Gujarat High Court
Madarsing B. Rajput vs State Of Gujarat & 4 on 23 June, 2014
Author: Akil Kureshi
Bench: Akil Kureshi
C/SCA/15334/2004 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 15334 of 2004
With
SPECIAL CIVIL APPLICATION NO. 12099 of 2004
With
SPECIAL CIVIL APPLICATION NO. 8958 of 2001
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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MADARSING B. RAJPUT....Petitioner(s)
Versus
STATE OF GUJARAT & 4....Respondent(s)
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Appearance:
MR PRAVIN P PANCHAL, ADVOCATE for the Petitioner(s) No. 1
MS SHRUTI PATHAK, AGP for the Respondent(s) No. 1 - 3
MR DHAVAL M BAROT, ADVOCATE for the Respondent(s) No. 5
MR DILIP B RANA, ADVOCATE for the Respondent(s) No. 4
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
Date : 23/06/2014
Page 1 of 15
C/SCA/15334/2004 JUDGMENT
ORAL JUDGMENT
1. These petitions though involve different facts, central issue is with respect to the registration of a cooperative society in the same area/village where another cooperative society in the same filed of operation is in existence. They have, therefore, been heard together and would be disposed of by this common judgement.
2. We may notice facts at the outset :
SCA No.15334/2004
3. The petition is filed by one Nagana Dudh Utpadak cooperative society challenging an order dated 11.11.2004 passed by the Deputy Secretary (Appeals), Government of Gujarat, Department of Agriculture and Cooperation. Respondent no.4 herein was the proposed society also of milk collection in the same village Nagana. Application for registration of the society was filed before the District Registrar, Palanpur. On 17.11.2003, the District Registrar, Palanpur, rejected the application. Against the order of District Registrar, respondent no.4 filed appeal before the Additional Registrar (Appeals), Cooperative Society, Government of Gujarat. In such appeal, present petitioner was not joined as a party. Appeal was rejected by order dated 14.9.2004. Against such order respondent no.4 preferred further revision application before the State Government. The Deputy Secretary (Appeals) allowed the revision petition by impugned order dated 11.11.2004. Against such order, present petition has been filed.
Page 2 of 15C/SCA/15334/2004 JUDGMENT SCA No.12099/2004
4. This petition is filed by a milk cooperative society situated at village Nandotra, District Banaskantha. The petitioner has challenged an order dated 15.9.2004 passed by the Deputy Secretary (Appeals). Respondent no.4, the proposed milk cooperative society, also wanted to establish its operations and was situated on the same village. An application for registration was therefore, made to District Registrar. The District Registrar by his order dated 24.4.2002 refused to grant such registration. Respondent no.4 thereupon preferred appeal before the Additional Registrar. Such appeal was dismissed on 23.7.2003. Against such order, respondent no.4 preferred revision petition before the State Government. The Deputy Secretary by his impugned order dated 15.9.2004 allowed the revision petition. In the present case, objections of the petitioner were taken into account at all stages.
SCA No. 8958/2001
5. This petition is filed challenging the revisional order dated 9.1.2000. The petitioner had applied for Seva Sahakari Mandali in village Jadiya, Taluka Dhanera, District Banaskantha. There was already a group cooperative society operating in the same field having its field of operation in eight villages including village Jadiya. Such society i.e. respondent no.1 herein opposed the registration of the petitioner society. The District Registrar by his order dated 24.12.1998 granted registration upon which respondent no.1 preferred appeal before the appellate authority. District Registrar by his order dated 17.4.1999 rejected the appeal upon which respondent no.1 preferred Page 3 of 15 C/SCA/15334/2004 JUDGMENT revision petition before the State Government. The Deputy Secretary (Appeals) allowed the revision application by impugned order dated 9.1.2000. Hence this petition.
6. The question of registration of rival societies in the same filed of operation in the same area has occupied attention of this Court on several occasions. The State Government also in consonance with section 4 of the Gujarat Co operative Societies Act, 1961 and the Rules made thereunder, has been issuing circulars containing guidelines for governing such applications. Section 4 of the Gujarat Cooperative Societies Act, 1961 provides that for the purpose of securing registration of a proposed society, in addition to establishing that it fulfills requirements of main body of the section, the authorities have to additionally examine whether any part of the proviso is applicable and that therefore, it would not be desirable to grant registration to such a society. If it is found that registration of such proposed society may have an adverse effect upon any other society, such society would not be registered. The philosophy behind this principle is that in the cooperative movement, there should not be element of unhealthy competition between the rival societies operating in the same field.
