Gujarat High Court
The Visnagar Taluka Co-Operative ... vs State Of Gujarat on 13 March, 2020
Author: R.M.Chhaya
Bench: R.M.Chhaya, Ilesh J. Vora
C/LPA/239/2020 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 239 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 5786 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
In R/LETTERS PATENT APPEAL NO. 239 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE R.M.CHHAYA
and
HONOURABLE MR. JUSTICE ILESH J. VORA
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1 Whether Reporters of Local Papers may be
allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the
fair copy of the judgment ?
4 Whether this case involves a substantial
question of law as to the interpretation
of the Constitution of India or any order
made thereunder ?
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THE VISNAGAR TALUKA COOPERATIVE PURCHASE AND SALES UNION
LTD.
Versus
STATE OF GUJARAT
==========================================================
Appearance:
MR PRAKASH JANI, SR. ADVOCATE with MR SHIVANG P
JANI(8285) for the Appellant(s) No. 1
for the Respondent(s) No. 2,3,4,5
MS MANISHA L. SHAH, GOVT. PLEADER with MR TIRTHRAJ
PANDYA, AGP (99) for the Respondent(s) No. 1
MR MIHIR THAKORE, SR. ADVOCATE with MR JAY B
TRIVEDI(7474) for the Respondent(s) No.
10,11,12,13,6,7,8,9
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C/LPA/239/2020 JUDGMENT
CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA
and
HONOURABLE MR. JUSTICE ILESH J. VORA
Date : 13/03/2020
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE R.M.CHHAYA)
1. The present appeal is directed against the judgment and order dated 05.03.2020 passed by the learned Single Judge (Coram : Biren Vaishnav, J.) in Special Civil Application No. 5786 of 2020, whereby the petition filed by the appellant came to be dismissed.
2. Heard Mr. Prakash Jani, learned Senior Advocate assisted by Mr. Shivang Jani, learned advocate for the appellantoriginal petitioner, Ms. Manisha L. Shah, learned Government Pleader with Mr. Tirthraj Pandya, learned AGP for respondents no.1 to 5 and Mr. Mihir Thakore, learned Senior Advocate assisted by Mr. Jay Trivedi, learned advocate advocate for respondents no. 6 to 13.
3. The following facts emerging from the record of the appeal are as under 3.1 That the appellant is a taluka level cooperative society under the provisions of Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as the "Act" for the sake of brevity).
Page 2 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020C/LPA/239/2020 JUDGMENT 3.2 The private respondents filed an application individually before the Joint
Registrar, Cooperative Societies, Ahmedabad on 23.01.2020 and inter alia prayed for reaudit of the appellant society on various grounds for the financial year starting from 01.04.2015 to 31.03.2019 under section 84(5) of the Act.
3.3 As the record unfolds, the Joint Registrar heard the private parties and by an order dated 29.01.2020, passed an order directing reaudit of the appellant society from 2015 to 2019. It is also provided in the said order that the reaudit fees is to be borne by the private respondents. The said order is challenged by the appellant society by way of revision under section 155 of the Act, which came to be registered as Revision Application No. 20 of 2020 and the same is pending for orders before the revisonal authority.
