Gujarat High Court
The Visnagar Taluka Co-Operative ... vs Pratik Upadhyay, District Registrar on 5 August, 2020
Equivalent citations: AIRONLINE 2020 GUJ 611
Author: Biren Vaishnav
Bench: Biren Vaishnav
C/SCA/7321/2020 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7321 of 2020
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 7321 of 2020
With
R/SPECIAL CIVIL APPLICATION NO. 7461 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV Sd/-
============================================================
1 Whether Reporters of Local Papers may be allowed to see the Yes judgment ?
2 To be referred to the Reporter or not ? Yes 3 Whether their Lordships wish to see the fair copy of the No judgment ?
4 Whether this case involves a substantial question of law as to No the interpretation of the Constitution of India or any order made thereunder ?
============================================================ THE VISNAGAR TALUKA CO-OPERATIVE PURCHASE AND SELLS UNION LTD.
Versus PRATIK UPADHYAY, DISTRICT REGISTRAR ============================================================ Appearance:
MR. PRAKASH JANI, SR. COUNSEL with MR SHIVANG P JANI(8285) for the Petitioner(s) No. 1,2 for the Respondent(s) No. 6,7 MR. KAMAL TRIVEDI, AG WITH MS. MANISHA LAVKUMAR SHAH, GP for the Respondent(s) No. 1,2,3,4,5,8 ============================================================ CORAM: HONOURABLE MR. JUSTICE BIREN VAISHNAV Date : 05/08/2020 COMMON CAV JUDGMENT . Rule returnable forthwith. Learned advocates waives service of notice of rule for the concerned respondents.
With the consent of the learned advocates appearing for Page 1 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT the respective parties, the matters were taken up for final hearing on 23.7.2020.
1. Both these petitions are filed by Visnagar Taluka Cooperative Purchase and Sale Union Limited. SCA No.7461/2020 has been filed with a prayer to quash and set aside the order dated 29-1-2020 passed under the provision of Sec.84(5) of the Cooperative Societies Act, 1961 by the Joint Registrar and the order dated 14.5.2020 passed u/S.155 of the Act in exercise of powers under Revision by the respondent No.2 confirming the order dated 29.1.2020. A further prayer has been made to quash and set aside the re-audit report dated 19.6.2020 of the authorized auditor.
2. SCA No.7321/2020 has been filed with a prayer to quash and set aside the order dated 22.5.2020 passed u/s. 83(1) of the Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as `the Act'). The order dated 22.5.2020 was passed by the District Registrar authorising one Shri K.P. Limbachia to apply before the District Magistrate to seize and take into possession the records of the petitioner Page 2 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT society. The order dated 22.5.2020 passed in SCA No.7321/2020 is challenged consequential to the orders dated 21.9.2020 and 14.5.2020 which are subject matter of challenge is SCA No.7461/2020.
3. Facts in brief arising to the challenge of the orders in both these petitions are common and are therefore in short reproduced as under:
* On 23.1.2020 respondent Nos.6 to 13 who were members of Valam Khedut Seva Sahakari Mandli and the Mandli which was a primary member of the petitioner society, made an application to the Joint Registrar. In the application made to the joint registrar. it was the case of the respondent No.6 to 13 that several irregularities existed in audit memos for the period of financial years 2015-16 to 2018-19 issued by the Visnagar Taluka Cooperative Purchase and Sale Union Limited. It was the case of the respondent Nos.6 to 13 that despite the irregularities in the audit memos no action was taken and, therefore the account of the petitioner society ought Page 3 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT to be re-audited. 13 serious irregularities were enlisted in their application made to the Joint Registrar. This application was made in accordance to the provisions of Section 84(5) of the Act.
4. On such an application being made, the respondent No.4 Joint Registrar called upon the respondents to remain present on 11.2.2020 to make their stand good. The applicants - respondent Nos.6 to 13 instead of going to the authority on 11.2.2020 approached the respondent No.4 on 28.1.2020 requesting that since they were in Ahmedabad they may be heard on that date. The Joint Registrar permitted them to appear and make good their case which requires, according to the applicant, re-audit of the society. On the application dated 28.1.2020, the respondent No.4 passed an order u/S.84(5) of the Act allowing the application made by the respondent Nos.6 to 13 for re-audit of the accounts of the petitioner society for 4 years from 2015-16 to 2018-19. He appointed one Shri K.D. Turi, the respondent No.5 as the auditor to carry out the said audit.Page 4 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
* Aggrieved by the order dated 29.1.2020. the petitioners approached the State by way of filing a revision application No.20/2020 on 12.2.2020. * On 18.2.2020, the petitioners also simultaneously filed a writ petition being SCA No.4764/2020 challenging the order of 29.1.2020. This Court on 20.2.2020 disposed of the petition of the petitioner society observing that since the order which is under challenge in the said petition is also a subject matter of challenge before the revisional authority and the hearing of the revision was scheduled on 2.3.2020, the Court thought it fit to prepone the hearing of the revision application to 27.2.2020. In the meantime, the statement of the Government Pleader was recorded that the Joint Registrar shall not proceed ahead with the procedure of re-auditing the petitioner's accounts. The respondent Nos.6 to 13 preferred an application to be joined as parties to the revision on 24.2.2020 which was allowed on 2.3.2020. This again resulted in a petition being filed by the petitioners being SCA No.5785/2020 on Page 5 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT 3.3.2020. The petition was dismissed by an order dated 5.3.2020. However, while dismissing the petition on a request made by the petitioners, the revisional authority was directed not to pass any order till 13.3.2020 though in the interregnum the revisional authority had already heard the revision. * In a challenge in the LPA, the LPA was dismissed on 13.3.2020. However, the interim stay of not passing the order by the revisional authority was extended to 7.4.2020. On an application being made by the petitioner, the interim relief restraining the revisional authority to pass an order was extended to 6.5.2020 on which date, the SLP before the Supreme Court was also dismissed.
5. Once the embargo on passing of an order was lifted, the revisional authority passed an order on 14.5.2020 dismissing the revision. These orders i.e. order dated 29.1.2020 so confirmed by the revisional authority by an order dated 14.5.2020 are subject matter of a challenge in No.7461/2020.
Page 6 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
6. SCA No.7461/2020 challenging the order of revision, according to the petitioners was filed on 21.5.2020. However, due to lock down the same could not be circulated and the petition could only be heard for the first time on 16.6.2020, though filed on 21.5.2020.
7. Certain events unfolded in the interregnum which had constrained the petitioners to approach this Court by filing SCA No.7321/2020 wherein the order seizing the records in exercise of the powers of provisions u/S.83(1) of the Act are under challenge.
8. It appears that after the order was passed on 29.1.2020 by the Joint Registrar under the provisions of Section 84(5) of the Act ordering re-audit and appointing Shri Turi as an authorized officer to carry out the re-audit, the authorized auditor addressed communication on 5.2.2020, 11.2.2020 and on 14.2.2020 asking the petitioner that the records be handed over so that re-audit can be carried out. It is the case of the petitioner that as soon as the order dated Page 7 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT 29.1.2020 was passed u/S.84(5) of the Act, a representation was made on 3.2.2020 requesting the authorities to reconsider the order. Similarly a letter was written to the authorities on 10.2.2020 requesting the authorized officer to stay his hands and not insist for records in view of the lock-down and the COVID. It was also requested that a revision application is filed and, therefore, a legal recourse was sought against the order dated 29.1.2020 and, therefore, the respondent No.4 may not insist for the records in order to enforce and execute the order of 29.1.2020.
9. On 19.5.2020, the authorized auditor respondent No.4 again visited the office of the petitioner's society so as to commence re-audit. A letter was addressed on 19.5.2020 by the petitioner society to the Auditor once again requesting that in view of the purchase undergoing as directed by the High Court and since the sister in law of the Chairman had passed away and the manager was on leave, the authority may stay its hands for a period of 15 days and not insist for taking over the records. Page 8 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
10. It appears that on 22.5.2020, the District Registrar passed an order u/S.83(1) of the Act authorizing one Shri K.P. Limbachia to apply before the District Magistrate to seize and take possession of the records. On 26.5.2020, the Mamlatdar, Visnagar on the application of Shri Limbachia authorized the Police Inspector, Visnagar to visit the premises of the petitioner Union and seize the records. This gave rise to SCA No.7321/2020 which was filed on 3.6.2020 and came up for hearing on 8.6.2020 where a statement was made on behalf of the Government that the exercise of re-audit was over. This was in the circumstances that after the record was seized pursuant to the order u/Sec.83(1) of the Act on 22.5.2020 and the Executive Magistrate passed an order on 26.5.2020 authorizing the police officer to seize the accounts and the records, the records were seized on 26.5.2020 at night under the provisions of Sec. 83(2) of the Act. The authorized officer Shri Turi - respondent No.5 started the re-audit on 27.5.2020 and on 8th of June, the re-audit was completed. It was under these circumstances the petition challenging the order u/S.83(1) came up for hearing. The government presented a fait accompli saying that the re- Page 9 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT audit was over.
