MEHSANA DISTRICT COOPERATIVE MILK PRODUCERS UNION LIMITED v. REGISTRAR, COOPERATIVE SOCIETIES, GUJARAT STATE
2020-11-06
A.Y.KOGJE
body2020
DigiLaw.ai
JUDGMENT : 1. RULE. Learned Assistant Government Pleader, Mr. Vinay Vishen waives service of rule on behalf of the Respondent No.1 - State and learned Advocate, Mr. Shivang P. Jani waives service of rule on behalf of the Respondent Nos. 2, 3 and 4. 2. This petition was initially filed challenging the issuance of the Show Cause Notice dated 27-07-2020 under Section-81 of Gujarat Co-operative Societies Act, 1961, which raises 13 charges against the petitioner – Society and its Committee Members. Pending the petition, as the respondent No.1 proceeded to render the decision, that the Show Cause Notice and the amendment caused in the petition and the petitioner also seeks to challenge such decision of the respondent No.1 dated 05-09-2020. Submissions of the Learned Senior Advocate, Mr. Mihir Joshi, assisted by Mr. Dipen Desai for the Petitioners– Milk Union 3. Learned Senior Advocate for the petitioners – Milk Union submitted that as per Section-74(C)(2) the term of the Managing Committee is five years from the date of election and therefore the term is to expire en 27.11.2020. Therefore, since the election is due, the impugned action for appointment of administrator is taken so that the elections are held under the aegis and supervision of the State appointed administrator who can control the elections. It is submitted that as per the bye-laws, more particularly bye-law no.35(1)(c), one Director is a representative nominated by the Registrar in the managing committee. Therefore, one of the Board member is a nominee of the Registrar and hence, the Registrar cannot initiate proceedings against the Board of Directors of which his own nominee is a member. It is submitted that Section 81 of the Act which provides that where the Registrar is member of the Managing Committee of the Society, the State Government shall have power to invoke Section 81 of Gujarat Co-operative Societies Act, 1961 and in respect of other societies, the Registrar would have power to invoke Section- 81 of Gujarat Co-operative Societies Act, 1961. The Registrar being a member of the Committee of Management, the Registrar had no power to initiate the proceedings under Section-81 of Gujarat Co-operative Societies Act, 1961. 4. It is submitted that earlier also the Registrar had issued show cause notice under Section-81 to the petitioner Union on 27.10.2016. The said show cause notice was challenged before this Hon’ble Court by way of Special Civil Application No.18836 of 2016.
4. It is submitted that earlier also the Registrar had issued show cause notice under Section-81 to the petitioner Union on 27.10.2016. The said show cause notice was challenged before this Hon’ble Court by way of Special Civil Application No.18836 of 2016. The said petition came to be rejected by the learned Single Judge by the order dated 12.06.2017 against which, Letters Patent Appeal was preferred bearing Letters Patent Appeal No.887 of 2017 which came to be rejected by the Division Bench of this Hon'ble Court vide judgment and order dated 03.05.2018. Against the aforesaid order of the Division Bench in Letters Patent Appeal No.887 of 2017, the petitioner approached the Hon’ble Supreme Court by way of Special Leave Petition (Civil) No.13329 of 2018. It is submitted that in the said Special Leave Petition, the petitioner has raised all the contentions with regards to the jurisdiction of the Registrar to issue show cause notice which are raised here. 5. It is submitted that the Parliament amended the Constitution of India by bringing 97th Constitutional Amendment in the year 2011 whereby, the Chapter of Cooperative Societies was inserted. One of the provisions in the said Constitutional amendment Article 243ZL, provides that in case of the society which does not have any government shareholding or government funding or any government financial control by way of loans, the State Authorities will not have any rights to supersede the body of such society. 6. It is submitted that one of the ground raised by the petitioner union while challenging the earlier show cause notice before this Hon'ble Court so also before the Hon'ble Supreme Court is that since the judgment of Rajendra N. Shah v. Union of India is under challenge before the Hon'ble Supreme Court and if the appeal filed by the Union of India is allowed and the 97th Constitutional Amendment is restored or revived then in view of Article 243ZL, the State Authorities would not have any power to supersede the Board of the petitioner union since there is no Government share capital, no Government funding or no Government loans in the petitioner union. The said very issue is also raised before the Hon'ble Supreme Court by the petitioner No.1 Union in the Special Leave Petition preferred before the Hon'ble Supreme Court being Special Leave Petition (Civil) No.13329 of 2018.
The said very issue is also raised before the Hon'ble Supreme Court by the petitioner No.1 Union in the Special Leave Petition preferred before the Hon'ble Supreme Court being Special Leave Petition (Civil) No.13329 of 2018. The Hon'ble Supreme Court considering the issues raised, and vide order dated 30.07.2018, directed that the Special Leave Petition preferred by the petitioners be tagged with Civil Appeal No.9108 and 9109 of 2014 which is an appeal preferred by the Union of India against the judgment of Rajendra N. Shah v. Union of India. The said was done because the Hon'ble Supreme Court also found that the outcome of the said Civil Appeal preferred by the Union of India would have direct bearing on the outcome of the challenge to the show cause notice made by the petitioner Union in previous litigation pertaining to earlier Show Cause Notice. 7. It is submitted that when the very issue of the jurisdiction and authority of the Registrar are pending consideration before the Hon'ble Supreme Court and the Hon'ble Supreme Court is deciding the said issue, the Registrar could not have issued notice under Section 81. It is submitted that the petitioner no.1 union has also challenged the judgment rendered in the case of Rajendra N. Shah V. Union of India by seeking leave before the Hon'ble Supreme Court by way of Special Leave Petition Diary No.27747 of 2018 and in the said matter also the Hon’ble Supreme Court had directed to tag with Civil Appeal No.9108 of 2014. 8. It is submitted that the impugned show notice dated 27-07-2020 has been issued on 13 different grounds. The said show cause notice has been received by the petitioner union on 29-07-2020 and the petitioners are asked to reply to the show cause notice on 04-08-2020. 01-08-2020, 02-08-2020 and 03-08-2020 being holidays, the petitioners got only three daytime to reply to the show cause notice which shows the predetermined state of mind of the authorities. It is submitted that the show cause notice clearly reveal that the Registrar has already prejudged and pre-decided the issue and bare reading of the show cause notice clearly shows that clear findings are recorded holding Committee responsible. It is submitted that the impugned show cause notice is issued on 13 different grounds. None of the said grounds constitute any of the ingredients of Section-81.
It is submitted that the impugned show cause notice is issued on 13 different grounds. None of the said grounds constitute any of the ingredients of Section-81. It is submitted that Ground No.1 is with regards to alleged adulteration in Ghee. It is submitted that firstly no inquiry whatsoever has been made before arriving at such a conclusion that the petitioner Union or its’ Board of Directors are involved in such alleged adulteration. The issue is still a matter of investigation. It is submitted that for the very issue the Registrar has initiated action under Section-89 and the same is pending further inquiry, to include the same very ground for supersession of the Committee is clearly not permissible. 9. It is submitted that issue No.2, the same is with regards to grant of additional pay to the employees. It is submitted that for the very issue the District Registrar, Cooperative Society, Mehsana, vide order dated 26-12- 2019, directed investigation under Section-88 to inquire under the said issue and appointed an Investigating Officer. It is submitted that against the said order Revision Application No.9 of 2020 is preferred before the Joint Secretary (Appeals), Gandhinagar, being Revision Application No.9 of 2020, in which, notice has been issued by the Revisional Authority. 9.1 It is submitted that issue No.3, the same is with regards to alleged unauthorized appointment of staff. It is submitted that for the very issue, inquiry under Section 86 has been initiated by the Registrar, Cooperative Societies, Gujarat State, and notice under Section 86 has been issued to the Union by the Registrar on 20-05-2019. It is submitted that therefore, the very issue is subject matter of an inquiry under Section-86 and no final order of appointing inquiry officer has been passed till date and thereby, inquiry is not held under Section-86. 10. Learned Senior Advocate for the petitioners – Milk Union in the Draft amendment submitted that vide order dated 27.08.2020, this Hon’ble Court directed that the documents which were relied upon in the show-cause notice should be supplied to the petitioners on or before 31-08-2020 and reply if any, to be filed before the authority on 04.09.2020 and the matter to be listed on 07-09-2020 for further hearing. It is submitted that the petitioners being aggrieved of the sand order, preferred SLP before the Hon’ble Supreme Court being Special Leave Petition (C) No. 10351 of 2020.
It is submitted that the petitioners being aggrieved of the sand order, preferred SLP before the Hon’ble Supreme Court being Special Leave Petition (C) No. 10351 of 2020. The aforesaid SLP was to be listed before the Hon’ble Supreme Court on 07-09-2020. 11. It is submitted that the Registrar, Co-operative Societies pressurized for hearing of the show-cause notice on 04.09.2020. The petitioners through their advocates submitted an application on 04.09.2020 that SLP is listed for hearing before the Hon’ble Supreme Court against the order of the Hon’ble High Court and is to be listed on 7.09.2020 and therefore, hearing should be postponed. It was also pointed out that the show cause notice is subject matter of challenge before the Hon’ble High Court and the next date of hearing is 07.09.2020 both before the Hon’ble High Court and the Hon’ble Supreme Court. Therefore, it was requested not to proceed with the hearing and postpone the hearing. The Registrar vide order dated 04-09-2020 declined the request of the petitioners for adjournment and the matter was kept on 05-09-2020 for oral submissions. 12. It is submitted that on 05-09-2020 when the matter was listed for hearing before the Registrar, detailed application was given by the advocates appearing on behalf of the petitioners that the Registrar is trying to overreach the process of the Court and is clearly trying to make the proceedings infructuous. The petitioners relied upon the judgments of the Hon’ble Supreme Court and the Hon’ble High Court that any attempt to make any proceedings infructuous or any attempt to subvert of overreach the process of the Court, would amount to contempt of court. It was pointed out that when the matter to be listed before the Hon’ble Supreme Court on 07-09-2020, there is no reasons for proceeding further with the matter. It was also submitted that the conduct of the Registrar substantiates that he is biased and prejudiced against the petitioners. It is submitted that all throughout during the hearing on 04-09-2020 and 05-09-2020, Shri Y. A. Baloch was sitting with the Registrar and constantly dictating the terms that no adjournment should be granted. 13. It is submitted that in completely highhanded manner rejected the said application of the petitioners vide order dated 05-09-2020. It is submitted that the said order was served upon the advocates on behalf of the petitioners on 05-09-2020 at about 6.25 p.m. i.e. after office hours.
13. It is submitted that in completely highhanded manner rejected the said application of the petitioners vide order dated 05-09-2020. It is submitted that the said order was served upon the advocates on behalf of the petitioners on 05-09-2020 at about 6.25 p.m. i.e. after office hours. It is submitted that advocates of the petitioners therefore, submitted a pursis that since the order rejecting the application for adjournment has been served upon the learned advocates for the petitioners after office hours i.e. after 6.30 p.m. there is no question of hearing the matter further and the matter may be adjourned to some other date and the petitioners be informed about the next date of hearing. The said pursis was given to learned Registrar and received by Shri Y. A. Baloch on behalf of Registrar on 05-09-2020 in presence of the learned Registrar. 14. It is submitted that advocates of the petitioners were told that they may leave and they will be informed about the next course of action however, they were not told that any order is passed under Section-81 of the Act. It is submitted that SLP was to be listed before the Hon’ble Supreme Court on 07- 09-2020, just 10 or 15 minutes prior thereto, the petitioners came to know that final order under Section-81 of the Act has been passed by the Registrar. Therefore, the Hon’ble Supreme Court was requested that since the final order is passed by the learned Registrar, the petitioner will agitate the said issue before the Hon’ble High Court and the SLP be kept pending as the petitioners had come to know that the order was passed to the effect that since the matter is pending before the Hon’ble Supreme Court, charge should not be taken over, however, the Hon’ble Supreme Court was not inclined to keep the matter pending and since the petition was pending before this Hon’ble Court, the SLP was disposed of. 14.1 The petitioners have therefore prayed for quashing of Show Cause Notice as lacking jurisdiction and also the impugned order on the ground of impropriety, bias, violation of principles of Natural Justice and overreaching the Court process. Submissions of the Learned Advocate General for the Respondent No. 1: 15. Learned Advocate General has at length made submission of status of the Federation which is the Apex body.
Submissions of the Learned Advocate General for the Respondent No. 1: 15. Learned Advocate General has at length made submission of status of the Federation which is the Apex body. Its relation with the District Milk Union and over period of time, the co-operative movement which started from the scratch, has attained iconic status, which is recognized all over the world. However, it is between the petty politician for their selfish motives for which the co-operative movement as to see these days and face rather serious allegations of fraud and embezzlement of crores of Rupees, which were unthinkable in the past. 16. Learned Advocate General submitted that the petitioner no.1 - Milk Union is the District level two tiers Union following the “Amul Pattern” which is essentially an economic organizational pattern to benefit small producers in the field of dairy farming. Foundation is at Village level, the District level and the State level. In this pattern, the first tier is the Primary Village Co-Operative Society in short VDCS, which is formed by the members, who are milk producers who can become member by buying the share and the committing themselves sale milk only to the society. Second tier is the District Cooperative Milk Union, which is formed by the Dairy Co-operative Societies and is the Union of VDCS, within the particular district. Third tier State Federation which is Apex body and control the marketing activities of the milk and milk products. The petitioners- Milk Union is approximately 1128 VDCS as its members and 4.5 Lakhs milk producers as members of VDCS. 17. Learned Advocate General submitted that the petitioners have approached this Court seeking discretionary relief in equitable jurisdiction, but the petitioners especially the petitioner Nos. 2 to 13 proved themselves to be recalcitrant and obstinate. Time and again, these petitioners would rush to this Court and on the small issue would not hesitate to carry the litigation till the Supreme Court and that to at the cost of the petitioners - Milk Union. He refers to the Show Cause Notice issued in the year 2016 under Section-81 of Gujarat Co-operative Societies Act, 1961 for several misdeeds. The same was also challenged unsuccessfully though before this Court and now the Special Leave Petition (SLP) is filed and pending before the Apex Court again, for the misdeeds of the members of the petitioners – Milk Union.
The same was also challenged unsuccessfully though before this Court and now the Special Leave Petition (SLP) is filed and pending before the Apex Court again, for the misdeeds of the members of the petitioners – Milk Union. During this period, present Show Cause Notice is issued in exercise of Section-81 of Gujarat Co-operative Societies Act, 1961 and again instead of following the procedure established by law, have rushed to this Court. It is submitted that the Show Cause Notice specifies very serious 13 charges, which is adversely affect the interest of the Union and an opportunity was also, provided to give their explanation before Authority. The petitioners- Milk Union have veiled away time and opportunity and approached this Court by filing the present petition. It is submitted that the petitioners – Milk Union served their interest on one hand, filed this petition, but their approach to conduct the hearing was rather casual. Time and again, though the respondents submitted that the petitioners – Milk Union are non-cooperative in the proceedings before the Authority and that the Authority would proceed in accordance with law. The petitioners – Milk Union took time before this Court in filing the pleadings, opposing the application to join parties, filing Review Application against the order of joining parties etc., but they never did once argued the case and insisted for grant of interim relief to stay the proceedings on the Show Cause Notice. It is submitted that the State was categorically in its submission before this Court throughout that the Authority would proceed on merits on account of time prescribed by the Act. At that stage for the first time before this Court, the grievance was raised against the Authority about the non-supplying of documents. The Court having taken cognizance of such grievance passed the interim order fixing up the time table for receiving the necessary documents and also for the petitioners to submit their reply. Initially, the order was accepted by the petitioners and an application seeking relevant documents, was filed by the petitioners- Milk Union before the Authority and as provided in the order of this Court, the Authority also supplied immediately all such documents. It is submitted that thereafter, the petitioners – Milk Union preferred the SLP against the interim order and the SLP came to be dismissed.
It is submitted that thereafter, the petitioners – Milk Union preferred the SLP against the interim order and the SLP came to be dismissed. It is submitted that despite of the facts being brought to the notice of the Supreme Court, the Supreme Court did not interfere and did not even considered to pass the order to stay the proceedings under Section-81. 18. It is submitted that all the contentions of law, which are raised before this Court, were already the subject matter in the previous round of litigation and such contentions have been answered by the Division Bench of this Court in the Letters Patent Appeal (LPA), though the judgment of the LPA is the subject matter of challenge before the Apex Court. The Apex Court has not stayed the implementation and operation of such judgment and therefore, all the findings with regard to the contentions raised here stands concluded and more so when the petitioners in the previous round of litigation is the same, as the petitioners herein. 19. Learned Advocate General submitted that there was no reason for the petitioners not to answer the Show Cause Notice as the petitioners were aware that the Authorities bound by the time period, within which the decision is to be taken. Therefore, from the beginning, the petitioners- Milk Union have adopted policy of delaying hearing of the Show Cause Notice before this Court. It was contended that petitioners – Milk Union were not supplied with enough material to answer to the charges in the Show Cause Notice and very short duration was provided to the petitioners- Milk Union to answer such charges, which was pertaining to the period, three to four years back. But on the other hand, even no time, the present petition is filed wherein the petitioners – Milk Union offered their explanation to each and every charge. Meaning thereby, the petitioners- Milk Union were equipped to answer each of the charges immediately. 20. Learned Advocate General submitted that after the order was passed under Section-81, pending the petition, the petitioners – Milk Union have made amendment to the petition, bringing in the challenge to the order as well. However, nothing mentioned in the amended petition also, challenging 13 charges, which as per the impugned order now, stood proved.