3.4 While the revision was pending, the private respondents herein filed an application for joining as parties in the said Revision Application. It was the case of the private respondents before the revisional authority that they are primary members of the member society of the appellant herein and vitally interested in the proper management of the appellant society. It was the case of the Page 3 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT private respondents before the revisional authority that they are absolutely necessary and proper party as they would be directly affected by any order passed in the revision application. It also transpires that after the order of reaudit was passed, the private respondents filed a caveat before the revisional authority, however, the appellant society preferred not to make them parties. The record also indicates that the said application was objected to by the appellant by filing reply inter alia contending before the revsional authority that the private respondents are not necessary parties and that they are not members of the appellant union and that application is filed only with a view to prejudice the administration of the union. It was also alleged in the reply filed by the appellant that the private respondents have suppressed true facts. It is also contended by the appellant that the private respondents were not made party before this Court in the petition filed by the appellant referred to hereinafter. It was also inter alia contended by the appellant that the application for joining party be dismissed as the same is filed with a view to harass the appellant. The appellant also referred to the judgment of the Apex Court in the case of Zoroastrian Cooperative Housing Society Ltd. and Anr. vs. District Registrar, Cooperative Societies Page 4 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT (Urban) and Ors. reported in 2005(3) GLH 571 and contended that a third party has no right to be a party in the proceedings. It is also contended that the dispute arising in the revision is only between the appellant and the Joint Registrar and the same is not going to affect any right of the private respondents herein and therefore, they are not necessary party. It was also contended that the Hon'ble High Court in the petition filed by the appellant has not taken into consideration any submissions made by the private respondents. It is also alleged that no complaint is made by any member of the appellant society and since last five years, appellant Society has been given Audit ClassA and on the basis of the contentions raised in the reply, the appellant prayed that the application for joining party be dismissed. By an order dated 02.03.2020, the revisional authority, i.e., Joint Secretary, Agriculture and Cooperation Department, was pleased to allow the application filed by the private respondents.
3.5 At this stage, it is also pertinent to note that after filing the revision application, the appellant approached this Court by way of filing SCA No. 4764 of 2020 wherein the appellant challenged the order dated 29.01.2020. The learned Single Judge of this Page 5 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT Court, after hearing the appellant as well as the State Government, passed the following order "[1] This petition is filed challenging the order dated 29.01.2020 at AnnexureB. 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 Cooperative 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 cooperate with the hearing before the revisional authority. In the meantime, statement is made on behalf of the learned Government Pleader that the auditorrespondent 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."
3.6 It is also pertinent to note at this stage that the private respondents also approached this Court by way of filing application for being joined as party respondent in Special Civil Application No. 4764 of 2020, however,as the main matter was disposed of as observed hereinabove, the said application also came to Page 6 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT be disposed of.
3.7 Being aggrieved by the order dated 02.03.2020 passed by the revisional authority, joining private respondents as party respondents in revision application filed by the appellant, the appellant approached this Court by way of filing Special Civil Application No. 5786 of 2020 on various grounds. The learned Single Judge, by the impugned impugned judgment and order, was pleased to dismiss the petition. As can be seen from the record, by the time Special civil Application No. 5786 of 2020 was filed by the appellant, i.e., on 03.03.2020, the revision was heard on merits by the revisional authority, however, the order is not passed till date and statement to that effect came to be made before the learned Single Judge by the Government Pleader and while dismissing the petition, the learned Single Judge has provided that the revisional authority shall not pass final order till 13.03.2020 and being aggrieved by the said order, the present appeal is filed.
4. Mr. Jani, learned Senior Advocate appearing for the appellant has contended as under
1) That all the private respondents herein filed similar applications before the Joint Registrar on 23.01.2020. It was contended by Mr. Jani Page 7 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT that none of the applicant, i.e., the private respondents are members of the appellant society.
2) It was contended that the applications for re audit were filed with malafide intention and with a collateral object of achieving political goals. It is also contended that this case is a pointer of abuse of power.
3) It was contended that the appellant is a cooperative society and under the scheme of the Act, it is answerable only to the members and the private respondents as outsiders have no right to interfere with the affairs of the society. It was contended that the private respondents are not members of the appellant society and hence have no locus standi to inquire into the affairs of the appellant society.
4) It was also contended that the cooperative society is not a State within the meaning of Article 12 of the Constitution of India and therefore no one has right to claim anything against the society like the private respondents.
5) It was contended that the appellant has filed a revision which is against the order of the Joint Registrar and no reliefs are claimed against the private respondents. It was contended that even Page 8 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT under the fundamental principle, as no reliefs are sought against the private respondents, the private respondents are neither necessary nor proper party to the proceedings.
6) It was contended that the revision is against the order passed by the Joint Registrar and hence, the appellant society and the Joint Registrar are the only parties and the Joint Registrar has also filed an exhaustive reply in form of parawise remarks.