11. Re-audit report was submitted on 19.6.2020 by which the petitioner society was awarded audit classification "C" and the records were returned on the same date. Pending these proceedings, I am informed that on 20.6.2020, a show cause notice u/S.81 of the Act has been issued to the petitioner society, however, the State has stayed it hands in view of the pendency of these petitions before this Court.
12. Mr.Prakash Jani, learned Sr. Advocate appearing with Mr.Shivang Jani, learned advocate for the petitioners would submit that petition being SCA No.7321/2020 was filed challenging the order dated 22.5.2020 by which in exercise of powers u/S.83(1) of the Act, the records of the society was seized by the respondents.
13. Mr.Jani made the following submissions in context of SCA No.7321/2020:
* Mr. Jani would submit that the exercise of powers u/ s. 83(1) of the Act by the respondents and thereby Page 10 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT the action to enter the petitioner cooperative society's premises and take over custody and possession of the records after seizing the same, showed complete lack of transparency and independence on the part of the authorities. It exhibited an arbitrary and a capricious exercise of power inasmuch as after the order dated 22.5.2020, a consequential order was passed on 26.5.2020 by which the Police Inspector of the Visnagar police station alongwith 15 police personnel came to the office of the petitioner's cooperative society and despite having made requests earlier, they called the key maker, broke open the locks and the entire records were shifted on 26.5.2020 at night.
* Mr.Jani would submit that there is no provision under the Gujarat Cooperative Societies Act to seize the records and take over their possession. * Mr.Jani would further submit that the order of the District Registrar as is evident on reading thereof has been passed in exercise of powers u/s. 83(1) of the Page 11 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT Act and provisions of law is referred which is not on the statute book. In support of his submission that the exercise of the powers by the District Registrar was de hors the provisions of Sec.83(1) of the Act reliance is placed on the decision of the Division Bench of this Court in the case of Amreli Cooperative Sale and Purchase Union Ltd. v. State of the Gujarat reported in 1984 (2) GLR 1244. Mr.Jani would submit that reliance was placed on ingredients of the Section which were otherwise held to be ultra vires inasmuch as the authorities had relied on the ingredients by which the authorities have come to the conclusion that the petitioner Union would suppress and had unreasonably refused to hand over the records which was struck down by the Division Bench as being unreasonable. * Mr.Jani would further submit that the order of the District Registrar was without jurisdiction because he has no power to take over the custody of the records and the order therefore was without authority of law.
Page 12 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT * Certain factual submissions regarding the dates were made to show and exhibit the arbitrariness and the cavalier fashion in which the order u/s. 83(1) was passed by the authorities. Mr.Jani referred to certain dates and made his submissions to show how the authorities had acted in undue haste and tried to project a fate accompli. Mr.Jani would submit that the order was passed by the revisional authorities on 29.1.2020. The authorities namely the respondent No.5 Shri Turi visited the premises of the petitioner union on 5.2.2020 and asked for the records on the ground that since the authorities by an order of 29.1.2020 had ordered re-audit, the records must be produced for re-audit. By communication dated 6.2.2020, again the respondent No.4 Shri Turi informed the petitioner that he would again visit on 11.2.2020 at 1100 hours and the records must be handed over. It is the case of the petitioner that on 10.2.2020, a representation was made to the officer concerned that looking to the circumstances as the Chairman's sister in law had died, that there was a Page 13 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT situation of pandemic and that the manager was on leave, the authorities may stay their hands for a period of two weeks. It was also requested that the legal option to challenge the order dated 29.1.2020 was being explored and, therefore, the authorities may stay their hands for the time being.
* Mr.Jani would then submit that a revision application was filed on 12.2.2020 with an application for stay. The revision was pending which was finally heard but the orders were not passed in view of the order dated 2.3.2020 by which the respondent Nos.6 to 13 were joined as party was under challenge before the High Court. In the challenge, the petitioners failed upto the Supreme Court. However, before the learned Single Judge and in the Division Bench of the High Court, in the challenge to those orders by which the respondent Nos.6 to 13 were joined as parties and to the petition challenging in parallel the order dated 29.1.2020, the learned Government Pleader had made a statement that respondent shall not carry out the re-audit and Page 14 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT that the revisional order shall not be enforced. That order was in operation till 6th of May, 2020. * The revisional authority dismissed the petition on 14.5.2020. The petitioners filed a petition on 21.5.2020 being SCA No.7461/2020 which could not be circulated due to lock down. It was ultimately circulated for hearing on 16.6.2020. In the meantime, on 19.5.2020 when respondent No.4 again visited the office, he was informed that a petition was being filed and the Government Pleader's office was informed that the authorities may not exercise and precipitate the issue. * Mr.Jani would then submit that despite this the order dated 22.5.2020 was passed u/S.83(1) of the Act. It was a Friday. The following three days i.e. 23rd, 24th and 25th May, 2020 were holidays. Tuesday morning i.e. on 26.5.2020, the Mamltadar authorized the police officer who entered the premises on an application by Mr.Limbachia, the records were seized at night. Ultimately, when the petition challenging Page 15 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT these orders was moved on 8.6.2020 the government made a statement that pursuant to the seizure of records the re-audit was completed on 8.6.2020. These circumstances show the highhandedness of the government inasmuch as being aware of the pending proceedings in a challenge to the order u/s. 84 of the Act, the machinery due to the lock down and inability of the petitioner to share and circulate the petition seized the records taking advantage of the situation, carried out re-audit and presented a fait accompli.
* The other submission of Mr.Jani was that before passing an order dated 22.5.2020, no opportunity of hearing was given to the petitioner and therefore the order violated the principles of natural justice. * No ingredients of Sec.83 existed inasmuch as there was no occasion for the respondents to come to the conclusion that petitioner was going to suppress, tamper or destroy the records. It was only unfortunate that during the filing of the revision Page 16 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT application till the date on which the Supreme Court dismissed the petition, confirming the order joining the respondent Nos.6 to 13 as parties, though there was no stay of the proceedings, on 20.2.2020 before this Court in a petition where the order of 29.1.2020 was challenged, a statement was made by the Government Pleader that they will not re-audit pending the revision application. In a subsequent proceeding before this Court, the revisional authorities were restrained from passing an order which time was extended till 6.5.2020 and, therefore, it cannot be presumed that repeated attempts were made by the petitioner to stall handing over of the records with an intention to destroy or tamper with them. The action is therefore clearly malafide, intemperate and, therefore deserves to be quashed and set aside.
* In the challenge to the authority of Shri Turi as being incompetent to re-audit the account or even visit the office on 19.5.2020 pursuant to the order in revision on 14.5.2020, Mr.Jani would make his submission in Page 17 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT context of the order passed u/S.84 of the Act and, therefore, the same be dealt with at that stage.
14. Mr. Kamal Trivedi, learned Advocate General has appeared with Ms. Manisha Lavkumar Shah, learned Government Pleader and has in course of arguments vis-a-vis SCA No.7321/2020 made the following submissions. * Mr.Kamal Trivedi, learned Advocate General read before this Court the provisions of Sec.83 of the Act. Reading Sec.83 of the Act, Mr.Trivedi submitted that not all the circumstances or ingredients should exist at a time so as to invoke the powers u/S.83. Each of the circumstance is an independent circumstance in order to exercise the powers u/s. 83 of the Act. He further submitted that where the Registrar is satisfied that the books or record of the society are either likely to be suppressed or to be tampered with or destroyed or the funds and property of a society are likely to be misappropriated or misapplied or the officer or the person in possession unreasonably refuses to give possession of records, the Registrar Page 18 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT may issue directions directing the person duly authorized to seize and take possession of the records. According to the learned Advocate General, therefore, in the present circumstances when the order dated 22.5.2020 has been read, what is evident thereof is that the Registrar has come to a satisfaction that either the record will be tampered with or destroyed and therefore the exercise of powers u/s. 83(1) of the Act was clearly warranted and, therefore, there was no illegality in passing such order and, thereafter authorising Mr.Limbachia on the same date and the consequential order of 26.5.2020 by which the Police entered the premises and seized the records.
