Gujarat High Court
Pravinsinh Hematsinh Zala vs State Of Gujarat on 27 July, 2020
Author: Vikram Nath
Bench: Vikram Nath, J.B.Pardiwala
C/SCA/23321/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 23321 of 2019
With
R/SPECIAL CIVIL APPLICATION NO. 22742 of 2019
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 22742 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATH Sd/
and
HONOURABLE MR. JUSTICE J.B.PARDIWALA Sd/
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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PRAVINSINH HEMATSINH ZALA
Versus
STATE OF GUJARAT
==========================================================
Appearance:
MR. MIHIR JOSHI, LD. SR. COUNSEL with MR DIPEN DESAI(2481) for the
Petitioner(s) No. 1,2,3,4,5,6,7
for the Respondent(s) No. 2,3,4,5
MR. KAMAL TRIVEDI, LD. ADVOCATE GENERAL with MR. VINAY VISHEN,
LD. AGP for the Respondent(s) No. 1
MR BHARAT T RAO(697) for the Respondent(s) No. 6
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C/SCA/23321/2019 JUDGMENT
CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATH
and
HONOURABLE MR. JUSTICE J.B.PARDIWALA
Date : 27/07/2020
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. Since the issues raised in both the captioned writ application are interrelated, those were taken up for hearing analogously and are being disposed of by this common judgment and order.
2. We first take up the Special Civil Application No.23321 of 2019 for consideration.
3. By this writ application under Article 226 of the Constitution of India, the writ applicants, in their capacity as the elected Directors of the respondent No.6-Jamnagar District Cooperative Bank Ltd. (for short "the Bank"), have prayed for the following reliefs;
"(A) This Hon'ble Court be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, order or directions, quashing and setting aside the action on the part of the respondent authorities more particularly respondent Nos.4 to 6 in initiating the process of election of members of managing committee of the respondent No.6-Jamnagar District Co-operative Bank Limited by holding it illegal and arbitrary as the term of the members of managing committee has not expired and the election has not become due.Page 2 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021
C/SCA/23321/2019 JUDGMENT (B) This Hon'ble Court be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ, order or directions, directing and declaring that the terms of the elected members of managing committee of respondent No.6-Jamnagar District Co-operative Bank Limited has not expired and the election has not become due.
(BB) This Hon'ble Court be pleased to quash and set aside the provisions of Sections 74C(2)(i) and 74c(2)(ii) of the Gujarat Cooperative Societies Act, 1961 by declaring the same to be manifestly arbitrary and in violation of Article 14 of the Constitution of India."
(C) Pending admission, hearing and final disposal of the petition, this Hon'ble Court be pleased to restrain the respondent Nos. 4 to 6 from initiating the process of election of members of managing committee of respondent No.6-Jamnagar District Co-operative Bank Limited.
(D) This Hon'ble Court may be pleased to grant such other and further relief/s as deemed just and proper by this Hon'ble Court in the interest of justice."
4. The facts, giving rise to this litigation, may be summarized as under;
4.1 The writ applicants seek to challenge the alleged arbitrary action on the part of the respondent authorities, more particularly, the respondents Nos.4 to 6 respectively of initiating the process of election of the members of the Managing Committee of the Bank substantially on the ground that although the term of the members of the Managing Committee has not expired, yet the respondents want to conduct the election. In other words, it is the case of the writ applicants that as the statutory tenure to hold Page 3 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT the office has not yet come to an end, the election cannot be said to have fallen due. For this purpose, the writ applicants also seek to challenge the constitutional validity of Sections 74C(2)(i) and 74C(2)(ii) respectively of the Gujarat Cooperative Societies Act, 1961 (for short "the Act, 1961") on the ground that the said provisions are manifestly arbitrary being violative of Article 14 of the Constitution of India. The foundation for such a plea is that the impugned Sections fail to take into account the period of injunction which may have been granted to which the Managing Committee would not be able to take charge.
4.2 It appears from the materials on record that the last election of the Bank was declared on 18th March, 2015 and the same was held on 29th April, 2015. The result of the said election was declared on 29th April, 2015 and the writ applicants were declared as the elected Directors of the Bank as required under Rule 68 of the Gujarat Specified Cooperative Societies Election to Committee Rules, 1982 (for short " the Rules, 1982"). It also appears that the State Government appointed a government nominee on 31st March, 2015 in purported exercise of its powers under Section 80(3) of the Act after subscribing to the share capital of the respondent No.6-Bank.
4.3 The said subscription and appointment of the government nominee, as referred to above, came to be challenged by way of the Special Civil Application No.8714 Page 4 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT of 2015 before this Court by some of the elected Directors of the Bank. A learned Single Judge of this Court, vide order dated 18th May, 2015, granted interim relief restraining the State Authorities from convening the meeting for the purpose of election of the Office Bearers. Such interim relief continued to operate till the final disposal of the petition. The petition, ultimately, came to be allowed by this Court vide the judgment and order dated 4th April, 2016, whereby this Court held that the appointment of the government nominee was illegal and the subscription of the share capital in the Bank was also illegal. In such circumstances, this Court set aside the subscription of share capital and also the appointment of the government nominee.
4.4 The learned Single Judge, thereafter, directed that the election of the Chairman and Vice Chairman of the Bank shall be held from amongst the elected Director of the Bank and directions were issued in this regard to immediately call for the meeting of the elected Directors of the Bank for the purpose of holding the election of the Chairman as required under Section 145Z of the Act.
4.5 The materials on record further indicate that one another petition being the Special Civil Application No.16960 of 2015 was preferred by the various other members of the Bank, seeking appointment of custodian, however, the said writ application was rejected vide order Page 5 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT dated 4th April, 2016.
