Gujarat High Court
Shree Kadod Dudh Utpadka Sahkari Mandli ... vs State Of Gujarat on 6 November, 2020
Author: Sangeeta K. Vishen
Bench: Sangeeta K. Vishen
C/SCA/10405/2020 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10405 of 2020
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 2 of 2020
In
R/SPECIAL CIVIL APPLICATION NO. 10405 of 2020
With
CIVIL APPLICATION (FOR MODIFICATION OF ORDER) NO. 3 of 2020
In
R/SPECIAL CIVIL APPLICATION NO. 10405 of 2020
With
CIVIL APPLICATION (FOR PRODUCTION OF ADDITIONAL EVIDENCES)
NO. 4 of 2020
In
R/SPECIAL CIVIL APPLICATION NO. 10405 of 2020
With
R/SPECIAL CIVIL APPLICATION NO. 10476 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Sd/-
==========================================================
1 Whether Reporters of Local Papers may be allowed to YES see the 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 NO as to the interpretation of the Constitution of India or any order made thereunder ?
========================================================== BHARAT SUDAMBHAI PATEL Versus STATE OF GUJARAT ========================================================== Appearance:
MR PRAKASH JANI, SENIOR ADVOCATE WITH MR. ARCHIT P JANI(7304) for the Petitioner(s) No. 1,2 MS MANISHA L SHAH, GOVERNMENT PLEADER(1) WITH MS AISHWARYA GUPTA, ASSISTANT GOVERNMENT PLEADER for the Respondent(s) No. 1,2,3,5 Page 1 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT MR DILIP B RANA(691) for the Respondent(s) No. 6,7 MR DIPAN DESAI(2481) for the Respondent(s) No. 10,11,12,8,9 NOTICE NOT RECD BACK(3) for the Respondent(s) No. 4 ========================================================== CORAM: HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Date : 06/11/2020 COMMON CAV JUDGMENT
1. The issues involved in both the writ petitions being common, both the writ petitions are heard together and are being disposed of by this common CAV judgment. Special Civil Application No.10405 of 2020 is treated as the lead matter and the facts are derived from the said writ petition.
2. By this petition under Article 226 of the Constitution of India, the petitioners have, inter alia, prayed for quashing and setting aside the order dated 24.8.2020 passed by the Registrar, Cooperative Societies, i.e. the respondent No.2 (hereinafter referred to as 'the Registrar') under sub-section (2) of Section 80 of the Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as the 'Act of 1961'), nominating respondent Nos.6 and 7 as the representatives of the State Government in Surat District Milk Producers Union Ltd., i.e. the respondent No.4 (hereinafter referred to as 'the Union').
3. Tersely stated are the facts as discernible from the record:-
3.1 The petitioners are the elected members of the Union, which is the milk processing union established on 22.8.1951 with an object of collecting milk and processing and selling the same as also of providing various products like, animal feeds and veterinary services, to the members.
3.2 Upon expiry of the term of the managing Committee, the election programme was published on 8.7.2020 by the Election Officer & Deputy Collector, Surat. The election was held on 7.8.2020 for 16 seats of the Page 2 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT managing Committee followed by the declaration of results on 9.8.2020 and the petitioners were declared elected.
3.3 It is the case of the petitioners that a letter was issued by the respondent No.3 - District Registrar, Surat (hereinafter referred to as 'the District Registrar'), proposing to nominate the respondent Nos.6 and 7 as representatives of the State Government in the Board of the Union. Further, the Bharatiya Janata Party President of District and two ministers have also recommended for their nomination. The said letter was received on 19.8.2020 by the Registrar.
3.4 It is alleged that the Registrar issued a notice dated 20.8.2020 with mala fide intent for appointing the government nominees under Section 80 (2) of the Act of 1961, inter alia, stating that it is imperative for the State Government to appoint the nominees, since there is a public interest involved, with no explanation in this behalf, to the Managing Director of the Union, who according to the petitioners was not authorised to reply to the said notice. In the reply, dated 21.8.2020 of the Managing Director, it has been pointed out that as per the Bye-
law No.51 of the Bye-laws of the Union, he would not be in a position to reply to the notice. Though the notice was also addressed to the Chairman of the Union, obviously there could not have been any reply by the Chairman since the election of the Chairman and Vice-Chairman was yet to be held.
3.5 The hearing was fixed on 24.8.2020, the petitioners apprehending that the order would be passed on 24.8.2020, appointing two nominees, filed a writ petition before this court. The objections were raised by the petitioners on 24.8.2020, intimating to the Registrar about filing of the writ petition and the difficulty being faced for circulating the matter during the present set up. The petitioners also filed objections before the Registrar on 24.8.2020 to the notice dated 20.8.2020. In the objections, it has been averred that why the nominees cannot be Page 3 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT appointed and the Managing Director is not competent to file the reply on behalf of the Union. In the reply, a contention has been raised that the proposed nomination is based only on political consideration, seeking to convert majority inasmuch as, the petitioners have majority of one member in the ensuing election of Chairman and Vice-Chairman.
3.6 To the shock and surprise of the petitioners, it came to the notice that the order is passed by the Registrar late in the evening on 24.8.2020, nominating the respondent Nos.6 and 7 as nominees of the State Government in the Board of the Union. It is the case of the petitioners that the objections raised by the petitioners were disregarded and the prayer to defer the hearing till this Court adjudicates the present petition, was not accepted. In the meantime, the petitioners preferred the captioned writ petition challenging the show cause notice dated 20.8.2020 so also the proceedings initiated under Section 80 (2) of the Act of 1961 undertaken by the Registrar. Hence, the present writ petition with the aforementioned prayers.
4. The State Government appearing on advance copy has filed its common reply through its Joint Registrar (Marketing), Office of the Registrar, Cooperative Societies stating, inter alia, that the District Registrar, Surat had sent the proposal to the office of the Registrar for appointing two government nominees under Section 80 (2) of the Act of 1961 and that after the receipt of the proposal on 19.8.2020, the office of the Registrar requested for certain clarifications from the District Registrar, Surat on 20.8.2020. Simultaneously, a show cause notice dated 20.8.2020 was issued to the Chairman and Managing Director of the Union, requiring them to show cause as to why the government nominees should not be appointed followed by the response of the District Registrar, Surat on 21.8.2020. It is being stated that the Managing Director addressed a communication dated 21.8.2020 to the District Registrar, Surat, inter alia, expressing its inability to offer any Page 4 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT opinion regarding the appointment of the government nominees under Section 80 (2) of the Act of 1961 inasmuch as, as per the Byelaw No.51 of the Bye-laws of the Union, it was not within his powers.
4.1 It is stated that on 24.8.2020, an opportunity of hearing was also granted to the petitioners and the same was availed of by them. During the hearing, a letter was given by the petitioners to the Registrar, intimating about the filing of the present writ petition, inter alia, raising the objections against the notice dated 20.8.2020. After hearing the petitioners and after considering their objections, the Registrar passed the impugned order dated 24.8.2020, exercising its powers under Section 80 (2) of the Act of 1961 appointing the respondent No.6 - Rakeshkumar Ranjitsinh Solanki and respondent No.7 - Yogesh Chunilal Rajput as the government nominees to the managing Committee of the Union.
4.2 It is stated that on 31.3.2019, the Union had 1184 member societies with share subscription of Rs.12,65,20,000/- reserve and other fund worth Rs.78,84,98,959/-. That every year, there is 60.38 crore kg. of milk collected, processed and sold by the Union; approximate cost whereof is Rs.3,000 crore. Considering that the Union is a Society, the object of which is the promotion of the economic interest or general welfare of its members and considering the impact of the same on the general public, the show cause notice dated 20.8.2020 came to be issued followed by passing of the order dated 24.8.2020 after offering sufficient opportunity of hearing to the petitioners, including considering the objections raised by them.
4.3 It is also stated that looking at the wide ambit of the activities of the Union and the number of people that are impacted by its operation, it cannot be denied by the petitioners that the activities carried out by the Union, no public interest is involved. It is stated that the second requirement of Section 80 (2) of the Act of 1961 is that the government Page 5 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT should have formed an opinion as to the necessity and expediency for appointing government nominees, which would depend on facts of each case and there cannot be any criteria for determining the same. It has been clearly recorded in the show cause notice dated 20.8.2020 as well as the impugned order dated 24.8.2020 that the activities of the Union are of such a nature that public interest is involved and it is necessary and expedient to appoint two government nominees.
4.4 It is stated that the decision to appoint the government nominees has been made after following proper channels of approval in the government and after formation of an opinion regarding such appointment in the files and documents related thereto. So far as the averments made by the petitioners that the exercise of appointing government nominees under Section 80 (2) of the Act of 1961 is to tilt the balance, is not a relevant factor for determining whether powers have rightly been exercised under the provisions of Section 80 (2) of the Act of 1961.
4.5 While justifying the eligibility and qualification of the respondent Nos.6 and 7, it is stated that the only thing which needs to be considered by the respondent State while making appointment under sub-section (2) of Section 80 of the Act of 1961 is whether the person, who is to be considered for appointment as a nominee, would be able to take care of public interest ensuring that the operation of the Society does not result in detriment to such public interest, which is sufficient consideration for the State Government under Section 80 (2) of the Act of 1961. It is thus, urged that the petition is devoid of any merits, no relief as prayed for be granted in favour of the petitioners.
5. The respondent Nos.6 and 7 have appeared on caveat and a common reply has been filed on their behalf.
5.1 So far as the respondent No.6 is concerned, it has been, inter alia, stated that the respondent No.6 is (i) Chairman of Tarsadi Dudh Page 6 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Utpadak Sahakari Mandli Ltd. since last six years; (ii) Director of Agriculture Produce Market Committee, Kosamba since last ten years;
(iii) Councillor of Tarsadi Nagarpalika since last 14 years; (iv) Chairman of Asarma Seva Sahakari Mandli Ltd.; and (v) holding the post of Secretary in Surat District BJP and hence, is having background in cooperative sector so also holding a political post of the ruling party.
5.2 It is stated that the respondent No.6 being Chairman of Tarsadi Dudh Utpadak Sahakari Mandli Ltd. represented and recommended on behalf of the primary Society to contest the ensuing election of the Union as Committee member, but lost the election. However, the respondent No.6 contested the election as a representative of the primary milk Society, but there is no disqualification attached to the respondent No.6 in personal capacity. Therefore, it cannot be said that the respondent No.6 is disqualified for being nominated. The State Government has done nothing contrary to the principles laid down by this Hon'ble Court in the judgment Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. vs. State of Gujarat, reported in 1984 (2) GLR 1244 5.3 So far as the respondent No.7 is concerned, it has been stated that he is (i) Chairman of Devada Dudh Utpadak Sahakari Mandli Ltd. since last ten years; (ii) Director of Agriculture Produce Market Committee, Nizar; (iii) Director of Nizar Taluka Kharid Vechan Samiti Ltd. since last 15 years; (iv) Chairman of Devada Seva Sahakari Mandli Ltd. since last 10 years; and (v) holding the post of Deputy Sarpanch of Devada Gram Panchayat since last 20 years. Hence, it is stated that the respondent No.7 is having background in cooperative sector and also holding the elected post supporting the party in power.
5.4 It is stated that the nomination of the respondent No.7 was rejected by the Election Officer vide order dated 25.7.2020 on the ground that Devada Dudh Utpadak Sahakari Mandli Ltd. is a member Page 7 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Society of the Union and represented as a Chairman on behalf of the primary milk Society. The nomination was not rejected on the ground that the respondent No.7 had incurred personal disqualification, but it was owing to the disqualification incurred by the member Society who had not supplied the requisite quantity of milk to the Union, which led to the rejection of the nomination.
5.5 It is stated that the respondent Nos.6 and 7 have not incurred any personal disqualification as provided under Section 27 and 76B(2) of the Act of 1961, Rules and Bye-laws and the order dated 24.8.2020 passed by the State Government nominating the respondent Nos.6 and 7 is legal and after following the due process of law.
6. Rejoinder has been filed by the petitioners dealing with the reply filed by the Joint Registrar (Marketing) on behalf of the Registrar. Preliminary objection is raised against the filing of the reply by the Joint Registrar (Marketing) on the ground that the Joint Registrar (Marketing) is not a party to the present proceedings. Further, as per the provisions of Section 80 (2) of the Act of 1961, the legislature has conferred powers to the State Government, which powers have been delegated to the Registrar by the State Government vide notification dated 22.8.2006. In view of the notification dated 22.8.2006, Registrar could not have delegated the powers to answer the requirement of Section 80 (2) of the Act of 1961 to its Joint Registrar (Marketing) and the averments contained in the petitions can be answered by the Registrar and none else. Furthermore, there are averments made in the writ petition against the Registrar as regard the process undertaken in surreptitious manner on political considerations and with mala fides, which, can only be answered by the Registrar and therefore, the affidavit filed by the Joint Registrar (Marketing) is contrary to Rule 26 of the Gujarat High Court Rules, 1994.
6.1 It is next stated in the rejoinder that though the Joint Registrar Page 8 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT (Marketing) has filed the affidavit justifying the nomination made by the Registrar, the decision of the Registrar under Section 80 (2) of the Act of 1961 suffers from fundamental errors, which goes to the root of the matter and therefore, the notification / order of the Registrar is liable to be quashed and set aside. In support of such averment, it has been stated that process of appointing government nominees would require steps, namely, (i) Registrar to record his own satisfaction having regard to the public interest involved into the functioning of the Society; (ii) satisfaction has been based on his own independent application of mind on the basis of relevant material and not based on his assistant's recommendation; (iii) decision of the Registrar on the basis of material on record would require him to form an independent opinion without the influence and recommendation of anyone; (iv) Registrar to satisfy himself the necessity to appoint government nominees in a Society having regard to public interest involved into the functioning of the Society and the office of the Registrar to start searching out the suitable person under the direction of the Registrar who take care of public interest in the working of a cooperative Society; (v) Registrar on his own should make inquiry to find out a suitable person for nomination;
(vi) after completion, the Registrar is required to see that the proposed nominee fulfils the criteria laid down by the State Government for nomination in the cooperative Society; (vii) upon satisfaction of the aforesaid criteria, the Registrar is required to consult and seek the views of a cooperative Society, in which the nominees are to be appointed and consultation means a consultation with the Committee of the Society; (viii) after taking into consideration the views of the concerned cooperative Society in the form of providing hearing, Registrar would then be competent to pass the order of nomination. Therefore, it is stated that when the full-fledged procedure is followed, then only, it can be said that the nomination of the State Government is in accordance with law.
Page 9 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT6.2 It is pointed out that it is not the Registrar who has formed the opinion, but two Members of Parliament belonging to BJP formed an opinion and took the decision to nominate the respondent Nos.6 and 7. The decision of the group of BJP came to be conveyed to the District Registrar, Surat and acting on this instruction, the District Registrar, Surat addressed a letter to the Registrar to nominate the respondent Nos.6 and 7 who after receiving the letter dated 18.8.2020 acted on the same line and supported the process of nomination. After recording the procedure as envisaged under Section 80 (2) of the Act of 1961, the Registrar nominated the very same persons who were recommended by the BJP. It is thus, stated that the chronology of events suggest that the Registrar has not at all acted independently. Hence, it is stated that the nomination is purely on political considerations and not in sync with the requirement of Section 80 (2) of the Act and therefore, deserves to be quashed and set aside.
6.3 While referring to the eligibility of the respondent No.6, it is stated that the respondent No.6 cannot be appointed as a nominee as per the notification dated 8.4.2004. So far as the deletion of condition No.15 vide resolution dated 20.8.2014 is concerned, the same has been challenged on the ground that the deletion of condition No.15 of the Government Resolution dated 8.4.2004 is in direct contravention of the decision of the Division Bench in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra). It is stated that though it has been averred that the respondent No.6 is holding posts; however, the same has not been substantiated by any documents and thus, such averments need not be accepted.
6.4 While referring to eligibility of the respondent No.7, it is stated that the nomination paper of the respondent No.7 was rejected on the ground that the primary cooperative Society, which is represented by the respondent No.7, is not providing 80 ltrs. of milk in a year which Page 10 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT would suggest that the said primary cooperative Society does not have any milk cattle. Further it goes to show that the respondent No.7 as a Chairman of the Society has not contributed anything for its development inasmuch as, the said cooperative Society is not able to supply 250 gms. of milk every day. The respondent No.7 is not the resident of State of Gujarat, but belongs to Nandurbar, Maharashtra. Besides, there are criminal complaints filed against him for the offences of land grabbing, cheating and under the Negotiable Instruments Act.
6.5 While adverting to the contention of not having incurred any personal disqualification by the respondent Nos.6 and 7 as per Section 76B (2) of the Act of 1961, it is stated that the statutes or the Bye-laws do not define or distinguish personal disqualifications. It is further stated that disqualification as per Section 76 or as per Section 76B of the Act of 1961 would stand on a different footing wherein an individual would not be entitled to be a member. The yardstick for the disqualification under Section 80 (2) of the Act of 1961 would stand on a different ground for which, criteria are enumerated in the notification dated 8.4.2004.
7. The respondent Nos.6 and 7 have filed a further additional affidavit placing on record the justification in furtherance of the eligibility and qualification. So far as the respondent No.6 is concerned, it has been stated that the compromise was arrived at between the two candidates for the constituency of Mangrol Taluka which was recorded in writing vide compromise dated 31.7.2020. The said compromise was also published in the local newspaper which, clearly shows that the respondent No.6 supported the opposite candidate and therefore, it cannot be said that the respondent No.6 has lost the election.
7.1 While referring to the allegations made against the respondent No.7, it is strongly objected that the averments are incorrect. It is stated that so far as one criminal case filed under Section 138 of the Page 11 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Negotiable Instruments Act is concerned, the same was disposed of by settlement and for another two criminal cases, the respondent No.7 has been acquitted. Further, one criminal case is pending before the Trial Court. It is stated that there is no prescribed disqualification under the provisions of the Act of 1961 for appointment of government nominees if any criminal cases are filed against the candidate. It is denied that an individual having history of criminal record cannot be permitted to be the representatives of the State Government.
8. The Registrar in response to the objections raised about the admissibility of the affidavit filed by the Joint Registrar (Marketing) has filed an affidavit, inter alia, placing on record the authorisation issued by him in favour of the Joint Registrar (Marketing) to file the reply in the captioned proceedings, since the Registrar was not attending the office during that period.
8.1 It is stated that there are almost 400 - 500 specified societies and almost 80000 milk cooperative societies across the State and being the Registrar of the Cooperative Societies, the operation and management of all the issues are under his supervision. Considering such situation, as a matter of routine practice, the Registrar grants authority to the Joint Registrar and Additional Registrars to file affidavit in the court matters.
9. Mr. Prakash Jani, learned senior advocate appearing with Mr.Archit Jani and Mr. Shivang Jani, learned advocates for the petitioners submitted that the petitioners have challenged the order dated 24.8.2020 wherein, Registrar, Cooperative Societies, has appointed respondent Nos.6 and 7. The grounds for challenge are (i) Registrar has not followed the procedure as required under sub-section (2) of Section 80 of the Act of 1961; (ii) consultation with the Society has not taken place of the duly elected Committee; and (iii) the whole exercise has been undertaken with collateral motive; other than public Page 12 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT interest referred to in sub-section (2) of Section 80 of the Act of 1961. Sub-section (2) of Section 80 of the Act of 1961 is a pivotal section for consideration, simple reading whereof suggests that there has to be elements, namely, an opinion of the State Government; having regard to the public interest; and necessity or expediency so to do. It is only when all the three elements are present, the powers under sub-section (2) of Section 80 of the Act of 1961 can be exercised.
