AANGALDHARA MILK PRODUCER CO-OPERATIVE SOCIETY LIMITED v. STATE OF GUJARAT
2021-12-21
BHARGAV D.KARIA
body2021
DigiLaw.ai
JUDGMENT : BHARGAV D. KARIA, J. 1. Heard learned Senior Advocate Mr. B.S.Patel for learned advocate Mr. Chirag B. Patel for the petitioners and learned Assistant Government Pleader Mr. Dhawan Jayswal for the respondent-State. 2. RULE returnable forthwith. Learned Agp Mr. Jayswal waives service of rule on behalf of the respondent-State. 3. By this petition under Article 226 of the Constitution of India the petitioner has prayed for the following reliefs: “A. Your Lordship may be pleased to issue a writ of prohibition/mandamus and/or any other appropriate writ, order or direction quashing and setting aside the show cause notice dated 12-16/12/2019 at Annexure A tot eh petition passed by respondent No.2. B. Your Lordship may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction quashing and setting aside the inquiry report prepared by respondent No.3 on 29.11.2019 at Annexure B to the petition. C. Your Lordship may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction commanding respondent No.1 to instruct all the subordinate Registrars not to touch the election matter in any co-operative society as per the law settled by the Hon’ble Court; D. Pending admission, hearing and final disposal of the petition, Your Lordship may be pleased to stay the operation, execution and implementation of the proceedings in pursuance of the show cause notice dated 12-16/12/2019 issued by respondent No.2 at Annexure A to the petition; E. Cost of this petition may kindly be awarded; F. Any other and further relief or reliefs to which this Hon’ble Court deemed fit, in the interest of justice; may kindly be granted.” 4. It is the case of the petitioner that … 4.1. The petitioner No.1 is a co-operative society registered under the Gujarat Cooperative Societies Act, 1961. Petitioner Nos. 2 to 9 are elected members of the petitioner society. 4.2) The election of the Managing Committee was held on 20.05.2019. One Amrutbhai Devjibhai Patel, petitioner No.6 has been duly elected as the Chairman of the society in the Annual General Meeting on 19.06.2019 and a report of the meeting has been forwarded to respondent No.2-District Registrar. 4.3. The District Registrar Co-operative Societies-respondent No.2 appointed the Cooperative Officer-respondent No.3 as Inquiry Officer without affording opportunity of hearing to the petitioner-society to conduct inquiry that whether the petitioner Nos.
4.3. The District Registrar Co-operative Societies-respondent No.2 appointed the Cooperative Officer-respondent No.3 as Inquiry Officer without affording opportunity of hearing to the petitioner-society to conduct inquiry that whether the petitioner Nos. 2 to 9 were qualified to contest the election or not. 4.4 Upon receipt of the report from respondent No.3, respondent No.2 issued a show-cause notice dated 12.12.2019 for removal as well as disqualification of the petitioners from the committee of the petitioner No.1- Society under section 76B of the Gujarat Cooperative Societies Act, 1961. 5. Learned Senior Advocate Mr. Patel submitted that respondent No.2-District Registrar of the Co-operative Societies has no jurisdiction to issue impugned show-cause notice under section 76B of the Gujarat Co-operative Societies Act, 1961 [for short ‘the Act,1961’] for alleged contravention of the By-law No. 9(A)(4) of the petitioner-society as a complaint was filed before the respondent No.2 to cancel the nomination forms of twelve committee members as they were not qualified to contest the election of Executive Committee of the petitioner-society in view of the By-law No.9. 6.It was submitted that this Court in case of Bhadreshkumar Ramanlal Patel and ors vs. State of Gujarat and ors reported in 1999 (3) GLR 2549 has held that the remedy for taking action to challenge the election of any person to an office to is to file election petition and not initiation of proceedings under section 76B of the Act, 1961. It was therefore submitted that if the authority or the other person is aggrieved by the election of the members of the Executive Committee of the petitioner-society as it pertains to Constitution of the petitioner-society, remedy would be under section 96 of the Act, 1961. 7. Learned Senior Advocate Mr. Patel also relied upon the decision of the Supreme Court in case of Union of India vs. Vicco Laboratories reported in (2007) 13 SCC 270 to submit that under Article 226 of the Constitution of India, this Court can exercise discretion of judicial review if the show-cause notice is without jurisdiction. 8.
