Gujarat High Court
Sodha Parmar Kantibhai Manibhai vs State Of Gujarat on 26 August, 2022
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13072 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SODHA PARMAR KANTIBHAI MANIBHAI & 2 other(s)
Versus
STATE OF GUJARAT & 8 other(s)
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Appearance:
MR SN SHELAT, SENIOR ADVOCATE WITH MR CP CHAMPANERI(5920)
for the Petitioner(s) No. 1,2,3
MR KAMAL TRIVEDI, ADVOCATE GENERAL WITH MR VINAY VISHEN for
the Respondent(s) No. 1
NOTICE NOT RECD BACK for the Respondent(s) No. 2
NOTICE SERVED for the Respondent(s) No. ,3,4,5
MR DHAVAL DAVE, SENIOR ADVOCATE WITH MR PRANAV U
RAVAL(9475) for the Respondent(s) No. 9
MR PK JANI, SENIOR ADVOCATE WITH MR SHIVANG P JANI(8285) for
the Respondent(s) No. 6,7,8
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 26/08/2022
CAV JUDGMENT
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1. By this petition under Articles 226 and 227 of the Constitution of India, the petitioners have challenged the action of the respondent no.2 - Registrar of Cooperative Societies, Gujarat State to appoint respondent nos. 6,7 and 8 as the Government Representatives in Kheda District Cooperative Milk Producers Union Limited (For short "the Union") while exercising powers under section 80(2) of the Gujarat Co-operative Societies Act, 1961 (For short "the Act"). : FACTS :
2. Brief facts of the case are as under:
2.1) The Union is a duly registered cooperative society registered under the provisions of the Act and its management, affairs and business are carried out by the Managing Committee constituted under the provisions of the Act, Rules and byelaws of Page 2 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the Union. The Managing Committee of the Union is elected as per the provisions of section 74C(1) of the Act and the election of the Managing Committee is conducted subject to the provisions of Chapter XIA of the Constitution of India. The Union is a specified cooperative society under section 74C(1)(iv) of the Act.
2.2) On expiry of the term of the Managing Committee of the Union, election for the purpose of electing new Managing Committee was held on 29.08.2020 and result thereof was declared on 31.08.2020.
2.3) The petitioners filed Special Civil Application No.11308/2020 since the authorities did not hold the election of the Chairman of the Union in time and it was prayed to restrain the authorities from appointing Government Representatives under Page 3 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 section 80(2) of the Act and to convene the meeting to elect Chairman and Vice-Chairman.
During the course of hearing on 08.10.2020 it was submitted by the respondent authorities that no notice is issued under section 80(2) of the Act and accordingly, this Court disposed of Special Civil Application No.11308/2020 reserving the liberty to file fresh petition if notice under section 80(2) of the Act is issued.
2.4) Thereafter notice under section 80(2) of the Act was issued on 14.10.2020 and hearing was fixed on 20.10.2020 for appointment of Government Representatives. The petitioners thereafter preferred this petition on 17.10.2020 challenging the show cause notice issued under section 80(2) of the Act.
2.5) Hearing was conducted by respondent Page 4 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 no.2 on 20.10.2020 and 10 Directors filed their replies seeking time informing about the pendency of this petition wherein show cause notice under section 80(2) was challenged.
2.6) Respondent no.2, however, passed the impugned order dated 20.10.2020 nominating respondent nos. 6, 7 and 8 as Government Representatives as members of the Managing committee.
2.7) It is the case of the petitioners that respondent nos. 6 and 7 filed their nomination to contest the election from Electorate Division No.1 - Anand and Electorate Division No.11 - Nadiad respectively but later both the respondents withdrew the nomination forms. It is also alleged by the petitioners that respondent nos. 6 and 7 are holding the position in the Page 5 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 ruling party. Respondent no.8 was serving as a Librarian and is a close associate of respondent no.9 Ex-MLA of Balasinor and member of the Managing Committee of the Union. It was therefore, alleged by the petitioners that respondent nos. 6 to 8 are appointed as Government Representatives on the Board of Directors of the Union under section 80(2) of the Act so as to see that respondent no.9 who is in minority gets elected to the post of Chairman and/or Vice- Chairman by converting minority into majority.
: SUBMISSIONS OF THE PETITIONERS:
3. Learned Senior Advocate Mr. S.N. Shelat assisted by learned advocate Mr. C.P. Champaneri for the petitioners submitted that the Union is registered on 14.12.1946 by the Joint Registrar of Cooperative Societies Page 6 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 under Certificate No.P.330 of 1946 and since then the Union has never incurred losses from its business activities. It was submitted that the Union is popularly known as "AMUL DAIRY" and as per the byelaws, the Board of Directors consists of 12 Directors who are representatives from Milk Societies and one to be elected from amongst the individual members. The representatives elected from individual members are only eligible for election of Chairman and Vice-Chairman. It was pointed out that Government nominees were never appointed on the Managing Committee of the Union by the State Government. It was submitted that byelaw no. 16 of the byelaws of the Union provides for constitution of Board of Directors for a term of five years from the date of election and reads as under:
"16. Board of Directors:
16A. The union shall be administered by Board Page 7 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of Directors constituted as under. The term of the Board of Directors shall be Five years from the date of election
16.A.1 Representatives from Milk 12 Societies affiliated with the Union
16.A.2 Member from amongst elected 01 delegated of the individual members as per bye law No. 10.4
16.A.3 Nominee of the Registrar, 01 Cooperative Societies
16.A.4 Nominees of the financing 02 Agency(s) upto 2 (two members) till the time; the Union is indebted to them i.e. one each from (1) Kheda District Central Cooperative Bank Ltd, and (2) national Dairy Development Board
16.A.5 Nominee of the Gujarat 01 Cooperative Milk Marketing Federation Limited
16.A.6 Managing Director (Ex- 01 Officio)
16.A.7 Union may Co-opt persons 02 experience in the field of Dairy/Food Technology/ Management/banking/Finance 20 Total
16.B.1 Representatives elected from 16.A.1 and 16.A.2, as above shall only be eligible for election of Chairman and Vice Chairman of the Union.Page 8 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
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16.B.2 Representatives/Nominees from 16A.1 to
16.A.5 as above shall be eligible to vote for election of the Chairman and Vice Chairman of the Union."
3.1) It was further pointed out that byelaw no. 17 of the byelaws of the Union provides for qualifications of representative of member society for contesting election of Board. It was submitted by learned Senior Advocate Mr. Shelat that byelaw no.17.2.9 prohibits any salaried employee of any cooperative/Government/Grant-in-aid company / firm / society/ institute/ bank or any other organisation to contest election. It was therefore, submitted that the respondent nos. 6 to 8 were not eligible to contest election and therefore, by misusing the powers under section 80(2) of the Act, the respondent authorities have appointed them as Government Representatives.
3.2) Learned Senior Advocate Mr. Shelat Page 9 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 thereafter invited the attention of the Court to the order dated 08.10.2020 passed by the coordinate Bench of this Court in Special Civil Application No.11308/2020 filed by the petitioners to point out that the said petition was disposed of as no notice under section 80(2) of the Act was issued till the date of disposal of the petition and the Court observed that as on date, there was no procedure in contemplation by the State Government. It was pointed out that liberty was reserved in favour of the petitioners to approach this Court again if the petitioners are aggrieved by any subsequent development about the issuance of notice under section 80(2) of the Act.
3.3) Learned Senior Advocate Mr. Shelat referred to the show cause notice dated 14.10.2020 issued by respondent no.2 Registrar of the Cooperative Societies, State Page 10 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of Gujarat for nominating three Government Representatives under section 80(2) of the Act in view of prima facie involvement of the interest of the Union. It was submitted by learned Senior Advocate Mr.Shelat that replies to the show cause notice was filed by the petitioners and other members of the Board of Directors on the date of hearing scheduled on 20.10.2020, meanwhile the petitioners also filed this petition before this Court. It was submitted that filing of this petition was also disclosed to respondent no.2, however, respondent no.2 passed the impugned order dated 20.10.2020 after giving opportunity of hearing to the three Directors who were present before him reiterating the same reasons as given in the show cause notice dated 14.10.2020. 3.4) Learned Senior Advocate Mr. Shelat assailed the impugned order dated 20.10.2020 Page 11 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 contending that the same suffers from vice of non-application of mind by respondent no.2 as it is contrary to the provisions of section 80(2) of the Act inasmuch as it is not stated as to why it is necessary or expedient to nominate three Government representatives. It was submitted that the provision of section 80(2) of the Act has been considered in detail by this Court in case of Amreli District Cooperative Sale and Purchase Union Limited v. State of Gujarat reported in 25(2) GLR 1244 and in case of Gujarat State Marketing Cooperative Federation Limited and another v. State of Gujarat and others reported in (2005) 1 GLH 144, wherein the validity of section 80(2) of the Act was challenged and was upheld.
3.5) It was further submitted that the impugned order dated 20.10.2020 is passed in flagrant breach of principles of natural Page 12 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 justice since though it was disclosed to respondent no.2 that the petitioners have approached this Court by filing this petition, respondent no.2 without giving an opportunity of hearing passed the impugned order. In support of this submission, reliance was placed on the decision of this Court in case of Shree Bileshwer Khand Udyog Khedut Sahakari Mandali Ltd & anr. v. State of Gujarat & ors. reported in 1994(1) GLR 1 wherein the Division Bench of this Court held that the principles of natural justice are required to be complied with as the impugned order results in violating the autonomy of the Union. It was submitted that section 80(2) of the Act enables the State Government to nominate upto three representatives if 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 was Page 13 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 submitted that the decision of the State Government is administrative in character and is to be arrived at on subjective satisfaction and therefore, before taking any decision for nominating the representatives on the Board of Directors of the Union, adequate and meaningful opportunity of hearing ought to have been given to the members of the Board of Directors of the Union. It was held as under:
"(6.) Apart from the ruling expressed by the Bench of this Court in the earlier pronouncement; by looking into the implications of Sec. 80(2) of the Act in the light of the other provisions of the Act, we have no ambiguity in our mind that the application of the process thereunder results in an order which impinges upon the autonomy of the society, and this leads to civil consequences. Under Sec. 80(1), the State Government acquires a right to nominate three representatives on the committee of the society on the footing of its having subscribed to the share capital or extended the guarantee as contemplated therein. But under Sec. 80(2), the society is not placed in such a situation. The State Government is not a subscriber to the share Page 14 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 capital or a guarantor. Such a society, the elements present in Sec. 80(1) not being there, normally is entitled to be governed only by bodies elected, and in that view, it should remain autonomous. But that right to function autonomous is intruded and invaded upon, when the State Government chooses to nominate its representatives when it forms an opinion that it is necessary or expedient to do so, having regard to the public interest involved in the operation of the society. The formation of the opinion and the expression of it, by setting in motion the process under Sec. 80(2) do have repercussion adverse to the autonomy of the society. Thus, the proceedings do involve civil consequences. Even if we construe the proceedings under Sec. 80(2) as only administrative, they leading to civil consequences, must adhere to the principles of natural justice. The law must now be taken to be well settled that even in administrative proceedings, which involve civil consequences, the doctrine of natural justice must be held to be applicable. The Statute as such need not speak expressly to that effect. The silence of the Statute has no exclusionary effect on the application of the principles of natural justice when the proceedings prosecuted thereunder result in civil consequences. Time after time, it has been pointed out that the aim of the principles of natural justice is to secure justice or to put it negatively, to prevent miscarriage of justice. These principles do take the place in areas Page 15 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 not specifically covered by statute law. When we take note of the above propositions, we are bound to countenance the grievance of the appellants that the impugned proceedings had come to be passed in violation of the principles of natural justice. In this view, we are not able to subscribe our support to the opinion of the learned single Judge on this question."
3.6) Learned Senior Advocate Mr. Shelat also relied upon the decision of the Apex Court in case of State of Punjab v. Khan Chand and others reported in 1974(1) SCC 549 with regard to the term "necessary or expedient" used in section 80(2) of the Act as under:
"28. I think that the expression "necessary or expedient" used in the section is sufficient to give an adequate guidance to the Government when read in juxtaposition with the implied purpose of the conferment of the power. 'Necessary' means "what is indispensable, needful or essential"
and 'expedient, means "useful for effecting a desired result, fit or suitable for the purpose". One has to appreciate the fact that the legislature, while laying down the policy or principle, is bound to keep Page 16 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 in mind the nature of the problems that is to be tackled by the State Government. A variety of factors and circumstances arise for consideration in deciding whether a particular movable property should or should not be requisitioned. The legislature rightly appears to have decided that it would not serve the purpose if it were to define and describe all the relevant factors which have to be taken into account for requisitioning any movable property."
3.7) It was submitted by learned Senior Advocate Mr. Shelat that the State Government is required to form an opinion as regards (i) that the public interest was involved in the operation of the society. (ii) necessity or expediency must be examined and established.
(iii) that the nominees are eligible under the byelaws of the society and the resolution. (iv) the Registrar has to form an independent opinion as regards the expediency, necessity, and public interest.
(v) the authority is to maintain proper balance between adverse effects on the Page 17 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 rights, liberty and interest of persons while passing the order under section 80(2) of the Act having regard to the principles of proportionality.
3.8) It was further submitted that respondent no.2 has also not examined the proportionality of number of nominees. Reliance was also placed on the decision of coordinate Bench dated 06.11.2020 passed in case of Bharat Sudambhai Patel v. State of Gujarat in Special Civil Application No.10405/2020, wherein it is held as under:
"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 Page 18 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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.
Xxx 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 Cooperative Societies functioning Page 19 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 Page 20 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 to be quashed and set aside."
3.9) It was submitted that word "necessary" as it appears in section 80(2) of the Act is considered by the Apex Court in case of Bhikhubhai Vithlabhai Patel and others v. State of Gujarat and another reported in AIR 2008 SC 1771, wherein it is held as under :
"26. 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 necessaryµ must be construed in the connection in which it is used. (See-Advanced Law Lexicon, 3rd Edition, 2005; P. Ramanatha Aiyar)"
3.10) Reliance was also placed on decision of Union of India and others v. Tulsiram Patel and others reported in AIR 1985 SC 1416 with regard to the meaning of 'expedient'. 3.11) It was therefore submitted that Page 21 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 entire proceedings initiated by the respondent authorities culminating into impugned order dated 20.10.2020 are vitiated by unfairness and bias as the petitioners are confronted with definite conclusion of appointment of Government Representatives right from the beginning.
3.12) Reliance was placed on the decision of Apex Court in case of Oryx Fisheries Private Limited v. Union of India reported in 2010 (13) SCC 427 wherein it is held by the Apex Court that at the stage of show cause, the authorities cannot instead of telling the person to proceed against the charges, confront him with definite conclusions of the alleged guilt and if that is done entire proceedings initiated by the show cause notice gets visited by unfairness, bias and the subsequent proceedings become an idle ceremony.
