Gujarat High Court
Azamukhi Dangar Utpadakoni Sahakari ... vs State Of Gujarat & 5 on 12 April, 2016
Author: C.L.Soni
Bench: C.L. Soni
C/SCA/2961/2016 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 2961 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE C.L. SONI Sd/-
==========================================================
1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy ofNo
the judgment ?
4 Whether this case involves a substantial question ofNo
law as to the interpretation of the Constitution of
India or any order made thereunder ?
==========================================================
AZAMUKHI DANGAR UTPADAKONI SAHAKARI MANDALI LTD &
1....Petitioner(s)
Versus
STATE OF GUJARAT & 5....Respondent(s)
==========================================================
Appearance:
MR BS PATEL, ADVOCATE for the Petitioner(s) No. 1 - 2
MR. PRAKASH K. JANI, ADDL. AG with MR. JK SHAH, ASSTT.
GOVERNMENT PLEADER for the Respondent(s) No. 1 - 2
MR DIPEN DESAI, ADVOCATE for the Respondent(s) No. 6
NOTICE SERVED BY DS for the Respondent(s) No. 3 - 5
==========================================================
CORAM: HONOURABLE MR.JUSTICE C.L. SONI
Date : 12/04/2016
Page 1 of 16
HC-NIC Page 1 of 16 Created On Wed Apr 13 01:11:16 IST 2016
C/SCA/2961/2016 JUDGMENT
ORAL JUDGMENT
1. The petition is taken up for final disposal at the notice stage with the consent of the learned advocates for the parties.
2. The challenge made in the present petition filed under Article 226 of the Constitution of India is against the order dated 16.2.2016 passed by the authorized officer removing the names of members of Managing Committee of the petitioner No.1 society from provisional list of voters of co-operative marketing societies constituency for election of the Agriculture Produce Market Committee, Sanand.
3. The main objections raised against the inclusion of the names of members of managing committee of the petitioner no.1 society are that the object of the society is not of purchase and sale of agriculture produce but to provide livelihood to its members by collective farming through them on the land to be taken from the Government. The petitioner No.1 society represented that it has got licence from the Agriculture Produce Market Committee, Sanad, that its object is also to purchase and sale agriculture produce and it got bye-law No.3(2) approved on 21.7.2015.
4. The authorized officer however has observed in the impugned order that as per the audit report for the period from 1.4.2013 to 31.3.2015, the main object of petitioner No.1 society is of doing collective farming and that it is not engaged in the business in conformity with its objects. On such conclusion, the impugned order is passed.
Page 2 of 16
HC-NIC Page 2 of 16 Created On Wed Apr 13 01:11:16 IST 2016
C/SCA/2961/2016 JUDGMENT
5. Learned Advocate Mr. B.S. Patel for the petitioners submitted that the authorized officer committed serious error by not considering the bye laws of the petitioner no.1 society and relied only on audit report which contained factual error. Mr. Patel submitted that not only in the original bye-laws but additionally in amended bye-law no.3(2), the objects mentioned are to sale the agriculture produce paddy of the members of petitioner no.1 society, and to show actual sale of paddy, the petitioners also produced relevant material.
6. Learned Additional Advocate General Mr. Prakash K. Jani however submitted that to be eligible to vote from any constituency, a person or a society has to satisfy the qualification provided in sec.11. Mr. Jani submitted that since the petitioner no.1 society is producers' society and not the marketing society, it cannot be included in the voters' list of Co-operative Marketing Societies Constituency.
7. Mr. B.S. Patel then submitted that as per the definition of cooperative marketing society, the petitioner no.1 society since registered under the Cooperative Societies Act, 1961 ("the Societies Act") and engaged in the business of selling agricultural produce and also holding general licence from the market committee, satisfies the requirements to be included in the voters' list of co-operative marketing societies constituency. Mr. Patel submitted that as per the decision of the Division Bench of this Court in the case of Jagdishbhai Ranchhodbhai Patel versus State of Gujarat dated 23.10.2008 in Special Civil Application No.30073 of 2007 and allied matters, the Page 3 of 16 HC-NIC Page 3 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT petitioner no.1 society is a co-operative marketing society and, therefore, it is wrongly removed from the voters' list.
