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2020 DIGILAW 333 (GUJ)

Dhanjibhai Hirjibhai Nasit v. State of Gujarat

2020-02-20

ASHUTOSH J.SHASTRI, VIKRAM NATH, VIPUL M.PANCHOLI

body2020
ORDER : 1. This Special Civil Application has been referred to the Larger Bench vide order dated 8.5.2007 passed by the learned Single Judge (Coram: D.A. Mehta, J.) as the learned Single Judge was of the opinion that there is an apparent conflict between the decision rendered by the Division Bench of this Court in the case of Amreli District Cooperative Sale and Purchase Union Ltd. and Others vs. State of Gujarat, 1984 (2) GLR 1244 and the decision rendered by another Division Bench of this Court in the case of Gujarat State Marketing Cooperative Federation Ltd. and Another vs. State of Gujarat and Others, 2005 (1) GLH 144 . 2. The factual matrix of the present case is as under: 2.1 The petitioner is a member of Una Taluka Khand Vechan Sangh Ltd. (hereinafter referred to as ‘the Union’ for short). The Union is a specified cooperative society as defined under Section 74C of the Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as ‘the Act’ for the sake of convenience). The elections of specified cooperative societies are required to be held and conducted as provided under Section 74C read with Chapter XI-A of the Act as well as the Rules framed thereunder. It is submitted that the authorized officer declared the election of the committee of the society on 31.1.2007 fixing the various stages of the election and in the said election, ten directors have been elected. It is further stated that the Union is a specified cooperative society and the sanctioned bye-laws of the Union provide for constitution of Board of Directors. Certain further details are narrated in the petition, however, for deciding the issue involved in the present petition, the said facts are not relevant at this stage. 2.2 It is further stated that the respondent-State Government in purported exercise of the powers conferred upon it under Section 80(2) of the Act appointed respondent nos. 7, 8 and 9 on 4.1.1999 as the government nominees on the Board of Directors of the Union. It is stated in the petition that the government nominee appointed under Section 80(2) of the Act is governed under the pleasure of the government, meaning thereby, the Committee can be removed at any point of time. 7, 8 and 9 on 4.1.1999 as the government nominees on the Board of Directors of the Union. It is stated in the petition that the government nominee appointed under Section 80(2) of the Act is governed under the pleasure of the government, meaning thereby, the Committee can be removed at any point of time. Their continuation on the Board of Directors of the specified cooperative societies depends upon the pleasure of the government, however, the said appointment is coextensive with the term of the Committee. Therefore, the appointment made by the government in the year 1999 would have continued till the term of the said Committee and/or till the term of the Board of Directors expired. The grievance of the petitioner in the petition is that inspite of the aforesaid position of law, the respondents for the reasons best known to them, insisted on continuing on the Board of Directors of the Union. The petitioner has, therefore, prayed that the respondents be restrained from permitting the respondent nos. 7, 8 and 9 to take part in the meeting of the Board of Directors which is scheduled to be held on May 10, 2007. It is further prayed that this Court may hold and declare that the respondent nos. 7, 8 and 9 are no longer members of the Board of Directors of the Union in view of the fact that their term has expired long back. 2.3 When this petition was listed before the learned Single Judge, learned Single Judge passed an order on 8.5.2007 by observing that there is a conflict between the two decisions rendered by the Division Bench of this Court in the case of Amreli District Cooperative Sale and Purchase Union Ltd. (supra) and Gujarat State Marketing Cooperative Federation Ltd. and Another (supra) and, therefore, the matter be referred to the Larger Bench for deciding the said issue. 3. Heard learned advocate Mr. B.M. Mangukiya for the petitioner and learned Government Pleader Ms. Manisha Lavkumar Shah for the respondent nos. 1 to 5. 3.1 Learned advocate Mr. Mangukiya appearing for the petitioner at the outset, submitted that looking to the reliefs prayed for in the petition, this petition has become infructuous. It is further submitted that the order dated 8.5.2007 passed by the learned Single Judge was challenged by the petitioner by filing Letters Patent Appeal No. 1106 of 2007. 1 to 5. 3.1 Learned advocate Mr. Mangukiya appearing for the petitioner at the outset, submitted that looking to the reliefs prayed for in the petition, this petition has become infructuous. It is further submitted that the order dated 8.5.2007 passed by the learned Single Judge was challenged by the petitioner by filing Letters Patent Appeal No. 1106 of 2007. However, the said appeal came to be disposed off vide order dated 20.8.2008 by observing that the appeal has become infructuous. However, as the learned Single Judge has referred the issue to the larger Bench, this Court may consider the relevant provisions of the Act. It is further submitted that in fact, there is no conflict between two decisions rendered by the Division Bench of this Court. It is also submitted that while deciding the issue by the Division Bench in the case of Gujarat State Marketing Cooperative Federation Ltd. (supra), the Division Bench has considered the decision rendered in the case of Amreli District Cooperative Sale and Purchase Union Ltd. (supra) and thereafter specifically observed that the nomination of the representatives on the Committee of a society in exercise of the powers under Section 80(2) of the Act is co-extensive with and operates only during the term of the Committee on which such nominees are appointed. It is further held that the term of the office of the representatives nominated under Section 80(2) of the Act shall depend upon, besides the pleasure of the state government or the term specified in their appointment orders, the Rules and bye-laws of the society regarding constitution and term of the Committee. 3.2 Learned advocate Mr. Mangukiya would contend that there is in fact, no conflict between the two decisions, inspite of that, the learned Single Judge has referred the issue to the larger Bench. 