9.1 Referring to the aspect of process of forming opinion, it is submitted that the process has commenced by the letter dated 18.8.2020 of the District Registrar, Surat, which was received by the Registrar on 19.8.2020, who in turn issued a communication dated 20.8.2020 seeking certain information viz. (i) the list of the Committees of the Union; (ii) the audit and rectification of the Union and balance- sheet as on 31.3.2020 because, he must have felt for requirement of certain details for the purpose of his satisfaction. Moreover, on the same day, i.e. on 20.8.2020, the Registrar has prima facie come to the conclusion that two persons, i.e. the respondent Nos.6 and 7 are required to be nominated. As is clear from the outward number mentioned in the said two communications, the communication dated 20.8.2020, bearing outward number 317 is earlier in point of time vis-à- vis the communication dated 20.8.2020 bearing outward number 318. The Registrar not waiting for the information sought for vide the said communication dated 20.8.2020, proceeded to pass the order dated 24.8.2020.
9.2 It is submitted that the notice was issued by the Registrar on 20.8.2020 and the hearing was kept on 24.8.2020. The petitioners brought to the notice of the Registrar of they having filed the writ petition challenging the notice and in view of difficulty in getting the matter circulated, requested to defer the hearing; however, only with a view to seeing that the cause of the petitioners gets frustrated, the order dated Page 13 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT 24.8.2020 came to be passed in late evening. The action of passing the order, showing undue haste, would amount to overreaching the court proceedings. Further, immediately after the passing of the order agenda was issued by the Union to convene the first meeting of the newly elected members of the Board on 4.9.2020 for the election of Chairman and Vice-Chairman. The speed with which the entire procedure was initiated, is only with a view to seeing that two nominated representatives could cast their votes in the election of Chairman and Vice-Chairman; for the purpose of converting the majority in minority.
9.3 It is next contented that Union is a body corporate as defined under Section 37 of the Act of 1961. Therefore, the notice was required to be issued to it; however, no notice has been issued. In support of the aforesaid submission, reliance is placed on the judgment in the case of Gujarat State Co-operative Marketing Federation vs. State of Gujarat reported in 2004 (3) GLR 2342. This Hon'ble Court has held that any order passed in exercise of the powers under sub-section (2) of Section 80 of the Act of 1961 nominating the representatives, is liable to be struck down if the order is contrary to law or if relevant factors were not considered or irrelevant factors were considered in making the order or the decision was such that no responsible person would have taken it. Pointed attention is drawn to clause (f) of paragraph 10, wherein it has been observed that the appointment of representatives on the Committee of a Society by nomination under the provisions of sub- section (2) of Section 80 has "civil consequences" and therefore, the principles of natural justice are required to be observed while forming the opinion. It is further observed that for complying with the principles of natural justice, adequate and meaningful opportunity of hearing has to be given to the Society and as a part thereof, the Society has to be informed about the grounds on which the opinion as to involvement of public interest in the operation of the Society was based and the necessity or expediency for the nomination had arisen.
Page 14 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT9.4 It is submitted that this Hon'ble Court has specifically used the word "Society". Society would mean as defined in sub-section (19) of Section 2 of the Act of 1961 and it means a Cooperative Society registered or deemed to be registered under the Act of 1961. Section 74 of the Act of 1961 provides for the Committee, its powers and functions. Sub-section (1) whereof provides that the management of every Society shall vest in a Committee, constituted in accordance with the Act, which shall exercise such powers and perform such duties as may be conferred or imposed on it respectively by the Act, the Rules and the Bye-laws. It is therefore, submitted that opportunity of hearing was required to be given to the Society. After election, the Committee was not in existence and was yet to start functioning and therefore, the entire exercise undertaken by the Registrar is bad.
9.5 It is submitted that no notice is issued to Union but is issued to the Chairman and Managing Director who cannot be said to be the Society. Further, no consultation with Union has taken place. Consultation with the Society would mean consultation with the Committee of the Society as constituted under sub-section (5) of Section 2 of the Act of 1961 and not with the Chairman or Managing Director as they are not Committee within the meaning of the definition of Committee referred to sub-section (5) of Section 2 of the Act of 1961. It is contended that Society would mean the members of the Committee and no meeting of the newly elected members of the Committee had taken place. It was expected of the Registrar to have deferred the hearing till the newly elected Committee members assumed the office as Committee members because, there was no extraordinary urgency to nominate the two persons requiring special service.
9.6 It is submitted that under sub-section (2) of Section 80 of the Act of 1961, it is the State Government who has to form the opinion and formation of opinion by the State Government is condition precedent Page 15 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT and very much vital for the exercise of the powers by it. However, in the present case, the Registrar has not formed any independent opinion, but the opinion, as is evident from the letter dated 18.8.2020 of the District Registrar, Surat, is of the political leaders of BJP. Besides, the District Registrar is a subordinate officer to the Registrar and was not asked by the Registrar to send the proposal and had no authority to write such letter. It is submitted that the Apex Court has held that if the orders are passed by the authorities at the behest and dictates of someone else, the orders are liable to be quashed and set aside. Reliance is placed on the judgments in the case of State of U.P. vs. Maharaja Dharmendra Prasad Singh vs. Maharani Raj Laxmi Kumari Devi reported in (1989) 2 SCC 505 and in the case of Anirudhsinhji Karansinhji Jadeja vs. State of Gujarat reported in (1995) 5 SCC 302.
9.7 It is submitted that the Registrar instead of forming his independent opinion blindly followed the communication and initiated the proceedings very next day. Therefore, there was no satisfaction recorded by the Registrar nor has he formed any opinion that there is a public interest involved in the operation of Union requiring nomination of two persons as their representatives. The said act on the part of the Registrar is a clear case of abandonment and abdication of function by him while passing the order dated 24.8.2020. Therefore, the nomination by the Registrar contrary to the spirit of sub-section (2) of Section 80 of the Act of 1961 and hence, deserves to be quashed and set aside. In support of such contention, reliance is placed on judgment in the case of Bhikhubhai Vithalbhai Patel vs. State of Gujarat, reported in (2008) 4 SCC 144.
9.8 While referring to the concept of public interest, it is submitted that in the show-cause notice dated 20.8.2020 as well as the order dated 24.8.2020, there is a reference to the working of the Union, that by itself, cannot be construed as public interest. Recording of vast level Page 16 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT of working, reference of reserve funds, members etc. as public interest, is not correct. Concept of public interest is different than large voluminous working of cooperative Society and the Registrar going by vast volume and turnover of the Union to hold that there is a public interest involved, went completely wrong. Therefore, the order dated 24.8.2020 is bad on this count as well, as, the Registrar has not applied correct parameters to determine the public interest.
9.9 Resultantly, the requisites of sub-section (2) of Section 80 of the Act of 1961 are not satisfied and therefore, the entire decision making process is vitiated. The Registrar has taken into account irrelevant factors and other considerations while passing the order dated 24.8.2020 which is not relatable to sub-section (2) of Section 80 of the Act of 1961 and it is well settled position of law that if irrelevant considerations have crept in, into the decision making process, the order is liable to be quashed and set aside. The Registrar and the officers, of the State Government are to act as per law and not as per the desire of political masters. In furtherance of the aforesaid submissions, reliance is placed on the judgments in the case of (i) Sachidanand Pandey vs. State of West Bengal reported in AIR 1987 SC 1109; (ii) Tarlochan Dev Sharma vs. State of Punjab & Haryana reported in (2001) 6 SCC 260; and (iii) State of Madhya Pradesh vs. Sanjay Nagayech reported in (2013) 7 SCC 25.
9.10 While adverting to the challenge to the Government Resolution dated 20.8.2014, it is submitted that the Government Resolution dated 8.4.2004 prescribed the guidelines and was in conformity with the judgment of this court in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) which still holds the field. The State Government in defiance of the principle laid down by this court, has issued the Government Resolution dated 20.8.2014 whereby, the condition No.15 of Government Resolution dated 8.4.2004, came to be Page 17 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT deleted meaning thereby, a defeated candidate or a candidate who has lost the election can now be nominated by the State Government. The Government Resolution dated 20.8.2014 is the subject matter of challenge; however, the State Government has not bothered to file affidavit, defending the said Government Resolution, except brief argument that the challenge is laid in the year 2020 and such belated challenge shall not be entertained. The principle was followed since the year 2004 till the year 2014 and thereafter, illegality has been committed and what is not legally permissible remains illegal. It is thus, urged that in absence of any affidavit filed by the State Government justifying the issuance of the Government Resolution dated 20.8.2014, the averments made in the petition are required to be accepted and the resolution deserves to be quashed and set aside and while doing so, contempt proceedings are required to be initiated against the State Government considering the fact that the said resolution, is in the teeth of the principles laid down by this court in the judgments, namely, Amreli District Cooperative Sales and Purchase Union Ltd. (supra).
9.11 Adverting to the qualifications of the respondent Nos.6 and 7, it is submitted that the nominations of respondent Nos.6 and 7 are arbitrary and against the law laid down by this Hon'ble Court in paragraph 79 of the Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. (supra), as also the law laid down by the Hon'ble Division Bench in the case of Gujarat State Co-operative Marketing Federation (supra). The two judgments of the Division Bench, take a view that Government nominees should be appointed after following the procedure. There is an audacity on the part of the State Government in defying the principle laid down in the aforesaid judgments. The guidelines have been provided by the State Government in the nature of Government Resolution dated 8.4.2004, which has considered the earlier resolutions from 17.9.1984 till 8.4.2004. Item No.15 disqualifies the appointment of a nominee, who has lost the election of the Society.
Page 18 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENTThe respondent No.6 is a defeated candidate.
9.12 Adverting to the merits of the appointment of respondent No.7, it is submitted that the respondent No.7 is the resident of Nandurbar, Maharashtra and not the resident of Gujarat which aspect is fortified by the receipt of property tax, issued by the State of Maharashtra, indicating the residential address of the respondent No.7. Further, there are numerous criminal cases pending against him in various courts which pertain to the offences of land grabbing, cheating and under the Negotiable Instruments Act, 1881, having a history of criminal record.
It is further submitted that when the nomination of the respondent No.7 was objected on the ground that the milk supplied by his Society was meagre to which, the respondent No.7 had given incorrect facts before the Election Officer contending that his primary cooperative Society could not supply adequate milk as there was epidemic in the area, which was a false statement and the same was pointed out by the officer of the Union, which fact is recorded in the order by the Election Officer while rejecting the nomination of respondent No.7.It is thus submitted that the respondent No.7 could go to the extent of making incorrect assertions amounting to false declaration before the public officer in an attempt to contest the election.
9.13 It is submitted that the appointment of respondent No.7 is sought to be defended on the ground that the respondent No.7 was not disqualified, but was disqualified on the ground that the primary Society, which the respondent No.7 was representing, has not procured the requisite amount of milk. Even on this count, the nomination of the respondent No.7 is bad inasmuch as, such person is nominated, whose primary Society is unable to supply 80 ltrs. of milk in a year. Besides, the respondent No.7 is Chariman of Devada Dudh Utpadak Sahkari Mandli Limited since last 10 years and he could not bring his Society atleast to the level of providing 80 ltrs. of milk per annum. Once a Page 19 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT person becomes a member in the cooperative Society, he loses his identity and the said person is part and parcel of cooperative Society and therefore, cannot now be permitted to contend that the disqualification of his cooperative Society is distinct and separate from his identity. The respondent No.7, with this background and qualification, has been appointed to the prestigious Union. It is submitted that item No.7 of the Government Resolution dated 8.4.2004 unequivocally provides that the persons to be appointed should be connected with the cooperative societies and should be aware of the cooperative principles. In the present case, looking to the background of the respondent No.7, he does not fulfill the said condition of the Government Resolution dated 8.4.2004, therefore, both the respondent Nos.6 and 7 do not possess minimum eligibility criteria as required for the purpose of nominating them as Committee members.
9.14 Adverting to the procedural aspect, it is submitted that the Registrar has been arraigned as respondent No.2; however, affidavit is filed by the Joint Registrar (who is not even a party to the captioned proceeding). Clearly, this affidavit cannot be said to be an affidavit of the Registrar. The legislature has conferred the powers to the State Government and the State Government in turn, in exercise of the powers conferred under Section 162 of the Act of 1961, has issued the notification dated 22.8.2006 and the Registrar has been conferred powers by the virtue of the notification and not by virtue of different provisions of Sections. Therefore, when the powers of Registrar are brought into the issue, it is the Registrar only who is competent to file the affidavit.
9.15 It is submitted that when it is contended that the action of the Registrar is arbitrary and suffers from non-application of mind etc., it is the Registrar only who is competent to file the affidavit. In the affidavit filed by the Joint Registrar (Marketing) it has been stated that the Page 20 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT decision to appoint the government nominee has been made after following proper channels of approval in the government file and after formation of an opinion regarding such appointment in the files and documents related thereto. In fact, in the writ petition, various averments have been made relating to the aspects, namely, (i) the impugned show cause notice issued by the respondent being illegal, arbitrary, mala fide; (ii) no public interest involved and the grounds mentioned in the impugned notice vis-à-vis Section 4 is illusionary and not germane; (iii) pre requisites for the issuance of notice are not satisfied; (iv) oblique motive of the State who have control of the Union by appointing the Chairman of the choice; (v) No opinion formed as also no reasons assigned as to show the conclusion arrived at with respect to public interest; and (vi) abandonment and abdication of the function by the Registrar, Cooperative Societies by passing order under sub- section (2) of Section 80 of the Act of 1961. These averments in the petitions are direct challenge to the Registrar having not fulfilled the requisites for exercising the powers under sub-section (2) of Section 80 of the Act of 1961 and could have been answered only by the Registrar. The averments and contentions are not specifically dealt with even by the Joint Registrar (Marketing) in the affidavit-in-reply.
9.16 It is next submitted that the selective presentation of details has been made which is contrary to the law enunciated by the Hon'ble Supreme Court in the case of SP Gupta vs. President of India & Ors. reported in AIR 1982 SC 149, more particularly, paragraphs 63, 64 and 65 of the judgment. Paragraph 65 refers to the transparency and openness and making available to the public at large the decision making process. The conduct of the State Government in the present case, is contrary to the spirit laid down by the Apex Court of not disclosing the entire material before this Court. It is submitted that any party may chose not to file an affidavit; however, the Apex Court has frowned upon the element of secrecy.
Page 21 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT9.17 While concluding, Mr. Prakash Jani, learned senior advocate, has summarized the submissions, which are as under:-
(i) Registrar has contravened the scheme of sub-section (2) of Section 80;
(ii) Registrar has acted under the dictates of the Ministers, Members of Legislative Assembly and Party President;
(iii) Registrar has taken into consideration irrelevant material and material de hors the scheme of sub-section (2) of Section 80 of the Act of 1961.
(iv) The decision of the Registrar is contrary to law laid down by the two judgments of this Hon'ble Court in the case of Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. vs. State of Gujarat (supra) and Gujarat State Co-operative Marketing Federation vs. State of Gujarat (supra);
(v) On merits also, the decision to appoint respondent Nos.6 and 7 is bad.
(vi) The decision is taken in hot haste inasmuch as, on 18.8.2020 the process was initiated and within a period of six days and order dated 24.8.2020 came to be passed nominating the respondent Nos.6 and 7.
(vii) Total 19 members are there, 16 elected and 3 nominated. The entry of two persons at the time of election of Chairman and Vice-
Chairman is vitiated by mala fides. The decision was taken on 24.8.2020 followed by agenda immediately on 26.8.2020. It could have waited till the decision by a democratically elected body by exercising the collective wisdom of appointing the nominees of the State Government.
(viii) Appointments have the effect of unsettling the settled norms and have direct and indirect effect on the fundamental rights under Article 19(1)(g) of the Constitution of India to form a Cooperative Society. Further, it has the effect of violating directive principles of State policy i.e. Article 43 of the Constitution of India.
9.18 It is urged to quash and set aside the Government Resolution dated 20.8.2014 as also the decision dated 24.8.2020, nominating the respondent Nos.6 and 7 and grant of other reliefs.
Page 22 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT10. Mr. Dipan Desai, learned advocate for the respondent Nos.8 to 12 at the outset submitted that sub-section (2) of Section 80 of the Act of 1961 relates to the power of the State Government to appoint a government nominee. The State Government, if is of the opinion that having regard to the public interest involved in the operation of the Society, it is necessary or expedient so to do, it may nominate its representative on the Committee of such Society.
10.1 While laying emphasis on the expression nominate its representatives "on the Committee", it is submitted that Committee which is referred to in sub-section (2) of Section 80 is a Committee referred to in sub-section (1) of Section 74, that is, a Managing Committee. Hence, the question which arises is as to who can object? It is only the Committee, who can object to the nomination by the government. The said two directors in their individual capacity cannot be said to be a Committee, read in the context of sub-section (2) of Section 80 with sub-section (1) of Section 74 of the Act of 1961.
10.2 It is submitted that the respondent Nos.8 to 12 are also questioning the locus of the petitioners in maintaining the writ petitions. It is only the Committee which can authorize the Directors and then the Directors can challenge the said decision. It is not permissible to the petitioners to object on behalf of the Committee, more particularly, when there is no objection by other Committee members and the Union has not challenged the appointment. Only two persons can be said to be aggrieved by the decision of the State Government nominating its representatives, namely, Committee and the Society and the majority members of the committee have agreed to the decision of the State Government nominating its representatives.
10.3 Coming to the second limb of contention, it is submitted that the issue which requires to be considered is that will the petitioners fall Page 23 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT within the term "aggrieved party". It is submitted that their two votes in the Board of Directors out of 19 or 18 that is also not affected. Neither the membership nor directorship will be affected by the order of the State Government and it is urged that the court may not entertain the petitions considering the fact that neither any statutory right nor any legal right of the petitioners has been affected. In absence of any infraction of any statutory right much less any legal right, the petitions should not be entertained. The contention raised on behalf of the petitioners that by nomination of two nominees of the Government, the autonomy and democratic functioning of the Society is sought to be jeopardized. It is submitted that the petitioners are not running the Society; therefore, it cannot lie in the mouth of the petitioners to say that their right is affected and/or jeopardized. Thus, the respondent Nos.8 to 12 are questioning the locus of the petitioners and also the aspect that the petitioners cannot be said to be an aggrieved party. Therefore, on both the counts, the petitions cannot be entertained viz. that the petitioners have no locus to challenge the order and the petitioners cannot be said to be an aggrieved party.
10.4 Adverting to the third contention, it is submitted that the petitioners have already filed their objections. The purpose of the notice was to make them aware about the proposed nominees to which, the petitioners as aforesaid, have filed their objections. That they were not authorized to file any objections on behalf of the other elected Directors. Hence, the petitioners cannot complain of violation of principles of natural justice.
10.5 Proceeding further with the next contention, it is submitted that whether 'X' person is to be nominated or 'Y' person is to be nominated is purely within the discretion of the State Government. Sub-section (2) of Section 80 of the Act of 1961 provides that there has to be a public interest involved. The petitioners cannot challenge the selection of Page 24 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT respondent Nos.6 and 7 because, it is the decision of the State Government which is the authority to decide the person who would be best suited and who will cater and protect the interest of the State Government. Purpose of such appointment is that there is a watchdog in the Committee who will be representing the State for protecting the State's interest. Therefore, every decision that is taken by the managing Committee, they will be part of the decision where they can object and question and can also report to the State Government, which is the main purpose of appointment. Therefore, decision to appoint a suitable person should be best left to the discretion of the State Government.
10.6 It is next submitted that the District Registrar has sent the report observing about the suitability of the respondent Nos.6 and 7. Pursuant to the recommendation of the District Registrar, order dated 24.8.2020 is passed and before passing the order, a show cause notice dated 20.8.2020 was issued and the petitioners objected to this, by filing a detailed reply dated 24.8.2020. In the reply it has been stated that it is only the elected members of the board, who has authority to give reply to the notice and not the Managing Director and unless the members are elected, meeting is held or the charge is taken over, the State Government may not initiate any proceedings for nominating its nominees. The main contention of the petitioners was that the order dated 24.8.2020 has been passed with a view to tilt the balance in the election of Chairman and Vice-Chairman, that contention does not now survive. Such impression of the petitioners is misplaced and incorrect because, the petitioners are not having majority. Therefore, main basis of the arguments no longer survive, more particularly, in view of the statement that the votes of the two government nominees will not be counted and result may be declared by considering the votes of only 19 members of the Committee. In fact, after the election, the substratum of the grievance has lost.
