Gujarat High Court
Shree Kharachiya Seva Sahakari Mandali ... vs State Of Gujarat on 17 December, 2020
Author: Ashutosh J. Shastri
Bench: Ashutosh J. Shastri
C/SCA/13286/2020 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13286 of 2020
With
R/SPECIAL CIVIL APPLICATION NO. 13298 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SHREE KHARACHIYA SEVA SAHAKARI MANDALI LTD
Versus
STATE OF GUJARAT
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Appearance:
SCA 13286 OF 2020
MR BS PATEL, SENIOR ADVOCATE with MR BHARAT T RAO(697) for
the Petitioner(s) No. 1,10,2,3,4,5,6,7,8,9
MS MANISHA LAVKUMAR SHAH, GOVERNMENT PLEADER with MS
AISHWARYA GUPTA, AGP for the Respondents No. 1-3
for Respondent No.4
MR MIHIR JOSHI, SENIOR ADVOCATE with MR DIPEN DESAI,
learned advocate for the Respondent Nos.5 to 8.
SCA 13298 OF 2020
MR RUTUL DESAI for MR DAXAY PATEL, for the petitioners
MS MANISHA LAVKUMAR SHAH, GOVERNMENT PLEADER with MS
AISHWARYA GUPTA, AGP for the Respondents No. 1-3
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CORAM: HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 17/12/2020
COMMON ORAL ORDER
1. Both these petitions are arising out of almost similar Page 1 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT controversy, the same are requested to be heard together. Hence, upon request and consent of learned advocates of the respective side, both these petitions are taken up for its disposal.
2. Special Civil Application No.13286 of 2020 is filed by some 10 Cooperative Mandlis for the purpose of challenging the legality and validity of the impugned order / communication date d 14.10.2020 passed by the Election Officer and Prant Officer, Jamnagar (City), by raising multiple contentions.
3. A draft amendment, later on, came to be submitted for introducing certain other incidental reliefs and presented on 26.11.2020. The reliefs sought in the petition and the draft amendment deserve to be quoted hereunder :
"(A) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction by quashing and setting aside the impugned order dated 14.10.2020 passed by the Election Officer and Prant Officer, Jamnagar (City)- respondent no.3 (Annexure-Z) for the reasons stated in the memo of the petition, in the interest of justice;
(B) Pending admission, hearing and final disposal of the above Special Civil Application, Your Lordships may be pleased to stay the operation, implementation and execution of the impugned order dated 14.10.2020 passed by the Election Officer and Prant Officer, Jamnagar (City)- respondent no.3 (Annexure-Z), for the reasons stated in the memo of the petition, in the interest of justice;
(C) To grant ad-interim relief in terms of Para.50 (B) hereinabove for the reasons stated in the Memo of Petition.
(D) The Hon ble Court may kindly be pleased to grant any other appropriate relief as the nature circumstances of the case may require.
"50-BB. Your Lordships may be pleased to issue appropriate writ, order or directions and be pleased to quash Page 2 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT and set aside the election programme and also to quash and set aside the provisional voters list published by the Deputy Collector and Election Officer, respondent no.3 herein dated 23.11.2020 and all further consequential orders / steps, as the same is illegal, erroneous and against the provisions of law, for the reasons stated in the memo of the petition and in the interest of justice;
50-CC Pending admission, hearing and final disposal of the present petition, Your Lordships may be pleased to stay the election programme and also the provisional voters list published by the Deputy Collector and Election Officer, respondent no.3 herein dated 23.11.2020 and all further Consequential orders / steps, as the same is illegal, erroneous and against the provisions of law, for the reasons stated in the memo of the petition and in the interest of justice."
4. So far as Special Civil Application No.13298 of 2020 is concerned, the same is filed by the bank for claiming following reliefs:
(A) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction by quashing and setting aside the impugned order dated 14.10.2020 passed by the Election Officer and Prant officer, Jamnagar (City)- respondent no.3 (Annexure-DD) for the reasons stated in the memo of the petition, in the interest of justice;
(B) Pending admission, hearing and final disposal of the above Special Civil Application, Your Lordships may be pleased to stay the operation, implementation and execution of the impugned order dated 14.10.2020 passed by the Election Officer and Prant officer, Jamnagar (City)- respondent no.3 (Annexure-DD) for the reasons stated in the memo of the petition, in the interest of justice;
(C) To grant ad-interim relief in terms of Para 46(B) hereinabove for the reasons stated in the Memo of Petition.
(D) ................
5. Since the facts under challenge are almost similar and the Page 3 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT bank has, in a subsequent petition, chosen to support the petition filed by 10 Mandlis, the facts are taken from Special Civil Application No.13286 of 2020, by treating the same as lead matter. These 10 petitioners have approached the Court by asserting that they are primary cooperative societies affiliated with Jamnagar District Cooperative Bank Ltd. (for short 'the bank") and are the members since about 50 years. These societies i.e. petitioners are registered originally being part of Jodiya Taluka which was falling within the limits of Jamnagar District. These societies are getting financial assistance from the Bank and availing various facilities like KCCC, small term loan, medium term loan and long term loan and other incidental assistance being provided by the bank.
5.1 It is the case of the petitioners that the Government of Gujarat on 15.8.2013, bifurcated certain Talukas from Jamnagar District, Rajkot District and Surendranagar District and has constituted a new district i.e. Morbi District. According to the petitioners, some 12 villages of Jodiya Taluka have been included in Morbi District and as such, now these petitioners consisting of and being part of those villages, are now under Morbi District. According to the petitioners, the area of operation of the bank is entire Gujarat as per the bye-laws of the bank and as such, the bifurcation of new district even if taking place, the petitioners are continued to be members of the bank. On account of this, the bank had approached the Reserve Bank of India for including the area which has gone in Morbi Taluka from Jamnagar District as an area of operation including the new district, namely, Devbhoomi Dwarka and as per the request of the bank, the Reserve Bank of India has amended the licence of the bank on 7.6.2018.
5.2 It is further the case of the petitioners that in the year 2015, the election of the bank had taken place and the societies were Page 4 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT included at a relevant point of time for the purpose of election of the bank and these petitioners did participate in the said election since they continued to be the members of the bank. According to the petitioners, in the election of 2015, all these petitioners societies were included in the voters list of Jodiya constituency by Election Officer and their inclusion was challenged by one of the persons, namely, Shri Hasmukh Paramshi Gambhava by way of Special Civil Application No.2169 of 2015 and the said petition came to be dismissed. The reason for dismissal was, according to the petitioners, contained in Para.11 of the said decision, since right to vote at the election to managing committee of the specified society is not governed by the contract between specified society and its members but, is governed by statutory Rules of 1982, precisely Rule 4(1) of the Rules. Hence, only those persons who are members of specified society on the date of drawing up of accounts of the year immediately preceding the year in which election is due and are entitled to be included in the provisional list. It is further the case of the petitioners that on 9.12.2019, the bank wrote a letter to Deputy Collector to kindly hold the election as the term of the managing committee is expiring. According to the petitioners, the term has expired on 20.4.2020. But since the Deputy Collector has not taken steps to hold the election, though due, one Shree Fadsar Seva Sahakari Mandli Ltd. had approached this Court by way of Special Civil Application No.22742 of 2019 relying upon the decision delivered by this Court as well as that of Apex Court reported in (2012) 4 SCC 483. The said petition was basically for the purpose of holding election of Board of Directors of the bank, whose term is going to expire on 29.4.2020 and pending the petition, a relief was sought for appointment of custodian under Section 74D of the Gujarat Cooperative Societies Act, 1961 (for short 'the Act of 1961"). In this petition, this Court was pleased to issue notice in Page 5 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT which the District Registrar filed an affidavit which, according to the petitioners, is misconceived on the count that the bank has forwarded proposal only on 22.7.2020. According to the petitioners, the term of the managing committee of the bank has been extended by issuing Notification on 24.4.2020 and by virtue of further Notification issued in July, 2020 and by way of additional Notification dated 258.2020, the term of the managing committee has been extended upto 31.12.2020.
5.3 It is the case of the petitioners that during pendency of petition of Shree Fadsar Seva Sahakari Mandli Ltd. i.e. Special Civil Application No.22742 of 2019, the Vice Chairman of the bank Shri Pravinbhai Hemantshi Jala, with an intention to delay the election process, had filed the petition being Special Civil Application No.23321 of 2019 for seeking relief to the effect to quash and set aside the action on the part of respondent authorities in initiating the process of election of members of managing committee of the bank and incidental relief is sought for declaration that term of elected members of the managing committee has not expired and the election has not become due. Simultaneously, by adding relief (BB), the provision of Section 74(C)(2)(i) and 74(C)(2)(ii) of the Act of 1961 be declared as arbitrary and violative of Article 14 of the Constitution of India and in the meantime, sought a relief to restrain the respondent authorities from continuing with the process of election. According to the said petitioners, the term of managing committee of Chairman and Vice Chairman should be counted from the date of their election and as such, the petition came to be filed. Both the aforesaid petitions i.e. SCA No.23321 of 2019 and 22742 of 2019 along with CA No.1 of 2020 for being joined as party in SCA No.22742 of 2019 came up for consideration before the Division Bench of this Court (Coram : Hon'ble Mr.Justice Vikram Nath, CJ & J.B.Pardiwala, J.), who, by way of common judgment and order, Page 6 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT disposed of the petitions vide judgment dated 27.7.2020 and directions have been given in SCA No.23321 of 2019 to hold the election of managing committee of the bank within 4 months from 1.8.2020 and restrained the Government from appointment of custodian till the elections are over and simultaneously, restrictions have also been imposed that till fresh committee is elected, the present dispensation of managing the affairs of the bank would continue, with rider that no policy decision shall be taken by the present managing committee. This common judgment dated 20.7.2020 is challenged by Vice Chairman of the bank, Shri Pravinshi Hemantshi Jala before the Apex Court by preferring SLP (C) No.10512 of 2020, wherein the Apex Court was pleased to issue notice but, no stay has been granted on 16.9.2020.
5.4 It is the case of the petitioners further that the bank has thereafter prepared a list in view of Bye-law No.13 and invited objection under Rule 3A of the Rules of 1982. According to the petitioners, it is the duty of the Chief Executive Officer i.e. (CEO) of the bank to prepare constituency and decide the objection and then, forward the same to the Deputy Collector for approval of the constituency under Rule 3A(7) of the Rules. Since this is a specified society having area of more than one village, 14 constituencies have been finalized taluka wise. The notice for inviting objection was published by the bank on 07.01.2020 and the same was placed on notice board as per the requirement. On 08.01.2020, the Bank also intimated the provisional Matdar Mandal to the Deputy Collector along with the entire procedure and in all 734 Societies have been forwarded this list of Matdar Mandal inviting objections. On 21.01.2020, the District Registrar wrote a letter stating the Bank that it has to prepare the voters list as on the date of drawing of the account of the year, immediately preceding the year in which the election is due. According to the petitioners, Rule 4(1) has been Page 7 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT amended on 10.08.1987 by substituting the words 'immediately preceding the year in which the election is due', by incorporating 'in which such election is due' and as such, according to the petitioners, though the District Registrar is well aware and conversant with the provisions, has willfully ignored the notification of Rule 4 as amended and insisted for preparation of voters list on the basis of old Rules. On 24.01.2020, the District Registrar, forwarded letter to the bank that he has received some objections against 13 Societies of Jodiya constituency. The Bank on 30.01.2020, replied to the same by indicating that letter written is not correct and by virtue of amendment to Rule 4(1) of the Rules, the Bank has to prepare voters list who are members as on the date of drawing of the accounts of the year in which the election is due. The Executing Committee of the Board of Directors of bank on 23.02.2020 has decided the objections raised by those 13 societies against the present petitioners and the objections have been overruled and the same came to be communicated and then final list of constituency i.e. Matdar Mandal has been prepared and also prepared the voters list and forwarded to the District Collector, Deputy Collector, Election Officer and District Registrar with all necessary rojkam on 19.03.2020.
5.5 It is further the case of the petitioners that the election has been postponed by the Government by issuing Notification on 24.03.2020 on account of COVID-19 pandemic situation and then on 30.06.2020, the Government of Gujarat issued one another notification for giving relaxation and directing societies to hold the election of specified societies by maintaining SOP as published by the Central Government and by maintaining social distance in the election process. Once again, another notification came to be issued on 04.07.2020 indicating that election of primary co-operative societies should be held after obtaining prior permission from the Page 8 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT District Administration. Subsequently, the bank has called for resolution of delegated person of the Society to eligible to cast vote and the said details have been forwarded to 702 Societies by Registered Post A.D. letter on 02.07.2020. Then, it appears that against the decision of overruling the objection date 23.02.2020 of Executing Committee of the bank, some five primary co-operative societies filed writ petition being Special Civil Application No.8980 of 2020 with a relief that the action of respondent No.4 of that petition, in deciding list of constituency for the election of the managing committee of the bank is illegal and also prayed to set aside the communication dated 19.03.2020 and further relief is sought to the effect to set aside the decision of respondent no.4 Bank in considering 31.3.2020 as a relevant date for preparation of voters list instead of 31.3.2019. So, essentially for setting aside the decision on objections for determination of relevant date, said petition appears to have been filed. In the said petition, only notice came to be issued on 4.8.2020 and these very petitioners societies i.e. present petitioners have filed an application for being joined as party being Civil Application No.1 of 2020. The bank filed a detailed reply in the said petition.
