Gujarat High Court
Kuvrabhai Bharabhai Bharvad vs State Of Gujarat & 3 on 10 August, 2016
Bench: R.Subhash Reddy, Vipul M. Pancholi
C/LPA/644/2016 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 644 of 2016
In CIVIL APPLICATION NO. 597 of 2016
In SPECIAL CIVIL APPLICATION NO. 268 of 2015
With
CIVIL APPLICATION NO. 6694 of 2016
In
LETTERS PATENT APPEAL NO. 644 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
=============================================
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 ?
============================================= KUVRABHAI BHARABHAI BHARVAD....Appellant(s) Versus STATE OF GUJARAT & 3....Respondent(s) ============================================= Appearance:
MR BS PATEL, ADVOCATE WITH MR KEYUR A VYAS, ADVOCATE for the Appellant(s) No. 1 MR NATVAR D BHARWAD, ADVOCATE for the Appellant(s) No. 1 MR DC DAVE, SR. ADVOCATE WITH MR SHIVANG J SHUKLA, CAVEATOR for the Respondent(s) No. 4 ============================================= Page 1 of 9 HC-NIC Page 1 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT CORAM: HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY and HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI Date : 10/08/2016 CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI) [1] By way of this appeal which is filed under Clause of 15 of the Letters Patent, the appellant - applicant seeks to challenge the order dated 14/07/2016 passed by the learned Single Judge in Civil Application (For joining party) No.597 of 2016.
[2] Present respondent No.4 - Shri Uchvan Gopalak Dudh Utpadak Sahakari Mandli Limited has filed Special Civil Application No.268 of 2015, wherein, respondent No.4 - original petitioner has challenged the order dated 17/11/2014 passed by the Special Auditor (Milk), Surat. Said petition is pending for hearing and disposal. In the said petition, Civil Application No.597 of 2016 was filed by the present appellant for impleading him as party respondent. Learned Single Judge by impugned order dated 14/07/2016 rejected the said application.
Hence, the appeal is filed by the present appellant.
[3] Heard learned advocate Shri B.S.Patel with learned advocate Shri Keyur Vyas for the appellant and learned Senior advocate Mr.D.C.Dave with learned advocate Mr.Shivang Shukla for respondent No.4.
[4] Learned advocate Shri B.S.Patel submitted that the appellant submitted application before the respondent State authorities wherein, he requested for reaudit of books of accounts for the year 201213 of respondent no.4 - society. Respondent authorities informed Page 2 of 9 HC-NIC Page 2 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT the appellant to deposit a sum of Rs.52,000/ in the Treasury of Audit Department, Surat for necessary fees for reaudit. Accordingly, the appellant paid sum of Rs.52,000/. Learned advocate submitted that though audit was carried out in the year 201213, certain irregularities were found and as a member of respondent no.4 - society, the appellant was interested for proper functioning of said society. As irregularities and illegalities were found, the appellant was compelled to submit such application. The respondent authorities thereafter, appointed auditor for the purpose of reaudit on the basis of application submitted by the appellant under section 84(5) of the Gujarat Cooperatives Societies Act, 1961 (for short "the Act, 1961"). Respondent No.4 - original petitioner has challenged the order of appointment of auditor for the purpose of re audit by filing aforesaid petition in which respondent no.4 has made certain allegations against present appellant in ground No.(B), (D) and (F) of the petition. At this stage, it is submitted that when the name of appellant is referred in the petition and certain specific allegations are leveled against the appellant, it was duty of respondent no.4 - original petitioner to implead the appellant as party respondent in the petition. In fact, the appellant is necessary and proper party as well as affected party. Hence,it was duty of original petitioner to join the appellant herein as party respondent in the said proceedings. However, when the appellant came to know about the pendency of the petition, he filed aforesaid Civil Application for joining him as party respondent. However, the said application is wrongly dismissed by the learned Single Judge and therefore, present appeal is filed. Mr. Patel submitted that in the facts and circumstances of the present case when the appellant is affected party and /or necessary and proper party to the proceedings, necessary directions be issued for impleading the appellant as party respondent in the aforesaid petition.
