Gujarat High Court
Valsad District Co-Operative Milk ... vs The Deputy Secretary (Appeals) on 19 January, 2024
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/LPA/19/2024 ORDER DATED: 19/01/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 19 of 2024
In
R/SPECIAL CIVIL APPLICATION NO. 15604 of 2022
With
CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of
2024
In R/LETTERS PATENT APPEAL NO. 19 of 2024
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VALSAD DISTRICT CO-OPERATIVE MILK PRODUCERS
UNION LTD. VASUDHARA DAIRY
Versus
THE DEPUTY SECRETARY (APPEALS)
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Appearance:
MR DILIP B RANA(691) for the Appellant(s) No. 1
for the Respondent(s) No. 1,2,3
MR KRUTIK PARIKH, AGP, for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS.
JUSTICE SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P.
MAYEE
Date : 19/01/2024
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS.
JUSTICE SUNITA AGARWAL)
1. Mr. Dipen Desai, the learned counsel seeks to intervene in the instant appeal on the premise that the action was taken against the Page 1 of 7 Downloaded on : Fri Feb 02 20:59:21 IST 2024 NEUTRAL CITATION C/LPA/19/2024 ORDER DATED: 19/01/2024 undefined appellant on the complaint filed by the interveners. There is no intervention application before us. It seems that the applications were filed before the learned Single Judge, which have been disposed of while dismissing the writ petitions on the premise that the said applications do not survive.
1.1 In our considered opinion, the request to seek intervention by the complainant is not acceptable, in as much as, the complainant has no right to intervene in the proceedings before us, which are arising out of the writ petition challenging the orders passed by the Registrar under Section 71 of the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as "the Act, 1961") .
2. The notice of the instant appeal has not been served in the office of the learned Government Pleader, though Mr. Krutik Parikh, the learned Assistant Government Pleader appears for all the three respondents herein.
3. Heard the learned counsel for the appellant and perused the record.
4. The instant appeal is directed against the common judgment and order dated 29.11.2023 passed by the learned Single Judge in the writ petitions. The challenge before the Writ Court was to the order dated 12.05.2022 passed by the Deputy Secretary (Appeals), Agriculture, Farmers' Welfare and Cooperation Department, as also the orders all dated 15.01.2021 passed by the Registrar, Co-operative Societies, refusing to grant permission under the provisions of Section 71 of the Act, 1961. The appellant herein is a District Co-
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operative Milk Producers Union Limited described in the type of society in Part-II of Schedule-A of the Gujarat Cooperative Societies Rules, 1965 (in short, "the Rules, 1965") framed under the Act, 1961. The issue raised in the writ petitions was pertaining to the provisions of Section 71(1)(ff), whereby the societies have been restrained from investing in land or building by a society without the previous sanction of the Registrar.
5. The first submission raised before the Writ Court, as also before us by the learned counsel appearing for the appellant is about the applicability of clause (ff) of sub-section (1) of Section 71 of the Act of 1961 with respect to the appellant society, which is the District Co-operative Milk Producers Union Limited. The contention is that the clause (ff) was inserted in the Act, 1961 with the amendment vide Gujarat Act No. 1 of 2008 with effect from 08.10.2007. The Statement of objects and reasons of the Gujarat Act No. 01 of 2008 has been pressed into service to assert that the reason for inserting clause (ff) in sub-section (1) of Section 71 of the Act, 1961 was to give relief to the Primary Agriculture Credit Cooperative Societies, which were facing financial crunch at the relevant point of time. Much emphasis has been laid on the statement made therein to assert that the appellant society being a District Co-operative Milk Producers Union Limited cannot be said to be covered by clause (ff) of sub-section (1) of Section 71 of the Act, 1961.
5.1 We find inherent fallacy in the said arguments of the learned counsel for the appellant for the simple reason that the word "society" used in clause (ff) of sub-section (1) of Section 71 of the Page 3 of 7 Downloaded on : Fri Feb 02 20:59:21 IST 2024 NEUTRAL CITATION C/LPA/19/2024 ORDER DATED: 19/01/2024 undefined Act of 1961 has been defined in Section 2(19) of the Act of 1961 in the following manner:-
"2(19) "society" - a co-operative society registered, or deemed to be registered, under the Act."
A bare reading of Section 2(19) of the Act, 1961 with clause (ff) of sub-section (1) of Section 71 makes it clear that the restraint put in place therein applies to every cooperative society registered or deemed to be registered under the Act of 1961. It is settled law of statutory interpretation that the Statement of Objects and Reasons cannot be used to limit the scope of the Statute, which have to be given its due meaning on reading of the Statute itself. The Statement of Objects and Reasons are external aid to the Statute, which cannot be used to qualify the words in the Statute or limit its meaning.
