Research › Search › Judgment

Gujarat High Court · body

2020 DIGILAW 199 (GUJ)

Sachin Udhyognagar Sahkari Mandli Ltd. v. State of Gujarat

2020-01-30

A.Y.KOGJE

body2020
JUDGMENT : 1. This petition under Article 226 of the Constitution of India is filed for quashing and setting aside the order dated 07.03.2017 passed by the Deputy Secretary (Appeal), Agriculture and Co-operation in Revision Application no.89 of 2016 filed by the petitioner. The aforesaid order had confirmed the order dated 14.09.2016 passed by the Registrar Cooperative Society (Industry) and Joint Director (Textile) Cottage and Village Industries. The subject matter of the petition is the industrial plot allocated within the petitioner Cooperative Society and the respondent no.5 being one of the allottee of the plot. The issue is of charging of penal development charges from the respondent no.5 before transfer of such plot to any other person. 2. Learned senior advocate for the petitioner submitted that the respondent no.5 was allotted a plot no. D-27/ 5 in the petitioner society and the respondent no.5 being member of the society is bound by the bye-laws as well as resolutions passed by the managing committee as well as general body of the society. 3. It is submitted that one Pradip Tamakuwala, who happens to be brother-in-law of the respondent no.5 was indulging in the profiteering activity by brokering sale and purchase of the plots located within the petitioner society leading to profiteering and thereby against the spirit of establishing the petitioner society itself. 4. It is submitted that to curb the activity of the said Pradip Tamakuwala, the society through its committee and body had passed several resolutions by which in the event of transfer of the plots which the said Pradip Tamakuwala had himself purchased or had purchased in the name of his relatives or friends, a higher charge was to be received by the society thereby discouraging the profiteering activity of the said Pradip Tamakuwala and his associates. 5. It is submitted that as per the provisions of the Cooperative Society Act, the management of the society would lie within the society and the powers to manage and administer the society will be absolute with the members of the society. The petitioner has passed such resolutions which are accepted by all the members of the society including said Pradip Tamakuwala who has after passing of the resolution to charge higher penal development charges has paid such charges before getting such plots transferred. The petitioner has passed such resolutions which are accepted by all the members of the society including said Pradip Tamakuwala who has after passing of the resolution to charge higher penal development charges has paid such charges before getting such plots transferred. There is no reason why respondent no.5 who is also a member of the society should not accept the resolution. It is submitted that, if any member especially respondent no.5 is aggrieved by the resolution the provisions of the Cooperative Society Act does provide for the remedy which the respondent no.5 ought to have challenged, if aggrieved. However, in the instant case an in-genuine method has been adopted by the respondent no.5 by approaching the authority which has no jurisdiction to control the management of the society and seeing to it that the impugned order is passed by which the petitioner is compelled to receive the transfer charges at the rate mentioned in the bye-laws. Learned advocate took this Court to such communication dated 14.09.2016 (page 92) issued by the Registrar, Cooperative Society (Industry) and Joint Director (Textile) Cottage and Village Industry, Gandhinagar. 6. Learned senior advocate for the petitioner relies upon the decisions of this Court in the case of Narendrabhai Maganbhai Patel And Ors. V. District Registrar, Co-op. Soceities, Vadodara and Ors., reported in 2010 (4) GLR 3092 and in the case of Gordhanbhai N. Vaghela Vs. Maruti Co-op. Housing Society and Ors., reported in 2003 (1) GLR 117 to contend that in case a member of the society is aggrieved by the resolution, then the remedy available is to challenge such resolution under the provisions of Cooperative Society Act. Learned senior advocate also relied upon the decision of this Court in the case of Harekrishna K. Vadhwani Vs. Vasupujya Smruti Coop. Housing Society Ltd., Vibhag-1 and Ors., reported in 2004 (1) GLR 221 to contend that the decision of the general body of the society is binding upon its members and in-fact the challenge to such a decision cannot be maintained on the ground that the resolution of the society accepted by the general body is in any manner prejudicial to the member. 7. 7. Learned senior advocate for the petitioner submits that considering the activity of the said Pradip Tamakuwala being against the spirit of the Cooperative Society, the petitioner society would have resorted to a strict action of removing said Pradip Tamakuwala and or his relatives, friends or dummy from the membership of the society but the society in the larger interest has passed a resolution to charge a different fees from such plots which are identified by the society to be the subject matter of transaction by said Pradip Tamakuwala for profiteering and against the spirit of Cooperative Society. 