* Mr.Kamal Trivedi, learned Advocate General would then rebut the submission of Senior Advocate Shri Jani in context of the exercise of the powers u/S.83 of the Act as being contrary to and de hors the section as it now exists. He would submit that in fact if the judgment especially para No.82 in the case of Amreli Cooperative Sale and Purchase Union Page 19 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT Ltd. (Supra) is considered, what is struck down by the Division Bench is the ingredients of unreasonable refusal and likely suppression. These ingredients, when the impugned order of 22.5.2020 are read have not been pressed into service, what the authority has considered is that there is an apprehension that the record will be destroyed and tampered with. In the submission of Mr.Trivedi therefore, the contention of Mr.Jani that the exercise of the powers was de hors the provision is misconceived.
* Mr.Kamal Trivedi, learned Advocate General would further submit that the exercise of powers u/s. 83(1) of the Act cannot be said to be without jurisdiction as reiterated. When a conclusion was arrived at that the record will be tampered with or destroyed, there was no reason why the authorities could not have passed an order under Sec.83(1) of the Act.
* On the question whether the petitioner ought to have been given an opportunity of hearing before passing an order of seizure, Mr.Kamal Trivedi, learned Page 20 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT Advocate General has justified the action of not giving an opportunity of hearing to the petitioner. According to Mr.Kamal Trivedi, learned Advocate General, Sec.83(1) does not contemplate any sort of hearing to be given prior to applying to the Executive Magistrate before seizing and taking the possession of the records. He would further submit that in exceptional circumstances these powers are exercised and, therefore, once there is an apprehension that the society would tamper or destroy the record, giving an opportunity of hearing would frustrate the very object of the Section. * Mr.Kamal Trivedi, learned Advocate General invited attention of this Court to the affidavit-in-reply filed by one Mr. Sunil P. Chaudhary and submitted that once the order directing re-audit was passed on 29.1.2020, it was the duty of the petitioner to hand over the records to the respondent No.4 which he did not. It was the submission of Mr.Kamal Trivedi, learned Advocate General that before the interim relief was granted, on 20.2.2020, by this Court where Page 21 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT a statement was made by the Government Pleader that they will not undertake the audit procedure the authorized officer went to the petitioner on four different occasions i.e. 5.2.2020, 11.2.2020, 14.2.2020 and 20.2.2020, however, the records were not handed over by the petitioner. Even when the interim relief stood vacated and the revision was finally dismissed on 14.5.2020 and when the authorized officer went again on 19.5.2020, he had to return without records and the grounds so advanced by the petitioner that the Society could not hand over records due to the pandemic and that the manager was on leave and also a bereavement in the family of the Chairman, reasonably gave apprehension to the respondents that there were exceptional circumstances and contingencies that arose which gave an occasion to believe that the petitioner society would tamper or destroy the records and, therefore, there was need to exercise the power u/s. 83(1) of the Act.
* Mr.Kamal Trivedi, learned Advocate General would Page 22 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT further submit that merely because petition was filed challenging the order of re-audit and the order challenging confirming of that order on 14.5.2020 and the petition was filed which was not circulated, mere filing of such petition would not operate as a stay and, therefore, there was no illegality in the authorities having passed an order u/s. 83(1) of the Act. Mr.Kamal Trivedi, learned Advocate General in support of his submissions in context of the same would rely on a decision in the case of Madan Kumar Singh v. District Magistrate, Sultanpur, reported in 2009(9) SCC 14. He would submit that in this decision, when para 14 is read, that it is tried to say that mere filing of a petition would by itself not operate as a stay until a specific prayer in this regard is made and the orders were passed. He also would reply on a decision of the Supreme Court in the case of HG Ranjan Gaud v. State Trending Corporation of India Ltd. reported in 2012(1) SCC 297. The attention of the Court was invited to paras 5, 6 and 14 thereof. In that case, it appears on reading para 6 that the Supreme court was considering a question Page 23 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT where the matter was heard and reserved for judgment and when Court found that the explanation that there was no interim order granted and therefore the authorities could proceed for and the opinion of the High Court that it amounted to interference with due process of law was interfered with and the Supreme Court found that since the order of the learned Single Judge was not stayed, mere filing of appeal would not operate as a stay and, therefore, looking to the nature of dates and events that unfolded following the order of 29.1.2020, there was a justifiable reason for the authorities to pass an order u/s. 83(1) of the Act seizing the records and taking them over on the night of 26.5.2020.
15. Before I consider the merits of the order u/s. 84 of the Act with regard to the powers of the State to pass an order ordering re-audit and without even considering the merits of that order while judging the conduct of the State in passing the order of 22.5.2020, it will be relevant to set out certain dates. It is evident that the chronology of dates Page 24 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT were earlier set out, in the facts of this case I consciously am repeating the dates, in order to adjudicate upon the legality of the order u/S,83(1) of the Act, the dates are set out again as under. [A] An order of re-audit was passed on 29.1.2020 on an application made by the respondent Nos.6 to 13. [B] On such order being passed, it appears that on 3.2.2020, the petitioner society made a request to the Joint Registrar. Reading of the letter dated 3.2.2020 which is a part of the paper book of SCA No.7461/2020 would indicate that the society stated that the order of re-audit has been passed on 29.1.2020; that the order according to the Society was not proper, that it was unjustified and it was requested that the order of re-audit be reconsidered and the same be cancelled. It appears that the same was not taken into consideration, was not accepted and on 5.2.2020, the respondent No.4 addressed a letter to the petitioner stating that the respondent No.4 has been appointed as a Special Auditor and, Page 25 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT therefore, the Society should present its records for re-audit. On that the response of the society was that the Manager was on leave, and, therefore, a request was made that as and when he returns from the leave, the records will be produced.
[C] This did not deter the respondent No.4 and he again on 6.2.2020 responded by saying that he would want the records at 11.00 am on 11.2.2020 and he would visit the premises of the society and, therefore, all the records be kept present for the purpose of re-audit. [D] On 11.2.2020, it appears again that the society turned him back.
[E] He addressed a letter on 15.2.2020 reiterating the unfolding of events saying that he had visited on 5.2.2020, he was turned back.
[F] By letter dated 6.2.2020, he informed the petitioner that he would visit on 11th which was also turned back.
Page 26 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT [G] And now by this letter of 15th, he informed the petitioner that though the order was passed on 29.1.2020 since there is no stay that the petitioner society has obtained in the revision so filed, he would want the petitioner society to come forth and hand over the records for re-audit.
16. It is in this context that the submissions of the learned Advocate General were that on four occasions i.e. on 5.2.2020, 11.2.2020, 14.2.2020 and 20.2.2020, the respondent No.4 was turned away and the documents for carrying out re-audit were not handed over on one pretext or the other.
17. Let us examine the conduct of the petitioner vis-a-vis the respondents in the circumstances that unfolded thereafter.
18. Admittedly, the order of 29.1.2020 was subject matter of a revision that the petitioner had filed on 12.2.2020. No motive can be attributed if a parallel litigation is moved in order to explore a possibility by filing a petition challenging Page 27 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT the same order by way of SCA No.4764/2020. It will be worthwhile to reproduce the order passed in SCA No.4764/2020 by this Court on 20.2.2020. The order reads as under:
"[1] This petition is filed challenging the order dated 29.01.2020 at Annexure-B. From the pleadings, it appears that the said order is also subject matter of challenge before the revisional authority being Revision Application No.20 of 2020 under Section 155 of the Co-operative Societies Act, 1961.
[2] On a broad consensus, it is agreed that the Revision Application which is now scheduled to be heard on 02.03.2020 will be preponed to be heard on 27.02.2020 and on that day, the revisional authority shall take into consideration all the contentions raised by parties concerned. All the parties concerned shall co-operate with the hearing before the revisional authority. In the meantime, statement is made on behalf of the learned Government Pleader that the auditor- respondent No.4 will not proceed ahead with the procedure of auditing of the petitioner union. The statement of the learned Government Pleader will continue to operate till the final decision of the Revision Application No.20 of 2020.
