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2015 DIGILAW 1146 (GUJ)

Vipulbhai Mansinhbhai Chaudhary v. State of Gujarat

2015-11-02

JAYANT PATEL, N.V.ANJARIA

body2015
JUDGMENT : Jayant Patel, J. Admit. Mr. Chintan Dave learned AGP waives notice for all the respondents. 2. With the consent of learned advocates for both the sides, the appeal is finally heard. 3. The present appeal is directed against the order dated 27.10.2015 passed by the learned single Judge of this court in SCA No. 17826 of 2015, whereby the learned single Judge for the reasons recorded in the order has rejected the petition. 4. The short facts appears to be that the notice under section 76B of the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as ‘the Act’) was issued to the appellant on the alleged irregularities and illegalities while functioning as the Chairman of the Mehsana District Co-operative Milk Producers’ Union Ltd. (hereinafter referred to as ‘the society’ for the sake of convenience), which is a District Level Federal Union. The appellant submitted reply to the said show cause notice. But the relevant aspect is that in the body of the show cause notice dated 12.01.2015 there was reference to the proposed action under Section 76B(1)(2) of the Act, however, there was no express reference made about the further disqualification to hold office or to contest election in any other society under the Act. The appellant submitted reply to the show cause notice and ultimately vide order dated 10.03.2015, the power was exercised under section 76B(1) & (2) by the Registrar of the Cooperative Societies, whereby the appellant was removed as the Chairman of the society and was further disqualified for a period of three years to contest the election or to hold any office in any other society. The said order of removal was challenged by the appellant in Special Civil Application No. 9618 of 2015. The learned single Judge after hearing both the sides did not interfere with the order passed for removal under section 76B(1) of the Act, but quashed and set aside the order passed under section 76B(2) of the Act mainly on the ground that there was no specific notice for further disqualification under section 76B(2) of the Act. The learned single Judge after hearing both the sides did not interfere with the order passed for removal under section 76B(1) of the Act, but quashed and set aside the order passed under section 76B(2) of the Act mainly on the ground that there was no specific notice for further disqualification under section 76B(2) of the Act. It appears that thereafter the Letters Patent Appeal was preferred by the appellant against the order of the learned single Judge so far as it related to non-interference to the order passed under section 76B(1) of the Act, and the said LPA being LPA No. 1302 of 2015 came to be disposed of vide order dated 19.10.2015. It appears that thereafter on 3.10.2015 (Annexure-F) once again on the same charges, as they were of the earlier show cause notice, another show cause notice under section 76B(2) of the Act has been issued calling upon the appellant to show cause as to why he should not be disqualified to hold the office in any other society for a maximum period of six years. The said show cause notice has been challenged by the appellant by preferring petition before this court being SCA No. 17826 of 2015. The learned single Judge for the reasons recorded in the order dismissed the petitioner vide order dated 27.10.2015. Under the circumstances, the present appeal before the Division Bench of this court. 5. We have heard learned Senior Counsel Mr. Mihir Thakore with learned counsel Mr. P.S. Champaneri for the appellant and Learned Additional Advocate General Mr. Prakash Jani assisted by learned AGP Mr. Chintan Dave for the respondents. 6. It is by now well settled that if the matter is at the show cause notice stage, unless the court finds that the initiation of the action of issuance of show cause notice is without jurisdiction, this court would be loath to interfere in a petition under Article 226 of the Constitution and the court would relegate the party to appear before the authority and to show cause and thereafter the remedy under Article 226 of the Constitution may be resorted to after exhausting the statuary remedy available. 6.1 It is an undisputed position that the petition is at the show cause notice stage. 6.1 It is an undisputed position that the petition is at the show cause notice stage. Therefore, at this stage, the only aspect which may be required to be addressed is whether the action of issuance of second show cause notice could be said as without jurisdiction and beyond the scope of section 76B of the Act or not. 7. In order to appreciate the contention, we may reproduce the section 76B of the Act for ready reference, which reads as under. “76B. 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. (2) 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.” 