4.6 The State Government challenged the above referred order passed by the learned Single Judge by way of the Letters Patent Appeal No.346 of 2016, wherein the Appeal Court vide order dated 19th April, 2016 issued notice and stayed the direction issued by the learned Single Judge in its order dated 4th April, 2016.
4.7 It appears that although the term of the earlier body had expired and fresh election had already taken place, yet, the new body was not able to takeover the charge of the affairs of the Bank as the earlier body continued to manage the affairs of the Bank.
4.8 It also appears that vide order dated 6th May, 2016 passed in the Letters Patent Appeal No.346 of 2016, the Appeal Court directed that the Managing Committee who was managing the affairs of the Bank shall not take any policy decision, and before sanctioning or disbursing the loan, the approval of the District Registrar shall be obtained.
4.9 It appears that the above referred interim order dated 19th April, 2016, later, came to be modified by the Appeal Court vide order dated 23rd March, 2018 passed in the Civil Application No.01 of 2017 in the Letters Patent Appeal No.346 of 2016, whereby the Appeal Court permitted to hold the election of the Chairman and the Vice Chairman Page 6 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT and other Office Bearers of the Bank.
4.10 It appears that the election of the Chairman and the Vice Chairman of the Bank was held on 21st May, 2018 and that is how the newly elected body, i.e, the writ applicants herein and the other Directors took over the charge of the Bank.
4.11 Section 74C(2) as it stood prior to the amendment stipulated that the members elected on the Committee shall hold the office for a period of three years from the date on which the first meeting is convened and shall continue in office until immediately before the first meeting of the members of the new committee.
4.12 Section 74C(2) came to be amended w.e.f. 10th April, 2015 stipulating that the term of elected members of the Managing Committee shall be five years from the date of the election. Section 74C(2)(iv) provided that the elected members of the Committee and its Office Bearers shall cease to hold office on expiry of their term. Section 74D of the Act also came to be inserted by the said amendment wherein it provided that if prior to the expiry of the term of the Managing Committee, new elections have not taken place or the new body has not taken over the charge and has not started functioning, then a custodian shall be appointed.
Page 7 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021C/SCA/23321/2019 JUDGMENT 4.13 The entire basis of this writ application is that the
term of the elected Directors has to commence only from May, 2018, i.e, the day on which they took over the charge of the Bank. In other words, the case of the writ applicants is that the provisions of Section 74C(2) and Section 74D along with Section 75 of the Act should be harmoniously read to provide that the term has to start from the date on which the elected Directors actually start functioning.
4.14 It is submitted that the respondent No.6 has made a proposal for holding the election of the members of the Managing Committee of the Bank, and in response thereto, the respondent No.4-Deputy Collector and the respondent No.5-District Registrar intend to proceed further for initiating the process of election. In such circumstances, referred to above, the writ applicants are here before this Court with the present writ application.
Submissions on behalf of the writ applicants.
5. Mr. Mihir Joshi, the learned senior counsel assisted by Mr. Dipen Desai, the learned advocate for the writ applicants vehemently submitted that Section 74C(2)(i) and Section 74C(2)(ii) of the Gujarat Cooperative Societies Act, 1961 should be declared as manifestly arbitrary and contrary to the other provisions of the Act, 1961. Mr. Joshi would submit that although Section 74C(2)(i) of the amended Act provides that the term of the elected members Page 8 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT of the Managing Committee shall be five years from the date of the election, yet the said provision fails to consider the date of taking over the charge by the said Managing Committee. Mr. Joshi gave an instance of an injunction order passed by any Competent Court like the one at hand. Mr. Joshi would vehemently argue that in such circumstances, the Managing Committee would not be able to take over the charge, and on expiry of the statutory time period, the new election would fall due. Mr. Joshi would submit that although his client came to be elected in accordance with the provisions of the Act, yet because of the supervening circumstances in the form of various orders passed by this Court, they could take over the charge only in the year 2018 and, therefore, the period of two and a half years could be said to have been commenced only from the date they actually took over the charge. In other words, as the term could be said to have commenced only in 2018, the period of five years should be counted from that point of time.
6. Mr. Joshi would submit that Section 74C(2) runs contrary to Section 75 of the Act and both the sections should be read harmoniously. It is pointed out that Section 75 provides that the outgoing chairman has to handover the records to the new chairman of the newly elected committee. Therefore, the same presupposes that unless the new chairman is appointed and the record is handed over to the new committee, the fresh term could not be said to have Page 9 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT commenced.
7. Mr. Joshi would submit that it is a settled proposition of law that no one should be made to suffer because of a stay granted by a Court. In other words, no person should be made to suffer for the act of the Court. According to Mr. Joshi, this aspect has not been kept in mind by the legislature while amending Section 74C(2) and, therefore, the said section could be termed as manifestly arbitrary.
8. Mr. Joshi, the learned senior counsel, in support of his aforesaid submissions, has placed reliance on the judgment of this Court dated 23rd January, 2020 rendered in the Letters Patent Appeal No.1664 of 2019 in the case of Natwarbhai Pirambardas Patel vs. Navinchandra Jagjivandas Patel.
9. In such circumstances, referred to above, Mr. Joshi prays that there being enough merit in his writ application, the same be allowed and the reliefs prayed for in this writ application may be granted.
Submissions on behalf of the State.
10. Mr. Kamal Trivedi, the learned Advocate General assisted by Mr. Vinay Vishen, the learned Assistant Government Pleader would submit that there is no merit worth the name in any of the contentions raised on behalf of the writ applicants. Mr. Trivedi would submit that the Page 10 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT present writ application seeking to challenge the legality and validity of Section 74C(2)(i) and Section 74C(2)(ii) respectively of the Act could be said to have been filed at a belated stage, more particularly, when the impugned provisions inserted by virtue of the Amendment Act, 2015 came into force from 10th April, 2015. Mr. Trivedi would submit that the writ applicants were very much aware of the impugned provisions, and despite the same, thought fit not to challenge the validity at the earliest point of time.