7) It was also contended that the scope of revision under section 155 of the Act is to see propriety and legality of the order passed by the authority and to satisfy itself on that. It was contended that in doing so, the revisional authority is ably assisted by the Joint Registrar and therefore, there is no dominus litis with the private respondents.
8) Referring to Chapter 3 of the Gujarat Cooperative Societies Rules, 1965, it was contended that right to reaudit is provided and are determined. It was contended that the members have no right to seek reaudit.
9) Reverting back to the application for joining party filed by the private respondents, Mr. Jani, learned Senior Advocate contended that the detailed reply was given and specfically details were given, however, the same are not dealt with Page 9 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT by the authority.
10) It was contended by Mr. Jani, learned Senior Advocate that the authority while deciding the application for joining party being quasi judicial authority was under legal obligation to give reasons while granting or rejecting of the application. It was contended that even the oral as well as written submissions made by the appellant are not considered and no reasons are given by the revisional authority.
11) Referring to the dates, it was contended by Mr. Jani that the impugned order was passed by the revisional authority on 02.03.2020 and the writ petition was filed by the appellant on 03.03.2020. It was contended that the revision was fixed for hearing on 03.03.2020 and even after the petition was filed, the hearing was concluded by the revisional authority.
On the aforesaid grounds, Mr. Jani, learned senior advocate contended that the learned Single Judge has failed to consider the submissions and grounds raised in the petition and has committed an error in dismissing the writ petition. It was contended by Mr. Jani that the appeal deserves consideration and the order of the joining private respondents as party respondents in the revision be stayed and the appeal be allowed.
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5. Mr. Mihir J. Thakore, learned senior advocate appearing for the private respondents has supported the impugned order as well as the judgment and order passed by the learned Single Judge. Mr. Thakore contended that as provided under section 84(5) of the Act, it is not necessary that only a member can file an application for audit. Referring to sub section(5) of section 84 of the Act, Mr. Thakore contended that if not necessary, the private respondents are proper party as at their instance, order of reaudit is passed. It was therefore contended by Mr. Thakore that the application was maintainable and the Joint Registrar having considered the submissions made by both the parties has passed appropriate order. Mr. Thakore contended that the Joint Registrar is not exercising judicial function and therefore, it cannot be said that no reasons are assigned. Mr. Thakore vehemently submitted that the Joint Registrar has clearly mentioned that having considered the submissions made, the Joint Registrar has rightly come to the conclusion that the private respondents herein are proper party to the revision.
6. Mr. Thakore, learned senior advocate further contended that the appellant society at every stage has attempted to avoid reaudit even though the Joint Registrar has examined the application filed by the applicants and felt it Page 11 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT necessary to order reaudit. Referring to the observations made by the learned Single Judge, Mr. Thakore contended that the learned Single Judge has rightly come to the conclusion that the private respondents are necessary parties to the revision. On the aforesaid grounds, it was contended by Mr. Thakore that the orders passed by the revisional authority as well as the learned Single Judge is in accordance with law and no interference is called for and the appeal be dismissed.
7. Ms. Manisha L. Shah, learned Government Pleader contended that the appellant society is a taluka level society and therefore their cannot be any individual members. It was also contended that as provided under section 84(5) of the Act, any person can move the Joint Registrar for re audit. It was also contended by Ms. Shah that the impugned judgment and order being legal and proper, no interference is called for. It was also contended by Ms. Shah that the learned Single Judge has also considered all submissions made by the appellant and has passed a reasoned order. It was contended that the appeal being meritless, deserves to be dismissed.
8. Mr. Jani, learned Senior Advocate in his further reply contended that though the contentions were raised before the learned Single Judge that the revisional authority has not given any reasons Page 12 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT for joining private respondents as party, the same have remained unanswered. Mr. Jani also contended that the authority being a quasi judicial authority, though passing an administrative order, has to give reasons. It was submitted by Mr. Jani that the order is silent on the aspect of how the ultimate conclusion is arrived at. It was contended by Mr. Jani that the same is not dealt with by the revisional authority as well as learned Single Judge and therefore, the impugned orders deserve to be quashed and set aside. It was also contended that the private respondents are not authorised by their respective society to apply for reaudit. It was also reiterated that the Cooperative Society is not State within the meaning of Article 12 of the Constitution and once the private respondents are not necessary party, they cannot be treated as proper party.
