KHOKHRA MEHEMDAVAD SEVA SAHKARI MANDLI LTD. v. STATE OF GUJARAT, THROUGH SECRETARY
2009-10-01
R.M.DOSHIT, SHARAD D.DAVE
body2009
DigiLaw.ai
ORAL JUDGMENT (Per : HONOURABLE MS. JUSTICE R.M.DOSHIT) These petitions preferred under Articles 226 of the Constitution of India challenge the process of election of the Board of Directors of the Ahmedabad District Cooperative Bank Limited, a Co-operative Society within the meaning of the Gujarat Cooperative Societies Act, 1961, the respondent no. 3 herein [hereinafter referred to as the Bank scheduled to be held on 14th October 2009. The petitioners are the members of the Bank. The challenge to the ensuing election is three-fold. It is common ground that the Bank is a specified society within the meaning of Section 145B read with Section 74C of the Gujarat Cooperative Societies Act,1961 [hereinafter referred to as the Act of 1961]. The election of the Board of Directors of the Bank is governed by the provisions contained in Chapter XIA of the Act of 1961 and the Gujarat Specified Cooperative Societies Elections to Committees Rules, 1982. Chapter XIA of the Act, comprising Sections 145A to 145Z, specifically provides for election of Committees and Officers of specified Societies. Section 145 U provides for reference of the disputes relating to the election to the Tribunal. Section 145Y empowers the State Government to make rules to provide for and regulate all or any of the matters relating to the various stages of election. In exercise of the said power, the State Government has framed The Gujarat Specified Cooperative Societies Election to Committees Rules, 1982 [hereinafter referred to as the Rules of 1982]. Rule 3A of the Rules of 1982 provides for Delimitation of constituencies for purpose of election. Sub-rule (1) thereof enjoins the Secretary or, in absence of the Secretary, the Chief Executive Officer of every specified society to prepare a provisional list of constituencies in the year preceding the year in which the election to the committee is scheduled to be held. Sub-rule (3), inter alia, provides for display of such list on the Notice Board of the office of the society; for forwarding such list to the Registrar of Cooperative Societies and to the Collector; for service of such list to every member of the society by registered post; for lodging objections against such list; for consideration of objections by the Society; for preparation of the final list of constituencies; for display of such final list; for submission of the final list to the Registrar and the Collector, etc.
Rule 4 of the Rules of 1982 makes, inter alia, similar provisions for preparation, display and submission of the provisional voters' list to the Collector. Rule 6 of the Rules of 1982 provides for making claims and raising objections in respect of the provisional list of voters. It provides, inter alia, 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.It also provides for consideration of claims and objections and for giving decision within ten days from the date of the claims or objections and for finalization of the list of voters. Learned advocate Mr. Joshi has appeared for the petitioners. He has submitted that since the last election, several territorial constituencies of the Bank have undergone a change. Under Government Notifications dated 14th February 2006 and 20th July 2006 issued in exercise of the powers conferred by sub-section [3] of Section 3 of the Bombay Provincial Municipal Corporations Act, 1949 [hereinafter referred to as, the Act of 1949] and in exercise of powers conferred by clause [2] of Article 243Q of the Constitution of India, the boundaries of the Ahmedabad Municipal Corporation have been expanded. The areas of many villages and municipalities which were part of several constituencies of the Bank have now been merged into the Ahmedabad Municipal Corporation. In view of the said change/alteration in the boundaries of the Ahmedabad City, the Bank was required to delimit its constituencies. The Bank, however, has not undertaken the exercise of delimitation of its constituencies to meet the expanded boundaries of the Ahmedabad City and merger of several village panchayats and municipalities in the Ahmedabad Municipal Corporation. He has submitted that in the past whenever the boundaries of the Ahmedabad City were expanded and the villages and talukas around the city of Ahmedabad were merged into the city of Ahmedabad, the Bank had invariably reconstituted its constituencies in consonance with the alteration in revenue limits. He has submitted that in absence of the re-constitution of the constituencies or de-limitation as envisaged by Rule 3A of the Rules of 1982, the ensuing election will be rendered farcical. Mr.