7. Learned Senior Advocate Mr. Patel also relied upon the decision of the Supreme Court in case of Union of India vs. Vicco Laboratories reported in (2007) 13 SCC 270 to submit that under Article 226 of the Constitution of India, this Court can exercise discretion of judicial review if the show-cause notice is without jurisdiction. 8. On the other hand, learned AGP Mr Jayswal submitted that the petitioner has challenged the show-cause notice issued under section 76B of the Act, 1961 and the petitioner was called upon by the District Registrar to reply as to why the proceedings for removal of the officers of the Executive Committee of the petitioner-society should not be initiated and hence this petition should not be entertained. 9. It was submitted that the petitioner can file a reply by raising objections to issuance of such show-cause notice before the authority instead of raising such grievances before this Court under Article 226 of the Constitution of India. 10. In support of his submissions learned AGP Mr. Jayswal relied upon the decision of Division Bench of this Court in case of Patel Gaurangbhai Naranbhai vs. State of Gujarat rendered on 07.05.2021 in Letters Patent Appeal No. 430 of 2020 in Special Civil Application No. 7539 of 2020 to submit that the Division Bench of this Court, after considering the legal position has held that the Single Judge should not have entertained the writ petition. It was for the petitioner to file appropriate reply to the show-cause notice taking up all the contentions available in law and the Adjudicating Authority should consider the same in accordance with law. 11. Having heard learned advocates for the respective parties and having gone through the material on record it appears that the impugned show-cause notice dated 16.12.2019 issued under section 76B of the Act, 1961 is issued only on the ground that the petitioner Nos.02 to 09 who are the members of the Executive Committee of the petitioner No.1- Society, are not qualified to be appointed as per the By-law No. 9(A)(4) of the petitionersociety as the relatives of the Directors of the petitioner Nos. 02 to 09 are the employees of the petitioner-society. 12. Therefore, the question which arises for consideration is whether the impugned showcause notice can be issued as per the provisions of the section 76B of the Act, 1961 and or it is without jurisdiction.
02 to 09 are the employees of the petitioner-society. 12. Therefore, the question which arises for consideration is whether the impugned showcause notice can be issued as per the provisions of the section 76B of the Act, 1961 and or it is without jurisdiction. It would therefore be germane to refer to the provision of section 76B which reads as under: “76B. Removal of Officer:- (1) If, in the opinion of the Registrar, any officer makes persistent default or is negligent in performance of the duties imposed on him by this Act or the rules or the byelaws or does anything which is prejudicial to the interest of the society or where he stands disqualified by or under this Act the Registrar may, after giving the officer an opportunity of being heard, by order remove such officer and direct the society to elect or appoint a person or a qualified member in the vacancy caused by such removal and the officer so elected or a appointment shall hold office so long only as the officer in whose place he is elected would have held if the vacancy had not occurred. (2) The Registrar may, by order, direct that the officer so removed shall be disqualified to hold or to contest election for any office in the society from which he is removed in any other society for a period not exceeding four years form the date of the order and such officer shall disqualified accordingly.” 13. The issue raised in this petition is not res integra in view of the decision of this Court in case of Bhadreshkumar Ramanlal Patel and ors (supra) wherein in similar facts when the show-cause notice was issued under section 76B of the Act, 1961 pertaining to election of the respondents in that case to an office in the society, it was held as under: “8. It is not the case of the petitioner that the alleged disqualification has been incurred by the respondent No. 5 after he was elected as the member of the Board of Directors of the respondent No. 4-Society.
It is not the case of the petitioner that the alleged disqualification has been incurred by the respondent No. 5 after he was elected as the member of the Board of Directors of the respondent No. 4-Society. If we go by the pleadings of the petitioner in this Special Civil Application coupled with the fact that it is also not the contention of the learned Counsel for the petitioner that the respondent No. 5 has incurred disqualification as alleged against him, after his election as the member of the Board of Directors of the Society. The only inference falls from that is that he was already disqualified to contest election for the member of the Board of Directors of the respondent No. 4-Society. The first meeting of the Board of Directors was held on 6-1-1999 and if we go by the facts of this petition, the petitioners came to know about this disqualification of the respondent No. 5 on 7-1-1999. From Section 145F of the Act, I find that if what the petitioners are alleging against the respondent No. 5 is correct then the respondent No. 5 shall be disqualified from being elected as and for being a member of the Committee of the specified society. It is not in dispute that the respondent No. 4 is a specified society and the respondent No. 5 is a salaried employee of a society other than the society of the employees themselves. The Section 145-U provides remedy for adjudication of the disputes relating to election of the specified society. Dispute relating to the election of the specified society has to be referred to the Tribunal. As stated earlier, in case the respondent No.5 was already suffering from this disqualification for being elected as and for being a member of the Committee of the specified society and this dispute, there cannot be two views, relates to election and the remedy for the petitioners in this matter would have been only to file election petition before the Tribunal in view of the provisions of Section 145-U of the Act. The approach of the Registrar in this case not to entertain the complaint of the petitioners made against the respondent No. 5 and to observe that only election petition is appropriate remedy cannot be said to be arbitrary or perverse or contrary to the provisions of the Act, 1961.