7. In context of milk cooperative society, the Government of Gujarat issued a circular dated 23.8.1982 pointing out to the District Registrar that it has come to the notice of the Government that in the same village parallely more than one milk cooperative society have been operating. The policy of the Government has been to permit establishment Page 4 of 15 C/SCA/15334/2004 JUDGMENT of only one cooperative milk society in the same village along Amul pattern. This is not being consistently followed. It was therefore, conveyed to the District Registrar that such policy of registering only one cooperative milk society in the same village be strictly followed. Further clarifications were issued by the State Government in circulars dated 8.9.1989 and 7.11.1989 to some extent relaxing the rigors of the previous guidelines and the directives issued under abovenoted circular dated 23.8.1982. It was provided interalia that ordinarily in one village only one milk cooperative society would be registered except in cases where on account of geographical reasons such as long distance or where the outer area of village are intercepted by river, rivulets or ravines leading to difficulty or complete inaccessibility to the main village, in such cases, application can be considered provided financial condition of the existing society is not adversely affected and additional milk is likely to be available. If there is possibility of daily collection of 80 to 100 litres on an average, another society could be viable, however, before taking any such decision to register another society, it should be examined whether it is possible to set up milk collection centre of the existing society.
8. In case of B.B.Shroff and anr. v. Sardar Bhilandwala Pardi People's Co. Op. Bank Ltd. reported in 22 GLR 805, Learned Single Judge of this Court held that the principle flowing from proviso of section 4 of the Gujarat Co operative Societies Act, 1961 applies at the stage of registration of society and it would also be relevant even at Page 5 of 15 C/SCA/15334/2004 JUDGMENT the stage of considering the question whether to register an amendment of the bylaws of a society, the area of operation of the society is to be extended and is likely to undermine the cooperative principles or to have an adverse effect upon any other society, such amendment would not be in accordance with the Act or the Rules and the Registrar would not grant registration to such an amendment.
9. In case of Vachhol Dudh Utpadak Sahakari Mandali Limited and other v. State of Gujarat and others in Special Civil Application No.15560/2003 by order dated 7.10.2006, learned Single Judge of this Court recognised the right of an existing society to object to registration being granted to another society in the same village. It was observed as under :
"17.1 Thus even while recognising that the existing statutory provisions as well as Government guidelines provide sufficient safeguard for consideration of applications for grant of registration of societies to ensure that the implementation of such guidelines is fair and that procedure is transparent, certain directives are necessary.
18. While hearing these petitions, it is found that large number of cases arise out of existing societies opposing the registration of proposed societies in the same area. At the time when Registering authority is considering such applications, existing societies are not granted any hearing. Eventually, when registration is granted to a new society, existing societies carry the issue further in appeal and revision. The appeal and revision are entertained at their instance and this Court also has been entertaining the petitions at the instance of such societies. Thus by Page 6 of 15 C/SCA/15334/2004 JUDGMENT necessity as well as convention, locus standi of such existing societies to question grant of registration to a new society has been recognised. Such societies however, enjoy no right of being heard before the applications of rival societies are permitted. To my mind, this is somewhat of contradictory situation. If an existing society has right to appeal against the registration granted to a new society, such society must also have a right to be heard before the application of new society for registration is granted. This would be in consonance with the principles of natural justice. This would also be in larger interest since such society would be, at the outset, in a position to place material on record for consideration of Registering authority. As already noted section 4 of the said Act provides that if in the opinion of the Registrar, registration of a society may have an adverse effect upon any society, it shall not be registered. This aspect has been further highlighted in Government Resolution dated 1872003. It is provided interalia that it should be ensured that in the same village in the same category not more than one society should be registered. This rule is not inviolable and for good reasons exceptions can be made particularly if it is found that registering another society would have no adverse effect on the existing society. Nevertheless, existing society would have a right to place material on record and be heard to establish before the authorities that such registration should not be granted.
18.1 Considering these aspects of the matter, it would be appropriate to permit the existing societies operating in the same field to raise their objections and to be heard (not necessarily in person) before applications of new societies (covered under said Government Resolution dated 187 2003) in the same village/group villages are decided by the Registering authority.