He has submitted that in absence of the re-constitution of the constituencies or de-limitation as envisaged by Rule 3A of the Rules of 1982, the ensuing election will be rendered farcical. Mr. Joshi has next contended that in a meeting of the Board of Directors of the Bank [hereinafter referred to as, the Board] held on 25th February 2009, the Board had proposed certain amendments to the bye-laws of the Bank. A Special General Meeting of the members of the Bank was convened on 14th March 2009, inter alia, for approval of the said proposed amendment. The notice of the said meeting dated 14th March 2009 had not reached all the members of the Bank atleast not the petitioners. The said meeting and the resolution passed in the said meeting are questionable. He has further submitted that the amendments approved in the Special General meeting held on 14th March 2009 were sanctioned by the Registrar of Cooperative Societies, State of Gujarat, Ahmedabad [hereinafter referred to as the Registrar] on 25th March 2009 with little modifications here and there. Mr. Joshi has submitted that the full text of the proposed amendment was not circulated to the members of the Bank with a deliberate intention to eliminate competition in the ensuing election. Mr. Joshi has submitted that under the mended bye-laws, particularly in bye-law 8(1), the Bank has introduced stringent conditions on contesting members and on the member societies which such contesting members represent. This being not known to the members, most of the members could not comply with the conditions now incorporated in the amended by-law 8 [1]. Thus, the competition in the ensuing election is tacitly eliminated. He has submitted that though the text of the resolution was served upon the members, the particular page containing the proposed amendment to by-law 8[1] was not sent to the members purposefully. Mr. Joshi has also challenged the induction of nearly 1000 members in the category of ?Self-Help Groups?under the amended bye-law 8 [1](4). He has submitted that the proposed amendment was sanctioned by the Registrar on 25th March 2009. Within a week therefrom, by 31st March 2009, nearly 1000 Self-Help Groups were inducted as the members of the Bank. He has submitted that induction of a large number of new members at the nth hour would certainly tilt the balance at the ensuing election and smacks of malafides.
Within a week therefrom, by 31st March 2009, nearly 1000 Self-Help Groups were inducted as the members of the Bank. He has submitted that induction of a large number of new members at the nth hour would certainly tilt the balance at the ensuing election and smacks of malafides. He has submitted that it is not believable that, at a time, 1000 groups were awaiting membership of the Bank. He has submitted that the haste with which the amendment to the bye-laws was proposed, approved, submitted to the Registrar and was sanctioned by the Registrar in itself discloses mala fide. Mr. Joshi has also challenged the action of the Election Officer in giving two days' notice for lodging objection against the provisional Voters' list. In the present case, the Election Officer & the City Deputy Collector declared the programme for publication of the provisional voters' list and the final voters' list on 11th September 2009. Under the said programme, 14th September 2009 was the date set for publication of the provisional voters' list; 16th September 2009 was the last date set for submission of objections and 18th September 2009 was the date set for publication of the final voters' list. He has submitted that Rule 6 of the Rules of 1982 envisage seven days' time for lodging objection against the provisional voters' list and another ten days for examining and deciding the objections and for publication of final voters' list. In the submission of Mr. Joshi, in respect of the ensuing election of the Board, every possible effort is made to benefit the persons in power. In the circumstances, the election process, though set in motion, requires to be stayed. In support of his submissions Mr. Joshi has relied upon the judgments in the matters of Siddhpur Taluka Cooperative Purchase & Sales Union & Ors. v. State of Gujarat & Ors. [ 2002(2) GLR 1357 ] and of Bhavnagar District Cooperative Bank Limited & Ors. v. State of Gujarat & Ors. [ 2006 (2) GLH 545 ]. The petitions are contested by the Bank. Learned Addl. Advocate General Mr. Mehta has appeared for the Bank. He has submitted that the election process once set in motion should not be stalled. Mr. Mehta has submitted that Chapter XIA of the Act of 1961 provides a complete machinery for election of the Committees of specified societies.