11. Mr. Trivedi would submit that the writ applicants, on the day when they came to be elected, knew very well that their tenure would come to an end on 28th April, 2020. In such circumstances, the belated challenge to the validity of the impugned provisions may not be entertained. Mr. Trivedi would submit that it is trite in law that the Writ Court should examine whether the challenge of the present nature is raised at the earliest point of time, i.e, when the statute came to be introduced or any new provision is brought into the statute book.
12. Mr. Trivedi would submit that there is no merit in the contention raised on behalf of the writ applicants that as the impugned provisions do not take care of the eventuality like an injunction order of the Competent Court which may prevent the Managing Committee from taking over the charge of the affairs of the society, the same renders both the provisions, referred to above, susceptible to the Page 11 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT complaint that they are violative of Article 14 of the Constitution of India being very arbitrary in nature.
13. Mr. Trivedi would submit that if the proposition as sought to be canvassed on behalf of the writ applicants is accepted, the same would lead to over laping of the elections resulting in a absolute chaos. The contention that the writ applicants who are primarily the elected members elected vide the election dated 29th April, 2015 and elected as the office bearers only on 21st May, 2018 should be allowed to continue on the plea that owing to the injunction order during the interregnum period, they were not able to complete their term of two and a half years is wholly erroneous and not tenable in the democratic setup.
14. Mr. Trivedi vehemently submitted that the writ applicants came to be elected as the Directors of the Society on 29th April, 2015 and the period of five years has to be counted from that particular day which expired on 28th April 2020.
15. In such circumstances, referred to above, Mr. Trivedi the learned Advocate General, prays that there being no merit in this writ application, the same may be rejected.
ANALYSIS 16 Having heard the learned counsel appearing for the Page 12 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT
parties and having gone through the materials on record, the following questions fall for our consideration;
(i) Whether Section 74C(2)(i) and 74C(2)(ii) respectively of the Amendment Act are ultra vires Article 14 of the Constitution on the ground of being manifestly arbitrary.
(ii) Whether the writ applicants are entitled to hold the office beyond 28th April, 2020?
17. By way of the Gujarat Act No.12 of 2015 (for short "the Act of 2015"). an amendment has been effected in the erstwhile Section 74C of the Act by substituting a new sub-section (2). The said amendment came into effect from 10th April, 2015. we set out hereunder, the erstwhile section 74C(2) as well as new Section 74C(2) of the Act:
Erstwhile provision of Section 74C(2) of the Act:
"(2) When the election of all the members of the committee of any such societies held at the same time, the members elected on the committee at such general election shall hold office for a period of three years from the date on which the first meeting is held and shall continue in office until immediately before the first meeting of the members of the new committee."
New Provisions of Section 74C(2) of the Act:
"(2) (i) The term of the elected members of the managing committee shall be five years from the date of election.
(ii) The term of office bearers of the managing committee Page 13 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT shall be two and a half years from the date of election.
(iii) The managing committee shall fill up a casual vacancy within a period of sixty days from the date of such vacancy, failing which the State Government shall have the power to fill up such casual vacancy out of the same, class of categories of members in respect of which the casual vacancy has arisen if the remaining term of office of the managing committee is less than half of its original term.
(iv) The elected members of the managing committee and its office bearers shall cease to hold the office on the date of expiry of their term.
(v) Notwithstanding anything contained in clause (ii), the office bearers of managing committee who have completed two and a half years on the date of the commencement of the Gujarat Cooperative Societies (Amendment) Act, 2015, shall continue to be such office-bearer for the remainder term.
(vi) Nothing in clause (i) shall be applicable to the managing committee existing on the date of coming into force of the Gujarat Co-operative Societies (Amendment) Act, 2015.
(vii) The office bearers of the managing committee shall be eligible for re-election.
18. Prior to the Amendment Act of 2015, the provisions of Section 74C(2) provided the term of the elected members as three years from the date on which the first meeting is held. Unfortunately, over the years, the elections to these cooperative societies could not be conducted in terms of the provisions of the Act. There were inordinate delays in concluding the elections. Election processes were being challenged, stay orders were being obtained and the persons who were in office continued to enjoy the benefit of the Page 14 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT same. Those who were elected were not able to have full tenure of 3 years on account of such manipulative practices being adopted by the unscrupulous persons. In order to bring around some element of consistency and definiteness as regards the tenure of office of the elected members, the Act was amended making it mandatory to conduct the elections on the due dates and if elections are not conducted. the persons holding the post shall cease to hold the office. The amendment Act of 2015 seeks to address the aforesaid mischief by making it very clear that the five years tenure is to be computed from the day the member is elected and not from the date of the first meeting. The office bearers in a cooperative society are elected from amongst the persons elected as members. Therefore. the term of two and a half years of the office bearers is coterminous with the term of the Board. It is clear that the objective is to give a definite tenure of 5 years to an elected person.
19. Section 74C of the Act provides for the conduct of elections of the committees and officers of the specified societies and term of the members of the committees. The said section provides that: the elections of members of the committees and the officers of the Committee of the societies of the categories mentioned therein shall be subject to Chapter Xl- A and shall be conducted in the manner laid down by and under that chapter. One of the specified societies is the District Central Co-operative Bank, and therefore, the provisions of the said section will be Page 15 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT applicable to the case at hand. The said Chapter contains Section 145A, which provides for application of all section of this chapter except the Section 145Z which shall apply to the elections to the committees of societies belonging to the categories specified in Section 74C. Section 145B provides definitions. Section 145B(b) defines "election" which means election of a member or members of the committee of a specified society. Clause (c) of Section 145B defines 'specified society" which means society belonging to any of the categories specified in Section 74C. Section 145C of the Act provides when election to be held and provides that every election shall be held as far as possible one month before the date on which the term of office of the members is due to expire. Section 145D of the Act provides for conduct of elections. Section 145F of the Act provides disqualification of membership. Section 145U of the Act provides for disputes relating to elections to be submitted to the Tribunal. When the impugned provisions are read with Sections 145B(b) and 145C of the Act, the elections will become due on the expiry of the term of office of the members, which is five years. Therefore, the period of five years is the outer limit and the same cannot be breached.
