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Gujarat High Court · body

2005 DIGILAW 786 (GUJ)

Jai Ambe Hari Om Fal, Shak Bhaji Utpadako Ni Sahkari v. STATE OF GUJARAT

2005-11-25

K.M.MEHTA

body2005
K. M. MEHTA, J. ( 1 ) SHREE Jai Ambe Hari Om Fal And shak Bhaji Utpadako Ni Sahakari Mandli limited - the petitioner which is a cooperative Society under the provisions of the Cooperative Societies Act, 1961 (hereinafter referred to as "the Act") has filed this petition under Article 226 and 227 of the Constitution of India praying for a writ of mandamus as well as certiorari for quashing and setting aside the order dated 3rd February, 2005 passed by the Deputy secretary (Appeals), Agriculture and cooperation Department produced at annexure-A to the petition (hereinafter referred to as "impugned order" ). By the impugned order, the Deputy Secretary has stayed the order of the District Registrar dated 10. 9. 2005 and remanded the matter to the District Registrar to decide the same in accordance with law. ( 2 ) THE relevant facts of the case giving rise to this petition are as under: ( 3 ) THE petitioner is a Co-operative society registered under the provisions of the act. The petitioner is a member of Baroda district Central Co-operative Bank Limited (hereinafter referred to as "the Bank") (respondent No. 4, herein ). The petitioner being a member of the Respondent No. 4-Bank takes finance from Respondent No. 4. ( 4 ) IT is the case of the petitioner that being a member of the Respondent No. 4-Bank, the petitioner is interested in proper functioning and lawful administration of the respondent No. 4-Bank and is, also, interested to ensure that the financial soundness of Respondent No. 4-Bank is regained which is ruined due to individual and collective irregularities committed by respondent No. 3 and other members of the erstwhile managing committee of Respondent no. 4-Bank i. e. , Baroda District Central cooperative Bank Limited ( 5 ) FURTHER, Respondent No. 4 is a district Central Cooperative Bank. Its statutory inspection is conducted under section 35 of the Banking (Regulation) Act, 1949 which provides for inspection. National agricultural Bank for Rural Development (NABARD), also, monitors the functioning of the Bank. ( 6 ) IT is the case of the petitioner that the order impugned in the petition is passed with respect to the investment of a sum of rs. 3 crores (Rupees three crores) made by the Directors of the Bank of which respondent No. 3 was a Director, in CRB capital Market Limited somewhere in June 1996 to August 1996. 3 crores (Rupees three crores) made by the Directors of the Bank of which respondent No. 3 was a Director, in CRB capital Market Limited somewhere in June 1996 to August 1996. It is the case of the petitioner that the said CRB Capital Market limited (hereinafter, referred to as the company) was created with big promises which were not intended to be fulfilled. It is the case of the petitioner that respondent no. 3 who was a member of the Trust of public funds made investment in the company and due to that the said Bank has sustained a loss of the principal sum and also the interest which would have been accrued thereon, had the said investment not been made. ( 7 ) IT is also the case of the petitioner that even before 18th September, 1997, special Auditor for the Cooperative Society reported and recommended to the Registrar, credit Society, proposing to initiate action against all the erstwhile Board of Directors of the said bank under Section 76b of the act. Letter dated 18. 9. 1997 addressed to the district Registrar is annexed with the petition in connection with violation Section 76b of the Act. ( 8 ) IN view of the same the Registrar, co-operative Societies issued notice on 21" october, 1999 based upon statutory audit note of the Sub-Auditor, Co-operative Society under Section 76b of the Act. ( 9 ) IT is the case of the petitioner that thereafter Baroda District Central cooperative Bank Limited, Credit cooperative Society appointed an Inquiry officer, who issued a notice dated 13th august, 2001 under Section 93 of the Act which was issued upon all the erstwhile directors of the said Bank which included respondent No. 3. ( 10 ) IT is the case of the petitioner that during the statutory inspection as well as during the monitoring visit on 27th and 29th November, 2001, several irregularities were found. ( 11 ) IT is further case of the petitioner that the State authorities on finding irregularities and illegalities in the functioning of the bank, thereafter, approached the Reserve Bank of India to obtain consent for appointment of an administrator under Section 115a of the Act which provides for appointment of administrator in case of winding up of the co-operative Bank in certain situation. "a In pursuance of the same, the reserve Bank of India according approval for appointment of an Administrator for the management of the bank, superseding its board of Directors vide communication dated 28th February, 2002. The Board of Directors (including present respondent No. 3) was, thus, superseded and an Administrator was appointed. " ( 12 ) IT is further the case of the petitioner that in the month of July 2002 the employees of the Bank who are also office-bearers of the said Society addressed a communication to various authorities showing large-scale financial irregularities committed by the erstwhile Board of directors. It was stated that Chairman of the Bank, Respondent No. 3 herein, was also controlling another bank, namely Baroda peoples Cooperative Bank Limited using his office as Chairman of the Bank, canvassed board of Directors who invested Rs. 9 crores (Rupees nine crores) in Baroda Peoples cooperative Bank Limited to strengthen the said Bank. The said Baroda Peoples cooperative Bank Limited became a weak bank. Though, the said Bank is now under liquidation, a sum of Rs. 1. 50 crores is still outstanding and to be recovered by the baroda District Central Co-operative Bank limited from the Baroda Peoples cooperative Bank Limited. ( 13 ) THEREAFTER, a complaint dated 5th december, 2002 was lodged with all the statutory authorities, particularly, before the registrar, Co-operative Societies regarding irregularities committed by the bank. ( 14 ) THOUGH, the said Society made several representations, and as no action was taken by the authorities, the Baroda District central Cooperative Bank Limited, has approached this Court by filing a Special Civil application No. 6020 of 2003 directed the respondents therein to look into the matter, and if, any substance is there in the complaint, to take appropriate action. ( 15 ) THIS Court (Coram: A. R. Dave, J.), in the matter of Baroda District Central cooperative Bank Limited in SCA 6020/2003 was pleased to dispose of the said writ petition on 7. 3. 