Page 25 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT10.7 While referring to order dated 24.8.2020, it is submitted that the State Government has to see and has seen the public interest together with two resolutions, guidelines and the eligibility of two persons. The State Government has applied the provisions of Government Resolutions dated 8.4.2004 as well as 20.8.2014 and has also considered relevant aspects, which are reflected from the affidavit of the State Government. Therefore, there is sufficient application of mind and no error has been committed by the respondent No.2 - Registrar in passing the order dated 24.8.2020. The petitions are devoid of any merits and may be dismissed.
11. Ms. Manisha L. Shah, learned Government Pleader with Ms.Aishwarya Gupta, learned Assistant Government Pleader appearing for the State Government, at the outset, raised the objection as regards the maintainability of the captioned writ petition. Following submissions are made in support of such objections:-
11.1 That the present petition has been filed by only two of the Directors of the Union. Once a person becomes a member of the cooperative Society, he loses his individuality qua the Society and he has no independent rights except those given by him by the statute and Bye-laws. The member must act and speak through the Society or rather, the Society alone can act and speak for him qua rights or duties of the Society as a body. Therefore, the petition filed by the two Directors of the Union is not maintainable as they do not have any individual rights to prefer the captioned writ petition.
11.2 The fact that it is just the two Directors who have approached the Hon'ble Court clearly proves that the Society is not aggrieved party.
Upon receipt of the notice, except the two petitioners, none of the other Committee members approached or registered their grievance, meaning thereby the decision of the State Government nominating the Page 26 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT respondent Nos.6 and 7 is acceptable to them.
11.3 Furthermore, Section 74 states that the management of every Society shall vest in a Committee and sub-section (2) of Section 80 of the Act of 1961 provides that the appointment of a government nominee is on the Committee. Moreover, Section 74C of the Act of 1961 makes it clear that the terms of the elected members of the managing Committee shall be five years from the date of the election. As held in the judgment in the case of Pravinsinh Hemantsinh Zala & Ors. vs. State of Gujarat & Ors. rendered in Special Civil Application No.23321 of 2019, five years tenure is to be computed from the day the member is elected and not from the date of the first meeting. Therefore, a conjoined reading of both the objections would indicate that the petitioners did not represent the collective will of the Committee or the Society and the Society ought to have approached the Registrar and this Hon'ble Court, had it been agitated.
11.4 In support of the aforesaid submissions, reliance is placed on the judgment in the case of Daman Singh & Ors. vs. State of Punjab & Ors. reported in (1985) 2 SCC 670, wherein, it has been held that once a person becomes a member of a cooperative Society, he loses his individuality qua the Society and he has no independent rights except those given to him by the statute and the Bye-laws. It is further held that a member must act and speak through the Society or rather the Society alone can act and speak for him qua rights or duties of the Society as a body.
11.5 Further, reliance is placed on the judgment in the case of State of U.P. & Anr. vs. C.O.D. Chheoki Employees' Co-op. Society Ltd. & Ors. etc. reported in (1997) 3 SCC 681. Reliance is placed on paragraphs 14 and 15 to contend that the Apex Court has taken note of the judgment in the case of Daman Singh vs. State of Punjab (supra). Paragraph 15 takes note of the judgment in the case of Toguru Page 27 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Sudhakar Reddy & Anr. vs. Government of A.P. & Ors. rendered in 1993 Supp. (4) SCC 439 wherein, it has been, inter alia, held that a member of the Society has no independent right qua the Society and it is the Society that is entitled to represent as a corporate aggregate. No individual member is entitled to assail the constitutionality of the provisions of the Act, rules and the bye-laws as he has his right under the Act, rules and bye-laws and is subject to its operation. The ratio laid down in the Gujarat State Co-operative Marketing Federation Ltd. (supra) makes it amply clear that the appointment of the nominees under 80(2) of the Act of 1961 is to the Committee of the Society. Thus, the petitioners are not aggrieved persons and the present petition is not maintainable.
12. While referring to the aspect of public interest, it is submitted that public interest is involved right from the stage of inception and registration of a Society. The phrase public interest involved in the operation of a Society only expands the scope of public interest since the operation of a Society may affect so many persons other than its members and may have several social, economic and legal repercussions. The object for which the Society is formed may have a direct bearing on the interest of the public within the area of its operation. Besides, a direct financial stake of the government in the Society, public interest in and financial assistance to a Society is expressly envisaged in the scheme of the Act of 1961.
12.1 A conjoined reading of sub-section (1) of Section 80 and sub- section (2) of Section 80 of the Act of 1961 would show that the government has right to appoint the government nominees and it is incorrect to argue that there needs to exist and extraordinary situation for the State to invoke its right under Section 80 (2) of the Act of 1961 inasmuch as, the petitioners have attempted to equate "expediency" with "exigency". Meaning of expediency is "suitable" and/or "as per Page 28 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT convenience". Such contention of the petitioners, is nothing but an attempt to extrapolate the contents of interpretation of Section 80 (2) of the Act of 1961. Expediency in the context of "public interest involved"
expands the scope of public interest since the operation of a Society may affect so many persons other than its members and may have several economic and legal repercussions.
12.2 It is submitted that the show cause notice and the order dated 24.8.2020 passed under sub-section (2) of Section 80 of the Act of 1961 clearly refer to the public interest which is not just limited to the financial stake. The Union has 1184 member societies, producing almost 63 crore kgs. of milk per year. Considering the structure of the milk, there are 2,48,000 members of the member societies. This would indicate as stated in the show-cause notice and order date 24.8.2020 that the impact of the Union at the grass root level is great, touching the lives of many people and therefore, the public interest. The public interest is derived from the fact that the entire movement creates ripples reaching to the beneficiary at the end of the chain.
12.3 It is next submitted that such exercise of right is not violative of Articles 19(1) or 19(1)(g) or 43 of the Constitution of India. A right to form an association guaranteed under Article 19(1)(c) does not imply the fulfilment of every object of an association as it would be contradictory to the scheme underlying the text and the frame of several fundamental rights guaranteed by Part III and particularly by the scheme of guarantees conferred by sub-sections (a) to (g) of clause (1) of Article 19 and therefore, such right is subject to reasonable restriction as provided in the Constitution.
12.4 It is submitted that there is not a whisper of "public interest"
either in the reply dated 21.8.2020 by the Managing Director or in the reply dated 24.8.2020 by the petitioners. This would indicate that there is an implicit acceptance by the petitioners of the existence of the public Page 29 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT interest in the operation of Union. In support of the aforesaid contention, the reliance is placed on judgments in the case of (i) Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. (supra); and (ii) Gujarat State Marketing Co-operative Federation Ltd. (supra). It is submitted that this court has held and observed that a cooperative Society is but an association of persons pursuing business, trade or service activities on purely commercial lines. On the contrary, public interest is involved right from the stage of inception and registration of a Society. The phrase "public interest involved in the operation of a Society" only expands the scope of public interest since the operation of a Society may affect so many persons other than its members and may have several social, economic and legal repercussions. The objects for which the Society is formed may have a direct bearing on the interests of the public within the area of its operation. Further reliance is placed on the judgment in the case of Daman Singh (supra). It is contended that the Apex Court has held that the very philosophy and concept of the cooperative movement is impregnated with the public interest.
13. While dealing with the aspect of violation of principles of natural justice, it is submitted that the contention by the petitioners that the present case has a peculiar situation as the members of the Committee despite having been elected for all practical purposes, the Committee was not in existence as no meeting of the Committee had been held and therefore, the notice under sub-section (2) of Section 80 should have been issued to all individual members of the Committee. It is submitted that a distinction needs to be drawn between the service of notice to the Society and hearing of individual members. Considering the ratio laid down in Daman Singh (supra), only the Society was required to be served with the notice and not the individual members. Hearing of the individual members is a consequential event and that has also been satisfied in the present case.
Page 30 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT13.1 However, claim that each individual member is to be served separately, would be a misnomer considering the fact that it is only the Society which is required to be served and which has been validly done through the Managing Director. Bye-law No.51 of the Union provides for the responsibility of the Managing Director and bye-law No.51 (7) clearly states that it shall be the duty of the Managing Director to execute all correspondence and furnish all information.
13.2 The Managing Director in reply dated 21.8.2020 has clearly stated that the power to challenge the decision of the authority is that of the Union. Undisputedly, the Union has not challenged the impugned order. Further, even the petitioners in their reply dated 24.8.2020 stated that the right to respond the show-cause notice belongs to the elected Board of Directors. Such contention of the petitioners would indicate that the petitioners were aware of the fact that the notice had been served to the Union through the Managing Director and therefore, such contention was raised in the reply to the show-cause notice. Additionally, the notice to the Managing Director would be a sufficient notice to the Society, i.e. the Union which is a body corporate. Reliance is placed on the judgment in the case of M/s. Bilakchand Gyanchand Co. vs. A. Chinnaswami reported in (1999) 5 SCC 693. The Apex Court, considering the provisions of Sections 138 to 142 of the Negotiable Instruments Act, has held that the notice issued to the Managing Director of the company who signed the cheques, was sufficient notice and the High Court was not justified in quashing the complaint on the ground that notice was sent to the Managing Director, that could not mean that the notice was sent to the company itself. Further reliance is placed on the judgment in the case of Sarabjit Singh vs. State of NCT of Delhi & Ors. reported in 2018 SCC OnLine Del 12257. The Delhi High Court, followed the principle laid down by the Apex Court in the case of Bilakchand Gyanchand Co. (supra).
Page 31 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT13.3 The principles of natural justice cannot be applied using a straightjacket formula and in order to raise a contention of violation of principles of natural justice, it is imperative for the petitioners also to prove that serious prejudice has been caused by such denial. The fact that the petitioners responded to the show-cause notice while mentioning about the rights of the Board to respond to the same, is not an indication of their proactiveness, but rather shows that the petitioners knew that the show-cause notice had been addressed to the Society through the Managing Director.
13.4 Reliance is placed on the judgment in the case of State Bank of Patiala vs. S.K. Sharma reported in (1996) 3 SCC 364. It is submitted that the Apex Court while summarising the principles from the earlier judgments in paragraph 33 has, inter alia, held that in the case of violation of a procedural provision, the position is that the same are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under "no notice", "no opportunity"
and "no hearing" categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. It is further held that if no prejudice is established to have resulted therefrom, it is obvious, no interference is called for.
13.5 Further reliance is placed on the judgment in the case of M/s. A.S. Motors Pvt. Ltd. vs. Union of India & Ors. reported in (2013) 10 SCC 114 to submit that it has been held that rules of natural justice, are not rigid, immutable or embodied rules that may be capable of being put in straitjacket nor have the same been so evolved as to apply Page 32 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT universally to all kind of domestic tribunals and enquiries. A court examining a complaint based on violation of rules of natural justice is entitled to see whether the aggrieved party had indeed suffered any prejudice on account of such violation.
13.6 Further reliance is placed on the judgments in the case of Om Prakash Mann vs. Director of Education (Basic) & Ors. reported in (2006) 7 SCC 558; Aligarh Muslim University & Ors. vs. Mansoor Ali Khan reported in (2000) 7 SCC 529 as well as judgment in the case of Transmission Corporation of A.P. vs. Sri Rama Krishna Rice Mill reported in (2006) 3 SCC 74 to contend that the Apex Court, has consistently held that the parameters of the principles of natural justice cannot be covered by any straitjacket formula and that it would vary depending upon the circumstances involved.
14. While referring to the contention of the communication dated 18.8.2020 addressed by the District Registrar, Surat, it is submitted that the requirement of a "self-generated opinion" is an incorrect interpretation of the provisions and the statute may be read as it is. It is impermissible to the petitioners to read the expression "self-generated opinion into the provisions" and therefore, it cannot be said that the decision making process observed by the Registrar is vitiated.
14.1 The opinion under sub-section (2) of Section 80 has to be framed by the State Government and vide the notification dated 22.8.2006, the State Government has delegated its powers under sub- section (2) of Section 80 of the Act of 1961 to the Registrar. The District Registrar being a part of the governmental machinery, he was well within his right to issue the communication dated 18.8.2020 and therefore, the argument of the petitioners to segregate one limb of the government machinery from another is impermissible. There is no requirement in the statute for the opinion under Section 80 (2) to be independent and the same can be on the application of a party, what is Page 33 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT mandated is that the decision should be that of the State Government.
14.2 The essential decision making authority was not delegated. The District Registrar is entrusted with many other functions under the Act of 1961 and merely forwarding the proposal to the Registrar, Co-operative Societies was well within his rights. In fact, complete transparency was adopted in the process with reference to request by elected representatives while there cannot be sub-delegation of any essential functions in order to attend the intended object of the delegation. The non-essential functions can be sub-delegated to be performed under the authority and supervision of the delegate. Once the power is conferred after exercising the said power, how to implement the said decision taken in the process is a matter of procedure. Moreover, the bare perusal of the communication dated 18.8.2020 would further indicate that the basis of the show-cause notice dated 20.8.2020 and the order dated 24.8.2020 are separate and distinct from the communication dated 18.8.2020 of the District Registrar. The independent application of mind of the Registrar is writ large in his order dated 24.8.2020, which is not a mere reflection of the communication of the District Registrar. Neither the communication dated 18.8.2020 of the District Registrar nor the communication dated 20.8.2020 by the Registrar seeking information vitiates the prima facie opinion formed by the Registrar as the subjective satisfaction and the final opinion in respect of the same was arrived at after hearing all the concerned, including the petitioners.
15. Adverting to the contention of an order having been passed under political dictates, it is submitted that the democratically elected government representatives recommend for the effective implementation of its policies and programmes, appointment of nominees was necessary and that too in a specified Society having such a large operation, the same cannot be alleged to have been Page 34 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT vitiated by allegations of mala fides, which are easily levelled. In the facts of the case, the allegations are not supported by any credible evidence except bald allegations against the various political leaders without being joined them as party respondents, which is the basic requirement when one makes allegations of mala fides. It is well settled proposition of law that judgments; political issues are not "justiciable issues and appeal should be to the polls and not to the courts".
15.1 Reliance is placed on the judgment in the case of Jagdishbhai Mafatlal Patel vs. State of Gujarat reported in AIR 2002 Gujarat 329. Reliance is made in the case of Bhut Nath vs. State of West Bengal, reported in AIR 1974 SC 806, wherein, it is held that political issues are not justiciable issues and the appeal in that behalf should be to the polls and not to the courts. Further reliance is placed on the judgment in the case of Shree Rajkot District Co-operative Milk Producers Union Ltd. vs. Bhanubhai Labhubhai Mehta reported in 2014 SCC OnLine Guj 1248.
16. While referring to the contention that the two documents were issued on the same date, i.e. 20.8.2020, i.e. the show-cause notice under sub-section (2) of Section 80 of the Act of 1961 and the other communication by the Registrar to the District Registrar asking for some documents and that relevant material was not considered while passing the order dated 24.8.2020, it is submitted that a bare perusal of the show-cause notice dated 20.8.2020 would indicate that all the relevant details demonstrating public interest have been referred to in both the documents and such details and documents were already in the possession of the Registrar. An internal communication between the two authorities cannot be used as a basis to allege mala fides and no adverse inference can be drawn on the basis of such communication which was issued only for the purpose of completion of certain formalities. The Registrar, being responsible for the supervision and Page 35 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT management of all cooperative societies in the State is adequately possessed of relevant material to justify the issuance of the show-cause notice.
17. As regards the objection of filing of affidavit by the Joint Registrar and not the Registrar, it is submitted that it is required to be noted that sub-section (17) of Section 2 of the Act of 1961 provides for the definition of the "Registrar" and which includes "Additional Registrar"
or "Joint Registrar". Further, filing of the affidavit-in-reply is a ministerial task and that there is no sub-delegation of the powers vested in the Registrar under sub-section (2) of Section of the Act of 1961. Moreover, only the authority to affirm the affidavit has been conferred upon the Joint Registrar by the Registrar. The essential decision making has been carried out by the Registrar. So long as the essential function of decision making is performed by the delegate, the burden of performing the ancillary and clerical task need not be shouldered by the primary delegate. To substantiate the said aspect, noting of the file has been referred to, annexed along with the affidavit of the Registrar granting authority to the Joint Registrar (Marketing).
17.1 It is submitted that practical necessities or exigencies of administration require that the decision making authority has been conferred with statutory powers, to be able to delegate task when the situation so requires. There are almost 400 - 500 specified societies and almost 80000 cooperative societies in the State of Gujarat and being Registrar, Co-operative Societies, the operation and management of all its societies is under the supervision of the Registrar. Considering such circumstances, as a matter of routine practice, the authority is granted to the Joint Registrar/Additional Registrar to file affidavit on behalf of the Registrar in the proceedings before the courts.
17.2 Reliance is placed on the judgment of the Apex Court in the case of Siddharth Sarawgi vs. Board of Trustees for Port of Kolkata and Page 36 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Ors. reported in (2014) 16 SCC 248 to submit that it has been held that practical necessities or exigencies of administration require that the decision making authority who has been conferred with statutory power, be able to delegate tasks when the situation so requires. Thus, the maxim delegatus non potest delegare, gives way in the performance of administrative or ministerial tasks by subordinate authorities in furtherance of the exercise of the delegated power by an authority.
17.3 Further reliance is placed on the judgment of the Apex Court in the case of The Inspector General of Registration, Tamil Nadu & Ors. vs. K. Baskaran rendered in Civil Appeal No.2586 of 2020. It is submitted that principles have been culled out from the earlier judgments and it has been, inter alia, observed that even in case of sub- delegation, so long as the essential function of decision making is performed by the delegate, the burden of performing the ancillary and clerical task need not be shouldered by the primary delegate and it is not necessary that the primary delegate himself should perform the ministerial acts as well; and practical necessities or exigencies of administration require that the decision-making authority who has been conferred with statutory power, be able to delegate tasks when the situation so requires.
18. While dealing with the qualification of two nominated Directors, it is submitted that the contention of the petitioners that the government nominees need to be experts or great contributors to their field having maximum knowledge of cooperative societies, in absence of which the State Government is precluded from appointing them, the said reading, is extrapolation of the interpretation of the provision, as there is no such requirement mentioned in the provision. The nominated Directors like other Directors carry on the function as a part of the Board under Byelaw No.42 and are not required to be the experts in the field. The qualification to be appointed as a government nominee having Page 37 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT nominated in the Government Resolution dated 8.4.2004, namely, suggest membership of Society for atleast one year; no pending loans; awareness about the principles of cooperative societies; no disqualification as per the Bye-laws of the Society to which he is being appointed etc.
18.1 The respondent No.7 is Chairman of the Devada Dudh Utpadak Mandli Ltd. and also the Chairman of the Devada Seva Sahkari Mandli Ltd. From the past 10 years. Further, he is a Director of APMC, Nizar and Nizar Taluka Kharid Vechan Sangh from the past 10 years. Respondent No.7 also possesses additional qualifications, namely, deposited milk in the primary Society for 365 days; not a salaried employee of the primary Society; has not taken any loan from such primary Society; not being held responsible as per Sections 82, 90 and 93 of the Act of 1961; and has not incurred any personal disqualifications in terms of Sections 27, 76B or 145 of the Act of 1961. Further, mere rejection of nomination form due to disqualification incurred by the member Society, would not disentitle the respondent No.7 to be appointed as a government nominee under sub-section (2) of Section 80 of the Act of 1961. Byelaw No.35(B) provides for personal disqualifications that the representative should hold for being elected as a Director; however, the respondent No.7 has not incurred any disqualification as provided in Byelaw No.35(B).
18.2 Adverting to the qualification of respondent No.6, it is pointed out that he is the Chariman of Tarsadi Dudh Utpadak Sahkari Mandli Ltd. (Mangrol, Surat) from the past 6 years and is also a Director of APMC, Kosamba from the past 10 years. Additionally, the respondent No.6 has deposited milk in the primary Society for 365 days and is not a salaried employee of the primary Society and has not availed of any loan from such Society. Further, the respondent No.6 has not been held responsible as per Sections 82, 90 and 93 of the Act of 1961 and has Page 38 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT not been disqualified under Section 27 of the Act of 1961. The contention of the petitioners that the appointment of the respondent No.6 is in violation of the principle laid down by this court in the case of Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. (supra), is incorrect. This court in paragraph 79 has laid down certain safeguards for the exercise of the powers by the State Government under Section 80 (2) of the Act of 1961 and one of such safeguards pertains to non-appointment of a person who has been defeated in the elections. The entire premise behind inclusion of such a safeguard is that a person, who does not represent the will of the people should not be appointed as a government nominee under Section 80 (2); however, this is not the case inasmuch as, the respondent No.6 had actually entered into a compromise with the opposing candidate - Rajeshkumar Pathak and the respondent No.6 had even declared his support to Mr. Pathak by way of press conferences and declaration dated 31.7.2020. The said factum was published in the newspapers. However, since as per the election programme, the last date to withdraw the nomination was 27.7.2020 and the last date for publication of unopposed candidates was 29.7.2020, the respondent No.6 could not withdraw his nomination.
18.3 The contention that the respondent No.6 lost the election, is meritless, for, by way of Government Resolution dated 8.4.2004, certain guidelines have been made for appointment of government nominees in the cooperative societies and by Government Resolution dated 20.8.2014, condition No.15 of the Government Resolution dated 8.4.2004 has been deleted, thereby, enabling the State Government to appoint a person as a government nominee even if he has lost the election of the managing Committee of a Society. The petitioners have challenged the Government Resolution dated 20.8.2014, however, the determinative date would be the date on which the respondent No.6 was appointed, i.e. 24.8.2020 when the Government Resolution dated Page 39 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT 20.8.2014 was subsisting.
19. With regard to the submission, namely, agenda for the meeting of the Committee for election of the Chairman and Vice-Chairman, i.e. 4.9.2020 was published on 26.8.2020, i.e. two days after the order under sub-section (2) of Section 80, it is submitted that the meeting on 4.9.2020 was to be held by an independent authority as provided under Section 145Z of the Act of 1961 and the presumption of bias by the petitioners is baseless. Under the Gujarat Specified Cooperative Societies Elections to Committees Rules, 1982, the Collector is responsible for overall supervision of the conduct of the elections and therefore, the District Registrar and the Collector are independent authorities having different functions. The argument of the petitioners attempts to impose an overlap between the two authorities which is incorrect in light of the separate arena of functions of both the authorities.
19.1 The result of the election of the members of the Managing Committee was declared on 9.8.2020 and the contention of the petitioners that the appointment of the nominees should have taken place after the first meeting of the members and subsequent to the election of the Chairman and Vice-Chairman, tantamount to imposition of an artificial time line to the provisions, which is impermissible. The argument of the petitioners pertaining to presumption of bias is baseless which has been made without any foundation. As held by this Hon'ble Court in Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd. vs. State of Gujarat reported in 2009 (0) AIJEL-HC 223023, that it cannot be presumed that merely because the nominees have been appointed by the State Government on every issue, viz. every subject matter brought before the Managing Committee, the nominee Directors would vote only in a particular manner. Even if the voting pattern changes that by itself is not sufficient. It is submitted that this argument has lost its legs in light Page 40 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT of the statement made by the learned counsel for the respondent Nos.6 and 7 that the votes of respondent Nos.6 and 7 may not be counted for declaration of the result of the election of the Chairman and Vice- Chairman and therefore, the argument of the petitioners regarding tilting of the balance of the Committee fails.
20. Regarding resistance by the petitioners in opening the sealed ballot boxes, despite the statement by the respondent - State and the learned advocates appearing for the rest of the respondents, it is submitted that initially, when the petition was preferred by the petitioners, the principal grievance was to prevent the respondent Nos.6 and 7 to participate in the election of the Chairman and Vice-Chairman on the ground that the petitioners possess majority and which would enable them to be elected as Chairman and Vice-Chairman. The main contention of the petitioners was that the appointment of the government nominees was done with the sole object of tilting the balance in favour of the other group supported by the government. Pursuant to the order dated 2.9.2020 passed by this court, the elections of the Chairman and Vice-Chairman was held on 4.9.2020 and the votes cast by the respondent Nos.6 and 7 were kept in a separate sealed ballot box. During the course of argument, a statement was made by the learned advocates for the respondent Nos.6 and 7 that subject to their other rights and contentions, the votes of the respondent Nos.6 and 7 cast in the election of the Chairman and Vice-Chairman may not be counted and the results of the Chairman and Vice-Chairman be declared. Such statement, essentially, took care of the main grievance with which the captioned petition was filed. However, the same was not agreeable and which is contrary to what the petitioners had initially prayed before the court as no counting of the votes of the respondent Nos.6 and 7, would have tantamounted to grant of their main relief. Such resistance by the petitioners needs to be viewed in light of the fact that the entire functioning of the Union is at a standstill.
Page 41 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENTTill the result of the Chairman and Vice-Chairman is not declared, the charge of the office of the Committee cannot be handed over to the new Committee and due to such artificial resistance, the functioning of the Committee has been stalled. Had the petitioners preferred the present petition in the interest of the Society, then, they would not have had any objections to declaration of the results of the election of the Chairman and Vice-Chairman pursuant to the statement made by and on behalf of the respondent Nos.6 and 7. This indicates the true intention with which the present petition has been preferred. It is thus, urged that the present petition be not entertained and be dismissed.
21. Mr. D.B. Rana, learned advocate for the respondent Nos.6 and 7 submitted that the allegations which are made against the nominated persons, that is, respondents No.6 and 7 by the petitioners is that they were nominated by the Government when the election of Chairman and Vice-Chairman was approaching.
21.1 It is submitted that the respondent Nos.6 and 7 have not incurred any personal disqualification. Mr. D.B. Rana, learned advocate for the respondent Nos.6 and 7, at the outset, submitted that if the petitioners had any objection against the nomination of the respondent Nos.6 and 7, the votes which are cast by them may not considered and the results of the elections may be declared by counting the votes cast by the members in the separate ballot box.
21.2 While adverting to the merits of the qualifications of the respondent Nos.6 and 7, it is submitted that they have not incurred any personal disqualification. Strong reliance is placed by the learned counsel for the petitioners on the Government Resolution dated 8.4.2004 and pointed reference has been made to condition Nos.7 and 9 to suggest that the respondent Nos.6 and 7 do qualify the said requirement. While referring to paragraph 2.2 of the affidavit, it is submitted that the qualifications possessed by the respondent No.6 are Page 42 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT stated in no uncertain terms.
21.3 It is submitted that Condition No.9 envisages that the person should not have incurred any disqualification as per the bye-laws. It is vehemently submitted that the respondent Nos.6 and 7 have not incurred any disqualification as per the bye-laws of the Union, holding the elected post, supporting the party in power. Having regard to the contents of paragraphs 2.2 and 2.3, it is clear that the respondent Nos.6 and 7 fulfill the condition Nos.7 and 9 enumerated in the Government Resolution dated 8.4.2004. Thus, it is incorrect on the part of the petitioners to contend that the respondent Nos.6 and 7 do not possess the qualification and/or experience as required under condition Nos.7 and 9 of the Government Resolution dated 8.4.2004.
21.4 It is submitted that it is undisputed that though the Government Resolution dated 8.4.2004 contained condition No.15, inter alia, providing that the person who has lost the election shall stand disqualified for being appointed as nominee of the State Government; however, the said condition No.15 stood deleted vide Government Resolution dated 20.8.2014. Further, as on the date of the nomination, the condition No.15 did not find place and on this count, the appointment of the respondent No.6 cannot be said to be de hors the provisions of the guidelines.
21.5 So far as filing of 12 criminal complaints against the respondent No.7 is concerned, the said statement is incorrect and made without verifying the record, in fact, there are only four complaints against the respondent No.7. The annexures have been placed along with the affidavit only with a view to mislead this court inasmuch as, some complaints have been produced repeatedly only with a view to inflate the number of criminal complaints filed against the respondent No.7. There is no conviction ordered against the respondent No.7 in any of the cases. Even otherwise, there is no prescribed disqualification under Page 43 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT the provisions of the Act of 1961 for the Government nominees, if any criminal case is filed against them.
21.6 While referring to the reply dated 24.8.2020 filed by the petitioners before the Registrar, it is submitted that a bare perusal of the reply clearly reflects that there was not a single averment made in connection with the criminal case filed against the respondent No.7 and the only averment made is to the effect that the respondent No.7 has his residence in Maharashtra and that his nomination has been rejected. Except this, the petitioners have not stated anything and therefore, the petitioners cannot now be permitted to place on record the additional material which was not forming part of the record in the proceedings before the Registrar. It is submitted that the respondent No.7 is a Deputy Sarpanch since last 20 years and therefore, the contention raised by the petitioners that the respondent No.7 is a resident of Nandurbar, Maharashtra, is fallacious considering the fact that had the respondent No.7 been the resident of Maharashtra, he would not have been elected as a Deputy Sarpanch for last 20 years.
21.7 In this connection, the learned advocate for the respondent Nos.6 and 7 has placed reliance on the judgment in the case of Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd. (supra) to submit that this court has held that the only consideration which can go into the decision making process in the appointment of the Government nominee is as to whether the person who is to be considered for appointment as a nominee, would be able to take care of public interest, ensuring that the operation of the Society does not result in detriment to such public interest. It is submitted that petition being devoid of merits deserves to be dismissed.
22. Mr. B.S. Patel, learned senior advocate with Mr. Chirag B. Patel, learned advocate for the respondent Nos.13 and 14 has made twofold submissions. While referring to the language used in sub-section (2) of Page 44 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Section 80 of the Act of 1961 and more particularly, the expression "on the Committee of such Society", it is submitted that the Government nominees are appointed on the Committee of the Society and therefore, before exercising the powers, it is only and only the Society which is required to be heard. While laying emphasis on the word "Society", it is submitted that even this court in the case of Gujarat Cooperative Marketing Federation Ltd. (supra), has observed that for the appointment of the representatives on the Committee of a Society by a nomination under the provisions of sub-section (2) of Section 80 entails civil consequences and therefore, principles of natural justice are required to be observed. For complying with the principles of natural justice, adequate and mindful opportunity of hearing has to be given to the Society and as a part thereof, the Society has to be informed about the grounds on which the opinion as to the involvement of public interest in the operation of the Society was based and the necessity or expediency for the nomination had arisen. Therefore, this court has also laid emphasis on the aspect that the opportunity of hearing has to be given "to the Society".
22.1 It is submitted that a bare reading of the language of sub-section (2) of Section 80, clearly provides that it refers to only two parties, namely, the State Government on one hand and the Society on the other. Anyone except the two is a third party and the third party cannot maintain a writ petition under Article 226 of the Constitution of India. Reliance is placed on the judgment of the Apex Court in the case of Daman Singh (supra). It is submitted that the Apex Court in paragraph 11 has held and observed that once a person becomes a member of the Cooperative Society, he loses his individuality qua the Society and he has no independent rights except those given to him by the statute and bye-laws. It is submitted that the Apex Court has further observed that the member must act and speak through the Society or rather the Society can act and speak for him qua the rights and duties of the Page 45 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Society as a body. The petitioners are members and elected as Directors of the Union, and they cannot have independent right except conferred under the Act. In absence of any right to act on behalf of the Society, the right to challenge the order of nomination under sub-section (2) of Section 80 is not available to the petitioners and without entering into the merits of the case, the petition deserves to be dismissed.
22.2 It is submitted that it is for the Union to decide, namely, (i) as to whether to accept the order or not; (ii) whether an opportunity was given or not; (iii) whether the nominees are qualified or not; and (iv) whether the person is competent or not to contest. It is the Society who has to decide and not the petitioners. It cannot be challenged on the frivolous grounds, namely, tilting the balance and having the majority etc. Neither before the Registrar nor before this court, except the petitioners, none of the members have raised the grievance.
22.3 It is submitted that reference is made to sub-section (2) of Section 80 to contend that it uses the word "it may nominate..... on the Committee of such Society". Section 74C(1) also uses the expression "of the societies" similar to the language used in sub-section (2) of Section 80. The said expression had recently fallen for consideration before this court in the case of Pravinsinh Hemantsinh Zala & Ors. vs. State of Gujarat & Ors. rendered in Special Civil Application No.23321 of 2019. Reliance is placed on paragraphs 39 and 40 of the judgment to contend that this court has observed that the three members of the respondent No.4 Bank can, at the best, be said to be the third parties, more particularly, with reference to the respondent No.4 Bank on one hand and respondent Nos.2 and 3 being the State Authorities responsible for the conduct of election in question on the other. This court has further observed that it could be said that this writ application is not maintainable as no legal right or any fundamental rights of the writ applicants could be said to have been infringed or violated by the Page 46 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT respondent authorities in any manner. This court, held that the writ applicants, being the third parties, have no locus standi to file the writ petition, seeking directions against the respondent authorities to hold the election.
22.4 It is next submitted that the Society is required to be heard and it can challenge the nomination in view of the principle laid down by Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. (supra) and Gujarat State Co-operative Marketing Federation (supra). It is the sole discretion of the State Government to decide as to who to be appointed as nominee. In fact, the learned Government Pleader has pointed out the issuance of the certificates by the Union certifying the eligibility of the respondent Nos.6 and 7 for being appointed as a nominee. In view of there being certificates issued in favour of the respondent Nos.6 and 7 by the Union, irrespective of the criminal complaints, they do qualify for being appointed as nominees.
22.5 It is submitted that initially, the petition was filed by the petitioners with a principal grievance that the State Government has nominated the respondent Nos.6 and 7 only with a view to converting the majority in the minority; however, now, the learned advocates for the respective respondents have agreed that the two votes of the respondent Nos.6 and 7 will not be counted. It is submitted that, admittedly, today also, 2014 circular is in force, as the same has not been set aside by any competent court. Reference is made to sub- section (2) of Section 79 of the Act of 1961 and even this court were to cancel the circular, every action taken by the Society is protected by virtue of the provisions of sub-section (2) of Section 79 of the Act of 1961.
22.6 It is submitted that therefore, the grievance raised by the petitioners does not survive. In such an eventuality there cannot be and should not be any objection on the part of the petitioners for opening of Page 47 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT the ballot box and declaration of result. It ought to be appreciated that the Union is having a business with a turnover of Rs.4,000/- crore per annum, i.e. Rs.18 lac per day and only at the behest and at the instance of the petitioners the same has been brought to a standstill, which is against the spirit of Article 43B of the Constitution of India which, gives a Society a right to run democratically. Accordingly, it is urged that the ballot box may be allowed to be opened and result be declared and the petition be dismissed as the same is bereft of any merits. No other and further submissions have been made by Mr. B.S. Patel, learned advocate for the newly added respondent Nos.13 and 14.
23. Mr. P.K. Jani, learned senior advocate for the petitioners, in rejoinder, submitted that the petition has been filed, namely, (i) challenging the show-cause notice dated 20.8.2020; (ii) the order dated 24.8.2020 passed by the Registrar, nominating respondent Nos.6 and 7 on the Committee and (iv) the Government Resolution dated 20.8.2014 amending the Government Resolution dated 8.4.2004.
23.1 While reiterating, it is submitted that there is a specific challenge seeking to quash and set aside the Government Resolution dated 20.8.2014 and this court vide order dated 2.9.2020, has directed the learned advocates for the respective parties to file an affidavit; however, the State Government chose not to file the affidavit, defending the Government Resolution dated 20.8.2014. The affidavit, though has been filed, there are no averments or justification offered substantiating the issuance of the Government Resolution dated 20.8.2014. Therefore, there remains no contest to the Government Resolution dated 20.8.2014. Besides, no arguments were also made substantiating the said Government Resolution. Under the circumstances, as held by the Supreme Court in the case of Asha vs. Pt. B.D. Sharma University of Health Sciences & Ors. reported in (2012) 7 SCC 389 as well as 1987 (2) GLH 253 and more particularly, in paragraphs 18 and 19, Page 48 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT appropriate orders may be passed quashing and setting aside the Government Resolution dated 20.8.2014.
23.2 It is submitted that the said Government Resolution dated 20.8.2014 flies on the face of the two pronouncements of this court as well as in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) and Gujarat Cooperative Marketing Federation Ltd. (supra). If the challenge to the Government Resolution dated 20.8.2014 is accepted, the sequator would be that the Government Resolution is non-existent in the eye of law and the Government Resolution which would remain, would be 8.4.2004, which specifically restricts the nomination of a person, who has lost the election.
23.3 While dealing with the submission of the learned Government Pleader as regards the affidavit filed by the respondent No.6 dated 25.9.2020, and the contention that it cannot be said that the respondent No.6 has lost the election, it is submitted that it was not the case of the respondent No.2 - Registrar while issuing the show-cause notice; while passing the order dated 24.8.2020; and not even in the affidavit filed by the Joint Registrar, but it is for the first time during the oral argument, the affidavit of the respondent No.6 is taken support of by the State Government to canvass that the respondent No.6 cannot be said to be a defeated candidate, is nothing, but an afterthought theory. It is submitted that in the case of Commissioner of Police, Bombay vs. Gordhandas Bhanji reported in AIR 1952 SC 16 as well as in the case of Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner, New Delhi & Ors. reported in (1978) 1 SCC 405 it has been held that when a statotury functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, the order bad in the beginning may, by the time it comes to the court on account of a challenge, get validated by additional grounds Page 49 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT later brought out. The Apex Court, referred to the observations made in the case of Commissioner of Police, Bombay vs. Gordhandas Bhanji (supra) wherein, it has been stated that public orders publicly made in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Therefore, in view of the above- referred enunciation of law, the submissions made by the learned Government Pleader may not be accepted.
23.4 While adverting to the contention of reports published in the newspaper, it is submitted that by series of judgments, it is held that the newspaper reports cannot be taken as evidence. Reliance is placed on the judgments in the cases of (i) Laxmi Raj Shetty & Anr. vs. State of Tamilnadu reported in (1988) 3 SCC 319 and (ii) Shri Ravinder Kumar Sharma vs. The State of Assam reported in AIR 1999 SC 3571 : (1999) 7 SCC 435, where it has been held by the Apex Court that the reports are merely hearsay and they are not even secondary evidence and should be discarded.
23.5 It is submitted that the annexures to the affidavit of the respondent No.6 has been placed only to substantiate that the respondent No.6 by the reason of the compromise arrived at between himself and the opponent, that he withdrew from the election should not be accepted. That the election programme has been declared as per the provisions of the Gujarat Specified Co-operative Societies Elections to Committees Rules, 1982 which have been framed in exercise of the powers under sub-section (3) of Section 168 read with Section 145Y of the Rules. Thus, what is sought to be contended on behalf of the State Page 50 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Government is contrary to the statutory rules of the State Government itself.
23.6 While adverting to the arguments raised by the learned advocates for the respective respondents that the respondent No.6 withdrew his candidature and has not lost the election, it is submitted that the Election Officer has filed his affidavit; however, the said affidavit does not contain any such averment with regard to the stand taken by the State Government during the course of the submissions. It is submitted that in the election, the respondent No.6 got six votes and accordingly, the Election Officer has declared that the respondent No.6 is not elected candidate.
23.7 While adverting to the objection raised by the learned Government Pleader as regards maintainability of the writ petition by citing the judgment in the case of Gujarat State Co-operative Agriculture and Rural Development & Ors. vs. State of Gujarat reported in 2011 SCC OnLine 2812 to contend that the issue is no longer res integra, it is submitted that reliance is misplaced. It is submitted that what is lost sight of the fact by the learned Government Pleader is that the said principle has been watered down by this court in the case of Brijrajsinh Hemantsinh Jadeja vs. State of Gujarat reported in 2012 (3) GLR 2704 wherein, in paragraph 8 while rejecting the preliminary objection, it has been held that since the representatives of the Government are sent to the management of the bank, the members of the bank certainly have locus standi in a given case to oppose the same; as ultimately, it will have effect in managing the affairs of the bank. Under the eventuality, the directors of the bank are also entitled to challenge the action of the State in connection with sending the representatives to the management of the bank, having locus standi to challenge the action of the State Government simply because the bank itself has not challenged the same. The issue of locus standi is no longer res integra Page 51 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT inasmuch as, the directors are acting in the fiduciary capacity of their members and are very much answerable to them. Even otherwise, the writ petition being Special Civil Application No.10406 of 2020 is filed by a Co-operative Society of the Union and thus, the reliefs can be granted in that petition.
23.8 While responding to the contention of the learned Government Pleader with respect to the affidavit filed by the Joint Registrar, it is submitted that the said affidavit, is not in conformity with the provisions of Rule 26 of the Gujarat High Court Rules.
23.9 It is submitted that unlike eo nominee, the powers have been given in favour of the Registrar by name and therefore, Registrar himself has to answer; such task and the same is not capable of being delegated. Therefore, it is the Registrar, he who is required to state his satisfaction as regards the public interest, eligibility and such other aspects. The affidavit dated 26.9.2020 filed by the Registrar, contains only two paragraphs; however, there is no reference of any material substantiating that the Registrar on his own independent analysis was satisfied about public interest. The affidavit is conspicuously silent as regards the decision making process undertaken by the Registrar. Therefore, the affidavit of the Joint Registrar cannot be construed as an affidavit for the purpose of finding out the compliances of sub-section (2) of Section 80.
23.10 It is submitted that the affidavit of the Joint Registrar, only narrates the whole sequence of events from 18.8.2020, that is, the proposal by the District Registrar. Except referring to the sequence of events, commencing from 18.8.2020 till the date of passing of the order datged 24.8.2020, nothing has been placed on record and in absence of any material, much less the notings on the file, it is difficult to comprehend as to how the whole decision making process was undertaken by the State Government, except bare statements, Page 52 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT indicating the channel of submission. The respondent No.3 who is instrumental in initiating the proposal does not owe any responsibility. The District Registrar ought to have filed an affidavit and should have thrown the light; however, he has been kept out of the proceedings. Unlike private party, the Government has no option not to place on record the material, the documents which has gone into the decision making process. Selective presentation has been adopted by the State Government, that itself raises a doubt against the action of the State Government.
23.11 Mr. P.K. Jani, learned senior advocate submitted that in the two judgments, namely, Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. (supra) and Gujarat State Co-operative Marketing Federation (supra), it has been held that the notice to the Society is required to be given. In the present case, the facts are peculiar, as the elections are already held, results are declared; however, the Committee has not assumed the office, as the first meeting of the Committee had not taken place and which took place on 4.9.2020. The Hon'ble Division Bench has envisaged a situation where there is a Committee and notice to the Society is issued and that is responded to as a member of the Committee. Therefore, in the normal circumstances, a letter would have been addressed to the Union and it, in turn, would have communicated the same to the Managing Director, and the Managing Director would have placed it before the Board of Members, and Board of Members, would, by an unanimous decision have communicated their views and that would meet the principles of natural justice and fairness. The Hon'ble Division Bench has envisaged a situation when Committee is existing and therefore, notice to the Society; whereas, in the present case, the action is taken prior to 4.9.2020 when Committee meeting has not taken place and therefore, there is no Committee in that sense. Pertinently, there are 1500 members and it is not possible to serve them and therefore, the elected Page 53 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT members who are 16 in number, would have been served with the notice considering that there was an extra-ordinary situation and the State Government could not have waited. Therefore, if the State Government could not have waited till 4.9.2020, the only course open to the Registrar was to have heard the members of the Society; however, the said procedure has not been observed by the Registrar.
23.12 In the present case, Registrar has not issued notice to the members, not even to the petitioners, and it is the petitioners' proactiveness which has brought the petitioners before the Registrar. When the Committee is in existence and the first meeting is not convened, then the procedure which the Registrar is required to follow is by issuing individual notices to the members, who have been elected. If the notice would have been issued after 4.9.2020, the judgment cited by the learned advocates for the respondents would apply. Therefore, in the present case, there is violation of principles of natural justice as the members of the Committee are not issued the notices being the peculiar circumstances. Two judgments have been cited by the learned counsel for the respondent State, namely, M/s. Bilakchand Gyanchand Co. (supra) as well as Sarabjit Singh (supra) to contend that notice to the Managing Director is sufficient notice. The said judgments are impliedly overruled by the judgment of the three Judge bench of the Apex Court in the case of Aneeta Hada v/s. M/s God Father Travels and Tours Pvt.Ltd., reported in AIR 2012 SC 2795 wherein, in paragraph 43, it has been held that notice to the company is required. Therefore, reliance cannot be placed on the said two judgments.
23.13 So far as the reliance placed on the judgments in the case of State Bank of Patiala & Ors. (supra), M/s. A.S. Motors Pvt. Ltd. (supra), Om Prakash Mann (supra), Aligarh Muslim University & Ors. and Transmission Corporation of A.P. (supra) is concerned, the same cannot be made applicable to the facts of the present case inasmuch Page 54 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT as, the situation in the present case is not identical to the situation prevailing in the said judgments. Therefore, the action of the Registrar was in clear breach of the principles of natural justice and therefore, the order dated 24.8.2020 deserves to be quashed and set aside on the ground of violation of principles of natural justice.
23.14 Adverting to the aspect of public interest involved, it is submitted that the Registrar, has not taken into account the element of public interest; however, it has only taken into account the aspects, viz. volume of milk supplied, turnover, members, cattle breeders, strength etc. which aspects are with regard to the operation of the Society and the Registrar was required to see the public interest involved and not the operation. Public interest would mean general welfare of the population or something in which the public as a whole has a stake. Therefore, the order dated 24.8.2020 of the Registrar suffers from the fundamental defects and patent illegality because, it has not referred to the element of public interest.
23.15 It is submitted that the decision making process observed by the Registrar has been vitiated. The respondents have pressed into service the judgments to contend that the delegate can entrust ministerial, ancillary, clerical and non-essential functions to his subordinates. However, in the present case, it is admitted by the Joint Registrar in the affidavit in paragraph 6.2 that the District Registrar has sent the proposal; therefore, it is the District Registrar who is the initiator. Clearly, there are no standing instructions by the office of the Registrar requiring the District Registrars to lookout for the persons who are to function on behalf of the Government in co-operative Society. That there were no instructions or directions in this behalf, in spite of this, the District Registrar only on the basis of directives of the leaders, has mooted the proposal. The proposal initiated by the District Registrar cannot be termed as a ministerial/clerical or non-essential function undertaken by Page 55 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT him.
23.16 In recent past, there has been no government nominee appointed under sub-section (2) of Section 80 of the Act of 1961 and public interest was not considered for good 10 to 15 years and suddenly, on 20.8.2020, the element of public interest comes to the mind of the Registrar as, he is in receipt of the letter of the District Registrar.
23.17 The contention raised by the State Government that the Registrar is the highest officer and possesses every details and has entire record and therefore, he has access to the information. If the Registrar was having all the information as contended by the learned Government Pleader, then there was no need to the Registrar to have written the letter dated 20.8.2020. This shows that there is an utter failure and abdication of functions by the Registrar in arriving at a decision to appoint the nominees with such a casual approach. This clearly shows that the Registrar was acting under the directives of political leaders and under the dictates of party in power and if the decision maker has acted under the dictates of someone, his decision is vitiated. In support of such contention, reliance is placed on the judgment of the Apex Court in the case of State of U.P. & Ors. vs. Maharaja Dharmander Prasad Singh Etc. reported in (1989) 2 SCC 505 wherein, it has held that the authority cannot permit the decision to be influenced by the direction of others as this would amount to abdication and surrender of its discretion. It would then not be the authority's discretion that is exercised, but someone else's. It has been further held that if an authority hands over its discretion to another body it acts ultra vires. Such interference by a person or body extraneous to the power would plainly be contrary to the nature of the power conferred upon the authority.
23.18 It is submitted that the Apex Court in the case of Anirudhsinhji Page 56 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Karansinhji Jadeja & Anr. vs. The State of Gujarat reported in (1995) 5 SCC 302 while dealing with provisions of the Terrorists and Disruptive Activities (Prevention) Act, 1987 has held that the proper authority may share its power with someone else, or may allow someone else to dictate to it by declining to act without their consent or by submitting to their wishes or instructions. The effect then is that the discretion conferred by parliament is exercised, at least in part, by the wrong authority, and the resulting decision is ultra vires and void.
23.19 Further reliance has been placed on the judgment of the Apex Court in the case of Bhikhubhai Vithlabhai Patel & Ors. vs. State of Gujarat & Anr. reported in (2008) 4 SCC 144. It is submitted that the Apex Court, while dealing with the proviso to sub-section (1) of Section 17 of the Gujarat Town Planning and Urban Development Act, 1976 has observed that the proviso opens with words "where the State Government is of opinion that substantial modifications in the draft development plan and regulations are necessary...." which are indicative of the satisfaction being subjective one but there must exist circumstances stated in the proviso which are conditions precedent for the formation of the opinion. It is further observed that opinion to be formed by the State Government cannot be on imaginary grounds, wishful thinking, however, laudable that may be and such a course is impermissible in law. It has been further observed that the formation of the opinion, though subjective, must be based on the material. The said satisfaction of the authority in the present case is completely absent because, the authority has acted under the dictate of the powers. Therefore, the decision making process by the authority is completely vitiated.
23.20 It is submitted that the reliance placed by the learned Government Pleader as well as Mr. B.S. Patel, learned senior advocate for the respective respondents upon the judgment in the case of Daman Page 57 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Singh & Ors. (supra) in support of their submission that individual has no identity and have to speak through the Society. The respondent No.7 is representing a primary cooperative Society of Village Devada. Minimum requirement is to provide 80 litres of milk in an year and if the Society provides the requisite litrs of milk in an year, it becomes the voter. As far as the respondent No.7 is concerned, he in individual capacity has provided only 40 litres of milk. Had he supplied 80 litres of milk in a Society, as provided in clause (5) of Bye-law No.35 his Society would have become eligible. Reference is made to Byelaw No.35 to contend that bye-law 35 opens with an expression "Society member and representative of Society members shall have the qualification of candidature in election of Board of Directors". "Society member" in the present case is Devada Dudh Utpadak Sahkari Mandli Limited and "representative" means the respondent No.7. Qualification is provided for both, viz. the Society member and the representative.
23.21 Reliance is placed on the judgment in the case of Shri Vanthali Vibhagiya Nagarik Sahkari Bank Limited vs. State of Gujarat and Anr. reported in 1993 (1) GLR 340. It is submitted that this court did not permit the State Government to appoint the person against whom the charges levelled were yet to be investigated and the appointment was quashed and set aside on the ground that the same was made with proper inquiry and investigation.
23.22 It is submitted that reliance is placed by the learned Government Pleader and Mr. D.B. Rana, learned advocate for the respective respondents on provisions of Section 145F of the Act of 1961, to contend that if the disqualification does not fall within Section 145F of the Act of 1961, then there is no disqualification. In fact, the case does not fall under Section 145F because, Rule 32 of the Rules of 1965 provides for qualification for the members of the Committee. Clause (c) of sub-rule (1) of Rule 32 provides that a person is qualified for Page 58 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT becoming a member of the Committee, if he is not otherwise disqualified for appointment as member. Clause (c) uses the expression "if otherwise not disqualified" then only one can be appointed and that sub-rule (1) of Rule 32 provides that a member of the Committee who incurs any of the disqualifications specified in sub-rule (1) shall vacate the office and if he does not vacate the office, he shall be removed by the Registrar as member.
23.23 It is submitted that the scheme operates in this way. The Union is a federal Society which is a specified Society where the Societies are the members so there has to be two qualifications if somebody wants to a member. Society should be qualified and that individual should also be qualified. Both the situations and conditions should be satisfied. Therefore, if the Society is not qualified an individual cannot be made a member. These qualifications and disqualifications are the requirement of the threshold, that is, at the entry time and during the time of the Committee members. This court has held that these requirements are threshold requirements as well as for the entire period of five years.
23.24 It is submitted that the respondent No.7 has four criminal cases, which is not disputed. In one of the criminal cases, he has entered into a settlement. Condition No.8 of the Government Resolution dated 8.4.2004 provides that a person should not have permit and should not have involved in the case of prohibition. The respondent No.7 is a person who has no eligibility at the threshold and is worse than the candidate who is defeated in the election as he is a person with criminal background and therefore, ought not to have been nominated by the State Government.
23.25 It is submitted that so far as the judgment cited of the learned Single Judge in the case of Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd. vs. State of Gujarat & Ors. (supra), there is a fundamental difference because, the Society was heard and so is not the position in Page 59 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT the present case. It is submitted by the learned advocate for the respondent Nos.8 to 12 that neither the petitioners have locus standi nor any statutory or legal rights are violated. The said contention is misplaced in view of the judgment in the case of Brijrajsinh Hemantsinh Jadeja vs. State of Gujarat (supra). So far as another objection as regards other directors not objecting; however, other directors not objecting, does not take away the right of the present petitioners. It is also argued that the petitioners are not the aggrieved party; however, the petitioners being the directors, they are very much aggrieved party. So far as the contention that no judicial review about public interest is permissible, the said contention is also not correct inasmuch as, in all the judgments of the Division Bench, judicial review has been held to be permissible and there is no exclusion. Test parameters may be different and therefore, such submission on this score goes against the principle laid down by this court in numerous judgments.
23.26 So far as the contention of the learned advocate on behalf of the respondent Nos.8 to 12 to the effect that the report of the District Registrar was for the purpose of finding out that who is a suitable candidate is concerned, it is submitted that there has not been an exercise by the Registrar to find out suitable person. The report of the District Registrar is based on political consideration and the element of finding out suitable person is missing. It has left no room to the Registrar to find out any suitable person. It is not even the case of the Registrar that he considered other candidates and that it came out that the respondent Nos.6 and 7 were the most suitable persons amongst other nominees. Moreover, the contention that reference is made of two Government Resolutions dated 8.4.2004 and 20.8.2014 in the order dated 24.8.2020 that itself suggests that there is an application of mind, is erroneous.
23.27 Mr. P.K. Jani, learned senior advocate submitted that the Page 60 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT contention of the learned advocate for the respondent Nos.6 and 7 that pendency of the criminal cases, cannot be construed as a prohibition. Such broad submissions run contrary to the statute which is aimed at eliminating the criminal elements. That the cooperative movement functions on democratic principles and in such institutions, the persons with criminal antecedents and background are not to be encouraged to get entry into such prestigious cooperative Union.
23.28 While distinguishing the judgments cited by the learned Government Pleader, it is submitted that the judgment referred to at Sr. No.1 of the compilation, that is, the judgment of this court rendered in Special Civil Application No.223 of 2011 - Gujarat State Co-operative Agriculture & Rural Development vs. State of Gujarat, the learned Single Judge has taken a view that the Directors have no locus standi, is not a good law in view of the principles laid down by the Division Bench in the case of Brijrajsinh Hemantsinh Jadeja (supra).
So far as the judgments at Sr. Nos.2, 3, 4, 5 and 6 of the compilation, it is submitted that the same are on the principles and precedence of natural justice and were in the context of right of cross- examination, termination of service etc. The principle as enunciated by the Apex Court would have no application to the facts of the present case inasmuch as, the present case does not fall into any of the judgments on the point of the principles of natural justice.
So far as the judgments at Sr. Nos.7 and 8 of the compilation, that is, Bilakchand Gyanchand Co. vs. A. Chinnaswami reported in (1999) 5 SCC 693 and Sarabjit Singh vs. State of NCT Of Delhi & Ors. reported in 2018 SCC OnLine Del 12257 are concerned, the said judgments have been considered and dealt with by the Apex Court in the case of Aneeta Hada (supra).
So far as the judgments cited at Sr. Nos.9, 14, 15, 16, 18, 19, 20, 22, 23 and 24 are concerned, though they are forming part of the Page 61 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT compilation, but the same has not been cited and thus, the same are not being dealt with.
So far as the judgments cited at Sr. No.11 and 12 are concerned, that is, Amreli District Cooperative Sales and Purchase Union Ltd. & Ors. (supra) and Gujarat Cooperative Marketing Federation Ltd. (supra), the same are the backbone of our case.
So far as the judgment cited at Sr. No.13 of the compilation is concerned, that is, Daman Singh (supra), it is submitted that the Constitution Bench has considered the validity of Section 13 (8) which provides for compulsory amalgamation and that there cannot be any quarrel. The principles therein are not attracted to the facts of the present case.
So far as the judgment cited at Sr. No.17 is concerned, that is, Shree Rajkot District Cooperative Milk Producers Union Ltd. (supra), the said judgment was dealing with the facts where, the nominated Director was replaced. The Division Bench in the appeal by the Director, held that the appointment is purely the discretion of the State Government and the State Government will be well within its powers to take a decision in this behalf. The appeal was allowed; however, neither the facts nor the point involved in the said case, has any application to the facts of the present case.
So far as the judgment cited at Sr. No.25 is concerned, that is, Madan Kumar Singh (Dead) through Legal Representative vs. District Magistrate, Sultanpur & Ors. reported in (2009) 9 SCC 79, the said judgment has been cited for the proposition that mere filing of the petition was brought to the notice of the Registrar and request was made to differ the hearing.
Thus, out of the 25 judgments cited five judgments which have been referred to reflect one thing that the principles laid down in the Page 62 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT judgments are diluted for not being good in law or declared not a good law.
24. In sur-rejoinder, Ms. Manisha L. Shah, learned Government Pleader submitted that it is contended by the petitioners that a statement on behalf of the respondent was that one of the nominees Mr. Solanki had actually withdrawn his nomination, and argument that was sought to be canvassed is that respondent No.6 has lost the election. The State has relied upon the additional affidavit of the respondent No.6 to show that the respondent No.6 has not lost the election, but withdrawn. The categoric assertion has never been that that he has withdrawn from the election.
24.1 It is submitted that when the court is adjudicating the matter, the totality of fact reveals that the respondent No. 6 chose not to contest and not to compete with his counterpart that does not mean he is withdrawing from the election because there is a date given for withdrawal of such nomination, which is 27.07.2020. Beyond that date he could not have withdrawn his nomination, therefore, the newspaper report is recording that the candidate is supporting his counterpart and the said factum is noted in the newspaper. In consonance with the principles of democracy, the respondent No.6 chose to settle the dispute with the counterpart, as he himself canvassed his vote for the counterpart. The submission that Deputy Collector is not speaking complete truth is erroneous because, when there is no withdrawal of nomination, there is no question of putting that on record.
24.2 It is submitted that reliance place on the judgments in the case of Laxmi Raj Shetty & Anr. (supra) as well as in the case of Shri Ravinder Kumar Sharma (supra), there cannot be any cavil on the proposition that the newspaper reports are only of presumptive value. The judgment in the case of Shri Ravinder Kumar Sharma (supra), cannot be made applicable as the same was in the context, where the Page 63 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT High Court grants non-pecuniary damages for malacious prosecution without reasonable cause and all of which was on the basis of newspaper report. Therefore, the judgment cited cannot be made applicable to the facts of the present case.
24.3 It is contended that the submission was made that subsequent explanation by an officer making the order that what was in his mind is impermissible and the judgment of the Apex Court in the case of Mohinder Singh Gill & Anr. (supra) was relied upon. It is submitted that no further explanation is coming out in the affidavit which is beyond what is there on the record.
24.4 The Objection so far as affidavit of Joint Registrar is made, it is stated that State Government by Notification of 2006 has delegated the power under Section 80(2) to the Registrar and there cannot be any further sub-delegation and anything ancillary or associated has to be exercised by the authority itself. That there cannot be a quarrel to the proposition that the essential functions cannot be delegated. That is not the case here.