20. Learned Advocate General submitted that after the order was passed under Section-81, pending the petition, the petitioners – Milk Union have made amendment to the petition, bringing in the challenge to the order as well. However, nothing mentioned in the amended petition also, challenging 13 charges, which as per the impugned order now, stood proved. It was incumbent for the petitioners to challenge the findings of such order or atleast, offered explanation to such findings and therefore, in view of an alternative remedy available, the petition should not be entertained. 21. It is further submitted that the petitioners are facing serious charges and in the petition, no ground is put forth to justify why due procedure established by the provisions of the Gujarat Co-operative Societies Act, 1961, should be short-circuited and straight way, the petition should be entertained. In the face of serious accusation, no equitable view may be taken to entertain the writ petition. 22. Countering the submissions made by the petitioners- Milk Union on the ground that the Registrar will have no jurisdiction to deal with the Show Cause Notice under Section-81 of Gujarat Co-operative Societies Act, 1961 on the ground that the Registrar has right to nominee in the petitioners- Milk Union and therefore, the Registrar himself is party. In support, reliance is placed on the Division Bench judgment reported in the case of Vipulbhai Mansinhbhai Chaudhary v. State of Gujarat & Others reported in 2015 SCC Online Guj 1930, wherein this Court has held in Para-9 that the Registrar has not participated in the decision-making process of the managing committee, is competent to issue notice under Section-76B of the Act. 23. It is submitted that the view has been validated by the decision of the Hon’ble Apex Court in Special Leave to Appeal No.4668 of 2015 dated 20- 03-2015. It is then submitted that where the Authority lacks jurisdiction, can also be an issue, which can be decided by the Authority itself and it is open for the petitioners to raise such issue before the Authority as well as before the Appellate forum.
It is then submitted that where the Authority lacks jurisdiction, can also be an issue, which can be decided by the Authority itself and it is open for the petitioners to raise such issue before the Authority as well as before the Appellate forum. Reliance is placed on the judgment of the Division Bench in case of Natvarlal Pitambardas Patel Chairman- Gujarat State Co-op v/s. State of Gujarat through Secretary passed in Letters Patent Appeal no.1973 of 2011 in Special Civil Application no.7089 of 2011 dated 13/04/2016, wherein also contentions that exercise of jurisdiction by the Registrar in view of the fact that the Registrar, being a member of the Managing Committee and has participated in the proceedings, which culminated into issuance of the show cause notice. The Division Bench in para-4 has held that such lack of jurisdiction can be issue, which can be raised as preliminary issue and the competent authority has to consider the same in accordance with law. 24. Reliance is also placed on the decision of the Division Bench of this Court in the case of Mehsana District Milk Producers Union Ltd v/s. Registrar Cooperative Societies passed in Letters Patent Appeal no. 887 of 2017 dated 03/05/2018, wherein again addressing the similar issue that the District Registrar is on the Board of Directors of the Union as nominee of the Registrar, therefore, cannot inquire into any affairs and cannot make any Report. To which the reliance is placed on the Government Resolution and Notification which provided for the mechanism of separate committee to be constituted to exercise the power of the Registrar. However, such mechanism only where the Registrar is the member of Board of Directors. Here, the Registrar himself is not the member of the Board of Directors. 25. Countering the submissions on the bias, Learned Advocate General has relied upon the judgment of the Hon’ble Supreme Court in the case of A.P. State Road Transport Corporation, Hyderabad and another v/s Sri Satyanarayana Transports Pvt. Ltd. Guntur & ORS. reported in AIR 1965 (SC) 1303 , for invoking theory of bias. It is to be established that the bias is personal bias, pecuniary bias or financial bias. Parameters are required to be established either of the bias and in the present petition, the petitioners has failed to establish any parameters to invoke the theory of bias.
reported in AIR 1965 (SC) 1303 , for invoking theory of bias. It is to be established that the bias is personal bias, pecuniary bias or financial bias. Parameters are required to be established either of the bias and in the present petition, the petitioners has failed to establish any parameters to invoke the theory of bias. Thereafter, reliance is placed on the judgment in the case of Dr. Abraham Kuruvilla v/s. Sree Chitra Tirunal Institute for Medical Sciences and Technology reported in (2005) 9 SCC 49 , submitted that to make out a case of bias. It is required to be proved by raising requisite plea in this behalf and by adducing cogent and sufficient evidence in support thereof. In fact, bias is a state of mind showing predisposition. Therefore, according to merely making statements, would not meet the requirement to invoke bias. 26. Learned Advocate General has submitted in the Affidavit in reply that the writ petition does not lie at the show cause notice stage and therefore, the said writ petition is premature, as the show cause notice does not give rise to any cause of action, since no adverse order affecting the rights of the Petitioners has been passed. It is respectful stated that it is always open to the Petitioners to present their case before the Respondent No.1 Authority and explain their stand, as and when hearing is afforded to them with reference to the show cause notice issued under Section 81 of the Act and more particularly in response to the following 13 irregularities alleged to have been committed by the Petitioner No.1 Union and referred to in the said impugned show cause notice. 27. It is submitted that an objection as to the jurisdiction of the Respondent No.1 authority to Issue the impugned show cause notice. It is submitted that there Is clear demarcation of the powers to be exercised by the District Registrar, one hand and the State Registrar, on the other. The District Registrar exercises its powers at the District level, whereas the impugned show-cause notice is issued by the State Registrar, who has jurisdiction all over the State. In the Board of Directors of Petitioner No.1 Union, the State Registrar has never been a Member and therefore, no question arises of Respondent No.1 being a judge of his own cause.
The District Registrar exercises its powers at the District level, whereas the impugned show-cause notice is issued by the State Registrar, who has jurisdiction all over the State. In the Board of Directors of Petitioner No.1 Union, the State Registrar has never been a Member and therefore, no question arises of Respondent No.1 being a judge of his own cause. Under the circumstances, Respondent No.1 is very much competent to issue and decide the said impugned show-cause notice under the provisions to Section 81 of the Act. Furthermore, the similar objection was taken by the very Petitioner No.1 Union in the earlier proceedings before this Hon'ble Court and the same was put to quietus by the learned Divisions Bench in LPA No. 887 of 2017 & Anr. In case of Mehsana District Milk Producers Union Ltd. v. Registrar, Co-operative Societies. 28. It is submitted that as per Article 243ZL added by 97th Constitution Amendment which was brought in force with effect from of the 15.02.2012, in case of a Society which does not have any Government shareholding or funding or financial control by way of loans, the State authorities will not have right to supersede the body of such Society and the said issue is at large before the Hon'ble Supreme Court. In this regard, it is respectfully stated that the learned Division Bench of this Hon'bie Court has struck down the 97th Constitution Amendment, which contained the said Article 243ZL in case of Rajendra N. Shah Vs. Union of India & Ors. and the said decision has been challenged before the Hon’bie Supreme Court by way of Civil Appeal No.9108 and 9109 of 2014 and the same is pending for adjudication and no stay has been ever granted in the said matters. Only in view of the pendency of the aforesaid challenge before the Hon’ble Supreme Court, the State authorities cannot be precluded to initiate actions as provided under the Act. 29. It is submitted that the Respondent Authority has issued impugned show-cause notice under Section-81 on certain issues, wherein the separate provisions of the Act has already been invoked. It is submitted that since these provisions are independent of each other and each of them operates in the particular set of circumstances.
29. It is submitted that the Respondent Authority has issued impugned show-cause notice under Section-81 on certain issues, wherein the separate provisions of the Act has already been invoked. It is submitted that since these provisions are independent of each other and each of them operates in the particular set of circumstances. Whereas, in the instant case, there are series of alleged defaults, negligence and acts prejudicial to the interest of the petitioner No.1 Union or its members, which, if proved cumulatively go to establish that the Petitioner No.1 Union has not only failed to perform its duties, but also abused its powers, and if any action is to be taken for the same, that would squarely be covered within the ambit of the provisions of Section-81 of the Act. Even a bare perusal of the charges of various irregularities leveled against the Petitioner No.1 Union in the impugned show cause notice, prima facie suggests a very serious case with a great amount of gravity and grossness, requiring adjudication thereof. 30. Learned Advocate General for the Respondent No.1 in response to the submissions of the petitioners – Milk Union regarding Financial Assistance, submitted that it is one of the major contentions of the Petitioners that since there is no financial assistance, etc. given by the Government to the Petitioner No.1 Union, the State Government has no authority to supersede its Board of Directors, in view of the provisions of Article 243ZL of the Constitution, contained in Chapter IX-B, introduced vide 97" Constitution Amendment. However, the hard reality is other way round, as discussed hereunder. Petitioner No.1 Union is the district level two-tier Milk Union, formed by its members numbering around 1128, which are primary milk producers sahakari mandalis, i.e. Village Dairy Co-Operative Societies (“the VDCS" for short) and which, in turn have more than 4.5 lakh milk producers as their members. The production activities of Petitioner No.1 Union are entirely based upon the quantity and quality of milk they get from these VDCS, being its members, and therefore, Petitioner No.1 Union cannot sustain in its Dairy business without them. It is, in fact. the duty of Petitioner No.1 to equip the said VDCS with proper infrastructure and equipment to maintain quality of milk it gets from VDCS.
It is, in fact. the duty of Petitioner No.1 to equip the said VDCS with proper infrastructure and equipment to maintain quality of milk it gets from VDCS. Therefore, extension of financial assistance by the Government to the said VDCS through Petitioner No.1 Union, is nothing but the assistance to the Petitioner No.1 Union itself. Gujarat Co-Operative Milk Marketing Federation (“the GCMMF” for short) is an Apex Body, regulating the affairs of the Petitioner No.1 Union, and marketing the entire production of milk and milk products of the Petitioner No.1 Union. Petitioner No.1 Union has been the direct recipient of financial assistance of Rs.4.62 cr. from the State Government through GCMMF, pursuant to GR dated 27.06.2018, at the rate of Rs.50/kg on export of Schemed Milk Powder (SMP) as at the material time, the ex-factory prices of Petitioner No.1 Union were higher than the international prices and therefore, by extension of the aforesaid financial assistance, the State Government took care of the deficit between the exfactory prices and international market prices. So that the Petitioner No.1 Union and other district level Unions do not suffer losses while exporting the SMP in international market. Pertinently, the earlier show-cause notice dated 27.10.2016 had no occasion to refer to the said direct financial assistance to the Petitioner No.1 Union, which took place in the year 2018. Apart from what is mentioned above. during the period from 2011-12 to 2019-20, the State Government has extended financial assistances under different Government Schemes so as to help out the Petitioner No.1 Union’s members i.e. VDCS. According to Petitioners, the said financial assistance to VDCS cannot be treated to be the indirect assistance to itself and that the State Government having failed to include the said aspect of the matter in the previous showcause notice dated 27.10.2016, should be estopped from referring to the same at this stage, in view of the principle analogous to the principle of constructive res judicata. Pertinently, the said principle is not applicable to the reference to the factual position, though the same was left out to be mentioned so far as the period upto 27.10.2016 is concerned. However.
Pertinently, the said principle is not applicable to the reference to the factual position, though the same was left out to be mentioned so far as the period upto 27.10.2016 is concerned. However. even otherwise, the said argument of the Petitioners will not apply to the financial assistance given in the years 2017, 2018 and 2019, i.e. for the period post 27.10.2016, which obviously could not have been included in the said previous show cause notice dated 27-10-2016. In view of the above, even whilst assuming without admitting that Article 243ZL of the Constitution contented In Chapter IX-B, introduced vide 97'" Constitution amendment, presently holds the field then in that case also, the State authorities have the right to supersede the Petitioner No.1 Union having received financial assistance, as indicated above. Without prejudice to what is mentioned above, it is submitted that even whilst assuming without admitting that the Petitioner No.1 Union has not received any financial assistance from the State Government, then in that case also, it can be superseded, in as much as the 97th amendment containing Article 243ZL has been struck down by this Hon’ble Court in the case of Rajendra N. Shah vs. Union of India reported in 2013 (2) GLR 1698 . Though the said judgment has been appealed against before the Hon'ble Supreme Court, no stay has been granted. Therefore. there arises no question of applying the provisions of Chapter IX-B and more particularly, Article 243ZL of the Constitution to Petitioner No.1 Union. Division Bench Judgment in case of Rajendra N. Shah vs. Union of India reported in 2013 (2) GLR 1698 , quashing Part IXB of the Constitution of India, relating to the Co-operative Societies, cannot be deemed to have been impliedly overruled by the Judgment of the Hon'ble Supreme Court in case of Vipulbhai Mansinhbhai Chaudhary v. GCMFL, reported in (2015) 8 SCC 1 which merely discusses the provisions of the said Part IXB, without there being any question relating to vires thereof and without having taken notice of the aforesaid Judgment of the Hon‘ble Gujarat High Court in the case of Rajendra N. Shah (supra). 31. It is submitted that Orders dated 17.05.2018 and 30.07.2018 passed in SLP (C) No.13215 and 13329 of 2018 raising various identical issues, are merely interim orders and hence, the same cannot be said to be precedent and therefore, cannot be relied upon. 32.
31. It is submitted that Orders dated 17.05.2018 and 30.07.2018 passed in SLP (C) No.13215 and 13329 of 2018 raising various identical issues, are merely interim orders and hence, the same cannot be said to be precedent and therefore, cannot be relied upon. 32. It is submitted that the show cause notice in question cannot be said to be without jurisdiction, merely because it is issued and adjudicated by the Registrar on the alleged ground that as per bye-law, the Registrar has nominated his representative as one of the Directors in the Board of Directors in Petitioner No.1 Union, whereby, in capacity of principal, Registrar himself becomes the Director and that therefore, he cannot be a Judge of his own cause. This is because of the fact that Respondent Registrar has never participated in the conduct of business and affairs of the Petitioner No. 1 Union at any point of time. In other words, the said notice is not without jurisdiction. According to the Petitioners, powers of issuing a show-cause notice for supersession have been delegated to a Committee as provided in GR dated 15.04.2005 and Notification dated 26.04.2005 w.r.t. federal societies listed in a table to Rule 398 of the Rules, and therefore the petitioner No.1 Union being a federal society, Respondent No.1 Registrar, cannot initiate action under Section 81 of the Act. However, at present, this Committee no longer survives and exists in view of its 3 years’ tenure having already been over in 2008. Further, as per Rule 398 of the Rules, the aforesaid GR applies to federal societies listed in the table below the said Rule and the name of the Petitioner No.1 Union does not figure in the said list. It is submitted that in order to come to the conclusion that the show-cause notice in question discloses a pre-judged pre-decided mind, one is required to read the said notice as a whole and not in bits and pieces on doing so, any person of ordinary prudence should get a feeling that his reply to the notice will be an empty formality.
However, in the instant case, so is not the position, since last para of the said notice, clearly suggests that what is stated in the foregoing paras of the said notice regarding the acts and omissions of the Petitioner No.1 Union, is nothing but 'a prima-facie’ view, in response to which, Petitioners were desired to submit their written / oral submissions. In this behalf, the Petitioners' reliance on two judgments, i.e. (i) (2010) 13 SCC 427 ; and (ii) (2006) 12 SCC 33 , w.r.t the aspect relating to prejudging is totally misplaced, since the wordings of the notice referred to in the first judgment and the wordings used in the affidavit filed in the second judgment explaining the contents of the show-cause notice issued in the said later case, are absolutely different than the wordings used in the show-cause notice in question in the instant matter. In the said two judgments, the respective showcause notices clearly show that the concerned authorities in the said cases had literally made up their minds. So is not the position in the present case. It does not lie in the mouth of the Petitioners to contend that vide show-cause notice dated 27-07-2020 in question and served upon them on 29.07.2020, they were given only 3 days' time to reply to the same by 04.08.2020, more particularly when they could afford to file the captioned writ petition on 01.08.2020 with detailed defences / justifications against each of the thirteen irregularities / charges leveled against them. 33. It is submitted that in any quasi-judicial proceedings; aspects like (i) Bias, (ii) Lack of bonafides, (iii) Colourable Exercise of Powers, (iv) Under / Hot Haste. (v) malaflde, (v) Bad Motive, (vi) Non-Grant Opportunity of being heard. etc. are different limbs of the Principles of Natural Justice. Bias as well as other limbs referred to above denote the standard of evenhanded justice, which law requires from those who occupy quasi-judicial office. Plea relating to ‘Bias' must be proved by adducing cogent and sufficient evidence in support thereof and general statements would not meet the requirement of law. Principles of Natural Justice cannot be put in a strait jacket formula and cannot be applied in vacuum without reference to the relevant facts and circumstances of the case.