[3] With the aforesaid, the petition stands disposed of. Direct service is permitted."
19. The order was passed on a broad consensus. It was agreed that the revision application which was to be heard on 2.3.2020 be preponed to 27.2.2020 and in the meantime, Page 28 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT the auditor - respondent No.4 will NOT proceed ahead with the procedure of auditing the petitioner Union. The statement of the Government Pleader will continue to operate till the final decision of the Revision Application No. 20/2020. Obviously therefore, what was understood by the petitioner and in the opinion of this Court rightly so that the State had considered/agreed that it would stay its hands and not precipitate the action till the revision was heard in the Revision Application No.20/2020. The stand of the respondent No.4 in its communication dated 15.2.2020 belied this trust that the State Government projected to come forth before the High Court. Had the Government bonafide believed that they would not precipitate the crisis, it was open for the Government to seek an alternative guarantee from the petitioner when the Government Pleader made a statement that it will not go ahead with the re-audit. Suitable guarantees and / or undertakings could have been taken from the petitioner on a consensus and such observations could have been invited when the order was on a broad consensus before the High Court that the records will be kept in a safe custody and sealed so that the apprehension of the Page 29 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT Government that they would be tampered with or destroyed, were taken care of. That was not done. That statement was made on 20.2.2020 when, according to the learned Advocate General previous four attempts made by the authorities to extract records failed. Despite the repeated four visits that are highlighted to justify the order u/S.83(1) of the Act, a statement was made on behalf of the Government that they will not proceed further with the procedure of re-audit till the revision is finally heard.
20. The matter does not rest here. Albeit, after the revision was heard on the respondent Nos.6 to 13 being joined as parties, the petitioner did resort to filing a petition being SCA No.5786/2020. When the petition came up for hearing, the Court was told that the revision is heard. During the course of hearing the Court requested the Government Pleader to see that no orders are passed on the revision, till the petition is heard. The petition was heard on 5.3.2020 and was dismissed. In order that the petitioner could avail a remedy of appeal, the order dated 5.3.2020 recorded directing the revisional authority not to pass an order till the 13.3.2020.
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21. Aggrieved by the dismissing the Petition, the petitioner filed a Letters Patent Appeal on 9.3.2020 which was dismissed on 13.3.2020 but the stay against the order being passed by the revisional authority, was extended till 7.4.2020. It was subsequently extended till 6.5.2020.
22. On 6.5.2020, the SLP challenging the order of 5.3.2020, by which the learned Single Judge has confirmed order of the authorities joining the respondent Nos.6 to 13 was confirmed by the Supreme Court.
23. It is on 6.5.2020 that the embargo on the revisional authority in passing the order was lifted. Accordingly, the revisional authority passed an order on 14.5.2020
24. From the aforesaid dates and sequence of events, what is evident is that rightly or wrongly, the petitioner after the order passed on 29.1.2020 u/s.84 of the Act, was in one way or the other, in the process of legal redressal. A revision was filed on 12.2.2020 together with a stay application. The same was pending. Agreeing with the Page 31 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT submission of learned Advocate General that there was no stay on the application and in the revision on 12.2.2020 what the State lost sight of is that on instructions of the State, the Government Pleader on 20.2.2020 made a statement before this Court that they will not proceed with the procedure of audit till the revision is heard. The question that begs to be answered is that can it be said that at that stage, the authority had the vision that the records will be tampered with or destroyed. No such apprehension seems to have been expressed by the State and it was on this ground that possibly the Government Pleader on instructions made a statement that they will not proceed with re-audit. Rather than take securities in terms of an undertaking or safe custody of records in a separate security or in whatever manner that the State could have thought fit, nothing was done.
25. By subsequent orders passed in SCA No.5786/2020, the embargo to the revisional authority to pass an order continued till 6.5.2020. The revisional authority passed an order only on 14.5.2020. On 21.5.2020, as is evident from the records, a petition was filed challenging the order Page 32 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT passed u/s. 84 by which the revision was dismissed on 14.5.2020.
26. With greatest respect, the State Government tried to play smart taking advantage of the situation of lockdown when judicial notice can be taken of the fact that the litigants were having some difficulty in circulation of matters due to restricted functioning of courts and the Registry. It has come on record that the learned advocate for the petitioner has requested the Government Pleader's office that the crisis may not be precipitated as the petition was already filed on 21.5.2020 i.e. SCA No.7461/2020 challenging the original order u/s.84(5) by which the revision was dismissed. The State Government did not stay its hands. Just a day prior to filing of the petition on 19.5.2020, the respondent No.4 again sought to take over the records within four days and within two days thereafter on 22.5.2020, the respondent No.4 for unseemingly, unknown reasons comes to the conclusion that the petitioner will tamper or destroy the records. For 3 months or for over 4 months from 29.1.2020 to 14.5.2020 no such apprehension seems to have existed because had that Page 33 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT been so, the Government would not have agreed on 20.2.2020 before this Court that they will not carry out the procedure of the re-audit. Of-course, the Government can counter this by saying that, that statement was only made to see that re-audit is not carried out. But if that was a statement made in a faith that the parties would not precipitate a crisis, that was not actually so.
27. What also seemingly seems a decision taken in hot haste so as to present a fait accompli to this order, the order of 22.5.2020 was passed on Friday. Purely coincident it may sound that it was followed by three holidays i.e. Saturday, Sunday and Monday being a Eid Holiday. On Tuesday, the Police was authorized to enter the premises of the petitioner and the records were taken over on 26.5.2020 night.
28. On 8.6.2020, when the petition challenging these orders was moved, a statement was made by Government Pleader that for the records which were seized the re-audit was complete and the matter has become infructuous. Page 34 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
29. Please note that without delving into the legality of the order passed in exercise of powers u/S.84 of the Act, this Court is at pains to deprecate the conduct of the State in the manner in which the order u/s. 83(1) of the Act was passed.
30. From the unfolding events and dates which have been referred to extensively in detail, the powers u/s. 83(1) of the Act the authority to exercise such powers by the Officers concerned and the ingredients which authorized the authorities to exercise such powers are not in doubt. This Court has not examined whether the order in context of it's prerogative to pass such orders u/s. 83(1) but in the context of whether in the facts and circumstances of the case was in the present set of facts it could have been passed.
31. Submissions and counter submissions have been made that the exercise of powers of the respondent was de hors the provisions of Sec.83(1), that it was passed without following the principles of natural justice and the section that was reproduced was not in existence. To this Page 35 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT submission made by Mr.P.K. Jani, learned senior advocate, I do not agree. Reading of the judgment in Amreli Cooperative Sale and Purchase Union Ltd. (Supra), it becomes clear that what was struck down by this Court was different propositions of unreasonably refusing to give records or likely suppression. The power to take over and seize the records if the authorities had an apprehension that it is to be tampered with or destroyed can be exercised in given circumstances and the facts of the case. Even the proposition that the petitioner or a party needs to be heard while exercising powers u/s. 83(1) is a submission that is misconceived. I agree with the submission of the learned Advocate General that when there are contingencies provided under the Act which present the case where the State apprehends that the records will be tampered with or destroyed, these are exceptional circumstances and if the hearing is given as contended by the learned advocate for the petitioner, it would frustrate the object of such a provision. Sec. 83(1) therefore does not contemplate any sort of hearing to be given prior to applying before the Executive Magistrate for seizing possession of the records. Therefore, while agreeing Page 36 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT with the submission of the State that powers can be exercised in given set of facts and circumstances u/s. 83(1) of the Act for taking possession of the records, in the facts of the present case, the powers were clearly exercised in an arbitrary, capricious manner and the Court will not be wrong in saying that they were surreptitiously exercised undermining the process of the Court. This the Court is pained to say in view of the fact that the legal remedies that exist, the petitioner had a right to invoke. The petitioner did invoke, the stay may not have been granted while revision was filed on 12.2.2020 but the order of 20.2.2020 passed in SCA No.4764/2020 changed the rules of the game. The State was expected to act fairly having made a statement that they will not proceed with the procedure of re-audit. Albeit, the State would join an issue by contending that what was assured before the Court was that they will not proceed with the re-audit. It did not prevent them seizing the record, however, what followed subsequently when the revisional orders were stayed till 6.5.2020, the State ought to have acted fairly. That it did not is apparent from the undue haste in exercising powers u/s. 83(1) of the Act by the State in the Page 37 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT manner that it did.
