Reservation laws apply only to co-operative societies with government shareholding, regardless of financial aid received.

The Petitioner, a co-operative society registered under the Maharashtra Co-operative Societies Act, 1960, challenged the validity of a Government Resolution (GR) dated April 1, 2004, and consequential orders dated April 7, 2006, and March 1, 2016, which mandated compliance with state reservation policies.

The Respondents contended that the Petitioner fell under the definition of an "establishment" as defined by the Maharashtra State Public Services [Reservation for Scheduled Castes, Scheduled Tribes, De-notified Tribes (Vimukta Jatis), Nomadic Tribes, Special Backward Category and Other Backward Classes] Act, 2001 (the "Reservation Act") because it received financial aid, subsidies, and land at concessional rates from the State.

The Petitioner maintained that the State held no share capital in the society, thus exempting it from the Act.

1. Whether the Petitioner co-operative society falls within the ambit of an “establishment” under Section 2(c) of the Maharashtra State Public Services [Reservation for Scheduled Castes, Scheduled Tribes, De-notified Tribes (Vimukta Jatis), Nomadic Tribes, Special Backward Category and Other Backward Classes] Act, 2001.

The court primarily interpreted Section 2(c) and Section 2(i) of the Reservation Act, which define "establishment" and "public services and posts" respectively, noting that for a co-operative society to be covered, the Government must be a shareholder.

The court applied the principle that executive instructions (GRs) cannot supplant or run contrary to the statutory mandate of a parent Act, relying on Madhya Pradesh v. GS Dal and Flour Mills.

It further followed the precedents established in Madhya Pradesh Rajya Sahakari Bank Maryadit v. State of Madhya Pradesh, Bank Karmachari Sangh, Pune v. State of Maharashtra, and Jalgaon Zilha Sahakari Dudh Utpadak Sangh Maryadit v. State of Maharashtra, all of which held that government shareholding is a mandatory prerequisite for the application of reservation laws to co-operative societies.

The Court conducted a textual analysis of Section 2(c) and Section 2(i) of the Reservation Act, concluding that the legislative intent was to include only those co-operative societies in which the Government holds share capital.

It rejected the Respondents' argument that the "Explanation" to Section 2(c)—which includes "Government aided institutions"—could bring the Petitioner within the Act’s fold solely based on financial assistance or land concessions.

The Court reasoned that Section 2(i)(ii) specifically qualifies co-operative societies as those "in which Government is a shareholder," creating a specific requirement that overrides general categorizations.

Furthermore, the Court held that the GR dated February 11, 2014, could not expand the scope of the Reservation Act, as executive instruments cannot override or enlarge statutory provisions.

Since the State did not hold any share capital in the Petitioner society, the regulatory authorities lacked the jurisdiction to enforce the state reservation policy.

Consequently, the Court allowed the Writ Petition and quashed the impugned GR and consequential orders as they were applied to the Petitioner. Rule was made absolute, granting relief in terms of prayer clauses (b) and (c).