7.1 A perusal of the aforesaid section shows that if in the opinion of Registrar any officer of the society makes any persistent default or is negligent in performing his duties imposed upon him or he stands disqualified by or under the Act or does anything which is prejudicial to the interest of the society, the Registrar may after giving opportunity to such officer of being heard, pass the order for removal of such officer and may further pass order to elect or appoint any person in place of such officer so removed. Sub-section (2) of section 76(B) provides that the Registrar may by order direct that the officer so removed shall be disqualified to hold or to contest election of any office in the society from which he is removed and/or in any other society for a period not exceeding six years from the date of the order. In sub-section (2) there is no express opportunity of hearing to the officer concerned is contemplated by statute before disqualification after removal. 7.2 On a conjoint reading of sub-section (1) and sub-section (2) of section 76B of the Act, it can be said that section 76B of the Act contemplates two situations. One for removal and another for disqualification of such person or officer so removed. By virtue of subsection (2), it has been further provided that there would not be any order for disqualification unless the officer is so removed. Under the circumstances, removal of the officer is a condition precedent for exercise of powers under sub-section (2) of section 76B of the Act. It further appears that as under sub-section (2) of Section 76B of the Act, there is no express language used for issuance of any notice or opportunity of hearing before the officer is disqualified. Such would mean that the contingency under sub-section (1) of removal and contingency under subsection (2) of disqualification has to simultaneously play the consequence. Sub-section (1) itself provides for opportunity of hearing whereas subsection (2) does not provide for express opportunity of hearing. Under this circumstance, when language is used under sub-section (1) for hearing, such hearing is to be interpreted to mean that hearing should be for both contingencies, one for removal and another for disqualification. Be it recorded that mere reference of removal and disqualification by referring the section 76B(1) and 76B(2) would not sufficient, since the operation of the removal and disqualification would be on the different field namely removal would be from the society in which office is held by the officer; whereas the disqualification would be for any other society. Be it recorded that mere reference of removal and disqualification by referring the section 76B(1) and 76B(2) would not sufficient, since the operation of the removal and disqualification would be on the different field namely removal would be from the society in which office is held by the officer; whereas the disqualification would be for any other society. Therefore, it can be said that if the powers are to be exercised under section 76B of the Act for both the purposes, namely for removal and for disqualification, the show cause notice should state as to why such officer should not be removed under section 76B(1) and simultaneously should state as to why such officer should not be disqualified from holding the office in any other society as per section 76B(2) of the Act. 7.3 We may also record that as per mechanism, the operational area of removal and disqualifications are different. While exercising powers under section 76B(1) of the Act, the Registrar may be required to examine as to whether the person has made persistent default or is negligent of performing his duties under the Act or rules or bye-laws or has done prejudicial in the interest of the society or he has been disqualified under the Act or not. But, all such shall be relatable to the society where the person is holding the office. Whereas, in exercise of the power under sub-section (2) of section 76B of the Act, the Registrar will be required to examine as to whether the person so removed should be permitted to contest the election or to hold the office in any other society or not, and while examining the said aspect, the Registrar may examine as to whether any other society is having similar activity and as to whether degree of the above referred misconduct as provided in sub-section (1) is so grave that such person should also be prohibited or disqualified to hold office or to contest the election in any other society or not. After having found that the power of disqualification should be exercised, the Registrar may have to address himself on the point as to the period during which the person so removed should be disqualified. After having found that the power of disqualification should be exercised, the Registrar may have to address himself on the point as to the period during which the person so removed should be disqualified. Sub-section (2) of section 76B of the Act provides for maximum period of six years, but thereby it cannot be said that in all cases the disqualification should be for six years, but it would be required for Registrar to apply his mind on the aspect of degree and the gravity of the misconduct and thereafter to decide as to for what appropriate period the person should be disqualified to hold the office or to contest election in any other society. It is hardly required