8. Learned additional Advocate General Mr.Jani on the other hand submitted that the petitioner no.1 society is not registered as marketing society but got itself registered as producers' society and, therefore, it is rightly removed from the voters' list of co-operative marketing societies constituency. Mr. Jani submitted that when it is producers' society, the authorized officer has rightly concluded that it is not engaged in the business in conformity with its objects. Mr. Jani submitted that a producers' society with one of the objects to sell agriculture produce of paddy would not become marketing society as its main objects are for more production of agriculture produce by helping its members. Mr. Jani submitted that since the election process has commenced, this court may not interfere with the impugned order in exercise of powers under Article 226 of the Constitution of India as the remedy of election petition is available to the petitioners.
9. Mr. Dipen Desai appearing for the objector submitted that the observation made by the Division Bench in the case of Jagdishbhai (supra) as regards the status of co-operative society is not part of reasoning to decide the question raised therein but it is an obiter dicta whereas in the later decision of the Hon'ble Division Bench of this Court in the case of Rameshbhai Ganeshbhai Chaudhari versus State of Gujarat and others dated 6.10.2010 delivered in Special Civil Application No. 13689 of 2009 and allied matters, it is clearly decided Page 4 of 16 HC-NIC Page 4 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT that the words "as such" used in the definition of co-operative marketing society in sec. 2(v) of the Gujarat Agricultural Produce Markets Act, 1963 ("the Act of 1963") are of special significance and the marketing society is distinguished by its birth name on its registration as marketing society. Mr. Desai would also rely on the judgment in the case of Husseinbhai Ibrahimbhai Malek v. P.V.Bhatt & Others reported in 1979 (2) GLR page 38 to submit that since the petitioner no.1 society is registered as producers' society, it cannot claim to be a marketing society.
10. The Court, having heard learned advocates for the parties, finds that the authorized officer on considering the audit report for the accounts of the petitioner no.1 society has observed that the petitioner no.1 society is formed to do collective farming and has not been doing the business in conformity with its bye-law. However, it is not in dispute that the petitioner no.1 society is not collective farming society but is paddy producers' co-operative society. However, for the purpose of inclusion in the voters' list of co-operative marketing societies constituency, the question arises is whether the producers' cooperative society could be said to be co-operative marketing society as defined in section 2(v) of the Act of 1963.
11. Considering the nature of controversy raised and the Court finding that the authorized officer has passed the impugned order on non-existent ground, the Court has taken up the matter to be decided on merits though objection is raised against the entertainability of the petition by the learned Addl. A.G. Mr. P.K. Jani on the ground of Page 5 of 16 HC-NIC Page 5 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT availability of alternative remedy of filing election petition under rule 28 of the Gujarat Agriculture Produce Market Rules, 1965 ("the Rules").
12. As per section 11(1) (I) (ii) (iii) of the Act of 1963, a market committee consists of elected members from three different categories. One is from agriculturists enlisted on the voter list of the election commission for the market area to be elected from the Primary Agriculture Credit Co-operative societies dispensing agriculture credit. Second is from traders holding general license and doing trading in constituency with the terms and conditions of the licence in previous financial year and the third is from the members of the cooperative marketing societies holding general licence. These three different categories are generally referred as agriculturists' constituency, traders' constituency and co-operative marketing societies' constituency. For election of the members of market committee, three different lists of voters are prepared as required by rule 5 of the Rules for three different constituencies. As per the definition of 'trader' under sec. 2(xxiii) of the Act of 1963, trader means any person, who carries on business of buying or selling of agricultural produce or of processing of agricultural produce for sale and includes a co-operative society, joint farming or an association of persons, whether incorporated or not, which carries on such business.