20. We are not impressed by the contention raised on behalf of the writ applicants that Sections 74C(2)(i) and 74C(2)(ii) of the Amended Act are ultra vires Article 14 of the Constitution being manifestly arbitrary.
Page 16 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021C/SCA/23321/2019 JUDGMENT 21. The issue whether law can be declared
unconstitutional on the ground of arbitrariness has received the attention of the Supreme Court in a Constitution Bench Judgment in the case of Shayara Bano v. Union of India & Ors. 24. R.F. Nariman and U.U.Lalit, JJ. discredited the ratio of the following judgements, i.e., (i) State of M.P. v. Rakesh Kohli, (2012) 6 SCC 312; (ii) Ashoka Kumar Thakur v. Union of India, (2008) 6 SCC 122, (1996) 3 SCC 709, (2016) 2 SCC 445, (2017) 9 SCC 1). In the above referred judgments of the Supreme Court, it was held that a law cannot be declared unconstitutional on the ground that it is arbitrary. The Judges pointed out the larger Bench judgment in the case of Dr. K.R, Lakshmanan v. State of T.N. & Anr., and Maneka Gandhi v. Union of India & Anr. where manifest arbitrariness is recognized as the third ground on which the legislative Act can be invalidated. The following discussion in this behalf is worthy of note:
"87. The thread of reasonableness runs through the entire fundamental rights chapter. What is manifestly arbitrary is obviously unreasonable and being contrary to the rule of law, would violate Article 14. Further, there is an apparent contradiction in the three Judge Bench decision in McDowell (State of A.P. v. McDowell and Co., (1996) 3 SCC 709) when it is said that a constitutional challenge can succeed on the ground that a law is disproportionate, excessive or unreasonable, yet such challenge would fail on the very ground of the law being unreasonable, unnecessary or unwarranted. The arbitrariness doctrine when applied to legislation obviously would not involve the latter challenge but would only involve a law being disproportionate, excessive or otherwise being manifestly unreasonable. All the aforesaid grounds, therefore, do not seek to differentiate Page 17 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT between State action in its various forms, all of which are interdicted if they fall foul of the fundamental rights guaranteed to persons and citizens in Part III of the Constitution.
88. We only need to point out that even after McDowell (State of A.P. v. McDowell and Co., (1996) 3 SCC 709), this Court has in fact negated statutory law on the ground of it being arbitrary and therefore violative of Article 14 of the Constitution of India. In Malpe Vishwanath Acharya, this Court held that after passage of time, a law can become arbitrary, and, 25 (1996) 2 SCC 226 26 (1978) 1 SCC 248 therefore, the freezing of rents at a 1940 market value under the Bombay Rent Act would be arbitrary and violative of Article 14 of the Constitution of India (see paras 8 to 15 and
31).
xx xx xx
99. However, in State of Bihar v. Bihar Distillery Ltd. (State of Bihar v. Bihar Distillery Ltd., (1997) 2 SCC 453), SCC at para 22, in State of M.P. v. Rakesh Kohli (State of M.P. v. Rakesh Kohli, (2012) 6 SCC 312 : (2012) 3 SCC (Civ) 481), SCC at paras 17 to 19, in Rajbala v. State of Haryana (Rajbala v. State of Haryana, (2016) 2 SCC 445), SCC at paras 53 to 65 and in Binoy Viswam v. Union of India (Binoy Viswam v. Union of India, (2017) 7 SCC 59), SCC at paras 80 to 82, McDowell (State of A.P. v. McDowell and Co., (1996) 3 SCC
709) was read as being absolute bar to the use of arbitrariness as a tool to strike down legislation under Article
14. As has been noted by us earlier in this judgment, McDowell (State of A.P. v. McDowell and Co., (1996) 3 SCC
709) itself is per incuriam, not having noticed several judgments of Benches of equal or higher strength, its reasoning even otherwise being flawed. The judgments, following McDowell (State of A.P. v. McDowell and Co., (1996) 3 SCC 709) are, therefore, no longer good law."
22. The historical development of the doctrine of arbitrariness has been noticed by the Hon'ble Judges in Shayara Bano in detail. It would suffice to reproduce Page 18 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT paragraphs 67 to 69 respectively of the said judgment as the discussion in these paras provide a sufficient guide as to how a doctrine of arbitrariness is to be applied while adjudging the constitutional validity of a legislation.
