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2020 DIGILAW 411 (GUJ)

Visnagar Taluka Co-Operative Purchase And Sales Union Ltd. v. State of Gujarat

2020-03-05

BIREN VAISHNAV

body2020
JUDGMENT : 1. Draft amendment is granted. To be carried out forthwith. 2. In this petition under Article 226 of the Constitution of India, the petitioner-the Visnagar Taluka Co-operative Purchase and Sales Union Ltd. has challenged the order dated 02.03.2020 passed by the respondent, by which, the authorities have granted the application of respondent nos.6 to 13 herein, to be joined as parties in the revision proceedings initiated at the hands of the petitioners. 3. The facts in brief are as under: 3.1 It appears that on 23.01.2020, respondent no.13 in this petition made an application to the Joint Registrar, Cooperative Societies, Ahmedabad, suggesting that re-audit needs to be done of the petitioner society for the period from 01.04.2015 to 31.03.2019. In the application, instances have been narrated by virtue of which, in the perception of the applicant, re-audit was necessary. Based on this application, an order dated 29.01.2020 was passed by the Joint Registrar ordering re-audit of the petitioner society in accordance with the provisions of Section 84(5) of the Gujarat Cooperative Societies Act. The order of re-audit so made was a subject matter of challenge by the petitioner in a Revision Application filed before the State. Since there was no interim relief granted by the authority before whom the revision was filed, the petitioner was constrained to move Special Civil Application No.4764 of 2020 before this Court. Keeping in mind the pendency of Revision Application No.20 of 2020 filed under Section 155, the Court directed that the pending Revision Application be heard and disposed of. 3.2 The respondent nos.6 to 13 on 27.02.2020, made an application for being joined as parties in the Revision Application No.20 of 2020 filed by the petitioner. By the impugned order dated 02.03.2020 the application has been allowed. 4. The challenge to the order of the respondent nos.6 to 13 be joined as parties, is assailed by Shri Prakash Jani, learned Senior Counsel appearing with Shri Shivang Jani learned advocate for the petitioner. He made following submissions. I. Mr.P.K.Jani learned Senior Counsel submitted that the respondent nos.6 to 13 are not members of the petitioner cooperative society and therefore they did not have any locus-standi to move an application for being impleaded as parties in the revision filed by the petitioner. II. He made following submissions. I. Mr.P.K.Jani learned Senior Counsel submitted that the respondent nos.6 to 13 are not members of the petitioner cooperative society and therefore they did not have any locus-standi to move an application for being impleaded as parties in the revision filed by the petitioner. II. Shri Jani submitted that the petitioner is a cooperative society and is not a State within the meaning of Article 12 of the Constitution of India. The rigors that applied to the authority under the concept of “State” and not be applicable to the cooperative society. III. He further submitted that the cooperative society is not a public authority under the Right to Information Act and therefore is not answerable to give details to a stranger. Respondent nos.6 to 13 are the rank outsiders and therefore, cannot be joined as parties. IV. Mr.Jani would further submit that there are provisions under the Gujarat Cooperative Societies Act, especially one under Chapter-III which makes out the rights of the members together with the Rules regarding the members and their liabilities and therefore the respondent no.6 to 13 not being such members defined under Section 2(13) of the Cooperative Societies Act, the order granting the application for respondent nos.6 to 13 being joined as parties is misconceived. V. Mr.Jani would invite the attention of this Court to Section 155 of the Act and submit that both the authorities while taking a decision under Section 155 in revisional proceedings is to take into consideration the orders that are passed by the authorities which are under challenge. Parameters of Section 155 would indicate that they being in the nature of quasi-judicial proceedings, the proprietary of the decision has to be examined on the basis of the submissions and arguments raised by the parties in such decision making process and the respondent nos.6 to 13 would have no say. VI. He would also submit that on reading of the impugned order, it is evident that though an extensive reply was filed which is annexed to the petition categorically pointing out that the private respondents had no role to play in the revision proceedings, the order has been passed without assigning any reasons. Once on an application being made by the respondents, the machinery has been set into motion, the official respondents will take a decision in which the private respondents have no occasion to intervene. VII. Once on an application being made by the respondents, the machinery has