13. Thus, a cooperative society carries on business of buying or selling of agricultural produce under a licence in the market area is Page 6 of 16 HC-NIC Page 6 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT also a trader. Sec. 2(v) of the Act of 1963 defines the co-operative marketing society to mean a society registered or deemed to be registered as such under the Act and engaged in the business of buying or selling of agricultural produce or of processing of agricultural produce and holding a licence.
14. Mr. Patel submitted that to be Co-operative Marketing Society within the meaning of definition under section 2(v) of the Act, 1963, a society has to be first registered or deemed to be registered as such under the Societies Act and except for such purpose, the words "as such" used in the definition have no other significance to be attached.
15. In the case of Husseinbhai Ibrahimbhai Malek (supra), relied on by Mr. Desai, the learned Single Judge held and observed in para 9 as under:
"9. Mr. Zaveri's second contention was that the various societies enumerated by the petitioner in paragraph 7 of his petition, were co-operative marketing societies, because they won fulfilling the requisites of a co-operative marketing society as defined in CL (v) of S. 2 of the Act. I reproduce below that clause for ready reference:, "(V) "Co-operative marketing society" means a society registered or deemed to be registered as such under the Gujarat Co-operative Societies Act, 1961 and engaged in the business of buying or selling of agricultural produce or of processing of agricultural produce and holding a licence.
(emphasis is supplied by me)".
The above definition of a co-operative marketing society with the emphasis as indicated by me above calls for three requisites of a co-operative marketing society. The first requisite is that it must be a society registered or deemed to be registered under the Gujarat cooperative Societies Act, 1961. Its registration must be "as such Page 7 of 16 HC-NIC Page 7 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT thereby as a co-operative marketing society. Mr. Zaveri submitted that the two words "as such mean that the society must be registered under the Gujarat Co-operative Societies Act or must be deemed to be registered as such, that is, as a co- operative societies under the Gujarat Co-operative Societies Act. Mr. Zaveri's submission is not right. The meaning which he wants to derive can be had even without the words "as such". Had the Legislature wanted that the society should be a society registered under the Co-operative Societies Act, 1961 or deemed to be registered under the Gujarat Co-operative Societies Act, 1961, the use of the words "as such" is not-
necessary. Therefore, it is inevitable to hold that the Legislature has used the words was such"
not redundantly or by way of tautology but with a specific purpose. The word "such" is a demonstrative pronoun When we replace the pronoun by a noun, we have to read the words "as such" to mean as a co-operative marketing society."
16. The decision of the learned Single Judge was considered by the Hon'ble Division Bench in its judgment dated 23rd October, 2008 in the case of Jagdishbhai Ranchhodbhai (supra). In the said case, the question considered was whether the societies (referred as appellant
- societies therein) had by obtaining trader's licence, forfeited their right to elect "agriculturist" members of Market Committee. The Court, while considering the decision in the case of Husseinbhai (supra) has observed that so long as the appellant societies are real and genuine; are dispensing agricultural credit in the market area; and are not the co-operative marketing societies within the meaning of Section 2 [v] of the Act of 1963, the Members continue to enjoy right to elect agriculturist as members of the Market Committee. The Court opined that the registration of a society under the Societies Act is for the purpose of the Act and the classification made under that Act cannot govern the status of a society under the Act of 1963. It Page 8 of 16 HC-NIC Page 8 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT was then observed that if the appellant societies though dispensing agricultural credit are also cooperative marketing society within the meaning of the Act of 1963 cannot constitute electorate for agriculturist members of the market committee. The Court construed the phrase "deemed to be registered as such under the Gujarat Co- operative Societies Act, 1961" used in the definition of cooperative marketing society under section 2(v) of the Act of 1963 and held that the said phrase necessarily refer to the societies which are deemed to be registered under the societies Act and proceeded to observe in paragraph 20 of its judgment as under:
"In the present petitions, we are not concerned whether the activities of the appellant- societies of processing or selling of cotton procured from its members would attract purchase tax or sales tax under the Gujarat Sales Tax Act. We have to examine the question in the perspective of the Act of 1963. As recorded hereinabove, a cooperative marketing society is a society which is engaged in the business of buying or selling agricultural produce or of processing of the agricultural produce and is holding a licence. It is admitted fact that the appellant-societies hold a general licence of the Market Committee. It is also not in dispute that the appellant- societies do sell processed/ unprocessed cotton an agricultural produce. The above referred definition does not require that a society engaged in the business of buying or selling or of processing agricultural produce shall also make profit or shall do it only for its own purpose. In our opinion, a society holding a licence; engaged in business of buying or selling of agricultural produce or of processing of agricultural produce, earns profit or not; or does it for its own purpose or on behalf of its members, it would still be a cooperative marketing society within the Page 9 of 16 HC-NIC Page 9 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT meaning of the Act of 1963. The appellant- societies are admittedly engaged in the business of procurement and the sale of processed/unprocessed cotton. Irrespective of the fact that such cotton is procured from their members, the appellant-societies would still be a cooperative marketing society within the meaning of the Act of 1963. A cooperative marketing society though, may also be engaged in dispensing agricultural credit in the market area, is expressly excluded from the electorate of the agriculturist members of the Market Committee. We, therefore, hold that the appellant-societies having obtained general licence of the Market Committee and being engaged in procuring, processing and/or selling cotton are required to be excluded from the electorate of the agriculturist members of the Market Committee. In our opinion, the Director had rightly rejected the Appeal No. 21 of 2006 preferred by the defeated contestants and Appeal No. 22 of 2006 preferred by the appellant-Societies."
17. Mr. Desai would however submit that in Jagdishbhai (supra), what was observed in the context of the definition of cooperative marketing society was not part of the reasoning for deciding the question paused for consideration of the Court and, therefore, it was obiter dicta and hence cannot be considered to be ratio decidendi on interpretation of definition under sec. 2(v) of the Act of 1963. Mr. Desai would submit that what was held in the case of Husseinbhai (supra) was ratio decidendi and submitted that in later decision rendered by the Hon'ble Division Bench in the case of Rameshbhai Ganeshbhai Chaudhari (supra), it is held that the words "as such" used in Page 10 of 16 HC-NIC Page 10 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT the definition of co-operative marketing society in sec. 2(v) of the Act of 1963 are of special significance and the marketing society is distinguished by its birth name on its registration as marketing society and such later decision of the Hon'ble Division Bench since squarely covers the issue on interpretation of definition of cooperative marketing society, earlier division Bench judgment could not be said to be ratio decidendi on the question involved in the present petition. The Court however finds that in the case of Rameshbhai (supra), the Hon'ble Division Bench considered the question whether the cooperative societies by their very name and objects dealing with the activities of animal husbandry and milk produce could be excluded from the voters list of agriculturist constituency if such societies were in fact dispensing agricultural credit in the market area. The Court therein has held that all kinds of societies howsoever named, described or registered, if they are dispensing agricultural credit in the market area are intended to be included in the agriculturist's constituency. Considering the exceptions carved out in section 11(1)(i) as existed then, the Court found indirect support from the definition of cooperative marketing society for reaching to the proposition that all the cooperative societies dispensing agricultural credit in the market area were intended to be Page 11 of 16 HC-NIC Page 11 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT included in the agriculturists' constituency and for distinguishing marketing societies, the Court has observed that the words "as such" used in the definition are of special significance because co-operative marketing society, even if it were having various objects and activities including extending agricultural credit, it would be distinguished by its birth-mark of having been registered as a co-operative marketing society. Such observation therefore could not be said to be ratio decidendi on the question involved.
18. The earlier decision of the Hon'ble Division Bench in the case of Jagdishbhai (supra) was rendered after considering the judgment rendered by the learned Single Judge in the case of Husseinbhai (supra). Such decision in the case of Jagdishbhai (supra) is since on interpretation of the phrase used in the definition of Co-operative Marketing Society under section 2(v) of the Act of 1963, indirectly overruled the decision of the learned Single Judge on interpretation of the said definition.