to be stated that merely because the power is contemplated under the Act, that does not mean that in all cases irrespective of the degree or the gravity of the misconduct, the power should be exercised for the maximum period. Suffice it to observe that the aspect of proportionality for disqualification will be required to be considered while exercising the power under sub-section (2) of section 76B of the Act. 8. After having considered the aforesaid mechanism, as observed earlier, when section 76B of the Act speaks for only one show cause notice and opportunity of hearing, both the exercise has to be simultaneous, but in the show cause notice for the alleged irregularities or illegalities, the opportunity should be made available to the officer concerned to show cause on both the aspects namely for removal and for disqualification separately and that too for a particularly period in any other society. 8.1 It can also be said that section 76B of the Act contemplates for single proceeding but the consequence shall be two one for removal and another for disqualification. 9. At this stage, we may refer to the decision of this court in case of Kantilal Chandulal Shah v. C.J. Jose and Another reported in 1987 (1) GLH P. 563, wherein though the officer of the society had tendered the resignation, the order was passed for his disqualification under section 76B(2). 9. At this stage, we may refer to the decision of this court in case of Kantilal Chandulal Shah v. C.J. Jose and Another reported in 1987 (1) GLH P. 563, wherein though the officer of the society had tendered the resignation, the order was passed for his disqualification under section 76B(2). In the said decision, this court at paragraph No.7 observed thus, “A mere look at Section 49(2) of the Gujarat Panchayats Act and reading it in juxtaposition with section 76B(2) of the present Act, leaves no room for doubt that the legislature in its wisdom while enacting Section 76B(2) did not contemplate a situation in which the competent authority can order disqualification of an officer of the society who is not first removed by him for the alleged misconduct. In short, no order of disqualification under Section 76B(2) can be passed by the competent authority without there being in the field, as a condition precedent, a valid order of removal of the concerned officer from the membership of the Managing Committee of the Society. May be this may be a case of omission on the part of the legislature which may be wilful or otherwise. But as far as the provisions stand on the statute book, there cannot be any escape from the conclusion that no order of disqualification under Section 76B(2) can be passed against an officer of the Society unless in the first instance, there is a valid order in the field under Section 76B(1) ordering his removal from the concerned office occupied by him in the Managing Committee of the Society. Mr. Vakharia’s contention, therefore, has to be accepted.” 9.1 Further at paragraph No.8, it was inter alia observed thus, “Thus the removal order under section 76B(1) must precede the order of disqualification under section 76B(2).” 10. In the said case, there was no removal order in the field. Consequently, disqualification order was treated to be entirely without jurisdiction and ultra vires to the scheme of the Act and de-hors to provisions of section 76B(2) of the Act. It is true that in the said decision of this court, the question did not fall for consideration about the two consequences namely of removal and disqualification in one proceeding or two separate proceedings for removal and disqualification. 11. It is true that in the said decision of this court, the question did not fall for consideration about the two consequences namely of removal and disqualification in one proceeding or two separate proceedings for removal and disqualification. 11. At this stage we may also refer to the provisions of section 57 of the Gujarat Panchayat Act, which refers to the removal of Surpanch or Upa-Surpanch, as the case may be, and also for disqualification not exceeding 5 years. Section 57 of the Gujarat Panchayats Act, 1993, reads as under. “57(1) The competent authority may remove from office any member of the panchayat, the Sarpanch or, as the case may be, the Upa-Sarpanch thereof, after giving him an opportunity of being heard and giving due notice in that behalf to the panchayat and after such inquiry as it deems necessary, if such member, Sarpanch or, as the case may be Upa-Sarpanch has been guilty of misconduct in the discharge of his duties or of any disgraceful conduct or abuses his powers or makes persistent default in the performance of his duties and functions under this Act or has become incapable of performing his duties and functions under this Act. The Sarpanch, or, as the case may be, the Upa-Sarpanch, so removed may at the discretion of the competent authority also be removed from the membership of the panchayat. (2) The competent authority may, after following the procedure laid down in sub-section (1) disqualify for a period not exceeding five years any person who has resigned his office as a member, Sarpanch or Upa-Sarpanch, or otherwise ceased to hold any such office and has been guilty of misconduct specified in sub-section(I) or has been incapable of performing his duties and functions : Provided that an action under this sub-section shall be taken within six months from the date on which the person resigns or ceases to hold any such office. (3) Any person aggrieved by an order of the competent authority under sub-section (1) or (2) may, within a period of thirty days from the date of the communication of such order, appeal to the State Government.” 