19 Above situation would however, arise only in cases where primary village level societies are fighting for Page 7 of 15 C/SCA/15334/2004 JUDGMENT registration. In large number of cooperative societies at different levels however, such a situation may not arise. In such other cases also, question of adverse effect on existing society would arise. It would be desirable if the objections of other societies which are likely to be affected are taken into consideration by the Registering authority before taking a final decision regarding registering of a new society. For the above purpose since it would not be possible to identify the society which may face ultimate adverse effect, it would be appropriate that the Registering authority upon receipt of application for registration of a new society exhibits a copy of such application on a prominent place in the office for a period of 10 days which would enable other societies to raise their objections, if any. In response to such exhibiting of notice, if any objections are raised before the Registering authority, same should be taken into account before deciding the application for registration of a new society. It is however, made clear that only by virtue of raising objections, the objector would not ipso facto enjoy a right to be heard or appeal against the order which may be passed and such rights will be governed on the basis of facts arising in individual cases."
10. With this background we may advert to the individual petitions.
SCA No.15334/2004
11. As noted earlier, the orders passed by the District Registrar and the appellate authority were adverse to respondent no.4. It was only the revisional authority which allowed the revision. The revisional authority noted that though there was an existing milk cooperative society in the same village, due to geographical reasons, it was necessary to register another society. He noted that there Page 8 of 15 C/SCA/15334/2004 JUDGMENT was a distance of more than 1 km between the two societies and area is separated by ravines. The new society is likely to get milk collection of more than 80 to 100 litres a day. There are sufficient milk animals in the village to sustain both the cooperative societies. It is stated that respondent no.4 society enjoys registration pursuant to the revisional order since 2004 and thus is in operation since then. Learned counsel Shri Dilip Rana for the said society therefore, submitted that the petition be dismissed. The decision of this Court in case of Vachhol Dudh Utpadak Sahakari Mandali Limited and other(supra) was rendered after the revisional order was passed in the present case. Merely because the petitioner was not heard, revisional order may not be interfered.
12. If the observations made in the revisional order were after opportunity to the petitioner to place relevant materials on record, I would perhaps have not found reason to interfere. However, at no stage present petitioner existing cooperative society got any opportunity to raise its objections. Before the District Registrar, prior to the decision of this Court in case of Vachhol Dudh Utpadak Sahakari Mandali Limited and other(supra), no such stage was envisaged. The application for registration was rejected. It was respondent no.4 therefore, being aggrieved by the order preferred appeal. Appeal was also dismissed. The revision petition of respondent no.4 was allowed. At no stage, therefore, the petitioner got any opportunity of placing relevant materials on record. The observations of the revisional authority therefore, were made without any resistance from the petitioner and the rival facts being Page 9 of 15 C/SCA/15334/2004 JUDGMENT brought on record. In that view of the matter, in my opinion, revisional order is required to be set aside.
13. Considering the facts of the case, it would be appropriate to place the issue back before the revisional authority instead of remanding to the first registering authority. This would be in the interest of justice to eliminate two additional stages. It must however, be clarified that registration that respondent no.4 society is enjoying since 2004 would continue till a fresh order is passed by the revisional authority and depending on the outcome thereon. In other words though the revisional order is quashed, the registration of respondent no.4 shall continue till a fresh order is passed by the revisional authority.
SCA No.12099/2004
14. As noted, the two lower authorities had refused to grant registration to respondent no.4. The revisional authority however, reversed both these orders. The reason cited was that registration of a new society was unlikely to economically hurt the existing society. However, in the process, in my opinion, the revisional authority missed two vital aspects of the matter. Firstly, that the existing milk cooperative society had created a cooling centre for considerable expenditure of Rs. 12 lakhs in the year 2003. Secondly, the new society was situated barely 100 meter away from the existing society. This was fundamentally opposed to Government policy of not encouraging two rival cooperative milk societies in the same village. As noted, in terms of proviso to section 4 of the Gujarat Cooperative Page 10 of 15 C/SCA/15334/2004 JUDGMENT Societies Act, the Government has issued guidelines. One of them suggested that in the same village, there should not be more than one milk cooperative society and the District Registrar should implement this Government policy. Later on these directives were somewhat diluted by providing that though as a rule in the same village more than one milk cooperative society should not be registered, in exceptional cases, where because of geographical reasons, it is necessary to do so, registration of another society would be permissible. Number of guidelines were however, issued for the Registrar to follow in this regard. The geographical reasons were elaborated as to include long distance, intersection by river, rivulets or ravines making it difficult or impossible for the residents of far away places of village to access the milk collection centre of existing society. Even then the viability of new society and whether it was possible to establish a milk collection centre by the existing society were the factors to be borne in mind.