been set into motion, the official respondents will take a decision in which the private respondents have no occasion to intervene. VII. Mr.Jani would further submit by drawing my attention to the relevant details with regard to the society and submit that right from the year 2015 on the basis of the audit being taken by the very officers who now are exercising powers under Section 84(5) of the Act, have been awarding Class-'A' to the society and also by giving an award for being a best performing society, the society has an impeccable record. VIII. Mr.Jani, on the basis of the amendment made in the petition, would point out that the authority has proceeded with mala-fide intentions. An application was made on 23.01.2020 and the order was passed on 29.01.2020. From the parawise remarks of the officer which are annexed, he would draw the attention of the Court to submit that though the hearing of the application was kept on 11.02.2020, the same was preponed to 28.02.2020 on the application of the respondents on the ground that since they were in Ahmedabad on 28.01.2020, they be granted such indulgence. IX. Inviting my attention to the provisions of the Act, he would submit that even the members would not have an outright discretion to seek an audit. X. Reliance was placed on the following decisions with a view to contend that unlike an instrumentality of a State and/or of public authority, such rigors did not apply to the public authority. XI. Decisions relied in support of these submissions are as under: (a) In case of S.S. Rana v. Registrar, Coop. Societies & Anr. reported in (2006) 11 SCC 634 . Para 9 thereof was relied upon to submit that a society is not constituted and functions like any other cooperative society are regulated in terms of the provisions of the Act. (b) The second decision relied upon by Shri Jani is in the case of Thalappalam Ser. Co-op. Bank Ltd. and Others v. State of Kerala and Others reported in 2013 (3) G.L.H. 591 . Paragraphs 18 and 54 were relied upon in context of the society not being a public authority under the RTI Act. (c) The judgment in case of Zoroastrian Cooperative Housing Society Ltd. and Anr v. District Registrar, Co-operative Societies (Urban) and Ors. Co-op. Bank Ltd. and Others v. State of Kerala and Others reported in 2013 (3) G.L.H. 591 . Paragraphs 18 and 54 were relied upon in context of the society not being a public authority under the RTI Act. (c) The judgment in case of Zoroastrian Cooperative Housing Society Ltd. and Anr v. District Registrar, Co-operative Societies (Urban) and Ors. reported in 2005 (3) G.L.H. 571 was relied upon in context of the submission that the very nature of the cooperative society has voluntary movement. (d) On the question of the action being taken in hot haste and the officers of the State acting at the behest of its' political masters, reliance was placed on the judgment in case of Trilochan Dev Sharma v. State of Punjab and others reported in (2001) 6 SCC 260 . Paragraphs 15 and 16 were pressed into service. (e) The decision in case of Ravi Yashwant Bhoir v. District Collector, Raigad reported in 2012 (4) SCC 407 was pressed into service in the context of the submission that it is not open for the respondent nos.6 to 13 to press for being joined as a party to the proceedings once the machinery has been set into motion. Para 48 of the decision was relied upon. (f) The next decision relied upon by Mr.Jani learned Senior Counsel is in the case of N.C.Navin v. Bank of India reported in 2015 JX(Guj) 1685 in support of his submission that a decision taken in hot haste apparently suffers from the vice of non-application of mind. (g) Shri Jani also relied upon on the decision in case of Express Newspapers Pvt. Ltd. and others v. Union of India and others reported in AIR 1986 SC 872 in support of his submission that the State Government had a determined approach to take a particular decision. The interpretation of rank outsiders in the decision making process was with a view to prejudice the stand of the petitioner. 5. Mr.Dipen Desai learned advocate appeared for respondent nos.6 to 13. He invited my attention to the application made on 23.01.2020. Drawing my attention to the contents of the application, he submitted that the respondents were members of Shri Rangpur Seva Sahakari Mandli Limited. Shri Rangpur Seva Sahakari Mandli Limited was a primary member of the petitioner-Union. 5. Mr.Dipen Desai learned advocate appeared for respondent nos.6 to 13. He invited my attention to the application made on 23.01.2020. Drawing my attention to the contents of the application, he submitted that the respondents were members of Shri Rangpur Seva Sahakari Mandli Limited. Shri Rangpur Seva Sahakari Mandli Limited was a primary member of the petitioner-Union. They were supplying agricultural produce to the petitioner-Union and indirectly was a primary member of the petitioner society, their interest was directly involved in seeing that the petitioner society functions in accordance with the principles and therefore an application was made for re-audit. 