8. Learned advocate for the respondent no.5 vehemently opposes the petition submitting that there is nothing on record to indicate that the respondent no.5 is a dummy person of the said Pradip Tamakuwala. It is submitted that there is nothing on record to indicate that the respondent no.5 has resorted to profiteering from transaction by way of sale and purchase of industrial plots of the society and resorting to profiteering and therefore, the resolution of the petitioner against the said Pradip Tamakuwala cannot be directly made applicable to the respondent no.5. Respondent no.5 submitted before issuing communication dated 14.09.2016 the respondents were given sufficient opportunity to go before the respondent authority and to explain their stand however their high handed conduct prevented them even from objecting themselves from the scrutiny by the Registrar. 9. Learned advocate for the respondents submits that the petitioner are governed by the bye-laws, the bye-laws clearly provides for the transfer fees and such transfer fees is prescribed by the very bye-laws which are approved by the authorities. The society by the impugned action is going against its own bye-laws and is treating the respondent no.5 discriminately as against other members without there being any justification. 10. It is submitted that in the quarrel between the bye-laws and the resolution the bye-laws will get the precedence as the resolutions which the petitioners are invoking against the respondent no.5 are itself against the bye-laws and therefore, cannot be enforced against the respondent no.5, if the same are not enforced against all the other members of the society. 11. Learned advocate vehemently opposes the petition on the ground of suppression and misleading. 11. Learned advocate vehemently opposes the petition on the ground of suppression and misleading. It is submitted that the petitioner society itself is acting against the spirit of Cooperative Society by their high handed conduct which is evident from the fact that the respondent no.5 is made to run from pillar to post just to get the copy of the resolution which is being used against the respondent no.5. It is submitted that when the society came to be formed one Mr. Hasmkhbhai Hojiwala was the chairman of the society and he continued to be so till his death and after his death immediately his son took over as a chairman which itself is against the spirit of Democracy and Cooperative Society. 12. Learned advocate for the respondent no.5 states that the impugned communication cannot be interfered with simply on the ground that what is communicated under the impugned communication to the petitioner society is to comply with the very bye-laws framed by the society and made applicable even as on date. There cannot be issuance of any writ to set aside a directions issued to the society to act in-conformity with its own bye-laws. 13. Learned AGP also opposes the petition submitting that, no error can be found in the impugned communication dated 14.09.2016 or the order in revision. It is submitted that there is no question of jurisdiction as the impugned communication as only a reply to a complaint filed by the respondent no.5 under a Grievance Redressal Mechanism and therefore, such communication which asks society to comply with its own byelaws cannot be termed to be an order or decision which can be subjected to judicial scrutiny. Adopting the submission made on behalf of respondent no.5, it is stated that a resolution which is against the very bye-laws of the society are nullity and therefore there is no question of challenging the same under the provisions of Cooperative Society Act. 14. Having heard learned advocates for the respective parties and having perused the documents on record. The petitioner society is an industrial cooperative society established on 21.09.1979 under the provisions of the Cooperative Society Act with approximately 1600 members. Respondent no.5 is an allottee of a plot no.D-27/5 in the petitioner society. 14. Having heard learned advocates for the respective parties and having perused the documents on record. The petitioner society is an industrial cooperative society established on 21.09.1979 under the provisions of the Cooperative Society Act with approximately 1600 members. Respondent no.5 is an allottee of a plot no.D-27/5 in the petitioner society. The petitioner society is governed by its bye-laws which are placed in the petition from page no.53 onwards, the object of the society as reflected in the bye-laws is to function on the principles of the cooperation and for development and progress of Gruh Udhyog to develop shades and other relevant activities in the direction of betterment of its members. 15.1. It provides for any interested person to become the member of the society as per the conditions prescribed therein in-consonance with Section 22 and 36 of the Gujarat State Cooperatives Act. The bye-laws also provided for the power of the general body to remove a member who is acting against the interest and spirit of the society. The clauses of the bye-laws also provide for transfer of the plot and that too within the provisions of the Cooperative Society Act. For the purpose of transfer clause 19 of the bye-laws reads and under: “19. The managing committee can transfer any share or interest and rights after collecting the below mentioned fees. Plot transfer Share transfer (A) Rs. 100/- per sq.meter (B) New addition Rs. 5/- (five rupees) Transfer fees of Rs.101/- (One Hundred and One only) can be charged while transferring in blood relation i.e. mother-father, brother- sister, son-daughter, uncle-aunty, grand-son-grand-daughter.” 15.2. The bye-laws provided for the managing committee, its functions and duties one of which is authorizing the committee to undertake any exercise for the purpose of achieving the objectives of the society. Section 73 of the Cooperative Society Act which pertains to management which is under the chapter 4 meant for management of the society provides for final authority of the society which shall vest in the general body of the members. Section 73 of the Cooperative Society Act which pertains to management which is under the chapter 4 meant for management of the society provides for final authority of the society which shall vest in the general body of the members. The Court is of the view that undoubtedly the interest and the character and protection of the character of the society would therefore lie within the powers of the general body of the society and it is open for the general body of the society as well as the managing committee to pass a resolution which according to the majority would be in the interest of the objective of the society. The society in the year 2007 has passed various resolutions with regard to the activity of one Pradip Tamakuwala whose conduct was against the spirit of society and detrimental to its interest. Such resolution was accepted by the general body on 07.03.2010 vide resolution no.3(1) the copy of which is at page no.33 of the petition, the relevant portion which gives the gist of this petition is as under: “Resolution-3 The Chairman has declared before meeting to take action against the below mentioned members who are working against the interest of development of the Society. 1. Shri Pradipkumar Shashikant Tamakuwala 2. Shri Harshida Texturising Pvt. Ltd. 3. Members who have erected illegal construction and holding illegal shops in complex of the society in the space under ownership of the society / in space of C.O.P/ godown, in space of road margin. The chairman has stated elaborately against the aforesaid members that, (1) It has come to the notice of the society through written complaints/applications made that Pradip Shashikant Tamakuwala has committed gross irregularities in marketing procedure of the plots of the members. Such as one plot is sold to more than one members. Whole money is accepted and their files of transfer were not submitted to the society. Many such cases have come to knowledge of the society. In many cases wherein accepting whole money of the applicant, such plots were not submitted to the society for the procedure of transfer and plots have not been allotted. Whole money is accepted and their files of transfer were not submitted to the society. Many such cases have come to knowledge of the society. In many cases wherein accepting whole money of the applicant, such plots were not submitted to the society for the procedure of transfer and plots have not been allotted. Many members have submitted written complaints and notarized affidavits to the society in this regard.” “.............To stop such activities and to prevent such elements from causing harm to the society and its members, the society held meeting of administrative committee to put restriction on Pradip Tamakuwala on 13/01/2006 and decided, vide Resolution No. 6, to withhold transfer of all the plots purchased through him. All the members of the society were informed about it through Public Warning in daily newspaper "Gujarat Mitra" of 29/01/2006 and through written circular vide outward No.520 of the society on 01/02/2006. As all the above mentioned acts are against interest of the society, the society has prohibited transfer of the below mentioned plots, whose dealing were carried out by himself, by his relatives and through his accomplices. Plot No. B-1/2, B-2/11, B-14/11, C-1/9, C-1/16, C-1/18, C-20/4, C- 20/9, C-21/8, C-22/9, C-22/16, D-13/2, D-21/12, D-24/13, D- 27/2, D-27/3, D-27/4, D-27/5, D-27/6, D-27/8, D-29/18, D- 32/17, D-36/3, D-39/10, D-44/16, D-53/10, D-54/9, D-54/22, E-1/13. They are pressurizing the office-bearers of the society and executive committee frequently to transfer all these plots and also interrupting daily administration work of the committee. As they are trying to mislead the members against the society by making misleading statements, it was decided to transfer all the plots within three months after recovering development charge of Rs.950/- per Sq. Mts. at the end of detailed discussion in the meeting of the plot transfer sub-committee of the said society held on 09/04/2007 and meeting of executing committee held on 11/04/2007. Thereafter, Plot No.B-1/2, admeasuring 3400 Sq. Mts. and Plot No.B-2/11, admeasuring 3612 Sq. Mts. were transferred by paying Rs.950/- per Sq. Mts. towards development charge in the society and thus, the society has received Rs.66,61,400/- towards development charges. Thereafter, as they did not get remaining plots transferred, the society had decided to transfer the plots by recovering Rs.1250/- per Sq. Mts. granting the time limit of further three months in its executive committee's meeting held on 09/10/2007. Despite that, they did not get their plots transferred. Thereafter, as they did not get remaining plots transferred, the society had decided to transfer the plots by recovering Rs.1250/- per Sq. Mts. granting the time limit of further three months in its executive committee's meeting held on 09/10/2007. Despite that, they did not get their plots transferred. As stated above, present members were given detailed understanding and asked for their opinion on getting their plots to be transferred, all present members have unanimously confirmed the resolutions and proceedings of the society's executive committee regarding transfer of plots of Pradeep Shashikant Tamakuwala and as per the opinion of all members, as the act of Pradip Tamakuwala was against interest of the society, punitive action must be taken against such members acting against the interest of the society. Considering the facts, it has been resolved to recover Rs.1250/- per square meters towards development charges as punitive actions for transferring aforesaid plots to himself, his accomplices and his relatives. The decision of association vide this resolution be informed to Pradip Tamakuwala through a registered AD. It has been resolved unanimously to get all the plots transferred within 90 days on receipt of the letter. It has been resolved unanimously by all the members present that if the plots are not transferred within stipulated time, all remaining plots will be transferred after recovering Rs.2000/- per square meters and the authority to decide upon the term thereof rests with the Executive Committee of the association. It has been resolved unanimously that all the aforesaid plots of Shri Pardipkumar Shashikant Tamakuwala, who has been acting contrary to the interest of society, are to be transferred after recovering the development charges towards the penalty......” 15.3. From the aforesaid resolution it is clear that the plot allotted to the respondent no.5 is also falling under the resolution which is identified to be the plot belonging to the group of said Pradip Tamakuwala. At this stage it is pertinent to mention another resolution on 20.07.2014 being the resolution no.5 came to be passed by the Managing Committee referring to total 29 plots which included the plots allotted to the respondent no.5. At this stage it is pertinent to mention another resolution on 20.07.2014 being the resolution no.5 came to be passed by the Managing Committee referring to total 29 plots which included the plots allotted to the respondent no.5. The resolution also refers to six plots belonging to the group of said Pradip Tamakuwala where the transfer was permitted by receiving the penal development charge as per the resolution no.3 which indicates that the said Pradip Tamakuwala has accepted the resolution and has acted in accordance to such resolution. 16. The contentions raised by the respondent no.5 that the respondent no.5 has nothing to do with said Pradip Tamakuwala cannot be taken into consideration as the resolutions which were passed by the general body includes the plot number which is allotted to the respondent no.5 and therefore the resolution would apply full force to such plot. It is an admitted position that the said Pradip Tamakuwala is the brother-in-law of the respondent no.5, even upon the querry of this Court or from the record, nothing is submitted to substantiate the nature of industrial activity undertaken by the respondent no.5 even after the passage of long time on the allotted industrial plot. The Court therefore is satisfied that, respondent no.5 is merely representing interest of the said Pradip Tamakuwala. 17. This Court in the case of Narendrabhai Maganbhai Patel Supra in paragraph no.7 has held as under: “7. The examination of the said contention shows that it is not a case where there is no remedy. If any person is admitted as member by the Managing Committee of the Society, may be in contravention to the bye-laws or the rules, and any other members of the Society has any grievance, it will be for such aggrieved member to challenge the legality and validity of the resolution of the Society admitting the person concerned as member and it is only if such resolution is set aside, the legal consequences may follow. Such can be agitated by resorting to the remedy provided under Section 96 of the Act. At that stage, the appropriate forum may examine the legality and validity of the resolution and also the right, if any to be affected of the person concerned who is already admitted as the member and the creation of an irreversible situation, alteration of the position or otherwise. At that stage, the appropriate forum may examine the legality and validity of the resolution and also the right, if any to be affected of the person concerned who is already admitted as the member and the creation of an irreversible situation, alteration of the position or otherwise. Therefore, it is not that there is no remedy under the Act, but certainly the remedy under Section 23 of Act which is invoked in the present case, could not have been resorted to.” This Court in the case of Harekrishna K. Vadhwani Supra in paragraph 9 has held as under: “9. In any event, when the General Body of the society has taken the decision, I am of the view that even if the petitioner had any grievance against the decision of the General Body of the society, proper course for the petitioner was to challenge the said decision under Section 