32. Therefore, as far as SCA No.7321/2020 is concerned, the same is allowed with cost of Rs.1,00,000/-.Rule is made absolute in SCA No.7321/2020 with costs of Rs.1,00,000/- to be paid to the petitioner by the State accordingly.
33. Coming to SCA No. 7461/2020, as pointed out earlier the challenge is to the order dated 29.1.2020 passed by the respondent No.4 in exercise of powers u/s. 84(5) of the Act, 1961. That order was confirmed by the revisional authority by order dated 14.5.2020. Hence, the prayer to quash and set aside these orders. I need not reiterate the facts as the same have been set out in the earlier part of the order. While assailing the orders dated 29.1.2020 and 14.5.2020, Mr. P.K. Jani, learned senior counsel made the following submissions:
(a) Mr. Jani would submit that the petitioner co-
operative society has been graded with audit class A for the past five years. The impugned orders have Page 38 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT been passed in absence of any material before the authorities and have only been passed on the basis of an application made by the respondent Nos.6 to
13.
(b) Mr. Jani would further submit that the respondent Nos. 6 to 13 were never members of the petitioner's cooperative union and only with a view to tarnishing the image of the petitioner union, an application was made seeking re-audit.
(c) The other submission was that there is no reason why the petitioner's society should be made to undergo re-audit when there is no need for such audit. The same has been done for purposes other than legal. He would submit that in every annual general meeting u/s. 77(4) of the Act, the accounts were approved by the general body and for the past five consecutive years it has been so and, therefore, there is no reason why once the Joint Registrar has been satisfied continuously over the past five years, for any reason, suddenly to audit the accounts at the Page 39 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT behest of an application made by the respondent Nos.6 to 13. In addition to this, to the fact that the re-audit is malafide, Mr. Jani would submit that the elections to the society are due in August, 2020 and it is only with a view to see that the society suffers certain consequences that the application is made. Mr.Jani would submit that this is apparent from the fact that now a show cause notice u/s. 81 of the Act has been issued as to why there should not be supercession of the said society. It was only with this motive and end in view that the re-audit has been made a ground for superseding the society.
(d) Adding to these submissions, Mr. Jani would submit that from the pleadings and the factual averments it is made clear that when the application was made by the respondent Nos.6 to 13 on 23.1.2020, though the hearing was initially fixed on 11.2.2020, the same was preponed to 28.1.2020 merely because the respondent Nos.6 to 13 were at Ahmedabad. On the application so made, the petitioner was not given an opportunity of hearing especially when what was Page 40 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT sought by the respondent Nos.6 to 13 was re-audit of the petitioner's society's accounts. This made it more so important for the author of the order to hear the petitioner. There were no sufficient grounds made out in the application for re-audit.
(e) Mr. Jani would further submit that after the order was passed on 14.5.2020 dismissing the revision application, Mr.K.D. Turi, respondent No.5 visited the office of the petitioner. The exercise of asking for re-audit and the appointment of Shri Turi as a Special Auditor came to an end with effect from 1.4.2020 and, therefore, when the request was made by Shri Turi on 19.5.2020 he had ceased to be a Special Auditor. Only with a view to see that he gets the sanction of law, a notification dated 21.5.2020 retrospectively extending his appointment with effect from 1.4.2020 was issued. This speaks volumes of the extraneous consideration based on which the respondents are carrying out the audit / reaudit u/s. 84 of the Act.
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(f) Mr. Jani would further submit that the entire process of making an application by the respondents on 23.1.2020, they being joined as parties in the revision application, the revision being dismissed on 14.5.2020 and the fact that within 11 days of having confiscated the records that the audit of 4 years was completed shows the hot haste of which the entire exercise was carried out with a predetermined mindset for achieving an objective of superseding the society and the entire process is a formality which is being undergone exhibiting malafide and extraneous considerations.
(g) Mr.Jani would further submit that u/s. 85 of the Act even for rectification of defects or on comments of the audit report, 60 days are being given by the Auditor. By exercising powers u/s. 84(5) of the Act, completing the re-audit within 11 days for an audit report of over 4 financial years and then presenting the petitioner with a show cause notice on 20.6.2020 shows that rather than hastening to act, the respondents could have at-least resorted to Page 42 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT provisions of Sec.85 of the Act.
(h) Mr.Jani would further submit that the entire exercise would show that as per Sec. 27 of the Act only societies which are having an audit rating of A, B, C & D are entitled to vote. By virtue of this order of re- audit, the society's right to vote has been taken away.
(i) Rule 38 is violated inasmuch as, the appointment of the respondent No.5 Shri Turi is not in accordance with that rule.
(j) According to Mr.Jani, Rule 38(A) is also being violated inasmuch as the rules stipulates a fixed amount of fees that needs to be paid by the Societies, however, here only with a view to take a specified higher amount of fees that the respondent Nos.6 to 13 have been given the leeway to make an application and secure an order of re-audit from the respondents.
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(k) Mr. Jani, learned senior counsel has relied on the following decisions:
(1) Zoroastrian Cooperative Housing Society Ltd. v. District Registrar Cooperative Societies (Urban) and others reported in 2005(5) SCC 632, relevant paras 11 and 12.
(2) S.S. Rana v. Registrar, Cooperative Societies reported in 2011(6) SCC 634, relevant para No.12 (3) Thalappalam Ser Co-Op. Bank Ltd. & others v. State of Kerala and others reported in 2013(3) GLH 591, relevant para 51. (4) S.G. Jaisinghani v. Union of India reported in AIR 1967 SC 1427, relevant para 14.
(5) Maneka Gandhi v. Union of India reported in 1978(1) SCC 248 para 186), Delhi Transport Corporation Ltd. v. DTC Mazdoor Congress reported in AIR 1991 SC 101 relevant para 199. & Killol V. Shelat v.
Municipal Corporation of City of
Ahmedabad reported in 2009(1) GLH 13
relevant para 30.
(6) Tarlochan Dev Sharma v. State of Punjab
and Haryana reported in 2001(6) SCC 260, relevant para No.16.
(7) State of Madhya Pradesh v. Sanjay Nagayach reported in 2013(7) SCC 25 relevant para 28 to 30, 32, 33, 35) (8) Prakashsinh Hthisinh Udavat v. State of Gujarat reported in 2020(1) GLH 504, relevant para 16. (9) Rajendra N. Shah v. Union of India reported in 2013(2) GLR 1968. Page 44 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
Mr.Jani would therefore submit that the order passed in revision, so confirming the order dated 29.1.2020 is bad and, therefore must be quashed and set aside.
34. Mr.Kamal Trivedi, learned Advocate General has appeared with Ms.Manisha Lavkumar Shah, learned Government Pleader for the State in SCA No.7461/2020 and has made the following submissions:
(A) On the submission made by Mr. P.K. Jani that the order is in violation of principles of natural justice and, therefore, an opportunity of hearing ought to be given, learned Advocate General would submit, relying on affidavit in reply filed in the matter that after the receipt of application dated 23.1.2020 notices were issued to the respondent Nos.6 to 13.
Hearing was fixed on 11.2.2020, on a request of preponement of date, it was preponed to 20.1.2020. In accordance with Sec. 84(5) of the Act, a re-audit is made when it is thought "necessary" and Page 45 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT "expedient." These words have a wide amplitude. The order directing re-audit is not a quasi judicial or an adjudicatory order but it is only an administrative order and, therefore, there needs to be no opportunity of hearing to be granted to the person, society concerned.
(B) Mr.Kamal Trivedi, learned Advocate General relies on the following decisions in support of his submission that order of re-audit is merely an administrative order and no opportunity of hearing be given. He relied on a decision of the Bombay High Court in Civil Writ Petition No.8142/2018 dated 11.12.2019 in the case of Prabhadevi Himgiri Cooperative Housing Society Limited v. State of Maharashtra and others. He also relied on a decision of the Division Bench of this Court rendered in LPA No.555/2017 dated 28.3.2018 in the case of Mehsana District Cooperative Milk Producers Union Limited v. State of Gujarat, particularly para 17 thereof. He also placed reliance on a decision of the Supreme Court in the case of Union of India and Page 46 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT others v. Indian Jute Mills Association and others reported in 2005(10) SCC 69.
