Gujarat High Court
The Momaipura Mahila Dudh Utpadak ... vs Additional Registrar (Appeals) on 30 September, 2022
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 16443 of 2020
With
R/SPECIAL CIVIL APPLICATION NO. 9907 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 9908 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 9909 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 9910 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15706 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
==========================================================
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 or any order made thereunder ?
==========================================================
THE MOMAIPURA MAHILA DUDH UTPADAK SAHAKARI MANDLI LIMITED
Versus
ADDITIONAL REGISTRAR (APPEALS)
==========================================================
Appearance:
MR DIPEN DESAI(2481) for the Petitioner(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 1,3,4,5
MR PRAKASH JANI, SENIOR ADVOCATE WITH MR SHIVANG P
JANI(8285) for the Respondent(s) No. 2
MR VC VAGHELA for the Respondents
MR DHAWAN JAYSWAL, AGP for the Respondent-State.
==========================================================
Page 1 of 106
Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 30/09/2022
CAV JUDGMENT
1. Heard learned advocate Mr. Dipen Desai for the petitioner, learned Senior Advocate Mr. Prakash Jani assisted by learned advocate Mr.Shivang P.Jani and learned advocate Mr. V.C. Vaghela for the respondents and learned Assistant Government Pleader Mr. Dhawan Jayswal for the respondent-State.
2. Rule returnable forthwith. Learned advocate Mr. Shivang P. Jani, learned advocate Mr. V.C. Vaghela and learned Assistant Government Pleader Mr. Dhawan Jayswal waives service of notice of rule on behalf of the respondents.
3. These petitions are filed challenging the orders passed by the Additional Registrar under section 153 of the Gujarat Cooperative Page 2 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Societies Act, 1961 (For short "the Act, 1961") cancelling the registration of the petitioner societies granted by the District Registrar under section 4 of the Act, 1961.
4. As the issues involved in all the captioned petitions are the same and challenge is also to the similar order passed by respondent no.1-Additional Registrar, these petitions were heard analogously and having regard to the peculiar facts and circumstances of the case, the pivotal issue involved in these petitions and with the consent of the learned advocates appearing for the parties, these petitions are being disposed of by this common judgment and order.
5. The challenge to the impugned orders in the respective petitions are as under :
(1) In Special Civil Application No.16443 of Page 3 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 2020, Order dated 10.12.2020 passed by respondent no.1-Additional Registrar (Appeals) in Appeal no.53 of 2019 and consequential order dated 11.12.2020 of the respondent No.5-Election Officer excluding the name of the petitioner society in the voters list was challenged.
(2) In Special Civil Application No.9907 of 2021, Order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.23 of 2021 was challenged.
(3) In Special Civil Application No.9908 of 2021, Order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.24 of 2021 was challenged.
(4) In Special Civil Application No. 9909 of 2021, Order dated 23.06.2021 passed by the Page 4 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 respondent no.2-Additional Registrar (Appeals) in Appeal No.25 of 2021 was challenged.
(5) In Special Civil Application No.9910 of 2021, Order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.22 of 2021 was challenged.
(6) In Special Civil Application No.15706/2020, prayer is made to hold inaction of respondent no.2 and 3 in not taking any action on the representations of the petitioner as illegal and further to direct respondent no.4 to restart the collection of milk of the petitioner society.
6. For the sake of convenience, Special Civil Application No.16443/2020 is treated as the lead matter. The facts giving rise to this Page 5 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 litigation may be summarised as under :
6.1) The petitioner society applied online for the registration of its society under the provisions of the Act, 1961 before respondent no.3- District Registrar.
6.2) Pursuant to the application of the registration of the petitioner society, respondent no.2 - The Vadhasar Dudh Utpadak Sahakari Mandli Limited filed its objections opposing the registration of the petitioner society.
6.3) Respondent no.3-District Registrar by letter dated 15.03.2019 called upon the petitioner society to file reply to such objections and statement of the petitioner was also recorded and considering the statements of the petitioner, respondent no.3
- District Registrar rejected the objection Page 6 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 of respondent no.2 society considering that the petitioner society has complied with the provisions of the Act, 1961 and the Rules as to the registration and its bye-laws are not contrary to the Act and the Rules and thereafter passed the order dated 29.03.2019 to grant the registration under section 9 of the Act, 1961.
6.4) Respondent no.2 society feeling aggrieved by the order dated 29.03.2019 preferred appeal under section 153 of the Act, 1961 before respondent no.1-Additional Registrar. The petitioner also filed reply opposing the appeal. However, respondent no.1 by order dated 24.07.2019 granted stay against the registration of the petitioner society. The petitioner therefore, approached the Deputy Secretary (Appeals), Agriculture and Cooperation Department, State of Gujarat, by preferring Revision Application No.42/2019 Page 7 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 which could not be listed for hearing due to corona pandemic after March 2020.
6.5) The petitioner thereafter filed Special Civil Application No.8842/2020 challenging the order dated 24.07.2019 passed by respondent no.1 - Additional Registrar which was partly allowed by order dated 6.08.2020 by this Court suspending the stay order till the hearing of the appeal by respondent no.1.
6.6) Meanwhile, respondent no.5 Election Commission notified the elections of the respondent no.4- Mehsana District Co-
operative Milk Producers' Union Limited by publishing notice dated 1.12.2020. Respondent no.4 - Union stopped taking supply of the milk from the petitioner from 3.11.2020. The petitioner therefore, filed Special Civil Application No.15706/2020 before this Court Page 8 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 which is also heard along with this group of petitions.
6.7) Respondent no.2 raised the objections before the Election Officer on 4.12.2020 against the inclusion of the petitioner society in the voters' list on the ground that registration of the petitioner society was stayed by the Additional Registrar. The petitioner filed reply along with order passed by this Court on 6.08.2020 suspending the order of stay.
6.8) Thereafter respondent no.1 Additional Registrar heard the appeal filed by respondent no.2 and by impugned order dated 10.12.2020 cancelled the registration of the petitioner society.
6.9) The petitioner society has therefore, challenged the order dated Page 9 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 10.12.2020 passed by the Additional Registrar cancelling the registration of the petitioner society in Special Civil Application No.16443/2020. Similar orders of cancellation of registration are passed in Special Civil Application No.9907/2021 to 9910/2021.
7. Learned advocate Mr. Dipen Desai for the petitioner-societies submitted that the main issue that arises in all these petitions is whether appeal under Section 153 of the Act, 1961 is maintainable at the behest of the existing societies challenging registration granted to a new society and even if it is maintainable, to what extent and on what ground such appeal can be filed and entertained.
7.1) It was submitted that Article 19(1)
(c) of the Constitution of India, provides that all citizens have the right to form a Page 10 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 co-operative society and Article 19(4) provides for powers of the State Legislature to impose reasonable restrictions in the interest of sovereignty and integrity of India or public order or morality in exercise of such rights conferred under Article 19(1)
(c) of the Constitution of India. It was submitted that every citizen has a fundamental right to form a co-operative society, subject to reasonable restrictions to be imposed by the State as provided in Article 19(4). It was therefore, submitted that the appeal filed by respondent no.2 before the Additional Registrar was not maintainable.
7.2) Learned advocate for the petitioners submitted that registration of a cooperative is governed by section 4 of the Act, 1961 which provides that the society which has as its object for the promotion of the economic Page 11 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 interests or general welfare of its members or of the public in accordance with the cooperative principles or as society established with the object of facilitating the operations of any such society, may be registered and proviso to section 4 stipulates that society shall not be registered if, in the opinion of the Registrar, it is economically unsound, or its registration may have an adverse effect upon any other society, or it is opposed to, or its working is likely to be in contravention of public policy. It was therefore, submitted that the Registrar may refuse registration only on three grounds namely, (i) it is economically unsound, or (ii) Registration may have adverse effect upon any other society, or (iii) it is opposed to or its working is likely to be in contravention of the public policy.
Page 12 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 7.3) It was submitted that the petitioner-societies made an application before the District Registrar as provided under section 8 of the Act,1961 read with Rule 3 of the Cooperative Societies Rules, 1965 (For short "the Rules, 1965") and registration was granted as per the procedure prescribed under section 9 of the Act, 1961. It was pointed out that the petitioners- societies complied with the provisions of the Act and the Rules and accordingly after considering the objections filed by respondent no.2, District Registrar has granted registration to the petitioners- societies.
7.4) Reliance was placed on section 9(6) of the Act, 1961 which provides that if the Registrar refuses to register the society, he shall forthwith communicate its decision with reasons thereof to the person who has signed Page 13 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 first on the application so as to submit that only in case of refusal, District Registrar has to give reasons for refusal otherwise the Certificate of Registration is to be issued to the society under section 9(4) which is a conclusive evidence as per section 9(5) of the Act,1961. It was therefore, submitted that respondent no.2 could not have challenged the registration granted to the petitioners-societies by preferring an appeal under section 153 of the Act, 1961. 7.5) It was submitted that on conjoint reading of sections 4, 8 and 9 of the Act, 1961 and Rule 3 of the Rules, 1965, it only provides for inviting objections from the existing societies by the Registrar with a view to satisfy that the registration of the new society does not have adverse effect on the existing societies. It was therefore, submitted that the existing societies have no Page 14 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 right to be heard by the Registrar or to prefer an appeal against the order of registration of the new society. 7.6) It was submitted that Section 153 of the Act provides for an appeal against an order passed under Sections 4 and 9, however, according to the petitioner-societies, no appeal could be preferred by the existing society as no right of hearing by the District Registrar at the time of considering the application for registration is required to be given nor District Registrar is required to communicate the order of registration to the existing society giving right to the existing societies to file appeal.