24.5 While reiterating, it is submitted that the Apex Court in the case of Siddharth Sarawgi (supra) has held that so long as the essential function of decision making, the burden of performing the ancillary and clerical task need not be shouldered by the primary delegate. It is submitted that the Apex Court has clearly observed that practical necessities or exigencies of administration require that the decision making authority who has been conferred with statutory power, be able to delegate tasks when the situation so requires. In the present case, as a result of the authorisation conferred by the Registrar, the Joint Registrar has filed the affidavit, which has been subsequently affirmed by the Registrar, filing another affidavit, inter alia, pointing out that he has authorised the Joint Registrar to file the affidavit.
24.6 Next judgment is arising out of Civil Appeal No. 2586 of 2018.
Page 64 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENTWhere the interpretation of Section 47 of Indian stamp Act is involved. The Apex Court observed that practical necessities or exigencies of administration require that the decision-making authority who has been conferred with statutory power, be able to delegate tasks when the situation so requires. In the present case it is the Registrar who has issued show-cause notice, has taken the decision, passed the order. Because on 20.8.2020, some further information was sought for, it cannot be argued that he has delegated his powers or he is exercising under extraneous circumstances. All this is part of administration. Section 80(2) of the Act of 1961 confers the powers to the State and State delegated its power to the Registrar which does not mean that Registrar cannot seek any information from any other source or receive any representation. It is reading far more than what the statute has provided. The judgment of this court in the case of Municipal Corporation, Ahmedabad vs. Dena Bank reported in 1983 SCC OnLine 47 puts at rest the controversy with regard to Joint Registrar's affidavit.
24.7 With regard to the submissions of the petitioner as regards breach of the principles of natural justice, it is submitted that in Amreli District Cooperative Sales and Purchase Union Ltd. (supra) and Gujarat State Co-operative Marketing Federation (supra) as well as in Daman Singh (supra), there is a clear mandate that notice needs to be served to the Society. It is reiterated and submitted that the petitioners who are two in numbers, and it is the case of the petitioner that on the account of their pro-activity for procuring notice and have approached authorities by filing of their replies. Therefore, it is clear that the petitioners were having the copy of the notices and they having filed their replies, it cannot be said that the principles of natural justice, has been violated. It is submitted that even the Managing Director has mentioned that he has no authority to respond to the notice, it is the elected members who will be responding. The contention that each individual member needs to be served separately, is a misnomer in view of the judgment of the Apex Page 65 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Court in the case of Daman Singh (supra). So far as the reliance placed on the judgment in the case of Brijrajsinh Hemantsinh Jadeja (supra), is per incuriam and has failed to consider the constitutional bench judgment in the case of Daman Singh (supra).
24.8 It is submitted that the contention of the other side that the present is an unusual situation where the elections are held on 9.8.2020 and the first meeting was held on 4.9.2020 and therefore, for all practical purposes, it cannot be stated that the Committee has come into existence. Such contention is devoid of any merits in view of judgment of the Division Bench in the case of Pravinsinh Hemantsinh Zala rendered in Special Civil Application No.23321 of 2019 in the context of Section 74D of the Act of 1961. The Hon'ble Division Bench has held that the five years is to be calculated from the date the members were elected and therefore, the argument that the Committee has come into existence only after 4.9.2020, is not tenable. On elections being held, the elected members are very much there and their term has commenced. Further, the Union has not filed an affidavit stating that it is supporting the cause of the petitioner. Besides, five members individually have joined and have expressed their views giving their consent letter to the respondent No.3 - District Registrar, consenting to the appointment of the government nominees.
24.9 It is further submitted that the judgments cited under Section 138 of the Negotiable Instruments Act are impliedly overruled, is misconceived because, the Apex Court in the case of Aneeta Hada (supra), while laying down the proposition has clearly observed and declared the judgment which have been overruled, but so far as the judgments cited in the case of Bilakchand Gyanchand Co. (supra) and Sarabjit Singh (supra), are concerned they have not been overruled, and reasons are very much stated in the judgment.
24.10 With reference to the contention that no public interest is Page 66 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT involved inasmuch as, the reference made to the turnover, membership etc. is in the show-cause notice as well as order impugned, pertains to operation of the Society and not the public interest, it is submitted that the public interest element has been extensively discussed in Amreli District Cooperative Sales and Purchase Union Ltd. (supra) and Gujarat State Co-operative Marketing Federation (supra). Cooperative societies in its very nature are impregnated with the idea of public interest but when it says operation of the Society, the scope gets wider.
24.11 It is submitted that the letter of the District Registrar has been referred to stating that this is not an independent decision. The District Registrar has initiated the process. The law stipulates that the statute be read as it is. What is required is that the authority, conferred with the power, takes the responsibility of its decision and that decision is of the authority, calling for certain information or receiving representation or certain information, do not by itself vitiate the decision by itself. The Registrar is in charge of 80,000 societies and close to 452 specified Societies. It is submitted that if the argument of the petitioners is to be accepted, everything from the stage of calling for the file, examining the file, issuing the show-cause notice, drafting it, sending it across, receiving replies and filling of affidavit, everything has to be done at their end. No further information can be sought for. In a communication dated 20.8.2020, when the show-cause notice was issued, certain information is called for. That letter is misconstrued.
24.12 It is submitted that the allegation that the recommendation of the nominees are at the behest of a political party, is not correct and that the action undertaken by the District Registrar was transparent and legal. Further, there is also a reference in the show-cause notice that the Union has given a certificate, certifying that the respondent No.6 is qualified and therefore, it is urged that there is complete disclosure. The entire network functions across the state, and every district would have Page 67 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT a District Registrar and there are Government Resolutions which confer power to the District Registrar. Therefore, the argument is that where are the standing instructions for the District Registrar to go searching for such Societies. How the governance would be carried out is not the issue for adjudication today. Therefore, the argument that since no standing instructions are received, the District Registrar is not authorised to answer on behalf of Registrar, is incorrect.
24.13 One of the judgments which was relied upon was the case of State of U.P. & Ors. vs. Maharaja Dharmander Prasad Singh etc. (supra), it was in respect of cancellation of lease. It is submitted that where this discretion is not exercised by the authority in the present proceedings. In the second judgment in the case of Anirudhsinhji Karansinhji Jadeja & Anr. (supra) which concerns the TADA Act, and clearly not applicable.
24.14 Ms. Shah, learned Government Pleader reiterated the submission that the judgment in the case of Brijrajsinh Hemantsinh Jadeja (supra), has not considered the judgment in the case of Daman Singh (supra) as well as C.O.D. Chheoki Employees' Co-op. Society Ltd. (supra) and therefore, the observations of the Division Bench are per incuriam.
25. Mr. P.K. Jani, learned senior advocate while dealing with the contention of the learned Government Pleader that the judgment in the case of Brijarajsinh Hemantsinh Jadeja (supra) which holds that there is a locus standi, is per incuriam in view of the judgments in the case of Daman Singh (supra) and C.O.D. Chheoki Employees' Co-op. Society Ltd. (supra) and the learned Single Judge's judgment in the case of Rameshbhai Maganbhai Lakhani vs. State of Gujarat & Ors. reported in 2011 (4) GLR 2877, may not be accepted considering the aspect that in judgment in the case of C.O.D. Chheoki Employees' Co-op. Society Ltd. (supra), there is not a single word of "locus standi' inasmuch as, the Page 68 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Hon'ble Supreme Court was considering the challenge to the constitutional validity of the U.P. Cooperative Societies Act, 1965 where the provision was made granting reservation in favour of women.
25.1 In the entire judgment, there is not a word of locus standi either of a primary member or a Committee member. It is on the touchstone of whether the legislature has the competence to provide reservation in a cooperative Society for women. Lastly, in paragraph 17, it has been observed that if anyone is nominated in derogation of the guidelines provided under the Act and rules, that would be an individual case to be considered separately but on that count alone, the Act and the Rules cannot be declared to be ultra vires meaning thereby, it is an individual case, which would be considered separately. Except the fact that the Daman Singh's case is referred to in support of the submission that there cannot be any reservation, there is nothing stated about the locus standi.
25.2 It is further submitted that per incuriam means inadvertence/ignorance which is to be considered. If the petition would have been filed in relation to provisions of Section 17 of the Cooperative Societies Act, 1961 which deals with amalgamation and which is in pari materia with Section 13(8), the submissions of the learned Government Pleader would have applied. It submitted that there is no foundational fact or the purpose of application of the principle in Daman Singh's case and therefore, before the Division Bench, neither there was inadvertence nor was there ignorance to the judgment in the case of Daman Singh (supra).
25.3 In support of the submission, as regard the principle of per incuriam Mr. Jani, learned senior advocate placed reliance on the judgments, viz. (i) Union of India vs. Amrit Lal Manchanda & Anr. reported in (2004) 3 SCC 75; (ii) Punjab Land Development and Reclamation Corporation Ltd., Chandigarh vs. Presiding Officer, Labour Page 69 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Court, Chandigarh reported in (1990) 3 SCC 682; and (iii) Sundeep Kumar Bafna vs. State of Maharashtra & Ors. reported in (2014) 16 SCC 623. It is submitted that the Apex Court in the case of Punjab Land Development and Reclamation Corporation Ltd. (supra) has held that a decision can be said generally to be given per incuriam when the Court has acted in ignorance of a previous decision of its own or when a High Court has acted in ignorance of a decision of this Court. It is submitted that as is discernible from the principle that there should be an element of ignorance or inadvertence, if neither of the fact situation is present. Therefore, the contention of the learned Government Pleader that the judgment is per incuriam, may not be accepted.
26. Heard Mr. P.K. Jani, learned senior advocate, Ms. Manisha L. Shah, learned Government Pleader, Mr. B.S. Patel, learned senior advocate and Mr. Dipan Desai, Mr. Dilip B. Rana, learned advocates for the respective parties through video conference.
27. A plethora of submissions has been made by the learned advocates for the respective parties, while citing a large number of judgments. On the basis of the submissions made by the learned advocates for the respective parties, following questions arise for the determination of this court:
(i) Whether the petitioners have locus standi to file the present writ petition?;
(ii) Whether the Registrar has formed the opinion that having regard to the public interest involved in the operation of Society it is necessary or expedient to nominate its representative on the committee and if yes, whether the decision making process in that behalf, is in sync with the provisions of sub-section (2) of Section 80 of the Act of 1961?;
(iii) Whether the order dated 24.8.2020 is passed in compliance with the principles of natural justice, more particularly, when the elected Page 70 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT members of the Board have not taken the charge?;
(iv) Whether the respondent Nos.6 and 7 were possessing requisite qualification for being appointed as nominees of the State Government on the committee of the Union?; and
(v) Whether the Government Resolution dated 20.8.2014 is against the principle laid down by this court in the judgments, namely, Amreli District Cooperative Sales and Purchase Union Ltd. (supra) and Gujarat State Marketing Co-operative Federation Ltd. & Anr. (supra)?.
28. Re. : (i) locus standi :-
28.1 The respondent - State as well as other respondents have raised the objection that the petitioners have no locus standi and present petition at the behest of the petitioners, is not maintainable. In support of such contention, reliance is placed on the judgments, in the cases of Daman Singh (supra) and C.O.D. Chheoki Employees' Co-op.
Society Ltd. (supra) to contend that the Apex Court has held that once a person becomes a member of the Society, he loses his individuality qua the Society and he has no independent rights except those given to him by statute and Bye-laws. It has been further held that the member must act and speak through the Society or rather, Society alone can act and speak for him qua rights or duties of the Society as a body.
28.2 Reliance is also placed on the judgment of this court in the case of Gujarat State Co-operative Agriculture & Rural Development (supra) wherein, the learned Single Judge while referring to the judgment in the case of Rameshbhai Maganbhai Lakhani (supra) has held that except the cooperative society, being a body corporate by virtue of Section 37 of the Act of 1961, none has any right whatsoever to challenge the action which in fact, is the action to be complained of only by the Society as such. The nomination, if at all, is not acceptable by the Society, then, the Society as a body corporate has to challenge the Page 71 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT same and this right of challenge, need not be stretched to the individual members independent of Society whose Bye-laws are binding on them. This court while rejecting the petition, held that right to challenge the order of nomination enures in favour of the bank as a body corporate and does not enure in favour of any individual member independent of the bank as a body corporate.
28.3 Reliance is also placed on the judgement of this court in the case of Pravinsinh Hemantsinh Zala (supra) rendered in connection with the provisions of sub-section (2) of section 74C which provides for the term of elected members of the Managing Committee. The petition was filed by the member of the bank and this court has held that the writ application is not maintainable as no legal right or any fundamental rights of the writ applicants could be said to have been infringed or violated by the respondent authorities in any manner and that the writ applicants, being the third parties, have no locus standi to file writ petition seeking directions against the respondent authorities to hold the election.
28.4 While opposing the aforesaid objection as regards locus standi, the learned senior counsel for the petitioners has placed strong reliance on the judgment in the case of Brijrajsinh Hemantsinh Jadeja (supra) to contend that this court, while dealing with the provisions of Section 80 itself of the Act of 1961, has ruled that when the representatives of the government are sent to the management of the bank, the members of the bank certainly have locus standi in given case to oppose the same, as ultimately, it will have an effect in the matter of managing the affairs of the bank. Under the circumstances, the Directors of the bank are also entitled to challenge the action of the State in connection with the sending of the representatives to the management of the bank and therefore, it cannot be said that the Directors of the bank have no locus standi to challenge the action of the State Government, simply because Page 72 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT the bank itself has not challenged the same. It is submitted that in view of the direct judgment of this court governing the issue, the reliance placed on the judgments in the cases of Daman Singh (supra) and C.O.D. Chheoki Employees' Co-op. Society Ltd. (supra) are of no help.
28.5 For dealing with the aforesaid contentions raised by the respective parties, the facts of the present case touching the said issue are required to be gone into. The result of the election of the Union was declared on 9.8.2020 and immediately thereafter, the Registrar undertook the exercise of appointing the nominees of the State Government on the Committee of the Union. The election of the Chairman and Vice-Chairman was scheduled to take place on 4.9.2020 and therefore, though the Committee has come into existence, it was without Chairman and Vice-Chairman at the helm of affairs. Therefore, in effect and substance the Managing Committee with Chairman and Vice-Chairman was not there. Peculiar situation exists inasmuch as, after the declaration of result on 9.8.2020 till 4.9.2020, in a way there was a vacuum. Had the Chairman and Vice-Chairman in place, it would have been open to the State Government to have argued that a member must act and speak through the Society or the Society alone can act and speak for him qua the right or duties of the Society as a body.
28.6 It is required to be noted that in a normal circumstances, a letter or notice would have been communicated to the Union through the Managing Director and he in turn would have placed it before the board of members and the board of members after convening a meeting, by an unanimous decision, would have communicated their views. The meeting would have been convened as per the Bye-laws headed by the Chairman and Vice-Chairman and decision would have been taken by majority. In that eventuality all the board members had the opportunity to either concur or to lodge their dissent which right flows from the Bye-
Page 73 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENTlaws. In present case in absence of the Chairman and Vice-Chairman, no meeting could be convened and resultantly no decision could be taken either supporting the decision of the State Government or opposing the same. Such a situation was not prevailing in any of the judgements cited by the respondents and therefore, the principle laid down in the said judgements are to be read in the context of the facts obtaining therein. Moreover, in the judgments where it has been held that the notice to the society is required to be given, the court has envisaged a situation where there is a fullfledged committee and the notice to the society is issued and that is responded to as a member of the committee. As aforesaid, so is not the position in the instant case.
28.7 In the present case, the issue is as regards the exercise of power by the Registrar under the provisions of sub-section (2) of Section 80 of the Act of 1961 at the time when the elections of Chairman and Vice-Chairman was yet to take place. Furthermore, the Division Bench of this court in the case of Brijrajsinh Hemantsinh Jadeja (supra) while dealing with the very provisions of Section 80, has held that the Directors of the bank have locus standi to file the writ petition challenging the action of the State Government. The Division Bench while dealing with the preliminary objection raised as regards the locus standi of the directors of the bank to maintain the writ petition, held that the directors of the bank certainly have locus standi in a given case, since, the representatives of the government are sent to the management of the bank and as ultimately, it will have an effect in the matter of managing the affairs of the bank. The Division Bench observed in paragraph 8 as under:
"8. So far as the locus standi of the appellants is concerned, the appellants, who are the original petitioners, are Directors of the bank. Since the representatives of the Government are sent to the management of the Bank, the members of the Bank certainly have locus standi in a given case to oppose the same, as ultimately, it will have effect regarding managing the affairs of the Bank. Under the eventuality, the Directors of the Bank are also entitled to challenge the Page 74 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT action of the State in connection with sending representatives to the management of the Bank. It, therefore, cannot be said that the appellants, who are the original petitioners in the writ petitions, have no locus standi to challenge the action of the State Government simply because the Bank itself has not challenged the same. The preliminary objection taken by Mr. Mehta about locus standi of the original petitioners, therefore, rejected."
The observations made by the division bench are in close proximity and would apply on all fours to the facts of present case inasmuch as, the division bench was dealing with the provisions of section 80 where the action of the State Government was challenged of sending three representatives to board of management of the concerned bank.
28.8 So far as the reliance placed on the judgment in the case of Daman Singh (supra) is concerned, in the said case, the Apex Court was dealing with the validity of various sub-sections of Section 13 of the Punjab Co-operative Societies Act, 1961. The contention of the learned counsel in that case was that Sections 13 (8), 13 (9) and 13 (10) did not make express provision for the issue of notice to the members of the concerned co-operative societies and were, therefore, violative of the principles of natural justice. In the absence of any provision, the rules of natural justice may be read into the provisions and notice to the members of the affected societies was imperative. Under the circumstances, the Apex Court while rejecting the said submission, held that once a person becomes a member of a cooperative society, he loses his individuality qua the Society and he has no independent rights except those given to him by statute and the Bye-laws. The Apex Court has further held that notice to the Society will be deemed as notice to all its members. The Apex Court further observed that sub-clause (b) of clause (9) of Section 13, however, provides the members also with an opportunity to be heard if they desire to be heard. Notice to an individual member of a cooperative society, therefore, was held as opposed to the very status of a cooperative society as a body corporate.
Page 75 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT28.9 A bare perusal of the observations in paragraph 11 nowhere suggests that the aspect of locus standi of a member was either an issue before the Apex Court or the Apex Court has dealt with the same. Besides, the learned counsel for the petitioners is right in contending that the language contained in sub-section (8) of Section 13 of the Punjab Co-operative Societies Act vis-a-vis the language of Section 80 (2), is different and distinct. Former confers the powers upon the Registrar to divide two or more Society or to nominate two or more Societies or to form a new Society; whereas, the latter is with respect to power of the State Government to nominate its representatives in a cooperative society where the State Government is of the opinion that it is necessary or expedient to do so, having public interest involved in the operation of a Society. Had it been the case of section 17A, position would have been different, as Section 17A of the Act of 1961 is in pari materia with Section 13 of the Punjab Co-operative Societies Act. It is rightly submitted that status of a primary members in cooperative society vis-a-vis the status of committee members in co-operative societies, is different. Primary members elect group of persons from amongst the members who are conferred with the powers to manage the affairs of the society. In Daman Singh's case, the Apex Court considered the right of hearing of primary members in amalgamation proceedings of a cooperative society and it did not consider the issue whether the notice is required to be issued to the elected members of the committee while nominating the representatives or with respect to locus standi of an elected member to challenge the nomination.