The approach of the Registrar in this case not to entertain the complaint of the petitioners made against the respondent No. 5 and to observe that only election petition is appropriate remedy cannot be said to be arbitrary or perverse or contrary to the provisions of the Act, 1961. If we go by the provisions of Section 76B of the Act, 1961, coupled with the dispute raised by the petitioners relating to an election of the member of the Board of Directors of the respondent-society and the provisions of the Section 145U of the said Act in case where the member of the Board of Directors of the Society was already disqualified for being elected as and for being elected as member of the Committee of any specified society this case will certainly not fall within four corners of Section 76B of the Act. It is not the case of the petitioner nor the contention of the learned Counsel for the petitioner before this Court that the dispute which has been raised by the petitioners against the respondent No. 5 does not relate to any election. So this is not in dispute that the complaint made by the petitioners against the respondent No. 5 before the District Registrar is in respect of a dispute relating to election of a person as a member of the Board of Directors of the specified society and the fact that the respondent No. 5 was already suffering from this disqualification earlier to the date of filing of his nomination, the only appropriate and available remedy for decision or/and the adjudication of this dispute is as provided under Section 145U of the Act, 1961. A conjoint reading of Sections 76B and 145U of the Act, 1961 gives out that these provisions work and operate in altogether two different and distinct fields. Though dividing line of the jurisdiction of the authorities under Sections 76B and 145U of the Act, 1961 may be thin but it clearly remarks the scope of the jurisdiction of the authorities under these two provisions to be exercised. Section 76B of the Act, 1961 is very specific and clear and only in case where after election a member of the Board of Directors of the specified society incurs any disqualification to continue as a member, the power vested with that authority to remove that member from the office.
Section 76B of the Act, 1961 is very specific and clear and only in case where after election a member of the Board of Directors of the specified society incurs any disqualification to continue as a member, the power vested with that authority to remove that member from the office. But, where the person who has been elected as a member, was not qualified to contest the election for the office of the member of the Board of Directors of the society and but still his nomination was accepted and he has been elected then only remedy available to the aggrieved party is to file an election petition before the Tribunal as provided under Section 145U of the Act, 1961. In view of this position of the law and the facts of this case the District Registrar has not committed any illegality whatsoever in passing of the impugned Order.” 14. So far as the preliminary objections raised on behalf of the learned AGP with regard to the maintainability of the petition is concerned in view of the above legal position that the remedy for disqualification of the petitioner No.2 to 9 would be to file appropriate proceedings under section 96 of the Act, 1961 and not under section 76B of the Act, 1961 apparently the impugned show-cause notice is without jurisdiction. In such circumstances, as held by the Apex Court in case of Union of India vs. Vicoo Laboratories (supra), this Court would be entitled to have judicial review of such matter as the Apex Court has held as under: “31. Normally, the writ court should not interfere at the stage of issuance of show cause notice by the authorities. In such a case, the parties get ample opportunity to put forth their contentions before the concerned authorities and to satisfy the concerned authorities about the absence of case for proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the concerned authorities is the normal rule. However, the said rule is not without exceptions. Where a Show Cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show cause notice.