5.6 According to the petitioners, the Deputy Collector has not finalized the list of constituency i.e. Matdar Mandal submitted by bank on 19.3.2020 and by virtue of Rule 3(A)(9), the Deputy Collector and Election Officer has to approve the same and only then, next step of preparing the provisional voters list would reach. However, the bank has started the process of preparing provisional list under Rule 4 calling the necessary resolution authorizing representative, who is eligible to cast vote in the election of managing committee of the bank. The bank, in turn, has already informed the Deputy Collector on 7.7.2020 that it has already prepared the provisional list and has called the resolution from Page 9 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT society authorizing representatives to cat their vote and solicited certain guidance for holding election as per the Government Notification dated 4.7.2020, keeping in mind the COVID-19 situation. The petitioners have further asserted in the petition that on 22.7.2020, the bank has forwarded the provisional voters list of 4 constituencies in 5 sets. Thereafter, the Deputy Collector and Prant Officer wrote a letter to bank on 19.8.2020 and one of the issues is that some of the villages have now under the revenue limits of Jodiya Taluka, however, 12 societies have been included in Matdar Mandal of Jodiya Taluka and as such, requested to produce documentary evidence and then, a reminder has also been sent by Deputy Collector. On 27.8.2020, the bank replied to Deputy Collector and pointed out about the particulars of 12 villages, though are included in Morbi District are allowed to continue with the bank. Accordingly, the licence of the bank has been amended. The Deputy Collector, according to the petitioners, has not called the societies and directly called upon the bank for certain details including one of the issue was regarding Jodiya Taluka Primary Cooperative Societies. To this communication of 5.10.2020, the bank has given reply on 8.10.2020 to Deputy Collector that from Jamnagar District, a new district i.e. Devbhoomi Dwarka has been carved out in which Bhanvad, Kalyanpur, Jamkhambhaliya, and Okha Mandal which were originally part of Jamnagar, have gone in Devbhoomi Dwarka and though separate revenue districts of these 4 talukas, still, included in voters list and against that, there is no objection by Deputy Collector on account of some political interference of local MLA, who happened to be the Chairman of APMC. It has been pointed out by the bank to Deputy Collector that when Devbhoomi Dwarka, a new district has been set up and constituted by the Government, there are 4 talukas / societies continued with the bank and are voters and as such, why these Page 10 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT petitioners societies of Jodiya taluka may not be included. Instead of these details, according to the petitioners, the Deputy Collector and Election Officer without hearing the petitioners societies, whose names were included in the voters list prepared by the bank under Rule 4(1) of the Rules, has deleted the name of the petitioners against the provision of law and the election program has also not been issued till date for inviting objections against exclusion or inclusion of the names of the societies. This communication dated 14.10.2020 is, therefore, made the subject matter of challenge on multiple issues raised in the petition by present petitioners for claiming the reliefs as stated herein above.
5.7 Simultaneously, when this matter came up for consideration before the Co-ordinate Bench on 29.10.2020, Mr.B.T.Rao, learned advocate, for the petitioners pointed out about pendency of another petition filed by the bank itself being Special Civil Application No.13298 of 2020. Accordingly, a note was moved in the Registry to take both the matters together. Hence, it appears that both these petitions; one filed by the present petitioners and another filed by the bank, have been clubbed and placed for hearing before this Court.
5.8 Since, substantially, the challenge and the ultimate grievance is same of the bank, it was requested by all the learned advocates appearing for the respective sides to treat Special Civil Application No.13286 of 2020 as a lead matter and arguments have been canvassed in the said petition, in substance.
5.9 With the aforesaid background of facts situation, the Court has heard Mr.B.S. Patel, learned Senior Advocate appearing for Mr.B.T. Rao, learned advocate representing the present petitioners Page 11 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT of lead matter and Mr.Rutul Desai, learned advocate appearing for the petitioner - bank, who filed Special Civil Application No.13298 of 2020 and on behalf of the respondents, Ms.Manisha Lavkumar Shah, learned Government Pleader assisted by Ms.Aishwarya Gupta, learned Assistant Government Pleader has represented the respondent - authority and Mr.Mihir Joshi, learned Senior Advocate assisted by Mr.Dipen Desai, learned advocate appearing on behalf of respondent nos. 5 to 10.
6. Shri B.S.Patel, learned Senior Advocate with Mr.B.T. Rao, learned advocate for the petitioners, has submitted the written submissions. The same are reproduced hereunder :
"A. DUE DATE:
1. Rule-4(1) of the Gujarat Specified Cooperative Societies Elections to Committees Rules, 1982 (hereinafter referred to as 'the Rules, 1982' for the sake of brevity) reads as under:
4. Provisional list of voters.-
(1) A provisional list of voters shall be prepared in Gujarati by every society for the year in which general election is due to be held. Persons who are members as on the date of drawing up the accounts of the year fin which such election is due] shall be included in the provisional list. If different constituencies are provided in the bye-laws, the names of voters shall be arranged constituency-wise as laid down in the bye-laws."
B. UNDISPUTED FACTS :
1. That the term of the board of directors to have been expired on 28.04.2020. If we consider as per the notification dated 24.04.2020 (pg. 124) and notification dated 25.08.2020 (pg. 126), the term is extended upto 31.12.2020. In that event, the election is required to be held on or before 31.12.2020. Both the notifications clearly revealed that exemption has been granted under Section 161 of the Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as the Act, 1961' for the sake of brevity) for the provisions of Section 74-C(2)(4) of the Act. The respondents cannot take up their case on the basis of Section 74-C(4) which has already been exempted by the notifications.Page 12 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020
C/SCA/13286/2020 JUDGMENT
2. Alternatively, it is submitted that the actual election was due on or before 28.04.2020. The identical provisions were there, more particularly, Section 73-G of the Maharashtra Cooperative Societies Act and Rule-4 of the Maharashtra Specified Cooperative Societies Elections to Committee Rules, 1971, the same have been considered by the Hon'ble Apex Court in the case of Ramchandra Ganpat Shinde and another v. State of Maharashtra and others reported in (1993) 4 SCC
216. Rule-4 of the Maharashtra Rules is on page-222 in para- 4 of that judgment, where the identical wordings are there, while considering the same in paragraph-7, the Hon'ble Apex Court has held what is relevant is reproduced herein:
"...Therefore, before the expiry of the term of the committee the general election to the Managing Committee is due. Black's Law Dictionary, sixth edition at. p.500, meaning of the words 'due date' has been stated thus: In general, the particular day on or before which something must be done to comply with law of contractual obligation". When Section 73G. provisions in Chapter XIA and the bye-laws read with Rule 4 envisage that the election to the managing committee should be conducted before the expiry of the term, the Society has been enjoined under Rule 4(1) to prepare the provisional voters list of the members as on June 30th of the year immediately preceding the year" in which such general election is due to be held and submit the same to the Dist. Collector.."
3. The Hon'ble Supreme Court has been interpreted the exact date on which the election is due. If we consider, Rule-4 of the Election Rules, 1982 as quoted above clearly reveals that the persons who are the members as on the date of drawing up the accounts in the year, meaning thereby, if election is due in 2020, last date of the accounting year is 31.03.2020, while the respondent Election Officer has declared the date as 31.03.2019.
4. Section 27(3) of the Act, 1961 reads as under:
"27. Right to vote :
(3). No person shall exercise the right to vote at an election of a member of a committee in a financial year unless he is a member of the society for the whole of the financial year preceding the financial year in which the election is being held:Page 13 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020
C/SCA/13286/2020 JUDGMENT Provided that no member society of a federal society shall exercise the right to vote at an election of a member of a committee unless such society has its last accounts audited in Class A, B or C."
5. According to the above rules, last preceding year's last date of the financial year has become a relevant date/ due date. The same is introduced on 10.04.2015. Therefore, Rules, 1982 have to be read conjunctively and harmonious construction reveals that the election is to be considered on the last date of the financial year in which the election is held as Section 27(3) puts a specific provision "the year in which the election is being held". Even the Hon'ble Division Bench of this Hon'ble Court in the case of Don Juth Seva Sahakari Mandali Limited through Chairman v. State of Gujarat through Secretary reported in 2011 (2) GLR 1579, whereby, the Hon'ble Court has held that even though the election was due long back which was in the year 2010, the members upto 31.03.2011 has been directed to be included in the voters list. The relevant para-8 reads as under:
"8. Since, the election would be held after 1-4-2011 and at any time between 1-4-2011 to 31-3-2012, the voter list as on 31-3-2011 would be valid voter list and the names of members of registered societies whose names find place on 31-3-2011, are eligible to be included in the provisional voter list and their names could not be struck off on the objection filed by on the ground that the Petitioner-societies were not registered/enrolled on 31-3-2010 or they were not members on 31-3-2010. Therefore, the view taken by the Election Officer cannot be upheld as Petitioner-societies were registered/enrolled on or before 31-3-2011 and elections to be held after 1-4-2011 their members would be valid voters."
The aforesaid decision has been challenged before the Hon'ble Supreme Court by the State of Gujarat by way of Special Leave to Appeal No. 15602-15607 of 2011, wherein, the State of Gujarat has withdrawn the said Special Leave to Appeal and accordingly the Hon'ble Supreme Court has vacated the interim order dated 08.07.2011 and disposed of the appeals on 30.09.2016. Therefore, the impugned order passed in the case of Don Juth Seva (supra) by the Hon'ble High Court has attained finality.
Page 14 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020C/SCA/13286/2020 JUDGMENT
6. Section 145(C) of the Act, 1961, on which the reliance is placed, which clearly reveals the word 'as far as possible'. The said phrase does not make it mandatory, as per the law settled by the Hon'ble Apex Court in the case of (2011) 7 SCC 639, more particularly, para-32 and 34 are relevant.
7. Subsequently, Section 74C(4) of the Act also provides that the election is to be conducted on or before the expiry date of the board of directors. In any event, originally the date was 28.04.2020 and now because of the exemption it is upto 31.12.2020 and where election is held in January, 2021, it is obvious that the members who are be enrolled till 31.03.2020 are required to included in the voters list. The submissions made on behalf of the respondents relying upon the Section 145-C as well as Section 74-C(4) of the Act are misplaced, in view of the government notifications and actual due date in the judgment delivered by the Hon'ble Supreme Court and also the judgment delivered by this Hon'ble High Court, the due date is 31.03.2020.
C. 12 villages of Jodiya Taluka:
1. The reliance is placed by the other side on the application for registration (pg. 97 is relevant), application is not binding. Bye-law (Page-52) reads as under:
AREA OF OPERATION:
The area of operation of the Bank will be the whole State of Gujarat. Its business may be extended to the talukas of the Districts of the State.
When byelaw provides the area of operation is in the entire Gujarat State and it clearly provides that Talukas and Districts, means it is in plural sense. It is not to say that it confines only Jamnagar District. (Pg.-52).
2. While other talukas which are not now part and parcel of Jamnagar District is also in the voters list. Therefore, the submissions on behalf of respondents are misplaced.
3. It is pertinent to be considered that the Rule-3A(8) and (9) of the Rules, 1982 reads as under:
"Rule-3A. Delimitation of constituencies for purpose of election.Page 15 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020
C/SCA/13286/2020 JUDGMENT (8) Where the area of operation of a society is in more than one village, the number of constituencies shall be equal to the total number of seats excluding two seats reserved under sub-section (1) of section 74-B. (9) Notwithstanding anything contained in these rules and the bye-laws of the society, where the elections to the members of any Committee are scheduled to be held before the ending of the accounting year of the society, the delimitation of the constituencies shall be made by the Collector prior to the publication of the list of voters."
4. Once byelaws provided constituency, the Collector has no power for delimitation, obviously to decide anything under Section 3A(8) and (9). The petitioners are relying upon the decision in the case of Rajkot District Cooperative Bank v. State of Gujarat and others reported in (2015) 13 SCC 401, para-19 is most important for consideration, where the Hon'ble Apex Court has clearly held that .... if not so delimited by the society, of its own, it would be required for the Collector to exercise his power under sub-rule(9) of Rule-3-A of the Rules for the delimitation of the constituency.."Admittedly, constituency has been provided in the bye-law, therefore, the Collector cannot exercise the powers under Rule-3A(8) and (9). Hence, the order is without jurisdiction.
5. As far as bye-law No. 30 (pg.-67) is concerned, misleading submission has been made by the otherside which clearly provides in bye-law No. 30(i)(d) which reads as under:
"30. (i) Constitution of Board of directors:
The Management and affairs of the Bank shall be entrusted to a Board of Directors which shall consist of 18 members, excluding State Government nominees as under:
(d) One Director representing societies other than those mentioned in Clauses (a), (b) and c."
6. It does not refer to a class of society, but it says the societies other than mentioned in clause-a, b and c. So if 12 societies which have gone in Morbi District outside the revenue limits of Jamnagar District and included Jodiya taluka, obviously they would not be covered according to the Page 16 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT respondents. It is most pertinent to be considered that Section 27of the Act provides right of member to vote, that right cannot be taken away by the byelaw and if the Collector finds that byelaws does not cover any society, he has to make a delimitation which would include all voters. The two judgments on which the reliance is placed clearly provides that without amending the byelaws, voting right cannot be given as they gone outside the revenue limits of the area of operation. In the present case, the area of operation is Gujarat State. I request the Hon'ble Court to kindly consider the page-266, where the para-15,17, 18 and 19 of Siddhpur judgment is quoted and also page-272, para-30, as the byelaw had been amended subsequent to the due date.
7. It is most shocking that the order passed by the Reserve Bank of India is considered to be limited under the Banking Regulations Act and then NABARAD Act is referred. The same is produced (Pg. 98-99) with a view to apprise the Hon'ble Court regarding existence of 12 villages where the Bank is operating but if the respondents are correct and if we are governed by the Cooperative Societies Act under the provisions of Section 74 of the Act, the managing committee is referred to the constituency as per the provisions of the Act, Rules and byelaws, then byelaws provide area of operation is entire Gujarat State.
8. It is pertinent to be considered that in Gujarat State, there are total 33 districts and only 17 District Cooperative Banks are functioning. In any case, right to vote is covered as per the area of operation of the society.