(C) Mr.Kamal Trivedi, learned Advocate General would submit that merely because the society was consistently classified in class A of the audit, can be no ground on which a re-audit cannot be made. Looking to the application dated 23.1.2020, Mr.Kamal Trivedi, learned Advocate General would submit that 13 allegations were laid down listing shortcomings in the financial statements of the past 4 years and, therefore, on re-audit at least 5 of them were found to be acceptable. Mr.Kamal Trivedi, learned Advocate General has taken me through the audit reports annexed to the petitions and demonstrated as to how in each year repeatedly suggestions were made but no care was taken on the points which were raised for objections. (D) To the submission of Mr. Jani that rather than resorting to the remedy of Sec.84(5) and then giving no time and issuing a show cause notice u/S.81 on Page 47 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT 20.6.2020, that the respondents could have resorted to Sec.85, learned Advocate General would submit that it was open for the authorities and it was their discretion to proceed under any of the Sections including Sec. 81 of the Act since both Secs.81 and 85 of the Act are independent of each other. It is for the authorities to decide as to what recourse be had by the authorities.
(E) In context of the above submission also i.e. whether the authorities can take resort to a provision u/s. 81 and/or 85. the learned Advocate General relied on a decision in the case of Agriculture Produce Market Committee, Patan v. State of Gujarat rendered by this Court in SCA No.14362/2019 dated 7- 9.10.2019. He also relied on the judgment of this Court dated 20.12.2019 rendered in SCA No. 20711/2019 in the case of Dashrathbhai Jethabhai Patel v. State of Gujarat, particularly para Nos.19, 21, 22 and 24 to 26 thereof. He further relied on a decision of the Apex Court in the case of Joint Registrar of Cooperative Societies, Madras v. P.S. Rajagopal Naidu reported in AIR 1970 SC 992. Page 48 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT [F] Mr. Kamal Trivedi, learned Advocate General would support the order dated 29.1.2020 and submit that the order of re-audit of accounts is, as submitted earlier, is an administrative order. The Registrar has been conferred with powers to direct re-audit when it appears to him as necessary and expedient. Reading Secs. 84(1) to 84(5), Mr. Kamal Trivedi, learned Advocate General would submit that the distinction is not present as re-audit in fact is an audit as u/s.84(1) to 84(4) and, therefore, there need not be a reasoned order. Absence of reasons in an administrative order will not make the order fatal in terms of it standing the scrutiny and test of a legal course. Reliance is placed on a decision of Supreme Court in the case of M/s.Avon Services Production Agencies (P) Ltd. v. Industrial Tribunal, Haryana reported in 1979 (1) SCC 1. He further relied on a decision of Supreme Court in the case of Competition Commission of India v. Bharti Airtel Limited reported in 2019 (2) SCC 521.
Page 49 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT (G) On submission that no re-audit could be carried out because of the serious repercussions that the society would face as submitted by Mr. Jani of losing its right to vote, learned Advocate General Mr.Trivedi pointed out that re-audit can be done, guidelines have been set out and as per the guidelines, the petitioner in the re-audit has been classified in the audit class `C' and, therefore, to say that it will lose its right to vote is misconceived. Mr.Kamal Trivedi, learned Advocate General has taken this Court to the affidavits-in-reply filed on behalf of the State and submitted that what has been done in accordance with the guidelines providing for marks of rating a society, the petitioner society has been re-audited and classified as "Audit Class C" and, it therefore does not adversely affect the petitioner society as far as the right u/s. 27 of the Act is concerned. (H) In context of submission of Mr. Jani that Rule 38(A) has been violated which deals with payment of fees of the society, Mr.Kamal Trivedi, learned Advocate General would submit that the respondent Page 50 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT Nos.6 to 13 made an application for re-audit; the audit was at their instance and it was therefore quite natural that the fees were paid by the persons at whose instance the audit was done. The re-audit was directed by the Registrar on his satisfaction and, therefore, the direction to re-audit and fees in cases made by the application of fees otherwise than required under Rule 38 would not violate the procedural rule. He has invited the attention of the Court to the affidavit in reply and submitted that when the provisions of Rule 38 are seen, what it prescribes is that when re-audit is done at the instance of the society itself, the payment of fees is prescribed. As far as the powers of re-audit are concerned when they are so exercised on application as it was done in the present case, fees shall be paid by the persons at whose instance it is done. It is, therefore, the satisfaction of the Registrar and, thus, fees if in addition to the prescribed is charged, there cannot be no illegality therein.
(I) To the contention of Mr.Jani that on 19.5.2020 Page 51 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT Mr.K.D. Turi was no longer, an authorized officer to carry out the special audit and, therefore there was violation of Rule 38 of the Gujarat Cooperative Societies Rules, the learned Advocate General would submit that the respondent No.5 Mr.Turi was appointed as a qualified auditor and his term was for a period of 3 years from 1.4.2017 to 31.3.2020 as by the notification dated 31.3.2017. However, what is seen is that Shri Turi was a duly empaneled auditor by virtue of notification dated 21.5.2020 whereby a panel of auditors came to be published which included the name of Shri K.D. Turi. The allegation that the notification was issued in hot haste is sought to be justified by the learned Advocate General on the ground that it was only because of the lockdown and when actually the functioning of the Government was started to the limited extent from 20.5.2020 that an order was issued by which the term of the auditors was renewed. What was done by the notification dated 21.5.2020 was a ratification of the appointment which otherwise would have ended on 1.4.2020. A notification on Page 52 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT 1.4.2020 could not be issued as a result of the lockdown and it was only when the Government started functioning and the lock down was partially lifted that the notification of 21.5.2020 was issued. Such an exercise cannot be said to be an exercise to be bad so as to render the appointment of respondent No.5 as illegal. He further submitted that the notification of 21.5.2020 ratifying the appointment with effect from 1.4.2020 is not under challenge. It cannot be said that the actions that Shri Turi took on 19.5.2020 were without authority of the law. Reliance for this is placed on a decision of the Supreme Court in the case of Maharashtra State Mining Corporation v. Sunil, S/o. Pundikar Rao Pathak reported in 2006(5) SCC 96 (paras 5, 9 and
10) (J) The next submission of Mr.Trivedi was the re- audit could be done by Registrar himself and the submission of Mr.Jani that once having audited the accounts for the past 4 years by the Joint Registrar, a re-audit cannot be done by the same authority. The Page 53 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT learned Advocate General would submit that Sec.84(5) takes care of the eventuality where it appears that the audit is to be done.
(K) On the submission of political malafides, the learned Advocate General would submit that merely because allegations have been made, which are not substantiated the action is certainly not at the behest of any political party or a political authority that the exercise of re-audit has been carried out. (L) The authority, according to the learned Advocate General has not acted in hot haste and merely because the revisional authority concurred with the finding of the original authority, it cannot be said that the order is bad because of hot haste involved. In support of his submission, learned AG relied on a decision rendered by this Court in SCA No. 20711/2019 dated 20.12.2019.
35. Having considered the submissions made by the learned counsels for the respective parties, let us for the sake of Page 54 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT convenience and brevity appreciate the provision under consideration. Sec.84(5) of the Gujarat Cooperative Societies Act which provides for audit, inquiry and inspection reads as under:
"84(5) If it appears to the Registrar, on an application by a society or otherwise, that it is necessary or expedient to re-audit any accounts of the society, the Registrar may by order provide for such re-audit and the provision of this Act applicable to audit of accounts of the society shall apply to such re-audit."
What the section says is that the Registrar shall audit or cause to be audited by a person possessing prescribed for qualifications by a general or a special orders, accounts of every society. Sub Sec.(5) of Sec.84 of the Act provides that if it appears to the Registrar on an application or otherwise that it is necessary or expedient to get any account of the society re-audited the Registrar may by an order provide for such re-audit. Reading the provision of Sec.84(5), it unequivocally provides that even on an application of a 3rd party, it is open for the Registrar to carry out an audit of the Society when it finds that there are good and sufficient grounds.