Page 3 of 9HC-NIC Page 3 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT [5] On the other hand, learned Senior advocate Shri D.C.Dave appearing for respondent no.4 - society opposed the request made by the appellant. It is contended that the appellant who is member of the respondent no.4 - society has no legal right to become a party in the main petition. In the petition though name of the appellant is referred, no relief is prayed for against the appellant. Respondent no.4 - original petitioner has prayed for quashing and setting aside the order of appointment of auditor for the purpose of reaudit. It is urged that merely because on the application submitted by the appellant before the respondent authority, auditor is appointed for the purpose of audit under section 84(5) of the Act, 1961, same does not give any right o the appellant to file an application for joining him as party in the petition filed by respondent no.4. In fact the appellant is not affected party nor he can be said necessary and proper party in the proceedings. Learned advocate submitted that the learned Single Judge has not committed any error while dismissing the application of the appellant and therefore, this Court may not interfere with the order passed by the learned Single Judge. In support of his submissions, learned advocate has placed reliance on following decisions :
(a) Ramesh Hirachand Kundanmal v/s. Municipal Corporation of Greater Bombay and Others reported in (1992) 2 SCC 524.
(b) Ravin Yashwant Bhoir v/s. District Collector, Raigad and Others reported in (2012) 4 SCC 407.
(c) Poonam v/s. State of Uttar Pradesh and others reported in (2016) 2 SCC 779.
[6] We have considered submissions advanced by learned Counsel appearing for the parties. We have gone through the material produced on record. It emerges from the record that the appellant is Page 4 of 9 HC-NIC Page 4 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT member of respondent No.4 - society and is interested in proper administration and functioning of the said society. When the appellant came to know that there are certain irregularities and illegalities committed by the office bearers of the society during the period between 201213, he submitted application on 07.07.2014 to the respondent authorities, wherein he pointed out that certain irregularities and illegalities have been committed which is not properly verified by the concerned auditor who has carried out the audit for the year 201213. Therefore, he requested that reaudit for the year 201213 be carried out by special auditor. On the basis of such request made by the appellant, it was informed to him to deposit audit fees for an amount of Rs.52,000/, which the appellant has deposited. Accordingly, Special Auditor has been appointed.
[7] Appointment of Special Auditor is under challenge in Special Civil Application No.268 of 2015 filed by respondent no.4. A copy of Special Civil Application is placed on record at the time of hearing of this appeal. On more than three places, respondent no.4 - original petitioner has referred name of present appellant. In ground (F), allegations are made against the appellant which read as under : "(F) It is respectfully submitted that the said person, namely Kuvarabhai Bharabhai Bharawad, who has given the so called application dated 07.07.2014 for reaudit of the petitioner society, is a member of the society, and in the past, on many occasions, the office bearers of the petitioner society have warned him for supplying milk of inferior quality. On the last occasion he has been warned that if in future the milk supplied by him is found to be of inferior quality, he will be expelled from the membership of the society. It is respectfully submitted that only with a view to settle his personal score with the office bearers of the society, such an application has been given by him so that a doubt can be raised in the minds of the members of the petitioner society. It is submitted that the present office Page 5 of 9 HC-NIC Page 5 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT bearers were elected by the members of the petitioner society in the year 2010 for a period of 5 years, but till date, no complaint what so ever are made either from the petitioner society or from the Government officials, moreover, the members of the Milk Marketing Federation have also not raised any grievance against the present management. It is submitted that only with a view to damage the reputation of the office bearers of the society, such application has been made by the said person. It is submitted that in my humble submission, this Hon'ble Court may not permit to use the statutory provisions only for the purpose of settling personal grudge of a party, and therefore, the impugned order may be quashed and set aside in the interest of justice."
[8] Thus, allegations of malafide are leveled against the appellant in the said petition and it has been further stated that this Court may not permit to use the statutory provisions only for the purpose of settling personal grudge of a party and therefore, it is requested that impugned order passed by respondent authority be quashed and set aside. Though allegations are made against the appellant by name, he is not joined as party respondent in the petition.