7.7) Reliance was placed on the decision in case of Rameshbhai Maganbhai Lakhani v/s. State of Gujarat reported in 2011 (4) GLR Page 15 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 2877, wherein this Court has held that the process of registration of a new society cannot be in any manner termed to be a judicial or a quasi-judicial function so as to envisage an adversarial approach from the existing societies. It was submitted in view of the decision of this Court wherein it is held that even the existing society did not have any statutory right to lodge formal or substantial objection against consideration of proposal of new society, based upon the safeguards provided under Section 4 of the Act, 1961, more particularly, when a group of like-minded citizens come together and form a co-operative society, then such society has to be registered except it is found that one of the three exceptions provided in proviso to Section 4 of the Act, 1961 are attracted.
7.8) Reliance was also placed on the Page 16 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 decision of Bombay High Court in case of Sonewadi Vividh Karyakari Seva Sahakari Society Ltd. Vs. State of Maharashtra and Others reported in 2002 SCC Online Bom 1295, wherein it is held as under:
"11. The provisions relating to the registration of the societies are contained in Chapter II of the Act. Section 3 of the Act provides that the State Government may appoint the Registrar and appoint one or more persons to assist the Registrar. Accordingly the State Government has appointed the Registrar, and also appointed Joint Registrars, District Deputy Registrars and Assistant Registrars to assist the Registrar. The power of granting registration to the Cooperative Societies has been delegated to the District Deputy Registrar. Section 4 of the Act lays down as to which Societies can be registered. According to Section 4, the Society, which has as its objects promotion of the economic interests or general welfare of its members, or of the public, in accordance with the co- operative principles, may be registered as a society. Proviso to Section 4 lays down that the society, which is likely to be economically unsound, or the registration of which may have an adverse effect on development of the cooperative movement, or the registration of which may be contrary to Page 17 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 the policy directives which the State Government may, from time to time, issue, shall not be registered. Section 6 of the Act lays down the conditions for registration of the societies such as, society must have atleast 10 or such higher number as the Registrar may consider necessary having regard to the economic viability and development of co-operative movement, as members. Section 7 confers a power on the State Government to exempt any society or class of societies from any of the requirements as to the registration. Section 8 lays down that application for registration shall be made in the prescribed proforma and shall be accompanied by four copies of the by- laws and such registration fee, as may be prescribed; the application is required to be signed atleast by 10 proposed members. Under Section 9 the Registrar, if satisfied that the society has complied with all the provisions of the Act and the Rules, to grant registration to the society within two months from the date of the receipt of the application. The Act or the Rules nowhere provide for granting of hearing to the existing society before registering a new society.
12. The only ground as canvassed by Shri Raghuvanshi for granting of hearing to the existing society is that the business of the existing society may be adversely affected by the competition from the second society. Competition is a necessary part of life. Under the Companies Act, it is not necessary to grant hearing to existing Company even Page 18 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 if a new Company is proposed to be incorporated for carrying on the same business and even if such registration is likely to adversely affect the business of the existing Company. The Partnership Act does not confer any power on the Registrar of Firms to refuse the registration of the partnership on the ground that the second partnership would compete with any firm already in existence. Competition is not recognised as a ground for refusing registration of any other association or organisation under any other law. The competition would ultimately benefit the consumers. The registration cannot, therefore, be refused on the ground of competition unless there is a clear statutory provision to that effect, and if at all any statute makes such provision, constitutional validity thereof would have to be tested on the touchstone of Articles 14 and 19 of the Constitution of India. The registration of the society is, therefore, a rule and refusal to grant registration is an exception.
13. Registration of a proposed society can be refused only on the grounds laid down in proviso to Section 4 of the Act. The grounds on which the registration of a society can be refused are, (i) the proposed society is likely to be economically unsound, (ii) the registration of which may have an adverse effect on development of the co- operative movement, (iii) the registration of which would be contrary to the policy directives, which the Page 19 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 State Government may, from time to time, issue. The first ground that the Society is likely to be economically unsound applies qua the proposed society and not qua the existing societies. The fact that by granting registration to the second society, the first society would become economically unsound is not a ground for refusal of registration to the second society. The power given to the State Government to issue policy directives must be exercised in consonance with the Act and not de hors the Act. The requirement as to the minimum turnover of Rs. 50 lacs prescribed by the State Government may be for the purpose of ensuring economical soundness of the second society and also for the purpose of ensuring that unviable Societies do not mushroom because the liquidation of one or more unviable Co-operative Societies may adversely affect the co-operative movement. But to restrict the number only to two societies, even where three or more societies can be financially viable, cannot be said to be for preventing an adverse effect on the development of the co-operative movement. Some villages may be so prosperous or resourceful and enterprising that there could be enough room for multiple societies having a turnover of more than Rs. Fifty lacs. To say that there should be only two societies in a village and there should not be third society, may stultify growth of co-operative movement and cannot be said to be a policy directive in consonance with the Act. The discretion conferred on the Registering Page 20 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Authority (Registrar or the Deputy Registrar, as the case may be), cannot therefore, be taken away under the guise that more than two multi-purpose societies should never be permitted in the same village. The existing society must be heard before registration of new society cannot be the general rule applicable in every case. Take for instance the big city like Mumbai or Pune (which may consist of only one or few revenue Villages). If a Co-operative Housing Society is registered by 10 members coming together in such city and other 10 or more persons desire to form another Co-operative Housing Society and propose to acquire land and construct a building adjoining to the existing society, can it be said that the first society should be heard before registration of the second society? If the principle that the first society should be heard is carried to its logical conclusion, then all existing housing societies in the city would have to be heard before registering a new housing society. This would result into absurdity."
7.9) Learned Advocate Mr. Desai therefore, submitted that the existing societies have no right to even lodge formal objections or file appeal against the registration of a new society. Hence, the appeal preferred by the existing societies Page 21 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 itself was not maintainable and on that ground only, the appellate order being without jurisdiction and without authority of law, is required to be quashed and set aside. 7.10) It was further submitted that the right of appeal is not an absolute right or an inherent and it is only a statutory right and for appeal being maintainable, it must have clear authority of law. In support of such submission, reliance was placed upon the decision of the Hon'ble Supreme Court in the case of Vijayprakash D. Mehta v/s. Collector of Customs, reported in 1988 (4) SCC 402, and the decision of Apex Court in the case of Shayam Kishor V/s. Municipal Commissioner of Delhi, reported in 1993 (1) SCC 2. It was therefore, submitted that the existing societies do not have any right of appeal under Section 153 of the Act, 1961. Page 22 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 7.11) In the alternative and without prejudice to the main contention of appeal not being maintainable under section 153 of the Act, 1961, it was submitted that assuming for a while that the existing societies have right of appeal then also, such right would only be limited to the proviso to Section 4 of the Act, 1961 for the purpose of showing any adverse effect upon the existing societies, if the registration is granted to the new society. In support of his submission, reliance was placed on the decision in case of Endala Milk Producers' Sahakari Mandali Limited v/s. State of Gujarat, reported in 2016 (1) GLR 13, wherein it is held as under:
"10. Now so far as the provision under Section 4 of the Act is concerned, it obliges the Registrar to grant registration to "any" society which is formed with the object of promotion of economic interests or general welfare of its members or with the object of facilitating the operations of any Page 23 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 society.
10.1 It is pertinent that Article 19(1)
(c) of the Constitution of India guarantees right to form an association.
In light of Article 19(1)(c) of the Constitution, objection against registration of a co-operative society which complies all requirements and fulfills all conditions prescribed by the Act would not be maintainable and cannot be entertained.
10.2 However, the proviso of Section 4 confers power to the authority, considering that reasonable restriction on right to form association can be prescribed by law, to decline registration in favour of a society in case where he is satisfied that registration of a society is not opposed to and may adversely affect operation of other society or where it is in contravention of public policy or it is economically unsound.
10.3 The said provision ensures elimination of unhealthy competition and to protect objects and principles of cooperation principally in social sector.
10.4 For such avowed purpose and object, said special authority is conferred to the Registrar.
10.5 So as to oppose registration of respondent No.4 society, the petitioner placed reliance on said proviso of section 4 of the Act.
10.6 Thus only if it is established that Page 24 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
(a) the society seeking registration is economically unsound and / or (b) its registration may adversely affect operation of any other society and / or
(c) its registration militates against public policy, the registration can be declined. 10.7 Therefore question arises whether in present case any one - or more than one - aspects out of various factors contemplated under said provision is established against the respondent No.4 society."
7.12) Relying upon the above decision, it was submitted that any appeal challenging order of registration of an existing society can only be entertained on the point of adverse effect and on no other ground whatsoever.
7.13) It was further submitted that any party filing appeal will have to show whether any of their legal or statutory right is violated or whether they are aggrieved party or not. In support of such submission, reliance was placed on the decision of Division Bench of this Court in case of Page 25 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Bhikhabhai Chanabhai Gajara v/s. Shemrala Gopalak Vividh Karyakari Sahakari Mandali Limited, rendered in Letters Patent Appeal No.460 of 2020 in Special Civil Application No.9848 of 2020 dated 06.10.2020, wherein the Division Bench while considering the scope of appeal under Section 153 of the Act, 1961 against an order of registration of a society, has observed as under :
"41. Thus, in order to become entitle to seek a statutory remedy, a person must show and establish that he is injured with a legal wrong. There must be an injury to a legally recognised, legally protected and legally enforceable right. The principle to be applied is that there must be a injuria sine damnum and not the damnum sine injuria for taking a legal action and a legal recourse. A damage suffered has to be coupled with legal injury. It is this kind of injury on which the right- enforceability may be based.