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36. With regard to the contention of Mr.Jani that no application could have been entertained at the behest of the respondent Nos.6 to 13 who were strangers, that submission would not be very difficult to deal with in view of the decision dated 5.3.2020 of SCA No.5786/2020 rendered by this Court in the case The Visnagar Taluka Cooperative Purchase and Sales Union Limited v. State of Gujarat (Page 167 in SCA 7461/2020). There, this Court was called upon to consider whether the order of revisional authority joining the respondent Nos.6 to 13 was valid and whether they should have been joined as parties, that specific objection was taken by the learned advocate Mr.P.K. Jani and this Court while dealing with this submission in detail had set the same aside and held that the respondent Nos.6 to 13 were necessary and proper parties. The decisions relied on by Mr.Jani in the cases of S.S. Rana (supra) and Thalappalam (supra) have been also referred to by this court in the said decision. Relevant paras 9 to 12 of the decision dated 5.3.2020 of SCA No.5786/2020 are reproduced hereunder:
"9. Having considered the respective submissions Page 56 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT made by the parties on hand, a brief reiteration of the facts may be necessary:
An application was made on 23.01.2020 by the respondent no.13 to the Joint Registrar. Reading of the application would indicate that the respondent no.13 was a member of Shri Rangpur Seva Sahakari Mandli Limited. Shri Rangpur Seva Sahakari Mandli Limited was the primary member of the petitioner society. The case of the applicants/respondents No.6 to 13 was that they were therefore indirectly involved in the interest in the better functioning of the petitioner society. It was in this background that they had made an application for re-audit.
On 29.01.2020, on the request made by the respondent no.13, an order of re-audit was passed. This Court for the present, will not enter into the validity and legality of the order dated 29.01.2020 passed by the competent authority in entertaining the application and ordering re- audit. The issue whether the order dated 29.01.2020 is just and proper is at large before the authority before whom the Revision Application is pending. The limited issue before this Court today to decide is, whether the authority who has considered the respondent nos.6 to 13 as necessary and/or proper parties while adjudicating the issue on the legality of the order dated 29.01.2020.
10. At the first blush Mr.Jani's submission would be attractive to suggest that since respondent nos.6 to 13 are not members of the society, they have no locus to file an application for being impleaded as party respondents in Revision Application No.20 of 2020. That in view of the decision of the Supreme Court in case of S.S. Rana (supra) and Thalappalam Ser. Co-op.
Bank Ltd. (supra), since the rigors of the State and public authority do not apply to a cooperative society, the applicants being Page 57 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT outsiders have no role to play. With respect, I would disagree with the submissions of Mr.Jani on the ground that when the provisions of Section 84(5) of the Cooperative Societies Act are read, assuming for the sake of argument that the respondent nos.6 to 13 are not members of the society, reading of their application indicates that they are members of Shri Rangpur Seva Sahakari Mandli Limited-a cooperative society which is a primary member society of the petitioners and therefore they have an indirect but a substantial interest in the functioning of the petitioner society. Perusal of sub-section (5) of section 84 of the Act makes it clear that the registrar on an application or otherwise, get the account of the society re- audited, that is no qualification as to the eligibility of a person who can make an application for audit in the facts of the present case. Admittedly, it may not be said that respondent nos.6 to 13 who made an application can be said to be rank outsiders so as to not merit participation in the proceedings i.e. in the revision proceedings being Revision Application No.20 of 2020. It is in this context, the decision rendered by the Division Bench of this Court in Letters Patent Appeal No.644 of 2016 needs to be considered. Though it was in the context of an application filed by a member in the facts of that case, while discussing the concept of what a necessary and a proper party is in the context of Section 84(5) of the Act, the Division Bench considered the decision of the Supreme Court in case of Mumbai International Airport Private Limited v. Regency Convention Center and Hotels Private Limited and others reported in (2010) 7 SCC 417. It will be in the fitness of things to reproduce paragraphs 9 to 11 of the decision of the Division Bench. The pragraphs 9 to 11 read as under:
"[9] Powers under section 84(5) of the Act, 1961 can be exercised by the authorities Page 58 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT 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.
[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 Page 59 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT 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."
12. Discussing the concept of a 'necessary party' and a 'proper party', what is needed to be appreciated is that a proper party is a party though it may not be necessary party, but is one whose presence would enable the Court to completely, effectively and adequately adjudicate the dispute. This can be viewed in context of the averments made by the petitioner in the memo of the Revision Application. Though the order of re-audit dated 29.01.2020 is directly a subject matter of challenge in such revision, one of the root causes of such a challenge is the Page 60 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT authority of the Registrar to pass such an order based on an application made by the respondent nos.6 to 13. It is a specific contention by the petitioner before the Revisional Authority about the locus of the applicants/respondent nos.6 to 14, I would agree with the submission of Shri Desai that this submission can best be answered by the applicants who have been joined as parties in the revision proceedings."
37. Now coming to the submission of Mr.Jani that the order is in violation of principles of natural justice, in the submission of Mr.Jani when an application was made by the respondent Nos.6 to 13 and the date of was preponed from 11.2.2020 to 20.1.2020, no order could have been passed without giving an opportunity of hearing to the petitioner herein. That issue is no longer in doubt in view of the decision of the Bombay High Court in the case of Prabhadevi Himgiri Cooperative Housing Society Limited (Supra). In that judgment also, the issue was whether the Registrar ought to have heard the society while passing an order of re-audit. The relevant provisions under the Maharashtra Act was Sec.81 which was mutatis mutandis similar to the one under challenge here and the Court in para 7 observed as under:
"7. I have considered rival circumstances and the submissions made and I do not find that any Page 61 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT case for interference is made out at this stage. Under sub section 6 of Sec.81 of the Act, if it appears to the Registrar, on an application by society or otherwise, that it is necessary or expedient to re-audit the accounts of the society, the Registrar may by order direct such re-audit and if such re-audit is directed, the provisions of the Act applicable to the audit of the accounts of the society, apply to such re-audit. It can thus clearly be seen that the Registrar can act on the basis of the application of the society or otherwise which would include on the basis of any information received. The contention that the Registrar had no power to review cannot be accepted for the reason that an order merely directing re-audit would be of an administrative nature, and cannot be said to be of a quasi juridical nature. It is necessary to note that if the Registrar subsequently comes across certain material, which requires re-audit to be conducted, he can always direct such re-audit under sub Sec.6 of Sec.81 of the Act. Thus, the first contention raised on behalf of the petitioner, cannot be accepted."
38. Even in a decision rendered by the Division Bench of this court in the case of Mehsana District Cooperative Milk Producers Union Limited (Supra) in LPA No.555/2018 dated 28.3.2018, para 17 thereof reads as under:
"17. In the case of Chimanbhai Dadubhai Desai and another v. Chaturbhai P. Patel District Registrar Cooperative Societies (Supra), the Division Bench has held that an order directing an inquiry u/S.86 of the Act is a serious matter for a cooperative society and, therefore, the same may involve serious consequences, therefore, the Division Bench observed that the Page 62 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT principles of natural justice are required to be complied with. However, in the present case, as discussed hereinabove, respondent No.2 has passed an order for carrying out audit u/S.84(5A) of the Act and, therefore, no opportunity of hearing is required to be given to the petitioner Union before passing such an order. Thus, the said decision would not be applicable in the facts of the present case."
There the distinction was drawn between the provision of Sec.84(5) and that of 84(5)(A) of the Act. Sec.84(5)(A) of the Act provides that the Registrar shall by an order provide for a special audit of any society on its own or on the basis of a recommendation of the Reserve Bank of India or as the case may be, the national bank. Here the distinction was that it is not a re-audit as contemplated in sub sec.5 of Sec.84 of the Act and, therefore, even the Division Bench in that case held that even when serious repercussions by Special Auditor involved, no opportunity of hearing will be given before passing such order. If that is the case, obviously therefore re-audit is not an order which would require a personal hearing.