4. On the other hand, Ms. Manisha Lavkumar Shah, learned Government Pleader, has fairly stated before us that in fact, there is no conflict between the two decisions rendered by respective Division Benches and on the contrary, the State Authority has accepted the proposition laid down by the Division Bench which has decided the case of Gujarat State Marketing Cooperative Federation Ltd. (Supra). Manisha Lavkumar Shah, learned Government Pleader, has fairly stated before us that in fact, there is no conflict between the two decisions rendered by respective Division Benches and on the contrary, the State Authority has accepted the proposition laid down by the Division Bench which has decided the case of Gujarat State Marketing Cooperative Federation Ltd. (Supra). As a result of this, with broad submissions made by both the learned counsels, to indicate that in fact, there is no conflict between two propositions of law, we deem it proper to deal with the reference in the aforesaid context. 5. We have considered the submissions canvassed by learned advocates appearing for the parties. We have gone through the relevant provisions of law and the two decisions rendered by the Division Bench of this Court. 6. At this stage, the relevant provisions contained in the Act are required to be referred to: “Section 2(5) of the Act defines the term ‘Committee’ which provides as under: “Committee” means the Managing Committee or other governing body of a society to which the direction and control of the management of the affairs of a society is entrusted to.” Section 74C (2) of the Act provides as under: “(2)(i) The term of the elected members of the managing committee shall be five years from the date of election. (ii) The term of office bearers of the managing committee shall be two and a half years from the date of election. (iii) The managing committee shall fill up a casual vacancy within a period of sixty days from the date of such vacancy, failing which the State Government shall have the power to fill up such casual vacancy out of the same, class of categories of members in respect of which the casual vacancy has arisen if the remaining term of office of the managing committee is less than half of its original term. (iv) The elected members of the managing committee and its office bearers shall cease to hold the office on the date of expiry of their term. (v) Notwithstanding anything contained in clause (ii) the office bearers of managing committee who have completed two and a half years on the date of the commencement of the Gujarat Co-operative Societies (Amendment) Act, 2015, shall continue to be such office-bearer for the remainder term. (v) Notwithstanding anything contained in clause (ii) the office bearers of managing committee who have completed two and a half years on the date of the commencement of the Gujarat Co-operative Societies (Amendment) Act, 2015, shall continue to be such office-bearer for the remainder term. (vi) Nothing in clause (i) shall be applicable to the managing committee existing on the date of coming into force of the Gujarat Co-operative Societies (Amendment) Act, 2015. (vii) The office bearers of the managing committee shall be eligible for re-election.” Section 80(1) provides as under: “80. Power to appoint Government nominee: (1) Where the State Government has subscribed to the share capital of a society, directly or through another society, or has guaranteed the repayment of the principal of and payment of interest on, debentures issued or loans raised by a society [the State Government shall, notwithstanding anything contained in the bye-laws of such society, have the right to nominate three representative on the Committee of such society] in such manner as may be determined by the State Government from time to time. The members so nominated shall hold office during the pleasure of the State Government, or for such period as may be specified in the order by which they are appointed and any such member on assuming office shall have all rights, duties, responsibilities and liabilities as if he were a member of the committee duly elected.” Section 80(2) provides as under: “(2) Where the State Government is of the opinion that having regard to the public interest involved in the operation as a society it is necessary or expedient so to do, it may nominate its representative on the committee of such society as if the State Government had subscribed to the share capital of the society and the provisions of sub-section (1) shall, so far as may be, apply to such nomination.” 7. From the aforesaid provisions, it is revealed that the Committee means ‘Managing Committee’ or the other governing body of a society to which a direction and control of the management of the affairs of a society is entrusted to. The term of the elected members of the Managing Committee shall be five years from the date of election as provided in Section 74C(2) of the Act. The term of the elected members of the Managing Committee shall be five years from the date of election as provided in Section 74C(2) of the Act. It is further clear that where the state government has subscribed to the share capital of the society directly or through another society, or as per the circumstances enumerated in Section 80(1) of the Act, the state government is empowered to nominate the three prescribed representatives on the Committee of said society and such members so nominated shall hold office during the pleasure of the state government or for such period as may be specified in the order by which they are appointed. Similarly, Section 80(2) of the Act empowers the state government to appoint the representatives having regard to the public interest involved in the operation of a society as if the state government had subscribed to the share capital of the society and the provisions contained in Section 80(1) of the Act will be applicable to such nomination. 