Gujarat High Court
Vashkui Dudh Utpadak Sahakari Mandali ... vs District Registrar & 3 on 27 January, 2017
Equivalent citations: AIR 2017 (NOC) 354 (GUJ.)
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/16496/2016 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 16496 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE N.V.ANJARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ? Yes
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 No
India or any order made thereunder ?
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VASHKUI DUDH UTPADAK SAHAKARI MANDALI LIMITED &
1....Petitioner(s)
Versus
DISTRICT REGISTRAR & 3....Respondent(s)
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Appearance:
MR CHIRAG B PATEL, ADVOCATE for the Petitioner(s) No. 1 - 2
MR ROHAN YAGNIK, AGP for the Respondent(s) No. 1
MR BHARAT T RAO, ADVOCATE for the Respondent(s) No. 2
MR DAXAY D PATEL, ADVOCATE for the Respondent(s) No. 4
MS. KRUTI M SHAH, ADVOCATE for the Respondent(s) No. 3
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 27/01/2017
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C/SCA/16496/2016 CAV JUDGMENT
CAV JUDGMENT
Heard learned advocate Mr.Bharat Patel for the petitioners, learned Assistant Government Pleader Mr.Rohan Yagnik for the first respondent, learned advocate Mr.Bharat Rao for the second respondent and learned advocate Ms.Megha Pandya for learned advocate Ms.Kruti Shah for the third respondent.
2. The District Registrar, Cooperative Societies, Surat-the first respondent herein, seeking to exercise his powers under Section 74D(1) of the Gujarat Cooperative Societies Act, 1961, passed order dated 22nd September, 2016 appointing a Custodian for the petitioner-Vashkui Dudh Utpadak Sahakari Mandali Limited. Respondent No.2 herein came to be appointed as Custodian. It is this order to which the challenge is addressed in this petition on the ground that the authority exceeded its jurisdiction and the resultant order is without jurisdiction.
3. The events preceded and made premise for passing the impugned order may be noted with relevance. It appears that elections to the Managing Committee of the petitioner society though were required to be notified, they were not notified, and the State Government had not appointed any authority to conduct the elections. In order dated 10th July, 2013 passed by this Court in Special Civil Application No.10155 of 2013, it was directed that the elections to the Managing Committee was required to be held as per the bye-laws. The Election Officer was thereafter appointed and the election programme was declared on Page 2 of 9 HC-NIC Page 2 of 9 Created On Sat Jan 28 02:22:21 IST 2017 C/SCA/16496/2016 CAV JUDGMENT 02nd September, 2016. The results of the elections were declared on 12th September, 2016 by the Returning Officer. It appears that certain female members of the first petitioner society filed objections before the District Registrar. The District Registrar addressed letter dated 08/12th September, 2016 to the petitioner to cancel the election programme and fix new programme. It was on the complaint that reserved seats for women were not notified. The said letter of the Registrar was received by the society after 12th September, 2016 when the results had been declared. It further appears that on 18th September, 2016 elections to two reserved seats for women were declared, which was the objection that the reserved seats for women were not kept and the elections were held in absence of such reservation. The case of the petitioner is that no candidate in the women category filled nomination form on 19th September, 2016.
3.1 The culmination of the aforesaid sequence of events was in form of the impugned order under Section 74D(1) of the Act. Adverting to see the contents and the grounds of the order, the District Registrar observed that the election programme of the society was published contrary to the legal provisions and that it was defective. It was stated that two seats for women were not reserved yet the elections were declared and conducted. It was further stated by the Registrar in the impugned order that though by communication dated 08/12th September, 2016, the petitioner society was asked to prepare fresh election programme, the instructions were not obeyed by the Page 3 of 9 HC-NIC Page 3 of 9 Created On Sat Jan 28 02:22:21 IST 2017 C/SCA/16496/2016 CAV JUDGMENT petitioner. It was in wake of such reasons and considerations that the first respondent-District Registrar proceeded to exercise his powers under Section 74D(1) of the Act and ordered appointment of the Custodian.
4. Respondent Nos.1 to 3 by filing their affidavit-in-replies defended the impugned order of appointment of Custodian. It is contended on behalf of the respondents that elections to the Managing Committee of the society was not held in accordance with law and since they were required to be held as per provision of Section 74-BB of the Act, but held in breach and that the reservation for seats for women was not provided, exercise of Section 74D(1) of the Act was undertaken and the Custodian was appointed. It was submitted that Managing Committee elected in an election conducted and held not in accordance with the provisions of the Act and the bye-laws, could not be allowed to continue. For supporting the said proposition that elections had to be conducted in accordance with the provisions of the Act and the bye- laws, decisions of this Court were relied on.
4.1 Learned advocate for respondent No.2 who was Custodian appointed, submitted that the Custodian had no personal interest, however it was the stand of the second respondent as well that the order was justified in law on the aforesaid ground of elections having not been held in accordance with the provisions. It was contended in the affidavit of the third respondent that there was no valid elections in eye of law.
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5. Whether the District Registrar acted within the area of his powers under Section 74D(1) of the Act, whether he could derive jurisdiction to exercise powers on the grounds he exercised the same while acting under Section 74D(1) of the Act and whether therefore the impugned order suffers from vice of jurisdictional error, are the fundamental questions.
5.1 At the outset, provision of Section 74D(1) of the Gujarat Cooperative Societies Act, 1961 may be looked at which is extracted herein.