"67. We now come to the development of the doctrine of arbitrariness and its application to State action as a distinct doctrine on which Sate action may be struck down as being violative of the rule of law contained in Article 14. In a significant passage, Bhagwati, J., in E.P. Royappa v. State of T.N. stated: (SCC p. 38, para 85)
85. The last two grounds of challenge may be taken up together for consideration. Though we have formulated the third ground of challenge as a distinct and separate ground, it is really in substance and effect merely an aspect of the second ground based on violation of Articles 14 and 16. Article 16 embodies the fundamental guarantee that there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. Though enacted as a distinct and independent fundamental right because of its great importance as a principle ensuring equality of opportunity in public employment which is so vital to the building up of the new classless egalitarian society envisaged in the Constitution, Article 16 is only an instance of the application of the concept of equality enshrined in Article 14. In other words, Article 14 is the genus while Article 16 is a species. Article 16 gives effect to the doctrine of equality in all matters relating to public employment. The basic principle which, therefore, informs both Articles 14 and 16 is equality and inhibition against discrimination. Now, what is the content and reach of this great equalising principle? It is founding faith, to use the words of Bose, J., a way of life, and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate its all embracing scope and Page 19 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be cribbed, cabined and confined within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14, and if it effects any matter relating to public employment, it is also violative of Article 16. Article 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. They require that State action must be based on valid relevant principles applicable alike to all similarly situate and it must not be guided by any extraneous or irrelevant consideration because that would be denial of equality. Where the operative reason for State action, as distinguished from motive inducting from the antechamber of the mind, is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would amount to mala fide exercise of power and that is hit by Articles 14 and
16. Mala fide exercise of power and arbitrariness are different lethal radiations emanating from the same vice: in fact the letter comprehends the former. Both are inhibited by Articles 14 and 16.
68. This was further flashed out in Maneka Gandhi v. Union of India, where after stating that various fundamental rights must be read together and must overlap and fertilise each other, Bhagwati, J., further amplified this doctrine as follows: (SCC pp. 283-84, para 7) The nature and requirement of the procedure under Article 21
7.Now, the question immediately arises as to what is the requirement of Article 14: what is the content and reach of the great equalising principle enunciated in this article? There can be no doubt that it is a founding faith Page 20 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made truncate its all-embracing scope and meaning, for to do so would to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits. We must reiterate here what was pointed out by the majority in E.P.Royappa v. State of T.N., namely that: (SCC p. 38, para 85)
85. From a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic, while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14.
Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non- arbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14. It must be right and just and fair and not arbitrary, fanciful or oppressive; otherwise, it would be no procedure at all and the requirement of Article 21 would not be satisfied.
69. This was further clarified in A.L.Kalra v. Project and Equipment Corpn., following Royappa and holding that arbitrariness is a doctrine distinct from discrimination. It was held: (A.L.Kalra case SCC p. 328, para 19)
19. It thus appears well settled that Article 14 strikes at arbitrariness in executive/administrative action because any action that is arbitrary must necessarily involve the negation of equality. One need not confine Page 21 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT the denial of equality to a comparative evaluation between two persons to arrive at a conclusion of discriminatory treatment. An action per se arbitrary itself denies equal of (sic) protection by law. The Constitution Bench pertinently observed in Ajay Hasia case and put the matter beyond controversy when it said: (SCC p. 741, para 16)
16. Wherever therefore, there is arbitrariness in State action whether it be of the legislature or of the executive or of an authority under Article 12, Article 14 immediately springs into action and strikes down such State action.
This view was further elaborated and affirmed in D.S.Nakara v. Union of India. In Maneka Gandhi v. Union of India it was observed that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It is thus too late in the day to contend that an executive action shown to be arbitrary is not either judicially reviewable or within the reach of Article 14. The same view was reiterated in Babita Prasad v. State of Bihar, SCC at p. 285, para 3."
23. The aforenoted doctrine is, thus, treated as one of the facets of both the Articles 14 and 21 respectively of the Constitution.
24. In the case of State of Jammu & Kashmir vs. Triloki Nath Khosa and ors reported in AIR 1974 SC 1 the Constitution Bench of the Supreme Court upheld the legislation classifying the Assistant Engineers into Degree-holders and Diploma- holders respectively for the purpose of promotion. It was observed that the classification on the basis of the educational qualifications made with a view to achieving the administrative efficiency cannot be Page 22 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT said to rest on any fortuitous circumstances and one has always to bear in mind the facts and circumstances in order to judge the validity of a classification. It was observed that there is a presumption of constitutionality of a statute. The burden is on one who canvasses that certain statute is unconstitutional to set out facts necessary to sustain the plea of discrimination and to adduce cogent and convincing evidence to prove those facts. In order to establish that the protection of the equal opportunity clause has been denied to them, it is not enough for the petitioners to say that they have been treated differently from others, not even enough that a differential treatment has been accorded to them in comparison with the other similarly circumstanced. Discrimination is the essence of classification and does violence to the constitutional guarantee of equality only if it rests on an unreasonable basis.
25. On the question of the grounds on which a law framed by the legislation i.e. the parliament or the State assembly the decision of three Judge Bench of the Supreme Court in case of State of A.P. And ors vs. Macdowell and Co. and ors, reported in (1996) 3 SCC 709 held the field and was often referred to and relied upon. In the said judgment, the Supreme Court had opined that the grounds for striking down a statute framed by the legislature are only two viz. (1) lack of legislative competence, or (2) violation of fundamental rights or any other constitutional provision. If enactment is challenged as violative of Article 14, it can be Page 23 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT struck down only if it is found that it is violative of the equality clause or the equal protection clause enshrined therein. Similarly, if an enactment is challenged as violative of any of the fundamental rights guaranteed by clauses (a) to (g) of Article 19(1), it can be struck down only if it is found not saved by any of the clauses (2) to (6). No enactment can be struck down by just saying that it is arbitrary or unreasonable. 'Arbitrariness' is an expression used widely and rather indiscriminately-an expression of inherently imprecise import. Hence, some or the other constitutional infirmity has to be found before invalidating the Act. An enactment cannot be struck down on the ground that the Court thinks it unjustified. The Parliament and legislatures, composed as they are of the representatives of the people and supposed to know and be aware of the need of the people and every what is good and bad for them. The Court cannot sit on the judgement over their wisdom.