D. ALTERNATIVE REMEDY.
1. The matter could not be heard for one or other reason, but it was a clear understanding which was conveyed in no uncertain terms that anything which is done shall be subject to the outcome of the petition. Even the order passed by the respondent Election Officer on 23.11.2020 clearly reveals that the same is published subject to the outcome of the Special Civil 13286 of 2020 and Special Civil Application No. 13298 of 2020. At this juncture, I invite the kind attention of this Hon'ble Court on the mischief made in the notice / order dated 23.11.2020 there is a specific mention that after the declaration of the final voters list, notification under Rule-16 shall be published, while the matter was adjourned for one or other reason and notification under Rule-16 has issued on Page 17 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT 04.12.2020. It is the subject to the outcome of the petition and issued without the permission of this Hon'ble Court, even though the Government was under the notice of this Hon'ble Court. In any case, for the cause, the matter is filed cannot be considered under Section 145-U of the Act. Rules-82 of the Election Rules, 1982 reads as under:
"82. Grounds for declaring election to be void.
- If the (Tribunal is of opinion:
(a) that on the date of his election a returned candidate was not qualified, or was disqualified to be chosen to fill the seat under these rules; or
(b) that any corrupt practice has been committed by a returned candidate or his Election agent or by any other person with the consent of a returned candidate or his Election Agent; or
(c) that any nomination paper has been improperly rejected; or
d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected-
i) by the improper acceptance of any nomination, or
ii) by any corrupt practice committed in the interest of the returned candidate by an agent other than his Election Agent; or
(iii) by the improper reception, refusal or rejection of any Vote or the reception of any vote which is void: or
iv) by any non-compliance with the provisions of the Act or any rules made thereunder, the Tribunal shall declare the election of the returned candidate to be void."
2. In any case, if the petitioner societies are not in the voters list, they cannot file election petition. Rule-75 (1) of the Rules, 1982 reads as under:
"75. Presentation of election petition.
1) An election petition calling in question any election may be presented by any candidate or any voter within two months from the date of declaration of the result of the election."Page 18 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020
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3. It is pertinent to consider that earlier in the case reported in (2001) 8 SCC 509, the Hon'ble Apex Court has held that preparation of the voters list is part of election process and Court may not interfere. The Hon'ble Apex has considered this judgment in the case reported in (2005) 7 SCC 181, more particularly, para-9 which reads as under:
"9. We are unable to uphold the contention. In Sant. Sadguru Janardan Swami- this Court had an occasion to consider the relevant provisions of the Act and the Rules. Referring to Section 144-X of the Act, the Court observed that preparation of list of voters is one of the stages of election. It is true that according to this Court, normally the High Court would not interfere in exercise of powers under Article 226 of the Constitution at the stage of preparation of list of voters but such action must be in accordance in law."
4. If the voters list is not in accordance with law, the power under Article 226 of the Constitution of India is required to be exercised.
5. The same judgment has been considered by the Division Bench of this Hon'ble Court in the case of Shrutbandhu H. Popat v. State of Gujarat reported in (2007) 3 GLR 1942, paras-27 to 29 reads as under:
"(27.) We may now deal with the decision of the Full Bench heavily relied upon by Mr. B. S. Patel for the APMC in Daheda Group SevaSahakariMandali Limited (supra) decided on 27.4.2005. The following questions were referred to the Full Bench in the context of elections to the APMCS and the scope of Rule 28 of the APMC Rules constituting the Election Tribunal for deciding disputes relating to elections to APMCs:
[I. Whether a person whose name is not included in the Voters' List can avail provisions of Rule 28 of the rules by filing election petition?] [II. Whether the remedy under Rule 28 can be termed to be efficacious remedy?] III. Whether a petition under Art. 226 of the Constitution of India is maintainable in an election process challenging an order issued by the Election Page 19 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT Officers i.e. inclusion or deletion of the names of the voters in the Voters' List?] After considering various decisions of the Apex Court and also the decisions of various Benches of this Court, the Full Bench answered the Reference as under:
[I. A person whose name is not included in the voters' list can avail benefit of provisions of Rule 28 of the Rules by filing Election Petition.
(II. As the authority under Rule 28 has wide power to cancel, confirm and amend the election and to direct to hold fresh election in case the election is set aside, remedy under Rule 28 is an efficacious remedy] III. Even though a petition under Art. 226 of the Constitution of India is maintainable though alternative remedy is available, the powers are to be exercised in case of extraordinary or special circumstances such as where the order is ultra vires or nullity and/or ex facie without jurisdiction. The exclusion or inclusion of names cannot be termed as extraordinary circumstances warranting interference by this Court under Art. 226 of the Constitution of India and such questions are to be decided in an Election Petition under Rule 28 of the Rules.
(28.) Reading the entire decision of the Full Bench reveals that the question in the context of which the Bench Full was called upon to consider the controversy about maintainability of the petition was whether a member of the Managing Committee of a particular cooperative society was entitled to vote in his capacity as a member of the managing committee of such cooperative society and not merely by virtue of inclusion or deletion of his name in/from the voters' list. The contention of the authorities in the said case was that the election petition under Rule 28 provides remedy for resolution of all facets of the dispute as to whether the name of a person being the member of the Managing Committee of a particular cooperative society should be permitted to participate in the election if he ceases to hold the post on the date of the election programme. Similarly the question whether a particular agricultural credit or not would be ordinarily be a disputed question of fact. There cannot, therefore, be any dispute with the Page 20 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT proposition that ordinarily the exclusion or inclusion of names from/in the voters' list can be challenged in an election petition under Rule 28 of the Rules, after the elections are held. But the Full Bench also held that the powers of this Court under Art. 226 of the Constitution may be exercised in case of extraordinary or special circumstance such as where the order is ultra vires or nullity and/or ex facie without jurisdiction. The Full Bench also followed the principles laid down by the Apex Court in Election Commission of India V/ s. Ashok Kumar, 2000 (8) SCC 216 and MandaJaganath V/s. K SRathnam, AIR 2004 SC 3600 laying down that any decision in the election process is open to judicial review on the ground of mala fide or arbitrary exercise of powers and that special situation justifying exercise of writ jurisdiction would mean correcting an error having the effect of interfering in the free flow of the scheduled election or error having the effect of hindering the progress of election.
(29.) After the above decision of the Full Bench rendered on 27.4.2005, in Pundlik v. State of Maharashtra, decided on 25.8.2005 and reported at 2005 (7) SCC 181, the Apex Court held that though preparation of list of voters is one of the stages of election and that normally the High Court would not interfere in exercise of powers under Art. 226 of the Constitution at the stage of preparation of list of voters, but such action must be in accordance with law. In the said decision, the Apex Court distinguished their decision in Shri SantSadguruJanardan Swami Sahakari Dugdha UtpadakSantha V/s. State of Maharashtra, 2001 (8) SCC 509. In Shri SantSadguru's case objections against publication of provisional electoral roll of the Society were filed which were considered by the Collector and disposed of. The final electoral roll was published on 2.7.1999. Thereafter the petitioner filed a writ petition in the High Court for quashing the election programme and the Apex Court held that the High Court should not stay continuation of the election process even though there may be some alleged irregularity or breach of the Rules while preparing the electoral roll.
However, in the Pundlik case, the original petitioner had taken immediate action on receiving the fax message from the Collector."
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6. The Full Bench judgment has been considered to be implied overruled. In that event and when the election programme is subject to the outcome of the petitions and the respondent Election Officer is trying to overreach the process of law, on the day on which the arguments have been advanced for the commencement of election process, declared the election programme, even though he had agreed as clearly observed that the same shall be published after finalization of the voters list.
7. The order is passed in breach of the principles of natural justice. The 12 societies have lost their right to contest the election and to elect their representatives; so admittedly, there is prejudice to their rights. The submissions of objections as canvassed are available but are in vain. The Election Officer cannot review on its own order and secondly, when the Collector himself has appeared before this Hon'ble Court on pg. 280 supported the said decision by filing an affidavit, no useful purpose can be served in submitting objections to the authorities. The right to consider the objections, after hearing the otherside, is a mandate of the legislature in Rule-6 would be defeated which clearly provides deciding the claims and objections, the same right cannot be taken away by the authorities.
8. The order in question is passed under Rule-3A (8) and (9). Rule-3A (9) provides that the delimitation of the constituencies shall be made by the Collector prior to the publication of the list of voters. The "list of voters" is defined under Rule-2(f) of the Election Rules, 1982 which reads as under:
"2. Definitions: In these rules, unless the context otherwise requires-
(f) In "List of voters" means the list of voters as finalized in accordance with sub-rule(4) of Rule 6."
9. In view of the same, without following the procedure under Rule-4, 5 and 6 of the Rules, 1982, the decision has been taken that too in the breach of principles of natural justice. Hence, it is required to be quashed.
10. The learned Senior Advocate Mr. Mihir Joshi has relied upon the judgment in the case of Dharampal Satyapal Limited Deputy v. Commissioner of Central Excise, Gauhatri and others reported in (2015) 8 SCC 519, if we considered the judgment carefully, para-42 reads as under:
Page 22 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020C/SCA/13286/2020 JUDGMENT "42. So far so good. However, an important question posed by Mr.Sorabjee is as to whether it is open to the authority, which has to take a decision, to dispense with the requirement of the principles of natural justice on the ground that affording such an opportunity will not make any difference? To put it otherwise, can the administrative requirement of issuing notice by itself deciding that no prejudice will be caused to the person against whom the action is contemplated? Answer has to be in the negative. It is not permissible for the authority to jump over the compliance of the principles of natural justice on the ground that even if hearing had been provided it would have served no useful purpose. The opportunity of hearing will serve the purpose or not has to be considered at a later stage and such things cannot be presumed by the authority. This was so held by the English Court way back in the year 1943 in the case of the General Medical Council v. Spackman(22). This Court also spoke in the same language in the case of the Board of High School and Intermediate Education, U.P. &Ors. V. KumariChittra Srivastava & Ors./23), as is apparent from the following words:
"7. The learned counsel for the appellant, Mr.C.B. Aggarwal, contends that the facts are not in dispute and it is further clear that no useful purpose would have been served if the Board had served a show cause notice on the petitioner. He says that in view of these circumstances it was not necessary for the Board to have issued a show cause notice. We are unable to accept this contention. Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority's satisfaction that the person to be penalised has no defence but on the nature of the order proposed to be passed."
11. In view of the above ratio, the Election Officer cannot decide that opportunity of being heard would be necessary or not.
12. In the present case, the decision has been taken by the Election Officer, which is ex-facie illegal, void and as per the law laid down by the Hon'ble Apex Court in the case reported in (1998) 8 SC 1 (Whirlpool v. Registrar of Trade Mark) which Page 23 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT clearly laid down that the alternative remedy is not barred and petition is maintainable.
13. The reliance is placed on the judgment delivered by the Hon'ble Apex Court in case of Rajkot District Cooperative Bank[(2015) 13 SCC 401] (supra) as earlier 1 pointed out that in view of the law laid down by the Hon'ble Apex Court in para-19, the constituencies have been made out by the society itself, the Collector has no power of delimitation. Para- 23 of the said judgment reads as under:
"23. Further, the elections to either the Managing Committee or Board must be held democratically by giving representation to all its members, as stated in the preamble of our Constitution, which is held to be the basic feature of the Constitution by the constitutional Bench of this Court in the cases of Kesavananda Bharati Sripadagalvaru V. State of Kerala/7 and Kuldip Nayar v. Union of India/8). Under Article 13 (2) of the Constitution of India, Rules are also regarded as laws. However, the Rules and laws framed by the State Legislatures and the appropriate government cannot run parallel with the principles of the Constitution and the statutory objects of the Co-operative Societies Act cannot be disregard as it would defeat the purpose of Section 243ZK of the Constitution of India (Ninety- Seventh Amendment) Act 2011, inserted as per the 97 th Constitutional Amendment, which provides for election of the members of the Managing Committee or Board. If the rules provide that not more than 7 representatives can be elected from a specified Co- operative Society to the Board or Management Committee, then it is the duty of the societies to adhere to it and not exceed the specified number. Thus, the bye laws of a Co-operative Society, in order to achieve the constitutional object, must be brought at par with the laws and statutory provisions of the Societies Act. They cannot override the provisions of State or Central laws."
14. In view of the above ratio, when 12 societies are the members and entitled to cast their votes, the respondent authorities have no powers to take away the said rights from the society, which right has accrued in favour of the petitioner societies.
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15. The judgment which has been relied upon reported in (1987) Suppl. SCC 512 in the case of Gujarat University v. N.U. Rajguru, after considering ail laws, lastly, the Hon'ble Supreme Court said in case of Kundlik (supra) that the Court can interfere at the time of preparation of the voters list in the specified society.
16. In an identical case, because of the bifurcation of the Talukas, some villages were included in newly formed Lakhni Taluka cannot be included, such contention was raised. Therefore, the issue has come before the Hon'ble Court. This Hon ble Court in Special Civil Application No. 13419 of 2015 in para-8 clearly held that it is upon the Collector to form the constituencies, so that no voter can be without voting right. In the said case, it was clearly observed that under the Election Rule-3A(9), there is a clear statutory provision that notwithstanding anything contained in the byelaws, meaning thereby for forming the constituencies, so that all eligible members can be included in the voters list and it is the duty of the Election Officer to confirm the same and do the same accordingly. In the present case, the Election Officer instead of forming the constituencies, passed the order not to include the societies of twelve villages, which is otherwise in the area of the operation. It is also required to be considered that Morbi District has not got new district bank i.e. Morbi District Cooperative Bank. The said matter has been carried in the Letters Patent Appeal No. 1189 of 2015 before the Hon'ble Division Bench and the Hon'ble Division Bench in para-11 of the judgment clearly upheld the law settled the Hon'ble Court, eventhough it is binding upon the election officer. The said decision is squarely covered in the facts of the present case.
17. As far as law laid down by the Hon'ble Apex Court in the case of Ispat Industries Limited v. Commissioner of Customs reported in (2006) 12 SCC 583, if the order is in breach of principles of natural justice and without jurisdiction, which is in the present case, the petition is maintainable and the petitioner societies are not only members, but are operating in the area of operation of the Jamnagar District Cooperative Bank Limited since number of years and they have got right in the management of the bank.
In view of the aforesaid peculiar facts and circumstances of the case, impugned order is required to be quashed and set aside and the petition is required to be allowed in the interest of justice."
