V.S. Arunachala Nadar v. The State of Madras and
E Ors. AIR 1959 SC 300 : 1959 Suppl. SCR 92 -
referred to.
Case Law Reference
1959 Suppl. SCR 92 referred to Para 13

F CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3888
of2015.
From the Judgment and Order dated 17.03.2015 of the High Court
of Gujarat atAhmedabad in Special Civil Application No. 3 700of2015
WITH
G C.A. Nos. 3889, 3890, 3891, 3892, 3893, 3894 and 3896 of2015.
V. Giri, Sr. Adv., Satyam Chahya, Ms. Srishti Agnihotri, Ms.
Dharani Subramanian, Ms. Anitha Shenoy, Advs. for the Appellant.
D. N. Ray, Lokesh K. Cl~oudhary, Ms. Sumita Ray, Advs. for the
H Respondents.
VlNESHKUMAR MAVJIBHAI PARMAR v. DETHALI GOPALAK VIVIDH 869
KARYAKARI SAHAKARI MANDALI LTD.

The Judgment of the Court was delivered by A
CHELAMESWAR, J. 1. All these eight appeals are preferred
by the unsuccessful respondents in various special civil applications (writ
petitions under Article 226 of the Constitution) before the High Court of
Gujarat at Ahmedabad disposed of by a common judgment dated
17.3.2015. B
2. Whether the members of the Managing Committees of co-
operative societies (against whom proceedings under Section 107 of the
Gujarat Co-operative Societies Act, 1961 are pending) have a right to
participate in the election process of an Agricultural Produce Marketing
Committee constituted under the Gujarat Agricultural Produce Markets
Act, 1963. The two enactments mentioned above are referred to
c
hereinafter as "the SOCIETIES ACT" and "the MARKETS ACT".
3. The facts leading to the present litigation:
Sec~ 9 of the MARKETS ACT contemplates the _establishment
of a "Market Committee" for every "market area". Both expressions
D
are defined under Section 2(xiii) and 2 (xiv)'.
Section 10 of the MARKETS ACT declares market committees
to be bodies corporate with perpetual succession and a common seal.
Section 11 stipulates that every market committee shall consist of 17
members falling into 5 categories. Section 11 (I )(i) stipulates that eight
agriculturist members shall be elected by an electoral college consisting E
of the members of the managing committees of the "co-operative
societies dispensing agricultural credit" (hereafter CREDIT SOCIETIES)
in the market area.
Section 11 ( 1)(i) of the MARKETS ACT reads as folfows:
"eight agriculturists who shall be elected by members of F
managing committees of co-operative societies (other than
co-operative marketing societies and milk produce
co-operative societies) dispensing agricultural credit in
the market area;"
4. The activity ofco-operative societies in the State of Gujarat is G
regulated by the SOCIETIES ACT. Section 107 of the SOCIETIES
1
Section 2 (xi ii )'·market ar_i;a" means any area declared or deemed to be declared to
be a market area under this Act;
Section 2(xiv) "market committee"' means a market committee established or deemed
to be established under this Act;
H
870 SUPREME COURT REPORTS r2016J 9 s.c.R.

A ACT provides for the liquidation and winding up of the societies
functioning under the Act. Section 107(1) authorises the Registrar to
pass an interim order directing a cooperative society to be wound up for
any one·of the reasons specified in clauses (a), (b) and ( c) of Section
107(1 ). Sub-Section(3), thereof authorises the Registrar to pass a final
order after granting a hearing to the society against which an interim
B
order under sub-Section(!) is made. Such a final order could be one
either finally winding up the society by confirming the interim order or
vacating the interim order passed earlier, whichever is appropriate in
law having regard to the facts and circumstances of the case.
5. In exercise of the power under Section 107 of the SOCIETIES
c ACT proceedings were initiated by the Registraf against eleven Co-
operative societies (established for the purpose of dispensing agrfoultural
credit) operating in the market area of a market committee known as
SIRPUR market committee, the details of which are not necessary for
the present purpose.
D 6. We are concerned with only eight of the eleven co-operative
societies mentiohed above. Admittedly, with reference to each of the
said eight co-operative societies, interim orders were passed initially under
Section 107(1)3 of the SOCIETIES ACT directing them to be wound
'Section 2(17) of the Gujarat Co-operative Societies Act, 1961 - "'Registrar"
E means a person appointed io be the Registrar of Co-operative Societies under this
Act; and includes to the extent of the powers of the Registrar conferred on any other
person under this Act, such person and includes an Additional or Joint Registrar;

