The circuit bench of the Bombay High Court at Kolhapur on Monday refused to grant an interim stay on an ordinance promulgated by the Maharashtra government empowering the State to appoint nominated members with voting rights to large federal cooperative societies. [Shashikant Anandrao Patil v. Presiding Officer, Kolhapur Zila Sahakari Dudh Utpadak Sangh & Ors.]

The ordinance and the Court's refusal to interfere directly impacts Gokul Dairy, a cooperative heavyweight in rural Maharashtra. 

In the recent elections to its 25-member board, the Congress-backed panel led by Member of Legislative Council (MLC) Satej Patil had secured a narrow majority with 13 seats. The ruling BJP-Shivsena Mahayuti alliance won 12. 

Subsequently, the State enacted the ordinance allowing State nominated directors to have voting right, thus paving for the ruling party to retain control over the Dairy and circumvent the poll results.

Vacation judge, Justice Neeraj P Dhote, held that no prima facie case was established to warrant staying the ordinance at the interim stage. 

"In my view no case for interim protection or stay to the impugned ordinance exists. Resultantly, prayer for interim order is rejected," the Court said.

However, it clarified that the proceedings of the meeting scheduled for November 10 to elect the chairperson of the Kolhapur District Cooperative Milk Producers' Union (Gokul Dairy) will remain subject to the petition's final outcome.

The Court also directed that the ballots of 25 elected directors and 5 State nominated directors be kept separately.

The ordinance was brought by the State amending Section 73AAA(2) of the Maharashtra Cooperative Societies Act, 1960. 

The amendment allowed the State government to appoint five members (four with voting rights) to the boards of federal cooperatives that receive State assistance and clock an annual turnover exceeding ₹500 crore.

The petitioners contended that the ordinance is a colourable exercise of legislative power designed to alter the democratic arithmetic by expanding the voting electorate from 25 to 29 members. This effectively subverted the mandate of dairy farmers. 

The State defended the enactment. They asserted that nominating qualified experts with voting rights is vital for institutional stability, transparency and fiscal supervision of large cooperatives managing public funds.

After considering the arguments, the Court declined to interfere.

To safeguard the adjudication process for the chairperson's election, Justice Dhote directed the Election Officer to preserve all ballot papers, minutes and related documents.

Further, the ballots of 25 elected directors and 5 State nominated directors should be kept separately, the Court said.

"Since the challenge to the impugned ordinance is sub-judice, the presiding officer shall consider—after the counting, the ballot papers of 25 elected directors and 4 government nominated directors be kept separately," the Court directed.

The bench granted the parties liberty to approach the regular division bench after vacation.

Senior advocate Abhishek Manu Singhvi appeared for the petitioner- association.

Senior advocate Mukul Rohatgi appeared for the State.