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7. So far as the petition filed by the bank i.e. Special Civil Application No.13298 of 2020 is concerned, Mr.Rutul Desai, learned advocate, has adopted all the arguments which are canvassed by Shri B.S.Patel, learned Senior Advocate. But, in addition to it, learned advocate has submitted that the respondent authority, while passing the impugned communication dated 14.10.2020, has not stated has to under which provision of law, he passed an order or gave directions and, therefore, practically, there is no source of power available with the authority to issue such communication. Mr.Rutul Desai, learned advocate, has submitted that the expiration of term by virtue of effect of notification of extending term would be in July, 2020 and, therefore, by referring to the decision of the Division Bench reflecting on page-166 and 167, has submitted that the date of expiry of the term is in a situation like this, is to be construed as on 31.7.2020 and, therefore, every member, who exists as on 31.3.2020, deserves to be included in the voters list. For the purpose of strengthening his submission, learned advocate has relied upon a decision reported in 2011 (2) GLR 1579 and by referring to Para.6, 7 and 8 thereof, it has been submitted that voters list submitted by the bank is in consonance with the relevant provision of law and precisely, as per compliance of Rule 4 requirement of the Rules and, therefore, rightly covered the members upto 31.3.2020. Hence, the order in question is not sustainable in eye of law. Apart from that, Mr.Rutul Desai, learned advocate, has submitted that it is a clear example of pick and chose policy by the authority since though Devbhoomi Dwarka is bifurcated as a separate district, the societies have gone in that district, have been included in the voters list, whereas the petitioners societies of earlier petition, who were of Jodiya taluka, now in the revenue district of Morbi, have been excluded and that action is thoroughly discriminatory in nature. Hence, the order Page 26 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT impugned deserves to be set aside and the reliefs prayed for deserve to be granted. Rest of the submissions of Shri B.S.Patel, learned Senior Advocate, learned advocate has adopted.
8. As against this, Ms.Manisha Lavkumar Shah, learned Government Pleader, assisted by Ms.Aishwarya Gupta, learned Assistant Government Pleader appearing for the respondent authorities, has in a summarized form explained each of the issues which have been raised by Shri B.S.Patel, learned Senior Advocate and has submitted that no case is made out to interfere. Following are the summary form submissions made by the learned Government Pleader, the Court would like to reproduce the same hereunder :
"3. Date on which the election is due :
3.1 The date on which the election of the Managing Committee of the Bank became due is the most pivotal issue and the correct determination of which, is necessary for the just and proper adjudication of disputes raised in the present petition, It is submitted that the term of the Managing committee of the Bank was to expire on 28.04.2020 and therefore, in context of the same a communication dated
09.12.2019 was addressed by the Bank to the Election officer and the District registrar. The date of "09.12.2019" assumes significance inasmuch as, the same indicates that the Bank was aware that the election of the Managing Committee was to be held in terms of the statute, i.e. the election was required to be completed one month before the date on which the term of office of the members of the committee is to expire. Thus, it is submitted that the election was due on 28.03.2020, i.e. in the year 2019-2020.
3.2 In view of the time period provided under Rule 6(2), Rule 6(4) read with Rule 16 of the Rules the election proposal was required to be sent by the Bank at least 60 days prior to the date on which the election becomes due, i.e., on or before 28.01.2020 and the same indisputably has not been done in the present case as the Bank forwarded the proposal to the District Registrar only on 22.07.2020. The machinery for Page 27 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT conducting the election sets in motion only after the election proposal is received at least 60 days before the date of election.
3.3 Therefore, it was the bounden duty of the Respondent No.4 Bank to complete the process within the time bound manner, which has not been done in the present case. This has been categorically held by the Hon'ble Court in its order dated 27.07.2020 in Special Civil Application No. 23321 of 2019 and 22742 of 2019 (Annexure-F, pgs. 127-165). The relevant observations begin at pg. 157 and a bare perusal of the same would indicate that the Bank was not serious enough to hold the elections in time and thus now, cannot be permitted to take advantage of its own wrong by contending that the due date for the elections would now fall in the year 2020-2021.
4. Preparation of the list of constituencies :
4.1 It is submitted that Rule 3A(1) of the Election Rules, 1982 clearly states that the provisional list of constituencies is to be prepared in the year preceding the year, in which the election of the committee is scheduled to be held. Furthermore, it is submitted that it is a settled principle of law, that it is the duty of the Election Officer to finalize the list of constituencies in accordance with the statutory provisions and the bye-laws of a cooperative society. Considering that the election was to be held in the year 2019-2020, it was incumbent upon the Bank to prepare the list of constituencies as per the preceding year, i.e. 2018-2019 and thus, the list of constituencies was to prepared by the Bank, with the status of the constituencies as on 31.03.2019, Moreover, the fact that the Bank published the final list of constituencies on 19.03.2020, Le. in the year 2019-2020, further casted a statutory obligation on the Bank to prepare the list of constituencies as on 31.03.2019).e.
2018-2019.
4.2 An adverse inference needs to be drawn against the Bank for its refusal to mention the reference date as per which the list of constituencies was prepared. The fact that the Bank has not prepared the list of constituencies with reference date as 31.03.2019, is evident from the fact that the list contains the names of 56 member societies that have been added as members only in August 2019, i.e. in the year 2019-2020.
4.3 The categorical refusal of the Bank to mention the Page 28 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT reference date, also assumes significance in light of the fact that for the last elections which were held in 2015, the reference date was specifically mentioned in the list of constituencies. A copy of the relevant excerpt from the list of constituencies submitted by the Bank for the last elections is annexed hereto and marked as Annexure-R4.
5. Preparation of the provisional list of voters :
5.1 Rule 4(1) of the Election Rules, 1982 states that a provisional list of voters shall be prepared by every society for the year in which the election is due to be held. Furthermore, the provision states that persons who are members as on date of drawing up the accounts of the year, in which such election is due shall be included in the provisional list. It is the contention of the petitioners that the elections are to be held in the year 2020, i.e. 2020-2021 and therefore, the list is to be prepared with the status of voters as on 31.03.2020.
5.2 This submission is incorrect and misplaced in light of the fact that the provision clearly makes a mention to the year in which such election is due and not when it is actually held The due date of the election being 28.03.2020, the provisional list of voters was required to be prepared with the status of voters as or 31.03.2019 and not 31.03.2020, as the provision requires that persons who are members as on the date of drawing up the accounts of the year, be included. The contention of the petitioners that the order has been passed by placing reliance upon the unamended Rule 4(1) is misplaced, inasmuch as, the said reproduction is an inadvertent mistake. The reason as stated in the impugned order makes the same evident, as the impugned order clearly states that if the due date of the election is 28.03.2020, then how can the provisional list of voters be prepared with with the status of voters as on 31.03.2020.
5.3 As mentioned hereinabove, had the Bank been serious enough to hold the election in time, the election proposal would have been sent by the Bank by 28.01.2020, considering that 28.03.2020 is the due date of elections. In such a scenario, the provisional list of voters would have been prepared with the status of voters as on 31.03.2019.
However, the Bank not having acted with alacrity, it cannot be permitted to take advantage of the situation created by its own lack of seriousness.
Page 29 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020C/SCA/13286/2020 JUDGMENT 5.4 It is submitted that the Bank vide a Resolution dated 19.08.2019 passed by its executive committee, has admitted 56 societies as its new members and such member societies fall within the provisional list of voters' as prepared and submitted by the Bank. A copy of the said resolution dated 19.08.2020, is annexed hereto and marked as Annexure-R5.
6. Bifurcation of Jamnagar district :
6.1 It is submitted that on 15.08.2013, the State bifurcated certain districts, whereby certain villages of Jodiya Taluka of Jamnagar District were included within the limits of a new district, i.e. Morbi. Furthermore, on the same date, the State also included 4 talukas: Bhanvad, Kalyanpur, Jamkhambhaliya and Okhamandal of Jamnagar district and included the same the limits of a new district, i.e. Devbhoomi Dwarka. It has been contended by the petitioners that the order to delete the names of the villages to which the petitioner societies belong is bad in law.
6.2 This contention is misplaced, inasmuch as, the revenue area of Jodiya Taluka pursuant to such bifurcation stands modified. Attention of the Hon'ble Court needs to be drawn to Bye-Law No.30(i)(a) [pg. 67 of the petition]. Said Bye-law provides states that 10 directors representing taluka-wise agricultural credit, multipurpose and service Cooperative societies shall form a part of the Board of Directors. Bye-Law No. 30(i(a)(8) clearly mentions that/one direct for affiliated societies falling under the revenue area of Jodiya Taluka shall be a part of the Board of Directors. Thus, with the revenue area of Jodiya having been modified in the year 2013, the impugned order rightly requires the deletion of the societies affiliated to such villages.
6.3 The contention of the petitioners that such societies were permitted to vote in the previous elections and thus, should be permitted to vote in the present election, is incorrect, in view of the fact that the voters' list was prepared for the last elections with the status of the voters as on 31.03.2013 and the bifurcation took place in August, 2013 Therefore, during the last elections the said villages were very much a part of the revenue area of Jodiya Taluka. Thus, the reliance of the petitioners in this regard, upon the decision in Hasmukhbhai Karamsinhbhai Gambhava v. State of Gujarat [2016 (1) GLH 409] is misplaced inasmuch as, the Hon'ble Court stated that the villages in which the concerned societies are functioning were a part of the Jodiya Taluka on 31.03.2013 and their Page 30 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT exclusion having taken place in August, 2013 their inclusion in the voters list was valid.
6.4 Another contention raised by the petitioners is that the petitioners are members of the Bank and by virtue of such membership (reference has also been made in the RBI License), their right to Vote cannot be taken away. In this regard, it is submitted that by virtue of membership or as a shareholder, a member has a right to advantage of his membership in the trade and business of the society and also to have business transactions with the society. However, the rights of a member in a society to vote and contest are dependent upon such a member having its operations within a particular territorial jurisdiction of a Revenue Taluka. Once the member, ceases to belong to a Revenue Taluka, it cannot claim such right to vote or contest as member of that society t is submitted that without there being a corresponding amendment in the bye-laws permitting such societies of such villages to vote, no right accrues in favour of the petitioner societies to vote at the election. It is submitted this principle has been propounded in the judgments relied upon by the petitioner.
6.5 The petitioners have alleged bias as no reference has been made in the impugned order to the the Talukas which are no longer a part of Jamnagar District but are now a part of Devbhoomi Dwarka. Attention of the Hon'ble Court needs to be drawn to Bye-Law Nos. 30(i)(a)(2), (4), (5) and (10).
The said Bye-laws clearly make a provision for one director each from Bhanvad, Bhanvad, Kalyanpur, Jamkhambhaliya and Okhamandal Talukas. It is pertinent to note that the inclusion of the said Talukas in Devbhoomi Dwarka by itself would not change the revenue area of the said Taluka. With a specific provision having been made in respect of such Talukas in the Bye-laws of the Bank, the Election Officer has committed no illegality in not raising any objections in respect of their inclusion.
7. Extension of the term of the committee :
7.1 It has been contended by the petitioners that in view of the pandemic of COVID-19, the State first suspended the elections of all cooperative societies on 24.03.2020, then extended the terms of the committees of all cooperative societies till 31.07.2020 vide GR dated 24.04.2020 and subsequently vide GR dated 25.08.2020, the same was extended to 31.12.2020 or till the conduct of the elections, Page 31 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT whichever is earlier, Thus, the reference date for the election of the Managing Committee has been assumed to be 31.03.2020 by the petitioners as according to them the elections became due in 2020-2021.
7.2 It is submitted that the Bank having actively delayed the entire process of election, cannot now be permitted to take shelter of the said Government Resolutions of the State.
Moreover, the said Government Resolutions clearly state that the election is to proceed from the stage where it was when the Government Resolutions were issued. This also makes it amply clear that the due date to be considered is 28.03.2020, i.e. in the year 2019-2020 and not in the year 2020-2021."
8.1 Additionally, Ms.Manisha Lavkumar Shah, learned Government Pleader, has further drawn the attention to all relevant bye-laws of the bank, has also clarified that a serious attempt is made by the bank in connivance with present petitioners to somehow thwart the process of election which is otherwise directed to be completed within a specified time of 4 months in a decision delivered by the Division Bench and the main issue as to when the election became due and what is the relevant date. All these issues have been substantially dealt with by the Division Bench and, therefore, this attempt may not be encouraged at the instance of the petitioners. The Division Bench, while disposing of both the petitions in July, 2020, has also taken a serious note that somehow an attempt is made not to conduct the election and that being the observation is now proving justified by filing these petitions, one by petitioners societies and another by the bank itself.
8.2 Ms.Manisha Lavkumar Shah, learned Government Pleader, has pointed out that the bank has not correctly forwarded the list and according to true interpretation of relevant Rules, the members, who exist as on 31.3.2019, are to be included and not as on 31.3.2020. It has further been contended that reading of Notification dated 30.6.2020 makes it very clear that the elections Page 32 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT which were postponed on account of COVID-19 situation, are now to be continued from the stage where it has stopped. It has further been contended that the petitioners societies, who are now undisputedly coming within the revenue limits of Morbi district consisting of those 12 villages, are not possible to be included and the authority has rightly communicated to the petitioners.
8.3 Ms.Manisha Lavkumar Shah, learned Government Pleader, has submitted and drawn clear distinction about discrimination which is alleged of Devbhoomi Dwarka district and its societies and the Jodiya taluka and by referring to the decisions attached by the petitioners as well as forming part of the record, it has been submitted that the revenue limit is a yardstick relevant to be considered. There is no pick and chose policy since revenue area of those 4 talukas having not been allowed, whereas on account of bifurcation, the revenue area of some 12 villages is changed and now, forming part of Morbi district and that being the position, it is not correct on the part of the petitioners to take a plea of pick and chose policy.
9. Shri Mihir Joshi, learned Senior Advocate, assisted by Mr.Dipen Desai, learned advocate for the contesting respondents, has substantially supported the submissions of the learned Government Pleader and has adopted the same. A detailed written submissions are also by the learned advocate appearing on behalf of the contesting respondents, the Court would like to reproduce the same hereunder :
"1. The challenge in this petition is to order dated 14.10.2020 of the Election Officer and Deputy Collector, Jamnagar, whereby, the Election Officer has inter-alia directed that relevant date for preparation of voters' list should be 31.03.2019 and has also directed that the 12 societies which Page 33 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT are in Morbi Taluka should not be included in the constituency for Jodiya Taluka as they no longer are in the revenue limits of the Jodiya Taluka. By way of amendment, the petitioners have also challenged the provisional voters' list published by the Election Officer and the Deputy Collector dated 23.11.2020.
2. It is submitted that the petition is not maintainable and may not be entertained on the ground of availability of alternative and efficacious remedy by way of Election Petition under Section 145U of the Gujarat Cooperative Societies Act, 1961. The said provision requires that 'any dispute relating to election' shall be referred to the Tribunal by way of an election petition after the final result of the election is declared. Hence, there being statutory efficacious remedy provided under the Act, the present petition may not be entertained.
3. The present petition is clearly a dispute relating to election of Jamnagar District Cooperative Bank Limited which is a specified society and therefore, Election Petition is the proper and efficacious remedy. The amended prayer whereby challenge is made to the voters list would in no uncertain terms be covered within election dispute.
4. The petitioners have contended that the order passed by the Election Officer dated 14.10.2020 is without jurisdiction and there is no authority with the Election Officer to pass such an order. Apropos the said contention, it is submitted that the Election Officer is vested with independent statutory powers of delimiting the constituencies under Rule 3(A)(8) and Rule 3(A)(9) of the Gujarat Specified Cooperative Societies Election to Committee Rules, 1982. The said powers are distinct and independent powers of the Election Officer and the Election Officer is not bound to accept the constituencies prescribed by the specified society if the Election Officer finds that the constituencies are not properly delimited in accordance with the Act and the Rules. Therefore, the Election Officer having found that inclusion of the names of the petitioner societies in the constituency of Jodiya Taluka is not in accordance with the Act and the Rules and the settled legal position, the Election Officer was perfectly justified in directing the bank to exclude the said societies from the list of constituency of Jodiya Taluka. The said power can clearly be read with the Election Officer under Rule 3(A)(8) and Rule 3(A)(9) of the Rules. At this juncture judgment of the Hon'ble Supreme Court in the case of Rajkot District Cooperative Bank Limited v. State of Gujarat and others reported in (2015) 13 SCC 401, paragraph nos. 19 and 20 (judgment starts at page 26 of the Page 34 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT compilation, relevant page-36). The Hon'ble Supreme Court has categorically held that powers conferred In the aforesaid judgment, with the Collector for delimitation of the constituency under Sub-Rule (9) is independent and separate notwithstanding anything done by the society or even prescribed in the bye-laws.
5. Therefore, the impugned order passed by the Collector is within the authority and jurisdiction of the Collector as per Rule 3(A)(8) and Rule 3(A)(9).
6. The petitioners have contended that the petitioner societies are falling within the area of operation of the Bank inasmuch as, the area of operation of the bank is entire State of Gujarat and therefore, the petitioners cannot be said to have been moved out of area of operation. The petitioners have alternatively contended that if not in constituency prescribed in bye-law no.30(1)(a)(8) of the bye-laws, then the petitioners may be included in the constituency of bye-law no.30(1)(d). Therefore, as per the petitioners, the petitioners could also have been included in the constituency of societies other than those mentioned in clause no.(a), (b) and (c). It is submitted that firstly the said alternative contention is contrary to the pleadings of the petitioner. In the entire memo of petition, the petitioners have contended that the petitioners are entitled to be included in the constituency of Jodiya Taluka. Therefore, the alternative contention is contrary to their own pleadings. Even on merits also, the said contention has no force because constituency of other societies provided in bye-law no.30(1)(d) provides for "one director representing societies other than those mentioned in clauses (a), (b) and
(c). If at all the constituencies provided in Bye-law No.30(1)
(a), 30(1)(b), 30(1)(c) and 30(1)(d) are closely seen, then constituencies are prescribed as per the types of the societies.
Bye-law No.30(1)(a) provides for representation of agricultural credit, multipurpose and service cooperative societies. Bye- law No. 30(1)(b) provides for representation of non-agricultural credit and industrial societies. Bye-law no.30(i)(c) provides for representation of marketing and processing societies. Bye-law no.30(i)(d) provides for representation of societies other than those mentioned in clauses-(a), (b) and (c). Hence, only those kind of societies which are not forming part of clauses (a), (b) and (c) shall form part of Clause (b). Therefore, importance is given to the kind of societies or type of societies. The petitioners are agricultural credit, multipurpose and service societies and therefore, such type of societies are to be included only in the Page 35 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT constituency of bye-law no.30(i)(a) provided that they are within the revenue jurisdiction of the concerned Taluka. Hence, the alternative contention to include the petitioner societies in constituency of bye-law no.30(1)(d) is not tenable and requires to be rejected.
7. As far as the main contention to include the petitioners in the constituency of Jodiya Taluka, it is submitted that the petitioners since have moved out of revenue limit of Jodiya Taluka and are now in Morbi Taluka of Morbi District, the petitioners no longer can be included in the constituency of Jodiya Taluka. Reliance is placed on the judgments of this Hon'ble Court in the case of Siddhpur Taluka Cooperative Purchase and Sales Union v. State of Gujarat reported in 2002 (2) GLH 773, in the case of Bhavnagar District Cooperative Bank Limited and others v. State of Gujarat reported in 2006 (2) GLH 545 and in the case Hasmukhbhai Karamsinhbhai Gambhava Gujarat reported in 2016 (1) GLH 409. All the aforesaid judgments have taken a view that once a society moves out of the revenue limits, it can no longer have right to vote. The said judgments would apply with full force to the case of the petitioners as the petitioners are no longer within the revenue area of Jodiya Taluka, but are also out of the Jamnagar District Revenue limits and are in Morbi district.
8. The reliance placed by the petitioners upon the bye-laws of the Jamnagar District Bank to contend that area of operation of the bank is the entire State of Gujarat is misconceived. If the application of the bank for registration is seen (page No.97), the same shows that the area of operation of the bank is shown as Jamnagar district. Further, the area of operation specified in the bye-laws, more particularly the Gujarati version (page 41, 42 of the petition) is considered, then it provides that the same is within concerned district which would mean Jamnagar District. The constituencies provided for the purpose of electing representatives also shows that the societies operating within the Jamnagar District are to be given representation.
9. Further, Jamnagar District Cooperative Bank is a society forming part of the cooperative credit structure as defined under Section 2(7A) of the Act. The cooperative credit stricture consists of a three tier structure viz. the primary agriculture cooperative banks and State Cooperative Banks. Jamnagar District Cooperative Bank is a Central Cooperative Bank which works as a second tier in the three tier structure and as per the definition of the central cooperative bank in Page 36 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT Section 2(d) of the NABARD Ac, 1981, the same would be having area of operation in that particular district only.
10. Hence, the area of operation of the Jamnagar District Cooperative Bank can be said to be only Jamnagar District and the societies which have moved to Morbi district, can no longer be included in the voters' list for the Jamnagar District Cooperative Bank.
11. Reliance placed by the petitioners upon the banking license issued by the Reserve Bank of India is also misconceived. The banking license given by the Reserve Bank of India has no nexus or relevance with the voting right of a member society. They are absolutely distinct and independent of each other. Therefore, the banking license would not govern the voting right of a member.
12. With respect to the prescription of relevant date by the Election Officer of 31.03.2019, the petitioners have contended that the correct relevant date has to be 31.03.2020. Firstly, the petitioners of Special Civil Application No. 13286 of 2020 have no cause to challenge the said relevant date as they are not at all aggrieved by the same. The petitioners therefore cannot be said to be aggrieved party with respect to the prescription of the relevant date. Even the petitioner of Special Civil Application No. 13298 of 2020 i.e. the Jamnagar District Co-operative Bank cannot be said to be aggrieved by the prescription of the relevant date as none of its rights are violated.
13. However, on merits, it is submitted that the contention raised by the petitioners is not tenable and the prescription of relevant date is just and proper. It is submitted that Section 145C provides that the elections shall be held as far as possible one month before the date on which the term is to expire. Section 74C(4) provides that the elections shall be held before the expiry of the term of the Committee. Therefore, the statutory mandate is to hold elections before the expiry of the term. In the present case, the term of the Committee of the Jamnagar District Cooperative Bank was to expire on 28.04.2020. Therefore, if the statutory mandate was to be fulfilled, then the election process had to be initiated latest by February, 2020. Keeping the said statutory mandate in mind the Jamnagar District Cooperative Bank had sent proposal on 09.12.2019 requesting the Election Officer to initiate the process of election. It is submitted that even the provisional list of constituencies was prescribed on Page 37 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT 07.01.2020 and the letter to that effect was issued by the bank to the Election Officer and District Registrar on 08.01.2020. On the basis of the said proposal, the Election Officer vide letter dated 21.01.2020, sought for proposal as per Rule 3 and 4 of the Specified Society Rules from the Jamnagar Bank. The above referred communication clearly show that the election had to be held and even proposed keeping in mind the relevant date to be 31.03.2019. It could not have been possible to prescribe a future date which was yet to arrive as a relevant date. Hence, the contention that 31.03.2020 is to be considered as the relevant date is completely misconceived and contrary to the communications of the Jamnagar District Cooperative Bank.
14. Even on law also the same is not correct. Rule 3A of the Gujarat Specified Cooperative Societies Election to Committee Rules, 1982, provides for preparation of list of constituencies. Rule 3A(1) provides that the provisional list of constituencies shall be prepared in the year preceding the year in which the election is due. Rule 3A(2) provides that such list of constituencies shall describe the limits of each constituencies and a copy of such list shall be sent to every member of a Society as per Rule 3A(3) and as per Rule 3A(4) and Rule SA(5) any member of the society can submit objections with respect to omission or error in the provisional list. Therefore, the aforesaid rules clearly show that the list of constituencies would include the names of the societies to be included in each constituency. If the limits of the constituencies is to be prepared for the preceding year, then it is not possible that the voters' list has to be prepared for the current year. Hence, only possible interpretation is that the voters' list has to be prepared considering 31.03.2019 as the relevant date. Further, the intention of the legislature can also be gathered from Section 27(3) which provides that in order that any member acquires voting right such member has to be a member of the society for the whole of the financial year preceding the financial year in which the election is being held. The said provision in the Act would prevail over the provisions of the Rules and if at all there is any ambiguity in the Rules, the same has to be interpreted in a manner so as to be in conformity with the provisions of the Act. Reliance on this effect is placed on the judgment of the Hon'ble Supreme of Ispat Industries Limited Commissioner of Customs, Mumbai reported in (2006) 12 SCC 583, paragraph nos.26 to 29 (judgment starting from Court in the case v. page 49 of the compilation, relevant from page 63).
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15. Therefore, considering Section 27(3), the prescription of relevant date of 31.03.2019 is perfectly legal and proper.
16. Further, if the contention of the petitioner is accepted, then it would result in absurdity. Rule 4 of the Gujarat Specified Cooperative Societies Election to Committee Rules, 1982, provides that persons who are the members as on the date of drawing up of accounts of the year in which the election is due, shall be included in the provisional list. As per the petitioners the election was due on 28.04.2020. Therefore, as per the petitioners the election was due in the year 2020-2021. In that context if Rule 4 is considered then, the voters' list will have to be prepared considering 31.03.2021 as the relevant date as the date of drawing up of account for the year 2020-21 would be 31.03.2021. Therefore, if the contention of the petitioners is accepted, then a date even after the date on which the election is being held, would have to be considered as the relevant date. The same therefore results in complete absurdity. Any interpretation of any statutory provision which results in absurdity may be avoided. Only possible and plausible interpretation which also gets support from the statutory mandate is that the relevant date is to be considered to be 31.03.2019, Hence the contention with regard to the relevant date is completely misconceived.
17. The next contention with regards to violation of principles of natural justice is also without any basis. The impugned order dated 14.10.2020 passed by the Election Officer is direction/communication to the bank for preparation of voters' list in consonance with the Act and the Rules. The same can at best be considered to be an order deciding the limits of the constituencies under Rule 3(A)(8) and Rule 3(A)(9) of the Rules. The same does not require affording any opportunity of hearing as neither the Act nor the rule provides for affording of any opportunity. Therefore, there is no requirement to afford any opportunity of hearing. there is no violation of principles of natural justice. Even if it is assumed for the sake of arguments that there is violation of principles of natural justice, then also the principles of no prejudice being shown and principles of empty formality will come into play. The judgment of the Hon'ble Supreme Court in the case of Dharampal Satyapal Limited v. Deputy Commissioner of Central Excise reported in (2015) 8 SCC 519, paragraph nos.40to 45 are relied upon (judgment starts at page 1, relevant page 21 to 23.) Therefore, on that ground also the petition does not deserve to be entertained. Hence, In view of Page 39 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT the above, petition being bereft of merits, deserves to be rejected."
10. Having heard learned advocates for the parties and having considered the rival submissions, before considering the same, following few circumstances are not possible to be unnoticed by the Court:-
(1) First of all, the respondent bank, i.e. Jamnagar District Co-
operative Bank, is a specified society and as such, its election must be held in consonance with the statutory rules as contained under Chapter XI of the Gujarat Co-operative Societies Act,1961 ('the Act' for short). However, few statutory provisions which are relevant to the issues, deserve to be quoted hereunder:-
(i) As per the definition of 'Co-operative Credit Structure' defined under sub-section (7A) of Section 2 of the Act is a three layer structure, consisting of the Primary Agricultural Credit Co-
operative Societies, the Central Co-operative Banks; and the State Co-operative Banks. Section 13 of the Act is dealing with procedure of seeking amendment of byelaws of the society. Whereas, Section 27 of the Act, which is relevant to the controversy in question, is dealing with right to vote and hence, the same is reproduced hereunder:-
27. [Right to Vote] No rights of membership to be exercised till due payments are made. - [(1)] No person shall exercise the rights of a member of a society, until he has made such payment to the society in respect of membership, or acquired such interest in the society, as may be prescribed by the rules, or the bye-laws of such society.
