Gujarat High Court
Pravinsinh S. Zala And 5 Ors. vs Kodinar Taluka Sahakari Kharidvechan ... on 2 March, 2006
Equivalent citations: (2006)2GLR1485
Author: Jayant Patel
Bench: Jayant Patel
JUDGMENT Jayant Patel, J.
Page 1028
1. The question which arises for consideration of this Court in the present petition is whether Rule 15 of the Gujarat Coop Societies Rules, 1965 (hereinafter referred to as the Rules of 1965) applies to the specified Cooperative Societies provided under Section 74C of the Gujarat Cooperative Societies Act (hereinafter referred to as the Act). Incidentally, the additional question also arises for consideration is whether Rule 15 of the Rules of 1965 is inconsistent with the Gujarat Specified Cooperative Societies Rules, 1982 (hereinafter referred to as 'the Rules of 1982').
2. The factual aspect appears to be as under :
a. The respondent No. 1 is a Federal Society and is also a specified Cooperative Society within the meaning of Section 74C of the Act. It appears that initially, it forwarded the proposal for amendment in the bylaws for the representation of individual members through its delegates and it was proposed in the amendment that for every 25 individual members, one delegate will be elected. It appears that the proposal was forwarded on 05.08.1994 and the said proposal was not approved by the District Registrar vide order dated 20.05.1995 observing inter alia that the same is in contravention to Rule 15 of the Rules of 1965. The matter was carried before the Additional Registrar(Appeals) by the respondent No. 1 Sangh being Appeal No. 56 of 1995 and ultimately, vide order dated 21.09.1995, the appeal was dismissed and order of the District Registrar refusing the sanction to the amendment in the bylaws was confirmed. It appears that thereafter the order of the Additional Registrar(Appeals) is not carried before the higher forum but once again such proposal for the very amendment in the bylaw was submitted which once again was not sanctioned by the District Registrar vide order dated 02.12.1995. The matter was carried in appeal, before the Additional Registrar(Appeals) and vide order dated 30.03.1996, the appeal was allowed and the District Registrar was directed to approve amendment in the bylaws. The District Registrar, pursuant to the order of the Additional Registrar(Appeals) approved the amendment in the bylaws vide the order dated 10.05.1996. The petitioner having learnt about the same, approached the State Government by preferring revision and vide order dated 16.09.1996, the revision was dismissed by the State Government. It is under these circumstances, the petitioner has approached this Court by preferring the present petition. It may be recorded that in pursuance of interim order the order passed by this Court, the operation of the impugned order of sanctioning the bylaws is stayed.
Page 1029
3. I have heard Mr. Tushar Mehta, learned counsel for the petitioners and Mr. Champaneri, learned counsel for respondent No. 1 and Mr. Desai, learned AGP for respondent Nos. 2 to 4.
4. It appears that the proposed amendment in the bylaws, copy whereof is produced at page 23, is an amendment in bylaw No. 24(1) and the said amendment is for giving representation to one delegate per 25 individual members in the respondent No. 1 Sangh with the further stipulation of giving right at the election and it is further mentioned that such delegate of individual will have right of one vote at the general meeting. So far as the other part of amendment in the bylaws is concerned, viz. for election of the delegates from amongst the individual member and the rights of such delegates at the general meeting of the Society is concerned, both are dependent upon one delegate per 25 individual members.
5. What is being assailed in the present petition is of giving representation of one delegate per 25 individual members by contending that the same is in contravention to the Rule 15 of the Rules 1965 in as much as upper limit is provided under Rule 15 of the Rules 1965 for election of the delegates equal to 1/10 of the number of societies admitted to the membership, because the language used is one delegate per 25 individual members or 1/10th of the number of societies, whichever is less. Therefore, it has been submitted that if such an amendment is permitted, it would nullify the upper limit as provided under Rule 15 and therefore, the bylaw would be in contravention to Rule 15.
6. On behalf of respondent No. 1 Sangh, it has been submitted that Rule 15 has no applicability to a Federal Society, which is also a specified society under Section 74C of the Act.
7. Mr Champaneri, learned counsel appearing for respondent No. 1 Sangh contended that for the election to the Specified Cooperative Societies, there are specific Rules of 1982 and Rule 2(i)(a) provides for definition of the Society means Society specified under Sub-section (1) of Section 74C and he further contended that Rule 97 of the Rules of 1982 provides that anything contained in Rules of 1965, which is inconsistent with these Rules shall not apply to the election under these Rules. It was further submitted that as per Rule 4 of the Rules of 1982, in the provisional list of voters, all members of the Society are required to be included and therefore, it was submitted that every member of the society has right to be included in the voters list and such voting right cannot be restricted by Rule 15 as sought to be canvassed of the petitioners. He further submitted that if Rule 15 is made applicable, then Rule 15 would be inconsistent with the Rules of 1982, more particularly Rule 4, and therefore the same will have no applicability qua specified Societies and therefore, it was submitted that the Registrar has rightly sanctioned the amendment in the bylaws.