Page 22 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 3.13) It was submitted that the impugned order was passed in hot haste, smacks mala fide and in breach of principles of natural justice as no opportunity is provided to file reply though prayed for. It was submitted that only four days' time was granted which is not rational. Reliance was placed on the decision of the Apex Court in case of Fuljit Kaur v. State of Punjab reported in AIR 2010 SC 1937 wherein the Apex Court held as under:
"26. Before parting with the case, it may be pertinent to mention here that the allotment had been made to the appellant within 48 hours of submission of her application though in ordinary cases, it takes about a year. Appellant had further been favoured to pay the aforesaid provisional price of Rs. 93,000/- in four installments in two years, as is evident from the letter dated 8.4.1987. Making the allotment in such a hasty manner itself is arbitrary and unreasonable and is hit by Article 14 of the Constitution. This Court has consistently held that "when a thing is done in a post-haste manner, malafide would be presumed."
Anything done in undue haste can also be termed as "arbitrary and cannot be condoned in law." [vide Dr. S.P. Kapoor Page 23 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Vs. State of Himachal Pradesh & Ors. AIR 1981 SC 2181; Madhya Pradesh Hasta Shilpa Vikas Nigam Ltd. Vs. Devendra Kumar Jain & Ors. (1995) 1 SCC 638; Bahadursinh Lakhubhai Gohil Vs. Jagdishbhai M. Kamalia & Ors. AIR 2004 SC 1159; and Zenit Mataplast P. LTd. Vs. State of Maharashtra & Ors. (2009)10 SCC 388]. Thus, such an allotment in favour of the appellant is liable to be declared to have been made in arbitrary and unreasonable manner. However, we are not inclined to take such drastic steps as the appellant has developed the land subsequent to allotment."
3.14) It was pointed out that show cause notice was received on 16.10.2020 and the petitioners challenged the show cause notice by preferring this petition on 17.10.2020 and time was sought on 20.10.2020 by filing an application having regard to the fact the petitioner had approached this Court challenging the show cause notice but at the time of hearing respondent no.2 did not pass any order on the said application and therefore, in absence of grant of time and in absence of hearing, the impugned order is Page 24 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 passed in breach of the principles of natural justice, reliance was placed on the decision in case of Siemens Aktiengeselischaft & S.Ltd. Versus DMRC Limited reported in 2014 (11) SCC 288.
3.15) Learned Senior Advocate Mr. Shelat submitted that respondent no.6 had filed nomination to contest election but had withdrawn his candidature on 17.08.2020 whereas respondent no.7 had filed his nomination which also was subsequently withdrawn. It was submitted that both respondent nos. 6 and 7 are closely allied with the party in power in the State suggesting that the exercise has been undertaken to nominate the members who are politically favorable to the Government. 3.16) Learned Senior Advocate Mr. Shelat further submitted that respondent no.8 is Page 25 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 working as a Librarian in an institution which is grant in aid institution and respondent no.8 is ineligible to be appointed as Government representative as per byelaw no.17.2.9 and resolution dated 08.04.2004 issued by the State Government. It was submitted that the guidelines do not permit nomination if the person is ineligible under the byelaws, the Registrar however passed the impugned order dated 20.10.2020 without disclosing the eligibility of any of the nominations and rejecting the application of the petitioners for seeking time. It was submitted that contention raised on behalf of respondent no.8 that there are other members who are ineligible but are continued and therefore, respondent no.8 also be continued, cannot be considered. It was submitted that if others are eligible that cannot be a consideration for ineligible member to continue. In support of such contention Page 26 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 reliance was placed on decision of the Apex Court in case of Yadu Nandan Garg v. State of Rajasthan reported in AIR 1996 SC 520 to contend that wrong exemption granted as per the provisions of the Rajasthan Land Acquisition Act, 1953, does not clothe others to get the same benefit, and Article 14 of the Constitution cannot be pressed in service on the ground of discrimination and case of Empire Construction and Hotel Company Limited v. Municipal Corporation of the city of Ahmedabad and others reported in 1995(2) GLH 511 was relied to contend that if others are ineligible that cannot be a consideration for ineligible member to continue. 3.17) It was submitted that respondent no.8 has already voted, and the impugned order is implemented, however, relying upon the decision in case of Nagar Mahapalika v. State of Uttar Pradesh reported in AIR 2006 Page 27 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 SC 2113, it was submitted that the Hon'ble Supreme Court in the said decision held that in absence of interim relief if the order is implemented, the High Court can invalidate the order at the final hearing. 3.18) Learned Senior Advocate Mr. Shelat submitted that the entire order is required to be quashed and set aside. It was submitted that in a case where the decision is based upon subjective satisfaction and the discretion of the authority, the Court can only quash the order and ask the authority to reconsider the matter if the discretion is not properly exercised. It was submitted that the contention of the respondent authorities that even at the stage of argument, the petitioners have not made out any ground regarding respondent no.6 and 7 is not relevant because no additional piece of evidence can be brought in the pleadings in Page 28 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the proceedings unless the same are brought before he administrative authority. It was submitted that the authorities committed a grave error in not giving the time to respond to the notice as the contesting objectors could not find out about the eligibility of respondent no.6 to 8 in a short time of four days.
3.19) Learned Senior Advocate Mr. Shelat submitted that if the petitioners would have been given opportunity of hearing, the petitioners could have pointed out to the authority that persons expressly disqualified under the byelaws are nominated by the State Government. It was submitted that there was violation of Statement of Object and Reasons of 97th Amendment in Article 43B of the Constitution of India inasmuch as member based democracy is being tilted in favour of the factors influenced by Government and Page 29 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 thereby the majority of the petitioners in the Committee is disturbed. It was further submitted that there is no justification or logic coming out in appointment of three members. It was submitted that merely by citing the public interest, the right to reputation of the petitioners is affected as it gives a message to the members and public at large that the elected members are not able to take care of the interest of the society and members and hence the State Government had to interfere and nominate the members.
3.20) It was submitted that as a consequence of the impugned order, the democratic member control is affected, and unqualified members have been nominated. It was further submitted that the manner in which the order is passed, clearly reflects that no sufficient time to reply by Page 30 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 collecting material is provided and further non supply of letter dated 13.10.2020 of the District Registrar, Anand to the petitioners has caused grave injustice to the petitioners. It was further submitted that though in the previous petition affidavit was filed to show that the election shall be conducted by 25.10.2020 however, no such materials are produced to show that any proceedings are contemplated. It was submitted that due to the haste shown by the State Government, patently disqualified members have been nominated which have caused prejudice to the petitioners and other members of the Union. It was submitted that the petitioners could not avail the opportunity to verify the credibility of all the nominated persons in such short time and enquire whether they are beneficial to the interest of the society and therefore, prejudice is caused to the petitioners. It Page 31 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 was further submitted that the society operates under the Act and the byelaws and the violation of the byelaws in appointment of any member or nomination of any member who is expressly disqualified is a prejudice to the interest of the members and to the society as a whole.
3.21) Learned Senior Advocate Mr. Shelat submitted that great care, caution, and objectivity was required to be undertaken by the respondent no.2 - Registrar while passing the impugned order under section 80(2) of the Act so that no grievance can be made that order is passed for a collateral purpose for granting opportunity to vote at the election. It was submitted that in view of amendment of the Constitution, the impugned order is required to be examined in context of amended Article 19(1)(c) and Article 43-B of the Constitution of India. It was further Page 32 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 submitted that the Constitution or the law does not provide that the nominees have a right to participate at the election and that nomination has to be before the election. In support of such contention, reliance was placed on the decision in case of Vipulbhai Chaudhary v. Gujarat Cooperative Milk Maketing Federation Limited and others reported in AIR 2015 SC 1960 to contend that apart from providing the right to form cooperative societies as fundamental right under Article 19 of the Constitution of India and insertion of Article 43B under the Directive Principles of the State policy for promotion of cooperative societies, the amendment also introduced a new part IXB on cooperative societies with an aim to ensure the autonomous and democratic functioning of the cooperative societies.
3.22) Learned Senior Advocate thereafter Page 33 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 placed reliance on Article 243ZT of the Constitution. It was submitted that the right to form a cooperative society is now not restricted to being a statutory right but is also a fundamental right in view of the 97th Constitutional Amendment amending Article 19(1)(c) of the Constitution of India. It was further submitted that the insertion of Article 43B mandates the State to appreciate and promote the principles of voluntary formation, autonomous functioning, democratic control and professional management of the cooperative societies. Referring to the Statement of Objects and Reasons of 97th amendment, it was submitted that such amendment provides for conducting the elections in a free and fair manner, restriction on unnecessary outside interferences and democratic member-control, member-economic functions.
Page 34 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 3.23) Learned Senior Counsel Mr. Shelat further submitted that the right to form a cooperative society also includes the right to manage the cooperative society in a democratic manner by the members and any action impinging upon the same directly or indirectly is in violation of the fundamental rights. It was therefore, submitted that the impugned order when tends to interfere with the management of the society not only falls short of the principles of natural justice but also falls short of the governing principles of Article 19 which cannot be curtailed by any statute or reading of the statute in a manner to the intent of Constitution. It was submitted that in a case where the State comes out open that they have passed this order with a view to tilt the balance clearly runs against the Statement of Objects and Reasons of the 97th amendment. It was submitted that the 97th amendment clearly Page 35 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 restricts political bias if it impinges upon the member-controlled autonomy. Learned Senior Counsel Mr. Shelat submitted that it is now obligatory on part of the State Government in view of Article 43B to promote autonomy and restrict State interference in the affairs of the society and merely citing public interest, it cannot be taken over in such manner.
: SUBMISSIONS OF RESPONDENT NOS. 1 TO 5:
4. Learned Advocate General Mr. Kamal B. Trivedi for respondent nos. 1 to 5 submitted that the Agriculture and Cooperation department of the State Government issued Government Resolution dated 08.04.2004 laying down qualification criteria for the purpose of nomination of Government representatives in the Managing Committees of the cooperative societies. It was pointed out that respondent no.6 to 8 are nominated keeping in mind the qualification Page 36 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 criteria prescribed in the said Government Resolution. It was submitted that in exercise of powers conferred under section 162 of the Act, the State Government issued notification dated 22.08.2006 and delegated the powers under sub-section (2) of section 80 of the Act in favour of Registrar-respondent no.2 for the purpose of nominating the Government Representative in the Managing Committee of any cooperative society.
4.1) It was submitted that in exercise of such delegated powers, respondent no.2 Registrar has passed the impugned order after giving an opportunity of hearing to the petitioners on 20.10.2020 appointing respondent nos. 6 to 8 as Government representative in the managing committee of the Union under section 80(2) of the Act. It was pointed by learned Advocate General that pursuant to the impugned order dated Page 37 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 20.10.2020, the petitioners filed an amendment application challenging the aforesaid order which was granted by this Court on 22.10.2020 directing to proceed with the meeting convened for electing Chairman and Vice Chairman on 23.10.2020 with a direction that the votes cast by three Government Representatives appointed pursuant to order dated 20.10.2020 shall be kept in sealed cover and the result of the election of the Chairman and Vice-chairman shall be kept in abeyance. It was further pointed out that the first meeting of the members of the Managing Committee of the Union including respondent nos. 6 to 8 took place held on 23.10.2020 to elect Chairman and Vice- Chairman and since there was no contest for the post of Chairman in view of there being only one candidate Shri Ramansinh Parmar, he was declared elected Chairman whereas there were two candidates for the post of Vice- Page 38 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Chairman and hence, the result of the election of the said post came to be kept in a sealed cover as per the directions of this Court.
4.2) Learned Advocate General Shri Trivedi also pointed out that on 31.05.2021, respondent no.8 who was working as Librarian got retired from his job.
4.3) Learned Advocate General Mr.Trivedi submitted that respondent no.2-Registrar was required to pass the order under section 80(2) of the Act as the election of the Managing Committee of Chairman and Vice- Chairman was scheduled to be held on 23.10.2020 and sufficient time was given to the petitioners to file reply and make their submissions. It was pointed out that two of the Directors also filed replies on merits and therefore, Registrar-respondent no.2 Page 39 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 after considering the replies has passed the impugned order in consonance with the provisions of section 80(2) of the Act. It was submitted that no prejudice is caused to the petitioners since the election process of the Chairman and Vice-Chairman could not have been stalled by granting further time to the petitioners. It was submitted that the District Registrar, Anand by letter dated 13.10.2020 has made recommendation to appoint respondent nos. 6 to 8 as Government Representatives on the Board of Directors of the Union and considering such recommendations, opinion was formed by respondent no.2 and accordingly, show cause notice was issued on 14.10.2020. 4.4) It was submitted that the allegation of political mala fide made by the petitioners have not been substantiated with any credible evidence except bald Page 40 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 allegations. It was further submitted that on conjoint reading of sections 80(1) and 80(2) of the Act, the State Government has right to appoint the Government nominees and such appointments are at the pleasure of the Government and persons so appointed hold the office during the pleasure of the Government. 4.5) It was submitted that respondent no.2 Registrar under the delegated powers has formed the opinion considering that it is necessary and expedient to appoint Government Representatives in public interest as the activities of the Union involves more than 7,00,000 farmers who provide milk to the respective local Unions who in turn are the members of the AMUL Dairy Union. 4.6) It was pointed out that the impugned order clearly observes that AMUL Dairy Union has 1214-member cooperative societies and primary objective of the Union includes the Page 41 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 production, processing and sale of milk and provision of veterinary services to its member societies. It was pointed out that as per the Annual Report of 2019-2020 of the Union, every year 113 crores kg of milk is procured, processed and sold and the annual turnover of the Union is 4400 crores approximately. It was submitted that considering large number of the member societies of the Kheda District Cooperative Milk Producers Union, there are almost 7,00,000 individual members whose interests are connected with the functioning of the Union.
4.7) Learned Advocate General Mr. Trivedi therefore, submitted that public interest is derived from the fact that the entire cooperative movement of the Union created ripples, reaching the beneficiary at the end of the chain and the Union is engaged in Page 42 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 granting the benefits of various Government runs schemes such as Janshree Beema Yojna, Cattle Feed Schemes, General Insurance Schemes, Bulk Milk Cooling Units, Cattle vaccinations etc., therefore, the argument of the petitioners that there is no public interest involved in the activities of the Union as it only supplies products to GCMMF is rightly not accepted by the Registrar while forming the opinion that in public interest it is necessary and expedient to appoint Government Representative on the Board of Directors of the Union. 4.8) With regard to the qualifications of respondent nos. 6 to 8, reliance was placed on the following averments in the affidavit in reply filed on behalf of respondent no.2:
"10.QUALIFICATIONS OF THE RESPONDENT No. 6-8 10.1 In order to be appointed as a Page 43 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Government nominee under Section 80(2) of the Act, the candidates are required to fulfil the qualifications as stated in the Government Resolution of 08.04.2004, which lays down certain conditions such as, membership of a society for at least one year, no pending loans, awareness about the principles of cooperative societies, etc. A copy of the said Government Resolution dated 08.04.2004 is annexed hereto and marked as ANNEXURE-R3.10.2 Qualifications of Respondent No. 6
are as follows:
i. Respondent No. 6 has been the member of the executive committee of Kunjrav Seva Mandli from the past 10 years, which is a member society of Anand Taluka Purchase and Sale Union.
ii. He has been a member of the Committee of Kunjrav Dudh Sahkari Mandali from the past 3 years and has deposited 5650 litres of milk in 183 days in the Kunjrav Milk Cooperative Society.10.3 Qualifications of Respondent No. 7
are as follows:
i Respondent No. 7 has been the Chairman of Surashamad Dudh Mandli from the past 30 years and has also been the member of Nadiad Taluka co-operative Purchase and Sale Union for the past 4 years.
ii He was also a member of the Surashamad Seva Sahkari Mandali for 15 years.
Page 44 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 10.4 Respondent No. 8 has been a member of the executive committee of the Jorapura Dudh Mandli from the past 16 years and presently is the chairman of the said society.
10.5 It has been contended by the Petitioners that the Respondent No. 6 and 7 had filled their nomination form to contest the election of the members of the managing committee and had thereafter withdrawn the same. The Petitioners have also contended that the Respondents No. 6 and 7 have their allegiance to the ruling political party. It is the contention of the Respondents that the Respondent No. 8 is serving as a librarian in the grant-in- aid school at Jorapura. By raising such contentions in the present Petition, the Petitioners have attempted to submit before the Hon'ble Court that the Respondents No. 6 and 7 do not hold the qualification or personality as envisaged under the Section 80(2) of the Act.
10.6 It is imperative to note that all the three Respondents who have been appointed as government nominees have submitted the requisite undertakings and certificates to the District Registrar Anand, which were sent to the Respondent No. 2, along with the proposal dated 13.10.2020. Such undertakings pertain to the qualifications-possessed by them, as laid down by the Government Resolution dated 08.04.2004. It is submitted that none of the Government nominees who have been appointed vide the order dated Page 45 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 20.10.2020, do not hold any disqualification as per the Act, Rules or even the Bye-laws, which would make them ineligible to be appointed as Government Nominees under Section 80(2) of the Act.
10.7 In respect of the allegations of political malafides which have been raised in the present Petition, it is submitted that allegations of political malafides are best made easily to substantiate and to support a petition. In the facts of the present case, these allegations are not supported by any credible evidence, except bald allegations.
10.8 A conjoined reading of Section 80(1) and Section 80(2) would show that the government has the 'right' to appoint the government nominees. The provision also makes it clear that such appointments are at the pleasure of the State Government and the persons so appointed hold the office during the pleasure of the State Government. This assumes significance in view of the contention of the Petitioners regarding the allegiance of the Respondent No. 6-8 to a particular political party. The fact that the Respondent No. 6-8 hold the office as government nominees at the pleasure of the State Government, would make their allegiance to any political party, immaterial.
10.9 Considering the nature of the provision in the Statute, it is submitted that in case of a normal Government function, there are certain Page 46 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 areas of administrative actions and there are special occasions when a certain amount of freedom of action must be left with the Government in public interest. If such an action is taken, it cannot be said to be arbitrary, capricious, mala fide or unreasonable." 4.9) With regard to the allegation of political bias, reliance was placed on the following averments in affidavit in reply of respondent no.2:
"11 ALLEGATIONS OF POLITICAL BIAS 11.1 The primary contention of Petitioners is that the appointment of the Government nominees has been made to create an artificial majority in order to tilt the balance in favour of the group supported by the Government, for the purpose of election of the Chairman and Vice Chairman. In this regard, it is imperative to note that the managing committee of the society consists of 13 elected members, 1 representative of the District Registrar and 1 representative of the GCMMF, i.e. total 15 members.
11.2. The facts and circumstances of the present case indicate that there are 10 directors who are not in favour of the appointment and there are 3 directors who are in favour of the appointment of the government nominees. It is the contention of the Petitioners that the three directors, though in hopeless Page 47 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 minority, will create artificial majority, if such appointment of the Respondent No. 6-8 is permitted. This contention of the Petitioners is highly misplaced in light of the fact that there are 10 directors who are opposing the appointment of the government nominees and therefore, belong to one group. On the other hand, there are 3 directors who are favouring the appointment of the Government Nominees and therefore, purportedly belong to another group. It is submitted that the contention of the petitioners in respect of political bias also needs to be viewed in light of the fact that the Chairman of the society was unopposed in the election on 23.10.2020. This further indicates the fallacy in the argument of the petitioners, in this regard.
11.3 Furthermore, it cannot be presumed that merely because the nominees have been appointed by the State Government, on every issue that is brought before the Managing Committee, the nominee directors would vote only in a particular manner. This contention finds support in the judgment of this Hon'ble Court in Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd., Vadgam V/s. State of Gujarat (Special Civil Application No. 7331 of 2009). The relevant observations of the Hon'ble Court in Vadgam (supra) are reproduced hereunder:
"9. Similarly the contention that appointment of three nominees by the Government would tilt the balance and may affect the voting pattern of the Managing Committee is also an issue Page 48 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 which is primarily based on an apprehension only on the basis of political alignment of various members with different political parties. The Court cannot presume 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. In absence of any evidence or pointer in this direction the exercise of powers under Section 80 (2) of the Act cannot be either termed to be mala-fide or tainted with any other consideration. Furthermore, even if the voting pattern changes that by itself is not sufficient."
11.4 It is also the contention of the Petitioner that immediately after the issuance of show cause notice under Section 80(2) of the Act on 13.10.2020, the election officer of the Society communicated to the Managing Director on 16.10.2010 and asked him to circulate the agenda notice for holding and convening the meeting to elect the Chairman and Vice Chairman on 23.10.2020. This argument has been made by the Petitioners in order to canvas the malafide in the actions of the Respondent authorities. In this regard, it is pertinent to note that the date, 23.10.2020, assumes significance, in view of the undertaking given by the State before the Hon'ble Court in Special Civil Application No. 11308 of 2020. Considering that the elections were required to be conducted on or before 25.10.2020 as undertaken before Page 49 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the Hon'ble Court in Special Civil Application No. 11308 of 2020, the question of any malafide in the actions of the Respondent authorities, does not arise.
11.5 Moreover, it is submitted that 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 the overall supervision of the conduct of the election and therefore, the District Registrar and the Collector/Election officer, 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.
11.6 A bare perusal of the entire petition would indicate that the foundations of the contentions of the Petitioners is political in nature. It has been laid down by the Hon'ble Apex Court as well as this Hon'ble Court in a catena of judgments that political issues are not justiciable issues and the appeal should be to the polls and not to the Courts."
4.10) It was submitted by learned Advocate General that the opportunity of hearing granted by respondent no.2 in the matter of Page 50 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 nomination of Government nominees in the Managing Committee of the Union under section 80(2) of the Act cannot be equated with a kind of opportunity of hearing being granted in respect of adjudication of any disputed question before quasi-judicial or judicial forum. It was submitted that during the course of hearing on 20.10.2020, the petitioners did not raise any objection with regard to the denial of adequate and fair opportunity to controvert the contents of show cause notice. It was submitted that order dated 20.10.2020 is a speaking order which is self-explanatory on its own strength and the petitioners have failed to show how they are prejudiced on any count. 4.11) It was submitted that the rights of the petitioners cannot be said to have been affected by the nomination of respondent nos. 6 to 8 as the Board of Directors of the Page 51 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Union.
4.12) Learned Advocate General therefore, submitted that on the basis of the facts of the case respondent no.2 after due application of mind as regards public interest for appointing respondent nos. 6 to 8 as Government Representatives have passed the impugned order. Learned Advocate General distinguished the judgment dated 6.11.2020 passed in Special Civil Application No.10405/2020 in case of Surat District Milk Producers Union Ltd. (i.e. Bharat Sudambhai Patel v. State of Gujarat) relied upon by the petitioners in which in paragraph no. 29.3 of the said order after perusal of the file, this Court has held that Registrar in the said case did not form any opinion with regard to the public interest for appointing Government Representatives whereas in the facts of the present case, respondent no.2- Page 52 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Registrar has formed an opinion on the basis of proposal dated 13.10.2020 received from the Deputy Registrar (Marketing) with regard to involvement of public interest in the operation of Union for effecting the nomination in question. It was also emphasized by learned Advocate General that public interest is taken into consideration while forming the opinion in the impugned order which is also reflected in the show cause notice.
4.13) With regard to the power of the State Government to nominate its representatives under section 80(2) of the Act, learned Advocate General after referring to proviso (a) to sub-section(3) of section 74C of the Act and sub-sections (1) and (2) of section 80 of the Act, submitted that conjoint reading of the said provisions clearly suggest that the Government nominees Page 53 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 in the Managing Committee of any society are as good as elected members. Therefore, it is always desirable to see that nomination takes place well in advance before the election of Chairman and Vice-Chairman in the Managing Committee so that the viewpoints of nominated members can very well be taken into account. It was therefore, submitted that there is nothing wrong on the part of respondent no.2- Registrar to see that order under challenge is passed on 20.10.2020 so that they could participate in the election of Chairman and Vice-Chairman held on 23.10.2020. 4.14) Learned Advocate General Mr.Trivedi submitted that while exercising the right of effecting nomination under section 80(2) of the Act, the important factors as stated in case of Amreli District Cooperative Sale and Purchase Union (supra) have been followed. In the said case, while dealing with the Page 54 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 challenge against the constitutional validity of section 80(2) of the Act, it was held that while exercising power of nomination under section 80(2) of the Act, the State Government should not select persons who are disqualified to be members or who have incurred disqualification as prescribed in the byelaws and before exercising such powers, the State Government must hear the society concerned in respect of which the power of nomination is proposed to be exercised. Learned Advocate General submitted that in addition to aforesaid two factors for exercise of power of effecting nomination of the Government Representatives in the Managing Committee of the Society, section 80(2) requires the State Government to form an opinion on presence of objective facts suggesting the involvement of public interest in the operation of society and satisfaction as regards the necessity or expediency of Page 55 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 nomination of Government representatives based on the said objective facts. 4.15) Learned Advocate General relied upon the decision in case of Gujarat State Marketing Co-operative Federation ltd. (supra) wherein regarding concept of "public interest" under section 80(2) of the Act it was held as under:
"9.1.................. The provision clearly contemplates application of mind by the State Government for the formation of opinion as to the involvement of public interest in the operation of a society as also as to the necessity or expediency of nominating representatives on its committee. The considerations would encompass the field or area in which the society operates, the manner of its operation, the goods or commodities in which it deals and all other factors that have any effect on the interests of the concerned public in the area of its operation. The extent to which the interest of public is affected or is required to be safeguarded will be a matter for the welfare State to consider while forming the opinion as to whether it is necessary or expedient to make such nomination.Page 56 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 The guidelines of "public interest"
and the requirement of examining the necessity or expediency for exercise of power to nominate are, in our view, sufficient in-built safeguards in the impugned provisions against any arbitrary exercise of power." 4.16) It was submitted that in show cause notice dated 14.10.2020 by way of compliance of principles of natural justice, the very aspect of public interest was conveyed to the petitioners. It was further submitted that impugned order dated 20.10.2020 clearly established that the appointment of nominee seems appropriate and reasonable. 4.17) Learned Advocate General relied upon the judgment in case of Amarjit Singh v. State of Punjab reported in (2010) 10 SCC 43 to describe the word "expediency" under section 80(2) of the Act wherein it is held as under:
"(30) We need to remember that Section 178(2) empowers the Government to grant Page 57 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 exemption from the operation of the Act on the twin grounds of hardship and expediency. For the Government to exercise its power of exemption on the ground of expediency two requirements must be satisfied viz. (i) that circumstances exist which render it expedient to grant the exemption & (ii) the Government upon a consideration of those circumstances forms an opinion that it is expedient to do so. The latter requirement is more in the nature of a subjective satisfaction of the Government while the former is dependent on objective consideration of the circumstances that are germane.
Once the existence of circumstances that are relevant to the exercise of the power of exemption are found to exist the formation of the opinion by the Government about the expediency of granting an exemption is a matter on which the Court would be slow to interfere unless the decision is shown to be a colourable exercise or vitiated by any extraneous motive or consideration.
(31) The term `expedient' appearing in Section 178 of the Act has not been defined. Black's Law Dictionary, however, assigns the expression `expedient' the following meaning:
"Appropriate and suitable to the end in view -Whatever is suitable and appropriate in reasons for the accomplishment of a specified object."
4.18) Learned Advocate General placed Page 58 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 reliance upon the following judgments of the Apex Court regarding formation of opinion under section 80(2) of the Act:
1)In case of Narayan Govind Gavata v.
State of Maharashtra reported in (1977) 1 SCC 133, wherein it is held as under:
"(10.) ............That test basically is :
Was the authority concerned acting within the scope of its powers or in the sphere where its opinion and discretion must be permitted to have full play? Once the Court comes to the conclusion that the authority concerned was acting within the scope of its powers and had some material, however meagre, on which it could reasonably base its opinion, the Courts should not and will not interfere.........."
2) In case of Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd v. State of Gujarat reported in 2009 SCC OnLine Guj 10654 wherein it is held as under:
"8. The contention on behalf of petitioner that the operation of the society is smooth and trouble Page 59 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 free would not be a relevant factor. The petitioner is not in a position to show that in the activities carried out by the petitioner - society no public interest is involved. Then the only issue that survives is whether respondent-authority has formed an opinion as to the necessity and expediency for appointing Government nominees. Any such necessity and expediency would depend on facts of each case and there cannot be any criteria for determining same. Once it is shown that while arriving at the decision the authority has considered the relevant provisions of law and the relevant factors it is not possible to state that the impugned order suffers from any legal infirmity.
9. Similarly the contention that appointment of three nominees by the Government would tilt the balance and may affect the voting pattern of the Managing Committee is also an issue which is primarily based on an apprehension only on the basis of political alignment of various members with different political parties. The Court cannot presume 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 Page 60 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 in a particular manner. In absence of any evidence or pointer in this direction the exercise of powers under Section 80 (2) of the Act cannot be either termed to be mala-fide or tainted with any other consideration. Furthermore, even if the voting pattern changes that by itself is not sufficient.
10. Insofar as the contention based on membership and experience of two of the Government nominees suffice it to state that the same would not directly have any bearing as to exercise of powers under Section 80 (2) of the Act. The only consideration which can go into decision making process 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. For this purpose it would suffice if the person concerned is primarily associated with the kind of activities carried out by the society in question. It may be that in a given case a person may also have experience in this direction. But it is not possible to state that in each and every case, every Government nominee must necessarily possess experience in the line of operation of the society in Page 61 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 question to which the Government nominee is appointed.
11. In the circumstances, even if two of the three nominees may not have been members of the Managing Committee of their respective societies that by itself would not dis-entitle either the said persons from being appointed as nominees by the State Government, nor would it be a relevant factor for treating the impugned order as bad in law."
4.19) Learned Advocate General has placed reliance on the judgment of this Court in case of Gujarat State Marketing Cooperative Federation Ltd. (supra) with regard to granting of adequate and meaningful opportunity of being heard wherein it is held as under:
"10. As the upshot of the above discussion, the conclusions as under can be summarised:-
(f) .....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 Page 62 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 to involvement of public interest in the operation of the society was based and the necessity or expediency for the nomination had arisen....."