'Section 107 Winding up- (I) [Except as otherwise provided in sub-section (IA) if
the Registrar, -
(a) after an inquiry has been held under section 86, or an inspection has been made
F under any of the provisions of sub-section (8) of section 84, section 87 or section 88
or on the report of the auditor auditing the accounts of the society, or]
(b) on receipt of an application made upon a resolution carried by three-fourths of the
members of a society present at a special general meeting called for the purpose, or
(c) of his own motion, in the case ofa soc:ety which-
(!) has not comnienced working, or
(ii) has ceased working, or
G (iii) possesses shares of members deposits not exceeding five hundred rupees, or
(iv) has ceased to comply with any conditions as to registration and management in
this act or [the rules or the bye-laws, orj
(v) has failed to comply with any directions issued under sub-section (I) of Section
160 or such directions as modified under sub-section (2) of that section.] '
is of the opinion that a society ought to be wound up. he may make an interim
order directing it to be wound up.
H
VJNESHKUMAR MAVJIBHAI PARMAR v. DETHALI GOPALAK VIVIDH 871
KARYAKARI SAHAKARI MANDALI LTD. [CHELAMESWAR, J.]

up. Subsequently, final orders directing the winding up of each Onj: of A
the said cooperative societies were also passed. The said orders were
challenged before the Appellate authority. The matters eventually reached
the High Court, complete details of the litigation may not be necessary
except to say rhat the High Court had set aside the final orders with a
further direction to the Registrar to conduct an inquiry afresh under
B
Section 107 of the SOCIETIES ACT and pass appropriate final orders.
Admittedly the said enquiry is pending.
7. Elections to the SlRPUR market committee fell due in the year
2015. A voters list (under Rule 7 of the Gujarat Agricultural Produce
Market Rules, 1965) came to be prepared consisting the names of the
members of the managing committee of the above-mentioned 8 c
cooperative societies (alongwith other societies) operating within the
market area of the SIRPUR market committee.
8. In view ofthe pendency of the liquidation proceedings, objections
for the inclusion of the names of the members of the managing
committees of the 8 cooperative-societies were raised. Objections were D
upheld by the proceedings dated 26.2.2015 of the Additional Registrar
and Co-operation Officer (Market), Patan, directing the deletion of the
names of the members of the managing committee of the above-
mentioned 8 cooperative societies~. Operative portion of the order dated
26.2.2015 w.r.t. one of the 8 societies reads; E
"I, Mr. H.G. Rawal, Authorized Officer & Co-operation
Officer [Market], Patan & in exercise of the powers
conferred in me and as per the provisions of the Gujarat
Agriculture Produce Market Committee Act, 1963 and.
Market Committee Rules, 1_965 allow the application by the F
objector Mr. Parniar Vineshkumar Mavjibai and Prajapati
Manishbai Khemabhai for deleting the names of the
Managing Committee members of the Shri Kalyana Group
Gopalak Vividh Karyakari Sahkari Mandali Ltd. at Kalyana,
Taluka Siddhpur from the Agriculturist constituency voters
list and accept the just and proper objections raised, and in G
the voters list Sr. 259 to 279 voters names are ordered to
be deleted. The said orders will be subject to the orders
passed by the Hon. High Court and Additional
- ' We take the facts of the first respondent society in Civil Appeal No. 3891/2015
as representative facts of the 8 appeals. H
872 SUPREME COURT REPORTS [2016] 9 S.C.R.

A Registrar[Appeal], Co-operative society, Gujarat State,
Gandhinagar.
-sd-
[S.G. Rawal]
Additional Registrar &
B Co-operation Officer [Market]
Patan"
9. Aggrieved by such a decision, the members of the managing
committee of the said society filed special civil applications invoking
Article 226 of the Constitution oflndia. By the judgment impugned in
these appeals, the special civil application was allowed setting aside the
c orders of the Additional Registrar dated 26.2.2015.
I 0. We are informed that the facts relating to the other 7 societies
are substantially similar.
11. ft is argued by the appellant;
D Since the 8 societies in question are in the process of being wound
up, they ceased to be CREDIT SOCIETIES within the meaning
of Section 11(1 )(i) of the MARKETS ACT because their activities
are limited under Section 110 of the SOCIETIES ACT i.e., the
business of the societies can be carried only so far as may be
E necessary _for the beneficial winding up of the society. It is,
therefore, submitted that the members of the managing committees
of these 8 societies would be disentitled to be voters at an election
for the agricultural market committee.
According to the appellants, permitting the members of the
F managing committees of CREDIT SOCIETIES which are in the
process of being wound up, to participate in the election process
and elect agriculturist members to the market committees, would
be inconsistent with the spirit of the MARKETS ACT, in view of
the declaration contained in Section 108(2)5 of the SOCIETIES
ACT.
G
It is, therefore, submitted that the High Court erred in interfering
with the orders of the Registrar directing the deletion of the names of
the members of the managing committees of the 8 societies from the
voters list.