8. Mr. Desai, learned AGP supported the order passed by the State Government and the lower authority.
9. It is not in dispute that the present amendment in the bylaws is in contravention to Rule 15. The only contention as sought to be canvassed Page 1030 on behalf of the respondent is that Rule 15 will have not applicability after the amendment in the Act of 1982 and consequently, the applicability of Rules of 1982 for the election governing of the voting rights of the members in a specified Cooperative Society. Even otherwise also, if the proposed amendment in the bylaw is read as it is, it provides for election of the one delegate for each 25 individual members. Rule 15 expressly provides for election of one delegate per 25 individual members or equal to 1/10th of the number of the societies admitted to the membership and it further provides by using the language whichever is less. Therefore, if one delegate for every 25 individual members exceeds 1/10th of the total number of societies admitted to the membership, the number of delegates should not exceed 1/10th.
10. The Federal Cooperative Society is defined under Section 2(9) of the Act, which means a Society not less than 5 members of which are themselves societies. To say in other words, in a Federal Cooperative Societies, other Societies would be the members and the minimum requirement is 5 member society. As such, the Federal Cooperative Societies are distinct than ordinary Cooperative Societies and the major distinction being that in other cooperative Societies, principally, the members would be individual persons, whereas, in Federal Conservative Societies, principally, the members would be the Cooperative Societies. Therefore, with that purpose, the specific definition is provided for Federal Society under the Act. Further, as per Section 28(8) of the Act, it has been expressly provided that the voting rights of the individual members of a Federal Society shall be, such as may be regulated by the rules and by the bye-laws of such Society. Therefore, in a Federal Coop. Society statute recognizes regulation of the voting rights of an individual member, and such may be regulated by the Rules or the bye-laws of the Society. The Rule 15, inter alia, regulates the voting right of individual member in a Federal Cooperative Society. Reference may be made to the decision of the Division Bench of this Court in case of Ambalal Manilal Makwana v. Khambhat Taluka and Ors. reported in 1975 GLR, 382 and more particularly the observations made from para 6 to 13, whereby such aspect is also discussed. It is not in dispute that the respondent No. 1 Sangh is not a Federal Society. Therefore, if Rule 15 is to apply to the bye-laws of the respondent No. 1 Sangh, as observed hereinabove, since upper limit of 1/10th of the total number of member Cooperative Society is not expressly provided while holding the election of the delegates from amongst the individual members, the situation may be created, whereby if the number of individual members in a society exceeds 1/10th of the total number of member Cooperative Society, there will be more delegates than provided under Rule 15 and, therefore, the words whichever is less will not be given effect and consequently the amendment in the bye-laws can be said as in contravention to Rule 15 of the Rules of 1965.
11. The aspects which may further be required to be examined is the applicability of Rule 15 to a specified Cooperative Society, which is also a Federal Cooperative Society. It is not in dispute that all Federal Society need not be specified Cooperative Societies, but all specified Cooperative Societies can be Federal Cooperative Societies.
Page 1031
12. In the present case it is true that the respondent No. 1 Sangh/Union, which is a specified Society is also a Federal Society and the said position is not in dispute. It is also true that in the scheme of Rules of 1965, more particularly Rule 15 when framed, the amendment of 1982 in the Act, more particularly, the amendment so far as it related to specified Cooperative Societies and its election as per the provisions of Chapter XI A did not exist in the statute book. However, even if the amendment is made in the principal Act namely; Gujarat Cooperative Act of 1961 by amending the Act of 1982, inter alia, for introducing a special status and a special procedure for election of a particular class of societies, which are known as specified Cooperative Societies.
13. As per the settled legal position for interpretation of statutes, the first attempt on the part of the Court would be to harmonize the situation and to reconcile the position of operation of the statute in the respective fields and to make an attempt to maintain both statutes/provisions operating in their respective fields and only as a last resort, if it is not possible to reconcile or harmonize the situation, the Court may consider inconsistency and its consequential effect.