Plea relating to ‘Bias' must be proved by adducing cogent and sufficient evidence in support thereof and general statements would not meet the requirement of law. Principles of Natural Justice cannot be put in a strait jacket formula and cannot be applied in vacuum without reference to the relevant facts and circumstances of the case. Non-availment of repeated grant of opportunities by the Authority, which may eventually result into the conduct of ex-parte inquiry, cannot be branded as contravention of the Principles of Natural Justice as well as of various limbs thereof, as referred to above. In the present case, the Petitioners were afforded sufficient opportunities of hearing on 6 different occasions i.e. on 04.08.2020, 10.08.2020, 14.08.2020, 21.08.2020, 04.09.2020 and 05.09.20, but the same were not availed of, and ultimately, supersession order came to be passed on 05.09.2020, subject to the outcome of Petitioners' SLP No.10351 of 2020 and, IA No.87476 of 2020, filed in the Hon’ble Supreme Court and the same was made operative w.e.f. 07.09.2020. Petitioners’ non-availment of opportunities of hearing as referred to above, was despite the fact of their having understood the tenor of the order dated 27.08.2020 of this Hon’ble Court, which is discernible from their applications filed as per the said order, seeking certain documents, that they have been granted permission to file reply by 04.09.2020 and that hearing would be on the basis of the said documents etc. that may be supplied to them. There is no embargo for the authority to pass the order of supersession under Section- 81 of the Act after office hours. In the absence of any reply filed by the Petitioners’ in response to the show-cause notice in question, there is no bare for the respondent No.1 to have considered Petitioners’’ detailed defence as put up on oath in the captioned writ petition, against each of the charges levelled against them. 34. It is submitted that A Statement / Charge submitted on behalf of Respondent No.1 - Registrar, inter-alia indicating the charges levelled against the Petitioner No.1 Union, its defence as taken in para 2.23 to 2.43 of the memo of the captioned writ petition, and its findings recorded in the impugned order, clearly suggest that all the charges have been proved as per the findings recorded in the aid order dated 05.09.2020, which is under challenge.
After the passing of the said order dated 05.09.2020 by Respondent No.1- Registrar the petitioners have filed draft amendment, but no plea against any of the findings on merit, is found therein, demonstrating as to how any of the findings is factually or otherwise incorrect or perverse. 35. It is submitted that the petitioners themselves are guilty of using stratagem to dilly-dally the hearing of the show-cause notice in question before the Registrar, under one pretext or the other, to see that somehow, hearing of the Show-cause notice does not take place. This aspect of the matter can be very well appreciated from the following few instances. Having filed the captioned writ petition on 01-08-2020 challenging the validity of the show-cause notice in question, the petitioners never insisted for the grant of stay order/ Interim relief against the hearing of the said show-cause notice, despite the fact that on every date of hearing of the captioned petition, the grievance was being raised on behalf of the Respondent No.1- Registrar that the authority would like to proceed with the hearing of the show-cause notice, but the petitioners are not co-operating. Opposing the implement application of the minority Directors i.e. Respondent Nos.2 to 4 to the captioned proceedings. Further time was consumed in filing and arguing application seeking review of this Hon’ble Court’s order dated 24-08-2020 allowing the impleadment of Respondent Nos. 2 to 4 as party respondents to the captioned proceedings. Belatedly raising a grievance on 27-08-2020 and that too for the first time that certain documents referred to in the show cause notice, are not made available and therefore, the same should be provided in order to enable the Petitioners to defend their case. Making application dated 29-08-2020 to the Respondent No.1, inter alia, indicating the documents desired by them, with an assertion that they have been granted permission to file reply by 04-09-2020 and that the Registrar should conduct the hearing only on the basis of particulars, documents, etc. supplied to the petitioners. Having created an impression in the first instance that Petitioners are not aggrieved by the aforesaid order dated 27.08.2020 of this Hon’ble Court, filed SLP on 01.09.2020, challenging the said order dated 27.08.2020.
supplied to the petitioners. Having created an impression in the first instance that Petitioners are not aggrieved by the aforesaid order dated 27.08.2020 of this Hon’ble Court, filed SLP on 01.09.2020, challenging the said order dated 27.08.2020. with a grievance to the effect that this Hon‘ble Court should have heard the matter, instead of asking the Petitioners to respond to the show cause notice in question and that the Petitioners should not have been relegated to subscribing to the authority of the Registrar. In spite of the aforesaid developments, the Petitioners had an audacity not to file reply 04-09-2020 and not to participate in the hearing on 05-09-2020 whilst being represented through 4 (four) different learned Advocates. It was under the aforesaid circumstances that after having granted as many as 6 (six) opportunities to the Petitioners, that the Respondent No.1- Registrar, passed the impugned order dated 05.09.2020, which was made subject to the outcome of the Petitioners’ SLP No.10351 of 2020 dated 01.09.2020. At the time of hearing of the said SLP on 07.09.2020, Petitioners, while seeking stay against the above said order dated 27.08.2020 as well as against the hearing of the show cause notice, also complained that despite pendency of their captioned writ petition in the High Court and SLP before the Supreme Court, Respondent No.1 Registrar has passed the order of supersession, overreaching the process of law. However, no relief as prayed for was granted. The aforesaid instances speak for themselves which in fact, suggest lack of bonafides, pre-meditated mind and recalcitrant and obstinate approach on the part of the Petitioners. Such Petitioners have no right to raise similar allegations against the Respondent No.1 -Registrar, merely because, the Respondent No.1- Registrar having granted adjournments on six different occasions by providing sufficient opportunities of being heard, proceeded with the hearing of the show cause notice in question and passing the order of super session, immediately thereafter. For this, no fault can be found against the Respondent No.1 by alleging that the show cause notice as well as his subsequent conduct in passing the order allegedly demonstrate complete lack of bonafides, colourable exercise of powers with oblique motive to overreach the process of Court. 36.
For this, no fault can be found against the Respondent No.1 by alleging that the show cause notice as well as his subsequent conduct in passing the order allegedly demonstrate complete lack of bonafides, colourable exercise of powers with oblique motive to overreach the process of Court. 36. It is submitted that in view of what is stated hereinabove, it is clear that Respondent No.1-Registrar has neither prejudged or pre-decided the issues in the show-cause notice nor has never tried to overreach the Court process nor his order dated 05.09.2020 is malaflde with an intention and motive to throw out elected members at the fag end of their tenure. Unfortunately, in order to hide their own follies, the Petitioners are trying to find fault with Respondent No.1 -Registrar, on every count, which is neither fair nor proper. Submissions of the Learned Senior Advocate Shri Prakash Jani for the respondent Nos. 2, 3 and 4: 37. Learned Senior Advocate Shri Prakash Jani for the respondent Nos. 2, 3 and 4 submitted that the respondent Nos. 2, 3 and 4 were also elected members of the Committee similarly to the petitioners – Milk Union. However, on account of the brute majority of the petitioners – Milk Union, the respondent Nos.2 to 4 were always neglected. In the Committee, 16 members were elected. The election conducted in the year 2015. After the election, respondent Nos. 2 to 4, were treated outsider and not a single decision has been taken of which these respondents were made party. Petitioners – Milk Union, used to take decision without following the procedure. The respondents were never given Agenda on time. No proper intimation was even for conducting of the meeting and from 2015, continuous attempts have been made for removing these respondents from the Committee. The reason for attempt to remove them was because the petitioners – Milk Union considered them to be obstacle in the way of their functioning of the society to serve their own interest, rather than, the interest of the society. Therefore, time and again, these respondents have made in detail representations of the conduct and management of the society by the petitioners committee members to various Authorities including the District Registrar. 38.
Therefore, time and again, these respondents have made in detail representations of the conduct and management of the society by the petitioners committee members to various Authorities including the District Registrar. 38. It is submitted that the Milk Union is the District Level Union where the members are the farmers involved in the production of milk and they contributed to the society by supplying the milk through their village level cooperative society to the District Milk Union. Therefore these farmers are the backbone of Milk Union and whole District Mahesana and 2 Talukas of neighboring Patan and Gandhinagar Districts are attached to the Milk Union and nearly four lakh families are depending upon the Union. The profit of the Milk Union is to be distributed to the primary societies of which these farmers are the members and through primary societies, the proportionate amount is given depending upon the quantity and quality of milk supplied by these farmers to the Milk Union. It is therefore, submitted that the Committee is actually holding the Trust of these farmers and therefore, each and every committee Members is expected to act in the manner which is beneficial to the Union, primary society and ultimately, the farmers. 39. It is submitted that the petitioners as well as the respondents have been issued the Notice under Section-81 of Gujarat Co-operative Societies Act, 1961, wherein 13 charges have been leveled, which are charges of the Committee Members having acted against the interest of the Union and its members and has also caused huge financial loss. He submitted that Charge No.9 indicates that the Union had procured manufacturing facilities at Manesar and Daruhetha at Hariyana and after procurement of such plots, was also not done in proper prescribed manner and without necessary permission. Even if the purchase of such Plants, the Union could manage to run the Plants only at the capacity of 24% depending upon the products. Thereby incur huge financial loss to the tune of Rs.62 Crores. This huge loss is even evident from the Chartered Accountant’s report. This huge loss would have otherwise been available for distribution amongst the members. 40. Another charge of distributing Rs.120 Crores amongst the members was also not in the interest of the Union and purely to serve the political interest of the Committee Members, the decision was taken.
This huge loss is even evident from the Chartered Accountant’s report. This huge loss would have otherwise been available for distribution amongst the members. 40. Another charge of distributing Rs.120 Crores amongst the members was also not in the interest of the Union and purely to serve the political interest of the Committee Members, the decision was taken. The neighboring Banaskantha Dairy working with the same members as the Milk Union from their profit have distributed huge amount to its members depending upon the earnings of the respective Dairy. The members were supplying the milk received payment at fixed price. At the year end, when the accounts are audited by the Chartered Accountant, the Milk Union would have an excess amount out of the year earnings, which is then resolved to distribute to its members proportionately. In the instant case, though such excess amount was only to the tune of Rs.18 Crores, the Committee members proceeded to resolve to distribute Rs.120 Crores, thereby creating burden of Rs.101 Crores. It is submitted that otherwise what was due and payable by way of distribution to its members was an amount of Rs.19 Crores, additional burden of Rs.101 Crores will now have to be covered up by either taking loan from the Bank or from selling of the society of the milk union. This was also, against the interest of the society. It is also submitted that the serious allegations of adulteration of Ghee worth Rs.40 Crores, is direct responsibility of petitioner-members. Marketing Federation after carrying out necessary analysis of the products, had concluded that Ghee is adulterated and refused to accept the same and such huge quantity of Ghee is still lying in the godown. It is not open for the Committee members to pass on burden of the adulterated Ghee of such huge quantity on the Employees or the Transport Company. It is submitted that as per Sectoin-73 of Gujarat Co-operative Societies Act, 1961, final authority with regard to the administration of the Society is with the society and therefore, the Milk Union is supreme body. Section-74 of Gujarat Co-operative Societies Act, 1961 pertains to the power and function of the Committee members and the Committee members have to function as per Rule-33 and 34 of Gujarat Co-operative Societies Rules, 1965, as well as bye-laws accepted by the society.
Section-74 of Gujarat Co-operative Societies Act, 1961 pertains to the power and function of the Committee members and the Committee members have to function as per Rule-33 and 34 of Gujarat Co-operative Societies Rules, 1965, as well as bye-laws accepted by the society. Attention is drawn to bye-laws No.41, 44 and submitted that it is function of the Committee for managing the affairs, managing stock register, purchase and gradation of products to maintain the substandard and manage trade and business. Bye-laws No.44 refers to the special status to the Chairman and therefore, combine reading of relevant Rules and Bye-laws, the petitioners again escape from their liability towards society for the adulteration of the huge quantity of Ghee by passing on the buck on the staff and employees. It is submitted that combine effect of these four charges had adversely affect the finance of the Union to the tune of Rs.247 Crores. 41. Learned Advocate submitted that Section-81 of Gujarat Co-operative Societies Act, 1961, which provides for Supersession of the Committee and specifies three grounds namely persistent default, negligent in the performance of its duties and act prejudicial to the interest of the society or its members. It is submitted that Secton-81 provides for Supersession of the Committee, but does not affect the existence of the society. The Milk Union does not affect in any manner existence of the Milk Union. 13 charges leveled against the Committee members cover up all the 3 requirements of Sectoin- 81. Charge No.4 and 13 are with regard to the persistent default, Charge No.4-5 to 12 amounting to negligent of duty and Charge No.1, 2, 3 and 9 are the act of the Committee Members, which is prejudicial to the interest of the members and the Society. It is submitted that it is not necessary for the Authority to conclude the proceedings under Section-81, after proving of all the 13 charges, but even if one single charge is sufficient to take action against the Committee members under Section-81. 42. Learned Advocate refers to Section-81 and submitted that Section-81 provides time limit of 15 days from the date of notice to take a decision and supersede the Committee. Intent behind this legislature is to save Union from the prejudicial acts against the interest of the Society by the Committee members.
42. Learned Advocate refers to Section-81 and submitted that Section-81 provides time limit of 15 days from the date of notice to take a decision and supersede the Committee. Intent behind this legislature is to save Union from the prejudicial acts against the interest of the Society by the Committee members. It is submitted that initially in the entire statute is the time limit prescribed except for this Section. Section-76(b) of the Gujarat Co-operative Societies Act, 1961 provides for disqualification of individual members. There also no time limit has been prescribed but when it comes to Supersession of the Committee, it was important to prescribe the time limit so that the Society is saved from any further damage on account of the act of Committee members. Therefore, when it was pointed out by these respondents, manner and method adopted by the Committee members in the functioning, which was not only against the interest of the society, but such acts were also to serve the interest of the Committee members and their family members. 43. It is in this background of facts, the Show Cause Notice dated 27-07- 2020 was issued and the District Registrar was bound by the statute to decide in 15 days. Learned Advocate submitted that after the Show Cause Notice was issued, 8 of the petitioners sought for time on 04-08-2020, whereas the present respondents filed their reply. The matter was adjourned to 10-08- 2020. Again on adjournment, the application was sought and the matter was adjourned to 14-08-2020. On 14-08-2020, different set of petitioners applied for adjournment and the matter was adjourned to 21-08-2020. In the meantime, the Show Cause Notice was filed before this Court and pending the petition before this Court, another Special Leave Petition (SLP) was filed before the Hon’ble Apex Court and therefore, before the Registrar except for adjournment, the petitioner have not made any attempt to cooperate with the proceedings with the Registrar, though knowing fully well that there is time limit for the Registrar to proceed and conclude. 44. It is submitted that even before this Court, the petitioners did not make any serious attempt to pursue the petition and at-least seek decision for the interim relief.
44. It is submitted that even before this Court, the petitioners did not make any serious attempt to pursue the petition and at-least seek decision for the interim relief. As then, it was suitable for the petitioners to keep the petition pending on one hand and seek adjournment before the Registrar on the other hand, approach of the petitioners before this Court was also casual and did not attach any seriousness to the hearing before this Court. 45. Attitude of the petitioners to prolong the hearing of the Show Cause Notice as far as possible is evident even from the record of the Registrar, where there is no provision to engage an Advocate to represent the case. However, the permission was sought. Special permission was sought and granted for appearance of Advocate and still no response was filed and time and again, through Advocate, adjournment applications have been filed. 46. It is submitted that the petitioners raised ground of documents not being supplied, though the relevant documents were supplied. The nature of documents which were sought for, would clearly indicate that the intention of the petitioners was to frustrate prolong the hearing of the Show Cause Notice and thereby frustrate the Show Cause Notice. This attitude of the petitioners clearly indicates that they were aware of their misdeeds and never wanted the same to be in open for as long period as possible especially that approaching end of tenure of term of office. 47. It is submitted that even when the Committee members received the Notice under Section-81, the Committee members did not circulate any Agenda for calling the meeting of the Committee members to take decision with regard to file of reply or file the petition before this Court. There is no Agenda or Resolution in this regard. Had it been so, the present respondents would be given Agenda and the Resolution and therefore, the petitioners – Milk Union themselves are working in the manner disregarding the democratic members. The Milk Union is made as petitioner No.1, though there is no action contemplated against the petitioner - Milk Union. As the Show Cause Notice is under Section-81 for the Committee Members and its for the Committee members to answer the charges in the Show Cause Notice. Even if the charges are approved or disapproved, no consequences are fallen on the society.
As the Show Cause Notice is under Section-81 for the Committee Members and its for the Committee members to answer the charges in the Show Cause Notice. Even if the charges are approved or disapproved, no consequences are fallen on the society. Therefore, in absence of any Agenda, Meeting or Resolution to challenge the Show Cause Notice under Section-81 by the petitioners- Milk Union is unilateral decision of the petitioners to save their scheme. 48. Learned Advocate submitted that one of the charges is that the petitioners have adopted ingenious method to cause benefit to their family members and therefore the Research institute which was created by the Union and is completely depending on the petitioners- Milk Union for its finances and administration. Nearer and dearness have been given appointment in their Trust, which has run the Research Institute. Such appointments are given by completely disregarding process of selection of proper candidates. He draw attention to the pleadings to indicate that each of the petitioners have got their family members, be it husband, son, daughter, daughter-in-law, etc. be appointed as Employee of such Trust managed by the petitioner- Milk Union. 49. It is submitted that though right to continue as the Member is the right which is provided in Gujarat Co-operative Societies Act, 1961. Therefore, right of the petitioners to challenge to Section-81, Show Cause Notice is ultimately to assert the right of the petitioners to continue as the Member. This right is not constitutional, but right generated out of a statue. Therefore, when the right is creation of the statute, then remedy to exercise of such right or remedy to discontinue of such right is also provided under the very statute. 50. It is submitted that when the statute itself is provided for remedy, the petition under Article-226 of the Constitution, may not be maintained. Reliance is placed upon the decision of N.P. Ponnuswami v/s. Returning Officer, Namakkal Constituency, Namakkal, Salem Dist. reported in AIR 1952 SC 64 , in Para-12 held as under: “12. It is now well-recognized that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes J. in Wolver Hampton New Water Works Co.