39. The learned Advocate General has rightly relied on a Page 63 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT decision of the Supreme Court in the case of M/s.Avon Services Production Agencies (P) Ltd. (Supra) where while appreciating the provisions of Sec.10 of the Industrial Disputes Act, the Supreme Court in para 6 has held as under:
"6. Section 10(1) of the Act confers power on the appropriate Government to refer at any time any industrial dispute which exists or is apprehended to the authorities mentioned in the section for adjudication. The opinion which the appropriate Government is required to form before referring the dispute to the appropriate authority is about the existence of a dispute or even if the dispute has not arisen, it is apprehended as imminent and requires resolution in the interest of industrial peace and harmony. Section 10(1) confers a discretionary power and this discretionary power can be exercised on being satisfied that an industrial dispute exists or is apprehended. There must be some material before the Government on the basis of which it forms an opinion that an industrial dispute exists or is apprehended. The power conferred on the appropriate Government is an administrative power and the action of the Government in making the reference is an administrative act. The formation of an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character. Thus the jurisdictional facts on which the appropriate Government may act are the formation of an opinion that an industrial dispute exists or is apprehended which undoubtedly is a subjective one, the next step of making reference is an administrative act. The adequacy or sufficiency Page 64 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT of the material on which the opinion was formed is beyond the pale of judicial scrutiny. If the action of the Government in making the reference is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the Tribunal had no jurisdiction to make the Award but if the dispute was an industrial dispute, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before Government on which it could have come to an affirmative conclusion on those matters (see State of Madras v. C. P. Sarathy) ."
What the Supreme Court in the above decision has held is that the order under Sec.10(1) is merely an administrative order and, therefore since there is no quasi judicial or judicial function involved, there is no right to hearing.
40. Akin to these provisions, what can be seen from Sec.84(5) of the Act that the contention of Mr.Jani that an opportunity of hearing be given is a submission which is misconceived and, therefore, deserves to be rejected. That also answers the second limb of Mr.Jani's argument that the order impugned herein i.e. the order dated 29.1.2020 Page 65 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT so confirmed in revision by order dated 14.5.2020 is not a reasoned order. As stated above, since the order is an administrative order it need not be accompanied by reasons. However, having taken me through the audit reports, the learned Advocate General has aptly demonstrated that the application made by the respondent Nos.6 to 13 setting out 13 allegations, out of which 5 were found to be warranting re-audit suggests that the authorities in passing an order of re-audit cannot be faulted with.
41. With regard to the submission that the authority should have resorted to follow the provisions of Sec.85 rather than follow Sec.81 is a submission which must be brushed aside only on the ground that the discretion to pass orders and invoke sections is with the authorities concerned. When there are alternative approaches to arrive at a problem and when the authority has an option to act in either of the two situations, merely because provisions of Sec.81 have been resorted to in preference to Sec.85, the order on this ground alone cannot be faulted. Page 66 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
42. With regard to the objection to the appointment of respondent No.4 as a Special Auditor and that the visit and the order of seizing accounts was without authority of law, based on the notification dated 21.5.2020 and looking to the explanation rendered by the respondents in the affidavit in reply suggesting that the notification could not be brought in earlier because of the lockdown and it was only after a partial uplift of the lockdown that the notification was brought in force, supports the submission of the learned Advocate General that the notification dated 21.5.2020 has to be seen as an exercise in ratification of his appointment and, therefore it cannot be seen to be one that is bad in law and make the entire exercise of re-audit as bad.
43. This in all answers the submissions made by the learned counsels for the respective parties summarizing my conclusion, it is held that, it cannot be said that;
(a) the order dated 29.1.2020 read with the order of the revisional authority dated 14.5.2020 are orders which are bad in law on the account of being Page 67 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT unreasoned and/or in violation of principles of natural justice because such orders are passed in the exercise of the administrative functions of the authorities. It is not a quasi judicial exercise of the powers therefore, neither an opportunity of hearing ought to have been given nor reasons in detail be set out.
(b) the authorities have thought it to fit exercise the powers u/s. 81 rather than exercise the same u/s. 85 is also a matter of discretion vested with the authorities concerned and I do not find fault with them.
(c) With regard to the consistent earning of audit class A and, therefore, the order be unwarranted u/s. 84(5) of the Act, what has been done by the authorities is a re-audit of accounts on an application which the authorities found justified. Audit Class `C' has been awarded to the petitioner. It may not amount to serious civil consequence downgrading the petitioner as canvassed by the learned advocate for the Page 68 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT petitioner because the right to vote as provided u/s. 27(C) still vests with the petitioner and, therefore, it cannot be said to be an order bad in law.
(d) On the question of the appointment of Shri K.D. Turi as a Special Auditor and his powers, I have answered the question in favour of the Government in view of the notification dated 21.5.2020 and held that the appointment was ratified and, therefore the respondent No.5 was duly authorized to carry out the special audit.
(e) On the question of hot haste, from the material on record, what is evident is that though the re-audit was on an aspect of four years, merely because the decision was taken in hot haste would not by itself make the decision vulnerable. This issue has been dealt by this Court earlier in SCA No. 20711/2019 in the case of Dashrathbhai Jethabhai Patel (Supra) while considering the decision of Supreme Court and the submission of Mr.Jani then of the decision making process in hot haste. While relying on a Page 69 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT decision of the Supreme Court in the case of K. Nagraj and others v. State of Andhra Pradesh reported 1985(1) SCC 523), this Court held as under:
"22. As held in the case of N. Nagaraj (supra), merely because decision is taken on haste would not make it bad. So also held by the Supreme Court in the case of S.P.Gururaja (supra). Relevant para 13 of the said judgment i.e. N.Nagaraj and paras 34 & 35 in S.P. Gururaja, respectively read as under:
"13. As regards Shri Venugopal's argument at (b) above, the fact that the decision to reduce the age of retirement from 58 to 55 was taken by the State Government within one month of the assumption of office by it, cannot justify the conclusion that the decision is arbitrary because it is unscientific in the sense that it is not backed by due investigation or by compilation of relevant data on the subject. Were this so, every decision taken by a new Government soon after assumption of office shall have to be regarded as arbitrary. The reasonableness of a decision, in any jurisidiction, does not depend upon the time which it takes. A delayed decision of the executive can also be bad as offending against the provisions of the Constitution and it can be no defence to the charge of unconstitutionality that the decision was taken after the lapse of a long time. Conversely, decisions which are taken promptly cannot be assumed to be bad because they are taken promptly. Every decision has to be examined on its own merits in order to determined whether it is Page 70 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT arbitrary or unreasonable. Besides, we have to consider the validity of a law regulating the age of retirement. It is untenable to contend that a law is bad because it is passed immediately on the assumption of office by a new Government. It must also be borne in mind that the question as to what should be the proper age of retirement is not a novel or unprecedented question which the State Legislature had to consider. There is a wealth of material on that subject and many a Pay Commission has dealt with it comprehensively. The State Government had the relevant facts as also the reports of the various Central and State Pay Commissions before it, on the basis of which it had to take a reasonable decision. The aid and assistance of a well-trained bureaucracy which, notoriously, plays an important part not only in the implementation of policies but in their making, was also available to the Government. Therefore, the speed with which the decision was taken cannot, without more, invalidate it on the ground of arbitrariness."
"34. Undue haste also is a matter which by itself would not have been a ground for exercise of the power of judicial review unless it is held to be mala fide. What is necessary in such matters is not the time taken for allotment but the manner in which the action had been taken. The Court, it is trite, is not concerned with the merit of the decision but the decision-making process. In the absence of any finding that any legal malice was committed, the impugned allotment of land could not have been interfered with. What was only necessary to be seen was as to whether there had been fair play in action.
35. The question as to whether any undue haste has been shown in taking an administrative Page 71 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT decision is essentially a question of fact. The State had developed a policy of single-window system with a view to get rid of red tapism generally prevailing in the bureaucracy. A decision which has been taken after due deliberations and upon due application of mind cannot be held to be suffering from malice in law on the ground that there had been undue haste on the part of the State and the Board."
44. In view of the above, I find no reason to interfere with the orders passed by the respondents in exercise of powers u/ s. 84(5) of the Act carrying out re-audit in the case of the petitioner. Accordingly, SCA No. 7461/2020 is dismissed.
45. Since a common order is passed in both the matters, I reiterate again that SCA No.7321/2020 is allowed with cost of Rs.1,00,000/- to be paid by the respondents and SCA No.7461/2020 is dismissed. Rule is made absolute accordingly so far as SCA No.7321/2020 is concerned while rule is discharged so far as SCA No.7461/2020 is concerned.
46. In view of the orders passed in main matters, Civil Application does not survive and the same stands disposed of accordingly.
Page 72 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020 C/SCA/7321/2020 CAV JUDGMENT
47. The Registry is requested to communicate this CAV Judgment through E-mail and / or Fax.
Sd/-
(BIREN VAISHNAV, J) VATSAL / MARY Page 73 of 73 Downloaded on : Wed Aug 05 23:16:59 IST 2020