H ' See FIN 9 inji-a
VINESHKUMAR MAVJIBHAI PARMAR v. DETHALI GOPALAK VIVIDH 873
KARYAKARI SAHAKARI MANDALI LTD. [CHELAMESWAR, J.]

12. None appears for anyone of the respondents. A
13. The purpose of the establishment of the market committees
was examined and explained by this Court in M.C. V.S. Arunacfla/a
Nadar v. The State of Madras & Others, AIR 1959 SC 300. A
constitution bench of this court made an elaborate inquiry into the
legislative history of the subject and held that: B
"The object of such legislation is to protect the producers
of commercial crops from being exploited by the middlemen
and profiteers and to enable them to secure a fair return
for their produce"
(See Para 6)
c
14. Fo'r achieving the said purpose, market committees are
constituted under the laws made by the legislatures of various States
giving representation considered appropriate by the concerned legislature
to various classes of persons who have an interest in achieving the purpose
of the market committees.
15. The legislature of the State of Gujarat thought it fit to give D
representation under the MARKETS ACT to 5 classes of persons: (i)
agriculturists, (ii) traders holding general licences6 (iii) representatives
of the cooperative marketing societies' (iv) a nomin~ted member by the
concerned local authority8 within whose jurisdiction the "principal market
yard" is situated and (v) two nominated me.mbers of the State E
Government.
6
Section 2(ix) - "licence" means a licence granted under section 6 or, as the case
may be, a general or special licence granted under section 27;
7 Section 2(v)- "co-operative marketing society" means a society registered or deemed

to be registered as such under the Gujarat Co-operative Societies Act, 1961 (Guj. X
of 1962), and engaged in the business of buying or selling ofagricultural produce or F
of possessing ofagricultural produce and holding a licence;
8
Section 2(xi)- .. local authority" means-
(a) a corporation constituted under the Bombay Provincial Municipal Corporation
Act, 1949 (Born. LIX of 1949); or
(b) a municipality constituted or deemed to be constituted under -
(i) the Bombay District Municipal Act, 1901 (Born. Ill of 1901 ), or that Act as
adapted and applied to the Saurashtra area; or
G
(ii) the Bombay Municipal Boroughs Act. 1925 (Born. XVIII of 1925). or that
Act as adapted and applied to the Saurashtra area or that Act as applied to
the Kutch area; or
( c) a village panchayat constituted or deemed to be constituted under the Bombay
Village Panchayats Act, 1959 (Born. Ill of 1959). or a gram panchayat or nagar
panchayat constituted under the Gujarat PanchayatAct, 1961 (Guj. VI of 1962); H
874 SUPREME COURT REPORTS [2016) 9 S.C.R.

A 16. Of the above-mentioned 5 classes of members, the first three
classes consist of elected members and the later two are of nominated.
Three distinct electoral colleges are created under sub-clause (i), (ii)
and (iii) of Section 11 (I) for electing the 3 classes of elected members.

"Section 11. Constitution of market committee -
B
(I) Every market committee shall consist of the following
members namely:-

(i) eight agriculturists who shall be elected by members of
managing committees of co-operative societies other than
C co-operative marketing societies and milk produce co-
operative societies dispensing agricultural credit in the
market area;

(ii) four members to be elected in the prescribed manner
from amongst themselves by the traders holding general
D licenses;

(iii) two representatives of the Co-operative marketing
societies situate in the market area and holding general
licenses, to be elected from amongst the members (other
than nominal, associate or sympathizer members) of such
E societies by the members of the managing committees of
such societies:

Provided that where the number of co-operative
marketing societies so situate does not exceed two, only
one representative shall be so elected."
~ F
17. While the elected representatives to the market committee
belonging to classes (ii) and (iii) mentioned above are required to be
members of the concerned electoral college, the Act does not insist upon
such requirement w.r.t. those who are to be elected under the class (i)
mentioned above. In other words, the members of the market committee
G
belonging to the I" of the abovementioned 5 classes need not be members
of the electoral college which elects them.