[(2)] The person who has committed a default and remains as such defaulter in making repayment of loan or interest thereon for a period of one year from the due date of repayment of such loan or interest or installment Page 40 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT shall not be entitled to exercise voting rights of a member of a society till all such repayments are made. ] [(3) No person shall exercise the right to vote at an election of a member of a committee in a financial year unless he is a member of the society for the whole of the financial year preceding the financial year in which the election is being held:
Provided that no member society of a federal society shall exercise the right to vote at an election of a member of a committee unless such society has its last accounts audited in class A, B or C. The aforesaid right to vote is conferred upon a person who is member of the society for whole of the financial year preceding the financial year in which the election is being held and provided that no member of a federal society shall exercise right to vote at an election of the member unless such society is its last accounts audited in Class A, B or C.
(ii) Yet another provision, which is significant to be considered, is Section 74(C) of the Act, which deals with the provision for conduct of elections of committees and officers of certain societies and the term of office of members of the committees. Since entire provision is dealing with conduct of elections, same deserves to be quoted hereunder:-
74C. Provision for conduct of elections of committees and officers of certain societies and term of office of members of committees. - (1) The election of members of the committees and of the officers by the committee, of the societies of the categories mentioned below shall be subject to the provisions of Chapter XI-A and shall be conducted in the manner laid down by or under this Chapter :-
[(i) Apex societies mentioned in the Schedule and such other apex societies as the State Government may, by general or special order, published in the Official Page 41 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT Gazette, from time to time specify in this behalf, having regard to financial position and share capital of such societies;]
(ii) all District Central Co-operative Banks;
(iii) all Primary Land Development Banks;
(iv) (a) all District Co-operative Sale and Purchase Organisation;
(b) all Taluka Co-operative Sale and Purchase Organisation;
(v) all Co-operative Sugar Factories;
(vi) all Co-operative Spinning Mills;
[(vi-a) all district co-operative milk unions; (vi-b) all taluka co-operative processing societies;]
(vii) any other society or class of societies, which the State Government may, by general or special order published in the Official Gazette, from time to time specify in this behalf, regard being had to the financial position and share capital of such institutions. [(2)(i) The term of the elected members of the managing committee shall be five years from the date of election.
(ii) The term of office bearers of the managing committee shall be two years and a half years from the date of election.
(iii) The managing committee shall fill up a casual vacancy within a period of sixty days from the date of such vacancy, failing which the State Government shall have the power to fill up such vacancy out of the same, class of categories of members in respect of which the casual vacancy has arisen if the remaining term of office of the managing committee is less than half of its original term.
(iv) The elected members of the managing committee and its office bearers shall cease to hold the office on the date of expiry of their term.
(v) Notwithstanding anything contained in clause (ii), the office bearers of the managing committee who have completed two and a half years on the date of the commencement of the Gujarat Co-operative Societies (Amendment) Act, 2005, shall continue to be such Page 42 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT office-bearers for the remainder term.
(vi) Nothing in clause (i) shall be applicable to the managing committee existing on the date of coming into force of the Gujarat Co-operative Societies (Amendment) Act, 2015.
(vii) The office bears of the managing committee shall be eligible for re-election.] (3) Notwithstanding anything in the bye-laws of any such society, the committee of management shall be elected by a general body of members of the society and all other committees authorised by or under the bye-laws may be constituted by electing or appointing persons from among the persons who are members of the committee of management, and all such committees shall be sub-committees of the committee of management, and shall be subordinate to it :
Provided that it shall be lawful for the State Government,-
(a) to nominate its representatives on a Committee of any such society under Section 80, or
(b) to nominate the first Committee of Management of any such society where the bye-
laws of such society so provide.
[Provided further that it shall be lawful for anybody or authority to nominate its representative on a Committee of such society where the bye-laws of such society so provide.]] [(4) The election of the Managing Committee shall be conducted before the expiry of its term so as to ensure that the newly elected members of the Managing Committee assumes office immediately on the expiry of the term of office of the members of the outgoing Managing Committee.] The aforesaid provisions indicate that the term of the committee shall be five years from the date of election and sub-section (ii) of sub-section (2) indicates that the term of the office bearer of the managing committee shall be two and half years Page 43 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT from the date of election and sub-section (4) of Section 74C specifically indicates that election of the Managing Committee shall be conducted before expiry of its term, so as to ensure that newly elected members of the Managing Committee take charge immediately on expiry of the term of earlier office. So, election to be conducted before expiry of the term, which is evidently reflecting from this statutory provision.
(iii) Section 74D is dealing with an issue of appointment of Custodian in certain circumstances, wherein after lapse of the term, Custodian shall be appointed. But, since that issue is taken care of by earlier decision delivered by the Division Bench, nothing much to be discussed hereunder. Hence, not quoted hereby.
(iv) Chapter XI of the Act also consists of one statutory provision namely Section 145C, which specifically indicates the time when election to be held. Same is reproduced hereunder:-
145C. Time when election to be held.- Every election shall be held as far as possible one month before the date on which the term of office of the members is due to expire.
(v) Section 145D is with regard to conduct of elections. But, present controversy is slightly different. The said provision need not to be reproduced hereunder.
(vi) A further Section 145U is related to a remedial measure to aggrieved person to ventilate the grievance about any dispute relating to elections which may be submitted to be validly constituted Tribunal and this Section 145U is providing a specific statutory remedy to be availed of by an aggrieved person with regard to the disputes which are related to conduct of the election.Page 44 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020
C/SCA/13286/2020 JUDGMENT
(vii) Section 161 of the Act is dealing with the power invested in the State authority to grant any exemption from compliance of any of the provisions and as such, these are the relevant provisions, which clearly indicate that it is a complete mechanism provided in the Statute.
(viii) With regard to the specified Societies, there are specific statutory Rules framed, which are known as The Gujarat Specified Co-operative Societies Elections to Committees Rules, 1982 ('the Specified Rules, 1982' for short) and since the same is a center of debate between the parties, relevant Rules are quoted hereinafter.
(ix) Rule 2, which is a definition clause, in which sub-Rule (c) has defined the date of drawing up the accounts, which reads as under:-
2(c) "date of drawing up the accounts", means the date of drawing up accounts of the Society concerned under Rule 36 of the Gujarat Co-operative Societies Rules, 1965.
Since this definition clause is having a meaningful clarity, Rule 36 of the Gujarat Co-operative Societies Rules, 1965 deserves to be considered. Hence, the Court deems it proper to reproduce said Rule 36 from the Gujarat Co-operative Societies Rules, 1965, hereunder:-
36. Date of making up accounts.- The date of drawing up the accounts of the Co-operative Society shall be the 31st day of march, every years:
Provided that in case of co-operative society whose date of drawing up of accounts is any date after the 31 st March, 1999, the period for which the accounts will be drawn up shall be deemed to be extended upto 31 st March, 2020.
A bare reading of this Clause is indicating that date of drawing Page 45 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT up accounts of co-operative society shall be 31 st March of every year.
(x) Rule 3 of the Specified Rules is dealing with annual report of names of Societies in which elections are to be held. But, here, Rule 3A is dealing with Delimitation of constituencies for the purpose of election. Since this Rule is significance, same is reproduced hereunder:-
"3A. Delimitation of constituencies for purpose of election.- (1) In every society where there are more than one constituencies, the Secretary or where there is no post of Secretary, the Chief Executive Officer of every such society shall, in the year preceding the year, in which election are to the Committee is scheduled to beheld, prepare a provisional list of the constituencies.
(2) Such list shall describe the limits of each constituency. A copy of the provisional list shall be displayed with a notice to be signed by the Secretary or where there is no post of Secretary, the Chief Executive Officer of the society on the notice board of every office or sub-office of the society. A copy of such provisional list along with the notice shall also be sent to the Registrar and to the Collector.
(3) A copy of such list along with notice shall also be sent to every member of the society by registered post.
(4) The notice referred to in subrules (2) and (3) shall clearly lay down that any objections or suggestions in respect of the provisional list may be sent by any person to the Secretary or where there is no post of Secretary to the Chief Executive Officer of the society within a period of 15 days from the date on which the provisional list is displayed on the notice board of the office of the society.
(5) Any member of the society may bring to the notice of the society any omission or error in respect of the name or address or other particulars shown in the provisional list.
(6) Any person raising any objection or making a suggestion shall send such objection or suggestion Page 46 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT with grounds therefore in writing within 15 days from the date on which the provisional list is displayed on the notice board of the office of the society.
(7) The society shall after considering every objection, suggestion or any error in the provisional list indicated by any member under subrule (5), prepare the final list. The final list shall be displayed on the notice board of the office of suboffice of the society and a copy of such final list shall be sent to the Registrar and also to the Collector.
(8) Where the area of operation of a society is in more than one village, the number of constituencies shall be equal to the total number of seats excluding two seats reserved under subsection (1) of Section 74B.
(9) Notwithstanding anything contained in these rules and the byelaws of the society, where the elections to the members of any Committee are scheduled to be held before the ending of the accounting year of the society, the delimitation of the constituencies shall be made by the Collector prior to the publication of the list of voters."
The detailed procedure is prescribed under this Rule, to which, undisputedly every society is under an obligation to observe, including the respondent bank. The manner of preparation and time of preparation of provisional list of constituencies and opportunity clause are also provided to an aggrieved person if there is any error or omission takes place relating to the provisional list and then manner is provided for preparation of the final list.
(xi) Sub-Rule (8) is indicating area of operation of a society in which if more than one village, then number of constituencies shall be equal to total number of seats excluding two seats reserved under sub-section (1) of Section 74-B. and sub-Rule (9) is indicating that notwithstanding anything contained under the Rules or the bye-laws, where the elections of the Page 47 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT members of any committee are scheduled to be held before ending of the accounting year, delimitation shall be made by the Collector prior to the publication of the list of the voters.
(xii) Rule 4 is with regard to provisional list of voters, how to be prepared, and procedure thereof is statutorily prescribed. Since this Rule is relevant to the issue raised the petitioners, same is quoted hereunder:-
"4. Provisional list of voters.-
(1) A provisional list of voters shall be prepared in Gujarati by every society for the year in which general election is due to be held. Persons who are members as on the date of drawing up the accounts of the year [in which such election is due] shall be included in the provisional list. If different constituencies are provided in the bye-
laws, the names of voters shall be arranged constituency wise as laid down in the bye-laws.
(2) Four copies of the authenticated provisional list of voters shall be sent by every society to the Collector, through the District Registrar so as to reach the Collector within 15 day from the date of drawing up the accounts of the year in which the general election is due. Copies of the said list shall be displayed on the notice board of the society, the District Registrar concerned and the Collector within 20 days, from the date of drawing up the accounts for inviting claims and objections.
(3) Simultaneously while sending of provisional list of voters under sub-clause (2) every society shall send in writing to the Collector a list of members who are disqualified to vote as per the provisions of the Act, Rules or its Bye-laws and shall inform to the member who has been shown disqualified in the said list in writing, pointing out such disqualification incurred by him. The said list shall be treated as objection under sub-rule (3) of Rule 6.
(4) If any society fails to send copies of the provisional list of voters to the Collector through the District Registrar Page 48 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT concerned within 15 days from the date of drawing up the accounts, the Collector shall himself or through any person authorised by him in this behalf prepare a provisional list of voters and the expenditure incurred therefor shall be recovered from the society as arrears of land revenue.
(5) In the event of the Collector taking action under sub-
rule (4) he shall also cause copies of the provisional list of voters to be displayed on his notice board and on the notice board of the District Registrar concerned and the society within 23 days from the date of drawing up the accounts, for inviting claims and objections.
(xiii) Sub-Rule (1) of these Rules is specifically indicating that a provisional list of voters shall be prepared by every society for the year in which general election is due to be held and persons who are members as on the date of drawing up the accounts of the year in which election is due shall be included and as such, here undisputedly, the election is to be held prior to one month from the date of expiration of the term of the committee which is ending on 29.4.2020 and hence prior to one month, elections to be held and so, plain reading thereof indicates that the members who are on the roll for whole of the year preceding the due date of election are to be considered for the purpose of preparation of the provisional list and that obviously indicates that the members who are upto 31.3.2019 are to be considered for the purpose of inclusion since the year ending would be 31 st March and as such, the meaningful reading would indicate that the stand of the bank to include the members who are subsequent to due date of election are to be included as if who are on the roll upto 31st March 2020 is not correct. This stand of the bank is not possible to be accepted on a literal meaning of the statutory rule. Apart from that, sub-rule (2) is also giving a Page 49 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT clear indication about time schedule before which the Collector to receive provisional authenticated list. Additionally, here, undisputedly, the term has expired even according to the petitioners on 29.4.2020 and as such elections were to be conducted one month before, which, in any case, cannot be read as 31st March 2020 as suggested by petitioners about inclusion in the list.
(xiv) Rule 5 deals with particulars to be included in the provisional list of voters and Rule 6 is giving a remedy for raising objection, if any, with regard to such list, said Rule 6 reads as under:-
6. Claims and objections to provisional list of voters.
(1) When any provisional list of voters is published for inviting claims and objections, any omission or error in respect of the name or address or other particulars in the list may be brought to the notice of the Collector by any member of the society concerned who is a voter or any delegate authorised to vote on behalf of such society.
(2) Every person making a claim or raising an objection shall do so by a separate petition, which shall be presented to the Collector during office hours within seven days from the date on which the provisional list of voters is displayed on the notice board under sub-rule (2) or (5) of Rule 4, as the case may be.
(3) Every claim or objection shall be prepared in writing and state the grounds on which the claim is based or the objection is raised, as the case may be.