12. (3) Any person aggrieved by an order of the competent authority under sub-section (1) or (2) may, within a period of thirty days from the date of the communication of such order, appeal to the State Government.” 12. If the language of the section 76B of the Act is compared with the section 57 of the Gujarat Panchayat, Act one can find the difference in the language used under sub-section (2) of section 76B of the Act and sub-section (2) of section 57 of the Gujarat Panchayat Act and the said distinction is that under sub-section (2) to section 57 of the Gujarat Panchayat Act, the language used by the legislature is “after following the procedure laid down in sub-section(1)”, whereas such is missing in sub-section (2) of section 76B of the Act. In our considered view, it would make a distinction in the proceedings to be undertaken if the language under section 76B of the Act and more particularly subsection (2) is considered and compared with section 57(2) of the Panchayats Act. It can be said that the legislature consciously omitted the words “after following the procedure laid down in sub-section(1)” in section 76B of the Act. Therefore, it would necessarily mean that as per the language of section 57(1) and (2) of the Gujarat Panchayat Act, two separate proceedings are contemplated, and as there is omission of the aforesaid words “after following the procedure laid down under subsection(1)” in section 76B of the Act, only one proceeding, but the consequence would be two, one for removal and another for disqualification. 13. If the facts of the present case are further examined, the first show cause notice did provided for removal under section 76B(1) and (2) of the Act, but there was not a whisper about the disqualification for holding the post or to contest the election in any other society nor there was any incorporation for calling upon the appellant show cause in the said regard. Whereas, in the final order dated 10.03.2015, there was conjoint order under section 76B(1)(2) of the Act for removal as Chairman and further for further disqualification for a period of three years in any other society to hold office or to contest the election. Whereas, in the final order dated 10.03.2015, there was conjoint order under section 76B(1)(2) of the Act for removal as Chairman and further for further disqualification for a period of three years in any other society to hold office or to contest the election. As recored by us herein above, when the final order came to be challenged in SCA No. 9618 of 2015 before the learned single Judge, the order passed under section 76B(2) of the Act was quashed for disqualification, but the order under section 76B(1) of the Act was not interfered with. There was no express liberty observed by the learned single Judge to initiate separate proceedings by a separate show cause notice under section 76B(2) of the Act. It may also be recorded that pending the proceedings of present LPA, Misc. Civil Application No. 3114 of 2015 was preferred before the learned single Judge for clarifying the earlier order passed by the learned single Judge in SCA No. 9618 of 2015 allowing initiation of separate proceedings under section 76B(2) of the Act, but the learned single Judge for the reasons recorded in the order has rejected the application. 14. It is true that the learned single Judge rejected the application in view of two circumstances. One was that after the second show cause notice under section 76B(2) of the Act, SCA No. 17826 of 2015 was preferred and dealt with by the learned single Judge which came to be decided vide order dated 27.10.2015 and the another was that against the said judgment order of the learned single Judge in SCA No. 17826 of 2015, the present appeal was pending before the Division Bench of this court. Mr. Jani, learned Additional Advocate General attempted to contend that the observations made in the order dated 30th October, 2015 passed in MCA No. 3114 of 2015 goes to show that the learned single Judge impliedly accepted the position of second show cause notice under section 76B(2) of the Act after the order passed under section 76B (1) of the Act and therefore, he submitted that the said aspect of rejection of the application may not operate against the State. 15. 15. As such, even if the contention is considered for the sake of examination, in view of the aforesaid observations and discussions made by us herein above, when only one proceeding is contemplated for two consequences, one for removal and another for disqualification, the said aspect would be in consequential. 