18. The right to elect 'agriculturists' to a market committee is
conferred under Section 11 of the MARKETS ACT upon the electoral
college consisting of members of the managing committees of cooperative
H
VINESHKUMAR MAVJIBHAI PARMAR v. DETHALI GOPALAK VIVIDH 875
KARYAKARI SAHAKARI MANDALI LTD. [CHELAMESWAR, J.]

societies operating in the mark<;t area which are dispensing agricultural A
credit (hereafter CREDIT SOCIETIES).
19. The reason for the above, as we understand, is that those who
seek election under the category of agriculturists belong to a very nebulous
class, whereas the persons falling under classes (ii) and (iii) mentioned
above can be identified with certainty based upon public records. Therefore, B
the legislature, in its wisdom, though it fit to create an electoral college
which, by virtue of its very activity, would be in a better position to identify
agriculturists eligible to contest for the membership of a market committee.
By the very nature of the office held by them, members of the managing
committees of"cooperative societies dispensing agricultural credit" would
have an opportunity to interact with the agriculturists. c
20. The pendency of the liquidation proceedings in law9, compels
the elected members of the managing committee (OFFICERS of the.
Society) of a co-operative society to hand over the custody and control of
all the property and assets, etc. of the society to the liquidator appointed
. under Section I 07( I) of the SOCIETIES ACT. According to the appellants, D
the necessary implication flowing therefrom is that the members of the
managing committee of a society facing liquidation proceeding are debarred
from anyway dealing with the affairs of their society. Therefore, they
should also not be permitted to exercise the ri_ght to participate in the election
of a market committee. · •
21. The powers of the liquidator are ~pecified under Section 11 o,. E
the details of which may not be necessary except to state that the liquidator
virtually becomes the caretaker manager of the society whose winding up
is impending. At the same time it is equally important to note that Sec.
108(3)(b) 10 stipulates that the officers 11 of the cooperative society vacate
'Seetion 108. Appointment of Liquidator - (I) When an interim or final order F
is made under Section 107 for the winding up of a society. the Registrar may. in
accordance with the rules appoint a person to be the liquidator of the society, and fix
his remuneration.
(2) Where an interim order is made the officers of the soeiet~· shall hand over to the
liquidator the custody and control of all the property, effects and actionable claims to
which the society is or appears to be entitled, and of all books, records and other
documents pertaining to the business of the society and, shall have no access to any of
G
them.
10
108 (3) When a final order is made confirming the Interim, order, the officers of the
society
xxx xxx xxx xxx
(b) shall vacate their offices and while winding up order remains in force the general body
of the society shall not exercise any powers. ·
11
Section 2(14) of the SOCIETIES ACT. - "officers" means a person elected or appointed·
H
876 SUPREME COURT REPORTS [2016] 9 S.C.R.

A their offices only on the passage of the final orderofwinding up. Obviously,
they continue to be the office bearers but are disabled from enjoying
certain rights attached to the office and performing certain functions to
be performed by the holders of the office
22. The rights and functions of the OFFICERS ofa co-operative
B society are many. Some of them are created by the statute under which
the office is created. Others could be the creation of subordinate legislation
(in the context of the present case, even the byelaws of the society).
The existence or lack of such rights and functions depend upon the
·scheme and tenor of the SOCIETIES ACT and the subordinate legislation
made thereunder. Such rights and functions are put an end to only by the
c operation of law i.e., the SOCIETIES ACT.
23. Apart from that, nothing prevents the legislature from conferring
by another law additional rights or functions on a person holding an office
created under the SOCIETIES ACT.
D 24. The legislature of Gujarat by Section 11 (I) of the;; MARKETS
ACT conferred on the OFFICERS ofa class of CREDIT SOCIETIES
an additional function of electing members of the market committees.
Such function is neither conferred on the OFFICERS of all the societies
functioning under the SOCIETIES ACT nor such function includes the
right to elect every member of the concerned market committee. Such
E a function obviously creates a right in the officers of the societies. Such
a statutory right could not be taken away in the absence of any express
authority oflaw.
25. The Gujarat legislature expressly provided under the
SOCIETIES ACT for the curtailment of certain rights of the officers of
F societies facing liquidation proceedings. It must be remembered that at
the same time it also declared that such OFFICERS cease to be the
officers of the Society only when a final order of winding up is passed.
In a given case if the Registrar after an appropriate enquiry following
the interim order of winding decides not to finally wind up the society,
G the OFFICERS of the society would once again be entitled to exercise
al I the rights associated with it and perform all the functions attached to
the office. Therefore, merely because the officers of CREDIT SOCIETY
by a society to any office of such society according to its bye-laws; and includes a
chairman, vice-chainnan, president, vice-president, n1anaging director, n1anagcr. secretary,
treasurer, member of the committee, and any other person elected or appointed under
this Act, the rules or the bye-laws, to give directions in regard to the business of such
H society.
VINESHKUMAR MAVJIBHAI PARMAR v. DETHALI GOPALAK VIVIDH 877
KARYAKARI SAHAKARI MANDALI LTD. [CHELAMESWAR,J.]