(4) The Collector shall, after considering each claim or objection give his decision thereon in writing to the person concerned within ten days from the date of receipt of the claim or objection under sub-rule (2) and take steps to correct the provisional list wherever necessary. The list as finalised by the Collector after deciding all claims and objections shall be the final list of voters.Page 50 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020
C/SCA/13286/2020 JUDGMENT
(xv) Rule 7 of the Specified Rules, 1982 is dealing with final list of voters and therefore, conjoint reading of all the statutory provisions clearly indicates the manner and method in which the bank is statutorily obliged to carry out the process for conducting election.
(2) In addition to the aforesaid Scheme of the Act and the Rules, relevant bye-laws are also to be taken note of and as such, revisiting to the bye-laws as attached to the petition compilation on page 52, the Court would like to quote relevant clauses of the bye-
laws.
(3) Clause (1) is dealing with name and registered office address, including the area of operation. Here, though this Preface of bye- laws is indicating that the area of operation of the bank will be the whole State of Gujarat, but its business may be extended to the Talukas of the district of the State. Now, for the purpose of registering, the bank must have forwarded the application for such and so, form of application for registration of the society deserves to be noted, which is attached to the byelaws on page 97 of the petition compilation. This form of application for registration of the society prescribed in Schedule-A in which the Bank while seeking registration has specifically indicated its area of operation to be Jamnagar District in Clause (4). Clause (5) relates to the objects of the society and if this object of the society to be read, is to provide an integrated system of agricultural and co-operative credit and to make loans to Co-operative Societies in Jamnagar District and to act as a balancing center for co-operative institutions in the district. License accordingly also originally came to be issued by the Reserve Bank of India, which has prescribed, on page 98, that area of operation of the bank shall be confined only to Jamnagar District of Page 51 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT Gujarat State. But, then, it appears that off late only on 7.6.2018 reflecting on page 99, some amendments were sought by the bank in which the area of operation is modified. Now, for what purpose, the same is modified is not reflecting but, then Clause (3) is indicating such villages and the area. This issuance of license is under the provisions of Section 22 of the Banking Regulations Act, 1949 and probably, same may be on account of either expansion of the business of the banking transaction or to avoid consequences if bank must have traveled its business beyond the area of operation.
(4) Be that as it may, the membership contained in Clause (08) has indicated that the persons other than the Co-operative institutions and all registered Co-operative societies within the area of operation are eligible for membership but this is with a view to availing the financial assistance from the bank. Clause (30) is relating to constitution of Board of Directors and since this clause is relevant to the issue, certain extracts from the same deserve to be reproduced hereunder:-
30. (i) CONSTITUTION OF BOARD OF DIRECTORS :
The 'Management and affairs of the Bank shall be entrusted to a Board of _ Directors which shall 'consist of 18 members, excluding 'State Government nominees as under:
(a) Ten Directors representing Taluka-wise agricultural credit, multipurpose and service Co-operative societies as mentioned below:
01. One Director. from such affiliated societies falling under the revenue area of the Jamnagar Taluka.
02. One Director from such affiliated societies falling under the revenue area of the Bhanvad Taluka.
03. One Director from such affiliated societies falling under the revenue area of the Jamjodhpur Taluka.
04. One Director from such affiliated societies falling Page 52 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT under the revenue area of the Kalyanpur Taluka.
05. One Director from such affiliated societies falling under the revenue area of the Jamkhambhalia Taluka.
06. One Director from such affiliated societies falling under the revenue area of the Kalavad Taluka.
07. One Director from such affiliated societies falling under the revenue area of the Dhrol Taluka.
08. One Director from such affiliated societies falling under the revenue area of the Jodia Taluka.
09. One Director from such affiliated societies falling under the revenue area of the Lalpur Taluka.
10. One Director from such affiliated societies falling under the revenue area of the Okhamandal Taluka.
11. Two Directors from all the affiliated societies falling under the revenue area of the Jamnagar District. These two thus elected members will function upto New Election.
(b) One Director representing Non-Agricultural Credit and Industrial Societies.
(c) One Director representing Marketing and Processing Societies.
(d) One Director representing Societies other than those mentioned in Clauses (a), (b) and (c).
(e) One Director representing members other than Co-operatives, he will function upto New Election.
(f) One Nominee of the State Co-operative Bank.
(g) One Director to be nominated by the Registrar.
(h) Deleted.
The aforesaid clause indicates specifically that all is depending upon the revenue area and accordingly, suitable number of Directors to be conferred a part in Board of Directors. The controversial area Page 53 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT here for the petitioners since relates to Jodia Taluka after bifurcation in August 2013, undisputedly, the villages in which the petitioner societies have approached this Court are no longer part of the revenue area of Jodia Taluka and upon bifurcation are forming part of the revenue area of Morbi District and as such, evidently, since this fact is not in dispute, the clause is to be read in that context. Even para (11) to Clause (30) is also indicating that two Directors from affiliated societies falling under the revenue area of the Jamnagar District. So, it is quite clear that though the petitioners are members of the respondent bank are undisputedly not now forming part of revenue area, the revenue area of Jamnagar District and as such, from the day of bifurcation, the petitioners cease to be from the revenue area of Jodia Taluka.
(5) Yet, another circumstance which is quite having an impact on the present controversy is few observations from some of the decisions delivered by the Division Bench of this Court which are not only attached by the petitioners but also by the authorities in their affidavit as well.
(6) Page 100 of the petition compilation is the decision in the case of Jasmuchbhai Karamsinhbhai Gambhava Vs. State of Gujarat reported in 2016(1) GLH 409, delivered by the Division Bench of this Court. In that case, the controversy was with regard to inclusion of those respondent Nos.5 to 15 in the provisional list of voters for the constitution of Jodia Taluka and inclusion was assailed on the ground that after bifurcation, vide notification dated 15.8.2013 issued by the Revenue Department of State of Gujarat. Some 14 villages are excluded from Jodia Taluka of Jamnagar District and were included in the revenue limits of Morbi Taluka and therefore, since respondent Nos.5 to 15 societies were no longer attached to the revenue limits of Jamnagar District, they cannot Page 54 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT participate in the election and their inclusion was improper in view of the byelaws of the bank. Now, the stand in that case was minutely examined by the Division Bench and it was found that the election was due in June/ July 2013 since the term of the managing committee had expired on 2.7.2013, whereas the notification came to be issued on 15.8.2013 and therefore, the above relevant time when elections became due, these respondent Nos.5 to 15 were forming part of the revenue limits of Jodia Taluka and therefore, the Court considered.
(7) However, the observations relate to the significance of the revenue area, deserve to be quoted hereunder since undisputedly, here the present petitioners are forming part of the revenue area of Morbi District and no longer remained in revenue area of Jodia Taluka. Para 3.4 relates to the basic challenge on which inclusion was assailed but para 6 has clearly indicated that the election became due in June/ July 2013 and since the Election Officer is required to prepare a provisional list of voters in view of the specific Rules, the Court observed that the aforesaid societies, i.e. respondent Nos.5 to 15, were members as on 31.3.2013 and were part of the revenue area of Jodia Taluka and keeping in view the effect of Rule 4, the Court observed that all persons who were members as on date of drawing up the accounts of the year immediately preceding year, in which the election is due, shall be included. Whereas, here, the fact situation is altogether different and as such, the observations contained on page 115 read as under:-
"15. Having thus briefly surveyed the scheme of the Act on the provisions of the Act and the Rules mentioned above, what we discover is that the structure of the cooperative societies from State level down to Taluka level is based on the revenue areas. A District and Taluka cooperative society is required to have its membership within Page 55 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT the District and Taluka. Elections to societies, federal or otherwise, are required to be conducted by the District Collector on the basis of the revenue areas of Taluka or District concerned. It is, therefore, not possible to accept the contention advanced on behalf of the petitioners that revenue area of Taluka or District has no relationship with the holding of elections to cooperative society of District or Taluka level. It is true that in the Gujarat Act, there are no parallel provisions as to be found in Section 18C of the Maharashtra Act to take care of the change in structure of cooperative societies in the event of change of area of Taluka or District. But for that reason alone, it cannot be held that under the Gujarat Act and the Rules framed thereunder, regardless of the change of the area of Taluka or District and without amending its byelaws, a cooperative society of primary level can send its members for vote or election to a federal society at Taluka level when such societies do not fall within the revenue area of that Taluka. In the absence of a provision analogous to Section 18C of the Maharashtra Act, to enable its members to exercise right of vote and contest from primary societies to federal society, it is incumbent on the society to amend its byelaws to restrict its election to the area of Taluka or District in accordance with Sec.13 of the Act. The Registrar can also invoke its authority for effecting corresponding change in the byelaws under Sec.14 of the Act to restrict election to members within the Taluka and District. There is great force in the submission made on behalf of the respondents that the right of a member to vote or contest as member of a primary society for election to federal society is to be regulated by the concerned byelaws of the federal society and if the bye laws restrict the membership to affiliated societies which fall within the Taluka, societies which fall outside the Taluka cannot claim right of vote and contest through their members or delegates. In this respect byelaw no.7(1) of Siddhpur Taluka Federal Cooperative Society and Patan Taluka Federal Cooperative Society are required to be seen, the copies of which were Page 56 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT passed on to us in the course of hearing. Byelaw No.7(1) in both the Taluka level federal societies at Patan and Siddhpur prescribe eligibility qualification for a member to be an individual or society existing and operating within the Taluka concerned. If that is the position of the byelaw, any member society or individual, who is not within the Taluka, merely by continuance of its membership on the register with primary society can claim no right to participate in election to the federal societies.
17. After examining the scheme of the Act and the relevant byelaws, the contention advanced on behalf of the petitioners, although attractive, is not acceptable. As we have stated above, the qualification, constitution and structure of the societies from State level down to Taluka level are based on the territorial revenue areas of District and Taluka. The Collector who is the Revenue Head of the District is empowered to hold the elections and his jurisdiction is limited to the District. Similarly, the Officers and Authorities on whom powers are conferred by the Collector for conducting elections have also territorial jurisdiction restricted to Talukas in which they are exercising the powers on behalf of the Collector. It is rightly pointed out on behalf of the respondents that if 27 primary cooperative societies, which no longer form part of Siddhpur Taluka and may seek affiliation to Unjha Taluka Federal Society,are allowed to vote and contest for election to Siddhpur Taluka, an imbalance would be created, adversely affecting the Federal Societies now falling in Unjha Taluka.
18. Keeping in view the envisaged structure of the Federal Societies in the Act, elections to them are required to be held only on the basis of existing revenue areas. It is also argued on behalf of the petitioners that merely by change of territorial area of Talukas, membership of primary societies or federal society would not automatically cease under any provision of the Act. It is also submitted that the area of operation and business activities of a federal society has no direct connection with the Page 57 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT revenue areas of a Taluka or District. In this respect, it is further contended that rights of individuals and societies as members of primary and federal societies cannot be adversely affected contrary to their rights provided in the byelaws only because of change of territorial area of the Talukas under the Bombay Land Revenue Code.
19. On the last argument, we may clarify that a member validly admitted to a primary or federal society has several rights qua member. By virtue of membership or as a share holder, he has a right to get advantage of his membership in the trade and business of the society. He has also other rights as member to have business transactions with the society. But in our considered opinion, his rights in society qua member to vote and contest are dependent upon his being a member (individual or society) residing or having its operations within a particular territorial jurisdiction of Revenue Taluka. If a society as a member or an individual as member ceases to belong to a Revenue Taluka, they cannot claim right to vote or contest as member of that society, in election of Federal Society of that Taluka. The byelaw No.7(1) of Taluka Federal Society have to be applied on the situation obtaining on the date of election. The contention advanced on behalf of the petitioners cannot be accepted that the word "Siddhpur Taluka" mentioned therein should be read to mean "Siddhpur Taluka" as it existed on the date of framing of byelaw No.7(1) and prior to delimitation of Taluka in the year 1997. In our opinion, such a construction and interpretation of the provisions of the Act and the byelaws would be destructive of the structure of cooperative societies based on revenue areas from apex down to district and taluka levels. Such interpretation will also adversely affect the elections to the federal society of other Talukas like Unjha within whose territorial area now the 27 cooperative societies fall. In the absence of an analogous provision as to be found in Maharashtra Act, on delimitation or change of area of Revenue Talukas, it is incumbent on the Page 58 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT concerned societies to amend their byelaws or for the Registrar to take suitable corrective or coercive action under Section 14.
9. A perusal of the abovereferredto observations made by the Division Bench of this Court makes it evident that the structure of the cooperative societies from State level down to Taluka level is based on the revenue areas. A District and Taluka Cooperative Society is required to have its membership within the District & Taluka. The elections to the societies, federal or otherwise, are required to be conducted by the District Collector on the basis of the revenue areas of Taluka or District concerned. While interpreting the provisions of Sections 4 and 6 of the Cooperative Societies Act, 1912, the Supreme Court in Apex Cooperative Bank of Urban Bank of Maharashtra and Goa Limited vs. Maharashtra State Cooperative Bank Limited, (2003) 11 SCC 66, has held that: in order to give societies a corporate existence without resort to the Companies Act, the Cooperative Societies Act, 1912 was enacted. Sections 4 and 6 thereof show that the Act essentially dealt with societies whose members were residing in the same town or village or group of villages or whose members were from the same tribe, class, caste or occupation. The object of the society had to be the promotion of interest of its members. This shows that the Cooperative Societies Act, 1912 was enacted for local societies.
The abovequoted principles would be applicable to the provisions of Section 6 of the Act which, inter alia, provide that no society with unlimited liability shall be registered unless all the persons forming the society reside in the same town or village or in the same group of villages.