4.20) Learned Advocate General with regard to the alleged violation of principles of natural justice because of non-supply of the proposal dated 13.10.2020, placed reliance on the following judgments:
1) In case of Viveka Nand Sethi v. Chairman J&K Bank Ltd. reported in (2005) 5 SCC 337, wherein it is observed as under:
"(22) The principle of natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an empty formality. Even the principle of estoppel will apply. The principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case."Page 63 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022
2)In case of State Bank of Patiala v. S.K. Sharma reported in (1996) 3 SCC 364, wherein it is observed as under:
"(33) We may summarise the principles emerging from the above discussion. (These are by no means 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):
xxx (5) Where the enquiry is not governed by any rules/regulations/statutory provisions and the only obligation is to observe the principles of natural justice........ or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order / action - the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between "no opportunity" and not adequate opportunity, i.e., between "no notice"/"no hearing" and "no fair hearing." (a) In the case of former, the order passed would undoubtedly be invalid (one may call it "void" or a nullity if one chooses to). In such cases, Page 64 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem).
(b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the stand-
point of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. (It is made clear that this principle (No.
5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.)"
3)In case of Titaghur Papermill Co. Ltd. V. State of Orissa reported in (1983) 2 SCC 433, wherein it is held as under:
"(10) The decision in Mohammad Nooh's case, (supra) is clearly distinguishable as in that case there was total lack of jurisdiction. There is no suggestion that the learned Sales Tax Officer had no jurisdiction to make an assessment. Nor can it be contended that he had acted in breach of rules of natural justice.
There is no denying the fact that Page 65 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the petitioner was served with a notice of the proceedings under R. 12 (5) of the Rules and sub-sec. (4) of sec. 12 of the Act. The impugned orders clearly show that the petitioners were afforded sufficient opportunity to place their case. Merely because the learned Sales Tax Officer refused to grant any further adjournment and decided to proceed to best judgment, it cannot be said that he acted in violation of the rules of natural justice. The question whether another adjournment should have been granted or not was within the discretion of the learned Sales Tax Officer and is a matter which can properly be raised only in an appeal under sub-sec. (1) of sec. 23 of the Act. All that this Court laid down in Mohammad Nooh's case, (supra) is that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than a rule of law; in other words, it does not bar the jurisdiction of the Court."
4)In case of Chandrama Tewari v. Union of India reported in 1987 (Supp) SCC 518 wherein it is held as under :
"(4) ..... However, it is not necessary that each and every document must be supplied to the delinquent government servant facing Page 66 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the charges instead only material and relevant documents are necessary to be supplied to him. If a document even though mentioned in the memo of charges is not relevant to the charges or if it is not referred to or relied upon by the enquiry officer or the punishing authority in holding the charges proved against the government servant, no exception can be taken to the validity of the proceedings or the order. If the document is not used against the party charged the ground of violation of principles of natural justice cannot successfully be raised. The violation of principles of natural justice arises only when a document, copy of which may not have been supplied to the party charged when demanded is used in recording finding of guilt against him. On a careful consideration of the authorities cited on behalf of the appellant we find that the obligation to supply copies of documents is confined only to material and relevant documents and the enquiry would be vitiated only if the non- supply of material and relevant documents when demanded may have caused prejudice to the delinquent officer."
5)In case of Vijay Kumar Nigam v. State of MP reported in (1996) 11 SCC 599 wherein it is held as under:
Page 67 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 "(3) Two grounds have been pressed for consideration in the High Court and reiterated in the appeal. The main ground was that the report of the preliminary enquiry conducted against him before initiating departmental enquiry, was not supplied to him and, therefore, it is violative of the principle of natural justice. The High Court has rejected the contention and, in our view, quite rightly. The preliminary report is only to decide and assess whether it would be necessary to take any disciplinary action against the delinquent officer and it does not form any foundation for passing the order of dismissal against the employee. The High Court also found as a fact that all the statements of persons that formed basis for report, recorded during the preliminary enquiry were supplied to the delinquent officer. It was then contended that one of constables, namely, Palairam was a co-accused who was also charged along with the appellant and his evidence was taken into consideration in deciding against the appellant which is inadmissible in evidence. In a departmental enquiry, the question, whether or not any delinquent officer is co-accused with other does not arise. That would arise in a prosecution laid for officer under the IPC for Prevention of Corruption Act. The evidence recorded in the departmental enquiry stricto sensu is not evidence as per the provisions of the Evidence Act. Therefore, the Page 68 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 statement of Palairam also formed part of the record which could be taken into account in adjudging the misconduct against the appellant. The Inspector General of Police had stated that even if that evidence was excluded from consideration, there was other sufficient evidence to come to the conclusion that the appellant had taken illegal gratification from the organiser of gambling. Thus, the High Court has not committed any error of law in dismissing the writ petition of the appellant."
6)In case of Transmission Corporation of AP Ltd v. M/s. Sri Rama Krishna Rice Mill reported in (2006) 3 SCC 74 wherein it is held as under:
"(9) In order to establish that the cross examination is necessary, the consumer has to make out a case for the same. Merely stating that the statement of an officer is being utilized for the purpose of adjudication would not be sufficient in all cases. If an application is made requesting for grant of an opportunity to cross examine any official, the same has to be considered by the adjudicating authority who shall have to either grant the request or pass a reasoned order if he chooses to reject the application. In that event an Page 69 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 adjudication being concluded, it shall be certainly open to the consumer to establish before the appellate authority as to how he has been prejudiced by the refusal to grant opportunity to cross- examine any official. As has been rightly noted by the High Court in the impugned judgment where the reliance is only on accounts prepared by a person, cross examination is not necessary. But where it is based on reports alleging tampering or pilferage, the fact situation may be different. Before asking for cross examination the consumer may be granted an opportunity to look into the documents on which the adjudication is proposed. In that event, he will be in a position to know as to the author of which statement is necessary to be cross-
examined. The applications for cross-examination are not to be filed in routine manner and equally also not to be disposed of by adjudicator in casual or routine manner. There has to be application of mind by him. Similarly, as noted above, the consumer has to show as to why cross examination is necessary."
7)In case of State of UP v. Sudhir Kumar Singh reported in 2020 SCC OnLine SC 847 wherein it is held as under:
Page 70 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 "39. An analysis of the aforesaid judgments thus reveals:
(1)Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.
(2) Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest.
(3) No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-
denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice. (4) In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there Page 71 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person.
(5) The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non- observance of natural justice." 4.21) With regard to allegation of the petitioners that respondent no.2 Registrar acted in hot haste while passing the order dated 20.10.2020, learned Advocate General placed reliance on the following judgments to contend that with a view to comply with the time limit, it was necessary to take steps immediately for election:
1)In case of K.Nagaraj and ors. Versus State Of Andhra Pradesh and another reported in (1985) 1 SCC 523 wherein it is held as under:Page 72 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 "(13) As regards Shri Venugopal's argument at (b) above, the fact that the decision to reduce the age of retirement from 58 to 55 was taken by the State government within one month of the assumption of office by it, cannot justify the conclusion that the decision is arbitrary because it is unscientific in the sense that it is not backed by due investigation or by compilation of relevant data on the subject. Were this so, every decision taken by a new government soon after assumption of office shall have to be regarded as arbitrary. The reasonableness of a decision, in any jurisdiction, does not depend upon the time which it takes. A delayed decision of the executive can also be bad as offending against the provisions of the Constitution, and it can be no defence to the charge of unconstitutionality that the decision was taken after the lapse of a long time. Conversely, decisions which are taken promptly cannot be assumed to be bad because they are taken promptly. Every decision has to be examined on its own merits in order to determine whether it is arbitrary or unreasonable. Besides, we have to consider the validity of a law regulating the age of retirement. It is untenable to contend that a law is bad because it is passed immediately on the assumption of office by a new government. It must also be borne in mind that the question as to what should be the Page 73 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 proper age of retirement is not a novel or unprecedented question which the State Legislature had to consider. There is a wealth of material on that subject and many a Pay Commission has dealt with it comprehensively. The State government had the relevant facts as also the reports of the various central and State Pay Commissions before it, on the basis of which it had to take a reasonable decision.
The aid and assistance of a well-
trained bureaucracy which, notoriously, plays an important part not only in the implementation of policies but in their making, was also available to the government. Therefore, the speed with which the decision was taken cannot, without more, invalidate it on the ground of arbitrariness."
2)In case of Chairman And Managing Directo, B.P.L.Ltd. Versus S.P.Gururaja and ors. reported in(2003) 8 SCC 567 it is held as under :
"(34) Undue haste also is a matter which by itself would not have been a ground for exercise of power of judicial review unless it is held to be malafide. What is necessary in such matters is not the time taken for allotment but the manner in which the action had been taken. The court, it is trite, is not concerned Page 74 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 with the merit of the decision but the decision making process. In absence of any finding that any legal malice was committed, the impugned allotment of land could not have been interfered with. What was only necessary to be seen was as to whether there had been a fair play in action.
(35) The question as to whether any undue haste has been shown in taking an administrative decision is essentially a question of fact. The State had devolved a policy of Single Window System with a view to get rid of red-tapism generally prevailing in the bureaucracy. A decision which has been taken after due deliberations and upon due application of mind cannot be held to be suffering from malice in law on the ground that there had been undue haste on the part of the State and the Board. [See Bangalore Medical Trust V/s. B.S. Muddappa and Others and Pfizer Ltd. v. Mazdoor Congress and Others]"
3)In case of Dashrathbhai Jethabhai Patel versus State of Gujarat ( CAV Order dated 20.12.2019 in SCA No. 20711/2019 ),it is held as under:
"21. As regards the haste in the decision making, Mr.Jani, had invited the attention of this Court to para 3.19 of the petition at page Page 75 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022
15. The time line so reads as under:
"3.19 The petitioners were aware about the predetermination approach of the respondents. Therefore, the petitioners filed writ petition being Special Civil Application No.14362 of 2019 before this Hon'ble Court challenging the aforesaid show cause notice on various factual as well as legal grounds on 19.08.2019. During the pendency of the writ petition, following events took place: 26.8.2019 Hearing of the show cause notice proceedings is fixed before the Deputy Secretary working under respondent No.1. 26.08.2019 At the time of hearing, the Deputy Secretary is intimated about filing of the petition and also that the same is listed before this Hon'ble Court on 27.08.2019 for admission hearing. The matter is then kept on 09.09.2019. 27.08.2019 Learned Assistant Government Pleader appeared on advance copy and sought adjournment on the ground that the learned Advocate General may remain present. Hence, the matter is kept on 29.08.2019 before this Hon'ble Court. 29.08.2019 Once again similar request is made by the learned Assistant Government Pleader and the matter is kept on 5.9.2019. 5.9.2019 As the learned Single Judge taking up the writ petition was not available, the roster was Page 76 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 assigned to another Hon'ble Single Judge. Hence, both the advocates jointly mentioned and the matter has been adjourned to
16.09.2019 with a specific understanding that the matter shall not be heard by respondent No.1 on 9.9.2019. 9.9.2019 Deputy Secretary adjourned the proceedings to 18.9.2019. It is shocking to read the language of the said notice which records that further / next hearing for removal of elected members of the Committee and for appointment of Administrator at 12.00 hours on 18.9.2019.
15.9.2019 An affidavit is filed in this regard before the Hon'ble Court. 16.9.2019 The matter is heard extensively by this Hon'ble Court. The arguments are concluded, and the matter is ordered to be listed for dictation of judgment on 20.09.2019. 18.9.2019 Despite the aforesaid petition, the Deputy Secretary insists that the advocate of the appellants seeks time for 4 weeks. The Deputy Secretary also records that the Directors are trying to waste time and the matter is fixed on 21.9.2019 as a last chance to remain present and file reply. 20.9.2019 This Hon'ble Court passed an order directing the Registry to place the matter before the Hon'ble Chief Justice for appropriate orders as the roster had Page 77 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 changed. 21.9.2019 In the proceedings before the authorities, the aforesaid difficulties are pointed out and the matter is kept on 24.9.2019. 24.9.2019 Once again, the Deputy Secretary fixed the hearing on 26.9.2019, holding that if the appellants do not remain present, the proceedings would be conducted ex parte. These facts are brought on record by filing an affidavit dated 26.9.2019. It is only after necessary instructions issued to respondent No.1 that the proceedings are adjourned and the decision of this Hon'ble Court is awaited."
22. As held in the case of N. Nagaraj (supra), merely because decision is taken on haste would not make it bad. So also held by the Supreme Court in the case of S.P.Gururaja (supra). Relevant para 13 of the said judgment i.e. N.Nagaraj and paras 34 & 35 in S.P. Gururaja, respectively read as under:
"13. As regards Shri Venugopal's argument at (b) above, the fact that the decision to reduce the age of retirement from 58 to 55 was taken by the State Government within one month of the assumption of office by it, cannot justify the conclusion that the decision is arbitrary because it is unscientific in Page 78 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the sense that it is not backed by due investigation or by compilation of relevant data on the subject. Were this so, every decision taken by a new Government soon after assumption of office shall have to be regarded as arbitrary. The reasonableness of a decision, in any jurisidiction, does not depend upon the time which it takes. A delayed decision of the executive can also be bad as offending against the provisions of the Constitution and it can be no defence to the charge of unconstitutionality that the decision was taken after the lapse of a long time.
Conversely, decisions which are taken promptly cannot be assumed to be bad because they are taken promptly. Every decision has to be examined on its own merits in order to determined whether it is arbitrary or unreasonable. Besides, we have to consider the validity of a law regulating the age of retirement. It is untenable to contend that a law is bad because it is passed immediately on the assumption of office by a new Government. It must also be borne in mind that the question as to what should be the proper age of retirement is not a novel or unprecedented question which the State Legislature had to consider. There is a wealth of material on that subject and many a Pay Page 79 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Commission has dealt with it comprehensively. The State Government had the relevant facts as also the reports of the various Central and State Pay Commissions before it, on the basis of which it had to take a reasonable decision. The aid and assistance of a well-trained bureaucracy which, notoriously, plays an important part not only in the implementation of policies but in their making, was also available to the Government. Therefore, the speed with which the decision was taken cannot, without more, invalidate it on the ground of arbitrariness."
"34. Undue haste also is a matter which by itself would not have been a ground for exercise of the power of judicial review unless it is held to be mala fide. What is necessary in such matters is not the time taken for allotment but the manner in which the action had been taken. The Court, it is trite, is not concerned with the merit of the decision but the decision-making process. In the absence of any finding that any legal malice was committed, the impugned allotment of land could not have been interfered with. What was only necessary to be seen was as to whether there had been fair play in action.
35. The question as to whether any undue haste has been shown Page 80 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 in taking an administrative decision is essentially a question of fact. The State had developed a policy of single- window system with a view to get rid of red tapism generally prevailing in the bureaucracy. A decision which has been taken after due deliberations and upon due application of mind cannot be held to be suffering from malice in law on the ground that there had been undue haste on the part of the State and the Board"
4.22) With regard to the allegation by the petitioners of overreaching the due process of law, learned Advocate General submitted that in the absence of any stay order granted by this Court against the hearing of the show cause notice, there was no bar to proceed with the hearing thereof and to pass the impugned order and therefore, the same would not amount to overreach the process of the Court. In support of such submission, reliance was placed upon the following decisions:
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C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022
1) In case of Madan Kumar Singh (D) Thr.Lr.
Versus Distt.Magistrate,Sultanpur reported in (2009) 9 SCC 79 wherein it was held as under :
"(12) It is pertinent to mention here that even though respondents were parties before the District Consumer Forum, State Commission, as also before the National Commission but they neither preferred to file any objections nor participated in the proceedings. Thus were proceeded ex-parte throughout.
(13) Even though there has been long and chequered history of various litigations in the High Court of Allahabad and a civil suit which were either at the instance of previous owner of the truck Iqbal Ahmed or by Maqsood Ahmed, apparently set up by Iqbal Ahmed but we are not concerned with the same, in the aforesaid appeal. Needless to say that in none of the proceedings either initiated by Iqbal Ahmed or his stooge Maqsood Ahmed there was any order of stay granted by any Court that appellant herein should not be delivered the relevant documents of the truck, so as to enable him to start plying the same. (14) It is trite to say that mere filing of a Petition, Appeal or Suit, would by itself not operate as stay until specific prayer in this regard is made and orders thereon are passed. There is nothing on Page 82 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 record to show that any stay was granted in favour of any party, restraining the respondents not to deliver the papers of the truck to the appellant. It would go to show that respondents were unlawfully holding back the papers with them, for which, otherwise they were not entitled to do so."
2)In case of H.G.Rangangoud Versus State Trading Corporation Of India Limited and ors reported in (2012) 1 SCC 297, the Apex Court in the facts of the said case observed that as the order passed by the learned Single Judge of High Court was not stayed and mere filing of appeal would not operate as a stay of the order appealed from.
4.23) With regard to the allegation of the petitioners regarding political consideration for converting majority into minority, learned Advocate General submitted that the respondent no.2 Registrar in his affidavit- Page 83 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 in-sur-rejoinder dated 20.12.2020 has categorically denied that nomination of respondent nos. 6 to 8 as Government Representatives in the Managing Committee of the Union, was on political consideration and that the same was effected for converting minority into majority. It was therefore submitted that the reliance placed by the petitioner in case of Patel Kodarbhai Jivabhai (supra), would not be applicable in the facts of the case because in the said decision, no such denial of allegation of mala fide was made. It was submitted that this Court had an occasion to deal with similar situation in case of Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd (Supra), wherein it was observed as under:
"9. Similarly the contention that appointment of three nominees by the Government would tilt the balance and may affect the voting pattern of the Managing Committee is also an issue which is primarily based on an apprehension only on the basis of Page 84 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 political alignment of various members with different political parties. The Court cannot presume 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. In absence of any evidence or pointer in this direction the exercise of powers under Section 80 (2) of the Act cannot be either termed to be mala- fide or tainted with any other consideration. Furthermore, even if the voting pattern changes that by itself is not sufficient.
4.24) Learned Advocate General submitted that in absence of any strong foundation in fact and corroborative evidence, no mala fides or political malice or legal malice in fact or on law, can be proved against the respondent no.2. In support of such contention, he relied upon the following judgments:
1)In case of E.P.Royappa versus State of Page 85 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Tamil Nadu and another reported in AIR 1974 SC 555 wherein it is held as under :
"(92) Secondly, we must not also overlook that the burden of establishing mala fides in very heavy on the person who alleges it. the allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. That is in itself a rather extra-ordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State, and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fide of their author when the full facts and surrounding circumstances are not known. The Court would, therefor be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave, and they are made against the holder of an office which has a high Page 86 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 responsibility in the administration.
Such is the judicial perspective in evaluating charges of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social' life or administrative set up these.
considerations are wholly irrelevant in judicial approach but because, otherwise, functioning effective y would become difficult in a democracy. It is from this standpoint that we must assess that merits of the allegations of mala fides made by the petitioner against the second respondent."
2)In case of State of Maharastra versus Dr. Budhikota Subbarao reported in (1993) 3 SCC 71,it is held as under:
"(7) Mala fides violating the proceedings may be legal or factual.
Former arises as a matter of law where a public functionary acts deliberately in defiance of law without any malicious intention or improper motive whereas the latter is actuated by extraneous considerations. But neither can be assumed or readily inferred. It requires strong evidence and unimpeachable proof. Neither the order passed by the learned Single Judge granting ex parte order of stay preventing opposite party from going abroad was against provisions Page 87 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of law nor was the State guilty of acting mala fides in approaching the learned Single Judge by way of writ petition. The order of the trial Judge could not be challenged before the division bench. Under the rules of the court, the correctness of, the order could be assailed only in the manner it was done by the State. Any party aggrieved by an order is entitled to challenge it in a court of law. Such action is neither express malice nor malice in law."
3)In case of Dashrathbhai Jethabhai Patel (Supra) , it is held as under :
"26. Malafides cannot be readily assumed and merely the petitioners making such assertions and finding support from the time line and letters by which, the proceedings were adjourned from time to time, would not indicate a predetermined mind set. The Court cannot presume such a fact. The language of the letters has been explained by the State's affidavit."
4.25) With regard to doctrine of severability, learned Advocate General submitted that as per the said doctrine, even while assuming without admitting that there Page 88 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 is any invalid portion in the order under challenge, then in that case, the same may be severed, and the deletion does not render the rest truncated and ineffective which otherwise has been found to be valid. In support of such contention, reliance was placed on the following decisions:
1)In case of Shewpujanrai Indrasanrai Ltd. v.
The Collector of Customs reported in AIR 1958 SC 845.
2)In case of State of Mysore v. K. Chandrasekhara Adiga reported in (1976) 2 SCC 495.
3)In case of State of Orissa v. Niranjan Swain reported in AIR 1990 SC 685.
4)In case of R.M.D.C. v. Union of India reported in AIR 1957 SC 628.
Page 89 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 4.26) Relying upon the aforesaid case laws, it was submitted that even whilst assuming without admitting that respondent no.8 is not qualified to be the member of the Union as per the relevant byelaw, then in that event also, there being nothing objectionable against the respondent nos. 6 and 7 either under the byelaws or under the Act, that part of the order may be upheld as otherwise tremendous prejudice will be caused to the State Government's nomination of the respondent nos. 6 and 7.
: REJONIDER OF THE PETITIONERS:
5. In rejoinder, learned Senior Advocate Mr. Sehlat submitted that in the present petition, section 80(2) of the Act confers enabling power on State and Registrar to nominate representative as an executive decision. The Registrar has passed the impugned order nominating three Page 90 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 representative of Board of management after having consideration of public purpose. It cannot be disputed that nomination of three representatives by the impugned order is after formation of public opinion under section 80(2) of the Act. It was further submitted that having formed an opinion that three representatives are necessary, this Court cannot review the decision that whether 2 or 3 are required to be deleted. 5.1) With regard to the decision in case of R.M.D.C. v. Union of India (supra) cited by learned Advocate General, it was submitted that the said judgment deals with the challenge to the validity of any law where illegal part can be severed. It was submitted that if the part of law is void, it can be declared illegal and thereby Doctrine of severability has been accepted. It was submitted that the decision is in respect of Page 91 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 statute which is void in part and whether it is capable for enforcement as to that part which is valid is not dealt with. It was submitted that the said doctrine cannot assist the contention of the State Government because the administrative decision of the Registrar is not a law within the meaning of Article 13 and Article 245.
5.2) Learned Senior Advocate Mr. Shelat submitted that there is no notification issued by the State Government but in the facts of the case impugned order is passed pursuant to the enabling power conferred upon the State Government to nominate its representatives under section 80(2) of the Act. It was submitted that such decision taken by the respondent no.2 is an administrative act on the basis of the subjective opinion of the respondent no.2 Registrar that it is necessary and expedient Page 92 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 to nominate three Government Representatives in the Managing Committee of the Union and therefore, it is not open at the instance of the Government Advocate to substitute two nominees for three appointed nominees. This Court therefore, cannot review the decision by striking down one nominee and directing to continue with appointment of two nominees because such satisfaction has to be arrived at by the respondent no.2 Registrar. 5.3) With regard to the judgment cited by the learned Advocate General in case of Shewpujanrai Indrasanrai Ltd. v. The Collector of Customs, it was submitted that the said decision arises out of the provisions of the Customs Act and FEMA, where penalty was imposed, and conditions were imposed for release of goods. Referring to above judgment it was submitted that the decision cannot be put into service because Page 93 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the Registrar is not a Court of law and neither a Tribunal. The decision rendered by the Registrar is an administrative decision on subjective satisfaction. It is only in case of judicial and quasi judicial orders that part of an order can be saved. Therefore, it was submitted that the said decision cited by the State may not be assistance to the State Government. 5.4) Repelling the judgment in case of State of Orissa v. Niranjan Swain (supra), it was submitted that said decision will be of no assistance to the State Government because the impugned award in the said judgment was passed under the Arbitration Act and it is deemed to be judicial proceedings and there is no question of subjective satisfaction involved in the said proceedings. Page 94 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 : SUR-REJOINDER OF RESPONDENTS NO. 1 TO 5:
6. Learned Advocate General Mr. Kamal Trivedi in sur-rejoinder submitted that submissions made by learned Senior Advocate Mr.Shelat for the petitioners on the judgment in case of Shewpujanrai Indrasanrai Ltd.(supra) and State of Orissa v. Niranjan Swain(supra) are factually incorrect and misleading in nature. It was submitted that in United Kingdom, the Doctrine of Severability had originated in case of Nordanfelt v. maxim Nordanfelt Guns and Ammunition Co. ltd reported in (1894) AC 535, as applicable to all types of instruments, whether legislative, administrative, judicial or quasi-judicial. It was further submitted that there has been no Statement of law so far enunciated by any Court in the whole world to the effect that Doctrine of Severability does not apply to administrative orders. Relying upon the Page 95 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Constitution Bench judgment of Apex Court in case of R.M.D. Chamarbaugwalla (supra) it was submitted that the said doctrine was made applicable to legislative provisions also. 6.1) It was further submitted that as the law gradually developed in our country, the said doctrine was made applicable even in case of administrative matters like issuance of a Government notification by the State Government under section 3 of the Commission of Inquiry Act, 1952 as held by the Apex Court in case of Shriram Krishna Darmiya (supra).
6.2) It was further submitted by the learned Advocate General Shri Trivedi that Division Bench of this Court in case of Hiralal Harjivandas (supra), applied the said doctrine with reference to notification issued under section 4(1) read with section Page 96 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 17(4) of the Land Acquisition Act, 1894. 6.3) It was therefore, submitted that in the present case though the order under challenge is sought to be nomenclatured by the petitioners as "administrative order", the same involves civil consequences, whereby, the principles of natural justice are required to be adhered to and that therefore for all practical purpose, such an order is nothing but a "quasi-judicial order". In support of such contention reliance was placed on decision of Hon'ble Supreme Court in case of Rajesh Kumar v. Dy. CIT reported in (2007) 2 SCC 181, wherein it is held as under:
"(48.) In any event, when civil consequences ensue, there is hardly any distinction between an administrative order and a quasi judicial order. There might have been difference of opinions at one point of time, but it is now well-settled that a thin demarcated line between an administrative order and quasi-
judicial order now stands Page 97 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 obliterated." 6.4) It was submitted by learned Advocate General that aforesaid decisions make it
clear that the doctrine of severability can be made applicable to the order under challenge passed by the respondent no.2- Registrar. It was further submitted that learned Senior Advocate Mr. Shelat had fairly stated that nothing objectionable is there against respondent nos. 6 and 7 either under the Act or the byelaws in contra-distinction with the respondent no.8 who is ineligible as per the byelaws applicable to the Union. It was therefore submitted that the part of the order under challenge with reference to the eligibility of respondent no.8 as a government representative can very well be severed and struck off, while retaining the remaining part of the order, dealing with nomination of respondent nos. 6 and 7 as the Page 98 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Government representatives of the Union.
6.5) Learned Advocate General thereafter placing reliance on section 80(2) of the Act, made submissions as regard the interpretation of the language used in section 80(2) of the Act to contend that the said provision postulates two pre-conditions/requirements namely, involvement of public interest in operation of a society and whether it is necessary or expedient to do so. It was submitted that the Apex Court has interpreted similar provisions laying down two such conditions/requirements under other legislation in following cases :
1)In case of State of Gujarat v. Jamnadas G. Pabri reported in (1975) 1 SCC 138 wherein Section 303A of the Gujarat Panchayats Act, 1961 came up for consideration and the Apex Court while interpreting the said section held as under :Page 99 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 "(12.) We are unable to agree with this reasoning. An analysis of sec. 303-A (1) would show that before a declaration referred to in that sub- sec. can be made. two requirements must be fulfilled : (1) existence of a situation be reason of disturbances in the whole or any part of the State; (2) the satisfaction of the State Government relatable to such a situation, that it is not expedient to hold elections for the reconstitution of a panchayat on the expiry of its term. The first requirement is an objective fact and the second is an opinion or inference drawn from that fact. The first requirement, if disputed, must be established objectively as a condition precedent to the exercise of the power The second is a matter of subjective satisfaction of the Government and is not justiciable. Once a reasonable nexus between such satisfaction and the facts constituting the first requirement is shown, the exercise of the power by the Government, not being colourable or motivated by extraneous considerations, is not open to judicial review. Thus the question that could be objectively considered by the court in this case was : Did a situation arising out of disturbances exist in the State of Gujarat on the date of the impugned notification?
(23.) Nor would the Court sit in appeal over the opinion of the State Government as to the "inexpediency Page 100 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of holding elections''. The statute has made that matter the sole preserve of the Government. All that the Court could enquire was, whether the condition precedent which is an objective fact to the exercise of this power, existed. By no stretch of imagination could it be said that the power under Section 303-A is exercisable only after the completion of preparatory steps preliminary to the holding of an election. The statute places no such fetter on the discretion of the Government to the exercise of the power We, therefore, negative the contentions canvassed by Mr. Nanawati."
2)In case of G.S. Lamba v. Union of India reported in (1985) 2 SCC 604, wherein Rule 29(a) of the Indian Foreign Service Branch 'B' (Recruitment, Cadre, Seniority and Promotion) Rules, 1964 came up for consideration before the Apex Court, it was held that the said Rule confers power to relax any provisions of 1964 Rules which shall comprehend Rule 13(1) which prescribes the quota and once power to relax a mandatory rule exists and an action Page 101 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 in derogation of the Rules has been repeatedly taken year after year, it would be a permissible inference that the action was taken in relaxation of the Rule for which the power exists. It was further held that undoubtedly when the power to relax any of the provisions of the Rules is exercised the controlling authority must be of the opinion that it is necessary or expedient so to do for reasons to be recorded in writing before exercising the power. However, it is well settled that failure to record reason will not invalidate exercise of power. It was therefore submitted that in the facts of the case the exercise of power by respondent no.2 to nominate cannot be said to be invalidated even if there is failure to record reasons that it is necessary or expedient to nominate three Government Representatives, though in the impugned Page 102 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 order the respondent no.2 has recorded the reasons that he has arrived at satisfaction in public interest that it is necessary and expedient to exercise the powers for nomination under section 80(2) of the Act.
3) In case of Amarjit Singh (Supra), the Apex Court interpreted the provisions of section 178 of the Punjab Regional and Town Planning and Development Act, 1995 and held that the formation of the opinion by the Government about the expediency of granting an exemption is a matter on which the Court would be slow to interfere unless the decision is shown to be of colourable exercise.
6.6) It was submitted that the matters relating to opinion and subjective satisfaction are normally not justiciable, more particularly on the grounds of propriety Page 103 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of sufficiency. In support of such contention reliance was placed on the judgment of the Apex Court in case of B.K. Pavitra v. Union of India reported in (2019) 16 SCC 129 wherein it is held as under:
"98. The second of the reinforcing principles which emerges from Indra Sawhney is that the opinion of the government on the adequacy of representation of the SCs and STs in the public services of the state is a matter which forms a part of the subjective satisfaction of the state.
Significantly, the extract from Indra Sawhney(1992 Supp. (3) SCC 217) reproduced earlier adverts to the decision in Barium Chemicals Ltd, which emphasises that when an authority is vested with the power to form an opinion, it is not open for the court to substitute its own opinion for that of the authority, nor can the opinion of the authority be challenged on grounds of propriety or sufficiency......"
6.7) Thereafter learned Advocate General dealt with the following judgments cited by the learned Senior Advocate Mr.Shelat for the petitioners :
1)Referring to the case of Oryx Fisheries Page 104 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Private Limited (supra) cited by the petitioners, it was submitted that in the present case show cause notice issued to the petitioners speaks for itself and cannot be compared with the facts of the said case and therefore, the judgment of the Supreme Court about the violation of principles of natural justice cannot be made applicable in the present case.
2)Referring to decision in case of Fuljit Kaur (supra)it was submitted that in the said decision it becomes clear that the appellant was favoured not only with a jet speed of allotment of residential plot within 48 hours of submission of her application but was also favoured with the requirement of payment of a throwaway price by not depositing the said price for a quarter of sanctuary. It was under that context, the Apex Court declared the said Page 105 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 allotment arbitrary and unreasonable though no drastic step of withdrawal of the possession of the plot was directed by the Apex Court.
3)Referring to the decision in case of Patel Kodar Jivabhai (supra) cited by the learned Senior Advocate for the petitioners, learned Advocate General submitted that in the said judgment this Court though held that when the appointment/nominations of the Government representatives is made under section 80(1) or 80(2) of the Act to convert majority into minority, then in that case the only alternative left to the Court is to presume mala fide and strike down the nomination, however with a rider that though there were clear imputations to the above effect, the said imputations were not denied and it was under that context the learned Single Judge of this Court had Page 106 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 taken a view that such allegations are not controverted or denied and therefore, the only alternative left is to strike down the resolution. However, in the present case, all such allegations and averments of the petitioners have been categorically denied in the affidavits filed on behalf of the respondent State.
4)Referring to the decision in case of Bhikhubhai Vithlabhai Patel and others(supra) relied upon by the learned counsel for the petitioners it was submitted that in the present case section 80(2) of the Act uses two words "necessity"
or "expediency". This means that while having regard to the public interest involved in the operation of the Society, the State Government can appoint its representatives, if it is "necessary" which means if it is really needed or Page 107 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 indispensable. However, because of the usage of another word "expediency" in section 80(2) of the Act, it is permissible to the State Government even if there is no necessity but it is expedient i.e. "appropriate" or "suitable" or 'advisable"
to do so to nominate its representatives.
5)Referring to the decision in case of Shree Bileshwer Khand Udyog Khedut Sahakari Mandali Ltd & anr.(supra) relied upon by the petitioners it was submitted that there is no qualm with the proposition of law laid down in the said judgment. However, in the present case, show cause notice was issued to the petitioners and other elected members on 14.10.2020 and the hearing of the matter was kept on 20.10.2020.
Therefore, in light of the facts contained in the present matter, the aforesaid judgment cited by the petitioners would be Page 108 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of no avail to them.
6)Referring to the decision in case of Yadu Nandan Garg (supra) referred by learned advocate for the petitioners, it was submitted that the petitioners have relied upon the said judgment to contend that wrong exemption granted in the provisions of Rajasthan Land Acquisition Act, 1953 does not clothe others to get the same benefit inasmuch as Article 14 of the Constitution cannot be pressed into service on the ground of discrimination.
7)Referring to the decision in case of Anirudhsinhji K. Jadeja (supra) referred by learned Senior Advocate for the petitioners, it was submitted that in the said judgment power was exercised on the basis of external dictation and that too with jurisdiction vested under him by the statute under the provisions of TADA. This Page 109 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 was under countenance of the Apex Court. However, so far as facts of the present case are concerned, the said judgment is not applicable.
8)Referring to the judgment in case of Siemens Aktiengeselischaft & S.Ltd.(supra), it was submitted that in the said judgment since the issue regarding the validity of the process adopted by DMRC including transparency and fairness of process of evaluation of bids was sub judice before the High Court of Delhi and later before the Apex Court it was held that the Government ought to have its hands off and let the law take its course. However, so far as the facts of the present case are concerned, the said judgment is not applicable.
9) Referring to the case of Vipulbhai Chaudhary(supra), it was submitted that the Page 110 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 said judgment has no applicability to the present petition inasmuch as the said judgment was dealing with an issue as to whether in absence of any express provisions under the Act, can a No Confidence Motion be undertaken against the Chairman of the Cooperative Society to which the Apex Court answered in the affirmative while taking into consideration the provisions of Part IX-B of the Constitution imparting constitutional status to a cooperative society. : SUBMISSIONS OF RESPONDENT NOS. 6 TO 8 :
7. Learned Senior Advocate Mr. Prakash Jani assisted by learned advocate Mr. Shivang Jani for respondent nos. 6,7 and 8 submitted that respondent nos. 6 to 8 are nominated by the order of the Registrar, Cooperative societies as the members of the Committee of the Kheda District Cooperative Milk Producers Union Page 111 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Ltd. and therefore, they have all rights, duties, responsibilities and liabilities as if they are the members of the Committee duly elected. It was submitted that as per section 80(1) read with section 80(2) of the Act, a nominee appointed by the Government is responsible and liable for removal, disqualification for a particular period and is liable to be criminally prosecuted for any wrong done and liable to make good any loss caused to the cooperative society but at the same time, such nominated member to whom the rights at par with elected members are given is also entitled to vote and take part in the election to elect the Chairman and Vice- Chairman. It was submitted that in the facts of the present case nomination made by the Registrar before the election of Chairman and Vice-Chairman is just proper and legal and in accordance with the scheme of the Act. Page 112 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 7.1) Learned Senior Counsel Mr. Jani submitted that the tenure of the Government appointed nominee is co-extensive with the term of elected member and the same operates during the term of the Committee wherein such nominee is appointed. In support of such contention reliance was placed on the decision in case of Gujarat State Marketing Co Operative Federation Limited (Supra). 7.2) It was submitted that in the present case, the election of the members of the Committee had taken place on 29.08.2020 and the result of the election was declared on 31.08.2020 and therefore, as per provisions of section 74C(2)(1), the term of the elected members of the Committee being 5 years from the date of election, the Registrar has rightly exercised the powers under section 80(2) of the Act and nominated respondent nos. 6 to 8 at the beginning of the term of Page 113 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 five years.
7.3) It was submitted that byelaw no. 16 which provides for composition of the Board of Directors is combination of elected and unelected members and by virtue of powers available to the State Government under section 80(2) of the Act, three persons are appointed as the nominees of the State Government. It was submitted that for electing Chairman and Vice-Chairman, the other unelected members who come within the ambit of byelaw nos. 16(A)(1) to 16(A)(5) have the right to elect Chairman and Vice- Chairman and therefore, 3 out of 13 elected directors who are the petitioners cannot be permitted to contend that such exercise of composition of Board should not take place. 7.4) It was submitted that the Act has specifically granted the right of vote to the Page 114 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 nominated members at par with the elected members as per the provisions contained in section 74C(3) read with section 80 of the Act and when the legislature did not want certain members to vote in election, specific provision under section 74(1)(1D) is made where co-opted members are not given right of vote. Similar voting rights are prescribed under section 74(2) of the Act. It was therefore, submitted that the legislature has made provisions keeping in mind the voting rights to the elected, nominated and co-opted member.
7.5) Learned Senior Advocate Mr. Jani further submitted that the Chairman has important functions to perform under byelaw no. 16(E)(1) and under byelaw no.19 and has general control over all the affairs of the Union and Vice-Chairman has to attend the routine matters when Chairman is on leave and Page 115 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 therefore, it is of utmost importance and necessity that the Government nominees who are appointed by the State have the say in the election of Chairman and Vice-Chairman. 7.6) It was submitted that in compliance of directions issued by this Court, entire process of election was undertaken and the petitioners were also served notice on 13.10.2020 and sufficient time was also given for giving opportunity of hearing, however, the petitioners were interested in protracting the hearing so that the Registrar is unable to pass the order for appointing Government nominee on time.
7.7) It was submitted that opportunity of hearing was required to be given to the petitioners by the Registrar and since the office bearers were not elected, the Registrar had issued notice to all the Page 116 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Committee members. It was further submitted that the scope and ambit of hearing is required to be confined in the context of fulfillment of requirement of section 80(2) of the At only while appointing Government nominees.
7.8) Learned Senior Advocate Mr. Jani further submitted that any elected member who did not want nominated members to be appointed has to confine his objection to the aspects that requirement of section 80(2) is not followed. In the present case, for pointing out non fulfillment of any of the requirements for appointing Government nominee, the petitioners had sufficient time to raise any objections against respondent nos. 6 to 8 but the same were not raised. Therefore, it clearly shows that the petitioners had the opportunity to put their case before the Registrar which they did not Page 117 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 utilize or deliberately lost the opportunity on the ground of seeking adjournment. 7.9) Relying upon the following paragraph of the Division Bench judgment of this Court in case of Gujarat State Marketing Co Operative Federation Limited (Supra), it was submitted that the order passed by the Registrar is legal and valid and it does not suffer from any of the deficiencies:
"8.1 As far as challenge to the exercise of power to nominate is concerned, as held by the Supreme Court in Om Kumar and others V/s. Union of India [AIR 2000 SC 3689], when a statute gave discretion to an Administrator to take a decision, the scope of judicial review would remain limited. Interference was not permissible unless one or other of the following conditions were satisfied, namely, the order was contrary to law, or relevant factors were not considered, or irrelevant factors were considered; or the decision was one which no reasonable person could have taken. Under the principle of proportionality, the Court will see that the Legislature and the administrative authority Page 118 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve. The Legislature and the administrative authority are, however, given an area of discretion or a range of choices but as to whether the choice made infringes the rights excessively or not is for the Court to decide.
It is also observed in the same judgment that, while the Court's level of scrutiny will be closer in case of restrictions on fundamental freedoms, the Courts give a large amount of discretion to the Administrator in matters of high level economic and social policy and may be reluctant to interfere. Under Art. 19 (2) to (6), restrictions on fundamental freedoms can be imposed only by legislation. In cases where such legislation is made and the restrictions are reasonable yet, if the concerned statute permitted the administrative authorities to exercise power or discretion while imposing restrictions in individual situations, question frequently arises whether a wrong choice is made by the Administrator for imposing restrictions or whether the Administrator has not properly balanced the fundamental right and the need for the restriction or whether he has imposed the least of the restrictions or the reasonable Page 119 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 quantum of restriction, etc. Recognizing the principle of proportionality, the Supreme Court of Israel has stated that it consists of three elements: First, the means adopted by the authority in exercising its power should rationally fit the legislative purpose. Secondly, the authority should adopt such means that do not injure the individual more than necessary. And third, the injury caused to the individual by the exercise of the power should not be disproportional to the benefit which accrues to the general public." 7.10) Learned Senior Advocate Mr. Jani submitted that in view of the above, the order passed by the respondent no.2 is legal and valid and does not suffer from any of the deficiency narrated in the aforesaid order. It was therefore, submitted that the petitioners have tried to enlarge the scope of proceedings of hearing beyond the subject matter of the provisions contained in section 80(2) of the Act as well as the judgment rendered by this Court in case of Gujarat State Marketing Federation Corporation Ltd. Page 120 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 (Supra). It was submitted that in the facts of the case adequate and meaningful opportunity of hearing was provided by the Registrar and principles of natural justice were also fully complied with. 7.11) Learned Senior Advocate Mr.Jani submitted that respondent nos. 6 and 7 are fully eligible to hold the post as the members of the Committee as their nomination forms were scrutinized by the election officer and their nomination forms were found to be in order in accordance with the provisions of the Act and the byelaws. It was submitted that holding ideological and political thoughts in a democracy different than that of the petitioners is no ground to hold respondent nos. 6 to 8 ineligible to be nominated. It was submitted that withdrawal of nomination is not considered as ineligibility by this Court and even in Page 121 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 guidelines framed by the State Government. It was further submitted that respondent no.8 is not nominated because he is a librarian but he is nominated because of his contribution in the field of cooperative movement and like many other candidates of past and present who were getting salary or grant or Government benefits were the members of the Committee and at present also some of the members are getting funds as MLA and salary as MLA like petitioner nos. 1 and 2 from the State Government. It was further submitted that respondent no.8 has completed 58 years as librarian and his association with librarian in a village school came to an end on 31.05.2021.
7.12) Referring to the election process under the provisions of Gujarat Agriculture Produce Market Committee Act, 1963, Gujarat Panchayat Act Gujarat Municipal Corporation Page 122 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Act, it was submitted that legislature has made provisions having regard to the need and requirement of nominated persons' right to vote in certain Acts and in certain Acts, such right is not given. Accordingly, respondent nos. 6 to 8 are eligible and entitled to vote for election of Chairman and Vice-Chairman as per the provisions of the Act. It was submitted that the petitioners' prayer to restrain the nominated members from exercising the right to vote is contrary to the scheme of the Act and therefore, the petition may be dismissed with cost. 7.13) Learned Senior Advocate Mr. Prakash Jani relied upon the following decisions :
1) In the case of Bharat Singh v. State of Haryana reported in 1988 (4) SCC 534 wherein it is held as under :
"(13.) As has been already noticed, although the point as to profiteering by the State was Page 123 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 pleaded in the writ petitions before the High Court as an abstract point of law, there was no reference to any material in support thereof nor was the point argued at the hearing of the writ petitions. Before us also, no particulars and no facts have been given in the special leave petitions or in the writ petitions or in any affidavit, but the point has been sought to be substantiated at the time of hearing by referring to certain facts stated in the said application by HSIDC. In our opinion, when a point which is ostensibly a point of law is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence which must appear from the writ petition and if he is the respondent, from the counter- affidavit. If the facts are not pleaded or the evidence in support of such facts is not annexed to the writ petition or to the counter- affidavit, as the case may be, the court will not entertain the point. In this context, it will not be out of place to point out that in this regard there is a distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter-affidavit. While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter-affidavit not only the facts but also the evidence in proof of Page 124 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 such facts have to be pleaded and annexed to it. So, the point that has been raised before us by the appellants is not entertainable. But, in spite of that, we have entertained it to show that it is devoid of any merit."