9. Mr. Jani has also relied upon the following judgments to buttress his arguments
1) S.S. Rana Vs. Registrar, Cooperative Societies reported in 2011(6) SCC 634
2) Express Newspaper Private Ltd. vs. Union of India reported in AIR 1986 SC 872
3) Tarlochan Dev Sharma vs. State of Punjab and Hariyana reported in 2001 (6) SCC 260
4) Ravi Yashwant Bhoir Vs. District Collector, Raigad reported in 2012 (4) SCC 407 Page 13 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT
5) Poonam Vs. State of Uttar Pradesh reported in 2016 (2) SCC 779
6) Thalappalam Ser. Coop. Bank Ltd. Vs. State of Kerala & Ors. reported in 2013(3) GLH 591
7) Zoroastrian Cooperative Housing Society Ltd. (supra)
8) N.C. Navin Vs. Bank of India reported in 2015 JX (GUJ) 1685
10. Having heard the learned counsel appearing for the parties and on perusal of the record of the appeal as well as the impugned order passed by the revisional authority joining the private respondents as party respondents in the revision application as well as the judgment and order passed by the learned Single Judge, at the outset it deserves to be noted that this appeal is only limited to the aspect of application for joining party and not the main issue which is involved in the revision. In light of the aforesaid therefore, the aspect of malafides and whether the reaudit is rightly ordered by the Joint Registrar is not necessary to be dealt with by this Court in this appeal as the same issue is pending atlarge before the revisional authority. It also appears that the judgments relied upon by the learned counsel for the appellant were relied upon by the appellant even before the learned Single Judge.
11. In the aforesaid factual matrix, the question Page 14 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT which arises for consideration in this appeal is whether the private respondents are necessary and/or proper party to the revision filed by the appellant or not.
12. Section 84 of the Act falls in Chapter VIII of the Act and the same provides for audit of accounts of the society. Subsection (5) of section 84 reads as under "(5) If it appears to the Registrar on an application or otherwise that it is necessary or an expedient to get any account of the society reaudited, the Registrar may, by an order, provide for such reaudit and the provisions of this Act applicable to the audit of accounts of the society shall apply to such reaudit."
Subsection (5) therefore provides that on an application or otherwise, if the Registrar feels it necessary or expedient to get any account of the society reaudited, the Registrar may, by an order provided for such reaudit, but in the case on hand, the appellant is a taluka level society. It also bornes out from the record that the private respondents are members of Shree Rangpur Seva Sahakari Mandli, who in turn is member of the appellant society and therefore, the private respondents are vitally concerned with the management of the appellant society. In light of the aforesaid facts therefore, the private respondents are not alien to the appellant society. Subsection(5) of Page 15 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT section 84 provides that on an application or otherwise, the Registrar may pass an order of reaudit. In the application dated 23.01.2020, it is clearly stated by the private respondents that they are members of Shree Rangpur Seva Sahakari Mandli, which is a primary member of the appellant society and therefore, this Court is of the opinion that the private respondents have right to file such application. The learned Single Judge has succinctly considered the said aspect and has observed thus in the following paras "9. Having considered the respective submissions made by the parties on hand, a brief reiteration of the facts may be necessary:
9.1 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 reaudit.
9.2 On 29.01.2020, on the request made by the respondent no.13, an order of reaudit 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 reaudit. The issue whether the order dated Page 16 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT 29.01.2020 is just and proper is at large before the authority before whom theRevision Application is pending.
9.3 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."
13. This Court therefore is of the opinion that the order passed by the revisional authority permitting the private respondents to be party respondents in the revision is in consonance with the provisions of section 84(5) of the Act.