2003 and directed the respondents therein to look into the matter, and if, any substance is there in the complaint, to take appropriate action; and if they have already come to a conclusion that there is no substance in the charges levelled by the petitioner in the petition; the petitioner should be given reply within a period of 2 months from the date of the receipt of the order. ( 16 ) IN pursuance of the said proceedings, the Registrar, Co-operative societies, District Baroda, issued a show-cause notice dated 28th July, 2004 to respondent No. 3. After hearing the respondent No. 3, the Respondent No. 2-District Registrar passed an order dated 10th september, 2004 under Section 76b of the Act. ( 17 ) IT is the case of the petitioner that the ground which is the subject-matter of the order under Section 76b of the Act, was also, ground for the Reserve Bank of india for forming an opinion to supersede the Board of Directors. ( 18 ) MEANWHILE proceedings initiated against the defaulting Directors under section 93 of the Act came to be concluded by the order dated 28. 6. 2004 fastening liabilities upon the said Directors. ( 19 ) BEING aggrieved and dissatisfied with the said order dated 28. 6. 2004, the said directors filed Revision Application before the gujarat State Co-operative Tribunal. The gujarat State Co-operative Tribunal by its order dated 22. 11. 2004 held that even on making payment, there is no stay qua disqualification attached to the said directors, (pages 114 to 134) ( 20 ) BEING aggrieved and dissatisfied with the said order, the Directors filed special Civil Application Nos. 15862 of 2004 to 15863 of 2004 in which this Court passed the following order: (21. 12. 2004)"heard learned counsel for the parties. S. O. to 24. 12. 2004. In the meantime, the order passed by the respondent authority and confirmed by the Tribunal is stayed only qua the proceedings under Section 93 of the gujarat Co-operative Societies Act, 1961". "a Subsequently, the said petitions are admitted and the aforesaid ad-interim relief is continued as interim relief. " ( 21 ) IN view of the aforesaid proceedings, some of the Board of Directors of the Baroda District Central Co-operative bank Limited against whom also the order under Section 76b of the Act was passed preferred Revision Application before the state Government. The State Government did not grant interim relief and therefore the petitioner also challenged the said order of the Revisional Authority before this Court by way of filing Special Civil Application Nos. 12426 of 2004 to 12431 of 2004. ( 22 ) THE aforesaid petitions were disposed of by this Court (Coram: M. R. Shah, J) by order dated 27. 9. 12426 of 2004 to 12431 of 2004. ( 22 ) THE aforesaid petitions were disposed of by this Court (Coram: M. R. Shah, J) by order dated 27. 9. 2004 directing the revisional Authority to decide the same on merits of the matter. ( 23 ) IT may be noted that being aggrieved and dissatisfied with the said order dated 10. 9. 2004, Baroda Central Co-operative bank Staff Co-operative Credit Society Ltd. , filed Special Civil Application No. 1855 of 2005 and on that after hearing of the learned counsel this Court issued Rule and also granted interim relief by its order dated 11. 2. 2005. It may be noted that it was an ex-parte order and the other side was not heard on the said date. ( 24 ) DURING the pendency of the proceedings somewhere in July, 2005 petitioner request this Court for being permitted to withdraw petition No. 1855 of 2005 and allied matters. Before this Court passed an order the present petitioners stated that they desire to file a petition on certain grounds, that is why the present petition has been filed before this Court almost on the same ground on 19th July, 2005. ( 25 ) THE learned senior counsel has stated that Mr. K. P. Raval, Deputy Secretary (Appeals), Agriculture Cooperative department passed an order under Section 76b of the Act which is impugned in the petition dated 3rd February, 2005. However , earlier the very same Officer has subsequently passed an order dated 18th march, 2005. It was further submitted that the order of 3rd February, 2005 in respect of shri Ramanbhai Chintanbhai Patel was similar with respect to Baroda District central Cooperative Bank Limited. It is surprising to know that Shri Savjibhai Patel who along with others committed very same irregularities and due to that transaction the said bank had to suffer a loss of Rs. 3 crores. ( 26 ) THE learned counsel further submitted that the impugned order was passed by Mr. K. P. Raval, Deputy Secretary (Appeals), Agriculture Co-operative department dated 3rd February, 2005, in the said proceedings under Section 76b of the act. The order under challenge in the present petition is in respect of Shri ramanbhai Chintanbhai Patel. 3 crores. ( 26 ) THE learned counsel further submitted that the impugned order was passed by Mr. K. P. Raval, Deputy Secretary (Appeals), Agriculture Co-operative department dated 3rd February, 2005, in the said proceedings under Section 76b of the act. The order under challenge in the present petition is in respect of Shri ramanbhai Chintanbhai Patel. ( 27 ) THE learned counsel further submitted that Baroda Central Co-operative bank Ltd. , is a District Central Co-operative bank under Section 35 of the Banking (Regulation) Act, 1949, by the Reserve Bank of India and National Agricultural Bank for rural Development were also monitoring functioning of the said bank. During the statutory inspection-monitoring visit by nabard it observed several irregularities in functioning of the said bank. ( 28 ) IT was further submitted that the said authority after noticing several irregularities in the functioning of the said bank approached Reserve Bank of India to give permission for appointment of an auditor under Section 115a of the Act. Pursuant to that Reserve Bank of India accorded approval for appointment of an auditor and Managing Presiding Board of directors vide a communication dated 28th february, 2002. Pursuant to that the then directors including present respondent No. 3 superseded and an Administrator was appointed. ( 29 ) THE learned counsel further submitted that the impugned order dated 3rd february, 2005 passed under Section 160 of the Act which provides the Registrars power to give direction, the Dy. Registrar has no power to modify and reverse the order of the authority. It has no power to remand the matter and stay operation of the impugned order. ( 30 ) THE learned counsel further submitted that naturally a set of proceedings under Section 93 of the Act as well as per the decision of the Supreme Court in the case of Chamundi Mopeds reported in 1992 (3) SCC 1 . Deputy Secretary (Appeals) should not have passed the order dated 20th/22nd september, 2004 since the order under section 93 was not quashed but only stayed. " (1) The learned counsel has submitted that the respondent has committed several irregularities. The real value of paid up share capital and reserves of the bank was negative. The bank was declared as weak bank. The credit management of the bank was deficient. " ( 31 ) ON behalf of the Respondents I have heard Mr. Mihir Joshi, learned sr. The real value of paid up share capital and reserves of the bank was negative. The bank was declared as weak bank. The credit management of the bank was deficient. " ( 31 ) ON behalf of the Respondents I have heard Mr. Mihir Joshi, learned sr. counsel, Mr. Harin P. Raval, Mr. B. S. Patel, mr. Satyam Thakkar and other advocates. ( 32 ) THE learned advocate has argued the matter at length. The learned advocate stated before this Court while replying to the contentions raised by the petitioner that he would like to set out certain facts giving rise to this petition, which are as under, ( 33 ) THE learned advocate submitted that the petitioner has challenged order dated 3rd February, 2005 passed by Deputy secretary (Appeals) at Gandhinagar, whereby deputy Secretary had allowed the revision application and stayed operation of the impugned order dated 10th September, 2004 passed by the Registrar under Section 76b of the Society Act and remanded the matter to the Registrar for reconsideration in accordance with the directions of the Court in this behalf. ( 34 ) THE order dated 10th September, 2004 of the District Registrar, if same is examined, reveals that vide said order respondent No. 3 was not only removed as the Committee Member/representative of the primary society under Section 76b (1), but was also disqualified from participating in affairs of the various societies for a period of four years in purported exercise of powers conferred under Section 76b of the Act. The said order was passed under Section 76b (2) was clearly beyond the scope of the show- cause notice dated 28th July, 2004 where only allegations under Section 76b (1) of the Act were made, and therefore, said order is violative of the principles of natural justice and nullity and non-est in the eyes of law. " (1) The said order is contrary to the decision rendered by this Court in the case of JAMNADAS VAGHJIBHAI PATEL V/s. KARAMSAD URBAN CO-OP. BANK ltd. , REPORTED IN 1986 (1) GLR 304 . In para 4 of the said judgement, the Court has observed as under:" "even a bare look at the text of section 76b (1) (2) makes it clear that under that Section 76b the Registrar has got twofold powers. Under sub-sec. BANK ltd. , REPORTED IN 1986 (1) GLR 304 . In para 4 of the said judgement, the Court has observed as under:" "even a bare look at the text of section 76b (1) (2) makes it clear that under that Section 76b the Registrar has got twofold powers. Under sub-sec. (1) he has got power to remove a qualified member in the vacancy caused by Director, but that power is obviously limited to the remainder of the terms of his. This is very clear from the latter part of sub-sec. (1 ). After removal of an officer, the Registrar has to direct the Society to appoint a person or a qualified member in the vacancy caused by such a removal and the new incumbent shall hold the office so long only as the Officer in whose place he is elected or appointed would have held if the vacancy had not occurred. This means and must mean that removal cannot be beyond the period of his office. The petitioners office was to come to an end in August, 1984. Therefore, his removal, though stated to be for one year was operative only till August, 1984. Under sub-section (2) it was open to the Registrar to further direct that the petitioner who was removed under subsection (1) would stand disqualified to hold the post or contest the election for any office of the society for a period not exceeding four years from the date of the order of disqualification. Disqualification, therefore, does not per se follow removal. It is to be specifically and separately ordered. The power to disqualify is discretionary as the auxiliary very "may" clearly indicates. The Registrar, unfortunately, did not know this fine distinction of law. He simply jumbled up both the sub-sections in his order Annexure-A. The operative part of the order is only for removal for one year which for all practical purposes was removal only upto August, 1984. The Cooperative Tribunal in the revision against that order went further to say that because of that removal he stood disqualified for one year. If the removal was only upto August, 1984, how can there be consequential, or as a matter of course, disqualification operative beyond August, 1984. The Cooperative Tribunal in the revision against that order went further to say that because of that removal he stood disqualified for one year. If the removal was only upto August, 1984, how can there be consequential, or as a matter of course, disqualification operative beyond August, 1984. This is a clear example, how the offices and Judicial Tribunals clothed with judicial powers are manned by people not knowing law and such mistakes are being committed by them. "" (2)The petition even otherwise is against the order of remand passed by learned Deputy Secretary dated 3rd February, 2005 and as is well settled, no writ petition can lie against the order of remand. The learned advocate relied upon the judgment of this Court in the case of NADIAD TAL kharid VECHAN SANGH LTD. V/s. STATE OF GUJARAT and ANR. , REPORTED in 1997 (2) GCD PG. 314 decided by this court (Coram: S. K. Keshote, J. ). "" (3) It was further submitted that section 76b is essentially in respect of powers conferred on the Registrar for removal and disqualification of an officer. The dispute is only in respect of exercise of such power between the State Government, its officers on one hand and the concerned officer so removed. The controversy or dispute is only in respect of the individual rights of the officer so removed. Hence, the alleged member of a Bank cannot maintain a petition before this Court. "" (4) It was further submitted that the petitioner has challenged the order of deputy Secretary in a revision application arising out of the order passed under Section 76b by the District Registrar and has no locus standi to challenge such an order. Learned Counsel for the respondent has relied upon a Division Bench judgment of andhra Pradesh High Court in the case of v. SHYAMALA V/s. SMT. KALAVATHI reported IN AIR 1992 AP PG. 298. "" (5) The learned advocate for the respondent has stated that the petitioner has mainly relied upon the investment made by the Society of Rs. 3 crores (Rupees three crores) in CRB Capital Market Limited and the loss sustained by the Society in this behalf. "" (6) In this behalf the learned advocate for the respondent has invited my attention to the following facts to show that the said action of Bank was bona fide and legal on the