SAWANT'S CONTENTION
>> That he is an employee of the Goa Dairy and the Registrar did not have jurisdiction to issue any order of suspension
COURT JUDGEMENT
>> Interim relief in all these Petitions is refused. By an earlier order, we had directed that the records be taken in safe custody. The same shall be handed over to the Administrator forthwith
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PANAJI: The Bombay High Court at Goa has refused any interim relief to NC Sawant the Managing Director of the Goa Dairy who had challenged an order of the Registrar of Cooperative Societies placing him under suspension.
The Registrar of Cooperative Societies had in an order passed on August 31 found Dr NC Sawant “wholly responsible for the irregularities and mismanagement” and ruled that he “shall be placed under suspension by the Board of Director/Administrator and conduct detailed inquiry and initiate disciplinary inquiry for irregularities and corrupt practices and terminate him accordingly.”
Dr Sawant had challenged the finding of the Registrar in the High Court.
“Interim relief in all these Petitions is refused. By an earlier order, we had directed that the records be taken in safe custody. The same shall be handed over to the Administrator forthwith,” the HC ruled.
The Registrar had also disqualified the Directors Dananjay Dessai, Vithoba Dessai, Baburao Dessai, Naresh Malik, Gurdas Parab, Madhav Sahakari and Rajendra Sawant on the Board of Director of the Goa State Cooperative Milk Producers Union Limited (Goa Dairy) under Section 59(11) of the Goa Co-operative Act as both the inspection reports have found discrepancies in the working of the society which are irregular, illegal in nature and detrimental to the interest of the society.
“The directors Shrikant Naik, Vijaykant Gaonkar, Shivanand Pednekar and Ulhas Sinari shall be responsible to the loss caused to the society due to the purchase of fill packed machine, ice cream plant machinery, recruitment of staff and purchase of raw material for cattle feed plant which will be determined and countified by filing separate misappropriation under Section 82 of the Act,” the Registrar had also ruled.
The disqualified directors also filed a separate writ petition before the High Court while Rajesh Krishna Fal dessai, the Chairman of the Goa Dairy challenged clause five of the Registrar’s order herein an administrator was appointed.
A complaint was received in the year 2017 by the Department of Co-operation from one of the Directors regarding mismanagement in Goa Dairy. An Auditor was appointed to inquire into the matter. Proceedings were initiated. During the pendency of the proceedings, another complaint was received. A Chartered Accountant was appointed to conduct an inquiry. The inquiry report was submitted. The inquiry report stated that there were large scale irregularities in purchase of machinery and there was suspicion regarding genuineness of the quotations. Based on the inquiry report, notices were issued.
Sawant argued before the court that he is an employee of the Goa Dairy and the Registrar did not have jurisdiction to issue any order of suspension.
In the writ petition filed by the Chairman, it was contended that though the petitioner and three other directors are not disqualified by the impugned order, they are aggrieved by an order to appoint the administrator. “The non-disqualification of four directors and the factum of appointment of administrator, cannot coexist. Under Section 67A of the Act, all the directors must be disqualified then only an administrator can be appointed,” they argued before the court.
“It cannot be said that the Registrar has no power whatsoever to direct the Administrator to place the Managing Director under suspension pending inquiry, if such a step is in furtherance of streamlining the operations of the Dairy. We are of opinion, based on the material on record that continuation of the Managing Director, pending enquiry in such circumstances, is not warranted, and therefore, he is not entitled to any interim relief,” the HC said referring to Dr Sawant’s plea.
“The four directors cannot constitute a functional Board of Directors. The Board of Directors of the Goa Dairy consists of 15 directors. Twelve elected directors, two nominee directors, one is the Managing Director as ex officio. The quorum for the board meeting is 50% of the board members. Out of 12 directors who can vote, seven have been disqualified by the impugned order. One more director was disqualified earlier by the Board. That leaves only four elected directors. They obviously cannot continue the functioning of the Board,” the HC ruled in connection with the plea filed by the Chairman.
“The events that have led to the exercise of power by the State, borne out by the inquiry report and other material, indicate serious maladies afflicting the working of the Goa Dairy. We are of the opinion that, in these circumstances, when the State has chosen to exercise the power in larger interest, that exercise should not be stifled by passing an interim order,” the court finally ruled.