6. He then invited the attention of the Court to the memo of the application of the Revision filed by the petitioner against the order of the authorities of directing re-audit dated 29.01.2020. According to him, specific contentions have been raised in the memo of the revision assailing the locus of the applicants in filing an application and an order consequent to the application made by them. The petitioner's revision therefore can only be answered in context of the averments made by such respondents by filing an application for being joined as party. Application was accordingly made and has rightly been allowed. Admitting the fact that when the petition viz. Special Civil Application No.4764 of 2020 was heard by this Court on 20.02.2020, the applicants were not parties. Mr.Desai would submit that he was heard in the proceedings and it was in that context that the Court had observed that when the revision is heard, all the parties need to cooperate. Mr.Desai would submit that this petition is an instance at the hands of the petitioners for delaying hearing of the revision application as on the basis of the statement made by the Government Pleader, proceedings for re-audit are not being undertaken. Now that the application of the respondents has been allowed and they have been joined as parties, this is one more instance of bringing an issue to the Court and stalling the hearing of the revision. This according to Shri Desai is evident from the amended prayer made in the petition in para 9(D). Inviting my attention to the provisions of Section 84(5) of the Act, Mr.Desai would submit that reaudit can be sought on an application. It need not be only assurance of the members. 7. This according to Shri Desai is evident from the amended prayer made in the petition in para 9(D). Inviting my attention to the provisions of Section 84(5) of the Act, Mr.Desai would submit that reaudit can be sought on an application. It need not be only assurance of the members. 7. Ms.Manisha Luvkumar, learned Government Pleader appearing for the State has invited the attention of this Court to the provisions of the Constitution viz. provisions of Article 243ZH to 243ZT incorporated by the 97th Amendment on 15.02.2012. She would submit that the constitutional status has been given to the cooperative societies and in support thereof she placed reliance on the decision of the Supreme Court in case of Vipulbhai M. Chaudhary v. Gujarat Cooperative Milk Marketing Federation Limited and others reported in (2015) 8 SCC 1 . Stress was placed on the fact that the cooperative movement has been made more democratic and more autonomous and open. She also would then relied upon Section 84(5) to submit that the application need not be only at the behest of a member. 8. The decision cited by Mr.Jani in the context of the cooperative society not being a State under Article 12 and not being a public authority, she would submit that the judgments would not applicable. In support of her submission that the order of the authority, which is under challenge is just and proper, reliance was placed on the decision of the Division Bench of this Court rendered in Letters Patent Appeal No.644 of 2016 decided on 10.08.2016. She would submit that the judgment would pari-materia apply to the facts of this case. In rejoinder, learned Senior Counsel Mr.Jani would submit that the Division Bench judgment was in the context of the member who had sought permission to be impleaded as a party respondent and therefore when in the facts of the present case, the respondent nos.6 to 13 were rank outsiders, the judgment would not apply. He would further submit that no proof of the respondents being members of the primary society has been produced. The petitioner is a dominus-litis of the proceedings. The order under challenge of 29.01.2020 to re-audit is essentially between the petitioner and the revision authority being a quasi-judicial authority, cannot be prejudiced by the role of the applicants who are intermeddlers. 9. The petitioner is a dominus-litis of the proceedings. The order under challenge of 29.01.2020 to re-audit is essentially between the petitioner and the revision authority being a quasi-judicial authority, cannot be prejudiced by the role of the applicants who are intermeddlers. 9. Having considered the respective submissions made by the parties on hand, a brief reiteration of the facts may be necessary: 9.1 An application was made on 23.01.2020 by the respondent no.13 to the Joint Registrar. Reading of the application would indicate that the respondent no.13 was a member of Shri Rangpur Seva Sahakari Mandli Limited. Shri Rangpur Seva Sahakari Mandli Limited was the primary member of the petitioner society. The case of the applicants/respondents No.6 to 13 was that they were therefore indirectly involved in the interest in the better functioning of the petitioner society. It was in this background that they had made an application for re-audit. 