Gujarat High Court
The Valsad District Cooperative Milk ... vs State Of Gujarat on 15 July, 2024
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/20561/2023 ORDER DATED: 15/07/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 20561 of 2023
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THE VALSAD DISTRICT COOPERATIVE MILK PRODUCES UNION LTD. &
ANR.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR VC VAGHELA(1720) for the Petitioner(s) No. 1,2
for the Respondent(s) No. 2
MS. HETAL PATEL, AGP for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 15/07/2024
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. At the outset, learned counsel for the petitioner would submit that the petitioner does not want to press the draft amendment dated 25.1.2024. The same is accordingly rejected as withdrawn. Draft amendment dated 4.3.2024 are formal in nature and hence hereby allowed. Necessary incorporations be made within three days.
2. Amongst various grounds taken by the learned Page 1 of 7 Downloaded on : Tue Jul 16 20:58:46 IST 2024 NEUTRAL CITATION C/SCA/20561/2023 ORDER DATED: 15/07/2024 undefined counsel for the petitioner to challenge the validity of the provisions of Section 71(1)(ff) of the Gujarat Cooperative Societies Act, 1961, as also the Rules framed thereunder, it was argued that the said provisions impose excessive unreasonable restriction in the working of the cooperative societies, inasmuch as, the statement and objections and reasons of amendment to Section 71 shows that the amendment was with a object to grant freedom for investiment to the cooperative societies, permitting them to invest funds subject to the guidelines as may be prescribed by the Reserve Bank of India.
3. The contention is that the provision of Section 71(1) (ff) imposes an unreasonable restriction, curtailing the autonomy of the society and, thus, is in clear violation of Articles 19(1)(c) read with Article 43(B) of the Constitution of India and Article 19(1)(g). The submission is that giving control in the hands of the Registrar by giving him authority to decide on the question of previous sanction for investment by the society would be in violation of the constitutional provisions which conceive Page 2 of 7 Downloaded on : Tue Jul 16 20:58:46 IST 2024 NEUTRAL CITATION C/SCA/20561/2023 ORDER DATED: 15/07/2024 undefined the cooperative societies being autonomous bodies.
4. It is then contended that under Section 12 of the Gujarat Cooperative Societies Act, there is a classification provided for different classes of the Society and Section 71 is applicable to credit structure societies and not to other societies. The circular issued pursuant to the amendment in the Act by the respondent No.2, goes beyond the Statute and, therefore, ultra-vires.
5. Dealing with this submission of the learned counsel for the petitioner, it is pertinent is to note that Sections 82 and 83 of the Gujarat Cooperative Societies Act, 1963 confer power on the Registrar to examine the books of accounts with respect to all sums of money received and expended by the society and the matters in respect of which the receipt and expenditure takes place. It is made mandatory under sub-section (1) of Section 82 that every society is to keep the prescribed books of accounts with respect to all sums of money received and expended by the society, and the matters in respect of which the Page 3 of 7 Downloaded on : Tue Jul 16 20:58:46 IST 2024 NEUTRAL CITATION C/SCA/20561/2023 ORDER DATED: 15/07/2024 undefined receipt and expenditure takes place, all sales and purchases of goods by the society, and assets and liabilities of society, and further to furnish such statements and returns and such records to the Registrar, as may be directed by the Registrar by order issued from time to time. Sub-section (1) makes it mandatory for the society to comply with the order passed by the Registrar to the aforesaid aspect. Sub-section (2) further provides that, in case, where the society is required to take any action under the Act or Rules or its bye-laws or such action or in compliance with the order passed by the Registrar under sub-section (1), and such action is not taken, the Registrar may himself or through a person authorised by him, take such action, at the expense of the Society and recover such expenses from the society as arrears of land revenue. Under sub-section (3) of Section 82, the Registrar has been empowered to call upon the Officer of the society, whom he considers to be responsible for non-compliance of the provisions of the Act, Rule or Bye-laws, while taking action under sub- Page 4 of 7 Downloaded on : Tue Jul 16 20:58:46 IST 2024
NEUTRAL CITATION C/SCA/20561/2023 ORDER DATED: 15/07/2024 undefined section (1) and may require to pay him to the society, the expenses paid or payable by it to the State Government, as a result of his failure to take action. Sub-section (4) further provides that the provisions of sub-sections (1) (2) and (3) shall apply to the societies under cooperative credit structure, subject to the guidelines, if any, issued by the RBI.
6. It is, thus, evident from the bare reading of Section 82 that the power to administer and control over the financial affairs of the society, lies with the Registrar. Section 83 further provides that in case of any suppression, tampering or destruction of the books and records of the society or the funds and properties the society or mis-use, mis-application,mis-appropriation of the funds and properties of the society, the Registrar may issue an order directing the person duly authorised by him in writing to seize and take possession books of accounts, funds and property of the society and further to take action in accordance with the provisions of Section
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7. Taking note of the language employed in Sections 82 and 83 of the Gujarat Cooperative Societies Act, 1961, and the powers conferred upon the Registrar to supervise the affairs of the working of the society in the matter of utilisation, application of funds of the society, we do not find any substance in the submission of the learned counsel for the petitioner that the requirement of clause (ff) contained in sub-section (1) in the matter of investment or deposit of fund in any land or building by the society, would have any bearing on the independence and the functioning of the society.
8. The control and supervision of the working of the society provided to the Registrar is with an idea to keep check on the working of the society, by the legislature. In absence of any challenge to Sections 82 and 83 of the Act, 1961, the contention of the learned counsel for the petitioner that the provisions of Section 71 are in the nature of excessive delegation of power to the Registrar, is found to be without force.
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NEUTRAL CITATION C/SCA/20561/2023 ORDER DATED: 15/07/2024 undefined
9. As regard the contention that the said provision only applies to the societies which are cooperative credit societies, is found to be result of mis-reading of sub- section (4) of Section 82.
10. There is no merits in the submission of the learned counsel for the petitioner in this regard. No other arguments have been made. The writ-petition is dismissed being devoid of merits.
(SUNITA AGARWAL, CJ ) (PRANAV TRIVEDI,J) SAJ GEORGE Page 7 of 7 Downloaded on : Tue Jul 16 20:58:46 IST 2024