Gujarat High Court
Anand Taluka Co Operative Purchase And ... vs State Of Gujarat on 8 October, 2018
Author: S.H.Vora
Bench: S.H.Vora
C/SCA/14759/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 14759 of 2018
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ANAND TALUKA CO OPERATIVE PURCHASE AND SALE UNION LIMITED
Versus
STATE OF GUJARAT
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Appearance:
MR CHIRAG B PATEL(3679) for the PETITIONER(s) No. 1,2
MR DILIP B RANA(691) for the RESPONDENT(s) No. 3
MR RONAK RAVAL, AGP for the RESPONDENT(s) No. 1, 2
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CORAM: HONOURABLE MR.JUSTICE S.H.VORA
Date : 08/10/2018
ORAL ORDER
1. By way of this petition under Article 226 of the Constitution of India, the petitioners have prayed for the following relief in terms of para 8(A).
"Your Lordship may be pleased to issue a writ of certiorari and/or a writ in the nature of certiorari and/or any other appropriate writ, order or direction quashing and setting aside order dated 18th September, 2018 passed by respondent No.2 at Annexure A to the present petition."
2. The case of the petitioners is that the petitioner No.1 is a specified Cooperative Society registered under the Gujarat Cooperative Societies Act, (for short "the Act") and petitioner No.2 is authorized Vice Chairman of petitioner No.1 Society. The petitioners ventilate grievance qua order dated 18.9.2018 passed by the respondent No.2 appointing custodian in the petitioner No.1 society on the premise that the impugned order at Annexure A to the petition is passed without giving any opportunity of hearing to the petitioner No.1 - society.
Page 1 of 6 C/SCA/14759/2018 ORDERNo notice and/or intimation has been given to the petitioner No.1 society and straightaway, order at Annexure A to the petition is passed, which is in violation of principles of natural justice and therefore, impugned order is improper, illegal and bad in eyes of law in light of decisions rendered in case of Dharampal Satyapal Ltd. Vs. Deputy Commissioner of Central Excise, Gauhati and others reported in (2015) 8 SCC 519, in case of Krishna Mohan Medical College and Hospital and another Vs. Union of India and another reported in (2017) 15 SCC 719 and in case of State of Punjab and others Vs. Bhatinda District Cooperative Milk Producers Union Ltd. reported in (2017) 11 SCC 363.
3. Per contra, the respondents have filed their affidavit-in- reply inter alia submitting that as per provisions of section 74(C) of the Act, the elected members of the Managing Committee and its office bearers shall cease to hold office on the date of expiry of their term and therefore, they are not required to be heard if custodian is to be appointed u/s 74(D) of the Act after the date of expiry of their term in view of decision rendered in case of Banaskantha District Cooperative Milk Producers Union Ltd. Vs. State of Gujarat and others delivered on 3.11.2015 in Special Civil Application No.14948 of 2015 with Special Civil Application No.15660 of 2015.
4. Heard the submissions made at bar and considered the principles cited in case laws cited at bar by both the sides.
5. The fact, which is not in dispute, is such that last election of the petitioner No.1 society was held on 8.1.2014 and therefore, as per provisions pertaining to section 74(C)(2) Page 2 of 6 C/SCA/14759/2018 ORDER of the Act, the term of the Managing Committee expired on 5.3.2017. It is the case of the petitioners that the term of the Managing Committee expired on 5.9.2017. As per say of the petitioners, they were having impression that the term and tenure of the Managing Committee of the petitioner No.1 society was to be expired on or before 6.3.2019 as per amended Act No.12 of 2015 and thus, the petitioners have started process of election and at the midst of such election process, the impugned order came to be passed without hearing them, which is improper and illegal. Said issue raised in the petition is clearly answered by the learned single Judge in case of Banaskantha District Cooperative Milk Producers Union Ltd. (supra) and more particularly, para 20 thereof, which is reproduced herein below.
"20. The Court having considered the old provisions of Section 74-D of the Act, the validity of which with other provisions of the Act was examined in the case of Amreli District Co-op. Sale & Purchase Union Ltd. (supra), vis-a-vis the present amended provision of Section 74-D with Section 74-C(2) of the Act, finds that it was in the context of the provision of Section 74-D then existed, the Court in the the case of Amreli District Co-op. Sale & Purchase Union Ltd. (supra) held in para 96 as under:-
96. Section 74D, as noted above, provides for appointment of a Custodian in certain circumstances.
We have reiterated the contention that section 74D is violative of Article 19(10(c) and (g). The challenge to this section on the ground of it being violative of Article 14 is limited, inasmuch as it does not provide for any hearing before the Custodian is appointed. It is challenged as arbitrary. We must read the obligation of hearing a society before the order is made under Section 74D in the amended provisions. The Registrar shall, before appointing a person or a committee of persons, to be custodian of a society, shall given an opportunity of hearing to the society before any order is made. The challenge on the ground of Article 14 must, therefore, be rejected.