9.2 On 29.01.2020, on the request made by the respondent no.13, an order of re-audit was passed. This Court for the present, will not enter into the validity and legality of the order dated 29.01.2020 passed by the competent authority in entertaining the application and ordering reaudit. The issue whether the order dated 29.01.2020 is just and proper is at large before the authority before whom the Revision Application is pending. 9.3 The limited issue before this Court today to decide is, whether the authority who has considered the respondent nos.6 to 13 as necessary and/or proper parties while adjudicating the issue on the legality of the order dated 29.01.2020. 10. At the first blush Mr.Jani's submission would be attractive to suggest that since respondent nos.6 to 13 are not members of the society, they have no locus to file an application for being impleaded as party respondents in Revision Application No.20 of 2020. That in view of the decision of the Supreme Court in case of S.S. Rana (supra) and Thalappalam Ser. Co-op. Bank Ltd. (supra), since the rigors of the State and public authority do not apply to a cooperative society, the applicants being outsiders have no role to play. That in view of the decision of the Supreme Court in case of S.S. Rana (supra) and Thalappalam Ser. Co-op. Bank Ltd. (supra), since the rigors of the State and public authority do not apply to a cooperative society, the applicants being outsiders have no role to play. With respect, I would disagree with the submissions of Mr.Jani on the ground that when the provisions of Section 84(5) of the Cooperative Societies Act are read, assuming for the sake of argument that the respondent nos.6 to 13 are not members of the society, reading of their application indicates that they are members of Shri Rangpur Seva Sahakari Mandli Limited-a cooperative society which is a primary member society of the petitioners and therefore they have an indirect but a substantial interest in the functioning of the petitioner society. Perusal of sub-section (5) of section 84 of the Act makes it clear that the registrar on an application or otherwise, get the account of the society reaudited, that is no qualification as to the eligibility of a person who can make an application for audit in the facts of the present case. Admittedly, it may not be said that respondent nos.6 to 13 who made an application can be said to be rank outsiders so as to not merit participation in the proceedings i.e. in the revision proceedings being Revision Application No.20 of 2020. 11. It is in this context, the decision rendered by the Division Bench of this Court in Letters Patent Appeal No.644 of 2016 needs to be considered. Though it was in the context of an application filed by a member in the facts of that case, while discussing the concept of what a necessary and a proper party is in the context of Section 84(5) of the Act, the Division Bench considered the decision of the Supreme Court in case of Mumbai International Airport Private Limited v. Regency Convention Center and Hotels Private Limited and others reported in (2010) 7 SCC 417 . It will be in the fitness of things to reproduce paragraphs 9 to 11 of the decision of the Division Bench. The pragraphs 9 to 11 read as under: “[9] Powers under section 84(5) of the Act, 1961 can be exercised by the authorities suomoto or on an application submitted by the party. It will be in the fitness of things to reproduce paragraphs 9 to 11 of the decision of the Division Bench. The pragraphs 9 to 11 read as under: “[9] Powers under section 84(5) of the Act, 1961 can be exercised by the authorities suomoto or on an application submitted by the party. In the present case, respondent authority has not exercised said power on its own but same has been exercised at the instance of the appellant. The appellant has already paid audit fees of Rs.52,000/. Thus, the appellant being member of respondent no.4 – society and at whose instance powers are exercised by respondent authorities and when specific allegations are leveled against the appellant by name, we are of the view that the appellant can be said to be necessary and proper party to the proceedings. [10] In the case of Mumbai International Airport Private Limited v/s. Regency Convention Centre and Hotels Private Limited and Others reported in (2010) 7 SCC 417 , the Hon’ble Apex Court has held in paragraph nos.15 and 25 as under : “15. A ‘necessary party’ is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a ‘necessary party’ is not impleaded, the suit itself is liable to be dismissed. A ‘proper party’ is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.” “25. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.” “25. In other words, the court has the discretion either to allow or reject an application of a person claiming to be a proper party, depending upon the facts and circumstances and no person has a right to insist that he should be impleaded as a party, merely because he is a proper party.” [11] In the case of State of Asasm v/s. Union of India and Others reported in 2011 AIR SCW 3724, the Hon’ble Apex Court has observed in paragraph no.14 as under :” “14. We respectfully agree with the observations made by this Court in Udit Narain’s case (supra) and adopt the same. We may add that the law is now well settled that a necessary party is one without whom, no order can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision of the question involved in the proceeding.” 