However, the said rule is not without exceptions. Where a Show Cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show cause notice. The interference at the show cause notice stage should be rare and not in a routine manner. Mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out.”(emphasis supplied) 15. Similarly, the Division Bench of this Court in case of Patel Gaurangbhai Naranbhai (supra) has also considered this aspect with regard to scope of interference with regard to issuance of show cause notice as under: “27. The scope of interference with regard to show cause notices is well settled by catena of decisions of the Supreme Court. If a show cause notice is issued under a statutory provision, the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. [See: 'STATE OF UTTAR PRADESH VS. BRAHMA DUTTA SHARMA AND ANOTHER', AIR 1987 SC 943 ]. It has further been held that unless show cause notice is ex facie a nullity or is totally without jurisdiction i.e., where the commencement of the proceeding itself is unauthorized, at that stage, it should be shown that authority had no power or jurisdiction to enter upon enquiry and in all other cases, the party must respond to the show cause notice. [See:'EXEUCTIVE ENGINEER, BIHAR HOUSING BOARD VS. RAMESH KUMAR SINGH', (1996) 1 SCC 327 ]. In 'UNION OF INDIA VS. HINDUSTAN DEVELOPMENT CORPORATION LTD.,', (1998) 9 SCC 576 , it has been that where the show cause notice requires investigation of facts, the Court should not interfere and the matter should be decided by the authorities. It has been held where the authority lacks jurisdiction, show cause notice can be quashed. [See:'UNION OF INDIA VS. HINDALCO INDUSTRIES', (2003) 5 SCC 194 ]. Similar view has been taken in 'DIVISIONAL FOREST OFFICER VS. M.RAMLINGA REDDY', (2007) 9 SCC 286 and 'UNION OF INDIA VS. VICO LABORATORIES', (2007) 13 SCC 270 .
It has been held where the authority lacks jurisdiction, show cause notice can be quashed. [See:'UNION OF INDIA VS. HINDALCO INDUSTRIES', (2003) 5 SCC 194 ]. Similar view has been taken in 'DIVISIONAL FOREST OFFICER VS. M.RAMLINGA REDDY', (2007) 9 SCC 286 and 'UNION OF INDIA VS. VICO LABORATORIES', (2007) 13 SCC 270 . It has further been held that High Court should be extremely circumspect while dealing with a writ petition, in which a challenge is made to the show cause notice. [See:'COMMISSIONER OF CUSTOMS VS. COVAI RAJA AND METALS (INDIA) (P) LTD.,', (2018) 2 SCC 398]. 28. Thus, in some very rare and exceptional cases, the High Court may quash a show-cause notice if it is found to be wholly without jurisdiction or for some other reason, if it is wholly illegal. However, ordinarily, the High Court should not interfere at the stage of a show-cause notice , more particularly, if there is some jurisdictional fact involved in the show-cause notice. To put it in other words, if a show-cause notice has been challenged by way of a writ application, then in such circumstances, the Writ Court should look into two vital aspects, i.e, (i) whether the show-cause notice has been issued by the authority empowered in law. In other words, whether the authority is competent to issue such show-cause notice and (ii) whether the show-cause notice issued is with or without jurisdiction. If the authority, issuing the show-cause notice, has no power to issue such notice, then there should not be any problem for a Writ Court to quash the notice. However, if the authority has the power in law to issue the notice, then the second consideration should be whether the same could be said to be without jurisdiction or not. To determine the issue of jurisdiction, what is necessary for the Court to first look into whether there exists any “jurisdictional fact”, before the authority assumes jurisdiction over a particular matter. If the jurisdictional fact exists, the authority can proceed with the case and take an appropriate decision in accordance with law.” 16. In view of the above conspectus of law and considering the facts of the case, the impugned show-cause notice dated 16.12.2019 issued under section 76B of the Act, 1961 is without jurisdiction as it cannot be said that the petitioner Nos.
In view of the above conspectus of law and considering the facts of the case, the impugned show-cause notice dated 16.12.2019 issued under section 76B of the Act, 1961 is without jurisdiction as it cannot be said that the petitioner Nos. 2 to 9 have made persistent defaults or are negligent in performance of their duty imposed on them by Act of 1961 or the Rules or the By-laws inasmuch as the only basis on which the impugned show cause notice is issued is for violation of by-laws No. 9(A)(4) of the petitioner-society by the petitioner No. 2 to 9 to contest the election of the Executive Committee. In such circumstances, as held by this Court in case of Bhadreshkumar Ramanlal Patel (Supra) remedy would be to file appropriate proceedings under section 96 of the Act 1961 as the scope of section 76B and section 96 are totally different and they operate in distinct field. The provisions of section 76B of the Act, 1961 is having a very specific and clear scope and only case where after election the member of the Board of Directors or the Executive Committee incurs makes a persistent default or is negligent in performing duty contrary to Act, Rules or Bylaws then only the provisions of section 76B of the Act, 1961 can be invoked. Section 76B of the Act, 1961 cannot be invoked to remove a member who is an officer as per the provision of section 2(14) of the Act, 1961. 17. In view of the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned show-cause notice dated 16.12.2019 is hereby quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs.