Jaagabhai Indubhai Saraiya vs District Registrar Co-Operative ... on 25 July, 2019

[Cites 11, Cited by 2]

Gujarat High Court

Jaagabhai Indubhai Saraiya vs District Registrar Co-Operative ... on 25 July, 2019

Equivalent citations: AIR 2019 GUJARAT 171, AIR 2019 GUJRAT 171, AIRONLINE 2019 GUJ 216 (2020) 1 GUJ LR 247, (2020) 1 GUJ LR 247

Bench: Bela M. Trivedi

       C/SCA/10599/2016                                        CAV JUDGMENT




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD


             R/SPECIAL CIVIL APPLICATION NO. 10599 of 2016


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS.JUSTICE BELA M. TRIVEDI                                     Sd/-

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1     Whether Reporters of Local Papers may be allowed to
      see the judgment ?                                                    NO

2     To be referred to the Reporter or not ?
                                                                           YES
3     Whether their Lordships wish to see the fair copy of the
      judgment ?                                                            NO

4     Whether this case involves a substantial question of law
      as to the interpretation of the Constitution of India or any          NO
      order made thereunder ?

==========================================================
                          JAAGABHAI INDUBHAI SARAIYA

                                     Versus

       DISTRICT REGISTRAR CO-OPERATIVE SOCIETIES & 2 other(s)
==========================================================
Appearance:

MR NITIN M AMIN(126) for the Petitioner(s) No. 1
MS JYOTI BHATT, AGP for the Respondent(s) No. 1
MR VIRAL K SHAH(5210) for the Respondent(s) No. 2
MR SANJAY M AMIN(130) for the Respondent(s) No. 3

==========================================================

    CORAM: HONOURABLE MS.JUSTICE BELA M. TRIVEDI

                                Date : 25/07/2019

                                CAV JUDGMENT

Page 1 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT

1. The petitioner claiming to be the Member of the respondent No.3 Cooperative Society has filed the present petition on behalf of himself and on behalf of other 371 Members listed in Annexure-A seeking following prayers:-

"23.(a)To issue a writ of mandamus or any other appropriate writ, order and direction to the respondents to forthwith issue No Due Certificate to the petitioner and all 371 farmers as per list AnnexureA and such other farmers have already paid and are ready and willing to repay their official and lawful KCC loan amount due to Bagad Seva Sahkari Mandli Limited;

(b) To direct the respondent take action/step under Section 93 of the Gujarat Cooperative Societies Act, 1961 as recommended by the inquiry officer appointed by respondent1 under Section 86 of the Act and strictly take action as per the recommendations made in the report dated 24.1.2011;

(c) To order investigation against erring officers of the Bank and the society by State CID Crime;

(d) To direct the respondents to refund the amount to the farmers who are forced to pay excess KCC loan amount (as shown in column No.6 of Mangna Patrak by the secretary) with interest and penalty though such amount is not obtained by them but misappropriated by the secretary and others;

(e) To direct the respondents to take actions as per the recommendations of the inquiry Page 2 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT officer appointed by respondent1 as stated in his report dated 24.1.2011 (AnnexureB)."

2. Heard the learned Advocate Mr.Nitin Amin for the petitioner and the learned Advocate Mr.Viral Shah for the respondent No.2 Bank.

3. The short facts are that as per the case of the petitioner large scale fraud and misappropriation, forgery and cheating was committed by the then Chairman, Secretary and Committee Members of the respondent No.3 Society, which was noticed in the year 2010, and therefore, the respondent District Registrar had ordered an inquiry under Section 86 of the Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as "the said Act"). The Inquiry Officer had submitted his report on24.1.2011,in which various actions were suggested by the Inquiry Officer to be taken against the offenders as per the provisions of the said Act. According to the petitioner, the then Secretary of the Society one Mr.Bhupatbhai Ukadbhai Makwana had misappropriated more than Rs.4 crore by showing Kisaan Cash Credit Loans exceeding the upper limits of the farmers in the Page 3 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT Mangna Patrak prepared by him and obtained the said amount from the Bank and used for his personal purpose. When the said Secretary was unable to repay the amount misappropriated by him, he forged power-of-attorney of 31 farmers and got them registered with the Sub-Registrar's office at Dandhuka and mortgaged the lands of such farmers with the Society and the respondent Bank. So far as the petitioner and other 371 enlisted at Annexure-A were concerned, for not fault of them and without their knowledge and consent, their lands were mortgaged with the respondent Society and the respondent Bank on forged, bogus documents created by the said Secretary. Though the petitioner and the 371 farmers had not asked for and applied for any Kisaan Cash Credit Loans more than their approved upper limits, the then Secretary forged the Demand List/Mangna Patrak and obtained the loans from the respondent Bank in the name of the petitioner and other farmers. When the fraud committed by the then Secretary came to light he absconded with the accounts books of the Society. Now, the respondents are asking the Page 4 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT petitioner and other farmers to repay the amount misappropriated by the said Secretary Mr.Bhupatbhai Ukadbhai Makwana and others, with interest and penalty before issuing the 'No Due Certificate' to them and hence, the present petition has been filed.