26. In the recent judgment of the Supreme Court in case of Shayra Bano (supra), His Lordship Rohinton Fali Nariman, J., however, expressed a somewhat different view. It was observed that a statute can also be struck down if it is manifestly arbitrary. It was observed as under:
"101. It will be noticed that a Constitution Bench of this Court in Indian Express Newspapers v. Union of India, (1985) SCC 641, stated that it was settled law that subordinate legislation can be challenged on any of the grounds available for challenge against plenary Page 24 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT legislation. This being the case, there is no rational distinction between the two types of legislation when it comes to this ground of challenge under Article 14. The test of manifest arbitrariness, therefore, as laid down in the aforesaid judgments would apply to invalidate legislation as well as subordinate legislation under Article 14. Manifest arbitrariness, therefore, must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. We are, therefore, of the view that arbitrariness in the sense of manifest arbitrariness as pointed out by us above would apply to negate legislation as well under Article 14."
27. It is well settled that as long as the legislation has the necessary competence to frame a law and the law so framed is not violative of the fundamental rights enshrined in the constitution or any of the constitutional provision, the Court would not strike down the statute merely on the perception that the same is harsh or unjust.
28. Thus, as held by the Supreme Court, manifest arbitrariness must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. When something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary.
29. As discussed above, the impugned provisions, by any stretch of imagination, cannot be termed as arbitrary. They came to be enacted by virtue of the Amendment Act with a Page 25 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT definite purpose and object. The object which would prevent the mischief that used to be committed earlier before the amended provisions came into force.
30. We are quite impressed with the submission of Mr. Trivedi, the learned Advocate General that the challenge to the constitutional validity of the two impugned provisions should also fail on the ground of its belated challenge. In this regard Mr. Trivedi invited our attention to the decision of the Supreme Court in the case of PGF Limited & Ors vs. Union of India & Anr., (2015) 13 SCC 50, more particularly, the observations made in para-37 therein. Para-37 reads thus;
37. The Court can, in the first instance, examine whether there is a prima facie strong ground made out in order to examine the vires of the provisions raised in the writ petition. The Court can also note whether such challenge is made at the earliest point of time when the statute came to be introduced or any provision was brought into the statute book or any long time-gap exists as between the date of the enactment and the date when the challenge is made. It should also be noted as to whether the grounds of challenge based on the facts pleaded and the implication of the provision really has any nexus apart from the grounds of challenge made. With reference to those relevant provisions, the Court should be conscious of the position as to the extent of public interest involved when the provision operates the field as against the prevention of such operation. The Court should also examine the extent of financial implications by virtue of the operation of the provision vis-à-vis the State and alleged extent of sufferance by the person who seeks to challenge based on the alleged invalidity of the provision with particular reference to Page 26 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT the vires made. Even if the writ court is of the view that the challenge raised requires to be considered, then again it will have to be examined, while entertaining the challenge raised for consideration, whether it calls for prevention of the operation of the provision in the larger interest of the public. We have only attempted to set out some of the basic considerations to be borne in mind by the writ court and the same is not exhaustive. In other words, the writ court should examine such other grounds on the above lines for consideration while considering a challenge on the ground of vires to a statute or the provision of law made before it for the purpose of entertaining the same as well as for granting any interim relief during the pendency of such writ petitions. For the above stated reasons it is also imperative that when such writ petitions are entertained, the same should be disposed of as expeditiously as possible and on a time-bound basis, so that the legal position is settled one way or the other."
31. The principles of law as discernible from the above may be summarized as under;
(a) The Writ Court should consider whether a prima facie strong ground has been made out by the writ applicants in order to examine the vires of the provisions questioned in the writ petition.
(b) The Writ Court should also consider whether such challenge to the constitutional validity of the provisions raised in the writ petition has been made at the earliest point of time when the statute came to be introduced or any provision was brought into the statute book. The Court owes a duty to consider whether any long time-gap exists as between the date of the enactment and the date when the Page 27 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT challenge is made.
(c ) The Writ Court should also consider whether the grounds of challenge based on the facts pleaded and the implication of the provision really has any nexus apart from the grounds of challenge made.
(d) With reference to the relevant provisions, the Writ Court should be conscious of the position as to the extent of public interest involved when the provision operates the field as against the prevention of such operation.
(e) The Writ Court should also examine the extent of financial implications, if any, by virtue of the operation of the provision vis-a-vis the State and the alleged extent of sufferance by the person who seeks to challenge based on the alleged invalidity of the provision with particular reference to the vires made.
(f) Even if the Writ Court is of the opinion that the challenge deserves to be considered, then, again, it should be examined while entertaining the challenge raised for consideration, whether it calls for prevention of the operation of the provision in the larger interest of the public.
32. In the overall view of the matter, we are convinced that no case is made out by the writ applicants for grant of any of the reliefs.
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33. In the result, this writ application fails and is hereby rejected.
34. After this order was passed, Mr. Mihir Joshi, the learned senior counsel appearing for the writ applicants in the Special Civil Application No.23321 of 2019 requested that the operation of this order be stayed for a period of two months to enable the writ applicants to avail further remedy. However, for the reasons given in the judgment, we are not inclined to grant the request. The same is declined.
35. We shall now take up the Special Civil Application No.22742 of 2019.
36. By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following reliefs;
"(A) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the respondent Nos.1 to 3 authorities to hold election of board of directors of The Jamnagar District Cooperative Bank Ltd. whose term is going to expire on 29.04.2020 for the reasons stated in the memo of the petition, in the interest of justice.
(B) Pending admission, hearing and final disposal of the above Special Civil Application, Your Lordships may be pleased to restrain the respondent Nos.1 and 2 from appointing Custodian under Section 74D of the Gujarat Cooperative Societies Act, on the ground of non-holding the election of board of directors of The Jamnagar District Cooperative Bank Ltd. whose term is going to Page 29 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT expire on 29.04.2020, for the reasons stated in the memo of the petition, in the interest of justice.