14. As observed earlier, the principal object of formation of Federal Society is to give status to a Federal Cooperative body whose members are societies. Such appears to be the object and with that purpose express definition is provided under Section 2(9) of the Act. It further appears from Section 28(8) of the Act that even in a Federal Society the possibility of individual membership is not ruled out and, therefore, as per the Scheme of the Act, more particularly prior to the amending the Act of 1982, there could be a Federal Society having its members as Societies and also individual members, but as observed earlier the principal object of formation of such Federal Society is to recognize the status of a Federal Body of other Societies, who are members of such Federal Society. Not only that, but the said position of individual members, who are members of Federal Society is also statutorily recognized if Section 28(8) of the Act is read with Rule 15 of the Rules of 1965. Therefore, in a case if a Federal Society is having its individual members, the voting right of such individual members shall be regulated by Rule 15. Further aspects which appear to be from the language of Rule 15 of the Rules 1965 is to give a representation to the individual members, but such representation shall be through the delegates of the individual members who may be elected from amongst the individual members. The fact that in Clause A of Sub-Rule (1) of Rule 15 of the Rules of 1965 the language used is whichever is less shows that Rule Making Authority wanted representation of individual members not exceeding a particular limit in a Federal Society, more particularly so far as it related to the representation in the General Body, in which the election of the members of the Managing Committee was to take place prior to amending Act of 1982. The aforesaid intention of Rule Making Authority is further apparent from Sub-Rule (2) of Rule 15, which provides that the delegates on the Committee shall not, at any time, exceed 1/3rd of the number of the representative societies or total number of delegates elected and there also the language used is whichever is less. Therefore, it is apparent that beyond the Page 1032 representation provided of the individual members as per Rule 15, in a Federal Society, rights of individual members are not recognized, more particularly in a case where Federal Society is also having individual members in addition to member Cooperative Societies. Such position prevailed prior to the amending Act of 1982.
15. When the amending Act of 1982 is enacted and brought into statute book such position of the Federal Society having also individual members in addition to member Cooperative Society continued and the same is apparent because in the Amending Act of 1982 no provision is made for prohibiting the membership of individual persons in a Federal Society, nor there is provision for automatic cessation or expulsion of individual members in a Federal Society. By amending Act of 1982 for a particular class of Federal Society and certain other Societies considering that the functioning of such Societies involves public interest, a separate status and a separate mode of election is provided to a particular class of a Federal Society and also other societies, which are identified and classified under Section 74C of the Act. As per Section 74C of the Act what is being regulated is the holding of the election, the term of the office of the elected member and a constitution of the Committee of Management. Therefore, the basic structure of holding the election as per the bye-laws, so far as it relates to giving representation to the members constituency-wise, is not altered. The aforesaid position is apparent even from Rule 4 of the Rules of 1982 which, inter alia, provides for preparation of the provisional list of voters constituency-wise as per the bye-laws. It may be noted that earlier, prior to the amending Act of 1982, even for all Federal Societies, the election of the Members of the Managing Committee was to take place at the General Board Meetings or Annual Meetings of the Societies and the position of the bye-laws is superseded and a specific procedure for holding of the election of the members of the managing committee is super-imposed for specified Societies, which are identified under Section 74C of the Act. As observed earlier had it been a case prior to amending Act of 1982 of a Federal Society having its individual members in addition to the member Cooperative Societies, first there was the election of the delegates from amongst the individual members in accordance with Rule 15 of the Rules of 1965 and thereafter such delegates were to represent the individual members in a General Board Meeting or Annual General Meeting at the time of not only election, but also for transacting the various other business of a Federal Society.
Further at the election, the delegates of the individual members were to participate as the voters and the election was being held constituency-wise as per the bye-laws at the Annual General Meeting.
16. After the amending Act 1982, the position which was in existence for election of delegates from amongst the individual members is neither wiped out, nor abolished. It is only at the stage when the election of a member of the Managing Committee takes place constituency-wise which, inter alia, may include the constituency of individual members, such delegates are to act as the voters when the election is to be held of the members of the Managing Committee as per the Section 74C of the Act read with Chapter XI A of the Act read with the relevant Rules. Therefore, the position Page 1033 as prevailed prior to the preparation of the voters list which in the present case was for election of the delegates from amongst the individual members as per the Rule 15 is neither abolished, nor ignored. It is only at the stage when the election of the members of the Managing Committee is to take place as per the bye-laws, there will be applicability to Rule 4 and the other procedure of the election as provided under Chapter XI A read with Rules of 1982.