42. For acquiring a standing to sue or a standing to take a legal recourse or right to initiate legal action for relief, the presupposition is that there must subsist a legal wrong, one or invaded right in existence in relation to the subject matter in respect of which the action is sought to be Page 26 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 initiated and the relief is asked for. It is this element which makes a person the possessor of litigative interest to become an aggrieved person. Again the invasion of right sought to be remedied should not be of one infringed in abstract. Its invasion must be in the context of the subject matter and the provision for which the right to seek relief or what is called locus standi, is claimed.
43. Whether a person is aggrieved person, whether he has suffered a legal injury and whether he has thus the locus to seek remedy in law are the aspects, to be determined keeping in view the subject matter, the kind and nature of, and controversy, the legal provision with reference to which they arise. The context of the provision and the subject matter, are the important aspects
44. The appellant herein had no legal right of his own which could be said to have been infringed so as to entitle him to invoke Section 153 of the Act to seek remedy therein. It is only in the matters involving public interest dimensions, which is not the case here, that the rule of person aggrieved or the principles of locus standi is made elastic. As there is no right to be enforced with the appellant in respect of the subject matter, as he is not 'aggrieved person' and is devoid of locus in law, the writ of mandamus would not lie in respect of the prayer."
It was submitted that the Division Page 27 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Bench of this Court has categorically held that right under Section 153 of the Act, 1961 against an order of registration can only be availed by an aggrieved person who has suffered a legal injury.
7.14) It was therefore, submitted that the societies who have challenged the order of registration of the petitioners-societies in Special Civil Application Nos. 9907 to 2021 to 9910 of 2021 also have no locus whatsoever to prefer an appeal, as such societies cannot be considered to be aggrieved party as none of their legal rights was violated by registration of the petitioners-societies as they have failed to show any adverse effect on such existing societies due to registration of the petitioners-societies. 7.15) It was submitted that the appeal preferred by such existing society was not Page 28 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 maintainable as there was neither locus standi nor proviso to section 4 with regard to adverse effect was fulfilled. It was therefore, submitted that all the petitions are required to be allowed only on the ground that the appeal under section 153 of the Act, 1961 was not maintainable.
7.16) It was further submitted that the remedy of appeal provided under Section 153 of the Act, 1961 is not a remedy akin to public interest litigation where any stranger can challenge the registration of the petitioners-societies on any ground whatsoever.
7.17) Learned advocate Mr. Desai submitted that the Additional Registrar while allowing the appeals filed by the existing societies has committed an error in not following the guidelines stipulated in the judgment of this Page 29 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Court in Special Civil Application No.15560 of 2003 and allied matters inasmuch as in Special Civil Application No.16443/2020, the District Registrar has followed the guidelines issued by this Court by giving an opportunity to the existing societies to submit objection and after considering the same, registration was granted to the petitioners-societies whereas in cases of other four societies, no objections were ever submitted at the time of registration as such societies have no connection with the petitioners-societies as they are situated at far off place with no adverse effect at all for registration being granted to the petitioners-societies.
7.18) It was therefore, submitted that the reasoning of the Additional Registrar that the directions issued in the judgment rendered in Special Civil Application Page 30 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 No.15560 of 2003 have not been followed, is contrary to the facts on the record and therefore, such findings amounts to perverse findings and accordingly, the impugned orders are required to be quashed and set aside. 7.19) It was reiterated that in none of the cases, there is an adverse effect either pleaded or shown by the existing societies coupled with the fact that District Registrar after considering the objections and conducting inquiry has granted registration by passing a speaking order on 29.03.2019 wherein the evidence produced by the existing societies as well as the petitioners- societies with regard to the milk collection of the existing societies and that of the proposed societies, profit of the existing societies vis-a-vis the new societies, number of members etc. was considered in detail and after considering such aspects, the District Page 31 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Registrar has granted registration to the petitioner of SCA No. 16443/2020 on conclusion that the registration of the petitioners-societies will not have any adverse effect on the existing societies. 7.20) It was submitted by learned advocate Mr. Desai that even before the appellate authority, the existing societies have not shown any facts which would even remotely suggest an adverse effect due to registration of the petitioners-societies and there is no whisper as to how the registration of the petitioners-societies would have adverse effect on the existing societies. 7.21) It was therefore, submitted that in absence of any proof or even evidence that the registration of the petitioners-societies would have adverse effect on the existing societies, the Additional Registrar ought not Page 32 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 to have interfered with the order of granting registration.
7.22) It was further submitted that there is no law that there cannot be more than one society in a village and on the contrary if such view is taken then the same would be in violation of Article 19(1)(c) of the Constitution of India.
7.23) Learned advocate Mr.Desai also referred to and relied upon the circular dated 08.03.2019 whereby the circular dated 05.05.2015 relied upon by the Additional Registrar has been cancelled. It was therefore, submitted that the circular 08.03.2019 permits registration of more than one society in one village and therefore, the contention of the existing societies that there cannot be more than one society in one village is completely misconceived and Page 33 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 baseless.
7.24) It was further submitted that in absence of any evidence to show the adverse effect on the existing societies, the impugned orders passed by the Additional Registrar are required to be quashed and set aside, more particularly when in Special Civil Application No.16443 of 2020, the milk collection and profit of the existing societies has increased manifold and therefore, the contention that the registration of the petitioners-societies would have adverse effect on the existing societies is misconceived and misplaced. 7.25) Reference was also made to the order dated 29.03.2019 passed by the District Registrar granting registration to the petitioners-societies in Special Civil Application No.16443/2020 to show that said Page 34 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 order includes the condition that there should not be any adverse effect on the existing societies.
7.26) It was further submitted that the petitioner of Special Civil Application No.16443 of 2020 is a Womens' Co-operative Society registered for the benefit, upliftment and empowerment of the women of the village and none of the members of the petitioners-societies and the existing societies are common and therefore, the registration of the petitioners-societies ought not to have been cancelled by the appellate authority.
7.27) Learned advocate Mr. Desai submitted that the appellate authority has set aside the order of registration of the petitioner- society on flimsy ground that the husband of one of the promoters of the petitioners- Page 35 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 societies was Director in the existing society and since the husband has fallen out from the existing society, he has formed a new society which according to the Additional Registrar was material for considering the application for registration. It was therefore, submitted that such reasoning given by the appellate authority has no relevance whatsoever in view of the provisions of Sections 4, 8 and 9 of the Act, 1961 and the Rules,1965 which have been duly considered by the District Registrar while granting the registration to the petitioners-societies.
7.28) It was submitted that in all the petitions, the challenge to the registration of the petitioners-societies was made or impugned order was passed at the time of ongoing election. For example, in Special Civil Application No.16443 of 2020, election Page 36 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 process of Mehsana District Co-operative Milk Producers' Union Limited was going on and because of cancellation of registration of the petitioners-societies, their names were removed from the final voters' list by the Election Officer on the very next day whereas in cases of other petitioners-societies of Special Civil Application Nos.9907 of 2021 to Special Civil Application No. 9910/2021, the election of APMC, Balasinor was in progress and the registration of the petitioners- societies was cancelled so as to see that the petitioners cannot participate in the election. It was therefore, submitted the challenge to registration was not a bonafide challenge but with oblique purpose to ensure that the petitioners-societies would not be able participate in the election. It was therefore, submitted that the impugned orders were passed by the Additional Registrar with oblique motive to ensure that the Page 37 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 petitioners-societies do no participate in the elections resulting into colourable exercise of powers.
7.29) It was therefore, submitted that the impugned orders of Additional Registrar cancelling the registration of the petitioners-societies are not sustainable and deserves to be quashed and set aside.
8. On the other hand, learned Senior Advocate Mr. Prakash Jani with learned advocate Mr.Shivang Jani for the respondent no.2- existing society in Special Civil Application No.16443/2020 submitted that the petitions are not maintainable in view of alternative efficacious remedy available under section 155 of the Act, 1961 to prefer revision application against the order passed under section 153 of the Act, 1961.
Page 38 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 8.1) It was submitted that section 153 provides for filing an appeal against the order passed under section 4 of the Act, 1961 and accordingly, respondent no.2 has preferred an appeal before the Additional Registrar (Appeals) and therefore, there is no error of law in the order passed by the appellate authority by giving cogent reasons to cancel the registration of the petitioners-societies.
8.2) It was submitted that granting registration to the petitioners-societies is contrary to the principles laid down by this Court in case of Vachhol Dudh Utpadak Sahakari Mandali Limited Versus State of Gujarat rendered in Special Civil Application No. 15560 of 2003 decided on 7.10.2006, wherein it is held that the District Registrar is required to give an opportunity to the existing cooperative society to file Page 39 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 objections against the registration of the proposed society.
8.3) Learned Senior Advocate Mr. Jani submitted that the petitioner could not have filed these petitions because in eyes of law once registration is cancelled, there is no existence of petitioner as a cooperative society and there is no stay granted by any Court against order passed by Additional Registrar.
8.4) It was submitted that respondent no.2-society in Special Civil Application No. 16443/2020 was registered on 24.03.1975. It was submitted that since 1975, respondent no.2-society is carrying on the activities of collecting milk from its members and supplying the same to respondent no.4-Union. It was pointed out that respondent no.2 society has its own office building, godown, Page 40 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 milk testing facilities, and cooler to preserve milk and bulk cooler costing more than Rs. 11 Lakh. It was submitted that functioning of respondent no.2 society has been adversely affected due to the registration granted to the petitioners- societies because earlier five persons were employed and thereafter services of two persons are put to an end because of less work as the quantity of milk received is less because of the petitioners-societies. 8.5) It was submitted that village Vaghashar where the petitioner-society and the respondent no.2 society are situated has population of only 1100 people and 126 persons are the members of respondent no. 2 Vaghashar Dudh Utpadak Sahakari Mandli Limited.
8.6) It was submitted that prior to Page 41 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 registration, the petitioners started supplying milk under different names and the persons behind petitioner-society were working under the banner of "Dudharampura Milk Producers Co-operative Society" and established collecting centers in village Vaghasar in the name of another co-operative society. It was pointed out that with the registration of petitioner-society, the working of the respondent no.2 society was seriously affected and the procurement of milk was reduced in the year 2018-2019 than that of year 2017-2018 from 558337 liters to 383846 liters. It was therefore, submitted that since the petitioner-society has started collection of milk by opening collection centre, work of respondent no.2 society is affected.
8.7) Learned Senior Advocate Mr. Jani also referred to the details of supply of Page 42 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 milk in terms of money as per the report of the Government Auditor to show that supply of milk to respondent no.4 Union was reduced in the year 2018-2019 than that of year 2017- 2018 from Rs.2,06,54,518/- to Rs. 1,09,01,605/-.
8.8) It was submitted that respondent no.2 society is ready and willing to admit all the members of the petitioner-society in order to see that the members of the petitioner-societ do not suffer or they are not put to any hardship in any manner. 8.9) It was submitted that the District Registrar has ignored the facts and evidence available on record to grant registration to the petitioner-society contrary to the proviso to section 4 of the Act, 1961 and contrary to the Government Resolutions which stipulate that in the same village Page 43 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 registration of another cooperative society with the same object is to be rejected. 8.10) Reliance was placed on Government Resolutions dated 08.09.1989, 21.07.2003, 07.11.2006, 13.08.2007 and 05.05.2015. It was submitted that the District Registrar has granted the registration to the petitioners- societies in total disregard to such resolutions.
8.11) It was submitted that the petitioner-society has seriously affected the total receipt of milk to the extent of one Lakh liter per year and as a result thereof the profits of the respondent no. 2 society is also affected and respondent no.2 society could not give increase in rate to it members compared to the previous years inasmuch as 3% increase in rate of milk was given in last year as against 7% in the preceding two years Page 44 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 because the petitioner-society was collecting milk from the persons who were earlier members of respondent no.2 society. It was submitted that earlier there were 180 members of the respondent no.2 society which is now reduced to 126 members only.
8.12) It was submitted that if the registration of the petitioners-societies is restored, the same would have adverse effect on the respondent no. 2 society which is in existence since last more than 45 years. 8.13) It was submitted that in small village like Vaghashar,it is not feasible to have two cooperative societies with same objects. It was submitted that the petitioner society came to be registered only because earlier, the husband of the chairperson of petitioner society through the representation of the respondent no. 2 society had become Page 45 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 member of the Managing Committee but later on, he was disqualified. It was submitted that the chairperson of the petitioner society is primary teacher serving at another place residing at Patan and is not having any residence in the village Vaghashar. It was submitted that even those persons who are from other villages are made the members of the petitioner-society to increase the membership numbers.
8.14) It was therefore, submitted that the petitioner-society has been formed for some oblique and extraneous considerations which is rightly considered by the appellate authority to the effect that granting registration to the petitioners-societies is contrary to the Government instructions that in the same village, another co-operative society with same objects cannot be registered. It was therefore, submitted that Page 46 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 the impugned orders may not be interfered while exercising extraordinary jurisdiction under Article 227 of the Constitution of India.
8.15) In support of his submissions, learned Senior Advocate Mr. Jani relied upon the following decisions :
I : On section 153 of the Act, 1961 :
1) Jitendra Natverlal Thaker v. Hirabag Cooperative Housing Society Limited reported in 1978 GLR 92.
2) Unchamala Mahila Dudh Utpadak Sahakari Mandali Limited v. District Registrar, Cooperative Society reported in 1999(3) GCD 1749.
3) Ucharapi Seva Sahakari Mandli Limited v.Page 47 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 State of Gujarat reported in 2003(1) GCD 185.
4) Banaskantha District Co Op Union Ltd v. State of Gujarat reported in 2011(2) GLR 1707.
II: On appeal by person who is not a party to the proceedings :
1) Sm. K. Pnnalagu Ammal v. State of Madras reported in AIR 1953 MAD 485.
2) Jatan Kanwar Golcha v. Golcha Properties Private Limited reported in 1970 (3) SCC 573.
3) Baldev Singh Vv. Surinder Mohan Sharma reported in 2003(1) SCC 34.
4) Hardevinder Singh v. Paramjit Singh reported in 2013 (9) SCC 261.Page 48 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
5) V.N. Krishna Murthy & Anr. v. Ravikumar & Ors reported in 2020(9) SCC 501. III: On interim orders are not precedent :
1) State of Assam v. Brak Upatyaka D.U. Karmachari Sanstha reported in 2009(5) SCC
694.
2) Roger Shashoua v. Mukesh Sharma reported in 2017(14) SCC 722.
IV: For alternative remedy of revision under section 155 of the Act, 1961 :
1) State of Uttar Pradesh and another v.
Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti and others reported in (2008) 12 Supreme Court Cases 675, wherein the Apex Court held that writ petition under Article 226 is not maintainable as under : Page 49 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 "37. We have given most anxious and thoughtful consideration to the rival contentions of the parties. So far as preliminary objection raised by the Corporation before the High Court is concerned, in our considered view, the same was well-
founded and ought to have been upheld. It was urged before the High Court on behalf of the Corporation and the State Government that the writ petition was premature inasmuch as no retrenchment had been effected. Several disputed questions of fact were involved in the petition. If the contention of the Samiti was that there was illegal closure of Undertaking or there was non-payment of wages by the employer, appropriate proceedings could have been initiated under Industrial Law. In fact, one of the Judges of the Division Bench upheld the contention and observed that the employees could have claimed closure compensation under Section 25 FFF of the Act or could have approached prescribed authority under the Payment of wages Act relying upon Section 33C(2) of the Act or Section 6H(2) of the U.P. Industrial Disputes Act. The other Single Judge of the Division Bench, however, held that the writ petition had been entertained and interim orders were also passed. Relying upon Suresh Chandra Tewari, the learned Judge held that "the petition cannot be dismissed on the ground of alternative remedy if the same has been entertained and interim order Page 50 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 has been passed". (emphasis supplied).
38. With respect to the learned Judge, it is neither the legal position nor such a proposition has been laid down in Suresh Chandra Tewari that once a petition is admitted, it cannot be dismissed on the ground of alternative remedy. It is no doubt correct that in the 'head note' of All India Reporter (AIR), it is stated that "petition cannot be rejected on the ground of availability of alternative remedy of filing appeal". But it has not been so held in the actual decision of the Court. The relevant paragraph 2 of the decision reads thus:
"2. At the time of hearing of this petition a threshold question, as to its maintainability was raised on the ground that the impugned order was an appealable one and, therefore, before approaching this Court the petitioner should have approached the appellate authority. Though there is much substance in the above contention, we do not feel inclined to reject this petition on the ground of alternative remedy having regard to the fact that the petition has been entertained and an interim order passed".(emphasis supplied) Even otherwise, the learned Judge was not right in law. True it is Page 51 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 that issuance of rule nisi or passing of interim orders is a relevant consideration for not dismissing a petition if it appears to the High Court that the matter could be decided by a writ-Court. It has been so held even by this Court in several cases that even if alternative remedy is available, it cannot be held that a writ- petition is not maintainable. In our judgment, however, it cannot be laid down as a proposition of law that once a petition is admitted, it could never be dismissed on the ground of alternative remedy. If such bald contention is upheld, even this Court cannot order dismissal of a writ petition which ought not to have been entertained by the High Court under Article 226 of the Constitution in view of availability of alternative and equally efficacious remedy to the aggrieved party, once the High Court has entertained a writ-petition albeit wrongly and granted the relief to the petitioner."
2) Full Bench decision of this Court in case of Jayendrasinh Bhupatsinh Diama v. State of Gujarat through Additional Secretary (Inquiry) reported in 2012 (2) GLR 1096, wherein the Full Bench held that where appellate powers are exercised, revision Page 52 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 powers can also be exercised.
3) Chimanbhai Dadubhai Desai v. Chaturbhai P. Patel, District Registrar Cooperative Societies reported in 1971 GLR 31, wherein it is held as under :
"5. We are, therefore, of the view that the Joint Registrar, Administration and Appeals was in error in taking the view that no revision application lay against an order made by the District Registrar directing an inquiry under Section 86 sub-section (1) and he wrongly refused to exercise jurisdiction which was vested in him by Section
155. We therefore, issue a writ of certiorari quashing and setting aside the order dated 15th October 1969 passed by the Joint Registrar, Administration and Appeals, rejecting the revision application of the petitioner and direct him to entertain the revision application under Section 155 and to decide it after complying with the principles of natural justice. In this view of the matter it is not necessary for us to issue a rule as regards the other reliefs claimed in the petition in regard to the order of the District Registrar under Section 86 sub-section (1). The third respondent will pay the costs of the petition to the petitioners."Page 53 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 V: Under section 4 of the Act, 1961 :
1) B.B. Shroff v. Sardar Bhilandwala Pardi Peoples Co-Operative Bank Limited reported in 1981 GLR 805, wherein it is held as under :
"4. On a bare perusal of the statutory provisions, it would appear that the power of the Registrar to register an amendment is to be exercised upon his being satisfied that the proposed amendment is not 40 "contrary to this Act or the rules". If the proposed amendment is contrary to the pro visions of the Act or Rules- and this requirement necessitates taking into consideration all the provisions of the Act or Rules, the Registrar will have no power to register the amendment.
5. Section 4 is a pivotal provision in the Act. It provides that a society, which has as its object the promotion of the economic interests or general welfare of its members, or of the public, in accordance 45 with co-operative principles, or a society established with the object of facilitating the operations of any such society, may be registered under the Act. The proviso to the Page 54 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 said section, which is material, reads as under :
"Provided that it shall not be registered if, in the opinion of the Registrar, it is economically unsound, or its registration may have any adverse effect upon any other society, or it is opposed to, or its working is likely to be in contravention of public policy."
It would appear, therefore, that only such society can be registered under the Act which is to function on co-operative principles and the registration of which, in the opinion of the Registrar, will not have an adverse effect upon any other society. This provision, which has been enacted to apply at the stage of registration of a society, is relevant even at the stage of considering the question whether to register an amendment of the by-laws of a society, by reason of the provisions of sec. 13 (2). If it is found, therefore, upon examination of all the relevant facts and circumstances of a given case, that the registration of an amendment of the by-laws of a society whereunder, for example, the area of operation of the society is to be extended, is likely to undermine the co-operative principles or to have an adverse effect upon any other society, such amendment could not possibly be said to be in accordance with the Act or, to put it negatively, not contrary Page 55 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 to the Act and, therefore, the Registrar cannot possibly grant registration to such an amendment.
6. In the instant case, the petitioner society is a banking co- operative society and so is the first respondent society. The grievance of the petitioner-society is that by registering the amendment of the by-laws, which extends the area of operation of the first respondent society to the area in which the petitioner-society is already operating, there will be unhealthy competition. This is a relevant aspect to be considered, if true. The attention of the authority registering the amendment was required to be focused upon this aspect of the matter and the decision with regard to registration of the amendment of the by-laws could only have been arrived at after it was found, upon investigation of all the relevant facts and circumstances, that the registration of the amendment of the by-laws extending the area of operation is not likely to have an adverse effect upon the petitioner society and to undermine the co operative principles in general. The order of the original authority being not before me, it is not as possible to ascertain whether this perspective was kept in mind. The order of the appellate authority does not disclose that this perspective was present to its mind. Under the circumstances, the Page 56 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 conclusion is inevitable that the power with regard to registration of the amendment of the by-laws is exercised without applying mind to the most relevant aspect and to the fundamental questions which were required to be taken into account.
7. Under the circumstances, both the order dated 23.04.1979 and the order dated 29.05.1980 are quashed and set aside. The second respondent will consider afresh the question of registration of the seriously contesting the proposed amendment of the by-laws of the first respondent- Society, it would be in the interest of justice to direct the second respondent to afford to the said Society an opportunity of being heard before arriving at a final decision."
2) Madarsing B. Rajput v. State of Gujarat and others (judgment dated 23.06.2014 rendered in Special Civil Application No.15334/2004 and allied matters), wherein it is held as under:
"6.The question of registration of rival societies in the same field of operation in the same area has occupied attention of this Court on Page 57 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 several occasions. The State Government also in consonance with section 4 of the Gujarat Cooperative 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 Page 58 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 milk cooperative society have been operating. The policy of the Government has been to permit establishment 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 Page 59 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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.
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 Page 60 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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. 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 Page 61 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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 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 Page 62 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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."
9. Learned advocate Mr.V.C.Vaghela and learned Assistant Government Pleader Mr.Dhawan Jayswal adopted the arguments and submissions made by learned Senior Advocate Mr. Prakash Jani defending the order passed by the appellate authority cancelling the registration of the petitioners-societies.
10. In rejoinder, learned advocate Mr.Dipen Page 63 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Desai submitted that insofar as reliance placed on behalf of the respondent on the decision in case of Vachhol Dudh Utpadak Sahakari Mandali Limited (supra) is concerned, the said judgment nowhere provides right to the existing societies to file an appeal. It was pointed out that paragraph no. 18 of the said judgment only records that by necessity as well as convention, locus standi of such existing societies to question grant of registration to a new society has been recognised. It was therefore, submitted that only observation made was that the appeals of the existing society as a matter of fact are being entertained however, that would not by itself confer upon the existing societies any right of appeal under section 153 of the Act, 1961. It was submitted that in the said judgment the issue was not decided as to whether the existing society has any right of appeal against registration granted to a new Page 64 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 society. It was submitted that on the strength that the appeals are being entertained by necessity and convention, it was observed by this Court that the existing society will have the right to submit objections before the Registering authority. 10.1) Learned advocate Mr. Desai referred to and relied upon the observations of paragraph no.19 of the said decision wherein it is made clear that only by virtue of raising objections, the objector would not ipso facto enjoy a right to be heard or prefer an appeal against the order which may be passed and such rights will be governed on the basis of facts arising in individual cases. It was therefore submitted that only because the existing society is granted opportunity to file objections against the application for registration of new society, it is specifically observed by this Court Page 65 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 that only by virtue of raising objections, the objector would not ipso facto enjoy a right to be heard or right to file appeal against the order of granting registration. 10.2) It was further submitted that the issue in respect of submission of the petitioners has been considered in detail in case of Rameshbhai Maganbhai Lakhani (supra), wherein it is held by this Court that the existing society does not have any right to file an appeal against the order of registration because granting of registration is neither judicial or quasi judicial function but the same falls within the realm of administrative exercise to be undertaken by the Registrar.
10.3) It was therefore, submitted that the decision in case of Vachhol Dudh Utpadak Sahakari Mandali Limited (supra) does not lay Page 66 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 down any ratio or proposition that existing society has right to prefer an appeal against the registration granted to the new society whereas in case of Rameshbhai Maganbhai Lakhani (supra), it is held by this Court that the process of registration of a new society cannot be termed to be judicial or quasi judicial so as to envisage an adversarial approach from the existing society so as to give right to the existing society to file an appeal under section 153 of the Act, 1961.
10.4) Learned advocate Mr. Desai submitted that so far as Special Civil Application Nos. 9907/2021 to 9910/2021 are concerned, admittedly the area of the petitioners- societies and area of the existing societies who have filed appeals are different and therefore, there is no question of adversely effecting to the existing societies. Page 67 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 10.5) The Undisputed facts in Special Civil Application Nos.9907/2021 to 9910/2021 are as under :
Sr. SCA No. Name of Registration Remarks No the challenged petitioner society 1 9907/2021 The Pankajbhai Area of operation Ashapura Arjanbhai of petitioner and Mahila Patel, respondent No.3 is Arthaksham Chairman different. The Seva Jamiyatpura respondent No.3 is Sahakari Seva Sahakari situated at a Mandali Mandali distance of 22 kms. Limited Limited See paragraph No. 2.13 of the memo of petition.
Further the
petitioner society
is the women's
society whereas the
respondent No.3 is
not the women's
society.
2 9908/2021 The Jayeshbhai Area of operation
Sarvodaya Mulshankar of both the
(Laghumati) Upadhya, societies is
Seva Committee Balasinor, which is
Sahakari Member of the a municipality area
Mandali Balasinor having population
Limited Seva Sahakari of more than 45000
Mandali persons. No member
Limited common. See
paragraph No. 2.14
of the memo of
petition.
Further the appeal
is filed by the
individual member
of the society and
Page 68 of 106
Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
not by the existing
society.
3 9909/2021 The Natwarsinh Area of operation
Gorpuralat Adarsinh of both the
Mahila Rathod, societies is
Arthaksham Chairman of different. The
Seva Parabiya respondent No.3 is
Sahakari (Vasadara) situated at a
Mandali Seva Sahakari distance of 11 kms.
Limited Mandali From the
Limited petitioner. See
paragraph No. 2.13
of the memo of the
petition.
4 9910/2021 The Vasarda Natwarsinh Area of operation
Mahila Adarsinh of both the
Arthaksham Rathod, societies is
Seva Chairman of different. The
Sahakari Parabiya village of the
Mandali (Vasadara) respondent No.3 is
Limited Seva Sahakari situated at a
Mandali distance of 11 kms.
Limited See paragraph No.
2.13 of the memo of
the petition.
10.6) It was therefore, submitted that in
all these petitions, the appellate authority has exercised jurisdiction though no appeal was maintainable and even on merits, there is no violation of proviso to section 4 of the Act, 1961 so as to deny registration to the petitioners-societies.
11. Having heard the learned advocates for the respective parties and having considered Page 69 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 the materials placed on record, the following questions arise for consideration in the facts of the case :
1) Whether in the facts of the case, the orders granting registration by the District Registrar to the petitioners-societies can be challenged under section 153 of the Act, 1961?
