JUDGMENT 1. As the facts of both the petitions are inter connected they are being considered by this common judgment. 2. Rule. Mr. H.H. Parikh, learned Assistant Government Pleader waives notice for respondent Nos. 1, 3 and 4, Mr. V.K. Shah waives notice for respondent No.2 and Mr. Umang Vyas waives notice for respondent Nos. 6 & 7 in Special Civil Application No. 1712 of 2010. Mr. Himansu Patel, learned A.G.P. waives notice for respondent Nos. 1, 2 and 4, Mr. V.K. Shah waives notice for respondent No.2 and Mr. R.S. Oza waives notice for respondent Nos. 6 & 7 in Special Civil Application No. 1713 of 2010. 3. The present petitions are directed against the orders passed by the District Registrar and confirmation thereof by the State Government whereby the petitioners have been disqualified and removed under Section 76-B of the Gujarat Cooperative Societies Act (hereinafter referred to as 'the Act'). 4. The petitioner of Special Civil Application No. 1712 of 2010 was the Chairman of Savarkundla Nagarik Sahakari Bank Ltd. (hereinafter referred to as 'the Bank') and the petitioner of Special Civil Application No. 1713 of 2010 was the elected Managing Director of the said Bank. It appears that while working as the elected Managing Director of the Bank the petitioner of Special Civil Application No. 1713 of 2010 performed well and in the Annual General Meeting of the society it was decided that he be appointed on token honorarium of Rs. 2/- as the Managing Director subject to the approval of the District Registrar. The District Registrar in response to the said resolution, observed that the powers vest to the Managing Committee. Thereafter the Managing Committee instead of acting as per the resolution of the General Board, converted the post for the salary of Rs. 10,000/- per month and without giving any advertisement or without making any effort for giving opportunity to any other eligible or qualified persons, appointed the petitioner of S.C.A. No. 1713 of 2010. The said resolution was moved in the Managing Committee by the petitioner of S.C.A. No. 1712 of 2010 as a Chairman and the pertinent aspect is that at the relevant point of time Shri Vadera who was to be appointed as the Managing Director being paid employee had not resigned. Powers for the resignation and appointment were assigned to Shri Madhvani who is petitioner of S.C.A. No. 1712 of 2010. Powers for the resignation and appointment were assigned to Shri Madhvani who is petitioner of S.C.A. No. 1712 of 2010. The aforesaid action was made as a basis for initiation of the action under Section 76-B of the Act by the District Registrar. The District Registrar ultimately passed the order in exercise of the powers under Section 76B of the Act and both the petitioners are removed from their respective post of the Chairman and the Managing Director, as the case may be, and further disqualified for a period of four years, though in the show cause notice such period was provided for two years. The matter was carried in appeal before the Additional Registrar (Appeals) by the respective petitioners and the Appellate Authority had allowed the appeal and remanded the matter to the District Registrar. The original complainant and other party who was interested, carried the matter in revision before the State Government and ultimately the State Government vide impugned order, maintained the order of removal under Section 76B(1) and also disqualification under Section 76B(2). It is under these circumstances, the present petitions before this Court. 5. Heard Mr. Yagnik, learned counsel appearing for the petitioners in both the petitions, Mr. H.H. Parikh, learned Assistant Government Pleader for respondent Nos. 1, 3 and 4, Mr. V.K. Shah for respondent No.2 and Mr. Umang Vyas for respondent Nos. 6 & 7 in Special Civil Application No. 1712 of 2010 and Mr. R.S. Oza for respondent Nos. 6 & 7 in Special Civil Application No. 1713 of 2010. 6. The contention raised on behalf of the petitioners is that as per the Gujarat Cooperative Societies Rules, there is power with the Managing Committee for appointing any staff of the Bank, therefore if the powers are exercised, it would not attract the provisions of Section 76B of the Act since the exercise of the powers cannot be said to be prejudicial to the interest of the bank. It was also contended that the concerned petitioners are already removed pursuant to the impugned order. Therefore, if the punishment is further continued of disqualification for a period of four years or even for two years, such would be very harsh and the same cannot be maintained in view of the facts and circumstances of the case. 7. Whereas, the learned counsel for the respondents supported the order. Therefore, if the punishment is further continued of disqualification for a period of four years or even for two years, such would be very harsh and the same cannot be maintained in view of the facts and circumstances of the case. 7. Whereas, the learned counsel for the respondents supported the order. But, the pertinent aspect is that none of the learned counsel appearing for the respondents has been able to support the order for disqualifying the petitioners concerned for a period of four years though show cause notice was only for two years. 8. It is an admitted position that the petitioners were holding capacity as the elected representative of a Cooperative Bank, one was the Chairman of the Bank and another was the Managing Director. This Court had an occasion to consider the issue of status of an elected representative in a Cooperative Society in case of V.J. Patel, Chairman & Ors. v. Registrar of Cooperative Societies & Ors. in Special Civil Application No. 12548 of 2009 in the matter where the powers were to be exercised by the members of the Managing Committee of the society or the office bearers in the field of employment or appointment of the staff. This Court had observed in para 13 to 17 as under: “13. It may be recorded that this Court had an occasion to consider the question of status of an elected representative of a specified Cooperative Society, i.e. Khedut Sahakari Khand Udhyog Mandali, and the faith reposed upon such elected representatives and nature of power whether could be said with public duty or not and the accountability thereof, while considering the question of fastening the financial liabilities under section 93 of the Gujarat Cooperative Societies Act, in the decision in the case of Ishwarbhai Narottambhai Patel Vs. K.H. Trivedi, reported at 2003(1) GLR 537 . In the said decision, it was inter alia observed at para 15, the relevant of which is as under: “15. Further the earning of profits out of the utilisation of the machinery is always the purpose of investment of the money by the society. The society had placed the order with a view to see that the machinery can be used and profit can be earned therefrom. Further the earning of profits out of the utilisation of the machinery is always the purpose of investment of the money by the society. The society had placed the order with a view to see that the machinery can be used and profit can be earned therefrom. If the supplier had supplied a genuine and good quality machine and if the society had earned profit by utilising the said machinery, the supplier would be entitled to the legitimate price of the machinery as per the terms and conditions of the purchase agreement. At this stage it would be worthwhile to refer to some of the observations made by this Court in the case of "Varvabhai Nathabhai Rabari Vs State of Gujarat" as per the judgement dated 28-1-2002 in LPA No.8/2002 of the Division Bench. In a matter of supersession of the Market Committee, while dealing with the contentions of the elected body that when two views are possible, it cannot be said that default is committed in performance of duties. While testing the said submission it was observed by the Division Bench at para 9 as under: "The status of the elected members of the market committee is more or less like the status of other elected members holding the office under the local authorities or statutory authorities. It is true that the market committee has been given power to purchase and sell its property, but its power to purchase and sell the properties are coupled with the duty to ensure that such powers are used for enforcement of the objects of the At, rules and bye-laws. These powers are coupled with the public duty and such powers are not like powers of individual persons managing their own affairs but there is something more about the accountability. These powers are coupled with the public duty and such powers are not like powers of individual persons managing their own affairs but there is something more about the accountability. It is needless to point out that when any representative is elected by the voters, some faith is reposed on such elected representative by the voters that the so elected representative would exercise his powers under statutes for the larger interested of the institution or the local body by acting as a wise person keeping in view the pros and consequences of the action to be taken and keeping in view the interest of institution or the body." I am of the view that the observations made by the Division Bench were pertaining to the elected body of a market committee in a matter of supersession of a market committee which is a statutory body. I find that the status of the elected members of the society is more or less at par with the elected representative of such market committee or any other elected representative. Perusal of the scheme of the Gujarat Cooperative Societies Act also shows that the principles of accountability is maintained even in the affairs of the administration of cooperative societies. In that view of the matter, I find that there is no reason why such principles should not be applied to the elected representative of the cooperative society also. In the present case, there was absolutely no justification for condoning the amount because the test would be whether any prudent person would allow an amount of Rs.1,45,000/- to let go merely because the supplier had supplied a machinery of good quality or merely because he has earned good profit out of it. In the present case, there was absolutely no justification for condoning the amount because the test would be whether any prudent person would allow an amount of Rs.1,45,000/- to let go merely because the supplier had supplied a machinery of good quality or merely because he has earned good profit out of it. The normal conduct of any office bearers of the society or even a normal prudent person would insist that the excess payment which is made must be refunded because the price of the machinery which was fixed was for supplying genuine and good quality machinery and investment was with a view to make profit and, therefore, there can be hardly any justification for condoning such amount.” (Emphasis supplied) Therefore, it appears to the Court that when it is a matter pertaining to