"74D.-Appointment of Custodian in certain circumstances.-(1) Where in respect of any society including a society existing immediately before the commencement of the Gujarat Co-operative Societies (Amendment) Act, 2015 (Guj.12 of 2015), a new committee of management is, for any reason whatsoever, not elected before the expiry of the term of office of members of a committee of management of such society or having been elected not functioning within a period of three months (not being a committee referred to in section 80A), except for the reason of order of the competent court due to which such election could not be held or the managing committee could not start functioning, the registrar shall by an order in writing, appoint a person or a committee of persons to be the Custodian of the society for a period of one year or until a new committee of management is elected or, as the case may be, starts functioning."
5.2 Section 74D(1), on its bare reading, clearly reflects on its ambit and amplitude. The powers thereunder are exercisable for the grounds mentioned Page 5 of 9 HC-NIC Page 5 of 9 Created On Sat Jan 28 02:22:21 IST 2017 C/SCA/16496/2016 CAV JUDGMENT therein. An attentive reading would show that two grounds are enumerated, the first is that where a new committee of the management is, for any reason whatsoever, not elected before the expiry of the term of office of the members of the committee. The second ground is the members of the committee though having been elected, not functioning within the period of three months. Section further mentions that the aforesaid ground would not apply where because of order of the competent court the election could not have been held or the Managing Committee could not start to function. The powers of the Registrar to appoint Custodian would have to be validly rested on the said grounds only, to state at the cost of repetition, where new committee of management was not elected before the expiry of the term or the committee elected could not commence functioning within the period indicated.
6. Neither of the aforesaid two eventualities exist in the present case. It is not that elections are not held, nor it is the situation obtained that the elected committee of the management did not start functioning within three months. The ground on which the impugned order s passed by the Registrar is that the elections of the Managing committee were held in breach of certain provisions as the woman seats were not reserved. The say of the petitioner is that the election programme was again notified, two reserved seats were provided pursuant to the instructions of the Registrar, however nobody came forward to seek nomination on the reserved seats. Be as it may. In Page 6 of 9 HC-NIC Page 6 of 9 Created On Sat Jan 28 02:22:21 IST 2017 C/SCA/16496/2016 CAV JUDGMENT ultimate analysis and for all purposes, the dispute that occurred between the parties was an election related dispute. It is indeed an election dispute whether election was held without providing reservation of seats or was allegedly marred by certain irregularities and illegalities. A dispute in the nature of election dispute cannot be a ground for exercise of powers under Section 74D(1) of the Act.
6.1 Any other ground than provided for under the Section rided by the Registrar seeking to act under Section 74D(1) would amount to exercise of powers without jurisdiction. There cannot be a derivation of powers to appoint a Custodian to the society besides and beyond the grounds mentioned in the provision. When a power is conferred on a statutory authority to be exercised on the grounds mentioned in the provision itself, acting to exercise powers on a different or foreign ground would tantamount to usurpation of powers. Usurpation of power transcends beyond illegality to become an act without jurisdiction.
6.2 An election dispute cannot be said to have been covered in the compass of the provision. The concern that the elections to the new Managing Committee were held in breach of the provisions of the law or bye-laws is not the same as elections not held. It is not a situation same as 'a new committee of management not elected' which is the ground mentioned in the Section. Whether elections of the petitioner's Managing Committee were held in accordance with the provisions of law and bye-laws was essentially and in Page 7 of 9 HC-NIC Page 7 of 9 Created On Sat Jan 28 02:22:21 IST 2017 C/SCA/16496/2016 CAV JUDGMENT its all ingredients could be said to be an election dispute. The cure in law for such alleged irregularity or illegality in election is not the exercise of powers to appoint Custodian. If any illegality or irregularity is committed in holding elections, the remedy may be to get the elections set aside by resorting to appropriate proceedings. It could be successfully contended by the petitioners that Section 94 of the Act would come into picture, under which the remedy was available.
6.3 If the election dispute is to be made a ground for exercise of powers under Section 74D(1) of the Act and for appointing Custodian to the cooperative society, adversion to and application of the said provision on that basis would become prone to political use and consequently misuse of powers. Nor the election dispute is a purport of powers under Section 74D(1) by any stretch of logic. Any statutory authority purporting to act under a provision of law to exercise powers which are not available to him under the provision or do not flow therefrom or acting to exercise the powers on the consideration de hors the express grounds mentioned in the provision, is in the nature of colourable exercise of powers. Such exercise is just not a wrongful exercise of powers but partakes a situation where the action could be said to be tainted with malice in law.
7. In the aforesaid view, the impugned order dated 22nd September, 2016 passed by the first respondent-District Registrar, Cooperative Societies, Page 8 of 9 HC-NIC Page 8 of 9 Created On Sat Jan 28 02:22:21 IST 2017 C/SCA/16496/2016 CAV JUDGMENT Surat appointing respondent No.2 as Custodian of the petitioner society could hardly stand valid in eye of law. The same is liable to be set aside, and it is hereby set aside.
Petition is allowed.
(N.V.ANJARIA, J.) FURTHER ORDER At this stage, learned advocate Mr.Bharat Rao for the second respondent prays for stay of the order in order to enable the second respondent to approach the higher forum. Learned advocate Mr.Chirag Patel objects to the request.
In view of what is held hereinabove, the request is not to be accepted and the same is rejected.
(N.V.ANJARIA, J.) Anup Page 9 of 9 HC-NIC Page 9 of 9 Created On Sat Jan 28 02:22:21 IST 2017