The petitions are contested by the Bank. Learned Addl. Advocate General Mr. Mehta has appeared for the Bank. He has submitted that the election process once set in motion should not be stalled. Mr. Mehta has submitted that Chapter XIA of the Act of 1961 provides a complete machinery for election of the Committees of specified societies. Section 145U provides for reference of disputes relating to election to the Tribunal. The present petitioners also, if they have any grievance in respect of the ensuing election, shall have the statutory remedy of petition before the Tribunal. The present petitions under Article 226 of the Constitution of India are, therefore, not maintainable. He has submitted that it is now well settled that the election programme once set in motion shall not be interfered with or stalled and should be allowed to complete as scheduled. Mr. Mehta has submitted that the aforesaid amendment to the bye-laws has been made in conformity with Section 13 of the Act of 1961. The statutory appeal under Section 153 [1] of the Act should lie to the State Government against the order of the Registrar sanctioning the amendment to the bye-laws under Section 13 of the Act. The petitioners thus have the alternative statutory remedy. The present petitions are, therefore, not maintainable. As to the delimitation, he has taken us through the lengthy affidavit made by the Bank. He has submitted that the expansion of the boundaries of the Ahmedabad City made under Article 243Q of the Constitution of India has no relevance with the constituencies of the Bank. He has submitted that the election of the Board is governed by the Act of 1961 and the Rules of 1982. He has submitted that the Act of 1961 and the Rules of 1982 specifically refer to the revenue limits. The revenue limits of village panchayats, taluka panchayats, district panchayats, etc., as envisaged by the Bombay Land Revenue Code. Alteration in the boundaries of the Municipal Corporation under the Act of 1959 or under the Constitution would not change the revenue limits of the village panchayats, taluka panchayats, or district panchayats. Revenue limits of the village panchayats, taluka panchayats or district panchayats can be altered under Section 7 of the Bombay Land Revenue Code alone. In the present case, no alterations are made as envisaged by Section 7 of the Bombay Land Revenue Code.
Revenue limits of the village panchayats, taluka panchayats or district panchayats can be altered under Section 7 of the Bombay Land Revenue Code alone. In the present case, no alterations are made as envisaged by Section 7 of the Bombay Land Revenue Code. Thus, inspite of the alteration or expansion of the boundaries of the Ahmedabad Municipal Corporation, the constituent Village/Nagar panchayats have not changed. The de- limitation as envisaged by Rule 3A of the Rules of 1982 is not called for. As to the Special General meeting of 14th March 2009, Mr. Mehta has strenuously urged that the agenda notice and the full text of the proposed amendment were duly served upon each member of the Bank; the business at the meeting was duly deliberated. Mr. Mehta has also submitted that pending hearing of these petitions also, the Bank had convened a meeting of the members of the Bank. In the said meeting also, by majority of votes it has been resolved that the agenda notice in respect of Special General Meeting dated 14th March, 2009 and full text of the proposed amendment was duly served upon every member of the Bank. Mr. Mehta has submitted that there indeed was a haste in convening the meeting held on 14th March 2009; in submitting the proposed amendment to the Registrar and in obtaining sanction to the proposed amendment. He has submitted that such haste was called for with a view to implementing the policies of the Government of India. He has submitted that since 2006 the Government of India has taken a policy decision to advance financial assistance to the ?Self-Help Groups?. Section 22 of the Act of 1961 provides for the person who may become member. Sub-Section (1) thereof provides, inter alia, ?no person shall be admitted as a member of a society except the following.?The categories which can be accepted as member of the society are enumerated in clauses (a) to (f) thereof. The Government of Gujarat has amended the aforesaid Section 22 by the Gujarat Act No. 1 of 2008 published in the Government Gazette on 23rd January, 2008. By the said amendment, after the aforesaid clauses (a) to (f), clause (g) has been added to include, a group or the individuals eligible under clauses (a) whether incorporated or not and whether established or not. In the submission of Mr.