recruitment of number of posts in a specified society in whom the power vests, such power is required to be exercised with public duty to observe minimum basic principles of fairness, which is one of the foundation of common law. 14. Even if this Court is to proceed on the basis that the autonomy of the District Union as a specified Society is to be maintained by accepting the power with the District Union itself to make appointment of its own staff for regulating its business, then also, it can hardly be said that such powers can be exercised by the office bearers of the District Union or the person concerned in charge of the District Union as per their own sweet will or as per their whims and caprice nor can it be said that merely because such powers are available to appoint, such powers can be exercised in an unfair manner on any ground whatsoever. It is true that the Act does provide for enabling power with the State Government under Section 76 read with Section 168 of the Act to provide for the qualification for appointment of the manager, secretary, accountant, or any other officer or employee of the Society, but merely because the State Government in exercise of its power to frame Rules under Section 168 of the Act has not framed Rules for the power under Section 76 of the Act, it cannot be said that the same would make room for the Society concerned to exercise power in an unfair manner or that without observing the basic principles of fairness and transparency in the process of recruitment to be undertaken by the Society. The same would more be required if such Society is a specified Society whose functioning involves huge public interest. Therefore, even if such powers are read and retained by the office bearers of the Society to undertake recruitment and to make appointment of its staffs for the functioning of the District Union, basic principles of fairness would be required to be followed. 15. It may be recorded that it is a fact that the office bearers of such society are to act in the interest of the society as against or in isolation to their individual interest. The post held is at par with the position of any person holding post in fiduciary capacity. The person holding fiduciary capacity should always be conscious of the fact that he or she has to act for betterment of the interest of the beneficiary. No consideration of his/her private interest should prevail as against betterment of interest of the beneficiary. None can discharge the duty in fiduciary capacity properly unless he keeps his individual or personal interest away from the interest of the beneficiary for whom he has to work. Therefore, the basic principles of fairness will have the role to play while functioning in fiduciary capacity by the office bearers of the society and more particularly the specified society whose functioning involves huge public importance. 16. Such basic principles of fairness can broadly be classified into 5 categories: (1) The set-up of the staff. Such would be dependent upon its financial condition and to meet with the quantum of work. 16. Such basic principles of fairness can broadly be classified into 5 categories: (1) The set-up of the staff. Such would be dependent upon its financial condition and to meet with the quantum of work. It is difficult to accept that irrespective of its financial condition or quantum of work, the District Union can have the set up of its staffs as per the whims and desire of the office bearers of such District union or a specified Society. (2) The minimum qualification required keeping in view the nature of the work to be discharged by the person concerned. It is not possible to accept that the minimum qualification for the post concerned would have no relevance at all if the principles of basic fairness is to be observed. Such principles of basic fairness would require that the related qualification may be atleast to the minimum extent, must be in existence for the post for which the recruitment process is undertaken. (3) The third would be the public advertisement not only for giving opportunity to the eligible persons to apply for the post, but also to enable the specified Society to chose more meritorious and appropriate persons for the post in question. It is not possible to accept that if the public advertisement is not given, it will leave room for offering appointment by the office bearers of such Society by private negotiations which would not only be against the basic principles of fairness, but would also leave room for large number of malpractices. In any case bonafide attempt to find out meritorious and appropriate person would require the consideration of eligible persons which will not be over unless properly advertised or made known to the eligible persons or public at large generally. (4) The fourth is the mode of selection through the proper selection committee with a view to see that the meritorious candidates are inducted without any bias or favour. If less meritorious person is appointed, it would be against the interest of the Society itself and the basic principles of fairness would be frustrated if a person having bias is to participate at the selection process or the person participating in the selection holds no capability at all to judge the merit of any candidate. 5. If less meritorious person is appointed, it would be against the interest of the Society itself and the basic principles of fairness would be frustrated if a person having bias is to participate at the selection process or the person participating in the selection holds no capability at all to judge the merit of any candidate. 