[9] Powers under section 84(5) of the Act, 1961 can be exercised by the authorities suomoto or on an application submitted by the party. In the present case, respondent authority has not exercised said power on its own but same has been exercised at the instance of the appellant. The appellant has already paid audit fees of Rs.52,000/. Thus, the appellant being member of respondent no.4 - society and at whose instance powers are exercised by respondent authorities and when specific allegations are leveled against the appellant by name, we are of the view that the appellant can be said to be necessary and proper party to the proceedings.
Page 6 of 9HC-NIC Page 6 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT [10] In the case of Mumbai International Airport Private Limited v/s. Regency Convention Centre and Hotels Private Limited and Others reported in (2010) 7 SCC 417, the Hon'ble Apex Court has held in paragraph nos.15 and 25 as under : "15. A 'necessary party' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a 'necessary party' is not impleaded, the suit itself is liable to be dismissed. A 'proper party' is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance."
"25. In other words, the court has the discretion either to allow or reject an application of a person claiming to be a proper party, depending upon the facts and circumstances and no person has a right to insist that he should be impleaded as a party, merely because he is a proper party."
[11] In the case of State of Asasm v/s. Union of India and Others reported in 2011 AIR SCW 3724, the Hon'ble Apex Court has observed in paragraph no.14 as under : "14. We respectfully agree with the observations made by this Court in Udit Narain's case (supra) and adopt the same. We may add that the law is now well settled that a necessary party is one without whom, no order can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision of the question involved in the proceeding."
Page 7 of 9HC-NIC Page 7 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT [12] Learned Counsel for the respondent No.4 has placed reliance on decision rendered by the Apex Court in the case of Ramesh Hirmachand Kundanmal (supra). However, there is no dispute with regard to proposition laid down by the Hon'ble Apex Court in the said decision. In the facts of the present case, we are of the view that the appellant is necessary and proper party to the proceedings.
[13] Learned Counsel for respondent No.4 however placed reliance on the decision of the Apex Court in the case of Ravi Yashwant Bhoir (supra). In the said case, on the basis of complaint filed by the Ex President, Departmental proceedings came to be initiated and memo of charges were levelled against the President of Municipal Council. In the facts of the case, it was held by the Apex Court that said complainant is not having legal right to be joined as party in the proceedings. Similarly decision rendered by the Apex Court in the case of Poonam (surpa), will not render any assistance to the case of respondent no.4 in the facts of the present case.
[14] Keeping in mind the law laid down by the Hon'ble Apex Court in various decisions, if the present case is examined, we are of the opinion that respondent authority has exercised power conferred on it under section 84(5) of the Act, 1961 on an application given by the appellant. The appellant has paid the audit fees of Rs.52,000/ and as a member of respondent no.4, the appellant is interested that proper re audit is carried out by the Special Auditor. There are allegations leveled against the appellant by name in the petition as observed hereinabove without joining him as party. Though no relief is prayed against the appellant in the petition, order appointing Special Auditor is under challenge who has been appointed on an application given by the appellant, we are of the view that in the facts and circumstances of the Page 8 of 9 HC-NIC Page 8 of 9 Created On Wed Aug 10 23:57:11 IST 2016 C/LPA/644/2016 CAV JUDGMENT case, present appellant is necessary and proper party to the proceedings. We have gone through reasoning given by the learned Single Judge. However, in view of aforesaid discussion, we are of the opinion that the appellant is required to be joined as party respondent in Special Civil Application No.268 of 2015.
[15] Accordingly, the impugned order dated 14/07/2016 passed by the learned Single Judge is set aside. The appellant / applicant is ordered to be joined as party respondent in Special Civil Application No.268 of 2015 filed by respondent no.4. This appeal is accordingly, allowed. No order as to costs. Consequently, the Civil Application also stands disposed of.
(R. SUBHASH REDDY, CJ) (VIPUL M. PANCHOLI, J.) satish Page 9 of 9 HC-NIC Page 9 of 9 Created On Wed Aug 10 23:57:11 IST 2016