2) Whether these petitions are maintainable?
3) If answer to the above question is in affirmative, whether these petitions are maintainable in view of alternative efficacious remedy available to prefer revision application under section 155 of the Act, 1961 so as to challenge the order passed under section 153 of the Act, 1961?Page 70 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
4) Whether in facts of the case, registration of the petitioner society would have any adverse effect on the existing society so as to refuse the registration under the proviso to section 4 of the Act, 1961?
12. It would therefore, be germane to refer to relevant provisions of the Act, 1961 as under :
"4. Societies which may be registered A society, which has as its object the promotion of the economic interests or general welfare of its members, or of the public, in accordance with cooperative principles, or a society established with the object of facilitating the operations of any such society, may be registered under this Act:
Provided that it shall not be registered if, in the opinion of the Registrar, it is economically unsound, or its registration may have an adverse effect upon any other society, or it is opposed to, or its working is likely to be in contravention of public policy.
8. Application for registration.
Page 71 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 (1) For the purposes of
registration, an application shall be made to the Registrar in the prescribed form, and shall be accompanied by four copies of the proposed bye-laws of the society. The person by whom, or on whose behalf, such application is made, shall furnish such information in regard to the society, as the Registrar may require.
(2) The application shall be signed-
(a) in the case of a society other than a federal society, by at least ten persons (each of such persons being a member of a different family) who are qualified under this Act, and
(b) in the case of a federal society, by at least (ten societies).
(3) No signature to an application on behalf of a society shall be valid unless the person signing is a member of the committee of such society, and is authorized by the committee by resolution to sign on its behalf the application for registration of the society and its bye-laws; and a copy of such resolution is appended to the application.
9. Registration and provisional registration, certificate of registration -Page 72 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022
C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 (1) On receipt of an application for registration from a society--
(a) if the Registrar is satisfied that the society has complied with the provisions of this Act and the rule as to registration and that its bye-laws are not contrary to this Act and the rules, he shall register the society and its bye-laws; and
(b) if the Registrar is of opinion that the application complies with the requirements of section 8 but that its bye-laws are not in conformity with the provisions of this Act and the rules, he may provisionally register the society and by an order in writing permit the society to perform such functions subject to such conditions as he may specify in the order and may also by an order in writing direct the society to amend within the period prescribed in this behalf its bye-laws so as to bring them in conformity with this Act and the rules.
(2) When a society has been provisionally registered, the Registrar shall, on its compliance with the order made under clause (b) of sub-section (1) finally register it and its bye-laws, and on its failure to comply with the order shall cancel its provisional registration.
(3) A provisionally registered society shall not be deemed to be a society registered under this Act. Page 73 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 (4) On the registration of a society, the Registrar shall issue to it a certificate of registration signed by him.
(5) A certificate of registration issued under sub-section (4) shall be conclusive evidence that the society therein mentioned is duly registered, unless it is proved that the registration has been cancelled. (6) If the Registrar refuses to register the society, he shall forthwith communicate his decision with reasons therefor, to the person who has signed first on the application.
153. Appeals (1) An appeal against an order or decision under sections 4, 9, 11, 13, 17, 19, 36, 81 and 160 shall lie-
(a) if made or sanctioned or approved by the Registrar, or an Additional or Joint Registrar on whom powers of the Registrar are conferred, to the State Government.
(b) if made or sanctioned by any person other than the Registrar, or an Additional or Joint Registrar on whom the powers of the Registrar are conferred, to the Registrar.
(2) An appeal against an order of a liquidator under section 110 shall Page 74 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 lie--
(a) to the State Government if the order was made with the sanction or approval of the Registrar, and
(b) to the Registrar in any other case.
(3) An appeal against an order or decision under sections 82,90,93 and any order passed by the Registrar for paying compensation to a Society, and any other order for which an appeal to the Tribunal has been provided under this act, shall lie to the Tribunal.
(4) An appeal under sub-section (1),
(2) or (3) shall be filed within two
months of the date of the
communication of the order or
decision.
(5) The procedure to be followed in presenting and disposing of appeals under this section or under any other provisions of this Act shall be such as may be prescribed.
(6) As provided in this Act, no appeal shall lie against any order, decision or award passed in a accordance with this Act; and every such order, decision or award shall be final, and where any appeal has been provided for, any order passed on appeal shall be final and no further appeal shall lie against it. Page 75 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
155. Power of the State Government and Registrar to call for proceedings of subordinate officers and to pass orders thereon The State Government and the Registrar may call for and examine the record of any inquiry or the proceedings of any other matter of any officer subordinate to them, except those referred to in sub- section (9) of section 150, for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed, and as to the regularity of the proceedings of such officer. If in any case, it appears to the State Government, or the Registrar, that any decision or order or proceedings so called for should be modified, annulled or reversed, the State Government or the Registrar, as the case may be, may after giving persons affected thereby an opportunity of being heard pass such order thereon as it or he may deem just."
13. On perusal of the above provisions, it is clear that registration of a cooperative society is an administrative function as held by this Court in case of Rameshbhai Maganbhai Lakhani (supra) as under :
"21.In order to appreciate the scheme of Page 76 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 registration of co-operative society it would be expedient to set out the relevant provisions and or its relevant extracts. The provision of Section 4 of the Gujarat Co-operative Societies Act 1961 be set out as under:-
" Section 4. Societies which may be registered.- A society, which has as its object the promotion of the economic interests or general welfare of its members or of the public, in accordance with co- operative principles, or a society established with the object of facilitating the operations of any such society, may be registered under this Act:
Provided that it shall not be registered if, in the opinion of the Registrar, it is economically unsound, or its registration may have an adverse effect upon any other society, or it is opposed to , or its working is likely to be in contravention of public policy."
The provisions of Section provides for registration with limited or unlimited liability, Section 6 lays down the conditions for registration, Section 7 empowers the State to exempt certain societies from the requirement of registration. Section 8 talks about Application for Registration and Section 9 provides for actual and elaborate procedure for registration. The provisions of Section 9 therefore needs to be set out as under:
"Section 9;-
Page 77 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Registration provisional registration , certificate of registration -
(1) On receipt of an application for registration from a society
(a) if the Registrar is satisfied that the society has complied with the provisions of this Act and the rules as to registration and that its bye -laws are not contrary to this Act and the rules he shall register the society and its bye-
laws; and
(b) if the Registrar is of the opinion that the application complies with the requirements of Section 8 but that its bye-laws are not in conformity with the provisions of this Act and the rules, he may provisionally register the society and by an order in writing permit the society to perform such functions subject to such conditions as he may specify in the order and may also by an order in writing direct the society to amend within the period prescribed in this behalf its bye-laws so as to bring them in conformity with the provisions of the Act and the rules. (2) When a society has been provisionally registered, the Registrar shall on its compliance with the order made under clause (b) of subsection (1) finally register it and its bye-laws and on its failure to comply with the order Page 78 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 shall cancel its provisional registration.
(3) A provisionally registered society shall not be deemed to be a society registered under this Act. (4) On the registration of a society the Registrar shall issue to it a certificate of registration signed by him.
(5) A certificate of registration issued under subsection (4) shall be conclusive evidence that the society therein mentioned is duly registered, unless it is proved that registration has been cancelled. (6) If the Registrar refuses to register the society he shall forthwith communicate his decision with reasons thereof to the person who has signed first on the application."
The plain reading of these provisions do not indicate any where that there is any restriction on numbers of registered societies in an area. In fact such restriction cannot be even envisaged in view of the provisions of Article 19(1) (C) of the Constitution of India. The cooperative movement as such is required to be encouraged and widely spread as to encompass as many persons as possible for their common economic development and in turn for healthy development of entire society on democratic principles. The provisions of section 4 casts duty upon the Registrar to register the cooperative society which has as its Page 79 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 object the promotion of the economic interest or general welfare of its members or of the public in accordance with co-operative principles or even a society established with the object of facilitating the operation of any such society and the proviso thereto makes an exception to this general duty to register namely that if the Registrar is of the opinion that;
(1) it is economically unsound or (2) its registration may have an adverse effect upon any other society or (3) it is opposed to or its working is likely to be in contravention of public policy.
Thus an exception to the rule of registration is carved out and Registrar is enjoined not to register a cooperative society if he forms an opinion that registration is hit by any of the above mentioned three factors. The forming of an opinion under the proviso to section 4 of the Gujarat Co- operative Societies Act 1961 is a statutory function to be undertaken by the statutory authority and the plain reading of this provision do not indicate involvement of any other third party or any adversary or rival society. In other words legislative intent as is apparent from the plain and simple language of the Section 4 of the Gujarat Cooperative Societies Act 1961does not envisage or encourage any participation of third party, be it society, or any other organization, nor does it therefore create any enforceable right Page 80 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 into any of the entity, agency or other society against the society whose proposal is under consideration by the Registrar. Therefore it needs to be borne in mind that plain and simple reading of Section 4 does not vests any other existing society with any right to even lodge it's objection to registration of new society. Had it been the legislative intent than nothing prevented the legislature from expressly provide for it.
22.In order to appreciate this aspect in more detail it would be expedient to refer to the provisions of section 6 , 8, and 9 of the Gujarat Co-operative Societies Act 1961. In none of the provisions, the proposed society, its proposer, or the Registering Authority is required to invite objections from any agency, organization or even existing society while making an application for registration or while considering it for registration. The relevant rule no. 3 and other rules framed under the provisions of the Gujarat Co-operative Societies Act 1961, also do not provide for such invitation of objections and their consideration.