5. The fifth and the last would be reasonable transparency to be maintained in all the above referred four steps before finalization of the recruitment process. 17. It appears to the Court that if the above referred principles of basic fairness are not observed in the matter of recruitment to be undertaken by a specified Society, it would not only result into large number of chaotic situation, but would also leave room for large number of manipulations and malpractices resulting into ultimate damage to the interest of the Society and its members and consequently, damage to the public interest in the field of employment as well as in the field of operation of such Society involving huge public interest and such would be in contravention of public duty to be discharged by the office bearers of the society by non observance of the basis or foundation of common law.” 9. The aforesaid shows that the status of the elected representative was at par with the person holding fiduciary capacity. Therefore, while exercising the powers, it was required for the person concerned to keep in mind the basic principles of common law while exercising the powers by maintaining the status as that of the trustee of the properties of the society, which is bank in the present case. If the action is tested in light of the aforesaid observations made by this Court, the action could not be sustained. One who is an elected representative, cannot convert the post unto himself nor such post can be filled up without following the basic principles referred to herein above in the aforesaid decision for filling up of the post of Managing Director which is a top most position in the bank. One who is an elected representative, cannot convert the post unto himself nor such post can be filled up without following the basic principles referred to herein above in the aforesaid decision for filling up of the post of Managing Director which is a top most position in the bank. Acting in contravention thereto could be said to be prejudicial to the interest of the bank inasmuch as acting in contravention thereto would not only run counter to the basic principles of common law to be observed by the person in fiduciary capacity but would also be prejudicial to the interest of the bank inasmuch as no effort has been made to see that the more meritorious person is offered the post by giving opportunity to the other eligible persons. 10. Apart from the above, the fact remains that the powers have been exercised not in conformity with the resolution of the General Board but have been exercised in contravention to the resolution of the General Board inasmuch as the General Board has resolved for token honorarium of Rs. 2/-, whereas by the resolution of the Managing Committee, wherein one of the petitioners was the Chairman, the post is converted for Rs. 10,000/- per month on regular basis. 11. It is true that the lower authorities have not considered the matter keeping in view the aforesaid aspects. However, the fact that the elected representatives have converted the post unto themselves could, per se, be said to be a misuse of the powers and prejudicial to the interest of the Bank. Apart from the above such conduct on the part of the office bearers would shake the basic confidence of the voters or the share holders of the society who have reposed into the office bearers the holy hope for exercise of the powers in bonafide manner and in the larger interest of the society. 12. Under these circumstances, it cannot be said that the District Registrar or the State Government has committed error for removal under Section 76B(1) of the Act. 13. However, the contention that the disqualification under Section 76B(2) of the Act is beyond the show cause notice deserves consideration. The learned counsel for the respondents have not been able to show any other show cause notice whereby the petitioner was given opportunity for the contemplated disqualification for a period of four years. 13. However, the contention that the disqualification under Section 76B(2) of the Act is beyond the show cause notice deserves consideration. The learned counsel for the respondents have not been able to show any other show cause notice whereby the petitioner was given opportunity for the contemplated disqualification for a period of four years. Under these circumstances, if it is an admitted position that the show cause notice was for disqualification under Section 76B(2) of the Act for two years while passing the final order, the petitioners could not have been disqualified for the period of exceeding two years, which, in the present case has been four years. Therefore, the impugned order, to that extent, for disqualifying the petitioners under Section 76B(2) of the Act for a period exceeding two years cannot be sustained. 14. In view of the aforesaid, the impugned orders passed by the District Registrar and confirmation thereof by the State Government for removal of the concerned petitioners under Section 76B(1) of the Act do not deserve to be interfered with. However, for the further disqualification under Section 76B(2) of the Act, the order for disqualifying exceeding two years is quashed and set aside. Consequently such disqualification under Section 76B(2) of the Act would remain for the period of two years only. 15. Petitions are partly allowed to the aforesaid extent. Rule made absolute accordingly.