15. Without examining any of these aspects, revisional authority reversed the orders passed by the two authorities and in the process granted registration to another milk cooperative society within 100 meters away from existing society. None of the financial aspects were considered. The objection of the society on the ground that it had created facility of milk collection centre at considerable expenditure was brushed aside. As noted, the statute as well as the Government policy recognise that in cooperative movement the element of unhealthy competition with rival cooperative societies should be avoided. Bearing in mind such Page 11 of 15 C/SCA/15334/2004 JUDGMENT principles and the decision of this Court noted above, I am of the opinion that revisional authority committed a serious error in granting registration to respondent no.4 society. Such order is therefore, quashed.
SCA No.8958/2001
16. As noted, it was the revisional authority which reversed the orders of the appellate authority and cancelled the registration granted to the petitioner. There was already an existing group cooperative society in the same village. The revisional authority noted that previously this existing society had field of operation in eight villages and had nearly 2095 members. Over a period independent societies were registered in six out of these eight villages. Field of operation of group society was thus confined to only eight villages. It was noted that if the proposed society is registered in the same village, there will be two societies with the same objections that would come into existence in the village. This would adversely affect the existing society. Because of separation of other society in other villages, the existing group cooperative society's field of operation is virtually confined to one village Jadiya. Such society had nearly 2095 members. Because of separation of village, this number would come down considerably. In the same village, it will not be viable to register two societies. In my opinion, revisional authority has given cogent reasons which are supported by materials on record. From the affidavit in reply filed by respondent no.1, one can gather that population of the village is about 5000. Village Rampur, the other village in which respondent no.1 still had field of operation had population of 1597 residents.
Page 12 of 15C/SCA/15334/2004 JUDGMENT Considering such facts, in exercise of writ jurisdiction, I do not see any reason to interfere. When the revisional authority on materials on record came to the conclusion that registering another society in the same village in the same field of operation would adversely affect the existing society, such decision is not required to be interfered with. As noted, Government circulars laying down the guidelines for considering cases under the provision of section 4 of the Gujarat Cooperative Societies Act, 1961, essentially recognise the principle that as a rule there should be one cooperative society in one village. This would be subject to exceptions. At all times however, the basic principle of the statute that registration of a new society should not in any manner have adverse effect on any other society would be a guiding factor. Ms. Jani for the petitioner however, vehemently contended that in six other villages, independent cooperative societies were registered. In one such case in village Bhatib, the revision petition was rejected. This Court confirmed the order of appellate authority reversing the order of revisional authority. She further contended that the petitioner society came into existence and also started its operations. It operated till the revisional authority passed the impugned order. Drawing my attention to another decision of the revisional authority dated 1.11.2008 as at AnnexureAA2, she contended that in such a situation, it will not be advisable to discontinue the registration of society since it would give rise to multiple set of proceedings. In my opinion however, neither of the two contentions would convince me to allow the petition. Each case must be judged on its facts. In the present case, facts are eloquent. Revisional authority has Page 13 of 15 C/SCA/15334/2004 JUDGMENT given detailed reasons why in terms of provision of section 4 of the Gujarat Cooperative Societies Act, and the guidelines issued by the Government, registration of society would not be advisable or even permissible. The applications of other societies in other villages would depend on the material that may be available in such cases. Secondly, in order dated 1.11.2008, no such principle has been laid down that once an order is passed and the society is registered, such registration can never be cancelled irrespective of facts. No such principle flows from any other statutory provisions. To suggest that once registration is granted, the same cannot be withdrawn would be severely restricting the revisional authorities powers which the statute does not suggest. It may be that granting of registration and a society enjoying such registration for a long period of time may be a factor, to dissuade the appellate or revisional authority to withdraw the same. No proposition can be laid down that once such registration is granted irrespective of factual and legal aspects involved, such registration cannot be withdrawn.
17. In the result, following order is passed :
1) Special Civil Application No.15334/2002 is partly allowed. Impugned order dated 11.11.2004 passed by Deputy Secretary(Appeals) is quashed. However, registration that respondent no.4 society is enjoying since 2004 would continue till a fresh order is passed by the revisional authority and depending on the outcome thereon. The matter is placed back before the revisional authority for fresh consideration. Special Civil Application is disposed of.Page 14 of 15
C/SCA/15334/2004 JUDGMENT
2) Special Civil Application No.12099/2004 is allowed
and disposed of.
This order shall stand stayed at the request of counsel for the respondent no.4 till 31.8.2014.
3) Special Civil Application No.8958/2001 is dismissed.
(AKIL KURESHI, J.) raghu Page 15 of 15