(C ) To grant ad-interim relief in terms of Para-28(B) hereinabove for the reasons stated in the Memo of Petition.
(D) The Hon'ble Court may kindly be pleased to grant any other appropriate relief as the nature circumstances of the case may require."
37. The facts, giving rise to this litigation, may be summarized as under;
37.1 The writ applicants seek appropriate directions from this Court to hold the election of the board of Directors of the respondent No.4-Bank. This writ application, essentially, seeks interim relief against the appointment of custodian under Section 74D of the Gujarat Cooperative Societies Act, 1961 (for short "the Act, 1961").
38. We have heard Mr. B.T. Rao, the learned counsel appearing for the writ applicants and Mr. Kamal Trivedi, the learned Advocate General assisted by Mr. Vinay Vishen, the learned Asst. Government Pleader for the State-respondents.
39. This writ application has not been filed by the Respondent No.4 Bank, but by three of its members who can, at the best, be said to be the third parties, more particularly, with reference to the Respondent No.4 Bank on one hand and Respondents Nos. 2 and 3 being the State Page 30 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT Authorities responsible for the conduct of election in question on the other.
40. In view of the aforesaid, prima facie, it could be said that this writ application is not maintainable as no legal right or any fundamental rights of the writ applicants could be said to have been infringed or violated by the respondent authorities in any manner. We are, prima facie, of the view that the writ applicants, being the third parties, have no locus standi to file the present writ application, seeking directions against the respondent authorities to hold the election.
41. The Respondent No.4 Bank is a specified society governed by the Act and its elections are held under the Gujarat Specified Cooperative Societies Elections to Committee Rules, 1982 (the Rules for short). There is a separate mode of conducting election wherein, the power of conducting election of the Managing Committee of the Respondent No.4-Bank is conferred upon the Collector, i.e. to the respondent No.2 herein. However, before any action could be taken by the Respondent No.2, i.e., the Collector in furtherance of declaration of election, it is incumbent on the part of the Respondent No.4-Bank to follow, in particular, the procedure set out in the Rule 3A and Rule 4 respectively of the Rules relating to the delimitation of the constituencies and preparation of the voters list for the purpose of election.
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42. The term of the committee came to an end on 28th April, 2020 and as per Section 145C of the Gujarat Co-operative Societies Act, 1961 ('the Act' for short) the election is required to be held one month prior thereto i.e. 28th March, 2020. After completing the formalities as prescribed under Rule 3A and Rule 4 respectively of the Rules, the Respondent No. 4 Bank is obliged to forward the proposal for election to the District Registrar and the Collector respectively for conducting the election. However, in view of the time period provided under Rule 6(2), Rule 6(4) read with Rule 16 of the Rules the said proposal is required to be sent atleast 60 days prior to the date on which the election becomes due, i.e, on or before 28th January, 2020 and the same indisputably has not been done in the present case. If the Respondent No. 4 Bank was serious enough to hold the election in time, they could have forwarded the said proposal within the aforesaid time limit and the election could have then be completed, any time before 28th March, 2020. Even if one considers that owing to the Lockdown. the term of the Committee which was originally to expire on 28th April, 2020 has been extended till 31st July, 2020 vide the State Government's notification dated 24th April, 2020, then in that case, the Society which was required to forward the proposal atleast 60 days before the date of election, has sent the same very recently vide letter dated 22nd July, 2020 (produced at Annexure-R3 at pg. 71 of the Affidavit-in-Reply), and the same was received Page 32 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT by the office of the District Registrar on 23rd July, 2020. In view thereof, the Respondent No. 4 Bank could be said to have failed to act in compliance of the provisions of Rule 3A and Rule 4 respectively within time.
43. The State authorities are only concerned with the receipt of the election proposal after the finalization of the list of constituencies and the voters at the end of the Respondent No. 4 Bank. which was received for the first time on 23rd July, 2020. The machinery for conducting the election sets in motion only after the election proposal is received atleast 60 days before the date of election. Therefore, it was the bounden duty of the Respondent No.4 Bank to complete the process within the time bound manner, which has not been done in the present case.
44. It will be worthwhile to refer to the erstwhile as well as the existing provisions of Section 74D of the Act. which deal with the appointment of the custodian in certain eventualities. Along with this, the provisions of Section 74C(2)(iv) of the Act also deserves to be taken note of:
Erstwhile provisions of Section 74D of the Act "74-D. Appointment of custodian in certain circumstances:-
(1) Where In respect of any society Including a society existing Immediately before the commencement of the Gujarat Cooperative Societies (Amendment) Ordinance, 1982 (1 of 1982) a new committee of management is, for Page 33 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT any reason whatsoever, not elected before the expiry of the term of office of members of a committee of management of such society (not being a committee referred to m Section 80-A or having been elected not functioning the Registrar may by an order in writing, appoint a person or a committee of persons to be the custodian of the society until a new committee of management is elected or as the case may be, starts functioning.
(1-A) The Registrar shall hold election of such society within a period of two months and the Committee shall be constituted before the expiration of that period.
(2) The custodian so appointed shall. subject to the control of the Registrar and to such Instructions as he may from time to time give, have powers to exercise all or any of the functions of the committee. and take all such actions as may be required in the interest of the society.
(3) All acts done or purported to be done by the custodian during the period when the affairs of the society are carried on by such custodian. shall be binding on the new committee of management."
Existing provisions of Section 74D of the Act with effect from 10.04.2015 "74D. Appointment of Custodian in certain circumstances.