relevant date. 3 crores (Rupees three crores) in CRB Capital Market Limited and the loss sustained by the Society in this behalf. "" (6) In this behalf the learned advocate for the respondent has invited my attention to the following facts to show that the said action of Bank was bona fide and legal on the relevant date. "" (7) The learned advocate submitted that on 24th June, 1996, the Managing committee, Baroda District Central Co-opearative Bank made a resolution No. 45 and resolved to deposit amounts with CRB capital Market Limited (the Said company, for short) by way of Inter-Corporate Deposits during the said period. "" (8) A number of corporations/ institutions i. e. GIIC, State Bank of India, bank of India, Bank of Baroda, Bank of rajasthan, Federation Bank, Vysya Bank, united Western Bank, Kheda District central Co-operative Bank also invested deposits/funds with the said Company. "" (9) The learned advocate for the respondent further submitted that on 20th july, 1996 a resolution was passed by the board of Directors approving the Resolution no. 45 dated 24th June, 1996 of the Managing committee. "" (10) In view of the aforesaid action the Bank made an investment of Rs. 4 crores, (Rupees four crores) somewhere in august 1996 by way of Inter-Corporate deposit with the said Company and the receipts for the same were issued by the said company. The said deposits were for 91 days assuring interest @ 22 percent. "" (10) Considering the said bank had invested a sum of Rs. 70 crores with various institutions including the aforesaid amount of Rs. 4 crore (Rupees four crores) with the said Company. " (12) It was further stated that out of total investment of Rs. 4 crores (Rupees four crores), only Rs. 1 crore (Rupees one crore) was realised with interest from the said Company somewhere on 8th January, 1997. "" (13) The said Company then requested for extension of Inter-Corporate deposits. Pursuant to that request the said company pledged shares of the CRB Capital limited valued at Rs. 5. 60 crores and also secured the return of the said deposits by way of post-dated cheques for the said amount with interest thereon being cheques dated 10th, 18th, 19th, 20th, 22nd and 24th february, 1997. "" (14) It may be noted that aforesaid amount could not be realised as the cheques were dishonoured subsequently for want of sufficient funds. 5. 60 crores and also secured the return of the said deposits by way of post-dated cheques for the said amount with interest thereon being cheques dated 10th, 18th, 19th, 20th, 22nd and 24th february, 1997. "" (14) It may be noted that aforesaid amount could not be realised as the cheques were dishonoured subsequently for want of sufficient funds. Therefore, Criminal complaint Nos. 1753 of 1997 to 1758 of 1997 were filed by the Bank against the said company under Section 138 of the negotiable Instruments Act. "" (15) Meanwhile, Reserve Bank of india issued as order under Section 45k (4) which provides power of bank to collect information from non-banking institutions as to deposits and to give directions read with section 45mb (2) which provides power of bank to prohibit acceptance of deposit and alienation of assets of the RBI Act, 1934 and prohibited the said Company from accepting any deposits and from selling/disposing of its assets. Hence, balance amount of Rs. 3 crores and interest thereon remained unpaid to the Bank. " (16) The Delhi High Court also appointed the Official Liquidator on 22nd May, 1997 as the Provisional Liquidator of the said company (i. e. CRB ). "" (17) The said Company failed to make the payment of and/or return the deposit amount Rs. 3 crores. Therefore, the said Bank filed a Summary Suit No. 4447 of 1997 in City Civil Court, Ahmedabad on 18th september, 1997 for the recovery of a sum of Rs. 3,53,82,595/ -. "" (18) It may be noted that as far as said suit is concerned learned Judge, City civil Court, Ahmedabad passed an order dated 22nd September, 2002 in favour of the petitioner-Bank and against the said company in the said Summary Suit No. 4447 of 1997 for an amount Rs. 3,53,82,595/ -. "" (19) The learned advocate further submitted that MOU entered into between the Administrator and Mr. C. R. Bhansali somewhere on 26th September, 2002 to keep in abeyance the proceedings of the compliant till the arrangement for clearing the dues is approved by the Delhi High Court and the same has been permitted by the State registrar vide letter dated 23rd September, 2002 which is at Annexure-3. "" (20) In view of the above, the learned counsel for the respondent submitted that action of the Bank to invest Rs. "" (20) In view of the above, the learned counsel for the respondent submitted that action of the Bank to invest Rs. 4 crores (Rupees four crores) was bona fide, legal at the relevant time and that the Bank has taken enough steps to recover the remaining amount from the said Company. However, in view of the subsequent developments recovery of the said amount became just beyond the control of the Bank. Therefore, the said investment in CRB Capital Market limited cannot be treated as mala fide. "" (21) The learned counsel for the respondent further submitted that entire controversy in this petition is regarding exercise of powers under Section 76b of the cooperative Societies Act on the one hand and Section 93 of the said Act on the other. 34. 22a Section 76b of the Act reads as under:""76-B Removal of officer - (1) If, in the opinion of the Registrar, any officer makes persistent default or is negligent in performance of the duties imposed on him by this Act or the rules or the bye-laws or does anything which is prejudicial to the interests of the society or where he stands disqualified by or under this Act, the registrar may, after giving the officer an opportunity of being heard, by order remove such officer and direct the society to elect or appoint a person or a qualified member in the vacancy caused by such removal and the officer so elected or appointed shall hold office so long only as the officer in whose place he is elected or appointed would have held if the vacancy had not occurred. The registrar may, by order, direct that the officer so removed shall be disqualified to hold or to contest election for any office in the society from which he is removed and in any other society for a period not exceeding four years from the date of the order and such officer shall stand disqualified accordingly. The registrar may, by order, direct that the officer so removed shall be disqualified to hold or to contest election for any office in the society from which he is removed and in any other society for a period not exceeding four years from the date of the order and such officer shall stand disqualified accordingly. ""section 93 of the Act reads as under: power of Registrar to assess damages against delinquent, promoters, etc.- (1) Where, in the course of or as a result of an audit under Section 84, or an inquiry under Section 86 or an inspection under section 87, or the winding up of a society, the Registrar is satisfied on the basis of the report made by the auditor or the person authorised to make inquiry under Section 86, or the person authorised to inspect the books under Section 87, or the Liquidator under section 110, that any person who has taken any part, in the organisation or management of the society or any deceased, or past or present officer of the society has, within a period of five years prior to the date of such audit, inquiry, inspection or order for winding up, misapplied or retained, or become liable or accountable for, any money or property of the society, or has been guilty of misfeasance or breach of trust in relation to the society, the Registrar or a person authorised by him in that behalf may investigate the conduct of such persons or persons and after framing charges against such person or persons, and after giving a reasonable opportunity to the person concerned and in the case of a deceased person to his representative who inherits his estate, to answer the charges, make an order requiring him to repay or restore the money or property or any part thereof, with interest at such rate as the Registrar or the person authorised under this Section may determine, or to contribute such sum to the assets of the society by way of compensation in regard to the misapplication, retention, misfeasance or breach of trust, as he may determine. " ( 35 ) AS regards the proceeding under section 93 of the Act, the order dated 28th june, 2004 passed by Inquiry Officer under section 93 of the Act required to fix the liability of various delinquents. " ( 35 ) AS regards the proceeding under section 93 of the Act, the order dated 28th june, 2004 passed by Inquiry Officer under section 93 of the Act required to fix the liability of various delinquents. The said order dated 28th June, 2004 passed under section 93 was challenged before the Cooperative Tribunal by way of revision application. In that set of applications, the tribunal vide its order dated 22nd November, 2004 passed a conditional order for stay of the said order dated 28th June, 2004. The said order dated 22nd November, 2004 of the tribunal was challenged by the Directors by way of S. C. A Nos. 15862 and 15863 of 2004 and other petitions. This Court (Coram: K. S. Jhaveri, J.) vide order dated 21st december, 2004 stayed the order of the respondent authority only qua proceedings section 93 of the Cooperative Societies Act. And thereafter, the said petitions were admitted on 25th December, 2004 in this behalf. ( 36 ) AS far as proceedings under section 76b of the Act is concerned, respondent has stated as follows: ( 37 ) 28. 7. 2004-SHOW cause notice issued by the District Registrar, Co-operative societies, Baroda proposing to initiate action under Section 76b of the said Act for removal of the respondent No. 3 as director/ committee member on the basis of the order dated 28. 06. 2004 passed by the Inquiry Officer under Section 93 of the said Act. Thus, the show cause notice issued to initiate action under Section 76b was entirely based upon the order dated 28. 06. 2004 under Section 93 of the said Act. " (1 ). The said show cause notice dated 28. 07. 2004 was adjudicated by the district Registrar vide order dated 10. 9. 2004 which was entirely based on the order dated 28. 6. 2004 under Section 93 the said order dated 10. 9. 2004 (page 26 to 31) of the District registrar passed under Section 76b (1) and 76b (2) has been produced at page 26 to 31. "" (2) The said order dated 10. 9. 2004 of the District Registrar was challenged before the Deputy Secretary (Appeals) by way of revision applications who vide order dated 20/22. 9. 2004 refused to grant stay of the order dated 10. 9. 2004. "" (3 ). Hence, SCA Nos. "" (2) The said order dated 10. 9. 2004 of the District Registrar was challenged before the Deputy Secretary (Appeals) by way of revision applications who vide order dated 20/22. 9. 2004 refused to grant stay of the order dated 10. 9. 2004. "" (3 ). Hence, SCA Nos. 12426 of 2004 to 12431 of 2004 were filled before this Court by the concerned directors against the order of refusal of grant of interim relief. This court (Coram: M. R. Shah, J.) vide order dated 27. 9. 2004 at page 101-102 passed an order of status quo to be maintained by both sides and direct the revisional authority to decide and dispose of the revision applications on merits and in accordance with law without being influenced by the order of this Court. "" (4 ). The Deputy Secretary (Appeals) vide order dated 3. 2. 2005 at Pg. 24-25 allowed the revision applications while noting that the order under Section 93 has been stayed by this Court and, therefore, remanded the matter to the District Registrar to pass appropriate order on the basis of the order passed by this Court. "" (5) The said order dated 3. 2. 2005 of remand as passed by the Deputy Secretary (Appeals) was challenged by the Baroda district Central Co-operative Bank Staff cooperative Credit Society by way of SCA no. 1855 to 1859 of 2005 and this Court vide ex-parte order dated 11. 2. 2005 at pg. 135-137 stayed the operation of the said order and hence, Civil Applications were filed by the respondent No. 3 and other directors under Article 226 (3) for vacating the ex-prate ad-interim relief granted vide order dated 11. 2. 2005. "" (6) After the aforesaid contentions, the learned counsel for the respondents has tried to reply to the contentions raised by the petitioner. "" (7) As regards first contention, learned Counsel for. the respondent submitted that the said order dated 18th march, 2005 is a subsequent order passed by authority, and hence, the said order is in the nature of quasi-judicial order even if passed subsequently in the same set of circumstances, would not invalidate the earlier order dated 3. 2. "" (7) As regards first contention, learned Counsel for. the respondent submitted that the said order dated 18th march, 2005 is a subsequent order passed by authority, and hence, the said order is in the nature of quasi-judicial order even if passed subsequently in the same set of circumstances, would not invalidate the earlier order dated 3. 2. 2003 passed by the same quasi-judicial authority since as is well settled, an order passed by a quasi-judicial authority when challenged under Article 226, the same has to be judged on the basis of the reasonings of the said order. The learned counsel relied on judgment of Apex Court in the case of MOHINDER SINGH GILL and ANOTHER V/s. THE CHIEF election COMMISSIONER, NEW DELHI and OTHERS REPORTED IN AIR 1978 SC 851 . In view of the same, learned Counsel for the respondent submitted that an order subsequently passed on 18th March, 2005 for whatever reasons could not render as bad. There was an earlier order dated 3rd february 2005 which necessarily would have to be examined on the basis of the material before the said authority and nothing else and certainly not the subsequent events. "" (8) The learned counsel further submitted that secondly what possibly led to the change of subsequent ex-parte order dated 11th February, 2005 passed by this Court, whereby this Court was possibly misled on the interpretation of the earlier order by which ex-parte order dated 11th February, 2005 was stayed and the order dated 3rd february, 2005 passed by the said authority-Deputy Secretary (Appeals ). "" (9) It appears that the Deputy secretary (Appeals) in view of the reasonings assigned in the order dated 11th February, 2005 of this Court passed the said order dated 18th March, 2005. The said contention of the petitioner, therefore, is misconceived. "" (10) The learned counsel for the respondent while replying to the second submission stated that the second submission of the petitioner is misconceived since while conferring powers to modify, annul or reverse, the legislature has also conferred a wide power to the revisional authority under section 155 of the Act to pass such order on the revision application as may be deemed just. Hence, this Court on 21" December, 2004 stayed the proceedings. Hence, this Court on 21" December, 2004 stayed the proceedings. "" (11) Hence when Section 93 order was stayed by this Court, Deputy Secretary was justified in allowing the revision application of respondent No. 3 since the order under Section 76b was entirely based on the order under Section 93. Hence when section 93 order was stayed by this Court, the learned Deputy Secretary was justified in giving fullest effect to the order dated 21. 12. 2004 of this Court and allowing the revision application and remanding the matter to the District Registrar with a direction to decide the same in conformity of the order of this Court. Thus, the contention that the impugned order dated 3. 2. 2003 travels beyond the scope of Section 155 is devoid of merits. "" (12) As regards this contention, it was further submitted that when this Court (Coram: M. R. Shah, J) passed order dated 27th September, 2004, at the said point of time, the order of this Court (Coram: K. S. Jhaveri, J) dated 21st December, 2004 was not in existence. It was further submitted that the order of this Court (Coram: M. R. Shah, J) dated 27th September, 2004 directing deputy Secretary (Appeals) to decide the matter on merits cannot be construed in such a manner that the Deputy Secretary ought not have taken into consideration the subsequent events i. e. , the order passed by this Court on 21st December, 2004 despite the fact that the said order dated 21. 12. 2004 of this Court had direct bearing on the issue raised before the Deputy Secretary (Appeals ). "" (13) As regards fourth contention which has been raised by learned counsel for the petitioners, same is also misconceived. Deputy Secretary (Appeals) has only given the fullest effect to the order dated 21" December, 2004 of this Court and has stayed the impugned order dated 10th september, 2004 while directing to remand the matter to District Registrar with a direction to decide the same as per the outcome of the proceedings before this Court. This was precisely done since once the proceedings under Section 93 were stayed by this Court, the order under Section 76b which was entirely based on the order under section 93, the same could certainly not survive at least till the final outcome of the proceedings before this Court in SCA Nos. This was precisely done since once the proceedings under Section 93 were stayed by this Court, the order under Section 76b which was entirely based on the order under section 93, the same could certainly not survive at least till the final outcome of the proceedings before this Court in SCA Nos. 15862 and 15863 of 2004 and naturally had to be kept in abeyance- suspension till then. "" (14) The learned counsel for the respondents further submitted that the present petition filed by the petitioner is not maintainable at law under Article 227 of the constitution of India, because, the present petitioner was not a party before the proceedings before the lower authority under section 76-B of the Act, and therefore, on the ground of locus standi, the present petition is not maintainable. It may be noted that against this, learned counsel for the petitioner has submitted that the petitioner has locus standi to file the petition and he has relied upon the judgement of the Honble supreme Court in the case of M. S. JAYARAJ v/s. COMMISSIONER OF EXCISE, KERALA reported IN 2000 (7) SCC 552 . "" (15) The learned counsel for the respondent submitted that the aforesaid decision of the Honble Supreme Court in respect of locus standi was not applied to the facts of the present case. The controversy in the present case is not in respect of proceedings under Section 96 of the Act, but only under Section 76b of the act. The controversy is between State government on the one hand and the directors individually on the other hand and the adjudication is only in view of the rights of respondent No. 3 and therefore, the said decision of the Honble Supreme Court will not apply and therefore the present petition filed by the petitioner to the proceedings under Section 76b is not maintainable. "" (16) The learned counsel further submitted that as regards interim relief, delay plays important role. In this case the petitioner has challenged the order of february, 2005 and the petition has been filed somewhere in July, 2005. Hence the petitioner is not entitled to any interim relief order. " ( 38 ) I have heard Mr. N. D. Nanavati, ld. Sr. Counsel with Mr. Hriday Buch, learned advocate for the petitioner at length wherein he has made detailed submissions. I have also heard Mr. Mihir Joshi, Id. sr. Hence the petitioner is not entitled to any interim relief order. " ( 38 ) I have heard Mr. N. D. Nanavati, ld. Sr. Counsel with Mr. Hriday Buch, learned advocate for the petitioner at length wherein he has made detailed submissions. I have also heard Mr. Mihir Joshi, Id. sr. counsel with Mr. H. P. Raval, Mr. Satyam thakkar, Mr. B. S. Patel and other advocates on behalf of the respondents. " (1) Both the sides initially argued the matter at length and requested the Court to dispose of the matter finally. However, at the time of hearing of the matter, this court indicated that due to paucity of time it is not possible for this Court to hear the matter finally but this Court may hear the matter only for admission purpose as well as whether to grant interim relief or not. In view of the same, both the learned counsel have agreed for the same and they have argued the matter accordingly. "" (2) In view of the aforesaid position of the matter, though so many submissions were made by the learned counsel for the petitioner and the learned counsel for the respondents, I am not going in each and every contention and issue raised by the learned counsel for the petitioner. All these will have to be heard and decided at the time of final hearing of the matter when the respondents will be able to file further affidavit and the petitioner may also be able to rejoinder and put any documents. At this stage the pleadings are not completed. "" (3) However, looking to the averments made by the petitioner in this petition, it will not be possible for this Court to reject the matter in limine at this stage as contended by the learned counsel for the respondents. Therefore, I hear the matter for admission purpose and granting interim relief, if any. "" (4) Before I consider the matter for interim relief, refer to the judgement and order in Letters Patent Appeal No. 608 of 2005 in the matter of INSTITUTE OF rural MANAGEMENT V/s. K. PRATAP reddy HEARD ALONG WITH LETTERS patent APPEAL NO. 609 OF 2005 IN the MATTER OF V. KURIEN. THE division BENCH OF THIS COURT (CORAM: G. S. SINGHVI AND A. S. DAVE, JJ) by JUDGEMENT AND ORDER DATED 24. 6. 609 OF 2005 IN the MATTER OF V. KURIEN. THE division BENCH OF THIS COURT (CORAM: G. S. SINGHVI AND A. S. DAVE, JJ) by JUDGEMENT AND ORDER DATED 24. 6. 2005 as regards interim relief, observed as under:"we have given serious thought to the arguments of the learned counsel. The parameters for exercise of the Courts power to grant interim relief in the proceedings filed under Article 226 of the Constitution of India are well defined. In such matters the Court is required to consider the following factors:" (1) Existence of a strong prime facie case (2) Balance of convenience (3) Irreparable injury, if any suffered by the parties on account of grant or refusal of injunction, and (4) whether it would be in the public interest to pass an order of injunction. All the above noted factors must be established by the petitioner I applicant before an order of injunction can be passed by the court. In a given case the Court may feel satisfied about existence of prima facie case but still decline interim relief if the petitioner is not likely to suffer irreparable injury or the balance of convenience is not in his favour or that grant of injunction would not be in public interest. Even if the first three factors are in favour of the petitioner, the Court may decline temporary injunction if it is found that the Courts order will not be in public interest. To put it differently, mere existence of strong prima face case and/or balance of convenience are not the only factors the existence of which would justify grant of an interim injunction. The Court must feel convinced about the existence of all the elements indicated above as a condition precedent to the grant of interim relief. "" (5) In view of the aforesaid principles laid down by the Division Bench, i have considered the following aspects. " " As regards interim relief: this Court has pointed out repeatedly that while entertaining the writ petition the High Court should not pass interim order, the nature of which is to grant a relief which can be granted only at the final disposal of such a writ petition. (See: P. R. SINHA and OTHERS V/s. INDER KRISHAN raina AND OTHERS - (1996) 1 SCC 681 ) (para 6 ). "" (6) Regarding interim relief, thiscourt in CIVIL REVISION APPLICATION no. (See: P. R. SINHA and OTHERS V/s. INDER KRISHAN raina AND OTHERS - (1996) 1 SCC 681 ) (para 6 ). "" (6) Regarding interim relief, thiscourt in CIVIL REVISION APPLICATION no. 759 OF 1994 IN THE CASE OF rasilaben KESHARBHAI PARMAR V/s. INDUBEN HEJABHAI SOLANKI and ORS. , reported IN 1999 (2) GCD 1216 has held that interim relief should not be granted in a case where it amounts to grant of final relief at the interlocutory stage. "" (7) High Court while dealing with cases under Article 226/227 of the constitution has to be very much circumspect of passing interlocutory orders. There is a great potential for mischief public as well as private if interim order has been passed. In some particular cases the effect of an interim order may be far reaching. It is well known rule of practice and procedure that at interlocutory stage a relief which is asked for and is available at the disposal of the matter is not granted. To have it granted at the threshold creates a lot of difficulties. In this case whatever interim relief prayed for by the petitioner may not be granted in a case where it amounts to grant of final relief at the interlocutory stage. The relief which has been prayed for by the petitioner restraining the respondent from participating in the proceedings of bank as well as in future election process the same cannot be granted as the same can be granted only at the final disposal of the petition. "" (8) "the grant of refusal of an injunction is a matter of equitable jurisdiction. The power of a Court of equity to grant writs of injunction antedates specific legislative sanction, and ordinarily is not a statutory grant of power to a Court. The propriety of granting an injunction depends on the facts of each particular case and the general principles of equity as related to injunctions and the right to exercise commonsense in the granting or refusing of injunctions is one of the fundamental prerogatives of a Court of chancery. The propriety of granting an injunction depends on the facts of each particular case and the general principles of equity as related to injunctions and the right to exercise commonsense in the granting or refusing of injunctions is one of the fundamental prerogatives of a Court of chancery. Since an injunction should not be made an instrument of oppression and injury, it will not be granted when good conscience does not require it, where it will operate oppressively or contrary to justice where it is not reasonable and equitable under the circumstances of the case, or where it will tend to promote rather than to prevent fraud and injustice. " (See: NELSONs LAW OF injunctions, 2nd EDITION, CHAPTER II - SYN. NO. 4, PARA 3, PAGE 39)"" (9) Here also the petitioner has challenged the order of February 2005 in july 2005 and therefore on the ground of delay the petitioner is not entitled to any interim relief. It may be noted that the process of election is an essential feature of democratic life. It is virtually the supreme activity of the democratic set up. Right of election and carry out the work is a statutory right. In this case respondent No. 3 has been elected as a member of the bank and is working in day-to-day management of the bank. By virtue of his office he is now entitled to participate in other election of other Co-operative Societies. In view of the same, the Court should be extremely cautious in the