12. Discussing the concept of a 'necessary party' and a 'proper party', what is needed to be appreciated is that a proper party is a party though it may not be necessary party, but is one whose presence would enable the Court to completely, effectively and adequately adjudicate the dispute. This can be viewed in context of the averments made by the petitioner in the memo of the Revision Application. Though the order of re-audit dated 29.01.2020 is directly a subject matter of challenge in such revision, one of the root causes of such a challenge is the authority of the Registrar to pass such an order based on an application made by the respondent nos.6 to 13. It is a specific contention by the petitioner before the Revisional Authority about the locus of the applicants/respondent nos.6 to 14, I would agree with the submission of Shri Desai that this submission can best be answered by the applicants who have been joined as parties in the revision proceedings. 13. It is a specific contention by the petitioner before the Revisional Authority about the locus of the applicants/respondent nos.6 to 14, I would agree with the submission of Shri Desai that this submission can best be answered by the applicants who have been joined as parties in the revision proceedings. 13. There is one more reason why I am inclined to accept the order of the authority dated 02.03.2020 by which the respondent nos.6 to 13 have been impleaded as party respondents. The intention that the applicants/respondent nos.6 to 13 be heard is implicit in view of the order passed by this Court in Special Civil Application No.4764 of 2020 dated 20.02.2020. Para 2 of the said order reads as under: “2. On a broad consensus, it is agreed that the Revision Application which is now scheduled to be heard on 02.03.2020 will be preponed to be heard on 27.02.2020 and on that day, the revisional authority shall take into consideration all the contentions raised by parties concerned. All the parties concerned shall co-operate with the hearing before the revisional authority. In the meantime, statement is made on behalf of the learned Government Pleader that the auditor-respondent No.4 will not proceed ahead with the procedure of auditing of the petitioner union. The statement of the learned Government Pleader will continue to operate till the final decision of the Revision Application No.20 of 2020.” 14. Evidently though the respondent nos.6 to 13 may not be joined as parties, when the Court directed that the Revision Application be heard and disposed of by a particular date with the cooperation of all the parties, the Court was conscious of the fact that there was an application made by the respondent nos.6 to 13 for being impleaded as party respondents. That eventuality was taken care by this Court to see that all parties be heard and they cooperate in the hearing of the Revision Application. 15. It is true that the Revisional Authority which heard the matter on 02.03.2020, was seized with an application made by the petitioner of the pending petition i.e. the present one being Special Civil Application No.5786 of 2020. 15. It is true that the Revisional Authority which heard the matter on 02.03.2020, was seized with an application made by the petitioner of the pending petition i.e. the present one being Special Civil Application No.5786 of 2020. However, looking to the order that was passed by this Court on 20.02.2020 and when it was not very clear from the application made as to whether the petition that is being heard and decided today to be listed on very next date on which the Revision Application was heard and the arguments concluded, I would agree with Mr.Desai's submission that it was not a case where the authority acted in defiance of the pendency of the present petition before this Court. The authority was really not made aware of the fact that the petition was listed for hearing on that date. However, this will have no bearing on the decision I take. The order dated 02.03.2020 passed by the authority impleading the respondent nos.6 to 13 is just and proper. 16. On the aforesaid grounds, I find no merit in the petition. The petition is dismissed. 17. Pursuant to a request made by this Court during the course of hearing on 04.03.2020, the learned Government Pleader had assured this Court that though the proceedings before the Revisional Authority have concluded inasmuch as, the parties to the proceedings have been heard, no further orders will be made. 18. In view of the request made by the learned Senior Advocate Mr. P.K. Jani, the order passed today be stayed for a period of a week. The respondent Revisional Authority shall not pass final order till 13.03.2020.