2) In the case of Kerala State Beverages (M and M) Corporation Limited v. P.P.Suresh reported in 2019 (9) SCC 710 wherein it is held as under :
"24 The challenge to the order dated 07.08.2004 by which the Respondents were deprived of an opportunity of being considered for employment is on the ground of violation of Articles 14, 19 and 21 of the Constitution of India. Lord Diplock in Council of Civil Service Unions and Ors. v. Minister for the Civil Services Infra n. 22, held that the interference with an administrative action could be on the grounds of illegality , irrationality and procedural impropriety . He was of the opinion that proportionality could be an additional ground of review in the future. Interference with an administrative decision by applying the Wednesbury s principles is restricted only to decisions which are outrageous in its defiance of logic or of accepted moral standards that no sensible person who applied his mind to the question Page 125 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 to be decided could have arrived at it.
25 Traditionally, the principle of proportionality has been applied for protection of rights guaranteed under the European Convention for the Protection of Human Rights and Fundamental Freedoms, 1950. 28 Proportionality involves balancing test and necessity test. Coimbatore District Central Co- operative Bank v. Coimbatore District Central Cooperative Bank Employees Association & Anr. (2007) 4 SCC 669 Whereas the balancing test permits scrutiny of excessive and onerous penalties or infringement of rights or interests and a manifest imbalance of relevant considerations, the necessity test requires infringement of human rights to be through the least restrictive alternatives. Judicial Review of Administrative Action (1955) and Wade & Forsyth:
Administrative Law (2005) (2007) 4 SCC 669 29 An administrative decision can be said to be proportionate if:
(a) The objective with which a decision is made to curtail fundamental rights is important;
(b) The measures taken to achieve the objective have a rational connection with the objective; and
(c) The means that impair the rights of individuals are no more than necessary.Page 126 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 32 The promise held out by the Government to provide employment to the displaced Abkari workers had become an impossible task in view of the non-availability of vacancies in the Corporation. The decision taken by the Government in overriding public interest was a measure to strike a balance between the competing interest of the displaced Abkari workers and unemployed youth in the State of Kerala. The impairment of the fundamental rights of the Respondents due to the change in policy cannot be said to be excessive. Hence, it cannot be said that the change in policy regarding re-employment of displaced abkari workers is disproportionate. 33 Another contention of Respondents which found favour with the High Court was that the Order dated 07.08.2004 was found illegal in Writ Petition (C) No.26878 of 2007 and that the said judgment has become final. Aggrieved by their nonappointment in spite of inclusion in the list of 265 dependent sons of the deceased displaced workers, they filed a Writ Petition seeking a direction to the Government to appoint them. The High Court directed the Government to appoint those persons who were included in the list, pursuant to the Order dated 07.08.2004 within a period of six weeks. The High Court further observed that the Order dated 20.02.2002 should not have been altered and directed the Government to reconsider the order dated Page 127 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 07.08.2004. The Government complied with the direction of the High Court in the Writ Petition above and issued a Government Order dated 30.04.2009 by which employment was provided to 265 dependent sons of deceased Abkari workers. Therefore, it cannot be said that the validity of the order dated 07.08.2004 has been finally decided in Writ Petition (C) No.26878 of 2007."
3) In case of Municipal Council Neemuch v. Mahadeo Real Estate reported in 2019(10) SCC 738 wherein it is held as under :
"(15.) It could thus be seen that the scope of judicial review of an administrative action is very limited. Unless the Court comes to a conclusion, that the decision maker has not understood the law correctly that regulates his decision-making power or when it is found that the decision of the decision maker is vitiated by irrationality and that too on the principle of Wednesbury Unreasonableness or unless it is found that there has been a procedural impropriety in the decision-making process, it would not be permissible for the High Court to interfere in the decision making process. It is also equally well settled, that it is not permissible for the Court to examine the validity of the decision but this Court can examine only the Page 128 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 correctness of the decision making process.
(16.) This Court recently in the case of West Bengal Central School Service Commission vs. Abdul Halim reported in 2019 SCC OnLine SC 902 had again an occasion to consider the scope of interference under Article 226 in an administrative action.
"31. In exercise of its power of judicial review, the Court is to see whether the decision impugned is vitiated by an apparent error of law. The test to determine whether a decision is vitiated by error apparent on the face of the record is whether the error is self-
evident on the face of the record or whether the error requires examination or argument to establish it. If an error has to be established by a process of reasoning, on points where there may reasonably be two opinions, it cannot be said to be an error on the face of the record, as held by this Court in Satyanarayan v. Mallikarjuna reported in AIR 1960 SC 137. If the provision of a statutory rule is reasonably capable of two or more constructions and one construction has been adopted, the decision would not be open to interference by the writ Court. It is only an obvious misinterpretation of a relevant statutory provision, or ignorance or disregard thereof, Page 129 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 or a decision founded on reasons which are clearly wrong in law, which can be corrected by the writ Court by issuance of writ of Certiorari.
32. The sweep of power under Article 226 may be wide enough to quash unreasonable orders. If a decision is so arbitrary and capricious that no reasonable person could have ever arrived at it, the same is liable to be struck down by a writ Court. If the decision cannot rationally be supported by the materials on record, the same may be regarded as perverse.
33. However, the power of the Court to examine the reasonableness of an order of the authorities does not enable the Court to look into the sufficiency of the grounds in support of a decision to examine the merits of the decision, sitting as if in appeal over the decision. The test is not what the Court considers reasonable or unreasonable but a decision which the Court thinks that no reasonable person could have taken, which has led to manifest injustice. The writ Court does not interfere, because a decision is not perfect."
(17.) It could thus be seen that an interference by the High Court would be warranted only when the decision impugned is vitiated by an apparent error of law, i.e., when the error Page 130 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 is apparent on the face of the record and is self evident. The High Court would be empowered to exercise the powers when it finds that the decision impugned is so arbitrary and capricious that no reasonable person would have ever arrived at. It has been reiterated that the test is not what the court considers reasonable or unreasonable but a decision which the court thinks that no reasonable person could have taken. Not only this but such a decision must have led to manifest injustice."
(25.) In the present case, we find that the Commissioner had acted rightly as a custodian of the public property by pointing out the anomalies in the proposal of the Municipal Council to the State Government and the State Government has also responded in the right perspective by authorising the Commissioner to take an appropriate decision. We are of the considered view that, both, the Commissioner as well as the State Government, have acted in the larger public interest. We are unable to appreciate as to how the High Court, in the present matter, could have come to a conclusion that it was empowered to exercise the power of judicial review to prevent arbitrariness or favouritism on the part of the State authorities, as has been observed by it in paragraph 13. We are also unable to appreciate the finding of the High Court in para 17 wherein it has observed that the impugned Page 131 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 decision of the authorities are found not to be in the public interest. We ask the question to us, as to whether directing re-tendering by inviting fresh tenders after giving wide publicity at the National level so as to obtain the best price for the public property, would be in the public interest or as to whether awarding contract to a bidder in the tender process where it is found that there was no adequate publicity and also a possibility of there being a cartel of bidders, would be in the public interest. We are of the considered view that the decision of the Commissioner which is set aside by the High Court is undoubtedly in larger public interest, which would ensure that the Municipal Council earns a higher revenue by enlarging the scope of the competition. By no stretch of imagination, the decision of the State Government or the Commissioner could be termed as illegal, improper, unreasonable or irrational, which parameters only could have permitted the High Court to interfere. Interference by the High Court when none of such parameters exist, in our view, was totally improper. On the contrary, we find that it is the High Court, which has failed to take into consideration relevant material."
4) In case of Amreli District Co-op Sale and Purchase Union Ltd (Supra) wherein it is held Page 132 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 as under :
"(45.) We do not agree with the learned Counsel for the petitioners that this is an unguided, unfettered and arbitrary power since the guideline is clearly prescribed in the opening part of the section by the Legislature. It is only on the satisfaction about the objective facts which have been prescribed by the Legislature that the authority can exercise the power under sec. 17-A. The objective conditions which must be satisfied before the Registrar can exercise the power are the public interest or the interest of the co-operative movement, or for the purpose of securing proper management of any society. It was urged on behalf of the petitioners that the entire guideline is vague and imprecise, inasmuch as there is absolutely no standards for determining as to what is in the interest of co-operative movement, or for that matter public interest or how the purpose of securing proper management can be best achieved. We are unable to persuade ourselves to agree with this criticism for the obvious reason that in the very nature of things it is not possible for the Legislature to lay down specific contingencies in the context of which this power can be exercised. In the very nature of the diverse situation that may arise as a result of the widespread tentacles of the co-operative movement where diverse situation of Page 133 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 grave complexity and import may arise from time to time that if any attempt is made to lay down a strict formula the very purpose of the power would be defeated. The connotation of public interest as well as the interest of the co-
operative movement may be overlapping, but it is not difficult to conceive a situation where the exercise of the power may be called for in the interest of the co- operative movement though it may not be strictly justified from the view point of public interest. The public interest is a larger circle while the interest of the co-operative movement is a smaller circle inside it. Though it is difficult to exhaustively enumerate what contingencies would constitute public interest and what would constitute the interest of co-
operative movement, the two
contingencies can be very well
illustrated. The contingency of
public interest arises when in the larger public interest some corrective measure is necessary in respect of the two societies e.g. where the two trading societies act in a concert so as to earn profit in utter disregard of consumers and thereby undermining the public interest. The contingency of co- operative movement interest arises when the corrective measure is necessary so that the co-operative movement may not suffer a set-back e.g. where two co-operative societies carry on business which, Page 134 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 though apparently satisfying all the requirements of law, compete in a manner so as to undermine the genuine co-operative principles. The contingency of securing proper management is selfexplanatory which hardly requires any illustration. We have merely given the illustrations for clarifying that the contingencies are not imprecise or vague. We should not he meant to lay down that in the illustrated situations the amalgamation of such societies is an imperative necessity. The later two contingencies can be said to be, in the ultimate analysis, a matter of public interest since any set-back in co-operative movement or any step for securing the proper management for any society is in the ultimate analysis necessary in the larger public interest. The amended provision though restricting the right of the concerned co-operative societies to carry on business according to their bye-laws and the decision of the societies, the restriction is justified in the public interest. It cannot be successfully urged, therefore, that the power is violative of the right to associate qua business or trading societies since its direct and inevitable effect is on the right to carry on business of the societies."Page 135 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 : SUBMISSIONS OF RESPONDENT NO.9 :
8. Learned Senior Advocate Mr. Dhaval C. Dave appearing for respondent no.9 submitted that respondent no.9 is a contesting candidate for the office of Vice-Chairman of the Managing Committee of the Union. It was submitted that the contention raised by the petitioners that impugned order was passed solely with a view to tilting the balance of election for the office of Vice-Chairman of the Managing Committee of the Union in favour of respondent no.9 is without factual and legal foundation.
8.1) It was submitted that it is not possible to appreciate and comprehend as to how the presence of respondent nos. 6 to 8 as nominee Directors would tilt the balance in favour of respondent no.9 so far as election to the office of Vice-Chairman of the Managing Committee of the Union is concerned Page 136 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 inasmuch as in all there are 13 Directors of the Managing Committee of the Union and out of these 13 Directors only 3 Directors have not opposed the nominations made under section 80(2) of the Act whereas rest of the 10 Directors have opposed the said nominations.
8.2) Learned Senior Advocate Mr. Dave further submitted that the apprehension raised by the petitioners that respondents no. 6 to 8 who have been nominated under section 80(2) of the Act as representative of the State Government would vote in favour of respondent no.9 on account of their political alliance with the concerned political party in power, cannot be countenanced in the eye of law. In support of such contention, reliance was placed on the decision of this Court in case of Vadgam Taluka Sahkari Kharid Vechan Sangh Ltd (Supra).Page 137 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 8.3) It was submitted that when the Directors nominated to the Managing Committee of the Union under section 80(2) of the Act have all the rights, duties and responsibilities as that of an elected member of the Managing Committee of the Union, in view of conjoint reading of sections 80(1) and 80(2) of the Act, it is always desirable that such nominees are appointed before the election by the office bearers of the Managing Committee which is in tune with the legislative intent and therefore, the petitioners cannot raise any objection on this count terming the timely action of passing the impugned order as hot-haste on part of the State Government.
8.4) Learned Senior Advocate Mr. Dave adopting the arguments submitted by learned Advocate General further submitted that the Page 138 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 impugned order under section 80(2) of the Act undoubtedly qualifies as an administrative decision of the State and such administrative decision can be subjected to judicial review by questioning the decision-making process if at all the same is suffering from the vice of patent illegality. It was further submitted that the impugned order clearly reveals that after following due procedure, conclusion was reached that there exists an element of public interest in the affairs of the Union and having regard to the same it is necessary and expedient to have nominees of the State in the Managing Committee of the Union. 8.5) Learned Senior Advocate Mr. Dave further submitted that considering the mega level operation of the Union, it cannot be said that the decision of the State under section 80(2) of the Act finding the existence of element of public interest in Page 139 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 the affairs of the Union is of such a nature that no man of reasonable prudence would ever reach to the same as to qualify the same as suffering from the vice of Wednesbury's irrationality and therefore, such ground is not available to the petitioners. Analysis
9. In view of the submissions made by learned advocate for the respective parties and large number of judgments relied upon by them, following questions arise for consideration of this Court :
1) Whether the impugned order dated 20.10.2020 passed by respondent no.2 is in violation of the principles of natural justice or not?
2) Whether the respondent no.2 has passed the impugned order dated 20.10.2020 without Page 140 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 application of mind or not?
3) Whether the respondent no.2 has arrived at an opinion having regard to the public interest involved in the operation of the Union that it is necessary or expedient to nominate its representatives on the Committee of the Union read with section 80(1) of the Act?
10. Section 80 of the Act pertains to powers to appoint Government nominee and reads thus:
"[(1)] Where the State Government has subscribed to the share capital of a society, directly or through another society, or has guaranteed the repayment of the principal of and payment of interest on, debentures issued or loans raised by a society, 38[the State Government shall, notwithstanding anything contained in the bye-laws of such society , have the right to nominate three representative on the Committee or such society], in such manner as may be determined by the State Government from time to time. The members so nominated shall hold office during the pleasure of the State Government, or for such period Page 141 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 as may be specified in the order by which they are appointed, and any such member on assuming office shall have all rights, duties, responsibilities and liabilities as if he were a member of the committee duly elected.