(1) Where in respect of any society including a society existing immediately before the commencement of the Gujarat Cooperative Societies (Amendment) Act. 2015 (Guj.12 of 2015), a new committee of management is. for any reason whatsoever, not elected before the expiry of the term of office of members of a committee of Management of such society or having been elected not functioning within a period of three months (not being a committee referred to in section 80A). except for the reason of order of the competent court due to which Page 34 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT such election could not be held or the management committee could not not start functioning, the registrar shall by an order in writing appoint a person or a committee of persons to the Custodian of the society for a period of one year or until a new committee of management is elected or. as the case may be, starts functioning.
(2) The Custodian shall arrange to hold election of such society within a period of one year and the Committee shall be constituted before the expiration of that period.
(3) The Custodian so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have powers to exercise all or any of the functions of the committee and take all such actions as may be required in the Interest of the society.
(4) All acts done or purported to be done by the Custodian during the period when the affairs of the society are carried on by such Custodian, shall be binding on the new committee of management."
Provisions of Section 74C of the Act.
(iv) The elected members of the managing committee and its office bearers shall cease to hold the office on the date of expiry of their term...."
45. From the aforesaid provisions, it is discernible that the appointment of the custodian in the erstwhile provisions was at the discretion of the Registrar, whereas, under the existing provisions with effect from 10th April, 2015, a duty has been cast upon the Registrar to appoint the custodian, in two eventualities. First, where a new committee of management is, for any reason whatsoever, not elected before the expiry of the term of office of the members of a Page 35 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT committee of management and secondly, the members of the committee though having been elected, could not start functioning within a period of three months. Further, there is a mandate of the legislature that the elected members cannot continue beyond their term and would cease to hold their office on the expiry of their term.
46. In the aforesaid context, we may refer to a decision of a learned Single Judge of this Court in the case of Banaskantha District Cooperative Milk Production Union Ltd vs. State of Gujarat rendered in the Special Civil Application No.14948 of 2015, decided on 3rd November, 2015, more particularly, paras-3 and 27 respectively therein;
'3.The petitioner of the first petition is specified society. The first petition is preferred initially with the prayers seeking direction to draw Schedule for election of the petitioner Union. However, pending the petition, order dated 21.9.2015 for appointment of custodian in exercise of the powers under Section 74-D of the Gujarat Co- operative Societies Act, 1961 ('the Act') was issued and based on such order, custodian took charge of the petitioner Union. Therefore, second petition is filed by the members of the managing committee of the society challenging the order appointing the custodian. In view of such development, learned advocate Mr. P.S. Champaneri declared before the Court that since the order appointing custodian is challenged by the petitioners of the second petition, first petition be restricted to the original prayers made in the petition that is to direct the concerned respondents to draw Schedule of every stages for election of the petitioner Union.
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27. Reading Section 74-D with Section 74-C(2) of the Act, what emerges is that since the elected members would cease to hold their office on expiry of the term, on non-availability of newly elected committee or if available but non-functioning, the Registrar will be required to appoint custodian. Therefore, even if there are lapses on the part of the statutory authorities to hold election before expiry of the term of the existing elected body, such would not be a ground for the Registrar not to appoint the custodian and if in this context, phrase "for any reason whatsoever" employed in Section 74-D are seen, the Registrar is not concerned with the reason for not holding election for the new committee. Mr. Thakore pointed out that much before expiry of the term of the elected members, process of holding election process had begun and even the stage for finalising voter list was over on 7.9.2015 leaving sufficient time of at least more than 10 days before expiry of the term of the elected body to take further steps for holding election however with clear intention to appoint custodian, the term was allowed to expire and even now as per the affidavit, further four months time is sought by the concerned authorities to complete the process of election. Mr. Thakore submitted that such conduct on the part of the statutory authorities would depict that in the facts of the case, powers under Section 74-D are abused just to oust the elected members and not to permit the society to function through its members. However, such lapses either deliberate or otherwise for not holding election within a reasonable time could be considered for issuing necessary directions to hold election within the specified time limit but, the same cannot be considered to hold that appointment of the custodian under Section 74-D of the Act is illegal. "
47. In view of the above referred provisions of Section 145C of the Act read with Rule 6(2), Rule 6(a) and Rule 16 respectively of the Rules, the respondent No.4-Bank could be said to be statutorily obliged to complete the process of Page 37 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT finalization of the list of the constituencies and the voters list in time bound manner which, indisputably, has not been done in the present case. In such circumstances, in accordance with the provisions of Section 74C(2)(iv) read with Section 74D of the Act, the Registrar has to appoint the custodian as the elected members of the Managing Committee of the Respondent No.4-Bank and its office bearers would cease to hold the office on the day of expiry of their term, i.e,. 31st July, 2020.
48. Mr. Trivedi, the learned Advocate General submitted that the appointment of the custodian would be in the overall interest of the respondent No.4-Bank, its members and the public at large.
49. However, in the peculiar facts and circumstances of the case, as discussed above, we are of the view that the custodian may not be appointed and the present dispensation of managing the affairs of the Bank should continue.
50. We dispose of the Special Civil Application No.22742 of 2019 with the following directions;
(I) The election of the respondent Bank shall be held within a period of four months as Mr. Kamal Trivedi, the learned Advocate General has made a statement that the elections will be held within three months, still, we are Page 38 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021 C/SCA/23321/2019 JUDGMENT granting four months' time.
(II) Till the fresh Managing Committee is elected, the present dispensation of managing the affairs of the bank would continue, however, with a rider that from 1st August, 2020 onwards, no policy decision shall be taken by the present Managing Committee, however, the day to day affairs would be managed. In case of any situation arising of some policy decision to be taken, then the same would be after the due approval of the Registrar of the Co-operative Societies.
51. In view of the order passed in the main matter, the civil application for joining party also does not survive and is disposed of accordingly.
(VIKRAM NATH, CJ) (J. B. PARDIWALA, J) Vahid Page 39 of 39 Downloaded on : Wed Feb 10 11:52:13 IST 2021