6. Coming to the second argument made by the learned counsel for the appellant that the rider put in place under Section 71 of the Act, 1961 prohibiting a society to invest or deposit its fund in any land or building as contained in clause (ff) of sub-section (1) of Section 71 of the Act, 1961 is applicable in a case of investment of extra funds possessed by the society. The appellant society herein has invested its fund for construction of building for the purpose of business of the society and, therefore, the provisions of clause (ff) of sub-section (1) of Section 71 of the Act, 1961 would not be attracted.
6.1 To deal with this submission, suffice it to note that no foundational facts have been laid in the Writ Petitions to substantiate the said submissions, which are being made by the learned counsel Page 4 of 7 Downloaded on : Fri Feb 02 20:59:21 IST 2024 NEUTRAL CITATION C/LPA/19/2024 ORDER DATED: 19/01/2024 undefined for the appellant before us. In absence of any factual statement in the writ petitions in this regard, we are not in a position to appreciate the arguments made by the learned counsel for the appellant. Noticeable is the fact that an audit query was raised in the year 2014- 2015 with regard to certain purchases made by the society as is evident from the averments made in the writ petition. As a result of the same, the appellant had approached the Registrar seeking for ex- post facto sanction for the purchases made by it. This fact itself is sufficient to discard the submission of the learned counsel for the appellant that the investment made by the society was for the purpose of the business of the society only. We may further record that in paragraph '2.9' of the writ petition, it is submitted that the Executive Committee of the appellant/petitioner Union, on 24.12.2019, made a proposal for approval under Section 71 of the Act, 1961 to the Registrar to seek ex post facto approval for the investments made during the year 1981-2019, which were approved in the Board Meeting of the Union. Similarly, in paragraph '2.4.9', it is stated that an audit query was raised for the first time in the year 2014-2015 with regard to the lands purchased at Dhulia, Maharashtra, whereas the area of business or the operation of the society is confined to the State of Gujarat.
7. For the above noted facts, we do not find any substance in the submissions of the learned counsel for the appellant.
8. We may also refer to Rule 29 contained in Chapter-V of the Gujarat Co-operative Societies Rules, 1965, which reads as under:-
"29. Investment of Funds.- (1) With the previous sanction of the Registrar any society may invest its funds or a portion Page 5 of 7 Downloaded on : Fri Feb 02 20:59:21 IST 2024 NEUTRAL CITATION C/LPA/19/2024 ORDER DATED: 19/01/2024 undefined thereof [(a) [***]
(b) in loans raised by a local authority in the State under the authority of the Local Authorities Loans Act, 1914 (IX of 1914).
(c) in the purchase or leasing of land or buildings, and in the construction of buildings:
Provided that the purchase of such land or the construction of such building is likely to be advantageous to the society in the conduct of its business, (2) Notwithstanding anything contained in sub-rule (1), an urban co-operative bank-
(a) which has a paid up share capital of not less than Rs.
50,000, and a reserve fund of not less than Rs. 50,000.
(b) which has completed ten years from the date of its registration, and
(c) which is classed A or B at the last audit made under Section 84, may invest its surplus funds in such shares or debentures of any company registered under the Companies Act, 1956 as may be approved by the Registrar."
The said rule, which is existing on the Statute Book since the inception of the rules provides for the previous sanction of the Registrar for investment of the funds of the society or a portion thereof, in the purchase or leasing of land or buildings, and in the construction of building provided that the purchase of such land or construction of such building is likely to be advantageous to the society in the conduct of its business.
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9. For the above discussion, in addition to the reasoning given by the learned Single Judge, we do not find any error in the judgment and order dated 29.11.2023, wherein the learned Single Judge has categorically recorded that there is no provision validating the transaction or granting ex post facto sanction under Section 71(1)(ff) of the Act, 1961. The appeal is, thus, found devoid of merits and hence dismissed. The connected civil application does not survive and the same is disposed of, accordingly.
10. We may further clarify that the issue raised before us is confined to the power of the Registrar for grant of ex post facto sanction to the investments made by the society. The remedy available to the appellant society in the matter of audit report, if any, would not be guided by any of the observations made herein above.
[ Sunita Agarwal, CJ. ] [ Aniruddha P. Mayee, J. ] hiren Page 7 of 7 Downloaded on : Fri Feb 02 20:59:21 IST 2024