It is now well-recognized that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes J. in Wolver Hampton New Water Works Co. v. Hawkesford [(1859) 6 C.B. (N.S.) 336, 356] in the following passage: There are three classes of cases in which a liability may be established founded upon statute. One is, where there was a liability existing at common law and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that, or the statutory remedy. The second class of cases is, where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to. The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspaper Limit- ed(1) and has been reaffirmed by the Privy Council in Attorney-General of Trinidad and Tobago v. Gordon Grant & Co.(2) and Secretary of State v. Mask & Co.(a); and it has also been held to be equally applicable to enforcement of rights: see Hurdutrai v. Official Assignee of Calcutta(4). That being so, I think it will be a fair inference from the provisions of the Representation of the People Act to state that the Act provides for only one remedy, that remedy being by an election petition to be presented after the election is over, and there is no remedy provided at any intermediate stage.” 51.
That being so, I think it will be a fair inference from the provisions of the Representation of the People Act to state that the Act provides for only one remedy, that remedy being by an election petition to be presented after the election is over, and there is no remedy provided at any intermediate stage.” 51. It is submitted that order under Section-81 is appealable order provided under Section-153 of the Gujarat Co-operative Societies Act, 1961, and as the remedy is available to the petitioner. Reliance is placed on recent decision of this Court in CAV JUDGMENT dated 22/09/2020 passed in Special Civil Application no. 9622 of 2020, in case of the Visnagar Taluka Co-operative Purchase and Sales Union Limited (deleted) versus District Registrar, Co-op. Societies, in Para-17 and Para-18, held as under: “17. What is evident is that one of the Committee Members approached the Appellate Authority. Albeit the appellant has expired pending the appeal and the consequence of the appeal would take the course of law that it will. However, perusal of Section 153 considered in the context of the conduct of the other 12 committee members not approaching this Court, together would persuade this Court to dismiss this petition only on the ground of an alternative remedy available under Section 153 of the Gujarat Cooperative Societies Act. 18. Therefore without taking into consideration the merits of the discretion exercised by the authority on facts as to whether the defalcations merited supersession of the Committee at all, and whether the decision was taken in hot haste or was politically vindictive or malafide, in view of the remedy of an appeal available under Section 153 of the Gujarat Cooperative Societies Act, I dismiss the petition only on that ground.” 52. It is submitted that this Court had proceeded to dismiss the petition challenging the order under Section-81 only on the ground of alternative remedy available under Section-153 of Gujarat Co-operative Societies Act, 1961. 53. It is submitted that the petition was filed when the matter was at the Show Cause Notice stage, thereafter the matter had proceeded before the District Registrar and culminated in order under Sectoin-81 and Supersession of the Committee members i.e. the petitioners. The petition was amended to bring on record the order under Sccton-81. However, in the entire amendment, there is no challenge to the finding of District Registrar.
The petition was amended to bring on record the order under Sccton-81. However, in the entire amendment, there is no challenge to the finding of District Registrar. The District Registrar has given finding of fact and found the petitioners responsible for 13 serious charges that the petitioners so far not challenge even in this petition. On the face of such order is in existence and not challenged each of the findings which are not only serous but have created big dent in the Society and as society for all the time to come, nature of charges faced on and now proved deficit stock in the Co-operative sector and exhibit the right for which petitioners are squarely responsible. Therefore, the Court may not hand over the right in the hands of such person. 54. It is lastly submitted that the respondent no.2 to 4 are whistleblower who made representation since long about misdeed of the petitioners and consequence adverse effect on the society. The respondent nos. 2 to 4 were never in breach of any provisions of the Act, Rule or bye-laws and neither for their functioning cause any adverse effect on the society. Therefore, it is proved that the role of respondents nos. 2 to 4 though being the Committee members of the Noticee of the Notice under Section-81, may be viewed duly and may not be held responsible as the same would have consequence, for which there is no response. 55. Having considered the rival submissions of the parties and having perused the documents on record, it appears that petitioner No.1 herein is a cooperative society registered under the provisions of the Gujarat Cooperative Societies Act, 1961. The petitioner nos. 2 to 13 are elected Directors of the petitioner no.1 union. The petitioners challenged the Show Cause Notice dated 27-07-2020 issued by the respondent- Registrar, Cooperative Societies, Gujarat State, under Section-81 of the Gujarat Co-operative Societies Act, 1961. The petitioner no.1 is a District Level Milk Producers’ Union which has 1156 member societies affiliated to it. The said member societies are village level milk producers’ societies who have the milk producers / agriculturists as its members and who earn their livelihood by depositing milk everyday. 56. The petition was originally challenging the action of the respondent No.1 in issuing the Show Cause Notice dated 27-07-2020 under Section-81 of the Gujarat Co-operative Societies Act, 1961.
The said member societies are village level milk producers’ societies who have the milk producers / agriculturists as its members and who earn their livelihood by depositing milk everyday. 56. The petition was originally challenging the action of the respondent No.1 in issuing the Show Cause Notice dated 27-07-2020 under Section-81 of the Gujarat Co-operative Societies Act, 1961. While the petition was pending, the respondent No.1 had proceeded to pass an order under Section-81 of the Act and such order dated 05-09-2020 was brought on record of this Court by way of Draft Amendment. The operative part of the order reads as under: ORDER I, D.P. Desai (IAS), Registrar, Co-operative Societies, Gujarat State, Gandhinagar, on the basis of power conferred under Section-81 of the Gujarat State Co-operative Societies Act, 1961, do hereby dismiss the managing committee of the Mahesana District Co-operative Milk Produce Union Limited, Mahesana and appoint Mr. Y.A. Baloch, Designation: Joint Registrar (Commerce), Co-operative Societies, Gandhinagar for one (1) year or till the elected committee assumes office. He shall undertake the procedure under Section-81(3) of the Co-operative Act and further, he shall hand over the charge to the new committee after completing election of the managing committee within aforesaid period. Implementation of this order is kept under abeyance considering S.L.P. No.10351/2020 and I.A. No.87476/2020 filed before the Hon'ble Supreme Court. Further proceedings pursuant to this order shall be undertaken after next adjournment dated 07/09/2020 of S.L.P. No.10351/2020 filed before the Hon'ble Supreme Court. 57. In view of the virtual hearing of the Court, the formalities of carrying out Draft Amendment could not be carried out. However, all the parties were given to understand and agreeable that this amendment is allowed and the order dated 05-09-2020 is also, the subject matter of challenge in this petition. 58. Section-2(a) defines federal society to mean the society of which the Societies are themselves members. Section-2(17) defines the Registrar to mean person appointed by the Registrar of Cooperative Societies under the Act and includes to the extent of the powers of the Registrar conferred on any other person under this Act. As the person includes Additional or Joint Registrar.
58. Section-2(a) defines federal society to mean the society of which the Societies are themselves members. Section-2(17) defines the Registrar to mean person appointed by the Registrar of Cooperative Societies under the Act and includes to the extent of the powers of the Registrar conferred on any other person under this Act. As the person includes Additional or Joint Registrar. 58.1 Section-37 of the Act provides for a society upon its registration to be treated as a body corporate with perpetual succession and a common seal, and with power to acquire, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceeding, and to do all such things as are necessary for the purpose for which it is constituted. 58.2 Section-73 provides for final authority of society, which according to this Section shall vest in the general body of members and general body is supreme in so far as the Society is concerned. The relevant provision for this case is Section-81, which provides for Supersession of Committee and appointment of the Committee or administrator 58.3 Section-81 provides for that the Registrar in Society, does not have the Registrar as its member, the State Government in respective Committee of Society forms an opinion that the Committee persistently makes default or the Committee is negligence in performance of its duties imposed on it under this Act or Rules made thereunder or bye-laws is the Committee has committed act prejudicial to the interest of the Society or its members, then State Government or the Registrar as the case may be. Even 15 days from the date of issue of Notice and after giving an opportunity of hearing of the Committee passed an order in writing to supersede the Committee and appoint the Committee or Administrator, as the case may be. 58.4 Section-81(7) of the Act provides that the where the members of the Committee which is superseded under Section-81(1), such members shall not be eligible to become the members of the Committee of the same society for the period of six years from the date of super-session. 58.5 Section-153 provides for an Appeal. Section-153 states that an Appeal against the order or decision under Section-81 will lie in the facts of the present case before the State Government.
58.5 Section-153 provides for an Appeal. Section-153 states that an Appeal against the order or decision under Section-81 will lie in the facts of the present case before the State Government. 58.6 The petitioner has challenged the Show Cause Notice on the ground of lack of jurisdiction of the Registrar to issue the Show Cause Notice. It is also challenged on the ground that the Show Cause Notice reflects the predetermined mind of the Registrar. Manner and method in adjourning the matter for short dates, despite pending the petition is indicative of bias, the timing of issuing of notice at the fag end of tenure of the Committee is indicative of political intervention. The order dated 07-09-2020 is also the subject matter of challenge on the ground that an action on the part of the respondent No.1 is overreaching the Court and is in complete disregard to the principles of natural justice. 58.7 It would be appropriate to narrate the chronology of the events in tabular form for convenience, which is as under: Date Particular 27-07-2020 Subject Show Cause Notice under Section-81 issued by the respondent- Registrar to supersede the petitioner no.1 – Union. 29-07-2020 Show Cause Notice served to the Managing Director for service to the other elected members / directors. The petitioners received the show cause notice and were asked to reply to the show cause notice on 04- 08-2020. 01-08-2020, 02-08-2020 and 03-08-2020 being the holidays, the petitioners get only 3 days time to reply to the show cause notice. 01-08-2020 Special Civil Application filed challenging the show cause notice in the Hon’ble High Court. 04-08-2020 Registrar is requested for adjournment since show cause notice is challenged in the High Court. Time granted (Next Date 10.08.2020) 06-08-2020 Special Civil Application No.9287 of 2020 registered. 08-08-2020 1st Affidavit on behalf of the State- Reply is filed by the State Government in the SCA. 09-08-2020 Petitioners – Rejoinder filed against the reply filed by the State. 10-08-2020 First Hearing before this Hon’ble Court. Since the entire set of pleadings (Reply and Rejoinder) were not on record of the Hon’ble Court, matter was adjourned. (Next Date 18-08-2020) 2nd Affidavit on behalf of the State- Affidavit filed by the State against the rejoinder filed by the petitioners. Registrar is requested for adjournment since show matter is pending in the High Court. Time granted.
Since the entire set of pleadings (Reply and Rejoinder) were not on record of the Hon’ble Court, matter was adjourned. (Next Date 18-08-2020) 2nd Affidavit on behalf of the State- Affidavit filed by the State against the rejoinder filed by the petitioners. Registrar is requested for adjournment since show matter is pending in the High Court. Time granted. (Next date 14-08-2020) 11-08-2020 Civil Application for joining party filed by the 3 Directors. 14-08-2020 Registrar is requested for time since matter is pending before the Hon’ble High Court. Time granted (Next Date : 21-08-2020) Further Affidavit filed by the Petitioner against the Affidavit filed by the State. Reply filed in the Civil Application for joining. 17-08-2020 3rd Affidavit on behalf of the State- Affidavit in Reply filed by the State against the further affidavit filed by the petitioners. 18-08-2020 2nd Hearing before this Hon’ble Court. Sine the reply filed by the petitioners in the Civil Application for joining was not on record, matter came to be adjourned. (Next date 20-08-2020) 19-08-2020 3rd Affidavit on behalf of the Petitioners- Affidavit in Sur Rejoinder filed by the Petitioner. 20-08-2020 Arguments in Civil Application for joining party concluded (Next Date: 24-08-2020 for orders) and the main petition was adjourned to 27-08-2020 for hearing. 21-08-2020 Registrar is requested for time since matter is pending before the Hon’ble Court. Time granted (Next date : 26-08-2020) 24-08-2020 Civil Application for joining party allowed by this Hon’ble Court. 4th Affidavit filed by the State- Sur Rejoinder filed by the State. 26-08-2020 Registrar is requested for time since matter is pending before the Hon’ble High Court. Time granted (Next date: 29-08-2020) 27-08-2020 4th Affidavit filed by the petitioners – Additional Affidavit filed by the petitioners. 5th Affidavit filed by the State- Additional Affidavit filed by the State. Order of Hon’ble High Court for supplying documents and filing reply to the show cause notice before the respondent – Registrar, if any, without prejudice to the rights and contentions of the petitioners. 28-08-2020 Review Application filed against the order passed in Civil Application for joining party since the case law cited by the petitioners were not considered. 29-08-2020 Registrar- Application for getting documents as per the order of Hon’ble High Court. 31-08-2020 Registrar- Documents supplied as per the order of Hon’ble High Court.
28-08-2020 Review Application filed against the order passed in Civil Application for joining party since the case law cited by the petitioners were not considered. 29-08-2020 Registrar- Application for getting documents as per the order of Hon’ble High Court. 31-08-2020 Registrar- Documents supplied as per the order of Hon’ble High Court. 02-09-2020 SLP filed before the Supreme Court against the order of Hon’ble High Court dated 27-08-2020 03-09-2020 Copy of the SLP served on the Advocate on Record for the State since the Caveat was filed by the respondent – Registrar. 04-09-2020 Registrar is requested for time since matter is pending in the High Court and the order of Hon’ble High Court dated 27-08- 2020 is challenged before Hon’ble Supreme Court and also informed that matter is coming upon 07-09-2020. Despite the fact that the entire set of the SLP is served upon the advocate for the Registrar in the Supreme Court, application preferred by the petitioners came to be rejected at 7.30 PM and oral hearing/ submission kept on 05-09-2020 at 3.00 PM 04-09-2020 IA No. 87476 of 2020 filed in the Supreme Court against the development took place on 04-09-2020 before the Registrar. 05-09-2020 Letter of the AOR of petitioner practicing in the Supreme Court requesting the respondent – Registrar to defer the hearing in view of the fact that matter is to be listed before the Hon’ble Supreme Court on 07-09-2020. 05-09-2020 Registrar is requested for time since matter is pending in the High Court and the order of Hon’ble High Court is challenged before the Hon’ble Supreme Court and also informed that both the matters are coming upon 07-09-2020. Detailed application given that action of the registrar to proceed with the hearing of the matter amounts to overreaching of the process of the Court and amounts to contempt of Court. However, application rejected at 6.30 PM. Application given by the petitioners at 6.35 PM to the respondent – Registrar to not to proceed with the final order since the office hours are over and requested to inform the next date of proceedings. The advocate of the petitioners were told to leave and were not told that order would be passed by the registrar. 05-09-2020 Final Order under Section-81 passed by the Registrar. Order is passed after the office hours as it records rejection of application which was passed at 6.35 PM.
The advocate of the petitioners were told to leave and were not told that order would be passed by the registrar. 05-09-2020 Final Order under Section-81 passed by the Registrar. Order is passed after the office hours as it records rejection of application which was passed at 6.35 PM. Y. A. Baloch is appointed as an Administrator. 07-09-2020 Order of the Hon’ble Supreme Court. Since the Show Cause Notice is pending before the Hon’ble High Court said SLP came to be disposed off with directions that the High Court shall decide the pending application as expeditiously as possible. 07-09-2020 Order of Hon’ble High Court granting liberty to the parties to place on record subsequent events which have been taken place during the pendency of the petition. Charge taken over by the Administrator. 10-09-2020 High Court. Review Petition filed by the petitioners is rejected. 15-09-2020 6th Affidavit filed by the State- Further Affidavit by the Registrar in response to the amended portion of the captioned petition. 16-09-2020 5th Affidavit filed by the petitioners- Affidavit in rejoinder to the further affidavit by the Respondent No.1 59. The petitioners have challenged jurisdiction power of respondent No.1 to issue the Show Cause Notice is based on arguments that by virtue of amendments, Chapter IX-B was narrated in the Constitution of India and Article-243ZL, which provides that supersession and suspension of Board and interim arrangement. However, proviso of this Section is that the Board of any such Cooperative Society shall not be superseded or kept under suspension, where there is no Government share-holding or loan or financial assistance or any guarantee by the Government and as there is no financial assistance by the Government to the petitioner- Society. In view of the Article-243ZL, the Registrar has no power. However, reference be made to the decisions of this Court in the case of Rajendra N. Shah v. Union of India reported in 2013 (2) GLR 1698 , which has struck down the constitutional amendment. In this judgment, the Court finds that one of the basic structure of the constitution viz. the principles of federalism has been affected. There is no dispute that the federalism is one of the basic structures of our constitution.
In this judgment, the Court finds that one of the basic structure of the constitution viz. the principles of federalism has been affected. There is no dispute that the federalism is one of the basic structures of our constitution. Once the subject of cooperative societies is in the List-II of the 7th Schedule by depriving of the State Legislature of their free exercise of right to enact on the said subject and by curtailment of their right over the subject matter of abide by newly enacted provision of the Constitution without follows requirement of rectification as provided in Article-368(2) the doctrine of federalism which is one of the basis features of the Constitution has been infringed. Therefore, the Court proceeded to declare that the Constitution (97th Amendment Act, 2011) in certain Part IXB contending Article-243ZH to Article-243ZT including Article- 243ZL as ultra vires Constitution for not taking recourse of Article-368(2) of the Constitution of India. It has come on record that the judgment of Rajendra N. Shah v. Union of India (supra) is the subject matter of challenge in Civil Appeal No.9108 and 9109 of 2014 before the Apex Court by the Union of India, which is still pending. The petitioners have produced the order-sheet of the Apex Court at Annexure-F. However, there is nothing on record to indicate that the Apex Court has stayed the operation of the order of this Court in case of Rajendra N. Shah v. Union of India (supra), it is argued that on behalf of the petitioners that in a decision of the Apex Court in the case of Vipulbhai M. Chaudhary vs. GCMFL reported in (2015) 8 SCC 1 , the decision of Rajendra N. Shah v. Union of India (supra) is impliedly overruled. As in this case, the Apex Court is extensively relied upon the provisions of the Amendment Act and therefore, the Amendment Act is required to be treated as if it is in existence on the statute book. It is however, pertinent to note that the Division Bench of this Court in the very case of the present petitioners, Mehsana District Milk Producers Union Ltd. v/s. Registrar Cooperative Societies passed in Letters Patent Appeal no. 887 of 2017 dated 03/05/2018, has dealt with this contention and the Division Bench has held in this regard in Para-13 as under: “13.