By the said amendment, after the aforesaid clauses (a) to (f), clause (g) has been added to include, a group or the individuals eligible under clauses (a) whether incorporated or not and whether established or not. In the submission of Mr. Mehta, the aforesaid amendment has been made in furtherance of the policy of the Government of India to advance financial assistance to the unorganized individuals. In view of the said amendment, the cooperative societies in the State of Gujarat are now permitted to admit the Self Help Groups to their membership. The Bank proposed to amend its Bye-law 8 (1) [4] in furtherance of the aforesaid policy, in consonance with Section 22 [1] (g) of the Act of 1961. Pursuant to the amendment to bye-law 8 (1) (4) the Bank has been able to admit as many as 743 Self Help Groups to its membership. He has submitted that the Self- Help Groups are informal groups of unorganized individuals. The purpose of inducting them as members of the Bank is to advance financial assistance to such unorganized groups. Besides, the Government of India also gives grant for advancing financial assistance to such groups. Unless the bye-laws were suitably amended and implemented before the year end, the Bank would have lost the amount of such grant to the extent of Rs. 80 Crores. Since amendment to the bye-laws, by 31st March 2009 the Bank has admitted as many as 743 such groups to its membership. He has also submitted that a bare perusal of the amendment sanctioned by the Registrar reveals that the proposed amendment was not sanctioned for asking. Certain amendments were sanctioned as proposed and certain others were sanctioned with modification. Thus, it is apparent that the sanction was accorded after proper application of mind. In the submission of Mr. Mehta, there is nothing suspicious or irregular about the election process. The election process, having been set into motion, should not be stayed. In support of his submissions, Mr. Mehta has relied upon the judgments of the Hon'ble Supreme Court in the matters of Shri Sant Sadguru Janardan Swami [Moingiri Maharaj] Sahakari Dugdha Utpadak Sansthan & Ors. v. State of Maharashtra & Anr. [ (2001) 8 SCC 509 ]; of M.S Madhusoodhanan & Anr. vs. Kerala Kaumudi (P) & Ors.[(2004) 9 SCC 204]; of Pundlik v. State of Maharashtra & Ors.
v. State of Maharashtra & Anr. [ (2001) 8 SCC 509 ]; of M.S Madhusoodhanan & Anr. vs. Kerala Kaumudi (P) & Ors.[(2004) 9 SCC 204]; of Pundlik v. State of Maharashtra & Ors. [ AIR 2005 SC 3746 ]; of Vadodara District Cooperative Sugarcane Producers' Union Limited vs. Chandrakantbhai Thakorebhai Patel & Ors., [(2005) 11 SCC 523], and of this Court, in the matters of and of Valsad District Central Cooperative Bank Limited vs. State of Gujarat V.H Shah, IAS or His Successor & Ors. [2003 (2) GLH 459]; and of Siddhpur Taluka Cooperative Purchase & Sales Union & Ors. vs. State of Gujarat & Ors. [ 2002 (2) GLR 1357 ]. Learned Advocate General Mr. Trivedi has appeared for the State Government. He has contested the petitions on the principle that the election process having been set-in-motion, need not be stalled. He admits that two days' time was announced for receipt of the objections against the provisional voters' list and for publication of final voters' list. However, the final voters' list was published on 21st September, 2009 after statutory period of seven days. Thus, in the submission of Mr. Trivedi, there was a substantial compliance with the statutory requirement under Rule 6 [2] of the Rules of 1982. He has relied upon the judgment of the Full Bench of this Court in the matter of Daheda Group Seva Sahakari Mandli Limited vs. R.D Rohit, Authorized Officer & Cooperative Officer [Marketing], {2006 (1) GCD 211 (Guj.)FB]. The contention requires to be rejected outright. The Election Officer has evidently failed to perform his statutory duty in accordance with the statutory mandate. Sub-Rule (2) of Rule 6 of the Rules of 1982 expressly allows seven days' time to a person to make claim or to raise objection against the provisional list of voters. The Election Officer could not have, at his own will, reduced the said time to two days, as has been done in the present case. This laxity in the functioning of the Election Officer alone is sufficient to set-aside the final voter' list published on 21st September 2009 and the ensuing election. We are conscious that the election of the Board of Directors of the Bank has already been set into motion; the final voters' list has also been published; Nomination papers have been filed and the polling is scheduled on 14th October 2009.
We are conscious that the election of the Board of Directors of the Bank has already been set into motion; the final voters' list has also been published; Nomination papers have been filed and the polling is scheduled on 14th October 2009. Normally, the Courts do not interfere in the election process once set in motion. In the present case, however, this Court interferes with the election process for the following reasons : [1] Prima facie, we are not satisfied with the argument that the expansion of the boundaries of the Ahmedabad Municipal Corporation in exercise of powers conferred by the Act of 1959 and the Constitution does not affect the revenue limits of the village panchayats or taluka panchayats or municipalities or that the alteration does not affect the constituencies of the Bank. We are, therefore, of the opinion that the expansion of the boundaries of the Ahmedabad Municipal Corporation and the merger of several surrounding village panchayats and municipalities in the Ahmedabad Municipal Corporation necessarily called for de-limitation. Rule 3A of the Rules of 1982 enjoins the Secretary or the Chief Executive Officer of a Society to prepare a provisional list of constituencies in the year preceding the year in which the election is scheduled. Thus, irrespective of any change in the limits of the constituencies, it is imperative that a provisional list of constituencies should be prepared in the year preceding the year of election. Admittedly, that exercise has not been done in the present case. Such exercise was necessitated all the more on account of alteration in the boundaries and the merger of village panchayats and municipalities, as discussed hereinabove. [2] Learned advocate Mr. Joshi has produced copy of the proposed amendment served upon some of the members. The said copies do not contain bye-law 8 (1) proposed to be added. Though Mr. Mehta has strenuously urged that every member of the Bank was served with a complete text of the proposed amendment, it is not possible to accept the said submission. Mr. Mehta has been shown the aforesaid notices and the accompanying incomplete schedule received by some members of the Bank. He has not been able to explain the missing page in the text of the proposed amendment.
Mr. Mehta has been shown the aforesaid notices and the accompanying incomplete schedule received by some members of the Bank. He has not been able to explain the missing page in the text of the proposed amendment. We do not intend to impute any motive to the Bank, it may be inadvertent lapse; but the fact is that all the members of the Bank did not receive complete text of the proposed amendment to the bye-laws. The amended bye-law 8[1] imposes stringent conditions upon the persons contesting for the office of the Director. It also imposes stringent conditions on the member societies which such persons represent. It provides that such person shall possess shares of the member society worth atleast Rs. 2,000/= and shall have a deposit of Rs. 30,000/= in the Bank for a period of three years. For the member societies which such persons represent, it is provided that such society shall not be of D category and shall possess shares of the value stated in the said by-law 8[1]. May be that the aforesaid restrictions have been imposed with a laudable purpose of allowing genuine members alone to contest the election, but it was imperative that the aforesaid restrictions were made known to every member of the Bank. In the present case, as recorded hereinabove, the proposed amendment was not made known to every member of the Bank. After sanction of the proposed amendment on 25th March 2009, there was hardly any time for the members to meet with the revised requirement. Thus, major part of the members have automatically been debarred from contesting the election. Obviously, the ruling faction was aware of these conditions and is necessarily benefited. As to the induction of some 743 Self-Help Groups, we are of the opinion that it was practically impossible for the Bank to induct so many groups within a short time of a week or so after proper scrutiny. It is quite likely that many of the aforesaid Self-Help Groups may not be the genuine or the functioning groups. Induction of as many as 743 groups within a short period of one week before 31st March 2009 would necessarily tilt the balance at the ensuing election. It may also be noted that the amendment to Section 22 of the Act of 1961 was made as early as in the month of January, 2008.
Induction of as many as 743 groups within a short period of one week before 31st March 2009 would necessarily tilt the balance at the ensuing election. It may also be noted that the amendment to Section 22 of the Act of 1961 was made as early as in the month of January, 2008. Had the Bank been vigilant, necessary amendment to the bye-laws need not have waited till March 2009. In the above circumstances we believe, whether intentionally or inadvertently, the persons in power have gained edge over other prospective contestants. The fairness which is the soul of any election is totally missing. Such election cannot be allowed to proceed further. For the aforesaid reasons, we allow these petitions. The ensuing election of the Board of Directors of the respondent-Ahmedabad District Cooperative Bank Limited is quashed and set-aside. The addition of bye-law 8[1] approved in the Special General meeting of 14th March 2009 and sanctioned on 25th March 2009 is set-aside. The Ahmedabad District Cooperative Bank Limited is directed to initiate the election process afresh in accordance with law, after considering the delimitation of its constituencies as envisaged by Rule 3A of the Rules of 1982; after examining and scrutiny of the veracity of each Self-Help Group inducted prior to 31st March, 2009 i.e., whether they are genuine and functioning groups. The Bank will ensure that only those groups are continued as members which are genuine and are functioning. The respondent no.3-Ahmedabad District Cooperative Bank Limited will carry out the functions of delimitation and scrutiny of newly inducted Self-Help Groups as early as possible but not beyond the period of three months from today. The respondent No. 3, the Ahmedabad District Cooperative Bank Limited, will bear the cost of the petitioners. The cost to each petitioner is quantified at Rs. 15,000/=. At the request of learned Addl. Advocate General Mr. Mehta, the operation of this order is stayed upto 9th October 2009.