16. If the impugned order of the learned single Judge is examined in light of the observations made by us herein above, it can be said that the learned single Judge has committed error in interpreting the provisions of section 76B(1) and 76B(2) of the Act and the consequential order for dismissal of the petitioner calls for interference. 17. As observed by us, if the second separate show cause notice is not contemplated as per section 76B(2) of the Act, and both the consequences should arise in only one proceeding under proceedings of 76B of the Act, then the fact remains that the order for disqualification was quashed by this court without there being any express liberty reserved for continuation with the proceedings for disqualification under section 76B(2) of the Act. Therefore, in light of the aforesaid observations and discussions, it can be said that the impugned action of issuance of separate show cause notice for disqualification under section 76B(2) of the Act is without jurisdiction and beyond the scope of section 76B of the Act. 18. Mr. Jani, relied upon the decisions of the Apex Court in M/s. Guduthur Bros. v. The Income-tax Officer, Special Circle, Bangalore, reported at AIR 1960 SC 1326 , in Superintendent (Tech. I) Central Excise, I.D.D. Jabalpur and Others v. Pratap Rai. 18. Mr. Jani, relied upon the decisions of the Apex Court in M/s. Guduthur Bros. v. The Income-tax Officer, Special Circle, Bangalore, reported at AIR 1960 SC 1326 , in Superintendent (Tech. I) Central Excise, I.D.D. Jabalpur and Others v. Pratap Rai. reported at [ (1978) 3 SCC 113 ], in Anand Narain Shukla v. State of Madhya Pradesh reported at (1980) 1 SCC 252 , in M.V. Janardhan Reddy v. Vijaya Bank and Others reported at [ (2008) 7 SCC 738 ] and in Commissioner of Sales Tax and others v. M/s. Subhash and Company reported at AIR 2003 SC 1628 , for contending that even if there is no express liberty reserved for exercise of the power by separate show cause notice, once the earlier order for disqualification was quashed on the ground of breach of principles of natural justice, it was open to the authority to issue a fresh show cause notice under section 76B(2) of the Act, which has been done in the present case and therefore, he submitted that the notice issued cannot be said to be without jurisdiction. 18.1 As such, the facts of all the aforesaid cases cannot be equated with the facts and circumstances of the present case as narrated herein above. Further, in view of the interpretation as made by us herein above, if only one proceeding is contemplated under section 76B of the Act for two consequences of removal and disqualification, and those proceedings have ended in SCA No. 9618 of 2015 and LPA No. 1302 of 2015, it would not be open to the authority to initiate second proceedings on the same facts, more particularly when no express liberty was so reserved and even otherwise also it could not be reserved in view of the interpretation made by us herein above. Hence, when initiation of the second proceedings by issuance of the show cause notice is beyond the scope of section 76B of the Act, the said decisions would be of no help to Mr. Jani, learned AAG. 19. Mr. Hence, when initiation of the second proceedings by issuance of the show cause notice is beyond the scope of section 76B of the Act, the said decisions would be of no help to Mr. Jani, learned AAG. 19. Mr. Jani, learned AAG did attempted to contend that the appellant in the earlier round of litigation of SCA 9618 of 2015 had contended that separate show cause notice under section 76B(2) of the Act was required to be issued and not the composite notice under section 76B(1) & (2) and he further contended that learned single judge having accepted the said aspect, it would not be open to the petitioner to play hot and cold at the same time, and now to contend that a composite notice was required, more particularly when the learned single Judge has accepted the said contention and the said order has been not interfered with in the LPA. 19.1 If the contention is considered with the close scrutiny, it does appear that at the relevant point of time, the contention of the State was that a composite notice could be issued, but it is also true that learned single Judge examined the order from both the angles and observed that the notice under section 76B(2) of the Act was not issued. In our view, even if the said aspect remains, in view of the facts and circumstances and the observations made and the interpretation made by us when we have found that the second show cause notice is not contemplated as per the scheme of the Act, the contention of estoppel or playing hot and cold would be inconsequential. Hence, the said contention can not be accepted. 20. In view of the above, the impugned notice dated 3.10.2015 (Annexure-F) is quashed being beyond the scope and ambit of section 76B of the Act. The order of the learned single Judge is set aside. The appeal is allowed accordingly. Considering the facts and circumstances, no order as to costs. Order in Civil Application No. 11956 of 2015 In view of the order passed in the main LPA, no orders are required to be passed in this Civil Application. Hence, the Civil Application is disposed of accordingly. Appeals Allowed.