28.10 So far as the reliance placed on the judgment in the case of C.O.D. Chheoki Employees' Co-op. Society Ltd. (supra), is concerned, the Apex Court while recording the submissions of the learned counsel in paragraph 14, has referred to the judgment of Daman Singh (supra) and in paragraph 15, has referred to the case of Toguru Sudhakar Page 76 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Reddy & Anr. vs. Government of A.P. & Ors. reported in 1993 Supp. (4) SCC 439 wherein, it has been observed and held that a member of the Society has no independent right qua the Society and it is the Society that is entitled to represent as the corporate aggregate. No individual member is entitled to assail the constitutionality of the provisions of the Act, rules and the bye-laws as he has his right under the Act, rules and bye-laws and is subject to its operation. However, neither the judgment in the case of Daman Singh (supra) nor Chheoki Employees' Co-op. Society Ltd. (supra), considered the aspect of locus standi of elected members to challenge the nomination. Therefore, the reliance placed on the aforesaid judgments is of no aid to the respondents while raising the contention of locus standi of the petitioners for maintaining the writ petitions.
28.11 Contention is raised by the learned Government Pleader that the judgment of the Hon'ble Division Bench in the case of Brijrajsinh Hemantsinh Jadeja (supra) is per incuriam since the Division Bench has not considered the judgments in the case of Daman Singh (supra) and in the case of Chheoki Employees' Co-op. Society Ltd. (supra). It is well settled position of law that the decisions which are given in ignorance or forgetfulness of some statutory provisions or of some authorities binding on the court are considered as per incuriam by the strength of the bench. However, in the present case, as has been pointed out, the principle laid down by the judgments in the case of Daman Singh (supra) and in the case of Chheoki Employees' Co-op. Society Ltd. (supra) were with reference to different provisions whereas, the Division Bench in the case of Brijrajsingh Hemantsingh Jadeja was dealing with the provision governing different field arising out of completely different set of facts. Under the circumstances, the foundation on which the submission of per incuriam is raised is erroneous and does not deserve to be gone into.
Page 77 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT28.12 The judgement of the Division Bench of this court in the case of Pravinsinh Hemantsinh Zala (supra) cannot be made applicable to the facts of the present case for, the Division Bench while dealing with the provisions of sub-section (2) of section 74C of the Act of 1961 has expressed a prima facie opinion, whereas in the present case, the issue and controversy relate to the provisions of Section 80(2) wherein, the Board of Directors has a say in the matter of nomination either by concurring with the decision of the State Government or by lodging their dissent in the meeting for taking a decision. Therefore, the fact situation in the present case as well as the fact situation prevailing in the case of Pravinsinh Hemantsinh Zala (supra), is different and the said principle cannot be made applicable to the facts of the present case except the principle as regards the tenure of the Committee of five years commencing from the date of the election.
28.13 It has been also argued by learned advocate for the respondent Nos.8 to 12 that by no stretch of imagination, the petitioners can be termed to be as aggrieved party and the aggrieved party can be two persons by the decision of the State Government viz. the Committee and the Society. So far as the Committee is concerned, the majority of members has agreed to the State Government nominating its representative. It is also stated that neither the membership nor the directorship of the petitioners may be affected by the order of the State Government and therefore, the petition at the behest of the petitioners may not entertained. The said submission also does not merit acceptance inasmuch as the Division Bench in the case of Brijrajsinh Hemantsinh Zala (supra), while rejecting the preliminary objection as regards locus standi, has unequivocally held that sending the representative of the government on the management of the bank will have effect regarding managing the affairs of the bank and as a result, the directors of the bank are also entitled to challenge the action of the State in connection with the sending representatives to the Page 78 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT management of the bank and the representatives will have all the rights, liabilities as contained in sub-section (1) of section 80 of the Act.
28.14 The Apex Court in the case of Union of India vs. Amrit Lal Manchanda & Anr. (supra) has observed that the judgments are not be read as a statute. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. The observations of the courts are not be read as Euclid's theorem nor as the provisions of the statute for, each case depends on its own facts and close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. Relevant paragraphs 17 and 18 "17. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper.
18. The following words of Hidayatullah, J. In the matter of applying precedence have become locus classicus : (Abdul Kayum v. CIT).
"19...Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive."
* * * "Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it."
28.15 In the peculiar facts of the case, the petitioners have locus standi to file the present petition and the objection raised by the respondents and more particularly, the State Government in this behalf, is rejected.
Page 79 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT29. Re. : Formation of opinion and decision making process :
29.1 Section 80 of the Act of 1961 deals with the power of the State Government to appoint nominee. Sub-section (2) of Section 80 of the Act of 1961 reads thus:-
"80. Power to appoint Government nominee -
(2) Where the State Government is of the opinion that having regard to the public interest involved in the operation as a society' it is necessary or expedient so to do, it may nominate its representative on the committee of such society as if the State Government had subscribed to the share capital of the society and the provisions of sub-section (1) shall, so far as may be, apply to such nomination."
It provides that where the State Government is of the opinion that having regard to the public interest involved in the operation of the Society, it is necessary or expedient so to do, it may nominate its representative on the Committee of such Society as if the State Government had subscribed to the share capital of the Society and the provisions of sub-section (1) shall, so far as may be, apply to such nomination. For exercising the powers under sub-section (2) of Section 80 of the Act of 1961, primary requirement is formation of the opinion by the State Government as regards the public interest involved in the operation of a Society. The facts of the case touching the issue require a brief mention.
29.2 The District Registrar, has addressed a communication dated 18.8.2020 recommending the nomination of the respondent Nos.6 and 7 and the same was received on 18.8.2020 by the Deputy Registrar, Gandhinagar and inwarded on 19.8.2020 followed by issuance of a communication dated 20.8.2020, requiring the District Registrar, Surat seeking compliances.
29.3 This court, for the purpose of satisfying itself as regards formation of the opinion by the Registrar, has called for the files and the learned Government Pleader was pleased to place before the court both the files of Registrar, Gandhinagar and District Registrar, Surat for Page 80 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT its perusal and since there were certain clarifications, the learned Government Pleader was kind enough to clarify those aspects as well. Free English translation of the relevant extracts of file notings, in vernacular of the Registrar Gandhinagar, is set out hereinbelow:
"(1) Respectfully Submitted Letter of District Registrar, Surat dated: 18/08/2020- for perusal (Page No.1) As per the letter, a proposal has been made for the appointment of two government representatives in Surat District Co- operative Milk Producing Society Ltd., The names thereof are as under (1) Rajeshkumar Ranjitbhai Solanki (2) Yogeshkumar Chunilal Rajput The Societies have produced the certificate that, both the aforesaid persons are the members of Primary Milk Producing Society as well as there is no outstanding loan. Further, the certificates have been produced of police station certifying that, no offences have been registered against them. Both the applicants have made applications under section-80(2) for being appointment as Government Representative and have submitted their Identity Cards. Their names have also been recommended by the President of Surat District BJP.
Necessary checklist, list of Committee of the Society and the details of Audit and rectification reports have not been produced by the District Registrar, which may be called for.
District Registrar has opined for their appointment as Government Representative considering the public interest by stating that, the Society has obtained a loan of Rs.800 crores and the Primary Milk Society has dues of Rs. 200 crores. The consent letter of the Society has not been produced with the proposal. Hence, the show cause notice under section-80(2) is to be issued to the Society seeking necessary compliances from the District Registrar. For orders.
Sd/-
Sd(Illegible) Deputy Registrar
Head of Branch 18/08
Date:19/08/20
The compliances are necessitated as per 'A' and 'B' above. And after receiving such compliances, show cause notice be issued to the Union for hearing. For orders.
Head of Sd/- (Illegible) Sd/- (Illegible)
Branch Joint Registrar Registrar
19-08-20 20-08-20
Page 81 of 101
Downloaded on : Sat Feb 27 09:14:42 IST 2021
C/SCA/10405/2020 CAV JUDGMENT
Submitted with Respect
As directed in Note Para-2, the o/c and f/c of the letter addressed to District Registrar Surat for compliance at page No.49 is placed for signature.
And the show cause notice to be issued to the Society for hearing at page No.51 is placed for signature.
On leave
Head of Sd/- (Illegible) Sd/- (Illegible)
Branch Joint Registrar Deputy Registrar
Sd/-
Registrar-20-08-20
(4) Submitted with respect
The compliances received by the District Registrar Surat at page No.55 is submitted for perusal And, the letter of the Society at page No.143 is attached All the letters and necessary documents are placed for orders.
On Leave (Head of Branch) (Deputy Registrar) 21-08-20 (5) The compliances by District Registrar Surat at page No.55 and
the letter of MD of the Union at page No.143 shall be taken into consideration during the hearing on Monday, i.e. 24/08/2020.
(6) To be taken on record, the representation made by the MD in respect of section-33 and section-80(3) shall be considered.
Sd/-
The Registrar- 24-08-20
(7) Final Order
Sd/-
Registrar - 24-08-20
As per the instructions and directions given, the draft order under section 80(2) is prepared and is submitted for signature.
Sd/- Sd/-
24-08-20 Deputy Registrar 24-08-20
Joint Registrar
24-08-20
Sd/-
Registrar
Page 82 of 101
Downloaded on : Sat Feb 27 09:14:42 IST 2021
C/SCA/10405/2020 CAV JUDGMENT
24-08-20
Pursuant to the above note, the office copy and the f/c of order as per the approved draft is prepared and placed for signature.
Sd/-
Deputy Registrar Joint Registrar
24-08-20 24-08-20
Sd/-
Registrar
24-08-20
Apropos the above note, the order is prepared as the approved draft and placed for signature. O/c / F/c is submitted."
29.4 One is required to see as to whether there was any formation of opinion by the Registrar, that there is a public interest involved in the operation of the Society. The notings on the file of the Registrar do not suggest that the Registrar has formed any opinion and considered the relevant provisions of law as well as relevant factors. Such aspect is further strengthened by the events which took place from 18.8.2020 till 24.8.2020, when the order came to be passed by the Registrar. Formation of an opinion by the Registrar, which though subjective in nature, must have been based on the existence of objective facts. The opinion must have been formed by the Registrar based upon the circumstances i.e. having regard to the public interest involved in the operation of a Society which required the necessity or expediency for the nomination of the government representatives, which would have gone into the formation of the opinion. Therefore, the discretion conferred on the Registrar entailed the duty to form its opinion based on relevant facts and circumstances for nominating the representatives of the state government on the Committee.
29.5 The proposal dated 18.8.2020 of the District Registrar was received by the Deputy Registrar at Gandhinagar on 18.8.2020 and which was subsequently inwarded on 19.8.2020. The head of the department, on 19.8.2020 had put an endorsement to the effect that compliance is necessitated of "A" and "B" and after receiving Page 83 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT compliances, the Union be issued the show cause notice. The Registrar signed it on the same day, i.e. 20.8.2020. Immediately upon receipt of the proposal, a decision was taken for issuance of notice to the Union for hearing, however, there ought to have been formation of opinion prior to the decision of sending notice to the Union calling upon it to furnish a reply. Upon receipt of the proposal, the file ought to have been placed before the Registrar and the Registrar ought to have formed its opinion at the threshold in tune with the requirement of sub-section (2) of Section 80. It is only after the formation of the opinion that having regard to the public interest involved in the operation of a society, it is necessary or expedient to nominate its representative that a decision to issue notice should have followed. Interestingly, both the letters seeking compliances and the notice, have been issued on 20.8.2020. A bare perusal of the aforesaid sequence of events nowhere suggests that there is any formation of opinion by the Registrar as regards involvement of the public interest coupled with the aspect of necessity or expediency so to do. In fact, there is not a semblance of any expression of opinion in the noting section of the file by the Registrar. The powers are conferred upon the Registrar vide notification dated 22.8.2006 of the State Government, the Registrar has failed to exercise the same. There is no opinion formed and resultant, non-application of mind and hence all consequential actions taken by the Registrar, stand vitiated. As against this, in the reply, it is stated thus:
"A bare perusal of the impugned order dated 24.08.2020 would indicate that the said order has been passed on some of the following considerations, in addition to those, stated in the impugned show cause notice dated 20.08.2020:
(i) The 1,184 member societies of SUMUL represent the interests of almost 2,48,000 individual members.
(ii) For the milk producing livestock of the members of SUMUL, benefits of various government schemes such as Insurance scheme, Animal nutrition programme, General Group Insurance Scheme, Bulk Milk Cooling Unit, Scheme for Increasing Productivity of Livestock, Laboratory Inspection of Animals, etc., are being availed of, by the Page 84 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT members of the member societies of SUMUL.
(iii) Considering that SUMUL has been founded on cooperative principles as stated in section 4 of the Act and considering the interest of the members associated with SUMUL, the impugned order for appointment of 2 Government Nominees to the Managing Committee of SUMUL, in accordance with Government Resolution dated 08.04.2004 was passed."
The aforesaid averments are nothing but an attempt to show that there is formation of opinion by the Registrar, as regards the public interest involved and the powers have been rightly exercised.
29.6 This court, in the case of Gujarat State Marketing Co-operative Federation Ltd. & Anr. (supra) while upholding the validity of sub-section (2) of Section 80 in paragraph 30, has, inter alia, held -
"(30) As the upshot of the above discussion, the conclusions as under
can be summarised:-
(a) the provisions of sub-section (2) of Section 80 of the Act are constitutionally valid and there is no reason to take a view different from the view taken by this Court in AMRELI DISTRICT CO. OP. SALE and PURCHASE UNION LTD. [1984 (2) GLR 1244];
(b) the exercise of power conferred upon the State Government under the provisions of Section 80 (2) in a given case is open to challenge and is subject to judicial review;
(c) any order nominating representatives in exercise of the powers under Section 80 (2) of the Act will be liable to be struck down if the order was contrary to law or if relevant factors were not considered or irrelevant factors were considered in making the order or the decision was such that no reasonable person would have taken it;
(d) the nomination of representatives on the committee of a society in exercise of the powers under Section 80 (2) is coextensive with and operates only during the term of the committee on which such nominees are appointed;
(e) the term of office of the representatives nominated under Section 80 (2) shall depend upon, besides the pleasure of the State Government or the terms specified in their appointment orders, the Rules and bye-laws of the society regarding constitution and term of the committee;
(f) the appointment of representatives on the committee of a society by nomination under the provisions of Section 80 (2) has civil consequences, and, therefore, the principles of natural justice are required to be observed while forming the opinion that, having regard Page 85 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT to the public interest involved in the operation of the society, it is necessary or expedient to nominate the representatives. For compliance with the principles of natural justice, adequate and meaningful opportunity of hearing has to be given to the society and, as a part thereof, the society has to be informed about the grounds on which the opinion as to involvement of public interest in the operation of the society was based and the necessity or expediency for the nomination had arisen. The guidelines evolved and issued in compliance with the observation in paragraph 79 of the judgment in Amreli District Co.op. Sale and Purchase Union Ltd. (supra) are also required to be followed while exercising the power and the exercise of power has to be consistent with such guidelines; and
(g) the power to nominate under Section 80 (2), by incorporation of the provisions of sub-section (1), means the right to nominate three representatives as if the State Government had subscribed to the share capital of the society;"
29.7 At this stage, a reference to the judgment of the Apex Court in the case of Bhikhubhai Vithalbhai Patel (supra) is worth referring to wherein, the Apex Court, while interpreting the proviso to Section 17 (1)
(a)(ii) viz. "where the State Government is of opinion that substantial modifications in the draft development plan and regulations are necessary....", held that these words are indicative of the satisfaction being subjective one, but there must exist circumstances stated in the proviso, which are condition precedent for the formation of opinion.
Relevant paragraphs 24, 25 and 26 read thus:
"24. The proviso opens with the words "where the State Government is of opinion that substantial modifications in the draft development plan and regulations are necessary..." These words are indicative of the satisfaction being subjective one but there must exist circumstances stated in the proviso which are conditions precedent for the formation of the opinion. Opinion to be formed by the State Government cannot be on imaginary grounds, wishful thinking, however, laudable that may be. Such a course is impermissible in law. The formation of the opinion, though subjective, must be based on the material disclosing that a necessity had arisen to make substantial modifications in the draft development plan.
25. The formation of the opinion by the State Government is with reference to the necessity that may have had arisen to make substantial modifications in the draft development plan. The expression: "as considered necessary" is again of crucial importance. The term "consider" means to think over; it connotes that there should be active application of the mind. In other words the term "consider"
postulates consideration of all the relevant aspects of the matter. A plain reading of the relevant provision suggests that the State Page 86 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Government may publish the modifications only after consideration that such modifications have become necessary. The word "necessary" means indispensable, requisite; indispensably requisite, useful, incidental or conducive; essential; unavoidable; impossible to be otherwise; not to be avoided; inevitable. The word "necessary" must be construed in the connection in which it is used. (See- Advanced Law Lexicon, 3rd Edition, 2005; P. Ramanatha Aiyar)
26. The formation of the opinion by the State Government should reflect intense application of mind with reference to the material available on record that it had become necessary to propose substantial modifications to the draft development plan."
29.8 The Apex Court in the case of Sachidanand Pandey (supra) has affirmed the proposition that a decision must be arrived at after taking into account all relevant considerations eschewing all irrelevant considerations. In the present case, there is no consideration at all by the Registrar much less any opinion formed by him.
29.9 As can be culled out from the principle laid down by the Apex Court, the opinion to be formed by the authority cannot be on imaginary grounds or wishful thinking, however, laudable that may be. The formation of the opinion by the Registrar should reflect intense application of mind with reference to the material available on record that it had become necessary and expedient in the public interest to nominate the representatives on the committee. Clearly, the Registrar has not even bothered to form any opinion much less applying the mind to the material available on record. From the entire file, there is not a whisper as to when and how the Registrar has formed an opinion as regards the public interest for appointing the respondent Nos.6 and 7 as the nominees. In absence of any formation of opinion by the Registrar, the steps and action taken by the Registrar which culminated into the order dated 24.8.2020, suffer from the legal infirmity inasmuch as, the requirement of sub-section (2) of Section 80 of the Act of 1961, is not fulfilled. Therefore, this court is of the opinion that the decision taken by the Registrar is tainted with complete lack of consideration of any material and thus, such decision would be irrational and arbitrary.
Page 87 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT29.10 Besides, the notings recorded in the file, are more like a Rojkam rather than forming any opinion. The government functions by taking decisions on the strength of views and suggestions expressed by various officers at different levels, ultimately, getting finality at the hands of the final authority. The notings in the file are for the purpose of expressing opinion, views and suggestions of the officers at various levels. It is well settled that the internal notings in the file are maintained according to the rules of business and is a privileged document. It is also undisputed that the State transacts its business through the notings in file. Therefore, the opinions are to be recorded in the files which get culminated into passing of the order. Perceptibly, it cannot be said that the Registrar has formed the opinion as required under sub-section (2) of Section 80 of the Act of 1961.
29.11 Pertinently, the file notings do not suggest that there were any reasons available to the Registrar to have acted with such a lightening speed inasmuch as, on 20.8.2020, the opinion was sought for and the District Registrar provided the opinion on 21.8.2020 and the order was passed on 24.8.2020. This court is mindful of the fact that the reasonableness of a decision does not depend upon the time which it takes. Decisions which are taken promptly cannot be assumed to be bad because they are taken promptly. However, in the present case, the speed with which the Registrar has taken a decision, lacks credibility for, when the Registrar very well knew that elections are declared on 9.8.2020 and the new body was yet to take charge. Moreover, in absence of any reasons, substantiating the action of taking prompt decision, being available on the files, undue haste shown by the Registrar in passing the order dated 24.8.2020, has the element of arbitrariness and therefore, bad.
29.12 Furthermore, the action of the Registrar is substantiated by filing affidavit as aforesaid, however, as has been culled out from the files, Page 88 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT the formation of opinion is missing and therefore, what was missing at the time of taking decision cannot be improvised by way of filing affidavit. The Apex Court in the case of Mohindersingh Gill (supra) while reiterating the earlier principle laid down in the case of Gordhan Bhanji (supra) has held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the times it comes to the court on account of a challenge, gets validated by additional grounds later brought out. Therefore, the explanation offered in the affidavit, contents and explanation thereof, does not merit acceptance.
