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Gujarat High Court · body

2002 DIGILAW 819 (GUJ)

SHAMBHUBHAI JETHABHAI PATEL v. STATE

2002-10-23

J.N.PATEL

body2002
JAYANT PATEL, J. ( 1 ) RULE. Mr. Sompura, learned AGP, who is directed to appear on behalf of respondents No. 1, 2, 3, and 4, appears and waives service of notice of rule on behalf of respondents No. 1, 2, 3, and 4. Mr. Pushpadatta, learned Counsel appearing by caveat on behalf of respondent No. 5 waives service of notice of rule. With the consent of the parties, the matter is taken up for final hearing today. ( 2 ) THE present petition is preferred by the petitioner against the order dated 7-10-2002 passed by the State Government in exercise of revisional power under Section 155 of the Act, whereby the order dated 15-6-2002 passed by the Additional Registrar (Appeals) as well as the order dated 15-5-2002 passed by the Assistant Registrar for the purpose of grant of registration to the petitioner Society are set aside and the revision is allowed. ( 3 ) MR. H. P. RAVAL, learned Counsel for the petitioner raised the contention that the right to form an association is a fundamental right and it can only be restricted as per the statutory provisions. He has submitted that there is one society, respondent No. 5 herein, which is in existence since last 50 years and for the whole working area of the said society, there are 1290 khatedars. Since the said society is not effectively functioning, the members of the society decided to form a separate society. Mr. Raval submitted that in the working area, which is included the area of the petitioner society, out of the 1290 khatedars, 500 khatedars are falling within the working area of the petitioner society. Mr. Raval submitted that so far as respondent No. 5 society is concerned, it is comprising of eight villages, whereas the petitioner society is for a particular village from amongst the said eight villages. Mr. Raval submitted that when the Assistant Registrar formed an opinion that it is a fit case for granting registration and the same is also confirmed by he Additional Registrar in appeal, subject to the modification as mentioned in the order, the State Government could not have reversed the findings. Mr. Mr. Raval submitted that when the Assistant Registrar formed an opinion that it is a fit case for granting registration and the same is also confirmed by he Additional Registrar in appeal, subject to the modification as mentioned in the order, the State Government could not have reversed the findings. Mr. Raval also submitted that the State Government, while exercising the revisional power, has not taken into consideration, that after registration was granted to the petitioner society, it has functioned until the order passed by the State Government and as a result thereof it has enrolled 165 members and it has collected deposits and it has also granted loans to its members by getting loan from the Sabarkantha District Cooperative Bank. He submitted that if the registration is cancelled, it may result into affecting the rights and liabilities and complication for the recovery also. Mr. Raval submitted that as a matter of fact, there cannot be a monopoly of respondent No. 5 society to continue to operate in the working area. When the members of the petitioner society has decided to form an association, the same cannot be foreclosed by the State Government in an cursory manner. He submitted that the order passed by the State Government is without proper reason and without proper material on record the State Government has upset the findings and hence the order passed by the State Government deserves to be quashed and set aside. Mr. Raval further submitted that out of 1290 khatedars falling in the working area of respondent No. 5 society, the khatedars staying in working area of petitioner society society are 500 in all, and out of the said 500, khatedars residing in the working area, the member of the respondent No. 5 society are only 50. Therefore, he submitted that this shows that respondent No. 5 is not rendering good service in the working area, which made the members of the petitioner society to form a separate society. ( 4 ) ON behalf of the respondents No. 1, 2, 3, and 4, Mr. Sompura, learned AGP has supported the order and Mr. Vyas, learned Counsel appearing for respondent No. 5, while supporting the order, has inter alia contended that the members of respondent No. 5 society, who are defaulters are also admitted as the members by the petitioner society. Sompura, learned AGP has supported the order and Mr. Vyas, learned Counsel appearing for respondent No. 5, while supporting the order, has inter alia contended that the members of respondent No. 5 society, who are defaulters are also admitted as the members by the petitioner society. He submitted that the working area of the petitioner society is forming part of the working area of respondent No. 5 society and, therefore, the State Government has rightly found that it is having adverse financial effect upon the functioning of respondent No. 5 society. ( 5 ) HOWEVER, after hearing it was put to the learned AGP as well as to Mr. Vyas, appearing for respondents by the Court as to whether they have any objection if the order of the State Government is modified to the effect that the cancellation of the registration of the petitioner society would not adversely, in any manner, affect the rights and liabilities regarding the financial transactions entered into by the societies with its members or with any third parties and in response thereto, the learned AGP has left the matter to the Court, whereas Mr. Vyas, upon instructions, has stated that he has no objection if the order is modified to that extent. ( 6 ) HAVING considered the above, I find no substance in the contention of Mr. Raval that the State Government has not recorded valid reasons for the purpose of passing the order. The perusal of the order passed by the State Government, annexed at page 126 of the petition, clearly shows that the reasons are recorded by the State Government that if the petitioner society is granted registration, it will have adverse effect on the financial interest of respondent No. 5 society, more particularly because respondent No. 5 society is functioning since last 50 years and the State Government has also recorded that the defaulter members will get themselves admitted in the petitioner society and it would also affect the public money. Apart from that, the Additional Registrar (Appeals) while passing the order dated 15-6-2002, has also put up the condition that no member, who has received loan from respondent No. 5 society shall be admitted as member of the petitioner society and if the loan is obtained by others, the same shall be recovered within six months and until then, finance shall not be provided. The aforesaid clearly shows that the financial interest of respondent No. 5 society is found to be interwoven and interconnected in the functioning of petitioner society, and it also shows that there is a financial involvement and the finance has been granted by respondent No. 5 society to the members, which is required to be recovered. It is apparent that the functioning of the petitioner society would adversely affect the financial interest of respondent No. 5 society. Inspite of the same, instead of considering the basic requirement of Section 4, the Registrar has found himself satisfied by putting condition. In my view, once it is found that the granting of the registration would affect adversely to the financial interest of the existing society, the consequence would be that the registration should not be granted to such society, since the same may result into the breach of cooperative principles also. That apart, even as per the contention of the petitioner, though there may be eight villages in the working area for respondent No. 5 society, the fact remains that in all there are 1290 Khatedars, out of which, as per the petitioner, 500 khatedars are residing in the working area of the petitioner society. So roughly about more than 40% of the khatedars are in the working area of the petitioner society. If for 40% of the khatedars, a separate society is registered, in reality or rather reasonable conclusion can be drawn that it would financially affect the interest of respondent No. 5 society. So far as the contention raised by Mr. Raval, regarding the number of khatedars is concerned, in my view, merely because a few khatedars in the working area are the members of respondent No. 5 cannot be said to be a valid ground for testing the functioning of respondent No. 5 society. The fact that out of a total 1290 khatedars, 500 khatedars are residing in the working area of the petitioner society, which itself got to show that if a new society is formed for 500 khatedars separately, it would have an adverse effect on the functioning of respondent No. 5 society and, therefore, I cannot accept the contention raised on behalf of the petitioner. In any case, this Court while exercising power under Article 226 or 227 of the Constitution of India cannot reappreciate the evidence. In any case, this Court while exercising power under Article 226 or 227 of the Constitution of India cannot reappreciate the evidence. When the State Government upon the material available with it, has found that the granting of registration to the petitioner society would adversely, affect the financial interest of respondent No. 5 society, this Court would not exercise its constitutional power as that of the appeal and, therefore, no fault can be found with the reasonings recorded by the State Government while allowing the revision to that extent. ( 7 ) HOWEVER, the last contention raised by Mr. Raval regarding making room for maintaining the rights and liabilities of the society during the period when the society functioned, from the date of the registration until the State Government passed the order, deserves consideration. In my view, the State Government while exercising revisional jurisdiction ought to have taken into consideration the said aspect with a view to see that neither the financial institutions suffer, nor the members of the society can get away from the liabilities, which otherwise would be there, had the society continued. In my view, it was required for the State Government to take care of the said aspect but since the said aspect is overlooked by the State Government, the order of State Government deserves to be modified. In my view, such modification would be rather in the interest of all concerned and if such modification is not made the person concerned may get opportunity to have undue benefits. ( 8 ) IN view of the above discussion, while maintaining the order of the State Government for cencellation of registration of petitioner society, it is further clarified that the rights and liabilities of all concerned during the period when the petitioner society functioned, from 11-5-2002 until the order of the State Government, shall not, in any manner, be affected and it will be open to the parties concerned who are covered by the transactions entered into by and on behalf of the petitioner society, to take recourse for the purpose of enforcement and recovery of the loan, settlement of transactions, deposits, etc. ( 9 ) THE petition is partly allowed to the aforesaid extent. Rule is made absolute accordingly. There shall be no order as to costs. .