[Explanation.-- Any nomination of the Registrar or his nominee on the Committee of a society under bye- laws of such society shall not be construed as nomination of the representative on that Committee in exercise of the right of the State Government under this sub-section.] [(2) Where the State Government is of the opinion that having regard to the public interest involved in the operation of a society it is necessary or expedient so to do, it may nominate its representatives 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 for as may be apply to such nomination.] [(3) Notwithstanding anything contained in this Act or the rules or in the bye-laws, there shall be only one nominee of the State Government in the committee of the State Co-operative Bank or the Central Cooperative Banks where the State Government has subscribed to the share capital of such co-
operative banks and no such nomination shall be made where the State Government has not subscribed to the share capital of such co-Page 142 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 operative banks and no such nomination shall be made on the committee of a Primary Agricultural Credit Co-operative Society irrespective of whether the State Government has subscribed to the share capital of a society or not.]"
11. The petitioners who are the members of the Board of Directors of the Union filed this petition challenging the show cause notice dated 14.10.2020 and before this Court could hear the petition, respondent no.2- Registrar passed the impugned order dated 20.10.2020 without providing any opportunity of hearing to the petitioners. The issue with regard to providing opportunity of hearing while exercising powers under section 80(2) of the Act is no more res integra. The coordinate Bench of this Court in case of Bharat Sudambhai Patel (supra) has dealt with this issue with regard to the principles of natural justice as under :
"29.16 Similarly, the Apex Court in the case of State of M.P. vs. Sanjay Page 143 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 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 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 Page 144 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 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-Page 145 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 Page 146 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Act and the Byelaws 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 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 Cooperative 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.
Page 147 of 176
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C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022
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 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, Page 148 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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.
Page 149 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 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 Page 150 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 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 Page 151 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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."
12. In facts of the present case also show cause notice dated 14.10.2020 was received by the petitioners and other members of the Board of Directors of the Union on 16.10.2020. The petitioners filed this petition before this Court on 17.10.2020 and sought time before respondent no.2 to file reply during the course of hearing on 20.10.2020. However, respondent no.2- Registrar did not pass any order on the application for adjournment and the impugned order was passed on the same date reiterating the reasons recorded in the show cause notice for the purpose of nomination of respondent nos. 6 to 8 on the Board of Directors of the Union.
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13. The contention raised on behalf of the respondent authorities that no time could be granted as date of 25.10.2020 was fixed for election of Chairman and Vice-Chairman is not germane to the provisions of section 80(2) of the Act because bare perusal of section 80(2) does not contemplate that nomination has to be before the date of election of Chairman and Vice-Chairman. The submission made on behalf of the respondent authorities is clearly with a view to influence the election of Chairman and Vice-Chairman by appointment of respondent nos.6 to 8. There is no right conferred upon any nominating member to exercise his vote on the date of election and there is no obligation under the Act to pass the order before the date of election. Reliance placed on behalf of the respondent authorities on the ratio laid down in case of Chairman And Managing Director, B.P.L.Ltd. Versus S.P.Gururaja and ors. (supra), would Page 153 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 not be applicable in facts of the case as it deals with the issuance of ordinance and not an administrative decision which requires adherence to the principles of natural justice. Similarly in reliance placed on the decision of Titaghur Papermill Co. Ltd. V. State of Orissa (supra), the Court did not grant adjournment as in the said case, several opportunities to produce the books of accounts were already granted and therefore, in the facts of the present case, where notice is served upon the petitioners on 16.10.2020 and decision is taken within four days, it cannot be said that the sufficient opportunity is granted to the petitioners. Therefore, in view of decision of the coordinate Bench in Special Civil Application No.10405/2020 together with facts of the present case, action of respondent no.2- Registrar in passing the impugned order dated 20.10.2020 is in violation of the principles Page 154 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of natural justice and on this count also, the impugned order deserves to be quashed and set aside.
14. On perusal of the show cause notice, it appears that respondent no.2 had already made up his mind by arriving at conclusion of appointment of Government nominees when the same is compared with the impugned order dated 20.10.2020. Respondent no.2-Registrar without examining the eligibility of the three nominees as to whether they are eligible under byelaw no.17 and Government Resolution dated 8.4.2004, reiterated the same reasons which are already recorded in the show cause notice for appointment of respondent nos. 6 to 8 as its representatives of the Board of Directors of the Union.
15. Respondent no.2 has only recorded the activities of the Union with regard to number Page 155 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 of societies which are engaged in supply of milk and other products and number of members of such societies and the turnover of the Union, whereas he is supposed to form an opinion having regard to public interest involved as regards the operation of the society and whether it is "necessary and expedient" for nomination of its representatives. On perusal of the impugned order, there is an assertion that there is public interest but thereafter further consideration with regard to the operation of the Union and whether it is necessary and expedient to nominate its representatives is absent. Merely because Union operates on a large scale, State Government cannot assume as if it has subscribed to the share capital of the Union to exercise powers under section 80(1) of the Act. The issue is no more res integra in view of decision in case of Amreli District Cooperative Sale and Purchase Union Page 156 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Limited (supra) and in case of Gujarat State Marketing Cooperative Federation Limited and another (supra). It appears from the facts of the case that respondent no.2-Registrar has not formed an independent opinion which is fortified by letter dated 13.10.2020 by the District Registrar, Anand. Respondent no.2- Registrar has reiterated in the show cause notice as well as in the impugned order the same reasons which are narrated in the letter dated 13.10.2020. It is settled legal position that respondent no.2-Registrar is required to form an independent opinion and is not required to follow the communication in form of proposal and initiate the proceedings immediately on the next day on 14.10.2020 by issuing show cause notice. The coordinate Bench in case of Bharat Sudambhai Patel(supra), with regard to issue of formation of opinion and decision making under section 80(2) of the Act after Page 157 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 considering the facts of the said case observed as under:
"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. xxx 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 Page 158 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 Page 159 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 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;" Page 160 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022
C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 Page 161 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 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 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. (SeeAdvanced 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 Page 162 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 present case, there is no consideration at all by the Registrar much less any opinion formed by him."
16. Thereafter the Court has come to the conclusion in paragraph no. 29.9 that in facts of the said case, no opinion was formed by the Registrar of the Co-operative Society. Moreover in paragraph no. 29.16 which is reproduced here in above, it was observed that there was no formation of any opinion as per the requirement of sub-section (2) of section 80 of the Act by the Registrar. In the facts of the present case, respondent no.2-Registrar cannot be said to have formed an independent opinion by reiterating the same facts which are stated in the letter of proposal dated 13.10.2020 received from the District Registrar, Anand wherein after narrating the qualifications of respondent nos. 6 to 8 who are proposed to be nominated as representatives has stated that Kheda District Milk Producers Union Ltd, Anand is Page 163 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 having work area in three districts of Kheda, Anand and Mahisagar and there are 7,14,623 animal keepers associated through Primary Milk Producers society and there are 1214 Milk Producers societies. It is further stated in the said letter of proposal that working capital for the year 2019-2020 is Rs.9603.96 lakhs, reserve of Rs.17282.35 lakhs and there is total milk procurement of 11352.81 lakh kilo and turnover of milk is Rs.4,43,103.81 lakhs per year. It is further stated in the said letter that there is annual sale of 566279 metric tons of fodder. Comparing these facts with the show cause notice dated 14.10.2020 as well as the impugned order dated 20.10.2020, there is no difference in the reasons stated to have been recorded for forming an opinion by the respondent no.2-Registrar. Therefore, it can be said that there is no independent opinion formed by respondent no.2-Registrar that Page 164 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 there is public interest involved in the operation of the Union on the first count and assuming for a while such an opinion is an independent opinion of the respondent no.2- Registrar, then there is total failure on part of respondent no.2 to point out any necessity or expediency to nominate his representatives on the Board of Directors of Union.
17. With regard to reliance placed by the respondent authorities on the aspect of necessity and expediency to be considered by respondent no.2-Registrar, it is pertinent to note that there is total absence of consideration on part of respondent no.2 as to whether it is necessary and expedient to nominate the representatives. Thus there is total non-application of mind while passing the impugned order by respondent no.2- Registrar.
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18. Reliance placed on behalf of the respondent authorities on the decision of Supreme Court in case of State of Gujarat v. Jamnadas G. Pabri (supra), with regard to section 303A of the Gujarat Panchayat Act, 1961 is concerned, the same would not be applicable in the facts of the present case because in the said section 303A of the Gujarat Panchayats Act, two requirements are to be fulfilled (1) existence of a situation by reason of disturbances in the whole or any part of the State (2) the satisfaction of the State Government relatable to such a situation that it is not expedient to hold elections for the reconstitution of a Panchayat on the expiry of its term. The Apex Court held that the first requirement is an objective fact and the second is an opinion or inference drawn from that fact and if the first requirement if disputed, must be established objectively as a condition Page 166 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 precedent to the exercise of the power, whereas the second is a matter of subjective satisfaction of the Government and is not justiciable. It was in this context that the Apex Court held that once a reasonable nexus between such satisfaction and the facts constituting the first requirement is shown, the exercise of the power by the government not being colourable or motivated by extraneous consideration is not open to judicial review. However, in the facts of the case respondent no.2 is supposed to form an opinion with regard to the public interest involved in the operation of the Union which is also a subjective satisfaction so as to further form an subjective opinion that it is necessary and expedient to nominate the representatives.
19. The reliance placed in case of G.S. Lamba v. Union of India (supra), while Page 167 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 interpreting Rule 29(a) of the Indian Foreign Service Branch 'B' (Recruitment, Cadre, Seniority and Promotion), Rules, 1964 wherein also words "necessary and expedient" occurs, the Apex Court held that failure to record the reasons will not invalidate the exercise of power and once the power to relax is given, mandatory rule exists and an action in derogation of the rule has been repeatedly taken year after year, it would be a permissible inference that the action was taken in relaxation of the rule for which the power exists. Rule 29(a) of the aforesaid Rules refers to relaxing the provisions of said Rules with regard to any class or category of persons or posts and for that purpose it was stipulated that controlling authority is of the opinion that it is necessary or expedient so to do, it may be ordered for reasons to be recorded in writing to relax any of the provisions of the said Page 168 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Rules. In this context, the Apex Court has held that once power to relax were given, the action in derogation of the mandatory rule has been repeatedly taken year after year then there is no need to record the reason in writing. However, in the facts of the case while exercising the powers to nominate the representatives of the State on the Board of Directors of the Union as if the State Government had subscribed to the share capital of the Union so as to control the affairs of the Union, it is incumbent upon the State Government i.e. the Registrar to form an opinion that it is necessary and expedient to do so with regard to public interest involved in the operation of the Union. Therefore, the aspect of necessity and expediency cannot be separated or severed from the formation of opinion with regard to the public interest involved in the operation of the Union. Therefore, reliance on the Page 169 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 decision in case of G.S. Lamba v. Union of India (supra) is not applicable to the facts of the case.
20. The reliance placed in case of Amarjit Singh (supra) would also not be applicable because formation of the opinion with regard to involvement of public interest as well as necessity and expediency to nominate the representatives are both subjective satisfaction of the State Government, whereas in the facts of the case before the Apex Court, subjective satisfaction of necessity and expediency was dependent on the objective consideration of the circumstances that were germane. In the facts of the present case, merely by recording the facts with regard to the scale of operation of the Union, it cannot be said that it is an subjective consideration to form an opinion that public interest is involved in the operation of the Page 170 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 Union. The Union is in existence since 1946 and till 2020 State Government did not think it fit that there is public interest involved in the operation of the Union and it is necessary and expedient to exercise powers under section 80(2) of the Act.
21. With regard to the contention raised on behalf of the respondent authorities that matters relating to opinion and subjective satisfaction are normally not justiciable, more particularly on the grounds of propriety or sufficiency, reliance is placed on the decision in case of B.K. Pavitra (supra) wherein it is held that it is not open for the Court to substitute its own opinion for that of authority, but, in the facts of the present case there is no opinion and therefore, question of substitution does not arise. It is evident that there is absence of any opinion emerging either from the show Page 171 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 cause notice or from the impugned order or from any other documents on record which points out that independent opinion of respondent no.2 -Registrar is available with regard to the public interest involved in operation of the Union except recording of the facts of the operation of the Union and that it is necessary and expedient to nominate the representatives. There is no subjective opinion of respondent no.2 with regard to the public interest and necessity and expediency to nominate the Government representatives on the Board of Directors of the Union.
22. With regard to the interpretation of section 80(2) of the Act, the Division Bench in paragraph no. 9.1 of the decision in case of Gujarat State Marketing Cooperative Federation Limited and another (supra), held that merely because the operation of the Page 172 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 society affects many persons, would not result in an opinion of the extent to which interest of public is affected is required to be safeguarded. The Division Bench has therefore, emphasized on the aspect of public interest and requirement of examining necessity or expediency for exercise of powers to nominate as sufficient in-built safeguards against any arbitrary exercise of powers under section 80(2) of the Act and therefore, public interest and requirement of examining necessity and expediency for exercise of powers are sufficient as in-built safeguards for exercise of powers to nominate under section 80(2) of the Act. In the facts of the case, these inbuilt safeguards of forming an opinion with regard to the public interest and requirement of examining the necessity and expediency has failed as there is no independent opinion formed by the respondent no.2 Registrar nor the impugned Page 173 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 show cause notice or the order utters a word with regard to the process of examination undertaken with regard to necessity and expediency for exercise of powers to nominate the Government representatives on the Board of Directors of the Union. Thus, the State Government and respondent no.2 has failed to examine the inbuilt safeguards of necessity and expediency for exercise of powers to nominate the Government representatives on the Board of Directors of the Union. In such circumstances, the twin requirements in form of inbuilt safety are not adhered to or complied with and therefore, the impugned order is liable to be quashed and set aside.
23. With regard to eligibility and qualification of respondent no.6 to 8 are concerned, as it is held that exercise of powers by the Registrar to nominate Government representatives was not in Page 174 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 consonance with the provisions of section 80(2) of the Act, whether respondent no.6 and 7 are eligible and whether respondent no.8 is not eligible as well as applicability of principle of severability become insignificant and therefore, said aspects being consequential does not survive and the same therefore, are not required to be dealt with.
24. In view of the foregoing reasons, the petition succeeds and is accordingly allowed. Impugned order dated 20.10.2020 is ordered to be quashed and set aside. In view of order dated 22.10.2020 passed by this Court, as the Chairman is elected uncontested, the sealed cover containing the votes for appointment of Vice-Chairman is directed to be opened under the supervision of the Election officer and the Collector concerned and thereafter declare the result in accordance with law Page 175 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022 C/SCA/13072/2020 CAV JUDGMENT DATED: 26/08/2022 while following necessary requirements for election of Vice-Chairman ignoring the votes of the respondent nos. 6 to 8.
25. Rule is made absolute to the aforesaid extent. No order as to costs. In view of above order, Civil Application is disposed of.
(BHARGAV D. KARIA, J) At this juncture, learned Senior Advocate Mr. Prakash Jani for respondent nos. 6 to 8 and learned advocate Mr. Vinay Vishen for the respondent-State prays for stay of the implementation of this judgment and order.
In view of reasons assigned by this Court, the request is rejected.
(BHARGAV D. KARIA, J) RAGHUNATH R NAIR Page 176 of 176 Downloaded on : Mon Aug 29 21:23:48 IST 2022