19. Mr. Desai however sought to draw distinction between obiter dicta and ratio decidendi. But such distinction is not required to be considered as the Court finds that in the case of Jagdishbhai (supra), the Court has not made any observation de-hors the controversy raised in the said case. Since the Court in the said case decided the question paused for its Page 12 of 16 HC-NIC Page 12 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT consideration in the context of the definition of co-operative marketing societies, its interpretation on the phrase "deemed to be registered as such under the Co-operative Societies Act, 1961" could be said to be part of the reasoning and not obiter dicta.
20. Mr. Desai however submitted that the identification marks are given to the societies as decided by the Circular dated 27.3.2006 issued by the Registrar of the Co-operative Societies at the time of registration of the societies and the societies are then known as such by such identification marks. Mr. Desai submitted that in the case of the petitioner no.1 society, its identification under the registration is of producers' society and, therefore, it can never be recognized as co- operative marketing society. The Court, however, finds that such Circular is for the purpose of the Societies Act and cannot be relied to interpret the definition under the Act of 1963. In any case, registration or classification done under the Societies Act is of no significance for the purpose of the Act of 1963 as held by the Hon'ble Division Bench in the case of Jagdishbhai (supra).
21. In the definition of co-operative marketing society under section 2(1(v) of the Act of 1963, two parts "registered" and "deemed to be registered as such" are connected with Page 13 of 16 HC-NIC Page 13 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT conjunction "or" which co-ordinate such parts of the definition and creating alternative between them. The word "as such"
cannot be for the phrase "marketing society". Even otherwise, undisputably, no society is registered as marketing society under the provisions of the Societies Act. The word "as such" is just to make it certain that the registration of the society by deeming fiction is under the provisions of the Societies Act.
Section 169 of the Societies Act provides for such deemed registration of the co-operative society under the Societies Act.
22. Under the Act of 1963, a society to be co-operative marketing society should have been registered or deemed to be registered under the Societies Act and engaged in the business of purchase and sale of agriculture produce or of processing agriculture produce and holding licence. Therefore, to be co-operative marketing society under the Act of 1963, three requirements are to be satisfied. One is, it should be registered or deemed to have been registered under the Societies Act. Second is, it should be engaged in the business of purchasing and selling and/or processing agriculture produce, and third is, it should have licence.
23. In the case on hand, the authorized officer has not considered relevant material and misdirected himself on irrelevant consideration. In ordinary circumstances, the Court Page 14 of 16 HC-NIC Page 14 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT would have remanded the matter to the authorized officer for its fresh consideration. However, no such time is left. The Court therefore on available material would decide whether the petitioner no.1 society is marketing society. There is no dispute that the petitioner no.1 is registered society under the Societies Act and holds general licence. On the aspect whether the petitioner no.1 is engaged in the business of purchasing or selling agriculture produce, the Court finds from the accounts and the other material of the society that the petitioner no.1 sold paddy in the market area. Selling of paddy is part of objects of the petitioner no.1 society as per the bye-laws. Thus, petitioner no.1 society could be considered to be marketing society though it is named as Producers' Society.
24. For the reasons stated above, the impugned order dated 16.2.2016 passed by the authorized officer at annexure-A is quashed and set aside. Names of the members of the Managing Committee of petitioner No.1 society shall stand included in the voters' list of Co-operative Marketing Societies Constituency for the election of the Agri. Produce Market Committee, Sanand and they shall be permitted to cast their votes in the said election. The cotes cast by them shall be now counted for the purpose of election of the members of the market committee from the co-operative marketing societies Page 15 of 16 HC-NIC Page 15 of 16 Created On Wed Apr 13 01:11:16 IST 2016 C/SCA/2961/2016 JUDGMENT constituency.
25. The petition thus stands finally disposed of at notice stage. Direct Service is Permitted. The copy of this order shall also be made available to the learned A.G.P. Mr. Shah for its onward communication.
Sd/-
(C.L.SONI, J.) anvyas Page 16 of 16 HC-NIC Page 16 of 16 Created On Wed Apr 13 01:11:16 IST 2016