17. The attempt on the part of the Respondent No. 1 to contend that since as per the Rule 4 all the persons who are members are required to be included in the provisional list, every member including individual member would be required to be included in the provisional voters' list is not only ill-founded, but is contrary to its own stand even taken in the amendment in the bye-laws. The proposed bye-laws do not provide that all individual members shall be included in the voters' list, but it provides for one right of vote at the Annual General Meeting by the elected delegates from amongst each 25 individual members. Therefore, it appears that even the Respondent No. 1 Sangh while proposing amendment in the bye-laws has not even conceived the situation of including all individual members to be included in the provisional voters' list as sought to be canvassed by Mr. Champaneri. The said contention appears to be contrary to the scheme as suggested in the proposed amendment of the bye-laws. It is also ill-founded because, as observed earlier, the applicability of Rule 4 is at the time when the election of the Members of the Managing Committee is to take place and not at the time when the election of delegates are to be held from amongst the individual members.
18. Further, even as per the Rule 4 of the rules of 1982 the provisional list is to be prepared not only constituency-wise as provided in the bye-laws, but the names of voters are to be arranged constituency-wise as laid down in the bye-laws. The aforesaid language shows that the inclusion of the names as voters to be arranged constituency-wise as laid down in the bye-laws and, as observed earlier, the bye-laws in a specified society, which is also a Federal Society, can provide for inclusion of the names of the delegates as voters for constituency of individual members. Therefore, the applicability of Rule 15 of Rules of 1965, more particularly so far as it relates to holding of the election of delegates is concerned, would operate at a stage prior to the holding of the election of the members of the Managing Committee and in that view of the matter, it cannot be said that there is any inconsistency of Rule 15 of Rules 1965 with Rules of 1982. Merely because the definition is provided of the word Society in the rules of 1982, it cannot be said that Rule 15 of the Rules of 1965, which is applicable to all Federal Society would not apply to a specified society, which is also Federal Society. Such aspect of non-applicability may deserve consideration only if inconsistency is to arise. As such Rule 15 of 1965 is applicable to all Federal Societies and as there is no inconsistency between the Rules of 1965 and Rules of 1982 and as Rules of 1982 are to be made applicable at the stage when the process of holding of the election of the Members of Managing Committee is to be held and not for the process prior to the holding of the election of the Members of the Managing Committee, the contention of Mr. Champaneri Page 1034 cannot be accepted that Rule 15 is not applicable to a specified society, which is also a Federal Society.
19. If the order of the State Government is considered, which is impugned in this petition, the reasonings recorded show that the State Government has found that by the proposed amendment if the span of voters is extended, the same will not cause any adverse effect to the interest of the Society. Such consideration basically ignores the intention of the Rule Making Authority of not allowing the representation of the individual members beyond a particular limit in Federal Society, which is also specified society in comparison to the representation of the member Cooperative Society. The another aspect which has been considered by the State Government is that after 1982 amendment in the Act specific Rules of elections are framed. Such consideration by the State Government is, ex facie, without proper application of mind in as much as, as observed earlier, it is not at all examined as to whether the specific election rules for specified Cooperative Society are to apply for examining the validity of the bye-laws or not. It does appear that the reasonings recorded in the impugned order are not at all satisfactory. Apart from the above, even otherwise also as observed earlier, Rule 15 does apply to all Federal Societies, which are also specified Societies and the proposed amendment in the bye-laws is, ex facie, in contravention to the upper limit provided under Rule 15 of the Rules of 1965 and, therefore, the proposed amendment in the bye-laws is in contravention to Rule 15 of the Rules of 1965. If such is the situation, the proposed amendment in the bye-laws could not have been sanctioned by the Additional Registrar while allowing the appeal, nor the same could have been confirmed by the State Government while deciding the revision application, since Section 13(2) provides that the amendment in the bye-laws may be registered by the Registrar, if it is not contrary to the Act or the Rules.
20. In view of the discussion and observations made by this Court hereinabove, the proposed amendment in the bye-laws is contrary to Rule 15 of the Rules of 1965 and, therefore, the order passed by the Additional Registrar of directing for sanctioning the bye-laws and of the State Government of confirming the said position and the consequential action of the Registrar of sanctioning of the amendment in the bye-laws cannot be sustained in the eye of law and hence, they are hereby quashed and set aside. However, it is made clear that the respondent No. 1 Society may move the proposed amendment in the bye-laws, keeping in view the scheme of Rule 15 of the Rules of 1965, after taking into consideration the observations made hereinabove. If such a proposal is made, the same will be examined by the competent Authority in accordance with law, after taking into consideration the observations made hereinabove.
21. Subject to the aforesaid observations, the petition is allowed. Rule made absolute accordingly. Considering the facts and circumstances, there shall be no order as to costs.