8. The Division Bench of this Court in the case of Amreli District Cooperative Sale and Purchase Union Ltd. (supra) has held in paragraph 78 as under: “78. Section 80, as it originally stood in the principal Act, empowered the Government to nominate its representatives not exceeding three on the Committee of a society to the share capital of which the State Government has directly or indirectly subscribed or has guaranteed the repayment of the principal and interest on debentures issued or loans raised by such society. Two fold amendment has been made in sec. 80; firstly by empowering the State Government to nominate its representatives notwithstanding anything contained in the Bye-laws of such societies and, secondly, by inserting new sub-section (2) empowering the State Government to nominate the representatives on the committee of a society having regard to the public interest involved in the operation of such society it has been found necessary or expedient to do so as if the State Government had subscribed to the share capital of the society. We must reject the challenge to this new provision inserted by sub-section (2). The power is an enabling power which can be exercised only if the Government is satisfied that it is necessary or expedient to do so in the public interest. We must reject the challenge to this new provision inserted by sub-section (2). The power is an enabling power which can be exercised only if the Government is satisfied that it is necessary or expedient to do so in the public interest. The number of nominees cannot exceed three since it has been specifically provided that the provision of sub-section (1) shall, so far as may be, apply to such nomination. The tenure of such nominated persons shall be as may be specified in the order by which they are appointed and, therefore, if this power is sought to be abused by the State Government, it can be always subject to challenge in the Court of Law. It does not curtail the right of association nor the right to carry on business or trade guaranteed under Article 19 (1) (c) and (g) respectively. This provision therefore must be sustained.” 9. Another Division Bench of this Court in the case of Gujarat State Marketing Cooperative Federation Ltd. (supra) has held in paragraph 9.4 as under and thereafter held in paragraphs 10(d) and (e) as under: “9.4 the nominations made under Section 80 of the Act are on the “Committee” which is defined in Section 2 (5) as the committee of management or other directing body, to which the management of the affairs of the society is entrusted. Under the provisions of Section 74 of the Act, the management of every society is vested in a committee constituted in accordance with the provisions of the Act and the Rules and bye-laws made there under. Since nomination of members is contemplated to be made on such committee, the duration of such nomination or the term of such representatives on the committee, unless expiring or determined earlier, will be coextensive with the life of the committee itself. Such nomination on the committee cannot last beyond the life of the committee. Since the managing committee is required to be constituted in accordance with the provisions of the Act and the Rules and byelaws, the provisions thereof would be determinative of the life of the committee.” 10(d) the nomination of representatives on the committee of a society in exercise of the powers under Section 80(2) is coextensive with and operates only during the term of the committee on which such nominees are appointed. 10(e) the term of office of the representatives nominated under Section 80(2) shall depend upon, besides the pleasure of the State Government or the terms specified in their appointment orders, the Rules and bye-laws of the society regarding constitution and term of the committee. 10. The Division Bench of this Court in the case of Amreli District Cooperative Sale and Purchase Union Ltd. (supra) considered the provisions contained in Section 80 of the Act and thereafter observed that by way of an amendment in Section 80, the state government is empowered to nominate its representatives notwithstanding anything contained in bye-laws of the society and by inserting sub-section (2), empowering the state government to nominate the representatives on the committee of society having regard to the public interest involved in the operation of such society, it has been found necessary or expedient to do so as if the state government had subscribed to the share capital of the society. It is observed that the power is an enabling power which can be exercised only if the government is satisfied that it is necessary or expedient to do so in the public interest. It is further held that the number of nominees cannot exceed three. Further, it has been held that the tenure of such nominated persons shall be as may be specified in the order by which they are appointed and therefore if this power is sought to be abused by the state government, it can always be subject to challenge in the court of law. 11. Another Division Bench of this Court in the case of Gujarat State Marketing Cooperative Federation Limited (supra), has held that the nomination of representatives on the Committee of a society in exercise of the powers under Section 80(2) of the Act is co-extensive with and operates only during the term of the committee on which such nominees are appointed. 12. From the aforesaid provisions of law and from the aforesaid decision rendered by the Division Bench of this Court, we are of the view that in fact the decision rendered by the Division Bench of this Court in the case of Gujarat State Marketing Federation Limited (supra) is not in conflict with the earlier decision rendered by the Division Bench in the case of Amreli District Cooperative Sale and Purchase Union Ltd. (supra). Learned Government Pleader has, candidly, conceded to the fact that the respondent-State has accepted the decision rendered by the Division Bench in the case of Gujarat State Marketing Cooperative Federation Limited (supra). Resultantly, the nomination of representatives on the committee of society in exercise of power under Section 80(2) of the Act is co-extensive with and operates only during the term of the committee, on which such nominees are appointed. 13. In view of the aforesaid discussion and observation, we are of the considered opinion that in fact, there is no conflict between the two propositions laid down by respective decisions of the Division Benches i.e. in case of Amreli District Cooperative Sale and Purchase Union Ltd. (supra) and Gujarat State Marketing Cooperative Federation Ltd. (supra). Resultantly, we answer this Reference accordingly. 14. In view of the reliefs prayed for in this petition, the same has become infructuous. Hence, by answering the reference in the above terms, the petition is disposed off.