4. At the outset, it is pertinent to note that the present petition involves serious disputed questions of facts, inasmuch as the petitioner has alleged fraud and misappropriation of money at the instance of the then Secretary of the respondent Society. Whether such fraud was committed or not and whether the Secretary had obtained loans mortgaging the lands of the petitioner and others without their knowledge or not and by forging documents or not, are highly disputed questions of facts, which could not be decided in the petition filed under Article 226 of the Constitution. As rightly submitted by the learned Advocate Mr.Viral Shah for the respondent Bank, relying upon the decision of the Supreme Court in case of Roshina T. Vs. Abdul Azeez K. T. and Anr., reported in (2019) 2 Page 5 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT SCC 329, the petition involving disputed questions of facts and that too, between the private parties, would not be maintainable. The appropriate remedy would be the suit in the Civil Court or the proceedings under the Gujarat Cooperative Societies Act, as may be permissible.

5. There is also nothing on record to suggest that the State exercises any direct or indirect control over the affairs of the respondent Society and the respondent Bank, or that they are substantially financed by the State Government. The respondent Cooperative Society/Bank, therefore, could not be said to be the 'State' under Article 12 of the Constitution of India. A beneficial reference of the decision of Supreme Court in case of S. S. Rana Vs. Registrar, Cooperative Society. Societies and Anr., reported in (2006) 11 SCC 634 is required to be made in this regard, in which it has been observed as under:-

"10. It has not been shown before us that the State exercises any direct or indirect control over the affairs of the Society for Page 6 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT deep and pervasive control. The State furthermore is not the majority shareholder. The State has the power only to nominate one director. It cannot, thus, be said that the State exercises any functional control over the affairs of the Society in the sense that the majority directors are nominated by the State. For arriving at the conclusion that the State has a deep and pervasive control over the Society, several other relevant questions are required to be considered, namely: (1) How the Society was created?; (2) Whether it enjoys any monopoly character?; (3) Do the functions of the Society partake to statutory functions or public functions?; and (4) Can it be characterized as public Authority?

11. The respondent No.1Society does not answer any of the afore mentioned tests. In the case of a nonstatutory society, the control thereover would mean that the same satisfies the tests laid down by this Court in Ajay Hasia vs. Khalid Mujib Sehravardi [(1981) 1 SCC 722]. [See Zoroastrian Coop. Housing Society Ltd. vs. District Registrar, Coop. Societies (Urban) & Ors. reported in 2005 (5) SCC 632.]

12. It is well settled that general regulations under an Act, like Companies Act or the Cooperative Societies Act, would not render the activities of a company or a society as subject to control of the State. Such control in terms of the provisions of the Act are meant to ensure proper functioning of the Society and the State or statutory authorities would have nothing to do with its daytoday functions."

6. From the tenor of the petition it appears that the petitioner has filed the petition on behalf of the 371 Members enlisted in Annexure- Page 7 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019 C/SCA/10599/2016 CAV JUDGMENT

A,however, there is nothing on record to suggest that the said Members had authorized the petitioner to file such petition. Under the circumstances, the petition in the present form against the respondent Cooperative Society/Bank involving highly disputed questions of facts could not be entertained and deserves to be dismissed.

7. In that view of the matter, the petition is dismissed.

Sd/-

(BELA M. TRIVEDI, J) V.V.P. PODUVAL Page 8 of 8 Downloaded on : Fri Jul 26 00:50:16 IST 2019

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