23.The legislative intent apparent from the provisions of Section 4, 9 of the Gujarat Co-operative Societies Act 1961was in fact in consonance with the provisions of Article 19(1)(c) of the Constitution of India. The 5 Judge bench of the apex court has in case of Smt. Damyanti Narang Vs. Union of India reported in AIR 1971 SUPREME COURT 966 has held that the right to form an association, necessarily implies that Page 81 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 the persons forming the association have also the right to continue to be associated with only those whom they voluntarily admit in the association. Any law, by which members are introduced in the voluntary Association without any option being given to the members to keep them out, or any law which takes away the membership of those who have voluntarily joined it, will be a law violating the right to form an association. The Hindi Sahitya Sammelan Act did not merely regulate the administration of the affairs of the original society; but it in fact altered the composition of the society itself. The result of this change in composition was that the members, who voluntarily formed the Association, were compelled to act in that Association with other members who had been imposed as members by the Act and in whose admission to membership they had no say. Such alteration in the composition of the Association itself clearly held to be interfering with the right to continue to function as members of the Association which was voluntarily formed by the original founders. The Act, therefore, held to be violating the right of the original members of the Society to form an association guaranteed under Art, l9 (1) (c). Article 19 (4), on the face of it, could not be called in aid to claim validity for the Act. The alteration of the constitution of the Society the manner laid down by the Act was not in the interests of the sovereignty and integrity of India or in the interests of public order or morality. Thus Page 82 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 citizens have fundamental right in Article 19(1)(c) to form association with the persons of their liking and choice. The provisions of Section 4 especially proviso to it therefore if viewed from this angle, needs to be construed in proper perspective so as to read it in consonance with provisions of article 19(1)(c) of the Constitution.
24.The apex court has in case of Zoroastrian Cooperative Housing Society Ltd. and another, Appellants v. District Registrar, Co-operative Societies (Urban) reported in AIR 2005 SUPREME COURT 2306 observed as under :
"11.The cooperative movement, by its very nature, is a form of voluntary association where individuals unite for mutual benefit in the production and distribution of wealth upon principles of equity, reason and common good. No doubt, when it gets registered under the Cooperative Societies Act, it is governed by the provisions of the Cooperative Societies Act and the Rules framed thereunder. In Damyanti Naranga v. Union of India and others (AIR 1971 SC 966), this Court, discussing the scope of the right to form an association guaranteed by Article 19(1)(c) of the Constitution of India, stated that the right to form an association necessarily implies that the persons forming the association have also the right to continue to be associated with only those whom they voluntarily admit in the association. Any law, by which members are introduced in the Page 83 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 voluntary Association without any option being given to the members to keep them out, or any law which takes away the membership of those who have voluntarily joined it, will be a law violating the right to form an association. Based on this decision, it is contended on behalf of the Society that its members have the right to be associated only with those whom they consider eligible to be admitted and the right to deny admission to those with whom they do not want to associate, cannot be interfered with by the Registrar by imposing on them a member who according to them was not eligible to be admitted. The argument on this basis is sought to be met on behalf of the respondents by reference to another decision of this Court in Daman Singh and others, etc. v. State of Punjab and others, etc. (AIR 1985 SC 973). Therein, their Lordships, after referring to Damyanti (supra), held that decision had no application to the situation before them. The position was explained in the following words:-
"That case has no application whatever to the situation before us. It was a case where an unregistered society was by statute converted into a registered society which bore no resemblance whatever to the original society. New members could be admitted in large numbers so as to reduce the original members to an insignificant minority. The composition of the society itself Page 84 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 was transformed by the Act and the voluntary nature of the association of the members who formed the original society was totally destroyed. The Act was, therefore, struck down by the Court as contravening the fundamental right guaranteed by Art. 19(1)(f). In the cases before us we are concerned with co-operative societies which from the inception are governed by statute. They are created by statute, they are controlled by statute and so, there can be no objection to statutory interference with their composition on the ground of contravention of the individual right of freedom of association."
It is emphasized that the principle recognized in the Damyanti's case (supra) was not applicable to a co- operative society since it is a creature of a statute, the Cooperative Societies Act and that the rights of its members could be abridged by a provision in the Act.
Regarding the rights of an individual member, their Lordships have stated:
"Once a person becomes a member of a cooperative society, he loses his individuality qua the Society and he has no independent rights except those given to him by the statute and the bye-laws."
12.Daman Singh's case (supra), in our view, is not an answer to the claim of the Society that it had the right to decide with whom it wants Page 85 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 to associate or to deny membership to a person who was not qualified to be one in terms of the bye-laws of the Society. The effect of the observations in Daman Singh's case (supra), is only that cooperative societies, from their very inception are governed by the statute, the Cooperative Societies Act, that they are created by statute, they are controlled by the statute and so, there can be no objection to statutory interference with their composition or functioning and no merit in a challenge to statutory interference based on contravention of the individual right of freedom of association. As we understand the statement of the law by this Court in Daman Singh's case, it only means that the action of the Society in refusing membership to a person has to be tested in the anvil of the provisions of the Act, the Rules and its bye-laws. Be it noted that the bye-laws had already been approved on the basis that it is consistent with the Act and the Rules. Even then, it may be possible in a given case to point out that a particular bye-law was against the terms of the Act or the Rules. Daman Singh does not indicate that the Act, the Rules and the bye-laws for that matter, have to be given the go-by, merely because the particular bye-law or action of the Society may not accord with our concept of fairness or propriety in terms of the rights available to an ordinary citizen. Therefore, in the light of the Page 86 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 observations in Daman Singh what one has to search for, is a provision in the Act or the Rules which prevails over bye-law No. 7 of the Society, confining membership in it, to only a person who is a Parsi. Section 24 of the Act, no doubt, speaks of open membership, but Section 24(1) makes it clear that, that open membership is the membership of a person duly qualified therefor under the provisions of the Act, the Rules and the bye-laws of the Society. In other words, Section 24(1) does not contemplate an open membership dehors the bye-laws of the Society. Nor do we find anything in the Act which precludes a society from prescribing a qualification for membership based on a belief, a persuasion or a religion for that matter. Section 30(2) of the Act even places restrictions on the right of a member to transfer his right. In fact, the individual right of the member, respondent No.2, has got submerged in the collective right of the Society. In State of U.P. and another v. C.O.D. Chheoki Employees' Cooperative Society Ltd. and others, (1997) 3 SCC 681, this Court after referring to Daman Singh's case (supra) held in paragraph 16 that:
"Thus, it is settled law that no citizen has a fundamental right under Article 19(1)(c) to become a member of a Cooperative Society. His right is governed by the provisions of the statute. So, the right to Page 87 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 become or to continue being a member of the society is a statutory right. On fulfillment of the qualifications prescribed to become a member and for being a member of the society and on admission, he becomes a member. His being a member of the society is subject to the operation of the Act, rules and bye-laws applicable from time to time. A member of the society has no independent right qua the society and it is the society that is entitled to represent as the corporate aggregate. No individual member is entitled to assail the constitutionality of the provisions of the Act, rules and the bye-laws as he has his right under the Act, rules, and the bye-laws and is subject to its operation. The stream cannot rise higher than the source."
13. Section 4, on which reliance is placed, with particular reference to its proviso, only speaks of denial of registration if, in the opinion of the Registrar, the Society to be formed was economically unsound, or its registration may have an adverse effect upon any other Society, or it is opposed to, or its working is likely to be in contravention of public policy. Prima facie, it may have to be said that public policy, in the context of Section 4 of the Act, is the policy that is adopted by the concerned Act and the Rules framed thereunder. The concept of public policy in the context of the Cooperative Societies Act has to be Page 88 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 looked for under the four corners of that Act and in the absence of any prohibition contained therein against the forming of a society for persons of Parsi origin, it could not be held that the confining of membership as was done by bye-law No. 7, was opposed to public policy. When a statute is enacted, creating entities introduced thereunder on fulfillment of the conditions laid down therein, the public policy in relation to that statute has to be searched for within the four corners of that statute and when so searched for, one does not find anything in the Act which prevents the Society from refusing membership to a person who does not qualify in terms of bye-law No. 7 of the Society."
Thus as could be seen from the two decisions of the apex court it becomes clear that Citizens have rights to form association and therefore by necessary corollary it goes without saying that citizens have right to form association with those persons whom he like and he has freedom to disassociate himself from whom he dislikes. This right is constitutional right and no one can infringe it in any manner. As against this citizen's right to become member of a cooperative society is not his fundamental right but merely a statutory right and hence governed by the Cooperative Societies Act, Rules and bye-laws of that cooperative society. As such its regulation by the State act or intervention is not ruled out or found to be repugnant to any provisions of the Page 89 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Constitution. Thus when a group of like minded citizens get together and form co-operative society than that society has right to be registered except it is found to be suffering from one of the three handicaps envisaged in proviso to Section 4 of the Gujarat Co-operative Societies Act 1961.
25.Thus bearing in mind the prevalent position of law, one can safely deduce that leave alone individual members of the existing society, even the existing society did not have any statutory right to lodge formal or substantial objections against consideration of the proposal for new societies based upon the safeguard provided under proviso to Section 4 of the Gujarat Co-operative Societies Act 1961.