Page 3 of 6 C/SCA/14759/2018 ORDERIt is required to note that the Court in terms rejected the contention that Section 74-D was violative of Article 19(1)(c) and (g) of the Constitution of India. However, the Court read the obligation of hearing a society before an order is made under Section 74-D in the amended provision. But, the challenge on the ground of Article 14 was rejected. As provided in Section 74-D then existed, if a new committee of management is, for any reason whatsoever, not elected or having been elected, not functioning, within period of six months after expiry of the term of the office of members of the committee of management, the Registrar may appoint a person or a persons of committee to be the custodian until new committee of management is elected to start functioning. Thus, even after the term of the committee would expire, six months time was available to the committee to continue in the office and during which period if election is not held, discretion was available to the Registrar to appoint custodian and if such discretion is not exercised, no hietus will be created on account of the provisions made in Section 76-C(2) under which the Committee would continue in the office till new election is held. In such nature of provisions of Section 74-D, then existed, the Court in the case of Amreli District Co-op. Sale & Purchase Union Ltd. (supra) read the obligation of hearing before making appointment of custodian. In the year 2008, the provision as regards waiting period of six months after expiry of the term of the office of members of the committee was done away with. However, no change was made as regards exercise of the discretion by the Registrar for appointment of custodian by continuing the word MAY used in Section 74-D after the words, THE REGISTRAR. Now, in the amended provisions of Section 74- D, word, SHALL is used for the Registrar to exercise the powers for appointment of custodian. The reasons/ grounds for such exercise of powers are the same in the present amended provisions of Section 74-D as were there in Section 74-D when amended by Gujarat Act No.1 of 2008 except for holding of no election for new committee or non-functioning of the new elected committee for reason of the Courts order. The phrase, FOR ANY REASON WHATSOEVER found place in the original provision of Section 74-D, has continued in the amended provision of Section 74-D in the year 2008 and in the present amended provision. The Registrar was not required to consider the reasons for exercise of the powers for appointment of custodian either under the old provisions or under the amended provisions to find out why new committee of management was not elected or was not functioning. However, the discretion was with the Registrar not to appoint the custodian in unamended provision of Section 74-D of the Act and by virtue of the substituted sub-
Page 4 of 6 C/SCA/14759/2018 ORDERsection (2) of Section 74-C, the elected body would continue in the office till new election is held. But, now, it appears that the legislature clearly intended not to allow the elected members to continue in the office beyond their term and therefore, it wants the Registrar to immediately take over the management of the society through the custodian on expiry of the term of the elected members of the committee if new committee is not elected before expiry of such term or not functioning for 3 months. Therefore, while re-introducing Section 74-D with its new version by Amendment Act of 2015, sub-section (2) of Section 74-C is also substituted by making specific provision in Clause (iv) thereof that elected members of the managing committee and its office bearers shall cease to hold office on the date of expiry of their term. By such simultaneous amendment in sub-section (2) of Section 74-C, the legislature has made its intention more clear that it does not want any elected members to continue in the office beyond their term. If such is the intention of the legislature and if the legislature wants that the Registrar shall appoint custodian, if a new committee of management, for any reason whatsoever, is not elected before expiry of the term of the office of members of the committee of the management of the society or that such committee having been held, not functioning, it is not possible to read the obligation of affording hearing in the present provisions of Section 74-D before the order for appointment of custodian is made by the Registrar as reading of such obligation may render the intention of the legislature frustrated. There is one more reason to come to such conclusion. By Gujarat Act No.17 of 2013, Section 74-D was deleted and in Section 81, non- holding of election was added as one more ground for super- session of the committee of management. In Section 81, express provision is made for hearing. However, when the provision of Section 81 is further amended by Amendment Act of 2015, so as to remove the ground of non-holding of election of the Committee of management and with such ground, again when the provision of Section 74-D with its new version was re-introduced, the legislature has not thought it fit to carry obligation of hearing existed in Section 81 for super-session on the ground of non-holding of the election of the committee in present provisions of Section 74- D. If the legislature intended hearing to be given before making the order of custodian under Section 74-D, the provision for hearing would have been incorporated in Section 74-D. The legislature, when by one amendment Act provided for two different kinds of amendments, was fully aware about the provision of hearing which was made in Section 81 and still not made such provision in Section 74-D, which would go to suggest that it clearly intended not to Page 5 of 6 C/SCA/14759/2018 ORDER provide hearing either to the committee members or to the society before making the order of custodian."
6. So far case laws cited at bar by learned advocate Mr. Patel for the petitioners are concerned, the same do not have any bearing on the issue on hand, because the Court is concerned with the issue whether any hearing is required to be extended to the petitioners before invoking powers u/s 74(D) of the Act and the said issue is answered by the learned single Judge in case of Banaskantha District Cooperative Milk Producers Union Ltd. (supra) in negative. Therefore, present order is not required to be burdened anymore, as cases cited by learned advocate for the petitioners have no application to the facts of the present case.
7. In the result, the petition fails being devoid of merits, both on law and facts and stands dismissed. Notice discharged.
(S.H.VORA, J) SHEKHAR P. BARVE Page 6 of 6