BILESHWER KHAND UDYOG KHEDUT SAHAKARI MANDALI LIMITED v. STATE
1993-03-03
S.NAINAR SUNDARAM, SHARAD D.DAVE
body1993
DigiLaw.ai
S. NAINAR SUNDARAM, J. ( 1 ) THIS Letters Patent Appeal is directed against the order of the learned single Judge in Special Civil Application No. 5609 of 1982. The petitioners in Special Civil Application are the appellants herein and the respondents in the Special Civil Application are the respondents herein. For respondents Nos. 1 to 6 there is representation by the Assistant Government pleader. For respondents Nos. 7 and 8 there is representation by Mr. Shirish J. Joshi. ( 2 ) THE appellants challenge the proceedings under Sec. 80 (2) of the Gujarat co-operative Societies Act, 1961, hereinafter referred to as the Act, dated 17-12-1982, whereunder respondents Nos. 7 and 8 were appointed as the government nominees in appellant No. 1-Society. The learned single Judge, amongst two contentions, was asked to deal with the contention that the impugned proceedings have come to be passed without appellant No. 1-Society being heard on the question and this violated the principles of natural justice. The learned single Judge found that by express verbalism of Sec. 80 (2) of the Act, there is no such obligation cast upon the State Government to hear the concerned Society and the learned single Judge declined to read any such obligation into that provision, as coveted on behalf of the appellants. Before us this contention alone is being put forth in the fore front for the purpose of asking interference at our hands in Letters Patent Appeal. The learned single Judge dismissed the Special civil Application negativing also the other contention built upon the allegation of mala fides. ( 3 ) MR. Harin P. Raval, learned Counsel for the appellant would submit that though there is no express provision adumberated in Sec. 80 (2) of the Act enjoining upon the State Government to hear the concerned society before making nominations of the State Governments representatives on the committee of the society under Sec. 80 (2) of the Act, yet such an obligation has got to be read into the provision, as laid down by the pronouncement of a Bench of this Court in Amreli District Cooperative sale and Purchase Union Ltd. and Ors. v. State of Gujarat, [1984 (2)] XXV (2) GLR 1244.
v. State of Gujarat, [1984 (2)] XXV (2) GLR 1244. ( 4 ) SECTION 80 of the Act as a whole reads as follows :"80 (1) Where the State Government has subscribed the share capital of a society, directly or through another society, or has guaranteed the repayment of the principal of and payment of interest on, debentures issued or loans raised by a society, the State Government shall, notwithstanding anything contained in the byelaws of such society, have the right to nominate three representatives on the Committee of such society, in such manner as may be determined by the State Government from time to time. The members so nominated shall hold office during the pleasure of the state Government, or for such period as may be specified in the order by which they are appointed, and any such member on assuming office shall have all rights, duties, responsibilities and liabilities as if he were a member of the committee duly elected. Explanation :- Any nomination of the Registrar or his nominee on the Committee of a society under the bye-laws of such society shall not be construed as nomination of the representative on that Committee in exercise of the right of the State Government under this sub-section. (2) Where the State Government is of the opinion that having regard to the public interest involved in the operation of a society it is necessary or expedient so to do, it may nominate its representatives on the committee of such society as if the State government had subscribed to the share capital of the society and the provisions of sub-sec. (1) shall, so far as may be apply to such nomination. "while sub-sec. (1) of Sec. 80 speaks about the right of the State Government to nominate three representatives on the committee of a society, to the share capital of which the State Government has subscribed or to which the State Government has extended the guarantee spoken to in that provision; sub-sec. (2) of Sec. 80 gives the State Government right of nomination of its representatives on the committee of a society, if the State Government forms an opinion that it is necessary or expedient to do so, having regard to the public interest involved in the operation of the society.
(2) of Sec. 80 gives the State Government right of nomination of its representatives on the committee of a society, if the State Government forms an opinion that it is necessary or expedient to do so, having regard to the public interest involved in the operation of the society. In the above case cited before us, the Bench of this Court was asked to examine the grievance with reference to the constitutional vires of Sec. 80 (2) of the Act introduced by Amending Act, 1982, on the ground that the said provision does not provide for hearing opportunity. The Bench held as follows :"sec. 80 (1), it should be recalled, empowers the Government to nominate its representatives not exceeding three on the committee of a society to the share capital of which the State Government has directly or indirectly subscribed or has guaranteed the repayment of the principal and interest on debentures issued or loans raised by such society. We do not think that any hearing opportunity should be provided in case where the power is exercised for nominating the representatives on the committee of a society to the share capital of which the State Government has directly or indirectly subscribed or where the payment of the principal and interest amount on debentures issued by the society is guaranteed, because in the very agreement of the guarantee such a provision has necessarily to be made, or in the Bye-laws where the Government has subscribed to the share capital. It is only in those cases where the power is sought to be exercised under new sub-sec. (2) of Sec. 80 which is inserted in the principal Act by Sec. 16 of the impugned amending Act, 1982 that a grievance can be validly made that before such a power is exercised in public interest to nominate its representatives on the committee as if the State Government has subscribed to the share capital of the society. The power is really very wide and extensive power that we must read in sub-sec. (2) the obligation on the State Government to hear the society in respect of which the State Government proposes to exercise the said power since otherwise one of the conditions for exercise of the power, namely, exigency in public interest, is too relative depending upon the subjective satisfaction of the officer concerned.
(2) the obligation on the State Government to hear the society in respect of which the State Government proposes to exercise the said power since otherwise one of the conditions for exercise of the power, namely, exigency in public interest, is too relative depending upon the subjective satisfaction of the officer concerned. We are therefore, of the opinion that before the power can be exercised under sub-sec. (2) of Sec. 80, the State Government must hear the society concerned in respect of which the power of nomination is proposed to be exercised. " ( 5 ) WHEN we take note of the above ruling of the Bench, we find that the attack on the impugned proceedings from this angle has got to be sustained, since, admittedly, there was no hearing of appellant No. 1-Society before the passing of the impugned proceedings. ( 6 ) APART from the ruling expressed by the Bench of this Court in the earlier pronouncement, by looking into the implications of Sec. 80 (2)) of the act in the light of the other provisions of the Act, we have no ambiguity in our mind that the application of the process thereunder results in an order which impinges upon the autonomy of the society and this leads to civil consequences. Under Sec. 80 (1), the State Government acquires a right to nominate three representatives on the committee of the society on the footing of its having subscribed to the share capital or extended the guarantee as contemplated therein. But under Sec. 80 (2), the society is not placed in such a situation. The State Government is not a subscriber to the share capital or a guarantor. Such a society, the elements present in Sec. 80 (1) not being there, normally is entitled to be governed only by bodies elected, and in that view, it should remain autonomous. But that right to function autonomous is intruded and invaded upon, when the State Government chooses to nominate its representatives when it forms an opinion that it is necessary or expedient to do so, having regard to the public interest involved in the operation of the society. The formation of the opinion and the expression of it, by setting in motion the process under Sec. 80 (2) do have repercussion adverse to the autonomy of the society. Thus, the proceedings do involve civil consequences.
The formation of the opinion and the expression of it, by setting in motion the process under Sec. 80 (2) do have repercussion adverse to the autonomy of the society. Thus, the proceedings do involve civil consequences. Even if we construe the proceedings under Sec. 80 (2) as only administrative they leading to civil consequences, must adhere to the principles of natural justice. The law must now be taken to be well settled that even in administrative proceedings, which involve civil consequences, the doctrine of natural justice must be held to be applicable. The statute as such need not speak expressly to that effect. The silence of the statute has no exclusionary effect on the application of the principles of natural justice, when the proceedings prosecuted thereunder result in civil consequences. Time after time, it has been pointed out that the aim of the principles of natural justice is to secure justice or to put it negatively, to prevent miscarriage of justice. These principles do take the place in areas not specifically covered by statute law. When we take note of the above propositions, we are bound to countenance the grievance of the appellants that the impugned proceedings had come to be passed in violation of the principles of natural justice. In this view, we are not able to subscribe our support to the opinion of the learned single Judge on this question. ( 7 ) ACCORDINGLY, we allow this Letters Patent Appeal, set aside the order of the learned single Judge, subject-matter of this Letters Patent appeal. Special Civil Application No. 5609 of 1982 will stand allowed and the proceedings impugned therein will stand quashed. If the concerned of the respondents still have a mind to prosecute afresh the process under Sec. 80 (2)) of the Act, the liberty is theirs to do so in accordance with law and conforming to the principles of natural justice. We make no order as to costs. .