26.The aforesaid logical deduction from the plain reading of the language of the statutory provisions of Section 4 to 9 of the Gujarat Co-operative Societies Act 1961 read with the decisions of the apex court gets further strengthened from plain reading of the provisions of appeal as laid down in Section 153 of the Gujarat Co-operative Societies Act 1961. The section 153 of the Gujarat Cooperative Societies Act 1961 provides appeal against orders made under various provisions of Cooperative Societies Act including order under Section 4 and 9. The sub-section (4) of Section 153 period for two month limitation from the date of the communication of the order sought to be impugned in the appeal. Now no provisions either in Section 4 to 9 or in Rules governing the registration it is provided that order of Page 90 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 registration is also to be communicated to the existing societies or to any objector as if it was an order made in any adjudicatory or quasi judicial proceedings. In short the entire exercise of considering registration of proposed societies under Section 4 to 9 is only an administrative exercise to be undertaken by the Registrar and he has to function in accordance with the statutory provision. The process of registration of new society cannot be in any termed to be judicial or quasi judicial so as to envisage an adversarial approach from existing society."
14. This Court in case of Vachhol Dudh Utpadak Sahakari Mandali Limited (supra) has held as under :
"17.However, despite these guidelines emerging from statutory provisions as well as State resolutions, one fact cannot be ignored that there are allegations of differential treatment and discriminatory approach. The concern voiced by learned advocates for the petitioners that sometimes such registration are misused for the purpose of inflating voters list also may not be completely baseless. Cooperative movement in India is largely State aided and regulated by the Statute. In case of Zoroastrian Co-operative Housing Society Ltd. and another v. District Registrar, Cooperative Societies (Urban) and others Page 91 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 reported in AIR 2005 Supreme Court 2306, though Hon'ble Supreme Court gave a fillip to the concept of right to form association and to be governed by a set of rules that the members of the Association may choose, nevertheless, recognised that such rules(by-laws) of the society must confirm to statutory provisions. Over a period, cooperative movement has gained momentum and cooperative sector operates in vast areas. Some of the cooperative societies have significant operations and sizable membership strength. State funds are also involved in number of societies. Involvement of the State on account of its financial stake as well as larger public interest is therefore, inevitable. The provisions are therefore, found in the said Act permitting the State intervention. Legislative and State intervention however, cannot be confused with political interference and it would always be desirable that cooperative movement to the extent possible enjoys insulation from political consideration.
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 Page 92 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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 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 18-7- 2003. It is provided inter-alia that it should be ensured that in the same Page 93 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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 18-7-2003) 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 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 Page 94 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 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."
15. In view of above two decisions of this Court, it is clear that the Registrar is required to call for objections from the existing society so that it can be ascertained as to whether there would be any adverse effect on the working of the existing society if the registration is granted to new society. Accordingly, the respondent State has also issued the resolutions directing the Page 95 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Registrar to invite objections from the existing societies while granting registration to the new society under section 9 of the Act, 1961. Therefore once the existing society is granted an opportunity to submit objections, the same is required to be considered and disposed of by the District Registrar.
16. It is true that sections 4 to 9 of the Act, 1961 or the Rules governing the registration do not provide to communicate the decision of the Registrar accepting or rejecting such objections to the existing society or to any objector as order of granting registration is only an administrative exercise undertaken by the Registrar as held by this Court in case of Rameshbhai Maganbhai Lakhani (supra) and such process of registration of new society is not considered to be judicial or quasi judicial, Page 96 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 so as to envisage adversarial approach from the existing society but at the same time when the Registrar refuses to grant registration, he has to communicate the decision with reasons under section 9(6) of the Act, 1961. The provision of section 153 provides for an appeal against the order passed under section 4 of the Act, 1961, therefore, whether it is an order rejecting the objections or an order to refuse the registration, both would be orders passed under section 4 of the Act, 1961. The appeal, revision or petition are entertained by necessity or convention as held by this Court in both the cases of Vachhol Dudh Utpadak Sahakari Mandali Limited (supra) and Rameshbhai Maganbhai Lakhani (supra).
17. In facts of Rameshbhai Maganbhai Lakhani (supra) the individual members of the existing society challenged the order Page 97 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 rejecting the objections and therefore, in facts of the said case, it was held that individual members of the existing society cannot claim any right which is said to be recognised in case of Vachhol Dudh Utpadak Sahakari Mandali Limited (supra) with the existing society only. In facts of the said case it was therefore, submitted that individual members would have no right to challenge the order rejecting the objections passed by the District Registrar.
18. However, in facts of the present petitions, the respective existing societies have challenged the orders rejecting the objections passed by the District Registrar under section 153 of the Act, 1961 and therefore, such appeal would be maintainable as held by this Court by necessity and convention.
Page 98 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
19. Therefore, the question arises that if appeal is maintainable whether there is an alternative remedy by filing revision application under section 155 of the Act, 1961 or not?
20. On perusal of section 155, revision petition would be maintainable against the order passed under section 153 of the Act, 1961 but in these petitions, the petitioners have challenged jurisdiction of the appellate authority to entertain the appeal under section 153 of the Act, 1961 and therefore, writ petition would be maintainable as held by the Apex Court in case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai & Others, reported in (1998) 8 SCC 1 when the petitioner has challenged the jurisdiction of the authority to pass the order.
Page 99 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022
21. In view of above analysis, decisions relied on behalf of respondent no.2 for question nos.1 to 3 formulated herein above would not be applicable in the facts of the case and therefore, they are not dealt with in detail.
22. So far as the submissions made by learned advocates on merits of the case is concerned, the District Registrar in case of Special Civil Application No. 16443/2020 has considered the objections of respondent no.2 society in detail and has come to the conclusion that there is no adverse effect upon the existing society if the registration is granted to the petitioner-society. However an attempt was made by learned Senior Advocate Mr. Jani to point out that registration of the petitioner-society in Vaghashar has adversely affected the respondent no.2 society. But such facts are already considered by the Registrar and Page 100 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 therefore, the same cannot be re-appreciated in a petition under Article 227 of the Constitution of India. On the contrary the petitioner has also pointed out that the existing society respondent no.2 has increased its volume of supply of milk to the respondent no.4 many-fold in last three years. Therefore, it cannot be said that the Registrar has committed an error on facts of the case by rejecting the objections of respondent no.2 society. It is also pertinent to note that respondent no.2 society at no stage has raised any objection to the effect that granting of registration would have adverse effect on the existing society.
23. Moreover, contention raised on behalf of the petitioners that the respondent authorities have passed the impugned orders at the time of holding of election of respondent no.4-Union in case of Special Page 101 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Civil Application No. 16443/2020 and in other cases, at the time of election of APMC, Balasinor with an oblique motive for depriving the petitioner to cast vote, cannot be considered as there is nothing on record substantiating such allegations made by the petitioner except the timeline suggesting the same.
24. It is pertinent to note that the Government Resolutions relied upon by the respondent no.2 to the effect that another cooperative society cannot be registered in the same village is reversed by the Government Resolution dated 08.03.2019. Therefore, after 2019, there can be two societies for the same object in the same village in consonance with Article 19(1)(c) of the Constitution of India. Article 19(1)
(c) of the Constitution of India has been inserted by 97th Amendment and reads as Page 102 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 under :
"19. Protection of certain rights regarding freedom of speech, etc- (1) All citizens shall have the right-
xxx
(c) to form associations or unions, or cooperative societies"
25. Thus every citizen or group of citizens has right to form a cooperative society and therefore, there cannot be any restriction on such fundamental right enshrined under Part- III of the Constitution of India subject to restrictions which may be placed by the State as enumerated under Article 19(4) of the Constitution of India. Therefore, the contention raised on behalf of the respondent no.2 that in the same village, another cooperative society with the same objects cannot be formed, is without any basis and is hereby rejected.
26. In view of above analysis of the provisions of the Act, 1961 coupled with Page 103 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 decisions relied upon by both the sides, it appears that the appellate authority has entertained the appeals without considering the submissions made by the petitioners with regard to the jurisdiction as well as on merits of the case. In case of Special Civil Application Nos. 9907/2021 to 9910/2021, it is apparent that the existing societies are situated far away from the petitioners- societies as it is apparent from the facts of each case narrated in tabular form herein above which is not in dispute.
27. Therefore, considering the facts of each of the case and in view of the legal position as enumerated here in above, the impugned orders passed by the appellate authority under section 153 of the Act, 1961 are liable to be quashed and set aside on merits.
28. The petitions are accordingly allowed. Page 104 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 The impugned order dated 10.12.2020 passed by respondent no.1-Additional Registrar (Appeals) in Appeal no.53 of 2019 and consequential order dated 11.12.2020 of the respondent No.5-Election Officer in Special Civil Application No.16443 of 2020, impugned order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.23 of 2021 in Special Civil Application No.9907 of 2021, impugned order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.24 of 2021 in Special Civil Application No.9908 of 2021, impugned order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.25 of 2021 in Special Civil Application No. 9909 of 2021 and impugned order dated 23.06.2021 passed by the respondent no.2-Additional Registrar (Appeals) in Appeal No.22 of 2021 in Special Page 105 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022 C/SCA/16443/2020 CAV JUDGMENT DATED: 30/09/2022 Civil Application No.9910 of 2021 are quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) RAGHUNATH R NAIR Page 106 of 106 Downloaded on : Sat Oct 01 20:20:47 IST 2022