matter of injunction in cases where holding or conduct of election is involved. The accepted normal rule is that injunction should not be granted in such cases. The High Court under Article 227 of the Constitution has power of superintendence where injunction should not be issued to restrain the elected candidate from participating in future election. " (10) As regards the balance of convenience, I have considered the following facts:"" (11) Even the locus standi of the petitioner has been challenged. "" (12) It was also stated that if the order of injunction as prayed for is granted, the respondents who are elected members will not be able to take part in the proceedings of the bank as well as will not be able to participate in the further election programme and therefore if the interim relief as prayed for is granted, respondent no. 3 will suffer irreparable loss, injury and hardships which cannot be compensated in terms of money. On the other hand, if the interim relief is not granted, the petitioner is not likely to suffer any injury much less irreparable injury. "" (13) Though there is some allegation against respondent No. 3 but in my view the Registrar, Co-operative societies as well as the Reserve Bank of india has control over it and therefore at this stage this Court is of the vjew that no purpose would be served in granting interim relief at this stage. "" (14) In view of the aforesaid principles which have set out, I am of the petitioner has been able to show prima facie case in its favour and therefore I issue Rule in the matter. "" (15) On all the above grounds, the interim relief as prayed by the petitioner is refused. On the other hand, if interim relief is not granted, the petitioner is not going to suffer any injury much less irreparable injury. It may be noted that the petitioner has challenged the order remanding the matter. There is no final adjudication and under Article 226 of the Constitution of India this Court has a limited jurisdiction. In view of this also, I am of the view that the petitioner is not entitled to any interim relief, in view of the parameters 2 and 3, namely, balance of convenience and irreparable injury. "" (16) As regards parameter four where interim relief is granted in the public interest, the petitioner has not been able to show any public interest. The respondents, particularly, respondent No. 3, have shown that if the respondents are injuncted as prayed for then they will not be able to act in day-to-day management of the bank as well as they, particularly respondent No. 3, will not be able to participate in election programme in connection with the bank which was also in the public interest. In view of the same, interim relief as prayed for is not granted. In view of the same, interim relief as prayed for is not granted. "" (17) In view of the principle of injunction which I have set out earlier particularly in the Division Bench judgement in Kuriens case and also the other judgement of the Honble Supreme Court which I have referred to earlier where the honble Supreme Court has held that interim injunction application should not be granted when it amounts to granting final relief. As the locus standi of the petitioner is also doubted, and the petitioner has filed the petition after great delay and taking the overall consideration of the matter, the petitioner has not been able to prove prima facie case for interim relief and therefore though I have issued Rule, considering the totality of the circumstances do not grant interim relief which has been prayed by the petitioner, namely, staying the operation, implementation and execution of the order dated 3. 2. 2005 by which the authority has remanded the matter. If the said order is stayed, the entire other proceeding will be stayed and respondent No. 3 indirectly will not be able to act. That is the reason decline to grant interim relief after hearing the parties. It is no doubt true that earlier in other matter ex-parte interim relief was granted without hearing the respondent but when the respondents has appeared, filed affidavit and made submissions then the said order of injunction which was granted in other matter will not be decisive matter in the present matter. "" (18) I have considered the facts and circumstances of the case. I have also considered prima facie case, irreparable injury and balance of convenience. Injunction is an equitable relief and even if the above three conditions, namely, prima facie case, irreparable injury and balance of convenience, are satisfied in this case two conditions are not satisfied), the Court is not bound to grant interim relief since the power of the Court is discretionary. The petitioner has also challenged the order of remand passed by the authority. For that I have taken into consideration the other relevant circumstances such as delay, locus standi of the petitioner and also the fact that initially a petition was filed where this Court granted interim relief but after the respondents appeared, filed affidavit and made submissions the Court may pass necessary order. For that I have taken into consideration the other relevant circumstances such as delay, locus standi of the petitioner and also the fact that initially a petition was filed where this Court granted interim relief but after the respondents appeared, filed affidavit and made submissions the Court may pass necessary order. It may be noted that the original petition in which interim relief was granted, the petitioner desires to withdraw that petition. However, with a view to see that the said interim relief is still continued and before this Court passes any order of withdrawal of the earlier petition, the present petition has been filed in order to take undue advantage of the earlier proceedings. In view of this, this Court is of the view that injunction which is an equitable relief cannot be granted to the petitioner. " ( 39 ) IN short, Rule returnable on 16th january, 2006 Interim relief is refused. After pronouncement of the order, mr. Hriday Buch, learned advocate for the petitioner has stated that the interim relief which has been prayed in the petition namely, staying operation, implementation and execution of the order dated 3. 2. 2005 passed by the Deputy Secretary (Appeals) be granted for a period of 15 days. He further states that it is no doubt true that in this matter interim relief was not granted but in view of the interim relief granted on 11. 2. 2005 in Special Civil Application No. 1855 of 2005, he has not prayed for interim relief in the present matter. Mr. Satyam Thakkar, learned advocate for respondent states that as in the main matter interim relief was not granted, this Court cannot now grant interim relief particularly when by a reasoned order this court has refused interim relief. In view of the same, interim relief is refused. .