29.13 Quiet apart, the sequence of events which took place at the end of the office of the District Registrar also speak volumes. Furthermore, the file notings of the office of the District Registrar records about the receipt of the proposal of the respondent Nos.6 and 7, which is signed as 17.8.2020. Pertinently, the proposal by the respondent Nos.6 and 7 was dated 18.8.2020 and therefore, there could not have been any notings by the office of the District Registrar on 17.8.2020. The learned Government Pleader, was requested to clarify the said aspect and the reply was that there is a typographical error in indicating the date as 17.8.2020. Be that as it may. The process started with the receipt of the proposal of the District Registrar. The file notings, as aforesaid, record that on 20.8.2020, an approval was given for sending the letter seeking compliances. The said letter, as aforesaid, has reached the office of the District Registrar, Surat on 21.8.2020 and on 21.8.2020 itself, the office of the Registrar, Gandhinagar has received the compliances from the District Registrar, Surat. Therefore, the whole process started from 18.8.2020 and has concluded on 21.8.2020.
29.14 The letter dated 20.8.2020 was issued by the office of the Page 89 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT Registrar, which reached the office of the District Registrar, Surat on 21.8.2020, the District Registrar, Surat required the Union to furnish the details as contained in the letter dated 20.8.2020. Further, there is nothing available in the files as to when and how respondent Nos.6 and 7 were required to provide the check-list. However, the respondent Nos.6 and 7 have provided all the details, including, declaration form, undertaking on 21.8.2020. Interestingly, the affidavits/undertakings of the respondent Nos.6 and 7 dated 20.8.2020 and 21.8.2020, state that since they have been appointed as the nominees of the State Government, they would be acting in furtherance of the Government Resolution dated 8.4.2004 and will safeguard the interest of the State Government. The learned Government Pleader was confronted as to how the respondent Nos.6 and 7 have filed such undertakings dated 20.8.2020 and 21.8.2020 i.e. prior to the passing of the order dated 24.8.2020. The explanation furnished on behalf of the Registrar was that undertaking contains typographical error and respondent Nos.6 and 7 would be in a position to explain the same. It is curious enough to note that when the order was passed appointing the respondent Nos.6 and 7 as nominees on 24.8.2020, how could they have declared on 20.8.2020 and on 21.8.2020 on oath of they having been appointed as nominees of the State Government. Moreover, the respondent No.7, in his check-list against item No.4 has declared that there are no criminal cases filed against him. However, in his own affidavit, filed in the captioned proceedings, he has declared on oath that there are four criminal cases filed against him. The learned Government Pleader was requested to clarify the said issue as well, as to whether the Registrar has verified the veracity of the said contents, but no explanation could come forth. Therefore, the learned senior counsel for the petitioners is right in contending that the Registrar has not applied his independent mind while exercising the powers under Section 80 (2) of the Act of 1961.
Page 90 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT29.15 In the case of Tarlochan Dev Sharma (supra), the Apex Court referred to the judgment in the case of Anirudhusinhji Jadeja (supra), wherein it has been held that a statutory authority vested with jurisdiction must exercise it according to its own discretion; discretion exercised under the directions or instruction of some higher authority is failure to exercise discretion altogether. Executive Officers may in exercise of their statutory discretions take into account considerations of public policy and in some context policy of a minister or the government as a whole when it is relevant, being a relevant factor in weighing the policy, but they are not absolved from their duty to exercise their personal judgment in individual cases, unless explicit statutory provision has been made for instructions by a superior to bind them. Relevant extracts of paragraphs 15 and 16 read thus:
"15. It is interesting to view the present day bureaucrat-politician relationship scenario:
"A bureaucratic apparatus is a means of attaining the goals prescribed by the political leaders at the top. Like Alladins lamp, it serves the interest of whosoever wields it. Those at the helm of affairs exercise apical dominance by dint of their political legitimacy.... The ministers make strategic decisions. The officers provide trucks, petrol and drivers. They give march orders. The minister tells them where to go. The officers have to act upon instructions from above without creating a fuss about it.
16. In the system of Indian Democratic Governance as contemplated by the Constitution senior officers occupying key positions such as Secretaries are not supposed to mortgage their own discretion, volition and decision making authority and be prepared to give way or being pushed back or pressed ahead at the behest of politicians for carrying out commands having no sanctity in law.......In Anirudhsinhji Jadeja (1995) 5 SCC 302, this court has held that a statutory authority vested with jurisdiction must exercise it according to its own discretion; discretion exercised under the direction or instruction of some higher authority is failure to exercise discretion altogether. Observations of this court in The Purtabpore Company Ltd., AIR 1970 SC 1896, are instructive and apposite. Executive officers may in exercise of their statutory discretions take into account considerations of public policy and in some context policy of Minister or the Government as a whole when it is a relevant factor in weighing the policy but they are not absolved from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for instructions by a superior to bind them......"Page 91 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT
29.16 Similarly, the Apex Court in the case of State of M.P. vs. Sanjay Nagayach (supra) has held that the statutory functionaries like Registrar/Joint Registrar of cooperative societies, functioning under the respective Co-operative Act must be above suspicion and function independently without external pressure. When an authority invested with the power purports to act in its own but in substance, the power is exercised by external guidance or a pressure, it would amount to non- exercise of power, statutorily vested. Relevant paragraphs 36 and 37 read thus:
"36. Statutory functionaries like Registrar/Joint Registrar of Co- operative Societies functioning under the respective Co-operative Act must be above suspicion and function independently without external pressure. When an authority invested with the power purports to act on its own but in substance the power is exercised by external guidance or pressure, it would amount to non-exercise of power, statutorily vested....."
37. The Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with pre-conceived notion and shall not speak his masters' voice, because the formation of opinion must be his own, not of somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In our view, the impugned order will not fall in that category."
Therefore, in absence of any formation of any opinion in tune with the requirement of sub-section (2) of Section 80 of the Act of 1961 by the Registrar and straight away passing the order dated 24.8.2020, is nothing but, as discussed herein above, an exercise tainted with illegality, which deserves to be quashed and set aside.
30. Re. : (iii) principles of natural justice :
30.1 As per sub-section (2) of Section 80, after forming of opinion as to the necessity or expediency, having regard to the public interest involved in the operation of a society, so to do, the State Government Page 92 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT may nominate its representative on the committee of such Society.
Pertinently, the nomination of the representative of the State Government is on the Committee as defined under sub-section (5) of Section 2 of the Act of 1961. Committee means the Managing Committee or other governing body of a Society to which the direction and control of the management of the affairs of the Society is entrusted. The Registrar is obligated to hear the Society and Society acts through its Committee which is elected by its members. As the record suggest notice has been issued to the Chairman and Managing Director who cannot be said to be the Society.
30.2 At the cost of repetition, it is required to be noted that in the normal circumstances, perhaps the notice issued to the Chairman and Managing Director of the Society would have been in a right earnest and would have been placed before the Committee members headed by the Chairman and Vice-Chairman and the decision would have been taken by all the members during such meeting when, the members would have been at liberty, either to concur with the nomination or to lodge their dissent. In the present case, that eventuality was not available inasmuch as, the election of the Chairman and Vice-Chairman was yet to take place on 4.9.2020. Further, the Directors had no opportunity either to concur with the decision of the State Government or to oppose the same. The members - directors are there on the Managing Committee not for the sake of being there but, various duties and responsibilities are conferred upon them under the Act and the Bye- laws to perform. The voice of the Directors on the Committee as members is in furtherance of the democratic principle. Had the Committee with Chairman and Vice-Chairman being in place, then in that case, a situation would have been different and a decision could have been taken.
30.3 It is contended on behalf of the State Government that the Page 93 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT members are not required to be issued any notice in view of the well settled position as enunciated in the case of Daman Singh (surpa) as well as C.O.D. Chheoki Employees' Co-op. Society Ltd. (supra) wherein, it is held that once a person becomes a member of a Co- operative Society, he loses his individuality qua the Society and he has no independent rights except those given to him by the statute in the Bye-laws. It is also argued that the member must act and speak through the Society or rather, the Society alone can act and speak for him qua rights or duties of the Society as a body. There is and cannot be quarrel to such proposition. However, what is required to be seen is that the notice which was issued to the Society through the Managing Director can be construed as a notice satisfying the requirement of principles of natural justice.
30.4 The notice dated 20.8.2020 was issued by the Registrar and copy whereof was addressed to the Chairman and Managing Director. Supposedly, the Registrar and the District Registrar were aware that though the election of the Society was held, the election of the Chairman and Vice-Chairman was yet to take place. Necessarily, it means that Chairman was not available to answer the reply and the Managing Director was not authorised to file such a reply as has been indicated by him on 21.8.2020. Therefore, though the notice was issued to the Society/Committee, virtually, there was no say available of the Society/Committee either opposing or supporting the nomination. In essence, such notice was nothing but a paper formality and against the principles of natural justice.
30.5 Besides, when the petitioners approached the Registrar with a request that in absence of Chairman and Vice-Chairman, the decision of nominating the representatives on the Committee of the Society may be deferred till 4.9.2020, the Registrar, for the reasons best known to him, proceeded further to pass the order nominating the respondent Page 94 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT nos.6 and 7 on the committee without assigning any reason as to why nomination of the representatives of the State Government was imminent and that it cannot wait till the election of Chairman and Vice- Chairman.
30.6 The judgment cited in the case of State Bank of Patiala (supra), was in respect of departmental enquiry and the Apex Court, while summarising the earlier judgments, in paragraph 33, has held that the principles are to be not intended to be exhaustive and are evolved keeping in view the context of disciplinary enquiries and orders of punishment imposed by an employer upon the employee. The Apex Court in the connection of disciplinary inquiries, in sub-paragraph 3 of paragraph 33, has observed and held that procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under 'no notice', 'no opportunity' and 'no hearing' categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice.
30.7 The judgment in the case of A.S. Motors (supra), the Apex Court had held that rules of natural justice, are not rigid, immutable or embodied rules that may be capable of being put in strait jacket. What the Courts in essence look for in every case where violation of the principles of natural justice is alleged is whether the affected party was given reasonable opportunity to present its case and whether the administrative authority had acted fairly, impartially and reasonably.
30.8 In alternative, it is also argued that there was no obligation to issue notice to the Directors inasmuch as, the notice was issued to the Managing Director of the Society. Judgments in the case of M/s. Bilakchand Gyanchand Co. (supra) and Sarabjit Singh (supra) have Page 95 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT been pressed in service to contend that the notice to the Managing Director is construed to be a notice to the Society. The said judgments cannot be made applicable, for, both the judgements were dealing with the provisions and proceedings under the Negotiable Instruments Act. The High Court quashed the proceedings concluding that notice under Section 138 was sent to the Managing Director at his office address and the same cannot be construed that the notice was sent to the company itself. The Apex Court while allowing the appeal held that the proceedings were initiated by the appellant against the Managing Director of the company who had signed the cheques and that the High Court erred in quashing the proceedings under Section 482 of the Code of Criminal Procedure. Similarly, in the case of Sarabjit Singh (supra), the case was with respect to the proceedings under Section 319 of the Code of Criminal Procedure. Pertinently, the judgements cited cannot be made applicable to the facts of the present case, considering the fact that the provisions of the Act of 1961 are not in pari materia with the provisions of the Negotiable Instruments Act. Even otherwise the apex court in the subsequent judgement, in the case of Aneeta Hada (supra) has held that that notice to the Managing Director is not sufficient and notice to the company is must.
In fact, in the judgment of the Apex Court in the case of A.S. Motors (supra) it has been held that the doctrine of audi alteram partem is thus aimed at striking at arbitrariness and want of fair play. Therefore, if the action of the authorities is founded on the touchstone of arbitrariness and the authorities, if have not acted fairly, that would be in violation of principles of natural justice and would be liable to be quashed and set aside.
30.9 Under the circumstances, when the Chairman and Vice- Chairman were not elected of the Committee, considering the peculiar circumstances, the Registrar ought to have issued notice to the Page 96 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT members of the Committee inasmuch as, upon the nomination of the respondent Nos.6 and 7 they would assume the office and will have all rights, duties, responsibilities and liabilities, as if they are the members of the Committee as provided under sub-section (1) of Section 80 of the Act of 1961. As has been held by this court in the case of Brijrajsinh Hemantsinh Jadeja (supra) sending the representatives of the government, will ultimately, have effect regarding managing the affairs of the Union. Therefore, the action of the Registrar is in violation of the principles of natural justice and on this count also, the impugned action deserves to be quashed and set aside.
31. Re. : (vi) respondent Nos.6 and 7 possessing requisite qualification for being appointed as nominees of the State Government on the committee of Union :
31.1 So far as the eligibility and qualification of the respondent Nos.6 and 7 are concerned, this court has held that the exercise of power by the Registrar at the threshold was not in consonance with the provisions of sub-section (2) of section 80, which aspect strikes at the root of the matter and therefore, the issue of nominating the respondent Nos.6 and 7 being consequential, does not survive and need not be gone into.
32. Re.: (vi) validity of Government Resolution dated 20.8.2014:
32.1 The validity of the Government Resolution dated 20.8.2014 has been challenged by the petitioners on the ground that the said Government Resolution is in teeth of the principles laid down by this court in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra). It is contended that this court, had expected of the State Government to exercise such a wide power in a manner which does not infringe or violate the Bye-laws prescribing the qualifications and/or disqualifications for being members of the Society in question since otherwise the power would be arbitrary as it can be exercised for appointing those persons who might have been defeated at the Page 97 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT elections or who would not have been entitled to be members or to continue as members of a given Society in the ordinary course under the Bye-laws. The relevant averments made in the petition, are as under:
"(ff) the office order dated 20.8.2014 by the Additional Secretary, Agriculture & Cooperation Department is a retrograde step. It defies the election of this court in Amreli District Cooperative Sale and Purchase Union Ltd. vs. State of Gujarat reported in 1984 (2) GLR 1244 which has specifically held that the powers under Section 80 (1) and 80 (2) of the Act of 1961, cannot be exercised by nominating the individuals in the Committee who have been defeated in the election.
The office order dated 20.8.2014 deletes the vital condition no - 15 of the notification dated 8.04.2004 prohibiting the nomination of defeated candidates."
32.2 Pertinently, the challenge is laid to the Government Resolution dated 20.8.2014; however, the State Government has not bothered to put on record any explanation substantiating the same. Had it been a validity of the legislation, the affidavit of the State Government was not necessitated; however, when the policy is under challenge, which is framed by the State Government, there had to be an affidavit, justifying and substantiating the formation of the policy decision. In absence of any explanation put forth by the State Government, the validity of the Government Resolution dated 20.8.2014, is to be adjudicated on the basis of the principle laid down by this court in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) as well as Gujarat State Marketing Co-operative Federation Ltd. & Anr. (supra). This court, in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) in paragraph 79 has observed thus:
"79. Before we part with the discussion pertaining to Section 80 (2) we must clarify since the petitioners apprehend abuse of this power that the State Government cannot exercise the power conferred by this section by appointing such persons who are disqualified to be members or who have incurred the disqualification as prescribed in the Bye-laws. It is expected that the Government has to exercise such a wide power in a manner which does not infringe or violate the Bye-laws prescribing the qualifications and/ or disqualifications for being members of the society in question since otherwise this power would be arbitrary as it can be exercised for appointing those persons who might have been defeated at the elections or who would not have been entitled to be members or to Page 98 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT continue as members of a given society in the ordinary course under the Bye-laws such as persons who have committed defaults in the refund of the advances by the Society or who may be occupying offices in the society, or partners in the firm or appropriators of business having conflicting interests with that of the society. It is, therefore, expected of the State Government that it will prescribe a proper guideline in the matter of exercise of this power and see to it that the power is not exercised contrary to such guideline. Re: Section 80-A:"
32.3 Thereafter, this court in the case of Gujarat State Marketing Co- operative Federation Ltd. & Anr. (surpa) in paragraph 5 noted the arguments made on behalf of the State Government that "the Government had issued, revised from time to time and published the guidelines as envisaged in paragraph 79 of the said judgment so as to ensure that nominations were in conformity with the bye-laws of the Society and the public interest and purpose of the provisions were duly served." This court in paragraph 10 observed thus:
"10. There was no dispute about the proposition that the society in which representatives were proposed to be nominated was required to be given adequate and meaningful opportunity of being heard and the proposition that how and on what basis the opinion that public interest was involved in the operation of a society was formed was required to be disclosed as a part of compliance with the principles of natural justice. Similarly, the necessity or expediency of nominating representatives had to be examined and established on objective facts. The State authorities appear to have consistently followed the practice of disclosing the names of the proposed nominees and detailed guidelines, the latest being by the Resolution dated 8.4.2004, which were placed on record are being followed to determine the eligibility of the proposed nominees as stated by the learned Advocate General....."
32.4 Therefore, the State Government, as per the observations made in paragraph 79 of the judgment in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra), had issued the guidelines in the form of Government Resolution dated 8.4.2004 which was placed before this court while substantiating the challenge to section 80 of the Act of 1961 in the case of Gujarat State Marketing Cooperation Federation Ltd. The Division Bench, has taken note of the said Government Resolution dated 8.4.2004 while upholding the validity of sub-section (2) of Section 80 of the Act of 1961.
Page 99 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT32.5 Pertinently, the Division Bench in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) has expected that the State Government will not exercise such a wide power, infringing or violating the Bye-laws, prescribing the qualifications and/or disqualifications for being member of the Society by appointing persons who might have been defeated at the elections. When the Division Bench in case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra) has observed as aforesaid and the State Government having issued the Government Resolution dated 8.4.2004 which was subsequently approved by the Division Bench in the case of Gujarat State Marketing Co-operative Federation Ltd. & Anr. (supra), it could not have issued the Government Resolution dated 20.8.2014, deleting condition No.15. Furthermore, there is no explanation coming forth on the record on behalf of the State Government for deleting condition No.15 of the Government Resolution dated 8.4.2004. Such resolution, is clearly against the observations made by the Division Bench in the case of Amreli District Cooperative Sales and Purchase Union Ltd. (supra). Therefore, the Government Resolution dated 20.8.2014 deserves to be quashed and set aside and is hereby quashed and set aside.
33. So far as the affidavit filed by the Joint Registrar is concerned, assigning the task of filing reply, cannot be said to be an essential function and the learned Government Pleader is right in contending that there is no sub-delegation of the powers vested in the Registrar under Section 80 of the Act of 1961. Only the authority to affirm the affidavit has been conferred upon the Joint Registrar and in support whereof, the relevant noting of the file granting such authority has been placed on record. Therefore, the contention raised on behalf of the petitioners that the affidavit could not have been filed by the Joint Registrar, is not accepted and is hereby rejected.
34. Similarly, the contention raised by Mr. B.S. Patel, learned Page 100 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021 C/SCA/10405/2020 CAV JUDGMENT advocate that as per section 79 of the Act of 1961 no act of a society or a committee or any officer done in good faith in pursuance of the business of the society shall be deemed to be invalid by reason only of some defect subsequently discovered in the organisation of the society, it is required to be noted that in view of the order having been quashed solely on the ground that there was infraction of the requirement while exercising power under sub-section (2) of section 80, the said issue also does not arise and need not be gone into.
35. In light of the aforementioned discussion, the petitions succeed. Accordingly, the order dated 24.8.2020, is hereby quashed and set aside.
36. In view of the order dated 2.9.2020 passed by this court, the elections of Chairman and Vice-Chairman were held and results were kept in a separate ballot boxes duly sealed. It is directed that the Election Officer & Collector concerned, under his supervision shall proceed to declare the elections in accordance with law, while following necessary requirements.
37. This court has called for the original files of the Registrar, Gandhinagar and the District Registrar, Surat. The photocopy of noting sections of both the files, shall be retained on the record of the captioned proceedings and the original files are handed over to the learned Assistant Government Pleader.
38. Rule is made absolute to the aforesaid extent. No order as to costs.
39. In view of the judgment passed in the main writ petitions, the civil applications do not survive and are disposed of accordingly.
Sd/-
(SANGEETA K. VISHEN,J) BHARAT/BINOY/NEHA GUPTA Page 101 of 101 Downloaded on : Sat Feb 27 09:14:42 IST 2021