facing liquidation are disabled from enforcing certain rights attached to A
the office or perform certain obligations appended to the office, it does
not necessarily follow that they are disabled from performing every
function entrusted by law to such office.
26. We now deal with the submission that the society ceased to
be a CREDIT SOCIETY in view of the pendency of the winding up B
proceedings.
27. We are of the opinion that the phrase "co-operative societies
di.spensing agricultural credit in the market area" in Section 11 ( 1)(i) of
the MARKETS ACT is only descriptive of the purpose for which the
societies are established. Section 11 (I )(i) cannot be construed as c
imposing an incessant obligation of "dispensing agricultural credit" in
order to enabie the members of the managing committee of CREDIT
SOCIETIES to participate in the election to the market committee. The
obligation, if any, to "dispense agricultural credit" arises under the bye-
laws of the society subject of course to the availability of funds and
various othe·r factors. We are of the opinion that the above quoted words D
are only descriptive of the class of society the members of whose
managing committees are entitled to participate in the election of the
market committee. It is obvious from the language of the sub-section
that there can exist more than one class of co-operative societies
functioning under the Act. The very fact that the legislature took care to E
expressly exclude members of the managing committees_ of two classes
of societies i.e. "Co-operative Marketing Societies" and "Milk Produce
Co-operative Societies", definitely indicates that there can exist more
than one class of societies - apart from the common knowledge.
28. Section 4 1 ~ of the SOCIETIES ACT contemplates that societies F
could be registered for different purposes. They are - "the promotion
of the economic interests of its members or general welfare of its
members or economic interest of the ge11eral welfare of the public". .-
29. Since Section l l(l)(i) of the MARKETS ACT is establishing
an electoral college for the election of a certain class (agriculturists) of G
members of the market committees, the legislature thought it fit that
1
' Section 4. Societies which may be registered.- A society, \yhich has as its
object the promotion of the economic interests or general welfare of its members
or of the public, in. accordance with co-operative principles, or as society
established \l'ith the object of facilitating the operations of any such society, may
be r~istered under this Act. ·
H
878 SUPREME COURT REPORTS [2016] 9 S.C.R.

A only the members of the managing committees of those co-operative
societies which have a nexus to agricultural activity should be members
of the electoral college.
30. The submission of the appellantthat Section 11 (I )(i) imposes
a legal obligation that the members of the managing committees of only
B those co-operative societies which are currently dispensing agricultural
credit in the market area are entitled to participate in the electoral process
of the concerned market committee (in other words, the phrase "co-
operative societies dispensing agricultural credit" is indicative of the
current activity of the societies but not the purpose for which the society
is established), would lead to various difficult questions:
c
(i) What is the period to which the currency of such activity would
relate to? Whether the activity should be current when the
voters' list is prepared or the activity should continue even on
the date of voting?

D (ii) Whether credit societies which do not dispense agricultural
credit for a certain period of time because of either paucity of
funds or borrowers are debarred from "dispensing agricultural
credit" because of some legal prohibition or any other reason
operating temporarily cease to be societies whose objective is
to provide agricultural credit?
E
31. Credit Societies against which there is an 'interim order' of
winding up are temporarily debarred from dispensing agricultural credit,
by virtue of the operation oflaw. The embargo imposed by such interim
order m.ily or may not fructify into a final order of winding up. (We have
already discussed this aspect of the matter at para 21 supra). On the
F face ()f such possibility of the society resuming its activity of"dispensing
agricultural credit" - to debar its managing committee members from
discharging their statutory obligation under the MARKETS ACT would
be productive of public mischief. Such an interpretation of the statute
must be avoided.
G 32. For the above reasons, we do not see any merit in the appeals.
Therefore, the appeals are dismissed.
Ankit Gyan Appeals dismissed.