The learned Single Judge has correctly come to the conclusion that the private respondents are necessary party to the revision. We find that the learned Single Judge has correctly considered the judgment of the Apex Court in the case of S.S. Rana (supra) as well as Thalappalam Ser. Coop Bank Ltd. (supra) in view of the provisions of section 84(5) of the Act and even at the cost of repetition, it is observed that the private respondents are not totally alien and/or rank outsiders as observed by the learned Single Judge. The application filed by the private respondents under section 84 of the Act for reaudit is found with merit and it is at their instance that reaudit is ordered and therefore, when the very said order of reaudit is challenged by the appellant under section 155 of the Act by filing a revision, the private Page 17 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT respondents at whose behest the proceedings are initiated are necessary party to the proceedings.
14. The learned Single Judge has further also considered the judgment of the Division Bench in LPA No. 644 of 2016 as well as the judgment of the Apex Court in the case of Mumbai International Airport Private Limited v.Regency Convention Center and Hotels Private Limited and others reported in (2010) 7 SCC 417 and has also considered the aspect of necessary and proper party and has correctly come to the conclusion that the presence of private respondents would enable the Court, sic. the revisional authority to completely, effectively and adequately adjudicate the dispute. The aspect of locus of the private respondents, as rightly held by the learned Single Judge can be best answered by the private respondents who should be joined before the revisional authority.
15. Having considered the observations made by the learned Single Judge in the impugned judgment, more particularly in paras 13 and 14, it cannot be said that the application for joining party in the SCA No. 4764 of 2020 has not been considered by the learned Single Judge. As far as the contention raised by the appellant that the learned Single Judge has not considered the fact that no reasons are assigned by the Page 18 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT revisional authority for joining private respondents as party respondents, we find that the respondent authority has considered the submissions made by all the parties and after considering the submissions made, has observed that the private respondents herein are necessary party to the revision application. The revisional authority has considered the submissions made before it and on basis of the same has been pleased to join private respondents in the revision. It cannot be said that no reasons are assigned by the revisional authority.
16. Even if the private respondents are permitted to be arrayed as party in the revision application, the same is not likely to prejudice the appellant in any manner. This Court is of the opinion that the private respondents have initiated the proceedings and elaborate application dated 02.03.2020 on the contrary shows that the private respondents would be necessary party to the revision as it would effectively and adequately assist the revisional authority in adjudication of the dispute.
17. Even at the cost of repetition, it deserves to be noted that the private respondents are not totally alien to the appellant society. It also deserves to be noted that by filing an application under subsection(5) of Section 84, Page 19 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020 C/LPA/239/2020 JUDGMENT the authorisation of their society is not essential as it can be by any person and even suo motu by the registration on the application by a person. The provisions of section 85(5) cannot be given such restricted interpretation. Even considering the judgments of Ravi Yashwant Bhoir (supra) and Poonam (supra), relied upon by Mr. Jani, learned advocate for the appellant, this Court is of the opinion that the learned Single Judge has considered the aspect of private respondents to be necessary party in its proper perspective and the view taken by the learned Single Judge deserves to be confirmed. The aspect whether there is abuse of power or there was haste is the subject matter is to be considered by the revisional authority in the main revision. We are in total agreement with the reasons given by the learned Single Judge and no different view requires to be taken in the matter.
18. The appeal deserves to be dismissed and is hereby dismissed.
As the appeal is dismissed, no orders in Civil Application and the same stands disposed of accordingly.
(R.M.CHHAYA, J)
(ILESH J. VORA,J)
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C/LPA/239/2020 JUDGMENT
FURTHER ORDER
After the order was pronounced in the open
Court, Mr. Shivang Jani, learned advocate appearing for the appellant requested for extension of time for approaching higher forum. The same is objected by the learned advocates appearing for the respondents.
As the revisional authority has already heard all the parties and the proceedings of revision are pending only for passing of the order, in the interest of justice, we deem it fit to extend the interim direction directing the revisional authority not to pronounce the final order till 13.03.2020 to be extended till 07.04.2020.
(R.M.CHHAYA, J) (ILESH J. VORA,J) BIJOY B. PILLAI Page 21 of 21 Downloaded on : Thu Apr 09 20:53:19 IST 2020