887 of 2017 dated 03/05/2018, has dealt with this contention and the Division Bench has held in this regard in Para-13 as under: “13. The contention raised by the learned counsel appearing for the petitioners that though 97th Constitutional amendment is set aside by the Division Bench of this Court in the case of Rajendra N. Shah V/s. Union of India (supra), the very 9th Constitutional amendment has been relied upon by the Honourable Supreme Court in the case of Vipulbhai M. Chaudhari V/s. Gujarat Cooperative Milk Marketing Federation Limited (supra) wherein in various paragraphs, the Honourable Supreme Court has specifically placed reliance upon the 97th Constitutional amendment. Thus, the judgment rendered by the Division Bench of this Court in the case of Rajendra N. Shah V/s. Union of India (supra) is impliedly overruled. We are of the view that the said contention is misconceived because against the decision rendered by the Division Bench of this Court in the case of Rajendra N. Shah V/s. Union of India (supra), Special Leave Petition (C) Nos.2526625267 of 2013 are pending before the Honourable Supreme Court and the Honourable Supreme Court issued notice in the said matters. However, no stay is granted. As per the submission canvassed by the learned Additional Advocate General, the said Special Leave Petitions are pending before the Honourable Supreme Court till date. Thus, in absence of any stay granted by the Honourable Supreme Court, reliance placed in the case of Vipulbhai M. Chaudhari V/s. Gujarat Cooperative Milk Marketing Federation Limited (supra), is misconceived.” 60. The decision of the Division Bench in Mehsana District Milk Producers Union Ltd (supra), is also the subject matter of SLP wherein question of law raised includes that where the judgment of Rajendra N. Shah v. Union of India (supra) wherein the Gujarat High Court has struck down the 97th Constitutional Amendment is impliedly overruled. In view of the subsequent judgment in case of Vipulbhai Mansinhbhai Chaudhary (supra) is very much question which is pending consideration before the Apex Court. However, the questions in the aforesaid SLP, is where the proviso to Article- 243ZL of the Constitution of India, the Board of Cooperative Societies in which the State Government has not subscribed to the share capital or has not granted any loan or financial assistance or has not given any guarantee, can be superseded or not.
However, the questions in the aforesaid SLP, is where the proviso to Article- 243ZL of the Constitution of India, the Board of Cooperative Societies in which the State Government has not subscribed to the share capital or has not granted any loan or financial assistance or has not given any guarantee, can be superseded or not. From the record, it appears that the Apex Court has tagged the aforesaid SLP along with Civil Appeal No.9108 and 9109 of 2014. 61. The issue with regard to the lack of jurisdiction of the Registrar on the ground of the Registrar himself being the Committee Member again this issue was also raised before the Division Bench in the case of Mehsana District Milk Producers Union Ltd. (supra), subsequently raised and the Division Bench has dealt with the same as under: “9. The contention of the learned counsel for the petitioners that the District Registrar is on the Board of the Directors of the Union as Nominee of the Registrar, therefore, he cannot inquire into any affairs and he cannot submit a report. Further, reliance is placed on the Government Resolution dated 15.04.2005 and Notification dated 26.04.2005 issued by the Government whereby it was resolved that in the society where the Registrar is a Member of the Board of Directors, a separate committee is constituted to exercise powers of the Registrar under various sections including Section 81 of the Act. Thus, the Registrar is acting as a Judge of his own cause. The said submission is misconceived. The District Registrar is one of the Directors and does not preclude the Registrar of Cooperative Societies to initiate proceedings under Section 81 of the Act. If the proposition as canvassed is accepted, every cooperative society would frame byelaws making such prescriptions for the District Registrar as Board of Directors and the operation of Section 81 of the Act would, in such case, become complex, which can never be the intent of the statutory provisions. 10. It is further required to be noted that Government Resolution dated 15.04.2005 was issued in pursuance to Rule 39B of the Rules. However, Rule 39B of the Rules applies to the Federal Cooperative Societies registered under the Act and specified in table below the said Rule and for supervision of such Federal Cooperative Societies, committee is constituted.
10. It is further required to be noted that Government Resolution dated 15.04.2005 was issued in pursuance to Rule 39B of the Rules. However, Rule 39B of the Rules applies to the Federal Cooperative Societies registered under the Act and specified in table below the said Rule and for supervision of such Federal Cooperative Societies, committee is constituted. If we carefully examine the table given below the said Rule, it is revealed that twelve Federal Cooperative Societies are referred in the said table. However, the petitioner Union, which is a Milk Cooperative Society, is not mentioned in the said list. Thus, Circular dated 26.04.2005 and Government Resolution dated 15.04.2005 would not be applicable to the facts of the present case.” 62. This issue is also raised as the question of law as to whether the Registrar who has nominated the nominee in the Board of Directors of the Union in terms of the Rule-35 of the bye-laws can himself inquiring decision of the Board of Directors as the same is barred by the principles of “Nemo judex in causa sua”. In view of the aforesaid position of the issue being still at large before the Apex Court. However, the categoric findings given by the Division Bench of this Court, the Court is inclined to accept the reasoning of the Division Bench in this regard. Therefore, this Court is of the view that the jurisdiction of the Registrar under Section-81 cannot be treated to be barred in view of the Constitutional Amendment inserting Article-243ZL on the principles of “Nemo judex in causa sua”. 63. As the issue of applicability of Article-243ZL to this case in view of the decision in case of Rajendra N. Shah (supra) and the fact that the issue of ratio of Rajendra N. Shah (supra) being impliedly overreached by the Apex Court in Vipulbhai Chaudhary (supra) was also raised and dealt with by Division Bench of this Court in the L.P.A. of the very Petitioner and in challenge to such decision the very Petitioner has raised the issue of "implied over reaching" before the Apex Court and which is still pending.
This Court does not deem it fit to enter in the contentions and counter contentions raised in this regards including the contention of Respondents that even if Article- 243ZL is treated to be applicable there is sufficient evidence to establish the States financial support to Petitioner - Society through various schemes. The other reason for not entering the same is this would be a question of fact which may require some amount of evidence to establish the same after an opportunity to other side to counter it. 64. Submission made by the petitioners that the issue of the Constitutional Amendment as well as the jurisdiction of the Registrar under Section-81 on the ground of the Registrar being the nominee, may not be required to be considered. In view of the decision of this Court in the case of Mehsana District Milk Producers Union Ltd. (supra), the contention raised is with the applicability of Article-243ZL under the Constitutional Amendment. The Division Bench in this judgment, has already pronounced upon both the issues, though the same is the subject matter of challenge before the Apex Court and specific question of law to that effect, have also been framed. However considering the interim prayer prayed for in the petition before the Apex Court and the indulgence granted by the Apex Court to the limited extent only. Therefore, this Court is of the view that the decision of this Court in the case of Mehsana District Milk Producers Union Ltd. (supra) will have to be treated to have the binding effect on this Court. Therefore, it would be an impropriety to bye-pass the judgment of the Division Bench of this Court, merely on the ground that the specific issue has been raised in the challenged to the judgment of the Division Bench, unless the operation of such judgment is expressly stayed. On the issue of binding effect, this Court would draw the support from the decision of the Apex Court in the case of Ram Jankijee Deities & Ors vs. State Of Bihar And Ors reported in (1999) 5 SCC 50 , wherein the Apex Court has said that the Single Judge should follow the binding precedent of earlier judgment of the Division Bench from the same Court. 65.
65. The Court has considered the nature of allegations in the Show Cause Notice which are 13 in numbers and each of them is an independent charge against the Committee. The nature of charges are rather serious and would affect the structure of the petitioners-societies itself and therefore, the Court is of the view that the charges constituted under the Show Cause Notice are the charges which are covered under the 3 clauses under Section-81 of the Act and therefore, are required to be inquired into in accordance with law. Submission of the petitioners that the provision of the Gujarat Co-operative Societies Act, 1961 provided for independent action with respect to the each of the charge and that such action is already undertaken by the Authorities, cannot be accepted as Section-81 of the Act, the proceedings therein are completely independent proceedings and the consequence of such proceedings are also independent. 65.1 The contention of the petitioners to treat the charges to be premature on the ground that in each of the charge the Authorities have not arrived at definite conclusion of fixing the responsibility on the petitioners and the Committee members, cannot be considered in favour of the petitioners as Section-81 of the Act does not contemplate the requirement of definite conclusion before issuing the Show Cause Notice. The opinion is required to be formed by the Authority in the interest of the Society as to whether the functioning of the Committee is persistently in default, negligence in performance of its duties or the Act prejudicial to the interest of the Society or its members. Once the Authority is of the opinion based on substantial grounds or supporting evidence cause for issuing Show Cause Notice would arise. 66. The Court may examine now the case from the point of view of procedural propriety and following principles of natural justice while passing the order dated 07-09-2020. The Gujarat Co-operative Societies Act, 1961 is the complete Act making provision for contingency envisaged in the functioning of the Gujarat Co-operative Societies Act, 1961. The Act also provides for remedies available. In the facts of this case, the Show Cause Notice under Section-81 which specifies the manner and method, but also contingency for which the Section-81 can be invoked. The Act under Section- 153 provides for remedy of appeal for any person aggrieved by decision taken under Section-81.
The Act also provides for remedies available. In the facts of this case, the Show Cause Notice under Section-81 which specifies the manner and method, but also contingency for which the Section-81 can be invoked. The Act under Section- 153 provides for remedy of appeal for any person aggrieved by decision taken under Section-81. This being the position, the Court deems it fit not to interfere with the Show Cause Notice and holds that the Show Cause Notice dated 27-07-2020 under Section-81 of the Act. 67. The language of Section-81 envisages the issuance of the Notice and an opportunity of being heard and thereafter, the Authority can supersede the Committee and appoint the Administrator. Consequence of the decision under Section-81 is also having impact on the eligibility of the Committee member to once again to become the members of the Committee of the same Society for the period of six years, which according to the Court is a grave consequence and therefore, the principles of natural justice have to be given wide application. As observed in the preceding paras in the chronology of events, admittedly there is no reply filed by the petitioners on the merits against the charges of the Show Cause Notice. Rightly or wrongly the petitioners had agitated issuance of the Show Cause Notice including on the ground of jurisdiction before this Court. This Court was in active consideration of the matter. Not only that it was brought to the notice of the Registrar that the petition before the Apex Court is also filed and adjournment was sought on 04-09-2020 giving an application in detail. Apparently, this application was not accepted and while not accepting application reasons cited is the order of this Court dated 27-08-2020 to be mandate to file reply on 04-09-2020 and upon failure to do so, apparently right to file reply was closed. The matter was posted on 05-09-2020 with permission to make oral representation / arguments at 15.00 hours. It is pertinent note that on 05-09-2020 was Saturday and on that day, another detail application was filed by the petitioners referring to the petition filed by the Apex Court where the cause of action to challenge the order dated 27-08-2020 and that such matter was to be heard by the Apex Court on 07-09-2020.
It is pertinent note that on 05-09-2020 was Saturday and on that day, another detail application was filed by the petitioners referring to the petition filed by the Apex Court where the cause of action to challenge the order dated 27-08-2020 and that such matter was to be heard by the Apex Court on 07-09-2020. Despite this position, the respondent No.1 has not only rejected the application dated 05-09-2020, but as seen from the record, from Annexure-V and Annexure-W dated 05-09-2020 indicating that in absence of any interim order and the fact that the petitioners have not filed their reply on previous dates of adjournment and that no oral arguments have been offered, the Registrar deemed it fit not to postpone the proceedings any further and rejected the application. The Advocates appearing for the petitioners have recorded time of such order when the same was handed over to the petitioners’ counsel to be 6.25 pm to 6.30 pm. Thereafter, an application at 6.35 pm is given by the petitioners requesting for the date on which the proceedings would be adjourned. Till such time, there is no reference made by the respondent No.1 to any order under Section-81. 68. Special Leave to Appeal No.10351 of 2020 before the Apex Court was listed on 07-09-2020, wherein the Apex Court passed an order which has reproduced herein below: “As the writ petition filed against the show cause notice dated 27-07- 2020 is pending consideration of the High Court, we are not inclined to interfere in this matter which is filed against an order dated 27-08-2020 by which the concerned authority was directed to provide the documents to the Petitioner and the Petitioner was permitted to file a reply on 04.09.2020. It is made clear that we have not expressed any view on the submissions made by Mr. Mukul Rohatgi, learned senior counsel for the petitioner and learned Solicitor General for the State of Gujarat. Needless to state that the High Court shall decide the pending applications expeditiously. Special Leave Petition is disposed of.” 69. Therefore, the Apex Court also took note of pending proceedings before this Court and order for expeditious decision.
Mukul Rohatgi, learned senior counsel for the petitioner and learned Solicitor General for the State of Gujarat. Needless to state that the High Court shall decide the pending applications expeditiously. Special Leave Petition is disposed of.” 69. Therefore, the Apex Court also took note of pending proceedings before this Court and order for expeditious decision. In this face of this facts, the impugned order dated 05-09-2020 surfaces and the operative portion produced in the preceding paras, the last portion of such order curiously indicates that though the order is dated 05-09-2020, the same is to be made operational, the same stands pending as the S.L.P. No.10351 of 2020 is filed and further proceedings are to take place after 07-09-2020, the date on which S.L.P. No.10351 of 2020 is to be listed. This factor singularly is sufficient to conclude attempt on the part of the respondent No.1 overreaching the process of this Court as well as the Apex Court. It is not necessary for this Court, therefore, to go into the merits / demerits of the charges and findings of the respondent No.1. However, when the Court peruses the impugned order and compares the same with the language in the Show Cause Notice, the Court cannot come to any other conclusion, but the proceedings undertaken and the impugned decision given by the respondent No.1 is merely empty formality. 70. Principles of natural justice are required to be observed in letters and spirit. Especially when the charges are serious and the consequence are gross. The Chronology of events indicates that the respondent has though adjourned the proceedings on account of the pendency petition, but such adjournment were granted coinciding that the dates of adjournment before this Court. The Court did not find anything on record to suggest any justification for short adjournments, when the matters were pending before this Court and the Apex Court and thereafter, the proceeded to pronounce the impugned decision. Closure scrutiny of the adjournments of proceedings, which also indicates that this Court by order dated 27-08-2020 had given timeline based on the grievance raised by the petitioners regarding documents not available and last timeline was to end on 04-09-2020, which was the date for filing the reply before the Authority, if any and the main matter was to be listed on 07-09-2020, whereas the order impugned is based on 05- 09-2020 and that to definitely after 6.30 pm.
This chronology clearly indicates that the respondent has failed to provide sufficient opportunity to the petitioners to file their respective reply to the charges in the Show Cause Notice. The petitioners were also depriving of an opportunity of hearing and that to on the pretext of directions of this Court, which is not justified and acceptable. Action as indicated above, also suggest of hasty manner in which proceedings were sought to be sought short-circuited to reach to conclusion which the respondent had apparently arrived at even before due course of process, has taken place. 71. One more factual aspect which indicates impropriety and over-reaching the process of Court is the Communication dated 16-09-2020 produced with Affidavit in Rejoinder to further Affidavit filed by the respondent No.1, wherein after Administrator was appointed, had issued the Communication dated 16- 09-2020 to the Advocate on behalf of the petitioner that the present Special Civil Application filed on behalf of the petitioner No.1- Milk Union is to be withdrawn. The Administrator who took the charge on 07-09-2020, when already the petition was filed and was being actively under consideration, at that stage, issuing the Communication of 16-09-2020 for withdrawing the petition was unwarranted. This Communication is seen in isolation, may appear to be innocuous, but when viewed with the chronology of event, is set out in the preceding paras, the impropriety and the blatant attempt to overreach the proceedings before the Court is very clear. Analysis of the judgments cited by the parties vis. a vis. Facts of the case: 72. On behalf of the learned Advocate for the petitioners – Milk Union, reliance is placed upon in the case of Oryx Fisheries Pvt.Ltd vs. Union Of India reported in 2010 (13) SCC 427 contending that the Show Cause Notice issued itself is suggesting the prejudged mind. Learned Advocate referred to Para-24 and Para-29 and Para-31 in support of this argument. 73. Learned Advocate for the respondents submitted that the language of the Show Cause Notice itself indicate that the Notice is issued with prejudged mind. Drawing attention to Para-21 particularly the language in the Show Cause Notice which mentioned that it was convincingly proved that a “Cargo shipped by you to the above mentioned buyer was defective and you have not so far as settled the complaint.