Therefore, it is clear that the structure of cooperative societies from the State level to Taluka level is based on the revenue areas. Under the circumstances, it is not possible for this Court to accept the contention advanced on behalf of the petitioners that the revenue areas of Taluka and District have no relationships with the holding of elections to cooperative society Page 59 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT of District or Taluka level. Rule 4 of the Rules provides preparation of provisional list constituency wise as provided in the byelaws of the societies. It is not possible for this Court to hold that regardless of the change of the area of Taluka or District and without amending its byelaws, a cooperative society of primary level can send its members for vote or election to a federal society at Taluka Level when such societies do not fall within the revenue area of that Taluka. A member validly admitted to a primary or federal society has several right qua member. By virtue of membership or as a shareholder, he has a right to get advantage of his membership in the trade and business of the society. He has also other rights as member to have business transactions with the society. However, his rights in society qua member to vote and contest are dependent upon his being a member (individual or society) residing or havin its operations within a particular territorial jurisdiction of Revenue Taluka. If a society as a member or an individual as a member ceases to belong to a Revenue Taluka, it/he cannot claim right to vote or contest as member of that society in election of Federal Society of that Taluka.
10 The contention that in view of the provisions of Section 28(3) of the Act, the named of the societies situate within Savarkundla Revenue Taluka Could not have been excluded, has no merits. The provisions of Section 28 subsection (3) of the Act will have to be read subject to the provisions of the Rules. Section 28(3) of the Act provides that a society which has invested any part of its funds in the shares of another society, may appoint one of its members to vote on its behalf in the affairs of that society, and accordingly such member shall have the right to vote on behalf of the first society. However, there is no manner of doubt that the right to vote will have to be determined on the basis of the provisions of the Rules and as the primary cooperative societies situate within Savarkundla Revenue Taluka Were not the members of the Specified Society as on March 31, 2005 in terms Page 60 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT of Rule 4(1) of the Rules, they have no right to vote at the elections to the committees of the Specified Society.
(13)Therefore, when it is held that right to vote will have to be on basis of provision of Rules 1982 and as provided in Rule 4(1) of the Rules, only those persons who are members of the specified society on the date of drawing up accounts of the year immediately preceding the year, in which, election is due are entitled to included in the provisional list, as the villages in which, respondent nos. 5 to 15 are operating were as such in the Jodiya Taluka as on 31.3.2013 and in Jamnagar District as on 31.3.2013 and they were members of the concerned Bank as on 31.3.2013, considering Rule 4(1) of the Rules, no error has been committed by the Election Officer in including names of respondent nos. 5 to 15 in the provisional list of voters of Jodiya Taluka Constituency. The contention on behalf of the petitioner that the aforesaid would be contrary to byelaw no.30(1)(a) (8) is concerned, it is required to be noted that bye law cannot overrule the statutory rules. In the aforesaid decision in the case of Bhavnagar District Cooperative Bank Limited and Ors (supra), the Division Bench has specifically observed that right to vote at the election to the Managing Committee of the specified society is not governed by contract between the specified society and its members, but is governed by statutory Rules of 1982 and as provided in Rule 4(1) of the Rules.
(8) Yet, another decision will have to be referred to on significance of the revenue area, i.e. the decision delivered by another Division Bench referred to and attached on page 273, in the case of Siddhpur Taluka Co-operative Purchase and Sales Union Vs. State of Gujarat and others reported in 2002(2) GLH 773. The relevant observations contained in paragraph Nos.10,11, 12, 15, 17, 18 and 19 are relevant to examine the Page 61 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT present controversy but, substantially, earlier judgment is covering. To avoid unnecessary burden, paragraphs are not reproduced. So, the observations contained in the above-referred paragraphs are clearly indicating that the revenue area has got the impact on the issue of preparation of the list of voters and here, in the present case on hand, the petitioners are undisputedly not forming part of the revenue area of Jodia Taluka and are bifurcated and included in the revenue area of Morbi District since 12 villages of Jodia Taluka have been included in this newly created district much before even the election became due.
(9) Now, in the context of the aforesaid observations and effect of the provisions, few observations which are eye-catching from the recent decision delivered by the Division Bench of this Court in the recent past only on 22.7.2020 in Special Civil Application No.23321 of 2019 with Special Civil Application No.22742 of 2019, reflecting on page 127 of the petition compilation are clearly suggesting the conduct and attempt of the bank, including these petitioners societies, as to how they are under one pretext of the other evading the process of election to be concluded and as such, while considering the issue relating to when election became due and when term of the members of the managing committee has expired, while dealing with such issues at great length, the Division Bench after considering the elaborate provisions of the Act and the case laws, has clearly observed as under:-
18. Prior to the Amendment Act of 2015, the provisions of Section 74C(2) provided the term of the elected members as three years from the date on which the first meeting is held. Unfortunately, over the years, the elections to these cooperative societies could not be conducted in terms of the provisions of the Act. There were inordinate delays in concluding the elections.
Election processes were being challenged, stay orders Page 62 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT were being obtained and the persons who were in office continued to enjoy the benefit of the same. Those who were elected were not able to have full tenure of 3 years on account of such manipulative practices being adopted by the unscrupulous persons. In order to bring around some element of consistency and definiteness as regards the tenure of office of the elected members, the Act was amended making it mandatory to conduct the elections on the due dates and if elections are not conducted. the persons holding the post shall cease to hold the office. The amendment Act of 2015 seeks to address the aforesaid mischief by making it very clear that the five years tenure is to be computed from the day the member is elected and not from the date of the first meeting. The office bearers in a cooperative society are elected from amongst the persons elected as members. Therefore. the term of two and a half years of the office bearers is coterminous with the term of the Board. It is clear that the objective is to give a definite tenure of 5 years to an elected person.
19. Section 74C of the Act provides for the conduct of elections of the committees and officers of the specified societies and term of the members of the committees. The said section provides that: the elections of members of the committees and the officers of the Committee of the societies of the categories mentioned therein shall be subject to Chapter Xl- A and shall be conducted in the manner laid down by and under that chapter. One of the specified societies is the District Central Co-operative Bank, and therefore, the provisions of the said section will be applicable to the case at hand. The said Chapter contains Section 145A, which provides for application of all section of this chapter except the Section 145Z which shall apply to the elections to the committees of societies belonging to the categories specified in Section 74C. Section 145B provides definitions. Section 145B(b) defines "election" which means election of a member or members of the committee of a specified society. Clause (c) of Section 145B defines 'specified society" which means society belonging to any of the categories specified in Section 74C. Section 145C of the Act provides when election to be held and provides that every election shall be held as far as possible one month before the date on which the term of office of the members is due to expire. Section 145D of the Act provides for conduct of elections.
Page 63 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020C/SCA/13286/2020 JUDGMENT Section 145F of the Act provides disqualification of membership. Section 145U of the Act provides for disputes relating to elections to be submitted to the Tribunal. When the impugned provisions are read with Sections 145B(b) and 145C of the Act, the elections will become due on the expiry of the term of office of the members, which is five years. Therefore, the period of five years is the outer limit and the same cannot be breached.
41. The Respondent No.4 Bank is a specified society governed by the Act and its elections are held under the Gujarat Specified Cooperative Societies Elections to Committee Rules, 1982 (the Rules for short). There is a separate mode of conducting election wherein, the power of conducting election of the Managing Committee of the Respondent No.4-Bank is conferred upon the Collector, i.e. to the respondent No.2 herein. However, before any action could be taken by the Respondent No.2, i.e., the Collector in furtherance of declaration of election, it is incumbent on the part of the Respondent No.4-Bank to follow, in particular, the procedure set out in the Rule 3A and Rule 4 respectively of the Rules relating to the delimitation of the constituencies and preparation of the voters list for the purpose of election.
42. The term of the committee came to an end on 28th April, 2020 and as per Section 145C of the Gujarat Co- operative Societies Act, 1961 ('the Act' for short) the election is required to be held one month prior thereto i.e. 28th March, 2020. After completing the formalities as prescribed under Rule 3A and Rule 4 respectively of the Rules, the Respondent No. 4 Bank is obliged to forward the proposal for election to the District Registrar and the Collector respectively for conducting the election. However, in view of the time period provided under Rule 6(2), Rule 6(4) read with Rule 16 of the Rules the said proposal is required to be sent atleast 60 days prior to the date on which the election becomes due, i.e, on or before 28th January, 2020 and the same indisputably has not been done in the present case. If the Respondent No. 4 Bank was serious enough to hold the election in time, they could have forwarded the said proposal within the aforesaid time limit and the election could have then be completed, any time before 28th March, 2020. Even if one considers that owing to the Page 64 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT Lockdown. the term of the Committee which was originally to expire on 28th April, 2020 has been extended till 31st July, 2020 vide the State Government's notification dated 24th April, 2020, then in that case, the Society which was required to forward the proposal atleast 60 days before the date of election, has sent the same very recently vide letter dated 22nd July, 2020 (produced at Annexure-R3 at pg. 71 of the Affidavit-in-Reply), and the same was received by the office of the District Registrar on 23rd July, 2020. In view thereof, the Respondent No. 4 Bank could be said to have failed to act in compliance of the provisions of Rule 3A and Rule 4 respectively within time.
43. The State authorities are only concerned with the receipt of the election proposal after the finalization of the list of constituencies and the voters at the end of the Respondent No. 4 Bank. which was received for the first time on 23rd July, 2020. The machinery for conducting the election sets in motion only after the election proposal is received atleast 60 days before the date of election. Therefore, it was the bounden duty of the Respondent No.4 Bank to complete the process within the time bound manner, which has not been done in the present case.
After analyzing every situation and the detailed contentions, it is clearly observed that it was the bounden duty of the respondent No.4 to complete the process within the time schedule, which has not been done, as found by the Division Bench, and as such, keeping the entire circumstance in mind, the Court has issued certain directions to complete the election within four months. The said operative part of the decision contained in para 50 reads as under:-
"50. We dispose of the Special Civil Application No.22742 of 2019 with the following directions;
(I) The election of the respondent Bank shall be held within a period of four months as Mr. Kamal Trivedi, the learned Advocate General has made a statement that the elections will be held within three months, still, we are granting four months' Page 65 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT time.
(II) Till the fresh Managing Committee is elected, the present dispensation of managing the affairs of the bank would continue, however, with a rider that from 1st August, 2020 onwards, no policy decision shall be taken by the present Managing Committee, however, the day to day affairs would be managed. In case of any situation arising of some policy decision to be taken, then the same would be after the due approval of the Registrar of the Co-operative Societies."
11. So, in light of the aforesaid entire situation and the observations of various decisions in co-relation to the statutory provisions contained under the Act and the Rules, this Court is of the clear opinion that no case is made out to assail the impugned communication dated 14.10.2020 reflecting on page 256 and the amended relief as well. The said decision dated 14.10.2020, if to be closely perused, what has been demanded that the members who were upto 31.3.2019 for the whole year deserve to be included in the list of voters since the election became due on 28.3.2020 and as such, obviously 31.3.2020 situation cannot come into play and for that purpose, the respondent bank was directed righly to provide particulars strictly in consonance with the statutory rules and the position relates to it. Simply because the term of the committee is extended upto July 2020 will not permit or give any leverage to the Bank to include all members who were upto 31.3.2020. If this be read in the context in which the petitioners and the respondent bank have put up their case, the effect of statutory Rule would lose its significance and harmonious reading the aforesaid statutory scheme and provisions is not permitting this Court to accept the stand of the petitioners and as such, apparently, there seems to be no illegality or irregularity of any nature in the order impugned issued by the Election Officer and the Deputy Collector, Jamnagar. Since the petitioners were quite aware about the earlier decision Page 66 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT delivered by the Division Bench in the month of July 2020 ought to have cooperated with the process instead of raising the issues one after the other and trying to see that no process of election shall be concluded. Their interest seems to be just to thwart the process and to continue to retain in the management which in no circumstance permissible and as such, the conduct of the petitioners as well as the bank seems to be quite innocuous for which the Court would not like to exercise the extraordinary jurisdiction equitable in nature.
12. Additionally, in view of aforesaid discussion and the analysis of the background of fact, the stand taken by the petitioners even in the draft amendment is not possible to be accepted by this Court. It is not correct on the part of petitioners that since the bank has already prepared a provisional list and forwarded, the same should be accepted by the authority. This is in view of the fact that the petitioners are already stated to be outside the revenue district and as such, without much resistence on these issues as it has been elaborated earlier, the contention tried to be raised are not possible to be accepted by the Court. Hence, even the impugned order dated 23.11.2020 also requires no interference.
13. Further, in any case, if this is the ultimate grievance of the petitioners about non-inclusion of the petitioner societies as indicated by officer in the impugned communication, then also, there are stages where such grievance can be voiced out. Bare perusal of the Rule 6 as well as other statutory provisions contained under Section 145-U of the Act, there is a specific remedy available to the petitioners and, therefore also, it is not proper on the part of petitioners to just rush down to the Court at every stage and make an attempt to thwart the process of election which otherwise is directed to be concluded within a stipulated time. The approach of the bank is also self-explanatory. This having visualized Page 67 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020 C/SCA/13286/2020 JUDGMENT from the chronology of events and the observations made by the Division Bench of this Court which passed an order in July, 2020, the Court is not inclined to exercise extraordinary jurisdiction. With respect to contention about the due date and other issues, they have substantially been gone into in the previous proceedings and as such, no case is made out by the petitioners.
14. So far as the contention with regard to the discrimination by including the societies of Bhanwad Taluka is concerned, adequate clarification and submission is made by the learned Government Pleader that there revenue are is not disturbed and as such, in the absence of any challenge to their inclusion, such issue related to discrimination is out of place to be considered at this stage, as prima facie, the said submission does not appeal to the Court. On the contrary, this Court is of the opinion that the petitioners and the bank must allow the election to be concluded in a time schedule. Any interference at this stage would clearly come in conflict with the earlier time schedule framed by the Division Bench after extensive hearing to all the concerned parties to the proceedings. That being the position, the Court is not inclined to accept the petitions in any form. Hence, the petitions being devoid of merit, deserve to be dismissed. Accordingly, both petitions stand DISMISSED with no order as to costs. Notices discharged.
(ASHUTOSH J. SHASTRI, J) NAIR SMITA V. Page 68 of 68 Downloaded on : Fri Dec 18 03:06:00 IST 2020