96 of the Act. It is an admitted position that the decision of the General Body of the society is not challenged by the petitioner under Section 96 of the Act and, therefore, if the decision of the General Body of the society is to operate, the will of the majority of the members itself is to prevail for the purpose of division of the society and if such is the situation, it cannot be said that the petitioner, in the capacity as a member of the society, would be justified in challenging the decision of division only on the ground that he is going to be prejudiced or affected. I am inclined to take such a view because the petitioner has not been able to produce any reliable material to show that any prejudice is caused to him. The question of division in case of direct and clear individual prejudice to the member is kept open.” 18. In the opinion of the Court therefore, if respondent no.5 was aggrieved by the application of resolution of the society to respondent no.5 the remedy available was for challenging the same under Section 96 of the Gujarat Cooperative Society Act, where the authority, the procedure and the requirement of such resolution by society could have been examined, however the impugned communication dated 14.09.2016 is clearly a method adopted to circumvent due procedure of challenge to the resolution and still rendered the resolution ineffective insofar as the Respondent no.5 is concerned. If the communication dated 14.09.2016 is to be perused it innocently directs the petitioner society to abide by what is provided under the bye-law-19 which is meant for transfer of the plot. However, such a communication was in response to the grievance made by respondent no.5 (page 91) through a Grievance Redressal Mechanism wherein the description of the grievance would read as under: “Grievance Description: Sir, I hold plot no. 027/5 in Sachin Udhyognagar Sahkari Madnli Ltd., situated in Surat City. The address of the Ind Co-op. Society is as follows: Vivekanand Chamber, Second Floor, Near Rajeshee Hall, Sagrampura, Surat. PIN 395002, and Phone No. 0261 2353418, my grievances (1) This co-op. Society works under “The Gujarat Co-operative Societies Act 1961 and Rules made under therein. The sub rule No. 19 made by the said Mandali clearly mention that the mandali will charge Rs.1- per. sq. Meter to transfer a plot if sold by the member of this Society. Though the rule made by the mandli specifically mention Rs.100 per sq.m. The Chairman of the said Mandali has passed a resolution to charge Rs.3000 per sq. meter to transfer a plot in the case of Tamakuwala family. It is against the spirit of the co-operative spirit. (2) I have complained regarding this To (1) Dy. Ind. Commissioner and General Manager, District Ind. Center, C-2, Multi Story Building Nanpura, Surat (Phone 02612465925 (2) Regisrar Co-op. Mandli, Industry and Joint Director Textile, Block – 7 Second floor, Udhyog Bhavan, Gandhinagar (Phone 07923259482) Dy. Secretary, appeal co-operation Dept. Block-7, sixth floor Sachivalaya, Gandhinagar (Phone 07923250862, 07923250859 (3) The co-op. Society cannot differentiate between the members of the society and it can not order or pass resolution to levy more money from one particular family, but the Chairman of the Society act against the spirit of cooperation and the above officers entertain him and do not take any action against the Chairman.” 19. The grievance itself indicates about a resolution of the society and therefore when the impugned communication was made by the respondent Registrar, he was mindful of the fact of some resolution which would be touching upon the bye-law no.19 exists and therefore it was for the respondent to also take into consideration such resolutions however, by the impugned communication the respondent has completely given a go bye to the resolution as if such resolution is non existent. This in the opinion of the Court is error on the part of the respondent and hence deserves interference. 20. With regard to the submission of opportunity being provided to the petitioner by the respondent Registrar before issuing the impugned communication, if the contention of learned AGP to the extent, that the impugned communication was only in response to a grievance raised under the grievance redressal mechanism and cannot be said to be a substitute for an adjudicatory process is to be accepted still effect of such impugned communication is that of an order upon adjudication but without adjudication. 21. With foregoing reasons, the impugned communication cannot be sustained and therefore deserves to be quashed and set aside. The communication dated 14.09.2016 by Registrar Co-operative Society (Industry) and Joint Director (Textile) Cottage and Village Industry is ordered to be quashed and set aside and as a necessary consequences the order dated 07.03.2017 in Revision Application No.89 of 2016 passed by the Deputy Secretary (Appeal), Agriculture and Cooperation is also quashed and set aside. 22. The petition is partly allowed. Rule is made absolute to the aforesaid extent. Direct service is permitted. 23. At this stage, learned advocate for the petitioner requests for stay of this order. Considering the lapse of period in between and the fact that the status has not changed, Therefore, request is accepted. The operation of this order is suspended for the period of four weeks.