Drawing attention to Para-21 particularly the language in the Show Cause Notice which mentioned that it was convincingly proved that a “Cargo shipped by you to the above mentioned buyer was defective and you have not so far as settled the complaint. With such kind of findings in the Show Cause Notice, the Apex Court has concluded the prejudged mind. Whereas in the present case, the language of the Show Cause Notice particularly in the last para indicates that the observations made in 13 irregularities were prima facie in nature. The Apex Court in this judgment has held that the quashi judicial Authority while acting in this statutory power is expected to act fairly and with an open mind, while initiating the show cause proceedings. The show cause proceedings are meant to give the persons reasonable opportunity to offer explanation against the charges. So that such person can take his defense and prove his innocence and that he does not accept the charges in the charge-sheet. Instead of informing about the charges, the person is confronted with the definite conclusion of guilt and therefore, the Show Cause Notice can be said to be vitiated. However, in Para-31 of this judgment, the Apex Court has said that the Show Cause Notice is not required to be read in hyper-technical manner and it is well settled that the same is to be reasonable. What is required is that while reading the Show Cause Notice the person who is subjected to the Show Cause Notice, has to get an impression that he will be provided with effective opportunity of rebutting the allegations contained in the Show Cause Notice and prove his innocence. 74. The reading of the Show Cause Notice in the opinion of the Court is not of such nature that the person with ordinary prudence will get an impression that the content of the Show Cause Notice is final conclusion and that the procedure adopted after the Show Cause Notice would be empty ceremony. The Court is of the view that merely use of certain words in the Show Cause Notice, which expresses an understanding of the person issuing the Show Cause Notice about the charge cannot be considered, to infer foregone conclusion, when expressly the Show Cause Notice called upon the Noticee to reply to the charges. 75.
The Court is of the view that merely use of certain words in the Show Cause Notice, which expresses an understanding of the person issuing the Show Cause Notice about the charge cannot be considered, to infer foregone conclusion, when expressly the Show Cause Notice called upon the Noticee to reply to the charges. 75. Learned Advocate for the petitioners – Milk Union has relied upon another judgment in the case of M/S. Siemens Ltd. vs. State Of Maharashtra reported in 2006 (12) SCC 33 , on the issue of prejudged mind in the Show Cause Notice itself. The Apex Court was examining an issue with regard to whether Article-226 could be invoked to interfere with the demand directing the payment of cess. In that regard whether the conclusion was already drawn about the liability but only quantification was for consideration in the Show Cause Notice and therefore, the Apex Court relying upon the counter affidavit filed by the respondents before it expressed its satisfaction that when the liability is already been determined upon application of mind and mere quantification would therefore, would not remain in the realm of the Show Cause Notice. Therefore, the writ petition was held to be maintainable. Such is not the facts in the present case, as the exercise of application of mind pursuant to the Show Cause Notice was yet to take place and therefore, the Show Cause Notice in the present case, cannot be said to have been issued with prejudged mind. 76. Learned Advocate for the petitioners – Milk Union has placed reliance upon the judgment in the case of M/S. Siemens Aktiengeselischaft and S. Ltd.. vs Dmrc Ltd. reported in 2014 (11) SCC 288 . Reliance is placed on Para-26 and Para-27 to contend that the decision of the Registrar after the Show Cause Notice is over-reaching the process of Court in as much as though the subject matter was subjudice, the Registrar has proceeded to pass the impugned order.
vs Dmrc Ltd. reported in 2014 (11) SCC 288 . Reliance is placed on Para-26 and Para-27 to contend that the decision of the Registrar after the Show Cause Notice is over-reaching the process of Court in as much as though the subject matter was subjudice, the Registrar has proceeded to pass the impugned order. Learned Advocate for the respondent submitted that no reliance could be placed on this judgment as the issue before the Apex Court was with regard to the fair equitable and fair tender process and the Government had proceeded to take decision even when the High Court had pronounced upon the validity of the procedure adopted by the DMRC and the act of the continuing of the process of review even if the High Court had delivered its judgment amounting to subject of judicial pronouncement to administrative review. From the record and the chronology of the present case, undoubtedly the Show Cause Notice was under challenged including on the ground of the jurisdiction of the Registrar to issue the Show Cause Notice on various grounds. The reading of the impugned order of Registrar indicates that the issue of jurisdiction of the Registrar was also questioned none the less the same has not been dealt with and answered by the Registrar and therefore in the opinion of the Court, what is held in Para-28 of the judgment in M/S. Siemens Aktiengeselischaft and S. Ltd. (supra), when the Supreme Court observed that suffice it to say what the Government ought to have stayed at once the matter landed in the Court. In such circumstance, the Government did nothing of this kind, if did not act properly. Beyond that we did not consider it necessary or proper to say anything at this stage. In the opinion of the Court this would apply with full force in the facts of this case. Therefore, the decision rendered in this case, would amount to overreaching. 77. Learned Advocate for the petitioners – Milk Union has relied upon yet another judgment in the case of Sujal Leasing and Finance Limited v/s. Pathal Ganga Tube Well reported in 1998 (2) GLH (UJ) 1.
Therefore, the decision rendered in this case, would amount to overreaching. 77. Learned Advocate for the petitioners – Milk Union has relied upon yet another judgment in the case of Sujal Leasing and Finance Limited v/s. Pathal Ganga Tube Well reported in 1998 (2) GLH (UJ) 1. This was the case where an appeal was preferred against the order directing the defendants to restore the possession of the disputed truck to the plaintiff for which the suit was filed for injunction of not taking forcible possession of the truck. However, observing the chronology of the events of the Court, the proceedings and findings that even before the Court could take the decision on an application filed by the plaintiff, the possession of the truck was taken over in high handed and forcible manner and at interim stage, the High Court had concluded that in acting so, the defendants had acted to manner it the decision in the matter subjudice before it and infructuous the whole process by his own act and accordingly, an appeal filed by the defendants were taken the possession of the truck was ordered to be dismissed and status quo qua the possession of the truck was restored. 78. In the present case also, the chronology of the events, would indicate that the matter was not only subjudice before this Court, but even as the SLP was filed before the Apex Court, which had passed an order directing this Court to expeditiously deal with the petition directions and even when the Apex Court was issuing such impugned order came to be passed. Hence also, the order of the Registrar amounts to overreaching. 78.1 The petitioner as cited the judgment in the case of Chandrakant Manibhai Patel v/s. State of Gujarat reported in 2013 (3) GLH 778 . In support of his arguments that entire process by the Registrar was biased. 79. Reliance is placed on unreported judgment of this Court in case of M/s. Maruti Enterprise Through Authorized Partner Jigneshbhai Bharatbhai Tarpara Vs. State of Gujarat passed in Special Civil Application No. 20307 of 2019, dated 22/01/2020, in support of the contention that once the matter is pending before the Court, it was not open for the Authority to enter into the merits of the dispute on the same subject matter.
State of Gujarat passed in Special Civil Application No. 20307 of 2019, dated 22/01/2020, in support of the contention that once the matter is pending before the Court, it was not open for the Authority to enter into the merits of the dispute on the same subject matter. Drawing attention of this Court to Para-18 and Para-19, it is submitted that the Regional Commissioner of Municipalities without affording any opportunity of hearing to the petitioner, who were the successful bidder in the tender process, Regional Commissioner of Municipalities has directed the municipality to consider all the tenders which had been uploaded online with the necessary and genuine documents. Though the successful bidder was the petitioner. 80.1 On behalf of the respondent No.1, attention was drawn to Para-17 and submitted that the observations in Para-18 and Para-19 were made only in the very peculiar facts of the case. The issue before the Division Bench is so challenge to exparte order dated 14-11-2019 passed by the Municipalities directing the petitioner not to carry out any activities based on the ex-parte instructions issued by the Regional Commissioner of Municipalities, wherein he had also threatened the Chief Officer of disciplinary action. The facts of this case, the Court proceeded to held in Para-18, 19 and 20 as under: “18. Thus, though the municipality had placed the legal opinion of the consultant before the first respondent that passing any orders when the matter is sub-judice before the High Court may amount to disrespect of the High Court, the first respondent thought himself to be wiser and has opined that if the tender is opened in accordance with the rules the matter before the High Court may also stand disposed of. What the first respondent has overlooked is that the tender has already been awarded in favour of the petitioner. The petitioner was therefore an affected party. However, without affording any opportunity of hearing to the petitioner, the first respondent – Regional Commissioner of Municipalities has directed the second respondent municipality to consider all the tenders which had been uploaded online with the necessary and genuine documents as eligible and open them.
The petitioner was therefore an affected party. However, without affording any opportunity of hearing to the petitioner, the first respondent – Regional Commissioner of Municipalities has directed the second respondent municipality to consider all the tenders which had been uploaded online with the necessary and genuine documents as eligible and open them. Thus, apart from overreaching the process of this court, by interfering in a matter wherein the subject matter before him and the subject matter before the High Court is the same, such action on the part of the Regional Commissioner of Municipalities, is clearly in breach of the principles of natural justice and instead of bringing an end to the litigation pending before this court, has given rise to another litigation and has burdened this court with yet one more litigation. 19. In the considered opinion of this court, once the matter was pending before this court and was sub-judice, the first respondent Regional Commissioner of Municipalities ought to have stayed his hands and could not have entered into the merits of a dispute which was already subject matter before this court. Till the date when he issued the communication dated 05.11.2019, it appears that the first respondent - Regional Commissioner of Municipalities was not aware of the writ petitions filed by Jay Corporation before this court, however, once this fact was brought to his notice, the first respondent ought to have waited till the outcome of the petitions. However, despite the fact regarding the pendency of the petitions was brought to his notice and the second respondent – municipality had clearly opined that complying with the order dated 05.11.2019 may amount to disrespect of the High Court and informing the first respondent that the legal advisor of the municipality had opined that till the High Court finally decides the proceedings before it, no action should be taken in respect of the tender proceedings; the first respondent, firstly made an endorsement on the letter of the municipality that the municipality be informed that if the tenders are opened in accordance with the rules the matter before the High Court may be disposed of; and thereafter directed the municipality to comply with his instructions dated 05.11.2019 failing which disciplinary action would be initiated against all office bearers/officers concerned, and compelled the second respondent – municipality to issue the impugned letter dated 14.11.2019 though the matter was sub-judice.
By such action, the first respondent – Regional Commissioner of Municipality has not only himself overreached the process of the court, but also compelled the second respondent to do so under threat of disciplinary action. 20. It is settled legal position that a party cannot avail of any remedy in respect of the same cause of action before two different forums. Therefore, once the party namely Jay Corporation had already chosen to avail the remedy before this court by invoking its writ jurisdiction and this court had entertained the petition, the Regional Commissioner of Municipalities, had no authority to thereafter enter into the merits of the case and pass any orders in a matter which was sub-judice before this court. Besides, Jay Corporation had issued a statutory notice to the second respondent – municipality and only endorsed a copy to the first respondent and had not filed any application before the first respondent. Therefore, when pursuant to the statutory notice issued by it Jay Corporation had instituted proceedings in connection with such notice before this court, the first respondent had no authority to thereafter deal with the matter. The impugned communication dated 14.11.2019 passed by the first respondent, therefore amounts to overreaching the process of this court, and is also in breach of the principles of natural justice as the petitioner who is an affected party has not been heard, and hence, cannot be sustained. The impugned order dated 14.11.2019 passed by the second respondent municipality being consequential to the order dated 14.11.2019, passed by the first respondent also cannot be sustained.” 80. The Court is of the view that in the facts of the present case also, the Registrar thought it fit to proceed ahead with the Show Cause Notice, pending the petition and also treated the contention raised in the petition to be the final reply of the petitioner to the Show Cause Notice and thereafter proceeded on merits as if the requirement of following principles of natural justice granting an opportunity of hearing is fulfilled and therefore, while applying the facts and principles in the case of M/S. Maruti Enterprise (supra), the Registrar ought not to have proceeded ahead with the Show Cause Notice in the manner in which he did. 81. On behalf of the respondents, reliance is placed in the case of Madan Kumar Singh (Dead) through LR.
81. On behalf of the respondents, reliance is placed in the case of Madan Kumar Singh (Dead) through LR. v/s. District Magistrate, Sultanpur and others reported in (2009) 9 SCC 79 , to submit that there is no overreaching only on the ground that pending the litigation before the Court of law, the decision has taken. This is a case where an appellant and action prejudicial after having the possession of the truck at belated stage, the respondents did not deliver the necessary documents of the truck depriving the appellant from making commercial use of the truck. Ultimately, the National Commission granted damages to the extent of Rs.25,000/- and with regard to the recovery of documents, the District Magistrate directing to conduct inquiry. When the both the parties moved the Apex Court and under the pretext of pendency of SLP, the respondents did not deliver the documents of the truck. It is in this fact that mere filing of an appeal or suit itself, would not operate as stay. Only specific prayer in this regard is made and order are passed therein was observed by the Apex Court. In the opinion of the Court, this judgment may not apply to the facts of this case as the issue has pointed out pursuing to handing over of the documents of the vehicle, possession of which was admittedly handed over to the appellant. It was only with regard to the documents of the vehicle which were to be decided upon by the District Magistrate upon an inquiry. Therefore, the directions of the forum had already been crystalized and therefore, for not complying with such crystalized order, mere pendency of the litigation would not come in way. In the facts of the present case, the issue was alive and kicking before this Court and it is at this stage, question was whether the Registrar was competent to issue the Show Cause Notice was also under consideration and it is at that stage, the decision was taken for the first time on those issues. 82. On behalf of the respondents, reliance is placed on in the case of H.G.Rangangoud v/s. State Trading Corporation of India Ltd. and others reported in (2012) 1 SCC 297 , it was the case where the appellant had applied for the grant of mining lease, while the State of Karnataka had recommended his case to the Central Government.
82. On behalf of the respondents, reliance is placed on in the case of H.G.Rangangoud v/s. State Trading Corporation of India Ltd. and others reported in (2012) 1 SCC 297 , it was the case where the appellant had applied for the grant of mining lease, while the State of Karnataka had recommended his case to the Central Government. Before the decision on the recommendation, the Central Government had allotted the mining lease in favour of the State Trading Corporation, which was the decision challenged by the appellant before the High Court and succeeded before the Single Judge against which the State Trading Corporation preferring an appeal before the Division Bench, but no interim order was passed and at that stage, the State of Karnataka once again recommended the case of the appellant to the Central Government for granting of mining lease. The State Trading Corporation took out the contempt proceedings on the ground that the appeal was pending before the Division Bench, the State Government ought not to have pursued the case with the Central Government for grant of mining lease. The High Court came to the conclusion that the act of the State amounted to interference with due course of judicial process. Against which an appeal was filed before the Apex Court and in that context, in Para-14, the Apex Court observed the order of the learned Single Judge was not stayed and mere filing of appeal would not operate as stay of order appealed from. However, it is pertinent to observe that the Apex Court in Para-12 and Para-13, as observed as under: “12. From a plain reading of the aforesaid provision it is evident that an act which prejudices or interferes or tends to interfere with the due course of judicial proceeding comes within the mischief of criminal contempt. The power to punish for contempt is inherent in Courts of record and described as a necessary incident to every court of justice. The power is inalienable attribute of court and inheres in every Court of record. This power though inherent to the High Court is given a constitutional status by Article 215 of the Constitution. It is to secure public respect and confidence in the judicial process. 13. Rule of law is the basic rule of governance of any civilized democratic polity.
The power is inalienable attribute of court and inheres in every Court of record. This power though inherent to the High Court is given a constitutional status by Article 215 of the Constitution. It is to secure public respect and confidence in the judicial process. 13. Rule of law is the basic rule of governance of any civilized democratic polity. It is only through the courts that rule of law unfolds its contours and establishes its concept. For the judiciary to carry out its obligations effectively and true to the spirit with which it is sacredly entrusted the task, constitutional courts have been given the power to punish for contempt, but greater the power; higher the responsibility.” 83. Moreover, the Apex Court had also held that mere filing of the representation and making recommendation therein would in any way of prejudice and attempt to interfere with due course of any judicial process. But in attempt to influence, the outcome of the matter pending before the Court to prejudice the parties therein may prejudice or interfere with due course of any judicial proceedings. Therefore, considering what is observed by the Apex Court in Para-13 clearly pertains to the contempt proceedings. 84. On the issue of undue haste, learned Advocate for the petitioners – Milk Union has relied upon the judgment in the case of Uttar Pradesh Jal Nigam v/s. J.P. Gupta reported in 1993 (1) SCC 426 , wherein it is submitted that in that case, the Apex Court felt that the administration ought not to have been acted in haste in appointing the persons including in the panel of selected officers on the basis of recommendation made by the Selection Committee, In the year 1992 before the disposal of pending the appeals before the Apex court, which was considered, the appointment of two other persons made by the Selection Committee constituted in the year 1989, and accordingly, the appointments which were made on the recommendation of the Selection Committee,1992, made during the pendency of the appeals, was made to abide by the result in the appeal. Therefore, the Apex Court had held against the decision of appointing the persons headed by the Selection Committee 1992, while propriety of selection of persons by the Selection Committee, 1985, was still pending.
Therefore, the Apex Court had held against the decision of appointing the persons headed by the Selection Committee 1992, while propriety of selection of persons by the Selection Committee, 1985, was still pending. Under the facts of the present case also, even while the Court was considered the issuance of the Show Cause Notice, the Registrar has proceeded to give final outcome of the Show Cause Notice that to against the petitioners- Milk Union and which had not only consequence of superseding the Committee, but also the consequence of debarring the petitioners- Milk Union by operation of law for a particular period. Therefore, the respondents have acted in haste. 85. Learned Advocate for the petitioners – Milk Union has relied upon the judgment in the case of Fuljit Kaur v/s. State of Punjab reported in 2010 (11) SCC 45502, contending that when on the timeline, the Registrar has acted in haste, in the face of pending petition, malafide will have to be presumed. Reliance is placed on Para-26 to which on behalf of the respondents, it is submitted that the observance of the Apex Court is in special facts of the case and cannot be applied generally. In Para-26, in this judgment, the Apex Court was considered the allotment of residential plot where the allotment letter in favour of the appellant was made even of 48 hours of submission of an application and the subject matter of litigation was when the authority made an additional demand under the Demand Notice, the challenge was made that an additional demand was arbitrary and unreasonable. The High Court has taken into consideration the difference between the provision of price and tentative price justified the demand and therefore, in Para-26, which was observed that making allotment in haste manner itself, was arbitrary and unreasonable and hit by Article-14 of the Constitution of India and after considering the several judgment of the Apex Court, the constitutional holding "when a thing is done in a post-haste manner, malafide would be presumed." Anything done in undue haste can also be termed as "arbitrary and cannot be condoned in law." Thereby holding the allotment of residential plot has been made in arbitrary and unreasonable manner was already to be liable to be declared as such. However, the Apex Court did not take any drastic steps in view of the subsequent developments made by the appellant on land.
However, the Apex Court did not take any drastic steps in view of the subsequent developments made by the appellant on land. 85.1 In the present case also, the chronology of event, supporting from the issuance of the Show Cause Notice to grant of frequent adjournment of short dates and in the findings of pending petition before this Court as well as before the Apex Court, the decision was taken by the Registrar. Also, the manner in which the petitioners – Milk Union were called upon to respond to the charges, the Court is of the view that the respondents have acted with undue haste. 86. On behalf of the respondents to support the contention that the Registrar has not acted in haste merely because he has acted promptly in passing the order of supersession immediately after the times of hearing was over at 6.30 pm on 05-09-2020 itself. Learned Advocate for the respondent relied upon the judgment in the case of D. Subba Raju and others v/s. Chief Secretary of Andhra Pradesh reported in 1985 (1) SCC, 523, drawing attention to the observation made in Para-13 to the facts that the decision which are taken promptly, cannot be assumed to be bad because they are taken promptly and that every decision has to be examined on its own merits in order to determine where it is arbitrary or unreasonable. The observation of the Apex Court was in connection with the issue raised by the petitioners regarding the State Government issuing the order reducing the age of retirement even one month of the assumption of office by the new Government, wherein it was alleged that the no scientific investigation could have been made, no material gathered of statistic comply or the consequence of such grave decision was considered by the Government. The decision pertaining reducing of age of retirement from 58 years to 55 years was taken by the State Government even one month of its assumption. Due to the decision taken even one month of assumption, the Apex Court did not agree to such preposition and therefore, proceed to observe in Para-13 as under: “Were this so, every decision taken by a new Government soon after assumption of office shall have to be regarded as arbitrary. The reasonableness of a decision in any jurisdiction, does not depend upon the time which it takes.
The reasonableness of a decision in any jurisdiction, does not depend upon the time which it takes. A delayed decision of the executive can also be bad as offending against the provisions of the Constitution and it can be no defense to the charge of unconstitutionality that the decision was taken after the lapse of a long time. Conversely, decisions which are taken promptly cannot be assumed to be bad because they are taken promptly. Every decision has to be examined on its merits in order to determine whether it is arbitrary or on its own merits in order to determine whether it is arbitrary or unreasonable.” 86.1 In the opinion of the Court, the observance of the Apex Court could not be made applicable to the facts of this case, especially, when the observation of the Apex Court regarding the promptness decision was to point out the situation converse to the conclusion made by the Apex Court in the facts of that case. 87. Learned Advocate for the respondent has relied upon the judgment of the Apex Court in the decision of the Apex Court in the case of Chairman & MD, BPL Ltd. v/s. S.P. Gururaja and others reported in (2003) 8 SCC 567 , reliance is placed on Para-34 and Para-35. 87.1 The Issue before the Apex Court wherein the facts of Karnataka Industrial Area Development Board acquired a vast tract of land inter alia for the purpose of allotment thereof to entrepreneurs who intended to set up industries in the State of Karnataka and the decision of the State of Karnataka with a view to accelerate economic development of the State adopted a policy decision of dealing with the applications received from the entrepreneurs through single window system, which decision was the subject matter of challenge in the Public Interest Litigation on the ground that the statutory purposes for which the Board can acquire the land had been breached and the procedure of allotment was against the public interest and suffered from mala fide and suffered from legal malice. In Para-34 and Para-35, the Apex Court has held as under: “34. Undue haste also is a matter which by itself would not have been a ground for exercise of power of judicial review unless it is held to be malafide.
In Para-34 and Para-35, the Apex Court has held as under: “34. Undue haste also is a matter which by itself would not have been a ground for exercise of power of judicial review unless it is held to be malafide. What is necessary in such matters is not the time taken for allotment but the manner in which the action had been taken. The court, it is trite, is not concerned with the merit of the decision but the decision making process. In absence of any finding that any legal malice was committed, the impugned allotment of land could not have been interfered with. What was only necessary to be seen was as to whether there had been a fair play in action. 35. The question as to whether any undue haste has been shown in taking an administrative decision is essentially a question of fact. The state had devolved a policy of Single Window System with a view to get rid of red- tapism generally prevailing in the bureaucracy. A decision which has been taken after due deliberations and upon due application of mind cannot be held to be suffering from malice in law on the ground that there had been undue haste on the part of the State and the Board. (See Bangalore Medical Trust vs. B.S. Muddappa and others 1991 (4) SCC 54 and Pfizer Ltd. vs. Mazdoor Congress and others 1996 (5) SCC 609 ).” 87.2 Therefore, when the Apex Court was considering the policy decision of the State Government in developing the single window system with a view to get rid of red- tapism, then such decision which is the policy decision taken after due deliberation and upon due application of mind, cannot be suffered from malice. On the ground that it has been taken in undue haste. Such are not facts in the present case, where it is not a policy decision of the State Government, the decision in due process under the provision of the Act. In this very judgment in Para-34, the Apex Court has clarified that what is necessary is not the time taken for allotment but the manner in which the action had been taken. In the present case also, what is in consideration before this Court is manner and method in which decision is arrived at by the Registrar. 88.
In this very judgment in Para-34, the Apex Court has clarified that what is necessary is not the time taken for allotment but the manner in which the action had been taken. In the present case also, what is in consideration before this Court is manner and method in which decision is arrived at by the Registrar. 88. Learned Advocate for the respondents have also relied upon CAV Order dated 20-12-2019 passed in Special Civil Application No. 20711 of 2019 in the case of Dashrathbhai Jethabhai Patel v/s. State Of Gujarat. In this decision question before the Court was to interfere with the order of the State Government in superseding the APMC on the ground the order suffering with malafide or passed in violation of principles of natural justice. After recording the chronology and on facts, it was concluded that the chain of events indicate that no fault can be found for the petitioners to say that the State has scuttled their process of hearing and violated the principles of natural justice. The facts of the case would not be applicable to the case as the facts in the present case, appears to be converse and the petition was still pending with the decision was taken in this case. 89. With regard to the duties of the statutory functionaries namely the Registrar, the petitioners have relied upon in the case of State of Madhya Pradesh v/s. Sanjay Nagayach reported in 2013 (7) SCC 25 , contend that the Registrar has acted under undue external influence and has acted with preconceive and has acted as tool of the State Government to oust the elected body on behalf of the respondents. It is submitted that the charges against the petitioners are very serious and that in the facts of this case, 7 charges leveled against the Board of Directors were relating to the period under the tenure of previous committee for which the present Board of Directors could not be held responsible. In such facts, ratio in this case, could not be made applicable. None the less, it is important for the Court to reproduce the Paras of this judgment and held as under in Para-27, 28, 29 ad 30. “27.
In such facts, ratio in this case, could not be made applicable. None the less, it is important for the Court to reproduce the Paras of this judgment and held as under in Para-27, 28, 29 ad 30. “27. The High Court, in our view, has therefore rightly exercised its jurisdiction under Article 226 of the Constitution and the alternative remedy of appeal is not bar in exercising that jurisdiction, since the order passed by the Joint Registrar was arbitrary and in clear violation of the second proviso to Section 53(1) of the Act. 28. We are of the view that this situation has been created by the Joint Registrar and there is sufficient evidence to conclude that he was acting under extraneous influence and under dictation. A legally elected Board of Directors cannot be put out of the office in this manner by an illegal order. If the charges levelled against the Board of Directors, in the instant case, were serious, then the Joint Registrar would not have taken two and half years to pass the order of supersession. State of Madhya Pradesh did not show the grace to accept the judgment of the Division Bench of the High Court and has brought this litigation to this Court spending huge public money, a practice we strongly deprecate. 29. Statutory functionaries like Registrar/Joint Registrar of Cooperative Societies functioning under the respective Co-operative Act must be above suspicion and function independently without external pressure. When an authority invested with the power purports to act on its own but in substance the power is exercised by external guidance or pressure, it would amount to non-exercise of power, statutorily vested. Large number of cases are coming up before this Court and the High Courts in the country challenging the orders of supersession and many of them are being passed by the statutory functionaries due to external influence ignoring the fact that they are ousting a democratically elected Board, the consequence of which is also grave because the members of the Board of Directors would also stand disqualified in standing for the succeeding election as well. 30. The Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision.
30. The Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with pre-conceived notion and shall not speak his masters’ voice, because the formation of opinion must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In our view, the impugned order will not fall in that category.” 90. Learned Advocate for the petitioners – Milk Union has relied upon the judgment of the Apex Court in the case of P. V. Jagannath Rao v/s. State of Orissa reported in AIR 1969 SC 215 and relied upon in Para-8. However, the issue in the particular para relied upon by the petitioners is test to be applied to determine the legal validity of the administrative act, where such administrative act by the Administrative Authority is both for authorized purpose and for unauthorized purpose. This question was dealt with by the Apex Court while considering the provision of the Commission of Inquiries Act and the Contempt of Courts Act. The impugned decision being not being administrative decision but quashi judicial decisions. The judgment may not apply to this case. 91. Learned Advocate for the petitioners – Milk Union has relied upon the judgment of the Apex Court in the case of Tarlochan Dev Sharma v/s. State of Punjab and Haryana reported in 2001 (6) SCC 260 . The Apex Court was considered the Show Cause Notice of removal of the appellant from the President of Municipal Counsel on one charge of the Show Cause Notice regarding the purchase of fogging machine as per the Rules and after completion of all the formalities. But not proceeding to purchase the same though the payment was received from the District Planning Board by the Municipal Counsel and thus, acting against the interest of the Municipal Counsel.
But not proceeding to purchase the same though the payment was received from the District Planning Board by the Municipal Counsel and thus, acting against the interest of the Municipal Counsel. In Para-6, the Apex Court has observed that in case of a democratic institution, the incumbent is entitled to hold the office for the term for which he has been elected unless the election is set aside by a prescribed procedure known to law. It is right of the returned candidate to hold and enjoy the office and discharge the duties related therewith during the term, which is valuable statutory right not only of the returned candidate but also of the constituency or the electoral college which he represented by him. Therefore, removal from such an office is a serious matter. Therefore, such process must also satisfied the requirements of natural justice, mere so, when it is provided for in the statute. While considering the Section- 22 of the Punjab Municipal Act, 1911, which provides for resignation or removal of the President. The Apex Court has observed under in Para-11, 14, 15 as under: “11. One of the requirements of the principles of natural justice, as incorporated in second proviso to Section 22, is that the reasons for the proposed removal have to be communicated to the person proceeded against. The purpose of such communication is to enable him to furnish an explanation of his conduct or his act or omission which is likely to be construed as an abuse of power. It is clear that the facts constituting gravamen of the charge have to be communicated. It follows as a necessary corollary therefrom that what has not been communicated or not relied on in the show cause notice as a ground providing reason for the proposed removal cannot be relied upon as furnishing basis for the order of removal. The person proceeded against under Section 22 of the Act has to be made aware of the precise charge which he is required to meet and therefore he must be apprised of the exact content of the abuse of power attributed to him. The authority taking decision must apply its mind also to the explanation furnished by the person proceeded against and this must appear from the order passed under Section 22. 12. xxxxxx 13. xxxxxx 14. It is interesting to view the present day bureaucrat-politician relationship scenario.
The authority taking decision must apply its mind also to the explanation furnished by the person proceeded against and this must appear from the order passed under Section 22. 12. xxxxxx 13. xxxxxx 14. It is interesting to view the present day bureaucrat-politician relationship scenario. A bureaucratic apparatus is a means of attaining the goals prescribed by the political leaders at the top. Like Alladins lamp, it serves the interest of whosoever wields it. Those at the helm of affairs exercise apical dominance by dint of their political legitimacy. . . . . . . . . The ministers make strategic decisions. The officers provide trucks, petrol and drivers. They give march orders. The minister tells them where to go. The officers have to act upon instructions from above without creating a fuss about it. [Effectiveness of Bureaucracy, The Indian Journal of Public Administration, April-June 2000 at p.165]. 15. In the system of Indian Democratic Governance as contemplated by the Constitution senior officers occupying key positions such as Secretaries are not supposed to mortgage there own discretion, volition and decision making authority and be prepared to give way or being pushed back or pressed ahead at the behest of politicians for carrying out commands having no sanctity in law. The Conduct Rules of Central Government Services command the civil servants to maintain at all times absolute integrity and devotion to duty and do nothing which is unbecoming of a Government servant. No Government servant shall in the performance of his official duties, or in the exercise of power conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior. In Anirudhsinhji Jadeja (1995) 5 SCC 302 , this court has held that a statutory authority vested with jurisdiction must exercise it according to its own discretion; discretion exercised under the direction or instruction of some higher authority is failure to exercise discretion altogether. Observations of this court in The Purtabpur Company Ltd., AIR 1970 SC 1896 , are instructive and apposite.
Observations of this court in The Purtabpur Company Ltd., AIR 1970 SC 1896 , are instructive and apposite. Executive officers may in exercise of their statutory discretions take into account considerations of public policy and in some context policy of Minister or the Government as a whole when it is a relevant factor in weighing the policy but they are not absolved from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for instructions by a superior to bind them. As already stated we are not recording, for want of adequate material, any positive finding that the impugned order was passed at the behest of or dictated by someone else than its author. Yet we have no hesitation in holding that the impugned order betrays utter non-application of mind to the facts of the case and the relevant law. The manner in which the power under Section 22 has been exercised by the competent authority is suggestive of betrayal of the confidence which the State Government reposed in the Principal Secretary in conferring upon him the exercise of drastic power like removal of President of a Municipality under Section 22 of the Act. To say the least what has been done is not what is expected to be done by a senior official like the Principal Secretary of a wing of the State Government. We leave at that and say no more on this issue.” 92. On the ground of principles of natural justice, the petitioners have relied upon the judgment of the Apex Court in the case of Municipal Committee Hoshiarpur v/s. Punjab State Electricity Board and others reported in 2010 (13) SCC 216 , it is contended that the when the provision of under Section-81 of Gujarat Co-operative Societies Act, 1961, requires the compliance that the principles of natural justice and in case of breach, it is not required for the petitioner to establish the prejudice. None the less, the prejudice to the petitioner in the present case, is writ large. When they would be even the supersession as well as the period disqualification. The Apex Court in Para-31 to Para-36 has held as under: “31. The principles of natural justice cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. Thus, they cannot be put in a strait-jacket formula.
When they would be even the supersession as well as the period disqualification. The Apex Court in Para-31 to Para-36 has held as under: “31. The principles of natural justice cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. Thus, they cannot be put in a strait-jacket formula. "Natural justice is not an unruly horse, no lurking landmine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential procedural propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. 32. The two rules of natural justice, namely, nemo judex in causa sua, and audi alteram partem now have a definite meaning and connotation in law and their contents and implications are well understood and firmly established; they are nonetheless non-statutory. The court has to determine whether the observance of the principles of natural justice was necessary for a just decision in the facts of the particular case. (Vide: The Chairman, Board of Mining Examination and Chief Inspector of Mines & Anr. v. Ramjee, AIR 1977 SC 965 ; Union of India & Anr. v. Tulsiram Patel, AIR 1985 SC 1416 ; and Managing Director, ECIL, Hyderabad v. B. Karunakar, AIR 1994 SC 1074 ). 33. There may be cases where on admitted and undisputed facts, only one conclusion is possible. In such an eventuality, the application of the principles of natural justice would be a futile exercise and an empty formality. (Vide: State of U.P. v. Om Prakash Gupta, AIR 1970 SC 679 ; S.L. Kapoor v. Jagmohan & Ors., AIR 1981 SC 136 ; and U.P. Junior Doctors' Action Committee v. Dr. B. Sheetal Nandwani & Ors., AIR 1991 SC 909 ). 34. However, there may be cases where the non-observance of natural justice is itself prejudice to a person and proof of prejudice is not required at all. In A.R. Antulay v. R.S. Nayak & Anr., (1988) 2 SCC 602 , this Court held as under: .. "....No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also the violation of the principles of natural justice renders the act a nullity. 35. Similarly, in S.L. Kapoor (supra), this Court held: ..
"....No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also the violation of the principles of natural justice renders the act a nullity. 35. Similarly, in S.L. Kapoor (supra), this Court held: .. "The nonobservance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. It ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced. 36. In view of the above, in case there is a non-compliance of a statutory requirement of law or the principles of natural justice have been violated under some circumstances, non-compliance of the aforesaid may itself be prejudicial to a party and in such an eventuality, it is not required that a party has to satisfy the court that his cause has been prejudiced for non-compliance of the statutory requirement or principles of natural justice.” 93. Learned Advocate for the petitioners- Milk Union has relied upon the decision of the Apex Court in the case of S. L. Kapoor v/s. Jagmohan and others reported in (1980) 4 SCC 379 , the Apex Court was dealing with the issue of supersession of the Municipality Committee wherein an opportunity was expeditiously provided in one of the provision of the Punjab Municipal Act, 1911, but the same was not provided for in the other provisions under the same statute necessarily. In such circumstances, it cannot be said that the observations of the Rule and Natural justice are excluded altogether. The Apex Court considered the case on merits by dealing with all the charges faced with by the Committee. In Para-16 and Para-17, the Apex Court has held as under: “16. Thus on a consideration of the entire material placed before us we do not have any doubt that the New Delhi Municipal Committee was never put on notice of any action proposed to be taken under Sec. 238 of the Punjab Municipal Act and no opportunity was given to the Municipal Committee to explain any fact or circumstance on the basis that action was proposed. If there was any correspondence between the New Delhi Municipal Committee and any other authority about the subject matter of any of the allegations, if information was given and gathered it was for entirely different purposes.
If there was any correspondence between the New Delhi Municipal Committee and any other authority about the subject matter of any of the allegations, if information was given and gathered it was for entirely different purposes. In our view, the requirements of natural justice are met only if opportunity to represent is given in view of proposed action. The demands of natural justice are not met even if the very person proceeded against has furnished the information on which the action is based, if it is furnished in a casual way or for some other purpose. We do not suggest that the opportunity need be a 'double opportunity' that is, one opportunity on the factual allegations and another on the proposed penalty. Both may be rolled into one. But the person proceeded against must know that he is being required to meet the allegations which might lead to a certain action being taken against him. If that is made known the requirements are met. We disagree with the finding of the High Court that the Committee had the opportunity to meet the allegations contained in the order of supersession. 17. Linked with this question is the question whether the failure to observe natural justice does at all matter if the observance of natural justice would have made no difference, the admitted or indisputable facts speaking for themselves. Where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its writ to compel the observance of natural justice, not because it approves the non observance of natural justice but because Courts do not issue futile writs. But it will be a pernicious principle to apply in other situations where conclusions are controversial, however, slightly, and penalties are discretionary.” 94. In the facts of the present case, it cannot be said that the Act on the part of the Registrar to consider the contention of the petitioner raised in this petition, could be treated as an explanation or answer to the Show Cause Notice thereby meeting with the principles of natural justice and therefore, even if the petitioner is made to answer to Show Cause Notice, there would be no difference in the outcome.
This Court is of the view that the in the facts of the present case, the petitioner has not filed reply on merits to the Show Cause Notice and the pendency of the petition before this Court as well as before the Apex Court, the petitioner was not reasonable belief. After the decision, in this pending petition, the petitioners will still be entitled to file their detail reply. As the short-circuiting this procedure, requirement by treating the petitioner to be an explanation to the Show Cause Notice is the procedural error by the Registrar and would not meet the requirement of principles of natural justice. 95. Learned Advocate for the respondents relied upon the decision in the case of Gautambhai Devshankar Dave v/s. State Of Gujarat, passed reported in 2004 (1) GLH 603 , which was in Letters Patent Appeal No.1268 Of 2003 against the decision of the learned Single Judge in Special Civil Application No.14317 of 2003, wherein the contention was raised that the learned Single Judge has held that the matter of supersession of Marketing Committee, the scope of judicial scrutiny is not that to the Appellate Court under Article-226 of the Constitution of India exercise the power of judicial scrutiny is only restricted to procedural aspect on the points of principles of natural justice. Learned Single Judge had also relied upon the decision of the Apex Court in the case of State of Maharashtra Vs. Babulal Kriparam Takkamore and others, reported in AIR 1967 SC 1353 , has held that one ground is sufficient to take a decision of supersession and if the State Government has exercised the power of supersession, the order of supersession would not be rendered illegal or beyond the scope and ambit of the power under Section-46 of the Act. When this decision was challenged on the principles of administrative law, the issue before the Division Bench was on the non-compliance that the principles of natural justice would not per se invalidated the order in this charge alleging such non-compliance only to show prejudice caused to him. It is contended on behalf of the respondents that the element of prejudice has to be related to the inaction only to the extent of not hearing the party thereby caused prejudice of natural justice. It is not necessary that an outcome of such procedure may be prejudicial to the party alleging non-compliance of natural justice.
It is contended on behalf of the respondents that the element of prejudice has to be related to the inaction only to the extent of not hearing the party thereby caused prejudice of natural justice. It is not necessary that an outcome of such procedure may be prejudicial to the party alleging non-compliance of natural justice. It is in this regard, the respondents have relied upon the observation of the Division Bench in Para-15. The Division Bench had gone in to the great detail with regard to the dates of adjournment and has particularly observed that the petitioner and his Advocate were intimated about the dates of the proceedings and thereafter on a particular date, the petitioner had himself presented and submitted the detail reply along with answers running into 336 pages and thereafter, the petitioner tried to seek the adjournment on the ground that the Notice was received only on 16-09-2003 about the hearing to take place on 17-09-2003, whereas the Division Bench found on record and admitted the position that the communication dated 10-09-2003, fixing the date on 17-09-2003, was forwarded to the petitioner. In the background in this case, the Authority had rejected the request for an adjournment and proceed with the hearing. Hence, what is important is that detail reply giving say of the petitioner herein to the Notice, was on record and therefore, it was necessary for the petitioner therein to indicate the prejudice. 96. In the present case, admittedly no reply on merits to the Show Cause Notice was filed by the petitioner and when consequence of the outcome of the proceedings under the Show Cause Notice was to be the grounds in terms of supersession and disqualification. This Court cannot take myopic view by segregating inaction only to the extent of not hearing the party and that the contention of the petitioner in the petition being treated as an ultimate of the petitioner in response to the Show Cause Notice, should only be treated to decide the question of prejudice being caused to the petitioner. 97. In response to the contention of the respondents on the ground of subsequent development where the administrator was appointed on behalf of the petitioner No.1 and petitioner No.1 would not have any locus to challenge the Show Cause Notice as under the action provided under Section-81, it is only the members, which would be affected. 98.
97. In response to the contention of the respondents on the ground of subsequent development where the administrator was appointed on behalf of the petitioner No.1 and petitioner No.1 would not have any locus to challenge the Show Cause Notice as under the action provided under Section-81, it is only the members, which would be affected. 98. The petitioner has placed reliance on the judgment of this Court in the case of Harijan Joitaram Danabhia v/s. Additional Registrar passed in the Special Civil Application No. 871 of 2004 reported in 2005 (8) GLH 689. Reliance is placed on Para-12 in this regard. Learned Advocate for the private respondent draws attention to the facts observed in Para-10 and submitted that though the Society operates through its Executive Committee, the private respondents were also part of the Executive Committee, but there is no Resolution passed after the circulation of agenda as to whether the Show Cause Notice or the decision on such Show Cause Notice should be challenged by the petitioner No.1 – Society. In absence of such Resolution, the judgment will have no applicability. In this regard, it is necessary to reproduce what is held in this judgment in para-12, which is as under: “12. In my view, as per section 153 of the Act, a statutory appeal is provided against the order under section 81 of the Act. It is the managing committee of the society which stands superseded in view of the order passed under section 81 of the Act but thereby the society can not be said as the third party to the litigation. Even if it is considered that the right of the members of the managing committee is adversely affected by the order under section 81 of the Act, but if the majority of the members of the Managing Committee have taken decision to challenge the same and for such purpose if the secretary of the society is authorised and if the secretary of the society has preferred the appeal on behalf of the society, it can not be said that the appeal was not at all competent before the Additional Registrar.
In a given case, the authority may decline to exercise the power at the instance of the society, in case the appeal is preferred, on the ground that the revenue of the society should not suffer on account of carrying the matter into further litigation or it may also decline to exercise the power on the ground that the aggrieved or members who are removed from the power have chosen not to prefer the appeal, but, on such a contingency it can not be said that the appeal is not at all competent if filed by the society whose managing committee is to be superseded as per the order under section 81 of the Act.” 99. Considering the facts of the present case, when the petition was filed at the stage of issuance of the Show Cause Notice, the petition was liable to be maintained when co-petitioners were the majority of the Executive Committee. It is only pending the petition that an order of supersession was passed and the administrator was appointed and such order was also the subject matter of challenge in this very petition 100. In support of the contention that the District Registrar is a member of the Managing Committee, which is sought to be removed by the impugned order, the District Registrar is not competent to Act under Section-81. Learned Advocate for the petitioners had relied upon the unreported decision in case of Pravinbhai Mohanbhai Raiyani v/s. State of Gujarat passed in Special Civil Application No. 10310 of 2009, attention is drawn to Para-3 of the judgment. Considering the provision of Section-81 and the definition of the term ‘Registrar’ as appearing in section 2(17) read with section 3 of the Act, the Court concluded that there would be no distinction between District Registrar and the Registrar and hence the impugned order made by respondent No.2 Authority cannot be sustained. 101. Against this on behalf of the respondent, reliance is placed in the case of Vipulbhai Mansinhbhai Chaudhary v. State of Gujarat & Others reported in 2015 SCC Online Guj 1930, wherein by accepting the arguments on behalf of the State that when the Registrar has not himself participated in the meeting, he could be barred from the exercise this jurisdiction.
Against this on behalf of the respondent, reliance is placed in the case of Vipulbhai Mansinhbhai Chaudhary v. State of Gujarat & Others reported in 2015 SCC Online Guj 1930, wherein by accepting the arguments on behalf of the State that when the Registrar has not himself participated in the meeting, he could be barred from the exercise this jurisdiction. The Court had proceeded to held that when the Registrar has not participated in the decision making process of the Managing Committee, he is competent to issue notice. Of course, issuance of such Notice, in that case, under Section- 76B of the Gujarat Co-operative Societies Act, 1961, which pertains to removal of officer on persistent default or negligent in performance of the duties imposed under the Act. It is submitted that the same decision was the subject matter in the decision of the Hon’ble Apex Court in in Special Leave to Appeal No.4668 of 2015 dated 20-03-2015, Special Leave Petition came to be disposed of by making some observations keeping it open for the petitioner to approach the appropriate forum to challenge the validity of the order. However, the judgment by the Division Bench reported in the case of Vipulbhai Mansinhbhai Chaudhary (supra), was not interfered. Moreover, considering the fact that when in decision of the Division Bench of this Court in very case of the petitioners in the case of Mehsana District Milk Producers Union Ltd v/s. Registrar Cooperative Societies passed in Letters Patent Appeal no. 887 of 2017 dated 03/05/2018, in Para-9 and Para-10, the Division Bench has held as under: “9. The contention of the learned counsel for the petitioners that the District Registrar is on the Board of the Directors of the Union as Nominee of the Registrar, therefore, he cannot inquire into any affairs and he cannot submit a report. Further, reliance is placed on the Government Resolution dated 15.04.2005 and Notification dated 26.04.2005 issued by the Government hereby it was resolved that in the society where the Registrar is a Member of the Board of Directors, a separate committee is constituted to exercise powers of the Registrar under various sections including Section 81 of the Act. Thus, the Registrar is acting as a Judge of his own cause. The said submission is misconceived.
Thus, the Registrar is acting as a Judge of his own cause. The said submission is misconceived. The District Registrar is one of the Directors and does not preclude the Registrar of Cooperative Societies to initiate proceedings under Section 81 of the Act. If the proposition as canvassed is accepted, every cooperative society would frame byelaws making such prescriptions for the District Registrar as Board of Directors and the operation of Section 81 of the Act would, in such case, become complex, which can never be the intent of the statutory provisions. 10. It is further required to be noted that Government Resolution dated 15.04.2005 was issued in pursuance to Rule 39B of the Rules. However, Rule 39B of the Rules applies to the Federal Cooperative Societies registered under the Act and specified in table below the said Rule and for supervision of such Federal Cooperative Societies, committee is constituted. If we carefully examine the table given below the said Rule, it is revealed that twelve Federal Cooperative Societies are referred in the said table. However, the petitioner Union, which is a Milk Cooperative Society, is not mentioned in the said list. Thus, Circular dated 26.04.2005 and Government Resolution dated 15.04.2005 would not be applicable to the facts of the present case.” 102. Though this decision is the subject matter of challenge as the implementation and operation of such judgment is reportedly not stayed by the Apex Court, this Court is of the view that the same would continue to apply with force. Therefore, no interference can be made on this contention. 103. On behalf of the respondent No.1, reliance is placed on the decision of the Apex Court in the case of Roshan Lal Mehra vs Ishwar Das reported in AIR 1962 SC 646 , in support of the argument that when time and again, the petitioners were called for submitting their reply and when even this Court had indicated in its order. Pending the petition to file reply and yet the petitioners have not filed their reply, the Registrar was justified in proceedings ahead. Attention is drawn to Para-4 and 10 of the judgment.
Pending the petition to file reply and yet the petitioners have not filed their reply, the Registrar was justified in proceedings ahead. Attention is drawn to Para-4 and 10 of the judgment. It is submitted that in the facts of the case before the Apex Court, similar situation as in this case, had arisen where the Landlord was reportedly given an opportunity to produce the evidence before the Rent Controller and the Advocate appearing for the Landlord gave an application for postponement of the case on the ground that certain proceedings were pending before the Subordinate Court, Delhi, where again time was given, but the Landlord was choose to remain absent in spite of repeated intimate to him. It is submitted that this kind of stand of the Landlord, it would not lie in the mouth of the Landlord to say that inquiries by the Rent Controller were made in his absence and therefore, bad. In that facts situation, the Apex Court held that in the circumstances of that case, holding that there has been violation of principles of natural justice, would be to put the premium on the recalcitrance of a party. Therefore, if the parties choose to remain absent, cannot be heard to say that he had no opportunity of being present. 104. In the opinion of the Court, facts in this case are great variance from the facts before the Apex Court in the aforesaid judgment. The subject matter before the Apex Court arose from the Notice issued by the Rent Controller to the Landlord and Landlord made an application for postponement of the case and in such application, the Landlord had brought on record the fact that the Landlord himself had applied for fixation of standard rent under Section-7 of the Control Act, 1947 before the Court of the Subordinate Judge, Delhi and as applications are pending, the proceedings for determining the identical question of fixation of standard rent by the Rent Controller under Section-7A should be stayed. 105. This basic fact in the opinion of the Court can never be compared with the present case, where the Act of the respondent No.1 in issuance of the Show Cause Notice was the subject matter in the petition before this Court which included with the respondent No.1 had no jurisdiction to issue the Notice.
105. This basic fact in the opinion of the Court can never be compared with the present case, where the Act of the respondent No.1 in issuance of the Show Cause Notice was the subject matter in the petition before this Court which included with the respondent No.1 had no jurisdiction to issue the Notice. When the Court was yet to consider such question and in the meantime, when the petitioners sought time and was able to give justifiable reasons for such adjournment, especially reasons of pendency of petition before this Court and the petition before the Supreme Court, the conduct of the petitioners in seeking adjournment cannot be considered to be recalcitrance attitude or non-cooperation of the petitioner. This while still be more evident if the duration of event as observed in the proceedings paras are taken into consideration. It is not as if and the proceedings sought to be initiated under Section-81 have been prolonged unreasonable and for long duration. 106. In view of the aforesaid discussion, the Court is of the view that the procedure adopted by the respondent No.1 and the impugned order dated 05- 09-2020 does not stand test of propriety, the principles of natural justice for filling an adequate reply and an opportunity of hearing is not complied. The procedure adopted and as consequence, the impugned order is undertaken in hot haste and amounts to overreaching the Court proceedings. Therefore, the impugned order deserves to be interfered with. In the conclusion, the Court is inclined to hold as under: (1) The respondent No.1 is within his jurisdiction to issue the Show Cause Notice under Section-81 and take out the proceedings accordingly. (2) The charges of the Show Cause Notice are serious in nature and would be covered under the contingency specified under Section-81. (3) The impugned order dated 05-09-2020 by the respondent No.1 - Registrar is ordered to be quashed and set aside. (4) The respondent No.1-Registrar is directed to undertake proceedings afresh pursuant to the Show Cause Notice dated 27-07-2020 under Section-81. (5) The respondent No.1- Registrar shall follow the following timeline. (i) On or before 13-11-2020, the petitioners to apply for list of the necessary documents to file their response. (ii) On 25-11-2020 the Respondent No.1 shall furnish all the documents as per the application above. (iii) The petitioners shall file their respective reply on or before 03-12-2020.
(5) The respondent No.1- Registrar shall follow the following timeline. (i) On or before 13-11-2020, the petitioners to apply for list of the necessary documents to file their response. (ii) On 25-11-2020 the Respondent No.1 shall furnish all the documents as per the application above. (iii) The petitioners shall file their respective reply on or before 03-12-2020. (iv) On 05-12-2020, the Respondent No.1 to commence the hearing and give sufficient opportunity of hearing to all the parties. (v) Arguments to be concluded by 11-12-2020. (vi) Pronounce the final orders on 21-12-2020. (vii) Pursuant to the impugned order as the Administrator is already appointed and as the Court is scheduled the hearing and disposal of the Show Cause Notice under Section-81 of Gujarat Co-operative Societies Act, 1961, the Court does not deem it fit to change this position, subject to the final outcome of the Show Cause Notice. However, the Administrator shall refrain from taking major policy decision and shall restrict his working to the day to day affair of the Society. (viii) The Registry may now permit the petitioners to formally amend the petition physically. 107. The petition stands allowed to aforesaid extent. Rule is made absolute to the aforesaid extent. No order as to costs. 108. After the pronouncement, learned Advocate General, Shri Kamal Trivedi as well as learned Senior Advocate, Shri Prakash Jani on behalf of the respondents pray for the stay of the implementation and operation of this judgment. However, considering the timeline fixed by this Court under this Judgment, request for stay is refused. Direct service is permitted.